Yes

No

x

 

(1) THIS CONCEPT MUST BE COMPLETED WHEN GUARANTEES HAVE BEEN PROVIDED AFFECTING CASH AND CASH EQUIVALENTS

(*) DATA IN UNITS

 

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STATEMENTS OF COMPREHENSIVE INCOME

FOR THE NINE AND THREE MONTHS ENDED SEPTEMBER 30, 2015 AND 2014

(THOUSANDS OF MEXICAN PESOS)

 

CONSOLIDATED

Final Printing

REF	ACCOUNT / SUBACCOUNT		CURRENT YEAR		PREVIOUS YEAR
			CUMULATIVE	QUARTER	CUMULATIVE	QUARTER
40010000	NET INCOME		63,100,701	22,255,607	56,098,147	19,829,693
40010010		SERVICES	48,007,780	16,906,683	42,611,709	15,170,941
40010020		SALE OF GOODS	1,708,857	591,501	1,600,429	500,032
40010030		INTEREST	0	0	0	0
40010040		ROYALTIES	5,155,238	1,992,979	4,427,313	1,592,831
40010050		DIVIDENDS	0	0	0	0
40010060		LEASE	8,228,826	2,764,444	7,458,696	2,565,889
40010061		CONSTRUCTION	0	0	0	0
40010070		OTHER	0	0	0	0
40020000	COST OF SALES		33,896,714	11,583,845	30,245,578	10,357,163
40021000	GROSS PROFIT (LOSS)		29,203,987	10,671,762	25,852,569	9,472,530
40030000	GENERAL EXPENSES		15,596,086	5,366,303	12,683,043	4,367,281
40040000	INCOME (LOSS) BEFORE OTHER INCOME AND EXPENSES, NET		13,607,901	5,305,459	13,169,526	5,105,249
40050000	OTHER INCOME AND (EXPENSE), NET		34,958	-693,751	-4,759,838	-4,546,637
40060000	OPERATING INCOME (LOSS)		13,642,859	4,611,708	8,409,688	558,612
40070000	FINANCE INCOME		8,357,265	7,528,469	1,662,885	1,217,408
40070010		INTEREST INCOME	766,191	130,449	891,944	329,928
40070020		FOREIGN EXCHANGE GAIN, NET	0	0	0	0
40070030		DERIVATIVES GAIN, NET	193,054	0	0	116,539
40070040		EARNINGS FROM CHANGES IN FAIR VALUE OF FINANCIAL INSTRUMENTS	5,262,277	5,262,277	770,941	770,941
40070050		OTHER	2,135,743	2,135,743	0	0
40080000	FINANCE EXPENSE		6,533,139	2,082,618	4,455,069	1,654,635
40080010		INTEREST EXPENSE	4,565,509	1,557,362	4,056,896	1,421,427
40080020		FOREIGN EXCHANGE LOSS, NET	1,967,630	416,846	365,988	233,208
40080030		DERIVATIVES LOSS, NET	0	108,410	32,185	0
40080050		LOSS FROM CHANGES IN FAIR VALUE OF FINANCIAL INSTRUMENTS	0	0	0	0
40080060		OTHER	0	0	0	0
40090000	FINANCE INCOME (EXPENSE) NET		1,824,126	5,445,851	-2,792,184	-437,227
40100000	PARTICIPATION IN THE RESULTS OF ASSOCIATES AND JOINT VENTURES		-268,237	-19,077	47,539	116,387
40110000	INCOME (LOSS) BEFORE INCOME TAXES		15,198,748	10,038,482	5,665,043	237,772
40120000	INCOME TAXES		4,860,466	3,252,885	1,666,888	65,843
40120010		INCOME TAX, CURRENT	5,780,060	2,797,002	3,114,930	1,248,470
40120020		INCOME TAX, DEFERRED	-919,594	455,883	-1,448,042	-1,182,627
40130000	INCOME (LOSS) FROM CONTINUING OPERATIONS		10,338,282	6,785,597	3,998,155	171,929
40140000	INCOME (LOSS) FROM DISCONTINUED OPERATIONS,   NET		0	0	0	0
40150000	NET INCOME (LOSS)		10,338,282	6,785,597	3,998,155	171,929
40160000	NET INCOME (LOSS) ATTRIBUTABLE TO NON-CONTROLLING INTEREST		1,010,352	239,844	1,115,504	354,730
40170000	NET INCOME (LOSS) ATTRIBUTABLE TO CONTROLLING INTEREST		9,327,930	6,545,753	2,882,651	-182,801
40180000	NET INCOME (LOSS) PER BASIC SHARE		3.23	2.27	1.00	-0.06
40190000	NET INCOME (LOSS) PER DILUTED SHARE		3.01	2.11	0.93	-0.06

 

 

 

 

STATEMENTS OF COMPREHENSIVE INCOME

OTHER COMPREHENSIVE INCOME (NET OF INCOME TAXES)

FOR THE NINE AND THREE MONTHS ENDED SEPTEMBER 30, 2015 AND 2014

(THOUSANDS OF MEXICAN PESOS)

 

 

CONSOLIDATED

Final Printing

 

---

MEXICO CITY, D.F., OCTOBER 22, 2015—GRUPO TELEVISA, S.A.B. (NYSE:TV; BMV: TLEVISA CPO; "TELEVISA" OR THE "COMPANY"), TODAY ANNOUNCED RESULTS FOR THE THIRD-QUARTER 2015. THE RESULTS HAVE BEEN PREPARED IN ACCORDANCE WITH INTERNATIONAL FINANCIAL REPORTING STANDARDS ("IFRS").

THE FOLLOWING INFORMATION SETS FORTH CONDENSED CONSOLIDATED STATEMENTS OF INCOME FOR THE QUARTERS ENDED SEPTEMBER 30, 2015 AND 2014, IN MILLIONS OF MEXICAN PESOS, AS WELL AS THE PERCENTAGE THAT EACH LINE REPRESENTS OF NET SALES AND THE PERCENTAGE CHANGE WHEN COMPARING 2015 WITH 2014:

NET SALES

NET SALES INCREASED BY 12.2% TO PS.22,255.6 MILLION IN THE THIRD-QUARTER 2015 COMPARED WITH PS.19,829.7 MILLION IN THE THIRD-QUARTER 2014. THIS INCREASE WAS ATTRIBUTABLE TO STRONG GROWTH IN OUR SKY AND TELECOMMUNICATIONS SEGMENTS. OPERATING SEGMENT INCOME INCREASED BY 15.3%, REACHING PS.9,585.7 MILLION WITH A MARGIN OF 42.0% IN THE THIRD-QUARTER 2015 COMPARED WITH PS.8,312.1 MILLION WITH A MARGIN OF 41.1% IN THE THIRD-QUARTER 2014.

NET INCOME ATTRIBUTABLE TO STOCKHOLDERS OF THE COMPANY

NET INCOME OR LOSS ATTRIBUTABLE TO STOCKHOLDERS OF THE COMPANY AMOUNTED TO A NET INCOME OF PS.6,545.8 MILLION IN THE THIRD-QUARTER 2015 COMPARED WITH A NET LOSS OF PS.182.8 MILLION IN THE THIRD-QUARTER 2014. THE FAVORABLE NET CHANGE OF PS.6,728.6 MILLION REFLECTED (I) A PS.5,883.1 MILLION FAVORABLE CHANGE IN FINANCE INCOME OR EXPENSE, NET; (II) A PS.3,852.9 MILLION DECREASE IN OTHER EXPENSE, NET; (III) A PS.200.3 MILLION INCREASE IN INCOME BEFORE OTHER EXPENSE, NET; AND (IV) A PS.114.8 MILLION DECREASE IN NET INCOME ATTRIBUTABLE TO NON-CONTROLLING INTERESTS. THESE FAVORABLE VARIANCES WERE PARTIALLY OFFSET BY (I) A PS.3,187.0 MILLION INCREASE IN INCOME TAXES; AND (II) A PS.135.5 MILLION UNFAVORABLE CHANGE IN SHARE OF INCOME OR LOSS OF JOINT VENTURES AND ASSOCIATES, NET.

