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o | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
þ | ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2005 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(Translation of Registrant’s name into English)
(Jurisdiction of incorporation or organization)
Colonia Santa Fe
01210 Mexico, D.F.
Mexico
(Address of principal executive offices)
Title of each class | Name of each exchange on which registered | |
A Shares, without par value (“A Shares”) | New York Stock Exchange (for listing purposes only) | |
B Shares, without par value (“B Shares”) | New York Stock Exchange (for listing purposes only) | |
L Shares, without par value (“L Shares”) | New York Stock Exchange (for listing purposes only) | |
Dividend Preferred Shares, without par value (“D Shares”) | New York Stock Exchange (for listing purposes only) | |
Global Depositary Shares (“GDSs”), each representing twenty Ordinary Participation Certificates(Certificados de Participación Ordinarios)(“CPOs”) | New York Stock Exchange | |
CPOs, each representing twenty-five A Shares, twenty-two B Shares thirty-five L Shares and thirty-five D Shares | New York Stock Exchange (for listing purposes only) |
December 31, 2005 was:
53,970,590,013 B Shares
85,862,244,071 L Shares
85,862,244,071 D Shares
Large accelerated filerþ | Accelerated filero | Non-accelerated filero |
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Year Ended December 31, | ||||||||||||||||||||||||
2001 | 2002 | 2003 | 2004 | 2005 | 2005 | |||||||||||||||||||
(Millions of Pesos in purchasing power as of December 31, 2005 or millions of U.S. Dollars)(1) | ||||||||||||||||||||||||
(Mexican GAAP) | ||||||||||||||||||||||||
Income Statement Data: | ||||||||||||||||||||||||
Net sales | Ps. | 23,492 | Ps. | 24,366 | Ps. | 25,612 | Ps. | 30,291 | Ps. | 32,481 | U.S.$3,057 | |||||||||||||
Operating income | 4,904 | 5,256 | 6,572 | 8,843 | 10,803 | 1,017 | ||||||||||||||||||
Integral cost of financing, net(2) | 493 | 692 | 668 | 1,567 | 1,782 | 168 | ||||||||||||||||||
Restructuring and non-recurring charges(3) | 649 | 952 | 714 | 408 | 230 | 22 | ||||||||||||||||||
Income (loss) from continuing operations | 1,707 | (445 | ) | 3,847 | 5,756 | 7,716 | 726 | |||||||||||||||||
Income (loss) from discontinued operations(4) | 17 | 1,201 | (70 | ) | — | — | — | |||||||||||||||||
Cumulative effect of accounting change, net | (83 | ) | — | — | (1,056 | ) | (506 | ) | (48 | ) | ||||||||||||||
Net income | 1,608 | 834 | 3,909 | 4,461 | 6,126 | 576 | ||||||||||||||||||
Income (loss) from continuing operations per CPO(5) | 0.59 | (0.12 | ) | 1.38 | 1.89 | 2.28 | — | |||||||||||||||||
Net income per CPO(5) | 0.56 | 0.29 | 1.36 | 1.53 | 2.11 | — | ||||||||||||||||||
Weighted-average number of shares outstanding (in millions)(5) | 354,485 | 353,906 | 352,421 | 345,206 | 341,158 | — | ||||||||||||||||||
Cash Dividend per CPO | — | — | 0.21 | 1.30 | 1.38 | — | ||||||||||||||||||
Shares outstanding (in millions, at year end)(6) | 221,400 | 221,210 | 218,840 | 341,638 | 339,941 | — | ||||||||||||||||||
(U.S. GAAP)(7) | ||||||||||||||||||||||||
Income Statement Data: | ||||||||||||||||||||||||
Net sales | Ps. | 24,672 | Ps. | 24,600 | Ps. | 25,612 | Ps. | 30,291 | Ps. | 32,481 | U.S.$3,057 | |||||||||||||
Operating income | 2,771 | 3,404 | 6,566 | 8,101 | 10,009 | 942 | ||||||||||||||||||
Income from continuing operations | 2,493 | 114 | 3,240 | 4,410 | 6,825 | 642 | ||||||||||||||||||
Cumulative effect of accounting change, net | (939 | ) | (1,393 | ) | — | — | — | — | ||||||||||||||||
Net income (loss) | 1,554 | (1,280 | ) | 3,240 | 4,410 | 6,825 | 642 | |||||||||||||||||
Income from continuing operations per CPO(5) | 1.04 | 0.04 | 1.12 | 1.49 | 2.34 | — | ||||||||||||||||||
Net income (loss) per CPO(5) | 0.53 | (0.43 | ) | 1.12 | 1.49 | 2.34 | — | |||||||||||||||||
Weighted-average number of Shares outstanding (in millions)(6) | 354,485 | 353,906 | 352,421 | 345,573 | 341,158 | — | ||||||||||||||||||
Shares outstanding (in millions, at year end)(6) | 221,400 | 221,210 | 218,840 | 341,638 | 339,941 | — | ||||||||||||||||||
(Mexican GAAP) | ||||||||||||||||||||||||
Balance Sheet Data (end of year): | ||||||||||||||||||||||||
Cash and temporary investments | Ps. | 6,720 | Ps. | 9,930 | Ps. | 13,330 | Ps. | 17,196 | Ps. | 14,778 | U.S.$1,391 | |||||||||||||
Total assets | 58,775 | 63,759 | 70,391 | 76,385 | 74,852 | 7,044 | ||||||||||||||||||
Current notes payable to banks and other notes payable(8) | 400 | 1,400 | 310 | 3,407 | 340 | 32 | ||||||||||||||||||
Long-term debt(9) | 15,316 | 15,083 | 15,982 | 19,575 | 18,137 | 1,707 | ||||||||||||||||||
Customer deposits and advances | 12,903 | 13,282 | 15,222 | 15,813 | 18,046 | 1,698 | ||||||||||||||||||
Capital stock issued | 8,606 | 8,606 | 8,921 | 9,889 | 9,889 | 931 | ||||||||||||||||||
Total stockholders’ equity (including minority interest) | 22,374 | 24,100 | 29,920 | 28,524 | 29,864 | 2,810 | ||||||||||||||||||
(U.S. GAAP)(7) | ||||||||||||||||||||||||
Balance Sheet Data (end of year): | ||||||||||||||||||||||||
Property, plant and equipment, net | Ps. | 17,014 | Ps. | 17,180 | Ps. | 16,559 | Ps. | 19,453 | Ps. | 19,308 | U.S.$1,817 | |||||||||||||
Total assets | 61,160 | 63,704 | 73,549 | 85,099 | 82,179 | 7,733 | ||||||||||||||||||
Current notes payable to banks and other notes payable(8) | 400 | 1,400 | 310 | 3,407 | 340 | 32 | ||||||||||||||||||
Long-term debt(9) | 15,316 | 15,083 | 15,982 | 19,575 | 18,137 | 1,707 | ||||||||||||||||||
Total stockholders’ equity (excluding minority interest) | 21,383 | 19,956 | 26,286 | 27,018 | 28,333 | 2,666 | ||||||||||||||||||
(Mexican GAAP) | ||||||||||||||||||||||||
Other Financial Information: | ||||||||||||||||||||||||
Capital expenditures | Ps. | 1,589 | Ps. | 1,600 | Ps. | 1,157 | Ps. | 2,012 | Ps. | 2,639 | U.S.$248 | |||||||||||||
(U.S. GAAP)(7) | ||||||||||||||||||||||||
Other Financial Information: | ||||||||||||||||||||||||
Cash provided by operating activities | 1,744 | 6,335 | 6,836 | 7,077 | 10,265 | 966 | ||||||||||||||||||
Cash provided by (used for) financing activities | 2,429 | 422 | (2,880 | ) | (540 | ) | (9,278 | ) | (873 | ) | ||||||||||||||
Cash used for investing activities | (6,560 | ) | (3,382 | ) | (2,362 | ) | (735 | ) | (2,216 | ) | (209 | ) | ||||||||||||
Other Data (unaudited): | ||||||||||||||||||||||||
Average prime time audience share (TV broadcasting)(10) | 70.5 | % | 72.4 | % | 70.1 | % | 68.9 | % | 68.5 | % | — | |||||||||||||
Average prime time rating (TV broadcasting)(10) | 39.1 | 39.6 | 38.1 | 36.7 | 36.5 | — | ||||||||||||||||||
Magazine circulation (millions of copies)(11) | 132 | 137 | 128 | 127 | 145 | — | ||||||||||||||||||
Number of employees (at year end) | 13,700 | 12,600 | 12,300 | 14,100 | 15,100 | — | ||||||||||||||||||
Number of Innova subscribers (in thousands at year end)(12) | 716 | 738 | 857 | 1,003 | 1,251 | — | ||||||||||||||||||
Number of Cablevisión subscribers (in thousands at year end)(13) | 452 | 412 | 364 | 355 | 422 | — | ||||||||||||||||||
Number ofEsMas.comregistered users (in thousands at year end)(14) | 866 | 2,514 | 3,085 | 3,665 | 4,212 | — |
Notes to Selected Consolidated Financial Information: | ||
(1) | Except per CPO, ratio, average audience share, average rating, magazine circulation, employee, subscriber and registered user data. Information in these footnotes is in thousands of Pesos in purchasing power as of December 31, 2005, unless otherwise indicated. | |
(2) | Includes interest expense, interest income, foreign exchange gain or loss, net and gain or loss from monetary position. See Note 17 to our year-end financial statements. |
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(3) | See Note 18 to our year-end financial statements. | |
(4) | See Note 1(s) to our year-end financial statements. | |
(5) | For further analysis of income (loss) from continuing operations per CPO and net income per CPO (as well as corresponding amounts per A Share not traded as CPOs), see Note 21 (for the calculation under Mexican GAAP) and Note 24 (for the calculation under U.S. GAAP) to our year-end financial statements. | |
(6) | As of December 31, 2004 and 2005, we had four classes of common stock: A Shares, B Shares, D Shares and L Shares. As of December 31, 2003, we had three classes of common stock: A Shares, D Shares and L Shares. For purposes of this table, the weighted-average number of shares for all periods reflects the 25-for-one stock split and the 14-for-one stock dividend from the 2004 Recapitalization, and the number of shares outstanding for all periods reflects the 25-for-one stock split from the 2004 Recapitalization. Our shares are publicly traded in Mexico, primarily in the form of CPOs, each CPO representing 117 shares comprised of 25 A Shares, 22 B Shares, 35 D Shares and 35 L Shares; and in the United States in the form of Global Depositary Shares, or GDS, each GDS representing 20 CPOs. Effective on March 22, 2006, each GDS is represented by five CPOs. |
(7) | See Note 24 to our year-end financial statements. | |
(8) | Current notes payable to banks and other notes payable include Ps.15.3 million and Ps.8.0 million of other notes payable as of December 31, 2001 and 2002, respectively. As of December 31, 2003, 2004 and 2005, there are no other notes payable outstanding. See Note 8 to our year-end financial statements. | |
(9) | As of December 31, 2002, 2003, 2004 and 2005, there are no other long-term notes payable. See “Operating and Financial Review and Prospects — Results of Operations — Liquidity, Foreign Exchange and Capital Resources — Indebtedness” and Note 8 to our year-end financial statements. | |
(10) | “Average prime time audience share” for a period refers to the average daily prime time audience share for all of our networks and stations during that period, and “average prime time rating” for a period refers to the average daily rating for all of our networks and stations during that period, each rating point representing one percent of all television households. As used in this annual report, “prime time” in Mexico is 4:00 p.m. to 11:00 p.m., seven days a week, and “weekday prime time” is 7:00 p.m. to 11:00 p.m., Monday through Friday. Data for all periods reflects the average prime time audience share and ratings nationwide as published by IBOPE Mexico. For further information regarding audience share and ratings information and IBOPE Mexico, see “Information on the Company — Business Overview — Television — Television Broadcasting.” | |
(11) | The figures set forth in this line item represent total circulation of magazines that we publish independently and through joint ventures and other arrangements and do not represent magazines distributed on behalf of third parties. | |
(12) | Innova, S. de R.L. de C.V., or Innova, our direct to home, or DTH satellite service in Mexico, referred to alternatively as Sky Mexico for segment reporting purposes, commenced operations on December 15, 1996. The figures set forth in this line item represent the total number of gross active residential and commercial subscribers for Innova at the end of each year presented. Our share in the results of operations of Innova through December 31, 2000 was included in our income statement under the line item “Equity in results of affiliates.” For a description of Innova’s business and results of operations and financial condition, see “Information on the Company — Business Overview — DTH Joint Ventures — Mexico.” Under Mexican GAAP, effective January 1, 2001 and through March 31, 2004, we did not recognize equity in results in respect of our investment in Innova in our income statement. See “Operating and Financial Review and Prospects — Results of Operations — Equity in Earnings of Affiliates.” Since April 1, 2004, Innova has been consolidated in our financial results. | |
(13) | The figures set forth in this line item represent the total number of subscribers for Cablevisión’s basic service package at the end of each year presented. For a description of Cablevisión’s business and results of operations and financial condition, see “ Operating and Financial Review and Prospects — Results of Operations — Cable Television” and “Information on the Company — Business Overview — Cable Television.” | |
(14) | We launchedEsMas.comin May 2000. Since May 2000, the results of operations ofEsMas.com have been included in the results of operations of our Other Businesses segment. See “Operating and Financial Review and Prospects— Results of Operations — Other Businesses.” For a description ofEsMas.com,see “Information on the Company — Business Overview — Other Businesses — Total Segment Results —EsMas.com.” The figures set forth in this line item represent the number of registered users in each year presented. The term “registered user” means a visitor that has completed a profile questionnaire that enables the visitor to use the e-mail service provided byEsMas.com. |
• | a stock split in which each outstanding Share was divided into 25 Shares of the same class; | ||
• | the creation of a new class of common or ordinary shares, the B Shares; |
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• | a stock dividend in which we distributed to holders of outstanding Shares, 14 new Shares (of various classes depending on the class held) for every 25 Shares outstanding after the stock split; | ||
• | an increase in the number of Shares represented by each outstanding CPO, from three Shares to 117 Shares; and | ||
• | amendments to our bylaws related to these transactions. |
Before the | After the Stock | 14 New Shares Distributed | ||||
Recapitalization | Split | Per 25 Shares (post-split) | After the Recapitalization | |||
One A Share | 25 A Shares | Four B Shares, Five D Shares and Five L Shares | 25 A Shares, Four B Shares, Five D Shares and Five L Shares | |||
One D Share | 25 D Shares | Nine B Shares, Five D Shares | Nine B Shares, 30 D Shares | |||
One L Share | 25 L Shares | Nine B Shares, Five L Shares | Nine B Shares, 30 L Shares |
Before the Recapitalization | After the Recapitalization | |||||||||||||||||||||||
(% of total | (% of total | (% of total | (% of total | |||||||||||||||||||||
(millions) | capital stock) | voting stock) | (millions) | capital stock) | voting stock) | |||||||||||||||||||
Series A | 4,989 | 52.69 | 100.00 | % | 124,736 | 33.78 | 67.42 | |||||||||||||||||
Series B | — | — | — | 60,270 | 16.32 | 32.58 | ||||||||||||||||||
Series D | 2,240 | 23.65 | — | 92,134 | 24.95 | — | ||||||||||||||||||
Series L | 2,240 | 23.65 | — | 92,134 | 24.95 | — | ||||||||||||||||||
Total | 9,469 | 100.00 | % | 100.00 | % | 369,273 | 100.00 | % | 100.00 | % |
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High | Low | Average(1) | Period End | |||||||||||||
Period | ||||||||||||||||
2001 | 9.972 | 8.946 | 9.334 | 9.156 | ||||||||||||
2002 | 10.425 | 9.001 | 9.663 | 10.425 | ||||||||||||
2003 | 11.406 | 10.113 | 10.793 | 11.242 | ||||||||||||
2004 | 11.635 | 10.805 | 11.290 | 11.154 | ||||||||||||
2005 | 11.411 | 10.413 | 10.894 | 10.628 | ||||||||||||
December | 10.773 | 10.414 | 10.627 | 10.628 | ||||||||||||
2006: | ||||||||||||||||
January | 10.643 | 10.437 | 10.542 | 10.440 | ||||||||||||
February | 10.529 | 10.432 | 10.484 | 10.454 | ||||||||||||
March | 10.948 | 10.462 | 10.749 | 10.898 | ||||||||||||
April | 11.160 | 10.856 | 11.049 | 11.089 | ||||||||||||
May | 11.305 | 10.841 | 11.091 | 11.288 | ||||||||||||
June (through June 27) | 11.460 | 11.282 |
(1) | Annual average rates reflect the average of the exchange rates on the last day of each month during the relevant period. |
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• | demand for advertising may decrease both because consumers may reduce expenditures for our advertisers’ products and because advertisers may reduce advertising expenditures; and | ||
• | demand for publications, cable television, DTH satellite services, pay-per-view programming and other services and products may decrease because consumers may find it difficult to pay for these services and products. |
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• | inflation can adversely affect consumer purchasing power, thereby adversely affecting consumer and advertiser demand for our services and products; | ||
• | to the extent inflation exceeds our price increases, our prices and revenues will be adversely affected in “real” terms; and | ||
• | if the rate of Mexican inflation exceeds the rate of depreciation of the Peso against the U.S. Dollar, our U.S. Dollar-denominated sales will decrease in relative terms when stated in constant Pesos. |
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• | projections of operating revenues, net income (loss), net income (loss) per share, capital expenditures, dividends, capital structure or other financial items or ratios; | ||
• | statements of our plans, objectives or goals, including those relating to anticipated trends, competition, regulation and rates; | ||
• | our current and future plans regarding our Spanish-language horizontal Internet portal,EsMas.com; | ||
• | statements concerning our current and future plans regarding our investment in the Spanish television channel “La Sexta”; | ||
• | statements concerning our current and future plans regarding our gaming business; | ||
• | statements concerning our transactions with and involving Univision; | ||
• | statements concerning our recent series of transactions with The DIRECTV Group, Inc., or DIRECTV, and News Corporation, or News Corp.; | ||
• | statements about our future economic performance or that of Mexico or other countries in which we operate or have investments; and | ||
• | statements of assumptions underlying these statements. |
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Year Ended December 31,(1) | ||||||||||||||||
2003 | 2004 | 2005 | 2006 | |||||||||||||
(Millions of U.S. Dollars) | ||||||||||||||||
Capital expenditures(2) | U.S.$94.9 | U.S.$174.6 | U.S.$248.3 | U.S.$300.0 | ||||||||||||
Investments in DTH joint ventures(3) | 20.6 | 12.5 | — | — | ||||||||||||
Investment in OCEN(4) | 4.8 | — | — | — | ||||||||||||
Other acquisitions and investments(5)(6) | 85.5 | 29.3 | 69.4 | 272.4 | ||||||||||||
Total capital expenditures and investments | U.S.$205.8 | U.S.$216.4 | U.S.$317.7 | U.S.$572.4 | ||||||||||||
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(1) | Amounts in respect of some of the capital expenditures, investments and acquisitions we made in 2003, 2004 and 2005 were paid for in Mexican Pesos. These Mexican Peso amounts were translated into U.S. Dollars at the Interbank Rate in effect on the dates on which a given capital expenditure, investment or acquisition was made. As a result, U.S. Dollar amounts presented in the table immediately above are not comparable to: (i) data regarding capital expenditures set forth in “Key Information — Selected Financial Data,” which is presented in constant Pesos of purchasing power as of December 31, 2005 and, in the case of data presented in U.S. Dollars, is translated at a rate of Ps.10.6265 to one U.S. Dollar, the Interbank Rate as of December 31, 2005, and (ii) certain data regarding capital expenditures set forth under “Operating and Financial Review and Prospects — Results of Operations — Liquidity, Foreign Exchange and Capital Resources — Capital Expenditures, Acquisitions and Investments, Distributions and Other Sources of Liquidity.” | |
(2) | Reflects capital expenditures for property, plant and equipment, as well as general capital expenditures, in all periods presented. Also includes U.S.$17.4 million in 2003, U.S.$35.1 million in 2004, and U.S.$51.1 million in 2005 for the expansion and improvement of our cable business; and U.S.57.6 million in 2004 and U.S.$109.2 million in 2005 for the expansion and improvement of our SKY Mexico segment. | |
(3) | Includes investments made in the form of capital contributions and loans in all periods. | |
(4) | In 2002, we acquired a 40% stake in OCESA Entretenimiento, or OCEN, our live entertainment venture in Mexico, for U.S.$104.7 million, of which U.S.$37.7 million was paid in the first quarter of 2003. Additionally, in the first quarter of 2003, we made a capital contribution to OCEN of approximately U.S.$4.8 million. See “— Business Overview — Other Businesses — Sports and Show Business Promotions” and Note 2 to our year-end financial statements. | |
(5) | In 2003, we acquired Telespecialidades, a company which was owned by our controlling shareholders, for an aggregate amount of U.S.$83.0 million. Telespecialidades’s net assets at the time of acquisition consisted principally of Shares of our capital stock in the form of CPOs, which Shares were previously indirectly owned by our controlling shareholders, and tax loss carryforwards. Telespecialidades was merged into Televisa S.A. de C.V. on December 31, 2003. See “Major Shareholders and Related Party Transactions — The Principal Shareholders and Related Party Transactions — Related Party Transactions — Transactions and Arrangements With Affiliates and Related Parties of Our Directors, Officers and Major Shareholders.” Additionally, in 2003 and 2004, we made capital contributions in the aggregate amount of U.S.$2.5 million and U.S.$2.0 million, respectively, in our pay television joint venture with Univision, which operations commenced in the U.S. in the second quarter of 2003. In November 2005, we acquired Comtelvi, S. de R.L. de C.V. (“Comtelvi”) from a third party for an aggregate amount of U.S.$39.1 million. At the time of acquisition, Comtelvi had structured note investments and other financial instrument assets and liabilities, as well as tax losses of approximately Ps.3,311.5 million that were used by us in the fourth quarter of 2005. Additionally, in 2005 we made capital contributions of approximately U.S.$1.4 million (1.2 million Euros) to Gestora de Inversiones Audiovisuales La Sexta, S.A.U. (“La Sexta”), representing the 40% interest in our Spanish Television broadcasting venture, which commenced operations in Spain in March 2006. See “Information on the Company — Business Overview — Univision” and Note 2 to our year-end financial statements. | |
(6) | In the first quarter of 2006, we completed the acquisition of certain operating assets, consisting primarily of trademarks, intellectual property rights and other publishing assets owned by Editora Cinco, a publishing company in Mexico and Latin America, for an aggregate amount of approximately U.S.$15.0 million. In the second quarter of 2006, we acquired the minority interest in Innova that was formerly owned by Liberty Media for an amount of approximately U.S.$58.7 million to increase the interest in our Sky Mexico business to 58.7%. Our projected total investment in La Sexta for 2006 is approximately 84.2 million Euros (approximately U.S.$108.0 million). In addition, we estimate that we will invest approximately U.S.$90.7 million in connection with other potential investments and acquisitions of our different business segments for the year ending December 31, 2006. |
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• | offering high quality and exclusive programming, including rights in Mexico to our four over-the-air broadcast channels and other channels produced by our partners, as well as special events, such as reality shows, and games or sports programming we produce or with respect to which we have exclusive rights; | ||
• | capitalizing on our relationship with DIRECTV and local operators in terms of technology, distribution networks, infrastructure and cross-promotional opportunities; | ||
• | capitalizing on the low penetration of pay-television services in Mexico and elsewhere; and | ||
• | providing superior digital Ku-band DTH satellite services and emphasizing customer service quality. |
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• | continuing to offer high quality programming; | ||
• | upgrading its existing cable network into a broadband bidirectional network; | ||
• | switching its current analog subscribers to digital service in order to stimulate new subscriptions, substantially reduce piracy and offer new value-added services; | ||
• | increasing the penetration of its high-speed and bidirectional Internet access and other multimedia services as well as providing a platform to offer internet protocol, or IP, telephony services; and | ||
• | continuing the roll out of digital set-top boxes and the roll out, which began in the third quarter of 2005, of advanced digital set-top boxes which allow the transmission of high definition programming and recording capability. |
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• | a call option under which we may subscribe, at a price of 80.0 million Euros, a percentage of the capital stock of Imagina that will be determined as a result of the application of a formula related to the enterprise value of Imagina at the time of exrecise of the option by Televisa, | ||
• | an exclusivity period of up to 120 days to acquire up to 20% of the capital stock of Imagina, | ||
• | a right to match an offer from a third party to subscribe or acquire stock of Imagina for a period of 137 days after the exclusivity period ends, and | ||
• | a right of first refusal until June 30, 2011 to acquire a certain percentage of the capital stock of Imagina. |
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Wholly Owned | Wholly | Majority | Minority | |||||||||||||||||||||
Mexico City | Owned | Owned | Owned | Independent | Total | |||||||||||||||||||
Anchor Stations | Affiliates | Affiliates | Affiliates | Affiliates | Stations | |||||||||||||||||||
Channel 2 | 1 | 124 | 2 | — | 1 | 128 | ||||||||||||||||||
Channel 4 | 1 | — | — | — | — | 1 | ||||||||||||||||||
Channel 5 | 1 | 61 | — | — | 4 | 66 | ||||||||||||||||||
Channel 9 | 1 | 14 | — | — | 14 | 29 | ||||||||||||||||||
Subtotal | 4 | 199 | 2 | — | 19 | 224 | ||||||||||||||||||
Border Stations | — | 1 | — | — | — | 1 | ||||||||||||||||||
Local (Stations) Affiliates | — | 18 | — | 1 | 14 | 33 | ||||||||||||||||||
Total | 4 | 218 | 2 | 1 | 33 | 258 | ||||||||||||||||||
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January 2003 — December 2005
January 2003-December 2005
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Year Ended December 31, | ||||||||||||
2003(1) | 2004(1) | 2005(1) | ||||||||||
Prime time hours | 32.5 | % | 31.0 | % | 31.8 | % | ||||||
Weekday prime time hours | 36.5 | % | 32.9 | % | 36.2 | % | ||||||
Sign-on to sign-off hours | 30.9 | % | 29.9 | % | 30.3 | % |
(1) | Source: IBOPE Mexico national surveys. |
Year Ended December 31, | ||||||||||||
2003(1) | 2004(1) | 2005(1) | ||||||||||
Prime time hours | 18.3 | % | 19.6 | % | 17.4 | % | ||||||
Weekday prime time hours | 18.1 | % | 19.8 | % | 15.9 | % | ||||||
Sign-on to sign-off hours | 20.3 | % | 21.6 | % | 20.1 | % |
(1) | Source: IBOPE Mexico national surveys. |
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Year Ended December 31, | ||||||||||||
2003(1) | 2004(1) | 2005(1) | ||||||||||
Prime time hours | 8.0 | % | 6.6 | % | 6.0 | % | ||||||
Weekday prime time hours | 8.1 | % | 7.0 | % | 6.3 | % | ||||||
Sign-on to sign-off hours | 10.1 | % | 8.7 | % | 7.6 | % |
(1) | Source: IBOPE Mexico national surveys. |
Year Ended December 31, | ||||||||||||
2003(1) | 2004(1) | 2005(1) | ||||||||||
Prime time hours | 11.2 | % | 11.7 | % | 13.4 | % | ||||||
Weekday prime time hours | 9.2 | % | 9.9 | % | 10.6 | % | ||||||
Sign-on to sign-off hours | 10.5 | % | 11.0 | % | 12.2 | % |
(1) | Source: IBOPE Mexico national surveys. |
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• | enhanced programming services, including VOD services and video games; and | ||
• | IP telephony services. |
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• | a call option under which we may subscribe, at a price of 80 million Euros, a percentage of the capital stock of Imagina that will be determined as a result of the application of a formula related to the enterprise value of Afinia at the time of exercise of the option by Televisa, | ||
• | an exclusivity period of up to 120 days to acquire up to 20% of the capital stock of Imagina, | ||
• | a right to match an offer from a third party to subscribe or acquire stock of Imagina for a period of 137 days after the exclusivity period ends, and | ||
• | a right of first refusal until June 30, 2011 to acquire a certain percentage of the capital stock of Imagina. |
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• | Innova and DIRECTV Mexico entered into a purchase and sale agreement, pursuant to which Innova agreed to purchase DIRECTV Mexico’s subscriber list for two promissory notes with an aggregate original principal amount of approximately Ps.621.1 million; | ||
• | Innova and DIRECTV Mexico entered into a letter agreement which provided for cash payments to be made by Innova or DIRECTV Mexico based on the number of subscribers successfully migrating to Innova, the applicable sign-up fees for migrating subscribers, or certain migrated subscribers churning shortly after migration, among other specified payments under the agreement; | ||
• | Innova, Innova Holdings and News Corp. entered into an option agreement, pursuant to which News Corp. was granted options to acquire up to a 15% equity interest in each of Innova and Innova Holdings, dependent upon the number of subscribers successfully migrating to Innova; in exchange for the two promissory notes referred above that were delivered to DIRECTV Mexico; | ||
• | DIRECTV and News Corp. entered into a purchase agreement pursuant to which DIRECTV acquired (i) the right (which DIRECTV concurrently assigned to DTVLA) to purchase from News Corp. the options granted to News Corp. by Innova and Innova Holdings to purchase up to an additional 15% of the outstanding equity of each of such entities pursuant to the option agreement described above, and (ii) the right to acquire News Corp.’s 30% interest in Innova and Innova Holdings; | ||
• | DIRECTV and Liberty Media International, Inc., or Liberty Media, entered into a purchase agreement pursuant to which DIRECTV agreed to purchase all of Liberty Media’s 10% interest in Innova and Innova Holdings for U.S.$88 million in cash. DIRECTV agreed that we may purchase two-thirds (2/3) of any equity interest in Innova and Innova Holdings sold by Liberty Media; | ||
• | pursuant to the DTH agreement we entered into with News Corp., Innova, DIRECTV and DTVLA, with respect to certain DTH platforms owned or operated by News Corp. or DIRECTV or their affiliates and subject to certain restrictions, we have the right to require carriage of five of our channels on any such platform serving Latin America (including Puerto Rico but excluding Mexico, Brazil and countries in Central America), two of our channels on any such platform serving the United States or Canada, and one of our channels on any such platform serving areas other than the United States and Latin America; | ||
• | we, News Corp., Innova, DIRECTV and DTVLA entered into a DTH agreement that, among other things, governs the rights of the parties with respect to DTVLA’s announced shutdown of its Mexican DTH business, planned shutdown of its existing DTH business in certain countries in Central America, |
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the carriage of certain of our programming channels by Innova and other DTH platforms of DIRECTV, DTVLA, News Corp. and their respective affiliates, and the waiver and potential release of certain claims between certain of the parties; and | |||
• | we and Innova entered into a channel licensing agreement pursuant to which Innova will pay us a royalty fee to carry our over-the-air channels on its DTH service. |
• | we entered into a purchase and sale agreement with DIRECTV, pursuant to which, among other things, (i) DIRECTV acquired all of our direct equity interests in ServiceCo, (ii) DIRECTV agreed to purchase all of our indirect equity interests in MCOP, and (iii) DIRECTV has agreed to indemnify us for any and all losses arising out of our status as a partner in MCOP; | ||
• | DIRECTV also agreed to purchase each of News Corp.’s, Liberty Media’s and Globopar’s equity interests in TechCo (a U.S. partnership formed to provide technical services from a main uplink facility in Miami Lakes, Florida and a redundancy site in Port St. Luice, Florida), ServiceCo and MCOP; and | ||
• | PanAmSat Corporation, or PanAmSat, unconditionally released us from any and all obligations related to the MCOP transponder lease. |
• | DIRECTV Holdings exercised its right to acquire News Corp.’s 30% interest in Innova and DTVLA exercised the right to purchase the options granted to News Corp. by Innova and Innova Holdings to purchase up to an additional 12% of the outstanding equity of each of such entities pursuant to the previously disclosed option agreement; | ||
