Document/Exhibit Description Pages Size
1: 6-K Corporacion Durango Partially Consolidaded 3q06 10± 42K
Results
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13A-16
OR 15D-16 OF THE SECURITIES EXCHANGE ACT OF 1934
For the month of August, 2006
Durango Corporation
(f/k/a Grupo Industrial Durango, S.A. de C.V.)
- -------------------------------------------------------------------
(Translation of registrant's name into English)
Torre Corporativa Durango, Potasio 150, Cuidad Industrial,
Durango, Durango, Mexico
- -------------------------------------------------------------------
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual
reports under cover Form 20-F or Form 40-F. Form 20-F [x] Form 40-F
Indicate by check mark whether the registrant by furnishing the information
contained in this Form 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-_____________.
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CORPORACION DURANGO AND REPORTING GUARANTOR GROUP
PARTIALLY CONSOLIDATED CONDENSED BALANCE SHEETS
AS OF DECEMBER 31, 2005 AND SEPTEMBER 30, 2006 (UNAUDITED)
EXPRESSED IN TERMS OF THE PURCHASING POWER OF MEXICAN PESOS
AS OF SEPTEMBER 30, 2006
(Stated in thousands of Pesos and Dollars)
US$ DLLS.
December 31, Sep 30, Sep 30,
2005 2006 2006
ASSETS
CURRENT ASSETS:
Cash and cash equivalents ........................$ 513,505$ 303,757 27,631
Accounts receivable, net ......................... 1,108,194 1,243,279 113,092
Taxes recoverable and other assets ............... 66,947 42,869 3,899
Inventories, net ................................. 808,737 827,642 75,285
Prepaid expenses ................................. 4,888 16,370 1,489
Total current assets ................... 2,502,271 2,433,917 221,396
LONG-TERM RELATED PARTIES .......................... 292,457 313,906 28,554
PROPERTY, PLANT AND EQUIPMENT, net ................. 7,356,100 7,642,205 695,157
INVESTMENT IN SUBSIDIARIES ......................... 3,628,952 3,676,268 334,404
OTHER ASSETS, net .................................. 204,195 189,953 17,279
Total assets ..........................$ 13,983,975$ 14,256,249 1,296,789
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Bank loans and current portion of long-term debt . 192,857 173,960 15,824
Interest payable ................................. 2,708 825 75
Trade accounts payable ........................... 402,773 345,604 31,437
Notes payable .................................... 27,725 25,043 2,278
Accrued liabilities .............................. 284,020 448,907 40,834
Employee profit-sharing .......................... 291 24,552 2,233
Total current liabilities ............. 910,374 1,018,891 92,681
LONG-TERM DEBT ..................................... 5,928,885 5,767,267 524,607
LONG-TERM RELATED PARTIES .......................... 792,125 856,355 77,896
LONG-TERM NOTES PAYABLE ............................ 21,093 17,596 1,601
DEFERRED TAXES...................................... 1,195,046 1,310,980 119,250
LIABILITY FOR EMPLOYEE BENEFITS..................... 308,338 303,502 27,607
Total long term liabilities ............ 8,245,487 8,255,700 750,962
Total liabilities ..................... 9,155,861 9,274,591 843,643
STOCKHOLDERS' EQUITY:
Majority interest ................................ 4,799,993 4,953,214 450,558
Minority interest ................................ 28,121 28,444 2,587
Total stockholders' equity ............. 4,828,114 4,981,658 453,146
Total liabilities and stockholders' equi$ 13,983,975$ 14,256,249 1,296,789
Exchange rate: $ 10.9935
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CORPORACION DURANGO AND REPORTING GUARANTOR GROUP