THIRD-QUARTER RESULTS BY BUSINESS SEGMENT

THE FOLLOWING INFORMATION PRESENTS THIRD-QUARTER CONSOLIDATED RESULTS ENDED SEPTEMBER 30, 2015 AND 2014, FOR EACH OF OUR BUSINESS SEGMENTS. CONSOLIDATED RESULTS FOR THE THIRD-QUARTER 2015 AND 2014 ARE PRESENTED IN MILLIONS OF MEXICAN PESOS:

CONTENT

THIRD-QUARTER SALES INCREASED BY 1.6% TO PS.8,625.3 MILLION COMPARED WITH PS.8,491.8 MILLION IN THE THIRD-QUARTER 2014.

ADVERTISING

ADVERTISING REVENUE DECREASED BY 8.9% TO PS.5,479.6 MILLION COMPARED WITH PS.6,015.4 MILLION IN THE THIRD-QUARTER 2014. THE DROP PRIMARILY RESULTED FROM THE RESTRUCTURING OF OUR ADVERTISING SALES EFFORTS AND THE INITIAL REACTION FROM OUR ADVERTISING CUSTOMERS AS WE UPDATE OUR TERMS AND CONDITIONS.

 

NETWORK SUBSCRIPTION REVENUE

THIRD-QUARTER NETWORK SUBSCRIPTION REVENUE INCREASED BY 30.1% TO PS.934.7 MILLION COMPARED WITH PS.718.5 MILLION IN THE THIRD-QUARTER 2014. THE GROWTH WAS DRIVEN MAINLY BY THE SUSTAINED ADDITION OF PAY-TV SUBSCRIBERS, BOTH IN MEXICO AND LATIN AMERICA AND TO A LESSER EXTENT A POSITIVE TRANSLATION EFFECT ON FOREIGN-CURRENCY DENOMINATED REVENUES. DURING THE THIRD-QUARTER, TELEVISA CONTINUED TO PRODUCE AND TRANSMIT SEVERAL OF THE LEADING PAY-TV NETWORKS IN MEXICO IN KEY CATEGORIES, INCLUDING GENERAL ENTERTAINMENT, MUSIC AND LIFESTYLE, AND MOVIES. 10 OF THE TOP 30 PAY-TV NETWORKS IN MEXICO WERE PRODUCED BY TELEVISA.

LICENSING AND SYNDICATION

LICENSING AND SYNDICATION REVENUE INCREASED BY 25.8% TO PS.2,211.0 MILLION COMPARED WITH PS.1,757.9 MILLION IN THE THIRD-QUARTER 2014. THE INCREASE IS EXPLAINED MAINLY BY A POSITIVE TRANSLATION EFFECT ON FOREIGN-CURRENCY DENOMINATED REVENUES. THIRD-QUARTER ROYALTIES FROM UNIVISION INCREASED BY 2.6% TO US$89.6 MILLION IN THE THIRD-QUARTER 2015 FROM US$87.4 MILLION IN THE THIRD-QUARTER 2014. THE OTHER REVENUE COMPONENTS OF LICENSING AND SYNDICATION, ROYALTIES FROM NETFLIX AND EXPORTS TO THE REST OF THE WORLD, REMAINED RELATIVELY STABLE.

THIRD-QUARTER OPERATING SEGMENT INCOME DECREASED BY 0.5% TO PS.4,021.7 MILLION COMPARED WITH PS.4,042.0 MILLION IN THE THIRD-QUARTER 2014; THE MARGIN WAS 46.6%. THE DROP IN THE MARGIN OF 100 BASIS POINTS FROM THE SAME QUARTER LAST YEAR IS MAINLY EXPLAINED BY I) THE DROP IN OUR ADVERTISING REVENUES; AND II) AN INCREASE IN PROGRAMMING COSTS. THIS EFFECT WAS PARTIALLY COMPENSATED BY THE ABSENCE OF PRODUCTION COSTS RELATED TO THE 2014 WORLD CUP.

SKY

THIRD-QUARTER SALES GREW BY 9.3% TO PS.4,894.8 MILLION COMPARED WITH PS.4,476.8 MILLION IN THE THIRD-QUARTER 2014. THE INCREASE WAS DRIVEN BY SOLID GROWTH IN THE SUBSCRIBER BASE IN MEXICO, WHICH IS EXPLAINED BY THE CONTINUED SUCCESS OF SKY'S LOW-COST OFFERINGS. THE NUMBER OF NET ACTIVE SUBSCRIBERS INCREASED BY 166,303 DURING THE QUARTER TO 7,053,731 AS OF SEPTEMBER 30, 2015, OF WHICH 189,168 ARE IN CENTRAL AMERICA AND THE DOMINICAN REPUBLIC, COMPARED WITH 6,517,735 AS OF SEPTEMBER 30, 2014.

THIRD-QUARTER OPERATING SEGMENT INCOME INCREASED BY 9.1% TO PS.2,332.2 MILLION COMPARED WITH PS.2,136.9 MILLION IN THE THIRD-QUARTER 2014, AND THE MARGIN WAS 47.6% IN LINE WITH THE MARGIN REPORTED IN THE SAME QUARTER LAST YEAR. DURING THE QUARTER, SKY EXPERIENCED MAINLY HIGHER PROGRAMMING AND MAINTENANCE COSTS, AND HIGHER PROMOTION EXPENSES; WHICH WERE PARTIALLY COMPENSATED BY LOWER PERSONNEL COSTS AND MARKETING EXPENSES.

TELECOMMUNICATIONS

THIRD-QUARTER SALES INCREASED BY 37.5% TO PS.7,294.3 MILLION COMPARED WITH PS.5,305.1 MILLION IN THE THIRD-QUARTER 2014 DRIVEN BY GROWTH IN ALL OF OUR CABLE PLATFORMS AND THE CONSOLIDATION, FOR THE FULL QUARTER, OF PS.1,632.1 MILLION OF REVENUES FROM CABLECOM AND TELECABLE. EXCLUDING CABLECOM AND TELECABLE, THIRD-QUARTER SALES FROM OUR CABLE AND NETWORK OPERATIONS INCREASED BY 13.8%.

VOICE AND DATA REVENUE GENERATING UNITS, OR RGUS, GREW BY 52.5% AND 33.9% COMPARED WITH THE THIRD-QUARTER 2014, RESPECTIVELY, AND VIDEO RGUS GREW BY 19.2%. EXCLUDING THE ACQUISITION OF TELECABLE, VOICE AND DATA RGUS, GREW BY 45.0% AND 25.7% COMPARED WITH THE THIRD-QUARTER 2014, RESPECTIVELY, WHILE VIDEO RGUS GREW BY 5.0%.

THE FOLLOWING INFORMATION SETS FORTH THE BREAKDOWN OF RGUS PER SERVICE TYPE FOR OUR TELECOMMUNICATIONS SEGMENT AS OF SEPTEMBER 30, 2015 AND 2014:

THE RGUS OF VIDEO, BROADBAND AND VOICE AS OF SEPTEMBER 30, 2015 AMOUNTED TO 3,948,428, 2,900,771 AND 1,750,249, RESPECTIVELY, A TOTAL OF 8,599,448 RGUS.

