UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13A-16 OR 15D-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of October , 2003
-----------------------
Commission File Number: 001-13196
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DESC, S.A. DE C.V.
------------------
(Translation of registrant's name into English)
PASEO DE LOS TAMARINDOS 400-B, BOSQUES DE LAS LOMAS, 05120 MEXICO, D.F., MEXICO
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(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports
under cover of Form 20-F or Form 40-F.
Form 20-F |X| Form 40-F __
---
Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(1): ____
Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(7): ____
Indicate by check mark whether by furnishing the information contained in this
Form, the registrant is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes |_| No |X|
If "Yes" is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b): 82-___________
The following are included in this report on Form 6-K:
Item
----
1. Press Release, dated October 23, 2003, announcing Registrant's
Results for the Third Quarter of 2003
2. Consolidated Financial Statements of Registrant as of September
30, 2003 and 2002, in the format required to be filed with the
Mexican Stock Exchange
2
Item 1
[Desc closed the sale of its Adhesives and Waterproofing Businesses]
[2 Photographs]
Contacts:
In Mexico: In New York:
Marisol Vazquez Mellado Blanca HiBlanca Hirani
Alejandro de la Barreda Gomez Melanie CMelanierCarpenter
Tel: 5255-5261-8037 Tel: 212-Phone:9212-406-3693
alejandro.delabarreda@desc.com.mx bhirani@i-advize.com
www.desc.com.mx --------------------
---------------
DESC CLOSED THE SALE OF ITS ADHESIVES AND
WATERPROOFING BUSINESSES
Mexico City, October 2nd, 2003 - DESC, S.A. de C.V. (NYSE: DES; BMV: DESC)
announces the closing of the sale of its adhesive and waterproofing businesses,
of the consumer products division, to Henkel Group. The amount of this
transaction will not be disclosed.
The proceeds will be used primarily to reduce bank debt and strengthen the
financial structure of the company.
The adhesives business includes the following brands: Resistol(TM),
Resistolito(TM) and Simon(TM) and the waterproofing business includes:
Fester(TM), Acriton(TM) and Resikon(TM) brands.
DESC, S.A. DE C.V. (NYSE: DES; BMV: DESC) is one of Mexico's largest industrial
groups with sales of approximately US$ 2.0 billion during 2002 and more than
16,000 employees. Through its subsidiaries, the Company is a leading operator in
the Autoparts, Chemical, Food and Real Estate Sectors.
This press release contains "forward-looking statements" (within the meaning of
the Private Securities Litigation Reform Act of 1995) that reflect the current
views of Desc's management with respect to future events. The words
"anticipate," "believe," "estimate," "expect," "intend," "may," "plan,"
"project," and "should" and similar expressions generally are intended to
identify forward-looking statements. These statements are subject to risks,
uncertainties and changes in circumstances. Actual results may differ materially
from present expectations as a result of many factors, including, but not
limited to, changes in global and domestic political, economic, business,
competitive, market and regulatory factors, the cyclicality of the autoparts and
chemicals industries and other factors which are described under the heading
"Risk Factors" in Desc's most recent Annual Report on Form 20-F filed with the
Securities and Exchange Commission. Desc does not assume any obligation to
update these forward-looking statements. Any forward-looking statement speaks
only as of the date on which it is made.
3
ITEM 1
------
[DESC LOGO]
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DESC ANNOUNCES THIRD QUARTER 2003 RESULTS
-----------------------------------------
Mexico City, October 23, 2003 - Desc, S.A. de C.V. (NYSE: DES; BMV: DESC)
announced today its results for the third quarter ended September 30, 2003
(3Q03). All figures were prepared according to generally accepted accounting
principles in Mexico.
HIGHLIGHTS
----------
Desc's operating results for 3Q03 declined when compared to 3Q02; operating
income dropped by 63.0% and EBITDA declined by 32.1% mainly due to the following
factors:
o Lower demand from OEMs due to temporary shutdowns and the elimination
of sales to DaimlerChrysler due to the closing of its plant in Mexico
City, which affected the pick-up boxes and stamping, axles and
propeller shafts businesses.
o Higher raw material costs in the Chemical Sector, which affected the
polymers and specialities products divisions.
o Strong results in the Real Estate Sector due to sales in the Bosques
de Santa Fe and Punta Mita projects.
Desc sold its adhesives and waterproofing businesses in September of 2003, the
proceeds of which will be used to strengthen its financial structure.
DESC, S.A. DE C.V. AND SUBSIDIARIES
-----------------------------------
TABLE 1. CONSOLIDATED FIGURES
Figures in millions of constant Pesos (Ps.) and U.S. dollars (US$)
------------------------------------------------------------------------------------------------------------------------------
3Q03 3Q03
vs. vs.
3Q03 3Q02 3Q02 2Q03 2Q03
------------------------------------------------------------------------------------------------------------------------------
Sales (Ps.)(3) 5,262 5,064 3.9% 5,808 -9.4%
------------------------------------------------------------------------------------------------------------------------------
SALES (US$)(1) 488 490 -0.4% 550 -11.2%
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EXPRTS (US$)(2) 217 222 -2.2% 212 2.2%
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Operating Income (Ps.)(3) 146 374 -61.1% 447 -67.4%
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OPERATING INCOME (US$)(1) 13 36 -63.0% 42 -68.6%
------------------------------------------------------------------------------------------------------------------------------
Operating Margin 2.7% 7.3% 7.7%
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EBITDA4 (Ps.)(3) 491 693 -29.2% 780 -37.0%
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EBITDA4 (US$)(1) 45 67 -32.1% 74 -38.5%
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Net Majority Income (Ps.)(3) -384 -179 NA 126 NA
------------------------------------------------------------------------------------------------------------------------------
NET MAJORITY INCOME (US$)(1) -36 -18 NA 12 NA
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(1) Figures in U.S. dollars for sales, operating income, EBITDA and net income
are calculated using monthly figures in current pesos divided by the average
monthly exchange rate.
(2) All export figures are based on real sales invoiced in U.S. dollars.
(3) All figures in this report are expressed in constant pesos as of September
30, 2003.
(4) "EBITDA" as used in this Press Release is Operating Income (Loss) plus the
sum of Depreciation and Amortization (these under Mexican GAAP), and is
presented because we believe that this term provides useful information
regarding our debt service ability. "EBITDA" should not be considered in
isolation or as a substitute for our consolidated income statements or other
financial statements prepared in accordance with Mexican GAAP or as a measure of
profitability or liquidity. NOTE: Please refer to the end of this release to the
Non GAAP Financial reconciliation Schedule.
THIRD QUARTER 2003 RESULTS
--------------------------------------------------------------------------------
SALES
-----
Sales in dollars for 3Q03 declined 0.4% to US $488 million when compared to US
$490 million reported in 2Q03, due to lower sales in the Automotive Sector.
Year-over-year, sales from the Automotive Sector decreased by 12.9% due to the
decline in vehicle demand from Mexico and the U.S. In the Chemical Sector, sales
dropped 1.1% as a result of pressures from increased competition, as well as a
decrease of construction, particularly for public works.
In the Food Sector, the 16.6% increase in revenues was mainly due to improved
results in the branded products division and the closing of the pork business in
the Bajio operations during the 3Q02.
In the Real Estate Sector, sales increased 49.4% YoY due to higher revenues in
the Bosques de Santa Fe and Punta Mita Projects.
GRAPH 1 - NET SALES 3Q03
Sector Net Sales 2Q03 (%)
------ ------------------
CHEMICAL 38%
AUTOMOTIVE 37%
FOOD 18%
REAL ESTATE 7%
EXPORTS
-------
Total exports during 3Q03 reached US $217 million, a 2.2% decline compared to
the figure reported during 3Q02. This decrease was a result of a negative effect
to the Automotive Sector, which declined by 6.1%, due to the Mexican exportation
platforms.
During the third quarter of 2003, exports represented 44.5% of total sales.
OPERATING INCOME AND OPERATING MARGIN
-------------------------------------
Year-over-Year, consolidated operating income in dollars dropped 63.0% from US
$36 million to US $13 million, due to lower results in the Automotive, Chemical
and Food Sectors, which posted declines of 99.2%, 57.2% and 61.9%, respectively.
These were mainly due to lower demand from the U.S. market, the closing of the
DaimlerChrysler operations in 2002, and the increase in raw material prices
experienced during the quarter in the Chemical Sector.
On the other hand, the Real Estate Sector registered an increase in its
operating income in dollars of 251.6% to US $9.0 million in 3Q03 from US $3.0
million in 3Q02.
TAXES
-----
During the quarter, tax provisions reached US $5 million, which included Income
and Asset Taxes and Employee Profit Sharing, a 67.0% decline compared to 3Q02,
reflecting a lower operating result. The net amount of deferred taxes was US
$(3.5) million.
NET MAJORITY INCOME (LOSS)
--------------------------
Net majority loss for 3Q03 was US $36 million mainly due to a higher exchange
rate loss caused by a near 9.0% depreciation of the peso versus the dollar
during the quarter compared with the 3Q02, as well as a lower operating result.
WWW.DESC.COM.MX
THIRD QUARTER 2003 RESULTS
--------------------------------------------------------------------------------
DEBT STRUCTURE
--------------
Quarter-over-quarter, Desc posted a US $20 million net debt decrease, mainly due
to the divestiture of the adhesives and waterproofing material businesses in the
Chemical Sector. This was partially offset by debt derived from working capital
requirements in the Autoparts and Chemical Sectors.
Year-over-year, the Company's net debt increased by 5.1% to US $967 million.
TABLE 2. DEBT BREAKDOWN
-----------------------
(Figures in millions of U.S. dollars)
---------------------------------------------------------------------------------------------------------------------
Sep 30- Dec 31- Mar 31- Jun 30- Sep 30-
02 02 03 03 03
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Cash 163 232 103 82 117
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Total Debt 1,083 1,178 1,082 1,069 1,084
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Net Debt 920 946 979 987 967
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Interest Coverage 3.8x 3.4x 3.0x 3.0x 2.7x
---------------------------------------------------------------------------------------------------------------------
Leverage Ratio* 3.4x 4.4x 4.9x 4.9x 5.5x
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Leverage Ratio** 3.3x 4.2x 4.7x 4.6x 5.1x
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*TOTAL DEBT - CASH + US $50 MILLION / EBITDA LAST 12 MONTHS.
**TOTAL DEBT - CASH / EBITDA LAST 12 MONTHS.
At the end of the third quarter of 2003, Desc's debt composition was 70%
dollar-denominated and 30% peso-denominated. Desc's debt profile at the end
of the 3Q03 is 71% in long-term debt and 29% in short-term debt. The average
cost of debt was 5.0% for the dollar-denominated, and 7.4% for the
peso-denominated one, compared to 4.8% and 8.5%, respectively in 3Q02.
DEBT REFINANCING
----------------
Desc is in the process of renegotiating approximately 70% of its total
consolidated debt, the equivalent of approximately US $700 million, with its
main creditors. This amount includes approximately US $410 million in syndicated
loans and short-term credit lines, mainly for working capital needs.
Given that during the first three quarters of 2003, Desc failed to meet the
leverage ratio covenant in its two syndicated credit agreements, it initiated
discussions with the applicable financial institutions beginning last quarter in
order to resolve the default. To date, Desc has complied and met with all other
credit obligations and principal and interest payments under its credit
agreements.
Once this process is completed, the restructuring will give Desc greater
financial flexibility and enable it to comply with the conditions stipulated in
its credit agreements. This refinancing is led by Citigroup, BBVA Bancomer and
Inbursa Grupo Financiero.
To date, Desc has met with these banks and all of its creditors in New York and
in Mexico City. Desc expects to conclude these negotiations in the next few
months.
As part of this renegotiation, the Board of Directors approved the granting of
certain guarantees, the commitment of satisfying new financial ratios and the
allocation of part of the proceeds from the sale of assets to prepay the bank
debt once the restructuring process is concluded, and as result cash levels will
experience a significant decline.
WWW.DESC.COM.MX
THIRD QUARTER 2003 RESULTS
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DIVESTITURES
------------
In the third quarter of 2003, Desc sold the assets of its adhesives and
waterproofing businesses in the Branded Products Division to the Henkel Group.
The amount of the transaction will not de disclosed. The proceeds of this
transaction will be used to strengthen the Company's financial structure.
ADOPTION OF BULLETIN C-15 "VALUATION AND TREATMENT OF LONG-TERM ASSET
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DETERIORATION"
--------------
The objective of this Bulletin is to identify the possible deterioration of
tangible and intangible fixed assets and goodwill amortization. It establishes
the criteria for recognizing losses in these items, and the manner in which to
present them in the financial statements, including discontinued operations.
Long term assets are those assets needed for operating the business, including
those expecting to provide future benefits (cash flow), be it operational or
corporate.
Due to the fact that it will be mandatory to apply Bulletin C-15 starting in
2004, the Company has initiated the process of valuing its different assets and
expects there to be a relevant charge in the Income Statement once this
valuation is completed.
WWW.DESC.COM.MX
THIRD QUARTER 2003 RESULTS
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RESULTS BY SECTOR
-----------------
AUTOMOTIVE SECTOR [AUTOMOTRIZ LOGO]
The following table (Table 3) shows the figures obtained in the Automotive
Sector.
TABLE 3. DESC AUTOMOTIVE FIGURES
--------------------------------
(Figures in millions of constant pesos (Ps.) and U.S. dollars (US$))
------------------------------------------------------------------------------------------------------------------------------
3Q03 3Q03
vs. vs.
3Q03 3Q02 3Q02 2Q03 2Q03
------------------------------------------------------------------------------------------------------------------------------
Sales (Ps.) 1,910 2,100 -9.1% 1,863 2.5%
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SALES (US$) 177 203 -12.9% 176 0.4%
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EXPORTS (US$) 121 128 -6.1% 120 0.6%
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Operating Income (Ps.) 2.3 156 -98.5% 42 -94.5%
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OPERATING INCOME (US$) 0.1 15 -99.2% 4 -97.0%
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Operating Margin 0.1% 7.4% 2.3%
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EBITDA (Ps.) (1) 188 332 -43.6% 226 -17.2%
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EBITDA (US$) (1) 17 32 -46.1% 21 -19.2%
------------------------------------------------------------------------------------------------------------------------------
(1) All EBITDA figures used in this report are calculated as Operating Income
(Loss) plus the sum of Depreciation and Amortization (according to Mexican
GAAP). This information is included since it is useful for our credit contracts.
EBITDA should not substitute income or cash flow in our Consolidated Income
Statement or any other Financial Statement prepared according to Mexican GAAP.
NOTE: Please refer to the end of this release to the Non GAAP Financial
Reconciliation Schedule.
During 3Q03, sales and operating income in dollars declined by 12.9% and 99.2%,
respectively, compared to 3Q02 as a result of:
a) Lower sales in the axle, propeller shaft and pick-up box
businesses due to the closing of the DaimlerChrysler plant in
Mexico City. In the aluminum and steel wheel, cv joint and light
and heavy duty transmission businesses, the declines were due to
lower orders from OEMs in the United States and Mexico.
b) OEMs such as GM, Ford, RenaultNissan and VW continued having
technical shutdowns during the quarter due to high inventory
levels.
c) The domestic aftermarket division posted lower sales in the
piston business due to the reuse of these components.
d) Mexico's total vehicle production as of September 30, 2003 was
1,214,564 units, which represents a 15.0% decline compared to the
same period of 2002.
e) Total vehicle production in the United States, from January
through September 2003, was 9,056,709 units, which represents a
3.0% decline versus the same period of 2002.
These factors caused operating income to reach US $0.1 million, with an
operating margin of 0.1% and EBITDA of US $17 million.
During the third quarter the implementation of the Tractor Project continued.
This project which consists of manufacturing components for axles, half-axles
and output shafts contributed sales of US $42.7 million during 2003 and US$ 17.4
million during 3Q03.
The increases in volumes year-over-year are listed below:
|X| pins 42.6% and,
|X| propeller shafts 27.3%.
WWW.DESC.COM.MX
THIRD QUARTER 2003 RESULTS
--------------------------------------------------------------------------------
Year-over-year, the most significant volume reductions were in the following
businesses:
|X| pick-up boxes 100.0%,
|X| aluminum wheels 33.7%,
|X| steel wheels 29.5%,
|X| heavy-duty transmissions 27.1%,
|X| light transmissions 20.5% and,
|X| pistons 16.0%.
Export sales reached US $121 million, a 6.1% decline compared to the same
quarter in 2002.
The average capacity utilization in the transmission, stamping, axle and
propeller shaft businesses reached approximately 54%.
During 3Q03, investments were made in the following projects:
1. Tractor Project - US $4.2 million to complete the
installation and validation of the machinery which was moved
from the United States to Queretaro and the State of Mexico,
2. CV joint plant - US $1.6 million invested in expansion and
maintenance of production lines, and,
3. Maintenance - US $3.0 million for maintenance of the
remaining operations.
OTHER EVENTS
------------
Starting in the third quarter of 2003, due to its high manufacturing quality,
the gear business began supplying components for the front axle to BMW North
America for its X5 platform as well as components for the front axle to Nissan
for its ZW platform.
