RGP UPDATE

March 2017

Outline

2

Country Risk

Stock Exchange

Securities Market

1

2

3

4

Exchange Rates

Inflation Rate5

Investment Unit (UDI)6

Economic Confidence Indicator (IMCE)7

International Reserves8

Mexico Economic Overview

Current initiatives

Our Intellectual Bench

Success Case Studies

1

2

3

4

Snapshot

RGP Academy5

Knowledge Sharing6

Business News7

Your Mexico Team8

RGP

Mexico Exchange Rates

3

$19.60

$20.60

$21.60

$22.60

$23.60

31/03/17$20.0745

January February March

31/01/17$22.3532

28/02/17$21.1984

$17.15$18.15$19.15$20.15$21.15$22.15$23.15

31/03/17$18.7955

January February March

31/01/17$20.7908

28/02/17$19.9957

$22.40$23.20$24.00$24.80$25.60$26.40$27.20$28.00

31/03/17$23.4051

January February March

31/01/17$25.9085

28/02/17$24.8747

$13.50$14.00$14.50$15.00$15.50$16.00$16.50$17.00

30/03/17$14.0568

January February March

31/01/17$15.9923

28/02/17$15.0989

Note: Mexican Pesos per CurrencySource: Mexican Central Bank, www.banxico.org.mx, 2017

Mexico Country Risk

4

The Country Risk indicates the possibilities of an emerging country failing to fulfill its obligations over external debt payments, whether for capital or interest. The higher the Country Risk, the larger the possibility of default.

It is composed of three main sources:

• Sovereign Risk

• Transfer Risk

• Generic Risk

It is measured through the use of the Emerging Markets Bond Index (EMBI) created by J.P. Morgan Chase.

Source: www.economia.com.mx, 2017

January February March180185190195200205210215220225230 226

213

196

Country Risk

Note: Basis points

Mexico Stock Exchange

5Source: Mexican Stock Exchange (BMV), http://www.bmv.com.mx/, 2017

The Mexican Stock Exchange (BMV) is a public institution that operates under a concession granted by the Ministry of Finance (SHCP), observing the Mexican Securities Law. Its shareholders are authorized brokerage firms, which each own one share. Its broad market indicator is known as “Indice de Precios y Cotizaciones” (IPC).

Marketable Securities•Capitals Market (Stocks, Fibras)•Capital Development Market (CKDes)

• Debt Market (Government, Short, Medium and Long Term Debt).

January February March46,000

46,500

47,000

47,500

48,000

48,500

49,000

47,001.0046,856.79

48,541.56

Price and Market Rates Index (IPC)

Mexico Securities Market

6Source: Mexican Central Bank, www.banxico.org.mx, 2017

Mexico’s Central Bank (Banxico) carries out operations in the securities market in order to regulate the liquidity of Mexico’s financial system.

It also undertakes primary auctions of securities for the government and other public sector entities, and issues regulations on several financial operations of financial intermediaries.

Cetes 28Zero coupon bonds denominated in Mexican Pesos issued by the Mexican Government. The instrument due in 28 days is a common reference.

January February March5.60%5.70%5.80%5.90%6.00%6.10%6.20%6.30%6.40%6.50%

5.88%

6.25%

6.43%

Government Securities Auc-tion’s Monthly Results (Cetes

28-days)

Mexico Inflation Rate

7Source: Mexican Central Bank, www.banxico.org.mx, 2017

Inflation can be defined as a continuous and

widespread increase in goods and services

prices.

The Consumer Price Index (CPI) is the

statistical instrument that calculates inflation

by continuously measuring the price

changes of households’ representative

basket of goods and services. January February March0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

3.36%

4.72% 4.86%

Annualized Inflation Rates measured monthly

Mexico Investment Unit (UDI)

8Source: Mexican Central Bank, www.banxico.org.mx and Ministry of Finance, www.sat.gob.mx, 2017

The Investment Unit (Unidad de Inversion,

UDI) is a value unit linked to the overall

movement of prices. It is commonly used in

financial operations or investment

instruments that are required to guarantee a

return above inflation. The Mexican Central

Bank is the responsible authority to publish

its value in Mexican Pesos for each day of the

month. January February March5.5600005.5800005.6000005.6200005.6400005.6600005.6800005.7000005.7200005.740000

5.616020

5.686923

5.723135

Investment Unit (UDI)

Mexico Economic Confidence Index (IMCE)

9Source: Public Accountants Mexican Association, IMCP, http://imcp.org.mx/, 2017

The Mexican Economic Confidence Index, IMCE, is an indicator which aims to quantify the expectation of the perceived business climate through the perception of more than 20,000 registered public accountants of nearly 60 colleges affiliated to Public Accountants Mexican Institute, IMCP.

The indicator is divided into two main components, which presents the current perception in the business climate as well as the perspective in six months. Its score is measured through a range of 0 to 140 points. Higher values represent higher optimism.