THE RGUS  OF VIDEO, BROADBAND AND VOICE AS OF SEPTEMBER 30, 2014 AMOUNTED TO 3,312,431, 2,165,641 AND 1,147,897, RESPECTIVELY, A TOTAL OF 6,625,969 RGUS.

THIRD-QUARTER OPERATING SEGMENT INCOME INCREASED BY 50.1% TO PS.2,973.4 MILLION COMPARED WITH PS.1,981.6 MILLION IN THE THIRD-QUARTER 2014, AND THE MARGIN REACHED 40.8%, AN INCREASE OF 340 BASIS POINTS FROM THE SAME QUARTER LAST YEAR. THESE RESULTS PRIMARILY REFLECT THE CONSOLIDATION OF CABLECOM AND TELECABLE, WHICH CONTRIBUTED WITH PS.808.2 MILLION TO OPERATING SEGMENT INCOME IN THE THIRD-QUARTER 2015, CONTINUED GROWTH IN THE CABLE PLATFORMS AND BESTEL, AND LOWER TELECOM EQUIPMENT COSTS. THESE FAVORABLE VARIANCES WERE PARTIALLY OFFSET BY THE INCREASE IN MAINTENANCE COSTS, PROGRAMMING COSTS, LEASING EXPENSES, AND PERSONNEL COSTS AND EXPENSES DURING THE QUARTER. EXCLUDING CABLECOM AND TELECABLE, FOR THE FULL QUARTER, OPERATING SEGMENT INCOME INCREASED BY 18.7%.

THE FOLLOWING INFORMATION SETS FORTH THE BREAKDOWN OF REVENUES AND OPERATING SEGMENT INCOME, EXCLUDING CONSOLIDATION ADJUSTMENTS, FOR OUR CABLE AND NETWORK OPERATIONS FOR THE THIRD-QUARTER 2015 AND 2014.

OUR CABLE OPERATIONS INCLUDE VIDEO, VOICE AND DATA SERVICES PROVIDED BY CABLEVISIÓN, CABLEMÁS, TVI, CABLECOM AND TELECABLE. OUR NETWORK OPERATIONS INCLUDE SERVICES OFFERED BY BESTEL AND THE NETWORK OPERATIONS OF CABLECOM:

THE REVENUES IN THE THIRD-QUARTER 2015 OF CABLE OPERATIONS  AND NETWORK OPERATIONS AMOUNTED TO PS.6,182.4 MILLION AND PS.1,340.3 MILLION, RESPECTIVELY.

THE REVENUES IN THE THIRD-QUARTER 2014 OF CABLE OPERATIONS  AND NETWORK OPERATIONS AMOUNTED TO PS.4,398.9 MILLION AND PS.1,027.3 MILLION, RESPECTIVELY.

THE OPERATING SEGMENT INCOME IN THE THIRD-QUARTER 2015 OF CABLE OPERATIONS  AND NETWORK OPERATIONS AMOUNTED TO PS.2,505.4 MILLION AND PS.548.6 MILLION, RESPECTIVELY.

THE OPERATING SEGMENT INCOME IN THE THIRD-QUARTER 2014 OF CABLE OPERATIONS  AND NETWORK OPERATIONS AMOUNTED TO PS.1,729.1 MILLION AND PS.378.9 MILLION, RESPECTIVELY.

THESE RESULTS DO NOT INCLUDE CONSOLIDATION ADJUSTMENTS OF PS.228.4 MILLION AND PS.121.1 MILLION IN REVENUES IN THE THIRD-QUARTER 2015 AND THE THIRD-QUARTER 2014, RESPECTIVELY, OR PS.80.6 MILLION AND PS.126.4 MILLION IN OPERATING SEGMENT INCOME IN THE THIRD-QUARTER 2015 AND THE THIRD-QUARTER 2014, RESPECTIVELY, WHICH ARE INCLUDED IN THE CONSOLIDATED RESULTS OF THE TELECOMMUNICATIONS SEGMENT.

OTHER BUSINESSES

THIRD-QUARTER SALES INCREASED BY 3.7% TO PS.2,008.7 MILLION COMPARED WITH PS.1,936.6 MILLION IN THE THIRD-QUARTER 2014. THIS INCREASE IS EXPLAINED MAINLY BY I) AN INCREASE IN THE REVENUES OF OUR FEATURE-FILM DISTRIBUTION BUSINESS IN MEXICO AND THE UNITED STATES; AND II) AN INCREASE IN THE REVENUES OF OUR GAMING BUSINESS, AS A RESULT OF AN INCREASE IN THE NUMBER OF ELECTRONIC GAMING MACHINES. THIS EFFECT WAS PARTIALLY COMPENSATED BY A DECREASE IN THE REVENUES OF OUR PUBLISHING DISTRIBUTION BUSINESS AND OUR SOCCER BUSINESS.

THIRD-QUARTER OPERATING SEGMENT INCOME INCREASED BY 70.4% TO PS.258.4 MILLION COMPARED WITH PS.151.6 MILLION IN THE THIRD-QUARTER 2014, AND THE MARGIN REACHED 12.9%. THESE RESULTS REFLECT A SMALLER OPERATING SEGMENT LOSS IN OUR FEATURE-FILM DISTRIBUTION BUSINESS, AS WELL AS AN INCREASE IN THE OPERATING SEGMENT INCOME OF OUR GAMING, AND SOCCER BUSINESSES. THIS EFFECT WAS PARTIALLY COMPENSATED BY AN INCREASE IN THE OPERATING SEGMENT LOSS OF OUR PUBLISHING BUSINESS.

INTERSEGMENT OPERATIONS

INTERSEGMENT OPERATIONS FOR THE THIRD-QUARTER 2015 AND 2014 AMOUNTED TO PS.567.5 MILLION AND PS.380.6 MILLION, RESPECTIVELY.

CORPORATE EXPENSE

CORPORATE EXPENSE INCREASED BY PS.138.4 MILLION, OR 38.7%, TO PS.496.3 MILLION IN THE THIRD-QUARTER 2015, FROM PS. 357.9 MILLION IN THE THIRD-QUARTER 2014. THE INCREASE REFLECTED PRIMARILY A HIGHER SHARE-BASED COMPENSATION EXPENSE.

SHARE-BASED COMPENSATION EXPENSE IN THE THIRD QUARTER 2015 AND 2014 AMOUNTED TO PS.325.0 MILLION AND PS.224.4 MILLION, RESPECTIVELY, AND WAS ACCOUNTED FOR AS A 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.

OTHER EXPENSE, NET

OTHER EXPENSE, NET, DECREASED BY PS.3,852.9 MILLION TO PS.693.7 MILLION IN THE THIRD-QUARTER 2015, FROM PS.4,546.6 MILLION IN THE THIRD-QUARTER 2014. THIS DECREASE REFLECTED PRIMARILY THE ABSENCE OF A PS.4,168.5 MILLION NON-CASH LOSS ON DISPOSITION OF OUR FORMER 50% JOINT VENTURE INVESTMENT IN THE IUSACELL TELECOM BUSINESS IN THE THIRD-QUARTER 2014, WHICH WAS PARTIALLY OFFSET BY A HIGHER EXPENSE RELATED TO FINANCIAL ADVISORY AND PROFESSIONAL SERVICES, A NON-RECURRENT SEVERANCE EXPENSE IN CONNECTION WITH DISMISSALS OF PERSONNEL IN OUR CONTENT, TELECOMMUNICATIONS AND OTHER BUSINESSES SEGMENTS, AND A HIGHER LOSS ON DISPOSITION OF PROPERTY AND EQUIPMENT.

