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Income Taxes (Tables)
 12 Months Ended
Dec. 31, 2017
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Summary of Composition of Income Tax Expense

The composition of income tax expense for the years ended December 31, 2015, 2016 and 2017 is as follows:

 

     2015     2016     2017  

In Mexico:

       

Current year income tax

    Ps. 17,156,638     Ps. 14,316,005     Ps.  16,568,274  

Deferred income tax

      (4,095,128 )      (12,086,232 )      2,582,287  

Foreign:

       

Current year income tax

      17,775,360       15,367,903       13,524,729  

Deferred income tax

      (11,657,219 )      (6,198,820 )      (7,733,779 ) 
  

 

 

    

 

 

    

 

 

  
   Ps. 19,179,651     Ps. 11,398,856     Ps.  24,941,511  
  

 

 

    

 

 

    

 

 

  
Summary of Deferred Tax Related to Items Recognized in OCI

Deferred tax related to items recognized in OCI during the year:

 

     2015     2016     2017  

Remeasurement of defined benefit plans

    Ps. 7,786,292     Ps. (7,734,732 )    Ps. 3,032,403  

Effect of financial instruments acquired for hedging purposes

      (16,069 )      (21,046 )      (5,337 ) 

Available for sale securities

      169,529           2,858,452       (266,753 ) 

Other

      (4,019 )      136,879       —    
  

 

 

    

 

 

    

 

 

  

Deferred tax benefit (expense) recognized in OCI

    Ps.    7,935,733     Ps. (4,760,447 )    Ps.   2,760,313  
  

 

 

    

 

 

    

 

 

  
Summary of Reconciliation of Statutory Income Tax Rate in Mexico to Consolidated Effective Income Tax Rate Recognized

A reconciliation of the statutory income tax rate in Mexico to the consolidated effective income tax rate recognized by the Company is as follows:

 

     Year ended December 31,  
         2015             2016             2017      

Statutory income tax rate in Mexico

      30.0%       30.0%       30.0%  

Impact of non-deductible and non-taxable items:

       

Tax inflation effects

      6.2%       15.9%       17.8%  

Derivatives

      0.5%       8.0%       1.0%  

Employee benefits

      1.7%       4.4%       2.2%  

Other

      (0.1% )      9.8%       2.6%  
  

 

 

    

 

 

    

 

 

  

Effective tax rate on Mexican operations

      38.3%       68.1%       53.6%  

Use of tax credits in Brazil

      0.4%       (0.6% )      (0.4% ) 

Equity interest in net loss (income) of associated companies

      0.8%       (0.2% )      —  

Gain on derecognition of equity method investment

      (6.4% )      —       —  

Dividends received from associates

      (0.9% )      (7.9% )      (1.2% ) 

Foreign subsidiaries and other non-deductible items, net

      2.0%       (10.8% )      (8.3% ) 
  

 

 

    

 

 

    

 

 

  

Effective tax rate

      34.2%       48.6%       43.7%  
  

 

 

    

 

 

    

 

 

  
Summary of Analysis of Temporary Differences Giving Rise to Net Deferred Tax Liability

An analysis of temporary differences giving rise to the net deferred tax liability is as follows:

 

     Consolidated statement of financial position     Consolidated statement of comprehensive income  
                 2016                             2017                 2015     2016     2017  

Provisions

    Ps. 25,850,131     Ps. 26,268,666     Ps. (126,330 )    Ps. 1,622,132     Ps. 1,579,604  

Deferred revenues

      8,222,412       7,461,802       1,065,242       (12,128 )      (965,010 ) 

Tax losses carry forward

      38,208,079       38,332,408       (1,222,172 )      12,706,245       (323,506 ) 

Property, plant and equipment

      (9,716,615 )      (9,929,129 )      7,110,085       2,445,783       1,974,753  

Inventories

      1,522,739       2,003,049       (1,527,453 )      (229,571 )      519,046  

Licenses and rights of use

      (2,530,747 )      (2,455,877 )      2,548,353       54,182       348,201  

Employee benefits

      28,243,207       33,253,071       2,614,932       3,616,952       1,225,310  

Other

      8,790,612       9,639,995       5,289,690       (1,918,543 )      793,094  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Net deferred tax assets

    Ps.  98,589,818     Ps.  104,573,985        
  

 

 

    

 

 

        

Deferred tax expense in net profit for the year

 

   Ps.  15,752,347     Ps.  18,285,052     Ps.  5,151,492  
      

 

 

    

 

 

    

 

 

  
Summary of Reconciliation of Deferred Tax Assets and Liabilities, Net

 

Reconciliation of deferred tax assets and liabilities, net:

 

     2015     2016     2017  

Opening balance as of January 1,

    Ps. 52,310,097     Ps. 69,817,147     Ps. 98,589,818  

Deferred tax benefit

      15,752,347       18,285,052       5,151,492  

Effect of translation

      (6,259,252 )      15,273,228       (1,687,276 ) 

Deferred tax benefit (expense) recognized in OCI

      7,935,732       (4,760,447 )      2,760,313  

Deferred taxes acquired in business combinations

      78,223       (25,162 )      (240,362 ) 
  

 

 

    

 

 

    

 

 

  

Closing balance as of December 31,

    Ps. 69,817,147     Ps. 98,589,818     Ps. 104,573,985  
  

 

 

    

 

 

    

 

 

  

Presented in the consolidated statements of financial position as follows:

       

Deferred income tax assets

    Ps. 81,407,012     Ps.  112,651,699     Ps. 116,571,349  

Deferred income tax liabilities

      (11,589,865 )      (14,061,881 )      (11,997,364 ) 
  

 

 

    

 

 

    

 

 

  
   Ps. 69,817,147     Ps. 98,589,818     Ps.  104,573,985  
  

 

 

    

 

 

    

 

 

  
Summary of Combined Income before Taxes and Combined Provision for Taxes

The combined income before taxes and the combined provision for taxes of such subsidiaries in 2015, 2016 and 2017 are as follows:

 

     2015      2016      2017  

Combined income before taxes

    Ps.  27,933,182      Ps.  45,697,258      Ps.  38,286,046  

Combined tax provision differences not deductible-not cumulative in the foreign subsidiaries

    Ps. 6,118,142      Ps. 9,169,083      Ps. 5,790,950  
Available Tax Loss Carryforwards Recorded in Deferred Tax Assets

At December 31, 2017, the available tax loss carryforwards recorded in deferred tax assets are as follows on a country by country basis:

 

Country

    Balance of available tax
loss carryforwards at
December 31, 2017		      Tax loss carryforward
benefit		  

Brazil

      Ps.78,617,318        Ps.26,729,887  

Mexico

      1,850,216        555,065  

Colombia

      11,221,937        4,488,775  

Peru

      421,788        124,427  

Austria

      25,733,966        6,433,492  

Nicaragua

      2,536        762  
  

 

 

     

 

 

  

Total

      Ps. 117,847,761        Ps. 38,332,408