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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, 2009 |
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 five Ordinary Participation Certificates | New York Stock Exchange | |
(Certificados de Participación Ordinarios)(“CPOs”) | ||
CPOs, each representing twenty-five A Shares, twenty-two | New York Stock Exchange (for listing purposes only) | |
B Shares thirty-five L Shares and thirty-five D Shares |
None.
None.
51,580,618,803 B Shares
82,060,017,146 L Shares
82,060,017,146 D Shares
Large accelerated filerþ | Accelerated filero | Non-accelerated filero |
U.S. GAAPo | International Financial Reporting Standards as issued by the International Accounting Standards Boardo | Otherþ |
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Exhibit 2.15 | ||||||||
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Exhibit 13.1 | ||||||||
Exhibit 13.2 | ||||||||
Exhibit 23.1 |
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Year Ended December 31, | ||||||||||||||||||||||||
2005 | 2006 | 2007 | 2008 | 2009 | 2009 | |||||||||||||||||||
(Millions of Pesos or millions of U.S. Dollars)(1) | ||||||||||||||||||||||||
(Mexican GAAP/FRS) | ||||||||||||||||||||||||
Income Statement Data: | ||||||||||||||||||||||||
Net sales | Ps. | 35,068 | Ps. | 39,358 | Ps. | 41,562 | Ps. | 47,972 | Ps. | 52,353 | U.S.$ | 4,003 | ||||||||||||
Operating income | 11,663 | 14,266 | 14,481 | 15,128 | 15,157 | 1,159 | ||||||||||||||||||
Integral cost of financing, net(2) | 1,924 | 1,141 | 410 | 831 | 2,973 | 227 | ||||||||||||||||||
Income from continuing operations | 8,330 | 9,519 | 9,018 | 8,731 | 6,583 | 503 | ||||||||||||||||||
Cumulative effect of accounting change, net | (546 | ) | — | — | — | — | — | |||||||||||||||||
Controlling interest net income | 6,613 | 8,909 | 8,082 | 7,804 | 6,007 | 459 | ||||||||||||||||||
Income from continuing operations per CPO(3) | 2.46 | 3.07 | 2.84 | 2.77 | 2.14 | — | ||||||||||||||||||
Controlling interest net income per CPO(3) | 2.27 | 3.07 | 2.84 | 2.77 | 2.14 | — | ||||||||||||||||||
Weighted-average number of shares outstanding (in millions)(3)(4) | 341,158 | 339,776 | 333,653 | 329,580 | 329,304 | — | ||||||||||||||||||
Cash dividend per CPO(3) | 1.49 | 0.37 | 1.50 | 0.75 | 3.10 | — | ||||||||||||||||||
Shares outstanding (in millions, at year end)(4) | 339,941 | 337,782 | 329,960 | 328,393 | 327,231 | — | ||||||||||||||||||
(U.S. GAAP)(5) | ||||||||||||||||||||||||
Income Statement Data: | ||||||||||||||||||||||||
Net sales | Ps. | 35,068 | Ps. | 39,358 | Ps. | 41,562 | Ps. | 47,972 | Ps. | 52,353 | U.S.$ | 4,003 | ||||||||||||
Operating income | 10,806 | 14,068 | 14,322 | 14,492 | 13,008 | 994 | ||||||||||||||||||
Income from continuing operations | 8,550 | 8,917 | 9,167 | 9,049 | 5,561 | 425 | ||||||||||||||||||
Consolidated net income | 8,550 | 8,917 | 9,167 | 9,049 | 5,561 | 425 | ||||||||||||||||||
Net income attributable to the noncontrolling interest | 1,182 | 609 | 934 | 919 | 575 | 44 | ||||||||||||||||||
Net income attributable to the controlling interest | 7,368 | 8,308 | 8,233 | 8,130 | 4,986 | 381 | ||||||||||||||||||
Income from continuing operations per CPO(3) | 2.44 | 2.76 | 2.86 | 2.82 | 1.98 | — | ||||||||||||||||||
Net income attributable to the controlling interest per CPO(3) | 2.44 | 2.76 | 2.86 | 2.82 | 1.98 | — | ||||||||||||||||||
Weighted-average number of shares outstanding (in millions)(3)(4) | 341,158 | 339,776 | 333,653 | 329,580 | 329,304 | — | ||||||||||||||||||
Shares outstanding (in millions, at year end)(4) | 339,941 | 337,782 | 329,960 | 328,393 | 327,231 | — | ||||||||||||||||||
(Mexican GAAP/FRS) | ||||||||||||||||||||||||
Balance Sheet Data (end of year): | ||||||||||||||||||||||||
Cash and temporary investments | Ps. | 15,955 | Ps. | 16,405 | Ps. | — | Ps. | — | Ps. | — | U.S.$ | — | ||||||||||||
Cash and cash equivalents | — | — | 25,480 | 33,583 | 29,941 | 2,289 | ||||||||||||||||||
Temporary investments | — | — | 1,825 | 8,321 | 8,902 | 681 | ||||||||||||||||||
Total assets | 81,162 | 86,186 | 98,703 | 122,852 | 126,568 | 9,676 | ||||||||||||||||||
Current portion of long-term debt and other notes payable(6) | 367 | 1,023 | 489 | 2,270 | 1,433 | 110 | ||||||||||||||||||
Long-term debt, net of current portion(7) | 19,581 | 18,464 | 25,307 | 36,631 | 41,983 | 3,210 | ||||||||||||||||||
Customer deposits and advances | 19,484 | 17,807 | 19,810 | 18,688 | 20,913 | 1,599 | ||||||||||||||||||
Capital stock issued | 10,677 | 10,507 | 10,268 | 10,061 | 10,020 | 766 | ||||||||||||||||||
Total stockholders’ equity (including noncontrolling interest) | 32,242 | 38,015 | 40,650 | 47,252 | 44,472 | 3,400 | ||||||||||||||||||
(U.S. GAAP)(5) | ||||||||||||||||||||||||
Balance Sheet Data (end of year): | ||||||||||||||||||||||||
Cash and cash equivalents | Ps. | 15,833 | Ps. | 15,461 | Ps. | 25,480 | Ps. | 33,583 | Ps. | 29,941 | U.S.$ | 2,289 | ||||||||||||
Total assets | 88,724 | 91,806 | 103,728 | 127,966 | 131,344 | 10,042 | ||||||||||||||||||
Current portion of long-term debt and other notes payable(6) | 367 | 1,023 | 489 | 2,270 | 1,433 | 110 | ||||||||||||||||||
Long-term debt, net of current portion(7) | 19,581 | 18,464 | 25,307 | 36,631 | 41,983 | 3,210 | ||||||||||||||||||
Controlling interest stockholders’ equity | 30,589 | 35,799 | 36,580 | 41,539 | 37,357 | 2,856 | ||||||||||||||||||
Noncontrolling interest stockholders’ equity | 965 | 1,688 | 3,655 | 5,269 | 6,339 | 485 | ||||||||||||||||||
Total stockholders’ equity | 31,554 | 37,487 | 40,235 | 46,808 | 43,696 | 3,341 | ||||||||||||||||||
(Mexican FRS) | ||||||||||||||||||||||||
Cash Flow Data(15): | ||||||||||||||||||||||||
Net Cash provided by operating activities | Ps. | — | Ps. | — | Ps. | — | Ps. | 22,258 | Ps. | 15,136 | U.S.$ | 1,157 | ||||||||||||
Net Cash used in investing activities | — | — | — | (12,884 | ) | (11,052 | ) | (845 | ) | |||||||||||||||
Net Cash used in financing activities | — | — | — | (1,886 | ) | (7,641 | ) | (584 | ) | |||||||||||||||
Increase (decrease) in cash and cash equivalents | — | — | — | 7,620 | (3,663 | ) | (280 | ) | ||||||||||||||||
(U.S. GAAP)(5) | ||||||||||||||||||||||||
Cash Flow Data: | ||||||||||||||||||||||||
Net cash provided by operating activities | 10,478 | 11,542 | 12,107 | 19,851 | 12,328 | 942 | ||||||||||||||||||
Net cash (used in) provided by financing activities | (9,412 | ) | (3,088 | ) | (1,395 | ) | 522 | (4,833 | ) | (369 | ) | |||||||||||||
Net cash used in investing activities | (2,392 | ) | (8,216 | ) | (294 | ) | (12,884 | ) | (11,052 | ) | (845 | ) | ||||||||||||
(Decrease) increase in cash and cash equivalents | (1,326 | ) | 237 | 10,418 | 7,488 | (3,558 | ) | (272 | ) | |||||||||||||||
(Mexican GAAP/FRS) | ||||||||||||||||||||||||
Other Financial Information: | ||||||||||||||||||||||||
Capital expenditures(8) | Ps. | 2,849 | Ps. | 3,346 | Ps. | 3,878 | Ps. | 6,627 | Ps. | 6,531 | U.S.$ | 499 | ||||||||||||
Other Data (unaudited): | ||||||||||||||||||||||||
Average prime time audience share (TV broadcasting)(9) | 68.5 | % | 69.5 | % | 69.0 | % | 71.2 | % | 69.8 | % | — | |||||||||||||
Average prime time rating (TV broadcasting)(9) | 36.5 | 35.5 | 33.4 | 35.2 | 34.8 | — | ||||||||||||||||||
Magazine circulation (millions of copies)(10) | 145 | 155 | 165 | 174 | 153 | — | ||||||||||||||||||
Number of employees (at year end) | 15,100 | 16,200 | 17,800 | 22,500 | 24,300 | — | ||||||||||||||||||
Number of Sky subscribers (in thousands at year end)(11) | 1,251 | 1,430 | 1,585 | 1,760 | 1,960 | — | ||||||||||||||||||
Number of Cablevisión RGUs (in thousands at year end)(12) | 475 | 583 | 695 | 844 | 1,016 | — | ||||||||||||||||||
Number of Cablemás RGUs (in thousands at year end)(12)(13) | — | — | — | 1,170 | 1,348 | — | ||||||||||||||||||
Number of TVI RGUs (in thousands at year end)(12)(14) | — | — | — | — | 425 | — |
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(1) | Except per Certificado de Participación Ordinario, or CPO, average audience share, average rating, magazine circulation, employee, subscriber and Revenue Generating Units, or RGUs. Amounts in Mexican Pesos for the years ended December 31, 2005, 2006, and 2007 are stated in Mexican Pesos in purchasing power as of December 31, 2007, in accordance with Mexican FRS. Beginning on January 1, 2008, we discontinued recognizing the effects of inflation in our financial information in accordance with Mexican FRS. | |
(2) | Includes interest expense, interest income, foreign exchange gain or loss, net, and through December 31, 2007, gain or loss from monetary position. See Note 18 to our year-end financial statements. | |
(3) | For further analysis of income from continuing operations per CPO and net income per CPO (as well as corresponding amounts per A Share not traded as CPOs), see Note 20 (for the calculation under Mexican FRS) and Note 23 (for the calculation under U.S. GAAP) to our year-end financial statements. In April and December 2009, our stockholders approved the payment of a dividend of Ps. 1.75 and Ps. 1.35 per CPO, respectively. | |
(4) | As of December 31, 2005, 2006, 2007, 2008 and 2009, we had four classes of common stock: A Shares, B Shares, D Shares and L Shares. 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 GDSs, each GDS representing 5 CPOs. Before March 22, 2006, each GDS represented 20 CPOs. | |
The number of CPOs and shares issued and outstanding for financial reporting purposes under Mexican GAAP/FRS and U.S. GAAP is different than the number of CPOs issued and outstanding for legal purposes, because under Mexican GAAP/FRS and U.S. GAAP shares owned by subsidiaries and/or the trusts created to implement our Stock Purchase Plan and our Long-Term Retention Plan are not considered outstanding for financial reporting purposes. | ||
As of December 31, 2009, for legal purposes, there were approximately 2,424.8 million CPOs issued and outstanding, each of which was represented by 25 A Shares, 22 B Shares, 35 D Shares and 35 L Shares, and an additional number of approximately 58,926.6 million A Shares and 2,357.2 million B Shares (not in the form of CPO units). See Note 12 to our year-end financial statements. | ||
(5) | See Note 23 to our year-end financial statements. | |
(6) | See Note 8 to our year-end financial statements. | |
(7) | 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. | |
(8) | Capital expenditures are those investments made by us in property, plant and equipment, which U.S. Dollar equivalent amounts set forth in “Information on the Company — Capital Expenditures” are translated into Mexican Pesos at the year-end exchange rate for convenience purposes only. The aggregate amount of capital expenditures in Mexican Pesos does not indicate the actual amounts accounted for in our consolidated financial statements. | |
(9) | “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 the Mexican subsidiary of the Brazilian Institute of Statistics and Public Opinion, or Instituto Brasileño de Opinión Pública y Estadística, or IBOPE. The Mexican subsidiary of IBOPE is referred to as IBOPE Mexico in this annual report. For further information regarding audience share and ratings information and IBOPE Mexico, see “Information on the Company — Business Overview — Television — Television Broadcasting”. |
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(10) | 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. | |
(11) | Sky commenced operations in Mexico in 1996, and in Central America and the Dominican Republic in 2007. 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. 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 and Central America”. | |
(12) | An RGU is defined as an individual service subscriber who generates recurring revenue under each service provided by Empresas Cablevisión, S.A.B. de C.V., or Cablevisión and Cablemás (pay-TV, broadband internet and digital telephony). For example, a single subscriber paying for cable television, broadband internet and digital telephony services represents three RGUs. We believe it is appropriate to use the number of RGUs as a performance measure for Cablevisión, Cablemás and TVI given that these businesses provide other services in addition to pay-TV. See “Operating and Financial Review and Prospects — Results of Operations — Total Segment Results — Cable and Telecom” and “Information on the Company — Business Overview — Cable and Telecom”. | |
(13) | Beginning June 2008, we started to consolidate Cablemás, a significant cable operator in Mexico, operating in 49 cities. | |
(14) | Beginning October 2009, we started to consolidate TVI, a leading provider of triple-play services in northern Mexico. | |
(15) | Through December 31, 2007, under Mexican FRS, the changes in financial position for operating, financing and investing activities, were presented through the statements of changes in financial position. On January 1, 2008, Mexican FRS NIF B-2, “Statement of Cash Flows” became effective on a prospective basis. Therefore, we have included the statement of cash flows for the years ended December 31, 2008 and 2009. See Note 1 to our year-end financial statements for further detail regarding this change. Due to the adoption of Mexican FRS NIF B-2, “Statement of Cash Flows”, the 2008 and 2009 information is not directly comparable to the information for the year ended 2007 and prior years. The criteria for determining net cash provided by, or used in, operating, investing and financing activities under the new Mexican FRS NIF B-2, “Statement of Cash Flows” is different from that used in prior years. |
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Period | High | Low | Average(1) | Period End | ||||||||||||
2005 | 11.4018 | 10.4097 | 10.8895 | 10.6344 | ||||||||||||
2006 | 11.4809 | 10.4303 | 10.9034 | 10.8116 | ||||||||||||
2007 | 11.2676 | 10.6639 | 10.9274 | 10.9157 | ||||||||||||
2008 | 13.9183 | 9.9180 | 11.1455 | 13.8325 | ||||||||||||
2009 | 15.3650 | 12.5969 | 13.4983 | 13.0659 | ||||||||||||
2010 (June 17, 2010) | 13.1819 | 12.1575 | 12.6662 | 12.5925 | ||||||||||||
January | 13.0098 | 12.6478 | 12.8019 | 13.0098 | ||||||||||||
February | 13.1753 | 12.7769 | 12.9424 | 12.7769 | ||||||||||||
March | 12.7454 | 12.3306 | 12.5737 | 12.3306 | ||||||||||||
April | 12.7259 | 12.1575 | 12.4019 | 12.2626 | ||||||||||||
May | 13.1819 | 12.2605 | 12.7428 | 12.9146 | ||||||||||||
June (through June 17, 2010) | 12.9288 | 12.5878 | 12.7572 | 12.5925 |
(1) | Annual average rates reflect the average of the daily exchange rate during the relevant period. |
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• | inflation can adversely affect consumer purchasing power, thereby adversely affecting consumer and advertiser demand for our services and products; and | ||
• | to the extent inflation exceeds our price increases, our prices and revenues will be adversely affected in “real” terms. |
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• | projections of operating revenues, net income (loss), net income (loss) per CPO/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 online and wireless content division, Televisa Interactive Media, or TIM; | ||
• | statements concerning our current and future plans regarding our investment in the Spanish television channel Gestora de Inversiones Audiovisuales La Sexta, S.A., or La Sexta; |
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• | statements concerning our current and future plans regarding our investment in Grupo de Telecomunicaciones de Alta Capacidad, S.A.P.I. de C.V., or GTAC; | ||
• | statements concerning our current and future plans regarding our gaming business; | ||
• | statements concerning our current and future plans regarding the fixed telephony service provided by Empresas Cablevisión, S.A.B. de C.V., or Cablevisión; | ||
• | statements concerning our transactions with and/or litigation involving Univision; | ||
• | statements concerning our series of transactions with DIRECTV, and News Corporation, or News Corp.; | ||
• | statements concerning our transactions with NBC Universal’s Telemundo Communications Group, or Telemundo; | ||
• | statements concerning our plans to build and launch a new transponder satellite; | ||
• | statements about our future economic performance or statements concerning general economic, political or social conditions in the United Mexican States, or Mexico, or other countries in which we operate or have investments; and | ||
• | statements or assumptions underlying these statements. |
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Year Ended December 31,(1) | ||||||||||||||||
2007 | 2008 | 2009 | 2010 | |||||||||||||
(Actual) | (Actual) | (Actual) | (Forecast) | |||||||||||||
(Millions of U.S. Dollars) | ||||||||||||||||
Capital expenditures(2) | U.S.$ | 355.1 | U.S.$ | 478.8 | U.S.$ | 499.3 | U.S.$ | 971.0 | ||||||||
La Sexta(3) | 89.9 | 63.4 | 49.0 | 30.8 | ||||||||||||
Other acquisitions and investments(4) | 416.2 | 137.0 | 10.5 | — | ||||||||||||
Total capital expenditures and investments | U.S.$ | 861.2 | U.S.$ | 679.2 | U.S.$ | 558.8 | U.S.$ | 1,001.8 | ||||||||
(1) | Amounts in respect of some of the capital expenditures, investments and acquisitions we made in 2007, 2008 and 2009 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 Mexican Pesos and, in the case of data presented in U.S. Dollars, is translated at a rate of Ps. 13.08 to one U.S. Dollar, the Interbank Rate as of December 31, 2009, 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.$78.7 million in 2007, U.S.$183.3 million in 2008 and U.S.$239.0 million in 2009 for the expansion and improvement of our Cable and Telecom business; U.S.$122.3 million in 2007, U.S.$114.0 million in 2008 and U.S.$128.8 million in 2009 for the expansion and improvement of our Sky business and, U.S.$41.4 million in 2007, U.S.$39.6 million in 2008 and U.S.$17.5 million in 2009 for our Gaming business. The forecast amount for 2010 includes an accrual of U.S.$111 million related to our investment in a new 24-transponder satellite that was launched in the first quarter of 2010, which will be paid in cash in 2011, as well as capital expenditures in connection with the expansion and growth of our Telecom and Sky segments. The forecast amount for 2010 does not include any amounts to be invested in connection with Grupo de Telecomunicaciones de Alta Capacidad, S.A.P.I. de C.V. See “ — Investments — Grupo de Telecomunicaciones de Alta Capacidad, S.A.P.I. de C.V.” Likewise, the forecast amount does not include any amounts to be invested in connection with the Investment and Securities Subscription Agreement entered into with NII Holdings, Inc., or NII. See “ — Developing New Businesses and Expanding Through Acquisitions.” | |
(3) | In 2007, 2008 and 2009 we made capital contributions related to our interest in La Sexta (40% in 2007 and 2008, and 40.5% in 2009) in the amount of U.S.$89.9 million (€65.9 million), U.S.$63.4 million (€44.4 million) and U.S.$49 million (€35.7 million), respectively. | |
(4) | In the second half of 2007, we acquired Editorial Atlántida, a leading publishing company in Argentina for an aggregate amount of U.S.$78.8 million. In the fourth quarter of 2007, we acquired the majority of the assets of Bestel, a privately held, facilities-based telecommunications business in Mexico for an amount of U.S.$256.0 million in cash plus an additional capital contribution of U.S.$69.0 million. In 2008, we invested U.S.$100.0 million in an additional issuance of long-term notes of Alvafig, which proceeds were used by Alvafig to acquire shares representing approximately 11% of Cablemás’ aggregate capital stock; we invested U.S.$25.0 million in Spot Runner, an advertising company; and made additional capital contributions in Volaris, the low-cost carrier airline in Mexico, in the amount of U.S.$12.0 million. In 2009, we made investments in Volaris, for an aggregate amount of U.S.$5.0 million, and in other companies in which we hold a noncontrolling interest for an aggregate amount of U.S.$5.5 million. |
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• | offering high quality programming, including rights to our four over-the-air broadcast channels, exclusive broadcasts of sporting events, such as selected matches of the Mexican Soccer League and the Spanish Soccer League, including La Liga and La Copa del Rey, the NFL Sunday Ticket, NBA Pass, MLB Extra Innings, the NHL and the Golf Channel; | ||
• | 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-TV services in Mexico; | ||
• | expanding our DTH services in Central America and the Caribbean; | ||
• | providing superior digital Ku-band DTH satellite services and emphasizing customer service quality; and | ||
• | continuing to leverage our strengths and capabilities to develop new business opportunities and expand through acquisitions. |
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• | continuing to offer high quality programming; | ||
• | continuing to upgrade its existing cable network into a broadband bidirectional network; | ||
• | maintaining its 100% 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, and telephony services; | ||
• | 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; and | ||
• | continuing to leverage our strengths and capabilities to develop new business opportunities and expand through acquisitions. |
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Wholly | ||||||||||||||||||||||||
Owned | ||||||||||||||||||||||||
Mexico City | Wholly | Majority | Minority | |||||||||||||||||||||
Anchor | Owned | Owned | Owned | Independent | Total | |||||||||||||||||||
Stations | Affiliates | Affiliates | Affiliates | Affiliates | Stations | |||||||||||||||||||
Channel 2 | 1 | 123 | 2 | — | 1 | 127 | ||||||||||||||||||
Channel 4 | 1 | — | — | — | — | 1 | ||||||||||||||||||
Channel 5 | 1 | 62 | — | — | 4 | 67 | ||||||||||||||||||
Channel 9 | 1 | 14 | — | — | 13 | 28 | ||||||||||||||||||
Subtotal | 4 | 199 | 2 | — | 18 | 223 | ||||||||||||||||||
Border Stations | — | 1 | — | — | — | 1 | ||||||||||||||||||
Local (Stations) Affiliates | — | 18 | — | 1 | 14 | 33 | ||||||||||||||||||
Total | 4 | 218 | 2 | 1 | 32 | 257 | ||||||||||||||||||
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January 2007 — December 2009(1)
(1) | Source: IBOPE Mexico national surveys. |
January 2007 — December 2009(1)
(1) | Source: IBOPE Mexico national surveys. |
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Year Ended December 31, | ||||||||||||
2007(1) | 2008(1) | 2009(1) | ||||||||||
Prime time hours | 29.9 | % | 34.1 | % | 33.9 | % | ||||||
Weekday prime time hours | 33.6 | % | 38.3 | % | 36.6 | % | ||||||
Sign-on to sign-off hours | 29.7 | % | 32.1 | % | 31.7 | % |
(1) | Source: IBOPE Mexico national surveys. |
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Year Ended December 31, | ||||||||||||
2007(1) | 2008(1) | 2009(1) | ||||||||||
Prime time hours | 18.7 | % | 18.1 | % | 18.6 | % | ||||||
Weekday prime time hours | 16.6 | % | 16.1 | % | 17.1 | % | ||||||
Sign-on to sign-off hours | 20.6 | % | 19.6 | % | 20.3 | % |
(1) | Source: IBOPE Mexico national surveys. |
Year Ended December 31, | ||||||||||||
2007(1) | 2008(1) | 2009(1) | ||||||||||
Prime time hours | 7.3 | % | 7.2 | % | 6.2 | % | ||||||
Weekday prime time hours | 8.1 | % | 8.4 | % | 7.5 | % | ||||||
Sign-on to sign-off hours | 8.6 | % | 9.0 | % | 8.3 | % |
(1) | Source: IBOPE Mexico national surveys. |
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Year Ended December 31, | ||||||||||||
2007(1) | 2008(1) | 2009(1) | ||||||||||
Prime time hours | 13.1 | % | 11.8 | % | 11.2 | % | ||||||
Weekday prime time hours | 10.7 | % | 11.1 | % | 11.1 | % | ||||||
Sign-on to sign-off hours | 12.1 | % | 11.7 | % | 10.6 | % |
(1) | Source: IBOPE Mexico national surveys. |
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• | enhanced programming services, including video games, video on demand, high definition, impulse pay per view; | ||
• | Broadband internet services; and | ||
• | IP telephony services. |
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• | Digital signal, Video-on-Demand, and high-definition programming among others, for cable television | ||
• | Broadband internet services; and | ||
• | IP telephony services. |
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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.665.7 million; |
• | 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, 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.$88.0 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; 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. |
• | 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; |
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• | DIRECTV Mexico made cash payments to Innova totaling approximately U.S.$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 Corporation (now Intelsat Corporation) 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 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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• | proof of Mexican nationality; |
• | submission of a business plan; |
• | submission of technical specifications and descriptions; |
• | submission of a plan for coverage; |
• | submission of an investment program; |
• | submission of a financial program; |
• | submission of plans for technical development and actualization; |
• | submission of plans for production and programming; |
• | receipt of a guaranty to ensure the continuation of the process until the concession is granted or denied; and |
• | a request for a favorable opinion from the Mexican Antitrust Commission. |
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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 Mexican 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, or required by other federal authorities. Such opinions shall also be issued in connection with decrees, regulations, governmental determinations and other governmental acts (such as public bid rules) which may have an anticompetitive effect. |
• | To issue an opinion related to effective competition conditions in a specific market or to the market power of a given agent in a market. |
• | To 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. |
• | 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. |
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Jurisdiction of | ||||||||
Organization or | Percentage | |||||||
Name of Significant Subsidiary | Incorporation | Ownership(1) | ||||||
Corporativo Vasco de Quiroga, S.A. de C.V.(2)(3)(4) | 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.B de C.V.(3)(5) | Mexico | 51.0 | % | |||||
Editorial Televisa, S.A. de C.V.(3)(6) | Mexico | 100.0 | % | |||||
Factum Más, S.A. de C.V.(7)(8) | Mexico | 100.0 | % | |||||
Sky DTH, S. de R.L. de C.V.(7) | Mexico | 100.0 | % | |||||
Innova Holdings, S. de R.L. de C.V.(7) | Mexico | 58.7 | % | |||||
Innova, S. de R.L. de C.V. (Innova)(9) | Mexico | 58.7 | % | |||||
Grupo Distribuidoras Intermex, S.A. de C.V.(2)(3)(10) | Mexico | 100.0 | % | |||||
Grupo Telesistema Mexicano, S.A. de C.V.(11) | Mexico | 100.0 | % | |||||
G-Televisa-D, S.A. de C.V.(12) | Mexico | 100.0 | % | |||||
Televisa, S.A. de C.V.(13) | Mexico | 100.0 | % | |||||
Paxia, S.A. de C.V.(3)(4)(14) | Mexico | 100.0 | % | |||||
Sistema Radiópolis, S.A. de C.V.(2)(3)(15) | Mexico | 50.0 | % | |||||
Televisa Juegos, S.A. de C.V.(2)(3)(16) | Mexico | 100.0 | % | |||||
Televisión Independiente de México, S.A. de C.V.(11) | Mexico | 100.0 | % |
(1) | Percentage of equity owned by us directly or indirectly through subsidiaries or affiliates. | |
(2) | One of five 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) | One of three direct subsidiaries through which we own equity interests in and conduct the operations of our Cable and Telecom segment. | |
(5) | One of the indirect subsidiaries through which we conduct the operations of our Cable and Telecom segment. | |
