Cablemas 1Q06 Net Revenue and Adjusted EBITDA Up 27.7% and 27.9% YoY

Cablemas 1Q06 Net Revenue and Adjusted EBITDA Up 27.7% and 27.9% YoY

MEXICO, May 2 /PRNewswire/ -- Cablemas, S.A. de C.V., (Cablemas), the second largest cable television operator in Mexico based on number of subscribers and homes passed, today announced results for the three-month period ending March 31, 2006.

Cablemas, CEO Carlos M. Alvarez Figueroa commented: "Once again, Cablemas had an outstanding quarter with increases in net revenue, operating profit and adjusted EBITDA."

"We remain focused on rolling out services and increasing market penetration. In fact, in 1Q06 the number of cable television subscribers increased 20.4% YoY, while high-speed Internet subscribers increased 76.0% YoY. In addition, telephony lines of our recently established joint venture with Axtel grew sequentially by 206%."

Financial and Operational Highlights(1)
(in million Mexican Pesos) 1Q05 1Q06 % Chg.

Financial Highlights
Net revenue 411.7 525.8 27.7%
Operating profit 95.4 122.2 28.0%
Adjusted EBITDA(2) 165.2 211.3 27.9%
Net income 70.6 49.6 -29.8%
Operating margin 23.2% 23.2% 0 bps
Adjusted EBITDA margin(2) 40.1% 40.2% +10 bps
Net income margin 17.2% 9.4% -780 bps
Total Debt 981.7 1,916.4 95.2%
Net Debt 942.0 1,166.8 23.9%
Total Debt/ LTM Adj. EBITDA(2) 1.4x 2.7x
Net Debt/ LTM Adj. EBITDA(2) 1.3x 1.6x
EBITDA/ Net interest expense 5.6x 3.8x

Operational Highlights
Homes passed 1,602,389 1,728,039 7.8%
Cable Television subscribers 509,122 612,734 20.4%
High-speed internet subscribers 76,135 133,962 76.0%
IP Telephony lines - 9,936 NA

(1) Unless otherwise stated, all financial figures discussed in this
announcement are unaudited, prepared in accordance with generally
accepted accounting principles in Mexico, expressed in millions of
constant Mexican pesos as of March 31, 2006, and represent comparisons
between the three-month period ended March 31, 2006, and the
equivalent three-month period ended March 31, 2005.

(2) Adjusted EBITDA is calculated by adding amortization and depreciation,
net comprehensive financial results, net other income, special items,
total income tax and asset tax, total employee statutory profit
sharing, effects from associated companies and minority interest to
net income/loss.

FIRST QUARTER 2006 CONSOLIDATED RESULTS

Net Revenues

Net revenues increased 27.7%, or Ps.114.0 million, during 1Q06 to Ps.525.8 million.

-- Cable Television: The 20.4%, or Ps.71.8 million, growth in cable
television revenues was driven by a 20.4% YoY increase in the number of
subscribers to 612,734 with a penetration rate of 34.7%. This was
achieved despite a 1.2% decline in average monthly cable television
revenues per subscriber (ARPU) to Ps.230.9. This decline in ARPU was
primarily the result of a 37.6% increase in Minibasic subscribers, who
pay lower monthly fees, while Basic subscribers increased only 16.3%.
Average monthly net churn rates for cable television fell to 2.5% for
1Q06 from 2.6% in 1Q05.

-- High Speed Internet: The 49.8%, or Ps.77.9 million, rise in high-speed
Internet revenues resulted from a 76.0% increase in the number of
subscribers to 133,962 with a penetration rate of 10.2%. This was
partially offset by a 15.5% decline in high-speed Internet ARPU to
Ps.209.4. The decrease in ARPU was principally due to the fact that
lower price/ lower-speed Internet (128 Kbps) increased at a faster rate
than higher-speed Internet (512 Kbps) subscribers. Average monthly net
churn rates for high-speed internet fell to 2.6% for 1Q06 from 3.1% in
1Q05.