PARTIALLY CONSOLIDATED CONDENSED STATEMENT OF CHANGES IN FINANCIAL POSITION (UNAUDITED)
EXPRESSED IN TERMS OF THE PURCHASING POWER OF MEXICAN PESOS
AS OF SEPTEMBER 30, 2006
(Stated in thousands of Pesos and Dollars)
*
Full Year Acum. Sep Acum. Sep
2005 2006 US$ 2006
OPERATING ACTIVITIES:
Net income (loss) ..............................................$ 182,990$ -59,427 -5,406
Add (deduct)- Charges (credits) to income which do
not require (generate) resources:
Loss in subsidiaries .................................... 347,999 -47,885 -4,356
Depreciation and amortization ........................... 266,372 193,103 17,565
Loss (gain) on sale of property, plant and equipment .... 10,786 6,350 578
Deferred income taxes ................................... -197,173 76,845 6,990
Other.................................................... -26,291 19,404 1,765
Total items which do not require cash.................... 401,693 247,817 22,542
Net resources generated from income .......................... 584,683 188,390 17,136
Changes in operating assets and liabilities:
Decrease (Increase) in inventories ......................... -95,941 -18,905 -1,720
Decrease (Increase) in current assets ...................... 26,877 12,597 1,146
Decrease (increase) in account receivables, net ............ -1,467 -135,086 -12,288
(Decrease) increase in accounts payable and
accrued liabilities ...................................... -161,166 127,414 11,590
Resources generated by continued operating .................. 352,986 174,410 15,865
Assets and liabilities discontinued .......................... -23,735 0 0
Resources generated by operating activities .................. 329,251 174,410 15,865
FINANCING ACTIVITIES:
Increase (Decrease) in bank loans and others ............ -4,645,024 -198,149 -18,024
Increase (Decrease) in capital .......................... 297,879 0 0
Gain on shares sales .................................... 3,046,878 0 0
Net resources generated from financing activities ............ -1,300,267 -198,149 -18,024
INVESTMENT ACTIVITIES:
Acquisition and sale of property, plant and equipment.... 5,395 -178,211 -16,211
Acquisition of shares ................................... 681,430 -3,945 -359
Increase in deferred assets ............................. -6,445 -3,853 -350
Net resources applied to investing activities ................ 680,380 -186,009 -16,920
INCREASE IN CASH AND CASH EQUIVALENTS .......................... -290,636 -209,748 -19,079
CASH AND CASH EQUIVALENTS AT BEGINNING OF THE PERIOD............ 804,141 513,505 46,710
CASH & CASH EQUIVALENTS AT END OF THE PERIOD ...................$ 513,505$ 303,757US 27,631
* The exchange rate of 10.9935 was used for translation purposes.
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CORPORACION DURANGO AND REPORTING GUARANTOR GROUP
PARTIALLY CONSOLIDATED CONDENSED STATEMENTS OF INCOME (UNAUDITED)
EXPRESSED IN TERMS OF THE PURCHASING POWER OF MEXICAN PESOS
AS OF SEPTEMBER 30, 2006
Thousands of Pesos Thousands of Dollars
3Q 3Q 3Q 3Q
2005 2006 Var 2005 2006 Var
NET SALES ...............................$ 1,166,254$ 1,429,698 23% 103,833 130,049 25%
COST OF SALES ........................... 976,195 1,170,456 20% 86,912 106,468 23%
Gross profit........................ 190,059 259,242 36% 16,921 23,581 39%
Selling and Administrative expenses 114,152 122,033 7% 10,163 11,100 9%
Operating income ................... 75,907 137,209 81% 6,758 12,481 85%
FINANCIAL EXPENSE:
Interest expense ........................ 173,354 163,877 -5% 15,434 14,907 -3%
Interest income ......................... -19,152 -13,432 -30% -1,705 -1,222 -28%
Exchange (gain) loss, net ............... 8,637 -184,040 N/A 769 -16,741 N/A