• | DTVLA exercised an option to purchase 12% of Innova and Innova Holdings which was based on the number of subscribers successfully migrating to Innova, by delivering to Innova and Innova Holdings the two promissory notes issued in connection with Innova’s purchase of DIRECTV Mexico’s subscriber list for cancellation in October 2004; | ||
• | DIRECTV Mexico made cash payments to Innova totaling approximately $2.7 million pursuant to a letter agreement entered into by both parties in October 2004 in connection with the purchase of the DIRECTV Mexico’s subscriber list. The payments were made due to certain ineligible subscribers, applicable sign-up costs, and other costs under the side letter; | ||
• | DIRECTV Holdings purchased all of Liberty Media’s 10% interest in Innova. As described below, we exercised the right to acquire two-thirds of this 10% equity interest acquired from Liberty Media; and | ||
• | we entered into an amended and restated guaranty with PanAmSat, pursuant to which the proportionate share of Innova’s transponder lease obligation guaranteed by us was to cover a percentage of the transponder lease obligations equal to our percentage ownership of Innova. As a result of our acquisition of two-thirds of the equity interests that DIRECTV acquired from Liberty Media; the guarantee has been readjusted to cover a percentage of the transponder lease obligations equal to our percentage ownership of Innova. |
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• | failure to construct broadcasting facilities within a specified time period; | ||
• | changes in the location of the broadcasting facilities or changes in the frequency assigned without prior governmental authorization; | ||
• | direct or indirect transfer of the concession, the rights arising therefrom or ownership of the broadcasting facilities without prior governmental authorization; | ||
• | transfer or encumbrance, in whole or in part, of the concession, the rights arising therefrom, the broadcasting equipment or any assets dedicated to the concessionaire’s activities, to a foreign government, company or individual, or the admission of any such person as a partner in the concessionaire’s business; | ||
• | failure to broadcast for more than 60 days without reasonable justification; | ||
• | any amendment to the bylaws of the concessionaire that is in violation of applicable Mexican law; and | ||
• | any breach to the terms of the concession title. |
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• | unauthorized interruption or termination of service; | ||
• | interference by the concessionaire with services provided by other operators; | ||
• | noncompliance with the terms and conditions of the public telecommunications concession; | ||
• | the concessionaire’s refusal to interconnect with other operators; | ||
• | loss of the concessionaire’s Mexican nationality; | ||
• | unauthorized assignment, transfer or encumbrance, in whole or in part, of the concession or any rights or assets; | ||
• | the liquidation or bankruptcy of the concessionaire; and | ||
• | ownership or control of the capital stock of the concessionaire by a foreign government. |
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• | the failure to use the concession within 180 days after it was granted; | ||
• | a declaration of bankruptcy of the concessionaire; | ||
• | failure to comply with the obligations or conditions specified in the concession; | ||
• | unlawful assignments of, or encumbrances on, the concession; or | ||
• | failure to pay to the government the required fees. |
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• | Raising the thresholds to make a concentration a reportable transaction. | ||
• | Empowering the Mexican Antitrust Commission to issue a waiting order before a reported transaction may be closed, if such order is issued within ten business days from the date the transaction is reported to the Antitrust Commission. | ||
• | Requiring the Mexican Antitrust Commission to rule upon a reported transaction that the filing party deems that it does not notoriously restrain competition (attaching the necessary evidence), within 15 business days from the filing date. |
• | An overreaching authority to determine whether competition, effective competition, market power and competition conditions in a specific market exist or not, either such determination is required under the antitrust law or if required under any other statute that requires a determination of market conditions. | ||
• | To issue binding opinions in competition matters whether required by specific statutes, if required by other federal authorities. Such opinions shall also be issued in connection with decrees, regulations, |
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governmental determinations and other governmental acts (such as public bid rules) which may have an anticompetitive effect. | |||
• | It must issue an opinion related to effective competition conditions in a specific market or to the market power of a given agent in a market. | ||
• | Issue an opinion related to the granting of concessions, licenses or permits or the transfer of equity interests in concessionaries or licensees, are to be obtained if so required by the relevant statues or the bid rules. | ||
• | The authority to perform visits to economic agents with the purpose of obtaining evidence of violations to the law, including the ability to obtain evidence of the incurrence of a vertical or horizontal restraint. In all cases, the Mexican Antitrust Commission must obtain a judicial subpoena in order to proceed with the visits. Any agent that is subject to such order is bound to allow such visits and to cooperate fully with the Mexican Antitrust Commission. |
Jurisdiction of | ||||||
Organization or | ||||||
Name of Significant Subsidiary | Incorporation | Percentage Ownership(1) | ||||
Corporativo Vasco de Quiroga, S.A. de C.V.(2)(3) | Mexico | 100.0 | % | |||
CVQ Espectáculos, S.A. de C.V.(2)(3) | Mexico | 100.0 | % | |||
Editora Factum, S.A. de C.V.(3)(4) | Mexico | 100.0 | % | |||
Empresas Cablevisión, S.A. de C.V.(3)(5) | Mexico | 51.0 | % | |||
Galavision DTH, S. de R.L. de C.V.(3)(6) | Mexico | 100.0 | % | |||
Editorial Televisa, S.A. de C.V.(3) (7) | Mexico | 100.0 | % | |||
Factum Mas, S.A. de C.V.(3) (8) | Mexico | 100.0 | % | |||
Sky DTH, S. de R.L. de C.V.(8) | Mexico | 100.0 | % | |||
Innova, S. de R.L. de C.V. (Innova).(9) | Mexico | 60.0 | % | |||
Grupo Distribuidoras Intermex, S.A. de C.V.(3)(10) | Mexico | 100.0 | % | |||
Campus América, S.A. de C.V.(11) | Mexico | 100.0 | % | |||
Television Holdings USA, LLC(11) | USA | 100.0 | % | |||
Sistema Radiópolis, S.A. de C.V.(3)(12) | Mexico | 50.0 | % | |||
Telesistema Mexicano, S.A. de C.V.(13) | Mexico | 100.0 | % | |||
G-Televisa-D, S.A. de C.V.(14) | Mexico | 100.0 | % | |||
Televisa, S.A. de C.V.(15) | Mexico | 100.0 | % | |||
Televisión Independiente de México, S.A. de C.V.(3)(13) | Mexico | 100.0 | % |
(1) | Percentage of equity owned by us directly or indirectly through subsidiaries or affiliates. | |
(2) | One of two direct subsidiaries through which we conduct the operations of our Other Businesses segment, excluding Internet operations. | |
(3) | While this subsidiary is not a significant subsidiary within the meaning of Rule 1-02(w) of Regulation S-X under the Securities Act, we have included this subsidiary in the table above to provide a more complete description of our operations. | |
(4) | Subsidiary through which we own equity interests in and conduct our cable television and Internet businesses. | |
(5) | Direct subsidiary through which we conduct the operating of our Cable Television business. For a description of América Móvil’s sale of its 49% equity interest in this business in April 2002, see “Information on the Company — Business Overview — Cable Television — Mexico City Cable System.” | |
(6) | Subsidiary through which we own equity interests in DTH joint ventures, excluding Innova. | |
(7) | Subsidiary through which we conduct the operations of our Publishing segment. | |
(8) | One of two subsidiaries through which we own our equity interest in Innova. |
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(9) | Variable interest entity through which we conduct the operations of our Sky Mexico segment. We currently own a 58.7% interest in Innova. | |
(10) | Direct subsidiary through which we conduct the operations of our Publishing Distribution segment. | |
(11) | One of two subsidiaries through which we own most of our equity interest in Univision. | |
(12) | Direct subsidiary through which we conduct the operations of our Radio segment. Since we hold a controlling 50% full voting stake in this subsidiary and have the right to elect a majority of the members of its Board of Directors, we will continue to consolidate 100% of the results of operations of this subsidiary in accordance with Mexican GAAP. See “Operating and Financial Review and Prospects — Results of Operations — Total Segment Results — Radio” and “Operating and Financial Review and Prospects — Results of Operations — Minority Interest.” | |
(13) | One of two direct subsidiaries through which we conduct the operations of our Television Broadcasting, Pay Television Networks and Programming Exports segments. | |
(14) | Indirect subsidiary through which we conduct certain operations of our Television Broadcasting segment. | |
(15) | Indirect subsidiary through which we conduct the operations of our Television Broadcasting, Pay Television Networks and Programming Exports segments. |
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Number of | ||||||
Operations | Properties | Location | ||||
Television and news activities | ||||||
Owned properties | 1 | San Diego, California | ||||
Leased properties | 5 | Madrid, Spain San Diego, California Miami, Florida Zug, Switzerland | ||||
Publishing activities | ||||||
Owned properties | 1 | Miami, Florida | ||||
Leased properties | 19 | Beverly Hills, California Miami, Florida New York, New York Medellín, Colombia Cali, Colombia Quito, Ecuador Lima, Perú Santiago, Chile Caracas, Venezuela Los Angeles, California Austin, Texas San Juan, Puerto Rico Guaynabo, Puerto Rico Bogotá, Columbia | ||||
Publishing distribution and other activities | ||||||
Owned properties | 7 | Bogotá, Colombia Cali, Colombia Baranquilla, Colombia Guayaquil, Ecuador Miami, Florida Lima, Perú | ||||
Leased properties | 8 | Quito, Ecuador Baranquilla, Colombia Bogotá, Colombia Medellín, Colombia Lima, Perú Buenos Aires, Argentina Panamá, Panamá Santiago, Chile |
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Year Ended | ||||||||||||
December 31,(1) | ||||||||||||
2003 | 2004 | 2005 | ||||||||||
Segment Net Sales | ||||||||||||
Television Broadcasting | 64.4 | % | 56.9 | % | 55.4 | % | ||||||
Pay Television Networks | 2.9 | 2.7 | 3.3 | |||||||||
Programming Exports | 6.8 | 6.4 | 5.6 | |||||||||
Publishing | 7.5 | 7.0 | 7.5 | |||||||||
Publishing Distribution | 7.5 | 5.2 | 1.2 | |||||||||
Sky Mexico(2) | — | 12.1 | 17.9 | |||||||||
Cable Television | 4.1 | 3.7 | 4.2 | |||||||||
Radio | 1.1 | 1.0 | 1.0 | |||||||||
Other Businesses | 5.7 | 5.0 | 3.9 | |||||||||
Total Segment Net Sales | 100.0 | % | 100.0 | % | 100.0 | % | ||||||
Intersegment Operations | (1.3 | ) | (2.4 | ) | (3.1 | ) | ||||||
Total Consolidated Net Sales | 98.7 | % | 97.6 | % | 96.9 | % | ||||||
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Year Ended | ||||||||||||
December 31,(1) | ||||||||||||
2003 | 2004 | 2005 | ||||||||||
Total Net Sales | ||||||||||||
Cost of sales | 54.7 | % | 50.6 | % | 45.4 | % | ||||||
Selling expenses | 7.2 | 7.5 | 8.2 | |||||||||
Administrative expenses | 6.0 | 5.6 | 5.7 | |||||||||
Operating income before depreciation and amortization | 32.1 | 36.3 | 40.7 | |||||||||
Total | 100.0 | % | 100.0 | % | 100.0 | % | ||||||
(1) | Certain segment data set forth in these tables may vary from certain data set forth in our year-end consolidated financial statements due to differences in rounding. The segment net sales and total segment net sales data set forth in this annual report reflect sales from intersegment operations in all periods presented. See Note 23 to our year-end financial statements. | |
(2) | Effective April 1, 2004, we began consolidating Sky Mexico, which is applicable under Mexican GAAP Bulletin A-8, “Supplementary Application of International Accounting Standards.” |
Year Ended December 31,(1) | ||||||||||||
2003 | 2004 | 2005 | ||||||||||
Millions of Pesos in purchasing power | ||||||||||||
as of December 31, 2005 | ||||||||||||
Segment Net Sales | ||||||||||||
Television Broadcasting | Ps. | 16,725.2 | Ps. | 17,671.9 | Ps. | 18,570.8 | ||||||
Pay Television Networks | 760.5 | 827.5 | 1,111.2 | |||||||||
Programming Exports | 1,771.9 | 1,981.2 | 1,875.9 | |||||||||
Publishing | 1,943.2 | 2,163.1 | 2,505.5 | |||||||||
Publishing Distribution(2) | 1,930.7 | 1,626.4 | 402.2 | |||||||||
Sky Mexico(3) | — | 3,758.3 | 5,986.5 | |||||||||
Cable Television | 1,072.3 | 1,165.5 | 1,405.1 | |||||||||
Radio | 271.0 | 305.6 | 344.7 | |||||||||
Other Businesses | 1,479.7 | 1,547.4 | 1,324.3 | |||||||||
Total Segment Net Sales | 25,954.5 | 31,046.9 | 33,526.2 | |||||||||
Intersegment Operations | (342.1 | ) | (755.7 | ) | (1,045.2 | ) | ||||||
Total Consolidated Net Sales | Ps. | 25,612.4 | Ps. | 30,291.2 | Ps. | 32,481.0 | ||||||
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Year Ended December 31,(1) | ||||||||||||
2003 | 2004 | 2005 | ||||||||||
Millions of Pesos in purchasing | ||||||||||||
power as of December 31, 2005 | ||||||||||||
Segment Operating Income (Loss) Before Depreciation and Amortization | ||||||||||||
Television Broadcasting | Ps. | 7,109.0 | Ps. | 8,018.8 | Ps. | 8,852.6 | ||||||
Pay Television Networks | 167.7 | 308.5 | 518.1 | |||||||||
Programming Exports | 541.3 | 756.1 | 668.7 | |||||||||
Publishing | 376.2 | 438.9 | 480.1 | |||||||||
Publishing Distribution | 9.4 | (26.2 | ) | 6.6 | ||||||||
Sky Mexico(3) | — | 1,383.2 | 2,516.8 | |||||||||
Cable Television | 327.6 | 368.4 | 489.6 | |||||||||
Radio | 24.4 | 32.8 | 52.2 | |||||||||
Other Businesses | (163.7 | ) | (132.1 | ) | (180.4 | ) | ||||||
Total Segment OIBDA(4) | 8,391.9 | 11,148.4 | 13,404.3 | |||||||||
Corporate Expenses(4) | (162.3 | ) | (161.2 | ) | (182.5 | ) | ||||||
Total Consolidated OIBDA | Ps. | 8,229.6 | Ps. | 10,987.2 | Ps. | 13,221.8 | ||||||
(1) | Certain segment data set forth in these tables may vary from certain data set forth in our year-end financial statements due to differences in rounding. The segment net sales and total segment net sales data set forth in this annual report reflect sales from intersegment operations in all periods presented. See Note 23 to our year-end financial statements. | |
(2) | Effective October 1, 2004, we changed our accounting treatment of net sales and cost of sales. We recognized sales as the marginal revenue from the products we distribute. | |
(3) | Effective April 1, 2004, we began consolidating Sky Mexico, in accordance with FIN 46, which is applicable under Mexican GAAP Bulletin A-8, “Supplementary Application of International Accounting Standards.” | |
(4) | The segment operating income (loss) before depreciation and amortization, or OIBDA, and total segment operating income before depreciation and amortization data set forth in this annual report do not reflect corporate expenses in any period presented. Total consolidated operating income before depreciation and amortization reflects corporate expenses in all periods presented. See Note 23 to our year-end financial statements. |
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Compared to the Year Ended December 31, 2004
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• | interest income; |
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• | interest expense, including the restatement of our UDI-denominated notes, as described under “— Liquidity, Foreign Exchange and Capital Resources — Indebtedness” and “— Liquidity, Foreign Exchange and Capital Resources — Interest Expense”; | ||
• | foreign exchange gain or loss attributable to monetary assets and liabilities denominated in foreign currencies (including gains or losses from derivative instruments); and | ||
• | gain or loss attributable to holding monetary assets and liabilities exposed to inflation. |
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• | a Ps.1,959.8 million increase in operating income; | ||
• | a Ps.178.5 million decrease in restructuring and non-recurring charges; | ||
• | a Ps.68.0 million decrease in other expense, net; | ||
• | a Ps.444.3 million decrease in income taxes; and | ||
• | a Ps.549.5 million decrease in cumulative loss effect of accounting changes, net. |
• | a Ps.215.4 million increase in integral cost of financing, net; | ||
• | a Ps.475.3 million decrease in equity in earnings of affiliates, net; and | ||
• | a Ps.844.5 million increase in minority interest. |
• | made aggregate capital expenditures for property, plant and equipment of approximately U.S.$248.3 million, which amount includes capital expenditures in the amount of U.S.$51.1 million and U.S.$109.2 million for the expansion and improvement of our Cable Television and Sky Mexico segments, respectively; | ||
• | invested a capital contribution of U.S.$25.0 million in Volaris, a new, low-cost-carrier airline with a concession to operate in Mexico, and made a capital contribution of U.S.$1.4 million related to our Spanish venture, La Sexta; and | ||
• | contributed Ps.5.0 million (nominal) to fund our seniority premium obligations. |
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Compared to the Year Ended December 31, 2003
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• | a Ps.669.8 million increase in interest expense, primarily as a result of an increase in the average amount of debt, resulting from the consolidation of Sky Mexico’s debt beginning in the second quarter of 2004; | ||
• | a Ps.305.4 million loss resulting from a net foreign exchange loss in 2004 compared to a net foreign exchange gain in 2003, primarily in connection with a negative hedge effect in 2004 that arose from a 0.68% appreciation of the Peso against the U.S. Dollar during 2004. This compares to a favorable hedge effect in 2003, resulting from a 7.27% depreciation of the Peso against the U.S. Dollar during the year ended December 31, 2003; and | ||
• | a Ps.28.0 million decrease in interest income, reflecting Sky Mexico’s capitalization in September 2003 of all amounts due to us in connection with certain financing provided for this joint venture, which was partially offset by an increase in interest income in connection with a higher average amount of temporary investments during 2004. |
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• | the reversal of previous reserves due to our release from our PAS 6B satellite transponder guarantee in connection with Sky Multi-Country Partners; | ||
• | the absence of equity loss of Sky Mexico of approximately Ps.215.4 million; | ||
• | a reduction in our equity loss of DTH TechCo Partners of Ps.119.8 million in 2004; and | ||
• | an increase in our equity income relating to our investment in Univision. |
• | a Ps.2,271.3 million increase in operating income; | ||
• | a Ps.306.0 million decrease in restructuring and non-recurring charges; | ||
• | a Ps.58.3 million decrease in other expense, net; | ||
• | a Ps.604.7 million increase in equity in earnings from affiliates; and | ||
• | a Ps.69.7 million decrease in loss from discontinued operations. |
• | the percentage that the Peso devalued or appreciated against the U.S. Dollar; | ||
• | the Mexican inflation rate; |
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• | the U.S. inflation rate; and | ||
• | the percentage change in Mexican GDP compared to the prior period. |
Year Ended December 31, | ||||||||||||
2003 | 2004 | 2005 | ||||||||||
Devaluation (appreciation) of the Mexican Peso as compared to the U.S. Dollar(1) | 7.3 | % | (0.7 | )% | (4.7 | )% | ||||||
Mexican inflation rate(2) | 4.0 | 5.2 | 3.3 | |||||||||
U.S. inflation rate | 1.9 | 3.3 | 3.4 | |||||||||
Increase in Mexican GDP(3) | 1.4 | 4.2 | 3.0 |
(1) | Based on changes in the Interbank Rates, as reported by Banamex, at the end of each period, which were as follows: Ps.10.464 per U.S. Dollar as of December 31, 2002; Ps.11.225 per U.S. Dollar as of December 31, 2003; Ps.11.149 per U.S. Dollar as of December 31, 2004; and Ps.10.6265 per U.S. Dollar as of December 31, 2005. | |
(2) | Based on changes in the NCPI from the previous period, as reported by the Mexican Central Bank, which were as follows: 102.9 in 2002; 107.0 in 2003; 112.5 in 2004; and 116.3 in 2005. | |
(3) | As reported by theInstituto Nacional de Estadística, Geografía e Informática, or INEGI, and, in the case of GDP information for 2003, 2004 and 2005 as estimated by INEGI. |
• | Advertising and other revenues.Inflation in Mexico adversely affects consumers. As a result, our advertising customers may purchase less advertising, which would reduce our advertising revenues, and consumers may reduce expenditures for our other products and services, including pay television services. | ||
• | U.S. Dollar-denominated revenues and operating costs and expenses.We have substantial operating costs and expenses denominated in U.S. Dollars. These costs are principally due to our activities in the United States, the costs of foreign-produced programming and publishing supplies and the leasing of satellite transponders. The following table sets forth our U.S. Dollar-denominated revenues and operating costs and expenses for 2003, 2004 and 2005: |
Year Ended December 31, | ||||||||||||
2003 | 2004 | 2005 | ||||||||||
(Millions of U.S. Dollars) | ||||||||||||
Revenues | U.S.$414 | U.S.$435 | U.S.$385 | |||||||||
Operating costs and expenses | 411 | 443 | 393 |
• | Depreciation and amortization expense.We restate our non-monetary Mexican and foreign assets to give effect to inflation. The restatement of these assets in periods of high inflation, as well as the devaluation of the Peso as compared to the U.S. Dollar, increases the carrying value of these assets, which in turn increases the related depreciation expense. |
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• | Integral cost of financing.The devaluation of the Peso as compared to the U.S. Dollar generates foreign exchange losses relating to our net U.S. Dollar-denominated liabilities and increases the Peso equivalent of our interest expense on our U.S. Dollar-denominated indebtedness. Foreign exchanges losses, derivatives used to hedge foreign exchange risk and increased interest expense increase our integral cost of financing. |
• | restatement of Mexican non-monetary assets (other than transmission rights, inventories and equipment of non-Mexican origin), non-monetary liabilities and shareholders’ equity using the NCPI; and | ||
• | restatement of all inventories at net replacement cost. |
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• | a Ps.2,234.6 million increase in operating income; and | ||
• | a Ps.112.8 million decrease in other expense, net. |
• | a Ps.973.6 million increase in income and assets taxes and employees’ profit sharing; | ||
• | a Ps.200.1 million increase in integral cost of financing, which was due primarily to an increase in foreign exchange loss; and | ||
• | a Ps.23.1 million increase in restructuring and non-recurring charges. |
• | a Ps.2,757.6 million increase in operating income; | ||
• | a Ps.557.6 million decrease in income and assets taxes and employees’ profit sharing; and |
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• | a Ps.557.1 million decrease in restructuring and non-recurring charges. |
• | a Ps.865.9 million increase in integral cost of financing, which was due primarily to an increase in interest expense and foreign exchange loss; and | ||
• | a Ps.142.8 million increase in other expense, net. |
• | a Ps.1,335.4 million increase in operating income; | ||
• | a Ps.337.4 million decrease in other expense, net; | ||
• | a Ps.237.1 million decrease in restructuring and non-recurring charges; and | ||
• | a Ps.24.8 million decrease in integral cost of financing, which was due primarily to an increase in interest income and a decrease in interest expense. |
• | make aggregate expenditures for property, plant and equipment of approximately U.S.$300.0 million, which amount includes capital expenditures in amount of U.S.$52.0 million, U.S.$90.0 million, U.S.$45.0 million and approximately U.S.$19 million for the expansion and improvements of our Cable Television segment, Sky Mexico segment and gaming business, and in-store television advertising systems for 19 Wal-Mart de México stores, respectively; and | ||
• | make aggregate investments of approximately U.S.$272.4 million, which amount includes investments of approximately U.S.$108.0 million, U.S.$58.7 million and U.S.$15.0 million related to La Sexta, two-thirds of the former Liberty Media's stake in Innova, and the acquisition of certain operating assets of a publishing company in Mexico and Latin America, respectively, as well as U.S.$90.7 million in connection with other potential investments and acquisitions of our different business segments. |
• | made aggregate capital expenditures for property, plant and equipment of approximately U.S.$248.3 million, which amount includes capital expenditures in the amount of U.S.$51.1 million and U.S.$109.2 million for the expansion and improvement of our Cable Television and Sky Mexico segments, respectively; | ||
• | invested a capital contribution of U.S.$25.0 million in Volaris, a new, low-cost-carrier airline with a concession to operate in Mexico, and made a capital contribution of U.S.$1.4 million related to our Spanish venture, La Sexta; and | ||
• | contributed Ps.5.0 million (nominal) to fund our seniority premium obligations. |
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• | made aggregate capital expenditures for property, plant and equipment of approximately U.S.$174.6 million, which amount includes capital expenditures in the amount of U.S.$35.1 million and U.S.$57.6 million for the expansion and improvement of our Cable Television and Sky Mexico segments, respectively; | ||
• | invested an aggregate of U.S.$12.5 million in our Latin America DTH joint ventures in the form of long-terms loans and/or capital contribution; and | ||
• | contributed Ps.69.9 million (nominal) to fund our seniority premium obligations. |
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Debt Outstanding(1) | ||||||||||||||||
December 31, 2005 | ||||||||||||||||
Description of Debt | Actual | Interest Rate(2) | Denomination | Maturity of Debt | ||||||||||||
Long-term debt | ||||||||||||||||
Series B Senior Notes(3) | Ps. | 57 | 11.875 | % | U.S. Dollars | 2006 | ||||||||||
8% Senior Notes(4)(5) | 802 | 8.0 | % | U.S. Dollars | 2011 | |||||||||||
8.5% Senior Notes(4)(6) | 3,188 | 8.5 | % | U.S. Dollars | 2032 | |||||||||||
6 5/8% Senior Notes(4)(7) | 6,376 | 6.625 | % | U.S. Dollars | 2025 | |||||||||||
Innova’s 9 3/8% Senior Notes(8) | 3,188 | 9.375 | % | U.S. Dollars | 2013 | |||||||||||
UDI-denominated notes | 941 | 8.15 | % | UDIs (Peso- Indexed) | 2007 | |||||||||||
Banamex loan(9) | 2,000 | 10.35 | % | Pesos | 2010 and 2012 | |||||||||||
Banamex loan(10) | 720 | 8.925 | % | Pesos | 2006-2008 | |||||||||||
Banamex loan(11) | 1,162 | 9.70 | % | Pesos | 2009 | |||||||||||
Other debt(12) | 44 | 5.61 | % | Various | 2006-2010 | |||||||||||
Total debt (including current maturities) | 18,478 | — | — | 13.80 years(13) | ||||||||||||
Less: current maturities | 341 | — | Various | December 2006 | ||||||||||||
Total long-term debt | Ps. | 18,137 | ||||||||||||||
(1) | U.S. Dollar-denominated debt is translated into Pesos at an exchange rate of Ps.10.6265 per U.S. Dollar, the Interbank Rate, as reported by Banamex, as of December 31, 2005. | |
(2) | Excludes additional amounts payable in respect of Mexican withholding taxes. See “Additional Information — Taxation — Mexican Taxes.” | |
(3) | Interest on the Series B Senior Notes is payable semi-annually. The Series B Notes bear interest at an effective rate of 12.49%. The Series B Senior Notes are redeemable by us in the event of certain changes in the law affecting the Mexican withholding tax treatment of certain payments we make on the Series B Senior Notes, as well as at our option in certain cases. See Note 8 to our year-end financial statements. | |
(4) | Interest is payable semi-annually on each of the 8.0% Senior Notes due 2011, the 8.5% Senior Notes due 2032 and the 6 5/8% Senior Notes due 2025. The 8.0% Senior Notes due 2011, the 8.5% Senior Notes due 2032 and the 6 5/8% Senior Notes due 2025 bear interest at an effective rate of 9.07%, 8.41%, 8.94% and 6.97%, respectively. The 8.0% Senior Notes due 2011, the 8.5% Senior Notes |
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due 2032 and the 6 5/8% Senior Notes due 2025 are redeemable by us in the event of certain changes in the law affecting the Mexican withholding tax treatment of certain payments we make in respect of these notes, as well as at our option in certain cases. See Note 8 to our year-end financial statements. | ||
(5) | Reflects the issuance of U.S.$300.0 million aggregate principal amount of 8.0% Senior Notes due 2011 issued on September 13, 2001. We applied the net proceeds from this issuance, together with cash on hand, to repay approximately U.S.$300.0 million of the U.S.$400.0 million of indebtedness then outstanding under our prior U.S.$400.0 million term loan facility. As described below, we registered substantially all of these notes through an exchange offer in March 2002. | |
(6) | Reflects the issuance of U.S.$300.0 million aggregate principal amount of 8.5% Senior Notes due 2032 issued on March 1, 2002. We applied a substantial portion of the net proceeds from this issuance to repay all of the U.S.$276.0 million of indebtedness then outstanding under our bridge loan facility. In July 2002, we registered all of our 8.5% Senior Notes due 2032 pursuant to an exchange offer. See Note 9 to our year-end financial statements. | |
(7) | Reflects the issuance of U.S.$400.0 million and U.S.$200.0 million aggregate principal amount of 6 5/8% Senior Notes due 2025 issued on March 18, 2005 and May 23, 2005, respectively. We applied the U.S.$400.0 million proceeds, together with cash on hand, to fund our tender offers for any or all of our U.S.$300.0 million aggregate principal amount outstanding of our 8.00% Senior Notes due 2011 and our Ps.3,839 million (equivalent to approximately U.S.$336.9 million) aggregate principal amount of 8.15% UDI-denominated Notes due 2007. The net proceeds of the U.S.$200.0 million issuance were used for general corporate purposes, including the prepayment of some of our company’s outstanding indebtedness. See Note 8 to our year-end financial statements. | |
(8) | In September 2003, Innova completed the offering of these U.S.$300.0 million Senior Notes, bearing an interest at a coupon rate of 9.375%, payable semi-annually. These securities are unsecured and unsubordinated indebtedness of Innova and contain certain restrictive covenants for Innova on additional indebtedness, liens, sales and leasebacks, restricted payments, asset sales, and certain mergers, consolidations and similar transactions. On April 25, 2006 Innova completed a cash tender offer to purchase any and all of its 9.375% Senior Notes, and 96.25% of the Notes were tendered at a price of 112.329, which represented a total amount of US$324.3 million that Innova paid in connection with the tender offer on April 28, 2006. Innova entered into two bank loans, both of them in Mexican pesos and guaranteed by us, in order to pay for the above transaction. Currently there are only US$11.3 million outstanding of Innova’s 9.375% Senior Notes, which Innova may, at its own option, redeem these Senior Notes, in whole or in part, at any time on or after September 19, 2008 at redemption prices from 104.6875% to 101.5625% between September 19, 2008 through September 18, 2011, or 100% commencing on September 19, 2011, plus accrued and unpaid interest, if any. | |
(9) | In October 2004, we entered into a long-term credit agreement with Banamex in the aggregate principal amount of Ps.2,000.0 million, which matures in 2010 (50%) and 2012 (50%). Interest on this loan is 10.35% per annum, and is payable on a monthly basis. The proceeds of this loan are intended to be used principally to prefund a portion of our debt maturing in August 2005. | |
(10) | In May 2003, we entered into a long-term credit agreement with Banamex for an aggregate principal amount of Ps.800.0 million, with two tranches of Ps.400.0 million each. The annual interest rate for the first tranche equals 9.35% plus additional basis points from 0 to 45 based on the maintenance of certain financial coverage ratios related to indebtedness (the “additional basis points”), and an annual interest rate for the second tranche equal to the Mexican interbank rate plus 40 basis points plus additional basis points. Interest due in connection with this credit agreement is payable on a 28-day basis. This indebtedness has two semi-annual maturities of Ps.40.0 million each in 2004, two semi-annual maturities of Ps.120.0 million each in 2006 and two quarterly maturities of Ps.240.0 million each in 2008. This credit agreement was subsequently amended to reflect a fixed annual interest rate of 8.50% plus additional basis points for the second tranche beginning in the third quarter of 2003. | |