-- IP Telephony: IP telephony revenues for 1Q06 from the IP telephony
joint venture with Axtel, which was introduced in the third quarter of
2005, were Ps.16.6 million, or 3.2% of total revenue. At March 31, 2006
there were 9,936 IP telephony lines in service.

Table 1. Revenues by Service Offering
1Q05 1Q06
% of % of % Chg.
Total Total
Revenue Revenue Revenue Revenue
Cable Television 347.2 84.3% 419.0 79.7% 20.7%
High-Speed Internet 52.0 12.6% 77.9 14.8% 49.8%
IP telephony 0.0 0.0% 16.6 3.2% n/a
Advertising 11.0 2.7% 11.2 2.1% 2.4%
Other(1) 1.5 0.4% 1.0 0.2% -32.5%
Total Net Revenue(2) 411.7 100.0% 525.8 100.0% 27.7%

(1) Includes revenue relating to rental and sale of cable decoders and
charges relating to customer's change of residence.

(2) All net revenue figures are net of value-added taxes and other taxes
on sales.

Table 2. Number of Subscribers and Revenue per Service Offering
% Chg. in
1Q05 1Q06 Subscribers
Minibasic 105,442 145,135 37.6%
Basic(1) 390,940 454,720 16.3%
Superbasic(1) 48,200 46,358 -3.8%
Premium 26,363 28,953
Hotel 12,740 12,879 1.1%
Total Cable Television 509,122 612,734 20.4%
High-Speed Internet 76,135 133,962 76.0%
IP Telephony lines 0 9,936 NA

(1) The number and percentage of Basic subscribers includes Basic,
Superbasic and Premium subscribers due to the fact that all Superbasic
and Premium subscribers must also be Basic subscribers.

Table 3. ARPUs and Churn Per Service Offering
1Q05 1Q06 % Chg.
Homes passed 1,602,389.0 1,728,039.0 7.8%
Cable Television
- Revenue 347.2 419.0 20.7%
- Subscribers 509,122 612,734 20.4%
- ARPU 233.6 230.9 -1.2%
- Avg. Monthly Churn 2.6% 2.5% - 10 bps
High-Speed Internet
- Revenue 52.0 77.9 49.8%
- Subscribers 76,135 133,962 76.0%
- ARPU 247.7 209.4 -15.5%
- Avg. Monthly Churn 3.1% 2.6% -50 bps
IP Telephony
- Revenue 0 16.6 NA
- Lines 0 9,936 NA

Operating Profit

Operating profit for 1Q06 increased 28.0%, or Ps.26.7 million, to Ps.122.2 million, driven by a 27.9% increase in gross profit, partially offset by an increase of 27.1% in SG&A. Operating margin remained unchanged at 23.2%.

Table 4. Operating Profit
1Q05 1Q06 % Chg.
Million % of Million % of
Ps. Revenues Ps. Revenues
Service revenues 411.7 100.0% 525.8 100.0% 27.7%
Cost of services 197.2 47.9% 252.2 48.0% 27.9%
Gross Profit 214.5 52.1% 273.5 52.0% 27.5%
SG&A 119.1 28.9% 151.4 28.8% 27.1%
- Selling 33.2 8.1% 49.9 9.5% 50.4%
- Administrative 74.5 18.1% 87.0 16.6% 16.9%
- Amortization and
depreciation 11.4 2.8% 14.4 2.7% 26.4%
Total operating profit 95.4 23.2% 122.2 23.2% 28.0%

Cost of Services

Cost of Services for 1Q06 increased 27.9%, or Ps.55.0 million. As a percentage of revenues, cost of services rose 10 basis points to 48.0%, from 47.9% in 1Q05. The increase in cost of services was primarily due to:

-- A Ps.18.0 million increase in salaries and maintenance expenses,
principally related to an increase in the number of technicians
employed (993 technicians as of March 31, 2006 as compared to 787
technicians as of March 31, 2005), as well as special performance-based
bonuses paid during 1Q06.
-- A Ps.16.4 million increase in depreciation and amortization principally
related to the growth in our cable network, high-speed Internet drop
equipment and head-end equipment.
-- A Ps.10.3 million increase in IP telephony costs related to the start
up of this service in November 2005.
-- A Ps.7.4 million rise in programming costs, principally related to
increases in cable television subscribers and certain additional
programming costs incurred in connection with the 2006 World Cup soccer
tournament.

