Employee Benefits (Tables)

12 Months Ended

Dec. 31, 2017

Analysis of the Net Liability and Net Period Cost for Employee Benefit

An analysis of the net liability and net period cost for employee benefits is as follows:


	At December 31,
	2016		2017
Liability:
Mexico	Ps.	70,073,351		Ps. 84,821,197
Puerto Rico		17,736,616		13,962,128
Brazil		7,222,762		6,276,780
Europe		15,748,433		14,833,840
Ecuador		267,705		403,194

Total		Ps. 111,048,867		Ps. 120,297,139

For the year ended December 31,

2015

2016

2017

Net period cost (benefit)

Mexico

Ps. 8,962,953

Ps. 12,281,154

Ps. 11,586,065

Puerto Rico

(455,117

)

1,058,131

776,238

Brazil

451,353

633,159

735,855

Austria

260,850

226,447

385,689

Ecuador

58,042

41,380

152,335

Total

Ps. 9,278,081

Ps. 14,240,271

Ps. 13,636,182

Summary of Defined Benefit Obligation (DBO) and Plan Assets for the Pension and Other Benefit Obligation Plans

The defined benefit obligation (DBO) and plan assets for the pension and other benefit obligation plans, by country, are as follows:

At December 31

2016

2017

DBO

Plan Assets

Effect of asset
celling

Net employee
benefit liability

DBO

Plan Assets

Effect of asset
celling

Net employee
benefit liability

Mexico

Ps. 249,101,141

Ps. (179,871,258)

Ps.

Ps. 69,229,883

Ps. 266,304,948

Ps. (182,539,376)

Ps.

Ps. 83,765,572

Puerto Rico

39,909,853

( 22,173,237)

17,736,616

38,711,695

( 24,749,567)

13,962,128

Brazil

19,752,908

( 20,301,126)

7,083,218

6,535,000

19,369,664

( 20,399,661)

6,519,560

5,489,563

Europe

4,366,245

4,554,912

Total

Ps. 313,130,147

Ps. (222,345,621)

Ps. 7,083,218

Ps. 97,867,744

Ps. 328,941,219

Ps. (227,688,604)

Ps. 6,519,560

Ps. 107,772,175

Summary of the Actuarial Results Generated for the Pension and Retirement Plans as well as the Medical Services

Below is a summary of the actuarial results generated for the pension and retirement plans as well as the medical services in Puerto Rico and Brazil; the pension plans and seniority premiums related to Telmex; the pension plan, the service awards plan and severance in Austria corresponding to the years ended December 31, 2015, 2016 and 2017:


	At December 31, 2015
	DBO			Plan Assets			Effect of asset celling			Net employee benefit liability
Balance at the beginning of the year	Ps.	309,639,799		Ps.	(242,360,329	)	Ps.	6,257,074		Ps.	73,536,544
Current service cost		4,540,925									4,540,925
Interest cost on projected benefit obligation		25,811,047									25,811,047
Expected return on plan assets					(20,710,965	)					(20,710,965	)
Changes in the asset ceiling during the period and others								601,540			601,540
Past service costs and other		(1,365,096	)		118,725						(1,246,371	)
Actuarial gain for changes in experience		(27,949	)								(27,949	)
Actuarial loss from changes in financial assumptions		30,285									30,285

Net period cost	Ps.	28,989,212		Ps.	(20,592,240	)	Ps.	601,540		Ps.	8,998,512
Actuarial gain for changes in experience		(2,021,790	)								(2,021,790	)
Actuarial gain from changes in demographic assumptions		(685,110	)								(685,110	)
Actuarial gain from changes in financial assumptions		(2,502,344	)								(2,502,344	)
Changes in the asset ceiling during the period and others								(754,357	)		(754,357	)
Return on plan assets greater than discount rate					31,026,539						31,026,539

