TV Azteca Announces EBITDA of Ps.1,322 Million in 4Q06, With Margin of 51%

TV Azteca Announces EBITDA of Ps.1,322 Million in 4Q06, With Margin of 51%

-- Net Income Grows More Than Seven Times in the Quarter to Ps. 692 Million --

-- Full Year EBITDA Reaches Record Level of Ps.4,231 Million, with Margin of 44% --

MEXICO CITY, Feb. 21 /PRNewswire-FirstCall/ -- TV Azteca, S.A. de C.V. (BMV: TVAZTCA) (Latibex: XTZA), one of the two largest producers of Spanish- language television programming in the world, announced today net sales of Ps.2,602 million in the fourth quarter, 3% higher compared with the same period of 2005. EBITDA this quarter was Ps.1,322 million, 2% up compared with the prior year. EBITDA margin for the period was 51%, the same as the margin recorded in the fourth quarter of 2005.

Net sales of the full year 2006 were Ps.9,579 million and EBITDA was Ps.4,231 million, 8% and 6% higher compared with 2005, respectively, which translated into record high levels for both concepts.

"The results of 2006 mark the seventh consecutive year of expansion in EBITDA, as a consequence of our ability to continuously increase revenue, with effective cost controls," said Mario San Roman, Chief Executive Officer of TV Azteca. "Higher sales during the year resulted from the success of our programming grids in Mexico, further improvement of the revenue coming from the U.S. Hispanic market, and advertising related to extraordinary events; the cost control derived from the close scrutiny of each one of our outlays."

Fourth Quarter Results

Net sales grew 3% to Ps.2,602 million, from Ps.2,536 million in the same quarter of 2005. Total costs and expenses rose 3% to Ps.1,280 million, from Ps.1,242 million in the same period last year. As a result, the company reported EBITDA of Ps.1,322 million, 2% above Ps.1,249 million of the fourth quarter of 2005. Net income of majority stockholders was Ps.692 million, higher than Ps.93 million in the same period of 2005.

4Q 2005 4Q 2006 Change
Ps. %

Net Sales Ps. 2,536 Ps. 2,602 Ps. 67 +3%

EBITDA Ps. 1,294 Ps. 1,322 Ps. 29 +2%

Net Majority Income Ps. 93 Ps. 692 Ps. 599 +646%

Majority Income per CPO Ps. 0.03 Ps. 0.23 Ps. 0.20 +646%

-- Pesos of constant purchasing power as of December 31, 2006.
-- EBITDA is Operating Profit Before Depreciation and Amortization under
Mexican GAAP.
-- The number of CPOs outstanding as of December 31, 2006 is
2,993 million.

Net Sales

"Programming initiatives focused on audiences that constitute the target markets of our advertisers became optimal tools for the clients ad campaigns, and had a positive effect on domestic sales," added Mr. San Roman. "In addition, increasingly competitive programming grids in Azteca America boosted advertising demand in significant time slots, generating once more outstanding sales growth for the network."

Fourth quarter revenue includes net sales from Azteca America -- the company's wholly owned broadcast television network focused on the U.S. Hispanic market -- of Ps.118 million, a 20% increase from Ps.98 million in the same period a year ago.

TV Azteca also reported programming sales to other countries of Ps.22 million, compared with Ps.23 million in the fourth quarter 2005. Exports this period were mainly due to sales of the company's novela, Amor sin Condiciones, and the programs La Vida es una Cancion and Lo que Callamos las Mujeres to Latin American countries.

Barter sales were Ps.115 million, unchanged from the same period of the previous year. Inflation adjustment of advertising advances was Ps.32 million, compared with Ps.43 million for the fourth quarter of 2005.

Costs and Expenses

The 3% increase in costs and expenses during the fourth quarter resulted from the combined effect of a 1% rise in programming, production and transmission costs to Ps.980 million, from Ps.971 million in the prior year period, and an 11% growth in administrative and selling expenses to Ps.300 million, from Ps.271 million in the same quarter of 2005.

"Growing operations at Azteca America, as well as production and programming efforts to gain even larger audiences in the U.S. influenced the increase in costs and expenses," added Mr. San Roman. "Azteca America is building solid perspectives with successful programming grids that allow for higher revenue and position the company as an increasingly significant network for U.S. Hispanics."

Costs from Azteca America include growth in the rent payment for the Los Angeles station KAZA TV of US$2.4 million in the quarter, as a result of the agreement with Pappas Telecasting. As previously announced, starting July 2006, Azteca America makes cash payments equivalent to $9.6 million annually to Pappas Telecasting for the rent of the station, which is operated and managed by Azteca America.

The 11% rise in administrative and selling expense reflects increases in personnel and operating expenditures during the period, as a result of a growing volume of business in Mexico and the U.S..

EBITDA and Net Income

The net sales increase during the quarter, combined with the rise in total costs and expenses, resulted in EBITDA of Ps.1,322 million, 2% above Ps.1,294 million a year ago.

Below EBITDA, the company recorded depreciation and amortization of Ps.109 million from Ps.65 million a year ago, due mainly to a Ps.38 million increase in the amortization account. During 2005, the company implemented accounting Bulletin B-7, which suspends periodic amortizations. With the implementation of the bulletin, the company cancelled amortization of Ps.33 million in the fourth quarter of 2005, which compares with an expense of Ps.6 million this period.

TV Azteca recorded other expenses of Ps.150 million, compared with Ps.193 million a year ago. The main concepts integrating the account were legal fees and donations.