Selling, General and Administrative Expenses

Selling, General and Administrative Expenses (including depreciation and amortization) increased Ps.32.3 million, or 27.1% YoY to Ps.151.4 million, principally reflecting:

-- Selling Expenses increased 50.4%, or Ps.16.7 million, to Ps.49.9
million, principally related to the 160 person increase in the size of
our sales force (945 salespersons as of March 31, 2006 as compared to
785 salespersons as of March 31, 2005).
-- Administrative Expenses increased 16.9%, or Ps.12.57 million, to
Ps.87.0 million, but declined to 16.6% of service revenues in 1Q06 from
18.1% in 1Q05, reflecting economies of scales. Administrative expenses
increased principally due to:
- An increase in office expenses of Ps.6.9 million, principally due to
higher corporate office rent, server rental expenses, software
maintenance expenses, and employee training expenses.
- An increase of Ps.2.5 million in administrative salaries, related to
the 177-person increase in the number of administrative employees
(846 employees as of March 31, 2006 as compared to 669 employees as
of March 31, 2005).
- An increase of Ps.2.4 million in telecommunications and travel
expenses, related to an increase in phone bills and travel expenses
and principally derived from internal audit field network operations,
operational controls, and inventory management.
-- Amortization and Depreciation rose 26.4%, or Ps.3.0 million, for 1Q06
principally due to an increase in office equipment assets and the
amortization of prepaid expenses.

Adjusted EBITDA

Adjusted EBITDA for 1Q06 increased 27.9%, or Ps.46.1 million, to Ps.162.2 million, principally reflecting the improvement in operating income as discussed above. Similarly, the adjusted EBITDA margin increased 10 bps to 41.2%.

The following table sets forth the reconciliation between net income and adjusted EBITDA:

Table 5. Adjusted EBITDA
1Q05 1Q06 % Chg.
Net income (loss) 70.6 49.6 -29.80%
Add (subtract):
Amortization and depreciation 69.7 89.1 27.80%
Comprehensive financial results,
net 15.0 40.7 170.70%
Other (income) expense, net 3.5 7.1 101.80%
Special items 2.6 12.6 386.30%
Total income tax and asset tax 24.5 25.3 3.20%
Employee profit sharing 0.0 0.9 1529.80%
Effects from associated companies (20.9) (14.2) -32.30%
Minority interest 0.0 (0.1) 621.50%

