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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 ON DECEMBER 31, 2009
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 FOR THE TRANSITION PERIOD FROM  TO
 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
 COMMISSION FILE NUMBER: 1-10905
 Vitro, S.A.B. de C.V.
  N/A
 United Mexican States
 Ave. Ricardo Margáin Zozaya 400, Col. Valle del Campestre,
San Pedro Garza García, Nuevo León, 66265 México
 Claudio Luis del Valle Cabello
Ave. Ricardo Margáin Zozaya 400, Col. Valle del Campestre,
San Pedro Garza García, Nuevo León, 66265 México
Tel: (52 81) 8863-1200
Fax: (52 81) 8335-7799
  Title of Each Class
    
    Name of Each Exchange on Which RegisteredShares of Series A common stock, no par value
    
    New York Stock Exchange*Ordinary Participation Certificate, each representing 
one share of Series A common stock
    
    New York Stock Exchange*American Depositary Shares, evidenced by American 
Depositary Receipts, each representing three Ordinary 
Participation Certificates
    
    New York Stock Exchange
 
 
 
 
 Yes o
    
    No þ
  Yes o
    
    No þ
  Yes o
    
    No þ
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
 o o þ
  Item 17 o
    
    Item 18 þ
  Yes o
    
    No þ




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TABLE OF CONTENTS
 PagePresentation of Certain Information
    
    iiiForward-Looking Statements
    
    vItem 1. Identity of Directors, Senior Management and Advisers
    
    
    1Item 2. Offer Statistics and Expected Timetable
    
    
    1Item 3. Key Information
    
    
    1Recent Developments
    
    
    1Risk Factors
    
    
    10Exchange Rates
    
    
    23Selected Consolidated Financial Information
    
    
    24Item 4. Information on the Company
    
    
    28Organizational Structure
    
    
    28Business
    
    
    29Item 4A. Unresolved Staff Comments
    
    
    45Item 5. Operating and Financial Review and Prospects
    
    
    46Operating Results
    
    
    46Liquidity and Capital Resources
    
    
    60Off-Balance Sheet Arrangements
    
    
    66Tabular Disclosure of Contractual Obligations
    
    
    67Accounting Considerations
    
    
    68Research and Development
    
    
    71Item 6. Directors, Senior Management and Employees
    
    
    72Directors and Senior Management
    
    
    72Board Practices
    
    
    79Employees
    
    
    83Share Ownership
    
    
    84Item 7. Major Shareholders and Related Party Transactions
    
    
    85Major Shareholders
    
    
    85Related Party Transactions
    
    
    87Item 8. Financial Information
    
    
    88Item 9. The Offer and Listing
    
    
    91Listing Details
    
    
    91Markets
    
    
    94Item 10. Additional Information
    
    
    95Mexican Corporate Law and By-Laws
    
    
    95Material Contracts
    
    
    107Exchange Controls
    
    
    107Material Tax Consequences
    
    
    108
  i




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PageWhere You Can Find More Information
    
    
    112Item 11. Quantitative and Qualitative Disclosures About Market Risk
    
    
    113Item 12. Description of Securities Other than Equity Securities
    
    
    117Item 13. Defaults, Dividend Arrearages and Delinquencies
    
    
    117Item 14. Material Modifications to the Rights of Security Holders and Use of
Proceeds
    
    
    117Item 15. Controls and Procedures
    
    
    117Item 16. Reserved
    
    
    120Item 16A. Audit Committee Financial Expert
    
    
    120Item 16B. Code of Ethics
    
    
    120Item 16C. Principal Accountant Fees and Services
    
    
    121Item 16D. Exemption from the Listing Standards for Audit Committees
    
    
    121Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers
    
    
    121Item 16F. Not Applicable
    
    
    121Item 16G. Corporate Governance Differences from NYSE Practices
    
    
    121Item 17. Financial Statements
    
    
    125Item 18. Financial Statements
    
    
    125Item 19. Exhibits
    
    
    126Exhibit 4.09Exhibit 4.10Exhibit 4.11Exhibit 8.1Exhibit 12.1Exhibit 12.2Exhibit 13.1
   ii




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PRESENTATION OF CERTAIN INFORMATION
 sociedad anónima
bursátil de capital variable
    Statement of Cash Flows Effects of Inflation Employee Benefits; Income Taxes Consolidated or Combined Financial Statements Intangible
Assets Share-based Payments
 Circular Única
    iii




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Diario Oficial de la Federación
      iv




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FORWARD-LOOKING STATEMENTS
    
    
    our ability to restructure and refinance our current debt;
    
    liquidity, debt repayment and access to credit;
    
    the general political, economic and competitive conditions in markets and countries
where we have operations, including the global recession conditions, competitive pricing
pressures, inflation or deflation, increased security risks and changes in tax rates;
    
    fluctuations in the price and availability of energy, raw materials, labor and
transportation;
    
    consolidation among competitors and customers;
    
    foreign currency exchange fluctuations relative to the U.S. dollar and the euro
against the Mexican peso;
    
    changes in capital availability or cost, including interest rate or foreign currency
exchange rate fluctuations;
    
    capacity utilization of our facilities;
    
    the ability to integrate operations of acquired businesses;
    
    consumer preferences for forms of packaging that are alternatives to glass containers;
    
    technological breakthroughs in the construction or auto industries which change the
actual use or applications of glass in such industries
    
    the ability to hire and retain experienced management;
    
    lifting of trade barriers and enforcement of measures against unfair trade practices;
    
    the enactment of stricter environmental laws; and
    
    the timing and occurrence of natural disasters and other events which are beyond our
control and our capacity to recover our level of operations after such events.
   v




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Item 1. Identity of Directors, Senior Management and Advisers
  
 Item 2. Offer Statistics and Expected Timetable
  
 Item 3. Key Information
 
 RECENT DEVELOPMENTS
 Vitros Financial Difficulties
 The global recession and its effects on our business
   Claims relating to our derivative financial instruments
     1




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Interest and principal payment default on the Old Notes and Vitros other debt
   2




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Certificados Bursátiles Certificados
Bursátiles Vitro 03 Certificados
Bursátiles Vitro 03 Certificados Bursátiles Vitro 03 Certificados Bursátiles Vitro 03 Certificados Bursátiles Vitro 03,
 Certificados Bursátiles Vitro 08
 Juzgado Quinto Civil Primera
Sala del Tribunal Superior de Justicia
 Concurso Mercantil
 Vitros Restructuring Process
  Financial liquidity transactions
  Bancomext Transaction
   3




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Refinancing of Bladex Credit Facility
  Fintech Sale and Leaseback Transaction
  Refinancing of Flat Glass Accounts Receivable Financing Program
  Refinancing Transaction Related to our Float Glass Inventory in Mexico
   4




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Covisa / Álcali Securitization Refinancing
  Renewal of Vitro Americas Credit Lines
  Refinancing of Credit Lines in Spain
  Restructuring negotiations
  Vitros Tender Offer and Exchange Offer and Consent Solicitation
  Minority Noteholders commence involuntary chapter 11 cases against Vitros U.S. subsidiaries
    5




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New York State Litigation against Vitro and certain of its non-U.S. subsidiaries
    Vacatur Vacatur Vacatur
  6




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Vitros Voluntary Concurso Proceeding and Chapter 15 Case
 concurso mercantil Concurso Concurso Concurso
 sentencia de
 concurso
 Involuntary Concurso Proceedings
 Concurso concurso mercantil Concurso visitador concurso mercantil visitador Concurso
  7




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Other Recent Developments
 Earthquake in Mexicali temporarily affected our facility
  Temporary suspension of operations at manufacturing facilities in García, Nuevo León
  
    
    two of our four automotive glass manufacturing facilities (both located in García) were
affected by this event; however, because of current inventory levels and measures taken to
restore production in the succeeding days, we were able to minimize the impact on our
original equipment manufacturer (OEM) clients and auto glass replacement clients;
    
    two of our three float glass manufacturing facilities (both located in García) were also
affected by this event; one of the affected facilities resumed normal operations initially
in the last week of July 2010; however, its operations were temporarily suspended due to
stability issues and it resumed full operations again in the last week of August 2010; the
other affected facility resumed operations in September 2010; our float glass facility in
Mexicali, which is currently operating at 100% capacity, temporarily supplied glass to our
OEM glass processing plants; and
    
    our facilities at Alcali suspended operations for a few days and a portion of Alcalis
end-product, raw material and packaging inventories were damaged; however, we were able to
minimize the impact on our clients by working jointly to supply only the minimal amount
necessary for them to continue operating.
   8




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Cost Reduction Initiatives
  Termination of ADRs
 Certificados de Participación Ordinaria
    9




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RISK FACTORS
 You should carefully consider the following risk factors, as well as all of the other
information presented in this annual report, including our consolidated financial statements and
the notes thereto. In general, investing in the securities of issuers in emerging market countries
such as Mexico involves certain risks not typically associated with investing in securities of U.S.
companies.
 The risks and uncertainties described below are not the only risks and uncertainties affecting
us. Additional risks and uncertainties that we do not know about or that we currently think are
immaterial also may impair our business operations or our ability to make payments under our
existing indebtedness.
 This annual report also contains forward-looking statements that involve risks. Our actual
results could differ materially from those anticipated in these forward-looking statements as a
result of certain factors, including risks faced by us describing this section, and under the Item
5. Operating and Financial Review and Prospects. See also cautionary statements regarding
Forward-Looking Statements.
 For purposes of this section, when we state that a risk, uncertainty or problem may, could or
would have an adverse effect on us, we mean that the risk, uncertainty or problem may, could or
would have an adverse effect on our business, financial condition, liquidity, results of operations
or prospects, except as otherwise indicated or as the context may otherwise require.
 RISK FACTORS RELATING TO THE CONCURSO PLAN
 If the Concurso Plan or any other revised plan or prepackaged plan of concurso mercantil is not
consummated, we will not be able to successfully restructure our debt.
  Certificados Bursátiles Vitro 03 Certificados
Bursátiles Vitro 08, Certificados Bursátiles Vitro 03 Certificados Bursátiles Vitro 03 Certificados Bursátiles Vitro 03 Certificados Bursátiles Vitro 03, the holders
 Concurso Mercantil
  10




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por aval
  Concurso concurso mercantil Concurso
 Even if the Concurso Plan is approved by the Mexican bankruptcy court and consummated in Mexico,
our ability to successfully restructure our debt is dependant upon certain relief being granted in
foreign jurisdictions, including the U.S.
   11




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If the Concurso Plan or any other revised plan or prepackaged plan of concurso mercantil is not
consummated, we may be subject to an involuntary Mexican or U.S. reorganization related proceeding.
 concurso mercantil Concurso Concurso
 The Concurso Plan may not be commenced, may not become effective or may be dismissed regardless of
the number and amount of holders of Restructured Debt that vote to accept the Concurso Plan.
 Concurso Concurso Concurso
 We may not be able to successfully complete our restructuring plan and continue our operations.
  
    
    The overall strength and stability of general economic conditions in the glass
container, automotive and construction industries;
    
    Customer confidence in our viability going forward, and our ability to continue to
maintain and expand our customer base;
    
    The availability of adequate financing on acceptable terms from our suppliers and their
continuing business relationships with us;
    
    Our ability to maintain receivables securitization and sale of receivables programs
which provide working capital for operations;
    
    Our ability to sell non-productive assets at favorable prices; and
  12




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
    
    Development of new products and new uses for our products.
  RISK FACTORS RELATING TO OUR BUSINESS
 Our business and our ability to continue operations are highly dependent on sales volume, which has
been significantly affected by the continued global economic crisis
      13




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We have insufficient liquidity to repay our existing obligations and meet our capital requirements
      Even if our debt restructuring is successful, our indebtedness and other obligations could continue
to be significant and could contain significant restrictions
   
    
    We may have less cash available to expand and improve our business, since we are
required to dedicate a significant portion of our cash flow from operations to the payment
of interest on our debt;
    
    Our ability to obtain additional debt financing may be limited and the terms on which
such financing is obtained may be negatively affected; and
    
    Our ability to compete effectively against better-capitalized competitors and to
withstand downturns in our business may be affected since a significant portion of our cash
flow from operations is required to be dedicated to making interest payments. As a result,
we may lose market share and experience lower sales, which, in turn, could result in a
material adverse effect on our financial condition, results of operations and liquidity.
  14




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Price pressures that result from over-capacity, lower-margin business opportunities, flat glass
customers initiatives, and consolidation of our customer base may adversely affect our businesses
    We have customers that are significant to us and the loss of all or a portion of their business
will have an adverse effect on us.
   We have to pay interest and principal on our U.S. dollar-denominated debt with revenues generated
in Mexican pesos or other currencies, as we do not generate sufficient revenue in U.S. dollars from
our operations.
   We have experienced rising operating costs in each of our businesses
   15




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We operate in a highly competitive industry in which we compete with global competitors and
vertically integrated customers, have relatively high fixed costs and are faced with sharply
decreasing demands
    16




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We face intense competition from other glass container producers, as well as from makers of
alternative forms of packaging
  Difficult market conditions in the automotive industry may affect our operating margins and results
of operations
  .
 The costs of complying with environmental protection and health and safety laws, and any
liabilities arising thereunder, may increase and adversely affect our business, results of
operations, cash flows or financial condition
      17




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Substitution trends in the glass container industry may continue to adversely affect our business
 .
 Protracted constraints on our capital expenditures may impact our business operations
   18




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RISK FACTORS RELATING TO ECONOMIES IN WHICH WE PARTICIPATE
 Economic developments in Mexico, the United States and Europe affect our business.
      Foreign currency exchange rate fluctuations may have an adverse effect on our operating income and
our total comprehensive financial result
   19




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We may be adversely affected by increases in natural gas prices, interest rates or foreign exchange
rate changes that we are unable to mitigate through derivative transactions due to our financial
condition
      20




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Developments in other emerging market countries may adversely affect our business or the market
price of our securities
    If foreign currency exchange controls and other restrictions are imposed, we may not be able to
service our debt in U.S. dollars, which exposes investors to foreign currency exchange risk
  Political events in Mexico could affect Mexican economic policy and adversely affect us
   Security issues and social instability in Mexico could adversely affect us
   21




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We face risks related to health epidemics and other outbreaks
  Our financial statements may not give you the same information as financial statements prepared
under United States accounting principles or Exchange Act reporting requirements
  Our operations may be adversely affected by earthquakes, hurricanes or some other natural disaster
that could have an effect on our service to clients
   22




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EXCHANGE RATES
  Noon Buying RateYear ended December 31,
    
    High
    
    
    Low
    
    
    Average
    
    
    Period-End2005
    
    
    11.41
    
    
    
    10.41
    
    
    
    10.89
    
    
    
    10.632006
    
    
    11.46
    
    
    
    10.43
    
    
    
    10.91
    
    
    
    10.802007
    
    
    11.27
    
    
    
    10.67
    
    
    
    10.93
    
    
    
    10.862008
    
    
    13.94
    
    
    
    9.92
    
    
    
    11.19
    
    
    
    13.832009
    
    
    15.37
    
    
    
    12.60
    
    
    
    13.57
    
    
    
    13.052010
    
    
    13.92
    
    
    
    12.16
    
    
    
    12.69
    
    
    
    12.36
 
 Source: The International Monetary Fund  Noon Buying Rate(1)High
    
    
    LowJanuary 2010
    
    
    13.01
    
    
    
    12.65February
    
    
    13.18
    
    
    
    12.78March
    
    
    12.75
    
    
    
    12.41April
    
    
    12.37
    
    
    
    12.16May
    
    
    13.18
    
    
    
    12.26June
    
    
    12.93
    
    
    
    12.46July
    
    
    13.06
    
    
    
    12.65August
    
    
    13.14
    
    
    
    12.54September
    
    
    13.06
    
    
    
    12.48October
    
    
    12.59
    
    
    
    12.32November
    
    
    12.49
    
    
    
    13.92December
    
    
    12.33
    
    
    
    12.42January 2011
    
    
    12.26
    
    
    
    12.02February
(through February 24)
    
    
    12.19
    
    
    
    11.99
 
 Source: The International Monetary Fund  23




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SELECTED CONSOLIDATED FINANCIAL INFORMATION
   Year ended December 31,2005
    
    
    2006
    
    
    2007
    
    
    2008
    
    
    2009
    
    
    2009(Ps. millions)(1)
    
    
    ($ millions)(2)Income Statement Data:MFRS:Net sales
    
    Ps.
    26,567
    
    
    Ps.
    27,876
    
    
    Ps.
    28,591
    
    
    Ps.
    29,013
    
    
    Ps.
    23,991
    
    
    $
    1,837Cost of sales
    
    
    19,198
    
    
    
    20,230
    
    
    
    20,187
    
    
    
    21,279
    
    
    
    17,180
    
    
    
    1,316Gross profit
    
    
    7,369
    
    
    
    7,646
    
    
    
    8,404
    
    
    
    7,734
    
    
    
    6,811
    
    
    
    521Selling, general and administrative expenses
    
    
    5,530
    
    
    
    5,529
    
    
    
    5,700
    
    
    
    6,024
    
    
    
    5,482
    
    
    
    420Operating income
    
    
    1,839
    
    
    
    2,117
    
    
    
    2,704
    
    
    
    1,710
    
    
    
    1,329
    
    
    
    101Financing result:Interest expense, net
    
    
    2,355
    
    
    
    2,155
    
    
    
    1,836
    
    
    
    2,089
    
    
    
    2,772
    
    
    
    212Derivative financial instruments (10)
    
    
    17
    
    
    
    337
    
    
    
    201
    
    
    
    3,766
    
    
    
    570
    
    
    
    44Exchange loss (gain), net
    
    
    (417
    )
    
    
    224
    
    
    
    94
    
    
    
    3,222
    
    
    
    (976
    )
    
    
    (75
    )Gain from monetary position(3)
    
    
    (455
    )
    
    
    (440
    )
    
    
    (471
    )
    
    
    
    
    
    
    
    
    
    
    Total comprehensive financing result
    
    
    1,500
    
    
    
    2,276
    
    
    
    1,660
    
    
    
    9,077
    
    
    
    2,366
    
    
    
    181Other expenses (income), net(4)
    
    
    494
    
    
    
    (229
    )
    
    
    869
    
    
    
    495
    
    
    
    291
    
    
    
    22(Loss) income before income and asset tax
    
    
    (155
    )
    
    
    70
    
    
    
    175
    
    
    
    (7,858
    )
    
    
    (1,352
    )
    
    
    (104
    )Income and asset tax expense (benefit)
    
    
    (519
    )
    
    
    228
    
    
    
    44
    
    
    
    (2,175
    )
    
    
    (598
    )
    
    
    (47
    )Net income (loss) from continuing operations before changes in
accounting principles
    
    
    364
    
    
    
    (158
    )
    
    
    131
    
    
    
    (5,682
    )
    
    
    (754
    )
    
    
    (57
    )Net income (loss) from discontinued operations (5)
    
    
    3
    
    
    
    (31
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Gain on sale of discontinued operations (5)
    
    
    
    
    
    
    480
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Cumulative effect of changes in accounting principle (10)
    
    
    (124
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net income (loss)
    
    
    243
    
    
    
    291
    
    
    
    131
    
    
    
    (5,682
    )
    
    
    (754
    )
    
    
    (57
    )Net income (loss) of majority interest
    
    
    63
    
    
    
    401
    
    
    
    (13
    )
    
    
    (5,706
    )
    
    
    (787
    )
    
    
    (60
    )Net income (loss) from continuing operations per share
    
    
    1.33
    
    
    
    (0.54
    )
    
    
    0.38
    
    
    
    (16.57
    )
    
    
    (2.17
    )
    
    
    (0.17
    )Net income (loss) from discontinued operations per share
    
    
    0.01
    
    
    
    1.55
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Diluted and basic net income (loss) of majority interest per share
    
    
    0.23
    
    
    
    1.39
    
    
    
    (0.04
    )
    
    
    (16.64
    )
    
    
    (2.27
    )
    
    
    (0.18
    )U.S. GAAP(11):Net sales
    
    Ps.
    24,292
    
    
    Ps.
    25,655
    
    
    Ps.
    26,159
    
    
    Ps.
    26,854
    
    
    Ps.
    23,991
    
    
    $
    1,837Operating income
    
    
    831
    
    
    
    1,436
    
    
    
    2,524
    
    
    
    1,454
    
    
    
    778
    
    
    
    60
  24




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Year ended December 31,2005
    
    
    2006
    
    
    2007
    
    
    2008
    
    
    2009
    
    
    2009(Ps. millions)(1)
    
    
    ($ millions)(2)Net income (loss) from continuing operations(5)(11)
    
    
    (183
    )
    
    
    (554
    )
    
    
    485
    
    
    
    (7,836
    )
    
    
    (1,796
    )
    
    
    (138
    )Net income (loss)
    
    
    (287
    )
    
    
    (74
    )
    
    
    576
    
    
    
    (6,368
    )
    
    
    (2,587
    )
    
    
    (198
    )Net income (loss) from continuing operations per
share(5)(11)
    
    
    (0.66
    )
    
    
    (1.92
    )
    
    
    1.37
    
    
    
    (18.57
    )
    
    
    (7.46
    )
    
    
    (0.57
    )Net income (loss) from discontinued operations per
share(5)(11)
    
    
    (0.38
    )
    
    
    1.66
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0Diluted and basic net income (loss) per share
    
    
    (1.04
    )
    
    
    (0.26
    )
    
    
    1.37
    
    
    
    (18.57
    )
    
    
    (7.46
    )
    
    
    (0.57
    )Balance Sheet Data:MFRS:Cash and cash equivalents
    
    
    1,441
    
    
    
    1,222
    
    
    
    1,638
    
    
    
    1,428
    
    
    
    2,616
    
    
    
    200Current assets (15)
    
    
    11,588
    
    
    
    10,924
    
    
    
    12,772
    
    
    
    11,981
    
    
    
    10,096
    
    
    
    773Total assets from discontinued operations (5)
    
    
    2,021
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total assets (15)
    
    
    34,663
    
    
    
    30,444
    
    
    
    33,824
    
    
    
    35,774
    
    
    
    32,652
    
    
    
    2,500Current liabilities (13)
    
    
    8,968
    
    
    
    4,840
    
    
    
    7,146
    
    
    
    29,063
    
    
    
    27,580
    
    
    
    2,112Total debt(12)
    
    
    17,679
    
    
    
    14,570
    
    
    
    16,549
    
    
    
    22,062
    
    
    
    20,101
    
    
    
    1,540Total liabilities from discontinued operations(5)
    
    
    1,398
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total liabilities
    
    
    25,429
    
    
    
    21,078
    
    
    
    24,438
    
    
    
    32,666
    
    
    
    30,668
    
    
    
    2,348Stockholders equity
    
    
    9,234
    
    
    
    9,366
    
    
    
    9,386
    
    
    
    3,108
    
    
    
    1,984
    
    
    
    152Minority interest in consolidated subsidiaries
    
    
    3,198
    
    
    
    1,892
    
    
    
    1,960
    
    
    
    1,404
    
    
    
    1,464
    
    
    
    112Majority stockholders equity
    
    
    6,036
    
    
    
    7,474
    
    
    
    7,426
    
    
    
    1,704
    
    
    
    520
    
    
    
    40U.S. GAAP(5)(11):Total assets
    
    Ps.
    30,579
    
    
    Ps.
    26,097
    
    
    Ps.
    29,985
    
    
    Ps.
    32,789
    
    
    Ps.
    30,145
    
    
    $
    2,308Total liabilities
    
    
    23,178
    
    
    
    19,272
    
    
    
    22,923
    
    
    
    32,573
    
    
    
    33,064
    
    
    
    2,532Net assets
    
    
    7,401
    
    
    
    6,825
    
    
    
    7,062
    
    
    
    216
    
    
    
    (2,919
    )
    
    
    (224
    )Capital stock
    
    
    7,566
    
    
    
    7,632
    
    
    
    7,632
    
    
    
    7,632
    
    
    
    7,632
    
    
    
    584Stockholders equity
    
    
    7,401
    
    
    
    6,825
    
    
    
    7,062
    
    
    
    216
    
    
    
    (2,919
    )
    
    
    (224
    )Other Data:MFRS:Capital expenditures(14)
    
    
    1,107
    
    
    
    1,252
    
    
    
    2,695
    
    
    
    1,798
    
    
    
    1,009
    
    
    
    77Depreciation and amortization
    
    
    1,854
    
    
    
    1,795
    
    
    
    1,414
    
    
    
    1,469
    
    
    
    1,473
    
    
    
    113Total shares issued at end of period(6)
    
    
    324
    
    
    
    386.9
    
    
    
    386.9
    
    
    
    386.9
    
    
    
    386.9Total shares held in Stock Option Trust at end of
period(6)(12) (14)
    
    
    22.3
    
    
    
    17.6
    
    
    
    17.5
    
    
    
    11.7
    
    
    
    39.8Total shares held as treasury stock at end of period(6)
    
    
    28.2
    
    
    
    28.3
    
    
    
    28.3
    
    
    
    28.5
    
    
    
    0.4Total shares issued and outstanding at end of period(6)
    
    
    273.5
    
    
    
    341.0
    
    
    
    341.0
    
    
    
    346.7
    
    
    
    346.7Average total shares outstanding during period(6)
    
    
    273.1
    
    
    
    289.6
    
    
    
    341.0
    
    
    
    342.8
    
    
    
    346.7Inflation and Foreign Currency Exchange Rate Data:Percentage of change in INPC(7)
    
    
    3.3
    %
    
    
    4.1
    %
    
    
    3.8
    %
    
    
    6.5
    %
    
    
    3.6
    %Peso/dollar exchange rate at the end of period(8)
    
    
    10.6344
    
    
    
    10.8116
    
    
    
    10.8662
    
    
    
    13.8325
    
    
    
    13.0587Average exchange rate(9)
    
    
    10.8786
    
    
    
    10.9034
    
    
    
    10.9371
    
    
    
    11.1939
    
    
    
    13.5723
  25




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##### Table of Contents



(1)
    
    Except per share amounts, number of shares and inflation and foreign currency
exchange rate data.(2)
    
    Peso amounts have been translated into U.S. dollars, solely for the convenience of
the reader, at the rate of 13.0587 pesos per one U.S. dollar, the Free Exchange Rate on
December 31, 2009.(3)
    
    Through December 31, 2007, the gain from monetary position reflected the result of
holding monetary assets and liabilities during periods of inflation. Values stated in current
monetary units decreased in purchasing power over time. This means that losses were incurred
by holding monetary assets over time, whereas gains were realized by maintaining monetary
liabilities. Beginning January 1, 2008, we stopped recognizing gains in monetary position as
well as inflation effects. See Presentation of Certain Information for more information on
changes in NIF B-10 regarding effects of inflation.(4)
    
    Other expenses (income), net, includes:
 Year ended December 31,(millions)2005
    
    
    2006
    
    
    2007
    
    
    2008
    
    
    2009Restructuring charges (i)
    
    Ps.
    332
    
    
    Ps.
    61
    
    
    Ps.
    7
    
    
    Ps.
    185
    
    
    
    265Impairment of long-lived assets
    
    
    385
    
    
    
    393
    
    
    
    122
    
    
    
    196
    
    
    
    207Loss (gain) from sale of long-lived assets
    
    
    6
    
    
    
    (795
    )
    
    
    47
    
    
    
    (3
    )
    
    
    (209
    )Loss (gain) from sale of subsidiaries
    
    
    137
    
    
    
    (68
    )
    
    
    11Assignment of Vitro Club Trust (ii)
    
    
    (458
    )Early extinguishment of employee
retirement obligations
    
    
    18
    
    
    
    8
    
    
    
    97
    
    
    
    69Fees and costs for extinguishment of debt
    
    
    
    
    
    
    
    
    
    
    488
    
    
    
    
    
    
    
    7Statutory employee profit sharing
    
    
    51
    
    
    
    55
    
    
    
    54
    
    
    
    10
    
    
    
    13Other
    
    
    23
    
    
    
    117
    
    
    
    43
    
    
    
    38
    
    
    
    8Ps.
    494
    
    
    Ps.
    (229
    )
    
    Ps.
    869
    
    
    Ps.
    495
    
    
    Ps.
    291
 (i)
    
    The restructuring charges relate to the downsizing and streamlining of our
corporate functions and organization at some of our business units and are part of an
ongoing benefit arrangement.(ii)
    
    The Vitro Club holds land and facilities for our employees recreational
activities, which are held in a trust (the Trust). The Trust can only be assigned if
all of the participants name one entity as the sole beneficiary. In 2005, all the
participants named the Company as the sole beneficiary, and therefore the Company has
the right to take control of the Trust. The Company recorded the fair value of the
assets and recognized other income of Ps. 458 million. At the end of 2008, we decided
to temporarily suspend the services provided at the Vitro Club facilities. In April
2010, as part of the cost reduction plan, we sold the land and facilities of Vitro
Club.(5)
    
    On June 16, 2006, we completed the sale of our 51% equity ownership interest in
Vitrocrisa to Libbey, the owner of the remaining 49% equity interest. All financial and
operating information relating to Vitrocrisa in this annual report, which was previously
presented as one of our reportable segments is now presented as a discontinued operation. In
addition, the discussion of our indebtedness in this annual report does not include the
indebtedness of Vitrocrisa, which is presented under MFRS in our consolidated balance sheets
as a part of Total liabilities of discontinued operations.(6)
    
    Millions of shares.(7)
    
    Calculated using year-end INPC of the most recent year divided by the year-end
INPC of the previous year.(8)
    
    Based on the Free Exchange Rate at the end of the period.(9)
    
    Calculated using the average of Free Exchange Rates on the last day of each month
during the period.
  26




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##### Table of Contents



(10)
    
    Effective January 1, 2005, the Company adopted the provisions of Bulletin C-10,
Derivative Financial Instruments and Hedging Activities, which requires that all derivative
instruments be recognized at fair value, sets the rules to recognize hedging activities and
requires separation, if practical, of embedded derivative instruments. Through December 31,
2004, according to prior accounting standards (Bulletin C-2, Financial Instruments), the
Company did not recognize the effect of hedging derivatives under financial expenses until the
flow exchanges were executed.(11)
    
    From 2005 to 2006, certain of our subsidiaries were classified as discontinued
operations in our U.S. GAAP consolidated financial information as they meet the definition of
held for sale for U.S. GAAP purposes. These subsidiaries did not meet the definition of
discontinued operations for MFRS purposes as they do not constitute the sale of a significant
portion of our business.(12)
    
    The total shares held in the Stock Option Trust as of April 29, 2009, were 39.8
million. See Item 16E. Purchase of Equity Securities by the Issuers and Affiliated
Purchasers.(13)
    
    As of December 31, 2008 and 2009, we were in default under the indentures governing
the Old Notes for $300 million, $216 million and $700 million and certain other debt;
therefore, Ps. 16,689 million and Ps. 15,771 million were reclassified as short-term debt.(14)
    
    For 2008 and 2009, these amounts represent the capital expenditures paid over the
period, which differ from the capital expenditures realized for financial matters.(15)
    
    As mentioned above, NIF B-8 establishes that special purpose entities, over which
control is exercised, should be consolidated. We adopted this bulletin beginning January 1,
2009. As a result of this standard, the amounts as of December 2008 and 2009 include the
Companys account receivable securitization transactions. For the years ended as of December
31, 2005, 2006 and 2007 the amount of the Companys securitizations were Ps. 1,720, Ps. 1,744
and Ps. 1,631, respectively; such transactions are included in this table.
 Dividends per Share
  Fiscal Year WithRespect to WhichDividend Was
    
    Month Dividend
    
    
    Total Dividend
    
    
    Dividend per
    
    
    Dividend per
    
    
    Month DividendDeclared
    
    Was Declared
    
    
    Amount(1)
    
    
    Share
    
    
    Share(2)
    
    
    Was Paid(Ps. millions)
    
    
    (Pesos)
    
    
    (Dollars)2005
    
    April 2006
    
    
    89
    
    
    
    0.30
    
    
    
    0.0270
    
    
    May 20062006
    
    March 2007
    
    
    133
    
    
    
    0.37
    
    
    
    0.0334
    
    
    April 20072007
    
    April 2008
    
    
    143
    
    
    
    0.40
    
    
    
    0.0372
    
    
    May 20082008(3)2009(3)
 
 (1)
    
    Under Mexican corporate law, our shares held by the Stock Option Trust are
considered issued and outstanding and therefore are entitled to receive dividends.(2)
    
    For purposes of calculating the dividends paid in U.S. dollars per share, we divided
the dividends paid in Mexican peso per share by the Free Exchange Rate as of the date on which
such dividend was declared.(3)
    
    For 2008 and 2009 no dividends were declared.
  27




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##### Table of Contents



Item 4.
    
    Information on the Company
 
 ORGANIZATIONAL STRUCTURE
  FLAT GLASS
    
    GLASS CONTAINERS
    
    CORPORATEViméxico, S.A. de C.V. (91.80%)
    
    Vitro Envases Norteamérica, S.A. de C.V. (100%)
    
    FIC Regiomontano, S.A.P.I. de C.V.Vidrio y Cristal del Noroeste, S.A. de C.V. (91.80%)(1)
    
    Fabricación de Máquinas, S.A. de C.V. (100%)
    
    Aerovitro, S.A. de C.V. (100%)Vitro Flotado Cubiertas, S.A. de C.V. (91.80%)
    
    Compañía Vidriera, S.A. de C.V. (100%)
    
    Clínica Vitro, A.C. (100%)Vidrio Plano de México, S.A. de C.V. (91.80%)
    
    Vidriera Monterrey, S.A. de C.V. (100%)
    
    American Asset Holdings, Corp. (100%)(9)Vitro Flex, S.A. de C.V. (91.80%)
    
    Vidriera Guadalajara, S.A. de C.V. (100%)Cristales Automotrices, S.A. de C.V. (46.81%)
    
    Vidriera Los Reyes, S.A. de C.V. (100%)Vitro Colombia, S.A. (91.80%)(4)
    
    Vidriera Querétaro, S.A. de C.V. (100%)Vitro America, LLC. (100%)(5)
    
    Vidriera Toluca, S.A. de C.V. (100%)Vitro Cristalglass, S.L. (99.29%)(2) (6)
    
    Vitro Packaging, LLC. (100%) (5)Vitro Chaves Industria de Vidro, S.A. (59.57%)(7)
    
    Vitro Packaging de México, S. A. de C.V. (100%)Vitro Automotriz, S.A. de C.V. (99.92%)
    
    Industria del Álcali, S.A. de C.V. (100%)Vitro Vidrio y Cristal, S.A. de C.V (99.99%)
    
    Comercializadora Alcalí, S.A. de C.V. (100%)Productos de Valor Agregado en Cristal, S.A. de C.V. (55%) (3)
    
    Vidrio Lux, S.A. (100%)(8)
 (1)
    
    In July 2007, Viméxico acquired the remaining 50% of the outstanding shares of Vitro AFG,
S.A. de C.V. (Vitro AFG) from AFG Industries Inc. (AFG Industries), in order to assume control
and increase its ownership to 100%, subsequently changing its legal name to Vidrio y Cristal
del Noroeste, S.A. de C.V. See Note 20 (b) to our Consolidated Financial Statements included
in this annual report.(2)
    
    In July 2008, Viméxico was notified by its partner of its right to exercise the put option
related to the sale of its 40% interest in Vitro Cristalglass. The option was officially
exercised in August 2008 and beginning in September 2008, Vitro Cristalglass is 100%
consolidated. See Note 20 (c) to our Consolidated Financial Statements included in this annual
report.(3)
    
    In August 2007, Vitro Vidrio y Cristal, S.A. de C.V. (Vitro VyC) acquired 55% of the
outstanding shares of Productos de Valor Agregado en Cristal, S.A. de C.V. (PVA). See Note 20
(a) to our Consolidated Financial Statements included in this annual report.(4)
    
    Incorporated in Colombia.(5)
    
    Formed under Delaware law in the United States.(6)
    
    Incorporated in Spain.(7)
    
    Incorporated in Portugal(8)
    
    Incorporated in Bolivia(9)
    
    Incorporated in Texas, United States.
  28




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##### Table of Contents



BUSINESS
 Business Overview
 sociedad anónima bursátil de
capital variable
      Acquisitions
    29




---



##### Table of Contents



Our Operating Business Units
  Business Segment Data
  Glass
    
    
    Flat
    
    
    Corporate &Containers
    
    
    Glass
    
    
    Eliminations
    
    
    Consolidated
    
    
    $ million(Ps. million)
    
    
    ($ million)2009Net sales
    
    Ps.
    12,452
    
    
    Ps.
    11,453
    
    
    Ps.
    229
    
    
    Ps.
    24,134
    
    
    $
    1,848Intersegment sales
    
    
    67
    
    
    
    76
    
    
    
    
    
    
    
    143
    
    
    
    11Consolidated net sales
    
    
    12,385
    
    
    
    11,377
    
    
    
    229
    
    
    
    23,991
    
    
    
    1,837Operating income
    
    
    1,956
    
    
    
    (591
    )
    
    
    (36
    )
    
    
    1,329
    
    
    
    101Total assets
    
    
    21,878
    
    
    
    15,029
    
    
    
    (4,255
    )
    
    
    32,652
    
    
    
    2,500Capital expenditures(1)
    
    
    735
    
    
    
    264
    
    
    
    10
    
    
    
    1,009
    
    
    
    772008Net sales
    
    Ps.
    15,524
    
    
    Ps.
    13,230
    
    
    Ps.
    342
    
    
    Ps.
    29,096
    
    
    $
    2,103Intersegment sales
    
    
    40
    
    
    
    43
    
    
    
    
    
    
    
    83
    
    
    
    6Consolidated net sales
    
    
    15,484
    
    
    
    13,187
    
    
    
    342
    
    
    
    29,013
    
    
    
    2,097Operating income
    
    
    1,661
    
    
    
    186
    
    
    
    (137
    )
    
    
    1,710
    
    
    
    124Total assets
    
    
    19,723
    
    
    
    15,358
    
    
    
    693
    
    
    
    35,774
    
    
    
    2,586Capital expenditures(1)
    
    
    1,538
    
    
    
    255
    
    
    
    5
    
    
    
    1,798
    
    
    
    1302007Net sales
    
    Ps.
    14,676
    
    
    Ps.
    13,605
    
    
    Ps.
    361
    
    
    Ps.
    28,642
    
    
    $
    2,636Intersegment sales
    
    
    37
    
    
    
    14
    
    
    
    
    
    
    
    51
    
    
    
    5Consolidated net sales
    
    
    14,639
    
    
    
    13,591
    
    
    
    361
    
    
    
    28,591
    
    
    
    2,631Operating income
    
    
    2,054
    
    
    
    782
    
    
    
    (132
    )
    
    
    2,704
    
    
    
    249Total assets
    
    
    17,803
    
    
    
    13,708
    
    
    
    2,312
    
    
    
    33,823
    
    
    
    3,113Capital expenditures(1)
    
    
    2,328
    
    
    
    324
    
    
    
    43
    
    
    
    2,695
    
    
    
    248
 (1)
    
    These amounts represent the capital expenditures paid over the period, which differ
from the capital expenditures realized for financial matters of Ps. 1,909 million ($138 million)
for 2008 and Ps. 638 million ($49 million) for 2009.
  30




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##### Table of Contents



Glass
    
    
    Flat
    
    
    Corporate &Containers
    
    
    Glass
    
    
    Eliminations
    
    
    Consolidated2009Consolidated net
sales
    
    
    52
    %
    
    
    47
    %
    
    
    1
    %
    
    
    100
    %Operating income
    
    
    147
    %
    
    
    (44
    %)
    
    
    (3
    %)
    
    
    100
    %Total assets
    
    
    67
    %
    
    
    46
    %
    
    
    (13
    %)
    
    
    100
    %Capital expenditures
    
    
    73
    %
    
    
    26
    %
    
    
    1
    %
    
    
    100
    %2008Consolidated net
sales
    
    
    53
    %
    
    
    46
    %
    
    
    1
    %
    
    
    100
    %Operating income
    
    
    97
    %
    
    
    11
    %
    
    
    (8
    %)
    
    
    100
    %Total assets
    
    
    56
    %
    
    
    42
    %
    
    
    2
    %
    
    
    100
    %Capital expenditures
    
    
    86
    %
    
    
    14
    %
    
    
    0
    %
    
    
    100
    %2007Consolidated net
sales
    
    
    51
    %
    
    
    48
    %
    
    
    1
    %
    
    
    100
    %Operating income
    
    
    76
    %
    
    
    29
    %
    
    
    (5
    %)
    
    
    100
    %Total assets
    
    
    53
    %
    
    
    40
    %
    
    
    7
    %
    
    
    100
    %Capital expenditures
    
    
    86
    %
    
    
    12
    %
    
    
    2
    %
    
    
    100
    %
  (i)
    
    We hold a significant portion of the non-captive market in Mexico. In 2009, we served
approximately 76% of the non-captive market in Mexico. We define a non-captive market to
exclude buyers (such as beverage and beer bottlers) that are supplied glass containers by
their affiliates. Our production flexibility to service niche markets, as well as our high
quality products and manufacturing capacity, offers a strong competitive advantage that makes
us the leading supplier of the non-captive market in Mexico.
 (ii)
    
    We believe that significant entry barriers exist for foreign competitors to enter into our
domestic market, which is very capital intensive. Based on a 76% non-captive glass container
market share, we believe we are the leading glass containers producer in Mexico. The glass
container industry is very capital intensive, which added to high freight costs for foreign
competitors, results in significant cost barrier to entry.
 (iii)
    
    Our facilities are located in proximity to our clients facilities. We operate nine
manufacturing facilities strategically located throughout Mexico. The proximity to our
clients facilities allows us to reduce freight costs and conduct a more efficient supply
chain with our customers.
 (iv)
    
    We enjoy long-established relationships with many of our customers, some of which have lasted
more than 50 years. We have a long-established relationship with The Coca-Cola Company,
Herdez McCormick, Nestlé and Grupo Domeq, which have been clients for more than 50 years.
 (v)
    
    We have the ability to manufacture short-run orders. We have the ability to supply short-runs
of customized, decorated containers. Our high-tech engineering allows us to develop molds in a
shorter period of time than industry standards. These factors give us a fast time to market
and the ability to develop new customized products in a timely manner for our customers, who,
as a result, are willing to pay above market average prices.
 (vi)
    
    Our sales in the U.S. target niche markets. We believe that we are the largest importer of
glass containers into the U.S. as we serve target niche markets, such as the wine and liquor
market, the nostalgia soft drink market and the cosmetics market.
  31




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##### Table of Contents



Year ended December 31,2007
    
    
    2008
    
    
    2009(Ps. million)Net sales (1) to customers in:Mexico
    
    Ps.
    12,008
    
    
    Ps.
    12,831
    
    
    Ps.
    11,152All foreign countries, mainly the
United States and Europe
    
    
    16,583
    
    
    
    16,182
    
    
    
    12,839Consolidated
    
    Ps.
    28,591
    
    
    Ps.
    29,013
    
    
    Ps.
    23,991
 (1)
    
    Net sales are attributed to countries based on the location of the
customer.
  Glass Containers
   
    
    Soda ash, sodium bicarbonate, calcium chloride and salt, which are the main raw
materials used in the manufacture of glass products, and also used in the
pharmaceutical, food and detergent industries; and
 
    
    Capital goods such as glass forming machines and molds.
  Flat Glass
   32




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##### Table of Contents



33




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##### Table of Contents



Our Products
  Glass Containers:
 Customers andBusiness Line
    
    Products
    
    End-Users
    
    Sales RegionsGlass
Containers
    
    Glass containers
    
    Soft drink, beer,
food, juices, wine
and liquor,
pharmaceutical and
cosmetics
industries
    
    Mexico, the United
States, Canada, the
Caribbean, Central
and South America,
Europe and Asia.Raw Materials
    
    Soda ash, sodium
bicarbonate,
calcium chloride
and salt
    
    Glass manufacturers
and detergent
producers,
pharmaceutical and
food producers
    
    Mexico, the United
States, Canada,
Europe and Central
and South AmericaMachinery and
Molds
    
    Glass forming
machines, castings
for glass molds,
machinery parts and
electronic controls
    
    Flat Glass business
unit, Glass
Containers business
unit, glass
manufacturers and
other third-party
manufacturers
    
    Mexico, the United
States and Central
and South America
 Flat Glass:
 Customers andBusiness Line
    
    Products
    
    End-Users
    
    Sales RegionsFloat Glass
    
    Float glass,
architectural
tempered safety
glass, insulated
glass units,
laminated, table
tops
    
    Construction
industry,
distributors,
retailers and
installers,
furniture and home
appliances
manufacturers and
Automotive Safety
Glass
manufacturers.
    
    Mexico, the United
States, Canada,
Europe and Central
and South AmericaAutomotive Glass
    
    Windshields, side
laminated glass,
rear and side
tempered glass
    
    Automotive OEMs,
AGR market,
distributors and
installers
    
    Mexico, the United
States, Canada and
Central and South
America
  Our Operations
 Glass Containers Business Unit
   34




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##### Table of Contents



Short-Term:
 Given the current economic conditions coupled with the restructuring process the Company is
currently undergoing, this business unit plans to:
 
    
    Preserve cash to guarantee operations through strict expense controls and
non-payment of scheduled interest payments to the extent necessary;
 
    
    Reduce capital expenditures to a minimum level, mostly oriented towards required
maintenance activities;
 
    
    Continue with the initiatives aimed at reducing costs and expenses; and
 
    
    Constantly communicate with clients and suppliers to maintain continuous
operations.
 Long-Term:
 Once our economic conditions have improved and the debt restructuring process is finalized,
this business unit will continue to:
 
    
    Focus on current operations to maximize organic growth and to take advantage of
future opportunities;
 
    
    Consolidate its competitive position by defending share and margins in markets in
which it operates;
 
    
    Use its growing position in niche markets and focus on value added products to
enhance profitability;
 
    
    Continue the promotion of innovative new product development;
 
    
    Enhance operating efficiencies; and
 
    
    Maximize cash flow through growth in sales and margins while optimizing the use of
capital expenditures and assets.
   35




---



##### Table of Contents



Mexican Operations
    36




---



##### Table of Contents



Exports and U.S. Operations
  Central and South American Operations
   Raw Materials, Machinery and Molds
    37




---



##### Table of Contents



Competition
    Flat Glass Business Unit
     38




---



##### Table of Contents



Short-Term:
 Given the current economic conditions coupled with the restructuring process the Company is
currently undergoing, this business unit plans to:
 
    
    Preserve cash to guarantee operations through strict expense controls and
non-payment of scheduled interest payments to the extent necessary;
 
    
    Reduce capital expenditures to a minimum level, mostly oriented towards required
maintenance activities;
 
    
    Continue with the initiatives aimed at reducing costs and expenses; and
 
    
    Constantly communicate with clients and suppliers to maintain continuous
operations.
 Long-Term:
 Once our economic conditions have improved and the debt restructuring process is finalized,
this business unit will continue to:
 
    
    Enhance operating efficiencies;
 
    
    Improve cash flow and optimize asset use;
 
    
    Protect and increase our market share in the Mexican market for construction
glass, reducing our reliance on the export market;
 
    
    Maintain our leading position and growth trend in the OEM glass business through
increasing participation with the Asian car manufacturers;
 
    
    Consolidate and grow North American leadership of laminated window products for
the OEMs and other value-added products;
 
    
    Diversify our client portfolio;
 
    
    Increase fabrication of value-added products in the United States and Mexico;
 
    
    Increase its European presence through Vitro Cristalglass; and
 
    
    Leverage the Vitro brand name.
  Mexican Operations
    39




---



##### Table of Contents



United States Operations
    European Operations
    40




---



##### Table of Contents



Central and South American Operations
  Competition
     Our Raw Materials
 Soda Ash, Sand and Feldspar
    41




---



##### Table of Contents



Energy
  Fuel
      42




---



##### Table of Contents



Our Capital Expenditures
  Year ended December 31,Business Unit
    
    2007
    
    
    2008
    
    
    2009(Ps. millions)Glass Containers
    
    Ps.
    2,328
    
    
    Ps.
    1,538
    
    
    Ps.
    735Flat Glass
    
    
    324
    
    
    
    255
    
    
    
    264Corporate and other
    
    
    43
    
    
    
    5
    
    
    
    10Total
    
    Ps.
    2,695
    
    
    Ps.
    1,798
    
    
    Ps.
    1,009
   
    
    Our Glass Containers Business Unit expects to close the year with capital expenditures
of Ps. 594 million ($47 million), which is being used to provide maintenance to certain
of our furnaces and IS machines; for a palletizing center, and for infrastructure in one
of our facilities. The remainder is being applied to new product molds.
 
    
    Our Flat Glass Business unit expects to close the year with capital expenditures of
Ps. 291 million ($23 million), which is being used mainly for maintenance of our
facilities.
   Our Property, Plant and Equipment
    43




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##### Table of Contents



Average Capacity
    
    
    Average Capacity
    
    
    Number of FacilitiesBusiness Unit
    
    
    
    Utilization 2008
    
    
    Utilization 2009
    
    
    by City or CountryGlass Containers
    
    
    
    
    86
    %
    
    
    71
    %
    
    Monterrey(3)GuadalajaraMexico City(2)QuerétaroToluca (2)Costa RicaGuatemalaPanamaBoliviaFlat Glass
    
    Float Furnaces(1)
    
    
    106
    %(1)
    
    
    92
    %
    
    Monterrey(4)Mexico City(2)MexicaliAutomotive Facilities
    
    
    74
    %
    
    
    49
    %
    
    United States(6)ColombiaSpain(4)Portugal (2)France
 
 (1)
    
    Capacity utilization may sometimes be greater than 100% because pulling capacity is
calculated on a certain number of changes in glass color and thickness, determined by
historical averages. Additionally, we also have a furnace in Mexico City that has been shut
down since 2006; therefore its potential capacity is not included in our capacity utilization
calculation.
    Environmental Matters
 Ley General de Equilibrio Ecológico y la Protección al Ambiente Ley de Aguas
Nacionales
 Ley General para la Prevención y Gestión Integral de los Residuos
 Normas Oficiales Mexicanas Ley General de Metrología
y Normalización
  44




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##### Table of Contents



Secretaria del Medio Ambiente y Recursos Naturales Procuraduria Federal de Protección al Ambiente
  Industria Limpia
   
 Item 4A.
    
    Unresolved Staff Comments
   45




---



##### Table of Contents



Item 5.
    
    Operating and Financial Review and Prospects
 You should read this discussion in conjunction with, and this discussion is qualified in its
entirety by reference to, our consolidated financial statements and notes thereto and other
financial information included elsewhere in this annual report. Our consolidated financial
statements are prepared in accordance with MFRS, which differs in certain significant respects from
U.S. GAAP. Note 25 to our consolidated financial statements for the year ended December 31, 2009
provides a description of the principal differences between MFRS and U.S. GAAP as they relate to
us. This section contains forward-looking statements that involve risks and uncertainties. Our
actual results may differ materially from those discussed in the forward-looking statements as a
result of various factors, including without limitation those set forth in Item 3. Key
InformationRisk Factors and the other matters set forth in this annual report. See
Forward-Looking Statements.
 
 OPERATING RESULTS
 Factors Affecting Our Results of Operations
  Trend Information
  Developments in the Glass Containers Business
     Developments in the Flat Glass Business
   46




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Natural Gas Prices and Related Derivative Financial Instruments
      47




---



##### Table of Contents



Economic Developments in Mexico, the United States and Europe Affecting Our Business
      48




---



##### Table of Contents



Inflation and Foreign Currency Exchange Rate Fluctuations
  For the Year Ended December 31,2007
    
    
    2008
    
    
    2009Nominal Mexican peso devaluation relative to the U.S.
dollar(1)
    
    
    0.5
    %
    
    
    27.3
    %
    
    
    (5.6
    %)Nominal dollar devaluation relative to the euro
    
    
    11.2
    %
    
    
    (5.2
    %)
    
    
    3.5
    %Mexican inflation (based on changes in INPC)(1)
    
    
    3.8
    %
    
    
    6.5
    %
    
    
    3.6
    %Free Exchange Rate as of year end(1)
    
    Ps.
    10.8662
    
    
    Ps.
    13.8325
    
    
    Ps.
    13.0587Mexican GDP growth rate(2)
    
    
    3.3
    %
    
    
    1.3
    %
    
    
    (6.5
    %)Exchange rate of euro per Mexican peso as of year end(3)
    
    Ps.
    15.9526
    
    
    Ps.
    19.2534
    
    
    Ps.
    19.5789Exchange rate of dollar per euro as of year end(3)
    
    $
    1.4680
    
    
    $
    1.3918
    
    
    $
    1.4992
 
 (1)
    
    Source: Banco de México.(2)
    
    Source: Instituto Nacional de Estadística, Geografía e Informática (National Institute of
Statistics, Geography and Information.(3)
    
    Source: Federal Reserve Bank of New YorkNoon Buying Rates as to euro-to-dollar exchange
rate and Banco de México as to dollar-to-peso exchange rate.
 Effects of Inflation and Foreign Currency Exchange Rate Fluctuations on Operating Margins
      49




---



##### Table of Contents



Effects of Inflation and Foreign Currency Exchange Rate Fluctuations on Total Comprehensive
Financing Result
    Effect of Increases in Interest Rates
   Government, Economic, Fiscal, Monetary or Political Policies or Factors
  Results of Operations
  For the year ended December 31,2007
    
    
    2008
    
    
    2009Net sales
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Cost of goods sold
    
    
    70.6
    
    
    
    73.3
    
    
    
    71.6Gross profit
    
    
    29.4
    
    
    
    26.7
    
    
    
    28.4General, administrative and selling expenses
    
    
    19.9
    
    
    
    20.8
    
    
    
    22.9Operating income
    
    
    9.5
    
    
    
    5.9
    
    
    
    5.5Total comprehensive financing result
    
    
    5.8
    
    
    
    31.3
    
    
    
    9.9Net income
    
    
    0.5
    
    
    
    (19.6
    )
    
    
    (3.1
    )
  50




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##### Table of Contents



For the year ended December 31,2007
    
    
    2008
    
    
    2009
    
    
    2009% of
    
    
    
    
    
    
    % of
    
    
    
    
    
    
    % ofAmount
    
    
    Total
    
    
    Amount
    
    
    Total
    
    
    Amount
    
    
    Total
    
    
    Amount(Ps. millions, except for percentages)
    
    
    ($ millions)(1)Net salesGlass Containers
    
    Ps.
    14,676
    
    
    
    51
    %
    
    Ps.
    15,524
    
    
    
    53
    %
    
    Ps.
    12,452
    
    
    
    52
    %
    
    $
    954Flat Glass
    
    
    13,605
    
    
    
    48
    %
    
    
    13,230
    
    
    
    46
    %
    
    
    11,453
    
    
    
    47
    %
    
    
    877Corporate and other eliminations
    
    
    310
    
    
    
    1
    %
    
    
    259
    
    
    
    1
    %
    
    
    86
    
    
    
    1
    %
    
    
    7Consolidated net sales
    
    Ps.
    28,591
    
    
    
    100
    %
    
    Ps.
    29,013
    
    
    
    100
    %
    
    Ps.
    23,991
    
    
    
    100
    %
    
    $
    1,837(Ps. millions, except for percentages)
    
    
    
    
    
    ($ millions)(1)Net salesDomestic
    
    Ps.
    12,008
    
    
    
    42
    %
    
    Ps.
    12,831
    
    
    
    44
    %
    
    Ps.
    11,152
    
    
    
    46
    %
    
    $
    854Exports
    
    
    6,673
    
    
    
    23
    %
    
    
    6,547
    
    
    
    23
    %
    
    
    6,568
    
    
    
    28
    %
    
    
    503Foreign Subsidiaries
    
    
    9,910
    
    
    
    35
    %
    
    
    9,635
    
    
    
    33
    %
    
    
    6,271
    
    
    
    26
    %
    
    
    480Ps.
    28,591
    
    
    
    100
    %
    
    Ps.
    29,013
    
    
    
    100
    %
    
    Ps.
    23,991
    
    
    
    100
    %
    
    $
    1,837($ millions(2), except for percentages)Net salesDomestic
    
    $
    1,078
    
    
    
    42
    %
    
    $
    1,157
    
    
    
    44
    %
    
    $
    824
    
    
    
    46
    %Exports
    
    
    601
    
    
    
    24
    %
    
    
    600
    
    
    
    23
    %
    
    
    484
    
    
    
    28
    %Foreign Subsidiaries
    
    
    881
    
    
    
    34
    %
    
    
    870
    
    
    
    33
    %
    
    
    461
    
    
    
    26
    %$
    2,560
    
    
    
    100
    %
    
    $
    2,627
    
    
    
    100
    %
    
    $
    1,770
    
    
    
    100
    %($ millions(2), except for percentages)Export salesGlass Containers
    
    $
    364
    
    
    
    61
    %
    
    $
    383
    
    
    
    64
    %
    
    $
    349
    
    
    
    72
    %Flat Glass
    
    
    237
    
    
    
    39
    %
    
    
    217
    
    
    
    36
    %
    
    
    136
    
    
    
    28
    %Consolidated export sales
    
    $
    601
    
    
    
    100
    %
    
    $
    600
    
    
    
    100
    %
    
    $
    484
    
    
    
    100
    %(Ps. millions, except for percentages)
    
    
    
    
    
    ($ millions)(1)Operating income (loss)Glass Containers
    
    Ps.
    2,054
    
    
    
    76
    %
    
    Ps.
    1,661
    
    
    
    97
    %
    
    Ps.
    1,956
    
    
    
    147
    %
    
    $
    150Flat Glass
    
    
    782
    
    
    
    29
    %
    
    
    186
    
    
    
    11
    %
    
    
    (591
    )
    
    
    (45
    )%
    
    
    (45
    )Corporate and other eliminations
    
    
    (132
    )
    
    
    (5
    )%
    
    
    (137
    )
    
    
    (8
    )%
    
    
    (36
    )
    
    
    (3
    )%
    
    
    (4
    )Consolidated operating income
    
    Ps.
    2,704
    
    
    
    100
    %
    
    Ps.
    1,710
    
    
    
    100
    %
    
    Ps.
    1,329
    
    
    
    100
    %
    
    $
    101
 
 (1)
    
    These amounts have been translated into U.S. dollars, solely for the convenience of
the reader, at the rate of 13.0587 pesos per one U.S. dollar, the Free Exchange Rate on
December 31, 2009.(2)
    
    Dollar figures reported herein are in nominal dollars derived by dividing each
months nominal Mexican pesos by exchange rate published by the Banco de México for such
months end.
   51




---



##### Table of Contents



Nine-Month Period Ended September 30, 2010 Compared to Nine-Month Period Ended September 30, 2009
 Net Sales
     Glass Containers Business Unit
     Flat Glass Business Unit
   52




---



##### Table of Contents



Operating Income
  Glass Containers Business Unit
  Flat Glass Business Unit
  Total Comprehensive Financing Result
  Other Expenses (Income), Net
   53




---



##### Table of Contents



Income Taxes
   Net Income
  Year Ended December 31, 2009 Compared to Year Ended December 31, 2008
 Net Sales
     Glass Containers Business Unit
   54




---



##### Table of Contents



Flat Glass Business Unit
      Operating Income
  Glass Containers Business Unit
   55




---



##### Table of Contents



Flat Glass Business Unit
  Total Comprehensive Financing Result
  Other Expenses (Income), Net
  Income Taxes
   Net Loss
   56




---



##### Table of Contents



Year Ended December 31, 2008 Compared to Year Ended December 31, 2007
 Net Sales
   Glass Containers Business Unit
   Flat Glass Business Unit
     57




---



##### Table of Contents



Operating Income
  Glass Containers Business Unit
   58




---



##### Table of Contents



Flat Glass Business Unit
  Total Comprehensive Financing Result
  Other Expenses (Income), Net
  Income Taxes
  Net Income
   59




---



##### Table of Contents



LIQUIDITY AND CAPITAL RESOURCES
 .
    Principal Sources and Uses of Cash
     60




---



##### Table of Contents



Nine-monthperiod endedFor the Year Ended December 31,
    
    
    September 30,2007
    
    
    2008
    
    
    2009
    
    
    2010(in millions of pesos)Sources:Net resources
generated by operating
activities (2007) and
cash flows generated
from operating
activities 
(2008 and
2009)
    
    Ps.
    1,674
    
    
    Ps.
    2,736
    
    
    Ps.
    3,996
    
    
    Ps.
    1,345Sale of assets
    
    
    109
    
    
    
    20
    
    
    
    1,410
    
    
    
    946Debt issuance
    
    
    16,891
    
    
    
    3,034
    
    
    
    1,559
    
    
    
    2,785Uses:Interest payments
    
    
    2,341
    
    
    
    2,044
    
    
    
    943
    
    
    
    558Capital expenditures
    
    
    2,695
    
    
    
    1,798
    
    
    
    1,009
    
    
    
    446Debt repayments
    
    
    14,323
    
    
    
    1,020
    
    
    
    2,483
    
    
    
    3,962Dividends declared and paid
    
    
    215
    
    
    
    274
    
    
    
    14
    
    
    
    6
 Changes in Working Capital (Negative Working Capital)
  Capital Expenditures
     
    
    Our Glass Containers business unit expects to close the year with capital
expenditures of Ps. 594 million ($47 million), which is being used to provide
maintenance to certain furnaces and IS machines; for a palletizing center; and for
infrastructure in one of our facilities. The remainder is being applied to new product
molds.
 
    
    Our Flat Glass business unit expects to close the year with capital expenditures
of Ps.291 million ($23 million), which is being used mainly for maintenance of our
facilities.
  61




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##### Table of Contents



Indebtedness
  As of December 31, 2009(Ps. millions)
    
    
    ($ millions)(1)Short-term
debt(2)(3)
    
    Ps.
    18,197
    
    
    $
    1,394Long-term
debt(4)(5)
    
    
    1,904
    
    
    
    146
 (1)
    
    Peso amounts have been translated into U.S. dollars, solely for the convenience of
the reader, at a rate of 13.0587 pesos per U.S. dollar, the Free Exchange Rate on December 31,
2009.(2)
    
    Includes the current portion of our long-term debt, which was Ps. 15,771 million
($1,208 million) as of December 31, 2009.(3)
    
    92%, 5% and 3% of the aggregate amount of our short-term debt as of December 31,
2009 was denominated in U.S. dollars, Mexican pesos and euros, respectively.(4)
    
    Excludes the current portion of our long-term debt. If the current portion of our
long-term debt were included, the aggregate amount of outstanding long-term debt as of
December 31, 2009 would be Ps. 17,675 million ($1,354 million).(5)
    
    44%, 52% and 3% of the aggregate amount of our long-term debt as of December 31,
2009 was denominated in U.S. dollars, Mexican pesos and euros, respectively.
 Short-Term Debt
  62




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##### Table of Contents



As of September 30, 2010
  Certificados Bursátiles
 As of September 30, 2010(Ps. millions)
    
    
    ($ millions)(1)Short-term
debt(2)(3)(6)
    
    Ps.
    19,602
    
    
    $
    1,568Long-term debt(4)(5)
    
    
    1,721
    
    
    
    138
 
 (1)
    
    Peso amounts have been translated into U.S. dollars, solely for the convenience of the
reader, at a rate of 12.5011 pesos per U.S. dollar, the Free Exchange Rate on September 30,
2010.(2)
    
    Includes the current portion of our long-term debt, which was Ps. 15,838 million ($1,267
million) as of September 30, 2010.(3)
    
    96%, 3% and 1% of the aggregate amount of our short-term debt as of September 30, 2010 was
denominated in U.S. dollars, Mexican pesos and euros, respectively.(4)
    
    Excludes the current portion of our long-term debt. If the current portion of our long-term
debt were included, the aggregate amount of outstanding long-term debt as of September 30,
2010 would be Ps. 17,559 million ($1,405 million).(5)
    
    25%, 61% and 14% of the aggregate amount of our long-term debt as of September 30, 2010 was
denominated in U.S. dollars, Mexican pesos and euros, respectively.(6)
    
    The short-term debt includes $253.4 million dollars of debt regarding the DFI claims.
 Short-Term Debt
  Long-term debt reclassified to short-term due to defaults:
 OutstandingPrincipal
    
    
    
    FinalAmount as of
    
    
    
    Amortization/Facility
    
    September 30, 2010
    
    Interest Rate and Payment Dates
    
    Maturity2012 NotesIssuer:Vitro
    
    $300 million
    
    Interest Rate:8.625% per annum.
    
    February 1, 2012Guarantors: Wholly owned
subsidiaries of Vitro, VENA and
Viméxico
    
    
    
    Interest Payment Dates: Semiannually on August 1 and
February 1 of each year.2017 NotesIssuer:Vitro
    
    $700 million
    
    Interest Rate:9.125% per annum.
    
    February 1, 2017Guarantors: Wholly owned
subsidiaries of Vitro, VENA and
Viméxico
    
    
    
    Interest Payment Dates: Semiannually on August 1 and
February 1 of each year.2013 Senior NotesIssuer:Vitro
    
    $216 million
    
    Interest Rate:11.75% per annum.
    
    November 1, 2013Guarantors: Wholly owned subsidiaries of Vitro, VENA and
Viméxico
    
    
    
    Interest Payment Dates: Semiannually on May 1 and
November 1 of each year.Certificados Bursatiles Vitro 03
Issuer:Vitro
    
    Ps. 150 million
($12 million)
    
    Interest Rate: Cetes + 3.25%Interest Payment Dates: Every
28th day from
October 21, 2004.
    
