Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 20-F
☐
REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
☒
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2024
OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
☐
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of event requiring this shell company report
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NUMBER 1-12610
Grupo Televisa, S.A.B.
(Exact name of Registrant as specified in its charter)
N/A
(Translation of Registrant’s name into English)
United Mexican States
(Jurisdiction of incorporation or organization)
Av. Vasco de Quiroga No. 2000
Colonia Santa Fe
01210 Mexico City
Mexico
(Address of principal executive offices)
Luis Alejandro Bustos Olivares
Grupo Televisa, S.A.B.
Av. Vasco de Quiroga No. 2000
Colonia Santa Fe
01210 Mexico City
Mexico
Telephone: (011 52) (55) 5022 5899
Facsimile: (011 52) (55) 5261 2546
E-mail: labustoso @televisa.com.mx
(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)
Securities registered or to be registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol
Name of each exchange on which registered
Series “A” Shares, without par value (“Series “A” Shares”)
New York Stock Exchange (for listing purposes only)
Series “B” Shares, without par value (“Series “B” Shares”)
New York Stock Exchange (for listing purposes only)
Series “L” Shares, without par value (“Series “L” Shares”)
New York Stock Exchange (for listing purposes only)
Dividend Preferred Shares, without par value (“Series “D” Shares”)
New York Stock Exchange (for listing purposes only)
Global Depositary Shares (“GDSs”), each representing five
Ordinary Participation Certificates
(Certificados de Participación Ordinarios) (“CPOs”)
TV
New York Stock Exchange
CPOs, each representing twenty-five Series “A” Shares,
twenty-two Series “B” Shares, thirty-five Series “L” Shares
and thirty-five Series “D” Shares
New York Stock Exchange (for listing purposes only)
Securities registered or to be registered pursuant to Section 12(g) of the Act: None.
Exhibit 99.1
Table of Contents
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None.
The number of outstanding shares of each of the issuer’s classes of capital
or common stock as of December 31, 2024 was:
111,620,184,139 Series “A” Shares
48,742,370,225 Series “B” Shares
77,544,621,681 Series “L” Shares
77,544,621,681 Series “D” Shares
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
☒ Yes ☐ No
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934.
☐ Yes ☒ No
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
☒ Yes ☐ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T
(§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
☒ Yes ☐ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of
“large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer ☒
Accelerated filer ☐
Non-accelerated filer ☐
Emerging Growth Company ☐
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the
extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. ☐
† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification
after April 5, 2012.
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial
reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
☒ Yes ☐ No
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the
correction of an error to previously issued financial statements.
☐ Yes ☒ No
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the
registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b)
☐ Yes ☒ No
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
U.S. GAAP ☐
International Financial Reporting Standards as issued by the International
Accounting Standards Board ☒
Other ☐
If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.
☐ Item 17 ☐ Item 18
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
☐ Yes ☒ No
Table of Contents
1
Forward-Looking Statements and Risk Factors Summary
2
Part I
4
Item 1.
Identity of Directors, Senior Management and Advisers
4
Item 2.
Offer Statistics and Expected Timetable
4
Item 3.
Key Information
4
Selected Financial Data
4
Dividends
7
Exchange Rate Information
7
Risk Factors
7
Item 4.
Information on the Company
29
History and Development of the Company
29
Capital Expenditures
30
Business Overview
30
Item 5.
Operating and Financial Review and Prospects
62
TelevisaUnivision Transaction
62
Spin - off of Certain Businesses of Our Other Businesses Segment
63
Preparation of Financial Statements
63
Results of Operations
64
Item 6.
Directors, Senior Management and Employees
89
Item 7.
Major Stockholders and Related Party Transactions
104
The Major Stockholders
105
Related Party Transactions
105
Item 8.
Financial Information
107
Item 9.
The Offer and Listing
107
Trading on the Mexican Stock Exchange
107
Item 10.
Additional Information
110
Mexican Securities Market Law
110
Bylaws
111
Taxation
122
Item 11.
Quantitative and Qualitative Disclosures About Market Risk
128
Item 12.
Description of Securities Other than Equity Securities
132
Global Depositary Shares
132
Part II
133
Item 13.
Defaults, Dividend Arrearages and Delinquencies
133
Item 14.
Material Modifications to the Rights of Security Holders and Use of Proceeds
133
Item 15.
Controls and Procedures
133
Evaluation of Disclosure Controls and Procedures
133
Management’s Annual Report on Internal Control Over Financial Reporting
133
Changes in Internal Control Over Financial Reporting
133
Item 16.
Audit Committee Financial Expert
134
Code of Ethics
134
Principal Accountant Fees and Services
134
Audit Committee Pre-approval Policies and Procedures
135
Exemptions from the Listing Standards for Audit Committees
135
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
135
Purchases of Equity Securities by the Company
136
Purchases of Equity Securities by Special Purpose Trust Formed in Connection with Long - Term Retention Plan (1)
136
Change in Registrant’s Certifying Accountant
137
Corporate Governance
137
Mine Safety Disclosure
138
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
138
Cybersecurity
139
Part III
141
Item 17.
Financial Statements
141
Item 18.
Financial Statements
141
Item 19.
Exhibits
141
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2
We publish our financial statements in accordance with International Financial Reporting Standards, or IFRS Accounting Standards, as issued by the
International Accounting Standards Board, or IASB, which differ in some significant respects from generally accepted accounting principles in the United
States, or U.S. GAAP, and accounting procedures adopted in other countries.
Unless otherwise indicated, (i) information included in this annual report is as of December 31, 2024 and (ii) references to “Ps.” or “Pesos” in this
annual report are to Mexican Pesos and references to “Dollars,” “U.S. Dollars,” “U.S. dollars,” “$” or “U.S.$” are to United States dollars.
In this annual report, “we,” “us,” “our,” “Company,” “Grupo Televisa” or “Televisa” refer to Grupo Televisa, S.A.B. and, where the context requires,
its consolidated entities. “Group” refers to Grupo Televisa, S.A.B. and its consolidated entities.
Forward-Looking Statements and Risk Factors Summary
This annual report and the documents incorporated by reference into this annual report contain forward-looking statements. In addition, we may from
time to time make forward-looking statements in reports to the SEC, on Form 6-K, in annual reports to stockholders, in prospectuses, press releases and
other written materials and in oral statements made by our officers, directors or employees to analysts, institutional investors, representatives of the media
and others. Words such as “believe”, “anticipate”, “plan”, “expect”, “intend”, “seek”, “potential”, “target”, “estimate”, “project”, “predict”, “forecast”,
“guideline”, “may”, “should”, “could”, “will” and similar words and expressions are intended to identify forward-looking statements, but are not the
exclusive means of identifying these statements. Examples of these forward-looking statements include, but are not limited to:
●
estimates and projections of financial results, cash flows, capital expenditures, dividends, capital structure, financial position or other financial
items or ratios;
●
statements of our plans, objectives or goals, including those relating to anticipated trends, competition, regulation and rates;
●
statements concerning our current and future plans regarding our investment in Grupo de Telecomunicaciones de Alta Capacidad, S.A.P.I. de C.V.,
or GTAC;
●
statements concerning our future plans, including capital expenditures, regarding the pay-TV, broadband and/or telephony services provided by
our subsidiaries;
●
statements concerning our transactions with TelevisaUnivision, Inc., or TelevisaUnivision, our current and future plans regarding our investment
in the common stock and preferred stock of TelevisaUnivision and the TelevisaUnivision Transaction (as defined below, and as described below
under “Information on the Company—Business Overview—TelevisaUnivision—TelevisaUnivision Transaction”) completed on January 31, 2022;
●
statements concerning certain businesses that were part of our former Other Businesses segment;
●
statements about our future economic performance or statements concerning general economic, political or social conditions in Mexico or other
countries in which we operate or have investments;
●
statements concerning the impact of the emergence of a new pandemic, as well as any possible adverse effects; and
●
statements or assumptions underlying these statements.
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3
We have based these forward-looking statements on our current expectations, assumptions, estimates and projections. While we believe these
expectations, assumptions, estimates and projections are reasonable, such forward-looking statements are only predictions and involve known and
unknown risks and uncertainties, many of which are beyond our control. We caution you that a number of important risks and uncertainties, including those
discussed under “Key Information — Risk Factors”, could cause actual results to differ materially from those expressed in or implied by these forward-
looking statements. These risks and uncertainties include, but are not limited to, the following risks, uncertainties and other factors:
●
economic and political developments and conditions and government policies in Mexico or elsewhere;
●
uncertainty in global financial markets;
●
the emergence of a new pandemic;
●
currency fluctuations or the depreciation of the Peso;
●
changes in inflation rates;
●
changes in interest rates;
●
the impact of existing laws and regulations, changes thereto or the imposition of new laws and regulations affecting our businesses, activities and
investments;
●
the risk that our concessions may not be renewed;
●
the risk of loss of transmission or loss of the use of satellite transponders;
●
changes in customer demand;
●
effects of competition;
●
incidents affecting our network and information systems or other technologies;
●
the results of operations of TelevisaUnivision; and
●
the other risks and uncertainties discussed under “Key Information — Risk Factors” and elsewhere in this report.
We are not obliged to update these statements or publicly release the result of any revisions to them to reflect events or circumstances after the date of
this report or to reflect the occurrence of unanticipated events. New factors emerge from time to time and it is not possible for us to predict all of these
factors. Further, we cannot assess the impact of each such factor on our business or the extent to which any factor, or combination of factors, may cause
actual results to be materially different from those contained in these forward-looking statements.
We caution you that the foregoing list of factors is not exhaustive and that other risks and uncertainties may cause actual results to differ materially
from those in forward-looking statements. You should evaluate any statements made by us in light of these important factors and you are cautioned not to
place undue reliance on any forward-looking statements. Forward-looking statements speak only as of the date they are made, and we do not undertake any
obligation to update them in light of new information, future developments or other factors.
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4
Part I
Item 1. Identity of Directors, Senior Management and Advisers
Not applicable.
Item 2. Offer Statistics and Expected Timetable
Not applicable.
Item 3. Key Information
Selected Financial Data
The following tables present our selected consolidated financial information as of and for each of the periods indicated. This information is qualified in
its entirety by reference to, and should be read together with, our audited consolidated year-end financial statements. The following data for each of the
years ended December 31, 2024, 2023 and 2022 has been derived from our audited consolidated year-end financial statements, including the consolidated
statements of financial position as of December 31, 2024, 2023 and 2022, the related consolidated statements of income or loss, comprehensive income or
loss, changes in equity and cash flows for the years ended December 31, 2024, 2023 and 2022, and the accompanying notes appearing elsewhere in this
annual report.
The selected consolidated financial information as of December 31, 2024, 2023 and 2022, and for the years ended December 31, 2024, 2023 and 2022,
was prepared in accordance with IFRS Accounting Standards, as issued by the IASB.
The exchange rate used in translating Pesos into U.S. Dollars for calculating the convenience translations included in the following tables is
determined by reference to the interbank free market exchange rate (the “Interbank Rate”), as reported by Banco Citi México, S.A., as of December 31,
2024, which was Ps.20.8691 per U.S. Dollar. This annual report contains translations of certain Peso amounts into U.S. Dollars at specified rates solely for
the convenience of the reader. The exchange rate translations contained in this annual report should not be construed as representations that the Peso
amounts actually represent the U.S. Dollar amounts presented or that they could be converted into U.S. Dollars at the rate indicated. The Interbank Rate, as
reported by Banco Citi México, S.A. as of March 31, 2025, was Ps.20.4370 per U.S. Dollar.
Year Ended December 31
2024
2024
2023(4)
2022(4)
(Millions of U.S. Dollars or millions of Pesos)(1)
Statement of Income or Loss Data:
Revenues
U.S.$
2,983
Ps.
62,261
Ps.
66,223
Ps.
68,616
Operating (loss) income
(135)
(2,819)
1,858
3,738
Finance expense, net (2)
(225)
(4,695)
(4,846)
(9,256)
Net loss from continuing operations (4)
(402)
(8,385)
(9,435)
(11,544)
Income from discontinued operations, net (4)
3
57
628
56,828
Net (loss) income
(399)
(8,328)
(8,807)
45,284
Net (loss) income attributable to stockholders of the Company
(396)
(8,265)
(8,423)
44,712
Net (loss) income attributable to non-controlling interests
(3)
(63)
(384)
572
Basic loss per CPO attributable to stockholders of the Company of continuing
operations (4)
—
(3.06)
(3.24)
(4.28)
Basic earnings per CPO attributable to stockholders of the Company of discontinued
operations (4)
—
0.02
0.23
20.08
Basic (loss) earnings per CPO attributable to stockholders of the Company (3)
—
(3.04)
(3.01)
15.80
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5
Year Ended December 31
2024
2024
2023
2022
Diluted loss per CPO attributable to stockholders of the Company of continuing
operations (4)
—
(3.06)
(3.24)
(4.28)
Diluted earnings per CPO attributable to stockholders of the Company of discontinued
operations (4)
—
0.02
0.23
20.08
Diluted (loss) earnings per CPO attributable to stockholders of the Company (3)
—
(3.04)
(3.01)
15.80
Weighted-average number of shares outstanding (in millions) (3) (5)
—
317,806
327,174
331,143
Cash dividend per CPO (3)
—
0.35
0.35
0.35
Comprehensive Income or Loss Data:
Total comprehensive (loss) income
U.S.$
(544)
Ps.
(11,352)
Ps.
(7,896)
Ps.
48,068
Total comprehensive (loss) income attributable to stockholders of the Company
(541)
(11,281)
(7,466)
47,510
Total comprehensive (loss) income attributable to non-controlling interests
(3)
(71)
(430)
558
Year Ended December 31
2024
2024
2023
2022
Financial Position Data:
Cash and cash equivalents
U.S.$
2,213
Ps.
46,193
Ps.
32,586
Ps.
51,131
Total assets
12,059
251,658
262,670
299,108
Current portion of long-term debt (6)
218
4,557
9,988
1,000
Interest payable (6)
80
1,675
1,507
1,761
Long-term debt, net of current portion (7)
4,715
98,398
78,548
104,241
Customer deposits and advances
54
1,130
1,392
1,841
Current portion of deferred revenue
14
288
288
288
Deferred revenue, net of current portion
221
4,603
4,890
5,178
Capital stock
189
3,934
4,723
4,837
Total equity (including non-controlling interests)
5,352
111,696
134,672
144,130
Shares outstanding (in millions) (5)
—
315,452
323,977
330,740
2024
2024
2023
2022
Cash Flow Data:
Net cash provided by operating activities
U.S.$
1,560
Ps.
32,554
Ps.
15,201
Ps.
12,468
Net cash (used in) provided by investing activities
(432)
(9,010)
(15,758)
42,705
Net cash used in financing activities
(450)
(9,389)
(17,753)
(29,769)
Increase (decrease) in cash and cash equivalents
685
14,304
(18,545)
25,303
Other Financial Information:
Capital expenditures (8)
U.S.$
436
Ps.
9,097
Ps.
14,708
Ps.
17,315
Other Data (unaudited):
Magazine circulation (millions of copies) (9)
—
—
6
7
Number of employees (at year end)
—
28,038
32,932
37,374
Number of Sky Pay Television RGUs (in thousands at year end) (10)
—
4,696
5,567
6,257
Number of Sky Broadband Internet RGUs (in thousands at year end) (10)
—
351
515
640
Number of Sky Mobile RGUs (in thousands at year end) (10)
—
16
33
16
Number of Cable Pay Television RGUs (in thousands at year end) (11)
—
3,847
4,059
4,458
Number of Cable Broadband Internet RGUs (in thousands at year end) (11)
—
5,626
5,678
5,984
Number of Cable Digital Telephony RGUs (in thousands at year end) (11)
—
5,383
5,351
5,234
Number of Cable Mobile RGUs (in thousands at year end) (11)
—
334
308
240
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6
Notes to Selected Consolidated Financial Information:
(1)
Except for Certificado de Participación Ordinario, or CPO, magazine circulation, employees, Revenue Generating Units, or RGUs. An RGU is
defined as an individual service subscriber who is billable under each service (satellite pay television, broadband internet and voice).
(2)
Includes interest expense, interest income, foreign exchange loss or gain, net, and other finance income or expense, net. See Note 23 to our
consolidated year-end financial statements.
(3)
For further analysis of net earnings per CPO (as well as corresponding amounts per Series “A” Share not traded as CPOs), see Note 25 to our
consolidated year-end financial statements. In April 2025, 2024 and 2023 the Company’s stockholders approved the payment of a dividend of Ps.0.35
per CPO, respectively.
(4)
The consolidated statements of income or loss of the Group for the years ended December 31, 2024, 2023, and 2022 have been prepared to present the
discontinued operations following the spin-off of most of the businesses of the Group’s former Other Businesses segment effective on January 31,
2024 (the “Spin-off”). Accordingly, the consolidated statements of income or loss of the Group for the years ended December 31, 2023 and 2022 have
been re-presented from those originally reported by the Company, to present in those years the results from discontinued operations of the businesses
that were spun off by the Group on January 31, 2024.
(5)
As of December 31, 2024, 2023 and 2022, we had four classes of stock: Series “A” Shares, Series “B” Shares, Series “D” Shares and Series “L”
Shares. Our shares are publicly traded in the United Mexican States, or Mexico, primarily in the form of CPOs, each CPO representing 117 shares
comprised of 25 Series “A” Shares, 22 Series “B” Shares, 35 Series “D” Shares and 35 Series “L” Shares; and in the United States in the form of
Global Depositary Shares, or GDSs, each GDS representing five CPOs. As of December 31, 2024, there were approximately 2,215.6 million CPOs
issued and outstanding, each of which was represented by 25 Series “A” Shares, 22 Series “B” Shares, 35 Series “D” Shares and 35 Series “L” Shares,
and an additional number of approximately 56,231.4 million Series “A” Shares, 0.2 million Series “B” Shares, 0.2 million Series “D” Shares and 0.2
million Series “L” Shares issued and outstanding (not in the form of CPO units). See Note 17 to our consolidated year-end financial statements.
(6)
The figures set forth in this line item are presented at amortized cost (principal amount, net of finance costs). Current portion of long-term debt and
interest payable are presented as a separate line item in the consolidated statements of financial position as of December 31, 2024 and 2023. See Notes
2(o) and 14 to our consolidated year-end financial statements.
(7)
The figures set forth in this line item are presented at amortized cost (principal amount, net of finance costs). See “Operating and Financial Review and
Prospects—Results of Operations—Liquidity, Foreign Exchange and Capital Resources—Indebtedness” and Note 14 to our consolidated year-end
financial statements.
(8)
Capital expenditures are those investments made by us in property, plant and equipment. See “Information on the Company—Capital Expenditures”.
(9)
The figures set forth in this line item represent total circulation of magazines that were published independently and through joint ventures and other
arrangements and do not represent magazines distributed on behalf of third parties. See “Operating and Financial Review and Prospects—Spin-off of
Certain Businesses of Our Other Businesses Segment”. As of January 31, 2024, the properties relating to our former publishing activities were
transferred to Ollamani, S.A.B. (“Ollamani”) in connection with the Spin-off.
(10) Sky has operations in Mexico, the Dominican Republic and Central America. The figures set forth in this line item represent the total number of RGUs
(pay television, or pay-TV, broadband internet, digital telephony and mobile services) for Innova at the end of each year presented. For a description of
Innova’s business and results of operations and financial condition, see “Information on the Company—Business Overview—Our Operations—Sky”.
(11) RGUs provided by the Company in our Cable segment (pay-TV, broadband internet, digital telephony and mobile services). For example, a single
subscriber paying for cable television, broadband internet, digital telephony and mobile services represents four RGUs. We believe it is appropriate to
use the number of RGUs as a performance measure for the Company’s Cable businesses given that these provide other services in addition to pay-TV.
See “Operating and Financial Review and Prospects—Results of Operations—Total Segment Results—Cable” and “Information on the Company—
Business Overview—Our Operations—Cable”.
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7
Dividends
Decisions regarding the payment and amount of dividends are subject to approval by holders of a majority of the Series “A” Shares and Series “B”
Shares voting together, generally, but not necessarily, on the recommendation of the board of directors, or the Board of Directors, as well as a majority of
the Series “A” Shares voting separately. Emilio Azcárraga Jean indirectly controls the voting of the majority of the Series “A” Shares and, as a result of
such control, both the amount and the payment of dividends require his affirmative vote. See “Major Stockholders and Related Party Transactions—The
Major Stockholders”. On March 25, 2004, our Board of Directors approved a dividend policy under which we currently intend to pay an annual ordinary
dividend of Ps.0.35 per CPO. On April 27, 2022, at our general stockholders’ meeting, our stockholders approved a cash distribution to stockholders of up
to Ps.1,053.4 million, which represents a payment of our ordinary dividend of Ps.0.35 per CPO, equivalent to Ps.0.002991452991 per share. On April 26,
2023, at our general stockholders’ meeting, our stockholders approved a cash distribution to stockholders of up to Ps.1,053.4 million, which represents a
payment of our ordinary dividend of Ps.0.35 per CPO, equivalent to Ps.0.002991452991 per share. On April 26, 2024, at our general stockholders’ meeting,
our stockholders approved a cash distribution to stockholders of up to Ps.1,019.0 million, which represents a payment of our ordinary dividend of Ps.0.35
per CPO, equivalent to Ps.0.002991452991 per share. On April 29, 2025, at our general stockholders’ meeting, our stockholders approved a cash
distribution to stockholders of up to Ps.1,019.0 million, which represents a payment of our ordinary dividend of Ps.0.35 per CPO, equivalent to
Ps.0.002991452991 per share. All of the recommendations of the Board of Directors related to the payment and amount of dividends were voted on and
approved at the applicable general stockholders’ meetings.
Exchange Rate Information
Since 1991, Mexico has had a free market for foreign exchange and, since 1994, the Mexican government has allowed the Peso to float freely against
the U.S. Dollar. There can be no assurance that the government will maintain its current policies with regard to the Peso or that the Peso will not depreciate
or appreciate significantly in the future.
In the past, the Mexican economy has had balance of payment deficits and decreases in foreign exchange reserves. While the Mexican government
does not currently restrict the ability of Mexican or foreign persons or entities to convert Pesos to U.S. Dollars, we cannot be sure that the Mexican
government will not institute restrictive exchange control policies in the future, as has occurred from time to time in the past. To the extent that the Mexican
government institutes restrictive exchange control policies in the future, our ability to transfer or to convert Pesos into U.S. Dollars and other currencies for
the purpose of making timely payments of interest and principal of indebtedness, as well as to obtain foreign programming and other goods, would be
adversely affected. See “—Risk Factors—Risk Factors Related to Mexico—Currency Fluctuations or the Devaluation and Depreciation of the Peso Could
Limit the Ability of Our Company and Others to Convert Pesos into U.S. Dollars or Other Currencies, Which Could Adversely Affect Our Business,
Financial Condition or Results of Operations”.
Risk Factors
The following is a discussion of risks associated with our company and an investment in our securities. Some of the risks of investing in our securities
are general risks associated with doing business in Mexico. Other risks are specific to our business. The discussion below contains information, among
other things, about the Mexican government and the Mexican economy obtained from official statements of the Mexican government as well as other
public sources. We have not independently verified this information. Any of the following risks, if they actually occur, could materially and adversely affect
our business, financial condition, results of operations or the price of our securities.
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Risk Factors Related to Mexico
Economic and Political Developments in Mexico May Adversely Affect Our Business, Financial Condition and Results of Operations
Most of our operations and assets are located in Mexico. As a result, our financial condition, results of operations and business may be affected by the
general condition of the Mexican economy, the depreciation or appreciation of the Peso as compared to the U.S. Dollar and other currencies, Mexican
inflation, interest rates, regulation, taxation, social instability and other political, social and economic developments in or affecting Mexico over which we
have no control.
Economic Conditions in Mexico and Elsewhere May have a Material Impact on our Operations and Financial Condition
Mexico has historically experienced uneven periods of economic growth. Mexican gross domestic product, or GDP, increased by 3.1% in 2022,
increased by 3.2% in 2023 and increased by 1.2% in 2024. Mexican GDP fell short of the Mexican government forecast in 2024 and, according to analysts,
Mexican GDP is expected to increase by 0.5% in 2025. We cannot be sure that these estimates and forecasts will prove to be accurate.
Any future economic downturn, including downturns in the United States, Europe, Asia or anywhere else in the world, could affect our financial
condition and results of operations. For example, demand for cable television, direct-to-home, or DTH, satellite services, pay-per-view programming,
telecommunications services and other services and products we provide may decrease because consumers may find it difficult to pay for these services and
products. Additionally, there can be no assurance that a Mexican sovereign debt rating downgrade would not adversely affect our business, financial
condition, results of operations or the price of our securities.
Developments and the Perception of Risk in Other Countries, Especially in Europe, China, the United States and Emerging Market Countries,
May Materially Adversely Affect the Mexican Economy, the Market Value of Our Securities and Results of Operations
The market value of securities of Mexican companies, the social, economic and political situation in Mexico and our financial condition and results of
operations are, to varying degrees, affected by economic and market conditions in other countries, including the United States, countries in Europe, China
and other Latin American and emerging market countries. Therefore, investors’ reactions to developments in any of these other countries may have an
adverse effect on the market value or trading price of securities of Mexican issuers. Crises in the United States, Europe, China or emerging market
countries may reduce investor interest in securities issued by Mexican companies, including those issued by us.
Turmoil in other large economies, such as those in Europe, China and the United States, could have the effect of a downturn in the global economy.
Further, our operations, including the demand for our products or services, and the price of our securities, have also historically been adversely affected by
increases in interest rates in the United States and elsewhere.
In response to the Russian invasion of Ukraine, many jurisdictions, including the United States, United Kingdom, and European Union (“E.U.”), have
imposed sanctions, export controls, import bans, new investment prohibitions, and other trade restrictions on Russia. While Mexico has thus far refrained
from imposing such trade restrictions against Russia, the conflict in Ukraine and related sanctions against Russia may affect international macroeconomic
conditions. Other geopolitical events, including the conflict in the Middle East, may also affect international macroeconomic conditions.
Any of these factors, would negatively affect the market value of our securities and make it more difficult for us to access capital markets and finance
our operations in the future, which could have a material adverse effect on our business, financial condition, results of operations, cash flows, prospects and
the market price of our securities.
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Economic conditions in Mexico are significantly correlated with economic conditions in the United States as a result of the free trade agreements and
increased economic activity between the two countries. Adverse economic conditions in the United States or other related events could have a significant
adverse effect on the Mexican economy, which could adversely affect our business, financial condition and results of operations. As a result of talks to
renegotiate the North American Free Trade Agreement, or NAFTA, on November 30, 2018 (and as amended on December 10, 2019), the United States,
Canada, and Mexico signed the United States-Mexico-Canada Agreement (USMCA), which has been approved by the Mexican Senate, the U.S. Senate,
and Canada, and became effective on July 1, 2020. The USMCA renegotiation is expected to take place in 2026 and may introduce new terms that could
impact Mexico’s economy and job creation. Although the USMCA aims to modernize trade relations, its implementation and long-term effects remain
uncertain. Any unfavorable changes in the terms of the USMCA or other trade agreements could adversely affect our business operations and financial
performance. Increased or perceptions of increased economic protectionism in the United States and other countries could potentially lead to lower levels
of trade and investment and economic growth, which could have a similarly negative impact on the Mexican economy. Additionally, in early 2025 the U.S.
administration began imposing various restrictions on foreign trade, including a range of tariff measures covering various countries and products, and
targeting China in particular. Further, the U.S. administration has placed a 25% tariff on imports from Canada and Mexico, subject to an exemption for
products that comply with the USMCA rules of origin and lower levels for certain goods. On April 2, 2025, the U.S. administration announced a new
universal baseline tariff of 10%, plus an additional country-specific tariff for select trading partners, on all U.S. imports other than from Canada and
Mexico. Although imposition of the country-specific tariff was temporarily paused for most countries (not including China) on April 9, 2025, the
imposition of the baseline tariff and the uncertainty regarding future tariff policy could have an adverse effect on levels of trade and the economic
conditions in the United States, Mexico, and third countries. These economic and political consequences could adversely affect our business, financial
condition and results of operations.
On December 7, 2023, the governments of the United States and Mexico signed a Memorandum of Intent expressing their desire to cooperate on best
practices on foreign investment screening. While Mexico has not yet begun the process of establishing a foreign investment review regime comparable to
the Committee on Foreign Investment in the United States (CFIUS), it could do so in the future and any such regime could affect the ability of foreign
investors to invest in Mexican business, which could adversely affect our business, financial condition and results of operations.
We cannot be sure that events in other emerging market countries, in the United States or elsewhere will not materially adversely affect our business,
financial condition, results of operations, cash flows, prospects and the market price of our shares. The United Kingdom left the E.U. on January 31, 2020
(“Brexit”); the relationship between the UK and the E.U. is governed by the post-Brexit trade and cooperation agreement, which covers (inter alia) trade,
travel and immigration. Post-Brexit, the United Kingdom and Mexico negotiated and signed a trade agreement, the UK-Mexico Trade Continuity
Agreement, which came into effect on June 1, 2021. In 2023, the United Kingdom formally agreed to join the Comprehensive and Progressive Agreement
for Trans-Pacific Partnership (CPTPP) of which Mexico is a member. Brexit has caused, and may continue to cause, both significant volatility in global
stock markets and currency exchange rate fluctuations, as well as significant uncertainty from potentially divergent treaties, laws and regulations. Further,
the Bank of England and other observers have warned of a significant probability of burdensome long-term economic effects related to a Brexit in the
United Kingdom, which may be further impacted by the war in Ukraine, rising inflation and other recent geopolitical and economic factors.
Our profitability is affected by numerous factors including reductions in demand for the services provided in our Cable and Sky divisions, as well as in
the rest of our business. The demand for our products and services in Mexico, the United States and in the other countries in which we operate may be
adversely affected by the tightening of credit markets and economic downturns. We depend on the demand from customers in Mexico, the United States
and the other countries in which we operate, and reduced consumer spending that falls short of our projections could adversely impact our revenues and
profitability.
Any renegotiation of trade agreements or changes in foreign policy by the new administration may affect macroeconomic variables critical to Mexico’s
economic stability, such as interest rates, exchange rates and inflation. The Mexican government could also implement retaliatory actions, such as imposing
restrictions on Mexican imports of U.S. products or on Mexican exports to the United States.
These actions and their economic and political consequences may have an adverse effect on the Mexican economy, which in turn could impact our
business, financial condition, results of operations and prospects. We cannot assure that developments in trade and tariff policies will not have a material
adverse effect on our business, financial condition, results of operations and/or our ability to make payments under our financial obligations. See
“Renegotiation of the Trade Agreements or Other Changes in Foreign Policy by the Presidential Administration in the United States Could Adversely
Affect Imports and Exports Between Mexico and the United States and Other Economic and Geopolitical Effects may Adversely Affect Us.”
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Uncertainty in Global Financial Markets Could Adversely Affect Our Financing Costs and Exposure to Our Customers and Counterparties
The global financial markets continue to be uncertain and it is hard to predict for how long the effects of the global financial stress of recent years will
persist and what continuing impact it will have on the global economy in general, or the economies in which we operate, in particular, and whether slowing
economic growth in any countries could result in decreased consumer spending affecting our products and services. If access to credit tightens and
borrowing costs rise, our borrowing costs could be adversely affected. Difficulties in financial markets may also adversely affect some of our customers. In
addition, we enter into derivative transactions with large financial institutions, including contracts to hedge our exposure to interest rates and foreign
exchange rates, and we could be affected by severe financial difficulties faced by our counterparties.
The Emergence of a New Pandemic May Have a Material Adverse Effect on Our Business, Financial Position and Results of Operations
The emergence of a new pandemic could trigger a renewal of government restrictions on non-essential activities, including but not limited to temporary
shutdowns or additional guidelines, which could be expensive or burdensome to implement, and which may affect our operations.
Any public health emergency, including an outbreak of existing or new epidemic diseases, or the threat thereof, and the resulting financial and
economic market uncertainty could have a material adverse effect on our business, financial position and results of operations.
Currency Fluctuations or the Devaluation and Depreciation of the Peso Could Limit the Ability of Our Company and Others to Convert Pesos into U.S.
Dollars or Other Currencies, Which Could Adversely Affect Our Business, Financial Condition or Results of Operations
The Peso has been subject to significant depreciation against the U.S. Dollar in the past and may be subject to significant fluctuations in the future. A
significant portion of our indebtedness and a significant amount of our costs are U.S. Dollar-denominated, while our revenues are primarily Peso-
denominated. As a result, decreases in the value of the Peso against the U.S. Dollar could cause us to incur foreign exchange losses, which could reduce our
net income.
Severe devaluation or depreciation of the Peso may also result in governmental intervention, or disruption of international foreign exchange markets.
This may limit our ability to transfer or convert Pesos into U.S. Dollars and other currencies for the purpose of making timely payments of interest and
principal on our indebtedness and adversely affect our ability to obtain imported goods. The Mexican economy has suffered current account balance of
payment deficits and shortages in foreign exchange reserves in the past. While the Mexican government does not currently restrict the right or ability of
Mexican or foreign persons or entities to convert Pesos into U.S. Dollars or to transfer other currencies outside of Mexico, there can be no assurance that
the Mexican government will not institute restrictive exchange control policies in the future. To the extent that the Mexican government institutes
restrictive exchange control policies in the future, our ability to transfer or convert Pesos into U.S. Dollars or other currencies for the purpose of making
timely payments of interest and principal on indebtedness, as well as to obtain imported goods, would be adversely affected. Devaluation or depreciation of
the Peso against the U.S. Dollar or other currencies may also adversely affect U.S. Dollar or other currency prices for our debt securities or the cost of
imported goods.
The public decisions and announcements of the presidential administration in the United States have had, and may continue to have, an adverse effect
on the value of the Peso against other currencies, particularly the U.S. Dollar. A decision by the U.S. Federal Reserve to decrease applicable interest rates
for bank reserves could also affect the exchange rate of the Peso relative to the U.S. Dollar, as well as presidential elections in the United States and
Mexico, which could result in high volatility in the exchange rate of the Peso relative to the U.S. Dollar.
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An Increase in Interest Rates in the United States Could Adversely Impact the Mexican Economy and May Have a Negative Effect on Our Financial
Condition or Performance
A decision by the U.S. Federal Reserve to increase applicable interest rates for banks’ reserves may lead to a general increase in interest rates in the
United States. During the year ended December 31, 2024, the U.S. Federal Reserve decreased interest rates. However, there can be no assurance that the
U.S. Federal Reserve will not maintain or make additional upwards adjustments to the current federal funds rate in the future to mitigate inflationary
pressures. Changing interest rates may have unpredictable effects on markets, may result in heightened market volatility and may detract from our
performance to the extent we are exposed to such interest rates and/or volatility. An increase in general interest rates may redirect the flow of capital from
emerging markets into the United States because investors may be able to obtain greater risk-adjusted returns in larger or more developed economies than
in Mexico. Thus, companies in emerging market economies such as Mexico could find it more difficult and expensive to borrow capital and refinance
existing debt. This may negatively affect our potential for economic growth and our ability to refinance our existing debt and could materially adversely
affect our business, financial condition, results of operations, cash flows, prospects and the market price of our shares.
Renegotiation of the Trade Agreements or Other Changes in Foreign Policy by the Presidential Administration in the United States Could Adversely
Affect Imports and Exports Between Mexico and the United States and Other Economic and Geopolitical Effects may Adversely Affect Us
In recent years there has been uncertainty regarding U.S. policies related to trade, tariffs, immigration and foreign affairs, including with respect to
Mexico. The current U.S. administration could cause a number of changes in the relationship between Mexico and the United States.
Additionally, other government policies in the United States could also adversely affect economic conditions in Mexico. The relationship between the
Mexican and U.S. governments, as well as political and economic factors in each country, could lead to changes in international trade and investment
policies, including new or higher taxes on products imported from Mexico to the United States. In early 2025, the U.S. administration has threatened, and
in some cases imposed, a range of tariff measures targeting various countries and products. The U.S. administration has placed a 25% tariff on imports from
Canada and Mexico, subject to an exemption for products that comply with the USMCA rules of origin and lower levels for certain goods. Further, on April
2, 2025, the U.S. administration announced a new universal baseline tariff of 10%, plus an additional country-specific tariff for select trading partners, on
all U.S. imports. Although imposition of the country-specific tariff was temporarily paused for most countries (not including China) on April 9, 2025, the
imposition of the baseline tariff and the uncertainty regarding future tariff policy could have an adverse effect on levels of trade and the economic
conditions in the United States, Mexico, and third countries. The events described above could affect our activities, financial situation, operating results,
cash flows and/or prospects, as well as the market price of our shares. Other economic and geopolitical effects could adversely affect us.
Given that the Mexican economy is heavily influenced by the economy of the United States, the implementation or potential renegotiation of the
USMCA and/or other government policies in the United States that the federal administration may adopt could adversely affect economic conditions in
Mexico. On September 30, 2018, Mexico, Canada and the United States reached an agreement on the terms and conditions of the USMCA, replacing
NAFTA. On June 19, 2019, Mexico became the first country to ratify the USMCA, followed by the United States on January 16, 2020 and Canada on
March 13, 2020. The USMCA entered into force on July 1, 2020. The USMCA includes a 16-year sunset clause, under which the terms of the agreement
expire, or are suspended, after 16 years and is subject to review every six years, at which time the United States, Mexico and Canada may decide whether
to extend the USMCA. The implementation or potential renegotiation of the new terms of the USMCA could have an adverse effect on the Mexican
economy, including the level of imports and exports, which could in turn adversely affect our business, financial condition and results of operations. Other
economic and geopolitical effects, including those related to United States policy on trade, tariffs and immigration, may also adversely affect us.
High Inflation Rates in Mexico May Decrease Demand for Our Services While Increasing Our Costs
In the past, Mexico has experienced high levels of inflation. The annual rate of inflation, as measured by changes in the Mexican National Consumer
Price Index, or NCPI, was 7.8% in 2022, 4.7% in 2023 and 4.2% in 2024 and is projected to be 3.7% in 2025. An adverse change in the Mexican economy
may have a negative impact on price stability and result in higher inflation than its main trading partners, including the United States. High inflation rates
can adversely affect our business, financial condition and results of operations.
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High Interest Rates in Mexico Could Increase Our Financing Costs
During the past year, Mexican interest rates increased in line with global market movements. The interest rates on 28-day Mexican government
treasury securities averaged 7.7%, 11.1% and 10.7% for 2022, 2023 and 2024 respectively. High interest rates in Mexico could increase our financing costs
and thereby impair our financial condition, results of operations and cash flow.
Political Events in Mexico Could Affect Mexican Economic Policy and Our Business, Financial Condition and Results of Operations
In 2024, Mexico held presidential, state, local and congressional elections, renewing 128 senators, all 500 deputies, state governors for Chiapas,
Guanajuato, Jalisco, Morelos, Puebla, Tabasco, Veracruz, Yucatán, as well as the governor for Mexico City and a new president. These elections resulted in
the election of President Claudia Sheinbaum from Morena, the ruling party. Additionally, Morena, through its political allies gained majority in the
Mexican Congress and neared a qualified majority in the Senate, allowing the party to have leverage in the legislative process due to its ability to more
easily meet the voting percentages needed for the passage of constitutional amendments, secondary laws and new legislation. We cannot predict the impact
that political developments in Mexico will have on the Mexican economy nor can we provide any assurances that these events, over which the Company
has no control, will not have an adverse effect on our business, financial condition, results of operations, cash flows and prospects. The Mexican
government could implement significant changes in laws, policies, and regulations, which could affect the economic and political situation in Mexico.
Historically, the Mexican president has strongly influenced new policies and governmental actions that impact the Mexican economy. We cannot be
sure that the current administration or any future administration will maintain business-friendly and open-market economic policies and policies that
stimulate economic growth and social stability. Any administration could implement substantial changes in law, policy, and regulations in Mexico, which
could adversely affect our business, financial condition, results of operations and prospects. In addition, any actions taken by the current administration
may lead to riots, protests and looting that could adversely affect our operations. Our financial condition and results of operation may be adversely affected
by changes in Mexico’s political climate, to the extent that such changes affect the nation’s economic policies, growth, stability, outlook, or regulatory
environment.
For example, in 2024, the Executive Power submitted to the Mexican Congress which subsequently approved a package of constitutional amendments
including (i) significant modifications to the Mexican judicial system, which includes the election of judges, federal magistrates supreme court justices by
popular vote, (ii) the elimination of autonomous governmental bodies, (iii) the transfer of the National Guard (Guardia Nacional) to the Ministry of
Defense (Secretaría de Defensa) and (iv) the reform of the constitutional supremacy, which limits the judicial system´s faculties to review, challenge and
ultimately invalidate constitutional reforms.
We cannot assure you that Morena and its political party allies or any future members will not introduce new legislative initiatives, modify existing
legislation or reform the Mexican Constitution, which could, in turn, result in economic or political conditions that could materially and adversely affect
our business. To approve a constitutional reform, members of the Mexican Congress must issue a qualified majority vote, approved by a simple majority of
the legislatures of the states.
Finally, our business, financial condition and results of operations may be adversely affected by changes in governmental policies or regulations
involving or affecting our management, operations and tax regime. Tax policy in Mexico, in particular, is subject to continuous change.
Any changes in laws, public policies or regulations may affect the political and economic environment in Mexico and, consequently, contribute to
increased economic uncertainty and volatility in the Mexican capital markets and in securities issued by Mexican companies, including us.
Increased Labor Conflicts in Mexico Could Have a Material Adverse Impact on Our Financial Condition and Results of Operations
A number of events, such as (i) the endorsement by the Mexican Senate of the International Labor Organization’s Convention C098, the “Right to
Organize and Collective Bargaining Convention” and (ii) the approval by the Mexican Congress to modify the Mexican Federal Labor Law and any other
related laws or regulations, have caused, and continue to cause, labor conflicts in Mexico.
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In addition, such conflicts have been exacerbated by (i) a 22.0% increase in the general minimum wage as of January 1, 2022, a further 20.0% increase
as of January 1, 2023, a further 20.0% increase as of January 1, 2024 and a subsequent 12% increase as of January 1, 2025, and (ii) a 22.0% increase in the
minimum wage in the municipalities near the northern border of Mexico as of January 1, 2022, a further increase of 20.0% as of January 1, 2023, and an
additional 20.0% increase as of January 1, 2024, and a subsequent 12% increase as of January 1, 2025. These developments have led workers and labor
unions to demand more significant benefits and higher salary increases than in prior years, which could in turn increase our operational expenses.
As of December 31, 2024, approximately 37.82% of our employees were represented by unions. We cannot predict how these developments may affect
our results of operations or financial condition. Any increased demands by our unionized workers may lead to higher labor costs, which could have a
negative impact on our financial condition and results of operations.
Additionally, it should be noted that recent and pending labor reforms in Mexico have introduced new obligations for employers that may materially
impact our financial condition and results of operations as these reforms entail modifications to the legal framework that expand employer responsibilities
concerning workplace standards and employee benefits. For example, in June 2023, Mexican Official Standard NOM-037-STPS-2023 on “Telework” (i.e.,
when a person carries out his or her activities more than 40% of the time outside of the workplace) was published, following the 2021 amendment to the
Federal Labor Law. This standard requires employers to ensure adequate health and safety conditions at teleworkers’ designated workplaces, imposing
obligations such as inspections, recordkeeping, and the coverage of certain expenses, which may result in additional labor-related costs.
Subsequently, in June 2024, amendments to the General Law to Prevent and Punish Human Trafficking classified excessive working hours as a form of
labor exploitation. This reform increases legal exposure for employers that fail to comply with statutory work-hour limits, as violations may lead to both
administrative and criminal liability.
In December 2024, legislation commonly referred to as the “Ley Silla” was enacted, requiring employers to guarantee that employees may rest in a
chair with back support during their workday and prohibiting prolonged periods of standing. This may require infrastructure adjustments and modifications
to workplace arrangements and policies.
Furthermore, a constitutional reform aimed at reducing the maximum number of weekly working hours is currently under discussion. Although
negotiations are ongoing between government authorities and the private sector, it is anticipated that this reform will eventually be enacted. If enacted, it
could significantly impact labor planning, scheduling, and operating costs, with potential implications for the Company’s competitiveness in the Mexican
market.
Finally, several additional legislative proposals are under consideration, including increases to the statutory Christmas bonus (aguinaldo), extensions of
paternity leave, the introduction of new mandatory rest days, a reduction in working hours, maternity premiums, and paid bereavement leave. These
potential reforms, individually or collectively, could have a material adverse impact on our financial condition and results of operations.
Mexico has Experienced a Period of Increased Criminal Activity and Such Activities Could Adversely Affect Our Financing Costs and Exposure to Our
Customers and Counterparties
During recent years, Mexico has experienced periods of increased criminal activity and violence, primarily due to organized crime. We cannot assure
you to what extent these violent crimes will continue to increase or decrease, whether they will continue to expand throughout Mexico and if they will have
further adverse effects on Mexico’s economy. These activities, as well as the escalation of and the violence associated with such activities, could have a
material adverse impact on the business environment in which we operate, and therefore on our financial condition and results of operations.
Imposition of Fines by Regulators and Other Authorities Could Adversely Affect Our Business, Financial Condition and Results of Operations
A significant portion of our business, activities and investments occur in heavily regulated sectors. In recent years, Mexican regulators and other
authorities, including tax authorities, have increased their supervision and the frequency and amounts of fines and assessments have risen significantly.
Although we intend to defend our positions vigorously when procedures are brought or fines are imposed by authorities, there can be no assurance that we
will be successful in such defense. Our defense strategies include engaging with legal experts and regulatory consultants to navigate the complex regulatory
landscape. However, we may in the future be required to pay fines and assessments that could be significant in amount, which could materially and
adversely affect our business, financial condition, and results of operations.
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Existing Mexican Laws and Regulations or Changes Thereto or the Imposition of New Ones May Negatively Affect Our Operations and Revenue
Our business, activities and investments are subject to various Mexican federal, state and local statutes, rules, regulations, policies and procedures,
which are subject to change and are affected by the actions of various Mexican federal, state and local government authorities. Such changes could
materially adversely affect our operations and our revenue.
On December 20, 2024, the Executive Branch published a constitutional amendment to Article 28 (the “Constitutional Amendment”) in the Official
Gazette of the Federation, dissolving seven autonomous authorities, including the Federal Economic Competition Commission (“COFECE”) and the
Federal Telecommunications Institute (“IFT”). Under this amendment, COFECE and IFT’s competition-related functions will be transferred to a newly
created antitrust agency, which, although decentralized from the Executive Branch, will have legal status, its own budget, and technical and operational
independence in its decisions, organization, and operation. Additionally, the separation between the investigative and adjudicative authorities will be
maintained. All non-antitrust functions previously handled by the IFT will now fall under the jurisdiction of the Ministry of Infrastructure,
Communications, and Transportation. As of the date of this report, the exact date on which COFECE and IFT will be officially extinguished remains
uncertain.
Until new legislation is enacted and judicial interpretation is established, decisions and actions under the new framework may continue to have full
legal effect unless declared void or unconstitutional by a competent court through a binding and final judgment.
Mexico’s new Federal Antitrust Law and the Ley Federal de Telecomunicaciones y Radiodifusión, or Telecommunications and Broadcasting Federal
Law, or LFTR, including their regulations, may affect some of our activities, including our ability to introduce new products and services, enter into new or
complementary businesses or joint ventures and complete acquisitions. In addition, the current Federal Antitrust Law and its regulations, as well as the
conditions and measures imposed by the Instituto Federal de Telecomunicaciones, or Federal Telecommunications Institute, or IFT, an institute with
constitutional autonomy responsible for overseeing the broadcasting (radio and television) and telecommunications industries and their antitrust matters, or
by the Comisión Federal de Competencia Económica, or Mexican Antitrust Commission, or COFECE, may adversely affect our ability to determine the
rates we charge for our services and products or the manner in which we provide our products or services. Approval of IFT or the COFECE, as applicable,
is required to acquire certain businesses or enter into certain joint ventures. There can be no assurance that in the future IFT or the COFECE, as the case
may be, will authorize certain acquisitions or joint ventures related to our businesses, the denial of which may adversely affect our business strategy,
financial condition and results of operations. IFT or COFECE, as applicable, may also impose conditions, obligations and fines that could adversely affect
some of our activities, our business, financial condition and results of operations. See “—Imposition of Fines by Regulators and Other Authorities Could
Adversely Affect Our Business, Financial Condition and Results of Operations”.
As a result of the amendments to the Mexican Constitution and the LFTR relating to telecommunications, television, radio and antitrust, concessions
for the use of spectrum are now only granted through public bid processes.
Article 15-A of the Ley del Seguro Social, or the Social Security Law, could materially adversely affect our business, financial condition and results of
operations. Article 15-A provides that a company that receives personnel services from a third party, is jointly bound to comply with the obligations related
to social security that have to be fulfilled by such personnel services providers for the benefit of their respective employees. Article 15-A also requires the
Company to send a list to the Instituto Mexicano del Seguro Social, or the Social Security Mexican Institute, of all agreements entered into with personnel
services providers.
In addition to the foregoing, certain provisions of the Ley Federal del Trabajo, or the Federal Labor Law, could materially adversely affect our
business, financial condition and results of operations. The Federal Labor Law, as amended in April 2021, provides, among other things, that
subcontracting personnel is prohibited and only will be permitted if the personnel services provider performs specialized services or specialized work;
however, such specialized services or work shall not be contemplated in the company’s corporate purpose or be related with the company’s main activities.
Companies that provide outsourcing services will be required to complete a registration before the Mexican Ministry of Labor (Secretaría del Trabajo y
Previsión Social). If these requirements are not met, the company that receives the benefit of the outsourced services shall be jointly liable for all the
obligations applicable to employers pursuant to the Federal Labor Law in respect of such personnel. Fines and penalties may be imposed on companies that
do not comply with all applicable obligations, and the use of simulated schemes of rendering specialized services or execution of specialized work, as well
as subcontracting personnel, will be treated as a criminal offense.
The amendment approved in April 2021 brings, as a consequence, changes to the social security, tax and labor laws. The objective of such amendment
is to avoid subcontracting schemes.
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This amendment also stated that the amount of profit sharing to be paid to employees will be capped to three months of salary or the average amount
received by the employee in the last three years, whichever is more favorable to the employee. A tax implication of this amendment is that invoices issued
for disallowed subcontracting of personnel will not have tax effects (i.e., non-deductible expense for income tax purposes and inability to claim a value
added tax credit on such expense).
The economic plan for 2024 did not include any changes to the Mexican Income Tax Law, the Mexican Value Added Tax Law or the Mexican Federal
Tax Code. The withholding income tax rate applicable to payments of interest made by Mexican financial entities was increased from 0.15% for 2023 to
0.50% for 2024.
On June 3, 2021, a decree issuing the Transparency, Prevention and Fight of Improper Practices in Mexico of Advertising Contracting Act (the
“Agencies Law”) was published in the Official Gazette of the Federation and became effective on September 1, 2021. The purpose of the Agencies Law is
to promote transparency in the advertising industry, as well as to prevent and oppose commercial practices that result in an improper advantage in favor of
certain persons to the detriment of advertisers and consumers. On June 8, 2023, the Plenary of the Supreme Court of Justice, by a majority of eight votes,
resolved the constitutional disputes filed by the IFT and COFECE, declaring the Agencies Law invalid. The judgment was published in the Official Gazette
of the Federation on December 22, 2023. As a result, the Agencies Law is currently invalid and not applicable.
The Amendment of Various Provisions of the Mexican Constitution Related to Telecommunications, and the LFTR, May Significantly and Adversely
Affect the Business, Results of Operations and Financial Results of Some of Our Business Segments
On December 20, 2024, the Executive Branch published the Constitutional Amendment in the Official Gazette, dissolving seven autonomous
authorities, including COFECE and the IFT. Under this amendment, COFECE and IFT’s competition-related functions will be transferred to a newly
created antitrust agency, which, although decentralized from the Executive Branch, will have legal status, its own budget, and technical and operational
independence in its decisions, organization, and operation. Additionally, the separation between the investigative and adjudicative authorities will be
maintained. All non-antitrust functions previously handled by the IFT will now fall under the jurisdiction of the Ministry of Infrastructure,
Communications, and Transportation. The dissolution of IFT and COFECE is subject to the issuance of the relevant secondary regulation, which is still
pending and uncertain.
Any regulations related to the LFTR that could be issued by the President of Mexico and the new regulator, as applicable, or amendments to the LFTR
and certain actions recently taken by IFT, or to be taken under the new regulatory framework from time to time, affect or could significantly and adversely
affect the business, results of operations and financial condition of certain of our subsidiaries that hold concessions and/or provide services in the areas of
broadcasting, cable and telecommunications.
The LFTR previously established that measures taken or decisions issued by IFT are not subject to judicial stay. Therefore, subject to limited
exceptions, until a decision, action or omission by IFT is declared void or unconstitutional by a competent court through a binding and final judgment,
IFT’s decision, action or omission will be valid and will have full legal effect. Until new legislation is enacted and judicial interpretation is established,
decisions and actions under the new framework may continue to have full legal effect unless declared void or unconstitutional by a competent court
through a binding and final judgment.
As a result of the must-offer and must-carry regulations issued by IFT, starting on September 10, 2013, our concessionaries of broadcast services have
been required to permit pay-TV concessionaries to retransmit broadcast signals, free of charge and on a non-discriminatory basis, within the same
geographic coverage area simultaneously and without modifications, including advertising, and with the same quality of the broadcast signal, except in
certain specific cases provided in the transitory Articles of the June 2013 Telecom Reform (the “Telecom Reform”). Also, since September 10, 2013, our
pay-TV concessionaires are required to retransmit broadcast signals of free television concessionaires, free of charge and on a non-discriminatory basis,
subject to certain exceptions and additional requirements provided for in the Telecom Reform.
Certain pay-TV concessionaries benefit from the free use of broadcast for retransmission to their subscribers.
On February 27, 2014, the “General Guidelines Regarding the Provisions of Section 1 of the Eighth Article of the Transitory Decree Amending and
Supplementing a Number of Provisions of Articles 6, 7, 27, 28, 73, 78, 94 and 105 of the Mexican Constitution in Telecommunications,” or the Guidelines,
were published in the Official Gazette of the Federation, which include, among other obligations, the obligation of concessionaires of broadcast television
licenses to permit the retransmission of their broadcast signals and the obligation of pay-TV concessionaires to perform such retransmission (without
requiring the prior consent of the broadcast television concessionaires) in the same geographic coverage zone for free (subject to certain exceptions) and in
a non-discriminatory manner in its entirety, simultaneously and without modifications, including advertising, and with the same quality of the broadcast
signal without requiring consent from the broadcast television concessionaires.
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On March 6, 2014, IFT issued a decision (the “Preponderance Decision”) whereby it determined that we, together with other entities with concessions
to provide broadcast television, including some of our subsidiaries, are preponderant economic agents in the broadcasting sector in Mexico (together, the
“Preponderant Economic Agent”). As part of the transaction consummated on January 31, 2022 (the “TelevisaUnivision Transaction”), Televisa, S. de R.L.
de C.V. (“TVSA”), an entity formerly owned by the Company and now the operator of TelevisaUnivision’s Content business in Mexico, executed third
party programming agreements with the Company’s entities that hold the broadcasting concessions. As a result of the TelevisaUnivision Transaction, TVSA
is also part of the Preponderant Economic Agent.
The Preponderance Decision imposes on the Preponderant Economic Agent various measures, terms, conditions and restrictive obligations, including
the following:
●
Infrastructure sharing — The Preponderant Economic Agent must make its passive broadcasting infrastructure available to third-party
concessionaires of broadcast television for commercial purposes in a non-discriminatory and non-exclusive manner, with the exception of
broadcasters that, at the time the measures enter into force, have 12 MHz or more of radioelectric spectrum in the geographic area concerned.
Such passive broadcasting infrastructure includes, among others, non-electronic elements at transmitting locations, rights of way, ducts, masts,
trenches, towers, poles, security, sites, land, energy sources and air conditioning system elements. This action may result in the Preponderant
Economic Agent being bound to incur substantial additional costs and obligations in complying with this requirement, as well as affecting the
results of operations. Furthermore, this measure will facilitate the entry and expansion of new competitors in the broadcasting industry without
such competitors having to incur costs or investment expenses that new businesses in this industry otherwise would have made and which we
incurred in the past and will continue incurring in the future in order to remain competitive. A first infrastructure offer with the terms and
conditions to make our passive broadcasting infrastructure available to third-party concessionaires was published on our website on December 19,
2014 and was valid until December 31, 2016. This was succeeded by a second infrastructure offer, which we published on our website on
November 30, 2016 and which was effective as of January 1, 2017. This was succeeded by a third infrastructure offer, which we published on our
website on November 30, 2017 and was valid from January 1, 2018 until December 31, 2019, which was declared unconstitutional by the
Supreme Court on November 26, 2019. This was succeeded by a fourth infrastructure offer, which we published on our website on November 30,
2019, to be effective from January 1, 2020 through December 31, 2021. This was succeeded by a fifth infrastructure offer, which we published on
our website on November 30, 2021, effective from January 1, 2022 through December 31, 2023. This was succeeded by a sixth infrastructure
offer, which we published on our website on December 1, 2023, effective from January 1, 2024 through December 31, 2025. The price to be paid
by the concessionaires for the use of our infrastructure on the sixth infrastructure offer is subject to negotiation. As of the date of this report, we
have not received any request from third-party concessionaries regarding such infrastructure offer; however, we are unable to predict the impact of
the use of the sixth infrastructure offer on our businesses, results of operations and financial conditions of certain of our subsidiaries that hold
concessions and/or provide services in the areas of broadcasting and telecommunications.
●
Advertising sales — According to the Preponderance Decision, the Preponderant Economic Agent must deliver to IFT the terms and conditions of
its broadcast advertising services and fee structures, including commercials, packages, discount plans and any other commercial offerings and
publish them on its webpage. The Preponderant Economic Agent also must make publicly available on its website its forms of contracts and terms
of sale for each service. Based on this decision, the Preponderant Economic Agent is expressly prohibited from refusing to sell advertising and/or
discriminating with respect to the advertising spaces being offered. If IFT considers that the Preponderant Economic Agent has failed to comply
with the foregoing, IFT may order the Preponderant Economic Agent to make its advertising spaces available, which, in turn, could affect the
ability of the Preponderant Economic Agent to carry out its advertising sales plans in an efficient and competitive manner, affecting its operating
results. This provision may also affect the ability of the Preponderant Economic Agent to offer competitive rates to its customers.
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●
Prohibition on acquiring certain exclusive content — The Preponderant Economic Agent may not acquire transmission rights, on an exclusive
basis, for any location within Mexico with respect to certain relevant content, determined by IFT in the “Ruling whereby IFT identifies the
relevant audiovisual contents in terms and for the purposes of the fourth measure and the second transitory article of the fourth attachment of the
Telecommunication Preponderance Decision and the Broadcasting Preponderance Decision”, or the Relevant Content Ruling, which list may be
updated every two years by IFT. Relevant content is defined as programs with a high expected level of regional or national audience and with
unique characteristics that in the past have generated high levels of national or regional audiences. The Relevant Content Ruling identified certain
programs that would be considered relevant content, namely, Mexican national soccer team games, the opening and closing ceremonies of the
Olympic Games, the opening and closing ceremonies and semifinals and finals of the FIFA World Cup, and the finals of the Mexican Soccer
League. Also, on November 14, 2018, IFT updated the list, eliminating the opening and closing ceremonies of the Olympic Games and adding 16
matches of the FIFA World Cup, semifinals of the Mexican Soccer League and the Super Bowl. This Ruling applies to the Preponderant
Economic Agents and may limit the ability of the Preponderant Economic Agents to negotiate and have access to this content and could affect
their ability to acquire content in the medium and long term, which could significantly and adversely affect their revenues and results of
operations from the sale of advertising, as well as the quality of the programming offered for their audiences.
●
Over-the-air channels — When the Preponderant Economic Agent offers any of its over-the-air channels, or channels that have at least 50% of the
programming that is broadcast daily between 6:00 a.m. and midnight on such channels, to its affiliates, subsidiaries, related parties or third parties,
for distribution through a different technological platform than over-the-air broadcast television, the Preponderant Economic Agent must offer
these channels to any other person that asks for distribution over the same platform as the Preponderant Economic Agent has offered, on the same
terms and conditions. Also, if the Preponderant Economic Agent offers a package of two or more of these channels, it must also offer them in an
unpackaged form upon request.
●
Prohibition on participating in “buyers’ clubs” or syndicates to acquire audiovisual content, without IFT’s prior approval — The Preponderant
Economic Agent may not enter into or remain a member of any “buyers’ club” or syndicates of audiovisual content unless it has received the prior
approval of IFT. A “buyers’ club” is defined as any arrangement between two or more economic agents to jointly acquire broadcast rights to
audiovisual content in order to obtain better contractual terms. This may result in the Preponderant Economic Agent not having exclusive access
to certain audiovisual content and consequently its audiences may move to other broadcast television transmissions or other technological
platforms that transmit such content. It may also result in its acquisition costs significantly increasing, which can affect business strategy, financial
condition and results of operations.
On February 27, 2017, as part of the biennial review of the broadcasting sector preponderance rules, IFT amended various measures, terms, conditions
and restrictive obligations (the “New Preponderance Measures”) as follows:
●
Infrastructure sharing — In addition to the previously imposed obligations regarding the sharing of passive infrastructure, the New
Preponderance Measures have (i) included the service of signal emissions in the event that no passive infrastructure exists on the relevant
requested site, which was declared unconstitutional by the Supreme Court on November 26, 2019; (ii) strengthened the supervision of services
provided by the Preponderant Economic Agent and tariff arrangements made with its clients; (iii) included certain rules relating to publicity of its
tariffs; and (iv) included a new electronic management system. Under the New Preponderance Measures, the IFT determined specific tariffs for
our third and fourth infrastructure offers.
●
Prohibition on acquiring certain exclusive content — This measure has been modified by enabling the Preponderant Economic Agent to acquire
relevant content under certain circumstances as long as it obtains the sublicense of such transmission rights to the other broadcasters of over-the-
air television in Mexico on non-discriminatory terms.
●
Advertising sales — IFT modified this measure by including specific requirements to the Preponderant Economic Agent in its provision of over
the air advertising services, particularly to telecommunications companies, which include (i) publishing and delivering to IFT specific information
regarding tariffs, discount plans, contracting and sales terms and conditions, contract forms and other relevant practices; and (ii) prohibiting
discrimination, refusals to deal, conditioned sales and other conditions that inhibit competition. The Preponderant Economic Agent also has to
provide very detailed information to IFT on a recurrent basis of over the air advertising services related to telecommunications companies.
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●
Accounting separation — We, as the Preponderant Economic Agent, are required to implement an accounting separation methodology following
the criteria defined by IFT for those purposes, which criteria were published in the Diario Oficial de la Federación, or the Official Gazette of the
Federation, on December 29, 2017. Such criteria were amended by a first amendment published on October 29, 2018, where IFT simplified some
reporting obligations for accounting separation for entities that are part of the Preponderant Economic Agent, other than our subsidiaries.
Furthermore, a second amendment was published on December 19, 2019, where IFT deferred the deadline for the filing of the accounting
separation exercises for the fiscal years 2017 and 2018 to July 31, 2019, which we filed timely. We timely filed the accounting separation
methodology for fiscal years 2020, 2021 and 2022, and have begun the process of the accounting separation methodology for fiscal year 2023,
which will be filed with IFT later in 2024.
On March 28, 2014, we, together with our subsidiaries determined to be the Preponderant Economic Agent in the broadcasting sector, filed an amparo
proceeding challenging the constitutionality of the Preponderance Decision. On November 21, 2019, the Supreme Court resolved the amparo proceeding.
The Supreme Court declared the constitutionality of the Preponderance Decision, which, therefore, remains in force.
Additionally, on March 31, 2017, we, together with our subsidiaries, filed an amparo proceeding challenging the constitutionality of the New
Preponderance Measures. On November 21, 2019, the Second Chamber of the Supreme Court of Justice granted the amparo and revoked the New
Preponderance Measures. As a result, the applicable and valid measures that are in force are those issued under the Preponderance Decision.
The biennial review of the broadcasting sector preponderance rules that began in 2019 was concluded due to the resolution of the amparo. A new
biennial review began in 2023 and on April 30, 2024, the IFT notified the Company of the ruling of their biennial review proceeding to modify, add, and
remove some of the existing preponderance measures in the broadcasting sector. The modifications to the previous ruling include: updating requirements
and specific elements to be considered in the Public Offering of Passive Infrastructure and its Electronic Management System (SEG), including in
connection with tariffs negotiation; the continuation of the prohibition to acquire Relevant Audiovisual Content on an exclusive basis, unless the right to
sublicense such content to other broadcasters in Mexico is acquired; and the addition of specific requirements for the provision of advertising services,
particularly for the promotion of telecommunications services.
The Telecom Reform provided for a public bid or auction to grant licenses to establish the National Digital Networks. The “Auction Program for
Digital Television Broadcast Frequencies” took place in 2014 and the first part of 2015. See “— Existing Mexican Laws and Regulations or Changes
Thereto or the Imposition of New Ones May Negatively Affect Our Operations and Revenue”.
The LFTR provides that integrated sole concessions will be renewed for terms equal to the maximum terms for which they could be granted, namely,
up to 30 years. To request the renewal of a concession, a concession holder must: (i) file its request with IFT one year prior to the beginning of the fifth
period of the term of the concession; (ii) comply with its obligations established in the applicable laws and in the concession title; and (iii) accept the new
conditions that IFT may impose. In such cases, IFT will issue its ruling within 180 days following the date the concession holder files the renewal request.
If IFT does not issue its ruling within 180 days, the renewal will be automatically granted.
In the case of concessions for the use of radio-electric spectrum, the maximum term of renewal is 20 years. Renewal of concessions for the use of
spectrum require, among others: (i) to request such renewal to IFT in the year prior to the last fifth period of the fixed term of the related concession; (ii) to
be in compliance with the concession holder’s obligations under the LFTR, other applicable regulations, and the concession title; (iii) a declaration by IFT
that there is no public interest in recovering the spectrum granted under the related concession; and (iv) the acceptance by the concession holder of any new
conditions for renewing the concession as set forth by IFT, including the payment of a related fee. To our knowledge, no spectrum granted for broadcasting
services in Mexico has been recovered by the Mexican government in the past several years for public interest reasons; however, the Company is unable to
predict the outcome of any action by IFT in this regard.
IFT has approved the renewal of the concession titles for the use of spectrum for the broadcast television signals known as Las Estrellas, Canal 5,
NU9VE, Foro TV and other local television stations, for a term of 20 years after the existing expiration dates, as well as the issuance of concessions that
grant the authorization to provide digital broadcasting television services.
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As part of our expansion of our Cable business, on December 17, 2018, we acquired FTTH de México, S.A. de C.V., or FTTH, under the provisions set
forth in transitory Article 9 of LFTR. On May 8, 2019, the IFT launched an investigation to analyze if, as a result of the transaction, the Company and
TVSA acquired substantial power in the market of telecommunications networks providing voice, data or video services. On September 4, 2019, the IFT
Investigative Authority issued a preliminary opinion, whereby it assessed that there were elements to determine that the Company had substantial power in
35 relevant markets of the telecommunications networks that provide restricted television and audio services. Those relevant markets comprise 35
municipalities in the following States: Aguascalientes, Chihuahua, Ciudad de México, Estado de México, Jalisco, Nuevo León and San Luis Potosí. As a
response to the preliminary opinion, the Company presented its position and provided evidence to prove that the Company does not hold substantial power
in the relevant markets established in the preliminary opinion. On November 26, 2020, the IFT notified the Company of the final resolution confirming the
existence of substantial power in the 35 relevant markets of restricted television and audio services. Consequently, on December 17, 2020, the Company
filed three amparos challenging the constitutionality of the resolution. In October 2022, TVSA, the Company and some subsidiaries of the Company’s
Cable and Sky businesses obtained favorable amparo resolutions from a specialized federal judge which determined that the resolution of IFT about the
substantial power on the restricted services of the television and audio market in 35 municipalities in Mexico, after the acquisition of the direct to home
fiber-optic and assets related to Axtel, S.A.B. de C.V. in December 2018, was unconstitutional. On January 24, 2024, a Federal Court resolved through a
final resolution from the amparo of TVSA and instructed the IFT to revoke the substantial power resolution. On March 6, 2024, as a result of the amparo
resolution, the IFT revoked the substantial power resolution and determined to close the file only for TVSA. On May 16, 2024, a Federal Court ruled on the
amparo proceedings of the Company and some subsidiaries of its Cable and Sky businesses, ordering the IFT to repeal the determination that declared the
Company, its concessionaires of restricted television and audio services and other entities as Economic Agent with Substantial Power in the 35 relevant
markets of restricted television and audio services. On June 21, 2024, the IFT notified the Company of such repeal ruling in compliance with the guidelines
issued by the Federal Court. With this resolution, the procedure initiated by the IFT to impose asymmetric measures on the Company and its subsidiaries
was also repealed, and the measures provided in the current regulations for these purposes are no longer applicable. Some of the consequences derived
from the determination of substantial market power are applicable as a matter of law and others may be imposed by IFT in a new procedure in accordance
with the LFTR; these may consist of: (i) the obligation to obtain IFT’s approval and to register the rates for our services; (ii) to inform the IFT in case of the
adoption of new technology or modifications to the network; (iii) the agent with substantial power may not be entitled to the benefits of some rules of the
“must carry” and “must offer” provisions; and (iv) the implementation of accounting separation.
In October 2022, the Company, TVSA and certain subsidiaries of the Company’s Cable and Sky segments (the “Complainants”) obtained favorable
amparo resolutions from a specialized federal judge. The resolutions ruled that the IFT’s determination regarding substantial power in the market of
restricted television and audio services in 35 Mexican municipalities, following the acquisition of Axtel, S.A.B. de C.V.’s residential optical fiber-to-the-
home and related assets in 2018, was unconstitutional. In the event that an authority challenges these resolutions, the Complainants would continue
defending the judgment and would seek to extend the effects of its protection.
Overall, the Telecom Reform, the LFTR and secondary regulations already issued and to be issued by the executive power or the Mexican Congress, as
applicable, as well as any actions taken by the new regulator, may increase our operating costs and interfere with our ability to provide, or prevent us from
offering, some of our current or future services.
The transition to the new regulatory entities could introduce further uncertainty regarding compliance obligations, competitive conditions, and market
dynamics, all of which may materially affect our business and financial performance. As the legislative and regulatory landscape continues to evolve, we
will closely monitor any changes that may impact our business operations, including potential amendments to the LFTR and new enforcement mechanisms
established by the restructured regulatory framework.
See “Information on the Company—Business Overview—Regulation—Telecom Reform and Broadcasting Regulations”.
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Risk Factors Related to Our Major Stockholders
Emilio Azcárraga Jean Has and Will Have Substantial Influence Over Our Management and the Interests of Mr. Azcárraga Jean may Differ from
Those of Other Stockholders
We have four classes of stock: Series “A” Shares, Series “B” Shares, Series “D” Shares, and Series “L” Shares. A trust for the benefit of Emilio
Azcárraga Jean, or the Azcárraga Trust, currently holds 44.7% of the outstanding Series “A” shares, 0.1% of the outstanding Series “B” shares, 0.1% of the
outstanding Series “D” shares and 0.1% of the outstanding Series “L” shares of the Company. As a result, Emilio Azcárraga Jean controls the vote of the
shares held through the Azcárraga Trust. The Series “A” Shares held through the Azcárraga Trust constitute a majority of the Series “A” Shares whose
holders are entitled to vote because non-Mexican holders of CPOs or GDSs are not permitted to vote the underlying Series “A” Shares in accordance with
the trust agreement governing the CPOs and the Company’s bylaws. Accordingly, and so long as non-Mexicans own more than a minimal number of Series
“A” Shares, Emilio Azcárraga Jean will have the ability to direct the election of 11 out of 20 members of our Board of Directors, as well as prevent certain
actions by the stockholders, including dividend payments, mergers, spin-offs, changes in corporate purpose, changes of nationality and amendments to the
anti-takeover provisions of our bylaws. See “Major Stockholders and Related Party Transactions—The Major Stockholders”.
As Controlling Stockholder, Emilio Azcárraga Jean Has the Ability to Limit Our Ability to Raise Capital, Which Would Require Us to Seek Other
Financing Arrangements
Emilio Azcárraga Jean has the voting power to prevent us from raising money through equity offerings. Mr. Azcárraga Jean has informed us that if we
conduct a primary sale of our equity, he would consider exercising his pre-emptive rights to purchase a sufficient number of additional Series “A” Shares in
order to maintain such power. In the event that Mr. Azcárraga Jean is unwilling to subscribe for additional shares and/or prevents us from raising money
through equity offerings, we would need to raise money through a combination of debt or other forms of financing, which we may not obtain, or if so,
possibly not on favorable terms.
Risk Factors Related to Our Business
The Operation of Our Business May Be Adversely Affected if the Mexican Government Does Not Renew or Revokes Our Broadcast or Other
Concessions
In June 2013, the Mexican Federal Congress passed the Telecom Reform which, among other things, created IFT. IFT has the authority to grant
concessions for radio and television stations as well as for telecommunications services.
We hold a number of concessions from IFT (previously from Secretaría de Comunicaciones y Transportes or SCT) to broadcast programming over
television stations, and to provide telecommunication services. In November 2018, all of our digital broadcast television concessions were renewed and, as
a consequence, IFT delivered to the Company concessions (i) for the use of spectrum until 2042 and (ii) that grant the authorization to provide digital
broadcasting television services until 2052. See “—Risk Factors Related to Mexico—Existing Mexican Laws and Regulations or Changes Thereto or the
Imposition of New Ones May Negatively Affect Our Operations and Revenue”. The expiration dates of our cable concessions range from 2026 to 2059 and
our DTH concessions expire between 2030 and 2056. Cablevisión, S.A. de C.V. (“Cablevisión”) obtained a telecommunications concession expiring in
2029, which changed to an integrated sole concession in 2019, but kept its original term. In September 2022, Cablevisión began the process of extending
the term of the integrated sole concession title granted in May 2019, and through a resolution dated June 7, 2023, the Plenary of the IFT authorized the
extension of the term of the Cablevisión integrated sole concession for an additional 30 years beginning in September 2029. Consequently, in August 2023,
the IFT delivered to Cablevisión a new integrated sole concession title that authorizes Cablevisión for such additional period.
Before the Telecom Reform in 2013, the SCT typically renewed the concessions of those concessionaires that complied with the applicable renewal
procedures under Mexican law and with their obligations under the concession. In July 2014, the Mexican Federal Congress enacted the LFTR, which
provides that integrated sole concessions will be renewed for terms equal to the maximum terms for which they could be granted, namely, up to 30 years,
except for spectrum which will be renewed for terms of 20 years, and in case of concessions for the use of radio-spectrum, the maximum term for renewal
is 20 years.
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See “—Risk Factors Related to Mexico—Existing Mexican Laws and Regulations or Changes Thereto or the Imposition of New Ones May Negatively
Affect Our Operations and Revenue” and “—Risk Factors Related to Mexico—The Amendment of Various Provisions of the Mexican Constitution Related
to Telecommunications, and the LFTR, May Significantly and Adversely Affect the Business, Results of Operations and Financial Results of Some of Our
Business Segments”.
We Face Intense Competition in Each of Our Markets
We face competition in all of our businesses. The entities in which we have strategic investments and the joint ventures in which we participate,
including TelevisaUnivision, also face intense competition. We expect that competition in our different businesses will intensify.
In addition, the industries in which we operate are changing rapidly because of new participants and evolving technologies.
The cable industry in Mexico has become highly competitive, and we face significant competition. Most telecommunications operators are authorized
to provide pay-TV, internet broadband services and voice services, including Voice over Internet Protocol, or VoIP, which poses a risk to us. We also face
competition from the Preponderant Economic Agent in telecommunications, particularly in the provision of broadband and fixed telephony services. Our
broadband services also face competition from mobile telecom and low earth orbit satellite operators. The cable business is also capital intensive.
Our pay-TV companies face competition from IPTV, AVOD or over-the-top (“OTT”) providers such as Netflix, Disney+, Claro Video, Prime Video
(Amazon), Star+, Max, Apple TV+ and YouTube among others, as well as from other pay-TV operators such as Dish México, Total Play, Megacable and
other cable television companies.
Our DTH satellite business faces competition from various competitors, including other DTH operators in Mexico, such as Dish México, and pay-TV
providers such as Megacable, Total Play, as well as from Digital TV, OTT and other streaming platforms.
Our businesses compete with other traditional and digital media companies with respect to advertising and sales, including pay-TV, social media,
podcasts, outdoor advertising and publishing, among others.
Our future success will be affected by changes in the industries where we participate, which we cannot predict, and consolidation in such industries
could further intensify competitive pressures. We expect to face competition from an increasing number of sources in Mexico and abroad, including
emerging technologies that provide new services to broadband and pay-TV customers and new entrants in the industries where we participate, which will
require us to make significant investments and capital expenditures in new technologies and will result in higher costs in the acquisition of content or may
impair our ability to renew rights to special events, including sporting and entertainment events. Our business may require substantial capital to pursue
additional acquisitions and capital expenditures, which may result in additional incurrence of leverage, issuance of additional capital or a combination
thereof.
Loss of Transmission or Loss of the Use of Satellite Transponders Could Cause a Business Interruption in Innova, Which Would Adversely Affect Our
Net Income
Media and telecom companies, including Innova, rely on satellite transmissions to conduct their day-to-day business. Any unforeseen and sudden loss
of transmission or non-performance of the satellite for Innova can cause huge losses to Innova’s business. The unforeseen loss of transmission may be
caused due to the satellite’s loss of the orbital slot or the reduction in the satellite’s functional life.
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The size of the business interruption impact for Innova in the case of a satellite loss exceeds the insurance we have acquired to cover this risk. In order
to reduce the possibility of financial consequences resulting from an unforeseen loss of transmission, Innova entered into an agreement to launch a backup
satellite jointly with Sky Brasil Servicos Ltda., or Sky Brasil, which was launched in the first quarter of 2010. In the third quarter of 2013, Sky entered into
an agreement with DirecTV for the acquisition and launch of a satellite named SM-1, which started operations in June 2015. In the future, we may have to
invest in additional satellite capacity. We cannot predict the extent of losses to Innova in the case of current or new satellite loss or the effectiveness of any
alternative strategy.
Any Incidents Affecting Our Network and Information Systems or Other Technologies Could Have an Adverse Impact on Our Business, Reputation
and Results of Operations.
Our business operations rely heavily on network and information systems and other technology systems, including cloud computing. We also rely on
our information technology systems and those from third parties. Incidents affecting these systems, such as cyber-attacks, malware (including deployment
of ransomware), phishing and social engineering compromises, denial of service attacks and other destructive or disruptive activities, process breakdowns,
outages, or malicious or accidental release of information may lead to a disruption of our operations, improper disclosure of personal data of clients,
subscribers, or employees, or other privileged or confidential information, or unauthorized access to our digital content or any other type of intellectual
property. It is common for a company such as ours to be subjected to continuous attempted cyber-attacks or other malicious efforts designed to cause a
cybersecurity incident. Such attempts, if successful, could lead to interruptions of our business and damage our reputation and may require us to expend
substantial resources on litigation, regulatory investigation and enforcement, and remediation costs, and could therefore have a material adverse effect on
our business, including our strategy, reputation, results of operations, and financial condition. We continue to work closely with our external advisors to
prevent cybersecurity incidents, and to invest in maintaining and improving our cybersecurity resilience, and the Company’s cybersecurity risks, and
mitigation actions are monitored by the Information Security group, and referred to the Audit Committee that reports to our Board of Directors. However,
we cannot assure that we or our respective third-party service providers will not experience any future security breaches, cyber-attacks or unauthorized
disclosures. The tools and methods used by hackers and cyber criminals (such as the increasing use of artificial intelligence (“AI”)), including emerging
technology such as generative AI, are augmenting cybercriminal capabilities, enabling more sophisticated and scalable attacks (for instance, phishing and
social engineering). There can be no assurance that our or our third-party service providers’ preventative efforts can fully prevent or mitigate all such
incidents or be successful in avoiding harm to our business in the future.
Use of Artificial Intelligence in Our Operations Could Result in Reputational or Competitive Harm, Legal or Regulatory Liability and Adverse Impacts
on Our Results of Operations.
We have incorporated, and expect to continue to incorporate in the future, AI technologies into our operations and product offerings. The use of AI
involves various risks and challenges that could adversely affect our business, financial condition or results of operations. We currently use AI technologies,
including those licensed from third parties in our business to increase efficiency in our internal operations. We also leverage large language models to offer
letizzia, an AI-powered chatbot assistant, on our izzi website to improve customer service efficiency and experience. The development and deployment of
AI technologies (including technologies developed or deployed by third-party vendors) involve inherent technical complexities and uncertainties, and these
technologies may encounter unexpected technical difficulties, disruptions, outages, loss of data, and limitations or errors, including inaccuracies in data
processing or flawed algorithms, which we may not be able to detect or control and could compromise the reliability and effectiveness of our products and
services incorporating such systems.
The use of AI technologies, including large language models, has resulted in, and may in the future result in, cybersecurity vulnerabilities or incidents
that implicate the personal information, intellectual property, proprietary data or other sensitive information of end users of such applications. Any such
cybersecurity incidents related to our use of AI technology, or our vendors’ use of AI technology, could adversely affect our business strategy, reputation
and results of operations. As with many developing technologies, AI presents risks and challenges that could affect its further development, adoption, and
use, and therefore our business. AI algorithms and models may be flawed. Datasets used in AI training, development, or operations may be insufficient, of
poor quality, reflect unwanted forms of bias, or raise other legal concerns (such as concerns regarding copyright protections). AI technology also presents
emerging social and ethical issues, and if our use of such technology draws scrutiny or becomes controversial, we may experience brand or reputational
harm, competitive harm, regulatory investigations and/or legal liability.
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The increased adoption of AI technologies in our products and services also may result in new or enhanced governmental or regulatory scrutiny,
litigation, confidentiality or security risks or other complications that could adversely affect our business, reputation or financial results. The regulatory
landscape governing AI technologies is evolving rapidly, and various jurisdictions, including Europe and certain U.S. states, have proposed or already
adopted laws governing the use, development and deployment of AI technologies. Changes in laws, regulations or enforcement practices may impose new
compliance requirements, restrict certain AI applications or increase our regulatory obligations, which could negatively impact our business and results of
operations.
We Are Subject to a Variety of Global Laws, Regulations, and Rules Related to Privacy and Personal Data Protection, Which Are Evolving, and
Increased Public Scrutiny of Privacy and Security Issues Could Result in Increased Government Regulation, Industry Standards, and Other Legal
Obligations That Could Adversely Affect Our Business
In the ordinary course of business and in particular in connection with content acquisition, making our services and products available to consumers,
we collect and utilize information supplied by consumers and other third parties, which may include personal information and other data. As a result, we
are subject to laws, rules and regulations in Mexico, the E.U., the U.S., and in other countries relating to privacy and the collection, use and security of
personal information.
A growing number of global jurisdictions have passed and/or are considering legislation implementing privacy and data protection requirements that
could increase the cost and complexity of delivering our products and services. For example, in Mexico, the Federal Law for Protection of Personal Data
Held by Private Persons (Ley Federal de Protección de Datos Personales en Posesión de los Particulares, or LFPDPPP) protects personal data collected by
us and, among other things, requires that we ensure the confidentiality of information received from customers. On December 20, 2024, a decree was
published to dissolve the National Institute for Transparency, Access to Information, and Personal Data Protection (INAI). Its responsibilities for
transparency and personal data protection were transferred to the Ministry of Anticorruption and Good Governance (formerly the Ministry of Public
Function). The specific department overseeing data protection will be defined in the Ministry’s Internal Regulations. Despite the INAI’s dissolution,
Mexico’s data protection framework remains in place, including the LFPDPPP, its Regulations, and Privacy Notice Guidelines. However, regulatory
enforcement may face uncertainties during and after the transition.
Also, in the E.U., the General Data Protection Regulation (the “GDPR”) imposes stringent operational requirements for entities processing personal
data, restricts the trans-border flow of certain personal data, and imposes significant penalties of up to the greater of 20 million euros or 4% of the annual
global revenue of a noncompliant company for violations of the GDPR’s requirements. Such penalties are in addition to any civil litigation claims by data
subjects. Ensuring compliance with the GDPR and similar laws is an ongoing commitment that involves substantial costs, and it is possible that despite our
efforts, governmental authorities or third parties will assert that our services or business practices fail to comply.
In the U.S., the California Consumer Privacy Act (“CCPA”), as amended by the California Consumer Privacy Rights Act, regulates companies’ use and
disclosure of the personal information of California residents, gives California residents rights with respect to their personal information, and authorizes
enforcement actions by the California Attorney General and the California Privacy Protection Agency and private class actions for data breaches. The
CCPA marked the beginning of a trend toward more stringent state data privacy legislation in the United States. Numerous other states have also enacted,
or are in the process of enacting or considering, comprehensive state-level data privacy and security laws, rules, and regulations that share similarities with
the CCPA. Each of these laws regulate the way that companies collect, use, and share personal information about certain consumers located in those states,
may impose restrictions on our ability to collect, use and disclose personal information and increase our obligations to safeguard, certain consumer
information.
Given the breadth and depth of changes in global data protection obligations, compliance has caused us to expend significant resources, and such
expenditures are likely to continue into the future as we continue our compliance efforts. Our failure to adhere to or successfully implement processes in
response to changing regulatory requirements in this area could result in legal liability or impairment to our reputation in the marketplace, which could
have a material adverse effect on our business, financial condition and results of operations.
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These laws and regulations are subject to frequent changes and amendments, and sometimes conflict among the various jurisdictions and countries in
which we do business. It also is possible that they may be interpreted and applied in a manner that is inconsistent with our data privacy and information
security practices. If we are unable to develop and offer our products and services in a manner that meets legal requirements or if we violate or are
perceived to violate any of these laws, regulations, or other obligations relating to data privacy, data protection, or information security, we may experience
reduced demand for our products and services, harm to our reputation, or become subject to increased compliance costs, investigations, litigation, or
regulatory action, which could expose us to significant fines, penalties, and other damages, or require us to make changes to our business practices, all of
which could have a material adverse effect on our business, financial condition, and results of operations.
Following the Consummation of the TelevisaUnivision Transaction and the Spin-Off of Certain Businesses of our Former Other Businesses Segment
to create Ollamani, Our Continuing Operations Are Less Diversified, Primarily Focused on Our Cable and Sky Segments, and Rely Significantly on
Contractual Arrangements with TelevisaUnivision to Provide Content for Our Operations
Following the completion of the TelevisaUnivision Transaction and Spin-off, revenue from our continuing operations is less diversified. Due to the
combination of our former Content business with TelevisaUnivision and the Spin-off, our results of operations have been more reliant on our Cable and
Sky segments, which increases our exposure to the risks of such businesses.
In addition, as a result of the TelevisaUnivision Transaction, our remaining businesses will have significant contractual arrangements with
TelevisaUnivision to provide content for our Sky and Cable platforms. As we no longer control the content assets on which our business relies,
TelevisaUnivision could pursue a content development, production and distribution strategy that is different from the strategy we would have pursued
before the transaction. TelevisaUnivision also could breach its contractual arrangements with us and/or otherwise take actions that are detrimental to our
interests. In addition, if there is any dispute relating to our contractual arrangements with TelevisaUnivision, we may have to enforce our rights through
litigation or other legal proceedings, which would be subject to uncertainties inherent in the legal system and may be expensive or protracted, even if we
are ultimately successful and there can be no assurance we would be successful. As the composition of our business is different following the completion of
the TelevisaUnivision Transaction and the Spin-off, our success going forward may also depend on our ability to manage risks that may be different from
those we faced prior to the TelevisaUnivision Transaction and the Spin-off. Any of the foregoing factors, among others, may have a material adverse effect
on our business, financial condition and results of operations, as well as the market price of our CPOs and/or GDSs.
We May Identify Material Weaknesses in Our Internal Controls Over Financial Reporting in the Future, and Any Future Material Weaknesses or
Failure to Achieve an Effective System of Internal Controls, May Cause Us Not to Be Able to Report Our Financial Results Accurately. In Addition, the
Trading Price of Our Securities May Be Adversely Affected by a Related Negative Market Reaction
In connection with the preparation of our financial statements, we may identify material weaknesses (as defined under standards established by the
Public Company Accounting Oversight Board) in our internal controls over financial reporting in the future. A material weakness is a deficiency, or a
combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the
Company’s annual or interim financial statements will not be prevented or detected on a timely basis.
If any future material weaknesses occur, it could affect the accuracy of our reporting on the future results of operations and our ability to make our
required filings with government authorities, including the SEC. Furthermore, our business and operating results and the price of our securities may be
adversely affected by related negative market reactions. While we have no reason to believe there will be any future material weaknesses identified, we
cannot be certain that in the future additional material weaknesses will not exist or otherwise be discovered.
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Climate Change Effects May Have an Adverse Impact On Our Operations and Our Financial Results
The effects of climate change and extreme weather events (such as sea level rise, drought, flooding, heat waves, wildfires and resultant air quality
effects and power shutdowns associated with wildfire prevention, hurricanes and increased storm severity, as well as earthquakes in Mexico’s seismic
zones) may affect our operations and financial results, and cause interruptions in the services we provide, our suppliers’ ability to provide us the services
and goods necessary for our operations, and cause damage to our infrastructure. We could incur significant costs as a result of the physical effects of
climate change. We also may not have enough coverage under our insurance policies to recover the amounts required to address impacts relating to these
incidents. In addition, claims for certain losses could be denied or subject to deductibles, exclusions under our insurance policies, and our insurance
premiums may increase substantially because of such claims, or insurance companies could altogether avoid coverage in certain areas with high exposure
to extreme weather events. We are also subject to transition risks (such as additional legal or regulatory requirements, changes in technology, market risk
and reputational risk) and social and human effects (such as harm to health and well-being) associated with climate change. New legal or regulatory
requirements to prevent, mitigate, or adapt to the implications of a changing climate could result in our being subject to increased compliance costs,
restrictions on greenhouse gas emissions, investment in new technologies, increased carbon disclosure and transparency, investments in developing data
gathering and reporting systems, upgrade of facilities to meet new building codes, and increased energy costs, which could increase our operating costs.
Our supply chain would also likely be subject to these same transition risks and would likely pass along any increased costs and disclosure requirements to
us, which may impact our ability to procure goods or services required for the operation of our business.
A Department of Justice Investigation of FIFA-Related Activity May Have a Material Impact on Our Consolidated Financial Condition or Results of
Operations
As the Company previously announced on August 30, 2024, a Department of Justice investigation of FIFA-related activity may have a material impact
on the Company’s consolidated financial condition or results of operations. The Company cannot predict the outcome of the investigation or whether it will
in fact have a material impact. The Company is cooperating with the investigation. For a description of the investigation, see “Additional Information—
Legal Proceedings”.
Risk Factors Related to TelevisaUnivision
The Results of Operations of TelevisaUnivision May Affect Our Financial Performance and the Value of Our Investment in that Company; Key
Members of Our Management Team Also Participate in the Management of the Mexican Content Business of TelevisaUnivision
We have a substantial investment in TelevisaUnivision, the ultimate parent company of Univision Holdings, Inc. (“UHI”) and Univision
Communications Inc. (“UCI”; together with TelevisaUnivision and UHI, “Univision”). On January 31, 2022, we consummated the TelevisaUnivision
Transaction with Univision and, for the limited purposes set forth in the transaction agreement (the “2021 Transaction Agreement”), affiliates of
Searchlight Capital Partners, LP (“Searchlight”), ForgeLight LLC (“ForgeLight”) and Liberty Global plc, through its venture investment vehicle (“Liberty
Global”), pursuant to which, among other things, we contributed our former Content business segment (other than certain assets including the main real
estate associated with the production facilities and Mexican over-the-air broadcast concessions and transmission infrastructure, as well as assets relating to
our former news business which was transferred at closing to an entity controlled by Emilio Fernando Azcárraga Jean (the “News Company”)) to
Univision. After the closing of the TelevisaUnivision Transaction, news programs are owned by the News Company and licensed to TelevisaUnivision. In
consideration for the contribution of our former Content business, we received approximately U.S.$4.5 billion in a combination of cash (U.S.$3.0 billion)
and U.S.$1.5 billion of common and preferred shares of TelevisaUnivision, excluding post-closing adjustments. The TelevisaUnivision Transaction was
partially financed by Univision through a new Series C preferred equity investment in TelevisaUnivision of U.S.$1.0 billion in the aggregate led by
ForgeLight, along with the SoftBank Latin American Fund, with participation from Google and The Raine Group, as well as debt financing. As of March
31, 2025, we owned a 42.6% equity interest on an as-converted basis (excluding unvested and/or unsettled stock, restricted stock units and options) in
TelevisaUnivision. However, we do not control TelevisaUnivision. As a result, we do not consolidate TelevisaUnivision’s results and we no longer
consolidate the results of the former Content business segment that we contributed in the TelevisaUnivision Transaction. Our investment in
TelevisaUnivision is currently held in the form of shares of common stock and convertible preferred stock. The value of the common stock and preferred
stock of TelevisaUnivision, neither of which are publicly traded, will fluctuate and could materially increase or decrease in value.
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The value of those shares of TelevisaUnivision common stock and convertible preferred stock, and thus the value of our investment in
TelevisaUnivision and our reported results of operations, will be affected by the results of operations of TelevisaUnivision and its subsidiaries. The
business, financial condition and results of operations of TelevisaUnivision and its subsidiaries could be materially and adversely affected by risks
including, but not limited to: (i) TelevisaUnivision’s inability or failure to service or refinance its debt, particularly in a higher interest rate environment; (ii)
cancellation, reductions or postponements of advertising; (iii) adverse global and national economic conditions, including inflationary pressures and
exchange rate volatility; (iv) changes in the size of the U.S. Hispanic population, including the impact of U.S. federal and state immigration legislation and
policies on both the U.S. Hispanic population and persons emigrating from Latin America, as well as an increase in the preference among Hispanics for
English-language programming, or Spanish-language programming on platforms other than those of TelevisaUnivision; (v) an increase in the cost of,
and/or decrease in the supply, quality of and/or demand for, TelevisaUnivision’s content; (vi) changes in the rules and regulations of the Federal
Communications Commission (the “FCC”), as well as other federal, state and local regulations, including those applicable in Mexico; (vii) competitive
pressures from other content distributors, other entertainment and news media and broadcasters, particularly in Mexico and the U.S. markets, including the
New York, Los Angeles and Miami-Fort Lauderdale markets, where a large percentage of TelevisaUnivision’s target audience lives; (viii)
TelevisaUnivision’s failure to retain the rights to popular programming, including sports programming; (ix) TelevisaUnivision’s failure to renew existing
carriage agreements or reach new carriage agreements with multichannel video programming distributors or other content distributors, (x) possible strikes
or other union job actions; (xi) the impact of new technologies as well as TelevisaUnivision’s ability to successfully operate ViX, its streaming operations;
and (xii) failure to develop, produce or acquire content for, attract customers for and/or profitably commercialize ViX as a Spanish-language direct to
consumer and direct to business platform.
Macroeconomic conditions, including any future pandemic, epidemic or outbreak of infectious disease could have an adverse impact on
TelevisaUnivision, due to, among other things, the potential negative impact on advertising trends and advertising revenue, the suspension of sporting
events and curtailment or suspension of other programming production to which TelevisaUnivision has broadcast rights, reductions or delays in the
production of programming by TelevisaUnvision’s partners and general disruptions to business and operations. Due to the evolving and uncertain nature of
any future pandemic, epidemic or outbreak of infectious disease, we cannot estimate the impact on TelevisaUnivision’s businesses, financial condition or
near or longer-term financial or operational results with certainty.
There can be no assurance that the results of operations of TelevisaUnivision and its respective subsidiaries will be sufficient to maintain or increase
the value of our investment, including payment of dividends to its existing shareholders, or that such results will not materially and adversely affect our
business, financial condition and results of operations. In addition, no public market exists for TelevisaUnivision’s shares, and such shares are subject to
transfer restrictions, so there can be no assurance that we will be able to realize value from our investment in TelevisaUnivision at a time when it may be
beneficial for us to do so, or at all. For a discussion of our investment in TelevisaUnivision, see “Information on the Company—Business Overview—
TelevisaUnivision”.
In addition, as part of the combination of our former Content business with TelevisaUnivision’s other operations, Messrs. Bernardo Gómez Martínez
and Alfonso de Angoitia Noriega became part of the management team of the Mexican content business of TelevisaUnivision. These individuals also
continue to serve as Co-Chief Executive Officers of the Company. As a result, they do not devote all of their time to either TelevisaUnivision or the
Company. Additionally, our directors and officers may have interests that are different from those of our shareholders and actual or apparent conflicts of
interest may arise with respect to matters involving or affecting us and TelevisaUnivision.
The Performance of TelevisaUnivision May Affect the Market Price of Our Shares and of Our CPOs or GDSs, the Underlying Asset of Which Are Our
Shares
As of March 31, 2025, we owned a 42.6% equity interest on an as-converted basis (excluding unvested and/or unsettled stock, restricted stock units
and options) in TelevisaUnivision. Such interest forms an important part of our assets and an important part of our share of income of associates and joint
ventures. As a result of the foregoing, the performance of TelevisaUnivision may have an effect on the market price of our shares or of the CPOs or GDSs,
the underlying asset of which are the shares of Grupo Televisa. In addition, changes in market conditions, particularly in relation to U.S. media companies,
could impact the valuation of TelevisaUnivision and may affect the market price of our shares.
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Although We Have a Large Equity Interest in TelevisaUnivision, We Do Not Control TelevisaUnivision and Its Interests May Differ from Those of
Grupo Televisa or Other Investors in TelevisaUnivision and Grupo Televisa’s Interests May Differ from Those of Other Investors in TelevisaUnivision
We are the largest shareholder of TelevisaUnivision, and we are entitled to appoint five directors to the Board of Directors of TelevisaUnivision,
including the chairperson. However, such equity interest and our governance rights do not grant us control over TelevisaUnivision, and TelevisaUnivision is
deemed an “associate” (asociada) of ours under current applicable accounting standards. As a result of the foregoing, if the interests of the rest of the
investors of TelevisaUnivision differ from our interests, TelevisaUnivision may conduct its businesses differently than the way that is in the best interests of
us and our shareholders, and such change may have an adverse effect on our financial position and results of operations and the expected benefits of the
TelevisaUnivision Transaction. In particular, the other major investors in TelevisaUnivision are in the business of making investments in companies and
may, from time to time, acquire and hold interest in businesses that compete directly or indirectly with TelevisaUnivision, as well as businesses that
represent major customers of TelevisaUnivision. Such investors may also pursue acquisition opportunities that may be complementary to the business of
TelevisaUnivision, and as a result, those acquisition opportunities may not be available to TelevisaUnivision. Such transactions may have an adverse effect
on our financial position and results of operations and the expected benefits of the TelevisaUnivision Transaction.
Risk Factors Related to Our Securities
Any Actions Stockholders May Wish to Bring Concerning Our Bylaws or the CPO Trust Must Be Brought in a Mexican Court
Our bylaws provide that a stockholder must bring any legal actions concerning our bylaws in courts located in Mexico City. All parties to the trust
agreement governing the CPOs, including the holders of CPOs, have agreed to submit any legal actions concerning the trust agreement only to Mexican
courts.
Non-Mexicans May Not Hold Series “A” Shares, Series “B” Shares or Series “D” Shares Directly and Must Have Them Held in a Trust at All Times
As a result of the Telecom Reform, the regulatory framework was amended to allow foreign direct investment of up to 100% of the equity interest of
Mexican companies doing business in telecommunications and satellite communications, and up to 49% in the broadcasting sector, subject to reciprocity
from the country of the ultimate investor. Notwithstanding the above, the trust governing the CPOs and our bylaws still restrict non-Mexicans from directly
owning Series “A” Shares, Series “B” Shares or Series “D” Shares. Non-Mexicans may hold Series “A” Shares, Series “B” Shares or Series “D” Shares
indirectly through the CPO Trust, which will control the voting of such shares. Under the terms of the CPO Trust, a non-Mexican holder of CPOs or GDSs
may instruct the CPO Trustee to request that we issue and deliver certificates representing each of the shares underlying its CPOs so that the CPO Trustee
may sell, to a third party entitled to hold the shares, all of these shares and deliver to the holder any proceeds derived from the sale.
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Non-Mexican Holders of Our Securities Forfeit Their Securities if They Invoke the Protection of Their Government
Pursuant to Mexican law, our bylaws provide that non-Mexican holders of CPOs or GDSs may not ask their government to interpose a claim against
the Mexican government regarding their rights as stockholders. If non-Mexican holders of CPOs or GDSs violate this provision of our bylaws, they will
automatically forfeit the Series “A” Shares, Series “B” Shares, Series “L” Shares and Series “D” Shares underlying their CPOs or GDSs to the Mexican
government.
Non-Mexican Holders of Our Securities Have Limited Voting Rights
In accordance with the bylaws and trust governing the CPOs of the Company, non-Mexican holders of CPOs or GDSs are not entitled to vote the
Series “A” Shares, Series “B” Shares and Series “D” Shares underlying their securities. The Series “L” Shares underlying CPOs or GDSs, the only series of
our Shares that can be voted by non-Mexican holders of CPOs or GDSs, have limited voting rights. These limited voting rights include the right to elect
two directors and limited rights to vote on extraordinary corporate actions, including the delisting of the Series “L” Shares and other actions which are
adverse to the holders of the Series “L” Shares. For a brief description of the circumstances under which holders of Series “L” Shares are entitled to vote,
see “Additional Information—Bylaws—Voting Rights and Stockholders’ Meetings”.
Our Antitakeover Protections May Deter Potential Acquirers and May Depress Our Stock Price
Certain provisions of our bylaws could make it substantially more difficult for a third party to acquire control of us. These provisions in our bylaws
may discourage certain types of transactions involving the acquisition of our securities. These provisions may also limit our stockholders’ ability to approve
transactions that may be in their best interests and discourage transactions in which our stockholders might otherwise receive a premium for their Shares
over the then current market price and could possibly adversely affect the trading volume in our equity securities. As a result, these provisions may
adversely affect the market price of our securities. Holders of our securities who acquire Shares in violation of these provisions will not be able to vote, or
receive dividends, distributions or other rights in respect of these securities and would be obligated to pay us a penalty. For a description of these
provisions, see “Additional Information—Bylaws—Antitakeover Protections”.
GDS Holders May Face Disadvantages When Attempting to Exercise Voting Rights as Compared to Other Holders of Our Securities
In situations where we request that The Bank of New York Mellon, the depositary for the securities underlying the GDSs, ask GDS holders for voting
instructions, the holders may instruct the depositary to exercise their voting rights, if any, pertaining to the deposited securities. The depositary will attempt,
to the extent practical, to arrange to deliver voting materials to these holders. We cannot assure holders of GDSs that they will receive the voting materials
in time to ensure that they can instruct the depositary how to vote the deposited securities underlying their GDSs, or that the depositary will be able to
forward those instructions and the appropriate proxy request to the CPO Trustee in a timely manner. For stockholders’ meetings, if the depositary does not
receive voting instructions from holders of GDSs or does not forward such instructions and appropriate proxy request in a timely manner, if requested in
writing from us, it will provide a proxy to a representative designated by us to exercise these voting rights. If no such written request is made by us, the
depositary will not represent or vote, attempt to represent or vote any right that attaches to, or instruct the CPO Trustee to represent or vote, the shares
underlying the CPOs in the relevant meeting (the “Underlying Shares”) and, as a result, the Underlying Shares will be voted in the manner described under
“Additional Information—Bylaws—Voting Rights and Stockholders’ Meetings—Holders of CPOs”. For CPO Holders’ meetings, if the depositary does not
timely receive instructions from a Mexican or non-Mexican holder of GDSs as to the exercise of voting rights relating to the underlying CPOs in the
relevant CPO holders’ meeting, the depositary and the custodian will take such actions as are necessary to cause such CPOs to be counted for purposes of
satisfying applicable quorum requirements and, unless we in our sole discretion have given prior written notice to the depositary and the custodian to the
contrary, vote them in the same manner as the majority of the CPOs are voted at the relevant CPOs holders’ meeting.
This means that holders of GDSs may not be able to exercise their right to vote and there may be nothing they can do if the deposited securities
underlying their GDSs are not voted as they request.
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The Interests of Our GDS Holders Will Be Diluted if We Issue New Shares and These Holders Are Unable to Exercise Preemptive Rights for Cash
Under Mexican law and our bylaws, our stockholders have preemptive rights with respect to capital increases. This means that in the event that we
issue new Shares for cash, our stockholders will have a right to subscribe and pay the number of Shares of the same series necessary to maintain their
existing ownership percentage in that series. U.S. holders of our GDSs cannot exercise their preemptive rights unless we register any newly issued Shares
under the U.S. Securities Act of 1933, as amended, or the Securities Act, or qualify for an exemption from registration. If U.S. holders of GDSs cannot
exercise their preemptive rights, the interests of these holders will be diluted in the event that we issue new Shares for cash. We intend to evaluate at the
time of any offering of preemptive rights the costs and potential liabilities associated with registering any additional Shares. We cannot assure that we will
register under the Securities Act any new Shares that we issue for cash. In addition, although the Deposit Agreement provides that the depositary may, after
consultation with us, sell preemptive rights in Mexico or elsewhere outside the United States and distribute the proceeds to holders of GDSs, under current
Mexican law these sales are not possible. See “Directors, Senior Management and Employees-Stock Purchase Plan and Long—Term Retention Plan” and
“Additional Information—Bylaws—Preemptive Rights”.
The Protections Afforded to Minority Stockholders in Mexico Are Different from Those in the U.S.
Under Mexican law, the protections afforded to minority stockholders are different from those in the U.S. In particular, the law concerning fiduciary
duties of directors is not well developed, there is no procedure for class actions or stockholder derivative actions and there are different procedural
requirements for bringing stockholder lawsuits. As a result, in practice, it may be more difficult for our minority stockholders to enforce their rights against
us or our directors or major stockholders than it would be for stockholders of a U.S. company.
The Ley del Mercado de Valores, or the Mexican Securities Market Law, provides additional protection to minority stockholders, such as (i) providing
stockholders of a public company representing 5% or more of the capital stock of the public company, an action for liability against the members and
secretary of the Board and relevant management of the public company, and (ii) establishing additional responsibilities on the audit committee in all issues
that have or may have an effect on minority stockholders and their interests in an issuer or its operations.
It May Be Difficult to Enforce Civil Liabilities Against Us or Our Directors, Executive Officers and Controlling Persons
We are organized under the laws of Mexico. Substantially all of our directors, executive officers and controlling persons reside outside the U.S., all or a
significant portion of the assets of our directors, executive officers and controlling persons, and substantially all of our assets, are located outside of the
U.S., and some of the parties named in this annual report also reside outside of the U.S. As a result, it may be difficult for you to effect service of process
within the United States upon these persons or to enforce against them or us in U.S. courts judgments predicated upon the civil liability provisions of the
federal securities laws of the U.S. We have been advised by our Mexican counsel, Mijares, Angoitia, Cortés y Fuentes, S.C., that there is doubt as to the
enforceability, in original actions in Mexican courts, of liabilities predicated solely on U.S. federal securities laws and as to the enforceability in Mexican
courts of judgments of U.S. courts obtained in actions predicated upon the civil liability provisions of U.S. federal securities laws.
Item 4. Information on the Company
History and Development of the Company
Grupo Televisa, S.A.B. was originally incorporated as a sociedad anónima, or limited liability corporation under the laws of Mexico in accordance
with the Ley General de Sociedades Mercantiles, or Mexican Companies Law, and later adopted the form of sociedad anónima bursátil, or limited liability
stock corporation in accordance with the Ley del Mercado de Valores, or the Mexican Securities Market Law. It was incorporated under Public Deed
Number 30,200, dated December 19, 1990, granted before Notary Public Number 73 of Mexico City, and registered with the Public Registry of Commerce
in Mexico City on Commercial Page (folio mercantil) Number 142,164. Pursuant to the terms of our estatutos sociales, or bylaws, our corporate existence
continues through 2106. Our principal executive offices are located in Mexico City at Avenida Vasco de Quiroga, No. 2000, Colonia Santa Fe, 01210
Mexico City, México. Our telephone number at that address is (52) (55) 5261-2000.
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Capital Expenditures
The table below sets forth our expected capital expenditures for the year ended December 31, 2025 and our actual capital expenditures, investments in
joint ventures and associates, and acquisitions for the years ended December 31, 2024, 2023 and 2022.
Year Ended December 31,(1)(2)
2025
2024
2023
2022
(Expected)
(Actual)
(Actual)
(Actual)
(Millions of U.S. Dollars)
Capital expenditures
U.S.$
665.0
U.S.$
493.0
U.S.$
828.5
U.S.$
859.8
GTAC(3)
3.4
7.0
8.8
8.4
Total capital expenditures and investments
U.S.$
668.4
U.S.$
500.0
U.S.$
837.3
U.S.$
868.2
(1)
Amounts in respect of some of the capital expenditures, investments and acquisitions we made in 2024, 2023 and 2022 were paid for in Pesos. These
Peso amounts were translated into U.S. Dollars at the Interbank Rate in effect on the dates on which a given capital expenditure, investment or
acquisition was made. See “Key Information—Selected Financial Data”.
(2)
See “Operating and Financial Review and Prospects—Results of Operations—Liquidity, Foreign Exchange and Capital Resources—Capital
Expenditures, Acquisitions and Investments, Distributions and Other Sources of Liquidity”.
(3)
See “—Business Overview—Our Operations—Cable”, and “—Business Overview—Investments” for a discussion of GTAC.
In 2024, 2023 and 2022, we relied on a combination of operating revenues, borrowings and net proceeds from dispositions to fund our capital
expenditures, acquisitions and investments. We expect to fund our capital expenditures in 2025 and potential capital expenditures, investments and/or
acquisitions going forward, which could be substantial in size, through a combination of cash from operations, cash on hand, equity securities, and/or the
incurrence of debt, or a combination thereof.
For a more detailed description of our capital expenditures, investments and acquisitions in prior years, see “Operating and Financial Review and
Prospects—Results of Operations—Liquidity, Foreign Exchange and Capital Resources—Liquidity” and “Operating and Financial Review and Prospects
—Results of Operations—Liquidity, Foreign Exchange and Capital Resources—Capital Expenditures, Acquisitions and Investments, Distributions and
Other Sources of Liquidity”.
Business Overview
The Company is a major telecommunications corporation which owns and operates one of the most significant cable companies as well as a leading
DTH satellite pay television system in Mexico.
The Company’s Cable business offers integrated services, including video, high-speed data and voice to residential and business customers as well as
managed services to domestic and international carriers.
The Company owns Sky, a leading DTH satellite pay television system in Mexico.
The Company holds a number of concessions by the Mexican government that authorizes it to broadcast programming over television stations for the
signals of TelevisaUnivision, and the Company’s Cable and DTH systems.
In addition, the Company is the largest shareholder of TelevisaUnivision, a leading media company producing, creating, and distributing Spanish-
speaking content through several broadcast channels in Mexico, the United States and over 50 countries through television networks, cable operators, audio
platforms and streaming services.
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Business Strategy
We operate a Cable business and Sky, a DTH platform. We intend to continue strengthening our position in these businesses and growing by
continuing to make additional investments, which could be substantial in size, while maintaining our focus on profitability and financial discipline.
We are the largest shareholder of TelevisaUnivision, a leading media company producing, creating and distributing Spanish speaking content through
several broadcast channels in Mexico, the United States and over 50 countries through TV networks, cable operators, audio platforms and streaming
services. We intend to continue exploring potential ventures and business opportunities with TelevisaUnivision.
In addition, we intend to continue to analyze opportunities to expand our business by investing in new technologies, developing new business
initiatives and/or through business acquisitions and investments. We also continue to evaluate strategic alternatives for our non-core assets.
Continue Building Our Cable and DTH Platforms
Cable. We are a shareholder of several Mexican cable companies, which under the “izzi” trademark offer cable television, high speed internet and IP
telephony services throughout Mexico, as well as other services such as mobile telephony, voice services, value added services and virtual networks.
●
We own a 51.5% controlling stake in Cablevisión, which operates in Mexico City and its metropolitan area;
●
We own 100% of TVI, Cablemás and Cablecom, which operate in several states of Mexico.
With a consolidated 6.142 million subscriber base and 19.9 million homes passed as of December 31, 2024, these companies are important service
providers in Mexico. “Homes passed” refers to any residential homes or businesses that are connected to telecommunications systems, those prepared to be
connected to telecommunications systems but are not currently connected or require some type of investment in order to be connected. For instance, each
apartment located in a building that is prepared to be connected to telecommunications systems represents one home passed. It is generally understood that
a home or business counts as a home passed when it can be connected to a telecommunications network without additional extensions to the main
transmission lines. Our cable strategy aims to increase our subscriber base, average monthly revenues per subscriber and penetration rate by:
●
continuing to offer high quality content;
●
continuing to upgrade our existing cable network into a broadband or fiber-optic bidirectional network;
●
aiming to provide digital services in order to stimulate new subscriptions, substantially reduce piracy and offer new value-added services;
●
increasing the penetration of our high speed internet access and other multimedia services as well as providing a platform to offer internet
protocol, or IP, and telephony services;
●
continuing the roll out of advanced digital set-top boxes which allow the transmission of high definition programming and recording capability,
including OTT services;
●
continuing to grow our mobile product, bundling it with our other services; and
●
continuing to leverage our strengths and capabilities to develop new business opportunities and expand through additional investments and/or
acquisitions, which can be substantial in size.
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Our Cable business has introduced several new services in recent years, such as interactive television and other enhanced programming services,
including high-speed internet access via cable modem and fiber optics to the home, as well as IP telephony. We currently market a unified offering for
residential customers under the izzi brand, available since November 2014. izzi offers telecommunications service packages that include unlimited
telephone service, high-speed data access, and pay-TV programming for residential customers and micro and small businesses. In June 2016, we launched
“izzi TV,” a new entertainment platform that, among other services, offers customers live channels, SVOD (Subscription Video on Demand), and access to
all of the company’s content. Recently, these packages include access to Max, Netflix, Vix Premium, Disney+, Paramount, among others. izzi TV is
available through the “izzi TV” set-top box and “izzi Go,” a TV Everywhere app for authenticated subscribers that allows users to access on-demand TV
channels, movies, and series, compatible with PCs and iOS and Android platforms. izzi Go also features remote control capabilities compatible with our
izzi TV set-top boxes. For an additional cost, subscribers can choose from several “izzi TV” service add-ons, such as TVOD (Transactional Video on
Demand), Max, Disney+, and Star+, among others. In addition to the izzi brand, our Cable business also offer telecommunications services under the Wizz
and Wizzplus brands in some municipalities. In July 2018, our Cable business launched “Afizzionados,” our first own sports channel dedicated to soccer,
broadcasting curated sports content and exclusive matches which was discontinued from the programming Schedule on April 30, 2024. In November 2018,
we launched “izzi flex” (home wireless internet) and “izzi pocket” (mobile internet), offering speeds from 5 Mbps to 20 Mbps. In 2018 and 2019, we
renewed our Triple Play product with voice, broadband, and video benefits. In June 2020, we launched our mobile virtual network operator (MVNO)
service, “izzi mobile,” which offers mobile service to broadband subscribers, offering calls, SMS, and gigabytes at a competitive price through a reseller
agreement with Altán Redes, S.A.P.I. de C.V. (“Altán Redes”). We also offer mobile services through “Bestel mobile,” which offers calls, SMS, and
gigabytes depending on the coverage area for business, corporate, and government customers through a reseller agreement with Altán Redes and
Radiomóvil Dipsa, S.A. de C.V. Recently, we also launched our new “izziTV-smart” set-top box, which has allowed us to become one of the largest OTT
aggregators in Mexico. This allows us to include access to the market’s leading OTT platforms in our offering and the ability to bundle our pay-TV service
with Netflix, Disney+ and Max, among others. In July 2022, our Cable business was the first to launch ViX+ as a new SVOD streaming service. In
September 2022, we revamped our offering to simplify product selection based on our customers’ needs through a modular concept. In 2023, we increased
internet speeds for new customers by 25%, and in September 2023, we began offering ViX Premium as a fixed package at no additional cost, for both new
and existing users with speeds of 50 Mbps or higher. In November 2023, we added new sports content, such as NBA League Pass and Fox Sports Premium,
to our cable TV offering. In August 2024, we increased internet speeds by 25% for new and existing users. In November 2024, we included Max as a
bundle in our internet offering with VIX+, with speeds of 80 Mbps or higher. Also in November 2024, we launched Izzitv+ as a single-player video
offering that only requires a Wi-Fi connection. This offer includes Skysports, which offers exclusive access to La Liga, the Bundesliga, and the UEFA
Nations League, as well as many other sports such as the Diamond League.
As of December 31, 2024, our Cable business had 3.8 million video RGUs cable television users, or video RGUs (cable television users), 5.6 million
broadband RGUs and 5.4 million telephone lines in service, or voice RGUs (telephone lines in service). In addition, we currently have 334 thousand mobile
lines service subscriber RGUs. The growth in our subscriber base has been driven primarily by the upgrade of our networks and the launch of competitive
broadband offerings.
DTH. We believe that Ku-band DTH satellite services offer an enhanced opportunity for expansion of pay television services into households seeking
to upgrade reception of broadcasting signals and in areas not currently serviced by operators of cable or multi-channel, multi-point distribution services.
Innova is a DTH company with services in Mexico, Central America and the Dominican Republic with approximately 4.7 million video subscribers, of
which 4.7% were commercial subscribers, as of December 31, 2024. We own a 100% interest in Innova, or Sky. On April 3, 2024, we announced that we
had reached an agreement with AT&T to acquire its interest in Sky and become the owner of 100% of Sky’s capital stock. On June 7, 2024, the IFT
approved the acquisition and the transaction closed. The transaction price will be paid by us in 2027 and 2028. Following this acquisition, we began
integrating Sky with our Cable segment.
The key components of our DTH strategy include:
●
offering high quality content, exclusive broadcasts of sporting events, such as La Liga and La Copa del Rey (Spanish Soccer), The Bundesliga
(German Soccer), the NFL Sunday Ticket, MLB Extra Innings, the NHL, marathons, ice skating events, Davis Cup, Diamond League, the World
Padel Tour, UEFA EURO, UEFA Nations League and qualifying matches of the CONMEBOL for the World Cup, as well as special coverage of
female soccer leagues from Germany, Spain, Sweden and the U.K.;
●
capitalizing on the low penetration of pay-TV services in Mexico and in areas not currently serviced by cable operators;
●
providing superior digital Ku-band DTH satellite services and emphasizing customer service quality; and
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●
providing aggressive HD offerings and continuously expanding our programming in HD.
Developing New Businesses and Expanding through Acquisitions or Other Transactions
We plan to continue leveraging our strengths and capabilities to develop new businesses and analyzing opportunities to expand through acquisitions or
other transactions. We are constantly assessing potential opportunities that complement our business strategy. We may identify and evaluate opportunities
for strategic acquisitions of complementary businesses, technologies or companies. We may also consider joint ventures, minority investments and other
collaborative projects and investments. Any such transaction could be funded using cash on hand, our equity securities and/or the incurrence of debt, or a
combination thereof.
For a further discussion of some of our recent investments, see “— Investments”.
We also continue to evaluate strategic alternatives for our non-core assets.
Expanding Our Business in the Mexican Telecommunications Markets by Taking Advantage of the Telecom Reform and Implementing Legislation
Pursuant to the Telecom Reform (see “—Regulation—Telecom Reform and Broadcasting Regulations”), a “preponderant economic agent” (agente
económico preponderante) in the telecommunications sector means an economic agent that has, directly or indirectly, more than 50% of the national market
share in telecommunications services, calculated based on the number of users, subscribers, network traffic or used capacity according to the data available
to IFT. We are aware from the public records that, on March 7, 2014, IFT notified América Móvil, S.A.B. de C.V., or América Móvil, of a resolution which
determined that América Móvil and its operating subsidiaries Radiomóvil Dipsa, S.A de C.V., or Telcel, and Teléfonos de México, S.A.B. de C.V., or Telmex,
Teléfonos del Noreste, S.A. de C.V., or Telnor, as well as Grupo Carso, S.A.B. de C.V. and Grupo Financiero Inbursa, S.A.B. de C.V., are a preponderant
economic agent in the telecommunications sector and imposed on them certain specific asymmetrical regulations which América Móvil reported publicly in
the following areas:
●
Interconnection: Regulation on interconnection, including the imposition of (a) asymmetric rates to be determined by IFT and (b) the
implementation of an interconnection framework agreement (convenio marco de interconexión);
●
Sharing of Infrastructure: Regulation on the access and use of passive infrastructure, including towers, sites, and ducts, at rates to be negotiated
amongst the operators and, where agreement cannot be reached, to be determined by IFT using a methodology of long average incremental costs;
●
Local Loop Unbundling: Regulation on local loop unbundling, including the imposition of rates to be determined by IFT using a methodology of
long average incremental costs;
●
Resale: Resale of wholesale voice, broadband internet and dual-play packages that replicate packages provided by the preponderant economic
agent in the telecommunications sector, at retail level, at rates to be negotiated among the operators and, where an agreement cannot be reached,
to be determined by IFT using a methodology of retails minus;
●
Indirect Access to the Local Loop: Regulation on the wholesale bitstream access to the access network of the preponderant economic agent in the
telecommunications sector at rates to be negotiated among the operators and, where an agreement cannot be reached, to be determined by IFT
using a methodology of retail minus;
●
Wholesale Leased Lines: Regulation on wholesale leased lines for interconnection, local and domestic and international long distance, at rates to
be negotiated among the operators and, where agreement cannot be reached, to be determined by IFT using a methodology of retail minus, except
for leased lines for interconnection services where the methodology to be used for determining the applicable rates will be of long average
incremental costs;
●
Roaming: Regulation on the provision of wholesale roaming services, at rates to be negotiated amongst the operators and, where agreement
cannot be reached, to be determined by IFT using a methodology of long average incremental costs;
●
Elimination of National Roaming Charges: IFT has imposed the elimination of national roaming charges to the subscribers of the preponderant
economic agent in the telecommunications sector;
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●
Mobile Virtual Network Operators: Regulation on wholesale access to mobile virtual network operators to services provided by the preponderant
economic agent in the telecommunications sector to its subscribers, at rates to be negotiated among the operators and, where agreement cannot be
reached, to be determined by IFT using a methodology of retail minus (for the reseller business model);
●
Certain Obligations on the Provision of Services: Certain rates for the provision of telecommunications services to the subscribers of the
preponderant economic agent in the telecommunications sector shall be subject to rate control and/or authorization by IFT, by using a series of
methodologies related to maximum prices and replicability. Also, a series of obligations relating to the sale of services and products, including the
obligation to offer individually all services that are offered under a bundle scheme; limited exclusivity on handsets and tablets; and the obligation
of eliminating the sim-lock on handsets;
●
Content: IFT has issued the Relevant Content Ruling applicable for preponderant economic agent in the telecommunications sector, which
contains a prohibition to acquire transmission rights for any territory within Mexico on an exclusive basis, relating to relevant content (contenidos
audiovisuales relevantes), including without limitation national soccer play-offs (liguilla), FIFA world cup soccer finals and, any other event
where high-audiences are expected at a national or regional level. The IFT may update the relevant content list every two years; and
●
Information and Quality of Service Obligations: Several obligations related to information and quality of service, including the publication of a
series of reference terms (ofertas públicas de referencia) of the wholesale and interconnection services subject of the asymmetric regulation
imposed by IFT and accounting separation.
On March 8, 2017, IFT issued a resolution to the preponderant economic agent in the telecommunications sector that modifies the asymmetrical
regulations described above. The most relevant modifications are the following:
●
Wholesale Leased Lines: the methodology to be used by IFT in case an agreement cannot be reached in wholesale leased lines for
interconnection, local and domestic and international long distance, is limited to long average incremental costs;
●
Functional separation: the preponderant economic agent in the telecommunications sector will have to functionally separate the provision of
wholesale services through the creation of a new legal entity and a wholesale division; which entity will solely and exclusively provide wholesale
services related to access network elements, dedicated links and passive infrastructure, among other wholesale services;
The wholesale division within the existing companies will provide the other wholesale services subject to the aforementioned measures that are not
provided by the newly created legal entity:
●
Equivalence of Supplies and Inputs, Technical and Economic Replicability: The preponderant economic agent in the telecommunications sector
must guarantee the equivalence of inputs, the technical replicability of the services that it commercializes to its end users, and equal access to
technical and commercial information;
●
Fiber disaggregation Regulation on unbundling of P2P (point-to-point), fiber was added to the local loop unbundling regulation. Unbundling of
passive optical networks (PON), is not considered under this service and remains accessible through the Indirect Access to the Local Loop
service; and
●
The preponderant economic agent in the telecommunications sector must also guarantee the economic replicability of the services that it
commercializes to its end users for which it will validate the economic replicability of the services “ex-post” based on the methodology, terms and
conditions that the IFT determines.
According to public records, América Móvil and its operating subsidiaries, Telcel, Inbursa, Telmex and Telnor, filed amparo proceedings against IFT’s
original resolution. The courts issued a ruling confirming the constitutionality of IFT’s resolution, with the exception of Telcel’s proceeding. On March 3,
2021, the Supreme Court confirmed that Telcel is also a preponderant economic agent in the telecommunications sector.
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In March 2018, América Móvil received a resolution from IFT determining the terms under which Telmex and Telnor shall, legally and functionally,
separate the provision of wholesale regulated fixed services by incorporating new legal entities with their own corporate governance, independent from
those of América Móvil’s subsidiaries holding a concession, and by creating a wholesale business unit within Telmex and Telnor. Telmex and Telnor had
two years to implement the separation ordered by the IFT. The resolution established a calendar for implementation and obligations to deliver periodic
information to the IFT. In March 2020, the two-year period granted to the preponderant economic agent in the telecommunications sector to implement the
functional separation of Telmex and Telnor ended.
In March 2020, America Móvil created two companies; Red Nacional Última Milla, S.A.P.I. de C.V. and Red Última Milla del Noroeste, S.A.P.I. de
C.V., for the provision of wholesale regulated fixed services, in compliance with the functional separation requirements, and a Wholesale Division inside
Telmex and Telnor.
On December 2, 2020, IFT issued a resolution on its evaluation of the asymmetrical regulations imposed on Telmex, as preponderant economic agent
in the telecommunications sector in March 2014. Some of the most relevant modifications are: (i) the use of a long-run average incremental costs model to
determine the local loop indirect access services rates, and that IFT may determine competitive geographic zones where such rates will be determined by
the preponderant economic agent in the telecommunications sector; (ii) for dedicated-link leasing services, the IFT may determine competitive geographic
zones where rates will be determined pursuant to a price cap methodology; and for the rest of the country, rates will be determined by IFT by using a
methodology of long average incremental costs; and (iii) certain operative and informational modifications to the electronic management system.
According to public records, América Móvil challenged the resolution.
On August 4, 2021, IFT determined 52 competitive geographic zones in the country where rates for local loop indirect access services will be
established by the preponderant economic agent in the telecommunications sector. On December 9, 2022, the IFT added 22 new competitive geographic
zones.
On December 6, 2023, the IFT extended tariff freedom for the indirect access to the loop service to 90 municipalities, and on December 6, 2024, it
extended tariff freedom for the indirect access to the loop service to 105 municipalities.
On October 30, 2024, the Plenary of the IFT issued the third biennial review of the preponderance measures, through which the plenary suppresses,
modifies, and adds the measures imposed to the preponderant economic agent Some of the measures that stand out refer to the implementation of changes
in the Electronic Management System, that the IFT has access to the information for consultation and/or download, the unblocking of terminal equipment,
the prohibition of conditionalities, the elimination of forced deadlines, the elimination of user recovery strategies for portability, economic replicability,
modifications to wholesale services for visiting users, transparency in public contracting and measures regarding distribution channels. The measures
imposed on the preponderant economic agent in the telecommunications sector, if properly implemented, will represent an opportunity for us to increase
our coverage and product diversity, while reducing our costs and capital expenditures requirements as a result of the access to the network of the
preponderant economic agent in the telecommunications sector and the regulation of the terms and conditions, on competitive terms, of such access.
Moreover, asymmetric regulations may create a beneficial economic and regulatory environment in the telephony and broadband markets and may further
enhance our ability to compete in the telecommunications industry.
The measures imposed on the preponderant economic agent in the telecommunications sector, if properly implemented, will represent an opportunity
for us to increase our coverage and product diversity, while reducing our costs and capital expenditures requirements as a result of the access to the network
of the preponderant economic agent in the telecommunications sector and the regulation of the terms and conditions, on competitive terms, of such access.
Moreover, asymmetric regulations may create a beneficial economic and regulatory environment in the telephony and broadband markets and may further
enhance our ability to compete in the telecommunications industry.
All of these measures, if properly implemented, could create a beneficial economic and regulatory environment, level the playing field for all
participants in the telecommunications market and foster competition, representing an opportunity for the growth of our Sky and Cable businesses;
nevertheless, in the Company’s view, the preponderant economic agent in the telecommunications sector is not complying with its obligations under such
measures and the Company has filed several complaints before IFT. As a result of the complaints, IFT has initiated investigations that are ongoing.
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In August 2017, the Supreme Court of Justice of the Nation (“SCJN”) determined that the interconnection rate regime relating to mobile termination by
the preponderant economic agent in the telecommunications sector, which contained a limitation on the preponderant economic agent’s ability to charge for
traffic termination in its mobile network, was unconstitutional. As a result, the SCJN ordered that IFT issue a tariff. In November 2017, IFT resolved that
the tariff for traffic termination in the mobile network of the preponderant economic agent in the telecommunications sector would be Ps.0.028562 per
minute of interconnection from January 1, 2018 to December 31, 2018. In November 2018, IFT determined that the tariff for traffic termination in the
mobile network of the preponderant economic agent in the telecommunications sector would be Ps.0.028313 per minute of interconnection from January 1,
2019 to December 31, 2019. In November 2019, IFT determined that the tariff for traffic termination in the mobile network of the preponderant economic
agent in the telecommunications sector would be Ps.0.025771 per minute of interconnection from January 1, 2020 to December 31, 2020. In November
2020, IFT determined that the tariff for traffic termination in the mobile network of the preponderant economic agent in the telecommunications sector
would be Ps. 0.018489 minute of interconnection from January 1, 2021 to December 31, 2021. For 2022, IFT determined a lower tariff for traffic
termination in the mobile network of the preponderant economic agent in the telecommunications sector of Ps.0.017118 per minute of interconnection. For
2023, IFT determined a lower tariff for traffic termination in the mobile network of the preponderant economic agent of Ps.0.014294 per minute of
interconnection. For 2024, IFT determined a lower tariff for traffic termination in the mobile network of the preponderant economic agent in the
telecommunications sector of Ps.0.013900 per minute of interconnection. For 2025, IFT determined a lower tariff for traffic termination in the mobile
network of the preponderant economic agent in the telecommunications sector of Ps.0.012255 per minute of interconnection.
In April 2018, the SCJN determined that the interconnection rate regime relating to fixed termination by the preponderant economic agent in the
telecommunications sector, which contained a limitation on the preponderant economic agent’s ability to charge for traffic termination in its fixed network,
was unconstitutional. As a result, the SCJN ordered IFT to issue a tariff for traffic termination in the fixed network of the preponderant economic agent in
the telecommunications sector, applicable from January 1 to December 31, 2019. In November 2018, IFT determined that the tariff for traffic termination in
the fixed network of the preponderant economic agent in the telecommunications sector would be Ps.0.003151 per minute of interconnection from January
1, 2019 to December 31, 2019. In November 2019, IFT determined that the tariff for traffic termination in the fixed network of the preponderant economic
agent in the telecommunications sector would be Ps.0.003331 per minute of interconnection from January 1, 2020 to December 31, 2020. In November
2020, IFT determined that the tariff for traffic termination in the fixed network of the preponderant economic agent would be Ps.0.002842 per minute of
interconnection from January 1, 2021 to December 31, 2021. For 2022, the tariff for traffic termination in the fixed network of the preponderant economic
agent in the telecommunications sector would be Ps.0.002862 per minute of interconnection. For 2023, IFT determined the tariff for traffic termination in
the fixed network of the preponderant economic agent should be Ps.0.002885 per minute of interconnection. For 2024, the tariff for traffic termination in
the fixed network of the preponderant economic agent in the telecommunications sector would be Ps.0.002823 per minute of interconnection. For 2025, the
tariff for traffic termination in the fixed network of the preponderant economic agent in the telecommunications sector would be Ps.0.002858 per minute of
interconnection.
In January 2020, IFT imposed a fine on Telnor in the amount of Ps.1,311.8 million for a breach of the availability of information of certain passive
infrastructure (post, duct) in the electronic management system (Sistema Electrónico de Gestión, or “SEG”), used to request wholesale services from
Telnor.
Additionally, the Telecom Reform (i) permits 100% foreign ownership in satellite and telecommunications services and increases to up to 49% the
level of permitted foreign ownership in television and radio services, subject to reciprocity of the originating foreign investment country, and (ii) provides
that the Mexican government will build a national network to facilitate effective access for the Mexican population to broadband and other
telecommunications services. These amendments may provide opportunities for us to enter into joint ventures with foreign investors with proven
international experience in these markets and also to work with the Mexican government in the development of this new network.
On November 29, 2024, the “Decree amending, adding and repealing several provisions of the Organic Law of the Federal Public Administration”
(Decree amending, adding and repealing several provisions of the Organic Law of the Federal Public Administration) entered into force, which provides for
the creation of the Agencia de Transformación Digital y Telecomunicaciones (the “ATDT”), the new telecommunications regulator. On December 20, 2024,
the Constitutional Amendment entered into force, which ordered the extinction of the Instituto Federal de Telecomunicaciones.
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As of the date of presentation of this Report, the issuance of regulations by the Federal Executive, the ATDT, or the Agency in charge of regulating the
various telecommunications, broadcasting, and economic competition issues is still pending; therefore, the Company is evaluating said
Telecommunications Reform as well as the actions implemented by the Federal Executive, the ATDT or any agency or agencies, including the guidelines
and resolutions issued by the ATDT to determine the actions, resources or legal measures that it could exercise, take or implement concerning or against
them, the secondary regulation issued by the Federal Executive or the ATDT. The Telecommunications Reform, secondary regulation, and other rules may
be issued by the Federal Executive or the ATDT.
Commitment to Sustainability
At Grupo Televisa, we are aware of the short- and long-term value a sustainability strategy creates for our stakeholders through our services. We
believe that adopting sustainable business practices is critical to generate long-term value for our customers, employees, investors, and the communities we
serve.
Our purpose brings the mission and vision of our business to life: BRINGING PEOPLE CLOSER TO WHAT MATTERS MOST TO THEM. Our
focus on environmental, social and governance (“ESG”) issues is an integral part of our purpose and business strategy. Year after year, we become more
firmly committed to connecting lives through innovation and investment in resilient telecommunications networks that empower society.
We provide products and services that are basic to our society. We are present in our customers’ daily life, from education to business connectivity to
entertainment, through our wide range of communication infrastructure and products. Our ESG strategy is integrated into the core of our business and
contributes to our goals through four strategic pillars:
●
Resilient climate connections
●
Digital inclusion
●
Empowering people
●
Leading by example
The progress we have made toward sustainability has been fueled by an ongoing process of policy and program review, focused on improving our
corporate management and aligned with international best practices, including the United Nations Sustainable Development Goals (“SDGs”). We identify
the most relevant risks and opportunities in ESG areas and then decide on specific initiatives to address them. Our five priority SDGs, which range from
climate action, education, gender equality, decent work, and peace and justice, reflect the opportunities for our business to create shared value and
contribute to collective well-being.
Our transparency and reporting strategy aligns with international frameworks and standards. We publish a sustainability report (the “Sustainability
Report”) aligned with the recommendations of the Global Reporting Initiative, an internationally recognized framework for sustainability reporting that
helps organizations disclose their economic, environmental, and social impacts, as well as with the industry standards of the Sustainability Accounting
Standards Board and the recommendations of the Task Force on Climate-related Financial Disclosures (“TCFD”). Grupo Televisa also supports the Ten
Principles of the United Nations Global Compact. The information included in the Sustainability Report is not, and should not be considered, a part of this
report.
Environmental and Climate
Our climate action strategy focuses on reducing emissions in our value chain, strengthening the resilience of our network, and promoting a low-
emission economy. To achieve this, we are committed to investing in climate-resilient networks, introducing efficiency initiatives to reduce our energy
consumption, and incorporating renewable electricity to decarbonize our operations. We work hand-in-hand with our suppliers to promote reuse, recycling,
and emission reduction practices, encourage our staff to take pro-environmental actions in their daily lives, and create partnerships to accelerate the
transition to a sustainable economy.
At Grupo Televisa, we follow a carbon mitigation hierarchy to avoid, reduce, and minimize our greenhouse gas emissions. Since 2019, we have
adopted the recommendations of the TCFD and strengthened our climate governance and risk management strategy. In 2023, we deepened our
understanding of these risks and opportunities, and we will continue integrating TCFD recommendations into our business practices. Additionally, we
promote a circular business model in our value chain, encouraging the reuse and recycling of electronic devices to extend their lifespan, generating a
circular economy around electronic waste and thus reducing the environmental impact of our operations.
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Social
Our mission at Grupo Televisa is to merge groundbreaking technology with the best of human creativity. We are committed to delivering timely, useful,
and meaningful digital experiences that enrich people and the world around them. We build the necessary infrastructure for society to connect and stay
tuned with the world. We understand that connections are fundamental to giving meaning to life, and we strive to meet society’s connection needs by
investing in the infrastructure required to facilitate that global connection.
Digital inclusion has been a deeply rooted priority for us for decades and is a fundamental pillar of our business and sustainability strategy. Throughout
the years, we have focused our efforts on providing access to digital technology, developing digital skills, ensuring school connectivity, promoting digital
inclusion for women and girls, as well as facilitating digital access for vulnerable users and groups. In 2023, we successfully connected millions of people
through our products and services. We are firmly committed to reducing the digital divide by providing affordable internet access and a wide range of
entertainment products and services.
We are committed to empowering people in two key ways. Internally, we aim to offer job security, attractive benefit schemes, ongoing training, and
programs to encourage talent promotion within Grupo Televisa. Externally, through Fundación Televisa, we drive innovative programs in education,
culture, entrepreneurship, and environmental protection, using advanced digital tools and providing financial support. We strive to promote an environment
where each individual is recognized, appreciated, and respected for their uniqueness, thereby contributing to our goals as a company.
Governance
Grupo Televisa is committed to conducting its operations in full compliance with ethics and current legislation. Our Code of Ethics establishes the
values, principles, and standards of conduct that guide our business activities, addressing issues such as bribery and corruption prevention. All new hires
accept this code when they join Grupo Televisa and pledge to abide by its terms, and we provide them with regular training. Some executive positions are
required to renew their commitment to our Code of Ethics each year. We launched the Supplier Code of Conduct and through it we extend our commitment
to respecting Human Rights, Labor Rights, Environmental Responsibility, and others, across our supply chain. Grupo Televisa offers confidential
communication channels for employees and third parties to report violations of the Code of Ethics or other internal policies, as well as any matter that may
affect our interests, business objectives, or human capital.
The Sustainability Committee, which is comprised of senior executives from various corporate areas and business units, reviews and monitors ESG
performance, recommends best practices, and designs short- and long-term ESG strategies, considering the potential impacts of ESG-related risks.
Furthermore, we have a continuous process of strategic risk management at the corporate level, which allows us to identify, assess, treat, monitor, and
report sociopolitical, environmental, social, economic, and health risks and opportunities. Under the supervision of the Audit Committee, the Corporate
Risk Management Office reports quarterly on the results of these processes.
Commitment to Social Responsibility
In 2024, Fundación Televisa (or “Fundación”) continued to show growth on the impact of its programs and consolidated communications of the
Company to demonstrate how we can use them to help create real, enduring change with a strong commitment to helping those most in need. As a result,
Fundación was able to help transform the lives of 931,256 children, youth and adults in Mexico and the United States, investing (together with our 388
allies) more than Ps.327 million.
We continue to innovate in programs in education, culture, entrepreneurship and environmental protection to provide an empowering platform for
hundreds of thousands of people to improve their lives, transform their communities, and build better and more sustainable communities. Our approach
combines effective leveraging of the Company’s communication channels with state-of-the-art digital tools, financial support and on-the-ground
multidisciplinary teams.
Our sustainability programs and initiatives are intended to help further 13 of 17 of the United Nations Sustainable Development Goals.
In 2024 we provided more than 64.6 million digital impacts and more than 44,961 TV media impacts, reaching more than 36.5 million people on
television. At the same time, we helped third party institutions and organizations through communication campaigns with television spaces.
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We have more than 2.9 million followers on social networks (an increase of 38% as compared to 2023) and more than five million people on our
digital platforms.
Fundación programs work along different life stages. Empieza Temprano focuses on early childhood development by providing parents and families
with information and practical tips. To enhance the skills of K-12 students, Fundación has a civic values program called Valores. Cuantrix teaches computer
science and coding. Technolochicas empowers young women through STEAM (Science, Technology, Engineering, Art and Mathematics). Bécalos works to
increase high school and college completion while improving the student’s employability. POSiBLE helps to expand high-impact innovation-driven
entrepreneurship through training, networking, resources, visibility and acceleration for high-potential startups, and Gol por México combines the passion
for helping others with the passion for sports. Through this program, we have transformed soccer goals from the Mexican Soccer League into aid for the
neediest communities in México.
Fundación’s cultural and environmental programs cut across ages serving the general public through local actions, digital platforms, and media spaces.
During 2024, we continued to support the State of Guerrero after Hurricane Otis with:
●
Delivery of food packages to affected families. In collaboration with other foundations, we delivered 8,000 food packages, benefiting 45,000
vulnerable individuals with an investment of Ps $8.8 million.
●
Housing reconstruction. In collaboration with other organizations, we rebuilt and repaired 380 homes in the Guerrero communities of Coyuca de
Benítez and Medianitos Perros de Agua, benefiting 1,896 people.
●
Media classrooms for public schools. We have installed three media classrooms with computers and internet access, benefiting 1,643 students and
127 teachers in Guerrero.
Our numbers and recognitions include the following:
Cuantrix coding platform
We registered over 73,338 public-school students, 4,576 teachers and instructors, and 605 elementary schools across Mexico on our Cuantrix platform
to learn basic coding skills.
Tecnolochicas STEM initiative
We doubled the number of middle-school girls participating in Tecnolochicas STEM (Science, Technology, Engineering, and Mathematics) activities,
reaching 24,695 middle-school girls in Mexico and the United States.
Bécalos scholarships
We awarded 44,142 Bécalos scholarships, bringing the total to 594,838 throughout the program’s history. Bécalos programs focus on employability
initiatives, STEM education, English learning, international mobility programs, and excellence scholarships.
Additional scholarships supported talented youth programs, and 5,348 were designated for women pursuing STEM training.
POSiBLE entrepreneurship program
Through our POSiBLE program, 15,320 entrepreneurs received support to develop their business models. Overall in 2024, POSiBLE impacted 31,878
participants from the Convocatoria Nacional POSiBLE to online or in-person entrepreneur training camps.
Empieza Temprano early childhood initiatives
In 2024, we added 320,737 beneficiaries, reinforcing our mission to transform lives from the earliest years. Since the program began in 2016, we have
reached 703,585 individuals, including mothers, fathers, caregivers, and professionals working with the newborn to five-year old children.
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Valores - valorama.mx
This year, we launched Valorama, integrating artificial intelligence tools for 5,600 teachers who created more than 1,700 activities, 80% of which were
downloaded. By using Valorama, educators now save time creating lesson plans aligned with the official government curricula.
Gol Por México
In 2024 we celebrated our 20th anniversary. We have transformed 13,221 goals into concrete actions in the areas of health, education, housing,
women’s support, environmental initiatives, and community assistance. This year, thanks to the goals scored in Liga MX, we have positively impacted
36,841 people.
Cultural initiatives
Mexichrome: Photography and Color in Mexico, exhibited at the Palacio de Bellas Artes, which showed the transition from black and white to color
photography in Mexico, having attracted 159,000 visitors.
With FotográficaMxFundación Televisa demonstrates its commitment to cultural preservation, sharing our photography collection through the
fotografica.mx website. This site has more than 60,000 visits year after year and showcases over 140,000 digitized photographs. Additionally, at the 22nd
Morelia International Film Festival, we presented Ismael Rodríguez, un cineasta ¡A.T.M.!, reaching 70,000 visitors. We also showcased screenings of
María Candelaria and Dos tipos de cuidado.
Recognitions
●
Bécalos: This year, Bécalos received the Premio Compartir 2024 awarded by the Mexican Center for Philanthropy (CEMEFI) in the “Suma de
Voluntades” category. This recognition honors programs that mobilize time, talent, and resources to achieve social benefits.
●
Cuantrix: For the fifth consecutive year, Cuantrix was recognized for its collaboration with the Federal Educational Authority in Mexico City.
During this period, over 23,000 training sessions were conducted, benefiting more than 300,000 students.
●
POSiBLE: Fundación Televisa and Fomento Social Citibanamex earned second place in the Impacto+ Awards by the Impact Network.
Additionally, Fundación Coppel selected POSiBLE as an implementer of projects aimed at fostering youth entrepreneurship.
●
Tecnolochicas: The program was honored with the Inspiring Programs in STEM 2024 award by Insight Into Diversity magazine. This award
highlights our dedication to inspiring Latina girls and young women to pursue careers in science, technology, engineering, and mathematics.
By responsibly leveraging media, talent, partnerships and financial assets, the efforts led by Fundación reflect the commitment of the Company to
environmental and social initiatives. We intend to make a strategic contribution to building a more empowered, prosperous and democratic society where
all people have a platform to succeed.
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Our Operations
As of December 31, 2024, we classified our operations into two business segments: Cable and Sky. Following the completion of the TelevisaUnivision
Transaction on January 31, 2022, our former Content business was combined with UHI, creating TelevisaUnivision, a premier global Spanish-language
media company. As a result, subject to certain exceptions, we no longer own our former Content business, and we classified the former Content business as
a discontinued operation and since then it is no longer a business segment.
In addition, following the completion of the Spin-off during the first quarter of 2024, certain businesses that were part of our former Other Businesses
segment, including our fútbol operations, the Azteca Stadium, the gaming operations, and the publishing and distribution of magazines, as well as certain
related assets and real estate (the “Spun-off Businesses”) were spun off to a new controlling entity listed on the Mexican Stock Exchange, Ollamani, that
holds the Spun-off Businesses and which at the time of the Spin-off had the same shareholding structure as the Company. As a result, we no longer own the
Spun-off Businesses of our former Other Businesses segment, and, beginning with the first quarter of 2024, we began classifying the Spun-off Businesses
as a discontinued operation and since then the Other Businesses segment is no longer a business segment.
Cable
The Cable Television Industry in Mexico. Cable television offers multiple channels of entertainment, news and informational programs to subscribers
who pay a monthly fee. These fees are based on the package of channels the subscribers receive. According to IFT, there were approximately 4,783 pay-TV
concessions in Mexico and 3,414 integrated sole concessions for commercial use, as of the date of their report, serving approximately 16.94 million
subscribers (including cable and DTH).
Digital Cable Television Services. Our cable companies offer on-screen interactive programming guide with direct access to Vix Premium Netflix,
Disney+, Star+, Max, amongst others through the izzi TV platform, video on demand, high definition channels as well as other services throughout Mexico.
Along with their digital pay-TV service, our cable companies offer high speed internet and a competitive digital telephone service. Through their network,
they are able to distribute high quality video content, new services, interactivity with video on demand, 1080i high definition, impulse and order pay-per-
view, a-la-carte programming, among other products and services, with added value features and premium solutions for consumers, and telephony and
internet. Likewise, our cable companies offer mobile applications such as izzi go, which is a TV Everywhere application for authenticated subscribers
through compatible PCs, iOS and Android platforms, that enables subscribers to access channels, movies and series on demand. izzi go also features remote
control functionalities compatible with our izzi TV set-top-boxes, and allows subscribers to watch additional content through the application. In November
2020 and August 2021, izzi partnered with Disney+ and Star+ respectively, in order to distribute the service both a la-carte and as a bundle in select triple
play packages and with payment integration services for izzi customers. In September 2023 we began offering Vix Premium free of additional charges as a
hard bundle to both new and existing users with 50 mbps speed and above.
Revenues. Our cable companies generate revenues from their pay-TV, broadband, internet and telephony services, from additional services such as
video on demand, and from sales of advertising to local and national advertisers. Subscriber revenues come from monthly service and rental fees.
Cable Initiatives. Our cable companies plan to continue offering the following services to their subscribers:
●
Enhanced programming services, including video on demand, subscription video on demand, high definition and bundled packages;
●
Broadband internet services, including fixed/mobile solutions;
●
IP telephony services; and
●
Mobile services.
Cablevisión. We own a 51.5% controlling stake in Cablevisión, one of the most important cable television operators in Mexico, which operates in
Mexico City and its metropolitan area, where it offers cable television, high speed internet access and IP telephony services.
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TVI. In March 2016, we acquired the remaining 50% of the equity interest of TVI and its subsidiaries and as a result, TVI is a wholly owned
subsidiary of the Company. The transaction amounted to Ps.6,750 million. TVI offers cable television, internet access, telephony services as well as mobile
telephony as a mobile virtual network operator (MVNO) in 330 Mexican states and bidirectional data transmission in the metropolitan area of Monterrey
and other areas of northern Mexico.
Cablemás. Cablemás is a wholly owned subsidiary of the Company, which offers cable television, broadband internet and telephony services and
operates in 20 states of Mexico.
Cablecom. Cablecom is a wholly-owned subsidiary of the Company, which offers cable television, telephony services and operates in 18 states of
Mexico.
Bestel. Currently, the Company indirectly holds 66.4% of the equity of Bestel (35.6% through Cablevisión and 30.8% through CVQ), which provides
voice, broadband internet and managed services to domestic and international carriers and to the enterprise, corporate, and government segments, cloud and
other services in Mexico. Through Bestel (USA), Inc., Bestel provides cross-border services to U.S. carriers including internet protocol, or IP, transit,
collocation, international private lines, and voice services, as well as access to the Internet backbone via companies or carriers classified as “TIER 1” which
are networks that can reach every other network on the internet without purchasing internet protocol address or paying settlements and “TIER 2” which are
networks that peer with some networks, but purchase internet protocol address transit or pay settlements to reach at least some portion of the internet.
Bestel owns a fiber-optic network of approximately 19,000 kilometers, which is in the process of being expanded. In addition to its own network, Bestel
operates 20,000 additional kilometers of fiber-optic networks covering several cities and economic regions in Mexico and has direct crossing of its network
into Laredo, McAllen, El Paso and Dallas in Texas, Nogales in Arizona and San Diego and Los Angeles in California in the United States. This enables the
Company to provide high connectivity capacity between the United States and Mexico.
FTTH. On December 17, 2018, we acquired from Axtel its residential fiber-to-the-home business and related assets in Mexico City, Zapopan,
Monterrey, Aguascalientes, San Luis Potosi and Ciudad Juarez, through our FTTH subsidiary. The acquired assets comprised 553,226 RGUs, consisting of
97,622 video, 227,802 broadband and 227,802 voice RGUs. The total value of the transaction amounts to Ps.4,713 million. These subscribers were
integrated into each operator where coverage was available to take advantage of the fiber optic network.
Sky
Background. We operate “Sky”, our DTH satellite venture in Mexico, Central America and the Dominican Republic, through Innova. We indirectly
own 100.0% of this venture. For a description of capital contributions and loans we have made to Innova, see “Operating and Financial Review and
Prospects—Results of Operations—Liquidity, Foreign Exchange and Capital Resources—Capital Expenditures, Acquisitions and Investments,
Distributions and Other Sources of Liquidity”.
Innova’s Social Part Holders Agreement provides that we may not directly or indirectly operate or acquire an interest in any business that operates a
DTH satellite system in Mexico, Central America and the Dominican Republic (subject to limited exceptions).
As of December 31, 2022, 2023 and 2024, Innova’s DTH satellite pay-TV service had 6,257,059, 5,567,426 and 4,696,038 gross active video
subscribers, respectively. Innova primarily attributes its success to its superior programming content, its exclusive transmission of the largest coverage
sporting events such as soccer tournaments and special events, its high-quality customer service and its nationwide distribution network with approximately
16 points of sale. In addition to the above, Innova also attributes its success to VeTV, our low-end package in Mexico. Sky continues to offer the highest
quality and exclusive content in the Mexican pay-TV industry. Its programming packages combine our over-the-air channels with other exclusive content.
During 2024, Sky offered exclusive content, which included La Liga and La Copa del Rey (Spanish Soccer), the Bundesliga (German Soccer), the
NFL Sunday Ticket, MLB Extra Innings, the NHL, marathons, ice skating events, Davis Cup, Diamond League, the World Padel Tour, UEFA EURO,
UEFA Nations League and qualifying matches of the CONMEBOL for the World Cup, as well as special coverage of female soccer leagues from Germany,
Spain, Sweden and the U.K. In addition to new programming contracts, Sky continues to operate under arrangements with a number of third-party
programming providers to provide additional channels to its subscribers. Sky also has arrangements with the major programming studios and sports
federations.
In 2024, the Sky HD Package comprised 261 channels, as well as eight additional channels for pay-per-view. We expect to continue broadening our
HD offering in the coming years.
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As of December 31, 2024, the standard definition programming packages monthly fees for residential subscribers, net of a prompt payment discount if
the subscriber pays within 12 days of the billing date, are the following: monthly fees for high definition programming packages are: Silver Ps.4499, and
Platinum was offered until November 2024 at Ps. 609.
Sky devotes eight pay-per-view channels to family entertainment and movies and four channels are devoted to adult entertainment. In addition, Sky
assigns 15 extra channels exclusively for special events, known as Sky Events, which include concerts and sports. Sky provides some Sky Events at no
additional cost while it sells others on a pay-per-view basis.
The installation fee is based on the number of set up boxes and the method of payment chosen by the subscriber. The monthly cost consists of a
programming fee plus a rental fee for each additional box.
In 2018, Sky launched Fixed Wireless Broadband services under the brand name Blue Telecomm. Sky offers five, 10 or 20 mega single-play
broadband services and five or 10 for video-broadband bundles. These services are limited to certain areas in Mexico. At the end of fiscal year 2024, Sky
had 350,885 broadband customers.
In 2022, Sky launched mobile services under the brand Blue Telecomm Cel which offered packages of 4 GB, 7 GB, 16 GB, and 23 GB single-play
mobile for Ps.289, Ps.399, Ps.599 and Ps.799, respectively. This mobile service has no longer been offered to the public since May 2024. At the end of
fiscal year 2024, Sky had 15,501 mobile customers.
In 2023, Sky launched Sky+, an Android-based streaming platform, that integrates Sky video service, video on demand, and OTTs content in a unified
viewing experience which offers packages basic and premium, at a price of Ps. 399 and Ps. 599, respectively. The Sky+ service has no longer been offered
to the public since May 2024. At the year ended on fiscal year 2024, Sky had 69,974 Sky+ subscribers.
Programming. Sky receives programming content from several providers, including TVSA, which also grants DTH satellite service broadcast rights to
most of its existing and future program services (including pay-per-view services on DTH), subject to some pre-existing third-party agreements and other
exceptions and conditions.
Discontinued Operations
Businesses disposed on January 31, 2022 (see Item 5. Operating and Financial Review and Prospects, TelevisaUnivision Transaction)
Content
We owned the former Content business prior to the completion of the TelevisaUnivision Transaction. Prior to the completion of such transaction, the
former Content business generated revenues from advertising, network subscription, licensing and our former feature film production and distribution
business Videocine.
Advertising
Advertising revenue was derived primarily from the sale of advertising time on television broadcast operations, which included the production of
television programming and broadcasting of Channels 2, 4, 5 and 9 (the “Television Networks”), as well as the sale of advertising time on programs
provided to pay television companies in Mexico and advertising revenue in the Company’s former Internet business and the production of television
programming and broadcasting for local television stations in Mexico. The broadcasting of the Company’s former Television Networks was performed by
television repeater stations in Mexico, either wholly owned, majority-owned or minority-owned by the Company or otherwise affiliated with the
Company’s networks.
Network Subscription
Network Subscription revenue was derived from domestic and international programming services provided to independent cable television systems in
Mexico and the Company’s direct-to-home satellite and cable television businesses. The programming services consisted of both programming produced
by the Company and programming produced by others.
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Licensing and Syndication
Licensing and Syndication revenue was derived from international program licensing and syndication fees. The Company’s television programming
was licensed and syndicated to customers abroad, including Univision.
Videocine
As part of the TelevisaUnivision Transaction, we sold Videocine, our former feature film production and distribution business.
Videocine produced and co-produced first-run Spanish language feature films, some of which are among Mexico’s top films based on box office
receipts.
Spun-off Businesses on January 31, 2024 (see Item 5. Operating and Financial Review and Prospects, Spin-off of Certain Businesses of Our Other
Businesses Segment)
Other Businesses
Publishing
With a total circulation of more than 3.3 million copies in 2024, Editorial Televisa, S.A. de C.V., or Editorial Televisa, the Company’s former
publishing business, published 11 titles that are distributed in Mexico. See “—Publishing Distribution”. Editorial Televisa’s main publications in Mexico
included TVyNovelas, a weekly entertainment and dramas magazine; Vanidades, a popular monthly magazine for women; and Caras, a monthly leading
lifestyle and socialite magazine. Editorial Televisa also managed 11 digital platforms that generated 125 million unique users and 269 million video views
on such platforms during 2024.
Publishing Distribution
We estimate that in 2024, Distribuidora Intermex, S.A. de C.V., or Intermex, our former distribution business, distributed more than 52%, in terms of
volume, of the magazines, comics, books, and collectibles circulated in Mexico.
Mexico is considered one of the most important collectibles markets in the world, and in Mexico. In 2024, Intermex had more than 90% of the market
share in the distribution of commercial collectibles.
We also estimate that such distribution network reached more than 6,100 points of sale in Mexico. In 2022, 2023 and 2024 48%, 21% and 12%,
respectively, of the publications distributed by Intermex were published by Editorial Televisa. In addition, Intermex’s distribution network sells a number of
publications published by joint ventures and independent publishers, as well as collectibles, books, novelties and other consumer products.
Soccer
We owned Club de Fútbol América S.A. de C.V., or Club América, which currently plays in the Mexican First Division and is one of the most popular
and successful soccer teams in Mexico and Club América Femenil, a professional soccer team that participates in the first division of the Mexican women’s
soccer league currently known as Liga MX Femenil.
We also owned Azteca Stadium, which has hosted two FIFA World Cup openings and finals (1970 and 1986), and FIFA has recently confirmed that
Azteca Stadium will host soccer matches during the 2026 World Cup, which will be held in Canada, Mexico, and the United States. This will make it the
only stadium in the world to have hosted matches in three different FIFA World Cups.