Adjusted EBITDA 165.2 211.3 27.90%

-- Depreciation and amortization increased 27.8%, or Ps.19.4 million, for
1Q06 to Ps.89.1 million, principally due to the 28% growth in the
company's fixed assets.
-- Special Items included Ps.12.6 million of accelerated depreciation in
1Q06, associated with the costs of cleanup, removal, and rehabilitation
of the network affected by Hurricane Wilma. Cablemas is still
finalizing its review of the final monetary damage and possible lost
revenues resulting from Hurricane Wilma and may submit additional
claims to its insurers in the future.
-- Other expenses, net increased Ps.3.8 million to Ps.7.1 million,
principally due to the net effect of the sale and purchase of certain
assets.
-- During the quarter, the company recorded a Ps.25.3 million provision
for income taxes and asset taxes, compared to Ps.24.5 million in 1Q04.
Mexican companies are generally required to pay the greater of their
income tax liability (determined at a rate of 29.0% for 2006 and 30.0%
for 2005) or their asset tax liability (determined at a rate of 1.8% of
the average tax value of virtually all of their assets including, in
our case, our concessions), less the average tax value of certain
liabilities. If, in any year, the asset tax liability exceeds the
income tax liability, the asset tax payment for such excess may be
reduced by the amount by which the income tax exceeded the asset tax in
the three preceding years. In addition, any required payment of asset
tax is creditable against the excess of income tax over asset tax of
the following ten years. Our effective tax rate was 41.0% for the three
months ended March 31, 2006, as compared to 33.0% for the corresponding
period in 2005.
-- Employee profit sharing, increased Ps.0.8 million, or 800.0%, for 1Q06
to Ps.0.9 million, as compared to Ps.0.1 million for 1Q05. By law,
employee profit sharing is equivalent to an aggregate amount equal to
10.0% of the company's annual taxable income, calculated, on a
subsidiary-by-subsidiary basis, on a statutory basis that differs from
the calculation of taxable income under Mexican income tax law.

Comprehensive Financial Results, Net

Comprehensive financial results, net resulted in a net expense of Ps.40.7 million for the three months ended March 31, 2006, which is Ps.25.7 million, or 170.7%, greater than the net expense of Ps.15.0 million for the corresponding period in 2005. The higher net expense primarily reflected an increase in interest paid due to the 95.0% rise in outstanding debt from Ps.981.7 million as of March 31, 2005 to Ps.1,916.4 million as of March 31, 2006.

Table 6. Comprehensive Financial Results, Net
1Q05 1Q06 % Chg.
Interest income 0.3 8.1 2233.5%
Interest expense -29.8 -63.4 112.9%
Financial instruments 0.0 -11.1 n/a
Foreign-exchange gain (loss), net 1.0 8.4 740.1%
Monetary position (loss) gain 13.4 17.2 28.9%
Comprehensive financial results, net (15.0) (40.7) 170.7%

Net Income

For 1Q06, Cablemas posted a Ps.49.6 million gain, compared to a Ps.70.6 million gain in 1Q05. In addition to the discussion of operating income mentioned above, the decline in net income mainly reflects higher interest expenses, financial instruments loss, and one-time special items.

CAPEX

Capital expenditures for 1Q06 rose 12.1%, or Ps.20.2 million, to Ps.187.7 million from Ps.167.5 million in 1Q05. This amount includes capital expenditures in the amount of Ps.133.9 million for the expansion and upgrade of the company's network and Ps.41.6 million related to network connection drops, high-speed Internet equipment, computer equipment, transportation equipment and real estate, among others.

As of March 31, 2006 Cablemas had a network of 11.816 km, of which 76% was bidirectional and 86% was operating at or greater than 550 MHz. As of March 31, 2005 Cablemas had a network of 10,982 km, of which 67% was bidirectional and 83% was operating at or greater than 550 MHz.

DEBT STRUCTURE

Consolidated gross debt as of March 31, 2006 totaled Ps.1,916.4 million, all of which was long-term. Consolidated gross debt increased YoY 94.2%, from Ps.981.7 million as of March 31, 2005.

Net debt, which is calculated as total debt minus cash and cash equivalents, increased YoY by 23.9% to Ps.1,166.8 million, from 942.0 million as of March 31, 2005. As of March 31, 2006. Cablemas had a cash balance of Ps.749.6 million.

Table 7. Debt Indicators
1Q05 1Q06 % Chg.
Total Debt 981.7 1,916.4 95.2%
Short-Term Debt 60.7 - -100.0%

Long-Term Debt 920.9 1,916.4 108.1%

Cash and Cash Equivalents 39.7 749.6 1789.6%
Total Net Debt 942.0 1,166.8 23.9%

Leverage
Total Debt/ LTM Adjusted EBITDA 1.4x 2.7x
Total Net Debt/ LTM Adjusted
EBITDA 1.3x 1.6x

Interest Coverage
Adjusted EBITDA / Net Interest
Expense 5.6x 3.8x

Cash flow from operations during the quarter increased 28.7%, or Ps.45.1 million, to Ps.202.6 million due to a favorable change in working capital derived principally from an increase in accounts payable.