Net comprehensive financing cost during the period was Ps.152 million compared with Ps.249 million in the same quarter of 2005. There was a Ps.21 million decrease in interests paid resulting from lower interest rates from the debt with cost. Other financial expense increased Ps.17 million due to payments on interest rate hedging. Interest income increased Ps.9 million due to a higher cash balance during the quarter. The company registered a foreign exchange profit of Ps.10 million this quarter, compared with a loss of Ps.27 million a year ago; this quarter's profit resulted from the combination of a 2% appreciation of the peso against the U.S. dollar in the quarter, and a net asset monetary position in U.S. dollars. There was a Ps.45 million monetary gain due to a liability monetary position this quarter.

Provision for income tax was Ps.205 million, compared with Ps.153 million in the same period of the prior year, reflecting a larger fiscal base this quarter.

The company did not have special items this period. In the fourth quarter of 2005, TV Azteca recorded a non-recurring long-term assets impairment of Ps.487 million, as a result of the application of accounting bulletin C-15 on Grupo Todito's goodwill.

Net income of minority stockholders was Ps.15 million, compared with Ps.54 million a year ago. Net income of minority stockholders represents 50% of Azteca Web's net income, which TV Azteca consolidates in its results, and that belongs to CNCI, owner of half of that company.

Net income of majority stockholders was Ps.692 million, higher than Ps.93 million for the same period of 2005.

Outstanding Debt

As of December 31, 2006, the company's total outstanding debt was Ps.8,800 million. TV Azteca's cash balance was Ps.3,108 million, resulting in net debt of Ps.5,692 million. The total debt to last twelve months (LTM) EBITDA ratio was 2.1 times, and net debt to EBITDA was 1.3 times. LTM EBITDA to net interest expense ratio was 6.3 times.

Excluding -- for analytical purposes -- Ps.1,302 million debt due 2069, total debt was Ps.7,498 million, and total debt to EBITDA ratio was 1.8 times.

During the quarter, TV Azteca successfully issued Structured Securities Certificates for an aggregate amount of Ps.6,000 million to amortize shorter- term debt with higher cost, both from prior Structured Securities Certificates and from loans with financial institutions. The process of amortization of the prior debt had a substantial progress in the quarter and will be totally concluded during 2007.

The Ps.6,000 million are integrated by one issuance of Ps.4,000 million with an interest rate of TIIE + 148 bps and another of Ps.2,000 million at TIIE + 138 bps. The issuances mature in 2020, have a five year grace period for its principal, and gradual amortizations beginning in 2011. Fitch Mexico's rating for the certificate is AA (mex).

"The extended maturity profile and the lower interest rate further strengthen the solid financial position of the company," said Carlos Hesles, Chief Financial Officer of TV Azteca. "Lower cost of debt will further boost the company's net cash generation in a multiyear horizon, with positive effects in our financial perspectives, benefiting all of our investors."

Mr. Hesles added that, "better financial terms represent a noteworthy vote of confidence from Mexican financial market participants on positive expectations regarding the operations and the financial results of TV Azteca."

Twelve Month Results

Net sales in 2006 were Ps.9,579 million, 8% higher than Ps.8,880 million in 2005. EBITDA was Ps.4,231 million, 6% higher than Ps.4,000 million the previous year. EBITDA margin for the year was 44%. Net income of majority stockholders was Ps.2,169 million, 71% higher than Ps. 1,266 million in the prior year.

2005 2006 Change
Ps. %

Net Sales Ps. 8,880 Ps. 9,579 Ps. 699 +8%

EBITDA Ps. 4,000 Ps. 4,231 Ps. 232 +6%

Net Majority Income Ps. 1,266 Ps. 2,169 Ps. 903 +71%

Majority Income per CPO Ps. 0.42 Ps. 0.72 Ps. 0.30 +71%

-- Pesos of constant purchasing power as of Dectember 31, 2005.
-- EBITDA is Operating Profit Before Depreciation and Amortization under
Mexican GAAP.
-- The number of CPOs outstanding as of September 30, 2006 is
2,993 million.

Company Profile

TV Azteca is one of the two largest producers of Spanish-language television programming in the world, operating two national television networks in Mexico, Azteca 13 and Azteca 7, through more than 300 owned and operated stations across the country. TV Azteca affiliates include Azteca America Network, a new broadcast television network focused on the rapidly growing U.S. Hispanic market, and Azteca Web, an Internet company for North American Spanish speakers.

TV Azteca is a company of Grupo Salinas ( http://www.gruposalinas.com/ ), a group of dynamic, fast-growing, and technologically advanced companies focused on creating shareholder value and improving society through excellence. Created by Mexican entrepreneur Ricardo B. Salinas, Grupo Salinas operates as a management development and decision forum for the top leaders of member companies.

Except for historical information, the matters discussed in this press release are forward-looking statements and are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. Other risks that may affect TV Azteca and its subsidiaries are identified in documents sent to securities authorities.

Investor Relations:

Bruno Rangel Marcia San Roman
+ 52 (55) 1720 9167 + 52 (55) 1720 0041
jrangelk@tvazteca.com.mxmsromang@tvazteca.com.mx

Press Relations:

Tristan Canales Daniel McCosh
+ 52 (55) 1720 1441 + 52 (55) 1720 0059
tcanales@gruposalinas.com.mxdmccosh@tvazteca.com.mx

First Call Analyst:
FCMN Contact: msromang@tvazteca.com.mx

Source: TV Azteca, S.A. de C.V.

CONTACT: Investor Relations, Bruno Rangel, +011-5255-1720-9167,
jrangelk@tvazteca.com.mx, or Marcia San Roman, +011-5255-1720-0041,
msromang@tvazteca.com.mx; or Press Relations, Tristan Canales,
+011-5255-1720 1441, tcanales@gruposalinas.com.mx, or Daniel McCosh,
+011-5255-1720-0059, dmccosh@tvazteca.com.mx

Web site: http://www.tvazteca.com.mx/
http://www.gruposalinas.com/

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