Cablemas Reports Audited Results for FY05

Cablemas Reports Audited Results for FY05

MEXICO CITY, 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 audited results for the three and twelve-month periods ending December 31, 2005. The audited results include a reduction in depreciation to reflect the write-off of assets reported in the unaudited FY05 results. Unaudited FY05 results did not include the reduction in depreciation of assets that were written off as a result of the damage incurred by the company's network in Cancun, Isla Mujeres, Playa del Carmen and Cozumel caused by Hurricane Wilma and Emily. As a result:

-- Special Items for audited FY05, which included the abovementioned
reduction in depreciation, was Ps.32.5 million, a 50.2% or Ps.32.7
million decrease compared to the Ps.65.2 million recorded in the
unaudited FY05 results announced on April 11, 2005.
-- Net income for audited FY05 was Ps.101.8 million, a 30.1%, or Ps.23.5
million, increase compared to the Ps.78.3 million gain recorded in the
unaudited FY05 results announced on April 11, 2005. Compared to FY04,
audited FY05 results represent a YoY decline of 3.6%, or Ps.3.8
million. This is an improvement from the 25.9%, or Ps.27.4 million, YoY
decline resulting from comparing FY04 results to the previously
announced unaudited FY05 results.

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/.

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

Consolidated Balance Sheets
December 31, 2003, 2004, and 2005

(Constant Mexican pesos as of December 31, 2005)

ASSETS 2003 2004 2005

Current assets:
Cash and cash equivalents Ps 54,461,834 51,735,638 768,744,378
Trade accounts receivable,
less allowance for
doubtful accounts of
Ps1,897,831 in 2003,
Ps4,142,985 in 2004 and
Ps6,286,440 in 2005 3,561,861 12,691,156 18,357,229
Other accounts receivable,
net (Note 7) 142,870,517 178,565,375 170,476,595
Prepaid expenses 16,159,903 13,960,892 24,092,248

Total current assets 217,054,115 256,953,061 981,670,450

Inventory of components of
signal distribution systems,
net (Note 8) 109,827,816 172,867,015 140,257,156

Investment in associated
companies (Note 9) 63,653,497 44,885,063 68,173,893

Property, signal distribution
systems and equipment,
net (Note 10) 1,819,264,399 2,069,024,219 2,402,373,040

Deferred employee statutory
profit sharing (Note 18) 954,585 1,839,799 4,036,481

Goodwill, net (Note 12) 1,078,418,871 1,011,418,603 974,720,501

Intangible asset from
pension and seniority
premium plans and
severance compensation
for reasons other than
restructuring (Note 17) 16,377,957 16,357,398 21,356,210

Other non-current assets,
net (Note 11) 48,979,832 66,454,972 117,231,533

Ps 3,354,531,072 3,639,800,130 4,709,819,264

LIABILITIES 2003 2004 2005

Current liabilities:
Current installments of:
Bank loans (Note 15) Ps 149,831,202 21,484,501 -
Obligations under
capital leases (Note 16) 26,445,508 33,496,783 -
Senior notes (Note 14(a)) - - 28,713,580
Financial instruments (Note 5) - 8,566,938 8,809,785
Accounts payable 146,599,457 216,879,313 155,493,953
Accruals (Note 13) 5,879,573 24,418,603 42,826,037
Accrued liabilities 24,996,459 36,431,915 39,543,348
Taxes payable 3,708,735 9,079,968 15,251,188
Employee statutory profit
sharing 1,041,913 2,761,319 3,230,187
Productora y Comercializadora
de Television, S. A. de C. V.
(related company) (Note 6) 14,385,423 26,796,471 28,123,512
Subscriber deposits and
advances 34,768,591 41,715,323 62,697,673

