Grupo TMM Reports Third-Quarter and First Nine-Month 2004 Financial Results.MEXICO CITY Mexico City Spanish Ciudad de México City (pop., 2000: city, 8,605,239; 2003 metro. area est., 18,660,000), capital of Mexico. Located at an elevation of 7,350 ft (2,240 m), it is officially coterminous with the Federal District, which occupies 571 sq mi -- Grupo TMM TMM The ISO 4217 currency code for the Turkmenistan Manet. (NYSE NYSE See: New York Stock Exchange :TMM). --Improved revenues at TFM TFM Traffic Flow Management TFM TeX Font Metrics TFM Transportacion Ferroviaria Mexicana TFM Trusted Facility Manual TFM Testicular Feminization TFM Total Facility Management TFM Tentative Final Monograph TFM Transaction Flow Manager TFM Thermally Fused Melamine , Specialized spe·cial·ize v. spe·cial·ized, spe·cial·iz·ing, spe·cial·iz·es v.intr. 1. To pursue a special activity, occupation, or field of study. 2. Maritime INTEREST, MARITIME. By maritime interest is understood the profit of money lent on bottomry or respondentia, which is allowed to be greater than simple interest because the capital of the lender is put in jeopardy. , Ports and Logistics --Operating income impacted by 39 percent rise in fuel costs and continuing sluggish automobile sector Grupo TMM, S.A. (NYSE:TMM)(BMV BMV Bolsa Mexicana de Valores BMV Bureau of Motor Vehicles BMV Bundesministerium für Verkehr (German: Federal Ministry of Transport) BMV Below Market Value BMV Brome Mosaic Virus BMV Bedside Medication Verification :TMM A; "TMM"), a Mexican Mexican named after or originating in Mexico. Mexican axolotl see ambystomamexicanum. Mexican beaded lizard (Heloderma horridum multi-modal See multimodal. transportation and logistics Company and owner of the controlling interest controlling interest The ownership of a quantity of outstanding corporate stock sufficient to control the actions of the firm. Controlling interest often involves ownership of significantly less than 51% of a firm's outstanding stock because many owners fail in Mexico's busiest railway, TFM, reported revenues from consolidated operations of $236.8 million for the third quarter of 2004, compared to $230.1 million for the same period of 2003. Improved revenues were reported at TFM (without Tex Mex TEX MEX Texas Mexican Railway ), Specialized Maritime, Ports and Logistics operations. Affected primarily by a 39 percent increase in fuel costs during the third quarter, consolidated operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. decreased $1.8 million, from $35.7 million in 2003 to $33.9 million in 2004. Net profit for the quarter was $13.5 million, or $0.24 per share, compared to a loss of $29.9 million, or $0.53 per share, for the prior-year period. Net results for the 2004 third quarter included a $17.0 million gain from the recognition of a recent tax ruling in favor of upon the side of; favorable to; for the advantage of. See also: favor the Company. Net results in the 2003 third quarter included one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. charges totaling $10.9 million and included employee severance The act of dividing, or the state of being divided. The term severance has unique meanings in different branches of the law. Courts use the term in both civil and criminal litigation in two ways: first, when dividing a lawsuit into two or more parts, and second, when costs, amortization of warrants and a net book loss from the sale of a vessel. Third-quarter 2004 selling, general and administrative (SG&A) costs, including restructuring charges restructuring charge The expense of reorganizing a company's operations. A restructuring charge is an infrequent expense that generally results from asset writedowns or facility closings. , decreased $1.2 million, or 13.8 percent, compared to the same period of last year and reflected employee overhead reductions and cost savings associated with the completion of the Company's debt restructuring Debt Restructuring A method used by companies with outstanding debt obligations to alter the terms of the debt agreements in order to achieve some advantage. Notes: . For the first nine months of 2004, revenues from consolidated operations were $696.9 million, compared to $678.0 million for the same period of 2003. Improved revenues were reported at all divisions. Consolidated operating income in the period improved $2.1 million, from $97.3 million in 2003 to $99.4 million in 2004, in spite of in opposition to all efforts of; in defiance or contempt of; notwithstanding. See also: Spite 25 percent higher fuel costs in the 2004 period. Net results for the 2004 first nine months improved $10.1 million from the year-earlier period. As noted above however, results for the first nine months of 2004 included a favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. tax ruling and for the 2003 period included one-time charges totaling $10.9 million. SG&A costs, including restructuring charges, in the first nine months of 2004 decreased $4.2 million, or 14.8 percent, over the prior-year period. As anticipated, the Company continued to benefit from improving trade growth on the NAFTA NAFTA in full North American Free Trade Agreement Trade pact signed by Canada, the U.S., and Mexico in 1992, which took effect in 1994. Inspired by the success of the European Community in reducing trade barriers among its members, NAFTA created the world's corridor. During 2004, Mexican trade in the manufacturing sector grew 15.7 percent in the third quarter and 13.5 percent during the first nine months compared to the prior year. This growth was reflected in an increase in the Company's volume and revenues, beginning in March, compared to last year. The Company believes that trade growth should continue to improve in the remainder of 2004. At TFM (without Tex Mex), 2004 third-quarter results reflected continued growth and improvement in NAFTA. Overall revenues and volume grew 5.1 percent and 12.0 percent in the third quarter, and 3.0 percent and 5.3 percent in the first nine months, respectively, over the prior-year periods. Third quarter 2003 revenues included a one-time cancellation of an incentive that did not require payment. Third-quarter and year-to-date Year-to-date (YTD) The period beginning at the start of the calendar year up to the current date. revenues were negatively impacted approximately $10.5 million as a result of a decline in automobile segment revenues and by year-to-date peso devaluations totaling 4.5 percent. The following chart reflects the rail division's segment results, comparing the third quarter and first nine months of 2004 with the same periods of 2003:
Third-Quarter Percent Year-To-Date Percent
Revenues Change Revenues Change
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Chemical 1.5% 13.1%
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Industrial 13.7% 4.6%
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Cement, Metals and Minerals 13.9% 9.7%
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Agroindustrial 8.9% 2.2%
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Intermodal 5.6% -5.8%
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Automobile -10.6% -8.5%
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Operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. at TFM decreased $2.1 million in the quarter, impacted by a $5.6 million increase in fuel costs. Fuel costs increased approximately 39 percent in the third quarter and 25 percent year-to-date over the prior-year periods. TFM's operating ratio Operating Ratio A ratio that shows the efficiency of management by comparing operating expense to net sales: (without Tex Mex) was 80.4 percent for the quarter. As of September September: see month. 30, TFM's outstanding debt balance declined $58.7 million compared to December December: see month. 31, 2003. On October October: see month. 22, Standard & Poor's removed TFM from creditwatch and maintained its long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. credit rating at B. At Specialized Maritime, which provides international and coastal maritime transportation services for liquid cargoes, harbor towing, and logistical lo·gis·tic also lo·gis·ti·cal adj. 1. Of or relating to symbolic logic. 2. Of or relating to logistics. [Medieval Latin logisticus, of calculation support to the oil production and exploration sectors, revenues improved 15.4 percent in the third quarter and 13.3 percent in the first nine months of 2004, as compared to both periods in 2003. As a consequence, operating results increased $0.8 million in the third quarter and $6.1 million in the first nine months of 2004 as compared to the prior year. Results were positively impacted by increased supply ship and product tanker rates and by significant declines in SG&A costs throughout the year. Increased costs, primarily in parcel tankers related to recent hurricane activity in the Gulf of Mexico Noun 1. Gulf of Mexico - an arm of the Atlantic to the south of the United States and to the east of Mexico Golfo de Mexico Atlantic, Atlantic Ocean - the 2nd largest ocean; separates North and South America on the west from Europe and Africa on the east , negatively impacted quarterly results. In the Ports and Terminals division, revenues and operating profit were affected by normal seasonal trends. Fourth-quarter 2004 results are expected to incorporate improved cruise ship activity consistent with the first and second quarters of this year. This division represents approximately three percent of the Company's total revenues. In the Logistics division, all key factors for performance improved in spite of the continued effects of the struggling automobile sector, which impacted terminals, auto services yards, trucking and intermodal in·ter·mod·al adj. Relating to transportation by more than one means of conveyance, as by truck and rail: intermodal transport. services throughout the country. The Logistics division has entered into an important comprehensive supply chain management agreement with Ford Motor Company, excluding Land Rover See LANRover. and Jaguar. The contract allows TFM and TMM Logistics to manage integrated domestic distribution of all finished vehicles, including imports to dealers, mixing centers, exports and local Mexican moves. This agreement is anticipated to produce Company revenues of $25 to $27 million per year. In the trucking division, operating cost reductions should be achieved in future periods from the truck fleet renewal program currently underway. Javier Javier (also Xabier) may refer to:
Segovia, city (1990 pop. 55,188), capital of Segovia prov., central Spain, in Castile-León, on the Eresma River. It stands on a rocky hill (3,297 ft/1,005 m high) crowned by the cathedral and the turreted alcazar (fortified , president of Grupo TMM, said, "We accomplished several important steps in the third quarter. I believe we have much to be proud of. While the restructuring restructuring - The transformation from one representation form to another at the same relative abstraction level, while preserving the subject system's external behaviour (functionality and semantics). of TMM's debt was challenging, the successful completion of the bond exchange at the levels we achieved allowed us to conclude our restructuring outside of a court proceeding and to give TMM the financial flexibility needed to move forward with a new strategy for increasing value and providing healthy returns to our investors. "Additionally during the quarter, TMM and Kansas City Kansas City, two adjacent cities of the same name, one (1990 pop. 149,767), seat of Wyandotte co., NE Kansas (inc. 1859), the other (1990 pop. 435,146), Clay, Jackson, and Platte counties, NW Mo. (inc. 1850). Southern completed important strides in our efforts to complete a transaction concerning TFM. The sale of 51 percent of TFM's interest in Mexrail to Kansas City Southern will make our TFM partner a stronger U.S. rail carrier to the border once the transaction is approved. The sale allows three north-of-the-border carriers to be more competitive to and from the Laredo Laredo (lərā`dō), city (1990 pop. 122,899), seat of Webb co., S Tex., on the Rio Grande; founded 1755, inc. 1852. It is a port of entry on the U.S.-Mexican border, with a thriving export-import trade and a tourist industry. Bridge. "Furthermore," Segovia continued, "the Mexican Foreign Investment Commission authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: Kansas City Southern's proposed acquisition of TMM's interest in TFM. Combined with the Mexican Federal Competition Commission's extension of Kansas City Southern's approval to purchase TMM's interest in TFM for an additional 180 days, all Mexican regulatory barriers have been removed. The partners have also agreed to extend the current deadline under the April 20, 2003, Acquisition Agreement until June June: see month. 