(11) | In May 2004, we entered into a long-term credit agreement with Banamex for an aggregate principal amount of Ps.1,162.5 million, which matures in 2009. The annual interest rate of this indebtedness equals 9.70% and is payable on a monthly basis. | |
(12) | Includes outstanding indebtedness in the aggregate amount of Ps.44.0 million under the following bank loans and capital leases: |
• | Ps.1.0 million in capital lease obligations. These obligations bear interest at a variable annual rate between 13% and 17% and have maturities ranging from 2006 to 2009; and | ||
• | Ps.43.0 million in other bank loans, which are denominated in U.S. Dollars. These bank loans bear interest at a variable annual rate between 0.11 and 1.25 points above LIBOR and have maturities ranging from 2006 and 2010. |
(13) | Actual weighted average maturity of long-term debt as of December 31, 2005. |
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• | incur indebtedness; | ||
• | make dividend payments; | ||
• | issue and sell capital stock of restricted subsidiaries; and | ||
• | consummate mergers and consolidations, liquidations, dissolutions or transfers of assets. |
• | a total net debt/EBITDA ratio (as defined) not greater than 3.50 to 1.00; and |
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• | a EBITDA/cash interest ratio (as defined) not less than 1.50 to 1.00. |
Year Ended December 31,(1)(2) | ||||||||||||
2003 | 2004 | 2005 | ||||||||||
(Millions of U.S. Dollars) | ||||||||||||
Interest payable in U.S. Dollars | U.S.$ | 70.2 | U.S.$ | 110.0 | U.S.$ | 118.0 | ||||||
Amounts currently payable under Mexican withholding taxes(3) | 3.4 | 5.0 | 6.3 | |||||||||
Total interest payable in U.S. Dollars | U.S.$ | 73.6 | U.S.$ | 115.0 | U.S.$ | 124.3 | ||||||
Peso equivalent of interest payable in U.S. Dollars | Ps. | 882.8 | Ps. | 1,379.3 | Ps. | 1,377.7 | ||||||
Interest payable in Pesos | 461.2 | 608.1 | 725.0 | |||||||||
Restatement of UDI-denominated Notes due 2007 | 151.4 | 177.8 | 31.8 | |||||||||
Total interest expense(4) | Ps. | 1,495.4 | Ps. | 2,165.2 | Ps. | 2,134.5 | ||||||
(1) | U.S. Dollars are translated into Pesos at the rate prevailing when interest was recognized as an expense for each period and restated to Pesos in purchasing power as of December 31, 2005. | |
(2) | Interest expense in these periods includes amounts effectively payable in U.S. Dollars as a result of U.S. Dollar-Peso swaps. | |
(3) | See “Additional Information — Taxation — Mexican Taxes.” | |
(4) | Total interest expense amounts in these periods exclude capitalized and hedged interest expense. |
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Payments Due by Period | ||||||||||||||||||||
Less Than | ||||||||||||||||||||
12 Months | 12-36 Months | 36-60 Months | After 60 Months | |||||||||||||||||
January 1, 2006 to | January 1, 2007 to | January 1, 2009 to | Subsequent to | |||||||||||||||||
Total | December 31, 2006 | December 31, 2008 | December 31, 2010 | December 31, 2010 | ||||||||||||||||
(Thousands of U.S. Dollars) | ||||||||||||||||||||
Series B Senior Notes | U.S.$ | 5,343 | U.S.$ | 5,343 | U.S.$ | — | U.S.$ | — | U.S.$ | — | ||||||||||
8% Senior Notes | 75,484 | 3,533 | — | — | 71,951 | |||||||||||||||
8.5% Senior Notes | 300,000 | — | — | — | 300,000 | |||||||||||||||
6.625% Senior Notes | 600,000 | — | — | — | 600,000 | |||||||||||||||
Innova’s 9.375% Senior Notes | 300,000 | — | — | — | 300,000 | |||||||||||||||
UDI-denominated Notes | 88,559 | — | 88,559 | — | — | |||||||||||||||
Banamex loan II | 67,755 | 22,585 | 45,170 | — | — | |||||||||||||||
Banamex loan III | 109,393 | — | — | 109,393 | — | |||||||||||||||
Banamex loan IV | 188,209 | — | — | 94,104 | 94,105 | |||||||||||||||
Other debt | 4,089 | 577 | 921 | 2,591 | — | |||||||||||||||
Long-term debt | 1,738,832 | 32,038 | 134,650 | 206,088 | 1,366,056 | |||||||||||||||
Satellite transponder obligation | 118,810 | 7,115 | 16,922 | 21,274 | 73,499 | |||||||||||||||
Transmission rights(1) | 80,496 | 54,029 | 19,791 | 6,676 | — | |||||||||||||||
Total contractual obligations | U.S.$ | 1,938,138 | U.S.$ | 93,182 | U.S.$ | 171,363 | U.S.$ | 234,038 | U.S.$ | 1,439,555 | ||||||||||
(1) | This liability reflects our transmission rights obligations related to programming acquired or licensed from third party producers and suppliers, and special events, which are reflected for in our consolidated balance sheet within trade accounts payable (current liabilities) and other long-term liabilities. |
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Payments Due by Period | ||||||||||||||||||||
Less than | ||||||||||||||||||||
12 Months | 12-36 Months | 36-60 Months | After 60 Months | |||||||||||||||||
January 1, 2006 to | January 1, 2007 to | January 1, 2009 to | Subsequent to | |||||||||||||||||
Total | December 31, 2006 | December 31, 2008 | December 31, 2010 | December 31, 2010 | ||||||||||||||||
(Thousands of U.S. Dollars) | ||||||||||||||||||||
Capital expenditures commitments(1) | U.S.$ | 18,099 | U.S.$ | 18,099 | U.S.$ | — | U.S.$ | — | U.S.$ | — | ||||||||||
Guarantees(2) | 12,534 | — | 12,534 | — | — | |||||||||||||||
Other(3) | 11,056 | 11,056 | — | — | — | |||||||||||||||
Total contractual obligations | U.S.$ | 41,689 | U.S.$ | 29,155 | U.S.$ | 12,534 | U.S.$ | — | U.S.$ | — | ||||||||||
(1) | Our commitments for capital expenditures include U.S.$13,631, which are related to commitments to Sky Mexico projects. | |
(2) | In connection with the disposal of our investment in PanAmSat in 1997, we granted collateral to secure certain indemnification obligations. After the expiration of applicable tax statutes of limitations, the collateral will be reduced to a de minimis amount. The collateral agreement will terminate in approximately two years. | |
(3) | In 2001, we entered into a 50/50 programming joint venture with Endemol, an international content developer and producer for television and online platforms based in the Netherlands, to produce and develop content for television and the Internet. As of December 31, 2005, we have commitments to acquire from Endemol programming formats through this joint venture up to in the aggregate U.S.$11.1 million through 2006. |
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Name and Date of Birth | Principal Occupation | Business Experience | First Elected | |||
Emilio Azcárraga Jean (02/21/68) | Chairman of the Board, President and Chief Executive Officer and President of the Executive Committee of Grupo Televisa | Member of the Boards of Teléfonos de México, S.A. de C.V. and Banco Nacional de México, S.A. and former Vice Chairman of the Board of Univision | December 1990 | |||
In alphabetical order: | ||||||
Alfonso de Angoitia Noriega (01/17/62) | Executive Vice President and Member of the Executive Office of the Chairman and Member of the Executive Committee of Grupo Televisa | Former Chief Financial Officer of Grupo Televisa and former Alternate Member of the Board of Univision and Partner, Mijares, Angoitia, Cortés y Fuentes, S.C. (1994-1999) | April 1998 | |||
María Asunción Aramburuzabala Larregui (05/02/63) | Vice Chairwoman of the Board and Member of the Executive Committee of Grupo Modelo, S.A. de C.V. | Chief Executive Officer of Tresalia Capital, S.A. de C.V. and Member of the Boards of Grupo Financiero Banamex, S.A. de C.V., Banco Nacional de México, S.A. and América Móvil, S.A. de C.V. | July 2000 | |||
Pedro Aspe Armella (07/07/50) | Chairman of the Board and Chief Executive Officer of Protego Asesores, S.A. de C.V. | Member of the Boards of The McGraw-Hill Companies and Xignux and former Member of the Board of Vector Casa de Bolsa, S.A. de C.V. | April 2003 | |||
Julio Barba Hurtado (05/20/33) | Legal Advisor to the President, Prosecretary to the Board and the Executive Committee of Grupo Televisa and Secretary to the Audit Committee of Grupo Televisa | Former Legal Advisor to Televisa, S.A. de C.V. | December 1990 | |||
José Antonio Bastón Patiño (04/13/68) | Corporate Vice President of Television and Member of the Executive Committee of Grupo Televisa | Former Vice President of Operations of Grupo Televisa, former General Director of Programming of Grupo Televisa and former Member of the Board of Univision | April 1998 |
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Name and Date of Birth | Principal Occupation | Business Experience | First Elected | |||
Alberto Bailleres González (08/22/31) | President of Grupo Bal | Member of the Boards of Valores Mexicanos, Casa de Bolsa, S.A. de C.V., Desc., S.A. de C.V., Fomento Económico Mexicano, S.A. de C.V. (FEMSA), Grupo Financiero BBVA Bancomer, S.A. de C.V., Industrias Peñoles, S.A. de C.V., Grupo Nacional Provincial, S.A., Grupo Palacio de Hierro, S.A. de C.V., Profuturo GNP, S.A. de C.V., Aseguradora Porvenir GNP, S.A. de C.V. and President of the Board of Governors of the Instituto Tecnológico Autónomo de México, A.C. (ITAM) | April 2005 | |||
Manuel Jorge Cutillas Covani (03/01/32) | Director of Grupo Televisa | Member of the Board of Bacardi Limited and former Chairman of the Board of Bacardi Limited | April 1994 | |||
Carlos Fernández González (09/29/66) | Chief Executive Officer and Chairman of the Board of Grupo Modelo, S.A. de C.V. | Member of the Boards of Anheuser Busch Co., Grupo Financiero Santander Mexicano, S.A. de C.V. and Emerson Electric, Co. | July 2000 | |||
Bernardo Gómez Martínez (07/24/67) | Executive Vice President and Member of the Executive Office of the Chairman and Member of the Executive Committee of Grupo Televisa | Former President of the Mexican Chamber of Television and Radio Broadcasters and Deputy to the President of Grupo Televisa | April 1999 | |||
Claudio X. González Laporte (05/22/34) | Chairman of the Board and Chief Executive Officer of Kimberly-Clark de México, S.A. de C.V. | Member of the Boards of Kimberly-Clark Corporation, General Electric Co., Kellogg Company, Home Depot, Inc., Alfa, S.A. de C.V., Grupo Carso, S.A. de C.V., América Móvil, S.A. de C.V. and Investment Company of America, and former President of the Mexican Business Council | April 1997 | |||
Roberto Hernández Ramírez (03/24/42) | Chairman of the Board of Banco Nacional de México, S.A. | Former Chief Executive Officer of Banco Nacional de México, S.A. and Member of the Boards of Citigroup, Inc., Gruma, S.A. de C.V., Grupo Financiero Banamex Accival, S.A. de C.V., and the Nature Conservancy and World Monuments Fund | April 1992 | |||
Enrique Krauze Kleinbort (09/17/47) | Chief Executive Officer of Editorial Clío Libros y Videos, S.A. de C.V. | General Director of Editorial Clío Libros y Videos, S.A. de C.V. | April 1996 |
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Name and Date of Birth | Principal Occupation | Business Experience | First Elected | |||
Germán Larrea Mota Velasco (10/26/53) | Chairman of the Board, Chief Executive Officer and President of Grupo México, S.A. de C.V. | Chairman of the Board and Chief Executive Officer of Asarco Incorporated, Southern Peru Copper Corporation and Grupo Ferroviario Mexicano, S.A. de C.V. and former Member of the Boards of Banco Nacional de México, S.A. and Bolsa Mexicana de Valores, S.A. de C.V. | April 1999 | |||
Gilberto Pérezalonso Cifuentes (03/06/43) | Chief Executive Officer of Corporación GEO, S.A. de C.V. and Member of the Audit Committee of Grupo Televisa | Member of the Boards of Grupo Gigante, S.A. de C.V., Southern Peru Copper Corporation and Afore Banamex, S.A. | April 1998 | |||
Carlos Slim Domit (02/28/67) | Chairman of the Board of Grupo Carso, S.A. de C.V. and Teléfonos de México, S.A. de C.V. and President of Grupo Sanborns, S.A. de C.V. | Vice Chairman of America Telecom, S.A. de C.V. and Member of the Boards of Grupo Condumex, S.A. de C.V., Phillip Morris Mexico, S.A. de C.V. and Sears Roebuck de Mexico, S.A. de C.V. | April 2004 | |||
Alejandro Quintero Iñiguez (02/11/50) | Corporate Vice President of Sales and Marketing and Member of the Executive Committee of Grupo Televisa | Shareholder of Grupo TV Promo, S.A. de C.V. and former Advisor to former Mexican President Ernesto Zedillo | April 1998 | |||
Fernando Senderos Mestre (03/03/50) | Chairman of the Board and Chief Executive Officer of Desc, S.A. de C.V. | Member of the Boards of Teléfonos de México, S.A. de C.V., Alfa, S.A. de C.V., Kimberly Clark de México, S.A. de C.V. and Industrias Peñoles, S.A. de C.V. | April 1992 | |||
Enrique F. Senior Hernández (08/03/43) | Executive Vice President and Managing Director of Allen & Company Incorporated | Member of the Board of Pics Retail Networks and Member of the Board of Coca Cola Femsa and Member of the Board of Cinemark | April 2001 | |||
Lorenzo H. Zambrano Treviño (03/27/44) | Chairman of the Board and Chief Executive Officer of Cemex, S.A. de C.V. | Member of the Boards of Alfa, S.A. de C.V., Empresas ICA, Sociedad Controladora, S.A. de C.V., Fomento Económico Mexicano, S.A. de C.V. and Vitro, S.A. de C.V. | April 1999 |
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Name and Date of Birth | Principal Occupation | Business Experience | First Elected | |||
Alternate Directors: | ||||||
In alphabetical order: | ||||||
Herbert Allen III (06/08/67) | Executive Vice President and Managing Director of Allen & Company Incorporated | Member of the Boards of Coca Cola Femsa, S.A. de C.V., Convera-Enterprise Software and Global Education Network | April 2002 | |||
Juan Pablo Andrade Frich (06/05/64) | Asset Manager of Tresalia Capital, S.A. de C.V. and Member of the Executive and Audit Committee of Grupo Televisa | Former Member of the Board of Televicentro and Member of the Board of Empresas Cablevisión, S.A. de C.V. | July 2000 | |||
Lucrecia Aramburuzabala Larregui (03/29/67) | Private Investor | Employee of Tresalia Capital, S.A. de C.V. and Member of the Board of Grupo Modelo, S.A. de C.V. and former Member of the Board of Televicentro | July 2000 | |||
Félix Araujo Ramírez (03/20/51) | Vice President of Telesistema Mexicano | Former Private Investor in Promoción y Programación de la Provincia, S.A. de C.V., Promoción y Programación del Valle de Lerma, S.A. de C.V., Promoción y Programación del Sureste, S.A. de C.V., Teleimagen Profesional del Centro, S.A. de C.V. and Estrategia Satélite, S.C. | April 2002 | |||
Maximiliano Arteaga Carlebach (12/06/42) | Vice President of Operations, Technical Service and Television Production of Grupo Televisa | Former Vice President of Operations — Televisa Chapultepec, former Vice President of Administration — Televisa San Angel and Chapultepec and former Vice President of Administration and Finance of Univisa, Inc. | April 2002 | |||
Joaquín Balcárcel Santa Cruz (01/04/69) | Vice President — Legal and General Counsel of Grupo Televisa | Former Director, Legal Department and Vice President — Legal General Counsel Television Division of Grupo Televisa and former associate at Martínez, Algaba, Estrella, De Haro y Galván-Duque, S.C. | April 2000 | |||
Juan Fernando Calvillo Armendáriz (12/27/41) | Vice President of Internal Auditing and Executive Secretary of the Audit Committee of Grupo Televisa | Member of the Board of Private Banking of Vanguardia, S.A. de C. V. and former Member of the Boards of Grupo Financiero Serfin, S.A. de C.V. and Serpaprosa, S.A. de C.V. | April 2002 |
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Name and Date of Birth | Principal Occupation | Business Experience | First Elected | |||
Rafael Carabias Príncipe (11/13/44) | Chief Financial Officer of Gestora de Inversiones Audiovisuales La Sexta, S.A. | Former Member of the Boards of Promecap, S.C. and Grupo Financiero del Sureste, S.A., former Director of Corporate Finance of Scotiabank Inverlat, S.A. and former Vice President of Administration of Grupo Televisa | April 1999 | |||
Francisco José Chévez Robelo (07/03/29) | Retired Partner of Chévez, Ruiz, Zamarripa y Cía, S.C. and Chairman of the Audit Committee of Grupo Televisa | Member of the Board of Empresas Cablevisión, S.A. de C.V. and former Partner of Chévez, Ruiz, Zamarripa y Cía, S.C. | April 2003 | |||
José Luis Fernández Fernández (05/18/59) | Partner of Chévez, Ruiz, Zamarripa y Cia., S.C. | Former Member of the Boards of Alexander Forbes, S.A. de C.V. and Afore Bital, S.A. | April 2002 | |||
Salvi Folch Viadero (08/16/67) | Chief Financial Officer of Grupo Televisa | Former Vice President of Financial Planning of Grupo Televisa, Chief Executive Officer and Chief Financial Officer of Comercio MAS, S.A. de C.V. and former Vice Chairman of Banking Supervision of the National Banking and Securities Commission | April 2002 | |||
Leopoldo Gómez González Blanco (04/06/59) | Vice President of Newscasts of Grupo Televisa | Former Director of Information to the President of Grupo Televisa | April 2003 | |||
José Heredia Bretón (06/16/61) | Director of Sociedad de Inversión de Capitales of Grupo Financiero Inbursa, S.A. | Member of the Board of Banco Inbursa, S.A. , Member of the Board of Aseguradora Inbursa, S.A. de C.V. and former Director of Retail Business of Grupo Financiero Inbursa, S.A. | April 2004 | |||
José Antonio Lara del Olmo (09/02/70) | Vice President — Tax of Grupo Televisa | Former Tax Director of Grupo Televisa and former Associate of Chévez, Ruiz, Zamarripa y Cía, S.C. | April 2003 | |||
Jorge Lutteroth Echegoyen (01/24/53) | Vice President Controller of Grupo Televisa | Former Senior Partner of Coopers & Lybrand Despacho Roberto Casas Alatriste, S.C. | April 2000 | |||
Alberto Montiel Castellanos (11/22/45) | Director of Montiel Font y Asociados, S.C. and Member of the Audit Committee of Grupo Televisa | Former Tax Director of Wal-Mart de México, S.A. de C.V. | April 2002 | |||
Raúl Morales Medrano (05/12/70) | Partner of Chévez, Ruiz, Zamarripa y Cia, S.C. | Former Senior Manager of Chévez, Ruiz, Zamarripa y Cia, S.C. | April 2002 |
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Name and Date of Birth | Principal Occupation | Business Experience | First Elected | |||
Guillermo Nava Gómez Tagle (08/27/43) | Vice President of Administration — Televisa San Angel | Former Vice President of Corporate Finance of Grupo Televisa, former Vice President of Citibank — Colombia and former Finance Director of CIFRA | April 1999 | |||
Alexandre Moreira Penna Da Silva (12/25/54) | Chief Executive Officer of Innova | Former Vice President of Corporate Finance of Grupo Televisa and former Managing Director of JPMorgan Chase | April 2002 |
• | one of our employees or managers; | ||
• | a controlling shareholder, in our case, the beneficiaries of the Shareholder Trust; | ||
• | a partner or employee of a company which provides advisory services to us or any company which is part of the same economic group as we are, that receives 10% or more of its income from us; | ||
• | a significant client, supplier, debtor or creditor, or member of the Board or executive officer of any such entities; | ||
• | an employee of any association, foundation, or partnership that receives at least 5% of its total donations from us; or | ||
• | any high level executive officer of a corporation in which one of our high level executives is a member of the Board of Directors of that corporation. |
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• | prepare an annual report regarding its activities for submission to the Board and to our shareholders at our annual shareholders’ meeting; | ||
• | render an opinion as to transactions and arrangements with related parties, which must be approved by our Board of Directors; and | ||
• | propose independent experts to render opinions in connection with transactions that deviate from our ordinary course of business, and which involve, among other things, (i) a related party, (ii) any purchase or sale of 10% or more of our assets, (iii) the grant by us of guarantees in an amount or amounts exceeding 30% of our assets or (iv) other transactions representing more than 1% of our assets. |
Name and Date of Birth | Current Position | Business Experience | First Appointed | |||
Emilio Azcárraga Jean (02/21/68) | Chairman of the Board, President and Chief Executive Officer and President of the Executive Committee of Grupo Televisa | Member of the Boards of Teléfonos de México, S.A. de C.V. and Banco Nacional de México, S.A. and former Vice Chairman of the Board of Univision | March 1997 |
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Name and Date of Birth | Current Position | Business Experience | First Appointed | |||
In alphabetical order: | ||||||
Alfonso de Angoitia Noriega (01/17/62) | Executive Vice President and Member of the Executive Office of the Chairman and Member of the Executive Committee of Grupo Televisa | Former Chief Financial Officer of Grupo Televisa, Member of the Board and of the Executive Committee of Grupo Televisa, former Alternate Member of the Board of Univision and Partner, Mijares, Angoitia, Cortés y Fuentes, S.C. (1994-1999) | January 2004 | |||
Félix José Araujo Ramírez (03/20/51) | Vice President of Telesistema Mexicano | Former Private Investor in Promoción y Programación de la Provincia, S.A. de C.V., Promoción y Programación del Valle de Lerma, S.A. de C.V., Promoción y Programación del Sureste, S.A. de C.V., Teleimagen Profesional del Centro, S.A. de C.V. and Estrategia Satélite, S.C. | January 1993 | |||
Maximiliano Arteaga Carlebach (12/06/42) | Vice President of Operations, Technical Service and Television Production of Grupo Televisa | Former Vice President of Operations — Televisa Chapultepec, former Vice President of Administration — Televisa San Angel and Chapultepec and former Vice President of Administration and Finance of Univisa, Inc. | March 2002 | |||
José Antonio Bastón Patiño (04/13/68) | Corporate Vice President of Television of Grupo Televisa | Member of the Board and of the Executive Committee of Grupo Televisa, former Vice President of Operations of Grupo Televisa, former General Director of Programming of Grupo Televisa and former Member of the Board of Univision | February 2001 | |||
Jean Paul Broc Haro (08/08/62) | Chief Executive Officer of Cablevisión | Former General Manager of Pay Television Networks of Grupo Televisa | February 2003 | |||
Salvi Folch Viadero (08/16/67) | Chief Financial Officer of Grupo Televisa | Former Vice President of Financial Planning of Grupo Televisa, Chief Executive Officer and Chief Financial Officer of Comercio MAS, S.A. de C.V. and former Vice Chairman of Banking Supervision of the National Banking and Securities Commission | January 2004 |
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Name and Date of Birth | Current Position | Business Experience | First Appointed | |||
Bernardo Gómez Martínez (07/24/67) | Executive Vice President and Member of the Executive Office of the Chairman and Member of the Executive Committee of Grupo Televisa | Former Deputy to the President of Grupo Televisa, member of the Board and of the Executive Committee of Televisa and former President of the Mexican Chamber of Television and Radio Broadcasters | January 2004 | |||
Eduardo Michelsen Delgado (03/03/71) | Chief Executive Officer of Editorial Televisa | Former General Director —Grupo Semanaand former Project Director — McKinsey & Co. | January 2002 | |||
Jorge Eduardo Murguía Orozco (01/25/50) | Vice President of Production of Grupo Televisa | Former Administrative Vice President and former Director of Human Resources of Televisa | March 1992 | |||
Alejandro Quintero Iñiguez (02/11/50) | Corporate Vice President of Sales and Marketing of Grupo Televisa | Member of the Board and of the Executive Committee of Grupo Televisa, Shareholder and Member of the Board of Grupo TV Promo, S.A. de C.V. and former advisor to former Mexican President Ernesto Zedillo | April 1998 | |||
Raúl Rodríguez González (06/20/59) | Chief Executive Officer Sistema Radiópolis | Former Media Advisor of Grupo Prisa and former Chief Executive Officer of Gerencia de Medios, S.A. | January 2002 | |||
Alexandre Moreira Penna Da Silva (12/25/54) | Chief Executive Officer of Innova | Former Vice President of Corporate Finance of Grupo Televisa and former Managing Director of JPMorgan Chase | January 2004 |
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Year Ended December 31, | ||||||||||||
2003 | 2004 | 2005 | ||||||||||
Total number of employees | 12,284 | 14,140 | 15,076 | |||||||||
Category of activity: | ||||||||||||
Employees | 12,248 | 14,104 | 15,042 | |||||||||
Executives | 36 | 36 | 34 | |||||||||
Geographic location: | ||||||||||||
Mexico | 10,912 | 12,769 | 13,680 | |||||||||
Latin America (other than Mexico) | 1,020 | 965 | 954 | |||||||||
U.S | 342 | 398 | 435 | |||||||||
Spain | 10 | 8 | 7 |
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Aggregate | ||||||||||||||||||||||||||||||||||||
Percentage of | ||||||||||||||||||||||||||||||||||||
Share Beneficially Owned(1)(2) | Outstanding | |||||||||||||||||||||||||||||||||||
A Shares | B Shares | D Shares | L Shares | Shares | ||||||||||||||||||||||||||||||||
Percentage | Percentage | Percentage | Percentage | Beneficially | ||||||||||||||||||||||||||||||||
Identity of Owner | Number | of Class | Number | of Class | Number | of Class | Number | of Class | Owned | |||||||||||||||||||||||||||
Azcárraga Trust(3) | 52,991,825,693 | 42.90 | % | 67,814,604 | 0.11 | % | 107,886,870 | 0.12 | % | 107,886,870 | 0.12 | % | 14.65 | % | ||||||||||||||||||||||
Inbursa Trust(3) | 1,657,549,900 | 1.34 | % | 1,458,643,912 | 2.46 | % | 2,320,569,860 | 2.57 | % | 2,320,569,860 | 2.57 | % | 2.13 | % | ||||||||||||||||||||||
Investor Trust(3) | — | 0.00 | % | — | 0.00 | % | — | 0.00 | % | — | 0.00 | % | 0.00 | % | ||||||||||||||||||||||
Morgan Stanley Investment Management Inc.(4) | 3,435,215,250 | 2.8 | % | 3,022,989,420 | 5.1 | % | 4,809,301,350 | 5.3 | % | 4,809,301,350 | 5.3 | % | 4.4 | % | ||||||||||||||||||||||
MFS Investment Management(5) | 3,266,224,500 | 2.6 | % | 2,874,277,560 | 4.9 | % | 4,572,714,300 | 5.1 | % | 4,572,714,300 | 5.1 | % | 4.2 | % |
(1) | Unless otherwise indicated, the information presented in this section is based on the number of shares authorized, issued and outstanding as of May 31, 2006. The number of shares issued and outstanding for legal purposes as of May 31, 2006 was 64,551,410,550 series A Shares, 56,805,241,284 series B Shares, 90,371,974,770 series D Shares and 90,371,974,770 series L Shares, in the form of CPOs, and an additional 58,926,613,375 series A Shares, 2,357,207,692 series B Shares, 238,595 series D Shares and 238,595 series L Shares not in the form of CPOs. For financial reporting purposes under Mexican GAAP only, the number of shares authorized, issued and outstanding as of May 31, 2006 was 61,683,238,475 series A Shares, 54,281,249,858 series B Shares, 86,356,533,865 series D Shares and 86,356,533,865 series L Shares in the form of CPOs, and an additional 52,915,848,965 series A Shares, 186,537 series B Shares, 238,541 series D Shares and 238,541 series L Shares not in the form of CPOs. The number of shares authorized, issued and outstanding for financial reporting purposes under Mexican GAAP as of May 31, 2006 does not include: (i) 38,558,047 CPOs and an additional 516,887,975 series A Shares, 20,675,534 series B Shares, 25 series D Shares and 25 series L Shares not in the form of CPOs acquired by one of our subsidiaries, Televisa, S.A. de C.V., substantially all of which are currently held by the trust created to implement our stock purchase plan; and (ii) 76,168,836 CPOs and an additional 5,493,876,435 series A Shares, 2,336,345,621 series B Shares, 29 series D Shares and 29 series L Shares not in the form of CPOs acquired by the trust we created to implement our long-term retention plan. See Notes 2 and 12 to our year-end financial statements. | |
(2) | Except indirectly through the Shareholder Trust, none of our directors and executive officers currently beneficially owns more than 1% of our outstanding A Shares, L Shares or D Shares. See “Directors, Senior Management and Employees — Share Ownership of Directors and Officers.” This information is based on information provided by directors and executive officers. | |
(3) | For a description of the Shareholder Trust, see “— The Major Shareholders” below. | |
(4) | Based solely on information included in the Report on Form 13F filed on March 31, 2006 by Morgan Stanley Investment Management, Inc. | |
(5) | Based solely on information included in the Report on Form 13F filed on March 31, 2006 by MFS Investment Management. |
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• | News Corp. contributed to Innova an account receivable of U.S.$15 million owed to News Corp. by Sky DTH, S. de R.L. de C.V., or Sky DTH; | ||
• | We assigned to Sky DTH an account receivable of U.S.$15 million owed to us by Innova; and | ||
• | Innova, Innova Holdings, News Corp., Liberty Media and Sky DTH agreed that the obligation owed by Innova to Sky DTH and the obligation owed by Sky DTH to Innova would be set off against each other and cancelled. |
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Nominal Pesos per CPO(1) | ||||||||
High | Low | |||||||
2001 | Ps. | 25.90 | Ps. | 12.63 | ||||
2002 | Ps. | 22.31 | Ps. | 12.44 | ||||
2003 | Ps. | 23.56 | Ps. | 12.63 | ||||
First Quarter | 15.64 | 12.63 | ||||||
Second Quarter | 18.71 | 13.75 | ||||||
Third Quarter | 21.71 | 17.53 | ||||||
Fourth Quarter | 23.56 | 19.80 | ||||||
December | 23.41 | 21.18 | ||||||
2004 | Ps. | 34.93 | Ps. | 22.22 | ||||
First Quarter | 26.35 | 22.22 | ||||||
Second Quarter | 26.74 | 22.73 | ||||||
Third Quarter | 30.15 | 24.82 | ||||||
Fourth Quarter | 34.93 | 30.24 | ||||||
December | 34.86 | 32.71 | ||||||
2005 | Ps. | 44.13 | Ps. | 29.20 | ||||
First Quarter | 36.27 | 31.67 | ||||||
Second Quarter | 34.27 | 29.20 | ||||||
Third Quarter | 39.23 | 33.40 | ||||||
Fourth Quarter | 44.13 | 36.51 | ||||||
December | 44.13 | 41.67 | ||||||
2006 (through June 27, 2006) | Ps. | 49.72 | Ps. | 37.67 | ||||
First Quarter | 44.96 | 40.49 | ||||||
January | 44.96 | 42.30 | ||||||
February | 44.24 | 41.32 | ||||||
March | 43.48 | 40.49 | ||||||
Second Quarter (through June 27, 2006) | 49.72 | 37.67 | ||||||
April | 48.37 | 43.16 | ||||||
May | 49.72 | 43.12 | ||||||
June (through June 27, 2006) | 43.49 | 37.67 |
(1) | Source: Mexican Stock Exchange. |
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U.S. Dollars per GDS(1) | ||||||||
High | Low | |||||||
2001 | U.S.$ | 13.375 | U.S.$ | 6.7075 | ||||
2002 | U.S.$ | 12.1625 | U.S.$ | 6.075 | ||||
2003 | U.S.$ | 10.5675 | U.S.$ | 5.815 | ||||
First Quarter | 7.4875 | 5.815 | ||||||
Second Quarter | 8.8625 | 6.4025 | ||||||
Third Quarter | 9.9625 | 8.3875 | ||||||
Fourth Quarter | 10.5675 | 8.7975 | ||||||
December | 10.3 | 9.4 | ||||||
2004 | U.S.$ | 15.6625 | U.S.$ | 9.8075 | ||||
First Quarter | 11.835 | 10.02 | ||||||
Second Quarter | 11.915 | 9.8075 | ||||||
Third Quarter | 13.225 | 10.8975 | ||||||
Fourth Quarter | 15.6625 | 13.31 | ||||||
December | 15.6625 | 14.3825 | ||||||
2005 | U.S.$ | 20.775 | U.S.$ | 13.1875 | ||||
First Quarter | 16.39 | 14.125 | ||||||
Second Quarter | 15.2375 | 13.1875 | ||||||
Third Quarter | 18.165 | 15.5825 | ||||||
Fourth Quarter | 20.775 | 16.7025 | ||||||
December | 20.775 | 19.935 | ||||||
2006 (through June 27, 2006) | US$ | 22.87 | US$ | 16.38 | ||||
First Quarter | 21.3475 | 18.77 | ||||||
January | 21.3475 | 20.0275 | ||||||
February | 21.085 | 19.615 | ||||||
March | 19.90 | 18.77 | ||||||
Second Quarter (through June 27, 2006) | 22.87 | 16.38 | ||||||
April | 21.86 | 19.86 | ||||||
May | 22.87 | 19.07 | ||||||
June (through June 27, 2006) | 19.36 | 16.38 |
(1) | Source: NYSE. |
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• | a minimum number of years of operating history; | ||
• | a minimum financial condition; | ||
• | a minimum number of shares or CPOs to be publicly offered to public investors; | ||
• | a minimum price for the securities to be offered; | ||
• | a minimum of 15% of the capital stock placed among public investors; | ||
• | a minimum of 200 holders of shares or of shares represented by CPOs, who are deemed to be public investors under the General CNBV Rules, upon the completion of the offering; | ||
• | the following distribution of the securities offered pursuant to an offering in Mexico: (i) at least 50% of the total number of securities offered must be placed among investors who acquire less than 5% of the total number of securities offered; and (ii) no investor may acquire more than 40% of the total number of securities offered; and | ||
• | complied with certain corporate governance requirements. |
• | a minimum financial condition; | ||