Net borrowings in 1Q06 increased Ps.84.4 million to Ps.75.9 million due principally to an increase in interest expenses accruals from the corporate bond to be paid in May 2006. Capex for 1Q06 increased Ps.115.8 million, to Ps.306.3 million, principally related to the upgrade and expansion of Cablemas' network.

Table 8. Cash Flow
1Q05 1Q06 Change
Cash at the beginning of the year 52.5 778.9 726.4
Net Income 70.6 49.6 (21.0)
+ Depreciation and amortization 69.7 89.1 19.4
+ Change in Working Capital (5.3) 65.7 71.0
+ Other 22.4 (1.8) (24.2)
Cash Flow from Operations 157.4 202.6 45.1
- Capex (190.5) (306.3) (115.8)
- Other 28.8 (1.4) (30.3)
Net Investing Activities (161.7) (307.7) (146.0)
+ Debt (1.2) 76.0 77.3
+ Other (7.3) (0.1) 7.2
Net Financing Activities (8.6) 75.9 84.4
Cash at the end of the year 39.7 749.6 710.0

FIRST QUARTER 2006 EARNINGS CONFERENCE CALL

Date: Tuesday, May 2, 2006
Time: 4:30 PM US EDT- 3:30 PM Mexico time
Dial Information: (800) 901-5231 (U.S.) or (617) 786-2961 (international)
Passcode: 56996967
Tape Playback: Starting Tuesday, May 2, 2006, at 6:30 PM US EDT,
ending at midnight EDT on Tuesday, May 9, 2006. Dial-
in Number: (888) 286-8010 (US) or (617) 801-6888
(international). Confirmation Code: 75879213.

About Cablemas

Cablemas is the second-largest cable television operator in Mexico based on number of subscribers and homes passed. As of December 31, 2005, Cablemas' cable network served over 596,998 cable television subscribers, 114,088 high- speed internet subscribers, and 3,246 IP telephony lines, with over 1,743,740 homes passed.

Cablemas is the concessionaire with the broadest coverage in Mexico, operating in 46 cities throughout the country's oil, maquiladora and tourist regions as of December 2005. Cablemas has consistently introduced innovative products in Mexico and is the only cable operator in the country to provide a "Triple Play" bundled service package of cable television, high speed internet and IP telephony. More information about Cablemas can be found at http://www.cablemas.com/.

This document may contain certain forward-looking statements concerning Cablemas' operations, performance, business, financial condition and growth prospects. These statements are based upon beliefs of management as well as a number of assumptions and estimates, which are inherently subject to significant uncertainties, many of which are beyond Cablemas' control. Actual results may differ materially from those expressed or implied by such forward- looking statements. Factors that could cause actual results to differ materially include, but are not limited to, changes in the Mexican economy, including changes in inflation rates or exchange rates, changes in political conditions and government policies in Mexico, increased competition, regulatory developments and customer demand. These statements are made as of the date of this press release and Cablemas undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise in light of these risks and uncertainties, there can be no assurances that the events described or implied in the forward-looking statements contained in this document will in fact transpire.

CABLEMAS, S.A. DE C.V. AND SUBSIDIARIES

Consolidated Balance Sheets
March 31, 2005 and 2006

(Constant Mexican pesos as of March 31, 2006)

ASSETS 2005 2006

Current assets:
Cash and cash equivalents Ps 39,672,721 749,642,080
Accounts receivable less
allowance for doubtful accounts
of Ps6,038,110 in 2005 and
Ps7,048,820 in 2006 14,590,312 23,504,086
Other accounts receivable, net 228,166,572 205,661,076
Prepaid expenses 12,763,789 28,707,019