WWW.DESC.COM.MX
THIRD QUARTER 2003 RESULTS
--------------------------------------------------------------------------------
CHEMICAL SECTOR
---------------
Table 4 shows the figures obtained in the Chemical Sector.
TABLE 4. CHEMICAL SECTOR FIGURES
--------------------------------
(Figures in millions of constant pesos (Ps.) and U.S. dollars (US$))
-----------------------------------------------------------------------------------------------------------------------------
3Q03 3Q03
vs. vs.
3Q03 3Q02 3Q02 2Q03 2Q03
------------------------------------------------------------------------------------------------------------------------------
Sales (Ps.) 1,971 1,914 3.0% 1,894 4.1%
------------------------------------------------------------------------------------------------------------------------------
SALES (US$) 183 185 -1.1% 179 2.1%
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EXPORTS (US$) 69 68 2.3% 66 5.0%
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Operating Income (Ps.) 52 119 -56.1% 54 -3.1%
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OPERATING INCOME (US$) 5 11 -57.2% 5 -4.3%
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Operating Margin 2.7% 6.2% 2.9%
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EBITDA (Ps.) (1) 139 208 -33.1% 139 0.5%
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EBITDA (US$) (1) 13 20 -35.3% 13 -1.2%
------------------------------------------------------------------------------------------------------------------------------
(1) "EBITDA" as used in this Press Release is Operating Income (Loss) plus the
sum of Depreciation and Amortization (these under Mexican GAAP), and is
presented because we believe that this term provides useful information
regarding our debt service ability and other internal financial analysis.
"EBITDA" should not be considered in isolation or as a substitute for our
consolidated income statements or other financial statements prepared in
accordance with Mexican GAAP or as a measure of profitability or liquidity.
NOTE: Please refer to the end of this release to the Non GAAP Financial
reconciliation Schedule.
During 3Q03, dollar sales declined slightly, 1.1% compared to 3Q02, from US $185
million to US $183 million. Operating income and EBITDA in dollars declined
57.2% and 35.3%, respectively, compared to 3Q02 due to the increases in raw
material prices affecting mainly the polymers and specialized products
businesses.
It is worth noting that during the third quarter of 2003, the ecosystems
division which consists of the phosphate and laminates businesses improved its
operating income and EBITDA in dollars by 11.3% and 1.2%, respectively, when
compared to 3Q02 due to improvements in the phosphates business, resulting from
improvements in the operation and in raw material prices.
Exports for the quarter increased 2.3%, from US $68 million in 3Q02, to US $69
million in 3Q03, demonstrating the market diversification effort done by our
divisions.
During 3Q03 Desc continued to experience pressure from our clients to maintain
prices of our finished products.
Compared to 3Q02, Desc's main raw materials such as butadiene monomer,
natural gas, acetocyanohidrine and high sulfate full oil (HSFO) registered price
increases of 36.8%, 61.6%, 20.5% and 20.6%, respectively. These raw material
price increases have not been entirely passed on to final prices due to the
current market conditions.
Capex reached US $2.8 million, allocated to meet future demand in the rubber
business for polymers and specialties products.
WWW.DESC.COM.MX
THIRD QUARTER 2003 RESULTS
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FOOD SECTOR [FOOD SECTOR LOGO]
------------------------------
Table 5 shows the figures obtained in the Food Sector.
TABLE 5. FOOD SECTOR FIGURES
----------------------------
(Figures in millions of constant pesos (Ps.) and U.S. dollars (US$))
---------------------------------------------------------------------------------------------------------------------------------
3Q03 3Q03
vs. vs.
3Q03 3Q02 3Q02 2Q03 2Q03
-------------------------------------------------- ---------------- --------------- -------------- --------------- ---------------
Sales (Ps.) 957 787 21.7% 902 6.1%
-------------------------------------------------- ---------------- --------------- -------------- --------------- ---------------
SALES (US $) 89 76 16.6% 85 4.1%
-------------------------------------------------- ---------------- --------------- -------------- --------------- ---------------
EXPORTS (US $) 27 26 4.9% 26 2.4%
-------------------------------------------------- ---------------- --------------- -------------- --------------- ---------------
Operating Income (Ps.) 40 101 -60.7% 25 57.9%
-------------------------------------------------- ---------------- --------------- -------------- --------------- ---------------
OPERATING INCOME (US $) 4 10 -61.9% 2 53.5%
-------------------------------------------------- ---------------- --------------- -------------- --------------- ---------------
Operating Margin 4.1% 12.6% 2.8%
-------------------------------------------------- ---------------- --------------- -------------- --------------- ---------------
EBITDA (Ps.) (1) 81 131 -38.0% 65 24.3%
-------------------------------------------------- ---------------- --------------- -------------- --------------- ---------------
EBITDA (US$) (1) 8 13 -40.1% 6 21.5%
-------------------------------------------------- ---------------- --------------- -------------- --------------- ---------------
(1) "EBITDA" as used in this Press Release is Operating Income (Loss) plus the
sum of Depreciation and Amortization (these under Mexican GAAP), and is
presented because we believe that this term provides useful information
regarding our debt service ability and other internal financial analysis.
"EBITDA" should not be considered in isolation or as a substitute for our
consolidated income statements or other financial statements prepared in
accordance with Mexican GAAP or as a measure of profitability or liquidity.
NOTE: Please refer to the end of this release to the Non GAAP Financial
reconciliation Schedule.
The following table provides the operating margins of the branded products and
pork businesses:
TABLE 6. FOOD SECTOR - RELEVANT FIGURES
---------------------------------------
*The Pork Business figures include the effect of the closing of the Bajio region
operations in the 3Q02.
The results by division are as follows:
----------------------------------------------------------------------------------------------------------------------------------
3Q03
vs.
3Q03 3Q02 3Q02
----------------------------------------------------------------------------------------------------------------------------------
BRANDED PRODUCTS
----------------------------------------------------------------------------------------------------------------------------------
Sales (millions of US$) 57 51 11.0%
----------------------------------------------------------------------------------------------------------------------------------
Operating Margin 4.7% 7.9%
----------------------------------------------------------------------------------------------------------------------------------
PORK BUSINESS
----------------------------------------------------------------------------------------------------------------------------------
Sales (millions of US$) 32 25 27.8%
----------------------------------------------------------------------------------------------------------------------------------
Operating Margin 3.1% 22.2%
----------------------------------------------------------------------------------------------------------------------------------
FOOD CONSOLIDATED
----------------------------------------------------------------------------------------------------------------------------------
Sales (millions of US$) 89 76 16.6%
----------------------------------------------------------------------------------------------------------------------------------
Operating Margin 4.1% 12.6%
----------------------------------------------------------------------------------------------------------------------------------
WWW.DESC.COM.MX
THIRD QUARTER 2003 RESULTS
--------------------------------------------------------------------------------
BRANDED PRODUCTS
During 3Q03, net sales increased 11.0% when compared to 3Q02, due to the strong
performance of "Del Fuerte" brand tomato puree, "Embasa" brand ketchup and
higher exports to the U.S. in the coffee business, as well as the price
increases in the majority of categories in the domestic market.
In ASF (Authentic Specialty Foods), the branded products business in the U.S.,
the new products launched under the "La Victoria" and "Embasa" brands have been
well accepted. In Mexico, the chiles and salsas "Del Fuerte" continue increasing
its sales, as well as higher sales of "Zuko" brand powdered beverage mix, have
offset the drop in demand stemming from lower economic activity in the U.S. and
Mexico.
The numbers reported for 3Q02 were not representative and demonstrated an
extraordinary behavior due to an adjustment of inventories. As a result of this,
the operating margin in the branded products division declined from 7.9% in 3Q02
to 4.7% in 3Q03.
PORK BUSINESS
During the quarter, sales in the Pork Business increased 27.8% when compared to
3Q02.
The operating margin in the 3Q03 was 3.1% compared to 22.2% reported in 3Q02 due
to the closing of the Bajio operation in 2002. For this reason sales figures and
operating margin are not comparable.
Considering pork operations in the Bajio during the 3Q02, operating margin
improved from -10.4% to 3.1% in the 3Q03, based on Pork price increases, from
$10.90 per kg in 3Q02 to $13.10 per kg in 3Q03.
Capacity utilization remained at 100% in the Southeast region, due to a high
demand.
Investments in fixed assets reached US $0.22 million, which was allocated to
equipment to maintain and modify the infrastructure of farms.
Graph 2: National Pork Price
[Graph Displaying National Pork Prices. Source is national market information
systems (SECOFI).]
WWW.DESC.COM.MX
THIRD QUARTER 2003 RESULTS
--------------------------------------------------------------------------------
REAL ESTATE SECTOR [REAL ESTATE SECTOR LOGO]
Following are the results for the Real Estate Sector for the third quarter of
2003:
TABLE 7. DINE FIGURES
---------------------
Figures in millions of constant pesos (Ps.) and U.S. dollars (US$)
-----------------------------------------------------------------------------------------------------------------------------
3Q03 3Q03
vs. vs.
3Q03 3Q02 3Q02 2Q03 2Q03
------------------------------------------------------------------------------------------------------------------------------
Sales (Ps.) 393 251 56.8% 1,136 -65.4%
------------------------------------------------------------------------------------------------------------------------------
SALES (US $) 36 24 49.4% 107 -66.4%
------------------------------------------------------------------------------------------------------------------------------
Operating Income (Ps.) 99 27 264.2% 349 -71.6%
------------------------------------------------------------------------------------------------------------------------------
OPERATING INCOME (US $) 9 3 251.6% 33 -72.5%
------------------------------------------------------------------------------------------------------------------------------
Operating Margin 24.9% 10.6% 30.5%
------------------------------------------------------------------------------------------------------------------------------
EBITDA (Ps.) (1) 105 37 181.3% 355 -70.3%
------------------------------------------------------------------------------------------------------------------------------
EBITDA (US$) (1) 10 4 170.3% 33 -71.2%
------------------------------------------------------------------------------------------------------------------------------
(1) "EBITDA" as used in this Press Release is Operating Income (Loss) plus the
sum of Depreciation and Amortization (these under Mexican GAAP), and is
presented because we believe that this term provides useful information
regarding our debt service ability and other internal financial analysis.
"EBITDA" should not be considered in isolation or as a substitute for our
consolidated income statements or other financial statements prepared in
accordance with Mexican GAAP or as a measure of profitability or liquidity.
NOTE: Please refer to the end of this release to the Non GAAP Financial
reconciliation Schedule.
Sales in 3Q03 reached US $36 million, an increase of 49.4% when compared to
3Q02, driven mainly by the residential project Bosques de Santa Fe.
Operating margin for 3Q03 was 24.9%, compared to 10.6% during 3Q02 due to
greater sales and lower operating expenses during the quarter.
Sales for the 3Q03 were as follows:
|X| Bosques de Santa Fe 63.7%,
|X| Punta Mita 14.3%,
|X| Completed inventory (Bosques de las Lomas) 12.5% and,
|X| Commercial lots 9.5%.
During this quarter, the Real Estate Sector sold 11 residential lots and one lot
for the development of apartments in the Bosques de Santa Fe project. With these
sales, 86% of the single-family and 57% of the multi-family residential lots
have been sold.
In Punta Mita, Desc we completed the sale of 2 beachfront lots and one lot for
the expansion of the Four Seasons Hotel. Investments in this project during the
quarter were US $0.5 million.
In Arcos Bosques, the construction of North Building "C" continued on schedule
and within budget and is set for completion before year-end. During the quarter,
US $2.1 million were invested in the project.
WWW.DESC.COM.MX
THIRD QUARTER 2003 RESULTS
--------------------------------------------------------------------------------
CONTACTS: MARISOL VAZQUEZ-MELLADO
ALEJANDRO DE LA BARREDA / CAROLINA RENDON
TEL.: (5255) 5261 8037
ALEJANDRO.DELABARREDA@MAIL.DESC.COM.MX
** TABLES TO FOLLOW **
THIRD QUARTER 2003 RESULTS
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FINANCIAL INDICATORS
3Q03 2Q03 1Q03 4Q02 3Q02 2Q02
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Interest Coverage 2.7x 3.0x 3.0x 3.3x 3.8x 3.8x
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Short-term debt 29% 27% 23% 28% 20% 26%
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Long-term debt 71% 73% 77% 72% 80% 74%
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Peso-denominated debt 30% 32% 31% 39% 32% 31%
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Dollar-denominated debt 70% 68% 69% 61% 68% 69%
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SHARES OUTSTANDING
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"A" Shares 587,479,900 42.9%
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"B" Shares 506,257,866 37.0%
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"C" Shares 275,341,610 20.1%
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TOTAL 1,369,079,376 100.0%
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To reconcile all Non GAAP items the following tables, which include Depreciation
and Amortization figures, are provided:
NON GAAP RECONCILIATION SCHEDULE TABLES
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DESC, S.A. DE C.V. AND SUBSIDIARIES
Figures in millions of constant pesos (Ps.) and U.S. dollars (US$)
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3Q03 3Q03
vs. vs.
3Q03 3Q02 3Q02 2Q03 2Q03
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Operating Profit/ (Loss) pesos 146 374 -61.1% 447 -67.4%
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Operating Profit US $ 13 36 -63.0% 42 -68.6%
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Depreciation and Amortization pesos 345 319 8.2% 333 3.6%
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Depreciation y Amortization US $ 32 31 3.2% 32 0.0%
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EBITDA pesos 491 693 -29.2% 780 -37.0%
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EBITDA US $ 45 67 -32.1% 74 -38.5%
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AUTOMOTIVE SECTOR
Figures in millions of constant pesos (Ps.) and U.S. dollars (US$)
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3Q03 3Q03
vs. vs.
3Q03 3Q02 3Q02 2Q03 2Q03
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Operating Profit/ (Loss) pesos 2.3 156 -98.5% 42 -94.5%
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Operating Profit US $ 0.1 15 -99.2% 4 -97.0%
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Depreciation and Amortization pesos 186 176 5.5% 184 0.9%
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Depreciation y Amortization US $ 17 17 -0.6% 17 -0.6%
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EBITDA pesos 188 332 -43.6% 226 -17.2%
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EBITDA US $ 17 32 -46.1% 21 -19.2%
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WWW.DESC.COM.MX
THIRD QUARTER 2003 RESULTS
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CHEMICAL SECTOR
Figures in millions of constant pesos (Ps.) and U.S. dollars (US$)
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3Q03 3Q03
vs. vs.
3Q03 3Q02 3Q02 2Q03 2Q03
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Operating Profit/ (Loss) pesos 52 119 -56.1% 54 -3.1%
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Operating Profit US $ 5 11 -57.2% 5 -4.3%
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Depreciation and Amortization pesos 87 89 -2.4% 85 2.7%
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Depreciation y Amortization US $ 8 9 -6.1% 8 0.7%
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EBITDA pesos 139 208 -33.1% 139 0.5%
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EBITDA US $ 13 20 -35.3% 13 -1.2%
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FOOD SECTOR
Figures in millions of constant pesos (Ps.) and U.S. dollars (US$)
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3Q03 3Q03
vs. vs.
3Q03 3Q02 3Q02 2Q03 2Q03
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Operating Profit/ (Loss) pesos 40 101 -60.7% 25 57.9%
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Operating Profit US $ 4 10 -61.9% 2 53.5%
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Depreciation and Amortization pesos 41 30 37.7% 40 3.3%
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Depreciation y Amortization US $ 4 3 30.8% 4 1.4%
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EBITDA pesos 81 131 -38.0% 65 24.3%
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EBITDA US $ 8 13 -40.1% 6 21.5%
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REAL ESTATE SECTOR
Figures in millions of constant pesos (Ps.) and U.S. dollars (US$)
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3Q03 3Q03
vs. vs.