• | minimum operating conditions, including a minimum number of trades; | ||
• | a minimum trading price of its securities; | ||
• | a minimum of 12% of the capital stock held by public investors; | ||
• | a minimum of 100 holders of shares or of shares represented by CPOs who are deemed to be public investors under the General CNBV Rules; and | ||
• | complied with certain corporate governance requirements. |
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• | the entering into or termination of joint venture agreements or agreements with key suppliers; | ||
• | the creation of new lines of businesses or services; | ||
• | significant deviations in expected or projected operating performance; | ||
• | the restructuring or payment of significant indebtedness; | ||
• | material litigation or labor conflicts; | ||
• | changes in dividend policy; | ||
• | the commencement of any insolvency, suspension or bankruptcy proceedings; | ||
• | changes in the directors; and | ||
• | any other event that may have a material adverse effect on the results, financial condition or operations of the relevant issuer. |
• | if the issuer does not adequately disclose a material event; or | ||
• | upon price or volume volatility or changes in the offer or demand in respect of the relevant securities, which are not consistent with the historic performance of the securities and could not be explained solely by the information made publicly available under the General CNBV Rules. |
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• | established a Board with at least five and not more than 20 members and alternate members, of which 25% must qualify as “independent directors” under Mexican law; | ||
• | adopted specified corporate governance measures, which require us to establish, among other things, an audit committee, as well as more stringent procedures for the approval of transactions and arrangements with related parties and extraordinary corporate transactions; and | ||
• | provide additional protections for minority shareholders. |
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• | members of a listed issuer’s board of directors, | ||
• | shareholders controlling 10% or more of a listed issuer’s outstanding share capital, | ||
• | advisors, | ||
• | groups controlling 25% or more of a listed issuer’s outstanding share capital and | ||
• | other insiders |
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• | our transformation from one type of company to another; | ||
• | any merger (even if we are the surviving entity); | ||
• | extension of our existence beyond our prescribed duration; |
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• | our dissolution before our prescribed duration (which is currently December 2089); | ||
• | a change in our corporate purpose; | ||
• | a change in our nationality; and | ||
• | the cancellation from registration of the D Shares or the securities which represent the D Shares with the securities or special section of the National Registry of Securities, or NRS, and with any other Mexican or foreign stock exchange in which such shares or securities are registered. |
• | our transformation from one type of company to another; | ||
• | any merger in which we are not the surviving entity; and | ||
• | the cancellation from registration of the L Shares or the securities that represent the L Shares with the special section of the NRS. |
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• | first, to the payment of dividends with respect to the A Shares, the B Shares and the L Shares, in an equal amount per share, up to the amount of the D Share fixed preferred dividend; and | ||
• | second, to the payment of dividends with respect to the A Shares, B Shares, D Shares and L Shares, such that the dividend per share is equal. |
• | accrued but unpaid dividends in respect of their D Shares; plus |
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• | the theoretical value of their D Shares as set forth in our bylaws. See “Other Provisions — Dissolution or Liquidation.” |
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• | to be considered as Mexicans with respect to the L Shares and CPOs that they acquire or hold, as well as to the property, rights, concessions, participations or interests owned by us or to the rights and obligations derived from any agreements we have with the Mexican government; and | ||
• | not to invoke the protection of their own governments with respect to their ownership of L Shares and CPOs. |
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• | any redemption shall be made on a pro-rata basis among all of our shareholders; | ||
• | to the extent that a redemption is effected through a public tender offer on the Mexican Stock Exchange, the shareholders’ resolution approving the redemption may empower our Board to specify the number of shares to be redeemed and appoint the related intermediary or purchase agent; and | ||
• | any redeemed shares must be cancelled. |
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• | holders of at least 10% of our outstanding capital stock to call a shareholders’ meeting in which they are entitled to vote; | ||
• | subject to the satisfaction of certain requirements under Mexican law, holders of at least 15% of our outstanding capital stock to bring an action for civil liabilities against our directors; | ||
• | holders of at least 10% of our Shares that are entitled to vote and are represented at a shareholders’ meeting to request postponement of resolutions with respect to any matter on which they were not sufficiently informed; and | ||
• | subject to the satisfaction of certain requirements under Mexican law, holders of at least 20% of our outstanding capital stock to contest and suspend any shareholder resolution. |
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NYSE rules | Mexican rules | |
Listed companies must have a majority of independent directors | The Mexican Securities Market Law requires that listed companies have at least 25% of independent directors. Our board of directors is not required to make a determination as to the independence of the directors. The definition of independence under the Mexican Securities Market Law differs in some aspects from the one applicable to U.S. issuers under the NYSE standard and prohibits, among other relationships, an independent director from being an employee or officer of the company or a shareholder that may have influence over our officers, as well as certain relationships between the company and the independent director, entities in which the independent director is a partner, director or employee and family members of the independent director. In addition, our bylaws broaden the definition of independent director. Our bylaws provide for an executive committee of our board of directors. The executive committee is currently composed of eight members, and there are no Mexican rules applicable that require any of the members to be independent. The executive committee may generally exercise the powers of our board of directors, subject to certain exceptions. Our Chief Executive Officer is a member of our board of directors and the executive committee. | |
Listed companies must have a nominating/corporate governance committee composed entirely of independent directors. | Listed companies are not required to have a nominating/corporate governance committee. |
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NYSE rules | Mexican rules | |
Listed companies must have a compensation committee composed entirely of independent directors. | The Mexican Code of Best Corporate Practices recommends listed companies to have a compensation committee. While these rules are not legally binding, companies failing to comply with the Code’s recommendation must disclose publicly why their practices differ from those recommended by the Code. | |
Listed companies must have an audit committee with a minimum of three members and must be independent. | The Mexican Securities Market Law requires that listed companies must have an audit committee. The Chairman and the majority of the members must be independent. | |
Non-management directors must meet at executive sessions without management. | Our non-management directors are not required to meet at executive sessions. The Mexican Code of Best Corporate Practices does not expressly recommend executive sessions. | |
Listed companies must adopt and disclose a code of business conduct and ethics for directors, officers and employees, and promptly discuss any waivers of the code for directors or executive officers. | Companies listed on the Mexican Stock Exchange are not required to adopt a code of ethics. However, we have recently adopted a code of ethics which is available free of charge through our offices. See Item 16B “Code of Ethics” for directions on how to obtain a copy of our code of ethics. Waivers involving any of our executive officers or directors will be made only by our Board of Directors or a designated committee of the Board. |
• | that owns, directly, indirectly or through attribution, 2% or more of the total voting power or value of our outstanding Underlying Shares (including through ownership of GDSs); | ||
• | that is a dealer in securities, insurance company, financial institution, tax-exempt organization, U.S. expatriate, broker-dealer or trader in securities; or | ||
• | whose functional currency is not the U.S. Dollar. |
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• | the tax consequences to the shareholders, partners or beneficiaries of a U.S. Holder; or | ||
• | special tax rules that may apply to a U.S. Holder that holds GDSs, CPOs or Underlying Shares as part of a “straddle,” “hedge,” “conversion transaction,” “synthetic security” or other integrated investment. |
• | the U.S. Internal Revenue Code of 1986, as amended, applicable U.S. Treasury regulations and judicial and administrative interpretations, and | ||
• | the convention between the Government of the United States of America and the Government of the United Mexican States for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income, including the applicable protocols, collectively referred to herein as the “tax treaty,” |
• | is also based, in part, on the representations of the depositary with respect to the GDSs and on the assumption that each obligation in the deposit agreement relating to the GDSs and any related agreements will be performed in accordance with their terms. |
• | a citizen or individual resident of the United States; | ||
• | a corporation (or entity treated as a corporation for such purposes) created or organized in or under the laws of the United States, or any State thereof or the District of Columbia; | ||
• | an estate the income of which is included in gross income for U.S. federal income tax purposes regardless of source; or | ||
• | a trust, if either (x) it is subject to the primary supervision of a court within the United States and one or more “United States persons” has the authority to control all substantial decisions of the trust or (y) it has a valid election in effect under applicable U.S. Treasury regulations to be treated as a “United States person.” |
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• | is not a resident of Mexico for purposes of the tax treaty; | ||
• | is an individual who has a substantial presence in the United States; | ||
• | is entitled to the benefits of the tax treaty under the limitation on benefits provision contained in Article 17 of the tax treaty; and | ||
• | does not have a fixed place of business or a permanent establishment in Mexico with which its ownership of CPOs, GDSs or Underlying Shares is effectively connected. |
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• | the gain is effectively connected with the beneficial owners’s conduct of a trade or business in the United States; or | ||
• | the beneficial owner is an individual who holds CPOs, GDSs or Underlying Shares as a capital asset, is present in the United States for 183 days or more in the taxable year of the sale or exchange and meets other requirements. |
• | is a corporation or comes within an exempt category; or | ||
• | provides a taxpayer identification number, certifies as to no loss of exemption from backup withholding tax and otherwise complies with the applicable requirements of the backup withholding rules. |
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• | the Mexican Income Tax Law, the Mexican Federal Tax Code and their respective regulations, | ||
• | rules issued by the Mexican tax authorities, and | ||
• | the tax treaty. |
• | an individual is a Mexican tax resident if the individual has established his home in Mexico. When an individual, in addition to his home in Mexico, has a home in another country, the individual will be a Mexican tax resident if his center of vital interests is located in Mexico. This will be deemed to occur if, among other circumstances, either (i) more than 50% of the total income obtained by the individual in the calendar year is Mexican source; or (ii) when the individual’s center of professional activities is located in Mexico. Unless otherwise proven, a Mexican national is considered a Mexican tax resident. | ||
• | a legal entity is considered a Mexico tax resident if it is incorporated under Mexican law or if it maintains the main administration of its head office or business or the effective location of its management in Mexico; and | ||
• | a foreign person with a permanent establishment in Mexico will be required to pay taxes in Mexico in accordance with the Mexican Income Tax Law for income attributable to such permanent establishment. |
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Fair Value at December 31, | ||||||||||||
2004 | 2005 | 2005 | ||||||||||
(Millions of Pesos in purchasing power as of | ||||||||||||
December 31, 2005 or millions of U.S. Dollars)(1) | ||||||||||||
Assets: | ||||||||||||
Temporary investments(2) | Ps. | 16,792.4 | Ps. | 14,233.4 | U.S.$ | 1,339.4 | ||||||
Liabilities: | ||||||||||||
U.S. Dollar-denominated debt: | ||||||||||||
Long-term debt securities(3) | 68.2 | 58.1 | 5.5 | |||||||||
Senior Notes due 2005 | 2,375.1 | — | — | |||||||||
Senior Notes due 2011(4) | 4,003.6 | 896.0 | 84.3 | |||||||||
Senior Notes due 2032(5) | 3,983.2 | 3,806.4 | 358.2 | |||||||||
Innova’s Senior Notes due 2007 | 1,014.4 | — | — | |||||||||
Innova’s Senior Notes due 2013(6) | 3,942.6 | 3,519.5 | 331.2 | |||||||||
Senior Notes due 2025(8) | — | 6,578.1 | 619.0 | |||||||||
Peso-denominated debt: | ||||||||||||
UDI-denominated long-term loan facility(9) | 4,298.3 | 1,002.8 | 94.4 | |||||||||
Long-term notes payable to Mexican Banks(7) | 5,199.6 | 3,964.1 | 373.0 |
(1) | Peso amounts have been converted to U.S. Dollars solely for the convenience of the reader at a nominal exchange rate of Ps.10.6265 per U.S. Dollar, the Interbank Rate as of December 31, 2005. | |
(2) | At December 31, 2005, our temporary investments consisted of fixed rate short-term deposits in commercial banks (primarily Peso- and U.S. Dollar-denominated in 2004 and 2005). Given the short-term nature of these investments, an increase in U.S. and/or Mexican interest rates would not significantly decrease the fair value of these investments. | |
(3) | At December 31, 2005, fair value exceeded the carrying value of those debt securities by approximately Ps.1.4 million (U.S.$0.1 million). The increase in the fair value of a hypothetical 10% increase in the estimated market price of those debt securities would amount to Ps.7.2 million (U.S.$0.7 million) at December 31, 2005. | |
(4) | At December 31, 2005, fair value exceeded the carrying value of these notes by approximately Ps.93.9 million (U.S.$8.8 million). The increase in the fair value of these notes of a hypothetical 10% increase in the quoted market price of these notes would amount to approximately Ps.183.5 million (U.S.$17.3 million) at December 31, 2005. | |
(5) | At December 31, 2005, fair value exceeded the carrying value of these notes by approximately Ps.618.5 million (U.S.$58.2 million). The increase in the fair value of these notes of a hypothetical 10% increase in the quoted market price of these notes would amount to approximately Ps.999.1 million (U.S.$94.0 million) at December 31, 2005. | |
(6) | At December 31, 2005, fair value exceeded the carrying value of these notes by approximately Ps.331.5 million (U.S.$31.2 million). The increase in the fair value of these notes of a hypothetical 10% increase in the quoted market price of these notes would amount to approximately Ps.683.5 million (U.S.$64.3 million) at December 31, 2005. | |
(7) | At December 31, 2005, fair value exceeded the carrying value of these notes by approximately Ps.81.6 million (U.S.$7.7 million). At December 31, 2005, a hypothetical 10% increase in Mexican interest rates would increase the fair value of these notes by approximately Ps.478.1 million (U.S.$45.0 million) at December 31, 2005. |
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(8) | At December 31, 2005, fair value exceeded the carrying value of these notes by approximately Ps.202.2 million (U.S.$19.0 million). The increase in the fair value of these notes of a hypothetical 10% increase in the quoted market price of these notes would amount to approximately Ps.860.1 million (U.S.$80.9 million) at December 31, 2005. | |
(9) | At December 31, 2005, fair value exceeded carrying value of amounts outstanding under this loan by approximately Ps.61.7 million (U.S.$5.8 million). At December 31, 2005, a hypothetical 10% increase in the Mexican inflation rate to 3.6% for the year 2005 would increase principal amounts outstanding under this UDI-denominated long-term loan facility by approximately Ps.162.0 million (U.S.$15.2 million). An inflation rate of less than 4.0% is forecasted by the Mexican government for 2006. We entered into inflation swap agreements to fix the inflation rate on this UDI-denominated facility at an annual rate of approximately 4%, however, we terminated these derivative agreements in March 2005. |
Year Ended December 31, | ||||||||
2004 | 2005 | |||||||
(In millions of U.S. Dollars) | ||||||||
U.S. Dollar-denominated short-term investments and long-term notes receivable | U.S.$ | 582.6 | U.S.$ | 682.9 | ||||
U.S. Dollar-denominated senior debt securities and other notes payable | 1,482.5 | 1,563.5 | ||||||
899.9 | 880.6 | |||||||
Derivative instruments, net | (8.0 | ) | (8.0 | ) | ||||
Net liability position | U.S.$ | 891.9 | U.S.$ | 872.6 | ||||
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Avenida Vasco de Quiroga
No. 2000,
Colonia Santa Fe, 01210 México, D.F., México.
Telephone: (52) (55) 5261-2000.
2004 | 2005 | |||||||
(in millions of Pesos in purchasing power | ||||||||
as of December 31, 2005) | ||||||||
Audit Fees | Ps. | 38.6 | Ps. | 39.8 | ||||
Audit-Related Fees | – | 3.5 | ||||||
Tax Fees | 5.7 | 3.7 | ||||||
Other Fees | – | 11.5 | ||||||
Total | Ps. | 44.3 | Ps. | 58.5 | ||||
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Maximum Number (or | ||||||||||||||||
Total Number of | Appropriate Mexican Peso | |||||||||||||||
CPOs | Value) of CPOs | |||||||||||||||
Total Number | Purchased as part of | that May Yet Be | ||||||||||||||
of CPOs | Average Price | Publicly Announced | Purchased Under the | |||||||||||||
Purchase Date | Purchased | Paid per CPO(1) | Plans or Programs | Plans or Programs (1) | ||||||||||||
January 1 to January 31 | 1,592,900 | Ps. | 32.186468 | 48,685,600 | Ps. | 3,021,017,874 | ||||||||||
February 1 to February 29 | 90,400 | 34.954558 | 48,776,000 | 3,017,857,978 | ||||||||||||
March 1 to March 31 | 4,231,400 | 32.701047 | 53,007,400 | 2,879,486,737 | ||||||||||||
April 1 to April 30 | 5,603,400 | 31.552905 | 58,610,800 | 2,702,683,249 | ||||||||||||
May 1 to May 31 | 7,134,900 | 31.463152 | 65,745,700 | 2,478,196,900 | ||||||||||||
June 1 to June 30 | 65,745,700 | 2,478,196,900 | ||||||||||||||
July 1 to July 31 | 821,100 | 34.914656 | 66,566,800 | 2,449,528,440 | ||||||||||||
August 1 to August 31 | 8,018,300 | 34.484304 | 74,585,100 | 2,173,022,994 | ||||||||||||
September 1 to September 30 | 1,177,000 | 34.298937 | 75,762,100 | 2,132,653,136 | ||||||||||||
October 1 to October 31 | 75,762,100 | 2,132,653,136 | ||||||||||||||
November 1 to November 30 | 868,400 | 40.759666 | 76,630,500 | 2,097,257,468 | ||||||||||||
December 1 to December 31 | 1,620,000 | 42.356154 | 78,250,500 | 2,028,640,510 | ||||||||||||
Total | 31,157,800 | Ps. | 33.495540 | 78,250,500 | Ps. | 2,028,640,510 | ||||||||||
(1) | The values have not been restated in constant Mexican Pesos and therefore represent nominal historical figures. | |
(2) | Our share repurchase program was announced in September of 2002 and is set to expire December 31, 2008. Our share repurchase program is limited to a total amount of U.S.$400 million. | |
(3) | Table does not include repurchases or purchases by the special purpose trust formed in connection with our stock purchase plan. |
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formed in connection with Stock Purchase Plan(1)
Maximum Number (or | ||||||||||||||||
Appropriate Mexican Peso | ||||||||||||||||
Value) of CPOs | ||||||||||||||||
Total Number | Total Number of CPOs | that May Yet Be | ||||||||||||||
of CPOs | Average Price | Purchased as part of | Purchased Under the | |||||||||||||
Purchase Date | Purchased | Paid per CPO (2) | the Stock Purchase Plan | Stock Purchase Plan(3) | ||||||||||||
January 1 to January 31 | 650,000 | Ps. | 32.945860 | 45,728,300 | ||||||||||||
February 1 to February 29 | 45,728,300 | |||||||||||||||
March 1 to March 31 | 250,000 | 32.43858 | 45,978,300 | |||||||||||||
April 1 to April 30 | 45,978,300 | |||||||||||||||
May 1 to May 31 | 1,510,000 | 31.65265 | 47,488,300 | |||||||||||||
June 1 to June 30 | 3,600,000 | 32.64060 | 51,088,300 | |||||||||||||
July 1 to July 31 | 850,000 | 34.86641 | 51,938,300 | |||||||||||||
August 1 to August 31 | 1,290,000 | 34.84124 | 53,228,300 | |||||||||||||
September 1 to September 30 | 350,000 | 37.46426 | 53,578,300 | |||||||||||||
October 1 to October 31 | 240,000 | 39.33220 | 53,818,300 | |||||||||||||
November 1 to November 30 | 335,000 | 41.62134 | 54,153,300 | |||||||||||||
December 1 to December 31 | 1,200,000 | 42.41697 | 55,353,300 | |||||||||||||
Total | 10,275,000 | Ps. | 34.72540 | 55,353,300 | ||||||||||||
(1) | See “Directors, Senior Management and Employees – Stock Purchase Plan” for a description of the implementation, limits and other terms of our Stock Purchase Plan. | |
(2) | The values have not been restated in constant Mexican Pesos and therefore represent nominal historical figures. | |
(3) | Since the number of additional shares that may be issued pursuant to our Stock Purchase Plan is affected by, among other things, the number of shares held by the special equity trust, periodic grants made to certain executives, the performance of those executives and the number of shares subject to other employee benefit plans, it would be misleading to imply that there is a defined maximum number of shares that remain to be purchased pursuant to our Stock Purchase Plan. |
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Exhibit | ||
Number | Description of Exhibits | |
1.1— | English translation of Amended and Restated Bylaws (Estatutos Sociales) of the Registrant, dated as of April 16, 2004 (previously filed with the Securities Exchange Commission as Exhibit 1.1 to the Registrant’s Annual Report Form 20-F for the year ended December 31, 2003 and incorporated herein by reference). | |
2.1— | Indenture relating to Senior Debt Securities, dated as of August 8, 2000, between the Registrant, as Issuer, and The Bank of New York, as Trustee (previously filed with the Securities and Exchange Commission as Exhibit 4.1 to the Registrant’s Registration Statement on Form F-4 (File number 333-12738), as amended (the “2000 Form F-4”), and incorporated herein by reference). | |
2.2— | Third Supplemental Indenture relating to the 8% Senior Notes due 2011, dated as of September 13, 2001, between the Registrant, as Issuer, and The Bank of New York and Banque Internationale à Luxembourg, S.A. (previously filed with the Securities and Exchange Commission as Exhibit 4.4 to the Registrant’s Registration Statement on Form F-4 (File number 333-14200) (the “2001 Form F-4”) and incorporated herein by reference). | |
2.3— | Fourth Supplemental Indenture relating to the 8.5% Senior Exchange Notes due 2032 between the Registrant, as Issuer, and The Bank of New York and Dexia Banque Internationale à Luxembourg (previously filed with the Securities Exchange Commission as Exhibit 4.5 to the Registrant’s Registration Statement on Form F-4 (the “2002 Form F-4”) and incorporated herein by reference). | |
2.4— | Fifth Supplemental Indenture relating to the 8% Senior Notes due 2011 between Registrant, as Issuer, and The Bank of New York and Dexia Banque Internationale à Luxembourg (previously filed with the Securities and Exchange Commission as Exhibit 4.5 to the 2001 Form F-4 and incorporated herein by reference). |
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Exhibit | ||
Number | Description of Exhibits | |
2.5— | Sixth Supplemental Indenture relating to the 8.5% Senior Notes due 2032 between Registrant, as Issuer, and The Bank of New York and Dexia Banque Internationale à Luxembourg (previously filed with the Securities and Exchange Commission as Exhibit 4.7 to the 2002 Form F-4 and incorporated herein by reference). | |
2.6— | Seventh Supplemental Indenture relating to the 6 5/8% Senior Notes due 2025 between Registrant, as Issuer, and The Bank of New York and Dexia Banque Internationale à Luxembourg, dated March 18, 2005 (previously filed with the Securities and Exchange Commission as Exhibit 2.8 to the Registrant’s Annual Report on Form 20-F for the year ended December 31, 2004 (the “2004” Form 20-F”) and incorporated herein by reference). | |
2.7— | Eighth Supplemental Indenture relating to the 6 5/8% Senior Notes due 2025 between Registrant, as Issuer, and The Bank of New York and Dexia Banque Internationale à Luxembourg, dated May 26, 2005 (previously filed with the Securities and Exchange Commission as Exhibit 2.9 to the 2004 Form 20-F and incorporated herein by reference). | |
2.8— | Ninth Supplemental Indenture relating to the 6 5/8% Senior Notes due 2025 between Registrant, as Issuer, The Bank of New York and Dexia Banque Internationale à Luxembourg, dated September 6, 2005. | |
2.9— | Form of Deposit Agreement between the Registrant, JPMorgan Chase Bank, as depositary and all holders and beneficial owners of the Global Depositary Shares, evidenced by Global Depositary Receipts (previously filed with the Securities and Exchange Commission as an Exhibit to the Registrant’s Registration Statement on Form F-6 (File number 333-99195) (the “Form F-6”) and incorporated herein by reference). | |
4.1— | Form of Indemnity Agreement between the Registrant and its directors and executive officers (previously filed with the Securities and Exchange Commission as Exhibit 10.1 to the Registrant’s Registration Statement on Form F-4 (File number 33-69636), as amended, (the “1993 Form F-4”) and incorporated herein by reference). | |
4.2— | Amended and Restated Collateral Trust Agreement, dated as of June 13, 1997, as amended, among PanAmSat Corporation, Hughes Communications, Inc., Satellite Company, LLC, the Registrant and IBJ Schroder Bank and Trust Company (previously filed with the Securities and Exchange Commission as an Exhibit to the Registrant’s Annual Report on Form 20-F for the year ended December 31, 2001 (the “2001 Form 20-F”) and incorporated herein by reference). | |
4.3— | Amended and Restated Program License Agreement, dated as of December 19, 2001, by and between Productora de Teleprogramas, S.A. de C.V. and Univision Communications Inc. (“Univision”) (previously filed with the Securities and Exchange Commission as Exhibit 10.7 to the 2001 Form F-4 and incorporated herein by reference). |
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Exhibit | ||
Number | Description of Exhibits | |
4.4— | Participation Agreement, dated as of October 2, 1996, by and among Univision, Perenchio, the Registrant, Venevision and certain of their respective affiliates (previously filed with the Securities and Exchange Commission as Exhibit 10.8 to Univision’s Registration Statement on Form S-1 (File number 333-6309) (the “Univision Form S-1”) and incorporated herein by reference). | |
4.5— | Amended and Restated International Program Rights Agreement, dated as of December 19, 2001, by and among Univision, Venevision and the Registrant (previously filed with the Securities and Exchange Commission as Exhibit 10.9 to the 2001 Form F-4 and incorporated herein by reference). | |
4.6— | Co-Production Agreement, dated as of March 27, 1998, between the Registrant and Univision Network Limited Partnership (previously filed with the Securities and Exchange Commission as an Exhibit to Univision’s Annual Report on Form 10-K for the year ended December 31, 1997 and incorporated herein by reference). | |
4.7— | Program License Agreement, dated as of May 31, 2005, between Registrant and Univision. | |
4.8— | Amended and Restated Bylaws (Estatutos Sociales) of Innova, S. de R.L. de C.V. (“Innova”) dated as of December 22, 1998 (previously filed with the Securities and Exchange Commission as an Exhibit to Innova’s Annual Report on Form 20-F for the year ended December 31, 2004 and incorporated herein by reference). | |
4.9— | English translation of investment agreement, dated as of March 26, 2006, between Registrant and M/A and Gestora de Inversiones Audiovisuales La Sexta, S.A. | |
4.10— | English summary of Ps.1,162.5 million credit agreement, dated as of May 17, 2004, between the Registrant and Banamex (the “May 2004 Credit Agreement”) and the May 2004 Credit Agreement (in Spanish) (previously filed with the Securities and Exchange Commission as Exhibit 4.9 to the 2004 Form 20-F and incorporated herein by reference). | |
4.11— | English summary of amendment to the May Credit Agreement and the amendment to the May 2004 Credit Agreement (in Spanish) (previously filed with the Securities and Exchange Commission as Exhibit 4.10 to the 2004 Form 20-F and incorporated herein by reference). | |
4.12— | English summary of Ps.2,000.0 million credit agreement, dated as of October 22, 2004, between the Registrant and Banamex (the “October 2004 Credit Agreement”) and the October Credit Agreement (in Spanish) (previously filed with the Securities and Exchange Commission as Exhibit 4.11 to the 2004 Form 20-F and incorporated herein by reference). | |
4.13— | English translation of Ps.2,100.0 million credit agreement, dated as of March 10, 2006, by and among Innova, the Registrant and Banamex. | |
4.14— | English summary of Ps.1,400.0 million credit agreement, dated as of April 7, 2006, by and among Innova, the Registrant and Banco Santander Serfin, S.A. (the “April |
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Exhibit | ||
Number | Description of Exhibits | |
2006 Credit Agreement”) and the April Credit Agreement (in Spanish). | ||
4.15— | Administration Trust Agreement relating to Trust No. 80375, dated as of March 23, 2004, by and among Nacional Financiera, S.N.C., as trustee of Trust No. 80370, Banco Inbursa, S.A., as trustee of Trust No. F/0553, Banco Nacional de México, S.A., as trustee of Trust No. 14520-1, Nacional Financiera, S.N.C., as trustee of Trust No. 80375, Emilio Azcárraga Jean, Promotora Inbursa, S.A. de C.V., María Asunción Aramburuzabala Larregui, Lucrecia Aramburuzabala Larregui de Fernández, María de las Nieves Fernández González, Antonino Fernández Rodríguez, Carlos Fernández González, Grupo Televisa, S.A. and Grupo Televicentro, S.A. de C.V. (as previously filed with the Securities and Exchange Commission as an Exhibit to Schedules 13D or 13D/A in respect of various parties’ to the Trust Agreement (File number 005-60431) and incorporated herein by reference). | |
8.1— | List of Subsidiaries of Registrant. | |
12.1— | CEO Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, dated June 30, 2006. | |
12.2— | CFO Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, dated June 30, 2006. | |
13.1— | CEO Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, dated June 30, 2006. | |
13.2— | CFO Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, dated June 30, 2006. |
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Date June 30, 2006 | GRUPO TELEVISA, S.A. | |||
By: | /s/ Salvi Folch Viadero | |||
Name: | Salvi Folch Viadero | |||
Title: | Chief Financial Officer | |||
By: | /s/ Joaquín Balcárcel Santa Cruz | |||
Name: | Joaquín Balcárcel Santa Cruz | |||
Title: | Vice President — Legal and General Counsel |
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Page | ||||
F-2 | ||||
F-3 | ||||
F-4 | ||||
F-6 | ||||
F-7 | ||||
F-8 | ||||
F-9 |
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Univision Communications Inc.