    February 5, 2009
  63




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##### Table of Contents



Long-Term Debt
 Long-term debt:
 OutstandingPrincipal
    
    
    
    FinalAmount as of
    
    
    
    Amortization/Facility
    
    September 30, 2010
    
    Interest Rate and Payment Dates
    
    MaturityCertificados Bursatiles Vitro 08
Issuer: Vitro
    
    Ps. 400 million
($32 million)
    
    Interest Rate:TIIE (28 days) + 2.50%
Interest Payment Dates: Every
28th day from July 2,
2008.
    
    April 7, 2011Capital Leases
    
    $9.4 million
    
    Interest rate on case by case basis
    
    Several
installments
through 2015Secured debt
    
    Ps. 298 million
($23.8 million)
    
    Interest rate: TIIE + 4%
    
    Severall
installments
through 2014Secured borrowing related to
the Glass Containers accounts
receivable securitization
    
    Ps. 550 million
($44 million)
    
    Interest rate: TIIE + 4%
    
    Severall
installments
through 2012Secured borrowing related to
the Flat Glass accounts
receivable financing program
    
    Ps. 300 million
($24 million)
    
    Interest rate: TIIE + 4%
    
    Severall
installments
through 2014Unsecured debt
    
    $28 million
    
    Interes rate: LIBOR + 8%
    
    Severall
installments
through 2014
 (1)
    
    See Indebtedness.
  2012 Notes and 2017 Notes.
  2013 Notes
  64




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Certificados Bursátiles Vitro 03 Certificados
 Bursátiles note which Certificados Bursátiles
  Certificados Bursátiles Vitro 08 Certificados Bursátiles Certificados Bursátiles
 Flat Glass Accounts Receivable Financing Program
 Covisa / Álcali Securitization
 Bladex Credit Facility.
 Other Restrictions on Dividend Payments
 Ley General de Sociedades Mercantiles
  Share Repurchases and Sales
   65




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##### Table of Contents



Real Estate Matter
 amparo
 PBGC Matter
    Energy
  
 Off-Balance Sheet Arrangements
   66




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##### Table of Contents



TABULAR DISCLOSURE OF CONTRACTUAL OBLIGATIONS
  Less than
    
    
    
    
    
    
    
    
    
    
    More thanContractual Obligations
    
    Total
    
    
    1 year(7)
    
    
    1-3 years
    
    
    3-5 years
    
    
    5 years(Ps. millions)Short- and long-term debt(1)(2) (3)
    
    Ps.
    29,480
    
    
    Ps.
    19,940
    
    
    Ps.
    4,761
    
    
    Ps.
    3,004
    
    
    Ps.
    1,776Operating leases(4)
    
    
    4,294
    
    
    
    861
    
    
    
    1,523
    
    
    
    1,284
    
    
    
    626Unconditional purchase obligations(5)
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    0Other long-term obligations(6)
    
    
    2,972
    
    
    
    330
    
    
    
    634
    
    
    
    600
    
    
    
    1,408Total contractual obligations
    
    Ps.
    36,746
    
    
    Ps.
    21,131
    
    
    Ps.
    6,918
    
    
    Ps.
    4,888
    
    
    Ps.
    3,810
 
 (1)
    
    Does not include DFIs. For a description of our outstanding DFIs, see Item 11.
Quantitative and Qualitative Disclosures about Market RiskNatural Gas Price Risk.(2)
    
    Includes scheduled interest payments with fixed and variable rates. For our variable
interest rate debt, we utilized the rates in effect as of December 31, 2009, as disclosed in
Note 10 of our consolidated financial statements when estimating the scheduled interest
payments. For the 2012 Notes and 2017 Notes, we are adding 200 basis points for the subsequent
2 years, as we are in default on these notes, assuming we can resolve this matter within that
period. Additionally for the less than a year column, we are including the normal and default
interests since the default date to December 31, 2009.(3)
    
    Includes Ps. 152 million of capital lease obligations.(4)
    
    The amounts set forth above under Operating leases include mainly payments that
will be made under leases relating to warehouses, forklifts and computer equipment. We
eliminated the leases regarding our two aircraft leases.(5)
    
    Certain of our subsidiaries agreed to purchase, in the aggregate, 90 megawatts of
electrical power and 1.3 million tons of steam per year pursuant to a 15-year take-or-pay
power purchase agreement with Tractebel Energía. This contract began in April 2003 and the
price at which we are required to purchase electrical power and steam is based on variables
such as inflation, the peso/U.S. dollar exchange rate and the price of natural gas, whose
future value is uncertain.(6)
    
    Expected benefit payments regarding the company pension plans, seniority premium and
severance indemnities.(7)
    
    Includes long-term debt reclassification as short-term debt.  67




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##### Table of Contents



ACCOUNTING CONSIDERATIONS
 Critical Accounting Estimates
  Trade Receivables
  Contingencies
  Financial Instruments
    Environmental Obligations
   68




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Impairment of Long-Lived Assets
   Recoverability of Deferred Tax Assets
     69




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##### Table of Contents



New Accounting Pronouncements
 MFRS
  U.S. GAAP
   70




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RESEARCH AND DEVELOPMENT
        71




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##### Table of Contents



Item 6.
    
    Directors, Senior Management and Employees
 
 DIRECTORS AND SENIOR MANAGEMENT
  Directors
 consejeros
   FirstBecame
    
    
    Year ofName
    
    Principal Occupation
    
    a Director
    
    
    BirthAdrián Sada González
    
    Chairman of the Board of Directors of Vitro, S.A.B. de C.V.
    
    
    1984
    
    
    
    1944Hugo A. Lara García
    
    Chief Executive Officer of Vitro S.A.B. de C.V.
    
    
    2009
    
    
    
    1965Tomás González Sada
    
    Chairman of the Board, President and Chief Executive Officer of Cydsa, S.A.B. de C.V.
    
    
    1980
    
    
    
    1943Andrés Yarte Cantú
    
    Chairman of the Board of Directors and Chief Executive Officer of Empresas Yarte, S.A. de C.V. and K Inver, S.A. de C.V.
    
    
    1991
    
    
    
    1941Federico Sada Melo
    
    International Commercial Manager of the Flat Glass Business Unit
    
    
    2009
    
    
    
    1979Jaime Serra Puche*
    
    President of SAI-Consultores, S.C.
    
    
    1998
    
    
    
    1951Joaquín Vargas Guajardo*
    
    Chairman of the Board of Directors of Grupo MVS Comunicaciones, S.A. de C.V.
    
    
    2000
    
    
    
    1954Jaime Rico Garza
    
    President and Chief Executive Officer of Vitro Europa, Ltd.
    
    
    2008
    
    
    
    1957Manuel Güemez de la Vega*
    
    Chairman of the Board of Regio Empresas S.A. de C.V. and Grupo PREZ
    
    
    2006
    
    
    
    1942Ricardo Martin Bringas*
    
    Chief Executive Officer and Vice-Chairman of Organización Soriana, S.A.B. de C.V.
    
    
    2007
    
    
    
    1960Mario Martín Laborín
Gómez*
    
    Chief Executive Officer of ABC Holding
    
    
    2010
    
    
    
    1952Guillermo Ortiz Martínez*
    
    Presiden of Guillermo Ortiz y Asociados, S.C.
    
    
    2010
    
    
    
    1948Adrián G. Sada Cueva
    
    Vice President of Administration and Finance of Vitro Glass Containers Business Unit
    
    
    2010
    
    
    
    1975
 
 *
    
    Independent non-management directors.  72




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##### Table of Contents



Centenarios Centenarios Centenarios
  Adrián Sada González, Chairman of the Board of Directors of Vitro:
  Hugo A. Lara García, Chief Executive Officer of Vitro S.A.B. de C.V.:
  Federico Sada Melo, International Commercial Manager of Flat Glass Business Unit:
  Tomás González Sada, Chairman of the Board, President and Chief Executive Officer of Cydsa, S.A.B.
de C.V.:
  Andrés Yarte Cantú, Chairman of the Boards of Directors and Chief Executive Officer of Empresas
Yarte, S.A. de C.V., and K Inver,S.A. de C.V.:
  Jaime Serra Puche, President, SAI-Consultores, S.C.:
   73




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##### Table of Contents



Joaquín Vargas Guajardo, Chairman of the Board of Directors of Grupo MVS Comunicaciones, S.A. de
C.V.:
  Jaime Rico, President and Chief Executive Officer of Vitro Europa, Ltd.:
  Manuel Güemez de la Vega, Chairman of the Board of Regio Empresas and Grupo PREZ:
  Ricardo Martin Bringas, Chief Executive Officer and Vice-Chairman of Organización Soriana, S.A.B.
de C.V.:
  Mario Martín Laborín Gómez, Chief Executive Officer of ABC Holding:
  Guillermo Ortiz Martínez, President of Guillermo Ortiz y Asociados, S.C.:
  Adrián G. Sada Cueva, Vice President of Administration and Finance of Glass Containers business:
  Secretary and Surveillance
 Ley del Mercado de Valores
   74




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##### Table of Contents



Senior Management
 directores generales
 CurrentPosition
    
    
    Year ofName
    
    Title
    
    Held Since
    
    
    BirthHugo A. Lara García
    
    Chief Executive Officer
    
    
    2008
    
    
    
    1965Alejandro Sánchez
Mújica
    
    Executive Vice President and General Counsel
    
    
    2005
    
    
    
    1954Claudio Del Valle
Cabello
    
    Chief Financial and Administrative Officer and Chief Restructuring Officer
    
    
    2003
    
    
    
    1960Alfonso Gómez Palacio
    
    President of the Glass Containers Business Unit
    
    
    2009
    
    
    
    1942David González Morales
    
    President of the Flat Glass Business Unit
    
    
    2009
    
    
    
    1955
  Hugo Lara García, President and Chief Executive Officer
  Alejandro Sánchez Mújica, Executive Vice President and General Counsel:
   Claudio Del Valle Cabello, Chief Financial and Administrative Officer and Chief Restructuring
Officer:
   75




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##### Table of Contents



Alfonso Gómez Palacio, President of the Glass Containers Business Unit:
   David González Morales, President of the Flat Glass Business Unit:
  Family Relationship of Directors and Senior Management
  Use of Certain Assets and Services
 Política de
Uso Especial de Servicios Corporativos y de Seguridad
  76




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##### Table of Contents



Compensation
   Directors Compensation
  Variable Compensation
   Employee Stock Option Plan
    77




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##### Table of Contents



For the year ended December 31,Total1998
    
    
    1999
    
    
    2000**
    
    
    2001
    
    
    1998*
    
    
    2002
    
    
    outstandingOptions granted
    
    
    2,813,300
    
    
    
    2,893,000
    
    
    
    4,851,900
    
    
    
    3,204,800
    
    
    
    940,950
    
    
    
    3,941,950Options cancelled, expired or
exercised at December 31, 2009
    
    
    2,813,300
    
    
    
    2,893,000
    
    
    
    3,986,950
    
    
    
    2,827,950
    
    
    
    478,050
    
    
    
    3,208,150Options outstanding December 31, 2009
    
    
    
    
    
    
    
    
    
    
    864,950
    
    
    
    376,850
    
    
    
    462,900
    
    
    
    733,800
    
    
    
    2,438,500Exercise Price
    
    
    
    
    
    
    
    
    
    Ps.
    11.00
    
    
    Ps.
    8.27
    
    
    Ps.
    13.00
    
    
    Ps.
    7.53
 *
    
    During the year ended in 2001, we modified the price of 940,950 options granted in 1998 and
extended their maturity date to 2011.**
    
    The options granted in 2000 expired on March 2010.  Pension Benefits
   Severance Benefits
   78




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##### Table of Contents



BOARD PRACTICES
     CNBV
  79




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##### Table of Contents



80




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##### Table of Contents



(Registro Nacional de
Valores)
  81




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##### Table of Contents



82




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##### Table of Contents



EMPLOYEES
   2007
    
    
    2008
    
    
    2009Business Unit
    
    Period End
    
    
    Average
    
    
    Period End
    
    
    Average
    
    
    Period End
    
    
    AverageGlass Containers
    
    
    13,967
    
    
    
    13,717
    
    
    
    10,044
    
    
    
    13,575
    
    
    
    8,445
    
    
    
    8,881Flat Glass
    
    
    9,488
    
    
    
    8,965
    
    
    
    8,785
    
    
    
    9,284
    
    
    
    7,667
    
    
    
    7,766Corporate Offices
    
    
    987
    
    
    
    815
    
    
    
    556
    
    
    
    624
    
    
    
    695
    
    
    
    745Total
    
    
    24,442
    
    
    
    23,497
    
    
    
    19,385
    
    
    
    23,483
    
    
    
    16,807
    
    
    
    17,392
  2007
    
    
    2008
    
    
    2009Business Unit
    
    Period End
    
    
    Average
    
    
    Period End
    
    
    Average
    
    
    Period End
    
    
    AverageMexico
    
    
    18,070
    
    
    
    17,063
    
    
    
    15,406
    
    
    
    17,486
    
    
    
    13,602
    
    
    
    13,875United States
    
    
    2,632
    
    
    
    2,676
    
    
    
    2,436
    
    
    
    2,530
    
    
    
    1,878
    
    
    
    2,115Rest of the world
    
    
    3,740
    
    
    
    3,758
    
    
    
    1,543
    
    
    
    3,468
    
    
    
    1,327
    
    
    
    1,402Total
    
    
    24,442
    
    
    
    23,497
    
    
    
    19,385
    
    
    
    23,484
    
    
    
    16,807
    
    
    
    17,392
 Relation with Labor Unions
 empleados de confianza
   83




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##### Table of Contents



SHARE OWNERSHIP
  Percentage ofShares
    
    
    Granted
    
    
    Outstanding
    
    
    Exercise
    
    
    AdjustedNumber of
    
    
    Outstanding
    
    
    Options
    
    
    Options
    
    
    Price on
    
    
    Exercise
    
    
    ExpirationName
    
    Shares Owned
    
    
    (3)
    
    
    (4)
    
    
    (4)(5)
    
    
    Grant Date
    
    
    Price
    
    
    DateAdrián Sada González
    
    
    29,545,712
    (1)(6)
    
    
    7.65
    %
    
    
    90,400
    
    
    
    90,400
    
    
    
    13.00
    
    
    
    N/A
    
    
    March 2011550,000
    
    
    
    137,500
    
    
    
    8.27
    
    
    
    N/A
    
    
    March 2011550,000
    
    
    
    275,000
    
    
    
    7.53
    
    
    
    N/A
    
    
    March 2012Hugo A. Lara García
    
    
    *
    
    
    
    *
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Tomás González Sada
    
    
    *
    
    
    
    *
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Andrés Yarte Cantú
    
    
    *
    
    
    
    *
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Federico Sada Melo
    
    
    29,212,591
    (2)
    
    
    7.56
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Jaime Serra Puche
    
    
    *
    
    
    
    *
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Joaquín Vargas Guajardo
    
    
    *
    
    
    
    *
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Jaime Rico Garza
    
    
    *
    
    
    
    *
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Manuel Güemez de la Vega
    
    
    *
    
    
    
    *
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Ricardo Martin Bringas
    
    
    *
    
    
    
    *
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Alejandro Sánchez Mújica
    
    
    *
    
    
    
    *
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Claudio Del Valle Cabello
    
    
    *
    (6)
    
    
    *
    
    
    
    15,100
    
    
    
    15,100
    
    
    
    13.00
    
    
    
    N/A
    
    
    March 201159,000
    
    
    
    14,750
    
    
    
    8.27
    
    
    
    N/A
    
    
    March 201160,500
    
    
    
    30,250
    
    
    
    7.53
    
    
    
    N/A
    
    
    March 2012David González Morales
    
    
    *
    
    
    
    *
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
 
 *
    
    Beneficially owns less than one percent of our shares.(1)
    
    Reported as a group with his wife, Mrs. Esther Cueva de Sada, and his son, Mr.
Adrián Sada Cueva. Entered into the following agreements: (a) a Shareholders Agreement with
Ms. Alejandra Sada González which was effective as of December 11, 2009 (the 2009
Shareholders Agreement), the main provisions of which set forth the rules to be followed by
the abovementioned shareholders with respect to: (i) joint exercise of their voting rights and
(ii) any transfer of their shares; and (b) a Shareholders Agreement with Mr. Alfredo Harp Helú
and Ms. Alejandra Sada González which was effective as of April 28, 2010 (the 2010
Shareholders Agreement), the main provisions of which set forth the rules to be followed by
the abovementioned shareholders with respect to: (i) joint exercise of their voting rights,
except with respect to certain specific and relevant matters, and (ii) any transfer of their
shares.(2)
    
    Reported as a group with his parents, Mr. Federico Sada González and Mrs. Liliana
Melo de Sada, his brother, Mr. Mauricio Sada Melo, and his sister, Ms. Liliana Sada Melo.(3)
    
    For purposes of calculating percentage of shares outstanding, we use the number of
our shares outstanding that was 386,411,643 shares, which is the number equal to our
386,357,143 issued shares minus the shares held as treasury stock. The total amount of
outstanding shares includes 53.6 million of shares that are subject to dispute. See Item 7
Major Shareholders and Related Party TransactionsMajor ShareholdersShares subject to
dispute.(4)
    
    The options listed below are options to purchase our shares.(5)
    
    All the options are exercisable.(6)
    
    In addition to the shares set forth below, Messrs. Adrián Sada González and Claudio
Del Valle Cabello may be deemed to be beneficial owners of the 39,777,907 shares held by our
Stock Option Trust, as they are members of the Technical Committee of the Stock Option Trust
and share the right to vote and the right to sell the shares held by the Stock Option Trust
with the other member of the Technical Committee.   84




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##### Table of Contents



Item 7. Major Shareholders and Related Party Transactions
  
 MAJOR SHAREHOLDERS
    Name
    
    Shares Outstanding(1)
    
    
    % of Shares Outstanding(2)Pension Plan Trust(9)
    
    
    59,484,349
    
    
    
    15.39Stock Option Trust(9)
    
    
    39,777,907
    
    
    
    10.29Mr. Alfredo Harp Helú(7) (8)
    
    
    38,171,281
    
    
    
    9.88Mr. Adrián Sada González(3) (4) (6) (7)
    
    
    29,545,712
    
    
    
    7.65Mr. Federico Sada González(3) (5)
    
    
    29,212,591
    
    
    
    7.56Ms. Alejandra Sada González(3) (6) (7)
    
    
    26,058,188
    
    
    
    6.74
 
 (1)
    
    All of the shares that may be issued upon exercise of our outstanding options are held by our
Stock Option Trust, and all of our outstanding options are currently exercisable.(2)
    
    Calculation of percentage of shares outstanding based upon 386,357,143 issued shares minus
445,500 held as treasury stock. The total amount of outstanding shares includes 53.6 million
of shares that are subject to dispute. See Item 7 Major Shareholders and Related Party
Transactions-Major Shareholders-Shares subject to dispute.(3)
    
    Mrs. María Nelly Sada de Yarte, her children and her childrens spouses collectively hold
17,182,163 of our shares, representing 4.45% of our issued and outstanding shares, which are
not included in the table above. Mrs. María Nelly Sada de Yarte is a sister of Mr. Adrián Sada
González, Mr. Federico Sada Gonzalez and Ms. Alejandra Sada González(4)
    
    Reported as a group with his wife, Mrs. Esther Cueva de Sada, and his son Mr. Adrián Sada
Cueva. In addition to the shares set forth below, Mr. Adrián Sada González may be deemed to be
a beneficial owner of the 39,777,907 shares held by our Stock Option Trust, as a member of the
Technical Committee of the Stock Option Trust who shares the right to vote and the right to
sell the shares held by the Stock Option Trust with the other member of the Technical
Committee.(5)
    
    Reported as a group with his wife, Mrs. Liliana Melo de Sada, his sons Messrs. Federico Sada
Melo and Mauricio Sada Melo, and his daughter, Ms. Liliana Sada Melo.  85




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##### Table of Contents



(6)
    
    Entered into the 2009 Shareholders Agreement. The main provisions of the 2009 Shareholders
Agreement set forth the rules to be followed by the abovementioned shareholders with respect
to: (i) joint exercise of their voting rights and (ii) any transfer of their shares.(7)
    
    Entered into the 2010 Shareholders Agreement. The main provisions of the 2010 Shareholders
Agreement set forth the rules to be followed by the abovementioned shareholders with respect
to: (i) joint exercise of their voting rights, except with respect to certain specific and
relevant matters, and (ii) any transfer of their shares.(8)
    
    Board of Directors, as required by Vitros by-laws, approved the request of Mr. Harp Helú to
acquire additional shares of Vitro in excess of 9.9%, up to a maximum of 15% of the Companys
equity.(9)
    
    Fintech holds stock options that would be excercised for most of these shares. See Item
3Key Information  Recent Developments. Shares subject to dispute
       Fintechs Stock options
   86




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##### Table of Contents



RELATED PARTY TRANSACTIONS
  Arrangements with Respect to Real Estate
  Goods Sold
   Sale of Real Estate
  Purchase of Supermarket Coupons
  Compensation
   87




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##### Table of Contents



Item 8. Financial Information
 Consolidated Financial Statements
  Export Sales
  % of
    
    
    
    
    
    
    % of
    
    
    Corporate
    
    
    % of
    
    
    
    
    
    
    % ofGlass
    
    
    Consolidated
    
    
    Flat
    
    
    Consolidated
    
    
    and other(1)
    
    
    Consolidated
    
    
    
    
    
    
    ConsolidatedContainers
    
    
    Net Sales
    
    
    Glass
    
    
    Net Sales
    
    
    eliminations
    
    
    Net Sales
    
    
    Consolidated
    
    
    Net Sales(Ps. millions)
    
    
    
    
    
    
    (Ps. millions)
    
    
    
    
    
    
    (Ps. millions)
    
    
    
    
    
    
    (Ps. millions)2009Domestic sales
    
    Ps.
    7,557
    
    
    
    61
    %
    
    Ps.
    3,366
    
    
    
    30
    %
    
    Ps.
    229
    
    
    
    100
    %
    
    Ps.
    11,152
    
    
    
    46
    %Export sales
    
    
    4,746
    
    
    
    38
    %
    
    
    1,822
    
    
    
    16
    %
    
    
    
    
    
    
    
    
    
    
    6,568
    
    
    
    27
    %Foreign subsidiaries
    
    
    82
    
    
    
    1
    %
    
    
    6,189
    
    
    
    54
    %
    
    
    
    
    
    
    
    
    
    
    6,271
    
    
    
    26
    %Total net sales
    
    Ps.
    12,385
    
    
    
    100
    %
    
    Ps.
    11,377
    
    
    
    100
    %
    
    Ps.
    229
    
    
    
    100
    %
    
    Ps.
    23,991
    
    
    
    100
    %2008Domestic sales
    
    Ps.
    9,028
    
    
    
    58
    %
    
    Ps.
    3,461
    
    
    
    26
    %
    
    Ps.
    342
    
    
    
    100
    %
    
    Ps.
    12,831
    
    
    
    44
    %Export sales
    
    
    4,179
    
    
    
    27
    %
    
    
    2,368
    
    
    
    18
    %
    
    
    
    
    
    
    
    
    
    
    6,547
    
    
    
    23
    %Foreign subsidiaries
    
    
    2,277
    
    
    
    15
    %
    
    
    7,358
    
    
    
    56
    %
    
    
    
    
    
    
    
    
    
    
    9,635
    
    
    
    33
    %Total net sales
    
    Ps.
    15,484
    
    
    
    100
    %
    
    Ps.
    13,187
    
    
    
    100
    %
    
    Ps.
    342
    
    
    
    100
    %
    
    Ps.
    29,013
    
    
    
    100
    %2007Domestic sales
    
    Ps.
    8,186
    
    
    
    56
    %
    
    Ps.
    3,974
    
    
    
    29
    %
    
    Ps.
    361
    
    
    
    100
    %
    
    Ps.
    12,706
    
    
    
    44
    %Export sales
    
    
    4,305
    
    
    
    29
    %
    
    
    1,946
    
    
    
    14
    %
    
    
    
    
    
    
    
    
    
    
    5,974
    
    
    
    21
    %Foreign subsidiaries
    
    
    2,240
    
    
    
    15
    %
    
    
    7,671
    
    
    
    57
    %
    
    
    
    
    
    
    
    
    
    
    9,911
    
    
    
    35
    %Total net sales
    
    Ps.
    14,731
    
    
    
    100
    %
    
    Ps.
    13,591
    
    
    
    100
    %
    
    Ps.
    361
    
    
    
    100
    %
    
    Ps.
    28,591
    
    
    
    100
    %
 Legal Proceedings
 Concurso Mercantil Certificados Bursátiles 03 Certificados Bursátiles 08
 PBGC Matter
   88




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Pilkington Matter
    Shares subject to dispute
     89




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Real Estate Matter
  Dividend Policy
  Significant Changes
   90




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Item 9. The Offer and Listing
  
 LISTING DETAILS
    BMV
    
    
    NYSEPesos per Share(1)(2)
    
    
    U.S. dollars per ADS(2)(3)Year
    
    High
    
    
    Low
    
    
    High
    
    
    Low2005
    
    
    14.58
    
    
    
    7.33
    
    
    
    4.08
    
    
    
    2.072006
    
    
    20.30
    
    
    
    8.35
    
    
    
    5.55
    
    
    
    2.192007
    
    
    30.99
    
    
    
    19.06
    
    
    
    8.53
    
    
    
    5.162008
    
    
    24.00
    
    
    
    4.50
    
    
    
    6.58
    
    
    
    1.102009
    
    
    8.30
    
    
    
    3.80
    
    
    
    1.92
    (4)
    
    
    0.70
    (4)2010
    
    
    12.18
    (5)
    
    
    6.31
    (5)
    
        
    (4)

    
        
    (4)
 
 (1)
    
    Source: Infosel.(2)
    
    Not adjusted for dividends.(3)
    
    Each of our ADSs indirectly represents three of our shares.(4)
    
    Since August 24, 2009, our ADRs were delisted from NYSE.(5)
    
    On June 2, 2010 our shares were suspended for trading on Mexican Stock
Exchange, suspension that was lifted on October 21, 2010.  91




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BMV
    
    
    NYSEPesos per Share(1)(2)
    
    
    U.S. dollars per ADS(2)(3)Year
    
    High
    
    
    Low
    
    
    High
    
    
    Low2007First Quarter
    
    Ps.
    24.68
    
    
    Ps.
    19.06
    
    
    $
    6.72
    
    
    $
    5.16Second Quarter
    
    
    29.58
    
    
    
    24.47
    
    
    
    8.30
    
    
    
    6.63Third Quarter
    
    
    30.99
    
    
    
    24.84
    
    
    
    8.53
    
    
    
    6.63Fourth Quarter
    
    
    28.61
    
    
    
    19.10
    
    
    
    7.88
    
    
    
    5.252008First Quarter
    
    Ps.
    24.00
    
    
    Ps.
    16.90
    
    
    $
    6.58
    
    
    $
    4.70Second Quarter
    
    
    20.01
    
    
    
    17.33
    
    
    
    5.78
    
    
    
    5.04Third Quarter
    
    
    17.20
    
    
    
    11.82
    
    
    
    4.93
    
    
    
    3.21Fourth Quarter
    
    
    12.09
    
    
    
    4.50
    
    
    
    3.28
    
    
    
    1.102009First Quarter
    
    Ps.
    8.30
    
    
    Ps.
    3.80
    
    
    $
    1.85
    
    
    $
    0.70Second Quarter
    
    
    8.12
    
    
    
    4.50
    
    
    
    1.92
    
    
    
    0.91Third Quarter
    
    
    7.68
    
    
    
    5.05
    
    
    
    1.71
    
    
    
    (4)1.04Fourth Quarter
    
    
    8.24
    
    
    
    6.16
    
    
    
    (4)

    
    
    (4)2010First Quarter
    
    
    9.21
    
    
    
    6.31
    
    
    
    (4)

    
    
    (4)Second Quarter
    
    
    (5)12.18
    
    
    
    (5)8.62
    
    
    
    (4)

    
    
    (4)Third Quarter
    
    
    (5)
    
    
    
    (5)
    
    
    
    (4)

    
    
    (4)Fourth Quarter
    
    
    (5)15.90
    
    
    
    (5)12.12
    
    
    
    (4)

    
    
    (4)
 
 (1)
    
    Source: Infosel.(2)
    
    Not adjusted for dividends.(3)
    
    Each of our ADSs indirectly represents three of our shares.(4)
    
    Since August 24, 2009, our ADRs were delisted from NYSE.(5)
    
    On June 2, 2010 our shares were suspended for trading on Mexican Stock Exchange, suspension that was lifted on October 21, 2010.   92




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BMV
    
    
    NYSEPesos per Share(1)(2)
    
    
    U.S. dollars per ADS(3)Month
    
    High
    
    
    Low
    
    
    High
    
    
    LowDecember 2009
    
    Ps.
    8.24
    
    
    Ps.
    6.50January 2010
    
    Ps.
    8.01
    
    
    Ps.
    6.36February
    
    
    6.79
    
    
    
    6.31March
    
    
    9.21
    
    
    
    6.70April
    
    
    10.86
    
    
    
    8.62May
    
    
    12.18
    
    
    
    9.99June  October(4)
    
    
    12.48
    
    
    
    12.12November
    
    
    15.90
    
    
    
    12.57December
    
    
    15.78
    
    
    
    14.90
 
 (1)
    
    Source: Infosel.(2)
    
    Not adjusted for dividends.(3)
    
    From August 24, 2009 our American one Depositary Receipts (ADR s) stopped trading on the NYSE.(4)
    
    From June 1 to October 28 our share was suspended on the BMV.  93




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MARKETS
 Trading on the Mexican Stock Exchange
  Boletín Diario de Precios y
Cotizaciones
 Trading on the New York Stock Exchange
      94




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Item 10. Additional Information
  
 MEXICAN CORPORATE LAW AND BY-LAWS
  General Information and Corporate Purpose
 sociedad anónima Registro Público de la
Propiedad y del Comercio de Monterrey
  obligaciones títulos valor masa reportos fideicomiso por aval derechos reales derechos personales
 Directors and Shareholders Conflict of Interest
   95




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Related Party Transactions and Certain Other Transactions
     Directors Compensation
  Capital Structure
 sociedad anónima bursátil de capital variable
    96




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Share Registration and Transfer
  Limitation on Acquiring Shares
  de facto or de jure,
       97




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Voting Rights; Preferences and Restrictions
   Dividends
  Código de Comercio
  Liquidation
  Employees Mandatory Share in the Companys Profits
  Capital Reduction
   98




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corredor titulado
 corredor titulado
   sociedad anónima bursátil derecho de retiro
 Purchase by us of our Shares
   Purchase Obligation
   99




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Capital Increase; Preemptive Rights
 Libro de Variaciones de Capital, .
 Periódico Oficial del Estado de
Nuevo León
  Appraisal Rights
   Modification of Shareholders Rights
  Shareholders Meetings and Resolutions
   100




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101




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Periódico Oficial del Estado de Nuevo León
   Asset Acquisitions and Divestitures
  Description of CPOs
 Registro Público
del Comercio de la Ciudad de México, D.F. Registro Público del Comercio de la Ciudad de México, D.F. Ley General de Títulos y Operaciones de Crédito
  Dirección General de Inversiones Extranjeras de la Comisión Nacional de
Inversiones Extranjeras Registro Nacional de
Inversiones Extranjeras
  102




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Ley de Inversión
Extranjera
 Deposit and Withdrawal of our Shares
    Dividends, Other Distributions and Preemptive and Other Rights
    103




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Secretaría de Salud.
 Changes Affecting our Shares
  Voting of our Shares
  Administration of the CPO Trust
 Comisión Nacional de Inversiones Extranjeras Asociación Mexicana
de Casas de Bolsa
  Diario Oficial de la Federación
  104




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Enforcement of Rights of CPO Holders
  Status of CPO Holders
  Termination of the CPO Trust
    105




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Limitations Affecting CPOs Holders
    106




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MATERIAL CONTRACTS
 Indebtedness
  Derivatives
  
 EXCHANGE CONTROLS
 .
   107




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MATERIAL TAX CONSEQUENCES
  Mexican Federal Income Taxation
    Taxation of Cash Distributions
  Taxation of Sale or Other Disposition
     108




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United States Federal Income Taxation
  
    
    a citizen or resident of the United States;
 
    
    a corporation (or entity taxable as a corporation) organized or created in the United
States, any state thereof or the District of Columbia;
 
    
    an estate the income of which is subject to United States federal income tax regardless
of its source; or
 
    
    a trust if (i) a court within the United States is able to exercise primary supervision
over its administration and one or more United States persons have the authority to control
all substantial decisions of the trust or (ii) such trust has a valid election in effect
under applicable U.S. Treasury Regulations to be treated as a United States person.
     Taxation of Cash Distributions and Distributions of Stock
   109




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Sale or Other Taxable Disposition
   110




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Passive Foreign Investment Company Considerations
    Tax Treaties
    111




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WHERE YOU CAN FIND MORE INFORMATION
   
  AVAILABLE INFORMATION
    112




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Item 11. Quantitative and Qualitative Disclosures About Market Risk
             
    
    Risk tolerance
 
    
    Market risks to which we are exposed
 
    
    Types of DFIs to use
 
    
    Time frames for the strategy
 
    
    Circumstances in which we must change our hedging strategy
 
    
    Operating budgets and projections
  113




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
    
    The identification of variables.
    
    The definition of the authorized instruments for the risk administration strategy.
    
    The maximum and minimums limits of control.
    
    Frequency of monitoring.
    
    Responsible for the monitoring of the variables.
   Debt Subject to Market Risk
  Expected Maturity Date(1)
    
    2010
    
    
    2011
    
    
    2012
    
    
    2013
    
    
    2014
    
    
    Thereafter
    
    
    Total
    
    
    Fair Value(million, except for percentages)Fixed-Rate Debt:Dollar-denominated(2)
    
    
    15,911
    
    
    
    10
    
    
    
    11
    
    
    
    12
    
    
    
    37
    
    
    
    
    
    
    
    15,981
    
    
    
    9,146Weighted-average coupon
    
    
    9.49
    %Euro-denominated(3)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Weighted-average interest rate
    
    
    4.1
    %Floating-Rate Debt:Dollar-denominated(2)
    
    
    963
    
    
    
    434
    
    
    
    115
    
    
    
    112
    
    
    
    112
    
    
    
    7
    
    
    
    1,743
    
    
    
    1,743Weighted-average interest rate
            
    LIBOR plus 6.59%Euro-denominated(3)
    
    
    517
    
    
    
    21
    
    
    
    17
    
    
    
    14
    
    
    
    5
    
    
    
    
    
    
    
    574
    
    
    
    574Weighted-average interest rate
            
    Euribor plus 2.83%Peso-denominated
    
    
    806
    
    
    
    400
    
    
    
    
    
    
    
    
    
    
    
    598
    
    
    
    
    
    
    
    1,804
    
    
    
    1,804Weighted-average interest rate
            
    CETES plus 4.95%TIIE plus 0.82%
 
 (1)
    
    The above table was not separated for interest rate and exchange rate risk because
the same debt was exposed to both risks. In our financial statements, $1,207 million ($1,216
million  $9 million of discount) were reclassified from long-term to short-term since we are
not in full compliance under our Senior Notes indentures.(2)
    
    The principal amount of our dollar-denominated debt was translated to pesos at
Ps.13.0587 per U.S. dollar, the Free Exchange Rate as of December 31, 2009.(3)
    
    The principal amount of our euro-denominated debt was translated at Ps. 19.5789 per
euro, the exchange rate as of December 31, 2009.  114




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Natural Gas Price Risk
      115




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Interest Rate Risk and Foreign Currency Exchange Rate Risk
     116




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Item 12. Description of Securities Other than Equity Securities
  Item 12.D.3 Not applicable.
 Item 12.D.4 Not applicable.
 
 Item 13. Defaults, Dividend Arrearages and Delinquencies
  Company
    
    Bank
    
    Guarantee
    
    Type of Default
    
    AmountVitro
    
    2017 Senior Notes
    
    Substantially all of our subsidiaries
    
    Interest payment default
    
    $162 millionVitro
    
    2012 Senior Notes
    
    Substantially all of our subsidiaries
    
    Interest payment default
    
    $66 millionVitro
    
    2013 Senior Notes
    
    Substantially all of our subsidiaries
    
    Interest payment default
    
    $58 millionVitro
    
    RBS
    
    Covisa, Vimexico, Vitro Automotriz, S.A. de C.V. Vidrio y Cristal and Vena.
    
    Principal payment default
    
    $15 millionVitro
    
    Cebures 03
    
    None
    
    Principal and interest payment default
    
    $13 millionVitro
    
    Cebures 08
    
    None
    
    Interest payment default
    
    $1 millionVitro
    
    Fintech Investments, LTD.
    
    Substantially all of our subsidiaries
    
    Principal payment default
    
    $10 million
 Covenant Compliance
  
 Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds
  
 Item 15. Controls and Procedures
    117




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118




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Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders of
Vitro, S.A.B. de C.V.
Garza Garcia, N.L., Mexico
       119




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/s/ Jorge Alberto Villarreal
 
   
 Item 16. Reserved
 
 Item 16A. Audit Committee Financial Expert
  Código de Mejores Prácticas Corporativas
 
 Item 16B. Code of Ethics
    120




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Item 16C. Principal Accountant Fees and Services
  For the year ended December 31,2008
    
    
    2009(Ps. Millions)Audit Fees
    
    Ps.
    49.5
    
    
    
    90.6
    %
    
    Ps.
    44.8
    
    
    
    86
    %Audit-Related Fees
    
    
    2.6
    
    
    
    4.7
    %
    
    
    4.4
    
    
    
    8
    %Tax Fees
    
    
    2.2
    
    
    
    4
    %
    
    
    1.4
    
    
    
    3
    %All Other Fees
    
    
    0.4
    
    
    
    0.7
    %
    
    
    1.5
    
    
    
    3
    %Total
    
    Ps.
    54.6
    
    
    
    100
    %
    
    Ps.
    52.1
    
    
    
    100
    %
 Audit Fees.
 Audit-Related Fees.
 Tax Fees.
 All Other Fees. seguro social
 Audit Committee Pre-Approval Policies and Procedures
 de minimis
 
 Item 16D. Exemption from the Listing Standards for Audit Committees
  
 Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers
  
 Item 16F. Not Applicable
 
 Item 16G. Corporate Governance Differences From NYSE Practices
 DIFFERENCES IN CORPORATE GOVERNANCE PRACTICES
   121




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NYSE Standards
    
    Our Corporate Governance PracticesDirector Independence.Majority
of board of directors must be
independent. §303A.01
    
    Director Independence.Pursuant to the
Mexican Law of the Securities Market,
our shareholders are required to appoint
a Board of Directors in which at least
25% of its members must be independent
as defined under the Mexican Law of the
Securities Market. However, Vitro has a
Board of Directors composed of twelve
members, out of whom five are
independent, this is, 38% are considered
independent directors. The Ordinary
Shareholders Meeting is required to make
a determination as to the independence
of our directors and the CNBV has a term
of 30 days to challenge such
determination. The definition of
independence under Mexican law differs
from the NYSE standards. Under Article
26 of the Mexican Law of the Securities
Market, a director is not independent if
such director is:
        Family member includes a persons
relative of up to four degrees of
consanguinity, affinity or civil, or a
persons spouse or partner, in the case
of (i) and (iv) above. 

Additionally, our Board of Directors
approved to make stricter the
classification criteria resolving that a
director is not independent if such
director is:
 
  122




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NYSE Standards
    
    Our Corporate Governance PracticesExecutive Sessions.
Non-management directors must
meet regularly in executive
sessions without management.
Independent directors should
meet alone in an executive
session at least once a year.
Also, §303A.03 requires a process
for interested parties to
communicate their concerns to
non-management directors.
    
    Executive Sessions.Our non-management
directors have not held executive
sessions without management in the past,
and under our bylaws and applicable
Mexican law, they are not required to do
so.Nominating/Corporate Governance
Committee.Nominating/corporate
governance committee of entirely
independent directors is
required. The committee must
have a written charter
specifying the purpose, duties
and evaluation procedures of the
committee. §303A.04
    
    Nominating Committee.We do not have a
nominating committee or corporate
governance committee. We are not
required to have a nominating/corporate
governance committee, and it is not
expressly recommended by the Mexican Law
of the Securities Market. However the
charter of the Corporate Practices
Committee provides that this Committee
shall supervise the composition of the
Board and ensure compliance with the
maximum number of members and with the
minimum number of independent directors,
as provided by Mexican law.Compensation Committee.
Compensation committee of
independent directors is
required, which must evaluate
and approve executive officer
compensation. The committee must
have a charter specifying the
purpose, duties and evaluation
procedures of the committee.
§303A.05
    
    Compensation Committee.The relevant
compensation matters are brought to the
attention of the Corporate Practices
Committee, such as the (i) appointment
and removal of the CEO and his or her
total compensation, as well as the total
compensation of the Chairman of the
Board of Directors; (ii) approval of the
policies for the appointment and total
compensation of the other Key Executive
Directors and (iii) approval of the
maximum percentage of wages and salary
increases per year.Our committee does not produce a report
on executive compensation. However the
charter of the Corporate Practices
Committee specifies its duties in this
regard.Audit Committee.Audit committee
satisfying the independence and
other requirements of Rule 10A-3
under the Exchange Act and the
more stringent requirements
under the NYSE standards is
required. §§303A.06, 303A.07.The audit committee must be
composed of a minimum of three
independent directors, one of
whom must have accounting or
related financial management
expertise. The committee must
have written charter specifying
the purpose, duties and
evaluation procedures of the
committee. Additionally, a
listed company must have an
internal audit function to
assess risk management processes
and the companys system of
internal control.
    
    Audit Committee.We have an audit
committee of three members. Each member
of the audit committee is independent,
as independence is defined under the
Mexican Law of the Securities Market,
and also meets the independence
requirements of Rule 10A-3 under the
U.S. Securities Exchange Act of 1934, as
amended. Our audit committee operates
primarily pursuant to a written charter
adopted by our Board of Directors.
  123




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NYSE Standards
    
    Our Corporate Governance PracticesEquity Compensation Plans.
Equity compensation plans
require shareholder approval,
subject to limited exemptions.
§§303A.08, 312.03 & 312.04
    
    Equity Compensation Plans.Shareholder
approval is not expressly required under
Mexican law or our bylaws for the
adoption and amendment of an
equity-compensation plan. However, the
Mexican Law of the Securities Market
requires shareholder approval under
certain circumstances.Shareholder Approval for
Issuance of Securities.
Shareholder approval is
required, subject to limited
exceptions, for issuance of
common stock, or of any
securities convertible into or
exercisable for common stock
(even if not listed on the
NYSE), (1) to a director,
officer or substantial security
holder of the company (each, a
Related Party), (2) to a
subsidiary, affiliate or other
closely-related person of a
Related Party, (3) to a company
or entity in which a Related
Party has a substantial
interest, if the number of
shares of common stock to be
issued, or if the number of
shares of common stock into
which the securities may be
convertible or exercisable
exceeds one percent of the
number of shares of common stock
or one percent of the voting
power outstanding before such
issuance, (4) that have voting
power equal to at least 20% of
the outstanding common stock
voting power before such
issuance, (5) that will increase
the number of outstanding shares
of common stock by at least 20%
of the number of outstanding
shares before such issuance or
(6) that will result in a change
of control of the issuer.
§§312.03(b)-(e) & 312.04
    
    Shareholder Approval for Issuance of
Securities.Mexican law and our bylaws
require us to obtain shareholder
approval of the issuance of equity
securities.Code of Business Conduct and
Ethics.Corporate governance
guidelines and a code of
business conduct and ethics are
required, with prompt disclosure
of any waiver for directors or
executive officers. The
guidelines and code must be
disclosed and publicly available
and the code must contain
    
    Code of Business Conduct and Ethics.We
have adopted a code of ethics, which has
been accepted by all of our directors
and executive officers and other
personnel. Our Corporate Practices
Committee monitors the applicability of
our code of ethics, and may propose
amendments to the same, according to its
charter. A copy of our code of ethics is
available on our web site: www.vitro.com.compliance standards and
procedures that will facilitate
the effective operation of the
code. §§303 A.09 & 303A.10Solicitation of Proxies.
Solicitation of proxies and
provision for proxy materials is
required for all meetings of
shareholders. Copies of such
proxy solicitations are to be
provided to NYSE. §§402.01 &
402.04-.06
    
    Solicitation of Proxies.Pursuant to the
provisions of the Mexican Law of the
Securities Market, beginning on the date
when the notice to the shareholders
meeting is published, we immediately and
free of any charge, make available to
the shareholders the documents and
information related to each item of the
meeting agenda.Likewise, pursuant to the Mexican Law of
the Securities Market, in order for the
shareholders to be represented in the
shareholders meetings, we elaborate and
make available to them power of attorney
forms that contain at least: The name of
the Company, the items of the agenda and
some blank spaces to be filled in by the
shareholders to instruct their
representatives how to exercise such
power of attorney.
  124




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NYSE Standards
    
    Our Corporate Governance PracticesWebsite Requirements.The
company must maintain a website
that includes printable versions
of board committee charters,
corporate governance guidelines
and the code of business conduct
and ethics. Additionally, a
foreign private issuer must
include on its website English
language disclosure of
significant differences between
its corporate governance
practices and the NYSE
standards. §§303A.11 & 303A.14
    
    Website Requirements. Pursuant to the
applicable Mexican Law, we are not
required to maintain printable versions
of any document at our website nor
information of significant differences
between our corporate practices and NYSE
standards. Additionally, we are not
required to have information available
other than in Spanish. Under Mexican
Law, we are required to maintain an
updated website in Spanish that includes
our current bylaws, our annual and
quarterly reports and compliance report
with the corporate governance code
(código de mejores prácticas
corporativas), material corporate
restructuring and information about
relevant events. Additionally, our
website contains Spanish printable
versions of the charters of the
Corporate Practices Committee, the Audit
Committee and the Finance and Planning
Committee as well as of the compliance
report with the corporate governance
code and of the code of ethics. We also
have available at our website the
English version of the significant
differences between our corporate
governance practices and the NYSE
standards.
 
 Item 17. Financial Statements
  
 Item 18. Financial Statements
   
    
    Report of Independent Registered Public Accounting Firm for the years ended
December 31, 2009, 2008, 2007
    
    Consolidated Balance Sheets as of December 31, 2009 and 2008
    
    Consolidated Statements of Operations for the years ended December 31, 2009,
2008 and 2007
    
    Consolidated Statements of Changes in Shareholders Equity for the years ended
December 31, 2009, 2008 and 2007
    
    Consolidated Statements of Cash Flows for the years ended December 31, 2009 and
2008.
    
    Consolidated Statement of Changes in Financial Position for the year ended
December 31, 2007.
    
    Notes to the Consolidated Financial Statements.
  125




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Item 19. Exhibits
  Exhibit No.
    
    Description
    
    Page1.01
    
    
    Amended and restated by-laws (estatutos
sociales) of Vitro, S.A.B. de C.V., together
with an English translation
    
    
    c2.01
    
    
    Trust Agreement dated November 28, 1990
between the Common Shares Trustee, as
grantor, and the CPO Trustee (the CPO Trust
Agreement), together with an English
translation
    
    
    i2.02
    
    
    Public Deed dated November 29, 1990 (the
Public Deed), together with an English
translation
    
    
    i2.03
    
    
    Common Shares Trust Agreement
    
    
    i2.04
    
    
    CPO Trust Agreement and Public Deed
    
    
    i2.05
    
    
    Form of Certificado Bursátil
    
    
    g2.06
    
    
    Indenture dated as of October 22, 2003 (2013
Indenture) between Vitro, S.A. de C.V. and
Wachovia Bank (including exhibits); including
Form of 11.75% Senior Note due 2013
    
    
    f2.07
    
    
    Form of First Supplemental Indenture dated as
of October 23, 2006 to the 2013 Indenture
between Vitro, S.A. de C.V. and U.S. Bank
National Association as successor trustee to
Wachovia Bank, National Association
    
    
    a2.08
    
    
    First Supplemental Indenture to the 2013
Indenture dated as of February 1, 2007 among
Vitro, S.A.B. de C.V., the Guarantors party
thereto and U.S. Bank National Association as
successor trustee to Wachovia Bank, National
Association
    
    
    c2.09
    
    
    Second Supplemental Indenture to the 2013
Indenture dated as of April 27, 2007 among
Vitro, S.A.B. de C.V., the New Guarantors
party thereto, the Existing Guarantors party
thereto and U.S. Bank National Association as
successor trustee to Wachovia Bank, National
Association
    
    
    c2.10
    
    
    Third Supplemental Indenture to the 2013
Indenture dated as of January 16, 2008
between Vitro, S.A.B. de C.V., the New
Guarantors party thereto, the Existing
Guarantors party thereto and U.S. Bank
National Association as successor trustee to
Wachovia Bank, National Association
    
    
    b2.11
    
    
    Fourth Supplemental Indenture to the 2013
Indenture dated as of May 15, 2008 between
Vitro, S.A.B. de C.V., the New Guarantors
party thereto, the Existing Guarantors party
thereto and U.S. Bank National Association as
successor trustee to Wachovia Bank, National
Association
    
    
    b2.12
    
    
    Trust Agreement between Banco Invex, S.A.,
Institucion de Banca Multiple, Invex Grupo
Financiero, as issuer and trustee,
Distribuidora Nacional de Vidrio, S.A. de
C.V. Vitro Flotado Cubiertas, S.A. de C.V.,
Vitro Automotriz, S.A. de C.V., and Vitro
Vidrio y Cristal, S.A. de C.V., dated August
3, 2005, in connection with the issuance of
the 6.46% Preferred Notes
    
    
    d2.13
    
    
    Purchase Agreement between Banco Invex, S.A., Institucion
de Banca Multiple, Invex Grupo Financiero, as issuer,
Distribuidora Nacional de Vidrio, S.A. de C.V., Vitro
Flotado Cubiertas, S.A. de C.V., Vitro Automotriz, S.A. de
C.V., Vitro Vidrio y Cristal, S.A. de C.V., and
Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A.
Rabobank International, as purchaser, dated August 22,
2005, in connection to the sale of 6.46% Preferred Notes 
Summary of the document in English attached
    
    
    d2.14
    
    
    Indenture dated as of February 1, 2007 between Vitro,
S.A.B. de C.V., the Guarantors party thereto and The Bank
of New York as Trustee (2012 Indenture)
    
    
    c2.15
    
    
    Form of 8.625% Senior Note due 2012
    
    
    c
  126




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##### Table of Contents



Exhibit No.
    
    Description
    
    Page2.16
    
    
    First Supplemental Indenture to the 2012 Indenture dated as
of April 27, 2007 among Vitro, S.A.B. de C.V. the New
Guarantors party thereto, the Existing Guarantors party
thereto and the Bank of New York
    
    
    c2.17
    
    
    Second Supplemental Indenture to the 2012 Indenture dated
as of January 16, 2008 among Vitro, S.A.B. de C.V., the New
Guarantors party thereto, the Existing Guarantors party
thereto and the Bank of New York
    
    
    b2.18
    
    
    Third Supplemental Indenture to the 2012 Indenture dated as
of May 15, 2008 among Vitro, S.A.B. de C.V., the New
Guarantors party thereto, the Existing Guarantors party
thereto and the Bank of New York
    
    
    b2.19
    
    
    Indenture dated as of February 1, 2007 between Vitro,
S.A.B. de C.V., the Guarantors party thereto and The Bank
of New York as Trustee (2017 Indenture)
    
    
    c2.2
    
    
    Form of 9.125% Senior Note due 2017
    
    
    c2.21
    
    
    First Supplemental Indenture to the 2017 Indenture dated as
of April 27, 2007 among Vitro, S.A.B. de C.V. the New
Guarantors party thereto, the Existing Guarantors party
thereto and the Bank of New York
    
    
    c2.22
    
    
    Second Supplemental Indenture to the 2017 Indenture dated
as of January 16, 2008 among Vitro, S.A.B. de C.V., the New
Guarantors party thereto, the Existing Guarantors party
thereto and the Bank of New York
    
    
    b2.23
    
    
    Third Supplemental Indenture to the 2017 Indenture dated as
of May 15, 2008 among Vitro, S.A.B. de C.V., the New
Guarantors party thereto, the Existing Guarantors party
thereto and the Bank of New York 

There have not been filed as exhibits to this Form 20-F
certain long-term debt instruments, none of which relates
to indebtedness that exceeds 10% of the consolidated assets
of Vitro, S.A.B. de C.V. Vitro, S.A.B. de C.V. agrees to
furnish the Securities and Exchange Commission, upon its
request, a copy of any instrument defining the rights of
holders of long-term debt of Vitro, S.A.B. de C.V. and its
consolidated subsidiaries.
    
    
    b4.01
    
    
    Trust Agreement dated as of March 23, 2005 among Compañía
Vidriera, S.A. de C.V., Industria del Álcali, S.A. de C.V.,
Comercializadora Álcali, S. de R.L. de C.V., ABN AMRO Bank
(México), S.A., Institución de Banca Múltiple, División
Fiduciaria and Banco Invex, S.A., Institución de Banca
Múltiple, Invex Grupo Financiero; Assignment of Rights
dated as of March 23, 2005 among Compañía Vidriera, S.A. de
C.V., Industria del Álcali, S.A. de C.V., Comercializadora
Álcali, S. de R.L. de C.V. and ABN AMRO Bank (México), S.A.
Institución de Banca Múltiple, Division Fiduciana;
CertificadosSubordinadosissued by ABN AMRO Bank (México),
S.A., Institución de Banca Múltiple, Division Fiduciaria,
together with English summary.
    
    
    e4.02
    
    
    Guaranty dated as of March 31, 2005 among Vitro, S.A.B. de
C.V. and of the holders of the CertificadosSubordinados
    
    
    e4.03
    
    
    First amendment dated March 31, 2009 to the Trust Agreement
dated as of March 23, 2005 among Compañía Vidriera, S.A. de
C.V, Industria del Alcali, S.A. de C.V. Bank of America,
S.A., Institución de Banca Múltiple, Grupo Financiero Bank
of America, División Fiduciaria and Coöperatieve Centrale
Raiffeisen-Boerenleenbank, B.A.
    
    
    j4.04
    
    
    Letter of extension between Pilkington plc and Vitro Vidrio
y Cristal, S.A. de C.V., dated April 24, 2006.
    
    
    e4.05
    
    
    Stock Purchase Agreement of Vidrios Panameños S.A. between
the Sellers listed therein and Empresas Comegua, S.A.,
dated April 4, 2006.
    
    
    d4.06
    
    
    Partnership Interest Purchase agreement dated January 16,
2009 among Francisco Javier Prado Ovalle, Isaac Prado
Ovalle, Recaredo Prado Ovalle, Invergar Participaciones
Inmobiliarias, S.L., Isaac Prado Bodelón y Concepción
Ovalle Vallinas as Seller and Vimexico, S.A. de C.V. as
Purchaser
    
    
    j
  127




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Exhibit No.
    
    Description
    
    Page4.07
    
    
    Partnership Interest Purchase agreement dated January 30,
2009 among Francisco Javier Prado Ovalle, Isaac Prado
Ovalle, Recaredo Prado Ovalle, Invergar Participaciones
Inmobiliarias, S.L., Isaac Prado Bodelón y Concepción
Ovalle Vallinas as Seller and Vimexico, S.A. de C.V. as
Purchaser
    
    
    j4.08
    
    
    Trust Agreement dated November 3, 2008 among Vitro Envases
Norteamerica, S.A. de C.V. Compañia Vidriera, S.A. de C.V.,
Vitro Corporativo, S.A. de C.V., Vidriera Toluca, S.A. de
C.V., Vitro, S.A.B. de C.V. and Nacional Financiera,
S.N.C., División Fiduciaria.
    
    
    j4.09
    
    
    English summary of the Option Agreement dated December 15,
2009 among Skandia Vida, S.A. de C.V., Vitro, S.A.B. de
C.V. and Fintech Investments Ltd.
    
    
    +4.10
    
    
    English summary of the Option Agreement dated December 15,
2009 between Vitro, S.A.B. de C.V. and Fintech Investments
Ltd.
    
    
    +4.11
    
    
    English summary of the Lease agreement dated December 15,
2009 entered into by and between BANCO INVEX, S.A.,
INSTITUCIÓN DE BANCA MÚLTIPLE, INVEX GRUPO FINANCIERO, as
Lessor and Compañía Vidriera, S.A. de C.V. as Lessee (as
amended).
    
    
    +8.1
    
    
    List of subsidiaries of Vitro, S.A.B. de C.V.
    
    
    +12.1
    
    
    Certification of the Chief Executive Officer of Vitro,
S.A.B. de C.V. pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
    
    
    +12.2
    
    
    Certification of the Chief Financial and Administrative
Officer of Vitro, S.A.B. de C.V. pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.
    
    
    +13.1
    
    
    Certification of the Chief Executive Officer, Chief
Financial Officer and Chief Administrative Officer of
Vitro, S.A.B. de C.V. pursuant to 18 U.S.C. §1350, as
adopted pursuant to Section 906 of the Sarbanes Oxley Act
of 2002.
    