Recognized in other comprehensive income	Ps.	(5,209,244	)	Ps.	31,026,539		Ps.	(754,357	)	Ps.	25,062,938
Contributions made by plan participants		231,619									231,619
Contributions to the pension plan made by the Company					(2,954,839	)					(2,954,839	)
Benefits paid		(22,321,686	)		22,149,262						(172,424	)
Payments to employees		(19,929	)								(19,929	)
Effect of translation		2,739,958			497,167			(1,281,110	)		1,956,015

Others	Ps.	(19,370,038	)	Ps.	19,691,590		Ps.	(1,281,110	)	Ps.	(959,558	)
Balance at the end of the year		314,049,729			(212,234,440	)		4,823,147			106,638,436
Less short-term portion		(118,411	)								(118,411	)

Non-current obligation	Ps.	313,931,318		Ps.	(212,234,440	)	Ps.	4,823,147		Ps.	106,520,025


	At December 31, 2016
	DBO			Plan Assets			Effect of asset celling			Net employee benefit liability
Balance at the beginning of the year	Ps.	314,049,729		Ps.	(212,234,440	)	Ps.	4,823,147		Ps.	106,638,436
Current service cost		4,606,856									4,606,856
Interest cost on projected benefit obligation		27,275,363									27,275,363
Expected return on plan assets					(18,972,042	)					(18,972,042	)
Changes in the asset ceiling during the period and others								875,192			875,192
Past service costs and other					165,851						165,851
Actuarial gain for changes in experience		(28,867	)								(28,867	)
Actuarial loss from changes in financial assumptions		7,784									7,784

Net period cost	Ps.	31,861,136		Ps.	(18,806,191	)	Ps.	875,192		Ps.	13,930,137
Actuarial gain for changes in experience		(20,976,837	)								(20,976,837	)
Actuarial loss from changes in demographic assumptions		397,985									397,985
Actuarial loss from changes in financial assumptions		1,718,189									1,718,189
Changes in the asset ceiling during the period and others								(754,535	)		(754,535	)
Return on plan assets greater than discount rate					(4,724,041	)					(4,724,041	)

Recognized in other comprehensive income	Ps.	(18,860,663	)	Ps.	(4,724,041	)	Ps.	(754,535	)	Ps.	(24,339,239	)
Contributions made by plan participants		255,760			(255,760	)					—
Contributions to the pension plan made by the Company					(2,756,519	)					(2,756,519	)
Benefits paid		(25,694,301	)		25,517,599						(176,702	)
Payments to employees		(525,612	)								(525,612	)
Effect of translation		12,196,546			(9,086,269	)		2,139,414			5,249,691

Others	Ps.	(13,767,607	)	Ps.	13,419,051		Ps.	2,139,414		Ps.	1,790,858
Balance at the end of the year		313,282,595			(222,345,621	)		7,083,218			98,020,192
Less short-term portion		(152,448	)								(152,448	)

Non-current obligation	Ps.	313,130,147		Ps.	(222,345,621	)	Ps.	7,083,218		Ps.	97,867,744

At December 31, 2017

DBO

Plan Assets

Effect of asset
celling

Net employee
benefit liability

Balance at the beginning of the year

Ps.

313,282,595

Ps.

(222,345,621

)

Ps.

7,083,218

Ps.

98,020,192

Current service cost

4,285,693

Interest cost on projected benefit obligation

28,922,385

Expected return on plan assets

(20,916,104

)

(20,916,104

)

Changes in the asset ceiling during the period and others

716,330

Past service costs and other

53,032

Actuarial gain for changes in experience

(35,145

)

(35,145

)

Actuarial gain from changes in demographic assumptions

(85

)

(85

)

Actuarial gain from changes in financial assumptions

(4,294

)

(4,294

)

Net period cost

Ps.

33,168,554

Ps.

(20,863,072

)

Ps.

716,330

Ps.

