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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, 2007 |
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 (“AShares”) | 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 | New York Stock Exchange | |
five Ordinary Participation Certificates(Certificados de | ||
Participación Ordinarios)(“CPOs”) | ||
CPOs, each representing twenty-five A Shares, twenty-two | ||
B Shares thirty-five L Shares and thirty-five D Shares | New York Stock Exchange (for listing purposes only) |
December 31, 2007 was:
52,093,870,399B Shares
82,876,553,776 L Shares
82,876,553,776 D Shares
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PART II | ||||||||
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PART III | ||||||||
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Exhibit 1.1 | ||||||||
Exhibit 2.11 | ||||||||
Exhibit 4.16 | ||||||||
Exhibit 4.17 | ||||||||
Exhibit 8.1 | ||||||||
Exhibit 12.1 | ||||||||
Exhibit 12.2 | ||||||||
Exhibit 13.1 | ||||||||
Exhibit 13.2 |
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Year Ended December 31, | ||||||||||||||||||||||||
2003 | 2004 | 2005 | 2006 | 2007 | 2007 | |||||||||||||||||||
(Millions of Pesos in purchasing power as of December 31, 2007 or millions of U.S. Dollars)(1) | ||||||||||||||||||||||||
(Mexican GAAP/FRS) | ||||||||||||||||||||||||
Income Statement Data: | ||||||||||||||||||||||||
Net sales | Ps. | 27,652 | Ps. | 32,704 | Ps. | 35,068 | Ps. | 39,358 | Ps. | 41,562 | U.S.$ | 3,805 | ||||||||||||
Operating income | 7,095 | 9,547 | 11,663 | 14,266 | 14,481 | 1,326 | ||||||||||||||||||
Integral cost of financing, net(2) | 721 | 1,691 | 1,924 | 1,141 | 410 | 38 | ||||||||||||||||||
Income from continuing operations | 4,153 | 6,214 | 8,330 | 9,519 | 9,018 | 826 | ||||||||||||||||||
Loss from discontinued operations | (76 | ) | — | — | — | — | — | |||||||||||||||||
Cumulative effect of accounting change, net | — | (1,139 | ) | (546 | ) | — | — | — | ||||||||||||||||
Net income | 4,220 | 4,815 | 6,613 | 8,909 | 8,082 | 740 | ||||||||||||||||||
Income from continuing operations per CPO(3) | 1.49 | 2.04 | 2.46 | 3.07 | 2.84 | — | ||||||||||||||||||
Net income per CPO(3) | 1.46 | 1.66 | 2.27 | 3.07 | 2.84 | — | ||||||||||||||||||
Weighted-average number of shares outstanding (in millions)(3)(4) | 352,421 | 345,206 | 341,158 | 339,776 | 333,653 | — | ||||||||||||||||||
Cash dividend per CPO(3) | 0.23 | 1.41 | 1.49 | 0.37 | 1.50 | — | ||||||||||||||||||
Shares outstanding (in millions, at year end)(4) | 218,840 | 341,638 | 339,941 | 337,782 | 329,960 | — | ||||||||||||||||||
(U.S. GAAP)(5) | ||||||||||||||||||||||||
Income Statement Data: | ||||||||||||||||||||||||
Net sales | Ps. | 27,652 | Ps. | 32,704 | Ps. | 35,068 | Ps. | 39,358 | Ps. | 41,562 | U.S.$ | 3,805 | ||||||||||||
Operating income | 7,089 | 8,746 | 10,806 | 14,068 | 14,322 | 1,311 | ||||||||||||||||||
Income from continuing operations | 3,498 | 4,696 | 7,368 | 8,308 | 8,233 | 754 | ||||||||||||||||||
Net income | 3,498 | 4,696 | 7,368 | 8,308 | 8,233 | 754 | ||||||||||||||||||
Income from continuing operations per CPO(3) | 1.21 | 1.61 | 2.44 | 2.76 | 2.86 | — | ||||||||||||||||||
Net income per CPO(3) | 1.21 | 1.61 | 2.44 | 2.76 | 2.86 | — | ||||||||||||||||||
Weighted-average number of Shares outstanding (in millions)(3)(4) | 352,421 | 345,206 | 341,158 | 339,776 | 333,653 | — | ||||||||||||||||||
Shares outstanding (in millions, at year end)(4) | 218,840 | 341,638 | 339,941 | 337,782 | 329,960 | — | ||||||||||||||||||
(Mexican GAAP/FRS) | ||||||||||||||||||||||||
Balance Sheet Data (end of year): | ||||||||||||||||||||||||
Cash and temporary investments | Ps. | 14,391 | Ps. | 18,566 | Ps. | 15,955 | Ps. | 16,405 | Ps. | 27,305 | U.S.$ | 2,500 | ||||||||||||
Total assets | 75,997 | 82,469 | 81,162 | 86,186 | 98,703 | 9,037 | ||||||||||||||||||
Current portion of long-term debt and other notes payable(6) | 335 | 3,678 | 367 | 1,023 | 489 | 45 | ||||||||||||||||||
Long-term debt, net of current portion(7) | 17,255 | 21,134 | 19,581 | 18,464 | 24,433 | 2,237 | ||||||||||||||||||
Customer deposits and advances | 16,434 | 17,073 | 19,484 | 17,807 | 19,810 | 1,814 | ||||||||||||||||||
Capital stock issued | 9,632 | 10,677 | 10,677 | 10,507 | 10,268 | 940 | ||||||||||||||||||
Total stockholders’ equity (including minority interest) | 32,302 | 30,796 | 32,242 | 38,015 | 40,650 | 3,722 | ||||||||||||||||||
(U.S. GAAP)(5) | ||||||||||||||||||||||||
Balance Sheet Data (end of year): | ||||||||||||||||||||||||
Cash and cash equivalents | Ps. | 11,667 | Ps. | 17,746 | Ps. | 15,833 | Ps. | 15,461 | Ps. | 25,480 | U.S.$ | 2,333 | ||||||||||||
Total assets | 79,407 | 91,877 | 88,724 | 91,806 | 103,809 | 9,504 | ||||||||||||||||||
Current portion of long-term debt and other notes payable(6) | 335 | 3,678 | 367 | 1,023 | 489 | 45 | ||||||||||||||||||
Long-term debt, net of current portion(7) | 17,255 | 21,134 | 19,582 | 18,464 | 24,433 | 2,237 | ||||||||||||||||||
Total stockholders’ equity (excluding minority interest) | 28,379 | 29,170 | 30,589 | 35,799 | 36,580 | 3,349 | ||||||||||||||||||
(Mexican GAAP/FRS) | ||||||||||||||||||||||||
Other Financial Information: | ||||||||||||||||||||||||
Capital expenditures(8) | Ps. | 1,249 | Ps. | 2,173 | Ps. | 2,849 | Ps. | 3,346 | Ps. | 3,878 | U.S.$ | 355 | ||||||||||||
(U.S. GAAP)(5) | ||||||||||||||||||||||||
Other Financial Information: | ||||||||||||||||||||||||
Cash provided by operating activities | 7,380 | 7,641 | 10,478 | 13,074 | 11,966 | 1,096 | ||||||||||||||||||
Cash used for financing activities | (3,110 | ) | (703 | ) | (9,412 | ) | (4,621 | ) | (1,254 | ) | (115 | ) | ||||||||||||
Cash used for investing activities | (2,550 | ) | (673 | ) | (2,392 | ) | (8,216 | ) | (294 | ) | (27 | ) | ||||||||||||
Other Data (unaudited): | ||||||||||||||||||||||||
Average prime time audience share (TV broadcasting)(9) | 70.1 | % | 68.9 | % | 68.5 | % | 69.5 | % | 69.0 | % | — | |||||||||||||
Average prime time rating (TV broadcasting)(9) | 38.1 | 36.7 | 36.5 | 35.5 | 33.4 | — | ||||||||||||||||||
Magazine circulation (millions of copies)(10) | 128 | 127 | 145 | 155 | 165 | — | ||||||||||||||||||
Number of employees (at year end) | 12,300 | 14,100 | 15,100 | 16,200 | 17,800 | — | ||||||||||||||||||
Number of Innova subscribers (in thousands at year end)(11) | 857 | 1,003 | 1,251 | 1,430 | 1,585 | — | ||||||||||||||||||
Number of Cablevisión RGUs (in thousands at year end)(12) | 373 | 381 | 475 | 583 | 695 | — | ||||||||||||||||||
Number of Esmas.com registered users (in thousands at year end)(13) | 3,085 | 3,665 | 4,212 | 4,447 | 4,500 | — |
(1) | Except per Certificado de Participación Ordinario, or CPO, ratio, average audience share, average rating, magazine circulation, employee, subscriber, Revenue Generating Units, or RGUs, and registered user data. Information in these footnotes is in thousands of Pesos in purchasing power as of December 31, 2007, unless otherwise indicated. | |
(2) | Includes interest expense, interest income, foreign exchange gain or loss, net, and gain or loss from monetary position. See Note 18 to our year-end financial statements. | |
(3) | For further analysis of income (loss) from continuing operations per CPO and net income per CPO (as well as corresponding amounts per A Share not traded as CPOs), see Note 20 (for the calculation under Mexican FRS) and Note 23 (for the calculation under U.S. GAAP) to our year-end financial statements. |
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(4) | As of December 31, 2004, 2005, 2006 and 2007, we had four classes of common stock: A Shares, B Shares, D Shares and L Shares. For purposes of this table, the weighted-average number of shares for the year ended December 31, 2003, and the number of shares outstanding as of December 31, 2003, have been adjusted to conform to the 2004, 2005, 2006 and 2007 presentation. 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, 2007, for legal purposes, there were approximately 2,461.2 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 amounts are first translated from Mexican Pesos into U.S. Dollars, and the resulting aggregate U.S. Dollar amount is then translated to Mexican Pesos at 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 Mexico. For further information regarding audience share and ratings information and IBOPE Mexico, see “Information on the Company — Business Overview— Television — Television Broadcasting”. | |
(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. |
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(11) | Innova, S. de R.L. de C.V., or Innova, our direct-to-home, or DTH, satellite service in Mexico, referred to alternatively as Sky for segment reporting purposes, commenced operations on December 15, 1996. The figures set forth in this line item represent the total number of gross active residential and commercial subscribers for Innova at the end of each year presented. 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”. Under Mexican FRS, effective January 1, 2001 and through March 31, 2004, we did not recognize equity in results in respect of our investment in Innova in our income statement, as we recognized equity in losses of Innova up to the amount of our initial investment and subsequent capital contributions in Innova. See “Operating and Financial Review and Prospects — Results of Operations — Equity in Earnings of Affiliates, Net”. Since April 1, 2004, Innova has been consolidated in our financial results. | |
(12) | 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 (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 given that this business provides other services in addition to pay-TV. See “Operating and Financial Review and Prospects — Results of Operations — Cable and Telecom” and “Information on the Company — Business Overview — Cable and Telecom”. | |
(13) | The results of operations of Esmas.com are included in the results of operations of our Other Businesses segment. See “Operating and Financial Review and Prospects — Results of Operations — Other Businesses”. For a description of Esmas.com, see “Information on the Company — Business Overview — Other Businesses — Televisa Digital”. The figures set forth in this line item represent the number of registered users in each year presented. The term “registered user” means a visitor that has completed a profile questionnaire that enables the visitor to use the e-mail service provided by Esmas.com. |
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Period | High | Low | Average(1) | Period End | ||||||||||||
2003 | 11.4063 | 10.1130 | 10.7950 | 11.2420 | ||||||||||||
2004 | 11.6350 | 10.8050 | 11.2897 | 11.1540 | ||||||||||||
2005 | 11.4110 | 10.4135 | 10.8938 | 10.6275 | ||||||||||||
2006 | 11.4600 | 10.4315 | 10.9048 | 10.7995 | ||||||||||||
2007 | 11.2692 | 10.6670 | 10.9277 | 10.9169 | ||||||||||||
2008: | ||||||||||||||||
January | 10.9730 | 10.8190 | 10.9057 | 10.8190 | ||||||||||||
February | 10.8236 | 10.6730 | 10.7679 | 10.7263 | ||||||||||||
March | 10.8490 | 10.6300 | 10.7328 | 10.6300 | ||||||||||||
April | 10.6005 | 10.4605 | 10.5244 | 10.5322 | ||||||||||||
May | 10.5701 | 10.3055 | 10.4381 | 10.3390 | ||||||||||||
June (through June 24) | 10.4365 | 10.2735 | 10.3352 | 10.2925 |
(1) | Annual average rates reflect the average of the daily exchange rate during the relevant period. |
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• | demand for advertising may decrease both because consumers may reduce expenditures for our advertisers’ products and because advertisers may reduce advertising expenditures; and | ||
• | demand for publications, cable television, DTH satellite services, pay-per-view programming, telecommunication services and other services and products may decrease because consumers may find it difficult to pay for these services and products. |
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• | inflation can adversely affect consumer purchasing power, thereby adversely affecting consumer and advertiser demand for our services and products; 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 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 Digital; | ||
• | 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; | ||
• | statements concerning our current and future plans regarding our gaming business; | ||
• | statements concerning our current and future plans regarding the introduction of fixed telephony service by 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 acquisition of Editorial Atlántida, S.A., or Editorial Atlántida; | ||
• | statements about our recent acquisition of shares of companies owning the majority of the assets of Bestel, S.A. de C.V., or Bestel; | ||
• | 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) | ||||||||||||||||
2005 | 2006 | 2007 | 2008 | |||||||||||||
(Actual) | (Actual) | (Actual) | (Forecast) | |||||||||||||
(Millions of U.S. Dollars) | ||||||||||||||||
Capital expenditures(2) | U.S.$ | 248.3 | U.S.$ | 298.5 | U.S.$ | 355.1 | U.S.$ | 360.0 | ||||||||
La Sexta(3) | 1.4 | 132.4 | 89.9 | 64.8 | ||||||||||||
Other acquisitions and investments(4)(5) | 68.0 | 437.7 | 416.2 | 112.0 | ||||||||||||
Total capital expenditures and investments | U.S.$ | 317.7 | U.S.$ | 868.6 | U.S.$ | 861.2 | U.S.$ | 536.8 | ||||||||
(1) | Amounts in respect of some of the capital expenditures, investments and acquisitions we made in 2005, 2006 and 2007 were paid for in Mexican Pesos. These Mexican Peso amounts were translated into U.S. Dollars at the Interbank Rate in effect on the dates on which a given capital expenditure, investment or acquisition was made. As a result, U.S. Dollar amounts presented in the table immediately above are not comparable to: (i) data regarding capital expenditures set forth in “Key Information — Selected Financial Data”, which is presented in constant Pesos of purchasing power as of December 31, 2007 and, in the case of data presented in U.S. Dollars, is translated at a rate of Ps.10.9222 to one U.S. Dollar, the Interbank Rate as of December 31, 2007, 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”. |
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(2) | Reflects capital expenditures for property, plant and equipment, as well as general capital expenditures, in all periods presented. Also includes U.S.$51.1 million in 2005, U.S.$75.9 million in 2006 and U.S.$78.7 million in 2007 for the expansion and improvement of our cable business; U.S.$109.2 million in 2005, U.S.$91.2 million in 2006 and U.S.$122.3 million in 2007 for the expansion and improvement of our Sky segment and U.S.$22.5 million in 2006 and U.S.$41.4 million in 2007 for our gaming business. | |
(3) | In 2005 and 2006 we made capital contributions related to our 40% interest in La Sexta in the amount of U.S.$1.4 and U.S.$132.4 million, respectively (€1.2 million and€104.6 million). During 2007, we made additional capital contributions of U.S.$89.9 million (€65.9 million). Our projected total investment in La Sexta for 2008 is U.S.$64.8 million (€44.4 million). | |
(4) | In November 2005, we acquired Comtelvi, S. de R.L. de C.V., or Comtelvi, from a third party for an aggregate amount of U.S.$39.1 million. At the time of acquisition, Comtelvi had structured note investments and other financial instrument assets and liabilities, as well as tax losses of Ps.3,575.3 million that were used by us in the fourth quarter of 2005. See Note 2 to our year-end financial statements. | |
(5) | In the first quarter of 2006, we completed the acquisition of certain operating assets, consisting primarily of trademarks, intellectual property rights and other publishing assets owned by Editora Cinco, S.A., or Editora Cinco, a publishing company in Mexico and Latin America, for an aggregate amount of U.S.$15.0 million. In the second quarter of 2006, we acquired part of the minority interest in Innova that was formerly owned by Liberty Media International, Inc., or Liberty Media, for an amount of U.S.$58.7 million to increase the interest in our Sky business to 58.7%. In the fourth quarter of 2006, we invested U.S.$258.0 million in long-term notes convertible into 99.99% of the equity of Alvafig, the holding company of a 49% interest in Cablemás, a large cable operator in Mexico. 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 the first quarter of 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. In 2008, we project to make additional capital contributions in Volaris, our 25% interest in a low-cost carrier airline in Mexico, in the amount of up to U.S.$12.0 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 the 2006 FIFA World Cup, the Spanish Soccer League and a variety of Mexican Soccer League games, reality shows and other programs produced by us, or with respect to which we have exclusive rights; | ||
• | capitalizing on our relationship with DIRECTV and local operators in terms of technology, distribution networks, infrastructure and cross-promotional opportunities; | ||
• | capitalizing on the low penetration of pay-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; |
• | upgrading 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 | 124 | 2 | — | 1 | 128 | ||||||||||||||||||
Channel 4 | 1 | — | — | — | — | 1 | ||||||||||||||||||
Channel 5 | 1 | 61 | — | — | 4 | 66 | ||||||||||||||||||
Channel 9 | 1 | 14 | — | — | 14 | 29 | ||||||||||||||||||
Subtotal | 4 | 199 | 2 | — | 19 | 224 | ||||||||||||||||||
Border Stations | — | 1 | — | — | — | 1 | ||||||||||||||||||
Local (Stations) Affiliates | — | 18 | — | 1 | 14 | 33 | ||||||||||||||||||
Total | 4 | 218 | 2 | 1 | 33 | 258 | ||||||||||||||||||
January 2005 — December 2007(1)
(1) | Source: IBOPE Mexico national surveys. |
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January 2005 — December 2007(1)
(1) | Source: IBOPE Mexico national surveys. |
Year Ended December 31, | ||||||||||||
2005(1) | 2006(1) | 2007(1) | ||||||||||
Prime time hours | 31.8 | % | 32.8 | % | 29.9 | % | ||||||
Weekday prime time hours | 36.2 | % | 37.3 | % | 33.6 | % | ||||||
Sign-on to sign-off hours | 30.3 | % | 31.8 | % | 29.7 | % |
(1) | Source: IBOPE Mexico national surveys. |
Year Ended December 31, | ||||||||||||
2005(1) | 2006(1) | 2007(1) | ||||||||||
Prime time hours | 17.4 | % | 16.9 | % | 18.7 | % | ||||||
Weekday prime time hours | 15.9 | % | 14.9 | % | 16.6 | % | ||||||
Sign-on to sign-off hours | 20.1 | % | 19.1 | % | 20.6 | % |
(1) | Source: IBOPE Mexico national surveys. |
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Year Ended December 31, | ||||||||||||
2005(1) | 2006(1) | 2007(1) | ||||||||||
Prime time hours | 6.0 | % | 6.1 | % | 7.3 | % | ||||||
Weekday prime time hours | 6.3 | % | 6.5 | % | 8.1 | % | ||||||
Sign-on to sign-off hours | 7.6 | % | 7.5 | % | 8.6 | % |
(1) | Source: IBOPE Mexico national surveys. |
Year Ended December 31, | ||||||||||||
2005(1) | 2006(1) | 2007(1) | ||||||||||
Prime time hours | 13.4 | % | 13.7 | % | 13.1 | % | ||||||
Weekday prime time hours | 10.6 | % | 11.4 | % | 10.7 | % | ||||||
Sign-on to sign-off hours | 12.2 | % | 12.6 | % | 12.1 | % |
(1) | Source: IBOPE Mexico national surveys. |
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• | enhanced programming services, including video games; 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 and DIRECTV Mexico entered into a letter agreement which provided for cash payments to be made by Innova or DIRECTV Mexico based on the number of subscribers successfully migrating to Innova, the applicable sign-up fees for migrating subscribers, or certain migrated subscribers churning shortly after migration, among other specified payments under the agreement; |
• | Innova, Innova Holdings and News Corp. entered into an option agreement, pursuant to which News Corp. was granted options to acquire up to a 15% equity interest in each of Innova and Innova Holdings, dependent upon the number of subscribers successfully migrating to Innova, in exchange for the two promissory notes referred above that were delivered to DIRECTV Mexico; |
• | DIRECTV and News Corp. entered into a purchase agreement pursuant to which DIRECTV acquired (i) the right (which DIRECTV concurrently assigned to DTVLA) to purchase from News Corp. the options granted to News Corp. by Innova and Innova Holdings to purchase up to an additional 15% of the outstanding equity of each of such entities pursuant to the option agreement described above and (ii) the right to acquire News Corp.’s 30% interest in Innova and Innova Holdings; |
• | DIRECTV and Liberty Media, 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; |
• | pursuant to the DTH agreement we entered into with News Corp., Innova, DIRECTV and DTVLA, with respect to certain DTH platforms owned or operated by News Corp. or DIRECTV or their affiliates and subject to certain restrictions, we have the right to require carriage of five of our channels on any such platform serving Latin America (including Puerto Rico but excluding Mexico, Brazil and countries in Central America), two of our channels on any such platform serving the United States or Canada, and one of our channels on any such platform serving areas other than the United States and Latin America; |
• | we, News Corp., Innova, DIRECTV and DTVLA entered into a DTH agreement that, among other things, governs the rights of the parties with respect to DTVLA’s announced shutdown of its Mexican DTH business, planned shutdown of its existing DTH business in certain countries in Central America, the carriage of certain of our programming channels by Innova and other DTH platforms of DIRECTV, DTVLA, News Corp. and their respective affiliates, and the waiver and potential release of certain claims between certain of the parties; and |
• | we and Innova entered into a channel licensing agreement pursuant to which Innova will pay us a royalty fee to carry our over-the-air channels on its DTH service. |