15, 2005, to provide additional time to complete a transaction. The Company continues to seek an equitable equitable adj. 1) just, based on fairness and not legal technicalities. 2) refers to positive remedies (orders to do something, not money damages) employed by the courts to solve disputes or give relief. (See: equity) EQUITABLE. transaction process as expeditiously ex·pe·di·tious adj. Acting or done with speed and efficiency. See Synonyms at fast1. ex as possible. "Finally, results across all divisions improved in the quarter and nine-month periods despite the continued sluggishness of the automobile sector and the unprecedented rise in fuel costs. Improving trade growth along the NAFTA corridor and new contracts at Logistics, Ports and Specialized Maritime translated into strong revenues and volume growth at TMM. Stronger operations and reduced expenses are expected to continue across all business units for the remainder of 2004 and into 2005, providing enhanced value for our shareholders." DIVISIONAL RESULTS (Under Continuing Operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the ) (All numbers in thousands)
Third Quarter 2004
Railroad Ports Specialized Logistics Others Total
Maritime
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Revenues 174,492 7,606 33,130 25,014 (3,401) 236,841
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Costs 141,192 7,231 28,488 21,769 (3,409) 195,271
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Gross Result 33,300 375 4,642 3,245 8 41,570
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Gross Margin 19.1% 4.9% 14.0% 13.0% 0.2% 17.6%
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SG & A (Estimate) 430 866 1,201 1,386 3,798 7,681
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Operating Results 32,870 (491) 3,441 1,859 (3,790) 33,889
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Operating Margin 18.8% (6.5%) 10.4% 7.4%(111.4%) 14.3%
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(a)Third Quarter 2003
Railroad Ports Specialized Logistics Others Total
Maritime
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Revenues 178,246 4,934 28,718 23,070 (4,895) 230,073
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Costs 141,147 4,150 23,940 21,216 (5,030) 185,423
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Gross Result 37,099 784 4,778 1,854 135 44,650
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Gross Margin 20.8% 15.9% 16.6% 8.0% 2.8% 19.4%
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SG & A
(Estimate) 1,119 664 2,100 1,480 3,552 8,915
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Operating
Results 35,980 120 2,678 374 (3,417) 35,735
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Operating
Margin 20.2% 2.4% 9.3% 1.6% (69.8%) 15.5%
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First Nine Months 2004
Railroad Ports Specialized Logistics Others Total
Maritime
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Revenues 526,915 18,998 95,949 69,121 (14,038) 696,945
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Costs 428,618 16,902 81,836 60,156 (13,999) 573,513
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Gross Result 98,297 2,096 14,113 8,965 (39) 123,432
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Gross Margin 18.7% 11.0% 14.7% 13.0% (0.3%) 17.7%
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SG & A
(Estimate) 2,348 2,559 3,271 3,977 11,855 24,010
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Operating
Results 95,949 (463) 10,842 4,988 (11,894) 99,422
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Operating
Margin 18.2% (2.4%) 11.3% 7.2% (84.7%) 14.3%
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(a)First Nine Months 2003
Railroad Ports Specialized Logistics Others Total
Maritime
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Revenues 523,365 15,990 84,661 67,245 (13,236) 678,025
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Costs 420,263 12,887 72,547 60,204 (13,390) 552,511
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Gross Result 103,102 3,103 12,114 7,041 154 125,514
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Gross Margin 19.7% 19.4% 14.3% 10.5% 1.2% 18.5%
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SG & A
(Estimate) 3,200 2,162 7,346 3,249 12,231 28,189
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Operating
Results 99,902 941 4,768 3,792 (12,077) 97,325
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Operating
Margin 19.1% 5.9% 5.6% 5.6% (91.2%) 14.4%
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(a)Discontinued dis·con·tin·ue v. dis·con·tin·ued, dis·con·tin·u·ing, dis·con·tin·ues v.tr. 1. To stop doing or providing (something); end or abandon: and restated operations DEBT RESTRUCTURING In August, the Company announced that all of the conditions of its debt exchange offer and consent solicitation Consent Solicitation A solicitation by one party to the stakeholders of a particular security for the consent of a material change. Notes: Should the majority of stakeholders provide valid consent prior to the consent expiry date, the issuer may then follow through with for its 9 1/2 percent Senior Notes due 2003 and its 10 1/4 percent Senior Notes due 2006 were satisfied, supported by 96.5 percent of the 2003 notes and by 98.6 percent of the 2006 notes. The Company accepted all of the tendered 2003 notes and 2006 notes for exchange and has issued its new Senior Notes due 2007 in exchange for the tendered notes. The Company additionally received sufficient consents from holders of the 2006 notes to effect the proposed amendment to the indenture An agreement declaring the benefits and obligations of two or more parties, often applicable in the context of Bankruptcy and bond trading. The term indenture primarily describes secured contracts and has several applications in U.S. law. governing gov·ern v. gov·erned, gov·ern·ing, gov·erns v.tr. 1. To make and administer the public policy and affairs of; exercise sovereign authority in. 2. the 2006 notes, which removed substantially all of the restrictive covenants Restrictive covenants Provisions that place constraints on the operations of borrowers, such as restrictions on working capital, fixed assets, future borrowing, and payment of dividends. of that indenture. Untendered 2003 notes were redeemed re·deem tr.v. re·deemed, re·deem·ing, re·deems 1. To recover ownership of by paying a specified sum. 2. To pay off (a promissory note, for example). 