March 10, 2006
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2004 | 2005 | |||||||||||
ASSETS | ||||||||||||
Current: | ||||||||||||
Available: | ||||||||||||
Cash | Ps. | 403,540 | Ps. | 544,582 | ||||||||
Temporary investments | 16,792,407 | 14,233,372 | ||||||||||
17,195,947 | 14,777,954 | |||||||||||
Trade notes and accounts receivable, net | (Note 3) | 11,604,240 | 13,896,300 | |||||||||
Other accounts and notes receivable, net | 1,210,593 | 570,610 | ||||||||||
Due from affiliated companies, net | (Note 16) | 78,961 | — | |||||||||
Transmission rights and programming | (Note 4) | 3,713,684 | 3,120,501 | |||||||||
Inventories | 684,848 | 638,280 | ||||||||||
Other current assets | 734,650 | 578,068 | ||||||||||
Total current assets | 35,222,923 | 33,581,713 | ||||||||||
Transmission rights and programming, noncurrent | (Note 4) | 4,641,403 | 3,920,967 | |||||||||
Investments | (Note 5) | 6,982,937 | 7,587,509 | |||||||||
Property, plant and equipment, net | (Note 6) | 19,798,098 | 19,728,547 | |||||||||
Intangible assets and deferred charges, net | (Note 7) | 9,461,758 | 10,013,273 | |||||||||
Other assets | 277,532 | 19,728 | ||||||||||
Total assets | Ps. | 76,384,651 | Ps. | 74,851,737 | ||||||||
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As of December 31, 2004 and 2005
(In thousands of Mexican pesos in purchasing power as of December 31, 2005)
(Notes 1 and 2)
2004 | 2005 | |||||||||||
LIABILITIES | ||||||||||||
Current: | ||||||||||||
Current portion of long-term debt | (Note 8) | Ps. | 3,406,973 | Ps. | 340,457 | |||||||
Current portion of satellite transponder lease obligation | (Note 8) | 73,101 | 75,604 | |||||||||
Trade accounts payable | 2,206,412 | 2,954,723 | ||||||||||
Customer deposits and advances | 15,427,906 | 15,538,229 | ||||||||||
Taxes payable | 1,610,711 | 1,055,793 | ||||||||||
Accrued interest | 464,352 | 334,609 | ||||||||||
Other accrued liabilities | 1,313,105 | 1,580,931 | ||||||||||
Due to affiliated companies, net | (Note 16) | — | 455,903 | |||||||||
Total current liabilities | 24,502,560 | 22,336,249 | ||||||||||
Long-term debt, net of current portion | (Note 8) | 19,575,139 | 18,137,240 | |||||||||
Satellite transponder lease obligation, net of current portion | (Note 8) | 1,368,760 | 1,186,933 | |||||||||
Customer deposits and advances, noncurrent | 385,315 | 2,508,200 | ||||||||||
Other long-term liabilities | 611,734 | 461,374 | ||||||||||
Deferred taxes | (Note 20) | 1,417,155 | 165,657 | |||||||||
Pension plans, seniority premiums and severance indemnities | (Note 10) | — | 192,160 | |||||||||
Total liabilities | 47,860,663 | 44,987,813 | ||||||||||
Commitments and contingencies | (Note 11) | |||||||||||
STOCKHOLDERS’ EQUITY | ||||||||||||
Capital stock issued, no par value | (Note 12) | 9,889,463 | 9,889,463 | |||||||||
Additional paid-in capital | 4,212,442 | 4,212,442 | ||||||||||
14,101,905 | 14,101,905 | |||||||||||
Retained earnings: | (Note 13) | |||||||||||
Legal reserve | 1,575,357 | 1,798,387 | ||||||||||
Reserve for repurchase of shares | 5,744,583 | 5,744,583 | ||||||||||
Unappropriated earnings | 11,917,996 | 11,834,150 | ||||||||||
Net income for the year | 4,460,607 | 6,125,542 | ||||||||||
23,698,543 | 25,502,662 | |||||||||||
Accumulated other comprehensive loss | (Note 14) | (2,647,449 | ) | (3,546,369 | ) | |||||||
Shares repurchased | (Note 13) | (6,504,449 | ) | (7,045,146 | ) | |||||||
14,546,645 | 14,911,147 | |||||||||||
Total majority interest | 28,648,550 | 29,013,052 | ||||||||||
Minority interest | (Note 15) | (124,562 | ) | 850,872 | ||||||||
Total stockholders’ equity | 28,523,988 | 29,863,924 | ||||||||||
Total liabilities and stockholders’ equity | Ps. | 76,384,651 | Ps. | 74,851,737 | ||||||||
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2003 | 2004 | 2005 | ||||||||||||||
Net sales | (Note 23) | Ps. | 25,612,386 | Ps. | 30,291,209 | Ps. | 32,481,041 | |||||||||
Cost of sales (excluding depreciation and amortization) | 14,009,959 | 15,328,115 | 14,752,396 | |||||||||||||
Operating expenses (excluding depreciation and amortization): | ||||||||||||||||
Selling | 1,840,155 | 2,274,397 | 2,665,461 | |||||||||||||
Administrative | 1,532,668 | 1,701,496 | 1,841,428 | |||||||||||||
Depreciation and amortization | 1,657,882 | 2,144,158 | 2,418,969 | |||||||||||||
Operating income | (Note 23) | 6,571,722 | 8,843,043 | 10,802,787 | ||||||||||||
Integral cost of financing, net | (Note 17) | 667,969 | 1,566,687 | 1,782,030 | ||||||||||||
Restructuring and non-recurring charges | (Note 18) | 714,406 | 408,423 | 229,902 | ||||||||||||
Other expense, net | (Note 19) | 590,501 | 532,160 | 464,220 | ||||||||||||
Income before taxes | 4,598,846 | 6,335,773 | 8,326,635 | |||||||||||||
Income tax and asset tax | (Note 20) | 776,048 | 1,208,809 | 751,243 | ||||||||||||
Employees’ profit sharing | (Note 20) | 6,005 | 6,736 | 19,907 | ||||||||||||
782,053 | 1,215,545 | 771,150 | ||||||||||||||
Income before equity in earnings of affiliates, loss from discontinued operations and cumulative loss effect of accounting changes | 3,816,793 | 5,120,228 | 7,555,485 | |||||||||||||
Equity in earnings of affiliates, net | (Note 5) | 30,747 | 635,490 | 160,158 | ||||||||||||
Loss from discontinued operations, net | (Note 1(s)) | (69,736 | ) | — | — | |||||||||||
Cumulative loss effect of accounting changes, net | (Note 1(b)(n)(r)) | — | (1,055,636 | ) | (506,080 | ) | ||||||||||
Consolidated net income | 3,777,804 | 4,700,082 | 7,209,563 | |||||||||||||
Minority interest | (Note 15) | 131,577 | (239,475 | ) | (1,084,021 | ) | ||||||||||
Net income | (Note 13) | Ps. | 3,909,381 | Ps. | 4,460,607 | Ps. | 6,125,542 | |||||||||
Net income per CPO | (Note 21) | Ps. | 1.36 | Ps. | 1.53 | Ps. | 2.11 | |||||||||
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Accumulated | ||||||||||||||||||||||||||||||||
Capital | Other | |||||||||||||||||||||||||||||||
Stock | Additional | Retained | Comprehensive | Shares | Total | Minority | Total | |||||||||||||||||||||||||
Issued | Paid-In | Earnings | (Loss) Income | Repurchased | Majority | Interest | Stockholders’ | |||||||||||||||||||||||||
(Note 12) | Capital | (Note 13) | (Note 14) | (Note 13) | Interest | (Note 15) | Equity | |||||||||||||||||||||||||
Balance at January 1, 2003 | Ps. | 8,605,090 | Ps. | 244,606 | Ps. | 22,069,045 | Ps. | (5,691,541 | ) | Ps. | (2,414,449 | ) | Ps. | 22,812,751 | Ps. | 1,287,935 | Ps. | 24,100,686 | ||||||||||||||
Dividends | — | — | (621,603 | ) | — | — | (621,603 | ) | — | (621,603 | ) | |||||||||||||||||||||
Share cancellation | (89,322 | ) | — | — | — | 579,852 | 490,530 | — | 490,530 | |||||||||||||||||||||||
Repurchase of capital stock | — | — | (357,610 | ) | — | (5,189,864 | ) | (5,547,474 | ) | — | (5,547,474 | ) | ||||||||||||||||||||
Sale of capital stock | — | — | (50,958 | ) | — | 128,891 | 77,933 | — | 77,933 | |||||||||||||||||||||||
Shares issued | 405,433 | 3,967,836 | — | — | — | 4,373,269 | — | 4,373,269 | ||||||||||||||||||||||||
Decrease in minority interest | — | — | — | — | — | — | (115,487 | ) | (115,487 | ) | ||||||||||||||||||||||
Comprehensive income | — | — | 3,909,381 | 3,252,916 | — | 7,162,297 | — | 7,162,297 | ||||||||||||||||||||||||
Balance at December 31, 2003 | 8,921,201 | 4,212,442 | 24,948,255 | (2,438,625 | ) | (6,895,570 | ) | 28,747,703 | 1,172,448 | 29,920,151 | ||||||||||||||||||||||
Dividends | — | — | (4,114,065 | ) | — | — | (4,114,065 | ) | — | (4,114,065 | ) | |||||||||||||||||||||
Stock dividends | 968,262 | — | (968,262 | ) | — | — | — | — | — | |||||||||||||||||||||||
Repurchase of capital stock | — | — | (132,891 | ) | — | (709,706 | ) | (842,597 | ) | — | (842,597 | ) | ||||||||||||||||||||
Sale of capital stock | — | — | (495,101 | ) | — | 1,100,827 | 605,726 | — | 605,726 | |||||||||||||||||||||||
Decrease in minority interest | — | — | — | — | — | — | (1,297,010 | ) | (1,297,010 | ) | ||||||||||||||||||||||
Comprehensive income (loss) | — | — | 4,460,607 | (208,824 | ) | — | 4,251,783 | — | 4,251,783 | |||||||||||||||||||||||
Balance at December 31, 2004 | 9,889,463 | 4,212,442 | 23,698,543 | (2,647,449 | ) | (6,504,449 | ) | 28,648,550 | (124,562 | ) | 28,523,988 | |||||||||||||||||||||
Dividends | — | — | (4,305,789 | ) | — | — | (4,305,789 | ) | — | (4,305,789 | ) | |||||||||||||||||||||
Repurchase of capital stock | — | — | — | — | (1,194,424 | ) | (1,194,424 | ) | — | (1,194,424 | ) | |||||||||||||||||||||
Sale of capital stock | — | — | (339,168 | ) | — | 653,727 | 314,559 | — | 314,559 | |||||||||||||||||||||||
Increase in minority interest | — | — | — | — | — | — | 975,434 | 975,434 | ||||||||||||||||||||||||
Stock-based compensation | — | — | 323,534 | — | — | 323,534 | — | 323,534 | ||||||||||||||||||||||||
Comprehensive income (loss) | — | — | 6,125,542 | (898,920 | ) | — | 5,226,622 | — | 5,226,622 | |||||||||||||||||||||||
Balance at December 31, 2005 | Ps. | 9,889,463 | Ps. | 4,212,442 | Ps. | 25,502,662 | Ps. | (3,546,369 | ) | Ps. | (7,045,146 | ) | Ps. | 29,013,052 | Ps. | 850,872 | Ps. | 29,863,924 | ||||||||||||||
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2003 | 2004 | 2005 | ||||||||||
Operating activities: | ||||||||||||
Consolidated net income | Ps. | 3,777,804 | Ps. | 4,700,082 | Ps. | 7,209,563 | ||||||
Adjustments to reconcile net income to resources provided by (used for) operating activities: | ||||||||||||
Equity in earnings of affiliates | (30,747 | ) | (635,490 | ) | (160,158 | ) | ||||||
Depreciation and amortization | 1,657,882 | 2,144,158 | 2,418,969 | |||||||||
Write-off of long-lived assets and other amortization | 812,206 | 283,829 | 97,544 | |||||||||
Deferred taxes | (360,946 | ) | 630,108 | (787,777 | ) | |||||||
(Gain) loss on disposition of affiliates | (484,595 | ) | 126,536 | 171,264 | ||||||||
Loss from discontinued operations | 69,736 | — | — | |||||||||
Cumulative loss effect of accounting changes | — | 1,055,636 | 506,080 | |||||||||
5,441,340 | 8,304,859 | 9,455,485 | ||||||||||
Changes in operating assets and liabilities: | ||||||||||||
(Increase) decrease in: | ||||||||||||
Trade notes and accounts receivable, net | (786,044 | ) | 71,630 | (2,292,060 | ) | |||||||
Transmission rights and programming | 544,399 | 322,617 | 976,787 | |||||||||
Inventories | 16,798 | (112,444 | ) | 46,568 | ||||||||
Other accounts and notes receivable and other current assets | (55,348 | ) | (381,964 | ) | 796,565 | |||||||
Increase (decrease) in: | ||||||||||||
Customer deposits and advances | 1,938,913 | 557,276 | 2,233,208 | |||||||||
Trade accounts payable | 104,232 | (625,630 | ) | 748,311 | ||||||||
Other liabilities, taxes payable and deferred taxes | (275,580 | ) | (180,471 | ) | (742,530 | ) | ||||||
Pension plans and seniority premiums | 74,103 | 65,623 | 74,652 | |||||||||
1,561,473 | (283,363 | ) | 1,841,501 | |||||||||
Resources provided by operating activities | 7,002,813 | 8,021,496 | 11,296,986 | |||||||||
Financing activities: | ||||||||||||
Issuance of Senior Notes due 2025 | — | — | 6,375,900 | |||||||||
Prepayments of Senior Notes and UDIs denominated Notes | — | — | (5,679,629 | ) | ||||||||
Other increase in debt | 1,208,978 | 4,323,363 | — | |||||||||
Other decrease in debt | (1,399,910 | ) | (2,380,366 | ) | (5,380,010 | ) | ||||||
Repurchase and sale of capital stock | (4,979,011 | ) | (236,873 | ) | (879,865 | ) | ||||||
Series “A” Shares of capital stock issued | 4,373,268 | — | — | |||||||||
Dividends paid | (621,603 | ) | (4,114,064 | ) | (4,305,789 | ) | ||||||
Gain on issuance of shares of investee | — | 111,465 | — | |||||||||
Minority interest | 16,090 | (53,136 | ) | (108,587 | ) | |||||||
Translation effect | (334,291 | ) | (50,339 | ) | 112,208 | |||||||
Resources used for financing activities | (1,736,479 | ) | (2,399,950 | ) | (9,865,772 | ) | ||||||
Investing activities: | ||||||||||||
Due from affiliated companies, net | (477,670 | ) | (37,582 | ) | 534,864 | |||||||
Investments | (662,731 | ) | (247,165 | ) | (1,201,361 | ) | ||||||
Disposition of investments | 583,734 | 37,500 | 105,015 | |||||||||
Investments in property, plant and equipment | (1,143,728 | ) | (2,094,532 | ) | (2,738,095 | ) | ||||||
Disposition of property, plant and equipment | 450,487 | 153,494 | 317,008 | |||||||||
Disposition of discontinued operations | (102,553 | ) | — | — | ||||||||
Investment in goodwill and other intangible assets | (568,002 | ) | (219,671 | ) | (1,658,611 | ) | ||||||
Disposition of goodwill and other intangible assets | 28,320 | 270,613 | 674,928 | |||||||||
Other assets | 25,087 | (101,732 | ) | 117,045 | ||||||||
Resources used for investing activities | (1,867,056 | ) | (2,239,075 | ) | (3,849,207 | ) | ||||||
Net increase (decrease) in cash and temporary investments | 3,399,278 | 3,382,471 | (2,417,993 | ) | ||||||||
Net increase in cash and temporary investments upon Innova’s consolidation | — | 483,451 | — | |||||||||
Cash and temporary investments at beginning of year | 9,930,747 | 13,330,025 | 17,195,947 | |||||||||
Cash and temporary investments at end of year | Ps. | 13,330,025 | Ps. | 17,195,947 | Ps. | 14,777,954 | ||||||
F-8
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Company’s | ||||||
Consolidated Entity | Ownership(1) | Business Segment(2) | ||||
Television Broadcasting | ||||||
Telesistema Mexicano, S. A. de C. V. and subsidiaries, including Televisa, S. A. de C. V. | 100 | % | Pay Television Networks | |||
Programming Exports | ||||||
Televisión Independiente de México, S. A. de C. V. and subsidiaries | 100 | % | Television Broadcasting | |||
Campus América, S. A. de C. V. and subsidiaries, including TuTv, LLC (“TuTv”)(3) | 100 | % | Television Broadcasting | |||
Pay Television Networks | ||||||
Editorial Televisa, S. A. de C. V. and subsidiaries | 100 | % | Publishing | |||
Grupo Distribuidoras Intermex, S. A. de C. V. and subsidiaries | 100 | % | Publishing Distribution | |||
Innova Holdings, S. de R. L. de C. V. and Innova, S. de R. L. de C.V. and subsidiaries (collectively, “Sky Mexico”)(3) | 60 | % | Sky Mexico | |||
Empresas Cablevisión, S. A. de C. V. and subsidiaries | 51 | % | Cable Televisión | |||
Sistema Radiópolis, S. A. de C. V. and subsidiaries | 50 | % | Radio | |||
Corporativo Vasco de Quiroga, S. A. de C. V. and subsidiaries | 100 | % | Other Businesses | |||
CVQ Espectáculos, S. A. de C. V. and subsidiaries | 100 | % | Other Businesses |
(1) | Percentage of equity interest directly or indirectly held by the Company in the holding entity. | |
(2) | See Note 23 for a description of each of the Group’s business segments. | |
(3) | Mexican GAAP does not provide specific guidance on the accounting for the consolidation of VIEs. Effective April 1, 2004, the Group adopted the guidelines of the Financial Accounting Standards Board Interpretation No. 46 (“FIN 46”), “Consolidation of Variable Interest Entities,” as permitted under the scope of Mexican GAAP Bulletin A-8, “Supplementary Application of International Accounting Standards” (“Bulletin A-8”). FIN 46, which became effective in |
F-9
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2004, requires the primary beneficiary of a variable interest entity to consolidate that entity. The primary beneficiary of a VIE is the party that absorbs a majority of the entity’s expected losses, receives a majority of the entity’s expected residual returns, or both, as a result of ownership, contractual or other financial interest in the entity. In accordance with the guidelines of FIN 46, the Group identified Sky Mexico and TuTv as VIEs and the Group as the primary beneficiary of the investment in each of these entities, and began to include in its consolidated financial statements the assets, liabilities and results of operations of Sky Mexico and TuTv. As a result of adoption of FIN 46 on April 1, 2004, the Group recognized at that date a consolidated cumulative loss effect of Ps.1,055,637, net of income tax in the amount of Ps.319,394, in its consolidated statement of income for the year ended December 31, 2004, primarily in connection with Sky Mexico’s accumulated losses not recognized by the Group in prior periods and the first quarter of 2004. Before April 1, 2004, the Group accounted for its investment in Sky Mexico by applying the equity method, and recognized equity in losses in excess of its investment up to the amount of the guarantees made by the Group in connection with certain capital lease obligations of Sky Mexico (see Note 1(g)). |
Expiration Dates | ||||
Television Broadcasting | In 2021 | |||
Sky Mexico | In 2020 and 2026 | |||
Cable Television | In 2029 | |||
Radio | Various from 2006 to 2015 |
F-10
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F-11
Table of Contents
• | Advertising revenues, including deposits and advances from customers for future advertising, are recognized at the time the advertising services are rendered. | ||
• | Revenues from program services for pay television and licensed television programs are recognized when the programs are sold and become available for broadcast. |
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• | Revenues from magazine subscriptions are initially deferred and recognized proportionately as products are delivered to subscribers. Revenues from the sales of magazines and books are recognized when the merchandise is delivered, net of a provision for estimated returns. | ||
• | The marginal revenue from publishing distribution is recognized upon distribution of the products. | ||
• | Sky Mexico program service revenues, including advances from customers for future DTH program services and installation fees, are recognized at the time the DTH service is provided. | ||
• | Cable television subscription, pay-per-view and installation fees are recognized in the period in which the services are rendered. | ||
• | Revenues from attendance to soccer games, including revenues from advance ticket sales for soccer games and other promotional events, are recognized on the date of the relevant event. | ||
• | Motion picture production and distribution revenues are recognized as the films are exhibited. |
F-13
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December 31, 2002 | 102.904 | |||
December 31, 2003 | 106.996 | |||
December 31, 2004 | 112.550 | |||
December 31, 2005 | 116.301 |
F-14
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F-15
Table of Contents
2004 | 2005 | |||||||
Non-interest bearing notes received as customer deposits and advances | Ps. | 10,553,476 | Ps. | 12,299,271 | ||||
Accounts receivable, including value-added tax receivables related to advertising services | 2,210,158 | 2,693,762 | ||||||
Allowance for doubtful accounts | (1,159,394 | ) | (1,096,733 | ) | ||||
Ps. | 11,604,240 | Ps. | 13,896,300 | |||||
F-16
Table of Contents
2004 | 2005 | |||||||
Transmission rights | Ps. | 4,321,899 | Ps. | 3,399,876 | ||||
Programming | 4,033,188 | 3,641,592 | ||||||
8,355,087 | 7,041,468 | |||||||
Non-current portion of: | ||||||||
Transmission rights | 2,225,541 | 1,618,079 | ||||||
Programming | 2,415,862 | 2,302,888 | ||||||
4,641,403 | 3,920,967 | |||||||
Current portion of transmission rights and programming | Ps. | 3,713,684 | Ps. | 3,120,501 | ||||
Ownership % | ||||||||||||
as of December | ||||||||||||
2004 | 2005 | 31, 2005 | ||||||||||
Accounted for by the equity method: | ||||||||||||
Univision(a) | Ps. | 5,926,633 | Ps. | 5,658,406 | 9.9 | % | ||||||
OCEN (see Note 2) | 516,828 | 500,747 | 40.0 | % | ||||||||
DTH TechCo Partners(b) | (833 | ) | — | 30.0 | % | |||||||
Volaris (see Note 2) | — | 240,465 | 25.0 | % | ||||||||
Other | 159,101 | 97,536 | ||||||||||
6,601,729 | 6,497,154 | |||||||||||
Other investments: | ||||||||||||
Held-to-maturity securities (see Note 1 (g))(c) | — | 893,855 | ||||||||||
Deposits in escrow(d) | 145,083 | 133,194 | ||||||||||
TechCo(b) | 144,960 | — | ||||||||||
Univision(a) | 23,653 | 23,653 | ||||||||||
Other | 67,512 | 39,653 | ||||||||||
381,208 | 1,090,355 | |||||||||||
Ps. | 6,982,937 | Ps. | 7,587,509 | |||||||||
(a) | The Group accounts for this investment under the equity method due to the Group’s continued ability to exercise significant influence over Univision’s operations. As of December 31, 2004 and 2005, the Group owned 16,594,500 shares Class “A” and 13,593,034 shares Class “T” of common stock of Univision, as well as warrants to acquire 6,374,864 shares Class “A” and 2,727,136 shares Class “T” of common stock of Univision. Substantially all of these warrants can be exercised at a price of U.S.$38.261 per share, and expire in December 2017 (see Note 9). Any shares of Univision’s common stock owned by the Group and those shares of Univision’s common stock that may be purchased by the Group in connection with related warrants and warrant purchase agreements are intended to be held as equity securities accounted for under the equity method. The warrants to purchase 6,274,864 shares of Univision’s Class “A” Common Stock and 2,725,136 shares of Univision’s Class “T” Common Stock are not accounted for at any cost since they were acquired by the Group as a consideration for surrendering certain governance rights previously held by the Group in Univision. The warrants to purchase 100,000 shares of Univision’s Class “A” Common Stock are accounted at acquisition cost and classified as other investments since the shares that may be purchased through these instruments are intended to be held by the Group as an equity investment in Univision (see Note 9). In September 2003, Univision and Hispanic Broadcasting Corporation (“HBC”), a leading Spanish-language radio group in the United States, completed a merger of their businesses. As a result of this merger, the Group (i) decreased its ownership in Univision from approximately 14.7% to 10.9% on a fully diluted basis; and (ii) increased the carrying value of its investment in Univision by recognizing a net other comprehensive income of approximately U.S.$250.6 million (Ps.3,057,553) in 2003 (see Note 14). The Group’s ownership stake in Univision as of December 31, 2005, was approximately 11.4% on a fully diluted basis. The carrying value of the Group’s net investment in Univision at December 31, 2005, also included goodwill in the amount of Ps.5,478,928 (see Note 7). The quoted market price of Univision’s common stock at December 31, 2005, and March 16, 2006, was U.S.$29.39 per share and U.S.$33.76 per share, respectively. |
F-17
Table of Contents
(b) | General partnership engaged in providing technical services to DTH ventures in Latin America through September 2005. During 2004, the Group provided funding to TechCo for approximately U.S.$4.5 million (Ps.51,349) in the form of long-term notes with principal and interest maturities in 2008, bearing annual interest at LIBOR plus 2.5%. As of December 31, 2004, promissory notes and accrued interest receivable due from TechCo were approximately U.S.$12.6 million (Ps.144,960). Additionally, in the fourth quarter of 2004, the Group made a capital contribution to TechCo in the amount of U.S.$0.9 million (Ps.10,258). In October 2005, this investment was disposed by the Group (see Note 2). | |
(c) | Held-to-maturity securities represent structured notes and corporate fixed income securities with maturities in 2008. These investments are stated at cost. | |
(d) | In connection with the disposal of an investment of the Group in 1997, the Group granted collateral to secure certain indemnification obligations which consisted, at December 31, 2004 and 2005, of short-term securities of approximately U.S.$12.6 million (Ps.145,083) and U.S.$12.5 million (Ps.133,194), respectively. After the expiration of applicable tax statutes of limitations, the collateral will be reduced to a de minimus amount. The collateral agreement will terminate in approximately two years (see Note 11). |
2004 | 2005 | |||||||
Buildings | Ps. | 7,807,516 | Ps. | 7,964,833 | ||||
Buildings improvements | 1,720,042 | 1,582,373 | ||||||
Technical equipment | 17,810,157 | 17,970,490 | ||||||
Satellite transponders | 1,714,647 | 1,636,152 | ||||||
Furniture and fixtures | 596,442 | 500,070 | ||||||
Transportation equipment | 1,172,949 | 1,105,876 | ||||||
Computer equipment | 1,488,757 | 1,413,731 | ||||||
32,310,510 | 32,173,525 | |||||||
Accumulated depreciation | (16,993,039 | ) | (17,174,543 | ) | ||||
15,317,471 | 14,998,982 | |||||||
Land | 3,827,822 | 3,820,812 | ||||||
Construction in progress | 652,805 | 908,753 | ||||||
Ps. | 19,798,098 | Ps. | 19,728,547 | |||||
F-18
Table of Contents
2004 | 2005 | |||||||||||||||||||||||
Gross | Gross | |||||||||||||||||||||||
Carrying | Accumulated | Net Carrying | Carrying | Accumulated | Net Carrying | |||||||||||||||||||
Amount | Amortization | Amount | Amount | Amortization | Amount | |||||||||||||||||||
Intangible assets with indefinite lives: | ||||||||||||||||||||||||
Goodwill | Ps. | 7,771,617 | Ps. | 7,200,018 | ||||||||||||||||||||
Publishing trademarks | 513,393 | 455,038 | ||||||||||||||||||||||
Television network concession | 602,608 | 602,608 | ||||||||||||||||||||||
Intangible assets with finite lives and deferred charges: | ||||||||||||||||||||||||
Licenses and software | Ps. | 1,053,735 | Ps. | (764,666 | ) | 289,069 | Ps. | 1,134,044 | Ps. | (793,578 | ) | 340,466 | ||||||||||||
Subscriber list | — | — | — | 570,047 | (137,249 | ) | 432,798 | |||||||||||||||||
Other intangible assets | 232,224 | (113,105 | ) | 119,119 | 195,791 | (72,937 | ) | 122,854 | ||||||||||||||||
Deferred financing costs (see Note 8) | 409,795 | (243,843 | ) | 165,952 | 1,059,585 | (200,094 | ) | 859,491 | ||||||||||||||||
Ps. | 1,695,754 | Ps. | (1,121,614 | ) | Ps. | 9,461,758 | Ps. | 2,959,467 | Ps. | (1,203,858 | ) | Ps. | 10,013,273 | |||||||||||
Foreign | ||||||||||||||||||||||||
Balance as of | Currency | Adjusted | Balance as of | |||||||||||||||||||||
December 31, | Translation | Goodwill/ | Impairment | December 31, | ||||||||||||||||||||
2004 | Acquisitions | Adjustments | Trademarks | Adjustments | 2005 | |||||||||||||||||||
Business Segments: | ||||||||||||||||||||||||
Television Broadcasting | Ps. | 1,279,742 | Ps. | 20,566 | Ps. | — | Ps. | — | Ps. | — | Ps. | 1,300,308 | ||||||||||||
Publishing Distribution | — | 23,670 | — | — | — | 23,670 | ||||||||||||||||||
Other Businesses | 36,499 | — | — | — | — | 36,499 | ||||||||||||||||||
Equity-method investees | 6,455,376 | — | (258,471 | ) | (357,364 | ) | — | 5,839,541 | ||||||||||||||||
Ps. | 7,771,617 | Ps. | 44,236 | Ps. | (258,471 | ) | Ps. | (357,364 | ) | Ps. | — | Ps. | 7,200,018 | |||||||||||
Trademarks (Publishing) | Ps. | 513,393 | Ps. | — | Ps. | (3,979 | ) | Ps. | (46,937 | ) | Ps. | (7,439 | ) | Ps. | 455,038 | |||||||||
F-19
Table of Contents
2004 | 2005 | |||||||
U.S.$5.3 million 11.875% Series “B” Senior Notes due 2006(1) | Ps. | 61,554 | Ps. | 56,777 | ||||