    
    +
 +
    
    Filed herewith.a
    
    Filed as an exhibit to the Registration Statement of Vitro, S.A.B. de
C.V. on Form F-4 (File No. 333-135546) and incorporated herein by
reference thereto.b
    
    Filed as an exhibit to Vitro, S.A.B. de C.V.s annual report on Form
20-F for the year ended December 31, 2007 and incorporated herein by
reference thereto.c
    
    Filed as an exhibit to Vitro, S.A.B. de C.V.s annual report on Form
20-F for the year ended December 31, 2006 and incorporated herein by
reference thereto.d
    
    Filed as an exhibit to Vitro, S.A.B. de C.V.s annual report on Form
20-F for the year ended December 31, 2005 and incorporated herein by
reference thereto.e
    
    Filed as an exhibit to Vitro, S.A.B. de C.V.s annual report on Form
20-F for the year ended December 31, 2004 and incorporated herein by
reference thereto.f
    
    Filed as an exhibit to Vitro, S.A.B. de C.V.s annual report on Form
20-F for the year ended December 31, 2003 and incorporated herein by
reference thereto.g
    
    Filed as an exhibit to Vitro, S.A.B. de C.V.s annual report for the
year ended December 31, 2002 and incorporated herein by reference
thereto.h
    
    Filed as an exhibit to the Registration Statement of Vicap, S.A. de
C.V. on Form F-4 (File no. 333-9498) and incorporated herein by
reference thereto.i
    
    Filed as an exhibit to the Registration Statement of Vitro, S.A. de
C.V. on Form F-1 (File no. 33-43660) and incorporated herein by
reference thereto.j
    
    Filed as an exhibit to Vitro, S.A.B. de C.V.s annual report on Form
20-F for the year ended December 31, 2008 and incorporated herein by
reference thereto.  128




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SIGNATURES
   VITRO, S.A.B. DE C.V.,by
    
    /s/ Hugo Alejandro Lara García

Name: Hugo Alejandro Lara GarcíaTitle: Chief Executive Officerby
    
    /s/ Claudio Luis Del Valle Cabello

Name: Claudio Luis Del Valle CabelloTitle: Chief Financial and Administrative OfficerVIMÉXICO, S.A. DE C.V.,by
    
    /s/ Claudio Luis Del Valle Cabello

Name: Claudio Luis Del Valle CabelloTitle: Chief Financial and Administrative Officer
  129




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Vitro, S.A.B. de C. V. and Subsidiaries




---



##### 



Content
    
    PageReport
of Independent Registered Public Accounting Firm
    
    
    F-1 - F-2Consolidated balance sheets
    
    
    F-3 - F-4Consolidated statements of operations
    
    
    F-5Consolidated statement of changes in financial position
    
    
    F-6 - F-7Consolidated statements of cash flows
    
    
    F-8 - F-9Consolidated
statements of changes in stockholders equity
    
    
    F-10Notes to consolidated financial statements
    
    
    F-11




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##### Table of Contents



Report of Independent Registered Public Accounting Firm
 To the Board of Directors and Stockholders of
 Vitro, S.A.B. de C.V.
 Garza Garcia, N.L., Mexico
    Statement of Cash Flows Effects of
Inflation Employee Benefits Income Taxes Consolidated or
Combined Financial Statements Intangible Assets Share-based Payments
   F-1




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##### Table of Contents



Fair Value
Measurements Financial Accounting Standards Board Accounting Standards
Codification Noncontrolling
Interests in Consolidated Financial Statements  an amendment of ARB No. 51 Subsequent Events
  Internal ControlIntegrated Framework
   /s/ Jorge Alberto Villarreal
 
  F-2




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##### Table of Contents



Vitro, S.A.B. de C.V. and Subsidiaries
 
 Consolidated Balance Sheets
  Millions ofUS dollars(Convenience Translation)December 31,
    
    
    December 31,2008
    
    
    2009
    
    
    2009AssetsCash and cash equivalents
    
    Ps.
    1,428
    
    
    Ps.
    2,616
    
    
    US$
    200Trade receivables, net
    
    
    4,301
    
    
    
    3,201
    
    
    
    245Taxes receivable
    
    
    589
    
    
    
    146
    
    
    
    11Other receivables
    
    
    1,485
    
    
    
    961
    
    
    
    74Inventories, net
    
    
    4,178
    
    
    
    3,172
    
    
    
    243Current assets
    
    
    11,981
    
    
    
    10,096
    
    
    
    773Investment in associated company
    
    
    996
    
    
    
    886
    
    
    
    68Land and buildings, net
    
    
    8,051
    
    
    
    6,774
    
    
    
    519Machinery and equipment, net
    
    
    7,890
    
    
    
    8,001
    
    
    
    612Construction in progress
    
    
    1,332
    
    
    
    563
    
    
    
    43Goodwill
    
    
    771
    
    
    
    721
    
    
    
    55Deferred taxes
    
    
    3,418
    
    
    
    4,515
    
    
    
    346Other assets
    
    
    1,335
    
    
    
    1,096
    
    
    
    84Long-term assets
    
    
    23,793
    
    
    
    22,556
    
    
    
    1,727Ps.
    35,774
    
    
    Ps.
    32,652
    
    
    US$
    2,500
  -s- Hugo A. Lara García
    
    -s- Claudio L. Del Valle CabelloHugo A. Lara García
    
    Claudio L. Del Valle CabelloChief Executive Officer
    
    Chief Financial and Administrative Officer
  F-3




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##### Table of Contents



Vitro, S.A.B. de C.V. and Subsidiaries
 Consolidated Balance Sheets
  Millions ofUS dollars(Convenience Translation)December 31,
    
    
    December 31,2008
    
    
    2009
    
    
    2009LiabilitiesShort-term borrowings
    
    Ps.
    2,309
    
    
    Ps.
    1,680
    
    
    US$
    129Current maturities of long-term debt
    
    
    16,887
    
    
    
    16,517
    
    
    
    1,265Trade payables
    
    
    2,356
    
    
    
    1,595
    
    
    
    122Accrued expenses
    
    
    589
    
    
    
    713
    
    
    
    54Derivative financial instruments
    
    
    3,777
    
    
    
    3,328
    
    
    
    255Interest payable
    
    
    735
    
    
    
    2,428
    
    
    
    186Other current liabilities
    
    
    2,410
    
    
    
    1,319
    
    
    
    101Current liabilities
    
    
    29,063
    
    
    
    27,580
    
    
    
    2,112Long-term debt
    
    
    2,866
    
    
    
    1,904
    
    
    
    146Employee benefits
    
    
    461
    
    
    
    66
    
    
    
    5Deferred taxes
    
    
    11Taxes payable
    
    
    
    
    
    
    850
    
    
    
    65Other long-term liabilities
    
    
    265
    
    
    
    268
    
    
    
    20Long-term liabilities
    
    
    3,603
    
    
    
    3,088
    
    
    
    236Total liabilities
    
    
    32,666
    
    
    
    30,668
    
    
    
    2,348Commitments and contingencies (note 12)Stockholders equityCapital stock: no par value, 386,857,143 shares issued and outstanding in 2008 and 2009
    
    
    387
    
    
    
    387
    
    
    
    30Restatement of capital stock
    
    
    7,245
    
    
    
    7,245
    
    
    
    555Restated capital stock
    
    
    7,632
    
    
    
    7,632
    
    
    
    585Treasury stock (40,204,310 in 2008 and 2009)
    
    
    (547
    )
    
    
    (547
    )
    
    
    (42
    )Additional paid-in capital
    
    
    1,761
    
    
    
    1,645
    
    
    
    126Translation effects of foreign subsidiaries
    
    
    402
    
    
    
    370
    
    
    
    28Accumulated deficit
    
    
    (7,544
    )
    
    
    (8,580
    )
    
    
    (657
    )Controlling interest
    
    
    1,704
    
    
    
    520
    
    
    
    40Noncontrolling interest in consolidated subsidiaries
    
    
    1,404
    
    
    
    1,464
    
    
    
    112Total stockholders equity
    
    
    3,108
    
    
    
    1,984
    
    
    
    152Total liabilities and stockholders equity
    
    Ps.
    35,774
    
    
    Ps.
    32,652
    
    
    US$
    2,500
   F-4




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##### Table of Contents



Vitro, S.A.B. de C.V. and Subsidiaries
 
 Consolidated Statements of Operations
  Millions ofUS dollars(ConvenienceTranslation)Year ended December 31,
    
    
    December 312007
    
    
    2008
    
    
    2009
    
    
    2009Net sales
    
    Ps.
    28,591
    
    
    Ps.
    29,013
    
    
    Ps.
    23,991
    
    
    US$
    1,837Cost of sales
    
    
    20,187
    
    
    
    21,279
    
    
    
    17,180
    
    
    
    1,316Gross profit
    
    
    8,404
    
    
    
    7,734
    
    
    
    6,811
    
    
    
    521Selling, general and administrative expenses
    
    
    5,700
    
    
    
    6,024
    
    
    
    5,482
    
    
    
    420Operating income
    
    
    2,704
    
    
    
    1,710
    
    
    
    1,329
    
    
    
    101Total comprehensive financing result
    
    
    1,660
    
    
    
    9,077
    
    
    
    2,366
    
    
    
    181Income (loss) after financing cost
    
    
    1,044
    
    
    
    (7,367
    )
    
    
    (1,037
    )
    
    
    (80
    )Other expenses, net
    
    
    869
    
    
    
    495
    
    
    
    291
    
    
    
    22Equity in earnings (losses) of associated company
    
    
    
    
    
    
    5
    
    
    
    (24
    )
    
    
    (2
    )Income (loss) before taxes
    
    
    175
    
    
    
    (7,857
    )
    
    
    (1,352
    )
    
    
    (104
    )Income tax expense (benefit)
    
    
    44
    
    
    
    (2,175
    )
    
    
    (598
    )
    
    
    (47
    )Net income (loss) for the year
    
    Ps.
    131
    
    
    Ps.
    (5,682
    )
    
    Ps.
    (754
    )
    
    US$
    (57
    )Net noncontrolling interest income
    
    Ps.
    144
    
    
    Ps.
    24
    
    
    Ps.
    33
    
    
    US$
    3Net controlling interest loss
    
    
    (13
    )
    
    
    (5,706
    )
    
    
    (787
    )
    
    
    (60
    )Ps.
    131
    
    
    Ps.
    (5,682
    )
    
    Ps.
    (754
    )
    
    US$
    (57
    )Earnings (losses) per common share (based on
weighted average shares outstanding of 341,042,193 for 2007, 342,834,251 for 2008 and
346,652,833 for 2009):Income (loss) per share
    
    Ps.
    0.38
    
    
    Ps.
    (16.57
    )
    
    Ps.
    (2.17
    )
    
    US$
    (0.17
    )Noncontrolling interest income
    
    
    (0.42
    )
    
    
    (0.07
    )
    
    
    (0.10
    )
    
    
    (0.01
    )Net controlling interest loss
    
    Ps.
    (0.04
    )
    
    Ps.
    (16.64
    )
    
    Ps.
    (2.27
    )
    
    US$
    (0.18
    )
   F-5




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##### Table of Contents



Vitro, S.A.B. de C.V. and Subsidiaries
 
 Consolidated Statement of Changes in Financial Position
  Year endedDecember 31,2007Operating activities:Net income from continuing operations
    
    Ps.
    131Add (deduct) non-cash items:Depreciation and amortization
    
    
    1,414Provision for employee benefits
    
    
    261Early extinguishment of employee benefits
    
    
    97Amortization of debt issuance costs
    
    
    170Loss from sale of subsidiaries and associated companies
    
    
    11Impairment of long-lived assets
    
    
    122Loss from sale of long-lived assets
    
    
    47Mark-to market of derivative financial instruments
    
    
    216Deferred taxes and workers profit sharing
    
    
    (351
    )2,118Increase in trade receivables
    
    
    (81
    )Increase in inventories
    
    
    (308
    )Increase in trade payables
    
    
    243Change in other current assets and liabilities
    
    
    174Employee benefits
    
    
    (472
    )Net resources generated by operating activities
    
    
    1,674Financing activities:Proceeds from short-term bank loans
    
    
    2,602Proceeds from long-term bank loans
    
    
    14,289Amortization in real terms of bank loans
    
    
    (611
    )Payment of short-term bank loans
    
    
    (4,864
    )Payment of long-term bank loans
    
    
    (9,459
    )Debt issuance costs
    
    
    (293
    )Dividends paid to stockholders of Vitro (1)
    
    
    (136
    )Dividends paid to noncontrolling interest
    
    
    (79
    )Purchase of treasury stock
    
    
    (1
    )Other financing activities
    
    
    487Net resources generated by financing activities
    
    
    1,935
  F-6




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##### Table of Contents



Year endedDecember 31,2007Investing activities:Investments in land, buildings, machinery and equipment
    
    
    (2,695
    )Proceeds from sale of land, buildings, machinery and equipment
    
    
    72Restricted cash
    
    
    (88
    )Investment in subsidiaries
    
    
    (181
    )Proceeds from sale of subsidiaries and associated companies
    
    
    37Other long-term assets
    
    
    (36
    )Deferred charges
    
    
    (302
    )Net resources used in investing activities
    
    
    (3,193
    )Net increase in cash and cash equivalents
    
    
    416Balance at beginning of year
    
    
    1,222Balance at end of year
    
    Ps.
    1,638
 (1)
    
    This dividend is recognized for accounting purposes as a capital reimbursement.   F-7




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##### Table of Contents



Vitro, S.A.B. de C.V. and Subsidiaries
 
 Consolidated Statements of Cash Flows
  Millions ofUS dollars(ConvenienceYear ended December 31,
    
    
    Translation)2008
    
    
    2009
    
    
    2009Operating activities:Loss before income taxes
    
    Ps.
    (7,857
    )
    
    Ps.
    (1,352
    )
    
    US$
    (104
    )Items related to investing activities:Depreciation and amortization
    
    
    1,469
    
    
    
    1,473
    
    
    
    113Gain from sale of long-lived assets
    
    
    (3
    )
    
    
    (209
    )
    
    
    (16
    )Impairment and retirement of long-lived assets
    
    
    196
    
    
    
    207
    
    
    
    16Foreign exchange loss
    
    
    79
    
    
    
    6
    
    
    
    0Interest income
    
    
    (58
    )
    
    
    (51
    )
    
    
    (4
    )Equity in (income) loss of associated company
    
    
    (5
    )
    
    
    24
    
    
    
    2Items related to financing activities:Amortization of debt issuance costs
    
    
    55
    
    
    
    80
    
    
    
    6Derivative financial instruments
    
    
    3,766
    
    
    
    570
    
    
    
    44Foreign exchange loss (gain)
    
    
    3,655
    
    
    
    (1,177
    )
    
    
    (90
    )Interest expense
    
    
    2,092
    
    
    
    2,750
    
    
    
    211Increase (decrease) for:Trade receivables
    
    
    (101
    )
    
    
    1,049
    
    
    
    80Inventories
    
    
    (19
    )
    
    
    871
    
    
    
    67Trade payables
    
    
    (317
    )
    
    
    (587
    )
    
    
    (45
    )Other current assets and liabilities
    
    
    (93
    )
    
    
    381
    
    
    
    29Employee benefits
    
    
    88
    
    
    
    (397
    )
    
    
    (30
    )Income taxes (paid) recoverable
    
    
    (211
    )
    
    
    358
    
    
    
    27Net cash provided by operating activities
    
    
    2,736
    
    
    
    3,996
    
    
    
    306Investing activities:Investments in machinery and equipment
    
    
    (1,798
    )
    
    
    (1009
    )
    
    
    (77
    )Proceeds from sale of machinery and equipment
    
    
    20
    
    
    
    1,410
    
    
    
    108Investment in subsidiaries, net of cash acquired
    
    
    (63
    )
    
    
    (454
    )
    
    
    (35
    )Other assets
    
    
    332
    
    
    
    18
    
    
    
    1Deferred charges
    
    
    (262
    )
    
    
    (174
    )
    
    
    (13
    )Interest received
    
    
    60
    
    
    
    54
    
    
    
    4Net cash used in investing activities
    
    
    (1,711
    )
    
    
    (155
    )
    
    
    (12
    )Excess cash to be applied to financing activities
    
    
    1,025
    
    
    
    3,841
    
    
    
    294
  F-8




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##### Table of Contents



Millions ofUS dollars(ConvenienceYear ended December 31,
    
    
    Translation)2008
    
    
    2009
    
    
    2009Financing activities:Proceeds from (payments of) short-term bank loans
    
    Ps.
    1,058
    
    
    Ps.
    (15
    )
    
    US$
    (1
    )Interest paid
    
    
    (2,044
    )
    
    
    (943
    )
    
    
    (72
    )Dividends paid to stockholders of Vitro, S.A.B. de C.V.(1)
    
    
    (143
    )Dividends paid to noncontrolling interest
    
    
    (131
    )
    
    
    (14
    )
    
    
    (1
    )Issuance of capital stock to noncontrolling interest
    
    
    22Proceeds from long-term bank loans
    
    
    1,976
    
    
    
    1,559
    
    
    
    119Payments of long-term bank loans
    
    
    (1,020
    )
    
    
    (2,468
    )
    
    
    (189
    )Sale of treasury stock
    
    
    75Debt issuance costs
    
    
    (63
    )
    
    
    (11
    )
    
    
    (1
    )Derivative financial instruments
    
    
    (1,138
    )
    
    
    (824
    )
    
    
    (63
    )Other financing activities
    
    
    (36
    )
    
    
    5
    
    
    
    0Net cash used in financing activities
    
    
    (1,444
    )
    
    
    (2,711
    )
    
    
    (208
    )Net (decrease) increase in cash and cash equivalents
    
    
    (419
    )
    
    
    1,130
    
    
    
    86Adjustment to cash flows due to exchange rate fluctuations
    
    
    93
    
    
    
    1
    
    
    
    0Deconsolidation of subsidiary
    
    
    (105
    )Cash and cash equivalents:At the beginning of year (includes restricted cash of Ps. 526 and Ps. 304 at December 31, 2008 and 2009, respectively)
    
    
    2,163
    
    
    
    1,732
    
    
    
    133At the end of year (includes restricted cash of Ps. 304 and Ps. 247 at December 31 2008 and 2009, respectively)
    
    Ps.
    1,732
    
    
    Ps.
    2,863
    
    
    US$
    219
 (1)
    
    This dividend is recognized for accounting purposes as a capital reimbursement.   F-9




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##### Table of Contents



Vitro, S.A.B. de C.V. and Subsidiaries
 
 Consolidated Statements of Changes in Stockholders Equity
  Translation
    
    
    RetainedRestated
    
    
    Treasury stock
    
    
    Shortfall in
    
    
    
    
    
    
    effect of
    
    
    earnings
    
    
    
    
    
    
    Totalcapital
    
    
    and additional
    
    
    restatement of
    
    
    Other
    
    
    foreign
    
    
    (accumulated
    
    
    Noncontrolling
    
    
    Stockholdersstock
    
    
    paid-in capital
    
    
    capital
    
    

reserves(1)
    
    
    subsidiaries
    
    
    deficit)
    
    
    interest
    
    
    equityBalance at January 1, 2007
    
    Ps.
    7,632
    
    
    Ps.
    1,816
    
    
    Ps.
    (21,090
    )
    
    Ps.
    (2,302
    )
    
    
    
    
    
    Ps.
    21,418
    
    
    Ps.
    1,892
    
    
    Ps.
    9,366Dividends (Ps. 0.37 per share)(2)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (136
    )
    
    
    
    
    
    
    (136
    )Decrease in noncontrolling interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (57
    )
    
    
    (57
    )Purchase of treasury stock
    
    
    
    
    
    
    (1
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1
    )Comprehensive income
    
    
    
    
    
    
    
    
    
    
    (64
    )
    
    
    166
    
    
    
    
    
    
    
    (13
    )
    
    
    125
    
    
    
    214Balance at December 31, 2007
    
    
    7,632
    
    
    
    1,815
    
    
    
    (21,154
    )
    
    
    (2,136
    )
    
    
    
    
    
    
    21,269
    
    
    
    1,960
    
    
    
    9,386Reclassification for adoption of new Mexican Financial Reporting Standards
    
    
    
    
    
    
    
    
    
    
    21,154
    
    
    
    2,136
    
    
    
    
    
    
    
    (22,964
    )
    
    
    
    
    
    
    326Dividends (Ps. 0.40 per share)(2)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (143
    )
    
    
    
    
    
    
    (143
    )Decrease in noncontrolling interest
    
    
    
    
    
    
    (676
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (815
    )
    
    
    (1,491
    )Sale of treasury stock
    
    
    
    
    
    
    75
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    75Comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Ps.
    402
    
    
    
    (5,706
    )
    
    
    259
    
    
    
    (5,045
    )Balance at December 31, 2008
    
    
    7,632
    
    
    
    1,214
    
    
    
    0
    
    
    
    0
    
    
    
    402
    
    
    
    (7,544
    )
    
    
    1,404
    
    
    
    3,108Effect in retained earnings of cancellation of preoperating costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (12
    )
    
    
    (1
    )
    
    
    (13
    )Effect of liability related to Mexican Tax Reform
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (237
    )
    
    
    
    
    
    
    (237
    )Increase in noncontrolling interest
    
    
    
    
    
    
    (116
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    106
    
    
    
    (10
    )Comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (32
    )
    
    
    (787
    )
    
    
    (45
    )
    
    
    (864
    )Balance at December 31, 2009
    
    Ps.
    7,632
    
    
    Ps.
    1,098
    
    
    Ps.
    0
    
    
    Ps.
    0
    
    
    Ps.
    370
    
    
    Ps.
    (8,580
    )
    
    Ps.
    1,464
    
    
    Ps.
    1,984
 (1)
    
    Includes the initial cumulative effect of deferred tax and the additional minimum
liability related to employee benefits.(2)
    
    This dividend is recognized for accounting purposes as a capital reimbursement.   F-10




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##### Table of Contents



(Millions of Mexican pesos, except per share amounts)
 1.
    
    Activities of the Company
  2.
    
    Basis of presentation and principles of consolidation
 a)
    
    Basis of presentation
      F-11




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##### Table of Contents



(Millions of Mexican pesos, except per share amounts)
 b)
    
    Consolidated subsidiaries
    FLAT GLASS
    
    GLASS CONTAINERS
    
    CORPORATEViméxico, S.A. de C.V. (91.80%)
    
    Vitro Envases Norteamérica, S.A. de C.V. (100%)
    
    Vitro Corporativo, S.A. de C.V. (100%)

Vidrio y Cristal del Noroeste, S.A. de C.V. (91.80%)(1)
    
    Fabricación de Máquinas, S.A. de C.V. (100%)
    
    Aerovitro, S.A. de C.V.(100%)Vitro Flotado Cubiertas, S.A. de C.V. (91.80%)
    
    Compañía Vidriera, S.A. de C.V. (100%)
    
    Clinica Vitro, A.C.(100%)Vidrio Plano de México, S.A. de C.V. (91.80%)
    
    Vidriera Monterrey, S.A. de C.V. (100%)
    
    American Assets Holding, Co. (100%)Vitro Flex, S.A. de C.V. (91.80%)
    
    Vidriera Guadalajara, S.A. de C.V. (100%)Cristales Automotrices, S.A. de C.V. (46.81%)
    
    Vidriera Los Reyes, S.A. de C.V. (100%)Vitro Colombia, S.A. (91.80%)
    
    Vidriera Querétaro, S.A. de C.V. (100%)Vitro America, LLC. (100%)
    
    Vidriera Toluca, S.A. de C.V. (100%)Vitro Cristalglass, S.L. (99.29%)(2)
    
    Vitro Packaging, LLC. (100%)Vitro Chaves Industria de Vidro, S.A. (59.57%)
    
    Vitro Packaging México, S. A. de C.V. (100%)Vitro Automotriz, S.A. de C.V. (99.92%)
    
    Industria del Álcali, S.A. de C.V. (100%)Vitro Vidrio y Cristal, S.A. de C.V. (99.99%)
    
    Vidrio Lux, S.A. (100%)Productos de Valor Agregado en Cristal, S.A. de C.V.
(55%) (3)
  F-12




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##### Table of Contents



(Millions of Mexican pesos, except per share amounts)
 (1)
    
    In July 2007, Viméxico acquired the remaining 50% of the outstanding shares
of Vitro AFG, S.A. de C.V. (Vitro AFG) from AFG Industries Inc. (AFG Industries), in
order to assume control and increase its ownership to 100%, subsequently changing its
legal name to Vidrio y Cristal del Noroeste, S.A. de C.V. (see note 20 b).
 (2)
    
    In July 2008, Viméxico was notified by its partner of its right to exercise
the put option related to the sale of its 40% interest in Vitro Cristalglass. The
option was officially exercised in August 2008 and beginning in September 2008, Vitro
Cristalglass is 100% consolidated (see note 20 c).
 (3)
    
    In August 2007, Vitro Vidrio y Cristal, S.A. de C.V. (Vitro VyC) acquired
55% of the outstanding shares of Productos de Valor Agregado en Cristal, S.A. de C.V.
(PVA) (see note 20 a).
 c)
    
    Translation of financial statements from foreign subsidiaries
     F-13




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##### Table of Contents



(Millions of Mexican pesos, except per share amounts)
  Companies in:
    
    Recording Currency
    
    Functional CurrencyUnited States of America
    
    Dollar
    
    DollarEurope
    
    Euro
    
    EuroCentral and South America
    
    Local
    
    Dollar
 d)
    
    Comprehensive income (loss).- Represents changes in stockholders equity
during the year, for concepts other than distributions and activity in contributed common
stock, and is comprised of the net income (loss) of the year, plus other comprehensive
income (loss) items of the same period, which are presented directly in stockholders
equity without affecting the consolidated statements of operations. Other comprehensive
income (loss) items consist of the translation effects of foreign subsidiaries and, until
2007, the shortfall in restatement of capital and the additional minimum labor liability
adjustment.
 e)
    
    Classification of costs and expenses.- Costs and expenses presented in the
consolidated statements of operations were classified according to their function which
allows for the analysis of the Companys gross margin.
 f)
    
    Income from operations.- The Company continues to present operating income in
the statements of operations as it is an important financial indicator within the industry
and helps to evaluate the Companys performance. Operating income includes ordinary income
and cost of sales as well as operating costs. This presentation is comparable with the one
used in the consolidated financial statements as of December 31, 2007 and 2008.
  F-14




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##### Table of Contents



(Millions of Mexican pesos, except per share amounts)
 3.
    
    Summary of significant accounting policies
  a)
    
    Changes in accounting policies
  For Fiscal Year 2008
 
    
    NIF B-2, Statement of cash flows(NIF B-2)  Supersedes Bulletin B-12, Statement
of changes in financial position. NIF B-2 permits the presentation of such statement
using either the direct or the indirect method; the Company elected the indirect
method. The statement of cash flows is presented in nominal pesos. According to NIF
B-2, this standard should be recognized prospectively; consequently, the Company
presents a consolidated statement of cash flows for the years 2008 and 2009, and
consolidated statement of changes in financial position for 2007.
 
    
    NIF B-10, Effects of inflation(NIF B-10)  Considers two economic environments:
a) an inflationary environment, where cumulative inflation over a three-year period is
26% or more, in which case, the effects of inflation need to be recognized, and b)
non-inflationary environment, where inflation is less than 26% in the same period, in
which case, the effects of inflation may not be recognized in the financial
statements. Also, NIF B-10 eliminates the replacement cost and specific index
valuation methods and requires that the gain (loss) from monetary position in equity
and the cumulative gain (loss) from holding non-monetary assets be reclassified to
retained earnings, except for the gain (loss) from holding non-monetary assets that is
identified with inventories or fixed assets that have not been realized as of the
effective date of this standard. Such amounts should be maintained in stockholders
equity and realized within current earnings of the period in which such assets are
depreciated or sold. The Company determined it was impractical to identify the gain
(loss) from monetary position in equity and the cumulative gain (loss) from holding
non-monetary assets relating to unrealized assets as of January 1, 2008; therefore, on
that date, the Company reclassified the entire balance of shortfall in restatement of
capital of Ps. 21,154 to retained
earnings. NIF B-10 establishes that this accounting change be recognized prospectively.
  F-15




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##### Table of Contents



(Millions of Mexican pesos, except per share amounts)
 Since cumulative inflation over the three fiscal years prior to those ended December 31,
2008 and 2009 was 11.56% and 14.34%, respectively, the environment in which the Company
operates is no longer inflationary, and the Company discontinued recognition of the
effects of inflation in its financial statements beginning January 1, 2008. However,
assets, liabilities and stockholders equity at December 31, 2008 and 2009 include
restatement effects recognized through December 31, 2007.
    
    NIF D-3, Employee benefits(NIF D-3) Incorporates current and deferred statutory
employee profit sharing (PTU) as part of its provisions and establishes that deferred
PTU must be determined using the asset and liability method established in NIF D-4,
Income Taxes, instead of only considering temporary differences that arise in the
reconciliation between the accounting result and income for PTU purposes. This change
did not have effect in the Companys financial position.Additionally, as of December 31, 2008, NIF D-3 removed the recognition of the additional
minimum liability, which resulted in the elimination of Ps. 796, of which Ps. 338 was
related to the intangible labor obligation asset and Ps. 458 was related to the
additional minimum labor obligation in stockholders equity. Additionally, Ps. 42 and Ps.
38 were recognized in earnings for the years ended December 31, 2008 and 2009,
respectively, for unamortized items as of December 31, 2007.NIF D-3 also incorporates the career salary concept in the actuarial calculation and
limits the amortization period of the following items to the lesser of five years or the
employees remaining labor life:
 (i)
    
    The beginning balance of the transition liability for
termination and retirement benefits.(ii)
    
    The beginning balance of prior service costs and plan
modifications.(iii)
    
    The beginning balance of actuarial gains and losses
from retirement benefits.
 
    
    NIF D-4, Income taxes(NIF D-4) Eliminated the permanent difference concept;
clarifies and incorporate certain definitions, and required that the balance of the
initial cumulative effect of deferred income taxes of Ps. 1,810 be reclassified to
retained earnings.
  F-16




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##### Table of Contents



(Millions of Mexican pesos, except per share amounts)
 
 For Fiscal Year 2009
 
    
    NIF B-8, Consolidated or combined financial statements Establishes that special
purpose entities, over which control is exercised, should be consolidated. Provided
certain requirements are met, it allows the option to present stand-alone financial
statements of intermediate controlling companies and requires that potential voting
rights be considered to analyze whether control exists.As a result of the analysis performed due to the requirements noted above, the special
purposes entities that hold accounts receivable related to the Companys securitization
transactions are now included within the consolidated financial statements (see note 10).
The condensed amounts and the effect on the balance sheet as of December 31, 2008
resulting from the retrospective application of the standard, as well as comparative
presentation as of December 31, 2009 is as follows:
 December
    
    
    
    
    
    
    December31, 2008
    
    
    Debit
    
    
    31, 2008
    
    
    DecemberAs Presented
    
    
    (Credit)
    
    
    As Restated
    
    
    31, 2009Other receivables
    
    Ps.
    1,255
    
    
    Ps.
    230
    *
    
    Ps.
    1,485
    
    
    Ps.
    90Trade receivables
    
    
    1,492
    
    
    
    2,809
    
    
    
    4,301
    
    
    
    1,058Retained undivided
interests in
securitized
receivables
    
    
    1,213
    
    
    
    (1,213
    )Short-term borrowings
    
    
    (1,601
    )
    
    
    (708
    )
    
    
    (2,309
    )
    
    
    (845
    )Interests payable
    
    
    (728
    )
    
    
    (7
    )
    
    
    (735
    )
    
    
    (3
    )Long-term debt
    
    
    (1,755
    )
    
    
    (1,111
    )
    
    
    (2,866
    )
    
    
    (300
    )
 *
    
    Represents restricted cash presented in other accounts receivable. 
    
    NIF C-8, Intangible assets Establishes the following significant
amendments:
 (i)
    
    The intangible asset concept is redefined, establishing that the separability
condition is not the only condition needed to be identified.(ii)
    
    Establishes that the acquisition cost must be considered in the initial
valuation, identifying the cases of an individual business acquisition or internally
arising business, and requiring that it be probable that future economic benefits must
flow to the entity.
  F-17




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##### Table of Contents



(Millions of Mexican pesos, except per share amounts)
 (iii)
    
    Establishes that subsequent disbursements on research and development
projects in progress must be recognized as expenses when accrued, if they are
part of the research phase, or, as an intangible asset, if they meet the criteria to
be recognized as such.(iv)
    
    The assumption that an intangible asset could not exceed its useful life of
twenty years was eliminated.
  
    
    NIF D-8 Share-based payments Eliminates the supplemental condition of
International Financial Reporting Standard (IFRS) No. 2, Share-based payments, and
establishes the same recognition requirements for share-based payment arrangements.
The adoption of this new NIF did not impact the Companys financial position or
results of operations, as the Company adopted the requirements of IFRS 2 as of its
effective date.
 b)
    
    Changes in accounting estimatesDue to the sale of certain plots of land of its subsidiaries in December 2009, the Company
revised the estimated useful life of the assets built on such land to a maximum of 15
years, which is equivalent to the term in the lease agreement for such plots of land. The
Company recognized the change in estimate prospectively, which impacted current period
earnings by Ps. 26.c)
    
    Recognition of the effects of inflationAs mentioned in a) above, beginning January 1, 2008, the Company discontinued the
recognition of the effects of inflation. Until December 31, 2007, the Company recognized
effects of inflation by adjusting its financial statements in terms of pesos with the
purchasing power of the date the balance sheets was presented.Vitros Mexican subsidiaries previously used the Indice Nacional de Precios al Consumidor
(Mexican National Consumer Price Index, or NCPI), published by Banco de Mexico to restate
the financial statements. For Vitros foreign subsidiaries the Consumer Price Index  All
Urban Consumers  All Items, Unadjusted (CPI) published by the US Labor Department was
previously used to restate the financial statements, and the restated financial statements
were translated into Mexican pesos using the applicable exchange rate at the end of the
last period presented, except in the case of the Companys subsidiaries located in Spain
for which it applied the Price Consumption Index (PCI), published by the National Institute
of Statistics of Spain before translation into Mexican pesos using the exchange rate of the
Euro of the last period presented.
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(Millions of Mexican pesos, except per share amounts)
 
  
    
    Shortfall in restatement of capital This item, which is an element of
stockholders equity, represents the accumulated effect of holding nonmonetary assets
and the effect of the initial monetary position gain or loss. The cumulative effect of
holding nonmonetary assets represents the increase between the specific values of
nonmonetary assets in excess of or below the increase attributable to general
inflation.
    
    Monetary position result Monetary position result reflects the result of
holding monetary assets and liabilities during periods of inflation. Values stated in
current monetary units decrease in purchasing power over time. This means that losses
are incurred by holding monetary assets, whereas gains are realized by maintaining
monetary liabilities. The net effect is presented in the statements of operations as
part of the total comprehensive financing result. For foreign subsidiaries the result
from monetary position is calculated using the CPI, except in the case of the
Companys subsidiaries located in Spain for which it applies the PCI.Inflation rates in Mexico for the years ended December 31, 2007, 2008 and 2009, based on
the NCPI, are 3.76%, 6.53% and 3.57%, respectively.
 d)
    
    Cash and cash equivalentsConsist mainly of bank deposits in checking accounts and readily available investments of
highly liquid short-term investments. They are valued at the lower of acquisition cost plus
accrued yields or estimated net realizable value and are recognized in results of
operations as they accrue.e)
    
    Investments in securitiesAccording to its intent, from the date of acquisition, the Company classifies its
investments in securities instruments in any of the following categories: (1) trading, when
the Company intends to trade debt and equity instruments in the short-term, before their
maturity, if any. These investments are stated at fair value; any fluctuations in the value
of these investments are recognized in current earnings; (2) held-to-maturity, when the
Company intends to and is financially capable of holding financial instruments until their
maturity. These investments are recognized and maintained at amortized cost; and (3)
available-for-sale, investments that include those that are classified neither as trading
nor held-to-maturity. These
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(Millions of Mexican pesos, except per share amounts)
 investments are stated at fair value; any unrealized gains and
losses resulting from valuation, net of
 income tax, are recorded as a component of other comprehensive income within stockholders
equity and reclassified to current earnings upon their sale or maturity. The monetary
position resulting from the effects of inflation on available-for-sale investment is
recorded as a component of other comprehensive income. Fair value is determined using
prices quoted in recognized markets. If such instruments are not traded, fair value is
determined by applying recognized technical valuation models.Investments in securities classified as held-to-maturity and available-for-sale are subject
to impairment tests. If there is evidence that the reduction in fair value is other than
temporary, the impairment is recognized in current earnings.Financial liabilities derived from the issuance of debt instruments are recorded at the
value of the obligations they represent. Any expenses, premiums and discounts related to
the issuance of debt financial instruments are amortized over the life of the instruments.f)
    
    Derivative financial instrumentsIn addition to market, credit and liquidity risks, the Company is exposed to risks such as:
natural gas prices, interest rates and foreign exchange currency fluctuations between the
peso/US dollar and peso/euro.The Company has a policy for its derivative financial instruments (DFI) operations, which
sets forth the guidelines for the analysis, negotiation, authorization, contracting,
operating, monitoring and recording DFI, in order to analyze the risk exposure to financial
markets, commodities and fluctuations in the economic and financial variables.For the risk strategies and the surveillance regarding the compliance of the chosen risk,
there is a Risk Committee which acts in compliance with the policy, and which is comprised
by various Company officials.The Company states all derivatives at fair value in the balance sheet, regardless of the
purpose for holding them. The recognition of the changes in the fair value of derivative
instruments that are designated as a hedge for accounting purposes depends on if they are
fair value hedges or cash flow hedges.
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##### Table of Contents



(Millions of Mexican pesos, except per share amounts)
 Fair value is determined using prices quoted in recognized markets. If such instruments
are not traded, fair value is determined by applying recognized technical valuation models.When derivatives are entered into to hedge risks, and such derivatives meet all hedging
requirements, their designation is documented describing the transactions objective,
characteristics, accounting treatment and how the ineffectiveness of the instrument will be
measured.Changes in the fair value of derivative instruments designated as hedges for accounting
purposes are recognized as follows: (1) for fair value hedges, changes in both the
derivative instrument and the hedged item are recognized in current earnings; (2) for cash
flow hedges, changes in the derivative instrument are temporarily recognized as a component
of other comprehensive income and then reclassified to current earnings when affected by
the hedged item. Any ineffective portion of the change in fair value is immediately
recognized in current earnings, within total comprehensive financing result.The Companys derivative financial instruments have not been designated as hedges for
accounting purposes. Changes in fair value of such derivative instruments are recognized in
current earnings as a component of total comprehensive financing result.The Company reviews all contracts entered into to identify embedded derivatives that should
be segregated from the host contract for purposes of valuation and recognition. When an
embedded derivative is identified and the host contract has not been stated at fair value
and adequate elements for its valuation exist, the embedded derivative is segregated from
the host contract and stated at fair value. Initial valuation and changes in the fair value
of the embedded derivatives at the closing of each period are recognized in current
earnings.g)
    
    Inventories and cost of salesInventories are stated at the average purchase price or at the average production price,
without exceeding net realizable value. Cost of sales is determined by applying such
average amounts when the inventories are utilized or sold at the time of the sale. Through
December 31, 2007, cost of sales was previously restated using replacement cost or the
latest production cost at the time of the sale.h)
    
    Investment in associated companyInvestment in associated company in which the Company holds 49.7% of its capital stock is
valued using the equity method of accounting.
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(Millions of Mexican pesos, except per share amounts)
 i)
    
    Land, buildings, machinery and equipmentExpenditures for land, buildings, machinery and equipment, including major maintenance
activities and improvements that extend useful lives, are capitalized and beginning on
January 1, 2008, are recorded at acquisition cost. Balances arising from acquisitions made
through December 31, 2007 were restated for the effects of inflation by applying factors
derived from the NCPI through that date. The initial balance to apply the NCPI was the net
replacement value of the Companys long-lived asset as of December 31, 1996. For machinery
and equipment purchased in a foreign country, the restatement was based on the inflation
index mentioned above and the exchange rate at the end of each period.Beginning on January 1, 2007, the carrying value of qualifying assets includes the
capitalization of total comprehensive financing result (CFR).Depreciation is calculated using the straight-line method based on the remaining estimated
useful lives of the related assets. Depreciation begins in the month in which the asset is
placed in service. The estimated useful lives of the assets are as follows:
 YearsBuildings
    
    
    15 to 50Machinery and equipment
    
    
    3 to 30
  j)
    
    Other assetsOther assets primarily include debt issuance costs and the capitalized software costs. They
are recorded at acquisition value and, until December 31, 2007, were restated using factors
derived from the NCPI. The debt issuance costs are amortized over the term of the related
financial liability and capitalized software is amortized over a period of 80 months, which
is its expected useful life.k)
    
    Impairment of long-lived assets in useThe Company reviews the carrying amounts of long-lived assets in use when an impairment
indicator suggests that such amounts might not be recoverable, considering the greater of
the present value of future net cash flows or the net sales price. Impairment is recorded
when the carrying amounts exceed the greater of the amounts mentioned above. The impairment
indicators considered for these purposes are, among others, the operating losses or
negative cash flows in the period if they are combined with a history or projection of
losses, depreciation and amortization
charged to results, which in percentage terms in relation to revenues are substantially
higher than that of previous years, obsolescence, reduction in the demand for the products
manufactured, competition and other legal and economic factors.
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(Millions of Mexican pesos, except per share amounts)
 l)
    
    ProvisionsProvisions are recognized for current obligations that result from a past event, that are
probable to result in the use of economic resources, and can be reasonably estimated.m)
    
    GoodwillGoodwill represents the excess of cost over fair value of subsidiaries as of the date of
acquisition and at least once a year is subject to impairment tests. Through December 31,
2007 it was restated using the NCPI. The Company recognizes goodwill corresponding to the
controlling interest and beginning in 2009, the noncontrolling interest.n)
    
    Employee benefitsDirect employee benefits are calculated based on the services rendered by employees,
considering their most recent salaries. The liability is recognized as it accrues.Seniority premiums, pension plans and severance payments are recognized as costs over the
expected service period of employees and are calculated by independent actuaries using the
projected unit credit method, using nominal interest rates beginning in 2008 and real
(inflation-adjusted) interest rates through 2007.o)
    
    Share-based payment plansThe Company has historically utilized equity incentive plans that permit the Company to
grant stock options and nonvested shares (equity awards) to certain employees and directors
of the Company. The Company recognizes the fair value of equity awards computed at the
awards grant date over the period in which the requisite service is rendered.p)
    
    Foreign currency balances and transactionsForeign currency transactions are recorded at the applicable exchange rate in effect at the
transaction date. Monetary assets and liabilities denominated in foreign currency are
translated into Mexican pesos at the applicable exchange rate in effect at the balance
sheet date. Exchange fluctuations are recorded as a component of net comprehensive
financing cost in the consolidated statements of operations.
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##### Table of Contents



(Millions of Mexican pesos, except per share amounts)
 q)
    
    Revenue recognitionRevenues and related costs are recognized in the period in which risks and rewards of
ownership of the inventories are transferred to customers, which generally coincides with
the shipment of products to customers in satisfaction of orders.r)
    
    Statutory employee profit sharing (PTU)Statutory employee profit sharing is recorded in the results of the year in which it is
incurred and presented under other income and expenses in the accompanying consolidated
statement of operations. Beginning in 2008 deferred PTU is derived from temporary
differences that resulted from comparing the accounting and tax basis of assets and
liabilities and, through 2007, resulted from comparing the accounting result and income for
PTU purposes. Deferred PTU is recognized only when it can be reasonably assumed that such
difference will generate a liability or benefit, and there is no indication that
circumstances will change in such a way that the liabilities will not be paid or benefits
will not be realized.s)
    
    Income taxesIncome taxes, which calculated as the higher of regular income tax (ISR) or the Business
Flat Tax (IETU) are recorded in the results of the year they are incurred. To recognize
deferred income taxes, based on its financial projections, the Company determines whether
it expects to incur ISR or IETU and accordingly recognizes deferred taxes based on the tax
it expects to pay. Deferred taxes are calculated by applying the corresponding tax rate to
the applicable temporary differences resulting from comparing the accounting and tax bases
of assets and liabilities and including, if any, future benefits from tax loss
carryforwards and certain tax credits. Deferred tax assets are recorded only when there is
a high probability of recovery.Tax on assets (IMPAC), prevailing until 2007, that were expected to be recoverable are
recorded as an advance payment of ISR and presented in the balance sheet increasing the
deferred ISR asset.t)
    
    Earnings (loss) per shareBasic earnings (loss) per common share are calculated by dividing consolidated net income
(loss) for the controlling interest by the weighted average number of shares outstanding
during the year. Diluted earnings per share are determined by adjusting consolidated net
income and common shares on the assumption that the entitys commitments to issue or
exchange its own shares would be realized. Diluted earnings per share is not presented for
periods in which the effect of including common stock equivalents is anti-dilutive or
periods in which the Company records a net loss from
continuing operations as was the case in 2008 and 2009. In 2007 diluted earnings
per share was not presented as it is the same as basic earnings per share.
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##### Table of Contents



(Millions of Mexican pesos, except per share amounts)
 u)
    
    Foreign subsidiaries as economic hedgesThe Companys management designated some liabilities as economic hedges of their foreign
subsidiaries. The resulting exchange rate fluctuation is presented in the shortfall in
restatement of capital within stockholders equity to the extent the net investment in the
foreign subsidiary covers the investment. Through December 31, 2007, the result from
monetary position is measured using inflation factors from the designated subsidiarys
country of origin. The effect related to this hedge for 2007, 2008 and 2009 was a net
(loss) gain to comprehensive income, net of income tax, of Ps. (16), Ps. (601) and Ps. 118,
respectively.
 4.
    
    Trade receivable
 a)
    
    Trade receivablesTrade receivables are summarized as follows:
 December 31,2008
    
    
    2009Trade receivables(1)
    
    Ps.
    4,713
    
    
    Ps.
    3,571Allowance for doubtful accounts and other discounts
    
    
    (412
    )
    
    
    (370
    )Ps.
    4,301
    
    
    Ps.
    3,201
 (1)
    
    Trade receivables include balances of Ps. 2,850 and Ps. 1,609 as of December
31, 2008 and 2009, respectively, which serve as collateral as part of the Companys
accounts receivable securitization facilities. Although the related trusts in which they
are held are included in the Companys consolidated financial statements, they are legally
independent (see Note 3 a). b)
    
    Other receivables:Other receivables include Ps. 298 and Ps. 218 of restricted cash as of December 31, 2008
and 2009, respectively. This amount includes Ps. 230 and Ps. 90 from the Companys account
receivable securitization facilities.
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##### Table of Contents



(Millions of Mexican pesos, except per share amounts)
 5.
    
    Inventories
  December 31,2008
    
    
    2009Semi-finished and finished products
    
    Ps.
    2,892
    
    
    Ps.
    2,120Raw materials
    
    
    699
    
    
    
    474Packaging materials
    
    
    86
    
    
    
    74Spare parts
    
    
    296
    
    
    
    243Refractory
    
    
    85
    
    
    
    94Merchandise in transit and other
    
    
    241
    
    
    
    3184,299
    
    
    
    3,323Less allowance for obsolescence and slow moving parts
    
    
    121
    
    
    
    151Ps.
    4,178
    
    
    Ps.
    3,172
  6.
    
    Land, buildings, machinery and equipment
 a)
    
    Land, buildings, machinery and equipment are summarized as follows:
 December 31,2008
    
    
    2009Land
    
    Ps.
    3,278
    
    
    Ps.
    2,351Buildings
    
    
    10,801
    
    
    
    10,589Less: Accumulated depreciation
    
    
    6,028
    
    
    
    6,166Ps.
    8,051
    
    
    Ps.
    6,774Machinery and equipment
    
    Ps.
    24,734
    
    
    Ps.
    25,399Less: Accumulated depreciation
    
    
    16,844
    
    
    
    17,398Ps.
    7,890
    
    
    Ps.
    8,001
 b)
    
    In 2007, 2008 and 2009, the Company capitalized CFR of Ps. 10, Ps. 474 and Ps. 3
respectively, directly attributable to the acquisition of qualifying assets.
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##### Table of Contents



(Millions of Mexican pesos, except per share amounts)
 c)
    
    Sale of real estateIn December 2006, Vitro sold real estate located in Mexico City for US$100 million, 80%
payable on the date of sale and the remainder payable on the delivery date of the property.Vitro guaranteed up to US$80 million in favor of the purchaser payable in the event that
the property was not delivered to the purchaser prior to December 2009. As of December 31,
2008, the Company fulfilled all the requirements demanded under the contract. In 2009 the
Company received US$5 million and as of the issuance date of these consolidated financial
statements is seeking legal remedies for payment of the remaining amount (see note 23 e).On December 15, 2009, the Company sold, through a trust, seven real estate properties, on
which some of its manufacturing facilities are located, receiving US$75 million in the
transaction, and has entered into a 15-year lease agreement that allows the Company to
continue using such assets. The Company has the right to repurchase the title to these real
estate assets in exchange for US$126 million in cash.Additionally, subject to the occurrence of uncertain future events, the buyer of such
properties may exercise an option obtained on the same date requiring the Company to obtain
the rights over the trust, and to deliver its own shares and/or a sub-holding subsidiarys
common shares. The option related to the representative shares of the Companys
stockholders equity, would be from the shares that are currently held by the Pension and
Stock Option Trusts and the remainder to complete US$75 million would be fulfilled with the
delivery of a percentage of the sub-holding subsidiarys shares, both valued under the
terms included in the agreement. The Company has the option to repurchase the sub-holding
subsidiarys shares during the next three years following their delivery.d)
    
    Fixed assets contributed to a trustIn November 2008, the Company, through one of its subsidiaries, contributed non-productive
real estate assets with a book value of Ps. 1,875 as of December 31, 2008 to a trust
created for the sole purpose to sell such assets, if necessary, in order to generate the
necessary resources to pay off the principal from a US$100 million line of credit obtained
from a financial institution. As of December 31, 2008 and 2009, the proceeds drawn against
the loan were US$85 million and US$68 million, respectively (see note 23 f).
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(Millions of Mexican pesos, except per share amounts)
 7.
    
    Other assets
  8.
    
    Derivative financial instruments
   Fair ValueOpen derivative financial
    
    Notional
    
    
    
    
    
    
    Assetinstruments
    
    MMBTUs*
    
    
    Period
    
    
    (liability)Natural gas swaps with Pemex
    
    
    8,640,000
    **
    
    
    2010  2011
    **
    
    Ps.
    (191
    )Embedded derivatives identified in supply
contracts(1)
    
    
    
    
    
    
    
    
    
    
    2Total open derivative financial instruments
    
    
    
    
    
    
    
    
    
    Ps.
    (189
    )
 *
    
    Million British Thermal Units.**
    
    As of December 31, 2009, the Company has hedges for approximately 32% of its estimated
consumption at an average price of approximately US$6.80 per MMBTU for 2010 and 19% of its
estimated consumption at an average price of approximately US$7.32 per MMBTU for 2011.(1)
    
    Included in other receivables   F-28




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(Millions of Mexican pesos, except per share amounts)
  :
 Summary of unwound derivative financial
    
    Value of unwound positionsinstruments
    
    (liability)Natural gas contracts
    
    Ps.
    (2,825
    )Foreign exchange options
    
    
    (1,556
    )Interest rate options
    
    
    133Total unwound derivative financial instruments
    
    
    (4,248
    )Cash deposited as collateral
    
    
    1,111Total unwound derivative financial instruments, net
    
    Ps.
    (3,137
    )
     9.
    
    Short-term borrowings
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(Millions of Mexican pesos, except per share amounts)
 10.
    
    Long-term debt
  December 31,2008
    
    
    2009I. Foreign Subsidiaries (payable in US dollars):Unsecured debt, floating interest rate based on Fixed
Term Deposits (DTF) plus a spread of 6%, principal
payable in several installments through 2013
    
    Ps.
    13
    
    
    Ps.
    11Capital lease, with fixed interest rate ranging between
6% and 7.67%, maturing in several installments through
2012
    
    
    12
    
    
    
    44II. Foreign Subsidiaries (payable in euros):Unsecured debt, interest rate based on EURIBOR plus a
margin ranging from 1.10% to 1.25%, with different
maturity dates up to 2014
    
    
    57
    
    
    
    44Capital leases, floating interest rate based on EURIBOR,
plus a margin ranging from 0.625% to 1.25%, with
different maturity dates up to 2014
    
    
    40
    
    
    
    37Fixed interest rate capital leases ranging from 0.84% to
3.84%, with different maturity dates up to 2010
    
    
    11
    
    
    
    2III. Vitro and Mexican Subsidiaries (payable in US dollars):11.75% Guaranteed senior unsecured notes due in
2013(1)
    
    
    2,976
    
    
    
    2,8118.625% Guaranteed senior unsecured notes due in
2012(1)
    
    
    4,120
    
    
    
    3,8989.125% Guaranteed senior unsecured notes due in
2017(1)
    
    
    9,593
    
    
    
    9,062Secured debt with fixed interest rate of 7.86%, maturing
in several installments through 2011 (see note 6 d)
    
    
    1,178
    
    
    
    892Capital lease with fixed interest rate of 10.7494%,
maturing in several installments through 2016
    
    
    92
    
    
    
    79
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(Millions of Mexican pesos, except per share amounts)
 December 31,2008
    
    
    2009Unsecured debt, floating interest rate based on LIBOR
plus 8%, maturing in several installments through 2014
    
    
    
    
    
    
    392Secured borrowing related to the glass container
businesses securitization transactions, guaranteed by
trade receivables, fixed interest rate of 10.75%,maturing
in 2010
    
    
    263Secured borrowing related to the flat glass businesses
securitization transactions, guaranteed by trade
receivables, fixed interest rate of 6.5%, maturing in
2010
    
    
    298IV. Vitro and Mexican Subsidiaries (payable in Mexican pesos):Unsecured medium-term notes, floating interest rate based
on 182- day Mexican treasury bonds (CETES) plus a spread
of 3.25%, payable in 2009
    
    
    150
    
    
    
    150Unsecured medium-term notes, floating interest based on
TIIE plus a spread of 2.50%, and maturing in 2011
    
    
    400
    
    
    
    400Secured debt, floating interest rate based on TIIE plus a
4% spread, maturing in several installments through 2014
    
    
    
    
    
    
    299Secured borrowing related to the glass container
businesses securitization transactions, guaranteed by
trade receivables, variable interest rate based
on TIIE plus a 4% spread, maturing in
2010
    
    
    550Secured borrowing related to the flat glass businesses
securitization transactions, guaranteed by trade
receivables, variable interest rate based on TIIE plus a
4% spread, maturing in 2014
    
    
    
    
    
    
    300Total long-term debt
    
    
    19,753
    
    
    
    18,421Less current maturities
    
    
    198
    
    
    
    746Less reclassification of long-term debt(1)
    
    
    16,689
    
    
    
    15,771Long-term debt, excluding current maturities of long-term
debt
    
    Ps.
    2,866
    
    
    Ps.
    1,904
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(Millions of Mexican pesos, except per share amounts)
 (1)
    
    As of December 31, 2008 and 2009, the Company was in default under the
indentures governing the Senior Notes due 2012, 2013 and 2017 for US$300 million, US$216
million and US$700 million, respectively; therefore, Ps. 16,689 and Ps. 15,771, respectively,
were reclassified as short-term. As a result, as of December 31, 2008, other contracts of
approximately US$81 million with maturity in 2009, entered into default, of which US$52
million were refinanced.   Year ending December 31,2011
    
    Ps.
    8642012
    
    
    1422013
    
    
    1392014
    
    
    7522015 and thereafter
    
    
    7Ps.
    1,904
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(Millions of Mexican pesos, except per share amounts)
  11.
    
    Employee benefits
 a)
    
    The Company has a defined benefit pension plan that covers all its personnel, which consists
of a lump sum payment or a monthly pension calculated based on the aggregate of a basic
pension, an additional seniority pension and an additional pension for equal or less earnings
than the ceiling used for the Mexican Social Security Institute.The retirement ages are as follows:
 
    
    Normal.  Personnel that are 65 years old with 20 or more years of service.
    
    Advanced.  Personnel that are 60 years old with a minimum of 20 or more years of
service, reducing the pension by a percentage point each year before reaching 65 years
of age.
    
    Early.  Personnel that are 50 years old with 10 or more years of service, reducing
the pension by a percentage according to the age at the moment of retirement.
    
    Aggregate of 100.  With the approval of the Technical Committee, personnel whose
aggregate age and years of service is 100.
    
    Deferred.  Personnel who do not accept retirement upon becoming 65 years old lose
all the rights to receive a pension from the plan.
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##### Table of Contents



(Millions of Mexican pesos, except per share amounts)
 b)
    
    The present values of these obligations and the rates used for the calculations are:
 December 31,2008
    
    
    2009Vested benefit obligation
    
    Ps.
    2,514
    
    
    Ps.
    3,052Nonvested benefit obligation
    
    
    486
    
    
    
    446Defined benefit obligation
    
    
    3,000
    
    
    
    3,498Plan assets at fair value
    
    
    (684
    )
    
    
    (1,140
    )Unfunded status
    
    
    2,316
    
    
    
    2,358Unrecognized items:Prior service costs and plan amendments
    
    
    (222
    )
    
    
    (163
    )Unrecognized transition obligation
    
    
    (138
    )
    
    
    (125
    )Unrecognized actuarial gains and losses
    
    
    (1,495
    )
    
    
    (2,004
    )Projected net liability
    
    Ps.
    461
    
    
    Ps.
    66
   December 31,2008
    
    
    2009Discount rate
    
    
    10.25
    %
    
    
    9.50
    %Expected rate of return on plan assets
    
    
    12.25
    %
    
    
    10.50
    %Rate of compensation increase
    
    
    3.50
    %
    
    
    3.50
    %
 c)
    
    Net periodic cost consists of:
 Year ended December 31,2007
    
    
    2008
    
    
    2009Service cost
    
    Ps.
    96
    
    
    Ps.
    143
    
    
    Ps.
    81Interest cost
    
    
    149
    
    
    
    268
    
    
    
    287Amortization of unrecognized prior service costs
    
    
    56
    
    
    
    72
    
    
    
    68Actuarial gains and losses
    
    
    48
    
    
    
    177
    
    
    
    91Effect of reduction and early liquidation
    
    
    97Expected yield on plan assets
    
    
    (88
    )
    
    
    (166
    )
    
    
    (82
    )Net periodic cost
    
    Ps.
    358
    
    
    Ps.
    494
    
    
    Ps.
    445
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(Millions of Mexican pesos, except per share amounts)
  d)
    
    Changes in present value of the defined benefit obligation:
 Year endedDecember 312008
    
    
    2009Present value of the defined benefit obligation as of January 1
    
    Ps.
    3,319
    
    
    Ps.
    3,000Service cost
    
    
    143
    
    
    
    81Interest cost
    
    
    268
    
    
    
    287Benefits paid
    
    
    (526
    )
    
    
    (431
    )Actuarial (gain) loss
    
    
    (112
    )
    
    
    561Deconsolidation of Comegua
    
    
    (92
    )Present value of the defined benefit obligation as of December 31
    
    Ps.
    3,000
    
    
    Ps.
    3,498
 e)
    
    Changes in fair value of plan assets:
 Year ended December 31,2008
    
    
    2009Fair value of plan assets as of January 1
    
    Ps.
    1,548
    
    
    Ps.
    684Expected return
    
    
    166
    
    
    
    82Actuarial losses
    
    
    (912
    )
    
    
    (39
    )Contributions made by the Company
    
    
    140
    
    
    
    774Benefits paid
    
    
    (258
    )
    
    
    (361
    )Fair value of plan assets as of December 31
    
    Ps.
    684
    
    
    Ps.
    1,140
  Expected Yield
    
    
    Actual YieldCapital instruments (Vitro A shares)
    
    
    13.00
    %
    
    
    3.00
    %Other
    
    
    8.67
    %
    
    
    4.42
    %
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(Millions of Mexican pesos, except per share amounts)
 12.
    
    Commitments and contingencies
 a)
    
    In October 2000, several subsidiaries of Vitro, which have facilities throughout
Monterrey, Mexico and the Mexico City area, entered into a 15-year energy purchase
agreement for approximately 90 Megawatts of electricity and 1.3 million tons of steam per
year with Tractebel Energía de Monterrey, S. de R.L. de C.V.
 b)
    
    The Company has several non-cancelable operating lease agreements for the rent of
warehouses and equipment. Rental expense for the years ended December 31, 2007, 2008 and
2009 was Ps. 541, Ps. 646 and Ps. 794, respectively.
  2010
    
    Ps.
    8612011
    
    
    8092012
    
    
    7142013
    
    
    6642014
    
    
    6202015 and thereafter
    
    
    626
 c)
    
    As part of the disposal of Anchor Glass Containers Corporation (Anchor) in August
1996, in a transaction approved by the U.S. Bankruptcy Court, the Company entered into a
term sheet which contemplated an agreement pursuant to which the Company would provide to
the Pension Benefit Guaranty Corporation (PBGC), a United States governmental agency that
guarantees pensions, a limited guaranty of Anchors unfunded pension liability. No
payments would be made under such a guaranty unless the PBGC terminated any of the covered
pension plans, and the guaranty would be payable only to the extent the PBGC could not
otherwise recover the unfunded liabilities from the entity that purchased Anchors assets
New Anchor. The amount of the guaranty was originally limited to US$70 million. Under the
guaranty, payments would not begin until August 1, 2002, and would then generally be
payable in equal semi-annual installments over the following 10 years. Payments would not
bear interest. The amount and the term of the guaranty would be proportionately reduced if
the pension plans were terminated after January 31, 2002. Beginning February 2002, the
guaranty would be reduced by US$7 million semiannually until August 1, 2006, when the
guaranty would expire if the plans did not terminate.On April 15, 2002, New Anchor filed a pre-negotiated plan of reorganization under Chapter
11 of the U.S. Bankruptcy Code. On August 8, 2002, an amended plan of reorganization was
confirmed, pursuant to which the plan resulting from the merger of the covered pension
plans was terminated, and the obligations thereunder were
assumed by the PBGC in exchange for cash, securities and a commitment of reorganized New
Anchor to make certain future payments.
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##### Table of Contents



(Millions of Mexican pesos, except per share amounts)
 On June 20, 2003, the PBGC wrote to the Company, asserting that the plan had been
terminated effective as of July 31, 2002, with an estimated unfunded liability of US$219
million. The PBGC stated that the value of the recovery from New Anchor and reorganized New
Anchor amounts to no more than US$122.25 million; it alleged that the recovery that it
secured in the bankruptcy was insufficient and that an underfunding in excess of the
Companys limited guaranty had occurred. Accordingly, to such letter, the PBGC demanded
payments pursuant to the term sheet of US$7 million on or before August 1, 2003 and of US$3.5 million semiannually through August 1, 2011. The Company intends to contest this
liability. There are various issues concerning such demand and certain defenses that may be
asserted by the Company. Management is currently evaluating these issues and defenses. At
this point, it is not possible to reasonably estimate the amounts that will ultimately be
payable in response to such demand. When management is able to reasonably estimate those
amounts, the Company will establish an appropriate accounting reserve. As of this date, the
Company has not established any reserves in connection with such potential liability.d)
    
    On December 2006, Viméxico (formerly Vitro Plan) concluded at an extraordinary
shareholders meeting to approve the merger of Vitro Plan into Viméxico, which was a
creditor of Vitro Plan. As a result of the merger, all assets, rights, liabilities and
obligations of Vitro Plan were absorbed by Viméxico. Prior to the merger, Vitro Plan was a
direct 65%-owned subsidiary of Vitro and Pilkington Group LTD (Pilkington) owned the
remaining 35%. As a result of the merger, Viméxico became a 91.8%-owned subsidiary of
Vitro and Pilkington the owner of the remaining 8.2%.Although the merger became entirely effective once all the respective authorizations were
obtained and having prepared all the respective acts, publications and registrations,
Pilkington, who voted against such approval, began a legal procedure in January 2007
against the merger. In February 2008 in first instance, in June 2008 in second instance,
and finally in February 2009, the protection requested by Pilkington was denied. The
Company was notified that the opposing action exercised by Pilkington was declared
unprecedented in a final and unappealable sentence with respect to the resolutions approved
by the majority at the extraordinary general stockholders meeting in December 2006. Thus,
the foregoing resolutions were confirmed as valid and mandatory for all stockholders,
including those dissenting.
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(Millions of Mexican pesos, except per share amounts)
 However, in the first week of December 2007, the Company was notified of a new complaint
filed by Pilkington, claiming the annulment of such extraordinary general stockholders
meeting. This position goes against the claims sustained in the first trial and was filed
after Pilkington specifically desisted from this action after the first trial. Accordingly,
Vitro also expects to obtain a favorable resolution from this claim. In this
proceeding all evidence and allegations were submitted and the Company is awaiting the
final ruling.e)
    
    On June 23, 2008, the Company initiated litigation against Banamex, S.A., Institución
de Banca Múltiple, a subsidiary of Grupo Financiero Banamex, S.A. and Citigroup,
requesting the court to declare null and void the acquisition and ownership of any of
Vitros common shares due to a violation of its by-laws.According to the Companys by-laws, no foreign individual or legal entity or Mexican
company without a foreign exclusion clause may own or acquire Vitro shares. Such by-laws
also specify that in the event this restriction is violated, the holding or acquisition
shall be null, and the Company shall not recognize the acquirer as an owner, nor can the
latter exercise corporate or economic rights inherent to the shares. A cautionary measure was granted by the court_____to freeze the approximate 53.6
million shares that are subject to this procedure while the trial is resolved in a final
sentence, and the Securities Depository Institute (Indeval) has been requested to comply
with such measure, nonetheless it was not possible to implement.In January 2010 a district judge ruled in favor of Banamex. Vitro is contesting the
irregular purchase of these shares amounting to 14.9% of its common stock outstanding. The
Company has submitted its appeal in a timely and correct manner to this sentence issued by
a lower court.On August 18, 2010, the Appeals Court issued a resolution denying the recourse presented by
Vitro opposing the decision issued by the lower court. At this time, Vitro is preparing to
present a final appeal through an Amparo against the decision issued by the Appeals
Court.
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##### Table of Contents



(Millions of Mexican pesos, except per share amounts)
 13.
    
    Foreign currency operations
 a)
    
    At December 31, 2009, the foreign currency denominated assets and liabilities of the
Companys Mexican subsidiaries consist of the following:
 Millions ofdollars
    
    
    Mexican pesosMonetary assets
    
    US$
    227
    
    
    Ps.
    2,969Inventories
    
    
    16
    
    
    
    209Fixed assets
    
    
    194
    
    
    
    2,533Monetary liabilities
    
    
    1,817
    
    
    
    23,729
 b)
    
    Foreign currency operations of the Companys Mexican subsidiaries for the year ended
December 31, 2009, consisted of the following:
 Millions ofdollars
    
    
    Mexican pesosExports
    
    US$
    484
    
    
    Ps.
    6,568Imports
    
    
    183
    
    
    
    2,487Interest expense, net
    
    
    159
    
    
    
    2,158
 c)
    
    The condensed financial information of the principal foreign subsidiaries of the
Company at December 31, 2009, consisted of the following:
 CentralandUnited
    
    
    SouthStates
    
    
    America
    
    
    EuropeNet sales
    
    Ps.
    6,834
    
    
    Ps.
    624
    
    
    Ps.
    1,506Operating income (loss)
    
    
    (148
    )
    
    
    96
    
    
    
    (190
    )Total assets
    
    
    1,948
    
    
    
    718
    
    
    
    2,525Total liabilities
    
    
    875
    
    
    
    188
    
    
    
    1,317Capital expenditures
    
    
    82
    
    
    
    8
    
    
    
    10
 d)
    
    The exchange rates of the Mexican peso against the US dollar and the Euro, used for
purposes of the Companys consolidated financial statements at the following dates were:
 US dollar
    
    
    EuroDecember 31, 2007
    
    Ps.
    10.8662
    
    
    Ps.
    15.9526December 31, 2008
    
    
    13.8325
    
    
    
    19.2534December 31, 2009
    
    
    13.0587
    
    
    
    19.5789
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##### Table of Contents



(Millions of Mexican pesos, except per share amounts)
 14.
    
    Stockholders equity
 a)
    
    The capital stock of the Company consists of 386,857,143, ordinary, nominative, fully
paid common shares, without par value, at December 31, 2008 and 2009.
 b)
    
    The Company maintains an Employee Stock Option Plan established in March 1998 (the
Plan). The Plan specifies the amount of shares, time and initial exercise price. The
vesting period of the options is five years and the life of such options is 10 years.
  TotalOptions
    
    2000
    
    
    2001
    
    
    1998*
    
    
    2002
    
    
    OutstandingOptions granted
    
    
    4,851,900
    
    
    
    3,204,800
    
    
    
    940,950
    
    
    
    3,941,950Options cancelled or exercised at
December 31, 2009
    
    
    3,986,950
    
    
    
    2,827,950
    
    
    
    478,050
    
    
    
    3,208,150Options outstanding at December 31, 2009
    
    
    864,950
    
    
    
    376,850
    
    
    
    462,900
    
    
    
    733,800
    
    
    
    2,438,500Exercise price
    
    Ps.
    11.00
    
    
    Ps.
    8.27
    
    
    Ps.
    13.00
    
    
    Ps.
    7.53
 *
    
    During the year 2001, the Company modified the price of the 940,950 options
granted in 1998 and its maturity date to 2011.   c)
    
    At December 31, 2008 and 2009, the Company held 40,204,310 of treasury shares,
which includes 11,739,741 and 39,758,810 shares held by the Stock Option Trust (see note
14 b) at December 31, 2008 and 2009, respectively.
 d)
    
    Retained earnings include the statutory legal reserve. Mexican General Corporate
Law requires that at least 5% of net income of the year be transferred to the legal
reserve until the reserve equals 20% of capital stock at par value (historical pesos).
The legal reserve may be capitalized but may not be distributed unless the entity is
dissolved. The legal reserve must be replenished if it is reduced for any reason. At
December 31, 2008 and 2009, the legal reserve, in historical pesos, was Ps. 72.
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(Millions of Mexican pesos, except per share amounts)
 e)
    
    Stockholders equity, except restated paid-in capital and tax retained earnings,
will be subject to income tax at the rate in effect when a dividend is distributed. Any
tax paid on such distribution may be credited against annual and estimated income taxes
of the year in which the tax on dividends is paid and the following two fiscal years.At December 31, 2009, the majority interest stockholders equity tax account,
corresponding to the contributed capital account and the net tax income account was Ps.
2,513 and Ps. 2,375, respectively.
 f)
    
    Dividends declared and paid:
 Dividend AmountStockholders
    
    Nominal
    
    
    Restatedmeeting date
    
    Value
    
    
    Value
    
    
    Payment DateMarch 28, 2007
    
    Ps.
    133
    
    
    Ps.
    136
    *
    
    April 2007April 17, 2008
    
    
    143
    
    
    
    143
    
    
    May 2008
 *
    
    This amount is restated for inflationary effect until December 31, 2007.  g)
    
    Noncontrolling interest in consolidated subsidiaries consists of the following:
 December 312008
    
    
    2009Capital stock
    
    Ps.
    457
    
    
    Ps.
    443Paid in capital
    
    
    616
    
    
    
    736Translation effects of foreign subsidiaries
    
    
    235
    
    
    
    155Retained earnings
    
    
    96
    
    
    
    130Ps.
    1,404
    
    
    Ps.
    1,464
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(Millions of Mexican pesos, except per share amounts)
 h)
    
    Controlling interest consists of the following:
 December 31, 2009Value
    
    
    Restatement*
    
    
    ValueCapital stock
    
    Ps.
    387
    
    
    Ps.
    7,245
    
    
    Ps.
    7,632Treasury stock
    
    
    (223
    )
    
    
    (324
    )
    
    
    (547
    )Paid-in capital
    
    
    355
    
    
    
    1,290
    
    
    
    1,645Translation effects of foreign subsidiaries
    
    
    370
    
    
    
    
    
    
    
    370(Accumulated deficit) retained earnings
    
    
    (11,144
    )
    
    
    2,564
    
    
    
    (8,580
    )Ps.
    (10,255
    )
    
    Ps.
    10,775
    
    
    Ps.
    520
 *
    
    Amounts are restated for inflationary effect until December 31, 2007. 15.
    
    Total comprehensive financing result
  Year ended December 31,2007
    
    
    2008
    
    
    2009Interest expense on debt denominated in US dollars
    
    Ps.
    1,698
    
    
    Ps.
    1,703
    
    
    Ps.
    1,847Interest expense on debt denominated in pesos
    
    
    130
    
    
    
    157
    
    
    
    300Interest income
    
    
    (175
    )
    
    
    (58
    )
    
    
    (51
    )Derivative financial instruments
    
    
    201
    
    
    
    3,766
    
    
    
    570Exchange loss (gain)
    
    
    94
    
    
    
    3,222
    
    
    
    (976
    )Gain from monetary position
    
    
    (471
    )Other financing expenses, net
    
    
    183
    
    
    
    287
    
    
    
    676Ps.
    1,660
    
    
    Ps.
    9,077
    
    
    Ps.
    2,366
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(Millions of Mexican pesos, except per share amounts)
 16.
    