Gain on monetary position ............... -30,994 -116,118 275% -2,759 -10,562 283%
Total financial expense ............... 131,845 -149,713 N/A 11,739 -13,618 N/A
OTHER INCOME (EXPENSES):
Other income (expense), net ............. 23,750 -15,323 N/A 2,115 -1,394 N/A
Total other income (expense) .......... 23,750 -15,323 N/A 2,115 -1,394 N/A
Income (loss) before income and asset t -32,188 271,599 N/A -2,866 24,705 N/A
Provisions for income and asset taxes ... 8,199 -506 -106% 730 -46 -106%
Provision for deferred income taxes ..... -183,208 135,359 N/A -16,311 12,313 N/A
Net income after taxes ................ 142,821 136,746 -4% 12,715 12,438 -2%
Discontinued operations ................. 175,603 0 -100% 15,634 0 -100%
Loss (Gain) in subsidiaries ............. -152,803 -45,396 -70% -13,643 -4,129 -70%
Net income before minority interest......$ 120,021$ 182,142 52% 10,724 16,567 54%
Minority interest...................... -14,080 587 N/A -1,254 53 N/A
Majority net income....................$ 134,101$ 181,555 35% 11,978 16,514 38%
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CORPORACION DURANGO AND REPORTING GUARANTOR GROUP
PARTIALLY CONSOLIDATED CONDENSED STATEMENTS OF INCOME (UNAUDITED)
EXPRESSED IN TERMS OF THE PURCHASING POWER OF MEXICAN PESOS
AS OF SEPTEMBER 30, 2006
Thousands of Pesos Thousands of Dollars
Ac Ac Ac Ac
2005 2006 Var 2005 2006 Var
NET SALES ...............................$ 3,495,389$ 3,973,139 14% 305,962$ 355,438 16%
COST OF SALES ........................... 2,947,971 3,227,552 9% 258,002 288,736 12%
Gross profit........................ 547,418 745,587 36% 47,960 66,702 39%
Selling and Administrative expenses 334,222 350,811 5% 29,264 31,389 7%
Operating income ................... 213,196 394,776 85% 18,696 35,313 89%
FINANCIAL EXPENSE:
Interest expense ........................ 441,458 494,541 12% 38,676 44,245 14%
Interest income ......................... -403,591 -37,984 -91% -34,488 -3,407 -90%
Exchange (gain) loss, net ............... -230,783 242,498 N/A -20,464 20,985 N/A
Gain on monetary position ............... -92,094 -162,835 77% -7,968 -14,806 86%
Total financial expense ............... -285,010 536,220 N/A -24,244 47,017 N/A
OTHER INCOME (EXPENSES):
Other income (expense), net ............. -103,655 116,352 N/A -8,942 10,254 N/A
Total other income (expense) .......... -103,655 116,352 N/A -8,942 10,254 N/A
Income (loss) before income and asset t 394,551 -25,092 N/A 33,998 -1,450 N/A
Provisions for income and asset taxes ... 11,478 5,375 -53% 1,020 471 -54%
Provision for deferred income taxes ..... 105,354 76,845 -27% 8,895 7,214 -19%
Net income after taxes ................ 277,719 -107,312 N/A 24,083 -9,135 N/A
Discontinued operations ................. 131,320 0 -100% 11,762 0 -100%
Loss (Gain) in subsidiaries ............. 69,782 -47,885 N/A 5,187 -4,250 N/A
Net income before minority interest......$ 76,617$ -59,427 N/A 7,134$ -4,885 N/A
Minority interest...................... -1,888 -577 -69% -173 -49 -72%
Majority net income....................$ 78,505$ -58,850 N/A 7,307$ -4,836 N/A
CORPORACION DURANGO, S.A. DE C.V. AND REPORTING GUARANTOR
GROUP
COMPLEMENTARY NOTES TO THE FINANCIAL INFORMATION
SUMMARY OF SIGNIFICANT ACCOUNTING AND FINANCIAL POLICIES:
FOLLOWING IS A SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
FOLLOWED BY THE COMPANY IN THE PREPARATION OF THE
PARTIALLY - CONSOLIDATED FINANCIAL STATEMENTS.
1.1 CONSOLIDATION BASIS:
THE PARTIALLY - CONSOLIDATED FINANCIAL STATEMENTS INCLUDE
THE FINANCIAL STATEMENTS OF CORPORACION DURANGO, S.A. DE
C.V. AND THE FOLLOWING SUBSIDIARIES:
COMPANIA PAPELERA DE ATENQUIQUE, S.A. DE C.V.
EMPAQUES DE CARTON TITAN, S.A. DE C.V.
