Quarterly Report 4Q 1998

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CIE
FOR IMMEDIATE RELEASE
CONTACTS IN NEW YORK
Maria Barona, mbaronarmtechnimetrics.com
Blanca Hirani, [email protected]
Thomson Financiallnvestor Relations
Tel: (212) 509-5100
CONTACTS IN MEXICO CITY
Jaime Zevada, Head of lnvestor Relations
Linda Burguete, Investor Relations
CIE S.A. de C.V. www.cie-mexico.com.mx
Tel: (011-525) 201-9000
CIE REPORTS 1998 YEAR END AND FOURTH QUARTER
OPERATING AND FINANCIAL RESULTS
.
.
.
.
Revenues up 91% for the year and 72% for the quarter, to Ps. 1,679 million and Ps. 517
respectively .
Operating income up 82% for the year and 65% for the quarter, to Ps. 349 million and
million as weIl.
EBITDA up 88% for the year and 43% for the quarter, to Ps. 408 million and Ps. 120
respectively.
Net Income up 17% for the year and 3% for the quarter, to Ps. 149 million and Ps. 42
respectively.
million,
Ps. 111
million,
million,
(A11figures are expressed in mi/lions 01Pesos as 01December 31. 1998. unless otherwise specified,
and are prepared in accordance with Mexican GAAP.
Certain amounts stated in this press release may dijJer due to rounding)
Mexico City, February 24, 1999, Corporacion Interamericana de Entretenimiento, S.A. de C.V. ("CIE" 01' "the
Company"), the leading live entertainment company in Latin America, announced today its financial and
operating results for the fiscal year and fourth quarter ended December 31, 1998.
Twelve-Month Period
Revenues for 1998 increased 91%, to Ps. 1,679, compared with total revenues of Ps. 878, recorded during 1997.
Revenues by division were as follows: the entertainment division increased by 117% to Ps. 1,125, the
commercial division increased by 119% to Ps. 269, and the services division increased 20% to Ps. 285.
Revenue Participation Percentages by Division:
Entertainment
Commercial
Services
Total
1998
67%
16%
17%
100%
1997
59%
14%
27%
100%
4Q 1998
68%
16%
16%
100%
4Q 1997
61%
14%
25%
100%
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The 117% revenue increase in the entertainment division of Ps. 607 was mainly due to a higher volume and a
greater diversity of events produced in Mexico and abroad, including various musical concerts, several cultural,
sports and family events, and new theatre productions, as described later in the reporto In particular, it is
important to mention (i) the incorporation of CIE-R&P, S.A. (CIE-R&P) during 1998, a joint venture between
CIE and Rock & Pop, S.R.L. (R&P), the largest live rock entertainment promoter in Argentina and Chile. This
joint venture, of which CIE owns 70%, accounted for 24% of CIE's consolidated revenues in 1998, (ii) the
revenue contributions of Grupo Magico and RAC Producciones during 1998 were significantly higher than
reported during 1997, as both companies were consolidated in CIE's financial statements until December of
that year, and therefore, only a certain number of their revenue days were recorded in CIE's financial
statements at year end 1997.
The 117% revenue increase in the commercial division of Ps. 146 was due to (i) a higher volume of rotational
advertising on soccer fields, the promotion and organization of more trade fairs and exhibitions, as well as an
increased selling of event sponsorships, advertisement spaces and merchandising in Mexico and abroad, in
particular Argentina. (ii) To the addition of Publitop, S.A. de C.V's, ("Publitop") operations during 1998, in
which CIE has a 75% stake, and which markets billboard advertising on pedestrian overpasses.
Finally, the 20% revenue increase in the services division of Ps. 49 was mainly due to a growth in
computerized ticketing revenues through the Ticketmaster System. This was a result of a higher number of
events during the year, jointly with important ticket-advertising revenues and new venues and events that
became affiliated with the system. In addition, it is worth mentioning that the TicketMaster On-Line operation
in Mexico, the Internet ticketing service launched during the third quarter of 1998, recorded important increases
in both, the number of "hits" and ticket sales.
Gross income increased 127%, to Ps. 689, which compares favorably to the Ps. 304 achieved during 1997. For
the year, CIE recorded a 41.0% gross margin, which represents a 640 basis points increase as compared to the
34.6% gross margin recorded during 1997. The gross margin increase was mainly the result of a lower
percentage of costs, as various efficiencies and economies of scale were achieved between CIE's workforce and
the newly established subsidiaries during the joint production and promotion of several events.