    Other expenses (income), net
  Yeard ended December 31,2007
    
    
    2008
    
    
    2009Restructuring charges
    
    Ps.
    7
    
    
    Ps.
    185
    
    
    Ps.
    265Impairment of long-lived assets
    
    
    122
    
    
    
    196
    
    
    
    207(Gain) loss from sale of long-lived
    
    
    47
    
    
    
    (3
    )
    
    
    (209
    )(Gain) loss from sale of subsidiaries
    
    
    11Early extinguishment of employee retirement obligations
    
    
    97
    
    
    
    69Fees and costs for extinguishment of debt
    
    
    488
    
    
    
    
    
    
    
    7Statutory employee profit sharing
    
    
    54
    
    
    
    10
    
    
    
    13Other
    
    
    43
    
    
    
    38
    
    
    
    8Ps.
    869
    
    
    Ps.
    495
    
    
    Ps.
    291
 17.
    
    Tax loss carryforwards
  Tax loss carryforwardsControlling
    
    
    NoncontrollingExpiration Year
    
    interest
    
    
    interest2010
    
    Ps.
    106
    
    
    Ps.
    42011
    
    
    280
    
    
    
    12012
    
    
    466
    
    
    
    12013
    
    
    1562014
    
    
    4212015
    
    
    1322016
    
    
    266
    
    
    
    12017
    
    
    1112018
    
    
    962
    
    
    
    592019
    
    
    1,601
    
    
    
    51Ps.
    4,501
    
    
    Ps.
    117
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(Millions of Mexican pesos, except per share amounts)
 18.
    
    Income and asset taxes
 a)
    
    In accordance with the Mexican tax law, the Company in 2008 and 2009 is subject to ISR
and IETU. Until 2007, the Company was subject to ISR and IMPAC.ISR.- The Company pays ISR, together with subsidiaries on a consolidated basis in proportion
to Vitros voting interest in its Mexican subsidiaries. The ISR rate is 28% for 2007, 2008
and 2009, and, based on changes to the ISR Law on December 7, 2009, will be 30% for 2010 to
2012, 29% for 2013 and 28% for 2014 and subsequent years.The foreign subsidiaries calculate their ISR based on the individual results of each
subsidiary pursuant to the specific tax regimes in each country.Within the amendments to the ISR Law of 2009, to become effective beginning in 2010, states
that: a) ISR relating to tax consolidation benefits obtained from 1999 through 2004 should be
paid in installments beginning in 2010 through 2015, and b) ISR relating to tax benefits
obtained in the 2005 tax consolidation and thereafter, should be paid during the sixth
through the tenth year after that in which the benefit was obtained. Payment of ISR in
connection with tax consolidation benefits obtained from 1982 (tax consolidation starting
year) through 1998 may be required in those cases provided by law.The effects in the financial information, resulting from the approval of changes to the ISR
Law related to the consolidation regime resulted in a decrease in shareholders equity within
retained earnings of $237, an increase of $564 in deferred tax assets and $85 in recoverable
taxes, and an increase in taxes payable of $886 (including $36 payable in the short term).IETU.- On January 1, 2008, the IETU went into effect. IETU applies to the sale of goods, the
provision of independent services and the granting of use or enjoyment of goods, according to
the terms of the IETU law, less certain authorized deductions. Revenues, as well as
deductions and certain tax credits, are determined based on cash flows generated beginning
January 1, 2008. The IETU law establishes that the IETU rate will be 16.5% in 2008, 17.0% in
2009, and 17.5% in 2010 and subsequently. Similarly, the IMPAC Law was repealed upon
enactment of the IETU Law, however, under certain circumstances, IMPAC paid in the ten years
prior to the year in which ISR is paid, may be refunded, according to the terms of the law.
In addition, as opposed to ISR which allows for fiscal consolidation, companies that expect
to incur IETU must file individual returns.
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##### Table of Contents



(Millions of Mexican pesos, except per share amounts)
 Based on its financial projections and according to INIF 8, Effects of the Business Flat Tax,
the Company determined that it will basically pay ISR. Therefore, it only recognizes deferred
ISR.IMPAC.- Through 2007, the Company paid tax on assets on a consolidated basis in proportion to
Vitros voting interest in its Mexican subsidiaries. In 2007, IMPAC was calculated by
applying 1.25% to the value of the assets of the year, without deducting any debt amounts.b)
    
    The income and asset tax expense (benefit) included in the Companys results are:
 Year ended December 31,2007
    
    
    2008
    
    
    2009Current
    
    Ps.
    395
    
    
    Ps.
    123
    
    
    Ps.
    (3
    )Deferred
    
    
    (145
    )
    
    
    (2,298
    )
    
    
    (595
    )250
    
    
    
    (2,175
    )
    
    
    (598
    )Asset tax
    
    
    (206
    )Ps.
    44
    
    
    Ps.
    (2,175
    )
    
    Ps.
    (598
    )
 c)
    
    Net deferred tax assets presented in the consolidated balance sheets consist of
the following:
 December 31,2008
    
    
    2009Allowance for doubtful accounts
    
    Ps.
    42
    
    
    Ps.
    125Reserve for employee benefits
    
    
    231
    
    
    
    286Tax loss carryforwards
    
    
    1,201
    
    
    
    2,550Intangible asset
    
    
    667
    
    
    
    700Fixed assets
    
    
    (18
    )
    
    
    (27
    )Derivative financial instruments
    
    
    1,441
    
    
    
    984Inventories
    
    
    35
    
    
    
    51Other
    
    
    407
    
    
    
    185Total
    
    
    4,006
    
    
    
    4,854Valuation allowance
    
    
    (599
    )
    
    
    (339
    )Ps.
    3,407
    
    
    Ps.
    4,515
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##### Table of Contents



(Millions of Mexican pesos, except per share amounts)
 December 31,2008
    
    
    2009Balance:Deferred tax assets
    
    Ps.
    3,418
    
    
    Ps.
    4,515Deferred tax liabilities
    
    
    (11
    )Ps.
    3,407
    
    
    Ps.
    4,515
 d)
    
    Following is a reconciliation between the Companys effective income tax rate and
the statutory rate:
 Year ended December 31,2007
    
    
    2008
    
    
    2009Effective income tax rate
    
    
    25
    %
    
    
    28
    %
    
    
    44
    %Asset tax presented as income tax
    
    
    120Intangible asset
    
    
    (28
    )
    
    
    (2
    )Sale of subsidiaries
    
    
    8Foreign subsidiaries
    
    
    (5
    )
    
    
    (3
    )
    
    
    (6
    )Effect of inflation
    
    
    (2
    )
    
    
    4
    
    
    
    7Effect of reduction in statutory
rate on deferred ISR
    
    
    
    
    
    
    
    
    
    
    (1
    )Valuation allowance
    
    
    (15
    )
    
    
    4
    
    
    
    (20
    )Nondeductible expenses
    
    
    (10
    )
    
    
    
    
    
    
    4Other
    
    
    (65
    )
    
    
    (3
    )Statutory income tax rate
    
    
    28
    %
    
    
    28
    %
    
    
    28
    %
 e)
    
    The deferred income tax effect, reduced from the movements in stockholders equity
for insufficiency in restated stockholders equity, the effect of cancelling preoperating
costs, the equity effect of the additional labor liability as well as from the exchange
loss capitalized in the translation effect of foreign subsidiaries is presented as
follows:
 Year ended December 31,2007
    
    
    2008
    
    
    2009Income tax effect of:Shortfall in restatement of capital:
    
    Ps.
    119Minimum labor liability
    
    
    (126
    )Effect of cancelling preoperating costs
    
    
    
    
    
    
    
    
    
    Ps.
    6Translation effects of foreign
subsidiaries
    
    
    
    
    
    Ps.
    234
    
    
    
    (44
    )Ps.
    (7
    )
    
    Ps.
    234
    
    
    Ps.
    (38
    )
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##### Table of Contents



(Millions of Mexican pesos, except per share amounts)
 19.
    
    Related party transactions
  a)
    
    Arrangements with respect to real estate.-On certain occasions, until October 2008,
the Company used real estate owned by relatives of certain directors and senior managers
to meet with customers, suppliers or for other business purposes. The Company paid an
annual fee for the right to use these properties for a specified number of days per year.
Additionally, it had agreed to pay maintenance and operating costs. In 2007 and 2008, the
aggregate amounts paid as annual fees were approximately Ps. 10, and Ps. 8, respectively.b)
    
    Goods sold.-The Company sells flat glass products and glass containers to certain
companies whose shareholders are directors and senior managers. In 2007, 2008 and 2009,
the aggregate amount of these sales was Ps. 69, Ps. 71 and Ps. 56, respectively.Empresas Comegua, S.A., an associated company, sells glass containers to Cervecería
Centroamericana and to Cervecería de Costa Rica, its noncontrolling interest. In 2007, 2008
and 2009, the aggregate amount of these sales was US$9 million, US$20 million and US$12
million, respectively.c)
    
    Purchase of supermarket coupons.-The Company purchases supermarket coupons for its
employees at a supermarket store in which one member of its board of directors is a
shareholder. In 2008 and 2009, the amount of these purchases was Ps. 80 and Ps. 90,
respectively.d)
    
    Sale of real estate.-In 2007, a member of the Companys Board of Directors,
purchased an unused parcel of real estate from one of its subsidiaries. The price of the
real estate was US$5.4 million. The Company received several offers for the property and
such member of the Board made the highest offer. The transaction was approved by the
Companys Audit Committee in accordance with its charter at the time.e)
    
    Compensation.-For the years ended December 31, 2007, 2008 and 2009, the aggregate
compensation the Company paid to its directors and senior managers was approximately Ps.
273, Ps. 183 and Ps. 229, respectively. This amount includes fees, salaries, the use of
certain assets and services, variable compensation and retirement benefits.
  F-47




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##### Table of Contents



(Millions of Mexican pesos, except per share amounts)
 20.
    
    Business dispositions and acquisitions
 a)
    
    Acquisition of 55% of the shares of PVA.-In August 2007, Vitro VyC acquired 55% of
the outstanding shares of PVA, a company dedicated to the installation of value added
crystal products for Ps. 110. As a result of the preliminary purchase price allocation,
the Company recorded goodwill of Ps. 85 in 2007. During the first half of 2008, pursuant
to the guidelines established in NIF B-7, Business Acquisitions, the items comprising
such goodwill were analyzed further and Ps. 61 was reclassified as an intangible asset.b)
    
    Acquisition of 50% of the shares of Vidrio y Cristal del Noroeste, S.A. de C.V.
(formerly Vitro AFG).-In July 2007, Viméxico exercised its option to acquire the
remaining 50% of the outstanding shares of Vitro AFG from its joint venture partner AFG
Industries, a subsidiary of Asahi Glass Co. Limited (a Japanese company) for a purchase
price of US$6 million. In accordance with NIF C-15, Impairment of Long-Lived Assets and
Their Disposal, the Company recognized an impairment charge of Ps. 91 related to the
termination of the joint venture with AFG Industries.With the closing of this transaction, Viméxico terminated the joint venture and became
the sole-owner of this entity, located in Mexicali, Baja California, Mexico, whose
primary operations include the manufacturing, processing and distribution of flat glass,
thereby increasing Vitros available production capacity by 78,000 tons on an annual
basis.c)
    
    Purchase of 40% of Vitro Cristalglass.-In July 2008, Viméxico was notified by its
partner of its right to exercise the put option related to the sale of its 40% interest
in Vitro Cristalglass. The option was officially exercised in August 2008 and beginning
in September 2008, Vitro Cristalglass is 100% consolidated. The purchase price agreed
upon was 27.4 million euros (approximately Ps. 527). The difference between the purchase
price and the book value resulted in a charge of Ps. 60, recorded in majority
stockholders equity.In January 2009 a revised payment was agreed upon with the previous partner, by extending
it through the 2009-2010 periods, and that the purchase of the partnership interest in
Vitro Cristalglass would be made through the same company and that subsequently, there
would be a capital reduction.d)
    
    Deconsolidation of Empresas Comegua, S.A. In November 2008, the Company
announced that together with its two Central American partners, decided to modify the
corporate by-laws of Comegua regarding the control of its operations. As a
result, beginning on that date, the Company now accounts for its 49.7% participation in
Comegua under the equity method.
  F-48




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##### Table of Contents



(Millions of Mexican pesos, except per share amounts)
 Comeguas relevant data is as follows:
 Year ended December 31,Condensed consolidated balance sheet:
    
    2008
    
    
    2009Assets:Cash and cash equivalents
    
    Ps.
    74
    
    
    Ps.
    128Trade receivables
    
    
    775
    
    
    
    628Inventories
    
    
    505
    
    
    
    442Fixed assets and other long-term assets
    
    
    2,366
    
    
    
    2,159Total assets
    
    
    3,720
    
    
    
    3,357Liabilities:Trade payables
    
    
    474
    
    
    
    538Short-term borrowings
    
    
    389
    
    
    
    773Long-term debt and other liabilities
    
    
    851
    
    
    
    264Total liabilities
    
    Ps.
    1,714
    
    
    Ps.
    1,575
 Year ended
    
    
    From January 1
    
    
    
    
    
    
    Year endedDecember 31,
    
    
    to November 30,
    
    
    December
    
    
    December 31,Condensed consolidated income statements:
    
    2007
    
    
    2008
    
    
    2008
    
    
    2009Net sales
    
    Ps.
    2,127
    
    
    Ps.
    2,159
    
    
    Ps.
    233
    
    
    Ps.
    2,064Cost of sales
    
    
    1,546
    
    
    
    1,584
    
    
    
    163
    
    
    
    1,369Gross profit
    
    
    581
    
    
    
    575
    
    
    
    70
    
    
    
    695Selling, general and administrative expenses
    
    
    437
    
    
    
    449
    
    
    
    50
    
    
    
    582Operating income
    
    
    144
    
    
    
    126
    
    
    
    20
    
    
    
    113Total comprehensive financing result
    
    
    30
    
    
    
    56
    
    
    
    8
    
    
    
    95Other expenses (income), net
    
    
    51
    
    
    
    17
    
    
    
    (2
    )
    
    
    13Income tax expense
    
    
    24
    
    
    
    23
    
    
    
    4
    
    
    
    55Net income (loss)
    
    Ps.
    39
    
    
    Ps.
    30
    
    
    Ps.
    10
    
    
    Ps.
    (50
    )
  F-49




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##### Table of Contents



(Millions of Mexican pesos, except per share amounts)
 21.
    
    Business segment data
    Segment
    
    Principal productsGlass Containers
    
    Glass containers, sodium carbonate and bicarbonate,
capital goods, precision components and molds for
glass industry.Flat Glass
    
    Flat glass for the construction and automotive
industries.
  Glass
    
    
    Flat
    
    
    Corporate &2007
    
    Containers
    
    
    Glass
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    Ps.
    14,676
    
    
    Ps.
    13,605
    
    
    Ps.
    361
    
    
    Ps.
    28,642Intersegment sales
    
    
    37
    
    
    
    14
    
    
    
    
    
    
    
    51Consolidated net sales
    
    
    14,639
    
    
    
    13,591
    
    
    
    361
    
    
    
    28,591Operating income (loss)
    
    
    2,054
    
    
    
    782
    
    
    
    (132
    )
    
    
    2,704Total assets
    
    
    17,803
    
    
    
    13,708
    
    
    
    2,312
    
    
    
    33,823Capital expenditures
    
    
    2,328
    
    
    
    324
    
    
    
    43
    
    
    
    2,695Depreciation and amortization
    
    
    870
    
    
    
    480
    
    
    
    64
    
    
    
    1,414Goodwill
    
    
    3
    
    
    
    870
    
    
    
    
    
    
    
    873Impairment
    
    
    31
    
    
    
    91
    
    
    
    
    
    
    
    122
  F-50




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(Millions of Mexican pesos, except per share amounts)
 Glass
    
    
    Flat
    
    
    Corporate &2008
    
    Containers
    
    
    Glass
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    Ps.
    15,524
    
    
    Ps.
    13,230
    
    
    Ps.
    342
    
    
    Ps.
    29,096Intersegment sales
    
    
    40
    
    
    
    43
    
    
    
    
    
    
    
    83Consolidated net sales
    
    
    15,484
    
    
    
    13,187
    
    
    
    342
    
    
    
    29,013Operating income (loss)
    
    
    1,661
    
    
    
    186
    
    
    
    (137
    )
    
    
    1,710Total assets
    
    
    19,723
    
    
    
    15,358
    
    
    
    693
    
    
    
    35,774Capital expenditures
    
    
    1,538
    
    
    
    255
    
    
    
    5
    
    
    
    1,798Depreciation and amortization
    
    
    897
    
    
    
    484
    
    
    
    88
    
    
    
    1,469Goodwill
    
    
    
    
    
    
    771
    
    
    
    
    
    
    
    771Impairment
    
    
    
    
    
    
    196
    
    
    
    
    
    
    
    196
 Glass
    
    
    Flat
    
    
    Corporate &2009
    
    Containers
    
    
    Glass
    
    
    Eliminations
    
    
    ConsolidatedNet sales
    
    Ps.
    12,452
    
    
    Ps.
    11,453
    
    
    Ps.
    229
    
    
    Ps.
    24,134Intersegment sales
    
    
    67
    
    
    
    76
    
    
    
    
    
    
    
    143Consolidated net sales
    
    
    12,385
    
    
    
    11,377
    
    
    
    229
    
    
    
    23,991Operating income (loss)
    
    
    1,956
    
    
    
    (591
    )
    
    
    (36
    )
    
    
    1,329Total assets
    
    
    21,878
    
    
    
    15,029
    
    
    
    (4,255
    )
    
    
    32,652Capital expenditures
    
    
    735
    
    
    
    264
    
    
    
    10
    
    
    
    1,009Depreciation and amortization
    
    
    854
    
    
    
    575
    
    
    
    44
    
    
    
    1,473Goodwill
    
    
    
    
    
    
    702
    
    
    
    19
    
    
    
    721Impairment
    
    
    
    
    
    
    207
    
    
    
    
    
    
    
    207
 Export sales from Mexico, substantially all of which are denominated in US dollars, are
mainly to the United States, Canada and Europe and were as follows (in million of US dollars):
 Year ended December 31,2007
    
    2008
    
    
    2009US$601
    
    US$
    600
    
    
    US$
    484
  Year ended December 31,2007
    
    
    2008
    
    
    2009Net sales (1) to customers in:Mexico
    
    Ps.
    12,008
    
    
    Ps.
    12,831
    
    
    Ps.
    11,152All foreign countries, mainly the United States, Canada and Europe
    
    
    16,583
    
    
    
    16,182
    
    
    
    12,839Ps.
    28,591
    
    
    Ps.
    29,013
    
    
    Ps.
    23,991
 (1)
    
    Net sales are attributed to countries based on the location of the
customer.  F-51




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##### Table of Contents



(Millions of Mexican pesos, except per share amounts)
   December 31,2007
    
    
    2008
    
    
    2009Land and
buildings,
machinery and
equipmentMexico
    
    Ps.
    14,960
    
    
    Ps.
    15,816
    
    
    Ps.
    14,062All foreign
countries, mainly
the United
States, Europe,
Central and South
America
    
    
    2,881
    
    
    
    1,457
    
    
    
    1,276Ps.
    17,841
    
    
    Ps.
    17,273
    
    
    Ps.
    15,338
 22.
    
    New accounting principles
 As part of its efforts to converge Mexican standards with international standards, during 2009,
the Mexican Board for Research and Development of Financial Information Standards (CINIF)
issued the following NIFs and Interpretations of Financial Reporting Standards (INIF),
applicable to profitable entities, which become effective as follows:
 a)
    
    For the fiscal year that begin on January 1, 2010:
 Cash and cash equivalents   Construction contracts, sale of real property and rendering of related services  Service concession contracts
  NIF C-1, Cash and cash equivalents
  F-52




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##### Table of Contents



(Millions of Mexican pesos, except per share amounts)
 Improvements to NIFs for 2010 
 NIF B-1, Accounting changes and correction of errors,
 NIF B-2, Statement of cash flows,
 Business acquisitions
 Investments in associated companies and other permanent investments
 Related parties,
 Construction contracts, sale of real property and rendering of related services, Construction and manufacturing contracts for certain capital
assets
  F-53




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(Millions of Mexican pesos, except per share amounts)
 Service concession contracts, Construction and
manufacturing contracts for certain capital assets
 b)
    
    For the fiscal year that begins on January 1, 2011:NIF B-5, Financial segment information,uses a managerial approach to disclose financial
information by segments,as opposed to Bulletin B-5, which also used a managerial approach but
required that the financial information be classified by economic segments, geographical areas,
or homogenous client groups. NIF B-5 does not require different risks among business areas to
separate them. It allows areas in the preoperating stage to be classified as a segment, and
requires separate disclosure of interest income, interest expense and liabilities, as well as
disclosure of the entitys information as a whole with respect to products, services,
geographical areas and major customers and suppliers. Like the previous Bulletin, this
Standard is mandatory only for public companies or companies in the process of becoming public.At the issuance date of these consolidated financial statements, the Company continues
determining the effects of adopting these new standards on its financial information.c)
    
    International financial reporting standardsIn January 2009, the Mexican Banking and Securities Commission published amendments to its
National Securities Law, making it compulsory for public entities to prepare and present their
financial statements using International Financial Accounting Standards beginning 2012 (early
adoption is permitted).At the issuance date of these consolidated financial statements, the Company continues
determining the effects of adopting International Financial Accounting Standards as it relates
to its consolidated financial statements.
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##### Table of Contents



(Millions of Mexican pesos, except per share amounts)
 23.
    
    Subsequent Events
 a)
    
    DebtOn January 4, 2010, the Company received, from a group of its bondholders, a Notice of
Acceleration of payment for the Senior Notes due 2012 and 2017. A minority group of at
least twenty five percent of the bond holders may request the Notice of Acceleration, which
is considered a standard operating procedure when an issuer is in default. As of the
issuance date of these consolidated financial statements, the outstanding principal amount
of these Notes is US$1,000 million.In accordance with the Mexican Bankruptcy Law (Ley de Concurso Mercantil), if more than
thirty five percent of a companys outstanding obligations are past due, the company
itself, any creditor or the public ministry could request that the company declare
bankruptcy.On April 12, 2010, the Company announced that it received a document on letterhead of the
U.S. Bank National Association, which serves as trustee of the Senior Notes due 2013,
entitled Notice of Default and Acceleration referenced to the 2013 Notes. The outstanding
principal amount of these Notes, as of the issuance date of these consolidated financial
statements, is US$216 million.In August, 2010 the Company refinanced the credit lines in euros from its subsidiary in
Spain, Vitro Cristalglass, S.L., extending the term for three years from the agreement
signature in amount of 44.8 million euros.b)
    
    Derivative financial instrumentsOn April 12, 2010 the judge of the Supreme Court of the State of New York issued a ruling
regarding the request for summary judgment made by Vitros counterparties in financial
derivatives transactions. The judge granted Vitros counterparties motions as to liability
only and denied them as to the amounts sought by said counterparties, finding that the
financial institutions had not provided sufficient and reasonable detail to verify the
methods and accuracy of their calculations. The Court then referred the issue of damages to
a Special Referee for further proceedings and recommendation to the Court, and held the
motions for summary judgment in abeyance pending receipt of the report of the
recommendations of the Special Referee.On June 7, 2010, the Company reached agreements to settle the amount related to DFIs. Vitro
reached an agreement to settle the amount related to derivative financial instruments
(DFIs) with Calyon, London Branch (Calyon). In addition, on September 6, 2010 the
Company reached a settlement agreement with Fintech Investments Ltd. (Fintech), the firm
that recently acquired the DFIs claims,
previously owned by Credit Suisse International, Deutsche Bank AG, London Branch, Merrill
Lynch Capital Services, Citibank, N.A., Barclays Bank, PLC and Cargill, Incorporated.
  F-55




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(Millions of Mexican pesos, except per share amounts)
 The amount of the settlement agreed with Calyon and Fintech is US$67.3 MM and US$190.0 MM,
including interest for US$3.9 and US$13.6, respectively, recognized by the Company.As a result of these settlements, all of the lawsuits related with the DFIs have been
dismissed.c)
    
    Status or the Restructuring processAs part of Companys debt restructuring discussions with creditors (see note 10), the
Company has presented a restructuring counterproposal (the Counterproposal) to
representatives of certain holders of Senior Notes, The Counterproposal for the
restructuring includes the Senior Notes and other impaired debt.While the proposal was not accepted, in order to reach a consensual restructuring
agreement, the Company is working on a consent solicitation statement.The Company believes that the proposal included in the Consent will assure the
sustainability of the Company and significantly enhancing the worthiness of its
restructured debt. Additionally, the Company believes that the proposal represents a higher
recovery than the average market price for the last six months of the senior notes due
2012, 2013 and 2017.The Company continues to negotiate with the Ad Hoc Bondholder Committee in an effort to
secure their support of the Consent in advance of its launch but there can be no assurances
that such support will be achieved.d)
    
    Natural disastersIn April 2010, the Companys flat glass facility in Mexicali and the inventories in that
plant sustained damage as a result of an earthquake. The plant resumed normal operations in
7 days. The Company is working to recover the amount of the damages through the insurance
companies
  F-56




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(Millions of Mexican pesos, except per share amounts)
 On July 1, 2010, manufacturing facilities in the Municipality of García in Nuevo León,
Mexico were affected as a result of the severe flooding and damage caused by Hurricane
Alex. Float glass manufacturing and automotive processing facilities and facilities at
Álcali suffered significant damage and were forced to temporarily suspend operations. In
particular:
 
    
    Two of four automotive glass manufacturing facilities (both located in
García) were affected by this event; however, because of current inventory levels and
measures taken to restore production in the succeeding days, the Company was able to
minimize the impact for original equipment manufacturer (OEM) clients and auto glass
replacement clients;
    
    Two of three float glass manufacturing facilities (both located in García)
were also affected by this event; one of the affected facilities resumed normal
operations initially in the last week of July; however, its operations were
temporarily suspended due to stability issues and it resumed operations again in the
last week of August; the other affected facility is expected to resume operations in
October; float glass facility in Mexicali, which is currently operating at 100%
capacity, is temporarily supplying glass to its OEM glass processing plants; and
    
    Facilities at Álcali suspended operations for a few days and a portion of
Álcalis end-product, raw material and packaging inventories were damaged; however,
the Company was able to minimize the impact on its clients by working jointly to
supply only the minimal amount necessary for them to continue operating.
  e)
    
    Receivable from sale of real estateOn August 16, 2010, final decision in first instance was issued in which it absolved the
purchaser of the real estate sold by the Company of the remaining payment claimed. The
Company has filed an appeal against the decision, which is pending to be resolved. The
Company and its legal counsel believe it has sufficient evidence to obtain a favorable
final ruling on this issue (see note 6 c).f)
    
    On August 24, 2010, the Company finalized the sale of non-productive properties,
amounting to US$63.8 million. The resources of such sale, and US$5.5 million was
contributed in addition by the Company, were intended to pay a debt that is owed to a
trust (see note 6 d), by paying in full the balance of US$69.3 million to that date
and therefore recovering the property of their two corporate office buildings, which were
part of the assets that were originally provided as collateral for such support.
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(Millions of Mexican pesos, except per share amounts)
 24.
    
    Authorization of financial statements issuance
    F-58




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##### Table of Contents



25.
    
    Differences between MFRS and U.S. generally accepted accounting principles
 The Companys consolidated and combined financial statements are prepared in accordance with MFRS
which differ in certain significant respects from accounting principles generally accepted in the
United States of America (U.S. GAAP).
 The United States Financial Accounting Standards Board (FASB) released the FASB Accounting
Standards Codification, or Codification for short, on January 15, 2008 and it became effective in
2009. At that time all previous U.S. GAAP reference sources became obsolete. The Codification
organizes several U.S. GAAP pronouncements under approximately 90 accounting topic areas. The
objective of this project was to arrive at a single source of authoritative U.S. accounting and
reporting standards, other than guidance issued by the Securities and Exchange Commission (SEC)
of the United States of America. Included in Notes 25 and 26 are references to certain U.S. GAAP
Codifications (ASC) that were adopted in 2009 and certain ASCs that have yet to be adopted by
the Company.
 Prior to 2008, the MFRS consolidated financial statements include the effects of inflation as
provided for under Bulletin B-10, Recognition of the Effects of Inflation in Financial
Information, whereas financial statements prepared under U.S. GAAP are presented on a historical
cost basis. The application of Bulletin B-10 represented a comprehensive measure of the effects
of price level changes in the inflationary Mexican economy and, as such, was considered a more
meaningful presentation than historical cost-based financial reporting for both Mexican and U.S.
accounting purposes.
 Beginning on January 1, 2008 as disclosed in note 3a), in accordance with new NIF B-10, Effects
of Inflation, the Company discontinued the recognition of inflation in its financial statements
under MFRS as the cumulative inflation for the preceding three years was less than 26%. This
resulted in the elimination of certain reconciling items between MFRS and U.S. GAAP in 2008 and
2009. Notwithstanding the prior comments, the following reconciliation to U.S. GAAP for the year
ended December 31, 2007 does not include the reversal of the adjustments required under Bulletin
B-10, as permitted by the rules and regulations of the Securities and Exchange Commission (the
SEC).
  F-59




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The other differences between MFRS and U.S. GAAP and the effect on consolidated net income (loss)
and consolidated stockholders equity are presented below:
 Year ended December 31,2007
    
    
    2008
    
    
    2009
    
    
    2009(US$ millions)(Convenience(Ps. millions)
    
    
    Translation)Reconciliation of Net Income (Loss):Net income (loss) as reported under MFRS
    
    Ps.
    131
    
    
    Ps.
    (5,682
    )
    
    Ps.
    (754
    )
    
    US$
    (58
    )U.S. GAAP adjustments:Deferred income taxes (see b)
    
    
    55
    
    
    
    (707
    )
    
    
    (1,130
    )
    
    
    (86
    )Monetary position result on deferred income taxes (see c)
    
    
    31
    
    
    
    
    
    
    
    
    
    
    
    Capitalization of interest (see d)
    
    
    16
    
    
    
    (358
    )
    
    
    
    
    
    
    Amortization of capitalized interest (see d)
    
    
    (36
    )
    
    
    (39
    )
    
    
    (19
    )
    
    
    (2
    )Goodwill (see e)
    
    
    
    
    
    
    (43
    )
    
    
    
    
    
    
    Effect of applying Bulletin B-10 (see f)
    
    
    (36
    )
    
    
    (3
    )
    
    
    
    
    
    
    Effect of ASC 715 (previously SFAS No. 158 ) (see j)
    
    
    
    
    
    
    23
    
    
    
    (30
    )
    
    
    (2
    )Fair value of financial instruments (see g)
    
    
    
    
    
    
    75
    
    
    
    (8
    )
    
    
    (1
    )Discontinued operations (see h)
    
    
    26
    
    
    
    
    
    
    
    
    
    
    
    Employee retirement obligations (see j)
    
    
    (15
    )
    
    
    36
    
    
    
    26
    
    
    
    2Purchase of Visteons capital investment (see k)
    
    
    5
    
    
    
    5
    
    
    
    9
    
    
    
    1Sale of real estate (see m)
    
    
    429
    
    
    
    386
    
    
    
    
    
    
    
    Impairment of long-lived assets (see n)
    
    
    (10
    )
    
    
    (45
    )
    
    
    15
    
    
    
    1Deconsolidation of Comegua (see i)
    
    
    (20
    )
    
    
    (16
    )
    
    
    
    
    
    
    Sale- leaseback transaction (see p)
    
    
    
    
    
    
    
    
    
    
    (278
    )
    
    
    (21
    )Fintech option liability (see p)
    
    
    
    
    
    
    
    
    
    
    (181
    )
    
    
    (14
    )Impact of
changes in income tax law (see q)
    
    
    
    
    
    
    
    
    
    
    (237
    )
    
    
    (18
    )Total U.S. GAAP adjustments
    
    
    445
    
    
    
    (686
    )
    
    
    (1,833
    )
    
    
    (140
    )Net
(loss) income under U.S. GAAP
    
    Ps.
    576
    
    
    Ps.
    (6,368
    )
    
    Ps.
    (2,587
    )
    
    Ps.
    (198
    )
 Year ended December 31,2008
    
    
    2009
    
    
    2009(US$ millions)(Convenience(Ps. millions)
    
    
    Translation)Reconciliation of Stockholders Equity (Deficit):Total stockholders equity reported under MFRS
    
    Ps.
    3,108
    
    
    Ps.
    1,984
    
    
    US$
    152U.S. GAAP adjustments:Deferred income taxes (see b)
    
    
    (1,234
    )
    
    
    (2,302
    )
    
    
    (177
    )Capitalization of interest (see d)
    
    
    16
    
    
    
    16
    
    
    
    1Accumulated amortization for capitalized interest (see d)
    
    
    (224
    )
    
    
    (243
    )
    
    
    (19
    )Goodwill (see e)
    
    
    81
    
    
    
    81
    
    
    
    6Fair value of financial instruments (see r-3)
    
    
    75
    
    
    
    66
    
    
    
    5Effect of ASC 715 (previously SFAS No. 158) (see j)
    
    
    (1,749
    )
    
    
    (2,255
    )
    
    
    (173
    )Employee retirement obligations (see j)
    
    
    (64
    )
    
    
    (38
    )
    
    
    (3
    )Purchase of Visteons capital investment (see k)
    
    
    (61
    )
    
    
    (52
    )
    
    
    (4
    )Purchase of remaining 40% interest in Vitro Cristalglass (see l )
    
    
    60
    
    
    
    60
    
    
    
    5Impairment of long-lived assets (see n)
    
    
    208
    
    
    
    223
    
    
    
    17Sale- leaseback transaction (see p)
    
    
    
    
    
    
    (278
    )
    
    
    (21
    )Fintech option liability (see p)
    
    
    
    
    
    
    (181
    )
    
    
    (14
    )Total U.S. GAAP adjustments
    
    
    (2,892
    )
    
    
    (4,903
    )
    
    
    (375
    )Total stockholders equity (deficit) under U.S. GAAP
    
    Ps.
    216
    
    
    Ps.
    (2,919
    )
    
    US$
    (224
    )
  F-60




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##### Table of Contents



a)
    
    Non controlling interest
 In January 2009, the Company adopted ASC 810-10 Consolidation (previously SFAS No. 160,
Noncontrolling Interests in Consolidated Financial Statements, an amendment of ARB No. 51)
which establishes the accounting and reporting standards for the noncontrolling interest in
a subsidiary and the deconsolidation of a subsidiary, and also amends certain consolidation
guidance for consistency with revised standards regarding business combinations. The
accounting provisions of ASC 810-10 (SFAS No. 160) must be applied prospectively starting
at the beginning of the fiscal year in which the provisions are initially adopted, while
the presentation and disclosure requirements must be applied retrospectively, to provide
comparability in the financial statements. ASC 810-10 (SFAS No. 160) was effective for
fiscal years, and interim periods within those fiscal years, beginning on or after December
15, 2008. As a result of adopting this standard, the Company reclassified the
noncontrolling interest to stockholders equity in the year of adoption and in prior
periods for purposes of comparability, which resulted in eliminating this difference in the
reconciliation between MFRS and U.S. GAAP of Ps. 1,416.
 The effects of the U.S. GAAP differences as described in this Note reflect the amounts
assigned to the noncontrolling interests.
 b)
    
    Deferred income taxes
 Under MFRS as required by NIF D-4, Accounting for Income Taxes, income taxes are charged
to results as they are incurred and the Company recognizes deferred income tax assets and
liabilities for the future consequences of temporary differences between the financial
statement carrying amounts of assets and liabilities and their respective income tax bases,
measured using enacted rates. The effects of changes in the statutory rates are accounted
for in the period that includes the enactment date. Deferred income tax assets are also
recognized for the estimated future effects of tax loss carryforwards and asset tax credit
carryforwards. Deferred tax assets are recognized only when it is highly probable that
sufficient future taxable income will be generated to recover such deferred tax assets.
 Under U.S. GAAP, as required by ASC 740 Income Taxes(previously SFAS No. 109 Accounting
for Income Taxes), the Company recognizes deferred income tax assets and liabilities for
the future consequences of temporary differences between the financial statement carrying
amounts of assets and liabilities and their respective income tax bases, measured using
enacted rates. The effects of changes in the statutory rates are accounted for in the
period that includes the enactment date. Deferred income tax assets are also recognized
for the estimated future effects of tax loss carryforwards and asset tax credit
carryforwards.
 The ultimate realization of deferred tax assets is dependent upon the generation of future
taxable income during the periods in which those temporary differences become deductible.
Management considers the scheduled reversal of deferred tax liabilities, projected future
taxable income, and tax planning strategies in making this assessment. Based upon the level
of historical taxable income, projections of future taxable income over the periods in
which the deferred tax assets are deductible and tax planning strategies that would be
taken to prevent an operating loss or tax credit carryforward from expiring unused,
management believes it is more likely than not that the Company will realize the benefits
of these deductible differences, net of the existing valuation allowance at December 31,
2009.
 For U.S. GAAP purposes the Company recognizes deferred taxes each period for the changes in
the taxable portions of its distributable stockholders equity. The Companys policy is to
compare the deferred tax balance that would be required if all of the stockholders equity
were distributed to the total deferred tax balance recorded
prior to this adjustment and the difference is recorded as an adjustment to deferred taxes
as of the balance sheet date.
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Through December 31, 2007, for U.S. GAAP purposes the Company recognized a deferred tax
asset for the temporary difference that exists between the book basis and the tax basis of
its foreign subsidiaries that legally own Vitros intellectual property at the applicable
tax rate in the foreign jurisdiction based on the expected reversal date. In January 2008,
the intellectual property was sold to Vitros Mexican subsidiaries and the impact of
repatriating such asset to Mexico was reflected in the Companys U.S. GAAP reconciliation.
 As of December 31, 2009, the
Company had a net deferred tax asset of Ps. 4515 million for purposes
of MFRS. The Companys management evaluated the relevant facts
and circumstances regarding the recoverability of the deferred tax
assets, which included financial projections approved by the Board
of  Directors as well as certain tax planning strategies. For
purposes of U.S. GAAP the Company performed an analysis of its
subsidiaries and for those entities with cumulative tax losses over
the previous three years, from 2007 through 2009, a valuation
allowance was recorded. As of December 31, 2009 the valuation
allowance was recorded at a consolidated level for U.S. GAAP purposes
reflects the amount of the Companys deferred tax assets
management expects to be able to utilize based on the factors
described above.
 U.S. GAAP differences to the extent taxable are reflected in the U.S. GAAP deferred tax
balances. The Company has recorded the following additional U.S. GAAP adjustments to the
significant components of deferred tax assets and liabilities, recorded under MFRS:
 As of December 31,2008
    
    
    2009Deferred Tax Assets and ( Liabilities):Employee retirement obligations
    
    Ps.
    508
    
    
    Ps.
    642Derivative instruments
    
    
    (21
    )
    
    
    110Purchase of Visteon capital investment
    
    
    17
    
    
    
    14Stockholders equity
    
    
    (1,738
    )
    
    
    (3,068
    )Net deferred tax liability
    
    Ps.
    (1,234
    )
    
    Ps.
    (2,302
    )
 It is the Companys policy to classify interest and penalties related to income tax
related matters within income tax expense and other expenses, respectively. The Companys
significant operations are all located in Mexico, the United States of America, Panama,
Costa Rica and Spain. The tax laws in these jurisdictions permit the respective tax
authorities to examine previously filed tax returns for the following years:
 Mexico
    
    U.S.
    
    Spain
    
    Guatemala
    
    Costa Rica2005-2009
    
    2005-2009
    
    2006-2009
    
    2006-2009
    
    2007-2009
 c)
    
    Monetary position result on deferred income tax
 The monetary position result impacting deferred income tax (represents the only adjustments
that affect monetary assets and liabilities) is determined by (i) applying the annual
inflation factor to the net monetary position of the U.S. GAAP adjustments at the beginning
of the period, plus (ii) the monetary position effect of such adjustments during the
period, determined in accordance with the weighted average inflation factor.
 As discussed in the introduction to this note as well as in note 3a), beginning January 1,
2008 with the issuance of NIF B-10, the Companys MFRS financial statements no longer
include inflationary effects, for which reason, this reconciling item is no longer
applicable.
  F-62




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##### Table of Contents



d)
    
    Capitalization of interest
 Under MFRS beginning January 1, 2007, the Company adopted NIF D-6, Capitalization of
Comprehensive Financing Result, accordingly the capitalization of the comprehensive
financing result (interest expense, foreign exchange results and monetary position result)
generated by borrowings obtained to finance investment directly attributable to the
acquisition of qualifying assets is mandatory. Prior to the adoption of NIF D-6, the
Company did not capitalize the comprehensive financing result as it was optional.
 In accordance with ASC 835-20 Capitalization of interest(previously SFAS No. 34,
Capitalization of Interest Cost), if the comprehensive financing result is incurred
during the construction of qualifying assets, capitalization is required as part of the
cost of such assets. Accordingly, until December 31, 2006 a reconciling item for the
capitalization of a portion of the comprehensive financing result was included in the U.S.
GAAP reconciliation. The amortization expense and related accumulated amortization of such
items also generates a difference compared to MFRS.
 Beginning on January 1, 2007, and through December 31, 2007, a reconciling item was
generated related to the foreign exchange results and monetary position result, which are
capitalized under MFRS and not for U.S. GAAP. In 2008, a reconciling item was generated for
borrowings denominated in US dollars, related to the foreign exchange results, which is
capitalized under MFRS and not for U.S. GAAP.
 e)
    
    Goodwill
 As mentioned in note 3 m), under MFRS, until December 31, 2004 goodwill represented the
excess of cost over book value of subsidiaries as of the date of acquisition and was
restated using the NCPI and amortized using the straight-line method over 20 years.
Beginning on January 1, 2005, goodwill represents the excess of cost over fair value of
subsidiaries as of the date of acquisition. Through December 31, 2007, goodwill was
restated using the NCPI.
 In accordance with ASC 350 Intangibles-Goodwill and Other(previously SFAS No. 142,
Goodwill and Other Intangibles Assets), beginning in 2002 goodwill and indefinite-lived
assets are also no longer subject to amortization, but rather are subject at least once a
year to impairment tests.
 As of December 31, 2007, the difference between MFRS and U.S. GAAP as it relates to this
item was due to the accumulated amortization of goodwill recorded under MFRS that had been
reversed in the reconciliation of stockholders equity for purposes of U.S. GAAP. In 2008,
as disclosed below, the Company recognized a goodwill impairment charge under U.S. GAAP and
as a result this difference was eliminated with a charge to the U.S. GAAP statement of
operations.
 In 2008, the Company recorded an impairment of goodwill in its U.S. reporting unit. The
impairment recorded in accordance with MFRS was less than what was recorded in accordance
with U.S. GAAP as such goodwill had previously been amortized as discussed in the first
paragraph of this item. As a result, an adjustment to the reconciliation of net income
(loss) has been included in order to properly reflect the impairment loss recorded for
purposes of U.S. GAAP.
  F-63




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##### Table of Contents



The changes in the carrying amount of goodwill for the years ended December 31, 2008 and
2009 are as follows:
 Balance as of December 31, 2007
    
    Ps.
    994Acquisition(1)
    
    
    60Impairment
    
    
    (239
    )Changes for effects of exchange rates
    
    
    159Reclassification to intangible assets(2)
    
    
    (61
    )Balance as of December 31, 2008
    
    
    913Impairment
    
    
    (61
    )Changes for effects of exchange rates
    
    
    10Balance as of December 31, 2009
    
    Ps.
    862
 (1)
    
    The Company recorded goodwill of Ps. 60 related to the acquisition of 40% of
the shares of Vitro Cristalglass, S.L. (see note 25 i).(2)
    
    During 2008 Ps. 61 was reclassified as an intangible asset when the purchase
price allocation was finalized (see Note 20 a). f)
    
    Effect of applying Bulletin B-10
 As discussed in note 3 c), through December 31, 2007 MFRS Bulletin B-10 allows the
restatement of the value of machinery and equipment purchased in a foreign country using
the consumer price index of the country of origin and the period-end exchange rate. For
U.S. GAAP purposes, such restatement is based on the NCPI.
 As discussed in the introduction to this note as well as note (3c), beginning January 1,
2008 with the issuance of NIF B-10, the Companys MFRS financial statements no longer
include inflationary effects, for which reason, this reconciling item is no longer
applicable. Further, even during inflationary periods, the alternate methodology described
above has been eliminated by NIF B-10.
 g)
    
    Derivative financial instruments
 The Company determined that the accounting for derivative financial instruments is the same
for MFRS and U.S. GAAP as they relate to their consolidated financial statements as of and
for the years ended December 31, 2007. Beginning January 1 2008, the Company adopted the
provisions of ASC 820 Fair Value Measurements and disclosures (previously SFAS No. 157),
which impacted the fair value of its derivative financial instruments as disclosed in note
(25 r3) and is reflected as a difference in the accompanying reconciliation to U.S.
GAAP.
 h)
    
    Discontinued operations
 The basis of the assets and liabilities under U.S. GAAP of the entities disposed by the
Company at the time of their sale differed from the basis of such assets and liabilities
under MFRS; accordingly, the gain recorded on disposal of such entities under U.S. GAAP
differs from that under MFRS.
 i)
    
    Deconsolidation of Comegua
 For MFRS purposes prior to November 2008, based on: (a) the Companys control over the CEO
whose function is to govern the operating decisions and financial policies of Comegua; (b)
the Companys sole right to propose the CEO for designation by the Board of Directors of
Comegua; and (c) the Companys sole right to remove the CEO, the Company concluded that it
controlled Comegua as defined by Bulletin B-8, Consolidated and Combined FinancialStatements and Valuation of Permanent Investments in Shares and therefore, Comegua should
be consolidated in accordance with MFRS. As disclosed in note 20 d), in November 2008, the
Company announced that together with its two Central American partners, decided to modify
the corporate by-laws of Comegua regarding the control of its operations. As a result,
beginning on that date, the Company now accounts for its 49.7% participation in Comegua
under the equity method.
  F-64




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##### Table of Contents



For U.S. GAAP purposes, the Company has determined that the control it retained over the
management of the annual budget of Comegua was not unilateral and was not sufficient to
meet all of the technical requirements for consolidation. The Companys position is based
on the guidance provided by ASC 810 The effect of Noncontrolling Rights on Consolidation
(previously EITF 96-16, Investors Accounting for an Investee when the Investor has a
Controlling of the Voting Interest but the Noncontrolling Shareholder or Shareholders have
Certain Approval of Veto Rights). Under US GAAP, such approval and veto rights held by the
noncontrolling shareholders of Comegua, including the approval of annual budget, qualify
as substantive participating rights and therefore do not allow the Company to consolidate
Comegua in its financial statements for U.S. GAAP purposes. Therefore, the Companys
investment in Comegua is recorded by applying the equity method in the Companys U.S. GAAP
consolidated financial statements. Beginning in November 2008 this GAAP difference has
been eliminated as discussed above.
 j)
    
    Employee retirement obligations
 The Company maintains defined benefit pension plans for all of its subsidiaries and
provides for seniority premiums and severance payments (severance indemnities) for all of
its Mexican subsidiaries. For its MFRS consolidated financial statements, the Company
applies NIF D-3. The Company records the pension cost determined by actuarial computations,
as described in notes 3 n) and 11. Significant assumptions (weighted-average rates) used in
determining net periodic pension cost and the Companys related pension obligations for
2008 and 2009 are also described in note 11.
 Severance indemnities  Under MFRS NIF D-3 requires the recognition of a severance
indemnity liability calculated based on actuarial computations. Similar recognition
criteria under U.S. GAAP are established in ASC 712 Nonretirement Postemployment Benefits
(previously SFAS No. 112, Employers Accounting for Postemployment Benefits), which
requires that a liability for certain termination benefits provided under an ongoing
benefit arrangement such as these statutorily mandated severance indemnities, be recognized
when the likelihood of future settlement is probable and the liability can be reasonably
estimated. MFRS allows for the Company to amortize the transition obligation related to the
adoption of revised Bulletin D-3 over the expected service life of the employees. However,
U.S. GAAP required the Company to recognize such effect upon initial adoption, which
results in a difference in the amount recorded under the two accounting principles. The
tables below reflect the requirements under U.S. GAAP, which applies ASC 712 standard for
all years presented.
 The Company adopted ASC 715 Compensation-Retirement Benefits (previously SFAS No. 158,
Employers Accounting for Defined Benefit Pension and
Other Postretirement Plans), an
amendment of ASC 715 Compensation-Retirement Benefits (previously FASB Statements No. 87,
88, 106 and 132(R)), in its December 31, 2006 consolidated financial statements. This
statement requires companies to (1) fully recognize, as an asset or liability, the over
funded or under funded status of defined pension and other postretirement benefit plans;
(2) recognize changes in the funded status through other comprehensive income in the year
in which the changes occur; and (3) provide enhanced disclosures.
  F-65




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##### Table of Contents



A reconciliation of the Companys employee retirement obligations from MFRS to U.S. GAAP is
shown in the following table:
 2008
    
    
    2009Employee retirement obligations under MFRS
    
    Ps.
    461
    
    
    Ps.
    66Effect of ASC 715 (previously SFAS No 158) adjustment
    
    
    1,749
    
    
    
    2,255Effect of retirement obligations
    
    
    64
    
    
    
    38Employee retirement obligations under U.S. GAAP
    
    Ps.
    2,274
    
    
    Ps.
    2,359
 For purposes of determining the cost of its pension plans, seniority premiums and
severance indemnities under U.S. GAAP, the Company applies ASC 715, and ASC 712. The Company
uses a December 31 measurement date for its pension plans, seniority premiums and severance
indemnities. The additional pension disclosures required by ASC 715-30(previously SFAS No.
132, Employers Disclosures about Pensions and Other Postretirement Benefits), as amended
by ASC 715 (previously SFAS No. 158), which are applicable to the Company, are presented
below:
 2008
    
    
    2009Change in benefit obligation:Benefit obligation at beginning of year
    
    Ps.
    3,235
    
    
    Ps.
    2,958Service cost
    
    
    78
    
    
    
    81Interest cost
    
    
    249
    
    
    
    287Actuarial (losses) gains
    
    
    (170
    )
    
    
    639Benefits paid
    
    
    (434
    )
    
    
    (466
    )Benefit obligation at end of year
    
    
    2,958
    
    
    
    3,499Changes in plan assets:Fair value of plan assets at beginning of year
    
    
    1,549
    
    
    
    684Contribution of cash and securities
    
    
    140
    
    
    
    774Return (loss) on plan assets
    
    
    (747
    )
    
    
    43Benefits paid
    
    
    (258
    )
    
    
    (361
    )Fair value of plan assets at end of year(1)
    
    
    684
    
    
    
    1,140Employee retirement obligations unfunded status
    
    Ps.
    2,274
    
    
    Ps.
    2,359
 (1)
    
    Includes approximately Ps. 438 and Ps. 426 as of December 31, 2009
and 2008, respectively of 53,197,549 shares of Vitro common stock. No benefit
payments were made in the form of stock during 2007, 2008 or 2009. Net periodic pension cost for 2007, 2008 and 2009 are summarized below:
 Year ended December 31,2007
    
    
    2008
    
    
    2009Service cost
    
    Ps.
    74
    
    
    Ps.
    78
    
    
    Ps.
    81Interest cost
    
    
    150
    
    
    
    249
    
    
    
    287Return on plan assets
    
    
    (88
    )
    
    
    (151
    )
    
    
    (82
    )Net amortization and deferral
    
    
    86
    
    
    
    78
    
    
    
    116Settlement cost
    
    
    117
    
    
    
    7
    
    
    
    35Net periodic pension cost
    
    Ps.
    339
    
    
    Ps.
    261
    
    
    Ps.
    437
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The unrecognized items included in accumulated other comprehensive income (AOCI) as of
December 31, 2008 and 2009 are as follows:
 2008
    
    
    2009Unrecognized items included in AOCI:Transition obligation
    
    Ps.
    115
    
    
    Ps.
    82Prior service cost
    
    
    180
    
    
    
    162Net actuarial losses
    
    
    1,454
    
    
    
    2,011Unrecognized items
    
    Ps.
    1,749
    
    
    Ps.
    2,255Unrecognized items included in AOCI, net of tax of Ps. 473 and Ps. 631 respectively
    
    Ps.
    1,276
    
    
    Ps.
    1,624
 The amounts related to the Companys employee retirement obligations recognized in
other comprehensive income, arising during 2008 and 2009 are as follows:
 Transition
    
    
    Prior service
    
    
    Net actuarialobligation
    
    
    cost
    
    
    loss
    
    
    TotalBalance as of December 31, 2007
    
    Ps.
    142
    
    
    Ps.
    181
    
    
    Ps.
    897
    
    
    Ps.
    1,220Amounts arising during the period
    
    
    
    
    
    
    16
    
    
    
    596
    
    
    
    612Curtailment / settlement effect
    
    
    (5
    )
    
    
    
    
    
    
    
    
    
    
    (5
    )Amounts recognized as components
of net periodic cost
    
    
    (22
    )
    
    
    (17
    )
    
    
    (39
    )
    
    
    (78
    )Balance as of December 31, 2008
    
    Ps.
    115
    
    
    Ps.
    180
    
    
    Ps.
    1,454
    
    
    Ps.
    1,749Amounts arising during the period
    
    
    
    
    
    
    
    
    
    
    638
    
    
    
    638Curtailment / Settlement effect
    
    
    (16
    )
    
    
    
    
    
    
    
    
    
    
    (16
    )Amounts recognized as components
of net periodic cost
    
    
    (17
    )
    
    
    (18
    )
    
    
    (81
    )
    
    
    (116
    )Balance as of December 31, 2009
    
    Ps.
    82
    
    
    Ps.
    162
    
    
    Ps.
    2,011
    
    
    Ps.
    2,255
 The amounts in accumulated other comprehensive income expected to be recognized as
components of net periodic service cost during 2010 are summarized below:
 2010Transition obligation
    
    Ps.
    16Prior service cost
    
    
    17Net actuarial loss
    
    
    119
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##### Table of Contents



The fair values of the Company pension plan assets at December 31, 2009, by asset
category are as follows:
 Fair Value Measurements at Reporting Date UsingQuoted PricesIn Active
    
    
    SignificantMarkets for
    
    
    Other
    
    
    SignificantIdentical
    
    
    Observable
    
    
    UnobservableAssets
    
    
    Inputs
    
    
    InputsDescription
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)
    
    
    TotalFixed-income securitiesCash
    
    Ps.
    81
    
    
    
    
    
    
    
    
    
    
    Ps.
    81Investment in corporate bonds
    
    
    540
    
    
    
    
    
    
    
    
    
    
    
    540Investment in government bonds
    
    
    40
    
    
    
    
    
    
    
    
    
    
    
    40661
    
    
    
    
    
    
    
    
    
    
    
    661Investment in marketable securities
    
    
    440
    
    
    
    
    
    
    
    
    
    
    
    440Other investments and private funds
    
    
    14
    
    
    
    
    
    
    
    25
    
    
    
    39454
    
    
    
    
    
    
    
    25
    
    
    
    479Total
    
    Ps.
    1,115
    
    
    
    
    
    
    Ps.
    25
    
    
    Ps.
    1,140
 The trust assets consist of fixed income and variable funds, valued at market value.
As of December 31, 2008 and 2009, the pension plan assets were invested in the following
financial instruments:
 2008
    
    
    2009Fixed Rate:Federal Government instruments
    
    
    34
    %
    
    
    60
    %Variable Rate:Equity securities traded on the Mexican Stock Exchange
    
    
    66
    %
    
    
    40
    %100
    %
    
    
    100
    %
 We develop our expected long-term rate of return assumption based on the historical
experience of our portfolio and the review of projected returns by asset class on broad,
publicly traded equity and fixed-income indices. The composition of the objective portfolio
is consistent with the share composition of the portfolios of five of the best-known
international companies located in Mexico that manage long-term funds.
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Contributions to the pension plans amounted to Ps. 140 and Ps. 414 as of December 31, 2008
and 2009, respectively. The Company estimates that the contributions to the pension plan
funds during 2010 are expected to be approximately Ps. 143. Expected benefit payments for
our pension plans, seniority premium and severance indemnities are as follows:
 Seniority
    
    
    SeveranceYear ended December 31,
    
    Pension
    
    
    Premium
    
    
    Indemnities2010
    
    Ps.
    285
    
    
    Ps.
    9
    
    
    Ps.
    362011
    
    
    281
    
    
    
    9
    
    
    
    322012
    
    
    275
    
    
    
    9
    
    
    
    282013
    
    
    270
    
    
    
    9
    
    
    
    252014
    
    
    265
    
    
    
    9
    
    
    
    222015  2019
    
    
    1,288
    
    
    
    44
    
    
    
    76
 As discussed in note 3 a), NIF D-3, Employee Benefits, became effective January 1,
2008. NIF D-3 eliminates the recognition of the additional liability because its
determination does not incorporate a salary increase, incorporates the career salary
concept, and the amortization period of most unrecognized items (those not related to
retirement benefits) is reduced to five years, with the option to fully amortize them
against current earnings of 2008 under other income and expense. The Company chose to
amortize such items over a period of five years. Additionally, the beginning balance of
actuarial gains and losses from termination benefits was recorded against results of 2008
for purposes of MFRS, in other income and expense. For U.S. GAAP purposes unamortized items
are recognized over the estimated service period of the Companys employees.
 k)
    
    Purchase of Visteons capital investment
 In connection with the termination of the joint venture agreement between Viméxico and
Visteon under MFRS as established in Bulletin B-7, Business Acquisitions the Company
recognized the difference between the price paid and the book value of Ps. 70 as a credit
in the controlling stockholders equity. Under U.S. GAAP, in accordance with ASC 805
Business Combinations(previously SFAS No. 141, Business Combinations) the excess of
fair value over cost of Ps. 90 was allocated as a pro rata reduction of the acquired
assets.
 l)
    
    Purchase of remaining 40% interest in Vitro Cristalglass
 In connection with Vimexicos purchase of the additional 40% interest in Vitro Cristalglass
discussed in note 20 c), under Mexican standard NIF Bulletin B-7, Business Acquisitions,
this is considered to be a transaction between shareholders that does not impact the net
assets of the Company, and the payment in excess of the book value of the shares acquired
is recorded in stockholders equity as a reduction of additional paid-in capital. Under
U.S. GAAP, ASC 805 (previously SFAS No. 141 purchases of noncontrolling interest
represent a step acquisition that must be accounted for under the purchase method,
whereby the purchase price is allocated to the proportionate fair value of assets and
liabilities acquired. The difference between the fair value and the price paid for the 40%
of Vitro Cristalglass equity is presented as part of investment in Vitro Cristalglass
shares in the consolidated balance sheet under U.S. GAAP. The Company recognized Ps. 60
goodwill as part of the purchase price allocation.
 m)
    
    Sale of real estate
 In December 14, 2006, Vitro sold real estate located in Mexico City used by COVISA for US$
100 million, 80% payable on the date of sale and the remainder payable on the delivery date
of the property. In connection with the sale of the property, the Company agreed to deliver
the real estate within 24 months following the sale, free and clear of all buildings and
fixtures, as well as any environmental claims, recording reserves of Ps. 56 for the
estimated asset retirement costs and prepaid rent of Ps. 62 for the estimated fair value of
the rental expense over
the 24 months. Under U.S. GAAP, in accordance with SFAS No. 66, Accounting for Sales of
Real Estate, ASC 840 Leases (previously SFAS No. 13, Leases and SFAS No. 98,
Accounting for leases) as a result of the Companys level of continuing involvement the
gain on the sale of the land has been deferred and is being recognized in earnings during
the two years over which the Company continues to utilize the property. In 2008, Vitro
delivered the real estate in compliance with the terms of the agreement.
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The depreciation estimates of the fixed assets that were disposed of as a result of the
real estate sale have been adjusted to reflect the use of the assets over their shortened
useful lives. Such change in estimate is being accounted for prospectively. For purposes
of MFRS, the Company wrote off the net book value of the fixed assets against the gain on
sale.
 For U.S. GAAP purposes, a difference resulted due to the depreciation expense related to
the fixed assets that were written off under MFRS. This difference was eliminated upon the
sale of the real estate in 2008 per U.S. GAAP.
 n)
    
    Impairment of long-lived assets
 For U.S. GAAP purposes, in accordance with ASC 360-10-05 Impairment or disposal of
long-lived assets (previously SFAS No. 144 Impairment of long-lived assets), long-lived
assets are reviewed for impairment whenever events or changes in circumstances indicate
that the carrying amount of an asset may not be recoverable. The carrying amount of an
asset is not recoverable when the estimated future undiscounted cash flows expected to
result from the use of the asset are less than the carrying value of the asset. Impairment
is recorded when the carrying amount of the asset exceeds its fair value. Impairment
charges and asset write-downs are presented in selling, general and administrative expenses
in operating income in our U.S. GAAP consolidated financial statements.
 For MFRS purposes, in accordance with Bulletin C-15, the Company reviews the carrying
amounts of long-lived assets in use when an impairment indicator suggests that such amounts
might not be recoverable, considering the greater of the present value of future net cash
flows or the net sales price upon disposal. Impairment is recorded when the carrying amount
of the asset exceeds the greater of the amounts mentioned above. Impairment charges and
asset write-downs are presented in other expenses in our MFRS consolidated financial
statements.
 In 2005, 2006 and 2009, for MFRS purposes, while performing its annual impairment test
using its best estimates based on reasonable and supportable assumptions and projections,
the Company recorded an impairment charge of Ps. 111, Ps. 334 and Ps. 60, respectively
within its Flat Glass reportable segment as the carrying amount of the long-lived assets
exceeded the present value of their future discounted cash flows. For U.S. GAAP purposes no
impairment charge was recorded as the assets were considered to be recoverable given that
the estimated undiscounted cash flows expected to result from the use of the assets were
greater than the carrying value of the asset.
 In 2005 for U.S. GAAP purposes, based on fair value appraisals received, the Company
recorded an impairment charge of Ps. 195 for land and buildings located at its corporate
offices classified as available for sale in accordance with SFAS No. 144. This charge is
recorded in operating income for U.S. GAAP purposes. Under MFRS, the assets did not meet
the definition of held for sale as required by Bulletin C-15 as such assets were still in
use by the Company at the time. The discounted cash flow model utilized by the Company did
not result in an impairment charge for MFRS purposes. Additionally during 2006, Vitro sold
one of its buildings located at its corporate headquarters recognizing a loss on sale of
Ps. 138 under MFRS and Ps. 93 under U.S. GAAP.
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As a result of the transactions described above, differences result between MFRS and U.S.
GAAP due to the depreciation expense on fixed assets being recorded each year.
 Impairment charges are recorded in operating income for U.S. GAAP purposes and in the other income and expenses under MFRS.
 o)
    
    Securitization of trade receivables
 Under MFRS beginning January 1, 2008 the Company adopted NIF B-8, (Note 3a), which
establishes that special purpose entities, over which control is exercised, should be
consolidated. The guidance in NIF B-8 differs from the current requirements of US GAAP,
that qualifying special purposes entities (QSPEs) not be consolidated if they meet
certain specific requirements.
 As a result of adopting NIF B-8, the special purposes entities that hold accounts
receivable related to the Companys securitization transactions are now included within the
consolidated financial statements (see note 10) for purposes of MFRS. For US GAAP purposes
as they meet the definition of QSPEs they are not consolidated, which is consistent with
the presentation of prior years. The disclosures related to such transactions are as
follows:
 
    
    Securitization of Vitro Envases Norteamérica, S.A. de C.V. (VENA) trade
receivables.- On March 31, 2005, Compañía Vidriera, S.A. de C.V., Industria del
Álcali, S.A. de C.V. and Comercializadora Álcali, S. de R.L. de C.V., all subsidiaries
of VENA, closed a five-year non-recourse revolving accounts receivable facility,
through which such companies obtained approximately Ps. 550 (nominal amount) and US$
19 million. The VENA subsidiaries entered into an agreement to sell all of their trade
accounts receivable, on a revolving basis, to a trust (the Trust, a qualifying special
purpose entity) that was formed prior to the execution of this agreement for the sole
purpose of buying and selling accounts receivable and is designed to be bankruptcy
remote. The Ps. 550 (nominal amount) was obtained through the issuance of certified
preferred securities (certificados bursátiles preferentes) that trade on the Mexican
Stock Exchange (BMV) issued by the Trust, and US$ 19 million in subordinated notes
issued in United States of America, which are guaranteed by the Company. The interest
payments and eventual principal reimbursement on the certified preferred securities
and the subordinated notes are payable from the collection of the receivables
originated by the VENA subsidiaries and sold to the Trust. During June of 2009, the
Company made a principal payment of US$9 million, reducing the total amount of
securities outstanding to US$10 million as of December 31, 2009. At December 31, 2008
and 2009 the gross receivables sold to the Trust totaled Ps. 1,327 and Ps. 1,004,
respectively, and are reflected as a reduction of trade accounts receivable.The estimated fair value of the retained undivided interests in securitized receivables
at December 31, 2008 and 2009 was Ps. 492 and Ps. 309, respectively. The Company has
completed a sensitivity analysis on the estimated fair value of the retained undivided
interests with the objective of measuring the change in value associated with changes in
individual key variables. A 10% increase in expected credit losses and allowance, to
2.88%, would decrease the year-end valuation by approximately Ps. 19, and a 20% increase
in expected credit losses and allowances, to 3.14%, would decrease the year-end
valuation by approximately Ps. 37. Similarly, 10% or 20% adverse fluctuations in either
average receivable collection times or expected short-term commercial paper rates would
not significantly affect the recorded fair value of the retained undivided interests.
This sensitivity analysis is hypothetical and should be used with caution.Proceeds received by the Company from the revolving securitizations aggregated to Ps.
9,835 and Ps. 8,425 for the years ended December 31, 2008 and 2009, and are included in
cash flows from operating activities. Delinquencies on securitized receivables,
representing amounts over 60 days past due, totaled Ps. 62 and Ps. 23 as of December 31,
2008 and 2009, respectively. The servicing of the trade receivables is provided by a
third party.
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
    
    Securitization of Viméxico trade receivables.- On August 22, 2005, Viméxico, closed
a private issuance of promissory notes in the United States for US$21.5 million, at
an interest rate of 6.5%. Viméxico entered into an agreement to sell all of its trade
accounts receivable, on a revolving basis, to a trust (the Trust, a qualifying special
purpose entity) that was formed prior to the execution of this agreement for the sole
purpose of buying and selling accounts receivable and is designed to be bankruptcy
remote. The interest payments and eventual principal reimbursement will be provided
from the collection of the receivables originated by four subsidiaries of Viméxico and
sold to the Trust, which are: Distribuidora Nacional de Vidrio, S.A. de C.V., Vitro
Flotado Cubiertas, S.A. de C.V., Vitro Automotriz, S.A. de C.V. and Vitro Vidrio y
Cristal, S.A. de C.V. At December 31, 2008 and 2009, the gross receivables sold to
the Trust totaled Ps. 577 and Ps. 531, respectively, and are reflected as a reduction
of trade accounts receivable. The estimated fair value of the retained undivided
interests in securitized receivables at December 31, 2008 and 2009 was Ps. 261 and Ps.
231, respectively. The Company has completed a sensitivity analysis on the estimated
fair value of the retained undivided interests with the objective of measuring the
change in value associated with changes in individual key variables. A 10% increase in
expected credit losses and allowance, to 0.66%, would decrease the year-end valuation
by approximately Ps. 14, and 20% increase in expected credit losses and allowances, to
3.94%, would decrease the year-end valuation by approximately Ps. 27. Similarly, 10%
or 20% adverse fluctuations in either average receivable collection times or expected
short-term commercial paper rates would not significantly affect the recorded fair
value of the retained undivided interests. This sensitivity analysis is hypothetical
and should be used with caution.Proceeds received by the Company from the revolving securitizations aggregated to
Ps. 2,592 and US$152 million, and Ps. 2,089 and US$122 million for the years ended
December 31, 2008 and 2009, respectively, and are included in cash flows from
operating activities. Delinquencies on securitized receivables, representing amounts
over 60 days past due, totaled Ps. 67 and US$3 million, and Ps. 25 and US$0.566
million at December 31, 2008 and 2009, respectively. Viméxico continues to service the
securitized receivables, receiving compensation approximately equal to its cost of
such servicing plus a reasonable profit margin; accordingly, no servicing assets or
liabilities are recorded. For the years ended December 31, 2008 and 2009, the Company
received servicing fees totaling Ps. 12 and Ps. 11, respectively.
    
