##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 20-F
 o
    
    REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
 OR
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE
FISCAL YEAR ENDED DECEMBER 31, 2006
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 OR
 o
    
    SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 Date of event requiring this shell company report
 FOR
THE TRANSITION PERIOD FROMTO
 COMMISSION FILE NUMBER 1-12610
 
 Grupo Televisa, S.A.B.
  N/A
 United Mexican States
 Av. Vasco de Quiroga No. 2000
Colonia Santa Fe
01210 Mexico, D.F.
Mexico
 
  Title of each class
    
    Name of each exchange on which registeredA Shares, without par value (A Shares)
    
    New York Stock Exchange (for listing purposes only)B Shares, without par value (B Shares)
    
    New York Stock Exchange (for listing purposes only)L Shares, without par value (L Shares)
    
    New York Stock Exchange (for listing purposes only)Dividend Preferred Shares, without par value (D Shares)
    
    New York Stock Exchange (for listing purposes only)Global Depositary Shares (GDSs), each representing 
five Ordinary Participation Certificates (Certificados 
de Participación Ordinarios)(CPOs)
    
    New York Stock ExchangeCPOs, each representing twenty-five A Shares, twenty-two 
B Shares thirty-five L Shares and thirty-five D Shares
    
    New York Stock Exchange (for listing purposes only)
     
 113,784,603,865  53,564,690,849  85,216,495,401  85,216,495,401
 þ o
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TABLE OF CONTENTS
 PART 1Item 1.Identity of Directors, Senior Management and Advisers
    
    
    3Item 2.Offer Statistics and Expected Timetable
    
    
    3Item 3.Key Information
    
    
    3Selected Financial Data
    
    
    3Dividends
    
    
    6Exchange Rate Information
    
    
    7Risk Factors
    
    
    7Forward-Looking Statements
    
    
    17Item 4.Information on the Company
    
    
    18History and Development of the Company
    
    
    18Capital Expenditures
    
    
    18Business Overview
    
    
    19Item 5.Operating and Financial Review and Prospects
    
    
    52Preparation of Financial Statements
    
    
    52Results of Operations
    
    
    52Item 6.Directors, Senior Management and Employees
    
    
    79Item 7.Major Stockholders and Related Party Transactions
    
    
    90Major Stockholders
    
    
    90Related Party Transactions
    
    
    92Item 8.Financial Information
    
    
    97Item 9.The Offer and Listing
    
    
    97Trading History of CPOs and GDSs
    
    
    97Trading on the Mexican Stock Exchange
    
    
    99Item 10.Additional Information
    
    
    103Mexican Securities Market Law
    
    
    103Bylaws
    
    
    104Enforceability of Civil Liabilities
    
    
    112Material Contracts
    
    
    113Legal Proceedings
    
    
    113New York Stock Exchange Corporate Governance Standards
    
    
    115Exchange Controls
    
    
    116Taxation
    
    
    116Documents on Display
    
    
    120Item 11.Quantitative and Qualitative Disclosures About Market Risk
    
    
    121Item 12.Description of Securities Other than Equity Securities
    
    
    124PART IIItem 13.Defaults, Dividend Arrearages and Delinquencies
    
    
    124Item 14.Material Modifications to the Rights of Security Holders and Use of Proceeds
    
    
    124Item 15.Controls and Procedures
    
    
    124Item 16A.Audit Committee Financial Expert
    
    
    125Item 16B.Code of Ethics
    
    
    125Item 16C.Principal Accountant Fees and Services
    
    
    125Item 16D.Exemptions from the Listing Standards for Audit Committees
    
    
    126Item 16E.Purchases of Equity Securities by the Issuer and Affiliated Purchasers
    
    
    127PART IIIItem 17.Financial Statements
    
    
    128Item 18.Financial Statements
    
    
    128Item 19.Exhibits
    
    
    128EX-1.1: ENGLISH TRANSLATION OF AMENDED AND RESTATED BYLAWSEX-2.9: TENTH SUPPLEMENTAL INDENTUREEX-8.1: LIST OF SUBSIDIARIESEX-12.1: CERTIFICATIONEX-12.2: CERTIFICATIONEX-13.1: CERTIFICATIONEX-13.2: CERTIFICATION
   2




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##### Table of Contents



Part I
 
 Item 1. Identity of Directors, Senior Management and Advisers
  
 Item 2. Offer Statistics and Expected Timetable
  
 Item 3. Key Information
 
 Selected Financial Data
   Normas de Información Financiera
   3




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##### Table of Contents



Year Ended December 31,2002
    
    2003
    
    2004
    
    2005
    
    2006
    
    2006(millions of Pesos in purchasing power as of December 31, 2006or millions of U.S. Dollars)(1)(Mexican GAAP/FRS)Income Statement Data:Net sales
    
    Ps.
    25,354
    
    
    Ps.
    26,650
    
    
    Ps.
    31,519
    
    
    Ps.
    33,798
    
    
    Ps.
    37,932
    
    
    
    U.S.$3,511Operating income
    
    
    5,469
    
    
    
    6,838
    
    
    
    9,201
    
    
    
    11,241
    
    
    
    13,749
    
    
    
    1,273Integral cost of financing, net(2)
    
    
    720
    
    
    
    695
    
    
    
    1,630
    
    
    
    1,854
    
    
    
    1,100
    
    
    
    102Restructuring and non-recurring charges(3)
    
    
    991
    
    
    
    743
    
    
    
    425
    
    
    
    239
    
    
    
    614
    
    
    
    57(Loss) income from continuing operations
    
    
    (463
    )
    
    
    4,003
    
    
    
    5,989
    
    
    
    8,028
    
    
    
    9,174
    
    
    
    849Income (loss) from discontinued operations
    
    
    1,250
    
    
    
    (73
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Cumulative effect of accounting change, net
    
    
    
    
    
    
    
    
    
    
    (1,098
    )
    
    
    (527
    )
    
    
    
    
    
    
    Net income
    
    
    868
    
    
    
    4,067
    
    
    
    4,641
    
    
    
    6,374
    
    
    
    8,586
    
    
    
    795(Loss) income from continuing operations per
CPO(4)
    
    
    (0.12
    )
    
    
    1.44
    
    
    
    1.97
    
    
    
    2.37
    
    
    
    2.96
    
    
    
    Net income per CPO(4)
    
    
    0.30
    
    
    
    1.41
    
    
    
    1.60
    
    
    
    2.19
    
    
    
    2.96
    
    
    
    Weighted-average number of shares outstanding
(in millions)(4)(5)
    
    
    353,906
    
    
    
    352,421
    
    
    
    345,206
    
    
    
    341,158
    
    
    
    339,776
    
    
    
    Cash dividend per CPO(4)
    
    
    
    
    
    
    0.22
    
    
    
    1.35
    
    
    
    1.44
    
    
    
    0.36
    
    
    
    Shares outstanding (in millions, at year end)(5)
    
    
    221,210
    
    
    
    218,840
    
    
    
    341,638
    
    
    
    339,941
    
    
    
    337,782
    
    
    
    (U.S. GAAP)(6)Income Statement Data:Net sales
    
    Ps.
    25,597
    
    
    Ps.
    26,650
    
    
    Ps.
    31,519
    
    
    Ps.
    33,798
    
    
    Ps.
    37,932
    
    
    
    U.S.$3,511Operating income
    
    
    3,542
    
    
    
    6,832
    
    
    
    8,429
    
    
    
    10,414
    
    
    
    13,558
    
    
    
    1,255Income from continuing operations
    
    
    119
    
    
    
    3,371
    
    
    
    4,526
    
    
    
    7,101
    
    
    
    8,007
    
    
    
    741Cumulative effect of accounting change, net
    
    
    (1,449
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net (loss) income
    
    
    (1,332
    )
    
    
    3,371
    
    
    
    4,526
    
    
    
    7,101
    
    
    
    8,007
    
    
    
    741Income from continuing operations per CPO(4)
    
    
    0.04
    
    
    
    1.17
    
    
    
    1.55
    
    
    
    2.43
    
    
    
    2.76
    
    
    
    Net (loss) income per CPO(4)
    
    
    (0.45
    )
    
    
    1.17
    
    
    
    1.55
    
    
    
    2.43
    
    
    
    2.76
    
    
    
    Weighted-average number of shares outstanding
(in millions)(4)(5)
    
    
    353,906
    
    
    
    352,421
    
    
    
    345,206
    
    
    
    341,158
    
    
    
    339,776
    
    
    
    Shares outstanding (in millions, at year end)(5)
    
    
    221,210
    
    
    
    218,840
    
    
    
    341,638
    
    
    
    339,941
    
    
    
    337,782
    
    
    
    (Mexican GAAP/FRS)Balance Sheet Data (end of year):Cash and temporary investments
    
    Ps.
    10,332
    
    
    Ps.
    13,870
    
    
    Ps.
    17,893
    
    
    Ps.
    15,377
    
    
    Ps.
    15,811
    
    
    
    U.S.$1,464Total assets
    
    
    66,343
    
    
    
    73,244
    
    
    
    79,481
    
    
    
    78,222
    
    
    
    83,030
    
    
    
    7,686Current portion of long-term debt and other
notes payable(7)
    
    
    1,457
    
    
    
    323
    
    
    
    3,545
    
    
    
    354
    
    
    
    986
    
    
    
    91Long-term debt, net of current portion(8)
    
    
    15,694
    
    
    
    16,630
    
    
    
    20,368
    
    
    
    18,872
    
    
    
    17,795
    
    
    
    1,647Customer deposits and advances
    
    
    13,820
    
    
    
    15,839
    
    
    
    16,454
    
    
    
    18,778
    
    
    
    17,162
    
    
    
    1,589Capital stock issued
    
    
    8,955
    
    
    
    9,283
    
    
    
    10,290
    
    
    
    10,290
    
    
    
    10,126
    
    
    
    937Total stockholders equity (including minority
interest)
    
    
    25,077
    
    
    
    31,132
    
    
    
    29,680
    
    
    
    31,074
    
    
    
    36,604
    
    
    
    3,388(U.S. GAAP)(6)Balance Sheet Data (end of year):Cash and cash equivalents
    
    Ps.
    10,059
    
    
    Ps.
    11,244
    
    
    Ps.
    17,103
    
    
    Ps.
    15,260
    
    
    Ps.
    14,901
    
    
    
    U.S. $1,379Total assets
    
    
    66,286
    
    
    
    76,530
    
    
    
    88,548
    
    
    
    85,510
    
    
    
    88,446
    
    
    
    8,188Current portion of long-term debt and other
notes payable(7)
    
    
    1,457
    
    
    
    323
    
    
    
    3,545
    
    
    
    354
    
    
    
    986
    
    
    
    91Long-term debt, net of current portion(8)
    
    
    15,694
    
    
    
    16,630
    
    
    
    20,368
    
    
    
    18,872
    
    
    
    17,795
    
    
    
    1,647Total stockholders equity (excluding minority
interest)
    
    
    20,765
    
    
    
    27,351
    
    
    
    28,113
    
    
    
    29,481
    
    
    
    34,469
    
    
    
    3,191(Mexican GAAP/FRS)Other Financial Information:Capital expenditures(9)
    
    Ps.
    1,665
    
    
    Ps.
    1,204
    
    
    Ps.
    2,094
    
    
    Ps.
    2,746
    
    
    Ps.
    3,225
    
    
    
    U.S.$299(U.S. GAAP)(6)Other Financial Information:Net cash provided by operating activities
    
    
    6,592
    
    
    
    7,113
    
    
    
    7,364
    
    
    
    10,098
    
    
    
    12,600
    
    
    
    1,166
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Year Ended December 31,2002
    
    2003
    
    2004
    
    2005
    
    2006
    
    2006(millions of Pesos in purchasing power as of December 31, 2006or millions of U.S. Dollars)(1)Net cash provided by (used for) financing activities
    
    
    439
    
    
    
    (2,997
    )
    
    
    (678
    )
    
    
    (9,071
    )
    
    
    (4,453
    )
    
    
    (412
    )Net cash used for investing activities
    
    
    (3,519
    )
    
    
    (2,458
    )
    
    
    (649
    )
    
    
    (2,305
    )
    
    
    (7,918
    )
    
    
    (733
    )Other Data (unaudited):Average prime time audience share (TV
broadcasting)(10)
    
    
    72.4
    %
    
    
    70.1
    %
    
    
    68.9
    %
    
    
    68.5
    %
    
    
    69.5
    %
    
    
    Average prime time rating (TV broadcasting)(10)
    
    
    39.6
    
    
    
    38.1
    
    
    
    36.7
    
    
    
    36.5
    
    
    
    35.5
    
    
    
    Magazine circulation (millions of copies)(11)
    
    
    137
    
    
    
    128
    
    
    
    127
    
    
    
    145
    
    
    
    155
    
    
    
    Number of employees (at year end)
    
    
    12,600
    
    
    
    12,300
    
    
    
    14,100
    
    
    
    15,100
    
    
    
    16,200
    
    
    
    Number of Innova subscribers (in thousands at
year end)(12)
    
    
    738
    
    
    
    857
    
    
    
    1,003
    
    
    
    1,251
    
    
    
    1,430
    
    
    
    Number of Cablevisión subscribers (in thousands
at year end)(13)
    
    
    412
    
    
    
    364
    
    
    
    355
    
    
    
    422
    
    
    
    497
    
    
    
    Number of Esmas.com registered users (in
thousands at year end)(14)
    
    
    2,514
    
    
    
    3,085
    
    
    
    3,665
    
    
    
    4,212
    
    
    
    4,447
    
    
    
    
 
 Notes to Selected Consolidated Financial Information:(1)
    
    Except per Certificado de Participación Ordinario, or CPO, ratio,
average audience share, average rating, magazine circulation,
employee, subscriber and registered user data. Information in these
footnotes is in thousands of Pesos in purchasing power as of December
31, 2006, unless otherwise indicated.(2)
    
    Includes interest expense, interest income, foreign exchange gain or
loss, net, and gain or loss from monetary position. See Note 17 to
our year-end financial statements.(3)
    
    See Note 18 to our year-end financial statements.(4)
    
    For further analysis of income (loss) from continuing operations per
CPO and net income per CPO (as well as corresponding amounts per A
Share not traded as CPOs), see Note 21 (for the calculation under
Mexican FRS) and Note 24 (for the calculation under U.S. GAAP) to our
year-end financial statements.(5)
    
    As of December 31, 2004, 2005 and 2006, we had four classes of common
stock: A Shares, B Shares, D Shares and L Shares. For purposes of
this table, the weighted-average number of shares for all periods
reflects the 25-for-one stock split and the 14-for-one stock dividend
from the 2004 Recapitalization, and the number of shares outstanding
for all periods reflects the 25-for-one stock split from the 2004
Recapitalization. Our shares are publicly traded in Mexico, primarily
in the form of CPOs, each CPO representing 117 shares comprised of 25
A Shares, 22 B Shares, 35 D Shares and 35 L Shares; and in the United
States in the form of Global Depositary Shares, or GDS, each GDS
representing 5 CPOs. Before March 22, 2006, each GDS represented 20
CPOs.The number of CPOs and shares issued and outstanding for financial
reporting purposes under Mexican GAAP/FRS and U.S. GAAP is different
than the number of CPOs issued and outstanding for legal purposes,
because under Mexican GAAP/FRS and U.S. GAAP shares owned by
subsidiaries and/or the trusts created to implement our Stock
Purchase Plan and our Long-Term Retention Plan are not considered
outstanding for financial reporting purposes.As of December 31, 2006, for legal purposes, there were approximately
2,528 million CPOs issued and outstanding, each of which was
represented by 25 A Shares, 22 B Shares, 35 D Shares and 35 L Shares,
and an additional number of approximately 58,927 million A Shares and
2,357 million B Shares (not in the form of CPO units). See Note 12 to
our year-end financial statements.(6)
    
    See Note 24 to our year-end financial statements.(7)
    
    See Note 8 to our year-end financial statements.(8)
    
    See Operating and Financial Review and Prospects  Results of
Operations  Liquidity, Foreign Exchange and Capital Resources 
Indebtedness and Note 8 to our year-end financial statements.(9)
    
    Capital expenditures are those investments made by us in property,
plant and equipment, which amounts are first translated from Mexican
Pesos into U.S. dollars at historical exchange rates, and the
resulting aggregate U.S. dollar amount is then translated to Mexican
Pesos at year-end exchange rate for convenience purposes only; the
aggregate amount of capital 5




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##### Table of Contents



expenditures in Mexican Pesos does not
indicate the actual amounts accounted for in our consolidated
financial statements.(10)
    
    Average prime time audience share for a period refers to the
average daily prime time audience share for all of our networks and
stations during that period, and average prime time rating for a
period refers to the average daily rating for all of our networks and
stations during that period, each rating point representing one
percent of all television households. As used in this annual report,
prime time in Mexico is 4:00 p.m. to 11:00 p.m., seven days a week,
and weekday prime time is 7:00 p.m. to 11:00 p.m., Monday through
Friday. Data for all periods reflects the average prime time audience
share and ratings nationwide as published by IBOPE Mexico. For
further information regarding audience share and ratings information
and IBOPE Mexico, see Information on the Company  Business
Overview Television  Television Broadcasting.(11)
    
    The figures set forth in this line item represent total circulation
of magazines that we publish independently and through joint ventures
and other arrangements and do not represent magazines distributed on
behalf of third parties.(12)
    
    Innova, our direct to home, or DTH satellite service in Mexico,
referred to alternatively as Sky Mexico for segment reporting
purposes, commenced operations on December 15, 1996. The figures set
forth in this line item represent the total number of gross active
residential and commercial subscribers for Innova at the end of each
year presented. For a description of Innovas business and results of
operations and financial condition, see Information on the Company 
Business Overview  DTH Joint Ventures  Mexico. Under Mexican FRS,
effective January 1, 2001 and through March 31, 2004, we did not
recognize equity in results in respect of our investment in Innova in
our income statement, as we recognized equity in losses of Innova up
to the amount of our initial investment and subsequent capital
contributions in Innova. See Operating and Financial Review and
Prospects  Results of Operations  Equity in Earnings of
Affiliates. Since April 1, 2004, Innova has been consolidated in our
financial results.(13)
    
    The figures set forth in this line item represent the total number of
subscribers of Cablevisión at the end of each year presented. For a
description of Cablevisións business and results of operations and
financial condition, see Operating and Financial Review and
Prospects  Results of Operations  Cable Television and
Information on the Company  Business Overview  Cable Television.(14)
    
    The results of operations of Esmas.com are included in the results of
operations of our Other Businesses segment. See Operating and
Financial Review and Prospects  Results of Operations  Other
Businesses. For a description of Esmas.com, see Information on the
Company  Business Overview  Other Businesses  Esmas.com. The
figures set forth in this line item represent the number of
registered users in each year presented. The term registered user
means a visitor that has completed a profile questionnaire that
enables the visitor to use the e-mail service provided by Esmas.com. 
 Dividends
  6




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Exchange Rate Information
   Period
    
    High
    
    Low
    
    Average(1)
    
    Period End2002
    
    
    10.425
    
    
    
    9.0005
    
    
    
    9.663
    
    
    
    10.4252003
    
    
    11.406
    
    
    
    10.113
    
    
    
    10.7925
    
    
    
    11.2422004
    
    
    11.635
    
    
    
    10.805
    
    
    
    11.2897
    
    
    
    11.1542005
    
    
    11.411
    
    
    
    10.413
    
    
    
    10.8938
    
    
    
    10.62752006
    
    
    11.46
    
    
    
    10.4315
    
    
    
    10.7055
    
    
    
    10.79952007:January
    
    
    11.092
    
    
    
    10.765
    
    
    
    10.9559
    
    
    
    11.0381February
    
    
    11.1575
    
    
    
    10.917
    
    
    
    10.995
    
    
    
    11.1575March
    
    
    11.1846
    
    
    
    11.013
    
    
    
    11.1144
    
    
    
    11.0427April
    
    
    11.0305
    
    
    
    10.924
    
    
    
    10.9802
    
    
    
    10.9295May
    
    
    10.931
    
    
    
    10.738
    
    
    
    10.822
    
    
    
    10.738June
(through June 22)
    
    
    10.979
    
    
    
    10.712
    
    
    
    10.838
    
    
    
    10.795
 
 (1)
    
    Annual average rates reflect the average of the exchange rates on the
last day of each month during the relevant period.    7




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Risk Factors
 The following is a discussion of risks associated with our company and an investment in our
securities. Some of the risks of investing in our securities are general risks associated with
doing business in Mexico. Other risks are specific to our business. The discussion below contains
information, among other things, about the Mexican government and the Mexican economy obtained from
official statements of the Mexican government as well as other public sources. We have not
independently verified this information. Any of the following risks, if they actually occur, could
materially and adversely affect our business, financial condition, results of operations or the
price of our securities.
 Risk Factors Related to Mexico
 Economic and Political Developments in Mexico May Adversely Affect Our Business
  Mexico Has Experienced Adverse Economic Conditions
   
    
    demand for advertising may decrease both because consumers may reduce expenditures for
our advertisers products and because advertisers may reduce advertising expenditures; and
    
    demand for publications, cable television, DTH satellite services, pay-per-view
programming and other services and products may decrease because consumers may find it
difficult to pay for these services and products.
 Developments in Other Emerging Market Countries or in the U.S. May Adversely Affect the Mexican
Economy, the Market Value of Our Securities and Our Results of Operations
    8




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Currency Fluctuations or the Devaluation and Depreciation of the Peso Could Limit the Ability of
Our Company and Others to Convert Pesos into U.S. Dollars or Other Currencies, Which Could
Adversely Affect Our Business, Financial Condition or Results of Operations
   High Inflation Rates in Mexico May Decrease Demand for Our Services While Increasing Our Costs
  
    
    inflation can adversely affect consumer purchasing power, thereby adversely affecting
consumer and advertiser demand for our services and products;
    
    to the extent inflation exceeds our price increases, our prices and revenues will be
adversely affected in real terms; and
    
    if the rate of Mexican inflation exceeds the rate of depreciation of the Peso against the
U.S. Dollar, our U.S. Dollar-denominated sales will decrease in relative terms when stated
in constant Pesos.
 High Interest Rates in Mexico Could Increase Our Financing Costs
  Political Events in Mexico Could Affect Mexican Economic Policy and Our Business, Financial
Condition and Results of Operations
  Partido Acción Nacional
   9




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##### Table of Contents



Mexican Antitrust Laws May Limit Our Ability to Expand Through Acquisitions or Joint Ventures
 Ley Federal de Competencia Económica
 Comisión
Federal de Competencia
 Changes in Existing Mexican Laws and Regulations or the Imposition of New Ones May Negatively
Affect Our Operations and Revenue
 Ley Federal de Competencia Económica
 Ley Federal de Radio y Televisión Ley Federal
de Telecomunicaciones Ley Federal de Radio y Televisión Ley Federal de Telecomunicaciones Ley Federal de Radio y
Televisión Ley Federal de Radio y Televisión Secretaría de Comunicaciones y Transportes
  Differences Between Mexican FRS and U.S. GAAP May Have an Impact on the Presentation of Our
Financial Information
  10




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##### Table of Contents



Risk Factors Related to Our Major Stockholders
 Emilio Azcárraga Jean has Substantial Influence Over Our Management and the Interests of Mr.
Azcárraga Jean may Differ from Those of Other Stockholders
  As Controlling Stockholder, Emilio Azcárraga Jean Will Have the Ability to Limit Our Ability to
Raise Capital, Which Would Require Us to Seek Other Financing Arrangements
  Risk Factors Related to Our Business
 The Operation of Our Business May Be Terminated or Interrupted if the Mexican Government Does Not
Renew or Revokes Our Broadcast or Other Concessions
 Secretaría de Comunicaciones y Transportes Ley Federal de Radio y Televisión Ley Federal de Telecomunicaciones Ley Federal de
Radio y Televisión Ley Federal de Telecomunicaciones Ley Federal de Radio y Televisión Ley Federal de Radio y Televisión Secretaría
de Comunicaciones y Transportes
  11




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##### Table of Contents



We Face Competition in Each of Our Markets That We Expect Will Intensify
   Acuerdo de Convergencia de Servicios Fijos de Telefonía Local y Televisión
y/o Audio Restringidos que se Proporcionan a Través de Redes Públicas Alámbricas e Inalámbricas
 Comisión Federal de
Electricidad
  The Seasonal Nature of Our Business Affects Our Revenue and a Significant Reduction in Fourth
Quarter Net Sales Could Impact Our Results of Operations
  12




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##### Table of Contents



Current Litigation We Are Engaged In With Univision and the Recent Sale of Univision May Affect Our
Relationship With Univision
         13




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##### Table of Contents



We Have Experienced Substantial Losses, Primarily in Respect of Our Investments in Innova, and May
Continue to Experience Substantial Losses as a Result of Our Participation in Innova, Which Would
Adversely Affect Our Net Income
    We Have Evaluated the Possibility of Potential Losses in Innova in Case of Business Interruption
Due to the Loss of Transmission and Loss of the Use of Satellite Transponders, Which Would
Adversely Affect Our Net Income
   Risk Factors Related to Our Securities
 Any Actions Stockholders May Wish to Bring Concerning Our Bylaws or the CPO Trust Must Be Brought
in a Mexican Court
  14




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##### Table of Contents



Non-Mexicans May Not Hold A Shares, B Shares or D Shares Directly and Must Have Them Held in a
Trust at All Times
  Non-Mexican Holders of Our Securities Forfeit Their Securities if They Invoke the Protection of
Their Government
  Non-Mexican Holders of Our Securities Have Limited Voting Rights
  Our Antitakeover Protections May Deter Potential Acquirors and May Depress Our Stock Price
  GDS Holders May Face Disadvantages When Attempting to Exercise Voting Rights as Compared to Other
Holders of Our Securities
   15




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##### Table of Contents



The Interests of Our GDS Holders Will Be Diluted if We Issue New Shares and These Holders Are
Unable to Exercise Preemptive Rights for Cash
  The Protections Afforded to Minority Stockholders in Mexico Are Different From Those in the U.S.
 Ley del Mercado de Valores
  It May Be Difficult to Enforce Civil Liabilities Against Us or Our Directors, Executive Officers
and Controlling Persons
  16




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##### Table of Contents



Forward-Looking Statements
  
    
    projections of capital expenditures, dividends, or other
financial information;
    
    statements of our plans, objectives or goals, including those relating to anticipated trends, competition, regulation and rates;
    
    our current and future plans regarding our online and wireless content venture, Televisa Digital;
    
    statements concerning our current and future plans regarding our investment in the Spanish television channel La Sexta;
    
    statements concerning our current and future plans regarding our gaming business;
    
    statements concerning our current and future plans regarding the introduction of fixed
telephony service by Cablevisión;
    
    statements concerning our transactions with and involving Univision Communications, Inc.,
or Univision;
    
    statements concerning our series of transactions with The DIRECTV Group, Inc., or
DIRECTV, and News Corporation, or News Corp.;
    
    statements about our future economic performance or that of the United Mexican States, or
Mexico, or other countries in which we operate or have investments; and
    
    statements or assumptions underlying these statements.
    17




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##### Table of Contents



Item 4. Information on the Company
 
 History and Development of the Company
 sociedad anónima bursátil, Ley General de Sociedades
Mercantiles, (folio mercantil) estatutos sociales,
  
 Capital Expenditures
  Year Ended December 31,(1)2004
    
    
    2005
    
    
    2006(Actual)
    
    
    (Actual)
    
    
    (Actual)(millions of U.S. Dollars)Capital expenditures(2)
    
    U.S. $
    174.6
    
    
    U.S. $
    248.3
    
    
    U.S. $
    298.5Investments in DTH joint ventures(3)
    
    
    12.5
    
    
    
    
    
    
    
    La Sexta(4)
    
    
    
    
    
    
    1.4
    
    
    
    132.4Other acquisitions and investments(5)(6)
    
    
    29.3
    
    
    
    68.0
    
    
    
    437.7Total capital expenditures and investments
    
    U.S. $
    216.4
    
    
    U.S. $
    317.7
    
    
    U.S. $
    868.6
 
 (1)
    
    Amounts in respect of some of the capital expenditures, investments and acquisitions we
made in 2004, 2005 and 2006 were paid for in Mexican Pesos. These Mexican Peso amounts
were translated into U.S. Dollars at the Interbank Rate in effect on the dates on which
a given capital expenditure, investment or acquisition was made. As a result, U.S.
Dollar amounts presented in the table immediately above are not comparable to: (i) data
regarding capital expenditures set forth in Key Information  Selected Financial
Data, which is presented in constant Pesos of purchasing power as of December 31, 2006
and, in the case of data presented in U.S. Dollars, is translated at a rate of
Ps.10.8025 to one U.S. Dollar, the Interbank Rate as of December 31, 2006, and (ii)
certain data regarding capital expenditures set forth under Operating and Financial
Review and Prospects  Results of Operations  Liquidity, Foreign Exchange and Capital
Resources  Capital Expenditures, Acquisitions and Investments, Distributions and Other
Sources of Liquidity.(2)
    
    Reflects capital expenditures for property, plant and equipment, as well as general
capital expenditures, in all periods presented. Also includes U.S.$35.1 million in
2004, U.S.$51.1 million in 2005 and U.S.$75.9 million in 2006 for the expansion and
improvement of our cable business; and U.S.$57.6 million in 2004, U.S.$109.2 million in
2005 and U.S.$91.2 million in 2006 for the expansion and improvement of our SKY Mexico
segment.(3)
    
    Includes investments made in the form of capital contributions and loans in all periods.(4)
    
    In 2005 we made capital contributions of approximately U.S.$1.4 million (1.2 million
Euros). During 2006, we made additional capital contributions related to our 40%
interest in La Sexta in the amount of approximately U.S.$132.4 million (104.6 million
Euros). Our projected total investment in La Sexta for 2007 is approximately U.S.$101.0
million (76.5 million Euros). 18




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##### Table of Contents



(5)
    
    Additionally, in 2004 and 2005, we made capital contributions in the aggregate amount
of U.S.$2.0 million in our pay television joint venture with Univision. In November
2005, we acquired Comtelvi, S. de R.L. de C.V., or Comtelvi, from a third party for an
aggregate amount of U.S.$39.1 million. At the time of acquisition, Comtelvi had
structured note investments and other financial instrument assets and liabilities, as
well as tax losses of approximately Ps.3,445.7 million that were used by us in the
fourth quarter of 2005. See  Business Overview  Univision and Note 2 to our
year-end financial statements.(6)
    
    In the first quarter of 2006, we completed the acquisition of certain operating assets,
consisting primarily of trademarks, intellectual property rights and other publishing
assets owned by Editora Cinco, a publishing company in Mexico and Latin America, for an
aggregate amount of approximately U.S.$15.0 million. In the second quarter of 2006, we
acquired part of the minority interest in Innova that was formerly owned by Liberty
Media for an amount of approximately U.S.$58.7 million to increase the interest in our
Sky Mexico business to 58.7%.  
 Business Overview
  Business Strategy
  Maintaining Our Leading Position in the Mexican Television Market
 Continuing to Produce High Quality Programming.
 Improving Our Sales and Marketing Efforts.
 19




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##### Table of Contents



Improving Our Consolidated Operating Income Margin.
 Continue Building Our Pay Television Platforms
 DTH.
 The key components of our DTH strategy include:
 
    
    offering high quality and exclusive programming content, including rights to our four
over-the-air broadcast channels, exclusive broadcasts of sporting events, such as the 2006
FIFA World Cup, the Spanish Soccer League and a variety of Mexican Soccer League games,
reality shows and other programs produced by us, or with respect to which we have exclusive
rights;
    
    capitalizing on our relationship with DIRECTV and local operators in terms of
technology, distribution networks, infrastructure and cross-promotional opportunities;
    
    capitalizing on the low penetration of pay-television services in Mexico;
    
    exploring alternatives to expand our DTH services in Central America and the Caribbean;
    
    providing superior digital Ku-band DTH satellite services and emphasizing customer service quality; and
    
    we plan to continue leveraging our strengths and capabilities to develop new business
opportunities and expand through acquisitions.
 Cable.
 
    
    continuing to offer high quality programming;
    
    upgrading its existing cable network into a broadband bidirectional network;
 20




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##### Table of Contents




    
    increasing the penetration of its high-speed and bidirectional Internet access and other
multimedia services as well as providing a platform to offer internet protocol, or IP and
telephony services;
    
    continuing the roll out of digital set-top boxes and the roll out, which began in the
third quarter of 2005, of advanced digital set-top boxes which allow the transmission of
high definition programming and recording capability; and
    
    continuing leveraging our strengths and capabilities to develop new business
opportunities and expand through acquisitions.
  Expanding Our Publishing Business
    Increasing Our International Programming Sales and Strengthening Our Position in the Growing
U.S.-Hispanic Market
   21




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##### Table of Contents



Developing New Businesses and Expanding through Acquisitions
      22




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##### Table of Contents



Secretaría de Gobernación
  
    
    Video-on-demand serviceWith this service, internet users can download Televisa and third
party video content from the internet either free with advertising sponsorship or through
payment. The service will target to build the largest Hispanic video library in Latin
America, Canada and the United States with television programs, movies, and music videos,
among others.
    
    Live online television serviceWith this service our internet users worldwide, except in
the United States, can watch a live stream of Televisas four broadcast channels, which is
enhanced by a 15-day time-shifting archive.
    
    Short-video streamingWithin our web pages we launched a new short-clip streaming service
with more than 1,500 videos, each less than 5 minutes long. Currently, we are streaming 1.7
million videos per week.
    
    TarabuTarabu is the leading Mexican online and wireless digital music store in Latin
America. Tarabu utilizes proprietary technology and offers more than 500,000 songs from most
of the major labels. Through this website we also cross-promote the artists of our joint
venture record label, EMI Televisa Music, post music content, generate social networks and
foster interactivity with some of our television programs.
    