Operating income for 1998 increased 82%, to Ps. 349, as compared with an operating income of Ps. 191
recorded in 1997, which is the result of the 91% revenue growth during the year. Operating margin for 1998
was 20.8%, as compared to a 21.8% operating margin recorded during 1997, resulting from a Ps. 228 increase
in operating expenses. This increase in operating expenses were mainly attributable to the operating expenses
of the Company's new subsidiaries. As a general explanation, it is worth mentioning that when compared to
1997, the integration of a different mix of costs and expenses of CIE's subsidiaries during 1998, in particular
those that were recently acquired, resulted also in material variations in both, the gross and operating income.
Operating cash flow (earnings before interest, taxes, depreciation and amortization "EBITDA") increased 88%,
to Ps. 408, as compared to Ps. 217 reported during 1997. This increase is mainly due to the operating income
increase previously mentioned, in conjunction with a 126% increase in depreciation and amortization during
1998, to Ps. 59, resulting from the incorporation of R&P, Publitop and Grupo Magico's fixed assets during the
year.
For 1998, Integral Cost of Financing (ICF) increased 133%, to a cost of Ps. 77. The principal reason for this
increase was a higher interest expense, which increased by 167%. Accrued interest during the year was affected
by a Ps. 480 higher average debt during the year, to Ps. 647, coupled with higher Peso interest rates. During
1998, interest rates in Mexico averaged 26.89% (TIIE), which compared unfavorably with the average interest
Page 2
rates of21.89% during 1997.
The increase in the Company's debt is the result of CIE's strategy to finance its working capital needs through
a mix of debt coupled with the issuance of equity in the capital markets, in order to support its organic and newoperations growth. The use of proceeds of this debt was reflected in material increases in fixed and deferred
assets, including pre-operational investments, from which it is important to highlight the 70% acquisition of
R&P including The Buenos Aires 200 and the Teatro Opera, coupled with the development of The Americas
Horse Racetrack in Mexico City and the El Salitre amusement park in Bogota, among others.
In addition, it is worth mentioning that some of these projects are not expected to generate significant cashflows until 1999-2000, and therefore, did not contributed to EBITDA's income during 1998.
To a lesser extent, ICF was also affected by a Ps. 6 de crease in interest income, as a result of a higher portion of
US Dollar-denominated cash balances, which are invested at much lower interest rates.
Offsetting these effects, during 1998 the Company recorded a Ps. 55 exchange currency gain. Just for the fourth
quarter of 1998, CIE recorded an exchange currency gain of Ps. 45, mainly driven by an accounting adjustment
made by the Company's auditors in connection with CIE's local exchange currency position during the second
half ofthe year. To a lesser extent, a volatile exchange rate during the year, which went from 8.07/US Dollar at
December 31, 1997 to 9.94/US Dollar at December 31, 1998, positively affected the Company's average
domestic US-dollar net asset position.
In addition, CIE's result in monetary position was a Ps. 18 gain during the year, as compared to a Ps. 8 loss
recorded during 1997, as the 18.6% inflation rate for the year affected the Company's net-liability domestic
monetary position.
As non-recurrent operations, CIE recorded (i), a Ps. 49 expense in other financial operations, principally
resulting from the recognition of certain expenses derived from the restructure of some operations in the
Buenos Aires 200 and in the El Salitre' amusement park in Bogota, Colombia; and (ii), a Ps. 6 loss in net
extraordinary items, mainly due to certain costs related to the downsizing of the Company's administrativestaff during the period, in order to continue to increase internal efficiencies.
The Company recorded Ps. 47 in taxes during 1998, as compared with Ps. 16 in taxes during 1997, consisting
mainly bf provisions for income tax, reflecting an increase in the taxable income of the Group's subsidiaries.
The Company does not consolidate the results of its subsidiaries for fiscal purposes.
Minority interest for the year was Ps. 21, as compared to Ps. 6 recorded during 1997. This important increase is
mainly due to the incorporation of the previously mentioned operations during 1998, where the Company has
minority partners.
Net income for the year increased 17% to Ps. 149 miliion, from Ps. 127 million reported during 1997, driven by
the important revenue and operating income increases as explained earlier, which were partially offset by a
higher ICF and by the profit sharing to minority partners, as mentioned in the past paragraph. Additionally, the
net income for the year was significantly affected by a non-recurrent financial expense of Ps. 49.
Balance Sheet
CIE's total assets at December 31, 1998 were Ps. 4,792,212% higher as compared with total assets of Ps. 1,534
at December 31, 1997. As a result of the Company's use of proceeds in connection to its debt and equity
issuances as previously explained, a Ps. 435 increase in assets was recorded in property, plant and equipment,
Page 3
which mainly retlects the incorporation of CIE-R&P, Publitop and Grupo Magico's fixed assets during the
year, jointly with the first stages of the revamping and construction of the horse racetrack and related facilities.