January February March$63$64$65$66$67$68$69$70$71$72

66.10

67.88

71.24

Economic Confidence Indi-cator

Mexico International Reserves

10Source: Mexican Central Bank, www.banxico.org.mx, 2017

Known as financial assets invested abroad by the Mexican Central Bank that can easily be converted into means of payment.

According to the Mexican Central Bank, the following are considered as International Reserves:

• Foreign bank notes and coins;

• Deposits, securities and stocks payable outside of Mexico;

• Loans by Central Banks payable at no longer than six months;

• The Special Drawing Rights at the International Monetary Fund.

January February March$174,600

$174,700

$174,800

$174,900

$175,000

$175,100

$175,200

$174,791

$175,145

$174,931

International Reserves (Mil-lion USD)

RGP Snapshot

$598M revenue in fiscal year 2016

3,300+ Professionals serving clients in 70 countries

10-20 years experience for our professionals

100% of our top 50 clients have remained clients year after year

RECOGNIZED as one of Forbes’ 100 Most Trustworthy Companies in 2015

Professional services provided to:

87 of the Fortune 100 companies

75% of the Fortune 500 companies

RGP Snapshot

Our track record of success has been achieved through ouruncompromising commitment to value-based relationships with our clients.

REVENUE RECOGNITION

On May 28, 2014, the FASB and IASB issued converged final revenue recognition standards, which eliminate most industry-specific GAAP and significantly change revenue recognition.

Now that the one year delay proposed by the Boards is finalized, the standards will become effective in fiscal years beginning after December 15, 2017 (calendar year 2018) for public U.S. companies, which is essentially the same for companies reporting under IFRS. Private companies are allowed a one-year delay.

Whatever timeline you adopt, we can help you prepare.

Implementing these changes will be complex and time consuming. In a recent survey we conducted, 82% of respondents anticipate that implementation will be somewhat to very challenging.

Even companies not expecting drastic changes to the amount or timing of revenue recognition will likely be affected by necessary changes in documentation and information systems to track new data requirements and support the additional disclosures, estimates and increased use of management judgment.

For more information please click here.

Current initiatives

Our Intellectual Bench

The following are examples of some of our consultants who are available and ready to support your strategic projects and initiatives.

Let’s talk!

Our Intellectual Bench

Our Intellectual Bench

Our Intellectual Bench

Our Intellectual Bench

RGP Mexico – Success Case Study

CLIENT:

INITIATIVE:

HOW WE HELPED:

BUSINESS OUTCOME:

Confidential.

After the acquisition of a couple of companies in Mexico, Corporate Management decided they

needed to have a full time Accounting Manager in charge of all financial reporting and local tax

compliance matters, as well as responsible for the successful integration of the recently

acquired operations. Significant knowledge of process standardization, local legal regulatory

environment, and general accounting and tax in both US and Mexican GAAP was required.

After understanding the client needs and operations, we provided several potential candidates

for the position of Interim Accounting Manager. We helped the Company to interview and

select the appropriate candidate, and we supported the candidate during the kick-off phase

and the subsequent phases of the project.

Our consultant was able to immediately bring leadership and stability to the position of

Accounting Manager. He worked hand in hand with the Corporate office and the Local CFO on

the stabilization of the financial function, as well as on certain corporate priorities such as

resolution of certain specific tax matters, reorganization of the finance and accounting team,

and rationalization of financial systems. Our consultant stayed as interim Accounting Manager

for a period of nine months, participated in the hiring of the permanent Accounting Manager,

and stayed with the Company for another 12 months as a part-time consultant on the

implementation of electronic accounting regulations and other regulatory initiatives.

RGP Academy

Our complimentary webcasts help educate you and your team. We provide insights, case examples and subject-matter expertise from those who have been on the front line working with business leaders - as part of their teams - to solve problems, transfer knowledge and drive change from the inside out.

Upcoming WebcastOSHA’s New Electronic Recordkeeping Reporting Requirements: Are you Prepared for the Data Challenge? March 16, 2017, 9 am PT/12 pm ETPresented by: Michelle Campbell Ross, National Practice Leader, RGP Legal, Emme Devonish, Practice Director, RGP Legal and Matthew Deffebach, Partner, Haynes and Boone, LLP

OSHA’s new electronic recordkeeping rule becomes effective on July 1, 2017. Companies are no doubt concerned that they will need to start uploading their illness and injury data to a publicly available database. This new rule raises a number of issues from data privacy to the practical execution of meeting the new compliance requirements.

Please join a panel of legal and regulatory experts from RGP and international law firm Haynes and Boone, LLP, who will discuss the new rule and the importance of compliance with the deadline. The panel will also address risk management challenges such as coherent policies and processes, data privacy and information management, training and change management, and will provide some practical steps that companies should be taking in the immediate term to comply with the July deadline.

To register free of charge, please click here.