3Q03 3Q02 3Q02 2Q03 2Q03
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Operating Profit/ (Loss) pesos 99 27 264.2% 349 -71.6%
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Operating Profit US $ 9 3 251.6% 33 -72.5%
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Depreciation and Amortization pesos 6 10 -37.8% 6 -1.7%
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Depreciation y Amortization US $ 0.6 1.0 -39.8% 0.6 -3.3%
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EBITDA pesos 105 37 181.3% 355 -70.3%
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EBITDA US $ 10 4 170.3% 33 -71.2%
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WWW.DESC.COM.MX
THIRD QUARTER 2003 RESULTS
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DESC, S.A. DE C.V. AND SUBSIDIARIES
Consolidated Balance Sheet
(In millions of constant pesos, as of September 30, 2003)
3Q03 3Q02 %
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ASSETS
Current Assets:
Cash and Short Term Investments 1,278 1,776 -28.1%
Account and Documents Receivable 6,214 4,559 36.3%
Inventories and Other Assets 3,088 3,174 -2.7%
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TOTAL CURRENT ASSETS 10,580 9,509 11.3%
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Land held for development and real estate projects 3,660 4,161 -12.0%
Fixed Assets 12,507 13,430 -6.9%
Investments in shares of Subsidiaries Non Consolidated 43 123 -64.9%
Other Assets 2,790 2,804 -0.5%
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TOTAL ASSETS 29,580 30,027 -1.5%
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LIABILITIES
Current Liabilities:
Banks Loans 3,491 2,227 56.7%
Suppliers 1,874 1,986 -5.6%
Taxes to be paid 698 773 -9.7%
Other Liabilities 1,646 2,036 -19.1%
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TOTAL CURRENT LIABILITIES 7,709 7,022 9.8%
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Long-Term Debt 8,353 9,043 -7.6%
Deferred taxes 1,391 799 74.1%
Other 580 501 15.7%
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TOTAL LIABILITIES 18,033 17,365 3.8%
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STOCKHOLDERS' EQUITY
Capital Stock 18 18 0.0%
Paid-in Surplus 1,170 1,170 0.0%
Retained Earnings and Capital Reserve 20,387 21,173 -3.7%
Other -13,897 -13,644 1.9%
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TOTAL MAJORITY INTEREST 7,678 8,717 -11.9%
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Minority Interest 3,869 3,945 -1.9%
TOTAL STOCKHOLDERS' EQUITY 11,547 12,662 -8.8%
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TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 29,580 30,027 -1.5%
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WWW.DESC.COM.MX
THIRD QUARTER 2003 RESULTS
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DESC, S.A. DE C.V. AND SUBSIDIARIES
Consolidated Income Statements
(In millions of constant pesos, as of September 30, 2003)
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3Q03 3Q02 Var.
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Net Sales 5,262 5,064 3.9%
Cost of Sales 4,115 3,772 9.1%
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GROSS PROFIT 1,147 1,292 -11.2%
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Operating Expenses:
Administrative and Selling Expenses 1,001 918 9.1%
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OPERATING INCOME 146 374 -61.1%
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Interest Expense 245 259 -5.6%
Interest Income (11) (55) -80.7%
Exchange Gain (loss), net 303 190 59.7%
Gain on Monetary Position (71) (103) -31.1%
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COMPREHENSIVE FINANCIAL RESULT 466 291 60.3%
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OTHER EXTRAORDINARY INCOME OR EXPENSES 33 272 -87.9%
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INCOME BEFORE PROVISIONS (352) (189) 87.1%
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Provisions for:
Income and Asset Tax 35 126 -72.3%
Employee Profit Sharing 19 29 -36.9%
Deferred Income Taxes (36) (128) -71.6%
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TOTAL TAXES 18 27 -38.1%
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NET CONSOLIDATED INCOME (370) (216) 71.2%
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Minority Interest 14 (37) -138.7%
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MAJORITY NET INCOME (384) (179) 114.5%
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12 months Net Income per Share (0.98) (0.35) NA
Number of shares outstanding:
(Millions of shares) 1,369 1,369 NA
EBITDA 491 693 -29.2%
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WWW.DESC.COM.MX
THIRD QUARTER 2003 RESULTS
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Accum.
2003 3Q03 2Q03 1Q03 4Q02 3Q02 2Q02
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SALES (US$)
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Consolidated 1,509 488 550 471 430 490 551
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Automotive Sector 533 177 176 179 166 203 243
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Chemical Sector 550 183 179 187 173 185 187
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Food Sector 258 89 85 83 87 76 94
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Real Estate Sector 165 36 107 21 4 24 26
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EXPORTS (US$)
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Consolidated 645 217 212 216 187 222 265
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Automotive Sector 357 121 120 117 102 128 168
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Chemical Sector 209 69 66 73 64 68 69
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Food Sector 79 27 26 26 21 26 28
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OPERATING INCOME
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Consolidated 75 13 42 20 -17 36 48
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Automotive Sector 15 0 4 11 -9 15 31
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Chemical Sector 14 5 5 4 0 11 13
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Food Sector 7 4 2 1 0 10 0
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Real Estate Sector 47 9 33 5 -3 3 6
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OPERATING MARGIN
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Consolidated 5.0% 2.8% 7.7% 4.2% -3.8% 7.3% 8.7%
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Automotive Sector 2.8% 0.1% 2.3% 6.0% -5.5% 7.4% 12.9%
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Chemical Sector 2.5% 2.7% 2.9% 2.0% 0.1% 6.2% 7.0%
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Food Sector 2.7% 4.1% 2.8% 1.0% -0.3% 12.6% -0.5%
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Real Estate Sector 28.5% 24.9% 30.5% 24.7% -80.9% 10.6% 21.7%
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EBITDA (US$)
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Consolidated 170 45 74 51 18 67 79
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Automotive Sector 66 17 21 28 11 32 48
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Chemical Sector 38 13 13 12 11 20 21
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Food Sector 18 8 6 5 4 13 4
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Real Estate Sector 49 10 33 6 -3 4 6
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* Actual figures.
This press release contains "forward-looking statements" (within the meaning of
the Private Securities Litigation Reform Act of 1995) that reflect the current
views of Desc's management with respect to future events. The words
"anticipate," "believe," "estimate," "expect," "intend," "may," "plan,"
"project," and "should" and similar expressions generally are intended to
identify forward-looking statements. These statements are subject to risks,
uncertainties and changes in circumstances. Actual results may differ materially
from present expectations as a result of many factors, including, but not
limited to, changes in global and domestic political, economic, business,
competitive, market and regulatory factors, the cyclicality of the autoparts and
chemicals industries and other factors which are described under the heading
"Risk Factors" in Desc's most recent Annual Report on Form 20-F filed with the
Securities and Exchange Commission. Desc does not assume any obligation to
update these forward-looking statements. Any forward-looking statement speaks
only as of the date on which it is made.
WWW.DESC.COM.MX
ITEM 2
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CONSOLIDATED BALANCE SHEET
AT SEPTEMBER 3Oth OF 2003 AND 2002
(Thousands of Pesos)
REF S THIRD QUARTER OF THIRD QUARTER OF
PRESENT FINANCIAL PREVIOUS FINANCIAL
YEAR YEAR
AMOUNT % AMOUNT %
1 TOTAL ASSETS 29,579,788 100% 30,027,085 100%
2 CURRENT ASSETS 10,579,503 36% 9,509,611 32%
3 CASH AND SHORT-TERM INVESTMENTS 1,277,545 4% 1,776,274 6%
4 ACCOUNTS AND DOCUMENTS RECEIVABLE (NET) 4,592,093 16% 3,132,442 10%
5 OTHER ACCOUNTS AND DOCUMENTS RECEIVABLE 1,621,405 5% 1,426,714 5%
6 INVENTORIES 3,013,680 10% 3,174,181 11%
7 OTHER CURRENT ASSETS 74,780 0% 0 0%
8 LONG-TERM 3,703,191 13% 4,283,320 14%
9 ACCOUNTS AND DOCUMENTS RECEIVABLE (NET) 0 0% 0 0%
10 INVESTMENT IN SHARES OF SUBSIDIARIES AND
NON-CONSOLIDATED ASSOCIATED 43,101 0% 122,756 0%
11 OTHER INVESTMENTS 3,660,090 12% 4,160,564 14%
12 PROPERTY, PLANT AND EQUIPMENT 12,507,207 42% 13,430,237 45%
13 PROPERTY 6,960,407 24% 7,004,585 23%
14 MACHINERY AND INDUSTRIAL EQUIPMENT (NET) 16,364,563 55% 16,216,698 54%
15 OTHER EQUIPMENT 1,982,284 7% 2,034,732 7%
16 ACCUMULATED DEPRECIATION 13,646,257 46% 12,605,530 42%
17 CONSTRUCTION IN PROGRESS 846,210 3% 779,752 3%
18 DEFERRED ASSETS (NET) 1,570,003 5% 1,555,614 5%
19 OTHER ASSETS 1,219,884 4% 1,248,304 4%
20 TOTAL LIABILITIES 18,032,878 100% 17,364,628 100%
21 CURRENT LIABILITIES 7,708,844 43% 7,021,503 40%
22 SUPPLIERS 1,874,251 10% 1,986,187 11%
23 BANK LOANS 3,490,742 19% 2,227,437 13%
24 STOCK MARKET LOANS 0 0% 0 0%
25 TAXES TO BE PAID 697,928 4% 772,650 4%
26 OTHER CURRENT LIABILITIES 1,645,923 9% 2,035,229 12%
27 LONG-TERM LIABILITIES 8,353,041 46% 9,043,318 52%
28 BANK LOANS 6,109,915 34% 6,801,155 39%
29 STOCK MARKET LOANS 2,243,126 12% 2,242,163 13%
30 OTHER LOANS 0 0% 0 0%
31 DEFERRED LOANS 1,391,259 8% 798,901 5%
32 OTHER LIABILITIES 579,734 3% 500,906 3%
33 CONSOLIDATED STOCK HOLDERS' EQUITY 11,546,910 100% 12,662,458 100%
34 MINORITY INTEREST 3,869,231 34% 3,945,425 31%
35 MAJORITY INTEREST 7,677,679 66% 8,717,033 69%
36 CONTRIBUTED CAPITAL 12,084,174 105% 12,524,041 99%
37 PAID-IN CAPITAL STOCK (NOMINAL) 17,798 0% 17,798 0%
38 RESTATEMENT OF PAID-IN CAPITAL STOCK 10,895,986 94% 11,335,853 90%
39 PREMIUM ON SALES OF SHARES 1,170,390 10% 1,170,390 9%
40 CONTRIBUTIONS FOR FUTURE CAPITAL INCREASES
41 CAPITAL INCREASE (DECREASE) -4,406,495 -38% -3,807,008 -30%
42 RETAINED EARNINGS AND CAPITAL RESERVE 17,713,372 153% 18,428,454 146%
43 REPURCHASE FUND OF SHARES 907,079 8% 907,079 7%
44 EXCESS (SHORTFALL) IN RESTATEMENT OF
HOLDER'S EQUITY -22,442,578 -194% -22,827,451 -180%
45 NET INCOME FOR THE YEAR -584,368 -5% -315,090 -2%
CONSOLIDATED BALANCE SHEET
BREAKDOWN OF MAIN CONCEPTS
(Thousands of Pesos)
REF S THIRD QUARTER THIRD QUARTER
OF PRESENT OF PREVIOUS
FINANCIAL YEAR FINANCIAL YEAR
AMOUNT % AMOUNT %
3 CASH AND SHORT-TERM INVESTMENTS 1,277,545 100% 1,776,274 100%
46 CASH 978,139 77% 324,864 18%
47 SHORT-TERM INVESTMENTS 299,406 23% 1,451,410 82%
18 DEFERRED ASSETS (NET) 1,570,003 100% 1,555,614 100%
48 AMORTIZED OR REDEEMED EXPENSES 0 0% 0 0%
49 GOODWILL 1,570,003 100% 1,555,614 100%
50 DEFERRED TAXES 0 0% 0 0%
51 OTHERS 0 0% 0 0%
21 CURRENT LIABILITIES 7,708,844 100% 7,021,503 100%
52 FOREIGN CURRENCY LIABILITIES 4,455,703 58% 3,447,502 49%
53 MEXICAN PESOS LIABILITIES 3,253,141 42% 3,574,001 51%
24 STOCK MARKET LOANS 0 0% 0 0%
54 COMMERCIAL PAPER 0 0% 0 0%
55 CURRENT MATURITIES OF MEDIUM TERM NOTES 0 0% 0 0%
56 CURRENT MATURITIES OF BONDS 0 0% 0 0%
26 OTHER CURRENT LIABILITIES 1,645,923 100% 2,035,229 100%
57 OTHER CURRENT LIABILITIES WITH COST 0 0% 0 0%
58 OTHER CURRENT LIABILITIES WITHOUT COST 1,645,923 100% 2,035,229 100%
27 LONG-TERM LIABILITIES 8,353,041 100% 9,043,318 100%
59 FOREIGN CURRENCY LIABILITIES 4,983,195 60% 5,419,724 60%
60 MEXICAN PESOS LIABILITIES 3,369,846 40% 3,623,594 40%
29 STOCK MARKET LOANS 2,243,126 100% 2,242,163 100%
61 BONDS 0 0% 0 0%
62 MEDIUM TERM NOTES 2,243,126 100% 2,242,163 100%
30 OTHER LOANS 0 0% 0 0%
63 OTHER LOANS WITH COST 0 0% 0 0%
64 OTHER LOANS WITHOUT COST 0 0% 0 0%
31 DEFERRED LOANS 1,391,259 100% 798,901 100%
65 NEGATIVE GOODWILL 0 0% 0 0%
66 DEFERRED TAXES 1,391,259 100% 798,901 100%
67 OTHERS 0 0% 0 0%