Total current liabilities 407,656,861 421,631,134 384,689,263

Financial instruments (Note 5) - - 19,867,861
Senior notes (Note 14(a)) - - 1,874,407,492
Commercial paper obligations
(Note 14(b)) 234,771,826 825,760,000 -
Bank loans, excluding current
installments (Note 15) 528,289,951 64,744,623 -
Obligations under capital
leases, excluding current
installments (Note 16) 22,588,122 34,582,359 -
Pension and seniority premiums
plans and severance
compensation for reasons
other than restructuring
(Note 17) 22,468,115 26,212,533 39,031,964
Income tax long-term (Note 18) 11,387,088 10,813,949 10,476,603
Deferred income tax (Note 18) 211,031,456 242,814,240 285,108,325

Total liabilities 1,438,193,419 1,626,558,838 2,613,581,508

STOCKHOLDERS' EQUITY

Majority stockholders'
equity (Note 19):
Capital stock 692,645,202 692,645,202 692,645,202
Additional paid-in capital 1,079,740,404 1,079,740,404 1,079,740,404
Retained earnings 142,146,055 247,786,325 349,583,041
Cumulative deferred Income
Tax effect - - 3,202,059
Valuation effects of
financial instruments
(Note 5) - (8,566,938) (19,094,026)
Equity adjustment of
non-monetary assets - - (9,563,185)
Effect on labor obligations - - (1,318,916)

Total majority stockholders'
equity 1,914,531,661 2,011,604,993 2,095,194,579

Minority interest 1,805,992 1,636,299 1,043,177

Total stockholders'
equity 1,916,337,653 2,013,241,292 2,096,237,756

Commitments and contingent
liabilities (Note 23)

Subsequent event (Note 26)

Ps 3,354,531,072 3,639,800,130 4,709,819,264

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

Consolidated Statements of Income

Years ended December 31, 2003, 2004 and 2005

(Constant Mexican pesos as of December 31, 2005)

2003 2004 2005

Service revenues
Ps 1,161,547,350 1,499,742,230 1,724,446,679
Cost of services (Note 6) 572,774,235 707,753,319 803,101,463

Gross profit 588,773,115 791,988,911 921,345,216

Operating expenses:
Selling 99,187,898 129,870,740 160,004,516
Administrative 253,024,174 318,065,664 361,800,105
Amortization and
depreciation 89,215,686 95,771,931 50,418,943

Total operating expenses 441,427,758 543,708,335 572,223,564

Operating profit 147,345,357 248,280,576 349,121,652

Comprehensive financial
results:
Interest income 11,646,901 5,789,108 5,150,206
Interest expense (Notes 14,
15 and 16) (53,932,719) (90,302,975) (171,684,925)
Foreign exchange (loss)
gain, net (Note 4) (31,483,053) (12,970,502) 5,202,498
Valuation effects of
financial instruments
(Note 5) - - (13,293,620)
Monetary position gain 22,522,216 35,116,177 19,869,213

Comprehensive financial
results, net (51,246,655) (62,368,192) (154,756,628)

Other income (expenses), net 8,850,469 2,019,649 (18,124,205)

Special items (Note 25) (4,521,531) (11,606,691) (32,528,875)

Income before income taxes,
employee statutory profit
sharing, effects from
associated companies and
minority interest 100,427,640 176,325,342 143,711,944

Income taxes (Note 18):
Current 32,840,742 27,498,278 42,021,004
Deferred 3,258,895 31,782,784 35,634,171

Total income taxes 36,099,637 59,281,062 77,655,175

Employee statutory profit
sharing (Note 18):
Current 3,549,734 3,929,038 4,281,404
Deferred (816,139) (885,214) (2,196,682)

Total employee statutory
profit sharing 2,733,595 3,043,824 2,084,722

Income before effects from
associated companies and
minority interest 61,594,408 114,000,456 63,972,047

Effects from associated
companies:
Equity in the results of
operations (Note 9) (8,611,191) (10,428,743) 37,231,547
Gain from purchase of
investments (Note 20) - 1,898,864 -