OTHER EXPENSE, NET, FOR THE THIRD-QUARTER 2015 INCLUDED PRIMARILY EXPENSE RELATED TO FINANCIAL ADVISORY AND PROFESSIONAL SERVICES, A NON-RECURRENT SEVERANCE EXPENSE IN CONNECTION WITH DISMISSALS OF PERSONNEL, LOSS ON DISPOSITION OF PROPERTY AND EQUIPMENT, AND DONATIONS.

 

NON-OPERATING RESULTS

FINANCE INCOME OR EXPENSE, NET

THE FOLLOWING INFORMATION SETS FORTH THE FINANCE INCOME (EXPENSE), NET, STATED IN MILLIONS OF MEXICAN PESOS FOR THE QUARTERS ENDED SEPTEMBER 30, 2015 AND 2014:

FINANCE INCOME OR EXPENSE, NET, CHANGED BY PS.5,883.1 MILLION TO A FINANCE INCOME, NET, OF PS.5,445.9 MILLION IN THE THIRD-QUARTER 2015 FROM A FINANCE EXPENSE, NET, OF PS.437.2 MILLION IN THE THIRD-QUARTER 2014. THIS FAVORABLE CHANGE REFLECTED A PS.6,402.2 MILLION INCREASE IN OTHER FINANCE INCOME, NET, TO PS.7,289.6 MILLION IN THE THIRD-QUARTER 2015 COMPARED WITH PS.887.4 MILLION IN THE THIRD-QUARTER 2014, RESULTING PRIMARILY FROM (I) OUR CONVERSION IN JULY 2015 OF DEBENTURES ISSUED BY UNIVISION HOLDINGS, INC. OR "UHI" (FORMERLY, BROADCASTING MEDIA PARTNERS, INC.), THE CONTROLLING COMPANY OF UNIVISION COMMUNICATIONS INC. ("UNIVISION"), INTO WARRANTS THAT ARE EXERCISABLE FOR UHI'S COMMON STOCK, WHICH INCLUDED, AS A CONSIDERATION FOR SUCH CONVERSION, A CASH AMOUNT OF US$135.1 MILLION (PS.2,195.0 MILLION) RECEIVED FROM UHI; AND (II) A PS.4,718.2 MILLION RECLASSIFICATION FROM ACCUMULATED OTHER COMPREHENSIVE INCOME IN CONSOLIDATED EQUITY IN CONNECTION WITH A CUMULATIVE GAIN RELATED TO CHANGES IN FAIR VALUE OF SUCH DEBENTURES, WHICH EFFECT WAS PARTIALLY OFFSET BY THE ABSENCE OF A FAVORABLE CHANGE IN FAIR VALUE IN THE THIRD-QUARTER 2014 OF THE EMBEDDED DERIVATIVE RELATED TO OUR OPTION TO CONVERT OUR FORMER DEBENTURES IN SHARES OF CAPITAL STOCK OF UHI. THE FAVORABLE VARIANCE IN OTHER FINANCE INCOME, NET, WAS PARTIALLY OFFSET BY (I) A PS.136.0 MILLION INCREASE IN INTEREST EXPENSE TO PS.1,557.4 MILLION IN THE THIRD-QUARTER 2015 COMPARED WITH PS.1,421.4 MILLION IN THE THIRD-QUARTER 2014, DUE PRIMARILY TO A HIGHER AVERAGE PRINCIPAL AMOUNT OF DEBT AND FINANCE LEASE OBLIGATIONS IN THE THIRD-QUARTER 2015; (II) A PS.199.5 MILLION DECREASE IN INTEREST INCOME TO PS.130.5 MILLION IN THE THIRD-QUARTER 2015 COMPARED WITH PS.330.0 MILLION IN THE THIRD-QUARTER 2014, EXPLAINED PRIMARILY BY THE ABSENCE OF INTEREST INCOME FROM OUR FORMER INVESTMENTS IN CONVERTIBLE DEBENTURES, AS WELL AS A REDUCTION IN APPLICABLE INTEREST RATES; AND (III) A PS.183.6 MILLION INCREASE IN FOREIGN EXCHANGE LOSS TO PS.416.8 MILLION IN THE THIRD-QUARTER 2015 COMPARED WITH PS.233.2 MILLION IN THE THIRD-QUARTER 2014, RESULTING PRIMARILY FROM THE EFFECT OF A 7.9% DEPRECIATION OF THE MEXICAN PESO AGAINST THE U.S. DOLLAR ON OUR AVERAGE NET US DOLLAR LIABILITY POSITION IN THE THIRD-QUARTER 2015 COMPARED WITH A 3.2% DEPRECIATION ON A HIGHER US DOLLAR LIABILITY POSITION IN THE THIRD-QUARTER 2014.

SHARE OF INCOME OR LOSS OF JOINT VENTURES AND ASSOCIATES, NET

SHARE OF INCOME OR LOSS OF JOINT VENTURES AND ASSOCIATES, NET, CHANGED BY PS.135.5 MILLION TO A SHARE OF LOSS OF PS.19.1 MILLION IN THE THIRD-QUARTER 2015 FROM A SHARE OF INCOME OF PS.116.4 MILLION IN THE THIRD-QUARTER 2014. THIS UNFAVORABLE CHANGE REFLECTED MAINLY A LOWER SHARE OF INCOME OF UHI, THE CONTROLLING COMPANY OF UNIVISION.

 

INCOME TAXES

INCOME TAXES INCREASED BY PS.3,187.0 MILLION TO PS.3,252.9 MILLION IN THE THIRD-QUARTER 2015 COMPARED WITH PS.65.9 MILLION IN THE THIRD-QUARTER 2014. THIS INCREASE REFLECTED PRIMARILY A HIGHER TAX BASE.

NET INCOME ATTRIBUTABLE TO NON-CONTROLLING INTERESTS

NET INCOME ATTRIBUTABLE TO NON-CONTROLLING INTERESTS DECREASED BY PS.114.8 MILLION, OR 32.4%, TO PS.239.9 MILLION IN THE THIRD-QUARTER 2015, COMPARED WITH PS.354.7 MILLION IN THE THIRD-QUARTER 2014. THIS DECREASE REFLECTED PRIMARILY A LOWER PORTION OF NET INCOME ATTRIBUTABLE TO NON-CONTROLLING INTERESTS IN OUR SKY AND TELECOMMUNICATIONS SEGMENTS.

OTHER RELEVANT INFORMATION

CAPITAL EXPENDITURES AND INVESTMENTS

DURING THE THIRD-QUARTER 2015, WE INVESTED APPROXIMATELY US$378.0 MILLION IN PROPERTY, PLANT AND EQUIPMENT AS CAPITAL EXPENDITURES, INCLUDING APPROXIMATELY US$235.2 MILLION FOR OUR TELECOMMUNICATIONS SEGMENT, US$89.5 MILLION FOR OUR SKY SEGMENT, AND US$53.3 MILLION FOR OUR CONTENT AND OTHER BUSINESSES SEGMENTS.

IN JULY 2015, WE EXERCISED A PORTION OF OUR INVESTMENT IN WARRANTS ISSUED BY UHI FOR A NUMBER OF SHARES OF COMMON STOCK OF UHI, AND INCREASED OUR EQUITY STAKE IN THIS ASSOCIATE FROM 7.8% TO 10%. THIS NON-CASH TRANSACTION AMOUNTED TO US$107.4 MILLION (PS.1,695.5 MILLION).