32 OTHER LIABILITIES 579,734 100% 500,906 100%
68 RESERVES 0 0% 0 0%
69 OTHERS LIABILITIES 579,734 100% 500,906 100%
44 EXCESS (SHORTFALL) IN RESTATEMENT OF
STOCK HOLDER'S EQUITY -22,442,578 100% -22,827,451 100%
70 ACCUMULATED INCOME DUE TO MONETARY POSITION 0 0% 0 0%
71 INCOME FROM NON-MONETARY POSITION ASSETS -22,442,578 100% -22,827,451 100%
CONSOLIDATED BALANCE SHEET
OTHER CONCEPTS
(Thousands of Pesos)
REF S THIRD QUARTER OF THIRD QUARTER OF
PRESENT FINANCIAL PREVIOUS FINANCIAL
YEAR YEAR
AMOUNT AMOUNT
72 WORKING CAPITAL 2,870,659 2,488,108
73 PENSIONS FUND AND SENIORITY PREMIUMS 580,238 581,092
74 EXECUTIVES (*) 0 0
75 EMPLOYERS (*) 5,535 7,341
76 WORKERS (*) 10,165 10,254
77 CIRCULATION SHARES (*) 1,369,079,376 1,369,079,376
78 REPURCHASED SHARES (*) 0 0
(*) THESE AMOUNTS ARE EXPRESSED IN UNITS
CONSOLIDATED INCOME STATEMENT
FROM JANUARY 1st TO SEPTEMBER 30th OF 2003 AND 2002
(Thousands of Pesos)
REF R THIRD QUARTER THIRD QUARTER
PRESENT FINANCIAL PREVIOUS FINANCIAL
YEAR YEAR
AMOUNT % AMOUNT %
1 NET SALES 16,246,235 100% 15,523,306 100%
2 COST OF SALES 12,616,305 78% 11,599,585 75%
3 GROSS INCOME 3,629,930 22% 3,923,721 25%
4 OPERATING EXPENSES 2,817,481 17% 2,690,711 17%
5 OPERATING INCOME 812,449 5% 1,233,010 8%
6 TOTAL FINANCING COST 952,942 6% 908,822 6%
7 INCOME AFTER FINANCING COST -140,493 -1% 324,188 2%
8 OTHER FINANCIAL OPERATIONS 61,509 0% 41,957 0%
9 INCOME BEFORE TAXES AND WORKERS' PROFIT SHARING -202,002 -1% 282,231 2%
10 RESERVE FOR TAXES AND WORKERS' PROFIT SHARING 331,370 2% 176,800 1%
11 NET INCOME AFTER TAXES AND WORKERS' PROFIT SHARING -533,372 -3% 105,431 1%
12 SHARE IN NET INCOME OF SUBSIDIARIES AND
NON-CONSOLIDATED ASSOCIATES (1,081) 0% (178) 0%
13 CONSOLIDATED NET INCOME OF CONTINUOUS -534,453 -3% 105,253 1%
14 INCOME OF DISCONTINUOUS OPERATIONS -43,470 0% 392,420 3%
15 CONSOLIDATED NET INCOME BEFORE EXTRAORDINARY ITEMS -490,983 -3% -287,167 -2%
16 EXTRAORDINARY ITEMS NET EXPENSES (INCOME) 0 0% 0 0%
17 NET EFFECT AT THE BEGINNING OF THE YEAR BY
CHANGES IN ACCOUNTING PRINCIPLES 0 0% 0 0%
18 NET CONSOLIDATED INCOME -490,983 -3% -287,167 -2%
19 NET INCOME OF MINORITY INTEREST 93,385 1% 27,923 0%
20 NET INCOME OF MAJORITY INTEREST -584,368 -4% -315,090 -2%
CONSOLIDATED INCOME STATEMENT
BREAKDOWN OF MAIN CONCEPTS
(Thousands of Pesos)
REF R THIRD QUARTER OF THIRD QUARTER OF
PRESENT FINANCIAL PREVIOUS FINANCIAL
YEAR YEAR
AMOUNT % AMOUNT %
1 NET SALES 16,246,235 100% 15,523,306 100%
21 DOMESTIC 9,301,505 57% 8,363,886 54%
22 FOREIGN 6,944,730 43% 7,159,420 46%
23 TRANSLATED INTO DOLLARS (***) 644,659 4% 714,779 5%
6 TOTAL FINANCING COST 952,942 100% 908,822 100%
24 INTEREST PAID 754,358 79% 665,103 73%
25 EXCHANGE LOSSES 361,814 38% 548,238 60%
26 INTEREST EARNED 27,116 3% 87,949 10%
27 EXCHANGE PROFITS 0 0% 0 0%
28 GAIN DUE TO MONETARY POSITION -189,064 -20% -293,709 -32%
29 LOSS IN UDI's ADJUSTMENT 52,950 6% 77,139 14%
29 PROFIT IN UDI's ADJUSTMENT 0 0% 0 0%
8 OTHER FINANCIAL OPERATIONS 61,509 100% 41,957 100%
29 OTHER NET EXPENSES (INCOME) NET 61,509 100% 41,957 100%
30 (PROFIT) LOSS ON SALE OF OWN SHARES 0 0% 0 0%
31 (PROFIT) LOSS ON SALE OF SHORT-TERM INVESTMENTS 0 0% 0 0%
10 RESERVE FOR TAXES AND WORKERS' PROFIT SHARING 331,370 100% 176,800 100%
32 INCOME TAX 215,951 65% 505,200 286%
33 DEFERRED INCOME TAX 58,362 18% -437,163 -247%
34 WORKERS' PROFIT SHARING 57,057 17% 108,763 62%
35 DEFERRED WORKERS' PROFIT SHARING 0 0% 0 0%
CONSOLIDATED INCOME STATEMENT
OTHER CONCEPTS
(Thousands of Pesos)
REF R THIRD QUARTER THIRD QUARTER
OF FINANCIAL OF PREVIOUS
PRESENT YEAR FINANCIAL YEAR
AMOUNT AMOUNT
36 TOTAL SALES 17,065,914 16,163,688
37 NET INCOME OF THE YEAR 0 0
38 NET SALES (**) 20,753,458 22,631,269
39 OPERATION INCOME (**) 643,222 1,737,337
40 NET INCOME OF MAJORITY INTEREST (**) -1,398,972 -500,029
41 NET CONSOLIDATED INCOME (**) -1,336,253 309,861
(**) BASED ON THE RESTATED INFORMATION OF THE LAST TWELVE MONTHS
CONSOLIDATED INCOME STATEMENT
FROM JULY 1st TO SEPTEMBER 30th OF 2003 AND 2002
(Thousands of Pesos)
REF R THIRD QUARTER OF THIRD QUARTER OF
PRESENT FINANCIAL PREVIOUS FINANCIAL
YEAR YEAR
AMOUNT % AMOUNT %
1 NET SALES 5,262,086 100% 5,063,558 100%
2 COST OF SALES 4,115,460 78% 3,771,886 74%
3 GROSS INCOME 1,146,626 22% 1,291,672 26%
4 OPERATING EXPENSES 1,001,087 19% 917,686 18%
5 OPERATING INCOME 145,539 3% 373,986 7%
6 TOTAL FINANCING COST 466,056 9% 290,722 6%
7 INCOME AFTER FINANCING COST -320,517 -6% 83,264 2%
8 OTHER FINANCIAL OPERATIONS 3,652 0% -92,916 -2%
9 INCOME BEFORE TAXES AND WORKERS' PROFIT SHARING -324,169 -6% 176,180 3%
10 RESERVE FOR TAXES AND WORKERS' PROFIT SHARING 17,035 0% 27,532 1%
11 NET INCOME AFTER TAXES AND WORKERS' PROFIT SHARING -341,204 -6% 148,648 3%
12 SHARE IN NET INCOME OF SUBSIDIARIES AND
NON-CONSOLIDATED ASSOCIATES (1,081) 0% 27,736 1%
13 CONSOLIDATED NET INCOME OF CONTINUOUS -342,285 -7% 176,384 3%
14 INCOME OF DISCONTINUOUS OPERATIONS 27,511 1% 392,420 8%
15 CONSOLIDATED NET INCOME BEFORE EXTRAORDINARY ITEMS -369,796 -7% -216,036 -4%
16 EXTRAORDINARY ITEMS NET EXPENSES (INCOME) 0 0% 0 0%
17 NET EFFECT AT THE BEGINNING OF THE YEAR BY
CHANGES IN ACCOUNTING PRINCIPLES 0 0% 0 0%
18 NET CONSOLIDATED INCOME -369,796 -7% -216,036 -4%
19 NET INCOME OF MINORITY INTEREST 14,303 0% -36,939 -1%
20 NET INCOME OF MAJORITY INTEREST -384,099 -7% -179,098 -4%
CONSOLIDATED INCOME STATEMENT
BREAKDOWN OF MAIN CONCEPTS
(Thousands of Pesos)
REF R THIRD QUARTER OF THIRD QUARTER OF
PRESENT FINANCIAL PREVIOUS FINANCIAL
YEAR YEAR
AMOUNT % AMOUNT %
1 NET SALES 5,262,086 100% 5,063,558 100%
21 DOMESTIC 2,926,539 56% 2,772,558 55%
22 FOREIGN 2,335,547 44% 2,291,000 45%
23 TRANSLATED INTO DOLLARS (***) 216,798 4% 221,745 4%
6 TOTAL FINANCING COST 466,056 100% 290,722 100%
24 INTEREST PAID 244,815 53% 259,382 89%
25 EXCHANGE LOSSES 286,737 62% 163,967 56%
26 INTEREST EARNED 10,608 2% 54,990 19%
27 EXCHANGE PROFITS 0 0% 0 0%
28 GAIN DUE TO MONETARY POSITION -71,372 -15% -103,582 -36%
29 LOSS IN UDI's ADJUSTMENT 16,484 4% 25,945 9%
PROFIT IN UDI's ADJUSTMENT 0 0% 0 0%
8 OTHER FINANCIAL OPERATIONS 3,652 100% -92,916 100%
29 OTHER NET EXPENSES (INCOME) NET 3,652 100% -92,916 100%
30 (PROFIT) LOSS ON SALE OF OWN SHARES 0 0% 0 0%
31 (PROFIT) LOSS ON SALE OF SHORT-TERM INVESTMENTS 0 0% 0 0%
10 RESERVE FOR TAXES AND WORKERS' PROFIT SHARING 17,035 100% 27,532 100%
32 INCOME TAX 34,924 205% 126,184 458%
33 DEFERRED INCOME TAX -36,422 -214% -128,042 -465%
34 WORKERS' PROFIT SHARING 18,533 109% 29,390 107%
35 DEFERRED WORKERS' PROFIT SHARING 0 0% 0 0%
CONSOLIDATED CASH FLOW STATEMENT
FROM JANUARY 1st TO SEPTEMBER 30th OF 2003 AND 2002
(Thousands of Pesos)
REF C THIRD QUARTER OF THIRD QUARTER OF
PRESENT FINANCIAL PREVIOUS FINANCIAL
YEAR YEAR
AMOUNT AMOUNT
1 CONSOLIDATED NET INCOME -490,983 -287,167
2 +(-) ITEMS ADDED TO INCOME WHICH DO NOT REQUIRE USING CASH 1,127,404 928,276
3 CASH FLOW FROM NET INCOME OF THE YEAR 636,421 641,109
4 CASH FLOW FROM CHANGE IN WORKING CAPITAL -1,039,889 543,904
5 CASH GENERATED (USED) IN OPERATING ACTIVITIES -403,468 1,185,013
6 CASH FLOW FROM EXTERNAL FINANCING -646,307 354,663
7 CASH FLOW FROM INTERNAL FINANCING -434,889
8 CASH FLOW GENERATED (USED) BY FINANCING -646,307 -80,226
9 CASH FLOW GENERATED (USED) IN INVESTMENT ACTIVITIES -134,158 -811,072
10 NET INCREASE (DECREASE) IN CASH AND SHORT-TERM INVESTMENTS -1,183,933 293,715
11 CASH AND SHORT-TERM INVESTMENTS AT THE BEGINNING OF PERIOD 2,461,478 1,482,559
12 CASH AND SHORT-TERM INVESTMENTS AT THE END OF PERIOD 1,277,545 1,776,274
CONSOLIDATED CASH FLOW STATEMENT
BREAKDOWN OF MAIN ACCOUNTS
(Thousands of Pesos)
REF C THIRD QUARTER OF THIRD QUARTER OF
PRESENT FINANCIAL PREVIOUS FINANCIAL
YEAR YEAR
AMOUNT AMOUNT
2 + (-) ITEMS ADDED TO INCOME WHICH DO NOT REQUIRE 1,127,404 928,276
13 DEPRECIATION AND AMORTIZATION FOR THE YEAR 1,127,404 928,276
14 + (-) NET INCREASE (DECREASE) IN PENSIONS FUND AND SENIORITY PREMIUMS 0 0
15 + (-) NET LOSS (PROFIT) IN MONEY EXCHANGE 0 0
16 + (-) NET LOSS (PROFIT) IN ASSETS AND LIABILITIES ACTUALIZATION 0 0
17 + (-) OTHER ITEMS 0 0
4 CASH FLOW FROM CHANGE IN WORKING CAPITAL -1,039,889 543,904
18 + (-) DECREASE (INCREASE) IN ACCOUNT RECEIVABLE -1,140,638 -699,825
19 + (-) DECREASE (INCREASE) IN INVENTORIES 357,408 375,511
20 + (-) DECREASE (INCREASE) IN OTHER ACCOUNT RECEIVABLE -295,076 274,208
21 + (-) INCREASE (DECREASE) IN SUPPLIER ACCOUNT -263,865 142,657
22 + (-) INCREASE (DECREASE) IN OTHER LIABILITIES 302,282 451,353
6 CASH FLOW FROM EXTERNAL FINANCING -646,307 354,663
23 + SHORT-TERM BANK AND STOCK MARKET FINANCING -267,383 -1,094,856
24 + LONG-TERM BANK AND STOCK MARKET FINANCING -378,924 1,449,519
25 + DIVIDEND RECEIVED 0 0
26 + OTHER FINANCING 0 0
27 (-) BANK FINANCING AMORTIZATION 0 0
28 (-) STOCK MARKET AMORTIZATION 0 0
29 (-) OTHER FINANCING AMORTIZATION 0 0
7 CASH FLOW FROM INTERNAL FINANCING 0 -434,889
30 + (-) INCREASE (DECREASE) IN CAPITAL STOCKS 0 0
31 (-) DIVIDENDS PAID 0 -434,889
32 + PREMIUM ON SALE OF SHARES 0 0
33 + CONTRIBUTION FOR FUTURE CAPITAL INCREASES 0 0
9 CASH FLOW GENERATED (UTILIZED) IN INVESTMENT ACTIVITIES -134,158 -811,072
34 + (-) DECREASE (INCREASE) IN STOCK INVESTMENTS OF A PERMANENT NATURE 0 14,769
35 (-) ACQUISITION OF PROPERTY, PLANT AND EQUIPMENT 180,843 -493,070
36 (-) INCREASE IN CONSTRUCTIONS IN PROGRESS -315,001 -332,771
37 + SALE OF OTHER PERMANENT INVESTMENTS 0 0
38 + SALE OF TANGIBLE FIXED ASSETS 0 0
39 + (-) OTHER ITEMS 0 0
RATIOS
CONSOLIDATED
REF P THIRD QUARTER OF THIRD QUARTER OF
PRESENT FINANCIAL PREVIOUS FINANCIAL
YEAR YEAR
YIELD
1 NET INCOME TO NET SALES -3.02 % -1.85 %
2 NET INCOME TO STOCK HOLDERS' EQUITY (**) -18.22 % -5.74 %
3 NET INCOME TO TOTAL ASSETS (**) -4.52 % -1.03 %
4 CASH DIVIDENDS TO PREVIOUS YEAR NET INCOME 0 % -1.63 %
5 INCOME DUE TO MONETARY POSITION TO NET INCOME -38.51 % -102.28 %
ACTIVITY
6 NET SALES TO NET ASSETS (**) 0.7 TIMES 0.75 TIMES
7 NET SALES TO FIXED ASSETS (**) 1.66 TIMES 1.69 TIMES
8 INVENTORIES ROTATION (**) 5.24 TIMES 4.84 TIMES
9 ACCOUNTS RECEIVABLE IN DAYS OF SALES 66 DAYS 47 DAYS
10 PAID INTEREST TO TOTAL LIABILITIES WITH COST (**) 0 % 0.07 %
LEVERAGE
11 TOTAL LIABILITIES TO TOTAL ASSETS 60.96 % 57.83 %
12 TOTAL LIABILITIES TO STOCK HOLDERS' EQUITY 1.56 TIMES 1.37 TIMES
13 FOREIGN CURRENCY LIABILITIES TO TOTAL LIABILITIES 52.34 % 51.06 %
14 LONG-TERM LIABILITIES TO FIXED ASSETS 66.79 % 67.34 %
15 OPERATING INCOME TO INTEREST PAID 1.08 TIMES 1.85 TIMES
16 NET SALES TO TOTAL LIABILITIES (**) 1.15 TIMES 1.30 TIMES
LIQUIDITY
17 CURRENT ASSETS TO CURRENT LIABILITIES 1.37 TIMES 1.35 TIMES
18 CURRENT ASSETS LESS INVENTORY TO CURRENT LIABILITIES 0.98 TIMES 0.90 TIMES
19 CURRENTS ASSETS TO TOTAL LIABILITIES 0.59 TIMES 0.55 TIMES
20 AVAILABLE ASSETS TO CURRENT LIABILITIES 16.57 % 25.3 %
CASH FLOW
21 CASH FLOW FROM NET INCOME TO NET SALES 3.92 % 4.13 %
22 CASH FLOW FROM CHANGES IN WORKING CAPITAL TO NET SALES -6.40 % 3.5 %
23 CASH GENERATED (USED) IN OPERATING TO INTEREST PAID -0.53 TIMES 1.78 TIMES
24 EXTERNAL FINANCING TO CASH GENERATED (USED) IN FINANCING 100 % -442.08 %
25 INTERNAL FINANCING TO CASH GENERATED (USED) IN FINANCING 0.00 % 542.08 %
26 ACQUISITION OF PROPERTY, PLANT AND EQUIPMENT TO CASH GENERATED
(USED) IN INVESTMENT ACTIVITIES -134.80 % 60.79 %
(**) THESE RATIOS ARE BASED ON THE DATA FOR THE LAST TWELVE MONTHS
DATA PER SHARE
REF D THIRD QUARTER OF THIRD QUARTER OF
PRESENT FINANCIAL PREVIOUS FINANCIAL
YEAR YEAR
AMOUNT AMOUNT
1 BASIC PROFIT PER ORDINARY SHARE (**) -0.98 -35
2 BASIC PROFIT PER PREFERENT SHARE (**) 0 0
3 DILUTED PROFIT PER ORDINARY SHARE (**) 0 0
4 CONTINUOUS OPERATING PROFIT PER COMMON SHARE(**) 0 0
5 EFFECT OF DISCONTINUOUS OPERATING ON CONTINUOUS OPERATING
PROFIT PER SHARE (**) $0.00 $0.00
6 EFFECT OF EXTRAORDINARY PROFIT AND LOSS ON CONTINUOUS OPERATING
PROFIT PER SHARE (**) 0 0
7 EFFECT BY CHANGES IN ACCOUNTING POLICIES ON CONTINUOUS
OPERATING PROFIT PER SHARE (**) 0 0
8 CARRYING VALUE PER SHARE 5.61 6.37
9 CASH DIVIDEND ACCUMULATED PER SHARE 0 0
10 DIVIDEND IN SHARES PER SHARE 0 SHARES 0 SHARES
11 MARKET PRICE TO CARRYING VALUE 0.67 TIMES 0.75 TIMES
12 MARKET PRICE TO BASIC PROFIT PER ORDINARY SHARE (**) 0 TIMES 0 TIMES
13 MARKET PRICE TO BASIC PROFIT PER PREFERENT SHARE (**) 0 0
(**) TO CALCULATE THE DATA PER SHARE USE THE NET INCOME FOR THE LAST TWELVE
MONTHS
ANNEX 1
See the Press Release included as Item 1 to this Form 6-K.
ANNEX 2
SIGNIFICANT ACCOUNTING POLICIES
THE ACCOUNTING POLICIES FOLLOWED BY THE COMPANY ARE IN CONFORMITY WITH MEXICAN
GAAP, WHICH REQUIRE MANAGEMENT TO MAKE CERTAIN ESTIMATES AND USE CERTAIN
ASSUMPTIONS TO DETERMINE THE VALUATION OF SOME OF THE BALANCES INCLUDED IN THE
FINANCIAL STATEMENTS AND TO MAKE THE DISCLOSURES REQUIRED FOR INCLUSION THEREIN.
ALTHOUGH ACTUAL RESULTS MAY DIFFER FROM THOSE ESTIMATES, MANAGEMENT BELIEVES
THAT THE ESTIMATES AND ASSUMPTIONS USED WERE APPROPRIATE IN THE CIRCUMSTANCES.