Knowledge Sharing

How Financial Statement Audits deliver Key Business InsightsFinancial statement audits are not just a compliance exercise, but also an opportunity to gain knowledge that can generate positive business results, according to a new survey.https://goo.gl/8MJTqF

Artificial Intelligence’s Real Role in BusinessFirst IBM’s Watson supercomputer took on Jeopardy and now it’s ready to do your taxes. Or, so the TV ads running in heavy rotation these days would have you believe. Fact is, folks walking into their local tax preparer’s office will not be handing over their W-2s to R2-D2 anytime soon.https://goo.gl/07PxgP

Solving Your Leadership Gap: Tips for Developing New LeadersOne of the most alarming current global business trends points to one of the most tantalizing business opportunities.https://goo.gl/jdqz1a

Think Like a Start-up, Be a Better CFOCFOs at companies of any size would do well to emulate these common approaches to running finance at start-up firms.https://goo.gl/HSu0WM

Business News

Trump just kicked off NAFTA Renegotiation“NAFTA has been a disaster for our country,” he said. “NAFTA has to be totally gotten rid of. Something has to happen with NAFTA.” But President Trump seems to have softened on the deal.https://goo.gl/WvCYV2

On ‘Brexit,’ It’s Divorce First, Trade Talks Later, E.U. Tells U.K.Britain must agree to pay its bills and to protect millions of Europeans living in Britain before reaching a new trading relationship with the European Union: European Council.https://goo.gl/bKjdJA

Toshiba likely to miss Quarterly Earnings Deadline for Third TimeToshiba Corp will likely miss a third deadline to report its quarterly business results, two sources told Reuters, forcing the Japanese conglomerate to ask for a fresh extension or face a possible delisting from the Tokyo Stock Exchange.https://goo.gl/omQb0t

Mexico's Governors tap Investors in China, elsewhereMexico's states are turning to Asia and beyond as some U.S. companies put investment plans on hold south of the border following President Donald Trump's calls to bring jobs back home.https://goo.gl/HmypFH

Your RGP Mexico team:

MEXICO CITY OFFICE | Mariano Escobedo 476 Piso 14www.rgp.com 55-2000-6500

NESTOR GONZALEZ-MONROY |Managing Director – Latin AmericaExecutive with financial, sales, strategy and operational experience in the software, healthcare, consumer products, public accounting and consulting industries.

ARMANDO NURICUMBO , CPA |Managing Director – MexicoPublic accountant with solid international experience, CPA in Mexico and USA (Illinois), Master in Asian Studies (Tamkang University, Taiwan), ex-PwC, experience in multiple industries including financial services, advertising, consulting and manufacturing.MARIO BARBOSA | Recruiting DirectorSenior expert in human capital projects, including talent attraction, employee administration, leadership and organizational development. Proven executive in manufacturing, consulting and service industries.

RAMON MONROY | Strategic Accounts DirectorSenior Executive with strong experience in financial services, educationalinstitutions, leadership programs, business development, and strategic planning.

Your RGP Mexico team:

MEXICO CITY OFFICE | Mariano Escobedo 476 Piso 14www.rgp.com 55-2000-6500

CRISTY PERALTA |Client Service (Project Management Practice)Senior Project Manager with more than 15 years experience in pharmaceutical , retail and insurance industries. Expert in PMI methodology and Scrum practices. Diploma in Quality Control and Lean processes, Kaizen and Hoshin kanri (Japan).

HUMBERTO PÉREZ |Client Service (Human Capital Practice)Senior HR Manager with over 20 years of experience in manufacturing, commercial and business consultancy. Certified Coach and Kaizen/Lean Manufacturing expert.

JORGE SILVA |Client Service (Accounting & Finance Practice)PwC veteran with more than 25 years of experience in multiple industries, both from an audit and consulting perspective. Strong knowledge of energy industry including US GAAP, Statutory and full-scope audits of PEMEX.

CARLOS FLORES WALLACE | Client Service (Financial Services Practice)Financial Services expert with vast experience in front-end and back-office operations, including risk management, credit operations, retail banking, credit unions, investments, and regulatory framework.

Your RGP Mexico team:

MEXICO CITY OFFICE | Mariano Escobedo 476 Piso 14www.rgp.com 55-2000-6500

GERMAN DE LA GARZA | Client Service (Government Relations Practice)Political consultant with long term experience in public-private interaction, political landscape, public bidding processes, public relations, crisis management and political communication.

MICHAEL PUTTER | Client Service (Security Practice)Security and business intelligence consultant, with a strong track record delivering projects on physical and logical security issues in Mexico and in Latin America.

GUILLERMO LAGOS | Client Service (Innovation Practice)Business consultant, former DGA of Corporate Banking at Banco Azteca, Director of Innovation and Entrepreneurship at EGADE business school (ITESM), with strong experience advising companies on innovation and intrapreneurship programs.

CLAUDIA VILLASENOR | Client Service (Back-office Practice)Public accountant with strong experience in back-office operations. Solid experience in projects related to alignment of administrative processes and establishment of key performance metrics in Accounting and Finance.

UNA REALIDAD

Ninguna empresa puede tener al mejor talento contratado de forma permanente

todo el tiempo.Nosotros ayudamos a cerrar la brecha de

talento de forma flexible y sencilla.

Contacto.Mexico@RGP.com www.RGP.com Tel. +52.55.2000.6500