DEBT AND FINANCE LEASE OBLIGATIONS

THE FOLLOWING INFORMATION SETS FORTH OUR TOTAL CONSOLIDATED DEBT AND FINANCE LEASE OBLIGATIONS AS OF SEPTEMBER 30, 2015 AND DECEMBER 31, 2014. AMOUNTS ARE STATED IN MILLIONS OF MEXICAN PESOS:

THE TOTAL CONSOLIDATED DEBT AMOUNTED TO PS.88,818.9 MILLION AND PS.80,997.6 MILLION AS OF SEPTEMBER 30, 2015 AND DECEMBER 31, 2014, RESPECTIVELY, WHICH INCLUDED A CURRENT PORTION  OF LONG-TERM DEBT IN THE AMOUNT OF PS.2,978.3 MILLION AND PS.337.1 MILLION, RESPECTIVELY. AS OF SEPTEMBER 30, 2015 AND DECEMBER 31, 2014, TOTAL DEBT IS PRESENTED NET OF FINANCE COSTS IN THE AMOUNT OF PS.1,216.8 MILLION AND PS.1,268.8 MILLION, RESPECTIVELY, AND DOES NOT INCLUDE RELATED ACCRUED INTEREST PAYABLE IN THE AMOUNT OF PS.1,345.9 MILLION AND PS.974.9 MILLION, RESPECTIVELY.

ADDITIONALLY, WE HAD FINANCE LEASE OBLIGATIONS IN THE AMOUNT OF PS.5,830.4 MILLION AND PS.5,309.6 MILLION AS OF SEPTEMBER 30, 2015 AND DECEMBER 31, 2014, RESPECTIVELY, WHICH INCLUDED A CURRENT PORTION OF PS.504.0 MILLION AND PS.502.2 MILLION, RESPECTIVELY.

AS OF SEPTEMBER 30, 2015, OUR CONSOLIDATED NET DEBT POSITION (TOTAL DEBT LESS CASH AND CASH EQUIVALENTS, TEMPORARY INVESTMENTS, AND NON-CURRENT HELD-TO-MATURITY AND AVAILABLE-FOR-SALE INVESTMENTS) WAS PS.47,727.7 MILLION. THE AGGREGATE AMOUNT OF NON-CURRENT HELD-TO-MATURITY AND AVAILABLE-FOR-SALE INVESTMENTS AS OF SEPTEMBER 30, 2015, AMOUNTED TO PS.6,170.3 MILLION.

SHARES OUTSTANDING

AS OF SEPTEMBER 30, 2015 AND DECEMBER 31, 2014, OUR SHARES OUTSTANDING AMOUNTED TO 338,461.8 MILLION AND 338,056.2 MILLION SHARES, RESPECTIVELY, AND OUR CPO EQUIVALENTS OUTSTANDING AMOUNTED TO 2,892.8 MILLION AND 2,889.4 MILLION CPO EQUIVALENTS, RESPECTIVELY. NOT ALL OF OUR SHARES ARE IN THE FORM OF CPOS. THE NUMBER OF CPO EQUIVALENTS IS CALCULATED BY DIVIDING THE NUMBER OF SHARES OUTSTANDING BY 117.

AS OF SEPTEMBER 30, 2015 AND DECEMBER 31, 2014, THE GDS (GLOBAL DEPOSITARY SHARES) EQUIVALENTS OUTSTANDING AMOUNTED TO 578.6 MILLION AND 577.9 MILLION GDS EQUIVALENTS, RESPECTIVELY. THE NUMBER OF GDS EQUIVALENTS IS CALCULATED BY DIVIDING THE NUMBER OF CPO EQUIVALENTS BY FIVE.

IFT RULING

ON SEPTEMBER 30, 2015, THE FEDERAL TELECOMMUNICATIONS INSTITUTE RESOLVED, WITHIN THE INVESTIGATION OF TRANSITORY PROVISION 39 OF THE FEDERAL TELECOMMUNICATIONS LAW, THAT THERE ARE NO ELEMENTS AS TO THE EXISTENCE OF AN ECONOMIC AGENT WITH SIGNIFICANT MARKET POWER IN THE MARKET OF RESTRICTED AUDIO AND VIDEO IN MEXICO (PAY TV).

ABOUT TELEVISA

TELEVISA IS THE LARGEST MEDIA COMPANY IN THE SPANISH-SPEAKING WORLD BASED ON ITS MARKET CAPITALIZATION AND A MAJOR PARTICIPANT IN THE INTERNATIONAL ENTERTAINMENT BUSINESS. IT OPERATES FOUR BROADCAST CHANNELS IN MEXICO CITY, PRODUCES AND DISTRIBUTES 25 PAY-TV BRANDS FOR DISTRIBUTION IN MEXICO AND THE REST OF THE WORLD, AND EXPORTS ITS PROGRAMS AND FORMATS TO THE U.S. THROUGH UNIVISION COMMUNICATIONS INC. ("UNIVISION") AND TO OTHER TELEVISION NETWORKS IN OVER 50 COUNTRIES. TELEVISA IS ALSO AN ACTIVE PARTICIPANT IN MEXICO'S TELECOMMUNICATIONS INDUSTRY. IT HAS A MAJORITY INTEREST IN SKY, A LEADING DIRECT-TO-HOME SATELLITE TELEVISION SYSTEM OPERATING IN MEXICO, THE DOMINICAN REPUBLIC AND CENTRAL AMERICA. TELEVISA ALSO PARTICIPATES IN MEXICO'S TELECOMMUNICATIONS INDUSTRY IN MANY REGIONS OF THE COUNTRY WHERE IT OFFERS VIDEO, VOICE AND BROADBAND SERVICES. TELEVISA ALSO HAS INTERESTS IN MAGAZINE PUBLISHING AND DISTRIBUTION, RADIO PRODUCTION AND BROADCASTING, PROFESSIONAL SPORTS AND LIVE ENTERTAINMENT, FEATURE-FILM PRODUCTION AND DISTRIBUTION, THE OPERATION OF A HORIZONTAL INTERNET PORTAL AND GAMING. IN THE UNITED STATES, TELEVISA HAS EQUITY AND WARRANTS WHICH UPON ITS EXERCISE AND SUBJECT TO ANY NECESSARY APPROVAL FROM THE FEDERAL COMMUNICATIONS COMMISSION ("FCC") IN THE UNITED STATES, WOULD REPRESENT APPROXIMATELY 36% ON A FULLY DILUTED, AS-CONVERTED BASIS OF THE EQUITY CAPITAL IN UNIVISION HOLDINGS INC. (F/K/A BROADCASTING MEDIA PARTNERS, INC.), THE CONTROLLING COMPANY OF UNIVISION, THE LEADING MEDIA COMPANY SERVING THE UNITED STATES HISPANIC MARKET.