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• | we entered into a purchase and sale agreement with DIRECTV, pursuant to which, among other things, (i) DIRECTV acquired all of our direct equity interests in ServiceCo, (ii) DIRECTV agreed to purchase all of our indirect equity interests in MCOP and (iii) DIRECTV has agreed to indemnify us for any and all losses arising out of our status as a partner in MCOP; |
• | DIRECTV also agreed to purchase each of News Corp.’s, Liberty Media’s and Globopar’s equity interests in TechCo (a U.S. partnership formed to provide technical services from a main uplink facility in Miami Lakes, Florida and a redundancy site in Port St. Lucie, Florida), ServiceCo and MCOP; and |
• | PanAmSat Corporation (now Intelsat Corporation) unconditionally released us from any and all obligations related to the MCOP transponder lease. |
• | DIRECTV Holdings exercised its right to acquire News Corp.’s 30% interest in Innova and DTVLA exercised the right to purchase the options granted to News Corp. by Innova and Innova Holdings to purchase up to an additional 12% of the outstanding equity of each of such entities pursuant to the previously disclosed option agreement; |
• | DTVLA exercised an option to purchase 12% of Innova and Innova Holdings which was based on the number of subscribers successfully migrating to Innova, by delivering to Innova and Innova Holdings the two promissory notes issued in connection with Innova’s purchase of DIRECTV Mexico’s subscriber list for cancellation in October 2004; |
• | DIRECTV Mexico made cash payments to Innova totaling approximately 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. |
• | 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; |
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• | transfer or encumbrance, in whole or in part, of the concession, the rights arising therefrom, the broadcasting equipment or any assets dedicated to the concessionaire’s activities, to a foreign government, company or individual, or the admission of any such person as a partner in the concessionaire’s business; |
• | failure to broadcast for more than 60 days without reasonable justification; |
• | any amendment to the bylaws of the concessionaire that is in violation of applicable Mexican law; and |
• | any breach to the terms of the concession title. |
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• | unauthorized interruption or termination of service; |
• | interference by the concessionaire with services provided by other operators; |
• | noncompliance with the terms and conditions of the public telecommunications concession; |
• | the concessionaire’s refusal to interconnect with other operators; |
• | loss of the concessionaire’s Mexican nationality; |
• | unauthorized assignment, transfer or encumbrance, in whole or in part, of the concession or any rights or assets; |
• | the liquidation or bankruptcy of the concessionaire; and |
• | ownership or control of the capital stock of the concessionaire by a foreign government. |
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• | the failure to use the concession within 180 days after it was granted; |
• | a declaration of bankruptcy of the concessionaire; |
• | failure to comply with the obligations or conditions specified in the concession; |
• | unlawful assignments of, or encumbrances on, the concession; or |
• | failure to pay to the government the required fees. |
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• | Raising the thresholds to make a concentration a reportable transaction. |
• | Empowering the Mexican Antitrust Commission to issue a waiting order before a reported transaction may be closed, if such order is issued within ten business days from the date the transaction is reported to the Antitrust Commission. |
• | Requiring the Mexican Antitrust Commission to rule upon a reported transaction that the filing party deems that it does not notoriously restrain competition (attaching the necessary evidence), within 15 business days from the filing date. |
• | An overreaching authority to determine whether competition, effective competition, market power and competition conditions in a specific market exist or not, either such determination is required under the antitrust law or if required under any other statute that requires a determination of market conditions. |
• | To issue binding opinions in competition matters whether required by specific statutes, 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) | 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 Mas, S.A. de C.V.(3)(7) )(8) | Mexico | 100.0 | % | |||||
Sky DTH, S. de R.L. de C.V.(7) | Mexico | 100.0 | % | |||||
Innova, S. de R.L. de C.V. (Innova)(9) | Mexico | 58.7 | % | |||||
Grupo Distribuidoras Intermex, S.A. de C.V.(3)(10) | Mexico | 100.0 | % | |||||
Paxia, S.A. de C.V.(3)(11) | Mexico | 100.0 | % | |||||
Sistema Radiópolis, S.A. de C.V.(2)(3)(12) | Mexico | 50.0 | % | |||||
Telesistema Mexicano, S.A. de C.V.(13) | Mexico | 100.0 | % | |||||
G-Televisa-D, S.A. de C.V.(14) | Mexico | 100.0 | % | |||||
Televisa, S.A. de C.V.(15) | Mexico | 100.0 | % | |||||
Televisa Juegos, S.A. de C.V.(2)(3)(16) | Mexico | 100.0 | % | |||||
Televisión Independiente de México, S.A. de C.V.(3)(13) | Mexico | 100.0 | % |
(1) | Percentage of equity owned by us directly or indirectly through subsidiaries or affiliates. | |
(2) | One of four 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. |
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(4) | Subsidiary through which we own equity interests in and conduct the operations of our Cable and Telecom segment. | |
(5) | Indirect subsidiary 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 two 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) | Direct subsidiary through which we maintain 99.99% of the capital stock of Alvafig, a holding company with an interest of 49% in Cablemás, a large cable operator in Mexico. | |
(12) | Direct subsidiary through which we conduct the operations of our Radio business. | |
(13) | One of two direct subsidiaries through which we conduct the operations of our Television Broadcasting, Pay Television Networks and Programming Exports segments. | |
(14) | Indirect subsidiary through which we conduct certain operations of our Television Broadcasting segment. | |
(15) | Indirect subsidiary through which we conduct the operations of our Television Broadcasting, Pay Television Networks and Programming Exports segments. | |
(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 | Buenos Aires, Argentina(1) | |||||
4 | Madrid, Spain(2) | |||||
San Diego, California(1) Zug, Switzerland(1) | ||||||
Publishing activities | ||||||
Owned properties | 8 | Miami, Florida(1) | ||||
Santiago, Chile(1) | ||||||
Quito, Ecuador(1) | ||||||
Guayaguil, Ecuador(1) | ||||||
Cali, Colombia(1) | ||||||
Alicate, Colombia(1) | ||||||
Buenos Aires, Argentina(2) | ||||||
Leased properties | 10 | Beverly Hills, California(1) | ||||
Miami, Florida(1) | ||||||
New York, New York(1) | ||||||
Medellín, Colombia(1) | ||||||
Bogota, Colombia(3) | ||||||
Quito, Ecuador(1) | ||||||
Caracas, Venezuela(1) | ||||||
San Juan, Puerto Rico(1) | ||||||
Publishing distribution and other activities | ||||||
Owned properties | 2 | Lima, Peru(1) | ||||
Guayaquil, Ecuador(1) | ||||||
Leased properties | 80 | Quito, Ecuador(2) | ||||
Guayaquil, Ecuador(1) | ||||||
Buenos Aires, Argentina(1) | ||||||
Panamá, Panamá(2) | ||||||
Santiago, Chile (45) | ||||||
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(1) | ||||||
DTH | ||||||
Leased properties | 1 | San José, Costa Rica(1) | ||||
Telephony | ||||||
Leased properties | 6 | San Antonio, Texas(3) | ||||
Dallas, Texas(1) | ||||||
Laredo, Texas(1) | ||||||
McAllen, Texas(1) |
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Year Ended December 31,(1) | ||||||||||||
2005 | 2006 | 2007 | ||||||||||
Operating Segment Net Sales | ||||||||||||
Television Broadcasting | 55.4 | % | 53.8 | % | 49.7 | % | ||||||
Pay Television Networks | 3.3 | 3.4 | 4.3 | |||||||||
Programming Exports | 5.6 | 5.4 | 5.3 | |||||||||
Publishing | 7.5 | 7.4 | 7.8 | |||||||||
Publishing Distribution | 1.2 | 1.1 | 1.1 | |||||||||
Sky | 17.9 | 19.1 | 19.7 | |||||||||
Cable and Telecom | 4.2 | 5.1 | 6.1 | |||||||||
Other Businesses | 4.9 | 4.7 | 6.0 | |||||||||
Total Segment Net Sales | 100.0 | % | 100.0 | % | 100.0 | % | ||||||
Intersegment Operations | (3.1 | ) | (2.8 | ) | (2.6 | ) | ||||||
Total Consolidated Net Sales | 96.9 | % | 97.2 | % | 97.4 | % | ||||||
Total Net Sales | ||||||||||||
Cost of Sales(2) | 45.4 | % | 42.7 | % | 43.6 | % | ||||||
Selling Expenses(2) | 8.2 | 7.9 | 7.9 | |||||||||
Administrative Expenses(2) | 5.7 | 6.1 | 5.9 | |||||||||
Depreciation and Amortization | 7.4 | 7.1 | 7.8 | |||||||||
Consolidated Operating Income | 33.3 | 36.2 | 34.8 | |||||||||
Total | 100.0 | % | 100.0 | % | 100.0 | % | ||||||
(1) | Certain segment data set forth in these tables may vary from certain data set forth in our year-end consolidated financial statements due to differences in rounding. The segment net sales and total segment net sales data set forth in this annual report reflect sales from intersegment operations in all periods presented. See Note 22 to our year-end financial statements. | |
(2) | Excluding depreciation and amortization. |
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Year Ended December 31,(1) | ||||||||||||
2005 | 2006 | 2007 | ||||||||||
(Millions of Pesos in purchasing power as of December 31, 2007) | ||||||||||||
Operating Segment Net Sales | ||||||||||||
Television Broadcasting | Ps. | 20,049.8 | Ps. | 21,760.4 | Ps. | 21,213.2 | ||||||
Pay Television Networks | 1,199.7 | 1,379.0 | 1,852.0 | |||||||||
Programming Exports | 2,025.3 | 2,190.3 | 2,262.1 | |||||||||
Publishing | 2,705.1 | 2,993.9 | 3,311.9 | |||||||||
Publishing Distribution | 434.2 | 449.8 | 479.2 | |||||||||
Sky | 6,463.3 | 7,732.9 | 8,402.2 | |||||||||
Cable and Telecom | 1,517.1 | 2,059.4 | 2,611.6 | |||||||||
Other Businesses | 1,801.9 | 1,922.3 | 2,560.4 | |||||||||
Total Segment Net Sales | 36,196.4 | 40,488.0 | 42,692.6 | |||||||||
Intersegment Operations | (1,128.4 | ) | (1,130.3 | ) | (1,131.1 | ) | ||||||
Total Consolidated Net Sales | Ps. | 35,068.0 | Ps. | 39,357.7 | Ps. | 41,561.5 | ||||||
Operating Segment Income (Loss) | ||||||||||||
Television Broadcasting | Ps. | 9,557.6 | Ps. | 10,996.3 | Ps. | 10,518.1 | ||||||
Pay Television Networks | 559.4 | 707.9 | 1,150.2 | |||||||||
Programming Exports | 721.9 | 902.0 | 1,032.0 | |||||||||
Publishing | 518.4 | 576.7 | 624.4 | |||||||||
Publishing Distribution | 7.1 | 18.7 | 28.5 | |||||||||
Sky | 2,717.2 | 3,689.1 | 4,037.9 | |||||||||
Cable and Telecom | 528.6 | 847.5 | 947.2 | |||||||||
Other Businesses | (138.4 | ) | (224.9 | ) | (266.0 | ) | ||||||
Total Operating Segment Income(2) | 14,471.8 | 17,513.3 | 18,072.3 | |||||||||
Corporate Expenses(2) | (197.0 | ) | (467.8 | ) | (368.3 | ) | ||||||
Depreciation and Amortization | (2,611.6 | ) | (2,779.8 | ) | (3,223.1 | ) | ||||||
Total Consolidated Operating Income(3) | Ps. | 11,663.2 | Ps. | 14,265.7 | Ps. | 14,480.9 | ||||||
(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 operating segment income (loss), and total operating segment income data set forth in this annual report do not reflect corporate expenses or 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, 2006
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• | interest expense, including the restatement of our UDI denominated notes in 2006; |
• | 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. |
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• | a Ps.65.3 million increase in other expense, net; |
• | a Ps.124.5 million increase in equity in earnings of affiliates, net; |
• | a Ps.1,257.1 million increase in income taxes; and |
• | a Ps.325.5 million increase in minority interest net income. |
• | a Ps.215.2 million increase in operating income; and |
• | a Ps.730.8 million decrease in integral cost of financing, net. |
Compared to the Year Ended December 31, 2005
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• | a Ps.2,602.5 million increase in operating income; |
• | a Ps.782.9 million decrease in integral cost of financing, net; |
• | a Ps.546.4 million decrease in cumulative loss of accounting change; and |
• | a Ps.560.0 million decrease in minority interest. |
• | a Ps.117.2 million increase in other expense, net; |
• | a Ps.1,281.4 million increase in income taxes; and |
• | a Ps.797.7 million decrease in equity in results of affiliates, net. |
• | 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, | ||||||||||||
2005 | 2006 | 2007 | ||||||||||
Devaluation (appreciation) of the Peso as compared to the U.S. Dollar(1) | (4.7 | )% | 1.7 | % | 1.1 | % | ||||||
Mexican inflation rate(2) | 3.3 | 4.1 | 3.8 | |||||||||
U.S. inflation rate | 3.4 | 2.5 | 4.1 | |||||||||
Increase in Mexican GDP(3) | 3.1 | 4.9 | 3.2 |
(1) | Based on changes in the Interbank Rates, as reported by Banamex, at the end of each period, which were as follows: Ps.10.6265 per U.S. Dollar as of December 31, 2005; Ps.10.8025 per U.S. Dollar as of December 31, 2006; and Ps.10.9222 per U.S. Dollar as of December 31, 2007. | |
(2) | Based on changes in the NCPI from the previous period, as reported by the Mexican Central Bank, which were as follows: 116.3 in 2005; 121.0 in 2006; and 125.6 in 2007. | |
(3) | As reported by theInstituto Nacional de Estadística, Geografía e Informática, or INEGI, and, in the case of GDP information for 2007, as estimated by INEGI. |
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• | Advertising and Other Revenues.Inflation in Mexico adversely affects consumers. As a result, our advertising customers may purchase less advertising, which would reduce our advertising revenues, and consumers may reduce expenditures for our other products and services, including pay television services. |
• | U.S. Dollar-denominated Revenues and Operating Costs and Expenses.We have substantial operating costs and expenses denominated in U.S. Dollars. These costs are principally due to our activities in the United States, the costs of foreign-produced programming and publishing supplies and the leasing of satellite transponders. The following table sets forth our U.S. Dollar-denominated revenues and operating costs and expenses for 2005, 2006 and 2007: |
Year Ended December 31, | ||||||||||||
2005 | 2006 | 2007 | ||||||||||
(Millions of U.S. Dollars) | ||||||||||||
Revenues | U.S.$385 | U.S.$470 | U.S.$570 | |||||||||
Operating costs and expenses | 393 | 529 | 615 |
• | 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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• | 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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• | a Ps.3,014.5 million increase in operating income; |
• | a Ps.861.7 million decrease in income and asset taxes; and |
• | a Ps.780.9 million decrease in integral cost of financing, which was due primarily to a decrease in foreign exchange loss and interest expense. |
• | a Ps.2,412.6 million increase in operating income; and |
• | a Ps.96.6 million decrease in other expense, net. |
• | a Ps.1,050.9 million increase in income and asset taxes; and |
• | a Ps.216.0 million increase in integral cost of financing, which was due primarily to an increase in foreign exchange loss. |
• | make aggregate expenditures for property, plant and equipment of approximately U.S.$360.0 million, which amount includes capital expenditures in the amount of approximately U.S.$85.0 million, U.S.$120.0 million and U.S.$50.0 million for the expansion and improvements of our Cable and Telecom, Sky and gaming segments, respectively; |
• | make investments related to our 40% interest in La Sexta for an aggregate amount of €44.4 million (U.S.$64.8 million); |
• | make an additional investment of U.S.$100.0 million in Alvafig to increase its interest in the capital stock of Cablemás; and |
• | make additional capital contributions in Volaris, our 25% interest in a low-cost carrier airline in Mexico for up to U.S.$12.0 million. |
• | made aggregate capital expenditures totaling U.S.$355.1 million, including U.S.$78.7 million for our Cable and Telecom segment, U.S.$122.3 million for Sky, U.S.$41.4 million for gaming, and U.S.$112.7 million in our Television Broadcasting and Other Business segments; |
• | made investments related to our 40% interest in La Sexta for an aggregate amount of €65.9 million (U.S.$89.9 million); |
• | acquired Editorial Atlántida, a leading publishing company in Argentina, for approximately U.S.$78.8 million; and |
• | acquired in December 2007 shares of companies that hold the majority of the assets of Bestel, a privately held, facilities-based telecommunications company in Mexico by our indirect majority-owned subsidiary, Cablestar for U.S.$256.0 million in cash plus an additional capital contribution of U.S.$69.0 million. |
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• | made aggregate capital expenditures totaling U.S.$298.5 million, including U.S.$75.9 million for our cable television segment, U.S.$91.2 million for Sky, U.S.$22.5 million for gaming, and U.S.$108.9 million in our Television Broadcasting and Other Business segments; |
• | made investments related to our 40% interest in La Sexta for an aggregate amount of U.S.$132.4 million (€104.6 million), and capital contributions of U.S.$7.5 million in Volaris related to our 25% interest in this venture; |
• | acquired a 50% interest in TVI, a cable television company in Mexico, in the amount of Ps.798.3 million, which was substantially paid in cash, and provided funding to TVI in the form of a loan in the nominal amount of Ps. 240.6 million; and |
�� | invested U.S.$258.0 million in long-term notes convertible, at our option, into 99.99% of the equity of Alvafig, which held, at such time, 49% of the equity of Cablemás, a large cable operator in Mexico, with a coupon rate of 8% in the first year and 10% in the four remaining years. |
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Debt Outstanding(1) | ||||||||||||||
December 31, | ||||||||||||||
2007 | Interest | Maturity | ||||||||||||
Description of Debt | Actual | Rate(2) | Denomination | of Debt | ||||||||||
Long-term debt | ||||||||||||||
8% Senior Notes(2)(3) | 785.8 | 8.0 | % | U.S. Dollars | 2011 | |||||||||
8.5% Senior Notes(2) | 3,276.7 | 8.5 | % | U.S. Dollars | 2032 | |||||||||
6.625% Senior Notes(2)(3) | 6,553.3 | 6.625 | % | U.S. Dollars | 2025 | |||||||||
8.49% Senior Notes(7) | 4,500.0 | 8.490 | % | Pesos | 2037 | |||||||||
Innova’s 9.375% Senior Notes(4)(8) | 122.9 | 9.375 | % | U.S. Dollars | 2013 | |||||||||
Banamex loan due 2009(8) | 1,162.5 | 9.70 | % | Pesos | 2009 | |||||||||
Banamex loan due 2010 and 2012(8) | 2,000.0 | 10.35 | % | Pesos | 2010 and 2012 | |||||||||
JPMorgan Chase Bank, N.A. loan(5) | 2,457.4 | 5.330 | % | U.S. Dollars | 2012 | |||||||||
Santander Serfin loan(4)(8) | 1,400.0 | 8.98 | % | Pesos | 2016 | |||||||||
Banamex loan due 2008(8) | 480.0 | 8.925 | % | Pesos | 2008 | |||||||||
Banamex loan due 2016(4)(8) | 2,100.0 | 8.74 | % | Pesos | 2016 | |||||||||
Other debt(6) | 83.4 | 4.95 | % | Various | 2008-2022 | |||||||||
Total debt (including current maturities) | 24,922.0 | — | — | 15.2 years | (9) | |||||||||
Less: current maturities | 488.6 | — | Various | December 2008 | ||||||||||
Total long-term debt | 24,433.4 | |||||||||||||
(1) | U.S. Dollar-denominated debt is translated into Pesos at an exchange rate of Ps.10.9222 per U.S. Dollar, the Interbank Rate, as reported by Banamex, as of December 31, 2007. | |
(2) | These Senior Notes are unsecured obligations of the Company, rank equally in right of payment with all existing and future unsecured and unsubordinated indebtedness of the Company, and are junior in right of payment to all of the existing and future liabilities of the Company’s subsidiaries. Interest on the Senior Notes due 2011, 2025, 2032 and 2037, including additional amounts payable in respect of certain Mexican withholding taxes, is 8.41%, 6.97%, 8.94% and 8.93% per annum, respectively, and is payable semi-annually. These Senior Notes may not be redeemed prior to maturity, except in the event of certain changes in law affecting the Mexican withholding tax treatment of certain payments on the securities, in which case the securities will be redeemable, as a whole but not in part, at the option of the Company. The Senior Notes due 2011 and 2032 were priced at 98.793% and 99.431%, respectively, for a yield to maturity of 8.179% and 8.553%, respectively. The indenture governing these Senior Notes contains covenants that limit the ability of the Company and certain restricted subsidiaries engaged in Television Broadcasting, Pay Television Networks and Programming Exports, to incur or assume liens, perform sale and leaseback transactions, and consummate certain mergers, consolidations and similar transactions. Substantially all of these Senior Notes are registered with the SEC. | |
(3) | In March and May 2005, the Company issued these Senior Notes in the aggregate amount of U.S.$400.0 million and U.S.$200.0 million, respectively, which were priced at 98.081% and 98.632%, respectively, for a yield to maturity of 6.802% and 6.787%, respectively. The net proceeds of the U.S.$400.0 million issuance, together with cash on hand, were used to fund the Company’s tender offers made for any or all of the Senior Notes due 2011 and the UDI-denominated Notes due 2007, and prepay a portion of the outstanding principal amount of these securities in the amount of U.S.$222.0 million and Ps.3,045,427 (nominal Ps.2,935,097), respectively. The net proceeds of the U.S.$200.0 million issuance were used for corporate purposes, including the prepayment of some of the Company’s outstanding indebtedness. | |