In addition, a Ps. 2,523 increase in deferred assets, retlects (i) the recording of a Ps 1,241 valuation of the
Company's renewable twenty-five-year concession to operate a horse racing and betting facility at The
Americas Horse Racetrack of Mexico City, a 30-acre horse race track, jointly with a renewable fifty-year
concession to develop a family entertainment and cultural center in the approximately 104-acres surrounding
the racetrack. In accordance with Mexican GAAP, the initial valuation of the concession was based on an
average value of the projected real estate master-plan and the discounted cash tlows, and was performed by
independent specialists in the area. (ii) The goodwill recorded in connection to the purchase of Grupo Magico
and RAC Producciones, as well as deferred taxes and pre-operative expenses.
Other important increases of Ps. 308 and Ps. 268 were recorded in other account and document receivables, and
trade receivables, respectively, retlectillg the Company's organic and acquisition-driven growth during the
year.
Total liabilities at December 31, 1998 were Ps. 1,791, a 162% increase as compared with total liabilities at
December 31, 1997. This increase was primarily due to a Ps. 830 increase in short-term and long-term bank
loans, as a result of the Company's strategy to finance its working capital needs through debt and the issuance
of equity as mentioned above. During the fourth quarter of 1998, the Company raised a Dollar-denomillated
long-term loan ofUS$ 50 million (equivalent to Ps. approximately Ps. 500).
The Company's stockholders equity increased by 252% to Ps. 3,001 at December 31, 1998, as compared to
stockholders equity of Ps. 851 recorded during 1997. This important increase was mainly due to (i) the Ps. 149
net income for the year, (ii) a Ps. 554 increase in "premium on issuance of capital stock", recorded after the
public offering of "L" non-voting shares in the Mexican Stock Exchange, through which the Company raised
approximately US$ 60 million, and (iii) a Ps. 1,241 increase in the "surplus on the restatement of capital stock",
retlecting the valuation ofthe racetrack concessions, as explained earlier.
Fourtlz Quarter of 1998
For the fourth quarter of 1998, revenues increased 72% to Ps. 517, from the Ps. 30 I recorded during the fourth
quarter of 1997. This increase retlects (i), the incorporation of CIE-R&P, Grupo Magico, RAC and Publitop
operations, as explained in the full year analysis, and (ii), to an increase in the volume of events produced
during the period, including the 20 successful presentations of Timbiriche's reunion in Mexico's National
Auditorium and the two-day-Iong "Festival de Rock Latino" in CIE's Foro Sol. Abroad, CIE-R&P's successful
initiation of Disney's "Beauty and the Beast" in the Teatro Opera, in Buenos Aires, joilltly with the impressive
performance of the Buenos Aires FM radio station, Rock & Pop, as well as the successful presentations of
David Copperfield promoted by CIE-R&P in Madrid and Barcelona, also contributed to the revenue increase.
The Company recorded a 21.4% operating margin for the quarter, as compared to a 22.3% operating margin
recorded during the same period in 1997, resulting from a Ps. 96 increase in the operating expenses, to Ps. 107.
This increase was the result of (i) an important contribution by the operating expenses of the new subsidiaries,
and (ii), when compared with the fourth quarter of 1998, during the same period in 1997 the Company recorded
an unusual low level of operating expenses, due to a reclassification of certain expenses to the cost of sale,
made by the Company's auditors at the end ofthat year.
EBITDA increased 43% to Ps. 120 million, as compared to the same period in 1997. ICF increased 36% to Ps.
21, from Ps. 15 recorded during the fourth quarter of 1997.
Page 4
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CIE recorded a net income of Ps. 42 during the three-month period ended December 31, 1998, as compared
with a Ps. 41 net income in the same period of 1997. Even the important increase in revenues and operating
income, the net income was affected by a higher ICF, and Ps. 40 in non-recurrent financial expenses and
extraordinary items.
Operations report for the fourth quarter of 1998
This report covers CIE's operations during the fourth quarter of 1998 in all of its entertainment, commercial
and services business divisions, where it obtained favorable results.
l.