DISCLAIMER

THIS ANNEX CONTAINS FORWARD-LOOKING STATEMENTS REGARDING THE COMPANY'S RESULTS AND PROSPECTS. ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THESE STATEMENTS. THE FORWARD-LOOKING STATEMENTS IN THIS ANNEX SHOULD BE READ IN CONJUNCTION WITH THE FACTORS DESCRIBED IN "ITEM 3. KEY INFORMATION – FORWARD-LOOKING STATEMENTS" IN THE COMPANY'S ANNUAL REPORT ON FORM 20-F, WHICH, AMONG OTHERS, COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE CONTAINED IN FORWARD-LOOKING STATEMENTS MADE IN THIS ANNEX AND IN ORAL STATEMENTS MADE BY AUTHORIZED OFFICERS OF THE COMPANY. READERS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD-LOOKING STATEMENTS, WHICH SPEAK ONLY AS OF THEIR DATES. THE COMPANY UNDERTAKES NO OBLIGATION TO PUBLICLY UPDATE OR REVISE ANY FORWARD-LOOKING STATEMENTS, WHETHER AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE.

THE FINANCIAL INSTITUTIONS THAT PERFORM FINANCIAL ANALYSIS ON THE SECURITIES OF GRUPO TELEVISA, S.A.B. ARE AS FOLLOWS:

INSTITUTION:

   BARCLAYS

   BBVA BANCOMER

   BTG PACTUAL

   CITI

   CREDIT SUISSE

   GABELLI & CO.

   GBM CASA DE BOLSA

   GOLDMAN SACHS

   HSBC

   INVEX

   ITAÚ SECURITIES

   JPMORGAN

   MAXIM GROUP

   MERRILL LYNCH

   MORGAN STANLEY

   NEW STREET

   SANTANDER

   SCOTIABANK

   UBS

---

GRUPO TELEVISA, S.A.B. AND SUBSIDIARIES

Notes to Unaudited Condensed Consolidated Financial Statements

For the nine months ended September 30, 2015 and 2014

(In thousands of Mexican Pesos, except per CPO, per share, par value and exchange rate amounts)

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") 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 Avenida Vasco de Quiroga 2000, Colonia Santa Fe, 01210 México, D. F.

Grupo Televisa, S.A.B. together with its subsidiaries (collectively, the "Group") is the largest media company in the Spanish-speaking world based on its market capitalization and a major participant in the international entertainment business. It operates four broadcast channels in Mexico City, produces and distributes 25 pay-TV brands for distribution in Mexico and the rest of the world, and exports its programs and formats to the United States through Univision Communications Inc. ("Univision") and to other television networks in over 50 countries. It has a majority interest in Sky, a leading direct-to-home satellite television system operating in Mexico, the Dominican Republic and Central America. The Group also participates in Mexico's telecommunications industry in many regions of the country where it offers video, voice and broadband services. The Group also has interests in magazine publishing and distribution, radio production and broadcasting, professional sports and live entertainment, feature-film production and distribution, the operation of a horizontal Internet portal, and gaming. In the United States, the Group has equity and warrants which upon its exercise and subject to any necessary approval from the Federal Communications Commission in the United States, would represent approximately 36% on a fully diluted basis of the equity capital in Univision Holdings, Inc. or "UHI" (formerly, Broadcasting Media Partners, Inc. or "BMP"), the controlling company of Univision, the leading media company serving the United States Hispanic market.

2.	Basis of Preparation and Accounting Policies

These condensed consolidated financial statements of the Group, as of September 30, 2015 and December 31, 2014, and for the nine months ended September 30, 2015 and 2014, are unaudited, and have been prepared in accordance with the guidelines provided by the International Accounting Standard 34, Interim Financial Reporting. In the opinion of management, all adjustments necessary for a fair presentation of the condensed consolidated financial statements have been included herein.

These unaudited condensed consolidated financial statements should be read in conjunction with the Group's audited consolidated financial statements and notes thereto for the years ended December 31, 2014 and 2013, which have been prepared in accordance with International Financial Reporting Standards ("IFRSs") as issued by the International Accounting Standards Board, and include, among other disclosures, the Group's most significant accounting policies, which were applied on a consistent basis as of September 30, 2015.

These interim unaudited condensed consolidated financial statements were authorized for issuance on October 19, 2015, by the Group's Chief Financial Officer.

 

3.	Acquisition, Investments and Disposition

In January 2015, the Group acquired, through a series of transactions, the net assets of Cablevisión Red, S.A. de C.V. and other related companies (collectively, "Telecable") for an aggregate consideration of Ps.10,001,838. Telecable is a telecommunications business that provides video, data and telephone services primarily in six states of Mexico. In connection with this acquisition, the Group recognized an excess of purchase price over the carrying value of the acquired net assets of Telecable in the aggregate amount of Ps.8,774,852, which consisted primarily of intangible assets and additional liabilities, based on a preliminary purchase price allocation at the acquisition date. The Group expects to complete a final purchase price allocation of this transaction in the last quarter of 2015. The Group began to consolidate the net assets and results of operations of Telecable beginning in the first quarter of 2015. Through the acquisition of Telecable, the Group continues with its strategy to establish a telecommunications company with national coverage that delivers more and better services through state of the art technology and internationally competitive prices for the benefit of end users. The following table summarizes a preliminary allocation of the purchase price to the tangible and identifiable intangible assets acquired and liabilities assumed at the acquisition date. The excess of the purchase price over those estimated fair values and the deferred income tax liability related to certain intangible assets was allocated to goodwill.

		Acquisition in January 2015
Cash and cash equivalents		Ps.	270,447
Trade and other receivables			57,687
Other current assets			34,118
Total current assets			362,252
Property, plant and equipment, net			2,010,892
Goodwill			5,023,651
Concessions			3,868,266
List of subscribers			1,233,808
Trademarks			218,578
Other intangible assets			37,903
Other non-current assets			6,594
Total assets			12,761,944
Short-term debt			505,425
Trade and other payables			135,920
Other current liabilities			78,754
Total current liabilities			720,099
Deferred income tax liability			2,031,409
Other non-current liabilities			8,598
Total non-current liabilities			2,040,007
Total liabilities			2,760,106
Total net assets		Ps.	10,001,838

 

In January 2015, the Group received proceeds in the aggregate amount of U.S.$717 million (Ps.10,632,393) in connection with the disposal in 2014 of its investment in GSF Telecom Holdings, S.A.P.I. de C.V. ("GSF"), of which U.S.$697 million were in cash and U.S.$20 million were held in escrow for certain contingent litigation costs. As of September 30, 2015, the amount held in escrow was U.S.$14 million (Ps.237,605).

In July 2015, the Group converted its investment in U.S.$1,125 million principal amount of Debentures issued by UHI (formerly,  BMP) into an investment in Warrants that are exercisable for new classes of UHI's common stock. As a result of this transaction, the Group (i) received from UHI a cash amount of US$135.1 million (Ps.2,194,981) as a consideration for such conversion, which was accounted for as other finance income in the consolidated statement of income for the nine months ended September 30, 2015; and (ii) reclassified a Ps.4,718,175 cumulative gain related to changes in fair value of such Debentures from accumulated other comprehensive income in consolidated equity to other finance income in the consolidated statement of income for the nine months ended September 30, 2015. In July 2015, the Group exercised a portion of these Warrants to increase its equity stake in UHI from 7.8% to 10% (see Notes 4 and 5).

In July 2015, the Company made an additional capital contribution in Imagina Media Audiovisual, S.L. (together with its subsidiaries, "Imagina") in the aggregate cash amount of €19.2 million (Ps.341,710) in connection with a reorganization of stockholders of this investee, by which the Company increased its equity stake in Imagina from 14.5% to 19.9% (see Notes 4 and 5).