3. for cash on the closing date of the restructuring. STATUS OF VALUE ADDED TAX value added tax n (BRIT) → impuesto sobre el valor añadido or agregado (LAM) value added tax n (Brit (VAT VAT See: Value-added tax VAT See value-added tax (VAT). ) LAWSUIT lawsuit: see procedure; tort. AND MEXICAN GOVERNMENT PUT VAT LAWSUIT On January January: see month. 19, 2004, the Mexican Treasury delivered to TFM a VAT Certificate representing the historical claim amount of approximately $195 million as of that date, but excluding additional amounts due to TFM from the effects of inflation and interest accrued ac·crue v. ac·crued, ac·cru·ing, ac·crues v.intr. 1. To come to one as a gain, addition, or increment: interest accruing in my savings account. 2. on the original claim amount. The Company immediately filed with the Fiscal Court an appeal requesting the inclusion of inflation and interest in the amount due. On January 20, 2004, the Mexican Fiscal Administration Service placed an attachment to the VAT Certificate, stating that the documents that support the value of the VAT Certificate did not comply with applicable tax requirements. The Fiscal Court voted against TFM's claim. The Company then filed in the Fourth Circuit Court an appeal to overrule The refusal by a judge to sustain an objection set forth by an attorney during a trial, such as an objection to a particular question posed to a witness. To make void, annul, supersede, or reject through a subsequent decision or action. the Fiscal Court decision consistent with previous high court rulings and is awaiting the high court's ruling in this matter. Additionally, the Company has requested a total review of the action taken by the Fiscal Court by a federal judge of the Seventh District Court. The Company believes that TFM's claim to have the VAT certificate updated for interest and inflation accruals Accruals Accounts on a balance sheet that represent liabilities and non-cash-based assets used in accrual-based accounting. These accounts include, among many others, accounts payable, accounts receivable, goodwill, future tax liability and future interest expense. will be upheld by Mexico's legal system. Details on the VAT litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. can be found in previous Company filings and quarterly reports. GRUPO TFM PUT As previously stated Grupo TFM also asked for and received from a federal judge an injunction injunction, in law, order of a court directing a party to perform a certain act or to refrain from an act or acts. The injunction, which developed as the main remedy in equity, is used especially where money damages would not satisfy a plaintiff's claim, or to , which prevented the government from exercising its put option. The ability of the Mexican government to exercise its put option has been suspended sus·pend v. sus·pend·ed, sus·pend·ing, sus·pends v.tr. 1. To bar for a period from a privilege, office, or position, usually as a punishment: suspend a student from school. indefinitely in·def·i·nite adj. Not definite, especially: a. Unclear; vague. b. Lacking precise limits: an indefinite leave of absence. c. until the put lawsuit is resolved. Grupo TFM acknowledged its intention to acquire the equity interest that the Mexican government holds in TFM and has informed the government of its intention to comply, once the pending steps from the original Agreement are completed, which should occur after the VAT claim has been reimbursed to TFM to determine the real value of the remaining shares. SALE OF MEXRAIL The Company announced in August the sale of TFM's shares representing a 51 percent ownership of Mexrail for approximately $32.7 million (before taxes) to Kansas City Southern (KCS KCS keratoconjunctivitis sicca. ). The sale was made on terms substantially similar to those previously agreed to by the parties in April 2003. The Mexrail shares were placed in a voting trust A type of agreement by which two or more individuals who own corporate stock that carries voting rights transfer their shares to another party for voting purposes, so as to control corporate affairs. pending regulatory approval by the Surface Transportation Board (STB See set-top box. STB - set-top box ) of KCS's common control of Tex-Mex, KCSR KCSR Kansas City Southern Railway Company KCSR Kansas City Street Racing , and the Gateway Eastern Railway The Gateway Eastern Railway (AAR reporting marks GERC) was a Class II railroad that operated as a subsidiary of its parent, the Gateway Western Railway, with 14.79 miles of track, all within the state of Illinois. Company. Under the terms of the sale, KCS has an exclusive option to purchase the remaining 49 percent of Mexrail between now and no later than October 31, 2005. KCS has agreed to comply with all prior STB rulings concerning the operation of the international rail bridge under the terms of applicable bridge agreements and protocols. MEXICAN FOREIGN INVESTMENT COMMISSION On September 15 the Mexican Foreign Investment Commission (FIC FIC First International Computer FIC Fogarty International Center (John E. Fogarty International Center for Advanced Study in the Health Sciences; National Institutes of Health) FIC Fellowship for Intentional Community ) delivered a notice to deny Kansas City Southern's (KCS) application for authorization The right or permission to use a system resource; the process of granting access. See access control. of KCS' proposed acquisition of TMM's interest in TFM, S.A. de C.V. The approval of the FIC is necessary for a foreign Company to become a majority owner of a Mexican-based railway Company. KCS and TMM immediately sought reconsideration re·con·sid·er v. re·con·sid·ered, re·con·sid·er·ing, re·con·sid·ers v.tr. 1. To consider again, especially with intent to alter or modify a previous decision. 