(4) | These Senior Notes are unsecured and unsubordinated obligations of Sky. Interest on these Senior Notes, including additional amounts payable in respect of certain Mexican withholding taxes, is 9.8580%, and is payable semi-annually. Sky may, at its own option, redeem these Senior Notes, in whole or in part, at any time on or after September 19, 2008 at redemption prices from 104.6875% to 101.5625% between September 19, 2008 through September 18, 2011, or 100% commencing on September 19, 2011, plus accrued and unpaid interest, if any. In March and April 2006, Sky entered into two 10-year loans with Mexican banks in the aggregate principal amount of Ps.3,500,000 to fund, together with cash on hand, a tender offer and consent solicitation made for any or all of the Senior Notes due 2013, and prepaid a principal amount of U.S.$288.7 million or 96.2% of these securities. The total aggregate amount paid by Sky in connection with this tender offer was U.S.$324.3 million, which included related consents and accrued and unpaid interest. The 10-year Sky indebtedness is guaranteed by the Company and includes a nominal 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% for the first three years, and the Mexican interbank interest rate of “TIIE” plus 24 basis points for the remaining seven years. Interest on these two 10-year loans is payable on a monthly basis. |
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(5) | In December 2007, Cablevisión entered into a 5-year term loan facility in the aggregate principal amount of U.S.$225.0 million in connection with the financing for the acquisition of Letseb and Bestel USA, Inc. This loan is intended to be syndicated during the life of the facility. Annual interest on this loan facility is payable on a quarterly basis at LIBOR plus an applicable margin that may range from 0.375% to 0.625% depending on a leverage ratio. Under the terms of the loan facility, Cablevisión and 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. | |
(6) | Includes notes payable to banks, bearing annual interest rates in a range of 0.11 to 1.25 points above LIBOR. The maturities of these notes are between 2008 and 2022. | |
(7) | In May 2007, the Company issued these Senior Notes in the aggregate principal amount of Ps.4,500,000. The net proceeds from this issuance were used to replenish the Company’s cash position following the payment, with cash on hand, of Ps.992,900 of our outstanding 8.15% UDI-denominated Notes that matured in April 2007 and for the repurchase of the Company’s shares. The Company used the remaining net proceeds from this issuance for general corporate purposes, including the repayment of other outstanding indebtedness and the continued repurchase of the Company’s shares, subject to market conditions and other factors. The Company may, at its own option, redeem these Senior Notes, in whole or in part, at any time at a redemption price equal to the greater of the principal amount of the 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 Mexican Government Bonds. | |
(8) | Includes in 2006 and 2007, outstanding balances of long-term loans in the principal amount of Ps.480,000, Ps.1,162,460 and Ps.2,000,000, in connection with certain credit agreements entered into by the Company with a Mexican bank, with various maturities through 2012. Interest on these loans ranges from 8.925% to 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. The balance in 2006 and 2007 also includes the Sky long-term loans discussed in paragraph (3) above in the aggregate principal amount of Ps.3,500,000. | |
(9) | Actual weighted average maturity of long-term debt as of December 31, 2007. |
Year Ended December 31,(1)(2) | ||||||||||||
2005 | 2006 | 2007 | ||||||||||
Interest payable in U.S. Dollars | U.S.$ | 118.0 | U.S.$ | 95.6 | U.S.$ | 87.2 | ||||||
Amounts currently payable under Mexican withholding taxes(3) | 6.3 | 4.2 | 3.7 | |||||||||
Total interest payable in U.S. Dollars | U.S.$ | 124.3 | U.S.$ | 99.8 | U.S.$ | 90.9 | ||||||
Peso equivalent of interest payable in U.S. Dollars | Ps. | 1,487.5 | Ps. | 1,156.4 | Ps. | 1,014.4 | ||||||
Interest payable in Pesos | 782.7 | 812.7 | 1,149.6 | |||||||||
Restatement of UDI-denominated Notes Due 2007 | 34.3 | 41.3 | 13.0 | |||||||||
Total interest expense(4) | Ps. | 2,304.5 | Ps. | 2,010.4 | Ps. | 2,177.0 | ||||||
(1) | U.S. Dollars are translated into Pesos at the rate prevailing when interest was recognized as an expense for each period and restated to Pesos in purchasing power as of December 31, 2007. | |
(2) | Interest expense in these periods includes amounts effectively payable in U.S. Dollars as a result of U.S. Dollar-Peso swaps. | |
(3) | See “Additional Information — Taxation — Federal Mexican Taxation”. | |
(4) | Total interest expense amounts in these periods exclude capitalized and hedged interest expense. |
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Payments Due by Period | ||||||||||||||||||||
Less Than | ||||||||||||||||||||
12 Months | 12-36 Months | 36-60 Months | After | |||||||||||||||||
January 1, | January 1, | January 1, | 60 Months | |||||||||||||||||
2008 to | 2009 to | 2011 to | Subsequent to | |||||||||||||||||
December 31, | December 31, | December 31, | December 31, | |||||||||||||||||
Total | 2008 | 2010 | 2012 | 2012 | ||||||||||||||||
(Thousands of U.S. Dollars) | ||||||||||||||||||||
8% Senior Notes due 2011 | U.S.$ | 71,951 | U.S.$ | — | U.S.$ | — | U.S.$ | 71,951 | U.S.$ | — | ||||||||||
8.5% Senior Notes due 2032 | 300,000 | 300,000 | ||||||||||||||||||
6.625% Senior Notes due 2025 | 600,000 | 600,000 | ||||||||||||||||||
8.49% Senior Notes due 2037 | 412,005 | 412,005 | ||||||||||||||||||
Innova’s 9.375% Senior Notes due 2013 | 11,251 | 11,251 | ||||||||||||||||||
Banamex loan due 2008 | 43,947 | 43,947 | ||||||||||||||||||
Banamex loan due 2009 | 106,431 | 106,431 | ||||||||||||||||||
Banamex loan due 2010 and 2012 | 183,114 | 91,557 | 91,557 | |||||||||||||||||
JPMorgan Chase Bank, N.A. loan due 2012 | 225,000 | 225,000 | ||||||||||||||||||
Banamex loan due 2016 | 192,269 | 192,269 | ||||||||||||||||||
Santander Serfin loan due 2016 | 128,179 | 128,179 | ||||||||||||||||||
Other debt | 7,631 | 792 | 3,622 | 296 | 2,921 | |||||||||||||||
Long-term debt | 2,281,778 | 44,739 | 201,610 | 388,804 | 1,646,625 | |||||||||||||||
Satellite transponder obligation | 103,718 | 8,944 | 21,275 | 26,747 | 46,752 | |||||||||||||||
Transmission rights(1) | 259,146 | 81,222 | 67,443 | 75,902 | 34,579 | |||||||||||||||
Total contractual obligations | U.S.$ | 2,644,642 | U.S.$ | 134,905 | U.S.$ | 290,328 | U.S.$ | 491,453 | U.S.$ | 1,727,956 | ||||||||||
(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 | |||||||||||||||||
2008 to | 2009 to | 2011 to | Subsequent to | |||||||||||||||||
December 31, | December 31, | December 31, | December 31, | |||||||||||||||||
Total | 2008 | 2010 | 2012 | 2012 | ||||||||||||||||
(Thousands of U.S. Dollars) | ||||||||||||||||||||
Satellite transponder commitments(1) | U.S.$ | 50,075 | U.S.$ | 14,665 | U.S.$ | 16,944 | U.S.$ | 9,480 | U.S.$ | 8,986 | ||||||||||
Agreement with Intelsat Corporation(2) | 138,600 | — | 138,600 | — | — | |||||||||||||||
Capital expenditures commitments(3) | 15,900 | 15,900 | — | — | — | |||||||||||||||
Lease commitments(4) | 61,609 | 15,954 | 25,516 | 9,087 | 11,052 | |||||||||||||||
Other(5) | 64,773 | 64,773 | — | — | — | |||||||||||||||
Total contractual obligations | U.S.$ | 330,957 | U.S.$ | 111,292 | U.S.$ | 181,060 | U.S.$ | 18,567 | U.S.$ | 20,038 | ||||||||||
(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 in the fourth quarter of 2009. See Note 11 to our year-end financial statements. | |
(3) | Our commitments for capital expenditures include U.S.$7,640, 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 2046. See Note 11 to our year-end financial statements. | |
(5) | We have commitments of capital contributions in 2008 related to our 40% equity interest in La Sexta in the aggregate amount of €44.4 million (U.S.$64,773). |
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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 President of the Executive Committee of Grupo Televisa | Member of the Board of Banco Nacional de México, S.A., former Member of the Board of Teléfonos de México, S.A.B. de C.V. and former Vice Chairman of the Board of Univision | December 1990 | |||
In alphabetical order: | ||||||
Alfonso de Angoitia Noriega (01/17/62) | Executive Vice President and Member of the Executive Office of the Chairman and Member of the Executive Committee of Grupo Televisa | Former Chief Financial Officer of Grupo Televisa and former Alternate Member of the Board of Univision and Partner, Mijares, Angoitia, Cortés y Fuentes, S.C. (1994-1999) | April 1998 | |||
María Asunción Aramburuzabala Larregui (05/02/63) | Chief Executive Officer of Tresalia Capital, S.A. de C.V. | Partner and Vice Chairwoman of the Board and Member of the Executive Committee of Grupo Modelo, S.A.B. de C.V. and Grupo Televisa, S.A.B. and Member of the Boards of Grupo Financiero Banamex, S.A. de C.V., Banco Nacional de México, S.A. and América Móvil, S.A.B. de C.V. | July 2000 | |||
Pedro Aspe Armella (07/07/50) | Co-Chairman of the Board of Evercore Partners | Member of the Boards of The McGraw-Hill Companies and Xignux, Chairman of the Board of Volaris and former Member of the Board of Vector Casa de Bolsa, S.A. de C.V. | April 2003 | |||
Julio Barba Hurtado (05/20/33) | Legal Advisor to the Board, Member of the Executive Committee and Secretary to the Audit and Corporate Practices Committee of Grupo Televisa | Former Assistant Secretary of the Board and Legal Advisor to Televisa, S.A. de C.V. | December 1990 | |||
José Antonio Bastón Patiño (04/13/68) | Corporate Vice President of Television and Member of the Executive Committee of Grupo Televisa | Former Vice President of Operations of Grupo Televisa, former General Director of Programming of Grupo Televisa and former Member of the Board of Univision | April 1998 |
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Name and Date of Birth | Principal Occupation | Business Experience | First Elected | |||
Alberto Bailleres González (08/22/31) | President of Grupo Bal, S.A. de C.V. | Member of the Boards of Valores Mexicanos, Casa de Bolsa, S.A. de C.V., Desc., S.A.B. de C.V., Fomento Económico Mexicano, S.A.B. de C.V. (FEMSA), Grupo Financiero BBVA Bancomer, S.A. de C.V., Industrias Peoles, S.A.B. de C.V., Grupo Nacional Provincial, S.A.B., Grupo Palacio de Hierro, S.A.B. de C.V., Profuturo GNP, S.A. de C.V., Aseguradora Porvenir GNP, S.A. de C.V. and President of the Board of Governors of the Instituto Tecnológico Autónomo de México, A.C. (ITAM) | April 2004 | |||
Manuel Jorge Cutillas Covani (03/01/32) | Former President and Chief Executive Officer of Grupo Bacardi Limited | Member of the Board of Bacardi Limited and former Chairman of the Board of Grupo Bacardi Limited | April 1994 | |||
José Antonio Fernández Carbajal (2/15/54) | Chairman of the Board and Chief Executive Officer of Fomento Económico Mexicano, S.A.B. de C.V. and Chairman of the Board of Coca-Cola Femsa, S.A.B. de C.V. | Member of the Boards of BBVA Bancomer, S.A., Grupo Industrial Saltillo, S.A.B. de C.V., Industrias Peoles, S.A.B. de C.V., and Grupo Industrial Bimbo, S.A.B. de C.V. | April 2007 | |||
Carlos Fernández González (09/29/66) | Chief Executive Officer and Chairman of the Board of Grupo Modelo, S.A.B. de C.V. | Member of the Boards of Anheuser-Busch Companies, Inc., Grupo Financiero Santander, S.A.B. de C.V. and Emerson Electric, Co. Member of the Board and Partner of Finaccess Mexico, S.A.B. de C.V. and Partner and CEO of Tenedora San Carlos, S.A. de C.V. | 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, S.A.B. de C.V. | Member of the Boards of Kimberly-Clark Corporation, General Electric Co., Kellogg Company, Home Depot, Inc., Alfa, S.A.B. de C.V., Grupo Carso, S.A.B. de C.V., América Móvil, S.A.B. de C.V. and Investment Company of America, former President of the Mexican Business Council and former Chief Executive Officer of Kimberly-Clark de Mexico, S.A.B. de C.V. | April 1997 | |||
Roberto Hernández Ramírez (03/24/42) | Chairman of the Board of Banco Nacional de México, S.A. | Former Chief Executive Officer of Banco Nacional de México, S.A. and Member of the Boards of Citigroup, Inc., Gruma, S.A.B. de C.V., Grupo Financiero Banamex Accival, S.A. de C.V., and the Nature Conservancy and World Monuments Fund | 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 Partner of Editorial Clío Libros y Videos, S.A. de C.V. | Director and Partner of Editorial Vuelta, S.A. de C.V. | April 1996 | |||
Germán Larrea Mota Velasco (10/26/53) | Chairman of the Board and Chief Executive Officer of Grupo México, S.A.B. de C.V. | Chairman of the Board and Chief Executive Officer of Southern Copper Corporation and Grupo Ferroviario Mexicano, S.A. de C.V., former Chairman of the Board and former Chief Executive Officer of Asarco Incorporated, former Member of the Boards of Banco Nacional de México, S.A. and Bolsa Mexicana de Valores, S.A. de C.V., and former President of Grupo México, S.A.B. de C.V. | April 1999 | |||
Gilberto Pérezalonso Cifuentes (03/06/43) | Member of the Audit and Corporate Practices Committee of Grupo Televisa | Former Chief Executive Officer of Aerovias de Mexico, S.A. de C.V., and former Chief Executive Officer of Corporación GEO, S.A.B. de C.V. Former Member of the Boards of Grupo Gigante, S.A.B. de C.V. Southern Peru Copper Corporation and Afore Banamex, S.A. Member of the Boards of Consorcio Aeroméxico S.A.B de C.V. and Telefónica Móviles México, S.A. de C.V. | April 1998 | |||
Alejandro Quintero Iñiguez (02/11/50) | Corporate Vice President of Sales and Marketing and Member of the Executive Committee of Grupo Televisa | Stockholder of Grupo TV Promo, S.A. de C.V. and former Advisor to former Mexican President Ernesto Zedillo | April 1998 | |||
Fernando Senderos Mestre (03/03/50) | Chairman of the Board and President of the Executive Committee of DESC, S.A. de C.V., Dine, S.A.B. de C.V. and Grupo Kuo, S.A.B. de C.V. (formerly DESC, S.A. de C.V.) | Member of the Boards of Teléfonos de México, S.A.B. de C.V., Alfa, S.A.B. de C.V., Kimberly-Clark de México, S.A.B. de C.V. and Industrias Peoles, S.A.B. de C.V. and former Chief Executive Officer of DESC, S.A. de C.V. | April 1992 | |||
Enrique Francisco José Senior Hernández (08/03/43) | Managing Director of Allen & Company, LLC | Member of the Boards of Pics Retail Networks, Coca-Cola Femsa, S.A.B. de C.V., Cinemark USA Inc. and Non Traditional Media and former Executive Vice President of Allen & Company, LLC | April 2001 | |||
Lorenzo H. Zambrano Trevio (03/27/44) | Chairman of the Board and Chief Executive Officer of Cemex, S.A.B. de C.V. | Member of the Boards of Alfa, S.A.B. de C.V., IBM, Citigroup, Allianz, Grupo Financiero Bancomer, S.A. de C.V. Empresas ICA, Sociedad Controladora, S.A.B. de C.V., Fomento Económico Mexicano, S.A.B. de C.V. and Vitro, S.A.B. de C.V. | April 1999 |
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Name and Date of Birth | Principal Occupation | Business Experience | First Elected | |||
Alternate Directors: | ||||||
In alphabetical order: | ||||||
Herbert 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 | |||
Juan Pablo Andrade Frich (06/05/64) | Asset Manager of Tresalia Capital, S.A. de C.V. | Former Member of the Boards of Televicentro, S.A. de C.V. and Empresas Cablevisión, S.A.B. de C.V. | July 2000 | |||
Lucrecia Aramburuzabala Larregui de Fernandez (03/29/67) | Private Investor | Former employee of Tresalia Capital, S.A. de C.V. and Member of the Board of Grupo Modelo, S.A.B. de C.V. and former Member of the Board of Televicentro, S.A. de C.V. | July 2000 | |||
Félix José Araujo Ramírez (03/20/51) | Vice President of Televisa Regional | Former Private Investor in Promoción y Programación de la Provincia, S.A. de C.V., Promoción y Programación del Valle de Lerma, S.A. de C.V., Promoción y Programación del Sureste, S.A. de C.V., Teleimagen Profesional del Centro, S.A. de C.V. and Estrategia Satélite, S.C. | April 2002 | |||
Joaquín Balcárcel Santa Cruz (01/04/69) | Vice President — Legal and General Counsel of Grupo Televisa | Former Vice President and General Counsel of Television, Former Legal Director of Grupo Televisa and former associate at Martínez, Algaba, Estrella, De Haro y Galván-Duque, S.C. | April 2000 | |||
Rafael Carabias Príncipe (11/13/44) | Chief Financial Officer of Gestora de Inversiones Audiovisuales La Sexta, S.A. | Former Member of the Boards of Promecap, S.C. and Grupo Financiero del Sureste, S.A., former Director of Corporate Finance of Scotiabank Inverlat, S.A. and former Vice President of Administration of Grupo Televisa | April 1999 | |||
Francisco José Chévez Robelo (07/03/29) | Retired Partner of Chévez, Ruiz, Zamarripa y Cía., S.C. and Chairman of the Audit and Corporate Practices Committee of Grupo Televisa and Empresas Cablevisión, S.A.B. de C.V. | Member of the Board of Empresas Cablevisión, S.A.B. de C.V. and former Partner of Chévez, Ruíz, Zamarripa y Cía., S.C. | April 2003 | |||
José Luis Fernández Fernández (05/18/59) | Partner of Chévez, Ruíz, Zamarripa y Cia., S.C. | Former Member of the Boards of Alexander Forbes, S.A. de C.V. and Afore Bital, S.A. | April 2002 |
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Name and Date of Birth | Principal Occupation | Business Experience | First Elected | |||
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 Newscasts 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. | April 2000 | |||
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, S.A.B. de C.V. | Former Tax Vice President of Grupo Televisa and Former Tax Director of Wal-Mart de México, S.A.B. de C.V. | April 2002 | |||
Raúl Morales Medrano (05/12/70) | Partner of Chévez, Ruiz, Zamarripa y Cia., S.C. | Former Senior Manager of Chévez, Ruiz, Zamarripa y Cia., S.C. | April 2002 |
• | 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 beneficiaries of the Stockholder 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 GAAP; |
• | 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 President of the Executive Committee of Grupo Televisa | Member of the Board of Banco Nacional de México, S.A., former Member of the Board of Teléfonos de México, S.A.B. de C.V. and former Vice Chairman of the Board of Univision | March 1997 | |||
In alphabetical order: | ||||||
Alfonso de Angoitia Noriega (01/17/62) | Executive Vice President and Member of the Executive Office of the Chairman and Member of the Executive Committee of Grupo Televisa | Former Chief Financial Officer of Grupo Televisa, Member of the Board and of the Executive Committee of Grupo Televisa, former Alternate Member of the Board of Univision and Partner, Mijares, Angoitia, Cortés y Fuentes, S.C. (1994-1999) | January 2004 | |||
Félix José Araujo Ramírez (03/20/51) | President of Telesistema Mexicano, S.A. de C.V.; Vice President of Televisa Regional | Former Private Investor in Promoción y Programación de la Provincia, S.A. de C.V., Promoción y Programación del Valle de Lerma, S.A. de C.V., Promoción y Programación del Sureste, S.A. de C.V., Teleimagen Profesional del Centro, S.A. de C.V. and Estrategia Satélite, S.C. | January 1993 | |||
Maximiliano Arteaga Carlebach (12/06/42) | Vice President of Operations, Technical Service and Television Production of Grupo Televisa | Former Vice President of Operations — Televisa Chapultepec, former Vice President of Administration — Televisa San Angel and Chapultepec and former Vice President of Administration and Finance of Univisa, Inc. | March 2002 | |||
José Antonio Bastón Patiño (04/13/68) | Corporate Vice President of Television of Grupo Televisa | Member of the Board and of the Executive Committee of Grupo Televisa, former Vice President of Operations of Grupo Televisa, former General Director of Programming of Grupo Televisa and former Member of the Board of Univision | February 2001 | |||
Jean Paul Broc Haro (08/08/62) | Chief Executive Officer of Cablevisión | Former General Manager of Pay Television Networks of Grupo Televisa | February 2003 | |||
Salvi 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 and Member of the Executive Office of the Chairman and Member of the Executive Committee of Grupo Televisa | Former Deputy to the President of Grupo Televisa, member of the Board and of the Executive Committee of Televisa and former President of the Mexican Chamber of Television and Radio Broadcasters | January 2004 |
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Name and Date of Birth | Principal Position | Business Experience | First Appointed | |||
Eduardo Michelsen Delgado (03/03/71) | Chief Executive Officer of Editorial Televisa | Former Vice President of Operations of Editorial Televisa International, former General Director of Grupo Semana and former Project Director for McKinsey & Co. | March 2001 | |||
Jorge Eduardo Murguía Orozco (01/25/50) | Vice President of Production of Grupo Televisa | Former Administrative Vice President and former Director of Human Resources of Televisa | March 1992 | |||
Alejandro Quintero Iñiguez (02/11/50) | Corporate Vice President of Sales and Marketing of Grupo Televisa | Member of the Board and of the Executive Committee of Grupo Televisa, Stockholder and Member of the Board of Grupo TV Promo, S.A. de C.V. and former advisor to former Mexican President Ernesto Zedillo | April 1998 | |||
Francisco Javier Mérida Guzmán (07/31/67) | Chief Executive Officer of Sistema Radiópolis | Former Chief Executive Officer and National Sales Manager of Cadena SER | October 2006 | |||
Alexandre Moreira Penna Da Silva (12/25/54) | Chief Executive Officer of Innova | Former Vice President of Corporate Finance of Grupo Televisa and former Managing Director of JPMorgan Chase | January 2004 |
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Year Ended December 31, | ||||||||||||
2005 | 2006 | 2007 | ||||||||||
Total number of employees | 15,076 | 16,205 | 17,810 | |||||||||
Category of activity: | ||||||||||||
Employees | 15,042 | 16,170 | 17,777 | |||||||||
Executives | 34 | 35 | 33 | |||||||||