 

 

At September 30, 2015 and December 31, 2014, the Group had the following investments in financial instruments:

 

		September 30, 2015				December 31, 2014
Available-for-sale financial assets:
Convertible Debentures due 2025 issued by UHI (1)		Ps.	-			Ps.	10,421,478
Embedded derivative in Convertible Debentures issued by UHI (1)			-				17,447,857
Shares of common stock of Imagina (2)			-				836,037
Available-for-sale investments (3)			5,822,947				5,511,768
			5,822,947				34,217,140
Warrants issued by UHI (1)			31,271,573				-
Held-to-maturity investments (4)			347,399				461,047
Other			31,685				31,685
		Ps.	37,473,604			Ps.	34,709,872

 

(1)

Through July 2015, the Group held an investment in Convertible Debentures due 2025 issued by UHI in the principal amount of U.S.$1,125 million (Ps.17,634,375), with an annual interest rate of 1.5% receivable on a quarterly basis, which were convertible at the Company's option into additional shares equivalent to approximately 30% equity stake of UHI, subject to existing laws and regulations in the United States, and other conditions. These Convertible Debentures were classified as available-for-sale financial assets with changes in fair value recognized in other comprehensive income or loss in consolidated equity. The Group's option of converting these debentures into an equity stake of UHI was accounted for as an embedded derivative with changes in fair value recognized in consolidated income. In July 2015, the Group converted its investment in these Debentures into an investment in Warrants that are exercisable for new classes of UHI's common stock. The fair value of these Warrants at the date of conversion was U.S.$1,951 million (Ps.30,582,427). In July 2015, the Group exercised a portion of these Warrants in the amount of U.S$107.4 million (Ps.1,695,524) to increase its equity stake in UHI from 7.8% to 10% (see Notes 3 and 5).

(2)

Through June 2015, the Company's investment in common stock of Imagina was accounted for as an available-for-sale equity financial asset with changes in fair value recognized in consolidated other comprehensive income or loss. In July 2015, the Company made an additional capital contribution and increased its equity stake in Imagina from 14.5% to 19.9%. As a result of this transaction, beginning in the third quarter of 2015, the Company classified the carrying value of this investee as an investment in associate and began to recognize its share in income or loss of Imagina (see Notes 3 and 5).

(3)

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 and transactions 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 and subtracting all of the fund liabilities and dividing the result by the total number of issued shares.

(4)

Held-to-maturity investments represent corporate fixed income securities with long-term maturities. These investments are stated at amortized cost. Maturities of these investments subsequent to September 30, 2015, are as follows: Ps.228,094 in 2016, Ps.59,255 in 2017 and Ps.60,050 thereafter. Held-to-maturity financial assets as of September 30, 2015 and December 31, 2014 are denominated primarily in Mexican pesos.

A roll forward of available-for-sale financial assets for the nine months ended September 30, 2015, is presented as follows:

The maximum exposure to credit risk of the investments in financial instruments as of September 30, 2015 is the carrying value of the financial assets mentioned above.

5.	Investments in Joint Ventures and Associates

At September 30, 2015 and December 31, 2014, the Group had the following investments in joint ventures and associates accounted for by the equity method:

(1)

A subsidiary of the Company entered into a long-term credit facility agreement to provide financing to GTAC for up to Ps.688,217, with an annual interest rate of the Mexican Interbank Interest Rate ("Tasa de Interés Interbancaria de Equilibrio" or "TIIE") plus 200 basis points. Under the terms of this agreement, principal and interest are payable at dates agreed by the parties, between 2013 and 2021. As of September 30, 2015, GTAC had used a principal amount of Ps.628,683, under this credit facility. During 2015, GTAC paid principal and interest to the Group in connection with this credit facility in the aggregate amount of Ps.99,018. Also, a subsidiary of the Company entered into supplementary long-term loans to provide additional financing to GTAC for an aggregate principal amount of Ps.246,019, with an annual interest of TIIE plus 200 basis points payable on a monthly basis and principal maturities through 2023, 2024 and 2025. The net investment in GTAC as of September 30, 2015 and December 31, 2014, include amounts receivable in connection with this long-term credit facility and supplementary loans to GTAC in the aggregate amount of Ps.641,684 and Ps.677,315, respectively.

(2)

The Group accounts for its investment in common stock of UHI, the parent company of Univision, under the equity method due to the Group's ability to exercise significant influence over UHI's operations. The Group has determined it has the ability to exercise significant influence over the operating and financial policies of UHI because as of September 30, 2015 , the Group (i) owned 1,110,382 Class C shares of common stock of UHI, representing 10% of the outstanding total shares of UHI as of that date; (ii) held Warrants exercisable for new classes of common stock of UHI  equivalent to approximately 26% equity stake of UHI on a fully diluted basis, subject to certain conditions, laws and regulations; (iii)  had three of 17 current members of the Board of Directors of UHI; and (iv) held program license agreements, as amended, with Univision, an indirect wholly-owned subsidiary of UHI, pursuant to which Univision has the right to broadcast certain Televisa content in the United States ("Program License Agreement"), and the Group has the right to broadcast certain Univision's content in Mexico ("Mexican License Agreement"), through the later of 2025 (2030 upon consummation of a proposed public offering of shares of UHI) or seven and one-half years after the Group has sold two-thirds of its initial investment in UHI made in December 2010.

(3)	OCEN is a majority-owned subsidiary of Corporación Interamericana de Entretenimiento, S.A.B. de C.V., and is engaged in the live entertainment business in Mexico. The investment in OCEN includes a goodwill of Ps.359,613 as of September 30, 2015 and December 31, 2014.

6.	Property, Plant and Equipment, Net

Property, plant and equipment as of September 30, 2015 and December 31, 2014, consisted of:

Depreciation charged to income for the nine months ended September 30, 2015 and 2014 was Ps.8,957,191 and Ps.7,326,591, respectively.

During the nine months ended September 30, 2015, the Group invested Ps.16,518,042 in property plant and equipment as capital expenditures.

 

7.	Intangible Assets, Net

The balances of intangible assets as of September 30, 2015 and December 31, 2014, were as follows:

Amortization charged to income for the nine months ended September 30, 2015 and 2014 was Ps.1,782,632 and Ps.854,706, respectively.

In the third quarter of 2015, the Company's management revised the useful life of trademarks to determine whether events and circumstances continue to support an indefinite useful life for such intangible assets. As a result of such review, the Company's management has identified certain businesses in its Telecommunications segment that are migrating from a current trademark to an internally developed trademark between 2015 and 2016, in connection with enhanced telecommunications service packages offered to current and new subscribers, and has estimated that this migration process will take approximately four years. Accordingly, beginning in the third quarter of 2015, the Group changed the useful life assessment from indefinite to finite for certain acquired trademarks in its Telecommunications segment, and began to amortize the related carrying value of those trademarks when the migration is started in an estimated useful life of four years.

 

8.	Debt and Finance Lease Obligations

Debt and finance lease obligations outstanding as of September 30, 2015 and December 31, 2014, were as follows:

(1)

These Senior Notes 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 on the Senior Notes due 2018, 2025, 2032, 2037, 2040, 2043 and 2045, including additional amounts payable in respect of certain Mexican withholding taxes, is 6.31%, 6.97%, 8.94%, 8.93%, 6.97%, 7.62% and 5.26% 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, as a whole but not 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 2018, 2025, 2037, 2040 and 2043, 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 agreement of these Senior Notes contains covenants that limit the ability of the Company and certain restricted subsidiaries engaged in the Group's content segment, to incur or assume liens, perform sale and leaseback transactions, and consummate certain mergers, consolidations and similar transactions. The Senior Notes due 2018, 2025, 2032, 2037, 2040 and 2045 are registered with the U.S. Securities and Exchange Commission ("SEC"). The Senior Notes due 2043 are registered with both the U.S. SEC and the Mexican Banking and Securities Commission ("Comisión Nacional Bancaria y de Valores" or "CNBV").