(6) | Direct subsidiary through which we conduct the operations of our Publishing segment. | |
(7) | One of three subsidiaries through which we own our equity interest in Innova. | |
(8) | Direct subsidiary through which we own equity interests in and conduct our Internet business. | |
(9) | Consolidated variable interest entity through which we conduct the operations of our Sky 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 direct subsidiaries through which we conduct the operations of our Television Broadcasting, Pay Television Networks and Programming Exports segments. | |
(12) | Indirect subsidiary through which we conduct certain operations of our Television Broadcasting segment. | |
(13) | Indirect subsidiary through which we conduct the operations of our Television Broadcasting, Pay Television Networks and Programming Exports segments. | |
(14) | Direct subsidiary through which we maintain 100.00% of the capital stock of Alvafig, a holding company with an interest of 58.3% in Cablemás, a large cable operator in Mexico. | |
(15) | Direct subsidiary through which we conduct the operations of our Radio business. | |
(16) | Direct subsidiary through which we conduct the operations of our Gaming business. |
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Number of | ||||
Operations | Properties | Location | ||
Television and news activities | ||||
Owned properties | 2 | San Diego, California(1) | ||
Leased properties | 4 | Buenos Aires, Argentina(1) | ||
Madrid, Spain(2) | ||||
San Diego, California(1) Zug, Switzerland(1) | ||||
Publishing activities | ||||
Owned properties | 7 | Miami, Florida(1) | ||
Santiago, Chile(1) | ||||
Quito, Ecuador(1) | ||||
Guayaguil, Ecuador(1) | ||||
Caracas Venezuela (1) | ||||
Buenos Aires, Argentina(2) | ||||
Leased properties | 9 | Beverly Hills, California(1) | ||
Miami, Florida(1) | ||||
New York, New York(1) | ||||
Medellín, Colombia(1) | ||||
Bogota, Colombia(2) | ||||
Quito, Ecuador(1) | ||||
Caracas, Venezuela(1) | ||||
San Juan, Puerto Rico(1) |
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Number of | ||||
Operations | Properties | Location | ||
Publishing distribution and other activities | ||||
Owned properties | 2 | Lima, Peru(1) | ||
Guayaquil, Ecuador(1) | ||||
Leased properties | 81 | Quito, Ecuador(2) | ||
Guayaquil, Ecuador(1) | ||||
Buenos Aires, Argentina(2) | ||||
Panamá, Panamá(2) | ||||
Santiago, Chile (44) | ||||
Armenia, Colombia(1) | ||||
Barranquilla, Colombia(3) | ||||
Bogota, Colombia(3) | ||||
Bucaramanga, Colombia(1) | ||||
Cali, Colombia(5) | ||||
Cartagena, Colombia(1) | ||||
Colombia, Colombia(2) | ||||
Ibage, Colombia(1) | ||||
Manizales, Colombia(1) | ||||
Medellín, Colombia(4) | ||||
Pasto, Colombia(1) | ||||
Pompayan, Colombia(1) | ||||
Pereira, Colombia(1) | ||||
Santa Martha, Colombia(1) | ||||
Sincelejo, Colombia,(1) | ||||
Villavicencio, Colombia(1) | ||||
Lima, Peru(2) | ||||
DTH | ||||
Leased properties | 5 | San José Costa Rica(1) | ||
Guatemala (1) | ||||
Nicaragua (1) | ||||
Panama (1) | ||||
Dominicana (1) | ||||
Telephony | ||||
Leased properties | 7 | San Antonio, Texas(2) | ||
Dallas, Texas (2) | ||||
Laredo, Texas (1) | ||||
McAllen, Texas (1) | ||||
Mission, Texas (1) |
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Year Ended December 31,(1) | ||||||||||||
2007 | 2008 | 2009 | ||||||||||
Segment Net Sales | ||||||||||||
Television Broadcasting | 49.7 | % | 43.7 | % | 40.3 | % | ||||||
Pay Television Networks | 4.3 | 4.5 | 5.1 | |||||||||
Programming Exports | 5.3 | 5.0 | 5.3 | |||||||||
Publishing | 7.8 | 7.5 | 6.3 | |||||||||
Sky | 19.7 | 18.7 | 18.7 | |||||||||
Cable and Telecom | 6.1 | 13.5 | 17.3 | |||||||||
Other Businesses | 7.1 | 7.1 | 7.0 | |||||||||
Total Segment Net Sales | 100.0 | % | 100.0 | % | 100.0 | % | ||||||
Intersegment Operations | (2.6 | ) | (2.3 | ) | (2.2 | ) | ||||||
Total Consolidated Net Sales | 97.4 | % | 97.7 | % | 97.8 | % | ||||||
Net Sales | ||||||||||||
Cost of Sales(2) | 43.6 | % | 44.9 | % | 45.4 | % | ||||||
Selling Expenses(2) | 7.9 | 8.2 | 8.9 | |||||||||
Administrative Expenses(2) | 5.9 | 6.4 | 7.3 | |||||||||
Depreciation and Amortization | 7.8 | 9.0 | 9.4 | |||||||||
Consolidated Operating Income | 34.8 | 31.5 | 29.0 | |||||||||
Total Net Sales | 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 22 to our year-end financial statements. | |
(2) | Excluding depreciation and amortization. |
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Year Ended December 31,(1) | ||||||||||||
2007 | 2008 | 2009 | ||||||||||
(Millions of Pesos) | ||||||||||||
Segment Net Sales | ||||||||||||
Television Broadcasting | Ps. | 21,213.2 | Ps. | 21,460.7 | Ps. | 21,561.6 | ||||||
Pay Television Networks | 1,852.0 | 2,212.5 | 2,736.6 | |||||||||
Programming Exports | 2,262.1 | 2,437.2 | 2,845.9 | |||||||||
Publishing | 3,311.9 | 3,700.4 | 3,356.1 | |||||||||
Sky | 8,402.2 | 9,162.2 | 10,005.2 | |||||||||
Cable and Telecom | 2,611.6 | 6,623.4 | 9,241.8 | |||||||||
Other Businesses | 3,039.6 | 3,498.5 | 3,771.4 | |||||||||
Total Segment Net Sales | 42,692.6 | 49,094.9 | 53,518.6 | |||||||||
Intersegment Operations | (1,131.1 | ) | (1,122.6 | ) | (1,166.1 | ) | ||||||
Total Consolidated Net Sales | Ps. | 41,561.5 | Ps. | 47,972.3 | Ps. | 52,352.5 | ||||||
Operating Segment Income (Loss) | ||||||||||||
Television Broadcasting | Ps. | 10,518.1 | Ps. | 10,504.9 | Ps. | 10,323.9 | ||||||
Pay Television Networks | 1,150.2 | 1,378.2 | 1,660.4 | |||||||||
Programming Exports | 1,032.0 | 1,076.8 | 1,437.2 | |||||||||
Publishing | 624.4 | 648.6 | 190.7 | |||||||||
Sky | 4,037.9 | 4,416.8 | 4,478.8 | |||||||||
Cable and Telecom | 947.2 | 2,134.8 | 2,971.9 | |||||||||
Other Businesses | (237.5 | ) | (242.9 | ) | (318.2 | ) | ||||||
Total Operating Segment Income(2) | 18,072.3 | 19,917.2 | 20,744.7 | |||||||||
Corporate Expenses(2) | (368.3 | ) | (478.3 | ) | (658.2 | ) | ||||||
Depreciation and Amortization | (3,223.1 | ) | (4,311.1 | ) | (4,929.6 | ) | ||||||
Total Consolidated Operating Income(3) | Ps. | 14,480.9 | Ps. | 15,127.8 | Ps. | 15,156.9 | ||||||
(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 22 to our year-end financial statements. | |
(2) | The total operating segment income data set forth in this annual report do not reflect corporate expenses and depreciation and amortization in any period presented, but are presented herein to facilitate the discussion of segment results. | |
(3) | Total consolidated operating income reflects corporate expenses and depreciation and amortization in all periods presented. See Note 22 to our year-end financial statements. |
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Compared to the Year Ended December 31, 2008
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Cablevisión | Cablemás | TVI | ||||||||||
Video | 632,061 | 912,825 | 237,062 | |||||||||
Broadband | 250,550 | 289,006 | 112,105 | |||||||||
Voice | 133,829 | 146,406 | 75,779 | |||||||||
RGUs | 1,016,440 | 1,348,237 | 424,946 |
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• | interest expense, including gains or losses from derivative instruments and the restatement of our UDI denominated notes through 2007; |
• | interest income; |
• | 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 through 2007, as we discontinued recognizing the effects of inflation in financial information effective January 1, 2008. |
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• | a Ps.812.8 million increase in other expense, net; and |
• | a Ps.2,142.4 million increase in integral cost of financing, net. |
• | a Ps.29.1 million increase in operating income; |
• | a Ps.334.6 million decrease in equity in earnings of affiliates, net; |
• | a Ps.443.5 million decrease in income taxes; and |
• | a Ps.351.4 million decrease in noncontrolling interest net income. |
Compared to the Year Ended December 31, 2007
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Cablevisión | Cablemás | |||||||
Video | 590,690 | 851,172 | ||||||
Broadband | 199,731 | 242,708 | ||||||
Voice | 54,068 | 76,112 | ||||||
RGUs | 844,489 | 1,169,992 |
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• | a Ps.420.7 million increase in integral cost of financing, net; | ||
• | a Ps.300.6 million increase in equity in earnings of affiliates, net; and | ||
• | a Ps.214.6 million increase in income taxes. |
• | a Ps.646.9 million increase in operating income; | ||
• | a Ps.1.3 million decrease in other expense, net; and | ||
• | a Ps.8.9 million decrease in minority interest. |
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• | the percentage that the Peso devalued or appreciated against the U.S. Dollar; |
• | the Mexican inflation rate; |
• | the U.S. inflation rate; and |
• | the percentage change in Mexican GDP compared to the prior period. |
Year Ended December 31, | ||||||||||||
2007 | 2008 | 2009 | ||||||||||
Devaluation (appreciation) of the Peso as compared to the U.S. Dollar(1) | 1.1 | % | 26.7 | % | (5.5 | %) | ||||||
Mexican inflation rate(2) | 3.8 | 6.5 | 3.8 | |||||||||
U.S. inflation rate | 4.1 | 0.1 | 2.7 | |||||||||
Increase (decrease) in Mexican GDP(3) | 3.3 | 1.5 | (6.5 | ) |
(1) | Based on changes in the Interbank Rates, as reported by Banamex, at the end of each period, which were as follows: Ps.10.8025 per U.S. Dollar as of December 31, 2006; Ps.10.9222 per U.S. Dollar as of December 31, 2007; and Ps.13.84 per U.S. Dollar as of December 31, 2008; and Ps.13.08 per U.S. Dollar as of December 31, 2009 | |
(2) | Based on changes in the NCPI from the previous period, as reported by the Mexican Central Bank, which were as follows: 121.0 in 2006; 125.6 in 2007; 133.8 in 2008; and 138.5 in 2009. | |
(3) | As reported by theInstituto Nacional de Estadística, Geografía e Informática, or INEGI, and, in the case of GDP information for 2009 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. |
• | Foreign Currency-Denominated Revenues and Operating Costs and Expenses.We have substantial operating costs and expenses denominated in foreign currencies, primarily 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 foreign currency-denominated revenues and operating costs and expenses stated in millions of U.S. Dollars for 2007, 2008 and 2009: |
Year Ended December 31, | ||||||||||||
2007 | 2008 | 2009 | ||||||||||
(Millions of U.S. Dollars) | ||||||||||||
Revenues | U.S.$ | 570 | U.S.$ | 683 | U.S.$ | 716 | ||||||
Operating costs and expenses | 615 | 685 | 659 |
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• | Depreciation and Amortization Expense.Prior to January 1, 2008, we restated 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, increased the carrying value of these assets, which in turn, increased the related depreciation expense. |
• | Integral Cost of Financing.The devaluation of the Peso as compared to the U.S. Dollar generated 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 increased 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 stockholders’ equity using the NCPI; and |
• | restatement of all inventories at net replacement cost. |
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Quoted Prices in | Internal Models | Internal Models | ||||||||||||||
Balance as of | Active Markets | with Significant | with Significant | |||||||||||||
December 31, | for Identical | Observable | Unobservable | |||||||||||||
2009 | Assets (Level 1) | Inputs (Level 2) | Inputs (Level 3) | |||||||||||||
Assets: | ||||||||||||||||
Temporary investments | Ps. | 8,902,346 | Ps. | 5,394,502 | Ps. | 3,507,844 | Ps. | — | ||||||||
Available-for-sale investments | 2,826,457 | — | 2,826,457 | — | ||||||||||||
Derivative financial instruments | 1,545,396 | — | 1,545,396 | — | ||||||||||||
Pension and seniority premiums plan assets | 1,749,629 | 1,724,629 | 25,000 | — | ||||||||||||
Total | Ps. | 15,023,828 | Ps. | 7,119,131 | Ps. | 7,904,697 | Ps. | — | ||||||||
Liabilities: | ||||||||||||||||
Derivative financial instruments | Ps. | 523,628 | Ps. | — | Ps. | 523,628 | Ps. | — | ||||||||
Total | Ps. | 523,628 | Ps. | — | Ps. | 523,628 | Ps. | — | ||||||||
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• | a Ps.555.1 million increase in operating income; |
• | a Ps.729.2 million decrease in integral cost of financing, which was due primarily to an increase in interest income and in foreign exchange gain; and |
• | a Ps.845.2 million decrease in other expense, net. |
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• | make aggregate capital expenditures for property, plant and equipment totaling U.S.$971 million, of which U.S.$339 million and U.S.$461 million (which includes U.S.$111 million that will be paid in 2011) are for the expansion and improvements of our Cable and Telecom and Sky segments, respectively, and the remaining U.S.$171 million is for our Television Broadcasting segment and other segments; and |
• | make investments related to our 40.5% interest in La Sexta for an aggregate amount of €21.5 million (U.S.$30.8 million). |
• | made aggregate capital expenditures totaling U.S.$499.3 million, of which U.S.$239 million, U.S.$128.8 million and U.S.$17.5 million correspond to our Cable and Telecom, Sky and Gaming businesses, respectively, and U.S.$114 million to our Television Broadcasting and other businesses; |
• | made investments related to our 40.5% interest in La Sexta for an aggregate amount of €35.7 million (U.S.$ 49 million); |
• | made investments in Volaris, for an aggregate amount of U.S.$5 million, and in other companies in which we hold a noncontrolling interest for an aggregate amount of U.S.$5.5 million. |
• | made aggregate capital expenditures totaling U.S.$478.8 million, of which U.S.$183.3 million, and U.S.$114 million correspond to our Cable and Telecom and Sky segments, respectively, U.S.$39.6 million to our Gaming business, and U.S.$141.9 million to our Television Broadcasting segment and other businesses; |
• | made investments related to our 40% interest in La Sexta in the aggregate amount of €44.4 million (U.S.$63.4 million) and in our equity interest in Cablemás in the amount of U.S.$100 million; and. |
• | made investments in Volaris in the amount of U.S.$12 million, and in Spot Runner in the amount of U.S.$25 million. |
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Debt Outstanding(1) | ||||||||||||||
�� | December 31, | |||||||||||||
2009 | Interest | Maturity | ||||||||||||
Description of Debt | Actual | Rate(2) | Denomination | of Debt | ||||||||||
Long-term debt | ||||||||||||||
8% Senior Notes(2) | 941.1 | 8.0 | % | U.S. Dollars | 2011 | |||||||||
6% Senior Notes(2) | 6,540.0 | 6.0 | % | U.S. Dollars | 2018 | |||||||||
8.5% Senior Notes(2) | 3,924.0 | 8.5 | % | U.S. Dollars | 2032 | |||||||||
6.625% Senior Notes(2) | 7,848.0 | 6.625 | % | U.S. Dollars | 2025 | |||||||||
8.49% Senior Notes(2) | 4,500.0 | 8.49 | % | Pesos | 2037 | |||||||||
6.625% Senior Notes(2) | 7,848.0 | 6.625 | % | U.S. Dollars | 2040 | |||||||||
9.375% Senior Notes(3) | 2,285.1 | 9.375 | % | U.S. Dollars | 2015 | |||||||||
JPMorgan Chase Bank, N.A. loan(4) | 2,943.0 | 0.775 | % | U.S. Dollars | 2012 | |||||||||
JPMorgan Chase Bank, N.A. loan(4) | 654.0 | 0.850 | % | U.S. Dollars | 2012 | |||||||||
Inbursa, S.A. loan (5) | 2,000.0 | 10.35 | % | Pesos | 2010 and 2012 | |||||||||
Santander Serfin loan (6) | 1,400.0 | 5.15 | % | Pesos | 2016 | |||||||||
Banamex loan (6) | 2,100.0 | 8.74 | % | Pesos | 2016 | |||||||||
Banco Mercantil del Norte loan (7) | 350.0 | 6.71 | % | Pesos | 2010 | |||||||||
Banamex loan (7) | 50.0 | 7.27 | % | Pesos | 2010 | |||||||||
Other debt | 33.0 | 2.00 | % | U.S. Dollars | 2010 | |||||||||
Total debt (including current maturities) | 43,416.2 | — | — | 15.5 | (8) | |||||||||
Less: current maturities | 1,433.0 | — | Various | December 2010 | ||||||||||
Total long-term debt | 41,983.2 | |||||||||||||
(1) | U.S. Dollar-denominated debt is translated into Pesos at an exchange rate of Ps.13.08 per U.S. Dollar, the Interbank Rate, as reported by Banamex, as of December 31, 2009. | |
(2) | These Senior Notes due 2011, 2018, 2025, 2032, 2037 and 2040, in the outstanding principal amount of U.S.$72 million, U.S.$500 million, U.S.$600 million, U.S.$300 million, Ps.4,500,000 and U.S.$600 million, respectively, 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 2011, 2018, 2025, 2032, 2037 and 2040, including additional amounts payable in respect of certain Mexican withholding taxes, is 8.41%, 6.31%, 6.97%, 8.94%, 8.93% and 6.97% per annum, respectively, and is payable semi-annually. These Senior Notes may not be redeemed prior to maturity, except (i) 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; and (ii) in the event of a change of control, in which case the Company may be required to redeem the securities at 101% of their principal amount. Also, the Company may, at its own option, redeem the Senior Notes due 2018, 2025, 2037 and 2040, in whole or in part, at any time at a redemption price equal to the greater of the principal amount of these Senior Notes or the present value of future cash flows, at the redemption date, of principal and interest amounts of the Senior Notes discounted at a fixed rate of comparable U.S. or Mexican sovereign bonds. The Senior Notes due 2011, 2018, 2032 and 2040 were priced at 98.793%, 99.280%, 99.431% and 98.319%, respectively, for a yield to maturity of 8.179%, 6.097%, 8.553% and 6.755%, respectively. The Senior Notes due 2025 were issued in two aggregate principal amounts of U.S.$400 million and U.S.$200 million, and were priced at 98.081% and 98.632%, respectively, for a yield to maturity of 6.802% and 6.787%, 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. The Senior Notes due 2011, 2018, 2025, 2032, 2037 and 2040 are registered with the U.S. Securities and Exchange Commission. |
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(3) | These U.S.$174.7 million Senior Guaranteed Notes are unsecured obligations of Cablemás and its restricted subsidiaries and are guaranteed by such restricted subsidiaries, rank equally in right of payment with all existing and future unsecured and unsubordinated indebtedness of Cablemás and its restricted subsidiaries, and are junior in right of payment to all of the existing and future secured indebtedness of Cablemás and its restricted subsidiaries to the extent of the value of the assets securing such indebtedness, interest on these Senior Notes, including additional amounts payable in respect of certain Mexican withholding taxes, is 9.858%, and is payable semi-annually. Cablemás may redeem these Senior Notes, in whole or in part, before November 15, 2010, at the principal amount plus a premium plus accrued and unpaid interest, and on or after November 15, 2010, at redemption prices plus accrued and unpaid interest. The agreement of these Senior Notes contains covenants relating to Cablemás and its restricted subsidiaries, including covenants with respect to limitations on indebtedness, payments, dividends, investments, sale of assets, and certain mergers and consolidations. In July 2008, Cablemás prepaid a portion of these Senior Notes in the principal amount of U.S.$0.3 million in connection with a tender offer to purchase these Senior Notes at a purchase price of 101% plus related accrued and unpaid interest. | |
(4) | In December 2007, Empresas Cablevisión and Cablemás entered into a 5-year term loan facilities with a U.S. bank in the aggregate principal amount of U.S.$225 million and U.S.$50 million, respectively, in connection with the financing for the acquisition of Letseb and Bestel USA (see Note 2). Annual interest on these loan facilities is payable on a quarterly basis at LIBOR plus an applicable margin that may range from 0.475% to 0.800% depending on a leverage ratio. At December 31, 2009, the applicable leverage ratio for Empresas Cablevisión and Cablemás was 0.525% and 0.600%, respectively. Under the terms of the loan facilities, Empresas Cablevisión and its subsidiaries and Cablemás and its subsidiaries are required to (a) maintain certain financial coverage ratios related to indebtedness and interest expense, and (b) comply with certain restrictive covenants, primarily on debt, liens, investments and acquisitions, capital expenditures, asset sales, consolidations, mergers and similar transactions. | |
(5) | In connection with certain credit agreement entered into by the Company with a Mexican bank, with maturities from 2010 through 2012. Interest on this loan is 10.350% per annum, and is payable on a monthly basis. 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. | |
(6) | Long-term loans entered into by Sky with Mexican banks in the aggregate principal amount of Ps.3,500,000 with a maturity in 2016. This Sky long-term indebtedness is guaranteed by the Company and includes a Ps.2,100,000 loan with an annual interest rate of 8.74% and a Ps.1,400,000 loan with an annual interest rate of 8.98% through March and April 2009, respectively, and the Mexican Interbank Interest Rate or “TIIE” plus 24 basis points for the remaining period through maturity. Interest on these two long-term loans is payable on a monthly basis. Under the terms of these loan agreements, Sky is required to maintain (a) certain financial coverage ratios related to indebtedness and interest expense; and (b) certain restrictive covenants on indebtedness, liens, asset sales, and certain mergers and consolidations. | |
(7) | Includes short term debt of current portion of long term debt with Mexican banks for TVI’s incorporation, bearing annual interest rates of 8.35% and the Mexican Interbank Interest Rate plus 1.50% and 2.20%, payable on a monthly basis. | |
(8) | Actual weighted average maturity of long-term debt as of December 31, 2009. |
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Year Ended December 31,(1)(2) | ||||||||||||
2007 | 2008 | 2009 | ||||||||||
Interest payable in U.S. Dollars | U.S.$ | 87.2 | U.S.$ | 124.4 | U.S.$ | 125.8 | ||||||
Amounts currently payable under Mexican withholding taxes(3) | 3.7 | 4.6 | 5.5 | |||||||||
Total interest payable in U.S. Dollars | U.S.$ | 90.9 | U.S.$ | 129.0 | U.S.$ | 131.3 | ||||||
Peso equivalent of interest payable in U.S. Dollars | Ps. | 1,014.4 | Ps. | 1,432.7 | Ps. | 1,788.7 | ||||||
Interest payable in Pesos | 1,149.6 | 1,383.7 | 1,347.7 | |||||||||
Restatement of UDI-denominated Notes Due 2007 | 13.0 | — | — | |||||||||
Total interest expense | Ps. | 2,177.0 | Ps. | 2,816.4 | Ps. | 3,136.4 | ||||||
(1) | U.S. Dollars are translated into Pesos at the rate prevailing when interest was recognized as an expense for each period, and the Peso amounts for the years ended December 31, 2007 were restated to Pesos in purchasing power as of December 31, 2007. We discontinued recognizing the effects of inflation in financial information effective January 1, 2008. | |
(2) | Interest expense in these periods includes amounts effectively payable in U.S. Dollars as a result of U.S. Dollar-Peso swaps. Interest expense in these periods also includes gains or losses from related derivative instruments. | |
(3) | See “Additional Information — Taxation — Federal Mexican Taxation”. |
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Payments Due by Period | ||||||||||||||||||||
Less Than | ||||||||||||||||||||
12 Months | 12-36 Months | 36-60 Months | After | |||||||||||||||||
January 1, | January 1, | January 1, | 60 Months | |||||||||||||||||
2010 to | 2011 to | 2013 to | Subsequent to | |||||||||||||||||
December 31, | December 31, | December 31, | December 31, | |||||||||||||||||
Total | 2010 | 2012 | 2014 | 2014 | ||||||||||||||||
(Thousands of U.S. Dollars) | ||||||||||||||||||||
8% Senior Notes due 2011 | U.S.$ | 71,951 | U.S.$ | — | U.S.$ | 71,951 | U.S.$ | — | U.S.$ | — | ||||||||||
6.0% Senior Notes due 2018 | 500,000 | 500,000 | ||||||||||||||||||
6.625% Senior Notes due 2025 | 600,000 | 600,000 | ||||||||||||||||||
8.5% Senior Notes due 2032 | 300,000 | 300,000 | ||||||||||||||||||
8.49% Senior Notes due 2037 | 344,037 | 344,037 | ||||||||||||||||||
6.625% Senior Notes due 2040 | 600,000 | 600,000 | ||||||||||||||||||
9.375% Senior Notes due 2015 | 174,700 | 174,700 | ||||||||||||||||||
Inbursa loan due 2010 and 2012 | 152,905 | 76,453 | 76,452 | |||||||||||||||||
JPMorgan Chase Bank, N.A. loan facility due 2012 | 225,000 | 225,000 | ||||||||||||||||||
JPMorgan Chase Bank, N.A. loan facility due 2012 | 50,000 | 50,000 | ||||||||||||||||||
Santander Serfin loan due 2016 | 107,034 | 107,034 | ||||||||||||||||||
Banamex loan due 2016 | 160,550 | 160,550 | ||||||||||||||||||
Banco Mercantil del Norte loan due 2010 | 26,758 | 26,758 | ||||||||||||||||||
Banamex loan due 2010 | 3,823 | 3,823 | ||||||||||||||||||
Other debt | 2,524 | 2,524 | ||||||||||||||||||
Long-term debt | 3,319,282 | 109,558 | 423,403 | 2,786,321 | ||||||||||||||||
Accrued Interest | 35,521 | 35,521 | ||||||||||||||||||
Satellite transponder obligation | 84,744 | 11,246 | 12,609 | 14,138 | 46,751 | |||||||||||||||
Other capital lease obligations | 22,422 | 6,742 | 8,703 | 3,430 | 3,547 | |||||||||||||||
Transmission rights(1) | 280,739 | 61,791 | 119,801 | 78,147 | 21,000 | |||||||||||||||
Total contractual obligations | U.S.$ | 3,742,708 | U.S.$ | 224,858 | U.S.$ | 564,516 | U.S.$ | 95,715 | U.S.$ | 2,857,619 | ||||||||||
(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 | |||||||||||||||||
January 1, | January 1, | January 1, | Months | |||||||||||||||||
2010 to | 2011 to | 2013 to | Subsequent to | |||||||||||||||||
December 31, | December 31, | December 31, | December 31, | |||||||||||||||||
Total | 2010 | 2012 | 2014 | 2014 | ||||||||||||||||
(Thousands of U.S. Dollars) | ||||||||||||||||||||
Satellite transponder commitments(1) | U.S.$ | 35,935 | U.S.$ | 11,026 | U.S.$ | 15,923 | U.S.$ | 5,520 | U.S.$ | 3,466 | ||||||||||
Agreement with Intelsat Corporation(2) | 148,350 | 29,050 | 114,500 | 3,600 | 1,200 | |||||||||||||||
Capital expenditures commitments(3) | 24,590 | 24,590 | — | — | — | |||||||||||||||
Lease commitments(4) | 54,841 | 15,960 | 22,911 | 4,158 | 11,812 | |||||||||||||||
Interest on debt(5) | 3,639,260 | 185,559 | 419,057 | 400,263 | 2,634,381 | |||||||||||||||
Interest on capital lease obligations | 36,887 | 10,345 | 16,053 | 8,288 | 2,201 | |||||||||||||||
Programming obligation | 45,106 | 29,345 | 14,365 | 1,396 | — | |||||||||||||||
Committed capital contributions to La Sexta (6) | 30,812 | 30,812 | — | — | — | |||||||||||||||
Total contractual obligations | U.S.$ | 4,015,781 | U.S.$ | 336,687 | U.S.$ | 602,809 | U.S.$ | 423,225 | U.S.$ | 2,653,060 | ||||||||||
(1) | Our minimum commitments for the use of satellite transponders under operating lease contracts. | |
(2) | Agreement of Sky and Sky Brasil with Intelsat Corporation to build and launch a new 24-transponder satellite (“IS-16”). The IS-16 was launched in the first quarter of 2010. See Note 11 to our year-end financial statements. | |
(3) | Our commitments for capital expenditures include U.S.$12,222, which are related to improvements to leasehold facilities of our gaming operations. | |
(4) | Our minimum non-cancellable lease commitments for facilities under operating lease contracts, which are primarily related to our gaming business, under operating leases expiring through 2047. See Note 11 to our year-end financial statements. | |
(5) | Interest to be paid in future years on outstanding debt as of December 31, 2009, was estimated based on contractual interest rates and exchange rates as of that date. | |
(6) | We have commitments of capital contributions in 2010, subject to certain conditions, related to our 40.5% equity interest in La Sexta in the aggregate amount of €21.5 million (U.S.$30,812). |
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Name and Date of Birth | Principal Occupation | Business Experience | First Elected | |||