    Vitro America, Inc. (Vitro America).-Effective January 30, 2009, the Companys
accounts receivable securitization agreement was terminated. At termination, the gross
receivables sold totaled US$72.4 million with estimated delinquencies of US$13.6
million, representing amounts over 60 days past due. The estimated fair value of the
retained undivided interests in those securitized receivables was US$33.4 million, at
January 30, 2009. As a result of the termination, approximately US$26.6 million, of
trade receivablesand related debt obligations reverted to the Company. In February 2009, US$15 million
of the debt obligations were repaid with capital contributions from American Asset
Holding Corp. (AAH). The remaining US$11.6 million was financed through an amendment
of the Companys existing asset based Bank Loan Agreement.
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Prior to the agreement termination, Vitro America sold all of its accounts receivable,
on a revolving basis, to VVP Funding a wholly owned subsidiary of Vitro America. VVP
Funding, a special purpose entity, was formed prior to the execution of the agreement
for the sole purpose of buying and selling accounts receivable
and was designed to be bankruptcy remote. Also, Vitro America and VVP Funding entered
into an agreement with an unrelated financial institution whereby VVP Funding, on a
revolving basis and subject to the maintenance of certain financial and
receivables-based ratios, sold an undivided percentage ownership in all eligible
accounts receivable, as defined, for consideration composed of cash and Vitro America
retained an interests in securitized receivables. The maximum selling amount during the
years ended December 31, 2009 and 2008 was US$50 million. The agreement expired
annually each April, subject to annual renewal approval by the financial institution.
The transfer of undivided ownership interest from VVP Funding to the unrelated major
financial institution for cash consideration was accounted for as a sale of receivables
in accordance with US GAAP.The gross receivables sold totaled US$74 million at December 31, 2008, and are
reflected as a reduction of trade accounts receivable. The estimated fair value of the
retained undivided interests in securitized receivables at December 31, 2008 totaled US$
33.6 million, and was determined based on expected credit losses and allowance of 3%,
expected average receivable collection time of 52 days, and expected short-term
commercial paper rates of 2.3% per annum.Proceeds received by the Company from the revolving securitizations aggregated to US$
463 and US$32.5 million for the years ended December 31, 2008 and 2009, respectively,
and are included in cash flows from operating activities in the accompanying
consolidated statements of cash flows. Securitization fees totaled
US$2.1 millions and US$0.2 millions
 for the years ended December 31, 2008 and 2009, respectively, and are included
in general and administrative expenses in the accompanying amounts over 60 days past
due, totaled US$15 million at December 31, 2008, with credit losses totaling US$2.6
million for the year ended December 31, 2008. VVP continues to service the securitized
receivables under the agreement, receiving compensation that is approximately equal to
its cost of such servicing plus a reasonable profit margin; accordingly, no servicing
assets or liabilities were recorded. For the years ended December 31, 2008 and 2009, the
Company received servicing fees totaling US$0.6 and US$0.1 million, respectively.
 p)
    
    Fintech sale and leaseback transaction
 In December 2009, the Company completed a US$75 million transaction with Fintech
Advisory Limited, an affiliate of Fintech (Fintech Advisory), through the creation of
a Mexican trust (the Real Estate Trust). Vitro and its subsidiaries, Comercializadora
Álcali, S.A. de C.V. (Álcali), Vidriera Guadalajara, S.A. de C.V., Vidriera Monterrey,
S.A. de C.V., Vidriera Querétaro, S.A. de C.V., Vidriera Los Reyes, S.A. de C.V. and
Vidriera Toluca, S.A. de C.V. contributed seven real estate assets (industrial land) to
the Real Estate Trust, receiving US$75 million in cash contributed by Fintech Advisory
to acquire these assets. The Company entered into a 15 year lease agreement that allows
it to continue using the assets. The Company has the right to repurchase the title to
these real estate assets in exchange for US$126 million in cash in certain
circumstances. If it defaults on a payment under the lease agreement or if certain other
specified events were to occur, Fintech Advisory will have the right to sell such assets
to third parties (assuming the Company has not already repurchased the assets), with the
exception of certain parties such as competitors or creditors. If Fintech exercises its
right to sell or lease the real estate assets, this could adversely affect the Companys
business. Additionally, after the execution of a restructuring plan or agreement for the
restructuring of substantially all of the Companys financial indebtedness and the
satisfaction of certain other conditions precedent, Fintech may exercise one of two
options obtained on the same date to
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exchange the rights over the Real Estate Trust for shares of the Company and/or a sub-holding subsidiarys common shares. The option
related to the common shares of the Company, if exercised, would be for up to a maximum
of 93,099,849 shares that in the aggregate are currently held by the Companys Pension
and Stock Option Trusts, valued in accordance with the relevant valuation formula set
forth in the option agreement and would leave Fintech with up to a maximum equity stake
in the Company of approximately 24%. If those common shares are not sufficient to
satisfy the US$75 million option purchase, the remainder of the purchase option would be
fulfilled with the delivery to Fintech of the necessary shares of the sub-holding
subsidiary valued in accordance with the relevant valuation formula set forth in the
option agreement. Alternatively, Fintech may elect to exercise the second option, over
certain shares of the sub-holding subsidiary exclusively (only one of the two options
may be exercised). Fintechs equity options expire three years after a restructuring
plan or agreement for the restructuring of substantially all of the Companys financial
indebtedness is executed. The Company has the option to repurchase the sub-holding
subsidiarys shares during the three years following Fintechs exercise of either
option. In the event that Fintech exercises the option related to the Companys common
shares, a shareholders agreement among Fintech and the Companys controlling
shareholders will come into effect and would continue to be in effect as long as Fintech
holds at least a 5% ownership in Vitro. Pursuant to the terms of such shareholders
agreement, among other things, subject to certain limitations and qualifications,
Fintech specifically agreed to vote with Mr. Adrian Sada Gonzalez, Ms. Esther Cueva de
Sada, Ms. Maria Alejandra Sada Gonzalez and Mr. Adrian Sada Cueva, and the consent of
such persons (including Fintech) will be required with respect to certain fundamental
actions and voting matters affecting the Company. Moreover, under the shareholders
agreement, Fintech and the other shareholders party thereto will be subject to certain
transfer restrictions, in each case customary for a significant shareholder of a Company
like ours.
 For purposes of MFRS, the Company recognized a gain on sale as the sale-leaseback transaction was
accounted for as an operating lease. For purposes of US GAAP, the requirements of ASC 840-40 Sale
Leaseback Transactions (previously SFAS 98, Accounting for Leases) require that a sale-leaseback
transaction involving real estate, including real estate with equipment, that includes any
continuing involvement other than a normal leaseback in which the seller-lessee intends to actively
use the property during the lease should be accounted for by the deposit method or as a financing.
The level of continuing involvement is other than normal as Vitro has the option to repurchase the
land subject to the lease and as a result the sale leaseback transaction has been accounted for as
a deposit as per the requirements of ASC 30-20 Real Estate Sales (previously SFAS 66, Accounting
for Sales of Real Estate). Under the deposit method, the Company did not recognize any profit, did
not record notes receivable, and continues to report in its financial statements the property. The
US$75 million in cash received was recorded as a deposit on the contract on the property.
Additionally, for purpose of US GAAP, the options held by Fintech, which are interrelated with the
sale-leaseback transaction embody an unconditional obligation that Vitro must or may settle by
issuing a variable number of its equity shares meet the definition of a liability in accordance
with ASC 480 Financial Instruments with Characteristics of Debt and Equity (previously SFAS 150,
Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity).
The fair value of the options as of December 31, 2009 is US$78.4 million.
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q)
    
    Impact of changes in income tax lawAs a result of changes to the Mexican Income Tax Law, which became effective in 2010 the
Company recorded an additional income tax liability of Ps. 237. For purposes of MFRS, the
Company recorded the corresponding charge directly in stockholders equity. Under U.S.
GAAP, the Company reflected the effects within current earnings.r)
    
    Other differences and supplemental U.S. GAAP disclosures1.
    
    Reclassifications:(a)
    
    Gain or loss on sale of assets  The gain or loss on sale of assets that do not meet
the definition of a component of a business as described in ASC
360-10-35 Impairment or Disposal of long-lived Assets
(previously SFAS No. 144, Impairment of long-lived Assets) are included in
operating income in the Companys U.S. GAAP consolidated financial statements. Gains or
losses on sales of assets not presented as discontinued operations under MFRS are included
in other expenses in the Companys consolidated MFRS financial statements (see note 16).(b)
    
    Classification of workers profit sharing  Under MFRS, statutory employee profit
sharing is presented under other income and expenses. In the Companys U.S. GAAP
statements of operations, workers profit sharing expense is classified as an operating
expense.(c)
    
    Restructuring charges  During 2008 and 2009, the Company restructured certain
operating units and its corporate and administrative functions. For MFRS purposes the
corresponding costs met the definition of a restructuring charge and were included in
other expenses in the Companys consolidated financial statements, but for U.S. GAAP
purposes the Company applied ASC 712 (previously SFAS No. 112). These costs are included
in general and administrative expenses in the accompanying U.S. GAAP consolidated
statements of operations.(d)
    
    In August, 2010 the Company refinanced the 44.8 million Euro credit line for its
subsidiary in Spain, Vitro
Cristalglass, S.L., extending the term for three years from the agreement date. As a result,
the Company
reclassified from short term to long term debt an amount of
9.4 million Euros.2.
    
    Equity method investments Through July 27, 2007, the Company accounted for its
50% joint venture investments in Vitro AFG under the equity method for US GAAP purposes
and under proportionate consolidation method for MFRS. Subsequent to acquiring the
remaining 50% of the outstanding shares and assuming complete control over its
operations, the Company began to consolidate its wholly-owned subsidiary (see note 20 b)
for both MFRS and U.S. GAAP.Summary information of AFG is as follows:
 AFG
    
    2007*Net sales
    
    Ps.
    368Net income (loss)
    
    
    (134
    )Cash flow information:Operating activities
    
    
    (6
    )
 *
    
    For the period from January 1 through July 2007.  F-75




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3.
    
    Fair value of financial instruments ASC 825-10-20 Fair Value of Financial
Instruments, (previously SFAS No. 107 Disclosures about fair value of Financial
Instruments), requires disclosure of the estimated fair values of certain financial
instruments. The carrying amounts and estimated fair values of the Companys significant
financial instruments not previously disclosed in these financial statements were as
follows:
 December 31, 2008
    
    
    December 31, 2009Carrying
    
    
    
    
    
    
    Carrying
    
    
    FairAmount
    
    
    Fair Value
    
    
    Amount
    
    
    ValueLiabilities:Short-term borrowings
    
    Ps.
    2,309
    
    
    Ps.
    2,166
    
    
    Ps.
    1,680
    
    
    Ps.
    1,568Derivative liabilities
    
    
    3,777
    
    
    
    1,499
    
    
    
    3,328
    
    
    
    1,541Long-term debt(1)
    
    
    19,753
    
    
    
    7,808
    
    
    
    18,421
    
    
    
    9,054Accrued interests
    
    
    735
    
    
    
    230
    
    
    
    2,428
    
    
    
    1,044
 
 (1)
    
    Includes current portion of long-term debt.     
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
 
   Valuation Techniques.
     F-77




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Fair Value Measurements at Reporting Date UsingQuoted PricesIn Active
    
    
    SignificantMarkets for
    
    
    Other
    
    
    SignificantIdentical
    
    
    Observable
    
    
    UnobservableAssets
    
    
    Inputs
    
    
    InputsDescription
    
    Amount
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Derivative financial instruments
    
    Ps.
    379
    
    
    
    
    
    
    Ps.
    379
    
    
    Ps.
    Retained undivided interests in securitized receivables
    
    
    1,213
    
    
    
    
    
    
    
    
    
    
    
    1,213Total
    
    Ps.
    1,592
    
    
    
    
    
    
    Ps.
    379
    
    
    Ps.
    1,213
  Fair Value Measurements at Reporting Date UsingQuoted PricesIn Active
    
    
    SignificantMarkets for
    
    
    Other
    
    
    SignificantIdentical
    
    
    Observable
    
    
    UnobservableAssets
    
    
    Inputs
    
    
    InputsDescription
    
    Amount
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Derivative financial instruments
    
    Ps.
    (106
    )
    
    
    
    
    
    Ps.
    (106
    )
    
    Ps.
    Fintech option liability
    
    
    (1,154
    )
    
    
    
    
    
    
    (1,154
    )Retained undivided interests in securitized receivables
    
    
    523
    
    
    
    
    
    
    
    
    
    
    
    523Total
    
    Ps.
    (737
    )
    
    
    
    
    
    Ps.
    (1,260
    )
    
    Ps.
    523
  Fair value of non-financial assets and non-financial liabilities
 Fair Value Measurements and Disclosures
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IntangiblesGoodwill and OtherRecognition and Measurement of
an Impairment Loss
 Fair Value HierarchyBalance at
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    TotalDecember 31,
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    impairmentDescription
    
    2009
    
    
    Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    chargeGoodwill
    
    Ps.
    862
    
    
    
    
    
    
    
    
    
    
    Ps.
    862
    
    
    Ps.
    41
 Effects of derivative instruments in the statements of income
 The net losses recognized related to the Companys derivative instruments in the
consolidated statements of income in 2007, 2008 and 2009, were Ps. 203, Ps. 3,691 and Ps.
578, respectively.4.
    
    Earnings per share in accordance with U.S. GAAP Earnings per share in accordance
with U.S. GAAP is based on the provisions of ASC 260 Earnings per Share (previously
SFAS No. 128, Earnings Per Share). The methodologies required by MFRS and U.S. GAAP as
it relates to the calculation and presentation of the Companys basic and diluted
earnings per share differs only in the net income (loss) utilized for purposes of the
calculation.Income (loss) per common share computed in accordance with U.S. GAAP is presented below:
 Year ended December 31,2007
    
    
    2008
    
    
    2009Basic and diluted (loss) income per common share
    
    Ps.
    1.37
    
    
    Ps.
    (18.57
    )
    
    Ps.
    (7.54
    )
 5.
    
    Comprehensive income- Under U.S. GAAP, ASC 220 Comprehensive Income (previously
SFAS No. 130, Reporting Comprehensive Income), establishes standards for reporting and
display of comprehensive income and its components. Vitros items of other comprehensive
income are: loss from holding nonmonetary assets, unrealized gain (loss) on long-term
investments, the currency translation adjustment and the amortization of unrecognized
items related to its labor obligations.See note 25 s), for consolidated financial statements presented on a U.S. GAAP basis, which
reflect the provisions of ASC 220.6.
    
    Share-based Payment In 2006 the Company adopted and currently applies ASC 718
Compensation-Stock Compensation (previously SFAS No. 123(R) Share-Based Payment), in
accounting for its share-based payment awards. The Companys employee stock option plan
was adopted in 1998. The disclosures required under U.S. GAAP as they relate to this plan
are included in note 14 b).7.
    
    Restrictions that limit the payment of dividends by the registrant The Company
derives substantially all of its operating income from advances, fees, interest and
dividends paid to the Company by its subsidiaries. Accordingly, in paying the principal
of, premium, if any, interest on, and additional amounts, if any, with respect to the
Companys indebtedness, the Company relies on income from advances, fees, interest and
dividends from its subsidiaries, as well as income from the disposition of one or more
of its subsidiaries, interests therein or assets thereof. Therefore, the Companys
subsidiaries ability to pay such dividends or make such distributions are subject to (i)
such subsidiaries having net income and the requisite amount of paid-in capital under
Mexican law, (ii) such subsidiaries shareholders (including the Companys joint venture
partners) having approved the payment of such
dividends at the annual general ordinary shareholders meeting and (iii) applicable laws
and, in certain circumstances, restrictions contained in joint venture and debt agreements.
At December 31, 2007, 2008 and 2009, the net assets of the Companys subsidiaries were not
restricted.
  F-79




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8.
    
    Concentration of credit risk The Company sells products to customers primarily in
Mexico, the U.S. and Europe, although no single customer accounted for more than 8% of
consolidated net sales in 2007, 2008 and 2009, the Company has customers that are
significant to its business units and to its consolidated financial statements taken as a
whole. The Companys three largest customers accounted for approximately 15% of its
consolidated net sales in 2007, 2008 and 2009. The Company conducts periodic evaluations
of its customers financial condition and generally does not require collateral. The
Company does not believe that significant risk of loss from a concentration of credit
risk exists given the large number of customers that comprise its customer base and their
geographical dispersion. The Company also believes that its potential credit risk is
adequately covered by the allowance for doubtful accounts.9.
    
    Irrevocable Standby Letters of Credit As of December 31, 2008 and 2009 VVP
Holdings Corp. (one of the Companys U.S. subsidiaries), had outstanding irrevocable
standby letters of credit issued, for insurance purposes, totaling US$14 million.10.
    
    Vicap Notes 11 3/8% Vicap Notes registered under the U.S. Securities Act of 1933
were issued by Vicap (now known as SOFIVSA and in 2008 SOFIVSA merged with COVISA), the
Companys 100% owned finance subsidiary, and fully and unconditionally guaranteed by
Vitro. There are no restrictions on the ability of Vitro to obtain funds from COVISA by
dividend or loan. The Vicap Notes were repaid prior to their maturity date in March
2007.11.
    
    Statement of Changes in Financial Position Under MFRS, prior to 2008, Company
presented a consolidated statement of changes in financial position in accordance with
Bulletin B-12, Statement of Changes in Financial Position, which identifies the
generation and application of resources by the differences between beginning and ending
balance sheet items presented in constant Mexican pesos. Bulletin B-12 also requires that
monetary and foreign exchange gains and losses be treated as cash items for the
determination of resources generated by operating activities.In accordance with U.S. GAAP, the Company follows ASC 230 Statement of Cash Flows
(previously SFAS No. 95, Statement of Cash Flows), which is presented in historical
Mexican pesos, without the effects of inflation.As mentioned in note 3 a), NIF B-2, is effective January 1, 2008. NIF B-2 requires that
the statement show a companys cash inflows and outflows during the period and establishes
general rules for the presentation, structure and preparation of a cash flow statement and
replaces the statement of changes in financial position on a prospective basis. Differences
continue to exist compared to U.S. GAAP in the presentation for items such as interest
received and paid.12.
    
    Recently Issued Accounting Standards.The following accounting standards have been
issued under U.S. GAAP, the application of which is required as indicated below.The Company adopted the disclosure requirements of ASC 820-10 (SFAS No. 157) in relation to
nonfinancial assets and liabilities in 2009. See Note 25r3 for related disclosures.In January 2009, the Company adopted FASB ASC 810-10 (SFAS No. 160) which establishes the
accounting and reporting standards for the noncontrolling interest in a subsidiary and the
deconsolidation of a subsidiary, and also amends certain consolidation guidance for
consistency with revised standards regarding business
combinations. The accounting provisions of FASB ASC 810-10 (SFAS No. 160) must be applied
prospectively as of the beginning of the fiscal year in which the provisions are initially
adopted, while the presentation and disclosure requirements must be applied
retrospectively, to provide comparability in the financial statements. FASB ASC 810-10
(SFAS No. 160) was effective for fiscal years, and interim periods within those fiscal
years, beginning on or after December 15, 2008. As a result of adopting this standard, the
Company reclassified the noncontrolling interest to stockholders equity in the year of
adoption and in prior periods for purposes of comparability (see Note 25a).
  F-80




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In January 2009, the Company adopted FASB ASC 805-10 (SFAS No. 141(R)), which, among other
changes, requires an acquirer in a business combination to (a) recognize assets acquired,
liabilities assumed, and any noncontrolling interest in the acquiree at fair value as of
the acquisition date, and (b) expense all acquisition-related costs. FASB ASC 805-10 (SFAS
No. 141(R)), also amends FASB ASC 740-10 (SFAS No. 109) to require that any reductions to
an acquired entitys valuation allowances on deferred taxes and acquired tax contingencies
that occur after the measurement period be recorded as a component of income tax expense.
FASB ASC 805-10 (SFAS No. 141(R)) must be applied prospectively to all business
combinations for which the acquisition date occurs during fiscal years beginning on or
after December 15, 2008, with the exception to the amendments to ASC 740-10 (SFAS No. 109),
which will also be applied to business combinations with acquisition dates prior to the
effective date of this standard. The adoption of this guidance did not have an impact on
the Companys consolidated financial statements and related disclosures and any future
impact will be dependent on any future acquisitions.In July 2009, the Company adopted FASB ASC 855-10 (SFAS 165, Subsequent Events). FASB ASC
855-10 (SFAS 165) establishes accounting and reporting standards for events that occur
after the balance sheet date but before financial statements are issued or are available to
be issued. In addition, FASB ASC 855-10 (SFAS 165) requires the disclosure of the date
through which an entity has evaluated subsequent events and the basis for selecting that
date, that is, whether that date represents the date the financial statements were issued
or were available to be issued. FASB ASC 855-10 (SFAS 165) was effective for fiscal years
and interim periods ending after June 15, 2009.
 
    
    On February 24, 2011, the issuance of the consolidated financial
statements, which include Notes 25 and 26, was authorized by Hugo A. Lara García,
Chief Executive Officer and Claudio L. Del Valle Cabello, Chief Financial and
Administrative Officer.
    
    The Company has evaluated events subsequent to December 31, 2009 to
assess the need for potential recognition or disclosure in the accompanying
consolidated financial statements. Such events were evaluated through February 24,
2011, the date these consolidated financial statements were available to be issued and
included the transactions disclosed in Note 23 and below:
 DFI claims
  Status of the Debt RestructuringProcess
  Natural Disasters
      Receivable from Sale of Real Estate
  Banamex Litigation
  On June 12, 2009, the FASB issued ASC 860-10 (SFAS No. 166, Accounting for Transfer of
Financial Assets  an amendment of FASB Statement No. 140), which eliminates the concept
of a qualifying special purpose entity (QSPE) and modifies the derecognition provisions
of a previously issued accounting standard. FASB ASC 860-10 (SFAS No. 166) also required
additional disclosures which focus on the transferors continuing involvement with the
transferred assets and the related risks retained. FASB ASC 860-10 (SFAS No. 166) is
effective for financial asset transfers occurring after the beginning of an entitys first
fiscal year that begins after November 15, 2009. Early adoption is prohibited. The Company
expects the adoption of this standard to impact its consolidated financial statements as it
relates to its securitization transactions due to the elimination of the concept of a
qualifying special purposes entity.
  F-81




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On June 12, 2009, the FASB issued ASC 810-10 (SFAS No. 167, Amendments to FASB
Interpretation No. 46 (R)), which amends the consolidation guidance that applies to
variable interest entities. The new guidance requires an entity to carefully reconsider its
previous consolidation conclusions, including (1) whether an entity is a variable interest
entity (VIE), (2) whether the enterprise is the VIEs primary beneficiary, and (3) what
type of financial statement disclosures are required. FASB ASC 810-10 (SFAS No. 167) is
effective as of the beginning of the first fiscal year that begins after November 15, 2009.
The amendments to the consolidation guidance affect all entities and enterprises currently
within the scope of FASB ASC 810-10 (SFAS No. 167), as well as qualifying special-purpose
entities that are currently outside the scope of FASB ASC 810-10 (FIN 46(R)). Early
adoption is prohibited. The Company expects the adoption of this standard to impact its
consolidated financial statements as it relates to its securitization transactions.In October 2009, the FASB issued Accounting Standards Update (ASU) 2009-13, which contains
new guidance on accounting for revenue arrangements with multiple deliverables. When vendor
specific objective evidence or third party evidence for deliverables in an arrangement
cannot be determined, a best estimate of the selling price is required to separate
deliverables and allocate arrangement consideration using the relative selling price
method. The new guidance includes new disclosure requirements on how the application of the
relative selling price method affects the timing and amount of revenue recognition. The
guidance in the ASU will be effective prospectively for revenue arrangements entered into
or materially modified in fiscal years beginning after June 15, 2010. Early adoption is
permitted. The adoption of this standard is not expected to impact the Companys
consolidated financial position, results of operations or cash flows.On January 21, 2010, the FASB issued ASU 2010-06. The ASU amends ASC 820 (SFAS No. 157) to
add new requirements for disclosures about transfers into and out of Levels 1 and 2 and
separate disclosures about purchases, sales, issuances, and settlements relating to Level 3
measurements. It also clarifies existing fair value disclosures about the level of
disaggregation and about inputs and valuation techniques used to measure fair value. This
ASU amends guidance on employers disclosures about postretirement benefit plan assets
under ASC 715, Compensation  Retirement Benefits, to require that disclosures be provided
by classes of assets instead of by major categories of assets. The guidance in the ASU is
effective for the first reporting period (including interim periods) beginning after
December 15, 2009, except for the requirement to provide the Level 3 activity of purchases,
sales, issuances, and settlements on a gross basis, which will be effective for fiscal
years beginning after December 15, 2010, and for interim periods within those fiscal years.
In the period of initial adoption, entities will not be required to provide the amended
disclosures for any previous periods presented for comparative purposes. However, those
disclosures are required for periods ending after initial adoption. Early adoption is
permitted.13.
    
    Valuation and Qualifying Accounts Changes in the Companys allowance for
doubtful accounts and deferred tax valuation allowance for the years ended December 31,
2009, 2008 and 2007 is as follows:
 Changes
    
    
    Balance atBalance at the
    
    
    
    
    
    
    
    
    
    
    for effects
    
    
    the end ofbeginning of year
    
    
    Additions
    
    
    Deductions
    
    
    of inflation
    
    
    the yearYear ended December 31, 2009Allowance for doubtful accounts
    
    Ps.
    368
    
    
    Ps.
    340
    
    
    Ps.
    338
    
    
    Ps.
    
    
    
    Ps.
    370Deferred tax valuation allowance
    
    
    599
    
    
    
    276
    
    
    
    514
    
    
    
    (22
    )
    
    
    339Ps.
    967
    
    
    Ps.
    616
    
    
    Ps.
    852
    
    
    Ps.
    (22
    )
    
    Ps.
    709Year ended December 31, 2008Allowance for doubtful accounts
    
    Ps.
    262
    
    
    Ps.
    113
    
    
    Ps.
    7
    
    
    Ps.
    
    
    
    Ps.
    368Deferred tax valuation allowance
    
    
    286
    
    
    
    313
    
    
    
    
    
    
    
    
    
    
    
    599Ps.
    548
    
    
    Ps.
    426
    
    
    Ps.
    7
    
    
    Ps.
    
    
    
    Ps.
    967Year ended December 31, 2007Allowance for doubtful accounts
    
    Ps.
    213
    
    
    Ps.
    115
    
    
    Ps.
    59
    
    
    Ps.
    (7
    )
    
    Ps.
    262Deferred tax valuation allowance
    
    
    269
    
    
    
    159
    
    
    
    132
    
    
    
    (10
    )
    
    
    286Ps.
    482
    
    
    Ps.
    274
    
    
    Ps.
    191
    
    
    Ps.
    (17
    )
    
    Ps.
    548
  F-82




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##### Table of Contents



s)
    
    Comparative consolidated financial statements  U.S. GAAP
 CONSOLIDATED BALANCE SHEETS

U.S. GAAP BASIS
 December 31,2008
    
    
    2009AssetsCash and cash equivalents
    
    Ps.
    1,428
    
    
    Ps.
    2,616Trade receivables, net
    
    
    1,492
    
    
    
    1,785Retained undivided interests in securitized receivables
    
    
    1,213
    
    
    
    523Other receivables
    
    
    1,804
    
    
    
    962Inventories
    
    
    4,178
    
    
    
    3,172Land and buildings held for sale
    
    
    40
    
    
    
    55Deferred income taxes
    
    
    1,713
    
    
    
    1,265Current assets
    
    
    11,868
    
    
    
    10,378Investment in unconsolidated and associated companies
    
    
    996
    
    
    
    886Land and buildings, net
    
    
    8,181
    
    
    
    7,470Machinery and equipment, net
    
    
    7,693
    
    
    
    7,943Construction in progress
    
    
    1,332
    
    
    
    563Goodwill
    
    
    913
    
    
    
    862Deferred income taxes
    
    
    471
    
    
    
    947Other assets
    
    
    1,335
    
    
    
    1,096Total assets
    
    Ps.
    32,789
    
    
    Ps.
    30,145LiabilitiesShort-term borrowings
    
    Ps.
    1,601
    
    
    Ps.
    1,000Current maturities of long-term debt
    
    
    16,887
    
    
    
    16,331Trade payables
    
    
    2,355
    
    
    
    1,597Derivative financial instruments
    
    
    3,709
    
    
    
    3,260Sundry creditors
    
    
    2,399
    
    
    
    1,318Accrued expenses
    
    
    1,317
    
    
    
    3,138Current liabilities
    
    
    28,268
    
    
    
    26,644Long-term debt
    
    
    1,755
    
    
    
    2,943Employee retirement obligations
    
    
    2,274
    
    
    
    2,359Deferred income taxes
    
    
    11
    
    
    
    Other long-term liabilities
    
    
    265
    
    
    
    1,118Long-term liabilities
    
    
    4,305
    
    
    
    6,420Total liabilities
    
    
    32,573
    
    
    
    33,064Stockholders Equity (Deficit)Controlling interest
    
    
    (1,164
    )
    
    
    (4,335
    )Noncontrolling interest
    
    
    1,380
    
    
    
    1,416Total stockholders equity (deficit)
    
    
    216
    
    
    
    (2,919
    )Total liabilities and stockholders equity
    
    Ps.
    32,789
    
    
    Ps.
    30,145
  F-83




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##### Table of Contents



CONSOLIDATED STATEMENTS OF OPERATIONS

U.S. GAAP BASIS
 Year ended December 31,2007
    
    
    2008
    
    
    2009Net sales
    
    Ps.
    26,159
    
    
    Ps.
    26,854
    
    
    Ps.
    23,991Cost of sales
    
    
    18,429
    
    
    
    19,736
    
    
    
    17,199Gross profit
    
    
    7,730
    
    
    
    7,118
    
    
    
    6,792Selling, general and administrative expenses, net
    
    
    5,206
    
    
    
    5,664
    
    
    
    6,014Operating income
    
    
    2,524
    
    
    
    1,454
    
    
    
    778Interest expense
    
    
    1,935
    
    
    
    2,103
    
    
    
    3,008Derivative instruments
    
    
    203
    
    
    
    3,691
    
    
    
    578Interest income
    
    
    (169
    )
    
    
    (63
    )
    
    
    (51
    )Exchange loss (gain), net
    
    
    83
    
    
    
    3,580
    
    
    
    (976
    )Gain from monetary position
    
    
    (504
    )
    
    
    
    
    
    
    Total financing cost
    
    
    1,548
    
    
    
    9,311
    
    
    
    2,559Operating income (loss) after financing cost
    
    
    976
    
    
    
    (7,857
    )
    
    
    (1,781
    )Other income (expenses), net
    
    
    (491
    )
    
    
    21
    
    
    
    (15
    )Income (loss)  before taxes
    
    
    485
    
    
    
    (7,836
    )
    
    
    (1,796
    )Income and asset tax (benefit) expense
    
    
    (74
    )
    
    
    (1,489
    )
    
    
    767Share in earnings (loss) of unconsolidated associated companies
    
    
    17
    
    
    
    21
    
    
    
    (24
    )Consolidated net income (loss)
    
    Ps.
    576
    
    
    Ps.
    (6,368
    )
    
    Ps.
    (2,587
    )Net noncontrolling interest income (loss)
    
    Ps.
    107
    
    
    Ps.
    (31
    )
    
    Ps.
    29Net controlling interest loss
    
    
    469
    
    
    
    (6,337
    )
    
    
    (2,616
    )Ps.
    576
    
    
    Ps.
    6,368
    
    
    Ps.
    2,587Income (loss) per share
    
    Ps.
    1.69
    
    
    Ps.
    (18.57
    )
    
    Ps.
    (7.46
    )Noncontrolling interest (income) loss
    
    
    (0.32
    )
    
    
    0.09
    
    
    
    (0.08
    )Net controlling interest income (loss)
    
    Ps.
    1.37
    
    
    
    (18.48
    )
    
    
    (7.54
    )
  F-84




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##### Table of Contents



CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY

U.S. GAAP BASIS
 2007
    
    
    2008
    
    
    2009Stockholders equity at the beginning of the year
    
    Ps.
    6,825
    
    
    Ps.
    7,062
    
    
    Ps.
    216Comprehensive income (loss):Net income (loss)
    
    
    576
    
    
    
    (6,368
    )
    
    
    (2,587
    )Other comprehensive income (loss):Employee retirement obligations
    
    
    (210
    )
    
    
    (553
    )
    
    
    (476
    )Gain from holding nonmonetary assets
    
    
    (141
    )
    
    
    
    
    
    
    Cumulative translation adjustment
    
    
    11
    
    
    
    661
    
    
    
    (77
    )Deferred income taxes
    
    
    235
    
    
    
    98
    
    
    
    15Effect of applying NIF B-10
    
    
    32Other comprehensive (loss) income
    
    
    (73
    )
    
    
    206
    
    
    
    (538
    )Comprehensive income (loss)
    
    
    503
    
    
    
    (6,162
    )
    
    
    (3,125
    )Bulletin B-15 adjustments
    
    
    (72
    )
    
    
    
    
    
    
    Dividends declared and paid
    
    
    (136
    )
    
    
    (143
    )
    
    
    Sale of treasury stock
    
    
    
    
    
    
    75
    
    
    
    Dilution of noncontrolling interest
    
    
    (58
    )
    
    
    (616
    )
    
    
    (10
    )Stockholders equity (deficit) at the end of the year
    
    Ps.
    7,062
    
    
    Ps.
    216
    
    
    Ps.
    (2,919
    )
  F-85




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##### Table of Contents



CONSOLIDATED STATEMENTS OF CASH FLOWS

U.S. GAAP BASIS
 Year ended December 31,2007
    
    
    2008
    
    
    2009Operating Activities:Net income (loss)
    
    Ps.
    576
    
    
    Ps.
    (6,368
    )
    
    Ps.
    (2,587
    )Effect of constant pesos and monetary gain
    
    
    (531
    )
    
    
    
    
    
    
    Net income (loss)
    
    
    (45
    )
    
    
    (6,368
    )
    
    
    (2,587
    )Add (deduct) non-cash items:Depreciation and amortization
    
    
    1,400
    
    
    
    1,500
    
    
    
    1,466Provision for employee retirement obligations and other long-term liabilities
    
    
    344
    
    
    
    437
    
    
    
    416Impairment
    
    
    
    
    
    
    239
    
    
    
    207Amortization of debt issuance costs
    
    
    166
    
    
    
    55
    
    
    
    80Share in earnings of unconsolidated associated companies
    
    
    (17
    )
    
    
    (21
    )
    
    
    24Dividends received from unconsolidated associated companies
    
    
    28
    
    
    
    Derivative financial instruments
    
    
    208
    
    
    
    3,691
    
    
    
    578Loss from sale of subsidiaries
    
    
    12
    
    
    
    (Gain) loss from sale of fixed assets
    
    
    (371
    )
    
    
    (488
    )
    
    
    69Deferred income tax and workers profit sharing
    
    
    (404
    )
    
    
    (1,806
    )
    
    
    1,125Exchange (gain) loss
    
    
    145
    
    
    
    3,972
    
    
    
    (1,171
    )Changes in operating assets and liabilitiesIncrease (decrease) in trade payables
    
    
    278
    
    
    
    (291
    )
    
    
    (587
    )(Increase) decrease in trade receivables
    
    
    (181
    )
    
    
    (12
    )
    
    
    1,049(Increase) decrease in inventories
    
    
    (265
    )
    
    
    (17
    )
    
    
    871Changes in other current assets and liabilities
    
    
    467
    
    
    
    (42
    )
    
    
    2,376Employee retirement obligations
    
    
    (472
    )
    
    
    (425
    )
    
    
    (809
    )Derivative financial instruments
    
    
    
    
    
    
    (1,138
    )
    
    
    (824
    )Net cash provided by (used in) operating activities
    
    
    1,383
    
    
    
    (714
    )
    
    
    2,283Investing Activities:Sale of land, buildings, machinery and equipment
    
    
    71
    
    
    
    20
    
    
    
    437Investment in land, buildings, machinery and equipment
    
    
    (2,146
    )
    
    
    (1,550
    )
    
    
    (1,009
    )Sale of subsidiaries and associated companies
    
    
    38
    
    
    
    
    
    
    
    Investment in subsidiaries
    
    
    (177
    )
    
    
    (63
    )
    
    
    (454
    )Restricted cash
    
    
    (327
    )
    
    
    314
    
    
    
    57Capital distribution to noncontrolling interest
    
    
    (21
    )
    
    
    
    
    
    
    Deferred charges and other long-term assets
    
    
    (316
    )
    
    
    70
    
    
    
    (155
    )Net cash used in investing activities
    
    
    (2,878
    )
    
    
    (1,209
    )
    
    
    (1,124
    )Financing Activities:Proceeds from short-term borrowings
    
    
    2,413
    
    
    
    1,072Proceeds from long-term debt
    
    
    13,581
    
    
    
    2,018
    
    
    
    2,532Payment of short-term borrowings
    
    
    (4,644
    )
    
    
    
    
    
    
    (15
    )Payment of long-term debt
    
    
    (9,201
    )
    
    
    (1,020
    )
    
    
    (2,468
    )Debt issuance costs
    
    
    (285
    )
    
    
    (63
    )
    
    
    (11
    )(Purchase) sale of treasury stock
    
    
    (1
    )
    
    
    75
    
    
    
    Dividends paid to stockholders of Vitro
    
    
    (133
    )
    
    
    (143
    )
    
    
    Dividends paid to noncontrolling interests
    
    
    (47
    )
    
    
    (109
    )
    
    
    (14
    )
  F-86




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##### Table of Contents



Year ended December 31,2007
    
    
    2008
    
    
    2009Other financing activities
    
    
    279
    
    
    
    (36
    )
    
    
    5Net cash provided by financing activities
    
    
    1,962
    
    
    
    1,794
    
    
    
    29Net increase (decrease) in cash and cash equivalents
    
    
    467
    
    
    
    (129
    )
    
    
    1,188Exchange rate effect on cash and cash equivalents
    
    
    (18
    )
    
    
    66
    
    
    
    1Balance at beginning of year
    
    
    1,042
    
    
    
    1,491
    
    
    
    1,428Balance at end of year
    
    Ps.
    1,491
    
    
    Ps.
    1,428
    
    
    Ps.
    2,616Net cash provided by operating activities reflects net cash payments of
interest and income taxes as follows:Interest
    
    Ps.
    1,369
    
    
    Ps.
    1,993
    
    
    Ps.
    943Income taxes
    
    
    441
    
    
    
    185
    
    
    
    358
  F-87




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##### Table of Contents



26.
    
    Guarantor and non-guarantor financial informationAs disclosed in note 10), the Company issued US$700 million of senior guaranteed notes due
February 1, 2017 callable after year 2012 at a coupon of a 9.125% and US$300 million of senior
unsecured notes due February 1, 2012 not callable for the notes life at a coupon of 8.65%
(together the Notes) principally to refinance existing third-party debt at the Vitro holding
company level, substantially all of the third-party debt at its subsidiary VENA and certain
third-party debt at its less than 100%-owned subsidiary Viméxico.The obligations of the Company pursuant to each series of the Notes, including any repurchase
obligation resulting from a change of control, are unconditionally guaranteed, jointly and
severally, on an unsecured basis, by most of Vitros directly and indirectly owned subsidiaries.
The following Vitro subsidiaries are designated as guarantors as of December 31, 2009: Viméxico,
VENA, Vitro Corporativo, S.A. de C.V., Vidriera Monterrey, S.A. de C.V., Vidriera Los Reyes, S.A.
de C.V., Vidriera Guadalajara, S.A. de C.V., Vidriera Querétaro, S.A. de C.V., Vidriera Toluca,
S.A. de C.V., Compañía Vidriera, S.A. de C.V., Fabricación de Máquinas, S.A. de C.V., Servicios
Integrales de Acabados, S.A. de C.V.,Vitro Packaging de México, S. de R.L. de C.V., Industria del
Alcali, S.A. de C.V., Servicios Vitro Cosmos, S.A. de C.V., Servicios Vidriera los Reyes, S.A. de
C.V., Servicios Vidriera Guadalajara, S.A. de C.V., Servicios Vidriera Querétaro, S.A. de C.V.,
Servicios Vidriera Toluca, S.A. de C.V., Vidrio Lux, S.A., Vitro Packaging, Inc., Vitro Europa,
Ltd., American Asset Holdings, Corp., Crisa Holding Corp., Troper Inc., Troper Services, Inc.,
Amsilco Holdings, Inc., BBO Holdings, Inc., Crisa Corp., Vitro Automotriz, S.A. de C.V., Vitro
Flex, S.A. de C.V, Vitro Vidrio y Cristal, S.A. de C.V., Vitro Flotado Cubiertas, S.A. de C.V.,
Distribuidor Vidriero Lan, S.A. de C.V., Vitrocar, S.A. de C.V., Cristales Inastillables de México,
S.A. de C.V., Vidrio Plano de México, S.A. de C.V., Vau, S.A. de C.V., VVP Holdings Corp., VVP
Autoglass, Inc., Vitro America, Inc., Super Sky Products, Inc., Super Sky International, Inc., VVP
Finance Corp., Super Sky Constructors, Inc., Vitro Colombia, S.A., VVP Europa Holdings, B.V., Vitro
do Brasil Industria e Comercio, Ltda., Vitro Chemicals, Fibers and Mining, Inc., Vitro Global, Ltd,
Vidrio y Cristal del Noroeste, S.A. Vidrio Plano, S.A. de C.V., Distribuidora de Vidrio y Cristal,
S.A. de C.V., Vidrio Plano de Mexicali, S.A. de C.V., and FIC Regiomontano, S.A.P.I de C.V.
Certain of these subsidiaries, including VVP Holdings Corp. and its five subsidiaries, Vitrocar,
S.A. de C.V., Vitro Vidrio y Cristal, S.A. de C.V. and Vitrio Automotriz, S.A. de C.V. were sold
from Vimexico to Vitro during 2009. These sales are reflected in the columnar presentation
described below.The following condensed consolidating financial information includes separate columnar information
for:
 
    
    Vitro (the parent company issuer),
    
    Vitros combined 100%-owned guarantors, including two Swiss-domiciled subsidiary
guarantors 100%-owned by Vitro and two Swiss-domiciled subsidiary guarantors 100%-owned by
VENA,
    
    Combined information for Viméxico and its 15 100%-owned subsidiaries plus (a) VVP
Holdings and its five subsidiaries, 100%-owned subsidiary guarantors which were sold from
Viméxico to Vitro in January 2009, (b) Vitrocar, a 100%-owned subsidiary guarantor which
was sold from Viméxico to Vitro in December 2009 and (c) Vitro Vidrio y Cristal and Vitrio
Automotriz, non-100% owned subsidiary guarantors which were sold from Viméxico to Vitro in
December 2009 (financial information for Viméxico, its 100%-owned subsidiaries and the
additional entities described herein is included in note 23 of Viméxicos consolidated
financial statements),
    
    Vitros combined non-guarantors (combined amounts of Vitros non-guarantor subsidiaries
not already included in the consolidated Viméxico column,)
   F-88




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##### Table of Contents



a)
    
    Supplemental condensed consolidating balance sheets presented in accordance with MFRS:
 CombinedCombined
    
    
    Wholly-
    
    
    Adjustments
    
    
    
    
    
    
    AdjustmentsConsolidated
    
    
    Owned
    
    
    Viméxico and
    
    
    Vitro Non-
    
    
    and
    
    
    VitroAs of December 31, 2008
    
    Vitro
    
    
    Guarantors
    
    
    Subsidiaries
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedCash
    
    Ps.
    922
    
    
    Ps.
    169
    
    
    Ps.
    271
    
    
    Ps.
    66
    
    
    Ps.
    
    
    
    Ps.
    1,428Trade receivables and other current assets
    
    
    6,282
    
    
    
    5,138
    
    
    
    3,912
    
    
    
    521
    
    
    
    (9,478
    )
    
    
    6,375Inventories, net
    
    
    
    
    
    
    1,991
    
    
    
    2,199
    
    
    
    4
    
    
    
    (16
    )
    
    
    4,178Current assets
    
    
    7,204
    
    
    
    7,298
    
    
    
    6,382
    
    
    
    591
    
    
    
    (9,494
    )
    
    
    11,981Property, plant and equipment, net
    
    
    1,377
    
    
    
    8,738
    
    
    
    5,813
    
    
    
    1,843
    
    
    
    (498
    )
    
    
    17,273Deferred taxes
    
    
    202
    
    
    
    1,959
    
    
    
    1,318
    
    
    
    13
    
    
    
    (74
    )
    
    
    3,418Other assets
    
    
    17,772
    
    
    
    5,167
    
    
    
    1,444
    
    
    
    72
    
    
    
    (21,353
    )
    
    
    3,102Long-term assets
    
    
    19,351
    
    
    
    15,864
    
    
    
    8,575
    
    
    
    1,928
    
    
    
    (21,925
    )
    
    
    23,793Total assets
    
    Ps.
    26,555
    
    
    Ps.
    23,162
    
    
    Ps.
    14,957
    
    
    Ps.
    2,519
    
    
    Ps.
    (31,419
    )
    
    Ps.
    35,774Short-term borrowings
    
    Ps.
    17,354
    
    
    Ps.
    415
    
    
    Ps.
    1,427
    
    
    
    
    
    
    
    
    
    
    Ps.
    19,196Derivative financial instruments
    
    
    
    
    
    
    4,031
    
    
    
    986
    
    
    
    
    
    
    
    (1,240
    )
    
    
    3,777Accrued expenses and other current liabilities
    
    
    6,760
    
    
    
    5,116
    
    
    
    6,049
    
    
    
    1,284
    
    
    
    (13,119
    )
    
    
    6,090Current liabilities
    
    
    24,114
    
    
    
    9,562
    
    
    
    8,462
    
    
    
    1,284
    
    
    
    (14,359
    )
    
    
    29,063Long-term liabilities
    
    
    737
    
    
    
    9,854
    
    
    
    1,101
    
    
    
    1,187
    
    
    
    (9,276
    )
    
    
    3,603Total liabilities
    
    
    24,851
    
    
    
    19,416
    
    
    
    9,563
    
    
    
    2,471
    
    
    
    (23,635
    )
    
    
    32,666Controlling interest
    
    
    1,704
    
    
    
    3,746
    
    
    
    1,377
    
    
    
    48
    
    
    
    (5,171
    )
    
    
    1,704Non controlling interest in consolidated subsidiaries
    
    
    
    
    
    
    
    
    
    
    4,017
    
    
    
    
    
    
    
    (2,613
    )
    
    
    1,404Total stockholders equity
    
    
    1,704
    
    
    
    3,746
    
    
    
    5,394
    
    
    
    48
    
    
    
    (7,784
    )
    
    
    3,108Total liabilities and stockholders equity
    
    Ps.
    26,555
    
    
    Ps.
    23,162
    
    
    Ps.
    14,957
    
    
    Ps.
    2,519
    
    
    Ps.
    (31,419
    )
    
    Ps.
    35,774
  F-89




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##### Table of Contents



Combined
    
    
    CombinedWholly-
    
    
    Viméxico
    
    
    Combined
    
    
    AdjustmentsOwned
    
    
    and
    
    
    Non-
    
    
    and
    
    
    VitroAs of December 31, 2009
    
    Vitro
    
    
    Guarantors
    
    
    Subsidiaries
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedCash
    
    Ps.
    20
    
    
    Ps.
    2,003
    
    
    Ps.
    574
    
    
    Ps.
    20
    
    
    Ps.
    
    
    
    Ps.
    2,616Trade receivables and other current assets
    
    
    8,370
    
    
    
    24,071
    
    
    
    5,546
    
    
    
    449
    
    
    
    (34,128
    )
    
    
    4,308Inventories, net
    
    
    
    
    
    
    1,838
    
    
    
    1,547
    
    
    
    3
    
    
    
    (216
    )
    
    
    3,172Current assets
    
    
    8,390
    
    
    
    27,912
    
    
    
    7,667
    
    
    
    472
    
    
    
    (34,344
    )
    
    
    10,096Property, plant and equipment, net
    
    
    1,063
    
    
    
    7,826
    
    
    
    5,230
    
    
    
    1,586
    
    
    
    (368
    )
    
    
    15,338Deferred taxes
    
    
    990
    
    
    
    2,716
    
    
    
    1,516
    
    
    
    40
    
    
    
    (747
    )
    
    
    4,515Other assets
    
    
    32,933
    
    
    
    5,386
    
    
    
    1,315
    
    
    
    37
    
    
    
    (36,969
    )
    
    
    2,703Long-term assets
    
    
    34,986
    
    
    
    15,587
    
    
    
    8,061
    
    
    
    1,663
    
    
    
    (37,087
    )
    
    
    22,556Total assets
    
    Ps.
    43,376
    
    
    Ps.
    43,840
    
    
    Ps.
    15,587
    
    
    Ps.
    2,135
    
    
    Ps.
    (72,427
    )
    
    Ps.
    32,652Short-term borrowings
    
    Ps.
    16,118
    
    
    Ps.
    706
    
    
    Ps.
    851
    
    
    Ps.
    521
    
    
    Ps.
    1
    
    
    Ps.
    18,197Derivative financial instruments
    
    
    
    
    
    
    3,579
    
    
    
    1,068
    
    
    
    
    
    
    
    (1,318
    )
    
    
    3,328Interest and accrued expenses
    
    
    2,425
    
    
    
    693
    
    
    
    262
    
    
    
    81
    
    
    
    (320
    )
    
    
    3,141Trade payables and Other current liabilities
    
    
    22,536
    
    
    
    5,671
    
    
    
    6,309
    
    
    
    1,326
    
    
    
    (32,929
    )
    
    
    2,914Current liabilities
    
    
    41,079
    
    
    
    10,649
    
    
    
    8,490
    
    
    
    1,928
    
    
    
    (34,565
    )
    
    
    27,580Long-term liabilities
    
    
    1,777
    
    
    
    (1,133
    )
    
    
    794
    
    
    
    389
    
    
    
    (1,005
    )
    
    
    3,088Total liabilities
    
    
    42,856
    
    
    
    11,782
    
    
    
    9,284
    
    
    
    2,317
    
    
    
    (35,570
    )
    
    
    30,668Controlling interest
    
    
    520
    
    
    
    30,594
    
    
    
    2,403
    
    
    
    (182
    )
    
    
    (32,815
    )
    
    
    520Noncontrolling interest in consolidated
subsidiaries
    
    
    
    
    
    
    1,464
    
    
    
    4,041
    
    
    
    
    
    
    
    (4,041
    )
    
    
    1,464Total stockholders equity
    
    
    520
    
    
    
    32,058
    
    
    
    6,444
    
    
    
    (182
    )
    
    
    (36,856
    )
    
    
    1,984Total liabilities and stockholders equity
    
    Ps.
    43,376
    
    
    Ps.
    43,840
    
    
    Ps.
    15,728
    
    
    Ps.
    2,135
    
    
    Ps.
    (72,427
    )
    
    Ps.
    32,652
  F-90




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##### Table of Contents



b)
    
    Supplemental condensed consolidating statements of operations presented in accordance
with MFRS:
 CombinedWholly-
    
    
    Consolidated
    
    
    Combined
    
    
    AdjustmentsOwned
    
    
    Viméxico and
    
    
    Non-
    
    
    and
    
    
    VitroFor the year ended December 31, 2007
    
    Vitro
    
    
    Guarantors
    
    
    Subsidiaries
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedNet sales and equity in earnings of subsidiaries
    
    Ps.
    775
    
    
    Ps.
    13,487
    
    
    Ps.
    13,605
    
    
    Ps.
    2,511
    
    
    Ps.
    (1,787
    )
    
    Ps.
    28,591Cost of sales
    
    
    
    
    
    
    9,255
    
    
    
    9,578
    
    
    
    1,556
    
    
    
    (202
    )
    
    
    20,187Selling, general and administrative expenses
    
    
    100
    
    
    
    2,360
    
    
    
    3,245
    
    
    
    859
    
    
    
    (864
    )
    
    
    5,700Total financing cost
    
    
    803
    
    
    
    797
    
    
    
    443
    
    
    
    66
    
    
    
    (449
    )
    
    
    1,660Other (Income) expenses, net
    
    
    (2
    )
    
    
    544
    
    
    
    91
    
    
    
    56
    
    
    
    180
    
    
    
    869Income tax (benefit) expense
    
    
    (113
    )
    
    
    360
    
    
    
    152
    
    
    
    36
    
    
    
    (391
    )
    
    
    44Net (loss) income for the year
    
    Ps.
    (13
    )
    
    Ps.
    171
    
    
    Ps.
    96
    
    
    Ps.
    (62
    )
    
    Ps.
    (61
    )
    
    Ps.
    131CombinedWholly-
    
    
    Consolidated
    
    
    Combined
    
    
    AdjustmentsOwned
    
    
    Viméxico and
    
    
    Non-
    
    
    and
    
    
    VitroFor the year ended December 31, 2008
    
    Vitro
    
    
    Guarantors
    
    
    Subsidiaries
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedNet sales and equity in earnings
of subsidiaries
    
    Ps.
    (628
    )
    
    Ps.
    14,752
    
    
    Ps.
    13,230
    
    
    Ps.
    2,537
    
    
    Ps.
    (878
    )
    
    Ps.
    29,013Cost of sales
    
    
    
    
    
    
    10,633
    
    
    
    9,703
    
    
    
    1,573
    
    
    
    (630
    )
    
    
    21,279Selling, general and
administrative expenses
    
    
    161
    
    
    
    2,175
    
    
    
    3,341
    
    
    
    918
    
    
    
    (571
    )
    
    
    6,024Total financing cost
    
    
    5,294
    
    
    
    5,616
    
    
    
    1,398
    
    
    
    189
    
    
    
    (3,420
    )
    
    
    9,077Other (income) expenses, net
    
    
    25
    
    
    
    (257
    )
    
    
    141
    
    
    
    4
    
    
    
    577
    
    
    
    490Income tax (benefit) expense
    
    
    (402
    )
    
    
    (847
    )
    
    
    (735
    )
    
    
    10
    
    
    
    (201
    )
    
    
    (2,175
    )Net (loss) income for the year
    
    
    (5,706
    )
    
    
    (2,568
    )
    
    
    (618
    )
    
    
    (157
    )
    
    
    3,367
    
    
    
    (5,682
    )
  F-91




---



##### Table of Contents



Combined
    
    
    CombinedWholly-
    
    
    Viméxico
    
    
    Combined
    
    
    AdjustmentsOwned
    
    
    and
    
    
    Non-
    
    
    and
    
    
    VitroFor the year ended December 31, 2009
    
    Vitro
    
    
    Guarantors
    
    
    Subsidiaries
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedNet sales and equity in earnings of
subsidiaries
    
    Ps.
    1,111
    
    
    Ps.
    12,538
    
    
    Ps.
    11,453
    
    
    Ps.
    322
    
    
    Ps.
    (1,433
    )
    
    Ps.
    23,991Cost of sales
    
    
    
    
    
    
    8,708
    
    
    
    8,839
    
    
    
    15
    
    
    
    (382
    )
    
    
    17,180Selling, general and administrative expenses
    
    
    167
    
    
    
    2,315
    
    
    
    3,205
    
    
    
    382
    
    
    
    (587
    )
    
    
    5,482Total financing cost
    
    
    1,707
    
    
    
    1,538
    
    
    
    782
    
    
    
    91
    
    
    
    (1,752
    )
    
    
    2,366Other (income) expenses, net
    
    
    47
    
    
    
    (163
    )
    
    
    422
    
    
    
    17
    
    
    
    (8
    )
    
    
    315Income tax (benefit) expense
    
    
    (23
    )
    
    
    (372
    )
    
    
    (171
    )
    
    
    (25
    )
    
    
    (7
    )
    
    
    (598
    )Net (loss) income for the year
    
    Ps.
    (787
    )
    
    Ps.
    512
    
    
    Ps.
    (1,624
    )
    
    Ps.
    (158
    )
    
    Ps.
    1,303
    
    
    Ps.
    (754
    )
  F-92




---



##### Table of Contents



c)
    
    Supplemental condensed consolidating statements of changes in financial position present
in accordance with MFRS:
 CombinedWholly-
    
    
    Consolidated
    
    
    Combined
    
    
    AdjustmentOwned
    
    
    Viméxico and
    
    
    Non-
    
    
    And
    
    
    VitroFor the year ended December 31, 2007
    
    Vitro
    
    
    Guarantors
    
    
    Subsidiaries
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedOperating Activities:Net (loss) income
    
    Ps.
    (13
    )
    
    Ps.
    171
    
    
    Ps.
    96
    
    
    Ps.
    (62
    )
    
    Ps.
    (61
    )
    
    Ps.
    131Depreciation and amortization
    
    
    15
    
    
    
    771
    
    
    
    480
    
    
    
    148
    
    
    
    
    
    
    
    1,414Provision for employee retirement obligations
    
    
    
    
    
    
    176
    
    
    
    57
    
    
    
    28
    
    
    
    
    
    
    
    261Amortization of debt issuance costs
    
    
    24
    
    
    
    142
    
    
    
    4
    
    
    
    
    
    
    
    
    
    
    
    170Impairment of long-lived assets
    
    
    
    
    
    
    
    
    
    
    91
    
    
    
    31
    
    
    
    
    
    
    
    122Loss (gain) from sale of long-lived assets
    
    
    
    
    
    
    (89
    )
    
    
    (55
    )
    
    
    
    
    
    
    191
    
    
    
    47Derivative financial instruments
    
    
    87
    
    
    
    100
    
    
    
    29
    
    
    
    
    
    
    
    
    
    
    
    216Deferred taxes
    
    
    (113
    )
    
    
    (184
    )
    
    
    (104
    )
    
    
    3
    
    
    
    47
    
    
    
    (351
    )Other non-cash charges
    
    
    148
    
    
    
    22
    
    
    
    20
    
    
    
    
    
    
    
    (82
    )
    
    
    (108
    )(Increase) decrease in trade receivables
    
    
    
    
    
    
    11
    
    
    
    (163
    )
    
    
    (39
    )
    
    
    (110
    )
    
    
    (81
    )(Increase) decrease in inventories
    
    
    
    
    
    
    (334
    )
    
    
    (19
    )
    
    
    42
    
    
    
    3
    
    
    
    (308
    )Increase (decrease) in trade payables
    
    
    
    
    
    
    
    
    
    
    223
    
    
    
    55
    
    
    
    (35
    )
    
    
    243Changes in other current assets and liabilities
    
    
    818
    
    
    
    (462
    )
    
    
    105
    
    
    
    (32
    )
    
    
    (255
    )
    
    
    174Employee retirement obligations
    
    
    
    
    
    
    (351
    )
    
    
    (101
    )
    
    
    (20
    )
    
    
    
    
    
    
    (472
    )Net resources generated by (used in) operating
activities
    
    
    966
    
    
    
    (27
    )
    
    
    663
    
    
    
    154
    
    
    
    (82
    )
    
    
    1,674Financing Activities:Banks loans, net
    
    
    9,959
    
    
    
    (7,837
    )
    
    
    (356
    )
    
    
    243
    
    
    
    (52
    )
    
    
    1,957Debt issuance cost
    
    
    (76
    )
    
    
    (208
    )
    
    
    (9
    )
    
    
    
    
    
    
    
    
    
    
    (293
    )Dividends paid
    
    
    (136
    )
    
    
    
    
    
    
    (51
    )
    
    
    (101
    )
    
    
    73
    
    
    
    (215
    )Other financing activities
    
    
    (10,364
    )
    
    
    7,911
    
    
    
    261
    
    
    
    134
    
    
    
    2,544
    
    
    
    486Net resources (used in) generated by financing
activities
    
    
    (617
    )
    
    
    (134
    )
    
    
    (155
    )
    
    
    276
    
    
    
    2,565
    
    
    
    1,935Investing Activities:Investments in land, buildings, machinery and equipment
    
    
    (306
    )
    
    
    (1,919
    )
    
    
    (324
    )
    
    
    (445
    )
    
    
    299
    
    
    
    (2,695
    )Proceeds from sale of land, machinery and equipment
    
    
    
    
    
    
    239
    
    
    
    131
    
    
    
    1
    
    
    
    (299
    )
    
    
    72Restricted cash
    
    
    
    
    
    
    108
    
    
    
    46
    
    
    
    
    
    
    
    
    
    
    
    (88
    )Investments in subsidiaries
    
    
    37
    
    
    
    (134
    )
    
    
    (181
    )
    
    
    
    
    
    
    (37
    )
    
    
    (181
    )Proceeds from sale of subsidiaries and associated
companies
    
    
    
    
    
    
    24
    
    
    
    
    
    
    
    
    
    
    
    13
    
    
    
    37Other long-term assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (85
    )
    
    
    (85
    )Deferred charges
    
    
    
    
    
    
    (80
    )
    
    
    (206
    )
    
    
    (16
    )
    
    
    
    
    
    
    (302
    )Other investing activities
    
    
    
    
    
    
    2,336
    
    
    
    49
    
    
    
    38
    
    
    
    (2,374
    )
    
    
    49Net resources (used in) generated by investing
activities
    
    
    (269
    )
    
    
    466
    
    
    
    (485
    )
    
    
    (422
    )
    
    
    (2,483
    )
    
    
    (3,193
    )Net increase in cash and cash equivalents
    
    
    80
    
    
    
    305
    
    
    
    23
    
    
    
    8
    
    
    
    
    
    
    
    416Balance at beginning of year
    
    
    673
    
    
    
    235
    
    
    
    170
    
    
    
    144
    
    
    
    
    
    
    
    1,222Balance at end of year
    
    Ps.
    753
    
    
    Ps.
    540
    
    
    Ps.
    193
    
    
    Ps.
    152
    
    
    Ps.
    