THE SIGNIFICANT ACCOUNTING POLICIES FOLLOWED BY THE COMPANY ARE AS FOLLOWS:
CHANGES IN ACCOUNTING POLICIES - IN 2001 THE NEW BULLETIN C-2 "FINANCIAL
INSTRUMENTS", WENT INTO EFFECT. THIS BULLETIN ESTABLISHES THE METHODOLOGY FOR
VALUING AND RECORDING FINANCIAL INSTRUMENTS, AND REQUIRES RECOGNITION OF ALL
EFFECTS OF THE FINANCIAL INSTRUMENTS CONTRACTED ON THE BALANCE SHEET AS EITHER
ASSETS OR LIABILITIES, UNDER NET COMPREHENSIVE FINANCIAL RESULT. THE FINANCIAL
INSTRUMENTS THAT HAVE BEEN DESIGNATED AND EFFECTIVELY FUNCTION AS HEDGING OF
ASSETS AND LIABILITIES OR FUTURE TRANSACTIONS WILL AFFECT THE ASSETS,
LIABILITIES OR THE RESPECTIVE TRANSACTIONS WHEN THEY ARE REALIZED, SETTLED OR
TAKE PLACE, RESPECTIVELY.
AS OF 2001, INTERNATIONAL ACCOUNTING STANDARD 40, "INVESTMENT PROPERTIES,"
ENTERED INTO EFFECT ON A SUPPLEMENTAL BASIS, ESTABLISHING VALUATION CRITERIA FOR
PROPERTIES WHOSE PURPOSE IS TO GENERATE PROFITS OR INCREASE VALUE OR BOTH.
PURSUANT TO CIRCULAR 55 ISSUED BY THE MEXICAN INSTITUTE OF PUBLIC ACCOUNTANTS,
THE VALUATION MODEL APPLICABLE TO MEXICO IS THE COST MODEL, WHICH ESTABLISHES
THAT SUCH PROPERTIES MUST BE VALUED AT ACQUISITION AND/OR CONSTRUCTION COST AND
ARE RESTATED BY APPLYING THE NPCI, LESS THE RESPECTIVE ACCUMULATED DEPRECIATION.
BEGINNING JANUARY 2000, THE COMPANY ADOPTED THE PROVISIONS OF NEW BULLETIN D-4,
"ACCOUNTING FOR INCOME AND ASSET TAXES AND EMPLOYEE PROFIT SHARING". THE EFFECT
OF THE ADOPTION WAS TO RECOGNIZE, AN INITIAL LONG-TERM LIABILITY FOR DEFERRED
INCOME TAXES AFFECTING STOCKHOLDERS' EQUITY UNDER "CUMULATIVE EFFECT OF INITIAL
RECOGNITION OF DEFERRED INCOME TAXES".
AS A RESULT OF THE IMPLEMENTATION OF THE ADOPTION OF BULLETIN D-4 MENTIONED
ABOVE, THE COMPANY CHANGED ITS METHOD FOR RECORDING THE EFFECT FROM TAX
CONSOLIDATION. UNTIL 1999, IT WAS RECORDED IN THE YEAR IN WHICH THE RESPECTIVE
ANNUAL CONSOLIDATED TAX RETURN WAS FILED. BEGINNING IN 2000, THIS BENEFIT IS
RECORDED IN RESULTS OF THE YEAR IN WHICH THE BENEFIT IS GENERATED.
BASIS OF CONSOLIDATION - THE ACCOMPANYING CONSOLIDATED FINANCIAL STATEMENTS
INCLUDE THOSE OF DESC AND THE SUBSIDIARIES IN WHICH THERE IS STOCKHOLDING AND
ADMINISTRATIVE CONTROL. ALL SIGNIFICANT INTERCOMPANY TRANSACTIONS AND BALANCES
HAVE BEEN ELIMINATED IN THE ACCOMPANYING CONSOLIDATED FINANCIAL STATEMENTS.
THE EQUITY IN NET INCOME (LOSS) AND CHANGES IN STOCKHOLDERS' EQUITY OF THOSE
SUBSIDIARIES THAT WERE ACQUIRED OR SOLD, HAS BEEN INCLUDED IN THE FINANCIAL
STATEMENTS AS OF OR UP TO THE DATE ON WHICH THE TRANSACTIONS TOOK PLACE AND WAS
RESTATED IN TERMS OF THE PURCHASING POWER AS OF THE END OF THE LATEST PERIOD.
INVESTMENTS IN SHARES OF ASSOCIATED COMPANIES AND UNCONSOLIDATED SUBSIDIARIES
ARE RECORDED USING THE EQUITY METHOD.
TRANSLATION OF FINANCIAL STATEMENTS OF SUBSIDIARIES - THE FINANCIAL STATEMENTS
OF FOREIGN SUBSIDIARIES, WHOSE OPERATIONS ARE NOT AN INTEGRAL PART OF THE
MEXICAN COMPANIES ("FOREIGN ENTITIES"), ARE RESTATED FOR THE INFLATION RATE OF
THE RESPECTIVE FOREIGN COUNTRY AND ARE TRANSLATED INTO MEXICAN PESOS AT THE
EXCHANGE RATE IN EFFECT AT THE END OF THE YEAR. THE FINANCIAL STATEMENTS OF
FOREIGN SUBSIDIARIES, WHOSE OPERATIONS ARE AN INTEGRAL PART OF THE MEXICAN
COMPANIES ("INTEGRATED FOREIGN OPERATIONS"), ARE TRANSLATED USING YEAREND
EXCHANGE RATES FOR MONETARY ITEMS AND HISTORICAL EXCHANGE RATES FOR NONMONETARY
ITEMS, AND THE TRANSLATED FINANCIAL STATEMENTS ARE THEN RESTATED USING THE
NATIONAL CONSUMER PRICE INDEX (NCPI) OF MEXICO. THE EFFECTS OF TRANSLATING
FOREIGN ENTITIES ARE RECORDED DIRECTLY IN STOCKHOLDERS' EQUITY IN THE
"CUMULATIVE EFFEECT OF RESTATEMENT" ACCOUNT. THE EFFECTS OF TRANSLATING
INTEGRATED FOREIGN OPERATIONS ARE INCLUDED IN THE "INTEGRAL FINANCING RESULT" OF
THE YEAR IN THE "MONETARY POSITION GAIN" ACCOUNT. SUCH EFFECTS ARE NOT
SIGNIFICANT.
RECOGNITION OF THE EFFECTS OF INFLATION - THE COMPANIES RESTATE ALL OF THEIR
FINANCIAL STATEMENTS IN TERMS OF THE PURCHASING POWER OF THE MEXICAN PESO AS OF
THE END OF THE LATEST PERIOD, THEREBY COMPREHENSIVELY RECOGNIZING THE EFFECTS OF
INFLATION. THE PRIOR YEAR AMOUNTS PRESENTED HEREIN DIFFER FROM THOSER ORIGINALLY
REPORTED IN TERMS OF MEXICAN PESOS OF THE RESPECTIVE YEAR. CONSEQUENTLY, ALL
FINANCIAL STATEMENT AMOUNTS ARE COMPARABLE, BOTH FOR THE CURRENT AND THE PRIOR
YEAR, BECAUSE ALL ARE STATED IN TERMS OF MEXICAN PESOS OF THE SAME PURCHASING
POWER.
CASH EQUIVALENTS - INVESTMENTS IN MARKETABLE SECURITIES CONSIST MAINLY OF
ACCEPTANCES, BANK PROMISSORY NOTES, AND PAPER ISSUED BY THE MEXICAN AND UNITED
STATES OF AMERICA GOVERNMENTS, AT MARKET (COST PLUS ACCRUED INTEREST).
INVENTORIES AND COST OF SALES - INVENTORIES ARE ORIGINALLY RECORDED AT THEIR
ACQUISITION OR MANUFACTURING COST AND RESTATED TO THEIR SPECIFIC NET REPLACEMENT
COST WITHOUT EXCEEDING NET REALIZABLE VALUE. SUBSTANTIALY ALL SUBSIDIARIES
COMPUTE COST OF SALES USING THE REPLACEMENT COST AT THE TIME OF SALE.
LAND HELD FOR DEVELOPMENT AND REAL ESTATE PROJECTS - UNDEVELOPED LAND REPRESENTS
LAND RESERVES THAT, TOGETHER WITH DEVELOPED LAND AND ONGOING AND COMPLETED
PROJECTS, ARE CONSIDERED NON-CURRENT INVENTORIES, SINCE THEY ARE HELD FOR SALE.
THEY INCLUDE ACQUISITION, DEVELOPMENT AND CONSTRUCTION COSTS AND ARE RESTATED IN
U.S. DOLLARS BASED ON THE SLIPPAGE OF THE MARKET EXCHANGE RATE FOR THE PURPOSE
OF SHOWING VALUES IN ACCORDANCE WITH THE CURRENT SITUATION OF THE REAL ESTATE
MARKET.
THE COMPANY CAPITALIZES THE NET COMPREHENSIVE FINANCING COST ON DEBT USED TO
FINANCE REAL ESTATE PROJECTS IN PROGRESS, IN ADDITION TO THEIR CONSTRUCTION AND
DEVELOPMENT COSTS.
INVESTMENT IN SHARES - INVESTMENT IN SHARES HAS BEEN RECORDED USING THE EQUITY
METHOD, BASED ON THE FINANCIAL STATEMENTS PREPARED ON THE SAME BASIS AS THOSE OF
THE COMPANY, AND IS PRESENTED UNDER OTHER ASSETS IN THE BALANCE SHEET.
PROPERTY, PLANT AND EQUIPMENT - THIS ITEM IS RECORDED AT ACQUISITION COST AND
IS RESTATED BY USING NCPI FACTORS. FOR FOREIGN FIXED ASSETS, THEIR ACQUISITION
COST IS RESTATED FOR INFLATION OF THE COUNTRY OF ORIGIN AND THE FLUCTUATION OF
THE MEXICAN PESO AGAINST SUCH CURRENCY IS CONSIDERED.
DEPRECIATION IS CALCULATED BY THE STRAIGHT-LINE METHOD BASED ON THE REMAINING
USEFUL LIVES OF THE ASSETS.
THE COMPANIES CAPITALIZE THE NET COMPREHENSIVE FINANCING COST ON DEBT USED TO
FINANCE CONSTRUCTION IN PROGRESS AND THE INSTALLATION OF EQUIPMENT, UNTIL THEY
ARE PLACED IN SERVICE.
IMPAIRMENT OF FIXED ASSETS - THE AMOUNTS SHOWN IN THE ACCOMPANYING CONSOLIDATED
STATEMENTS OF INCOME BASICALLY REFER TO THE REDUCTION IN VALUE OF PROPERTY AND
EQUIPMENT OF SOME PRODUCTION FACILITIES, IN ORDER TO REFLECT THEIR REALIZABLE
VALUE IN ACCORDANCE WITH THE CURRENT SITUATION OF SUCH BUSINESSES.
GOODWILL - THE GOODWILL RESULTING FROM ACQUISITIONS MADE IN EXCESS OF BOOK VALUE
IS AMORTIZED OVER PERIODS RANGING FROM FIVE TO 20 YEARS, THE TERMS OVER WHICH
THE BENEFITS FROM THE INVESTMENT WILL BE REALIZED.
FINANCIAL INSTRUMENTS - FINANCIAL ASSETS AND LIABILITIES RESULTING FROM ANY TYPE
OF FINANCIAL INSTRUMENT, EXCEPT FOR INVESTMENTS IN FINANCIAL INSTRUMENTS HELD TO
MATURITY, ARE PRESENTED IN THE BALANCE SHEET AT FAIR VALUE. THE EFFECTS OF THE
VALUATION OF A FINANCIAL ASSET OR LIABILITY ARE RECOGNIZED IN RESULTS OF
OPERATIONS OF THE RESPECTIVE PERIOD. INVESTMENTS IN FINANCIAL INSTRUMENTS HELD
TO MATURITY ARE VALUED AT ACQUISITION COST. THE COSTS AND YIELDS OF FINANCIAL
INSTRUMENTS ARE RECOGNIZED IN RESULTS OF THE PERIOD IN WHICH THEY OCCUR.
DERIVATE FINANCIAL INSTRUMENTS - THE INTERNAL CONTROL SYSTEM ESTABLISHED BY THE
COMPANY INCLUDES POLICIES AND PROCEDURES TO MANAGE ITS EXPOSURE TO FLUCTUATIONS
IN FOREIGN CURRENCY EXCHANGE RATES USING DERIVATIVE FINANCIAL INSTRUMENTS. THESE
INSTRUMENTS ARE TRADED ONLY WITH AUTHORIZED INSTITUTIONS AND READING LIMITS HAVE
BEEN ESTABLISHED FOR EACH INSTITUTION. THE COMPANY DOES NOT CARRY OUT
TRANSACTIONS WITH DERIVATIVE FINANCIAL INSTRUMENTS FOR THE PURPOSE OF
SPECULATION.
THE DERIVATIVE FINANCIAL INSTRUMENTS CURRENTLY USED BY THE COMPANY ARE PRIMARILY
HEDGE CONTRACTS TO REDUCE ITS EXPOSURE TO EXCHANGE RATE FLUCTUATIONS. PREMIUMS
PAID ARE AMORTIZED OVER THE TERM OF THE DERIVATIVE FINANCIAL INSTRUMENT USING
THE UNPAID BALANCE OF THE LIABILITY BEING HEDGED.
DERIVATIVE FINANCIAL INSTRUMENTS IDENTIFIED AS HEDGES ARE VALUED BY APPLYING THE
SAME VALUATION CRITERIA USED FOR THE ASSETS OR LIABILITIES HEDGED, AND THE
EFFECTS OF THEIR VALUATION ARE RECOGNIZED IN RESULTS OF OPERATIONS, NET OF
COSTS, EXPENSES, OR REVENUE FROM THE ASSETS OR LIABILITIES WHOSE RISKS ARE BEING
HEDGED. THE FINANCIAL ASSETS OR LIABILITIES GENERATED BY THESE INSTRUMENTS ARE
PRESENTED IN THE BALANCE SHEET AS A REDUCTION OF THE LIABILITIES OR ASSETS WHOSE
RISKS ARE BIENG HEDGED.
INCOME TAX, ASSET TAX AND EMPLOYEE PROFIT SHARING - INCOME TAX (ISR) AND
EMPLOYEE STATUTORY PROFIT-SHARING (PTU) ARE RECORDED IN RESULTS OF THE YEAR IN
WHICH THEY ARE INCURRED. DEFERRED INCOME TAX ASSETS AND LIABILITIES ARE
RECOGNIZED FOR TEMPORARY DIFFERENCES RESULTING FROM COMPARING THE BOOK AND TAX
VALUES OF ASSETS AND LIABILITIES, PLUS ANY FUTURE BENEFITS FROM TAX LOSS
CARRYFORWARDS DEFERRED INCOME TAX ASSETS ARE REDUCES BY ANY BENEFITS THAT, IN
THE OPINION OF MANAGEMENT, WILL PROBABLY NOT BE REALIZED. DEFERRED PTU IS
DERIVED FROM TEMPORARY DIFFERENCES BETWEEN THE BOOK RESULT AND INCOME FOR PTU
PURPOSES AND IS RECOGNIZED ONLY WHEN IT CAN BE REASONABLY ASSUMED THAT THEY WILL
GENERATE A LIABILITY OR BENEFIT, AND THERE IS NO INDICATION THAT THIS SITUATION
WILL CHANGE IN SUCH A WAY THAT THE LIABILITIES WILL NOT BE PAID OR BENEFITS WILL
NOT BE REALIZED.
THE ASSET TAX PAID THAT IS EXPECTED TO BE RECOVERABLE IS RECORDED AS AN ADVANCE
PAYMENT OF INCOME TAX AND IS PRESENTED ON THE BALANCE SHEET WITH DEFERRED ISR.
EMPLOYEE RETIREMENT OBLIGATIONS - THE LIABILITY FROM SENIORITY PREMIUMS,
PENSIONS AND RETIREMENT PAYMENTS, WHICH IS SIMILAR TO A PENSION, IS RECORDED AS
ACCRUED, AND IS CALCULATED BY INDEPENDENT ACTUARIES BASED ON THE PROJECTED
CREDIT UNIT METHOD, AT REAL INTEREST RATES. THEREFORE, THE LIABILITY IS BEING
RECOGNIZED WHICH, AT PRESENT VALUE, IS EXPECTED TO COVER THE OBLIGATION FOR
THESE BENEFITS AT THE ESTIMATED RETIREMENT DATE OF ALL THE COMPANIES' EMPLOYEES.
SEVERANCE PAYMENTS ARE CHARGED TO RESULTS WHEN THEY ARE DETERMINED TO BE
PAYABLE.
RESTATED STOCKHOLDERS' EQUITY - THIS ITEM CONSISTS OF MONETARY POSITION RESULT
ACCUMULATED THROUGH THE FIRST RESTATEMENT OF THE FINANCIAL STATEMENTS AND THE
GAIN (LOSS) FROM HOLDING MONETARY ASSETS, BECAUSE PRICE LEVELS INCREASED ABOVE
(BELOW) INFLATION.
REVENUE RECOGNITION - REVENUES OF THE SUBSIDIARIES OF THE AUTOPARTS, CHEMICAL
AND FOOD SECTORS ARE RECOGNIZED WHEN THE INVENTORIES ARE DELIVERED OR SHIPPED TO
CUSTOMERS AND CUSTOMERS ASSUME RESPONSIBILITY FOR THEM.
