Document/Exhibit Description Pages Size
1: 6-K Corporacion Durango Partially Consolidated Second 9± 37K
Quarter 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 JUNE 30, 2006 (UNAUDITED)
EXPRESSED IN TERMS OF THE PURCHASING POWER OF MEXICAN PESOS
AS OF JUNE 30, 2006
(Stated in thousands of Pesos and Dollars)
US$ DLLS.
December 31, Jun 30, Jun 30,
2005 2006 2006
ASSETS
CURRENT ASSETS:
Cash and cash equivalents ........................$ 504,434$ 307,328 27,264
Accounts receivable, net ......................... 1,088,617 1,251,681 111,040
Taxes recoverable and other assets ............... 65,765 42,310 3,753
Inventories, net ................................. 794,451 835,471 74,117
Prepaid expenses ................................. 4,802 8,920 791
Total current assets ................... 2,458,069 2,445,710 216,966
LONG-TERM RELATED PARTIES .......................... 287,290 226,557 20,099
PROPERTY, PLANT AND EQUIPMENT, net ................. 7,226,152 7,667,654 680,221
INVESTMENT IN SUBSIDIARIES ......................... 3,590,501 3,713,732 329,456
OTHER ASSETS, net .................................. 200,588 196,910 17,468
Total assets ..........................$ 13,762,600$ 14,250,563 1,264,211
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Bank loans and current portion of long-term debt . 189,450 189,766 16,835
Interest payable ................................. 2,660 1,488 132
Trade accounts payable ........................... 395,658 390,381 34,632
Notes payable .................................... 27,235 16,466 1,461
Accrued liabilities .............................. 279,001 386,944 34,327
Employee profit-sharing .......................... 286 284 25
Total current liabilities ............. 894,290 985,329 87,412
LONG-TERM DEBT ..................................... 5,824,148 5,956,273 528,399
LONG-TERM RELATED PARTIES .......................... 778,132 859,553 76,254
LONG-TERM NOTES PAYABLE ............................ 20,721 18,209 1,615
DEFERRED TAXES...................................... 1,173,935 1,188,831 105,465
LIABILITY FOR EMPLOYEE BENEFITS..................... 302,891 300,838 26,688
Total long term liabilities ............ 8,099,827 8,323,704 738,421
Total liabilities ..................... 8,994,117 9,309,033 825,833
STOCKHOLDERS' EQUITY:
Majority interest ................................ 4,740,859 4,913,319 435,875
Minority interest ................................ 27,624 28,211 2,503
Total stockholders' equity ............. 4,768,483 4,941,530 438,378
Total liabilities and stockholders' equi$ 13,762,600$ 14,250,563 1,264,211
Exchange rate: $ 11.2723
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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 JUNE 30, 2006
(Stated in thousands of Pesos and Dollars)
*
Full Year Acum. Jun Acum. Jun
2005 2006 US$ 2006
OPERATING ACTIVITIES:
Net income (loss) ..............................................$ 179,738$ -237,399 -21,060
Add (deduct)- Charges (credits) to income which do
not require (generate) resources:
Loss in subsidiaries .................................... 341,874 -2,340 -208
Depreciation and amortization ........................... 261,667 126,628 11,234
Loss (gain) on sale of property, plant and equipment .... 10,595 -740 -66
Deferred income taxes ................................... -193,691 -57,480 -5,099
Other.................................................... -25,827 21,805 1,934
Total items which do not require cash.................... 394,618 87,873 7,795
Net resources generated from income .......................... 574,356 -149,526 -13,265
Changes in operating assets and liabilities:
Decrease (Increase) in inventories ......................... -94,247 -41,020 -3,639
Decrease (Increase) in current assets ...................... 26,403 19,337 1,715
Decrease (increase) in account receivables, net ............ -1,441 -163,064 -14,466
(Decrease) increase in accounts payable and
accrued liabilities ...................................... -158,319 90,723 8,048
Resources generated by continued operating .................. 346,752 -243,550 -21,606
Assets and liabilities discontinued .......................... -23,315 0 0
Resources generated by operating activities .................. 323,437 -243,550 -21,606
FINANCING ACTIVITIES:
Increase (Decrease) in bank loans and others ............ -4,562,968 235,051 20,852
Increase (Decrease) in capital .......................... 292,617 0 0
Gain on shares sales .................................... 2,993,053 0 0
Net resources generated from financing activities ............ -1,277,298 235,051 20,852
INVESTMENT ACTIVITIES:
Acquisition and sale of property, plant and equipment.... -67,622 -181,255 -16,080
Profit on sale of discontinued operations................ 72,922 0 0
Acquisition of shares ................................... 669,392 0 0
Increase in deferred assets ............................. -6,331 -7,352 -652
Net resources applied to investing activities ................ 668,361 -188,607 -16,732
INCREASE IN CASH AND CASH EQUIVALENTS .......................... -285,500 -197,106 -17,486