Geographic location: | ||||||||||||
Mexico | 13,680 | 14,629 | 15,871 | |||||||||
Latin America (other than Mexico) | 954 | 1,131 | 1,473 | |||||||||
U.S | 435 | 437 | 466 | |||||||||
Spain | 7 | 8 | 0 |
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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 | 44.1 | % | 67,814,604 | 0.1 | % | 107,886,870 | 0.1 | % | 107,886,870 | 0.1 | % | 15.3 | % | ||||||||||||||||||||||
Inbursa Trust(3) | 1,657,549,900 | 1.4 | % | 1,458,643,912 | 2.6 | % | 2,320,569,860 | 2.7 | % | 2,320,569,860 | 2.7 | % | 2.2 | % | ||||||||||||||||||||||
Davis Advisers(4) | 4,759,684,375 | 4.0 | % | 4,188,522,250 | 7.4 | % | 6,663,558,125 | 7.8 | % | 6,663,558,125 | 7.8 | % | 6.4 | % | ||||||||||||||||||||||
Dodge & Cox, Inc.(5) | 4,528,824,000 | 3.8 | % | 3,985,365,120 | 7.1 | % | 6,340,353,600 | 7.4 | % | 6,340,353,600 | 7.4 | % | 6.1 | % | ||||||||||||||||||||||
AIM Trimark Investments(6) | 3,821,137,500 | 3.2 | % | 3,362,601,000 | 6.0 | % | 5,349,592,500 | 6.2 | % | 5,349,592,500 | 6.2 | % | 5.1 | % | ||||||||||||||||||||||
Fidelity Management & Research(7) | 3,106,817,750 | 2.6 | % | 2,733,999,620 | 4.9 | % | 4,349,544,850 | 5.1 | % | 4,349,544,850 | 5.1 | % | 4.2 | % |
(1) | Unless otherwise indicated, the information presented in this section is based on the number of shares authorized, issued and outstanding as of May 31, 2008. The number of shares issued and outstanding for legal purposes as of May 31, 2008 was 61,227,485,550 series A Shares, 53,880,187,284 series B Shares, 85,718,479,770 series D Shares and 85,718,479,770 series L Shares, in the form of CPOs, and an additional 58,926,613,375 series A Shares, 2,357,207,692 series B Shares, 238,595 series D Shares and 238,595 series L Shares not in the form of CPOs. For financial reporting purposes under Mexican FRS only, the number of shares authorized, issued and outstanding as of May 31, 2008 was 59,193,648,400 series A Shares, 52,090,410,592 series B Shares, 82,871,107,760 series D Shares and 82,871,107,760 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, 2008 does not include: (i) 25,906,797 CPOs and an additional 516,887,975 series A Shares, 20,675,534 series B Shares, 25 series D Shares and 25 series L Shares not in the form of CPOs acquired by one of our subsidiaries, Televisa, S.A. de C.V., substantially all of which are currently held by the trust created to implement our stock purchase plan; and (ii) 55,446,689 CPOs and an additional 5,493,876,435 series A Shares, 2,336,345,621 series B Shares, 29 series D Shares and 29 series L Shares not in the form of CPOs acquired by the trust we created to implement our long-term retention plan. See Note 12 to our year-end financial statements. | |
(2) | Except indirectly through the Stockholder 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 Stockholder Trust, see “— The Major Stockholders” below. | |
(4) | Based solely on information included in the report on Form 13F filed on March 31, 2008 by Davis Advisers. | |
(5) | Based solely on information included in the report on Form 13F filed on March 31, 2008 by Dodge & Cox, Inc. | |
(6) | Based solely on information included in the report on Form 13F filed on March 31, 2008 by AIM Trimark Investments. | |
(7) | Based solely on information included in the report on Form 13F filed on March 31, 2008 by Fidelity Management & Research. |
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Nominal Pesos per CPO(1) | ||||||||
High | Low | |||||||
2003 | Ps. | 23.56 | Ps. | 12.63 | ||||
2004 | Ps. | 34.93 | Ps. | 22.22 | ||||
2005 | Ps. | 44.13 | Ps. | 29.20 | ||||
2006 | Ps. | 60.88 | Ps. | 37.67 | ||||
First Quarter | 44.96 | 40.49 | ||||||
Second Quarter | 49.72 | 37.67 | ||||||
Third Quarter | 47.00 | 39.89 | ||||||
Fourth Quarter | 60.88 | 46.17 | ||||||
December | 60.88 | 58.22 | ||||||
2007 | Ps. | 68.10 | Ps. | 48.29 | ||||
First Quarter | 66.68 | 58.99 | ||||||
Second Quarter | 68.10 | 57.19 | ||||||
Third Quarter | 62.06 | 52.50 | ||||||
Fourth Quarter | 57.43 | 48.29 | ||||||
December | 54.29 | 51.66 | ||||||
2008 (through June 24, 2008) | 57.35 | 44.81 | ||||||
First Quarter | 52.91 | 44.81 | ||||||
January | 50.90 | 44.81 | ||||||
February | 49.93 | 45.32 | ||||||
March | 52.91 | 45.76 | ||||||
Second Quarter (through June 24, 2008) | 57.35 | 47.68 | ||||||
April | 54.35 | 48.72 | ||||||
May | 57.35 | 51.74 | ||||||
June (through June 24, 2008) | 54.37 | 47.68 |
(1) | Source: Mexican Stock Exchange. |
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U.S. Dollars per GDS(1) | ||||||||
High | Low | |||||||
2003 | U.S.$ | 10.5675 | U.S.$ | 5.815 | ||||
2004 | U.S.$ | 15.6625 | U.S.$ | 9.8075 | ||||
2005 | U.S.$ | 20.775 | U.S.$ | 13.1875 | ||||
2006 | U.S.$ | 28.20 | U.S.$ | 16.38 | ||||
First Quarter | 21.35 | 18.77 | ||||||
Second Quarter | 22.87 | 16.38 | ||||||
Third Quarter | 21.51 | 18.11 | ||||||
Fourth Quarter | 28.20 | 21.13 | ||||||
December | 28.20 | 26.65 | ||||||
2007 | U.S.$ | 31.14 | U.S.$ | 22.04 | ||||
First Quarter | 30.12 | 26.35 | ||||||
Second Quarter | 31.14 | 26.35 | ||||||
Third Quarter | 28.89 | 23.48 | ||||||
Fourth Quarter | 26.59 | 22.04 | ||||||
December | 25.47 | 23.72 | ||||||
2008 (through June 24, 2008) | U.S.$ | 27.68 | U.S.$ | 20.85 | ||||
First Quarter | 24.77 | 20.85 | ||||||
January | 23.77 | 20.85 | ||||||
February | 23.16 | 21.07 | ||||||
March | 24.77 | 20.97 | ||||||
Second Quarter (through June 24, 2008) | 27.68 | 23.90 | ||||||
April | 26.04 | 23.32 | ||||||
May | 27.68 | 24.91 | ||||||
June (through June 24, 2008) | 26.30 | 23.90 |
(1) | Source: NYSE. |
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• | a minimum number of years of operating history; |
• | a minimum financial condition; |
• | a minimum number of shares or CPOs to be publicly offered to public investors; |
• | a minimum price for the securities to be offered; |
• | a minimum of 15% of the capital stock placed among public investors; |
• | a minimum of 200 holders of shares or of shares represented by CPOs, who are deemed to be public investors under the General CNBV Rules, upon the completion of the offering; |
• | the following distribution of the securities offered pursuant to an offering in Mexico: (i) at least 50% of the total number of securities offered must be placed among investors who acquire less than 5% of the total number of securities offered; and (ii) no investor may acquire more than 40% of the total number of securities offered; and | ||
• | complied with certain corporate governance requirements. |
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• | 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. |
• | 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); | ||
• | 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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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 Code’s recommendation must disclose publicly why their practices differ from those recommended by the Code. | |
Listed companies must have an audit committee with a minimum of three members and must be independent. | The Mexican Securities Market Law requires that listed companies must have an audit committee. The Chairman and the majority of the members must be independent. | |
Non-management directors must meet at 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 Item 16B “Code of Ethics” for directions on how to obtain a copy of our code of ethics. Waivers involving any of our executive officers or directors will be made only by our Board of Directors or a designated committee of the Board. |
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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. |
• | 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. |
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• | 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; |
• | 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. |
• | 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 Mexico 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, | ||||||||||||
2006 | 2007 | 2007 | ||||||||||
(Millions of Pesos in purchasing power as of December 31, 2007 or millions of U.S. Dollars)(1) | ||||||||||||
Assets: | ||||||||||||
Temporary investments(2) | Ps. | 15,703.8 | Ps. | 26,461.4 | U.S.$ | 2,422.7 | ||||||
Liabilities: | ||||||||||||
U.S. Dollar-denominated debt: | ||||||||||||
Senior Notes due 2011(3) | 880.9 | 861.3 | 78.9 | |||||||||
Senior Notes due 2032(4) | 4,186.4 | 4,046.1 | 370.4 | |||||||||
Innova’s Senior Notes due 2013(5) | 133.0 | 132.7 | 12.2 | |||||||||
Senior Notes due 2025(6) | 7,050.5 | 6,747.5 | 617.8 | |||||||||
J.P. Morgan Chase Bank, N.A. Loan due 2012(7) | — | 2,456.5 | 224.9 | |||||||||
Peso-denominated debt: | ||||||||||||
Senior Notes due 2037(8) | — | 4,280.6 | 391.9 | |||||||||
Long-term notes payable to Mexican Banks(9) | 7,598.9 | 7,403.8 | 677.9 | |||||||||
Derivative financial instruments(10) | 326.8 | 219.0 | 20.0 |
(1) | Peso amounts have been converted to U.S. Dollars solely for the convenience of the reader at a nominal exchange rate of Ps.10.9222 per U.S. Dollar, the Interbank Rate as of December 31, 2007. | |
(2) | At December 31, 2007, our temporary investments consisted of fixed rate short-term deposits, structured notes and corporate fixed income securities (primarily Peso- and U.S. Dollar-denominated in 2006 and 2007). 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. |
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(3) | At December 31, 2007, fair value exceeded the carrying value of these notes by Ps.75.4 million (U.S.$6.9 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.161.6 million (U.S.$14.8 million) at December 31, 2007. | |
(4) | At December 31, 2007, fair value exceeded the carrying value of these notes by Ps.769.4 million (U.S.$70.4 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.1,174.0 million (U.S.$107.5 million) at December 31, 2007. | |
(5) | At December 31, 2007, fair value exceeded the carrying value of these notes by Ps.9.8 million (U.S.$0.9 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.23.1 million (U.S.$2.1 million) at December 31, 2007. | |
(6) | At December 31, 2007, fair value exceeded the carrying value of these notes by Ps.194.2 million (U.S.$17.8 million). The increase in the fair value of these notes of a hypothetical 10% increase in the quoted market price of these notes would amount to approximately Ps.868.9 million (U.S.$79.5 million) at December 31, 2007. | |
(7) | At December 31, 2007, carrying value exceeded the fair value of these notes by Ps.1.0 million (U.S.$0.1 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 fair value would exceed the carrying value by approximately Ps.244.6 million (U.S.$22.4 million) at December 31, 2007. | |
(8) | At December 31, 2007, carrying value exceeded the fair value of these notes by Ps.219.4 million (U.S.$20.1 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 fair value would exceed the carrying value by approximately Ps.208.6 million (U.S.$19.1 million) at December 31, 2007. | |
(9) | At December 31, 2007, fair value exceeded the carrying value of these notes by Ps.261.3 million (U.S.$23.9 million). At December 31, 2007, a hypothetical 10% increase in Mexican interest rates would increase the fair value of these notes by approximately Ps.1,001.7 million (U.S.$91.7 million) at December 31, 2007. | |
(10) | Given the nature of these derivative instruments, an increase of 10% in the interest and or exchange rates would not have a significant impact on the fair value of these financial instruments. |
Year Ended December 31, | ||||||||
2006 | 2007 | |||||||
(In millions of U.S. Dollars) | ||||||||
U.S. Dollar-denominated monetary assets, primarily short-term investments and long-term notes receivable | U.S.$ | 2,199.9 | U.S.$ | 2,130.1 | ||||
U.S. Dollar-denominated monetary liabilities, primarily senior debt securities and other notes payable | 1,276.4 | 1,725.0 | ||||||
(923.5 | ) | (405.1 | ) | |||||
Derivative instruments, net | 6.3 | 4.7 | ||||||
Net asset position | U.S.$ | (917.2 | ) | U.S.$ | (400.4 | ) | ||
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Avenida Vasco de Quiroga, No. 2000
Colonia Santa Fe, 01210 México, D.F., México.
Telephone: (52) (55) 5261-2000.
2006 | 2007 | |||||||
(in millions of Pesos in purchasing power | ||||||||
as of December 31, 2007) | ||||||||
Audit Fees | Ps. | 53.8 | Ps. | 54.6 | ||||
Audit-Related Fees | 14.5 | 3.8 | ||||||
Tax Fees | 5.0 | 7.1 | ||||||
Other Fees | 8.9 | 0.2 | ||||||
Total | Ps. | 82.2 | Ps. | 65.7 | ||||
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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 | 1,829,000 | 60.781037 | 137,464,600 | Ps. | 1,668,894,542 | |||||||||||
February 1 to February 29 | 2,700,000 | 63.355787 | 140,164,600 | 1,497,833,918 | ||||||||||||
March 1 to March 31 | 9,799,400 | 62.136777 | 149,964,000 | 888,930,781 | ||||||||||||
April 1 to April 30 | 5,698,400 | 64.364994 | 155,662,400 | 17,962,627,860 | ||||||||||||
May 1 to May 31 | 9,876,000 | 62.924817 | 165,538,400 | 17,341,182,352 | ||||||||||||
June 1 to June 30 | 11,100,000 | 59.819166 | 176,638,400 | 16,677,189,637 | ||||||||||||
July 1 to July 31 | 2,550,000 | 58.156673 | 179,188,400 | 16,528,890,127 | ||||||||||||
August 1 to August 31 | 5,815,000 | 54.979506 | 185,003,400 | 16,209,184,262 | ||||||||||||
September 1 to September 30 | 4,646,500 | 55.973979 | 189,649,900 | 15,949,101,159 | ||||||||||||
October 1 to October 31 | 3,150,000 | 53.401222 | 192,799,900 | 15,780,887,309 | ||||||||||||
November 1 to November 30 | 7,375,500 | 50.823180 | 200,175,400 | 15,406,040,894 | ||||||||||||
December 1 to December 31 | 2,649,900 | 52.808291 | 202,825,300 | 15,266,104,241 | ||||||||||||
Total | 67,189,700 | Ps. | 58.854755 | 202,825,300 | Ps. | 15,266,104,241 |
(1) | The values have not been restated in constant Mexican Pesos and therefore represent nominal historical figures. | |
(2) | Our share repurchase program was announced in September of 2002 and is set to expire December 31, 2008. Our share repurchase program is limited to a total amount of U.S.$400 million. The total amount of our share repurchase program was updated in accordance with the resolution of the Grupo Televisa S.A.B.’s general stockholders meeting, held on April 27, 2007. | |
(3) | Table does not include repurchases or purchases by the special purpose trust formed in connection with our stock purchase plan. |
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formed in connection with Stock Purchase Plan(1)
Maximum Number (or | ||||||||||||||||
Appropriate Mexican Peso | ||||||||||||||||
Value) of CPOs | ||||||||||||||||
Total Number 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 | 350,000 | Ps. | 59.7301 | 59,513,300 | ||||||||||||
February 1 to February 29 | 750,000 | 63.2971 | 60,263,300 | |||||||||||||
March 1 to March 31 | 938,300 | 61.6196 | 61,201,600 | |||||||||||||
April 1 to April 30 | 1,830,000 | 64.7597 | 63,031,600 | |||||||||||||
May 1 to May 31 | 1,360,000 | 63.0424 | 64,391,600 | |||||||||||||
June 1 to June 30 | 1,300,000 | 60.1698 | 65,691,600 | |||||||||||||
July 1 to July 31 | 260,000 | 57.7627 | 65,951,600 | |||||||||||||
August 1 to August 31 | 100,000 | 55.2000 | 66,051,600 | |||||||||||||
September 1 to September 30 | 395,000 | 55.2544 | 66,446,600 | |||||||||||||
October 1 to October 31 | — | 0.0000 | 66,446,600 | |||||||||||||
November 1 to November 30 | — | 0.0000 | 66,446,600 | |||||||||||||
December 1 to December 31 | 200,000 | 52.0463 | 66,646,600 | |||||||||||||
Total | 7,483,300 | Ps. | 61.6623 | 66,646,600 |
(1) | See “Directors, Senior Management and Employees — Stock Purchase Plan” for a description of the implementation, limits and other terms of our Stock Purchase Plan. | |
(2) | The values have not been restated in constant Mexican Pesos and therefore represent nominal historical figures. | |
(3) | Since the number of additional shares that may be issued pursuant to our Stock Purchase Plan is affected by, among other things, the number of shares held by the special equity trust, periodic grants made to certain executives, the performance of those executives and the number of shares subject to other employee benefit plans, it would be misleading to imply that there is a defined maximum number of shares that remain to be purchased pursuant to our Stock Purchase Plan. |
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Exhibit | ||||
Number | Description of Exhibits | |||
1.1 | — | English translation of Amended and Restated Bylaws (Estatutos Sociales) of the Registrant, dated as of April 30, 2008. | ||
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). | ||
2.10 | — | Form of Eleventh Supplemental Indenture related 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. (previously filed with the Securities and Exchange Commission as Exhibit 4.12 to the Registrants’s Registration Statement on Form F-4/A (File number 333-144460) (the 2007 Form F-4/A) 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 | ||
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). | ||
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). |
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Exhibit | ||||
Number | Description of Exhibits | |||
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). | ||
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. | ||
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. | ||
8.1 | — | List of Subsidiaries of Registrant. | ||
12.1 | — | CEO Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, dated June 25, 2008. | ||
12.2 | — | CFO Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, dated June 25, 2008. | ||
13.1 | — | CEO Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, dated June 25, 2008. | ||
13.2 | — | CFO Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, dated June 25, 2008. |
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GRUPO TELEVISA, S.A.B. | ||||||
By: | /s/ Salvi Folch Viadero | |||||
Name: Salvi Folch Viadero | ||||||
Title: Chief Financial Officer | ||||||
By: | /s/ Jorge Lutteroth Echegoyen | |||||
Name: Jorge Lutteroth Echegoyen | ||||||
Title: Vice President — Controller |
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GRUPO TELEVISA, S.A.B.
Page | ||||
F-2 | ||||
F-3 | ||||
F-4 | ||||
F-5 | ||||
F-6 | ||||
F-7 | ||||
F- 1
Table of Contents
Audit Partner
México, D. F.
June 24, 2008
F- 2
Table of Contents
Notes | 2006 | 2007 | ||||||||||
ASSETS | ||||||||||||
Current: | ||||||||||||
Cash | Ps. | 701,245 | Ps. | 843,531 | ||||||||
Temporary investments | 15,703,829 | 26,461,365 | ||||||||||
16,405,074 | 27,304,896 | |||||||||||
Trade notes and accounts receivable, net | 3 | 14,108,702 | 17,294,674 | |||||||||
Other accounts and notes receivable, net | 1,544,287 | 2,590,330 | ||||||||||
Due from affiliated companies | 16 | 191,761 | 195,023 | |||||||||
Transmission rights and programming | 4 | 3,167,943 | 3,154,681 | |||||||||
Inventories | 801,943 | 833,996 | ||||||||||
Available-for-sale investment | 12,266,318 | — | ||||||||||
Other current assets | 800,068 | 653,260 | ||||||||||
Total current assets | 49,286,096 | 52,026,860 | ||||||||||
Transmission rights and programming | 4 | 3,557,738 | 5,252,748 | |||||||||
Investments | 5 | 5,959,873 | 8,115,584 | |||||||||
Property, plant and equipment, net | 6 | 21,764,425 | 25,171,331 | |||||||||
Intangible assets and deferred charges, net | 7 | 5,592,695 | 8,098,667 | |||||||||
Other assets | 25,325 | 38,286 | ||||||||||
Total assets | Ps. | 86,186,152 | Ps. | 98,703,476 | ||||||||
LIABILITIES | ||||||||||||
Current: | ||||||||||||
Current portion of long-term debt | 8 | Ps. | 1,023,445 | Ps. | 488,650 | |||||||
Current portion of satellite transponder lease obligation | 8 | 89,415 | 97,696 | |||||||||
Trade accounts payable | 3,580,467 | 4,457,519 | ||||||||||
Customer deposits and advances | 17,528,635 | 17,145,053 | ||||||||||
Taxes payable | 1,223,814 | 684,497 | ||||||||||
Accrued interest | 271,915 | 307,814 | ||||||||||
Due to affiliated companies | 16 | 39,566 | 127,191 | |||||||||
Other accrued liabilities | 2,124,712 | 2,173,926 | ||||||||||
Total current liabilities | 25,881,969 | 25,482,346 | ||||||||||
Long-term debt, net of current portion | 8 | 18,464,257 | 24,433,387 | |||||||||
Satellite transponder lease obligation, net of current portion | 8 | 1,162,531 | 1,035,134 | |||||||||
Customer deposits and advances | 278,282 | 2,665,185 | ||||||||||
Other long-term liabilities | 541,671 | 2,849,369 | ||||||||||
Deferred taxes | 19 | 1,544,741 | 1,272,834 | |||||||||
Pension plans, seniority premiums and severance indemnities | 10 | 297,824 | 314,921 | |||||||||
Total liabilities | 48,171,275 | 58,053,176 | ||||||||||
Commitments and contingencies | 11 | |||||||||||
STOCKHOLDERS’ EQUITY | ||||||||||||
Capital stock issued, no par value | 12 | 10,506,856 | 10,267,570 | |||||||||
Additional paid-in capital | 4,547,944 | 4,547,944 | ||||||||||
15,054,800 | 14,815,514 | |||||||||||
Retained earnings: | 13 | |||||||||||
Legal reserve | 2,135,423 | 2,135,423 | ||||||||||
Reserve for repurchase of shares | 4,626,882 | 1,240,869 | ||||||||||
Unappropriated earnings | 17,343,579 | 21,713,378 | ||||||||||
Net income for the year | 8,908,943 | 8,082,463 | ||||||||||
33,014,827 | 33,172,133 | |||||||||||
Accumulated other comprehensive loss, net | 14 | (3,808,377 | ) | (3,009,468 | ) | |||||||
Shares repurchased | 12 | (7,888,974 | ) | (7,939,066 | ) | |||||||
21,317,476 | 22,223,599 | |||||||||||
Total majority interest | 36,372,276 | 37,039,113 | ||||||||||
Minority interest | 15 | 1,642,601 | 3,611,187 | |||||||||
Total stockholders’ equity | 38,014,877 | 40,650,300 | ||||||||||
Total liabilities and stockholders’ equity | Ps. | 86,186,152 | Ps. | 98,703,476 | ||||||||
F- 3
Table of Contents
Notes | 2005 | 2006 | 2007 | |||||||||||||
Net sales | 22 | Ps. | 35,068,013 | Ps. | 39,357,699 | Ps. | 41,561,526 | |||||||||
Cost of sales (excluding depreciation and amortization) | 15,927,359 | 16,791,197 | 18,128,007 | |||||||||||||