Entertainment
As the leading live entertainment company in Latin America, the Company actively participated in. the
operation of diverse entertainment venues, the promotion and realization of various events and the operation of
amusement parks during the periodo
Among the events that were successfully promoted in Mexico during the fourth quarter, were the following
national and internationally renowned artists and musical groups: Garbage, Jeff Beck, Green Day, David
Larible, Grupo Limite, Monjes, Alejandro Sanz, Francisco Cespedes, Jaguares, Eliades Ochoa, La Ley,
Sentidos Opuestos, El Tri and Alejandro Fernandez. In addition, the Company was involved in the reunion of
the Mexican music group, Timbiriche, which broke records at the Auditorio Nacional, with 20 continuous
shows.
Other notable events during the fourth quarter included the organization and production of the Telethon (A
music festival which gross is donated to disabled children in Mexico), and the launching of the new
VolksWagen Jetta and Passat in Mexico. The production of Medieval Times that continued running in Mexico
City. CIE also successfully launched the very first Festival Vive Latino, a music festival featuring 43 Latin rock
artists and groups, which took place in the Foro Sol stadium over a period of two days. In the area of sporting
events, the Company presented the international wrestling show, Guerra de Naciones (War oithe Natiom), and
the '98 Gymnastics Cup, featuring 20 national and international gymnasts.
Outside of Mexico, CIE-R&P, the Company's South American live entertainment subsidiary, was extremely
active in terms of production, with the presentation of Andrea Bocelli in Argentina and Chile. Various other
international and local rock shows also took place featuring BB King, Green Day, Jeff Beck, Dave Mathews
Band, Monsters of Rock, Viejas Locas and La Renga.
David Copperfield was also successfully presented in Madrid and Barcelona, which undoubtedly represents the
another important step ofthe Company in entering this highly important market.
In the theatre area, CIE R&P reopened the recently remodeled Opera Theatre, located in the heart of Buenos
Aires, with the launching on November 26th ofthe Walt Disney musical The Beauty and the Beast, featuring an
extraordinary local cast. The show presented 45 times during 1998, and it's expected to continue for 10 more
months, beginning 1999.
In Mexico City, the successful theatrical productions of four Spanish-Ianguage plays continued. The translated
titles ofthese are: Confessions oi 30-year Old Women, Three Tal! Women, We Who Love Each Other So Much.
and Master Class.
Page 5
The Company's 6 amusement parks in Mexico and Colombia, managed by the Company's subsidiary Grupo
Magico, also enjoyed a successful quarter. The high attendance rates were in part due to the inauguration of the
Dinosaur theme park in the El Salitre amusement park in Bogota, Colombia.
11.
Commercial
During the quarter, the Group significantly increased its advertisers base to more than 150, with which it
achieved an important growth in the sale of sponsorships and advertising spaces on venues, as well as the sale
of food, beverage and souvenirs in various Company-organized events and venues. In addition, the sale of
rotational advertising in soccer fields and the promotion and organization of fairs and exhibitions was
extremely active during the fourth quarter.
Among the more than 150 advertisers, some of the most important are:
Nestlé
Jhonson y Jhonson
Pepsico
Modelo
Banorte
Unilever
Coca-Cola
Levi Strauss
Pascual
Domeq
Procter & Gamble
Liverpool
Telmex
American Express
Cruz Azul
Bacardi
Bancomer
Femsa
Philip Morris
Cemex
Banamex
Bimbo
Master Card
Bardahl
In particular, it is important to highlight that during the quarter, a commercial agreement was reached
between the soccer football team Cruz Azul and Pepsico, including Pepsi's trade mark on the team 's shirts and
the exclusive selling of Pepsi at the Estadio Azul. In the same way, the commercial relationship with Bacardi &
Co. was enlarged, through the production of several promotional events within the Country.
The following fairs and exhibitions took place during the quarter: in Mexico City, the World Auto Expo '98 in
the World Trade Center was at 100% capacity in sold commercial-spaces, to 20,500 square meters; the
restaurant and hotel fair, the Rest-Hotel Abastur and the woman's fair, Expo Mujer. In the city of Guadalajara,
a metal and manufacturing fair was successfully organized: the Exposición Metal Mecánica and Manufactura
Ambientec.
In the area of rotational advertising in soccer fields, at the end of 1998 the Company had the rights to 8 of the
18 soccer teams in the First Division, as well as 2 of the First Division "A" teams. The Company continued to
participate in the Winter '98 tournament, reaching an important level for advertisers in terms of audience share
and ratings, as the Cruz Azul team was the generalleader of the tournament, before finals.
During this quarter, the Company's outdoor advertising subsidiary, Publitop, experienced significant growth in
its operations, as is mentioned in the financial discussion and analysis of this reporto During the quarter it is
important to mention the constructioll and remodeling of various bridges located in various mUllicipalities in
Nuevo León and the State ofMexico, increasing advertising capacity by 90%.