ADMINISTRACION CORPORATIVA DE DURANGO, S.A. DE C.V.
PONDEROSA INDUSTRIAL DE MEXICO, S.A. DE C.V.
ALL SIGNIFICANT INTERCOMPANY BALANCES AND TRANSACTIONS
HAVE BEEN ELIMINATED FOR CONSOLIDATION PURPOSES. THE
PARTIALLY - CONSOLIDATED FINANCIAL STATEMENTS INCLUDE
THE ASSETS, LIABILITIES AND INCOME OR LOSS OF THE
PARENT COMPANY AND THE SUBSIDIARIES WITH MORE THAN 50%
OF OWNERSHIP.
AS OF JUNE 1, 2004, THE MEXICAN BOARD FOR RESEARCH AND
DEVELOPMENT OF FINANCIAL REPORTING STANDARDS, OR CINIF,
ASSUMED THE RESPONSIBILITY OF ESTABLISHING MEXICAN
ACCOUNTING AND REPORTING STANDARDS. AS PART OF ITS
RESPONSIBILITY, AND AFTER DUE EXPOSURE IN 2004 AND
2005, THE CINIF ISSUED SEVERAL FINANCIAL REPORTING
STANDARDS (NORMAS DE INFORMACION FINANCIERA, OR NIFS)
THAT BECAME EFFECTIVE ON JANUARY 1, 2006.
THE PRINCIPAL OBJECTIVE OF THE CINIF IN ISSUING THE
NIFS IS TO ACHIEVE GREATER CONCURRENCE BETWEEN
MEXICAN GAAP AND INTERNATIONAL FINANCIAL REPORTING
STANDARDS (IFRSS).
THE STRUCTURE OF THE NIFS IS AS FOLLOWS:
- NEW BULLETINS AND INTERPRETATIONS TO THE BULLETINS
ISSUED BY CINIF.
- EXISTING BULLETINS ISSUED BY THE ACCOUNTING
PRINCIPLES BOARD OF THE MEXICAN INSTITUTE OF PUBLIC
ACCOUNTANTS THAT HAVE NOT BEEN AMENDED, REPLACED OR
REPEALED BY THE NEW NIFS.
- IFRSS THAT ARE SUPPLEMENTARY GUIDANCE TO BE USED WHEN
MEXICAN GAAP DOES NOT PROVIDE PRIMARY GUIDANCE.
THE CIRCULARS ISSUED BY THE ACCOUNTING PRINCIPLES BOARD
WILL CONTINUE TO HAVE THE STATUS OF RECOMMENDATIONS AND
WILL BE PART OF THE NIFS UNTIL SUCH TIME AS THEY ARE
REPLACED OR REPEALED BY NIFS.
THE NIFS ISSUED TO DATE ARE NOT EXPECTED TO HAVE A
SIGNIFICANT EFFECT ON FINANCIAL INFORMATION REPORTING.
THEY ARE THE FOLLOWING:
NIF A-1 "FINANCIAL INFORMATION STANDARDS STRUCTURE".
NIF A-2 "BASIC PRINCIPLES".
NIF A-3 "USERS REQUIREMENTS AND FINANCIAL STATEMENTS
OBJECTIVES".
NIF A-4 "FINANCIAL STATEMENTS QUALITATIVE
CHARACTERISTICS".
NIF A-5 "FINANCIAL STATEMENTS BASIC ELEMENTS".
NIF A-6 "RECOGNITION AND VALUATION".
NIF A-7 "PRESENTATION AND DISCLOSURE".
NIF A-8 "SUPPLEMENTARY STANDARDS TO MEXICAN GAAP".
NIF B-1 "ACCOUNTING CHANGES AND ERROR CORRECTIONS".