2. of the decision, and as a result on October 6, the FIC authorized KCS' acquisition of the controlling interest in TFM. MEXICAN FEDERAL COMPETITION COMMISSION On October 7, the Mexican Federal Competition Commission ("FCC (1) (Federal Communications Commission, Washington, DC, www.fcc.gov) The U.S. government agency that regulates interstate and international communications including wire, cable, radio, TV and satellite. The FCC was created under the U.S. ") extended its approval for Kansas City Southern to purchase TMM's interest in TFM for an additional 180 days. The FCC originally authorized the purchase in a ruling dated May 19, 2003, and the new ruling extends that authorization to April 5, 2005. TMM's management will discuss earnings and provide a corporate update on Friday Friday: see Sabbath; week. Friday young Indian rescued by Crusoe and kept as servant and companion. [Br. Lit.: Robinson Crusoe] See : Servant , October 29 at 11:00 a.m. Eastern Time. To participate in the call, please dial 800-257-2101 (domestic) or 303-205-0044 (international) at least five minutes prior to the start of the call. A simultaneous Webcast of the meeting will be available at http://www.actioncast.acttel.com, Event ID: 25304. The Company suggests that Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the participants access the site at least five minutes prior to the start of the conference call to download To receive a file transmitted over a network. In any communications session, "download" means receive, and "upload" means send. The download/upload often implies a big/little scenario, in which data is being downloaded from the "big" server into the "little" user's computer. and install any software required to run the presentation. A replay of the conference call will be available through November November: see month. 5 at 11:59 p.m. EDT EDT abbr. Eastern Daylight Time EDT Eastern Daylight Time EDT n abbr (US) (= Eastern Daylight Time) → hora de verano de Nueva York EDT , by dialing 800-405-2236 or 303-590-3000, and entering conference ID 11011935. On the Internet a replay will be available for 30 days at http://www.actioncast.acttel.com, Event ID: 25304. Headquartered in Mexico City, TMM is a Latin American multimodal Two or more modes of operation. The term is used to refer to a myriad of functions and conditions in which two or more different methods, processes or forms of delivery are used. On the Web, it refers to asking for something one way and receiving the answer another; for example requesting transportation Company. Through its branch offices and network of subsidiary companies, TMM provides a dynamic combination of ocean and land transportation services. TMM also has a significant interest in Transportacion Ferroviaria Mexicana (TFM), which operates Mexico's Northeast railway and carries over 40 percent of the country's rail cargo. Visit TMM's web site at www.grupotmm.com and TFM's web site at www.tfm.com.mx. Both sites offer Spanish/English language options. Included in this press release are certain forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. within the meaning of Section 27A of the Securities Act of 1933, as amended a·mend v. a·mend·ed, a·mend·ing, a·mends v.tr. 1. To change for the better; improve: amended the earlier proposal so as to make it more comprehensive. 2. , and Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements speak only as of the date they are made and are based on the beliefs of the Company's management as well as on assumptions made. Actual results could differ materially from those included in such forward-looking statements. Readers are cautioned that all forward-looking statements involve risks and uncertainty. The following factors could cause actual results to differ materially from such forward-looking statements: global, US and Mexican economic and social conditions; the effect of the North American Free Trade Agreement North American Free Trade Agreement (NAFTA), accord establishing a free-trade zone in North America; it was signed in 1992 by Canada, Mexico, and the United States and took effect on Jan. 1, 1994. on the level of US-Mexico trade; the condition of the world shipping market; the success of the Company's investment in TFM, S.A. de C.V. and other new businesses; risks associated with the Company's reorganization and restructuring; the outcome of pending litigation and arbitration arbitration Process of resolving a dispute or a grievance outside a court system by presenting it for decision to an impartial third party. Both sides in the dispute usually must agree in advance to the choice of arbitrator and certify that they will abide by the with Kansas City Southern; the timing of the receipt of any amounts in respect of TFM's pending claim for a refund TO REFUND. To pay back by the party who has received it, to the party who has paid it, money which ought not to have been paid. 2. On a deficiency of assets, executors and administrators cum testamento annexo, are entitled to have refunded to them legacies of certain value added taxes; the outcome of pending litigation relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the obligation to repurchase re·pur·chase tr.v. re·pur·chased, re·pur·chas·ing, re·pur·chas·es To buy (something) again. n. The act of buying something that one previously sold or owned. Noun 1. shares of TFM owned by the Mexican Government and the ability of the Company or its subsidiaries to fund any such purchase if required to do so; the ability of the Company to reduce corporate overhead costs overhead costs see fixed costs. ; the ability of management to manage growth and successfully compete in new businesses; and the ability of the Company to complete the proposed restructuring or otherwise repay, restructure or refinance Refinance 1. When a business or person revises their payment schedule for repaying debt. 2. Replacing an older loan with a new loan offering better terms. Notes: When a business refinances they typically extend the maturity date. its indebtedness INDEBTEDNESS. The state, of being in debt, without regard to the ability or inability of the party to pay the same. See 1 Story, Eq. 343; 2 Hill. Ab. 421. 2. . These risk factors and additional information are included in the Company's reports on Form 6-K and 20-F on file with the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. Securities and Exchange Commission. Financial tables to follow....