(2)

Interest on these Notes ("Certificados Bursátiles") is payable semi-annually for Notes due 2020 and every 28 days for Notes due 2021 and 2022. The Company may, at its own option, redeem the Notes due 2020, 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 company may, at its own option, redeem the Notes due 2021 and 2022, in whole or in part, at any date at a redemption price equal to the greater of the principal amount of the outstanding notes and an average price calculated from prices to be provided at the redemption date by two Mexican financial pricing companies. The agreement of these Notes contains covenants that limit the ability of the Company and certain restricted subsidiaries appointed by the Company's board of directors, and engaged in the Group's content segment, to incur or assume liens, perform sale and leaseback transactions, and consummate certain mergers, consolidations and similar transactions.

(3)

Total debt is presented net of unamortized finance costs as of September 30, 2015 and December 31, 2014, in the aggregate amount of Ps.1,216,776 and Ps.1,268,856, respectively, and includes interest payable in the aggregate amount of Ps.1,345,957 and Ps.974,904 as of September 30, 2015 and December 31, 2014, respectively.

In January 2015, the Group prepaid the principal amount and related accrued interest of a peso-denominated long-term bank loan previously entered into by Telecable, the telecommunications company acquired by the Group in January 2015, in the aggregate amount of Ps.507,362. This prepayment was funded primarily with cash provided by a long-term bank loan arranged by the Company with a Mexican bank in the principal amount of Ps.500,000, with a maturity in 2016, and annual interest of the 28-day interbank equilibrium interest rate ("Tasa de Interés Interbancaria de Equilibrio" or "TIIE") plus a range between 0 and 80 basis points.

In May 2015, the Company concluded an offering of Ps.5,000,000 aggregate principal amount of local bonds ("Certificados Bursátiles") due 2022 with an annual interest rate of the 28-day TIIE plus 35 basis points, which was registered with the CNBV.

During the first half of 2015, TVI refinanced an outstanding long-term loan in the principal amount of Ps.722,020, with an original maturity in 2016, and incurred additional long-term debt in the aggregate principal amount of Ps.750,000. The refinanced and additional long-term debt of TVI matures in 2019 (Ps.250,000), 2020 (Ps.250,000) and 2022 (Ps.972,020) with an annual interest rate of the 28-day TIIE plus a range between 130 and 140 basis points, which is payable on a monthly basis.

In June 2015, the Company and Sky prepaid peso-denominated long-term bank loans in the aggregate principal amount of Ps.1,600,000 and Ps.3,500,000, respectively, with original principal maturities between 2016 and 2021. The aggregate amount paid by the Company and Sky amounted to Ps.1,814,312 and Ps.3,651,712, respectively, which included related accrued interest, the settlement of a related derivative contract, and fees. The prepayment of Sky was funded primarily by a long-term loan made by the Company in the principal amount of Ps.3,500,000, with a maturity in 2022, and an annual interest rate of 7.38%, which is payable on a monthly basis.

 

9.	Financial Instruments

 

The Group's financial instruments presented in the condensed consolidated statements of financial position included cash and cash equivalents; temporary investments; accounts and notes receivable; a long-term loan receivable from GTAC; Convertible Debentures issued by UHI with an option to convert these debentures into common stock of UHI, which were converted in July 2015 into Warrants that are exercisable for UHI's common stock; debt securities classified as held-to-maturity investments; investments in securities in the form of an open-ended fund classified as available-for-sale investments; accounts payable; debt; and derivative financial instruments. For cash and cash equivalents, temporary investments, accounts receivable, accounts payable, and short-term notes payable due to banks and other financial institutions, 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 are based on quoted market prices.

The fair value of the long-term loans that the Group borrowed from leading Mexican banks (see Note 8) 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 held-to-maturity securities, available-for-sale investments, and currency option and interest rate swap agreements were determined by using valuation techniques that maximize the use of observable market data.

The carrying and estimated fair values of the Group's non-derivative financial instruments as of September 30, 2015 and December 31, 2014, were as follows:

The carrying values (based on estimated fair values), notional amounts, and maturity dates of the Group's derivative financial instruments as of September 30, 2015 and December 31, 2014, were as follows:

September 30, 2015:
Derivative Financial Instruments		Carrying Value				Notional Amount (U.S. Dollars in Thousands)			Maturity Date
Assets:
Derivatives not recorded as accounting hedges:
Options		Ps.	626			Ps.	U.S.15,000		November 2015
Total assets		Ps.	626
Liabilities:
Derivatives not recorded as accounting hedges:
TVI's interest rate swap			10,545			Ps.	2,068,787		February 2016 and May 2022
Derivatives recorded as accounting hedges (cash flow hedges):
Interest rate swap			133,040			Ps.	2,500,000		March 2018
Interest rate swap			110,591			Ps.	6,000,000		April 2021
Interest rate swap			4,732			Ps.	1,000,000		May 2022
Total liabilities		Ps.	258,908
December 31, 2014:
Derivative Financial Instruments		Carrying Value				Notional Amount (U.S. Dollars in Thousands)			Maturity Date
Assets:
Derivatives not recorded as accounting hedges:
Options		Ps.	2,894			Ps.	U.S.135,000		November 2015
Total assets		Ps.	2,894
Liabilities:
Derivatives not recorded as accounting hedges:
Sky's interest rate swap		Ps.	79,939			Ps.	1,400,000		April 2016
TVI's interest rate swap			10,376			Ps.	1,567,607		February 2016 and July 2019
Derivatives recorded as accounting hedges (cash flow hedges):
Interest rate swap			175,025			Ps.	2,500,000		March 2018
Interest rate swap			69,762			Ps.	3,000,000		April 2021
Total liabilities		Ps.	335,102

 

10.	Capital Stock, Stock Purchase Plan and Long-term Retention Plan

At September 30, 2015, shares of capital stock and CPOs consisted of (in millions):

(1)	As of September 30, 2015, the authorized and issued capital stock amounted to Ps.4,978,126 (nominal Ps.2,494,410).

(2)	In connection with the Company's Stock Purchase Plan and Long-Term Retention Plan.

A reconciliation of the number of shares and CPOs outstanding for the nine months ended September 30, 2015 and 2014, is presented as follows (in millions):

 

	Series "A" Shares	Series "B" Shares	Series "D" Shares	Series "L" Shares	Shares Outstanding	CPOs Outstanding
As of January 1, 2015	115,036.5	53,330.9	84,844.4	84,844.4	338,056.2	2,424.1
Acquired by a Company's trust	(518.7)	(456.5)	(726.1)	(726.1)	(2,427.4)	(20.7)
Released by the stock plan	889.8	464.7	739.3	739.3	2,833.1	21.1
As of September 30, 2015	115,407.6	53,339.1	84,857.6	84,857.6	338,461.9	2,424.5
	Series "A" Shares	Series "B" Shares	Series "D" Shares	Series "L" Shares	Shares Outstanding	CPOs Outstanding
As of January 1, 2014	114,197.5	52,920.5	84,191.5	84,191.5	335,501.0	2,405.5
Acquired by a Company's trust	(3.4)	(3.0)	(4.7)	(4.7)	(15.8)	(0.1)
Repurchased by the Company	-		-	-	-	-
Released by the stock plan	910.1	473.0	752.5	752.5	2,888.1	21.5
As of September 30, 2014	115,104.2	53,390.5	84,939.3	84,939.3	338,373.3	2,426.9