Basis of Preparation of the Consolidated Financial Statements and Summary of Significant Accounting Policies and Practices (Tables)

12 Months Ended

Dec. 31, 2017

Summary of Equity Interest in Most Significant Subsidiaries

The equity interest in the most significant subsidiaries at December 31, 2016 and 2017, is as follows:


		Equity interest at December 31
Company name	Country	2016		2017
Subsidiaries:
América Móvil B.V. ^a)	Netherlands		100.0%		100.0%
Compañía Dominicana de Teléfonos, S.A. (“Codetel”) ^b)	Dominican Republic		100.0%		100.0%
Sercotel, S.A. de C.V. ^a)	Mexico		100.0%		100.0%
Radiomóvil Dipsa, S.A. de C.V. and subsidiaries (“Telcel”) ^b)	Mexico		100.0%		100.0%
Puerto Rico Telephone Company, Inc. ^b)	Puerto Rico		100.0%		100.0%
Servicios de Comunicaciones de Honduras, S.A. de C.V. (“Sercom Honduras”) ^b)	Honduras		100.0%		100.0%
TracFone Wireless, Inc. (“TracFone”) ^b)	USA		100.0%		100.0%
Claro S.A. (Claro Brasil) ^b)	Brazil		97.7%		97.7%
Telecomunicaciones de Guatemala, S.A. (“Telgua”) ^b)	Guatemala		99.3%		99.3%
Empresa Nicaragüense de Telecomunicaciones, S.A. (“Enitel”) ^b)	Nicaragua		99.6%		99.6%
Compañía de Telecomunicaciones de El Salvador, S.A. de C.V. (“CTE”) ^b)	El Salvador		95.8%		95.8%
Comunicación Celular, S.A. (“Comcel”) ^b)	Colombia		99.4%		99.4%
Telmex Colombia, S.A. ^b)	Colombia		99.3%		99.3%
Consorcio Ecuatoriano de Telecomunicaciones, S.A. (“Conecel”) ^b)	Ecuador		100.0%		100.0%
AMX Argentina, S.A. ^b)	Argentina		100.0%		100.0%
AMX Paraguay, S.A. ^b)	Paraguay		100.0%		100.0%
AM Wireless Uruguay, S.A. ^b)	Uruguay		100.0%		100.0%
Claro Chile, S.A. ^b)	Chile		100.0%		100.0%
América Móvil Perú, S.A.C ^b)	Peru		100.0%		100.0%
Claro Panamá, S.A. ^b)	Panama		100.0%		100.0%
Teléfonos de México, S.A.B. de C.V. ^b)	Mexico		98.7%		98.8%
Telekom Austria AG ^b)	Austria		51.0%		51.0%

a)	Holding companies

b)	Operating companies of mobile and fixed services

Summary of Annual Depreciation Rates

Annual depreciation rates are as follows:


Network infrastructure		5%-33%
Buildings and leasehold improvement		2%-33%
Other assets		10%-50%

Summary of Most Significant Forward Looking Estimates Used for Impairment Evaluations

The most significant forward looking estimates used for the 2016 and 2017 impairment evaluations are shown below:


	Average margin on EBIDTA	Average margin on CAPEX	Average pre-tax discount rate (WACC)
2016:
Europe (7 countries)	23.61% - 51.58%	8.29% - 20.72%	8.74% - 20.07%
Brazil (fixed line, wireless and TV)	31.65%	18.21%	9.70%
Puerto Rico	28.91%	9.08%	11.29%
Dominican Republic	45.83%	10.55%	19.70%
Mexico (fixed line and wireless)	33.38%	10.75%	14.34%
Ecuador	35.80%	7.92%	22.84%
Peru	28.92%	14.18%	14.20%
El Salvador	39.43%	23.69%	21.95%
Chile	25.92%	8.61%	7.87%
Colombia	38.34%	14.40%	13.93%
Other countries	10.1% - 48.92%	0.5% - 21.39%	7.39% - 23.79%

Average margin on
EBITDA

Average margin on
CAPEX

Average pre-tax
discount rate
(WACC)

2017:

Europe (7 countries)

25.59% - 52.46%

7.34% - 14.97%

9.06% - 19.04%

Brazil (fixed line, wireless and TV)

35.28%

22.13%

11.71%

Puerto Rico

23.31%

8.31%

4.42%

Dominican Republic

45.79%

15.55%

19.23%

Mexico (fixed line and wireless)

35.48%

8.72%

16.13%

Ecuador

37.83%

10.07%

23.57%

Peru

29.64%

16.75%

13.61%

El Salvador

40.36%

17.99%

25.14%

Chile

22.04%

12.45%

6.15%

Colombia

41.93%

19.88%

19.06%

Other countries

9.16% - 48.18%

0.43% - 23.43%

7.89% - 24.28%

Summary of Exchange Rates Used forTranslation of Foreign Currencies

The exchange rates used for the translation of foreign currencies against the Mexican peso are as follows:


		Average exchange rate						Closing exchange rate at December 31,
Country or Zone	Currency	2015		2016		2017		2016		2017
Argentina ⁽¹⁾	Argentine Peso (AR$)		1.7152		1.2632		1.1489		1.3047		1.0610
Brazil	Real (R$)		4.8068		5.3868		5.9346		6.3611		5.9815
Colombia	Colombian Peso (COP$)		0.0058		0.0061		0.0064		0.0069		0.0066
Guatemala	Quetzal		2.0704		2.4548		2.5755		2.7561		2.6940
U.S.A. ⁽²⁾	US Dollar		15.8504		18.6529		18.9400		20.7314		19.7867
Uruguay	Uruguay Peso		0.5810		0.6206		0.6606		0.7066		0.6869
Nicaragua	Cordoba		0.5813		0.6515		0.6307		0.7071		0.6428
Honduras	Lempira		0.7171		0.8109		0.8007		0.8759		0.8330
Chile	Chilean Peso		0.0243		0.0276		0.0292		0.0310		0.0322
Paraguay	Guaraní		0.0031		0.0033		0.0034		0.0036		0.0035
Peru	Sol (PEN$)		4.9746		5.5232		5.8054		6.1701		6.0976
Dominican Republic	Dominican Peso		0.3515		0.4048		0.3983		0.4438		0.4095
Costa Rica	Colon		0.0293		0.0338		0.0331		0.0369		0.0346
European Union	Euro		17.3886		20.6334		21.3649		21.8032		23.7539
Bulgaria	Lev		9.3785		10.5483		10.9223		11.1561		12.1406
Belarus ⁽³⁾	New Belarusian Ruble		9.9808		9.3929		9.8087		10.5622		9.9882
Croatia	Croatian Kuna		2.4096		2.7392		2.8619		2.8886		3.1954
Macedonia	Macedonian Denar		0.2984		0.3350		0.3471		0.3546		0.3861
Serbia	Serbian Denar		0.1517		0.1676		0.1762		0.1768		0.2009

(1)

In the years ended December 31, 2016 and 2017, the Argentine peso depreciated against the US dollar by 21.8% and 17.4%, respectively. The Company considers on the basis of the quantitative and qualitative indicators in IAS 29, that Argentina should not be considered a hyperinflationary economy as of December 31, 2017. However, it is possible that certain market participants and regulators could have varying views on this topic during 2018 as Argentina’s economy evolves. The Company will continue to carefully monitor the situation and make appropriate changes if and when necessary.

(2)	Includes U.S.A., Ecuador, El Salvador, Puerto Rico and Panama.

(3)	In July 2016, a new ruble was introduced, at a rate of 1 BYN = 10,000 BYR. Old and new rubles circulated in parallel from July 1 to December 31, 2016.