National Football League
The Company entered into a contract with the National Football League, or the NFL, to host one regular season game each year beginning in 2016. In
November 2022, a regular season Monday Night Football game was played at the stadium with more than 78,000 fans in attendance. No NFL game took
place in Mexico during 2023 and 2024.
Gaming Business
In 2006, we launched our former gaming business under the brand “PlayCity”, consisting of casinos and an online gaming site. As of December 31,
2024, PlayCity had 17 casinos in operation in 12 states in Mexico.
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PlayCity also has a successful multi-level loyalty plan with more than 224,000 active accounts as of December 31, 2024. All of PlayCity’s casino
rooms are located in premium locations inside or next to high-value shopping malls.
Investments
Grupo de Telecomunicaciones de Alta Capacidad, S.A.P.I. de C.V. In March 2010, Telefónica, Editora Factum, S.A. de C.V., a wholly owned
subsidiary of the Company which was merged into CVQ in May 2015, and Megacable agreed to jointly participate, through a consortium known as GTAC,
in the public bid for a pair of dark fiber wires held by the CFE (Comisión Federal de Electricidad). In June 2010, the SCT granted GTAC a favorable
award in the bidding process for a 20-year contract for the lease of up to 19,457 kilometers of dark fiber-optic capacity, along with a corresponding
concession, granted in July 2010, to operate a public telecommunications network using DWDM technology. In June 2010, one of our subsidiaries entered
into a long-term credit facility agreement to provide financing to GTAC in an amount up to Ps.688.2 million, which was already liquidated. Under the
terms of this agreement, principal and interest were payable at dates agreed by the parties, between 2013 and 2021. In addition, a subsidiary of the
Company entered into supplementary long-term loans to provide additional financing to GTAC for an aggregate principal amount of Ps.1,527.9 million. By
the end of 2024, GTAC had in operation 215 links and 174 nationwide nodes, and the services for customers grew to 4,156, of which 88% and 9%,
respectively, have a capacity of 10 Gbps. The overall capacity per link is approximately 3.2 Tbps (80 optical channels x 10, 40 and 100 Gbps each channel).
In addition, GTAC maintains nine of its own routes (3,408 kilometers), three third-party dark fiber IRU (2,956 kilometers) and local loops (559
kilometers). This fiber-optic network represents for us an alternative to access data transportation services, increasing competition in the Mexican
telecommunications market and therefore improving the quality of the services offered. The fiber-optic network aims to increase broadband internet access
for businesses as well as households in Mexico.
We have investments in several other businesses. See Notes 3 and 10 to our consolidated year-end financial statements.
TelevisaUnivision
We have a number of arrangements with TelevisaUnivision, the leading Spanish-language content and media company in the world, which features the
largest Spanish-language library of owned content and industry-leading production capabilities that power its streaming, digital and linear television
offerings, as well as its radio platforms. TelevisaUnivision’s linear operations include two broadcast television networks in the United States, Univision
Network and UniMás, and the broadcast television networks in Mexico known as “Las Estrellas”, “Canal 5”, and “Canal 9”. In addition, TelevisaUnivision
operates 9 cable networks in the United States, including Galavisión, the second most watched Spanish-language entertainment cable networks, and
TUDN, the #1 Spanish-language sports network and 29 cable networks in Mexico, including “Distrito Comedia” and “TL Novelas”. TelevisaUnivision also
owns or operates 59 local television stations in the United States and 16 local television stations in Mexico. In addition, TelevisaUnivision provides
programming to 77 broadcast network station affiliates in the United States. Univision, “UniMás” and “Galavisión” that are also available on YouTube TV.
TelevisaUnivision’s digital properties consist of streaming and various other websites. The digital offerings are anchored by ViX, a two-tier streaming
service in one single app comprised of the free AVOD product and a paid premium SVOD option, which hosts over 50,000 hours of high-quality, original
Spanish-language programming from distinguished producers and top talent. TelevisaUnivision’s offerings also include UnivisionNow.com, a direct-to-
consumer, on-demand and live streaming subscription service, and Univision.com as well as various other local digital properties. TelevisaUnivision’s radio
operations, known as the “Uforia Audio Network”, encompasses 35 owned or operated U.S. radio stations, an experiential and digital-centric event series
and a robust digital audio footprint.
As of March 31, 2025, we owned a 42.6% equity interest on an as-converted basis (excluding unvested and/or unsettled stock, restricted stock units
and options) in TelevisaUnivision, and we are party to related governance arrangements pursuant to which, among other things, we are entitled to designate
five of the 11 members of the Board of Directors of TelevisaUnivision, at least proportionate membership on board committees and consent rights over
certain matters. In addition, Messrs. Bernardo Gómez Martínez and Alfonso de Angoitia Noriega became part of the management team of the Mexican
content business of TelevisaUnivision. These individuals also continue to serve in their current roles at the Company. As a result, they do not devote all of
their time to either TelevisaUnivision or the Company.
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PLA and MLA
Under the Program Licensing Agreement (the “PLA”), we granted Univision exclusive Spanish-language broadcast and digital rights to our
audiovisual programming (subject to certain exceptions) in the United States and all territories and possessions of the United States, including Puerto Rico,
in exchange for a royalty payment. Under the Mexico License Agreement (the “MLA”), we had the exclusive Spanish-language broadcast and digital rights
to Univision’s audiovisual programming (subject to certain exceptions) in Mexico during the term of the PLA.
As part of the TelevisaUnivision Transaction, the PLA and the MLA were assigned to an affiliate of UHI, and since February 2022, we no longer
receive any royalties from TelevisaUnivision under the PLA.
TelevisaUnivision Transaction
On January 31, 2022, we consummated the TelevisaUnivision Transaction with UHI and affiliates of Searchlight, ForgeLight and Liberty Global,
pursuant to which, among other things, we contributed our former Content business (other than certain assets relating to our former news business, which
was transferred at closing to the News Company, real estate and Mexican over-the-air broadcast concessions) to Univision. In consideration for the
contribution of our former Content business, we received approximately U.S.$4.5 billion in a combination of cash (U.S.$3.0 billion) and U.S.$1.5 billion of
common and preferred shares of TelevisaUnivision, excluding post-closing adjustments. The combined company is referred to as TelevisaUnivision, Inc.
The TelevisaUnivision Transaction was partially financed by UHI through a new Series C preferred equity investment in TelevisaUnivision of U.S.$1.0
billion in the aggregate led by ForgeLight, along with the SoftBank Latin American Fund, with participation from Google and The Raine Group, as well as
debt financing. In addition, TelevisaUnivision’s news content production for Mexico was transferred so that it is provided by the News Company. After the
closing of the TelevisaUnivision Transaction, news programs are owned by the News Company and licensed to TelevisaUnivision.
The foregoing summary of the TelevisaUnivision Transaction does not purport to be complete and is qualified in its entirety by reference to the full text
of the 2021 Transaction Agreement, a copy of which has been filed as Exhibit 4.6 to this Form 20-F.
FCC Matters
On January 3, 2017, the FCC (i) approved an increase in the authorized aggregate foreign ownership of Univision’s issued and outstanding shares of
common stock from 25% to 49%; and (ii) authorized the Company to hold up to 40% of the voting interests and 49% of the equity interests of Univision.
Such authorization enabled the Company to increase its equity stake in Univision, which it did through the exercise of warrants in December 2020, as
described earlier in this section under “—TelevisaUnivision”, and subsequently in the completion of the TelevisaUnivision Transaction, as described earlier
in this section under “—TelevisaUnivision”. In addition, on December 23, 2020, the FCC approved the then-pending acquisition of a majority equity
interest in UHI by affiliates of Searchlight and ForgeLight, subject to certain requirements, and authorized the foreign ownership of up to 100% of UHI’s
equity and voting interests, including up to a 49.9% non-controlling voting and/or equity interest to be held by the Company.
On January 21, 2022, the FCC approved the TelevisaUnivision Transaction, subject to compliance with certain requirements set forth in its ruling,
including requirements relating to foreign ownership.
For additional information regarding our relationship with TelevisaUnivision, see Notes 3, 9, 10, 14, 15, 20 and 28 to our consolidated year-end
financial statements.
Competition
We compete with various companies in Mexico, both Mexican and non-Mexican. See “Key Information—Risk Factors—Risk Factors Related to Our
Business—We Face Intense Competition in Each of Our Markets”.
Cable
Cablevisión, Cablemás, TVI, Cablecom and Telecable face intense competition from several media, internet, OTT, cable, pay-TV and
telecommunications companies throughout Mexico.
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The telecommunications industry in Mexico has become highly competitive. New technologies and technical innovations have been implemented in
the telecommunications sector, resulting in a significant increase in competition. We believe that there is a strong correlation between the increase in
competition and the adoption of new technologies.
Our cable operators face intense competition in the Internet services market and in the fixed telephony services market from several service providers
such as Totalplay and other cable companies, but also importantly from the preponderant economic agent in the telecommunications sector, which holds a
significant market share, as well as other competitors in mobile solutions.
Our cable operators also face tough competition from other cable companies and from other pay-TV operators such as Dish México, Total Play,
Megacable, Sky and other cable operator companies. Recently, competition in this market has increased due to the growth of IPTV or OTT providers such
as Netflix, Disney+, Star +, Claro Video, Prime Video (Amazon), Max, ViX, Paramount, Lionsgate, Universal +, and Apple TV+, among others.
Our cable operators compete as well with other media with respect to advertising sales, including DTH, social media, outdoor advertising and
publishing among others. The information technologies are changing and we expect will continue to change the consumption of advertising in the
communications media.
Sky
Innova currently competes with, or expects to compete with, among others, cable television operators, MMDS systems, national broadcast networks
(including our three free-to-air networks and Channel 4), regional and local broadcast stations, OTT content providers, internet video websites and other
DTH concessions such as Dish México, which as of June 2024 had approximately 963,144 subscribers, according to IFT. Currently, Dish México offers not
only low-priced packages, but also high-end products such as High Definition Packages. Innova also faces competition from: (a) unauthorized C-band and
Ku-band television signals provided by third parties without authorization of the Mexican government; and (b) illegal streaming services that facilitate
access to television channels and content through set up boxes and applications. Other competitors include radio, movie theaters, video rental stores, IPTV,
video games and other entertainment sources. We also face significant competition from new entrants in pay-TV services as well as from the new public
television networks. The consolidation in the entertainment and broadcast industries could further intensify competitive pressures. As the pay-TV market in
Mexico matures, and as the offering of bundled services that include pay-TV, broadband and telephony increases, Innova expects to face competition from
an increasing number of sources. Emerging technologies that provide new services to pay-TV customers as well as new competitors in the DTH field or
cable, telecommunication and internet players entering into video services would require us to make significant capital expenditures in new technologies
and additional transponder capacity.
In October 2008, Dish México, a subsidiary of a U.S. based DTH company operating with certain arrangements with Telmex, started operations in
Mexico through a DTH concession. Dish México currently operates nationwide.
Regulation
Our business, activities and investments are subject to various Mexican federal, state and local statutes, rules, regulations, policies and procedures,
which are constantly subject to change and are affected by the actions of various Mexican federal, state and local governmental authorities. Given that we
retained the broadcast concessions as part of the TelevisaUnivision Transaction, we continue to be responsible for compliance with regulations applicable to
them, as described below. See “Key Information—Risk Factors—Risk Factors Related to Mexico—Imposition of Fines by Regulators and Other
Authorities Could Adversely Affect Our Financial Condition and Results of Operations”, “Key Information—Risk Factors—Risk Factors Related to
Mexico—Existing Mexican Laws and Regulations or Changes Thereto or the Imposition of New Ones May Negatively Affect Our Operations and
Revenue” and “Key Information—Risk Factors—Risk Factors Related to Mexico—The Amendment of Various Provisions of the Mexican Constitution
Related to Telecommunications, and the LFTR, May Significantly and Adversely Affect the Business, Results of Operations and Financial Results of Some
of Our Business Segments”. The material Mexican federal, state and local statutes, rules, regulations, policies and procedures to which our business,
activities and investments are subject are summarized below. These summaries do not purport to be complete and should be read together with the full texts
of the relevant statutes, rules, regulations, policies and procedures described therein.
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Cable
Concessions. Cable television operators apply for a concession from IFT in order to operate their networks and provide cable television services and
other multimedia communications services. Applications are submitted to IFT and, after a formal review process, a concession is granted for an initial term
of up to 30 years. Cablevisión obtained a telecommunications concession, which expires in 2029; in 2019 such concession became an integrated sole
concession. Pursuant to its public telecommunications concession, Cablevisión can provide any telecommunication services in Mexico, including cable
television, limited audio transmission services, bidirectional internet access and unlimited data transmission services in Mexico City and surrounding areas
in the State of Mexico (Estado de México). The scope of Cablevisión’s integrated sole concession is much broader than the scope of its former public
telecommunications concession, which covered certain telecommunications services in Mexico City and its metropolitan area.
Cablemás operates under one integrated sole concession, which covers 20 Mexican states. Pursuant to this concession, Cablemás provides cable
television services, internet access and bidirectional data transmission services. In addition, Cablemás provides local and international long distance
telephony services. The concession granted by IFT allows Cablemás to install and operate a public telecommunications network. The Cablemás concession
will expire in 2046. The Cablemás concession allows it to provide any telecommunication services throughout Mexico. In 2021, as part of a strategy to
make the operation more efficient, Cablemás waived its previous concessions for residential services, which were granted pursuant to an integrated sole
concession that allowed Cablemás to provide any telecommunication services in Mexico, with an expiration date of 30 years from July 7, 2016.
TVI operates under one integrated sole concession, which covers several Mexican states. Through this concession, TVI provides cable television
services, bidirectional data transmission and internet and telephony services as well as mobile telephony as a mobile virtual network operator (MVNO) in
30 Mexican states. The integrated sole concession granted by IFT allows TVI to install and operate a public telecommunications network to provide any
telecommunication and broadcasting services all around Mexico. TVI’s concession will expire in 2056.
Cablecom operates under one integrated sole concession, which covers 18 Mexican states. Through this concession, Cablecom provides bidirectional
data transmission and internet and telephony services. The concession granted by IFT allows Cablecom to install and operate a public telecommunications
network. The expiration date for Cablecom’s concession is 2045. Cablecom’s concession title allows it to provide telecommunication services throughout
Mexico
In 2021, FTTH sold its operations to its affiliated concessionary companies which previously operated in Mexico. As a result, FTTH waived its rights,
in the same year, to its integrated sole concession, in order to avoid any risk of fine and/or revocation by IFT.
According to the LFTR, a public telecommunications concession may be renewed upon its expiration, or revoked or terminated prior to its expiration
for a variety of circumstances, including:
●
unauthorized interruption or termination of service;
●
interference by the concessionaire with services provided by other operators;
●
non-compliance with the terms and conditions of the public telecommunications concession (which has expressly established that failure to
comply will result in the revocation of the concession);
●
the concessionaire’s refusal to interconnect with other operators;
●
loss of the concessionaire’s Mexican nationality;
●
unauthorized assignment, transfer or encumbrance, in whole or in part, of the concession or any rights or assets;
●
the liquidation or bankruptcy of the concessionaire; and
●
ownership or control of the capital stock of the concessionaire by a foreign government.
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In addition, IFT may establish under any public telecommunications concession further events which could result in revocation of the concession.
Under current Mexican laws and regulations, upon the expiration or termination of a public telecommunications concession, the Mexican government has
the right to purchase those assets of the concessionaire that are directly related to the concession, at market value.
Cable television operators are subject to the LFTR. Under current Mexican law, cable television operators are classified as public telecommunications
networks, and must conduct their business in accordance with Mexican laws and regulations applicable to public telecommunications networks.
Under the applicable Mexican law, the Mexican government, through the SCT, may also temporarily seize or even expropriate all of a public
telecommunications concessionaire’s assets in the event of a natural disaster, war, significant public disturbance or threats to internal peace and for other
reasons related to preserving public order or for economic reasons. The Mexican government is obligated by Mexican law to compensate the
concessionaire, both for the value of the assets seized and related profits.
On December 20, 2024, a decree was published in the Official Gazette of the Federation titled “Decreto por el que se reforman, adicionan y derogan
diversas disposiciones de la Constitución Política de los Estados Unidos Mexicanos, en materia de simplificación orgánica” (the “Organic Simplification
Decree”) in which the provisions of the first, tenth, and eleventh transitory articles are referenced, where it is stated that the IFT will be extinguished within
a period of 180 days from the entry of the competition and telecommunications and broadcasting secondary laws, that will be issued by the Mexican
Congress, for which reason, the acts issued by the IFT prior to the entry of this Organic Simplification Decree, will continue to have all their legal effects in
terms of what is indicated in the eleventh transitory article.
Supervision of Operations. IFT regularly inspects the operations of cable systems and cable television operators must file periodic reports with IFT,
and publish, on their web pages, the average download speed of their internet services.
Under Mexican law, programming broadcast on cable networks is not subject to judicial or administrative censorship. However, this programming is
subject to various regulations, including prohibitions on foul language, programming which is against good manners and customs or programming which is
against the national security or against public order.
Mexican law also requires cable television operators to broadcast programming that promotes Mexican culture, although cable television operators are
not required to broadcast a specified amount of this type of programming.
In addition to broadcasting programming that promotes Mexican culture, Mexican law also requires cable television operators to carry all air broadcast
channels in the same geographic coverage area and Señales de Instituciones Públicas Federales, or Public Federal Institutions Channels, provided by the
Mexican government according to the applicable regulations.
Restrictions on Advertising. Mexican law restricts the type of advertising that may be broadcast on cable television. These restrictions are similar to
those applicable to advertising broadcast on over-the-air channels. See “—Regulation—Mexican Television Regulations—Restrictions on Advertising”.
Forfeiture of Assets. Under Mexican regulations, at the end of the term of a public telecommunications concession, assets of concessionaires may be
purchased by the Mexican government at market value.
Non-Mexican Ownership of Public Telecommunications Networks
Under current Mexican law, non-Mexicans may currently own up to 49%, subject to reciprocity by the relevant foreign country, of the outstanding
voting stock of Mexican companies with a broadcast television or radio concession. However, non-Mexicans may currently own up to all of the outstanding
voting stock of Mexican companies with a public telecommunications concession to provide cellular telephone, fixed-line telephone, pay-TV and internet
services.
Application of the Existing Regulatory Framework to Internet Access and IP Telephony Services
Our Cable business may be required, under Mexican law, to permit other concessionaires to connect their network to its network in a manner that
enables its customers to choose the network by which the services are carried.
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To the extent that a cable television operator has any available capacity on its network, as a public telecommunications network, Mexican law requires
the operator to offer third party providers access to its network. Our Cable operators currently do not have any capacity available on their networks to offer
to third party providers and do not expect that they will have capacity available in the future given the broad range of services they plan to provide over
their networks.
Satellite Communications
Mexican Regulation of DTH Satellite Services. Under LFTR, concessions to broadcast DTH satellite services are for an initial term of up to 30 years,
and are renewable for up to 30 years. We received a 30-year concession to operate DTH satellite services in Mexico utilizing SatMex satellites in May
1996. In November 2018, such concession transitioned into a unique concession which authorizes Sky to render the following services: DTH Pay TV;
Private Satellite Link Services; and Fixed Telephony and Internet Access. In October 2021, we were officially notified by IFT of the extension of our
concession which has been renewed for 30 years, which now expires in May 2056.
In November 2000, we received an additional 20-year concession to operate our DTH satellite service in Mexico using the IS-9 satellite system, a
foreign-owned satellite system. Our use of the IS-16, IS-21 and SM-1 satellites has been authorized by the competent Mexican authorities. As of November
2020, due to modifications in the telecommunications legislation, such concession transitioned into a new 10-year authorization and, at the same time, we
were granted a unique concession, thereby complementing our concession to continue providing the DTH service.
Like a public telecommunications network concession, a unique concession, as well as any other authorization, may be revoked or terminated by IFT
prior to the end of its term in certain circumstances, which for a DTH concession include:
●
The failure to use the concession within 180 days after it was granted;
●
A declaration of bankruptcy of the concessionaire;
●
Failure to comply with the obligations or conditions specified in the concession;
●
Unlawful assignments of, or encumbrances on, the concession; or
●
Failure to pay to the government the required fees.
At the termination of a concession, the Mexican government has the preemptive right to acquire the assets of a DTH satellite service concessionaire. In
the event of a natural disaster, war, significant public disturbance or for reasons of public need or interest, the Mexican government may temporarily seize
and expropriate all assets related to a concession, but must compensate the concessionaire for such seizure. The Mexican government may collect fees
based on DTH satellite service revenues of a satellite concessionaire.
Under the LFTR, DTH satellite service concessionaires may freely set customer fees but must notify IFT of the amount, except that if a concessionaire
has substantial market power, IFT may determine fees that may be charged by such concessionaire. The LFTR specifically prohibits cross-subsidies.
There is currently no limitation on the level of non-Mexican ownership of voting equity of DTH satellite system concessionaires.
Regulation of DTH Satellite Services in Other Countries. Our current and proposed DTH ventures in other countries are and will be governed by
laws, regulations and other restrictions of such countries, as well as treaties that such countries have entered into, regulating the delivery of
communications signals to, or the uplink of signals from, such countries. In addition, the laws of some other countries establish restrictions on our
ownership interest in some of these DTH ventures as well as restrictions on programming that may be broadcast by these DTH ventures.
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Mexican Antitrust Law
The current Federal Antitrust Law became effective on July 7, 2014. However, due to the Constitutional Amendment, a new law will soon be enacted.
The new antitrust authority will have to authorize mergers and acquisitions before they take place. In addition, one of the thresholds was modified to only
apply to sales or assets of economic agents in Mexico and not worldwide economic agents.
As of the date of this report, the Antitrust Law provides that the following reportable transactions, among others, are exempt from being reviewed by
IFT or COFECE:
(i)
Corporate restructurings.
(ii) Transactions where the acquirer has control over the target from its incorporation or from the date the last reported transaction was approved by
IFT or COFECE.
(iii) Trusts in which the trustor contributes assets without intending to transfer, or causing the actual transfer of, assets to another company that is not
part of the corporate structure of the trustor.
(iv) Transactions that have effect in Mexico involving non-Mexican participants, if the participants will not take control of Mexican legal entities, or
acquire assets in Mexico, in addition to those previously controlled or owned by such participants.
(v) When the acquirer is a Brokerage House, whose operation involves the acquisition of stock, obligations, securities or assets, in order to place them
among the investing public, except when the Brokerage House obtains a significant influence in the decisions of the company.
(vi) Acquisitions of equity securities (or convertible securities) through stock markets that represent less than 10% of such securities, and the acquirer
is not entitled to: (w) appoint board members; (x) control a shareholders meeting decision; (y) vote more than 10% of voting rights of the issuer;
or (z) direct or influence the management, operation, strategy or principal policies of the issuer.
(vii)When the acquisition of stock, assets, obligations or securities is made by one or more investment funds with speculative purposes that have no
investments in companies or assets that participate or are occupied in the same relevant market of the acquired company.
According to transitory Article 9 of the LFTR, as long as there is a Preponderant Economic Agent in the telecommunications and broadcasting sectors,
in order to promote competition and develop viable competitors in the future, it is not required to obtain IFT approval of mergers and acquisitions carried
out by concession holders when the following requirements are met:
(a) The transaction reduces the Dominance Index in the sector and the Hirschman-Herfindahl Index does not increase by more than 200 points.
(b) As a result of the transaction, the economic agent involved has a sector share percentage of less than 20%.
(c) The Preponderant Economic Agent of the sector in which the transaction is taking place is not involved in the transaction.
(d) The transaction does not effectively diminish, harm or hinder the free competition and concurrency in the applicable sector.
Notwithstanding the above, concession holders involved in the transaction shall inform IFT of the transaction within ten days following the completion
of the transaction and IFT will then have 90 calendar days to investigate the transaction and in case it determines the existence of substantial market power
in the relevant market, it may impose the necessary measures to protect and encourage free competition and concurrency in such market.
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As part of our expansion of our Cable business, on December 17, 2018, we acquired FTTH under the provisions set forth in transitory Article 9 of
LFTR. On May 8, 2019, the IFT launched an investigation to analyze if, as a result of the transaction, the Company, as well as the Cable and Sky
concessionaires and TVSA, acquired substantial power in the market of telecommunications networks providing voice, data or video services. On
September 4, 2019, the IFT Investigative Authority issued a preliminary opinion, whereby it assessed that there were elements to determine that the
Company had substantial power in 35 relevant markets of the telecommunications networks that provide restricted television and audio services. Those
relevant markets comprise 35 municipalities in the following States: Aguascalientes, Chihuahua, Ciudad de México, Estado de México, Jalisco, Nuevo
León and San Luis Potosí. As a response to the preliminary opinion, the Company presented its position and provided evidence to prove that the Company
does not hold substantial power in the relevant markets established in the preliminary opinion. On November 26, 2020, the IFT notified TVSA, the
Company and some subsidiaries of its Cable and Sky businesses of the final resolution confirming the existence of substantial power in the 35 relevant
markets of restricted television and audio services. Some of the consequences derived from the determination of substantial market power are applicable as
a matter of law and others may be imposed by IFT in a new procedure in accordance with the LFTR, which may consist of: (i) the obligation to obtain
IFT’s approval and to register the rates for our services; (ii) to inform the IFT in case of the adoption of new technology or modifications to the network;
(iii) the agent with substantial power may not be entitled to the benefits of some rules of the “must carry” and “must offer” provisions; and (iv) the
implementation of accounting separation. Consequently, on December 17, 2020, TVSA, the Company and some subsidiaries of its Cable and Sky
businesses, filed three amparos, respectively, to challenge the constitutionality of the resolution. In October 2022, TVSA, the Company and some
subsidiaries of its Cable and Sky businesses obtained favorable amparo resolutions form a specialized federal judge which determined that the resolution of
IFT about the substantial power on the restricted services of television and audio market in 35 municipalities in Mexico, after the acquisition of the direct to
home fiber-optic and assets related to Axtel, S.A.B. de C.V. in December 2018, was unconstitutional. On January 24, 2024, a Federal Court resolved
through a final resolution of the amparo of TVSA and instructed the IFT to revoke the substantial power resolution. On March 6, 2024, as a result of the
amparo resolution, the IFT revoked the substantial power resolution and determined to close the file only for TVSA. On May 16, 2024, a Federal Court
ruled on the amparo proceedings of the Company and some subsidiaries of its Cable and Sky businesses, ordering the IFT to repeal the determination that
declared the Company, its concessionaires of restricted television and audio services and other entities as Economic Agent with Substantial Power in the 35
relevant markets of restricted television and audio services. On June 21, 2024, the IFT notified the Company of such repeal ruling in compliance with the
guidelines issued by the Federal Court. With this resolution, the procedure initiated by the IFT to impose asymmetric measures on the Company and its
subsidiaries was also repealed, and the measures provided in the current regulations for these purposes are no longer applicable.
Other relevant provisions provided in the current Antitrust Law, are the following:
(a) Granting the Autoridad Investigadora, or Prosecutor Authority, authority to investigate the commission of monopolistic practices, forbidden
mergers, barriers to competition, essential facilities, or substantial market power.
(b) Enhancement of the legal power of the authorities for conducting its investigations (such as requesting written evidence and testimonies and
performing verification visits).
(c) Significantly increased monetary fines for the commission of illegal conduct.
(d) IFT or COFECE, as applicable, may determine the existence of essential facilities when the following conditions are met: (i) one or several
economic agents with substantial market power control a good; (ii) the reproduction of such good by other economic agents is unviable, now or in
the future, due to technical, legal or economic reasons; (iii) the good is indispensable for the provision of other goods or services in other markets
and does not have close substitutes.
(e) IFT or COFECE, as applicable, may determine the existence of barriers to competition and free markets, when an element is found that either: (i)
hinders the access of new entrants; (ii) limits competition; or (iii) hinders or distorts competition and the free market process.
(f)
The resolutions issued by IFT or COFECE, as applicable, can only be challenged by an amparo claim, which will be ruled by the Antitrust,
Telecommunications and Broadcasting federal courts, without any judicial stay that can suspend the execution of the resolution.
The above-mentioned provisions may significantly and adversely affect our business, results of operations and financial condition.
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The transition to the new regulatory entities could introduce further uncertainty regarding compliance obligations, competitive conditions, and market
dynamics, all of which may materially affect our business and financial performance. As the legislative and regulatory landscape continues to evolve, we
will closely monitor any changes that may impact our business operations, including potential amendments to the LFTR and new enforcement mechanisms
established by the restructured regulatory framework.
Mexican Television Regulations
Concessions. The LFTR regulates, on a convergent basis, the use and exploitation of the radio-electric spectrum, and the telecommunications
networks, as well as the rendering of broadcasting, cable, satellite pay-TV and telecommunications services.
Concessions for the commercial use of spectrum are granted through public bid processes. Such concessions are granted for a fixed term, subject to
renewal in accordance with LFTR. Renewal of concessions for the use of spectrum require, among others: (i) to request such renewal to IFT in the year
prior to the last fifth period of the fixed term of the related concession; (ii) to be in compliance with the concession holder’s obligations under the LFTR,
other applicable regulations, and the concession title; (iii) a declaration by IFT that there is no public interest in recovering the spectrum granted under the
related concession; and (iv) the acceptance by the concession holder of any new conditions for renewing the concession as set forth by IFT, including the
payment of a related fee. To our knowledge, no spectrum granted for broadcasting services in Mexico has been recovered by the Mexican government in
the past several years for public interest reasons, however, the Company is unable to predict any future action by IFT.
Pursuant to the Telecommunications and Broadcasting Federal Law, concessionaires will now only have one integrated sole concession to provide
telecommunication and broadcasting services. Integrated sole concessions will be granted for a term of up to 30 years with the possibility to renew them,
for the same term originally granted. Renewal of integrated sole concessions require, among others: (i) to request its renewal to IFT within the year prior to
the last fifth period of the fixed term of the related concession; (ii) to be in compliance with the concession holder’s obligations under the LFTR, other
applicable regulations, and the concession title; and (iii) the acceptance by the concession holder of any new conditions for renewing the concession as set
forth by IFT. IFT shall resolve any request for renewal of the telecommunications concessions within 180 business days of its request. Failure by IFT to
respond within such period of time shall be interpreted as if the request for renewal has been granted.
In May 2018, applications for the renewal of the Group’s 70 broadcasting concessions (comprising 225 TV stations), were timely filed under the LFTR
and the terms set on the concessions, and as part of the renewal process, the Company regrouped its concessions to create (i) three concessionaires, each
one specialized on broadcasting the National TV Networks of Las Estrellas, Canal 5 and Canal Nu9ve, respectively, and (ii) three concessionaires
specialized on local TV content.
On November 6, 2018, IFT notified the Company the grant of the renewal of its concessions, the new conditions under which they will operate, as well
as the relevant fee to be paid for such renewals.
On November 26, 2018, the Company timely accepted the new conditions for the renewal of the concessions and performed the payment of the
relevant fee for a total amount of Ps.5,753 million, as a consequence, the IFT delivered to the Company (i) 23 concessions for the use of spectrum that
comprise the Company 225 TV stations, for a term of 20 years, starting in January 2022, and ending in January 2042, and (ii) six concessions that grant the
authorization to provide digital broadcasting television services of such 225 TV stations, for a term of 30 years, starting in January 2022 and ending in
January 2052.
On March 7, 2014, IFT published in the Official Gazette of the Federation an invitation to a public auction for the concession for the two new National
Digital Networks. The invitation provided that the concessions for the National Digital Networks would be granted for a term of 20 years for the operation
of stations with, among other characteristics, mandatory geographic coverage in 123 locations corresponding to 246 channels within the Mexican territory.
Pursuant to the LFTR currently in force, a concession (obtained by means of a public process) is still needed to participate in the radio-electric
spectrum in Mexico.
None of our over-the-air television concessions has ever been revoked or otherwise terminated and, except for an immaterial concession to transmit an
UHF restricted television service which expired in November 2010, all of our concessions have been renewed. See “Information on the Company—
Business Overview—Regulation— Cable—Concessions”.
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We believe that we have operated our television concessions substantially in compliance with their terms and applicable Mexican law. If a concession
is revoked or terminated, the concessionaire could be required to forfeit to the Mexican government all of its assets or the Mexican government could have
the right to purchase all the concessionaire’s assets. In our case, the assets of our licensee subsidiaries generally consist of transmitting facilities and
antennas. See “Key Information—Risk Factors—Risk Factors Related to Our Business—The Operation of Our Business May Be Adversely Affected if the
Mexican Government Does Not Renew or Revokes Our Broadcast or Other Concessions”.
As a result of the Telecom Reform, certain provisions of the LFTR and Guidelines related to the distribution of more than one channel of programming
on the same transmission channel, or multiplexing, were passed. Such provisions optimize the use of the spectrum; for example, where the 6MHz spectrum
was used entirely to broadcast only one channel of programming analog standard, now based on new technologies, more than one channel of programming
digital standard on the same transmission channel can be broadcast. The Company, as a Preponderant Economic Agent has a restrictive obligation related to
multiplexing. The IFT shall not authorize the Preponderant Economic Agent to broadcast channels in excess of 50% of the total channels authorized to
other broadcasters in the same geographic coverage. The IFT has granted multiplexing authorizations to the Company, granting access to TVSA as its third
party programmer in terms of the third party programming agreements: 36 authorizations for multiplexing the Channel 5 Network, 29 authorizations for
multiplexing the Channel Nu9ve Network, two authorizations for multiplexing the Channel 2 Network, 35 authorizations for multiplexing Channel Foro TV
Network, three authorizations for multiplexing Local Channels and three authorizations for multiplexing the Channel CV Shopping (programmed by the
Company).
Supervision of Operations. To ensure that broadcasting is performed in accordance with the provisions established in the concession title, the LFTR
and Guidelines, IFT is entitled to monitor compliance by exercising powers of supervision and verification: for example, the IFT can perform technical
inspections of the television stations and the concessionaire must file annual reports with IFT.
On August 21, 2018, the Mexican Ministry of Interior published in the Official Gazette of the Federation an amendment to the regulations of broadcast
television and pay-TV programming guidelines that provides for different age classifications for programming (the “Programming Guidelines
Amendment”), which became effective on August 22, 2018, substituting in full force and effect the previous amendment published on February 15, 2017.
The Programming Guidelines Amendment for broadcast television is as follows: (i) programs classified “D” extreme and adult only may broadcast after
midnight to 5:00 am; (ii) programs classified “C” not suitable for people under the age of 18 may broadcast only after 9:00 p.m. to 5:59 am; (iii) programs
classified “B15” for teenagers over 15 years old may be broadcast only after 7:00 p.m. to 5:59 am; (iv) programs classified “B” for teenagers may be
broadcast only after 4:00 p.m. to 5:59 am; and (v) programs classified “A” and “AA” suitable for all age groups may be broadcast at any time. The same
age classifications apply for pay-TV programming and the age classifications must be shown to the audience, but there are no applicable broadcasting time
limitations.
On February 14, 2020, the Mexican Ministry of Interior published in the Official Gazette of the Federation an additional amendment to the
Programming Guidelines, for which the only relevant change therein was to extend the display time for the Parental Advisory from 15 to 30 seconds.
Content for Children and Teenagers. The LFTR includes new criteria for programming addressed for children and teenagers. Each concessionaire is
also required to transmit each day, free of charge, up to 30 minutes of programming promoting cultural, educational, family counseling and other social
matters, using programming provided by the Mexican government. Historically, the Mexican government has not used a significant portion of this time.
Restrictions on Advertising. Mexican law regulates the type and content of advertising broadcast on television. In order to prevent the transmission of
misleading advertising, without affecting freedom of expression and dissemination, the broadcasting of advertisements presented as journalistic news or
information is prohibited. Under current law, advertisements of alcoholic beverages (other than beer and wine) may be broadcast only after 9:00 p.m. and
advertisements for tobacco products are prohibited. Advertising for alcoholic beverages must not be excessive and must be combined with general
promotions of nutrition and general hygiene. Health Law Guidelines were published in the Official Gazette of the Federation on April 15, 2014 and became
effective on July 7, 2014, for the advertisement of the following products: snacks, flavored drinks, candies, chocolates, or foods similar to chocolates and
became effective for the remaining products on January 1, 2015. Moreover, the Mexican government must approve any advertisement of lotteries and other
sweepstakes games.
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TV advertisement will not take up more than 18% of the broadcast time on any day in TV. However, this percentage can be increased by an additional
2% when at least 20% of the content programmed is national production. Another 5% of advertisement time can be added when at least 20% of the content
programmed is independent national production. There are no restrictions on maximum rates. See “Key Information—Risk Factors—Risk Factors Related
to Mexico—Existing Mexican Laws and Regulations or Changes Thereto or the Imposition of New Ones May Negatively Affect Our Operations and
Revenue” and “—The Amendment of Various Provisions of the Mexican Constitution Related to Telecommunications, and the LFTR, May Significantly
and Adversely Affect the Business, Results of Operations and Financial Results of Some of Our Business Segments”.
On June 8, 2023, the Plenary of the Supreme Court of Justice of the Nation, by a majority of eight votes, resolved the constitutional disputes filed by
the IFT and COFECE, declaring the Agencies Law invalid. The judgment was published in the Official Gazette of the Federation on December 22, 2023.
As a result, the Agencies Law is currently invalid and not applicable. See “Key Information—Risk Factors—Risk Factors Related to Mexico—Existing
Mexican Laws and Regulations or Changes Thereto or the Imposition of New Ones May Negatively Affect Our Operations and Revenue.”
Additional Rights for Audiences. Among others, the LFTR imposes new obligations on concessionaires. On November 29, 2016, IFT issued the
Guidelines for the Defense of the Audiences, which were published on December 21, 2016, in the Federal Official Gazette. These guidelines and some
related provisions of the LFTR were constitutionally challenged by the Executive Branch and the Senate particularly for concerns that they restrict freedom
of speech. These procedures were dismissed by the Supreme Court of Justice by the entry into force of the reform of the LFTR published in the Official
Gazette on October 31, 2017 (the “LFTR 2017 Reform”). The amendment to the LFTR includes among other things: (i) restricts the power of the IFT to
regulate a large portion of the provisions established by the Guidelines for the Defense of the Audience; (ii) increases the ability of all broadcasting and
telecommunications concessionaries to self-regulate themselves by granting them the ability to regulate their programming content and the way in which
they decide to respect and promote the rights of the audiences through their code of ethics without being subject to IFT’s approval; (iii) removes the
obligation to make sure that, when broadcasting news, the reporting of factual material is clearly distinguished from commentaries and personal analysis;
and (iv) makes clear that the appointment of an Ombudsman is not subject to special specifications and procedures set by IFT. As a result, the legal
provisions that are contrary to this amendment were repealed.
The LFTR 2017 Reform was challenged through actions for constitutional review (acciones de constitucionalidad), which were resolved in August
2022 by the Supreme Court of Justice, overriding the LFTR 2017 Reform, subsisting the Congress’ authority to legislate again on Rights for Audiences. In
addition, two associations and other persons filed two amparo suits challenging some provisions of the LFTR 2017 Reform. As a result of one of such
proceedings, the courts ordered the repeal of the amendment of article 256 of the LFTR 2017 Reform, and the IFT has the authority to determine a date for
entering into force of the General Guidelines on Rights for Audiences dated December 21, 2016, or to issue new guidelines. The Company’s entities that
are concessionaires challenged the decision to repeal the LFTR 2017 Reform. Lastly, on February 5, 2025, in compliance with the court ruling resulting
from the amparo proceedings filed by the associations mentioned above, the IFT published in the Official Gazette of the Federation the new Guidelines for
the Defense of the Audiences, establishing the current Rights of Audiences and set obligations for Broadcasting Concessionaires, Pay-TV Concessionaires,
and Programmers, which include (i) having a Code of Ethics, registering it with the IFT, and publishing it; and (ii) having an Audience Ombudsman with
minimum requirements and registering them with the IFT as well.
Government Broadcast Time. Each concessionaire is required to transmit each day, free of charge, up to 30 minutes of programming promoting
cultural, educational, family counseling and other social matters, using programming provided by the Mexican government.
In addition, television stations have to provide to the Mexican government up to 18 minutes per day of the television broadcast time between 6:00 a.m.
and midnight, in each case distributed in an equitable and proportionate manner. Any time not used by the Mexican government on any day is forfeited.
Generally, the Mexican government uses all or substantially all of the broadcast time available to it under this tax.
In April 2020, the President of Mexico issued a decree amending the rules on government broadcast time starting on May 2020. For the periods where
no electoral pre-campaigns and campaigns are in place, television stations will have to provide to the Mexican government up to 11 minutes per day of
television broadcast time between 6:00 am and midnight, in each case distributed in a proportionate manner. Another significant difference is that under the
terms of the prior rules the unused minutes by the government were forfeited and could be used by the broadcasters, while in the new decree, the Secretaría
de Gobernación, or Mexican Ministry of Interior, may reassign the unused minutes for the use by the Mexican government for an indefinite term.
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Foreign Ownership. Non-Mexican ownership of shares of Mexican enterprises is restricted in some economic sectors, including broadcast television,
and radio. As a result of the Telecom Reform, the participation of foreign investors can be up to 49% in free to air radio and television concessions, subject
to reciprocity requirements, and up to 100% in telecommunications services and satellite communications. Such amendments are reflected in the LFTR and
Mexico’s Ley de Inversión Extranjera, or Foreign Investment Law, and the Reglamento de la Ley de Inversión Extranjera y del Registro Nacional de
Inversiones Extranjeras, or the Regulation of the Foreign Investment Law and the Foreign Investment National Registry. The Foreign Investment Law does
not restrict foreign investment in programmers such as TVSA that make their programming channels available through free to air television. See “—
Satellite Communications—Mexican Regulation of DTH Satellite Services”.
Mexican Electoral Amendment
In 2007, the Mexican Federal Congress published an amendment to the Mexican Constitution (referred to in this annual report as the 2007
Constitutional Amendment), pursuant to which, among other things, the Instituto Federal Electoral, or the Federal Electoral Institute, or IFE, has the
exclusive right to manage and use the Official Television Broadcast Time (referred to in this annual report as Official Broadcast Time). In February 2014,
the Mexican Federal Congress approved a Constitutional amendment creating the Instituto Nacional Electoral, or the National Electoral Institute, or INE,
which replaced the IFE. The INE has the same functions and capabilities as the former IFE and regulates the services of television in the same manner,
except that the INE has a relevant participation in the electoral campaigns in federal, state and local procedures by distributing the Official Broadcast Time
among the political parties. The INE has the exclusive right to use the Official Broadcast Time for its own purposes and for the use of political parties in
Mexico (as provided in the Mexican Constitution) for self-promotion and, when applicable, to promote their electoral campaigns during election day, pre-
campaign and campaign periods.
The INE and the political parties must comply with certain requirements included in the 2007 Constitutional Amendment for the use of Official
Broadcast Time. During federal electoral periods, the INE will be granted, per the 2007 Constitutional Amendment, 48 minutes per day in each radio
station and television channel, to be used during pre-campaign periods in two and up to three minutes per broadcast hour in each radio station and
television channel, of which all the political parties will be jointly entitled to use one minute per broadcast hour. During campaign periods, at least 85% of
the 48 minutes per day, shall be allocated among the political parties, and the remaining 15% may be used by the INE for its own purposes. During non-
electoral periods, the INE will be assigned with up to 12% of the Official Broadcast Time, half of which shall be allocated among the political parties. In
the event that local elections are held simultaneously with federal elections, the broadcast time granted to the INE shall be used for the federal and the local
elections. During any other local electoral periods, the allocation of broadcast time will be made pursuant to the criteria established by the 2007
Constitutional Amendment and as such criteria are reflected in applicable law.
In addition to the foregoing, pursuant to the 2007 Constitutional Amendment political parties are forbidden to purchase or acquire advertising time
directly or through third parties, from radio or television stations; likewise, third parties shall not acquire advertising time from radio or television stations
for the broadcasting of advertisements which may influence the electoral preferences of Mexican citizens, nor in favor or against political parties or
candidates to offices elected by popular vote.
Telecom Reform and Broadcasting Regulations
On June 12, 2013, the Telecom Reform came into force. The Telecom Reform, the LFTR and secondary regulations issued by the President and IFT, as
applicable, and certain actions recently taken by IFT, an organization with constitutional autonomy responsible for overseeing the radio and television
broadcasting industries and telecommunications, including all aspects of economic competition, affect or could significantly and adversely affect our
business, results of operations and financial position. See “Key Information—Risk Factors—Risk Factors Related to Mexico—The Amendment of Various
Provisions of the Mexican Constitution Related to Telecommunications, and the LFTR, May Significantly and Adversely Affect the Business, Results of
Operations and Financial Results of Some of Our Business Segments”.
The Telecom Reform created two regulatory bodies that are independent from the executive branch of government: COFECE (which assumed the
functions of the former Mexican Antitrust Commission, except in the areas of telecommunications and broadcasting (television and radio)) and IFT (which
oversees the Mexican telecommunications and broadcasting (television and radio) industries, including all antitrust matters relating to those industries). In
addition, specialized federal courts empowered to review all rulings, actions and omissions of these independent regulatory bodies were created. No stay or
injunction will suspend any measure or action taken by these regulatory bodies. Therefore, subject to limited exceptions, until any decision, action or
omission by these regulatory bodies is declared void by a competent court through a binding and final judgment, COFECE’s or IFT’s decision, action or
omission will be valid and will have full force and legal effect.
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IFT is empowered, among other things, to (i) oversee the Mexican telecommunications (including cable and satellite pay-TV) and broadcasting
(television and radio) industries, including all antitrust matters related to these industries; (ii) set limits to national and regional frequencies that can be
exploited by a concession holder, or to the cross-ownership of telecommunications, television or radio businesses that serve the same market or
geographical zone that may include the divestment of certain assets to comply with such limits; (iii) issue asymmetric regulation; (iv) grant and revoke
telecommunications, television and radio concessions; (v) approve any assignment or transfer of control of such concessions; (vi) revoke a concession for
various reasons, including in the case of a breach by a concessionaire of a non-appealable decision confirming the existence of illegal antitrust conduct
(“practica monopólica”); and (vii) determine the payment to be made to the government for the granting of concessions.
Due to the Constitutional Amendment, COFECE and IFT’s competition-related functions will be transferred to a newly created antitrust agency, which,
although decentralized from the Executive Branch, will have legal status, its own budget, and technical and operational independence in its decisions,
organization, and operation. Additionally, the separation between the investigative and adjudicative authorities will be maintained. All non-antitrust
functions previously handled by the IFT will now fall under the jurisdiction of the Ministry of Infrastructure, Communications, and Transportation. The
dissolution of IFT and COFECE is subject to the issuance of the relevant secondary regulation, which is still pending and uncertain.
Concessions for the use of spectrum will only be granted through public bid processes. On March 7, 2014, IFT published in the Official Gazette of the
Federation an invitation to a public auction for the concession for the two National Digital Networks which would be granted for a term of 20 years for the
operation of stations with, among other characteristics, mandatory geographic coverage in 123 locations corresponding to 246 channels within the Mexican
territory.
In March 2015, IFT issued its ruling announcing Grupo Radio Centro and Imagen Television as winning bidders for two free to air broadcasting
licenses with separate national coverage. Imagen Television has completed the process and received its license. However, since Grupo Radio Centro failed
to pay the amount they bid for their free to air broadcasting license, the IFT’s ruling announcing them as a winning bidder was declared null and void and
they will not receive the license. As a result, the auction of the portion of the spectrum that was going to be assigned to Grupo Radio Centro took place
during 2017. The new bid was for 148 channels for Digital Terrestrial Television, including at least 123 channels that were not allocated in the IFT-1
bidding process for the two national digital broadcast television networks. At the end of the process, offers were received for 32 channels located in 29
different coverage areas, located in 17 States and covering about 45% of the country’s total population. The bidding process concluded in December 2017
with the issuance of the corresponding concession titles in favor of Compañía Periodística Sudcaliforniana, S.A. de C.V., Comunicación 2000, S.A. de C.V.,
Francisco de Jesús Aguirre Gómez, Intermedia de Chihuahua, S.A. de C.V., José Guadalupe Manuel Trejo García, Multimedios Televisión, S.A. de C.V.,
Quiero Media, S.A. de C.V., Radio Comunicación Gamar, S.A. de C.V., Radio Operadora Pegasso, S.A. de C.V., Radio-Televisión de Nayarit, S.A. de C.V.,
Tele Saltillo, S.A. de C.V., Televisión Digital, S.A. de C.V. and Telsusa Televisión México, S.A. de C.V. See “Key Information—Risk Factors—Risk
Factors Related to Mexico—The Amendment of Various Provisions of the Mexican Constitution Related to Telecommunications, and the LFTR, May
Significantly and Adversely Affect the Business, Results of Operations and Financial Results of Some of Our Business Segments.”
Access to information and communication technologies, as well as broadcasting and telecommunications services (including broadband), is established
as a constitutional right. The Telecom Reform further requires that such information be diverse and timely, and that any person may search, receive and
disclose information and ideas of any kind through any media. Among other things, the LFTR contemplates the right of audiences to be able to receive
content that reflects ideological pluralism, and to have the right to replicate the news.
The Telecom Reform permits 100% foreign ownership in satellite and telecommunications services concessions and increases to up to 49% the level of
permitted foreign ownership in television and radio services concessions, subject to reciprocity of the originating foreign investment country. The Foreign
Investment Law does not restrict foreign investment in programmers such as TVSA that make their programming channels available through free to air
television.
As a result of the Telecom Reform and LFTR, starting on September 10, 2013, concessionaries of broadcast services have been required to permit pay-
TV concessionaries to retransmit broadcast signals, free of charge and without discrimination, within the same geographic coverage area simultaneously
and without modifications, including advertising, and with the same quality of the broadcast signal, except in certain specific cases provided in the Telecom
Reform. Also, since September 10, 2013, our pay-TV licensees are required to retransmit broadcast signals of others, free of charge and on a non-
discriminatory basis, subject to certain exceptions and additional requirements provided for in the Telecom Reform.
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On February 27, 2014, the Guidelines were published in the Official Gazette of the Federation, which include, among other obligations, the obligation
of concessionaries of broadcast television licenses to permit the retransmission of their broadcast signals and the obligation of pay-TV concessionaries to
allow such retransmission (without requiring the prior consent of the broadcast television concessionaries) in the same geographic coverage zone for free
(subject to certain exceptions) and in a non-discriminatory manner in its entirety, simultaneously and without modifications by the broadcasting
concessionaire, including advertising, and with the same quality of the broadcast signal without requiring consent from the broadcast television
concessionaries.
The Telecom Reform calls for the National Development Plan. The National Development Plan includes a program for installing broadband
connections in public facilities, which would identify the number of sites to be connected per year to promote access to broadband in public buildings
dedicated to investigation, health, education, social services and in other facilities owned by the government. See “Key Information—Risk Factors—Risk
Factors Related to Mexico—The Amendment of Various Provisions of the Mexican Constitution Related to Telecommunications, and the LFTR, May
Significantly and Adversely Affect the Business, Results of Operations and Financial Results of Some of Our Business Segments”.
The LFTR establishes a renewal procedure that would result in the granting of a renewal of an integrated sole concession (when involving radio-
electric spectrum or orbital resources, a concession to exploit such spectrum is required) in order to provide telecommunications and broadcasting services.
The integrated sole concession would be awarded for renewable 30-year terms. Renewal of integrated sole concessions require, among others: (i) to request
its renewal to IFT within the year prior to the last fifth period of the fixed term of the related concession; (ii) to be in compliance with the concession
holder’s obligations under the LFTR, other applicable regulations, and the concession title; and (iii) the acceptance by the concession holder of any new
conditions for renewing the concession as set forth by IFT. IFT shall resolve any request for renewal of the concessions within 180 business days of its
request. Failure by IFT to respond within such period of time shall be interpreted as if the request for renewal has been granted.
The LFTR also contemplates that concession holders that operate a public network of telecommunications must: (i) abstain from charging long
distance fees for calls made by users to any national destination; (ii) if there was no other concession holder providing similar services in a certain territory,
the concession holder providing the service in such territory shall have to continue providing the services; and (iii) concession holders must adopt the open
architecture designs for the network to guarantee the interconnection and interoperation of their network.
The LFTR establishes the maximum amount of time that a concession holder providing broadcasting services with commercial purposes can use for
commercial advertising. The maximum amount of advertising time is set at 18% of the total broadcasting time for each television channel (such percentage
may be increased as described in “—Television—Mexican Television Regulations—Restrictions on Advertising”).
The LFTR establishes that those concession holders providing broadcasting services shall offer broadcasting services and advertising spaces to any
person or corporation that requires them on a non-discriminatory basis and on market terms granting the terms, packages, conditions, and rates in force at
the time of the request. Additionally, the law provides that balance shall be maintained between advertising and programming. Advertising shall be subject
to several rules, including the maximum time allowed for advertising (i.e. 18% of the total available time per channel in free to air television; and six
minutes per hour on pay-television and audio). However, in free to air television, the time allowed for advertising can be increased by an additional 2%
when at least 20% of the content aired is national production. Another 5% of advertisement time can be added when at least 20% of the content aired is
independent national production. There are no restrictions on maximum rates.
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Significant Subsidiaries
The table below sets forth our significant subsidiaries and significant investee as of December 31, 2024.
Jurisdiction of
Organization or
Percentage
Name of Significant Subsidiary
Incorporation
Ownership(1)
Cable segment:
Corporativo Vasco de Quiroga, S.A. de C.V. (CVQ) (3)
Mexico
100.0 %
Cablestar, S.A. de C.V. (2) (4)
Mexico
66.4 %
Empresas Cablevisión, S.A.B. de C.V. (5) (6)
Mexico
51.5 %
Cablemás subsidiaries (7)
Mexico
100.0 %
Televisión Internacional, S.A. de C.V. (6)
Mexico
100.0 %
Sky segment:
Sky DTH, S.A. de C.V. (8)
Mexico
100.0 %
Innova Holdings, S. de R.L. de C.V. (8)
Mexico
100.0 %
Innova, S. de R.L. de C.V. (Innova)(9)
Mexico
100.0 %
Other corporate operations:
Multimedia Telecom, S.A. de C.V. (10)
Mexico
100.0 %
Grupo Telesistema, S.A. de C.V. (11)
Mexico
100.0 %
Significant Investee:
TelevisaUnivision, Inc.(TU) (10)
United States of
America
43.0 %
(1)
Percentage of equity owned by us directly or indirectly through subsidiaries.
(2)
While this subsidiary is not a significant subsidiary within the meaning of Rule 1-02(w) of Regulation S-X under the Securities Act, we have included
it in the table above to provide a more complete description of our operations.
(3)
Direct subsidiary through which we conduct the operations of our Cable segment and parent company of Innova.
(4)
Cablestar, S.A. de C.V., is an indirect majority-owned subsidiary of CVQ and Empresas Cablevisión, S.A.B. de C.V.
(5)
Subsidiary through which we own our equity interest in Cablevisión, S.A. de C.V.
(6)
One of two indirect subsidiaries through which, together with the Cablemás subsidiaries, we conduct the operations of our Cable segment.
(7)
The Cablemás subsidiaries are directly or indirectly owned by CVQ.
(8)
One of two subsidiaries through which we own our equity interest in Innova.
(9)
Indirect subsidiary through which we conduct the operations of our Sky segment.
(10) TelevisaUnivision, Inc. has been included as a significant investee pursuant to Rule 3-09 of Regulation S-X. The Company and its subsidiary
Multimedia Telecom, S.A. de C.V. directly own shares in the capital stock of TelevisaUnivision, Inc.
(11) Direct subsidiary, which carries out certain corporate operations of the Company.
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Property, Plant and Equipment
Broadcasting, Office and Production Facilities. Our properties consist primarily of broadcasting, production facilities, television and repeater
stations, technical operations facilities, workshops, studios and office facilities, most of which are located in Mexico. Some of these properties are currently
leased to TelevisaUnivision or its subsidiaries as part of the TelevisaUnivision Transaction. We own most of our properties or lease offices and facilities
through indirect wholly owned and majority owned subsidiaries. There are no major encumbrances on any of our properties and we currently do not have
any significant plans to construct any new properties or expand or improve our existing properties.
Our principal offices, which we own, are located in Santa Fe in Mexico City.
Our cable television and Mexican DTH satellite service businesses are located in Mexico City.
As of December 31, 2024, our properties represented approximately 4.49 million square feet of space, of which over 3.35 million square feet are
located in Mexico City and the surrounding areas, and approximately 0.64 million square feet are located outside of Mexico City and the surrounding areas.
We currently own approximately 4.49 million square feet of space, 2.27 of which are leased to TelevisaUnivision, including the television stations, four
locations in Mexico City, 14 studios in San Angel, three studios in Santa Fe and one studio in Rojo Gomez, and 12 studios located in Chapultepec. We also
own other properties used in connection with our operations, including a training center, technical operations facilities, studios, workshops, television and
repeater stations, and office facilities, part of which are leased to TelevisaUnivision or its subsidiaries. We also own or lease over a total of 31,509 square
feet in properties in the United States, Latin America, Spain and Switzerland in connection with our operations there. We own or lease all of these
properties through indirect wholly owned and majority owned subsidiaries. The following table summarizes our real estate and lease agreements in the
United States, Latin America, Spain and Switzerland.
Number of
Operations
Properties
Location
Television and news activities
Leased properties
5
Madrid, Spain(3)
Castellón, Spain(1)
Zug, Switzerland(1)
Publishing activities
DTH
Leased properties
7
San José, Costa Rica(1)
Guatemala(1)
Nicaragua(1)
Panamá(1)
San Salvador(1)
Honduras(1)
Dominican Republic(1)
Telephony
Leased properties
3
San Antonio, Texas(2)
Laredo, Texas(1)
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Satellites. We currently use transponder capacity on ten satellites: Eutelsat 117 West A (formerly Satmex 8), which reaches Mexico, the United States,
Latin America, and the Caribbean; Eutelsat 115 West A (formerly Satmex 5), which reaches Mexico, the United States and Latin America; IS-34, which
reaches North America, Western Europe, Latin America and the Caribbean; we performed a migration from Galaxy 16 (formerly Galaxy IVR) to Galaxy
35, which reaches Mexico, the United States and Canada; Galaxy 19, which reaches Mexico, the United States and Canada; we migrated back to Intelsat
IS-35e from Eutelsat E9B, which reaches Western and Eastern Europe; SES-14 (formerly NSS-806), which reaches North America, Western Europe, Latin
America and the Caribbean; IS-21, which reaches Central America, Mexico, the Southern United States and the Caribbean; IS-16, which reaches Central
America, Mexico, the Southern United States and the Caribbean; and SM-1, which reaches Central America, Mexico, the Southern United States and the
Caribbean. In March 2010, Sky reached an agreement with a subsidiary of Intelsat to lease 24 transponders on the Intelsat IS-21 satellite which is mainly
used for signal reception and retransmission services over the satellite’s estimated 15-year service life. IS-21 started service in the third quarter of 2012,
replacing Intelsat IS-9 as Sky’s primary transmission satellite. In April 2010, Intelsat released the IS-16 satellite, where Sky has an additional twelve
transponders to deliver new DTH-HD channels and more DTH SD channels; this satellite is also a back-up satellite for our DTH venture operations. For a
description of guarantees related to our DTH venture transponder obligations, see Note 14 to our consolidated year-end financial statements.
Since 1996, we have been working with PanAmSat (now Intelsat) as our satellite services provider, which provided to the Company five Ku band
transponders on Satellite PAS-3R, three of which were intended to be for DTH to Spain. We were required to pay an annual fee for each transponder of
U.S.$3.1 million. Due to an exchange with three of five 54 MHz Ku Band transponders, until April 2, 2016, we had capacity on two 36 MHz C band
transponders on Galaxy 16.
In December 2005, we signed an extension with PanAmSat, for the use of three transponders on the PAS-3R satellite until 2009 and 2012 and two
transponders on the Galaxy IVR (replaced by Galaxy 16) satellite until 2016. In October 2015, we signed a new contract with SES S.A. until June 2019 for
the replacement of two transponders of Galaxy 16. The new contract included three transponders and a full-service migration to the new satellite, AMC-9.
On June 17, 2017, AMC-9 experienced a technical issue that impacted the satellite and thus, we entered into a new contract until June 30, 2022 to transition
the full service of 147 MHz to Intelsat’s satellites, Galaxy 16 and Galaxy 19. In December 2021, we renegotiated and renewed the contracts for the four
transponders (147MHz) with Intelsat, which expire on June 30, 2026. In February 2024, the impact of 5G technology in the U.S. forced us to make an early
negotiation of the service contracts on the Intelsat satellites Galaxy 16 and Galaxy 19, allowing us to migrate the four transponders to satellite Galaxy 35
and Galaxy 19 on frequencies not affected by 5G, until February 2030.
In February 2007, Intelsat renamed some of its satellite fleet acquired with its 2006 merger with PanAmSat: current names for PAS-9 and PAS-3R are
IS-9 and IS-3R, respectively. Intelsat kept the name of Galaxy 16. In December 2007, Sky and Sky Brasil reached an agreement with Intelsat Corporation
and Intelsat LLC to build and launch a new 24-transponder satellite, IS-16, for which service will be dedicated to Sky and Sky Brasil over the satellite’s
estimated 15-year life. The satellite was successfully launched in February 2010 and started operations in April 2010. In the third quarter of 2013, Sky
entered into an agreement with DirecTV for the acquisition and launch of the SM-1 satellite, which was successfully launched in May 2015 and started
operations on June 2015. See Note 12 to our consolidated year-end financial statements.
In August 2009, the contract on two remaining transponders of the IS-3R satellite expired (end of life of the satellite). We negotiated a new contract for
the transponder on the IS-905 satellite until August 31, 2015, for the distribution of our content in Europe. In September 2015, the contract was renewed
with Intelsat until August 2018. Migration from IS-905 to IS-35e took place from June to August 2018, and we renewed the contract with Intelsat from
November 1, 2018 until October 31, 2021. We negotiated a new contract with Eutelsat and migrated from IS-35e to Eutelsat E9B. The new contract expired
on December 31, 2024. We negotiated a new contract with Intelsat and migrated from Eutelsat E9B to IS-35e. The new contract will expire on December
31, 2027.
We have renewed the contract with satellite IS-34 until November 30, 2025. IS-11 (formerly known as PAS-11) ended its life in November 2022. The
migration between IS-11 to satellite IS-34 started on August 1, 2022 and ended on November 30, 2022.
In February 2012, we renewed the contract with Satélites Mexicanos, S.A. de C.V., or Satmex, on Satmex 5 until January 31, 2015. In March 2014,
Satélites Mexicanos, S.A. de C.V. was renamed Eutelsat Americas, as a part of Eutelsat Group. In February 2015, we renewed our contracts with Eutelsat
Americas until January 2018, and also contracted for a new transponder on Eutelsat 117 West A from April 2015 until March 2018. In February and April
2018, we renewed our contracts with Eutelsat America until December 2022. In January 2019, we contracted for a new transponder on Eutelsat 117 West A
from January 2019 until December 2021. In August 2020, we renegotiated and renewed the contracts for the three transponders with Eutelsat America until
December 2024. In October 2024, we negotiated a new contract for only two transponders with Eutelsat America (Satelites Mexicanos S.A. de C.V.) until
December 31, 2027.
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On March 1, 2002, we contracted a half Ku Band transponder on Satmex Solidaridad II until April 30, 2005, On May 1, 2005, the contract was
renewed with Satmex until April 2006. On May 1, 2006, the contract was renewed with Satmex until December 2008. On January 1, 2009, the contract was
renewed with Satmex until December 31, 2011. On January 1, 2012, the contract was renewed with Satmex until December 31, 2014. the Eutelsat Group
completed the acquisition of the Mexican company Satmex. Since March 2014, the company operates under the name Eutelsat Americas. On January 1,
2015, the contract was renewed with Eutelsat Americas E117WA until December 31, 2017. On January 1, 2018, the contract was renewed with Eutelsat
Americas E115WA until March 14, 2020. On March 15, 2020, the contract was renewed with Eutelsat America until March 14, 2023. On March 15, 2023,
the contract was renewed with Eutelsat America until March 14, 2026.
On November 15, 2016, we contracted a half transponder on SES NSS-806 until January 31, 2018. On September 5, 2018, SES NSS-806 was replaced
with SES-14 and the contract was renewed with SES until January 31, 2019. On February 1, 2019, the contract with SES was renewed until January 31,
2020. In this renewal, the bandwidth was decreased from 18 MHz to 6 MHz. On February 1, 2020, the contract was renewed with SES until January 31,
2021. On February 1, 2021, the contract was renewed with SES until January 31, 2022. The bandwidth remained at 6 MHz. This contract was renewed with
SES until January 31, 2024, with the bandwidth under the contract remaining at 6 MHz. This contract was renewed with SES until January 31, 2025, with
the bandwidth under the contract remaining at 6 MHz. This contract was renewed with SES until January 31, 2026, with the bandwidth under the contract
remaining at 6 MHz.
With several new domestic and international satellites having been launched recently, and with several others scheduled for launch in the next few
years, including those scheduled for launch by Intelsat, Eutelsat Americas (formerly Satmex) and SES, we believe that we will be able to secure satellite
capacity to meet our needs in the future, although no assurance can be given in this regard.
Insurance. We maintain comprehensive insurance coverage for our offices, equipment, transmission lines networks and other property for risks
including fire, earthquake, flooding, storm, and other similar events and the resulting business interruption losses, subject to some limitations. In addition,
we maintain a cyber-insurance policy that covers certain types of cyber-related losses. We do not maintain insurance for our DTH business in case of loss
of satellite transmission. We cannot provide any assurance that our insurance coverage is sufficient to cover any losses that we may sustain, or that we will
be able to successfully claim our losses under our insurance policies on a timely basis or at all. If we incur any loss not covered by our insurance policies,
or the compensated amount is significantly less than our actual loss or is not timely paid, our business, financial condition and results of operations could
be materially and adversely affected.
Item 5. Operating and Financial Review and Prospects
You should read the following discussion together with our consolidated year-end financial statements and the accompanying notes, which appear
elsewhere in this annual report. This annual report contains forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could
differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to these differences include, but are not
limited to, those discussed below and elsewhere in this annual report, particularly in “Key Information—Risk Factors”. See “Key Information—Forward-
Looking Statements and Risk Factors Summary” for further discussion of the risks and uncertainties inherent in forward-looking statements. In addition to
the other information in this annual report, investors should consider carefully the following discussion, and the information set forth under “Key
Information—Risk Factors” before evaluating us and our business.
TelevisaUnivision Transaction
On January 31, 2022, we and Univision Holdings, Inc., or UHI, announced the closing of the TelevisaUnivision Transaction with Univision and, for
the limited purposes set forth in the 2021 Transaction Agreement, affiliates of Searchlight, ForgeLight and Liberty Global, pursuant to which, among other
things, we contributed our former Content business segment (other than certain assets relating to our news business, real estate and Mexican over-the-air
broadcast concessions) to UHI.
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In consideration for the contribution of our former Content business, we received approximately U.S. $4.5 billion in a combination of cash (U.S. $3.0
billion) and U.S. $1.5 billion of common and preferred shares of TelevisaUnivision excluding post-closing adjustments. Additionally, as part of the
TelevisaUnivision Transaction, we received consideration of Ps.940 million for the transfer of rights of news content production to a related party other
than TelevisaUnivision. As of March 31, 2025, we owned a 42.6% equity interest in TelevisaUnivision on an as-converted basis (excluding unvested and/or
unsettled stock, restricted stock units and options). Our investment in TelevisaUnivision is currently held in the form of shares of common stock and
convertible preferred stock. The value of the common stock and preferred stock of TelevisaUnivision, neither of which are publicly traded, will fluctuate
and could materially increase or decrease the value of our investment.
As a result of the closing of the TelevisaUnivision Transaction, our cash and cash equivalents increased by U.S.$3.0 billion, and our investment in
common and preferred shares of TelevisaUnivision increased by U.S.$1.5 billion. In addition, during the first quarter of 2022, we recognized: (i) a
preliminary consideration of U.S.$3.0 billion in cash, U.S.$750 million in Class A common stock of TelevisaUnivision, and U.S.$750 million in Series B
participating preferred stock of TelevisaUnivision, with an annual cumulative dividend of 5.5%; (ii) a preliminary income from discontinued operations in
the amount of Ps.54,765.4 million, net of income taxes; and (iii) an increase in our share in TelevisaUnivision from 35.5% to 44.6% on an as-converted
basis (excluding unvested and/or unsettled stock, restricted stock units and options). Also, beginning in the first quarter of 2022, we began to present the
results of our disposed businesses as discontinued operations in our consolidated statements of income for any prior period presented for comparative
purposes and for the period of one month ended January 31, 2022. These effects were partially offset in our consolidated statement of income by a
reduction in our consolidated operating income resulting primarily from the disposal of our former Content business segment. As a result of the closing of
the TelevisaUnivision Transaction, we no longer consolidate the results of our former Content business segment.
Spin-off of Certain Businesses of Our Other Businesses Segment
On October 27, 2022, our Board of Directors approved a proposal to spin-off most of the businesses of our former Other Businesses segment (the
“Spun-off Businesses”), which was approved by our shareholders at the meeting held on April 26, 2023.
This proposal was carried out through a spin-off, which became effective on January 31, 2024, creating Ollamani, which holds the Spun-off Businesses
and, at the time of the Spin-off, had the same shareholding structure as the Company. We and Ollamani obtained all required corporate and regulatory
authorizations and Ollamani began trading separately fom the Company on the Mexican Stock Exchange on February 20, 2024. The businesses of Cable
and Sky, our investment in TelevisaUnivision, broadcasting concessions and infrastructure, as well as other assets and real estate related to these businesses,
remained in the Company.
Preparation of Financial Statements
As required by regulations issued by Comisión Nacional Bancaria y de Valores, or the Mexican Banking and Securities Commission (“CNBV”), for
listed companies in Mexico, our financial information is presented in accordance with the IFRS Accounting Standards as issued by the IASB for financial
reporting purposes.
As a result of the TelevisaUnivision transaction, which was closed on January 31, 2022, the results of our former Content segment, as well as the
Feature Film Distribution business, which was previously classified in our former Other Businesses segment, were presented as part of discontinued
operations in our consolidated financial statements for the period of one month ended January 31, 2022. Accordingly, these operations are not presented in
this annual report as part of the information by segments.
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64
Our consolidated financial statements for the years ended December 31, 2024, 2023, and 2022 have been prepared to present the discontinued
operations following the Spin-off effective on January 31, 2024. Accordingly, our consolidated financial statements for the years ended December 31, 2023
and 2022 have been re-presented from those we originally reported, to present in those years the results from discontinued operations of the Spun-Off
Businesses.
Year Ended December 31,
2024
2023
2022
(Millions of Pesos)(1)
Revenues
Ps.
62,260.9
Ps.
66,222.8
Ps.
68,615.8
Cost of revenues
41,117.1
43,297.4
43,357.7
Selling expenses
8,815.2
8,848.2
9,155.4
Administrative expenses
10,592.6
11,305.6
11,341.8
Other expense, net
(4,554.9)
(913.8)
(1,023.2)
Operating (loss) income
(2,818.9)
1,857.8
3,737.7
Finance expense, net
4,695.1
4,845.9
9,256.4
Share of loss of associates and joint ventures, net
(182.6)
(4,086.6)
(7,378.2)
Income tax (expense) benefit
(688.6)
(2,360.7)
1,352.9
Net loss from continuing operations
(8,385.2)
(9,435.4)
(11,544.0)
Income from discontinued operations, net
56.8
628.1
56,827.8
Net (loss) income
(8,328.4)
(8,807.3)
45,283.8
Net (loss) income attributable to non-controlling interests
(62.9)
(384.6)
571.6
Net (loss) income attributable to stockholders of the Company
Ps.
(8,265.5)
Ps.
(8,422.7)
Ps.
44,712.2
(1)
Certain data set forth in the table above may vary from the corresponding data set forth in our consolidated statements of income for the years ended
December 31, 2024, 2023 and 2022 included in this annual report due to differences in rounding.
Results of Operations
For segment reporting purposes, our consolidated cost of revenues, selling expenses and administrative expenses for the years ended December 31,
2024, 2023 and 2022 exclude corporate expenses and depreciation and amortization, which are presented as separate line items. The following table sets
forth the reconciliation between our operating segment income and the consolidated operating income according to IFRS Accounting Standards:
Year Ended December 31,
2024
2023
2022
(Millions of Pesos)(1)
Revenues
Ps.
62,260.9
Ps.
66,222.8
Ps.
68,615.8
Cost of revenues(2)
24,761.5
25,781.1
26,165.5
Selling expenses(2)
8,654.8
8,610.6
8,801.5
Administrative expenses(2)
5,841.7
6,921.0
6,826.1
Intersegment operations(3)
155.0
120.4
98.9
Operating segment income
23,157.9
25,030.5
26,921.6
Corporate expenses
(756.0)
(1,031.2)
(1,346.5)
Depreciation and amortization
(20,510.9)
(21,107.3)
(20,715.3)
Other expense, net
(4,554.9)
(913.8)
(1,023.2)
Intersegment operations(3)
(155.0)
(120.4)
(98.9)
Operating (loss) income
Ps.
(2,818.9)
Ps.
1,857.8
Ps.
3,737.7
(1)
Certain data set forth in the table above may vary from the corresponding data set forth in our consolidated statements of income for the years ended
December 31, 2024, 2023 and 2022 included in this annual report due to differences in rounding.
(2)
Excluding corporate expenses and depreciation and amortization.
(3)
Intersegment operations related to intercompany leases were not eliminated on the Operating Segment Income level.
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65
The following table sets forth our segment revenues data for the indicated periods as a percentage of total segment revenues:
Year Ended December 31,(1)
Segment Revenues
2024
2023
2022
Cable
75.6 %
73.5 %
70.4 %
Sky
24.4
26.5
29.6
Total segment revenues
100.0 %
100.0 %
100.0 %
Intersegment operations
(0.7)
(0.2)
(0.2)
Total consolidated revenues
99.3 %
99.8 %
99.8 %
The following table sets forth our consolidated operating income as a percentage of our total consolidated revenues:
Year Ended December 31,(1)
2024
2023
2022
Revenues
Cost of revenues(2)
39.8 %
38.9 %
38.2 %
Selling expenses(2)
13.9
13.0
12.8
Administrative and corporate expenses(2)
10.6
12.0
11.9
Depreciation and amortization
32.9
31.9
30.2
Other expense, net
7.3
1.4
1.5
Consolidated operating (loss) income
(4.5)
2.8
5.4
Total consolidated revenues
100.0 %
100.0 %
100.0 %
(1)
Certain segment data set forth in these tables may vary from the corresponding data set forth in our consolidated year-end financial statements due to
differences in rounding. The segment revenues and total segment revenues data set forth in this annual report include revenues from intersegment
operations in all periods presented. See Note 26 to our consolidated year-end financial statements.
(2)
Excluding depreciation and amortization.
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66
Summary of Business Segment Results
The following tables set forth the revenues and operating segment income of each of our reportable business segments and intersegment operations,
corporate expenses, depreciation and amortization, and other expense, net for the years ended December 31, 2024, 2023 and 2022. Reportable segments are
those that are based on our method of internal reporting to senior management for making operating decisions and evaluating performance of operating
segments, and certain qualitative, grouping and quantitative criteria. As of December 31, 2024, we classified our operations into two business segments:
Cable and Sky.
Year Ended December 31,
2024
2023
2022
(Millions of Pesos)(1)
Segment Revenues
Cable
Ps.
47,393.1
Ps.
48,802.5
Ps.
48,411.8
Sky
15,337.3
17,585.2
20,339.0
Total Segment Revenues
62,730.4
66,387.7
68,750.8
Intersegment Operations(1)
(469.5)
(164.9)
(135.0)
Total Consolidated Revenues
Ps.
62,260.9
Ps.
66,222.8
Ps.
68,615.8
Operating Segment Income
Cable
Ps.
18,485.6
Ps.
19,299.1
Ps.
20,505.3
Sky
4,672.3
5,731.4
6,416.3
Total Operating Segment Income(2)
23,157.9
25,030.5
26,921.6
Corporate Expenses(2)
(756.0)
(1,031.2)
(1,346.5)
Depreciation and Amortization(2)
(20,510.9)
(21,107.3)
(20,715.3)
Other Expense, net
(4,554.9)
(913.8)
(1,023.2)
Intersegment Operations(3)
(155.0)
(120.4)
(98.9)
Consolidated Operating (loss) Income(4)
Ps.
(2,818.9)
Ps.
1,857.8
Ps.
3,737.7
(1)
Certain segment data set forth in these tables may vary from the corresponding data set forth in our consolidated year-end financial statements due to
differences in rounding. The segment revenues and total segment revenues data set forth in this annual report include revenues from intersegment
operations in all years presented. See Note 26 to our consolidated year-end financial statements.
(2)
The total operating segment income data set forth in this annual report do not include corporate expenses, intersegment operations, or depreciation and
amortization in any year presented but are presented herein to facilitate the discussion of segment results.
(3)
Intersegment operations related to intercompany leases were not eliminated on the Operating Segment Income level.
(4)
Consolidated operating income (loss) reflects corporate expenses, depreciation and amortization, other expense, net, and intersegment operations in the
years presented. See Note 26 to our consolidated year-end financial statements.
Preponderant Economic Agent Status
For a discussion of the consequences regarding IFT’s March 6, 2014 decision determining that we, together with other entities with concessions to
provide broadcast television, are preponderant economic agents in the broadcasting sector in Mexico see “Key Information—Risk Factors—Risk Factors
Related to Mexico—The Amendment of Various Provisions of the Mexican Constitution Related to Telecommunications, and the LFTR, May Significantly
and Adversely Affect the Business, Results of Operations and Financial Results of Some of Our Business Segments”. For a discussion regarding the
opportunities and options for us as a result of IFT’s determination that Grupo Carso, S.A.B de C.V., Grupo Financiero Inbursa, S.A.B. de C.V., and other
entities are preponderant economic agents in the telecommunications market in Mexico see “Information on the Company— Business Overview—Business
Strategy—Expanding our Business in the Mexican Telecommunications Markets by Taking Advantage of the Telecom Reform and Implementing
Legislation”.
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67
Results of Operations for the Year Ended December 31, 2024,
Compared to the Year Ended December 31, 2023
Total Segment Results
Revenues
Revenues decreased by Ps.3,961.9 million, or 6.0%, to Ps.62,260.9 million for the year ended December 31, 2024, from Ps.66,222.8 million for the
year ended December 31, 2023. This decrease was mainly due to revenues decline in the Sky and Cable segments.
Cost of Revenues
Cost of revenues decreased by Ps.1,019.6 million, or 4.0%, to Ps.24,761.5 million for the year ended December 31, 2024, from Ps.25,781.1 million for
the year ended December 31, 2023. The decrease mainly reflects lower costs in our Sky segment.
Selling Expenses
Selling expenses increased by Ps.44.2 million, or 0.5%, to Ps.8,654.8 million for the year ended December 31, 2024, from Ps.8,610.6 million for the
year ended December 31, 2023. This increase was primarily attributable to higher selling expenses in our Cable segment, partially offset by a decrease in
selling expenses in our Sky segment.
Administrative and Corporate Expenses
Administrative and corporate expenses decreased by Ps.1,354.5 million, or 17.0%, to Ps.6,597.7 million for the year ended December 31, 2024, from
Ps.7,952.2 million for the year ended December 31, 2023. The decrease mainly reflects lower administrative expenses in the Cable and Sky segments, as
well as a decrease in corporate expenses.
Corporate expenses decreased by Ps.275.2 million, or 26.7%, to Ps.756.0 million in 2024, from Ps.1,031.2 million in 2023. The decrease reflected
primarily a lower share-based compensation expense, as well as a decrease in other non-allocated corporate expenses.
Share-based compensation expense in 2024 and 2023 amounted to Ps.488.8 million and Ps.739.8 million, respectively, and was accounted for as
corporate expense. Share-based compensation expense is measured at fair value at the time the equity benefits are conditionally sold to officers and
employees and is recognized over the vesting period.
Cable
Cable revenues are derived from the provision of cable and telecommunication services, as well as advertising revenues. Revenues relating to pay-TV
services generally consist of monthly subscription fees for basic and premium service packages, fees charged for pay-per-view programming and, to a
significantly lesser extent, monthly rental and one-time installation fees, broadband internet and telephone services subscription. The voice and data
business derives revenues from providing data and long-distance services solutions to carriers and other telecommunications service providers through its
fiber-optic network. Revenues relating to pay-TV advertising consist of revenues from the sale of advertising on certain companies in the Cable segment.
Rates are based on the day and time the advertising is aired, as well as the type of programming in which the advertising is aired. Pay-TV subscription and
advertising rates are adjusted periodically in response to inflation and in accordance with market conditions.
Cable revenues represented 75.6% and 73.5% of our segment revenues for the years ended December 31, 2024, and 2023, respectively, and decreased
by Ps.1,409.4 million, or 2.9%, to Ps.47,393.1 million for the year ended December 31, 2024, from Ps.48,802.5 million for the year ended December 31,
2023.
Total revenue generating units, or RGUs, were about 15.2 million as of December 31, 2024. Total net change for the year ended December 31, 2024,
decreased 207 thousand RGUs, due to a decrease in our services of video and broadband.
Cable operating segment income decreased by Ps.813.5 million, or 4.2%, to Ps.18,485.6 million for the year ended December 31, 2024, from
Ps.19,299.1 million for the year ended December 31, 2023, and the margin reached 39.0%. This decrease was primarily due to lower revenues, partially
offset by a decrease in personnel costs, signal costs and maintenance costs.
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68
The following table sets forth the breakdown of RGUs per service type for our Cable segment as of December 31, 2024, and 2023.
2024
2023
Video
3,846,518
4,059,494
Broadband (data)
5,626,206
5,678,431
Voice
5,382,949
5,351,145
Mobile
333,973
307,807
RGUs
15,189,646
15,396,877
Sky
Sky revenues are primarily derived from program services, activation fees and equipment rental to subscribers, national advertising revenues and
broadband internet services, and telephone services to its subscribers.
Sky revenues represented 24.4% and 26.5% of our segment revenues for the years ended December 31, 2024, and 2023, respectively, and decreased by
Ps.2,247.9. million, or 12.8%, to Ps.15,337.3 million for the year ended December 31, 2024, from Ps.17,585.2 million for the year ended December 31,
2023. This decrease was due to the decrease in the number of video and broadband RGUs for the year ended December 31, 2024.
Total disconnections for the year ended December 31, 2024, were approximately 1,052.7 thousand RGUs. This was mainly driven by the loss of 871.4
thousand video RGUs and 181.2 thousand broadband and mobile net disconnections. In addition, Sky closed the year 2024, with 97,809 video RGUs in
Central America and the Dominican Republic.
The following table sets forth the breakdown of RGUs per service type for Sky as of December 31, 2024, and 2023.
2024
2023
Video
4,696,038
5,567,426
Broadband (data)
350,885
515,089
Voice
197
344
Mobile
15,501
32,502
RGUs
5,062,621
6,115,361
Sky operating segment income decreased by Ps.1,059.1 million, or 18.5%, to Ps.4,672.3 million for the year ended December 31, 2024, from
Ps.5,731.4 million for the year ended December 31, 2023, and the margin totaled 30.5%. This decrease in the operating segment income was due to the
lower revenue, which was partially offset by a decrease in programming costs, sales promotion and personnel costs.
Depreciation and Amortization
Depreciation and amortization expense decreased by Ps.596.4 million, or 2.8%, to Ps.20,510.9 million for the year ended December 31, 2024, from
Ps.21,107.3 million for the year ended December 31, 2023. This decrease was primarily due to a decrease in depreciation and amortization expense in our
Sky segment.
Other Expense, Net
Other expense, net, increased by Ps.3,641.1 million, to Ps.4,554.9 million in 2024, from Ps.913.8 million in 2023. This increase reflected primarily
non-cash items including (i) non-cash impairment adjustments in connection with goodwill, intangible assets and other long-lived assets in our Sky
segment and the Enterprise Operations within our Cable segment; (ii) a non-cash loss on disposal of property and equipment; (iii) surcharges recognized in
2024 for income taxes from prior years; and (iv) a net write-off of unrecoverable indirect taxes in 2024. These unfavorable variances were partially offset
by (i) a non-cash gain on sale of property to certain companies in our former Other Businesses segment that we recognized on January 31, 2024, in
connection with the spin-off that we carried out on that date; (ii) a decrease in non-recurring severance expense in connection with headcount reductions in
our Cable and Sky segments; and (iii) the absence in 2024 of other expense related to damage caused by Hurricane “Otis” in 2023 in our Cable segment.
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69
Finance Expense, Net
Finance expense, net, significantly impacts our consolidated financial statements in periods of currency fluctuations. Under IFRS Accounting
Standards, finance income or expense, net, reflects:
●
interest expense;
●
interest income;
●
foreign exchange gain or loss attributable to monetary assets and liabilities denominated in foreign currencies; and
●
other finance income or expense, net, including gains or losses from derivative instruments.
Our foreign exchange position is affected by our assets or liabilities denominated in foreign currencies, primarily U.S. dollars. We record a foreign
exchange gain or loss if the exchange rate of the Mexican peso to the other currencies in which our monetary assets or liabilities are denominated varies.
Finance expense, net, decreased by Ps.150.8 million, or 3.1%, to Ps.4,695.1 million in 2024, from Ps.4,845.9 million in 2023. This decrease reflected:
(i) a Ps.163.7 million increase in interest income, explained primarily by both a higher average amount of cash and cash equivalents in 2024, and higher
interest rates for increased cash equivalents denominated in Mexican pesos in 2024; (ii) a Ps.908.5 million favorable change in other finance income or
loss, net, resulting from a net gain in fair value of our derivative contracts for the year ended December 31, 2024. These favorable variances were partially
offset by (i) a Ps.233.4 million increase in interest expense, primarily in connection with the absence in 2024 of a net finance income related to the
repurchase and prepayment of long-term debt in 2023, which was partially offset by lower interest expense resulting primarily from a lower average
principal amount of debt in 2024; and (ii) a Ps.688.0 million increase in foreign exchange loss, net, resulting primarily from a 23.2% depreciation of the
Mexican peso against the U.S. dollar on an average U.S. dollar-denominated net liability position in the year ended December 31, 2024, compared with a
13.1% appreciation of the Mexican peso against the U.S. dollar on an average U.S. dollar-denominated net asset position in the year ended December 31,
2023.
Share of Loss of Associates and Joint Ventures, Net
This line item reflects our equity participation in the operating results and net assets of unconsolidated businesses in which we maintain an interest, but
which we do not control. We recognize equity in losses of associates and joint ventures up to the amount of our initial investment, subsequent capital
contributions and long-term loans, or beyond that amount when we have made guaranteed commitments in respect of obligations incurred by associates
and joint ventures.
Share of loss of associates and joint ventures, net, decreased by Ps.3,904.0 million, to Ps.182.6 million in 2024, from a Ps.4,086.6 million in 2023. This
decrease reflected a lower share of loss of TelevisaUnivision for the year ended December 31, 2024, primarily in connection with a lower amount of non-
cash impairment adjustments for goodwill and indefinite-lived intangible assets recognized by TelevisaUnivision in the fourth quarter of 2024.
Share of loss of associates and joint ventures, net, for the year ended December 31, 2024, included primarily our share of loss of TelevisaUnivision.
Income Taxes
Income taxes decreased by Ps.1,672.1 million, to Ps.688.6 million for the year ended December 31, 2024, from Ps.2,360.7 million for the year ended
December 31, 2023. This decrease reflected primarily a lower amount of income tax expense in 2024, primarily in connection with a lower recognition of
income taxes from prior years and a decrease in write-off of deferred income tax assets.
The Mexican corporate income tax rate was 30% in each of the years 2024, 2023 and 2022.
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70
Income from Discontinued Operations, Net
In connection with the Spin-off that we carried out on January 31, 2024, we began presenting the results of operations of the Spun-off Businesses as
income from discontinued operations in our consolidated statements of income for the period of one month ended January 31, 2024, and for any
comparative period presented.
We recognized income from discontinued operations in the amount of Ps.56.8 million and Ps.628.1 million for the month ended January 31, 2024 and
the year ended December 31, 2023, respectively, reflecting the consolidated net income of our Spun-off Businesses for those periods.
Net Loss Attributable to Non-controlling Interests
Net loss attributable to non-controlling interests reflects that portion of operating results attributable to the interests held by third parties in the
businesses, which are not wholly-owned by us, primarily in our Cable segment.
Net loss attributable to non-controlling interests decreased by Ps.321.7 million to Ps.62.9 million for the year ended December 31, 2024, compared
with Ps.384.6 million in the year ended December 31, 2023. This decrease reflected primarily a lower net loss attributable to non-controlling interests in
our Cable segment.
Net Loss Attributable to Stockholders of the Company
Net loss attributable to stockholders of the Company amounted to Ps.8,265.5 million for the year ended December 31, 2024, compared with Ps.8,422.7
million for the year ended December 31, 2023. The decrease of Ps.157.2 million, reflected:
●
a Ps.150.8 million decrease in finance expense, net;
●
a Ps.3,904.0 million decrease in share of loss of associates and joint ventures, net; and
●
a Ps.1,672.1 million decrease in income taxes.
These favorable variances were partially offset by:
●
a Ps.1,035.6 million decrease in operating income before other expense;
●
a Ps.3,641.1 million increase in other expense, net, primarily in connection with non-cash impairment adjustments of intangible assets and other
long-lived assets in our Sky and Cable segments;
●
a Ps.571.3 million decrease in income from discontinued operations; and
●
a Ps.321.7 million decrease in net loss attributable to non-controlling interests.
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71
Results of Operations for the Year Ended December 31, 2023,
Compared to the Year Ended December 31, 2022
Total Segment Results
Revenues
Revenues decreased by Ps.2,393.0 million, or 3.5%, to Ps.66,222.8 million for the year ended December 31, 2023, from Ps.68,615.8 million for the
year ended December 31, 2022. This decrease was due to a revenue decline in the Sky, partially offset by an increase in our Cable segment.
Cost of Revenues
Cost of revenues decreased by Ps.384.4 million, or 1.5%, to Ps.25,781.1 million for the year ended December 31, 2023, from Ps.26,165.5 million for
the year ended December 31, 2022. This decrease was mainly due to lower costs in our Sky segment, partially offset by an increase in our Cable segment.
Selling Expenses
Selling expenses decreased by Ps.190.9 million, or 2.2%, to Ps.8,610.6 million for the year ended December 31, 2023, from Ps.8,801.5 million for the
year ended December 31, 2022. This decrease was primarily attributable to lower selling expenses in our Sky segment, which was partially offset by an
increase in selling expenses in our Cable segment.
Administrative and Corporate Expenses
Administrative and corporate expenses decreased by Ps.220.4 million, or 2.7%, to Ps.7,952.2 million for the year ended December 31, 2023, from
Ps.8,172.6 million for the year ended December 31, 2022. The decrease mainly reflects lower corporate expenses and was partially offset by an increase in
administrative expenses in our Cable and Sky segments.
Corporate expenses decreased by Ps.315.3 million, or 23.4%, to Ps.1,031.2 million in 2023, from Ps.1,346.5 million in 2022. This decrease was
primarily due to a lower share-based compensation expense, as well as a decrease in other non-allocated corporate expenses.
Share-based compensation expense in 2023 and 2022 amounted to Ps.739.8 million and Ps.957.9 million, respectively, and was accounted for as
corporate expense. Share-based compensation expense is measured at fair value at the time the equity benefits are conditionally sold to officers and
employees and is recognized over the vesting period.
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72
Cable
Cable revenues represented 73.5% and 70.4% of our segment revenues for the years ended December 31, 2023, and 2022, respectively, and increased
by Ps.390.7 million, or 0.8%, to Ps.48,802.5 million for the year ended December 31, 2023, from Ps.48,411.8 million for the year ended December 31,
2022.
Total revenue generating units, or RGUs, amounted to approximately 15.4 million as of December 31, 2023. Total net change in RGUs for the year
ended December 31, 2023, decreased by 519 thousand RGUs as compared to total net additions of RGUs for the year ended December 31, 2022, due to
decreases in RGUs in our video and broadband services.
Cable operating segment income decreased by Ps.1,206.2 million, or 5.9%, to Ps.19,299.1 million for the year ended December 31, 2023, from
Ps.20,505.3 million for the year ended December 31, 2022, and the margin reached 39.5%. These decreases were primarily due to increases in
maintenance, leases, broadband and signal costs and expenses, which were partially offset by an increase in revenues.
The following table sets forth the breakdown of RGUs per service type for our Cable segment as of December 31, 2023, and 2022.
2023
2022
Video
4,059,494
4,458,220
Broadband (data)
5,678,431
5,984,151
Voice
5,351,145
5,233,724
Mobile
307,807
240,207
RGUs
15,396,877
15,916,302
Sky
Sky revenues represented 26.5% and 29.6% of our segment revenues for the years ended December 31, 2023, and 2022, respectively, and decreased by
Ps.2,753.8 million, or 13.5%, to Ps.17,585.2 million for the year ended December 31, 2023, from Ps.20,339.0 million for the year ended December 31,
2022. This decrease was due to the decrease in the number of video and broadband RGUs for the year ended December 31, 2023.
Total disconnections for the year ended December 31, 2023, were approximately 798 thousand RGUs. This was mainly driven by 689.6 thousand
video net disconnections and 125.2 thousand broadband net disconnections. In addition, Mobile RGUs increased by 16.9 thousand. Sky closed the year
with 118,670 video RGUs in Central America and the Dominican Republic.
The following table sets forth the breakdown of RGUs per service type for Sky as of December 31, 2023, and 2022.
2023
2022
Video
5,567,426
6,257,059
Broadband (data)
515,089
640,294
Voice
344
453
Mobile
32,502
15,602
RGUs
6,115,361
6,913,408
Sky operating segment income decreased by Ps.684.9 million, or 10.7%, to Ps.5,731.4 million for the year ended December 31, 2023, from Ps.6,416.3
million for the year ended December 31, 2022, and the margin totaled 32.6%. This decrease in operating segment income was due to the decrease in
revenue, which was partially offset by a decrease in programming costs, sales promotions and broadcast rights.
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73
Depreciation and Amortization
Depreciation and amortization expense increased by Ps.392.0 million, or 1.9%, to Ps.21,107.3 million for the year ended December 31, 2023, from
Ps.20,715.3 million for the year ended December 31, 2022. This increase was primarily due to an increase in depreciation and amortization expense in our
Cable segment, which was partially offset by a decrease in depreciation and amortization expense in our Sky segment.
Other Expense, Net
Other expense, net, decreased by Ps.109.4 million, to Ps.913.8 million for the year ended December 31, 2023, from Ps.1,023.2 million for the year
ended December 31, 2022. This decrease reflected primarily (i) the absence in 2023 of other expense in connection with a settlement agreement of a class
action lawsuit in the fourth quarter of 2022; and (ii) interest income for recovery of asset tax from prior years. These unfavorable variances were partially
offset by (i) an increase in non-recurring severance expense in connection with headcount reductions in our Cable segment; and (ii) non-recurring expense
related to damage caused by Hurricane “Otis” in our Cable segment.
Non-Operating Results
Finance Expense, Net
Finance expense, net, significantly impacts our consolidated financial statements in periods of currency fluctuations. Under IFRS Accounting
Standards, finance income or expense, net, reflects:
●
interest expense;
●
interest income;
●
foreign exchange gain or loss attributable to monetary assets and liabilities denominated in foreign currencies; and
●
other finance income or expense, net, including gains or losses from derivative instruments.
Our foreign exchange position is affected by our assets or liabilities denominated in foreign currencies, primarily U.S. dollars. We record a foreign
exchange gain or loss if the exchange rate of the Mexican peso to the other currencies in which our monetary assets or liabilities are denominated varies.
Finance expense, net, decreased by Ps.4,410.5 million, or 47.6%, to Ps.4,845.9 million for the year ended December 31, 2023, from Ps.9,256.4 million
for the year ended December 31, 2022. This decrease reflected: (i) a Ps.1,787.1 million decrease in interest expense in connection with a lower average
principal amount of debt in the year ended December 31, 2023, resulting primarily from prepayments made in 2023 of our long-term debt; (ii) a Ps.1,051.2
million increase in interest income explained primarily by higher interest rates in 2023, which effect was partially offset by a lower average amount of cash
and cash equivalents for the year ended December 31, 2023; and (iii) a Ps.1,596.2 million decrease in foreign exchange loss, net, resulting primarily from
the appreciation of the Mexican peso against the U.S. dollar on a lower average U.S. dollar net asset position for the year ended December 31, 2023,
compared to a higher average U.S. dollar net asset position for the year ended December 31, 2022, which was partially offset by a 13.1% appreciation of
the Mexican peso against the U.S. dollar in 2023, compared to a 5.0% appreciation in 2022. These favorable variances were partially offset by a Ps.24.0
million increase in other finance expense, net, resulting from a higher loss in fair value of our derivative contracts for the year ended December 31, 2023.
Share of Loss of Associates and Joint Ventures, Net
This line item reflects our equity participation in the operating results and net assets of unconsolidated businesses in which we maintain an interest, but
which we do not control. We recognize equity in losses of associates and joint ventures up to the amount of our initial investment, subsequent capital
contributions and long-term loans, or beyond that amount when we have made guaranteed commitments in respect of obligations incurred by associates
and joint ventures.
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74
Share of loss of associates and joint ventures, net, decreased by Ps.3,291.6 million, to a share of loss of Ps.4,086.6 million in 2023, from Ps.7,378.2
million in 2022. This decrease reflected primarily a lower net loss of TelevisaUnivision for the year ended December 31, 2023.
We recognized a share of the loss of TelevisaUnivision in 2023 and 2022, primarily in connection with an impairment adjustment for goodwill and
indefinite-lived intangible assets recognized by TelevisaUnivision in the fourth quarter of 2023 and 2022.
Share of loss of associates and joint ventures, net, for the year ended December 31, 2023, included primarily our share of loss of TelevisaUnivision.
Income Taxes
Income taxes changed by Ps.3,713.6 million, to an income tax expense of Ps.2,360.7 million for the year ended December 31, 2023, from an income
tax benefit of Ps.1,352.9 million for the year ended December 31, 2022.
This unfavorable change reflected a non-cash net income tax expense primarily in connection with an assessment of the tax authority to reduce certain
tax loss carryforwards for which a deferred income tax was recognized in prior years, as well as write-offs of deferred income tax assets.
The Mexican corporate income tax rate was 30% in each of the years 2023, 2022 and 2021.
Net Income or Loss Attributable to Non-controlling Interests
Net income attributable to non-controlling interests reflects that portion of operating results attributable to the interests held by third parties in the
businesses which are not wholly owned by us, including our Cable and Sky segments.
Net income or loss attributable to non-controlling interests changed by Ps.956.2 million to a net loss of Ps.384.6 million in 2023, compared with a net
income of Ps.571.6 million in 2022. This change reflected primarily a net loss attributable to non-controlling interests in our Cable segment.
Net Income or Loss Attributable to Stockholders of the Company
Net income or loss attributable to stockholders of the Company amounted to a net loss of Ps.8,422.7 million for the year ended December 31, 2023,
compared with a net income of Ps.44,712.2 million for the year ended December 31, 2022. The unfavorable change of Ps.53,134.9 million, reflected:
●
The absence in 2023 of a Ps.56,065.5 million income from discontinued operations that we recognized in 2022 in connection with the
TelevisaUnivision Transaction;
●
a Ps.134.2 million decrease in income from discontinued operations of the Spun-off Businesses;
●
a Ps.1,989.3 million decrease in operating income before other expense; and
●
a Ps.3,713.6 million unfavorable change in income tax benefit or expense.
These unfavorable variances were partially offset by:
●
a Ps.109.4 million decrease in other expense, net;
●
a Ps.4,410.5 million decrease in finance expense, net;
●
a Ps.3,291.6 million decrease in share of loss of associates and joint ventures, net; and
●
a Ps.956.2 million favorable change in net income or loss attributable to non-controlling interests.
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75
Effects of Depreciation and Inflation
The following table sets forth, for the periods indicated:
●
the percentage that the Peso depreciated or appreciated against the U.S. Dollar;
●
the Mexican inflation rate;
●
the U.S. inflation rate; and
●
the percentage change in Mexican GDP compared to the prior period.
Year Ended December 31,
2024
2023
2022
Depreciation (appreciation) of the Peso as compared to the U.S. Dollar(1)
23.2 %
(13.1)%
(5.0)%
Mexican inflation rate(2)
4.2
4.7
7.8
U.S. inflation rate
2.9
3.4
6.5
Increase in Mexican GDP(3)
1.2
3.2
3.1
(1)
Based on changes in the Interbank Rates, as reported by Banco Citi México, S.A., at the end of each period, which were as follows: Ps.19.4760 as of
December 31, 2022, Ps.16.9325 as of December 31, 2023 and Ps.20.8691 as of December 31, 2024.
(2)
Based on changes in the NCPI from the previous period, as reported by the Mexican Central Bank, which were as follows: 126.5 in 2022; 132.4 in
2023 and 137.9 in 2024.
(3)
As estimated by the Instituto Nacional de Estadística, Geografía e Informática, or INEGI.
The general condition of the Mexican economy, the depreciation of the Peso as compared to the U.S. Dollar, inflation and high interest rates have in
the past adversely affected, and may in the future adversely affect, our:
●
Advertising and Other Revenues. Inflation in Mexico adversely affects consumers. As a result, our advertising customers may purchase less
advertising, which would reduce our advertising revenues, and consumers may reduce expenditures for our other products and services, including
pay-TV services.
●
Foreign Currency-Denominated Revenues and Operating Costs and Expenses. We have substantial operating costs and expenses denominated in
foreign currencies, primarily in U.S. Dollars. These costs are principally due to our activities in the United States, the costs of foreign-produced
programming and publishing supplies and the leasing of satellite transponders. The following table sets forth our foreign currency-denominated
revenues and operating costs and expenses stated in millions of U.S. Dollars for 2024, 2023 and 2022:
Year Ended December 31,
2024
2023
2022
(Millions of U.S. Dollars)
Revenues
U.S.$
125
U.S.$
124
U.S.$
167
Operating costs and expenses
243
317
443
On a consolidated basis, in 2024, 2023 and 2022, our foreign-currency-denominated costs and expenses exceeded our foreign-currency-denominated
revenues. As a result, we could be exposed to future depreciation of the Peso, which would increase the Peso equivalent of our foreign-currency-
denominated costs and expenses.
●
Finance Expense, Net. The depreciation of the Peso as compared to the U.S. Dollar generates foreign exchange losses relating to our net U.S.
Dollar-denominated liabilities and increases the Peso equivalent of our interest expense on our U.S. Dollar-denominated indebtedness. Foreign
exchange losses, and increased interest expense increase our finance expense, net.
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76
We have also entered into and will continue to consider entering into additional financial instruments to hedge against Peso depreciation and reduce
our overall exposure to the depreciation of the Peso as compared to the U.S. Dollar, inflation and high interest rates. We cannot assure you that we will be
able to enter into financial instruments to protect ourselves from the effects of the depreciation of the Peso as compared to the U.S. Dollar, inflation and
increases in interest rates, or if so, on favorable terms. In the past, we have designated, and from time to time in the future we may designate, certain of our
investments or other assets as effective hedges against Peso depreciations. See “Key Information—Risk Factors—Risk Factors Related to Mexico”,
“Quantitative and Qualitative Disclosures About Market Risk—Market Risk Disclosures” and Note 4 to our consolidated year-end financial statements.
IFRS Accounting Standards
Our consolidated financial information as of December 31, 2024 and 2023 and for the years ended December 31, 2024, 2023 and 2022, was prepared
in accordance with IFRS Accounting Standards as issued by the IASB.
Below is a list of the new and amended IFRS Accounting Standards that have been issued by the IASB and are effective for annual periods starting on
or after January 1, 2025, 2026 and 2027. Our management does not expect the pronouncements effective for annual periods beginning on January 1, 2025
to have a material impact on our consolidated financial statements. Our management is in the process of assessing the potential impact those
pronouncements effective for annual periods beginning on or after January 1, 2025 will have on our consolidated financial statements. Some amendments
and improvements to certain IFRS Accounting Standards became effective on January 1, 2025, and did not have any significant impact on our consolidated
financial statements.
Effective for Annual Reporting
New or Amended IFRS Accounting
Periods Beginning
Standard
Title of the IFRS Accounting Standard
On or After
Amendments to IAS 21 (1)
Lack of Exchangeability
January 1, 2025
Annual improvements (1)
Annual Improvements to IFRS Accounting
Standards – Volume 11
January 1, 2026
Amendments to IFRS 9 and IFRS 7 (1)
Amendments to the classification and
Measurement of Financial Instruments
January 1, 2026
IFRS 18
Presentation and Disclosure in Financial
Statements
January 1, 2027
IFRS 19 (1)
Subsidiaries without Public Accountability:
Disclosures
January 1, 2027 (2)
Amendments to IFRS 10 and IAS 28
Sale or Contribution of Assets between an
Investor and its Associate or Joint Venture
Postponed
Amendments to IFRS 9 and IFRS 7 (1)
Contracts Referencing Nature-dependent
Electricity
January 1, 2026
(1)
This new or amended IFRS Accounting Standard is not expected to have a significant impact on our consolidated financial statements.
(2)
An entity may elect to apply this IFRS Accounting Standard for reporting periods beginning on or after this date.
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77
Amendments to IAS 21 Lack of Exchangeability, were issued by the IASB in August 2023, to require companies to provide more useful information in
their financial statements when a currency cannot be exchanged into another currency. These amendments will require companies to apply a consistent
approach in assessing whether a currency can be exchanged into another currency and, when it cannot, in determining the exchange rate to use and the
disclosures to provide. The amendments, which affect IAS 21 The Effects of Changes in Foreign Exchange Rates, will become effective for annual
reporting periods beginning on or after January 1, 2025, with early application permitted.
Annual Improvements to IFRS Accounting Standards – Volume 11, were issued by the IASB in July 2024. These amendments include clarifications,
simplifications, corrections and changes aimed at improving the consistency of several IFRS Accounting Standards. These amendments are effective for
annual periods beginning on or after 1 January 2026, with early application permitted. The following table lists the amended IFRS Accounting Standards or
guidance and the subject of the amendments.
Amended IFRS Accounting Standard or Guidance
Subject of Amendments
IFRS 1 First-time Adoption of International Financial Reporting
Standards
Hedge accounting by a first-time adopter
IFRS 7 Financial Instruments: Disclosures
Gain or loss on derecognition
Guidance on implementing IFRS 7 Financial Instruments: Disclosures
Introduction - Disclosure of deferred difference between fair value
and transaction price - Credit risk disclosures
IFRS 9 Financial Instruments
Derecognition of lease liabilities - Transaction price
IFRS 10 Consolidated Financial Statements
Determination of a ‘de facto agent’
IAS 7 Statement of Cash Flows
Cost method
Amendments to IFRS 9 and IFRS 7 Amendments to the Classification and Measurement of Financial Instruments, were issued by the IASB in May
2024, to address the classification of financial assets with environmental, social and corporate governance (ESG) and similar features, by clarifying how the
contractual cash flows on loans with ESG-linked features should be assessed. These amendments also address the settlement of liabilities through
electronic payment systems, by clarifying the date on which a financial asset or financial liability is derecognized and developing an accounting policy
option to allow a company to derecognize a financial liability before it delivers cash on the settlement date if specified criteria are met. The amendments
are effective for annual reporting periods beginning on or after 1 January 2026, with early application permitted.
IFRS 18 Presentation and Disclosure in Financial Statements (“IFRS 18”), was issued by the IASB in April 2024, introducing new requirements to
improve comparability in the statement of income; enhance transparency of management-defined performance measures; and provide more useful grouping
of information in the financial statements. IFRS 18 replaces IAS 1 Presentation of Financial Statements (“IAS 1”) and carries forward many requirements
from IAS 1 unchanged. IFRS 18 introduces three defined categories for income and expenses: operating, investing and financing, to improve the structure
of the statement of income, and requires all companies to provide new defined subtotals, including operating profit. IFRS also requires companies to
disclose explanations of those company-specific measures that are related to the statement of income, referred to as management-defined performance
measures. IFRS 18 sets out enhanced guidance on how to organize information and whether to provide it in the primary financial statements or in the notes.
IFRS 18 is effective for annual reporting periods beginning on or after January 1, 2027, with early application permitted. Upon adoption, IFRS 18 should
be applied on a fully retrospective basis, requiring the restatement of the comparative periods presented in an entity’s financial statements. Our
management is assessing the impact of adoption of IFRS 18 in its consolidated financial statements and financial reporting in connection with the new
presentation guidelines and disclosures required by this IFRS Accounting Standard.
IFRS 19 Subsidiaries without Public Accountability: Disclosures (“IFRS 19”), was issued by the IASB in May 2024, to permit eligible subsidiaries to
use IFRS Accounting Standards with reduced disclosures. Applying IFRS 19 will reduce the costs of preparing subsidiaries’ financial statements while
maintaining the usefulness of the information for users of their financial statements. When a parent company prepares consolidated financial statements
that comply with IFRS Accounting Standards, its subsidiaries are required to report to the parent using IFRS Accounting Standards. However, for their own
financial statements, subsidiaries are permitted to use IFRS Accounting Standards, the IFRS for SMEs Accounting Standard or national accounting
standards. Subsidiaries are eligible to apply IFRS 19 if they do not have public accountability, and their parent company applies IFRS Accounting
Standards in their consolidated financial statements. A subsidiary does not have public accountability if it does not have equities or debt listed on a stock
exchange and does not hold assets in a fiduciary capacity for a broad group of outsiders. An entity may elect to apply this Standard for reporting periods
beginning on or after 1 January 2027. Earlier application is permitted.
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Amendments to IFRS 10 and IAS 28 Sale or Contribution of Assets between an Investor and its Associate or Joint Venture, were issued by the IASB in
September 2014, and addressed and acknowledged an inconsistency between the requirements in IFRS 10 Consolidated Financial Statements and those in
IAS 28 Investments in Associates and Joint Ventures, in dealing with the sale or contribution of assets between an investor and its associate or joint venture.
The main consequence of the amendments is that a full gain or loss is recognized when a transaction involves a business (whether it is housed in a
subsidiary or not). A partial gain or loss is recognized when a transaction involves assets that do not constitute a business, even if these assets are housed in
a subsidiary. In December 2015, the IASB decided to postpone the effective date of these amendments indefinitely. Entities are required to apply these
amendments prospectively to the sale or contribution of assets occurring in annual periods beginning on or after a date to be determined by the IASB.
Earlier application is permitted. If an entity applies these amendments earlier, it shall disclose that fact. These amendments became applicable to our
consolidated financial statements in connection with the closing of the TelevisaUnivision Transaction in the first quarter of 2022 (see Note 3 to our
consolidated year-end financial statements). As permitted, we have applied these amendments in 2022 and disclosed this fact in its consolidated financial
statements.
Amendments to IFRS 9 and IFRS 7 Contracts Referencing Nature-dependent Electricity, were issued by the IASB in December 2024, to help
companies better report the financial effects of nature-dependent electricity contracts, which are often structured as power purchase agreements. Nature-
dependent electricity contracts help companies to secure their electricity supply from sources such as wind and solar power. The amount of electricity
generated under these contracts can vary based on uncontrollable factors such as weather conditions. Current accounting requirements may not adequately
capture how these contracts affect a company’s performance. These amendments are required to be applied for annual reporting periods beginning on or
after 1 January 2026. Companies can apply the amendments earlier.
Critical Accounting Estimates and Assumptions
We have identified certain key accounting policies upon which our consolidated financial condition and results of operations are dependent. The
application of these key accounting policies often involves complex considerations and assumptions and the making of subjective judgments or decisions
on the part of our management. In the opinion of our management, our most Critical Accounting Estimates and Assumptions under IFRS Accounting
Standards are those related to the accounting for goodwill and other indefinite-lived intangible assets, long-lived assets, deferred income taxes and financial
assets measured at fair value. For a full description of these and other accounting policies, see Note 2 to our consolidated year-end financial statements.
(a) Goodwill and Other Indefinite-lived Intangible Assets
Goodwill and other intangible assets with indefinite useful lives are reviewed for impairment at least annually. An impairment loss is recognized for
the amount by which the asset’s carrying amount exceeds its recoverable amount.
The recoverable amount of each of the CGUs has been determined based on the higher of value in use and fair value less costs to disposal calculations.
These calculations require the use of estimates, which include management’s expectations of future revenue growth, operating costs, profit margins and
operating cash flows for each CGU, long-term growth rates and discount rates based on weighted average cost of capital, among others.
During 2024, we recorded impairment adjustments for goodwill and intangible assets with indefinite and finite useful lives in our Sky and Cable
segments (see Notes 11, 12, 13 and 22 to our consolidated year-end financial statements). See Note 2 (b) and (l), for disclosure regarding concession
intangible assets.
(b) Long-lived Assets
We present certain long-lived assets other than goodwill and indefinite-lived intangible assets in our consolidated statement of financial position.
Long-lived assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may no longer be
recoverable. An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable
amount is the higher of an asset’s fair value less costs to sell and value in use. Recoverability is analyzed based on projected cash flows. Estimates of future
cash flows involve considerable judgment on the part of management. These estimates are based on historical data, future revenue growth, market
conditions, management plans, and assumptions regarding projected rates of inflation and currency fluctuations, among other factors. If these assumptions
were modified because of changes in economic or legal circumstances, we could recognize a write-off or write-down or accelerate the amortization
schedule related to the carrying amount of these assets. We recorded an impairment loss for the year ended December 31, 2024 (see Notes 2 (m), 13 and 22
to our year-end financial statements).
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79
(c) Deferred Income Taxes
We record our deferred tax assets based on the likelihood that these assets are realized in the future. This likelihood is assessed by taking into
consideration the future taxable income. In the event we were to determine that it would be able to realize our deferred tax assets in the future in excess of
the net recorded amount, an adjustment to the deferred tax asset would increase income in the period such determination was made. Should we determine
that it would not be able to realize all or part of our net deferred tax asset in the future, an adjustment to the deferred tax asset would be charged to income
in the period such determination was made.
(d) Financial Assets Measured at Fair Value
We have a significant amount of financial assets that are measured at fair value on a recurring basis. The degree of management’s judgment involved in
determining the fair value of a financial asset varies depending upon the availability of quoted market prices. When observable quoted market prices exist,
that is the fair value estimate we use. To the extent such quoted market prices do not exist, management uses other means to determine fair value (see Notes
4 and 15 to our consolidated year-end financial statements).
Financial assets and liabilities measured at fair value as of December 31, 2024 and 2023 (in thousands of Pesos):
Quoted Prices in
Internal Models
Internal Models
Balance as of
Active Markets
with Significant
with Significant
December 31,
for Identical
Observable
Unobservable
2024
Assets (Level 1)
Inputs (Level 2)
Inputs (Level 3)
Assets:
At FVOCIL
Open-Ended Fund
Ps.
784,769
Ps.
—
Ps.
784,769
Ps.
—
Publicly traded equity instruments
1,709,942
1,709,942
—
—
Derivative financial instruments
2,001,051
—
2,001,051
—
Total
Ps.
4,495,762
Ps.
1,709,942
Ps.
2,785,820
Ps.
—
Quoted Prices in
Internal Models
Internal Models
Balance as of
Active Markets
with Significant
with Significant
December 31,
for Identical
Observable
Unobservable
2023
Assets (Level 1)
Inputs (Level 2)
Inputs (Level 3)
Assets:
At FVOCIL
Open-Ended Fund
Ps.
674,451
Ps.
—
Ps.
674,451
Ps.
—
Publicly traded equity instruments
1,912,150
1,912,150
—
—
Derivative financial instruments
251,738
—
251,738
—
Total
Ps.
2,838,339
Ps.
1,912,150
Ps.
926,189
Ps.
—
Non-current Financial Assets
Investments in debt securities or with readily determinable fair values, are classified as non-current investments in financial instruments, and are
recorded at fair value with unrealized gains and losses included in consolidated stockholders’ equity as accumulated other comprehensive result.
Non-current financial assets are generally valued using quoted market prices or alternative pricing sources with reasonable levels of price transparency.
Such instruments are classified in Level 1, Level 2, and Level 3, depending on the observability of the significant inputs.
Open-Ended Fund
We have an investment in an Open-Ended Fund that has as a primary objective to achieve capital appreciation by using a broad range of strategies
through investments in securities, including without limitation stock, debt and other financial instruments, a principal portion of which are considered as
Level 1 financial instruments, in telecom, media and other sectors across global markets, including Latin America and other emerging markets. Shares may
be redeemed on a quarterly basis at the NAV per share as of such redemption date (see Notes 4 and 9 to our consolidated year-end financial statements).
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80
Disclosures for Each Class of Assets and Liabilities Subject to Recurring Fair Value Measurements Categorized Within Level 3
Our Corporate Finance Department has established rules for a proper portfolio asset classification according to the fair value hierarchy defined by
IFRS Accounting Standards. On a monthly basis, any new assets recognized in the Company’s portfolio are classified according to these criteria.
Subsequently, there is a quarterly review of the portfolio in order to analyze the need for a change in classification of any of these assets.
A sensitivity analysis is performed on our investments with significant unobservable inputs (Level 3) in order to obtain a reasonable range of possible
alternative valuations. This analysis is carried out by our Corporate Finance Department.
Derivative Financial Instruments
Derivative financial instruments include swaps, forwards and options (see Notes 2(w), 4 and 15 to our consolidated year-end financial statements).
Our derivative portfolio is entirely over-the-counter. Our derivatives are valued using industry standard valuation models; projecting future cash flows
discounted to present value, using market-based observable inputs including interest rate curves, foreign exchange rates, and forward and spot prices for
currencies.
When appropriate, valuations are adjusted for various factors such as liquidity, bid/offer spreads and credit spreads considerations. Such adjustments
are generally based on available market evidence. In the absence of such evidence, management’s best estimate is used. All derivatives are classified in
Level 2.
Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis
The majority of our non-financial instruments, which include the investment in shares of TelevisaUnivision, goodwill, intangible assets, inventories,
transmission rights and property, plant and equipment and right of use assets, are not required to be carried at fair value on a recurring basis. However, if
certain triggering events occur (or at least annually in the fourth quarter for goodwill and indefinite-lived intangible assets) such that a non-financial
instrument is required to be evaluated for impairment, a resulting asset impairment would require that the non-financial instrument be recorded at the lower
of carrying amount or its recoverable amount.
The impairment test for goodwill involves a comparison of the estimated fair value of each of our reporting units to its carrying amount, including
goodwill. We determine the recoverable amount of a reporting unit using the higher between the value in use and the fair value less costs to sell, which
utilize significant unobservable inputs (Level 3) within the fair value hierarchy. The impairment test for intangible assets not subject to amortization
involves a comparison of the estimated recoverable amount of the intangible asset with its carrying amount. We determine the recoverable amount of the
intangible asset using a discounted cash flow analysis, which utilizes significant unobservable inputs (Level 3) within the fair value hierarchy. Determining
recoverable amount requires the exercise of significant judgment, including judgment about appropriate discount rates, perpetual growth rates, the amount
and timing of expected future cash flows for a period of time that comprises five years, as well as relevant comparable company earnings multiples for the
market-based approach.
Once an asset has been impaired, it is not remeasured at fair value on a recurring basis; however, it is still subject to recoverable amount measurement
to test for recoverability of the carrying amount.
Liquidity, Foreign Exchange and Capital Resources
Liquidity. We generally rely on a combination of cash on hand, operating revenues, borrowings and net proceeds from dispositions to fund our working
capital needs, capital expenditures, acquisitions and investments. We believe our working capital is sufficient for our present requirements, and we
anticipate generating sufficient cash to satisfy our long-term liquidity needs.
During the year ended December 31, 2024, we had a net increase in cash and cash equivalents of Ps.14,303.7 million as compared to a net decrease in
cash and cash equivalents of Ps.18,544.6 million during the year ended December 31, 2023.
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81
Net cash provided by operating activities for the year ended December 31, 2024, amounted to Ps.32,554.1 million. Adjustments to reconcile loss before
income taxes from continuing operations to net cash provided by operating activities were mainly due to (i) depreciation and amortization of Ps.20,542.3
million, (ii) an interest expense of Ps.7,984.8 million, (iii) unrealized foreign exchange loss of Ps.5,664.6 million, (iv) impairment of long-lived assets of
Ps.3,064.3; (v) an impairment loss on trade accounts receivable and other receivables of Ps.1,294.1 million, and (vi) a share-based compensation expense
of Ps.488.8 million; this was partially offset by (i) gain on disposition of property and equipment of Ps.2,321.2 million; (ii) income taxes paid for the year
ended December 31, 2024, which amounted to Ps.812.2 million; and (iii) an other finance gain, net of Ps.773.7 million.
Net cash used in investing activities for the year ended December 31, 2024, amounted to Ps.9,009.7 million and was primarily used in (i) investments
in property, plant and equipment of Ps.9,097.4 million, and (ii) other investments in intangible assets of Ps.1,378.9 million; this was partially offset by
proceeds from (i) cash dividends from preferred shares of Ps.777.8 million, (ii) a disposition of property, plant and equipment of Ps.628.0 million, and (iii)
a disposition of investment in joint ventures of Ps.50.8 million.
Net cash used in financing activities for the year ended December 31, 2024, amounted to Ps.9,389.0 million, and was primarily used for interest
payments of Ps.7,417.9 million, payment of long-term loans from Mexican banks of Ps.10,000.0 million, other payments of lease liabilities of Ps.1,567.3
million, dividend payments of Ps.1,019.0 million, which was partially offset by cash proceeds from Mexican banks long-term loans of Ps.10,000.0 million
and derivative financial instruments of Ps.747.7 million.
During the year ended December 31, 2023, we had a net decrease in cash and cash equivalents of Ps.18,544.6 million, as compared to a net increase in
cash and cash equivalents of Ps.25,302.8 million during the year ended December 31, 2022.
Net cash provided by operating activities for the year ended December 31, 2023, amounted to Ps.15,201.4 million. Adjustments to reconcile loss before
income taxes from continuing operations to net cash provided by operating activities were mainly due to (i) depreciation and amortization of Ps.21,469.2
million, (ii) an interest expense of Ps.7,654.3 million, (iii) an impairment loss on trade accounts receivable, and other receivables of Ps.1,108.0 million, (iv)
an other finance loss, net of Ps.134.8 million, (v) a share of loss of associates and joint ventures of Ps.4,086.6 million, and (vi) a share-based compensation
expense of Ps.748.5 million; this was partially offset by (i) unrealized foreign exchange gains of Ps.3,740.1 million, and (ii) income taxes paid for the year
ended December 31, 2023, which amounted to Ps.7,014.3 million.
Net cash used in investing activities for the year ended December 31, 2023, amounted to Ps.15,758.4 million and was primarily used in (i) investments
in property, plant and equipment of Ps.14,708.0 million, and (ii) other investments in intangible assets of Ps.1,869.7 million; this was partially offset by
proceeds from (i) cash dividends from preferred shares of Ps.716.9 million, (ii) a disposition of investment in joint ventures of Ps.45.6 million, and (iii) a
disposition of property, plant and equipment of Ps.48.9 million.
Net cash used in financing activities for the year ended December 31, 2023, amounted to Ps.17,753.0 million, and was primarily used in interest
payments of Ps.7,553.9 million, derivative financial instruments of Ps.195.1 million, prepayment of long-term loans from Mexican banks related to Sky of
Ps.1,400.0 million, other payments of lease liabilities of Ps.1,793.6 million, dividend payments of Ps.1,027.4 million, repurchases of capital stock of
Ps.1,197.1 million, partial prepayment of Senior Notes of Ps.4,718.3 million and the repurchase of our 7.25% Senior Notes due 2043 of Ps.181.7 million,
which was partially offset by cash provided by Mexican banks through long-term loans of Ps.400.0 million to Sky.
Capital Expenditures, Acquisitions and Investments, Distributions and Other Sources of Liquidity
During 2025, we:
●
expect to make aggregate capital expenditures for property, plant and equipment totaling approximately U.S.$665.0 million, which are intended
primarily for the expansion and improvement of our Cable and Sky segments; and
●
expect to provide financing to GTAC in connection with long-term credit facilities and our 33.3% interest in GTAC in the aggregate principal
amount of U.S.$3.4 million (Ps.70.9 million).
During 2024, we:
●
made aggregate capital expenditures for property, plant and equipment totaling approximately U.S.$493.0 million, of which approximately
U.S.$399.2 million and approximately U.S.$83.3 million were for the expansion and improvement of our Cable and Sky segments, respectively
and the remaining amount was for our other corporate businesses; and
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82
●
provided financing to GTAC in connection with long-term credit facilities and our 33.3% interest in GTAC in the aggregate principal amount of
U.S.$7.0 million (Ps.128.9 million).
During 2023, we:
●
made aggregate capital expenditures for property, plant and equipment totaling approximately U.S.$828.5 million, of which approximately
U.S.$633.0 million and approximately U.S.$149.2 million were for the expansion and improvements of our Cable and Sky segments, respectively,
and the remaining amount was for our Other Businesses segment; and
●
provided financing to GTAC in connection with long-term credit facilities and our 33.3% interest in GTAC in the aggregate principal amount of
U.S.$8.8 million (Ps.155.1 million).
Refinancings. In November and December 2017, we entered into long-term debt agreements with three Mexican banks in the aggregate principal
amount of Ps.6,000 million, with maturities between 2022 and 2023, and interest payable on a monthly basis at an annual rate of 28-day Equilibrium
Interbank Interest Rate (“Tasa de Interés Interbancaria de Equilibrio” or “TIIE”) plus a range between 125 and 130 basis points.
In May 2019, we concluded the offering of U.S.$750 million aggregate principal amount of 5.25% Senior Notes due 2049. The net proceeds of the
offering were used for general corporate purposes, which may include repayment or repurchase of existing indebtedness.
In June 2019, we entered into a credit agreement for a five-year term loan with a syndicate of banks in the aggregate principal amount of Ps.10,000
million. The funds from this loan were used for general corporate purposes, including the refinancing of our indebtedness. This loan bore interest at a
floating rate based on a spread of 105 or 130 basis points over the 28-day TIIE rate depending on our net leverage ratio. In April 2024, we prepaid in full all
amounts outstanding under this credit agreement, which was scheduled to mature in 2024.
On March 24, 2020, we drew down the U.S.$618 million under the RCF (as defined below) and fully prepaid the facility on October 6, 2020. In
February 2022, the RCF was increased by U.S.$32 million reaching a total amount of U.S.$650 million payable in Mexican pesos, and extended for a
three-year term, with maturity in February 2025. In April 2024, we terminated the RCF. We did not borrow any amounts under the RCF since 2022.
In March 2022, we made a partial redemption of U.S.$200 million aggregate principal amount of our U.S.$600 million 6.625% Senior Notes due 2025
in the aggregate amount of U.S.$221.3 million, including the applicable redemption price and accrued and unpaid interest on the redemption date.
In February and March 2022, we prepaid outstanding long-term loans with three Mexican banks, in the aggregate principal amount of Ps.6,000 million
and related accrued interest for an aggregate amount of Ps.37.1 million. The original maturities of these loans were in the fourth quarter 2022 and first
quarter of 2023.
In August 2022, we completed a tender offer to purchase in cash a principal amount of U.S.$133.6 million of our 6.625% Senior Notes due 2025,
U.S.$110.6 million of our 5.000% Senior Notes due 2045, and U.S.$47.8 million of our 5.250% Senior Notes due 2049, for an aggregate principal amount
of U.S.$292.0 million. The aggregate tender consideration paid amounted to U.S.$294.8 million plus U.S.$5.5 million of accrued and unpaid interest on the
settlement date of the tender offer.
In August 2023, we completed a tender offer to purchase in cash a principal amount of up to U.S.$300.0 million of our 4.625% Notes due 2026,
5.000% Notes due 2045, 5.250% Notes due 2049, 6.625% Notes due 2025 and 6.125% Notes due 2046, for an aggregate principal amount of U.S.$300.0
million. The aggregate tender consideration paid amounted to U.S.$281.1 million plus U.S.$3.0 million of accrued and unpaid interest on the settlement
date of the tender offer.
In September 2023, we repurchased a principal amount of Ps.221.6 million of our 7.25% Notes due 2043 in an open market purchase, for a trailing
aggregate principal amount of Ps.274.3 million during 2023.
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83
On April 9, 2024, we entered into a credit agreement, together with Cablemás Telecomunicaciones, S.A. de C.V. and Televisión Internacional, S.A. de
C.V., as co-borrowers, with a syndicate of banks which provides for a five-year term loan in an aggregate principal amount of Ps.10,000 million, and a five-
year revolving credit facility in an aggregate principal amount of U.S.$500 million, with loans thereunder to be funded in Mexican pesos. The loans under
this credit agreement will bear interest at a floating rate based on a spread of 125 bps or 150 bps over the 28 day TIIE Rate depending on our net leverage
ratio. The credit agreement requires the maintenance of certain financial ratios related to indebtedness and interest expense. BBVA México, S.A. Institución
de Banca Múltiple, Grupo Financiero BBVA México, Banco Santander México, S.A., Institución de Banca Múltiple, Grupo Financiero Santander México,
and Scotiabank Inverlat, S.A., Institución de Banca Múltiple, Grupo Financiero Scotiabank acted as joint lead arrangers and joint bookrunners. The
proceeds of the loans under this credit agreement were used to refinance certain of our existing indebtedness and may also be used for general corporate
purposes. We used part of the proceeds of the loans to prepay in full all amounts outstanding under the credit agreement which we entered into in 2019 with
a syndicate of banks, which was scheduled to mature in 2024.
Indebtedness. As of December 31, 2024, our consolidated long-term portion of debt amounted to Ps.98,398.2 million and our consolidated current
portion of debt was Ps.6,231.4 million. As of December 31, 2023, our consolidated long-term portion of debt amounted to Ps.78,547.9 million and our
consolidated current portion of debt was Ps.11,494.7 million. The consolidated debt is presented net of unamortized finance costs as of December 31, 2024
and 2023, in the aggregate amount of Ps.1,259.0 million and Ps.1,278.4 million, respectively, and interest payable in the aggregate amount of Ps.1,674.5
million and Ps.1,506.8 million in 2024 and 2023, respectively.
In March 2018, the Company entered into a Revolving Credit Facility (“RCF”) with a syndicate of banks for U.S.$583.0 million payable in Mexican
pesos, for a three-year term. In December 2018, this facility was increased by U.S.$35.0 million reaching a total amount of U.S.$618.0 million. The funds
may be used for the repayment of existing indebtedness and other general corporate purposes as may be authorized by our Board of Directors. In August
2019, the Company extended the RCF for one more year to maintain the total three-year term. The RCF was available as of December 31, 2019. In March
2020, the Company drew down under the RCF as a prudent and precautionary measure in order to increase its cash position and preserve financial
flexibility in light of uncertainty in the global and local markets resulting from the COVID-19 outbreak. The aggregate principal amount drawn under the
RCF was Ps.14,771.0 million, with maturity in the first quarter of 2022. The RCF bore interest at a floating rate based on a spread of 87.5 or 112.5 basis
points over the 28-day TIIE rate depending on the Company’s net leverage ratio, which amount the Company was permitted to prepay on the last day of
any interest period. The Company prepaid the full amount drawn on October 6, 2020 without penalty. In February 2022, the RCF was increased by U.S.$32
million reaching a total amount of U.S.$650 million payable in Mexican pesos and extended for a three-year term, with maturity in February 2025. In April
2024, the Company terminated the RCF. The Company did not borrow any amounts under the RCF since 2022.
In February 2023, Sky executed a revolving credit facility with a Mexican bank for an amount up to Ps.1,000 million and with a maturity in 2028. The
funds may be used for general corporate purposes, including the repayment of debt. Under the terms of this revolving credit facility, Sky is required to
comply with certain restrictive covenants and financial coverage ratios. In March 2023, upon the maturity of loans with two Mexican banks, Sky repaid the
remaining portions of these loans in the aggregate principal amount of Ps.1,000 million with (i) available cash on hand in the amount of Ps.600 million and
(ii) funds from this revolving credit facility in the principal amount of Ps.400 million, plus interest payable on a monthly basis at the annual interest rate of
TIIE plus 0.85%. In December 2023, Sky prepaid this credit facility plus accrued interest in the aggregate amount of Ps.404 million. As of December 31,
2024, the unused principal amount of this revolving credit facility amounted to Ps.1,000 million.
On April 9, 2024, we entered into a credit agreement, together with Cablemás Telecomunicaciones, S.A. de C.V. and Televisión Internacional, S.A. de
C.V., as co-borrowers, with a syndicate of banks which provides for a five-year term loan in an aggregate principal amount of Ps.10,000 million, and a five-
year revolving credit facility in an aggregate principal amount of U.S.$500 million, with loans thereunder to be funded in Mexican pesos. The loans under
this credit agreement will bear interest at a floating rate based on a spread of 125 bps or 150 bps over the 28 day TIIE Rate depending on our net leverage
ratio. The credit agreement requires the maintenance of certain financial ratios related to indebtedness and interest expense. BBVA México, S.A. Institución
de Banca Múltiple, Grupo Financiero BBVA México, Banco Santander México, S.A., Institución de Banca Múltiple, Grupo Financiero Santander México,
and Scotiabank Inverlat, S.A., Institución de Banca Múltiple, Grupo Financiero Scotiabank acted as joint lead arrangers and joint bookrunners.
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84
The proceeds of the loans under this credit agreement were used to refinance certain of our existing indebtedness and may also be used for general
corporate purposes. We used part of the proceeds of the loans to prepay in full all amounts outstanding under the credit agreement which we entered into in
2019 with a syndicate of banks, which was scheduled to mature in 2024.
We may from time to time incur additional indebtedness or repurchase, redeem or repay outstanding indebtedness.
The following table sets forth a description of our outstanding indebtedness as of December 31, 2024, net of unamortized finance costs and does not
include related accrued interest payable (in millions of Pesos):
2024(1)
Effective
Interest
Interest Rate
Payable
Principal
Finance Costs
Net
U.S. dollar Senior Notes:
6.625% Senior Notes due 2025 (2)
7.60%
Ps.
75.8
Ps.
4,579.5
Ps.
(22.5)
Ps.
4,557.0
4.625% Senior Notes due 2026 (2)
5.03%
100.1
4,328.7
(5.1)
4,323.6
8.50% Senior Notes due 2032 (2)
9.00%
162.6
6,260.7
(34.5)
6,226.2
6.625% Senior Notes due 2040 (2)
7.05%
377.9
12,521.4
(141.6)
12,379.8
5% Senior Notes due 2045 (2)
5.39%
119.2
16,499.3
(453.7)
16,045.6
6.125% Senior Notes due 2046 (2)
6.47%
562.1
18,355.9
(126.6)
18,229.3
5.25% Senior Notes due 2049 (2)
5.59%
72.4
13,793.0
(315.6)
13,477.4
Total U.S. dollar debt
1,470.1
76,338.5
(1,099.6)
75,238.9
Mexican peso debt:
8.79% Notes due 2027 (3)
8.84%
101.1
4,500.0
(8.8)
4,491.2
8.49% Senior Notes due 2037 (2)
8.94%
44.6
4,500.0
(15.5)
4,484.5
7.25% Senior Notes due 2043 (2)
7.92%
36.4
6,225.7
(63.3)
6,162.4
Bank loan (4)
11.69%
—
10,000.0
(71.8)
9,928.2
Bank loans (Sky) (5)
12.46%
22.3
2,650.0
—
2,650.0
Total Mexican peso debt
204.4
27,875.7
(159.4)
27,716.3
Total debt
1,674.5
104,214.2
(1,259.0)
102,955.2
Less: Current portion of long-term debt
1,674.5
4,579.5
(22.5)
4,557.0
Long-term debt, net of current portion
Ps.
—
Ps.
99,634.7
Ps. (1,236.5)
Ps.
98,398.2
Lease liabilities:
Satellite transponder lease agreement(6)
Ps.
1,866.7
Telecommunications network lease agreement (7)
538.4
Other lease liabilities(8)
2,981.5
Total lease liabilities
5,386.6
Less: Current portion
1,242.9
Lease liabilities, net of current portion
Ps.
4,143.7
(1)
U.S. Dollar-denominated debt is translated into Pesos at an exchange rate of Ps.20.8691 per U.S. Dollar, the Interbank Rate, as reported by Banco Citi
México, S.A., as of December 31, 2024.
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85
(2)
The Senior Notes due between 2025 and 2049, in the aggregate outstanding principal amount of U.S.$3,658 million as of December 31, 2024 and
2023, and Ps.10,725,690, as of December 31, 2024 and 2023, are unsecured obligations of the Company, rank equally in right of payment with all
existing and future unsecured and unsubordinated indebtedness of the Company, and are junior in right of payment to all of the existing and future
liabilities of the Company’s subsidiaries. Interest rate on the Senior Notes due 2025, 2026, 2032, 2037, 2040, 2043, 2045, 2046, and 2049 including
additional amounts payable in respect of certain Mexican withholding taxes, is 6.97%, 4.86%, 8.94%, 8.93%, 6.97%, 7.62%, 5.26%, 6.44% and 5.52%
per annum, respectively, and is payable semi-annually. These Senior Notes may not be redeemed prior to maturity, except: (i) in the event of certain
changes in law affecting the Mexican withholding tax treatment of certain payments on the securities, in which case the securities will be redeemable,
in whole or in part, at the option of the Company; and (ii) in the event of a change of control, in which case the Company may be required to redeem
the securities at 101% of their principal amount. Also, the Company may, at its own option, redeem the Senior Notes due 2025, 2026, 2037, 2040,
2043, 2046 and 2049, in whole or in part, at any time at a redemption price equal to the greater of the principal amount of these Senior Notes or the
present value of future cash flows, at the redemption date, of principal and interest amounts of the Senior Notes discounted at a fixed rate of
comparable U.S. or Mexican sovereign bonds. The Senior Notes due 2026, 2032, 2040, 2043, 2045, 2046 and 2049 were priced at 99.385%, 99.431%,
98.319%, 99.733%, 96.534%, 99.677% and 98.588%, respectively, for a yield to maturity of 4.70%, 8.553%, 6.755%, 7.27%, 5.227%, 6.147% and
5.345%, respectively. The Senior Notes due 2025 were issued in two aggregate principal amounts of U.S.$400 million and U.S.$200 million, and were
priced at 98.081% and 98.632%, respectively, for a yield to maturity of 6.802% and 6.787%, respectively. The terms of these Senior Notes contain
covenants that limit the ability of the Company and certain restricted subsidiaries, to incur or assume liens, perform sale and leaseback transactions,
and consummate certain mergers, consolidations, and similar transactions. The Senior Notes due 2025, 2026, 2032, 2037, 2040, 2045, 2046 and 2049,
are registered with the U.S. Securities and Exchange Commission (“SEC”). The Senior Notes due 2043 are registered with both the SEC and the
Mexican Banking and Securities Commission (“Comisión Nacional Bancaria y de Valores” or “CNBV”). In the first, second and third quarters of
2023, the Company repurchased a portion of its outstanding Senior Notes due 2043 in the aggregate principal amount of Ps.274,310 and recognized a
gain on extinguishment of debt in the amount of Ps.98,692, which was recognized in finance expense, net, in the Group’s consolidated statement of
income for the year ended December 31, 2023. In August 2023, the Company concluded tender offers to purchase for cash a portion of its Senior Notes
due 2025, 2026, 2045, 2046 and 2049, in the principal amount of U.S.$47.0 million, U.S.$92.6 million, U.S.$98.7 million, U.S.$20.4 million and
U.S.$41.3 million, respectively, for an aggregate principal amount of U.S.$300.0 million. The Company paid for these tender offers cash in the
aggregate amount of U.S.$274.9 million (Ps.4,718,251), plus related premiums of U.S.$6.2 million (Ps.106,505) and recognized a gain on
extinguishment of debt in the amount of U.S.$18.9 million (Ps.324,512), which was recognized in finance expense, net, in the Group’s consolidated
statement of income for the year ended December 31, 2023. In the second and third quarters of 2023, the Company repurchased a portion of its
outstanding Senior Notes due 2043 in the aggregate principal amount of Ps.274,310, the Company paid for this repurchase an aggregate cash amount
of Ps.174,785, plus related accrued interest of Ps.6,946, and recognized a gain on extinguishment of debt in the amount of Ps.92,579, which was
recognized in finance expense, net, in the Group’s consolidated statement of income for the year ended December 31, 2023.
(3)
In 2017, the Company issued Notes (“Certificados Bursátiles”) due 2027, through the BMV in the aggregate principal amount of Ps.4,500,000, with
interest payable semi-annually at an annual rate of 8.79%. The Company may, at its own option, redeem the Notes due 2027, in whole or in part, at any
semi-annual interest payment date at a redemption price equal to the greater of the principal amount of the outstanding Notes and the present value of
future cash flows, at the redemption date, of principal and interest amounts of the Notes discounted at a fixed rate of comparable Mexican sovereign
bonds. The terms of the Notes due 2027 contain covenants that limit the ability of the Company and certain restricted subsidiaries appointed by the
Company’s Board of Directors, to incur or assume liens, perform sale and leaseback transactions, and consummate certain mergers, consolidations, and
similar transactions.
(4)
In July 2019, the Company entered into a credit agreement (the “2019 Credit Agreement”) for a five-year term loan with a syndicate of banks in the
aggregate principal amount of Ps.10,000,000, with an original maturity in 2024 and interest payable on a monthly basis at a floating rate based on a
spread of 105 or 130 basis points over the 28-day TIIE rate depending on the Group’s net leverage ratio. In April 2024, the Company and two of its
subsidiaries in the Group’s Cable segment (i) executed a credit agreement with a syndicate of banks (the “2024 Credit Agreement”) for a five-year term
loan in an aggregate principal amount of Ps.10,000,000, and a five-year revolving credit facility in an aggregate principal amount of U.S.$500 million;
and (ii) terminated an unused revolving credit facility entered into in 2022 with a syndicate of banks for up to an amount equivalent to U.S.$650
million, with an original maturity in 2025. The loans under the 2024 Credit Agreement bear interest at a floating rate based on a spread of 125 bps or
150 bps over the 28-day TIIE rate depending on the Group’s net leverage ratio. The 2024 Credit Agreement requires the maintenance of certain
financial ratios related to indebtedness and interest expense. In April 2024, the Group used part of the proceeds of the term loan under the 2024 Credit
Agreement to prepay in full all amounts outstanding under the 2019 Credit Agreement.
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86
(5)
In December 2021, Sky entered into long-term credit agreement with a Mexican Bank in the aggregate principal amount of Ps.2,650,000, with interest
payable on a monthly basis and maturity in December 2026, which included a Ps.1,325,000 loan with an annual interest rate of 8.215%, and a
Ps.1,325,000 loan with an annual interest rate of 28-day TIIE plus 90 basis points. The funds from these loans were used for general corporate
purposes, including the prepayment of Sky´s indebtedness. Under the terms of this credit agreement, Sky is required to: (a) maintain certain financial
coverage ratios related to indebtedness and interest expense; and (b) comply with a restrictive covenant on spin-offs, mergers, and similar transactions.
In March 2023, upon the maturity of loans with two Mexican banks, Sky repaid the remaining portions of these loans in the aggregate principal
amount of Ps.1,000,000 with (i) available cash on hand in the amount of Ps.600,000 and (ii) funds from a revolving credit facility in the principal
amount of Ps.400,000, plus interest payable on a monthly basis at the annual interest rate of TIIE plus 0.85%, with a maturity in 2028. In December
2023, Sky prepaid all of the used funds under its revolving credit facility plus unpaid accrued interest in the aggregate amount of Ps.403,981.
(6)
In March 2010, Sky entered into a lease agreement with Intelsat Global Sales & Marketing Ltd. (“Intelsat”) by which Sky is obligated to pay at an
annual interest rate of 7.30%, a monthly fee through 2027 of U.S.$3.0 million for satellite signal reception and retransmission service from 24 KU-
band transponders on satellite IS-21, which became operational in October 2012. The service term for IS-21 will end at the earlier of: (a) the end of 15
years; or (b) the date IS-21 is taken out of service.
(7)
A subsidiary of the Company entered into a lease agreement with GTAC for the right to use certain capacity of a telecommunications network through
2030.
(8)
Other lease liabilities recognized in accordance with IFRS 16 Leases, in the aggregate amount of Ps.2,981,536 and Ps.4,723,352, as of December 31,
2024 and 2023, respectively. These lease liabilities have terms which will expire at various dates between 2025 and 2051.
Interest Expense. Interest expense for the years ended December 31, 2024, 2023 and 2022 was Ps.7,975.6 million, Ps.7,742.1 million and Ps.9,529.2
million, respectively.
The following table sets forth our interest expense for the years indicated (in millions of U.S. Dollars and millions of Pesos):
Year Ended December 31,(1)
2024
2023
2022
Interest payable in U.S. Dollars
U.S.$
228.8
U.S.$
215.3
U.S.$
279.5
Amounts currently payable under Mexican withholding taxes (2)
11.2
11.5
12.5
Total interest payable in U.S. Dollars
U.S.$
240.0
U.S.$
226.8
U.S.$
292.0
Peso equivalent of interest payable in U.S. Dollars
Ps.
4,368.8
Ps.
4,094.4
Ps.
5,879.7
Interest payable in Pesos
3,606.8
3,559.9
3,575.9
Discontinued operations
—
87.8
73.6
Total interest expense
Ps.
7,975.6
Ps.
7,742.1
Ps.
9,529.2
(1)
U.S. Dollars are translated into Pesos at the rate prevailing when interest was recognized as an expense for each period.
(2)
See “Additional Information—Taxation—Federal Mexican Taxation”.
Contractual Obligations and Commercial Commitments
Our contractual obligations and commercial commitments consist primarily of indebtedness, as described above, and transmission rights obligations.
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87
Contractual Obligations on the Balance Sheet
The following table summarizes our contractual obligations on the balance sheet as of December 31, 2024 (these amounts do not include future interest
payments):
Payments Due by Period
Less Than 12
Months
12-36 Months
36-60 Months
Maturities
January 1, 2025 to
January 1, 2026
January 1,2028
Subsequent to
December 31,
to December 31,
to December 31,
December 31,
Total
2025
2027
2029
2029
(Thousands of U.S. Dollars)
6.625% Senior Notes due 2025(1)
U.S.$
219,438
U.S.$
219,438
U.S.$
—
U.S.$
—
U.S.$
—
8.5% Senior Notes due 2032
300,000
—
—
—
300,000
8.49% Senior Notes due 2037
215,630
—
—
—
215,630
6.625% Senior Notes due 2040
600,000
—
—
—
600,000
8.79% Notes due 2027
215,630
—
215,630
—
—
7.25% Senior Notes due 2043
298,321
—
—
—
298,321
5% Senior Notes due 2045
790,610
—
—
—
790,610
4.625% Senior Notes due 2026
207,420
—
207,420
—
—
6.125% Senior Notes due 2046
879,572
—
—
—
879,572
5.250% Senior Notes due 2049
660,928
—
—
—
660,928
Syndicate Loan due 2029
479,177
—
—
479,177
—
Scotiabank loan due 2026
126,982
—
126,982
—
—
Long-term debt
4,993,708
219,438
550,032
479,177
3,745,061
Accrued interest payable
80,240
80,240
—
—
—
Satellite transponder lease agreement
89,450
30,476
58,974
—
—
Telecommunications network lease agreement
25,797
2,999
11,157
8,688
2,953
Other lease liabilities
142,868
26,084
44,292
32,788
39,704
Other non-current liabilities
90,432
—
31,257
59,175
—
Total contractual obligations
U.S.$
5,422,495
U.S.$
359,237
U.S.$
695,712
U.S.$
579,828
U.S.$
3,787,718
(1)
The 6.625% Senior Notes due 2025 were repaid at maturity on March 18, 2025.
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88
Contractual Obligations off the Balance Sheet
The following table summarizes our contractual obligations off the balance sheet as of December 31, 2024
Payments Due by Period
Less Than 12
Months
12-36 Months
36-60 Months
Maturities
January 1, 2025 to
January 1, 2026
January 1, 2028
Subsequent to
December 31,
to December 31,
to December 31,
December 31,
Total
2025
2027
2029
2029
(Thousands of U.S. Dollars)
Interest on debt(1)
U.S.$
4,185,003
U.S.$
260,117
U.S.$
601,919
U.S.$
516,932
U.S.$
2,806,035
Interest on lease liabilities
82,018
22,182
29,620
18,116
12,100
Transmission rights(2)
460,656
67,020
130,034
132,701
130,901
Capital expenditures commitments
25,733
25,733
—
—
—
Satellite transponder commitments(3)
18,438
5,823
8,214
4,062
339
Committed financing to GTAC(4)
3,399
3,399
—
—
—
Total contractual obligations
U.S.$
4,775,247
U.S.$
384,274
U.S.$
769,787
U.S.$
671,811
U.S.$
2,949,375
(1)
Interest to be paid in future years on outstanding debt as of December 31, 2024, was estimated based on contractual interest rates and exchange rates as
of that date.
(2)
These line items reflect our obligations related to programming to be acquired or licensed from third party producers and suppliers, and transmission
rights for special events to be acquired from a third party.
(3)
Reflects our minimum commitments for the use of satellite transponders under operating lease contracts, which payments will be reimbursed by
TelevisaUnivision as the final user of these satellite transponders.
(4)
In connection with a long-term credit facility, we agreed to provide financing to GTAC in 2025 in the aggregate principal amount of Ps.70.9 million
(U.S.$3.4 million).
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89
Item 6. Directors, Senior Management and Employees
Board of Directors
The following table sets forth the names of our current directors and their alternates, their dates of birth, their principal occupation, their business
experience, including other directorships, and their years of service as directors or alternate directors. The general annual stockholders’ meeting takes place
annually in order to, among other matters, elect and/or ratify the Company’s directors. Our current Board of Directors is composed as follows:(1)
Name and Date of Birth
Principal Occupation
Business Experience
First Elected
In alphabetical order:
Alfonso de Angoitia
Noriega (01/17/62)
Co-Chief Executive Officer,
Member of the Executive
Committee of Grupo Televisa.
Member of the Board of Empresas
Cablevisión (subsidiary of Grupo
Televisa). Co-Chief Executive
Officer of TelevisaUnivision
Mexico.
Executive Chairman of the Board of
TelevisaUnivision. Member of the
Boards of Liberty Latin America,
Grupo Axo and Grupo Financiero
Banorte and Innova (subsidiary of
Grupo Televisa). Chairman of the
Board of Trustees of Fundación
Kardias. Member of the Boards of
Trustees of Fundación Mexicana
para la Salud, Fundación UNAM
and The Paley Center for Media.
Former Executive Vice President
and Chief Financial Officer of
Grupo Televisa.
April 1997
Luis Alejandro Bustos Olivares
(01/01/64)
Legal Vice-President and General
Counsel of Grupo Televisa.
Former Legal and Regulatory on
Telecommunications Vice-President,
former Legal General Director of
Special Affairs, former Corporate
Legal General Director, former
Legal Director of Litigation of
Grupo Televisa. Former General
Counsel of The Pepsi Bottling
Group Mexico. Former litigation
lawyer at Mr. Ramón Sánchez
Medal’s law firm.
April 2025
José Antonio Chedraui Eguía
(10/06/66)
Member of the Board of Directors
and Chief Executive Officer of
Grupo Comercial Chedraui, S.A.B.
de C.V.
Former Chief Executive Officer of
the Galas division of Grupo
Comercial Chedraui, S.A.B. de C.V.
April 2019
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90
Name and Date of Birth
Principal Occupation
Business Experience
First Elected
Francisco José Chevez Robelo
(07/03/29)
In-house advisor, co-founder and
retired partner of Chevez, Ruiz,
Zamarripa y Cía, S.C., Member of
the Audit Committee of Grupo
Televisa. Member of the Board of
Directors and Member and
Chairman of the Audit and
Corporate Practices Committee of
Empresas Cablevisión (subsidiary
of Grupo Televisa).
Former Managing Partner of Ruiz
Urquiza y Cia, S.C., representative
of Arthur Andersen & Co. Member
of the Board of Directors and
Chairman of the Audit Committees
of Regiomontana de Perfiles y
Tubos, S.A. de C.V., Quality Tube,
S.A. de
C.V. and Pytco, S.A. de C.V.
April 2003
Jean Michel Enriquez Dahlhaus
(02/05/70)
Partner, Creel, García-Cuéllar, Aiza
y Enriquez, S.C.
Partner of Creel, García-Cuéllar,
Aiza y Enríquez. Mentor and
Member of the Board of Directors
of Endeavor. Former professor of
Mergers and Acquisitions at
Universidad Iberoamericana.
Foreign Associate in the New York
City office of Cravath, Swaine &
Moore LLP.
April 2025
Jon Feltheimer
(09/02/51)
Chief Executive Officer of
Lionsgate.
Former President of Columbia
TriStar Television Group, former
Executive Vice President of Sony
Pictures Entertainment. Member of
the Boards of Lionsgate and Pilgrim
Media Group.
April 2015
José Luis Fernández Fernández
(05/18/59)
Advisor to Chevez, Ruiz, Zamarripa
y Cía., S.C., Member of the Board
of Directors of Apuestas
Internacionales, S.A. de C.V. and
Member of the Audit Committee
and Chairman of the Corporate
Practices Committee of Grupo
Televisa.
Member of the Board of Directors
of Controladora Vuela Compañía de
Aviación, S.A.B. de C.V. Alternate
member of the Board of Directors of
Arca Continental Corporativo.
Alternate Member of the Board of
Directors and Alternate Member of
the Audit and Corporate Practices
Committee of Empresas
Cablevisión (subsidiary of Grupo
Televisa).
April 2002
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91
Name and Date of Birth
Principal Occupation
Business Experience
First Elected
Salvi Rafael Folch Viadero
(08/16/67)
Chief Executive Officer of Grupo
Jumex.
Former Chief Executive Officer of
Grupo Televisa’s Cable Division,
Member of the Board of Consorcio
Ara, S.A.B. Member of the Board
and Chairman of the Audit and
Corporate Practices Committee of
Ollamani. Former Chief Financial
Officer of Grupo Televisa. Former
Vice President of Financial Planning
of Grupo Televisa. Former Member
of the Board of Directors and
Former Alternate Member of the
Executive Committee of Empresas
Cablevisión (subsidiary of Grupo
Televisa).
April 2002
Michael Thomas Fries
(02/06/63)
President and Chief Executive
Officer of Liberty Global, Ltd.
Vice Chairman of the Board of
Liberty Global, Chairman of
Sunrise Communications AG,
Executive Chairman of the Board of
Liberty Latin America, Member of
the Boards of Directors of Lionsgate
Entertainment, Lionsgate Studios,
GSMA and Cable Television Labs,
Trustee and Finance Committee
Member of The Paley Center for
Media and ICT Governor of the
World Economic Forum.
April 2015
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92
Name and Date of Birth
Principal Occupation
Business Experience
First Elected
Guillermo García Naranjo Álvarez
(07/02/56)
Chairman of the Audit Committee
and member of the Corporate
Practices Committee of Grupo
Televisa.
Former Chairman of the Board of
Trustees of Consejo Mexicano de
Normas de Información Financiera.
Former Chief Executive Officer and
Former Audit Partner of KPMG
Cárdenas Dosal, S.C. Member of
the Board and Chairman of the
Audit Committee of Grupo
Financiero Banamex, S.A. de C.V.,
Banco Nacional de México, S.A.,
Member of the Board of Directors,
Member of the Corporate Practices
Committee and Chairman of the
Audit Committee of Grupo Posadas,
S.A.B. de C.V. and Member of the
Audit Committee of Ollamani,
S.A.B. de C.V.
April 2018
Bernardo Gómez Martínez
(07/24/67)
Co-Chief Executive Officer and
Member of the Executive
Committee of Grupo Televisa.
Member of the Board of Empresas
Cablevisión (subsidiary of Grupo
Televisa). Co-Chief Executive
Officer of TelevisaUnivision
Mexico.
Member of the Boards of
TelevisaUnivision and Innova
(subsidiary of Grupo Televisa).
Former Executive Vice President
and Deputy Director of the
President of Grupo Televisa and
Former President of Cámara
Nacional de la Industria de Radio y
Televisión.
April 1999
Carlos Hank González
(09/01/71)
Chairman of the Board of Directors
of Grupo Financiero Banorte and
Banco Mercantil del Norte (Non-
Executive Director). Vice-President
of the Board of Directors of Gruma
(Non-Executive Director). Chief
Executive Officer and member of
the Board of Directors of Grupo
Hermes and Independent Member
of the Board of Directors of Grupo
Televisa.
Chairman of the Board of Directors
of Cerrey, Chairman of Fundación
Banorte, Former Chief Executive
Officer of Grupo Financiero
Interacciones, Banco Interacciones
and Interacciones Casa de Bolsa.
Former Deputy General Manager of
Grupo Financiero Banorte. Member
of the Boards of Directors of Bolsa
Mexicana de Valores and Grupo
Hermes.
April 2017
Enrique Krauze Kleinbort
(09/16/47)
Chief Executive Officer, Chairman
of the Board of Directors and
Founder of Editorial Clío, Libros y
Videos, S.A. de C.V. and Letras
Libres, S.A. de C.V.
Member of Academia Mexicana de
la Historia and Colegio Nacional.
April 1996
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93
Name and Date of Birth
Principal Occupation
Business Experience
First Elected
Denise Maerker Salmón
(01/08/65)
Executive producer of newscast “En
punto”.
Cast member on the debate program
“Tercer Grado”. Former Research
Professor and Director of
Communication at Centro de
Investigación y Docencia
Económicas (CIDE).
April 2022
Sebastian Mejía
(08/24/84)
President and Co-Founder of Rappi.
Co-Founder of Grability.
April 2021
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94
Name and Date of Birth
Principal Occupation
Business Experience
First Elected
Lorenzo Alejandro Mendoza
Giménez
(10/05/65)
Chief Executive Officer of
Empresas Polar.
Member of the MIT School of
Management Board, the Latin
American Board of Georgetown
University, the Latin America
Conservation Council (LACC), and
the Board of Trustees of
Universidad Metropolitana. Ashoka
Fellow and Member of the World
Economic Forum (named a Global
Young leader in 2005).
April 2009
Guadalupe Phillips Margain(2)
(02/07/71)
Chief Executive Officer of ICA
Tenedora, S.A. de C.V.
Former Chief Restructuring Officer
of Empresas ICA, S.A.B. de C.V.
Former Vice-President of Finance
and Risk of Grupo Televisa (left
more than five years ago). Member
of the Board of Directors of Grupo
Axo, ICA Tenedora, Controladora
Vuela de Aviación, Openbank and
Auna.
April 2012
Enrique Francisco José Senior
Hernández
(08/03/43)
Managing Director of Allen &
Company LLC.
Member of the Boards of Directors
of FEMSA, Cinemark USA, Inc.,
Grupo Televisa and
TelevisaUnivision.
April 2001
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95
Name and Date of Birth
Principal Occupation
Business Experience
First Elected
Eduardo Tricio Haro
(08/05/63)
Chairman of the Board of Directors
of Grupo Lala, Chairman of the
Executive Committee of
Aeromexico and Member of the
Corporate Practices Committee of
Grupo Televisa.