Total effects from
associated companies: (8,611,191) (8,529,879) 37,231,547

Income before minority
interest 52,983,217 105,470,577 101,203,594

Minority interest (314,779) 169,693 593,122

Majority interest net
income Ps 52,668,438 105,640,270 101,796,716

Basic earnings per share
(Note 22) Ps 2.08 4.17 4.01

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

Consolidated Statements of Changes in Financial Position

Years ended December 31, 2003, 2004 and 2005

(Constant Mexican pesos as of December 31, 2005)

2003 2004 2005

Operating activities:
Majority interest net
income Ps 52,668,438 105,640,270 101,796,716
Add charges (deducted
credit) to operations not
requiring
(providing) funds:
(Gain) loss on sale of
equipment (9,714,707) (1,034,875) 2,647,155
Depreciation and
amortization 205,530,328 244,327,304 314,658,257
Impairment of goodwill - - 35,000,000
Net gain on insurance
recovery - - (63,735,616)
Increase in allowance for
inventory of components
of signal distribution
systems 3,101,115 2,553,588 2,704,896
Effects from associated
companies 8,611,191 10,428,743 (37,231,547)
Amortization of goodwill 55,296,376 62,983,334 -
Accrual for pension,
seniority premiums and
severance 7,514,789 3,764,977 9,747,231
Deferred income taxes (7,570,959) 31,782,784 35,634,171
Deferred employee statutory
profit sharing (816,139) (885,214) (2,196,682)
Minority interest 314,779 (169,693) (593,122)
Financial instruments - - 9,583,620

Funds provided by
operations 314,935,211 459,391,218 408,015,079

Net financing from
(investing in) operating
accounts:
Trade and other accounts
receivable, net (27,595,992) (44,824,153) 2,422,707
Prepaid expenses (3,677,066) 2,199,011 (10,131,356)
Accounts payable (118,378,240) 70,279,856 (61,385,360)
Accruals and accrued
liabilities 26,994,850 29,974,486 21,518,867
Taxes payable (9,771,395) 5,371,233 6,171,220
Subscriber deposits and
advances (3,099,602) 6,946,732 20,982,350
Employee statutory profit
sharing 665,734 1,719,406 468,868
Related parties 6,216,802 12,411,048 1,327,041

Funds provided by
operating activities 186,290,302 543,468,837 389,389,416

Financing activities:
Proceeds from (payments of)
bank loans, net 536,729,870 (591,892,029) (86,229,124)
Proceeds from notes and
commercial paper
obligations, net 234,771,826 590,988,174 1,077,361,072
Proceeds from (payments of)
capital lease obligations 10,574,748 19,045,512 (68,079,142)
Pension, seniority premiums
and severance payments (3,842,167) - (3,245,528)
Income tax (355,226) (573,139) (337,346)

Funds provided by
financing activities 777,879,051 17,568,518 919,469,932

Investing activities:
Inventory of components of
signal distribution systems (3,074,456) (65,592,787) 29,904,963
Proceeds from sale of signal
distribution system
equipment 23,131,147 3,071,843 10,282,215
Capital expenditures (459,964,924) (489,340,574) (770,160,392)
Other assets, net (5,690,899) (24,258,658) (65,318,777)
Acquisition of subsidiary
companies, net of cash (179,936,992) 8,339,691 (2,719,154)
Investment in associated
companies (37,429,030) - (17,791,169)
Reimbursement of investment
from associated company - - 34,751,828
(Decrease) increase in
goodwill (327,679,453) 4,016,934 -
Insurance recovery - - 189,199,878

Funds used in investing
activities (990,644,607) (563,763,551) (591,850,608)

(Decrease) increase in
cash and cash equivalents (26,475,254) (2,726,196) 717,008,740

Cash and cash equivalents:
Received upon acquisition of
subsidiary companies 15,558,648 - -
At beginning of year 65,378,440 54,461,834 51,735,638

At end of year Ps 54,461,834 51,735,638 768,744,378

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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