Emilio Fernando Azcárraga Jean (02/21/68) | Chairman of the Board, President and Chief Executive Officer and Chairman of the Executive Committee of Grupo Televisa | Member of the Board of Banco Nacional de México | December 1990 | |||
In alphabetical order: | ||||||
Alfonso de Angoitia Noriega (01/17/62) | Executive Vice President, Member of the Executive Office of the Chairman and Member of the Executive Committee of Grupo Televisa | Member of the Board of Grupo Modelo | April 1997 | |||
Pedro Carlos Aspe Armella (07/07/50) | Co-Chairman of Evercore | Member of the Board of The McGraw-Hill Companies and Chairman of the Board of Volaris Airline | April 2003 | |||
Alberto Bailléres González (08/22/31) | Chairman of the Boards of Grupo Bal, Industrias Peñoles, Fresnillo PLC, Grupo Palacio de Hierro, Grupo Nacional Provincial and Grupo Profuturo, Director of Valores Mexicanos Casa de Bolsa, Chairman of the Government Board of Instituto Tecnológico Autonomo de México and Associate Founder Fundación Alberto Bailleres | Chairman of the Boards of Grupo Dine, Grupo Kuo, Grupo Financiero BBVA Bancomer and Fomento Económico Mexicano | April 2004 | |||
Julio Barba Hurtado (05/20/33) | Legal Advisor to the Company, Secretary of the Audit & Corporate Practices Committee and Member of the Executive Committee of the Company | Former Legal Advisor to the Board of the Company and Former Assistant Secretary of the Board of the Company | December 1990 | |||
José Antonio Bastón Patiño (04/13/68) | President of Television and Contents and Member of the Executive Committee of Grupo Televisa | Former Corporate Vice President of Television and Vice President of Operations of Grupo Televisa | April 1998 |
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Name and Date of Birth | Principal Occupation | Business Experience | First Elected | |||
Francisco José Chévez Robelo (07/03/29) | Retired Partner of Chévez, Ruíz, Zamarripa y Cía., S.C., Chairman of the Audit and Corporate Practices Committee of Grupo Televisa and Member of the Board of Diretors and Chairman of the Audit and Corporate Practices Committee of Empresas Cablevisión | Retired Partner of Chévez, Ruíz, Zamarripa y Cía., S.C. and Member of Board of Directors and Chairman of the Audit and Corporate Practices Committee of Empresas Cablevisión | April 2003 | |||
Manuel Jorge Cutillas Covani (03/01/32) | Private Investor | Member of the Board of Directors of Lyford Cay Foundation | April 1992 | |||
José Antonio Fernández Carbajal (02/15/54) | Chairman of the Board and Chief Executive Officer of Fomento Económico Mexicano and Chairman of the Board of Coca-Cola FEMSA | Vice-Chairman of the Board of Directors of ITESM, Vice-Chairman of the Supervisory Board of Heineken N.V., Chairman of the Advisory Board of the Woodrow Wilson Center, México Institute Co. and Member of the Board of Directors of Grupo Financiero BBVA Bancomer, Industrias Peñoles, Grupo Industrial Bimbo, Concesionaria Vuela Compañía de Aviación, Grupo Xignux, CEMEX and Heineken Holding N.V. | April 2007 | |||
Carlos Fernández González (09/29/66) | Chief Executive Officer and Chairman of the Board of Grupo Modelo, Member of the Board and Partner of Fnaccess México, Partner and Chief Executive Officer of Tendora San Carlos | Member of the Boards of Emerson Electric Co, Grupo Financiero, Santander and Crown Imports, LLC | July 2000 | |||
Bernardo Gómez Martínez (07/24/67) | Executive Vice President, 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 of Kimberly-Clark de México | Member of the Boards of Grupo Alfa, Grupo México, Investment Company of America and Mexico Fund | April 1997 | |||
Roberto Hernández Ramírez (03/24/42) | Chairman of the Board of Banco Nacional de México | Member of the Board of Grupo Financiero Banamex | April 1992 |
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Name and Date of Birth | Principal Occupation | Business Experience | First Elected | |||
Enrique Krauze Kleinbort (09/17/47) | Director and Member of the Boards of Editorial Clío Libros, y Videos and of Editorial Vuelta | Member and Chairman of the Boards of Quadrant and President of the Board of Directors of Productora Contadero | April 1996 | |||
Germán Larrea Mota Velasco (10/26/53) | Chairman of the Board and Chief Executive Officer of Grupo México | Member of the Board of Financiero Banamex | April 1999 | |||
Michael Larson (10/07/59) | Chief Investment Officer of William H. Gates III | Chairman of Western Asset Claymore Inflation Linked Securities & Income Fund and Western Asset/Claymore Inflation Linked Opportunities Fund and Director of Hamilton Lane Advisors, LLC and Pan American Silver Corp. | April 2009 | |||
Lorenzo Alejandro Mendoza Giménez (10/05/65) | Chief Executive Officer, Member of the Board and President of the Executive Committee of Empresas Polar | Former Member of the Boards of AES La Electricidad de Caracas, CANTV-Verizon and BBVA Banco Provincial | April 2009 | |||
Alejandro Jesus 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. | April 1998 | |||
Fernando Senderos Mestre (03/03/50) | Chairman of the Board and President of the Executive Committee of Desc, Dine and Grupo Kuo | Member of the Boards of Grupo Alfa, Grupo Carso, Kimberly-Clark de México, Industrias Peñoles and Grupo Nacional Provincial | April 1992 | |||
Enrique Francisco José Senior Hernández (08/03/43) | Managing Director of Allen & Company, LLC | Member of the Boards of Coca-Cola FEMSA, Cinemark and FEMSA | April 2001 | |||
Alternate Directors: | ||||||
In alphabetical order: Herbert A. Allen III (06/08/67) | President of Allen & Company LLC | Former Executive Vice President and Managing Director of Allen & Company Incorporated, Member of the Board of Convera Corporation | April 2002 | |||
Félix José Araujo Ramírez (03/20/51) | Vice President of Televisa Regional and Chief Executive Officer of Telesistema Méxicano | President of the Board of Directors of Televisora de Navojoa and Televisora Peninsular and Member of the Board of Directors and Chief Executive Officer of several Grupo Televisa subsidiaries | April 2002 |
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Name and Date of Birth | Principal Occupation | Business Experience | First Elected | |||
Joaquín Balcárcel Santa Cruz (01/04/69) | Vice President — Legal and General Counsel of Grupo Televisa | Former Vice President and General Counsel of Television Division, former Legal Director of Grupo Televisa | March 2000 | |||
Rafael Carabias Príncipe (11/13/44) | Vice President of Supervision of Foreign Subsidiaries | Former Vice President of Corporate Management of Televisa Corporación and former Chief Financial Officer of Gestora de Inversiones Audiovisuales La Sexta. | April 1999 | |||
José Luis Fernández Fernández (05/18/59) | Managing Partner of Chévez, Ruíz, Zamarripa y Cia., S.C.; Member of the Audit and Corporate Practices Committee of Grupo Televisa | Commisioner of Sport City Universidad, Club de Golf Los Encinos and Member of the Board of Directors of Grupo Pochteca and Global Assurance Brokers Agente de Seguros de Fianzas | April 2002 | |||
Salvi Rafael 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 Más, 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 News of Grupo Televisa | Former Director of Information to the President of Grupo Televisa | April 2003 | |||
Jorge Agustín Lutteroth Echegoyen (01/24/53) | Vice President and Corporate Controller of Grupo Televisa | Former Senior Partner of Coopers & Lybrand Despacho Roberto Casas Alatriste, S.C. and former Controller of Televisa Corporación | July 1998 | |||
Alberto Javier Montiel Castellanos (11/22/45) | Director of Montiel Font y Asociados, S.C. and Member of the Audit and Corporate Practices Committees of Grupo Televisa and Empresas Cablevisión | Former Tax Vice President of Grupo Televisa, former Tax Director of Wal-Mart de México and Member of the Board of Directors of Operadora Dos Mil and Dofiscal Editores | 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. and Member of the Audit and Corporate Practices Committee of Empresas Cablevisión | April 2002 |
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• | our principals, employees or managers, as well as the statutory auditors, orcomisarios, of our subsidiaries, including those individuals who have occupied any of the described positions within a period of 12 months preceding the appointment; |
• | individuals who have significant influence over our decision making processes; |
• | controlling stockholders, in our case, the beneficiary of the Azcárraga Trust; |
• | partners or employees of any company which provides advisory services to us or any company that is part of the same economic group as we are and that receives 10% or more of its income from us; |
• | significant clients, suppliers, debtors or creditors, or members of the Board or executive officers of any such entities; or |
• | spouses, family relatives up to the fourth degree, or cohabitants of any of the aforementioned individuals. |
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• | our general strategy; |
• | with input from the Audit and Corporate Practices Committee, on an individual basis: (i) any transactions with related parties, subject to certain limited exceptions; (ii) the appointment of our Chief Executive Officer, his compensation and removal for justified causes; (iii) our financial statements; (iv) unusual or non-recurrent transactions and any transactions or series of related transactions during any calendar year that involve (a) the acquisition or sale of assets with a value equal to or exceeding 5% of our consolidated assets, or (b) the giving of collateral or guarantees or the assumption of liabilities, equal to or exceeding 5% of our consolidated assets; (v) agreements with our external auditors; and (vi) accounting policies within Mexican FRS; |
• | creation of special committees and granting them the power and authority, provided that the committees will not have the authority, which by law or under our bylaws is expressly reserved for the stockholders or the Board; |
• | matters related to antitakeover provisions provided for in our bylaws; and |
• | the exercise of our general powers in order to comply with our corporate purpose. |
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Name and Date of Birth | Principal Position | Business Experience | First Appointed | |||
Emilio Fernando Azcárraga Jean (02/21/68) | Chairman of the Board, President and Chief Executive Officer and Chairman of the Executive Committee of Grupo Televisa | Member of the Board of Banco Nacional de México | March 1997 | |||
In alphabetical order: | ||||||
Alfonso de Angoitia Noriega (01/17/62) | Executive Vice President, Member of the Executive Office of the Chairman and Member of the Executive Committee of Grupo Televisa | Member of the Board of Grupo Modelo | January 2004 | |||
Félix José Araujo Ramírez (03/20/51) | Vice President of Televisa Regional and Chief Executive Officer of Telesistema Méxicano | President of the Board of Directors of Televisora de Navojoa and Televisora Peninsular and Member of the Board of Directors and Chief Executive Officer of several Grupo Televisa subsidiaries | January 1993 | |||
Maximiliano Arteaga Carlebach (12/06/42) | Vice President of Technical Operations, Services & Television Production of Grupo Televisa | Former Vice President of Operations of Televisa Chapultepec, former Vice President of Administration of Televisa San Ángel and Chapultepec and former Vice President of Administration and Finance of Univisa, Inc. | March 2002 | |||
José Antonio Bastón Patiño (04/13/68) | President of Television and Contents and Member of the Executive Committee of Grupo Televisa | Former Corporate Vice President of Television and Vice President of Operations | November 2008 April 1999 | |||
Jean Paul Broc Haro (08/08/62) | Chief Executive Officer of Cablevisión, and General Manager of Grupo Mexicano de Cable, Integravisión de Occidente, Milar, Servicios Cablevisión, Telestar del Pacifico and Tecnicable | Former Chief Executive Officer of Pay Television Networks of Grupo Televisa, former Technical and Operations Director of Pay Television Networks of Grupo Televisa, Chairman of the Board and Chief Executive Officer of several Grupo Televisa subsidiaries. | February 2003 |
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Name and Date of Birth | Principal Position | Business Experience | First Appointed | |||
Salvi Rafael 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 Más, S.A. de C.V. and former Vice Chairman of Banking Supervision of the National Banking and Securities Commission | January 2004 | |||
Bernardo Gómez Martínez (07/24/67) | Executive Vice President, 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 and former President of the Mexican Chamber of Television and Radio Broadcasters | January 2004 | |||
Javier Mérida Guzmán (07/31/67) | Chief Executive Officer of Sistema Radiópolis | Former Chief Executive Officer and National Sales Manager of Cadena SER Málaga and Chief Executive Officer of Cadena Radiodifusora Mexicana, Radio Tapatia, Radio Melodia, Radio Comerciales, Radiotelevisora de Mexicali, Servicios Radiopolis, Servicios Xezz, Sistema Radiopolis and Xezz | September 2006 | |||
Alexandre Moreira Penna (12/25/54) | Chief Executive Officer and Chairman of the Board of Managers of Corporación Novaimagen and Chairman of the Board and Chief Executive Officer of several Grupo Televisa subsidiaries | Former Vice President of Corporate Finance of Grupo Televisa, former Managing Director of JPMorgan Chase Bank, N.A. | February 2004 | |||
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 Jesus 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. | January 1998 |
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Year Ended December 31, | ||||||||||||
2007 | 2008 | 2009 | ||||||||||
Total number of employees | 17,810 | 22,528 | 24,362 | |||||||||
Category of activity: | ||||||||||||
Employees | 17,777 | 22,488 | 24,323 | |||||||||
Executives | 33 | 40 | 39 | |||||||||
Geographic location: | ||||||||||||
Mexico | 15,871 | 20,571 | 22,506 | |||||||||
Latin America (other than Mexico) | 1,473 | 1,529 | 1,508 | |||||||||
U.S. | 466 | 428 | 348 |
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Aggregate | ||||||||||||||||||||||||||||||||||||
Percentage of | ||||||||||||||||||||||||||||||||||||
Shares 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 | 44.4 | % | 67,814,604 | 0.1 | % | 107,886,870 | 0.1 | % | 107,886,870 | 0.1 | % | 15.5 | % | ||||||||||||||||||||||
Dodge & Cox, Inc.(4) | 3,833,049,000 | 3.2 | % | 3,373,083,120 | 6.1 | % | 5,366,268,600 | 6.3 | % | 5,366,268,600 | 6.3 | % | 5.2 | % | ||||||||||||||||||||||
Cascade Investment, LLC(5) | 3,644,562,500 | 3.1 | % | 3,207,215,000 | 5.8 | % | 5,102,387,500 | 6.0 | % | 5,102,387,500 | 6.0 | % | 5.0 | % |
(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, 2010. The number of shares issued and outstanding for legal purposes as of May 31, 2010 was 60,454,828,050 series A Shares, 53,200,248,684 series B Shares, 84,636,759,270 series D Shares and 84,636,759,270 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 FRS only, the number of shares authorized, issued and outstanding as of May 31, 2010 was 58,618,151,650 series A Shares, 51,583,973,452 series B Shares, 82,065,412,310 series D Shares and 82,065,412,310 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 FRS as of May 31, 2010 does not include: 73,467,056 CPOs and an additional 6,010,764,410 series A Shares, 2,357,021,155 series B Shares, 54 series D Shares and 54 series L Shares not in the form of CPOs acquired by the trust we created to implement our long-term retention plan. See Note 12 to our year-end financial statements. | |
(2) | Except through the Azcárraga 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 Azcárraga Trust, see “— The Major Stockholders” below. | |
(4) | Based solely on information included in the report on Form 13F filed on March 31, 2010 by Dodge & Cox. | |
(5) | Based solely on information included in the report on Form 13D filed on March 31, 2010 by Cascade Investment, L.L.C. |
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Nominal Pesos per CPO(1) | ||||||||
High | Low | |||||||
2005 | 44.13 | 29.20 | ||||||
2006 | 60.88 | 37.67 | ||||||
2007 | 68.10 | 48.29 | ||||||
2008 | 57.35 | 36.19 | ||||||
First Quarter | 52.91 | 44.81 | ||||||
Second Quarter | 57.35 | 47.68 | ||||||
Third Quarter | 52.76 | 43.29 | ||||||
Fourth Quarter | 48.55 | 36.19 | ||||||
December | 43.75 | 38.04 | ||||||
2009 | 56.67 | 33.91 | ||||||
First Quarter | 44.31 | 33.91 | ||||||
Second Quarter | 48.17 | 39.39 | ||||||
Third Quarter | 50.64 | 43.59 | ||||||
Fourth Quarter | 56.67 | 48.45 | ||||||
December | 54.52 | 52.74 | ||||||
2010 (through June 17, 2010) | 54.46 | 45.25 | ||||||
First Quarter | 54.46 | 47.29 | ||||||
January | 54.46 | 50.50 | ||||||
February | 52.21 | 47.29 | ||||||
March | 52.65 | 48.84 | ||||||
Second Quarter (through June 17, 2010) | 53.33 | 45.25 | ||||||
April | 53.33 | 48.87 | ||||||
May | 51.07 | 46.87 | ||||||
June (through June 17, 2010) | 48.42 | 45.25 |
(1) | Source: Mexican Stock Exchange. |
U.S. Dollars per GDS(1) | ||||||||
High | Low | |||||||
2005 | 20.77 | 13.19 | ||||||
2006 | 28.20 | 16.38 | ||||||
2007 | 31.14 | 22.04 | ||||||
2008 | 27.68 | 13.21 | ||||||
First Quarter | 24.77 | 20.85 | ||||||
Second Quarter | 27.68 | 23.09 | ||||||
Third Quarter | 25.96 | 19.92 | ||||||
Fourth Quarter | 22.19 | 13.21 | ||||||
December | 16.39 | 14.32 |
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U.S. Dollars per GDS(1) | ||||||||
High | Low | |||||||
2009 | 22.13 | 10.92 | ||||||
First Quarter | 16.66 | 10.92 | ||||||
Second Quarter | 18.20 | 14.16 | ||||||
Third Quarter | 18.99 | 16.30 | ||||||
Fourth Quarter | 22.13 | 17.74 | ||||||
December | 21.39 | 20.53 | ||||||
2010 (June 17, 2010) | 21.66 | 17.52 | ||||||
First Quarter | 21.15 | 18.30 | ||||||
January | 21.15 | 19.54 | ||||||
February | 20.24 | 18.30 | ||||||
March | 21.04 | 19.13 | ||||||
Second Quarter (through June 17, 2010) | 21.66 | 17.52 | ||||||
April | 21.66 | 19.75 | ||||||
May | 20.75 | 17.95 | ||||||
June (through June 17, 2010) | 18.94 | 17.52 |
(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; |
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• | 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. |
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• | 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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• | members of a listed issuer’s board of directors, |
• | stockholders 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); |
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• | extension of our existence beyond our prescribed duration; |
• | our dissolution before our prescribed duration (which is currently December); |
• | 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 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 |
• | 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. |
• | any redemption shall be made on a pro-rata basis among all of our stockholders; |
• | to the extent that a redemption is effected through a public tender offer on the Mexican Stock Exchange, the stockholders’ 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 request our Chairman of the Board or of the Audit and Corporate Practices Committee to call a stockholders’ meeting in which they are entitled to vote; |
• | subject to the satisfaction of certain requirements under Mexican law, holders of at least 5% 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 stockholders’ 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 stockholder resolution. |
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• | 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. |
• | the tax consequences to the stockholders, 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. |
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• | the Code, 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 “U.S.-Mexico Tax Treaty,” and |
• | is subject to changes to those laws and the U.S.-Mexico Tax Treaty subsequent to the date of this annual report, which changes could be made on a retroactive basis, and |
• | 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.” |
• | is not a resident of Mexico for purposes of the U.S.-Mexico Tax Treaty; |
• | is an individual who has a substantial presence in the United States; |
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• | is entitled to the benefits of the U.S.-Mexico Tax Treaty under the limitation on benefits provision contained in Article 17 of the U.S.-Mexico 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 owner’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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• | an individual is a Mexican tax resident if the individual has established his permanent home in Mexico. When an individual, in addition to his permanent home in Mexico, has a permanent 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. Mexican nationals who filed a change of tax residence to a country or jurisdiction that does not have a comprehensive exchange of information agreement with Mexico in which her/his income is subject to a preferred tax regime pursuant to the provisions of the Mexican Income Tax Law, will be considered Mexican residents for tax purposes during the year of filing of the notice of such residence change and during the following three years. Unless otherwise proven, a Mexican national is considered a Mexican tax resident; |
• | a legal entity is considered a Mexican tax resident if it maintains the main administration of its head office, business, or the effective location of its management in Mexico. |
• | a foreign person with a permanent establishment in Mexico will be required to pay taxes in Mexico in accordance with the Mexican Tax Legislation for income attributable to such permanent establishment; and |
• | a foreign person without a permanent establishment in Mexico will be required to pay taxes in Mexico in respect of revenues proceeding from sources of wealth located in national territory. |
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Fair Value at December 31, | ||||||||||||
2008 | 2009 | 2009 | ||||||||||
(Millions of Pesos or millions of U.S. Dollars)(1) | ||||||||||||
Assets: | ||||||||||||
Temporary investments(2) | Ps. | 8,321.3 | Ps. | 8,902.3 | U.S.$ | 680.6 | ||||||
Derivative financial instruments(12) | 2,363.1 | 1,545.4 | 118.1 | |||||||||
Liabilities: | ||||||||||||
U.S. Dollar-denominated debt: | ||||||||||||
Senior Notes due 2011(3) | 1,055.7 | 1,015.4 | 77.6 | |||||||||
Senior Notes due 2018(4) | 5,977.2 | 6,587.7 | 503.6 | |||||||||
Senior Notes due 2032(5) | 3,913.2 | 4,688.4 | 358.4 | |||||||||
Senior Notes due 2025(6) | 6,767.8 | 7,851.1 | 600.2 | |||||||||
Senior Notes due 2040(7) | — | 7,698.6 | 588.6 | |||||||||
JPMorgan Chase Bank, N.A. loan due 2012(8) | 3,251.7 | 3,173.4 | 242.6 | |||||||||
Senior Notes due 2015(9) | 2,070.3 | 2,494.5 | 190.7 | |||||||||
Peso-denominated debt: | ||||||||||||
Senior Notes due 2037(10) | 4,129.7 | 4,055.6 | 310.1 | |||||||||
Long-term notes payable to Mexican banks(11) | 6,846.3 | 6,135.4 | 469.1 | |||||||||
Derivative financial instruments(12) | 604.6 | 523.6 | 40.0 |
(1) | Peso amounts have been converted to U.S. Dollars solely for the convenience of the reader at a nominal exchange rate of Ps.13.0800 per U.S. Dollar, the Interbank Rate as of December 31, 2009. Beginning on January 1, 2008, we discontinued recognizing the effects of inflation in our financial information in accordance with Mexican FRS. | |
(2) | At December 31, 2009, our temporary investments consisted of highly liquid securities, including without limitation debt securities (primarily Peso- and U.S. Dollar-denominated in 2008 and 2009). 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, 2009, fair value exceeded the carrying value of these notes by Ps.74.3 million (U.S.$5.6 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.175.8 million (U.S.$13.4 million) at December 31, 2009. | |
(4) | At December 31, 2009, fair value exceeded the carrying value of these notes by Ps.47.7 million (U.S.$3.6 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.706.4 million (U.S.$54.0 million) at December 31, 2009. | |
(5) | At December 31, 2009, fair value exceeded the carrying value of these notes by Ps.764.4 million (U.S.$58.4 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.1,233.2 million (U.S.$94.3 million) at December 31, 2009. | |
(6) | At December 31, 2009, fair value exceeded the carrying value of these notes by Ps.3.1 million (U.S.$0.2 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.788.2 million (U.S.$60.3 million) at December 31, 2009. |
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(7) | At December 31, 2009, carrying value exceeded the fair value of these notes by Ps.149.4 million (U.S.$11.4 million). The increase in the fair value of these notes of a hypothetical 10% increase in the quoted market price of these notes, the fair value would exceeded the carrying value by approximately Ps.620.4 million (U.S.$47.4 million) at December 31, 2009. | |
(8) | At December 31, 2009, carrying value exceeded the fair value of these notes by Ps.423.6 million (U.S.$32.3 million). Assuming an increase in the fair value of these notes of a hypothetical 10% increase in the quoted market price of these notes, the carrying value would exceed the fair value by approximately Ps.106.3 million (U.S.$8.1 million) at December 31, 2009. | |
(9) | At December 31, 2009, fair value exceeded the carrying value of these notes by Ps.209.5 million (U.S.$16.0 million). Assuming an increase in the fair value of these notes of a hypothetical 10% increase in the quoted market price of these notes would amount approximately Ps.458.9 million (U.S.$35.0 million) at December 31, 2009. | |
(10) | At December 31, 2009, carrying value exceeded the fair value of these notes by Ps.444.4 million (U.S.$33.9 million). Assuming an increase in the fair value of these notes of a hypothetical 10% increase in the quoted market price of these notes, the carrying value would exceed the fair value by approximately Ps.38.9 million (U.S.$2.9 million) at December 31, 2009. | |
(11) | At December 31, 2009, fair value exceeded the carrying value of these notes by Ps.235.4 million (U.S.$17.9 million). At December 31, 2009, a hypothetical 10% increase in Mexican interest rates would increase the fair value of these notes by approximately Ps.848.8 million (U.S.$64.6 million) at December 31, 2009. | |
(12) | Given the nature of these derivative instruments, an increase of 10% in the interest and or exchange rates would not have a significant impact on the fair value of these financial instruments. |
Year Ended December 31, | ||||||||
2008 | 2009 | |||||||
(In millions of U.S. Dollars) | ||||||||
U.S. Dollar-denominated monetary assets, primarily cash and cash equivalents, temporary investments and held-to-maturity debt securities (1) | U.S.$ | 2,182.5 | U.S.$ | 2,436.4 | ||||
U.S. Dollar-denominated monetary liabilities, primarily trade accounts payable, senior debt securities and other notes payable (2) | 2,547.1 | 3,044.5 | ||||||
(364.6 | ) | (608.1 | ) | |||||
Derivative instruments, liabilities, net | (0.3 | ) | 0.0 | |||||
Net liability position | U.S.$ | (364.9 | ) | U.S.$ | (608.1 | ) | ||
(1) | In 2008 and 2009, include U.S. Dollar equivalent amounts of U.S.$155.2 million and U.S.$110.2 million, respectively, related to other foreign currencies, primarily Euros. | |
(2) | In 2008 and 2009, include U.S. Dollar equivalent amounts of U.S.$40.4 million and U.S.$54.2 million, respectively, related to other foreign currencies, primarily Euros. |
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Avenida Vasco de Quiroga, No. 2000
Colonia Santa Fe, 01210 México, D.F., México.
Telephone: (52) (55) 5261-2000.