Chairman of Grupo Industrial
Nuplen, Fundación Lala and SER,
A.C. Member of the Boards of
Directors of Grupo Aeroméxico,
Aura Solar, Hospital Infantil de
México “Federico Gómez”,
Instituto Tecnológico y de Estudios
Superiores de Monterrey, Consejo
Mexicano de Negocios and
Instituto Nacional de Ciencias
Médicas y Nutrición “Salvador
Zubirán”.
April 2012
David M. Zaslav
(01/15/60)
President, Chief Executive Officer
and Director of Warner Bros.
Discovery, Inc.
Member of the Boards of Sirius
XM Radio, Inc., the Paley Center
for the Media, American
Cinematheque, Syracuse University
and NYU Langone.
April 2015
Alternate Directors:
In alphabetical order:
Herbert A. Allen III(3)
(06/08/67)
President of Allen & Company
LLC. Director of the Coca-Cola
Company.
Former Executive Vice-President
and Managing Director of Allen &
Company Incorporated.
April 2002
Joaquín Balcárcel Santa Cruz
(01/04/69)
Chief of Staff of the Executive
Chairman of the Board of Directors
of Grupo Televisa.
Member of the Board Directors of
Ollamani. Former Vice-President
— Legal and General Counsel of
Grupo Televisa. Former Vice-
President and General Counsel of
Television Division. Former Legal
Director of Grupo Televisa.
April 2000
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96
Name and Date of Birth
Principal Occupation
Business Experience
First Elected
Julio Barba Hurtado
(05/20/33)
Legal Advisor of Grupo Televisa
and Secretary of the Audit and
Corporate Practices Committee of
Empresas Cablevisión (subsidiary
of Grupo Televisa).
Former Legal Advisor to the Board
of Grupo Televisa.
December 1990
Jorge Agustín Lutteroth
Echegoyen
(01/24/53)
Vice-President and Corporate
Controller of Grupo Televisa.
Former Senior Partner of Coopers &
Lybrand, Despacho Roberto Casas
Alatriste, S.C. and former
Controller of Televisa Corporación.
Alternate Member of the Board of
Empresas Cablevisión (subsidiary
of Grupo Televisa). Alternate
Member of the Board of Managers
and the Executive Committee of
Innova (subsidiary of Grupo
Televisa).
April 2000
Raúl Morales Medrano
(05/12/70)
Partner of Chévez, Ruiz, Zamarripa
y Cia., S.C.
Member of the Board of Directors
and of the Audit and Corporate
Practices Committee of Empresas
Cablevisión (subsidiary of Grupo
Televisa).
April 2002
(1)
Emilio Azcárraga Jean is on leave from his position as Executive Chairman of the Board since October 24, 2024, until the investigation being
conducted by the United States Department of Justice, related to FIFA, is resolved. For a description of the investigation, see “Additional Information
—Legal Proceedings”.
(2)
Guadalupe Phillips Margain is the sister of Carlos Phillips Margain, the Company’s Chief Financial Officer.
(3)
Alternate of Mr. Enrique Francisco José Senior Hernández.
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97
Our Board of Directors
General. The management of our business is entrusted to our Board of Directors. Our bylaws currently provide for a Board of Directors of 20
members, at least 25% of which must be “independent directors” under Mexican law (as described below). The Mexican Securities Market Law provides
that the following persons, among others, do not qualify as independent:
●
our key executives or employees, as well as the statutory auditors, or comisarios, of our subsidiaries, including those individuals who have
occupied any of the described positions within a period of 12 months preceding the appointment;
●
individuals who have significant influence over our decision making processes;
●
controlling stockholders, in our case, the beneficiary of the Azcárraga Trust;
●
partners or employees of any company which provides advisory services to us or any company that is part of our same economic group and that
receives 10% or more of its income from us;
●
significant clients, suppliers, debtors or creditors, or members of the Board or executive officers of any such entities; or
●
spouses, family relatives up to the fourth degree, or cohabitants of any of the aforementioned individuals.
Our bylaws prohibit the appointment of individuals to our Board of Directors who: (i) are members of the board of directors or other management
boards of a company (other than the Company or its subsidiaries) that has one or more concessions to operate telecommunications networks in Mexico; or
(ii) directly or indirectly, are shareholders or partners of companies (other than the Company or its subsidiaries), that have one or more concessions to
operate telecommunications networks in Mexico, with the exception of ownership stakes that do not allow such individuals to appoint one or more
members of the management board or any other operation or decision making board.
Election of Directors. A majority of the members of our Board of Directors must be Mexican nationals and must be elected by Mexican stockholders.
All of our current directors and alternate directors were appointed and/or ratified in their positions by our 2025 annual stockholders’ special and general
meetings, which were held on April 29, 2025. A majority of the holders of the Series “A” Shares voting together elected eleven of our directors and
corresponding alternates and a majority of the holders of the Series “B” Shares voting together elected five of our directors and corresponding alternates. At
our special stockholders’ meetings, a majority of the holders of the Series “L” and Series “D” Shares each elected two of our directors and alternate
directors, each of which must be an independent director. Each alternate director may vote in the absence of a corresponding director. The number of
directors elected to our Board of Directors is determined by our stockholders pursuant to our bylaws. No other governing body of the Company, including
the Corporate Practices Committee, has the authority to set and/or limit the number of directors. Our stockholders’ meetings held on April 26, 2024
resolved that our directors and alternate directors be elected annually for a term that will expire when new appointments are approved by our stockholders
as provided by our bylaws and applicable law. In addition, if any director is elected for a specific term and such term expires or any director resigns from
his or her position, any such director will continue to serve in his or her position for up to a 30-day term; in this case, the Board of Directors is entitled to
appoint provisional directors without the approval of the stockholders’ meeting.
Quorum; Voting. In order to have a quorum for a meeting of the Board of Directors, generally at least 50% of the directors or their corresponding
alternates must be present. However, in the case of a meeting of the Board of Directors to consider certain proposed acquisitions of our capital stock, at
least 75% of the directors or their corresponding alternates must be present. In the event of a deadlock of our Board, our Chairman will have the deciding
vote.
Meetings; Actions Requiring Board Approval. Our bylaws provide that our Board must meet at least quarterly, and that our Chairman, 25% of the
Board members, our Secretary, alternate Secretary, the Chairman of the Audit Committee or the Chairman of the Corporate Practices Committee may call
for a Board meeting.
Pursuant to the Mexican Securities Market Law and our bylaws, our Board of Directors must approve, among other matters:
●
our general strategy;
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98
●
with input from the Audit Committee, on an individual basis: (i) our financial statements; (ii) unusual or non-recurrent transactions and any
transactions or series of related transactions during any calendar year that involve (a) the acquisition or sale of assets with a value equal to or
exceeding 5% of our consolidated assets, or (b) the giving of collateral or guarantees or the assumption of liabilities, equal to or exceeding 5% of
our consolidated assets; (iii) agreements with our external auditors; and (iv) accounting policies within IFRS;
●
with input from the Corporate Practices Committee, on an individual basis: (i) any material transactions with related parties, in accordance with
the criteria set forth in the Mexican Securities Market Law, subject to certain limited exceptions; and (ii) the appointment of our Chief Executive
Officer (position currently held by our Co-Chief Executive Officers) and his or her compensation;
●
creation of special committees and granting them the power and authority, provided that the committees will not have the authority, which by law
or under our bylaws is expressly reserved for the stockholders or the Board;
●
matters related to antitakeover provisions provided for in our bylaws; and
●
the exercise of our general powers in order to comply with our corporate purpose.
Duty of Care and Duty of Loyalty. The Mexican Securities Market Law imposes a duty of care and a duty of loyalty on directors. The duty of care
requires our directors to act in good faith and in the best interests of the Company. In carrying out this duty, our directors are required to obtain the
necessary information from the Co-Chief Executive Officers, the executive officers, the external auditors or any other person to act in the best interests of
the Company. Our directors are liable for damages and losses caused to us and our subsidiaries as a result of violating their duty of care.
The duty of loyalty requires our directors to preserve the confidentiality of information received in connection with the performance of their duties and
to abstain from discussing or voting on matters in which they have a conflict of interest. In addition, the duty of loyalty is breached if a stockholder or
group of stockholders is knowingly favored or if, without the express approval of the Board of Directors, a director takes advantage of a corporate
opportunity. The duty of loyalty is also breached, among other things, by (i) failing to disclose to the Audit Committee or the external auditors any
irregularities that the director encounters in the performance of his or her duties; or (ii) disclosing information that is false or misleading or omitting to
record any transaction in our records that could affect our financial statements. Directors are liable for damages and losses caused to us and our subsidiaries
for violations of this duty of loyalty. This liability also extends to damages and losses caused as a result of benefits obtained by the director or directors or
third parties, as a result of actions of such directors.
Our directors may be subject to criminal penalties of up to 12 years imprisonment for certain illegal acts involving willful misconduct that result in
losses to us. Such acts include the alteration of financial statements and records.
Liability actions for damages and losses resulting from the violation of the duty of care or the duty of loyalty may be exercised solely for our benefit
and may be brought by us, or by stockholders representing 5% or more of our capital stock, and criminal actions only may be brought by the Mexican
Ministry of Finance, after consulting with the Mexican National Banking and Securities Commission. As a safe harbor for directors, the liabilities specified
above (including criminal liability) will not be applicable if the director acting in good faith: (i) complied with applicable law, (ii) made the decision based
upon information provided by our executive officers or third-party experts, the capacity and credibility of which could not be subject to reasonable doubt,
(iii) selected the most adequate alternative in good faith or if the negative effects of such decision could not have been foreseeable, and (iv) complied with
stockholders’ resolutions provided the resolutions do not violate applicable law.
The members of the board are liable to our stockholders only for the loss of net worth suffered as a consequence of disloyal acts carried out in excess
of their authority or in violation of our bylaws.
In accordance with the Mexican Securities Market Law, supervision of our management is entrusted to our Board of Directors, which shall act through
the Audit and the Corporate Practices Committees for such purposes, and to our external auditor.
Audit Committee. The Audit Committee is currently composed of three independent members: Guillermo García Naranjo Álvarez, the Chairman, José
Luis Fernández Fernández and Francisco José Chevez Robelo. The Chairman of the Audit Committee was ratified at our annual stockholders’ meeting held
on April 29, 2025, and our Board of Directors appointed the remaining members.
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99
The Audit Committee is responsible for, among other things: (i) submit to the Board of Director’s approval, the annual designation and/or ratification
of the firm engaged to perform the external audit, as well as the engagement of services other than those related to the external audit to be performed by the
external auditors; (ii) evaluating the performance of our external auditors and analyzing their reports, (iii) discussing our financial statements with the
persons in charge of their preparation, and based on such discussions, recommending their approval to the Board of Directors, (iv) informing the Board of
Directors of the status of our internal controls and their adequacy, (v) requesting reports of executive officers whenever it deems appropriate, (vi) informing
the Board of any irregularities that it may encounter as part of the performance of its duties, (vii) receiving and analyzing recommendations and
observations made by the stockholders, directors, executive officers, our external auditors or any third party and taking the necessary actions, (viii) review
and approve, if applicable, certain related party transactions that are not considered material in accordance with the Mexican Securities Market Law;
(ix) calling stockholders’ meetings when requested, (x) providing opinions to our Board of Directors with respect to specific matters required under the
Mexican Securities Market Law, (xi) requesting and obtaining opinions from independent third parties, as it deems convenient, in connection with the
performance of its duties; and (xii) assisting the Board in the preparation of annual reports rendered by the Board to the shareholders and other reporting
obligations.
The Chairman of the Audit Committee shall prepare an annual report to our Board of Directors with respect to the activities of the Audit Committee,
which shall include, among other things: (i) the status of the internal controls and internal audits and any deviations and deficiencies thereof, taking into
consideration the reports of external auditors and independent experts, (ii) the results of any preventive and corrective measures taken based on results of
investigations in respect of non-compliance of operating and accounting policies, (iii) the evaluation of external auditors, (iv) the main results from the
review of our financial statements and those of our subsidiaries, (v) the description and effects of changes to accounting policies, (vi) the measures adopted
as a result of observations of stockholders, directors, executive officers and third parties relating to accounting, internal controls, and internal or external
audits, and (vii) compliance with stockholders’ and directors’ resolutions.
Corporate Practices Committee. The Corporate Practices Committee is currently composed of the following independent members: José Luis
Fernández Fernández, the Chairman, Guillermo García Naranjo Álvarez and Eduardo Tricio Haro. The Chairman of the Corporate Practices Committee
was ratified at our annual stockholders’ meeting held on April 29, 2025, and our Board of Directors appointed the remaining members.
The Corporate Practices Committee is responsible for, among other things: (i) reviewing and approving corporate goals and objectives relevant to the
compensation of the Co-Chief Executive Officers, and reviewing the evaluations of the Co-Chief Executive Officers’ performance in light of those goals
and objectives, (ii) reviewing and approving the annual base salaries and annual incentive opportunities of the relevant executive, reviewing the parameters
evaluating the executive officers’ performance and recommending executive officer compensation policies and guidelines to our Board of Directors,
(iii) reviewing all other incentive awards and opportunities (cash-based and equity-based), any employment agreements, any change in control agreements
and change in control provisions affecting compensation and benefits and any special or supplemental compensation and benefits for the relevant executive
and individuals who formerly served as executive officers, and (iv) reviewing and recommending certain material transactions entered into with related
parties, in accordance with the Mexican Securities Market Law.
The Chairman of the Corporate Practices Committee shall prepare an annual report to the Board of Directors with respect to the activities of the
Corporate Practices Committee, which shall include, among other things: (i) observations with respect to the performance of the relevant executives,
(ii) material related party transactions entered into during the course of the fiscal year, and (iii) the compensation packages of the relevant executives.
Executive Committee of Our Board of Directors. Our Board of Directors has an Executive Committee. Each member is appointed for a one-year term
at each annual general stockholders’ meeting. Our bylaws provide that the Executive Committee may generally exercise the powers of the Board of
Directors, except those expressly reserved for the Board in our bylaws or by applicable law. The Executive Committee is currently composed by Alfonso de
Angoitia Noriega and Bernardo Gómez Martínez. Emilio Azcárraga Jean is on leave from his position as Executive Chairman of the Board since October
24, 2024, until the investigation being conducted by the United States Department of Justice, related to FIFA, is resolved. For a description of the
investigation, see “Additional Information—Legal Proceedings”.
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100
Executive Officers
The following table sets forth the names of our executive officers, their dates of birth, their current position, their prior business experience and the
years in which they were appointed to their current positions:(1)
Name and Date of Birth
Principal Occupation
Business Experience
First Elected
In alphabetical order:
Alfonso de Angoitia
Noriega
(01/17/62)
Co-Chief Executive Officer, Member of the
Executive Committee of Grupo Televisa.
Member of the Board of Empresas
Cablevisión (subsidiary of Grupo Televisa).
Co-Chief Executive Officer of
TelevisaUnivision Mexico.
Executive Chairman of the Board of
TelevisaUnivision. Member of the Boards of
Liberty Latin America, Grupo Axo and
Grupo Financiero Banorte and Innova
(subsidiary of Grupo Televisa). Chairman of
the Board of Trustees of Fundación Kardias.
Member of the Boards of Trustees of
Fundación Mexicana para la Salud,
Fundación UNAM and The Paley Center for
Media. Former Executive Vice President and
Chief Financial Officer of Grupo Televisa.
April 1997
Bernardo Gómez
Martínez (07/24/67)
Co-Chief Executive Officer and Member of
the Executive Committee of Grupo Televisa.
Member of the Board of Empresas
Cablevisión (subsidiary of Grupo Televisa).
Co-Chief Executive Officer of
TelevisaUnivision Mexico.
Member of the Boards of TelevisaUnivision
and Innova (subsidiary of Grupo Televisa).
Former Executive Vice President and Deputy
Director of the President of Grupo Televisa
and Former President of Cámara Nacional de
la Industria de Radio y Televisión.
April 1999
Carlos Phillips Margain(2)
(05/15/74)
Chief Financial Officer of Grupo Televisa.
Former Managing Director of Finance of
Grupo Televisa. Former Investment Banker
at J.P. Morgan, Goldman Sachs, BBVA, and
Itaú. Member of the Board of Managers and
the Executive Committee of Innova
(subsidiary of Grupo Televisa). Alternate
member of the Board of Empresas
Cablevisión (subsidiary of Grupo Televisa).
October 2021
(1)
Emilio Azcárraga Jean is on leave from his position as Executive Chairman of the Board since October 24, 2024, until the investigation being
conducted by the United States Department of Justice, related to FIFA, is resolved. For a description of the investigation, see “Additional Information
—Legal Proceedings”.
(2)
Carlos Phillips Margain is the brother of Guadalupe Phillips Margain, a member of the Company’s Board of Directors.
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101
Compensation of Directors and Officers
For the year ended December 31, 2024, we paid our directors, alternate directors and officers for services in all capacities aggregate compensation of
approximately Ps.527.6 million (U.S.$25.3 million using the Interbank Rate, as reported by Banco Citi México, S.A., as of December 31, 2024). This
compensation included certain amounts related to the use of assets and services of the Company, as well as travel expenses reimbursed to directors and
officers. See “—Use of Certain Assets and Services” below.
On April 29, 2025, at our general stockholders’ meeting, our stockholders approved the compensation plan for our Board of Directors and the Secretary
of the Board of Directors under which our Directors and the Secretary of the Board may elect to receive (i) U.S.$15,000 for each meeting of the Board to
which they attend (or U.S.$25,000 in the case of Board members traveling from outside of Mexico to attend Board meetings), or (ii) an annual award in the
form of CPOs (or in its case, other instrument issued based on shares of the Company), in an amount equivalent to U.S.$150,000, which would be released
on the first anniversary of such award, in exchange for the payment of Ps.1.60 for each such CPO or equivalent instrument. In our April 29, 2025 general
stockholders’ meeting, our stockholders also ratified the remuneration of U.S.$15,000 to be paid to alternate members of the Board and members of the
Audit and Corporate Practices Committees, for each meeting of the Board and/or the Audit and Corporate Practices Committees to which they attend.
As of December 31, 2024, we have made Ps.78.8 million in contributions to our pension and seniority premium plans on behalf of our directors,
alternate directors and officers. Projected benefit obligations as of December 31, 2024 were approximately Ps.228.9 million.
Our compensation programs for officers play a key role in accomplishing the Company’s operating and financial objectives. The primary goals of our
compensation programs include (i) motivating our officers to maximize their contribution in order to accomplish the Company’s objectives, (ii) aligning
our officers’ interests with the success of the Company and the creation of shareholder value and (iii) attracting and retaining the most qualified employees
for our various businesses.
We place great importance on our ability to attract and retain talented executives and on our capacity to implement incentive programs that motivate
executives and reward performance. In general, our compensation programs are designed to take into consideration the specific objectives and
circumstances of the business, the scope of an executive’s responsibilities, and a determination of what is considered competitive compensation in the
market for similar roles, to the extent such data is available. Our compensation programs provide the opportunity to reward executives for contributing to
the annual and long-term financial, operational, and share price performance. We continue to refine our compensation programs in order to adjust to market
conditions and strengthen the alignment between executive and shareholder interests.
Certain of our officers are entitled to receive annual performance bonuses. The eligibility, parameters and amount vary among the different divisions
and/or officers. In general, annual performance bonuses are determined based on a mix of financial, operational and strategic objectives as well as
individual performance objectives tailored to each executive’s role in the Company. The amounts payable under the annual performance bonus depend on
the results achieved, and include certain qualitative and/or quantitative objectives that can be related to revenues, EBITDA, cash flow, budgets, market
share and others.
We have entered into certain Compensation and Retention Agreements with several executive officers. The conditions applicable to such contracts
were approved by the Board of Directors and include, among other conditions, salary, annual retention bonus, annual performance bonus and long-term
equity incentive plan. In order to be entitled to the annual performance bonus, certain qualitative and quantitative targets must be met, including parameters
related to revenue and EBITDA. If targets are not met, the amounts to be paid decline, and if targets are exceeded, the bonus can reach up to 120% of the
target annual performance bonus. The target annual performance bonus is set at approximately one time the fixed component established in the relevant
agreements. The long-term equity incentive plan represents more than half of the total compensation of such executives. These agreements may be updated
and extended in the future under similar terms and conditions subject to relevant approvals.
In addition, we have granted our executive officers and directors rights to purchase CPOs under the Stock Purchase Plan and the Long-Term Retention
Plan. See “— Stock Purchase Plan and Long-Term Retention Plan” below.
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Use of Certain Assets and Services
We maintain an overall security program for Mr. Azcárraga and for certain executive officers, as well as, in some cases, for their families, and for other
specific employees and service providers, as permitted under our “Política de Seguridad”, or Security Policy, due to business-related security concerns. We
refer to the individuals described above as Key Personnel. Our security program includes the use of our personnel, assets and services to accomplish
security objectives.
In accordance with this program, we require, under certain circumstances, that certain authorized Key Personnel use aircrafts, either owned or leased
by us, for non-business, as well as business travel for our benefit rather than as a personal benefit. The use of such aircrafts is carried out in accordance
with, among others, our “Política de Seguridad” policy, which establishes guidelines under which authorized Key Personnel may use such aircrafts for
personal purposes. If the use of such aircrafts for personal purposes exceeds the specified number of hours, the relevant Key Personnel must reimburse us
for the cost of operating the aircrafts during the excess time of use. The aggregate amount of compensation set forth in “— Compensation of Directors and
Officers” does include the cost to us of providing this service.
In addition, certain Key Personnel are provided with security systems and equipment for their residences and/or automobiles and with security advice
and personal protection services at their residences. The use of these security services is provided in accordance with our “Política de Seguridad” policy.
The cost of these systems and services are incurred as a result of business-related concerns and are not considered for their personal benefit. As a result, the
Company has not included such cost in “— Compensation of Directors and Officers”.
Further, certain Key Personnel are provided with advisory services, including legal, tax, investment and accounting services, through approved
company providers, executives and Company personnel. The Company does not include the cost of these services in the aggregate amount of compensation
set forth in “— Compensation of Directors and Officers”.
Stock Purchase Plan and Long-Term Retention Plan
The stock purchase plan has been implemented in several stages since 1999, through a series of conditional sales to plan participants of CPOs. At our
general extraordinary and ordinary stockholders’ meeting held on April 30, 2002, our stockholders authorized the creation and implementation of a Long-
Term Retention Plan, as well as the creation of one or more special purpose trusts to implement the Long-Term Retention Plan. Pursuant to our Long-Term
Retention Plan, we have granted eligible participants, who consist of unionized and non-unionized employees, including key personnel (“Plan
Participants”), awards as conditional sales. As of October 2010, our stock purchase plan and our Long-Term Retention Plan were consolidated under a
single special purpose trust. Pursuant to the resolutions adopted by our stockholders, we have not, and do not intend to, register shares under the Securities
Act that are allocated to the Long-Term Retention Plan.
The CPOs, CPO equivalents and underlying shares that are part of the stock purchase plan will be held by the special purpose trust and will be voted
with the majority of the CPOs, CPO equivalents and underlying shares represented at the relevant meeting until these securities are transferred to Plan
Participants or otherwise sold in the open market. Our Executive President of the Board, the Board of Directors, the Corporate Practices Committee and the
technical committee of the special purpose trust have authority to make decisions related to, and amendments to, the stock purchase plan, including the
ability to accelerate vesting terms, to modify the purchase price, and to grant, release or transfer CPOs and/or CPO equivalents, subject to conditional sale
agreements, to Plan Participants in connection with sales for purposes of making the payment of the related purchase price.
Historically, the price at which the conditional sales of the awards were made to beneficiaries was based on the lowest of (i) the closing price of the
CPO on March 31 of the year of the relevant award, and (ii) the average price of the CPO during the first three months of the year of the relevant award.
The resulting price would be reduced by dividends, a liquidity discount and by the growth of the consolidated or relevant segment Operating Income
Before Depreciation and Amortization, or OIBDA, (including OIBDA affected by acquisitions) between the date of award and the vesting date, among
others.
Beginning with the grants awarded in respect of fiscal year 2020 under the Long-Term Retention Plan, as approved by the Board of Directors of the
Company, such awards may also be granted at a sale price equal to the nominal value of the CPO, which was determined at Ps.1.60. This is intended to
further align the incentives of Plan Participants with our shareholders and the Company, and the Company believes this reflects current market practices.
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103
In April 2007, the Board of Directors, with input from the then Audit and Corporate Practices Committee, reviewed the compensation of our former
Chief Executive Officer and decided to include our former Chief Executive Officer in our Long-Term Retention Plan as well as in any other plan granted to
our employees in the future. See “— Compensation of Directors and Officers”.
At our annual general ordinary stockholders’ meeting held on April 2, 2013, our stockholders approved that the number of CPOs that may be granted
annually under the Long-Term Retention Plan shall be up to 1.5% of the capital of the Company. As of December 31, 2024, approximately 16.5 million
CPOs or CPO equivalents that were transferred to Plan Participants were sold in the open market from 2022 to 2024. Additional sales will continue to take
place during or after 2025.
As a result of the Spin-off, the participants of the Long-Term Retention Plan holding CPOs or CPOs equivalents of the Company received the
corresponding CPOs or CPOs equivalents of Ollamani, the exercise of which is conditioned on the exercise of the Company’s CPOs or CPOs equivalents.
Beginning with the grants awarded in respect of fiscal year 2024, the Board of Directors, with input from the Audit and Corporate Practices
Committee, reviewed certain adjustments to closer align the Long-Term Retention Plan with market practices, including narrowing of eligibility of Plan
Participants and granting awards at a sale price equal to the nominal value of the CPO.
As of March 31, 2025, the special purpose trust created to implement the Long-Term Retention Plan owned approximately 211.0 million CPO
equivalents. This figure is net of approximately 38.5 million, 27.6 million and 20.4 million CPO equivalents vested in 2022, 2023 and 2024, respectively
and the return of CPOs or CPO equivalents as a result of awards terminated in previous years. Of such 211.0 million CPO equivalents, approximately
80.2% are in the form of CPOs and the remaining 19.8% are in the form of “A”, “B”, “D” and/or Series “L” Shares. As of March 31, 2025, approximately
87.1 million CPO equivalents have been reserved and will become vested between 2025 and 2027 at prices ranging from Ps.1.60 to Ps.38.32 per CPO or
CPO equivalent which may be reduced, when applicable, by dividends, a liquidity discount and the growth of the consolidated or relevant segment OIBDA
(including OIBDA affected by acquisitions) between the date of award and the vesting date, among others.
As we have done in the past, we may consider further capital increases, among other alternatives, to continue replenishing the Long-Term Retention
Plan. Any such capital increases would be subject to the appropriate corporate approvals, including stockholders’ preemptive rights as well as the
authorization by our stockholders at the stockholders’ meeting.
Share Ownership of Directors and Officers
Share ownership of our directors, alternate directors and executive officers is set forth in the table under “Major Stockholders and Related Party
Transactions”. Except as set forth in such table, none of our directors, alternate directors or executive officers is currently the beneficial owner of more than
1% of any class of our capital stock or conditional sale agreements or options representing the right to purchase more than 1% of any class of our capital
stock.
Employees and Labor Relations
The following table sets forth the number of employees and a breakdown of employees by main category of activity and geographic location as of the
end of each year in the three-year period ended December 31, 2024:
Year Ended December 31,
2024
2023
2022
Total number of employees
28,038
32,932
37,374
Category of activity:
Employees
28,004
32,895
37,339
Executives
34
37
35
Geographic location:
Mexico
27,962
32,919
37,356
Latin America (other than Mexico)
—
—
2
U.S.
5
4
7
Europe
71
9
9
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104
As of December 31, 2024, 2023 and 2022, approximately 38%, 31% and 27% of our employees, respectively, were represented by unions. We believe
that our relations with our employees are good. Under Mexican law, the agreements between us and most of our television and cable television union
employees are subject to renegotiation on an annual basis in January of each year.
As part of the TelevisaUnivision Transaction as of December 31, 2022, approximately 9,300 employees were transferred from the Company to certain
subsidiaries of TelevisaUnivision.
Disclosure of a Registrant’s Action to Recover Erroneously Awarded Compensation
Not applicable.
Item 7. Major Stockholders and Related Party Transactions
The following table sets forth information about the beneficial ownership of our capital stock by our directors, alternate directors, executive officers,
and each person who is known by us to own more than 5% of the currently outstanding Series “A” Shares, Series “B” Shares, Series “L” Shares or
Series “D” Shares as of March 31, 2025. Except as set forth below, we are not aware of any holder of more than 5% of any class of our Shares.
Aggregate
Percentage of
Shares Beneficially Owned(1)(2)
Outstanding
Series “A” Shares
Series “B” Shares
Series “D” Shares
Series “L” Shares
Shares
Percentage
Percentage
Percentage
Percentage
Beneficially
Identity of Owner
Number
of Class
Number
of Class
Number
of Class
Number
of Class
Owned
Azcárraga Trust(3)
52,991,825,705
44.7 %
67,814,604
0.1 %
107,886,870
0.1 %
107,886,870
0.1 %
15.6 %
Dodge & Cox (4)
8,107,721,250
6.8 %
7,134,794,700
13.0 %
11,350,809,750
13.6 %
11,350,809,750
13.6 %
11.1 %
Fintech Holdings, Inc.(5)
6,507,725,700
5.5 %
5,726,798,616
10.4 %
9,110,815,980
10.9 %
9,110,815,980
10.9 %
8.9 %
BlackRock, Inc.(6)
3,175,367,100
2.7 %
2,794,323,048
5.1 %
4,445,513,940
5.3 %
4,445,513,940
5.3 %
4.4 %
(1)
Unless otherwise indicated, the information presented in this section is based on the number of shares authorized, issued and outstanding as of March
31, 2025. The number of shares issued and outstanding for legal purposes as of March 31, 2025 was 59,687,500,000 Series A Shares, 52,525,000,000
Series B Shares, 83,562,500,000 Series D Shares and 83,562,500,000 Series L Shares, in the form of CPOs, and an additional 58,926,613,375 Series A
Shares, 2,357,207,692 Series B Shares, 238,595 Series D Shares and 238,595 Series L Shares not in the form of CPOs. For financial reporting
purposes under IFRS Accounting Standards only, the number of shares authorized, issued and outstanding as of March 31, 2025 was 55,280,706,300
Series A Shares, 48,647,021,544 Series B Shares, 77,392,988,820 Series D Shares and 77,392,988,820 Series L Shares in the form of CPOs, and an
additional 56,405,002,139 Series A Shares, 186,537 Series B Shares, 238,541 Series D Shares and 238,541 Series L Shares not in the form of CPOs.
The number of shares authorized, issued and outstanding for financial reporting purposes under IFRS Accounting Standards as of March 31, 2025 does
not include 176,271,748 CPOs and an additional 2,521,611,236 Series A Shares, 2,357,021,155 Series B Shares, 54 Series D Shares and 54 Series L
Shares not in the form of CPOs acquired primarily by the special purpose trust we created to implement our long-term retention plan. See Note 17 to
our consolidated year-end financial statements.
(2)
Except through the Azcárraga Trust, none of our directors and executive officers currently beneficially owns more than 1% of our outstanding Series
“A” Shares, Series “B” Shares, Series “D” Shares or Series “L” Shares. See “Directors, Senior Management and Employees — Share Ownership of
Directors and Officers”. This information is based on information provided by directors and executive officers.
(3)
For a description of the Azcárraga Trust, see “— The Major Stockholders” below.
(4)
Based on information included in the report on Form 13F by Dodge & Cox filed on February 13, 2025, as of December 31, 2024 and other publicly
available information.
(5)
Based solely on information included in the report on Schedule 13G by Fintech Holdings, Inc. filed on February 14, 2025, as of December 31, 2024.
(6)
Based solely on information included in the report on Schedule 13G by Blackrock, Inc. filed on February 5, 2025, as of December 31, 2024.
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105
The Major Stockholders
The Azcárraga Trust, a trust for the benefit of Emilio Azcárraga Jean, currently holds 44.7% of the outstanding Series “A” Shares, 0.1% of the
outstanding Series “B” shares, 0.1% of the outstanding Series “D” Shares and 0.1% of the outstanding Series “L” Shares of the Company. As a result,
Emilio Azcárraga Jean currently controls the vote of such shares through the Azcárraga Trust. The Series “A” Shares held through the Azcárraga Trust
constitute a majority of the Series “A” Shares whose holders are entitled to vote because non-Mexican holders of CPOs or GDSs are not permitted to vote
the underlying Series “A” Shares in accordance with the trust agreement governing the CPOs and the Company’s bylaws. Accordingly, and so long as non-
Mexicans own more than a minimal number of Series “A” Shares, Emilio Azcárraga Jean will have the ability to direct the election of 11 out of 20
members of our Board of Directors, as well as prevent certain actions by the stockholders, including dividend payments, mergers, spin-offs, changes in
corporate purpose, changes of nationality and amendments to the anti-takeover provisions of our bylaws.
Pursuant to our bylaws, holders of Series “B” Shares are entitled to elect five out of 20 members of our Board of Directors.
Because the Azcárraga Trust only holds a limited number of Series “B” Shares, there can be no assurance that individuals nominated by the Azcárraga
Trust appointees will be elected to our Board.
We believe that as of March 31, 2025, approximately 290 million of GDSs were held of record by 64 persons with U.S. addresses. Those GDSs
represent 30.6% of the outstanding Series “A” Shares, 58.1% of the outstanding Series “B” Shares, 60.8% of the outstanding Series “D” Shares and 60.8%
of the outstanding Series “L” Shares of the Company. Before giving effect to the 2004 recapitalization, substantially all of the outstanding Series “A”
Shares not held through CPOs were owned by Televicentro and a special purpose trust created for our Long-Term Retention Plan, as described under
“Major Stockholders and Related Party Transactions” and “Directors, Senior Management and Employees—Stock Purchase Plan and Long-Term Retention
Plan”. For more information regarding our 2004 recapitalization, please refer to our Form 6-K filed with the SEC on March 25, 2004.
Related Party Transactions
Transactions and Arrangements with Univision. We have in the past entered into, and on an ongoing basis continue to enter into, transactions with
Univision in the ordinary course of business. In December 2010, the Company and Univision announced the completion of certain agreements by which,
among other transactions, the Company made an investment in BMP (now known as Univision Holdings, Inc., or UHI), the parent company of Univision,
and the PLA between the Company and Univision was amended and extended through the later of 2025 or 90 months after the Company voluntarily sells
two-thirds of its equity interests in UHI. Univision became a related party to the Company as of December 2010 as a result of these transactions.
On January 31, 2022, we completed the TelevisaUnivision Transaction pursuant to which, among other things, we contributed our former Content
business (other than certain assets including the main real estate associated with the production facilities and Mexican over-the-air broadcast concessions
and transmission infrastructure, as well as assets relating to our former news business which was transferred at closing to an entity controlled by Emilio
Fernando Azcárraga Jean) to Univision. After the closing of the TelevisaUnivision Transaction, news programs are owned by the News Company and
licensed to TelevisaUnivision. In consideration for the contribution of our former Content business, we received approximately U.S.$4.5 billion in a
combination of cash (U.S.$3.0 billion) and U.S.$1.5 billion of common and preferred shares of TelevisaUnivision, excluding closing consideration
adjustments. Additionally, as part of the TelevisaUnivision Transaction, we received consideration of Ps.940 million for the transfer of rights of news
content production to a related party other than TelevisaUnivision. The TelevisaUnivision Transaction was partially financed by Univision through a new
Series C preferred equity investment in TelevisaUnivision of U.S.$1.0 billion in the aggregate led by ForgeLight, along with the SoftBank Latin American
Fund, with participation from Google and The Raine Group, as well as debt financing. As of March 31, 2025, we owned a 42.6% equity interest on an as-
converted basis (excluding unvested and/or unsettled stock, restricted stock units and options) in TelevisaUnivision and we have certain governance
arrangements in connection therewith.
As part of the TelevisaUnivision Transaction, the PLA and the MLA were assigned to an affiliate of UHI, and we will no longer receive any royalties
from Univision under the PLA.
Also, as part of the TelevisaUnivision Transaction, we contributed to Univision several intellectual property assets, and TelevisaUnivision granted us a
license to use the Televisa trademark for an indefinite term, except in the event of a breach by any of the parties, under a Global Trademark License
Agreement entered into by and between us and TelevisaUnivision on January 31, 2022.
For a description of our arrangements with Univision, see “Information on the Company—Business Overview—TelevisaUnivision” and “Operating
and Financial Review and Prospects—TelevisaUnivision Transaction”.
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106
Transactions and Arrangements with Ollamani. As part of the Spin-off, we and Ollamani entered into a Transition Services Agreement, which
include administrative, network and infrastructure, information security, legal and regulatory systems, and other related services, which are expected to be
provided by us to Ollamani for 12 months from the date of the Spin-off. This Transition Services Agreement has been extended for 12 months, subject to
early termination, including with respect to the scope of the services, by the mutual agreement of the parties.
Transactions and Agreements with Our Directors and Officers. During 2024, we entered into contracts leasing office space directly or indirectly from
certain of our directors and officers for an aggregate amount of Ps.25.51 million. The leases have aggregate annual lease payments for 2025 equal to
approximately Ps.27.74 million. We believe that the terms of these leases are comparable to terms that we would have entered into with third parties for
similar leases.
Certain of our executive officers have in the past, and from time to time in the future may, purchase debt securities issued by us and/or our subsidiaries
from third parties in negotiated transactions. Certain of our executive officers and directors participate in our stock purchase plan and Long-Term Retention
Plan. See “Directors, Senior Management and Employees —Stock Purchase Plan and Long-Term Retention Plan”.
Transactions and Arrangements with Affiliates and Related Parties of Our Directors, Officers and Major Stockholders
Consulting Services. Instituto de Investigaciones Sociales, S.C. (“IIS”), a consulting firm which is controlled by Ariana Azcárraga De Surmont, the
sister of Emilio Azcárraga Jean, has from time to time provided consulting and research services to the Company’s subsidiaries. IIS provided services to
Fundacion Televisa, A.C. in 2024.
Citibanamex participation in Syndicated Loan and Revolving Credit Facility. In June 2019, the Company entered into a long-term credit agreement
with a syndicate of banks, including Citibanamex, with maturity in 2024, which was prepaid in April 2024. An affiliate of Citibanamex also acted as joint
lead arranger and joint book runner with other banks. In February 2022, the Company renewed its revolving credit facility with several lenders and other
financial institutions, including CitiBanamex, with maturity in 2025, which was terminated in April 2024. Those loans were made on terms substantially
similar to those offered by Citibanamex to third parties. Emilio Azcárraga Jean was a member of the Board of Citibanamex. For a description of amounts
outstanding under, and the terms of, our existing credit facilities with Citibanamex, see “Operating and Financial Review and Prospects—Results of
Operations—Liquidity, Foreign Exchange and Capital Resources—Indebtedness”.
Advertising Services. Several members of our current Board serve as members of the Boards and/or are stockholders of other companies. See
“Directors, Senior Management and Employees”. Some of these companies, including Grupo Comercial Chedraui, Grupo Financiero Banorte, Grupo Lala
and Grupo Axo, among others, have purchased advertising services from us in connection with the promotion of their respective products and services from
time to time.
Legal and Advisory Services. During 2024, Mijares, Angoitia, Cortés y Fuentes, S.C., a Mexican law firm, provided us with legal and advisory
services, and we expect that this will continue to be the case in the future. Ricardo Maldonado Yáñez, a partner from the law firm of Mijares, Angoitia,
Cortés y Fuentes, S.C., serves also as Secretary of our Board of Directors and Secretary to the Executive Committee of our Board of Directors. We believe
that the fees we paid for these services were comparable to those that we would have paid another law firm for similar services. Our co-Chief Executive
Officer Alfonso de Angoitia was a founding partner of the firm. Mr. de Angoitia requested a leave of absence in January 2002. In 2012, the leave of absence
was formally terminated and Mr. de Angoitia officially ceased being a partner of the firm. Since 2002, when Mr. de Angoitia left the firm, he has not had
any role or active participation at the firm, nor has he benefitted from participation in any economic distributions by the firm.
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We have engaged Allen & Company for several years to provide the Company with advisory services related to strategic transactions, and we plan to
continue to engage Allen & Company for advisory services related to strategic transactions of the Company. Two of our directors are directors of Allen &
Company as well. These agreements were entered into on an arm’s length basis. We believe that the amounts paid and to be paid under these agreements to
Allen & Company are comparable to those paid to third parties for these types of services. Furthermore, the Company typically considers different advisory
services providers and obtains quotes for specific projects before engaging with such providers, and the Company customarily engages more than one firm.
For further information about our related party transactions, see Note 20 to our consolidated year-end financial statements.
Item 8. Financial Information
See “Financial Statements” and pages F-1 through F-87, which are incorporated in this Item 8 by reference.
Item 9. The Offer and Listing
Trading Information
Since December 1993, the GDSs have been traded on the New York Stock Exchange, or NYSE, under the symbol “TV” and the CPOs have been
traded on the Mexican Stock Exchange under the symbol “TLEVISACPO”. In September 2007, we removed JPMorgan Chase Bank, N.A. as the
depository for the GDSs and appointed The Bank of New York Mellon pursuant to a new deposit agreement.
Trading prices of the CPOs and the GDSs are influenced by our results of operations, financial condition, cash requirements, future prospects and by
economic, financial and other factors and market conditions. See “Key Information—Risk Factors—Risk Factors Related to Mexico—Economic and
Political Developments in Mexico May Adversely Affect Our Business, Financial Condition and Results of Operations”. We believe that as of March 31,
2025, approximately 290 million GDSs were held of record by 64 persons with U.S. addresses.
Trading on the Mexican Stock Exchange
Overview
The Mexican Stock Exchange, located in Mexico City, operating continuously since 1907, is one of the two stock exchanges in Mexico. The other
stock exchange in Mexico is the Bolsa Institucional de Valores S.A. de C.V., which began operations in July 2018 (the “Institutional Stock Exchange” and
together with the Mexican Stock Exchange, the “Stock Exchanges in Mexico”). The Mexican Stock Exchange is organized as a sociedad anónima bursátil
de capital variable, or publicly-traded corporation with variable capital. Securities trading on the Mexican Stock Exchange occurs from 8:30 a.m. to 3:00
p.m., Mexico City time, each business day. All trading on the Mexican Stock Exchange is effected electronically. The Mexican Stock Exchange may
impose a number of measures to promote an orderly and transparent trading price of securities, including the operation of a system of automatic suspension
of trading in shares of a particular issuer when price fluctuation exceeds certain limits. The Mexican Stock Exchange may also suspend trading in shares of
a particular issuer as a result of the disclosure of a material event, or when the changes in the volume traded or share price are not consistent with either the
historic performance or information publicly available. The Mexican Stock Exchange may resume trading in the shares when it deems that the material
events have been adequately disclosed to public investors or when it deems that the issuer has adequately explained the reasons for the changes in the
volume traded or prevailing share price. Under current regulations, in certain cases when the relevant securities are simultaneously traded on a stock
exchange outside of Mexico, the Mexican Stock Exchange or the Institutional Stock Exchange, as the case may be, may consider the measures adopted by
the other stock exchange in order to suspend and/or resume trading in the issuer’s shares. Furthermore, the suspension of trading of a series of a company’s
securities on one exchange will automatically trigger the suspension of its trading on the other exchange.
Settlement is effected in two business days after a share transaction on both Stock Exchanges in Mexico. Deferred settlement, even by mutual
agreement, is not permitted without the approval of the CNBV. All securities traded on the Mexican Stock Exchange or the Institutional Stock Exchange,
including the CPOs, are on deposit with S.D. Indeval, Institución para el Depósito de Valores, S.A. de C.V., or Indeval, a privately owned securities
depositary that acts as a clearinghouse, depositary and custodian, as well as a settlement, transfer and registration agent for transactions of the Stock
Exchanges in Mexico, eliminating the need for physical transfer of securities.
Although the Mexican Securities Market Law provides for the existence of an over-the-counter market, no such market for securities in Mexico has
been developed.
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Market Regulation and Registration Standards
To offer securities to the public in Mexico, an issuer must meet specific qualitative and quantitative requirements, and generally only securities for
which an application for registration in the National Registry of Securities, or NRS, maintained by the CNBV has been approved by the CNBV may be
listed on the Mexican Stock Exchange or on the Institutional Stock Exchange. As of the date of this report, we are only listed on the Mexican Stock
Exchange, and therefore we must only comply with the CNBV’s and the Mexican Stock Exchange’s rules and regulations for approval. This approval does
not imply any kind of certification or assurance related to the merits or the quality of the securities or the solvency of the issuer.
The CNBV has also issued general rules, or General CNBV Rules, applicable to issuers and other securities market participants that govern issuers and
issuer activity, among other things.
The General CNBV Rules have mandated that the Stock Exchanges in Mexico adopt minimum requirements for issuers to be registered with the
CNBV and have their securities listed on the Mexican Stock Exchange or on the Institutional Stock Exchange. Pursuant to the internal rules of the Stock
Exchanges in Mexico, in order to be registered, issuers will be required to have, among other things:
●
a minimum number of years of operating history;
●
a minimum financial condition;
●
a minimum number of shares or CPOs to be publicly offered to public investors;
●
a minimum price for the securities to be offered;
●
a minimum of 15% of the capital stock placed among public investors (which percentage may be lowered under certain circumstances);
●
a minimum of 100 holders of shares or of shares represented by CPOs, who are deemed to be public investors under the General CNBV Rules,
upon the completion of the offering; and
●
complied with certain corporate governance requirements.
●
To maintain its registration, an issuer will be required to have, among other things:
●
a minimum of 12% of the capital stock held by public investors;
●
a minimum of 100 holders of shares or of shares represented by CPOs who are deemed to be public investors under the General CNBV Rules; and
●
complied with certain corporate governance requirements.
The CNBV has the authority to waive some of these requirements in some circumstances. Also, some of these requirements are applicable for each
series of shares of the relevant issuer.
The Stock Exchanges in Mexico must review annually compliance with the foregoing and other requirements, some of which may be further reviewed
on a quarterly or semi-annual basis. The Stock Exchanges in Mexico must inform the CNBV of the results of its review and this information must, in turn,
be disclosed to investors. If an issuer fails to comply with any of the foregoing requirements, the Stock Exchange in Mexico on which it is listed will
request that the issuer propose a plan to cure the violation. If the issuer fails to propose such plan, if the plan is not satisfactory to the relevant Stock
Exchange in Mexico or if the issuer does not make substantial progress with respect to the corrective measures, trading of the relevant series of shares on
the relevant Stock Exchange in Mexico will be temporarily suspended until the situation is corrected. In addition, if the issuer fails to propose the plan or
ceases to follow such plan once proposed, the CNBV may suspend or cancel the registration of the shares. In such event, the issuer must evidence the
mechanisms to protect the rights of public investors and market in general.
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Issuers of listed securities are required to file unaudited quarterly financial statements and audited annual financial statements as well as various
periodic reports with the CNBV and the Stock Exchange in Mexico on which it is listed. Issuers of listed securities must prepare and disclose their financial
information by an approved system for each Stock Exchange in Mexico known as Sistema Electrónico de Envío y Difusión de Información or SEDI and to
the CNBV through the Sistema de Transferencia de Información sobre Valores, or STIV-2. Immediately upon its receipt, the relevant Stock Exchange in
Mexico makes that information available to the public.
The General CNBV Rules and the internal regulations of the Stock Exchanges in Mexico require issuers of listed securities to file through EMISNET
for the BMV, through DIV for the Institutional Stock Exchange and through and STIV-2 for the CNBV the information on the occurrence of material events
affecting the relevant issuer. Material events include, but are not limited to, as long as they have, or could potentially have, an effect on the price of the
issuer’s securities:
●
the entering into or termination of joint venture agreements or agreements with key suppliers;
●
the creation of new lines of businesses or services;
●
significant deviations in expected or projected operating performance;
●
the restructuring or payment of significant indebtedness;
●
material litigation or labor conflicts;
●
changes in dividend policy;
●
the commencement of any insolvency, suspension or bankruptcy proceedings;
●
changes in the directors; and
●
any other event that may have a material adverse effect on the results, financial condition or operations of the relevant issuer.
If there is unusual price volatility of the securities listed, the issuer would be obliged to immediately inform the CNBV and the corresponding Stock
Exchange in Mexico of the causes of such volatility or, if the issuer is unaware of such causes, make a statement to that effect, in order for the
corresponding Stock Exchange in Mexico to immediately convey that information to the public. In addition, the corresponding Stock Exchange in Mexico
must immediately request that issuers disclose any information relating to relevant material events, when it deems the information currently disclosed to be
insufficient, as well as instruct issuers to clarify such information when it deems the information to be confusing. The corresponding Stock Exchange in
Mexico may request issuers to confirm or deny any material events that have been disclosed to the public by third parties when it deems that the material
event may affect or influence the securities being traded. The corresponding Stock Exchange in Mexico must immediately inform the CNBV of any
requests made to issuers. The CNBV may also make any of these requests directly to issuers. An issuer may delay the disclosure of material events under
some circumstances, including where the information being offered is not related to transactions that have been completed.
The CNBV and any of the Stock Exchanges in Mexico may suspend the dealing in securities of an issuer:
●
if the issuer does not adequately disclose a material event; or
●
upon price or volume volatility or changes in the offer or demand in respect of the relevant securities, which are not consistent with the historic
performance of the securities and could not be explained solely by the information made publicly available under the General CNBV Rules.
The Stock Exchanges in Mexico must immediately inform the CNBV and the general public of any such suspension. An issuer may request that the
CNBV or the relevant Stock Exchange in Mexico resume trading, provided it demonstrates that the causes triggering the suspension have been resolved
and that it is in full compliance with the periodic reporting requirements under the applicable law. If its request has been granted, the corresponding Stock
Exchange in Mexico will determine the appropriate mechanism to resume trading in its securities. If trading of an issuer is suspended for more than 20
business days and the issuer is authorized to resume trading without conducting a public offering, the issuer must disclose through EMISNET or DIV, as
the case may be, and STIV-2, before trading resumes, a description of the causes that resulted in the suspension and reasons why it is now authorized to
resume trading.
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Likewise, if the securities of an issuer are traded on any of the Stock Exchanges in Mexico and additionally on a foreign securities market, then that
issuer must generally file with the CNBV and the corresponding Stock Exchange in Mexico on a simultaneous basis the information that it is required to
file pursuant to the laws and regulations of the relevant other jurisdiction.
Pursuant to the Mexican Securities Market Law, stockholders of issuers listed on any of the Stock Exchanges in Mexico must disclose any
transactions, through or outside of any of the Stock Exchanges in Mexico that result in a 10% or more ownership stake of an issuer’s capital stock. These
stockholders must also inform the CNBV of the results of these transactions the day after their completion. See “Additional Information—Mexican
Securities Market Law”.
Additionally, related parties of an issuer who increase or decrease their ownership stake, in one or more transactions, by 5% or more, shall disclose
such transactions. The Mexican Securities Market Law also requires stockholders holding 10% or more of the capital stock of companies listed in the
registry to notify the CNBV of certain ownership changes in shares of the company. Moreover, the CNBV regulations for issuers require issuers to disclose
to the CNBV on an annual basis on or before June 30 of each year: (i) the name and ownership percentage of any Board members and relevant officers that
maintain 1% or more of the capital stock of an issuer, (ii) the name and ownership percentage of any other individual or entity that maintains 5% or more of
the capital stock of an issuer (regardless of whether such stockholder is an officer or director) and (iii) the names and ownership percentages of the 10
stockholders with the largest direct ownership stake in an issuer (regardless of the ownership percentage or whether such stockholder is an officer, director,
related party or private investor with no relationship to the issuer). Based on the foregoing, Mexican Securities Regulations require that (i) Board members
and relevant officers that own 1% or more of the capital stock of an issuer, (ii) any other individual or entity that owns 5% or more of the capital stock of an
entity, and (iii) individuals that own 1% of the capital stock of an entity, provide this information to the relevant issuer on or before May 15 of each year.
In addition, in April 2018, the CNBV issued general rules applicable to entities and issuers supervised by the CNBV that use external auditors in
connection with the preparation of their basic financial statements (Disposiciones de carácter general aplicables a las entidades y emisoras supervisadas
por la Comisión Nacional Bancaria y de Valores que contraten servicios de auditoría externa de estados financieros básicos) (as amended from time to
time, the “Mexican Auditors Regulations”). The Mexican Auditors Regulations establish certain rules for external auditors and set forth obligations owed
among issuers, their Board of Directors and Audit Committees and the external auditors for their services.
Item 10. Additional Information
Mexican Securities Market Law
Under the Mexican Securities Market Law insiders must abstain from purchasing or selling securities of the issuer within 90 days from the last sale or
purchase, respectively.
In addition, under the Mexican Securities Market Law, tender offers may be voluntary or mandatory. All tender offers must be open for at least 20
business days and purchases thereunder are required to be made pro-rata to all tendering stockholders. Any intended purchase resulting in a 30% or greater
holding requires the tender to be made for the greater of 10% of the company’s capital stock or the share capital intended to be acquired; if the purchase is
aimed at obtaining control, the tender must be made for 100% of the outstanding shares. In calculating the intended purchase amount, convertible
securities, warrants and derivatives the underlying security of which are such shares must be considered. The law also permits the payment of certain
amounts to controlling stockholders over and above the offering price if these amounts are fully disclosed, approved by the board of directors and paid in
connection with non-compete or similar obligations. The law also contemplates exceptions to the mandatory tender offer requirements and specifically
provides for the consequences, to a purchaser, of not complying with these tender offer rules (lack of voting rights, possible annulment of purchases, etc.)
and other rights available to prior stockholders of the issuer.
The Mexican Securities Market Law permits public companies to insert provisions in their bylaws pursuant to which the acquisition of control of the
company, by the company’s stockholders or third parties, may be prevented, if such provisions (i) are approved by stockholders without the negative vote
of stockholders representing 5% or more of the outstanding shares, (ii) do not exclude any stockholder or group of stockholders, and (iii) do not restrict, in
an absolute manner, the change of control.
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Bylaws
Set forth below is a brief summary of some relevant provisions of our bylaws and Mexican law. This description does not purport to be complete, and
is qualified by reference in its entirety to our bylaws, which have been filed as an exhibit to this annual report, and Mexican law. For a description of the
provisions of our bylaws relating to our Board of Directors, Executive Committee, Audit Committee and Corporate Practices Committee, see “Directors,
Senior Management and Employees”.
Organization and Register
Grupo Televisa, S.A.B. was originally incorporated as a sociedad anónima, or limited liability corporation under the laws of Mexico in accordance
with the Mexican Companies Law and later adopted the form of sociedad anónima bursátil, or limited liability stock corporation in accordance with the
Ley del Mercado de Valores, or the Mexican Securities Market Law. It was incorporated under Public Deed Number 30,200, dated December 19, 1990,
granted before Notary Public Number 73 of Mexico City, and registered with the Public Registry of Commerce of Mexico City, under Commercial
Page (folio mercantil) number 142,164. We have a general corporate purpose, the specifics of which can be found in Article Four of our bylaws.
Our stock registry is maintained by Indeval, and in accordance with Mexican law, we only recognize those holders listed in our stock registry as our
stockholders. Our stockholders may hold their share in the form of physical certificates or through book-entries with institutions that have accounts with
Indeval. The CPO Trustee is the holder of record for Shares represented by CPOs. Accounts may be maintained at Indeval by brokers, banks and other
entities approved by the CNBV.
Voting Rights and Stockholders’ Meetings
Holders of Series “A” Shares. Holders of Series “A” Shares have the right to vote on all matters subject to stockholder approval at any general
stockholders’ meeting and have the right, voting as a class, to appoint eleven members of our Board of Directors and the corresponding alternate directors.
In addition to requiring approval by a majority of all Shares entitled to vote together on a particular corporate matter, certain corporate matters must be
approved by a majority of the holders of Series “A” Shares voting separately. These matters include mergers, dividend payments, spin-offs, changes in
corporate purpose, changes of nationality and amendments to the anti-takeover provisions of our bylaws.
Holders of Series “B” Shares. Holders of Series “B” Shares have the right to vote on all matters subject to stockholder approval at any general
stockholders’ meeting and have the right, voting as a class, to appoint five members of our Board of Directors and the corresponding alternate directors.
The five directors and corresponding alternate directors elected by the holders of the Series ”B” Shares are elected at a stockholders’ meeting that must be
held within the first four months after the end of each year.
Holders of Series “D” Shares and Series “L” Shares. Holders of Series “D” Shares, voting as a class, are entitled to vote at special meetings to elect
two of the members of our Board of Directors and the corresponding alternate directors, each of which must be an independent director. In addition, holders
of Series “D” Shares are entitled to vote on the following matters at extraordinary general meetings:
●
our transformation from one type of company to another;
●
any merger (even if we are the surviving entity);
●
extension of our existence beyond our prescribed duration;
●
our dissolution before our prescribed duration (which is currently 99 years from January 30, 2007);
●
a change in our corporate purpose;
●
a change in our nationality; and
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●
the cancellation from registration of the Series “D” Shares or the securities which represent the Series “D” Shares with the securities or special
section of the NRS and with any other Mexican or foreign stock exchange in which such shares or securities are registered.
Holders of Series “L” Shares, voting as a class, are entitled to vote at special meetings to elect two of the members of our Board of Directors and the
corresponding alternate directors, each of which must be an independent director. Holders of Series “L” Shares are also entitled to vote at extraordinary
general meetings on the following matters:
●
our transformation from one type of company to another;
●
any merger in which we are not the surviving entity; and
●
the cancellation from registration of the Series “L” Shares or the securities that represent the Series “L” Shares with the special section of the
NRS.
The two directors and corresponding alternate directors elected by each of the holders of the Series “D” Shares and the Series “L” Shares are elected at
a special meeting of those holders which takes place annually. Special meetings of holders of Series “D” Shares and Series “L” Shares must also be held to
approve the cancellation from registration of the Series “D” Shares or Series “L” Shares or the securities representing any of such shares with the NRS, as
the case may be, and in the case of Series “D” Shares, with any other Mexican or foreign stock exchange in which such shares or securities are registered.
Except as otherwise required by law, all other matters on which holders of Series “L” Shares or Series “D” Shares are entitled to vote must be considered at
an extraordinary general meeting. Holders of Series “L” Shares and Series “D” Shares are not entitled to attend or to address meetings of stockholders at
which they are not entitled to vote. Under Mexican law, holders of Series “L” Shares and Series “D” Shares are entitled to exercise certain minority
protections. See “— Other Provisions—Appraisal Rights and Other Minority Protections”.
Minority shareholders holding at least 10% of the capital stock represented by Series “A” Shares, will be entitled to appoint one director and its
corresponding alternate for each such ten percent. Minority shareholders holding at least ten percent of the capital stock represented by Series “B” Shares,
will be entitled to appoint one director and its corresponding alternate for each such ten percent. Minority shareholders holding at least ten percent of the
capital stock represented by Series “D” Shares or Series “L” Shares, will be entitled to appoint one director and its corresponding alternate for each such
ten percent. Any such appointments by minority shareholders will be counted towards the number of directors that the holders of each such Series is
entitled to appoint.
Other Rights of Stockholders. Under Mexican law, holders of shares of any series are also entitled to vote as a class in a special meeting governed by
the same rules that apply to extraordinary general meetings, as described below, on any action that would prejudice the rights of holders of shares of such
series, but not rights of holders of shares of other series, and a holder of shares of such series would be entitled to judicial relief against any such action
taken without such a vote. Generally, the determination of whether a particular stockholder action requires a class vote on these grounds could initially be
made by the Board of Directors or other party calling for stockholder action. In some cases, under the Mexican Securities Market Law and the Mexican
Companies Law, the Board of Directors, the Audit Committee, the Corporate Practices Committee, or a Mexican court on behalf of those stockholders
representing 10% of our capital stock can call a special meeting. A negative determination would be subject to judicial challenge by an affected
stockholder, and the necessity for a class vote would ultimately be determined by a court. There are no other procedures for determining whether a
particular proposed stockholder action requires a class vote, and Mexican law does not provide extensive guidance on the criteria to be applied in making
such a determination.
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General stockholders’ meetings may be ordinary general meetings or extraordinary general meetings. Extraordinary general meetings are those called
to consider specific matters specified in Article 182 of the Mexican Companies Law and our bylaws, including, among others, amendments to our bylaws,
our dissolution, liquidation or split-up, our merger and transformation from one form of company to another, increases and reductions in our capital stock,
the approval of certain acquisitions of shares, including a change of control, as set forth in the antitakeover provisions in our bylaws and any action for civil
liabilities against the members of our Board of Directors, its Secretary, or members of our Audit Committee or Corporate Practices Committee. In addition,
our bylaws require an extraordinary general meeting to consider the cancellation of registration of the Series “D” Shares or Series “L” Shares or the
securities representing these Shares with the NRS, as the case may be, and in the case of Series “D” Shares, with any other Mexican or foreign stock
exchange in which such Shares or securities are registered. General meetings called to consider all other matters are ordinary meetings which are held at
least once each year within four months following the end of each fiscal year. Stockholders may be represented at any stockholders’ meeting by completing
a form of proxy provided by us, which proxy is available within fifteen days prior to such meeting, and designating a representative to vote on their behalf.
The form of proxy must comply with certain content requirements as set forth in the Mexican Securities Market Law and in our bylaws.
Holders of CPOs. Holders of CPOs who are Mexican nationals or Mexican corporations whose bylaws exclude foreign ownership of their shares are
entitled to exercise voting rights with respect to the Series “A” Shares, Series “B” Shares, Series “D” Shares and Series “L” Shares underlying their CPOs.
The CPO Trustee will vote such shares as directed by Mexican holders of CPOs, which must provide evidence of Mexican nationality. Non-Mexican
holders of CPOs may only vote the Series “L” Shares held in the CPO Trust and are not entitled to exercise any voting rights with respect to the Series “A”
Shares, Series “B” Shares and Series “D” Shares held in the CPO Trust. Voting rights in respect of these Series “A” Shares, Series “B” Shares and
Series “D” Shares may only be exercised by the CPO Trustee. Series “A” Shares, Series “B” Shares and Series “D” Shares underlying the CPOs of non-
Mexican holders or holders that do not give timely instructions as to voting of such Shares, will be voted by the individuals designated by the CPO Trust’s
Technical Committee (which consists of members of the Board of Directors and/or Executive Committee, who must be Mexican nationals), and at any
general shareholders meeting where such series has the right to vote in the same manner as the majority of the outstanding Series “A” Shares held by
Mexican nationals or Mexican corporations (directly, or through the CPO Trust, as the case may be) are voted at the relevant meeting. Series “L” Shares
underlying the CPOs of any holders that do not give timely instructions as to the voting of such Shares will be voted by the individuals designated by the
CPO Trust’s Technical Committee (which consists of members of the Board of Directors and/or Executive Committee, who must be Mexican nationals), as
instructed by such Technical Committee of the CPO Trust. The CPO Trustee must receive voting instructions five business days prior to the stockholders’
meeting. Holders of CPOs that are Mexican nationals or Mexican corporations whose bylaws exclude foreign ownership of their Shares also must provide
evidence of nationality, such as a copy of a valid Mexican passport or birth certificate, for individuals, or a copy of the bylaws, for corporations.
As described in “Major Stockholders and Related Party Transactions,” Series “A” Shares held through the Azcárraga Trust constitute a majority of the
Series “A” Shares whose holders are entitled to vote, because non-Mexican holders of CPOs or GDSs are not permitted to vote the underlying Series “A”
Shares. Accordingly, the vote of Series “A” Shares held through the Azcárraga Trust generally will determine how the Series “A” Shares underlying our
CPOs are voted.
Holders of GDRs. Global Depositary Receipts, or GDRs, evidencing GDSs are issued by The Bank of New York Mellon, the Depositary, pursuant to
the Deposit Agreement we entered into with the Depositary and all holders from time to time of GDSs. A GDR may represent any number of GDSs. Only
persons in whose names GDRs are registered on the books of the Depositary will be treated by us and the Depositary as owners and holders of GDRs. Each
GDS represents the right to receive five CPOs which will be credited to the account of BBVA Bancomer, S.A., Institución de Banca Múltiple Grupo
Financiero BBVA Bancomer, the Custodian, maintained with Indeval for such purpose. Each CPO represents financial interests in, and limited voting rights
with respect to, 25 Series “A” Shares, 22 Series “B” Shares, 35 Series “D” Shares and 35 Series “L” Shares held pursuant to the CPO Trust.
The Depositary will mail information on stockholders’ meetings to all holders of GDRs. At least six business days prior to the relevant stockholders’
meeting, GDR holders may instruct the Depositary as to the exercise of the voting rights, if any, pertaining to the CPOs represented by their GDSs, and the
Underlying Shares. Since the CPO Trustee must also receive voting instructions five business days prior to the stockholders’ meeting, the Depositary may
be unable to vote the CPOs and Underlying Shares in accordance with any written instructions. Holders of GDSs that are Mexican nationals or Mexican
corporations whose bylaws exclude foreign ownership of their Shares are entitled to exercise voting rights with respect to the Series “A” Shares, Series “B”
Shares, Series “D” Shares and Series “L” Shares underlying the CPOs represented by their GDSs. Such Mexican holders also must provide evidence of
nationality, such as a copy of a valid Mexican passport or birth certificate, for individuals, or a copy of the bylaws, for corporations.
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Non-Mexican holders may exercise voting rights only with respect to Series “L” Shares underlying the CPOs represented by their GDSs. They may not
direct the CPO Trustee as to how to vote the Series “A” Shares, Series “B” Shares or Series “D” Shares represented by CPOs or attend stockholders’
meetings. Under the terms of the CPO Trust Agreement, the CPO Trustee will vote the Series “A” Shares, Series “B” Shares, Series “D” Shares and Series
“L” Shares represented by CPOs held by non-Mexican holders (including holders of GDRs) as described under “— Holders of CPOs”. If the Depositary
does not timely receive instructions from a Mexican or non-Mexican holder of GDRs as to the exercise of voting rights relating to the Series “A” Shares,
Series “B” Shares, Series “D” Shares or Series “L” Shares underlying the CPOs, as the case may be, in the relevant stockholders’ meeting then, if requested
in writing by us, the Depositary will give a discretionary proxy to a person designated by us to vote the Shares. If no such written request is made by us, the
Depositary will not represent or vote, attempt to represent or vote any right that attaches to, or instruct the CPO Trustee to represent or vote, the Shares
underlying the CPOs in the relevant stockholders’ meeting and, as a result, the Underlying Shares will be voted in the same manner described under “—
Holders of CPOs” with respect to shares for which timely instructions as to voting are not given.
If the Depositary does not timely receive instructions from a Mexican or non-Mexican holder of GDRs as to the exercise of voting rights relating to the
underlying CPOs in the relevant CPO holders’ meeting, the Depositary and the Custodian will take such actions as are necessary to cause such CPOs to be
counted for purposes of satisfying applicable quorum requirements and, unless we in our sole discretion have given prior written notice to the Depositary
and the Custodian to the contrary, vote them in the same manner as the majority of the CPOs are voted at the relevant CPOs holders’ meeting.
Under the terms of the CPO Trust, beginning in December 2008, a non-Mexican holder of CPOs or GDSs may instruct the CPO Trustee to request that
we issue and deliver certificates representing each of the Shares underlying its CPOs so that the CPO Trustee may sell, to a third party entitled to hold the
Shares, all of those Shares and deliver to the holder any proceeds derived from the sale.
Limitation on Appointment of Directors. Our bylaws prohibit the appointment of individuals to our Board of Directors: who (i) are members of the
board of directors or other management boards of a company (other than the Company or its subsidiaries) that has one or more concessions to operate
telecommunication networks in Mexico; or (ii) directly or indirectly, are shareholders or partners of companies (other than the Company or its subsidiaries),
that have one or more concessions to operate telecommunication networks in Mexico, with the exception of ownership stakes that do not allow such
individuals to appoint one or more members of the management board or any other operation or decision making board.
Dividend Rights
At our annual ordinary general stockholders’ meeting, our Board of Directors is required to submit our financial statements from the previous fiscal
year to the holders of our Series “A” Shares and Series “B” Shares. Once our stockholders approve these financial statements, they must then allocate our
net profits for the previous fiscal year. Under Mexican law, at least 5% of our net profits must be allocated to a legal reserve, until the amount of this
reserve equals 20% of our paid-in capital stock. Thereafter, our stockholders may allocate our net profits to any special reserve, including a reserve for
share repurchases. After this allocation, the remainder of our net profits will be available for distribution as dividends. The vote of the majority of the
Series “A” Shares and Series “B” Shares is necessary to approve dividend payments. As described below, in the event that dividends are declared, holders
of Series “D” Shares will have preferential rights to dividends as compared to holders of Series “A” Shares, Series “B” Shares and Series “L” Shares.
Holders of Series “A” Shares, Series “B” Shares and Series “L” Shares have the same financial or economic rights, including the participation in any of our
profits.
Preferential Rights of Series “D” Shares
Holders of Series “D” Shares are entitled to receive a preferred annual dividend in the amount of Ps.0.00028932372948 per Series “D” Share before
any dividends are payable in respect of Series “A” Shares, Series “B” Shares and Series “L” Shares. If we pay any dividends in addition to the Series “D”
Share fixed preferred dividend, then such dividends shall be allocated as follows:
●
first, to the payment of dividends with respect to the Series “A” Shares, the Series “B” Shares and the Series “L” Shares, in an equal amount per
share, up to the amount of the Series “D” Share fixed preferred dividend; and
●
second, to the payment of dividends with respect to the Series “A” Shares, Series “B” Shares, Series “D” Shares and Series “L” Shares, such that
the dividend per share is equal.
●
Upon any dissolution or liquidation of our company, holders of Series “D” Shares are entitled to a liquidation preference equal to:
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●
accrued but unpaid dividends in respect of their Series “D” Shares; plus
●
the theoretical value of their Series “D” Shares as set forth in our bylaws. See “— Other Provisions — Dissolution or Liquidation”.
Limitation on Capital Increases
Our bylaws provide that, in the event shares of a given series are issued as a result of a capital increase (in respect of a cash capital contribution), each
holder of shares of that series will have a preferential right to subscribe to new shares of that series, in proportion to the number of such holder’s existing
Shares of that series. In addition, primary issuances of Series “A” Shares, Series “B” Shares, Series “D” Shares and Series “L” Shares in the form of CPOs
may be limited under the Mexican Securities Market Law. However, in the case of primary issuances of additional Series “A” Shares, Series “B” Shares,
Series “L” Shares and Series “D” Shares in the form of CPOs, any new Series “L” Shares and Series “D” Shares may be required to be converted into
Series “A” Shares or other voting stock within a term specified by the CNBV, which in no event shall exceed five years. Moreover, under the Mexican
Securities Market Law, the aggregate amount of shares of an issuer with limited or non-voting rights may not exceed 25% of the total shares held by public
investors. The vote of the holders of a majority of the Series “A” Shares is necessary to approve capital increases. As a result of grandfathering provisions,
our existing CPO structure will not be affected by such limitations.
Preemptive Rights
In the event of a capital increase, a holder of existing shares of a given series has a preferential right to subscribe to a sufficient number of shares of the
same series in order to maintain the holder’s existing proportionate holdings of shares of that series. Stockholders must exercise their preemptive rights
within the time period fixed by our stockholders at the meeting approving the issuance of additional shares. This period must continue for at least fifteen
days following the publication of notice of the issuance in the Official Gazette of the Federation and in a newspaper of general circulation in Mexico City.
Under Mexican law, stockholders cannot waive their preemptive rights in advance or be represented by an instrument that is negotiable separately from the
corresponding share.
U.S. Holders of GDSs may exercise preemptive rights only if we register any newly issued shares under the Securities Act, as amended, or qualify for
an exemption from registration. We intend to evaluate at the time of any offering of preemptive rights the costs and potential liabilities associated with
registering additional shares. In addition, if our stockholders’ meeting approves the issuance of shares of a particular series, holders of shares of other series
may be offered shares of that particular series.
Limitations on Share Ownership
Through our bylaws and the trust governing the CPOs, we have limited the ownership of our Series “A” Shares and Series “B” Shares to Mexican
individuals, Mexican companies whose charters contain a foreign exclusion clause, credit institutions acting as trustees (such as the CPO Trustee) in
accordance with the Foreign Investment Law and the Foreign Investment Law Regulations, and trusts or stock purchase, investment and retirement plans
for Mexican employees. A holder that acquires Series “A” Shares or Series “B” Shares in violation of the restrictions in our bylaws regarding non-Mexican
ownership will have none of the rights of a stockholder with respect to those Series “A” Shares or Series “B” Shares. The Series “D” Shares are subject to
the same restrictions on ownership as the Series “A” Shares and Series “B” Shares. However, the foregoing limitations do not affect the ability of non-
Mexican investors to hold Series “A” Shares, Series “B” Shares, Series “D” Shares and Series “L” Shares through CPOs, or Series “L” Shares directly. The
sum of the total outstanding number of Series “A” Shares and Series “B” Shares is required to exceed at all times the sum of the total outstanding Series
“L” Shares and Series “D” Shares.
Non-Mexican states and governments are prohibited under our bylaws and the LFTR from owning Shares of the Company and are, therefore,
prohibited from being the beneficial or record owners of Series “A” Shares, Series “B” Shares, Series “D” Shares, Series “L” Shares, CPOs and GDSs. We
have been advised by our Mexican counsel, Mijares, Angoitia, Cortés y Fuentes, S.C., that ownership of Series “A” Shares, Series “B” Shares, Series “D”
Shares, Series “L” Shares, CPOs and GDSs by pension or retirement funds organized for the benefit of employees of non-Mexican state, municipal or other
governmental agencies will not be considered as ownership by non-Mexican states or governments for the purpose of our bylaws or the LFTR.
The LFTR eliminated the restrictions on foreign investment in telecommunications services and satellite communication and increased the maximum
permitted foreign-ownership in broadcasting (television and radio) to 49% subject to reciprocity.
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We may restrict transfers or, to the extent permitted under applicable law, cause the mandatory sale or disposition of CPOs or GDRs where such
transfer or ownership, as the case may be, might result in ownership of CPOs or GDRs exceeding the limits under applicable law or our bylaws, the CPO
Trust Agreement or the CPO indenture. Non-Mexican states and governments are prohibited under our bylaws and the LFTR from owning our Shares and
are, therefore, prohibited from being beneficial or record owners of GDRs.
Other Provisions
Forfeiture of Shares. As required by Mexican law, our bylaws provide that for Series “L” Shares and CPOs, our non-Mexican stockholders formally
agree with the Foreign Affairs Ministry:
●
to be considered as Mexicans with respect to the Series “L” Shares and CPOs that they acquire or hold, as well as to the property, rights,
concessions, participations or interests owned by us or to the rights and obligations derived from any agreements we have with the Mexican
government; and
●
not to invoke the protection of their own governments with respect to their ownership of Series “L” Shares and CPOs.
Failure to comply is subject to a penalty of forfeiture of such a stockholder’s capital interests in favor of Mexico. In the opinion of Mijares, Angoitia,
Cortés y Fuentes, S.C., our Mexican counsel, under this provision a non-Mexican stockholder is deemed to have agreed not to invoke the protection of its
own government by asking such government to interpose a diplomatic claim against the Mexican government with respect to the stockholder’s rights as a
stockholder, but is not deemed to have waived any other rights it may have, including any rights under the U.S. securities laws, with respect to its
investment in the Company. If the stockholder should invoke governmental protection in violation of this agreement, its shares could be forfeited to the
Mexican government.
Exclusive Jurisdiction. Our bylaws provide that legal action relating to the execution, interpretation or performance of the bylaws shall be brought only
in federal courts located in Mexico City.
Duration. Our corporate existence under our bylaws continues until 2106.
Dissolution or Liquidation. Upon any dissolution or liquidation of our company, our stockholders will appoint one or more liquidators at an
extraordinary general stockholders’ meeting to wind up our affairs. The approval of holders of the majority of the Series “A” Shares is necessary to appoint
or remove any liquidator. Upon a dissolution or liquidation, holders of Series “D” Shares will be entitled to both accrued but unpaid dividends in respect of
their Series “D” Shares, plus the theoretical value of their Series “D” Shares (as set forth in our bylaws). The theoretical value of our Series “D” Shares is
Ps.0.00578647458969 per share. Thereafter, a payment per share will be made to each of the holders of Series “A” Shares, Series “B” Shares and Series
“L” Shares equivalent to the payment received by each of the holders of Series “D” Shares. The remainder will be distributed equally among all
stockholders in proportion to their number of Shares and amount paid.
Redemption. Our bylaws provide that we may redeem our Shares with distributable profits without reducing our capital stock by way of a stockholder
resolution at an extraordinary stockholders’ meeting. In accordance with Mexican law and our bylaws:
●
any redemption shall be made on a pro-rata basis among all of our stockholders;
●
to the extent that a redemption is effected through a public tender offer on the Mexican Stock Exchange, the stockholders’ resolution approving
the redemption may empower our Board to specify the number of shares to be redeemed and appoint the related intermediary or purchase agent;
and
●
any redeemed shares must be cancelled.
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Share Repurchases. As provided by Mexican law, our bylaws allow us to repurchase our Shares on the Mexican Stock Exchange at then prevailing
market prices. The amount of capital stock allocated to share repurchases and the amount of the corresponding reserve created for this purpose is
determined annually by our stockholders at an ordinary general stockholders’ meeting. The aggregate amount of resources allocated to share repurchases in
any given year cannot exceed the total amount of our net profits in any given year, including retained earnings. Share repurchases must be charged to either
our net worth if the repurchased Shares remain in our possession or our capital stock if the repurchased Shares are converted into treasury shares, in which
case our capital stock is reduced automatically in an amount equal to the theoretical value of any repurchased Shares, if any. Any surplus is charged to the
reserve for share repurchases. If the purchase price of the Shares is less than the theoretical value of the repurchased Shares, our capital stock account will
be affected by an amount equal to the theoretical value of the repurchased Shares. Under Mexican law, we are not required to create a special reserve for
the repurchase of shares, nor do we need the approval of our Board to effect share repurchases. In addition, any repurchased Shares cannot be represented
at any stockholders’ meeting.
Conflicts of Interest. Under Mexican Law, any stockholder that votes on a transaction in which his, her or its interests conflict with our interests may be
liable for damages, but only if the transaction would not have been approved without his, her or its vote. In addition, any member of the Board of Directors
that votes on a transaction in which his, her or its interests conflict with our interests may be liable for damages. The Securities Market Law also imposes a
duty of care and a duty of loyalty on directors as described in “Directors, Senior Management and Employees — Our Board of Directors — Duty of Care
and Duty of Loyalty”. In addition, pursuant to the Mexican Securities Market Law, the Board of Directors, with input from the Corporate Practices
Committee, must review and approve certain transactions and arrangements with related parties that meet certain thresholds. See “Directors, Senior
Management and Employees — Our Board of Directors — Meetings; Actions Requiring Board Approval”.
Appraisal Rights and Other Minority Protections. Whenever our stockholders approve a change in our corporate purpose or jurisdiction of
organization or our transformation from one type of company to another, any stockholder entitled to vote that did not vote in favor of these matters has the
right to receive payment for its Series “A” Shares, Series “B” Shares, Series “D” Shares or Series “L” Shares in an amount calculated in accordance with
Mexican law. However, stockholders must exercise their appraisal rights within fifteen days after the stockholders’ meeting at which the matter was
approved. Because the holders of Series “L” Shares and Series “D” Shares may only vote in limited circumstances, appraisal rights are generally not
available to them. See “— Voting Rights and Stockholders’ Meetings”.
Because the CPO Trustee must vote at a general stockholders’ meeting, the Series “A” Shares, Series “B” Shares and Series “D” Shares held by non-
Mexicans through the CPO Trust will be voted by the individuals appointed by the Technical Committee of the CPO Trust, in the same manner as the
majority of the Series “A” Shares held by Mexican nationals (directly, or through the CPO Trust, as the case may be). As a result, the Series “A” Shares,
Series “B” Shares and Series “D” Shares underlying CPOs held by non-Mexicans will not be voted against any change that triggers the appraisal rights of
the holders of these Shares. Therefore, these appraisal rights will not be available to holders of CPOs (or GDRs) with respect to Series “A” Shares, Series
“B” Shares or Series “D” Shares.
The Mexican Securities Market Law and our bylaws include provisions that permit:
●
holders of at least 10% of our outstanding capital stock to request our Chairman of the Board or of the Audit Committee or Corporate Practices
Committee to call a stockholders’ meeting in which they are entitled to vote;
●
subject to the satisfaction of certain requirements under Mexican law, holders of at least 5% of our outstanding capital stock to bring an action for
civil liabilities against our directors;
●
holders of at least 10% of our Shares that are entitled to vote and are represented at a stockholders’ meeting to request postponement of
resolutions with respect to any matter on which they were not sufficiently informed; and
●
subject to the satisfaction of certain requirements under Mexican law, holders of at least 20% of our outstanding capital stock to contest and
suspend any stockholder resolution.
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See “Key Information—Risk Factors—Risk Factors Related to Our Securities—The Protections Afforded to Minority Stockholders in Mexico Are
Different From Those in the U.S.” In addition, in accordance with the Mexican Securities Market Law, we are also subject to certain corporate governance
requirements, including the requirement to maintain an audit committee and a corporate practices committee, and to elect independent directors. The
protections afforded to minority stockholders under Mexican law are generally different from those in the United States and many other jurisdictions.
Substantive Mexican law concerning fiduciary duties of directors has not been the subject of extensive judicial interpretation in Mexico, unlike many states
in the U.S. where duties of care and loyalty elaborated by judicial decisions help to shape the rights of minority stockholders. Furthermore, despite the fact
that recent amendments to the Mexican Federal Code of Civil Procedures have provided for certain types of class actions, these actions are limited to
subject matters related to the use of goods or the provision of public or private services, as well as environmental matters. Therefore, Mexican civil
procedure does not contemplate class actions or stockholder derivative actions, which permit stockholders in U.S. courts to bring actions on behalf of other
stockholders or to enforce rights of the corporation itself. Stockholders in Mexico also cannot challenge corporate actions taken at stockholders’ meetings
unless they meet stringent procedural requirements. See “—Voting Rights and Stockholders’ Meetings”. As a result of these factors, it is generally more
difficult for our minority stockholders to enforce rights against us or our directors or Major Stockholders than it is for stockholders of a corporation
established under the laws of a state of the U.S. In addition, under U.S. securities laws, as a foreign private issuer we are exempt from certain rules that
apply to domestic U.S. issuers with equity securities registered under the Securities Exchange Act of 1934, as amended, or the Exchange Act, including the
proxy solicitation rules. We are also exempt from many of the corporate governance requirements of the New York Stock Exchange.
Antitakeover Protections
General. Our bylaws provide that, subject to certain exceptions: (i) any person that invididually or together with any related party, that intends to
acquire, directly or indirectly, in one or successive acts, beneficial ownership of ordinary Shares (as defined below) which, when coupled with ordinary
Shares previously beneficially owned, represent 10% or more of our outstanding ordinary Shares; (ii) any competitor, that invididually or together with any
Related Party, that intends to acquire, directly or indirectly, in one or successive acts, beneficial ownership of Shares which, when coupled with Shares
previously beneficially owned by such competitor, group or their affiliates, represent 5% or more of our outstanding capital stock; (iii) any person that
invididually or together with any related party, that wishes to acquire, directly or indirectly, in one or successive acts, beneficial ownership of ordinary
Shares representing 10% or more of our outstanding ordinary Shares; and (iv) any competitor that invididually or together with any related party, that
intends to acquire, directly or indirectly, in one or successive acts, beneficial ownership of Shares representing 5% or more of our capital stock, must obtain
the prior approval of our Board of Directors and/or of our stockholders, as the case may be, subject to certain exceptions summarized below. Holders that
acquire Shares in violation of these requirements will not be registered in our stock registry. Accordingly, these holders will not be able to vote such Shares
or receive any dividends, distributions or other rights in respect of these Shares. In addition, pursuant to our bylaws, these holders will be obligated to pay
us a penalty in an amount equal to the market value of the Shares so acquired. Pursuant to our bylaws, “Shares” are defined as the shares (of any class or
series) representing our capital stock, and any instruments or securities that represent such shares or that grant any right with respect to or are convertible
into those shares, expressly including CPOs; our Series “A” Shares and Series “B” Shares are our ordinary Shares.
Pursuant to our bylaws, a “competitor” is generally defined as any person or entity dedicated, directly or indirectly, to any of the following businesses
or activities: television production and broadcasting, pay-TV production, program licensing, DTH satellite services, publishing (newspaper and/or
magazine), publishing distribution, music recording, cable television, the transmission of programming and/or other content by any other means known or
to be known, radio broadcasting and production, the promotion of professional sports and other entertainment events, paging services, production, feature
film/motion picture production and distribution, dubbing and/or the operation of an Internet portal. A “competitor” is also defined to include any person,
entity and/or group that is engaged in any type of business or activity in which we may be engaged from time to time and from which we derive 5% or
more of our consolidated income.
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Board Notices, Meetings, Quorum Requirements and Approvals. To obtain the prior approval of our Board, a potential acquiror must properly deliver a
written notice that states, among other things: (i) the number and class/type of our Shares it beneficially owns; (ii) the percentage of Shares it beneficially
owns with respect to both our outstanding capital stock and the respective class/type of our Shares; (iii) the number and class/type of Shares it intends to
acquire; (iv) the number and class/type of Shares it intends to grant or share a common interest or right; (v) its identity, or in the case of an acquiror which
is a corporation, trust or legal entity, its stockholders or beneficiaries as well as the identity and nationality of each person effectively controlling such
corporation, trust or legal entity; (vi) its ability to acquire our Shares in accordance with our bylaws and Mexican law, (vii) its source of financing the
intended acquisition; (viii) if it has obtained any financing from one of its related parties for the payment of the Shares; (ix) the purpose of the intended
acquisition; (x) if it intends to acquire additional Shares in the future; which coupled with the current intended acquisition of ordinary Shares and the
ordinary Shares previously beneficially owned by the potential acquiror, would result in ownership of 20% or more of our ordinary Shares; (xi) if it intends
to acquire control of us in the future; (xii) if the acquiror is our competitor or if it has any direct or indirect economic interest in or family relationship with
one of our competitors; and (xiii) the identity of the financial institution, if any, that will act as the underwriter or broker in connection with any tender
offer.
Either the Chairman, the Secretary or the Alternate Secretary of our Board of Directors must call a Board meeting within 10 calendar days following
the receipt of the written notice and the Board meeting must be held within 45 calendar days following the call. Action by written consent is not permitted.
With the exception of acquisitions that must be approved by the general extraordinary stockholders’ meeting as described below in “— Stockholder
Notices, Meetings, Quorum Requirements and Approvals” in order to proceed with any acquisition of Shares that require Board authorization as set forth in
our bylaws, such acquisition must be approved by at least the majority of the members of our Board present at a meeting at which at least 75% of the
members of our Board are present. Such acquisitions must be acted upon by our Board within 60 calendar days following the receipt of the written notice
described above, unless the Board determines that it does not have sufficient information upon which to base its decision. In such case, the Board shall
deliver a written request to the potential acquiror for any additional information that it deems necessary to make its determination. The 60 calendar days
referred to above will commence following the receipt of the additional information from the potential acquiror to render its decision.
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Stockholder Notices, Meetings, Quorum Requirements and Approvals. In the event: (i) of a proposed acquisition of Shares that would result in a
“change of control”; (ii) that our Board cannot hold a Board meeting for any reason; (iii) of a proposed acquisition by a competitor and having certain
characteristics; or (iv) that the Board determines that the proposed acquisition must be approved by our stockholders at a general extraordinary
stockholders’ meeting, among others, then the proposed acquisition must be approved by the holders of at least 75% of our outstanding ordinary Shares at a
general extraordinary stockholders’ meeting (both in the case of first and subsequent calls) at which the holders of at least 85% of our outstanding ordinary
Shares are present. In addition, any proposed merger, spin-off, or capital increase or decrease which results in a change of control must also be approved by
the holders of at least 75% of our outstanding ordinary Shares at a general extraordinary stockholders’ meeting (both in the case of first and subsequent
calls) at which the holders of at least 85% of our outstanding ordinary Shares are present. Pursuant to our bylaws, a “change of control” is defined as the
occurrence of any of the following: (i) the acquisition or transfer of ownership of a majority of our outstanding ordinary Shares; (ii) the ability of a person,
entity or group, other than the person who currently has the ability to, directly or indirectly, elect a majority of the members of our Board of Directors, to
elect a majority of the members of our Board of Directors; or (iii) the ability of a person, entity or group, other than the person who currently has the ability
to, directly or indirectly, determine our administrative decisions or policies, to determine our administrative decisions or policies. In the event that the
general extraordinary stockholders’ meeting must approve the proposed acquisition, either the Chairman, the Secretary or the Alternate Secretary of our
Board of Directors must publish a call for a general extraordinary stockholders’ meeting in the Official Gazette of the Federation and two other newspapers
of general circulation in Mexico City at least 30 calendar days prior to such meeting (both in the case of first and subsequent calls). Once the call for the
general extraordinary stockholders’ meeting has been published, all information related to the agenda for the meeting must be available for review by the
holders of Shares at the offices of our Secretary.
Mandatory Tender Offers in the Case of Certain Acquisitions. If either our Board of Directors or our stockholders at a general extraordinary
stockholders’ meeting, as the case may be, authorize an acquisition of ordinaryShares which increases the acquiror’s ownership to 20% or more, but not
more than 50%, of our outstanding ordinaryShares, without such acquisition resulting in a change of control, then the acquiror must effect its acquisition by
way of a cash tender offer for a specified number of Shares equal to the greater of (x) the percentage of ordinary Shares intended to be acquired or (y) 10%
of our outstanding capital stock. In the event that our stockholders approve an acquisition that would result in a change of control, the acquiror must effect
its acquisition by way of a cash tender offer for 100% of our total outstanding capital stock at a price which cannot be lower than the highest of the
following: (i) the book value of the ordinary Shares and CPOs as reported on the last quarterly income statement approved by the Board of Directors, (ii)
the highest closing price of the ordinary Shares, on any stock exchange during any of the three hundred-sixty-five (365) days preceding the date of the
stockholders’ resolution approving the acquisition; or (iii) the highest price paid for any Shares, at any time by the acquiror. All tender offers must be made
in Mexico and the U.S. within 60 days following the date on which the acquisition was approved by our Board of Directors or stockholders’ meeting, as the
case may be. All holders must be paid the same price for their ordinary Shares. The provisions of our bylaws summarized above regarding mandatory
tender offers in the case of certain acquisitions are generally more stringent than those provided for under the Mexican Securities Market Law. In
accordance with the Mexican Securities Market Law, bylaw provisions regarding mandatory tender offers in the case of certain acquisitions may differ
from the requirements set forth in such law, provided that those provisions are more protective to minority stockholders than those afforded by law. In these
cases, the relevant bylaw provisions, and not the relevant provisions of the Mexican Securities Market Law, will apply to certain acquisitions specified
therein.
Exceptions. The provisions of our bylaws summarized above will not apply to (i) transfers of ordinary Shares and/or CPOs by operation of the laws of
inheritance, (ii) acquisitions of ordinary Shares and/or CPOs by any person who, directly or indirectly, is entitled to appoint the greatest number of
members to our Board of Directors, as well as by (A) entities controlled by such person, (B) affiliates of such person, (C) the estate of such person, (D)
certain family members of such person, and (E) such person, when such person acquires any ordinary Shares and/or CPOs from any entity, affiliate, person
or family member referred to in (A), (B) and (D) above, and (iii) acquisitions or transfers of ordinary Shares and/or CPOs by us, our subsidiaries or
affiliates, or any trust created by us or any of our subsidiaries.
Amendments to the Antitakeover Provisions. Any amendments to these antitakeover provisions must be authorized by the CNBV and registered before
the Public Registry of Commerce at our corporate domicile.
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Enforceability of Civil Liabilities
We are a publicly traded corporation (sociedad anónima bursátil) organized under the laws of Mexico. Substantially all of our directors, executive
officers and controlling persons reside outside of the United States, all or a significant portion of the assets of our directors, executive officers and
controlling persons, and substantially all of our assets, are located outside of the United States and some of the experts named in this annual report also
reside outside of the U.S. As a result, it may not be possible for investors to effect service of process within the U.S. upon these persons or to enforce
against them or us in U.S. courts judgments predicated upon the civil liability provisions of the federal securities laws of the United States. We have been
advised by our Mexican counsel, Mijares, Angoitia, Cortés y Fuentes, S.C., that there is doubt as to the enforceability, in original actions in Mexican courts,
of liabilities predicated solely on U.S. federal securities laws and as to the enforceability in Mexican courts of judgments of U.S. courts obtained in actions
predicated upon the civil liability provisions of U.S. federal securities laws. In the past, Mexican courts have enforced judgments rendered in the U.S. by
virtue of the legal principles of reciprocity and comity, consisting of the review in Mexico of the U.S. judgment in order to ascertain whether Mexican legal
principles of due process and public policy (orden público) have been complied with, without reviewing the merits of the subject matter of the case. See
“Key Information—Risk Factors—Risks Factors Related to Our Securities—It May Be Difficult to Enforce Civil Liabilities Against Us or Our Directors,
Executive Officers and Controlling Persons”.
Material Contracts
We have been granted a number of concessions by the Mexican government that authorizes us to broadcast programming over our television stations
and our cable and DTH systems. These concessions are described under “Information on the Company—Business Overview—Regulation”. If we are
unable to renew, or if the Mexican government revokes, any of these concessions, our business would be materially adversely affected. See “Key
Information—Risk Factors—Risk Factors Related to Our Business—The Operation of Our Business May Be Adversely Affected if the Mexican
Government Does Not Renew or Revokes Our Broadcast or Other Concessions”.
In August 2023, we completed a tender offer to purchase in cash a principal amount of up to U.S.$300.0 million of our 4.625% Notes due 2026,
5.000% Notes due 2045, 5.250% Notes due 2049, 6.625% Notes due 2025 and 6.125% Notes due 2046, for an aggregate principal amount of U.S.$300.0
million. The aggregate tender consideration paid amounted to U.S.$281.1 million plus U.S.$3.0 million of accrued and unpaid interest on the settlement
date of the tender offer.
In September 2023, we repurchased a principal amount of Ps.221.6 million of our 7.25% Notes due 2043 in an open market purchase, for a trailing
aggregate of Ps.274.3 million in 2023.
In April 2024, we, together with Cablemás Telecomunicaciones, S.A. de C.V. and Televisión Internacional, S.A. de C.V., as co-borrowers, executed a
credit agreement with a syndicate of banks (the “2024 Credit Agreement”) which provides for a five-year term loan in an aggregate principal amount of
Ps.10,000 million (the “2024 Term Loans”) and a five-year revolving credit facility in an aggregate principal amount of U.S.$500.0 million (the “2024
Revolving Facility”). BBVA México, S.A. Institución de Banca Múltiple, Grupo Financiero BBVA México, Banco Santander México, S.A., Institución de
Banca Múltiple, Grupo Financiero Santander México, and Scotiabank Inverlat, S.A., Institución de Banca Múltiple, Grupo Financiero Scotiabank acted as
joint lead arrangers and joint bookrunners. The 2024 Credit Agreement requires the maintenance of certain financial ratios related to indebtedness and
interest expense. The loans under the 2024 Credit Agreement will bear interest at a floating rate based on a spread of 125 bps or 150 bps over the 28 day
TIIE Rate depending on our net leverage ratio. The 2024 Term Loans were fully funded at closing and part of the proceeds thereof used to prepay in full
our existing indebtedness under the credit agreement we entered into in 2019 with a syndicate of banks which was scheduled to mature in 2024. The loans
under the 2024 Revolving Facility are funded in Mexican Pesos and their funding is subject to customary conditions. Also, we simultaneously terminated a
U.S.$650.0 million revolving credit facility entered into in 2022 with a syndicate of banks (the “2022 Credit Facility”) which was scheduled to mature in
2025. We did not borrow any amounts under the 2022 Credit Facility since its execution in 2022.
Our transactions and arrangements with related parties are described under “Major Stockholders and Related Party Transactions—Related Party
Transactions”.
For a description of our material transactions and arrangements with Univision, see “Information on the Company—Business Overview—
TelevisaUnivision”.
For a description of our material transactions and arrangements with Ollamani, see “Major Stockholders and Related Party Transactions—Related
Party Transactions—Transactions and Arrangements with Ollamani”.
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Legal Proceedings
In the fourth quarter of 2022, the Company recognized a provision for the settlement of a class action lawsuit filed in 2018 in the U.S. District Court
for the Southern District of New York, in the amount of U.S.$95.0 million (Ps.1,850,220), and a receivable for a related reimbursement in the amount of
U.S.$73.5 million (Ps.1,431,486) to be funded by the Company’s insurance contracts. While the Company believed that the allegations in the case were
without merit, it also believed that eliminating the distraction, expense and risk of continued litigation was in the best interest of the Company and its
shareholders. The net amount of U.S.$21.5 million (Ps.425,762) was recognized in other expense in the Group’s consolidated statement of income for the
year ended December 31, 2022, and paid by the Company in the second quarter of 2023. For a description of Commitments, Lawsuit Settlement
Agreements and Contingencies, see Note 27 to our consolidated year-end financial statements.
As the Company previously announced on August 30, 2024, a Department of Justice investigation of FIFA-related activity may have a material impact
on the Company’s consolidated financial condition or results of operations. The Company cannot predict the outcome of the investigation or whether it will
in fact have a material impact. The Company is cooperating with the investigation. Emilio Azcárraga Jean is on leave from his position as Executive
Chairman of the Board since October 24, 2024, pending resolution of this investigation.
There are several legal actions and claims pending against us which are filed in the ordinary course of business. In our opinion, none of these actions
and claims are expected to have a material adverse effect on our financial statements as a whole; however, we are unable to predict the outcome of any of
these legal actions and claims.
Exchange Controls
For a description of exchange controls and exchange rate information, see “Key Information — Exchange Rate Information”.
Taxation
U.S. Taxes
General. The following is a summary of the anticipated material U.S. federal income tax consequences of the purchase, ownership and disposition of
GDSs, CPOs and the Series “A” Shares, Series “B” Shares, Series “L” Shares and Series “D” Shares underlying the CPOs (referred to herein as the
“Underlying Shares”), in each case, except as otherwise noted, by U.S. Holders (as defined below). This discussion does not address all aspects of U.S.
federal income taxation that may be relevant to a particular beneficial owner of GDSs, CPOs or Underlying Shares based on the beneficial owner’s
particular circumstances. For example, with respect to U.S. Holders, the following discussion does not address the U.S. federal income tax consequences to
a U.S. Holder:
●
that owns, directly, indirectly or through attribution, 2% or more of the total voting power or value of our outstanding Underlying Shares
(including through ownership of GDSs and CPOs);
●
that is a dealer in securities, insurance company, financial institution, tax-exempt organization, U.S. expatriate, broker-dealer or trader in
securities; or
●
whose functional currency is not the U.S. Dollar.
●
Also, this discussion does not consider:
●
the tax consequences to the stockholders, partners or beneficiaries of a U.S. Holder; or
●
special tax rules that may apply to a U.S. Holder that holds GDSs, CPOs or Underlying Shares as part of a “straddle,” “hedge,” “conversion
transaction,” “synthetic security” or other integrated investment.
U.S. Holders that use an accrual method of accounting for U.S. federal income tax purposes generally are required to include certain amounts in
income no later than the time such amounts are reflected on certain applicable financial statements. The application of this rule may require the accrual of
income earlier than would be the case under the general U.S. federal income tax rules described below. U.S. Holders that use an accrual method of
accounting for U.S. federal income tax purposes should consult with their tax advisors regarding the potential applicability of this rule to their particular
situation.
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In addition, the following discussion does not address any aspect of state, local or non-U.S. tax laws other than Mexican tax laws. Further, this
discussion generally applies only to U.S. Holders that hold the CPOs, GDSs or Underlying Shares as capital assets within the meaning of Section 1221 of
the U.S. Internal Revenue Code of 1986, as amended (referred to herein as the “Code”).
The discussion set forth below is based on the U.S. federal income tax laws as in force on the date of this annual report, including:
●
the Code, applicable U.S. Treasury regulations and judicial and administrative interpretations; and
●
the convention between the Government of the United States of America and the Government of the United Mexican States for the Avoidance of
Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income, including the applicable protocols, collectively referred to
herein as the “U.S.-Mexico Tax Treaty.”
●
The discussion is subject to changes to those laws and the U.S.-Mexico Tax Treaty subsequent to the date of this annual report, which changes
could be made on a retroactive basis, and is also based, in part, on the representations of the Depositary with respect to the GDSs and on the
assumption that each obligation in the Deposit Agreement relating to the GDSs and any related agreements will be performed in accordance with
their terms.
As used in this section, the term “U.S. Holder” means a beneficial owner of CPOs, GDSs or Underlying Shares that is, for U.S. federal income tax
purposes:
●
a citizen or individual resident of the United States;
●
a corporation (or entity treated as a corporation for such purposes) created or organized in or under the laws of the United States, or any State
thereof or the District of Columbia;
●
an estate the income of which is included in gross income for U.S. federal income tax purposes regardless of source; or
●
a trust, if either (x) it is subject to the primary supervision of a court within the United States and one or more “United States persons” has the
authority to control all substantial decisions of the trust or (y) it has a valid election in effect under applicable U.S. Treasury regulations to be
treated as a “United States person”.
If a partnership (or an entity or arrangement classified as a partnership for U.S. federal income tax purposes) holds CPOs, GDSs or Underlying Shares,
the U.S. federal income tax treatment of a partner in the partnership generally will depend on the status of the partner, the activities of the partnership and
certain determinations made at the partner level. Partnerships holding CPOs, GDSs or Underlying Shares, and partners in such partnerships, should consult
their own tax advisors regarding the U.S. federal income tax consequences of purchasing, owning and disposing of CPOs, GDSs or Underlying Shares.
An individual may be treated as a resident of the United States in any calendar year for U.S. federal income tax purposes by being present in the United
States on at least 31 days in that calendar year and for an aggregate of at least 183 days during a three-year period ending at the close of that year. For
purposes of this calculation, all of the days present in the current year, one-third of the days present in the immediately preceding year and one-sixth of the
days present in the second preceding year would be counted. Residents are taxed for U.S. federal income purposes as if they were U.S. citizens.
The application of the U.S.-Mexico Tax Treaty to U.S. Holders is conditioned upon, among other things, the assumptions that the U.S. Holder:
●
is not a resident of Mexico for purposes of the U.S.-Mexico Tax Treaty;
●
is an individual who has a “substantial presence” (within the meaning of the U.S.-Mexico Tax Treaty) in the United States;
●
is entitled to the benefits of the U.S.-Mexico Tax Treaty under the limitation on benefits provision contained in Article 17 of the U.S.-Mexico Tax
Treaty; and
●
does not have a fixed place of business or a permanent establishment in Mexico with which its ownership of CPOs, GDSs or Underlying Shares is
effectively connected.
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For U.S. federal income tax purposes, U.S. Holders of GDSs and CPOs will be treated as the beneficial owners of the Underlying Shares represented
by the GDSs and CPOs.
Dividends. The U.S. Dollar value of any distribution paid by us, including the amount of any Mexican taxes withheld from such distribution, will be
included in the gross income of a U.S. Holder as a dividend, treated as ordinary income, to the extent that the distribution is paid out of our current and/or
accumulated earnings and profits, as determined under U.S. federal income tax principles. U.S. Holders will not be entitled to claim a dividends received
deduction for dividends received from us. Distributions that are treated as dividends received from us by a non-corporate U.S. Holder who meets certain
eligibility requirements will qualify for U.S. federal income taxation at a preferential rate of 20% (or lower) if we are a “qualified foreign corporation”. We
generally will be a “qualified foreign corporation” if either (i) we are eligible for benefits under the U.S.-Mexico Tax Treaty or (ii) the Underlying Shares or
GDSs are listed on an established securities market in the United States. As we are eligible for benefits under the U.S.-Mexico Tax Treaty and the GDSs are
listed on the New York Stock Exchange, we presently are a “qualified foreign corporation,” and we generally expect to be a “qualified foreign corporation”
in future taxable years, but no assurance can be given that a change in circumstances will not affect our treatment as a “qualified foreign corporation” in
any future taxable years. A non-corporate U.S. Holder will not be eligible for the reduced rate (a) if the U.S. Holder has not held the Underlying Shares,
CPOs or GDSs for at least 61 days of the 121-day period beginning on the date which is 60 days before the ex-dividend date, (b) to the extent the U.S.
Holder is under an obligation to make related payments on substantially similar or related property or (c) with respect to any portion of a dividend that is
taken into account as investment income under Section 163(d)(4)(B) of the Code. Any days during which a U.S. Holder has diminished the U.S. Holder’s
risk of loss with respect to the Underlying Shares, CPOs or GDSs (for example, by holding an option to sell such Underlying Shares, CPOs or GDSs) are
not counted towards meeting the 61-day holding period. Special rules apply in determining the foreign tax credit limitation with respect to dividends
subject to U.S. federal income taxation at the reduced rate. U.S. Holders should consult their own tax advisors concerning whether dividends received by
them qualify for the reduced rate. In addition, a 3.8% tax may apply to certain investment income recognized by a U.S. Holder. See “— Medicare Tax”
below.
To the extent, if any, that the amount of a distribution exceeds our current and/or accumulated earnings and profits, the distribution will first reduce the
U.S. Holder’s adjusted tax basis in its Underlying Shares, CPOs or GDSs and, to the extent the distribution exceeds the U.S. Holder’s adjusted tax basis, it
will be treated as gain from the sale of the U.S. Holder’s Underlying Shares, CPOs or GDSs. We do not maintain calculations of our earnings and profits
under U.S. federal income tax principles. Therefore, a U.S. Holder should expect that a distribution paid by us will be treated as a dividend, even if that
distribution would otherwise be treated as reducing such U.S. Holder’s adjusted tax basis in its Underlying Shares, CPOs or GDSs or as gain from the sale
of the U.S. Holder’s Underlying Shares, CPOs or GDSs under the rules described above.
The U.S. Dollar value of any distributions paid in Pesos, including the amount of any Mexican taxes withheld, will be calculated by reference to the
interbank exchange rate in effect on the date of receipt by the U.S. Holder or, with respect to the GDSs, The Bank of New York Mellon, in its capacity as
Depositary, regardless of whether the payment is in fact converted into U.S. Dollars. U.S. Holders should consult their own tax advisors regarding the
treatment of any foreign currency gain or loss on any distributions paid in Pesos that are not converted into U.S. Dollars on the day the Pesos are received.
Subject to generally applicable limitations and conditions (including a minimum holding period requirement), Mexican dividend withholding tax paid
at the appropriate rate applicable to a U.S. Holder may be eligible for a credit against such U.S. Holder’s U.S. federal income tax liability. In addition to
these generally applicable limitations and conditions, Mexican dividend withholding tax would generally need to satisfy the requirements of foreign tax
credit regulations adopted by the U.S. Internal Revenue Service (“IRS”) in order to be eligible to be a creditable tax for a U.S. foreign tax credit purposes,
unless (i) the U.S. Holder is eligible for, and properly elects, the benefits of the U.S.-Mexico Tax Treaty, in which case the Mexican tax on dividends will
be treated as meeting the requirements of the new regulations and therefore as a creditable tax or (ii) the U.S. Holder elects under recently published IRS
guidance to treat any Mexican tax on dividends as a creditable tax for foreign tax credit purposes and complies with specific requirements set forth in such
guidance. In the case of all other U.S. Holders, the application of these requirements to the Mexican tax on dividends is uncertain and we have not
determined whether these requirements have been met. If Mexican tax on dividends is not a creditable or if the U.S. Holder does not elect to claim a foreign
tax credit for any foreign income taxes paid or accrued in the same taxable year, the U.S. Holder may be able to deduct the Mexican tax in computing such
U.S. Holder’s taxable income for U.S. federal income tax purposes. For U.S. foreign tax credit purposes, dividends distributed by us on CPOs, GDSs or
Underlying Shares generally will constitute foreign source “passive category income.” The availability and calculation of foreign tax credits and deductions
for foreign taxes depend on a U.S. Holder’s particular circumstances and involve the application of complex rules to those circumstances. U.S. Holders
should consult their own tax advisors regarding the application of these rules to their particular situations.
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In general, pro rata distributions of additional shares with respect to the Underlying Shares that are part of a pro rata distribution to all of our
stockholders generally (including U.S. Holders of GDSs) will not be subject to U.S. federal income tax.
A beneficial owner of CPOs, GDSs or Underlying Shares that is not a U.S. Holder and is not a partnership (or an entity or arrangement classified as a
partnership for U.S. federal income tax purposes) will not be subject to U.S. federal income or withholding tax on a dividend paid with respect to the CPOs,
GDSs or the Underlying Shares, unless the dividend is effectively connected with the conduct by the beneficial owner of a trade or business in the United
States.
Capital Gains. Gain or loss recognized by a U.S. Holder on a taxable sale or exchange of CPOs, GDSs or Underlying Shares will be subject to U.S.
federal income taxation as capital gain or loss in an amount equal to the difference between the amount realized on the sale or exchange and the U.S.
Holder’s adjusted tax basis in the CPOs, GDSs or Underlying Shares. Such capital gain or loss generally will be long-term capital gain or loss if the CPOs,
GDSs or Underlying Shares have been held for more than one year at the time of disposition. Long-term capital gain of non-corporate U.S. Holders,
including individual U.S. Holders, is subject to U.S. federal income tax at a preferential rate of 20% (or lower). In addition, a 3.8% tax may apply to certain
investment income recognized by a U.S. Holder on a sale or exchange of CPOs, GDSs or Underlying Shares. See “— Medicare Tax” below. The
deductibility of capital losses is subject to significant limitations.
Under foreign tax credit regulations adopted by the IRS, any Mexican tax imposed such capital gains generally will not be treated as a creditable tax
for U.S. foreign tax credit purposes, unless (i) the U.S. Holder is eligible for, and properly elects, the benefits of the U.S.-Mexico Tax Treaty or (ii) the U.S.
Holder elects under recently published IRS guidance to treat any Mexican tax on such capital gains as a creditable tax for foreign tax credit purposes and
complies with specific requirements set forth in such guidance. If the Mexican tax is not a creditable tax, the tax would reduce the amount realized on the
sale or other disposition of CPOs, GDSs or Underlying Shares, even if the U.S. Holder has elected to claim a foreign tax credit for other taxes in the same
year. Capital gains realized on the sale or other disposition of CPOs, GDSs or Underlying Shares generally will be U.S. source income, unless the gains are
subject to Mexican taxation, in which case such gains generally will be treated as arising in Mexico under the U.S.-Mexico Tax Treaty. If capital gains are
subject to Mexican taxation under the U.S.-Mexico Tax Treaty, a U.S. Holder generally may elect to treat such gains as foreign source income for U.S.
foreign tax credit limitation purposes. However, any such Mexican taxes may not be used to offset U.S. federal income tax on any other item of income,
and foreign taxes on any other item of income cannot be used to offset U.S. federal income tax on such gains. U.S. Holders should consult their tax
advisors regarding the potential applicability of these rules to their particular situations.
Capital losses recognized on the sale or exchange of CPOs, GDSs or Underlying Shares generally will offset U.S. source income. Deposits and
withdrawals of CPOs for GDSs and of Underlying Shares for CPOs by U.S. Holders will not be subject to U.S. federal income tax.
A beneficial owner of CPOs, GDSs or Underlying Shares that is not a U.S. Holder and is not a partnership (or an entity or arrangement classified as a
partnership for U.S. federal income tax purposes) generally will not be subject to U.S. federal income tax on gain recognized on a sale or exchange of
CPOs, GDSs or Underlying Shares unless:
●
the gain is effectively connected with the beneficial owner’s conduct of a trade or business in the United States; or
●
the beneficial owner is an individual who holds CPOs, GDSs or Underlying Shares as a capital asset, is present in the United States for 183 days
or more in the taxable year of the sale or exchange and meets other requirements.
Medicare Tax. A U.S. Holder that is an individual or estate, or a trust that does not fall into a special class of trusts that is exempt from such tax, will
generally be subject to a 3.8% tax on the lesser of (i) the U.S. Holder’s “net investment income” for a taxable year and (ii) the excess of the U.S. Holder’s
modified adjusted gross income for such taxable year over U.S.$200,000 (U.S.$250,000 in the case of joint filers). For these purposes, “net investment
income” will generally include dividends paid with respect to CPOs, GDSs or Underlying Shares and net gain attributable to the disposition of CPOs,
GDSs or Underlying Shares (in each case, unless such CPOs, GDSs or Underlying Shares are held in connection with certain trades or businesses), but will
be reduced by any deductions properly allocable to such income or net gain.
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U.S. Backup Withholding. A U.S. Holder may be subject to U.S. information reporting and U.S. backup withholding on dividends paid on Underlying
Shares, and on proceeds from the sale or other disposition of CPOs, GDSs or Underlying Shares, unless the U.S. Holder:
●
comes within an exempt category and, if required, certifies its exempt status; or
●
provides the applicable withholding agent with the U.S. Holder’s taxpayer identification number, certifies as to no loss of exemption from backup
withholding tax and otherwise complies with the applicable requirements of the backup withholding rules.
The amount of any backup withholding will be allowed as a credit against the U.S. Holder’s U.S. federal income tax liability and may entitle such
holder to a refund, provided, however, that certain required information is timely furnished to the U.S. Internal Revenue Service (“IRS”). A beneficial
owner of CPOs, GDSs or Underlying Shares that is not a U.S. Holder may be required to comply with certification and identification procedures in order to
establish its exemption from backup withholding.
Certain Reporting Requirements. U.S. Holders that are individuals (and to the extent specified in applicable U.S. Treasury regulations, certain U.S.
Holders that are entities and certain individuals that are not U.S. Holders) and hold “specified foreign financial assets” (as defined in section 6038D of the
Code) are required to file a report on IRS Form 8938 with information relating to such assets for each taxable year in which the aggregate value of all such
assets exceeds U.S.$75,000 at any time during the taxable year or U.S.$50,000 on the last day of the taxable year (or such higher dollar amount as
prescribed by applicable U.S. Treasury regulations). Specified foreign financial assets would include, among other assets, GDSs, CPOs and Underlying
Shares that are not held through an account maintained with a U.S. “financial institution” (as defined). Substantial penalties apply to any failure to timely
file IRS Form 8938, unless the failure is shown to be due to reasonable cause and not due to willful neglect. Additionally, in the event a U.S. Holder that is
required to file IRS Form 8938 does not file such form, the statute of limitations on the assessment and collection of U.S. federal income taxes of such U.S.
Holder for the related tax year may not close until three years after the date that the required information is filed. Beneficial owners of GDSs, CPOs or
Underlying Shares should consult their own tax advisors regarding their reporting obligations with respect to “specified foreign financial assets”.
Federal Mexican Taxation
General. The following is a general summary of the main tax consequences under the Mexican Income Tax Law, Federal Tax Code and rules as
currently in effect (the “Mexican Tax Legislation”), all of which are subject to change or interpretation, and under the U.S.-Mexico Tax Treaty, of the
purchase, ownership and disposition of CPOs, GDSs or underlying Series “A” Shares, Series “B” Shares, Series “D” Shares and Series “L” Shares by a
person that is not a resident of Mexico for tax purposes, as defined below.
U.S. Holders should consult with their own tax advisors as to their entitlement to benefits afforded by the U.S.-Mexico Tax Treaty. Mexico has also
entered into and is negotiating with various countries regarding other tax treaties that may have an effect on the tax treatment of CPOs, GDSs or underlying
Series “A” Shares, Series “B” Shares, Series “D” Shares and Series “L” Shares. Holders should consult with their tax advisors as to their entitlement to the
benefits afforded by these treaties.
This discussion does not constitute, and shall not be considered as, legal or tax advice to holders.
According to the Mexican Tax Legislation:
●
an individual is a Mexican tax resident if the individual has established his permanent home in Mexico. When an individual, in addition to his
permanent home in Mexico, has a permanent home in another country, the individual will be a Mexican tax resident if his center of vital interests
is located in Mexico. This will be deemed to occur if, among other circumstances, either (i) more than 50% of the total income obtained by the
individual in the calendar year is Mexican source or (ii) when the individual’s center of professional activities is located in Mexico. Unless
otherwise proven, a Mexican national is considered a Mexican tax resident;
●
a legal entity is considered a Mexican tax resident if it maintains the main administration of its head office, business, or the effective location of
its management in Mexico.
●
a foreign person with a permanent establishment in Mexico will be required to pay taxes in Mexico in accordance with the Mexican Tax
Legislation for income attributable to such permanent establishment; and
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●
a foreign person without a permanent establishment in Mexico will be required to pay taxes in Mexico in respect of revenues proceeding from
sources of wealth located in national territory.
Mexican nationals and legal entities who filed a change of tax residence to a country or jurisdiction that does not have a comprehensive exchange of
information agreement with Mexico and an International Treaty that Enables Mutual Administrative Assistance in the Notification, Payment and Collection
of Contributions, in which the income of the relevant person is subject to a preferred tax regime pursuant to the provisions of the Mexican Income Tax Law,
will be considered as Mexican residents for tax purposes during the year of filing of the notice of such residence change and during the following five
years. If the notice is not filed, the nationals or legal entities will continue be considered as Mexican tax residents.
Dividends. Beginning in 2014, dividends, either in cash or in any other form, coming from our “previously taxed net earnings account”, or “cuenta de
utilidad fiscal neta”, generated up to 2013 and paid with respect to the shares underlying the CPOs, including those CPOs represented by GDSs, will not be
subject to Mexican withholding tax. On the other hand, the dividends coming from our previously taxed net earnings account generated during or after
2014 will be subject to a 10% Mexican withholding tax. We must first utilize the previously taxed net earnings account generated up to 2013 and when this
account no longer has a balance, we must utilize the previously taxed net earnings account generated during or after 2014. The latter dividends will be
subject to the 10% Mexican withholding tax.
However, under the U.S.-Mexico Tax Treaty, any U.S. Holder that is eligible to claim the benefits of the U.S.-Mexico Tax Treaty may be exempt from
or subject to a lower withholding tax rate on dividends paid with respect to the shares underlying the CPOs, including those CPOs represented by GDSs.
The U.S. Holder may be subject to a lower withholding tax rate (5%) under the U.S.-Mexico Tax Treaty if the U.S. Holder is a company that owns directly
at least 10% of our voting outstanding shares.
On the other hand, the U.S. Holder may be exempt from withholding tax under the U.S.-Mexico Tax Treaty if the U.S. Holder is either (a) a company
that has owned shares representing 80 percent or more of our voting outstanding shares for a 12-month period ending on the date the dividend is declared
and that (1) prior to October 1, 1998 owned, directly or indirectly, shares representing 80 percent or more of our voting outstanding shares; or (2) is entitled
to the benefits of the U.S.-Mexico Tax Treaty under clauses (i) or (ii) of subparagraph d) of paragraph 1 of Article 17 (Limitation on Benefits); or (3) is
entitled to the benefits of the U.S.-Mexico Tax Treaty with respect to the dividends under subparagraph g) of paragraph 1 of Article 17; or (4) has received
a determination from the relevant competent authority pursuant to paragraph 2 of Article 17; or (b) a trust, company, or other organization constituted and
operated exclusively to administer or provide benefits under one or more plans established to provide pension, retirement or other employee benefits and its
income is generally exempt from tax in the United States, provided that such dividends are not derived from the carrying on of a business, directly or
indirectly, by such trust, company or organization.
Dividends paid to other Holders that are eligible to receive benefits pursuant to other income tax treaties to which Mexico is a party may be exempt
from or subject to a lower withholding tax rate in whole or in part. Non-U.S. Holders should consult their own tax advisors as to their possible eligibility
under such other income tax treaties. Appropriate tax residence certifications must be obtained by Holders eligible for tax treaty benefits.
When dividends are paid from our previously taxed net earnings account we will not be required to pay any Mexican corporate income tax on the
dividends. During 2024, if dividends are not paid from our previously taxed net earnings account we will be required to pay a 30% Mexican corporate
income tax on the grossed-up dividends with the factor 1.4286.
Sales or Other Dispositions. Deposits and withdrawals of CPOs for GDSs and of underlying Series “A” Shares, Series “B” Shares, Series “D” Shares
and Series “L” Shares for CPOs will not give rise to Mexican tax or transfer duties.
Beginning on January 1, 2014, the gains on the sale or other disposition of CPOs, GDSs or underlying Series “A” Shares, Series “B” Shares,
Series “D” Shares and Series “L” Shares will be subject to a 10% Mexican withholding tax if the sale is carried out through the Mexican Stock Exchange.
This withholding tax will not apply if the Holder is a tax resident of a country that has in effect a Tax Treaty with Mexico, as is the case with the United
States; in order to obtain this benefit the Holder must deliver to the withholding agent a letter stating, under oath, (i) that the Holder is resident for purposes
of the specific Tax Treaty and (ii) the Holder’s tax identification number.
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Sales or other dispositions of CPOs, GDSs or underlying Series “A” Shares, Series “B” Shares, Series “D” Shares and Series “L” Shares made in other
circumstances also would be subject to Mexican income tax. However, under the U.S.-Mexico Tax Treaty, any U.S. Holder that is eligible to claim the
benefits of the U.S.-Mexico Tax Treaty may be exempt from Mexican tax on gains realized on a sale or other disposition of CPOs and shares underlying the
CPOs in a transaction that is not carried out through the Mexican Stock Exchange. The U.S. Holder will be exempt under the U.S.-Mexico Tax Treaty if the
U.S. Holder did not own directly or indirectly 25% or more of our outstanding shares within the 12-month period preceding such sale or disposition. Gains
realized by other Holders that are eligible to receive benefits pursuant to other income tax treaties to which Mexico is a party may be exempt from Mexican
income tax in whole or in part. Non-U.S. Holders should consult their own tax advisors as to their possible eligibility under such other income tax treaties.
Appropriate tax residence certifications must be obtained by Holders eligible for tax treaty benefits.
Other Mexican Taxes. There are no estate, gift or succession taxes applicable to the ownership, transfer or disposition of CPOs, GDSs or underlying
Series “A” Shares, Series “B” Shares, Series “D” Shares and Series “L” Shares. However, a gratuitous transfer of CPOs, GDSs or underlying Series “A”
Shares, Series “B” Shares, Series “D” Shares and Series “L” Shares may, in some circumstances, result in the imposition of a Mexican federal tax upon the
recipient. There are no Mexican stamp, issuer, registration or similar taxes or duties payable by holders of GDSs, CPOs, or underlying Series “A” Shares,
Series “B” Shares, Series “D” Shares and Series “L” Shares.
Documents on Display
For further information with respect to us and our CPOs and GDSs, we refer you to the filings we have made with the SEC. Statements contained in
this annual report concerning the contents of any contract or any other document are not necessarily complete. If a contract or document has been filed as
an exhibit to any filing we have made with the SEC, we refer you to the copy of the contract or document that has been filed. Each statement in this annual
report relating to a contract or document filed as an exhibit to any filing we have made with the SEC is qualified in its entirety by the filed exhibit.
The Company is subject to the informational requirements of the Exchange Act and in accordance therewith files reports and other information with
the SEC. Reports and other information filed by the Company with the SEC are available at the SEC’s website at www.sec.gov. We maintain a website at
http://www.televisair.com/en and make all of our annual, quarterly and current reports and other publicly filed information available, free of charge, on or
through our website.
We furnish The Bank of New York Mellon, the depositary for our GDSs, with annual reports in English. These reports contain audited consolidated
financial statements that, starting with the annual report for year ended December 31, 2012, have been prepared in accordance with IFRS. The historical
financial statements included in these reports have been examined and reported on, with an opinion expressed by, an independent registered public
accounting firm. The depositary is required to mail our annual reports to all holders of record of our GDSs. The Deposit Agreement for the GDSs also
requires us to furnish the depositary with English translations of all notices of stockholders’ meetings and other reports and communications that we send to
holders of our CPOs. The depositary is required to mail these notices, reports and communications to holders of record of our GDSs.
As a foreign private issuer, we are not required to furnish proxy statements to holders of our CPOs or GDSs in the United States.
Item 11. Quantitative and Qualitative Disclosures About Market Risk
Market Risk Disclosures
Market risk is the exposure to an adverse change in the value of financial instruments caused by market factors including changes in equity prices,
interest rates, foreign currency exchange rates, commodity prices and inflation rates. The following information includes “forward-looking statements” that
involve risks and uncertainties. Actual results could differ from those presented.
Risk Management. We are exposed to market risks arising from changes in equity prices, interest rates, foreign currency exchange rates and inflation
rates, in both the Mexican and U.S. markets. Our risk management activities are monitored by our Investments, Risk Management and Treasury
Committee.
We monitor our exposure to interest rate risk by: (i) evaluating differences between interest rates on our outstanding debt and short-term investments
and market interest rates on similar financial instruments; (ii) reviewing our cash flow needs and financial ratios (indebtedness and interest coverage);
(iii) assessing current and forecasted trends in the relevant markets; and (iv) evaluating peer group and industry practices. This approach allows us to
establish the interest rate “mix” between variable and fixed rate debt.
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129
Foreign currency exchange risk is monitored by assessing our net monetary liability position in U.S. Dollars and our forecasted cash flow needs for
anticipated U.S. Dollar investments and servicing our U.S. Dollar-denominated debt. Equity price risk is assessed by evaluating the long-term value of our
investment in both domestic and foreign affiliates, versus comparable investments in the marketplace. We classify our equity investments in affiliates, both
domestic and foreign, as long-term assets.
In compliance with the procedures and controls established by our Investments, Risk Management and Treasury Committee, in 2022, 2023 and 2024,
we entered into certain derivative transactions with certain financial institutions in order to manage our exposure to market risks resulting from changes in
interest rates, foreign currency exchange rates, and inflation rates. Our objective in managing foreign currency and inflation fluctuations is to reduce
earnings and cash flow volatility. See Notes 2(w), 4 and 15 to our consolidated year-end financial statements.
Foreign Currency Exchange Rate Risk and Interest Rate Risk
During 2024, the Company entered into forward exchange rate agreements, primarily for coupons and principal of U.S. dollar denominated debt that
were expected to be made during 2024, 2025 and 2026. As of December 31, 2024, the notional amount outstanding of the active forward contracts was
U.S.$ 592.0 million and the net fair value of these agreements was a gain of Ps.1,975.1 million. As of March 31, 2025, the notional amount outstanding of
the active forward contracts for coupons and principal was U.S.$ 300.9 million and the net fair value of these agreements was a gain of Ps.799.2million.
The potential loss in fair value for such instruments from a hypothetical 1.0% change in the exchange rate would be approximately Ps.129.4 million as of
December 31, 2024, and Ps.77.0 million as of March 31, 2025. This sensitivity analysis assumes a downward parallel shift in the Mexican Peso.
During 2024, the Company entered into forward exchange rate agreements, primarily for capital expenditures that were expected to be made during
2024 and 2025. As of December 31, 2024, the notional amount outstanding of the active forward contracts was U.S.$14.0 million. The net fair value of
these agreements was a gain of Ps.8.8 million. As of March 31, 2025, the notional amount outstanding of the active forward contracts was U.S.$35.0
million. The net fair value of these agreements was a gain of Ps.7.0 million. The potential loss in fair value for such instruments from a hypothetical 1.0%
change in the exchange rate would be approximately Ps.3.5 million as of December 31, 2024 and Ps.8.7 million as of March 31, 2025. This sensitivity
analysis assumes a downward parallel shift in the Mexican Peso.
During 2024, Cablevisión entered into forward exchange rate agreements, primarily for capital expenditures that were expected to be made during
2024. As of December 31, 2024, the notional amount outstanding of the active forward contracts was U.S.$4.0 million. The net fair value of these
agreements was a gain of Ps.2.5 million. As of March 31, 2025, the notional amount outstanding of the active forward contracts was U.S.$10.0 million. The
net fair value of these agreements was a gain of Ps.1.7 million. The potential loss in fair value for such instruments from a hypothetical 1.0% change in the
exchange rate would be approximately Ps.1.0 million as of December 31, 2024, and Ps.2.2 million as of March 31, 2025. This sensitivity analysis assumes
a downward parallel shift in the Mexican Peso.
During 2024, TVI entered into forward exchange rate agreements, primarily for capital expenditures that were expected to be made during 2024. As of
December 31, 2024, the notional amount outstanding of the active forward contracts was U.S.$8.0 million. The net fair value of these agreements was a
gain of Ps.4.4 million. As of March 31, 2025, the notional amount outstanding of the active forward contracts was U.S.$15.0 million. The net fair value of
these agreements was a gain of Ps.2.8 million. The potential loss in fair value for such instruments from a hypothetical 1.0% change in the exchange rate
would be approximately Ps.1.8 million as of December 31, 2024, and Ps.3.5 million as of March 31, 2025. This sensitivity analysis assumes a downward
parallel shift in the Mexican Peso.
During 2024, Corporación Novavision entered into forward exchange rate agreements, primarily for capital expenditures that were expected to be
made during 2024. As of December 31, 2024, the notional amount outstanding of the active forward contracts was U.S.$15.0 million. The net fair value of
these agreements was a gain of Ps.8.1 million. As of March 31, 2025, the notional amount outstanding of the active forward contracts was U.S.$25.0
million. The net fair value of these agreements was a gain of Ps.5.0 million. The potential loss in fair value for such instruments from a hypothetical 1.0%
change in the exchange rate would be approximately Ps.3.4 million as of December 31, 2024, and Ps.6.2 million as of March 31, 2025. This sensitivity
analysis assumes a downward parallel shift in the Mexican Peso.
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130
During 2024, Cablemás Telecomunicaciones entered into forward exchange rate agreements, primarily for capital expenditures that were expected to
be made during 2025. As of December 31, 2024, the notional amount outstanding of the active forward contracts was U.S.$5.0 million. The net fair value
of these agreements was a gain of Ps.2.2 million. As of March 31, 2025, the notional amount outstanding of the active forward contracts was U.S.$10.0
million. The net fair value of these agreements was a gain of Ps.2.0 million. The potential loss in fair value for such instruments from a hypothetical 1.0%
change in the exchange rate would be approximately Ps.1.1 million as of December 31, 2024, and Ps.2.5 million as of March 31, 2025. This sensitivity
analysis assumes a downward parallel shift in the Mexican Peso.
Sensitivity and Fair Value Analyses
The sensitivity analyses that follow are intended to present the hypothetical change in fair value or loss in earnings due to changes in interest rates,
inflation rates, foreign currency exchange rates and debt and equity market prices as they affect our financial instruments at December 31, 2024 and 2023.
These analyses address market risk only and do not present other risks that we face in the ordinary course of business, including country risk and credit
risk. The hypothetical changes reflect our view of changes that are reasonably possible over a one-year period. For purposes of the following sensitivity
analyses, we have made conservative assumptions of expected near-term future changes in U.S. interest rates, Mexican interest rates, inflation rates and
Peso to U.S. Dollar exchange rates of 10%. The results of the analyses do not purport to represent actual changes in fair value or losses in earnings that we
will incur.
Increase
(decrease) of
fair value over
carrying amount
Increase
assuming a
(decrease) of
hypothetical
fair value over
10% increase in
December 31, 2024
Carrying amount(2)
Fair value(3)
carrying amount
fair value
Assets:
Long-term loan and interest receivable from GTAC
Ps.
1,024.4
Ps.
1,031.5
Ps.
7.1
Ps.
110.3
Open-Ended Fund
784.8
784.8
—
78.5
Publicly traded equity instruments
1,709.9
1,709.9
—
171.0
Derivative financial instruments(1)
2,001.0
2,001.0
—
200.1
Liabilities:
U.S. dollar-denominated debt:
Senior Notes due 2025(4)
4,579.5
4,577.9
(1.6)
456.2
Senior Notes due 2026
4,328.7
4,254.2
(74.5)
350.9
Senior Notes due 2032
6,260.7
6,838.3
577.6
1,261.4
Senior Notes due 2040
12,521.5
11,389.8
(1,131.7)
7.3
Senior Notes due 2045
16,499.3
11,969.1
(4,530.2)
(3,333.3)
Senior Notes due 2046
18,355.9
15,480.1
(2,875.8)
(1,327.8)
Senior Notes due 2049
13,792.9
10,280.4
(3,512.5)
(2,484.5)
Peso-denominated debt:
Notes due 2027
4,500.0
4,252.7
(247.3)
178.0
Senior Notes due 2037
4,500.0
3,186.4
(1,313.6)
(994.9)
Senior Notes due 2043
6,225.7
3,608.5
(2,617.2)
(2,256.4)
Long-term notes payable to Mexican Banks
12,650.0
12,777.2
127.2
1,405.0
Lease Liabilities
5,386.6
5,454.2
67.5
612.9
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131
Increase
(decrease) of
fair value over
carrying amount
Increase
assuming a
(decrease) of
hypothetical
fair value over
10% increase in
December 31, 2023
Carrying amount(2)
Fair value(3)
carrying amount
fair value
Assets:
Long-term loan and interest receivable from GTAC
Ps.
948.5
Ps.
953.4
Ps.
4.9
Ps.
100.2
Open-Ended Fund
674.5
674.5
—
—
Publicly traded equity instruments
1,912.2
1,912.2
—
—
Derivative financial instruments(1)
251.7
251.7
—
—
Liabilities:
U.S. dollar-denominated debt:
Senior Notes due 2025(4)
3,715.6
3,762.2
46.6
422.8
Senior Notes due 2026
3,512.1
3,465.5
(46.6)
299.9
Senior Notes due 2032
5,079.8
5,969.1
889.3
1,486.2
Senior Notes due 2040
10,159.5
10,701.6
542.1
1,612.3
Senior Notes due 2045
13,387.0
11,542.8
(1,844.2)
(689.9)
Senior Notes due 2046
14,893.4
14,913.9
20.5
1,511.9
Senior Notes due 2049
11,191.2
10,035.2
(1,156.0)
(152.4)
Peso-denominated debt:
Notes due 2027
4,500.0
4,233.2
(266.8)
156.5
Senior Notes due 2037
4,500.0
4,026.1
(473.9)
(71.3)
Senior Notes due 2043
6,225.7
4,064.1
(2,161.6)
(1,755.1)
Long-term notes payable to Mexican Banks
12,650.0
12,789.7
139.7
1,418.7
Lease Liabilities
7,291.6
7,334.5
42.9
776.4
(1)
Given the nature and the tenor of these derivatives, an increase of 10% in the interest and/or exchange rates would not be an accurate sensitivity
analysis.
(2)
The carrying value of debt is stated in this table at its principal amount.
(3)
The fair value of the Senior Notes and Notes due by the Group are within Level 1 of the fair value hierarchy as there is a quoted market price for them.
The fair value of the lease liabilities are within Level 2 of the fair value hierarchy and has been estimated based on cash flows discounted using an
estimated weighted average cost of capital. The fair value of held-to-maturity securities are within Level 1 of the fair value hierarchy and were based
on market interest rates to the listed securities.
(4)
The Senior Notes due 2025 were repaid at maturity on March 18, 2025.
We are also subject to the risk of foreign currency exchange rate fluctuations, resulting from the net monetary position in U.S. Dollars of our Mexican
operations, as follows:
Year Ended December 31,
2024
2023
(In millions of U.S. Dollars)
U.S. Dollar-denominated and U.S. Dollar-equivalent monetary assets, primarily cash and cash
equivalents, and non-current investments in financial instruments(1)
U.S.$
1,352.0 U.S.$
1,398.5
U.S. Dollar-denominated and U.S. Dollar-equivalent monetary liabilities, primarily trade accounts
payable, Senior debt securities, lease liabilities, and other liabilities(2)(3)
(3,942.2)
(4,010.2)
Net liability position
U.S.$
(2,590.2)
U.S.$
(2,611.7)
(1)
In 2024 and 2023, include U.S. Dollar equivalent amounts of U.S.$33.4 million and U.S.$36.0 million, respectively, related to other foreign currencies,
primarily Euros.
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132
(2)
In 2024 and 2023, include U.S. Dollar equivalent amounts of U.S.$0.1 million and U.S.$20.1 million, respectively, related to other foreign currencies,
primarily Euros.
(3)
In 2024 and 2023, monetary liabilities included U.S.$2,108.7 million (Ps.44,005.8 million) and U.S.$2,539.5 million (Ps.43,000.8 million),
respectively, related to long-term debt designed as a hedging instrument of the Group’s investments in TelevisaUnivision and the investment in Open-
Ended Fund.
At December 31, 2024, a hypothetical 10% appreciation/depreciation in the U.S. dollar to Mexican peso exchange rate would result in a foreign
exchange gain/loss, net of hedge, of Ps.1,004.9 million. At December 31, 2023, a hypothetical 10% appreciation/depreciation in the U.S. dollar to Mexican
peso exchange rate would result in a foreign exchange gain/loss, net of hedge, of Ps.122.2 million.
Item 12. Description of Securities Other than Equity Securities
Global Depositary Shares
The Bank of New York Mellon, the depositary for the securities underlying our GDSs, collects its fees for delivery and surrender of GDSs directly
from investors depositing shares or surrendering GDSs for the purpose of withdrawal or from intermediaries acting for them. The depositary collects fees
for making distributions to investors by deducting those fees from the amounts distributed or by selling a portion of distributable property to pay the fees.
The depositary may collect its annual fee for depositary services by deductions from cash distributions or by directly billing investors or by charging the
book-entry system accounts of participants acting for them. The depositary may generally refuse to provide fee-attracting services until its fees for those
services are paid.
The following table summarizes the fees and charges that a GDS holder may be required to pay, directly or indirectly, to the depositary pursuant to the
terms of the Deposit Agreement, which was filed with the SEC as an exhibit to our Registration Statement on Form F-6 filed on September 17, 2007:
Fee
Depositary Service
U.S.$5.00 (or less) per 100 GDSs (or portion of 100 GDSs)
●
Issuance of GDSs, including issuances resulting from a distribution of
shares or rights or other property
●
Cancellation of GDSs for the purpose of withdrawal, including if the
deposit agreement terminates
U.S.$0.02 (or less) per GDS
●
Any cash distribution to GDS registered holders
A fee equivalent to the fee that would be payable if securities distributed to
holders had been CPOs and the CPOs had been deposited for issuance of
GDSs
●
Distribution of securities distributed to holders of deposited securities
which are distributed by the depositary to GDS registered holders
U.S.$0.02 (or less) per GDS per calendar year
●
Depositary services
Registration or transfer fees
●
Transfer and registration of CPOs on our CPO register to or from the
name of the depositary or its agent when holders deposit or withdraw
CPOs
Expenses of the depositary
●
Cable and facsimile transmissions (when expressly provided in the
deposit agreement)
●
Converting foreign currency to U.S. dollars
Taxes and other governmental charges the depositary or the custodian have
to pay on any GDS or share underlying a GDS, for example, stock
transfer taxes, stamp duty or withholding taxes
●
As necessary
Any charges incurred by the depositary or its agents for servicing the
deposited securities
●
As necessary
Note that the actual amounts charged by the depositary may differ from those set out in the table above, but may not exceed these levels.
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133
The Bank of New York Mellon, as depositary, pays us an agreed amount as reimbursement for certain expenses we incur related to our being a
publicly-listed entity in the United States, including, but not limited to, internal and out-of-pocket investor relations expenses, corporate finance and
accounting expenses, legal expenses, annual NYSE listing fees, Sarbanes-Oxley compliance, travel expenses related to presentations to rating agencies and
investors, road show presentations, or any other similar or related expenses. There are limits on the amount of expenses for which the depositary will
reimburse us, but the amount of reimbursement available to us is not necessarily tied to the amount of fees the depositary collects from investors. In 2024,
we received a U.S.$6.4 million reimbursement from the depositary.
Part II
Item 13.Defaults, Dividend Arrearages and Delinquencies
Not applicable.
Item 14.Material Modifications to the Rights of Security Holders and Use of Proceeds
Not applicable.
Item 15.Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Based on the evaluation as of December 31, 2024, our Co-Chief Executive Officers and Principal Financial Officer of the Company have concluded
that the Company’s disclosure controls and procedures (as defined under Exchange Act Rules 13a-15(e) and 15d-15(e)) are effective to provide reasonable
assurance that the information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934 is
recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and
communicated to management, including our Co-Chief Executive Officers and the Principal Financial Officer, as appropriate to allow timely decisions
regarding required disclosure.
Management’s Annual Report on Internal Control Over Financial Reporting
The Company’s management, including our Co-Chief Executive Officers and Principal Financial Officer, is responsible for establishing and
maintaining adequate internal control over financial reporting and is responsible for the assessment of the effectiveness of internal control over financial
reporting as such terms are defined in Rule 13a-15(f) of the Exchange Act.
Management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2024. In making this
assessment, management used the criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO).
Internal control over financial reporting has inherent limitations. Internal control over financial reporting is a process that involves human diligence
and compliance and is subject to lapses in judgment and breakdowns resulting from human failures. Internal control over financial reporting also can be
circumvented by collusion or improper management override. Because of such limitations, there is a risk that material misstatements will not be prevented
or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting
process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.
Management concluded that the Company maintained effective internal control over financial reporting as of December 31, 2024.
The effectiveness of the Company’s internal control over financial reporting as of December 31, 2024 has been audited by KPMG Cárdenas Dosal,
S.C., an independent registered public accounting firm, as stated in their report which appears herein.
Changes in Internal Control Over Financial Reporting
There has been no change in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under
the Securities Exchange Act of 1934, as amended) that occurred during the year ended December 31, 2024 that has materially affected, or is reasonably
likely to materially affect, the Company’s internal controls over financial reporting.
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134
Item 16.Audit Committee Financial Expert
Our board of directors has determined that Mr. Guillermo García Naranjo Álvarez, Chairman of the Audit Committee of the Company, as well as Mr.
Francisco José Chevez Robelo, former Chairman of the Audit Committee of the Company, are audit committee financial experts. Mr. García Naranjo and
Mr. Chevez are “independent” and meet the requisite qualifications as defined in Item 16A of Form 20-F.
Code of Ethics
We have adopted a written code of ethics that applies to all of our employees, including our principal executive officers, principal financial officer, and
principal accounting officer.
We did not grant any waivers to our code of ethics during the fiscal year ended December 31, 2024.
You may request a copy of our code of ethics, at no cost, by writing to or telephoning us as follows:
Grupo Televisa, S.A.B.
Avenida Vasco de Quiroga, No. 2000
Colonia Santa Fe, 01210 Mexico City, Mexico.
Telephone: (+52) 55 5261-2000.
In addition, the English version of the code of ethics can be found at http://www.televisair.com/en/governance/codes-and-bylaws and the Spanish
version at http://www.televisair.com/es-ES/governance/codes-and-bylaws.
Principal Accountant Fees and Services
KPMG Cárdenas Dosal, S.C. acted as our independent registered public accounting firm for the fiscal years ended December 31, 2024 and 2023.
The chart below sets forth the total amount billed by our independent registered public accounting firms for services performed in the years 2024 and
2023, and breaks down these amounts by category of service:
2024
2023
(in millions of Pesos)
Audit Fees
Ps.
101.4
Ps.
97.3
Audit-Related Fees
2.6
6.6
Tax Fees
3.6
11.5
Other Fees
—
0.3
Total
Ps.
107.6
Ps.
115.7
“Audit Fees” are the aggregate fees billed by our Independent Registered Public Accounting Firms for the audit of our consolidated annual financial
statements, services related to regulatory financial filings with the SEC.
“Audit-Related Fees” are fees charged by our Independent Registered Public Accounting Firm for assurance and related services that are reasonably
related to the performance of the audit or review of our financial statements and are not reported under “Audit Fees”. This category includes fees billed for
due diligence reviews in connection with potential acquisitions and business combinations, attestation services that are provided in connection with
statutory and regulatory filings or engagements and agreed upon procedures.
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135
“Tax Fees” are fees for professional services rendered by the Company’s Independent Registered Public Accounting Firm for tax compliance in
connection with our subsidiaries and interests in the United States, as well as tax advice on actual or contemplated transactions.
“Other Fees” are fees charged by our Independent Registered Public Accounting Firm in connection with services rendered other than audit, audit-
related and tax services.
We have procedures for the review and pre-approval of any services performed by KPMG Cárdenas Dosal, S.C. The procedures require that all
proposed engagements of KPMG Cárdenas Dosal, S.C. for audit and non-audit services are submitted to the Board of Directors for approval, with the
favorable opinion of the Audit Committee prior to the beginning of any such services.
Audit Committee Pre-approval Policies and Procedures
Our audit committee is responsible, among other things, for the oversight of our external auditors. On the other hand, our Board of Directors, with the
support of our audit committee, is responsible, among other things, for the appointment and compensation of our external auditors. All services other than
the audit related services must receive a specific approval from our Board of Directors, with the favorable opinion of the audit committee. Our external
auditor, on a quarterly basis, provides a report to our audit committee in order for our audit committee to review the services that our external auditor is
providing, as well as the status and cost of those services.
During 2024, KPMG, with the prior approval by our Board of Directors and the favorable opinion of our Audit Committee, rendered additional
services in our favor and in favor of certain of our subsidiaries consisting of tax consulting, social security and local contributions related services, which
were for concepts other than the audit of our Financial Statements. KPMG billed us for such services an amount of Ps.3.6 million, which represents 3.3%
of the total amounts that KPMG billed us for on services rendered in 2024.
Exemptions from the Listing Standards for Audit Committees
Not applicable.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
The following table sets forth, for the periods indicated, information regarding purchases of any of our equity securities registered pursuant to
Section 12 of the Exchange Act made by us or on our behalf or by or on behalf of any affiliated purchaser (as that term is defined in Rule 10b-18(a)
(3) under the Exchange Act):
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136
Purchases of Equity Securities by the Company
Total Number of
Maximum Number (or
Total Number
CPOs Purchased
Appropriate Peso Value) of
of
as part of Publicly
CPOs that May Yet Be
CPOs
Average Price
Announced Plans
Purchased Under the Plans
Purchase Date
Purchased
Paid per CPO(1)
or Programs(2)
or Programs(2)
January 1 to January 31
— Ps.
—
— Ps.
9,644,040,855
February 1 to February 28
—
—
—
9,644,040,855
March 1 to March 31
—
—
—
9,644,040,855
April 1 to April 30
—
—
—
3,000,000,000
May 1 to May 31
—
—
—
3,000,000,000
June 1 to June 30
—
—
—
3,000,000,000
July 1 to July 31
—
—
—
3,000,000,000
August 1 to August 31
—
—
—
3,000,000,000
September 1 to September 30
—
—
—
3,000,000,000
October 1 to October 31
—
—
—
3,000,000,000
November 1 to November 30
—
—
—
3,000,000,000
December 1 to December 31
—
—
—
3,000,000,000
Total
— Ps.
—
—
(1)
The values have not been restated in constant Pesos and therefore represent nominal historical figures.
(2)
Our share repurchase program was announced in September 2002 and does not have an expiration date. On November 13, 2017, we announced our
intention to reactivate our share repurchase program. Accordingly, we may, from time to time, at management’s discretion, seek to acquire shares of the
Company’s capital stock subject to legal, market and other business conditions at the time of purchase. The total amount of our share repurchase
program was limited to Ps.3,000,000,000 during 2024 in accordance with the resolutions that our stockholders approved in the annual shareholders
meeting held on April 26, 2024.
Purchases of Equity Securities by Special Purpose Trust
Formed in Connection with Long-Term Retention Plan(1)
Maximum Number
Total Number of
(or
CPOs Purchased
Appropriate Peso
as
Value) of
part of Publicly
CPOs that May Yet
Announced Plans
Be Purchased Under
Total Number of
Average Price
or
the Plans or
Purchase Date
CPOs Purchased
Paid per CPO(2)
Programs
Programs(3)
January 1 to January 31
—
—
—
—
February 1 to February 28
2,700,000
10.1587
—
—
March 1 to March 31
8,912,701
9.9742
—
—
April 1 to April 30
750,000
10.1459
—
—
May 1 to May 31
3,052,641
10.9270
—
—
June 1 to June 30
14,400,000
10.1012
—
—
July 1 to July 31
4,000,000
8.4945
—
—
August 1 to August 31
4,641,348
7.8105
—
—
September 1 to September 30
—
—
—
—
October 1 to October 31
—
—
—
—
November 1 to November 30
—
—
—
—
December 1 to December 31
70,000
7.1357
—
—
Total
38,526,690 Ps.
9.6940
—
(1)
See “Directors, Senior Management and Employees — Stock Purchase Plan and Long-Term Retention Plan” for a description of the implementation,
limits and other terms of our Long-Term Retention Plan.
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137
(2)
Represents open-market purchases by the special purpose trust formed in connection with our Long-Term Retention Plan.
(3)
The values have not been restated in constant Pesos and therefore represent nominal historical figures.
Change in Registrant’s Certifying Accountant
Not applicable.
Corporate Governance
As a foreign private issuer with shares listed on the NYSE, we are subject to different corporate governance requirements than a U.S. company under
the NYSE listing standards. With certain exceptions, foreign private issuers are permitted to follow home country practice standards. Pursuant to
Rule 303.A11 of the NYSE listed company manual, we are required to provide a summary of the significant ways in which our corporate governance
practices differ from those required for U.S. companies under the NYSE listing standards.
We are a Mexican corporation with shares, in the form of CPOs listed on the Bolsa Mexicana de Valores, or Mexican Stock Exchange. Our corporate
governance practices are governed by our bylaws, the Mexican Securities Market Law, and the regulations issued by the CNBV and the Mexican Stock
Exchange. Although compliance is not mandatory, we also substantially comply with the Mexican Code of Principles and Best Corporate Governance
Practices (Código de Principios y Mejores Prácticas de Gobierno Corporativo), which was created in January 1999 by a group of Mexican business leaders
and was endorsed by the CNBV and last amended in 2018. See “Additional Information—Bylaws” for a more detailed description of our corporate
governance practices.
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138
The table below sets forth a description of the significant differences between corporate governance practices required for U.S. companies under the
NYSE listing standards and the Mexican corporate governance standards that govern our practices.
NYSE rules
Mexican rules
Listed companies must have a majority of independent directors.
The Mexican Securities Market Law requires that listed companies have at least 25% of
independent directors. Our stockholder’s meeting is required to assess the independence of the
directors. The definition of “independent” under the Mexican Securities Market Law differs in
some aspects from the one applicable to U.S. issuers under the NYSE standard and prohibits,
among other relationships, an independent director from being an employee or officer of the
company or a stockholder that may have influence over our officers, relevant clients and
contractors, as well as certain relationships between the independent director and family
members of the independent director. In addition, our bylaws broaden the definition of
independent director. Our bylaws provide for an executive committee of our board of
directors. The executive committee is currently composed of three members, and there are no
applicable Mexican rules that require any of the members to be independent. The executive
committee may generally exercise the powers of our board of directors, subject to certain
exceptions. Our Co-Chief Executive Officers are members of our board of directors and the
executive committee.
Listed companies must have a nominating/corporate governance committee composed entirely
of independent directors.
The Mexican Securities Law requires that listed companies must have a corporate practices
committee. The corporate practices committee of publicly traded corporations (sociedades
anónimas bursátiles) which are controlled by a person or group of persons that own 50% (fifty
percent) or more of the capital stock of a company, must be composed of a majority of
independent members. Otherwise, the Chairman and all the members must be independent.
Listed companies must have a compensation committee composed entirely of independent
directors.
The Mexican Code of Principles and Best Corporate Governance Practices recommends listed
companies to have a compensation committee. While these rules are not legally binding,
companies failing to comply with the Mexican Code of Principles and Best Corporate
Governance Practices’ recommendation must disclose publicly why their practices differ from
those recommended by the Mexican Code of Principles and Best Corporate Governance
Practices.
Listed companies must have an audit committee with a minimum of three members and must
be independent.
The Mexican Securities Market Law requires that listed companies must have an audit
committee. The Chairman and the members must be independent.
Non-management directors must meet at regularly scheduled executive sessions without
management.
Our non-management directors are not required to meet at executive sessions. The Mexican
Code of Principles and Best Corporate Governance Practices does not expressly recommend
executive sessions.
Listed companies must require shareholder approval for equity compensation plans, subject to
limited exemptions.
Companies listed on the Mexican Stock Exchange are required to obtain shareholder approval
for equity compensation plans, provided that such plans are subject to certain conditions.
Listed companies must adopt and disclose a code of business conduct and ethics for directors,
officers and employees, and promptly disclose any waivers of the code for directors or
executive officers.
Companies listed on the Mexican Stock Exchange are not required to adopt a code of ethics.
However, we have adopted a code of ethics which is available free of charge through our
offices or in the website provided in Item 16.B above. See “— Code of Ethics” for directions
on how to obtain a copy of our code of ethics. Waivers involving any of our executive officers
or directors will be made only by our Board of Directors or a designated committee of the
Board or as determined in our Code of Ethics.
Mine Safety Disclosure
Not applicable.
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
Not applicable.
Insider Trading Policies
We have adopted an insider trading policy (the “Insider Trading Policy”), which, among other things, governs the purchase or sale of our securities by
our directors, executive officers and employees. Our Insider Trading Policy aims to promote compliance with applicable insider trading laws, rules and
regulations. A copy of our Insider Trading Policy is filed as Exhibit 11.1 to this Annual Report.
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139
Cybersecurity
Risk management and strategy
Our cybersecurity program is designed to protect our network and information systems from cybersecurity threats and to ensure the confidentiality,
integrity, and availability of our systems and information. We place special weight on protecting sensitive information, such as the personal information of
our clients, subscribers, and employees, and our digital content and other confidential information and intellectual property that could be leveraged by a
malicious actor. This involves a comprehensive and ongoing effort to protect against, detect, and respond to cybersecurity threats and vulnerabilities.
We maintain a multidisciplinary enterprise risk management process overseen by our office of Corporate Risk Management (“CRM”), which provides
for the identification, evaluation, management, monitoring, and reporting of risks and opportunities within the Company, including cybersecurity risks. The
CRM, with oversight from the Audit Committee of the Company, reviews the effectiveness of this process on an annual basis. With respect to
cybersecurity, we employ a strategy, aligned with our business objectives and strategic risk management, based on the principles of the National Institute of
Standards and Technology Internal Report 8286, “Integrating Cybersecurity and Enterprise Risk Management,” to identify and address internal and
external risks.
Our cybersecurity program includes a number of components, such as the adoption of information security protocols, standards, guidelines, and
policies consistent with industry-standard practices; tools for threat detection, access controls, risk assessments related to cybersecurity and data privacy;
vulnerability testing; and internal audits of the Company’s information security protocols. Our cybersecurity program is currently certified as compliant
with International Organization for Standardization 27001 and the Payment Card Industry Data Security Standard.
We maintain a training and security awareness program for all employees of the Company. This program consists of deploying training courses,
information capsules, webinars, and anti-phishing tests to our employees. It also includes other elements, such as questionnaires, to evaluate the
effectiveness of the program, strengthen the permanence of security knowledge within the Company, and increase security awareness in our employees.
Our cybersecurity program includes the deployment of other preventive controls such as annual penetration tests and vulnerability assessments
performed by specialized technical internal personnel on our systems, applications, and critical infrastructure. We also maintain an internal team that hunts,
collects, monitors, and analyzes industry-specific, regional, and global cybersecurity threat intelligence for possible external threats to the Company.
The Company relies on external security advisors and other third-party information security professionals, who perform annual threat hunting exercises
on our infrastructure and critical systems to identify and remove any possible malicious artifacts and threats in our environments, manage a security
operations center, and manage and monitor our information security tools. The external security advisors also provide an independent periodic assessment
regarding the controls in our environments, which are aimed at strengthening and improving our security practices.
We also maintain an incident response framework for the identification, evaluation, and management of cybersecurity incidents. This framework
provides information on how personnel should prepare, detect, analyze, contain, eradicate, and recover from a security incident, including the monitoring of
remediation efforts. It also contains an internal, risk-based escalation framework designed to ensure that all relevant individuals are promptly informed of
any cybersecurity incident and dictates procedures for determining whether a cybersecurity incident is material, without unreasonable delay.
In the ordinary course of our business, we rely on third-party service providers (“TPSPs”) to collect, process and store certain personal information and
other data related to us, our clients and subscribers, and our digital content. We assess the cybersecurity practices of our TPSPs prior to onboarding through
a variety of measures, including a due diligence process designed to assess and manage the potential cybersecurity risks posed by such TPSPs to the
Company. This process involves the evaluation of security questionnaires and the performance of a business impact analysis, review of General
Information Technology Controls reports, and periodic, risk-based monitoring and security reviews of TPSPs following onboarding. Despite these
measures, we are reliant on the security practices of our TPSPs, which may be outside of our direct control.
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140
While we experience minor data and cybersecurity incidents from time to time, as of the date of this report and for the time period of January 1, 2024,
through December 31, 2024, the Company has no evidence of any risks from cybersecurity threats that have materially affected or are reasonably likely to
materially affect the Company, including its business strategy, results of operations, or financial condition. However, there can be no guarantee that we will
not be materially affected by such risks in the future. For information on the cybersecurity threats and risks we face and the potential impacts on the
business related thereto, see Item 3.D. Risk Factors – Any Incidents Affecting Our Network and Information Systems or Other Technologies Could Have an
Adverse Impact on Our Business, Reputation and Results of Operations.
Governance
Our cybersecurity program is led by our Chief Information Security Officer (“CISO”), with oversight from our Co-CEOs and CFO. Cybersecurity
strategy is also reviewed and approved by the CEO of our subsidiaries, Sky and izzi. Our CISO, together with our Co-CEOs and CFO, are responsible for
the coordination of our cybersecurity initiatives and the oversight of cybersecurity risk management across the Company. Our CISO has worked in
executive positions related to cybersecurity in multinational financial companies and the telecommunications industry for more than 25 years. The CISO is
primarily responsible for designing the strategy and ensuring the execution of the cybersecurity program. The CISO manages a cybersecurity team that hold
international certifications related to cybersecurity, and manages the processes for identifying regional, global, and industry-related threats described above.
See Risk management and strategy.
The CISO periodically provides reports on cybersecurity threats, reports of incidents (if any), projects, and risk management to the executive
committees at the subsidiary level, as well as the Company’s enterprise-wide Corporate Committee on Information Technology and Security, which
consists of Company senior personnel across the Company in the cybersecurity, information technology, risk management, and legal departments (the
“Corporate Committee”). The Corporate Committee and Sky and izzi Executive Committees focus on decision making and monitoring compliance with the
cybersecurity program. The Corporate Committee also aligns technology and information security strategies across the subsidiaries.
Our Board of Directors takes an active role in overseeing the management of cybersecurity risks to the Company. Primary responsibility for
cybersecurity oversight has been delegated to the Audit Committee. The Audit Committee receives regular updates from members of the Corporate
Committee on cybersecurity matters, including information related to incidents (if any) that occurred during the reporting period, trending topics, and
compliance with internal processes. The Audit Committee provides quarterly reports on cybersecurity issues to the Board.
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141
Part III
Item 17.Financial Statements
We have responded to Item 18 in lieu of Item 17.
Item 18.Financial Statements
See pages F-1 through F-87, which are incorporated in this Item 18 by reference.
Item 19.Exhibits
Documents filed as exhibits to this annual report appear on the following
(a) Exhibits.