13,021,812

Actuarial loss for changes in experience

11,671,860

Actuarial gain from changes in demographic assumptions

(381,172

)

(381,172

)

Actuarial loss from changes in financial assumptions

2,438,078

Changes in the asset ceiling during the period and others

(856,188

)

(856,188

)

Return on plan assets greater than discount rate

(2,483,430

)

(2,483,430

)

Recognized in other comprehensive income

Ps.

13,728,766

Ps.

(2,483,430

)

Ps.

(856,188

)

Ps.

10,389,148

Contributions made by plan participants

198,713

(198,713

)

—

Contributions to the pension plan made by the Company

(2,697,621

)

(2,697,621

)

Benefits paid

(18,841,754

)

18,841,754

—

Payments to employees

(9,843,743

)

(9,843,743

)

Effect of translation

(2,579,506

)

2,058,099

(423,800

)

(945,207

)

Others

Ps.

(31,066,290

)

Ps.

18,003,519

Ps.

(423,800

)

Ps.

(13,486,571

)

Balance at the end of the year

329,113,625

(227,688,604

)

6,519,560

107,944,581

Less short-term portion

(172,406

)

(172,406

)

Non-current obligation

Ps.

328,941,219

Ps.

(227,688,604

)

Ps.

6,519,560

Ps.

107,772,175

Schedule of Plan Assets Invested

Plan assets are invested in:


	At December 31
	2016						2017
	Puerto Rico		Brazil		Mexico		Puerto Rico		Brazil		Mexico
Equity instruments		30%		4%		65%		37%		6%		61%
Debt instruments		68%		90%		35%		61%		88%		39%
Others		2%		6%		—		2%		6%		—

		100%		100%		100%		100%		100%		100%

Summary of Assumptions Used in Determining the Net Period Cost

The assumptions used in determining the net period cost were as follows:


	2015									2016									2017
	Puerto Rico			Brazil		Mexico		Europe		Puerto Rico		Brazil			Mexico		Europe		Puerto Rico		Brazil			Mexico		Europe
Discount rate and long-term rate return		4.42	%		12.57%		9.20%		1.25% & 2.25%		4.16%		10.84	%		10.70%		1.0%, 1.5% & 1.75%		3.61%		10.18	%		10.70%		1.0%, 1.5% & 2.00%
Rate of future salary increases		3.50	%		5.00%		4.50%		4.9%, 3.0%& 4.5%		3.50%		4.85	%		4.50%		3.0.%, 3.9% & 4.4%		2.75%		4.50	%		4.50%		3.0.%, 3.5% & 4.4%
Percentage of increase in health care costs for the coming year		5.70	%		11.50%						4.20%		11.35	%						3.57%		11.00	%
Year to which this level will be maintained		2027									N/A		2017							N/A		2028
Rate of increase of pensions									1.60%									1.60%									1.60%
Employee turnover rate*									0.0%-2.06%									0.0%-1.88%									0.0%-1.72%

*	Depending on years of service

Summary of Increase (Decrease) Would Have Resulted in the DBO Pension and Other Benefits

The increase (decrease) would have resulted in the DBO pension and other benefits at December 31, 2017 are as follows:


	-100 points			+100 points
Discount rate	Ps.	24,711,314		Ps.	(33,606,469	)
Health care cost trend rate	Ps.	(635,289	)	Ps.	738,685

Summary of Long-Term Direct Employee Benefits

Long-term direct employee benefits

Balance at
December 31,
2015

Applications

Balance at
December 31,
2016

Effect of
translation

Increase of
the year

Payments

Reversals

Long-term direct employee benefits

Ps.

11,116,581

Ps.

1,856,606

Ps.

2,210,026

Ps.

(1,832,675)

Ps.

(2,099,039)

Ps.

11,251,499

Balance at
December 31,
2016

Applications

Balance at
December 31,
2017

Effect of
translation

Increase of
the year

Payments

Reversals

Long-term direct employee benefits

Ps.

11,251,499

Ps.

795,581

Ps.

771,274

Ps.

(2,077,632)

Ps.

(582,686)

Ps.

10,158,036