    Esmas PlayerThis desktop application enables users to manage their music, image, and
video libraries and access our podcasting, video, music, and live television services
through a simple user interface. Approximately 3.4 million users downloaded the Esmas Player
from the Esmas website during 2006.
     23




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##### Table of Contents



Television
 Television Industry in Mexico
 General.
  Ratings and Audience Share.
  Programming
 Programming We Produce.
   24




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##### Table of Contents



Foreign-Produced Programming.
 Talent Promotion.
 Television Broadcasting
  WhollyOwnedMexico City
    
    Wholly
    
    Majority
    
    MinorityAnchor
    
    Owned
    
    Owned
    
    Owned
    
    Independent
    
    TotalStations
    
    Affiliates
    
    Affiliates
    
    Affiliates
    
    Affiliates
    
    StationsChannel 2
    
    
    1
    
    
    
    124
    
    
    
    2
    
    
    
    
    
    
    
    1
    
    
    
    128Channel 4
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1Channel 5
    
    
    1
    
    
    
    61
    
    
    
    
    
    
    
    
    
    
    
    4
    
    
    
    66Channel 9
    
    
    1
    
    
    
    14
    
    
    
    
    
    
    
    
    
    
    
    14
    
    
    
    29Subtotal
    
    
    4
    
    
    
    199
    
    
    
    2
    
    
    
    
    
    
    
    19
    
    
    
    224Border Stations
    
    
    
    
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1Local (Stations) Affiliates
    
    
    
    
    
    
    18
    
    
    
    
    
    
    
    1
    
    
    
    14
    
    
    
    33Total
    
    
    4
    
    
    
    218
    
    
    
    2
    
    
    
    1
    
    
    
    33
    
    
    
    258
   25




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##### Table of Contents



Average Audience Share
January 2004  December 2006(1)
 
 
 (1)
    
    Source: IBOPE Mexico national surveys. Average Ratings
January 2004  December 2006(1)
 
 
 (1)
    
    Source: IBOPE Mexico national surveys. Channel 2 Network. El Canal de las Estrellas
 Política Nacional para la Introducción de los Servicios de Televisión Digital
Terrestre
      Year Ended December 31,2004(1)
    
    2005(1)
    
    2006(1)Prime time hours
    
    
    31.0
    %
    
    
    31.8
    %
    
    
    32.8
    %Weekday prime time hours
    
    
    32.9
    %
    
    
    36.2
    %
    
    
    37.3
    %Sign-on to sign-off hours
    
    
    29.9
    %
    
    
    30.3
    %
    
    
    31.8
    %
 
 (1)
    
    Source: IBOPE Mexico national surveys.  Channel 5 Network.
 26




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##### Table of Contents



Política Nacional para la Introducción de los Servicios de Televisión Digital
Terrestre
  Year Ended December 31,2004(1)
    
    2005(1)
    
    2006(1)Prime time hours
    
    
    19.6
    %
    
    
    17.4
    %
    
    
    16.9
    %Weekday prime time hours
    
    
    19.8
    %
    
    
    15.9
    %
    
    
    14.9
    %Sign-on to sign-off hours
    
    
    21.6
    %
    
    
    20.1
    %
    
    
    19.1
    %
 
 (1)
    
    Source: IBOPE Mexico national surveys.  Channel 4 Network.
 Política Nacional para la Introducción de los Servicios de Televisión Digital
Terrestre
  Year Ended December 31,2004(1)
    
    2005(1)
    
    2006(1)Prime time hours
    
    
    6.6
    %
    
    
    6.0
    %
    
    
    6.1
    %Weekday prime time hours
    
    
    7.0
    %
    
    
    6.3
    %
    
    
    6.5
    %Sign-on to sign-off hours
    
    
    8.7
    %
    
    
    7.6
    %
    
    
    7.5
    %
 
 (1)
    
    Source: IBOPE Mexico national surveys.  Channel 9 Network.
 27




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##### Table of Contents



Política Nacional para la Introducción de los Servicios de Televisión Digital
Terrestre
  Year Ended December 31,2004(1)
    
    2005(1)
    
    2006(1)Prime time hours
    
    
    11.7
    %
    
    
    13.4
    %
    
    
    13.7
    %Weekday prime time hours
    
    
    9.9
    %
    
    
    10.6
    %
    
    
    11.4
    %Sign-on to sign-off hours
    
    
    11.0
    %
    
    
    12.2
    %
    
    
    12.6
    %
 
 (1)
    
    Source: IBOPE Mexico national surveys.  Local Affiliates.
 Política Nacional para la Introducción de los Servicios de Televisión Digital
Terrestre
 Border Stations.
 Advertising Sales Plan.
  28




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##### Table of Contents



Pay Television Networks.
 Telehit, Ritmoson Latino, Bandamax, De Película, De Película
Clásico, Unicable, Cinema Golden Choice 1 & 2 Cinema Golden Choice Latinoamérica Canal de
Telenovelas, American Network, Canal de las Estrellas Latinoamérica Canal de las Estrellas
Europa, Canal 2 Delay-2hrs and Clasico TV.
  Programming Exports.
 Expansion of Programming Reach.
 Publishing
 Publishing
  TV y Novelas Tele Guía. Vanidades Caras Eres Conozca Más Furia Musical Banda Onda Grupera Vanidades TV y Novelas
U.S.A. Caras.
 Cosmopolitan Good
Housekeeping Harpers Bazaar Popular Mechanics PC Magazine EGM Electronic Gaming Monthly Maxim Marie Claire Mens
Health and Prevention
 29




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##### Table of Contents



ESPN Magazine Tu Dinero, Sport Life Automóvil Panamericano Muy Interesante Padres e Hijos Ocean
Drive Disney Princesas Disney Winnie Pooh,
Power Rangers W.I.T.C.H Nick Travel + Leisure National Geographic National Geographic Kids
 Poder y
Negocios TVyNovelas Ecuador OK Chivas Atención Médica
  Publishing Distribution
  Cable Television
 The Cable Television Industry in Mexico. Cámara Nacional de la Industria de Televisión por
Cable
 Mexico City Cable System.
 Cable Television Services.
 30




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##### Table of Contents



Pay-Per-View Channels.
 Cable Television Revenues.
 Cable Television Initiatives.
  
    
    enhanced programming services, including video games; and
    
    IP and/or telephony services.
   Radio
 Radio Stations.
  31




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##### Table of Contents



Radio Advertising.
 Other Businesses
 Televisa Digital.
  Esmas.com Esmas.com Esmas.com
 Esmas.com
 32




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##### Table of Contents



Sports and Show Business Promotions.
 Soccer. América
 América, Atlante América Necaxa
 Promotions.
 Live Entertainment. Vívelo
 Feature Film Production and Distribution.
 La Última Noche Pu os
Rosas.
    Nationwide Paging.
 Gaming Business. Secretaría de
Gobernación
 33




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##### Table of Contents



Investments
 OCEN.
 Mutual Fund Venture.
 Volaris.
 La Sexta.
      34




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##### Table of Contents



Walmex.
 TVI
   Alvafig.
  DTH Joint Ventures
 Background.
   35




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##### Table of Contents




    
    Innova and DIRECTV Mexico entered into a purchase and sale agreement, pursuant to which
Innova agreed to purchase DIRECTV Mexicos subscriber list for two promissory notes with an
aggregate original principal amount of approximately Ps.641.5 million;
    
    Innova and DIRECTV Mexico entered into a letter agreement which provided for cash
payments to be made by Innova or DIRECTV Mexico based on the number of subscribers
successfully migrating to Innova, the applicable sign-up fees for migrating subscribers, or
certain migrated subscribers churning shortly after migration, among other specified
payments under the agreement;
    
    Innova, Innova Holdings and News Corp. entered into an option agreement, pursuant to
which News Corp. was granted options to acquire up to a 15% equity interest in each of
Innova and Innova Holdings, dependent upon the number of subscribers successfully migrating
to Innova; in exchange for the two promissory notes referred above that were delivered to
DIRECTV Mexico;
    
    DIRECTV and News Corp. entered into a purchase agreement pursuant to which DIRECTV
acquired (i) the right (which DIRECTV concurrently assigned to DTVLA) to purchase from News
Corp. the options granted to News Corp. by Innova and Innova Holdings to purchase up to an
additional 15% of the outstanding equity of each of such entities pursuant to the option
agreement described above, and (ii) the right to acquire News Corp.s 30% interest in Innova
and Innova Holdings;
    
    DIRECTV and Liberty Media International, Inc., or Liberty Media, entered into a purchase
agreement pursuant to which DIRECTV agreed to purchase all of Liberty Medias 10% interest
in Innova and Innova Holdings for U.S.$88 million in cash. DIRECTV agreed that we may
purchase two-thirds ( 2/3) of any equity interest in Innova and Innova Holdings sold by
Liberty Media;
    
    pursuant to the DTH agreement we entered into with News Corp., Innova, DIRECTV and DTVLA,
with respect to certain DTH platforms owned or operated by News Corp. or DIRECTV or their
affiliates and subject to certain restrictions, we have the right to require carriage of
five of our channels on any such platform serving Latin America (including Puerto Rico but
excluding Mexico, Brazil and countries in Central America), two of our channels on any such
platform serving the United States or Canada, and one of our channels on any such platform
serving areas other than the United States and Latin America;
    
    we, News Corp., Innova, DIRECTV and DTVLA entered into a DTH agreement that, among other
things, governs the rights of the parties with respect to DTVLAs announced shutdown of its
Mexican DTH business, planned shutdown of its existing DTH business in certain countries in
Central America, the carriage of certain of our programming channels by Innova and other DTH
platforms of DIRECTV, DTVLA, News Corp. and their respective affiliates, and the waiver and
potential release of certain claims between certain of the parties; and
    
    we and Innova entered into a channel licensing agreement pursuant to which Innova will
pay us a royalty fee to carry our over-the-air channels on its DTH service.
 36




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##### Table of Contents




    
    we entered into a purchase and sale agreement with DIRECTV, pursuant to which, among
other things, (i) DIRECTV acquired all of our direct equity interests in ServiceCo, (ii)
DIRECTV agreed to purchase all of our indirect equity interests in MCOP, and (iii) DIRECTV
has agreed to indemnify us for any and all losses arising out of our status as a partner in
MCOP;
    
    DIRECTV also agreed to purchase each of News Corp.s, Liberty Medias and Globopars
equity interests in TechCo (a U.S. partnership formed to provide technical services from a
main uplink facility in Miami Lakes, Florida and a redundancy site in Port St. Lucie,
Florida), ServiceCo and MCOP; and
    
    PanAmSat Corporation, or PanAmSat, unconditionally released us from any and all
obligations related to the MCOP transponder lease.
  
    
    DIRECTV Holdings exercised its right to acquire News Corp.s 30% interest in Innova and
DTVLA exercised the right to purchase the options granted to News Corp. by Innova and Innova
Holdings to purchase up to an additional 12% of the outstanding equity of each of such
entities pursuant to the previously disclosed option agreement;
    
    DTVLA exercised an option to purchase 12% of Innova and Innova Holdings which was based
on the number of subscribers successfully migrating to Innova, by delivering to Innova and
Innova Holdings the two promissory notes issued in connection with Innovas purchase of
DIRECTV Mexicos subscriber list for cancellation in October 2004;
    
    DIRECTV Mexico made cash payments to Innova totaling approximately U.S.$2.7 million
pursuant to a letter agreement entered into by both parties in October 2004 in connection
with the purchase of the DIRECTV Mexicos subscriber list. The payments were made due to
certain ineligible subscribers, applicable sign-up costs, and other costs under the side
letter;
    
    DIRECTV Holdings purchased all of Liberty Medias 10% interest in Innova. As described
below, we exercised the right to acquire two-thirds of this 10% equity interest acquired
from Liberty Media; and
    
    we entered into an amended and restated guaranty with PanAmSat, pursuant to which the
proportionate share of Innovas transponder lease obligation guaranteed by us was to cover a
percentage of the transponder lease obligations equal to our percentage ownership of Innova.
As a result of our acquisition of two-thirds of the equity interests that from Liberty
Media, the guarantee has been readjusted to cover a percentage of the transponder lease
obligations equal to our percentage ownership of Innova.
   Mexico.
  37




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##### Table of Contents



Programming.
 Univision
  38




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39




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##### Table of Contents



Competition
  Television Broadcasting
     Publishing
  Cable Television
  40




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##### Table of Contents



Ley Federal de Telecomunicaciones
     Radio
   Feature Film Production and Distribution
  DTH Satellite Services
    41




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##### Table of Contents



Gaming
Business
  Regulation
  Television
 Mexican Television Regulations
 Concessions. Ley Federal de Radio y Televisión Ley
Federal de Telecomunicaciones Ley Federal de
Radio y Televisión Ley Federal de Telecomunicaciones
 Diaro
Oficial de la Federación
  
    
    Proof of Mexican nationality.
 
    
    Submission of a business plan;
 
    
    Submission of technical specifications and descriptions;
 
    
    Submission of a plan for coverage;
 
    
    Submission of an investment program;
 
    
    Submission of a financial program;
 
    
    Submission of plans for technical development and actualization;
 
    
    Submission of plans for production and programming;
 
    
    Receipt of a guaranty to ensure the continuation of the process until the concession is
granted or denied; and
 
    
    A request for a favorable opinion from the Mexican Antitrust Commission.


42



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##### Table of Contents




    
    failure to construct broadcasting facilities within a specified time period;
 
    
    changes in the location of the broadcasting facilities or changes in the frequency
assigned without prior governmental authorization;
 
    
    direct or indirect transfer of the concession, the rights arising therefrom or ownership
of the broadcasting facilities without prior governmental authorization;
 
    
    transfer or encumbrance, in whole or in part, of the concession, the rights arising
therefrom, the broadcasting equipment or any assets dedicated to the concessionaires
activities, to a foreign government, company or individual, or the admission of any such
person as a partner in the concessionaires business;
 
    
    failure to broadcast for more than 60 days without reasonable justification;
 
    
    any amendment to the bylaws of the concessionaire that is in violation of applicable
Mexican law; and
 
    
    any breach to the terms of the concession title.
    43




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##### Table of Contents



Supervision of Operations.
 Secretaría de
Gobernación
  Networks.
 Restrictions on Advertising. Ley General de Salud,
  Broadcast Tax.
 Foreign Ownership. Ley de Inversión Extranjera, Ley Federal de
Radio y Televisión Reglamento de la Ley de Inversión
Extranjera
 Radio
  44




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##### Table of Contents



Cable Television
 Concessions.
 
    
    unauthorized interruption or termination of service;
    
    interference by the concessionaire with services provided by other operators;
    
    noncompliance with the terms and conditions of the public telecommunications concession;
    
    the concessionaires refusal to interconnect with other operators;
    
    loss of the concessionaires Mexican nationality;
    
    unauthorized assignment, transfer or encumbrance, in whole or in part, of the concession or any rights or assets;
    
    the liquidation or bankruptcy of the concessionaire; and
    
    ownership or control of the capital stock of the concessionaire by a foreign government.
  Reglamento del Servicio de Televisión y Audio
Restringidos Ley
Federal de Radio y Televisión Reglamento de la Ley Federal de Radio y Televisión.
  Supervision of Operations.
   45




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##### Table of Contents



Restrictions on Advertising.
 Government Participation.
 Forfeiture of Assets.
 Non-Mexican Ownership of Public Telecommunications Networks
 Comisión Nacional de Inversiones Extranjeras
 Application of Existing Regulatory Framework to Internet Access and IP Telephony Services
   Satellite Communications
 Mexican Regulation of DTH Satellite Services.
  
    
    the failure to use the concession within 180 days after it was granted;
    
    a declaration of bankruptcy of the concessionaire;
    
    failure to comply with the obligations or conditions specified in the concession;
    
    unlawful assignments of, or encumbrances on, the concession; or
    
    failure to pay to the government the required fees.
 46




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##### Table of Contents



Regulation of DTH Satellite Services in Other Countries.
 Mexican Gaming Regulations
 Ley Federal de Juegos y Sorteos Reglamento de la Ley Federal de Juegos y Sorteos Secretaría de Gobernación
  Mexican Antitrust Law
 Ley Federal de Competencia Económica Reglamento
de la Ley Federal de Competencia Económica
   
    
    Raising the thresholds to make a concentration a reportable transaction.
 47




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##### Table of Contents




    
    Empowering the Mexican Antitrust Commission to issue a waiting order before a reported
transaction may be closed, if such order is issued within ten business days from the date
the transaction is reported to the Antitrust Commission.
    
    Requiring the Mexican Antitrust Commission to rule upon a reported transaction that the
filing party deems that it does not notoriously restrain competition (attaching the
necessary evidence), within 15 business days from the filing date.
  
    
    An overreaching authority to determine whether competition, effective competition, market
power and competition conditions in a specific market exist or not, either such
determination is required under the antitrust law or if required under any other statute
that requires a determination of market conditions.
    
    To issue binding opinions in competition matters whether required by specific statutes,
if required by other federal authorities. Such opinions shall also be issued in connection
with decrees, regulations, governmental determinations and other governmental acts (such as
public bid rules) which may have an anticompetitive effect.
    
    It must issue an opinion related to effective competition conditions in a specific market
or to the market power of a given agent in a market.
    
    Issue an opinion related to the granting of concessions, licenses or permits or the
transfer of equity interests in concessionaries or licensees, are to be obtained if so
required by the relevant statues or the bid rules.
    
    The authority to perform visits to economic agents with the purpose of obtaining evidence
of violations to the law, including the ability to obtain evidence of the incurrence of a
vertical or horizontal restraint. In all cases, the Mexican Antitrust Commission must obtain
a judicial subpoena in order to proceed with the visits. Any agent that is subject to such
order is bound to allow such visits and to cooperate fully with the Mexican Antitrust
Commission.
  Significant Subsidiaries, etc.
  Jurisdiction ofOrganization or
    
    PercentageName of Significant Subsidiary
    
    Incorporation
    
    Ownership(1)Corporativo Vasco de Quiroga, S.A. de C.V.(2)(3)
    
    Mexico
    
    
    100.0
    %CVQ Espectáculos, S.A. de C.V.(2)(3)
    
    Mexico
    
    
    100.0
    %Editora Factum, S.A. de C.V.(3)(4)
    
    Mexico
    
    
    100.0
    %Empresas
Cablevisión, S.A.B. de C.V.(3)(5)
    
    Mexico
    
    
    51.0
    %Editorial Televisa, S.A. de C.V.(3)(6)
    
    Mexico
    
    
    100.0
    %Factum Mas, S.A. de C.V.(3)(7)(8)
    
    Mexico
    
    
    100.0
    %Sky DTH, S. de R.L. de C.V.(7)
    
    Mexico
    
    
    100.0
    %Innova, S. de R.L. de C.V. (Innova)(9)
    
    Mexico
    
    
    58.7
    %Grupo Distribuidoras Intermex, S.A. de C.V.(3)(10)
    
    Mexico
    
    
    100.0
    %Campus América, S.A. de C.V.(11)
    
    Mexico
    
    
    100.0
    %Linking
Media, S.A. de C.V.(12)
    
    Mexico
    
    
    100.0
    %Sistema
Radiópolis, S.A. de C.V.(3)(13)
    
    Mexico
    
    
    50.0
    %Telesistema
Mexicano, S.A. de C.V.(14)
    
    Mexico
    
    
    100.0
    %G-Televisa-D, S.A. de C.V.(15)
    
    Mexico
    
    
    100.0
    %Televisa,
S.A. de C.V.(16)
    
    Mexico
    
    
    100.0
    %Televisa
Juegos, S.A. de C.V.(3)(17)
    
    Mexico
    
    
    100.0
    %Televisión Independiente de México, S.A. de C.V.(3)(14)
    
    Mexico
    
    
    100.0
    %
 
 (1)
    
    Percentage of equity owned by us directly or indirectly through subsidiaries or affiliates.(2)
    
    One of three direct subsidiaries through which we conduct the operations of our Other Businesses
segment, excluding Internet 48




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##### Table of Contents



operations.(3)
    
    While this subsidiary is not a significant subsidiary within the meaning of Rule 1-02(w) of Regulation
S-X under the Securities Act, we have included this subsidiary in the table above to provide a more
complete description of our operations.(4)
    
    Subsidiary through which we own equity interests in and conduct our Cable Television.(5)
    
    Indirect subsidiary through which we conduct the operating of our Cable Television business. For a
description of América Móvils sale of its 49% equity interest in this business in April 2002, see 
Cable Television  Mexico City Cable System.(6)
    
    Direct subsidiary through which we conduct the operations of our Publishing segment.(7)
    
    One of two subsidiaries through which we own our equity interest in Innova.(8)
    
    Direct subsidiary through which we own equity interests in and conduct our Internet business.(9)
    
    Consolidated variable interest entity through which we conduct the operations of our Sky Mexico
segment. We currently own a 58.7% interest in Innova.(10)
    
    Direct subsidiary through which we conduct the operations of our Publishing Distribution segment.(11)
    
    Campus leases real property  to Apuestas Internacionales, S.A. de C.V., Sistema Radiópolis, S.A. de C.V.
and Cablevisión, S.A. de C.V., all of which are subsidiaries of Grupo Televisa. Campus
also leases real property to Club de Futbol America, a professional soccer team, for its training facilities.(12)
    
    Grupo Televisa held a majority of its ownership stake of Univision Communications Inc. through Linking. Due
to the sale of its shares of Univision, Linking currently has no operations.(13)
    
    Direct subsidiary through which we conduct the operations of our Radio segment. Since we hold a
controlling 50% full voting stake in this subsidiary and have the right to elect a majority of the
members of its Board of Directors, we will continue to consolidate 100% of the results of operations
of this subsidiary in accordance with Mexican FRS. See Operating and Financial Review and Prospects 
Results of Operations  Total Segment Results  Radio and Operating and Financial Review and
Prospects  Results of Operations  Minority Interest.(14)
    
    One of two direct subsidiaries through which we conduct the operations of our Television Broadcasting,
Pay Television Networks and Programming Exports segments.(15)
    
    Indirect subsidiary through which we conduct certain operations of our Television Broadcasting segment.(16)
    
    Indirect subsidiary through which we conduct the operations of our Television Broadcasting, Pay
Television Networks and Programming Exports segments.(17)
    
    Direct subsidiary through which we conduct the operations of our Gaming Business.  Property, Plant and Equipment
 Broadcasting, Office and Production Facilities.
  49




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Number ofOperations
    
    Properties
    
    LocationTelevision and news activitiesOwned properties
    
    
    1
    
    
    San Diego, CaliforniaLeased properties
    
    
    5
    
    
    Madrid, Spain (2)San Diego, California (1)Miami, Florida (1)Zug, Switzerland (1)Publishing activitiesOwned properties
    
    
    1
    
    
    Miami, Florida (1)Leased properties
    
    
    13
    
    
    Beverly Hills, California (1)New York, New York (1)Medellín, Colombia (2)Cali, Colombia (2)Quito, Ecuador (2)Lima, Perú (1)Santiago, Chile (1)Chacao, Venezuela (1)San Juan, Puerto Rico (1)Publishing distribution and other activitiesOwned properties
    
    
    5
    
    
    Buenos Aires, Argentina (1)Baranquilla, Colombia (1)Guayaquil, Ecuador (3)Leased properties
    
    
    5
    
    
    Quito, Ecuador (1)Guayaquil, Ecuador (1)Buenos Aires, Argentina (1)Panamá, Panamá (1)Santiago, Chile (1)
 Satellites.
    50




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Insurance.
 51




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Item 5. Operating and Financial Review and Prospects
 You should read the following discussion together with our year-end financial statements and
the accompanying notes, which appear elsewhere in this annual report. This annual report contains
forward-looking statements that reflect our plans, estimates and beliefs. Our actual results could
differ materially from those discussed in these forward-looking statements. Factors that could
cause or contribute to these differences include, but are not limited to, those discussed below and
elsewhere in this annual report, particularly in Key Information  Risk Factors. In addition to
the other information in this annual report, investors should consider carefully the following
discussion and the information set forth under Key Information  Risk Factors before evaluating
us and our business.
 We began to consolidate Innova, our DTH joint venture in Mexico, effective April 1, 2004.
Accordingly, our financial results for the year ended December 31, 2005 may not be directly
comparable to our financial results for the year ended December 31, 2004.
 
 Preparation of Financial Statements
  
 Results of Operations
  Year Ended December 31,(1)2004
    
    2005
    
    2006Operating Segment Net SalesTelevision Broadcasting
    
    
    56.9
    %
    
    
    55.4
    %
    
    
    53.8
    %Pay Television Networks
    
    
    2.7
    
    
    
    3.3
    
    
    
    3.4Programming Exports
    
    
    6.4
    
    
    
    5.6
    
    
    
    5.4Publishing
    
    
    7.0
    
    
    
    7.5
    
    
    
    7.4Publishing Distribution
    
    
    5.2
    
    
    
    1.2
    
    
    
    1.1Sky Mexico(2)
    
    
    12.1
    
    
    
    17.9
    
    
    
    19.1Cable Television
    
    
    3.7
    
    
    
    4.2
    
    
    
    5.1Radio
    
    
    1.0
    
    
    
    1.0
    
    
    
    1.1Other Businesses
    
    
    5.0
    
    
    
    3.9
    
    
    
    3.6Total Segment Net Sales
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Intersegment Operations
    
    
    (2.4
    )
    
    
    (3.1
    )
    
    
    (2.8
    )Total Consolidated Net Sales
    
    
    97.6
    %
    
    
    96.9
    %
    
    
    97.2
    %Total Net SalesCost of Sales(3)
    
    
    50.6
    %
    
    
    45.4
    %
    
    
    42.7
    %Selling Expenses(3)
    
    
    7.5
    
    
    
    8.2
    
    
    
    7.9Administrative Expenses(3)
    
    
    5.6
    
    
    
    5.7
    
    
    
    6.1Depreciation and Amortization
    
    
    7.1
    
    
    
    7.4
    
    
    
    7.1Consolidated Operating Income
    
    
    29.2
    
    
    
    33.3
    
    
    
    36.2Total
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
 
 (1)
    
    Certain segment data set forth in these tables may vary from certain
data set forth in our year-end consolidated financial statements due
to differences in rounding. The segment net sales and total segment
net sales data set forth in this annual report reflect sales from
intersegment operations in all periods presented. See Note 23 to our
year-end financial statements.(2)
    
    Effective April 1, 2004, we began consolidating Sky Mexico, which is
applicable under Mexican FRS NIF A-8, Supplementary Financial
Reporting Standards.(3)
    
    Excluding depreciation and amortization. 52




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Summary of Business Segment Results
  Year Ended December 31,(1)2004
    
    
    2005
    
    
    2006(millions of Pesos in purchasing power as of December) 31, 2006Operating Segment Net SalesTelevision Broadcasting
    
    Ps.
    18,388.2
    
    
    Ps.
    19,323.5
    
    
    Ps.
    20,972.1Pay Television Networks
    
    
    861.0
    
    
    
    1,156.2
    
    
    
    1,329.0Programming Exports
    
    
    2,061.5
    
    
    
    1,952.0
    
    
    
    2,110.9Publishing
    
    
    2,250.8
    
    
    
    2,607.1
    
    
    
    2,885.5Publishing Distribution(2)
    
    
    1,692.4
    
    
    
    418.5
    
    
    
    433.5Sky Mexico(3)
    
    
    3,910.5
    
    
    
    6,229.2
    
    
    
    7,452.7Cable Television
    
    
    1,212.8
    
    
    
    1,462.1
    
    
    
    1,984.7Radio
    
    
    318.0
    
    
    
    358.7
    
    
    
    444.6Other Businesses
    
    
    1,610.1
    
    
    
    1,377.8
    
    
    
    1,408.1Total Segment Net Sales
    
    
    32,305.3
    
    
    
    34,885.1
    
    
    
    39,021.1Intersegment Operations
    
    
    (786.3
    )
    
    
    (1,087.5
    )
    
    
    (1,089.3
    )Total Consolidated Net Sales
    
    Ps.
    31,519.0
    
    
    Ps.
    33,797.6
    
    
    Ps.
    37,931.8Operating Segment Income (Loss)Television Broadcasting
    
    Ps.
    8,343.8
    
    
    Ps.
    9,211.4
    
    
    Ps.
    10,598.0Pay Television Networks
    
    
    320.9
    
    
    
    539.1
    
    
    
    682.3Programming Exports
    
    
    786.8
    
    
    
    695.8
    
    
    
    869.3Publishing
    
    
    456.6
    
    
    
    499.5
    
    
    
    555.8Publishing Distribution
    
    
    (27.3
    )
    
    
    6.9
    
    
    
    18.0Sky Mexico(3)
    
    
    1,439.3
    
    
    
    2,618.8
    
    
    
    3,555.5Cable Television
    
    
    383.4
    
    
    
    509.4
    
    
    
    816.8Radio
    
    
    34.1
    
    
    
    54.3
    
    
    
    94.6Other Businesses
    
    
    (137.4
    )
    
    
    (187.6
    )
    
    
    (311.4
    )Total Operating Segment Income(4)
    
    
    11,600.2
    
    
    
    13,947.6
    
    
    
    16,878.9Corporate Expenses(4)
    
    
    (167.7
    )
    
    
    (189.9
    )
    
    
    (450.9
    )Depreciation and Amortization
    
    
    (2,231.0
    )
    
    
    (2,517.1
    )
    
    
    (2,679.1
    )Total Consolidated Operating Income(5)
    
    Ps.
    9,201.5
    
    
    Ps.
    11,240.6
    
    
    Ps.
    13,748.9
 
 (1)
    
    Certain segment data set forth in these tables may vary from certain
data set forth in our year-end financial statements due to differences
in rounding. The segment net sales and total segment net sales data
set forth in this annual report reflect sales from intersegment
operations in all periods presented. See Note 23 to our year-end
financial statements.(2)
    
    Effective October 1, 2004, we changed certain key terms of
substantially all our contracts with publishers for the distribution
of magazines, books and newspapers. As a result, we changed our
accounting treatment in our Publishing Distribution segments net
sales and cost of sales, and began recognizing our net sales as the
marginal revenue from the products we distribute. Before October 2004,
we recognized revenue on a gross basis.(3)
    
    Effective April 1, 2004, we began consolidating Sky Mexico, in
accordance with FIN 46, which is applicable under Mexican FRS NIF A-8,
Supplementary Financial Reporting Standards. 53




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##### Table of Contents



(4)
    
    The operating segment income (loss), and total operating segment
income data set forth in this annual report do not reflect corporate
expenses or depreciation and amortization in any period presented, but
are presented herein to facilitate the discussion of segment results.(5)
    
    Total consolidated operating income reflects corporate expenses and
depreciation and amortization in all periods presented. See Note 23 to
our year-end financial statements. Seasonality
  54




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Results of Operations for the Year Ended December 31, 2006
Compared to the Year Ended December 31, 2005
 Total Segment Results
 Net Sales
  Cost of Sales
  Selling Expenses
  Administrative Expenses
  Television Broadcasting
    55




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Advertising Rates and Sales
     Pay Television Networks
    Programming Exports
  56




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Publishing
    Publishing Distribution
     57




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Sky Mexico
   Cable Television
    Radio
    58




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Other Businesses
 Esmas.com
   Depreciation and Amortization
  Non Operating Results
 Integral Cost of Financing, Net
  
    
    interest income;
    
    interest expense, including the restatement of our Mexican Investment Units (Unidades de
Inversión) or UDI-denominated notes;
    
    foreign exchange gain or loss attributable to monetary assets and liabilities denominated
in foreign currencies (including gains or losses from derivative instruments ); and
    
    gain or loss attributable to holding monetary assets and liabilities exposed to
inflation.
    59




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Restructuring and Non-recurring Charges
  Other Expense, Net
  Income Tax, Assets Tax and Employees Profit Sharing
     Equity in Earnings of Affiliates
   Cumulative Loss Effect of Accounting Changes, Net
  60




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Minority Interest
   Net Income
  
    
    a Ps.2,508.3 million increase in operating income;
    
    a Ps.754.6 million decrease in integral cost of financing, net;
    
    a Ps.272.0 million decrease in other expense, net;
    
    a Ps.526.6 million decrease in cumulative loss of accounting change; and
    
    a Ps.539.8 million decrease in minority interest.
  
    
    a Ps.375.2 million increase in restructuring and non-recurring charges;
    
    a Ps.1,244.8 million increase in income tax and employees profit sharing; and
    
    a Ps.768.9 million decrease in equity in results of affiliates, net.
 Results of Operations for the Year Ended December 31, 2005
Compared to the Year Ended December 31, 2004
 Total Segment Results
 Net Sales
  Cost of Sales
  61




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Selling Expenses
  Administrative Expenses
  Television Broadcasting
   Pay Television Networks
   Programming Exports
   62




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Publishing
   Publishing Distribution
     Sky Mexico
    Cable Television
  63




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##### Table of Contents



Radio
   Other Businesses
   Depreciation and Amortization
  Non Operating Results
 Integral Cost of Financing, Net
  
    
    interest income;
    
    interest expense, including the restatement of our UDI-denominated notes, as described
under  Liquidity, Foreign Exchange and Capital Resources  Indebtedness and  Liquidity,
Foreign Exchange and Capital Resources  Interest Expense;
    
    foreign exchange gain or loss attributable to monetary assets and liabilities denominated
in foreign currencies (including gains or losses from derivative instruments); and
 64




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
    
    gain or loss attributable to holding monetary assets and liabilities exposed to
inflation.
    Restructuring and Non-recurring Charges
  Other Expense, Net
  Income Tax, Assets Tax and Employees Profit Sharing
     65




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Equity in Earnings of Affiliates
   Cumulative Loss Effect of Accounting Changes, Net
   Minority Interest
  66




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Net Income
  
    
    a Ps.2,039.1 million increase in operating income;
    
    a Ps.185.8 million decrease in restructuring and non-recurring charges;
    
    a Ps.70.7 million decrease in other expense, net;
    
    a Ps.462.4 million decrease in income taxes; and
    
    a Ps.571.8 million decrease in cumulative loss effect of accounting changes, net.
  
    
    a Ps.224.1 million increase in integral cost of financing, net;
    
    a Ps.494.5 million decrease in equity in earnings of affiliates, net; and
    
    a Ps.878.8 million increase in minority interest.
 Effects of Devaluation and Inflation
  
    
    the percentage that the Peso devalued or appreciated against the U.S. Dollar;
    
    the Mexican inflation rate;
    
    the U.S. inflation rate; and
    
    the percentage change in Mexican GDP compared to the prior period.
 Year EndedDecember 31,2004
    
    2005
    
    2006Devaluation (appreciation) of the Peso as compared to the U.S. Dollar(1)
    
    
    (0.7
    )%
    
    
    (4.7
    )%
    
    
    1.7
    %Mexican inflation rate(2)
    
    
    5.2
    
    
    
    3.3
    
    
    
    4.1U.S. inflation rate
    
    
    3.3
    
    
    
    3.4
    
    
    
    3.3Increase in Mexican GDP(3)
    
    
    4.2
    
    
    
    2.8
    
    
    
    4.8
 
 (1)
    
    Based on changes in the Interbank Rates, as reported by Banamex, at
the end of each period, which were as follows: Ps.11.1490 per U.S.
Dollar as of December 31, 2004; Ps.10.6265 per U.S. Dollar as of
December 31, 2005; and Ps.10.8025 per U.S. Dollar as of December 31,
2006.(2)
    
    Based on changes in the NCPI from the previous period, as reported by
the Mexican Central Bank, which were as follows: 112.5 in 2004; 116.3
in 2005; and 121.0 in 2006.(3)
    
    As reported by the Instituto Nacional de Estadística, Geografía e
Informática, or INEGI, and, in the case of GDP information for 2004,
2005 and 2006, as estimated by INEGI.  67




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##### Table of Contents




    
    Advertising and Other Revenues.Inflation in Mexico adversely affects consumers. As a
result, our advertising customers may purchase less advertising, which would reduce our
advertising revenues, and consumers may reduce expenditures for our other products and
services, including pay television services.
    
    U.S. Dollar-denominated Revenues and Operating Costs and Expenses.We have substantial
operating costs and expenses denominated in U.S. Dollars. These costs are principally due to
our activities in the United States, the costs of foreign-produced programming and
publishing supplies and the leasing of satellite transponders. The following table sets
forth our U.S. Dollar-denominated revenues and operating costs and expenses for 2004, 2005
and 2006:
 Year Ended December 31,2004
    
    2005
    
    2006(millions of U.S. Dollars)Revenues
    
    
    U.S.$435
    
    
    
    U.S.$385
    
    
    
    U.S.$470Operating costs and expenses
    
    
    443
    
    
    
    393
    
    
    
    529
  
    
    Depreciation and Amortization Expense.We restate our non-monetary Mexican and foreign
assets to give effect to inflation. The restatement of these assets in periods of high
inflation, as well as the devaluation of the Peso as compared to the U.S. Dollar, increases
the carrying value of these assets, which in turn increases the related depreciation
expense.
    