    
    
    Ps.
    1,638
  F-93




---



##### Table of Contents



d)
    
    Supplemental condensed
consolidating statements of cash flow   presented
in accordance with MFRS:
 CombinedWholly-
    
    
    Consolidated

    
    
    Combined
    
    
    AdjustmentsOwned
    
    
    Viméxico and
    
    
    Non-
    
    
    And
    
    
    VitroFor the year ended December 31, 2008
    
    Vitro
    
    
    Guarantors
    
    
    Subsidiaries
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedOPERATING ACTIVITIES:Loss (income) before income taxes
    
    Ps.
    (6,108
    )
    
    Ps.
    (3,415
    )
    
    Ps.
    (1,353
    )
    
    Ps.
    (147
    )
    
    Ps.
    3,166
    
    
    Ps.
    (7,857
    )Items related to investing and financing activities:Depreciation and amortization
    
    
    97
    
    
    
    749
    
    
    
    488
    
    
    
    149
    
    
    
    (14
    )
    
    
    1,469Other from operating activities
    
    
    1,716
    
    
    
    (230
    )
    
    
    (92
    )
    
    
    
    
    
    
    (1,402
    )
    
    
    (8
    )Impairment of long-lived assets
    
    
    
    
    
    
    
    
    
    
    196
    
    
    
    
    
    
    
    
    
    
    
    196Derivative financial instruments
    
    
    (21
    )
    
    
    3,254
    
    
    
    617
    
    
    
    
    
    
    
    (84
    )
    
    
    3,766Foreign exchange loss
    
    
    3,697
    
    
    
    1,268
    
    
    
    231
    
    
    
    (6
    )
    
    
    (1,456
    )
    
    
    3,734Interest expense
    
    
    1,646
    
    
    
    992
    
    
    
    610
    
    
    
    148
    
    
    
    (1,307
    )
    
    
    2,089Trade receivables
    
    
    
    
    
    
    148
    
    
    
    (243
    )
    
    
    7
    
    
    
    (13
    )
    
    
    (101
    )Other current assets and liabilities
    
    
    (302
    )
    
    
    601
    
    
    
    307
    
    
    
    (325
    )
    
    
    (622
    )
    
    
    (341
    )Income tax paid
    
    
    (127
    )
    
    
    (213
    )
    
    
    10
    
    
    
    (28
    )
    
    
    147
    
    
    
    (211
    )Net cash provided by (used in) operating activities
    
    
    598
    
    
    
    3,154
    
    
    
    771
    
    
    
    (202
    )
    
    
    (1,585
    )
    
    
    2,736INVESTING ACTIVITIESInvestments in machinery and equipment, net
    
    
    (44
    )
    
    
    (280
    )
    
    
    (136
    )
    
    
    (1,356
    )
    
    
    38
    
    
    
    (1,778
    )Other assets
    
    
    
    
    
    
    241
    
    
    
    (13
    )
    
    
    15
    
    
    
    89
    
    
    
    332Deferred charges
    
    
    (6
    )
    
    
    (137
    )
    
    
    (119
    )
    
    
    (38
    )
    
    
    38
    
    
    
    (262
    )Other investing activities
    
    
    1,510
    
    
    
    305
    
    
    
    (657
    )
    
    
    (5
    )
    
    
    (1,156
    )
    
    
    (3
    )Net cash generated by (used in) investing activities
    
    
    1,460
    
    
    
    129
    
    
    
    (925
    )
    
    
    (1,384
    )
    
    
    (991
    )
    
    
    (1,711
    )Excess cash to apply to financing activities
    
    
    2,058
    
    
    
    3,283
    
    
    
    (154
    )
    
    
    (1,586
    )
    
    
    (2,576
    )
    
    
    1,025FINANCING ACTIVITIES:Proceeds from short-term bank loans
    
    
    457
    
    
    
    312
    
    
    
    218
    
    
    
    71
    
    
    
    (97
    )
    
    
    1,155Interest paid
    
    
    (1,447
    )
    
    
    (1,048
    )
    
    
    (645
    )
    
    
    (127
    )
    
    
    1,223
    
    
    
    (2,044
    )Proceeds from long-term bank loans
    
    
    400
    
    
    
    433
    
    
    
    88
    
    
    
    1,055
    
    
    
    
    
    
    
    1,976Payments of long-term bank loans
    
    
    (299
    )
    
    
    (644
    )
    
    
    (77
    )
    
    
    
    
    
    
    
    
    
    
    (1,020
    )Derivative financial instruments
    
    
    187
    
    
    
    (681
    )
    
    
    156
    
    
    
    
    
    
    
    (800
    )
    
    
    (1,138
    )Other financing activities
    
    
    (1,187
    )
    
    
    (2,491
    )
    
    
    584
    
    
    
    665
    
    
    
    2,056
    
    
    
    (373
    )Net cash provided by financing activities
    
    
    (1,889
    )
    
    
    (4,119
    )
    
    
    324
    
    
    
    1,664
    
    
    
    2,576
    
    
    
    (1,444
    )Net decrease in cash and cash equivalents
    
    
    169
    
    
    
    (836
    )
    
    
    170
    
    
    
    78
    
    
    
    
    
    
    
    (419
    )Adjustment to cash flows due to exchange rate
fluctuations
    
    
    
    
    
    
    115
    
    
    
    (23
    )
    
    
    
    
    
    
    
    
    
    
    92Deconsolidation of subsidiary
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (105
    )
    
    
    
    
    
    
    (105
    )Cash and cash equivalents at the beginning of year
(includes restricted cash of Ps. 388)
    
    
    753
    
    
    
    984
    
    
    
    276
    
    
    
    151
    
    
    
    
    
    
    
    2,164Cash and cash equivalents at the end of year
(includes restricted cash of Ps. 74)
    
    Ps.
    922
    
    
    Ps.
    263
    
    
    Ps.
    423
    
    
    Ps.
    124
    
    
    Ps.
    
    
    
    Ps.
    1,732
  F-94




---



##### Table of Contents



CombinedWholly-
    
    
    Viméxico
    
    
    Combined
    
    
    AdjustmentsOwned
    
    
    and
    
    
    Non-
    
    
    And
    
    
    VitroFor the year ended December 31, 2009
    
    Vitro
    
    
    Guarantors
    
    
    Subsidiaries
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedOPERATING ACTIVITIES:Loss (income) before income taxes
    
    Ps.
    (810
    )
    
    Ps.
    140
    
    
    Ps.
    (1,795
    )
    
    Ps.
    (183
    )
    
    
    1296
    
    
    Ps.
    (1,352
    )Items related to investing and financing activities:Depreciation and amortization
    
    
    86
    
    
    
    841
    
    
    
    575
    
    
    
    14
    
    
    
    (43
    )
    
    
    1,473Other from operating activities
    
    
    962
    
    
    
    (337
    )
    
    
    (177
    )
    
    
    39
    
    
    
    (717
    )
    
    
    (230
    )Impairment of long-lived assets
    
    
    
    
    
    
    
    
    
    
    207
    
    
    
    
    
    
    
    (48
    )
    
    
    207Derivative financial instruments
    
    
    
    
    
    
    556
    
    
    
    130
    
    
    
    161
    
    
    
    (277
    )
    
    
    570Foreign exchange loss
    
    
    (1,097
    )
    
    
    (662
    )
    
    
    (115
    )
    
    
    
    
    
    
    697
    
    
    
    (1,177
    )Interest expense
    
    
    2,032
    
    
    
    1,797
    
    
    
    893
    
    
    
    (61
    )
    
    
    (1,911
    )
    
    
    2,750Trade receivables
    
    
    
    
    
    
    588
    
    
    
    1,098
    
    
    
    (28
    )
    
    
    (609
    )
    
    
    1,049Inventories
    
    
    
    
    
    
    194
    
    
    
    606
    
    
    
    1
    
    
    
    70
    
    
    
    871Employe retirement obligations
    
    
    
    
    
    
    (397
    )
    
    
    (9
    )
    
    
    8
    
    
    
    1
    
    
    
    (397
    )Other current assets and liabilities
    
    
    (197
    )
    
    
    (42
    )
    
    
    (144
    )
    
    
    74
    
    
    
    770
    
    
    
    461Trade payables
    
    
    
    
    
    
    (439
    )
    
    
    (166
    )
    
    
    (4
    )
    
    
    22
    
    
    
    (587
    )Income tax paid
    
    
    385
    
    
    
    (177
    )
    
    
    29
    
    
    
    (12
    )
    
    
    133
    
    
    
    358Net cash provided by operating activities
    
    
    1,361
    
    
    
    2,062
    
    
    
    1,132
    
    
    
    9
    
    
    
    (568
    )
    
    
    3,996INVESTING ACTIVITIESInvestments in machinery and equipment
    
    
    
    
    
    
    (735
    )
    
    
    (264
    )
    
    
    (6
    )
    
    
    (4
    )
    
    
    (1,009
    )Proceeds from sale of machinery and equipment
    
    
    206
    
    
    
    1,155
    
    
    
    32
    
    
    
    230
    
    
    
    (213
    )
    
    
    1,410Investment in subsidiaries, net of cash acquired
    
    
    
    
    
    
    (349
    )
    
    
    (454
    )
    
    
    
    
    
    
    349
    
    
    
    (454
    )Other investing activities
    
    
    231
    
    
    
    (2,668
    )
    
    
    (1,096
    )
    
    
    (135
    )
    
    
    3,566
    
    
    
    (102
    )Net cash used in investing activities
    
    
    437
    
    
    
    (2,597
    )
    
    
    (1,782
    )
    
    
    89
    
    
    
    3,698
    
    
    
    (155
    )Excess cash to apply to financing activities
    
    
    1,798
    
    
    
    (535
    )
    
    
    (650
    )
    
    
    98
    
    
    
    3,130
    
    
    
    3,841FINANCING ACTIVITIES:Proceeds from short-term bank loans
    
    
    (281
    )
    
    
    829
    
    
    
    (563
    )
    
    
    
    
    
    
    
    
    
    
    (15
    )Interest paid
    
    
    (115
    )
    
    
    (1,653
    )
    
    
    (741
    )
    
    
    (107
    )
    
    
    1,673
    
    
    
    (943
    )Proceeds from long-term bank loans
    
    
    
    
    
    
    1,218
    
    
    
    341
    
    
    
    
    
    
    
    
    
    
    
    1,559Payments of long-term bank loans
    
    
    
    
    
    
    (1,921
    )
    
    
    (322
    )
    
    
    (225
    )
    
    
    219
    
    
    
    (2,468
    )Derivative financial instruments
    
    
    
    
    
    
    (996
    )
    
    
    (47
    )
    
    
    
    
    
    
    
    
    
    
    (824
    )Other financing activities
    
    
    (2,295
    )
    
    
    4,905
    
    
    
    2206
    
    
    
    186
    
    
    
    (5,022
    )
    
    
    (20
    )Net cash provided by financing activities
    
    
    (2,691
    )
    
    
    2,382
    
    
    
    874
    
    
    
    (146
    )
    
    
    (3,130
    )
    
    
    (2,711
    )Net decrease in cash and cash equivalents
    
    
    (893
    )
    
    
    1,847
    
    
    
    224
    
    
    
    (48
    )
    
    
    
    
    
    
    1,130Adjustment to cash flows due to exchange rate fluctuations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1
    
    
    
    1Deconsolidation of subsidiary
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Cash and cash equivalents at the beginning of year
(includes restricted cash of Ps. 74)
    
    
    922
    
    
    
    263
    
    
    
    423
    
    
    
    124
    
    
    
    
    
    
    
    1,732Cash and cash equivalents at the end of year
(includes restricted cash of Ps. 9)
    
    Ps.
    29
    
    
    Ps.
    2,110
    
    
    Ps.
    647
    
    
    Ps.
    76
    
    
    Ps.
    1
    
    
    Ps.
    2,863
  F-95




---



##### Table of Contents



e)
    
    Supplemental condensed consolidating financial information reconciled from MFRS to U.S. GAAP:
   CombinedWholly-
    
    
    Consolidated
    
    
    Combined
    
    
    AdjustmentsOwned
    
    
    Viméxico and
    
    
    Non-
    
    
    And
    
    
    VitroFor the year ended December 31, 2007
    
    Vitro
    
    
    Guarantors
    
    
    Subsidiaries
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedConsolidated net (loss) income as reported under MFRS
    
    Ps.
    (13
    )
    
    Ps.
    171
    
    
    Ps.
    96
    
    
    Ps.
    (62
    )
    
    Ps.
    (61
    )
    
    Ps.
    131U.S. GAAP adjustments:Deferred income taxes (see note 25 b)
    
    
    (120
    )
    
    
    110
    
    
    
    (37
    )
    
    
    
    
    
    
    102
    
    
    
    55Monetary
position result on deferred income taxes (see note 25 c)
    
    
    (10
    )
    
    
    24
    
    
    
    17
    
    
    
    
    
    
    
    
    
    
    
    31Capitalization of interest (see note 25 d)
    
    
    
    
    
    
    16
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    16Amortization
of capitalized interest (see note 25 d)
    
    
    
    
    
    
    (32
    )
    
    
    (4
    )
    
    
    
    
    
    
    
    
    
    
    (36
    )Effect of
applying Bulletin B-10 (see note 25 f)
    
    
    
    
    
    
    (15
    )
    
    
    (21
    )
    
    
    
    
    
    
    
    
    
    
    (36
    )Discontinued
operations (see note 25 h)
    
    
    26
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    26Employee
retirement obligations (see note 25 j)
    
    
    
    
    
    
    (8
    )
    
    
    (7
    )
    
    
    
    
    
    
    
    
    
    
    (15
    )Purchase of
Visteons capital investment (see note 25 k)
    
    
    
    
    
    
    
    
    
    
    5
    
    
    
    
    
    
    
    
    
    
    
    5Sale of real
estate (see note 25 m)
    
    
    429
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    429Impairment
of longlived assets (see note 25 n)
    
    
    
    
    
    
    
    
    
    
    (10
    )
    
    
    
    
    
    
    
    
    
    
    (10
    )Deconsolidation of Comegua
    
    
    (20
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (20
    )Investment in subsidiaries
    
    
    157
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (157
    )
    
    
    Total U.S. GAAP adjustments
    
    
    462
    
    
    
    95
    
    
    
    (57
    )
    
    
    0
    
    
    
    (55
    )
    
    
    445Net income (loss) under U.S. GAAP
    
    Ps.
    449
    
    
    Ps.
    266
    
    
    Ps.
    39
    
    
    Ps.
    (62
    )
    
    Ps.
    (116
    )
    
    Ps.
    576
  F-96




---



##### Table of Contents



CombinedWholly-
    
    
    Consolidated
    
    
    Combined
    
    
    AdjustmentsOwned
    
    
    Viméxico and
    
    
    Non-
    
    
    and
    
    
    VitroFor the year ended December 31, 2008
    
    Vitro
    
    
    Guarantors
    
    
    Subsidiaries
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedConsolidated net (loss) income as reported under MFRS
    
    Ps.
    (5,706
    )
    
    Ps.
    (2,568
    )
    
    Ps.
    (618
    )
    
    Ps.
    (157
    )
    
    Ps.
    3,367
    
    
    Ps.
    (5,682
    )U.S. GAAP adjustments:Deferred income taxes (see note 25 b)
    
    
    108
    
    
    
    (870
    )
    
    
    55
    
    
    
    
    
    
    
    
    
    
    
    (707
    )Negative goodwill and reduction in depreciation expense (see e)
    
    
    
    
    
    
    
    
    
    
    (43
    )
    
    
    
    
    
    
    
    
    
    
    (43
    )Capitalization of interest (see note 25 d)
    
    
    
    
    
    
    (358
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (358
    )Amortization
of capitalized interest (see note 25 d)
    
    
    
    
    
    
    (34
    )
    
    
    (5
    )
    
    
    
    
    
    
    
    
    
    
    (39
    )Effect of
applying Bulletin B-10 (see note 25 f)
    
    
    
    
    
    
    (21
    )
    
    
    18
    
    
    
    
    
    
    
    
    
    
    
    (3
    )Effect of
ASC 715 (previously SFAS No. 158 (see j)
    
    
    
    
    
    
    23
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    23Derivative
financial instruments (see g)
    
    
    
    
    
    
    58
    
    
    
    17
    
    
    
    
    
    
    
    
    
    
    
    75Employee
retirement obligations (see note 25 j)
    
    
    
    
    
    
    25
    
    
    
    11
    
    
    
    
    
    
    
    
    
    
    
    36Purchase of
Visteons capital investment (see note 25 k)
    
    
    
    
    
    
    
    
    
    
    5
    
    
    
    
    
    
    
    
    
    
    
    5Sale of real
estate (see note 25 m)
    
    
    386
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    386Deconsolidation of Comegua
    
    
    (16
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (16
    )Impairment
of longlived assets (see note 25 n)
    
    
    
    
    
    
    
    
    
    
    (45
    )
    
    
    
    
    
    
    
    
    
    
    (45
    )Total U.S. GAAP adjustments
    
    
    478
    
    
    
    (1,177
    )
    
    
    13
    
    
    
    
    
    
    
    
    
    
    
    (686
    )Net income (loss) under U.S. GAAP
    
    Ps.
    (5,228
    )
    
    Ps.
    (3,745
    )
    
    Ps.
    (605
    )
    
    Ps.
    (157
    )
    
    Ps.
    3,367
    
    
    Ps.
    (6,368
    )
  F-97




---



##### Table of Contents



CombinedWholly-
    
    
    Combined
    
    
    Combined
    
    
    AdjustmentsOwned
    
    
    Viméxico and
    
    
    Non-
    
    
    and
    
    
    VitroFor the year ended December 31, 2009
    
    Vitro
    
    
    Guarantors
    
    
    Subsidiaries
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedConsolidated net (loss) income as reported under MFRS
    
    Ps.
    (787
    )
    
    Ps.
    512
    
    
    Ps.
    (1,624
    )
    
    Ps.
    (158
    )
    
    Ps.
    1,303
    
    
    Ps.
    (754
    )U.S. GAAP adjustments:Deferred income taxes (see note 25 b)
    
    
    1,493
    
    
    
    (1,096
    )
    
    
    (1,488
    )
    
    
    (39
    )
    
    
    
    
    
    
    (1,130
    )Amortization of capitalized interest (see note 25 f)
    
    
    
    
    
    
    (15
    )
    
    
    (4
    )
    
    
    
    
    
    
    
    
    
    
    (19
    )Effect of ASC 715 (previously SFAS No. 158 (see m)
    
    
    
    
    
    
    (23
    )
    
    
    (7
    )
    
    
    
    
    
    
    
    
    
    
    (30
    )Derivative financial instruments (see j)
    
    
    
    
    
    
    (6
    )
    
    
    (2
    )
    
    
    
    
    
    
    
    
    
    
    (8
    )Employee retirement obligations (see note 25 m)
    
    
    
    
    
    
    10
    
    
    
    16
    
    
    
    
    
    
    
    
    
    
    
    26Purchase of Visteons capital investment (see note 25 n)
    
    
    
    
    
    
    
    
    
    
    9
    
    
    
    
    
    
    
    
    
    
    
    9Sale-leaseback transaction (see note 25 p)
    
    
    
    
    
    
    (278
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (278
    )Impairment of longlived assets (see note 25 q)
    
    
    
    
    
    
    
    
    
    
    15
    
    
    
    
    
    
    
    
    
    
    
    15Impact of changes in income tax law (see 25 q)
    
    
    (237
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (237
    )Fintech option liability (see 25 p)
    
    
    
    
    
    
    (181
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (181
    )Total U.S. GAAP adjustments
    
    
    1,256
    
    
    
    (1,589
    )
    
    
    (1,461
    )
    
    
    (39
    )
    
    
    
    
    
    
    (1,833
    )Net income (loss) under U.S. GAAP
    
    Ps.
    469
    
    
    Ps.
    (1,077
    )
    
    Ps.
    (3,085
    )
    
    Ps.
    (197
    )
    
    Ps.
    1,303
    
    
    Ps.
    (2,587
    )
  F-98




---



##### Table of Contents



CombinedWholly-
    
    
    Consolidated
    
    
    Combined
    
    
    AdjustmentsOwned
    
    
    Viméxico and
    
    
    Non-
    
    
    and
    
    
    VitroAs of December 31, 2008
    
    Vitro
    
    
    Guarantors
    
    
    Subsidiaries
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedTotal stockholders equity reported under MFRS
    
    Ps.
    1,704
    
    
    Ps.
    3,746
    
    
    Ps.
    5,394
    
    
    Ps.
    48
    
    
    Ps.
    (7,784
    )
    
    Ps.
    3,108U.S. GAAP adjustments:Deferred income taxes (see note 25b)
    
    
    38
    
    
    
    (872
    )
    
    
    (415
    )
    
    
    15
    
    
    
    
    
    
    
    (1,234
    )Capitalization of interest (see note 25 d)
    
    
    
    
    
    
    (26
    )
    
    
    42
    
    
    
    
    
    
    
    
    
    
    
    16Goodwill
(see note 25 e)
    
    
    
    
    
    
    
    
    
    
    81
    
    
    
    
    
    
    
    
    
    
    
    81Accumulated
amortization of capitalized interest (see note 25 d)
    
    
    
    
    
    
    (197
    )
    
    
    (27
    )
    
    
    
    
    
    
    
    
    
    
    (224
    )Effect of
ASC 715 (previously SFAS No. 158 (see note 25 j)
    
    
    
    
    
    
    (1,280
    )
    
    
    (414
    )
    
    
    (55
    )
    
    
    
    
    
    
    (1,749
    )Derivative
financial instruments (see Note 25 g)
    
    
    
    
    
    
    58
    
    
    
    17
    
    
    
    
    
    
    
    
    
    
    
    75Employee
retirement obligations (see note 25 j)
    
    
    
    
    
    
    (36
    )
    
    
    (28
    )
    
    
    
    
    
    
    
    
    
    
    (64
    )Purchase of
Visteons capital investment (see note 25 k)
    
    
    
    
    
    
    
    
    
    
    (61
    )
    
    
    
    
    
    
    
    
    
    
    (61
    )Purchase of
remaining 40% interest in Vitro Cristalglass (see note 25 l)
    
    
    
    
    
    
    
    
    
    
    60
    
    
    
    
    
    
    
    
    
    
    
    60Impairment
of longlived assets (see note 25 n)
    
    
    (149
    )
    
    
    12
    
    
    
    345
    
    
    
    
    
    
    
    
    
    
    
    208Total U.S. GAAP adjustments
    
    
    (111
    )
    
    
    (2,341
    )
    
    
    (400
    )
    
    
    (40
    )
    
    
    
    
    
    
    (2,892
    )Total stockholders equity under U.S. GAAP
    
    Ps.
    1,593
    
    
    Ps.
    1,405
    
    
    Ps.
    4,994
    
    
    Ps.
    8
    
    
    Ps.
    (7,784
    )
    
    Ps.
    216
  F-99




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##### Table of Contents



CombinedWholly-
    
    
    Consolidated
    
    
    Combined
    
    
    AdjustmentsOwned
    
    
    Viméxico and
    
    
    Non-
    
    
    and
    
    
    VitroAs of December 31, 2009
    
    Vitro
    
    
    Guarantors
    
    
    Subsidiaries
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedTotal stockholders equity reported under MFRS
    
    Ps.
    520
    
    
    Ps.
    32,058
    
    
    Ps.
    6,444
    
    
    Ps.
    (182
    )
    
    Ps.
    (36,856
    )
    
    Ps.
    1,984U.S. GAAP adjustments:Deferred income taxes (see note 25b)
    
    
    416
    
    
    
    (718
    )
    
    
    (1,973
    )
    
    
    (27
    )
    
    
    
    
    
    
    (2,302
    )Capitalization of interest (see note 25 d)
    
    
    
    
    
    
    (26
    )
    
    
    42
    
    
    
    
    
    
    
    
    
    
    
    16Goodwill (see note 25 g)
    
    
    
    
    
    
    
    
    
    
    81
    
    
    
    
    
    
    
    
    
    
    
    81Accumulated amortization of capitalized interest (see note 25 d)
    
    
    
    
    
    
    (212
    )
    
    
    (31
    )
    
    
    
    
    
    
    
    
    
    
    (243
    )Effect of ASC 715 (previously SFAS No. 158 (see note 25j)
    
    
    
    
    
    
    (1,678
    )
    
    
    (535
    )
    
    
    (42
    )
    
    
    
    
    
    
    (2,255
    )Derivative financial instruments (see note 25g)
    
    
    
    
    
    
    52
    
    
    
    15
    
    
    
    (1
    )
    
    
    
    
    
    
    66Employee retirement obligations (see note 25 j)
    
    
    
    
    
    
    (26
    )
    
    
    (12
    )
    
    
    
    
    
    
    
    
    
    
    (38
    )Purchase of Visteons capital investment (see note 25k)
    
    
    
    
    
    
    
    
    
    
    (52
    )
    
    
    
    
    
    
    
    
    
    
    (52
    )Purchase of remaining 40% interest in Vitro Cristalglass (see note 25o)
    
    
    
    
    
    
    
    
    
    
    60
    
    
    
    
    
    
    
    
    
    
    
    60Impairment of longlived assets (see note 25 n)
    
    
    (149
    )
    
    
    11
    
    
    
    361
    
    
    
    
    
    
    
    
    
    
    
    223Sale-lease-back transaction (see note 25p)
    
    
    
    
    
    
    (278
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (278
    )Fintech option liability (see note 25p)
    
    
    
    
    
    
    (181
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (181
    )Total U.S. GAAP adjustments
    
    
    267
    
    
    
    (3,056
    )
    
    
    (2,044
    )
    
    
    (70
    )
    
    
    
    
    
    
    (4,903
    )Total stockholders equity under U.S. GAAP
    
    Ps.
    787
    
    
    Ps.
    29,002
    
    
    
    4,400
    
    
    
    (252
    )
    
    
    (36,856
    )
    
    Ps.
    (2,919
    )
  F-100




---



##### Table of Contents



f)
    
    Supplemental U.S. GAAP Cash Flow Information
   CombinedWholly-
    
    
    Consolidated
    
    
    Combined
    
    
    AdjustmentsOwned
    
    
    Viméxico and
    
    
    Non-
    
    
    and
    
    
    VitroAs of December 31, 2007
    
    Vitro
    
    
    Guarantors
    
    
    Subsidiaries
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedNet cash provided by (used in) operating activities
    
    Ps.
    476
    
    
    Ps.
    629
    
    
    Ps.
    549
    
    
    Ps.
    (30
    )
    
    Ps.
    (241
    )
    
    Ps.
    1,383Net cash (used in) provided by financing activities
    
    
    (102
    )
    
    
    (879
    )
    
    
    (7
    )
    
    
    141
    
    
    
    2,809
    
    
    
    1,962Net cash (used in) provided by investing activities
    
    
    (269
    )
    
    
    582
    
    
    
    (505
    )
    
    
    (116
    )
    
    
    (2,570
    )
    
    
    (2,878
    )
  CombinedWholly-
    
    
    Consolidated
    
    
    Combined
    
    
    AdjustmentsOwned
    
    
    Viméxico and
    
    
    Non-
    
    
    and
    
    
    VitroAs of December 31, 2007
    
    Vitro
    
    
    Guarantors
    
    
    Subsidiaries
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedInterest paid
    
    Ps.
    914
    
    
    Ps.
    1,492
    
    
    Ps.
    373
    
    
    Ps.
    88
    
    
    Ps.
    (1,498
    )
    
    Ps.
    1,369Income taxes paid
    
    
    (581
    )
    
    
    834
    
    
    
    204
    
    
    
    10
    
    
    
    (26
    )
    
    
    441
 CombinedWholly-
    
    
    Consolidated
    
    
    Combined
    
    
    AdjustmentsOwned
    
    
    Viméxico and
    
    
    Non-
    
    
    and
    
    
    VitroAs of December 31, 2008
    
    Vitro
    
    
    Guarantors
    
    
    Subsidiaries
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedNet cash provided by (used in) operating activities
    
    Ps.
    (662
    )
    
    Ps.
    1,673
    
    
    Ps.
    187
    
    
    Ps.
    (491
    )
    
    Ps.
    (1,421
    )
    
    
    (714
    )Net cash (used in) provided by financing activities
    
    
    (629
    )
    
    
    (2,389
    )
    
    
    909
    
    
    
    1,750
    
    
    
    2,153
    
    
    
    1,794Net cash (used in) provided by investing activities
    
    
    1,460
    
    
    
    168
    
    
    
    (977
    )
    
    
    (1,130
    )
    
    
    (730
    )
    
    
    (1,209
    )
  F-101




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##### Table of Contents



CombinedWholly-
    
    
    Consolidated
    
    
    Combined
    
    
    AdjustmentsOwned
    
    
    Viméxico and
    
    
    Non-
    
    
    and
    
    
    VitroAs of December 31, 2008
    
    Vitro
    
    
    Guarantors
    
    
    Subsidiaries
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedInterest paid
    
    Ps.
    1,447
    
    
    Ps.
    1,048
    
    
    Ps.
    645
    
    
    Ps.
    127
    
    
    Ps.
    (1,274
    )
    
    Ps.
    1,993Income taxes paid
    
    
    127
    
    
    
    213
    
    
    
    10
    
    
    
    2
    
    
    
    (167
    )
    
    
    185
 CombinedWholly-
    
    
    Combined
    
    
    Combined
    
    
    AdjustmentsOwned
    
    
    Viméxico and
    
    
    Non-
    
    
    and
    
    
    VitroAs of December 31, 2009
    
    Vitro
    
    
    Guarantors
    
    
    Subsidiaries
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedNet cash provided by (used in) operating activities
    
    
    1,246
    
    
    
    (476
    )
    
    
    497
    
    
    
    (93
    )
    
    
    1,107
    
    
    
    2,282Net cash (used in) provided by financing activities
    
    
    (2,576
    )
    
    
    6,004
    
    
    
    1,663
    
    
    
    (39
    )
    
    
(5,021
    )

    
    
   30Net cash (used in) provided by investing activities


    
    427
    
    
    
    (3,618
    )
    
    
    (1,935
    )
    
    
    88
    
    
    
3,913
    

    
    
   (1,125
    )
  CombinedWholly-
    
    
    Combined
    
    
    Combined
    
    
    AdjustmentsOwned
    
    
    Viméxico and
    
    
    Non-
    
    
    and
    
    
    VitroAs of December 31, 2009
    
    Vitro
    
    
    Guarantors
    
    
    Subsidiaries
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedInterest paid
    
    
    115
    
    
    
    (1,653
    )
    
    
    (741
    )
    
    
    (107
    )
    
    
    1673
    
    
    
    (943
    )Income taxes paid

    
    385
    
    
    
    (177
    )
    
    
    29
    
    
    
    (12
    )
    
    
    133
    
    
    
    358
  F-102




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##### Table of Contents



Viméxico, S. A. de C. V. and Subsidiaries, VVP Holdings Corporation and Subsidiaries, Vitro Vidrio y Cristal, S.A. de C.V. and Subsidiaries, Vitro
Automotriz, S.A. de C.V. and Subsidiaries, Vitro Cristalglass, S.L. and
Subsidiaries and Vitrocar, S.A. de C.V.
(Subsidiaries of Vitro, S.A.B. de C.V.)
 
  F-103




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##### Table of Contents



Viméxico, S. A. de C. V. and Subsidiaries, VVP Holdings Corporation and Subsidiaries, Vitro
Vidrio y Cristal, S.A. de C.V. and Subsidiaries, Vitro Automotriz, S.A. de C.V. and Subsidiaries,
Vitro Cristalglass, S.L. and Subsidiaries and Vitrocar, S.A. de C.V.
 Report of Independent Registered Public Accounting Firm and Consolidated and Combined
Financial Statements for 2007, 2008 and 2009
 Table of contents
 PageReport of Independent Registered Public Accounting Firm
    
    
    F-105Consolidated and Combined Balance Sheets
    
    
    F-107Consolidated and Combined Statements of Operations
    
    
    F-108Consolidated and Combined Statements of Changes in Stockholders Equity
    
    
    F-109Consolidated Statement of Changes in Financial Position
    
    
    F-110Consolidated and Combined Statements of Cash Flows
    
    
    F-111Notes to Consolidated and Combined Financial Statements
    
    
    F-112
  F-104




---



##### Table of Contents



Report of Independent Registered Public Accounting Firm
 To the Board of Directors and Stockholders of
 Viméxico, S.A. de C.V. VVP Holdings Corporation, Vitro Vidrio y Cristal, S.A. de C.V., Vitro
Automotriz, S.A. de C.V., Vitro Cristalglass, S.L. and Vitrocar, S.A. de C.V.
 Garza Garcia, N.L., Mexico
       F-105




---



##### Table of Contents



Fair Value Measurements Financial Accounting Standards Board Accounting
Standards Codification Noncontrolling
Interests in Consolidated Financial Statements  an amendment of ARB No. 51 Subsequent Events
  
  
  F-106




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##### Table of Contents



Viméxico, S. A. de C. V. and Subsidiaries, VVP Holdings Corporation and Subsidiaries, Vitro
Vidrio y Cristal, S.A. de C.V. and Subsidiaries, Vitro Automotriz, S.A. de C.V. and
Subsidiaries,Vitro Cristalglass, S.L. and Subsidiaries and Vitrocar, S.A. de C.V.
 
 Consolidated and Combined Balance Sheets
 As of December 31, 2008 and 2009
(Millions of Mexican pesos)
 December 31,2008
    
    
    2009AssetsCash and cash equivalents
    
    Ps.
    271
    
    
    Ps.
    574Trade receivables, net
    
    
    2,356
    
    
    
    1,755Taxes receivable
    
    
    203
    
    
    
    178Trade and debt receivables from affiliates
    
    
    873
    
    
    
    3,217Other receivables
    
    
    480
    
    
    
    396Inventories
    
    
    2,199
    
    
    
    1,547Current assets
    
    
    6,382
    
    
    
    7,667Land and buildings, net
    
    
    2,598
    
    
    
    2,487Machinery and equipment, net
    
    
    2,843
    
    
    
    2,532Construction in progress
    
    
    372
    
    
    
    211Goodwill
    
    
    771
    
    
    
    702Prepaid pension asset
    
    
    66
    
    
    
    75Deferred taxes
    
    
    1,318
    
    
    
    1,516Other assets
    
    
    607
    
    
    
    538Long-term assets
    
    
    8,575
    
    
    
    8,061Total assets
    
    Ps.
    14,957
    
    
    Ps.
    15,728LiabilitiesShort-term borrowings
    
    Ps.
    1,379
    
    
    Ps.
    803Current maturities of long-term debt
    
    
    48
    
    
    
    48Trade payables
    
    
    1,028
    
    
    
    848Accrued expenses
    
    
    321
    
    
    
    262Derivative financial instruments
    
    
    986
    
    
    
    1,068Accounts and notes payable to affiliates
    
    
    3,008
    
    
    
    4,548Other current liabilities
    
    
    1,692
    
    
    
    913Current liabilities
    
    
    8,462
    
    
    
    8,490Long-term debt
    
    
    849
    
    
    
    536Other long-term liabilities
    
    
    252
    
    
    
    258Long-term liabilities
    
    
    1,101
    
    
    
    794Total liabilities
    
    
    9,563
    
    
    
    9,284Commitments and contingencies (note 12)Stockholders equityCapital stock
    
    
    4,721
    
    
    
    12,421Additional paid-in capital
    
    
    (1,885
    )
    
    
    (4,082
    )Translation effects of foreign affiliated
companies
    
    
    (396
    )
    
    
    (376
    )Accumulated deficit
    
    
    (1,063
    )
    
    
    (5,560
    )Total controlling interest
    
    
    1,377
    
    
    
    2,403Noncontrolling interest
    
    
    4,017
    
    
    
    4,041Total stockholders equity
    
    
    5,394
    
    
    
    6,444Total liabilities and stockholders equity
    
    Ps.
    14,957
    
    
    Ps.
    15,728
   F-107




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##### Table of Contents



Viméxico, S. A. de C. V. and Subsidiaries, VVP Holdings Corporation and Subsidiaries, Vitro
Vidrio y Cristal, S.A. de C.V. and Subsidiaries, Vitro Automotriz, S.A. de C.V. and Subsidiaries,
Vitro Cristalglass, S.L. and Subsidiaries and Vitrocar, S.A. de C.V.
 
 Consolidated and Combined Statements of Operations
 For the years ended December 31, 2007, 2008 and 2009
(Millions of Mexican pesos)
 Year ended December 31,2007
    
    
    2008
    
    
    2009Net sales
    
    Ps.
    13,605
    
    
    Ps.
    13,230
    
    
    Ps.
    11,453Cost of sales
    
    
    9,578
    
    
    
    9,703
    
    
    
    8,839Gross profit
    
    
    4,027
    
    
    
    3,527
    
    
    
    2,614Selling, general and administrative expenses
    
    
    3,245
    
    
    
    3,341
    
    
    
    3,205Operating income (loss)
    
    
    782
    
    
    
    186
    
    
    
    (591
    )Comprehensive financing result:Financing expenses, net
    
    
    472
    
    
    
    610
    
    
    
    662Exchange loss (gain), net
    
    
    86
    
    
    
    171
    
    
    
    (10
    )Derivative financial instruments (gain) loss
    
    
    (3
    )
    
    
    617
    
    
    
    130Gain from monetary position
    
    
    (112
    )443
    
    
    
    1,398
    
    
    
    782Operating income (loss) after
financing cost
    
    
    339
    
    
    
    (1,212
    )
    
    
    (1,373
    )Other expenses, net
    
    
    91
    
    
    
    141
    
    
    
    422Income (loss) before taxes
    
    
    248
    
    
    
    (1,353
    )
    
    
    (1,795
    )Income tax expense (benefit)
    
    
    152
    
    
    
    (735
    )
    
    
    (171
    )Net income (loss) for the year
    
    Ps.
    96
    
    
    Ps.
    (618
    )
    
    Ps.
    (1,624
    )Noncontrolling interest income
    
    Ps.
    182
    
    
    Ps.
    206
    
    
    Ps.
    277Controlling interest loss
    
    
    (86
    )
    
    
    (824
    )
    
    
    (1,901
    )Combined net income (loss)
    
    Ps.
    96
    
    
    Ps.
    (618
    )
    
    Ps.
    (1,624
    )
   F-108




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##### Table of Contents



Viméxico, S. A. de C. V. and Subsidiaries, VVP Holdings Corporation and Subsidiaries, Vitro
Vidrio y Cristal, S.A. de C.V. and Subsidiaries, Vitro Automotriz, S.A. de C.V. and Subsidiaries,
Vitro Cristalglass, S.L. and Subsidiaries and Vitrocar, S.A. de C.V.
 
 Consolidated and Combined Statements of Changes in Stockholders Equity
 For the years ended December 31, 2007, 2008 and 2009
(Millions of Mexican pesos)
 Translationeffect of
    
    
    RetainedAdditional
    
    
    Shortfall
    
    
    
    
    
    
    foreign
    
    
    earnings
    
    
    
    
    
    
    TotalCapital
    
    
    paid-in
    
    
    in restatement
    
    
    Other
    
    
    affiliated
    
    
    (accumulated
    
    
    Noncontrolling
    
    
    Stockholdersstock
    
    
    capital
    
    
    of capital
    
    
    reserves (1)
    
    
    companies
    
    
    deficit)
    
    
    interest
    
    
    equityBalance at December 31, 2006
    
    Ps.
    4,721
    
    
    
    
    
    
    Ps.
    (2,493
    )
    
    Ps.
    (1,740
    )
    
    
    
    
    
    Ps.
    4,028
    
    
    Ps.
    1,438
    
    
    Ps.
    5,954Dividends paid
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (51
    )
    
    
    (51
    )Comprehensive income
    
    
    
    
    
    
    
    
    
    
    (44
    )
    
    
    67
    
    
    
    
    
    
    
    (86
    )
    
    
    207
    
    
    
    144Balance at December 31, 2007
    
    
    4,721
    
    
    
    
    
    
    
    (2,537
    )
    
    
    (1,673
    )
    
    
    
    
    
    
    3,942
    
    
    
    1,594
    
    
    
    6,047Reclassification for adoption of new Mexican Financial Reporting
Standards
    
    
    
    
    
    
    
    
    
    
    2,537
    
    
    
    1,673
    
    
    
    
    
    
    
    (4,181
    )
    
    
    
    
    
    
    29Dividends paid
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (108
    )
    
    
    (108
    )Capital distribution
    
    
    
    
    
    Ps.
    (1,825
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,825Decrease in noncontrolling interest
    
    
    
    
    
    
    (60
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (375
    )
    
    
    (435
    )Comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Ps.
    (396
    )
    
    
    (824
    )
    
    
    1,081
    
    
    
    (139
    )Balance at December 31, 2008
    
    
    4,721
    
    
    
    (1,885
    )
    
    
    
    
    
    
    
    
    
    
    (396
    )
    
    
    (1,063
    )
    
    
    4,017
    
    
    
    5,394Effect in retained earnings of cancellation of preoperating costs
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10
    )
    
    
    
    
    
    
    (10
    )Dividends paid
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (14
    )
    
    
    (14
    )Capital distribution
    
    
    
    
    
    
    (876
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (876
    )Effect on stockholders equity of combining the Affiliated
Companies
    
    
    7,700
    
    
    
    (1,321
    )
    
    
    
    
    
    
    
    
    
    
    (18
    )
    
    
    (2,586
    )
    
    
    
    
    
    
    3,775Comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    38
    
    
    
    (1,901
    )
    
    
    38
    
    
    
    (1,825
    )Balance at December 31, 2009
    
    Ps.
    12,421
    
    
    Ps.
    (4,082
    )
    
    Ps.
    
    
    
    Ps.
    
    
    
    Ps.
    (376
    )
    
    Ps.
    (5,560
    )
    
    Ps.
    4,041
    
    
    Ps.
    6,444
 (1)
    
    Includes the initial cumulative effect of deferred tax and the additional minimum
liability related to employee retirement obligations.   F-109




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##### Table of Contents



Viméxico, S. A. de C. V. and Subsidiaries, VVP Holdings Corporation and Subsidiaries, Vitro
Vidrio y Cristal, S.A. de C.V. and Subsidiaries, Vitro Automotriz, S.A. de C.V. and Subsidiaries,
Vitro Cristalglass, S.L. and Subsidiaries and Vitrocar, S.A. de C.V.
 
 Consolidated Statement of Changes in Financial Position
 For the year ended December 31, 2007
(Millions of Mexican pesos)
 Year endedDecember 31,2007Operating activities:Net income
    
    Ps.
    96Add (deduct) non-cash items:Depreciation and amortization
    
    
    480Provision for employee retirement obligations
    
    
    57Early extinguishment of employee retirement obligations
    
    
    20Amortization of debt issuance costs
    
    
    4Impairment of long-lived assets
    
    
    91Gain from sale of long-lived assets
    
    
    (55
    )Mark-to market of derivative financial instruments
    
    
    29Deferred taxes and workers profit sharing
    
    
    (104
    )618Increase in trade receivables
    
    
    (163
    )Increase in inventories
    
    
    (19
    )Increase in trade payables
    
    
    223Decrease in retained undivided interests in securitized receivables
    
    
    37Change in other current assets and liabilities, net
    
    
    68Employee retirement obligations
    
    
    (101
    )Net resources generated by operating activities
    
    
    663Financing activities:Notes payable to Affiliated Companies
    
    
    317Proceeds from short- term bank loans
    
    
    508Proceeds from long- term bank loans
    
    
    145Amortization in real terms of bank loans
    
    
    (61
    )Payment of short-term bank loans
    
    
    (564
    )Payment of long-term bank loans
    
    
    (384
    )Debt issuance costs
    
    
    (9
    )Dividends paid to minority interest
    
    
    (51
    )Other financing activities
    
    
    (56
    )Net resources used in financing activities
    
    
    (155
    )Investing activities:Investments in land, buildings, machinery and equipment
    
    
    (324
    )Proceeds from sale of land, buildings, machinery and equipment
    
    
    131Restricted cash
    
    
    46Investment in affiliated companies
    
    
    (181
    )Accounts receivable long-term
    
    
    53Other long-term assets
    
    
    (4
    )Deferred charges
    
    
    (206
    )Net resources used in investing activities
    
    
    (485
    )Net increase in cash and cash equivalents
    
    
    23Balance at beginning of year
    
    
    170Balance at end of year
    
    Ps.
    193
   F-110




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##### Table of Contents



Viméxico, S. A. de C. V. and Subsidiaries, VVP Holdings Corporation and Subsidiaries, Vitro
Vidrio y Cristal, S.A. de C.V. and Subsidiaries, Vitro Automotriz, S.A. de C.V. and Subsidiaries,
Vitro Cristalglass, S.L. and Subsidiaries and Vitrocar, S.A. de C.V.
 
 Consolidated and Combined Statements of Cash Flows
 For the years ended December 31, 2008 and 2009
(Millions of Mexican pesos)
 Year ended December 31,2008
    
    
    2009Operating activities:Loss before income taxes
    
    Ps.
    (1,353
    )
    
    Ps.
    (1,795
    )Items related to investing activities:Depreciation and amortization
    
    
    488
    
    
    
    575(Gain) loss from sale of long-lived assets
    
    
    (92
    )
    
    
    55Impairment of long-lived assets
    
    
    196
    
    
    
    207Foreign exchange loss
    
    
    (7
    )Interest income
    
    
    (50
    )
    
    
    (232
    )Items related to financing activities:Derivative financial instruments
    
    
    617
    
    
    
    130Foreign exchange loss (income)
    
    
    238
    
    
    
    (115
    )Interest expense
    
    
    660
    
    
    
    893Changes in:Trade receivables
    
    
    169
    
    
    
    1,098Inventories
    
    
    44
    
    
    
    606Trade payables
    
    
    (372
    )
    
    
    (166
    )Other current assets and liabilities
    
    
    226
    
    
    
    (144
    )Employee benefits
    
    
    (3
    )
    
    
    (9
    )Income taxes
    
    
    10
    
    
    
    29Net cash provided by operating activities
    
    
    771
    
    
    
    1,132Investing activities:Investments in machinery and equipment
    
    
    (286
    )
    
    
    (264
    )Proceeds from sale of machinery and equipment
    
    
    150
    
    
    
    32Investment in affiliated companies
    
    
    (43
    )
    
    
    (454
    )Other assets
    
    
    7
    
    
    
    11Deferred charges
    
    
    (119
    )
    
    
    (36
    )Interest received
    
    
    49
    
    
    
    153Notes receivables to affiliates
    
    
    (663
    )
    
    
    (1,224
    )Capital distribution to noncontrolling interest
    
    
    (20
    )Net cash used in investing activities
    
    
    (925
    )
    
    
    (1,782
    )Cash to be obtained from financing activities
    
    
    (154
    )
    
    
    (650
    )Financing activities:Proceeds from (payments of) short-term bank loans
    
    
    218
    
    
    
    (563
    )Interest paid
    
    
    (645
    )
    
    
    (741
    )Dividends paid to minority interest
    
    
    (108
    )
    
    
    (14
    )Proceeds from long-term bank loans
    
    
    88
    
    
    
    341Payments of long-term bank loans
    
    
    (77
    )
    
    
    (322
    )Notes payable to affiliates
    
    
    529
    
    
    
    1,995Derivative financial instruments
    
    
    156
    
    
    
    (47
    )Issuance of capital stock
    
    
    
    
    
    
    224Other financing activities
    
    
    163
    
    
    
    1Net cash provided by financing activities
    
    
    324
    
    
    
    874Net increase in cash and cash equivalents
    
    
    170
    
    
    
    224Adjustment to cash flows due to exchange rate fluctuations
    
    
    (23
    )Cash and cash equivalents at the beginning of year
(includes restricted cash of Ps. 18 and Ps. 20 at
December 31, 2008 and 2009, respectively)
    
    
    276
    
    
    
    423Cash and cash equivalents at the end of year (includes
restricted cash of Ps. 20 and Ps. 73 at December 31, 2008
and 2009, respectively)
    
    Ps.
    423
    
    
    Ps.
    647
   F-111




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##### Table of Contents



Viméxico, S. A. de C. V. and Subsidiaries, VVP Holdings Corporation and Subsidiaries, Vitro
Vidrio y Cristal, S.A. de C.V. and Subsidiaries, Vitro Automotriz, S.A. de C.V. and Subsidiaries,
Vitro Cristalglass, S.L. and Subsidiaries and Vitrocar, S.A. de C.V.
 
 Notes to Consolidated and Combined Financial Statements
 For the years ended December 31, 2007, 2008 and 2009
(Millions of Mexican pesos)
 1.
    
    Activities of the companies
 Viméxico, S.A. de C.V. (Viméxico) and subsidiaries, VVP Holdings Corporation and Subsidiaries,
Vitro Vidrio y Cristal, S.A. de C.V. and Subsidiaries, Vitro Automotriz, S.A. de C.V. and
Subsidiaries, Vitro Cristalglass, S.L. and Subsidiaries and Vitrocar, S.A. de C.V.,
subsidiaries of Vitro, S.A.B. de C.V. (Vitro), are primarily dedicated to the manufacturing
and selling of float glass in the housing and automotive industries.
 2.
    
    Basis of presentation and principles of combination
 a.
    
    Basis of presentation The accompanying combined financial statements of
Viméxico, S.A. de C.V. and subsidiaries, VVP Holdings Corporation and Subsidiaries, Vitro
Vidrio y Cristal, S.A. de C.V. and Subsidiaries, Vitro Automotriz, S.A. de C.V. and
Subsidiaries, Vitro Cristalglass, S.L. and Subsidiaries and Vitrocar, S.A. de C.V. (the
Company) are prepared on the basis of Mexican Financial Reporting Standards (MFRS,
individually referred to as Normas de Información Financieraor NIFs).
 On January 1, 2009, VVP Holdings Corporation and Subsidiaries, which was previously 100%
owned by Viméxico, was sold to Vitro. On December 15, 2009, Vitro Vidrio y Cristal, S.A.
de C.V. and Subsidiaries and Vitro Automotriz, S.A. de C.V. and Subsidiaries, which was
previously 100% owned by Viméxico, was sold to Vitro through a dilution of Viméxicos
interest. On December 15, 2009, Vitro Cristalglass, S.L. and Subsidiaries and Vitrocar,
S.A. de C.V., which was previously 100% owned by Viméxico, was sold to Fic Regimontano,
S.A.P.I. de C.V. Such entities have been combined in the 2009 financial statements to
ensure the comparability of the financial position, results of operations and cash flows
for all years presented (Note 18).
 The consolidated and combined financial statements and notes as of December 31, 2008 and
2009 and for the years then ended, include balances and transactions denominated in
Mexican pesos of different purchasing power, while those as of December 31, 2007 and for
the year ended December 31, 2007 are presented in Mexican pesos of purchasing power of
December 31, 2007; consequently, they are not comparable.
 In the consolidated and combined financial statements and these notes, references to
pesos or Ps. correspond to Mexican pesos, and references to dollars or US$ correspond
to dollar of United States of America (the United States).
 The accompanying consolidated and combined financial statements for the year ended
December 31, 2009 have been prepared assuming that the Company will continue as a going
concern. As shown in the accompanying consolidated and combined financial
statements for the years ended December 31, 2008 and 2009 the Company incurred a net loss
of Ps. 618 and Ps.1,624, respectively, its current liabilities exceed their current
assets in Ps. 2,080 and Ps. 823, respectively. Additionally, as mentioned in Notes 12 d)
and 21 a), to the accompanying financial statements, Vitro has not met the obligations
stipulated in its debt issuance agreements, and has received payment acceleration notices
from a group of its bondholders. Vitro continues its productive operations regularly, and
is working, at the same time, on the negotiations with its financial creditors to
restructure its debt. The Company guarantees such debt. These factors raise substantial
doubt about its ability to continue as a going concern. The accompanying consolidated and
combined financial statements do not include the effect that might arise if the Companys
and Vitros plans could not be realized.
  F-112




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##### Table of Contents



b.
    
    Consolidated and Combined financial statementsThe consolidated and combined
financial statements include those of Viméxico, S.A. de C.V. and Subsidiaries, VVP
Holdings Corporation and Subsidiaries, Vitro Vidrio y Cristal, S.A. de C.V. and
Subsidiaries, Vitro Automotriz, S.A. de C.V. and Subsidiaries, Vitro Cristalglass, S.L.
and Subsidiaries and Vitrocar, S.A. de C.V.
 As of December 31, 2008 and 2009, the main subsidiaries and Affiliated Companies
presented within the consolidated and combined financial statements are:
 Ownership
    
    
    OwnershipPercentage
    
    
    Percentage2008
    
    
    2009Vidrio Plano de México, S.A. de C.V.
    
    
    100
    
    
    
    100Vidrio Plano, S.A. de C.V.
    
    
    100
    
    
    
    100Cristales Inastillables de México, S.A. de C.V.
    
    
    100
    
    
    
    100Vitro Flex, S.A. de C.V.
    
    
    100
    
    
    
    100Distribuidora de Vidrio y Cristal S.A. de C.V.
    
    
    100
    
    
    
    100Vitrocar, S.A. de C.V. (5)
    
    
    100
    
    
    
    Cristales Automotrices, S.A. de C.V.
    
    
    51
    
    
    
    51Distribuidor Vidriero Lan, S.A. de C.V.
    
    
    100
    
    
    
    100Vitro Automotriz, S.A. de C.V. (6)
    
    
    100
    
    
    
    0.08Vitro Vidrio y Cristal, S.A. de C.V. (7)
    
    
    100
    
    
    
    0.007Productos de Valor Agregado en Cristal, S.A. de C.V.
(1)
    
    
    55
    
    
    
    0.001Vitro Flotado Cubiertas, S.A. de C.V.
    
    
    100
    
    
    
    100Vidrio Plano de Mexicali, S.A. de C.V.
    
    
    100
    
    
    
    100Vidrio y Cristal del Noroeste, S.A. de C.V. (2)
    
    
    100
    
    
    
    100IP Vitro Vidrio y Cristal, Ltd
    
    
    0.01
    
    
    
    0.01VVP Europa Holdings BV
    
    
    100
    
    
    
    100Vitro Cristalglass, S.L. (3) (4)
    
    
    100
    
    
    
    8.6Vitro Chaves Industria de Vidrio, S.A.
    
    
    60
    
    
    
    5.1VVP Holdings Corporation. (8)
    
    
    100
    
    
    
    Vitro America, Inc.
    
    
    100
    
    
    
    Vitro Colombia, S.A.
    
    
    100
    
    
    
    100Cristales Centroamericanos, S.A.
    
    
    100
    
    
    
    100Vau, S.A. de C.V.
    
    
    100
    
    
    
    100
 (1)
    
    In August 2007, Vitro Vidrio y Cristal, S.A. de C.V. (Vitro VyC), a subsidiary
of Viméxico, acquired 55% of the outstanding shares of Productos de Valor Agregado
en Cristal, S.A. de C.V. (PVA) (see note 18 b).(2)
    
    In July 2007, Viméxico acquired the remaining 50% of the outstanding
shares of Vitro AFG, S.A. de C.V. (Vitro AFG) from AFG Industries Inc. (AFG
Industries), in order to assume control and increase its ownership to 100%,
subsequently changing its legal name to Vidrio y Cristal del Noroeste, S.A. de C.V.
(see note 18 a).(3)
    
    In July 2008, Viméxico was notified by its partner of its right to
exercise the put option related to the sale of its 40% interest in Vitro
Cristalglass, S.L. (Vitro Cristalglass). The option was officially exercised in
August 2008 and beginning in September 2008, Vitro Cristalglass is 100% consolidated
(see note 18 c).(4)
    
    In December 2009, 60% of the shares of Vitro Cristalglass, S.L. were sold
to FIC Regiomontano, S.A.P.I. de C.V. (FIC Regiomontano) (See Note 18 c).(5)
    
    In December 2009, 100% of the shares of Vitrocar, S.A. de C.V. were sold
to FIC Regiomontano (See Note 18 e).(6)
    
    Pursuant to a unanimous resolution of Vitro Automotriz, S.A. de C.V.
(VAU) on December 15, 2009, variable capital was increased by Ps.133 and Series B
shares by 133,489,105, by Vitro; therefore Viméxicos shareholding decreased (See
Note 18 g).(7)
    
    Pursuant to a unanimous resolution of Vitro Vidrio y Cristal, S.A. de
C.V. on December 15, 2009, variable capital was increased by Ps. 1,509 and Series
B-2 shares by 3,201,509,234,159, by Vitro, therefore Viméxicos shareholding
decreased (See Note 18 f).(8)
    
    In January 2009, 100% of the shares of VVP Holdings Corporation were sold
to Vitro. (See Note 18 d).  F-113




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The following combined companies are referred to in these notes as Affiliated
Companies:
 VVP Holdings Corporation and its subsidiary:Vitro America, Inc. 100% ownershipVitro Vidrio y Cristal, S.A. de C.V. and its subsidiary:Productos de Valor Agregado en Cristal, S.A. de C.V. 55% ownershipVitro Automotriz, S.A. de C.V. and its subsidiary:Cristales y Servicios, S.A. de C.V. 51% ownershipVitro Cristalglass, S.L. and its subsidiary:Vitro Chaves Industria de Vidrio, S.A. 60% ownershipVitrocar, S.A. de C.V.
 Intercompany balances and transactions have been eliminated from these consolidated and
combined financial statements.
 c.
    
    Translation of financial statements from foreign companies The consolidated and
combined financial statements of the Companys foreign operations are translated to
Mexican pesos considering the following methodologies:
 Beginning in 2008, foreign operations whose functional currency is the same as their
local currency translate their financial statements to Mexican pesos (the Companys
reporting currency) using the following exchange rates: 1) the closing exchange rate in
effect at the balance sheet date for assets and liabilities; 2) historical exchange rates
for stockholders equity, revenues, costs and expenses. Through 2007, the financial
statements of foreign operations that operated independently of the Company recognized
the effects of inflation of the country in which they operate and were then translated to
Mexican pesos using the closing exchange rate in effect at the balance sheet date, with
such effects recorded in cumulative translation adjustment within stockholders equity.
 Beginning in 2008, foreign operations with a functional currency different from the local
currency translate their financial statements from the local currency to the functional
currency, using the following exchange rates: 1) the closing exchange rate in effect at
the balance sheet date for monetary assets and liabilities; 2) historical exchange rates
for non-monetary assets and liabilities and stockholders equity; and 3) the rate on the
date of accrual of revenues, costs and expenses, except those arising from non-monetary
items that are translated using the historical exchange rate for the related non-monetary
item. Translation effects are recorded within comprehensive financing result.
Subsequently, to translate the financial statements from the functional currency to
Mexican pesos, the methodology described in the preceding paragraph is used.
 Local and functional currencies of the Companys foreign operations are as follows:
 Companies in:
    
    Recording currency
    
    Functional currencyUnited States of America
    
    Dollar
    
    DollarEurope
    
    Euro
    
    Euro
 d.
    
    Comprehensive income (loss) Represents changes in stockholders equity during
the year, for concepts other than distributions and activity in contributed common stock,
and is
comprised of the net income (loss) of the year, plus other comprehensive income (loss)
items of the same period, which are presented directly in stockholders equity without
affecting the consolidated and combined statements of operations. Other comprehensive
income (loss) items consist of the translation effects of foreign operations and, until
2007, the shortfall in restatement of capital and the additional minimum labor liability
adjustment.
 e.
    
    Classification of costs and expenses Costs and expenses presented in the
consolidated and combined statements of operations were classified according to their
function which allows for the analysis of the Companys gross margin.
 f.
    
    Income from operations The Company presents operating income in the consolidated
and combined statements of operations as it is an important financial indicator within
the industry and helps to evaluate the Companys performance. Operating income includes
ordinary income and cost of sales as well as operating costs. This presentation is
comparable with the one used in the consolidated and combined financial statements as of
December 31, 2007 and 2008.
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3.
    
    Summary of significant accounting policies
 The accompanying consolidated and combined financial statements have been prepared in
conformity with MFRS, which require that management make certain estimates and use certain
assumptions that affect the amounts reported in the consolidated and combined financial
statements and their related disclosures; however, actual results may differ from such
estimates. The Companys management, upon applying professional judgment, considers that
estimates made and assumptions used were adequate under the circumstances. The significant
accounting policies of the Company are as follows:
 a.
    
    Changes in accounting policies
 Beginning January 1, 2008 and 2009, the Company adopted
the following new NIFs; and a
result the accompanying consolidated and combined financial statements are not
comparable.For Fiscal Year 2008
 
    
    NIF B-2, Statement of Cash Flows (NIF B-2) Supersedes Bulletin B-12,
Statement of Changes in Financial Position. NIF B-2 permits the presentation of such
statement using either the direct or the indirect method; the Company elected the
indirect method. The statement of cash flows is presented in nominal pesos.
According to NIF B-2, this standard should be recognized prospectively;
consequently, the Company presents a consolidated and combined statement of cash
flows for the years 2008 and 2009, and a consolidated and combined statement of
changes in financial position for 2007.
    
    NIF B-10, Effects of inflation (NIF B-10) Considers two economic
environments: a) an inflationary environment, where cumulative inflation over a
three-year period is 26% or more, in which case, the effects of inflation need to be
recognized, and b) non-inflationary environment, where inflation is less than 26% in
the same period, in which case, the effects of inflation may not be recognized in
the financial statements. Also, NIF B-10 eliminates the replacement cost and
specific index valuation methods and requires that the gain (loss) from monetary
position in equity and the cumulative gain
(loss) from holding non-monetary assets be reclassified to retained earnings, except
for the gain (loss) from holding non-monetary assets that is identified with
inventories or fixed assets that have not been realized as of the effective date of
this standard. Such amounts should be maintained in stockholders equity and
realized within current earnings of the period in which such assets are depreciated
or sold. The Company determined it was impractical to identify the gain (loss) from
monetary position in equity and the cumulative gain (loss) from holding non-monetary
assets relating to unrealized assets as of January 1, 2008; therefore, on that date,
the Company reclassified the entire balance of shortfall in restatement of capital
stockholders equity of Ps. 2,537. NIF B-10 establishes that this accounting change
be recognized prospectively.Since cumulative inflation over the three fiscal years prior to those ended December
31, 2008 and 2009 was 11.56% and 14.34%, respectively, the environment in which the
Company operates is no longer inflationary, and the Company discontinued recognition
of the effects of inflation in its financial statements beginning January 1, 2008.
However, assets, liabilities and stockholders equity at December 31, 2008 and 2009
include restatement effects recognized through December 31, 2007.
    
    NIF D-3, Employee Benefits (NIF D-3) Incorporates current and deferred
statutory employee profit sharing (PTU) as part of its provisions and establishes
that deferred PTU must be determined using the asset and liability method
established in NIF D-4, Income Taxes, instead of only considering temporary
differences that arise in the reconciliation between the accounting result and
income for PTU purposes. This change did not have effect in the Companys financial
position.Additionally, as of December 31, 2008, NIF D-3 removed the recognition of the
additional minimum liability, which resulted in the elimination of Ps. 117, of which
Ps. 72 (is presented in the category of other assets) was related to the prepaid
pension asset and Ps. 45 was related to the additional minimum labor obligation
recognized in stockholders equity (Ps. 29 net of tax). Additionally, the beginning
balance of Ps. 13 of unrecognized actuarial gains and losses from termination
benefits was recorded against results of operations.
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NIF D-3 also incorporates the career salary concept in the actuarial calculation and
limits the amortization period of the following items to the lesser of five years or
the employees remaining labor life:
 
    
    The beginning balance of the transition liability for termination and
retirement benefits.
    
    The beginning balance of prior service costs and plan modifications.
    
    The beginning balance of actuarial gains and losses from retirement benefits.
 
    
    NIF D-4, Income Taxes (NIF D-4) Eliminated the permanent difference concept;
clarified and incorporated certain definitions, and requires that the balance of the
initial cumulative effect of deferred income taxes of Ps. (1,644) be reclassified to
retained earnings.
 For Fiscal Year 2009
 
    
    NIF B-8, Consolidated or Combined Financial Statements Establishes that special
purpose entities, over which control is exercised, should be consolidated. Provided
certain requirements are met, it allows the option to present stand-alone financial
statements of intermediate controlling companies and requires that potential voting
rights be considered to analyze whether control exists.As a result of the analysis performed due to the requirements noted above, the special
purposes entities that hold accounts receivable related to the Companys
securitization transactions are now included within the consolidated and combined
financial statements (see note 9 b). The condensed amounts and the effect on the
balance sheet as of December 31, 2008 resulting from the retrospective application of
the standard, as well as comparative presentation as of December 31, 2009 is as
follows:
 December
    
    
    
    
    
    
    December31, 2008
    
    
    
    
    
    
    31, 2008As
    
    
    Debit
    
    
    As
    
    
    DecemberPresented
    
    
    (credit)
    
    
    Restated
    
    
    31, 2009Other receivables
    
    Ps.
    349
    
    
    Ps.
    131
    *
    
    Ps.
    480
    
    
    Ps.
    396Trade receivables
    
    
    755
    
    
    
    1,601
    
    
    
    2,356
    
    
    
    1,755Retained undivided
interests in
securitized
receivables
    
    
    726
    
    
    
    (726
    )Short-term borrowings
    
    
    (671
    )
    
    
    (708
    )
    
    
    (1,379
    )
    
    
    (803
    )Interests payable
    
    
    (48
    )
    
    
    
    
    
    
    (48
    )
    
    
    (68
    )Long-term debt
    
    
    (177
    )
    
    
    (298
    )
    
    
    (475
    )
    
    
    (470
    )
 *
    
    Represents restricted cash presented in other accounts receivable. 
    
    NIF C-8, Intangible assets Establishes the following significant
amendments:
 (i)
    
    The intangible asset concept is redefined, establishing that the
separability condition is not the only condition needed to be identified.(ii)
    
    Establishes that the acquisition cost must be considered in the
initial valuation, identifying the cases of an individual business acquisition or
internally arising business, and requiring that it be probable that future
economic benefits must flow to the entity.(iii)
    
    Establishes that subsequent disbursements on research and
development projects in progress must be recognized as expenses when accrued, if
they are part of the research phase, or, as an intangible asset, if they meet the
criteria to be recognized as such.(iv)
    
    The assumption that an intangible asset could not exceed its useful
life of twenty years was eliminated.
 As a result of adopting this NIF in 2009, the unamortized balance capitalized
preoperating costs of Ps. 10 net of income tax as of December 31, 2008 was written off
against retained earnings.
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b.
    