EXHIBIT INDEX
Exhibit
Number
Description of Exhibit
1.1
English translation of Amended and Restated Bylaws (Estatutos Sociales) of the Registrant, dated as of April 26, 2023 (previously filed with the Securities and Exchange
Commission as Exhibit 1.1 to the Registrant’s Annual Report on Form 20-F for the year ended December 31, 2022 and incorporated herein by reference).
2.1
Indenture relating to Senior Debt Securities, dated as of August 8, 2000, between the Registrant, as Issuer, and The Bank of New York, as Trustee (previously filed with the
Securities and Exchange Commission as Exhibit 4.1 to the Registrant’s Registration Statement on Form F-4 (File number 333-12738), as amended, and incorporated herein by
reference).
2.2
Fourth Supplemental Indenture relating to the 8.5% Senior Exchange Notes due 2032 between the Registrant, as Issuer, and The Bank of New York and Dexia Banque
Internationale à Luxembourg (previously filed with the Securities Exchange Commission as Exhibit 4.5 to the Registrant’s Registration Statement on Form F-4 (the “2002
Form F-4”) and incorporated herein by reference).
2.3
Sixth Supplemental Indenture relating to the 8.5% Senior Notes due 2032 between Registrant, as Issuer, and The Bank of New York and Dexia Banque Internationale à
Luxembourg (previously filed with the Securities and Exchange Commission as Exhibit 4.7 to the 2002 Form F-4 and incorporated herein by reference).
2.4
Tenth Supplemental Indenture related to the 8.49% Senior Notes due 2037 between Registrant, as Issuer, The Bank of New York and The Bank of New York (Luxembourg) S.A.,
dated as of May 9, 2007 (previously filed with the Securities and Exchange Commission as Exhibit 2.9 to the Registrant’s Annual Report on Form 20-F for the year ended
December 31, 2006, and incorporated herein by reference).
2.5
Eleventh Supplemental Indenture relating to the 8.49% Senior Exchange Notes due 2037 between Registrant, as Issuer, The Bank of New York and The Bank of New York
(Luxembourg) S.A., dated as August 24, 2007 (previously filed with the Securities and Exchange Commission as Exhibit 4.12 to the Registrant’s Registration Statement on
Form F-4 (File number 333-144460), as amended, and incorporated herein by reference).
2.6
Form of Deposit Agreement between the Registrant, The Bank of New York, as depositary and all holders and beneficial owners of the Global Depositary Shares, evidenced by
Global Depositary Receipts (previously filed with the Securities and Exchange Commission as an Exhibit to the Registrant’s Registration Statement on Form F-6 (File number
333-146130) and incorporated herein by reference).
2.7
Fourteenth Supplemental Indenture relating to the 6.625% Senior Notes due 2040 between Registrant, as Issuer, The Bank of New York Mellon and The Bank of New York
Mellon (Luxembourg) S.A., dated as of November 30, 2009 (previously filed with the Securities and Exchange Commission as Exhibit 4.15 to the Registrant’s Registration
Statement on Form F-4 (File number 333-164595), as amended, and incorporated herein by reference).
2.8
Fifteenth Supplemental Indenture relating to the 6.625% Senior Exchange Notes due 2040 between Registrant, as Issuer, The Bank of New York Mellon and The Bank of New
York Mellon (Luxembourg) S.A., dated as of March 22, 2010 (previously filed with the Securities and Exchange Commission as Exhibit 2.15 to the Registrant’s Annual Report
on Form 20-F for the year ended December 31, 2009 and incorporated herein by reference).
2.9
Sixteenth Supplemental Indenture relating to the 7.25% Peso Denominated Senior Notes due 2043 among the Registrant, as Issuer, The Bank of New York Mellon, as Trustee,
Registrar, Paying Agent and Transfer Agent, the Bank of New York Mellon, London Branch, as London Paying Agent and the Bank of New York Mellon (Luxembourg) S.A., as
Luxembourg Paying Agent and Transfer Agent, dated as of May 14, 2013 (previously filed with the Securities and Exchange Commission as Exhibit 4.1 to the Registrant’s
Form 6-K filed on May 14, 2013 and incorporated herein by reference).
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142
Exhibit
Number
Description of Exhibit
2.10
Seventeenth Supplemental Indenture relating to the 5.000% Senior Notes due 2045 among the Registrant, as Issuer, The Bank of New York Mellon, as Trustee, Registrar, Paying
Agent and Transfer Agent and The Bank of New York Mellon (Luxembourg) S.A., as Luxembourg Paying Agent and Transfer Agent, dated as of May 13, 2014 (previously filed
with the Securities and Exchange Commission as Exhibit 4.1 to the Registrant’s Form 6-K filed on May 13, 2014 and incorporated herein by reference).
2.11
Eighteenth Supplemental Indenture relating to the 4.625% Senior Notes due 2026 among the Registrant, as Issuer, The Bank of New York Mellon, as Trustee, Registrar, Paying
Agent and Transfer Agent and The Bank of New York Mellon (Luxembourg) S.A., as Luxembourg Paying Agent and Transfer Agent, dated as of November 24, 2015 (previously
filed with the Securities and Exchange Commission as Exhibit 4.1 to the Registrant’s Form 6-K filed on November 24, 2015 and incorporated herein by reference).
2.12
Nineteenth Supplemental Indenture relating to the 6.125% Senior Notes due 2046 among the Registrant, as Issuer, The Bank of New York Mellon, as Trustee, Registrar, Paying
Agent and Transfer Agent and The Bank of New York Mellon (Luxembourg) S.A., as Luxembourg Paying Agent and Transfer Agent, dated as of November 24, 2015 (previously
filed with the Securities and Exchange Commission as Exhibit 4.2 to the Registrant’s Form 6-K filed on November 24, 2015 and incorporated herein by reference).
2.13
Twentieth Supplemental Indenture relating to the 5.250% Senior Notes due 2049 among the Registrant, as Issuer, The Bank of New York Mellon, as Trustee, Registrar, Paying
Agent and Transfer Agent and The Bank of New York Mellon SA/NV, Luxembourg Branch, as Luxembourg Paying Agent and Transfer Agent , dated as of May 24, 2019
(previously filed with the Securities and Exchange Commission as Exhibit 4.1 to the Registrant’s Form 6-K filed on May 24, 2019 and incorporated herein by reference).
2.14
Description of the rights of each class of securities registered under Section 12 of the Exchange Act.
4.1
Form of Indemnity Agreement between the Registrant and its directors and executive officers (previously filed with the Securities and Exchange Commission as Exhibit 10.1 to
the Registrant’s Registration Statement on Form F-4 (File number 33-69636), as amended, and incorporated herein by reference).
4.2
Amended and Restated Collateral Trust Agreement, dated as of June 13, 1997, as amended, among PanAmSat Corporation, Hughes Communications, Inc., Satellite Company,
LLC, the Registrant and IBJ Schroder Bank and Trust Company (previously filed with the Securities and Exchange Commission as an Exhibit to the Registrant’s Annual Report
on Form 20-F for the year ended December 31, 2001 and incorporated herein by reference).
4.3
Amended and Restated Bylaws (Estatutos Sociales) of Innova, S. de R.L. de C.V. (“Innova”) dated as of December 22, 1998 (previously filed with the Securities and Exchange
Commission as an Exhibit to Innova’s Annual Report on Form 20-F for the year ended December 31, 2004 and incorporated herein by reference).
4.4
Full-Time Transponder Service Agreement, dated as of November, 2007, by and among Intelsat Corporation, Intelsat LLC, Corporación de Radio y Televisión del Norte de
México, S. de R. L. de C.V. and SKY Brasil Serviços Ltda (previously filed with the Securities and Exchange Commission as Exhibit 4.16 to the Registrant’s Annual Report on
Form 20-F for the year ended December 31, 2007 and incorporated herein by reference).
4.5*
Second Amended and Restated Stockholders Agreement, dated as of January 31, 2022, by and among TelevisaUnivision, Inc., Univision Holdings, Inc., Broadcast Media
Partners Holdings, Inc., Univision Communications Inc. and certain stockholders of TelevisaUnivision, Inc. (previously filed with the Securities and Exchange Commission as
Exhibit 4.11 to the Registrant’s Annual Report on Form 20-F for the year ended December 31, 2021 and incorporated herein by reference).
4.6
Transaction Agreement, dated as of April 13, 2021, by and among Grupo Televisa, S.A.B., Univision Holdings, Inc., and, for the limited purposes set forth therein, Searchlight III
UTD GP, LLC, ForgeLight Univision Holdings LLC and Liberty Global Ventures Limited (previously filed with the Securities and Exchange Commission as Exhibit 4.18 to the
Registrant’s Annual Report on Form 20-F for the year ended December 31, 2020 and incorporated herein by reference).
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143
Exhibit
Number
Description of Exhibit
4.7
English summary of Amendment and Restatement of the Indenture, dated April 7, 2011, relating to the issuance of the Series 1 and Series 2 Debentures by GSF Telecom
Holdings, Sociedad Anónima Promotora de Inversión de Capital Variable with the consent of Deutsche Bank México, Sociedad Anónima, Institución de Banca Múltiple,
División Fiduciaria and Assignment Agreement with respect to the Series 1 and Series 2 Debentures, dated April 7, 2011, by and among Mexico Media Investments S.L.,
Sociedad Unipersonal, as assignor and Corporativo Vasco de Quiroga, S.A. de C.V., as assignee, with the consent of GSF Telecom Holdings, S.A.P.I. de C.V. and Deutsche
Bank México, S.A., Institución de Banca Múltiple, División Fiduciaria (previously filed with the Securities and Exchange Commission as Exhibit 4.34 to the Registrant’s
Annual Report on Form 20-F for the year ended December 31, 2010 and incorporated herein by reference).
4.8
English summary of indenture, dated July 31, 2013, related to the issuance of Ps.7,000 million convertible debentures, by Tenedora Ares, S.A.P.I de C.V., together with Banco
Invex, Sociedad Anónima, Institución de Banca Múltiple, Invex Grupo Financiero, Fiduciario, in its capacity as common representative for the holders of the debentures
(previously filed with the Securities and Exchange Commission as Exhibit 4.31 to the Registrant’s Annual Report on Form 20-F for the year ended December 31, 2013 and
incorporated herein by reference).
4.9
English summary of call and put option agreement, dated July 31, 2013, by and among Tenedora Ares, S.A.P.I. de C.V., Thomas Stanley Heather Rodríguez, Vamole
Inversiones 2013, S.L. Sociedad Unipersonal and Arretis, S.A.P.I. de C.V. (previously filed with the Securities and Exchange Commission as Exhibit 4.32 to the Registrant’s
Annual Report on Form 20-F for the year ended December 31, 2013 and incorporated herein by reference).
4.10
English summary of conversion of debentures, dated August 13, 2014, by and between Arretis, S.A.P.I. de C.V and Tenedora Ares, S.A.P.I. de C.V. (previously filed with the
Securities and Exchange Commission as Exhibit 4.33 to the Registrant’s Annual Report on Form 20-F for the year ended December 31, 2014 and incorporated herein by
reference).
4.11
English summary of share purchase agreement, dated August 13, 2014, by and among Vamole Inversiones 2013, S.L., Sociedad Unipersonal, Thomas Stanley Heather
Rodriguez, Arretis, S.A.P.I. de C.V. and San Ángel Telecom, S.A. de C.V. (previously filed with the Securities and Exchange Commission as Exhibit 4.34 to the Registrant’s
Annual Report on Form 20-F for the year ended December 31, 2014 and incorporated herein by reference).
4.12
English summary of share purchase agreement, dated August 13, 2014, by and among Dafel Investments B.V., Mexico Media Investments, S.L., Sociedad Unipersonal, Cable
TV Investments, S.L., Sociedad Unipersonal, Tenedora Ares, S.A.P.I. de C.V. and San Ángel Telecom, S.A. de C.V. (previously filed with the Securities and Exchange
Commission as Exhibit 4.35 to the Registrant’s Annual Report on Form 20-F for the year ended December 31, 2014 and incorporated herein by reference).
4.13
English summary of share purchase agreement, dated July 9, 2014, by and among Invex Grupo Financiero, as trustee of Trust F/1017 and Grupo Salinas Telecom, S.A. de
C.V., with the acknowledgement of GSF Telecom Holdings, S.A.P.I. de C.V. and Corporativo Vasco de Quiroga, S.A. de C.V. (previously filed with the Securities and
Exchange Commission as Exhibit 4.36 to the Registrant’s Annual Report on Form 20-F for the year ended December 31, 2014 and incorporated herein by reference).
4.14
English summary of merger agreement, dated January 8, 2015, by and among Consorcio Nekeas, S.A. de C.V., Galavisión DTH, S. de R.L. de C.V. and Inmobiliaria Hevi,
S.A. de C.V. (previously filed with the Securities and Exchange Commission as Exhibit 4.37 to the Registrant’s Annual Report on Form 20-F for the year ended December 31,
2014 and incorporated herein by reference).
4.15
English summary of stock purchase agreement, dated January 8, 2015, by and among Mara del Carmen Ordóñez Valverde, Axel Eduardo Vielma Ordóñez, Héctor Vielma
Ordóñez, José Francisco Vielma Ordóñez, Luis Edmundo Vielma Ordóñez and Corporativo Vasco de Quiroga, S.A. de C.V. (previously filed with the Securities and Exchange
Commission as Exhibit 4.38 to the Registrant’s Annual Report on Form 20-F for the year ended December 31, 2014 and incorporated herein by reference).
4.16
English summary of merger agreement, dated March 4, 2016, by and among Corporativo Vasco de Quiroga, S.A. de C.V. and Grupo TVI Telecom, S.A. de C.V. (previously
filed with the Securities and Exchange Commission as Exhibit 4.41 to the Registrant’s Annual Report on Form 20-F for the year ended December 31, 2015 and incorporated
herein by reference).
4.17
Credit Agreement, dated as of April 9, 2024, among Grupo Televisa, S.A.B., Cablemás Telecomunicaciones, S.A. de C.V., and Televisión Internacional, S.A. de C.V. as
Borrowers, the several lenders and other financial institutions from time to time parties thereto, BBVA México, S.A. Institución de Banca Múltiple, Grupo Financiero BBVA
México as Administrative Agent, BBVA México, S.A. Institución de Banca Múltiple, Grupo Financiero BBVA México, Banco Santander México, S.A., Institución de Banca
Múltiple, Grupo Financiero Santander México, and Scotiabank Inverlat, S.A., Institución de Banca Múltiple, Grupo Financiero Scotiabank Inverlat as Joint Lead Arrangers
and Joint Bookrunners.
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144
Exhibit
Number
Description of Exhibit
8.1
List of Subsidiaries of Registrant.
11.1
English Translation of Grupo Televisa, S.A.B. Insider Trading Policy.
12.1
Co-CEO Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, dated April 30, 2025.
12.2
Co-CEO Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, dated April 30, 2025.
12.3
Principal Financial Officer Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, dated April 30, 2025.
13.1
Co-CEO Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, dated April 30, 2025.
13.2
Co-CEO Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, dated April 30, 2025.
13.3
Principal Financial Officer Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, dated April 30, 2025.
23.1
Consent of KPMG Cárdenas Dosal, S.C.
23.2
Consent of Ernst & Young LLP, independent auditors of TelevisaUnivision, Inc.
23.3
Consent of KPMG LLP, independent auditors of TelevisaUnivision, Inc.
97.1
Grupo Televisa, S.A.B. Compensation Recovery Policy (previously filed with the Securities and Exchange Commission as Exhibit 97.1 to the Registrant’s Annual Report on
Form 20-F for the year ended December 31, 2023 and incorporated herein by reference).
99.1**
Audited Financial Statements of TelevisaUnivision, Inc. as of and for the three years ended December 31, 2024.
101
The following materials from the Company’s Annual Report on Form 20-F for the fiscal year ended December 31, 2024, formatted in eXtensible Business Reporting
Language (XBRL): (i) Consolidated Statements of Financial Position as of December 31, 2024 and 2023; (ii) Consolidated Statements of Income for the Years Ended
December 31, 2024, 2023 and 2022; (iii) Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2024, 2023 and 2022; (iv) Consolidated
Statements of Changes in Equity for the Years ended December 31, 2024, 2023 and 2022; (v) Consolidated Statements of Cash Flows for the Years Ended December 31,
2024, 2023 and 2022; and (vi) Notes to Consolidated Financial Statements for the Years Ended December 31, 2024, 2023 and 2022.
104
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
*
Portions of this exhibit have been omitted in accordance with Instruction 4 to Item 19 of Form 20-F.
**
The financial statements as of and for the three years ended December 31, 2024 of TelevisaUnivision, Inc., prepared by TelevisaUnivision, Inc. and
audited by its independent auditors, KPMG LLP for the year ended December 31, 2024, and Ernst & Young LLP for the two years ended December
31, 2023 and 2022, are included in this Annual Report pursuant to Rule 3-09 of Regulation S-X.
Instruments defining the rights of holders of certain issues of long-term debt of the Registrant and its consolidated subsidiaries have not been filed as
exhibits to this Form 20-F because the authorized principal amount of any one of such issues does not exceed 10% of the total assets of the Registrant and
its subsidiaries on a consolidated basis. The Registrant agrees to furnish a copy of each such instrument to the SEC upon request.
(b) Financial Statement Schedules
All financial statement schedules relating to the Registrant are omitted because they are not required or because the required information, if material, is
contained in the audited year-end financial statements or notes thereto.
Table of Contents
145
SIGNATURE
The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned
to sign this annual report on its behalf.
GRUPO TELEVISA, S.A.B.
By:
/s/ Carlos Phillips Margain
Name: Carlos Phillips Margain
Title:
Chief Financial Officer
Date: April 30, 2025
Table of Contents
F-1
GRUPO TELEVISA, S. A. B. AND SUBSIDIARIES
INDEX TO AUDITED CONSOLIDATED FINANCIAL STATEMENTS AS OF
DECEMBER 31, 2024 AND 2023
Page
Reports of Independent Registered Public Accounting Firm (KPMG Cardenas Dosal, S.C., Mexico, Audit Firm ID: 1141)
F-2
Consolidated Statements of Financial Position as of December 31, 2024 and 2023
F-5
Consolidated Statements of Income or Loss for the Years Ended December 31, 2024, 2023 and 2022
F-7
Consolidated Statements of Comprehensive Income or Loss for the Years Ended December 31, 2024, 2023 and 2022
F-8
Consolidated Statements of Changes in Equity for the Years Ended December 31, 2024, 2023 and 2022
F-9
Consolidated Statements of Cash Flows for the Years Ended December 31, 2024, 2023 and 2022
F-10
Notes to Consolidated Financial Statements for the Years Ended December 31, 2024, 2023 and 2022
F-11
Table of Contents
F-2
Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors
Grupo Televisa, S. A. B.:
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated statements of financial position of Grupo Televisa, S.A.B. and subsidiaries (the “Group”) as of December
31, 2024 and 2023, the related consolidated statements of income or loss, comprehensive income or loss, changes in equity, and cash flows for each of the
years in the three-year period ended December 31, 2024, and the related notes (collectively, the consolidated financial statements). In our opinion, the
consolidated financial statements present fairly, in all material respects, the financial position of the Group as of December 31, 2024 and 2023, and the
results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2024, in conformity with International
Financial Reporting Standards as issued by the International Accounting Standards Board (IFRS Accounting Standards).
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Group’s internal
control over financial reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the
Committee of Sponsoring Organizations of the Treadway Commission, and our report dated April 30, 2025 expressed an unqualified opinion on the
effectiveness of the Group’s internal control over financial reporting.
Basis for Opinion
These consolidated financial statements are the responsibility of the Group’s management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the
Group in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the
PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included
performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing
procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the
consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as
well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were
communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated
financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not
alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below,
providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Impairment assessment of intangible assets and goodwill with indefinite useful life
As described in Notes 2(l) and 2(m) to the consolidated financial statements, impairment reviews of intangible assets with indefinite useful life and
goodwill are undertaken annually or more frequently if events or changes in circumstances indicate a potential impairment. The carrying amount related to
the Cable and Sky cash-generating units (CGUs) includes the goodwill and intangible assets with indefinite useful life balance and is compared to the
recoverable amount, which is the higher of the value in use (VIU) and the fair value less costs to sell (FVLCS). Any impairment loss for goodwill is
recognized as an expense in the consolidated statement of income or loss and is not subject to be reversed in subsequent periods. Any impairment loss shall
be allocated to reduce the carrying amount of any goodwill and intangible assets with indefinite useful-life of the cash-generating unit; and then, to the
other long-lived assets of the CGUs. As described in Notes 13, the goodwill and intangible assets with indefinite-useful life balance as of December 31,
2024 was Ps.28,557,851 thousand of which Ps.28,447,537 thousand relates to the Cable and Sky CGUs. As described in Note 13 and 22 in 2024, the Group
recorded an impairment of Ps.450,000 thousand of goodwill in the Cable segment and Ps. 2,614,319 thousand in connection with intangible assets with
indefinite useful lives and other long-lived assets in the Sky segment.
Table of Contents
F-3
We identified the evaluation of the impairment assessment of goodwill and intangible assets with indefinite useful life of the Cable and Sky CGUs as a
critical audit matter. Subjective auditor judgment was required in the evaluation of the key assumptions used to determine the recoverable amounts, which
included the forecasted revenue growth rates, the long-term growth rates, and the discount rates. Minor changes to these key assumptions could have had a
significant effect on the VIU of the CGUs. In addition, specialized skills and knowledge were required to assess the long-term growth rates and the
discount rates used to determine the VIU of the CGUs.
The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness
of certain internal controls related to the Group’s impairment assessment process. This included controls related to the development of the key assumptions
for the Cable and Sky CGUs. We assessed the forecasted revenue growth rates by evaluating management’s process to develop the forecasted revenue
growth rates and comparing the forecasted revenue growth rates to historical growth rates including current year actual results and industry data, using
publicly available data. We involved valuation professionals with specialized skills and knowledge, who assisted in:
●
evaluating the Group’s long-term growth rate by comparing to economic growth expectations using publicly available third-party data
●
evaluating the reasonableness of the discount rates by comparing the inputs used by management to develop the discount rates to publicly
available data for comparable entities
●
performing sensitivity analyses of the VIU of the CGUs using the Company’s cash flow forecasts and an independently developed discount rate
and comparing the results of our estimates to the Company’s estimates of VIU
●
recalculating the Group’s VIU model.
Realizability of capital tax loss carryforward
As discussed in Note 24 to the consolidated financial statements, as of December 31, 2024, deferred income tax assets related to capital tax loss
carryforwards amounted to Ps.3,642,421 thousand, which includes the benefit from tax loss carryforwards derived from the disposal in 2014 of the Group’s
investment in GSF, in the amount of Ps.2,925,086 thousand. As described in Note 2(v), deferred income tax assets are recognized only to the extent that it
is probable that future taxable profit will be available against which the temporary differences and tax loss carryforwards can be utilized. For this purpose,
the Group takes into consideration all available positive and negative evidence, including factors such as market conditions, industry analysis, projected
taxable income, carryforward periods, current tax structure, potential changes or adjustments in tax structure, and future reversals of existing temporary
differences.
We identified the evaluation of the sufficiency of audit evidence over the realizability of the capital tax loss carryforward as a critical audit matter.
Evaluating the sufficiency of audit evidence related to the realizability of the capital tax loss carryforward required subjective auditor judgment and
specialized skills and knowledge in order to assess the feasibility and appropriateness of the tax strategy plan for recovering the capital tax loss
carryforwards.
The following are the primary procedures we performed to address this critical audit matter. We applied auditor judgment to determine the nature and
extent of procedures to be performed. We evaluated the design and tested the operating effectiveness of an internal control related to the realizability of the
capital tax loss carryforward. We involved tax professionals with specialized skills and knowledge, who assisted in evaluating the Group’s deferred income
tax recoverability strategy by reviewing and assessing the appropriateness and feasibility of the tax strategy plan to be executed by management to recover
the capital tax loss carryforward. We evaluated the sufficiency of audit evidence obtained by assessing the results of the procedures performed, including
the appropriateness of the nature and extent of such evidence.
/s/ KPMG Cardenas Dosal S.C.
We have served as the Group’s auditor since 2018.
Mexico City, Mexico
April 30, 2025
Table of Contents
F-4
Report of Independent Registered Public Accounting Firm
To the Stockholders and Board of Directors
Grupo Televisa, S.A.B.:
Opinion on Internal Control Over Financial Reporting
We have audited Grupo Televisa S.A.B. and subsidiaries’ (the Group) internal control over financial reporting as of December 31, 2024, based on criteria
established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our
opinion, the Group maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria
established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated
statements of financial position of the Group as of December 31, 2024 and 2023, the related consolidated statements of income or loss, comprehensive
income or loss, changes in equity, and cash flows for each of the years in the three-year period ended December 31, 2024, and the related notes
(collectively, the consolidated financial statements), and our report dated April 30, 2025, expressed an unqualified opinion on those consolidated financial
statements.
Basis for Opinion
The Group’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of
internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting. Our
responsibility is to express an opinion on the Group’s internal control over financial reporting based on our audit. We are a public accounting firm
registered with the PCAOB and are required to be independent with respect to the Group in accordance with the U.S. federal securities laws and the
applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over
financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and
testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other
procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control
over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are
being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial
statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of
compliance with the policies or procedures may deteriorate.
/s/ KPMG Cardenas Dosal, S.C.
Mexico City, Mexico
April 30, 2025
Table of Contents
F-5
Consolidated Statements of Financial Position
As of December 31, 2024 and 2023
(In thousands of Mexican pesos)
(Notes 1, 2 and 3)
Notes
2024
2023
ASSETS
Current assets:
Cash and cash equivalents
6
Ps.
46,193,173
Ps.
32,586,352
Trade accounts receivable, net
7
6,175,819
8,131,458
Other accounts receivable, net
125,486
339,560
Income taxes receivable
6,374,140
6,380,909
Other recoverable taxes
3,207,830
6,304,198
Derivative financial instruments
15
1,297,000
251,738
Due from related parties
20
339,553
1,450,238
Transmission rights
8
950,751
1,725,630
Inventories
463,225
1,261,304
Contract costs
2(s)
1,483,022
2,011,512
Other current assets
1,657,507
1,661,644
Total current assets
68,267,506
62,104,543
Non-current assets:
Trade accounts receivable, net of current portion
7
484,506
428,701
Due from related party
20
3,293,463
4,630,459
Derivative financial instruments
15
704,051
—
Transmission rights
8
74,234
641,154
Investments in financial instruments
9
2,494,711
2,586,601
Investments in associates and joint ventures
10
44,436,697
43,427,638
Property, plant and equipment, net
11
63,664,261
77,848,576
Investment property, net
11
2,706,528
2,790,173
Right-of-use assets, net
12
3,336,917
6,085,861
Intangible assets, net and goodwill
13
38,927,089
40,389,842
Deferred income tax assets
24
20,630,753
18,203,133
Contract costs
2(s)
2,488,120
3,318,674
Other non - current assets
149,060
214,902
Total non-current assets
183,390,390
200,565,714
Total assets
Ps.
251,657,896 Ps.
262,670,257
The accompanying notes are an integral part of these consolidated financial statements.
Table of Contents
F-6
Notes
2024
2023
LIABILITIES
Current liabilities:
Current portion of long-term debt
14
Ps.
4,556,950
Ps.
9,987,932
Interest payable
14
1,674,544
1,506,766
Current portion of lease liabilities
14
1,242,957
1,280,932
Trade accounts payable and accrued expenses
11,329,869
12,861,122
Customer advances
1,130,479
1,391,553
Income taxes payable
24
1,320,644
774,433
Other taxes payable
2,610,072
2,948,135
Employee benefits
1,258,587
1,563,942
Due to related parties
20
202,414
579,023
Current portion of deferred revenue
20
287,667
287,667
Other current liabilities
1,688,913
1,709,357
Total current liabilities
27,303,096
34,890,862
Non-current liabilities:
Long-term debt, net of current portion
14
98,398,223
78,547,927
Lease liabilities, net of current portion
14
4,143,682
6,010,618
Deferred revenue, net of current portion
20
4,602,679
4,890,347
Deferred income tax liabilities
24
1,251,440
1,053,543
Post-employment benefits
16
772,482
733,049
Other non-current liabilities
3,490,669
1,871,478
Total non-current liabilities
112,659,175
93,106,962
Total liabilities
139,962,271
127,997,824
EQUITY
Capital stock
17
3,933,549
4,722,776
Additional paid-in capital
13,359,470
15,889,819
Retained earnings
18
112,041,102
120,400,302
Accumulated other comprehensive loss, net
18
(12,882,775)
(9,866,793)
Shares repurchased
17
(13,997,290)
(11,865,735)
Equity attributable to stockholders of the Company
102,454,056
119,280,369
Non-controlling interests
19
9,241,569
15,392,064
Total equity
111,695,625
134,672,433
Total liabilities and equity
Ps.
251,657,896
Ps.
262,670,257
The accompanying notes are an integral part of these consolidated financial statements.
Table of Contents
F-7
Consolidated Statements of Income or Loss
For the years ended December 31, 2024, 2023 and 2022
(In thousands of Mexican pesos, except per CPO amounts)
(Notes 1, 2 and 3)
Notes
2024
2023
2022
Revenues
26
Ps.
62,260,864
Ps.
66,222,836
Ps.
68,615,768
Cost of revenues
21
(41,117,033)
(43,297,440)
(43,357,747)
Selling expenses
21
(8,815,211)
(8,848,181)
(9,155,448)
Administrative expenses
21
(10,592,581)
(11,305,619)
(11,341,657)
Income before other expense
26
1,736,039
2,771,596
4,760,916
Other expense, net
22
(4,554,900)
(913,801)
(1,023,169)
Operating (loss) income
(2,818,861)
1,857,795
3,737,747
Finance expense
23
(8,812,754)
(8,026,093)
(11,385,381)
Finance income
23
4,117,583
3,180,192
2,129,011
Finance expense, net
(4,695,171)
(4,845,901)
(9,256,370)
Share of loss of associates and joint ventures, net
10
(182,577)
(4,086,628)
(7,378,249)
Loss before income taxes
(7,696,609)
(7,074,734)
(12,896,872)
Income tax (expense) benefit
24
(688,587)
(2,360,634)
1,352,889
Net loss from continuing operations
(8,385,196)
(9,435,368)
(11,543,983)
Income from discontinued operations, net
28
56,816
628,116
56,827,807
Net (loss) income
Ps.
(8,328,380)
Ps.
(8,807,252)
Ps.
45,283,824
Net (loss) income attributable to:
Stockholders of the Company
Ps.
(8,265,520)
Ps.
(8,422,730)
Ps.
44,712,180
Non-controlling interests
19
(62,860)
(384,522)
571,644
Net (loss) income
Ps.
(8,328,380)
Ps.
(8,807,252)
Ps.
45,283,824
Basic (loss) earnings per CPO attributable to stockholders of the Company:
Continuing operations
Ps.
(3.06)
Ps.
(3.24)
Ps.
(4.28)
Discontinued operations
25
0.02
0.23
20.08
Total
Ps.
(3.04)
Ps.
(3.01)
Ps.
15.80
Diluted (loss) earnings per CPO attributable to stockholders of the Company:
Continuing operations
Ps.
(3.06)
Ps.
(3.24)
Ps.
(4.28)
Discontinued operations
25
0.02
0.23
20.08
Total
Ps.
(3.04)
Ps.
(3.01)
Ps.
15.80
The accompanying notes are an integral part of these consolidated financial statements.
Table of Contents
F-8
Consolidated Statements of Comprehensive Income or Loss
For the years ended December 31, 2024, 2023 and 2022
(In thousands of Mexican pesos)
(Notes 1, 2 and 3)
Notes
2024
2023
2022
Net (loss) income
Ps.
(8,328,380)
Ps.
(8,807,252)
Ps.
45,283,824
Other comprehensive income (loss):
Items that will not be reclassified to income or loss:
Remeasurement of post-employment benefit obligations
16
(62,779)
83,935
158,119
Open-Ended Fund, net of hedge
9
(66,098)
(741)
(131,957)
Publicly traded equity instruments
9
(202,208)
(698,903)
(906,658)
Items that may be subsequently reclassified to income or loss:
Exchange differences on translating foreign operations
285,502
(758,835)
(143,156)
Cash flow hedges
1,857,456
(287,536)
395,807
Share of other comprehensive (loss) income of associates and joint ventures
10
(7,061,676)
4,278,531
4,245,546
Other comprehensive (loss) income before income taxes
(5,249,803)
2,616,451
3,617,701
Income tax benefit (expense)
24
2,226,054
(1,704,735)
(833,121)
Other comprehensive (loss) income, net of income taxes
(3,023,749)
911,716
2,784,580
Total Comprehensive (loss) income
Ps.
(11,352,129)
Ps.
(7,895,536)
Ps.
48,068,404
Total Comprehensive (loss) income attributable to:
Stockholders of the Company
Ps.
(11,281,502)
Ps.
(7,465,645)
Ps.
47,510,294
Non-controlling interests
19
(70,627)
(429,891)
558,110
Total Comprehensive (loss) income
Ps.
(11,352,129)
Ps.
(7,895,536)
Ps.
48,068,404
The accompanying notes are an integral part of these consolidated financial statements.
Table of Contents
F-9
Consolidated Statements of Changes in Equity
For the years ended December 31, 2024, 2023 and 2022
(In thousands of Mexican pesos)
(Notes 1, 2 and 3)
Accumulated
Other
Equity
Retained
Comprehensive
Shares
Attributable to
Non-controlling
Capital Stock
Additional
Earnings
Loss, Net
Repurchased
Stockholders of
Interests
(Note 17)
Paid-in Capital
(Note 18)
(Note 18)
(Note 17)
the Company
(Note 19)
Total Equity
Balance at January 1, 2022
Ps.
4,836,708
Ps. 15,889,819
Ps. 88,218,188
Ps. (13,621,992)
Ps. (14,205,061)
Ps. 81,117,662
Ps. 15,406,402
Ps. 96,524,064
Funding for acquisition of shares under the Long-term Retention Plan
—
—
—
—
(648,242)
(648,242)
—
(648,242)
Disposition of non-controlling interests of discontinued operations
—
—
—
—
—
—
(142,071)
(142,071)
Dividends
—
—
(1,053,392)
—
—
(1,053,392)
—
(1,053,392)
Repurchase of CPOs
—
—
—
—
(629,326)
(629,326)
—
(629,326)
Shares repurchased
—
—
—
—
(980,410)
(980,410)
—
(980,410)
Sale of shares
—
—
(3,080,729)
—
4,061,139
980,410
—
980,410
Cancellation of sale of shares
—
—
246,658
—
(246,658)
—
—
—
Share-based compensation
—
—
2,009,304
—
—
2,009,304
—
2,009,304
Other
—
—
1,650
—
—
1,650
(486)
1,164
Comprehensive income
—
—
44,712,180
2,798,114
—
47,510,294
558,110
48,068,404
Balance at December 31, 2022
4,836,708
15,889,819
131,053,859
(10,823,878)
(12,648,558)
128,307,950
15,821,955
144,129,905
Funding for acquisition of shares under the Long-term Retention Plan
—
—
—
—
(86,000)
(86,000)
—
(86,000)
Dividends
—
—
(1,027,354)
—
—
(1,027,354)
—
(1,027,354)
Share cancellation
(113,932)
—
(1,339,107)
—
1,453,039
—
—
—
Repurchase of CPOs
—
—
—
—
(1,197,082)
(1,197,082)
—
(1,197,082)
Shares repurchased
—
—
—
—
(172,976)
(172,976)
—
(172,976)
Sale of shares
—
—
(692,062)
—
865,038
172,976
—
172,976
Cancellation of sale of shares
—
—
79,196
—
(79,196)
—
—
—
Share-based compensation
—
—
748,500
—
—
748,500
—
748,500
Comprehensive (loss) income
—
—
(8,422,730)
957,085
—
(7,465,645)
(429,891)
(7,895,536)
Balance at December 31, 2023
4,722,776
15,889,819
120,400,302
(9,866,793)
(11,865,735)
119,280,369
15,392,064
134,672,433
Funding for acquisition of shares under the Long-term Retention Plan
—
—
—
—
(132,572)
(132,572)
—
(132,572)
Equity distribution of Spun-off Businesses
(752,071)
(2,530,349)
(5,901,618)
—
—
(9,184,038)
—
(9,184,038)
Dividends
—
—
(1,018,954)
—
—
(1,018,954)
—
(1,018,954)
Share cancellation
(37,156)
—
(336,213)
—
373,369
—
—
—
Shares repurchased
—
—
—
—
(378,894)
(378,894)
—
(378,894)
Sale of shares
—
—
736,165
—
(357,271)
378,894
—
378,894
Cancellation of sale of shares
—
—
1,636,187
—
(1,636,187)
—
—
—
Share-based compensation
—
—
488,832
—
—
488,832
—
488,832
Acquisition of non-controlling interests in Sky
—
—
4,301,921
—
—
4,301,921
(6,075,488)
(1,773,567)
Other
—
—
—
—
—
—
(4,380)
(4,380)
Comprehensive loss
—
—
(8,265,520)
(3,015,982)
—
(11,281,502)
(70,627)
(11,352,129)
Balance at December 31, 2024
Ps.
3,933,549
Ps. 13,359,470
Ps.112,041,102
Ps. (12,882,775)
Ps. (13,997,290)
Ps.102,454,056
Ps.
9,241,569
Ps. 111,695,625
The accompanying notes are an integral part of these consolidated financial statements.
Table of Contents
F-10
Consolidated Statements of Cash Flows
For the years ended December 31, 2024, 2023 and 2022
(In thousands of Mexican pesos)
(Notes 1, 2 and 3)
2024
2023
2022
Operating Activities:
Loss before income taxes from continuing operations
Ps.
(7,696,609)
Ps.
(7,074,734)
Ps.
(12,896,872)
Income before income taxes from discontinued operations
70,644
945,727
76,147,263
Adjustments to reconcile income or loss before income taxes to net cash provided by operating activities:
Share of loss of associates and joint ventures
182,577
4,086,628
7,378,249
Depreciation and amortization
20,542,361
21,469,152
21,239,306
Other amortization of assets
47,628
422,065
353,232
Impairment of long-lived assets
3,064,319
69,467
—
(Gain) loss on disposition of property and equipment (1)
(2,321,248)
233,612
(131,683)
Impairment loss of trade accounts receivable and other receivables
1,294,125
1,107,996
1,172,555
Post-employment benefits
135,731
87,657
151,389
Interest income
(685,846)
(675,550)
(89,268)
Share-based compensation expense
488,832
748,500
1,665,909
Other finance (gain) loss, net
(773,727)
134,847
110,739
Gain on disposition of discontinued operations
—
—
(75,192,421)
Other expense (income)
1,259,756
(734,421)
—
Interest expense
7,984,754
7,654,334
9,459,377
Lawsuit settlement agreement
—
—
418,734
Unrealized foreign exchange loss (gain), net
5,664,559
(3,740,149)
(999,499)
29,257,856
24,735,131
28,787,010
Decrease (increase) in trade accounts receivable
142,995
523,619
(4,176,638)
Decrease (increase) in transmission rights
1,344,981
(456,857)
1,241,568
Decrease in due from related parties, net
2,306,030
1,708,178
4,987,868
Decrease (increase) in inventories
1,099,637
564,745
(588,954)
Decrease (increase) in other accounts receivable and other current assets
1,456,804
1,271,583
(2,217,989)
Decrease in trade accounts payable and accrued expenses
(738,598)
(3,216,450)
(122,945)
(Decrease) increase in deferred revenue and customer advances
(526,698)
(734,349)
267,237
(Decrease) increase in other liabilities and taxes payable
(748,232)
(2,316,886)
(3,027,186)
(Decrease) increase in post-employment benefits
(228,444)
136,993
(564,382)
Income taxes paid (2)
(812,215)
(7,014,309)
(12,118,014)
3,296,260
(9,533,733)
(16,319,435)
Net cash provided by operating activities
32,554,116
15,201,398
12,467,575
Investing activities:
Proceeds from disposition of discontinued operations
—
—
66,095,454
Long-term credit with related party
—
—
(5,738,832)
Disposition or investment in associate and joint ventures
50,767
45,556
(7,922)
Dividends from preferred shares
777,838
716,905
752,556
Release of holdback payment of OCEN
—
—
364,420
Dividends received
10,000
8,000
10,000
Investments in property, plant and equipment
(9,097,397)
(14,708,016)
(17,315,387)
Disposition of property, plant and equipment
627,973
48,873
264,163
Non-current trade account receivable
—
—
87,663
Other investments in intangible assets
(1,378,854)
(1,869,707)
(1,807,183)
Net cash (used in) provided by investing activities
(9,009,673)
(15,758,389)
42,704,932
Financing activities:
Partial prepayment of Senior Notes due 2025, 2026, 2045, 2046 and 2049
—
(4,718,250)
(10,099,581)
Repurchase of Senior Notes due 2043
—
(181,731)
—
Prepayment of long-term loans from Mexican banks
—
—
(6,000,000)
Payment of long-term loans from Mexican banks
(10,000,000)
—
—
Proceeds from Mexican banks long-term loans
10,000,000
400,000
—
Repayment of Mexican peso debt
—
—
(610,403)
Prepayment of Mexican peso debt related to Sky
—
(1,400,000)
—
Payments of lease liabilities
(1,567,300)
(1,793,602)
(1,690,311)
Interest paid
(7,417,915)
(7,553,938)
(8,893,000)
Funding for acquisition of shares under the Long-term Retention Plan
(132,572)
(86,000)
(648,242)
Repurchases of CPOs under a share repurchase program
—
(1,197,082)
(629,326)
Repurchase of capital stock
(378,894)
(172,976)
(980,410)
Sale of capital stock
378,894
172,976
980,410
Dividends paid
(1,018,954)
(1,027,354)
(1,053,392)
Derivative financial instruments
747,746
(195,055)
(145,131)
Net cash used in financing activities
(9,388,995)
(17,753,012)
(29,769,386)
Foreign currency translation on cash and cash equivalents
148,289
(234,637)
(100,344)
Net increase (decrease) in cash and cash equivalents
14,303,737
(18,544,640)
25,302,777
Cash and cash equivalents at beginning of year
32,586,352
51,130,992
25,828,215
Cash and cash equivalents of Spun-off Businesses
(696,916)
—
—
Cash and cash equivalents at end of year
Ps.
46,193,173
Ps.
32,586,352
Ps.
51,130,992
(1) Includes a realized gain on sale of property of Ps.2,582,339, in connection with the Spun-off Businesses (see Notes 3 and 22).
(2) In 2024, income taxes paid are net of income tax reimbursements of $1,324,442.
Non-cash transactions:
The principal non-cash transactions in 2024 included the Spun-off Businesses and the acquisition of non-controlling interest in Sky (see Note 3).
The accompanying notes are an integral part of these consolidated financial statements.
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F-11
Notes to Consolidated Financial Statements
For the Years Ended December 31, 2024, 2023 and 2022
(In thousands of Mexican pesos, except per CPO, per share and exchange rate amounts, unless otherwise indicated)
1.
Corporate Information
Grupo Televisa, S.A.B. (the “Company”) is a limited liability public stock corporation (“Sociedad Anónima Bursátil” or “S.A.B.”), incorporated under the
laws of Mexico. Pursuant to the terms of the Company’s bylaws (“Estatutos Sociales”) its corporate existence continues through 2106. The shares of the
Company are listed and traded in the form of “Certificados de Participación Ordinarios” or “CPOs” on the Mexican Stock Exchange (“Bolsa Mexicana de
Valores” or “BMV”) under the ticker symbol TLEVISA CPO, and in the form of Global Depositary Shares or “GDSs”, on the New York Stock Exchange,
or “NYSE”, under the ticker symbol TV. The Company’s principal executive offices are located at Av. Vasco de Quiroga No. 2000, Colonia Santa Fe,
01210 Mexico City, Mexico.
The Company together with its subsidiaries (collectively, the “Group”) is a major telecommunications corporation which owns and operates one of the
most significant cable companies as well as a leading direct-to-home (“DTH”) satellite pay television system in Mexico. The Group’s cable business offers
integrated services, including video, high-speed data, voice and mobile to residential and commercial customers, as well as managed services to domestic
and international carriers. The Group owns Sky, a leading DTH satellite pay television system and broadband provider in Mexico. The Group holds a
number of concessions by the Mexican government that authorizes it to broadcast programming over television stations for the signals of
TelevisaUnivision, Inc. (“TelevisaUnivision”), and the Group’s cable and DTH systems. In addition, the Group is the largest shareholder of
TelevisaUnivision, a leading media company producing, creating, and distributing Spanish-speaking content through several broadcast channels in Mexico,
the United States and over 50 countries through television networks, cable operators and over-the-top or OTT services.
2.
Material Accounting Policies
The material accounting policies followed by the Group and used in the preparation of these consolidated financial statements are summarized below.
(a) Basis of Presentation
The consolidated financial statements of the Group as of December 31, 2024 and 2023, and for the years ended December 31, 2024, 2023 and 2022, are
presented in accordance with International Financial Reporting Standards (“IFRS Accounting Standards”), as issued by the International Accounting
Standards Board (“IASB”).
The consolidated financial statements have been prepared on a historical cost basis, except for the measurement at fair value of derivative financial
instruments, certain financial assets, investments in equity financial instruments, plan assets of post-employment benefits and share-based payments, as
described in the notes to the financial statements below.
The preparation of consolidated financial statements in conformity with IFRS Accounting Standards requires the use of certain accounting estimates. It also
requires management to exercise its judgment in the process of applying the Group’s accounting policies. Changes in assumptions may have a significant
impact on the consolidated financial statements in the period the assumptions changed. Management believes that the underlying assumptions are
appropriate. The areas involving a higher degree of judgment or complexity, or areas where estimates and assumptions are material to the Group’s financial
statements are disclosed in Note 5 to these consolidated financial statements.
The consolidated statements of income or loss of the Group for the years ended December 31, 2024, 2023, and 2022 have been prepared to present the
discontinued operations following the spin-off of most of the businesses of the Group’s former Other Businesses segment effective on January 31, 2024.
Accordingly, the consolidated statements of income or loss of the Group for the years ended December 31, 2023 and 2022 have been re-presented from
those originally reported by the Company, to present in those years the results from discontinued operations of the businesses that were spun-off by the
Group on January 31, 2024 (see Notes 3 and 28).
The consolidated statement of income or loss of the Group for the year ended December 31, 2022, has been prepared to present the discontinued operations
following the transaction between the Company and TelevisaUnivision that was closed on January 31, 2022 (the “TelevisaUnivision Transaction”) (see
Notes 3 and 28).
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F-12
These consolidated financial statements were authorized for issuance on March 28, 2025, and on April 29, 2025, for the events disclosed in Note 29, by the
Group’s Corporate Vice President of Finance.
(b) Consolidation
The financial statements of the Group are prepared on a consolidated basis and include the assets, liabilities, and results of operations of all companies in
which the Company has a controlling interest (subsidiaries). All intercompany balances and transactions have been eliminated from the Group’s
consolidated financial statements.
Subsidiaries
Subsidiaries are all entities over which the Company has control. The Company controls an entity when it is exposed, or has rights, to variable returns from
its involvement with the entity and has the ability to affect those returns through its power over the entity. The existence and effects of potential voting
rights that are currently exercisable or convertible are considered when assessing whether or not the Company controls another entity. The subsidiaries are
consolidated from the date on which control is obtained by the Company and cease to be consolidated from the date on which said control is lost.
The Group applies the acquisition method to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair
value of the assets transferred, the liabilities incurred to the former owners of the acquiree, and the equity interests issued by the Group. The consideration
transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired and liabilities
and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. The Group recognizes any
non-controlling interest in the acquiree on an acquisition-by-acquisition basis at the non-controlling interest’s proportionate share of the recognized
amounts of acquiree’s identifiable net assets.
Acquisition-related costs are expensed as incurred.
Goodwill is initially measured as the excess of the aggregate of the consideration transferred and the fair value of non-controlling interest over the net
identifiable assets acquired and liabilities assumed. If this consideration is lower than the fair value of the net assets of the subsidiary acquired, the
difference is recognized in income or loss.
Changes in Ownership Interests in Subsidiaries without Change of Control
Transactions with non-controlling interests that do not result in loss of control are accounted for as equity transactions—that is, as transactions with the
owners in their capacity as owners. The difference between fair value of any consideration paid and the interest acquired of the carrying amount of net
assets of the subsidiary is recorded in equity. Gains or losses on disposals of non-controlling interests are also recorded in equity.
Loss of Control of a Subsidiary
When the Company ceases to have control of a subsidiary, any retained interest in the entity is remeasured to its fair value at the date when control is lost,
with the change in carrying amount recognized in income or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting
for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognized in other comprehensive income in
respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities. This means that amounts previously
recognized in other comprehensive income are reclassified to income or loss except for certain equity financial instruments designated irrevocably with
changes in other comprehensive income or loss.
Discontinued Operations
A discontinued operation is a component of the Group that either has been disposed of or is classified as held for sale, for which its operations and cash
flows can be clearly distinguished, operationally and for financial reporting purposes, from the rest of the Group and represents a separate major line of
business or operations.
Classification as a discontinued operation occurs at the earlier of disposal or when the operation meets the criteria to be classified as held for sale.
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F-13
When an operation is classified as a discontinued operation, the comparative consolidated statements of income are re-presented as if the operation had
been discontinued from the start of the comparative period.
Subsidiaries of the Company
At December 31, 2024 and 2023, the main direct and indirect subsidiaries of the Company were as follows:
Company’s
Ownership
Business
Subsidiaries
Interest (1)
Segment
2024
2023
Empresas Cablevisión, S.A.B. de C.V. and subsidiaries (collectively, “Empresas Cablevisión”) (3)
51.5 %
51.2 %
Cable
Subsidiaries engaged in the Cablemás business (collectively, “Cablemás”) (3)
100 %
100 %
Cable
Televisión Internacional, S.A. de C.V. and subsidiaries (collectively, “TVI”) (3)
100 %
100 %
Cable
Cablestar, S.A. de C.V. and subsidiaries (collectively, “Bestel”) (3)
66.4 %
66.2 %
Cable
Arretis, S.A.P.I. de C.V. and subsidiaries (collectively, “Cablecom”) (3)
100 %
100 %
Cable
Subsidiaries engaged in the Telecable business (collectively, “Telecable”) (3)
100 %
100 %
Cable
Corporativo Vasco de Quiroga, S.A. de C.V. (“CVQ”) and subsidiaries (3)
100 %
100 %
Cable and Sky
Innova Holdings, S. de R.L. de C.V. (“Innova Holdings”) and Innova, S. de R.L. de C.V. (“Innova”)
and subsidiaries (collectively, “Sky”) (3) (4)
100 %
58.7 %
Sky
Controladora de Juegos y Sorteos de México, S.A. de C.V. and subsidiaries (2)
—
100 %
Editorial Televisa, S.A. de C.V. and subsidiaries (2)
—
100 %
Grupo Distribuidoras Intermex, S.A. de C.V. and subsidiaries (2)
—
100 %
Grupo Telesistema, S.A. de C.V. (“Grupo Telesistema”) and subsidiaries (5)
—
100 %
(1)
Percentage of equity interest directly or indirectly held by the Company as of December 31, 2024 and 2023.
(2)
See Note 26 for a description of each of the Group’s reportable business segments. Most of the operations of the Group’s former Other Businesses
segment were discontinued following the spin-off of these businesses by the Company on January 31, 2024, to create a new controlling entity of the
spun-off businesses listed in the Mexican Stock Exchange (see Notes 3 and 28).
(3)
CVQ is a direct subsidiary of the Company and the parent company of Empresas Cablevisión, Cablemás, TVI, Bestel, Cablecom, Telecable, and Sky.
Cablestar, S.A. de C.V. is an indirect majority-owned subsidiary of Empresas Cablevisión. In September 2024, Arretis, S.A.P.I. de C.V. was merged
into Televisión Internacional, S.A. de C.V., which became the surviving entity resulting from this merger, and the parent company of the Cablecom
subsidiaries.
(4)
Innova is an indirect subsidiary of the Company, CVQ and Sky DTH, S.A. de C.V. (“Sky DTH”), and a direct wholly-owned subsidiary of Innova
Holdings. Sky is a satellite television provider in Mexico, Central America and the Dominican Republic. Through May 2024, the Company held a
58.7% interest of Innova’s equity and designated a majority of the members of Innova’s Board of Directors, and the non-controlling interests had
certain governance and veto rights in Innova, including the right to block certain transactions between the companies in the Group and Sky. These veto
rights were protective in nature and did not affect decisions about relevant business activities of Innova. In June 2024, the Company acquired the
remaining 41.3% non-controlling interest in the Sky segment held by AT&T, by which the Company became an indirect owner of 100% of the capital
stock of Innova Holdings and Innova (see Notes 3 and 19).
(5)
Grupo Telesistema is a direct subsidiary of the Company. As of December 31, 2024 and 2023, Grupo Telesistema and its subsidiaries, together with the
Company, owned most of the Group’s corporate assets, including the Group’s aggregate investment in common and preferred shares of
TelevisaUnivision (see Notes 3, 10 and 26).
Concessions and Permits
The Group’s Cable and Sky segments, as well as the concessions held by the Group to broadcast programming over television stations for the signals of
TelevisaUnivision, require governmental concessions and special authorizations for the provision of telecommunications and broadcasting services in
Mexico. Such concessions are granted by the Mexican Institute of Telecommunications (Instituto Federal de Telecomunicaciones or “IFT”) for a fixed
term, subject to renewal in accordance with the Mexican Telecommunications and Broadcasting Law (Ley Federal de Telecomunicaciones y Radiodifusión
or “LFTR”).
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F-14
Renewal of concessions for the Cable and Sky segments require, among others: (i) to request its renewal to IFT prior to the last fifth period of the fixed
term of the related concession; (ii) to be in compliance with the concession holder’s obligations under the LFTR, other applicable regulations, and the
concession title; and (iii) the acceptance by the concession holder of any new conditions for renewing the concession as set forth by IFT. IFT shall resolve
any request for renewal of the telecommunications concessions within 180 business days of its request. Failure to respond within such period of time shall
be interpreted as if the request for renewal has been granted.
The Group holds a number of concessions by the Mexican government that authorizes it to broadcast programming over television stations for the signals
of TelevisaUnivision. The payments made by the Group for these broadcasting concessions are accounted for as intangible assets in the Group’s
consolidated statement of financial position (see Notes 3, 13, 20 and 26).
Renewal of broadcasting concessions for the broadcast programming operations over television stations for the signals of TelevisaUnivision, requires,
among others: (i) to request such renewal to IFT prior to the last fifth period of the fixed term of the related concession; (ii) to be in compliance with the
concession holder’s obligations under the LFTR, other applicable regulations, and the concession title; (iii) a declaration by IFT that there is no public
interest in recovering the spectrum granted under the related concession; and (iv) the acceptance by the concession holder of any new conditions for
renewing the concession as set forth by IFT, including the payment of a related fee. IFT shall resolve within the year following the presentation of the
request, if there is public interest in recovering the spectrum granted under the related concession, in which case it will notify its determination and proceed
with the termination of the concession at the end of its fixed term. If IFT determines that there is no public interest in recovering the spectrum, it will grant
the requested extension within 180 business days, provided that the concessionaire accepts, in advance, the new conditions set by IFT, which will include
the payment of the fee referred to above. Such fee will be determined by IFT for the relevant concessions, considering the following elements: (i) the
frequency band; (ii) the amount of spectrum; (iii) coverage of the frequency band; (iv) domestic and international benchmark regarding the market value of
frequency bands; and (v) upon request of IFT, an opinion issued by the Ministry of Finance and Public Credit of IFT´s proposal for calculation of the fee.
The regulations of the broadcasting and the telecommunications concessions (including satellite pay - TV) establish that at the end of the concession, the
frequency bands or spectrum attached to the services provided in the concessions shall return to the Mexican government. In addition, at the end of the
concession, the Mexican government will have the preferential right to acquire infrastructure, equipment and other goods directly used in the provision of
the concession. If the Mexican government were to exercise its right to acquire infrastructure, equipment and other goods, it would be required to pay a
price that is equivalent to a formula that is similar to fair value. To the knowledge of the Company’s management, no spectrum granted for broadcasting
services in Mexico has been recovered by the Mexican government in at least the past three decades for public interest reasons. However, the Company’s
management is unable to predict the outcome of any action by IFT in this regard. In addition, these assets, by themselves, would not be enough to
immediately begin broadcasting or offering satellite pay TV services or telecommunications services, as no content producing assets or other equipment
necessary to operate the business would be included.
Additionally, the Group’s Sky businesses in Central America and the Dominican Republic require concessions or permits granted by local regulatory
authorities for a fixed term, subject to renewal in accordance with local laws.
The accounting guidelines provided by IFRIC 12 Service Concession Arrangements, are not applicable to the Group due primarily to the following factors:
(i) the Mexican government does not substantially control the Group’s infrastructure, what services are provided with the infrastructure and the price at
which such services are offered; (ii) the Group’s broadcasting service does not constitute a public service as per the definition in IFRIC 12; and (iii) the
Group is unable to divide its infrastructure among the public (telephony and possibly Internet services) and non-public (pay TV) service components.
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F-15
At December 31, 2024, the expiration dates of the Group’s concessions and permits were as follows:
Segments
Expiration Dates
Cable
Various from 2026 to 2059
Sky
Various from 2025 to 2056
Corporate assets:
Broadcasting concessions (1)
In 2042 and 2052
(1)
Broadcasting concessions that remained in the Group after the TelevisaUnivision Transaction closed on January 31, 2022, which include 23
concessions for the use of spectrum that comprise the Group’s 225 TV stations for the signals of TelevisaUnivision, for a term of 20 years, starting in
January 2022 and ending in January 2042, and six concessions to provide digital broadcasting television services on such TV stations, for a term of 30
years, starting in January 2022 and ending in January 2052. In 2018, the Group paid an aggregate amount of Ps.5,753,349 in cash for the broadcasting
concessions for the use of spectrum and recognized this payment as an intangible asset in its consolidated statement of financial position. This amount
is being amortized over a period of 20 years beginning on January 1, 2022, by using the straight-line method (see Notes 3, 13, 20 and 26).
The concessions or permits held by the Group are not subject to any significant pricing regulations in the ordinary course of business.
(c) Investments in Associates and Joint Ventures
Associates are those entities over which the Group has significant influence but not control or joint control, over the financial and operating policies,
generally those entities with a shareholding of between 20% and 50% of the voting rights. Investments in joint arrangements are classified as either joint
operations or joint ventures depending on the contractual rights and obligations of each investor. Joint ventures are those joint arrangements where the
Group exercises joint control with one or more stockholders, without exercising control individually, and have rights to the net assets of the joint
arrangements. Investments in associates and joint ventures are accounted for using the equity method of accounting. Under the equity method, the
investment is initially recognized at cost, and the carrying amount is increased or decreased to recognize the investor’s share of the net assets of the
investee after the date of acquisition. The investor’s income or loss includes its share of the investee’s income or loss and the investor’s other
comprehensive income includes its share of the investee’s other comprehensive income.
The Group’s investments in associates include an equity interest in TelevisaUnivision represented by 43.0% and 43.7% of the outstanding total common
and preferred shares of TelevisaUnivision on an as-converted basis (excluding unvested and/or unsettled stock, restricted stock units and options of
TelevisaUnivision) as of December 31, 2024 and 2023, respectively (see Notes 3 and 10).
If the Group’s share of losses of an associate or a joint venture equals or exceeds its interest in the investee, the Group discontinues recognizing its share of
further losses. The interest in an associate or a joint venture is the carrying amount of the investment in the investee under the equity method together with
any other long-term investment that, in substance, form part of the Group’s net investment in the investee. After the Group’s interest is reduced to zero,
additional losses are provided for, and a liability is recognized, only to the extent that the Group has incurred legal or constructive obligations or made
payments on behalf of the associate or joint venture.
Any gain or loss resulting from a downstream transaction involving assets that constitute a business, as defined in IFRS 3 Business Combinations, between
the Company (including its consolidated subsidiaries) and its associate or joint venture is recognized in full in the Group’s financial statements. The Group
adopted this accounting policy in connection with the TelevisaUnivision Transaction closed on January 31, 2022 (see Note 3), and in accordance with the
guidelines of Amendments to IFRS 10 and IAS 28 Sale or Contribution of Assets between an Investor and its Associate or Joint Venture, and Effective Date
of Amendments to IFRS 10 and IAS 28, issued by the IASB.
(d) Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the Group’s Co-Chief Executive Officers (“chief operating
decision makers”), who are responsible for allocating resources and assessing performance for each of the Group’s operating segments.
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F-16
(e) Foreign Currency Translation
Functional and Presentation Currency
Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which
each of the Group´s entity operates (“functional currency”). The presentation currency of the Group’s consolidated financial statements is the Mexican
peso.
Transactions and Balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or measurement
where items are remeasured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end
exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in the statement of income as part of finance income or
expense, except when recognized in other comprehensive income as qualifying cash flow hedges and qualifying net investment hedges.
Changes in the fair value of monetary securities denominated in foreign currency classified as investments in financial instruments are analyzed between
exchange differences resulting from changes in the amortized cost of the security and other changes in the carrying amount of the security. Translation
differences related to changes in amortized cost are recognized in income or loss, and other changes in carrying amount are recognized in other
comprehensive income or loss.
Translation of Foreign Operations
The financial statements of the Group’s foreign entities that have a functional currency different from the presentation currency are translated into the
presentation currency as follows: (a) assets and liabilities are translated at the closing rate at the date of the statement of financial position; (b) income and
expenses are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on
the transaction dates, in which case income and expenses are translated at the rate on the dates of the transactions); (c) stockholders’ equity accounts are
translated at the prevailing exchange rate at the time capital contributions were made and earnings were generated and (d) all resulting translation
differences are recognized in other comprehensive income or loss.
Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at
the closing rate. Translation differences arising are recognized in other comprehensive income or loss.
Assets and liabilities in foreign currencies of non-Mexican subsidiaries that have the Mexican Peso as a functional currency and that keep its books and
records in a different currency are initially converted to Mexican Pesos by utilizing the exchange rate on the statement of financial position date for
monetary assets and liabilities, and historical exchange rates for non-monetary items, with the related adjustment included in the consolidated statement of
income as finance income or expense.
A portion of the Group’s outstanding principal amount of its U.S. dollar denominated long-term debt (hedging instrument, disclosed in the line item “Long-
term debt, net of current portion” of the consolidated statement of financial position) has been designated as a hedge of a net investment in a foreign
operation in connection with the Group’s investment in shares of TelevisaUnivision (hedged item), which amounted to U.S.$2,071.1 million
(Ps.43,220,986) and U.S.$2,499.7 million (Ps.42,326,344) as of December 31, 2024 and 2023, respectively. Consequently, any foreign exchange gain or
loss attributable to this designated hedging long-term debt is credited or charged directly to other comprehensive income or loss as a cumulative result from
foreign currency translation to the extent that the hedge is effective (see Notes 10, 14 and 18).
A portion of the Group’s outstanding principal amount of its U.S. dollar denominated long-term debt (hedging instrument, disclosed in the line item “Long-
term debt, net of current portion” of the consolidated statement of financial position) has been designated as a fair value hedge of foreign exchange
exposure related to its investment in Open-Ended Fund (hedged item), which amounted to U.S.$37.6 million (Ps.784,769) and U.S.$39.8 million
(Ps.674,451), as of December 31, 2024 and 2023, respectively. Consequently, any foreign exchange gain or loss attributable to this designated hedging
long-term debt is credited or charged directly to other comprehensive income or loss to the extent that the hedge is effective, along with the recognition in
the same line item of any foreign currency gain or loss of this investment in Open-Ended Fund (see Notes 9, 14 and 18).
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F-17
(f) Cash and Cash Equivalents
Cash and cash equivalents consist of cash on hand and all highly liquid investments with an original maturity of three months or less at the date of
acquisition. Cash is stated at nominal value and cash equivalents are measured at fair value, and the changes in the fair value are recognized in the
statement of income.
As of December 31, 2024 and 2023, cash equivalents primarily consisted of fixed short-term deposits and corporate fixed income securities denominated in
U.S. dollars and Mexican pesos, with an average yield of approximately 4.99% for U.S. dollar deposits and 10.73% for Mexican peso deposits in 2024, and
approximately 4.65% for U.S. dollar deposits and 11.09% for Mexican peso deposits in 2023.
(g) Transmission Rights
The Group incurs costs related to the license of the rights to use content owned by third parties and sports rights on its owned pay television platforms,
which are described as transmission rights in the Group’s consolidated statement of financial position. The Group classifies transmission rights as current
and non-current assets.
Transmission rights are valued at the lesser of acquisition cost and net realizable value.
Transmission rights are recognized from the point at which the legally enforceable license period begins. Until the license term commences and the
transmission rights are available, payments made are recognized as prepayments. Cost of revenues is calculated and recorded for the month in which
transmission rights are matched with related revenues.
Transmission rights are recognized in income on a straight-line basis over the lives of the contracts.
(h) Inventories
Inventories of paper, magazines, materials and supplies for maintenance of technical equipment are recorded at the lower of cost or its net realizable value.
The net realizable value is the estimated selling price in the normal course of business, less estimated costs to conduct the sale. Cost is determined using the
average cost method.
(i) Financial Assets
The Group classifies its financial assets in accordance with IFRS 9 Financial Instruments (“IFRS 9”). Under the guidelines of IFRS 9, the Group classifies
financial assets as subsequently measured at amortized cost, fair value through other comprehensive income or loss (“FVOCIL”), or fair value through
income or loss (“FVIL”), based on the Company’s business model for managing the financial assets and the contractual cash flows characteristics of the
financial asset.
Financial Assets Measured at Amortized Cost
Financial assets are measured at amortized cost when the objective of holding such financial assets is to collect contractual cash flows, and the contractual
terms of the financial asset give rise on specified dates to cash flows that are only payments of principal and interest on the principal amount outstanding.
These financial assets are initially recognized at fair value plus transaction costs and subsequently carried at amortized cost using the effective interest rate
method, with changes in carrying amount recognized in the consolidated statement of income in the line which most appropriately reflects the nature of the
item or transaction. They are included in current assets, except for maturities greater than 12 months after the end of the reporting period that are included
in non-current assets. The Group’s financial assets measured at amortized costs are primarily presented as “trade accounts receivable”, “other accounts
receivable”, and “due from related parties” in the consolidated statement of financial position (see Note 7).
Financial Assets Measured at FVOCIL
Financial assets are measured at FVOCIL when the objective of holding such financial assets is both collecting contractual cash flows and selling financial
assets, and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the
principal amount outstanding.
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F-18
The Group’s investments in certain equity instruments have been designated to be measured at FVOCIL, as permitted by IFRS 9. In connection with this
designation, any amounts presented in consolidated other comprehensive income or loss are not subsequently transferred to consolidated income.
Dividends from these equity instruments are recognized in consolidated income or loss when the right to receive payment of the dividend is established,
and such dividend is probable to be paid to the Group.
Financial Assets at FVIL
Financial assets at FVIL are financial assets held for trading. A financial asset is classified in this category if acquired principally for the purpose of selling
in the short term. Derivatives are also categorized as held for trading unless they are designated as hedges. Assets in this category are classified as current
assets if expected to be settled within 12 months, otherwise they are classified as non-current.
Impairment of Financial Assets
The Group assesses on a forward-looking basis the expected credit losses associated with its financial assets carried at FVOCIL. The impairment
methodology applied depends on whether there has been a significant increase in credit risk.
For trade accounts receivables, the Group applies the simplified approach permitted by IFRS 9, which requires expected lifetime losses to be recognized
from initial recognition of the trade accounts receivables (see Note 7).
Offsetting of Financial Instruments
Financial assets are offset against financial liabilities and the net amount reported in the consolidated statement of financial position if, and only when the
Group: (i) currently has a legally enforceable right to set off the recognized amounts; and (ii) intends either to settle on a net basis, or to realize the assets
and settle the liability simultaneously.
(j) Property, Plant and Equipment, and Investment Property
Property, plant and equipment are recorded at acquisition cost.
Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic
benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The cost of replacing part of an item of property,
plant and equipment is recognized in the carrying amount of such item. The carrying amount of the replaced part is derecognized. All other repairs and
maintenance are charged to income or loss during the financial period in which they are incurred.
The costs of dismantling items of property, plant and equipment are recognized at the present value of the expected cost related to the dismantling
obligations. These dismantling obligations are primarily related to the use of the Group’s Cable segment networks during a particular period and presented
as part of other long-term liabilities in the Group’s consolidated statements of financial position. As of December 31, 2024 and 2023, the present value of
the Group’s dismantling obligations amounted to Ps.1,126,997 and Ps.1,133,379, respectively.
Depreciation of property, plant and equipment is based upon the carrying amount of the assets or the estimated residual value of the assets, if any, and is
computed using the straight-line method over the estimated useful lives of the asset, as follows:
Estimated
Useful Lives
Buildings
20-50 years
Networks and technical equipment
3-30 years
Satellite transponders
15 years
Furniture and fixtures
10-15 years
Transportation equipment
4-8 years
Computer equipment
3-6 years
Leasehold improvements
5-30 years
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.
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F-19
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is higher than its estimated recoverable
amount.
Gains and losses on disposals of assets are determined by comparing the proceeds with the carrying amount and are recognized within other income or
expense in the consolidated statement of income or loss.
If significant parts of an item of property, plant and equipment have different useful lives, then they are classified as separate items (major components) of
property, plant and equipment.
Investment Property
Beginning on February 1, 2022, the Group has investment property. Investment property is property of the Group (land or a building or part of a building or
both) held to earn rentals rather than for use in the production or supply of goods or services, or for administrative purposes, or sale in the ordinary course
of business.
Depreciation of investment property is based upon the carrying amount of the assets in use and the estimated residual value of the assets, if any and is
computed using the straight-line method over the estimated useful lives of the asset, as follows:
Estimated
Useful Lives
Buildings
20-65 years
The Group’s investment property is measured at cost less any accumulated depreciation and any accumulated impairment losses.
(k) Lease Agreements
As a lessee, the Group recognizes a right-of-use asset representing its right to use the underlying asset in a lease agreement, and a lease liability
representing its obligation to make lease payments.
Right-of-use assets are measured at cost comprising the following: the amount of the initial measurement of lease liability, any lease payments made at or
before the commencement date, less any lease incentives received, any initial direct costs and restoration costs.
Right-of-use assets are generally depreciated over the shorter of the asset’s useful life and the lease term, on a straight-line basis. If the Group is reasonably
certain to exercise a purchase option, the right-of-use asset is depreciated over the underlying asset’s useful life.
Payments associated with short-term leases of equipment and vehicles and mostly leases of low-value assets are recognized on a straight-line basis as an
expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less.
The Group recognizes a depreciation of right-of-use assets for long-term lease agreements, and a finance expense for interest from related lease liabilities.
The Group leases its investment property consisting of certain owned building and land property (see Note 11). These lease agreements are classified as
operating leases from a lessor perspective.
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F-20
(l) Intangible Assets and Goodwill
Intangible assets and goodwill are recognized at acquisition cost. Intangible assets and goodwill acquired through business combinations are recorded at
fair value at the date of acquisition. Intangible assets with indefinite useful lives, which include, trademarks, concessions, and goodwill, are not amortized,
and subsequently recognized at cost less accumulated impairment losses. Intangible assets with finite useful lives are amortized on a straight-line basis over
their estimated useful lives, as follows:
Estimated
Useful Lives
Trademarks with finite useful lives
4 years
Licenses
3-10 years
Subscriber lists
4-5 years
Payments for renewal of concessions
20 years
Other intangible assets
3-20 years
Trademarks
The Group determines its acquired trademarks to have an indefinite life when they are expected to generate net cash inflows for the Group indefinitely.
Additionally, the Group considers that there are no legal, regulatory or contractual provisions that limit the useful lives of trademarks. The Group has not
capitalized any amounts associated with internally developed trademarks.
Concessions
The Group defined concessions to have an indefinite useful life due to the fact that the Group has a history of renewing its concessions upon expiration, has
maintained the concessions granted by the Mexican government, and has no foreseeable limit to the period over which the assets are expected to generate
net cash inflows. In addition, the Group is committed to continue to invest for the long term to extend the period over which the broadcasting and
telecommunications concessions are expected to continue to provide economic benefits. These concessions are not amortized, but instead they are subject
to impairment testing at least annually. The useful life of concessions that is not being amortized is reviewed in each annual reporting period to determine
whether events and circumstances continue to support an indefinite useful life for these concessions. Historically, the Group has renewed its
telecommunications’ concessions upon expiration and generally all condition necessary to obtain renewal have been satisfied and the cost to renew these
concessions has not been significant.
Any fees paid by the Group to regulatory authorities for concessions renewed are determined to have finite useful lives and are amortized on a straight-line
basis over the fixed term of the related concession.
Goodwill
Goodwill arises on the acquisition of a business and represents the excess of the consideration transferred over the Group’s interest in net fair value of the
identifiable assets, liabilities and contingent liabilities of the acquiree and the fair value of the non-controlling interest in the acquiree.
For the purpose of impairment testing, goodwill acquired in a business combination is allocated to each of the cash generating units (“CGUs”), or groups of
CGUs, that are expected to benefit from the synergies of the combination. Each unit or group of units to which the goodwill is allocated represents the
lowest level within the entity at which the goodwill is monitored for internal management purposes.
Goodwill impairment reviews are undertaken annually or more frequently if events or changes in circumstances indicate a potential impairment. The
carrying amount of goodwill is compared to the recoverable amount, which is the higher of the value in use and the fair value less costs to sell. Any
impairment of goodwill is recognized as an expense in the consolidated statement of income or loss and is not subject to be reversed in subsequent periods.
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F-21
(m) Impairment of Long-lived Assets
The Group reviews for impairment the carrying amounts of its long-lived assets, tangible and intangible, whenever events or changes in business
circumstances indicate that these carrying amounts may not be recoverable. An impairment loss is recognized for the amount by which the asset’s carrying
amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. To determine
whether an impairment exists, the carrying amount of the cash generating unit is compared with its recoverable amount. Any impairment loss shall be
allocated to reduce the carrying amount of any goodwill and intangible assets with indefinite useful-life of the cash-generating unit; and then, to the other
long-lived assets of the CGUs. Fair value estimates are based on quoted market values in active markets, if available. If quoted market prices are not
available, the estimate of fair value is based on various valuation techniques, including discounted value of estimated future cash flows, market multiples or
third-party appraisal valuations. Any impairment of long-lived assets other than goodwill may be subsequently reversed under certain circumstances.
(n) Trade Accounts Payable and Accrued Expenses
Trade accounts payable and accrued expenses are obligations to pay for goods or services that have been acquired in the ordinary course of business from
suppliers. Trade accounts payable and accrued expenses are classified as current liabilities if payment is due within one year or less (or in the normal
operating cycle of the business if longer). If not, they are presented as non-current liabilities.
Trade accounts payable and accrued expenses are recognized initially at fair value and subsequently measured at amortized cost using the effective interest
method.
Trade accounts payable and accrued expenses are presented as a single item of consolidated current liabilities in the consolidated statements of financial
position as of December 31, 2024 and 2023.
(o) Debt
Debt is recognized initially at fair value, net of transaction costs incurred. Debt is subsequently carried at amortized cost; any difference between the
proceeds (net of transaction costs) and the redemption value is recognized in the consolidated statement of income or loss over the period in which the debt
is outstanding using the effective interest method.
Fees paid on the establishment of debt facilities are recognized as transaction costs of the loan to the extent that it is probable that some or all of the facility
will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent there is no evidence that it is probable that some or all of the
facility will be drawn down, the fee is capitalized as a pre-payment for liquidity services and amortized over the period of the facility to which it relates.
The fee is deducted from the amount of the financial liability when it is initially recognized, or recognized in the consolidated statement of income when
the issue is no longer expected to be completed.
Current portion of long-term debt and interest payable are presented as a separate line item in the consolidated statements of financial position as of
December 31, 2024 and 2023.
Debt early redemption costs are recognized as finance expense in the consolidated statement of income.
(p) Customer Advances
Customer advance agreements are contract liabilities presented by the Group in the consolidated statement of financial position. The Group recognizes a
contract liability when a customer pays consideration, or the Group has a right to an amount of consideration that is unconditional, before the Group
transfers services or goods to the customer. A contract liability is a Group’s obligation to transfer services or goods to a customer for which the Group has
received consideration (or an amount of consideration is due) to a customer. In addition, the Group recognizes contract assets upon the approval of non-
cancellable contracts that generate an unconditional right to receive cash consideration prior to services being rendered. The Company’s management has
consistently recognized that an amount of consideration is due, for legal, finance and accounting purposes, when a short-term non-interest bearing note is
received from a customer in connection with an advance agreement entered into with the customer for services or goods to be provided by the Group in the
short term.
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F-22
(q) Provisions
Provisions are recognized when the Group has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources
will be required to settle the obligation, and the amount has been reliably estimated. Provisions are not recognized for future operating losses.
Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current
market assessments of the time value of money and the risks specific to the obligation. The increase in the provisions due to passage of time is recognized
as interest expense.
(r) Equity
The capital stock includes the effect of restatement through December 31, 1997, determined by applying a general price index that reflected changes in
general purchasing power from the dates capital was contributed until December 31, 1997, the date through which the Mexican economy was considered
hyperinflationary under the guidelines of IFRS Accounting Standards.
Where any company in the Group purchases shares of the Company’s capital stock (shares repurchased), the consideration paid, including any directly
attributable incremental costs is deducted from equity attributable to stockholders of the Company until the shares are cancelled, reissued, or sold. Where
such shares repurchased are subsequently reissued or sold, any consideration received, net of any directly attributable incremental transaction costs, is
included in equity attributable to stockholders of the Company.
(s) Revenue Recognition and Contract Costs
Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for services provided. The Group
recognizes revenue when the amount of revenue can be reliably measured; when it is probable that future economic benefits will flow to the entity; and
when specific criteria have been met for each of the Group’s activities, as described below. The Group bases its estimate of return on historical results,
taking into consideration the type of customer, the type of transaction and the specifics of each arrangement.
The Group derives the majority of its revenues from telecommunications-related business activities, primarily from its Cable and Sky segment operations
(see Notes 3 and 26). Revenues are recognized when the service is provided, and collection is probable. A summary of revenue recognition policies by
significant activity is as follows:
●
Cable television, internet and telephone subscription, and pay-per-view and installation fees are recognized in the period in which the services are
rendered.
●
Revenues from other telecommunications and data services are recognized in the period in which these services are provided. Other
telecommunications services include long distance and local telephony, as well as leasing and maintenance of telecommunications facilities.
●
In respect of revenues from multiple products or services, the Group evaluates whether it has fair value evidence for each deliverable in the transaction.
The Group sells cable television, internet, and telephone subscription to subscribers in a bundled package at a rate lower than if the subscriber
purchases each product on an individual basis.
●
Sky program service revenues, including advances from customers for future direct-to-home (“DTH”) program services, are recognized at the time the
service is provided.
●
Revenues from magazine subscriptions are initially deferred and recognized proportionately as products are delivered to subscribers. Revenues from
the sales of magazines are recognized on the date of circulation of delivered merchandise, net of a provision for estimated returns. These revenues were
discontinued on January 31, 2024, in connection with the Spun-off Businesses (see Notes 3 and 26).
●
Revenues from publishing distribution are recognized upon distribution of the products. These revenues were discontinued on January 31, 2024, in
connection with the Spun-off Businesses (see Notes 3 and 26).
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F-23
●
Revenues from attendance to soccer games, including revenues from advance ticket sales for soccer games and other promotional events, are
recognized on the date of the relevant event. These revenues were discontinued on January 31, 2024, in connection with the Spun-off Businesses (see
Notes 3 and 26).
●
Gaming revenues consist of the net win from gaming activities, which is the difference between amounts wagered and amounts paid to winning
patrons and are recognized at the time of such net win. These revenues were discontinued on January 31, 2024, in connection with the Spun-off
Businesses (see Notes 3 and 26).
Contract Costs
Incremental costs for obtaining contracts with customers in the Cable and Sky segments, primarily commissions, are recognized as contract costs (assets) in
the Group’s consolidated statement of financial position and amortized in the expected life of contracts with customers.
The Group has recognized assets from incremental costs of obtaining contracts with customers, primarily commissions, which were classified as current
and non-current assets in its consolidated financial statements as of December 31, 2024 and 2023, as follows:
Cable
Sky
Total
Contract costs:
At January 1, 2024
Ps.
3,815,535 Ps.
1,514,651 Ps.
5,330,186
Additions
1,345,315
69,284
1,414,599
Amortization
(1,258,992)
(421,504)
(1,680,496)
Impairment
—
(1,093,147)
(1,093,147)
Total contract costs at December 31, 2024
3,901,858
69,284
3,971,142
Less:
Current Contract Costs
1,437,161
45,861
1,483,022
Total non-current contract costs
Ps.
2,464,697 Ps.
23,423 Ps.
2,488,120
Cable
Sky
Total
Contract costs:
At January 1, 2023
Ps.
3,297,436
Ps.
2,020,790
Ps.
5,318,226
Additions
1,758,769
408,555
2,167,324
Amount recognized in income
(1,240,670)
(914,694)
(2,155,364)
Total contract costs at December 31, 2023
3,815,535
1,514,651
5,330,186
Less:
Current Contract Costs
1,295,696
715,816
2,011,512
Total non-current contract costs
Ps.
2,519,839
Ps.
798,835
Ps.
3,318,674
Amortization of contract costs is based upon the carrying amount of the assets in use and is computed using the straight-line method over estimated useful
lives that range between 1.5 and 5 years.
(t) Interest Income
Interest income is recognized using the effective interest method. When a loan and receivable is impaired, the Group reduces the carrying amount to its
recoverable amount, being the estimated future cash flows discounted at the original effective interest rate of the instrument and continues unwinding the
discount as interest income. Interest income on impaired loans and receivables is recognized using the original effective interest rate.
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F-24
(u) Employee Benefits
Pension and Seniority Premium Obligations
Plans exist for pensions and seniority premiums (post-employment benefits), for most of the Group’s employees, and are partially funded through
irrevocable trusts. Increases or decreases in the consolidated liability for post-employment benefits are based upon actuarial calculations. Contributions to
the trusts are determined at discretion of management based on actuarial estimates of funding requirements. Payments of post-employment benefits are
made by the trust administrators. The defined benefit obligation is calculated annually using the projected unit credit method. The present value of the
defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of government bonds that are denominated in
the currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of the related pension obligation.
Remeasurement of post-employment benefit obligations related to experience adjustments and changes in actuarial assumptions of post-employment
benefits are recognized in the period in which they are incurred as part of other comprehensive income or loss in consolidated equity.
Profit Sharing
The employees’ profit sharing required to be paid under certain circumstances in Mexico, is recognized as a direct benefit to employees in the consolidated
statements of income in the period in which it is incurred. The profit sharing is paid to employees on a yearly basis and calculated by the Mexican
companies in the Group at the statutory rate of 10% on their respective adjusted income in accordance with the Federal Labor Law. Beginning in 2021,
there is a cap on the payment of profit sharing of up to three months of salary per employee (see Note 21).
Termination Benefits
Termination benefits, which mainly represent severance payments by law, are recorded in the consolidated statement of income. The Group recognizes
termination benefits at the earlier of the following dates: (a) when the Group can no longer withdraw the offer of those benefits; and (b) when the entity
recognizes costs for a restructuring plan that involves the payment of termination benefits.
(v) Income Taxes
The income taxes for the period comprise current and deferred income taxes. Income taxes are recognized in the consolidated statement of income, except
to the extent that they relate to items recognized in other comprehensive income or directly in equity. In this case, the income taxes are recognized in other
comprehensive income.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the statement of financial position date in the
countries where the Company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns
and establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.
Deferred income taxes are recognized on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the
financial statements of the consolidated companies in the Group. However, deferred income tax liabilities are not recognized if they arise from the initial
recognition of goodwill; deferred income taxes are not accounted for if they arise from initial recognition of an asset or liability in a transaction (other than
in a business combination) that at the time of the transaction affects neither accounting nor taxable income or loss. Deferred income taxes are determined
using tax rates (and laws) that have been enacted or substantively enacted by the statement of financial position date and are expected to apply when the
related deferred income tax asset is recovered, or the deferred income tax liability is settled.
Deferred income tax assets are recognized only to the extent that it is probable that future taxable profit will be available against which the temporary
differences and tax loss carryforwards can be utilized. For this purpose, the Group takes into consideration all available positive and negative evidence,
including factors such as market conditions, industry analysis, projected taxable income, carryforward periods, current tax structure, potential changes or
adjustments in tax structure, and future reversals of existing temporary differences.
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F-25
Deferred income tax liabilities are provided on taxable temporary differences associated with investments in subsidiaries, joint ventures and associates,
except for deferred income tax liabilities where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the
temporary difference will not reverse in the foreseeable future. Deferred income tax assets are provided on deductible temporary differences associated
with investments in subsidiaries, joint ventures and associates, to the extent that it is probable that there will be sufficient taxable income against which to
utilize the benefit of the temporary difference, and it is expected to reverse in the foreseeable future.
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and
when the deferred income tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different
taxable entities where there is an intention to settle the balances on a net basis.
(w) Derivative Financial Instruments
The Group recognizes derivative financial instruments as either assets or liabilities in the consolidated statements of financial position and measures such
instruments at fair value. The accounting for changes in the fair value of a derivative financial instrument depends on the intended use of the derivative
financial instrument and the resulting designation. For a derivative financial instrument designated as a cash flow hedge, the effective portion of such
derivative’s gain or loss is initially reported as a component of other comprehensive income or loss and subsequently reclassified into income or loss when
the hedged exposure affects income. The ineffective portion of the gain or loss is reported in income immediately. For a derivative financial instrument
designated as a fair value hedge, the gain or loss is recognized in income or loss in the period of change together with the offsetting loss or gain on the
hedged item attributed to the risk being hedged. When a hedging instrument expires or is sold, terminated or exercised, the cumulative gain or loss on the
hedging instrument that has been recognized in other comprehensive income remains in equity until the forecast transaction occurs. When a forecast
transaction is no longer expected to occur, the cumulative gain or loss that was reported in equity is immediately reclassified to income or loss. For
derivative financial instruments that are not designated as accounting hedges, changes in fair value are recognized in income or loss in the period of change.
During the years ended December 31, 2024, 2023 and 2022, certain derivative financial instruments qualified for hedge accounting (see Note 15).
(x) Comprehensive Income
Comprehensive income for the period includes the net income for the period presented in the consolidated statement of income plus other comprehensive
income for the period reflected in the consolidated statement of comprehensive income.
(y) Share-based Payment Agreements
Key officers and employees of certain subsidiaries of the Company have entered into agreements for the conditional sale of Company’s shares under the
Company’s Long-Term Retention Plan (“LTRP”). The share-based compensation expense is measured at fair value at the date the equity benefits are
conditionally sold to these officers and employees and recognized as a charge to consolidated income or loss (administrative expense) over the vesting
period. The Group recognized a share-based compensation expense of Ps.488,832, Ps.748,500 and Ps.968,628 for the years ended December 31, 2024,
2023 and 2022, respectively, was credited in consolidated stockholders’ equity for each of those years, respectively (see Note 17).
(z) New and Amended IFRS Accounting Standards
The Group adopted some amendments and improvements to certain IFRS Accounting Standards that became effective in 2024, 2023 and 2022, which did
not have any significant impact on the Group’s consolidated financial statements.
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F-26
Below is a list of the new and amended IFRS Accounting Standards that have been issued by the IASB and will be effective for annual reporting periods
beginning on January 1, 2025, 2026 and 2027.
Effective for Annual
Reporting
Periods Beginning
New or Amended IFRS Accounting Standard
Title of the IFRS Accounting Standard
On or After
Amendments to IAS 21 (1)
Lack of Exchangeability
January 1, 2025
Annual Improvements (1)
Annual Improvements to IFRS Accounting Standards – Volume 11
January 1, 2026
Amendments to IFRS 9 and IFRS 7 (1)
Amendments to the classification and Measurement of Financial Instruments
January 1, 2026
IFRS 18
Presentation and Disclosure in Financial Statements
January 1, 2027
IFRS 19 (1)
Subsidiaries without Public Accountability: Disclosures
January 1, 2027 (2)
Amendments to IFRS 10 and IAS 28
Sale or Contribution of Assets between an Investor and its Associate or Joint
Venture
Postponed
Amendments to IFRS 9 and IFRS 7 (1)
Contracts Referencing Nature-dependent Electricity
January 1, 2026
(1)
This new or amended IFRS Accounting Standard is not expected to have a significant impact on the Group’s consolidated financial statements.
(2)
An entity may elect to apply this IFRS Accounting Standard for reporting periods beginning on or after this date.
Amendments to IAS 21 Lack of Exchangeability, were issued by the IASB in August 2023, to require companies to provide more useful information in
their financial statements when a currency cannot be exchanged into another currency. These amendments will require companies to apply a consistent
approach in assessing whether a currency can be exchanged into another currency and, when it cannot, in determining the exchange rate to use and the
disclosures to provide. The amendments, which affect IAS 21 The Effects of Changes in Foreign Exchange Rates, will become effective for annual
reporting periods beginning on or after January 1, 2025, with early application permitted.
Annual Improvements to IFRS Accounting Standards – Volume 11, were issued by the IASB in July 2024. These amendments include clarifications,
simplifications, corrections and changes aimed at improving the consistency of several IFRS Accounting Standards. These amendments are effective for
annual periods beginning on or after 1 January 2026, with early application permitted. The following table lists the amended IFRS Accounting Standards or
guidance and the subject of the amendments.
Amended IFRS Accounting Standard or Guidance
Subject of Amendments
IFRS 1 First-time Adoption of International Financial Reporting Standards
Hedge accounting by a first-time adopter
IFRS 7 Financial Instruments: Disclosures
Gain or loss on derecognition
Guidance on implementing IFRS 7 Financial Instruments: Disclosures
Introduction - Disclosure of deferred difference between fair value and
transaction price - Credit risk disclosures
IFRS 9 Financial Instruments
Derecognition of lease liabilities - Transaction price
IFRS 10 Consolidated Financial Statements
Determination of a ‘de facto agent’
IAS 7 Statement of Cash Flows
Cost method
Amendments to IFRS 9 and IFRS 7 Amendments to the Classification and Measurement of Financial Instruments, were issued by the IASB in May 2024,
to address the classification of financial assets with environmental, social and corporate governance (ESG) and similar features, by clarifying how the
contractual cash flows on loans with ESG-linked features should be assessed. These amendments also address the settlement of liabilities through
electronic payment systems, by clarifying the date on which a financial asset or financial liability is derecognized and developing an accounting policy
option to allow a company to derecognize a financial liability before it delivers cash on the settlement date if specified criteria are met. The amendments
are effective for annual reporting periods beginning on or after 1 January 2026, with early application permitted.
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F-27
IFRS 18 Presentation and Disclosure in Financial Statements (“IFRS 18”), was issued by the IASB in April 2024, introducing new requirements to
improve comparability in the statement of income; enhance transparency of management-defined performance measures; and provide more useful grouping
of information in the financial statements. IFRS 18 replaces IAS 1 Presentation of Financial Statements (“IAS 1”) and carries forward many requirements
from IAS 1 unchanged. IFRS 18 introduces three defined categories for income and expenses: operating, investing and financing, to improve the structure
of the statement of income, and requires all companies to provide new defined subtotals, including operating profit. IFRS also requires companies to
disclose explanations of those company-specific measures that are related to the statement of income, referred to as management-defined performance
measures. IFRS 18 sets out enhanced guidance on how to organize information and whether to provide it in the primary financial statements or in the notes.
IFRS 18 is effective for annual reporting periods beginning on or after January 1, 2027, with early application permitted. Upon adoption, IFRS 18 should
be applied on a fully retrospective basis, requiring the restatement of the comparative periods presented in an entity’s financial statements. The Group’s
management is assessing the impact of adoption of IFRS 18 in its consolidated financial statements and financial reporting in connection with the new
presentation guidelines and disclosures required by this IFRS Accounting Standard.
IFRS 19 Subsidiaries without Public Accountability: Disclosures (“IFRS 19”), was issued by the IASB in May 2024, to permit eligible subsidiaries to use
IFRS Accounting Standards with reduced disclosures. Applying IFRS 19 will reduce the costs of preparing subsidiaries’ financial statements while
maintaining the usefulness of the information for users of their financial statements. When a parent company prepares consolidated financial statements
that comply with IFRS Accounting Standards, its subsidiaries are required to report to the parent using IFRS Accounting Standards. However, for their own
financial statements, subsidiaries are permitted to use IFRS Accounting Standards, the IFRS for SMEs Accounting Standard or national accounting
standards. Subsidiaries are eligible to apply IFRS 19 if they do not have public accountability, and their parent company applies IFRS Accounting
Standards in their consolidated financial statements. A subsidiary does not have public accountability if it does not have equities or debt listed on a stock
exchange and does not hold assets in a fiduciary capacity for a broad group of outsiders. An entity may elect to apply this Standard for reporting periods
beginning on or after 1 January 2027. Earlier application is permitted.
Amendments to IFRS 10 and IAS 28 Sale or Contribution of Assets between an Investor and its Associate or Joint Venture, were issued by the IASB in
September 2014, and addressed and acknowledged an inconsistency between the requirements in IFRS 10 Consolidated Financial Statements and those in
IAS 28 Investments in Associates and Joint Ventures, in dealing with the sale or contribution of assets between an investor and its associate or joint venture.
The main consequence of the amendments is that a full gain or loss is recognized when a transaction involves a business (whether it is housed in a
subsidiary or not). A partial gain or loss is recognized when a transaction involves assets that do not constitute a business, even if these assets are housed in
a subsidiary. In December 2015, the IASB decided to postpone the effective date of these amendments indefinitely. Entities are required to apply these
amendments prospectively to the sale or contribution of assets occurring in annual periods beginning on or after a date to be determined by the IASB.
Earlier application is permitted. If an entity applies these amendments earlier, it shall disclose that fact. These amendments became applicable to the
Group’s consolidated financial statements in connection with the closing of the TelevisaUnivision Transaction in the first quarter of 2022 (see Note 3). As
permitted, the Group applied these amendments in 2022 and disclosed this fact in its consolidated financial statements.
Amendments to IFRS 9 and IFRS 7 Contracts Referencing Nature-dependent Electricity, were issued by the IASB in December 2024, to help companies
better report the financial effects of nature-dependent electricity contracts, which are often structured as power purchase agreements. Nature-dependent
electricity contracts help companies to secure their electricity supply from sources such as wind and solar power. The amount of electricity generated under
these contracts can vary based on uncontrollable factors such as weather conditions. Current accounting requirements may not adequately capture how
these contracts affect a company’s performance. These amendments are required to be applied for annual reporting periods beginning on or after 1 January
2026. Companies can apply the amendments earlier.
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F-28
3.
TelevisaUnivision Transaction, Spun-off Businesses, and Acquisition of Non-controlling Interest in Sky
TelevisaUnivision Transaction
On April 13, 2021, the Company and Univision Holdings, Inc. (“UHI”) announced a transaction agreement (the “Transaction Agreement”) in which the
Group’s content and media assets would be combined with Univision Holdings II, Inc. (“UH II,” the successor company of UHI), and the Group would
continue to participate in UH II, with an equity stake of approximately 45% following the closing of the transaction. The Group would also retain
ownership of its Cable, Sky and Other Businesses segments, as well as the main real estate associated with the production facilities, the broadcasting
concessions and transmission infrastructure in Mexico. The Group would contribute to UH II the net assets specified in the Transaction Agreement,
including, subject to certain exceptions, its Content business, for a total value of U.S.$4,500 million, comprised of U.S.$3,000 million in cash, U.S.$750
million in common stock of UH II and U.S.$750 million in preferred stock of UH II, with an annual dividend of 5.5%. In connection with this transaction,
UH II would receive all assets, intellectual property and library related to the News division of the Group’s Content business but would outsource
production of news content for Mexico to a company owned by the Azcárraga family. The combination was approved by each of the Board of Directors of
the Company, the Board of Directors of UHI, and the Stockholders of the Company in the first half of 2021. The transaction was subject to customary
closing conditions, including receipt of regulatory approvals primarily in the United States and Mexico, among others. On September 14, 2021, the IFT
announced its approval of this transaction. On January 24, 2022, the Company and UH II announced that all required regulatory approvals for the
transaction had been received. On January 31, 2022, the Group, TelevisaUnivision (formerly known as UH II) and other parties closed the
TelevisaUnivision Transaction, and the Group recognized an income from disposition of discontinued operations in the aggregate amount of Ps.93,066,741
in its consolidated statement of income or loss for the year ended December 31, 2022, comprising a consideration in cash received from TelevisaUnivision
in the aggregate amount of U.S.$2,971.3 million (Ps.61,214,741), a consideration in common and preferred stock of TelevisaUnivision, in the aggregate
amount of U.S.$1,500.0 million (Ps.30,912,000), and a cash consideration received from Tritón Comunicaciones, S.A. de C.V. (“Tritón”) a company owned
by the Azcárraga family, in the amount of Ps.940,000, related to the rights for the production of news content for Mexico. Also, in connection with the
TelevisaUnivision Transaction, the Group (i) began to present and disclose the results of operations of its disposed businesses as discontinued operations in
its consolidated statements of income or loss for any comparative prior period and for the month ended January 31, 2022; (ii) recognized a net gain (loss)
on disposition of discontinued operations of Ps.56,065,530 and Ps.(1,943,647), for the years ended December 31, 2022 and 2021, respectively; and (iii)
recognized as deferred revenue a prepayment made by TelevisaUnivision in the aggregate amount of U.S.$276.2 million (Ps.5,729,377), for the use of
concession rights owned by the Group, which was classified as current and non-current liabilities in the Group’s consolidated statement of financial
position (see Notes 2, 10, 20, 26 and 28).
Spun-off Businesses
On October 27, 2022, the Board of Directors of the Company approved a proposal to separate from the Group through a spin-off of certain businesses that
were part of its former Other Businesses segment (the “Spin-off”), including its fútbol operations, the Azteca Stadium, the gaming operations, and
publishing and distribution of magazines, as well as certain related assets and liabilities (“Spun-off Businesses”), which was approved by the Company’s
stockholders on April 26, 2023. This proposal was carried out through the Spin-off on January 31, 2024, by creating a new controlling entity of the Spun-
off Businesses, Ollamani, S.A.B. (“Ollamani”), which at the time of the Spin-off had the same shareholding structure as the Company. The Group and
Ollamani obtained all required corporate and regulatory authorizations for the Spin-off, and the shares of Ollamani began trading separately from the
Company on the Mexican Stock Exchange on February 20, 2024, in the form of CPOs, under the ticker symbol “AGUILAS CPO”. Beginning in the first
quarter of 2024, the Group began presenting the results of operations of the Spun-off Businesses as discontinued operations in its consolidated statements
of income for the period of one month ended January 31, 2024, and for any comparative periods presented (see Notes 17, 26 and 28).
The carrying amount of consolidated net assets of the Group’s Spun-off Businesses as of December 31, 2023, represented 4.5% of the Group’s consolidated
equity as of that date. The segment revenues and segment income of the Group’s Spun-off Businesses for the year ended December 31, 2023, represented
8.3% and 4.7%, respectively, of the Group’s total segment revenues and total segment income, respectively, for that year.
Acquisition of Non-controlling Interest in Sky
In April 2024, the Group reached an agreement with AT&T Inc. (“AT&T”) for the acquisition of its non-controlling interest in the Group’s Sky segment, to
become owner of 100% of the equity stock of Sky. In June 2024, the Group received approval from the IFT for this transaction and acquired the 41.3%
interest in Sky previously held by AT&T. As part of this agreement, the transaction price will be paid by the Group in 2027 and 2028 (see Notes 2 (b), and
19).
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F-29
4.
Financial Risk Management
(a) Market Risk
Market risk is the exposure to an adverse change in the value of financial instruments caused by market factors including changes in equity prices, interest
rates, foreign currency exchange rates, commodity prices and inflation rates.
The Group is exposed to market risks arising from changes in equity prices, interest rates, foreign currency exchange rates and inflation rates, in both the
Mexican and U.S. markets. Market risk management activities are monitored by the Investments, Risk Management and Treasury Committee on a quarterly
basis.
(i) Foreign Exchange Risk
The Group is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the U.S. dollar and in those subsidiaries
with functional currency other than the Mexican peso. Foreign exchange risk arises from future commercial transactions, recognized assets and liabilities
and net investments in foreign operations.
Foreign currency exchange risk is monitored by assessing the net monetary liability position in U.S. dollars and the forecasted cash flow needs for
anticipated U.S. dollar investments and servicing the Group’s U.S. dollar-denominated debt.
Management has set up a policy to require Group companies to manage their foreign exchange risk against their functional currency. To manage their
foreign exchange risk arising from future commercial transactions and recognized assets and liabilities, entities in the Group use forward contracts. In
compliance with the procedures and controls established by the Risk Management Committee, in 2024 and 2023, the Group entered into certain derivative
transactions with certain financial institutions in order to manage its exposure to market risks resulting from changes in interest rates and foreign currency
exchange rates. The objective in managing foreign currency fluctuations is to reduce earnings and cash flow volatility.
Foreign Currency Position
The foreign currency position of monetary items of the Group at December 31, 2024, was as follows:
Foreign
Currency
Amounts
Year-End
(Thousands)
Exchange Rate
Mexican Pesos
Assets:
U.S. dollars
1,318,668
Ps.
20.8691
Ps.
27,519,414
Euros
32,919
21.6510
712,729
Swiss francs
219
23.0485
5,048
Other currencies
—
—
15
Liabilities:
U.S. dollars (1)
3,942,186
Ps.
20.8691
Ps.
82,269,874
Euros
3,626
21.6510
78,507
Swiss francs
41
23.0485
945
Other currencies
—
—
80
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F-30
The foreign currency position of monetary items of the Group at December 31, 2023, was as follows:
Foreign
Currency
Amounts
Year-End
(Thousands)
Exchange Rate
Mexican Pesos
Assets:
U.S. dollars
1,367,231
Ps.
16.9325
Ps.
23,150,639
Euros
31,976
18.7219
598,651
Swiss francs
1,891
20.1657
38,133
Other currencies
—
—
3,383
Liabilities:
U.S. dollars (1)
3,996,913
Ps.
16.9325
Ps.
67,677,729
Euros
18,087
18.7219
338,623
Swiss francs
142
20.1657
2,864
Other currencies
—
—
854
(1)
As of December 31, 2024 and 2023, monetary liabilities include U.S.$2,108.7 million (Ps.44,005,755) and U.S.$2,539.5 million (Ps.43,000,795),
respectively, related to long-term debt designated as a hedging instrument of the Group’s investments in TelevisaUnivision and Open-Ended Fund (see
Note 14).
As of March 28, 2025, the exchange rate was Ps.20.4089 per U.S. dollar, which represents the interbank free market exchange rate on that date as reported
by Banco Citi México, S.A.
The Group is subject to the risk of foreign currency exchange rate fluctuations, resulting primarily from the net monetary position in U.S. dollars and U.S.
dollar equivalent amounts of the Group’s Mexican operations, as follows (in millions of U.S. dollars):
December 31,
2024
2023
U.S. dollar-denominated and U.S. dollar-equivalent monetary assets, primarily cash and cash equivalents,
and non-current investments in financial instruments (1)
U.S.$
1,352.0
U.S.$
1,398.5
U.S. dollar-denominated and U.S. dollar-equivalent monetary liabilities, primarily trade accounts payable,
Senior debt securities, lease liabilities, and other liabilities (2) (3)
(3,942.2)
(4,010.2)
Net liability position
U.S.$
(2,590.2)
U.S.$
(2,611.7)
(1)
As of December 31, 2024 and 2023, this line includes U.S. dollar equivalent amounts of U.S.$33.4 million and U.S.$36.0 million, respectively, related
to other foreign currencies, primarily Euros.
(2)
As of December 31, 2024 and 2023, this line includes U.S. dollar equivalent amounts of U.S.$0.1 million and U.S.$20.1 million, respectively, related
to other foreign currencies, primarily Euros.
(3)
As of December 31, 2024 and 2023, monetary liabilities include U.S.$2,108.7 million (Ps.44,005,755) and U.S.$2,539.5 million (Ps.43,000,795),
respectively, related to long-term debt designated as a hedging instrument of the Group’s investments in TelevisaUnivision and the investment in
Open-Ended Fund (see Note 14).
At December 31, 2024, a hypothetical 10% appreciation/depreciation in the U.S. dollar to Mexican peso exchange rate would result in a foreign exchange
gain/loss, net of hedge, of Ps.1,004,917 in the consolidated statement of income. At December 31, 2023, a hypothetical 10% appreciation/depreciation in
the U.S. dollar to Mexican peso exchange rate would result in a foreign exchange gain/loss, net of hedge, of Ps.122,159 in the consolidated statement of
income.
(ii) Cash Flow Interest Rate Risk
The Group monitors the exposure to interest rate risk by: (i) evaluating differences between interest rates on its outstanding debt and short-term investments
and market interest rates on similar financial instruments; (ii) reviewing its cash flow needs and financial ratios (indebtedness and interest coverage);
(iii) assessing current and forecasted trends in the relevant markets; and (iv) evaluating peer Group and industry practices. This approach allows the Group
to determine the interest rate “mix” between variable and fixed rate debt.
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F-31
The Group’s interest rate risk arises from long-term debt. Debt issued at variable rates expose the Group to cash flow interest rate risk, which is partially
offset by cash and cash equivalents held at variable rates. Debt issued at fixed rates expose the Group to fair value interest rate risk. During recent years, the
Group has maintained most of its debt in fixed rate instruments (see Note 14).
Based on various scenarios, the Group manages its cash flow interest rate risk by using cross-currency interest rate swaps, exchange rate agreements and
floating-to-fixed interest rate swaps. Cross-currency interest rate swap agreements allow the Group to hedge against Mexican peso depreciation on the
interest payments for medium-term periods. Interest rate swaps have the economic effect of converting borrowings from floating rates to fixed rates.
Sensitivity and Fair Value Analysis
The sensitivity analyses that follow are intended to present the hypothetical changes in fair value or loss in earnings due to changes in interest rates,
inflation rates, foreign currency exchange rates and debt and equity market prices and the effect that they would have had on the Group’s financial
instruments at December 31, 2024 and 2023. These analyses address market risk only and do not take into consideration other risks that the Group faces in
the ordinary course of business, including country risk and credit risk. The hypothetical changes reflect management’s view of changes that are reasonably
possible over a one-year period. For purposes of the following sensitivity analyses, the Group has made assumptions of a hypothetical change in fair value
of 10% for expected near-term future changes in the United States interest rates, Mexican interest rates, inflation rates and Mexican peso to U.S. dollar
exchange rate. The results of the analyses do not purport to represent actual changes in fair value or losses in earnings that the Group will incur.
Difference between
Fair Value and
Carrying Amount
Assuming a
Difference between
Hypothetical
Fair Value and
10% Increase in
December 31, 2024
Carrying Amount
Fair Value
Carrying Amount
Fair Value
Assets:
Long-term loan and interest receivable from GTAC
Ps.
1,024,371
Ps.
1,031,497
Ps.
7,126
Ps.
110,276
Open-Ended Fund
784,769
784,769
—
78,477
Publicly traded equity instruments
1,709,942
1,709,942
—
170,994
Derivative financial instruments (1)
2,001,051
2,001,051
—
200,105
Liabilities(2) (3):
U.S. dollar-denominated debt:
Senior Notes due 2025
4,579,474
4,577,917
(1,557)
456,235
Senior Notes due 2026
4,328,669
4,254,172
(74,497)
350,920
Senior Notes due 2032
6,260,730
6,838,345
577,615
1,261,450
Senior Notes due 2040
12,521,460
11,389,770
(1,131,690)
7,287
Senior Notes due 2045
16,499,319
11,969,101
(4,530,218)
(3,333,308)
Senior Notes due 2046
18,355,876
15,480,061
(2,875,815)
(1,327,809)
Senior Notes due 2049
13,792,972
10,280,454
(3,512,518)
(2,484,473)
Peso-denominated debt:
Notes due 2027
4,500,000
4,252,725
(247,275)
177,998
Senior Notes due 2037
4,500,000
3,186,405
(1,313,595)
(994,955)
Senior Notes due 2043
6,225,690
3,608,472
(2,617,218)
(2,256,371)
Long-term loans payable to Mexican banks
12,650,000
12,777,242
127,242
1,404,966
Lease liabilities
5,386,639
5,454,171
67,532
612,949
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F-32
Difference between
Fair Value and
Carrying Amount
Assuming a
Difference between
Hypothetical
Fair Value and
10% Increase in
December 31, 2023
Carrying Amount
Fair Value
Carrying Amount
Fair Value
Assets:
Long-term loan and interest receivable from GTAC
Ps.
948,549
Ps.
953,423
Ps.
4,874
Ps.
100,216
Open-Ended Fund
674,451
674,451
—
—
Publicly traded equity instruments
1,912,150
1,912,150
—
—
Derivative financial instruments (1)
251,738
251,738
—
—
Liabilities(2) (3):
U.S. dollar-denominated debt:
Senior Notes due 2025
3,715,634
3,762,228
46,594
422,817
Senior Notes due 2026
3,512,139
3,465,533
(46,606)
299,947
Senior Notes due 2032
5,079,750
5,969,062
889,312
1,486,218
Senior Notes due 2040
10,159,500
10,701,611
542,111
1,612,272
Senior Notes due 2045
13,387,004
11,542,810
(1,844,194)
(689,913)
Senior Notes due 2046
14,893,353
14,913,906
20,553
1,511,944
Senior Notes due 2049
11,191,163
10,035,228
(1,155,935)
(152,412)
Peso-denominated debt:
Notes due 2027
4,500,000
4,233,150
(266,850)
156,465
Senior Notes due 2037
4,500,000
4,026,060
(473,940)
(71,334)
Senior Notes due 2043
6,225,690
4,064,130
(2,161,560)
(1,755,147)
Long-term loans payable to Mexican banks
12,650,000
12,789,686
139,686
1,418,655
Lease liabilities
7,291,550
7,334,492
42,942
776,391
(1)
Given the nature and the tenor of these derivative financial instruments, an increase of 10% in interest and/or exchange rates would not be an accurate
sensitivity analysis on the fair value of these financial instruments.
(2)
The carrying amount of debt is stated in this table at its principal amount.
(3)
The fair value of the Senior Notes and Notes issued by the Group are within Level 1 of the fair value hierarchy as there are quoted market prices for
such notes. The fair value of the lease liabilities is within Level 2 of the fair value hierarchy and has been estimated based on cash flows discounted
using an estimated weighted average cost of capital. The fair value of held-to-maturity securities are within Level 1 of the fair value hierarchy and
were based on market interest rates to the listed securities.
(iii) Price Risk
The Group is exposed to equity securities price risk because of investments held by the Group and classified in the consolidated statements of financial
position as non-current investments in financial instruments. To manage its price risk arising from investments in equity securities, the Group diversifies its
portfolio. Diversification of the portfolio is done in accordance with the limits set by the Group. The Group is not exposed to commodity price risk.
(b) Credit Risk
Credit risk is managed on a Group basis, except for credit risk relating to accounts receivable balances. Each local entity is responsible for managing and
analyzing the credit risk for each of their new clients before standard payment and delivery terms and conditions are offered. Credit risk arises from cash
and cash equivalents, derivative financial instruments and deposits with banks and financial institutions, as well as credit exposure to customers, including
outstanding receivables and committed transactions. For banks and financial institutions, only independently rated parties with a minimum rating of “AA”
in local scale for domestic institutions and “BBB” in global scale for foreign institutions are accepted. If customers are independently rated, these ratings
are used. If there is no independent rating, the Group’s risk control function assesses the credit quality of the customer, taking into account its financial
position, past experience and other factors. Individual risk limits are set based on internal or external ratings in accordance with limits set by the
Company’s management. See Note 7 for further disclosure on credit risk.
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F-33
No credit limits were exceeded during the reporting period, and management does not expect any losses from non-performance by any counterparties.
The Group historically has not realized significant credit losses arising from customers.
(c) Liquidity Risk
Cash flow forecasting is performed in the operating entities of the Group and aggregated by corporate management. Corporate management monitors
rolling forecasts of the Group’s liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on
its borrowing facilities at all times so that the Group does not breach borrowing limits or covenants (where applicable) on any of its borrowing facilities.
Such forecasting takes into consideration the Group’s debt financing plans, covenant compliance, compliance with internal statement of financial position
ratio targets and, if applicable external regulatory or legal requirements.
Surplus cash held by the operating entities over and above balance required for working capital management are transferred to the Group treasury. Group
treasury invests surplus cash in interest bearing current accounts, time deposits, money market deposits and marketable securities, choosing investments
with appropriate maturities or sufficient liquidity to provide sufficient headroom as determined by the above-mentioned forecasts. At December 31, 2024
and 2023, the Group held cash and cash equivalents of Ps.46,193,173 and Ps.32,586,352, respectively (see Note 6).
The table below analyses the Group’s non-derivative and derivative financial liabilities as well as related contractual interest on debt and lease liabilities
into relevant maturity groupings based on the remaining period at the statement of financial position date to the contractual maturity date. Derivative
financial liabilities are included in the analysis if their contractual maturities are essential for an understanding of the timing of the cash flows. The amounts
disclosed in the table below are the contractual undiscounted cash flows (except for lease liabilities that are stated at present value).
Less Than 12 Months
12-36 Months
36-60 Months
Maturities
January 1, 2025 to
January 1, 2026 to
January 1, 2028 to
Subsequent to
December 31, 2025
December 31, 2027
December 31, 2029
December 31, 2029
Total
At December 31, 2024
Debt (1)
Ps.
4,579,474
Ps.
11,478,669
Ps.
10,000,000
Ps.
78,156,047
Ps.
104,214,190
Lease liabilities
1,242,957
2,387,918
865,556
890,208
5,386,639
Trade and other liabilities
18,410,499
84,453
32,503
4,146,195
22,673,650
Interest on debt (2)
5,428,409
12,561,501
10,787,915
58,559,426
87,337,251
Interest on lease liabilities
462,912
618,152
378,067
252,519
1,711,650
Less Than 12 Months
12-36 Months
36-60 Months
Maturities
January 1, 2024 to
January 1, 2025 to
January 1, 2027 to
Subsequent to
December 31, 2024
December 31, 2026
December 31, 2028
December 31, 2028
Total
At December 31, 2023
Debt (1)
Ps.
10,000,000
Ps.
9,877,773
Ps.
4,500,000
Ps.
65,436,460
Ps.
89,814,233
Lease liabilities
1,280,932
2,551,747
1,660,370
1,798,501
7,291,550
Trade and other liabilities
20,436,012
—
—
2,604,527
23,040,539
Interest on debt (2)
4,116,602
9,358,169
7,967,272
51,916,580
73,358,623
Interest on lease liabilities
598,223
942,270
607,096
630,669
2,778,258
(1)
The amounts of debt are disclosed on a principal amount basis (see Note 14).
(2)
Interest to be paid in future years on outstanding debt as of December 31, 2024 and 2023, based on contractual interest rates and exchange rates as of
that date.
Capital Management
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order to provide returns for
stockholders and benefits for other stakeholders and to maintain an optimal capital structure in order to minimize the cost of capital.
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F-34
5.
Accounting Estimates and Assumptions
Estimates and assumptions are continually evaluated and are based on historical experience and other factors, including expectations of future events that
are believed to be reasonable under the circumstances.
The Group makes estimates and assumptions concerning the future. By definition, the resulting accounting estimates will seldom equal the related actual
results. The estimates and assumptions that have a risk of causing a material adjustment to the carrying amounts of consolidated assets and liabilities within
the next financial year are addressed below:
(a) Goodwill and Other Indefinite-lived Intangible Assets
Goodwill and other intangible assets with indefinite useful lives are reviewed for impairment at least annually. An impairment loss is recognized for the
amount by which the asset’s carrying amount exceeds its recoverable amount.
The recoverable amount of each of the CGUs has been determined based on the higher of value in use and fair value less costs to disposal calculations.
These calculations require the use of estimates, which include management’s expectations of future revenue growth, operating costs, profit margins and
operating cash flows for each CGU, long-term growth rates and discount rates based on weighted average cost of capital, among others.
During 2024, the Group recorded impairment adjustments for goodwill and intangible assets with indefinite and finite useful lives in the Group´s Sky and
Cable segments (see Notes 11, 12, 13 and 22). See Note 2 (b) and (l), for disclosure regarding concession intangible assets.
(b) Long-lived Assets
The Group presents certain long-lived assets other than goodwill and indefinite-lived intangible assets in its consolidated statement of financial position.
Long-lived assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may no longer be
recoverable. An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable
amount is the higher of an asset’s fair value less costs to sell and value in use. Recoverability is analyzed based on projected cash flows. Estimates of future
cash flows involve considerable judgment on the part of management. These estimates are based on historical data, future revenue growth, market
conditions, management plans, and assumptions regarding projected rates of inflation and currency fluctuations, among other factors. If these assumptions
were modified because of changes in economic or legal circumstances, the Group could recognize a write-off or write-down or accelerate the amortization
schedule related to the carrying amount of these assets. The Group recorded an impairment loss for the year ended December 31, 2024 (see Notes 2 (m), 13
and 22).
(c) Deferred Income Tax Assets
The Group records its deferred tax assets based on the likelihood that these assets are realized in the future. This likelihood is assessed by taking into
consideration the future taxable income. In the event the Group were to determine that it would be able to realize its deferred tax assets in the future in
excess of the net recorded amount, an adjustment to the deferred tax asset would increase income in the period such determination was made. Should the
Group determine that it would not be able to realize all or part of its net deferred tax asset in the future, an adjustment to the deferred tax asset would be
charged to income in the period such determination was made.
(d) Financial Assets Measured at Fair Value
The Group has a significant amount of financial assets that are measured at fair value on a recurring basis. The degree of management’s judgment
involved in determining the fair value of a financial asset varies depending upon the availability of quoted market prices. When observable quoted market
prices exist, that is the fair value estimate the Group uses. To the extent such quoted market prices do not exist, management uses other means to determine
fair value (see Notes 4 and 15).
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F-35
6.
Cash and Cash Equivalents
Cash and cash equivalents as of December 31, 2024 and 2023, consisted of:
2024
2023
Cash and bank accounts
Ps.
3,905,893
Ps.
2,316,842
Short-term investments (1)
42,287,280
30,269,510
Total cash and cash equivalents
Ps.
46,193,173
Ps.
32,586,352
(1) Highly liquid investments with an original maturity of three months or less at the date of acquisition.
7.
Trade Accounts Receivable, Net
Current trade accounts receivable, net as of December 31, 2024 and 2023, consisted of:
2024
2023
Trade accounts receivable
Ps.
7,854,322
Ps.
9,905,609
Allowance for expected credit losses
(1,678,503)
(1,774,151)
Ps.
6,175,819
Ps.
8,131,458
Non-current trade receivables as of December 31, 2024 and 2023, amounted to Ps.484,506 and Ps.428,701, respectively, and consisted of non-current trade
accounts receivable in our Cable Segment.
As of December 31, 2024 and 2023, the aging analysis of the current trade accounts receivable that were past due was as follows:
2024
2023
1 to 90 days
Ps.
1,615,364
Ps.
1,748,442
91 to 180 days
805,530
1,062,010
More than 180 days
1,608,244
1,593,684
As of December 31, 2024 and 2023, the carrying amounts of the Group’s trade accounts receivable denominated in currencies other than the Mexican peso
were as follows:
2024
2023
U.S. dollar
Ps.
437,959
Ps.
330,912
Other currencies
—
660
Ps.
437,959
Ps.
331,572
Changes in the allowance for expected credit losses of trade accounts receivable were as follows:
2024
2023
At January 1
Ps.
(1,774,151)
Ps.
(2,032,034)
Expected credit losses
(1,294,362)
(1,063,651)
Write-off of receivables
1,313,016
1,321,534
Spun-off Businesses
76,994
—
At December 31
Ps.
(1,678,503)
Ps.
(1,774,151)
The maximum exposure to credit risk of the trade accounts receivable as of December 31, 2024 and 2023, was the carrying amount of each class of
receivables (see Note 4).
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F-36
8.
Transmission Rights
At December 31, 2024 and 2023, transmission rights and programming consisted of:
2024
2023
Transmission rights
Ps.
1,024,985
Ps.
2,366,784
Non-current portion of:
Transmission rights
74,234
641,154
Current portion of transmission rights
Ps.
950,751
Ps.
1,725,630
Transmission rights charged to consolidated cost of revenues for the years ended December 31, 2024, 2023 and 2022, amounted to Ps.865,507,
Ps.1,372,309 and Ps.1,285,592, respectively (see Note 21).
9.
Investments in Financial Instruments
At December 31, 2024 and 2023, the Group had the following investments in financial instruments:
2024
2023
Equity instruments measured at FVOCIL:
Open-Ended Fund (1)
Ps.
784,769
Ps.
674,451
Publicly traded equity instruments (2)
1,709,942
1,912,150
Ps.
2,494,711
Ps.
2,586,601
(1)
The Group has an investment in an Open-Ended Fund that has as a primary objective to achieve capital appreciation by using a broad range of
strategies through investments in securities, including without limitation stock, debt and other financial instruments, a principal portion of which are
considered as Level 1 financial instruments, in telecom, media and other sectors across global markets, including Latin America and other emerging
markets. Shares may be redeemed on a quarterly basis at the Net Asset Value (“NAV”) per share as of such redemption date. The fair value of this fund
is determined by using the NAV per share. The NAV per share is calculated by determining the value of the fund assets, all of which are measured at
fair value, and subtracting all of the fund liabilities and dividing the result by the total number of issued shares.
(2)
The fair value of publicly traded equity instruments is determined by using quoted market prices at the measurement date.
A roll forward of investments in financial assets at FVOCIL for the years ended December 31, 2024 and 2023 is presented as follows:
Publicly Traded
Open-Ended
Equity
Fund (1)
Instruments
Total
At January 1, 2024
Ps.
674,451
Ps.
1,912,150
Ps.
2,586,601
Change in fair value in other comprehensive income (loss)
110,318
(202,208)
(91,890)
At December 31, 2024
Ps.
784,769
Ps.
1,709,942
Ps.
2,494,711
Publicly Traded
Open-Ended
Equity
Fund (1)
Instruments
Total
At January 1, 2023
Ps.
773,209
Ps.
2,611,053
Ps.
3,384,262
Change in fair value in other comprehensive loss
(98,758)
(698,903)
(797,661)
At December 31, 2023
Ps.
674,451
Ps.
1,912,150
Ps.
2,586,601
(1)
The foreign exchange gain or loss derived from the investment in the Open-Ended Fund for the years ended December 31, 2024 and 2023,
respectively, was hedged by a foreign exchange loss or gain derived from Senior Notes of the Company designated as hedging instruments for the
years ended December 31, 2024 and 2023, respectively, in the amount of Ps.176,416 and Ps.98,017, respectively (see Notes 14 and 23).
The maximum exposure to credit risk of investments in financial instruments as of December 31, 2024 and 2023, was the carrying amounts of the
financial assets (see Note 4).
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F-37
10. Investments in Associates and Joint Ventures
At December 31, 2024 and 2023, the Group had the following investments in associates and joint ventures accounted for by the equity method:
Ownership as of
December 31,
2024
2023
2024
2023
Associates:
TelevisaUnivision and subsidiaries
43.0 %
43.7 % Ps.
43,220,986
Ps.
42,326,344
Other
63,658
50,277
Joint ventures:
Grupo de Telecomunicaciones de Alta Capacidad, S.A.P.I. de C.V. and subsidiaries
(collectively “GTAC”) (1)
33.3 %
33.3 %
952,721
844,728
Periódico Digital Sendero, S.A.P.I. de C.V. and subsidiary (collectively, “PDS”) (2)
50.0 %
50.0 %
199,332
206,289
Ps.
44,436,697
Ps.
43,427,638
(1)
GTAC was granted a 20-year contract for the lease of a pair of dark fiber wires held by the Mexican Federal Electricity Commission and a concession
to operate a public telecommunications network in Mexico with an expiration date in 2030. GTAC is a joint venture in which a subsidiary of the
Company, a subsidiary of Grupo de Telecomunicaciones Mexicanas, S.A. de C.V. and a subsidiary of Megacable, S.A. de C.V. have an equal equity
participation of 33.3%. A subsidiary of the Company entered into long-term loans to provide financing to GTAC for an aggregate principal amount of
Ps.1,527,898, with an annual interest of the Mexican Interbank Interest Rate (“Tasa de Interés Interbancaria de Equilibrio” or “TIIE”) plus 200 basis
points computed on a monthly basis and payable on an annual basis or at dates agreed by the parties. Under the terms of these long-term loans,
principal amounts can be prepaid at dates agreed by the parties before their maturities between 2025 and 2034. During the years ended December 31,
2024 and 2023, GTAC paid principal and interest to the Group in connection with these long-term loans in the aggregate principal amount of
Ps.183,031 and Ps.178,914, respectively. The net investment in GTAC as of December 31, 2024 and 2023, included amounts receivable in connection
with these long-term loans to GTAC in the aggregate amount of Ps.1,024,371 and Ps.948,549, respectively. These amounts receivable are in substance
a part of the Group’s net investment in this investee (see Note 15).
(2)
The Group accounts for its investment in PDS under the equity method, due to its 50% interest in this joint venture. As of December 31, 2024 and
2023, the Group’s investment in PDS included intangible assets and goodwill in the aggregate amount of Ps.113,837.
TelevisaUnivision
The Group accounts for its investment in common stock of TelevisaUnivision, the parent company of Univision Communications Inc. (“Univision”), under
the equity method due to the Group’s ability to exercise significant influence, as defined under IFRS Accounting Standards, over TelevisaUnivision
operations. The Group has the ability to exercise significant influence over the operating and financial policies of TelevisaUnivision because (i) it owned
9,290,999 Class A Common Stock shares and 750,000 Series B Preferred Stock shares of TelevisaUnivision as of December 31, 2024 and 2023,
representing 43.0% and 43.7% of the outstanding common and preferred shares of TelevisaUnivision on an as-converted basis (excluding unvested and/or
unsettled stock, restricted stock units and options of TelevisaUnivision), respectively, and 44.0% and 44.4% of the outstanding voting common shares of
TelevisaUnivision, respectively; and (ii) it has designated three members of the Board of Directors of TelevisaUnivision, one of which serves as the
Chairman. The Chairman does not presently have a tie-breaking vote or other similar power in connection with any decisions of the Board. The governing
documents of TelevisaUnivision provide for an 11-member Board of Directors; however, the Board of Directors currently consists of nine members, and
the Group has the right to appoint two additional members.
The Series B Preferred Stock shares of TelevisaUnivision, with an annual preferred dividend of 5.5% payable on a quarterly basis, are entitled or permitted
to vote on any matter required or permitted to be voted upon by the stockholders of TelevisaUnivision. The investment in Series B Preferred Stock shares
of TelevisaUnivision has been classified by the Group as investments in associates and joint ventures because this investment has in substance potential
voting rights and gives access to the returns associated with an ownership in TelevisaUnivision. In connection with this investment, the Group received
from TelevisaUnivision a preferred dividend in cash in the aggregate amount of U.S.$41.3 million (Ps.777,838), U.S.$41.3 million (Ps.716,905) and
U.S.$37.8 million (Ps.752,556) for the years ended December 31, 2024, 2023 and 2022, respectively, which was accounted for in share of income or loss of
associates in the Group’s consolidated statement of income or loss for those years.
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F-38
In conjunction with the TelevisaUnivision Transaction, and other observable indications that the value of the Group’s net investment in TelevisaUnivision
increased significantly during 2022 (including internal valuations of the recoverable amount of TelevisaUnivision), the Group recognized the reversal of a
remaining impairment loss related to its net investment in shares of TelevisaUnivison, in the amount of U.S.$29.5 million (Ps.593,838) in share of income
or loss of associates and joint ventures in the Group’s consolidated statement of income or loss for the year ended December 31, 2022.
The Group recognized a share in loss of TelevisaUnivision for the years ended December 31, 2024, 2023 and 2022, primarily in connection with
impairment adjustments for goodwill and indefinite-lived intangible assets recognized by TelevisaUnivision in the fourth quarter of 2024, 2023 and 2022
(see Notes 2 (a), 3, 20, 23 and 28).
The Group recognized a dilution loss in its investment in capital stock of TelevisaUnivision for the years ended December 31, 2024 and 2023, resulting
from a decrease in its share in TelevisaUnivision from 43.7% to 43.0%, and from 44.4% to 43.7%, respectively, on an as-converted basis (excluding
unvested and/or unsettled stock, restricted stock units and options of TelevisaUnivision).
A roll forward of investments in associates and joint ventures for the years ended December 31, 2024 and 2023, is presented as follows:
2024
2023
At January 1
Ps.
43,427,638
Ps.
50,450,949
Share of loss of associates and joint ventures, net
(960,415)
(4,803,533)
Share of other comprehensive income of associates
(7,061,676)
4,278,531
Long-term loans granted to GTAC, net
128,881
155,062
Foreign currency translation adjustments
8,946,557
(6,585,695)
GTAC payments of principal and interest
(183,031)
(178,914)
Dividends from PDS
(10,000)
(8,000)
Investment in other associate
18,770
—
Other
129,973
119,238
At December 31
Ps.
44,436,697
Ps.
43,427,638
IFRS Summarized Financial Information of TelevisaUnivision
IFRS summarized financial information of TelevisaUnivision as of December 31, 2024 and 2023, respectively (amounts in thousands of U.S. dollars):
2024
2023
Current assets (include cash and cash equivalents for U.S.$329,800 and U.S.$220,900, respectively)
U.S.$
2,616,600
U.S.$
2,751,600
Non-current assets
13,160,000
15,426,900
Total assets
15,776,600
18,178,500
Current liabilities (include financial liabilities for U.S.$53,100 and U.S.$46,200, respectively)
1,450,900
1,780,400
Non-current liabilities (include financial liabilities for U.S.$308,100 and U.S.$479,900, respectively)
12,100,700
13,229,000
Total liabilities
13,551,600
15,009,400
Total net assets
U.S.$
2,225,000
U.S.$
3,169,100
The table below reconciles the summarized financial information of TelevisaUnivision to the carrying amount of the Group’s interest TelevisaUnivision as
of December 31, 2024 and 2023, respectively (amounts in thousands of U.S. dollars):
2024
2023
Ownership as of December 31
43.0 %
43.7 %
Group’s share of net assets
U.S.$
955,705
U.S.$
1,384,364
Group’s share of net assets
Ps.
19,944,707
Ps.
23,440,738
Goodwill and other indefinite-lived intangible assets
7,624,454
6,186,231
Group’s investment in preferred shares
15,651,825
12,699,375
Carrying amount of the Group´s interest in TelevisaUnivision
Ps.
43,220,986
Ps.
42,326,344
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F-39
IFRS summarized financial information of TelevisaUnivision for the years ended December 31, 2024, 2023 and 2022 (amounts in thousands of U.S.
dollars):
2024
2023
2022
Revenue
U.S.$
5,055,500 U.S.$
4,928,000 U.S.$
4,609,600
Depreciation and amortization
551,600
570,700
524,300
Finance income
212,200
100,300
11,400
Finance expense
791,600
752,400
652,600
Loss from continuing operations
(62,500)
(513,000)
(1,203,200)
Income tax expense
(31,400)
(129,200)
(232,400)
Net loss
(93,900)
(642,200)
(1,435,600)
Other comprehensive (loss) income
(883,900)
535,400
471,113
Total comprehensive loss
(977,800)
(106,800)
(964,487)
Preferred dividends received from TelevisaUnivision
41,250
41,250
37,812
The table below reconciles the summarized financial information of TelevisaUnivision to the carrying amount of the Group´s interest in TelevisaUnivision
for the years ended December 31, 2024, 2023 and 2022 (amounts in thousands of U.S. dollars):
2024
2023
2022
Net loss
U.S.$
(40,333)
U.S.$
(280,533)
U.S.$
(637,955)
Other comprehensive (loss) income
(379,662)
233,880
209,354
Net loss
Ps.
(838,874)
Ps.
(4,940,904)
Ps.
(12,555,817)
Other comprehensive (loss) income
(7,061,645)
4,278,446
4,245,660
Purchase price allocation and other adjustments:
Net (loss) income adjustments
(151,397)
128,148
3,790,887
Group’s interest in TelevisaUnivision:
Net loss
(990,271)
(4,812,756)
(8,764,930)
Other comprehensive (loss) income
(7,061,645)
4,278,446
4,245,660
Reversal of impairment
—
—
593,838
Combined condensed balance sheet information related to the Group’s share in associates other than TelevisaUnivision as of December 31, 2024 and 2023,
including adjustments made by the Group when using the equity method, such as fair value adjustments made at the time of acquisition, is set forth below:
2024
2023
Current assets
Ps.
17,847
Ps.
17,809
Non-current assets
43,983
47,657
Total assets
61,830
65,466
Current liabilities
13,849
12,487
Non-current liabilities
26,095
25,704
Total liabilities
39,944
38,191
Net assets
Ps.
21,886
Ps.
27,275
Goodwill, purchase price allocation and other adjustments
41,772
23,002
Carrying amount of the Group’s interest in associates
Ps.
63,658
Ps.
50,277
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F-40
Combined condensed balance sheet information related to the Group’s share in joint ventures as of December 31, 2024 and 2023, including adjustments
made by the Group when using the equity method, such as fair value adjustments made at the time of acquisition, is set forth below:
2024
2023
Current assets
Ps.
175,520
Ps.
178,846
Non-current assets
1,065,472
937,841
Total assets
1,240,992
1,116,687
Current liabilities
56,799
96,005
Non-current liabilities
1,170,348
1,032,051
Total liabilities
1,227,147
1,128,056
Net assets (liabilities)
Ps.
13,845
Ps.
(11,369)
Goodwill, purchase price allocation and other adjustments
113,837
113,837
Long-term loans granted to GTAC, net
1,024,371
948,549
Carrying amount of the Group´s interest in joint ventures
Ps.
1,152,053
Ps.
1,051,017
The Group recognized its share of comprehensive income (loss) of associates and joint ventures other than TelevisaUnivision for the years ended December
31, 2024, 2023 and 2022, as follows:
2024
2023
2022
Share of income of associates and joint ventures, net
Ps.
29,856
Ps.
9,223
Ps.
40,287
Share of other comprehensive income of associates and joint ventures:
Other items of comprehensive (loss) income, net
(31)
85
(114)
(31)
85
(114)
Share of comprehensive income of associates and joint ventures
Ps.
29,825
Ps.
9,308
Ps.
40,173
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F-41
11. Property, Plant and Equipment, Net, and Investment Property, Net
Property, Plant and Equipment, Net
Changes in the carrying amounts of property, plant and equipment for the years ended December 31, 2024 and 2023, are as follows:
Network and
Construction
Buildings
Technical
Satellite
Furniture
Transportation
Computer
Leasehold
and Projects
and Land
Equipment
Transponders
and Fixtures
Equipment
Equipment
Improvements
in Progress (1)
Total
Cost:
January 1, 2023
Ps.
11,459,587
Ps.
186,550,056
Ps.
6,026,094
Ps.
1,214,427
Ps.
3,026,747
Ps.
9,241,759
Ps.
3,549,060
Ps.
11,570,777
Ps.
232,638,507
Additions
1,247
11,569,757
—
11,260
50,953
232,867
27,842
2,814,090
14,708,016
Dismantling cost
—
5,536
—
—
—
—
—
—
5,536
Retirements and reclassifications to other
accounts
(224,357)
(4,592,708)
—
(1,724)
(130,966)
(14,512)
(25,292)
828,399
(4,161,160)
Transfers from intangibles assets, net
—
—
—
—
—
—
—
(602,197)
(602,197)
Transfers investment property
(268)
—
—
—
—
—
—
—
(268)
Transfers and reclassifications
378,264
4,682,990
—
38,053
18,735
223,467
323,662
(5,665,171)
—
Effect of translation
4,974
(421,510)
—
(124)
(1,642)
(1,515)
(617)
4,594
(415,840)
December 31, 2023
11,619,447
197,794,121
6,026,094
1,261,892
2,963,827
9,682,066
3,874,655
8,950,492
242,172,594
Additions
20,922
5,013,043
—
8,206
22,488
32,133
43,381
3,957,224
9,097,397
Dismantling cost
—
12,122
—
—
—
—
—
—
12,122
Retirements and reclassifications to other
accounts
(5,535,721)
(9,541,826)
—
(122,101)
(1,242,130)
(2,951,681)
(1,347,560)
1,194,187
(19,546,832)
Transfers from intangibles assets, net
—
—
—
—
—
—
—
(770,090)
(770,090)
Transfers investment property
—
—
—
—
—
—
—
—
—
Transfers and reclassifications
21,292
5,907,840
—
25,154
4,894
75,477
106,827
(6,141,484)
—
Effect of translation
—
946,672
—
494
3,818
2,978
1,274
1,150
956,386
December 31, 2024
Ps.
6,125,940
Ps.
200,131,972
Ps.
6,026,094
Ps.
1,173,645
Ps.
1,752,897
Ps.
6,840,973
Ps.
2,678,577
Ps.
7,191,479
Ps.
231,921,577
Accumulated depreciation:
January 1, 2023
Ps.
(4,506,426)
Ps.
(128,026,045)
Ps.
(4,535,897)
Ps.
(800,016)
Ps.
(1,969,282)
Ps.
(7,676,900)
Ps.
(2,887,542)
Ps.
—
Ps.
(150,402,108)
Depreciation of the year
(357,525)
(16,085,521)
(282,414)
(84,874)
(199,009)
(405,514)
(219,376)
—
(17,634,233)
Retirements
291,328
3,041,980
—
1,462
78,311
5,385
3,708
—
3,422,174
Transfers investment property
(83,260)
—
—
—
—
—
—
—
(83,260)
Effect of translation
(543)
371,712
—
96
361
1,588
195
—
373,409
December 31, 2023
(4,656,426)
(140,697,874)
(4,818,311)
(883,332)
(2,089,619)
(8,075,441)
(3,103,015)
—
(164,324,018)
Depreciation of the year
(119,869)
(15,299,488)
(282,414)
(69,291)
(120,510)
(184,693)
(182,509)
—
(16,258,774)
Impairment
—
—
(20,044)
—
—
—
—
—
(20,044)
Retirements
2,162,396
7,387,294
—
95,404
664,112
1,949,903
1,062,713
—
13,321,822
Transfers investment property
(83,645)
—
—
—
—
—
—
—
(83,645)
Effect of translation
—
(887,584)
—
(148)
(1,728)
(2,623)
(574)
—
(892,657)
December 31, 2024
Ps.
(2,697,544)
Ps.
(149,497,652)
Ps.
(5,120,769)
Ps.
(857,367)
Ps.
(1,547,745)
Ps.
(6,312,854)
Ps.
(2,223,385)
Ps.
—
Ps.
(168,257,316)
Carrying amount:
January 1, 2023
Ps.
6,953,161
Ps.
58,524,011
Ps.
1,490,197
Ps.
414,411
Ps.
1,057,465
Ps.
1,564,859
Ps.
661,518
Ps.
11,570,777
Ps.
82,236,399
December 31, 2023
Ps.
6,963,021
Ps.
57,096,247
Ps.
1,207,783
Ps.
378,560
Ps.
874,208
Ps.
1,606,625
Ps.
771,640
Ps.
8,950,492
Ps.
77,848,576
December 31, 2024
Ps.
3,428,396
Ps.
50,634,320
Ps.
905,325
Ps.
316,278
Ps.
205,152
Ps.
528,119
Ps.
455,192
Ps.
7,191,479
Ps.
63,664,261
(1)
Retirements and reclassifications to other accounts include: (i) set-up box refurbishment projects that are subsequently reclassified to inventory in
order to be assigned or sold to a customer; and (ii) projects in progress related to certain costs that are reclassified to programming when a specific
program benefits from those costs.
Depreciation charges are presented in Note 21. Depreciation charged to income for the years ended December 31, 2024 and 2023, was Ps.16,258,774 and
Ps.17,634,233, respectively, which included Ps.21,340 and Ps.239,743, corresponding to the depreciation of discontinued operations, for the years ended
December 31, 2024 and 2023.
Derived from the annual impairment test of intangible assets with indefinite useful lives at the Sky CGU, in the fourth quarter of 2024 the Group
recognized an impairment loss in satellite transponders in the aggregate amount of Ps.20,044 (see Note 22).
Property, plant and equipment include the following carrying amounts of technical equipment leased to subscribers in the Cable and Sky segments as of
December 31, 2024 and 2023:
2024
2023
Subscriber leased set-top equipment
Ps.
60,963,692
Ps.
60,104,574
Accumulated depreciation
(43,883,230)
(39,556,789)
Ps.
17,080,462
Ps.
20,547,785
Table of Contents
F-42
Property, plant and equipment include the following carrying amounts of dismantling costs (technical equipment) related to incurred obligations in the
Cable segment as of December 31, 2024 and 2023:
2024
2023
Dismantling costs
Ps.
1,154,446
Ps.
1,138,606
Accumulated depreciation
(726,813)
(624,549)
Ps.
427,633
Ps.
514,057
Investment Property, Net
Beginning in the first quarter of 2022, in connection with the TelevisaUnivision Transaction, the Group leases some buildings and land to
TelevisaUnivision under operating lease agreements. These operating lease agreements contain initial non-cancellable periods between 7 and 19 years.
Subsequent renewals are negotiated with the lessee and average renewal periods are of five years. The leased buildings and land are in Mexico City and
include the Group’s San Angel, Chapultepec facilities and part of the Company’s headquarters. These properties are classified as investment properties in
accordance with IFRS Accounting Standards given that such properties are held by the Group primarily to earn rentals rather than for use in the production
or supply of goods or services or for administrative purposes, or sale in the ordinary course of business (see Note 3).
Changes in the carrying amount of investment property for the years ended December 31, 2024 and 2023, are as follows:
Buildings and Land
Cost:
January 1, 2023
Ps.
3,867,406
Additions
—
Retirements
—
December 31, 2023
3,867,406
Transfers investment property
—
December 31, 2024
Ps.
3,867,406
Accumulated depreciation:
January 1, 2023
Ps.
(993,973)
Depreciation of the period
(83,260)
December 31, 2023
(1,077,233)
Depreciation of the period
(83,645)
December 31, 2024
Ps.
(1,160,878)
Carrying amount:
December 31, 2023
Ps.
2,790,173
December 31, 2024
Ps.
2,706,528
Depreciation charges are presented in Note 21.
As of December 31, 2024 and 2023, the fair value of the Group’s investment property amounted to Ps.11,264,339 and Ps.9,622,031, respectively, as
measured by an independent appraiser who holds a recognized and relevant professional qualification and experience in the investment property being
valued.
Net lease income from investment property, net of direct operating expenses amounted to Ps.360,813,Ps.325,205 and Ps.311,343, for the years ended
December 31, 2024, 2023 and 2022, respectively, and was accounted for as a reduction of the Group’s corporate expense included in administrative
expenses (see Note 21).
Table of Contents
F-43
A maturity analysis of undiscounted contractual lease payments to be received by the Group as of December 31, 2024 for buildings and land subject to
operating leases is presented as follows (Thousands of U.S. dollars):
Undiscounted
Year
Lease Payments
2025
U.S.$
22,604
2026
22,604
2027
22,604
2028
22,604
2029
21,042
Thereafter
278,900
12. Right-of-use Assets, Net
Changes in the carrying amounts of right-of-use assets, net for the years ended December 31, 2024 and 2023, are as follows:
Satellite
Technical
Computer
Buildings
Transponders
Equipment
Equipment
Others
Total
Cost:
January 1, 2023
Ps.
5,939,460
Ps.
4,275,619
Ps.
2,098,782
Ps.
118,648
Ps.
531,005
Ps.
12,963,514
Additions
516,674
—
131,422
24,004
35,538
707,638
Retirements
(187,862)
—
(28)
(449)
(26,598)
(214,937)
Effect of translation
(2,545)
—
—
—
—
(2,545)
December 31, 2023
6,265,727
4,275,619
2,230,176
142,203
539,945
13,453,670
Additions
559,229
—
118,164
—
166,940
844,333
Retirements
(2,336,761)
—
—
(39,562)
(35,942)
(2,412,265)
Effect of translation
8,060
—
—
—
—
8,060
December 31, 2024
Ps.
4,496,255
Ps.
4,275,619
Ps.
2,348,340
Ps.
102,641
Ps.
670,943
Ps.
11,893,798
Accumulated depreciation:
January 1, 2023
Ps.
(1,812,859)
Ps.
(2,921,673)
Ps.
(1,255,968)
Ps.
(37,039)
Ps.
(265,677)
Ps.
(6,293,216)
Depreciation of the year
(635,535)
(285,041)
(145,592)
(45,663)
(92,258)
(1,204,089)
Retirements
94,191
—
28
27
33,939
128,185
Effect of translation
1,311
—
—
—
—
1,311
December 31, 2023
(2,352,892)
(3,206,714)
(1,401,532)
(82,675)
(323,996)
(7,367,809)
Depreciation of the year
(481,146)
(285,041)
(182,738)
(25,398)
(105,417)
(1,079,740)
Retirements and impairment
adjustments
658,778
(783,864)
8,962
11,115
—
(105,009)
Effect of translation
(4,323)
—
—
—
—
(4,323)
December 31, 2024
Ps.
(2,179,583)
Ps.
(4,275,619)
Ps.
(1,575,308)
Ps.
(96,958)
Ps.
(429,413)
Ps.
(8,556,881)
Carrying amount:
January 1, 2023
Ps.
4,126,601
Ps.
1,353,946
Ps.
842,814
Ps.
81,609
Ps.
265,328
Ps.
6,670,298
December 31, 2023
Ps.
3,912,835
Ps.
1,068,905
Ps.
828,644
Ps.
59,528
Ps.
215,949
Ps.
6,085,861
December 31, 2024
Ps.
2,316,672
Ps.
—
Ps.
773,032
Ps.
5,683
Ps.
241,530
Ps.
3,336,917
Depreciation charges are presented in Note 21. Depreciation charged to income or loss in relation to the right-of-use assets for the years ended December
31, 2024 and 2023, was Ps.1,079,740 and Ps.1,204,089, respectively, which included Ps.10,168 and Ps.112,481, corresponding to the depreciation of
discontinued operations, for the years ended December 31, 2024 and 2023, respectively.
Derived from the annual impairment test of intangible assets with indefinite useful lives at the Sky CGU, in the fourth quarter of 2024 the Group
recognized an impairment loss in right of use assets of satellite transponders in the aggregate amount of Ps.783,864 (see Note 22).
Table of Contents
F-44
13. Intangible Assets, Net and Goodwill
As of December 31, 2024 and 2023, intangible assets and goodwill are summarized as follows:
2024
2023
Accumulated
Accumulated
Cost
Amortization
Carrying Amount
Cost
Amortization
Carrying Amount
Intangible assets with indefinite useful lives and
goodwill:
Trademarks
Ps.
32,828
Ps.
—
Ps.
32,828
Ps.
32,828
Ps.
—
Ps.
32,828
Concessions
15,070,025
—
15,070,025
15,166,067
—
15,166,067
Goodwill
13,454,998
—
13,454,998
13,904,998
—
13,904,998
28,557,851
—
28,557,851
29,103,893
—
29,103,893
Intangible assets with finite useful lives:
Trademarks
2,245,835
(2,245,835)
—
2,236,012
(2,187,698)
48,314
Licenses and software
21,320,603
(16,716,480)
4,604,123
16,990,167
(12,594,645)
4,395,522
Subscriber lists
8,663,463
(8,468,156)
195,307
8,779,649
(8,177,490)
602,159
Payments for concessions
5,824,365
(863,002)
4,961,363
5,824,365
(575,335)
5,249,030
Other intangible assets
2,306,185
(1,697,740)
608,445
3,680,220
(2,689,296)
990,924
40,360,451
(29,991,213)
10,369,238
37,510,413
(26,224,464)
11,285,949
Ps.
68,918,302
Ps.
(29,991,213)
Ps.
38,927,089
Ps.
66,614,306
Ps.
(26,224,464)
Ps.
40,389,842
Changes in intangible assets with indefinite useful lives and goodwill for the years ended December 31, 2024 and 2023, were as follows:
2024
Trademarks
Concessions
Goodwill
Total
Cost:
Balance at January 1, 2024
Ps.
32,828
Ps.
15,166,067
Ps.
13,904,998
Ps.
29,103,893
Acquisitions
—
21,564
—
21,564
Retirements and impairment adjustments
—
(117,606)
(450,000)
(567,606)
Effect of translation
—
—
—
—
Balance at December 31, 2024
Ps.
32,828
Ps.
15,070,025
Ps.
13,454,998
Ps.
28,557,851
2023
Trademarks
Concessions
Goodwill
Total
Cost:
Balance at January 1, 2023
Ps.
32,828
Ps.
15,166,067
Ps.
13,904,998
Ps.
29,103,893
Retirements
—
—
—
—
Effect of translation
—
—
—
—
Balance at December 31, 2023
Ps.
32,828
Ps.
15,166,067
Ps.
13,904,998
Ps.
29,103,893
Table of Contents
F-45
Changes in intangible assets with finite useful lives for the years ended December 31, 2024 and 2023, were as follows:
2024
Licenses
Other
and
Subscriber
Payments for
Intangible
Trademarks
Software
Lists
Concessions
Assets
Total
Cost:
Balance at January 1, 2024
Ps.
2,236,012
Ps.
16,990,167
Ps.
8,779,649
Ps.
5,824,365
Ps.
3,680,220
Ps.
37,510,413
Additions
9,823
1,266,988
—
—
80,479
1,357,290
Transfers from property, plant and equipment
—
770,090
—
—
—
770,090
Reclassifications from other accounts
—
2,435,700
—
—
356,674
2,792,374
Retirements and impairment adjustments
—
(204,742)
(134,846)
—
(1,814,206)
(2,153,794)
Effect of translation
—
62,400
18,660
—
3,018
84,078
Balance at December 31, 2024
2,245,835
21,320,603
8,663,463
5,824,365
2,306,185
40,360,451
Accumulated amortization:
Balance at January 1, 2024
(2,187,698)
(12,594,645)
(8,177,490)
(575,335)
(2,689,296)
(26,224,464)
Amortization of the year
(58,137)
(2,395,212)
(312,184)
(287,667)
(67,002)
(3,120,202)
Other amortization of the year (1)
—
—
—
—
(47,628)
(47,628)
Transfers and reclassifications
—
—
4,770
—
(4,770)
—
Reclassifications from other accounts
—
(1,242,761)
(79,806)
—
(83,289)
(1,405,856)
Retirements and impairment adjustments
—
(421,290)
115,214
—
1,196,395
890,319
Effect of translation
—
(62,572)
(18,660)
—
(2,150)
(83,382)
Balance at December 31, 2024
(2,245,835)
(16,716,480)
(8,468,156)
(863,002)
(1,697,740)
(29,991,213)
Ps.
—
Ps.
4,604,123
Ps.
195,307
Ps.
4,961,363
Ps.
608,445
Ps.
10,369,238
2023
Licenses
Other
and
Subscriber
Payments for
Intangible
Trademarks
Software
Lists
Concessions
Assets
Total
Cost:
Balance at January 1, 2023
Ps.
2,227,096
Ps.
15,111,644
Ps.
8,791,701
Ps.
5,824,365
Ps.
6,252,593
Ps.
38,207,399
Additions
8,916
1,481,655
—
—
379,136
1,869,707
Transfers from property, plant and equipment
—
602,197
—
—
—
602,197
Retirements and impairment adjustments
—
(165,029)
—
—
(2,943,956)
(3,108,985)
Effect of translation
—
(40,300)
(12,052)
—
(7,553)
(59,905)
Balance at December 31, 2023
2,236,012
16,990,167
8,779,649
5,824,365
3,680,220
37,510,413
Accumulated amortization:
Balance at January 1, 2023
(2,115,570)
(10,952,399)
(7,874,480)
(287,668)
(4,957,588)
(26,187,705)
Amortization of the year
(72,128)
(1,820,411)
(315,062)
(287,667)
(52,302)
(2,547,570)
Other amortization of the year (1)
—
—
—
—
(422,065)
(422,065)
Retirements and impairment adjustments
—
139,190
—
—
2,740,671
2,879,861
Effect of translation
—
38,975
12,052
—
1,988
53,015
Balance at December 31, 2023
(2,187,698)
(12,594,645)
(8,177,490)
(575,335)
(2,689,296)
(26,224,464)
Ps.
48,314
Ps.
4,395,522
Ps.
602,159
Ps.
5,249,030
Ps.
990,924
Ps.
11,285,949
(1)
Through January 31, 2024, other amortization of the year relates primarily to amortization of soccer player rights in the Group’s former Other
Businesses segment, which is included in consolidated cost of revenues.
Amortization charges are presented in Note 21. Amortization charged to income for the years ended December 31, 2024 and 2023, was Ps.3,120,202 and
Ps.2,547,570, respectively, which included Ps.9,616, corresponding to the amortization of discontinued operations in December 2023. Additional
amortization charged to income for the years ended December 31, 2024 and 2023 was Ps.47,628 and Ps.422,065, primarily in connection with amortization
of soccer player rights.
Derived from the annual impairment test of intangible assets with indefinite useful lives at the Sky CGU and Cable CGU in the fourth quarter of 2024 the
Group recognized an impairment loss in goodwill and intangible assets with indefinite and finite useful lives in the aggregate amount of Ps.1,167,264 (see
Note 22).
The main events and circumstances that led to the recognition of impairment losses was primarily a decline in sales, this decline was influenced by market
conditions and competitive pressures, resulting in lower-than-expected revenue. Management revised its future projections to reflect a more cautious
outlook, considering the current economic environment and potential risks.
Table of Contents
F-46
The changes in the net carrying amount of goodwill, indefinite-lived trademarks and concessions for the years ended December 31, 2024 and 2023, were as
follows:
Foreign
Balance as of
Currency
Balance as of
January 1,
Translation
Impairment
December 31,
2024
Acquisitions
Retirements
Adjustments
Adjustments
Transfers
2024
Goodwill:
Cable
Ps.
13,794,684
Ps.
—
Ps.
—
Ps.
—
Ps.
(450,000)
Ps.
—
Ps.
13,344,684
Other
110,314
—
—
—
—
—
110,314
Ps.
13,904,998
Ps.
—
Ps.
—
Ps.
—
Ps.
(450,000)
Ps.
—
Ps.
13,454,998
Indefinite-lived trademarks:
Cable
Ps.
32,828
Ps.
—
Ps.
—
Ps.
—
Ps.
—
Ps.
—
Ps.
32,828
Ps.
32,828
Ps.
—
Ps.
—
Ps.
—
Ps.
—
Ps.
—
Ps.
32,828
Indefinite-lived concessions:
Cable
Ps.
15,070,025
Ps.
—
Ps.
—
Ps.
—
Ps.
—
Ps.
—
Ps.
15,070,025
Sky
96,042
21,564
—
—
(117,606)
—
—
Ps.
15,166,067
Ps.
21,564
Ps.
—
Ps.
—
Ps.
(117,606)
Ps.
—
Ps.
15,070,025
Foreign
Balance as of
Currency
Balance as of
January 1,
Translation
Impairment
December 31,
2023
Acquisitions
Retirements
Adjustments
Adjustments
Transfers
2023
Goodwill:
Cable
Ps.
13,794,684
Ps.
—
Ps.
—
Ps.
—
Ps.
—
Ps.
—
Ps.
13,794,684
Other
110,314
—
—
—
—
—
110,314
Ps.
13,904,998
Ps.
—
Ps.
—
Ps.
—
Ps.
—
Ps.
—
Ps.
13,904,998
Indefinite-lived trademarks:
Cable
Ps.
32,828
Ps.
—
Ps.
—
Ps.
—
Ps.
—
Ps.
—
Ps.
32,828
Ps.
32,828
Ps.
—
Ps.
—
Ps.
—
Ps.
—
Ps.
—
Ps.
32,828
Indefinite-lived concessions:
Cable
Ps.
15,070,025
Ps.
—
Ps.
—
Ps.
—
Ps.
—
Ps.
—
Ps.
15,070,025
Sky
96,042
—
—
—
—
—
96,042
Ps.
15,166,067
Ps.
—
Ps.
—
Ps.
—
Ps.
—
Ps.
—
Ps.
15,166,067
The Group had previously determined that for the Cable segment it had five CGUs. During 2024 the Group determined that there was a change in the CGU
composition of this segment as a result of the following: (i) in prior year new CEO and CFO were designated for the Cable segment which led to the
implementation of a restructure in the segment and a redefinition of the operating strategy; (ii) intercompany mergers to align to the strategy have taken
place during 2024; (iii) measurement and monitoring of financial performance (returns and assets (infrastructure)) including the analysis of cash flow
generation, as well as decision making is performed at the level of residential (MSO operations) and business operations (Enterprise Operations). This
change in the organizational structure and how management monitors operations and make business decisions, resulted in the change in the CGU
composition. Based on the above, the new CGUs “Residential” (MSO operations) and “Business” (Enterprise Operations) have been determined in
accordance with the best judgment of management and considers the smallest identifiable group of assets that generates cash inflows that are largely
independent of the cash inflows from other group of assets and for which management monitors and makes decisions about the continuity or disposing of
the assets or these operations. The change resulted in reallocation of a portion of goodwill and intangible assets with indefinite useful lives across the
Residential and Business CGUs. The reallocation was performed using a relative value approach.
Table of Contents
F-47
The key assumptions used for either fair value less cost of disposal or value in use calculations of goodwill and intangible assets in 2024, were as follows
(see Note 15):
Cable and Sky
Minimum
Maximum
Value in use calculations:
Long-term growth rate
2.0 %
3.7 %
Post-tax discount rate
11.0 %
11.3 %
Pre-tax discount rate
14.0 %
14.3 %
Fair value calculations:
Multiple of sales
1.7
3.7
Multiple of EBITDA (as defined)
3.8
7.9
The key assumptions used for either fair value less cost of disposal or value in use calculations of goodwill and intangible assets in 2023, were as follows
(see Note 15):
Cable
Minimum
Maximum
Value in use calculations:
Long-term growth rate
3.7 %
3.7 %
Post-tax discount rate
11.4 %
12.2 %
Pre-tax discount rate
13.3 %
16.0 %
Fair value calculations:
Multiple of sales
2.0
2.8
Multiple of EBITDA (as defined)
6.1
7.4
Management has identified that a reasonable possible change in the key assumptions identified above could cause the carrying amount in 2024 to exceed
the recoverable amount of one of the two CGUs with indefinite-life intangible assets tested for impairment. The change required for the carrying amount to
equal the recoverable amount is a 0.02% decrease in the discount rate (equivalent to a 2 basis-point change) or a 1.7% decrease in the long-term growth rate
(equivalent to a 170 basis-point change).
Management has identified that a reasonably possible change in the key assumptions identified above could cause the carrying amount in 2023 to exceed
the recoverable amount of one of the five CGUs with indefinite-life intangible assets tested for impairment. The change required for the carrying amount to
equal the recoverable amount is a 4.8% decrease in the multiple of EBITDA (equivalent to a 480 basis - point change) or a 2.4% decrease in the multiple of
sales (equivalent to a 240 basis - point change).