In Argentina, Rock & Pop, the Company's FM radio station in Buenos Aires, achieved record sales during
November and December due to the consolidation of its commercial area, where CIE's expertise in Mexico
plays a key roll. In efforts to increase the earnings of the Buenos Aires Zoo, CIE-R&P began a strategy of
sponsoring habitats for animals directly. Among the first clients were Bimbo and the Banco Hipotecario de
Buenos Aires.
In addition, CIE-R&P also reported a remarkable growth in the sale of food, beverage and merchandising at
Company-operated locations, such as the Buenos Aires Opera Theatre and the Buenos Aires Zoo, and is also
Page 6
currently analyzing possibilities of performing these services for events and companies that are not necessarily
part ofCIE-R&P.
III. Services
In the area of computerized ticket sales, the Company also showed very good results, mainly due to the sale of
the various events previously mentioned, as well as the other activities developed in the venues that are
affiliated with the TicketMaster system. In addition, the visitors to the Ticketmaster On Line's home page
recorded impressive increases during the year, with approximately 1.4 miliion "hits" in December, 1998.
In addition, during the quarter the following venues and events became affiliated to the Ticketmaster System:
the Aguas Calientes and Monterrey city fairs, the Hard Rock Café in Guadalajara, where due to the growing
demand, a local ticket sales number was introduced. Also the ticket sales contract with the soccer team, Rayos
de Monterrey, was renewed for another 10years.
Regarding the telemarketing operations, the Company reported various new clients in Mexico City, Monterrey
and Bogota, Colombia. In Mexico, the Company operates a 24-hour customer service line for Banco Santander.
Also during the quarter, the Company initiated projects with Bancomer, Banorte and American Express, and
signed a 1-year contract with Alestra for the marketing of telephone lines beginning February 1999 in the
Monterrey offices.
Centro de Entretenimeinto
AMH, the Company's
Hipodromo.
Quarterly
.
Familiar y Cultural
racetrack operator
de las Americas
began construction
of the track, bleachers
and stables in the
news:
During the month of October, CIE acquired the remaining 49% of Rac Producciones, a subsidiary of CIE,
thus becoming a 100% holder of this company. Rac will continue to operate as the market leader in
promotion of Latin live and family events. This transaction generated important economies of scale and
efficiencies within the Group, and provided depth to its management, through the incorporation of
experienced executives.
.
.
In November, the Company's subsidiary, Venta de Boletos por Computadora, S.A. de C.V. and, the media
giant, Grupo Televisa, established a 16-year strategic alliance via which Ticketmaster-México will provide
administrative and distribution ticket services for 8 owned or operated Televisa entertainment venues
according to independent agreements with each venue. This alliance included the purchase of the Boletel
brand by Ticketmaster-México.
During December, Ocesa renewed the contract to operate the Palacio de los Deportes venue for an
additional 5 years, by the proper Mexico City authorities.
Year 2000
Page 7
A majority of CIE's systems were, since its development and/or acquisition, Year 2000 ready. However, it is
possible that our current computer, software application, ticket-selling, internal accounting, customer billing
and other business systems, working either alone or in conjunction with those of third parties who do business
with us, will not accept input of, store, manipulate and output dates in the year 2000 or thereafter without error.
Although we have initiated a company-wide program to identify and address the impact of the Year 2000
problem on our operations, we cannot offer you any assurance that we wi/l avoid business interruptions or
shutdown,financialloss, reputational harm or legalliability. Ourprogram inc/udes steps to:
. identify hardware components and software applications that require modification or replacement;
. develop a corrective action plan and cost estimate (and a contingency plan and cost estimate in the event
any such modifications or replacements are not implemented on a timely basis); and
test and implement the corrective action plan.
.
The Company has substantially completed the identification of the scope of its Year 2000. 8ased on its
analysis, the Company estimates that its total costs to resolve its Year 2000 problem will be as high as US $
500,000, and that all required corrective actions will be implemented by June 1999. The Company is still
determining the estimated costs of contingency plan if the corrective actions are not implemented on a timely
basis. The Company has also received responses fram a substantial majority of its suppliers conforming that
they are Year 2000 ready, including on of its most important supplier, Telmex. Although the Company
estimates that the cost of resolving its Year 2000 problem is not material, the complexity of the issue and
possible unforeseen risks may render the actual correction more costly. In addition, the failure of suppliers and
clients to complete their respective Year 2000 corrective work in a timely manner could result in disruptions
and delays in the Company's services.