U.S.$200.0 million 8.625% Senior Notes due 2005(2) | 2,304,112 | — | ||||||
U.S.$300.0 in 2004 and U.S.$75.5 million in 2005 8% Senior Notes due 2011(2) (3) | 3,456,169 | 802,131 | ||||||
U.S.$300.0 million 8.50% Senior Notes due 2032(2) | 3,456,169 | 3,187,950 | ||||||
U.S.$600.0 million 6.625% Senior Notes due 2025(2) (3) | — | 6,375,900 | ||||||
U.S.$88.0 million 12.875% Senior Notes due 2007(4) | 1,013,810 | — | ||||||
U.S.$300.0 million 9.375% Senior Notes due 2013(5) | 3,456,169 | 3,187,950 | ||||||
Other U.S. dollar debt(6) | 108,622 | 42,062 | ||||||
8.15% UDI-denominated Notes due 2007(3) (7) | 3,966,662 | 941,071 | ||||||
Mexican peso long-term loans(8) | 4,011,851 | 3,882,460 | ||||||
Sky Mexico’s long-term loan(4) | 1,045,727 | — | ||||||
Other Mexican peso bank loans(9) | 99,199 | 446 | ||||||
Other currency debt | 2,068 | 950 | ||||||
Total long-term debt | 22,982,112 | 18,477,697 | ||||||
Less: Current portion | 3,406,973 | 340,457 | ||||||
Long-term debt, net of current portion | Ps. | 19,575,139 | Ps. | 18,137,240 | ||||
Satellite transponder lease obligation(10) | Ps. | 1,441,861 | Ps. | 1,262,537 | ||||
Less: Current portion | 73,101 | 75,604 | ||||||
Satellite transponder lease obligation, net of current portion | Ps. | 1,368,760 | Ps. | 1,186,933 | ||||
(1) | These securities are unsecured, unsubordinated obligations of the Company, rank pari passu in right of payment with all existing and future unsecured, unsubordinated obligations of the Company, are senior in right of payment to all future subordinated indebtedness of the Company, and are effectively subordinated to all existing and future liabilities of the Company’s subsidiaries. Interest on these securities, including additional amounts payable in respect of certain Mexican withholding taxes, is 12.49% per annum and is payable semi-annually. | |
(2) | These Senior Notes are unsecured obligations of the Company, rank equally in right of payment with all existing and future unsecured and unsubordinated indebtedness of the Company, and are junior in right of payment to all of the existing and future liabilities of the Company’s subsidiaries. Interest on the Senior Notes due 2005, 2011, 2025 and 2032, including additional amounts payable in respect of certain Mexican withholding taxes, is 9.07%, 8.41%, 6.97% and 8.94% per annum, respectively, and is payable semi-annually. These Senior Notes may not be redeemed prior to maturity, except in the event of certain changes in law affecting the Mexican withholding tax treatment of certain payments on the securities, in which case the securities will be redeemable, as a whole but not in part, at the option of the Company. The Senior Notes due 2011 and 2032 were priced at 98.793% and 99.431%, respectively, for a yield to maturity of 8.179% and 8.553%, respectively. The agreement of these Senior Notes contains covenants that limit the ability of the Company and certain restricted subsidiaries engaged in Television Broadcasting, Pay Television Networks and Programming Exports, to incur or assume liens, perform sale and leaseback transactions, and consummate certain mergers, consolidations and similar transactions. Substantially all of these Senior Notes are registered with the U.S. Securities and Exchange Commission (the “SEC”). | |
(3) | In March and May 2005, the Company issued these Senior Notes in the aggregate amount of U.S.$400.0 million and U.S.$200.0 million, respectively, which were priced at 98.081% and 98.632%, respectively, for a yield to maturity of 6.802% and 6.787%, respectively. The net proceeds of the U.S.$400.0 million issuance, together with cash on hand, were used to fund the Group’s tender offers made and expired in March 2005 for any or all of the Senior Notes due 2011 and the Mexican peso equivalent of UDI-denominated Notes due 2007, and prepaid principal amount of these securities in the amount of approximately U.S.$222.0 million and Ps.2,935,097 (nominal), respectively, representing approximately 74% and 76% of the outstanding principal amount of these securities, respectively. The net proceeds of the U.S.$200.0 million issuance were used for corporate purposes, including the prepayment of some of the Group’s outstanding indebtedness. |
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(4) | In January 2005, Sky Mexico prepaid all of the outstanding amounts of these Senior Notes by using the net proceeds of a long-term credit agreement entered into in December 2004 by Sky Mexico with a Mexican bank in the aggregate principal amount of Ps.1,045,727 (Ps.1,012,000 nominal), with a partial maturity (50%) in 2010 and the remainder in 2011, and interest of 10.55% per annum payable on a monthly basis. In July 2005, Sky Mexico prepaid all of the outstanding amounts of the Ps.1,045,727 loan with the net proceeds of a long-term credit agreement entered into by Sky Mexico with the Company in the same principal amount, and with the same maturity and interest conditions. | |
(5) | In September 2003, Innova completed the offering of these unsecured and unsubordinated Senior Notes, which indentures contain certain restrictive covenants for Innova on additional indebtedness, liens, sales and leasebacks, restricted payments, asset sales, and certain mergers, consolidations and similar transactions. Interest on these Senior Notes, including additional amounts payable in respect of certain Mexican withholding taxes, is 9.8580%, and is payable semi-annually. Innova may, at its own option, redeem these Senior Notes, in whole or in part, at any time on or after September 19, 2008 at redemption prices from 104.6875% to 101.5625% between September 19, 2008 through September 18, 2011, or 100% commencing on September 19, 2011, plus accrued and unpaid interest, if any. Additionally, on or before September 19, 2006, Innova may, at its own option and subject to certain requirements, use the proceeds from one or more qualified equity offerings to redeem up to 35% of the aggregate principal amount of these Senior Notes at 109.375% of their principal amount, plus accrued and unpaid interest. | |
(6) | Includes notes payable to banks, bearing annual interest rates which vary between 0.11 and 1.25 points above LIBOR. The maturities of this debt at December 31, 2005, are various from 2006 to 2010. | |
(7) | Notes denominated in Mexican Investment Units (“Unidades de Inversión” or “UDIs”), representing 1,086,007,800 UDIs and 258,711,400 UDIs at December 31, 2004 and 2005, respectively. Interest on these notes is payable semi-annually. The balance as of December 31, 2004 and 2005 includes restatement of Ps.866,681 and Ps.226,404, respectively. The UDI value as of December 31, 2005, was of Ps.3.637532 per UDI. | |
(8) | In May 2003, May 2004 and October 2004, the Company entered into long-term credit agreements with a Mexican bank in an aggregate amount of Ps.800,000, Ps.1,162,500 and Ps.2,000,000, respectively, with various maturities from 2004 to 2012. Interest on these loans is, in a range of 8.925% to 10.35% per annum, and is payable on a monthly basis. The net proceeds of these loans were primarily used to pay, prepay and refinance amounts outstanding under certain Company’s debt with original maturities from 2003 to 2006. Under the terms of these credit agreements, the Company and certain restricted subsidiaries engaged in television broadcasting, pay television networks and programming exports are required to maintain (a) certain financial coverage ratios related to indebtedness and interest expense; and (b) certain restrictive covenants on indebtedness, dividend payments, issuance and sale of capital stock, and liens. | |
(9) | The 2004 balance also include a long-term loan of Ps.99,199, granted by a commercial Mexican bank in 2001 to refinance the redemption of the Company’s Senior Discount Debentures then outstanding, with principal and interest thereof payable on a quarterly basis through May 2006 and annual interest rate equal to the Mexican interbank rate plus 30 basis points. The terms of this loan include certain financial ratios and covenants. In May 2005, the Group prepaid all of the outstanding amounts of a Ps.80.0 million long-term loan, which originally matured in 2006. | |
(10) | Sky Mexico is committed to pay a monthly fee of U.S.$1.7 million under a capital lease agreement entered into with PanAmSat Corporation in February 1999 for satellite signal reception and retransmission service from 12 KU-band transponders on satellite PAS-9, which became operational in September 2000. The service term for PAS-9 will end at the earlier of (a) the end of 15 years or (b) the date PAS-9 is taken out of service. The present value of Sky Mexico future obligations from the PAS-9 agreement was determined using the Sky Mexico incremental borrowing rate at the lease commencement date of 11.5% (see Note 6). Through September 2004, the obligations of Sky Mexico under the PAS-9 agreement were proportionately guaranteed by the Company and the other Sky Mexico equity owners in relation to their respective ownership interests. Beginning October 2004, this obligation is being guaranteed by the Company at 51% (see Note 11). |
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2006 | Ps. | 340,457 | ||
2007 | 946,024 | |||
2008 | 484,836 | |||
2009 | 1,163,171 | |||
2010 | 1,026,822 | |||
Thereafter | 14,516,387 | |||
Ps. | 18,477,697 | |||
2006 | Ps. | 216,781 | ||
2007 | 216,781 | |||
2008 | 216,781 | |||
2009 | 216,781 | |||
2010 | 216,781 | |||
Thereafter | 1,012,621 | |||
2,096,526 | ||||
Less: amount representing interest | 833,989 | |||
Ps. | 1,262,537 | |||
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2004 | 2005 | |||||||||||||||
Carrying Value | Fair Value | Carrying Value | Fair Value | |||||||||||||
Assets: | ||||||||||||||||
Univision warrants (see Note 5) | Ps. | 23,653 | Ps. | 1,519,424 | Ps. | 23,653 | Ps. | 1,318,326 | ||||||||
Held-to-maturity securities (see Note 5) | — | — | 893,855 | 884,113 | ||||||||||||
Liabilities: | ||||||||||||||||
Senior Notes due 2005, 2011, 2025 and 2032 | Ps. | 9,216,450 | Ps. | 10,361,940 | Ps. | 10,365,981 | Ps. | 11,280,616 | ||||||||
Other long-term debt securities | 4,531,533 | 5,025,258 | 3,244,727 | 3,577,637 | ||||||||||||
UDI-denominated long-term securities | 3,966,662 | 4,298,260 | 941,071 | 1,002,817 | ||||||||||||
Long-term notes payable to Mexican banks | 5,057,578 | 5,199,561 | 3,882,460 | 3,964,110 | ||||||||||||
Derivative financial instruments: | ||||||||||||||||
Assets: | ||||||||||||||||
UDI forwards(a) | Ps. | 104,927 | Ps. | 146,631 | Ps. | — | Ps. | — | ||||||||
Liabilities: | ||||||||||||||||
Sky Mexico’s interest rate swaps(b) | Ps. | — | Ps. | 12,200 | Ps. | 73,522 | Ps. | 73,522 | ||||||||
Foreign currency forwards(c) | 24,954 | 43,897 | 3,366 | 3,366 | ||||||||||||
Interest rate swaps(d) | 20,294 | 32,837 | 300,481 | 300,481 |
(a) | In connection with the notes denominated in Mexican Investment Units (“Unidades de Inversión” or “UDIs”), during April, 2004, the Company entered into forward contracts with three financial institutions covering the total amount of UDIs payable at the maturity of the notes in 2007. Through these contracts, the Company fixed the price of the UDI at Ps.3.41067 in exchange for payments of interest over the notional amount in pesos at an average rate of 4.06% with half-yearly payments. As of December 31, 2004, the Company recorded a net benefit of Ps.104,927 derived from the difference in the price of the UDI published by the Mexican Central Bank at that date and the price fixed in these contracts. In March 2005, in connection with the issuance of the Senior Notes due 2025 and as a result of the tender offer of the UDI-denominated Notes due 2007, the Company terminated early these contracts and recorded an additional net benefit of Ps.6,302, in the year ended December 31, 2005. | |
(b) | In February 2004, Sky Mexico entered into coupon swap agreements to hedge a portion of its U.S. dollar foreign exchange exposure related to its Senior Notes due 2013. Under these transactions, Sky Mexico receives semi-annual payments calculated based on the aggregate notional amount of U.S.$300.0 million at an annual rate of 9.375%, and Sky Mexico makes monthly payments calculated based on an aggregate notional amount of approximately Ps.3,282,225 at an annual rate of 10.25%. These transactions will terminate in September 2008. As of December 31, 2005, Sky Mexico recorded the change in fair value of these transactions in the integral cost of financing (foreign exchange loss). | |
(c) | In 2004 and 2005, the Company entered into forward contracts with diverse financial institutions to buy U.S.$185.0 million of the Senior Notes due 2005 for hedge purposes. The average price fixed in these agreements was Ps.11.73 per U.S. dollar. In the years ended December 31, 2004 and 2005, as a result of the depreciation of the exchange rate of the U.S. dollar in relation to the Mexican peso, the Company recorded a loss for these transactions of Ps.24,954 and Ps.148,955, respectively, in the integral cost of financing (foreign exchange gain or loss). In addition, as of December 31, 2005, the Group had entered into forward exchange contracts to cover cash flow requirements on a notional amount of U.S.$85.0 million to exchange U.S. dollars and Mexican pesos at an average exchange rate of Ps.10.85 per U.S. dollar in 2006. | |
(d) | In order to reduce the adverse effects of exchange rates on the Senior Notes due 2011, 2025 and 2032, during 2004 and 2005, the Company entered into interest rate swap agreements with various financial institutions that allow the Company to hedge against Mexican peso depreciation on interest payments for a period of five years. Under these transactions, the Company receives semi-annual payments based on the aggregate notional amount of U.S.$550.0 million and U.S.$890.0 million as of December 31, 2004 and 2005, respectively, at an average annual rate of 8.27% and 7.37%, respectively, and the Company makes semi-annual payments based on an aggregate notional amount of approximately Ps.6,177,191 and Ps.9,897,573 as of December 31, 2004 and 2005, respectively, at an average annual rate of 9.26% and 8.28% respectively, without an exchange of the notional amount upon which the payments are based. As of December 31, 2004, the Company recorded a loss in the integral cost of financing (foreign exchange loss) derived of comparing the interest payable calculated at the exchange rate of the balance sheet date at year-end. In the year ended December 31, 2005, the Company recorded a loss of Ps.368,345 in the integral cost of financing (foreign |
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2004 | 2005 | |||||||
Seniority premiums: | ||||||||
Actuarial present value of benefit obligations: | ||||||||
Vested benefit obligations | Ps. | 160,244 | Ps. | 153,110 | ||||
Nonvested benefit obligations | 68,843 | 79,691 | ||||||
Accumulated benefit obligation | 229,087 | 232,801 | ||||||
Benefit attributable to projected salaries | 17,473 | 18,484 | ||||||
Projected benefit obligation | 246,560 | 251,285 | ||||||
Plan assets | 366,057 | 450,594 | ||||||
Projected benefit obligation in excess of plan assets | 119,497 | 199,309 | ||||||
Items to be amortized over a 12-year period: | ||||||||
Transition obligation | 139,004 | 118,424 | ||||||
Unrecognized prior service cost | (109,883 | ) | (108,879 | ) | ||||
Unrecognized net loss (gain) from experience differences | 72,747 | (8,361 | ) | |||||
101,868 | 1,184 | |||||||
Net projected asset | 221,365 | 200,493 | ||||||
Pension plans: | ||||||||
Actuarial present value of benefit obligations: | ||||||||
Vested benefit obligations | 233,192 | 273,862 | ||||||
Nonvested benefit obligations | 280,498 | 295,036 | ||||||
Accumulated benefit obligation | 513,690 | 568,898 | ||||||
Benefit attributable to projected salaries | 134,529 | 144,218 | ||||||
Projected benefit obligation | 648,219 | 713,116 | ||||||
Plan assets | 788,636 | 975,350 | ||||||
Projected benefit obligation in excess of plan assets | 140,417 | 262,234 | ||||||
Items to be amortized over a 19-year period: | ||||||||
Transition obligation | 136,311 | 123,959 | ||||||
Unrecognized prior service cost | (16,628 | ) | (14,727 | ) | ||||
Unrecognized net loss from experience differences | (340,706 | ) | (473,084 | ) | ||||
(221,023 | ) | (363,852 | ) | |||||
Net projected liability | (80,606 | ) | (101,618 | ) | ||||
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2004 | 2005 | |||||||
Severance indemnities: | ||||||||
Actuarial present value of benefit obligations: | ||||||||
Vested benefit obligations | — | — | ||||||
Nonvested benefit obligations | — | 265,862 | ||||||
Accumulated benefit obligation | — | 265,862 | ||||||
Benefit attributable to projected salaries | — | 25,173 | ||||||
Projected benefit obligation | — | 291,035 | ||||||
Plan assets | — | — | ||||||
Net projected liability | — | (291,035 | ) | |||||
Total labor assets (liabilities) | Ps. | 140,759 | Ps. | (192,160 | ) | |||
Thousands of | ||||
U.S. dollars | ||||
2006 | U.S.$14,866 | |||
2007 | 14,418 | |||
2008 | 13,067 | |||
2009 | 10,898 | |||
2010 and thereafter | 24,404 | |||
U.S.$77,653 | ||||
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Authorized | Repurchased | Acquired by | Acquired by a | |||||||||||||||||
and | by the | the Company’s | Company’s | |||||||||||||||||
Issued(1) | Company(2) | Trust(3) | Subsidiary(4) | Outstanding | ||||||||||||||||
Series “A” Shares | 124,736,244 | (1,166,260 | ) | (7,406,648 | ) | (1,917,483 | ) | 114,245,853 | ||||||||||||
Series “B” Shares | 60,269,683 | (1,026,309 | ) | (4,019,585 | ) | (1,253,198 | ) | 53,970,590 | ||||||||||||
Series “D” Shares | 92,133,722 | (1,632,764 | ) | (2,677,881 | ) | (1,960,833 | ) | 85,862,244 | ||||||||||||
Series “L” Shares | 92,133,722 | (1,632,764 | ) | (2,677,881 | ) | (1,960,833 | ) | 85,862,244 | ||||||||||||
Total shares | 369,273,371 | (5,458,097 | ) | (16,781,995 | ) | (7,092,347 | ) | 339,940,931 | ||||||||||||
Shares in the form of CPOs(5) | 307,989,072 | (5,458,097 | ) | (8,951,772 | ) | (6,554,784 | ) | 287,024,418 | ||||||||||||
CPOs(5) | 2,632,385 | (46,650 | ) | (76,511 | ) | (56,024 | ) | 2,453,200 | ||||||||||||
(1) | In April 2004, the Company’s stockholders approved a restructuring of the Company’s capital stock (the “Recapitalization”), which comprised the following: (i) a 25-for-one stock split, which became effective on July 26, 2004 (all the Company’s share and per share data in these financial statements are presented on a post-split basis); (ii) the creation of the Series “B” Shares; (iii) a 14-for-25 stock dividend in the amount of Ps. 968,262 (nominal of Ps. 906,114); and (iv) an increase in the number of shares represented by each outstanding CPO. The Recapitalization increased the number of the Company’s shares by a factor of 39 on a pre-split basis but did not affect the Company’s total equity or dilute the equity interest of any shareholder. | |
(2) | In 2003, 2004 and 2005 the Company repurchased 2,370,007, 1,813,102 and 3,645,463 shares, respectively, in the form of 31,600, 15,497 and 31,158 CPOs, respectively, in the amount of Ps. 579,821, Ps. 403,107 and Ps. 1,065,165, respectively, in connection with a three-year share repurchase program of up to U.S.$400.0 million, exercised at the discretion of management and subject to legal, market and other conditions. In April and December 2003, the Company’s stockholders approved the cancellation of 2,370,068 shares of capital stock in the form of 31,601 CPOs, which were primarily repurchased under this program. In 2004, the Company resold 468 shares in the form of 4 CPOs, repurchased under this program, in the amount of Ps. 105. |
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(3) | In December 2003, in connection with the approval of the Company’s shareholders to issue additional Series “A” Shares for the Long-Term Retention Plan described below, the Company increased its capital stock in the amount of Ps. 4,373,269 by issuing additional 10,757,689 Series “A” Shares, not in the form of CPOs, of which Ps. 3,967,836 were recognized as additional paid-in capital. Following this capital stock increase, the 10,757,689 Series “A” Shares were acquired by a Company’s trust for the purpose of implementing the Company’s Long-Term Retention Plan. | |
(4) | In connection with the Company’s Stock Purchase Plan described below. | |
(5) | In the second half of 2004, the Company issued 392,837 additional CPOs by combining 9,820,921 Series “A” Shares, 8,642,411 Series “B” Shares, 13,749,290 Series “D” Shares and 13,749,290 Series “L” Shares, not in the form of CPOs, which were owned by certain shareholders (equivalent to 312,880 CPOs), and were acquired by a Company’s trust (equivalent to 76,511 CPOs) and a Company’s subsidiary (equivalent to 3,446 CPOs). Additionally, in April 2005, the Company issued 4 additional CPOs by combining 107 Series “A” Shares, 94 Series “B” Shares, 150 Series “D” Shares and 150 Series “L” Shares, not in the form of CPOs, which were acquired by a Group’s trust for a pension plan. |
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December 31, 2005 | ||
Dividend yield | 3.0% | |
Expected volatility(1) | 22.34% | |
Risk-free interest rate | 8.2% | |
Expected life of awards (in years) | 4.1 years |
(1) | Volatility was determined by reference to historically observed prices of the Group’s CPO. |
Stock Purchase Plan | Long-term Retention Plan | |||||||||||||||
Weighted-Average | Weighted-Average | |||||||||||||||
CPOs | Exercise Price | CPOs | Exercise Price | |||||||||||||
Granted | 120,490 | 13.40 | 47,823 | 13.45 | ||||||||||||
Exercised | (69,988 | ) | 13.13 | — | — | |||||||||||
Forfeited | (2,320 | ) | 13.40 | (1,039 | ) | 13.45 | ||||||||||
Outstanding at end of year | 48,182 | 15.41 | 46,784 | 13.45 | ||||||||||||
Exercisable at end of year | 4,472 | 11.45 | — | — | ||||||||||||
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2003 | 2004 | 2005 | ||||||||||
Net income | Ps. | 3,909,381 | Ps. | 4,460,607 | Ps. | 6,125,542 | ||||||
Other comprehensive (loss) income, net: | ||||||||||||
Foreign currency translation adjustments, net(1) | (166,141 | ) | (200,651 | ) | (178,171 | ) | ||||||
Result from holding non-monetary assets, net(2) | 285,104 | (131,764 | ) | (531,349 | ) | |||||||
Gain (loss) on equity accounts of investees (see Note 5)(3) | 3,133,953 | 123,591 | (189,400 | ) | ||||||||
Total other comprehensive income (loss), net | 3,252,916 | (208,824 | ) | (898,920 | ) | |||||||
Comprehensive income | Ps. | 7,162,297 | Ps. | 4,251,783 | Ps. | 5,226,622 | ||||||
(1) | The amounts for 2003, 2004 and 2005 include the foreign exchange (loss) gain of (Ps. 509,774), Ps. 44,064 and Ps. 416,856, respectively, which were hedged by the Group’s net investment in Univision (see Notes 1(c) and 17). | |
(2) | Represents the difference between specific costs (net replacement cost or Specific Index) of non-monetary assets and the restatement of such assets using the NCPI, net of deferred tax (provision) benefit of (Ps. 162,351), Ps. 56,656 and Ps. 212,665 for the years ended December 31, 2003, 2004 and 2005, respectively. | |
(3) | Represents the gains or losses on the dilution of investments in equity investees and the recognition of the components of other comprehensive income recorded by the equity investees. |
Cumulative | Cumulative | |||||||||||||||||||||||
Gain on | Result from | Result from | Cumulative | Accumulated | ||||||||||||||||||||
Issuance of | Accumulated | Holding Non- | Foreign | Effect of | Other | |||||||||||||||||||
Shares of | Monetary | Monetary | Currency | Deferred | Comprehensive | |||||||||||||||||||
Investees | Result | Assets | Translation | Income Taxes | (Loss) Income | |||||||||||||||||||
Balance at January 1, 2003 | Ps. | 796,771 | Ps. | (32,591 | ) | Ps. | (2,024,173 | ) | Ps. | (1,444,979 | ) | Ps. | (2,986,569 | ) | Ps. | (5,691,541 | ) | |||||||
Current year change | 3,133,953 | — | 285,104 | (166,141 | ) | — | 3,252,916 | |||||||||||||||||
Balance at December 31, 2003 | 3,930,724 | (32,591 | ) | (1,739,069 | ) | (1,611,120 | ) | (2,986,569 | ) | (2,438,625 | ) | |||||||||||||
Current year change | 123,591 | — | (131,763 | ) | (200,652 | ) | — | (208,824 | ) | |||||||||||||||
Balance at December 31, 2004 | 4,054,315 | (32,591 | ) | (1,870,832 | ) | (1,811,772 | ) | (2,986,569 | ) | (2,647,449 | ) | |||||||||||||
Current year change | (189,400 | ) | — | (531,349 | ) | (178,171 | ) | — | (898,920 | ) | ||||||||||||||
Balance at December 31, 2005 | Ps. | 3,864,915 | Ps. | (32,591 | ) | Ps. | (2,402,181 | ) | Ps. | (1,989,943 | ) | Ps. | (2,986,569 | ) | Ps. | (3,546,369 | ) | |||||||
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2004 | 2005 | |||||||
Capital stock | Ps. | 3,791,218 | Ps. | 3,790,762 | ||||
Retained earnings | (3,849,687 | ) | (3,662,595 | ) | ||||
Cumulative result from holding non-monetary assets | (248,055 | ) | (305,124 | ) | ||||
Accumulated monetary result | (6,999 | ) | (850 | ) | ||||
Cumulative effect of deferred income taxes | (50,514 | ) | (55,342 | ) | ||||
Net income for the year | 239,475 | 1,084,021 | ||||||
Ps. | (124,562 | ) | Ps. | 850,872 | ||||
2003 | 2004 | 2005 | ||||||||||
Revenues: | ||||||||||||
Royalties (Univision)(a) | Ps. | 1,163,210 | Ps. | 1,135,025 | Ps. | 1,107,178 | ||||||
Soccer transmission rights (Univision) | 45,607 | 73,582 | 91,647 | |||||||||
Programming production and transmission rights(b) | 334,557 | 226,249 | 93,202 | |||||||||
Administrative services(c) | 75,618 | 53,626 | 73,738 | |||||||||
Interest income | 136,909 | 926 | 1,245 | |||||||||
Advertising(d) | 225,534 | 112,000 | 32,396 | |||||||||
Ps. | 1,981,435 | Ps. | 1,601,408 | Ps. | 1,399,406 | |||||||
Costs: | ||||||||||||
Donations | Ps. | 75,513 | Ps. | 95,290 | Ps. | 106,171 | ||||||
Administrative services(c) | 40,583 | 5,635 | 26,607 | |||||||||
Other | 61,710 | 77,116 | 233,304 | |||||||||
Ps. | 177,806 | Ps. | 178,041 | Ps. | 366,082 | |||||||
(a) | The Group receives royalties from Univision for programming provided pursuant to a program license agreement that expires in December 2017. Royalties are determined based upon a percentage of combined net sales of Univision, which was 9% plus an incremental percentage of up to 3% over additional sales in 2003, 2004 and 2005. | |
(b) | Services rendered to Innova and other affiliates in 2003, Innova for the three months ended March 31, 2004, and Endemol and other affiliates in 2004 and 2005. | |
(c) | The Group receives revenue from and is charged by affiliates for various services, such as equipment rental, security and other services, at rates which are negotiated. The Group provides management services to affiliates, which reimburse the Group for the incurred payroll and related expenses. | |