As described in Note 2 (l), in 2020, the Company’s management estimated the remaining useful life of four years for acquired trademarks in specific
locations of Mexico, in connection with the migration to an internally developed trademark in the Group’s Cable segment.
Table of Contents
F-48
14. Debt and Lease Liabilities
Debt and lease liabilities outstanding as of December 31, 2024 and 2023, were as follows:
2024
2023
Finance
Principal, Net
Effective
Interest
Principal, Net
U.S. Dollars
Principal
Costs
of Finance Costs
Interest Rate
Payable
of Finance Costs
U.S. dollar Senior Notes:
6.625% Senior Notes due 2025 (1)
U.S.$
219,438
Ps.
4,579,474
Ps.
(22,524)
Ps.
4,556,950
7.60 % Ps.
75,847
Ps.
3,654,554
4.625% Senior Notes due 2026 (1)
207,420
4,328,669
(5,147)
4,323,522
5.03 %
100,100
3,504,921
8.5% Senior Notes due 2032 (1)
300,000
6,260,730
(34,468)
6,226,262
9.00 %
162,605
5,042,597
6.625% Senior Notes due 2040 (1)
600,000
12,521,460
(141,613)
12,379,847
7.05 %
377,905
10,012,592
5% Senior Notes due 2045 (1)
790,610
16,499,319
(453,662)
16,045,657
5.39 %
119,162
12,915,265
6.125% Senior Notes due 2046 (1)
879,572
18,355,876
(126,566)
18,229,310
6.47 %
562,149
14,763,351
5.250% Senior Notes due 2049 (1)
660,928
13,792,972
(315,577)
13,477,395
5.59 %
72,413
10,871,373
Total U.S. dollar debt
3,657,968
76,338,500
(1,099,557)
75,238,943
1,470,181
60,764,653
Mexican peso debt:
8.79% Notes due 2027 (2)
—
4,500,000
(8,825)
4,491,175
8.84 %
101,085
4,488,372
8.49% Senior Notes due 2037 (1)
—
4,500,000
(15,550)
4,484,450
8.94 %
44,572
4,483,755
7.25% Senior Notes due 2043 (1)
—
6,225,690
(63,283)
6,162,407
7.92 %
36,360
6,161,147
Bank loans (3)
—
10,000,000
(71,802)
9,928,198
11.69 %
—
9,987,932
Bank loans (Sky) (4)
—
2,650,000
—
2,650,000
12.46 %
22,346
2,650,000
Total Mexican peso debt
—
27,875,690
(159,460)
27,716,230
204,363
27,771,206
Total debt (5)
3,657,968
104,214,190
(1,259,017)
102,955,173
1,674,544
88,535,859
Less: Current portion of long-term debt
219,438
4,579,474
(22,524)
4,556,950
1,674,544
9,987,932
Long-term debt, net of current portion
U.S.$
3,438,530
Ps.
99,634,716
Ps.
(1,236,493)
Ps.
98,398,223
Ps.
—
Ps.
78,547,927
2024
2023
Lease liabilities:
Satellite transponder lease agreement (6)
Ps.
1,866,747
Ps.
1,994,437
Telecommunications network lease agreement (7)
538,356
573,761
Other lease liabilities (8)
2,981,536
4,723,352
Total lease liabilities
5,386,639
7,291,550
Less: Current portion
1,242,957
1,280,932
Lease liabilities, net of current portion
Ps.
4,143,682
Ps.
6,010,618
Table of Contents
F-49
(1)
The Senior Notes due between 2025 and 2049, in the aggregate outstanding principal amount of U.S.$3,658 million as of December 31, 2024 and
2023, and Ps.10,725,690, as of December 31, 2024 and 2023, are unsecured obligations of the Company, rank equally in right of payment with all
existing and future unsecured and unsubordinated indebtedness of the Company, and are junior in right of payment to all of the existing and future
liabilities of the Company’s subsidiaries. Interest rate on the Senior Notes due 2025, 2026, 2032, 2037, 2040, 2043, 2045, 2046, and 2049 including
additional amounts payable in respect of certain Mexican withholding taxes, is 6.97%, 4.86%, 8.94%, 8.93%, 6.97%, 7.62%, 5.26%, 6.44% and 5.52%
per annum, respectively, and is payable semi-annually. These Senior Notes may not be redeemed prior to maturity, except: (i) in the event of certain
changes in law affecting the Mexican withholding tax treatment of certain payments on the securities, in which case the securities will be redeemable,
in whole or in part, at the option of the Company; and (ii) in the event of a change of control, in which case the Company may be required to redeem
the securities at 101% of their principal amount. Also, the Company may, at its own option, redeem the Senior Notes due 2025, 2026, 2037, 2040,
2043, 2046 and 2049, in whole or in part, at any time at a redemption price equal to the greater of the principal amount of these Senior Notes or the
present value of future cash flows, at the redemption date, of principal and interest amounts of the Senior Notes discounted at a fixed rate of
comparable U.S. or Mexican sovereign bonds. The Senior Notes due 2026, 2032, 2040, 2043, 2045, 2046 and 2049 were priced at 99.385%, 99.431%,
98.319%, 99.733%, 96.534%, 99.677% and 98.588%, respectively, for a yield to maturity of 4.70%, 8.553%, 6.755%, 7.27%, 5.227%, 6.147% and
5.345%, respectively. The Senior Notes due 2025 were issued in two aggregate principal amounts of U.S.$400 million and U.S.$200 million, and were
priced at 98.081% and 98.632%, respectively, for a yield to maturity of 6.802% and 6.787%, respectively. The terms of these Senior Notes contain
covenants that limit the ability of the Company and certain restricted subsidiaries to incur or assume liens, perform sale and leaseback transactions, and
consummate certain mergers, consolidations, and similar transactions. The Senior Notes due 2025, 2026, 2032, 2037, 2040, 2045, 2046 and 2049, are
registered with the U.S. Securities and Exchange Commission (“SEC”). The Senior Notes due 2043 are registered with both the SEC and the Mexican
Banking and Securities Commission (Comisión Nacional Bancaria y de Valores or “CNBV”). In the first, second and third quarters of 2023, the
Company repurchased a portion of its outstanding Senior Notes due 2043 in the aggregate principal amount of Ps.274,310 and recognized a gain on
extinguishment of debt in the amount of Ps.98,692, which was recognized in finance expense, net, in the Group’s consolidated statement of income for
the year ended December 31, 2023. In August 2023, the Company concluded tender offers to purchase for cash a portion of its Senior Notes due 2025,
2026, 2045, 2046 and 2049, in the principal amount of U.S.$47.0 million, U.S.$92.6 million, U.S.$98.7 million, U.S.$20.4 million and U.S.$41.3
million, respectively, for an aggregate principal amount of U.S.$300.0 million. The Company paid for these tender offers cash in the aggregate amount
of U.S.$274.9 million (Ps.4,718,251), plus related premiums of U.S.$6.2 million (Ps.106,505) and recognized a gain on extinguishment of debt in the
amount of U.S.$18.9 million (Ps.324,512), which was recognized in finance expense, net, in the Group’s consolidated statement of income for the year
ended December 31, 2023. In the second and third quarter of 2023, the Company repurchased a portion of its outstanding Senior Notes due 2043 in the
aggregate principal amount of Ps.274,310, the Company paid for this repurchase an aggregate cash amount of Ps.174,785, plus related accrued interest
of Ps.6,946, and recognized a gain on extinguishment of debt in the amount of Ps.92,579, which was recognized in finance expense, net, in the Group’s
consolidated statement of income for the year ended December 31, 2023 (see Note 23).
(2)
In 2017, the Company issued Notes (“Certificados Bursátiles”) due 2027, through the BMV in the aggregate principal amount of Ps.4,500,000, with
interest payable semi-annually at an annual rate of 8.79%. The Company may, at its own option, redeem the Notes due 2027, in whole or in part, at any
semi-annual interest payment date at a redemption price equal to the greater of the principal amount of the outstanding Notes and the present value of
future cash flows, at the redemption date, of principal and interest amounts of the Notes discounted at a fixed rate of comparable Mexican sovereign
bonds. The terms of the Notes due 2027 contain covenants that limit the ability of the Company and certain restricted subsidiaries appointed by the
Company’s Board of Directors, to incur or assume liens, perform sale and leaseback transactions, and consummate certain mergers, consolidations, and
similar transactions.
(3)
In July 2019, the Company entered into a credit agreement for a five-year term loan with a syndicate of banks in the aggregate principal amount of
Ps.10,000,000, with interest payable on a monthly basis at a floating rate based on a spread of 105 or 130 basis points over the 28-day TIIE rate
depending on the Group’s net leverage ratio.In April 2024, the Company and two of its subsidiaries in the Group’s Cable segment (i) executed a credit
agreement with a syndicate of banks (the “Credit Agreement”) for a five - year term loan in a principal amount of Ps.10,000,000, and a five - year
revolving credit facility in the amount in Mexican pesos equivalent to U.S.$500 million; and (ii) terminated an unused revolving credit facility entered
into 2022 with a syndicate of banks for up to an amount equivalent to U.S.$650 million, with an original maturity in 2025. The loans under the Credit
Agreement bear interest at a floating rate based on a spread of 125 bps or 150 bps over the 28 - day TIIE rate depending on the Group’s leverage ratio.
The Credit Agreement requires the maintenance of financial ratios related to indebtedness and interest expense. In April 2024, the Group used the
proceeds of the term loan under the Credit Agreement to prepay in full amounts outstanding under the credit agreement entered into by the Company in
2019 with a syndicate of banks in the principal amount of Ps.10,000,000, with an original maturity in June 2024.
Table of Contents
F-50
(4)
In December 2021, Sky entered into long-term credit agreement with a Mexican Bank in the aggregate principal amount of Ps.2,650,000, with interest
payable on a monthly basis and maturity in December 2026, which included a Ps.1,325,000 loan with an annual interest rate of 8.215%, and a
Ps.1,325,000 loan with an annual interest rate of 28-day TIIE plus 90 basis points. The funds from these loans were used for general corporate
purposes, including the prepayment of Sky´s indebtedness. Under the terms of this credit agreement, Sky is required to: (a) maintain certain financial
coverage ratios related to indebtedness and interest expense; and (b) comply with a restrictive covenant on spin-offs, mergers, and similar transactions.
In March 2023, upon the maturity of loans with two Mexican banks, Sky repaid the remaining portions of these loans in the aggregate principal
amount of Ps.1,000,000 with (i) available cash on hand in the amount of Ps.600,000 and (ii) funds from a revolving credit facility in the principal
amount of Ps.400,000, plus interest payable on a monthly basis at the annual interest rate of TIIE plus 0.85%, with a maturity in 2028. In December
2023, Sky prepaid all of the used funds under its revolving credit facility plus unpaid accrued interest in the aggregate amount of Ps.403,981.
(5)
Principal amount of total debt as of December 31, 2023, is presented net of unamortized finance costs, in the aggregate amount of Ps.1,278,374.
(6)
In March 2010, Sky entered into a lease agreement with Intelsat Global Sales & Marketing Ltd. (“Intelsat”) by which Sky is obligated to pay at an
annual interest rate of 7.30%, a monthly fee of U.S.$3.0 million through 2027 for satellite signal reception and retransmission service from 24 KU-
band transponders on satellite IS-21, which became operational in October 2012. The service term for IS-21 will end at the earlier of: (a) the end of 15
years; or (b) the date IS-21 is taken out of service (see Note 12).
(7)
A subsidiary of the Company entered into a lease agreement with GTAC for the right to use certain capacity of a telecommunications network through
2030 (see Note 20).
(8)
Other lease liabilities recognized in accordance with IFRS 16 Leases, in the aggregate amount of Ps.2,981,536 and Ps.4,723,352, as of December 31,
2024 and 2023, respectively. These lease liabilities have terms which will expire at various dates between 2025 and 2051.
As of December 31, 2024 and 2023, the outstanding principal amounts of Senior Notes of the Company that have been designated as hedging instruments
of the Group’s investment in TelevisaUnivision and Open-Ended Fund (hedged items), were as follows (see Notes 2 (e) and 4):
December 31, 2024
December 31, 2023
Millions of
Thousands of
Millions of
Thousands of
Hedged Items
U.S. Dollars
Mexican Pesos
U.S. Dollars
Mexican Pesos
Investment in shares of TelevisaUnivision (net investment hedge)
U.S.$
2,071.1
Ps.
43,220,986
U.S.$
2,499.7
Ps.
42,326,344
Open-Ended Fund (foreign currency fair value hedge)
37.6
784,769
39.8
674,451
Total
U.S.$
2,108.7
Ps.
44,005,755
U.S.$
2,539.5
Ps.
43,000,795
The foreign exchange gain or loss derived from the Company’s U.S. dollar denominated long-term debt designated as a hedge, for the years ended
December 31, 2024 and 2023, is analyzed as follows (see Notes 9 and 23):
Foreign Exchange Gain or Loss Derived from Senior Notes Designated as Hedging Instruments
2024
2023
Recognized in:
Comprehensive (loss) gain
Ps.
(9,122,973)
Ps.
6,683,712
Total foreign exchange (loss) gain derived from hedging Senior Notes
Ps.
(9,122,973)
Ps.
6,683,712
Offset against:
Foreign currency translation gain (loss) derived from the hedged net investment in shares of TelevisaUnivision
Ps.
8,946,557
Ps.
(6,585,695)
Foreign exchange gain (loss) derived from the hedged Open-Ended Fund
176,416
(98,017)
Total foreign currency translation and foreign exchange gain (loss) derived from hedged assets
Ps.
9,122,973
Ps.
(6,683,712)
Table of Contents
F-51
Maturities of Debt and Lease Liabilities
Debt maturities for the years subsequent to December 31, 2024, are as follows:
Unamortized
Nominal
Finance Costs
2025
Ps.
4,579,474
Ps.
22,524
2026
6,978,669
5,147
2027
4,500,000
8,825
2029
10,000,000
71,802
Thereafter
78,156,047
1,150,719
Ps.
104,214,190
Ps.
1,259,017
Future minimum payments under lease liabilities for the years subsequent to December 31, 2024, are as follows:
2025
Ps.
1,705,869
2026
1,628,224
2027
1,377,845
2028
686,894
2029
556,729
Thereafter
1,142,728
7,098,289
Less: Amount representing interest
(1,711,650)
Ps.
5,386,639
A reconciliation of long-term debt and lease liabilities arising from financing activities in the Group’s consolidated statement of cash flows for the years
ended December 31, 2024 and 2023, is as follows:
Cash Flow
Non-Cash Changes
Foreign
Balance as of
New Debt
Exchange
Balance as of
January 1, 2024
Payments
and Leases
Spun-off
Income
Interest
December 31, 2024
Debt
Ps.
89,814,233
Ps.
(10,000,000)
Ps.
10,000,000
Ps.
—
Ps.
14,399,957
Ps.
—
Ps.
104,214,190
Lease liabilities
7,291,550
(1,567,300)
87,890
(1,117,157)
391,372
300,284
5,386,639
Total debt and lease liabilities
Ps.
97,105,783
Ps.
(11,567,300)
Ps.
10,087,890
Ps.
(1,117,157)
Ps.
14,791,329
Ps.
300,284
Ps.
109,600,829
Cash Flow
Non-Cash Changes
Foreign
Balance as of
New Debt
Net Gain of
Exchange
Balance as of
January 1, 2023
Payments
and Leases
Prepayment
Income
Interest
December 31, 2023
Debt
Ps.
106,235,385
Ps.
(5,899,981)
Ps.
—
Ps.
(523,628)
Ps.
(9,997,543)
Ps.
—
Ps.
89,814,233
Lease liabilities
8,369,072
(1,793,602)
619,652
—
(352,172)
448,600
7,291,550
Total debt and lease liabilities
Ps.
114,604,457
Ps.
(7,693,583)
Ps.
619,652
Ps.
(523,628)
Ps.
(10,349,715)
Ps.
448,600
Ps.
97,105,783
Credit Facilities
In February 2023, Sky executed a revolving credit facility with a Mexican bank for up to an amount of Ps.1,000,000, which funds may be used for general
corporate purposes, including the repayment of debt, with a maturity in 2028. In March 2023, Sky used funds of this revolving facility in the principal
amount of Ps.400,000 to repay a portion of its debt, plus interest payable on a monthly basis at the annual rate of TIIE plus 0.85%. In December 2023, Sky
prepaid all of the used funds under this credit facility plus accrued interest in the aggregate amount of Ps.403,981. Under the terms of this revolving credit
facility, Sky is required to comply with certain restrictive covenants and financial coverage ratios. As of December 31, 2024, the unused principal amount
of this credit facility amounted to Ps.1,000,000.
As discussed above, in April 2024, the Company and two of its subsidiaries in the Group’s Cable segment executed a five-year revolving credit facility with
a syndicate of banks for up to an amount in Mexican pesos equivalent to U.S.$500 million. The credit agreement for this credit facility requires the
maintenance of financial ratios related to indebtedness and interest expense. As of December 31, 2024, this credit facility remained unused.
Table of Contents
F-52
15. Financial Instruments
The Group’s financial instruments presented in the consolidated statements of financial position included cash and cash equivalents, accounts receivable, a
long-term loan receivable from GTAC as a part of the investment in this associate, non-current investments in publicly traded equity securities and in
securities in the form of an open-ended fund, accounts payable, outstanding debt, lease liabilities, and derivative financial instruments. For cash and cash
equivalents, accounts receivable, accounts payable, and the current portion of long-term debt and lease liabilities, the carrying amounts approximate fair
value due to the short maturity of these instruments. The fair value of the Group’s long-term debt securities is based on quoted market prices.
The fair value of long-term loans that the Group borrowed from leading Mexican banks (see Note 14), has been estimated using the borrowing rates
currently available to the Group for bank loans with similar terms and average maturities. The fair value of non-current investments in financial
instruments, and currency option and interest rate swap agreements were determined by using valuation techniques that maximize the use of observable
market data.
The carrying amount and estimated fair values of the Group’s non-derivative financial instruments as of December 31, 2024 and 2023, were as follows:
2024
2023
Carrying Amount
Fair Value
Carrying Amount
Fair Value
Assets:
Cash and cash equivalents
Ps.
46,193,173
Ps.
46,193,173
Ps.
32,586,352
Ps.
32,586,352
Trade accounts receivable, net
6,175,819
6,175,819
8,131,458
8,131,458
Long-term loan and interest receivable from GTAC (see Note 10)
1,024,371
1,031,497
948,549
953,423
Open-Ended Fund (see Note 9)
784,769
784,769
674,451
674,451
Publicly traded equity instruments (see Note 9)
1,709,942
1,709,942
1,912,150
1,912,150
Liabilities:
Senior Notes due 2025, 2032 and 2040
Ps.
23,361,664 Ps.
22,806,032 Ps.
18,954,884 Ps.
20,432,901
Senior Notes due 2045
16,499,319
11,969,101
13,387,004
11,542,810
Senior Notes due 2037 and 2043
10,725,690
6,794,877
10,725,690
8,090,190
Senior Notes due 2026 and 2046
22,684,545
19,734,233
18,405,492
18,379,439
Senior Notes due 2049
13,792,972
10,280,454
11,191,163
10,035,228
Notes due 2027
4,500,000
4,252,725
4,500,000
4,233,150
Long-term loans payable to Mexican banks
12,650,000
12,777,242
12,650,000
12,789,686
Lease liabilities
5,386,639
5,454,171
7,291,550
7,334,492
Table of Contents
F-53
The carrying amounts (based on estimated fair values), notional amounts, and maturity dates of the Group’s derivative financial instruments as of
December 31, 2024 and 2023, were as follows:
Notional
Amount
December 31, 2024:
Carrying
(U.S. Dollars in
Derivative Financial Instruments
Amount
Thousands)
Maturity Date
Assets:
Derivatives recorded as accounting hedges (cash flow hedges):
Forwards (a)
Ps.
1,975,071
U.S.$
592,005
January 2025 through January 2026
Derivatives not recorded as accounting hedges:
TVI’s Forwards (b)
4,408
U.S.$
8,000
January through March 2025
Empresas Cablevision’s Forwards (c)
2,502
U.S.$
4,000
February through March 2025
Cablemás´s Forwards (d)
2,180
U.S.$
5,000
January 2025
Sky’s Forwards (e)
8,072
U.S.$
15,000
March 2025
Forwards (f)
8,818
U.S.$
14,000
January through March 2025
Total assets
Ps.
2,001,051
December 31, 2023:
Carrying
Notional
Derivative Financial Instruments
Amount
Amount
Maturity Date
Assets:
Derivatives recorded as accounting hedges (cash flow hedges):
Interest rate swaps (g)
Ps.
251,738
Ps.
10,000,000
June 2024
Total current assets
Ps.
251,738
(a)
As of December 31, 2024, the Company had entered into derivative contracts of foreign currency (forwards) to fix the exchange rate for the purchase
of U.S.$592 million, at an average exchange rate of Ps.18.0059. The Company has recognized the change in fair value of this transaction as an
accounting hedge and recorded a cumulative income of Ps.1,857,456 for this transaction agreement in other comprehensive income or loss as of
December 31, 2024. As a result of the change in fair value of these agreements in the year ended December 31, 2024, the Company recorded an
income of Ps.456,559 in consolidated other finance income or expense.
(b)
As of December 31, 2024, TVI had foreign currency contracts (forwards) in the aggregate notional amount of U.S.$8 million at an average rate of
Ps.20.4503. As a result of the change in fair value of these agreements in the year ended December 31, 2024, the Company recorded an income of
Ps.39,791 in consolidated other finance income or expense.
(c)
As of December 31, 2024, Empresas Cablevisión had foreign currency contracts (forwards) in the aggregate notional amount of U.S.$4 million at an
average rate of Ps.20.4637. As a result of the change in fair value of these agreements in the year ended December 31, 2024, the Company recorded an
income of Ps.36,474 in consolidated other finance income or expense.
(d)
As of December 31, 2024, Cablemás had foreign currency contracts (forwards) in the aggregate notional amount of U.S.$5 million at an average rate
of Ps.20.4915. As a result of the change in fair value of these agreements in the year ended December 31, 2024, the Company recorded an income of
Ps.2,181 in consolidated other finance income or expense.
(e)
As of December 31, 2024, Sky had foreign currency contracts (forwards) in the aggregate notional amount of U.S.$15 million at an average rate of
Ps.20.4548. As a result of the change in fair value of these agreements in the year ended December 31, 2024, the Company recorded an income of
Ps.82,065 in consolidated other finance income or expense.
(f)
As of December 31, 2024, the Company had foreign currency contracts (forwards) in the aggregate notional amount of U.S.$14 million at an average
rate of Ps.20.4645. As a result of the change in fair value of these agreements, in the year ended December 31, 2024, the Company recorded an income
of Ps.149,593 in consolidated other finance income or expense.
(g)
In October 2020, the Company entered into derivative transaction agreements (interest rate swaps) through June 2024, to hedge the variable interest
rate exposure resulting from a Mexican peso loan of a total principal amount of Ps.10,000,000 as of December 31, 2023. Under these agreements, the
Company receives monthly payments based on aggregate notional amounts of Ps.10,000,000 as of December 31, 2023, at an annual variable rate of 28
days of TIIE and makes monthly payments based on the same notional amount at an annual weighted average fixed rate of 6.7620%.The Company has
recognized the change in fair value of this transaction as an accounting hedge and recorded a cumulative income of Ps.220,127 in other comprehensive
income or loss as of December 31, 2023. In 2023, the Company recorded a gain of Ps.457,522 in consolidated other finance income or expense.
Table of Contents
F-54
Fair Value Measurement
Assets Measured at Fair Value on a Recurring Basis
All fair value adjustments as of December 31, 2024 and 2023, represent assets or liabilities measured at fair value on a recurring basis. In determining fair
value, the Group’s financial instruments are separated into two categories: investments in financial assets at FVOCIL and derivative financial instruments.
Financial assets measured at fair value as of December 31, 2024 and 2023:
Quoted Prices in
Internal Models
Internal Models
Balance as of
Active Markets
with Significant
with Significant
December 31,
for Identical
Observable
Unobservable
2024
Assets (Level 1)
Inputs (Level 2)
Inputs (Level 3)
Assets:
At FVOCIL:
Open-Ended Fund
Ps.
784,769
Ps.
—
Ps.
784,769
Ps.
—
Publicly traded equity instruments
1,709,942
1,709,942
—
—
Derivative financial instruments
2,001,051
—
2,001,051
—
Total
Ps.
4,495,762
Ps.
1,709,942
Ps.
2,785,820
Ps.
—
Quoted Prices in
Internal Models
Internal Models
Balance as of
Active Markets
with Significant
with Significant
December 31,
for Identical
Observable
Unobservable
2023
Assets (Level 1)
Inputs (Level 2)
Inputs (Level 3)
Assets:
At FVOCIL:
Open-Ended Fund
Ps.
674,451
Ps.
—
Ps.
674,451
Ps.
—
Publicly traded equity instruments
1,912,150
1,912,150
—
—
Derivative financial instruments
251,738
—
251,738
—
Total
Ps.
2,838,339
Ps.
1,912,150
Ps.
926,189
Ps.
—
Non-current Financial Assets
Investments in debt securities or with readily determinable fair values, are classified as non-current investments in financial instruments, and are recorded
at fair value with unrealized gains and losses included in consolidated stockholders’ equity as accumulated other comprehensive result.
Non-current financial assets are generally valued using quoted market prices or alternative pricing sources with reasonable levels of price transparency.
Such instruments are classified in Level 1, Level 2, and Level 3, depending on the observability of the significant inputs.
Open-Ended Fund
The Group has an investment in an Open-Ended Fund that has as a primary objective to achieve capital appreciation by using a broad range of strategies
through investments in securities, including without limitation stock, debt and other financial instruments, a principal portion of which are considered as
Level 1 financial instruments, in telecom, media and other sectors across global markets, including Latin America and other emerging markets. Shares may
be redeemed on a quarterly basis at the NAV per share as of such redemption date (see Notes 4 and 9).
Disclosures for Each Class of Assets and Liabilities Subject to Recurring Fair Value Measurements Categorized Within Level 3
The Corporate Finance Department of the Company has established rules for a proper portfolio asset classification according to the fair value hierarchy
defined by the IFRS Accounting Standards. On a monthly basis, any new assets recognized in the portfolio are classified according to this criteria.
Subsequently, there is a quarterly review of the portfolio in order to analyze the need for a change in classification of any of these assets.
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F-55
A sensitivity analysis is performed on the Group’s investments with significant unobservable inputs (Level 3) in order to obtain a reasonable range of
possible alternative valuations. This analysis is carried out by the Corporate Finance Department of the Company.
Derivative Financial Instruments
Derivative financial instruments include swaps, forwards and options (see Notes 2 (w), 4 and 15).
The Group’s derivative portfolio is entirely over-the-counter (“OTC”). The Group’s derivatives are valued using industry standard valuation models;
projecting future cash flows discounted to present value, using market-based observable inputs including interest rate curves, foreign exchange rates, and
forward and spot prices for currencies.
When appropriate, valuations are adjusted for various factors such as liquidity, bid/offer spreads and credit spreads considerations. Such adjustments are
generally based on available market evidence. In the absence of such evidence, management’s best estimate is used. All derivatives are classified in Level
2.
Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis
The majority of the Group’s non-financial instruments, which include the investment in shares of TelevisaUnivision, goodwill, intangible assets,
inventories, transmission rights, property, plant and equipment and right-of-use assets are not required to be carried at fair value on a recurring basis.
However, if certain triggering events occur (or at least annually in the fourth quarter for goodwill and indefinite-lived intangible assets) such that a non-
financial instrument is required to be evaluated for impairment, a resulting asset impairment would require that, the non-financial instrument be recorded at
the lower of carrying amount or its recoverable amount.
The impairment test for goodwill involves a comparison of the recoverable amount of each of the Group’s reporting units to its carrying amount, including
goodwill. The Group determines the recoverable amount of a reporting unit using the higher between the value in use and the fair value less costs to sell,
which utilize significant unobservable inputs (Level 3) within the fair value hierarchy. The impairment test for intangible assets not subject to amortization
involves a comparison of the estimated recoverable amount of the intangible asset with its carrying amount. The Group determines the recoverable amount
of the intangible asset using a discounted cash flow analysis, which utilizes significant unobservable inputs (Level 3) within the fair value hierarchy.
Determining recoverable amount requires the exercise of significant judgment, including judgment about appropriate discount rates, perpetual growth rates,
the amount and timing of expected future cash flows for a period of time that comprise five years, as well as relevant comparable company earnings
multiples for the market-based approach.
Once an asset has been impaired, it is not remeasured at fair value on a recurring basis; however, it is still subject to recoverable amount measurements
to test for recoverability of the carrying amount.
16. Post-employment Benefits
Certain companies in the Group have defined benefit pension plans for certain eligible executives and employees. All pension benefits are based on salary
and years of service rendered.
Under the provisions of the Mexican Labor Law, seniority premiums are payable based on salary and years of service to employees who resign or are
terminated prior to reaching retirement age. Some companies in the Group have seniority premium benefits which are greater than the legal requirement.
Post-employment benefits are actuarially determined by using nominal assumptions and attributing the present value of all future expected benefits
proportionately over each year from date of hire to age 65.
The Group used actuarial assumptions to determine the present value of defined benefit obligations, as follows:
2024
2023
Discount rate
10.5 %
10.4 %
Salary increase
5.2 %
5.2 %
Inflation rate
3.7 %
3.7 %
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F-56
Had the discount rate of 10.5% used by the Group in 2024 been decreased by 50 basis points, the impact on defined benefit obligation would have been an
increase to Ps.1,238,452 as of December 31, 2024.
Had the discount rate of 10.4% used by the Group in 2023 been decreased by 50 basis points, the impact on defined benefit obligation would have been an
increase to Ps.1,237,945 as of December 31, 2023.
The reconciliation between defined benefit obligations and post-employment benefit liability in the consolidated statements of financial position as of
December 31, 2024 and 2023, is presented as follows:
As of December 31, 2024
Seniority
Pensions
Premiums
2024
Vested benefit obligations
Ps.
322,385
Ps.
270,291
Ps.
592,676
Unvested benefit obligations
239,811
371,977
611,788
Defined benefit obligations
562,196
642,268
1,204,464
Fair value of plan assets
389,703
42,279
431,982
Underfunded status of the plans
Ps.
172,493
Ps.
599,989
Ps.
772,482
Post-employment benefit liability
Ps.
172,493
Ps.
599,989
Ps.
772,482
As of December 31, 2023
Seniority
Pensions
Premiums
2023
Vested benefit obligations
Ps.
407,652
Ps.
238,295
Ps.
645,947
Unvested benefit obligations
271,570
290,011
561,581
Defined benefit obligations
679,222
528,306
1,207,528
Fair value of plan assets
436,091
38,388
474,479
Underfunded status of the plans
Ps.
243,131
Ps.
489,918
Ps.
733,049
Post-employment benefit liability
Ps.
243,131
Ps.
489,918
Ps.
733,049
The components of net periodic pensions and seniority premiums cost for the years ended December 31, 2024 and 2023 consisted of the following:
2024
2023
Service cost
Ps.
76,323
Ps.
82,190
Interest cost
109,698
110,925
Prior service cost for plan amendments
(14,694)
(64,812)
Interest on plan assets
(35,596)
(40,646)
Net periodic cost
Ps.
135,731
Ps.
87,657
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F-57
The Group’s defined benefit obligations, plan assets, funded status and balances in the consolidated statements of financial position as of December 31,
2024 and 2023, associated with post-employment benefits, are presented as follows:
Seniority
Pensions
Premiums
2024
2023
Defined benefit obligations:
Beginning of year
Ps.
679,222
Ps.
528,306
Ps.
1,207,528
Ps.
1,277,233
Retirement of spun-off businesses
(65,049)
(20,906)
(85,955)
—
Service cost
23,696
52,627
76,323
82,190
Interest cost
59,372
50,326
109,698
110,925
Benefits paid
(123,417)
(35,108)
(158,525)
(73,644)
Remeasurement of post-employment benefit obligations
(4,724)
74,813
70,089
(124,364)
Past service cost
(6,904)
(7,790)
(14,694)
(64,812)
End of year
562,196
642,268
1,204,464
1,207,528
Fair value of plan assets:
Beginning of year
436,091
38,388
474,479
505,765
Retirement of spun-off businesses
(907)
(981)
(1,888)
—
Return on plan assets
32,003
3,593
35,596
40,646
Remeasurement on plan assets
5,573
1,737
7,310
(40,429)
Benefits paid
(83,057)
(458)
(83,515)
(31,503)
End of year
389,703
42,279
431,982
474,479
Unfunded status of the plans
Ps.
172,493
Ps.
599,989
Ps.
772,482
Ps.
733,049
The changes in the net post-employment liability in the consolidated statements of financial position as of December 31, 2024 and 2023, are as follows:
Seniority
Pensions
Premiums
2024
2023
Net post-employment liability at beginning of year
Ps.
243,131
Ps.
489,918
Ps.
733,049
Ps.
771,468
Retirement of spun-off businesses
(64,142)
(19,925)
(84,067)
—
Net periodic cost
44,161
91,570
135,731
87,657
Remeasurement of post-employment benefits
(10,297)
73,076
62,779
(83,935)
Benefits paid
(40,360)
(34,650)
(75,010)
(42,141)
Net post-employment liability at end of year
Ps.
172,493
Ps.
599,989
Ps.
772,482
Ps.
733,049
The post-employment benefits as of December 31, 2024 and 2023, and remeasurements adjustments for the years ended December 31, 2024 and 2023, are
summarized as follows:
2024
2023
Pensions:
Defined benefit obligations
Ps.
562,196
Ps.
679,222
Plan assets
389,703
436,091
Unfunded status of plans
172,493
243,131
Remeasurements adjustments (1)
(10,297)
(70,149)
Seniority premiums:
Defined benefit obligations
Ps.
642,268
Ps.
528,306
Plan assets
42,279
38,388
Unfunded status of plans
599,989
489,918
Remeasurements adjustments (1)
73,076
(13,786)
(1)
On defined benefit obligations and plan assets.
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F-58
Pensions and Seniority Premiums Plan Assets
The plan assets are invested according to specific investment guidelines determined by the technical committees of the pension plan and seniority
premiums trusts and in accordance with actuarial computations of funding requirements. These investment guidelines require a minimum investment of
30% of the plan assets in fixed rate instruments, or mutual funds comprised of fixed rate instruments. The plan assets that are invested in mutual funds are
all rated “AA” or “AAA” by at least one of the main rating agencies. These mutual funds vary in liquidity characteristics ranging from one day to one
month. The investment goals of the Group’s plan assets are to preserve principal amounts, diversify the portfolio, maintain a high degree of liquidity and
credit quality, and deliver competitive returns subject to prevailing market conditions. Currently, the plan assets do not engage in the use of financial
derivative instruments. The Group’s target allocation in the foreseeable future is to maintain approximately 30% in equity securities and 70% in fixed rate
instruments.
The weighted average asset allocation of the plan assets by asset category as of December 31, 2024 and 2023, was as follows:
2024
2023
Equity securities (1)
45.0 %
42.1 %
Fixed rate instruments
55.0 %
57.9 %
Total
100.0 %
100.0 %
(1)
Included within plan assets at December 31, 2024 and 2023, are shares of the Company held by the trust with a fair value of Ps.21,236 and Ps.34,851,
respectively.
The weighted average expected long-term rate of return of plan assets of 10.48% and 10.42% were used in determining net periodic pension cost in 2024
and 2023, respectively. The rate used reflected an estimate of long-term future returns for the plan assets. This estimate was primarily a function of the asset
classes (equities versus fixed income) in which the plan assets were invested and the analysis of past performance of these asset classes over a long period
of time.
This analysis included expected long-term inflation, and the risk premiums associated with equity investments and fixed income investments.
The following table summarizes the Group’s plan assets measured at fair value on a recurring basis as of December 31, 2024 and 2023:
Quoted Prices in
Internal Models
Internal Models
Balance as of
Active Markets
with Significant
with Significant
December 31,
for Identical
Observable
Unobservable
2024
Assets (Level 1)
Inputs (Level 2)
Inputs (Level 3)
Common Stocks (1)
Ps.
21,236
Ps.
21,236
Ps.
—
Ps.
—
Mutual funds (fixed rate instruments) (2)
25,095
25,095
—
—
Money market securities (3)
207,910
207,910
—
—
Other equity securities
165,755
165,755
—
—
Total investment assets
419,996
419,996
—
—
Cash management
11,986
—
—
—
Total investment assets and cash management
Ps.
431,982
Ps.
419,996
Ps.
—
Ps.
—
Quoted Prices in
Internal Models
Internal Models
Balance as of
Active Markets
with Significant
with Significant
December 31,
for Identical
Observable
Unobservable
2023
Assets (Level 1)
Inputs (Level 2)
Inputs (Level 3)
Common Stocks (1)
Ps.
34,851
Ps.
34,851
Ps.
—
Ps.
—
Mutual funds (fixed rate instruments) (2)
23,703
23,703
—
—
Money market securities (3)
238,556
238,556
—
—
Other equity securities
163,698
163,698
—
—
Total investment assets
460,808
460,808
—
—
Cash management
13,671
—
—
—
Total investment assets and cash management
Ps.
474,479
Ps.
460,808
Ps.
—
Ps.
—
(1)
Common stocks are valued at the closing price reported on the active market on which the individual securities are traded. All common stock included
in this line item relate to the Company’s CPOs.
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F-59
(2)
Mutual funds consist of fixed rate instruments. These are valued at the net asset value provided by the administrator of the fund.
(3)
Money market securities consist of government debt securities, which are valued based on observable prices from the new issue market, benchmark
quotes, secondary trading and dealer quotes.
The Group did not make significant contributions to its plan assets in 2024 and 2023 and does not expect to make significant contributions to its plan assets
in 2025.
The weighted average duration of the defined benefit plans as of December 31, 2024 and 2023, were as follows:
2024
2023
Seniority Premiums
8.8 years
9.0 years
Pensions
2.9 years
3.0 years
17.
Capital Stock and Long-Term Retention Plan
Capital Stock
The Company has four classes of capital stock: Series “A” Shares, Series “B” Shares, Series “D” Shares and Series “L” Shares, with no par value. The
Series “A” Shares and Series “B” Shares are common shares. The Series “D” Shares are limited-voting and preferred dividend shares, with a preference
upon liquidation. The Series “L” Shares are limited-voting shares.
The Company’s shares are publicly traded in Mexico, primarily in the form of Ordinary Participation Certificates (“CPOs”), each CPO representing 117
shares comprised of 25 Series “A” Shares, 22 Series “B” Shares, 35 Series “D” Shares and 35 Series “L” Shares; and in the United States in the form of
Global Depositary Shares (“GDS”), each GDS representing five CPOs. Non-Mexican holders of CPOs do not have voting rights with respect to the
Series “A”, Series “B” and Series “D” Shares.
At December 31, 2024, shares of capital stock and CPOs consisted of (in millions):
Repurchased
Held by a
Authorized and
by the
Company’s
Issued (1)
Company (2)
Trust (3)
Outstanding
Series “A” Shares
118,614.2
—
(6,993.9)
111,620.3
Series “B” Shares
54,882.2
—
(6,139.9)
48,742.3
Series “D” Shares
83,562.7
—
(6,018.1)
77,544.6
Series “L” Shares
83,562.7
—
(6,018.1)
77,544.6
Total
340,621.8
—
(25,170.0)
315,451.8
Shares in the form of CPOs
279,337.5
—
(20,117.7)
259,219.8
Shares not in the form of CPOs
61,284.3
—
(5,052.3)
56,232.0
Total
340,621.8
—
(25,170.0)
315,451.8
CPOs
2,387.5
—
(171.9)
2,215.6
(1)
As of December 31, 2024, the authorized and issued capital stock amounted to Ps.3,933,549 (nominal Ps.1,970,999). In connection with the Spin-off
carried out on January 31, 2024, and the Company’s distribution of the Spun-off Businesses to Ollamani, the Company reduced its capital stock on that
date in the amount of Ps.752,071 (nominal Ps.376,844), without having modified the number of outstanding shares of the Company (see Notes 3 and
28).
(2)
In connection with a share repurchase program that was approved by the Company’s stockholders and is exercised at the discretion of management.
During the year ended December 31, 2024, the Company did not buy any shares under this program. In April 2024, the Company´s stockholders
approved the cancellation in May 2024 of 3,217.5 million shares of the Company’s capital stock in the form of 27.5 million CPOs, which were
repurchased by the Company in 2023.
(3)
Primarily in connection with the Company’s Long - Term Retention Plan (“LTRP”) described below.
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F-60
A reconciliation of the number of shares and CPOs outstanding for the years ended December 31, 2024 and 2023, is presented as follows (in millions):
Series “A”
Series “B”
Series “D”
Series “L”
Shares
CPOs
Shares
Shares
Shares
Shares
Outstanding Outstanding
As of January 1, 2023
114,750.2
51,649.7
82,169.9
82,169.9
330,739.7
2,347.7
Acquired (1)
(1,742.5)
(1,533.4)
(2,439.5)
(2,439.5)
(8,154.9)
(69.7)
Forfeited (2)
(139.4)
(122.7)
(195.2)
(195.2)
(652.5)
(5.6)
Acquired (2)
(316.9)
(278.9)
(443.6)
(443.6)
(1,483.0)
(12.7)
Released (2)
890.3
630.7
1,003.1
1,003.1
3,527.2
28.7
As of December 31, 2023
113,441.7
50,345.4
80,094.7
80,094.7
323,976.5
2,288.4
Acquired (2)
(976.2)
(859.2)
(1,366.8)
(1,366.8)
(4,569.0)
(39.0)
Forfeited (2)
(1,466.9)
(1,290.9)
(2,053.6)
(2,053.6)
(6,865.0)
(58.7)
Released (2)
621.7
547.0
870.3
870.3
2,909.3
24.9
As of December 31, 2024
111,620.3
48,742.3
77,544.6
77,544.6
315,451.8
2,215.6
(1)
Repurchased or cancelled by the Company in connection with a share repurchase program.
(2)
Acquired, released, cancelled or forfeited by a Company’s trust in connection with the Company’s LTRP described below.
Under the Company’s bylaws, the Company’s Board of Directors consists of 20 members, of which the holders of Series “A” Shares, Series “B” Shares,
Series “D” Shares and Series “L” Shares, each voting as a class, are entitled to elect eleven members, five members, two members and two members,
respectively.
Holders of Series “D” Shares are entitled to receive a preferred dividend equal to 5% of the nominal capital attributable to those Shares (nominal
Ps.0.00028932372948 per share) before any dividends are payable in respect of Series “A” Shares, Series “B” Shares or Series “L” Shares. Holders of
Series “A” Shares, Series “B” Shares and Series “L” Shares are entitled to receive the same dividends as holders of Series “D” Shares if stockholders
declare dividends in addition to the preferred dividend that holders of Series “D” Shares are entitled to. If the Company is liquidated, Series “D” Shares are
entitled to a liquidation preference equal to the nominal capital attributable to those Shares nominal Ps.0.00578647458969 per share before any distribution
is made in respect of Series “A” Shares, Series “B” Shares and Series “L” Shares.
At December 31, 2024, the restated for inflation tax value of the Company’s common stock was Ps.52,707,375 In the event of any capital reduction in
excess of the tax value of the Company’s common stock, such excess will be treated as dividends for income tax purposes (see Note 18).
Long-Term Retention Plan
The Company has adopted a LTRP for the conditional sale of the Company’s capital stock to key Group officers and employees under a special purpose
trust.
At the Company’s annual general ordinary stockholders’ meeting held on April 2, 2013, the Company’s stockholders approved that the number of CPOs
that may be granted annually under the LTRP shall be up to 1.5% of the capital of the Company. As of December 31, 2024, approximately 21.0 million
CPOs or CPO equivalents that were transferred to LTRP participants were sold in the open market during 2022, 2023 and 2024. Additional sales will
continue to take place during or after 2025.
The special purpose trust created to implement the LTRP as of December 31, 2024 had approximately 208.1 million CPOs or CPO equivalents. This figure
is net of approximately 38.5 million, 28.6 million and 20.4 million CPOs or CPO equivalents vested in 2022, 2023 and 2024, respectively. Of the 208.1
million CPOs or CPO equivalents approximately 79.3% are in the form of CPOs and the remaining 20.7% are in the form of Series “A”, Series “B”,
Series “D” and Series “L” Shares, not in the form of CPO units. As of December 31, 2024, approximately 96.3 million CPOs or CPO equivalents were held
by a Company trust and will become vested between 2024 and 2026 at prices ranging from Ps.38.32 to Ps.1.60 per CPO, which may be reduced by
dividends, a liquidity discount and the growth of the consolidated or relevant segment Operating Income Before Depreciation and Amortization, or OIBDA
(including OIBDA affected by acquisitions) between the date of award and the vesting date, among others.
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F-61
Historically, the price at which the conditional sales of the awards were made to beneficiaries was based on the lowest of (i) the closing price of the CPO on
March 31 of the year of the relevant award, and (ii) the average price of the CPO during the first three months of the year of the relevant award. Beginning
with the grants awarded in respect of fiscal year 2020 under the LTRP, a portion of such awards is granted at the sale price described before, and the
remaining part of the relevant awards at a sale price equal to the nominal value of the CPO, which was determined at Ps.1.60 per CPO.
During the year ended December 31, 2024, the trust for the LTRP increased the number of shares and CPOs held for the purposes of this Plan in the amount
of (i) 4,569.0 million shares of the Company in the form of 39.0 million CPOs, which were acquired in the amount of Ps.378,894; (ii) 4,284.7 million
shares in the form of 36.6 million CPOs, and 88.1 million shares in the form of 0.8 million CPOs which were cancelled in the third and fourth quarter of
2024, respectively, in connection with agreements entered into by the Company and certain officers for shares that were conditionally sold to these
executives in 2019, which conditions had not yet been satisfied; and (iii) 2,492.2 million shares of the Company in the form of 21.3 million CPOs, in
connection with forfeited rights under this Plan. Also, the trust for the LTRP released 2,909.3 million shares of the Company in the form of 24.9 million
CPOs.
Following the completion of the TelevisaUnivision Transaction, the Board of Directors of the Company approved the following actions: (i) cancelling
certain sale contracts for 10.8 million CPOs, corresponding to unvested conditional to sales under the LTRP to certain officers and employees of the
Company in 2019, 2020 and 2021; and (ii) releasing 8.0 million CPOs under the corresponding grants to such individuals. The CPOs released under such
grants were sold at Ps.1.60 per CPO. In connection with this approval, the Company cancelled 10.8 million CPOs under such contracts and recognized the
release of 7.1 million CPOs in the first half of 2022.
In addition to the LTRP, the Company entered into conditional sale contracts with certain officers of the Group, primarily in February 2022, for 24.7
million CPOs, of which 23.9 million of CPOs and 0.8 million of CPOs were released as a share-based expense in the first quarter and second quarter of
2022, respectively.
During the year ended December 31, 2023, the trust for the LTRP increased the number of shares and CPOs held for the purposes of this Plan in the amount
of (i) 1,483.0 million shares of the Company in the form of 12.7 million CPOs, which were acquired in the amount of Ps.172,976; and (ii) 652.5 million
shares of the Company in the form of 5.6 million CPOs, in connection with forfeited rights under this Plan. Also, the trust for the LTRP released 3,353.5
million shares of the Company in the form of 28.7 million CPOs and 173.7 million Series “A” Shares not in the form of CPOs.
During the years ended December 31, 2024 and 2023, the Company made a funding for acquisition of shares in the aggregate amount of Ps.132,572 and
Ps.86,000, respectively, to the trust held for the Company’s LTRP.
The Group has determined its share-based compensation expense (see Note 2 (y)), by using the BSPM at the date on which the stock was conditionally sold
to certain officers and employees of the Company under the Company’s LTRP, based on the following arrangements and weighted-average assumptions:
Long-Term Retention Plan
Arrangements:
Year of grant
2022
2023
2024
Number of CPOs or CPOs equivalent granted
27,500
11,600
52,539
Contractual life
3.00 years
3.00 years
3.00 years
Assumptions:
Dividend yield
0.92 %
2.5 %
3.21 %
Expected volatility (1)
45.75 %
45.51 %
42.83 %
Risk-free interest rate
9.17 %
9.05 %
9.57 %
Expected average life of awards
3.00 years
3.00 years
3.00 years
(1)
Volatility was determined by reference to historically observed prices of the Company’s CPOs.
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F-62
A summary of the stock conditionally sold to employees under the LTRP as of December 31, 2024 and 2023, is presented below (in Mexican pesos and
thousands of CPOs):
2024
2023
CPOs or CPOs
Weighted-Average
CPOs or CPOs
Weighted-Average
Equivalent
Exercise Price
Equivalent
Exercise Price
Long-Term Retention Plan:
Outstanding at beginning of year
176,898
23.72
170,731
30.68
Conditionally sold
52,539
6.25
11,600
9.38
Paid by employees
(3,841)
1.60
(1,795)
1.60
Forfeited
(65,643)
41.09
(3,638)
70.14
Outstanding at end of year
159,953
11.64
176,898
23.72
To be paid by employees at end of year
63,643
17.09
107,822
33.05
As of December 31, 2024 and 2023, the weighted-average remaining contractual life of the stock conditionally sold to employees under the LTRP is 1.16
years and 1.18 years, respectively.
In addition to the LTRP, the Company entered into conditional sale contracts with members of its Board of Directors for 1.7 and 4.5 million CPOs in
July 2022 and October 2023, respectively, with vesting periods of nine and six months, respectively, and with certain officers of the Group for 7.5 and 17.2
million CPOs in December 2021 and January 2022 respectively, with vesting periods of three years.
18. Retained Earnings and Accumulated Other Comprehensive Income or Loss
(a) Retained Earnings:
Net Income
Legal
Unappropriated
(Loss)
Retained
Reserve
Earnings
for the Year
Earnings
Balance at January 1, 2023
Ps.
2,139,007
84,202,672
44,712,180
131,053,859
Appropriation of net income relating to 2022
—
44,712,180
(44,712,180)
—
Dividends
—
(1,027,354)
—
(1,027,354)
Sale of repurchased shares
—
(692,062)
—
(692,062)
Cancellation of sale of shares
—
79,196
—
79,196
Share-based compensation
—
748,500
—
748,500
Shares cancellation
—
(1,339,107)
—
(1,339,107)
Net loss attributable to stockholders of the Company
—
—
(8,422,730)
(8,422,730)
Balance at December 31, 2023
2,139,007
126,684,025
(8,422,730)
120,400,302
Spun-off Businesses to Ollamani
(340,623)
(5,560,995)
—
(5,901,618)
Appropriation of net income relating to 2023
—
(8,422,730)
8,422,730
—
Dividends
—
(1,018,954)
—
(1,018,954)
Sale of repurchased shares
—
736,165
—
736,165
Cancellation of sale of shares
—
1,636,187
—
1,636,187
Share-based compensation
—
488,832
—
488,832
Shares cancellation
—
(336,213)
—
(336,213)
Acquisition of non-controlling interests in Sky
—
4,301,921
—
4,301,921
Net loss attributable to stockholders of the Company
—
—
(8,265,520)
(8,265,520)
Balance at December 31, 2024
Ps.
1,798,384 Ps.
118,508,238 Ps.
(8,265,520) Ps.
112,041,102
In accordance with Mexican law, the legal reserve must be increased by 5% of annual net profits until it reaches 20% of the capital stock amount. As of
December 31, 2024 and 2023, the Company’s legal reserve amounted to Ps. 1,798,384 and Ps. 2,139,007, respectively, and was classified into retained
earnings in consolidated equity. As the legal reserve reached 20% of the capital stock amount, no additional increases were required in 2024, 2023 and
2022. This reserve is not available for dividends but may be used to reduce a deficit or may be transferred to stated capital. Other appropriations of profits
require the vote of the Company’s stockholders.
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In April 2022, the Company’s stockholders approved the payment of a dividend of Ps.0.35 per CPO and Ps.0.002991452991 per share of Series “A,” “B,”
“D” and “L” Shares, not in the form of a CPO unit, which was paid in cash in May 2022, in the aggregate amount of Ps.1,053,392.
In April 2023, the Company’s stockholders approved the payment of a dividend of Ps.0.35 per CPO and Ps.0.002991452991 per share of Series “A,” “B,”
“D” and “L” Shares, not in the form of a CPO unit, which was paid in cash in May 2023, in the aggregate amount of Ps.1,027,354.
In April 2024, the Company’s stockholders approved the payment of a dividend of Ps.0.35 per CPO and Ps.0.002991452991 per share of Series “A,” “B,”
“D” and “L” Shares, not in the form of a CPO unit, which was paid in cash in May 2024, in the aggregate amount of Ps.1,018,954.
Dividends, either in cash or in other forms, paid by the Mexican companies in the Group will be subject to income tax if the dividends are paid from
earnings that have not been subject to Mexican income tax computed on an individual company basis under the provisions of the Mexican Income Tax
Law. In this case, dividends will be taxable by multiplying such dividends by a 1.4286 factor and applying to the resulting amount the income tax rate of
30%. This income tax will be paid by the company paying the dividends.
In addition, the entities that distribute dividends to its stockholders who are individuals or foreign residents must withhold 10% thereof for income tax
purposes, which will be paid in Mexico. The foregoing will not be applicable when distributed dividends arise from the “taxed net earnings account”
computed on an individual company basis generated through December 31, 2013.
As of December 31, 2024, cumulative earnings that have been subject to income tax and can be distributed by the Company free of Mexican income tax
amounted to Ps.94,198,753.
(b) Accumulated Other Comprehensive Income or Loss:
Exchange
Remeasurement
Derivative
Share of
Exercised
Differences on
of Post-
Financial
Income
Other
Warrants for
Translating
Employment
Instruments
of Associates
Open-Ended
Equity
Common Stock
Foreign
Benefit
Cash Flow
and Joint
Income
Fund
Instruments
of UHI (1)
Operations
Obligations
Hedges
Ventures
Taxes
Total
Accumulated at January 1, 2023
Ps.
1,373,185 Ps.
(391,611)
Ps.
(23,602,220)
Ps.
810,294 Ps.
(908,411)
Ps.
407,900 Ps.
4,354,812
Ps.
7,132,173 Ps.
(10,823,878)
Changes in other comprehensive
(loss) or income
(741)
(698,903)
—
(711,843)
81,616
(287,536)
4,278,531
(1,704,039)
957,085
Accumulated at
December 31, 2023
1,372,444
(1,090,514)
(23,602,220)
98,451
(826,795)
120,364
8,633,343
5,428,134
(9,866,793)
Changes in other comprehensive
(loss) or income
(66,098)
(202,208)
—
285,502
(51,684)
1,857,456
(7,061,676)
2,222,726
(3,015,982)
Accumulated at
December 31, 2024
Ps.
1,306,346 Ps.
(1,292,722)
Ps.
(23,602,220)
Ps.
383,953 Ps.
(878,479)
Ps.
1,977,820 Ps.
1,571,667
Ps.
7,650,860 Ps.
(12,882,775)
(1)
On December 29, 2020, the Group exercised its former investment in warrants issued by UHI, the predecessor company of TelevisaUnivision, for
common stock of UHI.
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F-64
19. Non-controlling Interests
Non-controlling interests as of December 31, 2024 and 2023, consisted of:
2024
2023
Capital stock
Ps.
771,485
Ps.
1,092,623
Additional paid-in capital
2,952,806
2,970,693
Legal reserve
149,970
214,198
Retained earnings from prior years (1)
5,449,774
11,402,282
Net (loss) income for the year
(62,860)
(384,522)
Accumulated other comprehensive income (loss):
Cumulative result from foreign currency translation
—
108,629
Remeasurement of post-employment benefit obligations on defined benefit plans
(19,606)
(11,839)
Ps.
9,241,569
Ps.
15,392,064
(1)
In the years ended December 31, 2024 and 2023, the Group did not pay dividends to its non-controlling interests.
In June 2024, the Group concluded an agreement for the acquisition of an interest in Sky previously held by AT&T as a non - controlling interest and
became owner of 100% of the equity of Sky. As a result of this transaction, the Group (i) reduced its non-controlling interests in consolidated equity; (ii)
increased its consolidated retained earnings attributable to stockholders of the Company in the amount of Ps.4,301,921, which resulted primarily from the
excess of the amount of the non-controlling interest acquired measured in accordance with IFRS over the fair value of the liability assumed by the Group;
and (iii) accounted for the transaction price to be paid in 2027 and 2028, as part of other long-term liabilities in the Group’s consolidated statement of
financial position as of December 31, 2024 (see Note 3).
Amounts of consolidated current assets, non-current assets, current liabilities and non-current liabilities of Empresas Cablevisión as of December 31, 2024
and 2023, and Sky as of December 31, 2023, are set forth as follows:
Empresas Cablevisión (1)
Sky (2)
2024
2023
2023
Assets:
Current assets
Ps.
8,351,193
Ps.
7,255,601
Ps.
6,812,940
Non-current assets
19,935,495
21,178,757
15,638,619
Total assets
28,286,688
28,434,358
22,451,559
Liabilities:
Current liabilities
7,050,863
5,047,055
3,255,555
Non-current liabilities
1,727,061
3,461,020
4,460,916
Total liabilities
8,777,924
8,508,075
7,716,471
Net assets
Ps.
19,508,764
Ps.
19,926,283
Ps.
14,735,088
(1)
Company’s non-controlling interest of 48.5% and 48.8% as of December 31, 2024, and 2023, respectively.
(2)
Company’s non-controlling interest of 41.3% as of December 31, 2023.
Amounts of consolidated revenues, net income and comprehensive income of Empresas Cablevisión and Sky for the years ended December 31, 2024 and
2023, are set forth as follows:
Empresas Cablevisión
Sky
2024
2023
2023
Revenues
Ps.
14,628,084
Ps.
15,125,879
Ps.
17,585,229
Net (loss) income
(93,660)
(882,775)
(61,224)
Comprehensive (loss) income
(110,247)
(878,777)
(175,719)
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F-65
Amounts of consolidated summarized cash flows of Empresas Cablevisión and Sky for the years ended December 31, 2024 and 2023, are set forth as
follows:
Empresas Cablevisión
Sky
2024
2023
2023
Cash flows from operating activities
Ps.
5,037,835
Ps.
3,205,302
Ps.
4,963,930
Cash flows used in investing activities
(1,696,109)
(2,824,154)
(2,589,738)
Cash flows used in financing activities
(1,575,575)
(543,845)
(2,104,214)
Net increase (decrease) in cash and cash equivalents
Ps.
1,766,151
Ps.
(162,697)
Ps.
269,978
20. Related Parties
The principal transactions carried out by the Group with related parties, including affiliated companies, equity investees, stockholders and entities in which
stockholders have an equity interest, for the years ended December 31, 2024, 2023 and 2022, were as follows:
2024
2023
2022
Revenues, other income and interest income:
Royalties (a)
Ps.
111,766
Ps.
—
Ps.
660,842
Programming production and transmission rights (b)
1,312,319
1,516,369
1,453,105
Telecom services (c)
650,197
466,957
205,591
Administrative services (d)
220,027
73,430
105,127
Advertising (e)
1,659,121
1,902,307
1,854,152
Interest income (f)
540,488
685,098
618,921
Lease (i)
529,716
412,329
408,893
Ps.
5,023,634
Ps.
5,056,490
Ps.
5,306,631
Costs and expenses:
Donations
Ps.
30,000 Ps.
30,000 Ps.
26,229
Advertising
167,079
266,834
297,497
Administrative services (d)
83,870
66,597
125,053
Interests expense
12,798
—
—
Technical services (g)
—
299,192
391,896
Programming production, transmission rights and telecom (h)
4,412,001
5,176,944
4,499,464
Ps.
4,705,748 Ps.
5,839,567 Ps.
5,340,139
(a)
Through January 31, 2022, the Group received royalties from Univision for programming provided pursuant to an amended PLA, pursuant to which
Univision had the right to broadcast certain Group’s content in the United States. The amended PLA was terminated by the parties on January 31,
2022, in conjunction with the TelevisaUnivision Transaction. The amended PLA and the TelevisaUnivision Transaction included a provision for certain
yearly minimum guaranteed advertising, with a value of U.S.$10.6 million (Ps.180,331) and U.S.$10.8 million (Ps.211,829), for the fiscal years 2023
and 2022, respectively, to provide by Univision, at no cost, for the promotion of certain businesses of the Group’s former Other Businesses segment.
This advertising did not have commercial substance for the Group, as it was related to activities that were considered ancillary to Group’s normal
operations in the United States. In 2024, royalties are included for use of brands provided to Ollamani (see Notes 3, 9 and 10).
(b)
Services rendered to Univision in 2024, 2023 and 2022. From 2022 include transmission costs of concession rights owned by the Group.
(c)
Services provided to Ollamani in 2024, to Univision in 2024, 2023 and 2022, and to a subsidiary of AT&T in 2023 and 2022. Until June 2024, AT&T
was a related party (see Note 3).
(d)
The Group receives revenue from and is charged by affiliates for various services, such as: property and equipment rental, security and other services,
at rates which are negotiated. The Group provides management services to affiliates, which reimburse the Group for the incurred payroll and related
expenses. Includes administrative services to Triton, certain TelevisaUnivision and Ollamani companies.
(e)
In 2024, 2023 and 2022 the Cable and Sky segments recognized advertising revenue from TelevisaUnivision.
(f)
In 2024, 2023 and 2022, included interest income from GTAC and Televisa, S. de R.L. de C.V., the latter in connection with a long-term credit
agreement with the Company, as described below.
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(g)
In 2023 and 2022, Sky received services from a subsidiary of AT&T for play-out, uplink and downlink of signals.
(h)
Paid mainly to Univision and GTAC in 2022. The Group paid royalties to Univision for programming provided pursuant to a Mexico License
Agreement, under which the Group had the right to broadcast certain Univision content in Mexico for the same term as that of the PLA. The Group
paid these royalties through January 31, 2022, as a result of the TelevisaUnivision Transaction, which was closed on that date (see Notes 3, 9 and 10).
It also included payments for telecom services to GTAC, payments for transmission rights to AT&T in 2023 and 2022, and the cost of programming of
TelevisaUnivision for the Cable and Sky segments in 2024, 2023 and 2022.
(i)
Includes operating lease agreements with certain companies of TelevisaUnivision, Ollamani and Tritón.
Other transactions with related parties carried out by the Group in the normal course of business include the following:
(1) Two Mexican banks have made loans to the Group. Some members of the Company’s Board serve or have served as Board members of these banks.
(2) Several other current members of the Company’s Board serve as members of the Boards and/or are stockholders of other companies, some of which
purchased advertising services from the Group in connection with the promotion of their respective products and services.
(3) During 2024, 2023 and 2022, a professional services firm in which the current Secretary of the Company’s Board maintains an interest, provided legal
advisory services to the Group in connection with various corporate matters. Total fees for such services amounted to Ps.38,110, Ps.31,168 and
Ps.16,861, respectively.
(4) During 2024, 2023 and 2022, a professional services firm in which two current directors of the Company maintain an interest provided finance
advisory services to the Group in connection with various corporate matters. Total fees for such services amounted to Ps.18,815, Ps.17,068 and
Ps.18,021, respectively.
(5) In 2024, 2023 and 2022, the Group entered into contracts leasing office space directly or indirectly from certain of our directors and officers for an
aggregate annual amount of Ps.27,743, Ps.32,263 and Ps.25,320, respectively.
During 2024, 2023 and 2022, the Group paid to its directors, alternate directors and officers an aggregate compensation of Ps.527,596, Ps.692,869 and
Ps.963,254, respectively, for services in all capacities. This compensation included certain amounts related to the use of assets and services of the Group, as
well as travel expenses reimbursed to directors and officers. Projected benefit obligations related to the Group’s directors, alternate directors and officers
amounted to Ps.228,912, Ps.206,851 and Ps.178,340 as of December 31, 2024, 2023 and 2022, respectively. Cumulative contributions made by the Group
to the pension and seniority premium plans on behalf of these directors and officers amounted to Ps.78,808, Ps.75,479 and Ps.64,042 as of December 31,
2024, 2023 and 2022, respectively. In addition, the Group has made conditional sales of the Company’s CPOs to its directors and officers under the LTRP.
In 2021, the Group established a deferred compensation plan for certain key officers of its Cable segment, which would be payable if certain revenue and
income targets (as defined by the five-year plan) were met. The present value of this long-term employee benefit obligation as of December 31, 2022,
amounted to Ps.337,450 and was presented in other long-term liabilities in the Group’s consolidated statement of financial position as of that date, and the
related service net cost for the year ended December 31, 2022, amounted to Ps.129,810, and was classified in other expense, net, in the Group’s
consolidated statement of income for the year ended on that date. In the fourth quarter of 2023, the Group’s management decided to substitute this deferred
compensation plan for a compensation to key officers to be paid if specific objectives are met on an annual basis, as a part of a continuing cost reduction
plan, and recognized a cancellation of the deferred compensation plan liability as other income in the Group’s consolidated statement of income for the year
ended December 31, 2023 (see Note 22).
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F-67
The balances of receivables and payables between the Group and related parties as of December 31, 2024 and 2023, were as follows:
2024
2023
Current receivables:
Televisa, S. de R.L. de C.V. (“Televisa”) (1) (2)
Ps.
200,156
Ps.
1,044,105
Ollamani
30,179
—
Televisa Producciones, S.A. de C.V. (1)
24,020
182,218
ECO Producciones, S.A. de C.V. (1)
11,012
11,188
Tritón Comunicaciones, S.A. de C.V.
20,803
20,136
TelevisaUnivision
6,837
125,903
Cadena de las Américas, S.A. de C.V. (1)
—
8,273
Other
46,546
58,415
Ps.
339,553
Ps.
1,450,238
Non-current receivables:
Televisa (1) (3)
Ps.
3,293,463
Ps.
4,630,459
Current payables:
Televisa (1) (2)
Ps.
195,820
Ps.
497,452
AT&T
—
29,384
TelevisaUnivision
—
14,024
Desarrollo Vista Hermosa, S.A. de C.V. (1)
—
7,631
Ollamani
4,841
—
Other
1,753
30,532
Ps.
202,414
Ps.
579,023
(1)
An indirect subsidiary of TelevisaUnivision.
(2)
Receivables from Televisa included cost of transmission as of December 31, 2024 and 2023. Through December 31, 2023, receivables from Televisa
were related primarily to transmission rights. Payables to Televisa were related primarily to programming services for our Cable and Sky segments.
(3)
In January 2022, Televisa entered into a long-term credit agreement with the Company in the principal amount of Ps.5,738,832, with a fixed annual
interest rate of 10.2% through October 2023, and 12.8% thereafter. Under the terms of this agreement, principal and interest are payable at maturity on
April 30, 2026, and prepayments of principal can be made by debtor at any time without any penalty . In 2023 and 2024, Televisa made prepayments
of principal in the amounts of Ps.2,374,640 and Ps.1,817,076, respectively. During the years 2024 and 2023, amounts receivable from Televisa in
connection with this long-term credit amounted to Ps.3,293,463 and Ps.4,630,459, respectively.
In connection with the TelevisaUnivision Transaction closed on January 31, 2022, the Group recognized as deferred revenue a prepayment made by
TelevisaUnivision in the aggregate amount of U.S.$276.2 million (Ps.5,729,377), for the use of concession rights owned by the Group over a period ending
in January 2042. The current and non-current portions of this deferred revenue amounted to Ps.287,667 and Ps.4,602,679, and Ps.287,667 and
Ps.4,890,347, as of December 31, 2024 and 2023, respectively (see Notes 2 and 3).
All significant current account balances included in amounts due from related parties bear interest. In 2024 and 2023, the Group charged average interest
rates of 12.0 % and 12.6%, respectively. Advances and receivables are short-term in nature; however, these current accounts do not have specific due dates.
In 2012, a subsidiary of the Company entered into an amended lease contract with GTAC for the right to use certain capacity in a telecommunication
network. This amended lease agreement contemplates annual payments to GTAC in the amount of Ps.41,400 through 2029, with an annual interest rate of
the lower of TIIE plus 122 basis points or 6% (see Notes 10, 11 and 14).
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F-68
21. Cost of Revenues, Selling Expenses and Administrative Expenses
Cost of revenues include cost of acquired transmission rights at the moment of broadcasting, benefits to employees and post-employment benefits, network
maintenance and interconnections, satellite links, depreciation of property, plant and equipment, leases of real estate property, and amortization of
intangible assets.
Selling expenses and administrative expenses include primarily benefits to employees, sale commissions, post-employment benefits, share-based
compensation to employees, depreciation of property, plant and equipment, leases of real estate property, and amortization of intangibles.
The amounts of depreciation, amortization and other amortization included in cost of revenues, selling expenses, administrative expenses and discontinued
operations for the years ended December 31, 2024, 2023 and 2022, were as follows:
2024
2023
2022
Cost of revenues
Ps.
16,403,197
Ps.
17,938,429
Ps.
17,545,471
Selling expenses
160,392
237,581
353,937
Administrative expenses
3,994,892
3,353,367
3,169,084
Discontinued operations
31,508
361,840
524,046
Ps.
20,589,989 Ps.
21,891,217 Ps.
21,592,538
The amounts of expenses related to IFRS 16 included in cost of revenues, selling expenses and administrative expenses for the years ended December 31,
2024 and 2023, were as follows:
2024
2023
Expenses relating to variable lease payment not included in the measurement of the lease liability
Ps.
281,709
Ps.
746,404
Expenses relating to short-term leases and leases of low-value assets
177,946
245,752
Total
Ps.
459,655
Ps.
992,156
Expenses related to short-term employee benefits, share-based compensation and post-employment benefits and incurred by the Group for the years ended
December 31, 2024, 2023 and 2022, were as follows:
2024
2023
2022
Short-term employee benefits
Ps.
12,768,333
Ps.
14,066,490
Ps.
13,616,440
Other short-term employee benefits
571,359
795,740
1,130,535
Share-based compensation
488,832
748,500
968,628
Post-employment benefits
135,731
87,657
151,389
Discontinued operations
2,044,661
1,494,544
1,699,381
Ps.
16,008,916 Ps.
17,192,931 Ps.
17,566,373
2022 Labor Reform
In December 2022, the final phase to amend Articles 76 and 78 of the Federal Labor Law was approved, under which employees will be entitled to more
mandatory and paid vacation days. The amendment became effective on January 1, 2023. The amendment established that workers who have completed
one year of service will enjoy an annual and continuous paid vacation period of at least twelve working days, and that it will increase by two working days,
up to twenty, for each additional year of service. As of the sixth year, the vacation period will increase by two days for every five additional years of
service.
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F-69
22. Other Expense, Net
Other (expense) income for the years ended December 31, 2024, 2023 and 2022, is analyzed as follows:
2024
2023
2022
Impairment adjustments (1)
Ps.
(3,064,319)
Ps.
—
Ps.
—
Write-off of unrecoverable indirect taxes, net (2)
(1,151,869)
—
—
Legal and financial advisory and professional services (3)
(1,048,698)
(265,310)
(218,731)
Dismissal severance expense (4)
(776,069)
(1,003,358)
(115,974)
(Loss) gain on disposition of property and equipment
(622,233)
48,036
70,759
Surcharges for income taxes from prior years (5)
(405,916)
—
—
Donations (see Note 20)
(30,000)
(30,000)
(26,229)
Realized gain on sale of property (6)
2,582,339
—
—
Interest on Asset Tax recoverable from prior years
182,923
315,778
—
Expense related to Hurricane “Otis” (7)
—
(329,721)
—
Deferred compensation plan liability (8)
—
337,450
(129,810)
Gain on disposition of OCEN (9)
—
—
35,950
Lawsuit settlement agreement, net (10)
—
—
(425,762)
Other, net
(221,058)
13,324
(213,372)
Ps.
(4,554,900) Ps.
(913,801) Ps.
(1,023,169)
(1)
In 2024, included impairment adjustments of Ps.450,000 of goodwill in the Cable segment and Ps.2,614,319, in connection with intangible assets with
indefinite useful lives and other long-lived assets in the Sky segment (see Notes 2(s), 11,12 and 13).
(2)
In 2024 the Group made a net write-off of unrecoverable indirect taxes.
(3)
Included primarily advisory and professional services in connection with certain litigation, financial advisory, and other matters. In 2024, included a
provision for legal expenses in the amount of Ps.772,157 (see Notes 3 and 20).
(4)
Included severance expense for dismissals of personnel in the Group´s Cable and Sky segments, as a part of a continued cost reduction plan.
(5)
In 2024, included surcharges for income taxes in connection with income tax assessments made by the Mexican Tax authority for prior years.
(6)
In 2023 some companies in the Group sold property to companies in the Group’s former Other Businesses segment, which gain on sale of property
became realized on January 31, 2024, in connection with the Spin-off carried on by the Company on that date (see Note 3).
(7)
In 2023, includes non-recurring expense related to damage caused by Hurricane “Otis”.
(8)
In 2022, included the service cost of a long-term deferred compensation plan for certain officers of the Group’s Cable segment, which payment became
payable when certain financial targets (as defined in the plan) were met. In the fourth quarter of 2023, the Group cancelled a deferred compensation
plan for certain officers in the Group’s Cable segment and recognized an income for the write-off of the related liability (see Note 20).
(9)
In 2022, included a gain derived from an additional purchase price adjustment paid to the Company on disposition of its former 40% equity stake in
OCESA Entretenimiento, S.A. de C.V.
(10) In the fourth quarter 2022, the Company announced a settlement agreement for a class action lawsuit and recognized an expense of U.S.$21.5 million
(Ps.425,762) resulting from a related provision for the amount to be paid by the Company, net of an expected insurance reimbursement (see Note 27).
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F-70
23. Finance Expense, Net
Finance (expense) income, net, for the years ended December 31, 2024, 2023 and 2022, included:
2024
2023
2022
Interest expense (1)
Ps.
(7,975,554)
Ps.
(7,742,095)
Ps.
(9,529,207)
Other finance expense, net (2)
—
(134,847)
(110,739)
Foreign exchange loss, net (4)
(837,200)
(149,151)
(1,745,435)
Finance expense
(8,812,754)
(8,026,093)
(11,385,381)
Interest income (3)
3,343,856
3,180,192
2,129,011
Other finance income, net (2)
773,727
—
—
Finance income
4,117,583
3,180,192
2,129,011
Finance expense, net
Ps.
(4,695,171) Ps.
(4,845,901) Ps.
(9,256,370)
(1)
Interest expense for the years ended December 31, 2024, 2023 and 2022 included: (i) interest related to lease liabilities in accordance with the
guidelines of IFRS 16 Leases (“IFRS 16”), in the aggregate amount of Ps.291,802, Ps.347,365 and Ps.358,997, respectively; (ii) interest related to
satellite transponder lease agreement and other lease agreement that were recognized before adoption of IFRS 16, in the aggregate amount of
Ps.177,128, Ps.202,864 and Ps.257,938, respectively; (iii) interest related to dismantling obligations incurred primarily in connection with the Group’s
Cable segment networks, in the aggregate amount of Ps.58,051, Ps.61,762 and Ps.123,209, respectively; (iv) amortization of finance costs in the
aggregate amount of Ps.144,212, Ps.147,165 and Ps.292,189, respectively; and (v) finance expense (income) related to prepayment of long-term debt
in the aggregate amount of Ps.78,579 and Ps.(423,204), for the years ended December 31, 2024 and 2023, respectively (see Notes 2 and 14).
(2)
Other finance income or expense, net, included fair value net gain or loss from derivative financial instruments (see Note 15).
(3)
Interest income included primarily interest from cash equivalents.
(4)
Foreign exchange loss, net, for the years ended December 31, 2024, 2023 and 2022, resulted primarily from the depreciation and appreciation of the
Mexican peso against the U.S. dollar, respectively, on the Group’s average U.S. dollar-denominated net liability and asset position, respectively,
excluding designated hedging long-term debt of the Group’s investments in TelevisaUnivision and Open-Ended Fund (see Notes 2(e), 4 and 14). The
exchange rate of the Mexican peso against the U.S. dollar was of Ps.20.8691, Ps.16.9325 and Ps.19.4760, as of December 31, 2024, 2023 and 2022,
respectively.
24. Income Taxes
The income tax benefit (expense) for the years ended December 31, 2024, 2023 and 2022, was comprised of:
2024
2023
2022
Income taxes, current (1)
Ps.
(4,238,483)
Ps.
(1,771,404)
Ps.
(2,310,957)
Income taxes, deferred
3,549,896
(589,230)
3,663,846
Ps.
(688,587) Ps.
(2,360,634) Ps.
1,352,889
(1)
The current income tax of Mexican companies payable in Mexico represented 99%, 96% and 90% of total current income taxes in 2024, 2023 and
2022, respectively.
The Mexican corporate income tax rate was 30% in 2024, 2023 and 2022.
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F-71
The following items represent the principal differences between income taxes computed at the statutory rate and the Group’s provision for income taxes.
%
%
%
2024
2023
2022
Statutory income tax rate
30
30
30
Differences between accounting and tax bases, including tax inflation gain that is not recognized for
accounting purposes
6
(15)
(15)
Taxes from prior years
(6)
(15)
(2)
Tax loss carryforwards
(51)
(21)
6
2014 Tax Reform
—
—
(1)
Foreign operations
14
(10)
(7)
Share of loss in associates and joint ventures, net
(4)
(20)
(13)
Reversal of impairment loss in investment in shares of TelevisaUnivision
—
—
2
Discontinued operations
—
—
10
Recovery of asset tax from prior years
2
7
—
Effective income tax rate
(9)
(44)
10
The Group has recognized benefits from tax loss carryforwards of Mexican companies in the Group as of December 31, 2024 and 2023, for which it is
expected that they will be used before expiration based on tax projections. The years of expiration of these tax loss carryforwards as of December 31, 2024,
are as follows:
Tax Loss
Carryforwards
for Which
Deferred Taxes
Year of Expiration
Were Recognized
2025
Ps.
11,897,746
2026
329,150
2027
236,307
2028
1,173,961
2029
1,971,490
Thereafter
6,963,569
Ps.
22,572,223
As of December 31, 2024, tax loss carryforwards of Mexican companies in the Group for which deferred tax assets were not recognized amounted to
Ps.20,429,815 and will expire between 2025 and 2034.
As of December 31, 2024, tax loss carryforwards of subsidiaries in Central America, the United States and Europe amounted to Ps.1,820,292, of which
Ps.1,521,595 have no expiration date, and the remaining will expire between 2026 and 2037. The Group has not recognized any deferred tax assets in
connection with these tax loss carryforwards.
During 2024, 2023 and 2022, certain Mexican subsidiaries utilized operating tax loss carryforwards in the amounts of Ps.2,848,729, Ps.1,656,195 and
Ps.11,944,218, respectively.
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F-72
The deferred income taxes as of December 31, 2024 and 2023, were principally derived from the following temporary differences and tax loss
carryforwards:
2024
2023
Deferred Income Tax Assets:
Accrued liabilities (1)
Ps.
3,058,391
Ps.
3,115,699
Allowance for expected credit losses
458,366
606,257
Customer advances
1,820,602
1,583,352
Property, plant and equipment, net
6,798,230
4,643,270
Financial expenses pending tax deduction
4,904,829
1,112,726
Investments
398
—
Tax loss carryforwards:
Operating
3,129,246
4,014,487
Capital (2)
3,642,421
5,823,813
Deferred Income Tax Liabilities:
Investments
—
(722,530)
Prepaid expenses and other items (1)
(824,656)
(476,430)
Derivative financial instruments
(550,399)
(44,618)
Intangible assets and transmission rights
(3,491,393)
(2,842,087)
Deferred income tax assets of Mexican companies
18,946,035
16,813,939
Deferred income tax assets of certain foreign subsidiaries
433,278
335,651
Deferred income tax assets, net
Ps.
19,379,313
Ps.
17,149,590
(1)
Includes deferred income taxes derived from right-of-use assets of Ps.864,910 and lease liabilities of Ps.147,618.
(2)
Includes the benefit from tax loss carryforwards derived from the disposal in 2014 of the Group’s investment in GSF, in the amount of Ps.2,925,086
and Ps.4,678,136, as of December 31, 2024 and 2023, respectively.
The deferred tax assets are from tax jurisdictions in which the Group considers that based on financial projections of its cash flows, results of operations,
and synergies among companies in the Group, will generate taxable income in subsequent periods.
The gross roll-forward of deferred income tax assets, net, is as follows:
2024
2023
At January 1
Ps.
17,149,590
Ps.
17,520,493
Statement of income (charge) credit
3,549,896
(589,230)
Other comprehensive income (“OCI”) credit
(457,913)
270,973
Retained earnings credit
(15,589)
55,004
Discontinued operations
5,151
(107,650)
Spun-off Businesses
(851,822)
—
At December 31
Ps.
19,379,313
Ps.
17,149,590
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F-73
The roll-forward of deferred income tax assets and liabilities for the year 2024, was as follows:
Credit
Credit
(Charge) to
(Charge) to
Consolidated
Consolidated
Credit
Statement of
Statement of
(Charge)
Income
Income
to OCI and
At January 1,
(Continuing
(Discontinued
Spun-off
Retained
At December 31,
2024
Operations)
Operations)
Businesses
Earnings
2024
Deferred Income Tax Assets:
Accrued liabilities
Ps.
3,115,699
Ps.
220,536
Ps.
—
Ps.
(277,844)
Ps.
—
Ps.
3,058,391
Allowance for expected credit losses
606,257
(104,516)
—
(43,375)
—
458,366
Customer advances
1,583,352
239,752
—
(2,502)
—
1,820,602
Property, plant and equipment, net
4,643,270
2,247,022
—
(92,062)
—
6,798,230
Financial expenses pending tax deduction
1,112,726
3,850,444
—
(58,341)
—
4,904,829
Investments
—
398
—
—
—
398
Tax loss carryforwards
9,838,300
(3,054,606)
—
(12,027)
—
6,771,667
Deferred income tax assets of foreign
subsidiaries
335,651
97,627
—
—
—
433,278
Deferred Income Tax Liabilities:
Investments
(722,530)
657,628
—
—
64,902
—
Prepaid expenses and other items
(476,430)
(340,671)
5,151
(31,539)
18,833
(824,656)
Derivative financial instruments
(44,618)
51,456
—
—
(557,237)
(550,399)
Intangible assets and transmission rights
(2,842,087)
(315,174)
—
(334,132)
—
(3,491,393)
Deferred income tax assets, net
Ps.
17,149,590
Ps.
3,549,896
Ps.
5,151
Ps.
(851,822)
Ps.
(473,502)
Ps.
19,379,313
The roll-forward of deferred income tax assets and liabilities for the year 2023, was as follows:
(Charge)
Credit to
Consolidated
Credit
Statement of
(Charge)
Income
to OCI and
At January 1,
(Continuing
Retained
At December 31,
2023
Operations)
Earnings
2023
Deferred Income Tax Assets:
Accrued liabilities
Ps.
4,312,485
Ps.
(1,196,786)
Ps.
—
Ps.
3,115,699
Allowance for expected credit losses
607,773
(1,516)
—
606,257
Customer advances
2,335,751
(752,399)
—
1,583,352
Property, plant and equipment, net
3,923,889
719,381
—
4,643,270
Financial expenses pending tax deduction
1,040,210
72,516
—
1,112,726
Tax loss carryforwards
10,116,568
(278,268)
—
9,838,300
Deferred income tax assets of foreign subsidiaries
246,813
88,838
—
335,651
Deferred Income Tax Liabilities:
Investments
(700,285)
(287,142)
264,897
(722,530)
Prepaid expenses and other items
(1,589,317)
1,138,068
(25,181)
(476,430)
Derivative financial instruments
(130,879)
—
86,261
(44,618)
Intangible assets and transmission rights
(2,642,515)
(199,572)
—
(2,842,087)
Deferred income tax assets, net
Ps.
17,520,493
Ps.
(696,880)
Ps.
325,977
Ps.
17,149,590
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F-74
The tax (charge) credit of income taxes relating to components of other comprehensive income (loss), is as follows:
2024
Tax (Charge)
Before Tax
Credit
After Tax
Remeasurement of post-employment benefit obligations
Ps.
(62,779)
Ps.
18,833
Ps.
(43,946)
Exchange differences on translating foreign operations
285,502
2,683,967
2,969,469
Derivative financial instruments cash flow hedges
1,857,456
(557,237)
1,300,219
Open-Ended Fund
(66,098)
19,829
(46,269)
Other equity instruments
(202,208)
60,662
(141,546)
Share of income of associates and joint ventures
(7,061,676)
—
(7,061,676)
Other comprehensive income
Ps.
(5,249,803)
Ps.
2,226,054
Ps.
(3,023,749)
Current tax
Ps.
2,683,967
Deferred tax
(457,913)
Ps.
2,226,054
2023
Tax (Charge)
Before Tax
Credit
After Tax
Remeasurement of post-employment benefit obligations
Ps.
83,935
Ps.
(25,181)
Ps.
58,754
Exchange differences on translating foreign operations
(758,835)
(1,975,708)
(2,734,543)
Derivative financial instruments cash flow hedges
(287,536)
86,261
(201,275)
Open-Ended Fund
(741)
222
(519)
Other equity instruments
(698,903)
209,671
(489,232)
Share of income of associates and joint ventures
4,278,531
—
4,278,531
Other comprehensive income
Ps.
2,616,451
Ps.
(1,704,735)
Ps.
911,716
Current tax
Ps.
(1,975,708)
Deferred tax
270,973
Ps.
(1,704,735)
2022
Tax (Charge)
Before Tax
Credit
After Tax
Remeasurement of post-employment benefit obligations
Ps.
158,119
Ps.
(47,436)
Ps.
110,683
Exchange differences on translating foreign operations
(143,156)
(978,527)
(1,121,683)
Derivative financial instruments cash flow hedges
395,807
(118,742)
277,065
Open-Ended Fund
(131,957)
39,587
(92,370)
Other equity instruments
(906,658)
271,997
(634,661)
Share of income of associates and joint ventures
4,245,546
—
4,245,546
Other comprehensive income
Ps.
3,617,701
Ps.
(833,121)
Ps.
2,784,580
Current tax
Ps.
(978,527)
Deferred tax
145,406
Ps.
(833,121)
The Economic Plan for 2023 and for 2024 did not include any changes to the Mexican Income Tax Law, the Mexican Value Added Tax Law or the Mexican
Federal Tax Code. In the Federal Income Law for 2023 and for 2024 approved by the Mexican Congress, the withholding income tax rate applicable to the
payments of interest made by Mexican financial entities was increased from 0.08% to 0.15% for 2023 and from 0.15% to 0.50% for 2024.
International Taxation
In 2021, the Organization for Economic Co-operation and Development (the “OECD”) (i) announced the Inclusive Framework on Base Erosion and Profit
Shifting which agreed to a two-pillar solution to address tax challenges arising from digitalization of the economy; and (ii) released Pillar Two Model Rules
defining the global minimum tax, which calls for the taxation of large corporations at a minimum rate of 15%. The OECD continues to release additional
guidance on the two-pillar framework with widespread implementation in 2024 and 2025.
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F-75
The Mexican government has not issued yet a legislation introducing a 15% global minimum corporate income tax rate to be in line with the OECD Pillar
Two Model. Accordingly, it is not possible to accurately quantify the impact for the Group of this OECD taxation framework at this stage. However, it is
not expected that this taxation framework will have a material impact on the Group tax expense as the jurisdictions in which the Group operates are either
not material for the purposes of this taxation framework or pay effective rates of tax over 15%. The Group has applied the mandatory exception to the
requirements in IAS 12 Income Taxes that an entity does not recognize and does not disclose information about deferred tax assets and liabilities related to
the OECD Pillar Two Model income taxes.
25. Earnings or Loss per CPO/Share
Basic (Loss) Earnings per CPO/Share
For the years ended December 31, 2024 and 2023, the weighted average for basic (loss) earnings per CPO/Share of outstanding total shares, CPOs and
Series “A,” Series “B,” Series “D,” and Series “L” Shares (not in the form of CPO units), was as follows (in thousands):
2024
2023
Total Shares
317,805,944
327,174,298
CPOs
2,235,675
2,316,161
Shares not in the form of CPO units:
Series “A” Shares
56,231,339
56,182,809
Series “B” Shares
187
187
Series “D” Shares
239
239
Series “L” Shares
239
239
Basic (loss) earnings per CPO and per each Series “A,” Series “B,” Series “D,” and Series “L” Share (not in the form of a CPO unit) attributable to
stockholders of the Company for the years ended December 31, 2024, 2023 and 2022, are presented as follows:
2024
2023
2022
Per
Per
Per
Per CPO
Share (*)
Per CPO
Share (*)
Per CPO
Share (*)
Continuing operations
Ps.
(3.06)
Ps.
(0.03)
Ps.
(3.24)
Ps.
(0.03)
Ps.
(4.28)
Ps.
(0.03)
Discontinued operations
0.02
0.00
0.23
0.00
20.08
0.17
Basic (loss) earnings per CPO/Share attributable to
stockholders of the Company
Ps.
(3.04)
Ps.
(0.03)
Ps.
(3.01)
Ps.
(0.03)
Ps.
15.80
Ps.
0.14
(*) Series “A,” “B,” “D,” and “L” Shares not in the form of CPO units.
Diluted (Loss) Earnings per CPO/Share
Diluted (loss) earnings per CPO and per Share attributable to stockholders of the Company are calculated in connection with CPOs and shares in the LTRP
unless anti-dilutive.
For the years ended December 31, 2024 and 2023, the weighted average for diluted (loss) earnings per CPO/Share of outstanding total shares, CPOs and
Series “A,” Series “B,” Series “D,” and Series “L” Shares (not in the form of CPO units), was as follows (in thousands):
2024
2023
Total Shares
340,621,798
343,520,658
CPOs
2,387,500
2,412,277
Shares not in the form of CPO units:
Series “A” Shares
58,926,613
58,926,613
Series “B” Shares
2,357,208
2,357,208
Series “D” Shares
239
239
Series “L” Shares
239
239
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F-76
Diluted (loss) earnings per CPO and per each Series “A,” Series “B,” Series “D,” and Series “L” Share (not in the form of a CPO unit) attributable to
stockholders of the Company for the years ended December 31, 2024, 2023 and 2022, are presented as follows:
2024
2023
2022
Per
Per
Per
Per CPO
Share (*)
Per CPO
Share (*)
Per CPO
Share (*)
Continuing operations
Ps.
(3.06)
Ps.
(0.03)
Ps.
(3.24)
Ps.
(0.03)
Ps.
(4.28)
Ps.
(0.03)
Discontinued operations
0.02
0.00
0.23
0.00
20.08
0.17
Diluted (loss) earnings per CPO/Share attributable to stockholders
of the Company
Ps.
(3.04)
Ps.
(0.03)
Ps.
(3.01)
Ps.
(0.03)
Ps.
15.80
Ps.
0.14
(*) Series “A,” “B,” “D,” and “L” Shares not in the form of CPO units.
26. Segment Information
Reportable segments are those that are based on the Group’s method of internal reporting.
The Group is organized on the basis of services and products. The Group’s segments are strategic business units that offer different entertainment services
and products.
On January 31, 2022, the Group’s former Content business and other related net assets were disposed of by the Group in conjunction with the
TelevisaUnivision Transaction. Beginning in the first quarter of 2022, the Group’s operating results of its former Content business and other related net
assets through January 31, 2022, were classified as discontinued operations, including the corresponding information for earlier periods . On January 31,
2024, the Company carried out the Spin-off of businesses and other related assets that were classified in the Group’s former Other Businesses segment.
Beginning in the first quarter of 2024, the Group’s operating results of its Spun - off Businesses through January 31, 2024, were classified as discontinued
operations, including the corresponding information for earlier periods (see Notes 3 and 28).
Through December 31, 2024, the Group’s reportable segments were as follows:
Cable
The Cable segment includes the operation of cable multiple systems covering the Mexico City metropolitan area, Monterrey and suburban areas, and over
200 other cities of Mexico, as well as the operation of telecommunication facilities through a fiber-optic network that covers the most important cities and
economic regions of Mexico and the cities of San Antonio and San Diego in the United States (Bestel).
The cable multiple system businesses derive revenues from cable subscribers, principally from basic and premium television services subscription, pay-per-
view fees, installation fees, internet services subscription, telephone and mobile services subscription as well as from local and national advertising sales.
The telecommunication facilities business derives revenues from providing data and long-distance services solutions to carriers and other
telecommunications service providers through its fiber-optic network.
Sky
The Sky segment includes DTH broadcast satellite pay television services in Mexico, Central America and the Dominican Republic. Sky revenues are
primarily derived from program services, installation fees, equipment rental to subscribers, and national advertising sales.
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F-77
The table below presents information by segment and a reconciliation to consolidated total of continuing operations for the years ended December 31,
2024, 2023 and 2022:
Intersegment
Consolidated
Segment
Total Revenues
Revenues
Revenues
Income
2024:
Cable
Ps.
47,393,111
Ps.
166,906
Ps.
47,226,205
Ps.
18,485,611
Sky
15,337,288
302,629
15,034,659
4,672,316
Segment totals
62,730,399
469,535
62,260,864
23,157,927
Reconciliation to consolidated amounts:
Corporate expenses
—
—
—
(756,045)
Intersegment operations
(469,535)
(469,535)
—
(154,990)
Depreciation and amortization expense
—
—
—
(20,510,853)
Consolidated revenues and operating income before other expense
62,260,864
—
62,260,864
1,736,039 (1)
Other expense, net
—
—
—
(4,554,900)
Consolidated revenues and operating income
Ps.
62,260,864
Ps.
—
Ps.
62,260,864
Ps.
(2,818,861)(2)
Intersegment
Consolidated
Segment
Total Revenues
Revenues
Revenues
Income
2023:
Cable
Ps.
48,802,544
Ps.
161,937
Ps.
48,640,607
Ps.
19,299,121
Sky
17,585,175
2,946
17,582,229
5,731,376
Segment totals
66,387,719
164,883
66,222,836
25,030,497
Reconciliation to consolidated amounts:
Corporate expenses
—
—
—
(1,031,223)
Intersegment operations
(164,883)
(164,883)
—
(120,366)
Depreciation and amortization expense
—
—
—
(21,107,312)
Consolidated revenues and operating income before other expense
66,222,836
—
66,222,836
2,771,596 (1)
Other expense, net
—
—
—
(913,801)
Consolidated revenues and operating income
Ps.
66,222,836
Ps.
—
Ps.
66,222,836
Ps.
1,857,795 (2)
Intersegment
Consolidated
Segment
Total Revenues
Revenues
Revenues
Income
2022:
Cable
Ps.
48,411,776
Ps.
131,559
Ps.
48,280,217
Ps.
20,505,283
Sky
20,339,038
3,487
20,335,551
6,416,270
Segment totals
68,750,814
135,046
68,615,768
26,921,553
Reconciliation to consolidated amounts:
Corporate expenses
—
—
—
(1,346,469)
Intersegment operations
(135,046)
(135,046)
—
(98,908)
Depreciation and amortization expense
—
—
—
(20,715,260)
Consolidated revenues and operating income before other expense
68,615,768
—
68,615,768
4,760,916 (1)
Other expense, net
—
—
—
(1,023,169)
Consolidated revenues and operating income
Ps.
68,615,768
Ps.
—
Ps.
68,615,768
Ps.
3,737,747 (2)
(1)
This amount represents income before other income or expense, net.
(2)
This amount represents consolidated operating income.
Accounting Policies
The accounting policies of the segments are the same as those described in the Group’s summary of material accounting policies (see Note 2). The Group
evaluates the performance of its segments and allocates resources to them based on operating income before depreciation and amortization.
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F-78
Intersegment Revenue
Intersegment revenue consists of revenues derived from each of the segments principal activities as provided to other segments.
The Group accounts for intersegment revenues as if the revenues were from third parties, that is, at current market prices.
Allocation of Corporate Expenses
Non-allocated corporate expenses primarily include share-based compensation expense for certain key officers and employees in connection with the
Company’s LTRP, as well as other general expenses that, because of their nature and characteristics, are not subject to be allocated within the Group’s
business segments.
The table below presents segment information about assets, liabilities, and additions to property, plant and equipment as of and for the years ended
December 31, 2024, 2023 and 2022:
Segment
Additions to
Segment Assets
Liabilities
Property, Plant
at Year-End
at Year-End
and Equipment
2024:
Continuing operations:
Cable
Ps.
108,166,544
Ps.
29,402,556
Ps.
7,374,382
Sky
18,718,922
8,758,504
1,514,062
Corporate asset
—
—
208,953
Total
Ps.
126,885,466
Ps.
38,161,060
Ps.
9,097,397
2023:
Continuing operations:
Cable
Ps.
115,906,063
Ps.
19,944,547
Ps.
11,243,950
Sky
22,737,294
7,778,956
2,657,041
Other Businesses
19,638,262
3,547,916
768,182
Corporate asset
—
—
38,843
Total
Ps.
158,281,619
Ps.
31,271,419
Ps.
14,708,016
2022:
Continuing operations:
Cable
Ps.
121,786,224
Ps.
23,278,943
Ps.
13,011,456
Sky
24,590,186
9,570,547
3,891,684
Other Businesses
16,285,203
3,779,852
273,881
Corporate asset
—
—
68,750
Disposed operations
—
—
69,616
Total
Ps.
162,661,613
Ps.
36,629,342
Ps.
17,315,387
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F-79
Reconciliation of segment assets to total assets as of December 31, 2024 and 2023, is as follows:
2024
2023
Segment assets:
Ps.
126,885,466
Ps.
158,281,619
Equity investments attributable to:
Cable
952,721
844,728
Other Businesses
—
245,411
Others (1)
2,757,701
2,597,756
Goodwill attributable to:
Cable
13,344,684
13,794,684
Others
110,314
110,314
Corporate assets:
Cash and cash equivalents
36,364,456
23,757,692
Other accounts receivable, net
3,827,795
183,982
Income taxes receivable and other recoverable taxes
1,593,254
5,006,836
Non-current account receivable due from related party
3,538,497
5,089,608
Equity investment in TelevisaUnivision
43,220,986
42,326,344
Property and equipment, net
2,700,730
2,863,187
Investment property, net
2,706,528
2,478,064
Intangible assets, net
5,013,835
29,774
Deferred income tax assets
6,400,422
4,115,297
Other corporate assets
2,240,507
944,961
Total assets
Ps.
251,657,896
Ps.
262,670,257
(1)
Includes investments that through January 31, 2024 were part of the Group’s former Other Businesses segment.
Equity method gain (loss) recognized in income for the years ended December 31, 2024, 2023 and 2022 attributable to equity investments in Cable, was
Ps.32,171, Ps.(827) and Ps.38,833, respectively.
Equity method loss recognized in income for the years ended December 31, 2024, 2023 and 2022 attributable to equity investment in TelevisaUnivision,
was Ps.(212,433), Ps.(4,095,851) and Ps.(7,418,536), respectively.
Equity method (loss) gain recognized in income for the years ended December 31, 2024, 2023 and 2022 attributable to other equity investments, was Ps.
(2,315), Ps.10,050 and Ps.1,454, respectively.
Reconciliation of segment liabilities to total liabilities as of December 31, 2024 and 2023, is as follows:
2024
2023
Segment liabilities
Ps.
38,161,060
Ps.
31,271,419
Debt not allocated to segments
90,376,976
85,885,859
Other corporate liabilities
11,424,235
10,840,546
Total liabilities
Ps.
139,962,271
Ps.
127,997,824
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F-80
Geographical segment information:
Additions to
Segment Assets at
Property, Plant and
Total Revenues
Year-End
Equipment
2024:
Mexico
Ps.
61,115,393
Ps.
110,590,724
Ps.
8,997,716
Other countries (1)
1,145,471
16,294,742
99,681
Ps.
62,260,864
Ps.
126,885,466
Ps.
9,097,397
2023:
Mexico
Ps.
65,250,298
Ps.
144,856,678
Ps.
14,565,065
Other countries (1)
972,538
13,424,941
142,951
Ps.
66,222,836
Ps.
158,281,619
Ps.
14,708,016
2022:
Mexico
Ps.
67,243,094
Ps.
149,520,957
Ps.
17,102,445
Other countries (1)
1,372,674
13,140,656
212,942
Ps.
68,615,768
Ps.
162,661,613
Ps.
17,315,387
(1)
Central America is from which this revenue is derived.
Revenues are attributed to geographical segment based on the location of customers.
Disaggregation of Total Revenues
The table below presents total revenues of continuing operations for each reportable segment disaggregated by major service/product lines and primary
geographical market for the years ended December 31, 2024, 2023 and 2022:
Domestic
Abroad
Total
2024:
Cable:
Broadband Services (a)
Ps.
23,991,416
Ps.
—
Ps.
23,991,416
Digital TV Service (a)
12,988,987
—
12,988,987
Telephony (a)
2,964,230
—
2,964,230
Enterprise Operations
3,914,425
475,076
4,389,501
Advertising
1,958,989
—
1,958,989
Other Services
1,099,988
—
1,099,988
Sky:
DTH Broadcast Satellite TV (a)
13,722,312
665,409
14,387,721
Advertising
906,563
—
906,563
Pay-Per-View
38,018
4,986
43,004
Segment totals
61,584,928
1,145,471
62,730,399
Intersegment eliminations
(469,535)
—
(469,535)
Consolidated total revenues
Ps.
61,115,393
Ps.
1,145,471
Ps.
62,260,864
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F-81
Domestic
Abroad
Total
2023:
Cable:
Broadband Services (a)
Ps.
21,440,699
Ps.
—
Ps.
21,440,699
Digital TV Service (a)
15,025,051
—
15,025,051
Telephony (a)
4,464,983
—
4,464,983
Enterprise Operations
4,408,885
277,467
4,686,352
Advertising
2,162,410
—
2,162,410
Other Services
1,023,049
—
1,023,049
Sky:
DTH Broadcast Satellite TV (a)
15,805,972
687,994
16,493,966
Advertising
1,039,011
—
1,039,011
Pay-Per-View
45,121
7,077
52,198
Segment totals
65,415,181
972,538
66,387,719
Intersegment eliminations
(164,883)
—
(164,883)
Consolidated total revenues
Ps.
65,250,298
Ps.
972,538
Ps.
66,222,836
Domestic
Abroad
Total
2022:
Cable:
Broadband Services (a)
Ps.
19,197,699
Ps.
—
Ps.
19,197,699
Digital TV Service (a)
16,054,150
—
16,054,150
Telephony (a)
5,380,078
—
5,380,078
Enterprise Operations
4,820,254
258,946
5,079,200
Advertising
2,073,346
—
2,073,346
Other Services
627,303
—
627,303
Sky:
DTH Broadcast Satellite TV (a)
17,970,812
1,101,419
19,072,231
Advertising
1,183,495
—
1,183,495
Pay-Per-View
71,003
12,309
83,312
Segment totals
67,378,140
1,372,674
68,750,814
Intersegment eliminations
(135,046)
—
(135,046)
Consolidated total revenues
Ps.
67,243,094
Ps.
1,372,674
Ps.
68,615,768
(a)
Digital TV Service revenues include revenue from leasing set-top equipment to subscribers in the Cable segment in the amount of Ps.8,131,852,
Ps.5,880,517 and Ps.5,899,902, for the years ended December 31, 2024, 2023 and 2022, respectively. DTH Broadcast Satellite TV revenues include
revenue from leasing set-top equipment to subscribers in the Sky segment in the amount of Ps.3,771,384, Ps.5,950,288 and Ps.7,783,254, for the years
ended December 31, 2024, 2023 and 2022, respectively. Revenue from leasing set-top equipment to subscribers is recognized when services are
rendered to such subscribers. Set-top equipment is part of the Group’s property, plant and equipment and is leased to subscribers through operating
lease contracts.
Revenues from external customers for the years ended December 31, 2024, 2023 and 2022 are presented by sale source, as follows:
2024
2023
2022
Services
Ps.
50,128,039
Ps.
54,088,100
Ps.
54,572,404
Royalties
—
—
—
Goods
229,589
303,931
360,208
Leases (1)
11,903,236
11,830,805
13,683,156
Total
Ps.
62,260,864
Ps.
66,222,836
Ps.
68,615,768
(1)
This line includes primarily revenue from leasing set-top equipment to subscribers in the Cable and Sky segments, which is recognized when services
are rendered to such subscribers. Set-top equipment is part of the Group’s property and equipment and is leased to subscribers through operating lease
contracts.
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F-82
27. Commitments, Lawsuit Settlement Agreement and Contingencies
Commitments
As of December 31, 2024, the Group had commitments for transmission rights to be acquired, mainly related to special events, in the aggregate amount of
U.S.$460.7 million (Ps.9,613,479) with various payment commitments to be made between 2025 and 2031.
As of December 31, 2024, the Group had commitments in the aggregate amount of Ps.537,015, of which Ps.66,174, were construction commitments for
technical facilities and building improvements, Ps.470,841, were commitments for the acquisition of software and related services.
As of December 31, 2024, in connection with a long-term credit facility, the Group had commitments to provide financing to GTAC in the principal
amounts of U.S.$1.5 million (Ps.31,304) and Ps.39,629 in 2025 (see Note 10).
At December 31, 2024, the Group had the following aggregate minimum annual commitments (undiscounted) for the use of satellite transponders, which
payments will be reimbursed by TelevisaUnivision as the final user of these satellite transponders:
Thousands of
U.S. Dollars
2025
U.S.$
5,823
2026
4,123
2027
4,091
2028
2,031
2029 and thereafter
2,370
U.S.$
18,438
Preponderant Economic Agent
On March 6, 2014, the IFT issued a decision whereby it determined that the Company, together with certain subsidiaries with concessions to provide
broadcast television, are preponderant economic agents in the broadcasting sector in Mexico (together, the “Preponderant Economic Agent”). The
preponderance decision imposes on the Preponderant Economic Agent various measures, terms, conditions and restrictive obligations, some of which may
adversely affect the activities of the Group’s broadcasting businesses, as well as their results of operations and financial condition. Among these measures,
terms, conditions and restrictive obligations are included the following:
Infrastructure sharing – The Preponderant Economic Agent must make its passive broadcasting infrastructure (as defined in the preponderance decision)
available to third-party concessionaires of broadcast television (as defined in the preponderance decision) for commercial purposes in a non-discriminatory
and non-exclusive manner, with the exception of broadcasters that, at the time the measures enter into force, have 12 MHz or more of radio-electric
spectrum in the geographic area concerned.
Advertising sales – The Preponderant Economic Agent must deliver to IFT and publish the terms and conditions of certain broadcast advertising services
and fee structures, including, without limitation, commercials, packages, bonuses and discount plans and any other commercial offerings, and publish them
on its webpage.
Prohibition on acquiring certain exclusive content – The Preponderant Economic Agent may not acquire transmission rights, on an exclusive basis, for any
location within Mexico with respect to certain relevant content, determined by IFT in the Ruling whereby IFT identifies the relevant audiovisual contents in
terms and for the purposes of the fourth measure and the second transitory article of the fourth attachment whereby the Preponderant Economic Agent in
the telecommunication sector was resolved and the eighteenth and thirteenth transitory articles of the first attachment of the resolution whereby the
Preponderant Economic Agent in the broadcasting sector as resolved (the “Relevant Content Ruling”), which may be updated every two years by IFT.
Over-the-air channels – When the Preponderant Economic Agent offers any of its over-the-air channels, or channels that have at least 50% of the
programming broadcasted between 6:00 a.m. and midnight on such channels in the same day, to its affiliates, subsidiaries, related parties and third parties,
for distribution through a different technological platform than over the air broadcast television, the Preponderant Economic Agent must offer these
channels to any other person that asks for distribution over the same platform as the Preponderant Economic Agent has offered, on the same terms and
conditions.
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F-83
Prohibition on participating in “buyers’ clubs” or syndicates to acquire audiovisual content, without IFT’s prior approval – The Preponderant Economic
Agent may not enter into or remain a member of any “buyers’ club” or syndicates of audiovisual content unless it has received the prior approval of IFT.
There are currently no resolutions from the IFT, judgments or orders that would require the Group to divest any of the assets as a result of being declared a
Preponderant Economic Agent in the broadcasting sector.
On February 27, 2017, as part of the biannual review of the broadcasting sector preponderance rules, the IFT issued a ruling that amended some of the
existing preponderance rules in broadcasting and included some additional obligations on the Company and some of its subsidiaries (the “New
Preponderance Measures”), as follows:
Infrastructure sharing – In addition to the previously imposed obligations regarding the sharing of passive infrastructure, the New Preponderance Measures
have included the service of signal emissions only in the event that no passive infrastructure exists on the requested site. In addition, the New
Preponderance Measures strengthen the supervision of the infrastructure services provided by the Group, including certain rules relating to the publicity of
its tariffs. In addition, more specifications for the Electronic Management System (Sistema Electrónico de Gestión or “SEG”) as part of the new measures
are included. Likewise, the IFT determined specific tariffs for our infrastructure offers.
Prohibition on acquiring certain exclusive content for broadcasting – This measure has been modified by enabling the Preponderant Economic Agent to
acquire relevant content under certain circumstances, as long as it obtains the right to sublicense such transmission rights to the other broadcasters in
Mexico on non-discriminatory terms. In December 2018, the Relevant Content Ruling was updated.
Advertising sales – IFT modified this measure mainly by including specific requirements to the Preponderant Economic Agent in its provision of over the
air advertising services, particularly, to telecommunications companies. Such requirements include, among others: a) publishing and delivering to IFT
specific information regarding tariffs, discount plans, contracting and sales terms and conditions, contract forms and other relevant practices; and b) terms
and conditions that prohibit discrimination, or refusals to deal, conditioned sales and other conditions that inhibit competition. The Preponderant Economic
Agent began the process of providing very detailed information to IFT on a recurrent basis of over the air advertising services related to
telecommunications companies.
Accounting separation – The Group, as Preponderant Economic Agent, is required to implement an accounting separation methodology under the criteria
defined by IFT, published in the Official Gazette of the Federation on December 29, 2017, as amended.
On March 28, 2014, the Company, together with its subsidiaries determined to be the Preponderant Economic Agent in the broadcasting sector, filed an
amparo proceeding challenging the constitutionality of the Preponderance Decision. The Supreme Court resolved the amparo proceeding, resolving the
constitutionality of the Preponderance Decision and therefore, it is still valid.
Additionally, on March 31, 2017, the Company, together with its subsidiaries, filed an amparo proceeding challenging the constitutionality of the New
Preponderance Measures. On November 21, 2019, the Second Chamber of the Supreme Court granted the amparo and revoked the New Preponderance
Measures. Consequently, the valid and applicable measures in force are resolved in accordance with the Preponderance Decision.
The biannual review of the broadcasting sector preponderance rules that began in 2019 was concluded due to the resolution of the amparo. A new biannual
review began in 2023 and ended in 2024. The modifications to the previous ruling include updating requirements and specific elements to be considered in
the Public Offering of Passive Infrastructure and its SEG, including in connection with tariffs negotiation; the prohibition against acquiring Relevant
Audiovisual Content on an exclusive basis continues unless the right to sublicense such content to other broadcasters in Mexico is acquired; and the
addition of specific requirements for the provision of advertising services, particularly for the promotion of telecommunications services.
The Company will continue to assess the extent and impact of the various measures, terms, conditions and restrictive obligations in connection with its
designation by IFT as Preponderant Economic Agent, including the revised preponderance measures that may arise from the 2023 biannual review that
concluded in 2024, and will analyze carefully any actions and/or remedies (legal, business and otherwise) that the Company should take and/or implement
regarding these matters.
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F-84
Substantial Power Economic Agent
On November 26, 2020, the IFT notified the Company of the final resolution confirming the existence of substantial power in the 35 relevant markets of
restricted television and audio services. Consequently, on December 17, 2020, the Company filed three amparos challenging the constitutionality of the
resolution. On January 25, 2024, a Federal Court entered a final judgment ordering the IFT to revoke the resolution on substantial power. On March 6,
2024, in compliance with the ruling, the IFT left the substantial power resolution void and determined to close the file only for Televisa, S. de R.L. de C.V.
The two remaining amparos are now under review by the competent court. Some of the consequences derived from the determination of substantial market
power, are applicable as a matter of law and others may be imposed by IFT in a new procedure in accordance with the LFTR; these may consist of: (i) the
obligation to obtain IFT’s approval and to register the rates for our services; (ii) to inform the IFT in case of the adoption of new technology or
modifications to the network; (iii) the agent with substantial power may not be entitled to the benefits of some rules of the “must carry” and “must offer”
provisions; and (iv) the implementation of accounting separation.
In October 2022, the Company, Televisa (an indirect subsidiary of TelevisaUnivision) and certain subsidiaries of the Company in the Group’s Cable and
Sky segments (the “Complainants”) obtained favorable amparo resolutions from a Federal specialized judge, ruling the determination by the IFT of
substantial power in the market of restricted television and audio services in 35 municipalities of Mexico as a result of the acquisition of the residential
optical fiber-to-the home and related assets from Axtel, S.A.B. de C.V., on 2018, to be unconstitutional. In the event the authority challenges this resolution,
the Complainants would continue defending the judgment and will seek to extend the effects of its protection. On January 25, 2024, a Federal Court entered
a final judgment ordering the IFT to revoke the resolution on substantial power. On March 6, 2024, in compliance with the ruling, the IFT left the
substantial power resolution void and determined to close the file only for Televisa. The two remaining amparos are now under review by the competent
court.
On June 21, 2024, the IFT notified the Company of a resolution through which such authority determined to repeal the determination that declared the
Company, its concessionaires of restricted television and audio services and other entities as Economic Agent with Substantial Power in 35 relevant
markets of restricted television and audio services. This, in compliance with guidelines issued by a federal court. With this resolution, a procedure initiated
by the IFT to impose asymmetrical measures on the Company and its subsidiaries has also been repealed, and the measures provided in the current
regulations for these purposes are no longer applicable.
Lawsuit Settlement Agreement
In the fourth quarter of 2022, the Company recognized a provision for the settlement of a class action lawsuit filed in 2018 in the U.S. District Court for the
Southern District of New York, in the amount of U.S.$95.0 million (Ps.1,850,220), and a receivable for a related reimbursement in the amount of U.S.$73.5
million (Ps.1,431,486) to be funded by the Company’s insurance contracts. While the Company believed that the allegations in the case were without merit,
it also believed that eliminating the distraction, expense and risk of continued litigation was in the best interest of the Company and its shareholders. The
net amount of U.S.$21.5 million (Ps.425,762) was recognized in other expense in the Group’s consolidated statement of income for the year ended
December 31, 2022, and paid by the Company in the second quarter of 2023 (see Note 22).
Contingencies
On April 27, 2017, the tax authorities initiated a tax audit to the Company, with the purpose of verifying compliance with tax provisions for the fiscal
period from January 1 to December 31, 2011, regarding federal taxes as direct subject of Income Tax (Impuesto sobre la Renta or ISR), Flat tax (Impuesto
Empresarial a Tasa Única) and Value Added Tax (Impuesto al Valor Agregado). On April 25, 2018, the authorities informed the observations determined as
a result of such audit, that could entail a default on the payment of the abovementioned taxes. On May 25, 2018, by a document submitted before the
authority, the Company asserted arguments and offered evidence to undermine the authority’s observations. On June 27, 2019, the Company was notified of
the outcome of the audit, in which a tax liability was determined for an amount of Ps.682 million for ISR. On August 22, 2019, the Company filed an
administrative proceeding (recurso de revocación) against such tax liability, before the Legal area of the Tax Authorities. On July 7, 2023, the resolution to
the administrative proceeding was notified, in which the appealed resolution was confirmed. On September 4, 2023, a claim (juicio de nulidad) against the
resolution issued in the referred administrative proceeding was filed in the Third Regional Court of Mexico City of the Federal Court of Administrative
Justice (Tribunal Federal de Justicia Administrativa), which is still pending of resolution. As of the date of these financial statements, there are no elements
to determine if the outcome would be adverse to the Company’s interests. As of December 31, 2024, this contingency amounted to Ps.908.4 million.
Table of Contents
F-85
On August 12, 2019, the tax authority initiated a Foreign Trade Audit of one of the Company’s indirect subsidiaries (Cablebox. S.A. de C.V.), with the
purpose of verifying the correct payment of the contributions and levies on the import of the merchandise, as well as compliance with non-customs
regulations and restrictions applicable to 26 foreign trade operations carried out during fiscal year 2016. On April 30, 2020, the tax authority released the
observations determined as a result of the aforementioned review, which could lead to non-compliance with the payment of the referred contributions. On
April 30, 2020, the tax authority informed the facts and omissions detected during the development of the verification process, that could entail a default on
several provisions of the Customs Act (Ley Aduanera). On June 2 and 29, 2020, by several documents submitted before the authorities, the Company’s
subsidiary asserted arguments and offered evidence to undermine the facts and omissions included in the tax authority’s last partial record. On July 16,
2020 such entity was notified of the outcome of the audit, in which a tax liability was determined for an amount of Ps.290 million for a fine consisting of
70% of the commercial value of the merchandise subject to review, due to the alleged failure to comply with the Norma Oficial Mexicana, or Official
Mexican Standards (NOM-019-SCFI-1998), as well as on the amount of the commercial value of the merchandise due to the material impossibility of the
merchandise becoming property of the Federal Treasury. On August 27, 2020, an administrative proceeding (recurso de revocación) was filed before the
Legal department of the Tax Authority, which is in the process of being resolved. As of the date of these financial statements, there are no elements to
determine if the outcome would be adverse to the Company’s interests. As of December 31, 2024, this contingency amounted to Ps.546.2 million.
On July 29, 2019, the tax authority initiated a Foreign Trade Audit of one of the Company’s indirect subsidiaries (CM Equipos y Soporte, S.A. de C.V.),
with the purpose of verifying the correct payment of the contributions and levies on the import of the merchandise, as well as compliance with non-customs
regulations and restrictions applicable to 32 foreign trade operations carried out during fiscal year 2016. On July 10, 2020, the tax authority released the
observations determined as a result of the aforementioned review, which could lead to a determination of non-compliance with the payment of the referred
contributions. On August 21, 2020, through several documents submitted to the authorities, the Company’s subsidiary asserted arguments and offered
evidence to undermine the facts and omissions included in the tax authority’s most recent partial record. On May 28, 2021, the subsidiary was notified of
the outcome of the audit, in which a tax liability was determined for an amount of Ps.256.3 million for a fine consisting of 70% of the commercial value of
the merchandise subject to review, due to the alleged failure to comply with the Normas Oficiales Mexicanas, or Official Mexican Standards (NOM-019-
SCFI-1998, NOM-EM-015-SCFI-2015 and NOM-024-SCFI-2013), as well as on the amount of the commercial value of the merchandise due to the
material impossibility of the merchandise becoming property of the Federal Treasury. On July 12, 2021, an administrative proceeding (recurso de
revocación) was filed before the Legal department of the Tax Authority, which is in the process of being resolved. As of the date of these financial
statements, there are no elements to determine if the outcome would be adverse to the Company’s interests. As of December 31, 2024, this contingency
amounted to Ps.477.1 million.
On March 29, 2022, the tax authority initiated a tax audit of a subsidiary of the Company (Cablemás Telecomunicaciones, S.A. de C.V.). The purpose of the
tax audit was to verify compliance with tax provisions for the period from January 1 to December 31, 2016, regarding income tax as a direct subject. On
March 23, 2023, the authority informed the relevant entity of the facts and omissions detected during the development of the verification process that could
entail a default on the payment of the tax. On April 25, 2023, through several documents submitted to the authorities, the Company’s subsidiary asserted
arguments and offered evidence to undermine the facts and omissions included in the tax authority’s report. On August 23, 2024, the referred subsidiary
was notified of the outcome of the audit, determining a tax credit in the amount of Ps.214.3 million. On October 8, 2024, an administrative proceeding
(recurso de revocación) was filed before the Legal department of the Tax Authority, which is in process of being resolved. As of the date of these financial
statements, there are no elements to determine if the outcome would be adverse to the Company’s interests. As of December 31, 2024, this contingency
amounted to Ps.230.2 million.
The contingencies discussed in the previous paragraphs did not require the recognition of a provision as of December 31, 2024.
As the Company previously announced on August 30, 2024, a Department of Justice investigation of FIFA-related activity may have a material impact on
the Company’s consolidated financial condition or results of operations. The Company cannot predict the outcome of the investigation or whether it will in
fact have a material impact. The Company is cooperating with the investigation.
There are several legal actions and claims pending against the Group, which are filed in the ordinary course of business. In the opinion of the Company’s
management, none of these actions and claims is expected now to have a material adverse effect on the Group’s financial statements as a whole; however,
the Company’s management is unable to predict the outcome of any of these legal actions and claims.
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F-86
28. Income from Discontinued Operations, Net
TelevisaUnivision Transaction
The operations of the Group’s former Content segment and feature-film production and distribution business were discontinued on January 31, 2022, in
connection with the closing of the TelevisaUnivision Transaction. As a result, the Group’s consolidated statement of income for the year ended December
31, 2022, present the results of operations of the Group’s former Content segment and feature-film production and distribution business for the month
ended January 31, 2022, and the gain on disposition of these businesses, as income from discontinued operations, net, for the year ended December 31,
2022 (see Note 3).
The total carrying amount of the consolidated net assets disposed of by the Group on January 31, 2022, in connection with the TelevisaUnivision
Transaction is presented as follows:
January 31,
2022
ASSETS
Current assets:
Cash and cash equivalents
Ps.
1,890,141
Trade accounts and notes receivable, net
1,997,862
Other accounts, taxes receivable and notes receivable, net
2,388,939
Transmission rights and programming
7,162,846
Other current assets
2,312,941
Total current assets
15,752,729
Non-current assets:
Transmission rights and programming
8,513,024
Investments in financial instruments
1,721,654
Property, plant and equipment, net
3,955,680
Right-of-use assets, net
2,179,704
Intangible assets, net and goodwill
623,818
Deferred income tax assets
7,847,995
Other assets
9,716
Total non-current assets
24,851,591
Total assets
40,604,320
LIABILITIES
Current liabilities:
Current portion of lease liabilities
470,686
Trade accounts payable and accrued expenses
6,856,041
Customer deposits and advances
2,071,060
Due from related parties
5,383,763
Other current liabilities
1,983,995
Total current liabilities
16,765,545
Non-currents liabilities:
Lease liabilities, net of current portion
1,703,747
Post-employment benefits
1,105,376
Other non-current liabilities
4,246,327
Total non-current liabilities
7,055,450
Total liabilities
23,820,995
Other net assets
3,598,567
Total net assets
Ps.
13,184,758
Consideration received, satisfied in cash
Ps.
67,985,597
Cash and cash equivalents disposed of
(1,890,143)
Net cash inflows
Ps.
66,095,454
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F-87
In connection with the TelevisaUnivision Transaction, the Group recognized an income from disposition of discontinued operations in the aggregate
amount of Ps.93,066,741 in its consolidated statement of income for the year ended December 31, 2022, comprising a consideration in cash from
TelevisaUnivision in the aggregate amount of U.S.$2,971.3 million (Ps.61,214,741); consideration in the form of common and preferred stock of
TelevisaUnivision, in the aggregate amount of U.S.$1,500.0 million (Ps.30,912,000); and a cash consideration received from Tritón Comunicaciones, S.A.
de C.V., a company of the Azcárraga family, in the amount of Ps.940,000, related to the purchase of the rights for the production of news content in
Mexico. The gain on disposition of discontinued operations related to the TelevisaUnivision Transaction, net of income taxes, amounted to Ps.56,065,530,
for the year ended December 31, 2022, and consisted of the total consideration received by the Group for the shares of those companies that were disposed
of by the Group on January 31, 2022, and certain other net assets and rights that were transferred by the Group to TelevisaUnivision and Tritón, less the
carrying amounts of these consolidated net assets as of January 31, 2022, and related expenses and income taxes incurred by the Group in connection with
the TelevisaUnivision Transaction for the year ended December 31, 2022 (see Note 3).
Ollamani
The operations of most of the Group’s former Other Businesses segment were discontinued on January 31, 2024, in connection with the Spin-off of the
Company carried out on that date and the Company’s distribution of the related Spun-off Businesses to Ollamani. As a result, the Group’s consolidated
statements of income for the years ended December 31, 2024, 2023 and 2022, present as income from discontinued operations, net, the results of operations
of the Spun-off Businesses for the month ended January 31, 2024, and the years ended December 31, 2023 and 2022 (see Notes 2 and 3).
The carrying amounts of the consolidated net assets distributed to Ollamani on January 31, 2024, in connection with the Company’s Spin-off carried out on
that date, were as follows:
January 31, 2024
ASSETS
Current assets:
Cash and cash equivalents
Ps.
696,916
Trade accounts and notes receivable, net
514,284
Other accounts, taxes receivable and notes receivable, net
925,632
Inventories
130,645
Other current assets
587,439
Total current assets
2,854,916
Non-current assets:
Property and equipment, net
4,057,271
Right-of-use assets, net
982,190
Intangible assets, net
583,885
Deferred income tax assets
1,619,305
Other assets
15,466
Total non-current assets
7,258,117
Total assets
10,113,033
LIABILITIES
Current liabilities:
Current portion of lease liabilities
99,376
Trade accounts payable and accrued expenses
821,530
Customer deposits and advances
26,496
Income taxes payable
218,003
Employee benefits
182,394
Other current liabilities
47,320
Total current liabilities
1,395,119
Non-currents liabilities:
Lease liabilities, net of current portion
1,017,781
Post-employment benefits
55,000
Other non-current liabilities
340,435
Total non-current liabilities
1,413,216
Total liabilities
2,808,335
Total net assets
Ps.
7,304,698
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F-88
The Group’s consolidated net assets of the Spun-off Businesses as of January 31, 2024, decreased the Group’s equity attributable to stockholders of the
Company in the amount of Ps.7,304,698, as of that date (see Notes 17 and 18).
Income from discontinued operations, net, for the year ended December 31, 2024, 2023 and 2022, are presented as follows:
2024
2023
2022
Net income from discontinued operations
Ps.
56,816
Ps.
628,116
Ps.
762,277
Gain on disposition of discontinued operations, net
—
—
56,065,530
Income from discontinued operations, net
Ps.
56,816
Ps.
628,116
Ps.
56,827,807
Gain on disposition of discontinued operations, net, for the year ended December 31, 2024, 2023 and 2022, is presented as follows:
2024
2023
2022
Gain on disposition of discontinued operations before income taxes
Ps.
70,644
Ps.
945,727
Ps.
75,192,421
Income taxes
13,828
317,611
19,126,891
Gain on disposition of discontinued operations, net
Ps.
56,816
Ps.
628,116
Ps.
56,065,530
Income from discontinued operations, net, for the month ended January 31, 2024 and the years ended December 31, 2023 and 2022, are presented as
follows:
2024
2023
2022
Revenues
Ps.
439,479
Ps.
6,183,398
Ps.
7,984,625
Cost of revenues and operating expenses
375,677
5,397,390
7,112,467
Income before other income
63,802
786,008
872,158
Other (expense) income, net
(2,268)
20,460
170,903
Operating income
61,534
806,468
1,043,061
Finance income (expense), net
9,110
139,259
(88,219)
Income before income taxes
70,644
945,727
954,842
Income taxes
(13,828)
(317,611)
(192,565)
Income from discontinued operations, net
Ps.
56,816
Ps.
628,116
Ps.
762,277
Cash flows provided by (used in) discontinued operations for the month ended January 31, 2024 and the years ended December 31, 2023 and 2022:
2024
2023
2022
Net cash (used in) provided by operating activities
Ps.
(170,212)
Ps.
791,780
Ps.
1,343,914
Net cash provided by investing activities
14,955
647,555
66,162,755
Net cash used in financing activities
(304,418)
(215,965)
(253,904)
Net cash flows
Ps.
(459,675)
Ps.
1,223,370
Ps.
67,252,765
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F-89
29. Events after the Reporting Period
On January 28, 2025, the CNBV published rules for public companies in Mexico requiring the preparation of an annual report containing sustainability
information in accordance with applicable IFRS Sustainability Disclosure Standards issued by the International Sustainability Standards Board (the
“ISSB”). In accordance with these regulatory disclosure rules, the annual sustainability information for the year ending December 31, 2025, will begin to
be reported by the Company in the second quarter of 2026, with an optional limited assurance report issued by an external auditor. The annual sustainability
information for the year ending December 31, 2026, and subsequent years, will be reported by the Company in the second quarter following each year, with
a limited and reasonable assurance report, respectively, issued by an external auditor. The Company’s management is assessing the impact that these
regulatory disclosure rules will have on its 2025 annual financial reports and began to implement the guidelines of current and effective IFRS Sustainability
Disclosure Standards issued by the ISSB for the year ending December 31, 2025, which are included in IFRS S1 General Requirements for Disclosure of
Sustainability-related Financial Information and IFRS S2 Climate-related Disclosures.
On February 20, 2025, the Company’s Board of Directors approved a proposed dividend of Ps.0.35 per CPO payable in the second quarter of 2025, subject
to approval of the Company’s stockholders.
On March 18, 2025, the Company repaid all of the amounts payable under the remaining 6.625% Senior Notes due 2025 in the aggregate amount of
U.S.$226.7 million (Ps.4,036,014), including the principal amount of U.S.$219.4 million (Ps.3,906,655). This payment was hedged at an exchange rate of
Ps.17.8028 per U.S. dollar.
On April 3, 2025, Sky prepaid all of the amounts payable under its long-term credit agreement in the aggregate principal amount of Ps.2,650,000, and
entered into a new credit agreement with the same Mexican bank, aggregate principal amount, and maturity in December 2026 (the “2025 Sky Credit
Agreement”), which includes a Ps.1,325,000 loan with an annual interest rate of 8.165%, and a Ps.1,325,000 loan with an annual interest rate of one-day
funding TIIE plus 109 basis points. The 2025 Sky Credit Agreement requires Sky to maintain certain financial ratios related to indebtedness and interest
expense. The Company is a guarantor of Sky’s obligations under the 2025 Sky Credit Agreement.
On April 29, 2025, the Company’s stockholders approved, among other resolutions, (i) the audited consolidated financial statements of the Company as of
December 31, 2024, and for the year ended on that date; and (ii) the payment of a dividend of Ps.0.35 per CPO and Ps.0.002991452991 per share of Series
“A,” “B,” “D,” and “L” Shares, not in the form of a CPO, which will be paid in May 2025.
Exhibit 2.14
DESCRIPTION OF THE RIGHTS OF EACH CLASS OF SECURITIES
REGISTERED UNDER SECTION 12 OF THE EXCHANGE ACT
The following summary is a brief description of the securities registered under Section 12 of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”) of Grupo Televisa S.A.B., a limited liability public stock corporation (sociedad anónima bursátil) organized under the laws of the United
Mexican States. Unless the context requires otherwise, references to “we,” “us,” “our” or “Company” refer to Grupo Televisa, S.A.B. and, where the
context requires, its consolidated entities. “Group” refers to Grupo Televisa, S.A.B. and its consolidated entities. Capitalized terms used and not defined
herein have the meaning ascribed to them in our annual report on Form 20-F for the fiscal year ended December 31, 2020, to which this description of
securities is an exhibit (the “Form 20-F”).
The following description sets forth certain material provisions of these securities. The following summary does not purport to be complete and is
subject to, and is qualified in its entirety by reference to, the applicable provisions of (i) the Company’s Amended and Restated Bylaws (the “Bylaws”); and
(ii) the Deposit Agreement between the Company, The Bank of New York, as depositary and all holders and beneficial owners of the GDSs, evidenced by
Global Depositary Receipts (“GDRs”). We encourage you to refer to the Bylaws and the Deposit Agreement, as applicable, for additional information.
Capital Stock
We have four classes of capital stock: Series “A” Shares, Series “B” Shares, Series “D” Shares and Series “L” Shares. Our shares are publicly
traded in Mexico in the form of certificados de participacion ordinarios (“CPOs”), each representing 117 shares--25 Series “A” Shares, 22 Series “B”
Shares, 35 Series “D” Shares and 35 Series “L” Shares, which are held in the CPO Trust. Our shares also are publicly traded in the United States in the
form of global depositary shares (“GDSs”), each of which represents five CPOs.
The Series “A” Shares and the Series “B” Shares are common or ordinary shares, with no par value, no dividend preference and no preference
upon liquidation. The Series “D” Shares are limited-voting and preferred shares, with no par value, with the limited voting rights as described under
“Voting Rights and Shareholders’ Meetings— Holders of Series “D” Shares and Series “L” Shares” below, and the dividend preference and liquidation
preference described under “Preferential Rights of Series “D” Shares” below.
The L Shares are limited-voting shares, with no par value, no dividend preference, no preference upon liquidation and limited voting rights, as
described under “Voting Rights and Shareholders’ Meetings—Holders of Series “D” Shares and Series “L” Shares” below.
As of December 31, 2020, our outstanding capital stock consisted of 113,019,216,542 Series “A” Shares, 50,928,412,611 Series “B” Shares,
81,022,416,386 Series “D” Shares and 81,022,416,386 Series “L” Shares.
Major Shareholders
The Azcárraga Trust, a trust for the benefit of Emilio Azcárraga Jean, currently holds 43.8% of the outstanding Series “A” Shares, 0.1% of the
outstanding Series “B” shares, 0.1% of the outstanding Series “D” Shares and 0.1% of the outstanding Series “L” Shares of the Company. As a result,
Emilio Azcárraga Jean currently controls the vote of such shares through the Azcárraga Trust. The Series “A” Shares held through the Azcárraga Trust
constitute a majority of the Series “A” Shares whose holders are entitled to vote because non-Mexican holders of CPOs and GDSs are not permitted to vote
the underlying Series “A” Shares in accordance with the trust agreement governing the CPOs and the Company’s bylaws. Accordingly, and so long as non-
Mexicans own more than a minimal number of Series “A” Shares, Emilio Azcárraga Jean will have the ability to direct the election of 11 out of 20
members of our Board of Directors, as well as prevent certain actions by the stockholders, including dividend payments, mergers, spin-offs, changes in
corporate purpose, changes of nationality and amendments to the anti-takeover provisions of our bylaws.
Pursuant to our bylaws, holders of Series “B” Shares are entitled to elect five out of 20 members of our Board of Directors.
Because the Azcárraga Trust only holds a limited number of Series “B” Shares, there can be no assurance that individuals nominated by the
Azcárraga Trust appointees will be elected to our Board.
We believe that as of March 31, 2020, approximately 320.4 million of GDSs were held of record by 68 persons with U.S. addresses. Those GDSs
represent 33.1% of the outstanding Series “A” Shares, 61.8% of the outstanding Series “B” Shares, 64.4% of the outstanding Series “D” Shares and 64.4%
of the outstanding Series “L” Shares of the Company.
Voting Rights and Stockholders’ Meetings
Holders of Series “A” Shares. Holders of Series “A” Shares have the right to vote on all matters subject to stockholder approval at any general
stockholders’ meeting and have the right, voting as a class, to appoint 11 members of our Board of Directors and the corresponding alternate directors. In
addition to requiring approval by a majority of all Shares entitled to vote together on a particular corporate matter, certain corporate matters must be
approved by a majority of the holders of Series “A” Shares voting separately. These matters include mergers, dividend payments, spin-offs, changes in
corporate purpose, changes of nationality and amendments to the anti-takeover provisions of our bylaws.
Holders of Series “B” Shares. Holders of Series “B” Shares have the right to vote on all matters subject to stockholder approval at any general
stockholders’ meeting and have the right, voting as a class, to appoint five members of our Board of Directors and the corresponding alternate directors.
The five directors and corresponding alternate directors elected by the holders of the Series “B” Shares will be elected at a stockholders’ meeting that must
be held within the first four months after the end of each year.
Holders of Series “D” Shares and Series “L” Shares. Holders of Series “D” Shares, voting as a class, are entitled to vote at special meetings to
elect two of the members of our Board of Directors and the corresponding alternate directors, each of which must be an independent director. In addition,
holders of Series “D” Shares are entitled to vote on the following matters at extraordinary general meetings:
·
our transformation from one type of company to another;
·
any merger (even if we are the surviving entity);
·
extension of our existence beyond our prescribed duration;
·
our dissolution before our prescribed duration (which is currently 99 years from January 30, 2007);
·
a change in our corporate purpose;
·
a change in our nationality; and
·
the cancellation from registration of the Series “D” Shares or the securities which represent the Series “D” Shares with the securities or
special section of the NRS and with any other Mexican or foreign stock exchange in which such shares or securities are registered.
Holders of Series “L” Shares, voting as a class, are entitled to vote at special meetings to elect two of the members of our Board of Directors and
the corresponding alternate directors, each of which must be an independent director. Holders of Series “L” Shares are also entitled to vote at extraordinary
general meetings on the following matters:
·
our transformation from one type of company to another;
·
any merger in which we are not the surviving entity; and
·
the cancellation from registration of the Series “L” Shares or the securities that represent the Series “L” Shares with the special section of
the NRS.
The two directors and corresponding alternate directors elected by each of the holders of the Series “D” Shares and the Series “L” Shares are
elected annually at a special meeting of those holders. Special meetings of holders of Series “D” Shares and Series “L” Shares must also be held to approve
the cancellation from registration of the Series “D” Shares or Series “L” Shares or the securities representing any of such shares with the NRS, as the case
may be, and in the case of Series “D” Shares, with any other Mexican or foreign stock exchange in which such shares or securities are registered. Except as
otherwise required by law, all other matters on which holders of Series “L” Shares or Series “D” Shares are entitled to vote must be considered at an
extraordinary general meeting. Holders of Series “L” Shares and Series “D” Shares are not entitled to attend or to address meetings of stockholders at
which they are not entitled to vote. Under Mexican law, holders of Series “L” Shares and Series “D” Shares are entitled to exercise certain minority
protections. See “ Other Provisions — Appraisal Rights and Other Minority Protections” below.
Minority shareholders holding at least ten percent of the capital stock represented by Series “A” Shares, will be entitled to appoint one director and
its corresponding alternate for each such ten percent. Minority shareholders holding at least ten percent of the capital stock represented by Series “B”
Shares, will be entitled to appoint one director and its corresponding alternate for each such ten percent. Minority shareholders holding at least ten percent
of the capital stock represented by Series “D” Shares or Series “L” Shares, will be entitled to appoint one directors and its corresponding alternate for each
such ten percent. Any such appointments by minority shareholders will be counted towards the number of directors that the holders of each such Series is
entitled to appoint.
Other Rights of Stockholders. Under Mexican law, holders of shares of any series are also entitled to vote as a class in a special meeting governed
by the same rules that apply to extraordinary general meetings, as described below, on any action that would prejudice the rights of holders of shares of
such series, but not rights of holders of shares of other series, and a holder of shares of such series would be entitled to judicial relief against any such
action taken without such a vote. Generally, the determination of whether a particular stockholder action requires a class vote on these grounds could
initially be made by the Board of Directors or other party calling for stockholder action. In some cases, under the Mexican Securities Market Law and the
Mexican Companies Law, the Board of Directors, the Audit Committee, the Corporate Practices Committee, or a Mexican court on behalf of those
stockholders representing 10% of our capital stock can call a special meeting. A negative determination would be subject to judicial challenge by an
affected stockholder, and the necessity for a class vote would ultimately be determined by a court. There are no other procedures for determining whether a
particular proposed stockholder action requires a class vote, and Mexican law does not provide extensive guidance on the criteria to be applied in making
such a determination.
General stockholders’ meetings may be ordinary general meetings or extraordinary general meetings. Extraordinary general meetings are those
called to consider specific matters specified in Article 182 of the Mexican Companies Law and our bylaws, including, among others, amendments to our
bylaws, our dissolution, liquidation or split-up, our merger and transformation from one form of company to another, increases and reductions in our capital
stock, the approval of certain acquisitions of shares, including a change of control, as set forth in the antitakeover provisions in our bylaws and any action
for civil liabilities against the members of our Board of Directors, its Secretary, or members of our Audit Committee or Corporate Practices Committee. In
addition, our bylaws require an extraordinary general meeting to consider the cancellation of registration of the Series “D” Shares or Series “L” Shares or
the securities representing these Shares with the NRS, as the case may be, and in the case of Series “D” Shares, with any other Mexican or foreign stock
exchange in which such Shares or securities are registered. General meetings called to consider all other matters are ordinary meetings which are held at
least once each year within four months following the end of each fiscal year. Stockholders may be represented at any stockholders’ meeting by completing
a form of proxy provided by us, which proxy is available within fifteen days prior to such meeting, and designating a representative to vote on their behalf.
The form of proxy must comply with certain content requirements as set forth in the Mexican Securities Market Law and in our bylaws.
Holders of CPOs. Holders of CPOs who are Mexican nationals or Mexican corporations whose bylaws exclude foreign ownership of their shares
are entitled to exercise voting rights with respect to the Series “A” Shares, Series “B” Shares, Series “D” Shares and Series “L” Shares underlying their
CPOs. The CPO Trustee will vote such shares as directed by Mexican holders of CPOs, which must provide evidence of Mexican nationality. Non-Mexican
holders of CPOs may only vote the Series “L” Shares held in the CPO Trust and are not entitled to exercise any voting rights with respect to the Series “A”
Shares, Series “B” Shares and Series “D” Shares held in the CPO Trust. Voting rights in respect of these Series “A” Shares, Series “B” Shares and
Series “D” Shares may only be exercised by the CPO Trustee. Series “A” Shares, Series “B” Shares and Series “D” Shares underlying the CPOs of non-
Mexican holders or holders that do not give timely instructions as to voting of such Shares, will be voted by this individuals designated by the CPO Trust’s
Technical Committee (which consists of members of the Board of Directors and/or Executive Committee, who must be Mexican nationals), and at any
general shareholders meeting where such series has the right to vote in the same manner as the majority of the outstanding Series “A” Shares held by
Mexican nationals or Mexican corporations (directly, or through the CPO Trust, as the case may be) are voted at the relevant meeting. Series “L” Shares
underlying the CPOs of any holders that do not give timely instructions as to the voting of such Shares will be voted by individuals designated by the CPO
Trust’s Technical Committee (which consists of members of the Board of Directors and/or Executive Committee, who must be Mexican nationals), as
instructed by such Technical Committee of the CPO Trust. The CPO Trustee must receive voting instructions five business days prior to the stockholders’
meeting. Holders of CPOs that are Mexican nationals or Mexican corporations whose bylaws exclude foreign ownership of their Shares also must provide
evidence of nationality, such as a copy of a valid Mexican passport or birth certificate, for individuals, or a copy of the bylaws, for corporations.
As described in “Major Stockholders” above, Series “A” Shares held through the Azcárraga Trust constitute a majority of the Series “A” Shares
whose holders are entitled to vote, because non-Mexican holders of CPOs and GDSs are not permitted to vote the underlying Series “A” Shares.
Accordingly, the vote of Series “A” Shares held through the Azcárraga Trust generally will determine how the Series “A” Shares underlying our CPOs are
voted.
Holders of GDRs. Global Depositary Receipts, or GDRs, evidencing GDSs are issued by The Bank of New York Mellon, the Depositary, pursuant
to the Deposit Agreement we entered into with the Depositary and all holders from time to time of GDSs. A GDR may represent any number of GDSs.
Only persons in whose names GDRs are registered on the books of the Depositary will be treated by us and the Depositary as owners and holders of GDRs.
Each GDS represents the right to receive five CPOs which will be credited to the account of Banco Inbursa, S.A., the Custodian, maintained with Indeval
for such purpose. Each CPO represents financial interests in, and limited voting rights with respect to, 25 Series “A” Shares, 22 Series “B” Shares, 35
Series “L” Shares and 35 Series “D” Shares held pursuant to the CPO Trust.
The Depositary will mail information on stockholders’ meetings to all holders of GDRs. At least six business days prior to the relevant
stockholders’ meeting, GDR holders may instruct the Depositary as to the exercise of the voting rights, if any, pertaining to the CPOs represented by their
GDSs, and the underlying Shares. Since the CPO Trustee must also receive voting instructions five business days prior to the stockholders’ meeting, the
Depositary may be unable to vote the CPOs and underlying Shares in accordance with any written instructions. Holders of GDSs that are Mexican
nationals or Mexican corporations whose bylaws exclude foreign ownership of their Shares are entitled to exercise voting rights with respect to the
Series “A” Shares, Series “B” Shares, Series “D” Shares and Series “L” Shares underlying the CPOs represented by their GDSs. Such Mexican holders
also must provide evidence of nationality, such as a copy of a valid Mexican passport or birth certificate, for individuals, or a copy of the bylaws, for
corporations.
Non-Mexican holders may exercise voting rights only with respect to Series “L” Shares underlying the CPOs represented by their GDSs. They
may not direct the CPO Trustee as to how to vote the Series “A” Shares, Series “B” Shares or Series “D” Shares represented by CPOs or attend
stockholders’ meetings. Under the terms of the CPO Trust Agreement, the CPO Trustee will vote the Series “A” Shares, Series “B” Shares, Series “D”
Shares and Series “L” Shares represented by CPOs held by non-Mexican holders (including holders of GDRs) as described under “— Holders of CPOs”. If
the Depositary does not timely receive instructions from a Mexican or non-Mexican holder of GDRs as to the exercise of voting rights relating to the
Series “A” Shares, Series “B” Shares, Series “D” Shares or Series “L” Shares underlying the CPOs, as the case may be, in the relevant stockholders’
meeting then, if requested in writing by us, the Depositary will give a discretionary proxy to a person designated by us to vote the Shares. If no such written
request is made by us, the Depositary will not represent or vote, attempt to represent or vote any right
that attaches to, or instruct the CPO Trustee to represent or vote, the Shares underlying the CPOs in the relevant stockholders’ meeting and, as a result, the
underlying shares will be voted in the same manner described under “— Holders of CPOs” with respect to shares for which timely instructions as to voting
are not given.
If the Depositary does not timely receive instructions from a Mexican or non-Mexican holder of GDRs as to the exercise of voting rights relating
to the underlying CPOs in the relevant CPO holders’ meeting, the Depositary and the Custodian will take such actions as are necessary to cause such CPOs
to be counted for purposes of satisfying applicable quorum requirements and, unless we in our sole discretion have given prior written notice to the
Depositary and the Custodian to the contrary, vote them in the same manner as the majority of the CPOs are voted at the relevant CPOs holders’ meeting.
Under the terms of the CPO Trust, beginning in December 2008, a non-Mexican holder of CPOs or GDSs may instruct the CPO Trustee to request
that we issue and deliver certificates representing each of the Shares underlying its CPOs so that the CPO Trustee may sell, to a third party entitled to hold
the Shares, all of those Shares and deliver to the holder any proceeds derived from the sale.
Limitation on Appointment of Directors. Our bylaws prohibit the appointment of individuals to our Board of Directors: who (i) are members of the
board of directors or other management boards of a company (other than the Company or its subsidiaries) that has one or more concessions to operate
telecommunication networks in Mexico; or (ii) directly or indirectly, are shareholders or partners of companies (other than the Company or its subsidiaries),
that have one or more concessions to operate telecommunication networks in Mexico, with the exception of ownership stakes that do not allow such
individuals to appoint one or more members of the management board or any other operation or decision making board.
Dividend Rights
At our annual ordinary general stockholders’ meeting, our Board of Directors is required to submit our financial statements from the previous
fiscal year to the holders of our Series “A” Shares and Series “B” Shares. Once our stockholders approve these financial statements, they must then allocate
our net profits for the previous fiscal year. Under Mexican law, at least 5% of our net profits must be allocated to a legal reserve, until the amount of this
reserve equals 20% of our paid-in capital stock. Thereafter, our stockholders may allocate our net profits to any special reserve, including a reserve for
share repurchases. After this allocation, the remainder of our net profits will be available for distribution as dividends. The vote of the majority of the
Series “A” Shares and Series “B” Shares is necessary to approve dividend payments. As described below, in the event that dividends are declared, holders
of Series “D” Shares will have preferential rights to dividends as compared to holders of Series “A” Shares, Series “B” Shares and Series “L” Shares.
Holders of Series “A” Shares, Series “B” Shares and Series “L” Shares have the same financial or economic rights, including the participation in any of our
profits.
Preferential Rights of Series “D” Shares
Holders of Series “D” Shares are entitled to receive a preferred annual dividend in the amount of Ps.0.00034412306528 per Series “D” Share
before any dividends are payable in respect of Series “A” Shares, Series “B” Shares and Series “L” Shares. If we pay any dividends in addition to the
Series “D” Share fixed preferred dividend, then such dividends shall be allocated as follows:
·
first, to the payment of dividends with respect to the Series “A” Shares, the Series “B” Shares and the Series “L” Shares, in an equal
amount per share, up to the amount of the Series “D” Share fixed preferred dividend; and
·
second, to the payment of dividends with respect to the Series “A” Shares, Series “B” Shares, Series “D” Shares and Series “L” Shares,
such that the dividend per share is equal.
Upon any dissolution or liquidation of our company, holders of Series “D” Shares are entitled to a liquidation preference equal to:
·
accrued but unpaid dividends in respect of their Series “D” Shares; plus
·
the theoretical value of their Series “D” Shares as set forth in our bylaws. See “Other Provisions — Dissolution or Liquidation” below.
Limitation on Capital Increases
Our bylaws provide that, in the event shares of a given series are issued as a result of a capital increase (in respect of a cash capital contribution),
each holder of shares of that series will have a preferential right to subscribe to new shares of that series, in proportion to the number of such holder’s
existing Shares of that series. In addition, primary issuances of Series “A” Shares, Series “B” Shares, Series “D” Shares and Series “L” Shares in the form
of CPOs may be limited under the Mexican Securities Market Law. However, in the case of primary issuances of additional Series “A” Shares, Series “B”
Shares, Series “L” Shares and Series “D” Shares in the form of CPOs, any new Series “L” Shares and Series “D” Shares may be required to be converted
into Series “A” Shares or other voting stock within a term specified by the CNBV, which in no event shall exceed five years. Moreover, under the Mexican
Securities Market Law, the aggregate amount of shares of an issuer with limited or non-voting rights may not exceed 25% of the total shares held by public
investors. The vote of the holders of a majority of the Series “A” Shares is necessary to approve capital increases. As a result of grandfathering provisions,
our existing CPO structure will not be affected by such limitations.
Preemptive Rights
In the event of a capital increase, a holder of existing shares of a given series has a preferential right to subscribe to a sufficient number of shares
of the same series in order to maintain the holder’s existing proportionate holdings of shares of that series. Stockholders must exercise their preemptive
rights within the time period fixed by our stockholders at the meeting approving the issuance of additional shares. This period must continue for at least
fifteen days following the publication of notice of the issuance in the Official Gazette of the Federation and in a newspaper of general circulation in Mexico
City. Under Mexican law, stockholders cannot waive their preemptive rights in advance or be represented by an instrument that is negotiable separately
from the corresponding share.
U.S. holders of GDSs may exercise preemptive rights only if we register any newly issued shares under the Securities Act of 1933, as amended, or
qualify for an exemption from registration. We intend to evaluate at the time of any offering of preemptive rights the costs and potential liabilities
associated with registering additional shares. In addition, if our stockholders’ meeting approves the issuance of shares of a particular series, holders of
shares of other series may be offered shares of that particular series.
Limitations on Share Ownership
Ownership by non-Mexicans of shares of Mexican enterprises is regulated by the Foreign Investment Law and the accompanying Foreign
Investment Regulations. The Economics Ministry and the Foreign Investment Commission are responsible for the administration of the Foreign Investment
Law and the Foreign Investment Regulations. The Foreign Investment Law reserves certain economic activities exclusively for the Mexican State, certain
other activities exclusively for Mexican individuals or Mexican corporations, and limits the participation of non-Mexican investors to certain percentages
in regard to other enterprises engaged in activities specified therein. Foreign investors may freely participate in up to 100% of the capital stock of Mexican
companies or entities except for those existing companies engaged in specific activities, as described below and those with assets exceeding specified
amounts established annually by the Foreign Investment Commission, in which case an approval from the Foreign Investment Commission will be
necessary in order for foreign investment to exceed 49% of the capital stock. Non-Mexican ownership of shares of Mexican enterprises is restricted in some
economic sectors, including broadcast television, and radio. As a result of the Telecom Reform, the participation of foreign investors can be up to 49% in
free to air radio and television, subject to reciprocity requirements, and up to 100% in telecommunications services and satellite communications. Such
amendments are reflected in the LFTR and Mexico’s Ley de Inversión Extranjera, or Foreign Investment Law, and the Reglamento de la Ley de Inversión
Extranjera y del Registro Nacional de Inversiones Extranjeras, or the Regulation of the Foreign Investment Law and the Foreign Investment National
Registry.
Through our bylaws and the trust governing the CPOs, we have limited the ownership of our Series “A” Shares and Series “B” Shares to Mexican
individuals, Mexican companies whose charters contain a foreign exclusion
clause, credit institutions acting as trustees (such as the CPO Trustee) in accordance with the Foreign Investment Law and the Foreign Investment Law
Regulations, and trusts or stock purchase, investment and retirement plans for Mexican employees. A holder that acquires Series “A” Shares or Series “B”
Shares in violation of the restrictions in our bylaws regarding non-Mexican ownership will have none of the rights of a stockholder with respect to those
Series “A” Shares or Series “B” Shares. The Series “D” Shares are subject to the same restrictions on ownership as the Series “A” Shares and Series “B”
Shares. However, the foregoing limitations do not affect the ability of non-Mexican investors to hold Series “A” Shares, Series “B” Shares, Series “D”
Shares and Series “L” Shares through CPOs, or Series “L” Shares directly. The sum of the total outstanding number of Series “A” Shares and Series “B”
Shares is required to exceed at all times the sum of the total outstanding Series “L” Shares and Series “D” Shares.
Non-Mexican states and governments are prohibited under our bylaws and the Telecommunications and Broadcasting Federal Law (“LFTR”) from
owning Shares of Televisa and are, therefore, prohibited from being the beneficial or record owners of Series “A” Shares, Series “B” Shares, Series “D”
Shares, Series “L” Shares, CPOs and GDSs. We have been advised by our Mexican counsel, Mijares, Angoitia, Cortés y Fuentes, S.C., that ownership of
Series “A” Shares, Series “B” Shares, Series “D” Shares, Series “L” Shares, CPOs and GDSs by pension or retirement funds organized for the benefit of
employees of non-Mexican state, municipal or other governmental agencies will not be considered as ownership by non-Mexican states or governments for
the purpose of our bylaws or the LFTR.
The LFTR eliminated the restrictions on foreign investment in telecommunications services and satellite communication and increased the
maximum permitted foreign-ownership in broadcasting (television and radio) to 49% subject to reciprocity.
Ownership Restrictions
We may restrict transfers or, to the extent permitted under applicable law, cause the mandatory sale or disposition of CPOs and GDRs where such
transfer or ownership, as the case may be, might result in ownership of CPOs or GDRs exceeding the limits under applicable law or our bylaws, the CPO
Trust Agreement or the CPO indenture. Non-Mexican states and governments are prohibited under our bylaws and the LFTR from owning our Shares and
are, therefore, prohibited from being beneficial or record owners of GDRs.
Other Provisions
Forfeiture of Shares. As required by Mexican law, our bylaws provide that for Series “L” Shares and CPOs, our non-Mexican stockholders
formally agree with the Foreign Affairs Ministry:
·
to be considered as Mexicans with respect to the Series “L” Shares and CPOs that they acquire or hold, as well as to the property, rights,
concessions, participations or interests owned by us or to the rights and obligations derived from any agreements we have with the
Mexican government; and
·
not to invoke the protection of their own governments with respect to their ownership of Series “L” Shares and CPOs.
Failure to comply is subject to a penalty of forfeiture of such a stockholder’s capital interests in favor of Mexico. In the opinion of Mijares,
Angoitia, Cortés y Fuentes, S.C., our Mexican counsel, under this provision a non-Mexican stockholder is deemed to have agreed not to invoke the
protection of its own government by asking such government to interpose a diplomatic claim against the Mexican government with respect to the
stockholder’s rights as a stockholder, but is not deemed to have waived any other rights it may have, including any rights under the U.S. securities laws,
with respect to its investment in Televisa. If the stockholder should invoke governmental protection in violation of this agreement, its shares could be
forfeited to the Mexican government.
Exclusive Jurisdiction. Our bylaws provide that legal action relating to the execution, interpretation or performance of the bylaws shall be brought
only in federal courts located in Mexico City.
Duration. Our corporate existence under our bylaws continues until 2106.
Dissolution or Liquidation. Upon any dissolution or liquidation of our company, our stockholders will appoint one or more liquidators at an
extraordinary general stockholders’ meeting to wind up our affairs. The approval of holders of the majority of the Series “A” Shares is necessary to appoint
or remove any liquidator. Upon a dissolution or liquidation, holders of Series “D” Shares will be entitled to both accrued but unpaid dividends in respect of
their Series “D” Shares, plus the theoretical value of their Series “D” Shares (as set forth in our bylaws). The theoretical value of our Series “D” Shares is
Ps.0.00688246130560 per share. Thereafter, a payment per share will be made to each of the holders of Series “A” Shares, Series “B” Shares and
Series “L” Shares equivalent to the payment received by each of the holders of Series “D” Shares. The remainder will be distributed equally among all
stockholders in proportion to their number of Shares and amount paid.
Redemption. Our bylaws provide that we may redeem our Shares with distributable profits without reducing our capital stock by way of a
stockholder resolution at an extraordinary stockholders’ meeting. In accordance with Mexican law and our bylaws:
·
any redemption shall be made on a pro-rata basis among all of our stockholders;
·
to the extent that a redemption is effected through a public tender offer on the Mexican Stock Exchange, the stockholders’ resolution
approving the redemption may empower our Board to specify the number of shares to be redeemed and appoint the related intermediary
or purchase agent; and
·
any redeemed shares must be cancelled.
Share Repurchases. As provided by Mexican law, our bylaws allow us to repurchase our Shares on the Mexican Stock Exchange at then prevailing
market prices. The amount of capital stock allocated to share repurchases and the amount of the corresponding reserve created for this purpose is
determined annually by our stockholders at an ordinary general stockholders’ meeting. The aggregate amount of resources allocated to share repurchases in
any given year cannot exceed the total amount of our net profits in any given year, including retained earnings. Share repurchases must be charged to either
our net worth if the repurchased Shares remain in our possession or our capital stock if the repurchased Shares are converted into treasury shares, in which
case our capital stock is reduced automatically in an amount equal to the theoretical value of any repurchased Shares, if any. Any surplus is charged to the
reserve for share repurchases. If the purchase price of the Shares is less than the theoretical value of the repurchased Shares, our capital stock account will
be affected by an amount equal to the theoretical value of the repurchased Shares. Under Mexican law, we are not required to create a special reserve for
the repurchase of shares, nor do we need the approval of our Board to effect share repurchases. In addition, any repurchased Shares cannot be represented
at any stockholders’ meeting.
Conflicts of Interest. Under the Mexican Securities Market Law, any stockholder that votes on a transaction in which his, her or its interests
conflict with our interests may be liable for damages, but only if the transaction would not have been approved without his, her or its vote. In addition, any
member of the Board of Directors that votes on a transaction in which his, her or its interests conflict with our interests may be liable for damages. The
Mexican Securities Market Law also imposes a duty of care and a duty of loyalty on directors as described in “Directors, Senior Management and
Employees — Our Board of Directors — Duty of Care and Duty of Loyalty” in the Form 20-F. In addition, pursuant to the Mexican Securities Market Law,
the Board of Directors, with input from the Corporate Practices Committee, must review and approve transactions and arrangements with related parties.