    Integral Cost of Financing.The devaluation of the Peso as compared to the U.S. Dollar
generates foreign exchange losses relating to our net U.S. Dollar-denominated liabilities
and increases the Peso equivalent of our interest expense on our U.S. Dollar-denominated
indebtedness. Foreign exchanges losses, derivatives used to hedge foreign exchange risk and
increased interest expense increase our integral cost of financing.
  Inflation Under Mexican FRS.
 
    
    restatement of Mexican non-monetary assets (other than transmission rights, inventories
and equipment of non-Mexican origin), non-monetary liabilities and stockholders equity
using the NCPI; and
    
    restatement of all inventories at net replacement cost.
 U.S. GAAP Reconciliation
  68




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Recently Issued U.S. Accounting Standards
     69




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New Mexican Financial Reporting Standards
    Critical Accounting Policies
  Accounting for Programming.
 70




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Equity Investments.
    Goodwill and Other Indefinite-lived Intangible Assets.
  71




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Long-lived Assets.
 Deferred Income Taxes.
 Liquidity, Foreign Exchange and Capital Resources
 Liquidity.
  Net
income adjusted for non-cash items.
  
    
    a Ps.2,905.3 million increase in operating income;
    
    a Ps.820.7 million decrease in income and assets taxes and employees profit sharing;
 72




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
    
    a Ps.752.7 million decrease in integral cost of financing, which was due primarily to a
decrease in foreign exchange loss and interest expense; and
    
    a Ps.75.0 million decrease in other expense, net.
  
    
    a Ps.304.2 million increase in restructuring and non-recurring charges.
  
    
    a Ps.2,325.2 million increase in operating income; and
    
    a Ps.117.2 million decrease in other expense, net.
  
    
    a Ps.1,012.9 million increase in income and assets taxes and employees profit sharing;
    
    a Ps.208.2 million increase in integral cost of financing, which was due primarily to an increase in foreign exchange loss; and
    
    a Ps.24.1 million increase in restructuring and non-recurring charges.
  
    
    a Ps.2,869.3 million increase in operating income;
    
    a Ps.580.1 million decrease in income and assets taxes and employees profit sharing; and
    
    a Ps.579.7 million decrease in restructuring and non-recurring charges.
  
    
    a Ps.901.1 million increase in integral cost of financing, which was due primarily to an
increase in interest expense and foreign exchange loss; and
    
    a Ps.148.4 million increase in other expense, net.
 Capital Expenditures, Acquisitions and Investments, Distributions and Other Sources of Liquidity.
  
    
    made aggregate capital expenditures totaling U.S.$298.5 million, including U.S.$75.9
million for our cable television segment, U.S.$91.2 million for Sky Mexico, U.S.$22.5
million for gaming, and U.S.$108.9 million in our television broadcasting and other business
segments;
    
    made investments related to our 40% interest in La Sexta for an aggregate amount of
U.S.$132.4 million (104.6 million), and capital contributions of U.S.$7.5 million in
Volaris related to our 25% interest in this venture;
 73




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##### Table of Contents




    
    acquired a 50% interest in TVI, a cable television company in Mexico, in the amount of
Ps.769.4 million, which was substantially paid in cash, and provided funding to TVI in the
form of a loan in the amount of Ps. 240.6 million; and
    
    invested U.S.$258 million in long-term notes convertible, at our option, into 99.99% of
the equity of Alvafig S.A. de C.V., which holds 49% of the equity of Cablemás the second
largest cable operator in Mexico, with a coupon rate of 8% in the first year and 10% in the
four remaining years.
  
    
    made aggregate capital expenditures for property, plant and equipment of approximately
U.S.$248.3 million, which amount includes capital expenditures in the amount of U.S.$51.1
million and U.S.$109.2 million for the expansion and improvement of our Cable Television and
Sky Mexico segments, respectively;
    
    invested a capital contribution of U.S.$25.0 million in Concesionaria Vuela Compañía de
Aviación, S.A. de C.V.,or Vuela, which owns and operates Volaris, a new, low-cost-carrier
airline with a concession to operate in Mexico, and made a capital contribution of U.S.$1.4
million (1.2 million), related to our Spanish venture, La Sexta; and
    
    contributed Ps.5.0 million (nominal) to fund our seniority premium obligations.
  Refinancings.
      Indebtedness.
 74




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Debt Outstanding(1)December 31,2006
    
    Interest
    
    
    
    
    
    MaturityDescription of Debt
    
    Actual
    
    Rate(2)
    
    Denomination
    
    of DebtLong-term debt8% Senior Notes(2)(3)
    
    
    777.3
    
    
    
    8.0
    %
    
    U.S. Dollars
    
    
    20118.5% Senior Notes(2)
    
    
    3,240.8
    
    
    
    8.5
    %
    
    U.S. Dollars
    
    
    20326 5/8% Senior Notes(2)(3)
    
    
    6,481.5
    
    
    
    6.625
    %
    
    U.S. Dollars
    
    
    2025Innovas 9 3/8% Senior Notes(4)
    
    
    121.5
    
    
    
    9.375
    %
    
    U.S. Dollars
    
    
    2013UDI-denominated notes(3)(5)
    
    
    980.2
    
    
    
    8.15
    %
    
    UDIs (Peso-Indexed)
    
    
    2007Banamex loan(6)
    
    
    2,000.0
    
    
    
    10.35
    %
    
    Pesos
    
    2010 and 2012Banamex loan(6)
    
    
    480.0
    
    
    
    8.925
    %
    
    Pesos
    
    
    2008Banamex loan(6)
    
    
    1,162.5
    
    
    
    9.70
    %
    
    Pesos
    
    
    2009Innovas Santander Serfin loan(4)
    
    
    1,400.0
    
    
    
    8.98
    %
    
    Pesos
    
    
    2016Innovas Banamex loan(4)
    
    
    2,100.0
    
    
    
    8.74
    %
    
    Pesos
    
    
    2016Other debt(7)
    
    
    37.9
    
    
    
    6.18
    %
    
    Various
    
    
    2007-2010Total debt (including current maturities)
    
    
    18,781.7
    
    
    
    
    
    
    
    
    
    
    13.40 years(8)Less: current maturities
    
    
    986.4
    
    
    
    
    
    
    Various
    
    December 2007Total long-term debt
    
    
    17,795.3
 
 (1)
    
    U.S. Dollar-denominated debt is translated into Pesos at an exchange rate
of Ps.10.8025 per U.S. Dollar, the Interbank Rate, as reported by
Banamex, as of December 31, 2006.(2)
    
    These Senior Notes are unsecured obligations of the Company, rank equally
in right of payment with all existing and future unsecured and
unsubordinated indebtedness of the Company, and are junior in right of
payment to all of the existing and future liabilities of the Companys
subsidiaries. Interest on the Senior Notes due 2011, 2025 and 2032,
including additional amounts payable in respect of certain Mexican
withholding taxes, is 8.41%, 6.97% and 8.94% per annum, respectively, and
is payable semi-annually. These Senior Notes may not be redeemed prior to
maturity, except in the event of certain changes in law affecting the
Mexican withholding tax treatment of certain payments on the securities,
in which case the securities will be redeemable, as a whole but not in
part, at the option of the Company. The Senior Notes due 2011 and 2032
were priced at 98.793% and 99.431%, respectively, for a yield to maturity
of 8.179% and 8.553%, respectively. The agreement of these Senior Notes
contains covenants that limit the ability of the Company and certain
restricted subsidiaries engaged in Television Broadcasting, Pay
Television Networks and Programming Exports, to incur or assume liens,
perform sale and leaseback transactions, and consummate certain mergers,
consolidations and similar transactions. Substantially all of these
Senior Notes are registered with the SEC.(3)
    
    In March and May 2005, the Company issued these Senior Notes in the
aggregate amount of U.S.$400.0 million and U.S.$200.0 million,
respectively, which were priced at 98.081% and 98.632%, respectively, for
a yield to maturity of 6.802% and 6.787%, respectively. The net proceeds
of the U.S.$400.0 million issuance, together with cash on hand, were used
to fund the Groups tender offers made and expired in March 2005 for any
or all of the Senior Notes due 2011 and the Mexican Peso equivalent of
UDI-denominated Notes due 2007, and prepaid principal amount of these
securities in the amount of approximately U.S.$222.0 million and
Ps.2,935,097 (nominal), respectively, representing approximately 74% and
76% of the outstanding principal amount of these securities,
respectively. The net proceeds of the U.S.$200.0 million issuance were
used for corporate purposes, including the prepayment of some of the
Groups outstanding indebtedness.(4)
    
    These Senior Notes are unsecured and unsubordinated obligations of Sky
Mexico. Interest on these Senior Notes, including additional amounts
payable in respect of certain Mexican withholding taxes, is 9.8580%, and
is payable semi-annually. The indentures of these Senior Notes contain
certain restrictive covenants for Sky Mexico on additional indebtedness,
liens, sales and leasebacks, restricted payments, asset sales, and
certain mergers, consolidations and similar transactions. Sky Mexico may,
at its own option, redeem these Senior Notes, in whole or in part, at any
time on or after September 19, 2008 at redemption prices from 104.6875%
to 101.5625% between September 19, 2008 through September 18, 2011, or
100% commencing on September 19, 2011, plus accrued and unpaid interest,
if any. Additionally, on or before September 19, 2006, Sky Mexico may, at
its own option and subject to certain requirements, use the proceeds from
one or more qualified equity offerings to redeem up to 35% of the
aggregate principal amount of these Senior Notes at 109.375% of their
principal amount, plus accrued and unpaid interest. In March and April
2006, Sky Mexico entered into two 10-year loans with Mexican banks in the
aggregate principal amount of 75




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Ps.3,500,000 to fund, together with cash on
hand, a tender offer and consent solicitation made in March 2006 and
expired in April 2006 for any or all of the Senior Notes due 2013, and
prepaid a principal amount of approximately U.S.$288.7 million or 96.2%
of these securities. The total aggregate amount paid by Sky Mexico in
connection with this tender offer was of approximately U.S.$324.3
million, which included related consents and accrued and unpaid interest.
The 10-year Sky Mexicos indebtedness is guaranteed by the Company and
includes a Ps.2,100,000 loan with an annual interest rate of 8.74% and a
Ps.1,400,000 loan with an annual interest rate of 8.98% for the first
three years, and the Mexican interbank interest rate or TIIE plus 24
basis points for the remaining seven years. Interest on these two 10-year
loans is payable on a monthly basis.(5)
    
    Notes denominated in UDIs, representing 258,711,400 UDIs at December 31,
2005 and 2006, respectively. Interest on these notes is payable
semi-annually. The balance as of December 31, 2005 and 2006 includes
restatement of Ps.235,581 and Ps.265,578, respectively. The UDI value as
of December 31, 2006, was of Ps.3.788954 per UDI. The 8.15%
UDI-denominated notes matured on April 13, 2007.(6)
    
    Includes, in 2005 and 2006, outstanding balances of long-term loans in
the principal amount of Ps.800,000, Ps.1,162,500 and Ps.2,000,000,
respectively, in connection with certain credit agreements entered into
by the Company with a Mexican bank, with various maturities through 2012.
Interest on these loans is, in a range of 8.925% to 10.35% per annum, and
is payable on a monthly basis. Under the terms of these credit
agreements, the Company and certain restricted subsidiaries engaged in
television broadcasting, pay television networks and programming exports
are required to maintain (a) certain financial coverage ratios related to
indebtedness and interest expense; and (b) certain restrictive covenants
on indebtedness, dividend payments, issuance and sale of capital stock,
and liens.(7)
    
    Includes secured notes payable to banks, bearing annual interest rates
which vary between 0.11 and 1.25 points above LIBOR. The maturities of
this debt at December 31, 2006 are various from 2007 to 2010.(8)
    
    Actual weighted average maturity of long-term debt as of
December 31, 2006. Interest Expense.
  Year Ended December 31,(1)(2)2004
    
    
    2005
    
    
    2006(millions of U.S. Dollars)Interest payable in U.S. Dollars
    
    U.S.
    $110.0
    
    
    U.S.
    $118.0
    
    
    U.S.
    $95.6Amounts currently payable under Mexican withholding taxes(3)
    
    
    5.0
    
    
    
    6.3
    
    
    
    4.2Total interest payable in U.S. Dollars
    
    U.S.
    $115.0
    
    
    U.S.
    $124.3
    
    
    U.S.
    $99.8Peso equivalent of interest payable in U.S. Dollars
    
    Ps.
    1,435.2
    
    
    Ps.
    1,433.6
    
    
    Ps.
    1,114.5Interest payable in Pesos
    
    
    632.8
    
    
    
    754.3
    
    
    
    783.3Restatement of UDI-denominated Notes due 2007
    
    
    185.0
    
    
    
    33.1
    
    
    
    39.8Total interest expense(4)
    
    Ps.
    2,253.0
    
    
    Ps.
    2,221.0
    
    
    Ps.
    1,937.6
 
 (1)
    
    U.S. Dollars are translated into Pesos at the rate prevailing when interest was recognized as an expense for each period and
restated to Pesos in purchasing power as of December 31, 2006.(2)
    
    Interest expense in these periods includes amounts effectively payable in U.S. Dollars as a result of U.S. Dollar-Peso swaps.(3)
    
    See Additional Information  Taxation  Federal Mexican Taxation.(4)
    
    Total interest expense amounts in these periods exclude capitalized and hedged interest expense. Guarantees.
 76




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Contractual Obligations and Commercial Commitments
  Contractual Obligations on the Balance Sheet
  Payments Due by PeriodLess Than12 Months
    
    
    12-36 Months
    
    
    36-60 Months
    
    
    AfterJanuary 1,
    
    
    January 1,
    
    
    January 1,
    
    
    60 Months2007 to
    
    
    2008 to
    
    
    2010 to
    
    
    Subsequent toDecember 31,
    
    
    December 31,
    
    
    December 31,
    
    
    December 31,Total
    
    
    2007
    
    
    2009
    
    
    2011
    
    
    2011(thousands of U.S. Dollars)8% Senior Notes
    
    U.S.
    $71,951
    
    
    U.S.
    $
    
    
    U.S.
    $
    
    
    U.S.
    $71,951
    
    
    U.S.
    $8.5% Senior Notes
    
    
    300,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    300,0006.625% Senior Notes
    
    
    600,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    600,000Innovas 9.375% Senior Notes
    
    
    11,251
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,251UDI-denominated Notes
    
    
    90,742
    
    
    
    90,742Banamex loan II
    
    
    44,434
    
    
    
    
    
    
    
    44,434Banamex loan III
    
    
    107,610
    
    
    
    
    
    
    
    107,610Banamex loan IV
    
    
    185,142
    
    
    
    
    
    
    
    
    
    
    
    92,571
    
    
    
    92,571Innovas Banamex loan
    
    
    194,400
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    194,400Innovas Santander Serfín loan
    
    
    129,600
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    129,600Other debt
    
    
    3,513
    
    
    
    567
    
    
    
    422
    
    
    
    2,524Long-term debt
    
    
    1,738,643
    
    
    
    91,309
    
    
    
    152,466
    
    
    
    167,046
    
    
    
    1,327,822Satellite transponder obligation
    
    
    111,696
    
    
    
    7,978
    
    
    
    18,973
    
    
    
    23,854
    
    
    
    60,891Transmission rights(1)
    
    
    84,208
    
    
    
    53,734
    
    
    
    27,842
    
    
    
    2,632Total contractual obligations
    
    U.S.
    $1,934,547
    
    
    U.S.
    $153,021
    
    
    U.S.
    $199,281
    
    
    U.S.
    $193,532
    
    
    U.S.
    $1,388,713
 
 (1)
    
    This liability reflects our transmission rights obligations related to
programming acquired or licensed from third party producers and
suppliers, and special events, which are reflected for in our
consolidated balance sheet within trade accounts payable (current
liabilities) and other long-term liabilities. 77




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##### Table of Contents



Contractual Obligations off the Balance Sheet
  Payments Due by PeriodLess Than12 Months
    
    
    12-36 Months
    
    
    36-60 Months
    
    
    AfterJanuary 1,
    
    
    January 1,
    
    
    January 1,
    
    
    60 Months2007 to
    
    
    2008 to
    
    
    2010 to
    
    
    Subsequent toDecember 31,
    
    
    December 31,
    
    
    December 31,
    
    
    December 31,Total
    
    
    2007
    
    
    2009
    
    
    2011
    
    
    2011(thousands of U.S. Dollars)Satellite transponder commitments(1)
    
    
    U.S. $63,486
    
    
    
    U.S. $14,707
    
    
    
    U.S. $24,375
    
    
    
    U.S. $10,678
    
    
    
    U.S. $13,726Capital expenditures commitments(2)
    
    
    23,765
    
    
    
    23,765
    
    
    
    
    
    
    
    
    
    
    
    Guarantees(3)
    
    
    11,426
    
    
    
    11,426
    
    
    
    
    
    
    
    
    
    
    
    Lease commitments(4)
    
    
    161,403
    
    
    
    9,769
    
    
    
    17,149
    
    
    
    15,598
    
    
    
    118,887Other(5)
    
    
    141,932
    
    
    
    101,003
    
    
    
    40,929
    
    
    
    
    
    
    
    Total contractual obligations
    
    
    U.S.     $402,012
    
    
    
    U.S.  $160,670
    
    
    
    U.S. $82,453
    
    
    
    U.S.  $26,276
    
    
    
    U.S. $132,613
 
 (1)
    
    Our minimum commitments for the use of satellite transponders under operating lease contracts.(2)
    
    Our commitments for capital expenditures include U.S.$7,900, which are related to
improvements to leasehold facilities of our Gaming operations.(3)
    
    In connection with the disposal of our investment in PanAmSat in 1997, we granted collateral
to secure certain indemnification obligations. After the expiration of applicable tax
statutes of limitations, the collateral will be reduced to a de minimis amount. The
collateral agreement is expected to be terminated in 2007.(4)
    
    Our minimum lease commitments for facilities under operating lease contracts, which are
primarily related to our Gaming Business, and which relate to leases with maturities between
2021 and 2046. See Note 11 to our year-end financial statements.(5)
    
    We have commitments of capital contributions in 2007 and 2008 related to our 40% equity
interest in La Sexta in the aggregate amount of approximately 76.5 million euros
(U.S.$101,003) and 31.0 million euros (U.S.$40,929), respectively. 78




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##### Table of Contents



Item 6. Directors, Senior Management and Employees
 Board of Directors
  Name and Date of Birth
    
    Principal Occupation
    
    Business Experience

    First ElectedEmilio Fernando Azcárraga
     Jean (02/21/68)
    
    Chairman of the Board, President and Chief
Executive Officer and President of the
Executive Committee of Grupo Televisa
    
    Member of the Board of Banco
Nacional de México, S.A., former
Member of the Board of Teléfonos de
México, S.A.B. de C.V. and former
Vice Chairman of the Board of
Univision

    December 1990In alphabetical order:Alfonso de Angoitia Noriega
     (01/17/62)
    
    Executive Vice President and Member of the
Executive Office of the Chairman and Member of
the Executive Committee of Grupo Televisa
    
    Former Chief Financial Officer of
Grupo Televisa and former Alternate
Member of the Board of Univision and
Partner, Mijares, Angoitia, Cortés y
Fuentes, S.C. (1994-1999)

    April 1998María Asunción
     Aramburuzabala Larregui
     (05/02/63)
    
    Chief Executive Officer of Tresalia Capital,
S.A. de C.V.
    
    Vice Chairwoman of the Board and
Member of the Executive Committee of
Grupo Modelo, S.A.B. de C.V. and
Member of the Boards of Grupo
Financiero Banamex, S.A. de C.V.,
Banco Nacional de México, S.A. and
América Móvil, S.A.B. de C.V.

    July 2000Pedro Aspe Armella (07/07/50)
    
    Chairman of the Board and Chief Executive
Officer of Evercore/Protego Asesores, S.A. de
C.V.
    
    Member of the Boards of The
McGraw-Hill Companies and Xignux and
former Member of the Board of Vector
Casa de Bolsa, S.A. de C.V.

    April 2003Julio Barba Hurtado (05/20/33)
    
    Legal Advisor to the Board, Member of the
Executive Committee and Secretary to the Audit
and Corporate Practices Committee of Grupo
Televisa
    
    Former Assistant Secretary of the
Board and Legal Advisor to Televisa,
S.A. de C.V.

    December 1990José Antonio Bastón Patiño
     (04/13/68)
    
    Corporate Vice President of Television and
Member of the Executive Committee of Grupo
Televisa
    
    Former Vice President of Operations
of Grupo Televisa, former General
Director of Programming of Grupo
Televisa and former Member of the
Board of Univision

    April 1998Alberto Bailleres González
     (08/22/31)
    
    President of Grupo Bal, S.A. de C.V.
    
    Member of the Boards of Valores
Mexicanos, Casa de Bolsa, S.A. de
C.V., Desc., S.A.B. de C.V., Fomento
Económico Mexicano, S.A.B. de C.V.
(FEMSA), Grupo Financiero BBVA
Bancomer, S.A. de C.V., Industrias
Peñoles, S.A.B. de C.V., Grupo
Nacional Provincial, S.A.B., Grupo
Palacio de Hierro, S.A.B. de C.V.,
Profuturo GNP, S.A. de C.V.,
Aseguradora Porvenir GNP, S.A. de
C.V. and President of the Board of
Governors of the Instituto
Tecnológico Autónomo de México, A.C.
(ITAM)

    April 2005
 79




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##### Table of Contents



Name and Date of Birth
    
    Principal Occupation
    
    Business Experience

    First ElectedManuel Jorge Cutillas Covani
     (03/01/32)
    
    Director of Grupo Bacardi Limited
    
    Member of the Board of Bacardi
Limited and former Chairman of the
Board of Bacardi Limited

    April 1994José Antonio Fernández
     Carbajal (2/15/54)
    
    Chairman of the Board and Chief Executive
Officer of Fomento Económico Mexicano, S.A.B.
de C.V. and Coca-Cola Femsa, S.A.B. de C.V.
    
    Member of the Boards of BBVA
Bancomer, S.A., Grupo Industrial
Saltillo, S.A.B. de C.V., Industrias
Peñoles, S.A.B. de C.V., and Grupo
Industrial Bimbo, S.A.B. de C.V.

    April 2007Carlos Fernández González
     (09/29/66)
    
    Chief Executive Officer and Chairman of the
Board of Grupo Modelo, S.A.B. de C.V.
    
    Member of the Boards of
Anheuser-Busch Companies, Inc.,
Grupo Financiero Santander, S.A.B.
de C.V. and Emerson Electric, Co.
Member of the Board and Partner of
Finacless Mexico, S.A.B. de C.V. and
Partner and CEO of Tenedora San
Carlos, S.A. de C.V.

    July 2000Bernardo Gómez Martínez
     (07/24/67)
    
    Executive Vice President, Member of the
Executive Office of the Chairman and Member of
the Executive Committee of Grupo Televisa
    
    Former President of the Mexican
Chamber of Television and Radio
Broadcasters and Deputy to the
President of Grupo Televisa

    April 1999Claudio X. González Laporte
     (05/22/34)
    
    Chairman of the Board and Chief Executive
Officer of Kimberly-Clark de México, S.A.B. de
C.V.
    
    Member of the Boards of
Kimberly-Clark Corporation, General
Electric Co., Kellogg Company, Home
Depot, Inc., Alfa, S.A.B. de C.V.,
Grupo Carso, S.A.B. de C.V., América
Móvil, S.A.B. de C.V. and Investment
Company of America, and former
President of the Mexican Business
Council

    April 1997Roberto Hernández Ramírez
     (03/24/42)
    
    Chairman of the Board of Banco Nacional de
México, S.A.
    
    Former Chief Executive Officer of
Banco Nacional de México, S.A. and
Member of the Boards of Citigroup,
Inc., Gruma, S.A.B. de C.V., Grupo
Financiero Banamex Accival, S.A. de
C.V., and the Nature Conservancy and
World Monuments Fund

    April 1992Enrique Krauze Kleinbort
     (09/17/47)
    
    Director and Partner of Editorial Clío Libros
y Videos, S.A. de C.V.
    
    Director and Partner of Editorial Vuelta, S.A. de C.V.

    April 1996Germán Larrea Mota Velasco
     (10/26/53)
    
    Chairman of the Board, Chief Executive Officer
and President of Grupo México, S.A.B. de C.V.
    
    Chairman of the Board and Chief
Executive Officer of Southern Copper
Corporation and Grupo Ferroviario
Mexicano, S.A. de C.V., former
Chairman of the Board and former
Chief Executive Officer of Asarco
Incorporated and former Member of
the Boards of Banco Nacional de
México, S.A. and Bolsa Mexicana de
Valores, S.A. de C.V.

    April 1999Gilberto Pérezalonso Cifuentes
     (03/06/43)
    
    Member of the Audit and Corporate Practice Committee of Grupo Televisa
    
    Former Chief Executive Officer of
Aerovias de Mexico, S.A. de C.V., and former Chief Executive Officer of
Corporación GEO, S.A.B. de C.V. Former
Member of the Boards of Grupo
Gigante, S.A.B. de C.V. Southern Peru Copper
Corporation and Afore Banamex, S.A. Member of the Boards of Consorcio Aeroméxico S.A.B de C.V. and Telefónica Móviles México

    April 1998Alejandro Quintero Iñiguez
     (02/11/50)
    
    Corporate Vice President of Sales and
Marketing and Member of the Executive
Committee of Grupo Televisa
    
    Stockholder of Grupo TV Promo, S.A.
de C.V. and former Advisor to former
Mexican President Ernesto Zedillo

    April 1998
 80




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##### Table of Contents



Name and Date of Birth
    
    Principal Occupation
    
    Business Experience

    First ElectedFernando Senderos Mestre     (03/03/50)
    
    Chairman of the Board and Chief Executive
Officer of DESC, S.A.B. de C.V.
    
    Member of the Boards of Teléfonos de
México, S.A.B. de C.V., Alfa, S.A.B.
de C.V., Kimberly-Clark de México,
S.A.B. de C.V. and Industrias
Peñoles, S.A.B. de C.V.

    April 1992Enrique Francisco José Senior
     Hernández (08/03/43)
    
    Executive Vice President and Managing Director
of Allen & Company LLC
    
    Member of the Boards of Pics Retail
Networks, Coca-Cola Femsa, S.A.B. de
C.V., Cinemark USA Inc. and Non
Traditional Media

    April 2001Lorenzo H. Zambrano Treviño
     (03/27/44)
    
    Chairman of the Board and Chief Executive
Officer of Cemex, S.A.B. de C.V.
    
    Member of the Boards of Alfa, S.A.B. de
C.V., IBM, Citigroup, Allianz, Grupo
Financiero Bancomer, S.A. de C.V.
Empresas ICA, Sociedad Controladora,
S.A.B. de C.V., Fomento Económico
Mexicano, S.A.B. de C.V. and Vitro,
S.A.B. de C.V.

    April 1999Alternate Directors:In alphabetical order:Herbert A. Allen III (06/08/67)
    
    President of Allen & Company LLC
    
    Former Executive Vice President and
Managing Director of Allen & Company
Incorporated, Member of the Board of
Convera Corporation

    April 2002Juan Pablo Andrade Frich
     (06/05/64)
    
    Asset Manager of Tresalia Capital, S.A. de C.V.
    
    Former Member of the Boards of Televicentro
and Empresas Cablevisión, S.A.B. de C.V.

    July 2000Lucrecia Aramburuzabala
     Larregui de Fernandez
     (03/29/67)
    
    Private Investor
    
    Former employee of Tresalia Capital,
S.A. de C.V. and Member of the Board
of Grupo Modelo, S.A.B. de C.V. and
former Member of the Board of
Televicentro

    July 2000Félix José Araujo Ramírez
     (03/20/51)
    
    Vice President of Televisa Regional
    
    Former Private Investor in Promoción
y Programación de la Provincia, S.A.
de C.V., Promoción y Programación
del Valle de Lerma, S.A. de C.V.,
Promoción y Programación del
Sureste, S.A. de C.V., Teleimagen
Profesional del Centro, S.A. de C.V.
and Estrategia Satélite, S.C.

    April 2002Joaquín Balcárcel Santa Cruz
     (01/04/69)
    
    Vice President  Legal and General Counsel of
Grupo Televisa
    
    Former Vice President and General
Counsel of Television, Former Legal
Director of Grupo Televisa and
former associate at Martínez,
Algaba, Estrella, De Haro y
Galván-Duque, S.C.

    April 2000Rafael Carabias Príncipe
     (11/13/44)
    
    Chief Financial Officer of Gestora de
Inversiones Audiovisuales La Sexta, S.A.
    
    Former Member of the Boards of
Promecap, S.C. and Grupo Financiero
del Sureste, S.A., former Director
of Corporate Finance of Scotiabank
Inverlat, S.A. and former Vice
President of Administration of Grupo
Televisa

    April 1999Francisco José Chévez Robelo
     (07/03/29)
    
    Retired Partner of Chévez, Ruiz, Zamarripa y
Cía., S.C. and Chairman of the Audit and
Corporate Practices Committee of Grupo
Televisa and Empresas Cablevisión, S.A.B.
    
    Member of the Board of Empresas
Cablevisión, S.A.B. de C.V. and
former Partner of Chévez, Ruíz,
Zamarripa y Cía., S.C.

    April 2003José Luis Fernández Fernández
     (05/18/59)
    
    Partner of Chévez, Ruíz, Zamarripa y Cía., S.C.
    
    Former Member of the Boards of
Alexander Forbes, S.A. de C.V. and
Afore Bital, S.A.

    April 2002
 81




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##### Table of Contents



Name and Date of Birth
    
    Principal Occupation
    
    Business Experience

    First ElectedSalvi Rafael Folch Viadero     (08/16/67)
    
    Chief Financial Officer of Grupo Televisa
    
    Former Vice President of Financial Planning of Grupo Televisa, Chief
Executive Officer and Chief
Financial Officer of Comercio Más,
S.A. de C.V. and former Vice
Chairman of Banking Supervision of
the National Banking and Securities
Commission

    April 2002Leopoldo Gómez González Blanco 
     (04/06/59)
    
    Vice President of Newscasts of Grupo Televisa
    
    Former Director of Information to
the President of Grupo Televisa

    April 2003Jorge Agustín Lutteroth Echegoyen
      (01/24/53)
    
    Vice President and Corporate Controller of
Grupo Televisa
    
    Former Senior Partner of Coopers &
Lybrand Despacho Roberto Casas
Alatriste, S.C.

    April 2000Alberto Javier Montiel Castellanos 
     (11/22/45)
    
    Director of Montiel Font y Asociados, S.C. and
Member of the Audit and Corporate Practices
Committees of Grupo Televisa and Empresas
Cablevisión, S.A.B.
    
    Former Tax Vice President of Grupo
Televisa and Former Tax Director of
Wal-Mart de México, S.A.B. de C.V.

    April 2002Raúl Morales Medrano
     (05/12/70)
    
    Partner of Chévez, Ruiz, Zamarripa y Cia., S.C.
    
    Former Senior Manager of Chévez,
Ruiz, Zamarripa y Cia., S.C.

    April 2002
   82




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Our Board of Directors
 General.
 
    
    our principals, employees or managers, as well as the statutory auditors, or comisarios,
of our subsidiaries, including those individuals who have occupied any of the described
positions within a period of 12 months preceding the appointment;
    
    individuals who have significant influence over our decision making processes;
    
    controlling stockholders, in our case, the beneficiaries of the Stockholder Trust;
    
    partners or employees of any company which provides advisory services to us or any
company which is part of the same economic group as we are and that receives 10% or more of
its income from us;
    
    significant clients, suppliers, debtors or creditors, or members of the Board or executive officers of any such entities; or
    
    spouses, family relatives up to the fourth degree, or cohabitants of any of the aforementioned individuals.
 Election of Directors.
 Quorum; Voting.
 Meetings; Actions Requiring Board Approval.
  
    
    our general strategy;
    
    with input from the Audit and Corporate Practices Committee, on an individual basis: (i)
any transactions with related parties, subject to certain limited exceptions, (ii) the
appointment of our Chief Executive Officer, his compensation and removal for justified
causes; (iii) our financial statements and those of our subsidiaries, (iv) unusual or
non-recurrent transactions and any transactions or series of related transactions during any
calendar year that involve (a) the acquisition or sale of assets with a value equal to or
exceeding 5% of our consolidated assets; or (b) the giving of collateral or guarantees or
the assumption of liabilities, equal to or exceeding 5% of our consolidated assets, (v)
agreements with our external auditors; and (vi) accounting policies, within GAAP;
 83




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##### Table of Contents




    
    creation of special committees and granting them the power and authority, provided that
the committees will not have the authority which by law or under our by-laws is expressly
reserved for the stockholders or the Board;
 
    
    matters related to antitakeover provisions provided for in our bylaws; and
    
    the exercise of our general powers in order to comply with our corporate purpose.
 Duty of Care and Duty of Loyalty.
     comisario
 Audit and Corporate Practices Committee.
  84




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Committees of Our Board of Directors.
 Executive Officers
  Name and Date of Birth
    
    Principal Position
    
    Business Experience
    
    First AppointedEmilio Fernando Azcárraga Jean 
     (02/21/68)
    
    Chairman of the Board, President
and Chief Executive Officer and
President of the Executive
Committee of Grupo Televisa
    
    Member of the Board of Banco Nacional
de México, S.A., former Member of the
Board of Teléfonos de México, S.A.B. de
C.V. and former Vice Chairman of the
Board of Univision
    
    March 1997In alphabetical order:Alfonso de Angoitia Noriega 
     (01/17/62)
    
    Executive Vice President and
Member of the Executive Office
of the Chairman and Member of
the Executive Committee of Grupo
Televisa
    
    Former Chief Financial Officer of Grupo
Televisa, Member of the Board and of
the Executive Committee of Grupo
Televisa, former Alternate Member of
the Board of Univision and Partner,
Mijares, Angoitia, Cortés y Fuentes,
S.C. (1994-1999)
    
    January 2004Félix José Araujo Ramírez 
      (03/20/51)
    
    President of Telesistema
Mexicano, S.A. de C.V.; Vice
President of Televisa Regional
    
    Former Private Investor in Promoción y
Programación de la Provincia, S.A. de
C.V., Promoción y Programación del
Valle de Lerma, S.A. de C.V., Promoción
y Programación del Sureste, S.A. de
C.V., Teleimagen Profesional del
Centro, S.A. de C.V. and Estrategia
Satélite, S.C.
    
    January 1993Maximiliano Arteaga Carlebach
       (12/06/42)
    
    Vice President of Operations,
Technical Service and Television
Production of Grupo Televisa
    
    Former Vice President of Operations 
Televisa Chapultepec, former Vice
President of Administration  Televisa
San Angel and Chapultepec and former
Vice President of Administration and
Finance of Univisa, Inc.
    
    March 2002
 85




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Name and Date of Birth
    
    Principal Position
    
    Business Experience
    
    First AppointedJosé Antonio Bastón
Patiño      (04/13/68)
    
    Corporate Vice President of
Television of Grupo Televisa
    
    Member of the Board and of the
Executive Committee of Grupo Televisa,
former Vice President of Operations of
Grupo Televisa, former General Director
of Programming of Grupo Televisa and
former Member of the Board of Univision
    
    February 2001Jean Paul Broc Haro
     (08/08/62)
    
    Chief Executive Officer of
Cablevisión
    
    Former General Manager of Pay
Television Networks of Grupo Televisa
    
    February 2003Salvi Rafael Folch
Viadero      (08/16/67)
    
    Chief Financial Officer of Grupo
Televisa
    
    Former Vice President of Financial
Planning of Grupo Televisa, Chief
Executive Officer and Chief Financial
Officer of Comercio Más, S.A. de C.V.
and former Vice Chairman of Banking
Supervision of the National Banking and
Securities Commission
    
    January 2004Bernardo Gómez
Martínez      (07/24/67)
    
    Executive Vice President and
Member of the Executive Office
of the Chairman and Member of
the Executive Committee of Grupo
Televisa
    
    Former Deputy to the President of Grupo
Televisa, member of the Board and of
the Executive Committee of Televisa and
former President of the Mexican Chamber
of Television and Radio Broadcasters
    
    January 2004Eduardo Michelsen Delgado       (03/03/71)
    
    Chief Executive Officer of
Editorial Televisa and Vice
President of Editorial Televisa
International
    
    Former Vice President of Operations of
Editorial Televisa International
Former General Director  Grupo Semana
Former Project Director  McKinsey & Co.
    