2008 | 2009 | |||||||
(in millions of Pesos) | ||||||||
Audit Fees | Ps. | 65.8 | Ps. | 68.4 | ||||
Audit-Related Fees | 3.5 | 7.9 | ||||||
Tax Fees | 8.1 | 5.7 | ||||||
Other Fees | 0.9 | 0.2 | ||||||
Total | Ps. | 78.3 | Ps. | 82.2 | ||||
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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(2) | ||||||||||||
January 1 to January 31 | Ps. | — | Ps. | 0.0000 | 225,886,800 | Ps. | 17,417,444,345 | |||||||||
February 1 to February 29 | — | 0.0000 | 225,886,800 | 17,417,444,345 | ||||||||||||
March 1 to March 31 | — | 0.0000 | 225,886,800 | 14,417,444,345 | ||||||||||||
April 1 to April 30 | — | 0.0000 | 225,886,800 | 18,000,000,000 | ||||||||||||
May 1 to May 31 | 170,000 | 43.6580 | 226,056,800 | 17,992,578,142 | ||||||||||||
June 1 to June 30 | — | 0.0000 | 226,056,800 | 17,992,578,142 | ||||||||||||
July 1 to July 31 | — | 0.0000 | 226,056,800 | 17,992,578,142 | ||||||||||||
August 1 to August 31 | — | 0.0000 | 226,056,800 | 17,992,578,142 | ||||||||||||
September 1 to September 30 | 1,400,000 | 48.6875 | 227,456,800 | 17,924,415,582 | ||||||||||||
October 1 to October 31 | 1,931,700 | 51.4955 | 229,388,500 | 17,824,941,782 | ||||||||||||
November 1 to November 30 | 4,633,000 | 54.4607 | 234,021,500 | 17,572,625,242 | ||||||||||||
December 1 to December 31 | 5,143,100 | 53.9934 | 239,164,600 | 17,294,931,850 | ||||||||||||
Total | Ps. | 13,277,800 | Ps. | 53.1013 | 239,164,600 | Ps. | 17,294,931,850 | |||||||||
(1) | The values have not been restated in constant Mexican Pesos and therefore represent nominal historical figures. | |
(2) | The total amount of our share repurchase program was updated in accordance with the resolution that our stockholders approved in a general meeting of the stockholders of Grupo Televisa, S.A.B. held on April 30, 2009. | |
(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)(4)
Maximum Number (or | ||||||||||||||||
Appropriate Mexican | ||||||||||||||||
Peso Value) | ||||||||||||||||
of CPOs | ||||||||||||||||
Total Number of | that May Yet Be | |||||||||||||||
Total Number | CPOs | Purchased Under the | ||||||||||||||
of CPOs | Average Price | Purchased as part of | Stock Purchase | |||||||||||||
Purchase Date | Purchased | Paid per CPO(2) | the Stock Purchase Plan | Plan(3) | ||||||||||||
January 1 to January 31 | — | Ps. | 0.0000 | 67,964,900 | ||||||||||||
February 1 to February 29 | — | 0.0000 | 67,964,900 | |||||||||||||
March 1 to March 31 | 500,000 | 34.5939 | 68,464,900 | |||||||||||||
April 1 to April 30 | 100,000 | 39.2350 | 68,564,900 | |||||||||||||
May 1 to May 31 | — | 0.0000 | 68,564,900 | |||||||||||||
June 1 to June 30 | — | 0.0000 | 68,564,900 | |||||||||||||
July 1 to July 31 | — | 0.0000 | 68,564,900 | |||||||||||||
August 1 to August 31 | — | 0.0000 | 68,564,900 | |||||||||||||
September 1 to September 30 | — | 0.0000 | 68,564,900 | |||||||||||||
October 1 to October 31 | — | 0.0000 | 68,564,900 | |||||||||||||
November 1 to November 30 | — | 0.0000 | 68,564,900 | |||||||||||||
December 1 to December 31 | — | 0.0000 | 68,564,900 | |||||||||||||
Total | 600,000 | Ps. | 35.3674 | 68,564,900 | ||||||||||||
(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. | |
(4) | In May 2009, CPOs and shares not assigned to plan participants were transferred to the Long-Term Retention Plan. |
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formed in connection with Stock Purchase Plan(1)
Maximum Number (or | ||||||||||||||||
Appropriate Mexican | ||||||||||||||||
Peso Value) | ||||||||||||||||
of CPOs | ||||||||||||||||
Total Number of | that May Yet Be | |||||||||||||||
Total Number | CPOs | Purchased Under the | ||||||||||||||
of CPOs | Average Price | Purchased as part of | Stock Purchase | |||||||||||||
Purchase Date | Purchased | Paid per CPO(2) | the Stock Purchase Plan | Plan(3) | ||||||||||||
January 1 to January 31 | 429,500 | Ps. | 39.8452 | 3,636,000 | ||||||||||||
February 1 to February 29 | 270,000 | 36.4541 | 3,906,000 | |||||||||||||
March 1 to March 31 | — | — | 3,906,000 | |||||||||||||
April 1 to April 30 | 100,000 | 38.6315 | 4,006,000 | |||||||||||||
May 1 to May 31 | 385,000 | 44.5589 | 4,391,000 | |||||||||||||
June 1 to June 30 | — | — | 4,391,000 | |||||||||||||
July 1 to July 31 | — | — | 4,391,000 | |||||||||||||
August 1 to August 31 | 600,000 | 45.2498 | 4,991,000 | |||||||||||||
September 1 to September 30 | 1,660,000 | 47.6440 | 6,651,000 | |||||||||||||
October 1 to October 31 | 907,000 | 50.4200 | 7,558,000 | |||||||||||||
November 1 to November 30 | 1,740,000 | 53.9801 | 9,298,000 | |||||||||||||
December 1 to December 31 | 2,379,300 | 54.0026 | 11,677,300 | |||||||||||||
Total | 8,470,800 | Ps. | 49.8605 | 11,667,300 | ||||||||||||
(1) | See “Directors, Senior Management and Employees — Long-Term Retention Plan” for a description of the implementation, limits and other terms of our Long-Term Retention 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 Long-Term Retention 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 Long-Term Retention Plan. |
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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 stockholder’s meeting is 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 stockholder that may have influence over our officers, relevant clients and contractors, as well as certain relationships between the independent director 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 six members, and there are no applicable Mexican rules 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 required to have a corporate practices committee. | |
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 Mexican Code of Best Business Practices’ recommendation must disclose publicly why their practices differ from those recommended by the Mexican Code of Best Business Practices. | |
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 regularly scheduled 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 require shareholder approval for equity compensation plans, subject to limited exemptions. | Companies listed on the Mexican Stock Exchange are required to obtain shareholder approval for equity compensation plans, provided that such plans are subject to certain conditions. | |
Listed companies must adopt and disclose a code of business conduct and ethics for directors, officers and employees, and promptly disclose 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 adopted a code of ethics which is available free of charge through our offices. See “— 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. |
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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 30, 2009 (previously filed with the Securities and Exchange Commission as Exhibit 1.1 to the Registrant’s Annual Report on Form 20-F for the year ended December 31, 2008 (the “2008 Form 20-F”), 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). | ||||
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 (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, 2005 (the “2005 Form 20-F”) and incorporated herein by reference). | ||||
2.9 | — | Tenth Supplemental Indenture related to the 8.49% Senior Notes due 2037 between Registrant, as Issuer, The Bank of New York and The Bank of New York (Luxembourg) S.A., dated as of May 9, 2007 (previously filed with the Securities and Exchange Commission as Exhibit 2.9 to the 2006 Form 20-F and incorporated herein by reference). |
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Exhibit | ||||||
Number | Description of Exhibits | |||||
2.10 | — | Eleventh Supplemental Indenture relating to the 8.49% Senior Exchange Notes due 2037 between Registrant, as Issuer, The Bank of New York and The Bank of New York (Luxembourg) S.A., dated as August 24, 2007 (previously filed with the Securities and Exchange Commission as Exhibit 4.12 to the Registrant’s Registration Statement on Form F-4 (File number 333-144460), as amended (the “2007 Form F-4”), and incorporated herein by reference). | ||||
2.11 | — | Twelfth Supplemental Indenture related to the 6.0% Senior Notes due 2018 between Registrant, as Issuer, The Bank of New York and The Bank of New York (Luxembourg) S.A., dated as of May 12, 2008 (previously filed with the Securities and Exchange Commission as Exhibit 2.11 to the Form 20-F for the year ended December 31, 2007 (the “2007 Form 20-F”) and incorporated herein by reference). | ||||
2.12 | — | Form of Deposit Agreement between the Registrant, The Bank of New York, 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 333-146130) (the “2007 Form F-6”) and incorporated herein by reference). | ||||
2.13 | — | Thirteenth Supplemental Indenture relating to the 6.0% Senior Exchange Notes due 2018 between Registrant, as Issuer, The Bank of New York Mellon and The Bank of New York (Luxembourg) S.A., dated as August 21, 2008 (previously filed with the Securities and Exchange Commission as Exhibit 4.14 to the Registrant’s Registration Statement on Form F-4 (File number 333-144460), as amended (the “2008 Form F-4”), and incorporated herein by reference). | ||||
2.14 | — | Fourteenth Supplemental Indenture relating to the 6.625% Senior Notes due 2040 between Registrant, as Issuer, The Bank of New York Mellon and The Bank of New York (Luxembourg) S.A., dated as November 30, 2009 (previously filed with the Securities and Exchange Commission as Exhibit 4.15 to the Registrant’s Registration Statement on Form F-4 (File number 333-164595), as amended (the “2010 Form F-4”), and incorporated herein by reference). | ||||
2.15 | — | Fifteenth Supplemental Indenture relating to the 6.625% Senior Exchange Notes due 2040 between Registrant, as Issuer, The Bank of New York Mellon and The Bank of New York (Luxembourg) S.A., dated as March 22, 2010. | ||||
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). | ||||
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). |
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Exhibit | ||||||
Number | Description of Exhibits | |||||
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 (previously filed with the Securities and Exchange Commission as Exhibit 4.7 to the 2005 Form 20-F and incorporated herein by reference). | ||||
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. (previously filed with the Securities and Exchange Commission as Exhibit 4.7 to the 2005 Form 20-F and incorporated herein by reference). | ||||
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 (previously filed with the Securities and Exchange Commission as Exhibit 4.7 to the 2005 Form 20-F and incorporated herein by reference). | ||||
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 2006 Credit Agreement”) and the April Credit Agreement (in Spanish) (previously filed with the Securities and Exchange Commission as Exhibit 4.7 to the 2005 Form 20-F and incorporated herein by reference). | ||||
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., Grupo Televisa, S.A.B. 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). | ||||
4.16 | — | Full-Time Transponder Service Agreement, dated as of November _____, 2007, by and among Intelsat Corporation, Intelsat LLC, Corporación de Radio y Televisión del Norte de México, S. de R. L. de C.V. and SKY Brasil Serviços Ltda (previously filed with the Securities and Exchange Commission as Exhibit 4.16 to the 2007 Form 20-F and incorporated herein by reference). |
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Exhibit | ||||||
Number | Description of Exhibits | |||||
4.17 | — | Credit Agreement, dated as of December 19, 2007, by and among Empresas Cablevisión, S.A.B. de C.V., JPMorgan Chase Bank, N.A., as administrative agent and J.P. Morgan Securities Inc., as sole bookrunner and lead arranger (previously filed with the Securities and Exchange Commission as Exhibit 4.17 to the 2007 Form 20-F and incorporated herein by reference). | ||||
4.18 | — | Third Amended and Restated Program License Agreement, dated as of January 22, 2009, by and between Televisa, S.A. de C.V., as successor in interest to Televisa Internacional, S.A. de C.V. and Univision Communications Inc. (previously filed with the Securities and Exchange Commission on February 2, 2009 (File number 001-12610) and incorporated herein by reference). | ||||
4.19 | * | — | Investment and Securities Subscription Agreement, dated as of February 15, 2010, by and among NII Holdings, Inc., Comunicaciones Nextel de Mexico, S.A. de C.V., Nextel International (Uruguay), LLC and Grupo Televisa, S.A.B. | |||
8.1 | — | List of Subsidiaries of Registrant. | ||||
12.1 | — | CEO Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, dated June 21, 2010. | ||||
12.2 | — | CFO Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, dated June 21, 2010. | ||||
13.1 | — | CEO Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, dated June 21, 2010. | ||||
13.2 | — | CFO Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, dated June 21, 2010. | ||||
23.1 | — | Consent of PricewaterhouseCoopers S.C. |
* | Portions of this exhibit have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment. |
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GRUPO TELEVISA, S.A.B. | ||||||
By: | /s/ Salvi Folch Viadero | |||||
Name: | Salvi Rafael Folch Viadero | |||||
Title: | Chief Financial Officer | |||||
By: | /s/ Jorge Lutteroth Echegoyen | |||||
Name: | Jorge Lutteroth Echegoyen | |||||
Title: | Vice President — Controller |
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Page | ||||
F-2 | ||||
F-3 | ||||
F-5 | ||||
F-6 | ||||
F-7 | ||||
F-8 | ||||
F-9 |
F-1
Table of Contents
Audit Partner
June 21, 2010
F-2
Table of Contents
As of December 31, 2008 and 2009
(In thousands of Mexican Pesos)
(Notes 1 and 2)
Notes | 2008 | 2009 | ||||||||||
ASSETS | ||||||||||||
Current: | ||||||||||||
Cash and cash equivalents | Ps. | 33,583,045 | Ps. | 29,941,488 | ||||||||
Temporary investments | 8,321,286 | 8,902,346 | ||||||||||
41,904,331 | 38,843,834 | |||||||||||
Trade notes and accounts receivable, net | 3 | 18,199,880 | 18,399,183 | |||||||||
Other accounts and notes receivable, net | 2,231,562 | 3,530,546 | ||||||||||
Due from affiliated companies | 161,821 | 135,723 | ||||||||||
Transmission rights and programming | 4 | 3,343,448 | 4,372,988 | |||||||||
Inventories | 1,612,024 | 1,665,102 | ||||||||||
Other current assets | 1,105,871 | 1,435,081 | ||||||||||
Total current assets | 68,558,937 | 68,382,457 | ||||||||||
Derivative financial instruments | 9 | 2,316,560 | 1,538,678 | |||||||||
Transmission rights and programming | 4 | 6,324,761 | 5,915,459 | |||||||||
Investments | 5 | 3,348,610 | 6,361,023 | |||||||||
Property, plant and equipment, net | 6 | 30,798,398 | 33,071,464 | |||||||||
Intangible assets and deferred charges, net | 7 | 11,433,783 | 11,218,864 | |||||||||
Other assets | 70,756 | 80,431 | ||||||||||
Total assets | Ps. | 122,851,805 | Ps. | 126,568,376 | ||||||||
F-3
Table of Contents
As of December 31, 2008 and 2009
(In thousands of Mexican Pesos)
(Notes 1 and 2)
Notes | 2008 | 2009 | ||||||||||
LIABILITIES | ||||||||||||
Current: | ||||||||||||
Current portion of long-term debt | 8 | Ps. | 2,270,353 | Ps. | 1,433,015 | |||||||
Current portion of capital lease obligations | 8 | 151,628 | 235,271 | |||||||||
Trade accounts payable | 6,337,436 | 6,432,906 | ||||||||||
Customer deposits and advances | 18,098,643 | 19,858,290 | ||||||||||
Taxes payable | 830,073 | 940,975 | ||||||||||
Accrued interest | 439,777 | 464,621 | ||||||||||
Employee benefits | 199,993 | 200,215 | ||||||||||
Due to affiliated companies | 88,622 | 34,202 | ||||||||||
Other accrued liabilities | 2,293,806 | 2,577,835 | ||||||||||
Total current liabilities | 30,710,331 | 32,177,330 | ||||||||||
Long-term debt, net of current portion | 8 | 36,630,583 | 41,983,195 | |||||||||
Capital lease obligations, net of current portion | 8 | 1,222,163 | 1,166,462 | |||||||||
Derivative financial instruments | 9 | 604,650 | 523,628 | |||||||||
Customer deposits and advances | 589,369 | 1,054,832 | ||||||||||
Other long-term liabilities | 3,225,482 | 3,078,411 | ||||||||||
Deferred income taxes | 19 | 2,265,161 | 1,765,381 | |||||||||
Retirement and termination benefits | 10 | 352,390 | 346,990 | |||||||||
Total liabilities | 75,600,129 | 82,096,229 | ||||||||||
Commitments and contingencies | 11 | |||||||||||
STOCKHOLDERS’ EQUITY | ||||||||||||
Capital stock issued, no par value | 12 | 10,060,950 | 10,019,859 | |||||||||
Additional paid-in capital | 4,547,944 | 4,547,944 | ||||||||||
14,608,894 | 14,567,803 | |||||||||||
Retained earnings: | 13 | |||||||||||
Legal reserve | 2,135,423 | 2,135,423 | ||||||||||
Unappropriated earnings | 19,595,259 | 17,244,674 | ||||||||||
Net income for the year | 7,803,652 | 6,007,143 | ||||||||||
29,534,334 | 25,387,240 | |||||||||||
Accumulated other comprehensive income, net | 14 | 3,184,043 | 3,401,825 | |||||||||
Shares repurchased | 12 | (5,308,429 | ) | (5,187,073 | ) | |||||||
27,409,948 | 23,601,992 | |||||||||||
Total controlling interest | 42,018,842 | 38,169,795 | ||||||||||
Noncontrolling interest | 15 | 5,232,834 | 6,302,352 | |||||||||
Total stockholders’ equity | 47,251,676 | 44,472,147 | ||||||||||
Total liabilities and stockholders’ equity | Ps. | 122,851,805 | Ps. | 126,568,376 | ||||||||
F-4
Table of Contents
For the Years Ended December 31, 2007, 2008 and 2009
(In thousands of Mexican Pesos, except per CPO amounts)
(Notes 1 and 2)
Notes | 2007 | 2008 | 2009 | |||||||||||||
Net sales | 22 | Ps. | 41,561,526 | Ps. | 47,972,278 | Ps. | 52,352,501 | |||||||||
Cost of sales (excluding depreciation and amortization) | 18,128,007 | 21,556,025 | 23,768,369 | |||||||||||||
Selling expenses (excluding depreciation and amortization) | 3,277,526 | 3,919,163 | 4,672,168 | |||||||||||||
Administrative expenses (excluding depreciation and amortization) | 2,452,027 | 3,058,168 | 3,825,507 | |||||||||||||
Depreciation and amortization | 6 and 7 | 3,223,070 | 4,311,115 | 4,929,589 | ||||||||||||
Operating income | 22 | 14,480,896 | 15,127,807 | 15,156,868 | ||||||||||||
Other expense, net | 17 | 953,352 | 952,139 | 1,764,846 | ||||||||||||
Integral cost of financing, net | 18 | 410,214 | 830,882 | 2,973,254 | ||||||||||||
Equity in losses of affiliates, net | 5 | 749,299 | 1,049,934 | 715,327 | ||||||||||||
Income before income taxes | 12,368,031 | 12,294,852 | 9,703,441 | |||||||||||||
Income taxes | 19 | 3,349,641 | 3,564,195 | 3,120,744 | ||||||||||||
Consolidated net income | 9,018,390 | 8,730,657 | 6,582,697 | |||||||||||||
Noncontrolling interest net income | 15 | 935,927 | 927,005 | 575,554 | ||||||||||||
Noncontrolling interest net income | 13 | Ps. | 8,082,463 | Ps. | 7,803,652 | Ps. | 6,007,143 | |||||||||
Controlling interest net income per CPO | 20 | Ps. | 2.84 | Ps. | 2.77 | Ps. | 2.14 | |||||||||
F-5
Table of Contents
For the Years Ended December 31, 2007, 2008 and 2009
(In thousands of Mexican Pesos)
(Notes 1 and 2)
Accumulated | ||||||||||||||||||||||||||||||||
Capital | Other | |||||||||||||||||||||||||||||||
Stock | Additional | Retained | Comprehensive | Shares | Total | Noncontrolling | Total | |||||||||||||||||||||||||
Issued | Paid-In | Earnings | (Loss) Income | Repurchased | Controlling | Interest | Stockholders’ | |||||||||||||||||||||||||
(Note 12) | Capital | (Note 13) | (Note 14) | (Note 12) | Interest | (Note 15) | Equity | |||||||||||||||||||||||||
Balance at January 1, 2007 | Ps. | 10,506,856 | Ps. | 4,547,944 | Ps. | 33,014,827 | Ps. | (3,808,377 | ) | Ps. | (7,888,974 | ) | Ps. | 36,372,276 | Ps. | 1,642,601 | Ps. | 38,014,877 | ||||||||||||||
Dividends | — | — | (4,506,492 | ) | — | — | (4,506,492 | ) | — | (4,506,492 | ) | |||||||||||||||||||||
Share cancellation | (239,286 | ) | — | (3,386,013 | ) | — | 3,625,299 | — | — | — | ||||||||||||||||||||||
Repurchase of capital stock | — | — | — | — | (3,948,331 | ) | (3,948,331 | ) | — | (3,948,331 | ) | |||||||||||||||||||||
Sale of repurchase shares | — | — | (173,169 | ) | — | 272,940 | 99,771 | — | 99,771 | |||||||||||||||||||||||
Increase in noncontrolling interest | — | — | — | — | — | — | 1,968,586 | 1,968,586 | ||||||||||||||||||||||||
Stock-based compensation | — | — | 140,517 | — | — | 140,517 | — | 140,517 | ||||||||||||||||||||||||
Comprehensive income | — | — | 8,082,463 | 798,909 | — | 8,881,372 | — | 8,881,372 | ||||||||||||||||||||||||
Balance at December 31, 2007 | 10,267,570 | 4,547,944 | 33,172,133 | (3,009,468 | ) | (7,939,066 | ) | 37,039,113 | 3,611,187 | 40,650,300 | ||||||||||||||||||||||
Reclassification of cumulative balances to retained earnings (see Note 14) | — | — | (5,896,939 | ) | 5,896,939 | — | — | — | — | |||||||||||||||||||||||
Dividends | — | — | (2,229,973 | ) | — | — | (2,229,973 | ) | — | (2,229,973 | ) | |||||||||||||||||||||
Share cancellation | (206,620 | ) | — | (3,275,032 | ) | — | 3,481,652 | — | — | — | ||||||||||||||||||||||
Repurchase of capital stock | — | — | — | — | (1,251,148 | ) | (1,251,148 | ) | — | (1,251,148 | ) | |||||||||||||||||||||
Sale of repurchase shares | — | — | (261,553 | ) | — | 400,133 | 138,580 | — | 138,580 | |||||||||||||||||||||||
Increase in noncontrolling interest | — | — | — | — | — | — | 1,621,647 | 1,621,647 | ||||||||||||||||||||||||
Stock-based compensation | — | — | 222,046 | — | — | 222,046 | — | 222,046 | ||||||||||||||||||||||||
Comprehensive income | — | — | 7,803,652 | 296,572 | — | 8,100,224 | — | 8,100,224 | ||||||||||||||||||||||||
Balance at December 31, 2008 | 10,060,950 | 4,547,944 | 29,534,334 | 3,184,043 | (5,308,429 | ) | 42,018,842 | 5,232,834 | 47,251,676 | |||||||||||||||||||||||
Dividends | — | — | (9,163,857 | ) | — | — | (9,163,857 | ) | — | (9,163,857 | ) | |||||||||||||||||||||
Share cancellation | (41,091 | ) | — | (541,466 | ) | — | 582,557 | — | — | — | ||||||||||||||||||||||
Repurchase of capital stock | — | — | — | — | (759,003 | ) | (759,003 | ) | — | (759,003 | ) | |||||||||||||||||||||
Sale of repurchase shares | — | — | (215,984 | ) | — | 297,802 | 81,818 | — | 81,818 | |||||||||||||||||||||||
Increase in noncontrolling interest | — | — | — | — | — | — | 1,069,518 | 1,069,518 | ||||||||||||||||||||||||
Net loss on acquisition of noncontrolling interest in Cablemás and Cablestar | — | — | (56,210 | ) | — | — | (56,210 | ) | — | (56,210 | ) | |||||||||||||||||||||
Stock-based compensation | — | — | 371,783 | — | — | 371,783 | — | 371,783 | ||||||||||||||||||||||||
Adjustment to retained earnings for changes in tax consolidation (see Note 19) | — | — | (548,503 | ) | — | — | (548,503 | ) | — | (548,503 | ) | |||||||||||||||||||||
Comprehensive income | — | — | 6,007,143 | 217,782 | — | 6,224,925 | — | 6,224,925 | ||||||||||||||||||||||||
Balance at December 31, 2009 | Ps. | 10,019,859 | Ps. | 4,547,944 | Ps. | 25,387,240 | Ps. | 3,401,825 | Ps. | (5,187,073 | ) | Ps. | 38,169,795 | Ps. | 6,302,352 | Ps. | 44,472,147 | |||||||||||||||
F-6
Table of Contents
For the Year Ended December 31, 2007
(In thousands of Mexican Pesos)
(Notes 1 and 2)
2007 | ||||
Operating activities: | ||||
Consolidated net income | Ps. | 9,018,390 | ||
Adjustments to reconcile net income to resources provided by operating activities: | ||||
Equity in losses of affiliates | 749,299 | |||
Depreciation and amortization | 3,223,070 | |||
Impairment of long-lived assets and other amortization | 541,996 | |||
Deferred income taxes | (358,122 | ) | ||
Loss on disposition of available-for sale investment in Univision | 565,862 | |||
Gain on disposition of affiliates | (41,527 | ) | ||
Stock-based compensation | 140,517 | |||
13,839,485 | ||||
Changes in operating assets and liabilities: | ||||
Increase in: | ||||
Trade notes and accounts receivable, net | (3,090,936 | ) | ||
Transmission rights and programming | (1,878,256 | ) | ||
Inventories | (32,053 | ) | ||
Other accounts and notes receivable and other current assets | (443,962 | ) | ||
Increase in: | ||||
Customer deposits and advances | 1,840,116 | |||
Trade accounts payable | 840,911 | |||
Other liabilities, taxes payable and deferred taxes | 519,488 | |||
Retirement and termination benefits | 17,097 | |||
(2,227,595 | ) | |||
Resources provided by operating activities | 11,611,890 | |||
Financing activities: | ||||
Issuance of Senior Notes due 2037 | 4,500,000 | |||
Empresas Cablevisión’s long-term loan due 2012 | 2,457,495 | |||
Prepayments of Senior Notes and UDIs denominated Notes | (1,017,093 | ) | ||
Other increase in debt | 50,051 | |||
Other decrease in debt | (675,234 | ) | ||
Repurchase and sale of capital stock | (3,848,560 | ) | ||
Dividends paid | (4,506,492 | ) | ||
Noncontrolling interest | 1,032,659 | |||
Translation effect | 32,877 | |||
Resources used in financing activities | (1,974,297 | ) | ||
Investing activities: | ||||
Due from affiliated companies, net | 32,636 | |||
Investments | (3,385,342 | ) | ||
Disposition of investments | 700,689 | |||
Investments in property, plant and equipment | (3,915,439 | ) | ||
Disposition of property, plant and equipment | 704,310 | |||
Investments in goodwill and other intangible assets | (3,310,968 | ) | ||
Available-for-sale investment in shares of Univision | 12,266,318 | |||
Acquisition of Telecom net assets | (1,975,666 | ) | ||
Other assets | 7,430 | |||
Resources provided by investing activities | 1,123,968 | |||
Net increase in cash, cash equivalents and temporary investments | 10,761,561 | |||
Net increase in cash, cash equivalents and temporary investments upon Telecom acquisition | 138,261 | |||
Cash, cash equivalents and temporary investments at beginning of year | 16,405,074 | |||
Cash, cash equivalents and temporary investments at end of year | Ps. | 27,304,896 | ||
F-7
Table of Contents
For the Years Ended December 31, 2008 and 2009
(In thousands of Mexican Pesos)
(Notes 1 and 2)
2008 | 2009 | |||||||
Operating activities: | ||||||||
Income before income taxes | Ps. | 12,294,852 | Ps. | 9,703,441 | ||||