Total current assets 295,193,394 1,007,514,261

Inventory of components of
signal distribution systems,
net (Note 4) 197,694,716 264,316,888

Investment in associated companies
(Note 7) 54,641,879 84,648,028

Property, signal distribution
systems, and equipment,
net (Note 5) 2,180,183,044 2,504,261,733

Deferred employee statutory
profit sharing (Note 10) 3,993,636 4,345,324

Goodwill, net (Note 6) 1,025,825,228 979,442,193

Intangible asset from pension
and seniority premium plans 16,467,030 21,861,591

Other non-current assets, net 83,446,903 122,570,225

Ps 3,857,445,830 4,988,960,243

LIABILITIES 2005 2006

Current liabilities:
Current installments of:
Bank Loans (Note 9) Ps 32,210,651 -
Obligations under capital leases 32,310,524 -
Corporate bonds (Notes 3 and 8(a)) - 87,844,912
Financial instruments (Note 3) 10,837,740 6,688,451
Accounts payable 249,558,166 276,949,069
Accruals 31,057,073 49,160,159
Accrued expenses and other liabilities 28,197,635 29,174,340
Taxes payable 3,749,585 1,885,631
Employee statutory profit sharing 3,533,714 4,087,790
Productora y Comercializadora de
Television, S. A. de C. V. 47,246,892 33,517,279
Subscriber deposits and advances 62,845,367 63,673,451

Total current liabilities 501,547,347 552,981,082

Financial instruments (Note 3) - 53,933,414
Corporate bonds (Note 8(a)) - 1,916,425,000
Commercial paper obligations (Note 8(b)) 831,040,000 -
Bank loans, excluding current
installments (Note 9) 60,497,036 -
Obligations under capital leases,
excluding current installments 29,410,650 -
Pension and seniority premiums plan
and severance compensation for reasons
other than restructuring 29,422,483 41,778,210
Income tax long-term 10,883,095 10,476,602
Deferred income tax (Note 10) 267,186,379 300,489,117
Deficit in associated companies (Note 7) 17,062,119 -

Total liabilities 1,747,049,109 2,876,083,425

STOCKHOLDERS' EQUITY

Majority stockholders' equity (Note 11):
Capital stock 702,511,229 702,511,229
Additional paid-in capital 1,095,120,208 1,095,120,208
Retained earnings 321,925,313 403,791,716
Valuation effects of financial
instruments (Note 3) (10,837,740) (81,952,492)
Effect on labor obligations - (1,336,326)
Cumulative deferred Income Tax effect - 3,244,326
Equity adjustment of non-monetary assets - (9,689,419)

Total majority stockholders' equity 2,108,719,010 2,111,689,242

Minority stockholders' equity 1,677,711 1,187,576

Total stockholders' equity 2,110,396,721 2,112,876,818

Commitments and contingent
liabilities (Note 13)

Ps 3,857,445,830 4,988,960,243

CABLEMAS, S. A. DE C. V. AND SUBSIDIARIES

Consolidated Statements of Income

For the three-month periods ended March 31, 2005 and 2006

(Constant Mexican pesos as of March 31, 2006)

(Unaudited)

2005 2006

Service revenues Ps 411,731,663 525,773,659
Cost of services 197,221,532 252,244,251

Gross profit 214,510,131 273,529,408

Operating expenses:
Selling 33,191,186 49,913,922
Administrative 74,475,073 87,043,465
Amortization and depreciation 11,403,375 14,414,329

Total operating expenses 119,069,634 151,371,716

Operating profit 95,440,497 122,157,692

Comprehensive financial results:
Interest income 347,829 8,116,428
Interest expense (Note 8) (29,757,297) (63,357,949)
Foreign exchange gain, net 1,000,936 8,409,252
Valuation effects of financial
instruments (Note 3) - (11,103,253)
Monetary position gain 13,375,825 17,239,172

Comprehensive financial results,
net (15,032,707) (40,696,350)