    Recognition of the effects of inflation As mentioned in a) above, beginning
January 1, 2008, the Company discontinued the recognition of the effects of inflation.
Until December 31, 2007, the Company recognized effects of inflation by adjusting its
consolidated and combined financial statements in terms of pesos with the purchasing
power of the date the most recent balance sheets was presented.
 Vimexicos Mexican subsidiaries and Mexican Affiliated Companies used the Indice Nacional
de Precios al Consumidor (Mexican National Consumer Price Index, or NCPI), published by
Banco de Mexico to restate the consolidated and combined financial statements. For
Vimexicos foreign subsidiaries and foreign Affiliated Companies the Consumer Price Index
  All Urban Consumers  All Items, Unadjusted (CPI) published by the US Labor
Department was used to restate the consolidated and combined financial statements, and
the restated consolidated and combined financial statements were translated into Mexican
pesos using the applicable exchange rate at the end of the last period presented, except
in the case of the Companys companies located in Spain for which it applied the Price
Consumption Index (PCI), published by the National Institute of Statistics of Spain
before translation into Mexican pesos using the exchange rate of the Euro of the last
period presented.
 Through December 31, 2007, such recognition results mainly in inflationary gains or
losses on non-monetary and monetary items that are presented in the consolidated and
combined financial statements under the following two captions:
 
    
    Shortfall in restatement of capital This item, which is an element of
stockholders equity, represents the accumulated effect of holding nonmonetary
assets and the effect of the initial monetary position gain or loss. The cumulative
effect of holding nonmonetary assets represents the difference between the specific
values of nonmonetary assets in excess of or below the increase attributable to
general inflation.
    
    Monetary position result Monetary position result reflects the result of
holding monetary assets and liabilities during periods of inflation. Values stated
in current monetary units decrease in purchasing power over time. This means that
losses are incurred by holding monetary assets, whereas gains are realized by
maintaining monetary liabilities. The net effect is presented in the statements of
operations as part of the total comprehensive financing result. For foreign
companies the result from monetary position is calculated using the CPI, except in
the case of the Companys operations located in Spain for which it applies the PCI.
 Inflation rates in Mexico for the years ended December 31, 2007, 2008 and 2009 were based
on the NCPI are 3.76%, 6.53% and 3.57%, respectively.
 c.
    
    Cash and cash equivalentsConsist mainly of bank deposits in checking accounts
and readily available investments of highly liquid short-term investments. They are
valued at the lower of acquisition cost plus accrued yields or estimated net realizable
value and are recognized in results of operations as they accrue.
 d.
    
    Investments in securitiesAccording to its intent, from the date of acquisition,
the Company classifies its investments in securities instruments in any of the following
categories: (1) trading, when the Company intends to trade debt and equity instruments in
the short-term, before their maturity, if any. These investments are stated at fair
value; any fluctuations in the value of these investments are recognized in current
earnings; (2) held-to-maturity, when the Company intends to and is financially capable of
holding financial instruments until their maturity. These investments are recognized and
maintained at amortized cost; and (3) available-for-sale, investments that include those
that are classified neither as trading nor held-to-maturity. These investments are stated
at fair value; any unrealized gains and losses resulting from valuation, net of income
tax, are recorded as a component of other comprehensive income within stockholders
equity and reclassified to current earnings upon their sale or maturity. The monetary
position resulting from the effects of inflation on available-for-sale investments is
recorded as a component of other comprehensive income. Fair value is determined using
prices quoted in recognized markets. If such instruments are not traded, fair value is
determined by applying recognized technical valuation models.
 Investments in securities classified as held-to-maturity and available-for-sale are
subject to impairment tests. If there is evidence that the reduction in fair value is
other than temporary, the impairment is recognized in current earnings.
 Financial liabilities derived from the issuance of debt instruments are recorded at the
value of the obligations they represent. Any expenses, premiums and discounts related to
the issuance of debt financial instruments are amortized over the life of the
instruments.
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e.
    
    Derivative financial instrumentsIn addition to market, credit and liquidity
risks, the Company is exposed to risks such as: natural gas prices, interest rates and
foreign exchange currency fluctuations between the peso/US dollar and peso/euro.
 The Company has a policy for its derivative financial instruments (DFI) operations,
which sets forth the guidelines for the analysis, negotiation, authorization,
contracting, operating, monitoring and recording DFI, in order to analyze the risk
exposure to financial markets, commodities and fluctuations in the economic and financial
variables.
 For the risk strategies and the surveillance regarding the compliance of the chosen risk,
there is a Risk Committee which acts in compliance with the policy, and which is
comprised by various Company officials.
 The Company states all derivatives at fair value in the balance sheet, regardless of the
purpose for holding them. The recognition of the changes in the fair value of derivative
instruments that are designated as a hedge for accounting purposes depends on if they are
fair value hedges or cash flow hedges.
 Fair value is determined using prices quoted in recognized markets. If such instruments
are not traded, fair value is determined by applying recognized technical valuation
models.
 When derivatives are entered into to hedge risks, and such derivatives meet all hedging
requirements, their designation is documented describing the transactions objective,
characteristics, accounting treatment and how the ineffectiveness of the instrument will
be measured.
 Changes in the fair value of derivative instruments designated as hedges for accounting
purposes are recognized as follows: (1) for fair value hedges, changes in both the
derivative instrument and the hedged item are recognized in current earnings; (2) for
cash flow hedges, changes in the derivative instrument are temporarily recognized as a
component of other comprehensive income and then reclassified to current earnings when
affected by the hedged item. Any ineffective portion of the change in fair value is
immediately recognized in current earnings, within total comprehensive financing result.
 The Companys derivative financial instruments have not been designated as hedges for
accounting purposes. Changes in fair value of such derivative instruments are recognized
in current earnings as a component of total comprehensive financing result.
 The Company reviews all contracts entered into to identify embedded derivatives that
should be segregated from the host contract for purposes of valuation and recognition.
When an embedded derivative is identified and the host contract has not been stated at
fair value and adequate elements for its valuation exist, the embedded derivative is
segregated from the host contract, stated at fair value and classified as trading or
designated as a financial instrument for hedging. Initial valuation and changes in the
fair value of the embedded derivatives at the closing of each period are recognized in
current earnings.
 f.
    
    Inventories and cost of salesInventories are stated at the average purchase
price or at the average production price, without exceeding net realizable value. Cost of
sales is determined by applying such average amounts when the inventories are utilized or
sold at the time of the sale. Through December 31, 2007, cost of sales was previously
restated using replacement cost or the latest production cost at the time of the sale.
 g.
    
    Land, buildings, machinery and equipment Expenditures for land, buildings,
machinery and equipment, including renewals and improvements that extend useful lives,
are capitalized and beginning on January 1, 2008, are recorded at acquisition cost.
Balances arising from acquisitions made through December 31, 2007 were restated for the
effects of inflation by applying factors derived from the NCPI through that date. The
initial balance to apply the NCPI was the net replacement value of the Companys
long-lived asset as of December 31, 1996. For machinery and equipment purchased in a
foreign country, the restatement was based on the inflation index mentioned above and the
exchange rate at the end of each period.
 Beginning on January 1, 2007, the carrying value of qualifying assets includes the
capitalization of total comprehensive financing result (CFR).
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Depreciation is calculated using the straight-line method based on the remaining
estimated useful lives of the related assets. Depreciation begins in the month in which
the asset is placed in service. The estimated useful lives of the assets are as follows:
 YearsBuildings
    
    
    20 to 50Machinery and equipment
    
    
    3 to 30
 Maintenance and repair expenses are recorded as costs and expenses in the period
incurred.
 h.
    
    Other assets Other assets primarily include debt issuance costs and the
capitalized software costs. They are recorded at acquisition value and, until December
31, 2007, were
restated using factors derived from the NCPI. The debt issuance costs are amortized over
the term of the related financial liability and capitalized software is amortized over a
period of 80 months, which is its expected useful life.
 i.
    
    Impairment of long-lived assets in use The Company reviews the carrying amounts
of long-lived assets in use when an impairment indicator suggests that such amounts might
not be recoverable, considering the greater of the present value of future net cash flows
or the net sales price upon disposal. Impairment is recorded when the carrying amounts
exceed the greater of the amounts mentioned above. The impairment indicators considered
for these purposes are, among others, the operating losses or negative cash flows in the
period if they are combined with a history or projection of losses, depreciation and
amortization charged to results, which in percentage terms in relation to revenues are
substantially higher than that of previous years, obsolescence, reduction in the demand
for the products manufactured, competition and other legal and economic factors.
 j.
    
    ProvisionsProvisions are recognized for current obligations that result from a
past event, that are probable to result in the use of economic resources, and can be
reasonably estimated.
 k.
    
    GoodwillGoodwill represents the excess of cost over fair value of subsidiaries
and Affiliated Companies as of the date of acquisition and at least once a year are
subject to impairment tests. Through December 31, 2007 it was restated using the NCPI.
The Company recognizes goodwill corresponding to the controlling interest and beginning
in 2009, the non-controlling interest.
 l.
    
    Employee benefitsDirect employee benefits are calculated based on the services
rendered by employees, considering their most recent salaries. The liability is
recognized as it accrues.
 m.
    
    Labor obligationsSeniority premiums, pension plans and severance payments are
recognized as costs over the expected service period of employees and are calculated by
independent actuaries using the projected unit credit method, using nominal interest
rates beginning in 2008 and real (inflation-adjusted) interest rates through 2007.
 n.
    
    Foreign currency balances and transactions Foreign currency transactions are
recorded at the applicable exchange rate in effect at the transaction date. Monetary
assets and liabilities denominated in foreign currency are translated into Mexican pesos
at the applicable exchange rate in effect at the consolidated and combined balance sheet
date. Exchange fluctuations are recorded as a component of net comprehensive financing
cost in the consolidated and combined statements of operations.
 o.
    
    Revenue recognitionRevenues and related costs are recognized in the period in
which risks and rewards of ownership of the inventories are transferred to customers,
which generally coincide with the shipment of products to customers in satisfaction of
orders.
 p.
    
    Statutory employee profit sharing (PTU)Statutory employee profit sharing is
recorded in the results of the year in which it is incurred and presented under other
income and expenses in the accompanying consolidated and combined statements of
operations. Beginning in 2008 deferred PTU is derived from temporary differences that
resulted from comparing the accounting and tax basis of assets and liabilities and,
through 2007, resulted from comparing the accounting result and income for PTU purposes.
Deferred PTU is recognized only when it can be reasonably assumed that such difference
will generate a
liability or benefit, and there is no indication that circumstances will change in such a
way that the liabilities will not be paid or benefits will not be realized.
 q.
    
    Income taxesIncome taxes, which calculated as the higher of regular income tax
(ISR) or the Business Flat Tax (IETU), are recorded in the results of the year they are
incurred. To recognize deferred income taxes, based on its financial projections, the
Company determines whether it expects to incur ISR or IETU and accordingly recognizes
deferred taxes based on the tax it expects to pay. Deferred taxes are calculated by
applying the corresponding tax rate to the applicable temporary differences resulting
from comparing the accounting and tax bases of assets and liabilities and including, if
any, future benefits from tax loss carryforwards and certain tax credits. Deferred tax
assets are recorded only when there is a high probability of recovery.
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Tax on assets (IMPAC), prevailing until 2007, that were expected to be recoverable are
recorded as an advance payment of ISR and presented in the consolidated and combined
balance sheet increasing the deferred ISR asset.
 r.
    
    Foreign affiliated companies as economic hedgesThe Companys management
designated some of its foreign affiliated companies as economic hedges. The resulting
exchange rate fluctuation is presented in the shortfall in restatement of capital within
stockholders equity to the extent the net investment in the foreign affiliated
companies covers the debt. Through December 31, 2007, the result from monetary position
is measured using inflation factors from the designated affiliated companies country of
origin. The effect related to this hedge for 2007, 2008 and 2009 was a net (loss) gain
recognized within comprehensive income, net of income tax of Ps. (5), Ps. 40 and Ps. 2,
respectively.
 4.
    
    Trade receivables
 a.
    
    Trade receivables
 December 31,2008
    
    
    2009Trade receivables are summarized as follows:Trade receivables (1)
    
    Ps.
    2,660
    
    
    Ps.
    2,050Allowance for doubtful accounts
    
    
    (304
    )
    
    
    (295
    )Ps.
    2,356
    
    
    Ps.
    1,755
 (1)
    
    Trade receivables include balances of Ps. 1,006 and Ps. 466 as of December
31, 2008 and 2009, respectively, which serve as collateral as part of the Companys
accounts receivable securitization facilities. Although the related trusts in which
they are held are included in the Companys consolidated and combined financial
statements, they are legally independent (see Note 3 a). b.
    
    Other receivables Other receivables include Ps.10 and Ps. 43 of restricted cash
from the Companys account receivable securitization facilities as of December 31, 2008
and 2009, respectively.
 5.
    
    Inventories
 Inventories are summarized as follows:
 December 31,2008
    
    
    2009Semi-finished and finished products
    
    Ps.
    1,364
    
    
    Ps.
    1,002Raw materials
    
    
    503
    
    
    
    324Packaging materials
    
    
    20
    
    
    
    121,887
    
    
    
    1,338Spare parts
    
    
    183
    
    
    
    142Merchandise in transit
    
    
    108
    
    
    
    66Refractory and other
    
    
    21
    
    
    
    1Ps.
    2,199
    
    
    Ps.
    1,547
 As of December 31, 2008 and 2009, inventories include obsolescence reserves of Ps. 31 and Ps.
42, respectively.
 As of December 31, 2009, inventory of Ps. 237 has been provided as a guarantee for certain of
the Companys short-term financing transactions.
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6.
    
    Land, buildings, machinery and equipment
 Land, buildings, machinery and equipment are summarized as follows:
 December 31,2008
    
    
    2009Buildings
    
    Ps.
    4,841
    
    
    Ps.
    4,811Accumulated depreciation
    
    
    (2,704
    )
    
    
    (2,773
    )2,137
    
    
    
    2,038Land
    
    
    461
    
    
    
    449Ps.
    2,598
    
    
    Ps.
    2,487
 December 31,2008
    
    
    2009Machinery and equipment
    
    Ps.
    9,167
    
    
    Ps.
    8,738Accumulated depreciation
    
    
    (6,324
    )
    
    
    (6,206
    )Ps.
    2,843
    
    
    Ps.
    2,532
 In 2008 and 2009, the Company capitalized CFR of Ps. 2 and Ps. 3, respectively, directly
attributable to the acquisition of qualifying assets.
 7.
    
    Other assets
 As of December 31, 2008 and 2009, other assets includes Ps. 403 and Ps. 307, of capitalized
software costs, respectively, Ps. 20 of debt issuance costs, as well as Ps. 0 and Ps. 30 of
restricted cash, respectively.
 8.
    
    Derivative financial instruments
 Derivative financial instruments have not been designated as hedges because they do not meet
all of the requirements according to MFRS and are therefore classified as trading instruments
for accounting purposes.
 Vitro Envases de Norteamérica, S.A. de C.V., (Vena), Vidriera Querétaro, S.A. de C.V.,
(Viquesa),Vitro Corporativo, S.A. de C.V., (Vicorp) and Compañía Vidriera, S.A. de C.V.,
(Covisa), subsidiaries of Vitro, entered into an agreement to hedge their natural gas
consumption needs and those of certain affiliated companies. Simultaneously, Vena, Viquesa,
Vicorp and Covisa entered into an agreement that transferred a portion of the rights and
obligations received from their natural gas hedging agreement to the Company.
 Derivative financial instruments held for trading purposes:
 Notional
    
    
    
    
    
    
    Fair valueOpen derivative financial instruments
    
    MMBTUs*
    
    
    Period
    
    
    liabilityNatural gas swaps and options
contracted through affiliated
    
    
    1921
    
    
    
    2009 to 2011
    **
    
    Ps.
    219
 *
    
    Million British Thermal Units.**
    
    As of December 31, 2009, the Company has hedges for approximately 32% of its
estimated consumption at an average price of approximately US$6.80 per MMBTU for 2010
and 19% of its estimated consumption at an average price of approximately US$7.32 per
MMBTU for 2011. The Company performed a sensitivity analysis to determine its exposure to market risks
for derivative financial instruments held as of December 31, 2009. The sensitivity analysis
was performed applying valuation models fully accepted for these types of instruments, and
considering changes in the underlying value that imply variances of 10% of the reference
price. The additional variances affecting the valuation model such as interest rate and
exchange rates, for purposes of the analysis, were deemed constant. Before an adverse change
of 10% in the reference price, the fair value of the position of the Companys derivative
financial instruments would be affected by approximately US$1 million.
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The following table discloses the derivative financial instruments the Company unwound in
2008:
 Summary of unwound derivative financial instruments
    
    LiabilityNatural gas contracts
    
    Ps.
    853
 In the fourth quarter of 2008 the Companys management decided to unwind a majority of its
open derivative positions that had been adversely affected due to high volatility experienced
in the financial markets, which resulted in a significant reduction in energy prices.
 As of December 31, 2008, certain positions have been unwound for approximately Ps. 853 million
and have not been paid.
 During February and March of 2009, six out of the seven banks that are counterparties with
whom Vitro and some of its subsidiaries entered into derivative financial instruments (the
Counterparties) have filed law suits against companies as mentioned in the second paragraph
of this note in the Supreme Court of the State of New York demanding the payment of US$240
million plus interest and other fees related to the unwound derivative instruments.
 The Counterparties have requested that a resolution be sought through the courts by filing a
motion for summary judgment. This solution was postponed on various occasions beginning in
August 2009. (See notes 21 b and 21 c).
 Embedded derivatives:
 The Company identified embedded derivatives within certain supply agreements. As of December
31, 2009, the amount recognized was an asset of Ps. 4 and a credit to comprehensive financing
cost in the statement of operations.
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9.
    
    Short and Long-term debt
 a.
    
    As of December 31, 2008 and 2009, short-term borrowings denominated in Pesos
totaled Ps. 0 and Ps. 105, respectively, denominated in US dollars totaled Ps. 961 and
Ps. 208, respectively, and denominated in euros totaled Ps. 418 and Ps. 490,
respectively. During 2009, the Companys weighted average interest rate for short-term
borrowings denominated in Ps, US dollars and euros was 11.05%, 11.08% and 4.08%,
respectively.
 b.
    
    Long-term debt consists of the following:
 December 31,2008
    
    
    2009Payable in US dollars:Capital lease with fixed interest rate of 10.7494%, maturing in several installments through 2016.
    
    Ps.
    92
    
    
    Ps.
    79Capital lease with interest rate ranging between 6% and 7.67%, maturing in several installments through 2012.
    
    
    12
    
    
    
    5Capital lease with fixed interest rate of 7.00%, maturing in several installments through 2015.
    
    
    
    
    
    
    38Notes payables to Vitro with fixed annual interest rate between 9% and 11%, maturing in 2012.
    
    
    374
    
    
    
    66Secured borrowing related to the flat glass businesses securitization transactions, guaranteed by trade
receivables, variable interest rate based on TIIE plus a 6.5% spread, maturing in 2010.
    
    
    298Payable in Euros:EURIBOR plus a margin ranging from 1.10% to1.25%, with different maturity dates up to 2014.
    
    
    57
    
    
    
    44Capital lease, floating interest rate based on capital leases and on EURIBOR, plus a margin ranging from
0.625% and 1.25%, with different maturity dates up to 2014.
    
    
    40
    
    
    
    37Fixed interest rate capital leases ranging from 0.84% to 3.84%, with different maturity dates up to 2010.
    
    
    
    
    
    
    2Capital lease, with fixed interest rate based on capital leases and on EURIBOR, plus a margin ranging of
0.62% with different maturity dates up to 2014.
    
    
    11
    
    
    
    2Payable in Colombian pesos:Unsecured debt floating interest rate based on fixed term deposits (DFT) plus a spread of 6%, principal
payable in several installments through 2013.
    
    
    13
    
    
    
    11Payable in Mexican pesos:Secured borrowing related to the flat glass businesses securitization transactions, guaranteed by trade
receivables, variable interest rate based on TIIE plus a 4% spread, maturing in 2014.
    
    
    
    
    
    
    300897
    
    
    
    584Less current maturities
    
    
    48
    
    
    
    48Ps.
    849
    
    
    Ps.
    536
 As of December 31, 2009, the interest rates of EURIBOR, TIIE, and DTF were 1.24%,
8.74%, and 4.11%, respectively.
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The schedule of contractual principal payments of long-term debt as of December 31, 2009
is as follows:
 Year
    
    Amount2011
    
    Ps.
    412012
    
    
    1042013
    
    
    342014
    
    
    3502015 and thereafter
    
    
    7Ps.
    536
 10.
    
    Other long-term liabilities
 As of December 31, 2008 and 2009, the balance in other long-term liabilities includes Ps.56
and Ps.58, of casualty insurance, respectively, as well Ps.140 Ps.139 of government loans to
its subsidiary in Spain, respectively.
 11.
    
    Employee benefits
 a.
    
    The Company has a defined benefit pension plan that covers all its personnel, which
consists of a lump sum payment or a monthly pension calculated, based on the aggregate of
a basic pension, an additional seniority pension and an additional pension for equal or
less earnings than the ceiling used for the Mexican Social Security Institute.
 The retirement ages are as follows:
 
    
    Normal.  Personnel that are 65 years old with 20 or more years of service.
    
    Advanced.  Personnel that are 60 years old with a minimum of 20 or more years of
service, reducing the pension by a percentage point each year before reaching 65
years of age.
    
    Early.  Personnel that are 50 years old with 10 or more years of service,
reducing the pension by a percentage according to the age at the moment of
retirement.
    
    Aggregate of 100.  With the approval of the Technical Committee, personnel whose
aggregate age and years of service is 100.
    
    Deferred.  Personnel who do not accept retirement upon becoming 65 years old
lose all the rights to receive a pension from the plan.
 This plan also provides seniority premium benefits, which consist of a lump sum payment
of 12 days wage for each year worked, calculated using the most recent salary, not to
exceed twice the legal minimum wage established by law, as well as severance payments,
which consists of a three month and twenty days wage payment for each year served. The
related liability and annual cost of such benefits are calculated by an independent
actuary on the basis of formulas defined in the plans using the projected unit credit
method.
 b.
    
    The present values of these obligations and the rates used for the calculations
are:
 December 31,2009
    
    
    2008Vested benefit obligation
    
    Ps.
    513
    
    
    Ps.
    573Nonvested benefit obligations
    
    
    142
    
    
    
    220Defined benefit obligation
    
    
    655
    
    
    
    793Plan assets at fair value
    
    
    (278
    )
    
    
    (315
    )Unfunded status
    
    
    377
    
    
    
    478Unrecognized items:Prior service costs and plan amendments
    
    
    (77
    )
    
    
    (33
    )Unrecognized transition obligation
    
    
    (24
    )
    
    
    (43
    )Unrecognized actuarial gains and losses
    
    
    (342
    )
    
    
    (477
    )Prepaid pension asset
    
    Ps.
    (66
    )
    
    Ps.
    (75
    )
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As of December 31, 2008 and 2009 the plan assets presented above, include 17.1 and 14.2
million Vitro shares, respectively.
 December 31,2008
    
    
    2009Assumptions:Discount rate
    
    
    10.25
    %
    
    
    9.50
    %Expected rate of return on plan assets
    
    
    12.25
    %
    
    
    10.50
    %Rate of compensation increase
    
    
    3.50
    %
    
    
    3.50
    %
 c.
    
    Net periodic cost consists of:
 Year ended December 31,2007
    
    
    2008
    
    
    2009Service cost
    
    Ps.
    46
    
    
    Ps.
    70
    
    
    Ps.
    30Interest cost
    
    
    31
    
    
    
    55
    
    
    
    60Amortization of unrecognized prior
service costs
    
    
    12
    
    
    
    23
    
    
    
    22Actuarial gains and losses
    
    
    16
    
    
    
    35
    
    
    
    6Effect of reduction and early liquidation
    
    
    
    
    
    
    (2
    )
    
    
    18Expected yield on plan assets
    
    
    (29
    )
    
    
    (55
    )
    
    
    (32
    )Net periodic cost
    
    Ps.
    76
    
    
    Ps.
    126
    
    
    Ps.
    104
 Certain unrecognized items as of December 31, 2007 are being amortized to results of
operations within a maximum period of 5 years or the employees remaining service life,
if less. Through December 31, 2007, these items were amortized to results of operations
based on the employees average remaining labor life. Starting 2008, unrecognized items
incurred from January 1, 2008 are amortized to results of operations based on the
employees average remaining service lives, which is between 10 and 16 years. This change
represented a charge to current earnings of Ps.13 and
Ps. 11 in 2008 and 2009, respectively.
 d.
    
    Changes in present value of the defined benefit obligation:
 Year ended December 31,2008
    
    
    2009Present value of the defined benefit obligation as of January 1
    
    Ps.
    673
    
    
    Ps.
    655Service cost
    
    
    70
    
    
    
    30Interest cost
    
    
    55
    
    
    
    60Benefits paid
    
    
    (85
    )
    
    
    (89
    )Actuarial (gain) loss
    
    
    (58
    )
    
    
    137Present value of the defined benefit obligation as of December
31
    
    Ps.
    655
    
    
    Ps.
    793
 e.
    
    Changes in fair value of plan assets:
 Year ended December 31,2008
    
    
    2009Fair value of plan assets as of January 1
    
    Ps.
    517
    
    
    Ps.
    278Expected return
    
    
    52
    
    
    
    32Actuarial losses
    
    
    (289
    )
    
    
    (30
    )Contributions made by the Company
    
    
    40
    
    
    
    117Benefits paid
    
    
    (42
    )
    
    
    (82
    )Fair value of plan assets as of December 31
    
    Ps.
    278
    
    
    Ps.
    315
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##### Table of Contents



f.
    
    Classification of plan assets as of December 31, 2009:
 Expected
    
    
    ActualYield
    
    
    YieldCapital instruments (Vitro A shares)
    
    
    13.00
    %
    
    
    3.00
    %Other
    
    
    8.67
    %
    
    
    4.42
    %
 The rate of return on the plan assets is determined using a composition of 37% of Vitros
shares and 63% in investments in securities.
 12.
    
    Commitments and contingencies
 a.
    
    In October 2000, several of Vimexicos subsidiaries and Affiliated Companies, which
have facilities throughout Monterrey, Mexico and the Mexico City area, entered into a
15-year energy purchase agreement for approximately 33 megawatts of electricity pear year
with Tractebel Energía de Monterrey, S. de R.L. de C.V.
 b.
    
    The Company has several non-cancelable operating lease agreements for the rent of
warehouses and equipment. Rental expense for the years ended December 31, 2007, 2008 and
2009 was Ps. 365, Ps. 364 and Ps. 367, respectively.
 Future minimum lease payments under these agreements are as follows:
 Year
    
    Amount2010
    
    Ps.
    3062011
    
    
    2732012
    
    
    2262013
    
    
    1912014
    
    
    1702015 and thereafter
    
    
    161
 c.
    
    On December 2006, Viméxico (formerly Vitro Plan) concluded at an extraordinary
shareholders meeting to approve the merger of Vitro Plan into Viméxico, which was a
creditor of Vitro Plan. As a result of the merger, all assets, rights, liabilities and
obligations of Vitro Plan were absorbed by Viméxico. Prior to the merger, Vitro Plan was
a direct 65%-owned subsidiary of Vitro and Pilkington Group LTD (Pilkington) owned the
remaining 35%. As a result of the merger, Viméxico became a 91.8%-owned subsidiary of
Vitro and Pilkington the owner of the remaining 8.2%.
 Although the merger became entirely effective once all the respective authorizations were
obtained and having prepared all the respective acts, publications and registrations,
Pilkington, who voted against such approval, began a legal procedure in January 2007
against the merger. In February 2008 in first instance, in June 2008 in second instance,
and finally in February 2009, the protection requested by Pilkington was denied. The
Company was notified that the opposing action exercised by Pilkington was declared
unprecedented in a final and unappealable sentence with respect to the resolutions
approved by the majority at the extraordinary general stockholders meeting in December
2006. Thus, the foregoing resolutions were confirmed as valid and mandatory for all
stockholders, including those dissenting.
 However, in the first week of December 2007, the Company was notified of a new complaint
filed by Pilkington, claiming the annulment of such extraordinary general
stockholders meeting. This position goes against the claims sustained in the first trial
and was filed after Pilkington specifically desisted from this action after the first
trial. Accordingly, Vitro also expects to obtain a favorable resolution from this claim.
In this proceeding all evidence and allegations were submitted and the Company is
awaiting the final ruling.
 d.
    
    As of December 31, 2009, Vitro has not met the obligations stipulated in its debt
issuance agreements and has received payment acceleration notices from a group of its
bondholders. Vitro continues its productive operations, and is working on negotiations
with its financial creditors to restructure its debt (See Note 21a). The Company serves
as a guarantor of such debt.
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13.
    
    Foreign currency operations
 As of December 31, 2009, the foreign currency denominated assets and liabilities of the
Companys Mexican subsidiaries and Mexican Affiliated Companies consist of the following:
 Millions of
    
    
    MexicanUS dollars
    
    
    pesosMonetary assets
    
    US$
    36
    
    
    Ps.
    469Inventories
    
    
    6
    
    
    
    85Fixed assets
    
    
    11
    
    
    
    146Monetary liabilities
    
    
    20
    
    
    
    264
 Foreign currency operations of the Vimexicos Mexican subsidiaries and Mexican Affiliated
Companies for the year ended December 31, 2009, consisted of the following:
 Millions of
    
    
    MexicanUS dollars
    
    
    pesosExports
    
    US$
    136
    
    
    Ps.
    1,831Imports
    
    
    69
    
    
    
    932Interest expense, net
    
    
    3
    
    
    
    48
 The condensed financial information of the principal Vimexicos foreign subsidiaries and
foreign Affiliated Companies as of December 31, 2009, consisted of the following:
 CentralAmerica andUnited
    
    
    SouthStates
    
    
    America
    
    
    EuropeNet sales
    
    Ps.
    4,544
    
    
    Ps.
    488
    
    
    Ps.
    1,506Operating (loss) income
    
    
    (339
    )
    
    
    63
    
    
    
    (181
    )Total assets
    
    
    1,492
    
    
    
    524
    
    
    
    2,493Total liabilities
    
    
    813
    
    
    
    156
    
    
    
    1,314Capital expenditures
    
    
    76
    
    
    
    4
    
    
    
    10
 The exchange rates of the Mexican peso against the US dollar and the Euro, used for purposes
of the Companys consolidated and combined financial statements at the following dates were:
 US dollar
    
    
    EuroDecember 31, 2007
    
    Ps.
    10.8662
    
    
    Ps.
    15.9526December 31, 2008
    
    
    13.8325
    
    
    
    19.2534December 31, 2009
    
    
    13.0587
    
    
    
    19.5789
 On February 24, 2011, the exchange
rate was Ps. 12.1900 per US dollar and Ps. 16.7455 per
Euro.
 14.
    
    Stockholders equity
 a.
    
    As of December 31, 2009, the fixed portion of the Companys capital stock is
represented by 1,504,021,600 series A and the variable portion by 3,396,582,622,960
series B, ordinary, nominative, fully paid and issued common shares, without par value
as follows:
 Serie A shares
    
    
    Serie B shares
    
    
    Total sharesViméxico, S.A. de C.V. and Subsidiaries
    
    
    1,503,510,000
    
    
    
    
    
    
    
    1,503,510,000VVP Holdings Corporation and subsidiaries
    
    
    1,000
    
    
    
    
    
    
    
    1,000Vitro Vidrio y Cristal, S.A. de C.V. and
subsidiaries
    
    
    50,000
    
    
    
    3,204,385,523,705
    
    
    
    3,204,385,573,705Vitro Automotriz, S.A. de C.V. and
subsidiaries
    
    
    50,000
    
    
    
    191,986,078,704
    
    
    
    191,986,128,704Vitro Cristalglass, S.L. and subsidiaries
    
    
    360,600
    
    
    
    60,100
    
    
    
    420,700Vitrocar, S.A. de C.V.
    
    
    50,000
    
    
    
    210,960,451
    
    
    
    211,010,451Total
    
    
    1,504,021,600
    
    
    
    3,396,582,622,960
    
    
    
    3,398,086,644,560
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As of December 31, 2008, the capital stock is represented by that of Viméxico only
and is represented by 1,503,510,000 series A ordinary, nominative, fully paid and issued
common shares, without par value
 b.
    
    Retained earnings include the statutory legal reserve. Mexican General Corporate
Law requires that at least 5% of net income of the year be transferred to the legal
reserve until the reserve equals 20% of capital stock at par value (historical pesos).
The legal reserve may be capitalized but may not be distributed unless the entity is
dissolved. The legal reserve must be replenished if it is reduced for any reason. As of
December 31, 2008 and 2009, the legal reserve, in historical pesos was Ps. 10.
 c.
    
    Stockholders equity, except restated paid-in capital and tax retained earnings,
will be subject to income tax at the rate in effect when a dividend is distributed. Any
tax paid on such distribution may be credited against annual and estimated income taxes
of the year in which the tax on dividends is paid and the following two fiscal years.
 At December 31, 2009, the majority interest stockholders equity tax account
corresponding to the contributed capital account and the net consolidated and combined
tax income account was Ps. 2,233 and Ps. 2,157, respectively.
 d.
    
    On January 15, 2008, Vitro VyC, Vitrocar and VAU acquired the intellectual property
of an affiliated company for $1,835, which is presented as a capital distribution of
$1,321, net of deferred taxes.
 e.
    
    Noncontrolling interest in subsidiaries of Viméxico and Affiliated Companies
financial statements consists of the following:
 December 31,2008
    
    
    2009Capital stock
    
    Ps.
    157
    
    
    Ps.
    157Paid-in capital
    
    
    1,825
    
    
    
    1,825Translation effects of foreign Affiliated
Companies
    
    
    877
    
    
    
    638Retained earnings
    
    
    952
    
    
    
    1,144Net income
    
    
    206
    
    
    
    277Ps.
    4,017
    
    
    Ps.
    4,041
 15.
    
    Other expenses, net
 The following represents a summary of the Companys other expenses (income), net for the
periods presented:
 Year ended December 31,2007
    
    
    2008
    
    
    2009Restructuring charges
    
    Ps.
    9
    
    
    Ps.
    32
    
    
    Ps.
    184Impairment of long-lived assets
    
    
    91
    
    
    
    196
    
    
    
    209(Gain) loss from sale of long-lived
assets
    
    
    (55
    )
    
    
    (92
    )
    
    
    55Statutory employee profit sharing
    
    
    24
    
    
    
    4
    
    
    
    3Other
    
    
    22
    
    
    
    1
    
    
    
    (29
    )Ps.
    91
    
    
    Ps.
    141
    
    
    Ps.
    422
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16.
    
    Tax loss carryforwards
 As of December 31, 2009, tax loss carryforwards consist of the following:
 Expiration Year
    
    Amount2010
    
    Ps.
    502011
    
    
    192012
    
    
    282013
    
    
    142014
    
    
    2692015
    
    
    42016
    
    
    112017
    
    
    282018
    
    
    1,1252019
    
    
    3,000Ps.
    4,548
 17.
    
    Income and asset taxes
 a.
    
    In accordance with the Mexican tax law, the Company in 2008 and 2009 is subject to
ISR and IETU. Until 2007, the Company was subject to ISR and IMPAC.
 ISR.- The Company pays ISR. The ISR rate is 28% for 2007, 2008 and 2009, and, based on
changes to the ISR Law on December 7, 2009, will be 30% for 2010 to 2012, 29% for 2013
and 28% for 2014 and subsequent years.
 The foreign Affiliated Companies calculate their ISR based on the individual results of
each subsidiary pursuant to the specific tax regimes in each country.
 IETU.- On January 1, 2008, the IETU went into effect. IETU applies to the sale of goods,
the provision of independent services and the granting of use or enjoyment of goods,
according to the terms of the IETU law, less certain authorized deductions. Revenues, as
well as deductions and certain tax credits, are determined based on cash flows generated
beginning January 1, 2008. The IETU law establishes that the IETU rate will be 16.5% in
2008, 17.0% in 2009, and 17.5% in 2010 and subsequently. Similarly, the IMPAC Law was
repealed upon enactment of the IETU Law, however, under certain circumstances, IMPAC paid
in the ten years prior to the year in which ISR is paid, may be refunded, according to
the terms of the law.
 Based on its financial projections and according to INIF 8, Effects of the Business Flat
Tax, the Company determined that it will essentially pay ISR. Therefore, it only
recognizes deferred ISR.
 IMPAC.- In 2007, IMPAC was calculated by applying 1.25% to the value of the assets of the
year, without deducting any debt amounts.
 b.
    
    The income and asset tax expense (benefit) included in the Companys results are:
 Year ended December 31,2007
    
    
    2008
    
    
    2009Current
    
    Ps.
    208
    
    
    Ps.
    57
    
    
    Ps.
    33Deferred
    
    
    (104
    )
    
    
    (782
    )
    
    
    (204
    )104
    
    
    
    (725
    )
    
    
    (171
    )Asset tax
    
    
    48
    
    
    
    (10
    )Ps.
    152
    
    
    Ps.
    (735
    )
    
    Ps.
    (171
    )
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c.
    
    Net deferred tax assets presented in the consolidated and combined balance sheets consist
of the following:
 December 31,2008
    
    
    2009Assets:Allowance for doubtful accounts
    
    Ps.
    59
    
    
    Ps.
    21Reserve for employee benefits
    
    
    96
    
    
    
    63Tax loss carryforwards
    
    
    630
    
    
    
    1,273Asset tax credit carryforwards
    
    
    1Derivate financial instruments
    
    
    276
    
    
    
    284Intangible asset
    
    
    542
    
    
    
    548Other
    
    
    119
    
    
    
    441,723
    
    
    
    2,233Valuation allowance
    
    
    (88
    )
    
    
    (551
    )1,635
    
    
    
    1,682Liabilities:Fixed assets
    
    
    317
    
    
    
    166Net deferred tax asset
    
    Ps.
    1,318
    
    
    Ps.
    1,516
 d.
    
    Following is a reconciliation between the Companys effective income tax rate and
the statutory rate:
 Year ended December 31,2007
    
    
    2008
    
    
    2009%
    
    
    %
    
    
    %Statutory income tax rate
    
    
    28
    
    
    
    28
    
    
    
    28Asset tax presented as income tax
    
    
    21Intangible asset
    
    
    17
    
    
    
    7Foreign Affiliated Companies
    
    
    (17
    )
    
    
    19
    
    
    
    (18
    )Investment in subsidiaries
    
    
    4Difference between tax and accounting basis for
monetary gain
    
    
    
    
    
    
    (8
    )
    
    
    (4
    )Tax restatement of fixed assets and deferred charges
    
    
    
    
    
    
    7
    
    
    
    3Other
    
    
    8
    
    
    
    1
    
    
    
    1Effective income tax rate
    
    
    61
    
    
    
    54
    
    
    
    10
 e.
    
    The deferred income tax effect, reduced from the movements in stockholders equity
for insufficiency in restated stockholders equity, the equity effect of the additional
labor liability as well as form the exchange loss capitalized in the translation effect
of foreign companies is presented as follows:
 Year ended December 31,2007
    
    
    2008
    
    
    2009Shortfall in restatement of capital
    
    Ps.
    98Minimum labor liability
    
    
    (24
    )Translation effects of foreign
Affiliated Companies
    
    
    
    
    
    Ps.
    16
    
    
    Ps.
    1Ps.
    74
    
    
    Ps.
    16
    
    
    Ps.
    1
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18.
    
    Business dispositions and acquisitions
 a.
    
    Acquisition of 50% of the shares of Vidrio y Cristal del Noroeste, S.A. de C.V.
(formerly Vitro AFG) In July 2007, Viméxico exercised its option to acquire the
remaining 50% of the outstanding shares of Vitro AFG from its joint venture partner AFG
Industries, a subsidiary of Asahi Glass Co. Limited (a Japanese company) for a purchase
price of US$6 million. In accordance with Bulletin B-7, the Company recognized an
impairment charge of Ps. 91 related to the termination of the joint venture with AFG
Industries.
 With the closing of this transaction, Viméxico terminated the joint venture and became
the wholly-owner of this entity, located in Mexicali, Baja California, Mexico, whose
primary operations include the manufacturing, processing and distribution of flat glass,
thereby increasing Vitros available production capacity by 78,000 tons on an annual
basis.
 b.
    
    Acquisition of 55% of the shares of PVA In August 2007, Vitro VyC acquired 55%
of the outstanding shares of PVA, a company dedicated to the installation of value added
crystal products for Ps. 110. As a result of the preliminary purchase price allocation,
the Company recorded goodwill of Ps. 85 in 2007. During the first half of 2008, pursuant
to the guidelines in NIF B-7 Business Acquisitions, the items comprising such goodwill
were analyzed further and Ps. 61 was reclassified as an intangible asset.
 c.
    
    Purchase of 40% of Vitro Cristalglass In July 2008, Viméxico was notified by its
joint venture partner of its right to exercise the put option related to the sale of its
40% interest in Vitro Cristalglass, S. L. (Vitro Cristalglass). The option was officially
exercised in August 2008 and beginning in September 2008, Vitro Cristalglass is 100%
consolidated. The purchase price agreed upon was 27.4 million euros (approximately Ps.
527). The difference between the purchase price and the book value resulted in a charge
of Ps. 60, recorded in majority stockholders equity.
 In January 2009 a revised payment schedule was agreed upon with the previous partner, by
extending it through the 2009-2010 periods, and that the purchase of the partnership
interest in Vitro Cristalglass would be made through a capital reduction.
 Sale of 60% of Vitro Cristalglass In December 2009, 60% of the shares of Vitro
Cristalglass were sold to a subsidiary of Vitro FIC Regiomontano. The price was Ps. 398
and the difference between the cost and the book value resulted in a credit of Ps. 26
recorded in stockholders equity.
 d.
    
    Sale of 100% of VVP Holdings In January 2009, 100% of the shares of V.V.P.
Holdings Corporation were sold to Vitro. The price was Ps. 448 and the difference between
the cost and the book value resulted in a charge of Ps. 179 recorded in stockholders
equity.
 e.
    
    Sale of 100% of Vitro Car In December 2009, 100% of the shares of Vitrocar were
sold to FIC Regiomontano. The price was Ps. 1,293 and the difference between the cost and
the book value resulted in a charge of Ps. 29 recorded in stockholders equity.
 f.
    
    Diluted equity in Vitro Vidrio and Cristal Pursuant to a unanimous resolution of
Vitro VyCs stockholders, on December 15, 2009, variable capital was increased by Ps.
1,509 and Series B-2 shares by 3,201,509,234,159 by Vitro; therefore Viméxicos
shareholding decreased. The difference between the cost and book value resulted in a
charge of Ps. 144 recorded in stockholders equity.
 g.
    
    Diluted equity in Vitro Automotriz Pursuant to a unanimous resolution of VAUs
stockholders, on December 15, 2009, variable capital was increased by Ps.133 and Series
B-3 shares by133,489,105 by Vitro; therefore Viméxicos shareholding decreased. The
difference between the cost and book value resulted in a charge of Ps. 550 recorded in
stockholders equity.
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19.
    
    Transactions and balances with related parties
 a.
    
    The main transactions and balances with related parties not shown separately in
the consolidated and combined financial statements are as follows:
 2007
    
    
    2008
    
    
    2009Trade receivables
    
    Ps.
    5
    
    
    Ps.
    9
    
    
    Ps.
    11Trade payables
    
    
    33
    
    
    
    6
    
    
    
    77Net sales
    
    
    14
    
    
    
    42
    
    
    
    76Cost of sales
    
    
    95
    
    
    
    121
    
    
    
    550Operating expenses
    
    
    200
    
    
    
    270
    
    
    
    244Interest income
    
    
    
    
    
    
    31
    
    
    
    214(Gain) loss on derivative financial
instruments
    
    
    (3
    )
    
    
    617
    
    
    
    136Exchange (gain) loss
    
    
    (6
    )
    
    
    74
    
    
    
    (53
    )Interest expense
    
    
    325
    
    
    
    394
    
    
    
    590Other income, net
    
    
    80
    
    
    
    95
    
    
    
    (4
    )
 b.
    
    Loans receivable from affiliates
 As of December 31, 2008 and 2009, short-term loans denominated in Mexican pesos amounted
to Ps. 672 and Ps. 2,043, respectively. As of December 31, 2009 short-term loans
denominated in U.S. dollars amounted to Ps. 426, in Swiss francs (CHF) amounted to Ps.
141 and in euros amounted to Ps. 392. During 2009, the Companys interest rate for
short-term loans denominated in Mexican pesos fluctuated between 12.25% and 24.50%; in
U.S. dollars was 9.95%; in CHF was 2.50% and in Euros was 2.73%.
 c.
    
    Notes payable to affiliates
 As of December 31, 2008 and 2009, short-term loans denominated in Mexican pesos amounted
to Ps. 2,471 and Ps. 3,449, respectively and those denominated in U.S. dollars as of
December 31, 2009 amounted to Ps.83. During 2009, the Companys interest rate for
short-term loans denominated in U.S. dollars fluctuated between 9.95% and 19.90% and in
Mexican Pesos was 12.50%.
 20.
    
    New accounting principles
 As part of its efforts to converge Mexican standards with international standards, during
2009, the Mexican Board for Research and Development of Financial Information Standards
(CINIF) issued the following NIFs and Interpretations of Financial Reporting Standards (INIF),
applicable to profitable entities, which became effective on January 1, 2010:
 NIF C-1, Cash and cash equivalents, requires restricted cash and cash equivalents to be
included within the cash and cash equivalents caption, as opposed to Bulletin C-1, which
required presentation under separate captions; NIF C-1 replaces the caption on-demand
temporary investments with the caption on-demand available investments clarifying that
this type of investment has a maturity of up to three months from its acquisition date.
The impact of adopting this new standard in 2010 was a reclassification to cash and cash
equivalents of Ps. 43 applied retrospectively to the 2009 combined balance sheet.
 Improvements to NIFs for 2010  The main improvements generating accounting changes that
must be recognized retroactively are:
 NIF B-1, Accounting changes and correction of errors, requires further disclosures in
case the Company applies a particular Standard for the first time.
 NIF B-2, Statement of cash flows, requires recognition of the effects of fluctuations in
exchange rates used for translating cash in foreign currencies, and changes in fair value
of cash in the form of precious metal coins, and other cash items, at fair value, in a
specific line item.
 NIF B-7, Business acquisitions, requires recognition of intangible assets or provisions
because the acquired business has a contract whose terms and conditions are favorable or
unfavorable with respect to market, only when the acquired business is the lessee in an
operating lease. This accounting change should be recognized retroactively and not go
further than January 1, 2009.
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NIF C-7, Investments in associated companies and other permanent investments, modifies
how the effects derived from increases in equity percentages in an associated company are
determined. It also establishes that the effects due to an increase or decrease in equity
percentages in associated companies should be recognized under equity in income (loss) of
associated companies, rather than in the non-ordinary line item within the statement of
income.
 NIF C-13, Related parties, requires that, if the direct or ultimate controlling entity of
the reporting entity does not issue financial statements available for public use, the
reporting entity should disclose the name of the closest, direct / indirect, controlling
entity that issues financial statements available for public use.
 Other than as described above, the adoption of these new financial reporting standards was not
material to the Companys consolidated and combined financial position, results of operations
or cash flows.
 21.
    
    Subsequent events
 a)
    
    Debt
     b)
    
    Derivative financial instruments
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c)
    
    Status or the Restructuring process
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d)
    
    Natural disasters
 Earthquake in Mexicali temporarily affected the Companys facility
  Temporary suspension of operations at manufacturing facilities in García, Nuevo León
  
    
    two of the Companys four automotive glass manufacturing facilities (both located
in García) were affected by this event; however, because of current inventory levels
and measures taken to restore production in the succeeding days, we were able to
minimize the impact on its original equipment manufacturer (OEM) clients and auto
glass replacement clients;
 
    
    two of the Companys three float glass manufacturing facilities (both located in
García) were also affected by this event; one of the affected facilities resumed
normal operations initially in the last week of July 2010; however, its operations
were temporarily suspended due to stability issues and it resumed full operations
again in the last week of August 2010; the other affected facility
resumed operations in September 2010; its float glass facility in Mexicali, which is
currently operating at 100% capacity, temporarily supplied glass to its OEM glass
processing plants.
    22.
    
    Authorization of financial statements issuance
 On February 24, 2011, the issuance of the consolidated and combined financial statements was
authorized by:
 Lic. David González Morales 
Chief Executive Officer
    
    Ing. Jorge Mario Guzmán Guzmán
Chief Financial Officer
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23.
    
    Differences between MFRS and U.S generally accepted accounting principles.
 The Companys consolidated and combined financial statements are prepared in accordance with MFRS
which differ in certain significant respects from accounting principles generally accepted in the
United States of America (U.S. GAAP).
 The United States Financial Accounting Standards Board (FASB) released the FASB Accounting
Standards Codification, or Codification for short, on January 15, 2008 and it became effective in
2009. At that time all previous U.S. GAAP reference sources became obsolete. The Codification
organizes several U.S. GAAP pronouncements under approximately 90 accounting topic areas. The
objective of this project was to arrive at a single source of authoritative U.S. accounting and
reporting standards, other than guidance issued by the Securities and Exchange Commission of the
United States of America (SEC). Included in Notes 23 and 24 are references to certain U.S. GAAP
Codifications (ASC) that were adopted in 2009 and certain ASCs that have yet to be adopted by
the Company.
 Prior to 2008, the MFRS consolidated financial statements include the effects of inflation as
provided for under Bulletin B-10, Recognition of the Effects of Inflation in Financial
Information, whereas financial statements prepared under U.S. GAAP are presented on a historical
cost basis. The application of Bulletin B-10 represented a comprehensive measure of the effects
of price level changes in the inflationary Mexican economy and, as such, was considered a more
meaningful presentation than historical cost-based financial reporting for both Mexican and U.S.
accounting purposes.
 Beginning on January 1, 2008 as disclosed in note 3 a), in accordance with new NIF B-10, Effects
of Inflation, the Company discontinued the recognition of inflation in its financial statements
under MFRS as the cumulative inflation for the preceding three years was less than 26%. This
resulted in the elimination of certain reconciling items between MFRS and U.S. GAAP in 2008 and 2009.
Notwithstanding the prior comments, the following reconciliation to U.S. GAAP for the year ended
December 31, 2007 does not include the reversal of the adjustments required under
Bulletin B-10, as permitted by the rules and regulations of the Securities and Exchange
Commission (the SEC).
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The other differences between MFRS and U.S. GAAP and the effect on consolidated net loss and
consolidated stockholders equity are presented below:
 Year ended December 31,2007
    
    
    2008
    
    
    2009Reconciliation of Net Income (loss)Net income (loss) reported under MFRS
    
    Ps.
    96
    
    
    Ps.
    (618
    )
    
    Ps.
    (1,624
    )U.S. GAAP adjustments:Deferred income taxes (see b)
    
    
    (37
    )
    
    
    55
    
    
    
    (1,488
    )Income position result on deferred income taxes
(see c)
    
    
    17
    
    
    
    Amortization of capitalized interest (see d)
    
    
    (4
    )
    
    
    (5
    )
    
    
    (4
    )Goodwill (see e)
    
    
    
    
    
    
    (43
    )Effect of applying Bulletin B-10 (see f)
    
    
    (21
    )
    
    
    18Effect of ASC 715 previously SFAS No. 158 (see h)
    
    
    
    
    
    
    
    
    
    
    (7
    )Fair value of financial instruments (see g)
    
    
    
    
    
    
    17
    
    
    
    (2
    )Employee retirement obligations (see h)
    
    
    (7
    )
    
    
    11
    
    
    
    16Purchase of Visteons capital investment (see i)
    
    
    5
    
    
    
    5
    
    
    
    9Impairment of longlived assets (see k)
    
    
    (10
    )
    
    
    (45
    )
    
    Ps.
    15Total U.S. GAAP adjustments
    
    
    (57
    )
    
    
    13
    
    
    
    (1,461
    )Net income (loss) under U.S. GAAP
    
    Ps.
    39
    
    
    Ps.
    (605
    )
    
    Ps.
    (3,085
    )
 Year ended December 31,2008
    
    
    2009Reconciliation of stockholders equity (Deficit)Total stockholders equity reported under MFRS
    
    Ps.
    5,394
    
    
    Ps.
    6,444US GAAP adjustments:Deferred income taxes (see b)
    
    
    (415
    )
    
    
    (1,973
    )Capitalization of interest (see d)
    
    
    42
    
    
    
    42Accumulated amortization of capitalized interest (see d)
    
    
    (27
    )
    
    
    (31
    )Goodwill (see e)
    
    
    81
    
    
    
    81Fair value financial instrument (see g)
    
    
    17
    
    
    
    15Effect of ASC 715 (previously SFAS No. 158 (see h)
    
    
    (414
    )
    
    
    (535
    )Employee retirement obligations (see h)
    
    
    (28
    )
    
    
    (12
    )Purchase of Visteons capital investment (see i)
    
    
    (61
    )
    
    
    (52
    )Purchase of remaining 40% interest in Vitro Cristal glass (see j)
    
    
    60
    
    
    
    60Impairment of longlived assets (see k)
    
    
    345
    
    
    
    361Total U.S. GAAP adjustments
    
    
    (400
    )
    
    
    (2,044
    )Total stockholders equity under U.S. GAAP
    
    Ps.
    4,994
    
    
    Ps.
    4,400
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a)
    
    Noncontrolling interest
 In January 2009, the Company adopted ASC 810-10 Consolidation (previously SFAS No. 160,
Noncontrolling Interests in Consolidated Financial Statements, an amendment of ARB No. 51)
which establishes the accounting and reporting standards for the noncontrolling interest in
a subsidiary and the deconsolidation of a subsidiary, and also amends certain consolidation
guidance for consistency with revised standards regarding business combinations. The
accounting provisions of ASC 810-10 (previously SFAS No. 160) must be applied prospectively
starting at the beginning of the fiscal year in which the provisions are initially adopted,
while the presentation and disclosure requirements must be applied retrospectively, to
provide comparability in the financial statements. ASC 810-10 (previously SFAS No. 160)
was effective for fiscal years, and interim periods within those fiscal years, beginning on
or after December 15, 2008. As a result of adopting this standard, the Company
reclassified the noncontrolling interest to stockholders equity in the year of adoption
and in prior periods for purposes of comparability, which resulted in eliminating this
difference in the reconciliation of between MFRS and U.S. GAAP of Ps. 4,041.
 The effects of the U.S. GAAP differences as described in this
note reflect the amounts assigned to the noncontrolling interest.
 b)
    
    Deferred income taxes
 Under MFRS as required by Bulletin D-4,
Accounting for Income Tax, Tax on Assets and
Employee Statutory Profit Sharing, income taxes are charged to results as they are
incurred and the Company recognizes deferred income tax assets and liabilities for the
future consequences of temporary differences between the financial statement carrying
amounts of assets and liabilities and their respective income tax bases, measured using
enacted rates. The effects of changes in the statutory rates are accounted for in the
period that includes the enactment date. Deferred income tax assets are also recognized
for the estimated future effects of tax loss carryforwards and asset tax credit
carryforwards. Deferred tax assets are recognized only when it is highly probable that
sufficient future taxable income will be generated to recover such deferred tax assets.
 Under U.S. GAAP, as required by ASC 740
Income Taxes(previously SFAS No. 109, Accounting
for Income Taxes), the Company recognizes deferred income tax assets and liabilities for
the future consequences of temporary differences between the financial statement carrying
amounts of assets and liabilities and their respective income tax bases, measured using
enacted rates. The effects of changes in the statutory rates are accounted for in the
period that includes the enactment date. Deferred income tax assets are also recognized
for the estimated future effects of tax loss carryforwards and asset tax credit
carryforwards.
 The ultimate realization of deferred tax assets is dependent upon the generation of future
taxable income during the periods in which those temporary differences become deductible.
Management considers the scheduled reversal of deferred tax liabilities, projected future
taxable income, and tax planning strategies in making this assessment. Based upon the level
of historical taxable income, projections of future taxable income over the periods in
which the deferred tax assets are deductible and tax planning strategies that would be
taken to prevent an operating loss or tax credit carryforward from expiring unused,
management believes it is more likely than not that the Company will realize the benefits
of these deductible differences, net of the existing valuation allowance at December 31,
2009.
 For U.S. GAAP purposes the Company recognizes deferred taxes each period for the changes in
the taxable portions of its distributable stockholders equity. The Companys policy is to
compare the deferred tax balance that would be required if all of the
stockholders equity
were distributed. This amount is compared to the total deferred
tax balance recorded prior to this adjustment. The difference between the amount recorded
and the amount calculated from the stockholders equity taxable accounts is recorded as an
adjustment to deferred taxes as of the balance sheet date.
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Through December 31, 2007, for U.S. GAAP purposes the Company recognized a deferred tax
asset for the temporary difference that exists between the book basis and the tax basis of
its foreign subsidiaries that legally own Vitros intellectual property at the applicable
tax rate in the foreign jurisdiction based on the expected reversal date. In January 2008,
the intellectual property was sold to some of Vitros Mexican subsidiaries and the impact
of repatriating such asset to Mexico was reflected in the Companys U. S. GAAP
reconciliation.
  U.S. GAAP differences to the extent taxable are reflected in the U.S. GAAP deferred tax
balances.
 .It is the Companys policy to classify interest and penalties related to income tax
related matters within income tax expense and other expenses, respectively. The Companys
significant operations are all located in Mexico, the United States of America and Spain.
The tax laws in these jurisdictions permit the respective tax authorities to examine
previously filed tax returns for the following years:
 Mexico
    
    U.S.
    