Adjustments to reconcile income before income taxes to net cash provided by operating activities: | ||||||||
Equity in losses of affiliates | 1,049,934 | 715,327 | ||||||
Depreciation and amortization | 4,311,115 | 4,929,589 | ||||||
Impairment of long-lived assets and other amortization | 669,222 | 1,224,450 | ||||||
Provision for doubtful accounts and write-off of receivables | 337,478 | 897,162 | ||||||
Retirement and termination benefits | 5,467 | 58,196 | ||||||
Gain on disposition of investments | — | (90,565 | ) | |||||
Interest income | — | (19,531 | ) | |||||
Write-down of held-to-maturity debt security | 405,111 | — | ||||||
Stock-based compensation | 222,046 | 371,783 | ||||||
Derivative financial instruments | (895,734 | ) | 644,956 | |||||
Interest expense | 2,529,221 | 2,832,675 | ||||||
Unrealized foreign exchange loss, net | 4,981,960 | (1,003,537 | ) | |||||
25,910,672 | 20,263,946 | |||||||
Increase in trade notes and accounts receivable, net | (1,094,389 | ) | (1,082,292 | ) | ||||
Increase in transmission rights and programming | (1,186,991 | ) | (674,645 | ) | ||||
Increase in inventories | (375,153 | ) | (45,148 | ) | ||||
Increase in other accounts and notes receivable and other current assets | (391,399 | ) | (1,347,376 | ) | ||||
Increase (decrease) in trade accounts payable | 1,577,231 | (80,920 | ) | |||||
(Decrease) increase in customer deposits and advances | (1,187,734 | ) | 2,242,021 | |||||
Increase in other liabilities, taxes payable and deferred taxes | 1,744,395 | 158,066 | ||||||
Decrease in retirement and termination benefits | (81,314 | ) | (16,035 | ) | ||||
Income taxes paid | (2,657,525 | ) | (4,282,042 | ) | ||||
(3,652,879 | ) | (5,128,371 | ) | |||||
Net cash provided by operating activities | 22,257,793 | 15,135,575 | ||||||
Investing activities: | ||||||||
Temporary investments | (5,208,287 | ) | (3,565,772 | ) | ||||
Due from affiliated companies, net | (89,826 | ) | (2,309 | ) | ||||
Investments | (1,982,100 | ) | (809,625 | ) | ||||
Disposition of investments | 109,529 | 57,800 | ||||||
Disposition of held-to-maturity investments | 874,999 | — | ||||||
Investments in property, plant and equipment | (5,191,446 | ) | (6,410,869 | ) | ||||
Disposition of property, plant and equipment | 91,815 | 248,148 | ||||||
Investments in goodwill and other intangible assets | (1,489,174 | ) | (569,601 | ) | ||||
Net cash used in investing activities | (12,884,490 | ) | (11,052,228 | ) | ||||
Financing activities: | ||||||||
Issuance of Senior Notes due 2018 | 5,241,650 | — | ||||||
Issuance of Senior Notes due 2040 | — | 7,612,055 | ||||||
Prepayment of Senior Notes due 2013 (Sky) | (122,886 | ) | — | |||||
Repayment of Mexican Peso debt | (480,000 | ) | (1,162,460 | ) | ||||
Repayment of foreign currency debt | — | (1,206,210 | ) | |||||
Capital lease payments | (97,696 | ) | (138,807 | ) | ||||
Other increase in debt | 1,231 | 33,856 | ||||||
Interest paid | (2,407,185 | ) | (2,807,843 | ) | ||||
Repurchase and sale of capital stock | (1,112,568 | ) | (677,185 | ) | ||||
Dividends paid | (2,229,973 | ) | (9,163,857 | ) | ||||
Noncontrolling interest | (332,029 | ) | 76,344 | |||||
Derivative financial instruments | (346,065 | ) | (206,776 | ) | ||||
Net cash used in financing activities | (1,885,521 | ) | (7,640,883 | ) | ||||
Effect of exchange rate changes on cash and cash equivalents | 131,854 | (105,530 | ) | |||||
Net increase (decrease) in cash and cash equivalents | 7,619,636 | (3,663,066 | ) | |||||
Cash and cash equivalents of Cablemás upon consolidation | 483,868 | — | ||||||
Cash and cash equivalents of TVI upon consolidation | — | 21,509 | ||||||
Cash and cash equivalents at beginning of year | 25,479,541 | 33,583,045 | ||||||
Cash and cash equivalents at end of year | Ps. | 33,583,045 | Ps. | 29,941,488 | ||||
F-8
Table of Contents
For the Years Ended December 31, 2007, 2008 and 2009
(In thousands of Mexican Pesos, except per CPO, per share and exchange rate amounts)
F-9
Table of Contents
Company’s | ||||||
Consolidated Entities | Ownership (1) | Business Segment (2) | ||||
Grupo Telesistema, S.A. de C.V. and subsidiaries, including Televisa, S.A. de C.V. (“Televisa”) | 100 | % | Television Broadcasting Pay Television Networks Programming Exports | |||
Televisión Independiente de México, S.A. de C.V. and subsidiaries | 100 | % | Television Broadcasting | |||
TuTv, LLC (“TuTv”) (3) | 50 | % | Pay Television Networks | |||
Editorial Televisa, S.A. de C.V. and subsidiaries | 100 | % | Publishing | |||
Innova, S. de R. L. de C.V. and subsidiaries (collectively, “Sky”) (3) | 58.7 | % | Sky | |||
Empresas Cablevisión, S.A.B. de C.V. and subsidiaries (collectively, “Empresas Cablevisión”) | 51 | % | Cable and Telecom | |||
Cablemás, S.A. de C.V. and subsidiaries (collectively, “Cablemás”) | 58.3 | % | Cable and Telecom | |||
Televisión Internacional, S.A. de C.V. and subsidiaries (collectively, “TVI”) | 50 | % | Cable and Telecom | |||
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 | |||
Grupo Distribuidoras Intermex, S.A. de C.V. and subsidiaries | 100 | % | Other Businesses | |||
Sistema Radiópolis, S.A. de C.V. and subsidiaries | 50 | % | Other Businesses | |||
Televisa Juegos, S.A. de C.V. and subsidiaries | 100 | % | Other Businesses |
(1) | Percentage of equity interest directly or indirectly held by the Company in the consolidated entity. | |
(2) | See Note 22 for a description of each of the Group’s business segments. | |
(3) | At December 31, 2009, the Group had identified Sky and TuTv as variable interest entities and the Group as the primary beneficiary of the investment in each of these entities. The Group has a 58.7% interest in Sky, a satellite television provider. TuTv is a 50% joint venture with Univision Communications Inc. (“Univision”), engaged in the distribution of the Group’s Spanish-speaking programming packages in the United States. |
Segments | Expiration Dates | |
Television Broadcasting | In 2021 | |
Sky | Various from 2016 to 2033 | |
Cable and Telecom | Various from 2013 to 2038 | |
Other Businesses: | ||
Radio (1) | Various from 2008 to 2016 | |
Gaming | In 2030 |
(1) | Concessions for three of the Group’s Radio stations in Guadalajara and Mexicali expired in 2008 and 2009, and renewal is still pending before the Mexican regulatory authorities as certain related regulations of the applicable law are being reviewed by the Mexican Federal Government. The Group’s management expects that concessions for these three stations will be renewed or granted by the Mexican Federal Government. The concessions for the Group’s remaining Radio stations will expire between 2015 and 2016. |
F-10
Table of Contents
F-11
Table of Contents
F-12
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. | |
• | Revenues from magazine subscriptions are initially deferred and recognized proportionately as products are delivered to subscribers. Revenues from the sales of magazines are recognized on the date of circulation of delivered merchandise, net of a provision for estimated returns. | |
• | The revenue from publishing distribution is recognized upon distribution of the products. | |
• | Sky program service revenues, including advances from customers for future direct-to-home (“DTH”) program services, activation and installation fees, are recognized at the time the service is provided. |
F-13
Table of Contents
• | Cable television, internet and telephone subscription, and pay-per-view and installation fees are recognized in the period in which the services are rendered. | |
• | Revenues from telecommunications and data services are recognized in the period in which these services are provided. Telecommunications services include long distance and local telephony, as well as leasing and maintenance of telecommunications facilities. | |
• | 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. | |
• | Gaming revenues consist of the net win from gaming activities, which is the difference between amounts wagered and amounts paid to winning patrons. |
F-14
Table of Contents
F-15
Table of Contents
F-16
Table of Contents
2008 | 2009 | |||||||
Non-interest bearing notes received from customers as deposits and advances | Ps. | 14,383,384 | Ps. | 14,515,450 | ||||
Accounts receivable, including value-added tax receivables related to advertising services | 4,838,999 | 5,430,943 | ||||||
Allowance for doubtful accounts | (1,022,503 | ) | (1,547,210 | ) | ||||
Ps. | 18,199,880 | Ps. | 18,399,183 | |||||
2008 | 2009 | |||||||
Transmission rights | Ps. | 5,764,887 | Ps. | 6,133,176 | ||||
Programming | 3,903,322 | 4,155,271 | ||||||
9,668,209 | 10,288,447 | |||||||
Non-current portion of: | ||||||||
Transmission rights | 4,069,777 | 3,790,714 | ||||||
Programming | 2,254,984 | 2,124,745 | ||||||
6,324,761 | 5,915,459 | |||||||
Current portion of transmission rights and programming | Ps. | 3,343,448 | Ps. | 4,372,988 | ||||
F-17
Table of Contents
Ownership % | ||||||||||||
as of December 31, | ||||||||||||
2008 | 2009 | 2009 | ||||||||||
Accounted for by the equity method: | ||||||||||||
Gestora de Inversiones Audiovisuales La Sexta, S.A. and subsidiaries (collectively, “La Sexta”) (a) | Ps. | 1,296,950 | Ps. | 1,043,752 | 40.5 | % | ||||||
Ocesa Entretenimiento, S.A. de C.V. and subsidiaries (collectively, “OCEN”) (b) | 457,598 | 429,388 | 40 | % | ||||||||
Controladora Vuela Compañía de Aviación, S.A. de C.V. and subsidiaries (collectively, “Volaris”) (c) | 80,381 | 248,162 | 25 | % | ||||||||
TVI (see Note 2) | 367,856 | — | ||||||||||
Other | 96,192 | 301,324 | ||||||||||
2,298,977 | 2,022,626 | |||||||||||
Other investments: | ||||||||||||
Held-to-maturity debt securities (see Note 1(g)) (d) | 809,115 | 1,169,611 | ||||||||||
Available-for-sale investments (see Note 1(g)) (e) | — | 2,826,457 | ||||||||||
Other | 240,518 | 342,329 | ||||||||||
1,049,633 | 4,338,397 | |||||||||||
Ps. | 3,348,610 | Ps. | 6,361,023 | |||||||||
(a) | La Sexta is a free-to-air television channel in Spain. During 2007, 2008 and 2009, the Group made additional capital contributions related to its interest in La Sexta in the amount of€65.9 million (Ps.1,004,697),€44.4 million (Ps.740,495) and€35.7 million (Ps.663,082), respectively. During 2007, a third party acquired a 20% stake in Imagina Media Audiovisual, S.A. (“Imagina”), the parent company of the companies that hold a majority equity interest in La Sexta. As a result of this acquisition, Imagina paid the Company€29 million (Ps.462,083) as a termination fee for the cancellation of a call option to subscribe at a price of€80 million, a certain percentage of the capital stock of Imagina (see Note 11). | |
(b) | OCEN is a majority-owned subsidiary of Corporación Interamericana de Entretenimiento, S.A. de C.V., and is engaged in the live entertainment business in Mexico. In 2007, 2008 and 2009, OCEN paid dividends to the Group in the aggregate amount of Ps.94,382, Ps.56,000 and Ps.56,000, respectively (see Note 16). | |
(c) | Volaris is a low-cost carrier airline with a concession to operate in Mexico and abroad. In 2008 and 2009, the Group made additional capital contributions related to its 25% interest in Volaris in the amount of U.S.$12 million (Ps.125,856) and U.S.$5 million (Ps.69,000), respectively (see Note 16). | |
(d) | Held-to-maturity securities represent corporate fixed income securities with long-term maturities. These investments are stated at amortized cost. During the year ended December 31, 2008, the Group recognized a write-down of Ps.405,111 on a held-to-maturity debt security reducing the carrying amount of this security to zero. | |
(e) | In the second half of 2009, the Group invested an aggregate amount of U.S.$180 million in a telecom and media open-ended fund. |
2007 | 2008 | 2009 | ||||||||||
Equity in losses of affiliates, net | Ps. | (749,299 | ) | Ps. | (1,049,934 | ) | Ps. | (715,327 | ) | |||
Equity in other comprehensive income (loss) of affiliates: | ||||||||||||
Foreign currency translation adjustments, net | 171,297 | 244,122 | (29,319 | ) | ||||||||
Result from holding non-monetary assets, net | 2,151 | — | — | |||||||||
Gain (loss) on equity accounts, net | 5,382 | (58,109 | ) | 39,525 | ||||||||
Ps. | (570,469 | ) | Ps. | (863,921 | ) | Ps. | (705,121 | ) | ||||
F-18
Table of Contents
2008 | 2009 | |||||||
Buildings | Ps. | 9,364,648 | Ps. | 9,424,738 | ||||
Buildings improvements | 1,813,972 | 1,670,084 | ||||||
Technical equipment(1) | 34,293,372 | 38,838,481 | ||||||
Satellite transponders | 1,789,890 | 1,789,890 | ||||||
Furniture and fixtures | 849,074 | 836,038 | ||||||
Transportation equipment | 1,657,389 | 1,559,816 | ||||||
Computer equipment(1) | 2,480,803 | 3,089,962 | ||||||
Leasehold improvements | 1,168,194 | 1,383,541 | ||||||
53,417,342 | 58,592,550 | |||||||
Accumulated depreciation | (28,551,534 | ) | (32,145,471 | ) | ||||
24,865,808 | 26,447,079 | |||||||
Land | 4,867,621 | 4,648,171 | ||||||
Construction in progress | 1,064,969 | 1,976,214 | ||||||
Ps. | 30,798,398 | Ps. | 33,071,464 | |||||
(1) | In 2009, includes technical and computer equipment in connection with the consolidation of TVI, which began on October 1, 2009 (see Note 2). |
2008 | 2009 | |||||||||||||||||||||||
Gross | Gross | |||||||||||||||||||||||
Carrying | Accumulated | Net Carrying | Carrying | Accumulated | Net Carrying | |||||||||||||||||||
Amount | Amortization | Amount | Amount | Amortization | Amount | |||||||||||||||||||
Intangible assets with indefinite lives: | ||||||||||||||||||||||||
Goodwill | Ps. | 6,288,658 | Ps. | 3,133,802 | ||||||||||||||||||||
Publishing and TVI trademarks | 785,468 | 1,264,555 | ||||||||||||||||||||||
Television network concession | 650,603 | 650,603 | ||||||||||||||||||||||
Cablemás concession | – | 1,052,190 | ||||||||||||||||||||||
TVI concession (see Note 2) | 262,925 | 262,925 | ||||||||||||||||||||||
Telecom concession (see Note 2) | 783,290 | 778,970 | ||||||||||||||||||||||
Sky concession | 96,042 | 96,042 | ||||||||||||||||||||||
Intangible assets with finite lives and deferred charges: | ||||||||||||||||||||||||
Licenses and software | Ps. | 1,456,410 | Ps. | (822,708 | ) | 633,702 | Ps. | 1,601,562 | Ps. | (755,706 | ) | 845,856 | ||||||||||||
Subscriber lists (see Note 2) | 1,206,278 | (687,103 | ) | 519,175 | 2,351,177 | (884,900 | ) | 1,466,277 | ||||||||||||||||
Other intangible assets | 622,680 | (97,752 | ) | 524,928 | 760,021 | (108,092 | ) | 651,929 | ||||||||||||||||
Deferred financing costs (see Note 8) | 1,213,559 | (324,567 | ) | 888,992 | 1,403,430 | (387,715 | ) | 1,015,715 | ||||||||||||||||
Ps. | 4,498,927 | Ps. | (1,932,130 | ) | Ps. | 11,433,783 | Ps. | 6,116,190 | Ps. | (2,136,413 | ) | Ps. | 11,218,864 | |||||||||||
F-19
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Foreign | ||||||||||||||||||||||||
Balance as of | Currency | Impairment | Balance as of | |||||||||||||||||||||
December 31, | Translation | Adjustments/ | Adjustments | December 31, | ||||||||||||||||||||
2008 | Acquisitions | Adjustments | Reclassifications | (see Note 17) | 2009 | |||||||||||||||||||
Goodwill: | ||||||||||||||||||||||||
Television Broadcasting | Ps. | 482,731 | Ps. | — | Ps. | — | Ps. | — | Ps. | (184,055 | ) | Ps. | 298,676 | |||||||||||
Cable and Telecom | 4,259,514 | — | — | (2,167,533 | ) | (752,438 | ) | 1,339,543 | ||||||||||||||||
Publishing Distribution | 693,554 | — | (1,517 | ) | (48,757 | ) | (26,113 | ) | 617,167 | |||||||||||||||
Other Businesses | 39,406 | 24,077 | — | — | — | 63,483 | ||||||||||||||||||
Equity-method investees (See Note 5) | 813,453 | — | — | 1,480 | — | 814,933 | ||||||||||||||||||
Ps. | 6,288,658 | Ps. | 24,077 | Ps. | (1,517 | ) | Ps. | (2,214,810 | ) | Ps. | (962,606 | ) | Ps. | 3,133,802 | ||||||||||
Trademarks (see Note 2): | ||||||||||||||||||||||||
Publishing | Ps. | 663,057 | Ps. | 48,232 | Ps. | (8,093 | ) | Ps. | — | Ps. | (197,488 | ) | Ps. | 505,708 | ||||||||||
Telecom | 33,059 | — | — | 636,436 | — | 669,495 | ||||||||||||||||||
TVI | 89,352 | — | — | — | — | 89,352 | ||||||||||||||||||
Ps. | 785,468 | Ps. | 48,232 | Ps. | (8,093 | ) | Ps. | 636,436 | Ps. | (197,488 | ) | Ps. | 1,264,555 | |||||||||||
2008 | 2009 | |||||||
U.S. Dollar debt: | ||||||||
8% Senior Notes due 2011 (1) | Ps. | 995,802 | Ps. | 941,119 | ||||
6% Senior Notes due 2018 (1) | 6,920,000 | 6,540,000 | ||||||
6.625% Senior Notes due 2025 (1) | 8,304,000 | 7,848,000 | ||||||
8.50% Senior Notes due 2032 (1) | 4,152,000 | 3,924,000 | ||||||
6.625% Senior Notes due 2040 (1) | — | 7,848,000 | ||||||
9.375% Senior Guaranteed Notes due 2015 (Cablemás) (2) | 2,417,848 | 2,285,076 | ||||||
Bank loan facility (Empresas Cablevisión) (3) | 3,114,000 | 2,943,000 | ||||||
Bank loan facility (Cablemás) (3) | 692,000 | 654,000 | ||||||
Other (4) | 1,142,826 | 33,015 | ||||||
Total U.S. Dollar debt | 27,738,476 | 33,016,210 | ||||||
Mexican Peso debt: | ||||||||
8.49% Senior Notes due 2037 (1) | 4,500,000 | 4,500,000 | ||||||
Bank loans (5) | 3,162,460 | 2,400,000 | ||||||
Bank loans (Sky) (6) | 3,500,000 | 3,500,000 | ||||||
Total Mexican Peso debt | 11,162,460 | 10,400,000 | ||||||
Total long-term debt | 38,900,936 | 43,416,210 | ||||||
Less: Current portion | 2,270,353 | 1,433,015 | ||||||
Long-term debt, net of current portion | Ps. | 36,630,583 | Ps. | 41,983,195 | ||||
Capital lease obligations: | ||||||||
Satellite transponder lease obligation (7) | Ps. | 1,311,663 | Ps. | 1,108,451 | ||||
Other (8) | 62,128 | 293,282 | ||||||
Total capital lease obligations | 1,373,791 | 1,401,733 | ||||||
Less: Current portion | 151,628 | 235,271 | ||||||
Capital lease obligations, net of current portion | Ps. | 1,222,163 | Ps. | 1,166,462 | ||||
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Table of Contents
(1) | These Senior Notes due 2011, 2018, 2025, 2032, 2037 and 2040, in the outstanding principal amount of U.S.$72 million, U.S.$500 million, U.S.$600 million, U.S.$300 million, Ps.4,500,000 and U.S.$600 million, respectively, 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 2011, 2018, 2025, 2032, 2037 and 2040, including additional amounts payable in respect of certain Mexican withholding taxes, is 8.41%, 6.31%, 6.97%, 8.94%, 8.93% and 6.97% per annum, respectively, and is payable semi-annually. These Senior Notes may not be redeemed prior to maturity, except (i) 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; and (ii) in the event of a change of control, in which case the Company may be required to redeem the securities at 101% of their principal amount. Also, the Company may, at its own option, redeem the Senior Notes due 2018, 2025, 2037 and 2040, in whole or in part, at any time at a redemption price equal to the greater of the principal amount of these Senior Notes or the present value of future cash flows, at the redemption date, of principal and interest amounts of the Senior Notes discounted at a fixed rate of comparable U.S. or Mexican sovereign bonds. The Senior Notes due 2011, 2018, 2032 and 2040 were priced at 98.793%, 99.280%, 99.431% and 98.319%, respectively, for a yield to maturity of 8.179%, 6.097%, 8.553% and 6.755%, respectively. The Senior Notes due 2025 were issued in two aggregate principal amounts of U.S.$400 million and U.S.$200 million, and were priced at 98.081% and 98.632%, respectively, for a yield to maturity of 6.802% and 6.787%, 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. The Senior Notes due 2011, 2018, 2025, 2032, 2037 and 2040 are registered with the U.S. Securities and Exchange Commission. | |
(2) | These U.S.$174.7 million Senior Guaranteed Notes are unsecured obligations of Cablemás and its restricted subsidiaries and are guaranteed by such restricted subsidiaries, rank equally in right of payment with all existing and future unsecured and unsubordinated indebtedness of Cablemás and its restricted subsidiaries, and are junior in right of payment to all of the existing and future secured indebtedness of Cablemás and its restricted subsidiaries to the extent of the value of the assets securing such indebtedness, interest on these Senior Notes, including additional amounts payable in respect of certain Mexican withholding taxes, is 9.858%, and is payable semi-annually. Cablemás may redeem these Senior Notes, in whole or in part, before November 15, 2010, at the principal amount plus a premium plus accrued and unpaid interest, and on or after November 15, 2010, at redemption prices plus accrued and unpaid interest. The agreement of these Senior Notes contains covenants relating to Cablemás and its restricted subsidiaries, including covenants with respect to limitations on indebtedness, payments, dividends, investments, sale of assets, and certain mergers and consolidations. In July 2008, Cablemás prepaid a portion of these Senior Notes in the principal amount of U.S.$0.3 million in connection with a tender offer to purchase these Senior Notes at a purchase price of 101% plus related accrued and unpaid interest. | |
(3) | In December 2007, Empresas Cablevisión and Cablemás entered into a 5-year term loan facilities with a U.S. bank in the aggregate principal amount of U.S.$225 million and U.S.$50 million, respectively, in connection with the financing for the acquisition of Letseb and Bestel USA (see Note 2). Annual interest on these loan facilities is payable on a quarterly basis at LIBOR plus an applicable margin that may range from 0.475% to 0.800% depending on a leverage ratio. At December 31, 2009, the applicable leverage ratio for Empresas Cablevisión and Cablemás was 0.525% and 0.600%, respectively. Under the terms of the loan facilities, Empresas Cablevisión and its subsidiaries and Cablemás and its subsidiaries are required to (a) maintain certain financial coverage ratios related to indebtedness and interest expense, and (b) comply with certain restrictive covenants, primarily on debt, liens, investments and acquisitions, capital expenditures, asset sales, consolidations, mergers and similar transactions. | |
(4) | Includes Ps.1,107,200 in 2008 in connection with a non-interest bearing promissory note in the principal amount of U.S.$80 million with a maturity in August 2009, which amount was originally recognized by the Group, and guaranteed by the Company, as a long-term liability in connection with the acquisition of Letseb and Bestel USA in December 2007 (see Note 2). In 2008, this liability was replaced under similar terms by a U.S.$80 million non-interest bearing promissory note payable to a foreign financial institution. In March 2009, the Company entered into a purchase agreement with the holder of the promissory note, and acquired such note in the amount of U.S.$78.6 million (Ps.1,206,210). This line item also includes for 2008 and 2009, outstanding balances of notes payable to banks with maturities in 2010, bearing annual interest rates of 1.25 points above LIBOR. | |
(5) | Includes for 2008 and 2009, outstanding balances of long-term loans in the principal amount of Ps.3,162,460 and Ps.2,400,000, respectively, in connection with certain credit agreement entered into by the Company with a Mexican bank, with maturities from 2010 through 2012. Interest on this loan is 10.350% per annum, and is payable on a monthly basis. 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. This line includes in 2009, outstanding balance of current-term loans with maturities in 2010, for TVI’s incorporation, bearing annual interest rates of 8.35% and the Mexican Interbank Interest Rate (“TIIE”) plus 1.50% and 2.20%, payable on a monthly basis. | |
(6) | The balance in 2008 and 2009 includes two long-term loans entered into by Sky with Mexican banks in the aggregate principal amount of Ps.3,500,000 with a maturity in 2016. This Sky long-term indebtedness is guaranteed by the Company and includes a Ps.2,100,000 loan with an annual interest rate of 8.74% and a Ps.1,400,000 loan with an annual interest rate of 8.98% through March and April 2009, respectively, and the TIIE plus 24 basis points for the remaining period through maturity. Interest on these two long-term loans is payable on a monthly basis. Under the terms of these loan agreements, Sky is required to maintain (a) certain financial coverage ratios related to indebtedness and interest expense; and (b) certain restrictive covenants on indebtedness, liens, asset sales, and certain mergers and consolidations. | |
(7) | Sky is obligated to pay a monthly fee of U.S.$1.7 million under a capital lease agreement entered into with Intelsat Corporation (formerly PanAmSat Corporation) in February 1999 for satellite signal reception and retransmission service from 12 KU-band transponders on satellite IS-9, which became operational in September 2000. The service term for IS-9 will end at the earlier of (a) the end of 15 years or (b) the date IS-9 is taken out of service. The obligations of Sky under the IS-9 agreement are proportionately guaranteed by the Company and the other Sky equity owners in relation to their respective ownership interests (see Notes 6 and 11). | |
(8) | Includes minimum lease payments of property and equipment under leases that qualify as capital leases. The capital leases have terms which expire at various dates through 2010 to 2022. |
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Table of Contents
2010 | Ps. | 1,433,015 | ||
2011 | 941,119 | |||
2012 | 4,597,000 | |||
2013 | — | |||
2014 | — | |||
Thereafter | 36,445,076 | |||
Ps. | 43,416,210 | |||
2010 | Ps. | 372,150 | ||
2011 | 340,298 | |||
2012 | 332,955 | |||
2013 | 299,663 | |||
2014 | 287,633 | |||
Thereafter | 233,010 | |||
1,865,709 | ||||
Less: amount representing interest | 463,976 | |||
Ps. | 1,401,733 | |||
F-22
Table of Contents
2008 | 2009 | |||||||||||||||
Carrying Value | Fair Value | Carrying Value | Fair Value | |||||||||||||
Assets: | ||||||||||||||||
Temporary investments | Ps. | 8,321,286 | Ps. | 8,321,286 | Ps. | 8,902,346 | Ps. | 8,902,346 | ||||||||