1.2 BASIS FOR COMPARISSON EFFECTS IN THE FINANCIAL
STATEMENTS:
A) THE PARTIALLY CONSOLIDATED FINANCIAL STATEMENTS
HAVE BEEN PREPARED IN ACCORDANCE WITH MEXICAN GAAP
AND REFLECT THE PURCHASING POWER OF THE MEXICAN
PESO AS OF THE MOST RECENT REPORTIND DATE. FOR
COMPARISON PURPOSES, PARTIALLY CONSOLIDATED
FINANCIAL STATEMENTS OR PRIOR YEAR HAVE ALSO BEEN
RESTATED TO REFLECT IDENTICAL PURCHASING POWER,
USING FACTORS DERIVED FROM CHANGES IN THE NATIONAL
CONSUMER PRODUCTS INDEX (NCPI) ISSUED BY BANCO DE
MEXICO.
B) CONVERSION FIGURES OF FOREIGN SUBSIDIARIES IS
DONE IN ACCORDANCE WITH BULLETIN B-15 "FOREIGN
CURRENCY TRANSACTIONS AND TRANSLATION OF FINANCIAL
STATEMENTS OF FOREIGN OPERATIONS" ACCORDINGLY ,
THE TRANSLATION IS DONE UNDER THE "FOREIGN
ENTITIES"
1.3 VALUATION OF TEMPORARY INVESTMENTS:
THESE INVESTMENTS ARE REALIZABLE WITHIN THREE MONTHS
AND ARE VALUED AT MARKET PRICE. THE INCOME OR LOSS
GENERATED IS INCLUDED IN THE STATEMENTS OF
OPERATIONS.
1.4 RIGHTS AND LIABILITIES VALUATION IN FOREIGN
CURRENCY:
ASSETS AND LIABILITIES IN FOREIGN CURRENCY, MAINLY
IN AMERICAN DOLLARS, ARE EXPRESSED IN MEXICAN PESOS
AT THE CLOSING OF THE YEAR`S EXCHANGE RATE.
THE EXCHANGE RATE ON SEPTEMBER 30st, 2006 WAS
$10.9935.
1.5 INVENTORY VALUATION:
INVENTORIES ARE STATED AT AVERAGE COST, AND DO NOT
EXCEED MARKET VALUE. THE AVERAGE COST APROXIMATES
THE LAST PURCHASE OR PRODUCTION COST.
PROPERTY, PLANT AND EQUIPMENT:
PROPERTY, PLANT AND EQUIPMENT OF MEXICAN ORIGIN ARE
RECORDED AT ACQUISITION COST AND ARE RESTATED TO
REFLECT MEXICAN PESOS OF CONSTANT PURCHASING POWER
USING FACTORS DERIVED FROM CHANGES IN THE NATIONAL
CONSUMER PRICE INDEX (NCPI).
PLANT AND EQUIPMENT OF NON-MEXICAN ORIGIN ARE
RECORDED AT ACQUISITION COST AND THE ACQUISITION
COST IS RESTATED TO CONSTANT CURRENCY USING THE
INFLATION OF THE COUNTRY OF ORIGIN, THEN CONVERTED
INTO MEXICAN PESOS AT THE EXCHANGE RATE IN EFFECT
AT THE BALANCE SHEET DATE.
DEPRECIATION OF PROPERTY, PLANT AND EQUIPMENT, IS
CALCULATED BASED ON UNITS PRODUCED IN THE PERIOD
IN RELATION TO THE TOTAL ESTIMATED PRODUCTION OF
THE ASSETS OVER THEIR SERVICE LIVES. ASSETS ARE
DEPRECIATED AS FOLLOWS:
YEARS
BUILDINGS 25-50
MACHINERY & EQUIPMENT 23-40
OFFICE EQUIPMENTS 5-10
TRANSPORTATION VEHICLES 1-5
COMPUTER EQUIPMENT 1-3
THESE ASSETS ARE EVALUATED ANNUALLY FOR POTENTIAL
IMPAIRMENT.
RECURRING MAINTENANCE AND REPAIR EXPENDITURES ARE
CHERGED TO OPERATING EXPENSES AS INCURRED. MAJOR
OVERHAULS TO FIXED ASSETS ARE CAPITALIZED AND
AMORTIZED OVER THE PERIOD IN WHICH BENEFITS ARE
EXPECTED TO BE RECEIVED.
