Business Context and Reporting Period
This Form 6-K filing by AMÉRICA MÓVIL, S.A.B. DE C.V. (AMX) is dated June 30, 2017. The document serves as a formal notice to shareholders regarding a cash and stock dividend distribution. The filing does not contain operational results, revenue, or profit metrics for the period ending June 30, 2017, as it is a corporate action notice rather than a financial results report.
Key Financial Metrics and Capital Structure
The filing details the following specific financial and capital data:
- Dividend Amount: Ps.0.15 (fifteen cents of one Mexican peso) per Series AA, Series A, and Series L share.
- Record Date: July 11, 2017.
- Payment Date: July 17, 2017.
- Outstanding Shares (as of May 31, 2017): 65,760,350,000 total shares.
- Treasury Shares Available: 29,728,438,125 Series L shares held by the Company, available for distribution as stock dividends.
- Maximum Potential Series L Distribution: Approximately 662,016,946 shares (assuming 100% election for stock and a reference price of Ps.14.90).
- Source of Funds: Net earnings account as of December 31, 2013.
Material Changes and Shareholder Options
Shareholders are offered a unique election mechanism for this dividend:
- Payment Options: Shareholders may elect to receive the dividend in (i) cash, (ii) Series L shares (currently held as treasury stock), or (iii) a combination of both.
- Default Outcome: Shareholders who fail to submit an election notice by 5:00 p.m. Mexico City time on July 13, 2017, will receive the dividend in cash only.
- Calculation Method: The number of Series L shares received is calculated by dividing the total dividend value (Number of Shares × Ps.0.15) by the Reference Price (market price of Series L shares at the opening of trading on the business day preceding the Payment Date).
- Fractional Shares: Fractions of Series L shares are not issued; the fractional value is paid in cash.
Outlook, Risks, and Tax Implications
Taxation:
- Mexican Tax: Because the earnings were accrued prior to December 31, 2013, the dividend is exempt from Mexican withholding tax under Transitory Article 9-XXX of the Mexican Income Tax Law, regardless of whether the shareholder elects cash or stock.
- U.S. Tax: U.S. holders will generally recognize taxable dividend income equal to the gross amount received (in USD equivalent). Reinvestment in Series L shares is treated as a taxable distribution, with the tax basis of the new shares equal to the USD value of the dividend.
- Dilution: Shareholders electing cash may experience dilution as additional Series L shares are released into circulation.
- Forfeiture: Unclaimed dividends are forfeited to AMX after five years from the Payment Date.
- Forward-Looking Statements: The filing includes standard disclaimers that actual results may differ from estimates regarding share counts and reference prices.
Investor Verification Checklist
- Verify the Record Date (July 11, 2017) to confirm eligibility for the dividend.
- Confirm the Election Deadline (July 13, 2017, 5:00 p.m. Mexico City time) to avoid defaulting to cash-only payment.
- Review the Reference Price mechanism, as the number of stock shares received depends on the market price on July 16, 2017.
- Check with custodians regarding any fees associated with the election process or receipt of additional ADSs.
- Consult tax advisors regarding U.S. federal income tax consequences, as the dividend is taxable despite the Mexican withholding exemption.