    January 2002Jorge Eduardo Murguía
Orozco       (01/25/50)
    
    Vice President of Production of
Grupo Televisa
    
    Former Administrative Vice President
and former Director of Human Resources
of Televisa
    
    March 1992Alejandro Quintero Iñiguez       (02/11/50)
    
    Corporate Vice President of
Sales and Marketing of Grupo
Televisa
    
    Member of the Board and of the
Executive Committee of Grupo Televisa,
Stockholder and Member of the Board of
Grupo TV Promo, S.A. de C.V. and former
advisor to former Mexican President
Ernesto Zedillo
    
    April 1998Francisco Javier
Mérida Guzmán
     (07/31/67)
    
    Chief Executive Officer of
Sistema Radiópolis
    
    Former General Director of Cadena SER
Former National Sales Manager of Cadena
SER
    
    October 2006Alexandre Moreira Penna
     (12/25/54)
    
    Chief Executive Officer of Innova
    
    Former Vice President of Corporate
Finance of Grupo Televisa and former
Managing Director of JPMorgan Chase
    
    January 2004
 Compensation of Directors and Officers
    Use of Certain Assets and Services
  86




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Stock Purchase Plan
     87




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##### Table of Contents



Long-Term Retention Plan
    Share Ownership of Directors and Officers
  Employees and Labor Relations
  Year Ended December 31,2004
    
    2005
    
    2006Total number of employees
    
    
    14,140
    
    
    
    15,076
    
    
    
    16,205Category of activity:Employees
    
    
    14,104
    
    
    
    15,042
    
    
    
    16,170Executives
    
    
    36
    
    
    
    34
    
    
    
    35Geographic location:
 88




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##### Table of Contents



Year Ended December 31,2004
    
    2005
    
    2006Mexico
    
    
    12,769
    
    
    
    13,680
    
    
    
    14,629Latin America (other than Mexico)
    
    
    965
    
    
    
    954
    
    
    
    1,131U.S
    
    
    398
    
    
    
    435
    
    
    
    437Spain
    
    
    8
    
    
    
    7
    
    
    
    8
  89




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##### Table of Contents



Item 7. Major Stockholders and Related Party Transactions
  AggregatePercentage ofShare Beneficially Owned(1)(2)
    
    OutstandingA Shares
    
    B Shares
    
    D Shares
    
    L Shares
    
    SharesPercentage
    
    
    
    
    
    Percentage
    
    
    
    
    
    Percentage
    
    
    
    
    
    Percentage
    
    BeneficiallyIdentity of Owner
    
    Number
    
    of Class
    
    Number
    
    of Class
    
    Number
    
    of Class
    
    Number
    
    of Class
    
    OwnedAzcárraga Trust(3)
    
    
    52,991,825,693
    
    
    
    43.7
    %
    
    
    67,814,604
    
    
    
    0.1
    %
    
    
    107,886,870
    
    
    
    0.1
    %
    
    
    107,886,870
    
    
    
    0.1
    %
    
    
    15.1
    %Inbursa Trust(3)
    
    
    1,657,549,900
    
    
    
    1.4
    %
    
    
    1,458,643,912
    
    
    
    2.5
    %
    
    
    2,320,569,860
    
    
    
    2.7
    %
    
    
    2,320,569,860
    
    
    
    2.7
    %
    
    
    2.2
    %Investor Trust(3)
    
    
    
    
    
    
    0.0
    %
    
    
    
    
    
    
    0.0
    %
    
    
    
    
    
    
    0.0
    %
    
    
    
    
    
    
    0.0
    %
    
    
    0.0
    %Morgan Stanley Investment Management Inc.(4)
    
    
    3,677,147,625
    
    
    
    3.0
    %
    
    
    3,235,889,910
    
    
    
    5.6
    %
    
    
    5,148,006,675
    
    
    
    5.9
    %
    
    
    5,148,006,675
    
    
    
    5.9
    %
    
    
    4.9
    %Capital Research and Management Co. (5)
    
    
    3,250,400,000
    
    
    
    2.7
    %
    
    
    2,860,352,000
    
    
    
    5.0
    %
    
    
    4,550,560,000
    
    
    
    5.2
    %
    
    
    4,550,560,000
    
    
    
    5.2
    %
    
    
    4.3
    %Cascade Investment, L.L.C.(6)
    
    
    3,173,600,000
    
    
    
    2.6
    %
    
    
    2,792,768,000
    
    
    
    4.9
    %
    
    
    4,443,040,000
    
    
    
    5.1
    %
    
    
    4,443,040,000
    
    
    
    5.1
    %
    
    
    4.2
    %
 
 (1)
    
    Unless otherwise indicated, the information presented in this section is based on the number of shares
authorized, issued and outstanding as of May 31, 2007. The number of shares issued and outstanding for legal
purposes as of May 31, 2007 was 62,461,173,050 series A Shares, 54,965,832,284 series B Shares, 87,445,642,270
series D Shares and 87,445,642,270 series L Shares, in the form of CPOs, and an additional 58,926,613,375 series
A Shares, 2,357,207,692 series B Shares, 238,595 series D Shares and 238,595 series L Shares not in the form of
CPOs. For financial reporting purposes under Mexican FRS only, the number of shares authorized, issued and
outstanding as of May 31, 2006 was 60,007,307,400 series A Shares, 52,806,430,512 series B Shares, 84,010,230,360
series D Shares and 84,010,230,360 series L Shares in the form of CPOs, and an additional 52,915,848,965 series A
Shares, 186,537 series B Shares, 238,541 series D Shares and 238,541 series L Shares not in the form of CPOs. The
number of shares authorized, issued and outstanding for financial reporting purposes under Mexican FRS as of May
31, 2007 does not include: (i) 31,319,122 CPOs and an additional 516,887,975 series A Shares, 20,675,534 series B
Shares, 25 series D Shares and 25 series L Shares not in the form of CPOs acquired by one of our subsidiaries,
Televisa, S.A. de C.V., substantially all of which are currently held by the trust created to implement our stock
purchase plan; and (ii) 66,835,504 CPOs and an additional 5,493,876,435 series A Shares, 2,336,345,621 series B
Shares, 29 series D Shares and 29 series L Shares not in the form of CPOs acquired by the trust we created to
implement our long-term retention plan. See Notes 2 and 12 to our year-end financial statements.(2)
    
    Except indirectly through the Stockholder Trust, none of our directors and executive officers currently
beneficially owns more than 1% of our outstanding A Shares, L Shares or D Shares. See Management  Share
Ownership of Directors and Officers. This information is based on information provided by directors and
executive officers.(3)
    
    For a description of the Stockholder Trust, see  The Major Stockholders below.(4)
    
    Based solely on information included in the Report on Form 13F filed on March 31, 2007 by Morgan Stanley
Investment Management, Inc.(5)
    
    Based solely on information included in the Report on Form 13F filed on March 31, 2007 by Capital Research and
Management Co.(6)
    
    Based solely on information included in the Report on Form 13F filed on March 31, 2007 by Cascade Investment, LLC. 
 The Major Stockholders
   90




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91




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Related Party Transactions
 Transactions and Arrangements With Innova.
 Capital Contributions and Loans.
 
    
    News Corp. contributed to Innova an account receivable of U.S.$15 million owed to News
Corp. by Sky DTH, S. de R.L. de C.V., or Sky DTH;
    
    We assigned to Sky DTH an account receivable of U.S.$15 million owed to us by Innova; and
    
    Innova, Innova Holdings, News Corp., Liberty Media and Sky DTH agreed that the obligation
owed by Innova to Sky DTH and the obligation owed by Sky DTH to Innova would be set off
against each other and cancelled.
  Programming.
  Advertising Services.
 92




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##### Table of Contents



Guarantees.
  Tax Sharing Agreement.
  Transactions and Arrangements With MCOP.
 Capital Contributions and Loans.
 Programming.
 Guarantees.
 93




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##### Table of Contents



Transactions and Arrangements With TechCo.
 Capital Contributions and Loans.
 Guarantees.
  Transactions and Arrangements With Univision.
  Transactions
and Arrangements With Vuela.
  Transactions
and Arrangements With Our Directors and Officers.
   94




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##### Table of Contents



Transactions and Arrangements With Affiliates and Related Parties of Our Directors, Officers and
Major Stockholders
 Production Services. telenovela telenovela telenovela telenovela
 Consulting Services.
 Loans from Banamex.
 Advertising Services.
  95




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Agency Services.
  Legal and Advisory Services.
 Potential Sale of Property.
 96




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##### Table of Contents



Item 8. Financial Information
  
 Item 9. The Offer and Listing
 
 Trading History of CPOs and GDSs
   Nominal Pesos per CPO(1)High
    
    Low2002
    
    Ps.
    22.31
    
    
    Ps.
    12.442003
    
    Ps.
    23.56
    
    
    Ps.
    12.632004
    
    Ps.
    34.93
    
    
    Ps.
    22.22First Quarter
    
    
    26.35
    
    
    
    22.22Second Quarter
    
    
    26.74
    
    
    
    22.73Third Quarter
    
    
    30.15
    
    
    
    24.82Fourth Quarter
    
    
    34.93
    
    
    
    30.24December
    
    
    34.86
    
    
    
    32.712005
    
    Ps.
    44.13
    
    
    Ps.
    29.20First Quarter
    
    
    36.27
    
    
    
    31.67Second Quarter
    
    
    34.27
    
    
    
    29.20Third Quarter
    
    
    39.23
    
    
    
    33.40Fourth Quarter
    
    
    44.13
    
    
    
    36.51December
    
    
    44.13
    
    
    
    41.672006
    
    Ps.
    60.88
    
    
    Ps.
    37.67First Quarter
    
    
    44.96
    
    
    
    40.49Second Quarter
    
    
    49.72
    
    
    
    37.67Third Quarter
    
    
    47.00
    
    
    
    39.89Fourth Quarter
    
    
    60.88
    
    
    
    46.17December
    
    
    60.88
    
    
    
    57.882007
(through June 22, 2007)
    
    Ps.
    68.10
    
    
    Ps.
    58.50First Quarter
    
    
    66.68
    
    
    
    58.50January
    
    
    64.98
    
    
    
    58.50February
    
    
    66.68
    
    
    
    61.10March
    
    
    65.90
    
    
    
    58.99Second
Quarter (through June 22, 2007)
    
    
    68.10
    
    
    
    58.64April
    
    
    68.10
    
    
    
    61.50May
    
    
    65.44
    
    
    
    60.34June
(through June 22, 2007)
    
    
    62.06
    
    
    
    58.64
 
 (1)
    
    Source: Mexican Stock Exchange. 97




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U.S. Dollars per GDS(1)High
    
    Low2002
    
    U.S.$
    12.1625
    
    
    U.S.$
    6.0752003
    
    U.S.$
    10.5675
    
    
    U.S.$
    5.8152004
    
    U.S.$
    15.6625
    
    
    U.S.$
    9.8075First Quarter
    
    
    11.835
    
    
    
    10.02Second Quarter
    
    
    11.915
    
    
    
    9.8075Third Quarter
    
    
    13.225
    
    
    
    10.8975Fourth Quarter
    
    
    15.6625
    
    
    
    13.31December
    
    
    15.6625
    
    
    
    14.38252005
    
    U.S.$
    20.775
    
    
    U.S.$
    13.1875First Quarter
    
    
    16.39
    
    
    
    14.125Second Quarter
    
    
    15.5225
    
    
    
    13.1875Third Quarter
    
    
    18.165
    
    
    
    15.5825Fourth Quarter
    
    
    20.775
    
    
    
    16.7025December
    
    
    20.775
    
    
    
    19.9352006
    
    U.S.$
    28.20
    
    
    U.S.$
    16.38First Quarter
    
    
    21.35
    
    
    
    18.77Second Quarter
    
    
    22.87
    
    
    
    16.38Third Quarter
    
    
    21.51
    
    
    
    18.11Fourth Quarter
    
    
    28.20
    
    
    
    21.13December
    
    
    28.20
    
    
    
    26.652007
(through June 22, 2007)
    
    U.S.$
    31.14
    
    
    U.S.$
    26.35First Quarter
    
    
    30.12
    
    
    
    26.35January
    
    
    29.48
    
    
    
    27.00February
    
    
    30.12
    
    
    
    27.23March
    
    
    29.82
    
    
    
    26.35Second
Quarter (through June 22, 2007)
    
    
    31.14
    
    
    
    26.76April
    
    
    31.14
    
    
    
    28.05May
    
    
    30.36
    
    
    
    27.90June
(through June 22, 2007)
    
    
    28.87
    
    
    
    26.76
 
 (1)
    
    Source: NYSE.  98




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Trading on the Mexican Stock Exchange
 Overview
 sociedad anónima capital variable
   Market Regulation and Registration Standards
 Comisión Nacional de Valores Comisión Nacional Bancaria sociedades anónimas de capital variable
 3 4 3 4 3 4 3 4 3 4
  circulares
 99




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##### Table of Contents




    
    a minimum number of years of operating history;
    
    a minimum financial condition;
    
    a minimum number of shares or CPOs to be publicly offered to public investors;
    
    a minimum price for the securities to be offered;
    
    a minimum of 15% of the capital stock placed among public investors;
    
    a minimum of 200 holders of shares or of shares represented by CPOs, who are deemed
to be public investors under the General CNBV Rules, upon the completion of the offering;
    
    the following distribution of the securities offered pursuant to an offering in
Mexico: (i) at least 50% of the total number of securities offered must be placed among
investors who acquire less than 5% of the total number of securities offered; and (ii) no
investor may acquire more than 40% of the total number of securities offered; and
    
    complied with certain corporate governance requirements.
  
    
    a minimum financial condition;
    
    minimum operating conditions, including a minimum number of trades;
    
    a minimum trading price of its securities;
    
    a minimum of 12% of the capital stock held by public investors;
    
    a minimum of 100 holders of shares or of shares represented by CPOs who are deemed
to be public investors under the General CNBV Rules; and
    
    complied with certain corporate governance requirements.
   Sistema
Electrónico de Envío y Difusión de Información
 100




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##### Table of Contents



Sistema Electrónico de Comunicación con Emisores de Valores Sistema de Información Financiera Computarizada
  
    
    the entering into or termination of joint venture agreements or agreements with key suppliers;
    
    the creation of new lines of businesses or services;
    
    significant deviations in expected or projected operating performance;
    
    the restructuring or payment of significant indebtedness;
    
    material litigation or labor conflicts;
    
    changes in dividend policy;
    
    the commencement of any insolvency, suspension or bankruptcy proceedings;
    
    changes in the directors; and
    
    any other event that may have a material adverse effect on the results, financial
condition or operations of the relevant issuer.
   
    
    if the issuer does not adequately disclose a material event; or
    
    upon price or volume volatility or changes in the offer or demand in respect of the
relevant securities, which are not consistent with the historic performance of the
securities and could not be explained solely by the information made publicly available
under the General CNBV Rules.
  101




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102




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Item 10. Additional Information
 
 Mexican Securities Market Law
     
    
    members of a listed issuers board of directors,
    
    stockholders controlling 10% or more of a listed issuers outstanding share capital,
    
    advisors,
    
    groups controlling 25% or more of a listed issuers outstanding share capital and
    
    other insiders
    103




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Bylaws
  Organization and Register
 sociedad anónima bursátil folio mercantil
  Voting Rights and Stockholders Meetings
 Holders of A Shares
 Holders of B Shares
 Holders of D Shares and L Shares
 
    
    our transformation from one type of company to another;
    
    any merger (even if we are the surviving entity);
    
    extension of our existence beyond our prescribed duration;
    
    our dissolution before our prescribed duration (which is currently December);
 104




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
    
    a change in our corporate purpose;
    
    a change in our nationality; and
    
    the cancellation from registration of the D Shares or the securities which represent the
D Shares with the securities or special section of the National Registry of Securities, or
NRS, and with any other Mexican or foreign stock exchange in which such shares or securities
are registered.
  
    
    our transformation from one type of company to another;
    
    any merger in which we are not the surviving entity; and
    
    the cancellation from registration of the L Shares or the securities that represent the L
Shares with the special section of the NRS.
  Other Rights of Stockholders
  Holders of CPOs
 105




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Holders of GDRs
   
 106




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Dividend Rights
  Preferential Rights of D Shares
  
    
    first, to the payment of dividends with respect to the A Shares, the B Shares and the L
Shares, in an equal amount per share, up to the amount of the D Share fixed preferred
dividend; and
    
    second, to the payment of dividends with respect to the A Shares, B Shares, D Shares and
L Shares, such that the dividend per share is equal.
  
    
    accrued but unpaid dividends in respect of their D Shares; plus
    
    the theoretical value of their D Shares as set forth in our bylaws. See  Other Provisions  Dissolution or Liquidation.
 Limitation on Capital Increases
  Preemptive Rights
 Diario Oficial de la Federación
 107




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Limitations on Share Ownership
     108




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##### Table of Contents



Other Provisions
 Forfeiture of Shares
 
    
    to be considered as Mexicans with respect to the L Shares and CPOs that they acquire or
hold, as well as to the property, rights, concessions, participations or interests owned by
us or to the rights and obligations derived from any agreements we have with the Mexican
government; and
    
    not to invoke the protection of their own governments with respect to their ownership of
L Shares and CPOs.
  Exclusive Jurisdiction
 Duration
 Dissolution or Liquidation
 Redemption
 
    
    any redemption shall be made on a pro-rata basis among all of our stockholders;
    
    to the extent that a redemption is effected through a public tender offer on the Mexican
Stock Exchange, the stockholders resolution approving the redemption may empower our Board
to specify the number of shares to be redeemed and appoint the related intermediary or
purchase agent; and
    
    any redeemed shares must be cancelled.
 Share Repurchases
 Conflicts of Interest
 109




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Appraisal Rights and Other Minority Protections
   
    
    holders of at least 10% of our outstanding capital stock to request our Chairman of the
Board or of the Audit and Corporate Practices Committee to call a stockholders meeting in
which they are entitled to vote;
    
    subject to the satisfaction of certain requirements under Mexican law, holders of at
least 5% of our outstanding capital stock to bring an action for civil liabilities against
our directors;
    
    holders of at least 10% of our Shares that are entitled to vote and are represented at a
stockholders meeting to request postponement of resolutions with respect to any matter on
which they were not sufficiently informed; and
    
    subject to the satisfaction of certain requirements under Mexican law, holders of at
least 20% of our outstanding capital stock to contest and suspend any stockholder
resolution.
  Antitakeover Protections
 General
 110




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Board Notices, Meetings, Quorum Requirements and Approvals
  Stockholder Notices, Meetings, Quorum Requirements and Approvals
 111




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Mandatory Tender Offers in the Case of Certain Acquisitions
 Exceptions
 Amendments to the Antitakeover Provisions
 
 Enforceability of Civil Liabilities
  112




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Material Contracts
        
 Legal Proceedings
 Secretaría de Hacienda y Crédito Público
 113




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La Lupa
 El Chavo
del 8, El Chapulin Colorado Chespirito
    114




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New York Stock Exchange Corporate Governance Standards
  Bolsa Mexicana de
Valores Código de Mejores Prácticas Corporativas
  NYSE rules
    
    Mexican rulesListed companies must have a majority of independent directors
    
    The Mexican Securities Market Law
requires that listed companies have
at least 25% of independent
directors. Our stockholders meeting
is required to make a determination
as to the independence of the
directors. The definition of
independence under the Mexican
Securities Market Law differs in some
aspects from the one applicable to
U.S. issuers under the NYSE standard
and prohibits, among other
relationships, an independent
director from
 115




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NYSE rules
    
    Mexican rulesbeing an employee or
officer of the company or a
stockholder that may have influence
over our officers, relevant clients
and contractors, as well as certain
relationships between the independent
director and family members of the
independent director. In addition,
our bylaws broaden the definition of
independent director. Our bylaws
provide for an executive committee of
our board of directors. The executive
committee is currently composed of
six members, and there are no
applicable Mexican rules that require
any of the members to be independent.
The executive committee may generally
exercise the powers of our board of
directors, subject to certain
exceptions. Our Chief Executive
Officer is a member of our board of
directors and the executive
committee.Listed companies must have a nominating/corporate governance
committee composed entirely of independent directors.
    
    Listed companies are required to have
a corporate practices committee.Listed companies must have a compensation committee composed
entirely of independent directors.
    
    The Mexican Code of Best Corporate
Practices recommends listed companies
to have a compensation committee.
While these rules are not legally
binding, companies failing to comply
with the Codes recommendation must
disclose publicly why their practices
differ from those recommended by the
Code.Listed companies must have an audit committee with a minimum of
three members and must be independent.
    
    The Mexican Securities Market Law
requires that listed companies must
have an audit committee. The Chairman
and the majority of the members must
be independent.Non-management directors must meet at regularly scheduled executive
sessions without management.
    
    Our non-management directors are not
required to meet at executive
sessions. The Mexican Code of Best
Corporate Practices does not
expressly recommend executive
sessions.Listed companies must adopt and disclose a code of business conduct
and ethics for directors, officers and employees, and promptly
disclose any waivers of the code for directors or executive
officers.
    
    Companies listed on the Mexican Stock
Exchange are not required to adopt a
code of ethics. However, we have
adopted a code of ethics which is
available free of charge through our
offices. See Item 16B Code of
Ethics for directions on how to
obtain a copy of our code of ethics.
Waivers involving any of our
executive officers or directors will
be made only by our Board of
Directors or a designated committee
of the Board.
 
 Exchange Controls
  
 Taxation
 U.S. Taxes
 General.
 116




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
    
    that owns, directly, indirectly or through attribution, 2% or more of the total
voting power or value of our outstanding Underlying Shares (including through ownership
of GDSs);
    
    that is a dealer in securities, insurance company, financial institution,
tax-exempt organization, U.S. expatriate, broker-dealer or trader in securities; or
    
    whose functional currency is not the U.S. Dollar.
  
    
    the tax consequences to the stockholders, partners or beneficiaries of a U.S. Holder; or
    
    special tax rules that may apply to a U.S. Holder that holds GDSs, CPOs or
Underlying Shares as part of a straddle, hedge, conversion transaction, synthetic
security or other integrated investment.
   
    
    the U.S. Internal Revenue Code of 1986, as amended, applicable U.S. Treasury
regulations and judicial and administrative interpretations, and
    
    the convention between the Government of the United States of America and the
Government of the United Mexican States for the Avoidance of Double Taxation and the
Prevention of Fiscal Evasion with respect to Taxes on Income, including the applicable
protocols, collectively referred to herein as the tax treaty,
 and is subject to changes to those laws and the tax treaty subsequent to the date of this annual
report, which changes could be made on a retroactive basis; and
 
    
    is also based, in part, on the representations of the depositary with respect to
the GDSs and on the assumption that each obligation in the deposit agreement relating to
the GDSs and any related agreements will be performed in accordance with their terms.
  
    
    a citizen or individual resident of the United States;
    
    a corporation (or entity treated as a corporation for such purposes) created or
organized in or under the laws of the United States, or any State thereof or the District
of Columbia;
    
    an estate the income of which is included in gross income for U.S. federal income
tax purposes regardless of source; or
    
    a trust, if either (x) it is subject to the primary supervision of a court within
the United States and one or more United States persons has the authority to control
all substantial decisions of the trust or (y) it has a valid election in effect under
applicable U.S. Treasury regulations to be treated as a United States person.
  117




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
    
    is not a resident of Mexico for purposes of the tax treaty;
    
    is an individual who has a substantial presence in the United States;
    
    is entitled to the benefits of the tax treaty under the limitation on benefits
provision contained in Article 17 of the tax treaty; and
    
    does not have a fixed place of business or a permanent establishment in Mexico with
which its ownership of CPOs, GDSs or Underlying Shares is effectively connected.
  Dividends.
   118




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##### Table of Contents



Capital Gains.
    
    
    the gain is effectively connected with the beneficial owners conduct of a trade
or business in the United States; or
    
    the beneficial owner is an individual who holds CPOs, GDSs or Underlying Shares as
a capital asset, is present in the United States for 183 days or more in the taxable year
of the sale or exchange and meets other requirements.
 U.S. Backup Withholding.
 
    
    is a corporation or comes within an exempt category; or
    
    provides a taxpayer identification number, certifies as to no loss of exemption
from backup withholding tax and otherwise complies with the applicable requirements of
the backup withholding rules.
  Federal Mexican Taxation
 General.
  119




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
    
    an individual is a Mexican tax resident if the individual has established his home
in Mexico. When an individual, in addition to his home in Mexico, has a home in another
country, the individual will be a Mexican tax resident if his center of vital interests
is located in Mexico. This will be deemed to occur if, among other circumstances, either
(i) more than 50% of the total income obtained by the individual in the calendar year is
Mexican source; or (ii) when the individuals center of professional activities is
located in Mexico. Unless otherwise proven, a Mexican national is considered a Mexican
tax resident.
    
    a legal entity is considered a Mexico tax resident if it maintains the main
administration of its head office, business, or the effective location of its management
in Mexico.
    
    a foreign person with a permanent establishment in Mexico will be required to pay
taxes in Mexico in accordance with the Mexican Tax Legislation for income attributable to
such permanent establishment; and
    
    a foreign person without a permanent establishment in Mexico will be required to
pay taxes in Mexico in respect of revenues proceeding from sources of wealth located in
national territory.
 Dividends.
 cuenta de
utilidad fiscal neta
 Sales or Other Dispositions.
   Other Mexican Taxes.
 
 Documents on Display
  120




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Item 11. Quantitative and Qualitative Disclosures About Market Risk
 Market Risk Disclosures
  Risk Management.
    Foreign Currency, Exchange Rate Risk
  121




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Interest Rate Risk
    Inflation Rate Risk
  Common Stock Price Risk
   122




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Sensitivity and Fair Value Analyses
  Fair Value at December 31,2005
    
    
    2006
    
    
    2006(millions of Pesos in purchasing power as ofDecember 31, 2006 or millions of U.S. Dollars)(1)Assets:Temporary investments(2)
    
    Ps
    . 14,810.3
    
    
    Ps
    . 15,134.9
    
    
    
    U.S.$1,401.0Liabilities:U.S. Dollar-denominated debt:Long-term debt securities
    
    
    60.5
    
    
    
    
    
    
    
    Senior Notes due 2011(3)
    
    
    932.4
    
    
    
    849.0
    
    
    
    78.6Senior Notes due 2032(4)
    
    
    3,960.7
    
    
    
    4,034.7
    
    
    
    373.5Innovas Senior Notes due 2013(5)
    
    
    3,662.1
    
    
    
    128.2
    
    
    
    11.9Senior Notes due 2025(7)
    
    
    6,844.8
    
    
    
    6,795.1
    
    
    
    629.0Peso-denominated debt:UDI-denominated long-term loan
facility(8)
    
    
    1,043.5
    
    
    
    996.5
    
    
    
    92.2Long-term notes payable to
Mexican Banks(6)
    
    
    4,124.8
    
    
    
    7,323.6
    
    
    
    677.9
 
 (1)
    
    Peso amounts have been converted to U.S. Dollars solely for
the convenience of the reader at a nominal exchange rate of
Ps.10.8025 per U.S. Dollar, the Interbank Rate as of December 31,
2006.(2)
    
    At December 31, 2006, our temporary investments consisted of
fixed rate short-term deposits in commercial banks (primarily
Peso- and U.S. Dollar-denominated in 2005 and 2006). Given the
short-term nature of these investments, an increase in U.S.
and/or Mexican interest rates would not significantly decrease
the fair value of these investments.(3)
    
    At December 31, 2006, fair value exceeded the carrying value of
these notes by approximately Ps.71.7 million (U.S.$6.6 million).
The increase in the fair value of these notes of a hypothetical
10% increase in the quoted market price of these notes would
amount to approximately Ps.156.6 million (U.S.$14.5 million) at
December 31, 2006.(4)
    
    At December 31, 2006, fair value exceeded the carrying value of
these notes by approximately Ps.794.0 million (U.S.$73.5
million). The increase in the fair value of these notes of a
hypothetical 10% increase in the quoted market price of these
notes would amount to approximately Ps.1,197.5 million
(U.S.$110.8 million) at December 31, 2006.(5)
    
    At December 31, 2006, fair value exceeded the carrying value of
these notes by approximately Ps.6.7 million (U.S.$0.8 million).
The increase in the fair value of these notes of a hypothetical
10% increase in the quoted market price of these notes would
amount to approximately Ps.19.5 million (U.S.$2.0 million) at
December 31, 2006.(6)
    
    At December 31, 2006, fair value exceeded the carrying value of
these notes by approximately Ps.181.2 million (U.S.$16.8
million). At December 31, 2006, a hypothetical 10% increase in
Mexican interest rates would increase the fair value of these
notes by approximately Ps.913.5 million (U.S.$84.6 million) at
December 31, 2006.(7)
    
    At December 31, 2006, fair value exceeded the carrying value of
these notes by approximately Ps.313.6 million (U.S.$29.0
million). An increase in the fair value of these notes due to a
hypothetical 10% increase in the quoted market price of these
notes would amount to approximately Ps.993.1 million (U.S.$91.9
million) at December 31, 2006.(8)
    
    At December 31, 2006, fair value exceeded carrying value of
amounts outstanding under this loan by approximately Ps.16.3
million (U.S.$1.5 million). At December 31, 2006, a hypothetical
10% increase in the Mexican inflation rate to 3.6% for the year
2006 would increase principal amounts outstanding under this
UDI-denominated long-term loan facility by approximately
Ps.115.90 million (U.S.$10.7 million). An inflation rate of less
than 4.0% is forecasted by the Mexican government for 2006. We
entered into inflation swap agreements to fix the inflation rate
on this UDI-denominated facility at an annual rate of
approximately 4%, however, we terminated these derivative
agreements in March 2005. 123




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##### Table of Contents



Year Ended December 31,2005
    
    
    2006(in millions of U.S. Dollars)U.S. Dollar-denominated short-term investments and long-term notes
receivable
    
    
    U.S.$682.9
    
    
    
    U.S.  $2,462.5U.S. Dollar-denominated senior debt securities and other notes payable
    
    
    1,563.5
    
    
    
    1,289.0880.6
    
    
    
    (1,173.5
    )Derivative instruments, net
    
    
    (8.0
    )
    
    
    (6.3
    )Net liability (asset) position
    
    
    U.S.$872.6
    
    
    
    U.S.$(1,179.8
    )
  
 Item 12. Description of Securities Other than Equity Securities
  
 Part II
 
 Item 13. Defaults, Dividend Arrearages and Delinquencies
  
 Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds
  Item 15.
Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
  Managements Report on Internal Control Over Financial Reporting
  Internal
Control  Integrated Framework
   124




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Item 16A. Audit Committee Financial Expert
  
 Item 16B. Code of Ethics
   
 
 Item 16C. Principal Accountant Fees and Services
   2005
    
    
    2006(in millions of Pesos in purchasing poweras of December 31, 2006)Audit Fees
    
    Ps.
    41.4
    
    
    Ps.
    51.8Audit-Related Fees
    
    
    3.6
    
    
    
    0.9Tax Fees
    
    
    3.9
    
    
    
    4.8Other Fees
    
    
    12.0
    
    
    
    21.7Total
    
    Ps.
    60.9
    
    
    Ps.
    79.2
    125




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Audit Committee Pre-approval Policies and Procedures
   
 Item 16D. Exemptions from the Listing Standards for Audit Committees
  126




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Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers]
  Purchases of Equity Securities by Televisa(3)
 Maximum Number (orTotal Number of
    
    Appropriate Mexican PesoCPOs
    
    Value) of CPOsTotal Number
    
    
    
    
    
    Purchased as part of
    
    that May Yet Beof CPOs
    
    Average Price
    
    Publicly Announced
    
    Purchased Under thePurchase Date
    
    Purchased
    
    Paid per CPO(1)
    
    Plans or Programs
    
    Plans or Programs (2)January 1 to
January 31
    
    
    2,244,100
    
    
    
    42.490840
    
    
    
    80,494,600
    
    
    Ps.
    1,933,286,837February 1 to February
29
    
    
    
    
    
    
    
    
    
    
    80,494,600
    
    
    
    1,933,286,837March 1 to March 31
    
    
    1,434,300
    
    
    
    41.386854
    
    
    
    81,928,900
    
    
    
    1,873,925,671April 1 to April 30
    
    
    
    
    
    
    
    
    
    
    81,928,900
    
    
    
    1,873,925,671May 1 to May 31
    
    
    
    
    
    
    
    
    
    
    81,928,900
    
    
    
    1,873,925,671June 1 to June 30
    
    
    
    
    
    
    
    
    
    
    81,928,900
    
    
    
    1,873,925,671July 1 to July 31
    
    
    7,670,000
    
    
    
    41.264132
    
    
    
    89,598,900
    
    
    
    1,557,429,764August 1 to August 31
    
    
    21,373,900
    
    
    
    41.631392
    
    
    
    110,972,800
    
    
    
    667,604,567September 1 to
September 30
    
    
    15,052,700
    
    
    
    44.488780
    
    
    
    126,025,500
    
    
    
    2,293,676,390October 1 to October 31
    
    
    3,400,000
    
    
    
    46.962657
    
    
    
    129,425,500
    
    
    
    2,134,003,451November 1 to November
30
    
    
    3,310,100
    
    
    
    54.644110
    
    
    
    132,735,600
    
    
    
    1,953,125,988December 1 to December
31
    
    
    2,900,000
    
    
    
    59.676881
    
    
    
    135,635,600
    
    
    
    1,780,063,039Total
    
    
    57,385,100
    
    
    Ps.
    44.337741
    
    
    
    135,635,600
    
    
    Ps.
    1,780,063,039
 
 (1)
    
    The values have not been restated in constant Mexican Pesos and therefore represent nominal
historical figures.(2)
    
    Our share repurchase program was announced in September of 2002 and is set to expire December
31, 2008. Our share repurchase program is limited to a total amount of U.S.$400 million. The
total amount of our share repurchase program was updated in accordance with the resolution of the Grupo Televisa
S.A.B.s general stockholders meeting, held on April 28, 2006.(3)
    
    Table does not include repurchases or purchases by the special purpose trust formed in
connection with our stock purchase plan. 127




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Purchases of Equity Securities by Special Purpose Trust
formed in connection with Stock Purchase Plan(1)
 CPOs
 Maximum Number (orAppropriate Mexican PesoTotal Number of
    
    Value) of CPOsTotal Number
    
    
    
    
    
    CPOs
    
    that May Yet Beof CPOs
    
    Average Price
    
    Purchased as part of
    
    Purchased Under thePurchase Date
    
    Purchased
    
    Paid per CPO (2)
    
    the Stock Purchase Plan
    
    Stock Purchase Plan(3)January 1 to
January 31
    
    
    725,700
    
    
    Ps.
    42.801465
    
    
    
    56,079,000February 1 to February 29
    
    
    150,000
    
    
    
    41.624000
    
    
    
    56,229,000March 1 to March 31
    
    
    325,000
    
    
    
    41.609883
    
    
    
    56,554,000April 1 to April 30
    
    
    20,000
    
    
    
    43.150000
    
    
    
    56,574,000May 1 to May 31
    
    
    
    
    
    
    
    
    
    
    56,574,000June 1 to June 30
    
    
    
    
    
    
    
    
    
    
    56,574,000July 1 to July 31
    
    
    1,100,000
    
    
    
    41.236002
    
    
    
    57,674,000August 1 to August 31
    
    
    1,128,300
    
    
    
    40.830454
    
    
    
    58,802,300September 1 to September
30
    
    
    
    
    
    
    
    
    
    
    58,802,300October 1 to October 31
    
    
    1,000
    
    
    
    46.500000
    
    
    
    58,803,300November 1 to November 30
    
    
    
    
    
    
    
    
    
    
    58,803,300December 1 to December 31
    
    
    360,000
    
    
    
    59.634361
    
    
    
    59,163,300Total
    
    
    3,810,000
    
    
    Ps.
    43.211105
    
    
    
    59,163,300
 
 (1)
    
    See Directors, Senior Management and Employees  Stock Purchase Plan for a description of
the implementation, limits and other terms of our Stock Purchase Plan.(2)
    
    The values have not been restated in constant Mexican Pesos and therefore represent nominal
historical figures.(3)
    
    Since the number of additional shares that may be issued pursuant to our Stock Purchase Plan
is affected by, among other things, the number of shares held by the special equity trust,
periodic grants made to certain executives, the performance of those executives and the number
of shares subject to other employee benefit
plans, it would be misleading to imply that there is a defined maximum number of shares that
remain to be purchased pursuant to our Stock Purchase Plan. 
 Part III
 
 Item 17. Financial Statements
  
 Item 18. Financial Statements
  
 Item 19. Exhibits
   128




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##### Table of Contents



ExhibitNumber
    
    
    
    Description of Exhibits1.1
    
    
    
    English translation of Amended and
Restated Bylaws (Estatutos Sociales) of the Registrant, dated as of December 21, 2006.2.1
    
    
    
