Transportacion Maritima Mexicana Reports
Fourth Quarter and Full Year 2000 Financial Results
- Pro Forma Consolidated Financials
- Merger of Share Classes
- Cash Flow and Balance Sheet Enhancements
- $40 Million In Securitization Committed
MEXICO CITY, Feb. 26 Transportacion Maritima Mexicana,
S.A. de C.V. , the largest Latin American multi-modal
transportation and logistics company, announced fourth quarter and year end
2000 results reflecting a $3.2 million tax refund and an $8 million reserve
related to restructuring to occur in the first half of 2001. Additionally,
the company has established proforma consolidated income and cash flow
statements reflecting the financial consolidation of TFM and TMM with this
release. The company received approval from its bondholders for this
financial consolidation after a successful solicitation offer which was
completed January 26, 2001. The company will begin reporting audited
consolidated financials in first quarter 2001.
In the fourth quarter, TMM reported net revenues of $93.1 million compared
with $85.8 million in the fourth quarter 1999, an increase of 8.5%. For the
12 month period of 2000, net revenues were $358.6 million compared with
$329.3 million in 1999, an increase of 8.9%.
For the fourth quarter of 2000, Grupo TMM, the financially consolidated
parent company of TMM and TFM, reported proforma consolidated net revenues of
$256.2 million, operating profit of $41.9 million and net profit of
$22.3 million. For the entire year 2000, Grupo TMM reported proforma net
revenue of $989.9 million, operating profit of $197.5 million and net profits
of $14.7 million. On a net income basis, earnings per share for Grupo TMM for
the full year 2000 were 26 cents.
Additionally, the company reported a net gain of $22.3 million or 39 cents
per share in the fourth quarter of 2000, compared with a net loss of
$3.5 million in the same period of 1999. Prior to a one time charge for
restructuring, the net income for the full year 2000 was $19.7 million, or
35 cents per share, compared with a net loss in the same period in 1999 of
$146.3 million or $2.59 per share.
The company obtained EBITDA of $58 million for the twelve months ended
December 31, 2000. The shortfall compared with previous projections of
$60 million in EBITDA was due to the costs related to significant derailments
and congestion at the TexMex rail line in the fourth quarter.
The company reported that operating income for TMM in the fourth quarter
of 2000 was $6.5 million compared with $513,000 in the fourth quarter of 1999.
Operating profits for this past year were $31 million compared with
$24.2 million in 1999, an improvement of 28.1%. Administrative costs in the
fourth quarter of 2000 were $10.7 million, compared with $13.2 million in
1999. Total administrative costs in 2000 were $48.1 million in 2000 versus
$50.3 million in 1999. The company stated that SG&A will continue to decline
substantially by at least $8 million annually, including headcount reductions
of $5 million in 2001. Additionally, interest costs are expected to be
reduced substantially in 2001 to $40 million from $59 million in 2000.
Jose Serrano, chairman and CEO, said: "We are pleased that during the
past few months, we have been able to fulfill many of our commitments to our
shareholders, including the financial consolidation of TFM into TMM, continued
reduction of overhead expenses, commitment of a $40 million securitization
program, and debt reduction. A number of activities designed to further
enhance shareholder value are in progress, such as the purchase from the
Mexican government of an additional stake in the TFM rail operation and the
continued expansion of our port activities.
"For TMM, 2000 was a very eventful year in which the company focused on
reducing expenses, eliminating unprofitable business ventures, and improving
the quality of its assets. Although 2000 was primarily a year of
consolidation, we also took many steps to lay a foundation for growth in 2001
and beyond. As a result, we have high expectations for beginning a real trend
of steady operating gains during the year, including growth in EBITDA."
Javier Segovia, president of TMM added: "In reviewing our results, we are
pleased with our improvement in operating income and operating profits.
Moreover, we have reduced SG&A significantly, which is an important prelude to
improving operating returns. We also believe financial consolidation of TFM
into our results will make the value of this asset clear to shareholders, yet
another benefit of the changes taking place at TMM."
TMM's Mexican-based business components include: 1) multi-modal logistics
facilities throughout the country; 2) the world class TFM Railroad; 3) the
Texas Mexican Railway; 4) ownership and management of key Mexican port
facilities; 5) diverse trucking operations; 6) a specialized marine transport
division; and 7) the continuation of alliances with leading transportation and
distribution companies. These units collectively allow TMM to continue to
market a full range of non-owned alliance assets.