Selling expenses (excluding depreciation and amortization) | 2,877,753 | 3,130,230 | 3,277,526 | |||||||||||||
Administrative expenses (excluding depreciation and amortization) | 1,988,090 | 2,390,785 | 2,452,027 | |||||||||||||
Depreciation and amortization | 6 and 7 | 2,611,629 | 2,779,772 | 3,223,070 | ||||||||||||
Operating income | 22 | 11,663,182 | 14,265,715 | 14,480,896 | ||||||||||||
Other expense, net | 17 | 770,899 | 888,070 | 953,352 | ||||||||||||
Integral cost of financing, net | 18 | 1,923,961 | 1,141,028 | 410,214 | ||||||||||||
Equity in (earnings) losses of affiliates, net | 5 | (172,913 | ) | 624,843 | 749,299 | |||||||||||
Income before income taxes | 9,141,235 | 11,611,774 | 12,368,031 | |||||||||||||
Income taxes | 19 | 811,076 | 2,092,478 | 3,349,641 | ||||||||||||
Income before cumulative loss of accounting change | 8,330,159 | 9,519,296 | 9,018,390 | |||||||||||||
Cumulative loss of accounting change, net | 1(n)(r) | 546,386 | — | — | ||||||||||||
Consolidated net income | 7,783,773 | 9,519,296 | 9,018,390 | |||||||||||||
Minority interest net income | 15 | 1,170,359 | 610,353 | 935,927 | ||||||||||||
Majority interest net income | 13 | Ps. | 6,613,414 | Ps. | 8,908,943 | Ps. | 8,082,463 | |||||||||
Majority interest net income per CPO | 20 | Ps. | 2.27 | Ps. | 3.07 | Ps. | 2.84 | |||||||||
F- 4
Table of Contents
Accumulated | ||||||||||||||||||||||||||||||||
Capital | Other | |||||||||||||||||||||||||||||||
Stock | Additional | Retained | Comprehensive | Shares | Total | Minority | Total | |||||||||||||||||||||||||
Issued | Paid-In | Earnings | Loss | Repurchased | Majority | Interest | Stockholders’ | |||||||||||||||||||||||||
(Note 12) | Capital | (Note 13) | (Note 14) | (Note 12) | Interest | (Note 15) | Equity | |||||||||||||||||||||||||
Balance at January 1, 2005 | Ps. | 10,677,114 | Ps. | 4,547,944 | Ps. | 25,586,027 | Ps. | (2,858,311 | ) | Ps. | (7,022,500 | ) | Ps. | 30,930,274 | Ps. | (134,482 | ) | Ps. | 30,795,792 | |||||||||||||
Dividends | — | — | (4,648,726 | ) | — | — | (4,648,726 | ) | — | (4,648,726 | ) | |||||||||||||||||||||
Repurchase of capital stock | — | — | — | — | (1,289,552 | ) | (1,289,552 | ) | — | (1,289,552 | ) | |||||||||||||||||||||
Sale of repurchase shares | — | — | (366,181 | ) | — | 705,792 | 339,611 | — | 339,611 | |||||||||||||||||||||||
Increase in minority interest | — | — | — | — | — | — | 1,053,123 | 1,053,123 | ||||||||||||||||||||||||
Stock-based compensation | — | — | 349,302 | — | — | 349,302 | — | 349,302 | ||||||||||||||||||||||||
Comprehensive income (loss) | — | — | 6,613,414 | (970,514 | ) | — | 5,642,900 | — | 5,642,900 | |||||||||||||||||||||||
Balance at December 31, 2005 | 10,677,114 | 4,547,944 | 27,533,836 | (3,828,825 | ) | (7,606,260 | ) | 31,323,809 | 918,641 | 32,242,450 | ||||||||||||||||||||||
Dividends | — | — | (1,161,839 | ) | — | — | (1,161,839 | ) | — | (1,161,839 | ) | |||||||||||||||||||||
Share cancellation | (170,258 | ) | — | (1,575,231 | ) | — | 1,745,489 | — | — | — | ||||||||||||||||||||||
Repurchase of capital stock | — | — | — | — | (3,224,515 | ) | (3,224,515 | ) | — | (3,224,515 | ) | |||||||||||||||||||||
Sale of repurchase shares | — | — | (609,049 | ) | — | 1,196,312 | 587,263 | — | 587,263 | |||||||||||||||||||||||
Increase in minority interest | — | — | — | — | — | — | 723,960 | 723,960 | ||||||||||||||||||||||||
Benefit from capital contribution of minority interest in Sky | — | — | 385,596 | — | — | 385,596 | — | 385,596 | ||||||||||||||||||||||||
Loss on minority interest acquisition of Sky | — | — | (711,311 | ) | — | — | (711,311 | ) | — | (711,311 | ) | |||||||||||||||||||||
Stock-based compensation | — | — | 243,882 | — | — | 243,882 | — | 243,882 | ||||||||||||||||||||||||
Comprehensive income | — | — | 8,908,943 | 20,448 | — | 8,929,391 | — | 8,929,391 | ||||||||||||||||||||||||
Balance at December 31, 2006 | 10,506,856 | 4,547,944 | 33,014,827 | (3,808,377 | ) | (7,888,974 | ) | 36,372,276 | 1,642,601 | 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 minority 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 | Ps. | 10,267,570 | Ps. | 4,547,944 | Ps. | 33,172,133 | Ps. | (3,009,468 | ) | Ps. | (7,939,066 | ) | Ps. | 37,039,113 | Ps. | 3,611,187 | Ps. | 40,650,300 | ||||||||||||||
F- 5
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2005 | 2006 | 2007 | ||||||||||
Operating activities: | ||||||||||||
Consolidated net income | Ps. | 7,783,773 | Ps. | 9,519,296 | Ps. | 9,018,390 | ||||||
Adjustments to reconcile net income to resources provided by operating activities: | ||||||||||||
Equity in (earnings) losses of affiliates | (172,913 | ) | 624,843 | 749,299 | ||||||||
Depreciation and amortization | 2,611,629 | 2,779,772 | 3,223,070 | |||||||||
Impairment of long-lived assets and other amortization | 105,314 | 176,884 | 541,996 | |||||||||
Deferred taxes | (850,520 | ) | 1,292,645 | (358,122 | ) | |||||||
Loss on disposition of available-for sale investment in Univision | — | — | 565,862 | |||||||||
Loss (gain) on disposition of affiliates | 184,904 | (19,556 | ) | (41,527 | ) | |||||||
Stock-based compensation | — | 243,882 | 140,517 | |||||||||
Cumulative loss of accounting change | 546,386 | — | — | |||||||||
10,208,573 | 14,617,766 | 13,839,485 | ||||||||||
Changes in operating assets and liabilities: | ||||||||||||
(Increase) decrease in: | ||||||||||||
Trade notes and accounts receivable, net | (2,474,612 | ) | 894,378 | (3,090,936 | ) | |||||||
Transmission rights and programming | 1,054,584 | 778,059 | (1,878,256 | ) | ||||||||
Inventories | 50,276 | (112,827 | ) | (32,053 | ) | |||||||
Other accounts and notes receivable and other current assets | 860,008 | (1,104,190 | ) | (443,962 | ) | |||||||
Increase (decrease) in: | ||||||||||||
Customer deposits and advances | 2,411,073 | (1,676,832 | ) | 1,840,116 | ||||||||
Trade accounts payable | 807,911 | 390,413 | 840,911 | |||||||||
Other liabilities, taxes payable and deferred taxes | (801,669 | ) | 560,690 | 519,488 | ||||||||
Pension plans, seniority premiums and severance indemnities | 80,598 | 90,360 | 17,097 | |||||||||
1,988,169 | (179,949 | ) | (2,227,595 | ) | ||||||||
Resources provided by operating activities | 12,196,742 | 14,437,817 | 11,611,890 | |||||||||
Financing activities: | ||||||||||||
Issuance of Senior Notes due 2025 | 6,883,712 | — | — | |||||||||
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 | (6,131,987 | ) | — | (1,017,093 | ) | |||||||
Prepayments of Senior Notes due 2013 | — | (3,315,749 | ) | — | ||||||||
Other increase in debt | — | 3,631,565 | 50,051 | |||||||||
Other decrease in debt | (5,808,505 | ) | (888,623 | ) | (675,234 | ) | ||||||
Repurchase and sale of capital stock | (949,941 | ) | (2,637,252 | ) | (3,848,560 | ) | ||||||
Dividends paid | (4,648,726 | ) | (1,161,839 | ) | (4,506,492 | ) | ||||||
Gain on valuation of available-for-sale investments | — | (565,862 | ) | — | ||||||||
Loss on minority interest acquisition of Sky | — | (711,311 | ) | — | ||||||||
Benefit from capital contribution of minority interest in Sky | — | 385,596 | — | |||||||||
Minority interest | (117,236 | ) | 113,607 | 1,032,659 | ||||||||
Translation effect | 121,145 | 17,202 | 32,877 | |||||||||
Resources used for financing activities | (10,651,538 | ) | (5,132,666 | ) | (1,974,297 | ) | ||||||
Investing activities: | ||||||||||||
Due from affiliated companies, net | 577,463 | (644,409 | ) | 32,636 | ||||||||
Investments | (1,297,043 | ) | (4,938,453 | ) | (3,385,342 | ) | ||||||
Disposition of investments | 113,379 | 7,194,364 | 700,689 | |||||||||
Investments in property, plant and equipment | (2,956,172 | ) | (3,428,532 | ) | (3,915,439 | ) | ||||||
Disposition of property, plant and equipment | 342,256 | 532,676 | 704,310 | |||||||||
Investments in goodwill and other intangible assets | (1,790,712 | ) | (1,224,707 | ) | (3,310,968 | ) | ||||||
Disposition of goodwill and other intangible assets | 728,683 | 5,924,375 | — | |||||||||
Available-for-sale investment in shares of Univision | — | (12,266,318 | ) | 12,266,318 | ||||||||
Acquisition of Telecom net assets | — | — | (1,975,666 | ) | ||||||||
Other assets | 126,367 | (4,026 | ) | 7,430 | ||||||||
Resources (used for) provided by investing activities | (4,155,779 | ) | (8,855,030 | ) | 1,123,968 | |||||||
Net (decrease) increase in cash and temporary investments | (2,610,575 | ) | 450,121 | 10,761,561 | ||||||||
Net increase in cash and temporary investments upon Telecom acquisition | — | — | 138,261 | |||||||||
Cash and temporary investments at beginning of year | 18,565,528 | 15,954,953 | 16,405,074 | |||||||||
Cash and temporary investments at end of year | Ps. | 15,954,953 | Ps. | 16,405,074 | Ps. | 27,304,896 | ||||||
F- 6
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(In thousands of Mexican pesos in purchasing power as of December 31, 2007,
except per CPO, per share and exchange rate amounts)
F- 7
Table of Contents
Company’s | ||||||
Consolidated Entities | Ownership(1) | Business Segments(2) | ||||
Telesistema Mexicano, S.A. de C.V. and subsidiaries, including Televisa, S.A. de C.V. | 100 | % | Television Broadcasting, Pay Television Networks and 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 | |||
Grupo Distribuidoras Intermex, S.A. de C.V. and subsidiaries | 100 | % | Publishing Distribution | |||
Innova, S. de R. L. de C.V. and subsidiaries (collectively, “Sky”)(3) | 58.7 | % | Sky | |||
Empresas Cablevisión, S. A. B. de C.V. (“Empresas Cablevisión”) and subsidiaries | 51 | % | Cable and Telecom | |||
Paxia, S.A. de C.V., including its investment in Alvafig, S.A. de C.V. (“Alvafig”)(3) | 100 | % | 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 | |||
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 holding entity. | |
(2) | See Note 22 for a description of each of the Group’s business segments. | |
(3) | The Group has identified Sky, TuTv and Alvafig as variable interest entities and the Group as the primary beneficiary of the investment in each of these entities. The Group has 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. Alvafig is a holding company owning 49% of the equity in Cablemás, S.A. de C.V. (“Cablemás”), the second largest cable operator in Mexico (see Notes 2 and 5). |
Businesses | Expiration Dates | |
Television Broadcasting | In 2021 | |
Sky | Various from 2020 to 2027 | |
Cable and Telecom | Various from 2018 to 2030 | |
Radio | Various from 2008 to 2016 | |
Gaming | In 2030 |
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F- 9
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• | Advertising revenues, including deposits and advances from customers for future advertising, are recognized at the time the advertising services are rendered. |
• | Revenues from program services for pay television and licensed television programs are recognized when the programs are sold and become available for broadcast. |
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• | Revenues from magazine subscriptions are initially deferred and recognized proportionately as products are delivered to subscribers. Revenues from the sales of magazines 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 DTH program services and installation fees, are recognized at the time the DTH service is provided. |
• | 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. |
• | 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- 11
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The NCPI at December 31 was: | ||||
2004 | 112.550 | |||
2005 | 116.301 | |||
2006 | 121.015 | |||
2007 | 125.564 |
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F- 13
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F- 14
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2006 | 2007 | |||||||
Non-interest bearing notes received from customers as deposits and advances | Ps. | 12,406,785 | Ps. | 14,753,180 | ||||
Accounts receivable, including value-added tax receivables related to advertising services | 2,773,345 | 3,507,639 | ||||||
Allowance for doubtful accounts | (1,071,428 | ) | (966,145 | ) | ||||
Ps. | 14,108,702 | Ps. | 17,294,674 | |||||
F- 15
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2006 | 2007 | |||||||
Transmission rights | Ps. | 3,721,400 | Ps. | 5,439,918 | ||||
Programming | 3,004,281 | 2,967,511 | ||||||
6,725,681 | 8,407,429 | |||||||
Non-current portion of: | ||||||||
Transmission rights | 1,950,823 | 3,626,320 | ||||||
Programming | 1,606,915 | 1,626,428 | ||||||
3,557,738 | 5,252,748 | |||||||
Current portion of transmission rights and programming | Ps. | 3,167,943 | Ps. | 3,154,681 | ||||
Ownership% | ||||||||||||
as of December 31, | ||||||||||||
2006 | 2007 | 2007 | ||||||||||
Accounted for by the equity method: | ||||||||||||
Cablemás(a) | Ps. | 2,978,532 | Ps. | 3,208,265 | 49% | |||||||
La Sexta (see Note 2) | 757,166 | 1,238,576 | 40% | |||||||||
Ocesa Entretenimiento, S. A. de C. V. (“OCEN”)(b) | 522,808 | 448,158 | 40% | |||||||||
Volaris (see Note 2) | 266,970 | 202,949 | 25% | |||||||||
TVI (see Note 2) | 101,407 | 324,508 | 50% | |||||||||
Other | 99,518 | 132,758 | ||||||||||
4,726,401 | 5,555,214 | |||||||||||
Other investments: | ||||||||||||
Held-to-maturity debt securities (see Note 1(g))(c) | 940,238 | 2,525,204 | ||||||||||
TVI (see Note 2) | 266,378 | — | ||||||||||
Other | 26,856 | 35,166 | ||||||||||
1,233,472 | 2,560,370 | |||||||||||
Ps. | 5,959,873 | Ps. | 8,115,584 | |||||||||
(a) | The Group has identified Alvafig as a variable interest entity, and the Group as the primary beneficiary of the investment in this entity. Hence, the assets of Alvafig, consisting of a 49% equity interest in Cablemás (including goodwill of Ps.1,870,393), as well as its liabilities and results of operations have been included in the consolidated financial statements of the Company (see Notes 1 (b) and 2). | |
(b) | OCEN is a majority-owned subsidiary of Corporación Interamericana de Entretenimiento, S.A. de C.V. (“CIE”), and is engaged in the live entertainment business in Mexico. In the third quarter of 2006, and in the second and third quarter of 2007, OCEN paid dividends to the Group in the aggregate amount of Ps.106,429 and Ps.94,382 respectively (see Note 16). | |
(c) | Held-to-maturity securities represent structured notes and corporate fixed income securities with long-term maturities. These investments are stated at cost. |
F- 16
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2005 | 2006 | 2007 | ||||||||||
Equity in earnings (losses) of affiliates, net | Ps. | 172,913 | Ps. | (624,843 | ) | Ps. | (749,299 | ) | ||||
Equity in other comprehensive (loss) income of affiliates: | ||||||||||||
Foreign currency translation adjustments, net | (313,807 | ) | 578,481 | 171,297 | ||||||||
Result from holding non-monetary assets, net | (960 | ) | (7,161 | ) | 2,151 | |||||||
(Loss) gain on equity accounts, net | (204,485 | ) | 57,930 | 5,382 | ||||||||
Ps. | (346,339 | ) | Ps. | 4,407 | Ps. | (570,469 | ) | |||||
2006 | 2007 | |||||||
Buildings | Ps. | 8,709,933 | Ps. | 9,178,003 | ||||
Buildings improvements | 1,694,047 | 1,715,965 | ||||||
Technical equipment(1) | 20,875,135 | 26,330,386 | ||||||
Satellite transponders | 1,757,780 | 1,789,890 | ||||||
Furniture and fixtures | 597,683 | 672,426 | ||||||
Transportation equipment | 1,310,538 | 1,411,444 | ||||||
Computer equipment | 1,653,994 | 2,162,639 | ||||||
36,599,110 | 43,260,753 | |||||||
Accumulated depreciation | (20,180,600 | ) | (22,750,195 | ) | ||||
16,418,510 | 20,510,558 | |||||||
Land | 4,138,684 | 4,232,721 | ||||||
Construction in progress | 1,207,231 | 428,052 | ||||||
Ps. | 21,764,425 | Ps. | 25,171,331 | |||||
(1) | In 2007 includes telecommunications facilities in connection with the acquisition of Letseb and Bestel USA (see Note 2). |
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2006 | 2007 | |||||||||||||||||||||||
Gross | Gross | |||||||||||||||||||||||
Carrying | Accumulated | Net Carrying | Carrying | Accumulated | Net Carrying | |||||||||||||||||||
Amount | Amortization | Amount | Amount | Amortization | Amount | |||||||||||||||||||
Intangible assets with indefinite lives: | ||||||||||||||||||||||||
Goodwill | Ps. | 2,267,077 | Ps. | 3,978,277 | ||||||||||||||||||||
Publishing and TVI trademarks | 602,741 | 806,278 | ||||||||||||||||||||||
Television network concession | 650,603 | 650,603 | ||||||||||||||||||||||
TVI concession | 147,108 | 262,925 | ||||||||||||||||||||||
Telecom concession | — | 29,113 | ||||||||||||||||||||||
Intangible assets with finite lives and deferred charges: | ||||||||||||||||||||||||
Licenses and software | Ps. | 845,232 | Ps. | (475,648 | ) | 369,584 | Ps. | 1,026,841 | Ps. | (632,998 | ) | 393,843 | ||||||||||||
Subscriber list Sky | 615,449 | (302,041 | ) | 313,408 | 749,945 | (461,509 | ) | 288,436 | ||||||||||||||||
Subscriber list TVI | 50,887 | — | 50,887 | 52,495 | (13,011 | ) | 39,484 | |||||||||||||||||
Leasehold improvements | 280,282 | (71,825 | ) | 208,457 | 821,257 | (138,663 | ) | 682,594 | ||||||||||||||||
Other intangible assets | 266,175 | (127,657 | ) | 138,518 | 294,035 | (157,214 | ) | 136,821 | ||||||||||||||||
Deferred financing costs (see Note 8) | 1,085,933 | (241,621 | ) | 844,312 | 1,107,744 | (277,451 | ) | 830,293 | ||||||||||||||||
Ps. | 3,143,958 | Ps. | (1,218,792 | ) | Ps. | 5,592,695 | Ps. | 4,052,317 | Ps. | (1,680,846 | ) | Ps. | 8,098,667 | |||||||||||
Foreign | ||||||||||||||||||||||||
Balance as of | Currency | Balance as of | ||||||||||||||||||||||
December 31, | Translation | Adjustments/ | Impairment | December 31, | ||||||||||||||||||||
2006 | Acquisitions | Adjustments | Reclassifications | Adjustments | 2007 | |||||||||||||||||||
Goodwill: | ||||||||||||||||||||||||
Television Broadcasting(1) | Ps. | 1,403,519 | Ps. | — | Ps. | — | Ps. | — | Ps. | (493,693 | ) | Ps. | 909,826 | |||||||||||
Cable and Telecom | — | 1,552,054 | — | — | — | 1,552,054 | ||||||||||||||||||
Publishing Distribution | 24,544 | 668,338 | (2,773 | ) | — | — | 690,109 | |||||||||||||||||
Other Businesses | 39,406 | — | — | — | — | 39,406 | ||||||||||||||||||
Equity-method investees(2) | 799,608 | 269,028 | — | (281,754 | ) | — | 786,882 | |||||||||||||||||
Ps. | 2,267,077 | Ps. | 2,489,420 | Ps. | (2,773 | ) | Ps. | (281,754 | ) | Ps. | (493,693 | ) | Ps. | 3,978,277 | ||||||||||
Trademarks(3): | ||||||||||||||||||||||||
Publishing | Ps. | 552,731 | Ps. | 141,093 | Ps. | 1,242 | Ps. | — | Ps. | — | Ps. | 695,066 | ||||||||||||
Telecom | — | 21,860 | — | — | — | 21,860 | ||||||||||||||||||
TVI | 50,010 | 39,342 | — | — | — | 89,352 | ||||||||||||||||||
Ps. | 602,741 | Ps. | 202,295 | Ps. | 1,242 | Ps. | — | Ps. | — | Ps. | 806,278 | |||||||||||||
(1) | See Note 17. | |
(2) | See Note 5. | |
(3) | See Note 2. |
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2006 | 2007 | |||||||
U.S. dollar debt: | ||||||||
8% Senior Notes due 2011(1)(2) | Ps. | 806,468 | Ps. | 785,863 | ||||
8.50% Senior Notes due 2032(1) | 3,362,570 | 3,276,660 | ||||||
6.625% Senior Notes due 2025(1)(2) | 6,725,139 | 6,553,320 | ||||||
9.375% Senior Notes due 2013(3)(8) | 126,108 | 122,886 | ||||||
JPMorgan Chase Bank loan facility(4) | — | 2,457,495 | ||||||
Other(5) | 38,943 | 33,032 | ||||||
Mexican peso debt: | ||||||||
8.49% Senior Notes due 2037(1)(6) | — | 4,500,000 | ||||||
8.15% UDI-denominated Notes due 2007(2)(6)(7) | 1,017,093 | — | ||||||
Bank loans(3)(8) | 7,410,945 | 7,142,460 | ||||||
Other currency debt | 436 | 50,321 | ||||||
Total long-term debt | 19,487,702 | 24,922,037 | ||||||
Less: Current portion | 1,023,445 | 488,650 | ||||||
Long-term debt, net of current portion | Ps. | 18,464,257 | Ps. | 24,433,387 | ||||
Satellite transponder lease obligation(9) | Ps. | 1,251,946 | Ps. | 1,132,830 | ||||
Less: Current portion | 89,415 | 97,696 | ||||||
Satellite transponder lease obligation, net of current portion | Ps. | 1,162,531 | Ps. | 1,035,134 | ||||
(1) | These Senior Notes are unsecured obligations of the Company, rank equally in right of payment with all existing and future unsecured and unsubordinated indebtedness of the Company, and are junior in right of payment to all of the existing and future liabilities of the Company’s subsidiaries. Interest on the Senior Notes due 2011, 2025, 2032 and 2037, including additional amounts payable in respect of certain Mexican withholding taxes, is 8.41%, 6.97%, 8.94% and 8.93% per annum, respectively, and is payable semi-annually. These Senior Notes may not be redeemed prior to maturity, except in the event of certain changes in law affecting the Mexican withholding tax treatment of certain payments on the securities, in which case the securities will be redeemable, as a whole but not in part, at the option of the Company. The Senior Notes due 2011 and 2032 were priced at 98.793% and 99.431%, respectively, for a yield to maturity of 8.179% and 8.553%, respectively. The agreement of these Senior Notes contains covenants that limit the ability of the Company and certain restricted subsidiaries engaged in Television Broadcasting, Pay Television Networks and Programming Exports, to incur or assume liens, perform sale and leaseback transactions, and consummate certain mergers, consolidations and similar transactions. Substantially all of these Senior Notes are registered with the U.S. Securities and Exchange Commission (the “SEC”). | |
(2) | In March and May 2005, the Company issued these Senior Notes in the aggregate amount of U.S.$400.0 million and U.S.$200.0 million, respectively, which were priced at 98.081% and 98.632%, respectively, for a yield to maturity of 6.802% and 6.787%, respectively. The net proceeds of the U.S.$400.0 million issuance, together with cash on hand, were used to fund the Group’s tender offers made for any or all of the Senior Notes due 2011 and the UDI-denominated Notes due 2007, and prepay a portion of the outstanding principal amount of these securities in the amount of approximately U.S.$222.0 million and Ps.3,045,427 (nominal Ps.2,935,097), respectively. The net proceeds of the U.S.$200.0 million issuance were used for corporate purposes, including the prepayment of some of the Group’s outstanding indebtedness. | |