    Indenture relating to Senior Debt
Securities, dated as of August 8, 2000, between the Registrant, as
Issuer, and The Bank of New York, as Trustee (previously filed with
the Securities and Exchange Commission as Exhibit 4.1 to the
Registrants Registration Statement on Form F-4 (File number 333-12738), as amended (the 2000 Form F-4), and incorporated herein by reference).2.2
    
    
    
    Third Supplemental Indenture
relating to the 8% Senior Notes due 2011, dated as of September 13, 2001, between the Registrant, as Issuer, and The Bank of New York and Banque
Internationale à Luxembourg, S.A. (previously filed with the Securities and Exchange
Commission as Exhibit 4.4 to the Registrants Registration Statement on Form F-4 (File
number 333-14200) (the 2001 Form F-4) and incorporated herein by reference).2.3
    
    
    
    Fourth Supplemental Indenture relating to the 8.5% Senior Exchange Notes due 2032 between
the Registrant, as Issuer, and The Bank of New York and Dexia Banque Internationale à
Luxembourg (previously filed with the Securities Exchange Commission as Exhibit 4.5 to the
Registrants Registration Statement on Form F-4 (the 2002
Form F-4) and incorporated herein by reference).2.4
    
    
    
    Fifth Supplemental Indenture
relating to the 8% Senior Notes due 2011 between Registrant, as
Issuer, and The Bank of New York and Dexia Banque Internationale
à Luxembourg (previously filed with the Securities and Exchange Commission as Exhibit 4.5 to the 2001 Form F-4 and incorporated herein by reference).2.5
    
    
    
    Sixth Supplemental Indenture
relating to the 8.5% Senior Notes due 2032 between Registrant, as
Issuer, and The Bank of New York and Dexia Banque Internationale
à Luxembourg (previously filed with the Securities and Exchange Commission as Exhibit 4.7 to the 2002 Form F-4 and incorporated herein by reference).2.6
    
    
    
    Seventh Supplemental Indenture
relating to the 6 5/8% Senior Notes due 2025 between Registrant, as
Issuer, and The Bank of New York and Dexia Banque Internationale
à Luxembourg, dated March 18, 2005 (previously filed with the
Securities and Exchange Commission as Exhibit 2.8 to the Registrants Annual Report on Form 20-F for the year ended December 31, 2004 (the 2004 Form 20-F) and incorporated herein by reference).2.7
    
    
    
    Eighth Supplemental Indenture
relating to the 6 5/8% Senior Notes due 2025 between Registrant, as
Issuer, and The Bank of New York and Dexia Banque Internationale
à Luxembourg, dated May 26, 2005 (previously filed with the Securities and Exchange Commission as Exhibit 2.9 to the 2004 Form 20-F and incorporated herein by reference).2.8
    
    
    
    Ninth Supplemental Indenture
relating to the 6 5/8% Senior Notes due 2025 between Registrant, as
Issuer, The Bank of New York and Dexia Banque Internationale à
Luxembourg, dated September 6, 2005 (previously filed with the Securities and Exchange Commission as Exhibit 2.8 to the
Registrants Annual Report on Form 20-F for the year ended December 31, 2005 (the 2005 Form 20-F) and incorporated herein by reference).2.9
    
    
    
    Tenth Supplemental Indenture
related to the 8.49% Senior Notes due 2037 between Registrant, as
Issuer, The Bank of New York and The Bank of New York (Luxembourg) S.A., dated as of May 9, 2007.2.10
    
    
    
    Form of Deposit Agreement between
the Registrant, JPMorgan Chase Bank, as depositary and all holders
and beneficial owners of the Global Depositary Shares, evidenced by
Global Depositary Receipts (previously filed with the Securities and Exchange Commission as an Exhibit to the Registrants
Registration Statement on Form F-6 (File number 333-99195) (the Form F-6) and incorporated herein by reference).4.1
    
    
    
    Form of Indemnity Agreement between
the Registrant and its directors and executive officers (previously
filed with the Securities and Exchange Commission as Exhibit 10.1 to
the Registrants Registration Statement on Form F-4 (File number 33-69636), as amended, (the 1993 Form F-4) and incorporated herein by reference).4.2
    
    
    
    Amended and Restated Collateral
Trust Agreement, dated as of June 13, 1997, as amended, among
PanAmSat Corporation, Hughes Communications, Inc., Satellite Company,
LLC, the Registrant and IBJ Schroder Bank and Trust Company (previously filed with the Securities and Exchange Commission as an
Exhibit to the Registrants Annual Report on Form 20-F for the
year ended December 31, 2001 (the 2001 Form 20-F) and incorporated herein by reference).4.3
    
    
    
    Amended and Restated Program
License Agreement, dated as of December 19, 2001, by and between Productora de
Teleprogramas, S.A. de C.V. and Univision Communications Inc. (Univision) (previously
filed with the Securities and Exchange Commission as Exhibit 10.7 to the 2001 Form F-4 and incorporated herein by reference).4.4
    
    
    
    Participation Agreement, dated as
of October 2, 1996, by and among Univision, Perenchio, the
Registrant, Venevision and certain of their respective affiliates (previously filed with the Securities and Exchange Commission as Exhibit 10.8 to
 129




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##### Table of Contents



ExhibitNumber
    
    
    
    Description of ExhibitsUnivisions Registration
Statement on Form S-1 (File number 333-6309) (the Univision Form S-1) and incorporated herein by reference).4.5
    
    
    
    Amended and Restated International
Program Rights Agreement, dated as of December 19, 2001, by and among Univision, Venevision and the Registrant (previously filed with the Securities
 and Exchange Commission as Exhibit 10.9 to the 2001 Form F-4 and
incorporated herein by reference).4.6
    
    
    
    Co-Production Agreement, dated as
of March 27, 1998, between the Registrant and Univision Network Limited Partnership (previously filed with the Securities and Exchange Commission
 as an Exhibit to Univisions Annual Report on Form 10-K for the
year ended December 31, 1997 and incorporated herein by reference).4.7
    
    
    
    Program License Agreement, dated as
of May 31, 2005, between Registrant and Univision (previously filed
with the Securities and Exchange Commission as Exhibit 4.7 to the 2005 Form 20-F and incorporated herein by reference).4.8
    
    
    
    Amended and Restated Bylaws
(Estatutos Sociales) of Innova, S. de R.L. de C.V.
(Innova) dated as of December 22, 1998 (previously filed
with the Securities and Exchange Commission as an Exhibit to Innovas Annual Report on Form 20-F for the year ended December 31, 2004 and incorporated herein by reference).4.9
    
    
    
    English translation of investment
agreement, dated as of March 26, 2006, between Registrant and M/A and
Gestora de Inversiones Audiovisuales La Sexta, S.A. (previously filed
with the Securities and Exchange Commission as Exhibit 4.7 to the 2005 Form 20-F and incorporated herein by reference).4.10
    
    
    
    English summary of Ps.1,162.5
million credit agreement, dated as of May 17, 2004, between the
Registrant and Banamex (the May 2004 Credit Agreement)
and the May 2004 Credit Agreement (in Spanish) (previously filed with the Securities and Exchange Commission as Exhibit 4.9 to the 2004 Form 20-F and incorporated herein by reference).4.11
    
    
    
    English summary of amendment to the
May Credit Agreement and the amendment to the May 2004 Credit
Agreement (in Spanish) (previously filed with the Securities and Exchange Commission as Exhibit 4.10 to the 2004 Form 20-F and incorporated herein by reference).4.12
    
    
    
    English summary of Ps.2,000.0
million credit agreement, dated as of October 22, 2004, between the
Registrant and Banamex (the October 2004 Credit
Agreement) and the October Credit Agreement (in Spanish) (previously filed with the Securities and Exchange Commission as Exhibit 4.11 to the 2004 Form 20-F and incorporated herein by reference).4.13
    
    
    
    English translation of Ps.2,100.0
million credit agreement, dated as of March 10, 2006, by and among
Innova, the Registrant and Banamex (previously filed with the
Securities and Exchange Commission as Exhibit 4.7 to the 2005 Form 20-F and incorporated herein by reference).4.14
    
    
    
    English summary of Ps.1,400.0
million credit agreement, dated as of April 7, 2006, by and among
Innova, the Registrant and Banco Santander Serfin, S.A. (the April 2006 Credit Agreement) and the April Credit Agreement (in Spanish) (previously filed with the
 Securities and Exchange Commission as Exhibit 4.7 to the 2005 Form
20-F and incorporated herein by reference).4.15
    
    
    
    Administration Trust Agreement
relating to Trust No. 80375, dated as of March 23, 2004, by and among
Nacional Financiera, S.N.C., as trustee of Trust No. 80370, Banco
Inbursa, S.A., as trustee of Trust No. F/0553, Banco Nacional de México, S.A., as trustee of Trust No. 14520-1, Nacional Financiera, S.N.C., as trustee of Trust No. 80375, Emilio Azcárraga Jean,
 Promotora Inbursa, S.A. de C.V.,
Grupo Televisa, S.A.B. and Grupo Televicentro, S.A. de C.V. (as
previously filed with the Securities and Exchange Commission as an
Exhibit to Schedules 13D or 13D/A in respect of various parties to the Trust Agreement (File number 005-60431) and incorporated herein by reference).8.1
    
    
    
    List of Subsidiaries of Registrant.12.1
    
    
    
    CEO Certification pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002, dated June 26, 2007.12.2
    
    
    
    CFO Certification pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002, dated June 26, 2007.13.1
    
    
    
    CEO Certification pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002, dated June 26, 2007.13.2
    
    
    
    CFO Certification pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002, dated June 26, 2007.
   130




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SIGNATURE
   GRUPO TELEVISA, S.A.B.By:
    
    /s/ Salvi Folch ViaderoName:
Title:
    
    Salvi Folch Viadero
Chief Financial OfficerBy:
    
    /s/ Joaquín Balcárcel Santa CruzName:
Title:
    
    Joaquín Balcárcel Santa Cruz
Vice President  Legal and General Counsel
 131




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##### Table of Contents



INDEX TO CONSOLIDATED FINANCIAL STATEMENTS OF
GRUPO TELEVISA, S.A.B.
 PageReport of Independent Registered Public Accounting Firm
    
    F-1Report of Independent Registered Public Accounting Firm of Univision Communications Inc.
    
    F-2Consolidated Balance Sheets as of December 31, 2005 and 2006
    
    F-3Consolidated Statements of Income for the Years Ended December 31, 2004, 2005 and 2006
    
    F-4Consolidated Statements of Changes in Stockholders Equity for the Years Ended December 31, 2004, 2005 and 2006
    
    F-5Consolidated Statements of Changes in Financial Position for the Years Ended December 31, 2004, 2005 and 2006
    
    F-6Notes to Consolidated Financial Statements for the Years Ended December 31, 2004, 2005 and 2006
    
    F-7




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##### Table of Contents





REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM






Consolidated financial statements








Internal control over financial reporting


Internal
Control-Integrated Framework Internal
Control-Integrated Framework









F-1



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##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
     
 F-2




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##### Table of Contents



GRUPO
TELEVISA, S.A.B.
 
 Consolidated Balance Sheets
As of December 31, 2005 and 2006
(In thousands of Mexican pesos in purchasing power as of December 31, 2006)
(Notes 1 and 2)
 2005
    
    
    2006ASSETSCurrent:Available:Cash
    
    
    
    
    
    Ps.
    566,655
    
    
    Ps.
    675,840Temporary investments
    
    
    
    
    
    
    14,810,279
    
    
    
    15,134,90815,376,934
    
    
    
    15,810,748Trade notes and accounts receivable, net
    
    (Note 3)
    
    
    14,459,545
    
    
    
    13,597,569Other accounts and notes receivable, net
    
    
    
    
    
    
    593,738
    
    
    
    1,488,340Due from affiliated companies
    
    (Note 16)
    
    
    336,273
    
    
    
    184,814Transmission rights and programming
    
    (Note 4)
    
    
    3,246,981
    
    
    
    3,053,174Inventories
    
    
    
    
    
    
    664,151
    
    
    
    772,890Available-for-sale investment
    
    (Note 5)
    
    
    
    
    
    
    11,821,932Other current assets
    
    
    
    
    
    
    601,498
    
    
    
    771,083Total current assets
    
    
    
    
    
    
    35,279,120
    
    
    
    47,500,550Transmission rights and programming, noncurrent
    
    (Note 4)
    
    
    4,079,892
    
    
    
    3,428,848Investments
    
    (Note 5)
    
    
    7,895,046
    
    
    
    5,710,663Property, plant and equipment, net
    
    (Note 6)
    
    
    20,528,184
    
    
    
    20,975,939Intangible assets and deferred charges, net
    
    (Note 7)
    
    
    10,419,131
    
    
    
    5,390,082Other assets
    
    
    
    
    
    
    20,528
    
    
    
    24,408Total assets
    
    
    
    
    
    Ps.
    78,221,901
    
    
    Ps.
    83,030,490LIABILITIESCurrent:Current portion of long-term debt
    
    (Note 8)
    
    Ps.
    354,256
    
    
    Ps.
    986,368Current portion of satellite transponder lease obligation
    
    (Note 8)
    
    
    78,668
    
    
    
    86,176Trade accounts payable
    
    
    
    
    
    
    3,074,484
    
    
    
    3,450,753Customer deposits and advances
    
    
    
    
    
    
    16,168,025
    
    
    
    16,893,604Taxes payable
    
    
    
    
    
    
    1,098,587
    
    
    
    1,179,477Accrued interest
    
    
    
    
    
    
    348,171
    
    
    
    262,064Due to affiliated companies
    
    (Note 16)
    
    
    810,655
    
    
    
    38,133Other accrued liabilities
    
    
    
    
    
    
    1,645,009
    
    
    
    2,047,737Total current liabilities
    
    
    
    
    
    
    23,577,855
    
    
    
    24,944,312Long-term debt, net of current portion
    
    (Note 8)
    
    
    18,872,379
    
    
    
    17,795,330Satellite transponder lease obligation, net of current portion
    
    (Note 8)
    
    
    1,235,042
    
    
    
    1,120,415Customer deposits and advances, noncurrent
    
    
    
    
    
    
    2,609,862
    
    
    
    268,200Other long-term liabilities
    
    
    
    
    
    
    480,074
    
    
    
    522,047Deferred taxes
    
    (Note 20)
    
    
    172,371
    
    
    
    1,488,778Pension plans, seniority premiums and severance indemnities
    
    (Note 10)
    
    
    199,949
    
    
    
    287,035Total liabilities
    
    
    
    
    
    
    47,147,532
    
    
    
    46,426,117Commitments and contingencies
    
    (Note 11)STOCKHOLDERS EQUITYCapital stock issued, no par value
    
    (Note 12)
    
    
    10,290,302
    
    
    
    10,126,212Additional paid-in capital
    
    
    
    
    
    
    4,383,180
    
    
    
    4,383,18014,673,482
    
    
    
    14,509,392Retained earnings:
    
    (Note 13)Legal reserve
    
    
    
    
    
    
    1,871,279
    
    
    
    2,058,060Reserve for repurchase of shares
    
    
    
    
    
    
    5,977,422
    
    
    
    4,459,258Unappropriated earnings
    
    
    
    
    
    
    12,313,812
    
    
    
    16,715,254Net income for the year
    
    
    
    
    
    
    6,373,822
    
    
    
    8,586,18826,536,335
    
    
    
    31,818,760Accumulated other comprehensive loss, net
    
    (Note 14)
    
    
    (3,690,105
    )
    
    
    (3,703,701
    )Shares repurchased
    
    (Note 13)
    
    
    (7,330,702
    )
    
    
    (7,603,171
    )15,515,528
    
    
    
    20,511,888Total majority interest
    
    
    
    
    
    
    30,189,010
    
    
    
    35,021,280Minority interest
    
    (Note 15)
    
    
    885,359
    
    
    
    1,583,093Total stockholders equity
    
    
    
    
    
    
    31,074,369
    
    
    
    36,604,373Total liabilities and stockholders equity
    
    
    
    
    
    Ps.
    78,221,901
    
    
    Ps.
    83,030,490
  F-3




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##### Table of Contents



GRUPO
TELEVISA, S.A.B.
 
 Consolidated Statements of Income
For the Years Ended December 31, 2004, 2005 and 2006
(In thousands of Mexican pesos in purchasing power as of December 31, 2006,
except per CPO amounts)
(Notes 1 and 2)
 2004
    
    
    2005
    
    
    2006Net sales
    
    (Note 23)
    
    Ps.
    31,518,972
    
    
    Ps.
    33,797,563
    
    
    Ps.
    37,931,841Cost of sales (excluding depreciation and amortization)
    
    
    
    
    
    
    15,949,394
    
    
    
    15,350,340
    
    
    
    16,182,882Operating expenses (excluding depreciation and amortization):Selling
    
    
    
    
    
    
    2,366,583
    
    
    
    2,773,497
    
    
    
    3,016,828Administrative
    
    
    
    
    
    
    1,770,461
    
    
    
    1,916,065
    
    
    
    2,304,171Depreciation and amortization
    
    
    
    
    
    
    2,231,065
    
    
    
    2,517,015
    
    
    
    2,679,066Operating income
    
    (Note 23)
    
    
    9,201,469
    
    
    
    11,240,646
    
    
    
    13,748,894Integral cost of financing, net
    
    (Note 17)
    
    
    1,630,188
    
    
    
    1,854,259
    
    
    
    1,099,691Restructuring and non-recurring charges
    
    (Note 18)
    
    
    424,977
    
    
    
    239,220
    
    
    
    614,354Other expense, net
    
    (Note 19)
    
    
    553,730
    
    
    
    483,037
    
    
    
    211,041Income before income taxes and employees profit sharing
    
    
    
    
    
    
    6,592,574
    
    
    
    8,664,130
    
    
    
    11,823,808Income taxes
    
    (Note 20)
    
    
    1,257,804
    
    
    
    781,692
    
    
    
    2,016,671Employees profit sharing
    
    (Note 20)
    
    
    7,009
    
    
    
    20,714
    
    
    
    30,5021,264,813
    
    
    
    802,406
    
    
    
    2,047,173Income before equity in results of affiliates and
cumulative loss of accounting change
    
    
    
    
    
    
    5,327,761
    
    
    
    7,861,724
    
    
    
    9,776,635Equity in earnings (losses) of affiliates, net
    
    (Note 5)
    
    
    661,247
    
    
    
    166,649
    
    
    
    (602,206
    )Cumulative loss of accounting change, net
    
    (Note 1(b)(n)(r))
    
    
    (1,098,423
    )
    
    
    (526,592
    )
    
    
    Consolidated net income
    
    
    
    
    
    
    4,890,585
    
    
    
    7,501,781
    
    
    
    9,174,429Minority interest
    
    (Note 15)
    
    
    (249,181
    )
    
    
    (1,127,959
    )
    
    
    (588,241
    )Net income
    
    (Note 13)
    
    Ps.
    4,641,404
    
    
    Ps.
    6,373,822
    
    
    Ps.
    8,586,188Net income per CPO
    
    (Note 21)
    
    Ps.
    1.60
    
    
    Ps.
    2.19
    
    
    Ps.
    2.96
  F-4




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##### Table of Contents



GRUPO
TELEVISA, S.A.B.
 
 Consolidated Statements of Changes in Stockholders Equity
For the Years Ended December 31, 2004, 2005 and 2006
(In thousands of Mexican pesos in purchasing power as of December 31, 2006)
(Notes 1 and 2)
 AccumulatedCapital
    
    
    
    
    
    
    
    
    
    
    OtherStock
    
    
    Additional
    
    
    Retained
    
    
    Comprehensive
    
    
    Shares
    
    
    Total
    
    
    Minority
    
    
    TotalIssued
    
    
    Paid-In
    
    
    Earnings
    
    
    Loss
    
    
    Repurchased
    
    
    Majority
    
    
    Interest
    
    
    Stockholders(Note 12)
    
    
    Capital
    
    
    (Note 13)
    
    
    (Note 14)
    
    
    (Note 13)
    
    
    Interest
    
    
    (Note 15)
    
    
    EquityBalance at January 1, 2004
    
    Ps.
    9,282,794
    
    
    Ps.
    4,383,180
    
    
    Ps.
    25,959,456
    
    
    Ps.
    (2,537,465
    )
    
    Ps.
    (7,175,060
    )
    
    Ps.
    29,912,905
    
    
    Ps.
    1,219,971
    
    
    Ps.
    31,132,876Dividends
    
    
    
    
    
    
    
    
    
    
    (4,280,816
    )
    
    
    
    
    
    
    
    
    
    
    (4,280,816
    )
    
    
    
    
    
    
    (4,280,816
    )Stock dividends
    
    
    1,007,508
    
    
    
    
    
    
    
    (1,007,508
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Repurchase of capital stock
    
    
    
    
    
    
    
    
    
    
    (138,276
    )
    
    
    
    
    
    
    (738,472
    )
    
    
    (876,748
    )
    
    
    
    
    
    
    (876,748
    )Sale of repurchase shares
    
    
    
    
    
    
    
    
    
    
    (515,169
    )
    
    
    
    
    
    
    1,145,445
    
    
    
    630,276
    
    
    
    
    
    
    
    630,276Decrease in minority interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,349,582
    )
    
    
    (1,349,582
    )Comprehensive income (loss)
    
    
    
    
    
    
    
    
    
    
    4,641,404
    
    
    
    (217,291
    )
    
    
    
    
    
    
    4,424,113
    
    
    
    
    
    
    
    4,424,113Balance at December 31, 2004
    
    
    10,290,302
    
    
    
    4,383,180
    
    
    
    24,659,091
    
    
    
    (2,754,756
    )
    
    
    (6,768,087
    )
    
    
    29,809,730
    
    
    
    (129,611
    )
    
    
    29,680,119Dividends
    
    
    
    
    
    
    
    
    
    
    (4,480,311
    )
    
    
    
    
    
    
    
    
    
    
    (4,480,311
    )
    
    
    
    
    
    
    (4,480,311
    )Repurchase of capital stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,242,838
    )
    
    
    (1,242,838
    )
    
    
    
    
    
    
    (1,242,838
    )Sale of repurchase shares
    
    
    
    
    
    
    
    
    
    
    (352,915
    )
    
    
    
    
    
    
    680,223
    
    
    
    327,308
    
    
    
    
    
    
    
    327,308Increase in minority interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,014,970
    
    
    
    1,014,970Stock-based compensation
    
    
    
    
    
    
    
    
    
    
    336,648
    
    
    
    
    
    
    
    
    
    
    
    336,648
    
    
    
    
    
    
    
    336,648Comprehensive income (loss)
    
    
    
    
    
    
    
    
    
    
    6,373,822
    
    
    
    (935,349
    )
    
    
    
    
    
    
    5,438,473
    
    
    
    
    
    
    
    5,438,473Balance at December 31, 2005
    
    
    10,290,302
    
    
    
    4,383,180
    
    
    
    26,536,335
    
    
    
    (3,690,105
    )
    
    
    (7,330,702
    )
    
    
    30,189,010
    
    
    
    885,359
    
    
    
    31,074,369Dividends
    
    
    
    
    
    
    
    
    
    
    (1,119,749
    )
    
    
    
    
    
    
    
    
    
    
    (1,119,749
    )
    
    
    
    
    
    
    (1,119,749
    )Share cancellation
    
    
    (164,090
    )
    
    
    
    
    
    
    (1,518,164
    )
    
    
    
    
    
    
    1,682,254
    
    
    
    
    
    
    
    
    
    
    
    Repurchase of capital stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,107,697
    )
    
    
    (3,107,697
    )
    
    
    
    
    
    
    (3,107,697
    )Sale of repurchase shares
    
    
    
    
    
    
    
    
    
    
    (586,984
    )
    
    
    
    
    
    
    1,152,974
    
    
    
    565,990
    
    
    
    
    
    
    
    565,990Increase in minority interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    697,734
    
    
    
    697,734Benefit from capital contribution of minority interest in Sky Mexico
    
    
    
    
    
    
    
    
    
    
    371,627
    
    
    
    
    
    
    
    
    
    
    
    371,627
    
    
    
    
    
    
    
    371,627Loss on minority interest acquisition of Sky Mexico
    
    
    
    
    
    
    
    
    
    
    (685,540
    )
    
    
    
    
    
    
    
    
    
    
    (685,540
    )
    
    
    
    
    
    
    (685,540
    )Stock-based compensation
    
    
    
    
    
    
    
    
    
    
    235,047
    
    
    
    
    
    
    
    
    
    
    
    235,047
    
    
    
    
    
    
    
    235,047Comprehensive income (loss)
    
    
    
    
    
    
    
    
    
    
    8,586,188
    
    
    
    (13,596
    )
    
    
    
    
    
    
    8,572,592
    
    
    
    
    
    
    
    8,572,592Balance at December 31, 2006
    
    Ps.
    10,126,212
    
    
    Ps.
    4,383,180
    
    
    Ps.
    31,818,760
    
    
    Ps.
    (3,703,701
    )
    
    Ps.
    (7,603,171
    )
    
    Ps.
    35,021,280
    
    
    Ps.
    1,583,093
    
    
    Ps.
    36,604,373
  F-5




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##### Table of Contents



GRUPO
TELEVISA, S.A.B.
 
 Consolidated Statements of Changes in Financial Position
For the Years Ended December 31, 2004, 2005 and 2006
(In thousands of Mexican pesos in purchasing power as of December 31, 2006)
(Notes 1 and 2)
 2004
    
    
    2005
    
    
    2006Operating activities:Consolidated net income
    
    Ps.
    4,890,585
    
    
    Ps.
    7,501,781
    
    
    Ps.
    9,174,429Adjustments to reconcile net income to resources provided by (used for)
operating activities:Equity in (earnings) losses of affiliates
    
    
    (661,247
    )
    
    
    (166,649
    )
    
    
    602,206Depreciation and amortization
    
    
    2,231,065
    
    
    
    2,517,015
    
    
    
    2,679,066Write-off of long-lived assets and other amortization
    
    
    295,333
    
    
    
    101,498
    
    
    
    170,476Deferred taxes
    
    
    655,647
    
    
    
    (819,707
    )
    
    
    1,245,815Loss (gain) on disposition of affiliates
    
    
    131,665
    
    
    
    178,205
    
    
    
    (18,848
    )Stock-based compensation
    
    
    
    
    
    
    
    
    
    
    235,047Cumulative loss effect of accounting changes
    
    
    1,098,423
    
    
    
    526,592
    
    
    
    8,641,471
    
    
    
    9,838,735
    
    
    
    14,088,191Changes in operating assets and liabilities:Decrease (increase) in:Trade notes and accounts receivable, net
    
    
    74,533
    
    
    
    (2,384,961
    )
    
    
    861,976Transmission rights and programming
    
    
    335,693
    
    
    
    1,016,378
    
    
    
    749,871Inventories
    
    
    (117,001
    )
    
    
    48,455
    
    
    
    (108,739
    )Other accounts and notes receivable and other current assets
    
    
    (397,446
    )
    
    
    828,851
    
    
    
    (1,064,187
    )Increase (decrease) in:Customer deposits and advances
    
    
    579,864
    
    
    
    2,323,724
    
    
    
    (1,616,083
    )Trade accounts payable
    
    
    (650,988
    )
    
    
    778,642
    
    
    
    376,269Other liabilities, taxes payable and deferred taxes
    
    
    (187,786
    )
    
    
    (772,626
    )
    
    
    540,377Pension plans and seniority premiums
    
    
    68,283
    
    
    
    77,678
    
    
    
    87,086(294,848
    )
    
    
    1,916,141
    
    
    
    (173,430
    )Resources provided by operating activities
    
    
    8,346,623
    
    
    
    11,754,876
    
    
    
    13,914,761Financing activities:Issuance of Senior Notes due 2025
    
    
    
    
    
    
    6,634,328
    
    
    
    Prepayments of Senior Notes and UDIs denominated Notes
    
    
    
    
    
    
    (5,909,836
    )
    
    
    Prepayments of Senior Notes due 2013
    
    
    
    
    
    
    
    
    
    
    (3,195,625
    )Other increase in debt
    
    
    4,498,598
    
    
    
    
    
    
    
    3,500,000Other decrease in debt
    
    
    (2,476,846
    )
    
    
    (5,598,073
    )
    
    
    (856,431
    )Repurchase and sale of capital stock
    
    
    (246,474
    )
    
    
    (915,528
    )
    
    
    (2,541,707
    )Dividends paid
    
    
    (4,280,816
    )
    
    
    (4,480,311
    )
    
    
    (1,119,749
    )Gain on issuance of shares of investee
    
    
    115,983
    
    
    
    
    
    
    
    Gain on valuation of available-for-sale investments
    
    
    
    
    
    
    
    
    
    
    (578,656
    )Loss on minority interest acquisition of Sky Mexico
    
    
    
    
    
    
    
    
    
    
    (685,540
    )Benefit from capital contribution of minority interest in Sky Mexico
    
    
    
    
    
    
    
    
    
    
    371,627Minority interest
    
    
    (55,290
    )
    
    
    (112,988
    )
    
    
    109,493Translation effect
    
    
    (52,380
    )
    
    
    116,756
    
    
    
    16,575Resources used for financing activities
    
    
    (2,497,225
    )
    
    
    (10,265,652
    )
    
    
    (4,980,013
    )Investing activities:Due from affiliated companies, net
    
    
    (39,105
    )
    
    
    556,543
    
    
    
    (621,063
    )Investments
    
    
    (257,183
    )
    
    
    (1,250,054
    )
    
    
    (4,726,247
    )Disposition of investments
    
    
    39,020
    
    
    
    109,271
    
    
    
    6,933,725Investments in property, plant and equipment
    
    
    (2,179,428
    )
    
    
    (2,849,075
    )
    
    
    (3,304,323
    )Disposition of property, plant and equipment
    
    
    159,715
    
    
    
    329,857
    
    
    
    513,378Investment in goodwill and other intangible assets
    
    
    (228,575
    )
    
    
    (1,725,838
    )
    
    
    (1,180,338
    )Disposition of goodwill and other intangible assets
    
    
    281,582
    
    
    
    702,284
    
    
    
    5,709,746Available-for-sale investment in shares of Univision
    
    
    
    
    
    
    
    
    
    
    (11,821,932
    )Other assets
    
    
    (105,855
    )
    
    
    121,789
    
    
    
    (3,880
    )Resources used for investing activities
    
    
    (2,329,829
    )
    
    
    (4,005,223
    )
    
    
    (8,500,934
    )Net increase (decrease) in cash and temporary investments
    
    
    3,519,569
    
    
    
    (2,515,999
    )
    
    
    433,814Net increase in cash and temporary investments upon Sky Mexicos consolidation
    
    
    503,046
    
    
    
    
    
    
    
    Cash and temporary investments at beginning of year
    
    
    13,870,318
    
    
    
    17,892,933
    
    
    
    15,376,934Cash and temporary investments at end of year
    
    Ps.
    17,892,933
    
    
    Ps.
    15,376,934
    
    
    Ps.
    15,810,748
  F-6




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##### Table of Contents



GRUPO
TELEVISA, S.A.B.
 
 Notes to Consolidated Financial Statements
For the Years Ended December 31, 2004, 2005 and 2006
(In thousands of Mexican pesos in purchasing power as of December 31, 2006,
except per CPO, per share and exchange rate amounts)
 1. Accounting Policies
  a) Basis of Presentation
      b) Members of the Group
  CompanysConsolidated Entities
    

Ownership(1)

    
    Business Segments(2)Telesistema
Mexicano, S.A. de C.V. and subsidiaries, including Televisa, S.A. de C.V.
    
    100%
    
    
    Television BroadcastingPay Television NetworksProgramming ExportsTelevisión Independiente de México, S.A. de C.V. and subsidiaries
    
    100%
    
    
    Television BroadcastingCampus América, S.A. de C.V. and subsidiaries, including TuTv, LLC
    
    100%
    
    
    Television Broadcasting(TuTv)(3)
    
    
    
    
    Pay Television NetworksEditorial Televisa, S.A. de C.V. and subsidiaries
    
    100%
    
    
    PublishingGrupo Distribuidoras Intermex, S.A. de C.V. and subsidiaries
    
    100%
    
    
    Publishing DistributionInnova, S. de R. L. de C.V. and subsidiaries (collectively, Sky Mexico)(3)
    
    58.7%
    
    
    Sky MexicoEmpresas Cablevisión, S. A. B. de C.V. and subsidiaries
    
    51%
    
    
    Cable TelevisionSistema Radiópolis, S.A. de C.V. and subsidiaries
    
    50%
    
    
    RadioCorporativo Vasco de Quiroga, S.A. de C.V. and subsidiaries
    
    100%
    
    
    Other BusinessesCVQ Espectáculos, S.A. de C.V. and subsidiaries
    
    100%
    
    
    Other BusinessesTelevisa Juegos, S.A. de C.V. and subsidiaries
    
    100%
    
    
    Other Businesses
 F-7




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##### Table of Contents



(1)
    
    Percentage of equity interest directly or indirectly held by the Company in the holding entity.(2)
    
    See Note 23 for a description of each of the Groups business segments.(3)
    
    The Group adopted the guidelines of the Financial Accounting Standards Board Interpretation
No. 46 (FIN 46), Consolidation of Variable Interest Entities, as permitted under the scope
of Mexican FRS NIF A-8, Supplementary Financial Reporting Standards. FIN 46, which became
effective in 2004, requires the primary beneficiary of a VIE to consolidate that entity. The
primary beneficiary of a VIE is the party that absorbs a majority of the entitys expected
losses, receives a majority of the entitys expected residual returns, or both, as a result of
ownership, contractual or other financial interest in the entity. In accordance with the
guidelines of FIN 46, the Group identified Sky Mexico and TuTv as VIEs and the Group as the
primary beneficiary of the investment in each of these entities, and on April 1, 2004, began
to include in its consolidated financial statements the assets, liabilities and results of
operations of Sky Mexico and TuTv. As a result of adoption of FIN 46, the Group recognized a
consolidated cumulative loss effect of Ps.1,098,423, net of income tax in the amount of
Ps.332,340, in its consolidated statement of income for the year ended December 31, 2004. TuTv
is a 50% joint venture with Univision Communications Inc. (Univision), engaged in the
distribution of the Groups Spanish-speaking programming packages in the United States.  Expiration DatesTelevision Broadcasting
    
    In 2021Sky Mexico
    
    In 2020 and 2026Cable Television
    
    In 2029Radio
    
    Various from 2008 to 2016Gaming
    
    In 2030
 c) Foreign Currency Translation
    d) Temporary Investments
  F-8




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##### Table of Contents



e) Transmission Rights and Programming
      f) Inventories
  g) Investments
    h) Property, Plant and Equipment
  F-9




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##### Table of Contents



i) Intangible Assets and Deferred Financing Costs
    j) Impairment of Long-lived Assets
  k) Customer Deposits and Advances
   l) Stockholders Equity
  m) Revenue Recognition
  
    
    Advertising revenues, including deposits and advances from customers for future
advertising, are recognized at the time the advertising services are rendered.
    
    Revenues from program services for pay television and licensed television programs are
recognized when the programs are sold and become available for broadcast.
 F-10




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##### Table of Contents




    
    Revenues from magazine subscriptions are initially deferred and recognized
proportionately as products are delivered to subscribers. Revenues from the sales of
magazines are recognized on the date of circulation of delivered merchandise, net of a
provision for estimated returns.
    
    The revenue from publishing distribution is recognized upon distribution of the products.
    
    Sky Mexico program service revenues, including advances from customers for future DTH
program services and installation fees, are recognized at the time the DTH service is
provided.
    
    Cable television subscription, pay-per-view and installation fees are recognized in the
period in which the services are rendered.
    
    Revenues from attendance to soccer games, including revenues from advance ticket sales
for soccer games and other promotional events, are recognized on the date of the relevant
event.
    
    Motion picture production and distribution revenues are recognized as the films are
exhibited.
    