NET COMPREHENSIVE FINANCING COST INCURRED DURING
THE PERIOD OF CONSTRUCTION AND INSTALLATION OF
PROPERTY, PLANT AND EQUIPMENT IS CAPITALIZED AND
RESTATED APPLIYING FACTORS DERIVED FROM CHANGES
IN THE NCPI.
CONTINGENCY LIABILITIES:
LABOR OBLIGATIONS:
THE COMPANY ADOPTED THE NORMATIVE DISPOSITIONS
RELATED TO BULLETIN D-3 "LABOR OBLIGATIONS"
ISSUED BY THE MEXICAN INSTITUTE OF PUBLIC
ACCOUNTANTS, THIS NORMATIVITY MODIFIES THE BASIS
FOR CUANTIFICATION, RECOGNITION AND DISCLOSURE
OF EXPENSES AND LIABILITIES RELATED TO
RETIREMENT AND SENIORITY PREMIUMS, INCLUDING
FORMAL AND INFORMAL, REQUIRING ITS VALUATION
USING THE ACTUARIAL METHOD OF "PROJECTED UNITARY
CREDIT" WICH STATES THE OBLIGATION TO RECOGNIZE
A LIABILITY (ASSET) OF TRANSITION AT THE MOMENT
OF THE APPLICATION OF THIS BULLETIN, WHICH IS
AMORTIZED IN DIRECT LINE OVER THE REMAINIG
AVERAGE LABOR LIFE OF THE EMPLOYEES EXPECTED TO
RECEIVE SUCH BENEFITS FROM THE RETIREMENT PLANS,
REQUIRES AN ADDITIONAL LIABILITY IN CASE THE
ACTUAL LIABILITY IS LARGER THAN THE PROJECTED
NET LIABILITY (ASSET).
THE COST OF THE EMPLOYEE RETIREMENT PLANS
(PENSIONS AND SENIORITY PREMIUMS), ARE
RECOGNIZED AS COST IN THE YEARS IN WHICH THE
SERVICES ARE PAID IN ACCORDANCE WITH
CALCULATION PERFORMED BY INDEPENDENT ACTUARIES.
IN THE COMPANIES ESTABLISHED IN THE UNITED
STATES OF AMERICA, THERE IS A BENEFIT AND
RETIREMENT PLAN (THE PLAN), WHICH COVERS ALL
THE EMPLOYEES THAT MEET CERTAIN ELEGIBILITY
REQUIREMENTS. THE BENEFITS OF THE PLAN ARE
MAINLY BASED IN THE YEARS OF SERVICE AND THE
COMPENSATION OF SUCH EMPLOYEES. CORPORACION
DURANGO, S.A. DE C.V. AND SUBSIDIARIES
(THREE SUBSIDIARY COMPANIES) RECOGNIZES
"MODIFICATIONS TO THE BULLETIN D-3 ON 2004"
A NEW 2004 PLAN "ADDITIONAL BENEFITS AT
RETIREMENT" IN ACCORDANCE TO MODIFICATIONS
TO BULLETIN D-3.
STOCKHOLDERS' EQUITY:
CAPITAL STOCK, STOCK SALE PREMIUM, STATUTORY
LEGAL RESERVE AND RETAINED EARNINGS, INCLUDE
THE RESTATED EFFECT, ACCORDING WITH THE
NATIONAL CONSUMER PRICE INDEX (NCPI) FROM THE
DATE THE CAPITAL WAS CONTRIBUTED AND FROM THE
YEAR THE RESULTS AND PREMIUMS WERE DETERMINED
RESPECTIVELY. THE RESTATED AMOUNT REPRESENTS
THE REQUIRED AMOUNT TO MAINTAIN THE
CONTRIBUTIONS AND ACCUMULATED RESULTS IN
CONSTANT PESOS AS OF SEPTEMBER 30st, 2006.