Other expenses, net (3,509,884) (7,080,571)

Special items (2,601,146) (12,648,678)

Income before income taxes,
employee statutory profit
sharing, effects from associated
companies and minority interest 74,296,760 61,732,093

Income taxes (Note 10):
Current 3,604,587 13,692,795
Deferred 20,913,498 11,617,363

Total income taxes 24,518,085 25,310,158

Employee statutory profit sharing (Note 10):
Current 2,180,250 1,113,165
Deferred (2,127,631) (255,561)

Total employee statutory profit
sharing 52,619 857,604

Income before effects from
associated companies and
minority interest 49,726,056 35,564,331

Effects from associated companies:
Equity in the results of operations
(Note 7) 20,901,573 14,160,476

Income before minority interest 70,627,629 49,724,807

Minority interest (18,104) (130,629)

Majority interest net income Ps 70,609,525 49,594,178

Basic earnings per share (Note 12) Ps 2.79 1.96

CABLEMAS, S. A. DE C. V. AND SUBSIDIARIES

Consolidated Statements of Changes in Financial Position

For the three-month periods ended March 31, 2005 and 2006

(Constant Mexican pesos as of March 31, 2006)

(Unaudited)

2005 2006

Operating activities:
Net Income
Ps 70,609,525 49,594,178
Add charges (deducted credits) to
operations not requiring
(providing) funds:
Depreciation and amortization 69,728,338 89,087,790
Depreciation in special items - 12,648,454
Increase in allowance for
inventory of components of
signal distribution systems 704,852 937,800
Effects from associated companies (20,901,573) (14,160,476)
Decrease in goodwill - 7,714,346
Loss on sale of signal
distribution system equipment - 7,880,738
Accrual for pension, seniority
premiums and severance 2,959,941 2,007,546
Deferred income taxes 20,913,498 11,617,363
Deferred employee statutory profit
sharing (2,127,631) (255,561)
Financial instruments - (31,040,750)
Minority interest 18,104 130,629

Funds provided by operations 141,905,054 136,162,057

Net (investing in) financing from
operating accounts:
Trade and other accounts
receivable, net (41,474,334) (37,838,732)
Prepaid expenses 1,395,961 (4,296,754)
Accounts payable 42,039,875 121,252,934
Accrued expenses and other
liabilities - (5,122,161)
Taxes payable (27,759,176) (13,566,872)
Subscriber advances and deposits 20,535,852 148,169
Employee statutory profit sharing 733,064 814,965
Related parties 20,068,732 5,022,537

Funds provided by operating
activities 157,445,028 202,576,143

Financing activities:
Proceeds from bank loans, net 5,250,315 -
Corporate bonds - 76,027,643
Payments of notes and commercial
paper obligations, net (6,482,112) -
Income tax long-term - (138,292)
Payments of capital lease
obligations (7,327,686) -

Funds (used in) provided by
financing activities (8,559,483) 75,889,351

Investing activities:
Inventory of components of signal
distribution systems (23,070,238) (123,146,138)
Acquisition of components of signal
distribution systems (142,859,706) (179,364,079)
Other assets, net (24,601,656) (3,791,236)
Investment in associated companies 28,846,216 (1,413,764)

Funds used in investing
activities (161,685,384) (307,715,217)

(Decrease) increase in cash and
cash equivalents (12,799,839) (29,249,723)

Cash and cash equivalents:
At beginning of year 52,472,560 778,891,803

At end of year Ps 39,672,721 749,642,080

Source: Cablemas, S.A. de C.V.

CONTACT: In Mexico: Marilyn Billot, Budget and IR Manager of Cablemas,
+5255-24-54-58-84, marilyn.billot@admCablemas.com.mx; or In the United States:
Susan Borinelli, +1-646-452-2332, sborinelli@breakstone-group.com, or Michael
Fehle, +1-646-452-2336, mfehle@breakstone-group.com

Web site: http://www.cablemas.com/

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