Held-to-maturity debt securities (see Note 5) | 809,115 | 755,997 | 1,169,611 | 1,196,146 | ||||||||||||
Available-for-sale investments (see Note 5) | — | — | 2,826,457 | 2,826,457 | ||||||||||||
Liabilities: | ||||||||||||||||
Senior Notes due 2011, 2018, 2025, 2032 and 2040 | Ps. | 20,371,802 | Ps. | 17,713,899 | Ps. | 27,101,119 | Ps. | 27,841,242 | ||||||||
Senior Notes due 2037 | 4,500,000 | 4,129,740 | 4,500,000 | 4,055,580 | ||||||||||||
Senior Guaranteed Notes due 2015 (Cablemás) | 2,417,848 | 2,070,282 | 2,285,076 | 2,494,549 | ||||||||||||
Long-term notes payable to Mexican banks | 6,662,460 | 6,846,264 | 5,900,000 | 6,135,443 | ||||||||||||
Bank loan facility (Empresas Cablevisión) | 3,114,000 | 2,658,286 | 2,943,000 | 2,601,257 | ||||||||||||
Bank loan facility (Cablemás) | 692,000 | 593,439 | 654,000 | 572,123 |
Notional Amounts | ||||||||
Derivative Financial Instruments | Carrying Values | (U.S. Dollars in Thousands) | Maturity Dates | |||||
Assets: | ||||||||
Derivatives not recorded as accounting hedges: | ||||||||
Sky’s interest rate swaps (f) | Ps. | 3,472 | Ps.1,400,000 | April 2016 | ||||
Cablemás forward and cross-currency swaps (a) | 1,464,295 | U.S.$175,000/ Ps.1,880,375 and U.S.$175,000/ Ps.1,914,850 | November 2015 | |||||
Cross-currency interest rate swaps (b) | 78,904 | U.S.$889,736/ Ps.9,897,573 | March 2009 and March 2010 | |||||
Credit default swaps (c) | 7,913 | U.S.$24,500 | October and December 2009 | |||||
Derivatives recorded as accounting hedges: | ||||||||
Cash flow hedges: | ||||||||
Empresas Cablevisión’s cross-currency swaps (d) | 668,945 | U.S.$225,000/ Ps.2,435,040 | December 2012 | |||||
Cablemás cross-currency swap (e) | 139,619 | U.S.$50,000/ Ps.541,275 | December 2012 | |||||
Total assets | Ps. | 2,363,148 | (1) | |||||
Liabilities: | ||||||||
Derivatives not recorded as accounting hedges: | ||||||||
Cablemás forward and swaption (a) | Ps. | 600,819 | U.S.$175,000/Ps.1,914,850 | November 2015 | ||||
Cross-currency interest rate swaps (b) | 3,831 | U.S.$690,000/ Ps.7,735,198 | March 2010 | |||||
Total liabilities | Ps. | 604,650 | ||||||
F-23
Table of Contents
Notional Amounts | ||||||||
Derivative Financial Instruments | Carrying Values | (U.S. Dollars in Thousands) | Maturity Dates | |||||
Assets: | ||||||||
Derivatives not recorded as accounting hedges: | ||||||||
Cablemás forward (h) | Ps. | 1,577 | U.S.$13,000/ Ps.170,908 | January, February and March 2010 | ||||
Cablemás forward and cross-currency swaps (a) | 1,001,055 | U.S.$175,000/ Ps.1,880,375 and U.S.$175,000/ Ps.1,914,850 | November 2015 | |||||
Cross-currency interest rate swaps (b) | 5,141 | U.S.$200,000/ Ps.2,165,550 | March 2010 | |||||
Derivatives recorded as accounting hedges: | ||||||||
Cash flow hedges: | ||||||||
Empresas Cablevisión’s cross-currency swaps (d) | 419,974 | U.S.$225,000/ Ps.2,435,040 | December 2012 | |||||
Cablemás cross-currency swap (e) | 91,804 | U.S.$50,000/ Ps.541,275 | December 2012 | |||||
Cross-currency interest rate swaps (b) | 25,845 | U.S.$1,650,000/ Ps.21,240,300 | March and May 2011 | |||||
Total assets | Ps. | 1,545,396 | (1) | |||||
Liabilities: | ||||||||
Derivatives not recorded as accounting hedges: | ||||||||
Cablemás forward and swaption (a) | Ps. | 486,228 | U.S.$175,000/Ps.1,914,850 | November 2015 | ||||
Sky’s interest rate swaps (f) | 26,410 | Ps.1,400,000 | April 2016 | |||||
Cablemás embedded derivatives (g) | 10,990 | U.S.$7,176 | December 2010 to February 2018 | |||||
Total liabilities | Ps. | 523,628 | ||||||
(1) | Includes short-term derivative financial instruments of Ps.46,588 and Ps.6,718 in 2008 and 2009, respectively, which were included in other accounts and notes receivables, net in the consolidated balance sheet. | |
(a) | In 2005, 2006 and 2007, Cablemás entered into forward, interest-only cross-currency swaps and swaption agreements, as amended, with a U.S. financial institution to hedge U.S.$175 million of its U.S. Dollar foreign exchange and interest rate exposure related to its Senior Guaranteed Notes due 2015. Under these transactions, (i) in 2015, Cablemás will receive and make payments in the aggregate notional amounts of U.S.$175 million and Ps.1,880,375, respectively; (ii) Cablemás makes semi-annual payments calculated based on a notional amount of U.S.$175 million at an annual rate of 2.88%; (iii) Cablemás receives semi-annual payments calculated based on the aggregate notional amount of U.S.$175 million at an annual rate of 9.375%, and Cablemás makes monthly payments calculated based on an aggregate notional amount of Ps.1,914,850 at an annual rate of 9.07% through December 2010 if the option of a related swaption agreement is exercised by the counterparty, and through 2015 if such option is not exercised; and (iv) if the counterparty exercises an option under a related swaption agreement, Cablemás would receive monthly payments based on the aggregate notional amount of Ps.1,914,850 at an annual rate of 7.57%, and Cablemás would make monthly payments calculated based on the same notional amount at an annual interest rate of a 28-day TIIE (Mexican Interbank Interest Rate). The Group recorded the change in fair value of these transactions in the integral cost of financing (foreign exchange gain or loss). In February 2010, Cablemás cancelled the forward and interest-only cross-currency swaps agreements and entered into a full cross currency swap and an interest rate swap agreements with a foreign financial institution to hedge U.S.$175 million of its U.S. Dollar foreign exchange and interest rate exposure related to its Senior Guaranteed Notes due 2015. Under these transactions, (i) in 2015, Cablemás will receive and make payments in the aggregate notional amounts of U.S.$175 million and Ps.1,880,375, respectively; (ii) Cablemás makes monthly payments calculated based on an aggregate notional amount of Ps.1,880,375 at an annual rate of TIIE plus 182.3 basis points, and Cablemás receives semi-annual payments calculated based on an aggregate notional amount of $175 million at an annual rate of 6.445%; (iii) Cablemás receives monthly payments calculated based on the aggregate notional amount of Ps.1,880,375 at an annual rate of TIIE plus 182.3 basis points, and Cablemás makes monthly payments calculated based on an aggregate notional amount of Ps.1,914,850 at an annual rate of 9.172% through December 2010 if the option of a related swaption agreement is exercised by the counterparty, and through 2015 if such option is not exercised; and (iv) if the counterparty exercises an option under a related swaption agreement, Cablemás would receive monthly payments based on the aggregate notional amount of Ps.1,914,850 at an annual rate of 7.57%, and Cablemás would make monthly payments calculated based on the same notional amount at an annual interest rate of a 28-day TIIE. | |
(b) | In order to reduce the adverse effects of exchange rates on the Senior Notes due 2011, 2018, 2025, 2032 and 2040, during 2004, 2005 and 2009, 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 to be made in 2009, 2010 and 2011. Under these transactions, the Company receives semi-annual payments based on the aggregate notional amount U.S.$889.7 million and U.S.$1,850 million as of December 31, 2008 and 2009, respectively, at an average annual rate of 7.37% and 6.76%, respectively, and the Company makes semi-annual payments based on an aggregate notional amount of Ps.9,897,573 and Ps.23,405,850 as of December 31, 2008 and 2009, respectively, at an average annual rate of 8.28% and 7.03%, respectively, without an exchange of the notional amount upon which the payments are based. As a result of the change in fair value of these transactions, in the years ended December 31, 2007, 2008 and 2009, the Company recorded a gain (loss) of Ps.1,440, Ps.96,878 and Ps.(25,280), respectively, relating to the interest rate swaps not recorded as accounting hedges, in the integral cost of financing (foreign exchange gain or loss), and in the year ended December 31, 2009, the Company recorded a gain of Ps.25,845 relating to the interest rate swaps recorded as accounting hedges, in consolidated stockholders’ equity as accumulated other comprehensive income or loss attributable to the controlling interest. In November 2005, the Group entered into option contracts that allow the counterparty to extend the maturity of the swap agreements for one additional year on the notional amount of U.S.$890 million. In January 2008, the Group terminated part of these option contracts early for a notional amount of U.S.$200 million, with no significant additional gain or loss. In March 2009, the Group terminated the remaining option contracts early for a notional amount of U.S.$690 million, with no significant additional gain or loss. | |
(c) | The Group entered into credit default swap agreements to hedge the unfavorable effect of credit risk associated with certain long-term investments with a maturity in October 2011 and January 2012 for a notional amount of U.S.$20 million and U.S.$4.5 million, respectively. These agreements expired during the fourth quarter of 2009. | |
(d) | In December 2007, in connection with the issuance of its U.S.$225 million long-term debt, Empresas Cablevisión entered into a cross-currency swap agreement to hedge interest rate risk and foreign currency exchange risk on such long-term debt. Under this agreement, Empresas Cablevisión receives variable rate coupon payments in U.S. dollars at an annual interest rate of LIBOR to 90 days plus 42.5 basis points, and principal amount payments in U.S. dollars, in exchange for fixed rate coupon payments in Mexican Pesos at an annual interest rate of 8.3650%, and principal amount payments in Mexican Pesos. At the final exchange, Empresas Cablevisión will receive a principal amount of U.S.$225 million, in exchange for Ps.2,435,040. At December 31, 2008 and 2009, this derivative contract qualified as a cash flow hedge, and therefore, the Group has recorded the change in fair value as a gain of Ps.649,548 and Ps.400,577, respectively, together with an unrealized foreign exchange loss of Ps.656,505 and Ps.485,505, respectively, related to the long-term debt, in consolidated stockholders’ equity as accumulated other comprehensive income or loss. |
F-24
Table of Contents
(e) | In December 2007, in connection with the issuance of its U.S.$50 million long-term debt, Cablemás entered into a cross-currency swap agreement to hedge interest rate risk and foreign currency exchange risk on such long-term debt. Under this agreement, Cablemás receives variable rate coupon payments in U.S. dollars at an annual interest rate of LIBOR to 90 days plus 52.5 basis points, and principal amount payments in U.S. dollars, in exchange for fixed rate coupon payments in Mexican Pesos at an annual interest rate of 8.51%, and principal amount payments in Mexican Pesos. At the final exchange, Cablemás will receive a principal amount of U.S.$50 million, in exchange for Ps.541,275. At December 31, 2008 and 2009, this derivative contract qualified as a cash flow hedge, and therefore, the Group has recorded the change in fair value as a gain of Ps.169,893 and Ps.122,421, respectively, together with an unrealized foreign exchange loss of Ps.173,360 and Ps.138,670, respectively, related to the long-term debt, in consolidated stockholders’ equity as accumulated other comprehensive income or loss. | |
(f) | In February 2004, Sky entered into coupon swap agreements to hedge U.S.$.300 million of its U.S. dollar foreign exchange exposure related to its Senior Notes due 2013. Under these transactions, Sky received semi-annual payments calculated based on the aggregate notional amount of U.S.$11.3 million at an annual rate of 9.375%, and Sky made monthly payments calculated based on an aggregate notional amount of Ps.123,047 at an annual rate of 10.25%. These transactions were terminated in September 2008. Sky recorded the change in fair value of these transactions in the integral cost of financing (foreign exchange loss). In December 2006, Sky entered into a derivative transaction agreement from April 2009 through April 2016 to hedge the variable interest rate exposure resulting from a Mexican Peso loan of a total principal amount of Ps.1,400,000. Under this transaction, Sky receives 28-day payments based on an aggregate notional amount of Ps.1,400,000 at an annual variable rate of TIIE+24 basis points and makes 28-day payments based on the same notional amount at an annual fixed rate of 8.415%. The Group recorded the change in fair value of this transaction in the consolidated integral cost of financing (interest expense). | |
(g) | Certain Cablemás office lease agreements include embedded derivatives identified as forwards for obligations denominated in U.S. Dollars. The Group recognizes changes in related fair value as foreign exchange gain or loss in the integral cost of financing. | |
(h) | As of December 31, 2009, Cablemás had foreign currency contracts with an aggregate notional amount of U.S.$13 million to exchange U.S. Dollars for Mexican Pesos at an average rate of Ps.13.15 per U.S. Dollar in connection with 2010 cash flow requirements. |
2008 | Seniority | Severance | 2009 | |||||||||||||||||
Total | Pensions | Premiums | Indemnities | Total | ||||||||||||||||
Vested benefit obligations | Ps. | 97,551 | Ps. | 114,771 | Ps. | 276 | Ps. | — | Ps. | 115,047 | ||||||||||
Unvested benefit obligations | 1,744,917 | 1,045,597 | 266,834 | 557,251 | 1,869,682 | |||||||||||||||
Defined benefit obligations | 1,842,468 | 1,160,368 | 267,110 | 557,251 | 1,984,729 | |||||||||||||||
Fair value of plan assets | 1,404,589 | 1,249,707 | 499,922 | — | 1,749,629 | |||||||||||||||
Status of the plans | (437,879 | ) | 89,339 | 232,812 | (557,251 | ) | (235,100 | ) | ||||||||||||
Unrecognized prior service cost for transition liability | 156,120 | 71,150 | 36,686 | 5,762 | 113,598 | |||||||||||||||
Unrecognized prior service cost for plan amendments | 49,072 | 124,849 | (63,459 | ) | 655 | 62,045 | ||||||||||||||
Net actuarial (gain) loss | (119,703 | ) | (304,281 | ) | 8,517 | 8,231 | (287,533 | ) | ||||||||||||
Net projected (liability) asset in the consolidated balance sheet | Ps. | (352,390 | ) | Ps. | (18,943 | ) | Ps. | 214,556 | Ps. | (542,603 | ) | Ps. | (346,990 | ) | ||||||
F-25
Table of Contents
2007 | 2008 | 2009 | ||||||||||
Service cost | Ps. | 97,878 | Ps. | 115,598 | Ps. | 125,269 | ||||||
Interest cost | 55,804 | 124,719 | 139,505 | |||||||||
Prior service cost | — | 3,947 | 1,583 | |||||||||
Expected return on plan assets | (168,141 | ) | (321,805 | ) | (192,372 | ) | ||||||
Net amortization and deferral | (9,280 | ) | 83,008 | (15,789 | ) | |||||||
Net (income) cost | Ps. | (23,739 | ) | Ps. | 5,467 | Ps. | 58,196 | |||||
2008 | Seniority | Severance | 2009 | |||||||||||||||||
Total | Pensions | Premiums | Indemnities | Total | ||||||||||||||||
Defined benefit obligations | ||||||||||||||||||||
Beginning of year | Ps. | 1,547,809 | Ps. | 1,098,111 | Ps. | 274,043 | Ps. | 470,314 | Ps. | 1,842,468 | ||||||||||
Service cost | 115,598 | 61,937 | 25,480 | 37,852 | 125,269 | |||||||||||||||
Interest cost | 124,719 | 86,368 | 20,839 | 32,298 | 139,505 | |||||||||||||||
Actuarial (gain) loss | (153,921 | ) | (65,711 | ) | (39,380 | ) | 14,235 | (90,856 | ) | |||||||||||
Transition liability | 142,581 | — | — | — | — | |||||||||||||||
Benefit paid | (43,550 | ) | (20,337 | ) | (16,805 | ) | (13,136 | ) | (50,278 | ) | ||||||||||
Acquisition of companies | 109,232 | — | 2,933 | 15,688 | 18,621 | |||||||||||||||
End of year | 1,842,468 | 1,160,368 | 267,110 | 557,251 | 1,984,729 | |||||||||||||||
Fair value of plan assets | ||||||||||||||||||||
Beginning of year | 1,628,730 | 1,024,239 | 380,350 | — | 1,404,589 | |||||||||||||||
Actuarial return on plan assets | 321,805 | 136,104 | 56,268 | — | 192,372 | |||||||||||||||
Actuarial (gain) loss | (516,813 | ) | 109,577 | 69,579 | — | 179,156 | ||||||||||||||
Contributions | 8,346 | — | 7,499 | — | 7,499 | |||||||||||||||
Benefits paid | (37,479 | ) | (20,213 | ) | (13,774 | ) | — | (33,987 | ) | |||||||||||
End of year | 1,404,589 | 1,249,707 | 499,922 | — | 1,749,629 | |||||||||||||||
(Over) under funded status of the plans | Ps. | (437,879 | ) | Ps. | 89,339 | Ps. | 232,812 | Ps. | (557,251 | ) | Ps. | (235,100 | ) | |||||||
2008 | 2009 | |||||||
Equity Securities (1) | 62.6 | % | 46.0 | % | ||||
Fixed rate instruments | 37.4 | % | 54.0 | % | ||||
Total | 100.0 | % | 100.0 | % | ||||
(1) | Included within plan assets at December 31, 2008 and 2009 are shares of the Group held by the trust with a fair value of Ps.879,029 and Ps.779,920, respectively. |
2008 | Seniority | Severance | 2009 | |||||||||||||||||
Total | Pensions | Premiums | Indemnities | Total | ||||||||||||||||
Beginning net projected liability (asset) | Ps. | 314,921 | Ps. | (18,751 | ) | Ps. | (92,098 | ) | Ps. | 463,239 | Ps. | 352,390 | ||||||||
Net periodic cost (income) | 5,467 | 37,817 | (114,512 | ) | 134,891 | 58,196 | ||||||||||||||
Net actuarial gain | (41,215 | ) | — | — | (49,765 | ) | (49,765 | ) | ||||||||||||
Contributions | (8,346 | ) | — | (7,499 | ) | — | (7,499 | ) | ||||||||||||
Benefits paid | (6,071 | ) | (123 | ) | (3,033 | ) | (13,136 | ) | (16,292 | ) | ||||||||||
Acquisition of companies | 87,634 | — | 2,586 | 7,374 | 9,960 | |||||||||||||||
End net projected liability (asset) | Ps. | 352,390 | Ps. | 18,943 | Ps. | (214,556 | ) | Ps. | 542,603 | Ps. | 346,990 | |||||||||
F-26
Table of Contents
2005 | 2006 | 2007 | 2008 | 2009 | ||||||||||||||||
Pensions | ||||||||||||||||||||
Defined benefit obligations | Ps. | 769,913 | Ps. | 834,123 | Ps. | 872,167 | Ps. | 1,098,111 | Ps. | 1,160,368 | ||||||||||
Plan assets | 1,053,033 | 1,254,603 | 1,153,205 | 1,024,239 | 1,249,707 | |||||||||||||||
Status of the plans | 283,120 | 420,480 | 281,038 | (73,872 | ) | 89,339 | ||||||||||||||
Actuarial adjustments (1) | (510,763 | ) | (644,624 | ) | (435,665 | ) | (134,388 | ) | (304,281 | ) | ||||||||||
Seniority Premiums | ||||||||||||||||||||
Defined benefit obligations | Ps. | 271,299 | Ps. | 270,088 | Ps. | 261,941 | Ps. | 274,043 | Ps. | 267,110 | ||||||||||
Plan assets | 486,482 | 548,355 | 475,525 | 380,350 | 499,922 | |||||||||||||||
Status of the plans | 215,183 | 278,267 | 213,584 | 106,307 | 232,812 | |||||||||||||||
Actuarial adjustments (1) | (9,027 | ) | (92,444 | ) | (7,569 | ) | 9,533 | 8,517 | ||||||||||||
Severance Indemnities | ||||||||||||||||||||
Defined benefit obligations | Ps. | 314,215 | Ps. | 370,379 | Ps. | 413,701 | Ps. | 470,314 | Ps. | 557,251 | ||||||||||
Plan assets | — | — | — | — | — | |||||||||||||||
Status of the plans | (314,215 | ) | (370,379 | ) | (413,701 | ) | (470,314 | ) | (557,251 | ) | ||||||||||
Actuarial adjustments (1) | — | 14,129 | (25,682 | ) | 5,152 | 8,231 |
(1) | On defined benefit obligations and plan assets. |
Thousands of | ||||
U.S. Dollars | ||||
2010 | U.S.$ | 11,026 | ||
2011 | 9,456 | |||
2012 | 6,467 | |||
2013 | 2,760 | |||
2014 and thereafter | 6,226 | |||
U.S.$ | 35,935 | |||
2010 | Ps. | 208,758 | ||
2011 | 154,519 | |||
2012 | 145,153 | |||
2013 | 44,203 | |||
2014 | 10,187 | |||
Thereafter | 154,502 | |||
Ps. | 717,322 | |||
F-27
Table of Contents
F-28
Table of Contents
Authorized | Repurchased | Held by a | Held by a | |||||||||||||||||
and | by the | Company’s | Company’s | |||||||||||||||||
Issued (1) | Company (2) | Trust (3) | Subsidiary (3) | Outstanding | ||||||||||||||||
Series “A” Shares | 119,879.1 | (331.9 | ) | (6,843.8 | ) | (1,173.4 | ) | 111,530.0 | ||||||||||||
Series “B” Shares | 55,995.3 | (292.1 | ) | (3,524.2 | ) | (598.4 | ) | 51,580.6 | ||||||||||||
Series “D” Shares | 85,333.7 | (464.7 | ) | (1,889.8 | ) | (919.2 | ) | 82,060.0 | ||||||||||||
Series “L” Shares | 85,333.7 | (464.7 | ) | (1,889.8 | ) | (919.2 | ) | 82,060.0 | ||||||||||||
Total shares | 346,541.8 | (1,553.4 | ) | (14,147.6 | ) | (3,610.2 | ) | 327,230.6 | ||||||||||||
Shares in the form of CPOs | 285,257.5 | (1,553.4 | ) | (6,317.4 | ) | (3,072.6 | ) | 274,314.1 | ||||||||||||
CPOs | 2,438.1 | (13.3 | ) | (53.9 | ) | (26.3 | ) | 2,344.6 | ||||||||||||
(1) | As of December 31, 2009, the authorized and issued capital stock amounted to Ps.10,019,859 (nominal Ps.2,368,792). | |
(2) | In 2007, 2008 and 2009, the Company repurchased 7,861.2 million, 2,698.2 million and 1,553.4 million shares, respectively, in the form of 67.2 million, 23.1 million and 13.3 million CPOs, respectively, in the amount of Ps.4,049,902 Ps.1,112,568 and Ps.705,068, respectively, in connection with a share repurchase program that was approved by the Company’s stockholders and is exercised at the discretion of management. In April 2007, 2008 and 2009, the Company’s stockholders approved the cancellation of 8,275.8 million, 7,146.1 million and 1,421.2 million shares of capital stock, respectively, in the form of 70.7 million, 61.1 million and 12.1 million CPOs, respectively, which were repurchased by the Company under this program. | |
(3) | In connection with the Company’s Long-Term Retention Plan described below. |
F-29
Table of Contents
Stock Purchase Plan | Long Term Retention Plan | |||||||||||
Arrangements: | ||||||||||||
Year of grant | 2003 | 2004 | 2004 | 2007 | 2008 | 2009 | ||||||
Number of CPOs or CPOs equivalent granted | 2,360 | 32,918 | 46,784 | 5,971 | 24,760 | 24,857 | ||||||
Contractual life | 3-5 years | 1-3 years | 4-6 years | 3-5 years | 3 years | 3 years | ||||||
Assumptions: | ||||||||||||
Dividend yield | 3.00% | 3.00% | 3.00% | 3.00% | 3.00% | 3.00% | ||||||
Expected volatility (1) | 31.88% | 21.81% | 22.12% | 21.98% | 33.00% | 31.00% | ||||||
Risk-free interest rate | 9.35% | 6.52% | 8.99% | 7.54% | 8.87% | 5.00% | ||||||
Expected life of awards (in years) | 4.01 years | 2.62 years | 4.68 years | 3.68 years | 2.84 years | 2.89 years |
(1) | Volatility was determined by reference to historically observed prices of the Group’s CPOs. |
2008 | 2009 | |||||||||||||||
CPOs or | Weighted- | CPOs or | Weighted- | |||||||||||||
CPOs | Average | CPOs | Average | |||||||||||||
equivalent | Exercise Price | equivalent | Exercise Price | |||||||||||||
Stock Purchase Plan: | ||||||||||||||||
Outstanding at beginning of year | 13,316 | 14.13 | 10,211 | 13.96 | ||||||||||||
Granted | 134 | 15.20 | — | — | ||||||||||||
Exercised | (3,112 | ) | 13.67 | (7,932 | ) | 13.16 | ||||||||||
Forfeited | (127 | ) | 10.58 | — | — | |||||||||||
Outstanding at end of year | 10,211 | 13.96 | 2,279 | 11.82 | ||||||||||||
Exercisable at end of year | 10,169 | 13.99 | 2,279 | 11.82 | ||||||||||||
Long-Term Retention Plan: | ||||||||||||||||
Outstanding at beginning of year | 47,654 | 13.47 | 64,443 | 25.04 | ||||||||||||
Granted | 24,760 | 43.55 | 24,857 | 34.88 | ||||||||||||
Exercised | (7,041 | ) | 10.05 | (8,735 | ) | 8.56 | ||||||||||
Forfeited | (930 | ) | 9.55 | (726 | ) | 30.02 | ||||||||||
Outstanding at end of year | 64,443 | 25.04 | 79,839 | 29.75 | ||||||||||||
Exercisable at end of year | 9,927 | 9.55 | 12,897 | 6.45 | ||||||||||||
F-30
Table of Contents
2007 | 2008 | 2009 | ||||||||||
Net income | Ps. | 8,082,463 | Ps. | 7,803,652 | Ps. | 6,007,143 | ||||||
Other comprehensive income (loss), net: | ||||||||||||
Foreign currency translation adjustments, net (1) | 204,174 | 352,726 | (154,482 | ) | ||||||||
Result from holding non-monetary assets, net (2) | 23,491 | — | — | |||||||||
Reclassification adjustment for loss included in net income (3) | 565,862 | — | — | |||||||||
Unrealized gain on available-for-sale investments, net of income tax | — | — | 339,881 | |||||||||
Gain (loss) on equity accounts of investees, net (4) | 5,382 | (58,109 | ) | 39,525 | ||||||||
Result from hedge derivative contracts, net of income taxes | — | 1,955 | (7,142 | ) | ||||||||
Total other comprehensive income, net | 798,909 | 296,572 | 217,782 | |||||||||
Comprehensive income | Ps. | 8,881,372 | Ps. | 8,100,224 | Ps. | 6,224,925 | ||||||
(1) | The amounts for 2008 and 2009 are presented net of income tax provision (benefit) of Ps.148,010 and Ps.(70,914), respectively. | |
(2) | Represented 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 income tax of Ps.7,523, (see Note 1(a)). |
(3) | Related to the disposition of the Group’s available-for-sale investment in Univision (see Note 17). | |
(4) | Represents gains or losses in other stockholders’ equity accounts of equity investees, as well as other comprehensive income recognized by equity investees. |
F-31
Table of Contents
Gain | Cumulative | Cumulative | Cumulative | Cumulative | ||||||||||||||||||||||||||||
(Loss) on | Result | Result from | Result from | Result from | Effect of | Accumulated | ||||||||||||||||||||||||||
Equity | from Hedge | Accumulated | Available- | Holding | Foreign | Deferred | Other | |||||||||||||||||||||||||
Accounts of | Derivative | Monetary | For-Sale | Non-Monetary | Currency | Income | Comprehensive | |||||||||||||||||||||||||
Investees | Contracts | Result | Investments | Assets | Translation | Taxes | (Loss) Income | |||||||||||||||||||||||||
Balance at January 1, 2007 | Ps. | 4,230,668 | Ps. | — | Ps. | (35,186 | ) | Ps. | (565,862 | ) | Ps. | (2,660,807 | ) | Ps. | (1,552,753 | ) | Ps. | (3,224,437 | ) | Ps. | (3,808,377 | ) | ||||||||||
Current year change | 5,382 | — | — | 565,862 | 23,491 | 204,174 | — | 798,909 | ||||||||||||||||||||||||
Balance at December 31, 2007 | 4,236,050 | — | (35,186 | ) | — | (2,637,316 | ) | (1,348,579 | ) | (3,224,437 | ) | (3,009,468 | ) | |||||||||||||||||||
Reclassifications to retained earnings | — | — | 35,186 | — | 2,637,316 | — | 3,224,437 | 5,896,939 | ||||||||||||||||||||||||
Current year change | (58,109 | ) | 1,955 | — | — | 352,726 | — | 296,572 | ||||||||||||||||||||||||
Balance at December 31, 2008 | 4,177,941 | 1,955 | — | — | — | (995,853 | ) | — | 3,184,043 | |||||||||||||||||||||||