Grupo TMM, S.A. and subsidiaries
(a) Consolidated Statement of Income
- millions of dollars -
Three months ended Nine months ended
September 30, September 30,
2004 2003 2004 2003
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Revenue from freight and
services 236.841 230.073 696.945 678.025
Cost of freight and
services (172.678) (162.406) (504.160) (483.265)
Depreciation of vessels
and operating equipment (22.593) (23.017) (69.353) (69.246)
41.570 44.650 123.432 125.514
Administrative expenses (7.415) (8.349) (23.200) (25.411)
Corporate restructuring
expenses (0.266) (0.566) (0.810) (2.778)
Operating Income 33.889 35.735 99.422 97.325
======================================================================
Financial (expenses)
income - Net (47.679) (39.691) (132.618) (125.761)
Exchange gain (loss) - Net 2.404 (8.079) (1.798) (12.647)
(45.275) (47.770) (134.416) (138.408)
Other (expenses) income - Net 15.543 (19.550) 12.598 24.983
Gain (loss) before taxes 4.157 (31.585) (22.396) (16.100)
======================================================================
Benefit (provision) for
taxes 22.808 (18.436) 25.282 (35.792)
Gain (loss) before
minority interest 26.965 (50.021) 2.886 (51.892)
======================================================================
Minority interest (13.445) 20.091 (13.171) 31.483
Net income (loss) for the
period 13.520 (29.930) (10.285) (20.409)
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Weighted average outstanding shares
(millions) 56.963 56.963 56.963 56.963
Income (loss) earnings per
share (dollars / share) 0.24 (0.53) (0.18) (0.36)
Outstanding shares at end
of period (millions) 56.963 56.963 56.963 56.963
Income (loss) earnings per
share (dollars / share) 0.24 (0.53) (0.18) (0.36)
----------------------------------------------------------------------
(a) Prepared in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with International Financial Reporting Standards International Financial Reporting Standards (IFRS) are standards and interpretations adopted by the International Accounting Standards Board (IASB). Many of the standards forming part of IFRS are known by the older name of International Accounting Standards (IAS). . Note: In accordance with International Accounting Standards # 35 (IAS See iPlanet Application Server. 1. (computer) IAS - The first modern computer. It had main registers, processing circuits, information paths within the central processing unit, and used Von Neumann's fetch-execute cycle. 35) "Discontinuing Operations" Grupo TMM, S.A. shows the effect of the applications of the Company's Financial Statements for year 2003.
Grupo TMM, S.A. and subsidiaries
(a) Consolidated Balance Sheet
- millions of dollars -
September December 31,
30,
2004 2003
----------------------------------------------------------------------
Current assets:
-------------------------------------------
Cash and cash equivalents 59.963 74.627
Accounts receivable
Accounts receivable - Net 145.901 138.839
Other accounts receivable 159.967 130.222
Prepaid expenses and others current
assets 55.728 36.435
Total current assets 421.559 380.123
======================================================================
Property, machinery and equipment - Net 1,781.795 1,883.006
======================================================================
Other assets 100.092 68.609
======================================================================
Deferred taxes 185.898 146.011
======================================================================
Total assets 2,489.344 2,477.749
----------------------------------------------------------------------
Current liabilities:
-------------------------------------------
Bank loans and current maturities of long
term liabilities 66.733 566.947
Suppliers 83.425 99.923
Other accounts payable and accrued expenses 216.728 210.294
Total current liabilities 366.886 877.164
======================================================================
Long-term liabilities:
-------------------------------------------
Bank loans and other obligations 1,283.956 748.214
Other long-term liabilities 104.222 120.979
Total long-term liabilities 1,388.178 869.193
======================================================================
Total liabilities 1,755.064 1,746.357
----------------------------------------------------------------------
Minority interest 691.376 678.204
======================================================================
Stockholders' equity
Common stock 121.158 121.158
Retained earnings (60.497) (50.213)
Initial accumulated translation loss (17.757) (17.757)
Total stockholder's equity 42.904 53.188
----------------------------------------------------------------------
Total liabilities and stockholders' equity 2,489.344 2,477.749
----------------------------------------------------------------------
(a) Prepared in accordance with International Financial Reporting Standards.