Company Description
CIE is the leading live entertainment holding company in Latin America. With headquarters in Mexico City,
CIE's activities encompass nearly all aspects of the live entertainment industry, from the promotion of various
events and the operation of diverse entertainment venues and amusement parks, to the operation and
management of fairs and expositions. The Company also markets tickets for shows thraugh a computerized
ticketing system.
Explanatory note: Except lar the historie information here provided. statements inc/uded in this report regarding the Company's
business outlook and anticipated financial and operating results or regarding the Company's growth potential. constitute lorwardlooking statements and are based on management expectations regarding the economic conditions in Mexico and the countries where
C/E operates. the jluctuation 01the Mexican Peso and all the risks stated in any 01the ojJeringcirculars lar any 01the Company's debt
and/or equity issues.
Page 8
CIE
EQUITY RESEARCH:
QUARTER:
CORPORACION
INTERAMERICANA
YEAR: 1998
4
DE ENTRETENIMIENTO,
S.A. DE C.V.
CONSOLIDA TED BALANCE SHEET
(Thousands
REF.
S
1
2
46
47
3
4
5
6
7
AS OF DECEMBER 31, 1998 AND 1997
01 Mexican Pesos 01 Oecember
31,1998 purchasing
CONCEPTS
CASH ANO CASH EQUIVALENTS
CASH
SHORT- TERM INVESTMENTS
CASH AND CASH EQUIVALENTS
ACCOUNTS AND NOTES RECEIVABLE
OTHER ACCOUNTS RECEIVABLE
INVENTORIES
OTHER CURRENT ASSETS
38,818
182,518
221,336
390,998
428,375
10,260
74,561
Current Assets
11
12
13
14
15
16
17
PROPERTY, PLANT AND EQUIPMENT
BUILDING
INDUSTRIAL MACHINERY AND EQUIPMENT
OTHER EQUIPMENT
ACCUMULA TED DEPRECIA TION
CONSTRUCTION IN PROCESS
1,125,530
Total Long Term Assets
Property, plant and equipment .Net.
OEFERREO ASSETS
EXPENSES TO AMORTlZE
- NET
GOOOWILL (EXCESS OF COST ON
SUBSIOIARY SHARES VALUE)
OEFERREO TAXES
OTHERS OEFERREO
18
DEFERRED ASSETS (NET)
19
OTHER ASSETS
22
23
54
55
56
24
25
26
27
28
61
62
29
30
68
69
32
O
O
O
O
O
O
O
O
O
O
O
O
O
O
548,814
61,598
O
417,786
127,074
623,833
178,106
66,775
1,057,362
9
3
13
4
1
22
622,627
9
O
36
4
O
41
1,969,573
41
77,100
5
12
O
2
54
2,448
6,196
85,744
135,4/1
O
O
O
O
6
O
188,374
12
4,791,769
100
1,533,766
100
196,485
11
21
75,082
89,876
11
13
51,564
283,050
913,726
O
O
O
O
3
16
51
O
O
O
O
70,104
59,877
294,939
O
O
O
O
10
9
43
566,834
32
29,373
4
O
8
8
3
43
177,900
177,900
125,269
332,542
O
O
6
6
55,024
55,024
LIABILITIES
SHORT- TERM UABILITIES
SUPPLIERS
BANK LOANS
SECURITIZEO LOANS
COMMERCIAL PAPER
MID- TERM PROMISSORY NOTE
SHORT- TERM MA TURITY OF LONG OEBT SECURIT
SECURITIZED LOANS
TAXES PAYABLE
OTHER SHORT- TER M LlABILlTIES
Total Short-Term Liabilities
LONG- TERM LlABILlTlES
BANK LOANS
SECURITIZEO LOANS
OBL/GATIONS
1.110-TERM PROMISSORY NOTE
SECURITIZED LOANS
OTHER LOANS
34
35
36
37
38
39
40
MINORITY INTEREST
MAJORITY SHAREHOLDERS
PAID-IN CAPITAL
O
O
O
O
150,000
150,000
45,837
L/abllltles
OEFERREO CREOITS
GOOOWlLL
OEFERREO TAX
OTHER OEFERREO CREOITS
DEFERRED CREDITS
OTHER L/ABIL/TlES
RESERVES
OTHER L/ABIL/TlES
OTHER LlABILlTIES
STOCKHOLDERS'
382,627
O
762,671
4,625
O
109,996
114,621
O
O
O
Total Liabilities
O
O
O
O
O
O
O
O
O
O
O
O
18
23
O
O
8
8
O
O
O
1,791,018
100
682,505
74
267,691
9
50,993
6
6,332
4,694
800,521
306,184
1,117,731
O
O
27
10
37
5,472
4,478
246,731
314,751
571,432
1
1
29
37
67