Current year change | 39,525 | (7,142 | ) | — | 339,881 | — | (154,482 | ) | — | 217,782 | ||||||||||||||||||||||
Balance at December 31, 2009 | Ps. | 4,217,466 | Ps. | (5,187 | ) | Ps. | — | Ps. | 339,881 | Ps. | — | Ps. | (1,150,335 | ) | Ps. | — | Ps. | 3,401,825 | ||||||||||||||
2008 | 2009 | |||||||
Capital stock (1) (2) | Ps. | 2,294,678 | Ps. | 2,158,701 | ||||
Additional paid-in capital (1) | 1,082,001 | 2,740,712 | ||||||
Legal reserve | 99,622 | 140,259 | ||||||
Retained earnings from prior years (2) | 865,486 | 675,751 | ||||||
Net income for the year | 927,005 | 575,554 | ||||||
Other comprehensive income: | ||||||||
Cumulative result from hedge derivative contracts, net of income taxes | 1,295 | (23,546 | ) | |||||
Cumulative result from foreign currency translation | 12,260 | 4,926 | ||||||
Other | (49,513 | ) | 29,995 | |||||
Ps. | 5,232,834 | Ps. | 6,302,352 | |||||
(1) | In June 2009, the stockholders of Empresas Cablevisión made a capital contribution in cash to increase the capital stock of this Company’s subsidiary in the aggregate amount of Ps.3,699,652, of which Ps.1,811,800 was contributed by the noncontrolling interest. | |
(2) | Effective October 1, 2009, the Group began to consolidate the assets and liabilities of TVI (see Note 2). |
F-32
Table of Contents
2007 | 2008 | 2009 | ||||||||||
Revenues: | ||||||||||||
Programming production and transmission rights (a) | Ps. | 98,836 | Ps. | 69,911 | Ps. | 14,482 | ||||||
Administrative services (b) | 65,586 | 80,297 | 39,425 | |||||||||
Advertising (c) | 80,122 | 60,647 | 54,026 | |||||||||
Ps. | 244,544 | Ps. | 210,855 | Ps. | 107,933 | |||||||
Costs: | ||||||||||||
Donations | Ps. | 98,029 | Ps. | 72,617 | Ps. | 107,842 | ||||||
Administrative services (b) | 30,101 | 16,577 | 27,750 | |||||||||
Technical services (d) | 74,015 | 93,321 | 103,909 | |||||||||
Other | 189,699 | 13,478 | 47,897 | |||||||||
Ps. | 391,844 | Ps. | 195,993 | Ps. | 287,398 | |||||||
(a) | Services rendered to Endemol in 2007 and other affiliates in 2007, 2008 and 2009. | |
(b) | 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. | |
(c) | Advertising services rendered to OCEN and Volaris in 2007, 2008 and 2009. | |
(d) | In 2007, 2008 and 2009, Sky received services from a subsidiary of DirecTV Latin America for play-out, uplink and downlink of signals. |
(1) | A consulting firm owned by a relative of one of the Group’s directors, which has provided consulting services and research in connection with the effects of the Group’s programming on its viewing audience. Total fees for such services during 2007, 2008 and 2009 amounted to Ps.20,816, Ps.20,811 and Ps.21,215, respectively. |
(2) | 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. Some members of the Group’s Board serve as board members of this bank. |
(3) | Two of the Group’s directors and one of the Group’s alternate directors are members of the board as well as stockholders 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. |
(4) | Several other members of the Company’s current board serve as members of the boards and/or are stockholders of other companies, some of which purchased advertising services from the Group in connection with the promotion of their respective products and services, paying rates applicable to third-party advertisers for these advertising services. |
(5) | During 2007, 2008 and 2009, a professional services firm in which a current director of the Company maintains an interest provided legal advisory services to the Group in connection with various corporate matters. Total fees for such services amounted to Ps.21,831, Ps.15,550 and Ps.13,459, respectively. |
(6) | A television production company, indirectly controlled by a company where a member of the board and executive of the Company is a stockholder, provided production services to the Group in 2007 and 2008, in the amount of Ps.153,364 and Ps.973, respectively. |
(7) | During 2007, 2008 and 2009 the Group paid sale commissions to a company where a member of the board and executive of the Company is a stockholder, in the amount of Ps.49,614, Ps.8,731 and Ps.723, respectively. |
(8) | During 2007, 2008 and 2009, a company in which a current director and executive of the Company is a stockholder, purchased unsold advertising from the Group for a total of Ps.189,852, Ps.234,296 and Ps.233,707, respectively. |
(9) | During 2009, a professional services firm in which two current directors of the Company maintain an interest provided finance advisory services to the Group in connection with various corporate matters. Total fees for such services amounted to Ps.13,854. |
F-33
Table of Contents
2007 | 2008 | 2009 | ||||||||||
Loss (gain) on disposition of investments, net (see Note 2) (1) | Ps. | 669,473 | Ps. | 12,931 | Ps. | (90,565 | ) | |||||
Donations (see Note 16) | 150,224 | 78,856 | 133,325 | |||||||||
Financial advisory and professional services (2) | 191,495 | 21,532 | 188,825 | |||||||||
Employees’ profit sharing (3) | 20,821 | 27,345 | 37,033 | |||||||||
Loss on disposition of fixed assets | 37,989 | 45,394 | 233,540 | |||||||||
Impairment adjustments (4) | 493,693 | 609,595 | 1,160,094 | |||||||||
Termination fee income for the cancellation of a call option (see Note 5) | (462,083 | ) | — | — | ||||||||
Other (income) expense, net (5) | (148,260 | ) | 156,486 | 102,594 | ||||||||
Ps. | 953,352 | Ps. | 952,139 | Ps. | 1,764,846 | |||||||
(1) | In 2007, includes Ps.565,862 related to a reclassification of comprehensive loss recognized in other expense in connection with the disposition of the Group’s available for sale investment in Univision (see Note 14). | |
(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, net in 2008 of Ps.284,472 related to certain payments from Univision that had previously been recorded by the Group as customer deposits and advances (Ps.236,032) as well as a settlement amount of U.S.$3.5 million (Ps.48,440) paid by Univision to the Company (see Notes 2, 11 and 16). | |
(3) | The Mexican companies in the Group are required by law to pay employees, in addition to their agreed compensation and benefits, employees’ profit sharing at the statutory rate of 10% based on their respective taxable incomes (calculated without reference to inflation adjustments and tax loss carryforwards). | |
(4) | During 2007, 2008 and 2009, the Group tested for impairment the carrying value of certain trademarks of its Publishing segment, as well as goodwill of certain businesses of its Television Broadcasting and Cable and Telecom segments. As a result of such testing, impairment adjustments were made to goodwill in 2007, and trademarks and goodwill in 2008 and 2009. (see Note 7). | |
(5) | In 2007, includes primarily a cancellation of a provision for certain contingencies in connection with the acquisition of exclusivity rights of certain soccer players from foreign entities (see Note 11). |
2007 | 2008 | 2009 | ||||||||||
Interest expense (1) | Ps. | 2,176,998 | Ps. | 2,816,369 | Ps. | 3,136,411 | ||||||
Interest income | (1,844,653 | ) | (1,299,789 | ) | (1,053,411 | ) | ||||||
Foreign exchange (gain) loss, net (2) | (215,897 | ) | (685,698 | ) | 890,254 | |||||||
Loss from monetary position (3) | 293,766 | — | — | |||||||||
Ps. | 410,214 | Ps. | 830,882 | Ps. | 2,973,254 | |||||||
(1) | Interest expense in 2007, includes Ps.13,034, derived from the UDI index restatement of Company’s UDI-denominated debt securities, and a net loss from related derivative contracts of Ps.1,741 and Ps.123,242, in 2008 and 2009, respectively (see Notes 8 and 9). | |
(2) | Includes in 2007, 2008 and 2009, a net (gain) loss from foreign currency derivative contracts of Ps.(39,087), Ps.(889,562) and Ps.529,621, respectively. A foreign exchange loss in 2007 of Ps.211,520, related to the hedge for the Group’s net investment in Univision, was recognized in 2007 in consolidated income as other expense, net (see Notes 1(c) and 14). | |
(3) | The gain or loss from monetary position represented 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 2007 of Ps.135,548, arising from temporary differences of non-monetary items in calculating deferred income tax (see Notes 1(a) and 19). |
F-34
Table of Contents
2007 | 2008 | 2009 | ||||||||||
Income taxes, current | Ps. | 3,707,763 | Ps. | 3,146,339 | Ps. | 4,040,332 | ||||||
Income taxes, deferred | (358,122 | ) | 417,856 | (919,588 | ) | |||||||
Ps. | 3,349,641 | Ps. | 3,564,195 | Ps. | 3,120,744 | |||||||
% | % | % | ||||||||||
2007 | 2008 | 2009 | ||||||||||
Statutory income tax rate | 28 | 28 | 28 | |||||||||
Differences in inflation adjustments for tax and book purposes | 2 | 1 | — | |||||||||
Unconsolidated income tax | 1 | 1 | 1 | |||||||||
Noncontrolling interest | (4 | ) | — | 1 | ||||||||
Changes in valuation allowances: | ||||||||||||
Asset tax | 3 | (3 | ) | — | ||||||||
Tax loss carryforwards | — | — | 1 | |||||||||
Goodwill | — | — | 2 | |||||||||
Foreign operations | (5 | ) | 4 | (1 | ) | |||||||
Equity in losses of affiliates, net | 2 | 2 | 2 | |||||||||
Tax losses of subsidiaries, net | — | — | (4 | ) | ||||||||
Flat rate business tax | — | (4 | ) | 2 | ||||||||
Effective income tax rate | 27 | 29 | 32 | |||||||||
F-35
Table of Contents
Amount | Expiration | |||||||
Operating tax loss carryforwards: | ||||||||
Unconsolidated: | ||||||||
Mexican subsidiaries (1) | Ps. | 2,990,507 | From 2010 to 2019 | |||||
Non-Mexican subsidiaries (2) | 3,184,368 | From 2010 to 2029 | ||||||
Ps. | 6,174,875 | |||||||
(1) | During 2007, 2008 and 2009, certain Mexican subsidiaries utilized unconsolidated operating tax loss carryforwards of Ps.3,438,922, Ps.699,845 and Ps.1,254,029, respectively. In 2007, 2008 and 2009, the carryforwards amounts include the operating tax loss carryforwards related to the noncontrolling interest of Sky. | |
(2) | Approximately for the equivalent of U.S.$243.5 million related to losses from subsidiaries in Europe, South America and the United States. |
2008 | 2009 | |||||||
Assets: | ||||||||
Accrued liabilities | Ps. | 775,913 | Ps. | 884,255 | ||||
Goodwill | 1,062,680 | 1,396,040 | ||||||
Tax loss carryforwards | 805,779 | 897,152 | ||||||
Allowance for doubtful accounts | 339,977 | 428,605 | ||||||
Customer advances | 802,919 | 839,012 | ||||||
Other items | 269,670 | 447,936 | ||||||
Liabilities: | ||||||||
Inventories | (259,418 | ) | (379,286 | ) | ||||
Property, plant and equipment, net | (1,520,432 | ) | (1,365,307 | ) | ||||
Prepaid expenses | (1,539,708 | ) | (1,619,263 | ) | ||||
Tax losses of subsidiaries, net (a) | (465,294 | ) | (161,686 | ) | ||||
Deferred income taxes of Mexican companies | 272,086 | 1,367,458 | ||||||
Deferred income taxes of foreign subsidiaries | (81,575 | ) | 160,462 | |||||
Asset tax | 891,094 | 925,496 | ||||||
Flat rate business tax | 40,095 | 23,097 | ||||||
Valuation allowances (b) | (3,386,861 | ) | (3,826,622 | ) | ||||
Dividends distributed among Group’s entities (a) (c) | — | (548,503 | ) | |||||
Deferred income tax liability, net | Ps. | (2,265,161 | ) | Ps. | (1,898,612 | ) | ||
Deferred tax liability current portion (d) | Ps. | — | Ps. | (133,231 | ) | |||
Deferred tax liability long-term | (2,265,161 | ) | (1,765,381 | ) | ||||
Ps. | (2,265,161 | ) | Ps. | (1,898,612 | ) | |||
(a) | In 2009, reflects the effects of income tax payable in connection with the 2010 Mexican Tax reform (see Note 1(t)). | |
(b) | Reflects valuation allowances of foreign subsidiaries of Ps.627,308 and Ps.607,934 as of December 31, 2008 and 2009, respectively. | |
(c) | Income tax provision recorded in December 2009 as an adjustment to retained earnings. | |
(d) | Income tax provision accounted for as taxes payable in the consolidated balance sheet as of December 31, 2009. |
F-36
Table of Contents
Tax Loss | ||||||||||||||||
Carryforwards | Asset Tax | Goodwill | Total | |||||||||||||
Balance at beginning of year | Ps. | (1,433,087 | ) | Ps. | (891,094 | ) | Ps. | (1,062,680 | ) | Ps. | (3,386,861 | ) | ||||
Increases | (71,999 | ) | (34,402 | ) | (333,360 | ) | (439,761 | ) | ||||||||
Balance at end of year | Ps. | (1,505,086 | ) | Ps. | (925,496 | ) | Ps. | (1,396,040 | ) | Ps. | (3,826,622 | ) | ||||
Charge to the stockholders’ equity | Ps. | 548,804 | ||
Credit to the provision for deferred income tax | (919,588 | ) | ||
Credit to other expense, net | (3,844 | ) | ||
Initial consolidation of TVI | 8,079 | |||
Ps. | (366,549 | ) | ||
2007 | 2008 | 2009 | ||||||||||
Total Shares | 333,652,535 | 329,579,613 | 329,304,371 | |||||||||
CPOs | 2,399,453 | 2,364,642 | 2,362,289 | |||||||||
Shares not in the form of CPO units: | ||||||||||||
Series “A” Shares | 52,915,849 | 52,915,849 | 52,915,849 | |||||||||
Series “B” Shares | 187 | 187 | 187 | |||||||||
Series “D” Shares | 239 | 239 | 239 | |||||||||
Series “L” Shares | 239 | 239 | 239 |
2007 | 2008 | 2009 | ||||||||||||||||||||||
Per Each | Per Each | Per Each | ||||||||||||||||||||||
Series “A”, “B”, | Series “A”, “B”, | Series “A”, “B”, | ||||||||||||||||||||||
Per | “D” and “L” | Per | “D” and “L” | Per | “D” and “L” | |||||||||||||||||||
CPO | Share | CPO | Share | CPO | Share | |||||||||||||||||||
Continuing operations | Ps. | 2.84 | Ps. | 0.02 | Ps. | 2.77 | Ps. | 0.02 | Ps. | 2.14 | Ps. | 0.02 | ||||||||||||
Discontinued operations | — | — | — | — | — | — | ||||||||||||||||||
Controlling interest net income | Ps. | 2.84 | Ps. | 0.02 | Ps. | 2.77 | Ps. | 0.02 | Ps. | 2.14 | Ps. | 0.02 | ||||||||||||
F-37
Table of Contents
Foreign | ||||||||||||
Currency | ||||||||||||
Amounts | Year-End | Mexican | ||||||||||
(Thousands) | Exchange Rate | Pesos | ||||||||||
Assets: | ||||||||||||
U.S. Dollars | 2,413,980 | Ps. | 13.0800 | Ps. | 31,574,858 | |||||||
Euros | 78,148 | 18.7449 | 1,464,876 | |||||||||
Argentinean Pesos | 117,177 | 3.4421 | 403,335 | |||||||||
Chilean Pesos | 21,212,720 | 0.0257 | 545,167 | |||||||||
Colombian Pesos | 16,647,701 | 0.0063 | 104,881 | |||||||||
Other currencies | 146,844 | |||||||||||
Liabilities: | ||||||||||||
U.S. Dollars | 3,035,255 | Ps. | 13.0800 | Ps. | 39,701,135 | |||||||
Euros | 21,722 | 18.7449 | 407,177 | |||||||||
Argentinean Pesos | 73,979 | 3.4421 | 254,643 | |||||||||
Chilean Pesos | 25,750,390 | 0.0257 | 661,785 | |||||||||
Colombian Pesos | 17,575,627 | 0.0063 | 110,726 | |||||||||
Brazilian Reales | 36,400 | 7.4979 | 272,924 | |||||||||
Other currencies | 110,002 |
U.S. Dollar | ||||||||||||||||
Equivalent of other | ||||||||||||||||
Foreign Currency | Total | |||||||||||||||
U.S. Dollar | Transactions | U.S. Dollar | Mexican | |||||||||||||
(Thousands) | (Thousands) | (Thousands) | Pesos (1) | |||||||||||||
Income: | ||||||||||||||||
Revenues | U.S.$ | 582,105 | U.S.$ | 134,262 | U.S.$ | 716,367 | Ps. | 9,370,080 | ||||||||
Other income | 70,648 | 4,116 | 74,764 | 977,913 | ||||||||||||
Interest income | 61,739 | 1,033 | 62,772 | 821,058 | ||||||||||||
U.S.$ | 714,492 | U.S.$ | 139,411 | U.S.$ | 853,903 | Ps. | 11,169,051 | |||||||||
Purchases, costs and expenses: | ||||||||||||||||
Purchases of inventories | U.S.$ | 241,510 | U.S.$ | 26,172 | U.S.$ | 267,682 | Ps. | 3,501,281 | ||||||||
Purchases of property and equipment | 254,390 | 2,512 | 256,902 | 3,360,278 | ||||||||||||
Investments | 5,248 | 48,215 | 53,463 | 699,296 | ||||||||||||
Costs and expenses | 519,947 | 132,171 | 652,118 | 8,529,703 | ||||||||||||
Interest expense | 128,939 | 191 | 129,130 | 1,689,020 | ||||||||||||
U.S.$ | 1,150,034 | U.S.$ | 209,261 | U.S.$ | 1,359,295 | Ps. | 17,779,578 | |||||||||
Net | U.S.$ | (435,542 | ) | U.S.$ | (69,850 | ) | U.S.$ | (505,392 | ) | Ps. | (6,610,527 | ) | ||||
(1) | Income statement amounts translated at the year-end exchange rate of Ps.13.08 are for reference purposes only; does not indicate the actual amounts accounted for in the financial statements (see Note 1(c)). |
F-38
Table of Contents
F-39
Table of Contents
Intersegment | Consolidated | Segment | ||||||||||||||
Total Revenues | Revenues | Revenues | Income (Loss) | |||||||||||||
2007: | ||||||||||||||||
Television Broadcasting | Ps. | 21,213,175 | Ps. | 456,133 | Ps. | 20,757,042 | Ps. | 10,518,063 | ||||||||
Pay Television Networks | 1,851,969 | 487,718 | 1,364,251 | 1,150,226 | ||||||||||||
Programming Exports | 2,262,137 | 620 | 2,261,517 | 1,032,022 | ||||||||||||
Publishing | 3,311,867 | 16,918 | 3,294,949 | 624,360 | ||||||||||||
Sky | 8,402,151 | 80,124 | 8,322,027 | 4,037,860 | ||||||||||||
Cable and Telecom | 2,611,613 | 3,063 | 2,608,550 | 947,178 | ||||||||||||
Other Businesses | 3,039,667 | 86,477 | 2,953,190 | (237,399 | ) | |||||||||||
Segment totals | 42,692,579 | 1,131,053 | 41,561,526 | 18,072,310 | ||||||||||||
Reconciliation to consolidated amounts: | ||||||||||||||||
Eliminations and corporate expenses | (1,131,053 | ) | (1,131,053 | ) | — | (368,344 | ) | |||||||||
Depreciation and amortization expense | — | — | — | (3,223,070 | ) | |||||||||||
Consolidated total | Ps. | 41,561,526 | Ps. | — | Ps. | 41,561,526 | Ps. | 14,480,896 | (1) | |||||||
2008: | ||||||||||||||||
Television Broadcasting | Ps. | 21,460,653 | Ps. | 296,012 | Ps. | 21,164,641 | Ps. | 10,504,876 | ||||||||
Pay Television Networks | 2,212,502 | 692,388 | 1,520,114 | 1,378,152 | ||||||||||||
Programming Exports | 2,437,237 | 26,410 | 2,410,827 | 1,076,769 | ||||||||||||
Publishing | 3,700,361 | 14,436 | 3,685,925 | 648,626 | ||||||||||||
Sky | 9,162,172 | 8,010 | 9,154,162 | 4,416,783 | ||||||||||||
Cable and Telecom | 6,623,367 | 6,271 | 6,617,096 | 2,134,813 | ||||||||||||
Other Businesses | 3,498,615 | 79,102 | 3,419,513 | (242,812 | ) | |||||||||||
Segment totals | 49,094,907 | 1,122,629 | 47,972,278 | 19,917,207 | ||||||||||||
Reconciliation to consolidated amounts: | ||||||||||||||||
Eliminations and corporate expenses | (1,122,629 | ) | (1,122,629 | ) | — | (478,285 | ) | |||||||||
Depreciation and amortization expense | — | — | — | (4,311,115 | ) | |||||||||||
Consolidated total | Ps. | 47,972,278 | Ps. | — | Ps. | 47,972,278 | Ps. | 15,127,807 | (1) | |||||||
2009: | ||||||||||||||||
Television Broadcasting | Ps. | 21,561,636 | Ps. | 163,054 | Ps. | 21,398,582 | Ps. | 10,323,899 | ||||||||
Pay Television Networks | 2,736,579 | 795,139 | 1,941,440 | 1,660,364 | ||||||||||||
Programming Exports | 2,845,918 | 16,915 | 2,829,003 | 1,437,220 | ||||||||||||
Publishing | 3,356,056 | 15,510 | 3,340,546 | 190,709 | ||||||||||||
Sky | 10,005,216 | 15,227 | 9,989,989 | 4,478,847 | ||||||||||||
Cable and Telecom | 9,241,787 | 65,174 | 9,176,613 | 2,971,868 | ||||||||||||
Other Businesses | 3,771,444 | 95,116 | 3,676,328 | (318,201 | ) | |||||||||||
Segment totals | 53,518,636 | 1,166,135 | 52,352,501 | 20,744,706 | ||||||||||||
Reconciliation to consolidated amounts: | ||||||||||||||||
Eliminations and corporate expenses | (1,166,135 | ) | (1,166,135 | ) | — | (658,249 | ) | |||||||||
Depreciation and amortization expense | — | — | — | (4,929,589 | ) | |||||||||||
Consolidated total | Ps. | 52,352,501 | Ps. | — | Ps. | 52,352,501 | Ps. | 15,156,868 | (1) | |||||||
(1) | Consolidated totals represent consolidated operating income. |
F-40
Table of Contents
Additions to | ||||||||||||
Segment | Segment | Property, | ||||||||||
Assets | Liabilities | Plant and | ||||||||||
at Year-End | at Year-End | Equipment | ||||||||||
2007: | ||||||||||||
Continuing operations: | ||||||||||||
Television operations (1) | Ps. | 60,211,587 | Ps. | 26,298,566 | Ps. | 1,149,261 | ||||||
Publishing | 3,012,529 | 673,078 | 156,341 | |||||||||
Sky | 8,893,874 | 6,178,789 | 1,338,938 | |||||||||
Cable and Telecom | 7,806,023 | 4,706,581 | 851,379 | |||||||||
Other Businesses | 6,685,602 | 1,437,859 | 419,520 | |||||||||
Total | Ps. | 86,609,615 | Ps. | 39,294,873 | Ps. | 3,915,439 | ||||||
2008: | ||||||||||||
Continuing operations: | ||||||||||||
Television operations (1) | Ps. | 74,632,445 | Ps. | 27,221,506 | Ps. | 1,126,784 | ||||||
Publishing | 3,571,663 | 875,531 | 82,747 | |||||||||
Sky | 10,692,386 | 6,814,814 | 1,273,819 | |||||||||
Cable and Telecom | 19,024,327 | 11,037,061 | 2,144,334 | |||||||||
Other Businesses | 5,272,716 | 1,616,955 | 563,762 | |||||||||
Total | Ps. | 113,193,537 | Ps. | 47,565,867 | Ps. | 5,191,446 | ||||||
2009: | ||||||||||||
Continuing operations: | ||||||||||||
Television operations (1) | Ps. | 74,038,118 | Ps. | 29,299,493 | Ps. | 1,430,521 | ||||||
Publishing | 3,096,383 | 765,645 | 19,788 | |||||||||
Sky | 9,705,015 | 6,852,274 | 1,727,163 | |||||||||
Cable and Telecom | 24,338,625 | 9,769,453 | 3,205,784 | |||||||||
Other Businesses | 5,895,410 | 1,808,245 | 271,656 | |||||||||
Total | Ps. | 117,073,551 | Ps. | 48,495,110 | Ps. | 6,654,912 | ||||||
(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. |
F-41
Table of Contents
2008 | 2009 | |||||||
Segment assets | Ps. | 113,193,537 | Ps. | 117,073,551 | ||||
Investments attributable to: | ||||||||
Television operations (1) | 2,086,163 | 5,171,016 | ||||||
Cable and Telecom | 430,699 | 211,965 | ||||||
Other Businesses | 879,292 | 1,027,066 | ||||||
Goodwill net attributable to: | ||||||||
Television operations | 482,697 | 322,719 | ||||||
Publishing | 693,590 | 617,203 | ||||||
Cable and Telecom | 4,280,513 | 1,339,542 | ||||||
Other Businesses | 805,314 | 805,314 | ||||||
Total assets | Ps. | 122,851,805 | Ps. | 126,568,376 | ||||
(1) | Includes goodwill attributable to equity investments of Ps.47,544 and Ps.49,024 in 2008 and 2009, respectively. |
2008 | 2009 | |||||||
Segment liabilities | Ps. | 47,565,867 | Ps. | 48,495,110 | ||||
Notes payable and long-term debt not attributable to segments | 28,034,262 | 33,601,119 | ||||||
Total liabilities | Ps. | 75,600,129 | Ps. | 82,096,229 | ||||
Additions to | ||||||||||||
Total | Segment Assets | Property, Plant | ||||||||||
Net Sales | at Year-End | and Equipment | ||||||||||
2007: | ||||||||||||
Mexico | Ps. | 36,532,710 | Ps. | 71,194,036 | Ps. | 3,779,583 | ||||||
Other countries | 5,028,816 | 15,415,579 | 135,856 | |||||||||
Ps. | 41,561,526 | Ps. | 86,609,615 | Ps. | 3,915,439 | |||||||
2008: | ||||||||||||
Mexico | Ps. | 41,176,318 | Ps. | 91,024,558 | Ps. | 5,029,480 | ||||||
Other countries | 6,795,960 | 22,168,979 | 161,966 | |||||||||
Ps. | 47,972,278 | Ps. | 113,193,537 | Ps. | 5,191,446 | |||||||
2009: | ||||||||||||
Mexico | Ps. | 44,574,144 | Ps. | 96,678,472 | Ps. | 6,606,342 | ||||||
Other countries | 7,778,357 | 20,395,079 | 48,570 | |||||||||
Ps. | 52,352,501 | Ps. | 117,073,551 | Ps. | 6,654,912 | |||||||
F-42
Table of Contents
2007 | 2008 | 2009 | ||||||||||
Controlling interest net income as reported under Mexican FRS | Ps. | 8,082,463 | Ps. | 7,803,652 | Ps. | 6,007,143 | ||||||
U.S. GAAP adjustments: | ||||||||||||
(a) Capitalization of financing costs, net of accumulated depreciation | 92,713 | 105,205 | 19,622 | |||||||||
(b) Deferred costs, net of amortization | 97,672 | 15,818 | — | |||||||||
(c) Deferred debt refinancing costs, net of amortization | 31,420 | 31,574 | 31,317 | |||||||||
(d) Equipment inflation restatement, net of depreciation | (43,042 | ) | — | — | ||||||||
(e) Purchase accounting adjustments: | ||||||||||||
Amortization of network affiliation agreements | (7,159 | ) | (4,176 | ) | — | |||||||
Depreciation of fixed assets | (12,118 | ) | (12,118 | ) | (12,118 | ) | ||||||
Amortization of other assets | (5,006 | ) | (5,006 | ) | (5,006 | ) | ||||||
Impairment of goodwill for Bay City Television | 493,693 | 427,095 | 184,055 | |||||||||
Impairment of goodwill for Editorial Televisa | — | — | (611,977 | ) | ||||||||
Amortization of subscribers list | (156,268 | ) | (156,268 | ) | (156,268 | ) | ||||||
(g) Equity method investees: | ||||||||||||
Cablemás | (25,057 | ) | — | — | ||||||||
(h) Univision investment: | ||||||||||||
Sale of investment | (298,336 | ) | — | — | ||||||||
(j) Production and film costs | 23,895 | (133,983 | ) | (21,338 | ) | |||||||
(k) Deferred income taxes and employees’ profit sharing: | ||||||||||||
Deferred income taxes(1) | (5,905 | ) | 49,565 | 91,356 | ||||||||
Impact of 2010 Mexican tax reform | — | — | (548,503 | ) | ||||||||
Deferred employees’ profit sharing(1) | (33,252 | ) | 19,065 | 7,357 | ||||||||
(l) Maintenance reserve | (3,949 | ) | (18,062 | ) | — | |||||||
(m) Noncontrolling interest on U.S. GAAP adjustments | 1,632 | 7,465 | — | |||||||||
Total U.S. GAAP adjustments, net | 150,933 | 326,174 | (1,021,503 | ) | ||||||||
Net income attributable to the controlling interest under U.S. GAAP | 8,233,396 | 8,129,826 | 4,985,640 | |||||||||
Net income attributable to the noncontrolling interest under U.S. GAAP | 934,295 | 919,540 | 575,554 | |||||||||
Consolidated net income under U.S. GAAP | Ps. | 9,167,691 | Ps. | 9,049,366 | Ps. | 5,561,194 | ||||||
(1) | Net of inflation effects in 2007. Effective January 1, 2008, the Group discontinued recognizing the effects of inflation (see Note 1(a)). |
F-43
Table of Contents
2008 | 2009 | |||||||
Total stockholders’ equity under Mexican FRS | Ps. | 47,251,676 | Ps. | 44,472,147 | ||||
U.S. GAAP adjustments: | ||||||||
(a) Capitalization of financing costs, net of accumulated depreciation | (650,888 | ) | (631,266 | ) | ||||
(c) Deferred debt refinancing costs, net of amortization | (510,258 | ) | (478,941 | ) | ||||
(e) Purchase accounting adjustments: | ||||||||
Broadcast license | 119,913 | 119,913 | ||||||
Fixed assets | 30,289 | 18,171 | ||||||
Other assets | 40,457 | 35,451 | ||||||
Goodwill on acquisition of Bay City Television | (184,055 | ) | — | |||||
Goodwill on acquisition of noncontrolling interest in Editorial Televisa | 1,358,428 | 746,451 | ||||||
Subscribers list | 208,358 | 52,090 | ||||||
Goodwill on acquisition of noncontrolling interest in Sky | 86,236 | 86,236 | ||||||
(f) Goodwill and other intangible assets: | ||||||||
Reversal of Mexican FRS goodwill amortization | 140,380 | 140,380 | ||||||
Reversal of Mexican FRS amortization of intangible assets with indefinite lives | 109,988 | 109,988 | ||||||