Grupo TMM, S.A. and subsidiaries
(a) Consolidated Statement of Cash Flow
- millions of dollars -
Three months ended Nine months ended
September 30, September 30,
2004 2003 2004 2003
----------------------------------------------------------------------
Cash flow from operation
activities:
--------------------------------
Net income (loss) for the period 13.520 (29.930) (10.285) (20.409)
Charges (credits) to income not
affecting resources:
Depreciation &
amortization 26.570 25.726 80.651 81.832
Minority interest 13.445 (20.091) 13.171 (31.483)
Deferred income taxes (24.085) 17.650 (40.651) 33.453
Other non-cash items (0.300) 7.881 1.649 (44.238)
Total non-cash items 15.630 31.166 54.820 39.564
Changes in assets &
liabilities 18.852 15.639 7.818 (0.238)
Total adjustments 34.482 46.805 62.638 39.326
Net cash provided by
operating activities 48.002 16.875 52.353 18.917
======================================================================
Cash flow from investing
activities:
--------------------------------
Proceeds from sales of assets
(net) 0.732 6.876 1.730 7.254
Payments for purchases of
assets (11.106) (16.420) (41.337) (53.675)
Sale of subsidiary, net of
cash sold 32.640
Proceeds from discontinued
business (net) 31.723 (32.000) 31.723 95.765
Dividends paid to minority
partners (8.000) (8.000)
Net cash provided (used in)
by investment activities 21.349 (49.544) (7.884) 73.984
======================================================================
Cash flow provided by financing
activities:
--------------------------------
Short-term borrowings (net) (35.374) (1.391) (43.937) (18.090)
Principal payments under
capital lease obligations (0.286) (0.396) (0.385) (0.811)
(Repurchase) sale of accounts
receivable (net) (10.423) 4.593 3.670 (32.719)
Repayment of long-term debt (17.986) (18.534) (18.481) (76.029)
Proceeds from issuance of
long-term debt 30.000 30.000
(Paid) Proceeds from
convertible notes (13.295)
Net cash (used in) provided
by financing activities (64.069) 14.272 (59.133) (110.944)
======================================================================
Net increase (decrease) in
cash 5.282 (18.397) (14.664) (18.043)
Cash and cash equivalents at
beginning of the period 54.681 62.209 74.627 61.855
Cash and cash equivalents at
end of the period 59.963 43.812 59.963 43.812
----------------------------------------------------------------------
(a) Prepared in accordance with International Financial Reporting Standards. Note: In accordance with International Accounting Standards # 35 (IAS 35) "Discontinuing Operations" Grupo TMM, S.A. shows the effect of the applications of the Company's Financial Statements for year 2003.
Grupo TMM, S.A. and subsidiaries
Statement of Income (without Railroad)
- millions of dollars -
Three months ended Nine months ended
September 30, September 30,
2004 2003 2004 2003
----------------------------------------------------------------------
Revenue from freight and
services 65.469 56.732 183.220 167.908
Cost of freight and services (56.101) (47.502) (153.969) (139.842)
Depreciation of vessels and
operating equipment (1.101) (1.681) (4.117) (5.655)
8.267 7.549 25.134 22.411
Administrative expenses (6.984) (7.229) (20.851) (22.211)
Corporate restructuring
expenses (0.266) (0.566) (0.810) (2.778)
Operating (loss) Income 1.017 (0.246) 3.473 (2.578)
======================================================================
Financial (expenses) income
- Net (19.519) (11.905) (48.690) (42.357)
Exchange gain (loss) - Net 0.066 (0.910) 0.006 (2.527)
(19.453) (12.815) (48.684) (44.884)
Other (expenses) income -
Net 17.304 (3.548) 20.901 50.086
(Loss) gain before taxes (1.132) (16.609) (24.310) 2.624
======================================================================
Benefit for taxes 7.414 0.459 9.745 1.988
Gain (loss) gain before
minority interest 6.282 (16.150) (14.565) 4.612
======================================================================
Minority interest (1.135) (0.012) (2.731) (1.941)
Net (loss) income before
results for investment in TFM 5.147 (16.162) (17.296) 2.671
======================================================================
Interest in TFM 8.373 (13.768) 7.011 (23.080)
Net income (loss) for the
period 13.520 (29.930) (10.285) (20.409)
----------------------------------------------------------------------
Weighted average outstanding
shares (millions) 56.963 56.963 56.963 56.963
Income (loss) earnings per
share (dollars / share) 0.24 (0.53) (0.18) (0.36)
Outstanding shares at end of
period (millions) 56.963 56.963 56.963 56.963
Income (loss) earnings per
share (dollars / share) 0.24 (0.53) (0.18) (0.36)
----------------------------------------------------------------------
(a) Prepared in accordance with International Financial Reporting
Standards.
