Business Context and Reporting Period
This Form 6-K filing by América Móvil, S.A.B. de C.V. (AMX) is dated October 19, 2020. The document serves as a formal notice to shareholders regarding a cash and stock dividend distribution. The dividend is payable on November 9, 2020, with a record date of November 4, 2020. The distribution is funded from the company's net earnings account as of December 31, 2013.
Key Financial Metrics and Dividend Details
- Dividend Amount: Ps.0.19 (nineteen cents of one Mexican peso) per Series AA, Series A, and Series L share.
- Outstanding Shares: 66,435,748,659 shares as of September 30, 2020.
- Treasury Shares Available: 4,627,441,611 Series L shares held by the company, with a maximum of 847,167,264 Series L shares potentially available for distribution depending on shareholder elections and market price.
- Reference Price: Calculated based on the market price per Series L share at the opening of trading on the Mexican Stock Exchange on the business day immediately preceding the Payment Date.
- Financial Performance: The filing does not provide current revenue, profit, cash flow, margins, debt, or liquidity metrics for the 2020 period.
Material Changes and Shareholder Options
Shareholders have the option to receive the dividend in cash, Series L shares (currently held as treasury shares), or a combination of both. This is a material change in capital structure mechanics as it involves the release of treasury shares into circulation.
- Election Period: November 5, 2020, to November 6, 2020, at 4:00 p.m. (Mexico City time).
- Default Option: Shareholders who fail to submit a Notice of Election by the deadline will receive the dividend in cash only.
- Dilution: Shareholders electing cash may experience dilution as additional Series L shares are released to other shareholders.
- Capital Stock: The transaction does not increase the company's authorized capital.
Guidance, Risks, and Tax Implications
The filing contains forward-looking statements regarding the number of shares to be delivered, which depend on shareholder elections and market prices. Actual results may differ significantly from estimates.
- Taxation (Mexico): Because the earnings were accrued prior to December 31, 2013, the dividend is not subject to Mexican withholding tax for any shareholder, regardless of the election made. Reinvestment of dividends in Series L shares is deemed an automatic reinvestment and not a taxable event until capital is refunded or the company is liquidated.
- Taxation (U.S.): U.S. holders generally recognize dividend income equal to the gross amount received (in USD equivalent). The dividend is not eligible for the dividends-received deduction for corporations.
- Unclaimed Dividends: Dividends unclaimed after five years from the Payment Date will be forfeited to AMX.
Investor Verification Checklist
- Verify the Record Date (November 4, 2020) to confirm eligibility for the dividend.
- Confirm the Election Deadline (November 6, 2020, 4:00 p.m. Mexico City time) to avoid defaulting to cash-only payment.
- Check the Reference Price on the business day prior to November 9, 2020, to calculate the exact number of Series L shares if electing stock.
- Review specific instructions for ADS holders, as procedures may differ from direct share holders.
- Consult tax advisors regarding U.S. federal income tax consequences, as the filing does not constitute tax advice.