Appraisal Rights and Other Minority Protections. Whenever our stockholders approve a change in our corporate purpose or jurisdiction of
organization or our transformation from one type of company to another, any stockholder entitled to vote that did not vote in favor of these matters has the
right to receive payment for its Series “A” Shares, Series “B” Shares, Series “D” Shares or Series “L” Shares in an amount calculated in accordance with
Mexican law. However, stockholders must exercise their appraisal rights within fifteen days after the stockholders’ meeting at which the matter was
approved. Because the holders of Series “L” Shares and Series “D” Shares may only vote in limited circumstances, appraisal rights are generally not
available to them. See “Voting Rights and Stockholders’ Meetings” above.
Because the CPO Trustee must vote at a general stockholders’ meeting, the Series “A” Shares, Series “B” Shares and Series “D” Shares held by
non-Mexicans through the CPO Trust will be voted by individuals appointed by the Technical Committee of the CPO Trust, in the same manner as the
majority of the Series “A” Shares held by Mexican nationals (directly, or through the CPO Trust, as the case may be). As a result, the Series “A” Shares,
Series “B” Shares and Series “D” Shares underlying CPOs held by non-Mexicans will not be voted against any change that triggers the appraisal rights of
the holders of these Shares. Therefore, these appraisal rights will not be available to holders of CPOs (or GDRs) with respect to Series “A” Shares,
Series “B” Shares or Series “D” Shares.
The Mexican Securities Market Law and our bylaws include provisions that permit:
·
holders of at least 10% of our outstanding capital stock to request our Chairman of the Board or of the Audit Committee or Corporate
Practices Committee to call a stockholders’ meeting in which they are entitled to vote;
·
subject to the satisfaction of certain requirements under Mexican law, holders of at least 5% of our outstanding capital stock to bring an
action for civil liabilities against our directors;
·
holders of at least 10% of our Shares that are entitled to vote and are represented at a stockholders’ meeting to request postponement of
resolutions with respect to any matter on which they were not sufficiently informed; and
·
subject to the satisfaction of certain requirements under Mexican law, holders of at least 20% of our outstanding capital stock to contest
and suspend any stockholder resolution.
In addition, in accordance with the Mexican Securities Market Law, we are also subject to certain corporate governance requirements, including
the requirement to maintain an audit committee and a corporate practices committee, and to elect independent directors. The protections afforded to
minority stockholders under Mexican law are generally different from those in the U.S. and many other jurisdictions. Substantive Mexican law concerning
fiduciary duties of directors has not been the subject of extensive judicial interpretation in Mexico, unlike many states in the U.S. where duties of care and
loyalty elaborated by judicial decisions help to shape the rights of minority stockholders. Furthermore, despite the fact that recent amendments to the
Mexican Federal Code of Civil Procedures have provided for certain types of class actions, these actions are limited to subject matters related to the use of
goods or the provision of public or private services, as well as environmental matters. Therefore, Mexican civil procedure does not contemplate class
actions or stockholder derivative actions, which permit stockholders in U.S. courts to bring actions on behalf of other stockholders or to enforce rights of
the corporation itself. Stockholders in Mexico also cannot challenge corporate actions taken at stockholders’ meetings unless they meet stringent procedural
requirements. See “Voting Rights and Stockholders’ Meetings” above. As a result of these factors, it is generally more difficult for our minority
stockholders to enforce rights against us or our directors or Major Stockholders than it is for stockholders of a corporation established under the laws of a
state of the U.S. In addition, under U.S. securities laws, as a foreign private issuer we are exempt from certain rules that apply to domestic U.S. issuers with
equity securities registered under the Securities Exchange Act of 1934, as amended, or the Exchange Act, including the proxy solicitation rules. We are also
exempt from many of the corporate governance requirements of the New York Stock Exchange.
Antitakeover Protections
General. Our bylaws provide that, subject to certain exceptions: (i) any person that individually or together with any related party, that intends to
acquire, directly or indirectly, in one or successive acts, beneficial ownership of ordinary Shares (as defined below) which, when coupled with ordinary
Shares previously beneficially owned, represent 10% or more of our outstanding ordinary Shares; (ii) any competitor, that individually or together with any
Related Party, that intends to acquire, directly or indirectly, in one or successive acts, beneficial ownership of Shares which, when coupled with Shares
previously beneficially owned by such competitor, group or their affiliates, represent 5% or more of our outstanding capital stock; (iii) any person that
individually or together with any related party, that wishes to acquire, directly or indirectly, in one or successive acts, beneficial ownership of ordinary
Shares representing 10% or more of our outstanding ordinary Shares; and (iv) any competitor that individually or together with any related party, that
intends to acquire, directly or indirectly, in one or successive acts, beneficial ownership of Shares
representing 5% or more of our capital stock, must obtain the prior approval of our Board of Directors and/or of our stockholders, as the case may be,
subject to certain exceptions summarized below. Holders that acquire Shares in violation of these requirements will not be registered in our stock registry.
Accordingly, these holders will not be able to vote such Shares or receive any dividends, distributions or other rights in respect of these Shares. In addition,
pursuant to our bylaws, these holders will be obligated to pay us a penalty in an amount equal to the market value of the Shares so acquired. Pursuant to our
bylaws, “Shares” are defined as the shares (of any class or series) representing our capital stock, and any instruments or securities that represent such shares
or that grant any right with respect to or are convertible into those shares, expressly including CPOs; our Series “A” Shares and Series “B” Shares are our
ordinary Shares.
Pursuant to our bylaws, a “competitor” is generally defined as any person or entity dedicated, directly or indirectly, to any of the following businesses
or activities: television production and broadcasting, pay-TV production, program licensing, DTH satellite services, publishing (newspaper and/or
magazine), publishing distribution, music recording, cable television, the transmission of programming and/or other content by any other means known or
to be known, radio broadcasting and production, the promotion of professional sports and other entertainment events, paging services, production, feature
film/motion picture production and distribution, dubbing and/or the operation of an Internet portal. A “competitor” is also defined to include any person,
entity and/or group that is engaged in any type of business or activity in which we may be engaged from time to time and from which we derive 5% or
more of our consolidated income.
Board Notices, Meetings, Quorum Requirements and Approvals. To obtain the prior approval of our Board, a potential acquiror must properly deliver a
written notice that states, among other things: (i) the number and class/type of our Shares it beneficially owns; (ii) the percentage of Shares it beneficially
owns with respect to both our outstanding capital stock and the respective class/type of our Shares; (iii) the number and class/type of Shares it intends to
acquire; (iv) the number and class/type of Shares it intends to grant or share a common interest or right; (v) its identity, or in the case of an acquiror which
is a corporation, trust or legal entity, its stockholders or beneficiaries as well as the identity and nationality of each person effectively controlling such
corporation, trust or legal entity; (vi) its ability to acquire our Shares in accordance with our bylaws and Mexican law, (vii) its source of financing the
intended acquisition; (viii) if it has obtained any financing from one of its related parties for the payment of the Shares; (ix) the purpose of the intended
acquisition; (x) if it intends to acquire additional Shares in the future; which coupled with the current intended acquisition of ordinary Shares and the
ordinary Shares previously beneficially owned by the potential acquiror, would result in ownership of 20% or more of our ordinary Shares; (xi) if it intends
to acquire control of us in the future; (xii) if the acquiror is our competitor or if it has any direct or indirect economic interest in or family relationship with
one of our competitors; and (xiii) the identity of the financial institution, if any, that will act as the underwriter or broker in connection with any tender
offer.
Either the Chairman, the Secretary or the Alternate Secretary of our Board of Directors must call a Board meeting within 10 calendar days following
the receipt of the written notice and the Board meeting must be held within 45 calendar days following the call. Action by written consent is not permitted.
With the exception of acquisitions that must be approved by the general extraordinary stockholders’ meeting as described below in “— Stockholder
Notices, Meetings, Quorum Requirements and Approvals” in order to proceed with any acquisition of Shares that require Board authorization as set forth in
our bylaws, such acquisition must be approved by at least the majority of the members of our Board present at a meeting at which at least 75% of the
members of our Board are present. Such acquisitions must be acted upon by our Board within 60 calendar days following the receipt of the written notice
described above, unless the Board determines that it does not have sufficient information upon which to base its decision. In such case, the Board shall
deliver a written request to the potential acquiror for any additional information that it deems necessary to make its determination. The 60 calendar days
referred to above will commence following the receipt of the additional information from the potential acquiror to render its decision.
Stockholder Notices, Meetings, Quorum Requirements and Approvals. In the event: (i) of a proposed acquisition of Shares that would result in a
“change of control”; (ii) that our Board cannot hold a Board meeting for any reason; (iii) of a proposed acquisition by a competitor and having certain
characteristics; or (iv) that the Board determines that the proposed acquisition must be approved by our stockholders at a general extraordinary
stockholders’ meeting, among others, then the proposed acquisition must be approved by the holders of at least 75% of our outstanding ordinary Shares at a
general extraordinary stockholders’ meeting (both in the case of first and subsequent calls) at which the holders of at least 85% of our outstanding ordinary
Shares are present. In addition, any proposed merger, spin-off, or capital increase or decrease which results in a change of control must also be approved by
the holders of at least 75% of our outstanding ordinary Shares at a general extraordinary stockholders’ meeting (both in the case of first and subsequent
calls) at which the holders of at least 85% of our outstanding ordinary Shares are present. Pursuant to our bylaws, a “change of control” is defined as the
occurrence of any of the following: (i) the acquisition or transfer of ownership of a majority of our outstanding ordinary Shares; (ii) the ability of a person,
entity or group, other than the person who currently has the ability to, directly or indirectly, elect a majority of the members of our Board of Directors, to
elect a majority of the members of our Board of Directors; or (iii) the ability of a person, entity or group, other than the person who currently has the ability
to, directly or indirectly, determine our administrative decisions or policies, to determine our administrative decisions or policies. In the event that the
general extraordinary stockholders’ meeting must approve the proposed acquisition, either the Chairman, the Secretary or the Alternate Secretary of our
Board of Directors must publish a call for a general extraordinary stockholders’ meeting in the Official Gazette of the Federation and two other newspapers
of general circulation in Mexico City at least 30 calendar days prior to such meeting (both in the case of first and subsequent calls). Once the call for the
general extraordinary stockholders’ meeting has been published, all information related to the agenda for the meeting must be available for review by the
holders of Shares at the offices of our Secretary.
Mandatory Tender Offers in the Case of Certain Acquisitions. If either our Board of Directors or our stockholders at a general extraordinary
stockholders’ meeting, as the case may be, authorize an acquisition of ordinary Shares which increases the acquiror’s ownership to 20% or more, but not
more than 50%, of our outstanding ordinary Shares, without such acquisition resulting in a change of control, then the acquiror must effect its acquisition
by way of a cash tender offer for a specified number of Shares equal to the greater of (x) the percentage of ordinary Shares intended to be acquired or
(y) 10% of our outstanding capital stock. In the event that our stockholders approve an acquisition that would result in a change of control, the acquiror
must effect its acquisition by way of a cash tender offer for 100% of our total outstanding capital stock at a price which cannot be lower than the highest of
the following: (i) the book value of the ordinary Shares and CPOs as reported on the last quarterly income statement approved by the Board of Directors,
(ii) the highest closing price of the ordinary Shares, on any stock exchange during any of the three hundred-sixty-five (365) days preceding the date of the
stockholders’ resolution approving the acquisition; or (iii) the highest price paid for any Shares, at any time by the acquiror. All tender offers must be made
in Mexico and the U.S. within 60 days following the date on which the acquisition was approved by our Board of Directors or stockholders’ meeting, as the
case may be. All holders must be paid the same price for their ordinary Shares. The provisions of our bylaws summarized above regarding mandatory
tender offers in the case of certain acquisitions are generally more stringent than those provided for under the Mexican Securities Market Law. In
accordance with the Mexican Securities Market Law, bylaw provisions regarding mandatory tender offers in the case of certain acquisitions may differ
from the requirements set forth in such law, provided that those provisions are more protective to minority stockholders than those afforded by law. In these
cases, the relevant bylaw provisions, and not the relevant provisions of the Mexican Securities Market Law, will apply to certain acquisitions specified
therein.
Exceptions. The provisions of our bylaws summarized above will not apply to (i) transfers of ordinary Shares and/or CPOs by operation of the laws of
inheritance, (ii) acquisitions of ordinary Shares and/or CPOs by any person who, directly or indirectly, is entitled to appoint the greatest number of
members to our Board of Directors, as well as by (A) entities controlled by such person, (B) affiliates of such person, (C) the estate of such person,
(D) certain family members of such person, and (E) such person, when such person acquires any ordinary Shares and/or CPOs from any entity, affiliate,
person or family member referred to in (A), (B) and (D) above, and (iii) acquisitions or transfers of ordinary Shares and/or CPOs by us, our subsidiaries or
affiliates, or any trust created by us or any of our subsidiaries.
Amendments to the Antitakeover Provisions. Any amendments to these antitakeover provisions must be authorized by the CNBV and registered before
the Public Registry of Commerce at our corporate domicile.
Exhibit 4.17
CREDIT AGREEMENT
Dated as of April 9, 2024
among
GRUPO TELEVISA, S.A.B.
CABLEMÁS TELECOMUNICACIONES, S.A. de C.V., and
TELEVISIÓN INTERNACIONAL, S.A. de C.V.
as Borrowers
THE SEVERAL LENDERS AND OTHER FINANCIAL INSTITUTIONS
FROM TIME TO TIME PARTIES HERETO,
BBVA MÉXICO, S.A., INSTITUCIÓN DE BANCA MÚLTIPLE, GRUPO FINANCIERO BBVA MÉXICO
as Administrative Agent
and
BBVA MÉXICO, S.A., INSTITUCIÓN DE BANCA MÚLTIPLE, GRUPO FINANCIERO BBVA MÉXICO,
BANCO SANTANDER MÉXICO, S.A., INSTITUCIÓN DE BANCA MÚLTIPLE, GRUPO FINANCIERO SANTANDER MÉXICO, and
SCOTIABANK INVERLAT, S.A., INSTITUCIÓN DE BANCA MÚLTIPLE, GRUPO FINANCIERO SCOTIABANK INVERLAT
as Joint Lead Arrangers and Joint Bookrunners
TABLE OF CONTENTS
Page
Section 1. Definitions, Interpretation
1
1.01
Definition of Terms
1
1.02
Accounting Terms
18
1.03
Interpretation of Defined Terms
18
1.04
Calculation of Time Periods
19
1.05
Foreign Currency Calculations
19
1.06
All Amounts Payable in Pesos
19
Section 2. Amount and Terms of Credit
19
2.01
The Commitments
19
2.02
Loans and Borrowings
20
2.03
Funding of Borrowings
21
2.04
Interest
21
2.05
Termination and Reduction of Commitments
22
2.06
Repayment of Loans; Rollovers; Evidence of Debt
23
2.07
Prepayment of Loans
25
2.08
Fees
27
2.09
Increased Costs
27
2.10
Break Funding Payments
28
2.11
Taxes
29
2.12
Payments Generally; Pro Rata Treatment; Sharing of Set-offs
32
2.13
Mitigation Obligations; Replacement of Lenders
33
2.14
Defaulting Lenders
35
2.15
Illegality
36
2.16
Borrower Representative
37
2.17
Joint and Several Liability
37
Section 3. Conditions Precedent
39
3.01
Conditions Precedent to Effectiveness
39
3.02
Conditions Precedent to Each Borrowing
40
Section 4. Representations and Warranties
41
4.01
Representations and Warranties
41
Section 5. Covenants
43
5.01
Affirmative Covenants of the Borrowers
43
5.02
Negative Covenants of the Borrowers
47
Section 6. Events of Default
47
6.01
Event of Default
47
6.02
Application of Payments
49
Section 7. The Administrative Agent
50
7.01
Appointment
50
7.02
Delegation of Duties
50
7.03
Exculpatory Provisions
51
7.04
Reliance by Administrative Agent
52
7.05
Notice of Default
52
7.06
Non-Reliance on Administrative Agent and Other Lenders
53
7.07
Indemnification by Lenders
53
7.08
Administrative Agent in Its Individual Capacity
54
7.09
Successor Administrative Agent
54
7.10
No Fiduciary Relationship
55
7.11
Obligations of Administrative Agent and Lenders
55
7.12
Enforcement
55
7.13
Compliance with Laws
55
7.14
Proofs of Claim
55
7.15
Erroneous Payments
55
Section 8. Miscellaneous
57
8.01
Amendments and Waivers
57
8.02
Notices
59
8.03
No Waiver; Cumulative Remedies
60
8.04
Payment of Expenses; Indemnity
60
8.05
Successors and Assigns; Participations; Purchasing Lenders
62
8.06
Adjustments; Set-off
65
8.07
Counterparts
66
8.08
GOVERNING LAW
66
8.09
WAIVERS OF JURY TRIAL
66
8.10
Submission to Jurisdiction; Appointment of Agent to Accept Service of Process.
67
8.11
Confidentiality of Information
67
8.12
USA Patriot Act
68
8.13
Conversion of Currencies
68
8.14
Acknowledgement and Consent to Bail-In of Affected Financial Institutions
69
Schedule 2.01
Commitments
Schedule 3.01(b)
Closing Checklist
Schedule 3.01(h)
Mexican Law Invoice Requirements
Exhibit A
Form of Assignment and Assumption Agreement
Exhibit B
Form of Borrowing Request
Exhibit C
Form of Revolving Credit Note
Exhibit D
Form of Term Note
CREDIT AGREEMENT, dated as of April 9, 2024, among GRUPO TELEVISA, S.A.B. (the “Parent Borrower”), CABLEMÁS
TELECOMUNICACIONES, S.A. de C.V. (“Cablemás”), TELEVISIÓN INTERNACIONAL, S.A. de C.V. (“TVI,” and together with Parent Borrower and
Cablemás, the “Borrowers” and each a “Borrower”), the Lenders and other financial institutions from time to time parties to this Agreement, BBVA
MÉXICO, S.A., INSTITUCIÓN DE BANCA MÚLTIPLE, GRUPO FINANCIERO BBVA MÉXICO, as administrative agent for the Lenders hereunder (in
such capacity, the “Administrative Agent” or “BBVA”), and BBVA, BANCO SANTANDER MÉXICO, S.A., INSTITUCIÓN DE BANCA MÚLTIPLE,
GRUPO FINANCIERO SANTANDER MÉXICO, (“Santander”) and SCOTIABANK INVERLAT, S.A., INSTITUCIÓN DE BANCA MÚLTIPLE,
GRUPO FINANCIERO SCOTIABANK INVERLAT (“Scotiabank”) as Joint Lead Arrangers and Joint Bookrunners.
W I T N E S S E T H:
WHEREAS, the Borrowers have requested the Lenders to provide (i) a revolving senior unsecured credit facility in the aggregate
principal amount of the Peso Equivalent of US$500,000,000, and (ii) a senior unsecured term loan credit facility in the aggregate principal amount of
MXN$10,000,000,000; and
WHEREAS, for valuable consideration, the Lenders are willing to provide such credit facility upon and subject to the terms and
conditions hereinafter set forth;
NOW, THEREFORE, the parties hereto hereby agree as follows:
SECTION 1.
DEFINITIONS, INTERPRETATION
1.01
Definition of Terms. For purposes of this Agreement, the following terms will have the meaning given below:
“2019 Term Facility”: the Credit Agreement dated as of June 28, 2019, by and among Parent Borrower, the lenders parties thereto, and
BBVA, as administrative agent.
“2022 Revolving Facility”: the Credit Agreement dated as of February 16, 2022, by and among Parent Borrower, the lenders parties
thereto, and BBVA, as administrative agent.
“Acquisition”: the acquisition of all or any portion of the assets or all or any portion of the Capital Stock of any Person constituting a
business or line of business with a gross purchase price in excess of the Threshold Amount.
“Administrative Agent’s Account”: the following account maintained by the Administrative Agent at BBVA México, S.A.: Account
Number: 0182 605 430; CLABE: 012 180 00182605430 9; Beneficiary: Cuenta Liquidadora Banca Corporativa; Reference: Credito Sindicado Televisa
2024; Currency: Pesos.
“Administrative Agent’s Office”: the office of the Administrative Agent located at Two Manhattan West, 9th Floor, New York, NY, 10001.
2
“Affected Financial Institution”: (a) any EEA Financial Institution or (b) any UK Financial Institution.
“Affiliate”: in relation to any Person, any other Person that directly or indirectly Controls or is Controlled by or is under the common
direct or indirect Control with the aforesaid Person.
“Aggregate Revolving Credit Commitments”: at any time, the aggregate amount of the Revolving Credit Commitments of all Revolving
Credit Lenders at such time, as such Aggregate Revolving Credit Commitments may be reduced from time to time pursuant to Section 2.05. The initial
amount of the Aggregate Revolving Credit Commitments is the Peso Equivalent of US$500,000,000.
“Aggregate Revolving Credit Exposure”: at any time, the aggregate amount of the Revolving Credit Exposures of all Lenders at such
time.
“Aggregate Term Loan Commitments”: at any time, the aggregate amount of the Term Loan Commitments of all Term Lenders at such
time, as such Aggregate Term Loan Commitments may be reduced from time to time pursuant to Section 2.05. The initial Aggregate Term Loan
Commitment is MXN$10,000,000,000.
“Agreement”: this agreement and any modification thereof.
“Anti-Corruption Laws”: all laws and regulations applicable to the Borrowers relating to anti-bribery or anti-corruption, including the
U.S. Foreign Corrupt Practices Act of 1977 (15 U.S.C. §78dd-1 et seq.), as amended, Mexican Ley General de Responsabilidades Administrativas, and
legislation adopted in furtherance of the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions, the
UN Convention Against Corruption, and to the extent applicable, so long as any bank formed under the laws of Canada, or a bank with a parent company
formed under the laws of Canada is a lender under this Agreement, the Canadian Corruption of Foreign Public Officials Act.
“Anti-Money Laundering Laws”: all laws and regulations applicable to the Borrowers relating to anti-money laundering, including the
Bank Secrecy Act as amended by the Patriot Act, the Money Laundering Control Act of 1986, the Mexican Ley Federal para la Prevención e Identificación
de Operaciones con Recursos de Procedencia Ilícita, the Mexican Ley de Instituciones de Crédito, General Provisions related to article 115 of the Credit
Institutions Law (Disposiciones de carácter general a que se refiere el artículo 115 de la Ley de Instituciones de Crédito), and to the extent applicable, so
long as any bank formed under the laws of Canada, or a bank with a parent company formed under the laws of Canada is a lender under this Agreement, the
Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada).
“Applicable Margin”: for any day, with respect to any Loan, the applicable margin per annum set forth below under the caption “Margin”
based upon the Net Leverage Ratio applicable on such date:
Pricing Level
Net Leverage Ratio
Margin
3
Level I
< 3.00 to 1.00
1.250 percentage points
Level II
> 3.00 to 1.00
1.500 percentage points
Except as otherwise provided in the paragraph below, adjustments, if any, to the Pricing Level then in effect shall be effective three
(3) Business Days after the Administrative Agent has received the applicable financial statements (and calculation of the Net Leverage Ratio) (it being
understood and agreed that each change in Pricing Level shall apply during the period commencing on the effective date of such change and ending on the
date immediately preceding the effective date of the next such change).
Notwithstanding the foregoing, Pricing Level I shall be deemed to be applicable until the Administrative Agent’s receipt of the applicable
financial statements for the Parent Borrower’s first fiscal quarter ending after the Effective Date and adjustments to the Pricing Level then in effect shall
thereafter be effected in accordance with the preceding paragraphs.
“Applicable Percentage”: as to any Lender, the percentage of the Aggregate Revolving Credit Commitments or Aggregate Term Loan
Commitment, as applicable, represented by such Lender’s Commitment. If the Commitments have terminated or expired, the Applicable Percentage shall
be determined based upon the Commitment most recently in effect, giving effect to any assignments.
“Approved Borrower”: means a Person designated by the Parent Borrower under Section 5.02(a)(C) or 8.05(a) as a new Borrower that
(a) has provided the Administrative Agent and each Lender the information specified in Section 3.01(g), in form and substance reasonably acceptable to
each such recipient, and (b) is located in a country where each Lender is permitted to lend, it being understood that Mexico and the U.S. are permitted
countries.
“Asset Sale”: any sale, transfer or other disposition by a Borrower or any of its Subsidiaries to any Person other than any Subsidiary of
the Parent Borrower of any asset owned by it other than (i) sales, transfers or other dispositions of inventory made in the ordinary course of business and
(ii) any single sale of assets (or series of related sales of assets) which generates gross sale proceeds of less than the Threshold Amount.
“Assignment and Assumption Agreement”: an Assignment and Assumption Agreement, substantially in the form of Exhibit A.
“Authorized Officer”: for each Borrower, the Co-Chief Executive Officers, any Executive Vice President, the Vice President of Finance,
the Vice President and Corporate Controller, the Legal Vice President and General Counsel, or any legal representative with sufficient power of attorney of
such Borrower, provided that the said legal representative has a management position in such Borrower; and solely for the Subsidiary Co-Borrowers, also
the Chief Executive Officer of the Cable Segment, and the Chief Financial Officer of the Cable Segment.
4
“Bail-In Action”: the exercise of any Write-Down and Conversion Powers by the applicable EEA Resolution Authority in respect of any
liability of an EEA Financial Institution.
“Bail-In Legislation”: (a) with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European
Parliament and of the Council of the European Union, the implementing law, regulation, rule or requirement for such EEA Member Country from time to
time which is described in the EU Bail-In Legislation Schedule and (b) with respect to the United Kingdom, Part I of the United Kingdom Banking Act
2009 (as amended from time to time) and any other law, regulation or rule applicable in the United Kingdom relating to the resolution of unsound or failing
banks, investment firms or other financial institutions or their affiliates (other than through liquidation, administration or other insolvency proceedings).
“Benefitted Lender”: has the meaning set forth in Section 8.06(a).
“Borrower”: has the meaning set forth in the preamble to this Agreement.
“Borrower Representative”: has the meaning set forth in Section 2.16.
“Borrowing”: the borrowing by any Borrower of a Loan from all the Lenders having Commitments on a given date, and collectively, the
“Borrowings.”
“Borrowing Minimum”: the Peso Equivalent of US$3,000,000.
“Borrowing Multiple”: the Peso Equivalent of US$1,000,000.
“Borrowing Request”: a request by any Borrower for a Borrowing in accordance with Section 2.02, in the form of Exhibit B or any other
form approved by the Administrative Agent.
“Business Day”: any day except Saturday, Sunday and any day on which banking institutions in Mexico City or New York City are
authorized or obligated by law to remain closed.
“Capital Lease”: as applied to any Person, any lease of any good or asset which is required to be capitalized on the balance sheet of such
person in accordance with IFRS. Effective January 1, 2019, as a result of the initial adoption of IFRS 16 Leases by the Parent Borrower, the amount of any
“Capital Lease” means the present value of the related lease obligation less the right of use assets recognized in connection with this obligation at the date
of the financial reporting.
“Capital Stock”: with respect to any Person, any and all shares, interests, rights to purchase, warrants, options, participation or other
equivalents of or interests in (however designated) equity of such Person, including any preferred stock, any limited or general partnership interest and any
limited liability company membership interest.
“Change in Law”: the occurrence, after the date of this Agreement (or with respect to any Lender, if later, after the date on which such
Lender becomes a Lender), of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule,
regulation or treaty or in the administration, interpretation or application thereof by any Governmental Authority, or (c) the making or issuance of any
request, rule, guideline,
5
requirement or directive (whether or not having the force of law) by any Governmental Authority; provided however, that notwithstanding anything herein
to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines, requirements and directives
thereunder, or issued in connection therewith, and (y) all requests, rules, guidelines, requirements and directives promulgated by the Bank for International
Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in
each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law” regardless of the date enacted, adopted, issued or implemented.
“Change in Law Repayment Request”: has the meaning set forth in Section 2.09(a).
“Change in Tax Law”: any Change in Law related to Taxes.
“Change of Control”: the time at which (i) a Person other than the Specified Shareholders of the Parent Borrower and their Affiliates (the
“New Acquirer”) becomes the owner of over fifty percent (50%) of the voting shares of the Parent Borrower with full voting rights and authority to vote on
the appointment of directors of the Parent Borrower and (A) the New Acquirer is entitled under applicable laws to exercise full voting rights with respect to
such shares and (B) the New Acquirer has the right to elect more directors than the Specified Shareholders or (ii) Cablemás or TVI cease to be a direct or
indirect Subsidiary of the Parent Borrower.
“Change of Control Repayment Request”: has the meaning set forth in Section 2.07(d).
“Commercial Accounts Payable”: with respect to any Person, any amounts payable, promissory notes or any other monetary obligation
created, assumed or guaranteed by the aforesaid Person or any of its Subsidiaries in favor of commercial creditors, arising within the ordinary course of
business regardless of due date, related to (i) the acquisition of goods or services, (ii) programming and films or (iii) program transmission rights, including
events.
“Commitment”: as to each Lender, such Lender’s Revolving Credit Commitment or Term Loan Commitment, in each case as the context
may require.
“Connection Income Taxes”: Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are
franchise Taxes or branch profits Taxes.
“Consolidated Interest Expense”: as of any date of determination, the total gross expense for interest actually paid for the most recently
completed period of four (4) consecutive fiscal quarters, of Parent Borrower and its consolidated Subsidiaries, attributable to said period in accordance with
IFRS.
“Control”: the possession, directly or indirectly, of the power to direct or cause the direction of the management or financial policies of a
Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings correlative thereto.
6
“Conversion Powers”: with respect to any EEA Resolution Authority, the write-down and conversion powers of such EEA Resolution
Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion powers are described
in the EU Bail-In Legislation Schedule.
“Core Business”: business activities in the same or reasonably related line of business to which the Parent Borrower and its Subsidiaries
are engaged in on the date of this Agreement, which will include any adaptations, modifications and/or implementations of the aforesaid business derived
from technological innovation and/or convergence, as well as new trends in the industries in which the Parent Borrower and its Subsidiaries participate.
“Default”: any of the events specified in Section 6, whether or not any requirement for the giving of notice, the lapse of time, or both, or
any other condition, has been satisfied.
“Defaulting Lender”: any Lender that (a) has failed to (i) fund all or any portion of its Loans within two (2) Business Days of the date
such Loans were required to be funded hereunder unless such Lender notifies the Administrative Agent and the Borrower Representative in writing that
such failure is the result of such Lender’s determination that one or more conditions precedent to funding (each of which conditions precedent, together
with any applicable default, shall be specifically identified in such writing) has not been satisfied, or (ii) pay to the Administrative Agent or any Lender any
other amount required to be paid by it hereunder within two (2) Business Days of the date when due, (b) has notified the Borrower Representative or the
Administrative Agent in writing that it does not intend to comply with its funding obligations hereunder (unless such writing relates to such Lender’s
obligation to fund a Loan hereunder and states that such position is based on such Lender’s determination that a condition precedent to funding (which
condition precedent, together with any applicable default, shall be specifically identified in such writing) cannot be satisfied), or has made a general public
statement to the effect that such Lender is unable to meet its lending obligations, (c) has failed, within three (3) Business Days after written request by the
Administrative Agent or the Borrower Representative, to confirm in writing to the Administrative Agent and the Borrower Representative that it will
comply with its prospective funding obligations hereunder (provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon
receipt of such written confirmation by the Administrative Agent and the Borrower Representative), or (d) has, or has a direct or indirect parent company
that has, (i) become the subject of a proceeding under any Federal, state or foreign bankruptcy, insolvency, receivership or similar law, or (ii) had appointed
for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or
liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any Mexican, state or federal regulatory authority acting in
such a capacity, or (iii) become the subject of a Bail-in Action; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or
acquisition of any equity interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership
interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or Mexico or from the enforcement
of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any
contracts or agreements made with such Lender. Any determination by the Administrative Agent that a Lender is a Defaulting Lender under any one or
more of clauses (a) through (d) above shall be conclusive and binding absent manifest error, and
7
such Lender shall be deemed to be a Defaulting Lender upon delivery of written notice of such determination to the Borrower Representative and each
Lender.
“Deposits”: those amounts received by Parent Borrower or its Subsidiaries under deposit agreements, prepayment agreements or other
agreements between Parent Borrower or its Subsidiaries and third parties, relating to the performance of services or sale of goods to aforesaid third parties,
either in money, promissory notes, accounts receivable or other assets.
“Dollars” and “US$”: the legal currency of the United States of America.
“Economic Agent”: has the meaning assigned thereto in Mexican competition law.
“EEA Financial Institution”: (a) any credit institution or investment firm established in any EEA Member Country which is subject to the
supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in
clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in
clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent;
“EEA Member Country”: any of the member states of the European Union, Iceland, Liechtenstein, and Norway.
“EEA Resolution Authority”: any public administrative authority or any Person entrusted with public administrative authority of any
EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.
“Effective Date”: the date on which all conditions precedent set forth in Section 3.01 have been satisfied or waived.
“Eligible Transferee”: a Mexican or international bank or other commercial bank that has been approved pursuant to Section 8.05(c).
“Erroneous Payment”: has the meaning set forth in Section 7.15(a).
“Erroneous Payment Subrogation Rights”: has the meaning set forth in Section 7.15(d).
“EU Bail-In Legislation Schedule”: the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor
Person), as in effect from time to time.
“Event of Default”: has the meaning set forth in Section 6.01.
“Exchange Rate”: on any day, (i) for purposes of determining the Peso Equivalent of Dollars, on such day, the exchange rate published by
the Bank of Mexico (Banco de México) in the Official Gazette (Diario Oficial de la Federación) as the rate “para solventar obligaciones denominadas en
moneda extranjera pagaderas en la República Mexicana”, and (ii) for purposes of the conversion of Pesos into any currency other than Dollars the
exchange rate determined by WM/Reuters, known as the “WMR London 4pm Fix” (Bloomberg: WMCO). In the event that
8
such rate is not published by the Bank of Mexico, as applicable, the Exchange Rate shall be determined by reference to such other publicly available
service for displaying exchange rates as may be agreed upon by the Administrative Agent and the Borrower Representative, or, in the absence of such an
agreement, such Exchange Rate shall instead be the arithmetic average of the spot rates of exchange of the Administrative Agent in the market where its
foreign currency exchange operations in respect of such currency are then being conducted, at or about such time as the Administrative Agent shall elect
after determining that such rates shall be the basis for determining the Exchange Rate, on such date for delivery two (2) Business Days later; provided that
if at the time of any such determination, for any reason, no such spot rate is being quoted, the Administrative Agent may use any reasonable method it
deems appropriate to determine such rate, and such determination shall be conclusive absent manifest error.
“Exchange Rate Date”: as applicable:
(a)
with respect to any Borrowing, the date that is three (3) Business Days prior to the date of such Borrowing; or
(b)
in any other respect, the date that is three (3) Business Days prior to the date of the relevant transaction.
“Excluded Taxes”: any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a
payment to a Recipient: (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case,
(i) imposed as a result of such Recipient being organized under the laws of, or having its principal office or its applicable lending office located in, the
jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) any Mexican withholding Taxes imposed
on amounts payable under any Loan Document to or for the account of any Lender in excess of the withholding Taxes that would have been imposed had
such recipient been a Qualified Lender at the time of payment, (c) any Taxes attributable to such Recipient’s failure to comply with Section 2.11(f) and
(d) any withholding Taxes imposed under FATCA.
“Export Credit Agency”: an official non-Mexican Financial Institution for the promotion of exports by granting loans or guarantees under
preferential conditions, organized under the laws of any country, that meets the requirements set forth in the penultimate paragraph, section b., of Article
166 of the Mexican Income Tax Law (Ley del Impuesto Sobre la Renta) refers (or any successor provisions thereof).
“Family Member”: with respect to any natural Person, (a) any linear or ancestral descendent or brother/sister (by birth or adoption) of the
aforesaid natural Person and the linear or ancestral descendants of the latter (whether through the father or mother), (b) any spouse or former spouse of any
of the foregoing and, in the case of divorce, the subsequent spouses (including for all such cases, any linear descendant, ancestor, brother or sister of the
aforesaid spouses or former spouses), (c) any legal representative, testamentary succession or estate in the event of death of any of the foregoing or the
initial beneficiaries; and (d) any trust or instrument for planning in which the beneficiaries are any of the Persons described in clauses (a) through (c) above.
9
“FATCA”: Sections 1471 through 1474 of the U.S. Tax Code, as of the date of this Agreement (or any amended or successor version that
is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof, any
agreements entered into pursuant to Section 1471(b)(1) of the U.S. Tax Code and any fiscal or regulatory legislation, rules or practices adopted pursuant to
any intergovernmental agreement, treaty or convention among Governmental Authorities and implementing the foregoing.
“Federal Funds Rate” means, for any day, the greater of (a) the rate calculated by the Federal Reserve Bank of New York based on such
day’s Federal funds transactions by depositary institutions (as determined in such manner as the Federal Reserve Bank of New York shall set forth on its
public website from time to time) and published on the next succeeding Business Day by the Federal Reserve Bank of New York as the Federal funds
effective rate and (b) 0%.
“Fee Letters”: the fee letter dated April 9, 2024 related to the Loans and Commitments set forth herein, among the Borrowers, the
Administrative Agent, the Joint Lead Arrangers and Joint Bookrunners, and certain of their affiliates and any other similar fee letter among the Borrowers,
the Administrative Agent and any of the Lenders.
“Governmental Authority”: the government of the United States of America and the United Mexican States or any other nation, or of any
political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-
national bodies).
“Governmental Licenses”: as defined in Section 4.01(c).
“IFRS”: as of any date of determination, the International Financial Reporting Standards, issued by the International Accounting
Standards Board (IASB), and any successor standards or bodies thereto, applied on a consistent basis for the periods involved and effective as of the date of
determination.
“Indebtedness”: with respect to any Person as of any date of determination (without duplication): (i) all payment obligations derived from
borrowed money; (ii) all payment obligations documented in bonds, notes, promissory notes or similar instruments; (iii) all obligations of the aforesaid
Person to pay the deferred purchase price of goods or services that have a cost of interest, whose purchase price expires after a term of one year as of the
date on which entitlement or ownership of the same has been received or on which the aforesaid services were provided, and (iv) all the obligations of the
aforesaid Person as a lessee under Capital Leases. Without prejudice to the foregoing, Indebtedness will not include liabilities that refer to: (A) accounts
payable or Indebtedness derived from or incurred in the ordinary course of business, (B) all accounts payable or liabilities that do not have an express
financial cost, (C) unpaid accrued interest, (D) federal, state and local taxes, income tax or other taxes of Mexico, the United States or any other
jurisdiction, including withholdings of workers in accordance with legislation on social security or applicable employee benefits, (E) Deposits,
(F) endorsements of credit instruments for deposit or collection or similar operations in the ordinary course of business,
10
(G) Indebtedness of the Parent Borrower or any Subsidiary thereof in favor of any Subsidiary or Affiliate thereof, (H) any debt that has been cancelled or
repaid according to the terms of the documents governing such debt, (I) Commercial Accounts Payable, (J) debts as lessee or guarantor under any lease of
satellites or transponders or in order to obtain services or ownership of satellites or transponders (regardless of whether in the case of leases, the latter are
catalogued as Capital Leases) or (K) payment obligations under derivative financial instrument agreements entered into by the Parent Borrower and/or its
Subsidiaries for hedging purposes. Subject to the provisions set forth in Section 1.05, the principal amount of any Indebtedness issued by any Person that is
denominated in a currency other than Pesos shall be the Peso Equivalent of such principal amount on the date of determination, as reflected in the financial
statements of the Parent Borrower, prepared in accordance with IFRS.
“Indemnified Person”: has the meaning set forth in Section 8.04(b).
“Indemnified Taxes”: (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any
Obligation of the Borrowers under any Loan Document and (b) to the extent not otherwise described in (a), Other Taxes.
“Interest Coverage Ratio”: as of any date of determination, the ratio of (i) Operating Segment Income to (ii) Consolidated Interest
Expense (excluding interest generated or accrued but not paid or demanded for payment) for the most recently ended Test Period, calculated on a Pro
Forma Basis.
“Interest Determination Date”: with respect to any Loan, the first day of any Interest Period relating to any Loan (or, if such day is not a
Business Day, the immediately preceding Business Day).
“Interest Period”: has the meaning set forth in Section 2.04(e).
“Judgment Currency”: has the meaning set forth in Section 8.13(a).
“Judgment Currency Conversion Date”: has the meaning set forth in Section 8.13(a).
“Lenders”: the Persons listed on Schedule 2.01 and any other Person that shall have become a party hereto pursuant to an Assignment and
Assumption Agreement, other than any such Person that ceases to be a party hereto pursuant to an Assignment and Assumption Agreement.
“Liens”: with respect to the Parent Borrower and its Significant Subsidiaries and the Subsidiary Co-Borrowers, any mortgage, pledge,
lien (statutory or other), or other security interest that secures an obligation to repay Indebtedness, with respect to assets that are important and necessary
for the Parent Borrower’s Core Business (and the loss of which would have a Material Adverse Effect).
“Loan”: means a Revolving Credit Loan and/or a Term Loan, as the context may require.
“Loan Documents”: this Agreement, the Fee Letter and the Promissory Notes.
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“Material Adverse Effect”: a material adverse effect, relevant and significant, on the main business and financial condition of the Parent
Borrower and its Significant Subsidiaries taken as a whole, and that as a consequence, adversely affects the Borrowers’ (taken as a whole) ability to comply
with its payment obligations under the Loan Documents.
“Maturity Date”: the fifth anniversary of the Effective Date.
“Mexican Financial Institution”: a financial institution that qualifies as such pursuant to article 7 of the Mexican Income Tax Law,
organized under and existing pursuant to and in accordance with the laws of Mexico and authorized to engage in the business of banking by either the
Ministry of Finance (Secretaría de Hacienda y Crédito Público) or the National Banking and Securities Commission (Comisión Nacional Bancaria y de
Valores).
“Mexican Tax Treaty”: Each treaty (Convention for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect
to Taxes on Income) that Mexico has in force as of the date of this Agreement and any similar treaty that Mexico negotiates and that becomes effective in
the future.
“Mexico”: the United Mexican States.
“Net Consolidated Debt”: as of any date of determination, the total aggregate amount of all Indebtedness of the Parent Borrower and its
Subsidiaries, on a consolidated basis, minus cash, cash equivalents, temporary investments and held-to-maturity and available-for-sale investments, and,
effective from and after January 1, 2018, the equivalent financial asset investments under the guidelines of IFRS 9 Financial Instruments, calculated on a
consolidated basis, of the Parent Borrower and its Subsidiaries on such date.
“Net Leverage Ratio”: at any date of determination, the ratio of Net Consolidated Debt to Operating Segment Income for the most
recently ended Test Period, calculated on a Pro Forma Basis.
“New Acquirer”: has the meaning set forth in the definition of “Change of Control.”
“Non-Consenting Lender”: has the meaning set forth in Section 2.13(b).
“Non-Defaulting Lender”: at any time, each Lender that is not a Defaulting Lender at such time.
“OFAC”: the U.S. Department of the Treasury’s Office of Foreign Assets Control.
“Obligation Currency”: has the meaning set forth in Section 8.13(a).
“Obligations”: all amounts owing to any Administrative Agent or any Lender pursuant to the terms of this Agreement or any other Loan
Document.
“Operating Segment Income”: as of any date of determination, the sum (without duplication) of the consolidated operating income of the
Parent Borrower and its Subsidiaries
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(determined in accordance with IFRS), before depreciation and amortization, corporate expenses and other expense, net.
“Other Connection Taxes”: with respect to any Recipient, Taxes imposed as a result of a present or former connection between such
Recipient and the jurisdiction imposing such Tax (other than connections arising from such Recipient having executed, delivered, become a party to,
performed its obligations under, received payments under, received or perfected a security interest under, or enforced any Loan Document).
“Other Taxes”: all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any
payment made under, from the execution, delivery, performance, enforcement or registration of, or from the receipt or perfection of a security interest
under, any Loan Document.
“Participant Register”: has the meaning set forth in Section 8.05(b).
“Participants”: has the meaning set forth in Section 8.05(b).
“Patriot Act”: has the meaning set forth in Section 8.12.
“Payment Recipient”: has the meaning set forth in Section 7.15(a).
“Person”: an individual, partnership, corporation, limited liability company, business trust, joint stock company, trust, estate, firm,
enterprise, unincorporated association, joint venture, Governmental Authority or other entity of whatever nature.
“Peso Equivalent”: on any date of determination (a) with respect to any amount in Pesos, such amount, and (b) with respect to any
amount in any currency other than Pesos, the equivalent in Pesos of such amount, using the Exchange Rate with respect to such currency at the time in
effect under the provisions of Section 1.05.
“Pesos” and “MXN”: the legal currency of Mexico.
“Pro Forma Basis”: such calculation as will give pro forma effect to any Acquisition and any Asset Sale and the incurrence, assumption
or repayment of any related Indebtedness during the period of calculation, as if such Acquisition or Asset Sale and related incurrence, assumption or
repayment of Indebtedness, as the case may be, had occurred on the first day of such period of calculation. All pro forma determinations required above
shall be determined in accordance with IFRS. For purposes of this definition, whenever pro forma effect is to be given to any occurrence or event, the pro
forma calculation shall be determined in good faith by a responsible financial or accounting officer of the Parent Borrower.
“Process Agent”: has the meaning set forth in Section 8.10(b).
“Promissory Note”: each Revolving Credit Note and Term Note, as the context may require.
“Purchasing Lenders”: has the meaning set forth in Section 8.05(c).
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“Qualified Lender”: any Person that (or, in the case of a Person that acts through a branch or agency, a Person the principal office of
which) (a) is the effective beneficiary of the payments made by the Borrowers hereunder, (b) meets the requirements imposed by the Mexican Income Tax
Law and its transitory provisions (Ley del Impuesto Sobre la Renta y Disposiciones Transitorias) to qualify as a foreign financial institution under article
166-I, paragraph (a), section 2 (or any successor provision) of the Mexican Income Tax Law (Ley del Impuesto Sobre la Renta) and Sections 3.18.18.
and/or 3.18.19. of the Tax Miscellaneous Resolution for 2024 (Resolución Miscelánea Fiscal para 2024) (or any successor provisions), (c) is a resident for
tax purposes of a country with which Mexico has entered into a Mexican Tax Treaty that is in effect, and (d) meets the requirements set forth in such
Mexican Tax Treaty to be deemed a tax resident of the relevant treaty jurisdiction and to apply the rates provided therein for this type of interest.
“Recipient”: the Administrative Agent or any Lender.
“Register”: has the meaning set forth in Section 8.05(d).
“Related Agreements”: has the meaning set forth in Section 2.17(c)(i).
“Required Lenders”: at any time, Lenders having at such time in excess of 50% of the Total Credit Exposures of all Lenders at such time,
calculated in the Peso Equivalent where applicable; provided that the Total Credit Exposure of any Lender that is a Defaulting Lender shall be disregarded
in determining Required Lenders at any time.
“Resolution Authority”: means an EEA Resolution Authority or, with respect to any UK Financial Institution, a UK Resolution Authority.
“Responsible Officer”: the Vice President of Finance, the Vice President and Corporate Controller, and the Legal Vice President and
General Counsel of each Borrower.
“Restricted Person”: (i) the Salinas Group; (ii) the Slim Group; and (iii) any Person which is or is part of an Economic Agent (or any
Affiliate of which is or is part of an Economic Agent) engaged in the media and/or telecommunications and/or cable television business in Mexico,
provided that a Person (a “lender”) shall not be deemed a Restricted Person pursuant to clause (iii) solely due to a lending relationship if the lender is not an
Affiliate of a Restricted Person, including by reason of obtaining Control of a Restricted Person through the lending relationship.
“Revolving Credit Commitment”: with respect to each Revolving Credit Lender, the commitment of such Revolving Credit Lender to
make Revolving Credit Loans, expressed as an amount representing the maximum aggregate amount of such Revolving Credit Lender’s Revolving Credit
Exposure hereunder, as such commitment may be reduced from time to time pursuant to Section 2.05. The initial amount of each Revolving Credit
Lender’s Revolving Credit Commitment is set forth on Schedule 2.01, or in the Assignment and Assumption Agreement pursuant to which such Revolving
Credit Lender shall have assumed its Revolving Credit Commitment, as applicable. The Revolving Credit Commitment shall be expressed in Dollars;
however, all Loans shall be denominated in Pesos.
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“Revolving Credit Exposure”: with respect to any Revolving Credit Lender at any time, the sum of the outstanding principal amount of
each Revolving Credit Loan made by such Revolving Credit Lender at such time, expressed in Dollars, which amount in Dollars for each Loan shall be
determined using the fixed Exchange Rate stated in the applicable Borrowing Request.
“Revolving Credit Lender”: the Persons listed on Schedule 2.01 as “Revolving Credit Lender” and any other Person that shall have
become a Revolving Credit Lender pursuant to an Assignment and Assumption Agreement, other than any such Person that ceases to be a party hereto
pursuant to an Assignment and Assumption Agreement.
“Revolving Credit Loan”: has the meaning set forth in Section 2.01(a).
“Revolving Credit Loan Maturity Period”: has the meaning set forth in Section 2.06(b).
“Revolving Credit Note”: each non-negotiable promissory note (pagaré no negociable) to be issued by the Borrower receiving a
Revolving Credit Loan, as maker (suscriptor), and guaranteed by each other Borrower as guarantor (por aval), pursuant to Section 2.06(f) of this
Agreement payable to any Revolving Credit Lender, and in the form of Exhibit C hereto, evidencing the amount of the relevant Revolving Credit Loan
made by such Revolving Credit Lender.
“Revolving Loan Commitment Fee”: has the meaning set forth in Section 2.08(a).
“Revolving Loan Commitment Period”: the period from and including the Effective Date to (but excluding) the Maturity Date, or such
earlier date on which the Revolving Credit Commitments shall terminate as provided herein.
“Rollover”: the extension of a Revolving Credit Loan pursuant to Section 2.06(b).
“Rollover Date”: has the meaning set forth in Section 2.06(b).
“Rollover Notice”: has the meaning set forth in Section 2.06(b).
“Rollover Period”: has the meaning set forth in Section 2.06(b).
“Salinas Group”: any of the following Persons, as well as any Affiliate, subsidiary, successor or assignee thereof: Ricardo Salinas Pliego
and any Family Member of Ricardo Salinas Pliego, Grupo Elektra, S.A.B. de C.V.; TV Azteca, S.A.B. de C.V.; Biper, S.A. de C.V.; Unefon, S.A. de C.V.;
Banco Azteca, S.A., Institución de Banca Múltiple; Seguros Azteca, S.A. de C.V.; Seguros Azteca Daños, S.A.; Afore Azteca, S.A. de C.V.; Operadora
Unefon, S.A. de C.V.; Total Play Telecomunicaciones, S.A. de C.V.; GS Motors, S.A. de C.V.; GS Distribución, S.A. de C.V.; Círculo de Crédito, S.I.C.;
Punto Casa de Bolsa, S.A. de C.V.; Comercializadora de Motocicletas de Calidad, S.A. de C.V.; Nueva Elektra del Milenio, S.A. de C.V.; Infra Mexicana,
S.A. de C.V.; Operadora de Servicios Comerciales, S.A. de C.V.; Salinas y Rocha, de C.V.; Purpose Financial, Inc, and Advance America Cash Advance
Centers, Inc. For the purpose of this definition, “subsidiary” means any company in which any of the above companies and Persons have, directly
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or indirectly, more than fifty percent (50%) of the voting stock, either directly or indirectly through corporations, associations, trusts or other entity or legal
act or in which it has in any capacity the authority to appoint the majority of the members of the board of directors or equivalent body, or to determine the
operating policies of the company in question or with which it has entered into an operating agreement.
“Sanctions”: all laws and regulations applicable to the Borrowers relating to economic or financial sanctions or trade embargoes imposed,
administered or enforced from time to time by (a) the United States Government (including without limitation, sanctions enforced by the OFAC), the
United Nations Security Council, the European Union or any of its member states, His Majesty’s Treasury of the United Kingdom, Mexico, Japan, the
Hong Kong Monetary Authority, the Swiss Secretariat of Economic Affairs, the Monetary Authority of Singapore, and (b) so long as any bank formed
under the laws of Canada, or a bank with a parent company formed under the laws of Canada is a Lender under this Agreement, those administered,
enacted or enforced by Canada or the respective governmental institutions, agencies and subdivisions of Canada, including the Proceeds of Crime (Money
Laundering) and Terrorist Financing Act.
“Sanctions Violation”: the time at which any of the Borrowers or their Subsidiaries are currently engaged in a dealing or transaction that
would result in such Borrower or any of its Subsidiaries being in violation of any applicable Sanctions.
“Sanctions Violation Repayment Request”: has the meaning set forth in Section 2.07(e).
“Senior Financial Officer”: as to any Person, the chief financial officer, the treasurer or the comptroller of such Person, as applicable.
“Significant Subsidiary”: A Subsidiary of the Parent Borrower that (i) represents, for the most recent concluded fiscal year of the Parent
Borrower, more than ten percent (10%) of the consolidated revenues of the Parent Borrower and its Subsidiaries; or (ii) at the end of such fiscal year, is the
owner of more than ten percent (10%) of the consolidated assets of the Parent Borrower and its Subsidiaries, in accordance with the provisions of the
Parent Borrower’s most recent available consolidated financial statements for such fiscal year.
“Slim Group”: any of the following Persons, as well as any Affiliate, subsidiary, successor or assign thereof: Carlos Slim Helú and any
Family Member of Carlos Slim Helú, America Movil, S.A.B. de C.V.; Teléfonos de México, S.A.B. de C.V.; Telmex Internacional, S.A.B. de C.V.; Grupo
Carso, S.A.B. de C.V.; Inmuebles Carso, S.A. de C.V.; Real Estate Carso, S.A.B. de C.V.; Carso Infraestructura y Construcción, S.A.B. de C.V.; Carso
Global Telecom, S.A.B. de C.V.; Minera Frisco, S.A.B. de C.V.; Grupo Financiero Inbursa, S.A.B. de C.V.; Grupo Sanborns, S.A.B. de C.V.; Condumex,
S.A. de C.V.; Radiomovil Dipsa, S.A. de C.V.; Sercotel, S.A. de C.V.; and Impulsora del Desarrollo y el Empleo en América Latina, S.A.B. de C.V. For the
purpose of this definition, “subsidiary” means any company in which any of the above companies and Persons have, directly or indirectly, more than fifty
percent (50%) of the voting stock, either directly or indirectly through corporations, associations, trusts or other entity or legal act or in which it has in any
capacity the authority to appoint the majority of the members of the
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board of directors or equivalent body, or to determine the operating policies of the company in question or with which it has entered into an operating
agreement.
“Specified Shareholders”: (i) Emilio Fernando Azcárraga Jean; (ii) any of the parents and siblings (including siblings by only one of the
parents) of the person named in clause (i); (iii) the spouse or ex-spouse of any person specified in clauses (i) and (ii); (iv) direct descendants of any person
specified in clauses (i) to (iii) and the spouse or ex-spouse of such descendants; (v) the estate or any guardian, custodian or other legal representative of the
persons specified in clauses (i) to (iv); (vi) any trust organized exclusively for the benefit of the persons names in clauses (i) to (v); and (vii) any Person for
which all shares, ownership interests, securities or instruments that represent its capital stock are the property directly or indirectly of one or more persons
named in clauses (i) to (vi), and their Affiliates as of that date.
“Subsidiary”: as to any Person, any corporation, partnership, limited liability company, trust or other entity of which more than fifty
percent (50%) of shares of stock or other ownership or beneficiary interests of any class or classes having by the terms thereof ordinary voting power to
elect a majority of the directors or other managers of such corporation, partnership, limited liability company or other entity (other than stock or other such
ownership interest having such power only by reason of the happening of a contingency) is at the time owned directly or indirectly through one or more
intermediaries or both by such Person and/or one or more Subsidiaries of such Person.
“Subsidiary Co-Borrowers”: Cablemás and TVI.
“Taxes”: all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees
or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.
“Term Lender”: the Persons listed on Schedule 2.01 as “Term Lender” and any other Person that shall have become a Term Lender
pursuant to an Assignment and Assumption Agreement, other than any such Person that ceases to be a party hereto pursuant to an Assignment and
Assumption Agreement.
“Term Loan”: has the meaning set forth in Section 2.01(b).
“Term Loan Availability Period”: the period from and including the Effective Date to and including the date that is ten (10) Business
Days after the Effective Date.
“Term Loan Commitment”: with respect to each Term Lender, the obligation of such Term Lender to make Term Loans in the aggregate
principal amount set forth under the heading “Term Loan Commitment” opposite to such Lender’s name on Schedule 2.01, or in the Assignment and
Assumption Agreement pursuant to which such Term Lender shall have assumed its Term Loan Commitment.
“Term Loan Exposure”: with respect to any Term Lender at any time, the sum of the outstanding principal amount of each Term Loan
made by such Term Lender at such time, expressed in Pesos.
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“Term Loan Outstandings”: at any time, the sum of, in each case to the extent outstanding at such time, the aggregate principal amount of
the Term Loans.
“Term Note”: each non-negotiable promissory note (pagaré no negociable) to be issued by the Borrower receiving a Term Loan, as
maker (suscriptor), and guaranteed by each other Borrower as guarantor (por aval) pursuant to Section 2.06(f) of this Agreement payable to any Term
Lender, and in the form of Exhibit D hereto, evidencing the amount of the relevant Term Loan made by such Term Lender.
“Test Period”: each period of four (4) consecutive fiscal quarters of the relevant Borrower for which financial statements have been
delivered (in each case taken as one accounting period).
“Threshold Amount”: US$100,000,000 or its equivalent in any other currency (or the Peso Equivalent of such amount) as of the date of
determination.
“TIIE Rate”: For each Interest Period, (a)(i) the Tasa de Interés Interbancaria de Equilibrio for a period of 28 (twenty-eight) days, or
such other period so published as is most nearly equal to the relevant Interest Period, as determined by the Administrative Agent, in each case as published
by the Banco de México in the Official Gazette of the Federation (Diario Oficial de la Federación) on the first day of the relevant Interest Period, or if such
day is not a Business Day, on the immediately preceding Business Day on which there was such a quote, or (ii) if the TIIE Rate as described in clause (a)(i)
ceases to be published or ceases to be available, the TIIE Rate shall be the compounded forward-looking Tasa de Interés Interbancaria de Equilibrio (Tasa
de Interés Interbancaria de Equilibrio en moneda nacional compuesta por adelantado) for a period of 28 (twenty-eight) days, or such other period so
published as is most nearly equal to the relevant Interest Period, as determined by the Administrative Agent, in each case as published by the Banco de
México in the Official Gazette of the Federation (Diario Oficial de la Federación) on the first day of the relevant Interest Period, or if such day is not a
Business Day, on the immediately preceding Business Day on which there was such a quote. (b) If the TIIE Rate is not published pursuant to clause (a), it
shall be substituted by the rate that Banco de México determines to be a substitute for the TIIE Rate. (c) If the TIIE Rate is not published pursuant to clause
(a) or clause (b), it shall be substituted by (i) the net yield rate of 28-day Mexican Federal Treasury Certificates (Certificados de la Tesorería de la
Federación, or CETES) plus the difference between the last-published TIIE Rate and the CETES rate on the same date, (ii) if the rate referred to in clause
(c)(i) is not available, the Term Deposit Rate (Costo de Captación a Plazo, or CCP) for liabilities denominated in Pesos published by Banco de México
plus the difference between the last-published TIIE Rate and the CCP rate on the same date, or (iii) if the rates referred to in clauses (c)(i) and (c)(ii) are not
available, such other rate that Banco de México determines to be a substitute for such rates. The TIIE Rate will be calculated on the basis of a three hundred
sixty (360)-day year for the actual number of days elapsed. If the TIIE Rate as determined pursuant to the foregoing shall be less than zero, such rate shall
be deemed zero for all purposes of the Agreement.
“Total Credit Exposures”: as to any Lender at any time, the sum of (a) the Peso Equivalent of the unused outstanding Revolving Credit
Commitment of such Lender plus (b) the Peso Equivalent of the Revolving Credit Exposure of such Lender plus (c) the unused outstanding
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Term Loan Commitment of such Lender plus (d) the Term Loan Exposure of such Lender, in each case (a), (b), (c) and (d), at such time.
“Transactions”: the transactions contemplated under this Agreement.
“Transfer Effective Date”: with respect to an Assignment and Assumption Agreement, the effective date of such Assignment and
Assumption Agreement.
“UK Financial Institution”: any BRRD Undertaking (as such term is defined under the PRA Rulebook (as amended from time to time)
promulgated by the United Kingdom Prudential Regulation Authority) or any person falling within IFPRU 11.6 of the FCA Handbook (as amended from
time to time) promulgated by the United Kingdom Financial Conduct Authority, which includes certain credit institutions and investment firms, and certain
affiliates of such credit institutions or investment firms.
“UK Resolution Authority”: the Bank of England or any other public administrative authority having responsibility for the resolution of
any UK Financial Institution.
“U.S.”: The United States of America.
“U.S. Tax Code”: the United States Internal Revenue Code of 1986, as amended.
“Write-Down and Conversion Powers”: (a) with respect to any EEA Resolution Authority, the write-down and conversion powers of
such EEA Resolution Authority from time to time under the Bail-In Legislation for the applicable EEA Member Country, which write-down and conversion
powers are described in the EU Bail-In Legislation Schedule, and (b) with respect to the United Kingdom, any powers of the applicable Resolution
Authority under the Bail-In Legislation to cancel, reduce, modify or change the form of a liability of any UK Financial Institution or any contract or
instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to
provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability
or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers.
1.02
Accounting Terms. All accounting terms that are not expressly defined in this Agreement will be interpreted, and all financial information
to be provided under this Agreement, will be prepared, and as applicable, consolidated according to IFRS.
1.03
Interpretation of Defined Terms(a) . (a) The terms defined in this Section 1 will apply in the singular as well as the plural of the aforesaid
terms. When the context requires, any pronoun will include the masculine, feminine or neutral form. Except when expressly established to the contrary, all
references to numbers or letters of the Sections, sections, clauses, subparts or sub-subparts refer to Sections, sections, clauses, subparts or sub-subparts of
this Agreement, and all references to Annexes refer to Annexes attached and incorporated by referenced into this Agreement. The words (i) “here,”
“hereof,” “according to this agreement,” “hereinbelow,” and words of similar meaning refer to this Agreement as a whole and not to any Section, section,
clause, subpart or sub-subpart in particular of the Agreement; (ii) “include,” “includes,” and
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“including” are followed by the phrase “without limitation,” unless expressly stated to the contrary; and (iii) “asset,” “good,” and/or “property” have the
same meaning and effect and refer to each and every one of the assets, goods, and properties, both tangible and intangible, including, cash, Capital Stock,
securities, revenues, accounts and leasing and contractual rights.
(b)
Any reference to (i) any contract, agreement or instrument will be deemed to include the reference to the aforesaid contract, agreement,
or instrument as the same is modified either in full or in part or in any other manner amended from time to time, and (ii) any law or regulation includes
amendments to the same from time to time or any law or regulation that may replace them.
1.04
Calculation of Time Periods. Under this Agreement, for calculation of a time period from a specific date to specific subsequent date, the
word “from” means “from and including” and the words “to” and “until” mean “until but excluding.”
1.05
Foreign Currency Calculations. For purposes of determining hereunder the Peso Equivalent of any amount denominated in Dollars,
unless otherwise specified herein, the Administrative Agent shall determine the Exchange Rate in accordance with the applicable definitions as of the
applicable Exchange Rate Date (or to the extent customary market practice with respect to foreign exchange calculation relating to such currency would
require use of a different calculation date, such other date); provided that, notwithstanding anything to the contrary herein, for purposes of determining
compliance under Section 5.01(i) and 5.01(j) with respect to any amount denominated in any currency other than Dollars, compliance will be determined
by converting any amount denominated in any currency other than Dollars into Dollars using the average of the foreign Exchange Rates quoted on each day
on the so-called Bloomberg screen or similar reporting service reasonably determined by the Administrative Agent, during the most recently ended Test
Period.
1.06
All Amounts Payable in Pesos. Notwithstanding anything to the contrary contained herein, all amounts payable by the Borrowers to the
Administrative Agent or Lenders hereunder, whether prior to or after an Event of Default, shall be payable in Pesos as converted on the date of the
borrowing (except for fees, expenses and indemnities that are incurred in another currency and are due pursuant to Section 8.04(a) or (b)).
SECTION 2. AMOUNT AND TERMS OF CREDIT
2.01
The Commitments.
(a)
Revolving Credit Commitments. Subject to and upon the terms and conditions set forth herein, each Revolving Credit Lender severally
agrees, at any time and from time to time during the Revolving Loan Commitment Period, to make a revolving loan or revolving loans in Pesos to the
Borrowers (each, a “Revolving Credit Loan” and, collectively, the “Revolving Credit Loans”) in an aggregate principal amount that will not result in any of
the following:
(i)
such Revolving Credit Lender’s Revolving Credit Exposure exceeding such Revolving Credit Lender’s Revolving Credit
Commitment; and
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(ii)
the Aggregate Revolving Credit Exposure exceeding the Aggregate Revolving Credit Commitments;
Within the foregoing limits and subject to the terms and conditions set forth herein, each Borrower may borrow, prepay and reborrow the
Revolving Credit Loans borrowed under this Section 2.01(a).
(b)
Term Loan Commitment. Subject to and upon the terms and conditions set forth herein, each Term Lender severally agrees, at any time
during the Term Loan Availability Period, to make a single term loan in Pesos to the Borrowers (each, a “Term Loan” and, collectively, the “Term Loans”)
in an aggregate principal amount not to exceed such Term Lender’s Term Loan Commitment. Amounts borrowed under this Section 2.01(b) and
subsequently repaid or prepaid may not be re-borrowed.
2.02
Loans and Borrowings. Each Loan shall be made as part of a Borrowing consisting of Loans made by the Lenders ratably in accordance
with their respective Commitments. Each Borrowing of Revolving Credit Loans shall be in an aggregate amount that is an integral multiple of the
Borrowing Multiple and not less than the Borrowing Minimum, provided that a Borrowing of Revolving Credit Loan may be in an aggregate amount that is
equal to the entire unused balance of the Revolving Credit Commitments. More than one Borrowing may occur on the same date and be outstanding at the
same time. To request a Borrowing, the applicable Borrower requesting the Borrowing shall notify the Administrative Agent of such request (which request
shall be in writing unless otherwise agreed to by the Administrative Agent) no later than 11:00 a.m., Mexico City time, at least two (2) Business Days
before the date of the proposed Borrowing. Each such Borrowing Request shall be irrevocable and by means of a written Borrowing Request delivered to
the Administrative Agent in the form of Exhibit B or any other form approved by the Administrative Agent, and signed by the Borrower requesting the
proposed Borrowing. Each such Borrowing Request shall specify the following information:
(i)
if the Borrowing shall be of a Revolving Credit Loan or a Term Loan;
(ii)
the aggregate amount of the requested Borrowing (expressed in Dollars but funded in Pesos in the case of a Revolving Credit
Loan and in Pesos in the case of a Term Loan) and the Borrower requesting the requested Borrowing;
(iii)
the date of such Borrowing, which shall be a Business Day;
(iv)
the location and number of the Borrower’s account to which funds are to be disbursed; and
(v)
if a Revolving Credit Loan, the Exchange Rate as of the applicable Exchange Rate Date.
Promptly following receipt of a Borrowing Request in accordance with this Section 2.02, the Administrative Agent shall notify each applicable Lender of
the details thereof and of the amount of such Lender’s Loan to be made as part of the requested Borrowing.
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2.03
Funding of Borrowings.
(a)
Subject to and upon the terms and conditions set forth herein, each Revolving Credit Lender shall make each Revolving Credit Loan, and
each Term Lender shall make the Term Loan, as applicable, to be made by it hereunder on the proposed date thereof by wire transfer of immediately
available funds denominated in Pesos by 13:00 p.m., Mexico City time, to the account of the Administrative Agent most recently designated by it for such
purpose by notice to the Lenders. The Administrative Agent will make such Loans available to the applicable Borrower by promptly crediting the amounts
so received, in like funds, to an account of such Borrower maintained with the Administrative Agent in such location determined by the Administrative
Agent.
(b)
Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Borrowing that such Lender
will not make available to the Administrative Agent such Lender’s share of such Borrowing, the Administrative Agent may assume that such Lender has
made such share available on such date in accordance with clause (a) of this Section 2.03 and may, in reliance upon such assumption, make available to the
applicable Borrower a corresponding amount. In such event, if a Lender has not in fact made its share of the applicable Borrowing available to the
Administrative Agent, then the applicable Lender and the Borrowers severally agree to pay to the Administrative Agent forthwith on demand such
corresponding amount with interest thereon, for each day from and including the date such amount is made available to any Borrower to but excluding the
date of payment to the Administrative Agent, at a rate determined in a customary manner in good faith by the Administrative Agent representing the cost to
the Administrative Agent of funding such Borrowing. If such Lender pays such amount to the Administrative Agent, then such amount shall constitute such
Lender’s Loan included in such Borrowing. Any payment by any Borrower shall be without prejudice to any claim such Borrower may have against a
Lender that shall have failed to make such payment to the Administrative Agent.
2.04
Interest. (a) The Borrowers hereby agree to pay interest in respect of the unpaid principal amount of each Loan made to any of the
Borrowers from the date of the Borrowing thereof until the maturity thereof (whether by acceleration or otherwise) at a rate per annum which shall, during
each Interest Period applicable thereto, be equal to the sum of the TIIE Rate as in effect from time to time plus the relevant Applicable Margin for such
Interest Period. All interest hereunder shall be computed on the basis of actual days elapsed and a year of 360 days.
(b)
Overdue principal and, to the extent permitted by law, overdue interest in respect of each Loan and any other overdue amount payable
hereunder shall, in each case, bear interest at a rate equal to two (2) percentage points per annum in excess of the TIIE Rate plus the relevant Applicable
Margin.
(c)
Accrued and unpaid interest shall be payable (i) in respect of each Loan, on the last day of each Interest Period applicable thereto and
(ii) in respect of overdue interest on any Loan, on demand.
(d)
On each Interest Determination Date, the Administrative Agent shall determine the TIIE Rate for the applicable Interest Period and shall
promptly notify the Borrower Representative
22
and the applicable Lenders thereof. Each such determination pursuant to this Section 2.04(d) shall, absent manifest error, be final and conclusive and
binding on all parties hereto.
(e)
The interest period (each, an “Interest Period”) applicable to any Loan shall be, (i) in the case of the initial Interest Period applicable
thereto, the period beginning on (and including) the date of the Borrowing of such Loan and ending on (but excluding, for purposes of calculating interest)
the numerically corresponding day that is one month thereafter, and (ii) in the case of each subsequent Interest Period for such Borrowing, the period
beginning on (and including) the last day of the immediately preceding Interest Period applicable to such Borrowing and ending on (but excluding, for
purposes of calculating interest) the numerically corresponding day that is one month thereafter; provided that:
(i)
if any Interest Period for a Loan would otherwise expire on a day which is not a Business Day, such Interest Period shall expire
on the next succeeding Business Day; provided, however, that if any Interest Period for a Loan would otherwise expire on a day which is not a
Business Day but is a day of the month after which no further Business Day occurs in such month, such Interest Period shall expire on the
immediately preceding Business Day; and
(ii)
any such period that would otherwise extend beyond the Maturity Date shall end on the Maturity Date.
2.05
Termination and Reduction of Commitments.
(a)
Unless previously terminated (i) the Revolving Credit Commitments shall terminate on the last day of the Revolving Loan Commitment
Period and (ii) the Term Loan Commitment shall terminate on the earlier of (a) the last day of the Term Loan Availability Period and (b) after the date of the
Borrowing of the Term Loan.
(b)
The Borrowers may at any time terminate, or from time to time reduce, the Revolving Credit Commitments; provided that (i) each
reduction of the Revolving Credit Commitments shall be in an amount that is an integral multiple of US$1,000,000 and not less than US$5,000,000 and
(ii) the Borrowers shall not terminate or reduce the Revolving Credit Commitments if, after giving effect to any concurrent prepayment of the Loans in
accordance with Section 2.07, any circumstance set forth in clauses (i) through (ii) of Section 2.01(a) would occur. Any reduction of the Revolving Credit
Commitments shall be applied to the Revolving Credit Commitment of each Revolving Credit Lender according to its Applicable Percentage (on a pro-rata
basis).
(c)
The Borrower Representative shall notify the Administrative Agent of any election to terminate or reduce the Revolving Credit
Commitments under clause (b) of this Section 2.05 at least three (3) Business Days prior to the effective date of such termination or reduction, specifying
such election and the effective date thereof. Promptly following receipt of any notice, the Administrative Agent shall advise the Revolving Credit Lenders
of the contents thereof. Each notice delivered by the Borrower Representative pursuant to this Section 2.05 shall be irrevocable; provided that a notice of
termination of the Revolving Credit Commitments delivered by the Borrower Representative may state that such notice is conditioned upon the
effectiveness of other
23
credit facilities, an Asset Sale, a Change of Control, or another corporate transaction, in which case such notice may be revoked by the Borrower
Representative (by notice to the Administrative Agent on or prior to the specified effective date) if such condition is not satisfied. Any termination or
reduction of the Revolving Credit Commitments shall be permanent. Each reduction of the Revolving Credit Commitments under this Section 2.05 shall be
made ratably among the Revolving Credit Lenders in accordance with their respective Revolving Credit Commitments.
2.06
Repayment of Loans; Rollovers; Evidence of Debt. (a) The Borrowers hereby unconditionally promise to pay to the Administrative Agent
for the account of each Lender the then-unpaid principal amount of each Loan on the Maturity Date.
(b)
In the case of Revolving Credit Loans, each Borrower shall repay each Revolving Credit Loan on the date that is the earlier of (i) one
hundred eighty (180) calendar days after the making of such Revolving Credit Loan or after the Rollover Period of such Revolving Credit Loan, as
applicable (the “Revolving Credit Loan Maturity Period”) and (ii) the Maturity Date; provided that each Revolving Credit Loan Maturity Period must end
on the same day as the end of the relevant Interest Period.
Upon notice provided to the Administrative Agent no later than 4:00 p.m., New York City time at least three (3) Business Days before the
day of expiration of any Revolving Credit Loan Maturity Period (“Rollover Notice”), each Borrower shall have the option to extend any Revolving Credit
Loan Maturity Period of a Revolving Credit Loan or any portion of a Revolving Credit Loan (including any Revolving Credit Loan that has previously
been subject to a Rollover) to the date that is up to one hundred eighty (180) calendar days following the Revolving Credit Loan Maturity Period of such
Revolving Credit Loan (each such one hundred eighty (180) calendar days period, a “Rollover Period”, and the first day of such Rollover Period, the
“Rollover Date”) or repay any un-extended portion of such Revolving Credit Loan; provided that (i) notwithstanding anything to the contrary herein, the
Revolving Credit Loan Maturity Period shall be deemed automatically extended if the relevant Borrower has not provided a Rollover Notice or notice to
the Administrative Agent declining the Rollover by 4:00 p.m., New York City time, at least two (2) Business Days prior to the day of such Revolving Credit
Loan Maturity Period, (ii) no Rollover Period shall continue beyond the Maturity Date, (iii) by expressly or tacitly requesting a Rollover, each of the
Borrowers, jointly and severally, represents and warrants that all representations and warranties set out in Section 4 shall be true and correct in all material
respects or if (x) qualified by materiality or Material Adverse Effect or (y) relate to Anti-Money Laundering Laws, Anti-Corruption Laws or Sanctions, in
all respects as of the date of the Rollover Date, (iv) no Default or Event of Default shall have occurred and be continuing as of the Rollover Date, and (v)
each Borrower shall make any interest payment then due and payable on the date that is no later than the last Business Day of the relevant Rollover Period.
For the avoidance of doubt, an extension of the Revolving Credit Loan Maturity Period on a Rollover Date shall not be deemed a “Borrowing” and shall
not require any Borrower to deliver any additional Revolving Credit Note. Promptly upon receipt of any express or tacit Rollover Notice, the
Administrative Agent shall provide notice thereof to the Lenders.
(c)
Each Lender shall maintain in accordance with its usual practice an account or accounts evidencing the indebtedness of each Borrower to
such Lender resulting from each Loan
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made by such Lender, including the amounts of principal and interest payable and paid to such Lender from time to time hereunder.
(d)
The Administrative Agent shall maintain accounts in which it shall record (i) the amount of each Loan made hereunder, and the Interest
Period applicable thereto, (ii) the amount of any principal or interest due and payable or to become due and payable from each Borrower to each Lender
hereunder and (iii) any amount received by the Administrative Agent hereunder for the account of the Lenders and each Lender’s share thereof.
(e)
The entries made in the accounts maintained pursuant to clause (c) or (d) of this Section 2.06 shall be prima facie evidence of the
existence and amounts of the Obligations recorded therein; provided that the failure of any Lender or the Administrative Agent to maintain such accounts or
any error therein shall not in any manner affect the obligation of the Borrowers to repay the Loans in accordance with the terms of this Agreement;
provided further that in the event of any conflict between any Lender’s internal records and the Register maintained pursuant to Section 8.05(d), the
Register shall govern in the absence of manifest error.
(f)
On the date of each Borrowing, the Borrower receiving a Loan, as maker (suscriptor), and each other Borrower as guarantor (por aval),
will execute and deliver to the Administrative Agent for the account of each applicable Lender a Promissory Note, payable to each applicable Lender and in
a principal amount equal to the relevant Borrowing. Each such Promissory Note shall qualify as a pagaré under Mexican law, and shall include the clause
“no negociable.” After the effectiveness of an assignment made under this Agreement, within five (5) Business Days of the effectiveness of such
assignment, the applicable Borrower shall execute and deliver to the applicable assignee, in exchange for the Promissory Notes evidencing the Loans so
assigned theretofore delivered to the assigning Lender pursuant to this Section 2.06, new Promissory Notes payable to such assignee, dated the applicable
dates of the relevant Borrowings, provided that each Promissory Note shall be in a principal amount equal to the principal amount of each Loan so assigned
and otherwise duly completed. In the case of an assignment whereby the assigning Lender retains a portion of its Loans, the applicable Borrower shall also
promptly (but in any event within five (5) Business Days of the effectiveness of such assignment) execute and deliver to such assigning Lender, in
exchange for the Promissory Notes evidencing the Loans remaining after the effectiveness of such assignment theretofore delivered to the assigning Lender
pursuant to this Section 2.06(f) to the extent such Promissory Notes were not previously returned to such Borrower, new Promissory Notes payable to such
assigning Lender, dated the applicable dates of the relevant Borrowings, provided that each Promissory Note shall be in a principal amount equal to the
principal amount of each of such assigning Lender’s Loans remaining after the effectiveness of such assignment. Any and all costs and expenses that arise
from this exchange of Promissory Notes shall be borne by the assignee or the assigning Lender. In the event of a conflict between the terms of this
Agreement and any Promissory Note, the terms of this Agreement shall prevail. To the extent necessary to properly reflect the terms of this Agreement,
promptly at the Administrative Agent’s request (but in any event within five (5) Business Days of such request), the applicable Borrower shall execute and
deliver to a Lender or Lenders a new Promissory Note in exchange for and upon return to the applicable Borrower of the Promissory Note or Promissory
Notes held by such Lender. In the case of a prepayment in full of any outstanding Loan to a Lender, promptly at the applicable Borrower’s request, and
upon confirmation of the corresponding prepayment by the Administrative Agent (but in any event
25
within five (5) Business Days of such confirmation), such Lender shall return the Promissory Note evidencing such Loan to such Borrower. In the case of a
prepayment in part of any outstanding Loan to a Lender and upon receipt by such Lender of a new Promissory Note dated the applicable date of the
relevant Borrowing evidencing the remaining outstanding portion of such Loan, promptly at applicable Borrower’s request, and upon confirmation of the
corresponding prepayment by the Administrative Agent (but in any event within five (5) Business Days of such confirmation), such Lender shall return the
Promissory Note evidencing such Loan to such Borrower. The mutilation, loss, theft or destruction of a Promissory Note shall not imply or be deemed to
constitute a cancellation of debt or of any other obligation under or in respect of this Agreement or any Loan, even if any such event has occurred due to
acts attributable to any of the Lenders or the Administrative Agent. If a Promissory Note is mutilated, the Borrowers, at the cost of the relevant Lender,
shall issue and deliver a new Promissory Note of the same principal amount and maturity as the mutilated Promissory Note, provided that such mutilated
Note shall be returned to the relevant Borrower in exchange for the new Promissory Note. If a Promissory Note is lost, stolen or destroyed, the Borrowers
shall, at the cost of the applicable Lender, promptly upon the written request of the Administrative Agent, issue and deliver to the applicable Lender a new
Promissory Note of the same principal amount and maturity as the lost, stolen or destroyed Promissory Note in exchange for a lost note affidavit, without
requiring any further action from such Lender that may be applicable according to the applicable law.
2.07
Prepayment of Loans. (a) Each of the Borrowers shall have the right at any time and from time to time to prepay any Borrowing in
whole or in part, subject to prior notice in accordance with clause (b) of this Section 2.07.
(b)
The Borrower Representative shall notify the Administrative Agent (which notice shall be in writing unless otherwise agreed to by the
Administrative Agent) in the case of any prepayment of a Loan hereunder not later than 2:00 p.m. Mexico City time, at least three (3) Business Days before
the date of prepayment. Each such notice shall be irrevocable and shall specify the prepayment date, whether the Borrowing to be prepaid is a Revolving
Credit Loan or a Term Loan, and the principal amount of each Borrowing or portion thereof to be prepaid; provided that, a notice of prepayment delivered
by the Borrower Representative may state that such notice is conditioned upon the effectiveness of other credit facilities, an Asset Sale, a Change of
Control, or another corporate transaction, in which case such notice may be revoked by the Borrower Representative (by notice to the Administrative Agent
on or prior to the specified effective date) if such condition is not satisfied or if a notice of prepayment is given in connection with a conditional notice of
termination of the Revolving Credit Commitments as contemplated by Section 2.05, then such notice of prepayment may be revoked if such notice of
termination is revoked in accordance with Section 2.05. Promptly following receipt of any such notice relating to a Loan, the Administrative Agent shall
advise the applicable Lenders of the contents thereof. Each prepayment of a Borrowing shall be applied ratably to the Loans included in the prepaid
Borrowing. Prepayments shall be accompanied by accrued interest to the extent required by Section 2.05. The proceeds of any prepaid amount shall be
applied first, towards payment of interest and fees then due from the Borrowers with respect to the Borrowing to be prepaid, ratably among the parties
entitled thereto in accordance with the amounts of interest and fees then due to such parties, and second, towards principal. Each partial prepayment of the
Revolving Credit Loans shall be in an amount that is an integral multiple of the applicable Borrowing Multiple or, if the Aggregate Revolving Credit
Exposure is less than the Borrowing Multiple as of the time of
26
such prepayment, the Aggregate Revolving Credit Exposure. Each partial prepayment of the Term Loan shall be in an amount that is an integral multiple of
MXN$10,000,000 and not less than MXN$50,000,000, or if less, the outstanding amount of the Term Loan. The Borrower making a partial prepayment
shall determine, in its sole discretion, the tranche of the Loan to which the prepayment shall be applied, but in any case, such prepayment shall be applied
on a pro rata basis among the Lenders of the relevant tranche.
(c)
In the event and on such occasion that the Aggregate Revolving Credit Exposure exceeds the Aggregate Revolving Credit Commitments,
the Borrowers shall prepay immediately any Aggregate Revolving Credit Exposure owing by any Borrower in an aggregate amount equal to the amount by
which such Aggregate Revolving Credit Exposure exceeds the Aggregate Revolving Credit Commitments.
(d)
The Borrower Representative shall notify the Administrative Agent and the Lenders of the occurrence of a Change of Control, promptly
upon a Responsible Officer obtaining knowledge thereof. Within ninety (90) days of (x) such notification of a Change of Control or (y) the Administrative
Agent notifying the Borrower Representative and each Lender of a Change of Control, each Lender may notify the Borrower Representative that it requires
its Loans to be repaid and its Commitment terminated (such notice a “Change of Control Repayment Request”). The Borrowers shall then have thirty (30)
days to either (x) obtain a replacement Lender for such Lender pursuant to Section 2.13(b) or (y) repay such Lender’s Loans, whereupon the Commitment
will be reduced by the amount of such Lender’s Commitment. If, within the date that is ninety (90) days after the earlier of (x) the Administrative Agent
and the Lenders having been notified by the Borrower Representative of the occurrence of a Change of Control, and (y) such Change of Control having
been publicly disclosed, the Lenders have not taken action pursuant to this Section 2.07(d), the parties agree that such Change of Control will be authorized
by the Administrative Agent and the Lenders.
(e)
The Borrower Representative shall notify the Administrative Agent and the Lenders of the occurrence of a Sanctions Violation, promptly
upon a Responsible Officer obtaining knowledge thereof. Within ninety (90) days of (x) such notification of a Sanctions Violation or (y) the Administrative
Agent notifying the Borrower Representative and each Lender of a Sanctions Violation, if the transaction or dealing causing such Sanctions Violation is
continuing, each Lender may notify the Borrower Representative that it requires its Loans to be repaid and its Commitment terminated (such notice a
“Sanctions Violation Repayment Request”). The Borrowers shall then have ninety (90) days to either (x) terminate the transaction causing such Sanctions
Violation, (y) obtain a replacement Lender for such Lender pursuant to Section 2.13(b) or (z) repay such Lender’s Loans, whereupon the Commitment will
be reduced by the amount of such Lender’s Commitment. After ninety (90) days have passed following a Sanctions Violation for which no notice of
repayment has been delivered by the Lenders, if the Lenders have not taken action pursuant to this Section 2.07(e), the parties agree that the Sanctions
Violation will no longer give the right to the Lenders to provide such notice and such Sanctions Violation shall be deemed waived.
The ninety (90) day periods in the second, third and fourth sentences of the preceding paragraph each shall not apply to a demand for
repayment and/or termination of the Commitment of any Lender if (i) any Loan is used to finance or facilitate a dealing or transaction
27
that results in a Sanctions Violation and (ii) OFAC or any Governmental Authority duly requires such Lender (or all Lenders) to terminate its Commitments
hereunder and/or require repayment of its Loans hereunder.
2.08
Fees. (a) The Borrowers shall pay to the Administrative Agent for the account of each Revolving Credit Lender in accordance with its
respective Revolving Credit Commitment, a fee in Pesos (the “Revolving Loan Commitment Fee”) equal to 35% of the Applicable Margin per annum on
the date of determination times the actual daily amount by which the Aggregate Revolving Credit Commitments exceeds the Aggregate Revolving Credit
Exposure. The Revolving Loan Commitment Fee shall accrue at all times until the Maturity Date, and shall be due and payable quarterly in arrears, starting
on the date that is three (3) months after the Effective Date, and on the Maturity Date.
(b)
The Borrowers agree to pay to the Administrative Agent fees payable in the amounts and at the times separately agreed upon by them.
(c)
All additional interest and fees payable hereunder shall be paid on the dates due, in immediately available funds in Pesos, to the
Administrative Agent for distribution, when applicable, to the Lenders.
2.09
Increased Costs. (a) If any Change in Law shall:
(i)
impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement
against assets of, deposits with or for the account of, or credit extended or participated in by, any Lender;
(ii)
subject any Recipient to any Taxes (other than (A) Indemnified Taxes, (B) Taxes described in clauses (b) through (d) of the
definition of “Excluded Taxes” and (C) Connection Income Taxes) on its loans, loan principal, commitments, or other obligations, or its deposits,
reserves, other liabilities or capital attributable thereto; or
(iii)
impose on any Lender any other condition, cost or expense (other than Taxes) affecting this Agreement or Loans made by such
Lender.
and the result of any of the foregoing shall be to increase the cost to such Lender or such other Recipient of making, converting to, continuing or
maintaining any Loan (or of maintaining its obligation to make, continue, convert or maintain any such Loan), or to reduce the amount of any sum received
or receivable by such Lender or other Recipient hereunder (whether of principal, interest or any other amount), then, upon request of such Lender (a
“Change in Law Repayment Request”) or other Recipient, the Borrowers will pay to such Lender or such other Recipient, as the case may be, such
additional amount or amounts as will compensate such Lender or such other Recipient, as the case may be, for such additional costs incurred or reduction
suffered.
(b)
If any Lender determines that any Change in Law affecting such Lender or any lending office of such Lender’s holding company, if any,
regarding capital or liquidity requirements, has or would have the effect of reducing the rate of return on such Lender’s capital or on the capital of such
Commitments of such Lenders or the Loans made by such Lender, to a
28
level below that which such Lender or such Lender’s holding company could have achieved but for such Change in Law (taking into consideration such
Lender’s policies and the policies of such Lender’s holding company with respect to capital adequacy), then from time to time the Borrowers will pay to
such Lender such additional amount or amounts as will compensate such Lender or such Lender’s holding company for any such reduction suffered.
(c)
A certificate of a Lender (with a copy to the Administrative Agent) setting forth in reasonable detail the amount or amounts necessary to
compensate such Lender or its holding company, as the case may be, as specified in clause (a) or (b) of this Section 2.09, subject to any reduction required
by clause (d) of this Section 2.09, and delivered to the Borrower Representative, shall be conclusive absent manifest error. The Borrowers shall pay such
Lender, as the case may be, the amount shown as due on any such certificate within ten (10) days after receipt thereof.
(d)
Failure or delay on the part of any Lender or Recipient to demand compensation pursuant to this Section 2.09 shall not constitute a
waiver of such Lender’s or such Recipient’s right to demand such compensation; provided that the Borrowers shall not be required to compensate a Lender
or Recipient pursuant to this Section 2.09 for any increased costs or reductions suffered more than six (6) months prior to the date that such Lender or
Recipient notifies the Borrower Representative of the Change in Law giving rise to such increased costs or reductions and of such Lender’s intention to
claim compensation therefor; provided further that the Borrowers shall not be required to compensate any Lender or other Recipient pursuant to this
Section 2.09 for any increased costs or reductions unless the applicable Lender or Recipient requires such compensation from borrowers at the same rate
without any waivers by the applicable Lender or Recipient that (i) are similarly situated to the Borrowers under syndicated credit facilities that have an
increased cost or reduction for the respective Lender or Recipient and (ii) have credit ratings substantially similar to the Borrowers at the time of
imposition. The Borrowers will not be required to compensate any such Lender or Recipient pursuant to this Section 2.09 for increased costs or reductions
if such Lender or Recipient waives or does not require compensation from any borrower with a credit rating substantially similar to the Borrowers. If such
Lender or Recipient waives or does not require such compensation for increased costs or reductions for any borrower with a credit rating substantially
similar to the Borrowers, such Lender shall waive such compensation with respect to the Borrowers.
2.10
Break Funding Payments. In the event of (a) the payment of any principal of any Loan other than on the last day of an Interest Period,
(b) the failure to borrow or prepay any Loan on the date specified in any notice delivered pursuant hereto (regardless of whether such notice may be
revoked under Section 2.07(b) and is revoked in accordance therewith), or (c) the assignment of any Loan other than on the last day of the Interest Period
applicable thereto as a result of a request by any of the Borrowers pursuant to Section 2.13, then, in any such event, the Borrowers shall compensate each
Lender for the loss, cost and expense attributable to such event. In the case of a Loan, such loss, cost or expense to any Lender shall be deemed to include
only an amount determined by such Lender to be the excess, if any, of (i) the amount of interest which would have accrued on the principal amount of such
Loan had such event not occurred, for the period from the date of such event to the last day of the then current Interest Period therefor (or, in the case of a
failure to borrow, for the Interest Period for such Loan), over (ii) the amount of interest which would accrue on such principal amount for such period at the
interest rate which such Lender would bid were it to bid, at the commencement of such period, for deposits of the
29
applicable currency of a comparable amount and period from other banks in the principal market for such deposits. A certificate of any Lender setting forth
any amount or amounts that such Lender is entitled to receive pursuant to this Section 2.10 shall be delivered to the Borrower Representative and shall be
conclusive absent manifest error. The Borrowers shall pay such Lender the amount shown as due on any such certificate within ten (10) Business Days
after receipt thereof.
2.11
Taxes.
(a)
Payments Free of Taxes. Any and all payments by or on account of any Obligation of the Borrowers under any Loan Document shall be
made without deduction or withholding for any Taxes, except as required by applicable law. If any applicable law (as determined in the good faith
discretion of the applicable Borrower) requires the deduction or withholding of any Tax from any such payment by any of the Borrowers, then the
applicable Borrower shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant
Governmental Authority in accordance with applicable law and, if such Tax is an Indemnified Tax, then the sum payable by the applicable Borrower shall
be increased as necessary so that after such deduction or withholding has been made (including such deductions and withholdings applicable to additional
sums payable under this Section 2.11) the applicable Recipient receives an amount equal to the sum it would have received had no such deduction or
withholding in respect of Indemnified Taxes been made.
(b)
Payment of Other Taxes by the Borrowers. Each Borrower shall timely pay to the relevant Governmental Authority in accordance with
applicable law, or at the option of the Administrative Agent timely reimburse it for the payment of, any Other Taxes.
(c)
Indemnification by Borrowers. The Borrowers shall indemnify each Recipient, within thirty (30) days after demand therefor, for the full
amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section 2.11) payable
or paid by such Recipient or required to be withheld or deducted from a payment to such Recipient and any reasonable expenses arising therefrom or with
respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate
as to the amount of such payment or liability delivered to the Borrower Representative by a Lender (with a copy to the Administrative Agent), or by the
Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.
(d)
Indemnification by the Lenders. Each Lender shall severally indemnify the Administrative Agent, within ten (10) days after demand
therefor, for (i) any Indemnified Taxes attributable to such Lender (but only to the extent that the Borrowers have not already indemnified the
Administrative Agent for such Indemnified Taxes and without limiting the obligation of the Borrowers to do so), (ii) any Taxes attributable to such
Lender’s failure to comply with the provisions of Section 8.05(b) relating to the maintenance of a Participant Register and (iii) any Excluded Taxes
attributable to such Lender, in each case, that are payable or paid by the Administrative Agent in connection with any Loan Document, and any reasonable
expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental
Authority. A certificate as to the amount of such payment or liability delivered to any Lender by the Administrative Agent shall be conclusive
30
absent manifest error. Each Lender hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender
under any Loan Document or otherwise payable by the Administrative Agent to such Lender from any other source against any amount due to the
Administrative Agent under this clause (d).
(e)
Evidence of Payments. As soon as practicable after any payment of Taxes by the Borrowers to a Governmental Authority pursuant to this
Section 2.11, but in any case no later than thirty (30) days after making such payment, the Borrower Representative shall deliver to the Administrative
Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such
payment or other evidence of such payment reasonably satisfactory to the Administrative Agent. Each Lender incorporated under the laws of Mexico shall
issue either an invoice or an account statement for any interest payments made by the Borrowers, which shall comply with all requirements under Mexican
law (which includes the Mexican Income Tax Law (Ley del Impuesto sobre la Renta), the Mexican Fiscal Code (Código Fiscal de la Federación) and the
corresponding Tax Miscellaneous Resolution (Resolución Miscelánea Fiscal)).
(f)
Status of Lenders.
(i)
Any Lender (that is not an Export Credit Agency or a Mexican Financial Institution) that is entitled to an exemption from or
reduction of withholding Tax with respect to payments made under any Loan Document shall deliver to the Borrower Representative and the
Administrative Agent, at the time or times reasonably requested by the Borrower Representative or the Administrative Agent, such properly
completed and executed documentation reasonably requested by the Borrower Representative or the Administrative Agent as will permit such
payments to be made without withholding or at a reduced rate of withholding, including the information set forth in rule 3.18.18. and 3.18.19. of
the Tax Miscellaneous Resolution for 2024 (Resolución Miscelánea Fiscal para 2024), or any successor provisions (or additional provision and
regulation which states specific documentation or information for the Lender including the tax residence certificate thereunder). In addition, any
Lender, if reasonably requested by the Borrower Representative or the Administrative Agent, shall deliver such other documentation prescribed by
applicable law or reasonably requested by the Borrower Representative or the Administrative Agent as will enable the Borrower Representative or
the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements or to
enable any of the Borrowers to comply with its own information reporting requirements, in accordance with applicable law. Notwithstanding
anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than the
documentation and certifications required by rule 3.18.18. and 3.18.19. of the Tax Miscellaneous Resolution for 2024 (Resolución Miscelánea
Fiscal para 2024), or any successor provisions) shall not be required if in the Lender’s reasonable judgment such completion, execution or
submission would prejudice the legal or commercial position of such Lender. Notwithstanding the foregoing, it is understood and agreed that
nothing in this section 2.11(f) shall interfere with the rights of any Lender to conduct its fiscal or tax affairs in such manner as it deems fit. Each
Lender shall use reasonable efforts to minimize to the
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extent possible any applicable Taxes with respect to any payments under the Loan Documents; and
(ii)
Without limiting the generality of the foregoing, if a payment made to a Lender under any Loan Document would be subject to
U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA
(including those contained in Section 1471(b) or 1472(b) of the U.S. Tax Code, as applicable), such Lender shall deliver to the Borrower
Representative at the time or times prescribed by law and at such time or times reasonably requested by the Borrower Representative such
documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the U.S. Tax Code) and such additional
documentation reasonably requested by the Borrower Representative as may be necessary for any of the Borrowers to comply with their
obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the
amount, if any, to deduct and withhold from such payment. Solely for purposes of this clause (ii), “FATCA” shall include any amendments made
to FATCA after the date of this Agreement.
Each Lender agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it
shall update such form or certification or promptly notify the Borrower Representative and the Administrative Agent in writing of its legal
inability to do so.
The Borrowers recognize and accept that the Lenders incorporated under the laws of Mexico or any of their Affiliates shall not have any
responsibility regarding tax related advice that has been provided by third parties or regarding the decisions adopted by the Borrowers for any
other reason.
(g)
Treatment of Certain Refunds. If any party determines, in its sole discretion exercised in good faith, that it has received a refund of any
Taxes as to which it has been indemnified pursuant to this Section 2.11 (including by the payment of additional amounts pursuant to this Section 2.11), it
shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this Section 2.11 with respect
to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of such indemnified party and without interest (other than any
interest paid by the relevant Governmental Authority with respect to such refund). Such indemnifying party, upon the request of such indemnified party,
shall repay to such indemnified party the amount paid over pursuant to this clause (g) (plus any penalties, interest or other charges imposed by the relevant
Governmental Authority) in the event that such indemnified party is required to repay such refund to such Governmental Authority. Notwithstanding
anything to the contrary in this clause (g), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this
clause (g) the payment of which would place the indemnified party in a less favorable net after-Tax position than the indemnified party would have been in
if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification
payments or additional amounts with respect to such Tax had never been paid. This paragraph shall not be construed to require any indemnified party to
make available its Tax
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returns (or any other information relating to its Taxes that it deems confidential) to the indemnifying party or any other Person.
(h)
Survival. Each party’s obligations under this Section 2.11 shall survive the resignation or replacement of the Administrative Agent or any
assignment of rights by, or the replacement of, a Lender, the termination of the Commitments and the repayment, satisfaction or discharge of all
Obligations under any Loan Document.
2.12
Payments Generally; Pro Rata Treatment; Sharing of Set-offs. (a) Unless otherwise specified, the Borrowers shall make each payment
required to be made by them hereunder (whether of principal, interest, fees, or amounts payable under Sections 2.09, 2.10 or 2.11, or otherwise) prior to
1:00 p.m., Mexico City time, on the date when due, in immediately available funds, without condition or deduction for any set-off defense, recoupment or
counterclaim. Any amounts received after such time on any date may, in the discretion of the Administrative Agent, be deemed to have been received on the
next succeeding Business Day for purposes of calculating interest thereon. All such payments shall be made to the Administrative Agent (i) at the
Administrative Agent’s Account or (ii) upon at least fifteen Business Days prior written notice to the Administrative Agent, at the Administrative Agent’s
Office, except that payments pursuant to Sections 2.09, 2.10, 2.11 or 8.04 shall be made directly to the Persons entitled thereto. The Administrative Agent
shall distribute any such payments received by it for the account of any other Person to the appropriate recipient promptly following receipt thereof. If any
payment hereunder shall be due on a day that is not a Business Day, the date for payment shall be extended to the next succeeding Business Day, and, in the
case of any payment accruing interest, interest thereon shall be payable for the period of such extension. All payments hereunder shall be payable in Pesos,
except other amounts incurred under Section 8.04 shall be paid in the currency in which they were incurred, i.e. Dollars. Any payment required to be made
by the Administrative Agent hereunder shall be deemed to have been made by the time required if the Administrative Agent shall, at or before such time,
have taken the necessary steps to make such payment in accordance with the regulations or operating procedures of the clearing or settlement system used
by the Administrative Agent to make such payment.
(b)
If at any time insufficient funds are received by and available to the Administrative Agent from the Borrowers to pay fully all amounts of
principal, interest and fees then due from the Borrowers hereunder, such funds shall be applied (i) first, towards payment of interest and fees then due from
the Borrowers hereunder, ratably among the parties entitled thereto in accordance with the amounts of interest and fees then due to such parties, and
(ii) second, towards payment of principal then due from the Borrowers hereunder, ratably among the parties entitled thereto in accordance with the amounts
of principal then due to such parties.
(c)
If any Lender shall, by exercising any right of set-off or counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Loans resulting in such Lender receiving payment of a greater proportion of the aggregate amount of its Loans and accrued interest
thereon than the proportion received by any other Lender, then the Lender receiving such greater proportion shall purchase (for cash at face value)
participations in the Loans of other Lenders to the extent necessary so that the benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on their respective Loans; provided that (i) if any such participations are
purchased and all or any
33
portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery,
without interest, and (ii) the provisions of this clause (c) shall not be construed to apply to any payment made by the Borrowers pursuant to and in
accordance with the express terms of this Agreement or any payment obtained by a Lender as consideration for the assignment of or sale of a participation
in any of its Loans to any assignee or participant, other than to any Subsidiary or Affiliate thereof (as to which the provisions of this clause (c) shall apply).
The Borrowers consent to the foregoing and agree, to the extent they may effectively do so under applicable law, that any Lender acquiring a participation
pursuant to the foregoing arrangements may exercise against any Borrower rights of set-off and counterclaim with respect to such participation as fully as if
such Lender were a direct creditor of such Borrower in the amount of such participation up to the amount of such participation.
(d)
Unless the Administrative Agent shall have received notice from the Borrower Representative prior to the date on which any payment is
due to the Administrative Agent for the account of the Lenders that the Borrowers will not make such payment, the Administrative Agent may assume that
the Borrowers have made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders the
amount due. In such event, if the Borrowers have not in fact made such payment, then each of the Lenders severally agrees to repay to the Administrative
Agent forthwith on demand the amount so distributed to such Lender with interest thereon, for each day from and including the date such amount is
distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the TIIE Rate (or the Administrative Agent’s applicable
cost of funds) and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.
(e)
If any Lender shall fail to make any payment required to be made by it pursuant to Section 2.03(b) or 2.12(d), then the Administrative
Agent may, in its discretion (notwithstanding any contrary provision hereof), apply any amounts thereafter received by the Administrative Agent for the
account of such Lender to satisfy such Lender’s obligations under such Sections until all such unsatisfied obligations are fully paid.
2.13
Mitigation Obligations; Replacement of Lenders. (a) If any Lender requests compensation under Section 2.09, or if any Borrower is
required to pay any additional amount or indemnity payment in respect of Taxes (other than Mexican withholding Taxes imposed at a rate not in excess of
the withholding Taxes that would have been imposed had the recipient of such payment have been a Qualified Lender at the time of payment) to any
Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.09 or 2.11, then such Lender shall use reasonable efforts to
designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices,
branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to
Section 2.11, as the case may be, in the future and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be
disadvantageous to such Lender. The Borrowers hereby agree to pay all reasonable costs and expenses incurred by any Lender in connection with any such
designation or assignment.
(b)
(i) If any Lender requests compensation under Section 2.09, or requests or requires repayment under Section 2.15, or if any Borrower is
required to pay any additional amount or indemnity payment in respect of Taxes (other than Mexican withholding Taxes imposed at a rate
34
not in excess of the withholding Taxes that would have been imposed had the recipient of such payment have been a Qualified Lender at the time of
payment) to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 2.11, or if any Lender defaults in its obligation to
fund Loans hereunder or is otherwise a Defaulting Lender, or if any Lender has failed to consent to a proposed amendment, waiver, discharge or
termination which pursuant to the terms of Section 8.01 or any other provision of any Loan Document requires the consent of all or all affected Lenders
and with respect to which the Required Lenders shall have granted their consent (a “Non-Consenting Lender”), or if any Lender issues a Change in Law
Repayment Request, a Change of Control Repayment Request or a Sanctions Violation Repayment Request or if a Lender elects to terminate its
Commitment upon a Change of Control pursuant to Section 2.07(d) or upon a Sanctions Violation pursuant to Section 2.07(e), then the Borrowers may, at
their sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in
accordance with and subject to the restrictions contained in Section 8.05), all its interests, rights (other than its existing rights to payments pursuant to
Sections 2.09 and 2.11) and obligations under this Agreement and the related Loan Documents to an Eligible Transferee that shall assume such obligations
(which assignee may be another Lender, if a Lender accepts such assignment); provided that (A) the Borrowers shall have received the prior written
consent of the Administrative Agent, which consent shall not unreasonably be withheld, (B) such Lender shall have received payment of an amount equal
to the outstanding principal of its Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder and under the other Loan
Documents, from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrowers (in the case of all other amounts),
(C) in the case of any such assignment resulting from a claim for compensation under Section 2.09 or payments required to be made pursuant to
Section 2.11, such assignment will result in a reduction in such compensation or payments thereafter; (D) such assignment does not conflict with applicable
law; and (E) in the case of any assignment resulting from a Lender becoming a Non-Consenting Lender, the applicable assignee shall have consented to the
applicable amendment, waiver or consent. A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver
by such Lender or otherwise, the circumstances entitling the Borrowers to require such assignment and delegation cease to apply.
(ii)
In the circumstance where a Lender requests compensation under Section 2.09, or if there is a Defaulting Lender, the Borrowers
may, instead of the option in clause (b)(i) above, at their sole expense and effort, upon notice to such Lender and the Administrative Agent,
notwithstanding the pro rata sharing obligations of Section 2.12, pay the outstanding amount of such Lender’s Loans, after which such Lender’s
Commitment and all of such Lender’s interests, rights (other than its existing rights to payments pursuant to Sections 2.09 and 2.11) and
obligations under this Agreement and the related Loan Documents shall be extinguished, provided that such Lender shall have received payment
of an amount equal to the outstanding principal of its Loans, accrued interest thereon, accrued fees and all other amounts payable to it hereunder
and under the other Loan Documents from the Borrowers. The option described in this clause (ii) shall not be available if, prior to its exercise, as a
result of a waiver by such Lender or otherwise, the circumstances entitling the Borrowers to exercise such option cease to apply.
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(c)
Notwithstanding anything in this Section 2.13 to the contrary, the Lender that acts as the Administrative Agent may not be replaced
hereunder except in accordance with the terms of Section 7.09.
2.14
Defaulting Lenders. (a) Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting
Lender, then, until such time as such Lender is no longer a Defaulting Lender, to the extent permitted by applicable law:
(i)
Such Defaulting Lender’s right to approve or disapprove any amendment, waiver or consent with respect to this Agreement shall
be restricted as set forth in the definition of “Required Lenders” and Section 8.01;
(ii)
Defaulting Lender Waterfall. Any payment of principal, interest, fees or other amounts received by the Administrative Agent for
the account of such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Section 6 or otherwise) or received by the
Administrative Agent from a Defaulting Lender pursuant to Section 8.06(b) shall be applied at such time or times as may be determined by the
Administrative Agent as follows: first, to the payment of any amounts owing by such Defaulting Lender to the Administrative Agent hereunder;
second, as the Borrower Representative may request (so long as no Default or Event of Default exists), to the funding of any Loan in respect of
which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent;
third, if so determined by the Administrative Agent and the Borrower Representative, to be held in a deposit account and released pro rata in order
to satisfy such Defaulting Lender’s potential future funding obligations with respect to Loans under this Agreement; fourth, to the payment of any
amounts owing to the Lenders as a result of any judgment of a court of competent jurisdiction obtained by any Lender against such Defaulting
Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; fifth, so long as no Default or Event of Default
exists, to the payment of any amounts owing to any of the Borrowers as a result of any judgment of a court of competent jurisdiction obtained by
such Borrower against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; and sixth, to
such Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that if (x) such payment is a payment of the
principal amount of any Loans in respect of which such Defaulting Lender has not fully funded its appropriate share, and (y) such Loans were
made at a time when the conditions set forth in Section 3.02 were satisfied or waived, such payment shall be applied solely to pay the Loans of all
Non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Loans of such Defaulting Lender until such time as all
Loans are held by the Lenders pro rata in accordance with the Commitments. Any payments, prepayments or other amounts paid or payable to a
Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender pursuant to this Section 2.14 shall be deemed paid to
and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto.
(iii)
No Defaulting Lender shall be entitled to receive any Revolving Loan Commitment Fee for any period during which that Lender
is a Defaulting Lender (and the
36
Borrowers shall not be required to pay any such fee that otherwise would have been required to have been paid to that Defaulting Lender);
(iv)
In the event that the Administrative Agent determines that a Defaulting Lender has adequately remedied all matters that caused
such Lender to be a Defaulting Lender, then the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified
in such notice and subject to any conditions set forth therein such Lender will cease to be a Defaulting Lender; provided that no adjustments will
be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrowers while that Lender was a Defaulting Lender;
and provided further that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to
Lender will constitute a waiver or release of any claim of any of the Borrowers or any other party hereunder arising from such Lender’s having
been a Defaulting Lender, and the Borrowers and such other party shall retain and reserve any such claim.
(b)
Nothing in this Section 2.14 or elsewhere in this Agreement shall be construed to excuse any Defaulting Lender from its obligations
(including funding obligations) hereunder.
2.15
Illegality. If any Lender reasonably determines, by reference to a written Change in Law, that any Change in Law has made it unlawful,
or that any Governmental Authority has asserted that it is unlawful, for any Lender or its lending office to make, maintain or fund Loans, then such Lender
shall promptly notify the Borrower Representative thereof (with a copy to the Administrative Agent) following which (a) such Lender’s Commitment shall
be suspended until such time as such Lender may again make and maintain its Loans hereunder and (b) if such Change in Law or such restrictions shall so
mandate, (unless such Lender is replaced pursuant to Section 2.13(b)) such Lender’s Loans shall be prepaid by the Borrowers, together with accrued and
unpaid interest thereon and all other amounts payable by the Borrowers under this Agreement, on or before such date as shall be mandated by such Change
in Law or such restrictions, to the Administrative Agent for the account of such Lender, on the last day of the then-current Interest Period for such Loans (or
on such earlier date as shall be notified to by the Lender as being the last permissible date for such prepayment under the relevant applicable law); provided
that if any Lender makes such a determination, the Borrower Representative may require such Lender, in accordance with applicable law and
Section 8.05(c), to sell to one or more Mexican and international banks and other commercial banks (other than a Restricted Person, a natural person, the
Borrower Representative or a Defaulting Lender, or any of their respective Affiliates or Subsidiaries of a Restricted Person or a Defaulting Lender) all or
any part of its rights and/or obligations under this Agreement and the Promissory Notes pursuant to an Assignment and Assumption Agreement, executed
by such Purchasing Lender, such transferor Lender and the Administrative Agent; provided further that the Borrowers shall have no obligation to any
Lender (and the Lender shall continue to honor its Commitment) under this Section 2.15 unless, following a written Change in Law, such Lender certifies
to the Borrowers that it has made such determination without granting any waivers with respect to borrowers of the applicable Lender that (a) are similarly
situated to the Borrowers under syndicated credit facilities comparable to those provided hereunder and (b) have credit ratings substantially similar to the
Borrowers at the time of imposition. The Borrowers shall have no obligation to any Lender under this Section 2.15 if, following a written Change in Law,
such Lender waives or does not make such determination
37
for any borrower with a credit rating substantially similar to the Borrowers. If such Lender waives or does not make such determination for any borrower
with a credit rating substantially similar to the Borrowers, such Lender shall waive the determination with respect to the Borrowers.
2.16
Borrower Representative. Each Borrower hereby appoints the Parent Borrower to act as its agent (comisionista) pursuant to articles 273
and 274 of the Mexican Commerce Code (Código de Comercio) for all purposes under the Loan Documents (including, without limitation, with respect to
all matters related to the borrowing and repayment of Loans and the giving and receiving of notices under or in respect of the Loan Documents) (in such
capacity, the “Borrower Representative”). Each Borrower acknowledges and agrees that (i) the Borrower Representative may execute such documents as
the Borrower Representative deems appropriate in its sole discretion, and with respect to any such document executed by only the Borrower
Representative, each Borrower shall be bound by and obligated by all of the terms of any such document, (ii) any notice or other communication delivered
by the Administrative Agent or any Lender hereunder to the Borrower Representative shall be deemed to have been delivered to each Borrower and (iii) the
Administrative Agent and the Lenders shall accept (and shall be permitted to rely on) any document or agreement executed by the Borrowers or the
Borrower Representative. Each Borrower agrees that any action taken by the Borrower Representative without the consent of, or notice to, such Borrower
shall not release or discharge such Borrower from its obligations hereunder.
2.17
Joint and Several Liability.
(a)
Each of the Borrowers hereby directs the Administrative Agent to disburse the proceeds of each Loan as directed by a Borrower in a
Borrowing Request, and such distribution will, in all circumstances, be deemed to be made to the Borrower to which such proceeds are directed.
(b)
Each Borrower shall be jointly and severally liable for all Obligations and for all other obligations and liabilities of the Borrowers
hereunder. For the avoidance of doubt, each of the Borrowers agrees and understands that it shall be jointly and severally liable for the Obligations and for
all other obligations and liabilities of the Borrowers hereunder as described in the preceding sentence, without regard to the identity of the Borrower in
whose name any Loan is made or other Obligation is incurred.
(c)
It is the intention of the parties that with respect to each Borrower, its obligations under Section 2.17(b) shall be absolute, unconditional
and irrevocable irrespective of, and each Borrower hereby expressly waives, to the extent permitted by law, any defense to its Obligations under this
Agreement and all the other Loan Documents to which it is a party by reason of:
(i)
any lack of legality, validity or enforceability of this Agreement, of any of the Promissory Notes, of any other Loan Document or
of any other agreement or instrument creating, providing security for, or otherwise relating to any of the Obligations (the Loan Documents and all
such other agreements and instruments being collectively referred to as the “Related Agreements”);
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(ii)
any action taken under any of the Related Agreements, any exercise of any right or power therein conferred, any failure or
omission to enforce any right conferred thereby, or any waiver of any covenant or condition therein provided;
(iii)
any change in the corporate existence, structure or ownership of any Borrower, any other guarantor or any other Person or any of
the Subsidiaries, or any insolvency, concurso mercantil, bankruptcy, reorganization or other similar proceeding affecting any Borrower, any other
guarantor or any other Person or any of their assets or any resulting release or discharge of any obligation of any Borrower or any other Person
under any Loan Document;
(iv)
any acceleration of the maturity of any of the Obligations or of any other obligations or liabilities of any Person under any of the
Related Agreements;
(v)
any release, exchange, non-perfection, lapse in perfection, disposal, deterioration in value, or impairment of any security for any
of the Obligations or for any other obligations or liabilities of any Person under any of the Related Agreements;
(vi)
any dissolution of any Borrower or any other party to a Related Agreement, or the combination or consolidation of any
Borrower or any other party to a Related Agreement into or with another entity or any transfer or disposition of any assets of any Borrower or any
other party to a Related Agreement;
(vii)
any extension (including extensions of time for payment), renewal, settlement, compromise, waiver or release, amendment,
restructuring or restatement of, any acceptance of late or partial payments under, or any change in the amount of any borrowings or any credit
facilities available under, this Agreement, any of the Promissory Notes or any other Loan Document or any other Related Agreement, in whole or
in part;
(viii)
the existence, addition, modification, termination, reduction or impairment of value, or release of any other guaranty (or security
therefor) of any of the Obligations;
(ix)
any waiver of, forbearance or indulgence under, or other consent to any change in or departure from any term or provision
contained in this Agreement, any other Loan Document or any other Related Agreement, including without limitation any term pertaining to the
payment or performance of any of the Obligations or any of the obligations or liabilities of any party to any other Related Agreement; or
(x)
any other circumstance whatsoever (with or without notice to or knowledge of any Borrower) which may or might in any
manner or to any extent vary the risks of such Borrower, or might otherwise constitute a legal or equitable defense available to, or discharge of, a
surety or a guarantor, including any right to require or claim that resort be had to any Borrower or to any collateral in respect of the Obligations.
(d)
Each Borrower represents and warrants that the request for joint handling of the Loans and other Obligations made hereunder was made
because (i) such Borrower expects to derive benefit, directly or indirectly, from such Loans because the successful operation of the
39
Borrowers is dependent on the continued successful performance of the functions of the Parent Borrower and its Subsidiaries and (ii) the Loans extended
under this Agreement will enhance the overall financial strength and stability of the Parent Borrower and its Subsidiaries.
SECTION 3. CONDITIONS PRECEDENT
3.01
Conditions Precedent to Effectiveness. The obligations of the Administrative Agent under this Agreement and the obligation of each
Lender to make Loans hereunder shall be subject to the satisfaction of the following conditions on or before the date that is ten (10) Business Days
following the date hereof:
(a)
The Administrative Agent (or its counsel) shall have received from each party hereto either (i) a counterpart of this Agreement signed on
behalf of such party or (ii) written evidence reasonably satisfactory to the Administrative Agent (which may include electronic transmission of a signed
signature page of this Agreement) that such party has signed a counterpart of this Agreement;
(b)
The Administrative Agent shall have received, with respect to each Borrower, the documents and certificates specified on
Schedule 3.01(b), all in form and substance reasonably satisfactory to the Administrative Agent;
(c)
The Administrative Agent shall have received, each for the benefit of the Administrative Agent and all Lenders and in form and substance
reasonably satisfactory to the Administrative Agent, the opinions of (i) Fried, Frank, Harris, Shriver & Jacobson LLP, New York counsel to the Borrowers,
(ii) Mijares, Angoita, Cortes y Fuentes, S.C., Mexican counsel to the Borrowers, (iii) Cleary Gottlieb Steen & Hamilton LLP, New York counsel to the
Lenders and (iv) Ritch, Mueller y Nicolau, S.C., Mexican counsel to the Lenders;
(d)
The Administrative Agent shall have received a certificate dated the Effective Date and executed by an Authorized Officer of the
Borrower Representative, confirming satisfaction of the conditions set forth in this Section 3.01 (with a copy either posted to the Lender site on
Debtdomain (or similar service employed in relation to this Agreement) or delivered to each Lender on request of such Lender);
(e)
The Administrative Agent shall have received acceptance from the designated process agent to act as process agent for the Borrowers or
to amend and extend an existing appointment, and a Mexican law notarized irrevocable power of attorney for lawsuits and collections (pleitos y cobranzas)
granted by the Borrowers in favor of such process agent;
(f)
The Administrative Agent shall have received the audited consolidated financial statements of the Parent Borrower and its Subsidiaries
and the audited unconsolidated financial statements of the Subsidiary Co-Borrowers for the fiscal year ending December 31, 2022, as well as the most
recent publicly available unaudited condensed consolidated quarterly financial statements of the Parent Borrower and its Subsidiaries and unaudited
unconsolidated quarterly financial statements of the Subsidiary Co-Borrowers, provided that public filing of these statements constitutes delivery;
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(g)
The Administrative Agent shall have received all documentation and other information required by bank regulatory authorities under
applicable “know-your-customer” and anti-money laundering rules and regulations, including the Patriot Act, to the extent reasonably requested by the
Administrative Agent or the Lenders (through the Administrative Agent) at least ten (10) Business Days prior to the Effective Date;
(h)
The Administrative Agent shall have received on or prior to the Effective Date (or provisions reasonably satisfactory to the
Administrative Agent shall have been made for the concurrent payment of) any and all fees (including all fees due and payable pursuant to the Fee Letters
and fees for legal counsels pursuant to section 8.04), commissions and, to the extent invoiced, reimbursement or payment of all reasonable, documented
and pre-approved (which approval shall not be unreasonably withheld, provided that the failure of the Borrower Representative to respond to a written
request for approval (to the extent duly notified in accordance with Section 8.02) within five (5) Business Days thereafter shall be deemed to constitute
approval) out-of-pocket costs and expenses required to be reimbursed or paid by the Borrowers hereunder (including Other Taxes) and that have been
invoiced at least three (3) Business Days prior to the Effective Date (unless otherwise agreed to in writing by the applicable Lender or legal counsel), which
invoices, (i) if delivered by a Mexican entity, shall comply with all requirements under Mexican law and (ii) if delivered by a non-Mexican entity, shall
comply with all requirements under Mexican law as set forth in Schedule 3.01(h);
(i)
No event having a Material Adverse Effect has occurred since December 31, 2022;
(j)
All representations and warranties set out in Section 4 shall be true and correct in all material respects as of such date;
(k)
No Default or Event of Default shall have occurred and be continuing; and
(l)
the Borrowers shall have performed all actions and entered into all required documentation to terminate any and all commitments and
obligations under the 2022 Revolving Facility upon repayment of all outstanding amounts thereon, and shall have delivered to the Administrative Agent a
payoff letter reasonably satisfactory to it evidencing such termination.
3.02
Conditions Precedent to Each Borrowing. The obligation of each Lender to make a Loan on the occasion of any Borrowing is subject to
the satisfaction of the following conditions (provided that clauses (d), (e) and (f) of this Section shall only apply to Loans made on a date other than on the
Effective Date):
(a)
The Effective Date shall have occurred;
(b)
The Administrative Agent shall have received a Borrowing Request in accordance with Section 2.02 (with a copy either posted to the
Lender site on Debtdomain (or similar service employed in relation to this Agreement) or delivered to each Lender on request of such Lender);
(c)
The Administrative Agent shall have received, for the account of each Lender making a Loan included in such Borrowing, a Promissory
Note, dated the date of the relevant
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Borrowing and evidencing the amount of the relevant Loan to be made by such Lender as part of such Borrowing;
(d)
Each of the representations and warranties set out in Section 4 shall be true and correct in all material respects (or if qualified by
materiality or Material Adverse Effect, in all respects) on and as of the date of such Borrowing, before and after giving effect to the Borrowing, and to the
application of the proceeds therefrom, with the same effect as if made on and as of such date (other than those representations and warranties that by their
terms expressly relate to an earlier date, in which case such representations and warranties shall have been true and correct in all material respects as of
such earlier date);
(e)
At the time of and immediately after giving effect to such Borrowing, no Default or Event of Default shall have occurred and be
continuing, or that would result from such Borrowing;
(f)
The Administrative Agent shall have received on or prior to the date of such Borrowing (or provisions reasonably satisfactory to the
Administrative Agent shall have been made for the concurrent payment of) any and all fees (including the Revolving Loan Commitment Fees and all fees
due and payable pursuant to the Fee Letters), commissions and, to the extent invoiced, reimbursement or payment of all reasonable, documented and pre-
approved (which approval shall not be unreasonably withheld, provided that the failure of the Borrower Representative to respond to a written request for
approval (to the extent duly notified in accordance with Section 8.02) within five (5) Business Days thereafter shall be deemed to constitute approval) out-
of-pocket costs and expenses required to be reimbursed or paid by the Borrowers hereunder (including Other Taxes) and that have been invoiced at least
three (3) Business Days prior to the date of such Borrowing, which invoices, (i) if delivered by a Mexican entity, shall comply with all requirements under
Mexican law and (ii) if delivered by a non-Mexican entity, shall comply with all requirements under Mexican law as set forth in Schedule 3.01(h); and
(g)
With respect to the initial Borrowing of the Loans only, the Borrowers shall have performed all actions and entered into all required
documentation to terminate any and all commitments and obligations under the 2019 Term Facility, upon repayment of all outstanding amounts thereon
with the proceeds of the Loans, and shall have delivered to the Administrative Agent a payoff letter reasonably satisfactory to it evidencing such
termination.
Each Borrowing shall be deemed to constitute a representation and warranty by the Parent Borrower on the date thereof as to the matters specified in
clauses (d) and (e) of this Section 3.02.
SECTION 4. REPRESENTATIONS AND WARRANTIES
4.01
Representations and Warranties. Each of the Borrowers hereby, jointly and severally, represents and warrants, as of the date hereof, the
Effective Date and the date of each Borrowing, that:
(a)
It is duly organized under the laws of the United Mexican States.
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(b)
The performance of the Loan Documents, the consummation of the transactions contemplated therein and compliance by each Borrower
with its obligations thereunder have been duly authorized by it and it has duly executed the Loan Documents. The Persons executing this Agreement on
behalf of each Borrower have all powers of attorney and sufficient authority, as well as the necessary corporate authorizations to enter into this Agreement
on its behalf and to bind it under the terms and conditions stipulated in the same, and the aforesaid powers of attorney, authority and corporate
authorizations have not been revoked or limited in any way that may affect this representation, except that the permitted use of proceeds may be limited
pursuant to the applicable authorizing resolutions from time to time. The execution, delivery and performance of the Loan Documents is consistent with its
corporate purpose, is duly authorized by all necessary corporate action and does not (i) violate its bylaws in effect on the date of this Agreement, (ii) violate
any applicable Mexican federal law in force on the date of this Agreement; (iii) violate any contracts of any Borrower; or (iv) result in the imposition of any
Lien on any of its properties, and which violation in the cases of clauses (ii), (iii) and (iv) would reasonably be expected to have a Material Adverse Effect.
(c)
It possesses such permits, licenses, approvals, consents and other authorizations (collectively, “Governmental Licenses”) and no
approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any other Person (collectively, “Other Consents”) is required to
carry out the Transactions, except (x) where such Governmental License or Other Consent has been obtained or (y) where the failure to have such
Governmental Licenses or Other Consents would not reasonably be expected to have a Material Adverse Effect.
(d)
There is no action, suit, or proceeding of any nature that is now pending or, to the best of such Borrower’s knowledge, threatened against
such Borrower before any Governmental Authority that would reasonably be expected to have a Material Adverse Effect.
(e)
Since December 31, 2022, there has been no event that has had a Material Adverse Effect.
(f)
The audited consolidated financial statements for the year ending December 31, 2022 of the Parent Borrower and its Subsidiaries and
audited unconsolidated financial statements for the year ending December 31, 2022 of the Subsidiary Co-Borrowers as well as the most recent publicly
available unaudited condensed consolidated quarterly financial statements of the Parent Borrower and its Subsidiaries and unaudited unconsolidated
quarterly financial statements of the Subsidiary Co-Borrowers were prepared in accordance with IFRS. The aforementioned financial statements (i) are
complete and (ii) fairly present and accurately describe the financial condition of the Parent Borrower and its Subsidiaries and each of the Subsidiary Co-
Borrowers on the dates indicated, in each case in all material respects, subject, in the case of the unaudited financial statements, to changes resulting from
normal year end audit adjustments and the absence of footnotes.
(g)
All material written information (considered as a whole), provided by each Borrower, or on its behalf, relating to this Agreement or the
transactions contemplated hereunder, is complete and accurate in all material respects on the date indicated in such statements, and does not omit to state a
material fact necessary in order to make the statements contained herein or therein (considered as a whole) not misleading.
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(h)
Each of the Loan Documents to which each Borrower is a party, when executed and delivered by each Borrower, will constitute a legal,
valid and binding obligation of such Borrower, enforceable against such Borrower in accordance with its respective terms, except as the enforcement
thereof may be limited by bankruptcy, insolvency (including, without limitation, all laws relating to fraudulent transfers), reorganization, moratorium,
suspension of payments, concurso mercantil as described in the Ley de Concursos Mercantiles of Mexico, or similar laws of the U.S. or Mexico affecting
the enforcement of creditors’ rights generally and except as enforcement thereof is subject to general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at law).
(i)
None of the Borrowers is in violation of any applicable laws, statutes, ordinances, rules or regulations of any applicable jurisdiction,
including all applicable tax laws, labor laws, environmental laws and margin regulations, except where such violation would not reasonably be expected to
have a Material Adverse Effect.
(j)
None of the Borrowers is required to register as an “investment company” under the U.S. Investment Company Act of 1940, as amended.
(k)
None of the Borrowers will use any part of the proceeds of the Loans in violation of Regulation T, U or X of the U.S. Federal Reserve
Board.
(l)
There is no pending or to each of the Borrower’s knowledge any imminently threatened strike or labor dispute against such Borrower or
the Significant Subsidiaries, except for any strike or labor dispute that would not reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect. Each Borrower is in compliance with all applicable Anti-Money Laundering Laws, Anti-Corruption Laws, Sanctions and the
Patriot Act except where the failure to do so would not reasonably be expected have a relevant and significant material adverse effect on the main business
and financial condition of each Borrower and/or the Significant Subsidiaries taken as a whole. None of the Borrowers are currently the subject of any
Sanctions, nor is such Borrower located, organized, or resident in a jurisdiction that is itself the subject of any Sanctions (as of the date hereof, the region of
Crimea, the so-called Donetsk People’s Republic and the so-called Luhansk People’s republic regions of Ukraine, Cuba, Iran, North Korea and Syria). The
Parent Borrower has instituted guidelines, policies or procedures which are applicable to the Parent Borrower, the Subsidiary Co-Borrowers and the
Significant Subsidiaries and that are reasonably designed, maintained and implemented to ensure continued compliance with applicable Sanctions, Anti-
Corruption Laws and Anti-Money Laundering Laws.
(m)
The obligations evidenced by this Agreement and the other Loan Documents to which it is a party, are and will at all times be direct and
unconditional general obligations of each Borrower and rank and will at all times rank in right of payment and otherwise at least equal with all other senior
unsecured Indebtedness of such Borrower, if any, whether now existing or hereafter outstanding.
SECTION 5. COVENANTS
5.01
Affirmative Covenants of the Borrowers. Each Borrower, as applicable, hereby covenants and agrees that on and after the Effective Date
and until the Commitments have expired
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or terminated and the principal of and interest on each Loan and all fees payable hereunder have been paid in full (other than contingent obligations):
(a)
Compliance with Laws and Payment of Taxes. Each Borrower will comply in all material aspects with all applicable laws, rules,
regulations and orders (including environmental laws), including the payment when due of all taxes owed by each Borrower or the Significant Subsidiaries
and Subsidiary Co-Borrowers or that are generated on their respective goods, as well as governmental contributions, fees and charges that may be
determined, imposed or required, except (i) with respect to the aforesaid applicable laws, rules, regulations and orders (including environmental laws), to
the extent that breach of the same cannot reasonably be expected to have a Material Adverse Effect; and (ii) with respect to the aforesaid taxes, (x) to the
extent that they are challenged in good faith by means of appropriate procedures, or (y) the lack of payment of the same is not reasonably expected to have
a Material Adverse Effect.
(b)
Legal Existence and Management of Business Transactions. The Parent Borrower will (i) continue to carry out, and shall cause the
Subsidiary Co-Borrowers to continue to carry out, the same or similar type of activities and business transactions as their Core Business, and (ii) ensure
that it and each of the Significant Subsidiaries and the Subsidiary Co-Borrowers preserves and maintains its legal existence (except where the failure to do
so would not reasonably be expected to have a Material Adverse Effect); provided that neither the Parent Borrower nor the Significant Subsidiaries or the
Subsidiary Co-Borrowers will be obligated to maintain their legal existence in relation to a merger or consolidation permitted pursuant to Section 5.02(a);
and provided further, that neither the Parent Borrower nor the Significant Subsidiaries or the Subsidiary Co-Borrowers will be compelled to preserve any
rights (whether under bylaws or laws), licenses, concessions, authorizations, permits, notifications, registrations or franchises if the Parent Borrower or the
Significant Subsidiaries or the Subsidiary Co-Borrowers, as applicable, determines in good faith that preservation thereof is not in the commercial interests
for the Parent Borrower or any of the Significant Subsidiaries or the Subsidiary Co-Borrowers, as the case may be, or that the loss thereof would not
reasonably be expected to have a Material Adverse Effect. In no case shall this obligation be interpreted as a limitation on the ability of the Parent Borrower
or the Significant Subsidiaries or the Subsidiary Co-Borrowers to establish and maintain additional businesses related to, or substantially similar to the
Core Business of the Parent Borrower, the relevant Significant Subsidiary, other Significant Subsidiaries or the Subsidiary Co-Borrowers.
(c)
Information Requirements. The Parent Borrower or each Borrower (as applicable) will provide to the Administrative Agent:
(i)
Within one hundred eighty (180) calendar days following the close of each fiscal year, a copy of the audited consolidated
financial statements of the Parent Borrower and a copy of the audited unconsolidated financial statements of each of the Subsidiary Co-Borrowers
for the aforesaid fiscal year, which shall include the balance sheet, income statements, changes in stockholders’ equity and cash flows for the
aforesaid fiscal year in accordance with IFRS, and concurrently with the delivery of the foregoing annual audited financial statements, a certificate
of an Authorized Officer of each of the Borrowers, certifying to the best of his or her knowledge, that no Event of Default has occurred and is
continuing, or, if an Event of Default has occurred and is continuing, indicating details thereof and the measures taken or proposed to be taken to
cure such Event of Default;
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provided that the Borrowers will be deemed to have provided the financial statements referred to in this Section 5.01(c)(i) if it has provided a
notice to the Administrative Agent regarding the public filing of such information;
(ii)
Within ninety (90) calendar days following the close of each quarter of each fiscal year (excluding the fourth calendar quarter),
(A) the balance sheet at the end of the aforesaid quarter and (B) income statements for the aforesaid quarter and for the period beginning at the end
of the previous fiscal year and ending at the close of the aforesaid quarter, for the Parent Borrower and each of the Subsidiary Co-Borrowers,
unaudited and consolidated (and, for the avoidance of doubt, unconsolidated with respect to the Subsidiary Co-Borrowers) as applicable according
to IFRS, and concurrently with the delivery of the foregoing quarterly balance sheet and income statement, a certificate of an Authorized Officer
of each of the Borrowers, certifying to the best of his or her knowledge, that no Event of Default has occurred and is continuing, or, if an Event of
Default has occurred and is continuing, indicating details thereof and the measures taken or proposed to be taken to cure such Event of Default,
provided that each of the Borrowers will be deemed to have provide the balance sheets and income statements referred to in this Section 5.01(c)(ii)
if it has provide a notice to the Administrative Agent regarding the public filing of such information;
(iii)
Within ten (10) Business Days following the date any Responsible Officer of any of the Borrowers has actual knowledge of the
existence of any Default or Event of Default, a statement signed by the Authorized Officer indicating details of the aforesaid Event of Default and
the measures taken or proposed to be taken to cure such Event of Default;
(iv)
Within five (5) Business Days following service of process or notification of any action, complaint or litigation to which the
Parent Borrower or any of the Significant Subsidiaries or the Subsidiary Co-Borrowers is a party and which has a Material Adverse Effect, a
notification signed by an Authorized Officer of the Parent Borrower, describing the nature of said action, complaint or litigation and the measures
taken or proposed to be taken in such respect;
(v)
Any other information related to the financial situation of each Borrower and/or any of the Significant Subsidiaries related to
information to be provided by the each Borrower under clauses (i) and (ii) above that may be reasonably requested at any time by the
Administrative Agent.
(d)
Insurance Policies. The Parent Borrower will, and will cause each of the Significant Subsidiaries and the Subsidiary Co-Borrowers to,
maintain insurance, materially in accordance with its past practices, in such amounts as are customarily maintained by companies engaged in the same or
similar Core Business as the Parent Borrower and located in Mexico.
(e)
Accounting. The Parent Borrower will maintain and will ensure that the Significant Subsidiaries and the Subsidiary Co-Borrowers
maintain accounting books and records such that
46
they accurately reflect in all material respects its financial situation and operating results in accordance with IFRS.
(f)
Inspection Rights. At the Administrative Agent’s request (through the proper executive) at least seven (7) calendar days in advance, each
Borrower shall allow the representatives appointed in writing by the Administrative Agent to inspect the accounting records and/or properties of such
Borrower that were used for the preparation of the such Borrower’s financial statements, provided that (I) the aforesaid inspections (x) are carried out on
working days and during office hours of such Borrower and (y) do not interfere with the regular operations of such Borrower, the Subsidiaries, or their
respective executives and external auditors, and (II) necessary actions (as reasonably determined by the Parent Borrower) have been taken to preserve the
confidentiality of information to which the Administrative Agent or its representatives have access.
(g)
Use of the Funds. The Borrowers will use the funds of the Loans for (i) the repayment of existing Indebtedness, including any obligations
under (x) the 2022 Revolving Facility and (y) the 2019 Term Facility, and (ii) such other general corporate purposes, including working capital, capital
expenditures, acquisitions and any other lawful purpose, including fees, costs and expenses related to the Loan Documents. The Borrowers will not use the
proceeds of the Loans in violation of Sanctions, Anti-Money Laundering Laws and Anti-Corruption Laws.
(h)
Priority. Each Borrower will ensure as necessary that each Borrower’s obligations hereunder and under the Promissory Notes
(i) constitute at all times, unconditional and unsubordinated Indebtedness of such Borrower; and (ii) have at least the same priority of payment as any other
unsecured and unsubordinated Indebtedness, present or future, of such Borrower; except for any payment obligations of such Borrower that have a payment
preference under applicable law.
(i)
Net Leverage Ratio. The Parent Borrower will not permit the Net Leverage Ratio determined as of the last day of any full fiscal quarter of
the Parent Borrower after the Effective Date to be greater than 4.00 to 1.00.
(j)
Interest Coverage Ratio. The Parent Borrower will not permit the Interest Coverage Ratio determined as of the last day of any full fiscal
quarter of the Parent Borrower after the Effective Date to be less than 1.50 to 1.00.
(k)
Anti-Money Laundering Laws, Anti-Corruption Laws and the Patriot Act. The Borrowers will comply and ensure that each of their
Significant Subsidiaries complies with all applicable Anti-Money Laundering Laws, Anti-Corruption Laws, and the Patriot Act except where the failure to
do so would not reasonably be expected to have a relevant and significant material adverse effect on the main business and financial condition of any of the
Borrowers and its Significant Subsidiaries taken as a whole. The Parent Borrower will maintain in effect and enforce guidelines, policies and procedures
which are applicable to the Parent Borrower, the Subsidiary Co-Borrowers and the Significant Subsidiaries and that are reasonably designed, maintained
and implemented to ensure continued compliance with applicable Sanctions, Anti-Corruption Laws and Anti-Money Laundering Laws.
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5.02
Negative Covenants of the Borrowers. The Parent Borrower hereby covenants and agrees that on and after the Effective Date and until
the Commitments have expired or terminated and the principal of and interest on each Loan and all fees payable hereunder have been paid in full (other
than contingent obligations):
(a)
Limitation on Fundamental Changes. The Parent Borrower will not, and will not permit any Significant Subsidiary or the Subsidiary Co-
Borrowers to, merge, liquidate or dissolve itself, provided that this limitation will not apply if (i)(A) the Parent Borrower or pertinent Significant Subsidiary
or Subsidiary Co-Borrower is the survivor of any such transaction, (B) the Significant Subsidiary or Subsidiary Co-Borrower is merged, liquidated or
dissolved into or with another subsidiary of the Parent Borrower or into or with the Parent Borrower (or a Person that becomes a subsidiary of the Parent
Borrower substantially contemporaneously with such transaction), (C) the Parent Borrower is the subject of such transaction and not the survivor thereof,
the surviving Person assumes the obligations of the Parent Borrower under the Loan Documents and the surviving Person is an Approved Borrower, or
(D) if a Significant Subsidiary or a Subsidiary Co-Borrower is merged into or with another Person, such Person (or the Person resulting of such merger)
becomes a Significant Subsidiary or Subsidiary Co-Borrower; and (ii) no Event of Default has occurred and is continuing or, if an Event of Default occurs
after the completion of such merger, liquidation, consolidation or dissolution, it is cured within the applicable cure period permitted by this Agreement.
Notwithstanding the foregoing, any Significant Subsidiary or Subsidiary Co-Borrower may merge with, or be liquidated or dissolved into, any Person by
means of adequate consideration (as determined by the Parent Borrower in its reasonable discretion) to the Parent Borrower and its Subsidiaries.
(b)
Limitation on Sale of Assets. The Parent Borrower may sell, transfer or otherwise dispose of any of its goods or fixed assets, whether
present or future, by any means, including a divestiture or a spin off, so long as such sale, transfer or disposal does not (i) result in the Parent Borrower’s
violation of the covenants in Sections 5.01(i) and (j) or (ii) result in an Event of Default.
(c)
Limitation on Liens. The Parent Borrower may incur Liens securing Indebtedness on any of its properties or assets, whether present or
future, or on those of its Significant Subsidiaries or Subsidiary Co-Borrowers, so long as the incurrence of any such Lien (i) does not result in the Parent
Borrower’s violation of the covenants in Sections 5.01(i) and (j) above and (ii) no Event of Default has occurred and is continuing as a result thereof.
SECTION 6. EVENTS OF DEFAULT
6.01
Event of Default. If any of the events described below has occurred and is continuing (each one, after termination of the periods for
curing or remedying the same pursuant to this Section 6.01, hereinafter an “Event of Default”), the Administrative Agent may, and upon written direction
from the Required Lenders shall, by written notification to the Borrower Representative, terminate the Commitments and declare the principal sum of the
Loans to be immediately due and payable, as well as the accrued and unpaid interest, and all other amounts owed under this Agreement, in which case the
Promissory Notes, the unpaid principal of the Loans, the unpaid accrued interest and all amounts owed and unpaid by the Borrowers to the Administrative
Agent under this Agreement will be immediately due and payable, provided that,
48
in case of any event described in clause (h) of this Section 6.01, the Commitments shall automatically terminate and the principal of the Loans then
outstanding, together with accrued interest thereon and all fees and other Obligations accrued hereunder, shall automatically become due and payable,
without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrowers:
(a)
If the Borrowers shall fail to pay any principal or interest on any Loan, or any fee or any other amount payable under this Agreement,
when and as the same shall become due and payable, and such failure shall continue unremedied for a period of more than five (5) Business Days;
(b)
If any representation or warranty made or deemed made by or on behalf of the Borrowers in this Agreement shall prove to have been
incorrect when made or deemed made, and such breach could reasonably be expected to have a Material Adverse Effect and is not cured within thirty (30)
calendar days following the date on which the Administrative Agent notified the Borrower Representative in writing of such breach;
(c)
If any of the Borrowers or any of the Significant Subsidiaries (i) fails to make any payment when due (whether at maturity, by scheduled
payment, required prepayment, acceleration, demand, or otherwise) in respect of any Indebtedness (other than Indebtedness under the Loan Documents)
having an aggregate principal amount equal to or greater than the Threshold Amount, in each case beyond the applicable grace period with respect thereto,
if any, or (ii) breaches any other term, agreement or condition in any financing document relating to any such Indebtedness having in an aggregate principal
amount equal to or greater than the Threshold Amount incurred by each Borrower, and such breach causes, or permits the holders of such Indebtedness to
cause, with the giving of notice if required, such Indebtedness to be required to be repaid, or to become due or to be repurchased, prior to its stated
maturity, in each case beyond the applicable grace period with respect thereto, if any;
(d)
If any Governmental Authority should attach, confiscate, seize, nationalize, expropriate or assume custody or control of all or a
substantial part of the goods of any of the Borrowers or the Significant Subsidiaries, or transfer the administration of any of the Borrowers or the
Significant Subsidiaries or substantially limit their authority to operate their businesses or exercise control over each of the Borrowers or any of the
Significant Subsidiaries or all or any important part of the goods of the Significant Subsidiaries, and such action, based on the value of the assets so
affected, could reasonably be expected to have a Material Adverse Effect; and in all the foregoing cases the aforesaid action of the Governmental Authority
is not set aside, suspended or dismissed within a period of sixty (60) calendar days after such action occurs;
(e)
If at any time during the effective term of this Agreement, any of the Borrowers breaches (i) any of the obligations stipulated in
Sections 5.01(b), (c)(iii), (i) and (j), or Section 5.02, and such breach continues unremedied for a period of ten (10) or more calendar days; or (ii) any of the
other obligations stipulated in Section 5.01 (other than those specified in clause (i) of this Section 6.01(e)), and such breach continues unremedied for a
period of thirty (30) or more calendar days following the date on which the Administrative Agent notified the Parent Borrower in writing of such breach;
provided that only a bank formed under the laws of Canada, or a bank with a parent company formed under the laws of Canada when it is a Lender may
declare
49
an Event of Default in respect of a breach of Section 5.01(k) related to (x) the Canadian Corruption of Foreign Public Officials Act and (y) any Sanctions
Violations administered, enacted or enforced by Canada or by the respective governmental institutions, agencies and subdivisions of Canada and, following
such a declaration by any bank formed under the laws of Canada, or a bank with a parent company formed under the laws of Canada, the Borrower shall
only be required to either (x) repay all of such bank’s Loans then outstanding or (y) replace such bank as a Lender under this Agreement pursuant to the
terms of this Agreement;
(f)
If one or more final, non-appealable judgments for the payment of money in an aggregate amount in excess of the Threshold Amount (to
the extent not covered by an indemnification obligation or third party insurance as to which the indemnifying party or insurer has not denied coverage or, if
coverage has been denied, such denial has not been sustained in a final non-appealable judgment or accepted by such Borrower) shall be rendered against
any of the Borrowers, any Significant Subsidiary or any combination thereof and during a period of sixty (60) consecutive days after such final non-
appealable judgment has been notified a stay of enforcement, dismissal or suspension of such judgment is not in effect;
(g)
If any Loan Document or material provision thereof, for reasons solely attributable to any of the Borrowers, cease to be valid, binding
and enforceable against such Borrower in accordance with the terms of such Loan Document or provision thereof; or
(h)
If any of the Borrowers or any Significant Subsidiary shall (x) (i) voluntarily commence any proceeding or file any petition seeking
liquidation, reorganization or other relief under any applicable federal, state or foreign bankruptcy, insolvency, liquidation receivership or similar law now
or hereafter in effect or (ii) take any action for the purpose of effecting the foregoing, or (y) (i) consent to the institution of, or fail to contest in a timely and
appropriate manner, any involuntary proceeding or petition of the types described in clause (x)(i) of this Section 6.01(h), (ii) apply for or consent to the
appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for such Borrower, (iii) file an answer admitting the material
allegations of a petition filed against it in any such proceeding, (iv) make a general assignment for the benefit of creditors or (v) take any action for the
purpose of effecting any of the foregoing, and, in any such case described in clauses (y)(i) through (iv) of this Section 6.01(h), such proceeding or petition
shall continue undismissed for a period of sixty (60) or more consecutive days; or
If an Event of Default described in Sections 6.01(f) or (h) has occurred and is continuing with respect to two or more Subsidiaries of any
of the Borrowers that are not Significant Subsidiaries but, considered as a whole, would meet one or more of the two requirements set forth in clauses (i)
and (ii) of the definition of “Significant Subsidiary,” then such event will be deemed to have occurred with respect to a Significant Subsidiary.
6.02
Application of Payments. Notwithstanding anything herein to the contrary, following the occurrence and during the continuance of an
Event of Default, and notice thereof to the Administrative Agent by the Borrower Representative or the Required Lenders, all payments received on
account of the Obligations shall, subject to Section 2.14, be applied by the Administrative Agent as follows:
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(i)
first, to payment of that portion of the Obligations constituting fees, indemnities, expenses and other amounts (including fees
and disbursements and other charges of counsel payable under Section 8.04 and amounts payable under the Fee Letters) payable to the
Administrative Agent in its capacity as such;
(ii)
second, to payment of that portion of the Obligations constituting fees, indemnities and other amounts (other than principal and
interest) payable to the Lenders (including fees and disbursements and other charges of counsel payable under Section 8.04) arising under the
Loan Documents, ratably among them in proportion to the respective amounts described in this clause (ii) payable to them;
(iii)
third, to payment of that portion of the Obligations constituting accrued and unpaid interest on the Loans, ratably among the
Lenders in proportion to the respective amounts described in this clause (iii) payable to them;
(iv)
fourth, to payment of that portion of the Obligations constituting unpaid principal of the Loans, ratably among the Lenders in
proportion to the respective amounts described in this clause (iv) payable to them;
(v)
fifth, to the payment in full of all other Obligations, in each case ratably among the Administrative Agent and the Lenders based
upon the respective aggregate amounts of all such Obligations owing to them in accordance with the respective amounts thereof then due and
payable; and
(vi)
sixth, the balance, if any, after all Obligations have been indefeasibly paid in full, to the Borrowers or as otherwise required by
law.
SECTION 7. THE ADMINISTRATIVE AGENT
7.01
Appointment. Each Lender hereby irrevocably designates and appoints BBVA México, S.A., Institución de Banca Múltiple, Grupo
Financiero BBVA México as the Administrative Agent of such Lender under this Agreement, and each such Lender irrevocably authorizes BBVA México,
S.A., Institución de Banca Múltiple, Grupo Financiero BBVA México, as the Administrative Agent for such Lender, to take such action on its behalf under
the provisions of this Agreement and to exercise such powers and perform such duties as are expressly delegated to the Administrative Agent by the terms
of this Agreement, together with such other powers as are reasonably incidental thereto. For such purposes, each Lender hereby appoints and authorizes the
Administrative Agent as the agent (comisionista) pursuant to the articles 273 and 274 of the Mexican Commerce Code (Código de Comercio) to execute,
deliver and perform its obligations under this Agreement and any other document, agreement or instrument related hereto.
7.02
Delegation of Duties. The Administrative Agent may execute any of its duties under this Agreement by or through sub-agents (which in
no event shall be a Restricted Person) or attorneys-in-fact (other than Restricted Persons) and shall be entitled to advice of counsel concerning all matters
pertaining to such duties. Section 7.03 shall apply to any such sub-agent or attorney-in-fact. The Administrative Agent shall not be responsible for the
negligence or misconduct of any sub-agents or attorneys-in-fact except to the extent that a court of competent
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jurisdiction determines in a final and non-appealable judgment that the Administrative Agent acted with gross negligence or willful misconduct in the
selection of such sub-agent or attorney-in-fact.
7.03
Exculpatory Provisions. (a) Notwithstanding any provision to the contrary elsewhere in this Agreement, neither the Administrative Agent
nor any of its officers, directors, employees, agents, attorneys-in-fact or Affiliates shall (i) have any duties or responsibilities, except those expressly set
forth herein (and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or otherwise exist
against the Administrative Agent); (ii) be liable for any action lawfully taken or omitted to be taken by it or such Person under or in connection with this
Agreement, or taken with the consent or at the request of the Required Lenders (except for its or such Person’s own gross negligence or willful
misconduct); (iii) to the extent not requested by the Required Lenders, be required to initiate or conduct any litigation or collection proceedings hereunder
(and shall not commence an action or proceeding on behalf of any Lender without obtaining the consent of such Lender thereto); (iv) be responsible for any
computation made in good faith in connection herewith or for any other action taken or omitted to be taken by it hereunder or under any other document or
instrument referred to or provided for herein or therein or in connection herewith or therewith, except for its or such Person’s own gross negligence or
willful misconduct; or (v) be responsible in any manner to any of the Lenders for any recitals, statements, representations or warranties made by each of the
Borrowers or any officer thereof contained in this Agreement or in any certificate, report, statement or other document referred to or provided for in, or
received by the Administrative Agent under or in connection with, this Agreement or for the value, validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or the Promissory Notes or for any failure of the Borrowers to perform its obligations hereunder.
(b)
The Administrative Agent shall not be under any obligation to any Lender to ascertain or to inquire as to (i) the observance or
performance of any of the agreements contained in, or conditions of, this Agreement, (ii) the occurrence of any default, (iii) the validity, enforceability,
effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document, or (iv) to inspect the
properties, books or records of the Borrowers, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.
(c)
The Administrative Agent shall not have any duty to take any discretionary action or exercise any discretionary power, except
discretionary rights and powers expressly contemplated by this Agreement that the Administrative Agent is required to exercise and only so long as so
directed in writing to take such discretionary action by the Required Lenders; provided, however, that the Administrative Agent shall not be required to take
any action that, in its opinion or the opinion of its counsel, may expose the Administrative Agent to liability or that is contrary to any Loan Document or
applicable law, including, for the avoidance of doubt, any action that may be in violation of the automatic stay or that may effect a forfeiture, modification
or termination of a property interest in violation of any applicable bankruptcy/insolvency laws, and the Administrative Agent shall in all cases be fully
justified in failing or refusing to act under this Agreement or any other Loan Document unless it first receives further assurances of its indemnification from
the Lenders that the Administrative Agent reasonably believes it may require, including prepayment of any related expenses and any other protection it
requires against
52
any and all costs, expenses and liabilities it may incur in taking or continuing to take any such discretionary action at the direction of the Required Lenders.
(d)
None of the provisions of this Agreement or the other Loan Documents shall be construed to require the Administrative Agent in its
individual capacity to expend or risk its own funds or otherwise to incur any personal financial liability in the performance of any of its duties hereunder or
thereunder.
(e)
The Administrative Agent shall not have any duty to disclose, and shall not be liable for the failure to disclose, except as expressly set
forth in this Agreement and in the other Loan Documents, any information relating to the Borrowers or any of its Affiliates that is communicated to or
obtained by the Administrative Agent or any of its Affiliates in any capacity.
7.04
Reliance by Administrative Agent. (a) The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying
upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, Internet or intranet
website posting or other distribution) believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons and
upon advice and statements of legal counsel (including, without limitation, counsel to the Borrowers), independent accountants and other experts selected
by the Administrative Agent, and shall not incur any liability for relying thereon. The Administrative Agent may deem and treat the payee of any
Promissory Note as the owner thereof for all purposes unless a written notice of assignment, negotiation or transfer thereof shall have been filed with the
Administrative Agent. The Administrative Agent shall be fully justified in failing or refusing to take any action under this Agreement unless it shall first
receive such advice or concurrence of the Required Lenders as it deems appropriate or it shall first be indemnified to its satisfaction by the Lenders against
any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. The Administrative Agent shall in
all cases be fully protected in acting, or in refraining from acting, under this Agreement and the Promissory Notes in accordance with a request of the
Required Lenders, and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Lenders. In determining compliance
with any condition to the making of a Loan, the Administrative Agent may presume that such condition is satisfactory to any Lender unless the
Administrative Agent receives notice to the contrary from such Lender prior to the making of such Loan. As to any matters not expressly provided for by
this Agreement, the Administrative Agent shall in all cases be fully protected in acting, or in refraining from acting, hereunder in accordance with
instructions given by the Required Lenders, and such instructions of the Required Lenders and any action taken or failure to act pursuant thereto shall be
binding on all of the Lenders.
(b)
The Administrative Agent may consult with legal counsel, independent accountants and other experts selected by it, and shall not be
liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.
7.05
Notice of Default. The Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event
of Default hereunder, except with respect to defaults in the payment of principal, interest and fees required to be paid to the Administrative Agent for the
account of the Lenders, unless the Administrative Agent has received
53
notice from a Lender or the Borrower Representative referring to this Agreement, describing such Default or Event of Default and stating that such notice is
a “notice of default” or “notice of event of default.” In the event that the Administrative Agent receives such a notice, the Administrative Agent shall
promptly give notice thereof to the Lenders. The Administrative Agent shall take such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders; provided that, unless and until the Administrative Agent shall have received such directions, the
Administrative Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable or in the best interests of the Lenders.
7.06
Non-Reliance on Administrative Agent and Other Lenders. Each Lender represents that it is engaged in making, acquiring or holding
commercial loans in the ordinary course of its business. Each Lender expressly acknowledges that neither the Administrative Agent nor any of its officers,
directors, employees, Administrative Agents, attorneys-in-fact or Affiliates has made any representations or warranties to it and that no act by the
Administrative Agent hereinafter taken, including any review of the affairs of the Borrowers, shall be deemed to constitute any representation or warranty
by the Administrative Agent to any Lender. Each Lender represents to the Administrative Agent that it has, independently and without reliance upon the
Administrative Agent or any other Lender, and based on such documents and information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and other condition and creditworthiness of the Borrowers and made its own decision to
make its Loans hereunder and enter into this Agreement. Each Lender also represents that it will, independently and without reliance upon the
Administrative Agent or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under this Agreement, and to make such investigation as it deems necessary to inform
itself as to the business, operations, property, financial and other condition and creditworthiness of the Borrowers. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the Administrative Agent hereunder, the Administrative Agent shall not have any duty or
responsibility to provide any Lender with any credit or other information concerning the business, operations, property, financial and other condition or
creditworthiness of the Borrowers which may come into the possession of the Administrative Agent or any of its officers, directors, employees,
Administrative Agents, attorneys-in-fact or Affiliates.
7.07
Indemnification by Lenders. The Lenders agree to indemnify the Administrative Agent and its officers, directors, employees, agents and
advisors, each in its capacity as such (to the extent not reimbursed by the Borrowers and without limiting the obligation of the Borrowers to do so pursuant
to Section 8.04(b)), ratably according to the respective amounts of their then-existing Commitments (or, if the Commitments have terminated, their then-
outstanding Loans), from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind whatsoever (including the reasonable fees, charges and disbursements of any counsel of any indemnified Person) which may at
any time (including without limitation at any time following the payment of the Loans) be imposed on, incurred by or asserted against the Administrative
Agent in any way relating to or arising out of this Agreement, or any documents contemplated by or referred to herein or the transactions contemplated
hereby or any action taken or omitted by the Administrative Agent under or in connection with any of the foregoing; provided that no Lender shall be liable
for the payment of
54
any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from the
Administrative Agent’s gross negligence or willful misconduct as determined by final, non-appealable order of a court of competent jurisdiction. No Person
indemnified under this Section 7.07 shall be liable for any damages arising from the use by unauthorized persons of information or other materials sent
through electronic, telecommunications or other information transmission systems that are intercepted by such persons or for any special, indirect,
consequential or punitive damages in connection with this Agreement or any other Loan Document. The agreements in this Section 7.07 shall survive the
payment of the Loans and all other amounts payable hereunder, the termination of the Commitments, the termination of this Agreement and removal of the
Administrative Agent.
7.08
Administrative Agent in Its Individual Capacity. The Administrative Agent and its Affiliates may make loans to, accept deposits from and
generally engage in any kind of business with the Borrowers as though the Administrative Agent were not the Administrative Agent hereunder. With respect
to its Loans made or renewed by it and any Promissory Note issued to it, the Administrative Agent shall have the same rights and powers under this
Agreement as any Lender and may exercise the same as though it were not the Administrative Agent, and the terms “Lender” and “Lenders” shall include
the Administrative Agent in its individual capacity.