(g) Equity method investees: | ||||||||
OCEN | (2,446 | ) | (2,446 | ) | ||||
Cablemás | (25,057 | ) | (25,057 | ) | ||||
(i) Pension plan and seniority premiums | (85,489 | ) | 111,890 | |||||
(j) Production and film costs | (1,648,755 | ) | (1,670,093 | ) | ||||
(k) Deferred income taxes and employees’ profit sharing: | ||||||||
Deferred income taxes | 698,985 | 732,836 | ||||||
Deferred employees’ profit sharing | (129,214 | ) | (121,857 | ) | ||||
(m) Noncontrolling interest | (5,269,344 | ) | (6,338,862 | ) | ||||
Total U.S. GAAP adjustments, net | (5,712,472 | ) | (7,115,116 | ) | ||||
Controlling interest under U.S. GAAP | 41,539,204 | 37,357,031 | ||||||
Noncontrolling interest under U.S. GAAP | 5,269,344 | 6,338,862 | ||||||
Total stockholders’ equity under U.S. GAAP | Ps. | 46,808,548 | Ps. | 43,695,893 | ||||
Changes in U.S. GAAP stockholders’ equity | 2008 | 2009 | ||||||
Balance at January 1, | Ps. | 40,235,021 | Ps. | 46,808,548 | ||||
Net income for the year attributable to the controlling interest | 8,129,826 | 4,985,640 | ||||||
Repurchase of capital stock | (1,251,148 | ) | (759,003 | ) | ||||
Dividends paid to the controlling interest | (2,229,973 | ) | (9,163,857 | ) | ||||
Sale of capital stock under stock-based compensation plan | 138,580 | 81,818 | ||||||
Stock based compensation | 222,046 | 371,783 | ||||||
Net loss on acquisition of noncontrolling interest in Cablemás and Cablestar | — | (56,210 | ) | |||||
Other comprehensive income: | ||||||||
Changes in other comprehensive income of equity investees | (58,109 | ) | 39,525 | |||||
Cumulative result from hedge derivative contracts, net of tax | 1,955 | (7,142 | ) | |||||
Change in fair value of available-for-sale financial assets, net of tax | — | 339,881 | ||||||
Foreign currency translation, net of tax | 352,726 | (154,482 | ) | |||||
Pension and post retirement, net of tax | (346,558 | ) | 139,874 | |||||
Noncontrolling interest | 1,614,182 | 1,069,518 | ||||||
Balance at December 31, | Ps. | 46,808,548 | Ps. | 43,695,893 | ||||
F-44
Table of Contents
F-45
Table of Contents
2008 | 2009 | |||||||
Consolidated subsidiaries: | ||||||||
Television Broadcasting | Ps. | 337,094 | Ps. | 337,094 | ||||
Cable and Telecom | 4,259,514 | 1,339,543 | ||||||
Publishing | 2,058,548 | 1,370,184 | ||||||
Other segments | 155,224 | 179,301 | ||||||
Equity method investees | 879,267 | 880,747 | ||||||
Ps. | 7,689,647 | Ps. | 4,106,869 | |||||
F-46
Table of Contents
Cable and | ||||
Telecom | ||||
Balance as of December 31, 2008 | Ps. | 4,259,514 | ||
Adjustments/Reclassifications (1) | (2,167,533 | ) | ||
Impairments | (752,438 | ) | ||
Balance as of December 31, 2009 | Ps. | 1,339,543 | ||
(1) | Reflects the final valuation and purchase price allocation of Cablemás in December 2009 (see Note 2). |
Goodwill | Trademarks | |||||||
Balance as of December 31, 2008 | Ps. | 2,058,548 | Ps. | 681,041 | ||||
Acquisitions | — | 48,232 | ||||||
Foreign currency translation adjustments | (1,517 | ) | (8,093 | ) | ||||
Adjustments/Reclassifications | (48,757 | ) | — | |||||
Impairments | (638,090 | ) | (197,488 | ) | ||||
Balance as of December 31, 2009 | Ps. | 1,370,184 | Ps. | 523,692 | ||||
December 31, 2008 | December 31, 2009 | |||||||||||||||||||||||
Accumulated | Accumulated | |||||||||||||||||||||||
Impairment | Carrying | Impairment | Carrying | |||||||||||||||||||||
Gross | Charges | Value | Gross | Charges | Value | |||||||||||||||||||
Balance at beginning of year | Ps. | 5,357,098 | Ps. | (404,927 | ) | Ps. | 4,952,171 | Ps. | 8,227,074 | Ps. | (537,427 | ) | Ps. | 7,689,647 | ||||||||||
Adjustments and other changes | 2,869,976 | (132,500 | ) | 2,737,476 | (2,192,250 | ) | (1,390,528 | ) | (3,582,778 | ) | ||||||||||||||
Balance at end of year | Ps. | 8,227,074 | Ps. | (537,427 | ) | Ps. | 7,689,647 | Ps. | 6,034,824 | Ps. | (1,927,955 | ) | Ps. | 4,106,869 | ||||||||||
F-47
Table of Contents
2008 | 2009 | |||||||
Trademarks (1)(2) | Ps. | 803,452 | Ps. | 1,282,539 | ||||
Television network concession (1) | 742,605 | 742,607 | ||||||
Cablemás concessions (2) | — | 1,052,190 | ||||||
TVI concession | 262,925 | 262,925 | ||||||
Telecom concession | 783,290 | 778,970 | ||||||
Sky concession | 96,042 | 96,042 | ||||||
Network affiliation agreements (1) | 119,913 | 119,913 | ||||||
Licenses and software (2) | 633,702 | 845,856 | ||||||
Subscriber list (2) | 740,251 | 1,531,085 | ||||||
Deferred financing costs | 378,734 | 536,774 | ||||||
Other | 512,212 | 639,211 | ||||||
Ps. | 5,073,126 | Ps. | 7,888,112 | |||||
(1) | Indefinite-lived. | |
(2) | Increases relate to the final valuation and purchase price allocation of Cablemás in December 2009 (see Note 2). |
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2008 | 2009 | |||||||
Projected benefit obligation | Ps. | 1,372,154 | Ps. | 1,427,478 | ||||
Plan assets (see Note 10) | (1,404,589 | ) | (1,749,629 | ) | ||||
Funded status | (32,435 | ) | (322,151 | ) | ||||
Prepaid pension asset | (32,435 | ) | (322,151 | ) | ||||
Severance indemnities — projected benefit obligation | 470,314 | 557,251 | ||||||
Balance sheet liability | Ps. | 437,879 | Ps. | 235,100 | ||||
Change in benefit obligation: | ||||||||
Projected benefit obligation at beginning of year | Ps. | 1,134,108 | Ps. | 1,372,154 | ||||
Service cost | 77,961 | 87,417 | ||||||
Interest cost | 91,797 | 107,207 | ||||||
Actuarial gain | (86,884 | ) | (105,091 | ) | ||||
Acquisition | 45,231 | 2,933 | ||||||
Plan amendments (1) | 142,581 | — | ||||||
Benefits paid | (32,640 | ) | (37,142 | ) | ||||
Projected benefit obligation at end of year | Ps. | 1,372,154 | Ps. | 1,427,478 | ||||
(1) | The terms of a pension plan for certain Group’s employees were modified in the first quarter 2008 increasing the pension salary for each participant without exceeding a percentage of such pension salary. |
Weighted | ||||||||||||||||
Average | ||||||||||||||||
Expected | ||||||||||||||||
Target | Percentage of Plan | Long-Term | ||||||||||||||
Allocation | Assets as of December 31, | Rate of | ||||||||||||||
2010 | 2008 | 2009 | Return 2009 | |||||||||||||
Equity securities | 41.4 | % | 62.6 | % | 46.0 | % | 11.0 | % | ||||||||
Fixed rate instruments | 58.6 | % | 37.4 | % | 54.0 | % | 3.2 | % | ||||||||
Total | 100.0 | % | 100.0 | % | 100.0 | % | 14.2 | % | ||||||||
F-49
Table of Contents
Quoted Prices in | Internal | Internal Models | ||||||||||||||
Balance | Active Markets | Models with | with Significant | |||||||||||||
as of | for Identical | Significant | Unobservable | |||||||||||||
December 31, | Assets | Observable Inputs | Inputs | |||||||||||||
2009 | (Level 1) | (Level 2) | (Level 3) | |||||||||||||
Common stocks (1) | Ps. | 779,920 | Ps. | 779,920 | Ps. | — | Ps. | — | ||||||||
Mutual funds (fixed rate instruments) (2) | 497,736 | 497,736 | — | — | ||||||||||||
Money market securities (3) | 446,973 | 446,973 | — | — | ||||||||||||
Other equity securities | 25,000 | — | 25,000 | — | ||||||||||||
Total investment assets | Ps. | 1,749,629 | Ps. | 1,724,629 | Ps. | 25,000 | Ps. | — | ||||||||
(1) | Common stocks are valued at the closing price reported on the active market on which the individual securities are traded. All common stock included in this line item relate to the Group’s CPOs. | |
(2) | Mutual funds consist of fixed rate instruments. These are valued at the net asset value provided by the administrator of the fund. | |
(3) | Money market securities consist of government debt securities, which are valued based on observable prices from the new issue market, benchmark quotes, secondary trading and dealer quotes. |
2008 | 2009 | |||||||
Accumulated other comprehensive income as of beginning of year (net of income tax) | Ps. | 285,006 | Ps. | (61,552 | ) | |||
Net gain | (286,793 | ) | 128,823 | |||||
Amortization of net gain | (68,098 | ) | 24,156 | |||||
Amortization of prior service cost | 8,333 | (13,104 | ) | |||||
Accumulated other comprehensive income as of end of year (net of income tax) | Ps. | (61,552 | ) | Ps. | 78,323 | |||
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2008 | 2009 | |||||||
Prior service costs, net of income tax | Ps. | (147,738 | ) | Ps. | (122,950 | ) | ||
Net actuarial gains, net of income tax | 86,186 | 201,273 | ||||||
Accumulated other comprehensive income as of end of year (net of income tax) | Ps. | (61,552 | ) | Ps. | 78,323 | |||
December 31, | December 31, | |||||||
2008 | 2009 | |||||||
Net deferred income tax liability recorded under Mexican FRS on Mexican FRS balances (see Note 19) | Ps. | (2,265,161 | ) | Ps. | (1,898,612 | ) | ||
Reclassification of income tax payable related to subsidiaries | 465,294 | 161,686 | ||||||
Net deferred income tax amount under ASC 740 applied to Mexican FRS balances | (1,799,867 | ) | (1,736,926 | ) | ||||
Impact of U.S. GAAP adjustments: | ||||||||
Capitalization of financing costs | 182,248 | 189,380 | ||||||
Purchase accounting adjustments | (111,724 | ) | (67,688 | ) | ||||
Pension plan and seniority premiums | 23,937 | (33,567 | ) | |||||
Production and film costs | 461,652 | 501,028 | ||||||
Deferred debt refinancing costs | 142,872 | 143,683 | ||||||
698,985 | 732,836 | |||||||
Net deferred income tax liability under U.S. GAAP | (1,100,882 | ) | (1,004,090 | ) | ||||
Less: | ||||||||
Deferred income tax amount under ASC 740 applied to Mexican FRS balances | (1,799,867 | ) | (1,736,926 | ) | ||||
Net deferred income tax liability adjustment required under U.S. GAAP | Ps. | 698,985 | Ps. | 732,836 | ||||
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Credit to the provision for deferred income tax | Ps. | (158,833 | ) | |
Credit to other expense | (3,844 | ) | ||
Initial consolidation of TVI | 8,079 | |||
Charge to the stockholders’ equity | 57,806 | |||
Ps. | (96,792 | ) | ||
December 31, | December 31, | |||||||
2008 | 2009 | |||||||
Deferred EPS liability: | ||||||||
Current: | ||||||||
Inventories | Ps. | 2,047 | Ps. | 2,047 | ||||
Noncurrent: | ||||||||
Property, plant and equipment | (101,101 | ) | (91,175 | ) | ||||
Deferred costs | (55,850 | ) | (56,294 | ) | ||||
Pension plan and seniority premiums | 44,876 | 39,915 | ||||||
Other | (19,186 | ) | (16,350 | ) | ||||
Total deferred EPS liability | Ps. | (129,214 | ) | Ps. | (121,857 | ) | ||
2007 | 2008 | 2009 | ||||||||||
Current: | ||||||||||||
Mexican | Ps. | 3,111,895 | Ps. | 2,917,021 | Ps. | 3,489,807 | ||||||
Foreign | 197,265 | 169,448 | 246,917 | |||||||||
3,309,160 | 3,086,469 | 3,736,724 | ||||||||||
Deferred: | ||||||||||||
Mexican | 124,799 | 428,161 | (158,833 | ) | ||||||||
Foreign | 1,169 | — | — | |||||||||
125,968 | 428,161 | (158,833 | ) | |||||||||
Ps. | 3,435,128 | Ps. | 3,514,630 | Ps. | 3,577,891 | |||||||
Mexico | 2004 and all following years | |
United States of America | 2006 and all following years for federal tax examinations, and 2004 and all following years for state tax examinations | |
Argentina | 2003 and all following years | |
Chile | 2003 and all following years | |
Colombia | 2007 and all following years, and 2004 and all following years for companies having a tax loss | |
Switzerland | 2007 and all following years |
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F-53
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Year Ended December 31, | ||||||||||||
2007 | 2008 | 2009 | ||||||||||
Net sales | Ps. | 41,561,526 | Ps. | 47,972,278 | Ps. | 52,352,501 | ||||||
Cost of providing services (exclusive of depreciation and amortization) | 18,108,061 | 21,708,070 | 23,789,707 | |||||||||
Selling, administrative and other expenses | 5,826,861 | 7,345,226 | 10,406,786 | |||||||||
Depreciation and amortization | 3,304,581 | 4,427,287 | 5,147,715 | |||||||||
Income from operations | 14,322,023 | 14,491,695 | 13,008,293 | |||||||||
Integral result of financing, net | (250,909 | ) | (740,584 | ) | (2,877,581 | ) | ||||||
Other expense, net | (693,939 | ) | (137,181 | ) | (276,300 | ) | ||||||
Income before income taxes, minority interest and equity in earnings or losses of affiliates | 13,377,175 | 13,613,930 | 9,854,412 | |||||||||
Income tax and assets tax — current and deferred | (3,435,128 | ) | (3,514,630 | ) | (3,577,891 | ) | ||||||
Income before minority interest and equity in earnings or losses of affiliates | 9,942,047 | 10,099,300 | 6,276,521 | |||||||||
Equity in losses of affiliates | (774,356 | ) | (1,049,934 | ) | (715,327 | ) | ||||||
Consolidated net income | 9,167,691 | 9,049,366 | 5,561,194 | |||||||||
Less: Net income attributable to the noncontrolling interest under U.S. GAAP | 934,295 | 919,540 | 575,554 | |||||||||
Net income attributable to the controlling interest | Ps. | 8,233,396 | Ps. | 8,129,826 | Ps. | 4,985,640 | ||||||
Weighted average common shares outstanding (in millions) | 333,653 | 329,580 | 329,304 | |||||||||
2007 | 2008 | 2009 | ||||||||||||||||||||||
Series “A” | Series “A” | Series “A” | ||||||||||||||||||||||
and “B” | and “B” | and “B” | ||||||||||||||||||||||
CPO | Shares | CPO | Shares | CPO | Shares | |||||||||||||||||||
Basic EPS | ||||||||||||||||||||||||
Income from continuing operations available to common shareholders | 6,865,699 | 1,305,558 | 6,673,204 | 1,305,066 | 4,672,096 | 889,089 | ||||||||||||||||||
Net income available to common shareholders | 6,865,699 | 1,305,558 | 6,673,204 | 1,305,066 | 4,672,096 | 889,089 | ||||||||||||||||||
Weighted average number of common shares outstanding | 2,399,453 | 52,916,036 | 2,364,642 | 52,916,036 | 2,362,289 | 52,916,036 | ||||||||||||||||||
Basic earnings per share (continuing operations) | Ps. | 2.86 | Ps. | 0.02 | Ps. | 2.82 | Ps. | 0.02 | Ps. | 1.98 | Ps. | 0.02 | ||||||||||||
Basic earnings per share (net income) | Ps. | 2.86 | Ps. | 0.02 | Ps. | 2.82 | Ps. | 0.02 | Ps. | 1.98 | Ps. | 0.02 | ||||||||||||
Diluted EPS | ||||||||||||||||||||||||
Dilutive potential shares | 40,018 | — | 41,675 | — | 53,613 | — | ||||||||||||||||||
Total diluted weighted average common shares outstanding | 2,439,471 | 52,916,036 | 2,406,317 | 52,916,036 | 2,415,902 | 52,916,036 | ||||||||||||||||||
Diluted earnings per share (continuing operations) | Ps. | 2.81 | Ps. | 0.02 | Ps. | 2.77 | Ps. | 0.02 | Ps. | 1.93 | Ps. | 0.02 | ||||||||||||
Diluted earnings per share (net income) | Ps. | 2.81 | Ps. | 0.02 | Ps. | 2.77 | Ps. | 0.02 | Ps. | 1.93 | Ps. | 0.02. | ||||||||||||
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December 31, | December 31, | |||||||
2008 | 2009 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | Ps. | 33,583,045 | Ps. | 29,941,488 | ||||
Temporary investments | 8,321,286 | 8,902,346 | ||||||
Trade notes and accounts receivable, net | 18,199,880 | 18,399,183 | ||||||
Other accounts and notes receivable, net | 2,231,562 | 3,530,546 | ||||||
Due from affiliated companies | 161,821 | 135,723 | ||||||
Transmission rights and programming | 3,343,448 | 4,372,988 | ||||||
Inventories | 1,612,024 | 1,665,102 | ||||||
Current deferred taxes | 2,598,374 | 2,342,143 | ||||||
Other current assets | 1,105,871 | 1,435,081 | ||||||
Total current assets | 71,157,311 | 70,724,600 | ||||||
Non-current assets: | ||||||||
Derivative financial instruments | 2,316,560 | 1,538,678 | ||||||
Transmission rights and programming | 4,676,006 | 4,245,366 | ||||||
Investments | 3,321,107 | 6,333,520 | ||||||
Property, plant and equipment, net | 30,177,799 | 32,458,369 | ||||||
Goodwill, net | 7,689,647 | 4,106,869 | ||||||
Intangible assets, net | 5,073,126 | 7,888,112 | ||||||
Deferred taxes | 3,443,548 | 3,932,193 | ||||||
Other assets | 111,213 | 115,882 | ||||||
Total assets | Ps. | 127,966,317 | Ps. | 131,343,589 | ||||
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December 31, | December 31, | |||||||
2008 | 2009 | |||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Current portion of long-term debt | Ps. | 2,270,353 | Ps. | 1,433,015 | ||||
Current portion of capital lease obligations | 151,628 | 235,271 | ||||||
Trade accounts payable | 6,337,436 | 6,432,906 | ||||||
Customer deposits and advances | 18,098,643 | 19,858,290 | ||||||
Taxes payable | 830,073 | 807,744 | ||||||
Current deferred taxes | 1,539,708 | 1,741,122 | ||||||
Accrued interest | 439,777 | 464,621 | ||||||
Other accrued liabilities | 2,293,806 | 2,577,835 | ||||||
Due from affiliated companies | 88,622 | 34,202 | ||||||
Total current liabilities | 32,050,046 | 33,585,006 | ||||||
Non-current liabilities: | ||||||||
Long-term debt | 36,630,583 | 41,983,195 | ||||||
Derivative financial instruments | 604,650 | 523,628 | ||||||
Capital lease obligations | 1,222,163 | 1,166,462 | ||||||
Customer deposits and advances | 589,369 | 1,054,832 | ||||||
Other long-term liabilities | 3,690,776 | 3,240,097 | ||||||
Deferred taxes | 5,732,310 | 5,659,161 | ||||||
Pension and seniority premiums | 637,872 | 435,315 | ||||||
Total liabilities | 81,157,769 | 87,647,696 | ||||||
Commitments and contingencies | ||||||||
Controlling interest | 41,539,204 | 37,357,031 | ||||||
Noncontrolling interest | 5,269,344 | 6,338,862 | ||||||
Total stockholders’ equity | 46,808,548 | 43,695,893 | ||||||
Total liabilities and stockholders’ equity | Ps. | 127,966,317 | Ps. | 131,343,589 | ||||
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2007 | 2008 | 2009 | ||||||||||
Operating activities: | ||||||||||||
Net income under U.S. GAAP | Ps. | 9,167,691 | Ps. | 9,049,366 | Ps. | 5,561,194 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||||||
Equity in losses of affiliates | 774,356 | 1,049,934 | 715,327 | |||||||||
Depreciation and amortization | 3,304,581 | 4,427,287 | 5,147,715 | |||||||||
Amortization of deferred debt refinancing | (31,420 | ) | (31,574 | ) | (31,317 | ) | ||||||
Impairment adjustments | — | 182,500 | 1,588,016 | |||||||||
Pension plans and seniority premiums | (23,739 | ) | 5,467 | 58,196 | ||||||||
Deferred income tax | 125,968 | 428,161 | (158,833 | ) | ||||||||
Loss on disposal of investment | 822,671 | — | (90,565 | ) | ||||||||
Write-down of held-to-maturity debt security | — | 405,111 | — | |||||||||
Derivative financial instruments | 140,398 | (895,734 | ) | 644,956 | ||||||||
Unrealized foreign exchange gain, net | 139,064 | 4,981,960 | (1,003,537 | ) | ||||||||
Employee stock option plans | 140,517 | 222,046 | 371,783 | |||||||||
Maintenance reserve | 3,949 | 18,062 | — | |||||||||
Loss from monetary position | 542,533 | — | — | |||||||||
Changes in operating assets and liabilities: | ||||||||||||
(Increase) decrease in: | ||||||||||||
Trade notes and accounts receivable and customer deposits and advances, net | (1,651,317 | ) | (1,395,961 | ) | 1,815,181 | |||||||
Inventories | (32,053 | ) | (375,153 | ) | (45,148 | ) | ||||||
Transmission rights, programs and films and production talent advances | (1,882,412 | ) | (1,053,008 | ) | (653,307 | ) | ||||||
Other accounts and notes receivable and other current assets | (528,894 | ) | (391,399 | ) | (1,347,376 | ) | ||||||
Increase (decrease) in: | ||||||||||||
Trade accounts payable | 937,012 | 1,577,231 | (80,920 | ) | ||||||||
Other liabilities and taxes payable | 116,801 | 1,727,626 | (147,598 | ) | ||||||||
Pension plan and seniority premiums | 40,833 | (81,314 | ) | (16,035 | ) | |||||||
Net cash provided by operating activities | 12,106,539 | 19,850,608 | 12,327,732 | |||||||||
Investing activities: | ||||||||||||
Temporary investments | (915,818 | ) | (5,208,287 | ) | (3,565,772 | ) | ||||||
Due from affiliated companies, net | 262,170 | (89,826 | ) | (2,309 | ) | |||||||
Investments | (5,184,797 | ) | (1,982,100 | ) | (809,625 | ) | ||||||
Disposition of investments | 437,990 | 109,529 | 57,800 | |||||||||
Disposition of held-to-maturity investments | — | 874,999 | — | |||||||||
Investments in property, plant and equipment | (3,681,464 | ) | (5,191,446 | ) | (6,410,869 | ) | ||||||
Disposition of property, plant and equipment | 704,310 | 91,815 | 248,148 | |||||||||
Proceeds from sale of shares of Univision | 11,821,932 | — | — | |||||||||
Acquisitions, net of cash acquired | (3,737,998 | ) | (1,489,174 | ) | (569,601 | ) | ||||||
Net cash used in investing activities | (293,675 | ) | (12,884,490 | ) | (11,052,228 | ) | ||||||
Financing activities: | ||||||||||||
Issuance of Senior Notes due 2037 | 4,500,000 | — | — | |||||||||
Issuance of Senior Notes due 2012 | 2,481,521 | — | — | |||||||||
Issuance of Senior Notes due 2018 | — | 5,241,650 | — | |||||||||
Issuance of Senior Notes due 2040 | — | — | 7,612,055 | |||||||||
Prepayment of Senior Notes due 2013 (Sky) | — | (122,886 | ) | — | ||||||||
Repayment of Mexican peso debt | — | (480,000 | ) | (1,162,460 | ) | |||||||
Repayment of foreign currency debt | — | — | (1,206,210 | ) | ||||||||
Satellite transponder lease payments | — | (97,696 | ) | (138,807 | ) | |||||||
Other (decrease) increase in debt | (1,054,007 | ) | 1,231 | 33,856 | ||||||||
Derivative financial instruments | — | (346,065 | ) | (206,776 | ) | |||||||
Repurchase of capital stock | (3,948,331 | ) | (1,112,568 | ) | (677,185 | ) | ||||||
Sale of repurchased shares | 99,771 | — | — | |||||||||
Dividends paid | (4,506,492 | ) | (2,229,973 | ) | (9,163,857 | ) | ||||||
Noncontrolling interest | 1,032,659 | (332,029 | ) | 76,344 | ||||||||
Net cash (used in) provided by financing activities | (1,394,879 | ) | 521,664 | (4,833,040 | ) | |||||||
Net increase (decrease) in cash and cash equivalents | 10,417,985 | 7,487,782 | (3,557,536 | ) | ||||||||
Effect of exchange rate changes on cash and cash equivalents | 22,086 | 131,854 | (105,530 | ) | ||||||||
Net increase in cash and cash equivalents upon acquisitions | 138,261 | 483,868 | 21,509 | |||||||||
Effect of inflation on cash and cash equivalents | (560,136 | ) | — | — | ||||||||
Cash and cash equivalents at beginning of year | 15,461,345 | 25,479,541 | 33,583,045 | |||||||||
Cash and cash equivalents at end of year | Ps. | 25,479,541 | Ps. | 33,583,045 | Ps. | 29,941,488 | ||||||
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2007 | 2008 | 2009 | ||||||||||
Interest | Ps. | 1,905,621 | Ps. | 2,529,221 | Ps. | 2,832,675 | ||||||
Income taxes and/or assets tax | 2,955,115 | 2,657,525 | 4,282,042 |
2007 | 2008 | 2009 | ||||||||||
Note receivable related to customer deposits | Ps. | 14,753,180 | Ps. | 14,383,384 | Ps. | 14,515,450 |
Quoted Prices in | Internal Models | Internal Models | ||||||||||||||
Active Markets for | with Significant | with Significant | ||||||||||||||
Balance | Identical | Observable | Unobservable | |||||||||||||
as of December 31, | Assets | Inputs | Inputs | |||||||||||||
2008 | (Level 1) | (Level 2) | (Level 3) | |||||||||||||
Assets: | ||||||||||||||||
Temporary investments | Ps. | 8,321,286 | Ps. | 7,407,689 | Ps. | 913,597 | Ps. | — | ||||||||
Derivative financial instruments | 2,363,148 | — | 2,363,148 | — | ||||||||||||
Total | Ps. | 10,684,434 | Ps. | 7,407,689 | Ps. | 3,276,745 | Ps. | — | ||||||||
Liabilities: | ||||||||||||||||
Derivative financial instruments | Ps. | 604,650 | Ps. | — | Ps. | 604,650 | Ps. | — | ||||||||
Total | Ps. | 604,650 | Ps. | — | Ps. | 604,650 | Ps. | — | ||||||||
Quoted Prices in | Internal Models | Internal Models | ||||||||||||||
Active Markets for | with Significant | with Significant | ||||||||||||||
Balance | Identical | Observable | Unobservable | |||||||||||||
as of December 31, | Assets | Inputs | Inputs | |||||||||||||
2009 | (Level 1) | (Level 2) | (Level 3) | |||||||||||||
Assets: | ||||||||||||||||
Temporary investments | Ps. | 8,902,346 | Ps. | 5,394,502 | Ps. | 3,507,844 | Ps. | — | ||||||||
Available-for-sale investments | 2,826,457 | — | 2,826,457 | — | ||||||||||||
Derivative financial instruments | 1,545,396 | — | 1,545,396 | — | ||||||||||||
Total | Ps. | 13,274,199 | Ps. | 5,394,502 | Ps. | 7,879,697 | Ps. | — | ||||||||
Liabilities: | ||||||||||||||||
Derivative financial instruments | Ps. | 523,628 | Ps. | — | Ps. | 523,628 | Ps. | — | ||||||||
Total | Ps. | 523,628 | Ps. | — | Ps. | 523,628 | Ps. | — | ||||||||
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F-59
Table of Contents
(In thousands of Mexican Pesos) | Sky | TuTv | ||||||
As of December 31, 2008 | ||||||||
Current assets | Ps. | 7,324,426 | Ps. | 117,654 | ||||
Non-current assets | 3,811,724 | 2,214 | ||||||
Total Assets | Ps. | 11,136,150 | Ps. | 119,868 | ||||
Current liabilities | Ps. | 2,584,873 | Ps. | 44,759 | ||||
Non-current liabilities | 4,684,520 | — | ||||||
Total Liabilities | Ps. | 7,269,393 | Ps. | 44,759 | ||||
Maximum loss exposure | Ps. | 6,536,920 | Ps. | 59,934 | ||||
Sky | TuTv | |||||||
As of December 31, 2009 | ||||||||
Current assets | Ps. | 5,681,802 | Ps. | 96,897 | ||||
Non-current assets | 4,275,419 | 1,072 | ||||||
Total Assets | Ps. | 9,957,221 | Ps. | 97,969 | ||||
Current liabilities | Ps. | 1,908,001 | Ps. | 44,812 | ||||
Non-current liabilities | 5,027,248 | — | ||||||
Total Liabilities | Ps. | 6,935,249 | Ps. | 44,812 | ||||
Maximum loss exposure | Ps. | 5,844,889 | Ps. | 48,985 | ||||
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Balance at | Balance at | |||||||||||||||
Beginning | End | |||||||||||||||
Description | of Year | Additions | Deductions | of Year | ||||||||||||
Continuing operations: | ||||||||||||||||
Reserve for damage, obsolescence or deterioration of inventories: | ||||||||||||||||
Year ended December 31, 2007 | Ps. | 6,968 | Ps. | 15,578 | Ps. | (3,165 | ) | Ps. | 19,381 | |||||||
Year ended December 31, 2008 | 19,381 | 35,678 | (9,519 | ) | 45,540 | |||||||||||
Year ended December 31, 2009 | 45,540 | 45,198 | (9,438 | ) | 81,300 | |||||||||||
Allowances for doubtful accounts(1): | ||||||||||||||||
Year ended December 31, 2007 | Ps. | 1,251,595 | Ps. | 154,955 | Ps. | (303,684 | ) | Ps. | 1,102,866 | |||||||
Year ended December 31, 2008 | 1,102,866 | 637,476 | (427,242 | ) | 1,313,100 | |||||||||||
Year ended December 31, 2009 | 1,313,100 | 1,047,445 | (397,811 | ) | 1,962,734 |
(1) | Includes allowances for trade and non-trade doubtful accounts. |
F-62