THE REAL ESTATE SECTOR RECOGNIZES THE REVENUES AND COSTS FROM SALES OF URBANIZED
PLOTS OF LAND IN RESULTS WHEN THE SALES ARE FORMALIZED AND THE DEPOSITS SECURING
THE TRANSACTION ARE RECEIVED. THE INDIVIDUAL ASSIGNMENT OF THE COST OF THE LAND
AND REAL ESTATE PROJECT TAKES INTO CONSIDERATION THE RELATIVE SELLING PRICE OF
THE TOTAL PROJECT SO AS TO MAINTAIN THE SAME PROFIT MARGIN THROUGHOUT THE
PROJECT.
REVENUES AND COSTS FROM REAL ESTATE PROJECTS ARE RECORDED ORIGINALLY AS A
DEFERRED CREDIT FOR CONSTRUCTION COMMITMENTS AND AS REAL ESTATE PROJECTS IN
PROCESS, AND ARE RECOGNIZED IN RESULTS BASED ON THE "PERCENTAGE OF COMPLETION"
METHOD. THEREFORE, REVENUE IS MATCHED WITH COSTS INCURRED TO REACH THE STAGE OF
COMPLETION TO TERMINATE THE PROJECT. IF THE LAST ESTIMATED COSTS DETERMINED
EXCEED THE TOTAL REVENUES CONTRACTED, THE RESPECTIVE PROVISION IS CHARGED TO
RESULTS OF THE YEAR.
INTEGRAL FINANCIAL RESULT - THIS REPRESENTS THE NET EFFECT OF INTEREST EARNED
AND INCURRED, EXCHANGE GAINS AND LOSSES AND MONETARY POSITION GAIN OR LOSS ON,
WHICH IS THE RESULT OF MAINTAINING MONETARY ASSETS AND LIABILITIES WHOSE REAL
PURCHASING POWER IS MODIFIED BY THE EFFECTS OF INFLATION.
FOREIGN CURRENCY TRANSACTIONS ARE RECORDED AT THE EFFECTIVE EXCHANGE RATE AT THE
DATE THE TRANSACTIONS ARE CARRIED OUT AND FOREIGN CURRENCY ASSETS AND
LIABILITIES ARE ADJUSTED TO THE EXCHANGE RATE EFFECTIVE AT YEAREND.
INCOME PER SHARE - BASIC INCOME (LOSS) PER ORDINARY SHARE IS CALCULATED BY
DIVIDING CONSOLIDATED NET INCOME (LOSS) OF MAJORITY STOCKHOLDERS BY THE WEIGHTED
AVERAGE NUMBER OF SHARES OUTSTANDING DURING THE YEAR.
COMPREHENSIVE INCOME (LOSS) - COMPREHENSIVE INCOME (LOSS) IS COMPRISED OF THE
NET CONSOLIDATED INCOME FOR THE PERIOD PLUS (LESS) ANY GAINS OR LOSSES THAT
UNDER SPECIFIC ACCOUNTING REGULATIONS ARE RECORDED DIRECTLY IN STOCKHOLDERS'
EQUITY, SUCH AS THE GAIN OR LOSS FROM HOLDING NONMONETARY ASSETS.
STOCK EXCHANGE CODE:DESC QUARTER:3 YEAR: 2003
ANNEX 3
SHARE OWNERSHIP
COMPANY NAME MAIN ACTIVITIES NUMBER OF SHARES OWNERSHIP TOTAL AMOUNT
(THOUSANDS OF PESOS)
SUBSIDIARIES ACQUISITION COST PRESENT VALUE
BOSQUES DE LAS LOMAS, S.A. DE C.V. Real Estate Sector 43,189,000 100.00 65,097 65,097
OPERADORA NAYARIT, S.A. DE C.V. Real Estate Sector 1 78.00 3,229 3,229
PROMOCIONES BOSQUES, S.A. DE C.V. Real Estate Sector 82,212,000 100.00 435,781 435,781
CORPORATIVO DINE, S.A. DE C.V Real Estate Sector 238,390,000 100.00 2,482 2,482
HOLDING DICOMEX, S.A. DE C.V Real Estate Sector 70,870,001 50.00 76,448 76,448
TURISTICA AKKO, S.A. DE C.V. Real Estate Sector 10,000 100.00 -1,594 -1,594
BOSQUES DE SANTA FE, S.A. DE C.V. Real Estate Sector 50 98.00 -49,661 -49,661
CANA DE SANTA FE, S.A DE C.V. Real Estate Sector 202,940,000 73.00 930,835 930,835
INMOBILIARIA DINE, S.A. DE C.V. Real Estate Sector 10,010,200 100.00 89,883 89,883
CANTILES DE MITA Real Estate Sector 117,234,349 99.99 2,041,048 2,041,048
CLUB DE GOLF PUNTA MITA, S.A. DE C.V. Real Estate Sector 10,883,488 87.69 133,368 133,368
RESORT CLUB PUNTA MITA, S.A. DE C..V Real Estate Sector 50,000 100.00 8,542 8,542
DESC AUTOMOTRIZ, S.A. DE C.V. Autoparts Sector 700,968,215 100.00 3,513,245 3,513,245
CORFUERTE, S.A. DE C.V. Food Sector 706,035,669 77.59 392,143 392,143
AGROKEN, S.A. DE C.V. Food Sector 783,134,281 100.00 520,234 520,234
AUTHENTIC SPECIALITY FOODS Food Sector 291,101 81.34 1,109,548 1,109,548
AGROBIOS CORPORATIVO Food Sector 550,000 100.00 36,978 36,978
CID CENTRO DE INVESTIGACION Y DESARROLLO Chemical Sector 190,386,900 100.00 23,220 23,220
DIRECCION IRSA, S.A. DE C.V. Chemical Sector 4,201,800 100.00 -56,475 -56,475
FENOQUIMIA, S.A. DE C.V. Chemical Sector 5,000,000 100.00 -217,070 -217,070
FORESTACIONES OPERATIVAS DE MEXICO, S.A. Chemical Sector 31,662 100.00 15,216 15,216
GIRSA CORPORATIVO, S.A. DE C.V. Chemical Sector 41,510,000 100.00 20,352 20,352
GIRSA INMOBILIARIA, S.A. DE C.V. Chemical Sector 615,124,722 100.00 735,930 735,930
H2ORIZONTES, S.A. DE C.V. Chemical Sector 50,000 100.00 -7,106 -7,106
INMOBILIARIA THIERS, S.A. DE C.V. Chemical Sector 905,000 100.00 9,692 9,692
QUIMIR, S.A. DE C.V. Chemical Sector 1,930,990 100.00 87,475 87,475
RESIRENE, S.A. DE C.V. Chemical Sector 236,058,979 100.00 171,958 171,958
TECNO INDUSTRIA RF, S.A. DE C.V. Chemical Sector 10,675,000 100.00 65,214 65,214
REXCEL, S.A. DE C.V. Chemical Sector 1,001,000 100.00 92,873 92,873
DYNASOL ELASTOMEROS, S.A. (ESPANA) Chemical Sector 1 50.00 448,418 448,418
DYNASOL GESTION, S.A. Chemical Sector 1 50.00 1,974 1,974
DYNASOL, L.L.C. Chemical Sector 1 50.00 11,427 11,427
INDUSTRIAS NEGROMEX, S.A. DE C.V. Chemical Sector 410,044,842 99.99 612,132 612,132
PLASTIGLAS DE MEXICO, S.A. DE C.V. Chemical Sector 200,778,213 95.00 96,587 96,587
PARATEC, S.A. de C.V. Chemical Sector 264,849 100.00 165,132 165,132
PARATEC ELASTOMERS, L.L.C. Chemical Sector 1 100.00 28,371 28,371
BIOQUIMEX Chemical Sector 419,842,497 100.00 -28,787 -28,787
AEROPYCSA, S.A. DE C.V. Service Company 458,329,280 100 116,789 116,789
CORPORATIVO ARCOS, S.A. DE C.V. Service Company 260,525,000 100 56,919 56,919
DESC CORPORATIVO, S.A. DE C.V. Service Company 266,254,348 100 -25,240 (25,240)
BIG SOFT, S.A. DE C.V. Service Company 8,612,509 100 6,965 6,965
PACIFIC INTERNATIONAL AIRWAYS, S.A. DE C.V. Service Company 244,500 100 2,380 2,380
SERVICIOS CORPORATIVOS ARCOS, S.A.DE C.V. Service Company 450 100 494 494
OTHER SUBSIDIARIES (4) (NO. OF SUBS.:) 1 0 -33,333 -33,333
Associates
1. Others 11,709,113 11,709,113
SERVICES 1 0 43,101 43,101
Other Permanent Investments 3,660,090
Total 15,412,304
LOANBREAKDOWN
(THOUSANDS OF PESOS)
-----------------------------------------------------------------------------------------------------------------------------------
CREDIT TYPE / INSTITUTION AMORTIZATION DATE RATE OF INTEREST DENOMINATED IN PESOS
------------------------------------------
---------------------------------------------- ------------------------------------------
BANKS UNTIL 1 YEAR MORE THAN 1 YEAR
-----------------------------------------------------------------------------------------------------------------------------------
LT
-----------------------------------------------------------------------------------------------------------------------------------
WITH WARRANTY
-----------------------------------------------------------------------------------------------------------------------------------
DEUTSCHE BANK 15-Oct-07 8.75000
IFC 15-Feb-04 3.31 0
IFC 15-Feb-06 3.31 0
IFC 15-Sep-09 4.93 0
IFC 15-Sep-09 10.35 0
DEG 28-Dec-06 4.13 0
BANAMEX-CITIBANK 27-Jan-04 2.73 0
BANAMEX-CITIBANK 28-Oct-03 2.62 0
BANAMEX-CITIBANK 27-Jan-04 2.73 0
CITIBANK 24-Oct-03 2.40 0
CITIBANK 3-Nov-03 2.40 0
CITIBANK 1-Dec-03 2.40 0
CITIBANK 9-Oct-03 2.40 0
CITIBANK 27-Oct-03 2.40 0
CITIBANK NA (SIND) 12-Jun-05 2.49 0
DEUTSCHE BANK (SIND) 12-Jun-05 2.49 0
JP MORGAN CHASE BANK (SIND) 12-Jun-05 2.49 0
COMERICA BANK (SIND) 12-Jun-05 2.49 0
EXPORT DEVELOPMENT CANADA (SIND) 12-Jun-05 2.49 0
BBVA BANCOMER (SIND) 12-Jun-05 2.49 0
CREDIT LYONNAIS (SIND) 12-Jun-05 2.49 0
CREDIT SUISSE FIRST BOSTON (SIND) 12-Jun-05 2.49 0
HSBC BANK (SINDICADO) 12-Jun-05 2.49 0
BAYERISCHE HYPO-UND VEREINSBANK (SIND) 12-Jun-05 2.49 0
CITIBANK NA (SIND) 12-Jun-07 2.74 0
DEUTSCHE BANK (SIND) 12-Jun-07 2.74 0
JP MORGAN CHASE BANK (SIND) 12-Jun-07 2.74 0
BANCOMEXT 12-Jun-07 2.74 0
COMERICA BANK (SIND) 12-Jun-07 2.74 0
EXPORT DEVELOPMENT CANADA (SIND) 12-Jun-07 2.74 0
TORONTO DOMINION (SIND) 12-Jun-07 2.74 0
BBVA BANCOMER (SIND) 12-Jun-07 2.74 0
BBVA BANCOMER (SIND) 26-Jun-07 5.82 53,250 301,750
BANCO SANTANDER MEXICANO (SIND) 26-Jun-07 5.82 53,250 301,750
BANCO INVEX (SIND) 26-Jun-07 5.82 30,000 170,000
COMERICA BANK MEXICO (SIND) 26-Jun-07 5.82 15,000 85,000
IXE BANCO (SIND) 26-Jun-07 5.82 6,000 34,000
BANCO MERCANTIL DEL NORTE (SIND) 26-Jun-07 5.82 37,500 212,500
BANCO INBURSA 15-Dec-03 7.42 0
BANCO INBURSA 13-Nov-03 7.42 0
BANCO INBURSA 13-Nov-03 7.42 0
BANCO INBURSA 5-Dec-03 7.42 0
BANCO INBURSA 11-Dec-03 7.42 0
IXE BANCO 24-Oct-03 6.66 0
BBVA BANCOMER 24-Oct-03 3.25 0
BANAMEX-CITIBANK 10-Nov-03 2.68 0
BANCO INBURSA 17-Oct-03 4.61 0
BANCO INBURSA 24-Oct-03 4.61 0
BANCO INBURSA 17-Oct-03 7.42 0
CITIBANK 21-Oct-03 2.40 0
CITIBANK 4-Nov-03 2.40 0
BANAMEX-CITIBANK 13-Nov-03 8.06 0
California Commerce B. 2-Oct-03 2.13 0
BANCO INBURSA 7-Oct-03 7.42 0
BANCO INBURSA 15-Aug-03 7.42 0
Varios Arrend. 31-Dec-10 8.40 0
BANCO SANTANDER MEXICANO 31-Jan-07 10.02 1,213 3,045
BANCO SANTANDER MEXICANO 31-Jan-07 10.02 2,043 5,102
BANCO SANTANDER MEXICANO 31-Jan-07 7.80 1,038 2,413
BANAMEX-CITIBANK 16-May-08 8.06 0 11,160
CITIBANK 24-Oct-03 2.40 0
CITIBANK 31-Oct-03 2.40 0
CITIBANK 4-Nov-03 2.40 0
CITIBANK 12-Nov-03 2.40 0
CITIBANK 17-Nov-03 2.40 0
CITIBANK 3-Oct-03 2.40 0
CITIBANK 6-Oct-03 2.40 0
CITIBANK 8-Oct-03 2.40 0
CITIBANK 13-Oct-03 2.40 0
CITIBANK 14-Oct-03 2.40 0
BANAMEX-CITIBANK 12-Jan-04 3.11 0
COMERICA BANK 20-Mar-04 2.18 0
COMERICA BANK 21-Dec-03 2.39 0
BANAMEX-CITIBANK 10-Oct-03 2.37 0
COMERICA BANK 29-Oct-03 2.61 0
COMERICA BANK 28-Feb-04 7.75 0
BANCO NAL. COMERCIO EXTERIOR 9-Feb-04 2.64 0
BBVA BANCOMER 10-Oct-03 3.20 0
BANCO NAL. COMERCIO EXTERIOR 4-Feb-04 2.66 0
BANAMEX-CITIBANK 14-Oct-03 2.60 0
BANAMEX-CITIBANK 19-Nov-03 2.63 0
BANCO NAL. COMERCIO EXTERIOR 1-Dec-03 2.48 0
BANCO NAL. COMERCIO EXTERIOR 4-Mar-04 2.67 0
BANCO NAL. COMERCIO EXTERIOR 4-Feb-04 2.66 0
BANCO NAL. COMERCIO EXTERIOR 21-Jan-04 2.58 0
BBVA BANCOMER 10-Oct-03 3.20 0
BANAMEX-CITIBANK 19-Nov-03 2.63 0
BANAMEX-CITIBANK 10-Oct-03 2.43 0
BANCO NAL. COMERCIO EXTERIOR 17-Nov-03 2.46 0
BANCO NAL. COMERCIO EXTERIOR 4-Mar-04 2.69 0
CITIBANK 15-Mar-04 2.40 0
CITIBANK 15-Mar-04 2.40 0
COMERICA BANK 10-Oct-03 2.50 0
COMERICA BANK 17-Oct-03 250.00% 0
COMERICA BANK 7-Nov-03 250.00% 0
COMERICA BANK 21-Nov-03 250.00% 0
COMERICA BANK 28-Nov-03 250.00% 0
0
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL BANKS 199,294 1,126,720
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
LISTED IN THE MEXICAN STOCK EXCHANGE AMORTIZATION DATE RATE OF INTEREST DENOMINATED IN PESOS
------------------------------------------
------------------------------------------
UNTIL 1 YEAR MORE THAN 1 YEAR
-----------------------------------------------------------------------------------------------------------------------------------
UNSECURED DEBT
UDIBONOS 10/21/2006 9.00 1,067,891
UDIBONOS 7/13/2007 8.20 1,175,235
-------------------------------------------------------------------------------------
0 2,243,126
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL STOCK EXCHANGE
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
SUPPLIERS 900,160
-----------------------------------------------------------------------------------------------------------------------------------
OTHERS 0
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL SUPPLIERS 900,160
-----------------------------------------------------------------------------------------------------------------------------------
OTHERS 1,455,759
-----------------------------------------------------------------------------------------------------------------------------------
OTHER CURRENT LIABILITIES AND OTHER CREDITS 2,555,213 3,369,846
-----------------------------------------------------------------------------------------------------------------------------------
** TABLE CONTINUED **
------------------------------------------------------------------------------------------------------------------------------------
AMORTIZATION OF LOANS IN FOREIGN CURRENCY WITH NATIONAL ENTITIES (THOUSANDS OF $)
------------------------------------------------------------------------------------------------------------------------------------
TIME INTERVAL
------------------------------------------------------------------------------------------------------------------------------------
CURRENT YEAR UNTIL 1 YEAR UNTIL 2 YEARS UNTIL 3 YEARS UNTIL 4 YEARS UNTIL 5 YEARS
------------------------------------------------------------------------------------------------------------------------------------