PORT OPERATIONS
The company reported that the its port facilities continued to grow
revenues and improve margins throughout 2000. The gross profit margin for the
full year 2000 was 49.6%. Francisco Kassian, president of TMM's Port and
Terminals business noted that Manzanillo's two berth positions are now in full
operation and are supplemented by a third position when it is available.
Manzanillo is currently handling 18,000 container movements per month at this
site. Maersk/Sealand is calling on the terminal on a weekly basis and other
vessel operators are increasing tonnage.
Kassian also reported that Veracruz auto warehousing is exceeding 343,000
cars per year and that operations at Acapulco continue to grow with new Nissan
products bound for Chile. He said, "Passenger operations at Acapulco are
steady and are growing at Cozumel. Additional activity at Veracruz is
diversifying TMM's services to include various minerals and all types of steel
products. Additionally, warehousing and other Stevedoring operations managed
by TMM are improving."
President Vicente Fox announced last week that the federal highway between
Tuxpan and Mexico City will be completed through the mountains over the course
of 2001. TMM noted that it had anticipated this progress five years ago when
it acquired the facility at Tuxpan. The company now owns the port located in
the closest proximity to Mexico City. Port acquisition potentials exist for
the company at Cabo San Lucas, Puerto Vallarta, and at Tampico/Altimira.
TEXMEX RAIL OPERATIONS
TMM's Rail Operations reported its TexMex division grew revenues
throughout 2000 by 14%. Mario Mohar, CEO and president of TFM and president of
Tex-Mex Rail, noted that, "This rapid growth has put a strain on what was in
the past an underutilized short line railroad. This past year, TexMex broke
substantial volume records as Burlington Northern Santa Fe and Kansas City
Southern Industries increased market share and usage of the TexMex track. In
the fourth quarter, TexMex experienced an abnormally high level of derailments
as well as slow orders, which caused congestion and impacted labor, car hire
and locomotive expense. These events cost the company in November and
December $3 million in direct costs and produced congestion."
Mohar continued, "The TexMex board has authorized $8 million in additional
capital to be invested immediately in order to protect continued growth of
TexMex revenues and to correct margin decline caused by fourth quarter
congestion, slow orders, and derailments. We are very confident that TexMex
will return to a superior operating profit position in the near future as it
corrects this situation and integrates more completely with TFM."
SPECIALIZED MARITIME
TMM reported that its supply ships are rapidly improving in volume and
price activity as Mexican oil production is increasing. Silverio Di Costanzo,
general director of TMM's Specialized Maritime Group, said, "The new maritime
law in Mexico is beginning to impact price quality and restrict foreign
competition. We anticipate to charter an additional five to six supply ships
over the next three months."
Di Costanzo also noted that, "Oil tanker revenues are stable and have
recovered with (additional/renewed) Pemex contracts and parcel tanker activity
has improved with multiple new private contracts. The car carrier group has
turned around a loss position and restructured its routes. Finally, our tug
boat activity will increase in the second and third quarters of 2001,
producing increased revenues over 2000.
The company also reported that it is working closely with the Mexican
government to explore new possibilities for the expansion of oil tanker
transportation. Di Costanzo said, "While these discussions are preliminary, we
are devoting some time to their potential impact on the company. We will
build upon our existing strengths in oil and chemical product transportation
and supply ship management and expand our current fleet, which totals 32
ships, as opportunities become available."
LAND OPERATIONS
The company reported that its land operations continued to experience
strong outsourcing logistical demand at manufacturing sites in the fourth
quarter. Additionally, the company said that the division is reorganizing its
other components to make the unit a more cohesive integrated logistical
organization.
The company also mentioned that the land operations division will expand
in 2001 with third party services related to truck, railroads, and intermodal
services. The division is now kicking off extensive RoadRailer operations
between various United States rail terminals and Mexican cities. Gerardo
Primo, general director of the Land Operations Group, noted that, "We have
recently completed a significant agreement with customs brokers at the border
related to RoadRailer services that will promote truck to rail conversion. We
anticipate RoadRailer and border operations to contribute $44 million in new
revenue this year." Primo also noted that the trucking division will continue
to focus on dedicated contract services, drayage, and will expand with new
customers throughout the year.
Additionally, Primo mentioned that, "After the sale of Americana ships was
completed early in 2000, the land services that were attached to what is now
CP ships had to be redefined. Therefore quarter to quarter and year to year
comparisons provide for some distortion."