(d) | Advertising services rendered to Innova in 2003 and for the three months ended March 31, 2004, and to OCEN and Univision in 2003, 2004 and 2005. | |
Other transactions with related parties carried out by the Group in the normal course of business include the following: | ||
(a) | A consulting firm owned by a relative of one of the Group’s directors, which has, from time to time, provided consulting services and research in connection with the effects of the Group’s programming on its viewing audience. | |
(b) | From time to time, a Mexican bank made loans to the Group, on terms substantially similar to those offered by the bank to third parties. One of the Group’s directors is a member of the board of this bank and another of the Group’s directors is the Chairman of the board of this bank. Also, other members of the Group’s Board serve as board members of this bank. | |
(c) | Two of the Group’s directors and one of the Group’s alternate directors are members of the board as well as shareholders of a Mexican company, which is a producer, distributor and exporter of beer in Mexico. Such company purchases advertising services from the Group in connection with the promotion of its products from time to time, paying rates applicable to third-party advertisers for these advertising services. |
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Table of Contents
(d) | Several other members of the Group’s current board serve as members of the boards and/or shareholders of other companies, some of which purchased advertising services from the Group in connection with the promotion of their respective products and services. | |
(e) | During 2003, 2004 and 2005, a professional services firm in which a current director and two alternate directors maintain interest provided legal advisory services to the Group in connection with various corporate matters. Total fees for such services amounted to Ps. 8,774, Ps. 19,184 and Ps. 17,717, respectively. |
2004 | 2005 | |||||||
DIRECTV (payable in connection with the acquisition of a subscriber list, see Notes 2 and 7) | Ps. | — | Ps. | (704,868 | ) | |||
CIE (see Note 2) | — | 191,277 | ||||||
News Corp. (see Note 2) | (59,198 | ) | (46,314 | ) | ||||
OCEN (see Notes 2 and 7) | (7,527 | ) | 3,642 | |||||
Univision (see Note 5) | 90,156 | 88,976 | ||||||
Other | 55,530 | 11,384 | ||||||
Ps. | 78,961 | Ps. | (455,903 | ) | ||||
2003 | 2004 | 2005 | ||||||||||
Interest expense(1) | Ps. | 1,495,413 | Ps. | 2,165,217 | Ps. | 2,134,499 | ||||||
Interest income | (706,409 | ) | (678,391 | ) | (932,124 | ) | ||||||
Foreign exchange (gain) loss, net(2) | (210,170 | ) | 95,179 | 727,547 | ||||||||
Loss (gain) from monetary position(3) | 89,135 | (15,318 | ) | (147,892 | ) | |||||||
Ps. | 667,969 | Ps. | 1,566,687 | Ps. | 1,782,030 | |||||||
(1) | Interest expense in 2003 includes Ps. 151,448, derived from the restatement of the Company’s UDI-denominated debt securities, and in 2004 and 2005 includes Ps. 209,232 and Ps. 38,077, respectively, derived from the UDI index restatement of Company’s UDI-denominated debt securities and a net gain from related derivative contracts of Ps. 31,387 and Ps. 6,302, respectively (see Notes 8 and 9). | |
(2) | Net foreign exchange gain in 2003 includes a net loss from foreign currency option contracts of Ps. 19,375 and net foreign exchange loss in 2004 and 2005 includes a net loss from foreign currency derivative contracts of Ps. 99,468 and Ps. 712,259, respectively. A foreign exchange loss in 2003 of Ps. 509,774, and a foreign exchange gain in 2004 and 2005 of Ps. 44,064 and Ps. 416,856, respectively, were hedged by the Group’s net investment in Univision and recognized in stockholders’ equity as other comprehensive loss (see Notes 1(c) and 14). | |
(3) | The gain or loss from monetary position represents the effects of inflation, as measured by the NCPI in the case of Mexican companies, or the general inflation index of each country in the case of foreign subsidiaries, on the monetary assets and liabilities at the beginning of each month. It also includes monetary loss in 2003, 2004 and 2005 of Ps. 147,438, Ps. 187,800 and Ps. 133,220, respectively, arising from temporary differences of non-monetary items in calculating deferred income tax (see Note 20). |
F-31
Table of Contents
2003 | 2004 | 2005 | ||||||||||
Restructuring charges: | ||||||||||||
Severance costs | Ps. | 205,430 | Ps. | 151,196 | Ps. | 41,352 | ||||||
Non-recurring charges: | ||||||||||||
Payment of vested and non-vested salary benefits(1) | 308,915 | — | — | |||||||||
Loss on disposal of nationwide paging business (see Notes 2 and 6) | 178,889 | — | — | |||||||||
Impairment adjustments(2) | — | 237,665 | 7,439 | |||||||||
Expenses of debt placement(3) | — | — | 181,111 | |||||||||
Other | 21,172 | 19,562 | — | |||||||||
Ps. | 714,406 | Ps. | 408,423 | Ps. | 229,902 | |||||||
(1) | Benefits paid to certain of the Group’s union employees. | |
(2) | During 2004, the Group tested for impairment the carrying value of goodwill and other intangible assets. As a result of such testing, impairment adjustments were made to goodwill related primarily to the Group’s Publishing Distribution segment and publishing trademarks in the amount of Ps. 196,225 and Ps. 41,440, respectively. For purposes of the goodwill impairment test, the fair value of the related reporting unit was estimated using appraised valuations by experts. | |
(3) | Related with Senior Notes due 2011 and Notes denominated in Mexican Investment Units (UDIs) due 2007 (see Note 8). |
2003 | 2004 | 2005 | ||||||||||
(Gain) loss on disposition of investments, net (see Note 2) | Ps. | (482,781 | ) | Ps. | 138,284 | Ps. | 172,286 | |||||
Amortization of goodwill (see Note 1(i)) | 500,755 | — | — | |||||||||
Provision for doubtful non-trade accounts and write-off of other receivables | 11,555 | 39,028 | 14,925 | |||||||||
Write-off of goodwill (see Note 2)(1) | 123,847 | — | — | |||||||||
Donations (see Note 16) | 175,983 | 170,847 | 120,048 | |||||||||
Financial advisory and professional services(2) | 55,783 | 69,145 | 72,479 | |||||||||
Loss on disposition of fixed assets | 230,976 | 68,581 | 111,090 | |||||||||
Other (income) expense, net | (25,617 | ) | 46,275 | (26,608 | ) | |||||||
Ps. | 590,501 | Ps. | 532,160 | Ps. | 464,220 | |||||||
(1) | In 2003, write-offs of unamortized goodwill in the amount of Ps. 123,847, were recognized in connection with the recoverability evaluation of certain long-lived assets of the Group. | |
(2) | Includes financial advisory services in connection with contemplated dispositions and strategic planning projects and professional services in connection with certain litigation and other matters (see Notes 2, 12 and 16). |
F-32
Table of Contents
2003 | 2004 | 2005 | ||||||||||
Income tax and asset tax, current | Ps. | 1,136,994 | Ps. | 578,701 | Ps. | 1,539,020 | ||||||
Income tax and asset tax, deferred | (360,946 | ) | 630,108 | (787,777 | ) | |||||||
Ps. | 776,048 | Ps. | 1,208,809 | Ps. | 751,243 | |||||||
% | ||||||||||||
2003 | 2004 | 2005 | ||||||||||
Tax at the statutory rate on income before provisions | 34 | 33 | 30 | |||||||||
Differences in inflation adjustments for tax and book purposes | 2 | 2 | 1 | |||||||||
Hedge | (3 | ) | — | 1 | ||||||||
Non-deductible items | 4 | 3 | — | |||||||||
Special tax consolidation items | (1 | ) | — | (2 | ) | |||||||
Unconsolidated income tax | 6 | 2 | — | |||||||||
Minority interest | 11 | (4 | ) | (2 | ) | |||||||
Excess in tax provision of prior years | 4 | (2 | ) | (1 | ) | |||||||
Changes in valuation allowances: | ||||||||||||
Asset tax | 6 | 4 | — | |||||||||
Tax loss carryforwards | — | 5 | (1 | ) | ||||||||
Effect of change in income tax rates | 4 | — | — | |||||||||
Foreign operations | (18 | ) | (9 | ) | (5 | ) | ||||||
Recoverable income tax from repurchase of shares | — | (5 | ) | — | ||||||||
Use of unconsolidated tax losses(a) | (32 | ) | (10 | ) | (12 | ) | ||||||
Provision for income tax and the asset tax | 17 | 19 | 9 | |||||||||
(a) | In 2003 and 2004, this amount represents the effect of the use of tax loss carryforwards arising from the acquisition of Telespecialidades in June 2003, and certain other subsidiaries in the second half of 2004. In 2005, this amount represents the effect of the use of tax losses in connection with the acquisition of Comtelvi (see Note 2). |
Amount | Expiration | |||||||
Operating tax loss carryforwards: | ||||||||
Unconsolidated: | ||||||||
Mexican subsidiaries(1) | Ps. | 3,762,178 | From 2006 to 2015 | |||||
Non-Mexican subsidiaries(2) | 936,277 | From 2006 to 2024 | ||||||
4,698,455 | ||||||||
Capital tax loss carryforwards: | ||||||||
Unconsolidated Mexican subsidiary(3) | 388,320 | From 2009 to 2015 | ||||||
Ps. | 5,086,775 | |||||||
(1) | During 2003, 2004 and 2005, certain Mexican subsidiaries utilized unconsolidated operating tax loss carryforwards of Ps. 6,973,809, Ps. 2,186,619 and Ps. 447,651, respectively. In 2005, that amount includes the operating tax loss carryforwards related to the minority interest of Sky Mexico. | |
(2) | Approximately the equivalent of U.S.$88.1 million for subsidiaries in Spain, South America and the United States. | |
(3) | These carryforwards can only be used in connection with capital gains to be generated by such subsidiary. |
F-33
Table of Contents
2004 | 2005 | |||||||
Assets: | ||||||||
Accrued liabilities | Ps. | 784,965 | Ps. | 806,837 | ||||
Goodwill | 881,452 | 801,307 | ||||||
Tax loss carryforwards | 1,573,582 | 1,245,149 | ||||||
Allowance for doubtful accounts | 428,037 | 412,697 | ||||||
Customer advances | 1,604,641 | 1,378,988 | ||||||
Other items | 324,868 | 221,434 | ||||||
Liabilities: | ||||||||
Inventories | (756,675 | ) | (216,332 | ) | ||||
Property, plant and equipment, net | (1,178,787 | ) | (999,494 | ) | ||||
Prepaid expenses | (1,650,498 | ) | (1,299,000 | ) | ||||
Innova | (1,620,793 | ) | (1,322,182 | ) | ||||
Deferred income taxes of Mexican companies | 390,792 | 1,029,404 | ||||||
Deferred income taxes of foreign subsidiaries | 54,586 | (56,313 | ) | |||||
Asset tax | 1,475,108 | 1,384,233 | ||||||
Valuation allowances(a) | (3,527,175 | ) | (2,555,530 | ) | ||||
Deferred income tax liability | (1,606,689 | ) | (198,206 | ) | ||||
Effect of change of income tax rates | 189,534 | 32,549 | ||||||
Deferred income tax liability, net | Ps. | (1,417,155 | ) | Ps. | (165,657 | ) | ||
(a) | Reflects valuation allowances of foreign subsidiaries of Ps. 366,171 and Ps. 280,883 at December 31, 2004 and 2005, respectively. |
Tax Loss | ||||||||||||||||
Carryforwards | Asset Tax | Goodwill | Total | |||||||||||||
Balance at beginning of year | Ps. | (1,939,753 | ) | Ps. | (705,970 | ) | Ps. | (881,452 | ) | Ps. | (3,527,175 | ) | ||||
Increases | — | (72,173 | ) | — | (72,173 | ) | ||||||||||
Decreases | 963,673 | — | 80,145 | 1,043,818 | ||||||||||||
Balance at end of year | Ps. | (976,080 | ) | Ps. | (778,143 | ) | Ps. | (801,307 | ) | Ps. | (2,555,530 | ) | ||||
Charge to the gain from monetary position(1) | Ps. | (87,509 | ) | |
Credit to the result from holding non-monetary assets | 212,665 | |||
Credit to the provision for deferred income tax | 787,777 | |||
Credit to the cumulative effect of accounting changes | 75,721 | |||
Acquisition of companies (see Note 2) | 262,844 | |||
Ps. | 1,251,498 | |||
(1) | Net of Ps. 133,220, representing the effect on restatement of the non-monetary items included in the deferred tax calculation. |
F-34
Table of Contents
2003 | 2004 | 2005 | ||||||||||
Total Shares | 352,421,221 | 345,205,994 | 341,158,189 | |||||||||
CPOs | 2,166,320 | 2,293,867 | 2,463,608 | |||||||||
Shares not in the form of CPO units: | ||||||||||||
Series “A” Shares | 57,387,552 | 55,524,135 | 52,915,759 | |||||||||
Series “B” Shares | 8,214,835 | 5,305,998 | 108 | |||||||||
Series “D” Shares | 11,255,911 | 6,645,321 | 113 | |||||||||
Series “L” Shares | 11,255,911 | 6,645,321 | 113 |
2003 | 2004 | 2005 | ||||||||||||||||||||||
Per Each | ||||||||||||||||||||||||
Series “A”, | ||||||||||||||||||||||||
“B”, “D” | ||||||||||||||||||||||||
Per Series | Per Series | and “L” | ||||||||||||||||||||||
Per CPO | “A” Share | Per CPO | “A” Share | Per CPO | Share | |||||||||||||||||||
Continuing operations | Ps. | 1.38 | Ps. | 0.01 | Ps. | 1.89 | Ps. | 0.02 | Ps. | 2.28 | Ps. | 0.02 | ||||||||||||
Discontinued operations | (0.02 | ) | — | — | — | — | — | |||||||||||||||||
Cumulative loss effect of accounting changes | — | — | (0.36 | ) | — | (0.17 | ) | — | ||||||||||||||||
Net income | Ps. | 1.36 | Ps. | 0.01 | Ps. | 1.53 | Ps. | 0.02 | Ps. | 2.11 | Ps. | 0.02 | ||||||||||||
Foreign Currency | ||||||||||||
Amounts | Year-End | |||||||||||
(Thousands) | Exchange Rate | Mexican Pesos | ||||||||||
Assets: | ||||||||||||
U.S. dollars | 650,314 | Ps. | 10.6265 | Ps. | 6,910,562 | |||||||
Euros | 98,855 | 12.5864 | 1,244,232 | |||||||||
Chilean pesos | 8,230,648 | 0.0207 | 170,374 | |||||||||
Other currencies | 181,738 | |||||||||||
Liabilities: | ||||||||||||
U.S. dollars(1) | 1,589,904 | Ps. | 10.6265 | Ps. | 16,895,115 | |||||||
Chilean pesos | 9,436,425 | 0.0207 | 195,334 | |||||||||
Other currencies | 158,698 |
(1) | Includes U.S.$775.5 million (Ps. 8,240,681) of long-term securities being hedged by the Group’s net investment in Univision (see Note 1(c)). |
F-35
Table of Contents
Foreign Currency | ||||||||||||
Amounts | Year-End | |||||||||||
(Thousands) | Exchange Rate | Mexican Pesos(1) | ||||||||||
Property, plant and equipment: | ||||||||||||
U.S. dollars | 315,036 | Ps. | 10.6265 | Ps. | 3,347,728 | |||||||
Japanese yen | 3,970,094 | 0.0910 | 361,279 | |||||||||
Euros | 14,949 | 12.5864 | 188,153 | |||||||||
Other currencies | 141,361 | |||||||||||
Transmission rights and programming: | ||||||||||||
U.S. dollars | 382,054 | Ps. | 10.6265 | Ps. | 4,059,893 | |||||||
Other currencies | 133,638 |
(1) | Amounts translated at the year-end exchange rates for reference purposes only; does not indicate the actual amounts accounted for in the financial statements. |
U.S. Dollar | ||||||||||||||||
Equivalent of | ||||||||||||||||
other Foreign | ||||||||||||||||
Currency | Total U.S. | |||||||||||||||
U.S. Dollar | Transactions | Dollar | ||||||||||||||
(Thousands) | (Thousands) | (Thousands) | Mexican Pesos(1) | |||||||||||||
Income: | ||||||||||||||||
Revenues | $ | 340,192 | $ | 44,923 | $ | 385,115 | Ps. | 4,092,424 | ||||||||
Other income | 4,384 | 886 | 5,270 | 56,002 | ||||||||||||
Interest income | 17,095 | 164 | 17,259 | 183,403 | ||||||||||||
$ | 361,671 | $ | 45,973 | $ | 407,644 | Ps. | 4,331,829 | |||||||||
Purchases, costs and expenses: | ||||||||||||||||
Purchases of inventories | $ | 215,433 | $ | 13,219 | $ | 228,652 | Ps. | 2,429,770 | ||||||||
Purchases of property and equipment | 85,020 | 2,346 | 87,366 | 928,395 | ||||||||||||
Investments | 64,847 | 1,631 | 66,478 | 706,429 | ||||||||||||
Costs and expenses | 303,263 | 43,516 | 346,779 | 3,685,047 | ||||||||||||
Interest expense | 123,424 | 222 | 123,646 | 1,313,924 | ||||||||||||
$ | 791,987 | $ | 60,934 | $ | 852,921 | Ps. | 9,063,565 | |||||||||
(1) | Income statement amounts translated at the year-end exchange rate of Ps. 10.6265 for reference purposes only; does not indicate the actual amounts accounted for in the financial statements (see Note 1(c)). |
F-36
Table of Contents
F-37
Table of Contents
Operating | ||||||||||||||||||||||||
Income (Loss) | ||||||||||||||||||||||||
Before | Depreciation | |||||||||||||||||||||||
Depreciation | and | |||||||||||||||||||||||
Total | Intersegment | Consolidated | and | Amortization | Operating | |||||||||||||||||||
Revenues | Revenues | Revenues | Amortization | Expense | Income (Loss) | |||||||||||||||||||
2003: | ||||||||||||||||||||||||
Television Broadcasting | Ps. | 16,725,131 | Ps. | 76,209 | Ps. | 16,648,922 | Ps. | 7,108,984 | Ps. | 1,003,430 | Ps. | 6,105,554 | ||||||||||||
Pay Television Networks | 760,525 | 60,736 | 699,789 | 167,736 | 43,058 | 124,678 | ||||||||||||||||||
Programming Exports | 1,771,921 | — | 1,771,921 | 541,339 | 8,049 | 533,290 | ||||||||||||||||||
Publishing | 1,943,225 | 1,757 | 1,941,468 | 376,233 | 20,536 | 355,697 | ||||||||||||||||||
Publishing Distribution | 1,930,693 | 7,192 | 1,923,501 | 9,396 | 22,028 | (12,632 | ) | |||||||||||||||||
Cable Television | 1,072,299 | 5,296 | 1,067,003 | 327,636 | 196,207 | 131,429 | ||||||||||||||||||
Radio | 270,987 | 51,173 | 219,814 | 24,441 | 16,888 | 7,553 | ||||||||||||||||||
Other Businesses | 1,479,661 | 139,693 | 1,339,968 | (163,870 | ) | 347,686 | (511,556 | ) | ||||||||||||||||
Eliminations and corporate expenses | (342,056 | ) | (342,056 | ) | — | (162,291 | ) | — | (162,291 | ) | ||||||||||||||
Consolidated total | Ps. | 25,612,386 | Ps. | — | Ps. | 25,612,386 | Ps. | 8,229,604 | Ps. | 1,657,882 | Ps. | 6,571,722 | ||||||||||||
2004: | ||||||||||||||||||||||||
Television Broadcasting | Ps. | 17,671,898 | Ps. | 423,566 | Ps. | 17,248,332 | Ps. | 8,018,817 | Ps. | 1,073,742 | Ps. | 6,945,075 | ||||||||||||
Pay Television Networks | 827,472 | 115,878 | 711,594 | 308,471 | 21,472 | 286,999 | ||||||||||||||||||
Programming Exports | 1,981,205 | — | 1,981,205 | 756,110 | 7,434 | 748,676 | ||||||||||||||||||
Publishing | 2,163,131 | 5,145 | 2,157,986 | 438,888 | 24,289 | 414,599 | ||||||||||||||||||
Publishing Distribution | 1,626,435 | 8,392 | 1,618,043 | (26,227 | ) | 23,725 | (49,952 | ) | ||||||||||||||||
Sky Mexico | 3,758,154 | 44,427 | 3,713,727 | 1,383,190 | 585,782 | 797,408 | ||||||||||||||||||
Cable Television | 1,165,514 | 3,641 | 1,161,873 | 368,434 | 291,643 | 76,791 | ||||||||||||||||||
Radio | 305,623 | 50,998 | 254,625 | 32,804 | 19,533 | 13,271 | ||||||||||||||||||
Other Businesses | 1,547,428 | 103,604 | 1,443,824 | (132,113 | ) | 96,538 | (228,651 | ) | ||||||||||||||||
Eliminations and corporate expenses | (755,651 | ) | (755,651 | ) | — | (161,173 | ) | — | (161,173 | ) | ||||||||||||||
Consolidated total | Ps. | 30,291,209 | Ps. | — | Ps. | 30,291,209 | Ps. | 10,987,201 | Ps. | 2,144,158 | Ps. | 8,843,043 | ||||||||||||
2005: | ||||||||||||||||||||||||
Television Broadcasting | Ps. | 18,570,795 | Ps. | 548,423 | Ps. | 18,022,372 | Ps. | 8,852,616 | Ps. | 1,017,747 | Ps. | 7,834,869 | ||||||||||||
Pay Television Networks | 1,111,176 | 293,042 | 818,134 | 518,074 | 25,914 | 492,160 | ||||||||||||||||||
Programming Exports | 1,875,916 | — | 1,875,916 | 668,682 | 4,520 | 664,162 | ||||||||||||||||||
Publishing | 2,505,499 | 38,571 | 2,466,928 | 480,067 | 26,069 | 453,998 | ||||||||||||||||||
Publishing Distribution | 402,193 | 10,223 | 391,970 | 6,601 | 21,760 | (15,159 | ) | |||||||||||||||||
Sky Mexico | 5,986,527 | 31,945 | 5,954,582 | 2,516,798 | 945,011 | 1,571,787 | ||||||||||||||||||
Cable Television | 1,405,145 | 2,884 | 1,402,261 | 489,560 | 313,994 | 175,566 | ||||||||||||||||||
Radio | 344,733 | 51,245 | 293,488 | 52,200 | 19,441 | 32,759 | ||||||||||||||||||
Other Businesses | 1,324,209 | 68,819 | 1,255,390 | (180,371 | ) | 44,513 | (224,884 | ) | ||||||||||||||||
Eliminations and corporate expenses | (1,045,152 | ) | (1,045,152 | ) | — | (182,471 | ) | — | (182,471 | ) | ||||||||||||||
Consolidated total | Ps. | 32,481,041 | Ps. | — | Ps. | 32,481,041 | Ps. | 13,221,756 | Ps. | 2,418,969 | Ps. | 10,802,787 | ||||||||||||
F-38
Table of Contents
Segment | Additions to | |||||||||||
Segment Assets | Liabilities at | Property, Plant | ||||||||||
at Year-End | Year-End | and Equipment | ||||||||||
2003: | ||||||||||||
Continuing operations: | ||||||||||||
Television operations(1) | Ps. | 45,846,708 | Ps. | 20,794,230 | Ps. | 816,278 | ||||||
Publishing | 2,020,936 | 395,798 | 11,550 | |||||||||
Publishing Distribution | 1,053,855 | 429,303 | 23,021 | |||||||||
Cable Television | 2,299,789 | 527,424 | 191,588 | |||||||||
Radio | 460,354 | 55,445 | 15,271 | |||||||||
Other Businesses | 3,611,691 | 2,056,900 | 86,020 | |||||||||
Total | Ps. | 55,293,333 | Ps. | 24,259,100 | Ps. | 1,143,728 | ||||||
2004: | ||||||||||||
Continuing operations: | ||||||||||||
Television operations(1) | Ps. | 47,875,058 | Ps. | 21,314,279 | Ps. | 863,261 | ||||||
Publishing | 2,052,906 | 298,379 | 55,069 | |||||||||
Publishing Distribution | 1,035,995 | 380,682 | 34,597 | |||||||||
Sky México | 4,676,557 | 7,487,229 | 677,515 | |||||||||
Cable Television | 2,091,915 | 335,503 | 413,778 | |||||||||
Radio | 470,918 | 56,473 | 9,244 | |||||||||
Other Businesses | 3,426,748 | 574,176 | 41,068 | |||||||||
Total | Ps. | 61,630,097 | Ps. | 30,446,721 | Ps. | 2,094,532 | ||||||
2005: | ||||||||||||
Continuing operations: | ||||||||||||
Television operations(1) | Ps. | 46,279,220 | Ps. | 22,193,129 | Ps. | 875,176 | ||||||
Publishing | 2,063,554 | 347,080 | 10,576 | |||||||||
Publishing Distribution | 916,661 | 426,295 | 5,790 | |||||||||
Sky México | 4,553,301 | 5,976,590 | 1,187,381 | |||||||||
Cable Television | 2,333,206 | 469,382 | 556,656 | |||||||||
Radio | 513,739 | 69,654 | 13,323 | |||||||||
Other Businesses | 3,404,529 | 259,394 | 89,193 | |||||||||
Total | Ps. | 60,064,210 | Ps. | 29,741,524 | Ps. | 2,738,095 | ||||||
(1) | Segment assets and liabilities information is not maintained by the Group for each of the Television Broadcasting, Pay Television Networks and Programming Exports segments. In management’s opinion, there is no reasonable or practical basis to make allocations due to the interdependence of these segments. Consequently, management has presented such information on a combined basis as television operations. |
2003 | 2004 | 2005 | ||||||||||
Segment assets | Ps. | 55,293,333 | Ps. | 61,630,097 | Ps. | 60,064,210 | ||||||
Investments attributable to: | ||||||||||||
Television operations(1) | 11,930,754 | 11,884,922 | 12,235,964 | |||||||||
Other segments | 590,677 | 700,458 | 850,858 | |||||||||
DTH ventures(2) | 381,475 | 155,343 | — | |||||||||
Goodwill — net attributable to: | ||||||||||||
Television operations | 1,279,743 | 1,279,745 | 1,300,316 | |||||||||
Publishing distribution | 182,493 | — | 23,670 | |||||||||
Other segments | 732,549 | 734,086 | 376,719 | |||||||||
Total assets | Ps. | 70,391,024 | Ps. | 76,384,651 | Ps. | 74,851,737 | ||||||
(1) | Includes goodwill attributable to equity investments of Ps. 5,921,053, Ps. 5,757,787 and Ps. 5,499,313 in 2003, 2004 and 2005, respectively. | |
(2) | Includes goodwill attributable to investments in DTH ventures of Ps. 110,299 in 2003. |
F-39
Table of Contents
2003 | 2004 | 2005 | ||||||||||
Segment liabilities | Ps. | 24,259,100 | Ps. | 30,446,721 | Ps. | 29,741,524 | ||||||
Notes payable and long-term debt not attributable to segments | 16,211,771 | 17,413,942 | 15,246,289 | |||||||||
Total liabilities | Ps. | 40,470,871 | Ps. | 47,860,663 | Ps. | 44,987,813 | ||||||
Additions to | ||||||||||||
Segment Assets | Property, Plant | |||||||||||
Total Net Sales | at Year-End | and Equipment | ||||||||||
2003: | ||||||||||||
Mexico | Ps. | 21,153,701 | Ps. | 51,464,962 | Ps. | 1,093,026 | ||||||
Other countries | 4,458,685 | 3,828,371 | 50,702 | |||||||||
Ps. | 25,612,386 | Ps. | 55,293,333 | Ps. | 1,143,728 | |||||||
2004: | ||||||||||||
Mexico | Ps. | 25,629,888 | Ps. | 53,353,431 | Ps. | 2,035,245 | ||||||
Other countries | 4,661,321 | 8,276,666 | 59,287 | |||||||||
Ps. | 30,291,209 | Ps. | 61,630,097 | Ps. | 2,094,532 | |||||||
2005: | ||||||||||||
Mexico | Ps. | 28,717,614 | Ps. | 53,664,187 | Ps. | 2,708,402 | ||||||
Other countries | 3,763,427 | 6,400,023 | 29,693 | |||||||||
Ps. | 32,481,041 | Ps. | 60,064,210 | Ps. | 2,738,095 | |||||||
F-40
Table of Contents
2003 | 2004 | 2005 | ||||||||||
Net income as reported under Mexican GAAP | Ps. | 3,909,381 | Ps. | 4,460,607 | Ps. | 6,125,542 | ||||||
U.S. GAAP adjustments: | ||||||||||||
(a) Capitalization of financing costs, net of depreciation | 21,477 | 24,650 | 9,391 | |||||||||
(b) Deferred costs, net of amortization | 222,916 | 37,488 | (3,735 | ) | ||||||||
(c) Deferred debt refinancing costs, net of amortization | — | — | (560,043 | ) | ||||||||
(d) Equipment restatement, net of depreciation | 70,188 | 72,141 | (480,636 | ) | ||||||||
(e) Purchase accounting adjustments: | ||||||||||||
Amortization of broadcast license and network affiliation agreements | (6,631 | ) | (6,631 | ) | (6,631 | ) | ||||||
Depreciation of fixed assets | (11,224 | ) | (11,224 | ) | (11,224 | ) | ||||||
Amortization of other assets | (4,526 | ) | (4,422 | ) | (4,663 | ) | ||||||
(f) Goodwill and other intangible assets: | ||||||||||||
Reversal of Mexican GAAP goodwill amortization | 500,755 | — | — | |||||||||
Reversal of Mexican GAAP impairment of goodwill | 96,528 | 178,534 | — | |||||||||
(g) Equity method investees: | ||||||||||||
Innova | (322,713 | ) | 1,346,611 | — | ||||||||
SMCP | (829,441 | ) | (469,725 | ) | 1,304,636 | |||||||
Univision | 42,300 | — | — | |||||||||
(i) Derivative financial instruments | 1,446,031 | (1,054,382 | ) | (200,251 | ) | |||||||
(j) Pension plan and seniority premiums | (404 | ) | 23,723 | 33,545 | ||||||||
(k) Employee stock based compensation | (300,296 | ) | (318,424 | ) | 43,678 | |||||||
(l) Production and film costs | 705,288 | (68,289 | ) | 305,753 | ||||||||
(m) Deferred income taxes and employee profit sharing: | ||||||||||||
Deferred income taxes (1) | (2,364,812 | ) | 338,684 | 249,048 | ||||||||
Deferred employees’ profit sharing(1) | 87,192 | (68,719 | ) | 71,308 | ||||||||
(n) Maintenance reserve | — | 1,497 | 4,950 | |||||||||
(o) Minority interest on U.S. GAAP adjustments | (879 | ) | (26,605 | ) | (10,410 | ) | ||||||
(p) Effects of inflation accounting on U.S. GAAP adjustments | (21,575 | ) | (105,989 | ) | (45,565 | ) | ||||||
Net income under U.S. GAAP | Ps. | 3,239,555 | Ps. | 4,349,525 | Ps. | 6,824,693 | ||||||
(1) Net of inflation effects |
F-41
Table of Contents
2004 | 2005 | |||||||
Total stockholders’ equity under Mexican GAAP | Ps. | 28,523,988 | Ps. | 29,863,924 | ||||
U.S. GAAP adjustments: | ||||||||
(a) Capitalization of financing costs, net of accumulated depreciation | (859,266 | ) | (849,875 | ) | ||||
(b) Deferred costs, net of amortization | (119,119 | ) | (122,854 | ) | ||||
(c) Deferred debt refinancing costs, net of amortization | — | (560,043 | ) | |||||
(d) Equipment restatement, net of depreciation | 441,529 | 367,186 | ||||||
(e) Purchase accounting adjustments: | ||||||||
Broadcast license and network affiliation agreements | 134,828 | 128,197 | ||||||
Fixed assets | 72,951 | 61,727 | ||||||
Other assets | 50,854 | 48,966 | ||||||
Goodwill on acquisition of Bay City | (1,023,339 | ) | (1,023,339 | ) | ||||
Goodwill on acquisition of minority interest in Editorial Televisa | 1,258,217 | 1,258,217 | ||||||
Goodwill on acquisition of additional interests in Univision | (609,327 | ) | (609,327 | ) | ||||