WITH WARRANTY ST LP
------------------------------------------------------------------------------------------------------------------------------------
IFC 0
IFC 0
IFC 0
IFC 0
DEG 0
BANAMEX-CITIBANK 0
BANAMEX-CITIBANK 0
BANAMEX-CITIBANK 0
CITIBANK 0
CITIBANK 0
CITIBANK 0
CITIBANK 0
CITIBANK 0
CITIBANK NA (SIND) 0
DEUTSCHE BANK (SIND) 0
JP MORGAN CHASE BANK (SIND) 0
COMERICA BANK (SIND) 0
EXPORT DEVELOPMENT CANADA (SIND) 0
BBVA BANCOMER (SIND) 0
CREDIT LYONNAIS (SIND) 0
CREDIT SUISSE FIRST BOSTON (SIND) 0
HSBC BANK (SINDICADO) 0
BAYERISCHE HYPO-UND VEREINSBANK (SIND) 0
CITIBANK NA (SIND) 0
DEUTSCHE BANK (SIND) 0
JP MORGAN CHASE BANK (SIND) 0
BANCOMEXT 0
COMERICA BANK (SIND) 0
EXPORT DEVELOPMENT CANADA (SIND) 0
TORONTO DOMINION (SIND) 0
BBVA BANCOMER (SIND) 0
BBVA BANCOMER (SIND) 0
BANCO SANTANDER MEXICANO (SIND) 0
BANCO INVEX (SIND) 0
COMERICA BANK MEXICO (SIND) 0
IXE BANCO (SIND) 0
BANCO MERCANTIL DEL NORTE (SIND) 0
BANCO INBURSA 240,398
BANCO INBURSA 224,008
BANCO INBURSA 98,345
BANCO INBURSA 49,172
BANCO INBURSA 76,490
IXE BANCO 64,470
BBVA BANCOMER 0
BANAMEX-CITIBANK 0
BANCO INBURSA 54,636
BANCO INBURSA 43,709
BANCO INBURSA 0 546,360
CITIBANK 0
CITIBANK 0
BANAMEX-CITIBANK 0
California Commerce B. 0
BANCO INBURSA 113,643
BANCO INBURSA 0 16,391
Varios Arrend. 0
BANCO SANTANDER MEXICANO 0
BANCO SANTANDER MEXICANO 0
BANCO SANTANDER MEXICANO 0
BANAMEX-CITIBANK 0
CITIBANK 0
CITIBANK 0
CITIBANK 0
CITIBANK 0
CITIBANK 0
CITIBANK 0
CITIBANK 0
CITIBANK 0
CITIBANK 0
CITIBANK 0
BANAMEX-CITIBANK 0
COMERICA BANK 0
COMERICA BANK 0
BANAMEX-CITIBANK 0
COMERICA BANK 0
COMERICA BANK 0
BANCO NAL. COMERCIO EXTERIOR 0 49,172
BBVA BANCOMER 0
BANCO NAL. COMERCIO EXTERIOR 0 32,782
BANAMEX-CITIBANK 0
BANAMEX-CITIBANK 0
BANCO NAL. COMERCIO EXTERIOR 16,801
BANCO NAL. COMERCIO EXTERIOR 0 7,376
BANCO NAL. COMERCIO EXTERIOR 0 78,676
BANCO NAL. COMERCIO EXTERIOR 0 21,854
BBVA BANCOMER 0
BANAMEX-CITIBANK 0
BANAMEX-CITIBANK 0
BANCO NAL. COMERCIO EXTERIOR 56,821
BANCO NAL. COMERCIO EXTERIOR 0 9,698
CITIBANK 0
CITIBANK 0
COMERICA BANK 0
COMERICA BANK 0
COMERICA BANK 0
COMERICA BANK 0
COMERICA BANK 0
0
------------------------------------------------------------------------------------------------------------------------------------
1,038,493 215,949 546,360 0 0
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
AMORTIZATION OF LOANS IN FOREIGN CURRENCY WITH NATIONAL ENTITIES (THOUSANDS OF $)
------------------------------------------------------------------------------------------------------------------------------------
TIME INTERVAL
------------------------------------------------------------------------------------------------------------------------------------
CURRENT YEAR UNTIL 1 YEAR UNTIL 2 YEARS UNTIL 3 YEARS UNTIL 4 YEARS UNTIL 5 YEARS
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
TOTAL STOCK
EXCHANGE 0 0 0 0 0
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
SUPPLIERS
------------------------------------------------------------------------------------------------------------------------------------
OTHERS
------------------------------------------------------------------------------------------------------------------------------------
TOTAL SUPPLIERS
------------------------------------------------------------------------------------------------------------------------------------
OTHERS
------------------------------------------------------------------------------------------------------------------------------------
OTHER CURRENT
LIABILITIES AND
OTHER CREDITS 1,038,493 215,949 546,360 0 0
------------------------------------------------------------------------------------------------------------------------------------
** TABLE CONTINUED **
------------------------------------------------------------------------------------------------------------------------------------
AMORTIZATION OF LOANS IN FOREIGN CURRENCY WITH FOREING ENTITIES (THOUSANDS OF $)
------------------------------------------------------------------------------------------------------------------------------------
TIME INTERVAL
-----------------------------------------------------------------------------------------------------------------------------------
CURRENT YEAR UNTIL 1 UNTIL 2 UNTIL 3 UNTIL 4 UNTIL 5
YEAR YEARS YEARS YEARS YEARS
-----------------------------------------------------------------------------------------------------------------------------------
ST LP
-----------------------------------------------------------------------------------------------------------------------------------
798,243
IFC 0 32,782
IFC 0 15,610 15,610 7,806
IFC 0 70,247 70,245 70,246 70,246 140,493
IFC 0 93,662 93,662 93,662 93,662 187,323
DEG 1,101 3,307 3,307 2,494 0
BANAMEX-CITIBANK 0 20,762 0 0 0
BANAMEX-CITIBANK 15,298 0 0 0 0
BANAMEX-CITIBANK 0 35,513 0 0 0
CITIBANK 58,474 0 0 0 0
CITIBANK 28,417 0 0 0 0
CITIBANK 35,251 0 0 0 0
CITIBANK 28,421 0 0 0 0
CITIBANK 10,771 0 0 0 0
CITIBANK NA (SIND) 0 40,978 81,954 40,978 0
DEUTSCHE BANK (SIND) 0 31,416 62,831 31,416 0
JP MORGAN CHASE BANK (SIND) 0 31,416 62,831 31,416 0
COMERICA BANK (SIND) 0 27,319 54,636 27,319 0
EXPORT DEVELOPMENT CANADA (SIND) 0 18,221 36,442 18,221 0
BBVA BANCOMER (SIND) 0 6,830 13,659 6,830 0
CREDIT LYONNAIS (SIND) 0 27,319 54,636 27,319 0
CREDIT SUISSE FIRST BOSTON (SIND) 0 27,319 54,636 27,319 0
HSBC BANK (SINDICADO) 0 27,319 54,636 27,319 0
BAYERISCHE HYPO-UND VEREINSBANK (SIND) 0 27,319 54,636 27,319 0
CITIBANK NA (SIND) 0 0 0 184,397 184,397 122,931
DEUTSCHE BANK (SIND) 0 0 0 96,296 96,296 64,197
JP MORGAN CHASE BANK (SIND) 0 0 0 96,296 96,296 64,197
BANCOMEXT 0 0 0 122,931 122,931 81,954
COMERICA BANK (SIND) 0 0 0 81,954 81,954 54,636
EXPORT DEVELOPMENT CANADA (SIND) 0 0 0 54,622 54,622 36,410
TORONTO DOMINION (SIND) 0 0 0 81,954 81,954 54,636
BBVA BANCOMER (SIND) 0 0 0 10,234 10,244 6,835
BBVA BANCOMER (SIND) 0 0 0 0 0
BANCO SANTANDER MEXICANO (SIND) 0 0 0 0 0
BANCO INVEX (SIND) 0 0 0 0 0
COMERICA BANK MEXICO (SIND) 0 0 0 0 0
IXE BANCO (SIND) 0 0 0 0 0
BANCO MERCANTIL DEL NORTE (SIND) 0 0 0 0 0
BANCO INBURSA 0 0 0 0 0
BANCO INBURSA 0 0 0 0 0
BANCO INBURSA 0 0 0 0 0
BANCO INBURSA 0 0 0 0 0
BANCO INBURSA 0 0 0 0 0
IXE BANCO 0 0 0 0 0
BBVA BANCOMER 218544 0 0 0 0
BANAMEX-CITIBANK 100,530 0 0 0 0
BANCO INBURSA 0 0 0 0 0
BANCO INBURSA 0 0 0 0 0
BANCO INBURSA 0 0 0 0 0
CITIBANK 11,564 0 0 0 0
CITIBANK 4,135 0 0 0 0
BANAMEX-CITIBANK 27,318 0 0 0 0
California Commerce B. 98,345 0 0 0 0
BANCO INBURSA 0 0 0 0 0
BANCO INBURSA 0 0 0 0 0
Varios Arrend. 1,669 1,887 4,196 6,327 6,972 32,814
BANCO SANTANDER MEXICANO 0 0 0 0 0
BANCO SANTANDER MEXICANO 0 0 0 0 0
BANCO SANTANDER MEXICANO 0 0 0 0 0
BANAMEX-CITIBANK 0 0 0 0 0
CITIBANK 4,117 0 0 0 0
CITIBANK 2,058 0 0 0 0
CITIBANK 2,919 0 0 0 0
CITIBANK 6,394 0 0 0 0
CITIBANK 715 0 0 0 0
CITIBANK 3,021 0 0 0 0
CITIBANK 10 0 0 0 0
CITIBANK 4,117 0 0 0 0
CITIBANK 62 0 0 0 0
CITIBANK 898 0 0 0 0
BANAMEX-CITIBANK 0 152,981 0 0 0
COMERICA BANK 0 5,464 0 0 0
COMERICA BANK 65,563 0 0 0 0
BANAMEX-CITIBANK 128,941 0 0 0 0
COMERICA BANK 54,636 0 0 0 0
COMERICA BANK 104 72 0 0 0
BANCO NAL. COMERCIO EXTERIOR 0 0 0 0 0
BBVA BANCOMER 109,272 0 0 0 0
BANCO NAL. COMERCIO EXTERIOR 0 0 0 0 0
BANAMEX-CITIBANK 54,636 0 0 0 0
BANAMEX-CITIBANK 14,752 0 0 0 0
BANCO NAL. COMERCIO EXTERIOR 0 0 0 0 0
BANCO NAL. COMERCIO EXTERIOR 0 0 0 0 0
BANCO NAL. COMERCIO EXTERIOR 0 0 0 0 0
BANCO NAL. COMERCIO EXTERIOR 0 0 0 0 0
BBVA BANCOMER 109,272 0 0 0 0
BANAMEX-CITIBANK 31,689 0 0 0 0
BANAMEX-CITIBANK 54,636 0 0 0 0
BANCO NAL. COMERCIO EXTERIOR 0 0 0 0 0
BANCO NAL. COMERCIO EXTERIOR 0 0 0 0 0
CITIBANK 0 16,021 0 0 0
CITIBANK 0 2,182 0 0 0
COMERICA BANK 9,041 0 0 0 0
COMERICA BANK 7,475 0 0 0 0
COMERICA BANK 9,259 0 0 0 0
COMERICA BANK 4,019 0 0 0 0
COMERICA BANK 3,616 0 0 0 0
0 0 0 0 0
-----------------------------------------------------------------------------------------------------------------------------------
1,321,060 715,946 717,917 1,174,675 899,574 1,644,669
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
AMORTIZATION OF LOANS IN FOREIGN CURRENCY WITH FOREING ENTITIES (THOUSANDS OF $)
-----------------------------------------------------------------------------------------------------------------------------------
TIME INTERVAL
-----------------------------------------------------------------------------------------------------------------------------------
CURRENT YEAR UNTIL 1 YEAR UNTIL 2 YEARS UNTIL 3 YEARS UNTIL 4 YEARS UNTIL 5 YEARS
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL STOCK
EXCHANGE 0 0 0 0 0 0
-----------------------------------------------------------------------------------------------------------------------------------
-----------------------------------------------------------------------------------------------------------------------------------
SUPPLIERS
-----------------------------------------------------------------------------------------------------------------------------------
OTHERS 974,091
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL SUPPLIERS 974,091
------------------------------------------------------------------------------------------------------------------------------------
OTHERS 190,164
------------------------------------------------------------------------------------------------------------------------------------
OTHER CURRENT
LIABILITIES AND
OTHER CREDITS 1,321,060 1,880,201 717,917 1,174,675 899,574 1,644,669
-----------------------------------------------------------------------------------------------------------------------------------
STOCK EXCHANGE CODE:DESC QUARTER:3 YEAR: 2003
ANNEX 6
MONETARY POSITION IN FOREIGN EXCHANGE
(Thousands of Pesos)
DOLLARS (1) OTHER CURRENCIES TOTAL
TRADE BALANCE THOUSANDS OF THOUSANDS OF THOUSANDS OF THOUSANDS OF THOUSANDS OF
DOLLARS PESOS DOLLARS PESOS PESOS
TOTAL ASSETS 333,793 3,647,423 0 0 3,647,423
LIABILITIES POSITION 863,799 9,438,904 0 0 9,438,904
SHORT TERM LIABILITIES POSITION 407,763 4,455,708 0 0 4,455,708
LONG TERM LIABILITIES POSITION 456,036 4,983,196 0 0 4,983,196
NET BALANCE -530,006 -5,791,481 0 0 -5,791,481
STOCK EXCHANGE CODE:DESC QUARTER:3 YEAR: 2003
ANNEX 7
INTEGRATION AND INCOME CALCULATION BY MONETARY POSITION
(Thousands of Pesos)
(ASSET)
LIABILITIES
MONTH MONETARY ASSETS MONETARY MONETARY MONTHLY MONTHLY (PROFIT)
LIABILITIES POSITION INFLATION AND LOSS
JANUARY 7,547,767 17,932,309 -10,384,542 0.4 41538
FEBRUARY 7,353,633 18,695,312 -11,341,679 0.28 31757
MARCH 6,550,172 17,713,494 -11,163,322 0.63 70329
APRIL 7,050,003 17,712,066 -10,662,063 0.17 18126
MAY 6,566,551 17,214,802 -10,648,251 -0.32 -34074
JUNE 6,347,401 16,913,474 -10,566,073 0.08 8453
JULY 7,512,235 17,415,797 -9,903,562 0.14 13865
AUGUST 7,477,354 17,510,539 -10,033,185 0.3 30100
SEPTEMBER 7,709,716 17,918,166 -10,208,450 0.6 61251
OCTOBER 0 0 0 0 0
NOVEMBER 0 0 0 0 0
DICEMBER 0 0 0 0 0
ACTUALIZATION 0 0 0 0 0
CAPITALIZATION 0 0 0 0 -52,281
FOREIGN CORP. 0 0 0 0 0
OTHER 0 0 0 0 0
TOTAL 189,064
STOCK EXCHANGE CODE:DESC QUARTER:3 YEAR: 2003
BONDS AND MEDIUM TERM NOTES LISTING IN STOCK MARKET (1)
ANNEX 8
FINANCIAL LIMITATIONS BASED ON ISSUANCES OR INSTRUMENTS
-1 Interest Coverage.
The result obtained from dividing the sum of (i) the consolidated operating
profit plus depreciation and amortization during the immediately prior 4 full
fiscal quarters by (ii) consolidated financial expense during such period, shall
not be less than 2.75 times.
-2 Capitalization.
The result obtained from dividing, (i) total debt with cost minus cash plus
fifty million dollars, by (ii) net assets plus total debt with cost minus cash
plus fifty million dollars, shall not be greater than 0.50 times.
-3 Leverage Ratio.
The result obtained from dividing (i) total debt with cost minus cash plus fifty
million dollars, by (ii) the sum of the consolidated operating profit plus
depreciation and amortization during the immediately prior 4 full fiscal
quarters, shall not exceed 4.15 times.