2001 OUTLOOK
The company believes it will reach EBITDA in 2001 for unconsolidated TMM
of $71 million. Joined with TFM, the company anticipates Grupo TMM to reach a
consolidated EBITDA of approximately $364 million, which would represent a 23%
increase compared with 2000. The company projects year over year top-line
growth in the range of 17%, and forecasts a combined operating profit of
approximately $270 million, which would represent a 23% increase compared with
2000. All projections include consolidated financials from TFM.
"We continue to pursue cost reductions and efficiencies that we believe
will have a material positive affect on our 2001 performance, including
administrative and general expense controls, possible operational savings as
the result of the financial consolidation of TFM, and the settlement for the
redundant rail line to the government," said Segovia.
"We anticipate providing additional and more detailed 2001 guidance in the
coming months. Our goal is to make TMM increasingly easier to follow,
establishing clearly defined performance goals and thorough financial
discussion. We believe that the inclusion of TFM in our operating results
represents major progress toward this goal, and the consolidation makes both
the reporting and the financial contribution much clearer."
"The reduction of debt and SG & A will continue to be our focus throughout
2001. Additionally, we anticipate merging our two classes of shares and
introducing a stock option plan for management tied to shareholder value-
enhancing measurements, by the end of the first half of this year. At this
moment, we believe our current projections would represent significant
financial growth.
2000 ACCOMPLISHMENTS POSITION TMM FOR GROWTH, IMPROVING CASH RETURNS
During the year, the company achieved numerous major milestones, and is
still pursuing several important initiatives. Accomplishments and activities
include:
- Completed the sale of non-strategic assets to generate cash, reduce
debt, and improve the quality of the company's remaining investments.
- Reduced the ratio of sales, general & administrative costs as a percent
of sales through administrative and operational cost reduction
initiatives.
- Partnered with General Motors in TMM Multimodal, with a $20 million
investment by GM, the proceeds being used to acquire Grupo Servia's TFM
shares.
- Completed a bondholder consent solicitation and acquired the controlling
stake in Grupo TMM, allowing for the financial consolidation of TFM into
TMM and accelerating the timetable for TMM shareholders to benefit
financially from the strong performance of TFM.
- Received commitment for a $40 million securitization of receivables that
will enable the company to reduce debt cost and have access to
significant amounts of working capital as it continues to fund an
increasing percentage of its working capital with cash from ongoing
operations.
- Retired the bond issue due October 2000.
- Maximized the impact of future capital expenditures in its ports and
terminals business by selling part ownership of many of these assets and
enhancing the joint venture with SSA to operate the ports and terminals.
- Invested in numerous land infrastructure projects to increase the number
and size of port terminals and to make ongoing capacity-related
investments in the growing TFM rail operation.
- Helped TFM to become one of the most efficient class one railroads in
North America with one of the highest operating margins in North
America.
- Implemented numerous growth strategies to position the company for 2001
and beyond.
- Finished the year 2000 as the top-gaining stock among major publicly
traded Mexican corporations.
Serrano concluded, "TMM is a strong company due to the value of all of its
assets -- ports, land, specialized maritime and rail. The company is better
positioned than any other company in Mexico to take advantage of the trade
growth between Mexico and the United States, and of the conversion from truck
to rail that is now underway. We are the only integrated logistics company in
Mexico, and that logistical position is a key asset as Mexico and the United
States move toward greater alignment."
TMM will broadcast its fourth-quarter conference call and internet
presentation for investors over the Internet at http://www.vcall.com on Tuesday,
February 27, 2000, at 11:00 a.m. EST. To listen to the live call, please go to
the Web site at least 15 minutes early to register, download and install any
necessary audio software. A replay will also be available for 90 days after
the conclusion of the call at this Web site.
Headquartered in Mexico City, TMM is Latin America's largest multimodal
transportation company. Through its branch offices and network of subsidiary
companies, TMM provides a dynamic combination of ocean and land transportation
services. TMM also has a significant interest in Transportacion Ferroviaria
Mexicana (TFM), which operates Mexico's Northeast railway and carries over 40
percent of the country's rail cargo. Visit TMM's web site at
http://www.tmm.com.mx and TFM's web site at http://www.gtfm.com.mx. Both
sites offer Spanish/English language options. For free fax on demand
information, dial 1-800-PRO-INFO and enter the company's symbol: TMM.