(3) | These Senior Notes are unsecured and unsubordinated obligations of Sky. Interest on these Senior Notes, including additional amounts payable in respect of certain Mexican withholding taxes, is 9.8580%, and is payable semi-annually. Sky may, at its own option, redeem these Senior Notes, in whole or in part, at any time on or after September 19, 2008 at redemption prices from 104.6875% to 101.5625% between September 19, 2008 through September 18, 2011, or 100% commencing on September 19, 2011, plus accrued and unpaid interest, if any. In March and April 2006, Sky entered into two 10-year loans with Mexican banks in the aggregate principal amount of Ps.3,500,000 to fund, together with cash on hand, a tender offer and consent solicitation made for any or all of the Senior Notes due 2013, and prepaid a principal amount of approximately U.S.$288.7 million or 96.2% of these securities. The total aggregate amount paid by Sky in connection with this tender offer was of approximately U.S.$324.3 million, which included related consents and accrued and unpaid interest. The 10-year Sky indebtedness is guaranteed by the Company and includes a nominal 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% for the first three years, and the Mexican interbank interest rate of “TIIE” plus 24 basis points for the remaining seven years. Interest on these two 10-year loans is payable on a monthly basis. | |
(4) | In December 2007, Empresas Cablevisión entered into a 5-year term loan facility in the aggregate principal amount of U.S.$225 million in connection with the financing for the acquisition of Letseb and Bestel USA (see Note 2). This loan is intended to be syndicated during the life of the facility. Annual interest on this loan facility is payable on a quarterly basis at LIBOR plus an applicable margin that may range from 0.375% to 0.625% depending on a leverage ratio. Under the terms of the loan facility, Empresas Cablevisión and 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. |
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(5) | Includes notes payable to banks, bearing annual interest rates in a range of 0.11 to 1.25 points above LIBOR. The maturities of these notes are between 2008 and 2010. | |
(6) | In May 2007, the Company issued these Senior Notes in the aggregate principal amount of Ps.4,500,000. The net proceeds from this issuance were used to replenish the Group’s cash position following the payment, with cash on hand, of approximately Ps.992,900 of our outstanding 8.15% UDI-denominated Notes that matured in April 2007 and for the repurchase of the Company’s shares. The Group intends to use the remaining net proceeds from this issuance for general corporate purposes, including the repayment of other outstanding indebtedness and the continued repurchase of the Company’s shares, subject to market conditions and other factors. The Company may, at its own option, redeem these Senior Notes, in whole or in part, at any time at a redemption price equal to the greater of the principal amount of the 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 Mexican Government Bonds. | |
(7) | Notes denominated in Mexican Investment Units (“Unidades de Inversión” or “UDIs”), representing 258,711,400 UDIs at December 31, 2006. Interest on these notes was payable semi-annually. The balance as of December 31, 2006 includes restatement of Ps.275,561. | |
(8) | Includes in 2006 and 2007, outstanding balances of long-term loans in the principal amount of Ps.480,000, Ps.1,162,460 and Ps.2,000,000, in connection with certain credit agreements entered into by the Company with a Mexican bank, with various maturities from 2008 through 2012. Interest on these loans is, in a range of 8.925% to 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. The balance in 2006 and 2007 also includes the Sky long-term loans discussed in paragraph (3) above mentioned in the aggregate principal amount of Ps.3,500,000. | |
(9) | Sky is committed 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). |
2008 | Ps. | 488,650 | ||
2009 | 1,167,321 | |||
2010 | 1,034,705 | |||
2011 | 787,412 | |||
2012 | 3,459,190 | |||
Thereafter | 17,984,759 | |||
Ps. | 24,922,037 | |||
2008 | Ps. | 222,813 | ||
2009 | 222,813 | |||
2010 | 222,813 | |||
2011 | 222,813 | |||
2012 | 222,813 | |||
Thereafter | 595,174 | |||
1,709,239 | ||||
Less: amount representing interest | 576,409 | |||
Ps. | 1,132,830 | |||
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2006 | 2007 | |||||||||||||||
Carrying Value | Fair Value | Carrying Value | Fair Value | |||||||||||||
Non-derivative financial instruments: | ||||||||||||||||
Assets: | ||||||||||||||||
Available-for-sale investment in Univision (see Note 2) | Ps. | 12,266,318 | Ps. | 12,266,318 | Ps. | — | Ps. | — | ||||||||
Held-to-maturity securities (see Note 5) | 1,185,767 | 1,185,767 | 2,525,204 | 2,525,204 | ||||||||||||
Liabilities: | ||||||||||||||||
Senior Notes due 2011, 2025 and 2032 | Ps. | 10,894,177 | Ps. | 12,117,806 | Ps. | 10,615,843 | Ps. | 11,654,879 | ||||||||
Senior Notes due 2037 | — | — | 4,500,000 | 4,280,581 | ||||||||||||
Other long-term debt securities | 126,108 | 133,022 | 122,886 | 132,717 | ||||||||||||
UDI-denominated long-term securities | 1,017,093 | 1,033,993 | — | — | ||||||||||||
Long-term notes payable to Mexican banks | 7,410,945 | 7,598,921 | 7,142,460 | 7,403,793 | ||||||||||||
Syndicated loan facility | — | — | 2,457,495 | 2,456,471 | ||||||||||||
Derivative financial instruments: | ||||||||||||||||
Assets: | ||||||||||||||||
Sky’s interest rate swaps(a) | Ps. | 737 | Ps. | 737 | Ps. | 36,040 | Ps. | 36,040 | ||||||||
Sky’s foreign currency forwards(b) | — | — | 999 | 999 | ||||||||||||
Interest rate cross currency swaps(c) | — | — | 19,397 | 19,397 | ||||||||||||
Liabilities: | ||||||||||||||||
Interest rate treasury lock(d) | Ps. | — | Ps. | — | Ps. | 77,595 | Ps. | 77,595 | ||||||||
Interest rate swaps(e) | 327,499 | 327,499 | 197,891 | 197,891 |
(a) | In February 2004, Sky entered into coupon swap agreements to hedge a portion of its U.S. dollar foreign exchange exposure related to its Senior Notes due 2013. Under these transactions, Sky receives 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 makes monthly payments calculated based on an aggregate notional amount of approximately Ps.123,047 at an annual rate of 10.25%. These transactions will terminate in September 2008. As of December 31, 2006 and 2007, Sky recorded the change in fair value of these transactions in the integral cost of financing (foreign exchange loss). | |
(b) | As of December 31, 2007, Sky had foreign currency forward contracts to cover a portion of its foreign currency cash flow requirements for an aggregate amount of U.S.$15 million to exchange U.S. dollars and Mexican pesos in 2008 at an average exchange rate of Ps.10.89 per U.S.$1.00 dollar. | |
(c) | In December 2007, in connection with the issuance of its U.S.$225 million long-term debt, Empresas Cablevisión entered into cross currency swaps agreements to hedge interest rate risk and foreign currency exchange risk on such long-term debt. | |
(d) | In the third quarter of 2007, the Company entered into interest rate lock agreements to hedge the risk that the cost of a future issuance of fixed-rate debt may be adversely affected by changes in interest rates. Under these agreements, the Company agrees to pay or receive an amount equal to the difference between the net present value of the cash flows for a notional principal amount of indebtedness based on the existing yield of a U.S. treasury bond at the date when the agreements are established and at the date when the agreements are settled. | |
The notional amounts of the agreements are not exchanged. Interest rate lock agreements are reflected at fair value in the Group’s consolidated balance sheet and the related gains or losses on these agreements are recognized in income as integral cost of financing (interest expense). At December 31, 2007, the Company had outstanding interest rate lock agreements for an aggregate U.S.$150.0 million notional principal amount of indebtedness. | ||
(e) | In order to reduce the adverse effects of exchange rates on the Senior Notes due 2011, 2025 and 2032, during 2004 and 2005, the Company entered into interest rate swap agreements with various financial institutions that allow the Company to hedge against Mexican peso depreciation on interest payments for a period of five years. Under these transactions, the Company receives semi-annual payments based on the aggregate notional amount U.S.$890 million as of December 31, 2006 and 2007, at an average annual rate of 7.37%, and the Company makes semi-annual payments based on an aggregate notional amount of approximately Ps.9,897,573 as of December 31, 2006 and 2007, at an average annual rate of 8.28%, without an exchange of the notional amount upon which the payments are based. In the years ended December 31, 2006 and 2007, the Company recorded a loss and (gain) of Ps.91,550 and Ps.(1,440), respectively, in the integral cost of financing (foreign exchange loss) derived of the change in fair value of these transactions. 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.$890.0 million. |
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2006 | 2007 | |||||||
Pension plans: | ||||||||
Actuarial present value of benefit obligations: | ||||||||
Vested benefit obligations | Ps. | 318,167 | Ps. | 329,413 | ||||
Non-vested benefit obligations | 352,767 | 374,373 | ||||||
Accumulated benefit obligation | 670,934 | 703,786 | ||||||
Benefit attributable to projected salaries | 163,189 | 168,381 | ||||||
Projected benefit obligation | 834,123 | 872,167 | ||||||
Plan assets | 1,254,603 | 1,153,205 | ||||||
Plan assets in excess of projected benefit obligation | 420,480 | 281,038 | ||||||
Items to be amortized over a period from 5 to 18 years: | ||||||||
Transition obligation | 120,534 | 107,436 | ||||||
Unrecognized prior service cost | (13,851 | ) | (11,828 | ) | ||||
Unrecognized net gain | (644,624 | ) | (435,665 | ) | ||||
(537,941 | ) | (340,057 | ) | |||||
Net projected liability | (117,461 | ) | (59,019 | ) | ||||
Seniority premiums: | ||||||||
Actuarial present value of benefit obligations: | ||||||||
Vested benefit obligations | 145,616 | 148,016 | ||||||
Non-vested benefit obligations | 104,796 | 95,142 | ||||||
Accumulated benefit obligation | 250,412 | 243,158 | ||||||
Benefit attributable to projected salaries | 19,676 | 18,783 | ||||||
Projected benefit obligation | 270,088 | 261,941 | ||||||
Plan assets | 548,355 | 475,525 | ||||||
Plan assets in excess of projected benefit obligation | 278,267 | 213,584 | ||||||
Items to be amortized over a period from 5 to 8 years: | ||||||||
Transition obligation | 105,790 | 83,912 | ||||||
Unrecognized prior service cost | (115,726 | ) | (106,446 | ) | ||||
Unrecognized net gain | (92,444 | ) | (7,569 | ) | ||||
(102,380 | ) | (30,103 | ) | |||||
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2006 | 2007 | |||||||
Net projected asset | 175,887 | 183,481 | ||||||
Severance indemnities: | ||||||||
Actuarial present value of benefit obligations: | ||||||||
Non-vested benefit obligations | 342,472 | 386,180 | ||||||
Accumulated benefit obligation | 342,472 | 386,180 | ||||||
Benefit attributable to projected salaries | 27,907 | 27,521 | ||||||
Projected benefit obligation | 370,379 | 413,701 | ||||||
Plan assets | — | — | ||||||
Projected benefit obligation in excess of plan assets | (370,379 | ) | (413,701 | ) | ||||
Items to be amortized over a period from 5 to 6 years: | ||||||||
Unrecognized net loss (gain) | 14,129 | (25,682 | ) | |||||
Net projected liability | (356,250 | ) | (439,383 | ) | ||||
Total labor liabilities | Ps. | (297,824 | ) | Ps. | (314,921 | ) | ||
2005 | 2006 | 2007 | ||||||||||
Service cost | Ps. | 89,698 | Ps. | 96,435 | Ps. | 97,878 | ||||||
Interest cost | 47,212 | 52,896 | 55,804 | |||||||||
Expected return on plan assets | (60,251 | ) | (81,152 | ) | (168,141 | ) | ||||||
Net amortization and deferral | 20,216 | 8,421 | (9,280 | ) | ||||||||
Net cost (income) | Ps. | 96,875 | Ps. | 76,600 | Ps. | (23,739 | ) | |||||
Thousands of | ||||
U.S. Dollars | ||||
2008 | U.S.$ | 14,665 | ||
2009 | 11,006 | |||
2010 | 5,938 | |||
2011 | 4,740 | |||
2012 and thereafter | 13,726 | |||
U.S.$ | 50,075 | |||
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2008 | Ps. | 174,250 | ||
2009 | 148,242 | |||
2010 | 130,453 | |||
2011 | 75,160 | |||
2012 | 24,086 | |||
Thereafter | 120,709 | |||
Ps. | 672,900 | |||
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F- 25
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Authorized | Repurchased | Acquired by a | Acquired by a | |||||||||||||||||
and | by the | Company’s | Company’s | |||||||||||||||||
Issued(1) | Company(2) | Trust(3) | Subsidiary(4) | Outstanding | ||||||||||||||||
Series “A” Shares | 121,709.7 | (1,254.1 | ) | (7,164.8 | ) | (1,177.6 | ) | 112,113.2 | ||||||||||||
Series “B” Shares | 57,606.3 | (1,103.6 | ) | (3,806.7 | ) | (602.2 | ) | 52,093.8 | ||||||||||||
Series “D” Shares | 87,896.5 | (1,755.7 | ) | (2,339.2 | ) | (925.0 | ) | 82,876.6 | ||||||||||||
Series “L” Shares | 87,896.5 | (1,755.7 | ) | (2,339.2 | ) | (925.0 | ) | 82,876.6 | ||||||||||||
Total shares | 355,109.0 | (5,869.1 | ) | (15,649.9 | ) | (3,629.8 | ) | 329,960.2 | ||||||||||||
Shares in the form of CPOs | 293,824.8 | (5,869.1 | ) | (7,819.8 | ) | (3,092.2 | ) | 277,043.7 | ||||||||||||
CPOs | 2,511.3 | (50.2 | ) | (66.8 | ) | (26.4 | ) | 2,367.9 | ||||||||||||
(1) | As of December 31, 2007, the authorized and issued capital stock amounted to Ps.10,267,570 (nominal Ps.2,427,353). | |
(2) | In 2005, 2006 and 2007, the Company repurchased 3,645.5 million, 6,714.1 million and 7,861.2 million shares in the form of 31.2 million, 57.4 million and 67.2 million CPOs, respectively, in the amount of Ps.1,150,000, Ps.2,692,926 and Ps.4,049,902, respectively, in connection with a share repurchase program that was approved by the Company’s stockholders and exercised at the discretion of management. In April 2006, the Company’s stockholders approved (i) the cancellation of 5,888.5 million shares of capital stock in the form of 50.3 million CPOs, which were repurchased by the Company under this program in 2004, 2005 and 2006; and (ii) up to 15% of the outstanding shares of the Company’s common stock as the amount of shares that can be repurchased by the Company. In April 2007, the Company’s stockholders approved (i) the cancellation of 8,275.8 million shares of capital stock in the form of 70.7 million CPOs, which were repurchased by the Company in 2006 and 2007. | |
(3) | In connection with the Company’s Long-Term Retention Plan described below. | |
(4) | In connection with the Company’s Stock Purchase Plan described below. |
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Stock | Long-term | |||||||||||||||
Purchase Plan | Retention Plan | |||||||||||||||
Arrangements: | ||||||||||||||||
Year of grant | 2003 | 2004 | 2004 | 2007 | ||||||||||||
Number of CPOs granted | 2,360 | 32,918 | 46,784 | 5,971 | ||||||||||||
Contractual life | 3-5 years | 1-3 years | 4-6 years | 3-5 years | ||||||||||||
Assumptions: | ||||||||||||||||
Dividend yield | 3.00 | % | 3.00 | % | 3.00 | % | 3.00 | % | ||||||||
Expected volatility(1) | 31.88 | % | 21.81 | % | 22.12 | % | 21.98 | % | ||||||||
Risk-free interest rate | 9.35 | % | 6.52 | % | 8.99 | % | 7.54 | % | ||||||||
Expected life of awards (in years) | 4.01 years | 2.62 years | 4.68 years | 3.68 years |
(1) | Volatility was determined by reference to historically observed prices of the Group’s CPO. |
2006 | 2007 | |||||||||||||||
Weighted- | Weighted- | |||||||||||||||
Average | Average | |||||||||||||||
CPOs | Exercise Price | CPOs | Exercise Price | |||||||||||||
Stock Purchase Plan: | ||||||||||||||||
Outstanding at beginning of year | 48,182 | 14.99 | 18,416 | 16.30 | ||||||||||||
Granted | — | — | 40 | 10.30 | ||||||||||||
Exercised | (29,050 | ) | 12.39 | (5,074 | ) | 15.85 | ||||||||||
Forfeited | (716 | ) | 13.07 | (66 | ) | 10.30 | ||||||||||
Outstanding at beginning of year | 18,416 | 16.30 | 13,316 | 15.74 | ||||||||||||
Exercisable at end of year | 8,492 | 15.80 | 11,236 | 16.24 | ||||||||||||
Long-Term Retention Plan: | ||||||||||||||||
Outstanding at beginning of year | 46,784 | 12.10 | 47,390 | 11.75 | ||||||||||||
Granted | 1,340 | 11.75 | 5,971 | 56.93 | ||||||||||||
Exercised | — | — | (4,851 | ) | 11.73 | |||||||||||
Forfeited | (734 | ) | 11.75 | (856 | ) | 10.30 | ||||||||||
Outstanding at beginning of year | 47,390 | 11.75 | 47,654 | 14.00 | ||||||||||||
Exercisable at end of year | 9,675 | 11.75 | 4,824 | 10.30 | ||||||||||||
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F- 28
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2005 | 2006 | 2007 | ||||||||||
Net income | Ps. | 6,613,414 | Ps. | 8,908,943 | Ps. | 8,082,463 | ||||||
Other comprehensive (loss) income, net: | ||||||||||||
Foreign currency translation adjustments, net(1) | (192,360 | ) | 595,682 | 204,174 | ||||||||
Result from holding non-monetary assets, net(2) | (573,669 | ) | (67,302 | ) | 23,491 | |||||||
Result from available for-sale investments, net(3) | — | (565,862 | ) | 565,862 | ||||||||
(Loss) gain on equity accounts of investees, net(4) | (204,485 | ) | 57,930 | 5,382 | ||||||||
Total other comprehensive (loss) income, net | (970,514 | ) | 20,448 | 798,909 | ||||||||
Comprehensive income | Ps. | 5,642,900 | Ps. | 8,929,391 | Ps. | 8,881,372 | ||||||
(1) | The amounts for 2005 and 2006 include the foreign exchange gain (loss) of, Ps.450,057 and Ps.(594,267), respectively, which relate to the hedge of the Group’s net investment in Univision as a foreign entity investment through June 30, 2006 (see Notes 1(c) and 18). | |
(2) | Represents the difference between specific costs (net replacement cost or Specific Index) of non-monetary assets and the restatement of such assets using the NCPI, net of deferred tax (provision) benefit of Ps.229,603, Ps.31,439 and Ps.(7,523) for the years ended December 31, 2005, 2006 and 2007, respectively. | |
(3) | The amount for 2006 includes a foreign exchange loss of Ps.(617,148); a foreign exchange gain of Ps.559,845, which relates to the hedge of the Group’s investment in Univision as an available-for-sale investment beginning in July 2006; a loss on monetary position of Ps.(433,492); and a fair value loss effect of Ps.(75,067). In 2007, the net amount of Ps.565,862 was applied to consolidated income as other expense, net (see Note 18). | |
(4) | Represents the gains or losses on the dilution of investments in equity investees, as well as other comprehensive income recognized by equity investees. |
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Table of Contents
Gain | Result from | Cumulative | Cumulative | Cumulative | ||||||||||||||||||||||||
(Loss) on | Available- | Result from | Result from | Effect of | Accumulated | |||||||||||||||||||||||
Equity | Accumulated | For-Sale | Holding Non- | Foreign | Deferred | Other | ||||||||||||||||||||||
Accounts of | Monetary | Financial | Monetary | Currency | Income | Comprehensive | ||||||||||||||||||||||
Investees | Result | Assets | Assets | Translation | Taxes | Loss | ||||||||||||||||||||||
Balance at January 1, 2005 | Ps. | 4,377,223 | Ps. | (35,186 | ) | Ps. | — | Ps. | (2,019,836 | ) | Ps. | (1,956,075 | ) | Ps. | (3,224,437 | ) | Ps. | (2,858,311 | ) | |||||||||
Current year change | (204,485 | ) | — | — | (573,669 | ) | (192,360 | ) | — | (970,514 | ) | |||||||||||||||||
Balance at December 31, 2005 | 4,172,738 | (35,186 | ) | — | (2,593,505 | ) | (2,148,435 | ) | (3,224,437 | ) | (3,828,825 | ) | ||||||||||||||||
Current year change | 57,930 | — | (565,862 | ) | (67,302 | ) | 595,682 | — | 20,448 | |||||||||||||||||||
Balance at December 31, 2006 | 4,230,668 | (35,186 | ) | (565,862 | ) | (2,660,807 | ) | (1,552,753 | ) | (3,224,437 | ) | (3,808,377 | ) | |||||||||||||||
Current year change | 5,382 | — | 565,862 | 23,491 | 204,174 | — | 798,909 | |||||||||||||||||||||
Balance at December 31, 2007 | Ps. | 4,236,050 | Ps. | (35,186 | ) | Ps. | — | Ps. | (2,637,316 | ) | Ps. | (1,348,579 | ) | Ps. | (3,224,437 | ) | Ps. | (3,009,468 | ) | |||||||||
2006 | 2007 | |||||||
Capital stock(1) | Ps. | 3,964,514 | Ps. | 1,398,744 | ||||
(Accumulated losses) retained earnings(1) | (2,526,961 | ) | 1,665,069 | |||||
Cumulative result from holding non-monetary assets | (345,034 | ) | (389,720 | ) | ||||
Accumulated monetary result | (521 | ) | (161 | ) | ||||
Cumulative effect of deferred income taxes | (59,750 | ) | 1,328 | |||||
Net income for the year | 610,353 | 935,927 | ||||||
Ps. | 1,642,601 | Ps. | 3,611,187 | |||||
(1) | During 2007 Sky capitalized accumulated losses. |
2005 | 2006 | 2007 | ||||||||||
Revenues: | ||||||||||||
Royalties (Univision)(a) | Ps. | 1,195,360 | Ps. | 1,466,561 | Ps. | — | ||||||
Soccer transmission rights (Univision) | 98,947 | 99,673 | — | |||||||||
Programming production and transmission rights(b) | 100,625 | 36,460 | 98,836 | |||||||||
Administrative services(c) | 79,611 | 55,602 | 65,586 | |||||||||
Interest income | 1,344 | 17,145 | — | |||||||||
Advertising(d) | 34,976 | 90,938 | 80,122 | |||||||||
Ps. | 1,510,863 | Ps. | 1,766,379 | Ps. | 244,544 | |||||||
Costs: | ||||||||||||
Donations | Ps. | 114,627 | Ps. | 105,901 | Ps. | 98,029 | ||||||
Administrative services(c) | 28,727 | 11,633 | 30,101 | |||||||||
Other | 251,885 | 79,834 | 263,714 | |||||||||
Ps. | 395,239 | Ps. | 197,368 | Ps. | 391,844 | |||||||
(a) | The Group receives royalties from Univision for programming provided pursuant to a program license agreement that expires in December 2017. Royalties are determined based upon a percentage of combined net sales of Univision, which was 9% plus an incremental percentage of up to 3% over additional sales. Univision was no longer considered a related party during 2007 (see Note 2). | |