7.09
Successor Administrative Agent. (a) The Administrative Agent may resign as administrative agent by notice to the Lenders and the
Borrower Representative, which resignation shall be effective upon thirty (30) days’ written notice, whether or not a successor has been appointed. If the
Administrative Agent resigns as Administrative Agent under this Agreement, then the Required Lenders shall appoint from among the Lenders a successor
Administrative Agent for the Lenders which successor Administrative Agent shall be approved by the Borrower Representative, whereupon such successor
Administrative Agent shall succeed to the rights, powers and duties of the Administrative Agent, and the term “Administrative Agent” shall mean such
successor Administrative Agent effective upon its appointment, and the former Administrative Agent’s rights, powers and duties as Administrative Agent
shall be terminated, without any other or further act or deed on the part of such former Administrative Agent or any of the parties to this Agreement or any
holders of the Promissory Notes (except for any indemnity payments owed to the retiring or removed Administrative Agent). In the event that the Required
Lenders fail to appoint a successor Administrative Agent within thirty (30) days after the resignation of the Administrative Agent, the Borrower
Representative shall have the right to appoint a successor Administrative Agent. In no event shall an Administrative Agent (or successor thereof) be a
Restricted Person. After any retiring Administrative Agent’s resignation hereunder as Administrative Agent, the provisions of this Section 7.09 shall inure
to its benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent under this Agreement.
(b)
Any entity into which the Administrative Agent in its individual capacity may be merged or converted or with which it may be
consolidated, or any corporation resulting from any merger, conversion or consolidations which the Administrative Agent in its individual capacity may be
party, or any corporation to which substantially all of the corporate trust or agency business of the Administrative Agent in its individual capacity may be
transferred, shall be the Administrative Agent under this Agreement without further action.
55
7.10
No Fiduciary Relationship. Use of the term “agent” in this Agreement or in any other Loan Documents (or any other similar term) with
reference to the Administrative Agent does not connote (and is not intended to connote) any fiduciary or other implied (or express) obligation arising under
agency doctrine of any applicable law. Instead, such term is used as a matter of market custom, and is intended to create or reflect only an administrative
relationship between the contracting parties. Without limiting the foregoing, none of the Lenders shall have or be deemed to have a fiduciary relationship
with any other Lender.
7.11
Obligations of Administrative Agent and Lenders. The obligations of the Administrative Agent and Lenders under this Agreement or any
other Loan Document are several and not joint. Failure by any one Lender to perform its obligations does not affect the obligations (or liability) of the
Administrative Agent or any other Lender thereunder.
7.12
Enforcement. The authority to enforce rights and remedies under this Agreement and other Loan Documents against the Borrowers shall
be vested in, and all actions and proceedings at law in connection with such enforcement shall be instituted and maintained exclusively by, the
Administrative Agent for the benefit of all the Lenders.
7.13
Compliance with Laws. The Administrative Agent shall be entitled to take any action or refuse to take any action which the
Administrative Agent regards as necessary for the Administrative Agent to comply with any applicable law, regulation or court order.
7.14
Proofs of Claim. In case of any bankruptcy or other insolvency proceeding involving the Borrowers, the Administrative Agent shall be
entitled, but not obligated, to intervene in such proceeding to (i) file and prove a claim for the whole amount of principal, interest and unpaid fees in respect
of the Loans and all other obligations that are owing and unpaid under the terms of this Agreement and other Loan Documents and to file such documents
as may be necessary or advisable in order to have the claims of the Lenders and the Administrative Agent (including any claim for reasonable
compensation, expenses, disbursements and advances of any of the foregoing entities and their respective agents, counsel and other advisors) allowed in
such proceedings; and (ii) to collect and receive any monies or other property payable or deliverable on account of any such claims and to distribute the
same to the Lenders under the terms of this Agreement. Further, any custodian, receiver, assignee, trustee, liquidator or similar official in any such
proceeding is (x) authorized to make payments or distributions in such a proceeding directly to the Administrative Agent on behalf of all of the Lenders to
whom any amounts are owed under this Agreement and other Loan Documents, unless the Administrative Agent expressly consents in writing to the
making of such payments or distributions directly to such Lenders; and (y) required to pay to the Administrative Agent any amount due for the reasonable
compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the
Administrative Agent under this Agreement and other Loan Documents.
7.15
Erroneous Payments. (a) If the Administrative Agent (x) notifies a Lender, or any Person who has received funds on behalf of a Lender
(any such Lender or other recipient (and each of their respective successors and assigns), a “Payment Recipient”) that the Administrative Agent has
determined in its sole discretion (whether or not after receipt of any notice under Section 7.15(b)) that any funds (as set forth in such notice from the
Administrative Agent) received by such Payment Recipient from the Administrative Agent or any
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of its Affiliates were erroneously or mistakenly transmitted to, or otherwise erroneously or mistakenly received by, such Payment Recipient (whether or not
known to such Lender or other Payment Recipient on its behalf) (any such funds, whether transmitted or received as a payment, prepayment or repayment
of principal, interest, fees, distribution or otherwise, individually and collectively, an “Erroneous Payment”) and (y) demands in writing the return of such
Erroneous Payment (or a portion thereof), such Erroneous Payment shall at all times remain the property of the Administrative Agent pending its return or
repayment as contemplated below in this Section 7.15 and held in trust for the benefit of the Administrative Agent, and such Lender shall (or, with respect
to any Payment Recipient who received such funds on its behalf, shall cause such Payment Recipient to) promptly, but in no event later than two Business
Days thereafter (or such later date as the Administrative Agent may, in its sole discretion, specify in writing), return to the Administrative Agent the amount
of any such Erroneous Payment (or portion thereof) as to which such a demand was made, in same day funds (in the currency so received), together with
interest thereon (except to the extent waived in writing by the Administrative Agent) in respect of each day from and including the date such Erroneous
Payment (or portion thereof) was received by such Payment Recipient to the date such amount is repaid to the Administrative Agent in same day funds at
the greater of the Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank
compensation from time to time in effect. A notice of the Administrative Agent to any Payment Recipient under this clause (a) shall be conclusive, absent
manifest error.
(b)
Without limiting Section 7.15(a), each Lender or any Person who has received funds on behalf of a Lender (and each of their
respective successors and assigns), agrees that if it receives a payment, prepayment or repayment (whether received as a payment, prepayment or
repayment of principal, interest, fees, distribution or otherwise) from the Administrative Agent (or any of its Affiliates) (x) that is in a different amount
than, or on a different date from, that specified in this Agreement or in a notice of payment, prepayment or repayment sent by the Administrative Agent (or
any of its Affiliates) with respect to such payment, prepayment or repayment, (y) that was not preceded or accompanied by a notice of payment,
prepayment or repayment sent by the Administrative Agent (or any of its Affiliates), or (z) that such Lender or other such recipient, otherwise becomes
aware was transmitted, or received, in error or by mistake (in whole or in part), then in each such case:
(i) it acknowledges and agrees that (A) in the case of immediately preceding clauses (x) or (y), an error and mistake shall be
presumed to have been made (absent written confirmation from the Administrative Agent to the contrary) or (B) an error and mistake has been made (in the
case of immediately preceding clause (z)), in each case, with respect to such payment, prepayment or repayment; and
(ii)
such Lender shall use commercially reasonable efforts to (and shall use commercially reasonable efforts to cause any
other recipient that receives funds on its respective behalf to) promptly (and, in all events, within one Business Day of its knowledge of the occurrence of
any of the circumstances described in immediately preceding clauses (x), (y) and (z)) notify the Administrative Agent of its receipt of such payment,
prepayment or repayment, the details thereof (in reasonable detail) and that it is so notifying the Administrative Agent pursuant to this Section 7.15(b).
57
For the avoidance of doubt, the failure to deliver a notice to the Administrative Agent pursuant to this Section 7.15(b) shall not have any effect on
a Payment Recipient’s obligations pursuant to Section 7.15(a) or on whether or not an Erroneous Payment has been made.
(c)
Each Lender hereby authorizes the Administrative Agent to set off, net and apply any and all amounts at any time owing to such
Lender under any Loan Document, or otherwise payable or distributable by the Administrative Agent to such Lender under any Loan Document with
respect to any payment of principal, interest, fees or other amounts, against any amount that the Administrative Agent has demanded to be returned under
Section 7.15(a).
(d)
The parties hereto agree that (x) irrespective of whether the Administrative Agent may be equitably subrogated, in the event that
an Erroneous Payment (or portion thereof) is not recovered from any Payment Recipient that has received such Erroneous Payment (or portion thereof) for
any reason, the Administrative Agent shall be subrogated to all the rights and interests of such Payment Recipient (and, in the case of any Payment
Recipient who has received funds on behalf of a Lender, to the rights and interests of such Lender) under the Loan Documents with respect to such amount
(the “Erroneous Payment Subrogation Rights”) and (y) an Erroneous Payment shall not pay, prepay, repay, discharge or otherwise satisfy any Obligations
owed by any Loan Party; provided that this Section 7.15 shall not be interpreted to increase (or accelerate the due date for), or have the effect of increasing
(or accelerating the due date for), the Obligations of the Borrowers relative to the amount (and/or timing for payment) of the Obligations that would have
been payable had such Erroneous Payment not been made by the Administrative Agent; provided, further, that for the avoidance of doubt, immediately
preceding clauses (x) and (y) shall not apply to the extent any such Erroneous Payment is, and solely with respect to the amount of such Erroneous
Payment that is, comprised of funds received by the Administrative Agent from or on behalf of (including through the exercise of remedies under any Loan
Document), the Borrowers for the purpose of a payment on the Obligations.
(e) To the extent permitted by applicable law, no Payment Recipient shall assert any right or claim to an Erroneous Payment, and hereby
waives, and is deemed to waive, any claim, counterclaim, defense or right of set-off or recoupment with respect to any demand, claim or counterclaim by
the Administrative Agent for the return of any Erroneous Payment received, including, without limitation, any defense based on “discharge for value” or
any similar doctrine.
(f) Each party’s obligations, agreements and waivers under this Section 7.15 shall survive the resignation or replacement of the
Administrative Agent, any transfer of rights or obligations by, or the replacement of, a Lender, the termination of the applicable Commitments or the
repayment, satisfaction or discharge of all Obligations (or any portion thereof) under any Loan Document.
SECTION 8. MISCELLANEOUS
8.01
Amendments and Waivers. Neither this Agreement, any Promissory Note, nor any terms hereof or thereof may be amended,
supplemented or modified except in accordance with the provisions of this Section 8.01. With the written consent of the Required Lenders, the
Administrative Agent and the Borrowers may, from time to time, enter into written amendments,
58
supplements or modifications hereto for the purpose of adding any provisions to this Agreement or the Promissory Notes or changing in any manner the
rights of the Lenders or of the Borrowers hereunder or thereunder or waiving, on such terms and conditions as the Administrative Agent may specify in
such instrument, any of the requirements of this Agreement or the Promissory Notes or any Default or Event of Default and its consequences; provided,
however, that no such waiver and no such amendment, supplement or modification shall:
(a)
without the consent of each Lender directly affected thereby:
(i)
extend or increase any Commitment of any Lender (it being understood that a waiver of any condition precedent set forth in
Section 3 or the waiver of any Default shall not constitute an extension or increase of any Commitment);
(ii)
reduce the principal of, or rate of interest specified herein on, any Loan, or any fees or other amounts payable hereunder or under
any other Loan Document; or
(iii)
postpone any date scheduled for any payment of principal of, or interest on, any Loan, or any fees or other amounts payable
hereunder or under any other Loan Document, or reduce the amount of, waive or excuse any such payment; or
(b)
without the written consent of all the Lenders:
(i)
amend, modify or waive any provision of this Section 8.01,
(ii)
reduce the percentage specified in the definition of Required Lenders or modify the definition of “Required Lenders”,
(iii)
change the currency of any Loan,
(iv)
consent to the assignment or transfer by a Borrower of any of its rights and obligations under this Agreement or add a co-
borrower, except wholly-owned Subsidiaries of the Parent Borrower, provided that such Borrower shall remain liable for its obligations under this
Agreement and provided, further that to the extent consent of any Lender to such assignment or transfer is required by applicable law as
determined in its reasonable discretion (but only to such extent), the consent of such Lender is obtained, which consent shall not be unreasonably
withheld or delayed,
(v)
change Section 2.12 in a manner that would alter the pro rata sharing of payments required thereby,
(vi)
impose any greater restriction than those set forth in Section 8.05 on the ability of any Lender to assign its rights or obligations
under the Loan Documents; or
(vii)
amend, modify or waive any provision of Section 2.05;
provided, further, that no such amendment, waiver or consent shall amend, modify or otherwise affect the rights or duties hereunder or under any other
Loan Document of the Administrative
59
Agent, unless in writing executed by the Administrative Agent, in addition to the Borrowers and the Lenders required above.
Notwithstanding anything herein to the contrary, no Defaulting Lender shall have any right to approve or disapprove any amendment,
waiver or consent hereunder (and any amendment, waiver or consent that by its terms requires the consent of all the Lenders or each affected Lender may
be effected with the consent of the applicable Lenders other than Defaulting Lenders), except that (x) the Commitment of any Defaulting Lender may not
be increased or extended, or the maturity of any of its Loan may not be extended, the rate of interest on any of its Loans may not be reduced and the
principal amount of any of its Loans may not be forgiven, in each case without the consent of such Defaulting Lender and (y) any amendment, waiver or
consent requiring the consent of all the Lenders or each affected Lender that by its terms affects any Defaulting Lender more adversely than the other
affected Lenders shall require the consent of such Defaulting Lender.
In the case of any waiver, the Borrowers, the Lenders and the Administrative Agent shall be restored to their former position and rights
hereunder and under the outstanding Promissory Notes, and any Default or Event of Default waived shall be deemed to be cured and not continuing; but no
such waiver shall extend to any subsequent or other Default or Event of Default, or impair any right consequent thereon.
Notwithstanding the foregoing, the Administrative Agent, with the prior written consent of the Borrowers, may amend, modify or
supplement any Loan Document without the consent of any Lender or the Required Lenders in order to correct, amend or cure any ambiguity,
inconsistency, omission, defect or error in any Loan Document and such amendment shall become effective without any further action or consent of any
other party to any Loan Document if the same is not objected to in writing by the Required Lenders within ten (10) Business Days following receipt of
notice thereof.
8.02
Notices. All notices, requests and demands to or upon the respective parties hereto to be effective shall be in writing, and, unless
otherwise expressly provided herein, shall be deemed to have been duly given or made when delivered by hand (with a receipt of delivery obtained), or
one (1) Business Day after being delivered by an overnight courier service, or, in the case of email, one (1) Business Day after being sent, with telephonic
notice confirming delivery, addressed (i) in the case of notices, requests and demands to or upon the Borrowers, the Borrower Representative and the
Administrative Agent, as set forth below and (ii) in the case of notices, requests and demands to or upon any Lender, as set forth in an administrative
questionnaire delivered by such Lender to the Administrative Agent, or, in each case, to such other address as may be hereafter notified by the respective
parties hereto:
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The Borrowers and
Borrower Representative:
c/o Grupo Televisa, S.A.B.
Avenida Vasco de Quiroga No. 2000
Colonia Santa Fe, 01210
Ciudad de México, Mexico
Telephone: +52 (55) 5261-2000
Attn: Carlos Phillips Margain
Email: cphillipsm@televisa.com.mx
Pablo Camacho Gutiérrez
Email: pcamachog@televisa.com.mx
Luis Alejandro Bustos Olivares
Email: labustoso@televisa.com.mx
with a copy to:
Fried Frank Harris Shriver & Jacobson LLP
One New York Plaza
New York, New York 10004
Attn: Stewart Kagan, Esq.; Ezra Schneck, Esq.
Telephone: +1 (212) 859-8550; +1 (212) 859 8764
Email: Stewart.Kagan@friedfrank.com;
Ezra.Schneck@friedfrank.com
The Administrative Agent:
BBVA México, S.A., Institución de Banca Múltiple, Grupo
Financiero BBVA México
Paseo de la Reforma 510, Piso 16, Juárez, Cuauhtémoc,
Ciudad de México, C.P. 06600
Attn: Jorge Santiago
Telephone: +52 55 5201 2063
Email: monitoring_group.mx@bbva.com
8.03
No Waiver; Cumulative Remedies. No failure to exercise and no delay in exercising, on the part of the Administrative Agent or any
Lender, any right, remedy, power or privilege hereunder, shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.
8.04
Payment of Expenses; Indemnity. (a) The Borrowers agree (i) to pay or reimburse the Administrative Agent for all its reasonable,
documented and pre-approved (which approval shall not be unreasonably withheld, provided that the failure of the Borrower Representative to respond to a
written request for approval (to the extent duly notified in accordance with Section 8.02) within five (5) Business Days thereafter shall be deemed to
constitute approval) out-of-pocket costs and expenses incurred in connection with the development, preparation and execution of, and any amendment
(other than any amendment made at the request of the Administrative Agent or any Lender), supplement or modification to, the Loan Documents and any
other documents prepared in connection herewith, and the consummation of the transactions
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contemplated hereby and thereby, including, without limitation, the reasonable, documented and pre-approved (which approval shall not be unreasonably
withheld, provided that the failure of the Borrower Representative to respond to a written request for approval (to the extent duly notified in accordance
with Section 8.02) within five (5) Business Days thereafter shall be deemed to constitute approval) out-of-pocket fees and disbursements of counsel to the
Administrative Agent and third party vendors retained with the consent of the Borrower Representative, and (ii) to pay or reimburse each Lender and the
Administrative Agent for all their reasonable and documented out-of-pocket costs and expenses incurred in connection with the enforcement, protection or
preservation of any rights (A) under the Loan Documents and any Related Agreements or (B) in connection with the Loans made hereunder, in either case
including, without limitation, reasonable and documented out-of-pocket fees and disbursements of a single firm of counsel to the Administrative Agent and
to the several Lenders and if necessary, one firm of local counsel in each appropriate jurisdiction and one firm of special counsel in each appropriate
specialty (and, in the case of an actual or perceived conflict of interest where the Person affected by such conflict informs the Borrower Representative of
such conflict and thereafter retains its own counsel, of one additional firm of counsel for all such affected Persons, including one such local counsel in each
appropriate jurisdiction and one special counsel in each appropriate specialty).
(b)
The Borrowers will indemnify each of the Administrative Agent and the Lenders and their respective Affiliates and the directors, officers,
employees, advisors and agents thereof (any of the foregoing, an “Indemnified Person”) against and hold each Indemnified Person harmless from any and
all losses, claims, damages, liabilities and expenses, including without limitation all reasonable and documented out-of-pocket fees, charges and
disbursements of a single firm of counsel to all Indemnified Persons and if necessary, one firm of local counsel in each appropriate jurisdiction and one
firm of special counsel in each appropriate specialty (and, in the case of an actual or perceived conflict of interest where the Indemnified Person affected by
such conflict informs the Borrower Representative of such conflict and thereafter retains its own counsel, of one additional firm of counsel for all such
affected Indemnified Persons, including one such local counsel in each appropriate jurisdiction and one special counsel in each appropriate specialty)
which an Indemnified Person may incur or which may be asserted against it arising out of, in connection with, or as a result of (i) the execution or delivery
of this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, (ii) the use or proposed use of the proceeds
of the Loans, or (iii) any actual or prospective claim, litigation, investigation or proceeding relating to this Agreement, any Loan Document, any Related
Agreement, any agreement contemplated hereby or thereby or the performance of the parties of the transactions contemplated hereby or thereby, whether
based on contract, tort or any other theory, whether brought by a third party or by the Borrowers, and regardless of whether any Indemnified Person is a
party thereto; provided that such indemnity shall not, as to any Indemnified Person, be available to the extent that such losses, claims, damages, liabilities
or related expenses (x) are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence
or willful misconduct of such Indemnified Person, (y) result from a claim brought by a Borrower against an Indemnified Person for breach in bad faith of
such Indemnified Person’s obligations hereunder or under any other Loan Document or any Related Agreement, or applicable law, if a Borrower has
obtained a final and nonappealable judgment in its favor on such claim as determined by a court of competent jurisdiction or (z) result from a claim not
involving an act or omission of a Borrower or any of its Subsidiaries and that is
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brought by an Indemnified Person against another Indemnified Person (other than against the arranger or the Administrative Agent in their capacities as
such). No Indemnified Person shall be liable for any damages arising from the use by unauthorized persons of information or other materials sent through
electronic, telecommunications or other information transmission systems that are intercepted by such persons or for any special, indirect, consequential or
punitive damages in connection with this Agreement or any other Loan Document. This clause (b) shall not apply with respect to Taxes other than any
Taxes that represent losses, claims, damages, etc. arising from any non-Tax claim.
The agreements in this Section 8.04(b) shall survive the payment of the Loans and all other amounts payable hereunder, the termination
of the Commitments, the termination of this Agreement and removal of the Administrative Agent.
8.05
Successors and Assigns; Participations; Purchasing Lenders.
(a)
This Agreement shall be binding upon and inure to the benefit of the Borrowers, the Lenders, the Administrative Agent and their
respective successors and permitted assigns, except that the Borrowers may not assign or transfer any of their rights or obligations under this Agreement
without the prior written consent of the Administrative Agent and each Lender unless (x) such transfer or assignment is made to a wholly-owned Subsidiary
of the Parent Borrower, such Borrower remains jointly liable with such assignee or transferee and such assignee or transferee is an Approved Borrower and
(y) to the extent consent of any Lender to such assignment or transfer is required by applicable law as determined in its reasonable discretion (but only to
such extent), the consent of such Lender is obtained, which consent shall not be unreasonably withheld, conditioned or delayed.
(b)
Any Lender may, in accordance with applicable law, at any time sell to any Person (other than to a Restricted Person, a Borrower, or a
Defaulting Lender, or any of their respective Affiliates and Subsidiaries) (the “Participants”) participating interests in any Loans owing to such Lender, any
Promissory Notes held by such Lender, any Commitments of such Lender and/or any other interests of such Lender hereunder and under the other Loan
Documents, subject to the consent of the Borrower Representative in writing (not to be unreasonably withheld, it being understood that it is reasonable for
the Borrower Representative to withhold consent if a Borrower would be required to pay any additional amount or indemnity payment in respect of Taxes
(other than Mexican withholding Taxes) to any Lender or Participant or any Governmental Authority for the account of any Lender or Participant pursuant
to Section 2.11); provided that the Borrower Representative consent shall not be required if (x) an Event of Default has occurred and is continuing at the
time of such sale (it being understood that the sale of participating interests to Restricted Persons remains prohibited even after the occurrence of an Event
of Default), or (y) such sale is to a Lender or an Affiliate of a Lender. In the event of any such sale by a Lender of a participating interest to a Participant,
such Lender’s obligations under this Agreement to the other parties under this Agreement shall remain unchanged, such Lender shall remain solely
responsible for the performance thereof, such Lender shall remain the holder of any such Promissory Notes for all purposes under this Agreement, and the
Borrowers and the Administrative Agent shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations
under this Agreement and under the other Loan Documents. The Borrowers agree that if amounts outstanding under this Agreement and the Promissory
Notes are due or unpaid, or shall
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have been declared or shall have become due and payable upon the occurrence of an Event of Default, each Participant shall be deemed to have the right of
offset in respect of its participating interest in amounts owing under this Agreement and any Promissory Notes to the same extent as if the amount of its
participating interest were owing directly to it as a Lender under this Agreement or any Promissory Notes, provided that such right of offset shall be subject
to the obligation of such Participant to share with the Lenders, and the Lenders agree to share with such Participant, as provided in Section 8.06. The
Borrowers also agree that each Participant shall be entitled to the benefits of, and subject to the limitations of, Sections 2.09, 2.10 and 2.11 with respect to
its participation in the Commitments and the Loans outstanding from time to time; provided that no Participant shall be entitled to receive any greater
amount pursuant to such subsections than the transferor Lender would have been entitled to receive in respect of the amount of the participation transferred
by such transferor Lender to such Participant had no such transfer occurred, except to the extent such entitlement to receive a greater amount results from a
Change in Tax Law that occurs after the Participant acquired the applicable participation. Each Participant agrees to be subject to the provisions of
Section 2.13 as if it were a Purchasing Lender under clause (c) of this Section 8.05, and each Lender that sells a participation agrees, at any Borrower’s
request and expense, to use reasonable efforts to cooperate with such Borrower to effectuate the provisions of Section 2.13 with respect to any Participant.
No Participant shall be entitled to the benefits of Section 2.11 unless such Participant complies with Section 2.11(f) (it being understood that the
documentation required under Section 2.11(f) shall be delivered to the participating Lender) to the same extent as if it were a Lender and had acquired its
interest by assignment pursuant to clause (c) of this Section 8.05, and no Participant shall be entitled to consent to any amendment, supplement,
modification or waiver of or to this Agreement or any Promissory Note, unless the same is an amendment, supplement, modification or waiver described in
clause (a) of the proviso to Section 8.01 which requires the consent of the Lender from which it purchased its participation (in which case the participation
agreement may provide that such Lender must obtain the participant’s consent before approving any such amendment, supplement, modification or waiver).
Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the Borrowers, maintain a register on which it enters
the name and address of each Participant and the principal amounts (and stated interest) of each Participant’s interest in the Loans, Promissory Notes,
Commitments and/or any other interests of such Lender hereunder and under the other Loan Documents (the “Participant Register”); provided that no
Lender shall have any obligation to disclose all or any portion of the Participant Register to any Person (including the identity of any Participant or any
information relating to a Participant’s interest in any Loans, Promissory Notes, Commitments and/or any other interests of such Lender hereunder and
under the other Loan Documents) except to the extent that such disclosure is (i) necessary to establish that such Loans, Promissory Notes, Commitment or
other interest is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations or (ii) otherwise required by law or any
Governmental Authority (in which case such Lender shall give the Borrower Representative prior written notice of such disclosure requirement, to the
extent practicable and permitted by law or regulation) or (iii) to assure the Borrowers that no Restricted Person is holding or has any beneficial interest in
such participation. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender and the Administrative Agent shall
treat each person whose name is recorded in the Participant Register pursuant to the terms hereof as the owner of such participation for all purposes of this
Agreement.
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(c)
Any Lender may, in accordance with applicable law, at any time assign or sell to any Person (other than to a Restricted Person, a natural
person, a Borrower or a Defaulting Lender, or any of their respective Affiliates or Subsidiaries of a Restricted Person or a Defaulting Lender) (the
“Purchasing Lenders”) all or any part of its rights and/or obligations under this Agreement and the Promissory Notes (including all or a portion of its
Commitment and the Loans at the time owing to it) pursuant to an Assignment and Assumption Agreement, executed by such Purchasing Lender, such
transferor Lender and the Administrative Agent and, when applicable, consented to by the Borrower Representative; provided that the consent of the
Borrower Representative in writing (such consent not to be unreasonably withheld) shall be required unless (x) an Event of Default has occurred and is
continuing at the time of such assignment (it being understood that assignments to Restricted Persons remain prohibited even after the occurrence of an
Event of Default), or (y) such assignment is to a Lender or an Affiliate of a Lender and the transferor Lender has provided prior written notice to the
Borrower Representative and the Administrative Agent at least ten (10) days in advance of the transfer; and provided, further, that (i) except in the case of
an assignment or sale of the entire remaining amount of the assigning Lender’s Commitments or Loans, the amount of the Commitments purchased by such
Purchasing Lender that is not then a Lender or an Affiliate of a Lender shall be equal to or greater than the Peso Equivalent of US$5,000,000, and an
amount that is an integral multiple of the Peso Equivalent of US$1,000,000 thereafter, and (ii) the transferor Lender which has transferred less than all of its
Loans and Commitments to any such Purchasing Lender shall retain a minimum Commitment, after giving effect to such sale, equal to or greater than the
Peso Equivalent of US$10,000,000. Upon (i) execution of such Assignment and Assumption Agreement, (ii) delivery of (x) an executed copy thereof to the
Borrower Representative and (y) any applicable documentation required pursuant to Section 2.11(f) to the Borrower Representative and Administrative
Agent, and (iii) payment by such Purchasing Lender, such Purchasing Lender shall for all purposes be a Lender party to this Agreement and shall have all
the rights and obligations of a Lender under this Agreement, to the same extent as if it were an original party hereto with the Applicable Percentage of the
Commitments and/or Loans set forth in such Assignment and Assumption Agreement. Such Assignment and Assumption Agreement shall be deemed to
amend this Agreement to the extent, and only to the extent, necessary to reflect the addition of such Purchasing Lender and the resulting adjustment of
Applicable Percentages arising from the purchase by such Purchasing Lender of all or a portion of the rights and obligations of such transferor Lender
under this Agreement and the Promissory Notes. Upon the consummation of any transfer to a Purchasing Lender, pursuant to this Section 8.05(c), the
transferor Lender, the Administrative Agent and the applicable Borrowers shall make appropriate arrangements so that, if required, replacement Promissory
Notes are issued to such transferor Lender and new Promissory Notes or, as appropriate, replacement Promissory Notes, are issued to such Purchasing
Lender, in each case in principal amounts reflecting their Applicable Percentages in exchange and after simultaneous delivery of the then existing
Promissory Notes or, as appropriate, their outstanding Loans as adjusted pursuant to such Assignment and Assumption Agreement.
(d)
The Administrative Agent shall maintain at its address referred to in Section 8.02 a copy of each Assignment and Assumption Agreement
delivered to it and, acting solely for this purpose as a non-fiduciary agent of the Borrowers, a register (the “Register”) for the recordation of the names and
addresses of the Lenders and the Commitment of, and principal amount (and stated interest) of the Loans owing to, each Lender from time to time. The
entries in the Register
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shall be conclusive, in the absence of manifest error, and the Borrowers, the Administrative Agent and the Lenders shall treat each Person whose name is
recorded in the Register as the owner of the Loan recorded therein for all purposes of this Agreement. The Register shall be available for inspection by the
Borrowers, Borrower Representative or any Lender at any reasonable time and from time to time upon reasonable prior notice.
(e)
Upon its receipt of an Assignment and Assumption Agreement executed by a transferor Lender, a Purchasing Lender, the Borrower
Representative, and the Administrative Agent, and, if applicable, consented to by the Administrative Agent, together with payment to the Administrative
Agent of a registration and processing fee of US$3,500 (which the Administrative Agent may, in its sole discretion, elect to waive), the Administrative
Agent shall (i) promptly accept such Assignment and Assumption Agreement and (ii) on the Transfer Effective Date determined pursuant thereto record the
information contained therein in the Register and give notice of such acceptance and recordation to the Lenders and the Borrower Representative.
(f)
Subject to the prior written consent of the Parent Borrower only in the case of non-public information (such consent not to be
unreasonably withheld), the Parent Borrower authorizes each Lender to disclose to any Eligible Transferee and any prospective Eligible Transferee any and
all financial information in such Lender’s possession concerning any Borrower which has been delivered to such Lender by the Parent Borrower pursuant
to this Agreement or which has been delivered to such Lender by the Parent Borrower in connection with such Lender’s credit evaluation of the Parent
Borrower prior to entering into this Agreement so long as such Eligible Transferee agrees to comply with confidentiality provisions substantially the same
as Section 8.11.
(g)
Each Lender shall have the right, subject to the prior consent of the Borrower Representative (not to be unreasonably withheld), to assign
as security all or part of its rights under the Loan Documents to any third party lender to it (except for Restricted Persons), including the U.S. Federal
Reserve Bank, provided that the consent of the Borrower Representative shall not be required while an Event of Default has occurred and is continuing (it
being understood that assignments to Restricted Persons remain prohibited even after the occurrence of an Event of Default). No assignment shall release
such Lender from any of its obligations hereunder or substitute any such assignee for such Lender as a party hereto.
(h)
No transfer, assignment or sale of rights hereunder or participating interests by any party hereto shall be permitted except as permitted by
this Section 8.05 and any such transfer, assignment, sale of rights or participating interests that is not made in accordance with this Section 8.05 shall be
null and void.
(i)
Any transfer, assignment or sale of rights hereunder or participating interests by any party hereto will be subject to contractual
recognition by the assignee or transferee of the Bail-In Legislation and Bail-In Action, as applicable.
8.06
Adjustments; Set-off. (a) Except to the extent that this Agreement or a court order provides for payments to be allocated to a particular
Lender or Lenders, if any Lender (a “Benefitted Lender”) shall at any time receive any payment of all or part of its Loans or the reimbursement obligations
owing to it, or interest thereon, or receive any collateral in respect thereof (whether voluntarily or involuntarily, by offset, pursuant to events or proceedings
of the
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nature referred to in Sections 6.01(h), or otherwise) in a greater proportion than any such payment to and collateral received by any other Lender, if any, in
respect of such other Lender’s Loans or the reimbursement obligations owing to it, or interest thereon, such Benefitted Lender shall purchase for cash from
the other Lenders such portion of each such other Lender’s Loans or the reimbursement obligations then owing to it, or shall provide such other Lenders
with the benefits of any such collateral, or the proceeds thereof, as shall be necessary to cause such Benefitted Lender to share the excess payment or
benefits of such collateral or proceeds ratably with each of the Lenders; provided, however, that if all or any portion of such excess payment or benefits is
thereafter recovered from such Benefitted Lender, such purchase shall be rescinded, and the purchase price and benefits returned, to the extent of such
recovery, but without interest. The Borrowers agree that each Lender so purchasing a portion of another Lender’s Loan may exercise all rights of a payment
(including, without limitation, rights of offset) with respect to such portion as fully as if such Lender were the direct holder of such portion.
(b)
In addition to any rights and remedies of the Lenders provided by law, at any time when an Event of Default has occurred and is
continuing, each Lender shall have the right, with reasonable prior notice to the Borrower Representative, upon any amount becoming due and payable by
the Borrowers hereunder (whether at the stated maturity, by acceleration or otherwise), to set off and appropriate and apply against such amount any and all
deposits (general or special, time or demand, provisional or final), in any currency, and any other credits, indebtedness or claims, in any currency, in each
case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by such Lender, its Affiliates or any branch or
agency thereof to or for the credit or the account of any of the Borrowers, as the case may be. Each Lender agrees promptly to notify the Borrower
Representative and the Administrative Agent after any such setoff and application made by such Lender, provided that the failure to give such notice shall
not affect the validity of such setoff and application.
8.07
Counterparts. This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts
and all of said counterparts taken together shall be deemed to constitute one and the same instrument. This Agreement and any of its amendments or
assignments may be executed by electronic means (including, without limitation, “pdf”). Delivery by electronic means (including, without limitation,
“pdf”) of an executed counterpart of a signature page to this Agreement shall be effective as delivery of an original executed counterpart of this Agreement.
A set of the copies of this Agreement signed by all the parties shall be lodged with the Borrower Representative and the Administrative Agent.
8.08
GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES ARISING OUT OF OR
RELATING TO THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW
OF THE STATE OF NEW YORK.
8.09
WAIVERS OF JURY TRIAL. EACH BORROWER, THE ADMINISTRATIVE AGENT AND THE LENDERS EACH HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS
AGREEMENT, THE PROMISSORY NOTES OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
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8.10
Submission to Jurisdiction; Appointment of Agent to Accept Service of Process. (a) Each party hereto hereby:
(i)
irrevocably and unconditionally submits, for itself and its property, (x) in any legal action or proceeding arising out of or relating
to the Transactions or arising out of or relating to the performance of services under, and the interpretation, enforcement of and compliance with,
this Agreement and all other Loan Documents (other than the Promissory Notes) or for recognition and enforcement of any judgment in respect
thereof, to the exclusive jurisdiction of the Supreme Court of the State of New York, New York County, located in the Borough of Manhattan, and
the U.S. District Court for the Southern District of New York, located in the Borough of Manhattan, and, in each case, any relevant appellate
courts thereof, or (y) in any legal action or proceeding under any Promissory Note, or for recognition and enforcement of any judgment in respect
thereof, to the exclusive jurisdiction of the competent federal courts located in Mexico City, Mexico; and
(ii)
consents that any such action or proceeding may be brought in such courts, and waives any objection that it may now or
hereafter have to the venue of any such action or proceeding in any such court or that such action or proceeding was brought in an inconvenient
court and agrees not to plead or claim the same and expressly waives any other jurisdiction to which it may otherwise be entitled by virtue of
present or future domicile or otherwise.
(b)
Each of the Borrowers hereby designates, appoints and empowers CT Corporation System (the “Process Agent”), with offices currently at
28 Liberty Street, New York, New York 10005, as its designee, appointee and agent to receive and accept for and on its behalf, and its properties, assets and
revenues, service of any and all legal process, summons, notices and documents that may be served in any action, suit or proceeding brought against it in
any New York Court with respect to its obligations, liabilities or any other matter arising out of or in connection with the Transaction and any Loan
Documents and that may be made on the Process Agent in accordance with legal procedures prescribed for such courts. If for any reason the Process Agent
shall cease to be available to act as such, then each Borrower agrees to designate a new designee, appointee and agent in The City of New York on the
terms and for the purposes of this Section 8.10 reasonably satisfactory to the Administrative Agent. Each of the Borrowers further hereby irrevocably
consents and agrees to the service of any and all legal process, summons, notices and documents in any such action, suit or proceeding by serving a copy
thereof upon the Process Agent (whether or not the appointment of such Process Agent shall for any reason prove to be ineffective or such agent shall
accept or acknowledge such service). Each of the Borrowers agrees that the failure of the Process Agent to give any notice of such service to them shall not
impair or affect in any way the validity of such service or any judgment rendered in any action or proceeding based thereon. Nothing herein shall in any
way be deemed to limit the ability of the Borrowers, Administrative Agent and the Lenders to serve any such legal process, summons, notices and
documents in any other manner permitted by applicable law.
8.11
Confidentiality of Information. Each Lender acknowledges that some of the information furnished to such Lender pursuant to this
Agreement may be received by such Lender prior to the time such information shall have been made public, and each Lender agrees that it will keep all
such non-public information so furnished confidential and shall make no use of such non-
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public information until it shall have become public, except (a) in connection with matters involving operations under or enforcement of this Agreement or
the Promissory Notes, (b) in accordance with each Lender’s obligations under law or regulation or to the extent required by applicable law, or pursuant to
subpoenas or other process to make information available to governmental or regulatory agencies and examiners or to others (in which case such Lender
shall provide prior written notice of such obligations, to the extent practicable and permitted by law or regulation), (c) to each Lender’s Affiliates,
employees, agents, directors, officers, representatives and service providers (including accountants, legal counsel and other advisors) only on a need-to-
know basis, to the extent such Persons (i) are informed of the confidential nature of such information, (ii) are instructed to keep such information
confidential and (iii) have a need to know such information, (d) subject to obtaining the prior approval of the Borrower Representative pursuant to
Section 8.05(f), to Eligible Transferees and prospective Eligible Transferees and to direct or indirect counterparties in connection with swaps or derivatives
so long as such Persons agree to be bound by confidentiality provisions substantially the same as this Section 8.11 (which in any case shall exclude
Restricted Persons), (e) with the prior written consent of the Borrower Representative, (f) to the Administrative Agent, any other Lender or Affiliate thereof
(to the extent such Affiliates are informed of the confidential nature of such information and are instructed to keep such information confidential), (g) if
requested or required to do so in connection with any litigation or similar proceeding (in which case such Lender shall promptly notify the Borrower
Representative, in advance, to the extent practicable and permitted by law or regulation), (h) that has been publicly disclosed other than by reason of
disclosure by such Lender or its Affiliates, officer, directors, employees, Administrative Agents or representatives in breach of this Section 8.11, (i) in
connection with the exercise of any remedy hereunder or under any other Loan Document, or (j) on a confidential basis to the CUSIP Service Bureau or
any similar agency in connection with the issuance and monitoring of CUSIP numbers with respect to the Loans.
8.12
USA Patriot Act. The Administrative Agent and each Lender hereby notifies the Borrowers that pursuant to the requirements of the USA
Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Patriot Act”), it is required to obtain, verify and record information that
identifies the Borrowers, which information includes the name and address of each Borrower and other information that will allow such Lender to identify
the Borrowers in accordance with the Patriot Act. Each Borrower shall, promptly following a request by the Administrative Agent or any Lender, provide
all documentation and other information that the Administrative Agent or such Lender reasonably requests and that is required to comply with its ongoing
obligations under applicable “know your customer” and anti-money laundering rules and regulations, including the Patriot Act.
8.13
Conversion of Currencies. (a) The Borrowers’ obligations hereunder and under the other Loan Documents to make payments in the
respective applicable currency which under this Agreement is Pesos (the “Obligation Currency”) shall not be discharged or satisfied by any tender or
recovery pursuant to any judgment expressed in or converted into any currency other than the Obligation Currency, except to the extent that such tender or
recovery results in the effective receipt by the Administrative Agent or the respective Lender of the full amount of the Obligation Currency expressed to be
payable to the Administrative Agent or such Lender under this Agreement or the other Loan Documents. If for the purpose of obtaining or enforcing
judgment against any of the Borrowers in any court or in any jurisdiction, it becomes necessary to convert into or from any currency other than the
Obligation Currency (such other currency being
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hereinafter referred to as the “Judgment Currency”) an amount due in the Obligation Currency, the conversion shall be made pursuant to Section 1.05, as of
the day on which the judgment is given (such Business Day being hereinafter referred to as the “Judgment Currency Conversion Date”).
(b)
If there is a change in the rate of exchange prevailing between the Judgment Currency Conversion Date and the date of actual payment of
the amount due, the Borrowers agree to pay, or cause to be paid, such additional amounts, if any (but in any event not a lesser amount) as may be necessary
to ensure that the amount paid in the Judgment Currency, when converted at the rate of exchange prevailing on the date of payment, will produce the
amount of the Obligation Currency which could have been purchased with the amount of Judgment Currency stipulated in the judgment or judicial award at
the rate or exchange prevailing on the Judgment Currency Conversion Date.
(c)
For purposes of determining the applicable rate of exchange for this Section 8.13, such amounts shall include any premium and costs
payable in connection with the purchase of the Obligation Currency.
8.14
Acknowledgement and Consent to Bail-In of Affected Financial Institutions. Notwithstanding anything to the contrary in any Loan
Document or in any other agreement, arrangement or understanding among any such parties, each party hereto acknowledges that any liability of any
Affected Financial Institution arising under any Loan Document or any Related Agreement may be subject to the write-down and conversion powers of the
applicable Resolution Authority and agrees and consents to, and acknowledges and agrees to be bound by:
(a)
the application of any Write-Down and Conversion Powers by the applicable Resolution Authority to any such liabilities arising
hereunder which may be payable to it by any party hereto that is an Affected Financial Institution; and
(b)
the effects of any Bail-In Action on any such liability, including, if applicable:
(i)
a reduction in full or in part or cancellation of any such liability;
(ii)
a conversion of all, or a portion of, such liability into shares or other instruments of ownership in such Affected Financial
Institution, its parent undertaking, or a bridge institution that may be issued to it or otherwise conferred on it, and that such shares or other instruments of
ownership will be accepted by it in lieu of any rights with respect to any such liability under this Agreement or any other Loan Document; or
(iii)
the variation of the terms of such liability in connection with the exercise of the write-down and conversion powers of the
applicable Resolution Authority.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their proper and duly
authorized officers as of the day and year first above written.
GRUPO TELEVISA, S.A.B.,
as Borrower and Borrower Representative
By: /s/ Jorge Agustín Lutteroth Echegoyen
Name: Jorge Agustín Lutteroth Echegoyen
Title: Vice President and Corporate Controller
By: /s/ Pablo Fernando Camacho Gutiérrez
Name: Pablo Fernando Camacho Gutiérrez
Title: Treasurer
CABLEMÁS TELECOMUNICACIONES, S.A. DE C.V.,
as Borrower
By: /s/ Jorge Agustín Lutteroth Echegoyen
Name: Jorge Agustín Lutteroth Echegoyen
Title: Attorney-in-fact
By: /s/ Julio Barba Hurtado
Name: Julio Barba Hurtado
Title: Attorney-in-fact
TELEVISIÓN INTERNACIONAL, S.A. DE C.V.,
as Borrower
By: /s/ Jorge Agustín Lutteroth Echegoyen
Name: Jorge Agustín Lutteroth Echegoyen
Title: Attorney-in-fact
By: /s/ Julio Barba Hurtado
Name: Julio Barba Hurtado
Title: Attorney-in-fact
BBVA MÉXICO, S.A., INSTITUCIÓN DE BANCA MÚLTIPLE,
GRUPO FINANCIERO BBVA MÉXICO,
as Administrative Agent, Lender and Joint Lead Arranger and Joint
Bookrunner
By: /s/ Alfonso Lorenzo Lopez Ibor Juame
Name: Alfonso Lorenzo Lopez Ibor Juame
Title: Attorney-in-fact
By: /s/ Ernesto Aguirre Revesz
Name: Ernesto Aguirre Revesz
Title: Attorney-in-fact
BANCO SANTANDER MÉXICO, S.A., INSTITUCIÓN DE BANCA
MÚLTIPLE, GRUPO FINANCIERO SANTANDER MÉXICO,
as a Lender and Joint Lead Arranger and Joint Bookrunner
By: /s/ Maria del Consuelo Briones Iturbe
Name: Maria del Consuelo Briones Iturbe
Title: Legal Representative
By: /s/ Eduardo López Bustamante
Name: Eduardo López Bustamante
Title: Legal Representative
SCOTIABANK INVERLAT, S.A., INSTITUCIÓN DE BANCA
MÚLTIPLE, GRUPO FINANCIERO SCOTIABANK INVERLAT,
as a Lender and Joint Lead Arranger and Joint Bookrunner
By: /s/ Julia Fernanda Borgo Rivera
Name: Julia Fernanda Borgo Rivera
Title: Legal Representativa
By: /s/ Luis Michael Lugo Piña
Name: Luis Michael Lugo Piña
Title: Legal Representativa
HSBC MÉXICO, S.A., INSTITUCIÓN DE BANCA MÚLTIPLE,
GRUPO FINANCIERO HSBC,
as a Lender
By: /s/ Federico Delgado Pastor Surrell
Name: Federico Delgado Pastor Surrell
Title: Attorney-in-Fact
By: /s/ Inés Vargas Barrera
Name: Inés Vargas Barrera
Title: Attorney-in-Fact
JPMORGAN CHASE BANK, N.A.,
as a Lender
By: /s/ Maurice Dattas
Name: Maurice Dattas
Title: Vice President
BANCOPPEL, S.A., INSTITUCIÓN DE BANCA MÚLTIPLE,
as a Lender
By: /s/ Tahía Wendolinne Jiménez Aldana
Name: Tahía Wendolinne Jiménez Aldana
Title: Attorney in Fact
By: /s/ José Antonio Martínez Flores
Name: José Antonio Martínez Flores
Title: Attorney in Fact
MIZUHO BANK MÉXICO, S.A., INSTITUCIÓN DE BANCA
MÚLTIPLE,
as a Lender
By: /s/ Hiroyuki Kitamura
Name: Hiroyuki Kitamura
Title: Deputy and CEO
BANCO DEL BAJÍO, S.A., INSTITUCIÓN DE BANCA MÚLTIPLE,
as a Lender
By: /s/ Ulises Sánchez Pález
Name: Ulises Sánchez Pález
Title: Attorney In Fact
BANCO ACTINVER, S.A., INSTITUCIÓN DE BANCA MÚLTIPLE,
GRUPO FINANCIERO ACTINVER,
as a Lender
By: /s/ Pabel Estudillo Herrera
Name: Pabel Estudillo Herrera
Title: Attorney-in-fact
MUFG BANK MÉXICO, S.A., INSTITUCIÓN DE BANCA MÚLTIPLE
FILIAL,
as a Lender
By: /s/ Jorge Fernando Del Castillo Ponce de Léon
Name: Jorge Fernando Del Castillo Ponce de Léon
Title: Legal Representative
BANCO MONEX, S.A., INSTITUCIÓN DE BANCA MÚLTIPLE,
MONEX GRUPO FINANCIERO,
as a Lender
By: /s/ Juan Pablo Diaque Donde
Name: Juan Pablo Diaque Donde
Title: Director Ejecutívo Banca Corporativa
By: /s/ Jose Humberto Estevane Dager
Name: Jose Humberto Estevane Dager
Title: Subdirector Juridico
Exhibit 8.1
Grupo Televisa, S.A.B.
Subsidiaries, Associates and Joint Ventures
as of December 31, 2024
Name of Company
Country of Incorporation
Acctel, S.A. de C.V. (*)
Mexico
Corporativo Vasco de Quiroga, S.A. de C.V.
Mexico
Aryadeba, S.A. de C.V.
Mexico
Apoyo Telefónico Cablemás, S.A. de C.V.
Mexico
Brokers Mol, S.A. de C.V.
Mexico
Cable y Comunicación de Morelia, S.A. de C.V.
Mexico
Cable TV Internacional, S.A. de C.V.
Mexico
Cablemás Telecomunicaciones, S.A. de C.V.
Mexico
Cablemás International Telecomm, LLC (1)
United States of America
CM Equipos y Soporte, S.A. de C.V.
Mexico
Caredteletv Servicios Administrativos FTTH de México, S.A. de C.V.
Mexico
Constructora Cablemás, S.A. de C.V.
Mexico
Desarrollos H5, S.A. de C.V.
Mexico
DKM Broker, S.A. de C.V.
Mexico
Empresas Cablevisión, S.A.B. de C.V.
Mexico
Milar, S.A. de C.V.
Mexico
Cablebox, S.A. de C.V.
Mexico
Cablestar, S.A. de C.V.
Mexico
Bestel USA, Inc.
United States of America
Operbes, S.A. de C.V.
Mexico
Servicios Operbes, S.A. de C.V.
Mexico
Cablevisión, S.A. de C.V.
Mexico
Grupo Mexicano de Cable, S.A. de C.V.
Mexico
Integravisión de Occidente, S.A. de C.V.
Mexico
Servicios Cablevisión, S.A. de C.V.
Mexico
Servicios Técnicos Cablevisión, S.A. de C.V.
Mexico
Telestar del Pacífico, S.A. de C.V.
Mexico
Gerit Profesionales, S.A. de C.V.
Mexico
Grupo Mapsani, S.A. de C.V.
Mexico
Grupo de Telecomunicaciones de Alta Capacidad, S.A.P.I. de C.V. and subsidiaries (*)
Mexico
Inmobiliaria Cablemás, S.A. de C.V.
Mexico
La Esquina de Prado Norte, S.A. de C.V.
Mexico
Mega Com-M Servicios, S.A. de C.V.
Mexico
Operadora de Redes, S.A. de C.V. (*) (1)
Mexico
Profesionales en Ventas y Mercadeo, S.A. de C.V.
Mexico
San Ángel Telecom, S.A. de C.V.
Mexico
Servicios Administrativos Cablemás, S.A. de C.V.
Mexico
Sky DTH, S.A. de C.V.
Mexico
Innova Holdings, S. de R.L. de C.V.
Mexico
Innova, S. de R.L. de C.V.
Mexico
Corporación Novaimagen, S. de R.L. de C.V.
Mexico
Corporación Novavisión, S. de R.L. de C.V.
Mexico
Corporación Satelital Novavisión Dominicana, S.A.S.
Dominican Republic
Novavision Group, Inc.
United States of America
Novavisión Honduras, S.A. de C.V.
Honduras
Novavisión Panamá, S.A.
Panama
Media Visión de Panamá, S.A.
Panama
Ridge Manor, S.R.L.
Spain
Servicios Directos de Satélite, S.A.
Costa Rica
Sky El Salvador, S.A. de C.V.
El Salvador
Televisión Novavisión de Guatemala, S.A.
Guatemala
Corporación de Radio y Televisión del Norte de México, S. de R.L. de C.V.
Mexico
Galaxy Nicaragua, S.A.
Nicaragua
Innovación Sistemática y Comercial, S. de R.L. de C.V.
Mexico
Novabox, S. de R.L. de C.V.
Mexico
Nova Call-Center, S. de R.L. de C.V.
Mexico
Servicios Corporativos de Telefonía, S. de R.L. de C.V.
Mexico
Servicios Novasat, S. de R.L. de C.V.
Mexico
Tele Cable de Michoacán, S.A. de C.V.
Mexico
Televisión Internacional, S.A. de C.V.
Mexico
Cable Administradora, S.A. de C.V.
Mexico
Name of Company
Country of Incorporation
Cable Servicios Corporativos, S.A. de C.V.
Mexico
Grupo Servicomunicación, S.A. de C.V.
Mexico
México Red de Telecomunicaciones, S. de R.L. de C.V.
Mexico
Metrored Telecom Services, Inc.
United States of America
Multibip, S.A. de C.V. (1)
Mexico
Sintonia Fina, S.A. de C.V. (1)
Mexico
Técnica Avanzada en Cableados, S.A. de C.V.
Mexico
Televicable Regional, S.A. de C.V.
Mexico
TIN, S.A. de C.V.
Mexico
DTH Europa, S.A.U.
Spain
Factum Más, S.A. de C.V.
Mexico
Grupo Telesistema, S.A. de C.V.
Mexico
Altavista Sur Inmobiliaria, S.A. de C.V.
Mexico
Auto Rent Acuario, S. de R.L. de C.V.
Mexico
Televisa Argentina, S.A. (1)
Argentina
Corporativo TD Sports, S.A. de C.V.
Mexico
Coisa, Consultores Industriales, S.A. de C.V.
Mexico
En Vivo Espectáculos, S. de R.L. de C.V.
Mexico
G. Televisa-D, S.A. de C.V.
Mexico
Grupo Bissagio, S.A. de C.V.
Mexico
Multimedia Telecom, S.A. de C.V.
Mexico
TelevisaUnivision, Inc. and subsidiaries (*)
United States of America
Villacezán, S.A. de C.V.
Mexico
CVQ Espectáculos, S.A. de C.V.
Mexico
Flyacross, S.A. de C.V. (*)
Mexico
Periódico Digital Sendero, S.A.P.I. de C.V. and subsidiary (*)
Mexico
Grupo Comunicación y Esfuerzo Comercial, S.A. de C.V. (1)
Mexico
Marcas y Desarrollos, S.A. de C.V. (*) (1)
Mexico
Mednet, S.A. de C.V. (*) (2)
Mexico
Productora Contadero, S.A. de C.V. (*) (1)
Mexico
Medios y Estrategias Promocionales, S.A. de C.V.
Mexico
Mexvisa Ltd.
Switzerland
Mountrigi Management Group Ltd.
Switzerland
Operadora Dos Mil, S.A. de C.V. (1)
Mexico
Televisa Transmedia, S.A. de C.V.
Mexico
Televisión Independiente de México, S.A. de C.V.
Mexico
Desarrollo Milaz, S.A. de C.V.
Mexico
Radio Televisión, S.A. de C.V.
Mexico
Teleimagen del Noroeste, S.A. de C.V.
Mexico
Telemercado Alameda, S. de R.L. de C.V. (*) (2)
Mexico
Televimex, S.A. de C.V.
Mexico
Televisora de Navojoa, S.A.
Mexico
Televisora de Occidente, S.A. de C.V.
Mexico
Televisora Peninsular, S.A. de C.V.
Mexico
Terma, S.A. de C.V.
Mexico
Todos Los Jugadores, S.A. de C.V. (*)
Mexico
Multimedia CTI, S.A. de C.V.
Mexico
Promo-Industrias Metropolitanas, S.A. de C.V.
Mexico
Distribuidora Panamex, S.A. (1)
Panama
TelevisaUnivision, Inc. and subsidiaries (*)
United States of America
Ulvik, S.A. de C.V.
Mexico
Televisa Corporación, S.A. de C.V.
Mexico
Administradora de Prestaciones Sociales, S.C.
Mexico
(*) Associate or Joint Venture.
(1) Without current operations.
(2) In process of liquidation.
Exhibit 11.1
ENGLISH TRANSLATION
GRUPO TELEVISA, S.A.B.
Policies Regarding the Treatment of Privileged and Confidential Information and the
Purchase or Sale of Securities by Directors and Officers and Employees
I.
Introduction
The Securities Market Law (Ley del Mercado de Valores) and the Regulations applicable to Securities Issuers and Other Market Participants (the
“Issuers’ Regulations”) issued by the National Banking and Securities Commission (Comision Nacional Bancaria y de Valores, or “CNBV”), each establish
a presumption that certain individuals have Privileged Information regarding the issuer to which they are associated. Therefore, a number of prohibitions,
limitations and requirements in these laws apply to such persons when they intend to, or carry out purchases or sales of securities issued by the issuer to
which they are associated. (Art. 363 of the Securities Market Law)
Furthermore, the Regulations issued by the CNBV applicable to Securities Transactions by Board Members, Officers and Employees (the
“Regulations”), provide that issuers whose securities are registered in the National Securities Registry (the “Registry”), must have guidelines, policies and
control mechanisms that set forth the terms and conditions under which their officers and employees may transact in securities regarding which they have,
or may have, Confidential Information. (Art. 4, paragraph one of the Regulations)
The defined terms in these policies (the “Policies”) have the meaning set forth in Exhibit “A”.
II.
Scope of the Policies
The present policies apply to the Directors of Grupo Televisa, as well as Officers and Employees that have access to, or the Group considers that
due to the nature of their position, may be susceptible to have, Privileged or Confidential Information. (Art. 3, Art. 4, Art. 5, section III of the Regulations)
III.
Treatment of Privileged Information
Directors and Officers and Employees must keep confidential the Privileged Information to which they have access and must refrain from using or
sharing said information with any other person or persons, unless such person or persons must know such information due to its position or charge. (Art.
363 of the Securities Market Law)
IV.
Purchase or Sale of Securities
A.
Principles
Securities transactions carried out by Directors and Officers and Employees regarding which they have, or may have, Confidential
Information, must always observe the principles of transparency, equal opportunity with other market participants, observance of best
practices and stock market practices, absence of conflicts of interests, and prevention of unfair practices stemming from the use
2
of Privileged Information or Confidential Information. (Art. 5, section V of the Regulations)
B.
General Restriction
Directors and Officers and Employees that have Privileged Information may not, in any event, carry out or order, directly or indirectly,
the execution of any Securities purchase or sale transactions. (Art. 364, section I of the Securities Market Law)
Directors and Officers and Employees that have Privileged Information may not communicate such Privileged Information to any person
who does not have a reason to know it, nor make any recommendations about any kind of Securities. (Art. 364, sections II and III of the
Securities Market Law)
C.
Black-Out Periods
In addition to any other restriction provided for in these Policies or that, in its case, arises from the applicable legal provisions, Directors
and Officers and Employees may not carry out any Securities purchase or sale transactions: (Art. 5, section VI of the Regulations)
i.
20 (twenty) calendar days before the date on which Grupo Televisa releases its quarterly and annual reports.
ii.
As of the publication of a Material Event and until the closing of the securities market trading period of the day on which such
Material Event was published or, in the event that the Material Event is published after the closing of the securities market
trading period, until the closing of the trading period of the immediate following day.
The black-out periods will be informed to all Officers and Employees that are part of the Long-Term Retention Plan through the
following website: www.operacionesconvalores.com (the “Online Platform”).
Likewise, the Group may, from time to time, and at its entire discretion, notify by any means, to the Directors and/or Officers and
Employees, as the case may be, of any additional period in which the Directors and/or Officers and Employees, as the case may be, may
not carry out any sale or purchase transaction of Securities.
D.
3-Month Waiting Period
Directors and Key Officers of the Group are prohibited from directly or indirectly purchasing Securities for a period of 3 (three) months
as of their last sale of those Securities. Similarly, they are prohibited from selling of Securities for a period of 3 (three) months as of their
last purchase. (Art. 365 of the Securities Market Law)
This waiting period is not applicable to: (i) transactions with Securities purchased or sold as part of the exercise of options related to
benefits or plans granted to
3
the employees of the subsidiaries of the Group previously approved by a Grupo Televisa shareholders meeting and that provide an
equivalent and general treatment for all officers and employees of the subsidiaries of the Group, that maintain similar work conditions, or
(ii) when expressly authorized by the CNBV, on the following events: a) corporate restructures, such as mergers, spin offs, acquisitions or
assets sales that represents at least the 10% (ten percent) of the assets and sales of the Grupo Televisa’s fiscal year; b) reorganization of
the capital structure of Grupo Televisa when the volumes of the capital stock are superior to 1% (one percent); c) public offerings; d)
preferential rights in case of subscription of shares; e) transactions of Securities of one series in order to acquire other Securities of a
different series of Grupo Televisa; and/or f) obtain liquidity to deal with any emergency, unforeseen circumstances or force majeure. (Art.
365 of the Securities Market Law)
E.
Transactions with Grupo Televisa as Counterparty
Directors of Grupo Televisa and Key Officers of the Group may only sell or acquire Securities in transactions in which Grupo Televisa is
the counterparty through public offerings or auctions authorized by the CNBV. (Art. 366 of the Securities Market Law)
Directors and Key Officers of the Group, must consult with the Finance and Risks Vice-presidency before undertaking such a transaction,
to confirm whether Grupo Televisa has issued or intends to issue orders to purchase or sell shares representing its capital stock, in which
case those persons will refrain from sending purchase or sale orders, as the case may be, unless in relation to a public offering. (Art. 366
of the Securities Market Law)
V.
Long-Term Retention Plan
References in these Policies to sales of Securities are equally applicable to sales of certificados de participación ordinarios (“CPOs”) under the
Long-Term Retention Plan.
VI.
Exceptions
Investments that Directors and Officers and Employees make in investment funds, securities issued pursuant to indexed trust-certificates referred
to in article 63 Bis 1, section III of the Securities Market Law, securities issued by specific purpose trusts in which such Directors and Officers and
Employees do not participate in investment decisions, as well as CPOs or warrants, in each case of securities of 2 (two) or more issuers, or also to a group
or basket of shares or indexes, are not considered Securities transactions regulated by the present Policies. (Art. 2 of the Regulations)
To obtain more information about the different exceptions set forth herein, it is suggested that Directors or Officers and Employees consult with
their legal advisors before conducting any Securities transaction.
4
VII.
Transactions Subject to Disclosure
a.
Any person or group of persons that acquires, directly or indirectly, within or without any securities market, through one or more
transactions of any kind, simultaneously or consecutively, ordinary shares representing Grupo Televisa’s capital stock, who as a result of
such transaction has a share ownership equal to or greater than 10% (ten percent) and less than 30% (thirty percent) of those shares, is
required to inform the public of this circumstance at the latest on the business day following the attainment of this ownership level, both
through the BMV as well as through the CNBV. In the event of ownership by a group of persons, the individual ownership amount of
each member of such group must be disclosed. Furthermore, a person or group of persons described above must inform their intention to
acquire or not acquire Significant Influence in Grupo Televisa. Grupo Televisa must be made aware of this information in writing on the
same day on which the described event is updated, indicating the number, series and/or class of shares acquired, and the acquisition price.
(Art. 109 of the Securities Market Law and 49 Bis 1 of the Issuers’ Regulations)
b.
Grupo Televisa’s Related Parties who directly or indirectly increase or decrease their participation in Grupo Televisa’s capital stock by
5% (five percent) of such capital stock, through one or more transactions, whether simultaneous or successive, are required to inform the
public of such circumstance at the latest on the business day following the occurrence of said event through the BMV, as well as in
writing to the CNBV. Furthermore, they must advise of their intention to acquire or not acquire a Significant Influence, or to increase it,
as the case may be. Grupo Televisa must be made aware of this information in writing on the same day on which the described event is
updated, indicating the number, series and/or class of shares acquired, and the acquisition price. (Art. 110 of the Securities Market Law
and 49 Bis 1 of the Issuers’ Regulations)
c.
Any person or group of persons that directly or indirectly holds 10% (ten percent) or more of the shares representing the capital stock of
Grupo Televisa, as well as its Directors and Key Officers, must make the CNBV aware of the sales or purchases that they carry out in
regard to these securities during a calendar quarter, within 5 (five) business days after the conclusion of each such period, whenever the
total amount in question in such a period is equal to or superior to, in Mexican Pesos, 1,000,000 investment units (“UDIs”), considering
the value of the UDI on the last business day of the quarter in which the transactions were carried out. This information must be presented
to the administrative unit of the CNBV in charge of its supervision in the form attached hereto as Exhibit “B”, printed and duly signed by
the shareholder or its legal representative or attorney in fact. Furthermore, Grupo Televisa must be made aware of this information in
writing on the date upon which the described event is updated, indicating the number, series and/or class of shares acquired, and the
acquisition and/or disposition price. (Art. 111 of the Securities Market Law and Art. 49 Bis and 49 Bis 1 of the Issuers’ Regulations)
d.
The persons described in the above paragraph will inform the CNBV, the dispositions or acquisitions of Grupo Televisa shares that they
realize in a 5 (five) business day term when the total amount in question is equal to or greater than, in Mexican Pesos, 1,000,000 UDIs.
The CNBV must be notified the
5
business day following the day upon which such amount is reached, considering the value of the UDI on the day of the last transaction.
This information must be presented to the administrative unit of the CNBV in charge of its supervision in the form attached hereto as
Exhibit “B”, printed and duly signed by the shareholder, its legal representative or attorney in fact. Furthermore, Grupo Televisa must be
made aware of this information in writing on the date upon which the described event is updated, indicating the number, series and/or
class of shares acquired, and the acquisition and/or disposition price. (Art. 111 of the Securities Market Law and Art. 49 Bis and 49 Bis 1
of the Regulations)
It is important to note that the requirements and provisions set forth above apply to securities that are convertible into Grupo Televisa’s ordinary
shares, into securities that represent them, and to warrants or other derivative instruments to be paid-in-kind. (Art. 112 Securities Market Law)
Certain transactions mentioned in these Policies may be subject to restrictions or additional requirements in terms of the by-laws of Grupo
Televisa, which must be consulted previous performing of any transactions with the Securities.
VIII.
Internal Control Measures
The Legal Vice-presidency will be the responsible for monitoring compliance with the Regulations, as well as the present Policies and other
guidelines and control mechanisms that the Group implements in connection with the present Policies. (Art. 5, section I of the Regulations)
To facilitate the Directors and Officers and Employees’ knowledge of these Policies, and the legal and administrative provisions applicable to the
securities market, an information guide has been prepared and attached to the present Policies as Exhibit “C”. (Art. 5, section II of the Regulations)
As part of the internal control measures, Officers and Employees that are part of the Long-Term Retention Plan must access the Online Platform
prior to carrying out any Securities transaction, in order to confirm that they do not have Privileged Information, and therefore, can perform such
transaction. Once this has been confirmed, they must confirm whether they have Confidential Information, and if they do have Confidential Information
and still decide to carry out such transaction, then they will be required to notify this transaction to the Legal Vice-presidency as set forth in Exhibit “D”
within the next 10 (ten) business days following such transaction. In case the Online Platform is not available or if the Legal Vice-presidency authorizes so,
these statements shall be made in writing and in the form provided by the Legal Vice-presidency. (Art. 5, section VIII of the Regulations)
The Directors of Grupo Televisa as well as Officers and Employees that are not part of the Long-Term Retention Plan must notify the Legal Vice-
presidency in terms of Exhibit “E”, every time they carry out a Securities transaction while having Confidential Information. Such notice must be delivered
within 10 (ten) business days following the date on which they entered into that transaction. (Art. 5, section VIII of the Regulations)
Furthermore, Officers and Key Officers of the Group that hold, directly or indirectly, 1% (one percent) of the capital stock of Grupo Televisa must
submit to Grupo Televisa, before May 15 of each year, a report that sets forth the number, series and class of shares
6
that they own or are beneficiaries, directly or indirectly, as well as the amount and percentage that they represent of Grupo Televisa’s capital stock, in the
form of Exhibit “F” of these Policies. (Art. 49 Bis 3 of the Issuers’ Regulations)
Finally, Directors and all officers and employees of Grupo Televisa’s subsidiaries must deliver an acknowledgement in the form attached hereto as
Exhibit “G” to the Legal Vice-presidency, duly signed, indicating their acknowledgement and adherence to these Policies. (Art. 5, second last paragraph, of
the Regulations)
Any question regarding the scope or application of the present Policies may be submitted to the Legal Vice-presidency.
IX.
Sanctions
Violations to these Policies will be sanctioned with disciplinary actions, warnings, temporary suspensions, and even termination of the
employment relationship. The sanctions will be imposed taking into account the nature of the violation, the seriousness, as well as, in its case, the
reoccurrence.
The lack of delivery of the report indicated on section VIII may be sanctioned with the temporary or definitive blocking of such member’s account
under the Long-Term Retention Plan.
The Legal Vice-presidency and/or the Internal Auditing Vice-presidency will have the authority to investigate violations of these Policies.
Furthermore, in accordance with the Regulations, the Legal Vice-presidency is required to inform the Board of Directors of any violation of these Policies.
(Art. 5, last paragraph, of the Regulations)
Certain violations of these Policies may constitute crimes under the Securities Market Law and other applicable regulations. As set forth in the
Regulations, the Legal Vice-presidency, when in the exercise of its functions detects violations or offenses under the regulations or these Policies, and
control mechanisms that, in their judgment, may be violations of the Securities Market Law, must inform the CNBV of such facts within 2 (two) business
days after the day upon which they become aware of the violation. (Art. 9 of the Regulations)
X.
Approval and Modification
The present Policies were approved by the Grupo Televisa’s Board of Directors upon the proposal of the Chief Executive Officer, on October 26,
2017. Any modification to these Policies must be approved by the Board of Directors. (Art. 4 of the Regulations)
Clarifications or correction of typographical errors that do not affect the intended meaning of the Policies, will not be deemed as amendments to
these Policies for such purposes.
7
Exhibit “A”
Definitions
“BMV” means the Bolsa Mexicana de Valores, S.A.B. de C.V. (Mexican Stock Exchange).
“CNBV" means the National Banking and Securities Commission (Comisión Nacional Bancaria y de Valores).
“Confidential Information” means the information classified by the Group as having that character, as well as that information that is expressly classified as
such in the documents, contracts or agreements regulating relationships with clients, or whenever considered as such pursuant to the applicable statutes
and, in all cases, that is related to any securities registration process in the Registry, public offerings, or acquisitions or transfers of shares of Grupo
Televisa.
“Controlling Power” means the power to influence in a decisive manner the shareholders meetings or board meetings, or in the management, conduct and
execution of an issuer or corporation under its control or over which it has a Significant Influence. It is presumed that, absence proof to the contrary,
persons in the following categories have Controlling Power over a company:
a)
Controlling shareholders.
b)
Individuals related to an issuer or to companies making up the business group or consortium to which it belongs, through honorary or life
charges or any analogue or similar title to the foregoing.
c)
Persons that have transferred the control of the corporation by any means and without payment or at a value inferior to the market or
accounting value, in favor of individuals with whom they are related by blood, affinity, or civilly in the fourth degree, the spouse,
cohabitant, or common law spouse.
d)
Those who instruct directors or Key Officers of a company, the decision making or execution of transactions in a company, or a company
that controls such a company.
“CPOs” means certificados de participación ordinarios.
“Directors” means the members of the Board of Directors of Grupo Televisa.
“Group” means Grupo Televisa and its subsidiaries.
“Grupo Televisa” means Grupo Televisa, S.A.B.
“Issuers’ Regulations” means the “Regulations issued by the CNBV applicable to Securities Issuers and Other Market Participants.
“Key Officers” means the chief executive officer (director general) of Grupo Televisa, as well as the individuals employed by it or by any entity controlling
or controlled by such company, or that have a significant influence in the administrative, financial, operational or legal aspects of such company of
corporate group to which it belongs, without including the members of the Board of Directors of any company subject to the Securities Market Law.
8
“Long-Term Retention Plan” means the CPO purchase plan of Grupo Televisa for officers and employees of the subsidiaries of the Group, implemented by
Grupo Televisa.
“Material Event” means any acts, facts, or events, of any kind, that influence or could influence the price of Grupo Televisa’s Securities, in terms of the
Securities Market Law and the Issuers’ Regulations.
“Online Platform” means the website www.operacionesconvalores.com, in which Officers and Employees that are part of the Long-Term Retention Plan,
through the use of their digital signature (which can be their password), will have to confirm that they do not have any Privileged Information and confirm
whether they have Confidential Information before carrying out any Securities transaction, and in case they do have Confidential Information and decide to
carry out such transaction, they will electronically notify such Securities transaction.
“Officers and Employees” means the persons holding a position, employment or commission of any subsidiary of the Group, that participate in the Long-
Term Retention Plan and any other employee that for its charge or function has access to Privileged Information or Confidential Information at certain
moment .
“Privileged Information” means such information regarding a Material Event of the Group that has not been made public by Grupo Televisa through the
BMV.
“Related Parties” means:
a)
Persons who control or have a Significant Influence on a company that is part of the business group or consortium to which Grupo
Televisa belongs, as well as the directors or managers and Key Officers of the members of such group or consortium.
b)
Persons having Controlling Power over a corporation forming part of a business group or consortium to which Grupo Televisa belongs.
c)
The spouse, concubine and persons related by blood or civilly up to the fourth degree or by affinity until the third degree with the persons
listed in a) and b) above, as well as the partners and co-owners of the physical persons described in a) and b), above, with whom they
maintain business relationships.
d)
Companies that are part of the business group or consortium to which Grupo Televisa belongs.
e)
Companies over which the persons mentioned in items a) through c) above, exercise control or Significant Influence.
“Securities” means (i) the shares representing Grupo Televisa’s capital stock or any other company regarding which the Directors, Officers or Employees
would have obtained information in the exercise of their functions, (ii) securities representing shares representing Grupo Televisa’s capital stock or any
other company regarding which the Directors, Officers or Employees would have obtained information in the exercise of their functions (in both cases,
including without limitation, “American Depository Receipts” (ADR’s) or similar instruments in foreign markets, or other similar instruments), (iii) any
other debt or equity security issued by Grupo Televisa or any other company regarding which the Directors, Officers or Employees would have obtained
information in the exercise of their functions,
9
and (iv) warrants or derivatives that are issued with respect to securities described in items (i), (ii) and (iii), above.
The definition of “Securities” does not include shares in investment companies (sociedades de inversión de renta variable).
“Securities Market Law” means the Mexican Securities Market Law or Ley del Mercado de Valores.
“Significant Influence” means holding rights that allow, directly or indirectly, the exercise of the vote of at least 20% (twenty percent) of the capital stock
of a corporation.
10
Exhibit “B”
REPORT ON PARTICIPATION IN ISSUERS CAPITAL STOCK
NAME OF ISSUER
Physical person
PATERNAL LAST NAME
MATERNAL LAST NAME
NAME(S)
LEGAL PERSON
CORPORATE NAME
RELATION WITH ISSUER (Article 111 of the Securities Market Law)
a) Person hat has 10% or more ____
c) Board Member
b) Group of persons that has 10% or more ____
d) Key Director
TRANSACTIONS CARRIED OUT
SECURITY
(Issuer and Series)
TYPE
(Sale, acquisition)
AGREEMENT DATE
VOLUME
PRICE
DATE OF INFORMATION SUBMISSION TO CNBV
Address (street, number, colony, delegation or municipality and postal code) of the relevant person or authorized representative, where notices are
received.
Phone number:
NOTE: When dealing in titles that consolidate 2 (two) or more shares of one or more share series of the same Issuer, information must be presented for
each title that they represent and not for the shares or share series that are held under the cited title.
The undersigned, under oath, indicates that the information and facts contained in this document are true.
NAME AND SIGNATURE OF:
(Relevant person or authorized representative)
Name:
Title:
11
Exhibit “C”
INFORMATION GUIDE
●
All capitalized terms used in this document and in this guide have the meaning described in Exhibit “A” to the Policies.
●
The Policies apply to the Directors and Officers and Employees; as such terms are defined in the Policies.
●
Any question regarding the applicability of these Policies can be submitted to the Legal Vice-presidency.
●
Directors and Officers and Employees must keep confidential the Privileged Information and Confidential Information to which they have access,
and must refrain from using it or transmitting it to other persons, except as required due to their employment, position, or charge, the person to
which the Privileged Information is transferred must be informed that it is Privileged Information.
●
Directors and Officers and Employees who have Privileged Information may in no event carry out or instruct, directly or indirectly, the execution
of Security purchase or sale transaction.
●
In addition to any other restrictions provided in these Policies or that arises from any applicable legal provisions, Directors and Officers and
Employees to whom the Policies apply, may not carry out purchase or sale of Grupo Televisa’s Securities:
i.
20 (twenty) calendar days before the date on which Grupo Televisa publishes its quarterly or annual reports.
ii.
As of the publication of a Material Event and until the closing of the securities market trading period of the day on which such Material
Event was published or, in the event that the Material Event is published after the closing of the securities market trading operations, then
until the closing of trading operations of the immediate following day.
●
To avoid speculative transactions, Directors of Grupo Televisa and Key Officers of the Group may not buy or sell, directly or indirectly, Securities
for a term of 3 (three) months as of the last purchase or sale of the Securities they carried out.
●
Officers and Employees that are part of the Long-Term Retention Plan must access the Online Platform prior to carrying out any Securities
transaction, in order to confirm that they do not have Privileged Information, and therefore, can perform such transaction. Once this has been
confirmed, they must confirm whether they have Confidential Information, in which case, if they do have Confidential Information and still decide
to carry out such transaction, then they will be required to notify this transaction to the Legal Vice-presidency as set forth in Exhibit “D” to the
Policies within the next 10 (ten) business days. In case the Online Platform is not available or if the Legal Vice-presidency authorizes so, these
statements shall be made in writing, in the form provided by the Legal Vice-presidency.
12
●
Directors and Officers and Employees that are not part of the Long-Term Retention Plan must notify any Securities transaction that they carry out
while having Confidential Information in terms of Exhibit “E”, within 10 (ten) business days following such Securities transaction.
●
Furthermore, there are certain transactions that should be disclosed to the CNBV and/or Grupo Televisa. These transactions are described in
Section VII of the Policies and include, among others, (i) transactions that result in a share ownership equal to or greater than 10% (ten percent)
and less than 30% (thirty percent) of Grupo Televisa’s shares, (ii) transactions by any Related person of Grupo Televisa that directly or indirectly
increase or decrease their participation on the capital stock of Grupo Televisa in 5% (five percent) of such capital stock, and (iii) certain
acquisitions, which amounts are greater than certain limits established by the Regulations.
●
Directors and Key Officers of the Group that hold, directly or indirectly, 1% (one percent) of the capital stock of Grupo Televisa must submit to
Grupo Televisa, at the latest by May 15 of each year, a report containing the number, series and class of actions of which they are owner or
beneficiary, directly or indirectly, as well as the amount and percentage of the capital stock of Grupo Televisa that they represent, in terms of
“Exhibit F” of the Policies.
●
Violations to the Policies will be sanctioned with warnings, temporary suspension from positions, and up to justified removal from positions or
termination of employment with cause, depending on the nature of the violation.
●
Certain violations to the Policies can constitute crimes under the Securities Market Law and other applicable regulations.
●
The applicable statutes and regulations can be consulted at the following links:
Securities Market Law
Regulations applicable to securities issuers and other participants in the securities market
Regulations applicable to securities transactions by board members, officers and employees of financial entities and other obligated persons
●
It must be acknowledged by the Directors as well as all officers and employees of Grupo Televisa’s subsidiaries acknowledged, understood and
adhere to said policies, through the signing and delivery of the acknowledgement included in “Exhibit G” to the Policies.
●
Any question about the scope or application of this guideline and/or the Policies should be directed to the Legal Vice-presidency.
13
Exhibit “D”
FORM FOR SECURITIES TRANSACTIONS REPORT THAT MUST BE SIGNED BY
OFFICERS AND EMPLOYEES
Name:
Position:
Employee Number:
Transaction
Description:
Transaction Price
Issuer:
Volume:
Description of the
Securities (type, series,
class):
Execution Date:
Intermediary:
This form must be signed whether by a digital or a handwritten signature, by the Officers and Employees that are part of the Long-Term Retention Plan.
14
Exhibit “D”
FORM FOR SECURITIES TRANSACTIONS REPORT THAT MUST BE SIGNED BY
DIRECTORS AND OFFICERS AND EMPLOYEES THAT ARE NOT PART OF THE
LONG-TERM RETENTION PLAN
Name:
Position:
Employee Number (if
applicable):
Transaction Description:
Transaction Price:
Issuer:
Volume:
Description of the Securities
(type, series, class):
Execution Date:
Intermediary:
Date:
Name:
15
Exhibit “F”
REPORT ON PARTICIPATION IN ISSUERS CAPITAL STOCK
[CORPORATE NAME] (Companies or trusts)
NAME (Physical persons)
PATERNAL LAST NAME
MATERNAL LAST NAME
NAMES(S)
RELATION WITH ISSUER
a) Shareholder
c) Board Member
b) Beneficiary
d) Officer
INVESTMENT LINK
a) Direct shareholder
d) Shareholder of shareholding company of issuer
b) Direct or indirect beneficiary
e) Direct or indirect beneficiary of investment vehicle
c) Trustee of Shareholding Trust
f) Other
SECURITY CHARACTERISTICS*
SHARE
SERIES
SHARE
CLASS
NUMBER OF SHARES
IN CIRCULATION
PERCENTAGE OF
SHARE CAPITAL
* The most recent information as of the date of the holding of the general shareholders meeting that approves the financial statements.
DATE OF INFORMATION SUBMISSION TO CNBV
NOTE: When dealing in titles that consolidate 2 (two) or more shares of one or more share series of the same Issuer, information must be presented for
each title that they represent and not for the shares or share series that are held under the cited title.
Phone number and address (street, number, colony, delegation or municipality and postal code) of the relevant person or authorized
representative, where notices are received.
The undersigned, under oath, indicates that the information and facts contained in this document are true.
NAME AND SIGNATURE OF:
(Relevant person or authorized representative)
Name:
Title:
16
Exhibit “G”
FORM OF ACKNOWLEDGEMENT AND ADHERENCE TO THE POLICIES
Attention: Legal Vice-presidency
The undersigned, I hereby confirm my complete acknowledgement, understanding, and adherence to the “Policies for the Treatment of Privileged
and/or Confidential Information and the Purchase and Sale of Securities by Directors and Officers and Employees” of Grupo Televisa, S.A.B., which are
available to be consulted on the following electronic address: [http://intranet.televisa.net/Normatividad/Politicas/_____]
Sincerely,
Date:
Name:
Position:
Exhibit 12.1
CERTIFICATION OF CO-CHIEF EXECUTIVE OFFICER
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Alfonso de Angoitia Noriega, certify that:
1.
I have reviewed this annual report on Form 20-F of Grupo Televisa, S.A.B.;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this
report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;
4.
The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-
15(f)) for the company and have:
a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this report is being prepared;
b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles;
c)
Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)
Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by
the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial
reporting; and
5.
The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to
the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):
a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are
reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and
b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal
control over financial reporting.
Date: April 30, 2025
By: /s/ Alfonso de Angoitia Noriega
Name: Alfonso de Angoitia Noriega
Title: Co-Chief Executive Officer
Exhibit 12.2
CERTIFICATION OF CO-CHIEF EXECUTIVE OFFICER
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Bernardo Gómez Martínez, certify that:
1.
I have reviewed this annual report on Form 20-F of Grupo Televisa, S.A.B.;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this
report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;
4.
The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-
15(f)) for the company and have:
a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this report is being prepared;
b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles;
c)
Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)
Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by
the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial
reporting; and
5.
The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to
the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):
a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are
reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and
b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal
control over financial reporting.
Date: April 30, 2025
By: /s/ Bernardo Gómez Martínez
Name: Bernardo Gómez Martínez
Title: Co-Chief Executive Officer
Exhibit 12.3
CERTIFICATION OF CHIEF FINANCIAL OFFICER
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Carlos Phillips Margain, certify that:
1.
I have reviewed this annual report on Form 20-F of Grupo Televisa, S.A.B.;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this
report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;
4.
The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-
15(f)) for the company and have:
a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by
others within those entities, particularly during the period in which this report is being prepared;
b)
Designed such internal controls over financial reporting, or caused such internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for
external purposes in accordance with generally accepted accounting principles;
c)
Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)
Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by
the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial
reporting; and
5.
The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to
the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):
a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are
reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and
b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal
control over financial reporting.
Date: April 30, 2025
By: /s/ Carlos Phillips Margain
Name: Carlos Phillips Margain
Title: Chief Financial Officer
Exhibit 13.1
GRUPO TELEVISA, S.A.B.
SECTION 906 CERTIFICATION OF CO-CHIEF EXECUTIVE OFFICER
I, Alfonso de Angoitia Noriega, Co-Chief Executive Officer of Grupo Televisa, S.A.B. (the “Company”), hereby certify, pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:
1.
The Company’s annual report on Form 20-F for the fiscal year ended December 31, 2024, to which this statement is filed as an exhibit (the
“Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: April 30, 2025
By: /s/ Alfonso de Angoitia Noriega
Name: Alfonso de Angoitia Noriega
Title: Co-Chief Executive Officer
Exhibit 13.2
GRUPO TELEVISA, S.A.B.
SECTION 906 CERTIFICATION OF CO-CHIEF EXECUTIVE OFFICER
I, Bernardo Gómez Martínez, Co-Chief Executive Officer of Grupo Televisa, S.A.B. (the “Company”), hereby certify, pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:
1.
The Company’s annual report on Form 20-F for the fiscal year ended December 31, 2024, to which this statement is filed as an exhibit (the
“Report”), fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: April 30, 2025
By:
/s/ Bernardo Gómez Martínez
Name: Bernardo Gómez Martínez
Title: Co-Chief Executive Officer
Exhibit 13.3
GRUPO TELEVISA, S.A.B.
SECTION 906 CERTIFICATION OF CHIEF FINANCIAL OFFICER
I, Carlos Phillips Margain, Chief Financial Officer of Grupo Televisa, S.A.B. (the “Company”), hereby certify, pursuant to Section 906 of the Sarbanes-
Oxley Act of 2002, that, to the best of my knowledge:
1.
The Company’s annual report on Form 20-F for the fiscal year ended December 31, 2024, to which this statement is filed as an exhibit (the “Report”),
fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: April 30, 2025
By:
/s/ Carlos Phillips Margain
Name: Carlos Phillips Margain
Title: Chief Financial Officer
Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
We consent to the incorporation by reference in the registration statements on Form S-8 (No. 333-126827) and Form F-3 (No. 333-266477)
of our reports dated April 30, 2025, with respect to the consolidated financial statements of Grupo Televisa, S.A.B. and the effectiveness of
internal control over financial reporting.
/s/ KPMG Cardenas Dosal, S. C.
Mexico City, Mexico
April 30, 2025
Exhibit 23.2
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the following Registration Statements of Grupo Televisa, S.A.B.:
(a)
Registration Statement on Form S-8 (No. 333-126827); and
(b)
Registration Statement on Form F-3 (No. 333-266477).
of our report dated April 15, 2024, with respect to the consolidated financial statements of TelevisaUnivision, Inc. included in this Annual Report on Form
20-F of Grupo Televisa, S.A.B. for the year ended December 31, 2024.
/s/ Ernst & Young LLP
New York, New York
April 30, 2025
Exhibit 23.3
KPMG LLP
Brickell City Centre, Suite 1200 78 SW 7 Street
Miami, FL 33130
Consent of Independent Auditors
We consent to the incorporation by reference in the registration statements (No. 333-126827) on Form S-8 and (No. 333-266477) on Form F-3 of Grupo
Televisa, S.A.B. of our report dated March 27, 2025, with respect to the consolidated financial statements of TelevisaUnivision, Inc., which report appears
in the Form 20-F of Grupo Televisa, S.A.B. dated April 30, 2025.
/s/ KPMG LLP
Miami, Florida
April 30, 2025
KPMG LLP, a Delaware limited liability partnership and a member firm of
the KPMG global organization of independent member firms affiliated with
KPMG International Limited, a private English company limited by guarantee.
TELEVISAUNIVISION, INC. AND SUBSIDIARIES 2024 Year End Financial Information
TELEVISAUNIVISION, INC. AND SUBSIDIARIES INDEX Page Financial Information: Report of
Independent
Auditors................................................................................................................................. 3
Consolidated Balance Sheets at December 31, 2024 and December 31,
2023.......................................................... 7 Consolidated Statements of Operations for the years
ended December 31, 2024, 2023, and 2022 ......................... 8 Consolidated Statements of
Comprehensive Loss for the years ended December 31, 2024, 2023, and 2022 .......... 9
Consolidated Statements of Changes in Redeemable Convertible Preferred Stock and
Stockholders' Equity for the years ended December 31, 2024, 2023, and 2022
............................................................................................... 10 Consolidated Statements of Cash
Flows for the years ended December 31, 2024, 2023, and 2022 ........................ 11 Notes to
Consolidated Financial
Statements.............................................................................................................. 12 2
KPMG LLP Brickell City Centre, Suite 1200 78 SW 7 Street Miami, FL 33130 KPMG LLP, a
Delaware limited liability partnership and a member firm of the KPMG global organization of
independent member firms affiliated with KPMG International Limited, a private English company
limited by guarantee. Independent Auditors’ Report The Board of Directors and Stockholders
TelevisaUnivision, Inc.: Opinion We have audited the consolidated financial statements of
TelevisaUnivision, Inc. and its subsidiaries (the Company), which comprise the consolidated
balance sheet as of December 31, 2024, and the related consolidated statement of operations,
comprehensive loss, changes in redeemable convertible preferred stock and stockholders’ equity,
and cash flows for the year then ended, and the related notes to the consolidated financial
statements. In our opinion, the accompanying consolidated financial statements present fairly, in all
material respects, the financial position of the Company as of December 31, 2024, and the results
of its operations and its cash flows for the year then ended in accordance with U.S. generally
accepted accounting principles. Basis for Opinion We conducted our audit in accordance with
auditing standards generally accepted in the United States of America (GAAS). Our responsibilities
under those standards are further described in the Auditors’ Responsibilities for the Audit of the
Consolidated Financial Statements section of our report. We are required to be independent of the
Company and to meet our other ethical responsibilities, in accordance with the relevant ethical
requirements relating to our audit. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our audit opinion. Responsibilities of Management
for the Consolidated Financial Statements Management is responsible for the preparation and fair
presentation of the consolidated financial statements in accordance with U.S. generally accepted
accounting principles, and for the design, implementation, and maintenance of internal control
relevant to the preparation and fair presentation of consolidated financial statements that are free
from material misstatement, whether due to fraud or error. In preparing the consolidated financial
statements, management is required to evaluate whether there are conditions or events,
considered in the aggregate, that raise substantial doubt about the Company’s ability to continue
as a going concern for one year after the date that the consolidated financial statements are
issued. Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements Our
objectives are to obtain reasonable assurance about whether the consolidated financial statements
as a whole are free from material misstatement, whether due to fraud or error, and to issue an
auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance but is
not absolute assurance and therefore is not a guarantee that an audit conducted in accordance
with GAAS will always detect a material misstatement when it exists. The risk of not detecting a
material misstatement resulting from fraud is higher than for one resulting from error, as fraud may
involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal
control. Misstatements are considered material if there is a substantial likelihood that, individually
or in the aggregate, they would influence the judgment made by a reasonable user based on the
consolidated financial statements. 3
4 In performing an audit in accordance with GAAS, we: ● Exercise professional judgment and
maintain professional skepticism throughout the audit. ● Identify and assess the risks of material
misstatement of the consolidated financial statements, whether due to fraud or error, and design
and perform audit procedures responsive to those risks. Such procedures include examining, on a
test basis, evidence regarding the amounts and disclosures in the consolidated financial
statements. ● Obtain an understanding of internal control relevant to the audit in order to design
audit procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the Company’s internal control. Accordingly, no such opinion is
expressed. ● Evaluate the appropriateness of accounting policies used and the reasonableness of
significant accounting estimates made by management, as well as evaluate the overall
presentation of the consolidated financial statements. ● Conclude whether, in our judgment, there
are conditions or events, considered in the aggregate, that raise substantial doubt about the
Company’s ability to continue as a going concern for a reasonable period of time. We are required
to communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit, significant audit findings, and certain internal control related matters
that we identified during the audit. Miami, Florida March 27, 2025
Ernst & Young LLP 1 Manhattan West New York, NY 10001-2177 Tel: +1 212 773 3000 Fax: +1
212 773 6350 ey.com Report of Independent Auditors Board of Directors and Stockholders of
TelevisaUnivision, Inc. and subsidiaries Opinion We have audited the consolidated financial
statements of TelevisaUnivision, Inc. and subsidiaries (the Company), which comprise the
consolidated balance sheet as of December 31, 2023, and the related consolidated statements of
operations, comprehensive loss, changes in redeemable convertible preferred stock and
stockholders’ equity and cash flows for the years ended December 31, 2023 and 2022, and the
related notes (collectively referred to as the “financial statements”). In our opinion, the
accompanying financial statements present fairly, in all material respects, the financial position of
the Company at December 31, 2023, and the results of its operations and its cash flows for the
years ended December 31, 2023 and 2022 in accordance with accounting principles generally
accepted in the United States of America. Basis for Opinion We conducted our audits in
accordance with auditing standards generally accepted in the United States of America (GAAS).
Our responsibilities under those standards are further described in the Auditor’s Responsibilities for
the Audit of the Financial Statements section of our report. We are required to be independent of
the Company and to meet our other ethical responsibilities, in accordance with the relevant ethical
requirements relating to our audits. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our audit opinion. Responsibilities of Management
for the Financial Statements Management is responsible for the preparation and fair presentation
of the financial statements in accordance with accounting principles generally accepted in the
United States of America, and for the design, implementation, and maintenance of internal control
relevant to the preparation and fair presentation of financial statements that are free of material
misstatement, whether due to fraud or error. In preparing the financial statements, management is
required to evaluate whether there are conditions or events, considered in the aggregate, that raise
substantial doubt about the Company’s ability to continue as a going concern for one year after the
date that the financial statements are available to be issued. Auditor’s Responsibilities for the Audit
of the Financial Statements Our objectives are to obtain reasonable assurance about whether the
financial statements as a whole are free of material misstatement, whether due to fraud or error,
and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of
assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted
in accordance with GAAS will always detect a material misstatement when it exists. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from error, as
fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of
internal control. Misstatements are considered material if there is a substantial likelihood that,
individually or in the aggregate, they would influence the judgment made by a reasonable user
based on the financial statements. In performing an audit in accordance with GAAS, we: 5
• Exercise professional judgment and maintain professional skepticism throughout the audit. •
Identify and assess the risks of material misstatement of the financial statements, whether due to
fraud or error, and design and perform audit procedures responsive to those risks. Such
procedures include examining, on a test basis, evidence regarding the amounts and disclosures in
the financial statements. • Obtain an understanding of internal control relevant to the audit in order
to design audit procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Company’s internal control. Accordingly, no such
opinion is expressed. • Evaluate the appropriateness of accounting policies used and the
reasonableness of significant accounting estimates made by management, as well as evaluate the
overall presentation of the financial statements. • Conclude whether, in our judgment, there are
conditions or events, considered in the aggregate, that raise substantial doubt about the
Company’s ability to continue as a going concern for a reasonable period of time. We are required
to communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit, significant audit findings, and certain internal control-related matters
that we identified during the audit. April 15, 2024 6
TELEVISAUNIVISION, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In
thousands, except share and per share data) December 31, ASSETS 2024 2023 Current assets:
Cash and cash equivalents .................................................................................................................
$ 329,800 $ 220,900 Accounts receivable,
net.................................................................................................................... 1,032,200 1,160,600
Current portion of program rights and prepayments, net...................................................................
122,700 116,000 Income
taxes...................................................................................................................................... 222,000
216,300 Prepaid expenses and other current
assets......................................................................................... 224,400 327,900 Total current
assets....................................................................................................................... 1,931,100
2,041,700 Property and equipment,
net................................................................................................................. 955,500 1,202,600
Intangible assets,
net............................................................................................................................. 4,678,800
6,234,600
Goodwill...............................................................................................................................................
5,528,600 5,911,200 Program rights and prepayments, net
................................................................................................... 1,094,600 1,165,400
Investments...........................................................................................................................................
296,900 279,300 Operating lease right-of-use assets,
net................................................................................................ 162,200 136,500 Deferred tax
assets................................................................................................................................ 154,100
248,500 Other
assets...........................................................................................................................................
71,200 106,100 Total assets
................................................................................................................................... $ 14,873,000 $
17,325,900 LIABILITIES, REDEEMABLE CONVERTIBLE STOCK AND STOCKHOLDERS'
EQUITY Current liabilities: Accounts payable and accrued
liabilities........................................................................................... $ 1,024,600 $ 1,153,100 Current
deferred revenue ................................................................................................................... 224,300
284,100 Current operating lease
liabilities...................................................................................................... 43,400 34,700 Current
portion of long-term debt and finance lease obligations ...................................................... 158,600
308,500 Total current
liabilities.................................................................................................................... 1,450,900
1,780,400 Long-term debt and finance lease
obligations...................................................................................... 9,329,900 9,571,100 Deferred tax
liabilities, net ................................................................................................................... 483,700
818,900 Non-current deferred
revenue............................................................................................................... 115,100 78,300
Non-current operating lease liabilities..................................................................................................
141,800 126,300 Other long-term liabilities
.................................................................................................................... 189,500 289,100 Total
liabilities.............................................................................................................................. 11,710,900
12,664,100 Redeemable Convertible Preferred Stock: Series A Preferred Stock, par value $1,000
per share, 500,000 authorized, none issued at December 31, 2024, and
2023.............................................................................................................. — — Series B Preferred
Shares, par value $1,000 per share, 750,000 authorized and issued at December 31, 2024, and
2023 ............................................................................................................................... 852,600
852,600 Series C Preferred Shares, par value $1,000 per share, 1,008,640 authorized and
1,008,014 issued at December 31, 2024, and 2023
.......................................................................................................... 1,007,100 1,007,100
Stockholders’ equity: Class A Common Stock, par value $0.001 per share, 50,000,000 authorized,
20,256,986 issued at December 31, 2024 and 19,984,500 issued at December 31,
2023................................................... — — Class C Subordinated Common Stock, par value
$0.001 per share, 5,000,000 authorized, 842,128 issued at December 31, 2024, and 2023
............................................................................................ — — Additional paid-in-
capital.......................................................................................................... 3,508,200 3,462,800
Treasury stock............................................................................................................................
(9,600) (9,600) Retained
earnings....................................................................................................................... (2,341,800)
(1,676,900) Accumulated other comprehensive
income............................................................................... 145,600 1,025,800 Total stockholders’
equity .................................................................................................................... 1,302,400
2,802,100 Total liabilities, redeemable convertible preferred stock, and stockholders’
equity............................ $ 14,873,000 $ 17,325,900 See Notes to Consolidated Financial
Statements. 7
TELEVISAUNIVISION, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF
OPERATIONS (In thousands) Year Ended December 31, 2024 2023 2022
Revenues............................................................................................................................... $
5,055,500 $ 4,928,000 $ 4,625,900 Direct operating
expenses..................................................................................................... 2,203,400 1,914,900
1,751,100 Selling, general and administrative
expenses....................................................................... 1,544,200 1,496,100 1,359,500 Impairment
loss..................................................................................................................... 900,200 1,011,800
1,663,200 Restructuring, severance and related
charges....................................................................... 72,900 53,400 68,500 Depreciation and
amortization.............................................................................................. 551,600 570,700 524,300
Gain on dispositions, net.......................................................................................................
(155,200) (27,500) (40,600) Operating
loss....................................................................................................................... (61,600) (91,400)
(700,100) Other expense
(income):....................................................................................................... Interest expense
............................................................................................................ 725,600 695,800 584,800
Interest income.............................................................................................................. (21,200)
(19,800) (11,400) Loss (gain) on refinancing of
debt................................................................................ 9,400 (6,900) (5,400) Loss on investments,
net............................................................................................... 9,200 51,800 41,300 Other,
net....................................................................................................................... 38,100 8,200
65,700 Loss before income taxes......................................................................................................
(822,700) (820,500) (1,375,100) (Benefit) provision for income
taxes.................................................................................... (157,800) 33,500 167,100 Net
loss.................................................................................................................................. $ (664,900)
$ (854,000) $ (1,542,200) See Notes to Consolidated Financial Statements. 8
TELEVISAUNIVISION, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF
COMPREHENSIVE LOSS (In thousands) Year Ended December 31, 2024 2023 2022 Net
loss....................................................................................................................................... $
(664,900) $ (854,000) $ (1,542,200) Other comprehensive income, net of tax: Unrealized (loss)
gain on hedging activities.......................................................................... (29,200) (37,200) 165,000
Reclassification of hedging activities.................................................................................... (19,400)
(17,400) (17,300) Unrealized (loss) gain on pension activities, net of
taxes...................................................... (6,600) (9,100) 7,800 Amortization of unrealized gain on
pension activities, net of taxes...................................... (1,800) (1,300) — Currency translation
adjustment ............................................................................................ (823,200) 605,300 313,900
Other comprehensive (loss) income...........................................................................................
(880,200) 540,300 469,400 Comprehensive
loss................................................................................................................... $ (1,545,100) $
(313,700) $ (1,072,800) See Notes to Consolidated Financial Statements. 9
TELEVISAUNIVISION, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF
CHANGES IN REDEEMABLE CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS'
EQUITY (In thousands) Redeemable Convertible Preferred Stock Common Stock Additional Paid-
in-Capital Treasury Stock Accumulated Deficit Accumulated Other Comprehensive Income Total
Equity Shares '000 Amount Shares '000 Amount Balance, December 31, 2021 ................... 100 $
369,400 14,225 $ — $ 2,263,700 $ — $ 719,300 $ 16,100 $ 2,999,100 Net
loss..................................................... — — — — — — (1,542,200) — (1,542,200) Other
comprehensive income .................. — — — — — — — 469,400 469,400 Equity issuance to
effectuate the TelevisaUnivision transaction ............. — — 3,590 — 742,600 — — — 742,600
Conversion of preferred shares into common shares.................................... (100) (369,400) 1,845
— 369,400 — — — 369,400 Issuance of series B preferred stock......... 750 852,600 — — — — —
— — Issuance of series C preferred stock......... 1,008 1,007,100 — — — — — — — Repurchase
of common stock .................. — — (128) — (3,700) (9,600) — — (13,300) Net share settlement on
equity awards to employees............................................ — — — — (4,100) — — — (4,100) Share-
Based compensation ...................... — — 33 — 86,000 — — — 86,000 Dividend
payments.................................. — — — — (37,800) — — — (37,800) Capital contribution
................................. — — — — 1,300 — — — 1,300 Balance, December 31, 2022 ...................
1,758 $ 1,859,700 19,565 $ — $ 3,417,400 $ (9,600) $ (822,900) $ 485,500 $ 3,070,400 Net
loss..................................................... — — — — — — (854,000) — (854,000) Other
comprehensive income .................. — — — — — — — 540,300 540,300 Issuance of common
stock....................... — — 147 — — — — — — Net share settlement on equity awards to
employees............................................ — — 272 — — — — — — Share-Based compensation
...................... — — — — 87,800 — — 87,800 Dividend on behalf of TelevisaUnivision,
Inc......................... — — — — (42,400) — — (42,400) Balance, December 31, 2023 ...................
1,758 $ 1,859,700 19,985 $ — $ 3,462,800 $ (9,600) $ (1,676,900) $ 1,025,800 $ 2,802,100 Net
loss..................................................... — — — — — — (664,900) — (664,900) Other
comprehensive loss........................ — — — — — — — (880,200) (880,200) Net share settlement
on TelevisaUnivision Inc. equity awards to Univision Communications Inc.
employees............................................ — — 272 — — — — — — Share-Based compensation
...................... — — — — 86,700 — — — 86,700 Dividend on behalf of TelevisaUnivision,
Inc......................... — — — — (41,300) — — — (41,300) Balance, December 31, 2024
................... 1,758 $ 1,859,700 20,257 $ — $ 3,508,200 $ (9,600) $ (2,341,800) $ 145,600 $
1,302,400 See Notes to Consolidated Financial Statements 10
TELEVISAUNIVISION, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH
FLOWS (In thousands) Year Ended December 31, 2024 2023 2022 Cash flows from operating
activities: Net
loss............................................................................................................................................................
$ (664,900) $ (854,000) $ (1,542,200) Adjustments to reconcile net loss to net cash provided by
operating activities: Depreciation
.............................................................................................................................................. 216,000
223,300 197,300 Amortization of intangible
assets.............................................................................................................. 335,600 347,400 327,000
Amortization of deferred financing costs..................................................................................................
18,900 15,400 12,600 Amortization and impairment of program rights and
prepayments.......................................................... 1,133,300 889,300 909,400 Deferred income
taxes............................................................................................................................... (337,700)
(81,800) 45,200 Non-cash deferred advertising
commitments............................................................................................ (71,700) (37,300) (27,400)
Impairment loss.........................................................................................................................................
900,200 1,011,800 1,663,200 Debt extinguishment
expense.................................................................................................................... 9,400 — 17,600
Share-based compensation
........................................................................................................................ 86,700 87,800 87,500
Gain on dispositions, net
........................................................................................................................... (155,200) (27,500)
(40,600) Other non-cash
items................................................................................................................................. (6,700) 12,900
(24,800) Changes in assets and liabilities: Accounts receivable,
net......................................................................................................................... 70,500 (181,300)
88,900 Program rights and prepayments,
net..................................................................................................... (1,140,300) (1,345,100)
(1,049,800) Prepaid expenses and other
.................................................................................................................... 18,900 (42,000) (15,900)
Accounts payable and accrued liabilities...............................................................................................
46,400 (21,100) 10,900 Deferred revenue
.................................................................................................................................... 6,900 75,200
(318,300) Other long-term
liabilities...................................................................................................................... (65,200) 40,500
(17,500) Other
assets.............................................................................................................................................
13,600 (10,500) (5,500) Net cash provided by operating
activities............................................................................................................ 414,700 103,000
317,600 Cash flows from investing activities: Capital
expenditures........................................................................................................................................
(115,300) (168,400) (133,700) Proceeds on sale of
assets................................................................................................................................ 166,000 1,200
60,000 Investments and other,
net............................................................................................................................... 8,700 (67,400)
(43,000) Acquisition of businesses, net of cash
acquired.............................................................................................. — 100 (3,202,900) Net cash
provided by (used in) investing activities.............................................................................................
59,400 (234,500) (3,319,600) Cash flows from financing activities: Proceeds from issuance of long-
term debt ...................................................................................................... 2,093,100 1,503,500
2,937,300 Payments of long-term debt and finance
leases.............................................................................................. (2,446,800) (1,708,600)
(1,969,800) Payments of refinancing fees and
others......................................................................................................... (20,900) (14,200) (83,300)
Proceeds from (payments of) swap
interest..................................................................................................... 75,200 70,600 (9,900)
Dividend
payments..........................................................................................................................................
(41,300) (42,400) (37,800) Repurchase of common
stock.......................................................................................................................... — — (13,300) Tax
payment related to net share settlement
................................................................................................... — — (4,100) Proceeds from stock
options exercised ........................................................................................................... — — 300
Capital contribution, net of
fees...................................................................................................................... — — 1,002,400 Net
cash (used in) provided by financing
activities............................................................................................. (340,700) (191,100) 1,821,800
Net increase (decrease) in cash, cash equivalents, and restricted
cash................................................................ 133,400 (322,600) (1,180,200) Effect of exchange rate
changes on cash, cash equivalents, and restricted cash ................................................. (29,000)
4,900 5,300 Cash, cash equivalents, and restricted cash, beginning of
period........................................................................ 227,500 545,200 1,720,100 Cash, cash
equivalents, and restricted cash, end of period .................................................................................. $
331,900 $ 227,500 $ 545,200 Supplemental disclosure of cash flow
information:............................................................................................. Interest
paid..........................................................................................................................................................
$ 691,900 $ 691,700 $ 590,400 Income taxes paid
................................................................................................................................................ $ 99,600 $
165,300 $ 206,300 Finance lease obligations incurred to acquire
assets............................................................................................ $ 7,300 $ 8,800 $ 1,800 See Notes
to Consolidated Financial Statements. 11
TELEVISAUNIVISION, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS December 31, 2024 (Dollars in thousands, except share and per-share data, unless
otherwise indicated) 1. Company Background Nature of operations—TelevisaUnivision, Inc.
(“TelevisaUnivision” or "the Company"), (formerly known as Univision Holdings II, Inc. (“UH
Holdco”) or Searchlight III UTD L.P. (“Searchlight”)) is a holding company and the ultimate parent
of Univision Communications Inc. Searchlight was originally formed on February 19, 2020 and held
a 26.04% equity investment in Univision Holdings, Inc. (“UHI”). UH Holdco became the owner of
100% of the issued and outstanding capital stock of UHI on May 18, 2021. UHI owns Broadcast
Media Partners Holdings, Inc. (“Broadcast Holdings”) which owns Univision Communications Inc.
(together with its subsidiaries, collectively referred to herein as “UCI”), has operations in
linear/digital (formerly Media Networks) and radio. UH Holdco was renamed TelevisaUnivision
upon the completion of the TelevisaUnivision Transaction (see “TelevisaUnivision Transaction”
below). TelevisaUnivision together with its subsidiaries, are collectively referred to herein as the
“Company”, except where the context indicates otherwise. TelevisaUnivsion features the largest
Spanish-language library of owned content and industry-leading production capabilities that power
its streaming, digital and linear television offerings, as well as its radio platforms. The Company’s
linear networks include the top-rated broadcast networks Univision and UniMás in the United
States (“U.S.”) and Las Estrellas, Foro TV, Canal 5 and Canal 9 in Mexico. TelevisaUnivision is
home to 38 Spanish- language cable networks, including Galavisión and TUDN, the No. 1
Spanish-language sports network in the U.S. and Mexico. With the most compelling portfolio of
Spanish-language sports rights in the world, the Company has solidified itself as the home of
soccer. The Company also owns and manages 59 local television stations across the U.S., and 16
local television stations in Mexico and Videocine studio. The Company is home to premium
streaming services ViX, which host over 50,000 hours of high-quality, original Spanish-language
programming from distinguished producers and top talent. The Company’s prominent digital assets
include Univision.com, Univision NOW, and several top-rated digital apps. The Radio operations,
known as the Uforia Audio Network, the Home of Latin Music, which encompasses 35 owned or
operated U.S. radio stations, a live event series and a robust digital audio footprint. Additionally, the
Company incurs corporate expenses separate from the linear/digital and radio operations which
include general corporate overhead and unallocated, shared company expenses related to human
resources, finance, legal and executive services which are centrally managed and support the
Company’s operating and financing activities. TelevisaUnivision Transaction—On January 31, 2022
Grupo Televisa, S.A.B (“Televisa”; NYSE:TV; BMV:TLEVISA CPO) and UH Holdco (together with
its wholly owned subsidiary, UCI) announced the completion of the transaction between Televisa’s
media content and production assets and UCI (the “TelevisaUnivision Transaction”). The combined
new company, which was named TelevisaUnivision, Inc., created the world’s leading Spanish-
language media and content company. TelevisaUnivision produces and delivers premium content
for its own platforms and for others, while also providing innovative solutions for advertisers and
distributors globally. As a result of the TelevisaUnivision Transaction, TelevisaUnivision reaches
nearly 60% of the respective TV audiences in both the U.S. and Mexico. Across television, digital,
streaming, and audio, the Company reaches over 100 million Spanish speakers every day, holding
leading positions in both markets. Radio Stations Sale - On June 3, 2022, UCI entered into an
agreement to sell 18 non-strategic radio stations. On December 30, 2022, UCI completed the sale
of 17 non-strategic radio stations. The Company recorded a gain of $28.3 million in “Other, net”
within the consolidated statements of operations for the year ended December 31, 2022.
Disposition of non-core broadcast tower assets - On September 6, 2024, UCI sold a portion of its
non-core broadcast tower portfolio for $166.0 million, and simultaneously entered into an operating
lease for the respective broadcast tower assets needed to operate UCI's linear network business
(the “Tower Assets Sale”). The disposed non-core broadcast tower assets had a carrying amount
of $1.3 million. The Company recorded a gain on disposition related to the Tower Assets Sale of
$160.4 million in the consolidated statement of operations. The Company used proceeds from the
Tower Assets Sale to make a $150.0 million partial repayment of the 2026 term loans on
September 16, 2024. 2. Summary of Significant Accounting Policies Basis of presentation—The
accompanying consolidated financial statements have been prepared in accordance with generally
accepted accounting principles (“GAAP”) in the United States. 12
Application of Pushdown Accounting—Pushdown accounting means implementing a new basis of
accounting for the assets and liabilities based on stepped-up basis to the acquired company in
connection with a change-in-control event. UCI implemented pushdown accounting as a result of
the change-in-control event that occurred in connection with the May 18, 2021 reorganization when
the Company executed a series of transactions that gave UH Holdco 100% ownership and a
controlling financial interest in UHI (the “Reorganization”), which was accounted for under the
scope of ASC 805, in which UH Holdco was deemed to be the accounting acquirer. The
Company’s decision to apply pushdown accounting related to this change-in -control event is
irrevocable. Principles of consolidation—The consolidated financial statements include the
accounts and operations of the Company and its majority owned and controlled subsidiaries. All
intercompany accounts and transactions have been eliminated. Non-controlling interests have
been recognized where a controlling interest exists, but the Company owns less than 100% of the
controlled entity. Non-controlling interest is recorded for the portion of an investment’s equity which
is not controlled by the Company. The Company has consolidated the special purpose entities
associated with its accounts receivable facility (see Note 15 Debt). This determination was based
on the fact that these special purpose entities lack sufficient equity to finance their activities without
additional support from the Company and, additionally, that the Company retains the risks and
rewards of their activities. The consolidation of these special purpose entities does not have a
significant impact on the Company’s consolidated financial statements. The Company accounts for
investments over which it has significant influence but not a controlling financial interest using the
equity method of accounting. Under the equity method of accounting, the Company’s share of the
earnings and losses of these companies is included in “Other, net” in the accompanying
consolidated statements of operations of the Company. For equity investments which are not
accounted for under the equity method, the Company measures these investments at fair value,
with changes in fair value recognized in earnings. The Company holds equity positions in several
small early-stage entities which may not have readily determinable fair values. For such securities,
the Company utilizes the measurement alternative to carry these investments at cost minus
impairment, if any, plus or minus changes resulting from observable price changes in orderly
transactions for identical or similar investments of the same issuer. A security will be considered
identical or similar if it has identical or similar rights to the equity securities held by the Company.
The Company reviews its investments in equity securities without readily determinable fair values
for impairment each reporting period when there are qualitative factors or events that indicate
possible impairment. Factors the Company considers in making this determination include negative
changes in industry and market conditions, financial performance, business prospects, and other
relevant events and factors. When indicators of impairment exist, the Company prepares
quantitative assessments of the fair value of its investments in equity securities, which require
judgment and the use of estimates. When the Company’s assessment indicates that the fair value
of the investment is below its carrying amount, the Company writes down the investment to its fair
value and records the corresponding charge in “Other, net”, within the Company’s consolidated
statements of operations. Use of estimates—The preparation of financial statements in conformity
with GAAP requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenue and expenses, including impairments,
during the reporting period. Actual results could differ from those estimates. Significant items
subject to such estimates and assumptions include: estimated credit losses, business
combinations, shared-based compensation, the valuation of derivatives, pension and post-
retirement benefits, lease assets and liabilities, investments, property, plant and equipment,
definite lived intangibles, the recoverability of goodwill and indefinite-lived intangible assets;
amortization of program rights and prepayments; the fair value of equity securities without readily
determinable fair values; and reserves for income tax uncertainties and other contingencies.
Reclassifications— Certain reclassifications have been made to the prior years' financial
information to conform to the current year presentation. Foreign Currency—The reporting currency
of the Company is the U.S. dollar. The functional currency of most of the Company’s international
subsidiaries is the local currency. Financial statements of subsidiaries whose functional currency is
not the U.S. dollar are translated at exchange rates in effect at the balance sheet date for assets
and liabilities and at average exchange rates for revenues and expenses for the respective
periods. Translation adjustments are recorded in accumulated other comprehensive income (loss).
Foreign currency transaction gains and losses resulting from the conversion of the transaction
currency to functional currency are included in “Other, net”. For the years ended December 31,
2024, 2023, and 2022, the Company recorded total foreign currency transaction loss of $11.7
million, $2.6 million, and $13.6 million within “Other, net” within the Company’s consolidated
statement of operations, respectively. Cash equivalents—The Company considers all highly liquid
investments with a maturity of three months or less when purchased to be cash equivalents. 13
Fair value measurements—The Company utilizes valuation techniques that maximize the use of
observable inputs and minimize the use of unobservable inputs to the extent possible. The
Company determines fair value based on assumptions that market participants would use in
pricing an asset or liability in the principal or most advantageous market. When considering market
participant assumptions in fair value measurements, the following fair value hierarchy distinguishes
between observable and unobservable inputs, which are categorized in one of the following levels:
• Level 1 Inputs: Unadjusted quoted prices in active markets for identical assets or liabilities
accessible to the reporting entity at the measurement date. • Level 2 Inputs: Other than quoted
prices included in Level 1, inputs that are observable for the asset or liability, either directly or
indirectly, for substantially the full term of the asset or liability. • Level 3 Inputs: Unobservable inputs
for the asset or liability used to measure fair value to the extent that observable inputs are not
available, thereby allowing for situations in which there is little, if any, market activity for the asset
or liability at measurement date. Revenue—Revenue is recognized upon transfer of control of
promised services or goods to customers in an amount that reflects the consideration that the
Company expects to receive in exchange for those services or goods. Revenues do not include
taxes collected from customers on behalf of taxing authorities such as sales tax and value-added
tax. Advertising—The Company generates advertising revenue from the sale of commercial time
on broadcast and cable networks, local television and radio stations. The Company also generates
revenue from the sale of display, mobile and video advertising, as well as sponsorships, on our
various digital properties. In some cases, the network advertising sales are subject to ratings
guarantees that require the Company to provide additional advertising time if the guaranteed
audience levels are not achieved. Revenues for any audience deficiencies are deferred until the
guaranteed audience levels are achieved through the Company' provision of additional advertising
time. Advertising contracts, which are generally short-term, are billed monthly, with payments due
shortly after the invoice date. Advertising revenue from the sale of advertising on broadcast and
cable networks, local television and radio stations is recognized when advertising spots are aired
and performance guarantees, if any, are achieved. The achievement of performance guarantees
related to U.S. broadcasting operations are based on audience ratings from an independent
research company. If there is a guarantee to deliver a targeted audience rating, revenues are
recognized based on the proportion of the audience rating delivered compared to the total
guaranteed in the contract. For impression-based digital advertising, revenue is recognized when
“impressions” are delivered, while revenue from non-impression-based digital advertising (primarily
sponsorship) is recognized over the period that the advertisement is run. “Impressions” are defined
as the number of times that an advertisement appears in pages viewed by users of the Company’s
digital properties. Sponsorship advertisement revenue is recognized ratably over the contract
period. Subscription and licensing revenue consist of subscriber fees and program licensing:
Subscriber Fees—are charged for the right to view the programming content of the Company’s
broadcast networks, cable networks and stations through a variety of distribution platforms and
viewing devices. Subscriber fee revenue is principally comprised of fees received from
multichannel video programming distributors (“MVPDs”) and third-party live streaming services
(“virtual MVPD’s”) for authorizing carriage of the Company’s networks and for retransmission
consent of Univision and UniMás broadcast networks aired on the Company’s owned television
stations as well as fees for digital content. Typically, the Company’s networks and stations are
aired by MVPDs and virtual MVPDs pursuant to multi-year carriage agreements that provide for the
level of carriage that the Company’s networks and stations will receive, and if applicable, for
annual rate increases. Subscriber fee revenue is largely dependent on market demand for the
content that the Company provides, the contractual rate-per-subscriber negotiated in the
agreements, and the number of subscribers that receive the Company’s networks or content.
Subscriber fees received from cable and satellite MVPDs are recognized as revenue in the period
during which services are provided. Additionally, the Company’s subscriber fee revenue includes
monthly fees related to access to our Subscription Video on Demand (“SVOD”) global streaming
platform. Subscribers are billed on a monthly basis in advance of obtaining access to the platform.
Subscription fees related to the SVOD service are recognized ratably over the term of the
subscription. The Company also receives retransmission consent fees related to television stations
that the Company does not own (referred to as “affiliates”) that are affiliated with Univision and
UniMás broadcast networks. The Company has agreements with its affiliates whereby the
Company negotiates the terms of retransmission consent agreements for substantially all of its
Univision and UniMás stations with MVPDs. As part of these arrangements, the Company shares
the retransmission consent fees received with certain of its affiliates and records revenue on a net
basis. 14
Program Licensing—The Company licenses programming content for digital streaming and to
other cable and satellite providers. Program licensing revenue is recognized when the content is
delivered, and all related obligations have been satisfied. For licenses of internally-produced
television programming, each individual episode delivered represents a separate performance
obligation and revenue is recognized when the episode is made available to the licensee for
exhibition and the license period has begun. All revenue is recognized only when it is probable that
the Company will collect substantially all of the consideration for the program licensing. Other
Revenue—The Company classifies revenue from contractual commitments (including non-cash
advertising and promotional revenue) primarily related to Televisa as “Other Revenue”. The
Company also recognizes other revenue related to support services provided to joint ventures and
related to spectrum access in channel sharing arrangements. From time to time the Company
enters into transactions involving its spectrum. Program rights and prepayments—The Company
produces and acquires program rights to exhibit programming on its broadcast and cable networks
and one digital streaming platform. Program rights principally consist of television series, specials,
movies, and sporting events. Program rights aired on the Company’s broadcast and cable
networks and digital streaming platforms is sourced from a wide range of third-party producers,
wholly-owned production studios, and sports associations. Costs for internally-produced and
acquired programming rights, including prepayments for such costs, are recorded within the non-
current portion of “Program rights and prepayments, net” on the consolidated balance sheet, with
the exception of content acquired with an initial license period of 12 months or less and prepaid
sports rights expected to air within 12 months. The Company capitalizes costs for produced
program rights, including direct production costs, development costs, and production overhead, of
original programs when incurred. For licensed program rights, the costs incurred to acquire
programming are capitalized as a program right and prepayment and a corresponding liability
payable to the licensor are recorded when (i) the cost of the programming is reasonably
determined; (ii) the programming has been accepted in accordance with the terms of the
agreement; (iii) the programming is available for its first showing or telecast and (iv) the license
period has commenced. Programming rights and prepayments includes advance payments for
rights to air sporting events that will take place in the future. For purposes of amortization and
impairment, the capitalized content costs are classified based on their predominant monetization
strategy. Programs rights are either monetized individually or as part of a film group. The
substantial majority of our program rights and prepayments are predominantly monetized as a film
group on our broadcast and cable networks and/or digital streaming platform. For programming
rights that are predominantly monetized as part of our broadcast and cable networks film group,
which includes licensed content and internally-produced television programs, capitalized costs are
amortized based on an estimate of the timing of our usage of and benefit from such programming,
generally resulting in an accelerated or straight-line amortization pattern. Programming rights that
are predominantly monetized as part of our digital streaming platform are generally amortized on a
straight-line basis over an initial estimated economic life of six (6) years or the lesser of a license
period, if applicable. The Company has limited historical usage pattern or viewership information
on its digital platform as it continues to scale subscribers and the current estimated economic life
reflects an initial ramp-up period of the digital streaming service. As we obtain more historical
information, our estimate used to amortize our programming rights monetized on our digital
streaming platform will be adjusted as necessary. Adjustments to projected usage are applied
prospectively in the period of the change. Such changes in the future could be material.
Programming costs that are predominantly monetized on an individual basis are amortized utilizing
an individual-film-forecast-computation method over the title’s life cycle based upon the ratio of
current period revenue to estimated remaining total expected revenue. Licensed content for multi-
year sports programming arrangements are generally amortized over the license period based on
the ratio of current-period direct revenue to estimated remaining total direct revenue over the
remaining contract period. Licensed content costs for entertainment programming are generally
amortized over the shorter of the estimated period of benefit or licensed period. Amortization
expense of program rights and prepayments is included in “Direct Operating Expense,” in the
Company’s consolidated statement of operations. All program rights and prepayments on the
Company’s balance sheet are subject to regular recoverability assessments. The Company has a
three-year development cycle which begins with the initial capitalization of the development costs.
Film development costs that have not been set for production are expensed within three years
unless they are abandoned earlier, in which case these projects are written down to their estimated
fair value in the period the decision to abandon the project is determined. The Company’s
predominant monetization strategy determines how the impairment testing is performed for
program rights and prepayments whenever events or changes in circumstances indicate that the
carrying amount of content monetized on its own or as a film group may exceed its estimated fair
value. In addition, a change in the predominant monetization strategy is considered a triggering
event for impairment testing before a title is accounted for as part of a film group. If the carrying
amount of an individual 15
monetized content or film group, exceeds the estimated fair value, an impairment charge will be
recorded in the amount of the difference. For content that is predominately monetized individually,
we utilize estimates including ultimate revenues and additional costs to be incurred (including
exploitation and participation costs), in order to determine whether the carrying amount of the
program rights is impaired. In the event the Company decides not to air a program or substantively
abandon content due to lower viewership, an impairment loss reducing the corresponding asset to
zero is recorded to reflect the programming asset abandonment. Accounting for goodwill, other
intangibles and long-lived assets—Goodwill and other intangible assets with indefinite lives are
tested annually for impairment on October 1 or more frequently if circumstances indicate a possible
impairment exists. The Company first assesses the qualitative factors for reporting units that carry
goodwill. A reporting unit is defined as an operating segment or one level below an operating
segment. In performing a qualitative assessment, the Company considers relevant events and
circumstances that could affect the reporting unit fair value. These circumstances may include
macroeconomic conditions, industry and market considerations, cost factors, overall financial
performance, and entity-specific events, business plans, and strategy. The Company considers the
totality of these events, in the context of the reporting unit, and determines if it is more likely than
not that the fair value of the reporting unit is less than its carrying amount. If the qualitative
assessment results in a conclusion that it is more likely than not that the fair value of a reporting
unit exceeds the carrying amount, then no further testing is performed for that reporting unit. When
a qualitative assessment is not used, or if the qualitative assessment is not conclusive and it is
necessary to calculate fair value of a reporting unit, then the impairment analysis for goodwill is
performed at the reporting unit level. The quantitative impairment test is used to identify potential
impairment by comparing the fair value of a reporting unit with its carrying amount, including
goodwill. If the carrying value exceeds the fair value, an impairment charge is recognized equal to
the difference between the carrying value of the reporting unit and its fair value, considering the
related income tax effect of any goodwill deductible for tax purpose. In performing the quantitative
assessment, we measure the fair value of the reporting unit using a combination of the income and
market approaches. The assessment requires us to make judgments and involves the use of
significant estimates and assumptions. Under the income approach, the Company calculates the
present value of the reporting unit’s estimated future cash flows (discounted cash flow analysis).
Significant estimates and assumptions include the amount and timing of expected future cash flow,
risk-adjusted discount rates based on a weighted-average cost of capital (“WACC”) adjusted for
the relevant risk associated with business-specific characteristics and the uncertainty related to the
reporting unit’s ability to execute on its projected cash flows. The expected cash flows used in the
income approach are based on the Company’s most recent forecast and budget and, for years
beyond the budget, the Company’s estimates, which are based, in part, on forecasted growth
rates. Assumptions used in the estimate of future cash flows, including the WACC, are assessed
based on the reporting units’ current results and forecasted future performance, as well as
macroeconomic and industry specific factors. Determining fair value using a market approach
considers multiples of financial metrics based on both acquisitions and trading multiples of a
selected peer group of companies. From the comparable companies, a representative market
multiple is determined which is applied to financial metrics to estimate the fair value of a reporting
unit. The Company also has indefinite-lived intangible assets, such as television and radio
broadcast licenses and tradenames. The Company’s United States television and radio broadcast
licenses have indefinite lives because the Company expects to renew them and renewals are
routinely granted with little cost, provided that the licensee has complied with the applicable rules
and regulations of the Federal Communications Commission (“FCC”). Historically, all material
television and radio licenses that have been up for renewal have been renewed. Indefinite-lived
intangible assets are tested for impairment annually or more frequently if circumstances indicate a
possible impairment exists. The fair value of the television and radio broadcast licenses is
determined using the direct valuation method or greenfield method which is classified as a Level 3
measurement. The Company's broadcast license impairment testing, significant unobservable
inputs utilized included discount rates and terminal growth rates. Under the direct valuation
method, the fair value of the television and radio broadcast licenses is calculated at the network or
market level as applicable. The application of the direct valuation method attempts to isolate the
income that is properly attributable to the television and radio broadcast licenses alone (that is,
apart from tangible and identified intangible assets). It is based upon modeling a hypothetical
“greenfield” build-up to a “normalized” enterprise that, by design, lacks inherent goodwill and
whose only other assets have essentially been paid for (or added) as part of the build-up process.
Under the direct valuation method, it is assumed that rather than acquiring television and radio
broadcast licenses as part of a going concern business, the buyer hypothetically develops
television and radio broadcast licenses and builds a new operation with similar attributes from
inception. Thus, the buyer incurs start-up costs during the build-up phase. Initial capital costs are
deducted from 16
the discounted cash flow model which results in a value that is directly attributable to the indefinite-
lived intangible assets. The key assumptions used in the direct valuation method are market
revenue growth rates, market share, profit margin, duration and profile of the build-up period,
estimated start-up capital costs and losses incurred during the build-up period, the risk-adjusted
discount rate and terminal values. The market revenue growth rate assumption is impacted by,
among other things, factors affecting the local advertising market for local television and radio
stations. This data is populated using industry normalized information representing an average
FCC license within a market. Univision Network and UniMás network programming is broadcast on
the television stations. FCC broadcast licenses for television stations that are not dependent on
network programming are tested for impairment at the local market level. Radio broadcast licenses
are tested for impairment at the local market level. The Company has the option to first assess
qualitative factors to determine whether it is more likely than not that an indefinite-lived intangible
asset is impaired as a basis for determining whether it is necessary to perform the quantitative
impairment test. If the qualitative assessment determines that it is more likely than not that the fair
value of the intangible asset is more than its carrying amount, then the Company concludes that
the intangible asset is not impaired. If the Company does not choose to perform the qualitative
assessment, or if the qualitative assessment determines that it is more likely than not that the fair
value of the indefinite-lived intangible asset is less than its carrying amount, then the Company
calculates the fair value of the intangible asset and compares it to the corresponding carrying
value. If the carrying amount of the indefinite-lived intangible asset exceeds its fair value, an
impairment loss is recognized for the excess carrying value over the fair value. Long-lived assets,
such as property and equipment, intangible assets with definite lives, channel-sharing
arrangements and program right prepayments are reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount of an asset may not be recoverable.
Recoverability of assets to be held and used is measured by a comparison of the carrying amount
of an asset to its estimated undiscounted future cash flows expected to be generated by the asset.
If the carrying amount of an asset exceeds its estimated undiscounted future cash flows, an
impairment charge is recognized for the amount by which the carrying amount of the asset
exceeds the fair value of the asset. Derivative instruments—The Company recognizes all
derivative instruments as either assets or liabilities in the consolidated balance sheet at their
respective fair values. Derivatives designated and qualifying as a hedge of the exposure to
variability in expected future cash flows, or other types of forecasted transactions, are considered
cash flow hedges. The Company may enter into derivative contracts that are intended to
economically hedge certain of its risks, even though hedge accounting does not apply or the
Company elects not to apply hedge accounting. For all hedging relationships, the Company
formally documents the hedging relationship and its risk-management objective and strategy for
undertaking the hedge, the hedging instrument, the hedged transaction, the nature of the risk being
hedged, how the hedging instrument’s effectiveness in offsetting the hedged risk will be assessed
prospectively and retrospectively, and a description of the method used to measure
ineffectiveness. The Company also formally assesses, both at the inception of the hedging
relationship and on an ongoing basis, whether the derivatives that are used in hedging
relationships are highly effective in offsetting changes in cash flows of hedged transactions. For
derivative instruments that are designated and qualify as part of a cash flow hedging relationship,
the gain or loss on the derivative is reported as a component of other comprehensive (loss) income
and reclassified into earnings in the same period or periods during which the hedged transaction
affects earnings. For derivative instruments not designated as hedging instruments, the derivative
is marked to market with the change in fair value recorded directly into interest expense. The
Company classifies cash flows from its derivative transactions as cash flow from operating
activities in the consolidated statement of cash flows. For derivative transactions that have an
other-than-insignificant financing element, all cash flows are classified as cash flows from financing
activities in the consolidated statement of cash flows. The Company discontinues hedge
accounting prospectively when (i) it determines that the derivative is no longer effective in offsetting
cash flows attributable to the hedged risk; (ii) the derivative expires or is sold, terminated, or
exercised; (iii) the cash flow hedge is de-designated because a forecasted transaction is not
probable of occurring; or (iv) management determines to remove the designation of the cash flow
hedge. In all situations in which hedge accounting is discontinued and the derivative remains
outstanding, the Company continues to carry the derivative at its fair value on the consolidated
balance sheet and recognizes any subsequent changes in its fair value in earnings, and any
associated balance in accumulated other comprehensive (loss) income will be reclassified into
interest expense in the same periods during which the forecasted transactions that originally were
being hedged affect earnings. When it is probable that a forecasted transaction will not occur, the
Company discontinues hedge accounting and recognizes immediately in earnings gains and
losses that were accumulated in other comprehensive (loss) income related to the hedging
relationship. 17
Treasury Stock — When stock is acquired for purposes other than formal or constructive
retirement, the purchase price of the acquired stock is recorded in a separate treasury stock
account, which is separately reported as a reduction of equity. Property and equipment, net —
Property and equipment are carried at historical cost. Depreciation is calculated using the straight-
line method over the estimated useful lives of the assets. The Company removes the cost and
accumulated depreciation of its property and equipment upon the retirement or disposal of such
assets and the resulting gain or loss, if any, is then recognized. Land improvements are
depreciated up to 15 years, buildings and improvements are depreciated up to 50 years, broadcast
equipment over 5 to 20 years and furniture, computer and other equipment over 3 to 7 years.
Property and equipment financed with finance leases are amortized over the shorter of their useful
life or the remaining life of the lease. Repairs and maintenance costs are expensed as incurred.
Leases —The Company has long-term operating leases expiring on various dates for office, studio,
automobile and tower rentals. the Company's operating leases, which are primarily related to
buildings and tower properties, have various renewal terms and escalation clauses. The Company
also has long-term finance lease obligations for facilities and transmission and technical equipment
assets that are used to transmit and receive its network signals in the U.S. and Mexico. Our leases
generally have remaining terms ranging from 3 to 45 years and often contain renewal options to
extend the lease for periods ranging from 5 years to 25 years. For leases that contain renewal
options, we include the renewal period in the lease term if it is reasonably certain that the option
will be exercised. We evaluate whether our contractual arrangements contain leases at the
inception of such arrangements. Specifically, we consider whether we can control the underlying
asset and have the right to obtain substantially all of the economic benefits or outputs from the
asset. Contracts containing a lease are further evaluated for classification as an operating or
finance lease where the Company is a lessee. Our right-of-use operating lease assets represent
our right to use an underlying asset for the lease term, and our operating lease liabilities represent
our obligation to make lease payments. The underlying assets under finance leases are recorded
as components of property and equipment and the corresponding finance lease liability is recorded
as a component of long-term debt and finance lease obligations. Variable lease payments consist
primarily of common area maintenance and service related costs, personnel costs, utilities and
taxes, which are not included in the recognition of Right-of-Use ("ROU") assets and related lease
liabilities. Our lease agreements do not contain any material residual value guarantees or material
restrictive covenants. Both the operating lease right to use asset and liability are recognized as of
the lease commencement date at the present value of the lease payments over the lease term.
Most of our leases do not provide an implicit rate that can readily be determined. Therefore, we
use a discount rate based on our incremental borrowing rate, which is determined using secured
borrowings of companies with similar credit ratings and adjusted for the Company’s current issuing
rates for senior secured debt. The Company combines the lease and non-lease components of
lease payments in determining right-of-use assets and related lease liabilities. Lease expense is
recognized on a straight-line basis over the term of the lease. As permitted by ASC 842, leases
with an initial term of twelve months or less (“short-term leases”) are not recorded on the
accompanying consolidated balance sheet. Lease cost for finance leases includes the amortization
of the ROU asset included within property and equipment, which is amortized on a straight-line
basis and recorded to Depreciation and amortization, and interest expense on the finance lease
liability, which is calculated using the interest method and recorded to Interest expense. The
Company also has operating subleases which have been accounted for by reference to the
underlying asset subject to the lease rather than by reference to their associated right-of-use asset.
Deferred financing costs—Deferred financing costs consist of payments made by the Company in
connection with its debt offerings, primarily ratings fees, legal fees, accounting fees, private
placement fees and costs related to the offering circular and other related expenses. Deferred
financing costs are amortized over the life of the related debt using the effective interest method.
Advertising and promotional costs—The Company expenses advertising and promotional costs in
the period in which they are incurred. The Company recorded advertising and promotional costs of
$405.9 million, $380.9 million and $306.1 million for years ended December 31, 2024, 2023, and
2022, respectively. Share-based compensation—Compensation expense relating to share-based
payments is recognized in earnings using a fair-value measurement method. The Company uses
the straight-line attribution method of recognizing compensation expense over the requisite service
period which generally matches the stated vesting schedule. The Company’s stock options vest
over periods of between three and five years from the date of grant. The Company’s restricted and
performance stock unit awards vest over periods of between three and four years from the date of
grant. The fair value of each new stock option award is estimated on the date of grant using the
Black-Scholes-Merton option-pricing model. The Black-Scholes-Merton option-pricing model was
developed for use in 18
estimating the value of traded options that have no vesting restrictions and are fully transferable. In
addition, option-pricing models require the input of highly subjective assumptions. Inherent in this
model are assumptions related to stock price, expected stock-price volatility, expected term, risk-
free interest rate and dividend yield. The risk-free interest rate is based on data derived from public
sources. In general, the estimated stock price is based on comparable public company information
and the Company’s estimated discounted cash flows. The expected stock-price volatility is
primarily based on comparable public company information. Expected term and dividend yield
assumptions are based on management’s estimates. The fair value of restricted stock units
awarded to employees is measured at estimated intrinsic value at the date of grant. The fair value
of performance stock units awarded to employees is measured at the date of grant using the same
option pricing model as is used for stock options. The option pricing model assumes that
performance metrics will be achieved. When the performance metrics are not met, no
compensation cost is recognized and any recognized compensation cost is reversed. The
Company accounts for forfeitures when they occur. Employee benefits—The Company maintains a
defined benefit retirement pension plan and seniority premium plan that covers Mexican based
employees. Under the provisions of the Mexican Labor Law, seniority premiums plans are payable
based on salary and years of service to employees who resign or are terminated prior to reaching
retirement age. After retirement age, employees are no longer eligible for seniority premiums plans.
The Company has legal indemnity employee benefit that required by Mexican Labor Law and it
covers employees who are dismissed unjustifiably. Such employees receive up to three months of
salary, plus 20 days of salary for each year of service. We recognize the funded status of defined
benefit postretirement plans in the consolidated balance sheet. The funded status is measured as
the difference between the fair value of plan assets and the projected benefit obligation. We
recognize the net changes in the funded status of these plans as a component of other
comprehensive (loss) income in the year in which such changes occur. Actuarial gains and losses
in excess of 10% of the greater of the benefit obligation or the market value of plan assets are
amortized over the average remaining service period of active employees or the remaining
average expected life if a plan’s participants are predominantly inactive. These post-employment
benefits are funded through Company contributions to irrevocable trusts. These post-employment
benefits increase or decrease based upon actuarial calculations. Contributions to the trusts are
determined in accordance with actuarial estimates of funding requirements. Payments of post-
employment benefits are made by the trust administrators. The defined benefit obligation is
calculated annually using the projected unit credit method. The present value of the defined benefit
obligation is determined by discounting the estimated future cash outflows using interest rates of
government bonds that are denominated in the currency in which the benefits will be paid, and that
have terms to maturity approximating to the terms of the related pension obligation. Income taxes
—Deferred tax assets and liabilities are recognized for the future tax consequences attributable to
differences between the financial statement carrying amounts of existing assets and liabilities and
their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable income in the years in
which those temporary differences are expected to be recovered or settled. The Company
classifies all deferred tax assets and liabilities, net as non-current on the consolidated balance
sheet. Valuation allowances are established when management determines that it is more likely
than not that some portion or the entire deferred tax asset will not be realized. The future
realization of deferred tax assets depends on the existence of sufficient taxable income of the
appropriate character in either the carry back or carry forward period under the tax law for the
deferred tax asset. In a situation where the net operating losses are more likely than not to expire
prior to being utilized the Company has established the appropriate valuation allowance. If
estimates of future taxable income during the net operating loss carryforward period are reduced
the realization of the deferred tax assets may be impacted. The effect on deferred tax assets and
liabilities of a change in tax rates is recognized in income in the period that includes the enactment
date. The Company recognizes the effect of income tax positions only if those positions are more
likely than not of being sustained. Recognized income tax positions are measured at the largest
amount that is greater than 50% likely of being realized. Changes in recognition or measurement
are reflected in the period in which the change in judgment occurs. The Company recognizes
interest and penalties, if any, related to uncertain income tax positions in income tax expense.
There is considerable judgment involved in assessing whether deferred tax assets will be realized
and in determining whether positions taken on the Company’s tax returns are more likely than not
of being sustained. Concentration of credit risk—Financial instruments that potentially subject the
Company to concentrations of credit risk include primarily cash and cash equivalents, trade
receivables and financial instruments used in hedging activities. The Company’s objective for its
cash and cash equivalents is to invest in high-quality money market funds that are prime AAA
rated, have diversified portfolios and have strong financial institutions backing them. The Company
sells its services and products to a large number of diverse customers in a number of different
industries, thus spreading the trade credit risk. No one customer represented more than 10% of
revenue of the Company for the years ended December 31, 2024, 2023, and 2022, or more than
10% of the Company’s accounts 19
receivable as of December 31, 2024 and December 31, 2023. The Company extends credit based
on an evaluation of the customers’ financial condition and historical experience. The Company
monitors its exposure for credit losses and maintains allowances for anticipated losses by
considering a number of factors in estimating the credit losses associated with its accounts
receivable including historical experience, the current financial condition of an individual customer
and overall market conditions. The counterparties to the agreements relating to the Company’s
financial instruments consist of major international institutions. The Company does not believe that
there is significant risk of nonperformance by these counterparties as the Company monitors the
credit ratings of such counterparties and limits the financial exposure with any one institution.
Securitizations—Securitization transactions in connection with UCI’s accounts receivable facility
are classified as debt on the Company’s consolidated balance sheet and the related consolidated
cash flows from any advances or reductions are reflected as cash flows from financing activities.
UCI sells to investors, on a revolving non-recourse basis, a percentage ownership interest in
certain accounts receivable through wholly owned special purpose entities. UCI retains interests in
the accounts receivable that have not been sold to investors. The retained interest is subordinated
to the sold interest in that it absorbs 100% of any credit losses on the sold receivable interests. UCI
services the receivables sold under the accounts receivable facility. Pending accounting guidance
— In November 2024, the FASB issued ASU 2024-03: Disaggregation of Income Statement
Expenses which requires disaggregated disclosures to provide more transparent information about
the nature of expenses included in the income statement. The provisions of ASU 2024-03 are
effective for fiscal years beginning after December 15, 2026, and early adoption is permitted. The
Company is currently evaluating the potential impact adoption of this guidance could have on its
consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, Income
Taxes (ASC 740): Improvements to Income Tax Disclosures which requires disaggregated
information about a reporting entity’s effective tax rate reconciliation as well as information on
income taxes paid. The standard is intended to benefit investors by providing more detailed income
tax disclosures that would be useful in making capital allocation decisions. The provisions of ASU
2023-09 are effective for fiscal years beginning after December 15, 2024, with early adoption
permitted, including adoption in an interim period. The company is currently evaluating the
potential impact that adopting this guidance could have on its consolidated financial statements.
Subsequent events—The Company evaluates subsequent events and the evidence they provide
about conditions existing at the date of the balance sheet as well as conditions that arose after the
balance sheet date but before the financial statements are issued. The effects of conditions that
existed at the date of the balance sheet date are recognized in the financial statements. Events
and conditions arising after the balance sheet date but before the financial statements are issued
are evaluated to determine if disclosure is required to keep the financial statements from being
misleading. To the extent such events and conditions exist, disclosures are made regarding the
nature of events and the estimated financial effects for those events and conditions. For purposes
of preparing the accompanying consolidated financial statements and the following notes to these
financial statements, the Company evaluated subsequent events through March 27, 2025, the date
the financial statements were issued. No matters were identified that would requires adjustments to
the consolidated financial statements. 3. TelevisaUnivision Transaction The TelevisaUnivision
Transaction discussed in Note 1 Company Background was accounted for in accordance with the
acquisition method of accounting pursuant to ASC 805. The Company recorded the fair value of
the assets acquired and liabilities assumed as of the acquisition date, January 31, 2022. Under the
acquisition method of accounting, $2,279.6 million excess of the fair value relating to the net assets
and liabilities of the Company was recorded as goodwill. The fair value of assets acquired and
liabilities assumed was determined based on assumptions that a reasonable market participants
would use in the principal (or most advantageous) market for the asset or liability. The Company
completed the purchase accounting for the TelevisaUnivision Transaction during first quarter of
2023, which resulted in a goodwill increase of $43.4 million. The primary adjustments were related
to the completion of the assessment of the fair value of certain leased assets and intangible
assets, and to reflect tax obligations acquired as part of the TelevisaUnivision Transaction for which
an acquired liability was not initially established at the acquisition date. 20
4. Cash, Cash Equivalents and Restricted Cash The following table provides the balance sheet
details that sum to the total of cash, cash equivalents and restricted cash in the statement of cash
flows: December 31, 2024 2023 2022 Cash and cash
equivalents.................................................................................................. $ 329,800 $ 220,900 $
538,600 Restricted cash included in Prepaid expenses and other....................................................
100 5,100 5,100 Restricted cash included in Other
assets............................................................................ 2,000 1,500 1,500 Total cash, cash
equivalents and restricted cash shown in the statement of cash flows.... $ 331,900 $ 227,500 $
545,200 Amounts included in restricted cash within “Prepaid expenses and other” and “Other
assets” as of December 31, 2024 primarily pertain to escrow amounts for certain leases and grant
payments. Amounts included in restricted cash within “Prepaid expenses and other” and “Other
assets” as of December 31, 2023 and December 31, 2022 pertain to escrow amounts for certain
lease, grant payments and transition service agreement on the non-strategic radio stations sold on
December 30, 2022. 5. Property and Equipment Property and equipment consists of the following:
December 31, 2024 2023 Land and
improvements......................................................................................................................... $
81,200 $ 96,800 Buildings and
improvements.................................................................................................................. 373,100
377,600 Broadcast and production
equipment..................................................................................................... 616,900 638,500
Furniture, computer and other
equipment.............................................................................................. 580,400 554,100 Land,
building, transponder equipment and vehicles financed with finance leases...............................
477,600 562,800 2,129,200 2,229,800 Accumulated
depreciation...................................................................................................................... (1,173,700)
(1,027,200) Property and equipment,
net................................................................................................................... $ 955,500 $ 1,202,600
Depreciation expense on property and equipment was $216.0 million, $223.3 million and $197.3
million during the years ended December 31, 2024, 2023, and 2022, respectively. Accumulated
depreciation related to assets financed with finance leases at December 31, 2024, and 2023, was
$96.0 million and $79.6 million, respectively. 21
6. Leases The Company’s leases are primarily related to buildings (office and studios),
automobiles and tower properties, that have various renewal terms and escalation clauses. The
Company also has lease obligations for facilities, transmission and technical equipment assets that
are used to transmit and receive its network signals in the U.S. and Mexico. The components of
lease costs are as follows: Year Ended December 31, 2024 2023 2022 Finance lease cost
Amortization of right-of-use assets.......................................................................... $ 15,500 $
26,900 $ 36,400 Interest on lease liabilities........................................................................................
29,500 35,100 25,100 Operating lease
cost.................................................................................................... 36,700 37,500 28,500 Variable
lease cost and other (a)................................................................................. 53,900 52,800 44,200
Short term lease cost................................................................................................... 18,500 31,600
18,300 Total lease cost............................................................................................................ $
154,100 $ 183,900 $ 152,500 (a) Represents variable lease costs that are not based on an index
or rate related to finance leases arrangements acquired in the TelevisaUnivision Transaction
between the Company and Televisa and its affiliates, for the buildings, transmission and technical
equipment assets required to transmit and receive broadcast signals in Mexico. For further details
on related party balances and transactions, See Note 14 Related Party Transactions. The
Company's finance and operating leases weighted average discount rate and remaining lease term
are as follows: Year Ended December 31, 2024 2023 2022 Finance leases Discount
rate................................................................................................ 7.31% 7.29% 6.96% Period
(years)............................................................................................... 19.6 20.8 21.0 Operating
leases Discount rate................................................................................................ 5.56% 4.83%
4.89% Period (years)............................................................................................... 7.1 6.6 7.9 There
was no impairment related to operating lease right-of-use assets recognized for the years ended
December 31, 2024, 2023, and 2022. Cash paid for amounts included in the measurement of
operating and finance lease liabilities were as follows: Year Ended December 31, 2024 2023 2022
Finance lease liabilities .................................................................................... $ 42,700 $ 42,100 $
33,400 Operating lease liabilities................................................................................. 37,300 44,700
45,200 Total ................................................................................................................. $ 80,000 $
86,800 $ 78,600 22
The expected future payments relating to the Company’s operating and finance lease liabilities at
December 31, 2024 are as follows: Operating Finance
2025.......................................................................................................................................... $ 42,500
$ 48,200 2026..........................................................................................................................................
37,100 37,200
2027.......................................................................................................................................... 33,600
36,100 2028..........................................................................................................................................
26,900 35,100
2029.......................................................................................................................................... 15,100
32,800 2030 and thereafter...................................................................................................................
77,200 649,100 Total minimum
payments........................................................................................................ $ 232,400 $ 838,500 Less
amounts representing interest.......................................................................................... (47,200)
(448,500) Present value of minimum payments.......................................................................................
$ 185,200 $ 390,000 As of December 31, 2024, we had no material leases that were executed but not
yet commenced. 7. Goodwill and Other Intangible Assets Goodwill The carrying amount and changes
in the carrying amount of goodwill were as follows: 2024 2023 Balance as of January 1,
.............................................................................................................................
Goodwill.....................................................................................................................................................
$ 8,187,900 $ 7,817,800 Accumulated impairment
losses................................................................................................................. (2,276,700) (1,498,000)
Goodwill, net..............................................................................................................................................
$ 5,911,200 $ 6,319,800 Goodwill adjustment related to PPA
remeasurement................................................................................. 10,000 62,300 Impairment
loss.......................................................................................................................................... —
(778,700) Foreign exchange
impact............................................................................................................................ (392,600)
307,800 Balances as of December
31,...................................................................................................................... Goodwill, gross
7,805,300 8,187,900 Accumulated impairment
losses................................................................................................................. (2,276,700) (2,276,700)
Goodwill, net..............................................................................................................................................
$ 5,528,600 $ 5,911,200 See Note 2. Summary of Significant Accounting Policies for further
discussion of the Company’s assessments of goodwill and indefinite-lived intangible assets
impairment. The Company's goodwill is associated with the linear/digital reporting unit and tested
quantitatively for impairment on October 1, of each year. For the year ended December 31, 2024, the
Company performed a quantitative goodwill impairment assessment using equal weighting on the
discounted cash flow and market based valuation methods. The significant judgments and
assumptions include in the discount cash flow method are amount and timing of future cash flows
(including growth rates, operating margins and capital expenditures for a projection period, plus the
terminal value of the business at the end of the projection period), long-term growth rate of 1.1% and a
discount rate of 9.5%. The significant judgments and assumptions included in the market-based
valuation method are the multiples of earnings before interest, taxes, depreciation and amortization.
The estimated fair value of the linear/digital reporting unit exceeded its carrying value and therefore,
no impairment was recorded. 23
For the years ended December 31 2023, and 2022, the Company performed a quantitative
goodwill impairment assessment using equal weighting on the discount cash flow and market
based valuation methods, which resulted in impairment of $778.7 million and $1,498.0 million,
respectively, which primarily reflects an increased risk adjusted discount rate and reduced
estimated future cash flows as a result of macroeconomic conditions, and was recorded in the
impairment loss within the consolidated statement of operations. The discount cash flow method's
significant judgments and assumptions include the amount and timing of future cash flows
(including growth rates, operating margins and capital expenditures for a projection period, plus the
terminal value of the business at the end of the projection period), long-term growth rates of 2%,
and a discount rate of 12% and 14%, for the respective years ended December 31 2023, and
2022. The significant judgments and assumptions included in the market-based valuation method
are the multiples of earnings before interest, taxes, depreciation and amortization. Intangible
Assets Indefinite-Lived Intangible Assets For the years ended December 31, 2024, 2023, and
2022, the Company recognized a non-cash impairment loss of $534.2 million, $211.1 million and
$128.4 million, respectively, related to certain FCC television broadcast licenses due to the macro-
economic conditions affecting traditional cable television in the United States, and was recorded in
the impairment loss within the consolidated statement of operations. The fair value of the FCC
television broadcast licenses was determined based on the greenfield method, by valuing a
hypothetical start-up broadcast station in the relevant market and adding discounted cash flows
over a ten-year build-up period to a residual value. The assumptions for the build-up period include
industry projections of overall market revenues, the start-up station’s operating costs and capital
expenditures, which are based on both industry and internal data, and average market share. For
the years ended December 31, 2024, 2023, and 2022, the discount rate ranges from 7.5% to 10%,
and was determined based on the industry and market-based risks, such as risks related to the
ability to achieve projected cash flows, and the residual value calculated using a long-term growth
rate range from 0% to 2%, based on projected long-range inflation and industry projections. For the
years ended December 31, 2024, 2023, and 2022, the Company recognized a non-cash
impairment loss of $32.9 million, $4.6 million and $15.3 million, respectively, related to certain trade
names, mainly due macro-economic conditions affecting the media entertainment industry, and
was recorded in the impairment loss within the consolidated statement of operations. For the years
ended December 31, 2024, 2023, and 2022, the fair value of trade names was determined using
the relief from royalty method, with significant judgments and assumptions that included the
amount and timing of future cash flows, royalty rate ranges of 2% to 5%, long-term growth rate
ranges of 0% to 2%, and discount rate ranges of 9% to 14%. Definite-Lived Intangible Assets For
the year ended December 31, 2024, the Company recognized a non-cash impairment of $333.1
million, related to broadcast and multi system operator relationships due to macro-economic
conditions impacting traditional television, and was recorded in the impairment loss within the
consolidated statement of operations. The fair value was determined using the excess earnings
method, with significant judgments and assumptions that included the amount and timing of future
cash flows, attrition rate, long-term growth rate of 1% and discount rate of 11.5%. For the years
ended December 31 2023, and 2022, the Company had no non-cash impairment loss. The
Company has various intangible assets with definite lives that are being amortized on a straight-
line basis. Advertiser relationships are primarily being amortized through 2029, broadcast and multi
system operator relationships are primarily being amortized through 2035, Mexican broadcast
license primarily being amortized through 2041 and other amortizable intangibles. For the years
ended December 31, 2024, 2023, and 2022, the Company incurred amortization expenses of
$335.6 million, $347.4 million and $327.0 million, respectively. 24
The carrying amount and changes in the carrying amount of intangible assets were as follows: As of
December 31, 2024 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Intangible
Assets Being Amortized Broadcast and Multi System Operator relationships ................................... $
2,169,700 $ 602,900 $ 1,566,800 Advertiser relationships...............................................................................
1,493,200 468,900 1,024,300 Mexican Broadcast license ..........................................................................
336,700 48,100 288,600 Other amortizable intangibles......................................................................
159,800 50,200 109,600 Total................................................................................................... $ 4,159,400 $
1,170,100 $ 2,989,300 Intangible Assets Not Being Amortized Broadcast licenses
....................................................................................................................................................... 1,845,400
Trade names and other
assets...................................................................................................................................... 731,400
Total...................................................................................................................................................................
2,576,800 Impairment loss
.......................................................................................................................................................... (567,100)
Foreign exchange rate
impact...................................................................................................................................... (320,200) Total
intangible assets,
net.......................................................................................................................................... $ 4,678,800 The
carrying amount and changes in the carrying amount of intangible assets were as follows: As of December
31, 2023 Gross Carrying Amount Accumulated Amortization Net Carrying Amount Intangible Assets Being
Amortized Broadcast and Multi System Operator relationships ................................... $ 2,438,400 $
433,200 $ 2,005,200 Advertiser relationships............................................................................... 1,367,500
313,900 1,053,600 Mexican Broadcast license .......................................................................... 292,700
29,600 263,100 Other amortizable intangibles...................................................................... 159,800 34,600
125,200 Total................................................................................................... $ 4,258,400 $ 811,300 $
3,447,100 Intangible Assets Not Being Amortized Broadcast licenses
....................................................................................................................................................... 2,057,400
Trade names and other
assets...................................................................................................................................... 707,300
Total...................................................................................................................................................................
2,764,700 Impairment
loss...........................................................................................................................................................
(215,700) Disposition (900) Foreign exchange rate
impact...................................................................................................................................... 239,400 Total
intangible assets,
net.......................................................................................................................................... $ 6,234,600 The
Company’s estimated amortization expense is $304.2 million, $300.9 million, $297.4 million, $296.8 million
and $257.0 million, for each of the years ending December 31, 2025, 2026, 2027, 2028, and 2029,
respectively. 25
8. Accounts Payable and Accrued Liabilities Accounts payable and accrued liabilities consist of the
following: December 31, 2024 2023 Trade accounts
payable.................................................................................................................... $ 214,600 $
239,400 Accrued
compensation..................................................................................................................... 175,200
205,500 Program rights
obligations............................................................................................................... 35,700 119,300
Related party obligations (See Note 14)..........................................................................................
30,000 101,300 Accrued Value Added Tax payable
................................................................................................. 42,200 83,100 Accrued
interest............................................................................................................................... 204,500
64,500 Studio production payable
............................................................................................................... 29,600 35,700 Accrued
restructuring, severance and related charges..................................................................... 43,900
29,400 Income tax payable
.......................................................................................................................... 21,900 6,100 Other
accounts payable and accrued liabilities................................................................................ 227,000
268,800 $ 1,024,600 $ 1,153,100 Restructuring, Severance and Related Charges The Company’s
restructuring, severance and related charges, net of reversals: Year Ended December 31, 2024
2023 2022 Restructuring: Activities initiated in 2020 and
prior.............................................................................. Contract Termination cost/other
................................................................................. $ 3,600 $ 5,200 $ 6,400 Activities related to
recent acquisitions.......................................................................... Employee termination
benefits................................................................................... 300 38,100 39,500 Contract
Termination cost/other................................................................................. 7,900 10,100 17,200
Total Restructuring ........................................................................................................ 11,800
53,400 63,100 Severance for individual employees and related charges
............................................... 61,100 — 5,400 Total restructuring, severance, and related
charges...................................................... $ 72,900 $ 53,400 $ 68,500 The restructuring activities
initiated in 2020 and prior were primarily intended to rationalize costs, including lease related
expenses for leased properties no longer used. Future charges arising from additional activities
associated with these restructuring activities cannot be estimated but are not expected to be
material. Severance for individual employees and related charges relate primarily to severance
arrangements with former employees unrelated to the Company’s restructuring activities. 26
The following tables present the activity in the restructuring liabilities for the years ended
December 31, 2024, and 2023: Accrued Restructuring as of December 31, 2023 Restructuring
Expense Reversals Cash Payments and Other Accrued Restructuring as of December 31, 2024
Restructuring Activities Initiated in 2020 and Prior Employee termination benefits...................... $
500 $ — $ — $ — $ 500 Contract termination costs/other ................... — 3,600 — (3,600) —
Restructuring Activities Related to Recent Acquisitions Employee termination benefits......................