    Gaming revenues consist of the net win from gaming activities, which is the difference
between amounts wagered and amounts paid to winning patrons.
 n) Pension Plans, Seniority Premiums and Indemnities
    o) Income Taxes and Employees Profit Sharing
   p) Derivative Financial Instruments
  F-11




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##### Table of Contents



q) Comprehensive Income
  r) Stock-based Compensation
  s) Prior Years Financial Statements
   December 31, 2003
    
    
    106.996December 31, 2004
    
    
    112.550December 31, 2005
    
    
    116.301December 31, 2006
    
    
    121.015
  t) New Mexican FRS
   F-12




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##### Table of Contents



2. Acquisitions, Investments and Dispositions
         F-13




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##### Table of Contents



3. Trade Notes and Accounts Receivable
  2005
    
    
    2006Non-interest bearing notes received as customer deposits and advances
    
    Ps
    .12,797,785
    
    
    Ps
    .11,957,311Accounts receivable, including value-added tax receivables related to advertising services
    
    
    2,802,946
    
    
    
    2,672,873Allowance for doubtful accounts
    
    
    (1,141,186
    )
    
    
    (1,032,615
    )Ps
    .14,459,545
    
    
    Ps
    .13,597,569
 4. Transmission Rights and Programming
  2005
    
    
    2006Transmission rights
    
    Ps
    .3,914,500
    
    
    Ps
    .3,586,580Programming
    
    
    3,412,373
    
    
    
    2,895,4427,326,873
    
    
    
    6,482,022Non-current portion of:Transmission rights
    
    
    2,060,483
    
    
    
    1,880,148Programming
    
    
    2,019,409
    
    
    
    1,548,7004,079,892
    
    
    
    3,428,848Current portion of transmission rights and programming
    
    Ps
    .3,246,981
    
    
    Ps
    .3,053,174
 F-14




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##### Table of Contents



5. Investments
  Ownership %as of December 31,2005
    
    
    2006
    
    
    2006Accounted for by the equity method:Univision(a)
    
    Ps.
    5,887,752
    
    
    Ps.
    
    
    
    
    9.75
    %Ocesa Entretenimiento, S. A. de C. V. (OCEN)(b)
    
    
    521,043
    
    
    
    503,868
    
    
    
    40.0
    %La Sexta (see Notes 2 and 11)
    
    
    
    
    
    
    729,735
    
    
    
    40.0
    %Volaris (see Note 2)
    
    
    250,212
    
    
    
    257,298
    
    
    
    25.0
    %TVI(c)
    
    
    
    
    
    
    97,733
    
    
    
    50.0
    %Other
    
    
    101,489
    
    
    
    95,9136,760,496
    
    
    
    1,684,547Other investments:Convertible debentures due 2011(d)
    
    
    
    
    
    
    2,837,331Held-to-maturity debt securities (see Note 1(g))(e)
    
    
    931,252
    
    
    
    906,175Deposit in escrow(f)
    
    
    138,593
    
    
    
    Warrants to acquire shares of Univision common stock(a)
    
    
    24,612
    
    
    
    TVI(c)
    
    
    
    
    
    
    256,727Other
    
    
    40,093
    
    
    
    25,8831,134,550
    
    
    
    4,026,116Ps.
    7,895,046
    
    
    Ps.
    5,710,663
 
 (a)
    
    Through June 30, 2006, this investment was accounted for under the
equity method. Beginning in the third quarter of 2006, the Group
announced its intention to have its shares and warrants of Univision
common stock cashed out in connection with the merger contemplated by
a related agreement entered into by Univision and an acquiring
investor group. Accordingly, beginning July 1, 2006, the Group (i)
classified its investment in shares of Univison common stock as a
current available-for-sale financial asset; (ii) discontinued the
recognition of any equity method result related to this investment;
(iii) recorded this financial asset at fair value, with unrealized
gains and losses included in the Groups consolidated stockholders
equity as accumulated other comprehensive result; and (iv) this
financial asset is being hedged by the Groups outstanding Senior
Notes due 2011, 2025 and 2032, in the aggregate amount of
approximately U.S.$971.9 million (see Notes 1 (c), 9 and 11). As of
December 31, 2005 and 2006, the Group owned 16,594,500 shares Class
A and 13,593,034 shares Class T of common stock of Univision. As
of December 31, 2005 and 2006, the Group also owned warrants to
acquire 6,374,864 shares Class A and 2,727,136 shares Class T of
common stock of Univision, most of which had an exercise price of
U.S.$38.261 per share, and expired in December 2017 (see Note 9). The
warrants to purchase 9,000,000 shares of Univision common stock were
assigned a zero value since they were acquired by the Group as a
non-cash consideration for surrendering certain governance rights
previously held by the Group in Univision. The warrants to acquire
100,000 shares of Univision common stock were accounted for at
acquisition cost and classified as other investments. At December 31,
2006, the carrying value of the 100,000 warrants was written off since
the exercise price was greater than the tender offer price. The
carrying value of the Groups net investment in Univision at December
31, 2005, also included goodwill in the amount of Ps.5,701,000 (see
Note 7), which in 2006 has been reclassified to become part of the
basis of the available-for-sale financial asset. The proposed merger
was concluded by Univision on March 29, 2007, and the 30,107,534
shares of Univision common stock owned by the Group were converted,
like all shares of Univision common stock, into cash at U.S.$36.25 per
share. Also, under the terms of the merger agreement, all of the
Groups warrants to acquire shares of Univision common stock were
cancelled. The aggregate cash amount received by the Group in
connection with the closing of this merger was of approximately
U.S.$1,094.4 million (Ps.11,821,932 at the year-end exchange
rate).(b)
    
    OCEN is a majority-owned subsidiary of Corporación Interamericana de
Entretenimiento, S. A. de C. V. (CIE), and is engaged in the live
entertainment business in Mexico. In the third quarter of 2006, OCEN
paid dividends to the Group related to its 40% interest in the
aggregate amount of Ps.102,573 (see Notes 7 and 16).(c)
    
    Cable television company with a license to operate in the city of
Monterrey and surrounding areas, which expires in 2026. In March 2006,
in connection with the acquisition of a 50% interest in this venture,
the Group provided funding to TVI in the form of a short-term loan in
the principal amount of Ps.240,589, with an annual interest rate equal
to the Mexican inter-bank rate plus 150 basis points, and maturity in
March 2007. The accrued interest receivable from this loan was of
Ps.16,138, as of December 31, 2006 (see Note 2). F-15




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##### Table of Contents



(d)
    
    Available-for-sale debt securities that are convertible into 2,838
million shares, or 99.99%, of authorized common stock of Alvafig. The
Group can convert all or a portion of these debentures into shares of
Alvafig common stock (i) when a non-compliance occur with any payment
obligation set up in the debenture issuance agreement; or (ii) at any
time after the first anniversary of the debt issuance and prior to
maturity. The debentures cannot be called before maturity by the
issuer, and are secured by substantially all of the outstanding shares
of common stock of Alvafig, which are held by a designated trust. This
investment is classified as an available-for-sale debt security, and
is recorded at fair value, with unrealized gains and losses included
in the Groups consolidated stockholders equity as accumulated other
comprehensive result (see Note 2).(e)
    
    Held-to-maturity securities represent structured notes and corporate
fixed income securities with maturities in 2008. These investments are
stated at cost.(f)
    
    In connection with the disposal of an investment of the Group in 1997,
the Group granted collateral to secure certain indemnification
obligations which consisted, at December 31, 2005 and 2006, of
short-term securities of approximately U.S.$12.5 million (Ps.138,593 )
and U.S.$11.4 million (Ps.123,429), respectively. After the expiration
of applicable tax statutes of limitations, the collateral will be
reduced to a de minimus amount. The Group classified this deposit in
escrow as temporary investments in its consolidated balance sheet as
of December 31, 2006, since the collateral agreement is expected to be
terminated in 2007 (see Note 11).  6. Property, Plant and Equipment
  2005
    
    
    2006Buildings
    
    Ps.
    8,287,664
    
    
    Ps.
    8,394,388Buildings improvements
    
    
    1,646,510
    
    
    
    1,632,675Technical equipment
    
    
    18,698,870
    
    
    
    20,118,867Satellite transponders
    
    
    1,702,468
    
    
    
    1,694,099Furniture and fixtures
    
    
    520,339
    
    
    
    576,030Transportation equipment
    
    
    1,150,699
    
    
    
    1,263,059Computer equipment
    
    
    1,471,032
    
    
    
    1,594,07333,477,582
    
    
    
    35,273,191Accumulated depreciation
    
    
    (17,870,662
    )
    
    
    (19,449,494
    )15,606,920
    
    
    
    15,823,697Land
    
    
    3,975,677
    
    
    
    3,988,747Construction in progress
    
    
    945,587
    
    
    
    1,163,495Ps.
    20,528,184
    
    
    Ps.
    20,975,939
     F-16




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##### Table of Contents



7. Intangible Assets and Deferred Charges, Net
  2005
    
    2006Gross
    
    
    
    
    
    
    
    
    
    
    GrossCarrying
    
    
    Accumulated
    
    
    Net Carrying
    
    
    Carrying
    
    
    Accumulated
    
    
    Net CarryingAmount
    
    
    Amortization
    
    
    Amount
    
    
    Amount
    
    
    Amortization
    
    
    AmountIntangible assets with indefinite lives:Goodwill
    
    
    
    
    
    
    
    
    
    Ps.
    7,491,849
    
    
    
    
    
    
    
    
    
    
    Ps.
    2,184,945Publishing and TVI trademarks
    
    
    
    
    
    
    
    
    
    
    473,482
    
    
    
    
    
    
    
    
    
    
    
    580,905Television network concession
    
    
    
    
    
    
    
    
    
    
    627,033
    
    
    
    
    
    
    
    
    
    
    
    627,033Concession TVI
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    141,778Intangible
assets with finite lives and deferred charges:Licenses and software
    
    Ps.
    1,180,009
    
    
    Ps.
    (825,743
    )
    
    
    354,266
    
    
    Ps.
    814,611
    
    
    Ps.
    (458,416
    )
    
    
    356,195Subscriber list
    
    
    593,152
    
    
    
    (142,812
    )
    
    
    450,340
    
    
    
    642,196
    
    
    
    (291,099
    )
    
    
    351,097Other intangible assets
    
    
    203,727
    
    
    
    (75,894
    )
    
    
    127,833
    
    
    
    526,660
    
    
    
    (192,255
    )
    
    
    334,405Deferred financing costs (see Note 8)
    
    
    1,102,532
    
    
    
    (208,204
    )
    
    
    894,328
    
    
    
    1,046,591
    
    
    
    (232,867
    )
    
    
    813,724Ps.
    3,079,420
    
    
    Ps.
    (1,252,653
    )
    
    Ps.
    10,419,131
    
    
    Ps.
    3,030,058
    
    
    Ps.
    (1,174,637
    )
    
    Ps.
    5,390,082
   ForeignBalance as of
    
    
    
    
    
    
    Currency
    
    
    
    
    
    
    
    
    
    
    Balance as ofDecember 31,
    
    
    
    
    
    
    Translation
    
    
    Adjustments/
    
    
    Impairment
    
    
    December 31,2005
    
    
    Acquisitions
    
    
    Adjustments
    
    
    Reclassifications
    
    
    Adjustments
    
    
    2006Goodwill:Television Broadcasting
    
    Ps.
    1,353,012
    
    
    Ps.
    
    
    
    Ps.
    
    
    
    Ps.
    (340
    )
    
    Ps.
    
    
    
    Ps.
    1,352,672Publishing Distribution
    
    
    24,630
    
    
    
    
    
    
    
    
    
    
    
    (975
    )
    
    
    
    
    
    
    23,655Other Businesses
    
    
    37,978
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    37,978Equity-method investees(1)
    
    
    6,076,229
    
    
    
    402,842
    
    
    
    
    
    
    
    (5,708,431
    )
    
    
    
    
    
    
    770,640Ps.
    7,491,849
    
    
    Ps.
    402,842
    
    
    Ps.
    
    
    
    Ps.
    (5,709,746
    )
    
    Ps.
    
    
    
    Ps.
    2,184,945Trademarks(2):Publishing
    
    Ps.
    473,482
    
    
    Ps.
    149,260
    
    
    Ps.
    43
    
    
    Ps.
    
    
    
    Ps.
    (90,078
    )
    
    Ps.
    532,707TVI
    
    
    
    
    
    
    48,198
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    48,198Ps.
    473,482
    
    
    Ps.
    197,458
    
    
    Ps.
    43
    
    
    Ps.
    
    
    
    Ps.
    (90,078
    )
    
    Ps.
    580,905
 
 (1)
    
    See Note 5.(2)
    
    See Notes 2 and 18. F-17




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##### Table of Contents



8. Long-term Debt and Satellite Transponder Lease Obligation
  2005
    
    
    2006U.S.$5.3 million 11.875% Series B Senior Notes due 2006
    
    Ps.
    59,078
    
    
    Ps.
    U.S.$75.5 million in 2005 and U.S.$72 million in 2006 of 8% Senior Notes due 2011(1)(2)
    
    
    834,643
    
    
    
    777,251U.S.$300 million 8.50% Senior Notes due 2032(1)
    
    
    3,317,164
    
    
    
    3,240,750U.S.$600 million 6.625% Senior Notes due 2025(1)(2)
    
    
    6,634,328
    
    
    
    6,481,500U.S.$300 million in 2005 and U.S.$11.3 million in 2006 of 9.375% Senior Notes due 2013(3)
    
    
    3,317,164
    
    
    
    121,539Other U.S. dollar debt(4)
    
    
    43,767
    
    
    
    37,5328.15% UDI-denominated Notes due 2007(2)(5)
    
    
    979,214
    
    
    
    980,246Mexican peso long-term loans(3)(6)
    
    
    4,039,824
    
    
    
    7,142,460Other Mexican peso bank loans
    
    
    464
    
    
    
    Other currency debt
    
    
    989
    
    
    
    420Total long-term debt
    
    
    19,226,635
    
    
    
    18,781,698Less: Current portion
    
    
    354,256
    
    
    
    986,368Long-term debt, net of current portion
    
    Ps.
    18,872,379
    
    
    Ps.
    17,795,330Satellite transponder lease obligation(7)
    
    Ps.
    1,313,710
    
    
    Ps.
    1,206,591Less: Current portion
    
    
    78,668
    
    
    
    86,176Satellite transponder lease obligation, net of current portion
    
    Ps.
    1,235,042
    
    
    Ps.
    1,120,415
 F-18




---



##### Table of Contents



(1)
    
    These Senior Notes are unsecured obligations of the Company, rank
equally in right of payment with all existing and future
unsecured and unsubordinated indebtedness of the Company, and are
junior in right of payment to all of the existing and future
liabilities of the Companys subsidiaries. Interest on the Senior
Notes due 2011, 2025 and 2032, including additional amounts
payable in respect of certain Mexican withholding taxes, is
8.41%, 6.97% and 8.94% per annum, respectively, and is payable
semi-annually. These Senior Notes may not be redeemed prior to
maturity, except in the event of certain changes in law affecting
the Mexican withholding tax treatment of certain payments on the
securities, in which case the securities will be redeemable, as a
whole but not in part, at the option of the Company. The Senior
Notes due 2011 and 2032 were priced at 98.793% and 99.431%,
respectively, for a yield to maturity of 8.179% and 8.553%,
respectively. The agreement of these Senior Notes contains
covenants that limit the ability of the Company and certain
restricted subsidiaries engaged in Television Broadcasting, Pay
Television Networks and Programming Exports, to incur or assume
liens, perform sale and leaseback transactions, and consummate
certain mergers, consolidations and similar transactions.
Substantially all of these Senior Notes are registered with the
U.S. Securities and Exchange Commission (the SEC).(2)
    
    In March and May 2005, the Company issued these Senior Notes in
the aggregate amount of U.S.$400.0 million and U.S.$200.0
million, respectively, which were priced at 98.081% and 98.632%,
respectively, for a yield to maturity of 6.802% and 6.787%,
respectively. The net proceeds of the U.S.$400.0 million
issuance, together with cash on hand, were used to fund the
Groups tender offers made and expired in March 2005 for any or
all of the Senior Notes due 2011 and the Mexican peso equivalent
of UDI-denominated Notes due 2007, and prepaid principal amount
of these securities in the amount of approximately U.S.$222.0
million and Ps.2,935,097 (nominal), respectively, representing
approximately 74% and 76% of the outstanding principal amount of
these securities, respectively. The net proceeds of the
U.S.$200.0 million issuance were used for corporate purposes,
including the prepayment of some of the Groups outstanding
indebtedness.(3)
    
    These Senior Notes are unsecured and unsubordinated obligations
of Sky Mexico. Interest on these Senior Notes, including
additional amounts payable in respect of certain Mexican
withholding taxes, is 9.8580%, and is payable semi-annually. The
indentures of these Senior Notes contain certain restrictive
covenants for Sky Mexico on additional indebtedness, liens, sales
and leasebacks, restricted payments, asset sales, and certain
mergers, consolidations and similar transactions. Sky Mexico may,
at its own option, redeem these Senior Notes, in whole or in
part, at any time on or after September 19, 2008 at redemption
prices from 104.6875% to 101.5625% between September 19, 2008
through September 18, 2011, or 100% commencing on September 19,
2011, plus accrued and unpaid interest, if any. Additionally, on
or before September 19, 2006, Sky Mexico may, at its own option
and subject to certain requirements, use the proceeds from one or
more qualified equity offerings to redeem up to 35% of the
aggregate principal amount of these Senior Notes at 109.375% of
their principal amount, plus accrued and unpaid interest. In
March and April 2006, Sky Mexico entered into two 10-year loans
with Mexican banks in the aggregate principal amount of
Ps.3,500,000 to fund, together with cash on hand, a tender offer
and consent solicitation made in March 2006 and expired in April
2006 for any or all of the Senior Notes due 2013, and prepaid a
principal amount of approximately U.S.$288.7 million or 96.2% of
these securities. The total aggregate amount paid by Sky Mexico
in connection with this tender offer was of approximately
U.S.$324.3 million, which included related consents and accrued
and unpaid interest. The 10-year Sky Mexicos indebtedness is
guaranteed by the Company and includes a Ps.2,100,000 loan with
an annual interest rate of 8.74% and a Ps.1,400,000 loan with an
annual interest rate of 8.98% for the first three years, and the
Mexican interbank interest rate or TIIE plus 24 basis points
for the remaining seven years. Interest on these two 10-year
loans is payable on a monthly basis.(4)
    
    Includes notes payable to banks, bearing annual interest rates
which vary between 0.11 and 1.25 points above LIBOR. The
maturities of this debt at December 31, 2006 are various from
2007 to 2010.(5)
    
    Notes denominated in Mexican Investment Units (Unidades de
Inversión or UDIs), representing 258,711,400 UDIs at December
31, 2005 and 2006. Interest on these notes is payable
semi-annually. The balance as of December 31, 2005 and 2006
includes restatement of Ps.235,581 and Ps.265,578, respectively.
The UDI value as of December 31, 2006, was of Ps.3.788954 per
UDI.(6)
    
    Includes in 2005 and 2006, outstanding balances of long-term
loans in the principal amount of Ps.800,000, Ps.1,162,500 and
Ps.2,000,000, respectively, in connection with certain credit
agreements entered into by the Company with a Mexican bank, with
various maturities through 2012. Interest on these loans is, in a
range of 8.925% to 10.35% per annum, and is payable on a monthly
basis. Under the terms of these credit agreements, the Company
and certain restricted subsidiaries engaged in television
broadcasting, pay television networks and programming exports are
required to maintain (a) certain financial coverage ratios
related to indebtedness and interest expense; and (b) certain
restrictive covenants on indebtedness, dividend payments,
issuance and sale of capital stock, and liens. The 2006 balance
also includes the Sky Mexico long-term loans discussed in
paragraph (3) above. F-19




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##### Table of Contents



(7)
    
    Sky Mexico is committed to pay a monthly fee of U.S.$1.7 million
under a capital lease agreement entered into with Intelsat
Corporation (formerly PanAmSat Corporation) February 1999 for
satellite signal reception and retransmission service from 12
KU-band transponders on satellite IS-9, which became operational
in September 2000. The service term for IS-9 will end at the
earlier of (a) the end of 15 years or (b) the date IS-9 is taken
out of service. The obligations of Sky Mexico under the IS-9
agreement are proportionately guaranteed by the Company and the
other Sky Mexico equity owners in relation to their respective
ownership interests (see Notes 6 and 11).  Maturities of Debt and Satellite Transponder Lease Obligation
  2007
    
    Ps.
    986,3682008
    
    
    483,8352009
    
    
    1,163,1882010
    
    
    1,027,2672011
    
    
    777,251Thereafter
    
    
    14,343,789Ps.
    18,781,698
  2007
    
    Ps.
    220,3712008
    
    
    220,3712009
    
    
    220,3712010
    
    
    220,3712011
    
    
    220,371Thereafter
    
    
    809,0231,910,878Less: amount representing interest
    
    
    704,287Ps.
    1,206,591
 9.
 Financial Instruments
    F-20




---



##### Table of Contents



2005
    
    2006Carrying Value
    
    Fair Value
    
    Carrying Value
    
    Fair ValueNon-derivative financial instruments:Assets:Available-for-sale investment in Univision (see Note 5)
    
    Ps.
    
    
    
    Ps.
    
    
    
    Ps.
    11,821,932
    
    
    Ps.
    11,821,932Univision warrants (see Note 5)
    
    
    24,612
    
    
    
    1,371,760
    
    
    
    
    
    
    
    Held-to-maturity securities (see Note 5)
    
    
    930,085
    
    
    
    919,948
    
    
    
    3,980,140
    
    
    
    3,980,140Liabilities:Senior Notes due 2011, 2025 and 2032
    
    Ps.
    10,786,135
    
    
    Ps.
    11,737,842
    
    
    Ps.
    10,499,501
    
    
    Ps.
    11,678,800Other long-term debt securities
    
    
    3,376,242
    
    
    
    3,722,646
    
    
    
    121,539
    
    
    
    128,203UDI-denominated long-term securities
    
    
    979,214
    
    
    
    1,043,463
    
    
    
    980,246
    
    
    
    996,533Long-term notes payable to Mexican banks
    
    
    4,039,824
    
    
    
    4,124,783
    
    
    
    7,142,460
    
    
    
    7,323,626Derivative financial instruments:Assets:Sky Mexicos interest rate swaps(a)
    
    Ps.
    
    
    
    Ps.
    
    
    
    Ps.
    710
    
    
    Ps.
    710Liabilities:Sky Mexicos interest rate swaps(a)
    
    Ps.
    76,502
    
    
    Ps.
    76,502
    
    
    Ps.
    
    
    
    Ps.
    Foreign currency forwards(b)
    
    
    3,502
    
    
    
    3,502
    
    
    
    
    
    
    
    Interest rate swaps(c)
    
    
    312,660
    
    
    
    312,660
    
    
    
    315,634
    
    
    
    315,634
 
 (a)
    
    In February 2004, Sky Mexico entered into coupon swap agreements to
hedge a portion of its U.S. dollar foreign exchange exposure related
to its Senior Notes due 2013. Under these transactions, Sky Mexico
receives semi-annual payments calculated based on the aggregate
notional amount of U.S.$11.3 million at an annual rate of 9.375%, and
Sky Mexico makes monthly payments calculated based on an aggregate
notional amount of approximately Ps.123,047 at an annual rate of
10.25%. These transactions will terminate in September 2008. As of
December 31, 2006, Sky Mexico recorded the change in fair value of
these transactions in the integral cost of financing (foreign exchange
loss).(b)
    
    In 2004 and 2005, the Company entered into forward contracts with
diverse financial institutions to buy U.S.$185.0 million of the Senior
Notes due 2005 for hedge purposes. The average price fixed in these
agreements was Ps.11.73 per U.S. dollar. In the years ended December
31, 2004 and 2005, as a result of the depreciation of the exchange
rate of the U.S. dollar in relation to the Mexican peso, the Company
recorded a loss for these transactions of Ps.154,992 in 2005, in the
integral cost of financing (foreign exchange gain or loss). In
addition, as of December 31, 2005, the Group had entered into forward
exchange contracts to cover cash flow requirements on a notional
amount of U.S.$85.0 million to exchange U.S. dollars and Mexican pesos
at an average exchange rate of Ps.10.85 per U.S. dollar in 2006.(c)
    
    In order to reduce the adverse effects of exchange rates on the Senior
Notes due 2011, 2025 and 2032, during 2004 and 2005, the Company
entered into interest rate swap agreements with various financial
institutions that allow the Company to hedge against Mexican peso
depreciation on interest payments for a period of five years. Under
these transactions, the Company receives semi-annual payments based on
the aggregate notional amount U.S.$890 million as of December 31, 2005
and 2006, at an average annual rate of 7.37%, and the Company makes
semi-annual payments based on an aggregate notional amount of
approximately Ps.9,897,573 as of December 31, 2005 and 2006, at an
average annual rate of 8.28%, without an exchange of the notional
amount upon which the payments are based. In the years ended December
31, 2005 and 2006, the Company recorded a loss of Ps.383,275 and Ps.
88,233, respectively, in the integral cost of financing (foreign
exchange loss) derived of the change in fair value of these
transactions. In November 2005, the Group entered into option
contracts that allow the counterparty to extend the maturity of the
swap agreements for one additional year on the notional amount of
U.S.$890.0 million. 10. Pension Plans, Seniority Premiums and Severance Indemnities
    F-21




---



##### Table of Contents



2005
    
    
    2006Seniority premiums:Actuarial present value of benefit obligations:Vested benefit obligations
    
    Ps.
    159,316
    
    
    Ps.
    140,341Non-vested benefit obligations
    
    
    82,921
    
    
    
    100,999Accumulated benefit obligation
    
    
    242,237
    
    
    
    241,340Benefit attributable to projected salaries
    
    
    19,233
    
    
    
    18,963Projected benefit obligation
    
    
    261,470
    
    
    
    260,303Plan assets
    
    
    468,857
    
    
    
    528,489Plan assets in excess of projected benefit obligation
    
    
    207,387
    
    
    
    268,186Items to be
amortized over an average 9-year period:Transition obligation
    
    
    123,224
    
    
    
    101,957Unrecognized prior service cost
    
    
    (113,292
    )
    
    
    (111,533
    )Unrecognized net gain from experience differences
    
    
    (8,700
    )
    
    
    (89,095
    )1,232
    
    
    
    (98,671
    )Net projected asset
    
    
    208,619
    
    
    
    169,515Pension plans:Actuarial present value of benefit obligations:Vested benefit obligations
    
    
    284,962
    
    
    
    306,640Non-vested benefit obligations
    
    
    306,994
    
    
    
    339,987Accumulated benefit obligation
    
    
    591,956
    
    
    
    646,627Benefit attributable to projected salaries
    
    
    150,063
    
    
    
    157,277Projected benefit obligation
    
    
    742,019
    
    
    
    803,904Plan assets
    
    
    1,014,882
    
    
    
    1,209,151Plan assets in excess of projected benefit obligation
    
    
    272,863
    
    
    
    405,247Items to be amortized over an average 18-year period:Transition obligation
    
    
    128,983
    
    
    
    116,167Unrecognized prior service cost
    
    
    (15,324
    )
    
    
    (13,349
    )Unrecognized net gain from experience differences
    
    
    (492,259
    )
    
    
    (621,270
    )(378,600
    )
    
    
    (518,452
    )Net projected liability
    
    
    (105,737
    )
    
    
    (113,205
    )Severance indemnities:Actuarial present value of benefit obligations:Vested benefit obligations
    
    
    
    
    
    
    Non-vested benefit obligations
    
    
    276,638
    
    
    
    330,065Accumulated benefit obligation
    
    
    276,638
    
    
    
    330,065Benefit attributable to projected salaries
    
    
    26,193
    
    
    
    26,896Projected benefit obligation
    
    
    302,831
    
    
    
    356,961Plan assets
    
    
    
    
    
    
    Projected benefit obligation in excess of plan assets
    
    
    (302,831
    )
    
    
    (356,961
    )Items to be amortized over an
average 6-year period:Unrecognized net loss from experience difference
    
    
    
    
    
    
    13,616Net projected liability
    
    
    (302,831
    )
    
    
    (343,345
    )Total labor liabilities
    
    Ps.
    (199,949
    )
    
    Ps.
    (287,035
    )
  F-22




---



##### Table of Contents



11. Commitments and Contingencies
    F-23




---



##### Table of Contents



Thousands ofU.S. Dollars2007
    
    U.S.$
    14,7072008
    
    
    13,4772009
    
    
    10,8982010
    
    
    5,9382011 and thereafter
    
    
    18,466U.S.$
    63,486
    2007
    
    Ps.
    105,5322008
    
    
    94,1052009
    
    
    91,1402010
    
    
    86,0352011
    
    
    82,467Thereafter
    
    
    1,284,281Ps.
    1,743,560
    F-24




---



##### Table of Contents



Univision
     12. Capital Stock, Stock Purchase Plan and Long-term Retention Plan
 Capital Stock
  F-25




---



##### Table of Contents



Authorized
    
    Repurchased
    
    Acquired by a
    
    Acquired by aand
    
    by the
    
    Companys
    
    CompanysIssued (1)
    
    Company (2)
    
    Trust (3)
    
    Subsidiary (4)
    
    OutstandingSeries A Shares
    
    
    123,478,024
    
    
    
    (1,342,667
    )
    
    
    (7,164,764
    )
    
    
    (1,185,988
    )
    
    
    113,784,605Series B Shares
    
    
    59,162,449
    
    
    
    (1,181,547
    )
    
    
    (3,806,726
    )
    
    
    (609,484
    )
    
    
    53,564,692Series D Shares
    
    
    90,372,213
    
    
    
    (1,879,735
    )
    
    
    (2,339,243
    )
    
    
    (936,741
    )
    
    
    85,216,494Series L Shares
    
    
    90,372,213
    
    
    
    (1,879,735
    )
    
    
    (2,339,243
    )
    
    
    (936,741
    )
    
    
    85,216,494Total shares
    
    
    363,384,899
    
    
    
    (6,283,684
    )
    
    
    (15,649,976
    )
    
    
    (3,668,954
    )
    
    
    337,782,285Shares in the form of CPOs(5)
    
    
    302,100,601
    
    
    
    (6,283,684
    )
    
    
    (7,819,754
    )
    
    
    (3,131,390
    )
    
    
    284,865,773CPOs(5)
    
    
    2,582,056
    
    
    
    (53,707
    )
    
    
    (66,835
    )
    
    
    (26,764
    )
    
    
    2,434,750
 
 (1)
    
    In April 2004, the Companys stockholders approved a restructuring of the
Companys capital stock (the Recapitalization), which comprised the
following: (i) a 25-for-one stock split, which became effective on July
26, 2004 (all the Companys share and per share data in these financial
statements are presented on a post-split basis); (ii) the creation of the
Series B Shares; (iii) a 14-for-25 stock dividend in the amount of Ps.
1,007,508 (nominal of Ps. 906,114); and (iv) an increase in the number of
shares represented by each outstanding CPO. The Recapitalization
increased the number of the Companys shares by a factor of 39 on a
pre-split basis but did not affect the Companys total equity or dilute
the equity interest of any stockholder.(2)
    
    In 2004, 2005 and 2006, the Company repurchased 1,813,102 thousand,
3,645,463 thousand, and 6,714,057 thousand shares, respectively, in the
form of 15,497 thousand, 31,158 thousand, and 57,385 thousand CPOs,
respectively, in the amount of Ps. 419,446, Ps. 1,108,338 and Ps.
2,595,366, respectively, in connection with a share repurchase program
that was approved by the Companys stockholders and exercised at the
discretion of management. In 2004, the Company resold 468 thousand shares
in the form of four thousand CPOs, repurchased under this program, in the
amount of Ps. 109. In April 2006, the Companys stockholders approved (i)
the cancellation of 5,888,469.6 thousand shares of capital stock in the
form of 50,328.8 thousand CPOs, which were repurchased by the Company
under this program in 2004, 2005 and 2006; and (ii) up to 15% of the
outstanding shares of the Companys common stock as the amount of shares
that can be repurchased by the Company.(3)
    
    In connection with the Companys Long-Term Retention Plan described below.(4)
    
    In connection with the Companys Stock Purchase Plan described below.(5)
    
    In 2004 and 2005, the Company issued an aggregate of 392,841 thousand
additional CPOs by combining Series A Shares, Series B Shares, Series
D Shares and Series L Shares, not in the form of CPOs, which were
owned by certain stockholders (312,880 thousand CPOs) or acquired
primarily by trusts designated for purposes of the Groups stock purchase
plans (79,961 thousand CPOs).    F-26




---



##### Table of Contents



Stock Purchase Plan
  Long-term Retention Plan
    Stock
    
    Long-termPurchase Plan
    
    Retention PlanArrangements:Year of grant
    
    
    2003
    
    
    
    2004
    
    
    
    2004Number of CPOs granted
    
    
    2,360
    
    
    
    32,918
    
    
    
    46,784Contractual life
    
    3-5 years
    
    1-3 years
    
    4-6 yearsAssumptions:Dividend yield
    
    
    3.00
    %
    
    
    3.00
    %
    
    
    3.00
    %Expected volatility(1)
    
    
    31.88
    %
    
    
    21.81
    %
    
    
    22.12
    %Risk-free interest rate
    
    
    9.35
    %
    
    
    6.52
    %
    
    
    8.99
    %Expected life of awards (in years)
    
    4.01 years
    
    2.62 years
    
    4.68 years
 
 (1)
    
    Volatility was determined by reference to historically observed prices
of the Groups CPO. F-27




---



##### Table of Contents



2005
    
    2006Weighted-
    
    
    
    
    
    Weighted-Average
    
    
    
    
    
    AverageCPOs
    
    Exercise Price
    
    CPOs
    
    Exercise PriceStock Purchase Plan:Outstanding at beginning of year
    
    
    71,262
    
    
    
    14.36
    
    
    
    48,182
    
    
    
    14.99Granted
    
    
    599
    
    
    
    13.81
    
    
    
    
    
    
    
    Exercised
    
    
    (23,455
    )
    
    
    11.42
    
    
    
    (29,050
    )
    
    
    12.39Forfeited
    
    
    (224
    )
    
    
    14.28
    
    
    
    (716
    )
    
    
    13.07Outstanding at beginning of year
    
    
    48,182
    
    
    
    14.99
    
    
    
    18,416
    
    
    
    16.30Exercisable at end of year
    
    
    4,472
    
    
    
    16.87
    
    
    
    8,492
    
    
    
    15.80Long  Term Retention Plan:Outstanding at beginning of year
    
    
    45,109
    
    
    
    13.45
    
    
    
    46,784
    
    
    
    12.10Granted
    
    
    2,714
    
    
    
    12.10
    
    
    
    1,340
    
    
    
    11.75Exercised
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Forfeited
    
    
    (1,039
    )
    
    
    12.10
    
    
    
    (734
    )
    
    
    11.75Outstanding at beginning of year
    
    
    46,784
    
    
    
    12.10
    
    
    
    47,390
    
    
    
    11.75Exercisable at end of year
    
    
    
    
    
    
    
    
    
    
    9,675
    
    
    
    11.75
  13. Retained Earnings
         F-28




---



##### Table of Contents



14. Comprehensive Income (Loss)
  2004
    
    
    2005
    
    
    2006Net income
    
    Ps.
    4,641,404
    
    
    Ps.
    6,373,822
    
    
    Ps.
    8,586,188Other comprehensive (loss) income, net:Foreign currency translation adjustments, net(1)
    
    
    (208,784
    )
    
    
    (185,393
    )
    
    
    574,099Result from holding non-monetary assets, net(2)
    
    
    (137,107
    )
    
    
    (552,880
    )
    
    
    (64,870
    )Result from available for-sale investments, net(3)
    
    
    
    
    
    
    
    
    
    
    (578,656
    )Gain (loss) on equity accounts of investees, net(4)
    
    
    128,600
    
    
    
    (197,076
    )
    
    
    55,831Total other comprehensive loss, net
    
    
    (217,291
    )
    
    
    (935,349
    )
    
    
    (13,596
    )Comprehensive income
    
    Ps.
    4,424,113
    
    
    Ps.
    5,438,473
    
    
    Ps.
    8,572,592
 
 (1)
    
    The amounts for 2004, 2005 and 2006 include the foreign exchange gain
(loss) of, Ps.45,850, Ps.433,752 and Ps.(572,738), respectively, which
were hedged in connection with the Groups net investment in Univision
as a foreign entity investment through June 30, 2006 (see Notes 1(c),
5 and 17).(2)
    
    Represents the difference between specific costs (net replacement cost
or Specific Index) of non-monetary assets and the restatement of such
assets using the NCPI, net of deferred tax (provision) benefit of
Ps.58,952, Ps.221,285 and Ps.30,300 for the years ended December 31,
2004, 2005 and 2006, respectively.(3)
    
    The amount for 2006 includes a foreign exchange loss of Ps.(97,668),
net of foreign exchange gain of Ps.539,563, which was hedged in
connection with the Groups available-for-sale investment in Univision
beginning July 1, 2006 (see Notes 1(c), 5 and 17); loss on monetary
position of Ps.(434,153); and other fair value loss of Ps.(46,835).(4)
    
    Represents the gains or losses on the dilution of investments in
equity investees and the recognition of the components of other
comprehensive income recorded by the equity investees.  Gain
    
    
    
    
    
    
    Result from
    
    
    Cumulative
    
    
    Cumulative
    
    
    Cumulative(Loss) on
    
    
    
    
    
    
    Available-
    
    
    Result from
    
    
    Result from
    
    
    Effect of
    
    
    AccumulatedEquity
    
    
    Accumulated
    
    
    For-Sale
    
    
    Holding Non-
    
    
    Foreign
    
    
    Deferred
    
    
    OtherAccounts of
    
    
    Monetary
    
    
    Financial
    
    
    Monetary
    
    
    Currency
    
    
    Income
    
    
    ComprehensiveInvestees
    
    
    Result
    
    
    Assets
    
    
    Assets
    
    
    Translation
    
    
    Taxes
    
    
    LossBalance at January 1, 2004
    
    Ps.
    4,090,044
    
    
    Ps.
    (33,912
    )
    
    Ps.
    