(b) | Services rendered to Endemol and other affiliates in 2005, 2006 and 2007. | |
(c) | The Group receives revenue from and is charged by affiliates for various services, such as equipment rental, security and other services, at rates which are negotiated. The Group provides management services to affiliates, which reimburse the Group for the incurred payroll and related expenses. | |
(d) | Advertising services rendered to OCEN in 2005, 2006 and 2007, and Volaris in 2006 and 2007. |
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2006 | 2007 | |||||||
Receivables: | ||||||||
Grupo TV Promo, S.A. de C.V. | Ps. | — | Ps. | 103,500 | ||||
Univision (see Note 2) | 108,122 | — | ||||||
Editorial Clío, Libros y Videos, S.A. de C.V. | 7,182 | 9,241 | ||||||
Volaris (see Note 2) | 34,374 | 10,859 | ||||||
OCEN (see Note 5) | 2,027 | 28,666 | ||||||
Other | 40,056 | 42,757 | ||||||
Ps. | 191,761 | Ps. | 195,023 | |||||
Payables: | ||||||||
TechCo (see Note 2) | Ps. | (4,229 | ) | Ps. | (71,159 | ) | ||
News Corp. (see Note 2) | (24,397 | ) | (50,303 | ) | ||||
Other | (10,940 | ) | (5,729 | ) | ||||
Ps. | (39,566 | ) | Ps. | (127,191 | ) | |||
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2005 | 2006 | 2007 | ||||||||||
Loss (gain) on disposition of investments, net (see Note 2) | Ps. | 172,896 | Ps. | — | Ps. | 669,473 | ||||||
Donations (see Note 16) | 129,609 | 135,001 | 150,224 | |||||||||
Financial advisory and professional services(1) | 78,252 | 102,876 | 191,495 | |||||||||
Employees’ profit sharing(2) | 21,493 | 31,649 | 20,821 | |||||||||
Loss on disposition of fixed assets | 119,938 | — | 37,989 | |||||||||
Restructuring severance costs | 44,645 | 46,984 | 27,736 | |||||||||
Impairment adjustments(3) | — | 93,464 | 493,693 | |||||||||
Expenses of debt placement(4) | 195,536 | 496,999 | — | |||||||||
Termination fee income for the cancellation of a call option (see Note 2) | — | — | (462,083 | ) | ||||||||
Other expense (income), net(5) | 8,530 | (18,903 | ) | (175,996 | ) | |||||||
Ps. | 770,899 | Ps. | 888,070 | Ps. | 953,352 | |||||||
(1) | Includes financial advisory services in connection with contemplated dispositions and strategic planning projects and professional services in connection with certain litigation and other matters (see Notes 2, 12 and 16). | |
(2) | 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). | |
(3) | During 2006 and 2007, the Group tested for impairment the carrying value of certain trademarks of its Publishing segment, and goodwill of certain business of its Television Broadcasting segment, respectively. As a result of such testing, an impairment adjustment was made to trademarks in 2006, and goodwill in 2007, of Ps.93,464 and Ps.493,693, respectively. | |
(4) | In 2005, these expenses were related to Senior Notes due 2011 and Notes denominated in Mexican UDIs due 2007, and in 2006, these expenses were related to Senior Notes due 2013 (see Note 8). | |
(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). |
2005 | 2006 | 2007 | ||||||||||
Interest expense(1) | Ps. | 2,304,503 | Ps. | 2,010,425 | Ps. | 2,176,998 | ||||||
Interest income | (1,006,364 | ) | (1,135,400 | ) | (1,844,653 | ) | ||||||
Foreign exchange loss (gain), net(2) | 785,493 | 197,678 | (215,897 | ) | ||||||||
(Gain) loss from monetary position(3) | (159,671 | ) | 68,325 | 293,766 | ||||||||
Ps. | 1,923,961 | Ps. | 1,141,028 | Ps. | 410,214 | |||||||
(1) | Interest expense in 2005, 2006 and 2007, includes Ps.41,109, Ps.41,341 and Ps.13,034, respectively, derived from the UDI index restatement of Company’s UDI-denominated debt securities and a net gain from related derivative contracts of Ps.6,803, in 2005, (see Notes 8 and 9). |
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(2) | Includes in 2005, 2006 and 2007 a net loss (gain) from foreign currency derivative contracts of Ps.768,987, Ps.59,916 and Ps.(39,087), respectively. A foreign exchange (gain) loss in 2005, 2006 and 2007 of Ps.(450,057), Ps.34,422, and Ps.211,520, respectively, related to the hedge of the Group’s net investment in Univision, was recognized in 2005 and 2006 in consolidated stockholders’ equity as other comprehensive income or loss, and in 2007 in consolidated income as other expense, net (see Notes 1(c) and 14). | |
(3) | The gain or loss from monetary position represents the effects of inflation, as measured by the NCPI in the case of Mexican companies, or the general inflation index of each country in the case of foreign subsidiaries, on the monetary assets and liabilities at the beginning of each month. It also includes monetary loss in 2005, 2006 and 2007 of Ps.143,831, Ps.111,652 and Ps.135,548, respectively, arising from temporary differences of non-monetary items in calculating deferred income tax (see Note 19). |
2005 | 2006 | 2007 | ||||||||||
Income tax and asset tax, current | Ps. | 1,661,596 | Ps. | 799,833 | Ps. | 3,707,763 | ||||||
Income tax and asset tax, deferred | (850,520 | ) | 1,292,645 | (358,122 | ) | |||||||
Ps. | 811,076 | Ps. | 2,092,478 | Ps. | 3,349,641 | |||||||
% | % | % | ||||||||||
2005 | 2006 | 2007 | ||||||||||
Tax at the statutory rate on income before provisions | 30 | 29 | 28 | |||||||||
Differences in inflation adjustments for tax and book purposes | 1 | — | 2 | |||||||||
Hedge | 1 | — | — | |||||||||
Special tax consolidation items | (2 | ) | — | — | ||||||||
Unconsolidated income tax | — | — | 1 | |||||||||
Minority interest | (2 | ) | — | (4 | ) | |||||||
Excess in tax provision of prior years | (1 | ) | — | — | ||||||||
Changes in valuation allowances: | ||||||||||||
Asset tax | — | 3 | 3 | |||||||||
Tax loss carryforwards | (1 | ) | 3 | — | ||||||||
Foreign operations | (5 | ) | (2 | ) | (5 | ) | ||||||
Equity in losses (earnings) of affiliates, net | — | 1 | 2 | |||||||||
Use of tax losses(a) | (12 | ) | (16 | ) | — | |||||||
Provision for income tax and the asset tax | 9 | 18 | 27 | |||||||||
(a) | In 2005, this amount represents the effect of the use of tax losses in connection with the acquisition of Comtelvi (see Note 2). In 2006, this amount represents the effect of the use of tax deductions related to certain transactions made by the Group in connection with a corporate reorganization. |
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Amount | Expiration | |||||||
Operating tax loss carryforwards: | ||||||||
Unconsolidated: | ||||||||
Mexican subsidiaries(1) | Ps. | 2,899,932 | From 2008 to 2017 | |||||
Non-Mexican subsidiaries(2) | 1,707,733 | From 2008 to 2028 | ||||||
4,607,665 | ||||||||
Capital tax loss carryforwards: | ||||||||
Unconsolidated Mexican subsidiaries(3) | 112,743 | From 2008 to 2010 | ||||||
Ps. | 4,720,408 | |||||||
(1) | During 2005, 2006 and 2007, certain Mexican subsidiaries utilized unconsolidated operating tax loss carryforwards of Ps.483,304, Ps.3,279,827 and Ps.3,438,922, respectively. In 2005, 2006 and 2007, the carryforward amount includes the operating tax loss carryforwards related to the minority interest of Sky. | |
(2) | Approximately for the equivalent of U.S.$156.4 million related to losses from subsidiaries in Europe, South America and the United States. | |
(3) | These carryforwards can only be used in connection with capital gains to be generated by such subsidiaries. |
2006 | 2007 | |||||||
Assets: | ||||||||
Accrued liabilities | Ps. | 672,091 | Ps. | 700,449 | ||||
Goodwill | 807,453 | 945,687 | ||||||
Tax loss carryforwards | 1,345,198 | 843,549 | ||||||
Allowance for doubtful accounts | 285,310 | 286,933 | ||||||
Customer advances | 1,238,883 | 901,333 | ||||||
Other items | 171,371 | 148,517 | ||||||
Liabilities: | ||||||||
Inventories | (641,907 | ) | (401,788 | ) | ||||
Property, plant and equipment, net | (1,112,795 | ) | (961,509 | ) | ||||
Prepaid expenses | (1,293,728 | ) | (1,403,224 | ) | ||||
Sky | (923,767 | ) | (525,164 | ) | ||||
Deferred income taxes of Mexican companies | 548,109 | 534,783 | ||||||
Deferred income taxes of foreign subsidiaries | (119,690 | ) | 547,532 | |||||
Asset tax | 1,455,384 | 1,477,037 | ||||||
Valuation allowances(a) | (3,428,544 | ) | (3,832,186 | ) | ||||
Deferred income tax liability, net | Ps. | (1,544,741 | ) | Ps. | (1,272,834 | ) | ||
(a) | Reflects valuation allowances of foreign subsidiaries of Ps.357,753 and Ps.565,912 at December 31, 2006 and 2007, respectively. |
Tax Loss | ||||||||||||||||
Carryforwards | Asset Tax | Goodwill | Total | |||||||||||||
Balance at beginning of year | Ps. | (1,467,715 | ) | Ps. | (1,153,376 | ) | Ps. | (807,453 | ) | Ps. | (3,428,544 | ) | ||||
Increases | — | (323,661 | ) | (138,234 | ) | (461,895 | ) | |||||||||
Decreases | 58,253 | — | — | 58,253 | ||||||||||||
Balance at end of year | Ps. | (1,409,462 | ) | Ps. | (1,477,037 | ) | Ps. | (945,687 | ) | Ps. | (3,832,186 | ) | ||||
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Charge to the gain from monetary position(1) | Ps. | 79,582 | ||
Credit to the stockholder’s equity | (890 | ) | ||
Charge to the result from holding non-monetary assets | 7,523 | |||
Credit to the provision for deferred income tax | (358,122 | ) | ||
Ps. | (271,907 | ) | ||
(1) | Net of Ps.135,548, representing the effect on restatement of the non-monetary items included in the deferred tax calculation. |
2005 | 2006 | 2007 | ||||||||||
Total Shares | 341,158,189 | 339,776,222 | 333,652,535 | |||||||||
CPOs | 2,463,608 | 2,451,792 | 2,399,453 | |||||||||
Shares not in the form of CPO units: | ||||||||||||
Series “A” Shares | 52,915,759 | 52,915,849 | 52,915,849 | |||||||||
Series “B” Shares | 108 | 187 | 187 | |||||||||
Series “D” Shares | 113 | 239 | 239 | |||||||||
Series “L” Shares | 113 | 239 | 239 |
2005 | 2006 | 2007 | ||||||||||||||||||||||||||||
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. | 2.46 | Ps. | 0.02 | Ps. | 3.07 | Ps. | 0.03 | Ps. | 2.84 | Ps. | 0.02 | ||||||||||||||||||
Cumulative loss of accounting change | (0.19 | ) | — | — | — | — | — | |||||||||||||||||||||||
Majority interest net income | Ps. | 2.27 | Ps. | 0.02 | Ps. | 3.07 | Ps. | 0.03 | Ps. | 2.84 | Ps. | 0.02 | ||||||||||||||||||
Foreign | ||||||||||||
Currency | Year-End | Mexican | ||||||||||
Amounts | Exchange Rate | Pesos | ||||||||||
(Thousands) | ||||||||||||
Assets: | ||||||||||||
U.S. dollars | 2,110,165 | Ps. | 10.9222 | Ps. | 23,047,644 | |||||||
Euros | 93,731 | 15.9339 | 1,493,499 | |||||||||
Argentinean pesos | 73,230 | 3.4684 | 253,990 | |||||||||
Chilean pesos | 8,849,926 | 0.0219 | 193,813 | |||||||||
Colombian pesos | 18,060,219 | 0.0054 | 97,525 | |||||||||
Other currencies | 127,209 | |||||||||||
Liabilities: | ||||||||||||
U.S. dollars | 1,758,217 | Ps. | 10.9222 | Ps. | 19,203,597 | |||||||
Euros | 8,367 | 15.9339 | 133,321 | |||||||||
Argentinean pesos | 54,438 | 3.4684 | 188,814 | |||||||||
Chilean pesos | 11,711,578 | 0.0219 | 256,484 | |||||||||
Colombian pesos | 22,999,781 | 0.0054 | 124,199 | |||||||||
Other currencies | 47,210 |
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Foreign | ||||||||||||
Currency | Year-End | Mexican | ||||||||||
Amounts | Exchange Rate | Pesos(1) | ||||||||||
(Thousands) | ||||||||||||
Property, plant and equipment: | ||||||||||||
U.S. dollars | 346,300 | Ps. | 10.9222 | Ps. | 3,782,358 | |||||||
Japanese yen | 3,232,850 | 0.0977 | 315,849 | |||||||||
Euros | 16,726 | 15.9339 | 266,510 | |||||||||
Other currencies | 387,212 | |||||||||||
Transmission rights and programming: | ||||||||||||
U.S. dollars | 481,416 | Ps. | 10.9222 | Ps. | 5,258,122 |
(1) | Amounts translated at the year-end exchange rates for reference purposes only; does not indicate the actual amounts accounted for in the financial statements. |
U.S. Dollar | ||||||||||||||||
Equivalent of other | ||||||||||||||||
Foreign Currency | Total | Mexican | ||||||||||||||
U.S. Dollar | Transactions | U.S. Dollar | Pesos(1) | |||||||||||||
(Thousands) | (Thousands) | (Thousands) | ||||||||||||||
Income: | ||||||||||||||||
Revenues | $ | 488,760 | $ | 81,529 | $ | 570,289 | Ps. | 6,228,811 | ||||||||
Other income | 15,632 | 47,473 | 63,105 | 689,245 | ||||||||||||
Interest income | 84,380 | 4,655 | 89,035 | 972,458 | ||||||||||||
$ | 588,772 | $ | 133,657 | $ | 722,429 | Ps. | 7,890,514 | |||||||||
Purchases, costs and expenses: | ||||||||||||||||
Purchases of inventories | $ | 178,048 | $ | 13,695 | $ | 191,743 | Ps. | 2,094,255 | ||||||||
Purchases of property and equipment | 76,348 | 18,063 | 94,411 | 1,031,176 | ||||||||||||
Investments | 409,466 | 96,168 | 505,634 | 5,522,636 | ||||||||||||
Costs and expenses | 453,656 | 67,806 | 521,462 | 5,695,512 | ||||||||||||
Interest expense | 88,689 | 286 | 88,975 | 971,803 | ||||||||||||
$ | 1,206,207 | $ | 196,018 | $ | 1,402,225 | Ps. | 15,315,382 | |||||||||
(1) | Income statement amounts translated at the year-end exchange rate of Ps.10.9222 for reference purposes only; does not indicate the actual amounts accounted for in the financial statements (see Note 1(c)). |
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Intersegment | Consolidated | Segment | ||||||||||||||
Total Revenues | Revenues | Revenues | Profit (Loss) | |||||||||||||
2005: | ||||||||||||||||
Television Broadcasting | Ps. | 20,049,877 | Ps. | 592,102 | Ps. | 19,457,775 | Ps. | 9,557,689 | ||||||||
Pay Television Networks | 1,199,676 | 316,382 | 883,294 | 559,336 | ||||||||||||
Programming Exports | 2,025,325 | — | 2,025,325 | 721,939 | ||||||||||||
Publishing | 2,705,051 | 41,642 | 2,663,409 | 518,302 | ||||||||||||
Publishing Distribution | 434,226 | 11,038 | 423,188 | 7,127 | ||||||||||||
Sky | 6,463,328 | 34,490 | 6,428,838 | 2,717,250 | ||||||||||||
Cable and Telecom | 1,517,058 | 3,114 | 1,513,944 | 528,551 | ||||||||||||
Other Businesses | 1,801,866 | 129,626 | 1,672,240 | (138,379 | ) | |||||||||||
Segment totals | 36,196,407 | 1,128,394 | 35,068,013 | 14,471,815 | ||||||||||||
Reconciliation to consolidated amounts: | ||||||||||||||||
Eliminations and corporate expenses | (1,128,394 | ) | (1,128,394 | ) | — | (197,004 | ) | |||||||||
Depreciation and amortization expense | — | — | — | (2,611,629 | ) | |||||||||||
Consolidated total | Ps. | 35,068,013 | Ps. | — | Ps. | 35,068,013 | Ps. | 11,663,182 | (1) | |||||||
2006: | ||||||||||||||||
Television Broadcasting | Ps. | 21,760,426 | Ps. | 579,576 | Ps. | 21,180,850 | Ps. | 10,996,343 | ||||||||
Pay Television Networks | 1,379,003 | 289,526 | 1,089,477 | 707,897 | ||||||||||||
Programming Exports | 2,190,272 | — | 2,190,272 | 901,965 | ||||||||||||
Publishing | 2,993,912 | 19,711 | 2,974,201 | 576,677 | ||||||||||||
Publishing Distribution | 449,830 | 11,881 | 437,949 | 18,676 | ||||||||||||
Sky | 7,732,878 | 93,825 | 7,639,053 | 3,689,128 | ||||||||||||
Cable and Telecom | 2,059,350 | 5,040 | 2,054,310 | 847,527 | ||||||||||||
Other Businesses | 1,922,296 | 130,709 | 1,791,587 | (224,898 | ) | |||||||||||
Segment totals | 40,487,967 | 1,130,268 | 39,357,699 | 17,513,315 | ||||||||||||
Reconciliation to consolidated amounts: | ||||||||||||||||
Eliminations and corporate expenses | (1,130,268 | ) | (1,130,268 | ) | — | (467,828 | ) | |||||||||
Depreciation and amortization expense | — | — | — | (2,779,772 | ) | |||||||||||
Consolidated total | Ps. | 39,357,699 | Ps. | — | Ps. | 39,357,699 | Ps. | 14,265,715 | (1) | |||||||
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 | ||||||||||||
Publishing Distribution | 479,223 | 13,104 | 466,119 | 28,540 | ||||||||||||
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 | 2,560,444 | 73,373 | 2,487,071 | (265,939 | ) | |||||||||||
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) | |||||||
(1) | Consolidated totals represent consolidated operating income. |
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Additions to | ||||||||||||
Segment | Segment | Property, | ||||||||||
Assets | Liabilities | Plant and | ||||||||||
at Year-End | at Year-End | Equipment | ||||||||||
2005: | ||||||||||||
Continuing operations: | ||||||||||||
Television operations(1) | Ps. | 50,112,094 | Ps. | 24,107,651 | Ps. | 944,879 | ||||||
Publishing | 2,228,025 | 374,842 | 11,419 | |||||||||
Publishing Distribution | 988,561 | 459,139 | 6,251 | |||||||||
Sky | 4,916,283 | 6,452,931 | 1,281,951 | |||||||||
Cable and Telecom | 2,519,036 | 506,766 | 600,991 | |||||||||
Other Businesses | 4,432,975 | 557,889 | 110,681 | |||||||||
Total | Ps. | 65,196,974 | Ps. | 32,459,218 | Ps. | 2,956,172 | ||||||
2006: | ||||||||||||
Continuing operations: | ||||||||||||
Television operations(1) | Ps. | 60,019,459 | Ps. | 24,294,817 | Ps. | 1,150,077 | ||||||
Publishing | 2,185,263 | 365,010 | 36,507 | |||||||||
Publishing Distribution | 1,002,951 | 473,718 | 16,564 | |||||||||
Sky | 6,445,978 | 5,619,942 | 1,038,535 | |||||||||
Cable and Telecom | 3,050,590 | 763,844 | 860,518 | |||||||||
Other Businesses | 5,254,961 | 963,293 | 326,331 | |||||||||
Total | Ps. | 77,959,202 | Ps. | 32,480,624 | Ps. | 3,428,532 | ||||||
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 | |||||||||
Publishing Distribution | 1,183,543 | 605,032 | 65,568 | |||||||||
Sky | 8,893,874 | 6,178,789 | 1,338,938 | |||||||||
Cable and Telecom | 7,806,023 | 4,706,581 | 851,379 | |||||||||
Other Businesses | 5,502,059 | 832,827 | 353,952 | |||||||||
Total | Ps. | 86,609,615 | Ps. | 39,294,873 | Ps. | 3,915,439 | ||||||
(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. |
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2006 | 2007 | |||||||
Segment assets | Ps. | 77,959,202 | Ps. | 86,609,615 | ||||
Investments attributable to: | ||||||||
Television operations(1) | 1,737,448 | 3,781,767 | ||||||
Cable and Telecom | 2,992,310 | 3,583,173 | ||||||
Other segments | 1,252,119 | 772,648 | ||||||
Goodwill net attributable to: | ||||||||
Television operations | 1,403,488 | 909,792 | ||||||
Publishing | 24,579 | 690,144 | ||||||
Cable and Telecom | — | 1,780,024 | ||||||
Other Businesses | 817,006 | 576,313 | ||||||
Total assets | Ps. | 86,186,152 | Ps. | 98,703,476 | ||||
(1) | Includes goodwill attributable to equity investments of Ps.41,105 and Ps.22,004 in 2006 and 2007, respectively. |
2006 | 2007 | |||||||
Segment liabilities | Ps. | 32,480,624 | Ps. | 39,294,873 | ||||
Notes payable and long-term debt not attributable to segments | 15,690,651 | 18,758,303 | ||||||
Total liabilities | Ps. | 48,171,275 | Ps. | 58,053,176 | ||||
Additions to | ||||||||||||
Total | Segment Assets | Property, Plant | ||||||||||
Net Sales | at Year-End | and Equipment | ||||||||||
2005: | ||||||||||||
Mexico | Ps. | 31,004,846 | Ps. | 58,287,493 | Ps. | 2,924,115 | ||||||
Other countries | 4,063,167 | 6,909,481 | 32,057 | |||||||||
Ps. | 35,068,013 | Ps. | 65,196,974 | Ps. | 2,956,172 | |||||||
2006: | ||||||||||||
Mexico | Ps. | 34,793,376 | Ps. | 72,199,969 | Ps. | 3,391,671 | ||||||
Other countries | 4,564,323 | 5,759,233 | 36,861 | |||||||||
Ps. | 39,357,699 | Ps. | 77,959,202 | Ps. | 3,428,532 | |||||||
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 | |||||||
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2005 | 2006 | 2007 | ||||||||||
Majority interest net income as reported under Mexican FRS | Ps. | 6,613,414 | Ps. | 8,908,943 | Ps. | 8,082,463 | ||||||
U.S. GAAP adjustments: | ||||||||||||
(a) Capitalization of financing costs, net of depreciation | 10,139 | 68,758 | 92,713 | |||||||||
(b) Deferred costs, net of amortization | (4,032 | ) | 19,149 | 97,672 | ||||||||
(c) Deferred debt refinancing costs, net of amortization | (604,648 | ) | 31,396 | 31,420 | ||||||||
(d) Equipment inflation restatement, net of depreciation | (518,917 | ) | (121,055 | ) | (43,042 | ) | ||||||
(e) Purchase accounting adjustments: | ||||||||||||
Amortization of network affiliation agreements | (7,159 | ) | (7,159 | ) | (7,159 | ) | ||||||
Depreciation of fixed assets | (12,118 | ) | (12,118 | ) | (12,118 | ) | ||||||
Amortization of other assets | (5,034 | ) | (5,003 | ) | (5,006 | ) | ||||||
Amortization of subscribers list | — | (104,179 | ) | (156,268 | ) | |||||||
Impairment of goodwill | — | — | 493,693 | |||||||||
(g) Equity method investees: | ||||||||||||
Sky Multi-Country Partners (“SMCP”) | 1,408,545 | — | — | |||||||||
Cablemás | — | — | (25,057 | ) | ||||||||
(h) Univision investment: | ||||||||||||
Sale of investment | — | — | (298,336 | ) | ||||||||
Hedge accounting | — | 559,845 | — | |||||||||
(i) Derivative financial instruments(1) | (265,395 | ) | (1,397,789 | ) | — | |||||||
(j) Pension plan and seniority premiums | 36,217 | — | — | |||||||||
(k) Employee stock-based compensation | 47,156 | — | — | |||||||||
(l) Production and film costs | 330,105 | 281,297 | 23,895 | |||||||||
(m) Deferred income taxes and employees’ profit sharing: | ||||||||||||
Deferred income taxes(1) | 268,883 | 77,260 | (5,905 | ) | ||||||||
Deferred employees’ profit sharing(1) | 76,987 | 10,342 | (33,252 | ) | ||||||||
(n) Maintenance reserve | 5,345 | (2,744 | ) | (3,949 | ) | |||||||
(o) Minority interest on U.S. GAAP adjustments | (11,239 | ) | 1,134 | 1,632 | ||||||||
Total U.S. GAAP adjustments, net | 754,835 | (600,866 | ) | 150,933 | ||||||||
Net income under U.S. GAAP | Ps. | 7,368,249 | Ps. | 8,308,077 | Ps. | 8,233,396 | ||||||
(1) | Net of inflation effects |
2006 | 2007 | |||||||
Total stockholders’ equity under Mexican FRS | Ps. | 38,014,877 | Ps. | 40,650,300 | ||||
U.S. GAAP adjustments: | ||||||||
(a) Capitalization of financing costs, net of accumulated depreciation | (848,806 | ) | (756,093 | ) | ||||
(b) Deferred costs, net of amortization | (113,490 | ) | (15,818 | ) | ||||
(c) Deferred debt refinancing costs, net of amortization | (573,252 | ) | (541,832 | ) | ||||
(d) Equipment inflation restatement, net of depreciation | 268,413 | — | ||||||
(e) Purchase accounting adjustments: | ||||||||
Broadcast license and network affiliation agreements | 131,248 | 124,089 | ||||||
Fixed assets | 54,525 | 42,407 | ||||||
Other assets | 47,533 | 45,463 | ||||||