27,200 3,200 (2,900) (18,400) 9,100 Contract termination costs/other ................... 1,700 7,900 —
(7,400) 2,200 Consolidated....................................... $ 29,400 $ 14,700 $ (2,900) $ (29,400) $
11,800 Accrued Restructuring as of December 31, 2022 Restructuring Expense Reversals Cash
Payments and Other Accrued Restructuring as of December 31, 2023 Restructuring Activities
Initiated in 2020 and Prior Employee termination benefits...................... $ 500 $ — $ — $ — $ 500
Contract termination costs/other ................... — 5,200 — (5,200) — Restructuring Activities
Related to Recent Acquisitions Employee termination benefits...................... 23,700 42,400 (4,300)
(34,600) 27,200 Contract termination costs/other ................... 2,400 12,600 (2,500) (10,800) 1,700
Consolidated....................................... $ 26,600 $ 60,200 $ (6,800) $ (50,600) $ 29,400 Employee
termination benefits accrued as of December 31, 2024 are expected to be paid within twelve
months from December 31, 2024. Contract termination costs and other costs primarily relate to
non-employees related items and lease obligations for leased properties no longer used. All of the
restructuring activities accrued as of December 31, 2024 and December 31, 2023 are included in
current liabilities on the consolidated balance sheet. 9. Revenue Recognition Revenue Recognition
The following tables presents revenues for the years ended December 31, 2024, 2023 and 2022,
respectively: Year Ended December 31, 2024 2023 2022 Advertising
..................................................................................................... $ 3,085,100 $ 2,982,300 $
2,765,800 Subscriber and licensing................................................................................. 1,861,300
1,813,400 1,740,200 Other...............................................................................................................
109,100 132,300 119,900
Total............................................................................................................... $ 5,055,500 $
4,928,000 $ 4,625,900 27
Contract Liabilities For certain contractual arrangements, the Company receives cash
consideration prior to providing the associated services resulting in deferred revenue recognition.
In addition, the Company has recorded non-cash deferred revenue in connection with equity
received in companies in exchange for advertising services. The Company also has non-cash
deferred revenue in connection with an obligation to Televisa to provide future advertising and
promotion time. See Note 14 Related Party Transactions, under the heading “Televisa.” The
following table presents the Company's deferred revenue balances as of: December 31, 2024
2023 Current portion Deferred advertising
revenue.................................................................................................... $ 151,200 $ 234,600
Televisa deferred advertising revenue...................................................................................... 11,000
10,600 Other deferred revenue
............................................................................................................. 62,100 38,900 Total current
deferred revenue ................................................................................................. $ 224,300 $
284,100 Non-current portion Deferred advertising and licensing revenue
............................................................................. $ 95,500 $ 47,200 Televisa deferred
advertising.................................................................................................... 4,700 15,600 Other
deferred revenue ............................................................................................................. 14,900
15,500 Total non-current deferred revenue
.......................................................................................... $ 115,100 $ 78,300 Total deferred
revenue.............................................................................................................. $ 339,400 $ 362,400
At December 31, 2024, approximately $231.7 million of revenue was recognized that was included
in the deferred revenue balance at December 31, 2023, respectively. At December 31, 2023,
approximately $207.1 million of revenue was recognized that was included in the deferred revenue
balance at December 31, 2022. The recognized revenue includes $71.7 million and $37.3 million
for the years ended December 31, 2024, and 2023, respectively, in connection with equity received
in companies in exchange for advertising services and non cash advertising services provided to
Televisa. (See Note 14 Related Party Transactions). 10. Program Rights and Prepayments The
table below presents the components of the Company’s program rights and prepayments, net:
December 31, 2024 2023 Film group monetization Internally produced program
rights.......................................................................................................... Completed and
released......................................................................................................................... $ 424,700 $
328,800 Completed and not
released................................................................................................................... 53,300 16,600
In-production
......................................................................................................................................... 210,500
353,000 Licensed movies and series program
rights............................................................................................. 189,000 309,900 Individual
monetization Licensed program rights and prepayments including sports
rights.......................................................... 339,800 273,100 Total program rights and prepayments,
net................................................................................................ 1,217,300 1,281,400 Current
portion.........................................................................................................................................
(122,700) (116,000) Non-current
portion.................................................................................................................................. $
1,094,600 $ 1,165,400 28
Program rights amortization and impairments are as follows: Year Ended December 31, 2024 2023
2022 Film group monetization: Program rights
amortization....................................................................................... $ 678,200 $ 590,900 $ 445,100
Program rights impairment......................................................................................... 152,200 10,900
19,000 Individual monetization: Program rights
amortization....................................................................................... 298,000 298,400 464,300
Program rights impairment......................................................................................... 4,900 6,500
2,500 Total program rights amortization and impairment expense .......................................... $
1,133,300 $ 906,700 $ 930,900 For the year ended December 31, 2024, the Company recognized
non-cash program right impairment of $157.1 million, recorded as part of the direct operating
expense line within the consolidated statement of operations. The program rights impairment is
primarily related to ViX originals that were produced before launch of the service, and used as the
ViX streaming platform continue to scale audience and gather data to determine usage patterns or
viewership. The ViX originals provided valuable insights and are expected to be of no value in the
Company's go-forward content strategy. For the years ended December 31 2023, and 2022, the
Company recognized non-cash program right impairment of $17.4 million and $21.5 million,
respectively, recorded as part of the impairment loss line within the consolidated statement of
operations. Each of the program rights impairment relates to program rights which will no longer be
aired and sports rights with certain payments made in excess of the recoverable amount. Total
expected amortization by fiscal year of completed (released and not released) produced, licensed
and acquired library content on the consolidated balance sheet as of December 31, 2024 is as
follows: Monetized As a Group Monetized Individually Total Produced content Completed and
released 2025 ...................................................................................................................... $
192,100 $ — $ 192,100 2026
...................................................................................................................... 94,900 — 94,900 2027
...................................................................................................................... 66,100 — 66,100
Completed and not released 2025
...................................................................................................................... 9,500 — 9,500
Licensed content - Program rights and advances 2025
...................................................................................................................... 50,000 102,900
152,900 2026 ...................................................................................................................... 48,600
219,200 267,800 2027 ......................................................................................................................
36,300 — 36,300 11. Financial Instruments and Fair Value Measures The carrying amounts of
certain financial instruments, including cash and cash equivalents, accounts receivable, accounts
payable and accrued liabilities approximate their fair value. Accounts Receivable—The following
table provides the details of the Company’s allowance for credit losses: Balance as of December
31, 2023 Provision for expected credit losses Write-offs Recoveries Foreign currency exchange
rate impact and others Balance as of December 31, 2024 Allowance for Credit Losses ............ $
31,200 $ 30,700 $ (10,900) $ (15,800) $ (13,600) $ 21,600 29
Balance as of December 31, 2022 Provision for expected credit losses Write-offs Recoveries
Foreign currency exchange rate impact and others Balance as of December 31, 2023 Allowance
for Credit Losses ............ $ 25,800 $ 31,200 $ (5,500) $ (18,800) $ (1,500) $ 31,200 Interest Rate
Swaps—The Company uses interest rate swaps to manage its interest rate risk. These interest
rate swaps are measured at fair value primarily using significant other observable inputs (Level 2).
In adjusting the fair value of its derivative contracts for the effect of nonperformance risk, the
Company has considered the impact of netting and any applicable credit enhancements, such as
collateral postings, thresholds, mutual puts, and guarantees. See Note 16 Interest Rate Swaps.
The majority of inputs into the valuations of the Company’s interest rate swap derivatives include
market-observable data such as interest rate curves, volatilities, and information derived from, or
corroborated by, market-observable data. Additionally, a specific unobservable input used by the
Company in determining the fair value of its interest rate derivatives is an estimation of current
credit spreads to appropriately reflect both its own nonperformance risk and the respective
counterparty’s nonperformance risk in the fair value measurements. The inputs utilized for the
Company’s own credit spread are based on implied spreads from its privately placed debt
securities with an established trading market. For counterparties with publicly available credit
information, the credit spreads over the Secured Overnight Financing Rate (“SOFR”) used in the
calculations represent implied credit default swap spreads obtained from a third-party credit data
provider. Once these spreads have been obtained, they are used in the fair value calculation to
determine the credit valuation adjustment (“CVA”) component of the derivative valuation. Based on
the Company’s assessment of the significance of the CVA, it is not considered a significant input.
The Company has determined that its derivative valuations in their entirety are classified as Level 2
measurements. The Company made an accounting policy election to measure the credit risk of its
derivative financial instruments that are subject to master netting agreements on a net basis by
counterparty portfolio. Equity Investments Not Accounted for Under the Equity Method—The fair
value of the Entravision Communications Corporation (“Entravision”) investment is based on the
market value of Entravision’s Class A common stock which is a Level 1 input. See Note 12
Investments. The Company holds equity positions in several small early-stage entities which may
not have readily determinable fair values. The Company enters into these investments in exchange
for advertising services and cash. For such securities, the Company utilizes the measurement
alternative to carry these investments at cost minus impairment, if any, plus or minus changes
resulting from observable price changes in orderly transactions for identical or similar investments
of the same issuer. When indicators of impairment exist for these investments, the Company
prepares quantitative assessments of the fair value of its investments in equity securities, which
require judgment and the use of estimates that are generally based on unobservable Level 3
inputs. Asset measured at fair value on a nonrecurring basis—The Company’s non-financial
assets, such as goodwill, intangible assets, right of use assets, property and equipment, are
adjusted to fair value when an impairment is recognized and purchase accounting occurs. The
Company’s financial assets, comprising equity securities without readily determinable fair values,
are adjusted to fair value when observable price changes are identified or an impairment is
recognized. Such fair value measurements are based predominantly on Level 3 inputs. 30
Fair Value of Debt Instruments—The carrying amount and fair value of the Company’s debt
instruments as of December 31, 2024 and December 31, 2023 are set out in the following tables.
The fair values of the credit facilities are based on market prices (Level 1). The fair values of the
senior notes are based on market yield curves based on credit rating (Level 2). See Note 15 Debt
for information on recent financing transactions. As of December 31, 2024 Carrying Amount Fair
Value Bank senior secured revolving credit facility maturing in 2025 ...............................................
$ — $ — Bank senior secured revolving credit facility maturing in 2027
............................................... — — 2022 Term Loan A Facility maturing in 2027
.......................................................................... 804,900 805,400 2022 Bank senior secured term
loan facility maturing in January 2029................................... 992,100 1,018,500 2024 Bank senior
secured term loan facility maturing in January 2029................................... 489,300 503,100 2022
Term Loan B Facility maturing in June 2029 .................................................................. 476,300
489,300 Senior Secured Notes: 6.625% Senior Secured Notes due 2027
.............................................................................. 1,544,900 1,495,900 8.000% Senior Secured
Notes due 2028 .............................................................................. 1,433,700 1,468,700 4.500%
Senior Secured Notes due 2029 .............................................................................. 1,039,300
939,500 7.375% Senior Secured Notes due 2030 ..............................................................................
893,800 861,200 8.500% Senior Secured Notes due 2031
.............................................................................. 1,244,900 1,233,100 Accounts receivable facility
maturing in 2026 ......................................................................... 100,000 100,000 Note payable
with Grupo Televisa............................................................................................ 74,100 66,900 Other
long-term debt................................................................................................................. 5,200 5,200
$ 9,098,500 $ 8,986,800 As of December 31, 2023 Carrying Amount Fair Value Bank senior
secured revolving credit facility maturing in 2025 .............................................. $ — $ — Bank
senior secured revolving credit facility maturing in 2027 .............................................. — — Bank
senior secured term loan facility maturing in 2026 ........................................................ 1,899,700
1,917,100 2022 Term Loan A Facility maturing in 2027
......................................................................... 750,500 752,700 2022 Bank senior secured term
loan facility maturing in January 2029.................................. 995,500 1,027,800 2022 Term Loan B
Facility maturing in June 2029 ................................................................. 478,300 493,100 Senior
Secured Notes: 5.125% Senior Secured Notes due
2025........................................................................... 342,500 340,200 6.625% Senior Secured
Notes due 2027........................................................................... 1,561,900 1,494,100 8.000%
Senior Secured Notes due 2028........................................................................... 1,191,100
1,239,300 4.500% Senior Secured Notes due 2029...........................................................................
1,036,800 938,700 7.375% Senior Secured Notes due
2030........................................................................... 892,500 898,900 Accounts receivable facility
maturing in 2026......................................................................... 100,000 100,000 Note payable with
Grupo Televisa........................................................................................... 198,700 209,500 Other
long-term debt................................................................................................................ 7,100 7,100
$ 9,454,600 $ 9,418,500 31
12. Investments The carrying amount of the Company’s unconsolidated investments is as follows:
December 31, 2024 December 31, 2023
Entravision......................................................................................................... $ 22,000 $ 39,000
Equity method investments................................................................................ 1,100 1,600 Equity
investments without readily determinable values.................................. 273,800 238,700 Total
investments ............................................................................................ $ 296,900 $ 279,300
Entravision The Company holds 9.4 million shares of Entravision Class U shares which have
limited voting rights and are not publicly traded but are convertible into Class A common stock
upon sale of these shares to a third party. The Company considers these Class U shares to have a
readily determinable fair value based on Entravision’s Class A shares. The fair value of the
Company’s investment of Entravision as of December 31, 2024 is $22.0 million and as of
December 31, 2023 was $39.0 million. The Company, for the years ended December 31, 2024,
2023, and 2022, recorded unrealized losses of $17.0 million, $5.9 million and $18.5 million,
respectively, in “Other, net” within the Company’s consolidated statements of operations to reflect
changes in the fair value of Entravision’s shares. Equity Method Investments Combate The
Company holds a 9.0% equity interest in Combate Americas, LLC (“Combate”), a premier Hispanic
Mixed Martial Arts sports franchise and includes reality TV programming, live events and mobile
programming. The Company fully impaired the Combate investment during the quarter ended
December 31, 2023. For the year ended December 31, 2024, the Company recorded a gain of
$7.0 million in “Other, net” within the Company’s consolidated statements of operations related to
the airing of the remaining mixed martial arts matches under contract. For the year ended
December 31, 2023, the Company recorded a loss of $29.2 million in “Other, net” within the
Company’s consolidated statements of operations reflecting the full impairment of our Combate
equity investment and share of equity loss. For the year ended December 31, 2022, the Company
recorded a loss of $1.9 million in “Other, net” within the Company’s consolidated statements of
operations related to the equity investment in Combate. Equity investments without readily
determinable fair values The Company holds several equity positions in small early-stage entities
in various industries and these equity investment do not have readily determinable fair values.
During the year ended December 31, 2024 the Company invested non-cash consideration of $46.0
million. The following table presents a summary of the unrealized pre-tax gains and losses in
“Other, net” within the Company’s consolidated statements of operations as adjustments to the
carrying amounts of equity securities without readily determinable fair values held at: December
31, 2024 2023 2022 Upward adjustments gross unrealized
................................................................ $ (8,900) $ — $ — Downward adjustments gross
unrealized............................................................ 16,600 17,100 20,200 Total unrealized
adjustments, net..................................................................... $ 7,700 $ 17,100 $ 20,200 The
cumulative upward and downward adjustments (including impairments) to the carrying amount of
equity securities without readily determinable fair values as of December 31, 2024, 2023, and
2022, were $45.0 million, $37.3 million, and $20.2 million, respectively. The Company recorded the
unrealized adjustments pre-tax gains and losses in “Other, net” within the consolidated statements
of operations and as adjustments to the carrying amounts of equity securities without readily
determinable fair values. 32
13. Acquisitions Pantaya Acquisition The Company completed the purchase accounting of
Pantaya, LLC (“Pantaya”), a U.S. streaming platform focused on Spanish-language content, which
resulted in a goodwill increase of $12.1 million during the year ended December 31, 2023, which
resulted in the recognition of total goodwill of $108.9 million. The final purchase consideration of
$151.2 million was comprised of $120.2 million cash consideration and the fair value of the Puerto
Rican radio assets transferred on August 31, 2023 after obtaining FCC approval. The Pantaya
acquisition enhanced our ongoing digital transformation by bringing together highly complementary
streaming assets and building up our subscriber base. 14. Related Party Transactions
Management Services Agreement and CEO Transition An affiliate of ForgeLight (the “Consultant”)
and the Company’s Former Chief Executive Officer (“Former CEO”), Mr. Wade Davis, entered into
a management services agreement with UHI and the Company dated January 28, 2021. The term
of the management services agreement was indefinite, subject to certain rights of termination and
resignation by either party. In compensation for the services provided under the management
services agreement, the Company agreed to pay the Consultant an annual management services
fee of $3.0 million, a supplemental fee in a target amount of 100% of the management services
fee, certain aircraft allowances and certain other benefits. In addition, the Consultant holds an
equity grant of Class C subordinated common stock of 842,128 shares of TelevisaUnivision. The
shares of Class C subordinated common stock issued in the equity grant were subject to time-
based vesting and automatic vesting upon the occurrence of certain specified events. On
September 18, 2024, in connection with the transition of Mr. Davis from the role of the Company’s
Chief Executive Officer (“CEO”), the Company entered into a CEO Severance and Release
Agreement with Mr. Davis and the Consultant (the “CEO Severance and Release Agreement”),
pursuant to which the Management Services Agreement was terminated effective September 19,
2024. As of December 31, 2024, the Consultant has vested in 842,128 of the Class C subordinated
stock, and pursuant to the terms of the CEO Severance Agreement, these shares will be
exchanged into shares of Class A common stock of TelevisaUnivision on the one-year anniversary
of Mr. Davis's transition at an exchange rate based on the fair market value of such shares.
Following Mr. Davis's transition, pursuant to the terms of the CEO Severance and Release
Agreement, TelevisaUnivision has agreed to pay a termination fee of 150% of the management
services fee over the twelve months following the date of his transition, a prorated portion of the
supplemental fee and the continuation of certain other benefits. In addition, the Company entered
into a consulting agreement with Mr. Davis for a period of one year with a consulting fee of $2.0
million, payable annually. Pantaya Transaction On September 13, 2022, the Company acquired a
100% equity interest in Pantaya, LLC (“Pantaya”) from a subsidiary of Searchlight, (see Note 13
Acquisitions). As part of this acquisition, the Company signed an agreement with the subsidiary of
Searchlight to provide certain consulting services related to the operations of the radio stations
transferred as part of the Pantaya acquisition. Televisa Transactions In conjunction with the
TelevisaUnivision Transaction, the Company entered into an agreement to provide free advertising
for use by Televisa and its subsidiaries at no cost for promotion of the soccer team and related
assets of Club Fútbol América, S.A. de C.V., a subsidiary of Televisa, through the 2025/2026
Mexican soccer season, which was determined to have a fair value of $45.7 million. As of
December 31, 2024, and 2023, the remaining deferred balance was $15.7 million and $26.2
million, respectively. See Note 9 Revenue Recognition. For the years ended December 31, 2024,
2023, and 2022, the Company satisfied its commitment to provide advertising and promotion time
at no charge to Televisa for the periods resulting in revenue recognized of $10.6 million, $10.3
million and $10.0 million, respectively. The deferred revenue is earned and revenue is recognized
as advertising revenue as the related advertising and promotion time is provided. The Company
modified terms and conditions of an advertising revenue arrangement with Televisa affiliates
effective January 1, 2024, which resulted in the Company becoming a principal in these
arrangements. Revenue was recognized on a gross basis effective January 1, 2024, the effect
increased revenue by $50.0 million for the year ended December 31, 2024. For the year ended 33
December 31, 2024, the Company recorded gross advertising revenue and the related expenses
of $56.5 million and $56.3 million, respectively. As a result of the TelevisaUnivision Transaction, the
Company and its subsidiaries, and Televisa and its subsidiaries, have entered into a number of
commercial agreements with respect to certain broadcasting rights, licenses, leasing agreements,
and transition services. The following table lists the significant related party arrangements between
the Company and Televisa and its affiliates as of December 31, 2024 and December 31, 2023:
Description Consolidated Balance Sheet Location December 31, 2024 December 31, 2023
Accounts receivable (a).................................... Accounts receivable, net $ 30,000 $ 64,800 Prepaid
assets................................................... Prepaid expenses and other 5,600 — Accrued
interest............................................... Accounts payable & accrued liabilities 83,700 — Accrued
expenses (a)....................................... Accounts payable & accrued liabilities 22,400 101,300
Televisa deferred advertising - current............ Deferred revenue 11,000 10,600 Televisa deferred
advertising - non-current..... Deferred revenue (non-current) 4,700 15,600 Note Payable -
current...................................... Current portion of long-term debt and finance lease obligations
74,100 106,100 Note Payable - non-current.............................. Long-term debt and finance lease
obligations — 92,600 Finance lease obligation - current.................... Current portion of long-term
debt and finance lease obligations 7,900 13,500 Finance lease obligation - non-current.............
Long-term debt and finance lease obligations 313,800 353,500 Accrued
interest............................................... Other long-term liabilities — 74,800 (a) Accounts receivable
primarily relates to advertising and subscription revenue with Televisa and its affiliates. The
Company recognized $338.9 million and $365.8 million primarily of subscription revenue from
Televisa for the years ended December 31, 2024, and 2023, respectively. The Company
recognized $124.3 million primarily related to depreciation expense and interest expense related to
leases, interest expense related to the note payable and other administrated services from Televisa
and its affiliates for the year ended December 31, 2024. The Company recognized $224.8 million
of expenses primarily related to depreciation expense and interest expense related to leases,
interest expense related to the note payable and other administrated services from Televisa and its
affiliates for the year ended December 31, 2023. The Company recognized $223.7 million of
expenses primarily related to license fees, depreciation expense and interest expense related to
leases, interest expense related to the note payable and other administrated services from Televisa
and its affiliates for the year ended and December 31, 2022. Accrued expenses primarily relates to
administrative services provided by Televisa and its affiliates, net of certain related party
receivables. For the years ended December 31, 2024, and 2023, the Company paid $212.2 million
and $308.0 million, respectively to Televisa and its affiliates. Univision Holdings, Inc. and
TelevisaUnivision, Inc. During the year ended December 31, 2024, 2023, and 2022, the Company
paid Series B cumulative preferred stock dividends of $41.3 million, $41.3 million and $37.8 million,
respectively. During the year ended December 31, 2022, the Company repurchased shares of
common stock of $13.3 million and made tax payments related to net share settlement equity
awards to Univision employees of $4.1 million. 34
15. Debt Long-term debt consists of the following: December 31, 2024 December 31, 2023 Bank
senior secured revolving credit facility maturing in 2025 .............................................. $ — $ —
Bank senior secured revolving credit facility maturing in 2027 .............................................. — —
Bank senior secured term loan facility maturing in 2026 ........................................................ —
1,899,700 2022 Term Loan A Facility maturing in 2027
......................................................................... 804,900 750,500 2022 Bank senior secured term
loan facility maturing in January 2029.................................. 992,100 995,500 2024 Bank senior
secured term loan facility maturing in January 2029.................................. 489,300 — 2022 Term
Loan B Facility maturing in June 2029 ................................................................. 476,300 478,300
Senior Secured Notes: 5.125% Senior Secured Notes due 2025
............................................................................. — 342,500 6.625% Senior Secured Notes due
2027 ............................................................................. 1,544,900 1,561,900 8.000% Senior
Secured Notes due 2028 ............................................................................. 1,433,700 1,191,100
4.500% Senior Secured Notes due 2029 .............................................................................
1,039,300 1,036,800 7.375% Senior Secured Notes due 2030
............................................................................. 893,800 892,500 8.500% Senior Secured Notes
due 2031 ............................................................................. 1,244,900 — Accounts receivable
facility maturing in 2026......................................................................... 100,000 100,000 Note
payable to Grupo Televisa............................................................................................... 74,100
198,700 Finance lease
............................................................................................................................ 390,000 425,000
Other long-term debt................................................................................................................ 5,200
7,100 9,488,500 9,879,600 Less current
portion.................................................................................................................. (158,600)
(308,500) Long-term debt and finance lease and other
obligations.......................................................... $ 9,329,900 $ 9,571,100 As of December 31, 2024
and 2023, UCI presented deferred financing costs of $79.7 million and $83.1 million, respectively,
as a direct reduction of the long-term debt in the consolidated balance sheet. At December 31,
2024 and 2023, other assets include $0.7 million and $1.0 million, respectively, of deferred
financing costs related to the UCI's revolving credit facilities. 35
The following table details the principal and carrying amounts of the UCI's long-term debt as of
December 31, 2024. The difference between principal and carrying amount is made up of the
$79.7 million of deferred financing costs discussed above and $38.7 million of unamortized fair
value adjustments resulting from the prior period purchase accounting and the premium or
discount arising from the new debt issuance. Principal Fair Value Adjustments/ (Discount) and
(Deferred Financing Costs) Carrying Amount Bank senior secured term loan facility maturing in
2026 ................................ $ — $ — $ — 2022 Term Loan A Facility maturing in 2027
................................................. 808,400 (3,500) 804,900 2022 Bank senior secured term loan
facility maturing in January 2029.......... 1,021,100 (29,000) 992,100 2024 Bank senior secured
term loan facility maturing in January 2029.......... 497,500 (8,200) 489,300 2022 Term Loan B
Facility maturing in June 2029......................................... 487,500 (11,200) 476,300 Senior Secured
Notes: 6.625% Senior Secured Notes due 2027 ..................................................... 1,500,000
44,900 1,544,900 8.000% Senior Secured Notes due 2028 .....................................................
1,440,700 (7,000) 1,433,700 4.500% Senior Secured Notes due 2029
..................................................... 1,050,000 (10,700) 1,039,300 7.375% Senior Secured Notes
due 2030 ..................................................... 900,000 (6,200) 893,800 8.500% Senior Secured
Notes due 2031 ..................................................... 1,255,000 (10,100) 1,244,900 Accounts
receivable facility maturing in 2026 ................................................ 100,000 — 100,000 Note
payable with Grupo Televisa................................................................... 74,100 — 74,100 Finance
lease.................................................................................................... 390,000 — 390,000 Other
long-term debt........................................................................................ 5,200 — 5,200
Total................................................................................................................. $ 9,529,500 $
(41,000) $ 9,488,500 Debt Instruments 2024 Financing Transactions On October 7, 2024, UCI
issued an additional $755.0 million aggregate principal amount of its existing 8.500% senior notes
due July 31, 2031 (the “additional 2031 senior notes”). The additional 2031 senior notes were
issued under the same indenture governing the 2031 senior notes, have the same terms as the
2031 senior notes and are treated as a single series with the 2031 senior notes. The additional
2031 senior notes were priced at par. UCI concurrently used the proceeds to redeem all of the
remaining outstanding 2026 term loans due March 15, 2026. On September 16, 2024, UCI used
proceeds from its Tower Assets Sale to make a $150.0 million partial repayment of the 2026 term
loans. On June 7, 2024, UCI issued $500.0 million aggregate principal amount of its 8.500% senior
notes due July 31, 2031 (the “2031 senior notes”). UCI concurrently used the proceeds to make a
$500.0 million partial repayment of the 2026 term loans. On June 6, 2024, UCI entered into an
amendment to its 2007 Credit Agreement, pursuant to which $500.0 million aggregate principal
amounts of its 2026 term loans was converted into a new tranche made up of a bank senior
secured term loan facility maturing in 2029 (the “2029 new term loans”). UCI concurrently utilized
the proceeds of the 2029 new term loans to make a $500.0 million partial repayment of the 2026
term loans. On January 22, 2024, UCI issued an additional $240.7 million aggregate principal
amount of its existing 8.000% senior notes due August 15, 2028 (the “additional 2028 senior
notes”). The additional 2028 senior notes were issued under the same indenture governing the
2028 senior notes, have the same terms as the 2028 senior notes and are treated as a single
series with the 2028 senior notes. The additional 2028 senior notes were priced at 101.000%. UCI
concurrently used the proceeds to redeem all of the remaining outstanding 5.125% senior notes
due 2025. On January 4, 2024, UCI issued senior secured debt of $100.0 million made up of a
bank senior secured term loan A facility maturing in 2027 (subject to the Springing Maturity Date
(as defined below)), which constitutes part of the same class of indebtedness as the Term Loan A
Facility under the 2007 Credit Agreement (the “January 2024 Term Loan A Facility”). UCI
concurrently utilized 36
the proceeds of the January 2024 Term Loan A Facility to make a $100.0 million partial redemption
of the 5.125% senior notes due 2025. 2023 Financing Transactions On December 18, 2023, UCI
issued an additional $700.0 million aggregate principal amount of its existing 8.000% senior notes
due August 15, 2028 (the “December 2023 senior notes”). The December 2023 senior notes were
issued under the same indenture governing the initial 2028 senior notes (as defined below), have
the same terms as the initial 2028 senior notes and are treated as a single series with the initial
2028 notes. The December 2023 senior notes were priced at 100.500%. UCI concurrently used the
proceeds to make a $700.0 million partial redemption of the 5.125% senior notes due 2025. On
August 28, 2023, UCI issued senior secured debt of $100.0 million made up of a bank senior
secured term loan A facility maturing in 2027 (subject to the Springing Maturity Date (as defined
below)), which constitutes part of the same class of indebtedness as the Term Loan A Facility
under the 2007 Credit Agreement (the “August 2023 Term Loan A Facility”). UCI concurrently
utilized the proceeds of the August 2023 Term Loan A Facility to make a $100.0 million partial
redemption of the 5.125% senior notes due 2025. On August 7, 2023, UCI issued $500.0 million
8.000% senior notes due August 15, 2028 (the “initial 2028 senior notes”). UCI concurrently used
the proceeds to prepay all of the $161.3 million the remaining balance of the bank senior secured
term B facility maturing in 2024 (the “2024 term loans”) and to make a $338.7 million partial
redemption of the 5.125% senior notes due 2025. On July 26, 2023, UCI issued senior secured
debt of $100.0 million made up of a bank senior secured term loan A facility maturing in 2027
(subject to the Springing Maturity Date (as defined below)), which constitutes part of the same
class of indebtedness as the Term Loan A Facility under the 2007 Credit Agreement (the “July 2023
Term Loan A Facility”). UCI concurrently utilized the proceeds of the July 2023 Term Loan A Facility
to make a $100.0 million partial prepayment of the 2024 term loans. On June 30, 2023, UCI issued
senior secured debt of $100.0 million made up entirely of a bank senior secured term loan A facility
maturing in 2027 (subject to the Springing Maturity Date (as defined below)), which constitutes part
of the same class of indebtedness as the Term Loan A Facility under the 2007 Credit Agreement
(as defined below) (the “June 2023 Term Loan A Facility”). UCI utilized the proceeds of the June
2023 Term Loan A Facility to make a $100.0 million partial prepayment of the 2024 term loans.
Senior Secured Credit Facilities Bank senior secured revolving credit facility — At December 31,
2024, UCI had no outstanding balance on the bank senior secured revolving credit facility and UCI
had $610.0 million available for borrowing under its bank senior secured revolving credit facility
following the June 2022 Amendment (as defined below). On June 24, 2020, UCI entered into an
amendment (the “June 2020 Amendment”) to the 2007 Credit Agreement governing UCI’s bank
senior secured revolving credit facility and bank senior secured term loan facility, which are
referred to collectively as the “Senior Secured Credit Facilities.” The June 2020 Amendment,
among other things, (a) provided for a new class of revolving credit commitments that refinanced
and decreased the commitments under the then existing bank senior secured revolving credit
facility from $850.0 million to $610.0 million (with a letter of credit sub-facility thereunder of $175.0
million), subject to an unused commitment fee in an amount equal to 0.35% per annum on the
average unused daily revolving credit balance, which matures on April 30, 2025 (subject to an
earlier maturity if certain indebtedness of UCI is not repaid or refinanced on or prior to the dates set
forth in the credit agreement), and (b) facilitated the incurrence of replacement term loans in an
aggregate principal amount of approximately $2.0 billion (the “2026 term loans”) to refinance a
portion of the 2024 term loans, with the replacement term loans having a maturity date of March
15, 2026 and amortizing at 1.0% per annum on a quarterly basis, commencing on September 30,
2020. The revolver drawings bear interest at SOFR (with no floor) and a margin of 3.75% per
annum or an alternate base rate and a margin of 2.75% per annum (in each case, with leverage-
based step downs consistent with the 2007 Credit Agreement), and the replacement term loans
bear interest at SOFR (with a SOFR floor of 1.00% per annum) plus an applicable margin of 3.75%
per annum or an alternate base rate and a margin of 2.75% per annum (with no leveraged-based
step downs). Approximately $1,922.7 million of 2024 term loans were not amended in the June
2020 Amendment and continued to have a maturity date of March 15, 2024 and bear interest at the
rates otherwise set forth in the existing credit agreement. The full $1,922.7 million balance was
subsequently repaid with proceeds from the applicable 2022 and 2023 refinancing transactions
described above. 37
As a result of the amendment UCI entered into on July 7, 2021 to the 2007 Credit Agreement (the
“July 2021 Amendment”), a portion of UCI’s existing term loans, to the extent not prepaid at the
election of the Lenders, were converted into a new tranche of term loans, in an aggregate principal
amount of approximately $1,963.8 million as of March 31, 2021 having a maturity date of March
15, 2026 (on and after the effectiveness of the July 2021 Amendment, the “2026 Term Loans”). The
July 2021 Amendment decreased, upon the consummation of the TelevisaUnivision Transaction,
the interest rate payable on such term loans to a percentage per annum of either (i) an adjusted
LIBOR rate plus 3.25% or (ii) an alternate base rate (defined as the highest of (x) The Wall Street
Journal prime rate, (y) the federal funds effective rate plus 0.50% per annum and (z) the one-
month adjusted LIBOR rate plus 1%) plus 2.25%. For interest periods starting after the cessation of
LIBOR on June 30, 2023, the 2026 term loans bear interest at adjusted Term SOFR plus a margin
of 3.25% per annum with a 0.75% per annum SOFR floor or an alternate base rate plus a margin
of 2.25% per annum. The July 2021 Amendment also made additional changes to align the
material terms of the 2007 Credit Agreement with the 2029 Term Loan Facility upon the effective
date of the 2022 Credit Agreement. On June 24, 2022, UCI entered into an amendment (the “June
2022 Amendment”) to its Senior Secured Credit Facilities to, among other things, establish a new
class of revolving credit commitments in an aggregate principal amount of $522.0 million, which
have a five year maturity date (subject to an earlier maturity if certain indebtedness of UCI is not
repaid or refinanced on or prior to the dates set forth in the credit agreement; such earlier date, the
“Springing Maturity Date”) and accrue interest at the Term SOFR rate with an interest rate margin
tied to UCI’s leverage ratio ranging from 2.75%-3.75% per annum for Term SOFR loans and
ranging from 1.75%-2.75% per annum for base rate loans (each with leverage-based step downs),
which replace substantially all of the existing senior secured revolving credit facility described
above, with exception to Deutsche Bank AG New York Branch’s $88.0 million commitment which
matures on April 30, 2025 (subject to the springing maturity date provided in the June 2020
Amendment); provided that, UCI may, in its sole discretion and subject to the terms of the Senior
Secured Credit Facilities, elect to terminate any of such non-extended commitments under the
bank senior secured revolving credit facility altogether and/or cause any of such non-extended
commitments to be assigned to a lender who will cause them to be a part of the new class of
revolving credit commitments. The extended senior secured revolving credit facility and non-
extended senior secured revolving credit facility are collectively referred to as the “senior secured
revolving credit facilities”. Bank senior secured term loan facility maturing in 2024 – On June 24,
2022, UCI partially prepaid the principal balance of $1,130.0 million of the 2024 term loan using the
proceeds from the issuance of 2022 Term Loan A Facility, the 2022 Term Loan B Facility and the
initial 2030 notes. On August 26, 2022, UCI used the net proceeds from the additional 2030 notes
issuance to prepay an additional $406.0 million of the 2024 term loans. On June 30, 2023, UCI
partially prepaid the principal balance of $100.0 million using the proceeds from the issuance of the
June 2023 Term Loan A Facility. On July 26, 2023, UCI partially prepaid the principal balance of
$100.0 million using the proceeds from the issuance of the July 2023 Term Loan A Facility. On
August 7, 2023, UCI fully prepaid all of the remaining principal balance of $161.3 million using
proceeds from the issuance of the initial 2028 senior notes. The interest rate payable on such term
loans was equal to a percentage per annum of either (i) an adjusted LIBOR rate plus 2.75% or (ii)
an alternate base rate (defined as the highest of (x) The Wall Street Journal prime rate, (y) the
federal funds effective rate plus 0.50% per annum and (z) the one-month adjusted LIBOR rate plus
1%) plus 1.75%. Bank senior secured term loan facility maturing in 2026 – In July 2021, UCI
entered into an amendment of its senior secured credit agreement to reprice the 2026 term loans
to LIBOR plus a margin of 3.25% per annum with a 0.75% per annum LIBOR floor. For interest
periods starting after the cessation of LIBOR on June 30, 2023, the 2026 term loans bear interest
at adjusted Term SOFR plus a margin of 3.25% per annum with a 0.75% per annum SOFR floor or
an alternate base rate and a margin of 2.25% per annum. The repriced 2026 term loans have a
maturity date of March 15, 2026 and amortize at 1.0% per annum on a quarterly basis,
commencing on September 30, 2021. On June 6, 2024, UCI partially prepaid the principal balance
of $500.0 million using the proceeds from the issuance of the 2029 new term loans. On June 7,
2024, UCI used the net proceeds from the 2031 notes issuance to prepay an additional $500.0
million of the 2026 term loans. On September 16, 2024, UCI used proceeds from the Tower Assets
Sale to make a $150.0 million partial repayment of the 2026 term loans. On October 7, 2024, UCI
fully prepaid all of the remaining principal balance of $752.4 million using proceeds from the
issuance of the additional 2031 senior notes. Bank senior secured term loan facility maturing in
2027 - On June 24, 2022, UCI entered into the June 2022 Amendment to its Senior Secured Credit
Facilities to, among other things, (a) establish a non-fungible tranche of senior secured “term A”
loans (the “Term Loan A Facility”) and (b) make a prepayment of the 2024 term loans. The Term
Loan A Facility has a five-year maturity date (subject to the Springing Maturity Date) and has an
interest rate margin tied to UCI’s leverage ratio ranging from 2.75%-3.75% per annum for Term
SOFR loans and ranging from 1.75%-2.75% per annum for base rate loans (each with leverage-
based step downs). The loans under the Term Loan A Facility amortize at 5.0% per annum on a
quarterly basis, commencing on September 30, 2022. UCI used the proceeds from the issuance of
the Term Loan A Facility to fund the partial prepayment of the 2024 terms loans. The partial
prepayment occurred concurrently with the closing of the Term Loan A Facility on June 24, 2022.
38
On June 30, 2023, UCI issued a $100.0 million bank senior secured term loan A facility maturing in
2027 (subject to the Springing Maturity Date), which constitutes part of the same class of
indebtedness as the Term Loan A Facility under the 2007 Credit Agreement (the June 2023 Term
Loan A Facility). The loans under the June 2023 Term Loan A Facility bear interest and amortize at
the same rates as the loans under the 2022 Term Loan A Facility. UCI used the proceeds from the
issuance of the June 2023 Term Loan A Facility to make a partial prepayment of the 2024 term
loans. The partial prepayment occurred concurrently with the closing of the June 2023 Term Loan A
Facility on June 30, 2023. On July 26, 2023, UCI issued a $100.0 million bank senior secured term
loan A facility maturing in 2027 (subject to the Springing Maturity Date), which constitutes part of
the same class of indebtedness as the Term Loan A Facility under the 2007 Credit Agreement (the
July 2023 Term Loan A Facility). The loans under the July 2023 Term Loan A Facility bear interest
and amortize at the same rates as the loans under the 2022 Term Loan A Facility. UCI used the
proceeds from the issuance of the July 2023 Term Loan A Facility to make a partial prepayment of
the 2024 term loans. The partial prepayment occurred concurrently with the closing of the July
2023 Term Loan A Facility on July 26, 2023. On August 28, 2023, UCI issued a $100.0 million bank
senior secured term loan A facility maturing in 2027 (subject to the Springing Maturity Date), which
constitutes part of the same class of indebtedness as the Term Loan A Facility under the 2007
Credit Agreement (the August 2023 Term Loan A Facility). The loans under the August 2023 Term
Loan A Facility bear interest and amortize at the same rates as the loans under the 2022 Term
Loan A Facility. UCI used the proceeds from the issuance of the August 2023 Term Loan A Facility
to make a partial prepayment of the 5.125% senior notes due 2025. The partial prepayment
occurred concurrently with the closing of the August 2023 Term Loan A Facility on August 28, 2023.
On January 4, 2024, UCI issued senior secured debt of $100.0 million made up of a bank senior
secured term loan A facility maturing in 2027 (subject to the Springing Maturity Date), which
constitutes part of the same class of indebtedness as the Term Loan A Facility under the 2007
Credit Agreement (the “January 2024 Term Loan A Facility”). The loans under the January 2024
Term Loan A Facility bear interest and amortize at the same rates as the loans under the 2022
Term Loan A Facility. UCI concurrently utilized the proceeds of the January 2024 Term Loan A
Facility to make a $100.0 million partial redemption of the 5.125% senior notes due 2025. The
partial prepayment occurred concurrently with the closing of the January 2024 Term Loan A Facility
on January 29, 2024. As of December 31, 2024, the total aggregate principal amount of the Term
Loan A Facility was $808.4 million, which includes the issuance of January 2024 Term Loan A
Facility discussed above, and the unamortized deferred financing costs balance was $3.5 million.
2022 Bank senior secured term loan facilities maturing in 2029 – On January 31, 2022, UCI
entered into the 2022 Credit Agreement, which initially provided for the January 2029 term loans
that were funded in full in connection with the closing of the TelevisaUnivision Transaction on
January 31, 2022. UCI may choose to pay interest on the January 2029 term loans at either a
SOFR-based rate (with a SOFR floor of 0.75%) or a base rate, in each case plus a margin of (i)
2.250% per annum for base rate loans or (ii) 3.250% per annum for SOFR rate loans. The January
2029 term loans are subject to amortization in equal quarterly installments (commencing on June
30, 2022) of principal in an aggregate amount equal to 1.00% per annum, with the remaining
balance payable at the final date of maturity. The January 2029 term loans are guaranteed by
Broadcast Holdings and UCI’s material, wholly-owned restricted domestic subsidiaries (subject to
certain exceptions), and are secured by, among other things, substantially all of the assets of UCI,
Broadcast Holdings and UCI’s material, wholly-owned restricted domestic subsidiaries (subject to
certain exceptions). The priority of security interests and related creditors’ rights for the January
2029 term loans are set forth in an intercreditor agreement. As of December 31, 2024, the total
aggregate principal amount of the January 2029 term loans was $1,021.1 million, and the
unamortized deferred financing costs balance was $29.0 million. On June 24, 2022, UCI entered
into the June 2022 Amendment of the 2022 Credit Agreement to, among other things, (a) establish
a new class of incremental first lien term B loans constituting the 2022 Term Loan B Facility and (b)
make a prepayment of the 2024 term loans (the term loans outstanding under the 2022 Credit
Agreement, as amended, are referred to collectively as the “2022 Term Loan Facility”). The loans
under the 2022 Term Loan B Facility bear an interest rate margin of 4.25% per annum for Term
SOFR loans and 3.25% per annum for base rate loans. The loans under the 2022 Term Loan B
Facility have a maturity date of June 24, 2029 and amortize at 1.0% per annum on a quarterly
basis, commencing on September 30, 2022. As of December 31, 2024, the total aggregate
principal amount of the 2022 Term Loan B Facility was $487.5 million, the unamortized deferred
financing costs balance were $2.6 million, and the unamortized discount was $8.6 million. The
2022 Credit Agreement provides for an incremental facility that UCI may use to add one or more
incremental term loan facilities, increase commitments under the existing term loan facility and/or
add one or more incremental revolving loan facilities by 39
up to (i) a fixed amount of $750.0 million, plus (ii) an unlimited amount of additional first-lien
obligations so long as the consolidated first-lien leverage ratio, on a pro forma basis, does not
exceed 6.00:1.00 or, if incurred in connection with an acquisition or other investment permitted
under the credit agreement, would be leverage neutral, plus (iii) an unlimited amount of additional
junior lien obligations, so long as the consolidated secured leverage ratio, on a pro forma basis,
does not exceed 7:00:1.00, plus (iv) an unlimited amount of additional unsecured debt, so long as
the consolidated total leverage ratio, on a pro forma basis, does not exceed 8.50:1.00, in each
case, subject to other customary conditions and exceptions. Additionally, UCI will be permitted to
further refinance (whether by repayment, conversion or extension) its existing Senior Secured
Credit Facilities and the 2022 Term Loan Facility (in addition to the new incremental facilities
described above) with certain permitted additional first-lien, second-lien, senior and/or
subordinated indebtedness, in each case if certain conditions are met. UCI used the net proceeds
from the 2022 Term Loan Facility as described above. In addition, mandatory prepayments will be
required to prepay amounts outstanding under the 2022 Term Loan Facility in an amount equal to:
• 100% (which percentage will be reduced upon the achievement of specified performance targets)
of net cash proceeds from certain asset dispositions by UCI or any of its restricted subsidiaries,
subject to certain exceptions, ratable sharing provisions and reinvestment provisions; and • 100%
of the net cash proceeds from the issuance or incurrence after the closing date of any additional
debt by UCI or any of its restricted subsidiaries (excluding debt permitted under the 2022 Credit
Agreement, other than any indebtedness which serves to refinance or extend indebtedness then
outstanding under the 2022 Credit Agreement, which shall be required to prepay loans as set forth
in such credit agreement). Voluntary prepayments of principal amounts outstanding under loans
governed by the 2022 Credit Agreement will be permitted at any time; however, if a prepayment of
principal is made with respect to an adjusted Term SOFR loan on a date other than the last day of
the applicable interest period, the lenders will require compensation for any funding losses and
expenses incurred as a result of the prepayment. The 2022 Credit Agreement contains restrictive
covenants which, among other things, limit the incurrence of additional indebtedness, investments,
dividends, transactions with affiliates, asset sales, acquisitions, mergers and consolidations,
prepayments of subordinated indebtedness, liens and encumbrances and other matters
customarily restricted in such agreements. The 2022 Credit Agreement does not contain any
financial maintenance covenant. The 2022 Credit Agreement contains customary events of default,
including without limitation, payment defaults, breaches of representations and warranties,
covenant defaults, cross-defaults to certain other indebtedness in excess of specified amounts,
certain events of bankruptcy and insolvency, judgment defaults in excess of specified amounts,
failure of any material provision of any guaranty or security document supporting the term loans
thereunder to be in full force and effect, and a change of control. UCI used the proceeds from the
issuance of the 2022 Term Loan B Facility to fund the partial prepayment of the 2024 term loans.
The partial prepayment occurred concurrently with the closing of the 2022 Term Loan B Facility on
June 24, 2022. For the year ended December 31, 2024, the effective interest rate related to UCI’s
senior secured term loans was 6.22% including the impact of interest rate swaps and 8.90%
excluding the impact of interest rate swaps. UCI is permitted to further refinance (whether by
repayment, conversion or extension) UCI’s senior secured credit facilities (including the extended
credit facilities) with certain permitted additional first-lien, second-lien, senior and/or subordinated
indebtedness, in each case, if certain conditions are met. Bank senior secured term loan facilities
maturing in 2029 – On June 6, 2024, UCI entered into an amendment to its 2007 Credit
Agreement, pursuant to which $500.0 million aggregate principal amount of its outstanding 2026
term loans were converted into a new tranche made up the 2029 new term loans. The 2029 new
term loans bear interest at adjusted Term SOFR plus a margin of 3.50% per annum with a 0.50%
per annum SOFR floor or an alternate base rate and a margin of 2.50% per annum with a 1.50%
per annum ABR floor. The 2029 new term loans are subject to amortization in equal quarterly
installments (commencing on September 30, 2024) of principal in an aggregate amount equal to
1.00% per annum, with the remaining balance payable at the final date of maturity, January 31,
2029. 40
As of December 31, 2024, the total aggregate principal amount of the 2029 term loans was $497.5
million, and the unamortized deferred financing costs balance was $4.0 million and the
unamortized discount was $4.2 million. 5.125% Senior Secured Notes due 2025 The 5.125%
senior notes due 2025 (the “5.125% 2025 senior notes”) were ten-year notes. On February 19,
2015, UCI issued $750.0 million aggregate principal amount of 5.125% 2025 senior notes,
pursuant to an indenture dated as of February 19, 2015. UCI issued an additional $810.0 million in
aggregate principal amount of the 5.125% 2025 notes on April 21, 2015. The 5.125% 2025 senior
notes mature on February 15, 2025 and pay interest on February 15 and August 15 of each year,
commencing on August 15, 2015. Interest on the 5.125% 2025 senior notes accrues at a fixed rate
of 5.125% per annum and is payable in cash. On September 5, 2017, UCI purchased $80.6 million
aggregate principal amount of its 5.125% 2025 senior notes through asset sale offers at a
purchase price of 100% of the principal amount thereof plus accrued and unpaid interest thereon
to, but not including, the date of purchase. As of December 31, 2024, the 5.125% 2025 senior
notes have been repaid. On August 7, 2023, UCI partially redeemed $338.7 million of the 5.125%
2025 senior notes, funding such partial redemption using net proceeds from the issuance of the
initial 2028 senior notes. On August 28, 2023, UCI partially redeemed $100.0 million of the 5.125%
2025 senior notes, funding such the partial redemption using the net proceeds from the issuance of
the August 2023 Term Loan A Facility. On December 18, 2023, UCI partially redeemed $700.0
million of the 5.125% 2025 senior notes, funding such partial redemption using net proceeds from
the issuance of the additional 2028 senior notes. On January 4, 2024, UCI partially redeemed
$100.0 million of the 5.125% 2025 senior notes, funding such partial redemption using the net
proceeds from the issuance of the January 2024 Term Loan A Facility. On January 29, 2024, UCI
redeemed all of the remaining outstanding amount of the 5.125% 2025 senior notes, funding such
redemption using the net proceeds from the issuance of the additional 2028 senior notes. 6.625%
Senior Secured Notes due 2027 On June 18, 2020, UCI issued $1,500.0 million aggregate
principal amount of 6.625% senior secured notes due 2027 (the “2027 senior notes”) at par, plus
accrued and unpaid interest from June 18, 2020. The 2027 senior notes will mature on June 1,
2027. UCI will pay interest on the 2027 senior notes at a fixed rate of 6.625% per annum semi-
annually in cash in arrears on June 1 and December 1 of each year, commencing on December 1,
2020. UCI may redeem the 2027 senior notes, at UCI’s option, in whole or in part, upon not less
than 10 nor more than 60 days’ notice at any time and from time to time at the redemption prices
forth below. The 2027 senior notes will be redeemable at the applicable redemption price
(expressed as percentages of principal amount of the 2027 senior notes to be redeemed) plus
accrued and unpaid interest thereon to, but excluding, the applicable redemption date if redeemed
during the twelve-month period beginning on June 1 of each of the following years: 2023
(103.313%), 2024 (101.656%) and 2025 and thereafter (100%). At any time prior to June 1, 2023,
UCI was able to redeem the 2027 senior notes at a redemption price equal to 100% of the principal
amount of the 2027 senior notes to be redeemed plus accrued and unpaid interest plus the greater
of (i) 1.0% of the principal amount and (ii) the excess, if any, of (A) an amount equal to the present
value at such redemption date of (1) the redemption price of such note at June 1, 2023, plus (2) all
required interest payments due on such note through June 1, 2023 (excluding accrued but unpaid
interest to, but excluding, the redemption date), computed using a discount rate equal to the
Treasury Rate (as defined in the indenture) as of such redemption date plus 50 basis points; over
(B) the principal amount of such note to be redeemed on such redemption date. At December 31,
2024, the outstanding principal balance of the 2027 senior notes was $1,500.0 million and the
unamortized fair value adjustment as a result of the Reorganization was $44.9 million. At any time,
or from time to time, until June 1, 2023, UCI was able, at UCI’s option, use the net cash proceeds
of one or more equity offerings to redeem up to 40% of the then outstanding aggregate principal
amount of the 2027 senior notes issued under the indenture at a redemption price equal to
106.625% of the aggregate principal amount thereof, plus accrued and unpaid interest thereon,
subject to certain conditions. In addition, if UCI undergoes a change of control, it may be required
to offer to purchase the 2027 senior notes from holders at a purchase price equal to 101% of the
principal amount plus accrued interest. Subject to certain exceptions and customary reinvestment
rights, UCI is required to offer to repay the 2027 senior notes at par with the proceeds of certain
assets sales. 41
UCI used the net proceeds from the issuance of the 2027 senior notes to fund the redemption of
the 5.125% senior secured notes due 2023 (the “2023 senior notes”), including related fees and
expenses. The redemption occurred on July 20, 2020. In addition, UCI prepaid $265.0 million
aggregate principal amount of the 2024 term loans with a portion of the proceeds of the 2027
senior notes. 8.000% Senior Secured Notes due 2028 On August 7, 2023, UCI issued $500.0
million aggregate principal amount of 8.000% senior notes due 2028, on December 18, 2023, UCI
issued an additional $700.0 million aggregate principal amount of the 8.000% senior notes due on
2028 at a premium of 100.500% and on January 22, 2024, UCI issued an additional $100.0 million
aggregate principal amount of the 8.000% senior notes due on 2028 at a premium of 101.000%
plus accrued and unpaid interest from August 7, 2023 (collectively, the “2028 senior notes”). The
2028 senior notes mature on August 15, 2028 UCI will pay interest on the 2028 senior notes at a
fixed rate of 8.000% per annum semi-annually in cash in arrears on February 15 and August 15 of
each year, commencing on February 15, 2024. UCI concurrently used the proceeds to prepay all of
the $161.3 million remaining balance of the 2024 term loans and to make a $1,279.4 million full
redemption of the 5.125% senior notes due 2025. The 2028 senior notes are jointly and severally
guaranteed by substantially all of UCI’s material, direct and indirect wholly-owned restricted
domestic subsidiaries (subject to certain exceptions) that guarantee its Senior Secured Credit
Facilities. The 2028 senior notes and the related guarantees are secured by a first priority lien,
subject to permitted liens, on substantially all of the assets of UCI and UCI’s material, wholly-
owned restricted domestic subsidiaries (subject to certain exceptions) and the guarantors’ property
and assets that secure obligations under UCI's Senior Secured Credit Facilities, UCI’s 2022 Term
Loan Facility and existing senior notes. At any time prior to August 15, 2025, UCI may redeem the
2028 senior notes at a redemption price equal to 100% of the principal amount of the 2028 senior
notes to be redeemed plus accrued and unpaid interest, if any, to, but excluding the applicable
redemption date plus the greater of (i) 1.0% of the principal amount of such note on the redemption
date and (ii) the excess, if any, of (A) an amount equal to the present value at such redemption
date of (1) the redemption price of such note at August 15, 2025, plus (2) all required interest
payments due on such note through August 15, 2025 (excluding accrued but unpaid interest to, but
excluding, the redemption date), computed using a discount rate equal to the Treasury Rate (as
defined in the indenture) as of such redemption date plus 50 basis points; over (B) the principal
amount of such note to be redeemed on such redemption date. If redeemed on or after August 15,
2025, UCI may redeem the 2028 senior notes at the redemption price set forth next to the
corresponding year, plus accrued and unpaid interest, if any, to, but excluding the applicable
redemption date: 2025 (104.000%), 2026 (102.000%), 2027 and thereafter (100.000%). At
December 31, 2024, the outstanding principal balance of the 2028 senior notes was $1,440.7
million and the unamortized deferred financing costs balance was $11.8 million and the
unamortized premium was $4.8 million. At any time, or from time to time, until August 15, 2025,
UCI may, at its option, use the net cash proceeds of one or more equity offerings to redeem up to
40% of the then outstanding aggregate principal amount of the 2028 senior notes issued under the
indenture at a redemption price equal to 108.000% of the aggregate principal amount thereof, plus
accrued and unpaid interest, if any, to, but excluding the applicable redemption date, provided that
(i) at least 50% of the aggregate principal amount of 2028 senior notes issued under the indenture
remains outstanding and (ii) UCI makes such redemption not more than 180 days after the closing
of any such equity offering. If UCI undergoes a change of control, it will be required to offer to
purchase the 2028 senior notes from holders at a purchase price equal to 101% of the principal
amount plus accrued interest, unless a third party makes an offer to purchase all of the 2028 senior
notes or UCI has previously or concurrently sent a redemption notice with respect to all the
outstanding 2028 senior notes. 4.500% Senior Secured Notes due 2029 On May 21, 2021, UCI
issued $1,050.0 million aggregate principal amount of 4.500% senior secured notes due 2029 (the
“2029 senior notes”) at par plus accrued and unpaid interest from May 21, 2021. The 2029 senior
notes will mature on May 1, 2029. UCI will pay interest on the Notes at a fixed rate of 4.500% per
annum semi-annually in cash in arrears on May 1 and November 1 of each year. UCI used the net
proceeds from the issuance of the notes to finance a portion of the TelevisaUnivision Transaction
and to pay certain related transaction fees and expenses. At December 31, 2024, the outstanding
principal balance of the 2029 senior notes was $1,050.0 million and the unamortized deferred
financing costs balance was $10.7 million. The Notes are jointly and severally guaranteed by
substantially all of UCI’s material, direct and indirect wholly-owned restricted domestic subsidiaries
(subject to certain exceptions) that guarantee its Senior Secured Credit Facilities. The Notes and
the related guarantees are secured by a first priority lien, subject to permitted liens, on substantially
all of the assets of UCI and UCI’s material, wholly-owned restricted domestic subsidiaries (subject
to certain exceptions) and the guarantors’ property and assets that secure obligations under UCI's
Senior Secured Credit Facilities, UCI’s 2022 Term Loan Facility and existing senior notes. 42
Upon consummation of the offering of the 2029 senior notes, (i) the net proceeds of this offering
were deposited into a segregated escrow account and (ii) UCI deposited into such escrow account
an amount of cash that, when taken together with the net proceeds of this offering, would have
been sufficient to fund a special mandatory redemption of the 2029 senior notes on April 13, 2022.
Upon the closing of the TelevisaUnivision Transaction on January 31, 2022, the proceeds of the
offering were used to pay a portion of the purchase price for the TelevisaUnivision Transaction and
the amounts deposited in respect of pre-funded interest were returned to UCI. UCI may redeem
the 2029 senior notes, at UCI’s option, in whole or in part, upon not less than 10 nor more than 60
days’ notice at any time and from time to time at the redemption prices forth below. The 2029
senior notes will be redeemable at the applicable redemption price (expressed as percentages of
principal amount of the 2029 senior notes to be redeemed) plus accrued and unpaid interest
thereon to, but excluding, the applicable redemption date if redeemed during the twelve-month
period beginning on May 1 of each of the following years: 2024 (102.250%), 2025 (101.125%) and
2026 and thereafter (100.000%). At any time prior to May 1, 2024, UCI may redeem the 2029
senior notes at a redemption price equal to 100% of the principal amount of the 2029 senior notes
to be redeemed plus accrued and unpaid interest plus the greater of (i) 1.0% of the principal
amount and (ii) the excess, if any, of (A) an amount equal to the present value at such redemption
date of (1) the redemption price of such 2029 senior note at May 1, 2024, plus (2) all required
interest payments due on such 2029 senior note through May 1, 2024 (excluding accrued but
unpaid interest to, but excluding, the redemption date), computed using a discount rate equal to
the Treasury Rate (as defined in the indenture) as of such redemption date plus 50 basis points;
over (B) the principal amount of such 2029 senior notes to be redeemed on such redemption date.
At any time, or from time to time, until May 1, 2024, UCI may, at UCI’s option, use the net cash
proceeds of one or more equity offerings to redeem up to 40% of the then outstanding aggregate
principal amount of the 2029 senior notes issued under the indenture at a redemption price equal
to 104.500% of the aggregate principal amount thereof, plus accrued and unpaid interest thereon,
provided that (i) at least 50% of the aggregate principal amount of the 2029 senior notes issued
under the indenture remains outstanding and (ii) UCI makes such redemption not more than 180
days after the consummation of any such equity offering. In addition, if UCI undergoes a change of
control, it may be required to offer to purchase the 2029 senior notes from holders at a purchase
price equal to 101% of the principal amount plus accrued interest. 7.375% Senior Secured Notes
due 2030 UCI issued $500.0 million aggregate principal amount of 7.375% senior secured notes
due 2030 on June 24, 2022, at an original issuance discount of 99.255%, plus accrued and unpaid
interest from June 24, 2022, and $400.0 million additional aggregate principal amount of the 2030
senior notes on August 26, 2022 at a premium of 101.500%, plus accrued and unpaid interest from
June 24, 2022 (collectively, the “2030 senior notes”). The 2030 senior notes will mature on June
30, 2030. UCI will pay interest on the 2030 senior notes at a fixed rate of 7.375% per annum semi-
annually in cash in arrears on June 30 and December 30 of each year, commencing December 30,
2022. At December 31, 2024, the outstanding principal balance of the 2030 senior notes was
$900.0 million, the unamortized deferred financing costs balance was $8.0 million and the
unamortized premium was $1.8 million. UCI may redeem the 2030 senior notes, at UCI’s option, in
whole or in part, upon not less than 10 nor more than 60 days’ notice at any time and from time to
time at the redemption prices set forth below. The Notes will be redeemable at the applicable
redemption price (expressed as percentages of principal amount of the 2030 senior notes to be
redeemed) plus accrued and unpaid interest thereon to, but excluding, the applicable redemption
date if redeemed during the twelve-month period beginning on June 30 of each of the following
years: 2025 (103.688%), 2026 (101.844%) and 2027 and thereafter (100.000%). At any time prior
to June 30, 2025, UCI may redeem the 2030 senior notes at a redemption price equal to 100% of
the principal amount of the 2030 senior notes to be redeemed plus accrued and unpaid interest
plus the greater of (i) 1.0% of the principal amount and (ii) the excess, if any, of (A) an amount
equal to the present value at such redemption date of (1) the redemption price of such note at
June 30, 2025, plus (2) all required interest payments due on such note through June 30, 2025
(excluding accrued but unpaid interest to, but excluding, the redemption date), computed using a
discount rate equal to the Treasury Rate (as defined in the indenture) as of such redemption date
plus 50 basis points; over (B) the principal amount of such note to be redeemed on such
redemption date. At any time, or from time to time, until June 30, 2025, UCI may use the net cash
proceeds of one or more equity offerings to redeem up to 40% of the then outstanding aggregate
principal amount of the notes issued under the indenture at a redemption price equal to 107.375%
of the aggregate principal amount thereof, plus accrued and unpaid interest thereon, provided that
(1) at least 50% of the aggregate principal amount of notes originally issued under the indenture
remains outstanding and (2) UCI makes such redemption not more than 180 days after the
consummation of any such equity offering. In addition, if UCI undergoes a 43
change of control, it may be required to offer to purchase the 2030 senior notes from holders at a
purchase price equal to 101% of the principal amount plus accrued interest. UCI used the net
proceeds from the issuance of the 2030 senior notes and the bank senior secured term loan facility
maturing in June 2029 to fund the redemption of all $370.0 million outstanding aggregate principal
amount of its 9.500% 2025 senior notes and discharged all obligations under the indenture
pursuant to which the 9.500% 2025 senior notes were issued. The redemption occurred
concurrently with the closing of the 2030 senior notes on June 24, 2022. 8.500% Senior Secured
Notes due 2031 UCI issued $500.0 million aggregate principal amount of 8.500% senior secured
notes due 2031 on June 7, 2024, at par, and on October 7, 2024, UCI issued an additional $755.0
million aggregate principal amount of the 8.500% senior notes due on 2031 at par, plus accrued
and unpaid interest from June 7, 2024 (collectively, the “2031 senior notes”). The 2031 senior
notes will mature on July 31, 2031. UCI will pay interest on the 2031 senior notes at a fixed rate of
8.500% per annum semi-annually in cash in arrears on January 31 and July 31 of each year,
commencing January 31, 2025. UCI may redeem the 2031 senior notes, at UCI’s option, in whole
or in part, upon not less than 10 nor more than 60 days’ notice at any time and from time to time at
the redemption prices set forth below. The Notes will be redeemable at the applicable redemption
price (expressed as percentages of principal amount of the 2031 senior notes to be redeemed)
plus accrued and unpaid interest thereon to, but excluding, the applicable redemption date if
redeemed during the twelve-month period beginning on July 31 of each of the following years:
2027 (104.250%), 2028 (102.125%) and 2029 and thereafter (100.000%). At any time prior to July
31, 2027, UCI may redeem the 2031 senior notes at a redemption price equal to 100% of the
principal amount of the 2031 senior notes to be redeemed plus accrued and unpaid interest plus
the greater of (i) 1.0% of the principal amount and (ii) the excess, if any, of (A) an amount equal to
the present value at such redemption date of (1) the redemption price of such note at July 31,
2027, plus (2) all required interest payments due on such note through July 31, 2027 (excluding
accrued but unpaid interest to, but excluding, the redemption date), computed using a discount
rate equal to the Treasury Rate (as defined in the indenture) as of such redemption date plus 50
basis points; over (B) the principal amount of such note to be redeemed on such redemption date.
At any time, or from time to time, until July 31, 2027, UCI may use the net cash proceeds of one or
more equity offerings to redeem up to 40% of the then outstanding aggregate principal amount of
the notes issued under the indenture at a redemption price equal to 108.500% of the aggregate
principal amount thereof, plus accrued and unpaid interest thereon, provided that (1) at least 50%
of the aggregate principal amount of notes originally issued under the indenture remains
outstanding and (2) UCI makes such redemption not more than 180 days after the consummation
of any such equity offering. In addition, if UCI undergoes a change of control, it may be required to
offer to purchase the 2031 senior notes from holders at a purchase price equal to 101% of the
principal amount plus accrued interest. UCI used the net proceeds from the issuance of the 2031
senior notes to fund the $1,255.0 million repayment of the 2026 term loans. At December 31, 2024,
the outstanding principal balance of the 2031 senior notes was $1,255.0 million and the
unamortized deferred financing costs balance was $10.1 million. Accounts Receivable Facility On
October 5, 2021, UCI renewed its accounts receivable sale facility (as amended, the “Facility”),
which, among other things, (i) extended the expiration date of the Facility to October 5, 2026, (ii)
increased the letter of credit sublimit to $160.0 million under the revolving component of the Facility
and (iii) lowered the interest rate on the borrowings under the Facility to a LIBOR market index rate
(with a floor of 0.00%) plus a margin of 1.40% per annum. Interest is paid monthly on the Facility.
On May 1, 2023, UCI entered into an amendment to the Facility to transition the interest rate on the
borrowings under the Facility to a SOFR market index rate plus a SOFR term adjustment and
margin of 1.40% per annum. Under the terms of the Facility, certain subsidiaries of UCI sell
accounts receivable on a true sale and non-recourse basis to their respective wholly-owned special
purpose subsidiaries, and these special purpose subsidiaries in turn sell such accounts receivable
to Univision Receivables Co., LLC, a bankruptcy-remote subsidiary in which certain special
purpose subsidiaries of UCI and its parent, Broadcasting Partners, each holds a 50% voting
interest (the “Receivables Entity”). Thereafter, the Receivables Entity sells to investors, on a
revolving non-recourse basis, senior undivided interests in such accounts receivable pursuant to
the Receivables Purchase Agreement. UCI (through certain special purpose subsidiaries) holds a
100% economic interest in the Receivables Entity. 44
The assets of the special purpose entities and the Receivables Entity are not available to satisfy
the obligations of UCI or its other subsidiaries. The Facility is comprised of a $100.0 million term
component and a $300.0 million revolving component that is subject to the availability of qualifying
receivables. At December 31, 2024, UCI had $100.0 million outstanding under the term component
and none outstanding under the revolving component, and the interest rate was 5.832% applicable
to both the term component and the revolving component. In addition, at December 31, 2024, there
was $8.6 million of outstanding letters of credit against the accounts receivable revolving
component resulting in $291.4 million being available for borrowing under the accounts receivable
revolving facility. In addition, the Receivables Entity is obligated to pay a commitment fee to the
purchasers, such fee to be calculated based on the unused portion of the Facility. The Receivables
Purchase Agreement contains customary default and termination provisions, which provide for the
early termination of the Facility upon the occurrence of certain specified events including, but not
limited to, failure by the Receivables Entity to pay amounts due, defaults on certain indebtedness,
change in control, bankruptcy and insolvency events. The Receivables Entity is consolidated in
UCI’s consolidated financial statements. Note Payable to Grupo Televisa As of December 31,
2024, UCI (through one of its wholly-owned subsidiaries) has an unsecured note payable to Grupo
Televisa with an outstanding principal balance of $74.1 million with a final maturity date of April 30,
2026. The loan has payment dates on October 31 of 2023, 2024, 2025 and April 30, 2026. The
note payable has a fixed annual interest rate of 12.8%. The outstanding principal balance is
translated from Mexican pesos to U.S. dollars at the spot rate at each consolidated balance sheet
date. UCI repaid $90.7 million and $136.4 million of the note payable on October 31, 2024 and
2023, respectively. Other long-term debt As of December 31, 2024, UCI has bank loans with
outstanding principal balance of $5.2 million. The outstanding principal balance is translated from
Mexican pesos to U.S. dollars at the spot rate. Loss (gain) on refinancing of debt For the year
ended December 31, 2024, the Company recorded a loss on refinancing of debt of $9.4 million,
due to the write-off of unamortized deferred financing costs and unamortized discount that relates
to the redemption of the 2026 term loans, partially offset by write-off of unamortized premium and
Reorganization fair value adjustment for the redemption of all of the remaining outstanding 5.125%
Senior Notes due 2025. For the year ended December 31, 2023, the Company recorded a gain on
refinancing of debt of $6.9 million, due to the write-off of unamortized premium for the partial
redemption of the 5.125% Senior Notes due 2025 and paid down 2024 Term Loan. For the year
ended December 31, 2022, the Company recorded a gain on refinancing of debt of $5.4 million, as
a result of the redemption of the 9.5% Senior Notes due 2025 and the write-off of unamortized
premium of the partially paid down 2024 Term Loan. Other Matters Related to Debt Voluntary
prepayment of principal amounts outstanding under the Senior Secured Credit Facilities and/or the
2022 Term Loan Facility is permitted at any time; however, if a prepayment of principal is made
with respect to an adjusted LIBOR loan on a date other than the last day of the applicable interest
period, the lenders will require compensation for any funding losses and expenses incurred as a
result of the prepayment. Additionally, as noted above, certain prepayments of the 2022 Term Loan
Facility during the first six months of the 2022 Term Loan Facility may require the payment of a
1.00% prepayment premium on the amounts so prepaid. The agreements governing the Senior
Secured Credit Facilities, the 2022 Term Loan Facility and the senior secured notes contain
various covenants and a breach of any covenant could result in an event of default under those
agreements. If any such event of default occurs, the lenders of the Senior Secured Credit
Facilities, the 2022 Term Loan Facility or the holders of the senior secured notes may elect (after
the expiration of any applicable notice or grace periods) to declare all outstanding borrowings,
together with accrued and unpaid interest and other amounts payable thereunder, to be
immediately due and payable. In addition, an event of default under the indentures governing the
senior secured notes would cause an event of default under the Senior Secured Credit Facilities
and the 2022 Term Loan Facility, and the acceleration of debt under the Senior Secured Credit
Facilities and/or the 2022 Term Loan Facility or the failure to pay that debt when due would cause
an event of default under the indentures governing the senior secured notes (assuming certain
amounts of that debt were outstanding at the time). The lenders under the Senior Secured Credit
Facilities also have the right upon an event of default thereunder to terminate any commitments
they have to provide further borrowings. Further, following an event of default under the Senior
Secured Credit Facilities, the lenders will have the right to proceed against the collateral. The
Senior Secured Credit Facilities, the 2022 Term Loan Facility, the 2031 senior notes, the 2030
senior notes, the 2029 senior notes, the 2028 45
senior notes, the 2027 senior notes, the 9.5% 2025 senior notes, and the 5.125% 2025 senior notes are
secured by, among other things (a) a first priority security interest in substantially all of the assets of UCI, and
UCI’s material restricted domestic subsidiaries (subject to certain exceptions), as defined, including without
limitation, all receivables, contracts, contract rights, equipment, intellectual property, inventory, and other
tangible and intangible assets, subject to certain customary exceptions; (b) a pledge of (i) all of the present
and future capital stock of each subsidiary guarantor’s direct domestic subsidiaries and the direct domestic
subsidiaries of UCI and (ii) 65% of the voting stock of each of UCI’s and each guarantor’s material direct
foreign subsidiaries, subject to certain exceptions; and (c) all proceeds and products of the property and
assets described above. In addition, the Senior Secured Credit Facilities and the 2022 Term Loan Facility (but
not the Notes, the 2031 senior notes, the 2030 senior notes, the 2029 senior notes, the 2028 senior notes, the
2027 senior notes, 9.5% 2025 senior notes, or the 5.125% 2025 senior notes) are secured by all of the assets
of Broadcast Holdings and a pledge of the capital stock of UCI and all proceeds of the foregoing. Additionally,
the agreements governing the Senior Secured Credit Facilities, the 2022 Term Loan Facility and the senior
secured notes include various restrictive covenants (including in the credit agreement governing the Senior
Secured Credit Facilities when there are certain amounts outstanding under the senior secured revolving
credit facility thereunder on the last day of a fiscal quarter, a first lien debt ratio covenant) which, among other
things, limit the incurrence of indebtedness, making of investments, payment of dividends, transactions with
affiliates, asset sales, acquisitions, mergers and consolidations, prepayments of other indebtedness, liens and
encumbrances and other matters customarily restricted in such agreements. The credit agreements governing
the Senior Secured Facilities and the 2022 Term Loan Facility and the indentures governing the senior
secured notes thereunder allow UCI to make certain pro forma adjustments for purposes of calculating certain
financial ratios, some of which would be applied to adjusted operating income before depreciation and
amortization (“Bank Credit Adjusted OIBDA”). UCI is in compliance with these financial covenants under the
agreements governing its Senior Secured Credit Facilities, 2022 Term Loan Facility and senior secured notes.
UCI may from time to time designate a subsidiary as “unrestricted subsidiaries” for purposes of its credit
agreements governing the Senior Secured Credit Facilities and the 2022 Term Loan Facility and indentures
governing the senior secured notes. As unrestricted subsidiaries, the operations of these subsidiaries are
excluded from, among other things, covenant compliance calculations and compliance with the affirmative
and negative covenants of the credit agreements governing the Senior Secured Credit Facilities the 2022
Term Loan Facility and indentures governing the senior secured notes. UCI may redesignate these
subsidiaries as restricted subsidiaries at any time at its option, subject to compliance with the terms of its
credit agreements governing the Senior Secured Credit Facilities and the 2022 Term Loan Facility and
indentures governing the senior secured notes. The subsidiary guarantors under UCI’s Senior Secured Credit
Facilities, the 2022 Term Loan Facility and senior secured notes are substantially all of UCI’s domestic
subsidiaries. The subsidiaries that are not guarantors include certain immaterial subsidiaries, special purpose
subsidiaries that are party to UCI’s Facility and the designated unrestricted subsidiaries. The guarantees are
full and unconditional and joint and several. Univision Communications Inc. has no independent assets or
operations. UCI and its subsidiaries, affiliates or significant shareholders may from time to time, in their sole
discretion, purchase, repay, redeem or retire any of UCI’s outstanding debt or equity securities (including any
privately placed debt securities with an established trading market), in privately negotiated or open market
transactions, by tender offer or otherwise. Contractual maturities of long-term debt as of December 31, 2024
are as follows: Year Amount
2025.......................................................................................................................................................................
$ 141,000 2026
(a)..................................................................................................................................................................
167,400
2027.......................................................................................................................................................................
2,237,400
2028.......................................................................................................................................................................
1,462,000
2029.......................................................................................................................................................................
2,975,000 Thereafter
.............................................................................................................................................................. 2,156,700
9,139,500 Less current
portion............................................................................................................................................... (141,000)
Long-term debt, excluding finance leases.............................................................................................................
$ 8,998,500 (a) Includes the term component of UCI’s accounts receivable sale facility and long-term portion
of the Note Payable to Grupo Televisa. 46
16. Interest Rate Swaps The Company’s objectives in using interest rate derivatives are to add
stability to interest expense and to manage its exposure to interest rate movements. To accomplish
these objectives, the Company primarily uses interest rate swaps as part of its interest rate risk
management strategy. These rate swaps involve the receipt of variable amounts from a
counterparty in exchange for the Company making fixed-rate payments over the life of the
agreements without exchange of the underlying notional amount. UCI has agreements with each of
its interest rate swap counterparties which provide that UCI could be declared in default on its
derivative obligations if repayment of the underlying indebtedness is accelerated by the lender due
to UCI’s default on the indebtedness. The Company does not enter into derivatives for trading
purposes. Derivatives Designated as Hedging Instruments On February 28, 2020, UCI entered into
two forward-starting interest rate swaps that converted the interest payable on $2.5 billion of
variable rate debt into fixed rate debt, at a weighted-average rate of approximately 2.94% became
effective and were to mature in February 2024. On September 10, 2021, UCI modified these two
outstanding forward-starting interest rate swaps to extend the maturity from February 2024 to
February 2026 and the floor was reduced from 1.00% to 0.75%. As a result of this modification,
there was an other-than-insignificant financing element identified which resulted in our swap
settlement payments being classified as financing cash flows. In June 2023, UCI entered into
bilateral agreements with its swap counterparties to transition all of its interest rate swap
agreements to SOFR. UCI made various ASC 848 elections related to changes in critical terms of
the hedging relationships due to reference rate reform to not result in a de-designation of these
hedging relationships. As result of the SOFR transition, the floor was also reduced from 0.75% to
0.63552% on the two outstanding forward-starting interest rate swaps maturing in February 2026.
The weighted average interest rate as of December 31, 2024 was approximately 2.23%. As of
December 31, 2024, the Company has two remaining effective cash flow hedges, as shown in the
table below: Number of Instruments Current Notional (in whole dollars) Interest Rate Derivatives:
Interest Rate Swap Contracts (February 2020 through February 2026) ...................................... 2 $
2,500,000,000 Impact of Interest Rate Derivatives on the Consolidated Financial Statements The
table below presents the fair value of the Company’s derivative financial instruments, as well as
their classification on the consolidated balance sheets: Consolidated Balance Sheet Location As of
December 31, 2024 As of December 31, 2023 Derivatives Designated as Hedging Instruments:
Interest Rate Swap Contracts—Current Assets..................................... Prepaid expenses and other
$ 46,300 $ 60,000 Interest Rate Swap Contracts—Non-Current Assets............................. Other
assets $ 6,500 $ 31,800 The Company does not offset the fair value of interest rate swaps in an
asset position against the fair value of interest rate swaps in a liability position on the balance
sheet. Because all of the Company’s interest rate swaps were in an asset position as of December
31, 2024 and 2023, if the Company had presented the fair value of the interest rate swaps on a net
basis by counterparty, there would be no change to the consolidated balance sheet as of that date.
As of December 31, 2024, the Company has not posted any collateral related to any of the interest
rate swap contracts. 47
The table below presents the effect of the Company’s derivative financial instruments designated
as cash flow hedges on the consolidated statements of operations and the consolidated
statements of comprehensive income (loss) for the years ended December 31, 2024, 2023, and
2022: Derivatives Designated as Cash Flow Hedges Amount of Gain or (Loss) Recognized in
Other Comprehensive Income (Loss) on Derivative Location of Gain or (Loss) Reclassified from
AOCLI into Income Amount of Gain or (Loss) Reclassified from AOCLI into Income(a) Total Interest
Expense on the Statement of Operations For the year ended December 31, 2024
................................ $ 35,700 Interest expense $ 100,500 $ 174,500 For the year ended December
31, 2023 ................................ $ 21,100 Interest expense $ 94,200 $ 680,400 For the year ended
December 31, 2022 ................................ $ 212,600 Interest expense $ 13,700 $ 572,200 (a) For
the years ended December 31, 2024, 2023, and 2022, the amount of gain or (loss) reclassified
from accumulated other comprehensive (loss) income (“AOCLI”) into income includes amounts that
have been reclassified related to current effective hedging relationships as well as amortizing
AOCLI amounts related to the off market component of the hedges as a result of the
Reorganization and subsequent modification of the outstanding swaps. For the years ended
December 31, 2024, 2023, and 2022, the Company amortized approximately $25.8 million, $23.3
million and $23.3 million, respectively, of a reduction to interest expense on hedging activities from
AOCLI based on the aforementioned activity. During the next twelve months, from December 31,
2024, approximately $72.4 million of net unrealized gain will be reclassified from AOCLI to interest
expense (inclusive of the amounts being amortized related to discontinued cash flow hedging
relationships). 17. Capital Stock On January 31, 2022, (the “acquisition date”), Televisa and UH
Holdco (together with its wholly owned subsidiary, Univision Communications Inc.) announced the
completion of the TelevisaUnivision Transaction, See Note 3. TelevisaUnivision Transaction. In
connection with the consummation of the TelevisaUnivision Transaction, UH Holdco changed its
name to TelevisaUnivision, Inc. and filed a certificate of incorporation providing for the following
classes of capital stock: • 50,000,000 shares of Class A common stock, with a par value of $0.001
per share; • 50,000,000 shares of Class B common stock, with a par value of $0.001 per share; •
5,000,000 shares of Class C subordinated common stock, with a par value of $0.001 per share,
which were further divided into four subclasses; Class C-1 Subordinated common stock, Class C-2
Subordinated common stock, Class C-3 Subordinated common stock, and Class C-4 Subordinated
common stock; and • 5,000,000 shares of preferred stock (of which 100,000 shares were
designated as Series A preferred stock, 750,000 shares were designated as Series B preferred
stock, pursuant to a certificate of designation filed on January 31, 2022, and 1,008,640 shares
were designated as Series C preferred stock, pursuant to a certificate of designation filed on
January 31, 2022), with a par value of $1,000 per share. On the TelevisaUnivision Transaction
acquisition date, TelevisaUnivision issued the following shares of capital stock: • 3,589,664 shares
of Class A common stock to Grupo Televisa, S.A.B. and its affiliates for an aggregate principal
amount of $750.0 million; • 750,000 shares of Series B preferred stock to Grupo Televisa and its
affiliates for an aggregate principal amount of $852.6 million; • 1,008,014 shares of Series C
preferred stock to, among other parties, Forgelight, Google, SoftBank Latin American Fund and
The Raine Group for an aggregate principal amount of $1,007.1 million; and • 1,000 shares of
Series D preferred stock to Guggenheim Securities, LLC. for an aggregate principal amount of $1.0
million. Immediately following the acquisition date, the issued and outstanding capital stock of the
Company consisted of Class A common stock, Class C subordinated common stock, Series B
preferred stock, Series C preferred stock and Series D preferred stock. There are no Series A
preferred stock outstanding. Description of Common Stock Holders of the Company’s common
stock are entitled to the rights, preferences, privileges and limitations summarized below: 48
Voting Rights: Except as provided by the terms of any series of preferred stock, holders of Class A
common stock have all voting powers and voting rights, and vote together as a single class, with
each share entitled to one vote. Directors will be elected by the stockholders subject to the board
designation rights of certain stockholders set forth in the stockholders agreement among certain
stockholders of the Company (the “Stockholders Agreement”). Dividend Rights: Except as a
described below with respect to shares of Class C Subordinated common stock, holders of
common stock will share, on a pro rata basis, in any dividend declared by the Company’s board,
subject to the rights of the holders of outstanding shares of Series A preferred stock and any other
preferred stock and the approval rights of Class A common stockholders with respect to certain
dividends provided for in the Certificate of Incorporation. Each of the sub-classes of the Class C
Subordinated common stock is subject to a liquidation preference that is reduced by dividends or
distributions paid to holders of the Company’s common stock. The holders of shares of Class A
common stock, Class B common stock, and any sub-class of Class C Subordinated common stock
whose liquidation preference has been reduced to $0.00 will share, on a pro rata basis, in any
dividend declared by the Company’s board. The shares of any sub-class of Class C Subordinated
common stock whose liquidation preference has not been reduced to $0.00 will not share in any
dividend declared by the Company’s board. Stock Split, Reverse Stock Splits and Stock Dividends:
In the event of a subdivision, increase or combination in any manner (by stock split, reverse stock
split, stock dividend or other similar manner) of the outstanding shares of any class of common
stock, the outstanding shares of the other classes of common stock will be adjusted proportionally,
subject to approval rights of Class A common stockholders with respect to certain stock split and
reverse stock splits provided for in the Certificate of Incorporation. Conversion Rights: Optional
Conversions: The following conversion rights are exercisable at the holder’s option, subject in
certain cases to federal stock ownership regulations applicable to U.S. broadcast companies and
restrictions set forth in the Certificate of Incorporation and the Stockholders Agreement: • Each
share of Class A common stock may be converted at any time into one share of Class B common
stock; • Each share of Class B common stock may be converted into one share of Class A
common stock; • In the event of any registered public offering, holders of Class C Subordinated
common stock shall have the option, but not the obligation, to convert shares of Class C
Subordinated common stock into shares of Class A common stock to be sold in such public
offering (or shares of Class B common stock if the shares sold are required to be non-voting). Each
share of any sub-class of Class C Subordinated common stock converted for such sale shall be
converted into a number of shares of Class A common stock or Class B common stock, as
applicable, equal to (i) the value of a share of such sub-class of Class C Subordinated stock as
determined by a third-party valuation firm as of the time of such public offering, divided by (ii) the
offering/sale price of a share of Class A common stock or Class B common stock, as applicable.
Mandatory Conversions: The Company may require a holder of Class A common stock to convert
its shares of Class A common stock into shares of Class B common stock if such holder does not
provide certain information required by the Certificate of Incorporation or if the Company concludes
in its sole discretion that such holder’s ownership or exercise of rights of ownership would result in
certain events, in each case in relation to the application of federal communications laws.
Liquidation Rights: In the event of voluntary or involuntary liquidation, dissolution or winding up of
the Company, holders of common stock will share, on a pro rata basis, in any distribution of the
assets of the Company to the stockholders, subject to the rights of the holders of outstanding
shares of Series A preferred stock and any other preferred stock; provided that holders of shares of
Class C Subordinated common stock will share in such distributions only to the extent such shares
would share in a dividend, as further described under “—Dividend Rights” above. Preferred Stock:
Subject to the consent rights of various parties under the Stockholders Agreement and the
Certificate of Incorporation and the rights of the holders of outstanding shares of preferred stock,
the Company’s board is authorized to provide for the issuance of preferred stock in one or more
series. Series A Preferred Stock In connection with the Stock Purchase Agreement dated February
24, 2020, on December 29, 2020 (Predecessor), UHI authorized and issued 100,000 Series A
convertible preferred stock (the “Series A preferred stock”) to Liberty through the Certificate 49
of Designation (“CoD”), each with a stated value of $1,000 (the “Series A Stated Price”), for an
aggregate principal amount of $100.0 million. The Series A preferred stock are not entitled or
permitted to vote on any matter required or permitted to be voted upon by the stockholders of the
Company. Due to the May 2021 reorganization, the Series A preferred stock consisting of 100,000
shares in UHI were exchanged for same number shares and class in UH Holdco that were fair
valued at $369.4 million. As a result of the TelevisaUnivision Transaction, Liberty converted their
Series A preferred stock into 1,845,293 Class A common stock of TelevisaUnivision. Series B
Preferred Stock Voting Rights: Holders of Series B preferred stock have the right to vote along with
holders of the class A common stock on an as-converted basis. Dividend Rights: The Series B
preferred stock is entitled to preferential cumulative dividends equal to 5.5% per annum. Holders of
Series B preferred stock will share with holders of common stock in any dividend declared by the
Company’s board as if such shares were converted into common stock on the record date of such
dividend. Conversion Rights and Anti-Dilution Adjustments: Each share of Series B preferred stock
may be converted at the option of the holder at any time into a number of shares of Class A
common stock or Class B common stock equal to $1,000 divided by the conversion price then in
effect. At the date of issuance of the Series B preferred stock, the conversion ratio was 4.16 per
common share. The conversion price and the securities into which shares of Series B preferred
stock are convertible are subject to customary anti-dilution adjustments in the event of dividends,
subdivisions, combinations or reclassifications of common stock. Redemption: Redemption By the
Company: The Company may redeem each share of Series B preferred stock at any time after the
later of the fifth anniversary of the issuance date or the consummation of an initial public offering
under certain circumstances. Redemption at the Option of the Holder: Each holder of Series B
preferred stock upon change of control is entitled to at least the Accumulated Stated Value
described therein, and thereafter will share ratably in any distributions or payments on an as-
converted basis with the holders of Common Stock. Liquidation Rights: In the event of voluntary or
involuntary liquidation, dissolution or winding up of the Company, holders of Series B preferred
stock will share, on a pro rata basis, with any other capital stock that ranks on a pari passu basis
with it in any distribution of the assets of the Company to the stockholders in an amount equal to
the greater of (i) $1,000 per share of Series B preferred stock and (ii) the amount payable upon
such liquidation, dissolution or wind-up in respect of the number of shares of common stock into
which shares of Series B preferred stock were convertible immediately prior thereto. Such
distribution to the Series B preferred stock will be made prior to any payment to the common stock
or other junior stock. As of December 31, 2024, and 2023, the Series B Preferred Stock of $852.6
million were classified as temporary equity and presented in redeemable convertible preferred
stock within the Consolidated Balance Sheet. Series C Preferred Stock In connection with the
TelevisaUnivision Transaction, the Company issued 1,000,000 shares of the Series C preferred
stock to Forgelight, Google, SoftBank Latin American Fund and The Raine Group, among others.
Voting Rights: Holders of Series C preferred stock have the right to vote along with holders of the
class A common stock on an as-converted basis. Dividend Rights: Holders of Series C preferred
stock will share with holders of common stock in any dividend declared by the Company’s board as
if such shares were converted into common stock on the record date of such dividend. Conversion
Rights and Anti-Dilution Adjustments: Each share of Series C preferred stock may be converted at
the option of the holder at any time into a number of shares of Class A common stock or Class B
common stock equal to $1,000 divided by the conversion price then in effect. At the date of
issuance of the Series C preferred stock, the conversion ratio was 4.7862 per common 50
share. The conversion price and the securities into which shares of Series C preferred stock are
convertible are subject to customary anti-dilution adjustments in the event of dividends,
subdivisions, combinations, or reclassifications of common stock. Redemption: Redemption By the
Company: The Company may redeem each share of Series C preferred stock at any time after the
later of the fifth anniversary of the issuance date or the consummation of an initial public offering
under certain circumstances. Redemption at the Option of the Holder: Each holder of Series C
preferred stock upon change of control is entitled to at least the Accumulated Stated Value
described therein, and thereafter will share ratably in any distributions or payments on an as-
converted basis with the holders of Common Stock. Liquidation Rights: In the event of voluntary or
involuntary liquidation, dissolution or winding up of the Company, holders of Series C preferred
stock will share, on a pro rata basis, with any other capital stock that ranks on a pari passu basis
with it in any distribution of the assets of the Company to the stockholders in an amount equal to
the greater of (i) $1,000 per share of Series C preferred stock and (ii) the amount payable upon
such liquidation, dissolution or wind-up in respect of the number of shares of common stock into
which shares of Series C preferred stock were convertible immediately prior thereto. Such
distribution to the Series C preferred stock will be made prior to any payment to the common stock
or other junior stock. As of December 31, 2024, and 2023, the Series C Preferred Stock of
$1,007.1 million were classified as temporary equity and presented in redeemable convertible
preferred stock within the Consolidated Balance Sheet. Treasury Stock In November 2022, the
Company repurchased 128,004 shares of its Class A common stock and designated them as
treasury stock. As of December 31, 2024, and 2023, the Company had 128,004 treasury stock of
its Class A common stock. 18. Accumulated Other Comprehensive (Loss) Income Comprehensive
income (loss) is reported in the consolidated statements of comprehensive (loss) income and
consists of net income (loss) and other gains (losses) that affect stockholder’s equity but, under
GAAP, are excluded from net income (loss). For the Company, items included in other
comprehensive (loss) income are foreign currency translation adjustments, unrealized gain (loss)
on hedging activities and the amortization of unrealized (gain) loss on hedging activities, pension
and post-retirement benefits. 51
The following tables present the changes in accumulated other comprehensive (loss) income by
component for the years ended December 31, 2024, 2023, and 2022. All amounts are net of tax.
Gains and (Losses) on Hedging Activities Unrealized Gain (Loss) on Pension Activities Currency
Translation Adjustment Total Balance as of December 31, 2021
............................................................................ $ 16,400 $ — $ (300) $ 16,100 Other
comprehensive income before reclassifications...................................... 165,000 — — 165,000
Amounts reclassified from accumulated other comprehensive loss................. (17,300) — —
(17,300) Unrealized gain on pension activities, net of taxes........................................... — 7,800 —
7,800 Currency translation adjustments...................................................................... — — 313,900
313,900 Net other comprehensive income........................................................................... 147,700
7,800 313,900 469,400 Balance as of December 31, 2022
............................................................................ $ 164,100 $ 7,800 $ 313,600 $ 485,500 Other
comprehensive loss before reclassifications............................................ (37,200) — — (37,200)
Amounts reclassified from accumulated other comprehensive income ............ (17,400) — —
(17,400) Unrealized loss on pension activities, net of taxes ............................................ — (9,100)
— (9,100) Amortization of unrealized gain on pension activities, net of taxes.................. — (1,300)
— (1,300) Currency translation adjustments...................................................................... — —
605,300 605,300 Net other comprehensive income...........................................................................
(54,600) (10,400) 605,300 540,300 Balance as of December 31, 2023
............................................................................ $ 109,500 $ (2,600) $ 918,900 $ 1,025,800 Other
comprehensive loss before reclassifications............................................ (29,200) — — (29,200)
Amounts reclassified from accumulated other comprehensive income ............ (19,400) — —
(19,400) Unrealized loss on pension activities................................................................. — (6,600)
— (6,600) Amortization of unrealized gain on pension activities, net of taxes.................. — (1,800)
— (1,800) Currency translation adjustments...................................................................... — —
(823,200) (823,200) Net other comprehensive
loss................................................................................ (48,600) (8,400) (823,200) (880,200)
Balance as of December 31, 2024 ............................................................................ $ 60,900 $
(11,000) $ 95,700 $ 145,600 For the years ended December 31, 2024, 2023, and 2022, unrealized
gain on hedging activities is primarily due to the change in one-month SOFR rates for interest rate
swaps. For the year ended December 31, 2022, unrealized gain on hedging activities is primarily
due to the change in one-month LIBOR rates for interest rate swaps. Amounts reclassified from
accumulated other comprehensive income related to hedging activities are recorded to interest
expense. See Note 16 Interest Rate Swaps for further information related to amounts reclassified
from accumulated other comprehensive income. 52
19. Income Taxes The (benefit) provision for income tax for the years ended December 31, 2024,
2023, and 2022, comprised the following charges and (benefits): Year Ended December 31, 2024
2023 2022 Current:
Federal.................................................................................................................... $ 96,300 $
75,600 $ 52,600 State........................................................................................................................
2,300 (8,000) 19,600 Foreign
................................................................................................................... 4,000 47,700 49,800 Total
current income tax expense .......................................................................... 102,600 115,300
122,000 Deferred:
Federal.................................................................................................................... (192,500)
(64,600) 32,900 State........................................................................................................................
(55,500) (27,300) (1,000) Foreign
................................................................................................................... (12,400) 10,100 13,300
Total deferred income tax benefit.......................................................................... (260,400) (81,800)
45,200 Income tax (benefit) expense........................................................................................... $
(157,800) $ 33,500 $ 167,200 For the years ended December 31, 2024, 2023, and 2022, a
reconciliation of the federal statutory tax rate to the Company’s effective tax rate is as follows: Year
Ended December 31, 2024 2023 2022 Federal statutory tax
rate................................................................................................ 21.0% 21.0% 21.0% State and
local income taxes, net of federal tax benefit................................................. 6.5 4.5 3.5 Effect of
international operations................................................................................... 0.9 (0.5) (2.9)
Valuation allowance....................................................................................................... (14.7) 2.2
(4.0) Equity based compensation............................................................................................ (1.9)
(2.5) (0.6) Transaction related costs................................................................................................ —
— (0.4) Foreign rate differential.................................................................................................. 1.9
2.7 — Base erosion tax ............................................................................................................. (1.2)
2.4 — Inflationary Adjustment................................................................................................. (0.8)
(1.9) — Goodwill impairment..................................................................................................... —
(22.9) (28.4) Puerto Rico disposition ..................................................................................................
(17.6) (8.2) — Tax basis step-up 29.9 — — Prior period
adjustment.................................................................................................. 2.5 (0.3) —
Other............................................................................................................................... (7.4) (0.6)
(0.2) Total effective tax rate.......................................................................................... 19.1% (4.1)%
(12.0)% As a result of the TelevisaUnivision Transaction (See Note 3. TelevisaUnivision
Transaction), the Company’s international operations that are subject to local income taxes has
increased significantly. The acquired entities operate in territories where the statutory rate is in
excess of the 21% U.S. federal statutory rate. With the exception of certain licenses and other
assets acquired directly by the Company, the Transaction was a non-taxable business combination
resulting in goodwill that is not tax deductible. The Company’s deferred tax assets and liabilities as
of December 31, 2024 and December 31, 2023 are as follows: 53
December 31, 2024 2023 Deferred tax assets: Tax loss carry-
forwards....................................................................................... $ 112,800 $ 255,000 Advanced
deposits for taxes................................................................................ — 101,000 Investments
related .............................................................................................. 46,700 47,200
Interest.................................................................................................................. 142,300 152,400
Tax credits............................................................................................................ 92,900 127,900
Compensation related costs.................................................................................. 63,500 24,000
Lease liability....................................................................................................... 141,100 184,500
Debt related.......................................................................................................... 14,300 18,300
Deferred revenue.................................................................................................. 132,600 226,600
Programming Rights............................................................................................ 52,200 (10,700)
Other .................................................................................................................... 50,000 60,500
Valuation allowance............................................................................................. (506,000) (426,100)
Total deferred tax assets....................................................................................... 342,400 760,600
Deferred tax liabilities: Property, equipment and intangible
assets........................................................... (457,000) (1,212,200) Right-of-use
asset................................................................................................. (145,400) (77,300) Accrued
Liabilities .............................................................................................. (48,600) — Other
.................................................................................................................... (21,000) (41,500) Total
deferred tax liability ................................................................................... (672,000) (1,331,000) Net
deferred tax liability.......................................................................................... $ (329,600) $
(570,400) At December 31, 2024, the Company had State net operating loss carryforwards of
$296.4 million and no U.S. Federal net operating loss carryforwards. We have $287.0 million of
foreign tax losses in various international jurisdictions, primarily related to jurisdictions with an
indefinite carryforward period. In addition, we have $20.1 million of U.S. foreign tax credits and
$72.8 million of various U.S. State credit carryforwards at December 31, 2024. The utilization of
these carryforwards as an available offset to future taxable income is subject to limitations under
U.S. and foreign income tax laws. These carryforwards begin to expire in fiscal year 2029. At
December 31, 2023, the Company had no U.S. Federal or State net operating loss carryforwards.
We had $30.7 million of foreign tax loss carryforwards that began to expire in 2024 and $218.7
million of foreign tax losses with an indefinite carryforward period in various international
jurisdictions. In addition, we had $17.0 million of U.S. foreign tax credits, $30.9 million of foreign tax
credits in foreign jurisdictions, and $82.0 million of various U.S. State credit carryforwards as of
December 31, 2023. The utilization of these carryforwards as an available offset to future tax is
subject to limitations under U.S. and foreign income tax laws. These carryforwards begin to expire
in fiscal year 2029. During 2024, the Company utilized U.S. capital loss carryforwards of
approximately $658.1 million that were expected to expire in 2024, resulting in a release of the
valuation allowance and tax benefit of approximately $167.9 million. Additionally, during 2024, the
Company utilized a deferred tax asset of $101.0 million related to an advanced deposit for Mexican
corporate income taxes. The ultimate realization of deferred tax assets is dependent upon the
generation of future taxable income during the periods in which those temporary differences
become deductible. Management considers the scheduled reversal of deferred tax liabilities
(including the impact of available carryback and carryforward periods), projected future taxable
income, and tax-planning strategies in making this assessment. At December 31, 2024 and 2023,
the Company maintained a valuation allowance in the amount of $506.0 million and $426.1 million,
respectively. These valuation allowances were primarily comprised of foreign net operating loss
carryforwards and tax credits, as it is more likely than not that the benefits of these deductible
differences will not be realized. The $80.0 million increase to 54
the valuation allowance, primarily relates to an increase of $248.0 million related to the Netherlands
tax basis step-up, offset by the $167.8 million release related to capital losses as noted above. A
reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:
Balance at December 31, 2021
............................................................................................................. $ 32,600 Addition based on
tax positions related to current year........................................................................ 3,800 Decrease
for tax position of prior years................................................................................................ (1,500)
Lapse in statute of limitations...............................................................................................................
(1,400)
Settlements............................................................................................................................................
(500) Balance at December 31, 2022
............................................................................................................. $ 33,000 Addition based on
tax positions related to current year........................................................................ 4,200 Decrease
for tax position of prior years................................................................................................ (2,600)
Lapse in statute of limitations...............................................................................................................
(18,400) Balance at December 31, 2023
............................................................................................................. $ 16,200 Addition based on
tax positions related to current year........................................................................ 5,900 Addition for
tax position of prior years................................................................................................ 4,500 Lapse
in statute of limitations............................................................................................................... (3,000)
Settlements............................................................................................................................................
— Balance at December 31, 2024
............................................................................................................. $ 23,600 For the years ended
December 31, 2024, 2023, and 2022, the total amount of unrecognized tax benefits that, if
recognized, would affect the effective tax rate is approximately $18.7 million, $13.4 million, $26.2
million in the aggregate respectively. The Company recognizes interest and penalties, if any, related
to uncertain income tax positions in income tax expense. The Company had approximately $6.1
million and $5.2 million of accrued interest and penalties related to uncertain tax positions as of
December 31, 2024 and December 31, 2023, respectively. The Company recognized interest and
penalties of $0.9 million, $7.2 million, and $0.9 million related to uncertain tax positions for the years
ended December 31, 2024, 2023, and 2022, respectively. It is reasonably possible that certain
income tax examinations may be concluded, or statutes of limitation may lapse, during the next
twelve months, which could result in a decrease in unrecognized tax benefits of approximately
$18.7 million that would, if recognized, impact the effective tax rate. The Company and its
subsidiaries file income tax returns with the IRS and various state and international jurisdictions.
The Company files a consolidated federal income tax return for U.S. purposes and has substantially
concluded all U.S. federal income tax matters for years through 2021. Tax authorities are also
conducting examinations of Company subsidiaries in various international and state and local
jurisdictions. The Company has concluded substantially all income tax matters for all major
jurisdictions through 2017. 55
20. Share-Based Compensation On December 1, 2010, UHI established the 2010 Equity Incentive
Plan (the “2010 Plan”), which replaced the amended and restated 2007 Equity Incentive Plan (the
“2007 Plan”). The 2010 Plan expired on January 2, 2021. On June 16, 2021, UH Holdco
established the 2021 Equity Incentive Plan (the “2021 Plan”). The 2010 Plan reflected the
recapitalization of UHI and Broadcast Holdings whereby the original Class A common stock and
Class L common stock of UHI and shares of Preferred Stock of Broadcast Holdings were
converted to new classes of stock of UHI. Shares and strike prices for awards made under the
2007 Plan were converted to reflect such capital structure. Both the 2021 Plan and 2010 Plan were
adopted to attract, retain and motivate officers and employees of, consultants to, and non-
employee directors. Under the 2021 Plan, the maximum number of shares that may be issued
pursuant to awards made under the plan is 2,350,000 shares of all classes of stock. The
Committee or Board of Directors, as applicable, may grant options, stock appreciation rights,
restricted stock, restricted stock units, performance stock units or other stock-based awards.
Awards may also be made under the 2021 Plan, in the Board of Directors or Committee’s sole
discretion, in assumption of, or substitution for, outstanding awards previously granted by UH
Holdco or an affiliate or a company acquired by UH Holdco or an affiliate or a company with which
UH Holdco combines. Upon the exercise of a stock option award or the vesting of a restricted stock
unit, shares of UH Holdco common stock are issued from authorized but unissued shares. The
exercise price of stock options granted pursuant to the 2021 Plan and 2010 Plan may not be less
than 100% of the fair market value of UH Holdco’s common stock on the date of grant. No non-
qualified stock option or stock appreciation right award will be exercisable after ten years from the
date granted. The number of shares subject to an award, the consequences of a participant’s
termination of service with UH Holdco or any subsidiary or affiliate, and the dates and events on
which all or any portion of an award shall be vested and non-forfeitable is set out in an individual
award agreement. The Company’s share-based compensation pre-tax expense is recorded within
direct operating and selling, general and administrative expenses in the consolidated statement of
operations: Year Ended December 31, 2024 2023 2022 Employee share-based
compensation.............................................................................. $ 86,700 $ 87,800 $ 87,500 The
total income tax benefit for share-based compensation recognized in the consolidated statements
of operations (including restricted stock units) for the years ended December 31, 2024, 2023, and
2022, were $4.3 million, $4.3 million, and $9.1 million, respectively. Stock Options A summary of
stock options as of December 31, 2024, and the changes during the year then ended is presented
below: Stock Options Weighted Average Exercise Price Weighted Average Remaining Contractual
Term (years) Aggregate Intrinsic Value (thousands) Outstanding at December 31, 2023
................................... 1,249,911 $ 211.92 6.2 $ 500 Granted
.............................................................................. 16,301 $ 208.93 Exercised
........................................................................... — $ — Forfeited, canceled, or expired
.......................................... (157,024) $ 213.12 Outstanding at December 31, 2024
................................... 1,109,188 $ 211.67 5.4 $ — Exercisable at December 31, 2024
.................................... 758,590 $ 213.27 5.3 $ — The weighted-average grant-date fair value of
options granted during the years ended December 31, 2024, 2023, and 2022, was $63.24, $50.58,
and $49.61, respectively. The majority of the Company’s stock options are time-based and vest
over periods of between three and five years. The fair value of options vested during the years
ended December 31, 2024, 2023, and 2022, was $137.64, $162.65, and $163.12, respectively.
The total intrinsic value of options outstanding during the years ended December 31, 2024, 2023,
and 2022, was $0.5 million. Total unrecognized compensation cost related to unvested stock
options that will vest upon 56
satisfaction of service conditions as of December 31, 2024 was $8.4 million, which is expected to
be recognized over a weighted-average period of 1.7 years. Restricted Stock Units The following
table presents the changes in the number of restricted stock unit awards during the year ended
December 31, 2024: Restricted Stock Unit Awards Weighted Average Grant-date Fair Value
Outstanding at December 31, 2023............................................................................................
770,392 $ 148.62
Granted.......................................................................................................................................
5,661 $ 130.12
Vested.........................................................................................................................................
(495,164) $ 163.32 Surrendered/Canceled
................................................................................................................ — $ — Outstanding at
December 31, 2024............................................................................................ 280,889 $ 164.41
The restricted stock unit awards vest over periods of between three and four years from the date of
grant. The fair value of restricted stock units awarded to employees is measured at the estimated
intrinsic value at the grant date. The weighted-average grant-date fair value of restricted stock units
granted during the years ended December 31, 2024, 2023, and 2022, was $130.12, $130.49, and
$145.07, respectively. The total fair value of shares vested during the years ended December 31,
2024, 2023, and 2022, was $76.6 million, $44.3 million, and $6.8 million, respectively. Total
unrecognized compensation cost related to unvested restricted stock awards that will vest upon
satisfaction of service conditions as of December 31, 2024 was $4.2 million, which is expected to
be recognized over a weighted-average period of 0.4 years. Performance Stock Units The
following table presents the changes in the number of performance stock unit awards during the
year ended December 31, 2024: Performance Stock Unit Awards Weighted Average Grant-date
Fair Value Outstanding at December 31, 2023
...................................................................................... — $ — Granted
................................................................................................................................. 88,501 $ 130.12
Vested ................................................................................................................................... — $ —
Surrendered/Canceled........................................................................................................... — $ —
Outstanding at December 31, 2024 ...................................................................................... 88,501
$ 130.12 The performance stock unit awards vest over periods of between three and four years
from the date of grant when the applicable performance metrics have been met. Total
unrecognized compensation cost related to unvested performance stock units that will vest upon
satisfaction of service and performance conditions as of December 31, 2024 was $10.4 million,
which is expected to be recognized over a weighted-average period of 3.0 years. 57
21. Employee Benefits The Company has a pension and seniority premium (post-retirement
benefits) obligations relating to the defined benefit plan for its Mexican employees. The Company
also has a legal indemnity, per the Mexican Labor Law, that covers employees in Mexico who are
dismissed unjustifiably and entitles such employees to three months of salary, plus 20 days of
salary per year of service. Pension Plan and Seniority Premium Plan The defined benefit
retirement pension plan and seniority premium plan (the “Retirement Plans”) covers Mexican
based employees. Under the provisions of the Mexican Labor Law, seniority premiums plans are
payable based on salary and years of service to employees who resign or are terminated prior to
reaching retirement age. After retirement age, employees are no longer eligible for seniority
premiums plans. The actuarial assumptions to determine the present value of defined benefit
obligations and the net periodic pension costs for the defined benefit obligations are as follows:
December 31, 2024 2023 Discount
rate...............................................................................................................................................
10.49% 10.45% Salary
increase............................................................................................................................................
5.25% 5.25% Inflation rate
............................................................................................................................................... 3.75%
3.75% Expected return on plan assets
................................................................................................................... 10.39% 10.45% The
components of net periodic cost of the Retirement Plans for the years ended December 31, 2024,
2023, and 2022, other than the service costs component, are included in “Other, net” within the
consolidated statement of operations, consisted of the following: Year Ended December 31, 2024
2023 2022 Retirement Plans Service
cost....................................................................................................................................... $ 4,300
4,300 3,800 Interest
cost....................................................................................................................................... 8,200
9,300 5,700 Expected return on plan
assets.......................................................................................................... (2,300) (2,200) (1,900)
Actuarial loss (gain) - amortization ..................................................................................................
4,600 (1,400) — Prior service
cost............................................................................................................................... 100 — —
Curtailment gain................................................................................................................................
(700) — — Net periodic cost
............................................................................................................................... $ 14,200 $ 10,000
$ 7,600 58
The Company’s defined benefit obligations, plan assets, and the funded status balances of the
retirement pension plans are as follows: December 31, 2024 2023 Change in benefit obligations:
Benefit obligation, beginning of the year.............................................................................................
$ (96,600) $ (78,300) Service
cost...................................................................................................................................... (4,300)
(4,300) Interest
cost...................................................................................................................................... (8,200)
(9,300) Benefits paid
.................................................................................................................................... 15,200 9,100
Actuarial loss...................................................................................................................................
(100) (3,200) Foreign currency translation (gain)
loss.......................................................................................... 20,500 (10,600) Benefit obligation,
end of the year ....................................................................................................... $ (73,500) $
(96,600) Change in plan assets: Fair value of plan assets, beginning of the
year.................................................................................... $ 29,400 $ 26,800 Return on plan
assets....................................................................................................................... 1,800 2,200
Actuarial loss...................................................................................................................................
(3,900) — Benefits paid
.................................................................................................................................... (5,100) (4,100)
Foreign currency exchange translation loss (gain) ..........................................................................
(4,600) 4,500 Fair value of plan assets, end of the
year.............................................................................................. $ 17,600 $ 29,400 Under funded
status, end of the year.................................................................................................... $ (55,900) $
(67,200) The net unfunded retirement pension plans balance is recorded in the “Other long-term
liabilities” within the Company’s consolidated balance sheet. Plan Assets - Pension and Seniority
Premium The plan assets are invested according to specific investment guidelines determined by
the technical committees of the pension plan and seniority premiums trusts and in accordance with
actuarial computations of funding requirements. These investment guidelines require a minimum
investment of 30% of the plan assets in fixed rate instruments, or mutual funds comprised of fixed
rate instruments. The plan assets that are invested in mutual funds are all rated “AA” or “AAA” by
at least one of the main rating agencies. These mutual funds vary in liquidity characteristics
ranging from one day to one month. The investment goals of the plan assets are to preserve
principal, diversify the portfolio, maintain a high degree of liquidity and credit quality, and deliver
competitive returns subject to prevailing market conditions. The weighted average asset allocation
by asset category was as follows: December 31, 2024 2023 Equity
securities................................................................................................................................ 23%
32% Fixed rate
instruments....................................................................................................................... 77% 68%
Total..................................................................................................................................................
100% 100% The weighted average expected long-term rate of return of plan assets of 8.34% as of
December 31, 2024. The rate used reflected an estimate of long-term future returns for the plan
assets. This estimate was primarily a function of the asset classes (equities versus fixed income) in
which the plan assets were invested and the analysis of past performance of these asset classes
over a long period of time. This analysis included expected long-term inflation and the risk
premiums associated with the above investments. The plan assets are measured at fair value
annually. The Company plan assets in the aggregate amount of $17.6 million as of December 31,
2024 includes primarily investments in equity securities and mutual funds (fixed rate instruments).
Investments in equity securities, are measured at the closing price reported on the active market
on which the individual securities are traded. Investments in mutual funds consist of fixed rate
instruments and are measured at the net asset value provided by the administrator of the fund. The
plan assets return for $1.8 million for the year ended December 31, 2024. 59
The weighted average durations of the defined benefit plans were as follows: December 31, 2024
December 31, 2023 Pensions................................................................................................................ 9.8
years 5.2 years Seniority Premiums.............................................................................................. 9.3
years 7.1 years Pension and Seniority Premium - Expected Benefit Payments The following table
presents the estimated future benefit payments expected to be paid out from the retirement pension
plans over the next ten years: Year Amount 2025
......................................................................................................................................................................
$ 12,300 2026
......................................................................................................................................................................
10,100 2027
......................................................................................................................................................................
9,300 2028
......................................................................................................................................................................
11,300 2029
......................................................................................................................................................................
11,800 Thereafter
............................................................................................................................................................. $
54,900 Legal Indemnity The components of net periodic cost of the legal indemnity for the years ended
December 31, 2024, 2023, and 2022, other than the service costs component, are included in Other, net
within the consolidated statement of operations and consisted of the following: Year Ended December
31, 2024 2023 2022 Legal Indemnity Service
cost.................................................................................................................... $ 6,400 $ 5,700 $ 5,200
Interest cost.................................................................................................................... 9,100 11,100
4,200 Actuarial loss (gain) - amortization............................................................................... 7,600 (400)
— Prior service cost........................................................................................................... 1,800 — —
Curtailment gain ............................................................................................................ (6,600) — — Net
periodic cost......................................................................................................... $ 18,300 $ 16,400 $
9,400 The Company’s unfunded legal indemnity obligation associated with post-employment benefits, is
presented as follows: December 31, 2024 December 31, 2023 Change in benefit obligations: Benefit
obligation, beginning of the year............................................................................. $ (100,700) $ (69,600)
Acquisition....................................................................................................................... — (200) Service
cost...................................................................................................................... (6,400) (5,700) Interest
cost...................................................................................................................... (9,100) (11,100) Benefits
paid.................................................................................................................... 4,300 3,500 Actuarial
(loss) gain......................................................................................................... 11,500 (9,500) Foreign
currency translation gain.................................................................................... 19,000 (8,100) Benefit
obligation, end of the year....................................................................................... $ (81,400) $ (100,700)
The legal indemnity obligation is recorded in the “Other long-term liabilities” within the Company’s
consolidated balance sheet. 60
Legal Indemnity - Expected Benefit Payments The following table presents the estimated future benefit
payments expected to be paid out from the legal indemnity over the next ten years: Year Amount
2025...............................................................................................................................................................
$ 10,700
2026...............................................................................................................................................................
11,300
2027...............................................................................................................................................................
11,900
2028...............................................................................................................................................................
12,000
2029...............................................................................................................................................................
12,700 Thereafter
...................................................................................................................................................... 63,000
Other Employee Benefits UCI has a 401(k) retirement savings plan (the “401(k) Plan”) covering all
eligible employees over the age of 21. The 401(k) Plan allows the employees to defer a portion of their
annual compensation, and UCI may match a portion of the employees’ contributions generally after the
first day of service. UCI match 100% of the first 3% of eligible employee compensation that was
contributed to the 401(k) Plan. For the years ended December 31, 2024, 2023, and 2022, UCI
recognized expense for matching cash contributions of $28.4 million, $26.6 million and $18.2 million,
respectively. 22. Contingencies and Commitments Contingencies The Company maintains insurance
coverage for various risks, where deemed appropriate by management, at rates and terms that
management considers reasonable. The Company has deductibles for various risks, including those
associated with windstorm and earthquake damage. The Company self-insures its employee medical
benefits and its media errors and omissions exposures. In management’s opinion, the potential exposure
in future periods, if uninsured losses were to be incurred, should not be material to the consolidated
financial position or results of operations or cash flows. The Company is subject to various lawsuits and
other claims in the normal course of business. In addition, from time to time, the Company receives
communications from government or regulatory agencies concerning investigations or allegations of
noncompliance with law or regulations in jurisdictions in which the Company operates. The Company
establishes reserves for specific liabilities in connection with regulatory and legal actions that the
Company deems to be probable and estimable. The Company believes the immaterial amounts accrued
in its financial statements are sufficient to cover all probable liabilities. In other instances, the Company is
not able to make a reasonable estimate of any liability because of the uncertainties related to the
outcome and/or the amount or range of loss, no accruals for such contingencies is made and no loss or
range of loss is disclosed. The Company does not expect that the ultimate resolution of pending
regulatory and legal matters in future periods will have a material effect on the Company’s financial
condition or result of operations or cash flows. Commitments In the normal course of business, UCI
enters into multi-year contracts for programming content, sports rights, research and other service
arrangements and in connection with joint ventures. 61
The following is a schedule by year of future minimum payments under programming and other non-lease
related contracts as of December 31, 2024: Year Programming and Other (a)
2025..........................................................................................................................................................................
$ 999,500
2026..........................................................................................................................................................................
688,600
2027..........................................................................................................................................................................
732,100
2028..........................................................................................................................................................................
625,800
2029..........................................................................................................................................................................
501,100
Thereafter.................................................................................................................................................................
319,900 Total minimum
payments...................................................................................................................................... $ 3,867,000 (a)
Other amounts in commitments are associated with research tools, information technology and other
contractual obligations. 23. International Financial Reporting Standards The consolidated financial statements
of TelevisaUnivision are prepared in accordance with GAAP which differs in certain respects from International
Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).
Below are the IFRS differences, exclusive of differences that pertain solely to disclosure, that existed as of and
for the year ended December 31, 2024 and for each applicable period presented as described below. 62
a.Share-Based Payments Under GAAP, the Company accounts for share-based payment awards
that vest in installments based on service conditions on a straight-line basis. In addition, deferred
tax assets for awards that are expected to result in a future tax deduction are calculated based on
the cumulative GAAP expense recognized. Under IFRS 2, Share-based payment, as amended,
compensation expense associated with share-based payment awards is accounted for using the
accelerated method (straight-line basis over the requisite service period for each separately
vesting portion of the award). Deferred tax assets are calculated based on the estimated tax
deduction determined at each reporting date under applicable tax law. The following summarizes
the adjustments related to the statement of operations and balance sheet accounts for the periods
presented: Year Ended December 31, 2024 2023 As reported Adjustment As adjusted As reported
Adjustment As adjusted Direct operating expenses.............................. $ 2,203,400 $ (2,700) $
2,200,700 $ 1,914,900 $ (600) $ 1,914,300 Selling, general and administrative expenses
1,544,200 (49,700) 1,494,500 1,496,100 (11,900) 1,484,200 (Benefit) provision for income
taxes............. (157,800) 12,100 (145,700) 33,500 10,800 44,300 Year Ended December 31, 2022
As reported Adjustment As adjusted Direct operating
expenses...................................................................................................... 1,751,100 $ 2,400 $
1,753,500 Selling, general and administrative
expenses......................................................................... 1,359,500 46,400 1,405,900 Provision for
income taxes..................................................................................................... 167,100 14,700
181,800 As of December 31, 2024 As of December 31, 2023 As reported Adjustment As adjusted
As reported Adjustment As adjusted Goodwill 1 ....................................................... $ 5,528,600 $
18,100 $ 5,546,700 $ 5,911,200 $ 18,100 $ 5,929,300 Deferred tax
assets.......................................... 154,100 8,900 163,000 248,500 8,200 256,700 Deferred tax
liabilities, net ............................. 483,700 64,600 548,300 818,900 50,400 869,300 Additional paid-
in capital............................... 3,508,200 (1,300) 3,506,900 3,462,800 52,600 3,515,400
Accumulated (deficit) retained earnings......... (2,341,800) (36,300) (2,378,100) (1,676,900)
(76,600) (1,753,500) 1 Goodwill adjustment reflects impact of cumulative GAAP to IFRS tax
differences related to share based payments at the time of the Company’s reorganization that
occurred on May 18, 2021. 63
b. Deferred Financing Costs During the year ended December 31, 2024, the Company had the
following 2024 debt refinance transactions (See Note 15. Debt): • On October 7, 2024, the
Company issued an additional $755.0 million aggregate principal amount of its existing 8.500%
senior notes due July 31, 2031 (the “additional 2031 senior notes”). The additional 2031 senior
notes were issued under the same indenture governing the 2031 senior notes, have the same
terms as the 2031 senior notes and are treated as a single series with the 2031 senior notes. The
additional 2031 senior notes were priced at par. The Company concurrently used the proceeds to
redeem all of the remaining outstanding 2026 term loans due March 15, 2026. • On September 16,
2024, UCI used proceeds from its Tower Assets Sale to make a $150.0 million partial repayment of
the 2026 term loans. • On June 7, 2024, UCI issued $500.0 million aggregate principal amount of
its 8.500% senior notes due July 31, 2031 (the “2031 senior notes”). UCI used the proceeds to
make a $500.0 million partial repayment of the 2026 term loans. • On June 6, 2024, UCI entered
into an amendment to its 2007 Credit Agreement, pursuant to which $500.0 million aggregate
principal amounts of its 2026 term loans was converted into a new tranche made up of a bank
senior secured term loan facility maturing in 2029 (the “2029 new term loans”). UCI utilized the
proceeds of the 2029 new term loans to make a $500.0 million partial repayment of the 2026 term
loans. • On January 22, 2024, UCI issued an additional $240.7 million of its existing 8.000% senior
notes due August 15, 2028 (the “January 2028 senior notes”). The January 2028 senior notes were
issued under the same indenture governing the initial 2028 senior notes (as defined, see Note 15.
Debt), have the same terms as the initial 2028 senior notes and are treated as a single series with
the 2028 senior notes. The January 2028 senior notes were priced at 101.000%. UCI used the
proceeds to redeem all the outstanding 5.125% senior notes due 2025. • On January 4, 2024, UCI
issued senior secured debt of $100.0 million, bank senior secured term loan A facility maturing in
2027 and utilized the proceeds to make a $100.0 million partial redemption of the 5.125% senior
notes due 2025. Under GAAP, UCI capitalized $18.1 million related to third party costs incurred for
the 2024 debt refinance transactions and are expensed over the respective debt maturity term.
Under IFRS, in accordance with IFRS 9, these third-party costs are expensed as incurred. 64
The Company had the following 2023 debt refinance transactions (See Note 15. Debt): • On June
30, 2023, UCI issued senior secured debt of $100.0 million, bank senior secured term loan A
facility maturing in 2027 and utilized the proceeds to make a $100.0 million partial prepayment of
the bank senior secured term B facility maturing in 2024 (the “2024 term loans”). • On July 26,
2023, UCI issued senior secured debt of $100.0 million, bank senior secured term loan A facility
maturing in 2027 and used the proceeds to make a $100.0 million partial prepayment of the 2024
term loans. • On August 7, 2023,UCI issued $500.0 million 8.000% senior notes due August 15,
2028 (the “initial 2028 senior notes”). UCI used the proceeds to prepay all of the $161.3 million the
remaining balance of the 2024 term loans and to make a $338.7 million partial redemption of the
5.125% senior notes due 2025. • On August 28, 2023, the Company issued senior secured debt of
$100.0 million made up of a bank senior secured term loan A facility maturing in 2027. The
Company utilized the proceeds of the August 2023 Term Loan A Facility to make a $100.0 million
partial redemption of the 5.125% senior notes due 2025. • On December 18, 2023, UCI issued an
additional $700.0 million aggregate principal amount of its existing 8.000% senior notes due
August 15, 2028 (the “December 2028 senior notes”). The December 2028 senior notes were
issued under the same indenture governing the initial 2028 senior notes (as defined, see Note 15.
Debt), have the same terms as the initial 2028 senior notes and are treated as a single series with
the initial 2028 notes. The December 2028 senior notes were priced at 100.500%. UCI used the
proceeds to make a $700.0 million partial redemption of the 5.125% senior notes due 2025. Under
GAAP, the Company capitalized $19.7 million related to third party costs incurred for the 2023 debt
refinance transactions and are expensed over the respective terms. Under IFRS, in accordance
with IFRS 9, these third-party costs are expensed as incurred. The following summarizes the
adjustments related to the statement of operations and balance sheet accounts for the periods
presented: Year Ended December 31, 2024 2023 As reported Adjustment As adjusted As reported
Adjustment As adjusted Interest expense.............................................. $ 725,600 $ (8,200) $
717,400 $ 695,800 $ (2,600) $ 693,200 Loss (gain) on refinancing of debt................. 9,400 18,100
27,500 (6,900) 19,700 12,800 Provision (benefit) for income taxes.............. (157,800) (2,400)
(160,200) 33,500 (4,400) 29,100 Year Ended December 31, 2022 As reported Adjustment As
adjusted Interest expense................................................................................................................. $
584,800 $ (600) $ 584,200 (Gain) loss on refinancing of
debt..................................................................................... (5,400) 17,800 12,400 Provision for
income taxes................................................................................................ 167,100 (4,400) 162,700
As of December 31, 2024 As of December 31, 2023 As reported Adjustment As adjusted As
reported Adjustment As adjusted Goodwill 1 ....................................................... $ 5,528,600 $
3,800 $ 5,532,400 $ 5,911,200 $ 3,800 $ 5,915,000 Long-term debt and finance lease obligations
9,329,900 40,500 9,370,400 9,571,100 30,600 9,601,700 Deferred tax liabilities, net
............................. 483,700 (6,400) 477,300 818,900 (4,100) 814,800 Accumulated (deficit)
retained earnings......... (2,341,800) (30,300) (2,372,100) (1,676,900) (22,800) (1,699,700) 1
Goodwill adjustment reflects impact of cumulative GAAP to IFRS tax differences related to
deferred financing costs at the time of the Company’s reorganization that occurred on May 18,
2021. 65
c. Leases The Company records its operating leases and associated liabilities on its consolidated
balance sheet. GAAP preserves the distinction between operating and finance leases whereas
under IFRS all leases except as it relates to short-term or low value leases, are recognized as
finance leases. The following summarizes the adjustments related to the statement of operations
and balance sheet accounts for the periods presented: Year Ended December 31, 2024 2023 As
reported Adjustment As adjusted As reported Adjustment As adjusted Direct operating
expenses.............................. $ 2,203,400 $ (10,800) $ 2,192,600 $ 1,914,900 $ (3,500) $
1,911,400 Selling, general and administrated expenses . 1,544,200 (900) 1,543,300 1,496,100
(3,100) 1,493,000 Finance expense............................................. — 9,100 9,100 — 10,000 10,000
(Benefit) provision for income taxes............. (157,800) 700 (157,100) 33,500 (900) 32,600 Year
Ended December 31, 2022 As reported Adjustment As adjusted Direct operating
expenses...................................................................................................... $ 1,751,100 $ (6,000) $
1,745,100 Selling, general and administrated expenses
......................................................................... 1,359,500 (900) 1,358,600 Finance
expense..................................................................................................................... — 10,000
10,000 Provision for income taxes.....................................................................................................
167,100 (800) 166,300 As of December 31, 2024 As of December 31, 2023 As reported
Adjustment As adjusted As reported Adjustment As adjusted Goodwill 1
.................................................... $ 5,528,600 $ (6,800) $ 5,521,800 $ 5,911,200 $ (6,800) $
5,904,400 Operating right-of-use assets....................... 162,200 (9,400) 152,800 136,500 (12,000)
124,500 Deferred tax assets....................................... 154,100 9,200 163,300 248,500 9,900
258,400 Accumulated (deficit) retained earnings...... (2,341,800) (7,000) (2,348,800) (1,676,900)
(8,900) (1,685,800) 1 Goodwill adjustment reflects impact of cumulative GAAP to IFRS tax
differences related to leases at the time of the Company’s reorganization that occurred on May 18,
2021. 66
d. Program Rights Impairment Under GAAP, program rights are tested for impairment on a stand-
alone basis and impaired if the book value exceeds the fair value due to diminished forecasted
profitability. Under IAS 36, Impairment of Assets, program rights are tested for impairment as a part
of their associated cash-generating unit (“CGU”) and no impairment is recognized if the associated
CGU is not impaired, or if the CGU is impaired, until any associated goodwill is fully impaired.
Under both GAAP and IFRS, cancelled program rights will not be actively marketed for broadcast
or streaming, since its considered substantively obsolete and fully impaired. The following
summarizes the adjustments related to the statement of operations and balance sheet accounts for
the periods presented: Year Ended December 31, 2024 2023 As reported Adjustment As adjusted
As reported Adjustment As adjusted Direct operating expenses.............................. $ 2,203,400 $
5,800 $ 2,209,200 $ 1,914,900 $ 5,400 $ 1,920,300 Impairment loss..............................................
900,200 — 900,200 1,011,800 (6,500) 1,005,300 (Benefit) provision for income taxes.............
(157,800) (1,500) (159,300) 33,500 300 33,800 Year Ended December 31, 2022 As reported
Adjustment As adjusted Direct operating
expenses........................................................................................................ $ 1,751,100 $ — $
1,751,100 Impairment
loss........................................................................................................................ 1,663,200 (7,600)
1,655,600 Provision for income
taxes....................................................................................................... 167,100 2,000 169,100 As
of December 31, 2024 As of December 31, 2023 As reported Adjustment As adjusted As reported
Adjustment As adjusted Program rights and prepayments (current)..... $ 122,700 $ 4,600 $ 127,300
$ 116,000 $ 10,400 $ 126,400 Goodwill 1 ....................................................... 5,528,600 14,800
5,543,400 5,911,200 14,800 5,926,000 Deferred tax liabilities, net ............................. 483,700
16,200 499,900 818,900 17,500 836,400 Accumulated (deficit) retained earnings......... (2,341,800)
3,200 (2,338,600) (1,676,900) 7,600 (1,669,300) 1 Goodwill adjustment reflects impact of
cumulative GAAP to IFRS tax differences related to program rights and prepayments at the time of
the Company’s reorganization that occurred on May 18, 2021. 67
e. Media Networks CGU Impairments Under GAAP, long-lived assets, intangible assets with
definite lives and indefinite lives are tested for impairment at an individual asset level (if possible)
or asset group and goodwill is allocated to the reportable unit. Under IFRS, the Company tests
such assets for impairment at an individual asset level (whenever possible) or the CGU level,
goodwill is allocated to CGUs or groups of CGUs. An accounting adjustment is made to reflect
differences due to the level in which assets may be tested for impairment. During the year ended
December 31, 2024, under GAAP the Company recorded FCC Television license impairment of
$534.2 million, MSO relationships of $333.1 million, and Tradename impairment of $32.9 million.
Under IFRS, the Company recorded an impairment of $333.1 million relating to the Mexico MSO
relationship as result of non-renewal of a significant distribution contract. Further, Under IFRS, the
Company performed an impairment analysis at the CGU level and no impairment was recorded. As
a result the FCC Television license and Tradenames impairment charges recorded under GAAP
were reversed. During the year ended December 31, 2023, under GAAP the Company recorded
Goodwill impairment of $778.7 million, FCC Television license impairment of $211.1 million, and
Tradename impairment of $4.6 million. Under IFRS, the Company performed an impairment
analysis at the CGU level and recorded an impairment of $734.9 million that was allocated in its
entirety to Goodwill as IFRS requires that if a CGU is impaired that impairment is allocated first to
reduce goodwill to zero, then, subject to certain limitations, the carrying amount of other assets in
the CGU are reduced pro rata based on the carrying amount of each asset. As a result the FCC
Television license and Tradenames impairment charges recorded under GAAP were reversed. The
following summarizes the adjustments related to the income statement and the balance sheet for
each applicable period presented: Year Ended December 31, 2024 Year Ended December 31,
2023 As reported Adjustment As adjusted As reported Adjustment As adjusted Impairment
loss............................................... $ 900,200 $ (567,100) $ 333,100 $ 1,011,800 $ (259,500) $
752,300 Provision for income taxes.............................. (157,800) 141,800 (16,000) 33,500 55,500
89,000 Year Ended December 31, 2022 As reported Adjustment As adjusted Impairment
loss........................................................................................................................ $ 1,663,200 $
(168,100) $ 1,495,100 Provision for income
taxes....................................................................................................... 167,100 37,000 204,100 As
of December 31, 2024 As of December 31, 2023 As reported Adjustment As adjusted As reported
Adjustment As adjusted Intangible assets, net......................................... $ 4,678,800 $ 926,500 $
5,605,300 $ 6,234,600 $ 359,400 $ 6,594,000 Goodwill 1 .........................................................
5,528,600 68,200 5,596,800 5,911,200 68,200 5,979,400 Deferred tax liabilities,
net................................ 483,700 234,300 718,000 818,900 92,500 911,400 Accumulated (deficit)
retained earnings........... (2,341,800) 760,400 (1,581,400) (1,676,900) 335,100 (1,341,800) 1
Goodwill adjustment reflects impact of cumulative GAAP to IFRS tax differences related to
indefinite lived assets within the media networks cash generating unit at the time of the Company’s
reorganization that occurred on May 18, 2021. 68
f. Radio CGU Impairment Under GAAP, long-lived assets, intangible assets with definite lives and
indefinite lives are tested for impairment at an individual asset level (if possible) or asset group and
goodwill is allocated to the reportable unit. Under IFRS, the Company tests such assets for
impairment at at an individual asset level (whenever possible) or the CGU level and goodwill is
allocated to CGUs or groups of CGUs. An accounting adjustment is made to reflect differences due
to the level in which assets may be tested for impairment. The following summarizes the
adjustments related to the balance sheet for each applicable period presented. As of December 31,
2024 As of December 31, 2023 As reported Adjustment As adjusted As reported Adjustment As
adjusted Goodwill 1 .................................................. $ 5,528,600 $ 25,000 $ 5,553,600 $ 5,911,200
$ 25,000 $ 5,936,200 Deferred tax liabilities, net......................... 483,700 25,000 508,700 818,900
25,000 843,900 1 Goodwill adjustment reflects impact of cumulative GAAP to IFRS tax differences
related to indefinite lived assets within the radio cash generating unit at the time of the Company’s
reorganization that occurred on May 18, 2021. g. Preferred Shares Under GAAP, the Convertible
Preferred Shares are classified as temporary equity and presented as Redeemable Convertible
Shares within the consolidated balance sheet. Under IFRS, the Convertible Preferred Shares
discussed below are accounted as a convertible financial instrument with an embedded derivative
liability in accordance with IFRS 9. Under IFRS, the bifurcated derivative liability of the Convertible
Preferred Shares is marked-to-market at each reporting period, with corresponding changes going
through Finance expense or income. Series A Preferred Shares - As noted in Note 17. Capital
Stock, the Series A preferred shares were converted into 1,845,293 class A common stock on
January 31, 2022, resulting in the reclassification to shareholders’ equity of amounts recorded
within other long-term liabilities and derivative financial liabilities related to the debt and embedded
derivative liability component of the Series A preferred shares. Prior to this conversion the
Company recorded a mark-to-market adjustment to finance expense of $7.6 million in January
2022 to increase the amount of the recorded bifurcated derivative liability component under IFRS.
Additionally, upon conversion the Company also reclassified to shareholders’ equity a deferred tax
asset of $70.4 million recorded under IFRS relating to the cumulative mark-to-market adjustments
of the derivative liability component of the Series A preferred shares prior to their conversion to
Class A common stock. Series B Preferred Shares - On January 31, 2022, the Company
authorized and issued 750,000 Series B cumulative convertible Preferred Shares to Grupo
Televisa, which were recorded at fair value of $852.6 million, pursuant to the TelevisaUnivision
Transaction (refer to Note 3. TelevisaUnivision Transaction). The Company recorded a mark-to-
market adjustment to finance income of $70.3 million, $31.8 million and $46.4 million to decrease
the amount of the recorded bifurcated derivative liability component under IFRS for the years
ended December 31, 2024, 2023, and 2022, respectively. The Company paid Series B preferred
stock dividends of $41.3 million, $41.3 million and $37.8 million which are recorded as interest
expense under IFRS for each of the years ended December 30, 2024, 2023, and 2022,
respectively. This stock dividend was recorded as a reduction of shareholders’ equity under GAAP.
Series C Preferred Shares - On January 31, 2022, the Company authorized 1,008,640 and issued
1,008,014 Series C convertible Preferred Shares to Soft Bank, Google, ForgeLight, Raine Group,
and Other for $1,007.1 million, issued to finance the TelevisaUnivision Transaction (refer to Note 3.
TelevisaUnivision Transaction). The Company recorded a mark-to-market adjustment to finance
income of $120.7 million, $48.7 million and $86.4 million to decrease the amount of the recorded
bifurcated derivative liability component under IFRS for the years ended December 31, 2024, 2023
and 2022, respectively. 69
The following tables summarizes the adjustments related to the income statement and the balance
sheet for each applicable period presented: Year Ended December 31, 2024 2023 As reported
Adjustment As adjusted As reported Adjustment As adjusted Interest
expense.............................................. $ 725,600 $ 41,300 $ 766,900 $ 695,800 $ 41,300 $ 737,100
Finance income .............................................. — (191,100) (191,100) — (80,500) (80,500)
(Benefit) provision for income taxes............. (157,800) 37,500 (120,300) 33,500 30,400 63,900
Year Ended December 31, 2022 As reported Adjustment As adjusted Interest
expense........................................................................................................................ $ 584,800 $
37,800 $ 622,600 Finance
expense....................................................................................................................... — 7,900 7,900
Finance (income) ..................................................................................................................... —
(133,100) (133,100) Provision for income
taxes....................................................................................................... 167,100 22,500 189,600 As
of December 31, 2024 As of December 31, 2023 As reported Adjustment As adjusted As reported
Adjustment As adjusted Goodwill 1 $ 5,528,600 $ (69,300) $ 5,459,300 $ 5,911,200 $ (69,300) $
5,841,900 Derivative financial liabilities...................... — 116,000 116,000 — 307,000 307,000
Other long term liabilities............................ 189,500 1,340,500 1,530,000 289,100 1,340,500
1,629,600 Deferred tax liabilities, net........................... 483,700 90,800 574,500 818,900 53,300
872,200 Redeemable shares....................................... 1,859,700 (1,859,700) — 1,859,700
(1,859,700) — Additional paid-in-capital............................ 3,508,200 25,300 3,533,500 3,462,800
(16,000) 3,446,800 Accumulated (deficit) retained earnings...... (2,341,800) 217,800 (2,124,000)
(1,676,900) 105,600 (1,571,300) 1 Goodwill adjustment reflects the impact of cumulative GAAP to
IFRS tax differences related to preferred shares at the time of the Company’s reorganization that
occurred on May 18, 2021. h. Deferred Revenue Under GAAP (ASC 805 Business Combinations
and ASU 2021-08: Accounting for Contract Assets and Contract Liabilities from Contracts with
Customers), contract liabilities from contracts with customers assumed in business combination
are recognized and measured in accordance with ASC 606 Revenue Recognition. Under IFRS
(IFRS 3 – Business Combinations), contract liabilities assumed in business combination are
recognized and measured at fair value at the acquisition date. The following tables summarizes the
adjustments related to the balance sheet for each applicable period presented: As of December 31,
2024 As of December 31, 2023 As reported Adjustment As adjusted As reported Adjustment As
adjusted Goodwill1 $ 5,528,600 $ (16,300) $ 5,512,300 $ 5,911,200 $ (16,300) $ 5,894,900
Deferred tax liabilities, net...................... 483,700 (4,200) 479,500 818,900 (4,200) 814,700
Accumulated (deficit) retained earnings. (2,341,800) (12,100) (2,353,900) (1,676,900) (12,100)
(1,689,000) 1 Goodwill adjustment reflects the impact of cumulative GAAP to IFRS tax differences
related to deferred revenue at the time of the Company’s reorganization that occurred on May 18,
2021. 70
i. Interest Rate Swap The Company’s objectives in using interest rate derivatives are to add
stability to interest expense and to manage its exposure to interest rate movements. To accomplish
these objectives, the Company primarily uses interest rate swaps as part of its interest rate risk
management strategy. As of December 31, 2024, and December 31, 2023, the Company has two
remaining effective cash flow hedges. See Note 16. Interest Rate Swaps Under GAAP (ASC 815 –
Derivatives and Hedging), hedge ineffectiveness is not separately measured and recognized in
income each reporting period. If the hedge is highly effective, all changes in the fair value of the
derivative hedging instrument is deferred into other comprehensive income (OCI) and
subsequently reclassified to earnings when the hedge transaction affects earnings. Under IFRS 9,
for cash flow hedges, the effective portion of the change in the fair value of the hedging instrument
is also deferred into OCI. However, the amount recognized in OCI should be the lower of (1) the
cumulative gain or loss on the hedging instrument from the inception of the hedge, and (2) the
cumulative change in the fair value (present value) of the expected cash flows on the hedged item
from the inception of the hedge. The remaining ineffective portion of the change in the fair value of
the hedging instrument (if any) is recognized immediately in profit or loss. The following
summarizes the adjustments related to the statement of operations and balance sheet for each
applicable period presented: Year Ended December 31, 2024 2023 As reported Adjustment As
adjusted As reported Adjustment As adjusted Interest expense......................................... $ 725,600
$ (3,700) $ 721,900 $ 695,800 $ (4,900) $ 690,900 (Benefit) provision for income taxes........
(157,800) 900 (156,900) 33,500 1,300 34,800 Year Ended December 31, 2022 As reported
Adjustment As adjusted Interest
expense........................................................................................................................ $ 584,800 $
300 $ 585,100 Provision for income
taxes....................................................................................................... 167,100 (100) 167,000 As
of December 31, 2024 As of December 31, 2023 As reported Adjustment As adjusted As reported
Adjustment As adjusted Deferred tax liabilities, net............................. $ 483,700 $ 2,300 $ 486,000
$ 818,900 $ 1,400 $ 820,300 Accumulated (deficit) retained earnings........ (2,341,800) 6,900
(2,334,900) (1,676,900) 4,100 (1,672,800) Accumulated other comprehensive income... 145,600
(9,200) 136,400 1,025,800 (5,500) 1,020,300 j. Pensions and post-employment benefits As a result
of the TelevisaUnivision Transaction (refer to Note 3. TelevisaUnivision Transaction), the Company
assumed a legal indemnity post-employment benefits under the Mexican Labor Law. The plan
covers for employees who are dismissed unjustifiably and such employees are entitled to three
months of salary plus 20 days of salary per year of service. Under GAAP - ASC 715, the Company
records the liability when it is probable that the benefits will be paid and the amount can be
reasonably estimated. The Company records the legal indemnity net period costs other than
service costs in Other, net line under US GAAP. Under IFRS (IAS 19 – Employee Benefits), the
Company records the liability when there is a legal or constructive obligation, which is met at the
earlier of recognizing the restructuring, severance and related costs or when the Company can no
longer withdraw the offer of the benefits. The Company records the legal indemnity related
expenses in restructuring, severance and relates charges line as actual payments occur under
IFRS. Under US GAAP, actuarial remeasurements gains/losses are recognized in the statement of
operations either immediately or in the future in systematic manner. Under IFRS, these actuarial
gains/losses) are recognized immediately in Other Comprehensive Income and are not
subsequently recycled through the statement of operations. 71
The following summarizes the adjustments related to the statement of operations and balance
sheet for each applicable period presented: Year Ended December 31, 2024 2023 As reported
Adjustment As adjusted As reported Adjustment As adjusted Selling, general and administrative
expenses........... $ 1,544,200 $ — $ 1,544,200 $ 1,496,100 $ (5,700) $ 1,490,400 Restructuring,
severance and related charges .......... 72,900 — 72,900 53,400 3,500 56,900 Other,
net.................................................................. 38,100 (400) 37,700 8,200 (8,600) (400) (Benefit)
provision for income taxes........................ (157,800) 100 (157,700) 33,500 2,700 36,200 Year
Ended December 31, 2022 As reported Adjustment As adjusted Selling, general and administrative
expenses........................................................................ $ 1,359,500 $ — $ 1,359,500
Restructuring, severance and related charges ....................................................................... 68,500
5,500 74,000 Other,
net............................................................................................................................... 65,700 —
65,700 Provision for income taxes....................................................................................................
167,100 (1,400) 165,700 As of December 31, 2024 As of December 31, 2023 As reported
Adjustment As adjusted As reported Adjustment As adjusted
Goodwill........................................................ $ 5,528,600 $ (73,700) $ 5,454,900 $ 5,911,200 $
(73,700) $ 5,837,500 Deferred tax liabilities, net ............................ 483,700 1,200 484,900 818,900
1,300 820,200 Other long-term liabilities ............................. 189,500 (80,000) 109,500 289,100
(80,400) 208,700 Accumulated (deficit) retained earnings........ (2,341,800) 3,700 (2,338,100)
(1,676,900) 4,000 (1,672,900) Accumulated other comprehensive income... 145,600 1,400 147,000
1,025,800 1,400 1,027,200 72
k. Classification of Consolidated Statement of Operations Line Items Under IFRS, in addition to the
adjustments noted above, the classification of certain income and expense items within the
Statement of Operations differs from the classifications under GAAP, after required adjustments,
are summarized below: • Under GAAP, the Company presents “Depreciation and amortization” as
a separate line item on its consolidated statements of operations, while such costs are classified
based on their function under IFRS. Accordingly, depreciation and amortization have been
reclassified to “Cost of sales” and “Administrative expenses” based on their function. Similarly, a
portion of rent expense attributable to operating leases under U.S. GAAP has been reclassified to
“Cost of sales” and “Administrative expenses” based on the underlying lease. For the years ended
December 31, 2024, 2023 and 2022, $528.1 million, $552.4 million and $508.7 million,
respectively, was reclassified to “Cost of sales” and $23.5 million, $18.3 million and $15.6 million,
respectively, to “Administrative expenses.” • Under GAAP, the Company presents “Restructuring,
severance and related charges” as a separate line item on its consolidated statements of
operations. These amounts have been reclassified to “Other expense, net.” For the years ended
December 31, 2024, 2023 and 2022, $72.9 million, $56.9 million and $74.0 million, respectively,
have been reclassified to “Other expense, net.” • Under GAAP, the Company presents “Selling,
general and administrative expenses” within one line item on its consolidated statements of
operations while such costs are classified based on the function into two separate line items under
IFRS: “Selling expenses” and “Administrative expenses.” Accordingly, for the years ended
December 31, 2024, 2023 and 2022, $1,059.4 million, $1,003.7 million and $896.1 million,
respectively, was reclassified to “Selling expenses” and $434.2 million, $490.0 million and $508.9
million, respectively, to “Administrative expenses”. • Under GAAP, the Company presents “(Gain)
loss on dispositions” as a separate line item on its consolidated statements of operations while
such costs are classified within “Other expense, net” under IFRS. Accordingly, for the years ended
December 31, 2024, 2023 and 2022, a gain of $155.2 million, a loss of $27.5 million and a loss of
$40.6 million, respectively, have been reclassified to “Other expense, net”. • Under GAAP, the
Company presents “Impairment loss” as a separate line item on its consolidated statements of
operations while such costs are classified within “Other expense, net” under IFRS. Accordingly, for
the years ended December 31, 2024, 2023 and 2022, $333.1 million, $745.8 million and $1,487.5
million respectively, have been reclassified to “Other expense, net”. • Under GAAP, the Company
presents “Other, net” as a non-operating component of its consolidated statements of operations
and under IFRS, this is classified as “Other expense, net,” a component of operating income.
Accordingly, for the years ended December 31, 2024, 2023 and 2022, $37.7 million, $36.1 million
and $45.0 million respectively, has been reclassified to “Other expense, net,” a component of
operating income. • Under GAAP, the Company presents “Interest expense,” “Interest income,” and
“Loss on refinancing of debt” as separate line items on its consolidated statements of operations.
Under IFRS, such costs are classified within “Finance expense” or “Finance income,” as
applicable. Accordingly, interest expense and loss (gain) on refinancing of debt have been
reclassified to “Finance expense” for all periods presented, while interest income has been
reclassified to “Finance income” for all periods presented. This resulted in $791.6 million, $752.4
million and $652.6 million, being reclassified to “Finance expense” for the years ended December
31, 2024, 2023 and 2022, respectively. In addition, for the years ended December 31, 2024, 2023
and 2022, $212.2 million, $100.3 million and $144.5 million, respectively, has been reclassified to
“Finance income.” • Under GAAP, the Company presents (income) loss on equity method
investments as part of “(Gains) loss on investments” on its consolidated statements of operations,
while this is classified within “Share of loss of associates and joint ventures, net” under IFRS.
Accordingly, for the years ended December 31, 2024, 2023 and 2022, $9.2 million loss $35.7
million loss and $20.7 million loss respectively, have been reclassified to “Share of loss of
associates and joint ventures, net.” 73
l. Classification of Consolidated Balance Sheet Line Items Under IFRS, in addition to the
adjustments noted above, the classification of certain assets and liabilities within the balance sheet
differ from the classifications under GAAP, after required adjustments, are summarized below: •
Under GAAP, the Company presented interest rate swaps within "Prepaid expenses and other
current assets," while the non current portion of the asset is presented within “Other assets” on its
consolidated balance sheet, while under IFRS, derivatives are presented as a separate line item.
As of December 31, 2024, $6.5 million has been reclassified to “Derivative financial assets - non
current” and $46.3 million have been reclassified to “Derivative financial assets - current.” As of
December 31, 2023, $31.8 million has been reclassified to “Derivative financial assets - non
current” and $60.0 million has been reclassified to “Derivative financial assets - current.” • Under
GAAP, the Company presented program rights and prepayments as “Current portion of program
rights and prepayments, net” and "Program rights and prepayments, net" on its consolidated
balance sheet, while under IFRS, this is presented as “Transmission rights and programming.” As
of December 31, 2024 and December 31, 2023, $808.2 million and $825.9 million was reclassified
to “Transmission rights and programming” within current assets, respectively. As of December 31,
2024 and December 31, 2023, $413.7 million and $465.9 million was reclassified to “Transmission
rights and programming” within noncurrent assets, respectively. • Under GAAP, the Company
presents all investments in one line item “Investments” on its consolidated balance sheet, while
under IFRS, investments are presented into separate categories based on their nature:
“Investments in financial instruments” and “Investments in associates and joint ventures.”
Accordingly, as of December 31, 2024, $295.8 million and $1.1 million has been reclassified to
“Investment in financial instruments” and “Investments in associates and joint ventures”,
respectively. As of December 31, 2023, $277.7 million and $1.6 million has been reclassified to
“Investment in financial instruments” and “Investments in associates and joint ventures,”
respectively. • Under GAAP, the Company presents “Goodwill” as a separate line item on its
consolidated balance sheet, while under IFRS, goodwill is presented within “Intangible assets, net.”
Accordingly, as of December 31, 2024 and December 31, 2023, $5,492.4 million and $5,875.0
million, respectively, has been reclassified to “Intangible assets, net.” • Under GAAP, the Company
presents “Accrued interest” as part of “Accounts payable and accrued liabilities” on its consolidated
balance sheet. Under IFRS, accrued interest is presented within the current portion of long-term
debt. Accordingly, $204.5 million and $64.5 million of accrued interest has been reclassified to
“Current portion of long-term debt and interest payable” as of December 31, 2024 and December
31, 2023, respectively. • Under GAAP, the Company presents other taxes payable as part of
“Accounts payable and accrued liabilities” on its consolidated balance sheet. Under IFRS, other
taxes payable is presented as a separate line on the balance sheet. Accordingly, $61.9 million and
$103.6 million of other taxes payable has been reclassified to “Other taxes payable” as of
December 31, 2024 and December 31, 2023, respectively. • Under GAAP, the Company presents
current income taxes payable as part of “Accounts payable and accrued liabilities” on its
consolidated balance sheet. Under IFRS, current income taxes payable is presented as a separate
line on the balance sheet. As of December 31, 2024 and December 31, 2023 the income taxes
payable included in “Accounts payable and accrued liabilities” was $14.4 million payable and $25.6
million payable, respectively. • Under GAAP, the Company presents employee benefits payable as
part of “Accounts payable and accrued liability” and “Other long-term liabilities” on its consolidated
balance sheet. Under IFRS, employee benefits payable is presented as a separate line on the
balance sheet. Accordingly, as of December 31, 2024, $104.0 million and $0.9 million has been
reclassified from “Accounts payable and accrued liabilities” and “Other long-term liabilities,”
respectively, to “Employee Benefits” and “Post-employment benefits,” respectively. As of December
31, 2023, $105.3 million and $1.3 million has been reclassified from “Accounts payable and
accrued liabilities” and “Other long-term liabilities,” respectively, to “Employee Benefits” and “Post-
employment benefits,” respectively. 74
• Under GAAP, the Company presents finance lease obligations as part of “Current portion of long-
term debt and finance lease obligations” and “Long-term debt and finance lease obligations” on its
consolidated balance sheet. Under IFRS, finance lease obligations are presented separately from
long-term debt. Accordingly, finance lease obligations (current and non-current) have been
reclassified to a separate line on the consolidated balance sheet. Similarly, the operating lease
liabilities recorded as right-of-use liabilities due to the adoption of ASC 842 has been reclassified to
“Finance lease obligations.” As of December 31, 2024, $53.1 million has been reclassified to
“Current portion of finance lease obligations” and $200.4 million has been reclassified to “Finance
lease obligations, net of current portion.” As of December 31, 2023, $46.2 million has been
reclassified to “Current portion of finance lease obligations” and $172.8 million has been
reclassified to “Finance lease obligations, net of current portion.” • Under GAAP, the Company
presents deferred tax assets and liabilities on a net basis for domestic entities only within “Deferred
tax liabilities, net.” Under IFRS, deferred tax assets and liabilities are presented on a gross basis
and accordingly, items have been reclassified to reflect the gross presentation. As of December 31,
2024 and December 31, 2023, $172.2 million and $779.5 million, respectively, inclusive of the
GAAP to IFRS differences discussed above, has been reclassified to “Deferred income tax assets.”
• Under GAAP, the Company presents capitalized software costs within “Property and equipment,
net” on its consolidated balance sheet. Under IFRS, capitalized software costs are presented
within “Intangible assets, net.” Accordingly, $112.4 million and $126.4 million has been reclassified
to “Intangible assets, net,” as of December 31, 2024 and December 31, 2023, respectively. • Under
GAAP, the Company presents post-employment benefits as part of “Other long-term liabilities” on
its consolidated balance sheet. Under IFRS, post-employment benefits are presented as a
separate line item within the balance sheet. As of December 31, 2024 and December 31, 2023,
$56.8 million and $57.7 million has been reclassified from “Other long-term liabilities” to “Post-
employment benefits”, respectively, including $0.9 million and $1.3 million of employee benefits
payable disclosed above. • Under GAAP, the Company presents balances due from related parties
within “Accounts receivable, net”, “Prepaid expenses and other current assets”, and balance to
related parties within “Accounts payable and accrued liabilities”, “Current deferred revenue”,
“Current portion of long-term debt and finance lease obligations,” “Long-term debt and finance
lease obligations” and "Non-current deferred revenue" on its consolidated balance sheet,
respectively. Under IFRS, related party balances are presented as separate line items as “Due
from related parties” and “Due to related parties” as applicable. As of December 31, 2024, $43.1
million was reclassified from “Accounts receivable, net” and “Prepaid expenses and other current
assets” to “Due from related parties”, $199.1 million was reclassified from “Accounts payable and
accrued liabilities,” “Current deferred revenue” and “Current portion of long-term debt and finance
lease obligations” to “Due to related parties” and $318.5 million was reclassified from “Long-term
debt and finance lease obligations,” “Non-current deferred revenue” and “Other long-term liabilities”
to “Due to related parties noncurrent”. As of December 31, 2023, $64.8 million was reclassified
from “Accounts receivable, net” and “Prepaid expenses and other current assets” to “Due from
related parties”, $231.5 million was reclassified from “Accounts payable and accrued liabilities”,
“Current deferred revenue” and “Current portion of long-term debt and finance lease obligations” to
“Due to related parties” and $536.5 million was reclassified from “Long-term debt and finance lease
obligations,” “Non-current deferred revenue” and “Other long-term liabilities” to “Due to related
parties noncurrent”. 75
m. Net loss and Stockholders’ Equity Reconciliation Between GAAP and IFRS The table below
summarizes the adjustments to net loss and stockholders’ equity which would be required if IFRS
had been applied instead of GAAP: Year Ended December 31, 2024 2023 2022 Net loss as
reported under GAAP......................................................... $ (664,900) $ (854,000) $ (1,542,200)
Share-based payments (a)..................................................................... 40,300 1,700 (63,500)
Deferred financing costs (b) ................................................................. (7,500) (12,700) (12,800)
Leases (c).............................................................................................. 1,900 (2,500) (2,300)
Program rights impairment (d) ............................................................. (4,300) 800 5,600 Media
networks CGU impairment (e).................................................. 425,300 204,000 131,100 Preferred
shares (g)............................................................................... 112,200 8,800 64,900 Deferred
revenue (h)............................................................................. — — (12,100) Interest rate swap (i)
............................................................................. 2,800 3,600 (200) Pension and post-employment
benefits (j) ........................................... 300 8,100 (4,100) Net loss under
IFRS.............................................................................. $ (93,900) $ (642,200) $ (1,435,600)
December 31, 2024 December 31, 2023 Stockholders' equity as reported under
GAAP................................ $ 1,302,400 $ 2,802,100 Share-based payments
(a)................................................................ (37,600) (24,000) Deferred financing costs
(b)............................................................ (30,300) (22,800) Leases (c)
........................................................................................ (7,000) (8,900) Program rights impairment
(d)........................................................ 3,200 7,600 Media networks CGU impairment
(e)............................................. 760,400 335,100 Preferred shares (g)
......................................................................... 243,200 89,600 Deferred revenue (h)
....................................................................... (12,100) (12,100) Interest rate swap
(i)........................................................................ (2,300) (1,400) Pension and post-employment
benefits (j)...................................... 5,100 5,400 Stockholders' equity under
IFRS..................................................... $ 2,225,000 $ 3,170,600 76