Included in this report are certain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended. Such forward-looking
statements are based on the beliefs of the Company's management, as well as on
assumptions made by and information currently available to the Company at the
time such statements were made. The words "believe", "expect" and "anticipate"
and similar expressions identify some of these forward-looking statements.
Statements looking forward in time involve risks, uncertainties and other
factors which may cause the actual results, performance or achievements of the
company to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements. Such
factors include, among others, global, U.S. and Mexican economic and social
conditions; the effect of the North American Free Trade Agreement ("NAFTA") on
the level of U.S. -Mexico trade; the company's ability to convert customers
from using trucking services to rail transport services; competition from
other rail carriers and trucking companies in Mexico; the company's ability to
control expenses; and the effect of the company's employee training,
technological improvements and capital expenditures on labor productivity,
operating efficiencies and service reliability. Actual results could differ
materially from those included in such forward-looking statements. Readers are
cautioned not to place undue reliance on such forward-looking statements,
which speak only as of their respective dates. The company undertakes no
obligation to update publicly or revise any forward-looking statements,
whether as a result of new information, future events or otherwise. These risk
factors and additional information are included in the Company's reports on
Forms 6K and 20-F on file with the Securities and Exchange Commission.
Transportacion Maritima Mexicana, S.A. de C.V. and subsidiaries
* Consolidated Statement of Income
- millions of dollars -
(unaudited)
Three months ended Year ended
December 31 December 31
2000 1999 2000 1999
Revenue from freight
and services 93.116 85.846 358.571 329.320
Cost of freight and
services (72.371) (62.574) (266.372) (234.536)
Depreciation of vessels
and operating
equipment (3.324) (2.937) (12.778) (14.634)
17.421 20.335 79.421 80.150
Profit (loss) on sale
of assets (0.216) (5.543) (0.326) (2.737)
Administrative expenses(10.666) (13.188) (48.099) (50.327)
Corporate restructuring
expenses (1.091) (2.932)
Operating income 6.539 0.513 30.996 24.154
Financial expenses (4.308) (9.300) (26.901) (34.957)
Financial income 3.604 3.828 7.739 7.123
Exchange and derivatives
gain (loss) - Net (0.712) 4.418 0.144 (1.789)
(1.416) (1.054) (19.018) (29.623)
Other income (expense)
- Net 27.124 6.732 27.198 8.442
Income before taxes 32.247 6.191 39.176 2.973
Provision for taxes 2.966 11.565 11.002 3.294
Income before minority
interest 35.213 17.756 50.178 6.267
Minority interest (4.545) 2.392 (14.432) (8.529)
Net income before
results for
investment in TFM 30.668 20.148 35.746 (2.262)
Financial expense
attributable to
TFM investment (8.266) (8.279) (32.166) (31.839)
Interest in TFM 4.917 9.255 16.162 17.441
Income before results
from discontinuing
business 27.319 21.124 19.742 (16.660)
Net loss from
discontinued business (5.035) (24.639) (5.035) (129.653)
Net income 22.284 (3.515) 14.707 (146.313)
Weighted average
outstanding shares
(millions) 56.600 56.598 56.598 56.598
Earnings per share
(dollars / share) 0.39 (0.06) 0.26 (2.59)
Outstanding shares at
end of period
(millions) 56.698 56.598 56.698 56.598
Earnings per share
(dollars / share) 0.39 (0.06) 0.26 (2.59)
* Prepared in accordance with International Accounting Standards
Transportacion Maritima Mexicana, S.A. de C.V. and subsidiaries
* Consolidated Balance Sheet
- millions of dollars -
(unaudited)
Supplemental
Information
December 31 Dec.31, 2000 December 31
2000 before TFM 1999
Consolidation