CASH AND CASH EQUIVALENTS AT BEGINNING OF THE PERIOD............ 789,934 504,434 44,750
CASH & CASH EQUIVALENTS AT END OF THE PERIOD ...................$ 504,434$ 307,328US 27,264
* The exchange rate of 11.2723 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 JUNE 30, 2006
Thousands of Pesos Thousands of Dollars
2Q 2Q 2Q 2Q
2005 2006 Var 2005 2006 Var
NET SALES ...............................$ 1,162,085$ 1,358,720 17% 104,524 120,536 15%
COST OF SALES ........................... 975,442 1,105,816 13% 87,737 98,100 12%
Gross profit........................ 186,643 252,904 36% 16,787 22,436 34%
Selling and Administrative expenses 110,612 117,535 6% 9,949 10,427 5%
Operating income ................... 76,031 135,369 78% 6,838 12,009 76%
FINANCIAL EXPENSE:
Interest expense ........................ 126,144 165,670 31% 11,346 14,697 30%
Interest income ......................... -13,601 -10,224 -25% -1,223 -907 -26%
Exchange (gain) loss, net ............... -259,535 249,900 N/A -23,344 22,169 N/A
Gain on monetary position ............... -1,676 6,930 N/A -151 615 N/A
Total financial expense ............... -148,668 412,276 N/A -13,372 36,574 N/A
OTHER INCOME (EXPENSES):
Other income (expense), net ............. -63,678 76,597 N/A -5,728 6,795 N/A
Total other income (expense) .......... -63,678 76,597 N/A -5,728 6,795 N/A
Income (loss) before income and asset t 161,021 -200,310 N/A 14,482 -17,770 N/A
Provisions for income and asset taxes ... 3,220 4,572 42% 290 406 40%
Provision for deferred income taxes ..... 194,378 -57,358 N/A 17,483 -5,088 N/A
Net income after taxes ................ -36,577 -147,524 303% -3,291 -13,088 298%
Discontinued operations ................. -31,178 0 -100% -2,804 0 -100%
Loss (Gain) in subsidiaries ............. -37,261 -20,462 -45% -3,348 -1,816 -46%
Net income before minority interest......$ 31,862$ -127,062 N/A 2,861 -11,272 N/A
Minority interest...................... -1,983 -1,068 -46% -178 -95 -47%
Majority net income....................$ 33,845$ -125,994 N/A 3,039 -11,177 N/A
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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 JUNE 30, 2006
Thousands of Pesos Thousands of Dollars
Ac Ac Ac Ac
2005 2006 Var 2005 2006 Var
NET SALES ...............................$ 2,287,840$ 2,498,424 9% 202,129$ 225,389 12%
COST OF SALES ........................... 1,936,816 2,020,687 4% 171,090 182,268 7%
Gross profit........................ 351,024 477,737 36% 31,039 43,121 39%
Selling and Administrative expenses 216,168 224,729 4% 19,101 20,289 6%
Operating income ................... 134,856 253,008 88% 11,938 22,832 91%
FINANCIAL EXPENSE:
Interest expense ........................ 263,350 324,811 23% 23,242 29,338 26%
Interest income ......................... -377,606 -24,117 -94% -32,783 -2,185 -93%
Exchange (gain) loss, net ............... -235,189 418,990 N/A -21,233 37,726 N/A
Gain on monetary position ............... -60,015 -45,889 -24% -5,209 -4,244 -19%
Total financial expense ............... -409,460 673,795 N/A -35,983 60,635 N/A
OTHER INCOME (EXPENSES):
Other income (expense), net ............. -125,146 129,344 N/A -11,057 11,648 N/A
Total other income (expense) .......... -125,146 129,344 N/A -11,057 11,648 N/A
Income (loss) before income and asset t 419,170 -291,443 N/A 36,864 -26,155 N/A
Provisions for income and asset taxes ... 3,220 5,776 79% 290 517 78%
Provision for deferred income taxes ..... 283,452 -57,480 N/A 25,206 -5,099 N/A
Net income after taxes ................ 132,498 -239,739 N/A 11,368 -21,573 N/A
Discontinued operations ................. -43,499 0 -100% -3,872 0 -100%
Loss (Gain) in subsidiaries ............. 218,272 -2,340 N/A 18,830 -121 N/A
Net income before minority interest......$ -42,275$ -237,399 462% -3,590$ -21,452 498%
Minority interest...................... -3,147 -1,144 -64% -279 -102 -63%
Majority net income....................$ -39,128$ -236,255 504% -3,311$ -21,350 545%
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 JUNE 30st, 2006 WAS $11.2723.
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 JUNE 30st, 2006.
FIXED AND VARIABLE EQUITY COMPONENTS
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 JUNE 30st., 2006 AND 2005, THE SEGMENT INFORMATION IS PRESENTED
AS FOLLOWS:
PROPERTY
PLANT AND
TOTAL EQUIPMENT SEGMENT
2006 INCOME ACQUISITION ASSETS
------ --------- ------------ --------------
PACKAGING 2,230,618 7,798 30,119,802
PAPER 1,510,772 49,865 9,023,251
OTHERS 57,106 126,795 515,157
ELIMINATONS (1,300,072) (25,407,647)
---------- ------------ --------------
TOTAL 2,498,424 184,458 14,250,563
========== ============ ==============
PROPERTY
PLANT AND
TOTAL EQUIPMENT SEGMENT
2005 INCOME ACQUISITION ASSETS
------ --------- ------------ --------------
PACKAGING 2,167,959 28,240 21,961,779
PAPER 1,400,494 8,375 8,359,933
OTHERS 44,895 663 933,018
ELIMINATIONS (1,325,508) (17,614,419)
---------- ------------ --------------
TOTAL 2,287,840 37,278 13,640,311
========== ============ ==============
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: Aug 8, 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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