Goodwill on acquisition of Bay City | (1,104,843 | ) | (611,150 | ) | ||||
Goodwill on acquisition of minority interest in Editorial Televisa | 1,358,428 | 1,358,428 | ||||||
Subscribers list | 520,894 | 364,626 | ||||||
Goodwill on acquisition of minority 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 | ) | |||||
(j) Pension plan and seniority premiums | 640,321 | 395,842 | ||||||
(l) Production and film costs | (1,538,667 | ) | (1,514,772 | ) | ||||
(m) Deferred income taxes and employees’ profit sharing: | ||||||||
Deferred income taxes | 388,994 | 514,647 | ||||||
Deferred employees’ profit sharing | (115,027 | ) | (148,279 | ) | ||||
(n) Maintenance reserve | 22,011 | 18,062 | ||||||
(o) Minority interest | (1,688,208 | ) | (3,655,162 | ) | ||||
Total U.S. GAAP adjustments, net | (2,215,768 | ) | (4,070,441 | ) | ||||
Total stockholders’ equity under U.S. GAAP | Ps. | 35,799,109 | Ps. | 36,579,859 | ||||
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Changes in U.S. GAAP stockholders’ equity | 2006 | 2007 | ||||||
Balance at January 1, | Ps. | 30,589,544 | Ps. | 35,799,109 | ||||
Net income for the year | 8,308,077 | 8,233,396 | ||||||
Repurchase of capital stock | (3,224,515 | ) | (3,948,331 | ) | ||||
Dividends | (1,161,839 | ) | (4,506,492 | ) | ||||
Sale of capital stock under stock-based compensation plan | 587,263 | 99,771 | ||||||
Stock based compensation | 243,882 | 140,517 | ||||||
Benefit from capital contribution of minority interest in Sky | 385,596 | — | ||||||
Other comprehensive income: | ||||||||
Changes in other comprehensive income of equity investees | 598,035 | 5,382 | ||||||
Net unrealized loss on available-for-sale financial asset, net of tax | (1,466,475 | ) | 565,862 | |||||
Result from holding non-monetary assets, net of tax | (72,322 | ) | (138,776 | ) | ||||
Foreign currency translation adjustment | 595,350 | 505,446 | ||||||
Pension and post retirement adjustment | 416,513 | (176,025 | ) | |||||
Balance at December 31, | Ps. | 35,799,109 | Ps. | 36,579,859 | ||||
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F- 43
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2006 | 2007 | |||||||
Consolidated subsidiaries: | ||||||||
Television Broadcasting | Ps. | 337,094 | Ps. | 337,094 | ||||
Cable and Telecom(1) | — | 1,552,054 | ||||||
Publishing | 1,389,538 | 2,055,103 | ||||||
Other segments | 155,224 | 155,224 | ||||||
Equity method investees | 865,422 | 852,696 | ||||||
Ps. | 2,747,278 | Ps. | 4,952,171 | |||||
2006 | 2007 | |||||||
Trademarks(2)(3) | Ps. | 620,726 | Ps. | 824,263 | ||||
Television network concession(2) | 742,605 | 742,605 | ||||||
TVI concession(4) | 147,108 | 262,925 | ||||||
Telecom concession | — | 29,113 | ||||||
Network affiliation agreements(2) | 119,913 | 119,913 | ||||||
Licenses and software | 369,584 | 393,843 | ||||||
Subscriber list | 885,189 | 705,027 | ||||||
Deferred financing costs | 271,060 | 288,462 | ||||||
Broadcast license | 11,335 | 4,176 | ||||||
Leasehold improvements | 152,928 | 682,594 | ||||||
Other | 80,557 | 108,522 | ||||||
Ps. | 3,401,005 | Ps. | 4,161,443 | |||||
(1) | In 2007, the Group acquired the majority of the assets of Bestel. As a result of such acquisition, the Group recorded goodwill of Ps.1,552,054. | |
(2) | Indefinite-lived. | |
(3) | Includes translation effect, impairment adjustments and acquisitions (see Note 7). | |
(4) | Represents a cable television company with a license to operate in the city of Monterrey and surrounding areas. The license expires in 2026. The Group acquired a 50% interest in this venture. |
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F- 45
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2005 | 2006 | 2007 | ||||||||||
Service cost | Ps. | 89,698 | Ps. | 96,435 | Ps. | 97,878 | ||||||
Interest cost | 47,212 | 52,896 | 55,804 | |||||||||
Expected return on plan assets | (60,251 | ) | (81,152 | ) | (168,141 | ) | ||||||
Net amortization and deferral | (16,001 | ) | 8,421 | (9,280 | ) | |||||||
Net cost under U.S. GAAP | 60,658 | 76,600 | (23,739 | ) | ||||||||
Net cost under Mexican FRS | 96,875 | 76,600 | (23,739 | ) | ||||||||
Reduction of net cost that would be recognized under U.S. GAAP | Ps. | (36,217 | ) | Ps. | — | Ps. | — | |||||
2006 | 2007 | |||||||
Projected benefit obligation | Ps. | 1,104,212 | Ps. | 1,134,108 | ||||
Plan assets | (1,802,958 | ) | (1,628,730 | ) | ||||
Funded status | (698,746 | ) | (494,622 | ) | ||||
Prepaid pension asset | (698,746 | ) | (494,622 | ) | ||||
Severance indemnities — projected benefit obligation | 356,250 | 413,701 | ||||||
Balance sheet asset | Ps. | (342,496 | ) | Ps. | (80,921 | ) | ||
Change in benefit obligation: | ||||||||
Projected benefit obligation at beginning of year | Ps. | 1,041,211 | Ps. | 1,104,212 | ||||
Service cost | 96,435 | 69,709 | ||||||
Interest cost | 52,896 | 42,245 | ||||||
Actuarial gain | (67,788 | ) | (54,529 | ) | ||||
Benefits paid | (18,542 | ) | (27,529 | ) | ||||
Projected benefit obligation at end of year | Ps. | 1,104,212 | Ps. | 1,134,108 | ||||
Change in plan assets: | ||||||||
Fair value of plan assets at beginning of year | Ps. | 1,539,513 | Ps. | 1,802,958 | ||||
Actual return on plan assets | 304,855 | (140,779 | ) | |||||
Benefits paid | (41,410 | ) | (33,449 | ) | ||||
Fair value of plan assets at end of year | Ps. | 1,802,958 | Ps. | 1,628,730 | ||||
2006 | 2007 | |||||||
Equity securities | 72.5 | % | 68.8 | % | ||||
Fixed rate instruments | 27.5 | % | 31.2 | % | ||||
Total | 100.0 | % | 100.0 | % | ||||
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Before | After | |||||||||||
Application | Application | |||||||||||
of SFAS No. 158 | Adjustments | of SFAS No. 158 | ||||||||||
Consolidated Balance Sheet Data | ||||||||||||
Prepaid pension plans and seniority premiums | Ps. | — | Ps. | 342,496 | Ps. | 342,496 | ||||||
Other assets | 91,463,087 | — | 91,463,087 | |||||||||
Total assets | Ps. | 91,463,087 | Ps. | 342,496 | Ps. | 91,805,583 | ||||||
Deferred income taxes | Ps. | 5,632,095 | Ps. | 161,978 | Ps. | 5,794,073 | ||||||
Pension plans and seniority premiums | 235,995 | (235,995 | ) | — | ||||||||
Other liabilities | 48,524,193 | — | 48,524,193 | |||||||||
Total liabilities | 54,392,283 | (74,017 | ) | 54,318,266 | ||||||||
Minority interest | 1,688,208 | — | 1,688,208 | |||||||||
Total stockholders’ equity | 35,382,596 | 416,513 | 35,799,109 | |||||||||
Total liabilities and stockholders’ equity | Ps. | 91,463,087 | Ps. | 342,496 | Ps. | 91,805,583 | ||||||
2006 | 2007 | |||||||
Accumulated other comprehensive income as of beginning of year (net of income tax) | Ps. | — | Ps. | 416,513 | ||||
Increase / (decrease) due to adoption of SFAS No. 158 | 401,424 | — | ||||||
Net gain/(loss) | — | (72,646 | ) | |||||
Amortization of net (gain)/loss | — | (22,561 | ) | |||||
Amortization of prior service cost | — | 7,790 | ||||||
Inflation adjustment | 15,089 | — | ||||||
Accumulated other comprehensive income as of end of year (net of income tax) | Ps. | 416,513 | Ps. | 329,096 | ||||
2006 | 2007 | |||||||
Prior service costs, net of income tax | Ps. | (37,630 | ) | Ps. | (29,840 | ) | ||
Net actuarial gains, net of income tax | 454,143 | 358,936 | ||||||
Accumulated other comprehensive income as of end of year (net of income tax) | Ps. | 416,513 | Ps. | 329,096 | ||||
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December 31, | December 31, | |||||||
2006 | 2007 | |||||||
Net deferred income tax liability recorded under Mexican FRS on Mexican FRS balances (see Note 19) | Ps. | (1,544,741 | ) | Ps. | (1,272,834 | ) | ||
Reclassification of non-current taxes related to non-wholly owned subsidiaries (Sky) | 923,767 | 525,164 | ||||||
Net deferred income tax amount under SFAS No. 109 applied to Mexican FRS balances | (620,974 | ) | (747,670 | ) | ||||
Impact of U.S. GAAP adjustments: | ||||||||
Capitalization of financing costs | 237,666 | 211,706 | ||||||
Deferred costs | 31,778 | 4,429 | ||||||
Equipment inflation restatement | (75,156 | ) | — | |||||
Purchase accounting adjustments | (65,328 | ) | (59,349 | ) | ||||
Pension plan and seniority premiums | (179,290 | ) | (110,836 | ) | ||||
Production and film costs | 430,827 | 424,136 | ||||||
Maintenance reserve | (6,163 | ) | (5,057 | ) | ||||
Subscriber list | (145,850 | ) | (102,095 | ) | ||||
Deferred debt refinancing costs, net of amortization | 160,510 | 151,713 | ||||||
388,994 | 514,647 | |||||||
Net deferred income tax liability under U.S. GAAP | (231,980 | ) | (233,023 | ) | ||||
Less: | ||||||||
Deferred income tax amount under SFAS No. 109 applied to Mexican FRS balances | (620,974 | ) | (747,670 | ) | ||||
Net deferred income tax adjustment required under U.S. GAAP | Ps. | 388,994 | Ps. | 514,647 | ||||
Charge to the provision for deferred income tax | Ps. | (125,968 | ) | |
Credit to the result from holding non-monetary assets | 55,581 | |||
Credit to the stockholders’ equity | 69,344 | |||
Ps. | (1,043 | ) | ||
December 31, | December 31, | |||||||
2006 | 2007 | |||||||
Deferred EPS liability: | ||||||||
Current: | ||||||||
Inventories | Ps. | 2,124 | Ps. | 2,047 | ||||
Noncurrent: | ||||||||
Property, plant and equipment | (117,522 | ) | (110,669 | ) | ||||
Deferred costs | (59,444 | ) | (57,143 | ) | ||||
Pension plan and seniority premiums | 79,015 | 33,984 | ||||||
Other | (19,200 | ) | (16,498 | ) | ||||
Total deferred EPS liability | Ps. | (115,027 | ) | Ps. | (148,279 | ) | ||
2005 | 2006 | 2007 | ||||||||||
Current: | ||||||||||||
Mexican | Ps. | 1,124,134 | Ps. | 95,694 | Ps. | 3,111,895 | ||||||
Foreign | 215,068 | 200,418 | 197,265 | |||||||||
1,339,202 | 296,112 | 3,309,160 | ||||||||||
Deferred: | ||||||||||||
Mexican | (786,430 | ) | 1,820,616 | 124,799 | ||||||||
Foreign | 2,148 | 3,174 | 1,169 | |||||||||
(784,282 | ) | 1,823,790 | 125,968 | |||||||||
Ps. | 554,920 | Ps. | 2,119,902 | Ps. | 3,435,128 | |||||||
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Mexico | 2003 and all following years | |
United States of America | 2004 and all following years for federal tax examinations, and 2003 and all following years for state tax examinations | |
Argentina | 2002 and all following years | |
Chile | 2003 and all following years |
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Year Ended December 31, | ||||||||||||
2005 | 2006 | 2007 | ||||||||||
Net sales | Ps. | 35,068,013 | Ps. | 39,357,699 | Ps. | 41,561,526 | ||||||
Cost of providing services (exclusive of depreciation and amortization) | 15,555,693 | 16,512,644 | 18,108,061 | |||||||||
Selling and administrative expenses | 5,460,455 | 5,752,728 | 5,826,861 | |||||||||
Depreciation and amortization | 3,246,033 | 3,024,800 | 3,304,581 | |||||||||
Income from operations | 10,805,832 | 14,067,527 | 14,322,023 | |||||||||
Integral result of financing, net | (2,846,969 | ) | (2,290,042 | ) | (250,909 | ) | ||||||
Other income (expense), net | 972,989 | (115,444 | ) | (693,939 | ) | |||||||
Income before income taxes, minority interest and equity in earnings or losses of affiliates | 8,931,852 | 11,662,041 | 13,377,175 | |||||||||
Income tax and assets tax — current and deferred | (554,920 | ) | (2,119,902 | ) | (3,435,128 | ) | ||||||
Income before minority interest and equity in earnings or losses of affiliates | 8,376,932 | 9,542,139 | 9,942,047 | |||||||||
Minority interest | (1,181,596 | ) | (609,219 | ) | (934,295 | ) | ||||||
Equity in earnings (losses) of affiliates | 172,913 | (624,843 | ) | (774,356 | ) | |||||||
Net income | Ps. | 7,368,249 | Ps. | 8,308,077 | Ps. | 8,233,396 | ||||||
Weighted average common shares outstanding (in millions) | 341,158 | 339,776 | 333,653 | |||||||||
2005 | 2006 | 2007 | ||||||||||||||||||||||
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 | 6,000,075 | 1,101,231 | 6,760,300 | 1,246,779 | 6,865,699 | 1,305,558 | ||||||||||||||||||
Net income available to common shareholders | 6,000,075 | 1,101,231 | 6,760,300 | 1,246,779 | 6,865,699 | 1,305,558 | ||||||||||||||||||
Weighted average number of common shares outstanding | 2,463,608 | 52,915,867 | 2,451,792 | 52,916,036 | 2,399,453 | 52,916,036 | ||||||||||||||||||
Basic earnings per share (continuing operations) | Ps. | 2.44 | Ps. | 0.02 | Ps. | 2.76 | Ps. | 0.02 | Ps. | 2.86 | Ps. | 0.02 | ||||||||||||
�� | ||||||||||||||||||||||||
Basic earnings per share (net income) | Ps. | 2.44 | Ps. | 0.02 | Ps. | 2.76 | Ps. | 0.02 | Ps. | 2.86 | Ps. | 0.02 | ||||||||||||
Diluted EPS | ||||||||||||||||||||||||
Dilutive Potential Shares | 63,064 | — | 47,354 | — | 40,018 | — | ||||||||||||||||||
Total Diluted weighted average common shares outstanding | 2,526,672 | 52,915,867 | 2,499,146 | 52,916,036 | 2,439,471 | 52,916,036 | ||||||||||||||||||
Diluted earnings per share (continuing operations) | Ps. | 2.37 | Ps. | 0.02 | Ps. | 2.71 | Ps. | 0.02 | Ps. | 2.81 | Ps. | 0.02 | ||||||||||||
Diluted earnings per share (net income) | Ps. | 2.37 | Ps. | 0.02 | Ps. | 2.71 | Ps. | 0.02 | Ps. | 2.81 | Ps. | 0.02 | ||||||||||||
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December 31, | December 31, | |||||||
2006 | 2007 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | Ps. | 15,461,345 | Ps. | 25,479,541 | ||||
Other investments | 943,728 | 1,825,355 | ||||||
Trade notes and accounts receivable, net | 14,108,702 | 17,294,674 | ||||||
Other accounts and notes receivable, net | 1,544,287 | 2,590,330 | ||||||
Due from affiliated companies | 458,139 | 195,023 | ||||||
Transmission rights and programming | 3,167,943 | 3,154,681 | ||||||
Inventories | 801,943 | 833,996 | ||||||
Available-for-sale investments | 12,266,318 | — | ||||||
Current deferred taxes | 2,432,490 | 2,313,598 | ||||||
Other current assets | 800,068 | 653,260 | ||||||
Total current assets | 51,984,963 | 54,340,458 | ||||||
Non-current assets: | ||||||||
Transmission rights and programming | 2,019,071 | 3,737,976 | ||||||
Investments | 4,750,812 | 7,322,304 | ||||||
Property, plant and equipment, net | 21,238,557 | 24,457,649 | ||||||
Goodwill, net | 2,747,278 | 4,952,171 | ||||||
Intangible assets, net | 3,401,005 | 4,161,443 | ||||||
Deferred taxes | 4,308,304 | 3,906,544 | ||||||
Financial instruments | 940,238 | 765,777 | ||||||
Prepaid pension and seniority premiums | 342,496 | 80,921 | ||||||
Other assets | 72,859 | 83,745 | ||||||
Total assets | Ps. | 91,805,583 | Ps. | 103,808,988 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Current liabilities: | ||||||||
Current portion of long-term debt | Ps. | 1,023,445 | Ps. | 488,650 | ||||
Current portion of satellite transponder lease obligation | 89,415 | 97,696 | ||||||
Trade accounts payable | 3,580,467 | 4,457,519 | ||||||
Customer deposits and advances | 17,528,635 | 17,145,053 | ||||||
Taxes payable | 1,223,814 | 684,497 | ||||||
Current deferred taxes | 1,293,728 | 1,579,727 | ||||||
Accrued interest | 271,915 | 307,814 | ||||||
Other accrued liabilities | 2,102,700 | 2,155,864 | ||||||
Due from affiliated companies | 39,566 | 127,191 | ||||||
Total current liabilities | 27,153,685 | 27,044,011 | ||||||
Non-current liabilities: | ||||||||
Long-term debt | 18,464,257 | 24,433,387 | ||||||
Satellite transponder lease obligation | 1,162,531 | 1,035,134 | ||||||
Customer deposits and advances | 278,282 | 2,665,185 | ||||||
Other long-term liabilities | 1,465,438 | 3,374,533 | ||||||
Deferred taxes | 5,794,073 | 5,021,717 | ||||||
Total liabilities | 54,318,266 | 63,573,967 | ||||||
Commitments and contingencies | ||||||||
Minority interest | 1,688,208 | 3,655,162 | ||||||
Total stockholders’ equity | 35,799,109 | 36,579,859 | ||||||
Total liabilities and stockholders’ equity | Ps. | 91,805,583 | Ps. | 103,808,988 | ||||
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2005 | 2006 | 2007 | ||||||||||
Operating activities: | ||||||||||||
Net income under U.S. GAAP | Ps. | 7,368,249 | Ps. | 8,308,077 | Ps. | 8,233,396 | ||||||
Adjustments to reconcile net income to cash provided by operating activities: | ||||||||||||
Equity in (income) loss of affiliates | (172,913 | ) | 624,843 | 774,356 | ||||||||
Minority interest from continuing operations | 1,181,596 | 609,219 | 934,295 | |||||||||
Depreciation and amortization | 3,246,033 | 3,024,800 | 3,304,581 | |||||||||
Amortization of deferred debt refinancing | — | (31,396 | ) | (31,420 | ) | |||||||
Impairment adjustments | 8,032 | 93,464 | — | |||||||||
Pension plans and seniority premiums | 342,207 | — | — | |||||||||
Deferred income tax | (784,282 | ) | 1,823,790 | 125,968 | ||||||||
(Gain) loss on disposal of investment | (1,223,640 | ) | (19,556 | ) | 822,671 | |||||||
Unrealized foreign exchange gain, net | (657,558 | ) | (339,650 | ) | 139,064 | |||||||
Employee stock option plans | 302,146 | 243,882 | 140,517 | |||||||||
Maintenance reserve | (5,345 | ) | 2,744 | 3,949 | ||||||||
(Income) loss from monetary position | (192,502 | ) | (58,543 | ) | 542,533 | |||||||
Changes in operating assets and liabilities: | ||||||||||||
(Increase) decrease in: | ||||||||||||
Trade notes and accounts receivable and customer deposits and advances, net | (473,721 | ) | (1,367,269 | ) | (1,651,317 | ) | ||||||
Inventories | 50,276 | (112,827 | ) | (32,053 | ) | |||||||
Transmission rights, programs and films and production talent advances | 715,446 | 495,475 | (1,882,412 | ) | ||||||||
Other accounts and notes receivable and other current assets | 751,864 | (1,152,498 | ) | (528,894 | ) | |||||||
Increase (decrease) in: | ||||||||||||
Trade accounts payable | 893,661 | 518,440 | 937,012 | |||||||||
Other liabilities and taxes payable | (871,609 | ) | 320,708 | 116,801 | ||||||||
Pension plan and seniority premiums | — | 90,360 | 17,094 | |||||||||
Net cash provided by operating activities | 10,477,940 | 13,074,063 | 11,966,141 | |||||||||
Financing activities: | ||||||||||||
Issuance of Senior Notes due 2025 | 7,185,905 | — | — | |||||||||
Issuance of Senior Notes due 2037 | — | — | 4,500,000 | |||||||||
Issuance of Senior Notes due 2012 | — | — | 2,481,521 | |||||||||
Prepayments of Senior Notes and UDIs denominated Notes | (5,873,517 | ) | — | — | ||||||||
Prepayment of Senior Notes due 2013 | — | (3,034,536 | ) | — | ||||||||
Other increase (decrease) in debt | — | 3,631,565 | (1,054,007 | ) | ||||||||
Deferred debt refinancing costs | 604,648 | — | — | |||||||||
Other changes in notes payable | (4,861,141 | ) | — | — | ||||||||
Financial instruments | (752,094 | ) | (1,532,111 | ) | 140,398 | |||||||
Repurchase of capital stock | (1,289,552 | ) | (3,224,515 | ) | (3,948,331 | ) | ||||||
Sale of repurchased shares | 339,611 | 587,263 | 99,771 | |||||||||
Dividends paid | (4,648,726 | ) | (1,161,839 | ) | (4,506,492 | ) | ||||||
Minority interest | (117,236 | ) | 113,607 | 1,032,659 | ||||||||
Net cash used for financing activities | (9,412,102 | ) | (4,620,566 | ) | (1,254,481 | ) | ||||||
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2005 | 2006 | 2007 | ||||||||||
Investing activities: | ||||||||||||
Other investments | 671,872 | (826,920 | ) | (915,818 | ) | |||||||
Due from affiliated companies, net | 577,657 | (894,658 | ) | 262,170 | ||||||||
Equity investments and other advances | 558,616 | (2,703,858 | ) | (4,746,807 | ) | |||||||
Investments in property, plant and equipment | (2,626,055 | ) | (2,887,888 | ) | (2,977,154 | ) | ||||||
Available-for-sale investment in shares of Univision | — | — | 11,821,932 | |||||||||
Acquisitions of Telecom net assets | — | — | (1,975,666 | ) | ||||||||
Intangible assets and other assets | (1,574,196 | ) | (902,707 | ) | (1,762,332 | ) | ||||||
Net cash used for investing activities | (2,392,106 | ) | (8,216,031 | ) | (293,675 | ) | ||||||
Net (decrease) increase in cash and cash equivalents | (1,326,268 | ) | 237,466 | 10,417,985 | ||||||||
Translation effect on cash and cash equivalents | (13,654 | ) | 7,228 | 22,086 | ||||||||
Net increase in cash and temporary investments upon Telecom acquisition | — | — | 138,261 | |||||||||
Effect of inflation on cash and cash equivalents | (572,337 | ) | (616,759 | ) | (560,136 | ) | ||||||
Cash and cash equivalents at beginning of year | 17,745,669 | 15,833,410 | 15,461,345 | |||||||||
Cash and cash equivalents at end of year | Ps. | 15,833,410 | Ps. | 15,461,345 | Ps. | 25,479,541 | ||||||
2005 | 2006 | 2007 | ||||||||||
Interest | Ps. | 2,156,091 | Ps. | 1,894,346 | Ps. | 1,905,621 | ||||||
Income taxes and/or assets tax | 578,299 | 1,132,412 | 2,955,115 |
2005 | 2006 | 2007 | ||||||||||
Note receivable related to customer deposits | Ps. | 13,278,854 | Ps. | 12,406,786 | Ps. | 14,753,180 |
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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, 2005 | Ps. | 9,371 | Ps. | 2,529 | Ps. | — | Ps. | 11,900 | ||||||||
Year ended December 31, 2006 | 11,900 | — | (4,932 | ) | 6,968 | |||||||||||
Year ended December 31, 2007 | 6,968 | 15,578 | (3,165 | ) | 19,381 | |||||||||||
Allowances for doubtful accounts(1): | ||||||||||||||||
Year ended December 31, 2005 | Ps. | 1,339,846 | Ps. | 335,741 | Ps. | (371,302 | ) | Ps. | 1,304,285 | |||||||
Year ended December 31, 2006 | 1,304,285 | 592,523 | (645,213 | ) | 1,251,595 | |||||||||||
Year ended December 31, 2007 | 1,251,595 | 154,955 | (303,684 | ) | 1,102,866 |
(1) | Include allowances for trade and non-trade doubtful accounts. |
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F- 57
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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, 2008. | |
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 | |
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. | |
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. | |
8.1 | — | List of Subsidiaries of Registrant. | |
12.1 | — | CEO Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, dated June 25, 2008. | |
12.2 | — | CFO Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, dated June 25, 2008. | |
13.1 | — | CEO Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, dated June 25, 2008. | |
13.2 | — | CFO Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, dated June 25, 2008. |