CURRENT ASSETS
Cash and cash equivalents 87.247 54.209 84.122
Marketable securities 0.076 0.076 4.540
87.323 54.285 88.662
Accounts receivable
Customers 116.689 49.658 49.475
Other accounts receivable 94.567 40.754 91.597
Prepaid expenses 43.510 10.726 13.427
Total current assets 342.089 155.423 243.161
ACCOUNTS RECEIVABLE AND
MARKETABLE SECURITIES
(LONG-TERM) 1.739 1.739 1.739
VESSELS, EQUIPMENT AND
PROPERTY 1,958.307 167.307 169.800
INVESTMENT IN TFM 374.241 338.732
OTHER ASSETS 120.269 59.333 62.411
DEFERRED TAXES 249.467 111.385 107.417
ASSETS OF DISCONTINUING
BUSINESS 3.955 3.955 234.646
2,675.826 873.383 1,157.906
CURRENT LIABILITIES
Bank loans and current
maturities of long term
liabilities 72.081 67.854 219.026
Suppliers 82.642 43.335 48.732
Other accounts payable and
accrued expenses 119.839 87.085 100.146
Total current liabilities 274.562 198.274 367.904
REVENUE AND COSTS OF VOYAGES
IN PROCESS-NET, AND OTHER
DEFERRED CREDITS 2.263 2.263 0.133
DEFERRED TAXES 37.186 30.733 38.561
LONG-TERM LIABILITIES
Bank loans and other
obligations 1,192.832 381.508 376.620
Total long-term liabilities 1,192.832 381.508 376.620
LIABILITIES OF DISCONTINUING
BUSINESS 2.683 2.683 162.670
1,509.526 615.461 945.888
MINORITY INTEREST 1,010.580 102.202 60.294
MINORITY INTEREST OF
DISCONTINUING BUSINESS 4.364
STOCKHOLDER'S EQUITY
Capital stock 105.915 105.915 105.728
Premium on sale of stock 71.407 71.407 71.365
Reserve for repurchase of
shares 20.734 20.734 20.419
Retained earnings 20.914 20.914 13.098
Initial translation loss (63.250) (63.250) (63.250)
155.720 155.720 147.360
2,675.826 873.383 1,157.906
* Prepared in accordance with International Accounting Standards
Note: December 31, 1999 does not include the consolidation of TFM.
Transportacion Maritima Mexicana, S.A. de C.V. and subsidiaries
* Consolidated Statement of Cash Flow
- millions of dollars -
(unaudited)
Three months ended Year ended
December 31 December 31
2000 1999 2000 1999
OPERATIONS
Income before results
from discontinuing
business 27.319 21.124 19.742 (16.660)
Charges (credits) to
income not affecting
resources:
Depreciation &
amortization 6.326 5.987 27.078 28.189
Interest in TFM (4.917) (9.255) (16.162) (17.441)
Minority interest 4.545 (2.392) 14.432 8.529
Results on sale of
assets and
subsidiaries (32.321) (10.966) (48.921) (13.947)
Deferred income taxes (3.786) (12.209) (12.117) (4.110)
Other non-cash items 1.989 8.219 23.900 13.926
Total non-cash items (28.164) (20.616) (11.790) 15.146
Changes in assets &
liabilities (18.874) 16.082 13.788 24.437
Total adjustments (47.038) (4.534) 1.998 39.583
Net cash (used in)
provided by operating
activities (19.719) 16.590 21.740 22.923
INVESTMENT
Proceeds from sales of
assets (net) 1.942 0.971 22.953 24.378
Payments for purchases
of assets (1.628) (1.901) (20.061) (34.430)
Investment in TFM (20.250) (20.250)
Sale of subsidiaries,
net of cash sold 65.437 27.924 65.437 27.924
Proceeds from
discontinued business
(net) (2.195) 61.305
Dividends from
non-consolidated
subsidiaries 0.244
Purchase & sale of
marketable securities
(net) 0.023 10.045 4.540 38.170
Net cash (used in)
provided by investment
activities 43.329 37.039 114.168 56.042
FINANCING
Short-term borrowings
(net) 64.586 (16.501) 14.585 (22.760)
Principal payments
under capital lease
obligations (0.593) (1.926)
(Repurchase) sale of
accounts receivable
(net) (5.000) (20.000) (20.000)
Repayment of long-term
debt (99.814) (0.906) (159.260) (3.033)
Dividends paid to
minority shareholders (0.260) (2.203)
Capital lease
obligations 0.496
Capital stock increase
of subsidiaries paid
by minority
stockholders (1.023) 3.047
Treasury shares
assigned to employees 0.544 0.544
Net cash (used in)
provided by
financing
activities (35.277) (23.430) (165.821) (44.949)
Cash in Grupo TFM at
end of period 33.038 33.038
Net increase (decrease)
in cash 21.371 30.199 3.125 34.016
