Mail Stop 0407
August 1, 2005
Via U.S. Mail and Fax
Mr. Carlos Ferreiro Rivas
Chief Financial Officer
INNOVA, S. DE R.L. DE C.V.
INSURGENTES SUR 694, PISO 8
COLONIA DEL VALLE
03100 MEXICO, D.F.
MEXICO
RE: INNOVA, S. DE R.L. DE C.V.
Form 20-F for the fiscal year ended December 31, 2004
Filed June 13, 2005
Dear Mr. Rivas:
We have reviewed your filing and have the following
comments.
We have limited our review to only your financial statements and
related disclosures and do not intend to expand our review to
other
portions of your documents. Where indicated, we think you should
revise your documents in response to these comments. If you
disagree, we will consider your explanation as to why our comment
is
inapplicable or a revision is unnecessary. Please be as detailed
as
necessary in your explanation. In some of our comments, we may
ask
you to provide us with information so we may better understand
your
disclosure. After reviewing this information, we may or may not
raise additional comments.
Please understand that the purpose of our review process is
to
assist you in your compliance with the applicable disclosure
requirements and to enhance the overall disclosure in your filing.
We look forward to working with you in these respects. We welcome
any questions you may have about our comments or on any other
aspect
of our review. Feel free to call us at the telephone numbers
listed
at the end of this letter.
Form 20-F for the fiscal year ended December 31, 2004
Item 5. Operating and Financial Review and Prospects
Operating Expense, page 45
1. We note that you benefit from volume-based discount rates.
Please
tell us how these discounts are recorded under US GAAP.
Contractual Obligations and Commercial Commitments, page 52
2. Please include the required interest payments in the table.
Programming arrangements with related parties, page 67
3. Tell us how you are accounting for the programming rights,
transmission and/or broadcasting rights under both Mexican GAAP
and
US GAAP.
Item 15. Controls and Procedures, page 83
4. We note your disclosure that "[t] here have been no significant
changes in the Company`s internal controls or in other factors
that
could significantly affect internal controls subsequent to this
evaluation." Item 308(c) of Regulation S-K requires the
disclosure
of any change in your internal control over financial reporting
identified in connection with an evaluation thereof that occurred
during your last fiscal quarter (or your fourth fiscal quarter in
the
case of an annual report) that has materially affected, or is
reasonably likely to materially affect, your internal control over
financial reporting. Please confirm for us supplementally that
there
was no change in your internal control over financial reporting
that
occurred during your fourth fiscal quarter in 2004 that has
materially affected, or is reasonably likely to materially affect,
your internal control over financial reporting, and provide the
disclosure required by Item 308(c) of Regulation S-K in future
filings.
Item 18. Financial Statements
Note 12 - Summary of Significant Accounting Policies
g. Seniority premiums and indemnities, page F-9
5. Please tell us how you account for the compensation based upon
length of service under US GAAP.
Note 5 - Property and Equipment - Net, page F-15
6. Please tell us how you record capitalized software costs under
US
GAAP.
Note 12 - Commitments and Contingencies, page F-23
7. Please tell us how you accounted for the two agreements with
CSG
Software, Inc under US GAAP.
8. Please tell us how you accounted for the subscriber base
purchase
from DIRECTV Mexico under US GAAP.
9. Please tell us how you accounted for the Solidaridad 2
impairment
charges under US GAAP. Also tell us the basis for recording the
unutilized reserve under US GAAP.
Note 20 - Differences Between Mexican GAAP and U.S. GAAP, page F-
34
10. Please include the disclosures required by SFAS 87, 106, and
132.
Condensed Consolidated Statement of Income (Loss), page F-42
11. It appears that the caption "cost of sales" excludes
depreciation
and amortization for property and equipment directly attributed to
the generation of revenue. If so, revise your presentation to
comply
with SAB 11:B, as applicable, by identifying the amount of
applicable
depreciation that is excluded from the caption "cost of sales."
As appropriate, please amend your filing and respond to
these
comments within 10 business days or tell us when you will provide
us
with a response. You may wish to provide us with marked copies of
the amendment to expedite our review. Please furnish a cover
letter
with your amendment that keys your responses to our comments and
provides any requested information. Detailed cover letters
greatly
facilitate our review. Please file your cover letter on EDGAR.
Please understand that we may have additional comments after
reviewing your amendment and responses to our comments.
We urge all persons who are responsible for the accuracy and
adequacy of the disclosure in the filing to be certain that the
filing includes all information required under the Securities
Exchange Act of 1934 and that they have provided all information
investors require for an informed investment decision. Since the
company and its management are in possession of all facts relating
to
a company`s disclosure, they are responsible for the accuracy and
adequacy of the disclosures they have made.
In connection with responding to our comments, please
provide,
in writing, a statement from the company acknowledging that:
* the company is responsible for the adequacy and accuracy of the
disclosure in the filings;
* staff comments or changes to disclosure in response to staff
comments do not foreclose the Commission from taking any action
with
respect to the filings; and
* the company may not assert staff comments as a defense in any
proceeding initiated by the Commission or any person under the
federal securities laws of the United States.
In addition, please be advised that the Division of
Enforcement
has access to all information you provide to the staff of the
Division of Corporation Finance in our review of your filings or
in
response to our comments on your filings.
You may contact Michael Henderson, Staff Accountant at (202)
551-3364 or Ivette Leon, Assistant Chief Accountant, at (202) 551-
3351 if you have questions regarding comments on the financial
statements and related matters. Please contact me at (202) 551-
3810
with any other questions.
Sincerely,
Larry Spirgel
Assistant Director
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Mr. Carlos Ferreiro Rivas
Chief Financial Officer
INNOVA, S. DE R.L. DE C.V.
August 1, 2005
Page 5
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
DIVISION OF
CORPORATION FINANCE