EQUITY
PAID-IN CAPITAL
RESTATEMENT OF PAID-IN CAPITAL
PREMIUM ON SHARES
UNSECURED OBLIGA TIONS CONVERTIBLES
ON SHARES
Total Pa/d-In Capital
GAIN (LOSS) CAPITAL
RETAINED EARNING AND CAPITAL RESERVES
RESERVE FOR REPURCHASING SHARES
225,102
O
8
O
101,828
O
12
O
O
1,241,066
O
41
O
O
O
O
1,241,066
149,161
1,615,329
41
5
54
O
O
15
27
SURPLUS (OEF/CIT) IN THE RESTA TEMENT OF CAPITAL
ACCRUEO MONETARY POSITION
70
71
44
PROFIT (LOSS)FROId HOLDINGNONldONETARYASSETS
SURPLUS (DEFICIT) IN THE RESTATEMENT OF CAPITAL
45
NET INCOME (LOSS) FOR THE YEAR
Total Gain (Loss) Capital
Total
Majority Shareholders
Total Stockholders'
-
169,506
123,177
120,488
6,662
217,188
637,021
11
O
11
8
8
O
14
42
O
O
33
41
42
43
169,506
O
O
76,420
2,608,877
Tolal Long-Term
65
66
67
31
1
4
5
8
9
O
2
23
O
562,884
O
TOTAL ASSETS
21
%
.AMOUNT,
CURRENT ASSETS:
LONG TERM ASSETS
ACCOUNTS RECEIVABLE
INVESTMENT ON SHARES OF NON CONSOLIDA TED
SUBSIDIARY COMPANIES
OTHERINVESTMENTS
20
LAST QUARTER
1997
ASSETS
Total
8
9
10
power)
. CURRENTQUARTER
1998
o/. "w
"AMOUNT
Equlty
Total Uablllties and Stockholders' EQu1tv
2,733,060
O
3,000,751
91
4,791,769
127,008
228,836
800,268
851,261
1,533,766
1
94
CIE
QUARTER:
4
CORPORACION INTERAMERICANADE ENTRETENIMIENTO,S.A. DE C.V.
EQUITY RESEARCH:
CONSOLlDATED
YEAR: 1998
STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 31, 1998 AND 1997
(Thousands
of Mexican Pesos of December 31,1998 purchasing
power)
TwelveMonth
REF.
I
CONCEPTS
S
1998
AMOUNT
Twelve Month
1997
AMOUNT
%
%
I
1
NET SALES
1,678,989
100
877,443
100
930,874
58,928
989,802
55
4
59
547,725
26,113
573,838
62
3
65
689,187
41
303,605
35
340,157
20
112,330
13
349,030
21
191,275
22
192,948
63,597
43,804
118,538
(17,701)
11
4
3
7
(1)
72,260
2,599
50,069
O
7,981
8
O
6
O
1
76,502
5
32,771
4
272,528
16
158,504
18
I
I
2
3
]
4
COST OF SALES
COST
DEPRECIA TlON
COST OF SALES
GROSS PROFIT
OPERATING EXPENSES
(SALES, ADMINISTRATIVE AND G
OPERA TING INCOME
I
COMPREHENSIVE FINANCING COST:
INTEREST EXPENSE
FOREIGN EXCHANGE EXPENSE
INTEREST INCOME
FOREIGN EXCHANGE GAINS
MONETARY (GAINS) EXPENSE
I
06
COMPREHENSIVE
FINANCING COST:
I
07
INCOME AFTER COMPREHENSIVE
FINANCING COST
I
OTHER FINANCIAL OPERA TlONS
08
OTHER (INCOME) EXPENSES - NET
LOSS (GAIN) ON SALE OF SHARES
LOSS (GAIN) ON SALE OF SHORT- TERM INVESTMENTS
OTHER FINANCIALOPERATIONS
09
INCOME BEFORE INCOME TAX, TAX ON ASSETS AND EMPLOY
I
I
I
I
10
11
12
I
I
I
13
14
15
16
17
18
19
16
PROVISIONS FOR TAXES
INCOME TAX
DEFERRED INCOME TAX
EMPLOYEE PROFIT SHARING
DEFERRED EMPLOYEE PROFIT SHARING
PROVISIONS FOR TAXES
INCOMEAFTER INCOME TAX,TAX ON ASSETS AND EMPLOYE
PARTICIPATIONON THE RESULTS OF
NON CONSOLlDATEDSUBSIDIARYCOMPANIES
INCOME(LOSS) ON CONTINUINGOPERATIONS
INCOME (LOSS) ON DISCONTINUINGOPERATIONS
INCOME(LOSS) BEFORE EXTRAORDINARYITEMS
LOSS (GAIN)ON NET EXTRAORDINARYITEMS
CUMULATIVEEFFECT OF CHANGE IN ACCOUNTINGPRIN
CONSOLIDATED NET INCOME
MINORITYINTEREST
NET INCOMEOF MAJORITYSHAREHOLDERS
49,216
O
O
49,216
223,312
3
O
O
3
13
12,010
O
O
12,010
146,494
1
O
O
1
17
46,948
O
O
O
46,948
3
O
O
O
3
15,948
O
76
O
16,024
2
O
O
O
2
176,364
11
130,470
15
(27)
176,337
O
176,337
6,063
O
170,274
21,113
149,161
(O)
11
O
11
O
O
10
1
9
O
130,470
(66,208)
196,678
64,116
O
132,562
5,554
127,008
O
15
(8)
22
7
O
15
1
14
CORPORACION INTERAMERICANA DE ENTRETENIMIENTO,
S.A. DE C.V.