STATUS OF FINANCIAL COVENANTS
(1) Interest Coverage. 2.72
(2) Capitalization. 0.49
(3) Leverage Ratio. 5.48
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE:DESC QUATER:3 YEAR: 2003
PLANTS, COMMERCE CENTERS OR DISTRIBUTION CENTERS
ANNEX 9
-----------------------------------------------------------------------------------------------------------------------------
PLANT PLANT
OR ECONOMIC CAPACITY UTILIZATION
CENTER ACTIVITY (1) %
-----------------------------------------------------------------------------------------------------------------------------
EJES TRACTIVOS, S.A. DE C.V. REAR AXLES 320 63%
PISTONES MORESA, S.A. DE C.V. PISTONS (PIECES) 11,800 30%
MORESTANA, S.A. DE C.V. TAPPETS (PIECES) 16,512 83%
PISTONES MORESA, S.A. DE C.V. PISTON PINS (PIECES) 23,500 45%
ENGRANES CONICOS, S.A. DE C.V. GEARS (SETS) 850 76%
PRODUCTOS ESTAMPADOS DE MEXICO, S.A. PICK-UP BOXES (PIECES) 330 25%
VELCON, S.A. DE C.V. CONSTANT VELOCITY JOINTS (PIECES) 2,900 72%
TRANSMISIONES TSP, S.A DE C.V. TRANSMISSIONS (TRANS.) 71 23%
TREMEC, S.A. DE C.V. TRANSMISSIONS (TRANS.) 400 63%
CARDANES, S.A. DE C.V. PROPELLER SHAFTS (PIECES) AND AXLES COMPONENTS 742 70%
HAYES WHEELS CHIHUAHUA, S.A. DE C.V. ALUMINUM WHEELS (PIECES) 650 46%
HAYES WHEELS ACERO, S.A. DE C.V. STEEL WHEELS (PIECES) 6,100 30%
AUTOMETALES, S.A. DE .CV. IRON FOUNDRY (TONS.) 20 63%
TF VICTOR, S.A. DE C.V. GASKETS, SEALS, MOTOR PARTS (PIECES) 20,000 44%
FORJAS SPICER, S.A. DE C.V. PRECISION FORGES (TONS.) 54 46%
COATZACOALCOS, VER. POLYSTYRENE (TONS) 75,000 91%
XICOHTZINGO,TLAX. POLYSTYRENE (TONS) 65,000 55%
ALTAMIRA, TAMPS. (Dynasol) SYNTHETIC RUBBER (TONS) 85,500 90%
ALTAMIRA, TAMPS. (INSA) SYNTHETIC RUBBER (TONS) 96,000 83%
ALTAMIRA, TAMPS. (PARATEC) SYNTHETIC RUBBER (TONS) 24,000 72%
COATZACOALCOS, VER. PHOSPHATE (TONS) 100,000 100%
TULTITLAN, EDO. MEX. PHOSPHATE (TONS) 85,000 60%
LECHERIA, EDO. MEX. PHOSPHATE (TONS) 40,000 22%
ALTAMIRA, TAMPS. CARBON BLACK (TONS) 120,000 92%
COSOLEACAQUE, VER. METHYL METHACRYLATE (TONS) 24,000 97%
OCOYOACAC, EDO. MEX. ACRYLC SHEET (TONS) 7,855 86%
SAN LUIS POTOSI. S.L.P. ACRYLC SHEET (TONS) 4,806 90%
LERMA, EDO. MEX. MELAMINE LAMINATES (MLLS MM2) 5 83%
ZITACUARO, MICH. PARTICLE BOARD (MLLS M3) 164 84%
LECHERIA, EDO. MEX. ORTHOPHOSPHATE (TONS) 120,000 35%
-----------------------------------------------------------------------------------------------------------------------------
OBSERVACIONES:
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE:DESC QUARTER:3 YEAR: 2003
PLANTS, COMMERCE CENTERS OR DISTRIBUTION CENTERS
ANNEX 9
-----------------------------------------------------------------------------------------------------------------------------
PLANT PLANT
OR ECONOMIC CAPACITY UTILIZATION
CENTER ACTIVITY (1) %
-----------------------------------------------------------------------------------------------------------------------------
MERIDA MILL (ton/month) 25,000 75%
IRAPUATO MILL (ton/month) 12,000 15%
PENINSULA HOG (thousands) 35 100%
MERIDA SLAUGHTER HOUSE 222 90%
CANCUN SLAUGHTER HOUSE 27 61%
PENJAMO SLAUGHTER HOUSE 111 70%
IRAPUATO SLAUGHTER HOUSE 240 0%
MOCHIS (SANTA ROSA) FRESH TOMATO PROCESSING (TONS/DAY IN 100 DAYS) 3,000 8%
TOMATO PRODUCTS IN TETRABRIK CONTAINER (MILLION OF CASES) 6.19 82%
TOMATO PASTE (TONS IN 100 DAYS) 44,500 0%
DEHYDRATED PRODUCTS ( TONS/YEAR IN 100 DAYS OF SEASON) 384 0%
MOCHIS (LA CORONA) CANNED VEGETABLES (TONS) 72,567 36%
CANNED VEGETABLES (MILLIONS OF CASES) 6.66 36%
MAZATLAN TUNA (thousands boxes) 2,500 44%
ROSEMEAD, CALIFORNIA SALSA & CANNED VEGETABLES (thousands lb) 166,226 41%
OAXACA COFFEE (ton/month in turn) 212 50%
-----------------------------------------------------------------------------------------------------------------------------
MEXICAN STOCK EXCHANGE
SIFIC / ICS
STOCK EXCHANGE CODE:DESC QUARTER: 3 YEAR: 2003
MAIN RAW MATERIALS
ANNEX 10
---------------------------------------------------------------------------------------------------
MAIN
DOMESTIC SUPPLIERS FOREIGN
%
---------------------------------------------------------------------------------------------------
1 LAMINATE HYLSA, S. A. DE C.V. STEEL
2 STEEL INDUSTRIAS CH, S. A. STEEL
3 ALUMINUM NACOBRE LAMINATE
4 COLOR PAINTS P.P.G. INDUSTRIAS DE MEXICO, S.A. DE CV STEEL
5 LAMINATE AHMSA AUTOMOTIVE PARTS
6 COLOR PAINTS DUPONT DE MEXICO FORGE
7 RODAMIENTOS KOYO DE MEXICO LAMINATE
8 RODAMIENTOS TIMKEM ALUMINUM
9 LAMINATE GENERAL MOTORS RODAMIENTOS
10 FORGE
11
12
13 STYRENE PEMEX STYRENE
14 BUTADIEN BUTADIEN
15
16 METHANOL PEMEX METHANOL
17 TOLUEN PEMEX
18
19 NATURAL GAS PEMEX
20 PHOSPHORIC ACID MERCANTILE ARHODIA MEXICANA
21 PHOSPHORIC ACID (TECHNICAL) ARHODIA MEXICANA
22 ACETOCYANOHIDRINE
23
24 FRESH JALAPENO OWN PRODUCTION & FRESH MARKET ( VARIOUS )
25 FRESH TOMATO OWN PRODUCTION & FRESH MARKET ( VARIOUS )
26 FRESH TOMATILLO OWN PRODUCTION & FRESH MARKET ( VARIOUS )
27 TETRABRIK COTETRAPAK
28 METALLIC CAN GRUPO ZAPATA
29 METALLIC CAN ZAPATA ENVASES
30 CORN OIL ARANCIA CORN PRODUCTS
31 SHIPPING CARTON CELULOSA Y CORRUGADOS
32 SHIPPING CARTON EMPAQUE DE CARTON TITAN
33 TOMATO PASTE
34 REYNOLD'S ITEMS
35 VARIOUS
36 METALLIC CAN ENVASES DE SINALOA
37 DIESEL PEMEX
38 VEGETABLES
39 VEGETABLES
40 PACKAGING MATERIALS - GLASS
41 PACKAGING MATERIALS - CANS
42 HOG GENETIC PIC
GRAIN
-------------------------------------------------------------------------------------------------------
** TABLE CONTINUED **
CONSOLIDATED
------------------------------------------------------------------------------------------
MAIN DOM. COST
DOMESTIC SUPPLIERS SUBST. PRODUCTION
%
------------------------------------------------------------------------------------------
1 LAMINATE MC STEEL NO
2 STEEL MITSUBISHI YES
3 ALUMINUM NISHO OWAI NO
4 COLOR PAINTS
5 LAMINATE DANA CO. NO
6 COLOR PAINTS GSB FORJA NO
7 RODAMIENTOS DAEWOO CORP. NO
8 RODAMIENTOS REYNOLDS METAL YES
9 LAMINATE THE TIMKEN CO. NO
10 THYSSEN PRECISION FORGE NO
11
12
13 STYRENE STERLING, MITSUI
14 BUTADIEN SHELL, POLIMERI EUROPA , BP CHEMICAL,
15 EQUISTAR, SABIC, REPSOL QUIMICA
16 METHANOL CELANESE, PETROCEL
17 TOLUEN
18
19 NATURAL GAS
20 PHOSPHORIC ACID MERCANTILE
21 PHOSPHORIC ACID (TECHNICAL)
22 BP CHEMICAL
23
24 FRESH JALAPENO
25 FRESH TOMATO
26 FRESH TOMATILLO
27 TETRABRIK COTETRAPAK
28 METALLIC CAN
29 METALLIC CAN
30 CORN OIL
31 SHIPPING CARTON
32 SHIPPING CARTON
33 MORNING STAR OK
34 REYNOLDS
35 VARIOUS
36 METALLIC CAN
37 DIESEL
38 RIO FARMS
39 WOOLF ENTERPRISES
40 OWENS BROCKWAY
41 PECHINEYCPLASTIC
42 HOG GENETIC
CARGILL OK
------------------------------------------------------------------------------------------
STOCK EXCHANGE CODE:DESC QUARTER: 3 YEAR: 2003
Annex 11
SALES DISTRIBUTION BY PRODUCT
DOMESTIC SALES
------------------------------------------------------------------------------------------------------------------------------------
MAIN PRODUCTS TOTAL PRODUCTION SALES MAIN
--------------------------------------------------------- MARKET SHARES (%) -----------------------
VOLUME AMOUNT VOLUME AMOUNT TRADEMARKS CUSTOMERS
------------------------------------------------------------------------------------------------------------------------------------
AUTOPARTS SECTOR 1,891,566
CHEMICAL SECTOR 3,671,419
FOOD SECTOR 1,925,766
REAL ESTATE SECTOR 1,764,111
COMPANIES OF OTHER SERVICES 48,643
TOTAL
------------------------------------------------------------------------------------------------------------------------------------
TOTAL 9,301,505
------------------------------------------------------------------------------------------------------------------------------------
SALES DISTRIBUTION BY PRODUCT
FOREIGN SALES
------------------------------------------------------------------------------------------------------------------------------------
MAIN PRODUCTS TOTAL PRODUCTION SALES MAIN
--------------------------------------------------------- MARKET SHARES (%) ----------------------
VOLUME AMOUNT VOLUME AMOUNT TRADEMARKS CUSTOMERS
------------------------------------------------------------------------------------------------------------------------------------
AUTOPARTS SECTOR 3,846,582
CHEMICAL SECTOR 2,249,053
FOOD SECTOR 849,095
TOTAL
------------------------------------------------------------------------------------------------------------------------------------
TOTAL 6,944,730
------------------------------------------------------------------------------------------------------------------------------------
STOCK EXCHANGE CODE:DESC QUARTER: 3 YEAR: 2003
INTEGRATION OF THE PAID SOCIAL CAPITAL STOCK
CHARACTERISTICS OF THE SHARES
-----------------------------------------------------------------------------------------------------------------------------------
CAPITAL STOCK
SERIES NOMINAL VALID NUMBER OF SHARES (THOUSANDS OF PESOS)
VALUE COUPON -------------------------------------------------------------------------------------
PORTION PORTION MEXICAN SUBSCRIPTION FIXED VARIABLE
-----------------------------------------------------------------------------------------------------------------------------------
A 0.01300 20 587,479,900 587,479,900 7,637
-----------------------------------------------------------------------------------------------------------------------------------
B 0.01300 20 506,257,866 506,257,866 6,581
-----------------------------------------------------------------------------------------------------------------------------------
C 0.01300 20 275,341,610 275,341,610 3,580
-----------------------------------------------------------------------------------------------------------------------------------
Total 587,479,900 781,599,476 1,093,737,766 275,341,610 7,637 10,161
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL NUMBER OS SHARES REPRESENTING THE PAID-IN CAPITAL STOCK ON
THE DATE THE INFORMATION IS SENT:
1,369,079,376
SHARES PROPORTION BY:
CPO'S:
UNITS:
ADRS's:
GDRS's:
ADS's:
GDS's:
Repurchased own shares
Market value of the share
Series Number of Shares At repurchase At Quarter
------------------------------------------------------------------------------
General Data of the Issuer:
---------------------------
Corporate Name: Desc, S.A. de C.V.
Address: Paseo de los Tamarindos 400-B
City: Bosques de las Lomas
Zip Code: 5120
State: Mexico, D.F.
Telephone: 52-61-80-00
Fax: 52-61-80-98
E-Mail: desc@mail.desc.com.mx
Internet Address www.desc.com.mx
Fiscal Data of the Issuer:
--------------------------
RFC of Company: DES9405182F1
Domicile: Paseo de los Tamarindos 400-B
City: Bosques de las Lomas
Zip Code: 5120
State: Mexico, D.F.
Responsibility for Payments:
----------------------------
Name: Lic. Alejandro de la Barreda Gomez
Address: Paseo de los Tamarindos 400-B
City: Bosques de las Lomas
Zip Code: 5120
State: Mexico, D.F.
Telephone: 52-61-80-00
Fax: 52-61-80-98
Data with respect to officers:
------------------------------
Mexican Stock
Exchange equivalent: Chairman of the Board of Directors
Title at company: Chairman and Chief Executive Officer
Name: Mr. Fernando Senderos Mestre
Address: Paseo de los Tamarindos 400-B
City: Bosques de las Lomas
Zip Code: 5120
State: Mexico, D.F.
Telephone: 52-61-80-00
Fax: 52-61-80-98
Mexican Stock
Exchange equivalent: Chief Financial Officer
Title at company: Director of Finance
Name: Lic. Arturo D'Acosta Ruiz
Address: Paseo de los Tamarindos 400-B
City: Bosques de las Lomas
Zip Code: 5120
State: Mexico, D.F.
Telephone: 52-61-80-00
Fax: 52-61-80-98
E-Mail: adacosta@mail.desc.com.mx
Mexican Stock
Exchange equivalent: Officer in Charge of Sending
Quarterly Financial Information
Title at company: Corporate Manager of Financial
Information
Name: Lic. Alejandro De La Barreda Gomez
Address: Paseo de los Tamarindos 400-B
City: Bosques de las Lomas
Zip Code: 5120
State: Mexico, D.F.
Telephone: 52-61-80-00
Fax: 52-61-80-98
E-Mail: abarredag@mail.desc.com.mx
Mexican Stock
Exchange equivalent: Alternate Officer in Charge of
Sending Quarterly Financial
Information
Title at company: Corporate Comptroller
Name: Lic. Salvador Icazbalceta Ocampo
Address: Paseo de los Tamarindos 400-B
City: Bosques de las Lomas
Zip Code: 5120
State: Mexico, D.F.
Telephone: 52-61-80-00
Fax: 52-61-80-96
E-Mail: sicazbalceta@mail.desc.com.mx
Mexican Stock
Exchange equivalent: Officer Responsible for Legal Affairs
Title at company: General Counsel
Name: Lic. Ramon Estrada Rivera
Address: Paseo de los Tamarindos 400-B
City: Bosques de las Lomas
Zip Code: 5120
State: Mexico, D.F.
Telephone: 52-61-80-00
Fax: 52-61-80-97
E-Mail: restrada@mail.desc.com.mx
Mexican Stock
Exchange equivalent: Secretary of the Board of Directors
Title at company: Secretary of the Board of Directors
Name: C.P. Ernesto Vega Velasco
Address: Bosque de Ciruelos No. 130 Room 1203
City: Bosques de las Lomas
Zip Code: 11700
State: Mexico, D.F.
Telephone: 52-61-80-00
Fax: 52-61-80-60
E-Mail: evega@mail.desc.com.mx
Mexican Stock
Exchange equivalent: Officer in Charge of Providing Information
to Investors
Title at company: Corporate Manager of Financial Information
Name: Lic. Alejandro De La Barreda Gomez
Address: Paseo de los Tamarindos 400-B
City: Bosques de las Lomas
Zip Code: 5120
State: Mexico, D.F.
Telephone: 52-61-80-00
Fax: 52-61-80-97
E-Mail: abarredag@mail.desc.com.mx
Mexican Stock
Exchange equivalent: Officer Authorized to Send Information
via Emisnet
Title at company: Chief Financial Officer
Name: Lic. Arturo D'Acosta Ruiz
Address: Paseo de los Tamarindos 400-B
City: Bosques de las Lomas
Zip Code: 5120
State: Mexico, D.F.
Telephone: 52-61-80-00
Fax: 52-61-80-98
E-Mail: adascosta@mail.desc.com.mx
Mexican Stock
Exchange equivalent: Officer Authorized to Send Relevant
Events via Emisnet
Title at company: Secretary of the Board of Directors
Name: C.P. Ernesto Vega Velasco
Address: Bosque de Ciruelos No. 130 Room 1203
City: Bosques de las Lomas
Zip Code: 11700
State: Mexico, D.F.
Telephone: 52-61-80-00
Fax: 52-61-80-60
E-Mail: evega@mail.desc.com.mx
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Desc, S.A. de C.V.
--------------------------------
(Registrant)
Date: October 24, 2003 By /s/ Arturo D'Acosta Ruiz
--------------------------------
(Signature)
Name: Arturo D'Acosta Ruiz
Title: Chief Financial Officer