(f) Goodwill and other intangible assets: | ||||||||
Reversal of Mexican GAAP goodwill amortization | 745,766 | 745,766 | ||||||
Reversal of Mexican GAAP amortization of intangible assets with indefinite lives | 101,874 | 101,874 | ||||||
(g) Equity method investees: | ||||||||
SMCP | (1,304,636 | ) | — | |||||
Univision | 109,065 | 109,065 | ||||||
Others | (2,265 | ) | (2,265 | ) | ||||
(h) Adjustment to gain on sale of music recording business | (300,112 | ) | (300,112 | ) | ||||
(i) Derivative financial instruments | 1,540,490 | 1,294,674 | ||||||
(j) Pension plan and seniority premiums | 23,723 | 57,268 | ||||||
(l) Production and film costs | (1,991,458 | ) | (1,685,705 | ) | ||||
(m) Deferred income taxes and employee’s profit sharing: | ||||||||
Deferred income taxes | 301,674 | 436,960 | ||||||
Deferred employees’ profit sharing | (187,429 | ) | (116,121 | ) | ||||
(n) Maintenance reserve | 17,980 | 22,930 | ||||||
(o) Minority interest | 91,680 | (894,164 | ) | |||||
Total U.S. GAAP adjustments, net | (1,506,320 | ) | (1,530,975 | ) | ||||
Total stockholders’ equity under U.S. GAAP | Ps. | 27,017,668 | Ps. | 28,332,949 | ||||
2004 | 2005 | |||||||
Changes in U.S. GAAP stockholders’ equity | ||||||||
Balance at January 1, | Ps. | 26,917,228 | Ps. | 27,017,668 | ||||
Net income for the year | 4,349,525 | 6,824,693 | ||||||
Repurchase of capital stock | (842,597 | ) | (1,194,424 | ) | ||||
Dividends | (4,114,064 | ) | (4,305,789 | ) | ||||
Sale of capital stock under long-term retention plans | 605,726 | 314,559 | ||||||
Stock based compensation | 318,424 | 279,856 | ||||||
Other comprehensive income: | ||||||||
Changes in other comprehensive income of equity investees | 123,591 | (189,400 | ) | |||||
Result from holding non-monetary assets | (160,544 | ) | (238,818 | ) | ||||
Foreign currency translation adjustment | (179,621 | ) | (175,396 | ) | ||||
Balance at December 31, | Ps. | 27,017,668 | Ps. | 28,332,949 | ||||
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F-43
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F-44
Table of Contents
2004 | 2005 | |||||||
Consolidated subsidiaries: | ||||||||
Television Broadcasting | Ps. | 311,706 | Ps. | 332,272 | ||||
Publishing | 1,337,874 | 1,361,544 | ||||||
Other segments | 45,344 | 45,344 | ||||||
Equity method investees | 6,183,860 | 5,568,025 | ||||||
Ps. | 7,878,784 | Ps. | 7,307,185 | |||||
2004 | 2005 | |||||||
Trademarks (1) (2) | Ps. | 530,052 | Ps. | 471,697 | ||||
Television network concession (1) | 687,823 | 687,823 | ||||||
Network affiliation agreements (1) | 111,067 | 111,067 | ||||||
Licenses and software | 289,069 | 340,466 | ||||||
Subscriber list | — | 432,798 | ||||||
Deferred financing costs | 165,952 | 299,448 | ||||||
Broadcast license | 23,761 | 17,130 | ||||||
Total intangible assets | Ps. | 1,807,724 | Ps. | 2,360,429 | ||||
(1) | Indefinite-lived | |
(2) | Includes translation effect, impairment adjustments and acquisitions (see Note 7) |
F-45
Table of Contents
Year ended December 31, 2003 | ||||||||||||||||
Other | ||||||||||||||||
Equity | Total Equity | |||||||||||||||
Innova | Univision | Investments | Investments | |||||||||||||
Net sales | Ps. | 4,071,605 | Ps. | 15,995,932 | Ps. | 3,870,340 | Ps. | 23,937,877 | ||||||||
Total expenses | 5,048,367 | 12,814,017 | 5,165,225 | 23,027,609 | ||||||||||||
(Loss) income before income taxes and minority interest. | (976,762 | ) | 3,181,915 | (1,294,885 | ) | 910,268 | ||||||||||
Income tax benefit (provision) | 127,230 | (1,285,834 | ) | (82,131 | ) | (1,240,735 | ) | |||||||||
(Loss) income before minority interest | (849,532 | ) | 1,896,081 | (1,377,016 | ) | (330,467 | ) | |||||||||
Minority interest | — | — | (16,613 | ) | (16,613 | ) | ||||||||||
U.S. GAAP net (loss) income | Ps. | (849,532 | ) | Ps. | 1,896,081 | Ps. | (1,393,629 | ) | Ps. | (347,080 | ) | |||||
Televisa’s equity in net (losses) income of equity investees, under U.S. GAAP | Ps. | (509,720 | ) | Ps. | 177,662 | Ps. | (747,048 | ) | Ps. | (1,079,106 | ) | |||||
Year ended December 31, 2004 | ||||||||||||
Other | ||||||||||||
Equity | Total Equity | |||||||||||
Univision | Investments | Investments | ||||||||||
Net sales | Ps. | 20,586,496 | Ps. | 5,662,895 | Ps. | 26,249,391 | ||||||
Total expenses | 15,742,594 | 6,014,980 | 21,757,574 | |||||||||
Income (loss) before income taxes and minority interest. | 4,843,902 | (352,085 | ) | 4,491,817 | ||||||||
Income tax benefit (provision) | (1,895,986 | ) | (168,237 | ) | (2,064,223 | ) | ||||||
Income (loss) before minority interest | 2,947,916 | (520,322 | ) | 2,427,594 | ||||||||
Minority interest | — | (3,120 | ) | (3,120 | ) | |||||||
U.S. GAAP net income (loss) | Ps. | 2,947,916 | Ps. | (523,442 | ) | Ps. | 2,424,474 | |||||
Televisa’s equity in net income (losses) of equity investees, under U.S. GAAP | Ps. | 280,403 | Ps. | (143,057 | ) | Ps. | 137,346 | |||||
Year ended December 31, 2005 | ||||||||||||
Other | ||||||||||||
Equity | Total Equity | |||||||||||
Univision | Investments | Investments | ||||||||||
Net sales | Ps. | 20,748,571 | Ps. | 3,388,358 | Ps. | 24,136,929 | ||||||
Total expenses | 16,825,458 | 3,573,392 | 20,398,850 | |||||||||
Income (loss) before income taxes and minority interest. | 3,923,113 | (185,034 | ) | 3,738,079 | ||||||||
Income tax benefit (provision) | (1,934,055 | ) | (40,029 | ) | (1,974,084 | ) | ||||||
Income (loss) before minority interest | 1,989,058 | (225,063 | ) | 1,763,995 | ||||||||
Minority interest | — | — | — | |||||||||
U.S. GAAP net income (loss) | Ps. | 1,989,058 | Ps. | (225,063 | ) | Ps. | 1,763,995 | |||||
Televisa’s equity in net income (losses) of equity investees, under U.S. GAAP (1) | Ps. | 191,855 | Ps. | (31,697 | ) | Ps. | 160,158 | |||||
F-46
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As of December 31, 2004 | ||||||||||||
Other Equity | Total Equity | |||||||||||
Univision | Investments | Investments | ||||||||||
Current assets | Ps. | 7,657,534 | Ps. | 1,558,076 | Ps. | 9,215,610 | ||||||
Non-current assets | 87,123,587 | 1,907,587 | 89,031,174 | |||||||||
Total assets | Ps. | 94,781,121 | Ps. | 3,465,663 | Ps. | 98,246,784 | ||||||
Current liabilities | 3,358,417 | 5,299,815 | 8,658,232 | |||||||||
Non-current liabilities | 29,353,322 | 964,566 | 30,317,888 | |||||||||
Stockholders’ (deficit) equity | 62,069,382 | (2,798,718 | ) | 59,270,664 | ||||||||
Total liabilities and stockholders’ equity | Ps. | 94,781,121 | Ps. | 3,465,663 | Ps. | 98,246,784 | ||||||
Televisa’s investment in and advances to equity investees at cost plus equity in undistributed earnings since acquisition (net) | Ps. | 6,145,765 | Ps. | (565,361 | ) | Ps. | 5,580,404 | |||||
As of December 31, 2005 | ||||||||||||||
Other Equity | Total Equity | |||||||||||||
Univision | Investments | Investments | ||||||||||||
Current assets | Ps. | 6,732,950 | Ps. | 2,471,525 | Ps. | 9,204,475 | ||||||||
Non-current assets | 79,642,812 | 1,708,310 | 81,351,122 | |||||||||||
Total assets | Ps. | 86,375,762 | Ps. | 4,179,835 | Ps. | 90,555,597 | ||||||||
Current liabilities | 9,665,025 | 1,302,882 | 10,967,907 | |||||||||||
Non-current liabilities | 22,612,288 | 276,536 | 22,888,824 | |||||||||||
Stockholders’ (deficit) equity | 54,098,449 | 2,600,417 | 56,698,866 | |||||||||||
Total liabilities and stockholders’ equity | Ps. | 86,375,762 | Ps. | 4,179,835 | Ps. | 90,555,597 | ||||||||
Televisa’s investment in and advances to equity investees at cost plus equity in undistributed earnings since acquisition (net) | Ps. | 5,767,472 | Ps. | 837,931 | Ps. | 6,605,403 | ||||||||
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F-48
Table of Contents
2003 | 2004 | 2005 | ||||||||||
Service cost | Ps. | 77,520 | Ps. | 66,427 | Ps. | 61,959 | ||||||
Interest cost | 40,831 | 35,589 | 34,147 | |||||||||
Expected return on plan assets | (39,867 | ) | (46,039 | ) | (55,575 | ) | ||||||
Net amortization and deferral | 56,058 | 7,900 | (14,604 | ) | ||||||||
Net cost under U.S. GAAP | 134,542 | 63,877 | 25,927 | |||||||||
Net cost under Mexican GAAP | 134,138 | 87,600 | 59,472 | |||||||||
Increase (reduction) of net cost that would be recognized under U.S. GAAP | Ps. | 404 | Ps. | (23,723 | ) | Ps. | (33,545 | ) | ||||
2003 | 2004 | 2005 | ||||||||||
Weighted average discount rate | 4 | % | 4 | % | 4 | % | ||||||
Rate of increase in future compensation levels | 2 | % | 2 | % | 2 | % | ||||||
Expected long-term rates of return on plan assets | 5 | % | 5 | % | 5 | % |
F-49
Table of Contents
2004 | 2005 | |||||||
Projected benefit obligation | Ps. | 894,779 | Ps. | 964,401 | ||||
Plan assets | (1,154,693 | ) | (1,425,944 | ) | ||||
Funded status | (259,914 | ) | (461,543 | ) | ||||
Unrecognized prior service cost | (275,316 | ) | (58,807 | ) | ||||
Unrecognized net loss | 370,748 | 364,207 | ||||||
95,432 | 305,400 | |||||||
Prepaid pension asset | (164,482 | ) | (156,143 | ) | ||||
Severance indemnities — projected benefit obligation | — | 291,035 | ||||||
Balance sheet asset (liability) | Ps. | (164,482 | ) | Ps. | 134,892 | |||
Change in benefit obligation: | ||||||||
Projected benefit obligation at beginning of year | Ps. | 925,974 | Ps. | 894,779 | ||||
Service cost | 66,427 | 61,959 | ||||||
Interest cost | 35,589 | 34,147 | ||||||
Actuarial gain | (88,021 | ) | 901 | |||||
Benefits paid | (45,190 | ) | (27,385 | ) | ||||
Projected benefit obligation at end of year | Ps. | 894,779 | Ps. | 964,401 | ||||
2003 | 2004 | |||||||
Change in plan assets: | ||||||||
Fair value of plan assets at beginning of year | Ps. | 966,038 | Ps. | 1,154,693 | ||||
Actual return on plan assets | 204,113 | 282,910 | ||||||
Plan asset contributions | 72,270 | 5,068 | ||||||
Benefits paid | (87,728 | ) | (16,727 | ) | ||||
Fair value of plan assets at end of year | Ps. | 1,154,693 | Ps. | 1,425,944 | ||||
2004 | 2005 | |||||||
Equity securities | 63.4 | % | 65.9 | % | ||||
Fixed rate instruments | 36.6 | % | 34.1 | % | ||||
Total | 100.0 | % | 100.0 | % | ||||
F-50
Table of Contents
Year Ended December 31, | ||||||||
2003 | 2004 | |||||||
Net income under U.S. GAAP | ||||||||
As previously reported | Ps. | 3,048,072 | Ps. | 3,588,300 | ||||
Add:Adoption of SFAS 123(R) utilizing the modified retrospective method | (300,296 | ) | (318,424 | ) | ||||
Deduct: Amount previously recorded pursuant to APB 25 | 491,779 | 1,079,649 | ||||||
Net income as adjusted | Ps. | 3,239,555 | Ps. | 4,349,525 | ||||
Earnings per CPO under U.S. GAAP (constant pesos) | ||||||||
Basic and diluted, as previously reported | 1.04 | 1.23 | ||||||
Basic and diluted, as adjusted | 1.12 | 1.49 | ||||||
Stockholders’ equity under U.S. GAAP | ||||||||
As previously reported | Ps. | 26,286,326 | Ps. | 25,307,115 | ||||
Add:Adoption of SFAS 123(R) utilizing the modified retrospective method | — | — | ||||||
Deduct: Amount previously recorded pursuant to APB 25 | 630,902 | 1,710,553 | ||||||
Stockholders’ equity as adjusted | Ps. | 26,917,228 | Ps. | 27,017,668 | ||||
F-51
Table of Contents
December 31, | ||||||||||||
2003 | 2004 | 2005 | ||||||||||
Dividend yield | 3.00 | % | 3.00 | % | 3.00 | % | ||||||
Expected volatility | 33.95 | % | 28.25 | % | 28.25 | % | ||||||
Risk-free interest rate | 8.73 | % | 8.36 | % | 8.36 | % | ||||||
Expected life of options (in years) | 2.3 | 3.0 | 3.0 |
2003 | 2004 | 2005 | ||||||||||||||||||||||
Weighted- | Weighted- | |||||||||||||||||||||||
average | average | Weighted- | ||||||||||||||||||||||
exercise | exercise | average | ||||||||||||||||||||||
CPOs | price | CPOs | price | CPOs | exercise price | |||||||||||||||||||
Outstanding at beginning of year | 82,776 | Ps. | 12.90 | 80,476 | Ps. | 12.54 | 71,262 | Ps. | 15.18 | |||||||||||||||
Granted | 4,416 | 12.18 | 32,699 | 19.74 | 599 | 13.27 | ||||||||||||||||||
Exercised | (5,000 | ) | 13.04 | (41,533 | ) | 12.37 | (23,455 | ) | 11.61 | |||||||||||||||
Canceled/forfeited | (1,716 | ) | – | (380 | ) | – | (224 | ) | ��� | |||||||||||||||
Outstanding at the end of the year | 80,476 | 12.54 | 71,262 | 15.18 | 48,182 | 13.32 | ||||||||||||||||||
Options exercisable at end of year | 25,000 | 13.04 | 995 | 11.31 | 4,472 | 11.61 | ||||||||||||||||||
Weighted average remaining life | 1.34 | 1.24 | 0.8 | |||||||||||||||||||||
2004 | 2005 | |||||||||||||||
Weighted- | ||||||||||||||||
average | Weighted- | |||||||||||||||
exercise | average | |||||||||||||||
CPOs | price | CPOs | exercise price | |||||||||||||
Outstanding at beginning of year | – | Ps. | – | 45,109 | 13.45 | |||||||||||
Granted | 45,109 | 13.90 | 2,715 | 13.45 | ||||||||||||
Exercised | – | – | – | – | ||||||||||||
Canceled/forfeited | – | – | (1,039 | ) | – | |||||||||||
Outstanding at the end of the year | 45,109 | 13.90 | 46,785 | 13.45 | ||||||||||||
Options exercisable at end of year | – | – | – | – | ||||||||||||
Weighted average remaining life | 4.1 | 3.1 | ||||||||||||||
F-52
Table of Contents
2003 | 2004 | 2005 | ||||||||||||||||||||||
Weighted- | Weighted- | |||||||||||||||||||||||
average | average | Weighted- | ||||||||||||||||||||||
exercise | exercise | average | ||||||||||||||||||||||
CPOs | price | CPOs | price | CPOs | exercise price | |||||||||||||||||||
Nonvested at January 1 | 82,776 | Ps. | – | 55,476 | Ps. | – | 70,267 | Ps. | – | |||||||||||||||
Granted | 4,416 | 12.18 | 32,699 | 19.74 | 599 | 13.42 | ||||||||||||||||||
Vested | (30,000 | ) | 13.04 | (17,528 | ) | 12.37 | (26,932 | ) | 11.61 | |||||||||||||||
Forfeited | (1,716 | ) | – | (380 | ) | – | (224 | ) | – | |||||||||||||||
Vested at the end of the year | 55,476 | 13.04 | 70,267 | 11.31 | 43,710 | 11.61 | ||||||||||||||||||
2004 | 2005 | |||||||||||||||
Weighted- | ||||||||||||||||
average | Weighted- | |||||||||||||||
exercise | average | |||||||||||||||
CPOs | price | CPOs | exercise price | |||||||||||||
Nonvested at January 1 | – | Ps. | – | 45,109 | Ps. | 13.45 | ||||||||||
Granted | 45,109 | 13.90 | 2,715 | 13.45 | ||||||||||||
Vested | – | – | – | – | ||||||||||||
Forfeited | – | – | (1,039 | ) | – | |||||||||||
Vested at the end of the year | 45,109 | 13.90 | 46,785 | 13.45 | ||||||||||||
F-53
Table of Contents
December 31, | ||||||||
2004 | 2005 | |||||||
Net deferred income tax liability recorded under Mexican GAAP on Mexican GAAP balances (see Note 20) | Ps. | (1,417,155 | ) | Ps. | (165,657 | ) | ||
Reclassification of non-current taxes related to non-wholly owned subsidiaries (Innova) | 1,620,793 | 1,322,182 | ||||||
Net deferred income tax amount under SFAS 109 applied to Mexican GAAP balances | 203,638 | 1,156,525 | ||||||
Impact of U.S. GAAP adjustments: | ||||||||
Capitalization of financing costs | 257,780 | 237,965 | ||||||
Deferred costs | 35,735 | 34,399 | ||||||
Equipment restatement | (132,459 | ) | (102,812 | ) | ||||
Purchase accounting adjustments | (77,591 | ) | (66,890 | ) | ||||
Adjustment of gain on sale of music recording business | 90,034 | 84,032 | ||||||
Pension plan and seniority premiums | (7,117 | ) | (16,035 | ) | ||||
Derivative financial instruments | (462,147 | ) | (362,509 | ) | ||||
Production and film costs | 597,439 | 471,998 | ||||||
Deferred premiums, net of amortization | — | 156,812 | ||||||
301,674 | 436,960 | |||||||
Net deferred income tax asset on U.S. GAAP | 505,312 | 1,593,485 | ||||||
Less: | ||||||||
Deferred income tax amount under SFAS 109 applied to Mexican GAAP balances | 203,638 | 1,156,525 | ||||||
Net deferred income tax adjustment required under U.S. GAAP | Ps. | 301,674 | Ps. | 436,960 | ||||
2005 | ||||
Credit to the provision for deferred income tax | Ps. | 726,426 | ||
Credit to the result from holding non-monetary assets | 98,903 | |||
Acquired net operating loss carryforward (1) | 262,844 | |||
Ps. | 1,088,173 | |||
(1) | Utilized in the same year |
F-54
Table of Contents
December 31, | ||||||||
2004 | 2005 | |||||||
Deferred EPS liability: | ||||||||
Current: | ||||||||
Inventories | Ps. | (906 | ) | Ps. | 2,047 | |||
Noncurrent: | ||||||||
Property, plant and equipment | (122,479 | ) | (115,402 | ) | ||||
Deferred costs | (59,590 | ) | (57,514 | ) | ||||
Pension plan and seniority premiums | (2,376 | ) | 75,378 | |||||
Other | (2,078 | ) | (20,630 | ) | ||||
Total deferred EPS liability | Ps. | (187,429 | ) | Ps. | (116,121 | ) | ||
2003 | 2004 | 2005 | ||||||||||
Current: | ||||||||||||
Mexican | Ps. | 1,359,983 | Ps. | 517,325 | Ps. | 1,041,207 | ||||||
Foreign | 4,303 | 4,192 | 199,202 | |||||||||
1,364,286 | 521,517 | 1,240,409 | ||||||||||
Deferred: | ||||||||||||
Mexican | 1,744,770 | 27,886 | (728,415 | ) | ||||||||
Foreign | (1,013 | ) | 1,327 | (1,989 | ) | |||||||
1,743,757 | 29,213 | (726,426 | ) | |||||||||
Ps. | 3,108,043 | Ps. | 550,730 | Ps. | 513,983 | |||||||
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Table of Contents
F-56
Table of Contents
Year ended December 31, | ||||||||||||
2003 | 2004 | 2005 | ||||||||||
Net sales | Ps. | 25,612,386 | Ps. | 30,291,209 | Ps. | 32,481,041 | ||||||
Cost of providing services (exclusive of depreciation and amortization) | 13,304,674 | 15,372,682 | 14,408,148 | |||||||||
Selling and administrative expenses | 4,196,748 | 4,740,728 | 5,057,637 | |||||||||
Depreciation and amortization | 1,544,715 | 2,076,822 | 3,006,572 | |||||||||
Income from operations | 6,566,252 | 8,100,977 | 10,008,684 | |||||||||
Integral result of financing, net | 756,487 | (2,634,224 | ) | (2,636,947 | ) | |||||||
Other (expense) income net | (26,732 | ) | (377,712 | ) | 901,212 | |||||||
Income before income taxes, minority interest and equity in earnings or losses of affiliates | 7,296,007 | 5,089,041 | 8,272,949 | |||||||||
Income tax and assets tax – current and deferred | (3,108,043 | ) | (550,730 | ) | (513,983 | ) | ||||||
Income before minority interest and equity in earnings or losses of affiliates | 4,187,964 | 4,538,311 | 7,758,966 | |||||||||
Minority interest | 130,697 | (266,080 | ) | (1,094,431 | ) | |||||||
Equity in (losses) earnings of affiliates | (1,079,106 | ) | 137,346 | 160,158 | ||||||||
Net income | Ps. | 3,239,555 | Ps. | 4,409,577 | Ps. | 6,824,693 | ||||||
Weighted average common shares outstanding (in millions) | 352,421 | 345,573 | 341,158 | |||||||||
2003 | 2004 | 2005 | ||||||||||||||||||||||
Per | Per | |||||||||||||||||||||||
Series “A”, | Series “A”, | |||||||||||||||||||||||
Per | “B”, “D” | “B”, “D” | ||||||||||||||||||||||
Per | Series “A” | Per | and “L” | Per | and “L” | |||||||||||||||||||
CPO | Share | CPO | Share | CPO | Share | |||||||||||||||||||
Continuing operations | Ps. | 1.12 | Ps. | 0.01 | Ps. | 1.49 | Ps. | 0.01 | Ps. | 2.34 | Ps. | 0.02 | ||||||||||||
Cumulative effect of change in accounting principles | — | — | — | — | — | — | ||||||||||||||||||
Net income per CPO/share. | Ps. | 1.12 | Ps. | 0.01 | Ps. | 1.49 | Ps. | 0.01 | Ps. | 2.34 | Ps. | 0.02 | ||||||||||||
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December 31, | ||||||||
2004 | 2005 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | Ps. | 16,436,569 | Ps. | 14,665,377 | ||||
Other investments | 759,378 | 112,577 | ||||||
Trade notes and accounts receivable, net | 11,604,240 | 13,896,300 | ||||||
Other accounts and notes receivable, net | 1,210,593 | 570,610 | ||||||
Due from affiliated companies | 145,686 | 295,279 | ||||||
Transmission rights and programming | 3,713,684 | 3,120,501 | ||||||
Inventories | 684,848 | 638,280 | ||||||
Current deferred taxes | 4,251,651 | 3,894,445 | ||||||
Other current assets | 734,650 | 578,068 | ||||||
Total current assets | 39,541,299 | 37,771,437 | ||||||
Non-current assets: | ||||||||
Transmission rights and programming | 2,649,945 | 2,235,262 | ||||||
Investments | 6,885,040 | 6,605,403 | ||||||
Property, plant and equipment, net | 19,453,314 | 19,307,585 | ||||||
Goodwill, net | 7,878,784 | 7,307,185 | ||||||
Intangible assets, net | 1,807,724 | 2,360,429 | ||||||
Deferred taxes | 4,821,096 | 4,175,050 | ||||||
Derivate financial instruments | 1,564,143 | 2,214,426 | ||||||
Other assets | 497,192 | 201,886 | ||||||
Total assets | Ps. | 85,098,537 | Ps. | 82,178,663 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Current portion of long-term debt | Ps. | 3,406,973 | Ps. | 340,457 | ||||
Current portion of satellite transporder lease obligation | 73,101 | 75,604 | ||||||
Trade accounts payable | 2,206,412 | 2,954,723 | ||||||
Customer deposits and advances | 15,427,906 | 15,538,229 | ||||||
Taxes payable | 1,610,711 | 1,055,793 | ||||||
Current deferred taxes | 1,650,498 | 1,299,000 | ||||||
Accrued interest | 464,352 | 334,609 | ||||||
Other accrued liabilities | 1,295,126 | 1,558,001 | ||||||
Due from affiliated companies | 66,725 | 751,182 | ||||||
Total current liabilities | 26,201,804 | 23,907,598 | ||||||
Non-current liabilities: | ||||||||
Long-term debt | 19,575,139 | 18,137,240 | ||||||
Satellite transponder lease obligation | 1,368,760 | 1,186,933 | ||||||
Customer deposits and advances | 385,315 | 2,508,200 | ||||||
Other long-term liabilities | 2,232,527 | 1,783,556 | ||||||
Deferred taxes | 7,104,368 | 5,293,131 | ||||||
DTH joint ventures | 1,304,636 | — | ||||||
Pension plans and seniority premiums | — | 134,892 | ||||||
Total liabilities | 58,172,549 | 52,951,550 | ||||||
Commitments and contingencies | ||||||||
Minority interest | (91,680 | ) | 894,164 | |||||
Total stockholders’ equity | 27,017,668 | 28,332,949 | ||||||
Total liabilities and stockholders’ equity | Ps. | 85,098,537 | Ps. | 82,178,663 | ||||
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2003 | 2004 | 2005 | ||||||||||
Operating activities: | ||||||||||||
Net income under U.S. GAAP | Ps. | 3,239,555 | Ps. | 4,349,525 | Ps. | 6,824,693 | ||||||
Adjustments to reconcile net income to cash provided by operating activities: | ||||||||||||
Equity in losses (income) of affiliates | 1,079,106 | (137,345 | ) | (160,158 | ) | |||||||
Minority interest from continuing operations | (130,697 | ) | 266,080 | 1,094,431 | ||||||||
Depreciation and amortization | 1,544,715 | 2,076,822 | 3,006,572 | |||||||||
Impairment adjustments | — | 59,131 | 7,439 | |||||||||
Deferred debt refinancing costs, net of amortization | — | — | 560,043 | |||||||||
Pension plans and seniority premiums | 134,542 | 63,877 | 316,962 | |||||||||
Deferred income tax | 194,808 | 97,932 | (726,426 | ) | ||||||||
(Gain) loss on disposal of investment | (484,595 | ) | 126,536 | (1,133,372 | ) | |||||||
Unrealized foreign exchange loss, net | 241,525 | (73,788 | ) | (609,050 | ) | |||||||
Employee stock option plans | 300,296 | 318,424 | 279,857 | |||||||||
Maintenance reserve | — | (1,497 | ) | (4,950 | ) | |||||||
(Gain) loss from monetary position | (238,633 | ) | 155,130 | (178,302 | ) | |||||||
5,880,622 | 7,300,827 | 9,277,739 | ||||||||||
Changes in operating assets and liabilities: | ||||||||||||
Decrease (increase) in: | ||||||||||||
Trade notes and accounts receivable and customer deposits and advances, net | 697,201 | 53,695 | (438,775 | ) | ||||||||
Inventories | 16,798 | (112,937 | ) | 46,568 | ||||||||
Transmission rights, programs and films and production talent advances | (179,122 | ) | 394,837 | 662,668 | ||||||||
Other accounts and notes receivable and other current assets | (113,823 | ) | (419,822 | ) | 696,400 | |||||||
(Decrease) increase in: | ||||||||||||
Trade accounts payable | 159,251 | (421,961 | ) | 827,734 | ||||||||
Other liabilities and taxes payable | 374,879 | 282,211 | (807,310 | ) | ||||||||
955,184 | (223,977 | ) | 987,285 | |||||||||
Cash provided by operating activities | 6,835,806 | 7,076,850 | 10,265,024 | |||||||||
Financing activities: | ||||||||||||
Issuance of Senior Notes due 2025 | — | — | 6,655,800 | |||||||||
Prepayments of Senior Notes and UDI-denominated Notes | — | — | (5,440,227 | ) | ||||||||
Other changes in notes payable | (223,086 | ) | 2,734,926 | (4,502,536 | ) | |||||||
Derivative financial instruments | (1,446,031 | ) | 1,054,382 | (696,612 | ) | |||||||
Shares issued | 4,373,269 | — | — | |||||||||
Repurchase and sale of capital stock issued | (4,979,011 | ) | (236,871 | ) | (879,865 | ) | ||||||
Gain on issuance of shares of investee | — | 111,465 | — | |||||||||
Dividends paid | (621,603 | ) | (4,114,065 | ) | (4,305,789 | ) | ||||||
Minority interest | 16,091 | (89,588 | ) | (108,588 | ) | |||||||
Cash used by financing activities | (2,880,371 | ) | (539,751 | ) | (9,277,817 | ) | ||||||
Investing activities: | ||||||||||||
Other investments | (2,260,677 | ) | 1,764,483 | 622,308 | ||||||||
Due from affiliated companies, net | (299,640 | ) | (55,506 | ) | 535,044 | |||||||
Equity investments and other advances | 1,156,930 | (295,304 | ) | 517,407 | ||||||||
Investments in property, plant and equipment | (719,953 | ) | (1,937,324 | ) | (2,432,331 | ) | ||||||
Intangible assets and other assets | (238,554 | ) | (211,763 | ) | (1,458,068 | ) | ||||||
Cash used for investing activities | (2,361,894 | ) | (735,414 | ) | (2,215,640 | ) | ||||||
Net increase (decrease) in cash and cash equivalents | 1,593,541 | 5,801,685 | (1,228,433 | ) | ||||||||
Translation effect on cash and cash equivalents | (55,589 | ) | 6,383 | (12,646 | ) | |||||||
Effect of inflation on cash and cash equivalents | (399,350 | ) | (661,139 | ) | (530,113 | ) | ||||||
Net increase in cash and temporary investments of Innova’s consolidation | — | 483,450 | — | |||||||||
Cash and cash equivalents at beginning of year | 9,667,588 | 10,806,190 | 16,436,569 | |||||||||
Cash and cash equivalents at end of year | Ps. | 10,806,190 | Ps. | 16,436,569 | Ps. | 14,665,377 | ||||||
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2003 | 2004 | 2005 | ||||||||||
Interest | Ps. | 1,138,173 | Ps. | 1,691,977 | Ps. | 1,997,036 | ||||||
Income taxes and/or assets tax | 522,139 | 743,799 | 535,638 |
2003 | 2004 | 2005 | ||||||||||
Note receivable related to customer deposits | Ps. | 8,742,107 | Ps. | 10,553,476 | Ps. | 12,299,271 |
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Balance at | Balance at | |||||||||||||||
Beginning of | End | |||||||||||||||
Description | Period | Additions | Deductions | of Period | ||||||||||||
Continuing operations: | ||||||||||||||||
Reserve for damage, obsolescence or deterioration of inventory: | ||||||||||||||||
Year ended December 31, 2003 | Ps. | 9,496 | Ps. | 2,927 | Ps. | (60 | ) | Ps. | 12,363 | |||||||
Year ended December 31, 2004 | 12,363 | 1,744 | (5,427 | ) | 8,680 | |||||||||||
Year ended December 31, 2005 | 8,680 | 2,342 | — | 11,022 | ||||||||||||
Allowances for doubtful accounts (1): | ||||||||||||||||
Year ended December 31, 2003 | Ps. | 1,036,053 | Ps. | 387,748 | Ps. | (460,055 | ) | Ps. | 963,746 | |||||||
Year ended December 31, 2004 | 963,746 | 539,135 | (261,875 | ) | 1,241,006 | |||||||||||
Year ended December 31, 2005 | 1,241,006 | 310,974 | (343,912 | ) | 1,208,068 |
(1) | Include allowances for trade and non-trade doubtful accounts. |
F-62