CONSOLlDATED STATEMENT OF INCOME
FOR THE FOURTH QUARTER ENDED DECEMBER 31,1998 AND 1997
(Thousands of Mexican Pesos of December 31,1998 purchasing power)
CONCEPTS
NET SALES
COST OF SALES
COST
DEPRECIA TlON
COST OF SALES
3ROSS PROFIT
OPERATING EXPENSES (SALES, ADMINISTRATIVE AND GENERAL EXPE
OPERATING INCOME
COMPREHENSIVE FINANCING COST:
INTEREST EXPENSE
FOREIGN EXCHANGE EXPENSE
INTEREST INCOME
FOREIGN EXCHANGE GAINS
MONETARY (GAINS) EXPENSE
COMPREHENSIVE FINANCING COST:
INCOME AFTER COMPREHENSIVE FINANCING COST
OTHER FINANCIAL OPERA TIONS
OTHER (INCOME) EXPENSES - NET
LOSS (GAIN) ON SALE OF OWN SHARES
LOSS (GAIN) ON SALE OF SHORT- TERM INVESTMENTS
OTHER FINANCIAL OPERATIONS
INCOME BEFORE INCOME TAX, TAX ON ASSETS AND EMPLOYEE PROFIT S
PROVISIONS FOR TAXES
INCOME TAX
DEFERRED INCOME TAX
EMPLOYEE PROFIT SHARING
DEFERRED EMPLOYEE PROFIT SHARING
PROVISIONS FOR TAXES
INCOME AFTER INCOME TAX, TAX ON ASSETS AND EMPLOYEE PROFIT SH
PARTICIPATION ON THE RESULTS OF
NON CONSOLlDATED SUBSIDIARY COMPANIES
INCOME (LOSS) ON CONTINUING OPERATIONS
INCOME(LOSS) ON DISCONTINUINGOPERATIONS
INCOME (LOSS) BEFORE EXTRAORDINARYITEMS
LOSS (GAIN) ON NET EXTRAORDINARY ITEMS
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLES
CONSOLlDATED NET INCOME
MINORITY INTEREST
NET INCOME OF MAJORITY SHAREHOLDERS
Fourth Quarter
1998
AMOUNI..
Fourth Quarter
1997
AMOUNT
o¡"
..
%
516,628
100
300,955
288,827
9,620
298,447
56
2
58
224,189
(1,790)
222,399
74
(1)
74
218,181
42
78,556
26
107,456
21
11,577
4
110,725
21
66,980
22
88,639
32,559
20,204
77,955
(2,401)
20,637
17
6
4
15
(O)
4
26,774
. 2,500
20,083
O
6,016
15,207
90,087
17
51,773
100
9
1
7
O
2
5
17
40,090
O
O
40,090
8
O
O
8
15,039
O
O
15,039
5
O
O
5
49,997
10
36,734
12
2,027
O
O
O
2,027
O
O
O
O
O
3,726
O
O
O
3,726
1
O
O
O
1
9
33,008
11
(O)
9
O
9
1
O
8
O
33,008
(66,208)
99,217
64,114
O
35,103
(5,410)
40,513
O
11
(22)
33
21
O
12
47,970
(27)
47,943
O
47,943
6,063
O
41,880
(14)
41,894
(O)
8
(2)
13