    
    
    Ps.
    (1,809,554
    )
    
    Ps.
    (1,676,422
    )
    
    Ps.
    (3,107,621
    )
    
    Ps.
    (2,537,465
    )Current year change
    
    
    128,600
    
    
    
    
    
    
    
    
    
    
    
    (137,107
    )
    
    
    (208,784
    )
    
    
    
    
    
    
    (217,291
    )Balance at December 31, 2004
    
    
    4,218,644
    
    
    
    (33,912
    )
    
    
    
    
    
    
    (1,946,661
    )
    
    
    (1,885,206
    )
    
    
    (3,107,621
    )
    
    
    (2,754,756
    )Current year change
    
    
    (197,076
    )
    
    
    
    
    
    
    
    
    
    
    (552,880
    )
    
    
    (185,393
    )
    
    
    
    
    
    
    (935,349
    )Balance at December 31, 2005
    
    
    4,021,568
    
    
    
    (33,912
    )
    
    
    
    
    
    
    (2,499,541
    )
    
    
    (2,070,599
    )
    
    
    (3,107,621
    )
    
    
    (3,690,105
    )Current year change
    
    
    55,831
    
    
    
    
    
    
    
    (578,656
    )
    
    
    (64,870
    )
    
    
    574,099
    
    
    
    
    
    
    
    (13,596
    )Balance at December 31, 2006
    
    Ps.
    4,077,399
    
    
    Ps.
    (33,912
    )
    
    Ps.
    (578,656
    )
    
    Ps.
    (2,564,411
    )
    
    Ps.
    (1,496,500
    )
    
    Ps.
    (3,107,621
    )
    
    Ps.
    (3,703,701
    )
  F-29




---



##### Table of Contents



15. Minority Interest
  2005
    
    
    2006Capital stock
    
    Ps.
    3,944,409
    
    
    Ps.
    3,820,887Retained earnings
    
    
    (3,811,048
    )
    
    
    (2,435,414
    )Cumulative result from holding non-monetary assets
    
    
    (317,491
    )
    
    
    (332,534
    )Accumulated monetary result
    
    
    (885
    )
    
    
    (502
    )Cumulative effect of deferred income taxes
    
    
    (57,585
    )
    
    
    (57,585
    )Net income for the year
    
    
    1,127,959
    
    
    
    588,241Ps.
    885,359
    
    
    Ps.
    1,583,093
 16. Transactions with Related Parties
  2004
    
    
    2005
    
    
    2006Revenues:Royalties (Univision)(a)
    
    Ps.
    1,181,030
    
    
    Ps.
    1,152,054
    
    
    Ps.
    1,413,430Soccer transmission rights (Univision)
    
    
    76,564
    
    
    
    95,362
    
    
    
    96,062Programming production and transmission rights(b)
    
    
    235,419
    
    
    
    96,980
    
    
    
    35,139Administrative services(c)
    
    
    55,800
    
    
    
    76,727
    
    
    
    53,588Interest income
    
    
    963
    
    
    
    1,295
    
    
    
    16,524Advertising(d)
    
    
    116,540
    
    
    
    33,709
    
    
    
    87,643Ps.
    1,666,316
    
    
    Ps.
    1,456,127
    
    
    Ps.
    1,702,386Costs:Donations
    
    Ps.
    99,152
    
    
    Ps.
    110,474
    
    
    Ps.
    102,064Administrative services(c)
    
    
    5,863
    
    
    
    27,686
    
    
    
    11,212Other
    
    
    80,242
    
    
    
    242,760
    
    
    
    76,942Ps.
    185,257
    
    
    Ps.
    380,920
    
    
    Ps.
    190,218
 
 (a)
    
    The Group receives royalties from Univision for programming provided
pursuant to a program license agreement that expires in December 2017.
Royalties are determined based upon a percentage of combined net sales
of Univision, which was 9% plus an incremental percentage of up to 3%
over additional sales in 2004, 2005 and 2006.(b)
    
    Services rendered to Innova for the three months ended March 31, 2004,
and Endemol and other affiliates in 2004, 2005 and 2006.(c)
    
    The Group receives revenue from and is charged by affiliates for
various services, such as equipment rental, security and other
services, at rates which are negotiated. The Group provides management
services to affiliates, which reimburse the Group for the incurred
payroll and related expenses.(d)
    
    Advertising services rendered to Innova for the three months ended
March 31, 2004, to Univision in 2004, to OCEN in 2004, 2005 and 2006,
and Volaris in 2006.     F-30




---



##### Table of Contents



2005
    
    
    2006Receivables:CIE (see Notes 5 and 7)
    
    Ps.
    199,030
    
    
    Ps.
    Univision (see Note 5)
    
    
    92,582
    
    
    
    104,205Editorial Clío, Libros y Videos, S.A. de C.V.
    
    
    14,857
    
    
    
    6,922Volaris (see Note 2)
    
    
    
    
    
    
    33,129OCEN (see Notes 5 and 7)
    
    
    3,790
    
    
    
    1,954Other
    
    
    26,014
    
    
    
    38,604Ps.
    336,273
    
    
    Ps.
    184,814Payables:DIRECTV (payable in connection with the acquisition of a subscriber list, see Notes 2 and 7)
    
    Ps.
    (733,438
    )
    
    Ps.
    News Corp. (see Note 2)
    
    
    (48,191
    )
    
    
    (23,513
    )Other
    
    
    (29,026
    )
    
    
    (14,620
    )Ps.
    (810,655
    )
    
    Ps.
    (38,133
    )
   17. Integral Cost of Financing
  2004
    
    
    2005
    
    
    2006Interest expense(1)
    
    Ps.
    2,252,978
    
    
    Ps.
    2,221,015
    
    
    Ps.
    1,937,591Interest income
    
    
    (705,888
    )
    
    
    (969,905
    )
    
    
    (1,094,266
    )Foreign exchange loss, net(2)
    
    
    99,037
    
    
    
    757,036
    
    
    
    190,516(Gain) loss from monetary position(3)
    
    
    (15,939
    )
    
    
    (153,887
    )
    
    
    65,850Ps.
    1,630,188
    
    
    Ps.
    1,854,259
    
    
    Ps.
    1,099,691
 
 (1)
    
    Interest expense in 2004, 2005 and 2006, includes Ps. 217,713, Ps.
39,620 and Ps. 39,843, respectively, derived from the UDI index
restatement of Companys UDI-denominated debt securities and a net
gain from related derivative contracts of Ps. 32,659 F-31




---



##### Table of Contents



and Ps. 6,557, in
2004 and 2005, respectively (see Notes 8 and 9).(2)
    
    Net foreign exchange loss in 2004, 2005 and 2006, includes a net loss
from foreign currency derivative contracts of Ps. 103,500, Ps. 741,128
and Ps. 57,745, respectively. A foreign exchange gain in 2004 and 2005
of Ps. 45,850 and Ps. 433,752, respectively, and a foreign exchange
loss of Ps. 33,175 in 2006, were hedged by the Groups net investment
in Univision and recognized in stockholders equity as other
comprehensive loss (see Notes 1(c) and 14).(3)
    
    The gain or loss from monetary position represents the effects of
inflation, as measured by the NCPI in the case of Mexican companies,
or the general inflation index of each country in the case of foreign
subsidiaries, on the monetary assets and liabilities at the beginning
of each month. It also includes monetary loss in 2004, 2005 and 2006
of Ps.195,412, Ps.138,620 and Ps.107,607, respectively, arising from
temporary differences of non-monetary items in calculating deferred
income tax (see Note 20). 18. Restructuring and Non-recurring Charges
  2004
    
    
    2005
    
    
    2006Restructuring charges:Severance costs
    
    Ps.
    157,324
    
    
    Ps.
    43,028
    
    
    Ps.
    45,282Non-recurring charges:Impairment adjustments(1)
    
    
    247,298
    
    
    
    7,740
    
    
    
    90,078Expenses of debt placement(2)
    
    
    13,923
    
    
    
    188,452
    
    
    
    478,994Other
    
    
    6,432
    
    
    
    
    
    
    
    Ps.
    424,977
    
    
    Ps.
    239,220
    
    
    Ps.
    614,354
 
 (1)
    
    During 2004, the Group tested for impairment the carrying value of
goodwill and other intangible assets. As a result of such testing,
impairment adjustments were made to goodwill related primarily to the
Groups Publishing Distribution segment and publishing trademarks in
the amount of Ps. 204,178 and Ps. 43,120, respectively. During 2006,
the Group tested for impairment the carrying value of certain
trademarks of its Publishing segment. As a result of such testing, an
impairment adjustment was made to these intangible assets of
Ps.90,078. For purposes of the goodwill impairment test, the fair
value of the related reporting unit was estimated using appraised
valuations by experts.(2)
    
    Related to Senior Notes due 2011 and Notes denominated in Mexican UDIs
due 2007 in 2005 and Senior Notes due 2013 in 2006 (see Note 8). 19. Other Expense, Net
  2004
    
    
    2005
    
    
    2006Loss (gain) on disposition of investments, net (see Note 2)
    
    Ps.
    143,889
    
    
    Ps.
    179,269
    
    
    Ps.
    (18,848
    )Provision for doubtful non-trade accounts and write-off of other receivables
    
    
    40,610
    
    
    
    15,530
    
    
    
    Donations (see Note 16)
    
    
    177,772
    
    
    
    124,914
    
    
    
    130,110Financial advisory and professional services(1)
    
    
    71,948
    
    
    
    75,417
    
    
    
    99,149Loss on disposition of fixed assets
    
    
    71,361
    
    
    
    115,593
    
    
    
    Other expense (income), net
    
    
    48,150
    
    
    
    (27,686
    )
    
    
    630Ps.
    553,730
    
    
    Ps.
    483,037
    
    
    Ps.
    211,041
 
 (1)
    
    Includes financial advisory services in connection with contemplated
dispositions and strategic planning projects and professional services
in connection with certain litigation and other matters (see Notes 2,
12 and 16). 20. Income Taxes and Employees Profit Sharing
  F-32




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##### Table of Contents



2004
    
    
    2005
    
    
    2006Income tax and asset tax, current
    
    Ps.
    602,157
    
    
    Ps.
    1,601,399
    
    
    Ps.
    770,856Income tax and asset tax, deferred
    
    
    655,647
    
    
    
    (819,707
    )
    
    
    1,245,815Ps.
    1,257,804
    
    
    Ps.
    781,692
    
    
    Ps.
    2,016,671
  %2004
    
    2005
    
    2006Tax at the statutory rate on income before provisions
    
    
    33
    
    
    
    30
    
    
    
    29Differences in inflation adjustments for tax and book purposes
    
    
    2
    
    
    
    1
    
    
    
    Hedge
    
    
    
    
    
    
    1
    
    
    
    Non-deductible items
    
    
    3
    
    
    
    
    
    
    
    Special tax consolidation items
    
    
    
    
    
    
    (2
    )
    
    
    Unconsolidated income tax
    
    
    2
    
    
    
    
    
    
    
    Minority interest
    
    
    (4
    )
    
    
    (2
    )
    
    
    Excess in tax provision of prior years
    
    
    (2
    )
    
    
    (1
    )
    
    
    Changes in valuation allowances:Asset tax
    
    
    4
    
    
    
    
    
    
    
    3Tax loss carryforwards
    
    
    5
    
    
    
    (1
    )
    
    
    3Foreign operations
    
    
    (9
    )
    
    
    (5
    )
    
    
    (2
    )Recoverable income tax from repurchase of shares
    
    
    (5
    )
    
    
    
    
    
    
    Use of tax losses(a)
    
    
    (10
    )
    
    
    (12
    )
    
    
    (16
    )Provision for income tax and the asset tax
    
    
    19
    
    
    
    9
    
    
    
    17
 
 (a)
    
    In 2004, this amount represents the effect of the use of tax loss
carryforwards arising from the acquisition of certain other
subsidiaries in the second half of 2004. In 2005, this amount
represents the effect of the use of tax losses in connection with the
acquisition of Comtelvi (see Note 2). In 2006, this amount represents
the effect of the use of tax deductions related to certain
transactions made by the Group inconnection with a corporate
reorganization.  Amount
    
    
    ExpirationOperating tax loss carryforwards:Unconsolidated:Mexican subsidiaries(1)
    
    Ps.
    4,226,569
    
    
    From 2007 to 2016Non-Mexican subsidiaries(2)
    
    
    991,454
    
    
    From 2007 to 20255,218,023Capital tax loss carryforwards:Unconsolidated Mexican subsidiaries(3)
    
    
    403,658
    
    
    From 2007 to 2010Ps.
    5,621,681
 
 (1)
    
    During 2004, 2005 and 2006, certain Mexican subsidiaries utilized unconsolidated operating tax loss
carryforwards of Ps. 2,275,247, Ps. 465,795 and Ps. 3,161,005, respectively. In 2005 and 2006, that amount
includes the operating tax loss carryforwards related to the minority interest of Sky Mexico.(2)
    
    Approximately the equivalent of U.S.$91.8 million for subsidiaries in Spain, South America and the United States.(3)
    
    These carryforwards can only be used in connection with capital gains to be generated by such subsidiaries. F-33




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##### Table of Contents



2005
    
    
    2006Assets:Accrued liabilities
    
    Ps.
    839,540
    
    
    Ps.
    647,742Goodwill
    
    
    833,786
    
    
    
    778,200Tax loss carryforwards
    
    
    1,295,617
    
    
    
    1,296,464Allowance for doubtful accounts
    
    
    429,424
    
    
    
    274,974Customer advances
    
    
    1,434,881
    
    
    
    1,194,001Other items
    
    
    230,409
    
    
    
    165,163Liabilities:Inventories
    
    
    (225,100
    )
    
    
    (618,652
    )Property, plant and equipment, net
    
    
    (1,040,005
    )
    
    
    (1,072,480
    )Prepaid expenses
    
    
    (1,351,651
    )
    
    
    (1,246,859
    )Innova
    
    
    (1,375,773
    )
    
    
    (890,301
    )Deferred income taxes of Mexican companies
    
    
    1,071,128
    
    
    
    528,252Deferred income taxes of foreign subsidiaries
    
    
    (58,595
    )
    
    
    (115,354
    )Asset tax
    
    
    1,440,339
    
    
    
    1,402,658Valuation allowances(a)
    
    
    (2,659,111
    )
    
    
    (3,304,334
    )Deferred income tax liability
    
    
    (206,239
    )
    
    
    (1,488,778
    )Effect of change of income tax rates
    
    
    33,868
    
    
    
    Deferred income tax liability, net
    
    Ps.
    (172,371
    )
    
    Ps.
    (1,488,778
    )
 
 (a)
    
    Reflects valuation allowances of foreign subsidiaries of Ps. 292,268
and Ps. 344,792 at December 31, 2005 and 2006, respectively.  Tax LossCarryforwards
    
    
    Asset Tax
    
    
    Goodwill
    
    
    TotalBalance at beginning of year
    
    Ps.
    (1,015,642
    )
    
    Ps.
    (809,683
    )
    
    Ps.
    (833,786
    )
    
    Ps.
    (2,659,111
    )Increases
    
    
    (398,901
    )
    
    
    (301,908
    )
    
    
    
    
    
    
    (700,809
    )Decreases
    
    
    
    
    
    
    
    
    
    
    55,586
    
    
    
    55,586Balance at end of year
    
    Ps.
    (1,414,543
    )
    
    Ps.
    (1,111,591
    )
    
    Ps.
    (778,200
    )
    
    Ps.
    (3,304,334
    )
  Charge to the gain from monetary position(1)
    
    Ps.
    100,892Credit to the result from holding non-monetary assets
    
    
    (30,300
    )Charge to the provision for deferred income tax
    
    
    1,245,815Ps.
    1,316,407
 
 (1)
    
    Net of Ps. 107,607, representing the effect on restatement of the
non-monetary items included in the deferred tax calculation.  F-34




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##### Table of Contents



21. Earnings per CPO/Share
  2004
    
    2005
    
    2006Total Shares
    
    
    345,205,994
    
    
    
    341,158,189
    
    
    
    339,776,222CPOs
    
    
    2,293,867
    
    
    
    2,463,608
    
    
    
    2,451,792Shares not in the form of CPO units:Series A Shares
    
    
    55,524,135
    
    
    
    52,915,759
    
    
    
    52,915,849Series B Shares
    
    
    5,305,998
    
    
    
    108
    
    
    
    187Series D Shares
    
    
    6,645,321
    
    
    
    113
    
    
    
    239Series L Shares
    
    
    6,645,321
    
    
    
    113
    
    
    
    239
  2004
    
    
    2005
    
    
    2006Per Each
    
    
    
    
    
    
    Per Each
    
    
    
    
    
    
    Per EachPer
    
    
    Series A, B,
    
    
    Per
    
    
    Series A, B,
    
    
    Per
    
    
    Series A, B,CPO
    
    
    D and L Share
    
    
    CPO
    
    
    D and L Share
    
    
    CPO
    
    
    D and L ShareContinuing operations
    
    Ps.
    1.97
    
    
    Ps.
    0.02
    
    
    Ps.
    2.37
    
    
    Ps.
    0.02
    
    
    Ps.
    2.96
    
    
    Ps.
    0.03Cumulative loss of accounting change
    
    
    (0.37
    )
    
    
    
    
    
    
    (0.18
    )
    
    
    
    
    
    
    
    
    
    
    Net income
    
    Ps.
    1.60
    
    
    Ps.
    0.02
    
    
    Ps.
    2.19
    
    
    Ps.
    0.02
    
    
    Ps.
    2.96
    
    
    Ps.
    0.03
 22. Foreign Currency Position
  ForeignCurrencyAmounts
    
    Year-End
    
    Mexican(Thousands)
    
    Exchange Rate
    
    PesosAssets:U.S. dollars(1)
    
    
    2,424,404
    
    
    Ps.
    10.8025
    
    
    Ps.
    26,189,624Euros
    
    
    96,971
    
    
    
    14.2626
    
    
    
    1,383,059Chilean pesos
    
    
    8,989,901
    
    
    
    0.0202
    
    
    
    181,596Colombian pesos
    
    
    26,860,038
    
    
    
    0.0048
    
    
    
    128,928Other currencies
    
    
    
    
    
    
    
    
    
    
    133,606Liabilities:U.S. dollars(2)
    
    
    1,311,638
    
    
    Ps.
    10.8025
    
    
    Ps.
    14,168,970Euros
    
    
    9,810
    
    
    
    14.2626
    
    
    
    139,916Chilean pesos
    
    
    10,068,233
    
    
    
    0.0202
    
    
    
    203,378Colombian pesos
    
    
    27,710,309
    
    
    
    0.0048
    
    
    
    133,009Other currencies
    
    
    
    
    
    
    
    
    
    
    92,805
 
 (1)
    
    Includes assets in the amount of U.S.$1,094.4 million and U.S.$262.7
million, related to the available-for-sale investment in shares of
Univision and the investment in convertible debentures of Alvafig,
respectively, which foreign exchange result is recognized as a gain or
loss in accumulated other comprehensive result (see Note 1(c)).(2)
    
    Includes liabilities in the amount of U.S.$971.9 million, related to
the Senior Notes due in 2011, 2025 and 2032, which are partially
hedging the available-for-sale investment in shares of Univision (see
Note 1(c)). F-35




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##### Table of Contents



ForeignCurrencyAmounts
    
    Year-End
    
    Mexican(Thousands)
    
    Exchange Rate
    
    Pesos(1)Property, plant and equipment:U.S. dollars
    
    
    393,405
    
    
    Ps.
    10.8025
    
    
    Ps.
    4,249,758Japanese yen
    
    
    3,676,743
    
    
    
    0.0908
    
    
    
    333,848Euros
    
    
    17,017
    
    
    
    14.2626
    
    
    
    242,707Other currencies
    
    
    
    
    
    
    
    
    
    
    199,484Transmission rights and programming:U.S. dollars
    
    
    315,959
    
    
    Ps.
    10.8025
    
    
    Ps.
    3,413,147
 
 (1)
    
    Amounts translated at the year-end exchange rates for reference
purposes only; does not indicate the actual amounts accounted for in
the financial statements.  U.S. DollarEquivalentof otherForeignCurrency
    
    
    TotalU.S. Dollar
    
    
    Transactions
    
    
    U.S. Dollar
    
    
    Mexican(Thousands)
    
    
    (Thousands)
    
    
    (Thousands)
    
    
    Pesos(1)Income:Revenues
    
    $
    404,824
    
    
    $
    64,910
    
    
    $
    469,734
    
    
    Ps.
    5,074,302Other income
    
    
    9,662
    
    
    
    4,146
    
    
    
    13,808
    
    
    
    149,161Interest income
    
    
    39,377
    
    
    
    4,275
    
    
    
    43,652
    
    
    
    471,551$
    453,863
    
    
    $
    73,331
    
    
    $
    527,194
    
    
    Ps.
    5,695,014Purchases, costs and expenses:Purchases of inventories
    
    $
    254,217
    
    
    $
    24,026
    
    
    $
    278,243
    
    
    Ps.
    3,005,720Purchases of property and equipment
    
    
    82,440
    
    
    
    11,831
    
    
    
    94,271
    
    
    
    1,018,362Investments
    
    
    339,355
    
    
    
    138,175
    
    
    
    477,530
    
    
    
    5,158,517Costs and expenses
    
    
    383,267
    
    
    
    65,579
    
    
    
    448,846
    
    
    
    4,848,664Interest expense
    
    
    98,442
    
    
    
    128
    
    
    
    98,570
    
    
    
    1,064,802$
    1,157,721
    
    
    $
    239,739
    
    
    $
    1,397,460
    
    
    Ps.
    15,096,065
 
 (1)
    
    Income statement amounts translated at the year-end exchange rate of
Ps. 10.8025 for reference purposes only; does not indicate the actual
amounts accounted for in the financial statements (see Note 1(c)).   23. Segment Information
   F-36




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##### Table of Contents



Television Broadcasting
  Pay Television Networks
  Programming Exports
  Publishing
  Publishing Distribution
  Sky Mexico
  Cable Television
  Radio
  Other Businesses
  F-37




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##### Table of Contents



Intersegment
    
    
    Consolidated
    
    
    SegmentTotal Revenues
    
    
    Revenues
    
    
    Revenues
    
    
    Profit (Loss)2004:Television Broadcasting
    
    Ps.
    18,388,175
    
    
    Ps.
    440,734
    
    
    Ps.
    17,947,441
    
    
    Ps.
    8,343,836Pay Television Networks
    
    
    861,011
    
    
    
    120,575
    
    
    
    740,436
    
    
    
    320,974Programming Exports
    
    
    2,061,507
    
    
    
    
    
    
    
    2,061,507
    
    
    
    786,757Publishing
    
    
    2,250,807
    
    
    
    5,354
    
    
    
    2,245,453
    
    
    
    456,677Publishing Distribution
    
    
    1,692,358
    
    
    
    8,732
    
    
    
    1,683,626
    
    
    
    (27,290
    )Sky Mexico
    
    
    3,910,479
    
    
    
    46,227
    
    
    
    3,864,252
    
    
    
    1,439,253Cable Television
    
    
    1,212,755
    
    
    
    3,789
    
    
    
    1,208,966
    
    
    
    383,367Radio
    
    
    318,011
    
    
    
    53,065
    
    
    
    264,946
    
    
    
    34,134Other Businesses
    
    
    1,610,148
    
    
    
    107,803
    
    
    
    1,502,345
    
    
    
    (137,468
    )Segment totals
    
    
    32,305,251
    
    
    
    786,279
    
    
    
    31,518,972
    
    
    
    11,600,240Reconciliation to consolidated amounts:Eliminations and corporate expenses
    
    
    (786,279
    )
    
    
    (786,279
    )
    
    
    
    
    
    
    (167,706
    )Depreciation and amortization expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,231,065
    )Consolidated total
    
    Ps.
    31,518,972
    
    
    Ps.
    
    
    
    Ps.
    31,518,972
    
    
    Ps.
    9,201,469
    (1)2005:Television Broadcasting
    
    Ps.
    19,323,506
    
    
    Ps.
    570,651
    
    
    Ps.
    18,752,855
    
    
    Ps.
    9,211,431Pay Television Networks
    
    
    1,156,214
    
    
    
    304,920
    
    
    
    851,294
    
    
    
    539,072Programming Exports
    
    
    1,951,951
    
    
    
    
    
    
    
    1,951,951
    
    
    
    695,785Publishing
    
    
    2,607,052
    
    
    
    40,134
    
    
    
    2,566,918
    
    
    
    499,525Publishing Distribution
    
    
    418,495
    
    
    
    10,638
    
    
    
    407,857
    
    
    
    6,869Sky Mexico
    
    
    6,229,173
    
    
    
    33,240
    
    
    
    6,195,933
    
    
    
    2,618,809Cable Television
    
    
    1,462,098
    
    
    
    3,001
    
    
    
    1,459,097
    
    
    
    509,403Radio
    
    
    358,706
    
    
    
    53,322
    
    
    
    305,384
    
    
    
    54,316Other Businesses
    
    
    1,377,882
    
    
    
    71,608
    
    
    
    1,306,274
    
    
    
    (187,682
    )Segment totals
    
    
    34,885,077
    
    
    
    1,087,514
    
    
    
    33,797,563
    
    
    
    13,947,528Reconciliation to consolidated amounts:Eliminations and corporate expenses
    
    
    (1,087,514
    )
    
    
    (1,087,514
    )
    
    
    
    
    
    
    (189,867
    )Depreciation and amortization expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,517,015
    )Consolidated total
    
    Ps.
    33,797,563
    
    
    Ps.
    
    
    
    Ps.
    33,797,563
    
    
    Ps.
    11,240,646
    (1)2006:Television Broadcasting
    
    Ps.
    20,972,085
    
    
    Ps.
    558,579
    
    
    Ps.
    20,413,506
    
    
    Ps.
    10,597,965Pay Television Networks
    
    
    1,329,044
    
    
    
    279,037
    
    
    
    1,050,007
    
    
    
    682,251Programming Exports
    
    
    2,110,923
    
    
    
    
    
    
    
    2,110,923
    
    
    
    869,289Publishing
    
    
    2,885,448
    
    
    
    18,997
    
    
    
    2,866,451
    
    
    
    555,785Publishing Distribution
    
    
    433,533
    
    
    
    11,450
    
    
    
    422,083
    
    
    
    17,999Sky Mexico
    
    
    7,452,730
    
    
    
    90,426
    
    
    
    7,362,304
    
    
    
    3,555,478Cable Television
    
    
    1,984,743
    
    
    
    4,857
    
    
    
    1,979,886
    
    
    
    816,823Radio
    
    
    444,569
    
    
    
    42,829
    
    
    
    401,740
    
    
    
    94,565Other Businesses
    
    
    1,408,086
    
    
    
    83,145
    
    
    
    1,324,941
    
    
    
    (311,316
    )Segment totals
    
    
    39,021,161
    
    
    
    1,089,320
    
    
    
    37,931,841
    
    
    
    16,878,839Reconciliation to consolidated amounts:Eliminations and corporate expenses
    
    
    (1,089,320
    )
    
    
    (1,089,320
    )
    
    
    
    
    
    
    (450,879
    )Depreciation and amortization expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,679,066
    )Consolidated total
    
    Ps.
    37,931,841
    
    
    Ps.
    
    
    
    Ps.
    37,931,841
    
    
    Ps.
    13,748,894
    (1)
 
 (1)
    
    Consolidated totals represents consolidated operating income. Accounting Policies
  F-38




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##### Table of Contents



Intersegment Revenue
   Allocation of General and Administrative Expenses
   Additions toSegment
    
    
    Segment
    
    
    Property,Assets
    
    
    Liabilities
    
    
    Plant andat Year-End
    
    
    at Year-End
    
    
    Equipment2004:Continuing operations:Television operations(1)
    
    Ps.
    49,815,530
    
    
    Ps.
    22,178,189
    
    
    Ps.
    898,251Publishing
    
    
    2,136,114
    
    
    
    310,473
    
    
    
    57,301Publishing Distribution
    
    
    1,077,986
    
    
    
    396,112
    
    
    
    35,999Sky Mexico
    
    
    4,866,107
    
    
    
    7,790,701
    
    
    
    704,976Cable Television
    
    
    2,176,705
    
    
    
    349,102
    
    
    
    430,549Radio
    
    
    490,005
    
    
    
    58,762
    
    
    
    9,619Other Businesses
    
    
    3,565,641
    
    
    
    597,448
    
    
    
    42,733Total
    
    Ps.
    64,128,088
    
    
    Ps.
    31,680,787
    
    
    Ps.
    2,179,4282005:Continuing operations:Television operations(1)
    
    Ps.
    48,296,624
    
    
    Ps.
    23,234,275
    
    
    Ps.
    910,648Publishing
    
    
    2,147,308
    
    
    
    361,262
    
    
    
    11,005Publishing Distribution
    
    
    952,747
    
    
    
    442,505
    
    
    
    6,025Sky Mexico
    
    
    4,738,175
    
    
    
    6,219,153
    
    
    
    1,235,508Cable Television
    
    
    2,427,776
    
    
    
    488,407
    
    
    
    579,218Radio
    
    
    534,605
    
    
    
    72,520
    
    
    
    13,863Other Businesses
    
    
    3,737,771
    
    
    
    465,158
    
    
    
    92,808Total
    
    Ps.
    62,835,006
    
    
    Ps.
    31,283,280
    
    
    Ps.
    2,849,0752006:Continuing operations:Television operations(1)
    
    Ps.
    57,845,063
    
    
    Ps.
    23,414,660
    
    
    Ps.
    1,108,412Publishing
    
    
    2,106,095
    
    
    
    351,786
    
    
    
    35,184Publishing Distribution
    
    
    966,616
    
    
    
    456,556
    
    
    
    15,964Sky Mexico
    
    
    6,212,452
    
    
    
    5,416,342
    
    
    
    1,000,911Cable Television
    
    
    2,940,073
    
    
    
    736,171
    
    
    
    829,343Radio
    
    
    496,507
    
    
    
    90,455
    
    
    
    18,298Other Businesses
    
    
    4,568,076
    
    
    
    837,940
    
    
    
    296,211Total
    
    Ps.
    75,134,882
    
    
    Ps.
    31,303,910
    
    
    Ps.
    3,304,323
 
 (1)
    
    Segment assets and liabilities information is not maintained by the
Group for each of the Television Broadcasting, Pay Television Networks
and Programming Exports segments. In managements opinion, there is no
reasonable or practical basis to make allocations due to the
interdependence of these segments. Consequently, management has
presented such information on a combined basis as television
operations. F-39




---



##### Table of Contents



2005
    
    
    2006Segment assets
    
    Ps.
    62,835,006
    
    
    Ps.
    75,134,882Investments attributable to:Television operations(1)
    
    
    12,731,912
    
    
    
    1,674,503Other segments
    
    
    885,345
    
    
    
    4,057,367Goodwill  net attributable to:Television operations
    
    
    1,353,021
    
    
    
    1,352,642Publishing distribution
    
    
    24,629
    
    
    
    23,689Other segments
    
    
    391,988
    
    
    
    787,407Total assets
    
    Ps.
    78,221,901
    
    
    Ps.
    83,030,490
 
 (1)
    
    Includes goodwill attributable to equity investments of Ps. 5,722,211
and Ps.39,616 in 2005 and 2006, respectively.   2005
    
    
    2006Segment liabilities
    
    Ps.
    31,283,280
    
    
    Ps.
    31,303,910Notes payable and long-term debt not attributable to segments
    
    
    15,864,252
    
    
    
    15,122,207Total liabilities
    
    Ps.
    47,147,532
    
    
    Ps.
    46,426,117
 Geographical segment information
 Additions toTotal
    
    
    Segment Assets
    
    
    Property, PlantNet Sales
    
    
    at Year-End
    
    
    and Equipment2004:Mexico
    
    Ps.
    26,668,718
    
    
    Ps.
    55,515,952
    
    
    Ps.
    2,117,738Other countries
    
    
    4,850,254
    
    
    
    8,612,136
    
    
    
    61,690Ps.
    31,518,972
    
    
    Ps.
    64,128,088
    
    
    Ps.
    2,179,4282005:Mexico
    
    Ps.
    29,881,597
    
    
    Ps.
    56,175,843
    
    
    Ps.
    2,818,179Other countries
    
    
    3,915,966
    
    
    
    6,659,163
    
    
    
    30,896Ps.
    33,797,563
    
    
    Ps.
    62,835,006
    
    
    Ps.
    2,849,0752006:Mexico
    
    Ps.
    33,532,875
    
    
    Ps.
    69,584,295
    
    
    Ps.
    3,268,797Other countries
    
    
    4,398,966
    
    
    
    5,550,587
    
    
    
    35,526Ps.
    37,931,841
    
    
    Ps.
    75,134,882
    
    
    Ps.
    3,304,323
  F-40




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##### Table of Contents



24. Differences between Mexican FRS and U.S. GAAP
  Reconciliation of net income
 2004
    
    
    2005
    
    
    2006Net income as reported under Mexican FRS
    
    Ps.
    4,641,404
    
    
    Ps.
    6,373,822
    
    
    Ps.
    8,586,188U.S. GAAP adjustments:(a) Capitalization of financing costs, net of depreciation
    
    
    25,649
    
    
    
    9,772
    
    
    
    66,267(b) Deferred costs, net of amortization
    
    
    39,007
    
    
    
    (3,886
    )
    
    
    18,455(c) Deferred debt refinancing costs, net of amortization
    
    
    
    
    
    
    (582,743
    )
    
    
    30,259(d) Equipment inflation restatement, net of depreciation
    
    
    75,065
    
    
    
    (500,117
    )
    
    
    (116,669
    )(e) Purchase accounting adjustments:Amortization of network
affiliation agreements
    
    
    (6,900
    )
    
    
    (6,900
    )
    
    
    (6,900
    )Depreciation of fixed assets
    
    
    (11,679
    )
    
    
    (11,679
    )
    
    
    (11,679
    )Amortization of other assets
    
    
    (4,601
    )
    
    
    (4,852
    )
    
    
    (4,822
    )Amortization of subscribers list
    
    
    
    
    
    
    
    
    