FIXED AND VARIABLE EQUITY COMPONENTS
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AMOUNT NUMBER OF SHARES
FIXED PORTION 982,074 65,419,089
VARIABLE PORTION 678,873 45,222,022
---------- ------------
1,660,947 110,641,111
DEFERRED TAXES:
AS OF JANUARY 1st.,2000, WITH THE ISSUANCE OF
BULLETIN D-4 ("DEFERRED TAXES" THE COMPANY
RECOGNIZED TO THAT DATE (JANUARY 1st.,2000)
THE INITIAL EFFECT OF DEFERRED TAXES DERIVED
FROM TEMPORARY DIFFERENCES AS A GAIN OR A
LOSS,IN SUBSECUENT PERIODS THE COMPANY IS IN
COMPLIANCE WITH THE BULLETIN.
IN ORDER TO RECOGNIZE THE DEFERRED INCOME TAX,
THE HOLDING COMPANY AND ITS SUBSIDIARIES USE
THE INTEGRAL ASSETS AND LIABILITIES METHOD,
WHICH CALCULATES SUCH TAX, USING THE
APPLICABLE STATUTORY TAX RATE TO THE TEMPORARY
DIFFERENCES BETWEEN BOOK AND TAX VALUES OF
THE ASSETS AND LIABILITIES AS OF THE END OF
THE PERIOD.
DISCONTINUED OPERATIONS:
THE COMPANY REPORTS ON DISCONTINUED OPERATIONS
THE RESULT OF THE PARTICLEBOARD PLANT FROM
PONDEROSA INDUSTRIAL DE MEXICO, S.A. DE C.V.,
FOR 2005.
BUSINESS SEGMENTS INFORMATION:
SEGMENT REPORTING INFORMATION IS PREPARED IN
ACCORDANCE WITH BULLETIN B-5 "FINANCIAL INFORMATION
BY SEGMENT". THE SEGMENTS REPORT BASED ON THE
INTERNAL REPORT METHOD USED BY THE COMPANY.
THE COMPANY PRESENTS THE FOLLOWING BUSINESS SEGMENTS:
1. PACKAGING. THIS SEGMENT INCLUDES THE PRODUCTION
AND SALES OF CORRUGATED CONTAINER, MULTI-WALL SACKS
AND PAPER TUBES.
2. PAPER. THIS SEGMENT INCLUDES THE PRODUCTION AND
SALES OF KRAFT AND SEMI-KRAFT PAPER PRODUCED FROM
VIRGIN FIBERS OR RECYCLED FIBERS.
3. OTHERS. THIS SEGMENT INCLUDES THE PRODUCTION
AND SALE OF PLYWOOD.
AS OF SEPTEMBER 30st., 2006 AND 2005, THE SEGMENT
INFORMATION IS PRESENTED AS FOLLOWS:
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PROPERTY
PLANT AND
TOTAL EQUIPMENT SEGMENT
2006 INCOME ACQUISITION, NET ASSETS
------ --------- ---------------- --------------
PACKAGING 3,539,704 65,827 30,785,134
PAPER 2,430,146 51,826 9,072,790
OTHERS 91,562 60,558 669,960
ELIMINATONS (2,088,273) (26,271,635)
---------- ------------ --------------
TOTAL 3,973,139 178,211 14,256,249
========== ============ ==============
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PROPERTY
PLANT AND
TOTAL EQUIPMENT SEGMENT
2005 INCOME ACQUISITION, NET ASSETS
------ --------- ---------------- --------------
PACKAGING 3,428,872 10,578 27,957,674
PAPER 2,174,986 41,448 8,616,926
OTHERS 69,210 (47,001) 1,129,277
ELIMINATIONS (2,177,679) (22,977,200)
---------- ------------ --------------
TOTAL 3,495,389 5,025 14,726,677
========== ============ ==============
THE FINANCIAL INFORMATION PRESENTED ABOVE IS
USED IN THE DECISITION MAKING PROCESS BY THE
COMPANY.
INTERNAL CONTROL:
THE COMPANY HAS STARTED IMPLEMENTATION ON THE
SARBANES OXLEY ACT WITH THE ADVISE OF EXPERT
ADVISORS.
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. CORPORACION DURANGO, S.A. DE C.V.
Date: November 17, 2006 By /s/ Mayela Rincon de Velasco
--------------------------------
Name: Mayela Rincon de Velasco
Title: Chief Financial Officer
Dates Referenced Herein and Documents Incorporated By Reference
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