    Spain2005-2009
    
    2005-2009
    
    2006-2009
 c)
    
    Monetary position result on deferred income tax
 The monetary position result impacting deferred income tax (represents the only adjustments
that affect monetory assets and liabilities) is determined by (i) applying the annual
inflation factor to the net monetary position of the U.S. GAAP adjustments at the beginning
of the period, plus (ii) the monetary position effect of such adjustments during the
period, determined in accordance with the weighted average inflation factor.
 As discussed in the introduction to this note as well as in note 3 a), beginning January 1,
2008 with the issuance of NIF B-10, the Companys MFRS financial statements no longer
include inflationary effects, for which reason, this reconciling item is no longer
applicable.
 d)
    
    Capitalization of interest
 Under MFRS beginning January 1, 2007, and thrush December 31, 2007, the Company adopted NIF
D-6, Capitalization of Comprehensive Financing Result, accordingly the capitalization of
the comprehensive financing result (interest expense, foreign exchange results and monetary
position result) generated by borrowings obtained to finance investment directly
attributable to the acquisition of qualifying assets is mandatory. Prior to the adoption of
NIF D-6, the Company did not capitalize the comprehensive financing result as it was
optional.
 In accordance with ASC 835-20
Capitalization of interest(previously SFAS No. 34,
Capitalization of Interest Cost), if the comprehensive financing
result is incurred during the construction of qualifying assets, capitalization is required
as part of the cost of such assets. Accordingly, until December 31, 2006 a reconciling item
for the capitalization of a portion of the comprehensive financing result was included in
the U.S. GAAP reconciliation. The amortization expense and related accumulated amortization
of such items generates a difference compared to MFRS.
 Beginning on January 1, 2007, and through December 31, 2007 a reconciling item was generated related to foreign exchange
results and the monetary position result, which are capitalized under MFRS and not for U.S.
GAAP. In 2008, a reconciling item
was generated for borrowings denominated in US dollars, related to the foreign exchange
results, which is capitalized under MFRS and not for U.S. GAAP.
  F-139




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e)
    
    Goodwill
 As mentioned in note 3 k), under MFRS, until December 31, 2004 goodwill represented the
excess of cost over book value of subsidiaries as of the date of acquisition and was
restated using the NCPI and amortized using the straight-line method over 20 years.
Beginning in January 1, 2005, goodwill represents the excess of cost over fair value of
subsidiaries as of the date of acquisition. Through December 31, 2007, goodwill was
restated using the NCPI.
 In accordance with ASC 350
Intangibles-Goodwill and Other (previously SFAS No. 142,
Goodwill and Other Intangibles Assets), beginning in 2002 goodwill and indefinite-lived
assets are also no longer subject to amortization, but rather are subject at least once a
year to impairment tests.
 As of December 31, 2007, the difference between MFRS and U.S. GAAP as it relates to this
item was due to the accumulated amortization of goodwill recorded under MFRS that had been
reversed in the reconciliation of stockholders equity for purposes of U.S. GAAP. In 2008,
as disclosed below, the Company recognized a goodwill impairment charge under U.S. GAAP and
as a result this difference was eliminated with a charge to the U.S. GAAP statement of
operations.
 In 2008, the Company recorded an impairment of goodwill in its U.S. reporting unit. The
impairment recorded in accordance with MFRS was less than what was recorded in accordance
with U.S. GAAP as such goodwill had previously been amortized as discussed in the first
paragraph of this item. As a result, an adjustment to the reconciliation of net income
(loss) has been included in order to properly reflect the impairment loss recorded for
purposes of U.S. GAAP.
 f)
    
    Effect of applying Bulletin B-10
 As discussed in note 3 g), through December 31, 2007 under MFRS Bulletin B-10 allows the
restatement of the value of machinery and equipment purchased in a foreign country using
the consumer price index of the country of origin and the period-end exchange rate. For
U.S. GAAP purposes, such restatement is based on the NCPI.
 As discussed in the introduction to this note as well as note 3 a), beginning January 1,
2008 with the issuance of NIF B-10, the Companys MFRS financial statements no longer
include inflationary effects, for which reason, this reconciling item is no longer
applicable. Further, even during inflationary periods, the alternate methodology described
above has been eliminated by NIF B-10.
 g)
    
    Derivative financial instruments
 The Company determined that the accounting for derivative financial instruments is the same
for MFRS and U.S. GAAP as they relate to their consolidated financial statements as of and
for the year ended December 31, 2007. Beginning January, 2008 the Company adopted the
provisions of ASC 820 Fair Value Measurements and disclosures (previously SFAS No. 157),
which impacted the fair value of its derivative financial instruments and is reflected as a
difference in the accompanying reconciliation to US GAAP.
  F-140




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h)
    
    Employee retirement obligationsThe Company maintains defined benefit pension plans for all of its subsidiaries and
provides for seniority premiums and severance payments (severance indemnities) for all of
its Mexican subsidiaries. For its MFRS consolidated and combined financial statements, the Company
applies Bulletin D-3, Labor Obligations. The Company and combined records the pension
cost determined by actuarial computations, as described in notes 3 m) and 11. Significant
assumptions (weighted-average rates) used in determining net periodic pension cost and the
Companys related pension obligations for 2008 and 2009 are also described in note 11.
 Severance indemnities  Under MFRS NIF D-3 requires the recognition of a severance
indemnity liability calculated based on actuarial computations. Similar recognition
criteria under U.S. GAAP are established in ASC 712 Nonretirement Postemployment Benefits
(previously SFAS No. 112, Employers Accounting for Postemployment Benefits), which
requires that a liability for certain termination benefits provided under an ongoing
benefit arrangement such as these statutorily mandated severance indemnities, be recognized
when the likelihood of future settlement is probable and the liability can be reasonably
estimated. MFRS allows for the Company to amortize the transition obligation related to the
adoption of revised Bulletin D-3 over the expected service life of the employees. However,
U.S. GAAP required the Company to recognize such effect upon initial adoption, which
results in a difference in the amount recorded under the two accounting principles.
 The Company adopted ASC 715 Compensation-Retirement Benefits (previously SFAS No. 158,
Employers Accounting for Defined Benefit Pension and Other Postretirement Plans, an
amendment of ASC 715 Compensation-Retirement Benefits (previously FASB Statements No. 87,
88, 106 and 132(R)), in its December 31, 2006 consolidated financial statements. This
statement requires companies to (1) fully recognize, as an asset or liability, the over
funded or under funded status of defined pension and other postretirement benefit plans;
(2) recognize changes in the funded status through other comprehensive income in the year
in which the changes occur; and (3) provide enhanced disclosures.
 The Company has prepared a study of pension costs under U.S. GAAP based on actuarial
calculations using the same assumptions applied under MFRS (see note 3 m). Prior to the
adoption of ASC 715 Compensation-Retirement Benefits (previously SFAS No. 158,
Employers Accounting for Defined Benefit Pension and Other Postretirement Plans), there
was no difference in the liabilities for pension plans and seniority premiums between MFRS
and U.S. GAAP.
 As discussed in note 3 a), NIF D-3, Employee Benefits, became effective January 1, 2008.
NIF D-3 eliminates the recognition of the additional liability because its determination
does not incorporate a salary increase, incorporates the career salary concept, and the
amortization period of most unrecognized items (those not related to retirement benefits)
is reduced to five years, with the option to fully amortize them against current earnings
of 2008 under other income and expense. The Company chose to amortize such items over a
period of five years. Additionally, the beginning balance of actuarial gains and losses
from termination benefits was recorded against results of 2008 for purposes of MFRS, in
other income and expense. For U.S. GAAP purposes unamortized items are recognized over the
estimated service period of the Companys employees.
 i)
    
    Purchase of Visteons capital investment
 In connection with the termination of the joint venture agreement between Viméxico and
Visteon, under MFRS as established in Bulletin B-7 Business Acquisitions, the Company
recognized the difference between the price paid and the book value of Ps. 70 as a credit
in the controlling stockholders equity. Under U.S. GAAP, in accordance with ASC 805
Business Combinations (previously SFAS No. 141, Business Combinations), the excess of
fair value over cost of Ps. 90 was allocated as a pro rata reduction of the acquired
assets.
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j)
    
    Purchase of remaining 40% interest in Vitro Cristalglass
 In connection with Vimexicos purchase of the additional 40% interest in Vitro Cristalglass
discussed in note 18 c ), under Mexican standard NIF Bulletin B-7, Business Acquisitions,
this is considered to be a transaction between shareholders that does not impact the net
assets of the Company, and the payment in excess of the book value of the shares acquired
is recorded in stockholders equity as a reduction of additional paid-in capital. Under
U.S. GAAP, ASC 805 Business Combinations (previously SFAS No. 141, Business
Combinations), purchases of noncontrolling interest represent a step acquisition that
must be accounted for under the purchase method, whereby the purchase price is allocated to
the proportionate fair value of assets and liabilities acquired. The difference between the
fair value and the price paid for the 40% of Vitro Cristalglass equity is presented as part
of investment in Vitro Cristalglass shares in the consolidated balance sheet under U.S.
GAAP. The Company recognized Ps. 60 goodwill as part of the preliminary purchase price
allocation.
 k)
    
    Impairment of long-lived assets
 For U.S. GAAP purposes, in accordance with ASC 360-10-05 Impairment or disposal of
long-lived assets (previously SFAS No. 144 Impairment of long-lived assets), long-lived
assets are reviewed for impairment whenever events or changes in circumstances indicate
that the carrying amount of an asset may not be recoverable. The carrying amount of an
asset is not recoverable when the estimated future undiscounted cash flows expected to
result from the use of the asset are less than the carrying value of the asset. Impairment
is recorded when the carrying amount of the asset exceeds its fair value. Impairment
charges and asset write-downs are presented in selling, general and administrative expenses
in operating income in our U.S. GAAP consolidated financial statements.
 For MFRS purposes, in accordance with Bulletin C-15, the Company reviews the carrying
amounts of long-lived assets in use when an impairment indicator suggests that such amounts
might not be recoverable, considering the greater of the present value of future net cash
flows or the net sales price upon disposal. Impairment is recorded when the carrying amount
of the asset exceeds the greater of the amounts mentioned above. Impairment charges and
asset write-downs are presented in other expenses in our MFRS consolidated financial
statements.
 In 2005, 2006 and 2009, for MFRS purposes, while performing its annual impairment test
using its best estimates based on reasonable and supportable assumptions and projections,
the Company recorded an impairment charge of Ps. 111, Ps. 334 and Ps. 60, respectively
within its Flat Glass reportable segment as the carrying amount of the long-lived assets
exceeded the present value of their future discounted cash flows. For U.S. GAAP purposes no
impairment charge was recorded as the assets were considered to be recoverable given that
the estimated undiscounted cash flows expected to result from the use of the assets were
greater than the carrying value of the asset.
 In 2005 for U.S. GAAP purposes, based on fair value appraisals received the Company
recorded an impairment charge of Ps. 45 for land and buildings located at its corporate
offices classified as available for sale in accordance with SFAS No. 144. This charge is
recorded in operating income for U.S. GAAP purposes. Under MFRS, the assets did not meet
the definition of held for sale as required by Bulletin C-15 as such assets were still in
use by the Company at the time. The discounted cash flow model utilized by the Company did
not result in an impairment charge for MFRS purposes. Additionally during 2006, the
Company sold one of its buildings located at its corporate headquarters recognizing a loss
on sale of Ps. 138 under MFRS and Ps. 93 under U.S. GAAP.
 As a result of the transactions described above, differences result between MFRS and U.S.
GAAP due to the depreciation expense on fixed assets being recorded each year.
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Impairment charges are recorded in operating income for U.S. GAAP purposes and in other
income and expenses under MFRS.
 l)
    
    Securitization of trade receivables
 Under MFRS beginning January 1, 2008 the Company adopted NIF B-8, (Note 3 a), which
establishes that special purpose entities, over which control is exercised, should be
consolidated. The guidance in NIF B-8 differs from the current requirements of US GAAP,
that qualifying special purposes entities (QSPEs) not be consolidated if they meet
certain specific requirements.
 As a result of adopting NIF B-8, the special purposes entities that hold accounts
receivable related to the Companys securitization transactions are now included within the
consolidated financial statements (see note 9) for purposes of MFRS. For US GAAP purposes
as they meet the definition of QSPEs they are not consolidated, which is consistent with
the presentation of prior years. The disclosures related to such transactions are as
follows:
 
    
    Securitization of Viméxico trade receivables.- On August 22, 2005, Viméxico, closed a
private issuance of promissory notes in the United States for US$21.5 million, at an
interest rate of 6.5%. Viméxico entered into an agreement to sell all of its trade
accounts receivable, on a revolving basis, to a trust (the Trust, a qualifying special
purpose entity) that was formed prior to the execution of this agreement for the sole
purpose of buying and selling accounts receivable and is designed to be bankruptcy remote.
The interest payments and eventual principal reimbursement will be provided from the
collection of the receivables originated by four subsidiaries of Viméxico and sold to the
Trust, which are: Distribuidora Nacional de Vidrio, S.A. de C.V., Vitro Flotado Cubiertas,
S.A. de C.V., Vitro Automotriz, S.A. de C.V. and Vitro Vidrio y Cristal, S.A. de C.V. At
December 31, 2008 and 2009, the gross receivables sold to the Trust totaled Ps. 577 and
Ps. 531, respectively, and are reflected as a reduction of trade accounts receivable. The
estimated fair value of the retained undivided interests in securitized receivables at
December 31, 2008 and 2009 was Ps. 261 and Ps. 231, respectively. The Company has
completed a sensitivity analysis on the estimated fair value of the retained undivided
interests with the objective of measuring the change in value associated with changes in
individual key variables. A 10% increase in expected credit losses and allowance, to
0.66%, would decrease the year-end valuation by approximately Ps. 14, and 20% increase in
expected credit losses and allowances, to 3.94%, would decrease the year-end valuation by
approximately Ps. 27. Similarly, 10% or 20% adverse fluctuations in either average
receivable collection times or expected short-term commercial paper rates would not
significantly affect the recorded fair value of the retained undivided interests. This
sensitivity analysis is hypothetical and should be used with caution.
 Proceeds received by the Company from the revolving securitizations aggregated to Ps. 2,592
and US$152 million, and Ps. 2,089 and US$122 million for the years ended December 31,
2008 and 2009, respectively, and are included in cash flows from operating activities.
Delinquencies on securitized receivables, representing amounts over 60 days past due,
totaled Ps. 67 and US$3 million, and Ps. 25 and US$0.566 million at December 31, 2008 and
2009, respectively. Viméxico continues to service the securitized receivables, receiving
compensation approximately equal to its cost of such servicing plus a reasonable profit
margin; accordingly, no servicing assets or liabilities are recorded. For the years ended
December 31, 2008 and 2009, the Company received servicing fees totaling Ps. 12 and Ps. 11,
respectively.
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Vitro America, Inc. (Vitro America).- Effective January 30, 2009, the Companys accounts
receivable securitization agreement was terminated. At termination, the gross receivables
sold totaled US$72.4 million with estimated delinquencies of US$13.6 million, representing
amounts over 60 days past due. The estimated fair value of the
retained undivided interests in those securitized receivables was US$33.4 million, at
January 30, 2009. As a result of the termination, approximately US$26.6 million, of trade
receivables and related debt obligations reverted to the Company. In February 2009, US$15
million of the debt obligations were repaid with capital contributions from American Asset
Holding Corp. (AAH). The remaining US$11.6 million was financed through an amendment of
the Companys existing asset based Bank Loan Agreement.
 Prior to the agreement termination, Vitro America sold all of its accounts receivable, on a
revolving basis, to VVP Funding a wholly owned subsidiary of Vitro America. VVP Funding, a
special purpose entity, was formed prior to the execution of the agreement for the sole
purpose of buying and selling accounts receivable and was designed to be bankruptcy remote.
Also, Vitro America and VVP Funding entered into an agreement with an unrelated financial
institution whereby VVP Funding, on a revolving basis and subject to the maintenance of
certain financial and receivables-based ratios, sold an undivided percentage ownership in
all eligible accounts receivable, as defined, for consideration composed of cash and Vitro
America retained an interests in securitized receivables. The maximum selling amount
during the years ended December 31, 2009 and 2008 was US$50 million. The agreement expired
annually each April, subject to annual renewal approval by the financial institution. The
transfer of undivided ownership interest from VVP Funding to the unrelated major financial
institution for cash consideration was accounted for as a sale of receivables in accordance
with US GAAP.
 The gross receivables sold totaled US$74 million at December 31, 2008, and are reflected
as a reduction of trade accounts receivable. The estimated fair value of the retained
undivided interests in securitized receivables at December 31, 2008 totaled US$33.6
million, and was determined based on expected credit losses and allowance of 3%, expected
average receivable collection time of 52 days, and expected short-term commercial paper
rates of 2.3% per annum.
 Proceeds received by the Company from the revolving securitizations aggregated to US$463
and US$32.5 million for the years ended December 31, 2008 and 2009, respectively, and are
included in cash flows from operating activities in the accompanying consolidated
statements of cash flows. Securitization fees totaled US$2.1 and US$0.2 million for
the years ended December 31, 2008 and 2009, respectively, and are included in general and
administrative expenses in the accompanying amounts over 60 days past due, totaled US$15
million at December 31, 2008, with credit losses totaling US$2.6 million for the year
ended December 31, 2008. VVP continues to service the securitized receivables under the
agreement, receiving compensation that is approximately equal to its cost of such servicing
plus a reasonable profit margin; accordingly, no servicing assets or liabilities were
recorded. For the years ended December 31, 2008 and 2009, the Company received servicing
fees totaling $0.6 and $0.1 million, respectively.
 m)
    
    Reclassifications
 Gain or loss on sale of assets  The gain or loss on sale of assets that do not meet the
definition of a component of a business as described in SFAS No. 144 are included in
operating income in the Companys U.S. GAAP consolidated financial statements. Gains or
losses on sales of assets not presented as discontinued operations under MFRS are included
in other expenses in the Companys consolidated MFRS financial statements (see note 15).
 Classification of workers profit sharing  Under MFRS, statutory employee profit sharing
is presented under other income and expenses. In the Companys U.S. GAAP statements of
operations, workers profit sharing expense is classified as an operating expense.
 Restructuring charges  During 2008 and 2009, the Company restructured certain operating
units and its corporate and administrative functions. For MFRS purposes the corresponding
costs met the definition of a restructuring charge and were included in other expenses in
the Companys consolidated financial statements, but for U.S.
GAAP purposes the Company applied ASC 712 previously  (SFAS No. 112), Employers Accounting for
Postemployment Benefits. These costs are included in general and administrative expenses
in the accompanying U.S. GAAP consolidated statements of operations.
  F-144




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Refinancing  In August, 2010 the Company refinanced the 44.8 million Euro credit line for Vitro
Cristalglass, S.L., extending the term for three years from the agreement date. As a
result, the Company reclassified from short term to long term debt an amount of 9.4 million
Euros.
 n)
    
    Supplemental U.S. GAAP Cash Flow Information
 The following table summarizes the cash flow items as required under SFAS No. 95,
Statement of Cash Flows, provided by (used in) operating, financing and investing
activities for the years ended December 31, 2006, 2007 and 2008, giving effect to the U.S.
GAAP adjustments, excluding the effects of inflation required by Bulletin B-10 and Bulletin
B-15 for periods through December 31, 2007. The following information is presented, in
millions of pesos, on a historical peso basis and it is not presented in pesos of constant
purchasing power:
 Years ended December 31,2007
    
    
    2008
    
    
    2009Net cash provided by (used in) operating activities
    
    Ps.
    549
    
    
    Ps.
    186
    
    
    Ps.
    497Net cash provided by (used in) financing activities
    
    
    (7
    )
    
    
    909
    
    
    
    1,663Net cash (used in) provided by investing activities
    
    
    (505
    )
    
    
    (977
    )
    
    
    (1,862
    )
 Net cash flow from operating activities reflects cash payments for interest and income
taxes as follows:
 Years ended December 31,2007
    
    
    2008
    
    
    2009Interest paid
    
    Ps.
    373
    
    
    Ps.
    645
    
    
    Ps.
    741Income taxes paid
    
    
    204
    
    
    
    10
    
    
    
    29
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o)
    
    Recently Issued Accounting StandardsThe following accounting standards have been issued under U.S. GAAP, the application of
which is required as indicated below.
 In January 2009, the Company adopted FASB ASC 810-10 (previously SFAS No. 160) which establishes the
accounting and reporting standards for the noncontrolling interest in a subsidiary and the
deconsolidation of a subsidiary, and also amends certain consolidation guidance for
consistency with revised standards regarding business combinations. The accounting
provisions of FASB ASC 810-10 (SFAS No. 160) must be applied prospectively as of the
beginning of the fiscal year in which the provisions are initially adopted, while the
presentation and disclosure requirements must be applied retrospectively, to provide
comparability in the financial statements. FASB ASC 810-10 (SFAS No. 160) was effective
for fiscal years, and interim periods within those fiscal years, beginning on or after
December 15, 2008. As a result of adopting this standard, the Company reclassified the
noncontrolling interest to stockholders equity in the year of adoption and in prior
periods for purposes of comparability (see Note 23a).
 In January 2009, the Company adopted FASB ASC 805-10 (SFAS No. 141(R)), which, among other
changes, requires an acquirer in a business combination to (a) recognize assets acquired,
liabilities assumed, and any noncontrolling interest in the acquiree at fair value as of
the acquisition date, and (b) expense all acquisition-related costs. FASB ASC 805-10 (SFAS
No. 141(R)), also amends FASB ASC 740-10 (SFAS No. 109) to require that any reductions to
an acquired entitys valuation allowances on deferred taxes and acquired tax contingencies
that occur after the measurement period be recorded as a component of income tax expense.
FASB ASC 805-10 (SFAS No. 141(R)) must be applied prospectively to all business
combinations for which the acquisition date occurs during fiscal years beginning on or
after December 15, 2008, with the exception to the amendments to ASC 740-10 (SFAS No. 109),
which will also be applied to business combinations with acquisition dates prior to the
effective date of this standard. The adoption of this guidance did not have an impact on
the Companys consolidated financial statements and related disclosures and any future
impact will be dependent on any future acquisitions.
 In July 2009, the Company adopted FASB ASC 855-10 (SFAS 165, Subsequent Events). FASB ASC
855-10 (SFAS 165) establishes accounting and reporting standards for events that occur
after the balance sheet date but before financial statements are issued or are available to
be issued. In addition, FASB ASC 855-10 (SFAS 165) requires the disclosure of the date
through which an entity has evaluated subsequent events and the basis for selecting that
date, that is, whether that date represents the date the financial statements were issued
or were available to be issued. FASB ASC 855-10 (SFAS 165) was effective for fiscal years
and interim periods ending after June 15, 2009.
 
    
    The Company has evaluated events subsequent to December 31, 2009 to
assess the need for potential recognition or disclosure in the accompanying
consolidated and combined financial statements. Such events were evaluated through February 24,
2011, the date these consolidated and combined financial statements were available to
be issued and included the transactions disclosed in Note 21:
 On June 12, 2009, the FASB issued ASC 860-10 (SFAS No. 166, Accounting for Transfer of
Financial Assets  an amendment of FASB Statement No. 140), which eliminates the concept
of a qualifying special purpose entity
(QSPE) and modifies the derecognition provisions of a previously issued accounting
standard. FASB ASC 860-10 (SFAS No. 166) also required additional disclosures which focus
on the transferors continuing involvement with the transferred assets and the related
risks retained. FASB ASC 860-10 (SFAS No. 166) is effective for financial asset transfers
occurring after the beginning of an entitys first fiscal year that begins after November
15, 2009. Early adoption is prohibited. The Company expects the adoption of this standard
to impact its consolidated financial statements as it relates to its securitization
transactions due to the elimination of the concept of a qualifying special purposes entity.
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On June 12, 2009, the FASB issued ASC 810-10 (SFAS No. 167, Amendments to FASB
Interpretation No. 46 (R)), which amends the consolidation guidance that applies to
variable interest entities. The new guidance requires an entity to carefully reconsider its
previous consolidation conclusions, including (1) whether an entity is a variable interest
entity (VIE), (2) whether the enterprise is the VIEs primary beneficiary, and (3) what
type of financial statement disclosures are required. FASB ASC 810-10 (SFAS No. 167) is
effective as of the beginning of the first fiscal year that begins after November 15, 2009.
The amendments to the consolidation guidance affect all entities and enterprises currently
within the scope of FASB ASC 810-10 (SFAS No. 167), as well as qualifying special-purpose
entities that are currently outside the scope of FASB ASC 810-10 (FIN 46(R)). Early
adoption is prohibited. The Company expects the adoption of this standard to impact its
consolidated financial statements as it relates to its securitization transactions.
 In October 2009, the FASB issued Accounting Standards Update (ASU) 2009-13, which contains
new guidance on accounting for revenue arrangements with multiple deliverables. When vendor
specific objective evidence or third party evidence for deliverables in an arrangement
cannot be determined, a best estimate of the selling price is required to separate
deliverables and allocate arrangement consideration using the relative selling price
method. The new guidance includes new disclosure requirements on how the application of the
relative selling price method affects the timing and amount of revenue recognition. The
guidance in the ASU will be effective prospectively for revenue arrangements entered into
or materially modified in fiscal years beginning after June 15, 2010. Early adoption is
permitted. The adoption of this standard is not expected to impact the Companys
consolidated financial position, results of operations or cash flows.
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23.
    
    Guarantor and non-guarantor financial information
     
    
    Viméxico (the holding company),
 
    
    Viméxicos combined 100%-owned guarantors, representing the 15 subsidiary guarantors
that remain 100%-owned by Viméxico,
 
    
    Vimexicos 100%-owned guarantors which were sold to Vitro during 2009, representing (a)
VVP Holdings and its five subsidiaries, 100%-owned subsidiary guarantors which were sold
from Viméxico to Vitro in January 2009 and (b) Vitrocar, a 100%-owned subsidiary guarantor
which was sold from Viméxico to Vitro in December 2009,
 
    
    Vitro Vidrio y Cristal, a 100%-owned subsidiary of Viméxico which was sold from
Vimexico to Vitro in December 2009,
 
    
    Vitro Automotriz, a 100%-owned subsidiary of Viméxico which was sold from Vimexico to
Vitro in December 2009, and
 
    
    Viméxicos combined non-guarantors.
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a)
    
    Supplemental condensed consolidating balance sheets presented in accordance with MFRS
 Combined
    
    
    Combined
    
    
    AdjustmentsWholly-Owned
    
    
    Non-
    
    
    and
    
    
    ViméxicoAs of December 31, 2008
    
    Viméxico
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedCash, trade receivables and other current
assets
    
    Ps.
    2,376
    
    
    Ps.
    4,108
    
    
    Ps.
    4,743
    
    
    Ps.
    (7,044
    )
    
    Ps.
    4,183Inventories, net
    
    
    
    
    
    
    1,702
    
    
    
    481
    
    
    
    16
    
    
    
    2,199Current assets
    
    
    2,376
    
    
    
    5,810
    
    
    
    5,224
    
    
    
    (7,028
    )
    
    
    6,382Property plant and equipment, net
    
    
    
    
    
    
    4,983
    
    
    
    830
    
    
    
    
    
    
    
    5,813Deferred taxes
    
    
    18
    
    
    
    1,244
    
    
    
    53
    
    
    
    3
    
    
    
    1,318Other assets
    
    
    821
    
    
    
    1,221
    
    
    
    852
    
    
    
    (1,450
    )
    
    
    1,444Long-term assets
    
    
    839
    
    
    
    7,448
    
    
    
    1,735
    
    
    
    (1,447
    )
    
    
    8,575Total assets
    
    Ps.
    3,215
    
    
    Ps.
    13,258
    
    
    Ps.
    6,959
    
    
    Ps.
    (8,475
    )
    
    Ps.
    14,957Short-term borrowings, current
maturities of long-term debt and derivative
financial instruments
    
    Ps.
    45
    
    
    Ps.
    3,146
    
    
    Ps.
    840
    
    
    Ps.
    (269
    )
    
    Ps.
    3,762Current liabilities
    
    
    960
    
    
    
    7,171
    
    
    
    
    
    
    
    (5,342
    )
    
    
    2,789Accrued expenses and other current
liabilities
    
    
    833
    
    
    
    1,922
    
    
    
    410
    
    
    
    (1,254
    )
    
    
    1,911Current liabilities
    
    
    1,838
    
    
    
    12,239
    
    
    
    1,250
    
    
    
    (6,865
    )
    
    
    8,462Long-term liabilities
    
    
    
    
    
    
    1,240
    
    
    
    472
    
    
    
    (611
    )
    
    
    1,101Total liabilities
    
    
    1,838
    
    
    
    13,479
    
    
    
    1,722
    
    
    
    (7,476
    )
    
    
    9,563Total controlling interest
    
    
    1,377
    
    
    
    (221
    )
    
    
    5,237
    
    
    
    (5,016
    )
    
    
    1,377Noncontrolling interest in consolidated
subsidiaries
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,017
    
    
    
    4,017Total stockholders equity
    
    
    1,377
    
    
    
    (221
    )
    
    
    5,237
    
    
    
    (999
    )
    
    
    5,394Total liabilities and stockholders equity
    
    Ps.
    3,215
    
    
    Ps.
    13,258
    
    
    Ps.
    6,959
    
    
    Ps.
    (8,475
    )
    
    Ps.
    14,957
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Combined
    
    
    Wholly-Owned
    
    
    
    
    
    
    
    
    
    
    CombinedWholly-Owned
    
    
    Guarantors Sold to
    
    
    Vitro Vidrio
    
    
    Vitro
    
    
    Non-
    
    
    Adjustments and
    
    
    ViméxicoAs of December 31, 2009
    
    Viméxico
    
    
    Guarantors
    
    
    Vitro
    
    
    y Cristal
    
    
    Automotriz
    
    
    Guarantors
    
    
    Eliminations
    
    
    CombinedCash, trade receivables and other current assets
    
    Ps.
    3,577
    
    
    Ps.
    3,826
    
    
    Ps.
    768
    
    
    Ps.
    4,168
    
    
    Ps.
    1,738
    
    
    Ps.
    4,793
    
    
    Ps.
    (12,750
    )
    
    Ps.
    6,120Inventories, net
    
    
    
    
    
    
    232
    
    
    
    306
    
    
    
    390
    
    
    
    294
    
    
    
    329
    
    
    
    (4
    )
    
    
    1,547Current assets
    
    
    3,577
    
    
    
    4,058
    
    
    
    1,074
    
    
    
    4,558
    
    
    
    2,032
    
    
    
    5,122
    
    
    
    (12,754
    )
    
    
    7,667Property plant and equipment, net
    
    
    
    
    
    
    3,325
    
    
    
    377
    
    
    
    14
    
    
    
    606
    
    
    
    730
    
    
    
    178
    
    
    
    5,230Deferred taxes
    
    
    1
    
    
    
    7
    
    
    
    90
    
    
    
    830
    
    
    
    499
    
    
    
    195
    
    
    
    (106
    )
    
    
    1,516Other assets
    
    
    2,021
    
    
    
    604
    
    
    
    161
    
    
    
    215
    
    
    
    174
    
    
    
    806
    
    
    
    (2,666
    )
    
    
    1,315Long-term assets
    
    
    2,022
    
    
    
    3,936
    
    
    
    628
    
    
    
    1,059
    
    
    
    1,279
    
    
    
    1,731
    
    
    
    (2,594
    )
    
    
    8,061Total assets
    
    Ps.
    5,599
    
    
    Ps.
    7,994
    
    
    Ps.
    1,702
    
    
    Ps.
    5,617
    
    
    Ps.
    3,311
    
    
    Ps.
    6,853
    
    
    Ps.
    (15,348
    )
    
    Ps.
    15,728Short-term borrowings, current maturities of
long-term debt and derivative financial
instruments
    
    Ps.
    
    
    
    Ps.
    132
    
    
    Ps.
    173
    
    
    Ps.
    804
    
    
    Ps.
    269
    
    
    Ps.
    517
    
    
    Ps.
    24
    
    
    Ps.
    1,919Current liabilitiesAccrued expenses and other current liabilities
    
    
    5,972
    
    
    
    5,574
    
    
    
    955
    
    
    
    3,167
    
    
    
    2,266
    
    
    
    919
    
    
    
    (12,282
    )
    
    
    6,571Current liabilities
    
    
    5,972
    
    
    
    5,706
    
    
    
    1,128
    
    
    
    3,971
    
    
    
    2,535
    
    
    
    1,436
    
    
    
    (12,258
    )
    
    
    8,490Long-term liabilities
    
    
    
    
    
    
    352
    
    
    
    295
    
    
    
    115
    
    
    
    181
    
    
    
    907
    
    
    
    (1,056
    )
    
    
    794Total liabilities
    
    
    5,972
    
    
    
    6,058
    
    
    
    1,423
    
    
    
    4,086
    
    
    
    2,716
    
    
    
    2,343
    
    
    
    (13,314
    )
    
    
    9.284Total controlling interest
    
    
    (373
    )
    
    
    1,936
    
    
    
    279
    
    
    
    1,531
    
    
    
    595
    
    
    
    4,510
    
    
    
    (6,075
    )
    
    
    2,403Noncontrolling interest in consolidated
subsidiaries
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,041
    
    
    
    4,041Total stockholders equity
    
    
    (373
    )
    
    
    1,936
    
    
    
    279
    
    
    
    1,531
    
    
    
    595
    
    
    
    4,510
    
    
    
    (2,034
    )
    
    
    6,444Total liabilities and stockholders equity
    
    Ps.
    5,599
    
    
    Ps.
    7,994
    
    
    Ps.
    1,702
    
    
    Ps.
    5,617
    
    
    Ps.
    3,311
    
    
    Ps.
    6,853
    
    
    Ps.
    (15,348
    )
    
    Ps.
    15,728
  F-150




---



##### Table of Contents



b)
    
    Supplemental condensed consolidating statements of operations presented in accordance
with MFRS
 CombinedWholly-
    
    
    Combined
    
    
    AdjustmentsOwned
    
    
    Non-
    
    
    and
    
    
    ViméxicoFor the year ended December 31, 2007
    
    Viméxico
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedNet sales and equity in earnings
of subsidiaries
    
    Ps.
    164
    
    
    Ps.
    11,123
    
    
    Ps.
    2,962
    
    
    Ps.
    (644
    )
    
    Ps.
    13,605Cost of sales
    
    
    
    
    
    
    7,957
    
    
    
    1,946
    
    
    
    (325
    )
    
    
    9,578Selling, general and
administrative expenses
    
    
    6
    
    
    
    2,724
    
    
    
    545
    
    
    
    (30
    )
    
    
    3,245Total financing cost
    
    
    187
    
    
    
    431
    
    
    
    91
    
    
    
    (266
    )
    
    
    443Other (income) expenses, net
    
    
    1
    
    
    
    74
    
    
    
    17
    
    
    
    (1
    )
    
    
    91Income and asset tax expense
(benefit)
    
    
    56
    
    
    
    23
    
    
    
    73
    
    
    
    
    
    
    
    152Net (loss) income for the year
    
    Ps.
    (86
    )
    
    Ps.
    (86
    )
    
    Ps.
    290
    
    
    Ps.
    (22
    )
    
    Ps.
    96
 CombinedWholly-
    
    
    Combined
    
    
    AdjustmentsOwned
    
    
    Non-
    
    
    and
    
    
    ViméxicoFor the year ended December 31, 2008
    
    Viméxico
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedNet sales and equity in earnings
of subsidiaries
    
    Ps.
    (574
    )
    
    Ps.
    10,933
    
    
    Ps.
    2,451
    
    
    Ps.
    420
    
    
    Ps.
    13,230Cost of sales
    
    
    
    
    
    
    7,983
    
    
    
    1,833
    
    
    
    (113
    )
    
    
    9,703Selling, general and
administrative expenses
    
    
    9
    
    
    
    2,883
    
    
    
    492
    
    
    
    (43
    )
    
    
    3,341Total financing cost
    
    
    221
    
    
    
    2,463
    
    
    
    (141
    )
    
    
    (1,145
    )
    
    
    1,398Other expenses (income), net
    
    
    
    
    
    
    67
    
    
    
    (700
    )
    
    
    774
    
    
    
    141Income tax expense (benefit)
    
    
    20
    
    
    
    (752
    )
    
    
    (4
    )
    
    
    1
    
    
    
    (735
    )Net (loss) income for the year
    
    Ps.
    (824
    )
    
    Ps.
    (1,711
    )
    
    Ps.
    971
    
    
    Ps.
    946
    
    
    Ps.
    (618
    )
  F-151




---



##### Table of Contents



Combined
    
    
    Wholly-Owned
    
    
    
    
    
    
    
    
    
    
    CombinedWholly-Owned
    
    
    Guarantors Sold
    
    
    Vitro Vidrio
    
    
    Vitro
    
    
    Non-
    
    
    Adjustments and
    
    
    ViméxicoFor the year ended December 31, 2009
    
    Viméxico
    
    
    Guarantors
    
    
    to Vitro
    
    
    y Cristal
    
    
    Automotriz
    
    
    Guarantors
    
    
    Eliminations
    
    
    CombinedNet sales and equity in
earnings of subsidiaries
    
    Ps.
    (933
    )
    
    Ps.
    3,082
    
    
    Ps.
    4,912
    
    
    Ps.
    2,500
    
    
    Ps.
    2,242
    
    
    Ps.
    1,894
    
    
    Ps.
    (2,244
    )
    
    Ps.
    11,453Cost of sales
    
    
    
    
    
    
    2,464
    
    
    
    3,468
    
    
    
    2,174
    
    
    
    2,063
    
    
    
    1,613
    
    
    
    (2,943
    )
    
    
    8,839Selling, general and
administrative expenses
    
    
    22
    
    
    
    428
    
    
    
    1,795
    
    
    
    426
    
    
    
    294
    
    
    
    465
    
    
    
    (225
    )
    
    
    3,205Total financing cost
    
    
    (33
    )
    
    
    326
    
    
    
    83
    
    
    
    461
    
    
    
    (84
    )
    
    
    (148
    )
    
    
    177
    
    
    
    782Other expenses (income), net
    
    
    
    
    
    
    150
    
    
    
    133
    
    
    
    40
    
    
    
    46
    
    
    
    60
    
    
    
    (7
    )
    
    
    422Income tax expense (benefit)
    
    
    16
    
    
    
    (59
    )
    
    
    134
    
    
    
    (153
    )
    
    
    (24
    )
    
    
    (86
    )
    
    
    1
    
    
    
    (171
    )Net (loss) income for the year
    
    Ps.
    (938
    )
    
    Ps.
    (227
    )
    
    Ps.
    (701
    )
    
    Ps.
    (448
    )
    
    Ps.
    (53
    )
    
    Ps.
    (10
    )
    
    Ps.
    753
    
    
    Ps.
    (1,624
    )
  F-152




---



##### Table of Contents



c)
    
    Supplemental condensed consolidating statement of changes in financial position
presented in accordance with MFRS
 CombinedWholly-
    
    
    Combined
    
    
    AdjustmentsOwned
    
    
    Non-
    
    
    And
    
    
    ViméxicoFor the year ended December 31, 2007
    
    Viméxico
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedOperating Activities:Net (loss) income
    
    Ps.
    (86
    )
    
    Ps.
    (86
    )
    
    Ps.
    290
    
    
    Ps.
    (22
    )
    
    Ps.
    96Depreciation and amortization
    
    
    2
    
    
    
    374
    
    
    
    104
    
    
    
    
    
    
    
    480Provision for employee retirement obligations
    
    
    
    
    
    
    45
    
    
    
    12
    
    
    
    
    
    
    
    57Amortization of debt issuance costs
    
    
    
    
    
    
    4
    
    
    
    
    
    
    
    
    
    
    
    4Impairment of long-lived assets
    
    
    
    
    
    
    
    
    
    
    91
    
    
    
    
    
    
    
    91Loss (gain) from sale of long-lived assets
    
    
    
    
    
    
    (55
    )
    
    
    
    
    
    
    
    
    
    
    (55
    )Derivative financial instruments
    
    
    
    
    
    
    27
    
    
    
    9
    
    
    
    (7
    )
    
    
    29Deferred taxes
    
    
    21
    
    
    
    (122
    )
    
    
    (3
    )
    
    
    
    
    
    
    (104
    )Other non-cash activities
    
    
    102
    
    
    
    (106
    )
    
    
    
    
    
    
    24
    
    
    
    20(increase) decrease in trade receivables
    
    
    2
    
    
    
    (132
    )
    
    
    (188
    )
    
    
    155
    
    
    
    (163
    )Decrease in inventories
    
    
    
    
    
    
    138
    
    
    
    (157
    )
    
    
    
    
    
    
    (19
    )(Decrease) increase in trade payables
    
    
    
    
    
    
    96
    
    
    
    186
    
    
    
    (59
    )
    
    
    223Change in other current assets and liabilities
    
    
    12
    
    
    
    235
    
    
    
    (62
    )
    
    
    (80
    )
    
    
    105Employee retirement obligations
    
    
    
    
    
    
    (100
    )
    
    
    (1
    )
    
    
    
    
    
    
    (101
    )Net resources generated by operating activities
    
    
    53
    
    
    
    318
    
    
    
    281
    
    
    
    11
    
    
    
    663Financing Activities:Bank loans, net
    
    
    
    
    
    
    (344
    )
    
    
    (12
    )
    
    
    
    
    
    
    (356
    )Debt issuance cost
    
    
    
    
    
    
    (7
    )
    
    
    (2
    )
    
    
    
    
    
    
    (9
    )Dividends paid to noncontrolling interest
    
    
    
    
    
    
    
    
    
    
    (67
    )
    
    
    16
    
    
    
    (51
    )Other financing activities
    
    
    (1,265
    )
    
    
    403
    
    
    
    (54
    )
    
    
    1,177
    
    
    
    261Net resources (used in) generated by financing
activities
    
    
    (1,265
    )
    
    
    52
    
    
    
    (135
    )
    
    
    1,193
    
    
    
    (155
    )Investing Activities:Investments in land, buildings, machinery and
equipment
    
    
    
    
    
    
    (216
    )
    
    
    (108
    )
    
    
    
    
    
    
    (324
    )Proceeds from sale of land, machinery and
equipment
    
    
    
    
    
    
    131
    
    
    
    
    
    
    
    
    
    
    
    131Restricted cash
    
    
    
    
    
    
    55
    
    
    
    (9
    )
    
    
    
    
    
    
    46Investment in subsidiaries
    
    
    (67
    )
    
    
    (114
    )
    
    
    
    
    
    
    
    
    
    
    (181
    )Deferred charges
    
    
    
    
    
    
    (175
    )
    
    
    (31
    )
    
    
    
    
    
    
    (206
    )Other investing activities
    
    
    1,279
    
    
    
    (37
    )
    
    
    11
    
    
    
    (1,204
    )
    
    
    49Net resources generated by (used in) investing
activities
    
    
    1,212
    
    
    
    (356
    )
    
    
    (137
    )
    
    
    (1,204
    )
    
    
    (485
    )Net increase (decrease) in cash and cash
equivalents
    
    
    
    
    
    
    24
    
    
    
    (1
    )
    
    
    
    
    
    
    23Balance at beginning of year
    
    
    
    
    
    
    123
    
    
    
    47
    
    
    
    
    
    
    
    170Balance at end of year
    
    Ps.
    
    
    
    Ps.
    147
    
    
    Ps.
    46
    
    
    Ps.
    
    
    
    Ps.
    193
  F-153




---



##### Table of Contents



d)
    
    Supplemental condensed consolidating statements of cash flows presented in accordance with
MFRS
 CombinedWholly-
    
    
    Combined
    
    
    AdjustmentsOwned
    
    
    Non-
    
    
    and
    
    
    ViméxicoFor the year ended December 31, 2008
    
    Viméxico
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedOPERATING ACTIVITIES:Loss (income) before income taxes
    
    Ps.
    (804
    )
    
    
    (2,462
    )
    
    Ps.
    967
    
    
    Ps.
    946
    
    
    Ps.
    (1,353
    )Items related to investing and financing activities:Depreciation and amortization
    
    
    2
    
    
    
    418
    
    
    
    68
    
    
    
    
    
    
    
    488Gain from sale of long-lived assets
    
    
    
    
    
    
    102
    
    
    
    
    
    
    
    (194
    )
    
    
    (92
    )Impairment of long-lived assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    196
    
    
    
    196Interest income
    
    
    (1
    )
    
    
    (63
    )
    
    
    (124
    )
    
    
    138
    
    
    
    (50
    )Derivative financial instruments
    
    
    
    
    
    
    617
    
    
    
    1
    
    
    
    (1
    )
    
    
    617Foreign exchange loss
    
    
    77
    
    
    
    1004
    
    
    
    (616
    )
    
    
    (234
    )
    
    
    231Interest expense
    
    
    145
    
    
    
    842
    
    
    
    75
    
    
    
    (402
    )
    
    
    660Trade receivables
    
    
    
    
    
    
    86
    
    
    
    190
    
    
    
    (107
    )
    
    
    169Inventories
    
    
    
    
    
    
    (28
    )
    
    
    72
    
    
    
    
    
    
    
    44Trade payables
    
    
    
    
    
    
    (116
    )
    
    
    (219
    )
    
    
    (37
    )
    
    
    (372
    )Other current assets and liabilities
    
    
    867
    
    
    
    47
    
    
    
    (137
    )
    
    
    (544
    )
    
    
    233Net cash provided by operating activities
    
    
    286
    
    
    
    447
    
    
    
    277
    
    
    
    (239
    )
    
    
    771INVESTING ACTIVITIESInvestments in machinery and equipment
    
    
    
    
    
    
    (61
    )
    
    
    (76
    )
    
    
    1
    
    
    
    (136
    )Investment in subsidiaries
    
    
    60
    
    
    
    
    
    
    
    (43
    )
    
    
    (60
    )
    
    
    (43
    )Deferred charges
    
    
    
    
    
    
    (92
    )
    
    
    (27
    )
    
    
    
    
    
    
    (119
    )Interest received
    
    
    (261
    )
    
    
    116
    
    
    
    126
    
    
    
    68
    
    
    
    49Trade receivables to affiliates
    
    
    (18
    )
    
    
    (496
    )
    
    
    (1,995
    )
    
    
    1,846
    
    
    
    (663
    )Others from investing activities
    
    
    
    
    
    
    (11
    )
    
    
    (1
    )
    
    
    (1
    )
    
    
    (13
    )Net cash used in investing activities
    
    
    (219
    )
    
    
    (544
    )
    
    
    (2,016
    )
    
    
    1,854
    
    
    
    (925
    )To obtain cash from financing activities
    
    
    67
    
    
    
    (97
    )
    
    
    (1,739
    )
    
    
    1,615
    
    
    
    (154
    )FINANCING ACTIVITIES:Proceeds from short-term bank loans
    
    
    
    
    
    
    85
    
    
    
    133
    
    
    
    
    
    
    
    218Interest paid
    
    
    (128
    )
    
    
    (348
    )
    
    
    (69
    )
    
    
    (100
    )
    
    
    (645
    )Dividends paid to noncontrolling interest
    
    
    
    
    
    
    (60
    )
    
    
    (113
    )
    
    
    65
    
    
    
    (108
    )Proceeds from long-term bank loans
    
    
    
    
    
    
    41
    
    
    
    47
    
    
    
    
    
    
    
    88Payments of long-term bank loans
    
    
    
    
    
    
    (51
    )
    
    
    (26
    )
    
    
    
    
    
    
    (77
    )Notes payables to affiliates
    
    
    60
    
    
    
    2,090
    
    
    
    6
    
    
    
    (1,627
    )
    
    
    529Derivative financial instruments
    
    
    
    
    
    
    166
    
    
    
    (10
    )
    
    
    
    
    
    
    156Other financing activities
    
    
    
    
    
    
    (1,709
    )
    
    
    1,825
    
    
    
    47
    
    
    
    163Net cash provided by financing activities
    
    
    (68
    )
    
    
    214
    
    
    
    1,793
    
    
    
    (1,615
    )
    
    
    324Net increase in cash and cash equivalents
    
    
    (1
    )
    
    
    117
    
    
    
    54
    
    
    
    
    
    
    
    170Adjustment to cash flows due to exchange rate
fluctuations
    
    
    
    
    
    
    (7
    )
    
    
    (16
    )
    
    
    
    
    
    
    (23
    )Cash and cash equivalents at the beginning of year
(includes restricted cash of Ps. 83)
    
    
    1
    
    
    
    212
    
    
    
    63
    
    
    
    
    
    
    
    276Cash and cash equivalents at the end of year
(includes restricted cash of Ps. 152)
    
    Ps.
    
    
    
    Ps.
    322
    
    
    Ps.
    101
    
    
    Ps.
    
    
    
    Ps.
    423
  F-154




---



##### Table of Contents



Wholly ownedCombined Wholly
    
    
    Guarantors
    
    
    Vidrio y
    
    
    Vitro
    
    
    No
    
    
    Adjuntments and
    
    
    VimexicoFor the year ended December 31, 2009
    
    Vimexico
    
    
    owned guarantors
    
    
    sold to Vitro
    
    
    Cristal
    
    
    Automotriz
    
    
    Guarantors
    
    
    eliminations
    
    
    combinedOPERATING ACTIVITIES:Loss (income) before income taxes
    
    Ps.
    (922
    )
    
    Ps.
    (286
    )
    
    Ps.
    (567
    )
    
    Ps.
    (601
    )
    
    Ps.
    (77
    )
    
    Ps.
    (96
    )
    
    Ps.
    754
    
    
    Ps.
    (1,795
    )Items related to investing and financing
activities:Depreciation and amortization
    
    
    2
    
    
    
    239
    
    
    
    112
    
    
    
    16
    
    
    
    104
    
    
    
    102
    
    
    
    (648
    )
    
    
    575Gain from sale of long-lived assets
    
    
    
    
    
    
    (17
    )
    
    
    
    
    
    
    3
    
    
    
    (7
    )
    
    
    7
    
    
    
    69
    
    
    
    55Impairment of long-lived assets
    
    
    
    
    
    
    81
    
    
    
    13
    
    
    
    17
    
    
    
    60
    
    
    
    36
    
    
    
    
    
    
    
    207Interest income
    
    
    (286
    )
    
    
    (42
    )
    
    
    (4
    )
    
    
    (56
    )
    
    
    
    
    
    
    (192
    )
    
    
    348
    
    
    
    (232
    )Derivative financial instruments
    
    
    
    
    
    
    15
    
    
    
    
    
    
    
    96
    
    
    
    19
    
    
    
    
    
    
    
    
    
    
    
    130Foreign exchange loss
    
    
    (70
    )
    
    
    (32
    )
    
    
    (9
    )
    
    
    (184
    )
    
    
    85
    
    
    
    
    
    
    
    95
    
    
    
    (115
    )Interest expense
    
    
    211
    
    
    
    333
    
    
    
    96
    
    
    
    466
    
    
    
    (6
    )
    
    
    125
    
    
    
    (332
    )
    
    
    893Trade receivables
    
    
    
    
    
    
    (396
    )
    
    
    367
    
    
    
    134
    
    
    
    39
    
    
    
    199
    
    
    
    755
    
    
    
    1,098Inventories
    
    
    
    
    
    
    106
    
    
    
    246
    
    
    
    103
    
    
    
    21
    
    
    
    137
    
    
    
    (7
    )
    
    
    606Trade payables
    
    
    
    
    
    
    46
    
    
    
    (74
    )
    
    
    151
    
    
    
    (212
    )
    
    
    65
    
    
    
    (142
    )
    
    
    (166
    )Other current assets and liabilities
    
    
    1,020
    
    
    
    (192
    )
    
    
    50
    
    
    
    (50
    )
    
    
    (270
    )
    
    
    132
    
    
    
    (814
    )
    
    
    (124
    )Net cash provided by operating activities
    
    
    (45
    )
    
    
    (145
    )
    
    
    230
    
    
    
    95
    
    
    
    (244
    )
    
    
    515
    
    
    
    726
    
    
    
    1,132INVESTING ACTIVITIESInvestments in machinery and equipment
    
    
    
    
    
    
    (7
    )
    
    
    (76
    )
    
    
    (41
    )
    
    
    (4
    )
    
    
    (23
    )
    
    
    (81
    )
    
    
    (232
    )Investment in subsidiaries
    
    
    1
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (429
    )
    
    
    (26
    )
    
    
    (454
    )Deferred charges
    
    
    
    
    
    
    (12
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2
    
    
    
    (26
    )
    
    
    (36
    )Interest received
    
    
    69
    
    
    
    22
    
    
    
    4
    
    
    
    30
    
    
    
    
    
    
    
    33
    
    
    
    (5
    )
    
    
    153Trade receivables to affiliates
    
    
    (486
    )
    
    
    (494
    )
    
    
    (3
    )
    
    
    (594
    )
    
    
    15
    
    
    
    (224
    )
    
    
    562
    
    
    
    (1,224
    )Others from investing activities
    
    
    
    
    
    
    (14
    )
    
    
    13
    
    
    
    
    
    
    
    (1
    )
    
    
    31
    
    
    
    (18
    )
    
    
    11Net cash used in investing activities
    
    
    (416
    )
    
    
    (505
    )
    
    
    (62
    )
    
    
    (605
    )
    
    
    10
    
    
    
    (610
    )
    
    
    406
    
    
    
    (1,782
    )Excess cash
to be applied to (obtained from) financial
activities
    
    
    (461
    )
    
    
    (650
    )
    
    
    168
    
    
    
    (510
    )
    
    
    (234
    )
    
    
    (95
    )
    
    
    1,132
    
    
    
    (650
    )FINANCING ACTIVITIES:Proceeds from short-term bank loans
    
    
    
    
    
    
    2
    
    
    
    (507
    )
    
    
    105
    
    
    
    
    
    
    
    (162
    )
    
    
    (1
    )
    
    
    (563
    )Interest paid
    
    
    60
    
    
    
    (192
    )
    
    
    (103
    )
    
    
    (470
    )
    
    
    
    
    
    
    (113
    )
    
    
    77
    
    
    
    (741
    )Dividends paid to noncontrolling interest
    
    
    
    
    
    
    
    
    
    
    224
    
    
    
    
    
    
    
    
    
    
    
    (29
    )
    
    
    (209
    )
    
    
    (14
    )Proceeds from long-term bank loans
    
    
    
    
    
    
    344
    
    
    
    
    
    
    
    (16
    )
    
    
    
    
    
    
    13
    
    
    
    
    
    
    
    341Payments of long-term bank loans
    
    
    
    
    
    
    (322
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (322
    )Notes payables to affiliates
    
    
    500
    
    
    
    933
    
    
    
    37
    
    
    
    1,144
    
    
    
    (1,206
    )
    
    
    371
    
    
    
    216
    
    
    
    1,995Derivative financial instruments
    
    
    
    
    
    
    (29
    )
    
    
    
    
    
    
    (26
    )
    
    
    
    
    
    
    
    
    
    
    8
    
    
    
    (47
    )Other financing activities
    
    
    (79
    )
    
    
    (25
    )
    
    
    35
    
    
    
    
    
    
    
    1,522
    
    
    
    (4
    )
    
    
    (1,224
    )
    
    
    225Net cash provided by financing activities
    
    
    481
    
    
    
    711
    
    
    
    (314
    )
    
    
    737
    
    
    
    316
    
    
    
    76
    
    
    
    (1,133
    )
    
    
    874
  F-155




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##### Table of Contents



Combined Wholly
    
    
    Guarantors
    
    
    Vidrio y
    
    
    Vitro
    
    
    No
    
    
    Adjuntments and
    
    
    VimexicoFor the year ended December 31, 2009
    
    Vimexico
    
    
    owned guarantors
    
    
    Vitro
    
    
    Cristal
    
    
    Automotriz
    
    
    Guarantors
    
    
    eliminations
    
    
    consolidatedNet increase in cash and cash equivalents
    
    
    20
    
    
    
    61
    
    
    
    (146
    )
    
    
    227
    
    
    
    82
    
    
    
    (20
    )
    
    
    
    
    
    
    224Adjustment to cash flows due to exchange
rate fluctuationsCash and cash equivalents at the beginning
of year
(includes restricted cash of Ps. 152)
    
    
    
    
    
    
    74
    
    
    
    226
    
    
    
    10
    
    
    
    12
    
    
    
    101
    
    
    
    
    
    
    
    423Cash and cash equivalents at the end of year
 (includes restricted cash of Ps. 73)
    
    Ps.
    20
    
    
    Ps.
    135
    
    
    Ps.
    80
    
    
    Ps.
    237
    
    
    Ps.
    94
    
    
    Ps.
    81
    
    
    Ps.
    
    Ps.
    647
  F-156




---



##### Table of Contents



e)
    
    Supplemental condensed consolidating financial information reconciled from MFRS to
U.S. GAAP:
   Combined
    
    
    Combined
    
    
    AdjustmentsWholly-Owned
    
    
    Non-
    
    
    and
    
    
    ViméxicoFor the year ended December 31, 2007
    
    Viméxico
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedNet (loss) income as
reported under MFRS
    
    Ps.
    (86
    )
    
    Ps.
    (86
    )
    
    Ps.
    290
    
    
    Ps.
    (22
    )
    
    Ps.
    96U.S. GAAP adjustments:Deferred income taxes
    
    
    (103
    )
    
    
    63
    
    
    
    3
    
    
    
    
    
    
    
    (37
    )Monetary position result
on deferred income taxes
and deferred workers
profit sharing
    
    
    5
    
    
    
    14
    
    
    
    (2
    )
    
    
    
    
    
    
    17Amortization of
capitalized interest
    
    
    
    
    
    
    (4
    )
    
    
    
    
    
    
    
    
    
    
    (4
    )Effect of applying
Bulletin B-10
    
    
    
    
    
    
    (15
    )
    
    
    (6
    )
    
    
    
    
    
    
    (21
    )Employee retirement
obligations
    
    
    
    
    
    
    (4
    )
    
    
    (3
    )
    
    
    
    
    
    
    (7
    )Purchase of Visteons
capital investment
    
    
    5
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5Impairment of longlived
assets
    
    
    
    
    
    
    (10
    )
    
    
    
    
    
    
    
    
    
    
    (10
    )Investment in subsidiaries
    
    
    39
    
    
    
    
    
    
    
    
    
    
    
    (39
    )
    
    
    Total U.S. GAAP adjustments
    
    
    (54
    )
    
    
    44
    
    
    
    (8
    )
    
    
    (39
    )
    
    
    (57
    )Net (loss) income under
U.S. GAAP
    
    Ps.
    (140
    )
    
    Ps.
    (42
    )
    
    Ps.
    282
    
    
    Ps.
    (61
    )
    
    Ps.
    39
  F-157




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##### Table of Contents



Combined
    
    
    Combined
    
    
    AdjustmentsWholly-Owned
    
    
    Non-
    
    
    and
    
    
    ViméxicoFor the year ended December 31, 2008
    
    Viméxico
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedNet (loss) income as reported
under MFRS
    
    Ps.
    (824
    )
    
    Ps.
    (1,711
    )
    
    Ps.
    971
    
    
    Ps.
    946
    
    
    Ps.
    (618
    )U.S. GAAP adjustments:Deferred income taxes
    
    
    (184
    )
    
    
    238
    
    
    
    1
    
    
    
    
    
    
    
    55Amortization of capitalized interest
    
    
    
    
    
    
    (5
    )
    
    
    
    
    
    
    
    
    
    
    (5
    )Goodwill
    
    
    
    
    
    
    (5
    )
    
    
    (38
    )
    
    
    
    
    
    
    (43
    )Effect of applying Bulletin B-10
    
    
    
    
    
    
    23
    
    
    
    (5
    )
    
    
    
    
    
    
    18Derivative Financial Instruments
    
    
    
    
    
    
    17
    
    
    
    
    
    
    
    
    
    
    
    17Employee retirement obligations
    
    
    
    
    
    
    11
    
    
    
    
    
    
    
    
    
    
    
    11Purchase of Visteons capital
investment
    
    
    5
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5Impairment of longlived assets
    
    
    
    
    
    
    (45
    )
    
    
    
    
    
    
    
    
    
    
    (45
    )Investment in subsidiaries
    
    
    236
    
    
    
    
    
    
    
    
    
    
    
    (236
    )
    
    
    Total U.S. GAAP adjustments
    
    
    57
    
    
    
    234
    
    
    
    (42
    )
    
    
    (236
    )
    
    
    13Net (loss) income under U.S. GAAP
    
    Ps.
    (767
    )
    
    Ps.
    1,477
    
    
    Ps.
    929
    
    
    Ps.
    710
    
    
    Ps.
    605
  F-158




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##### Table of Contents



Combined
    
    
    Wholly-Owned
    
    
    Vitro
    
    
    
    
    
    
    CombinedWholly-Owned
    
    
    Guarantors Sold
    
    
    Vidrio y
    
    
    Vitro
    
    
    Non-
    
    
    Adjustments and
    
    
    ViméxicoFor the year ended December 31, 2009
    
    Viméxico
    
    
    Guarantors
    
    
    to Vitro
    
    
    Cristal
    
    
    Automotriz
    
    
    Guarantors
    
    
    Eliminations
    
    
    CombinedNet (loss) income of as reported
under MFRS
    
    Ps.
    (938
    )
    
    Ps.
    (227
    )
    
    Ps.
    (701
    )
    
    Ps.
    (448
    )
    
    Ps.
    (53
    )
    
    Ps.
    (10
    )
    
    Ps.
    755
    
    
    Ps.
    (1,624
    )U.S. GAAP adjustments:Deferred income taxes
    
    
    (3
    )
    
    
    (144
    )
    
    
    (57
    )
    
    
    (767
    )
    
    
    (499
    )
    
    
    (13
    )
    
    
    (5
    )
    
    
    (1,488
    )Amortization of capitalized interest
    
    
    
    
    
    
    (4
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4
    )Effect to ASC 715 (previously SFAS No.
158)
    
    
    
    
    
    
    (7
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7
    )Fair value of financial instruments
    
    
    
    
    
    
    (2
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2
    )Employee retirement obligations
    
    
    
    
    
    
    6
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10
    
    
    
    
    
    
    
    16Purchase of Visteons capital investment
    
    
    9
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9Impairment of longlived assets
    
    
    
    
    
    
    (46
    )
    
    
    
    
    
    
    
    
    
    
    60
    
    
    
    
    
    
    
    
    
    
    
    15Total U.S. GAAP adjustments
    
    
    6
    
    
    
    (196
    )
    
    
    (57
    )
    
    
    (767
    )
    
    
    (439
    )
    
    
    (3
    )
    
    
    (5
    )
    
    
    (1,461
    )Net (loss) income under U.S. GAAP
    
    Ps.
    (932
    )
    
    Ps.
    (424
    )
    
    Ps.
    (758
    )
    
    
    (1,215
    )
    
    Ps.
    (492
    )
    
    Ps.
    (13
    )
    
    Ps.
    750
    
    
    Ps.
    (3,085
    )
  F-159




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##### Table of Contents



CombinedWholly-
    
    
    Combined
    
    
    AdjustmentsOwned
    
    
    Non-
    
    
    and
    
    
    ViméxicoAs of December 31, 2008
    
    Viméxico
    
    
    Guarantors
    
    
    Guarantors
    
    
    Eliminations
    
    
    ConsolidatedTotal stockholders equity reported
under MFRS
    
    Ps.
    1,377
    
    
    Ps.
    (221
    )
    
    Ps.
    5,237
    
    
    Ps.
    (999
    )
    
    Ps.
    5,394U.S. GAAP adjustments:Deferred income taxes
    
    
    (442
    )
    
    
    16
    
    
    
    11
    
    
    
    
    
    
    
    (415
    )Capitalization of interest
    
    
    
    
    
    
    38
    
    
    
    4
    
    
    
    
    
    
    
    42Accumulated amortization of capitalized
interest
    
    
    
    
    
    
    (25
    )
    
    
    (2
    )
    
    
    
    
    
    
    (27
    )Goodwill
    
    
    
    
    
    
    
    
    
    
    81
    
    
    
    
    
    
    
    81Derivative financial Instruments
    
    
    
    
    
    
    17
    
    
    
    
    
    
    
    
    
    
    
    17Effect of SFAS No. 158
    
    
    
    
    
    
    (381
    )
    
    
    (33
    )
    
    
    
    
    
    
    (414
    )Employee retirement obligations
    
    
    
    
    
    
    (17
    )
    
    
    (10
    )
    
    
    
    
    
    
    (27
    )Purchase of Visteons capital investment
    
    
    (62
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (62
    )Purchase of remaining 40% interest in
Vitro Cristalglass
    
    
    
    
    
    
    
    
    
    
    60
    
    
    
    
    
    
    
    60Impairment of longlived assets
    
    
    
    
    
    
    345
    
    
    
    
    
    
    
    
    
    
    
    345Investment in subsidiaries
    
    
    150
    
    
    
    
    
    
    
    
    
    
    
    (150
    )
    
    
    Total U.S. GAAP adjustments
    
    
    (354
    )
    
    
    (7
    )
    
    
    111
    
    
    
    (150
    )
    
    
    (400
    )Total stockholders equity under U.S.
GAAP
    
    Ps.
    1,023
    
    
    Ps.
    (228
    )
    
    Ps.
    5,348
    
    
    Ps.
    (1,149
    )
    
    Ps.
    4,994
  F-160




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##### Table of Contents



2009Wholly-Owned
    
    
    
    
    
    
    
    
    
    
    Combined
    
    
    AdjustmentsCombined Wholly-
    
    
    Guarantors Sold to
    
    
    Vitro Vidrio y
    
    
    Vitro
    
    
    Non-
    
    
    and
    
    
    ViméxicoViméxico
    
    
    Owned Guarantors
    
    
    Vitro
    
    
    Cristal
    
    
    Automotriz
    
    
    Guarantors
    
    
    Eliminations
    
    
    CombinedTotal stockholders equity reported under MFRS
    
    Ps.
    (373
    )
    
    Ps.
    1,936
    
    
    Ps.
    279
    
    
    Ps.
    1,531
    
    
    Ps.
    595
    
    
    Ps.
    4,510
    
    
    Ps.
    (2,034
    )
    
    Ps.
    6,444U.S. GAAP adjustments:Deferred income taxes
    
    
    (508
    )
    
    
    (122
    )
    
    
    (57
    )
    
    
    (767
    )
    
    
    (515
    )
    
    
    (4
    )
    
    
    
    
    
    
    (1,973
    )Capitalization of interest
    
    
    
    
    
    
    38
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4
    
    
    
    
    
    
    
    42Accumulated amortization for capitalized interest
    
    
    
    
    
    
    (28
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3
    )
    
    
    
    
    
    
    (31
    )Goodwill
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    81
    
    
    
    
    
    
    
    81Fair value of financial Instruments
    
    
    
    
    
    
    15
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15Effect of ASC 715 (previously SFAS No. 158) (see)
    
    
    
    
    
    
    (514
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (21
    )
    
    
    
    
    
    
    (535
    )Employee retirement obligations
    
    
    
    
    
    
    (12
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (12
    )Purchase of Visteons capital investment
    
    
    (52
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (52
    )Impairment of long-lived assets
    
    
    
    
    
    
    301
    
    
    
    
    
    
    
    
    
    
    
    60
    
    
    
    
    
    
    
    
    
    
    
    361Purchase of remaining 40% interest in Vitro Cristalglass
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    60
    
    
    
    
    
    
    
    60Total U.S. GAAP adjustments
    
    
    (560
    )
    
    
    (322
    )
    
    
    (57
    )
    
    
    (767
    )
    
    
    (455
    )
    
    
    117
    
    
    
    
    
    
    
    (2,044
    )Total stockholders equity under U.S. GAAP
    
    Ps.
    (933
    )
    
    Ps.
    1,614
    
    
    Ps.
    222
    
    
    Ps.
    764
    
    
    Ps.
    140
    
    
    Ps.
    4,627
    
    
    Ps.
    (2,034
    )
    
    Ps.
    4,400
  F-161




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##### Table of Contents



f.
    
    Suplemental U.S. GAAP Cash Flow Information
   Combined
    
    
    
    
    
    
    AdjustmentsWholly-Owned
    
    
    Combined
    
    
    and
    
    
    ViméxicoAs of December 31, 2007
    
    Viméxico
    
    
    Guarantors
    
    
    Non-Guarantors
    
    
    Eliminations
    
    
    ConsolidatedNet cash provided by
operating activities
    
    Ps.
    6
    
    
    Ps.
    270
    
    
    Ps.
    229
    
    
    Ps.
    44
    
    
    Ps.
    549Net cash (used in)
provided by financing
activities
    
    
    (1,193
    )
    
    
    225
    
    
    
    (47
    )
    
    
    1,008
    
    
    
    (7
    )Net cash provided by
(used in) investing
activities
    
    
    1,188
    
    
    
    (470
    )
    
    
    (171
    )
    
    
    (1,052
    )
    
    
    (505
    )
  Combined
    
    
    
    
    
    
    AdjustmentsWholly-Owned
    
    
    Combined
    
    
    and
    
    
    ViméxicoAs of December 31, 2007
    
    Viméxico
    
    
    Guarantors
    
    
    Non-Guarantors
    
    
    Eliminations
    
    
    ConsolidatedInterest paid
    
    Ps.
    244
    
    
    Ps.
    522
    
    
    Ps.
    69
    
    
    Ps.
    (462
    )
    
    Ps.
    373Income taxes paid
    
    
    16
    
    
    
    174
    
    
    
    14
    
    
    
    
    
    
    
    204
 Combined
    
    
    
    
    
    
    AdjustmentsWholly-Owned
    
    
    Combined
    
    
    and
    
    
    ViméxicoAs of December 31, 2008
    
    Viméxico
    
    
    Guarantors
    
    
    Non-Guarantors
    
    
    Eliminations
    
    
    ConsolidatedNet cash provided by
(used in) operating
activities
    
    Ps.
    (103
    )
    
    Ps.
    235
    
    
    Ps.
    324
    
    
    Ps.
    (270
    )
    
    Ps.
    186Net cash (used in)
provided by financing
activities
    
    
    60
    
    
    
    492
    
    
    
    1,873
    
    
    
    (1,516
    )
    
    
    909Net cash (used in)
provided by investing
activities
    
    
    42
    
    
    
    (662
    )
    
    
    (2,143
    )
    
    
    1,786
    
    
    
    (977
    )
  F-162




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##### Table of Contents



Combined
    
    
    
    
    
    
    AdjustmentsWholly-Owned
    
    
    Combined
    
    
    and
    
    
    ViméxicoAs of December 31, 2008
    
    Viméxico
    
    
    Guarantors
    
    
    Non-Guarantors
    
    
    Eliminations
    
    
    ConsolidatedInterest paid
    
    Ps.
    128
    
    
    Ps.
    349
    
    
    Ps.
    68
    
    
    Ps.
    100
    
    
    Ps.
    645Income taxes paid
    
    
    
    
    
    
    69
    
    
    
    (59
    )
    
    
    
    
    
    
    10
  F-163




---



##### Table of Contents



Combined
    
    
    Wholly-Wholly-
    
    
    Owned
    
    
    Vitro
    
    
    
    
    
    
    Combined
    
    
    AdjustmentsOwned
    
    
    Guarantors
    
    
    Vidrio y
    
    
    Vitro
    
    
    Non-
    
    
    and
    
    
    ViméxicoAs of December 31, 2009
    
    Viméxico
    
    
    Guarantors
    
    
    Sold to Vitro
    
    
    Cristal
    
    
    Automotriz
    
    
    Guarantors
    
    
    Eliminations
    
    
    CombinedNet cash provided by (used in)
operating activities
    
    Ps.
    84
    
    
    Ps.
    (344
    )
    
    Ps.
    131
    
    
    Ps.
    (371
    )
    
    Ps.
    (244
    )
    
    Ps.
    435
    
    
    Ps.
    806
    
    
    Ps.
    497Net cash (used in) provided by
financing activities
    
    
    421
    
    
    
    932
    
    
    
    (211
    )
    
    
    1,233
    
    
    
    316
    
    
    
    189
    
    
    
    (1,217
    )
    
    
    1,663Net cash (used in) provided by
investing activities
    
    
    (485
    )
    
    
    (527
    )
    
    
    52
    
    
    
    (644
    )
    
    
    (10
    )
    
    
    (659
    )
    
    
    411
    
    
    
    (1,862
    )
  Combined
    
    
    Wholly-Wholly-
    
    
    Owned
    
    
    Vitro
    
    
    
    
    
    
    Combined
    
    
    AdjustmentsOwned
    
    
    Guarantors
    
    
    Vidrio y
    
    
    Vitro
    
    
    Non-
    
    
    and
    
    
    ViméxicoAs of December 31, 2009
    
    Viméxico
    
    
    Guarantors
    
    
    Sold to Vitro
    
    
    Cristal
    
    
    Automotriz
    
    
    Guarantors
    
    
    Eliminations
    
    
    CombinedInterest paid
    
    Ps.
    60
    
    
    Ps.
    (192
    )
    
    Ps.
    (103
    )
    
    Ps.
    (470
    )
    
    Ps.
    
    
    
    Ps.
    (113
    )
    
    Ps.
    77
    
    
    Ps.
    (741
    )Income taxes paid
    
    
    (12
    )
    
    
    (16
    )
    
    
    (6
    )
    
    
    6
    
    
    
    (25
    )
    
    
    2
    
    
    
    80
    
    
    
    29
  F-164