Note: In accordance with International Accounting Standards # 35 (IAS
35) "Discontinuing Operations" Grupo TMM, S.A. shows the effect of the
applications of the Company's Financial Statements for year 2003.
Grupo TMM, S.A. and subsidiaries
(a) Balance Sheet (without Railroad)
- millions of dollars -
September 30, December 31,
2004 2003
----------------------------------------------------------------------
Current assets:
-------------------------------------
Cash and cash equivalents 48.175 71.030
Accounts receivable
Accounts receivable - Net 40.329 33.105
Other accounts receivable 76.244 44.649
Prepaid expenses and others
current assets 8.054 6.592
Total current assets 172.802 155.376
======================================================================
Property, machinery and equipment -
Net 77.693 76.358
======================================================================
Investment in GTFM 366.986 360.502
======================================================================
Other assets 37.543 35.618
======================================================================
Deferred taxes 83.354 67.201
======================================================================
Total assets 738.378 695.055
----------------------------------------------------------------------
Current liabilities:
-------------------------------------
Bank loans and current maturities of
long term liabilities 1.764 373.792
Suppliers 21.104 25.335
Other accounts payable and accrued
expenses 88.532 118.350
Total current liabilities 111.400 517.477
======================================================================
Long-term liabilities:
-------------------------------------
Bank loans and other obligations 467.729 1.470
Other long-term liabilities 77.949 87.255
Total long-term liabilities 545.678 88.725
======================================================================
Total liabilities 657.078 606.202
----------------------------------------------------------------------
Minority interest 38.396 35.665
======================================================================
Stockholders' equity
Common stock 121.158 121.158
Retained earnings (60.497) (50.213)
Initial accumulated translation
loss (17.757) (17.757)
Total stockholder's equity 42.904 53.188
----------------------------------------------------------------------
Total liabilities and stockholders'
equity 738.378 695.055
----------------------------------------------------------------------
(a) Prepared in accordance with International Financial Reporting Standards. Grupo TMM, S.A. and subsidiaries (a) Statement of Cash Flow (without Railroad railroad or railway, form of transportation most commonly consisting of steel rails, called tracks, on which freight cars, passenger cars, and other rolling stock are drawn by one locomotive or more. ) - millions of dollars -
Three months ended Nine months ended
September 30, September 30,
2004 2003 2004 2003
----------------------------------------------------------------------
Cash flow from operation
activities:
-------------------------------
Net income (loss) for the
period 11.520 (29.930) (10.285) (20.409)
Charges (credits) to income not
affecting resources:
Depreciation &
amortization 3.351 2.787 10.454 13.431
Interest in TFM (8.373) 13.768 (7.011) 23.080
Minority interest 1.135 0.012 2.731 1.941
Deferred income taxes (8.784) (1.245) (16.153) (4.327)
Other non-cash items 0.416 5.663 0.860 (48.845)
Total non-cash items (12.255) 20.985 (9.119) (14.720)
Changes in assets &
liabilities 6.355 (2.141) 1.278 (19.044)
Total adjustments (5.900) 18.844 (7.841) (33.764)
Net cash provided (used in)
by operating activities 5.620 (11.086) (18.126) (54.173)
======================================================================
Cash flow from investing
activities:
-------------------------------
Proceeds from sales of
assets (net) 0.662 6.791 1.352 6.929
Payments for purchases of
assets (1.995) (0.479) (8.393) (3.681)
Sale of subsidiary, net of
cash sold 0.640 128.405
Dividends paid to minority
partners (8.000) (8.000)
Net cash (used in) provided
by investment activities (1.333) (1.048) (7.041) 123.653
======================================================================
Cash flow provided by financing
activities:
-------------------------------
Short-term borrowings (net) (1.391) (0.300) (18.090)
Principal payments under
capital lease obligations (0.024) (0.396) (0.069) (0.811)
(Repurchase) sale of
accounts receivable (net) (4.998) 4.593 3.670 (32.719)
Repayment of long-term debt (0.494) (0.247) (0.989) (0.742)
(Paid) Proceeds from
convertible notes (13.295)
Net cash (used in) provided
by financing activities (5.516) 2.559 2.312 (65.657)
======================================================================
Net (decrease) increase in
cash (1.229) (9.575) (22.855) 3.823
Cash at beginning of period 49.404 45.005 71.030 31.607
Cash at end of period 48.175 35.430 48.175 35.430
----------------------------------------------------------------------
(a) Prepared in accordance with International Financial Reporting Standards. Note: In accordance with International Accounting Standards # 35 (IAS 35) "Discontinuing Operations" Grupo TMM, S.A. shows the effect of the applications of the Company's Financial Statements for year 2003. |
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