    
    (100,405
    )(f) Goodwill and other intangible assets:Reversal of Mexican FRS impairment of goodwill
    
    
    185,770
    
    
    
    
    
    
    
    (g) Equity method investees:Innova
    
    
    1,401,192
    
    
    
    
    
    
    
    SMCP
    
    
    (488,764
    )
    
    
    1,357,516
    
    
    
    (i) Derivative financial instruments(1)
    
    
    (1,207,403
    )
    
    
    (255,780
    )
    
    
    (1,347,150
    )(j) Pension plan and seniority premiums
    
    
    24,685
    
    
    
    34,905
    
    
    
    (k) Employee stock-based compensation
    
    
    (331,330
    )
    
    
    45,448
    
    
    
    (l) Production and film costs
    
    
    (71,057
    )
    
    
    318,146
    
    
    
    271,106(m) Deferred income taxes and employees profit sharing:Deferred income taxes(1)
    
    
    352,411
    
    
    
    259,142
    
    
    
    74,461Deferred employees profit sharing (1)
    
    
    (71,504
    )
    
    
    74,198
    
    
    
    9,968(n) Maintenance reserve
    
    
    1,558
    
    
    
    5,151
    
    
    
    (2,645
    )(o) Reversal of hedge accounting for investment in Univision
    
    
    
    
    
    
    
    
    
    
    539,563(p) Minority interest on U.S. GAAP adjustments
    
    
    (27,683
    )
    
    
    (10,832
    )
    
    
    1,093Net income under U.S. GAAP
    
    Ps.
    4,525,820
    
    
    Ps.
    7,101,311
    
    
    Ps.
    8,007,090
 
 (1)
    
    Net of inflation effects  F-41




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##### Table of Contents



Reconciliation of stockholders equity
 2005
    
    
    2006Total stockholders equity under Mexican FRS
    
    Ps.
    31,074,369
    
    
    Ps.
    36,604,373U.S. GAAP adjustments:(a) Capitalization of financing costs, net of accumulated depreciation
    
    
    (884,322
    )
    
    
    (818,055
    )(b) Deferred costs, net of amortization
    
    
    (127,834
    )
    
    
    (109,379
    )(c) Deferred debt refinancing costs, net of amortization
    
    
    (582,743
    )
    
    
    (552,484
    )(d) Equipment inflation restatement, net of depreciation
    
    
    382,069
    
    
    
    258,689(e) Purchase accounting adjustments:Broadcast license and network affiliation agreements
    
    
    133,393
    
    
    
    126,493Fixed assets
    
    
    64,229
    
    
    
    52,550Other assets
    
    
    50,951
    
    
    
    45,811Goodwill on acquisition of Bay City
    
    
    (1,064,817
    )
    
    
    (1,064,817
    )Goodwill on acquisition of minority interest in Editorial Televisa
    
    
    1,309,215
    
    
    
    1,309,215Subscribers list
    
    
    
    
    
    
    502,023Goodwill on acquisition of minority interest in Innova
    
    
    
    
    
    
    83,112(f) Goodwill and other intangible assets:Reversal of Mexican FRS goodwill amortization
    
    
    775,993
    
    
    
    135,294Reversal of Mexican FRS amortization of intangible assets with
indefinite lives
    
    
    106,003
    
    
    
    106,003(g) Equity method investees:Others
    
    
    (2,357
    )
    
    
    (2,357
    )(h) Univision investment:Equity method adjustment
    
    
    113,486
    
    
    
    Goodwill on acquisition of additional interests
    
    
    (634,024
    )
    
    
    Adjustment to gain on sale of music recording business
    
    
    (312,276
    )
    
    
    (i) Derivative financial instruments
    
    
    1,347,150
    
    
    
    (j) Pension plan and seniority premiums
    
    
    59,589
    
    
    
    617,123(l) Production and film costs
    
    
    (1,754,030
    )
    
    
    (1,482,924
    )(m) Deferred income taxes and employees profit sharing:Deferred income taxes
    
    
    454,671
    
    
    
    374,901Deferred employees profit sharing
    
    
    (120,828
    )
    
    
    (110,860
    )(n) Maintenance reserve
    
    
    23,859
    
    
    
    21,214(p) Minority interest
    
    
    (930,406
    )
    
    
    (1,627,047
    )Total U.S. GAAP adjustments, net
    
    
    (1,593,029
    )
    
    
    (2,135,495
    )Total stockholders equity under U.S. GAAP
    
    Ps.
    29,481,340
    
    
    Ps.
    34,468,878
  Changes in U.S. GAAP stockholders equity
    
    2005
    
    
    2006Balance at January 1,
    
    Ps.
    28,112,748
    
    
    Ps.
    29,481,340Net income for the year
    
    
    7,101,311
    
    
    
    8,007,090Repurchase of capital stock
    
    
    (1,242,838
    )
    
    
    (3,107,697
    )Dividends
    
    
    (4,480,311
    )
    
    
    (1,119,749
    )Sale of capital stock under stock-based compensation plan
    
    
    327,308
    
    
    
    565,990Stock based compensation
    
    
    291,200
    
    
    
    235,047Benefit from capital contribution of minority interest in Sky México
    
    
    
    
    
    
    371,627Other comprehensive income:Changes in other comprehensive income of equity investees
    
    
    (197,077
    )
    
    
    576,369Net
unrealized loss on available-for-sale financial asset, net of tax
    
    
    
    
    
    
    (1,446,642
    )Result from
holding non-monetary assets, net of tax
    
    
    (248,496
    )
    
    
    (69,702
    )Foreign currency translation adjustment
    
    
    (182,505
    )
    
    
    573,781Adjustment to initially adopt FASB Statement 158, net of tax(1)
    
    
    
    
    
    
    401,424Balance at December 31,
    
    Ps.
    29,481,340
    
    
    Ps.
    34,468,878
 
 (1)
    
    2006 Comprehensive Income does not include the adjustment to initially adopt FASB Statement 158.  F-42




---



##### Table of Contents



(a) Capitalization of financing costs, net of depreciation
   (b) Deferred costs, net of amortization
   F-43




---



##### Table of Contents



(c) Deferred debt refinancing costs, net of amortization
   (d) Equipment inflation restatement, net of depreciation
    (e) Purchase accounting adjustments
      F-44




---



##### Table of Contents



(f) Goodwill and other intangible assets
   2005
    
    
    2006Consolidated subsidiaries:Television Broadcasting
    
    Ps.
    325,222
    
    
    Ps.
    324,882Publishing
    
    
    1,340,173
    
    
    
    1,339,198Other segments
    
    
    66,489
    
    
    
    149,601Equity method investees (1)
    
    
    5,834,058
    
    
    
    834,068Ps.
    7,565,942
    
    
    Ps.
    2,647,749
  2005
    
    
    2006Trademarks (2) (3)
    
    Ps.
    490,816
    
    
    Ps.
    598,238Television network concession (2)
    
    
    715,702
    
    
    
    715,702TVI concession(4)
    
    
    
    
    
    
    141,778Network affiliation agreements (2)
    
    
    115,569
    
    
    
    115,569Licenses and software
    
    
    354,266
    
    
    
    356,195Subscriber list
    
    
    450,340
    
    
    
    853,120Deferred financing costs
    
    
    311,585
    
    
    
    261,240Broadcast license
    
    
    17,824
    
    
    
    10,924Lease hold
improvements
    
    
    
    
    
    
    147,388Other TVI
    
    
    
    
    
    
    77,639Ps.
    2,456,102
    
    
    Ps.
    3,277,793
 F-45




---



##### Table of Contents



(1)
    
    Beginning July 1, 2006, the Groups investment in Univision both for Mexican FRS and U.S.
GAAP purposes, no longer qualifies for accounting under the equity method since the Groups
ability to exercise significant influence over operating and financial policies of Univision
no longer exists. The carrying value of the Groups net investment in Univision at December
31, 2005 included goodwill in the amount of Ps. 5,395,406, which in 2006 has been reclassified
to become part of the basis of the available-for-sale financial asset.(2)
    
    Indefinite-lived(3)
    
    Includes translation effect, impairment adjustments and acquisitions (see Note 7)(4)
    
    Represents a cable television company with a license to operate in the city of
Monterrey and surrounding areas. The license expires in 2026. The Group acquired a 50%
interest in this venture.  (g) Equity method investees
    Condensed Statement of Operations
 Year ended December 31, 2004OtherEquity



    Total EquityUnivision
    
    
    Investments
    
    
    InvestmentsNet sales
    
    Ps.
    21,420,908
    
    
    Ps.
    5,892,423
    
    
    Ps.
    27,313,331Total expenses
    
    
    16,380,673
    
    
    
    6,258,779
    
    
    
    22,639,452Income (loss) before income taxes and minority interest
    
    
    5,040,235
    
    
    
    (366,356
    )
    
    
    4,673,879Income tax provision
    
    
    (1,972,834
    )
    
    
    (175,056
    )
    
    
    (2,147,890
    )Income (loss) before minority interest
    
    
    3,067,401
    
    
    
    (541,412
    )
    
    
    2,525,989Minority interest
    
    
    
    
    
    
    (3,246
    )
    
    
    (3,246
    )U.S. GAAP net income (loss)
    
    Ps.
    3,067,401
    
    
    Ps.
    (544,658
    )
    
    Ps.
    2,522,743Televisas equity in net income (losses) of equity
investees, under U.S. GAAP
    
    Ps.
    291,768
    
    
    Ps.
    (148,855
    )
    
    Ps.
    142,913
 F-46




---



##### Table of Contents



Year ended December 31, 2005OtherEquity



  Total EquityUnivision
    
    
    Investments
    
    
    InvestmentsNet sales
    
    Ps.
    21,589,552
    
    
    Ps.
    3,525,695
    
    
    Ps.
    25,115,247Total expenses
    
    
    17,507,427
    
    
    
    3,718,229
    
    
    
    21,225,656Income (loss) before income taxes and minority interest
    
    
    4,082,125
    
    
    
    (192,534
    )
    
    
    3,889,591Income tax provision
    
    
    (2,012,446
    )
    
    
    (41,652
    )
    
    
    (2,054,098
    )Income (loss) before minority interest
    
    
    2,069,679
    
    
    
    (234,186
    )
    
    
    1,835,493Minority interest
    
    
    
    
    
    
    
    
    
    
    U.S. GAAP net income (loss)
    
    Ps.
    2,069,679
    
    
    Ps.
    (234,186
    )
    
    Ps.
    1,835,493Televisas equity in net income (losses) of equity
investees, under U.S. GAAP
    
    Ps.
    199,631
    
    
    Ps.
    (32,981
    )
    
    Ps.
    166,650
 Condensed Balance SheetsAs of December 31, 2005Other Equity
    
    
    Total EquityUnivision
    
    
    Investments
    
    
    InvestmentsCurrent assets
    
    Ps.
    7,005,850
    
    
    Ps.
    2,571,701
    
    
    Ps.
    9,577,551Non-current assets
    
    
    82,870,894
    
    
    
    1,777,551
    
    
    
    84,648,445Total assets
    
    Ps.
    89,876,744
    
    
    Ps.
    4,349,252
    
    
    Ps.
    94,225,996Current liabilities
    
    Ps.
    10,056,768
    
    
    Ps.
    1,355,690
    
    
    Ps.
    11,412,458Non-current liabilities
    
    
    23,528,809
    
    
    
    287,745
    
    
    
    23,816,554Stockholders equity
    
    
    56,291,167
    
    
    
    2,705,817
    
    
    
    58,996,984Total liabilities and stockholders equity
    
    Ps.
    89,876,744
    
    
    Ps.
    4,349,252
    
    
    Ps.
    94,225,996Televisas investment in and advances to
equity investees at cost plus equity in
undistributed earnings since acquisition
(net)
    
    Ps.
    6,001,239
    
    
    Ps.
    909,312
    
    
    Ps.
    6,910,551
  (h) Univision
 Equity
method adjustment
  Goodwill on acquisition of additional interests
  F-47




---



##### Table of Contents



Adjustment to gain on sale of music recording business
  Available-for-sale financial asset in 2006
  (i) Derivative financial instruments
  F-48




---



##### Table of Contents



(j) Pension plan and seniority premiums
    Components of Net Periodic Benefit Cost
  F-49




---



##### Table of Contents



2004
    
    
    2005
    
    
    2006Service cost
    
    Ps.
    69,119
    
    
    Ps.
    64,470
    
    
    Ps.
    65,931Interest cost
    
    
    37,032
    
    
    
    35,531
    
    
    
    38,382Expected return on plan assets
    
    
    (47,905
    )
    
    
    (57,827
    )
    
    
    (78,088
    )Net amortization and deferral
    
    
    8,220
    
    
    
    (15,196
    )
    
    
    6,261Net cost under U.S. GAAP
    
    
    66,466
    
    
    
    26,978
    
    
    
    32,486Net cost
under Mexican FRS
    
    
    91,151
    
    
    
    61,883
    
    
    
    32,486Reduction of net
cost that would be recognized
under U.S. GAAP
    
    Ps.
    (24,685
    )
    
    Ps.
    (34,905
    )
    
    Ps.
    
 Weighted-average Assumptions Used to Determine Net Periodic Benefit Cost for Years Ended
December 31
  2004

    
    2005

    
    2006Weighted average discount rate
    
    
    4
    %
    
    
    4
    %
    
    
    4
    %Rate of increase in future compensation levels
    
    
    2
    %
    
    
    2
    %
    
    
    2
    %Expected long-term rates of return on plan assets
    
    
    5
    %
    
    
    5
    %
    
    
    9
    %
  Obligations and Funded Status at December 31
  2005
    
    
    2006Projected benefit obligation
    
    Ps.
    1,003,489
    
    
    Ps.
    1,064,207Plan assets
    
    
    (1,483,739
    )
    
    
    (1,737,640
    )Funded status
    
    
    (480,250
    )
    
    
    (673,433
    )Unrecognized prior service cost
    
    
    (61,191
    )
    
    
    Unrecognized net loss
    
    
    378,969
    
    
    
    317,778
    
    
    
    Prepaid pension asset
    
    
    (162,472
    )
    
    
    (673,433
    )Severance indemnities  projected benefit obligation
    
    
    302,831
    
    
    
    343,345Balance
sheet liability (asset)
    
    Ps.
    140,359
    
    
    Ps.
    (330,088
    )Change in benefit obligation:Projected benefit obligation at beginning of year
    
    Ps.
    931,046
    
    
    Ps.
    1,003,489Service cost
    
    
    64,470
    
    
    
    65,931Interest cost
    
    
    35,531
    
    
    
    38,382Actuarial gain
    
    
    938
    
    
    
    (25,725
    )Benefits paid
    
    
    (28,496
    )
    
    
    (17,870
    )Projected benefit obligation at end of year
    
    Ps.
    1,003,489
    
    
    Ps.
    1,064,207
 F-50




---



##### Table of Contents



2005
    
    
    2006Change in plan assets:Fair value of plan assets at beginning of year
    
    Ps.
    1,201,495
    
    
    Ps.
    1,483,739Actual return on plan assets
    
    
    294,377
    
    
    
    293,811Plan asset contributions
    
    
    5,273
    
    
    
    Benefits paid
    
    
    (17,406
    )
    
    
    (39,910
    )Fair value of plan assets at end of year
    
    Ps.
    1,483,739
    
    
    Ps.
    1,737,640
 Plan Assets
  2005
    
    
    2006Equity securities
    
    
    65.9
    %
    
    
    72.5
    %Fixed rate instruments
    
    
    34.1
    %
    
    
    27.5
    %Total
    
    
    100.0
    %
    
    
    100.0
    %
     Before
    
    
    
    
    
    
    AfterApplication
    
    
    
    
    
    
    Applicationof SFAS 158
    
    
    Adjustments
    
    
    of SFAS 158Consolidated Balance Sheet DataPrepaid pension plans and seniority premiums
    
    Ps.
    
    
    
    Ps.
    330,088
    
    
    Ps.
    330,088Other assets
    
    
    88,116,251
    
    
    
    
    
    
    
    88,116,251Total assets
    
    Ps.
    88,116,251
    
    
    Ps.
    330,088
    
    
    Ps.
    88,446,339Deferred income taxes
    
    Ps.
    5,428,054
    
    
    Ps.
    156,110
    
    
    Ps.
    5,584,164Pension plans and seniority premiums
    
    
    227,446
    
    
    
    (227,446
    )
    
    
    Other liabilities
    
    
    46,766,250
    
    
    
    
    
    
    
    46,766,250Total liabilities
    
    
    52,421,750
    
    
    
    (71,336
    )
    
    
    52,350,414Minority
interest
    
    
    1,627,047
    
    
    
    
    
    
    
    1,627,047Total stockholders equity
    
    
    34,067,454
    
    
    
    401,424
    
    
    
    34,468,878Total
liabilities and stockholders equity
    
    Ps.
    88,116,251
    
    
    Ps.
    330,088
    
    
    Ps.
    88,446,339
  F-51




---



##### Table of Contents



Net gain, net of income tax
    
    Ps.
    437,690Prior service costs, net of income tax
    
    
    (36,266
    )Ps.
    401,424
 (k) Employee
stock-based compensation
        (l) Production and film costs
  F-52




---



##### Table of Contents



(m) Deferred
income taxes and employees' profit sharing
    December 31,2005
    
    
    2006Net deferred income tax liability recorded under Mexican
FRS on Mexican FRS balances (see Note 20)
    
    Ps.
    (172,371
    )
    
    Ps.
    (1,488,778
    )Reclassification of non-current taxes related to
non-wholly owned subsidiaries (Innova)
    
    
    1,375,772
    
    
    
    890,301Net deferred income tax amount under SFAS 109 applied to
Mexican FRS balances
    
    
    1,203,401
    
    
    
    (598,477
    )Impact of U.S. GAAP adjustments:Capitalization of financing costs
    
    
    247,610
    
    
    
    229,056Deferred costs
    
    
    35,793
    
    
    
    30,626Equipment inflation restatement
    
    
    (106,979
    )
    
    
    (72,433
    )Purchase accounting adjustments
    
    
    (69,601
    )
    
    
    (62,961
    )Adjustment of gain on sale of music recording business
    
    
    87,438
    
    
    
    Pension plan and seniority premiums
    
    
    (16,685
    )
    
    
    (172,795
    )Derivative financial instruments
    
    
    (377,202
    )
    
    
    Production and film costs
    
    
    491,129
    
    
    
    415,219Maintenance reserve
    
    
    
    
    
    
    (5,940
    )Subscriber list
    
    
    
    
    
    
    (140,566
    )Deferred premiums, net of amortization
    
    
    163,168
    
    
    
    154,695454,671
    
    
    
    374,901Net deferred
income tax asset (liability) under U.S. GAAP
    
    
    1,658,072
    
    
    
    (223,576
    )Less:Deferred income tax amount under SFAS 109 applied to
Mexican FRS balances
    
    
    1,203,401
    
    
    
    (598,477
    )Net deferred income tax adjustment required under U.S. GAAP
    
    Ps.
    454,671
    
    
    Ps.
    374,901
 F-53




---



##### Table of Contents



2006Charge to the provision for deferred income tax
    
    Ps.
    (1,757,717
    )Credit to the result from holding non-monetary assets
    
    
    32,179Charge to the provision for deferred income tax to
initially adopt FASB Statement 158
    
    
    (156,110
    )Ps.
    (1,881,648
    )
  December 31,2005
    
    
    2006Deferred EPS liability:Current:Inventories
    
    Ps.
    2,130
    
    
    Ps.
    2,047Noncurrent:Property, plant and equipment
    
    
    (120,080
    )
    
    
    (113,264
    )Deferred costs
    
    
    (59,845
    )
    
    
    (57,291
    )Pension plan and seniority premiums
    
    
    78,433
    
    
    
    76,152Other
    
    
    (21,466
    )
    
    
    (18,504
    )Total deferred EPS liability
    
    Ps.
    (120,828
    )
    
    Ps.
    (110,860
    )
  2004
    
    
    2005
    
    
    2006Current:Mexican
    
    Ps.
    538,293
    
    
    Ps.
    1,083,409
    
    
    Ps.
    92,228Foreign
    
    
    4,362
    
    
    
    207,276
    
    
    
    193,157542,655
    
    
    
    1,290,685
    
    
    
    285,385Deferred:Mexican
    
    
    29,016
    
    
    
    (757,939
    )
    
    
    1,754,658Foreign
    
    
    1,381
    
    
    
    2,070
    
    
    
    3,05930,397
    
    
    
    (755,869
    )
    
    
    1,757,717Ps.
    573,052
    
    
    Ps.
    534,816
    
    
    Ps.
    2,043,102
 F-54




---



##### Table of Contents



Effects of inflation accounting on U.S. GAAP adjustments
   (n) Maintenance reserve
  (o) Reversal of hedge accounting for investment in Univision
    (p) Minority interest
   F-55




---



##### Table of Contents



Additional disclosure requirements
 Presentation in the financial statements  Operating income
   F-56




---



##### Table of Contents



Year ended December 31,2004
    
    
    2005
    
    
    2006Net sales
    
    Ps.
    31,518,972
    
    
    Ps.
    33,797,563
    
    
    Ps.
    37,931,841Cost of providing services (exclusive of depreciation
and amortization)
    
    
    15,995,768
    
    
    
    14,992,139
    
    
    
    15,914,421Selling and administrative expenses
    
    
    4,932,879
    
    
    
    5,262,633
    
    
    
    5,544,317Depreciation and amortization
    
    
    2,161,000
    
    
    
    3,128,435
    
    
    
    2,915,217Income from operations
    
    
    8,429,325
    
    
    
    10,414,356
    
    
    
    13,557,886Integral result of financing, net
    
    
    (2,803,480
    )
    
    
    (2,743,828
    )
    
    
    (2,207,078
    )Other
(expense) income, net
    
    
    (393,021
    )
    
    
    937,739
    
    
    
    (111,262
    )Income
before income taxes, minority interest and equity
in earnings or losses of affiliates
    
    
    5,232,824
    
    
    
    8,608,267
    
    
    
    11,239,546Income tax and assets tax  current and deferred
    
    
    (573,052
    )
    
    
    (534,816
    )
    
    
    (2,043,102
    )Income before minority interest and equity in earnings
or losses of affiliates
    
    
    4,659,772
    
    
    
    8,073,451
    
    
    
    9,196,444Minority interest
    
    
    (276,865
    )
    
    
    (1,138,790
    )
    
    
    (587,148
    )Equity in
earnings (losses) of affiliates
    
    
    142,913
    
    
    
    166,650
    
    
    
    (602,206
    )Net income
    
    Ps.
    4,525,820
    
    
    Ps.
    7,101,311
    
    
    Ps.
    8,007,090Weighted average common shares outstanding (in millions)
    
    
    345,206
    
    
    
    341,158
    
    
    
    339,776
 Presentation in the financial statements  Earnings per CPO and per share
   2004
    
    
    2005
    
    
    2006Series A
    
    
    
    
    
    
    Series A
    
    
    
    
    
    
    Series Aand B
    
    
    
    
    
    
    and B
    
    
    
    
    
    
    and BCPO
    
    
    Shares
    
    
    CPO
    
    
    Shares
    
    
    CPO
    
    
    SharesBasic EPSIncome from continuing operations available to common shareholders
    
    
    3,552,769
    
    
    
    814,647
    
    
    
    5,984,597
    
    
    
    1,101,231
    
    
    
    6,760,300
    
    
    
    1,246,779Net income available to common shareholders
    
    
    3,552,769
    
    
    
    814,647
    
    
    
    5,984,597
    
    
    
    1,101,231
    
    
    
    6,760,300
    
    
    
    1,246,779Weighted average number of common shares outstanding
    
    
    2,293,867
    
    
    
    60,830,133
    
    
    
    2,463,608
    
    
    
    52,915,867
    
    
    
    2,451,792
    
    
    
    52,916,036Basic earnings per share (continuing operations)
    
    Ps.
    1.55
    
    
    Ps.
    0.01
    
    
    Ps.
    2.43
    
    
    Ps.
    0.02
    
    
    Ps.
    2.76
    
    
    Ps.
    0.02Basic earnings per share (net income)
    
    Ps.
    1.55
    
    
    Ps.
    0.01
    
    
    Ps.
    2.43
    
    
    Ps.
    0.02
    
    
    Ps.
    2.76
    
    
    Ps.
    0.02Diluted EPSDilutive Potential Shares
    
    
    64,150
    
    
    
    
    
    
    
    63,064
    
    
    
    
    
    
    
    47,354
    
    
    
    Total Diluted weighted average common shares outstanding
    
    
    2,358,017
    
    
    
    60,830,133
    
    
    
    2,526,672
    
    
    
    52,915,867
    
    
    
    2,499,146
    
    
    
    52,916,036Diluted earnings per share (continuing operations)
    
    Ps.
    1.51
    
    
    Ps.
    0.01
    
    
    Ps.
    2.37
    
    
    Ps.
    0.02
    
    
    Ps.
    2.71
    
    
    Ps.
    0.02Diluted earnings per share (net income)
    
    Ps.
    1.51
    
    
    Ps.
    0.01
    
    
    Ps.
    2.37
    
    
    Ps.
    0.02
    
    
    Ps.
    2.71
    
    
    Ps.
    0.02
 F-57




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##### Table of Contents



Presentation in the financial statements  Consolidated balance sheets
  December 31,2005
    
    
    2006ASSETSCurrent assets:Cash and cash equivalents
    
    Ps.
    15,259,794
    
    
    Ps.
    14,901,209Other investments
    
    
    117,140
    
    
    
    909,539Trade notes and accounts receivable, net
    
    
    14,459,545
    
    
    
    13,597,569Other accounts and notes receivable, net
    
    
    593,738
    
    
    
    1,488,340Due from affiliated companies
    
    
    307,247
    
    
    
    441,541Transmission rights and programming
    
    
    3,246,981
    
    
    
    3,053,174Inventories
    
    
    664,151
    
    
    
    772,890Available-for-sale investments
    
    
    
    
    
    
    11,821,932Current deferred taxes
    
    
    4,052,295
    
    
    
    2,344,365Other current assets
    
    
    601,498
    
    
    
    771,083Total current assets
    
    
    39,302,389
    
    
    
    50,101,642Non-current assets:Transmission rights and programming
    
    
    2,325,862
    
    
    
    1,945,924Investments
    
    
    6,910,551
    
    
    
    1,708,073Property, plant and equipment, net
    
    
    20,090,160
    
    
    
    20,469,123Goodwill, net
    
    
    7,565,942
    
    
    
    2,647,749Intangible assets, net
    
    
    2,456,102
    
    
    
    3,277,793Deferred taxes
    
    
    4,344,273
    
    
    
    4,152,222Derivative financial instruments
    
    
    2,304,181
    
    
    
    3,743,506Prepaid
pension and seniority premiums
    
    
    
    
    
    
    330,088Other assets
    
    
    210,069
    
    
    
    70,219Total assets
    
    Ps.
    85,509,529
    
    
    Ps.
    88,446,339LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Current portion of long-term debt
    
    Ps.
    354,256
    
    
    Ps.
    986,368Current portion of satellite transponder lease obligation
    
    
    78,668
    
    
    
    86,176Trade accounts payable
    
    
    3,074,484
    
    
    
    3,450,753Customer deposits and advances
    
    
    16,168,025
    
    
    
    16,893,604Taxes payable
    
    
    1,098,587
    
    
    
    1,179,477Current deferred taxes
    
    
    1,351,652
    
    
    
    1,246,859Accrued interest
    
    
    348,171
    
    
    
    262,064Other accrued liabilities
    
    
    1,621,150
    
    
    
    2,026,523Due from affiliated companies
    
    
    781,629
    
    
    
    38,133Total current liabilities
    
    
    24,876,622
    
    
    
    26,169,957Non-current liabilities:Long-term debt
    
    
    18,872,379
    
    
    
    17,795,330Satellite transponder lease obligation
    
    
    1,235,042
    
    
    
    1,120,415Customer deposits and advances
    
    
    2,609,862
    
    
    
    268,200Other long-term liabilities
    
    
    1,855,847
    
    
    
    1,412,348Deferred taxes
    
    
    5,507,672
    
    
    
    5,584,164Pension plans and seniority premiums
    
    
    140,359
    
    
    
    Total liabilities
    
    
    55,097,783
    
    
    
    52,350,414Commitments and contingenciesMinority interest
    
    
    930,406
    
    
    
    1,627,047Total stockholders equity
    
    
    29,481,340
    
    
    
    34,468,878Total liabilities and stockholders equity
    
    Ps.
    85,509,529
    
    
    Ps.
    88,446,339
 F-58




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##### Table of Contents



Cash flow information
    F-59




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##### Table of Contents



2004
    
    2005
    
    2006Operating activities:Net income under U.S. GAAP
    
    Ps.
    4,525,820
    
    
    Ps.
    7,101,311
    
    
    Ps.
    8,007,090Adjustments to reconcile net income to cash provided by operating
activities:Equity in
(income) loss of affiliates
    
    
    (142,913
    )
    
    
    (166,650
    )
    
    
    602,206Minority interest from continuing operations
    
    
    276,865
    
    
    
    1,138,790
    
    
    
    587,148Depreciation and amortization
    
    
    2,161,000
    
    
    
    3,128,435
    
    
    
    2,915,217Amortization
of deferred debt refinancing
    
    
    
    
    
    
    
    
    
    
    (30,259
    )Impairment adjustments
    
    
    61,528
    
    
    
    7,741
    
    
    
    90,078Pension plans and seniority premiums
    
    
    66,466
    
    
    
    329,809
    
    
    
    Deferred income tax
    
    
    101,901
    
    
    
    (755,869
    )
    
    
    1,757,717Loss (gain) on disposal of investment
    
    
    131,665
    
    
    
    (1,179,310
    )
    
    
    (18,848
    )Unrealized foreign exchange gain, net
    
    
    (76,779
    )
    
    
    (633,736
    )
    
    
    (327,345
    )Employee stock option plans
    
    
    331,330
    
    
    
    291,200
    
    
    
    235,047Maintenance reserve
    
    
    (1,558
    )
    
    
    (5,151
    )
    
    
    2,645Loss
(income) from monetary position
    
    
    161,419
    
    
    
    (185,529
    )
    
    
    (56,422
    )Changes in operating assets and liabilities:Decrease (increase) in:Trade notes and accounts receivable and customer
deposits and advances, net
    
    
    55,871
    
    
    
    (456,559
    )
    
    
    (1,317,735
    )Inventories
    
    
    (117,515
    )
    
    
    48,455
    
    
    
    (108,739
    )Transmission rights, programs and films and production talent
advances
    
    
    410,841
    
    
    
    689,527
    
    
    
    477,525Other accounts and notes receivable and other current assets
    
    
    (436,838
    )
    
    
    724,626
    
    
    
    (1,110,745
    )(Decrease) increase in:Trade accounts payable
    
    
    (439,064
    )
    
    
    861,285
    
    
    
    499,658Other liabilities and taxes payable
    
    
    293,650
    
    
    
    (840,032
    )
    
    
    309,089Pension plan and seniority premiums
    
    
    
    
    
    
    
    
    
    
    87,086Net cash provided by operating activities
    
    
    7,363,689
    
    
    
    10,098,343
    
    
    
    12,600,413Financing activities:Issuance of Senior Notes due 2025
    
    
    
    
    
    
    6,925,573
    
    
    
    Prepayments of Senior Notes and UDIs denominated Notes
    
    
    
    
    
    
    (5,660,730
    )
    
    
    Prepayment
of Senior Notes due 2013
    
    
    
    
    
    
    
    
    
    
    (2,924,600
    )Other
increase in debt
    
    
    
    
    
    
    
    
    
    
    3,500,000Deferred debt refinancing costs
    
    
    
    
    
    
    582,743
    
    
    
    Other changes in notes payable
    
    
    2,845,776
    
    
    
    (4,685,031
    )
    
    
    Derivative financial instruments
    
    
    1,097,118
    
    
    
    (724,847
    )
    
    
    (1,476,605
    )Repurchase of capital stock
    
    
    (876,748
    )
    
    
    (1,242,838
    )
    
    
    (3,107,697
    )Sale of
repurchased shares
    
    
    630,276
    
    
    
    327,308
    
    
    
    565,990Dividends paid
    
    
    (4,280,816
    )
    
    
    (4,480,311
    )
    
    
    (1,119,749
    )Minority interest
    
    
    (93,217
    )
    
    
    (112,989
    )
    
    
    109,493Net cash used by financing activities
    
    
    (677,611
    )
    
    
    (9,071,122
    )
    
    
    (4,453,168
    )Investing activities:Other investments
    
    
    1,836,001
    
    
    
    647,531
    
    
    
    (796,962
    )Due from affiliated companies, net
    
    
    (57,756
    )
    
    
    556,730
    
    
    
    (862,246
    )Equity investments and other advances
    
    
    (191,290
    )
    
    
    538,379
    
    
    
    (2,605,902
    )Investments in property, plant and equipment
    
    
    (2,015,848
    )
    
    
    (2,530,918
    )
    
    
    (2,783,265
    )Intangible assets and other assets
    
    
    (220,346
    )
    
    
    (1,517,166
    )
    
    
    (870,004
    )Net cash used for investing activities
    
    
    (649,239
    )
    
    
    (2,305,444
    )
    
    
    (7,918,379
    )Net increase (decrease) in cash and cash equivalents
    
    
    6,036,839
    
    
    
    (1,278,223
    )
    
    
    228,866Translation effect on cash and cash equivalents
    
    
    6,642
    
    
    
    (13,159
    )
    
    
    6,966Effect of inflation on cash and cash equivalents
    
    
    (687,936
    )
    
    
    (551,600
    )
    
    
    (594,417
    )Net increase
in cash and temporary investments of Innovas
consolidation
    
    
    503,045
    
    
    
    
    
    
    
    Cash and cash equivalents at beginning of year
    
    
    11,244,186
    
    
    
    17,102,776
    
    
    
    15,259,794Cash and cash equivalents at end of year
    
    Ps.
    17,102,776
    
    
    Ps.
    15,259,794
    
    
    Ps.
    14,901,209
 F-60




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##### Table of Contents



2004
    
    
    2005
    
    
    2006Interest
    
    Ps.
    1,760,556
    
    
    Ps.
    2,077,980
    
    
    Ps.
    1,825,717Income taxes and/or assets tax
    
    
    773,947
    
    
    
    557,348
    
    
    
    1,091,387
  Supplemental disclosures about non-cash activities:
 2004
    
    
    2005
    
    
    2006Note receivable related to customer deposits
    
    Ps.
    10,981,229
    
    
    Ps.
    12,797,785
    
    
    Ps.
    11,957,311
  Recently issued accounting standards
   F-61




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##### Table of Contents



Consolidated valuation and qualifying accounts
 Balance at
    
    
    
    
    
    
    
    
    
    Balance atBeginning
    
    
    
    
    
    
    
    
    
    EndDescription
    
    of Year
    
    Additions
    
    Deductions
    
    of YearContinuing operations:Reserve for damage, obsolescence or
deterioration of inventory:Year ended December 31, 2004
    
    Ps.
    12,864
    
    
    Ps.
    1,815
    
    
    Ps.
    (5,647
    )
    
    Ps.
    9,032Year ended December 31, 2005
    
    
    9,032
    
    
    
    2,437
    
    
    
    
    
    
    
    11,469Year ended December 31, 2006
    
    
    11,469
    
    
    
    
    
    
    
    (4,753
    )
    
    
    6,716Allowances for doubtful accounts (1):Year ended December 31, 2004
    
    Ps.
    1,002,809
    
    
    Ps.
    560,987
    
    
    Ps.
    (272,490
    )
    
    Ps.
    1,291,306Year ended December 31, 2005
    
    
    1,291,306
    
    
    
    323,578
    
    
    
    (357,851
    )
    
    
    1,257,033Year ended December 31, 2006
    
    
    1,257,033
    
    
    
    571,057
    
    
    
    (621,838
    )
    
    
    1,206,252
 
 (1)
    
    Include allowances for trade and non-trade doubtful accounts. F-62




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##### Table of Contents



25. Subsequent events
    F-63