Cash at beginning of
period 65.876 53.923 84.122 50.106
Cash at end of period 87.247 84.122 87.247 84.122
* Prepared in accordance with International Accounting Standards
Cash flows from discontinued business were as follows:
Net cash (used in)
provided by
operating activities (9.278) (88.260)
Net cash (used in)
provided by
investment activities 33.207 124.963
Net cash (used in)
provided by
financing activities (18.005) (31.616)
Supplemental Information
Transportacion Maritima Mexicana, S.A. de C.V. and subsidiaries
* Pro-forma Consolidated Statement of Income including TFM
- millions of dollars -
(unaudited)
Three months ended Year ended
December 31 December 31
2000 1999 2000 1999
Revenue from freight
and services 256.197 224.239 989.934 844.666
Operating cost and
expenses (214.343) (191.463) (792.410) (697.628)
Operating income 41.854 32.776 197.524 147.038
Financial expense,
net (32.433) (31.801) (159.307) (162.660)
Other income (expense)
- Net 22.129 3.956 3.673 3.848
Income before taxes 31.550 4.931 41.890 (11.774)
Provision for taxes 10.963 35.256 29.312 44.612
Income before minority
interest 42.513 40.187 71.202 32.838
Minority interest (15.194) (19.063) (51.460) (49.498)
Net income before
results for
investment in TFM 27.319 21.124 19.742 (16.660)
Financial expense
attributable to
TFM investment
Interest in TFM
Income before results
from discontinuing
business 27.319 21.124 19.742 (16.660)
Net loss from
discontinued business (5.035) (24.639) (5.035) (129.653)
Net income 22.284 (3.515) 14.707 (146.313)
Weighted average
outstanding shares
(millions) 56.600 56.598 56.598 56.598
Earnings per share
(dollars / share) 0.39 (0.06) 0.26 (2.59)
Outstanding shares at
end of period
(millions) 56.698 56.598 56.698 56.598
Earnings per share
(dollars / share) 0.39 (0.06) 0.26 (2.59)
* Prepared in accordance with International Accounting Standards
Supplemental Information
Transportacion Maritima Mexicana, S.A. de C.V. and subsidiaries
* Pro-forma Consolidated Balance Sheet including TFM
- millions of dollars -
(unaudited)
December 31 December 31
2000 1999
CURRENT ASSETS
Cash and cash equivalents 87.247 95.072
Marketable securities 0.076 4.540
87.323 99.612
Accounts receivable
Customers 116.689 93.306
Other accounts receivable 94.567 140.912
Prepaid expenses 43.510 43.500
Total current assets 342.089 377.330
ACCOUNTS RECEIVABLE AND MARKETABLE SECURITIES
(LONG-TERM) 1.739 1.739
VESSELS, EQUIPMENT AND PROPERTY 1,958.307 2,001.018
OTHER ASSETS 120.269 123.078
DEFERRED TAXES 249.467 227.189
ASSETS OF DISCONTINUING BUSINESS 3.955 234.646
2,675.826 2,965.000
CURRENT LIABILITIES
Bank loans and current maturities of
long term liabilities 72.081 404.724
Suppliers 82.642 74.013
Other accounts payable and accrued expenses 119.839 144.857
Total current liabilities 274.562 623.594
REVENUE AND COSTS OF VOYAGES IN
PROCESS-NET, AND OTHER DEFERRED CREDITS 2.263 0.133
DEFERRED TAXES 37.186 42.926
LONG-TERM LIABILITIES
Bank loans and other obligations 1,192.832 1,045.169
Total long-term liabilities 1,192.832 1,045.169
LIABILITIES OF DISCONTINUING BUSINESS 2.683 162.670
1,509.526 1,874.492
MINORITY INTEREST 1,010.580 938.784
MINORITY INTEREST OF DISCONTINUING BUSINESS 4.364
STOCKHOLDER'S EQUITY
Capital stock 105.915 105.728
Premium on sale of stock 71.407 71.365
Reserve for repurchase of shares 20.734 20.419
Retained earnings 20.914 13.098
Initial translation loss (63.250) (63.250)
155.720 147.360
2,675.826 2,965.000
* Prepared in accordance with International Accounting Standards
Supplemental Information
Transportacion Maritima Mexicana, S.A. de C.V. and subsidiaries
* Pro-forma Consolidated Statement of Cash Flow including TFM
- millions of dollars -
(unaudited)
Three months ended Year ended
December 31 December 31
2000 1999 2000 1999
OPERATIONS
Income before results
from discontinuing
business 27.319 21.124 19.742 (16.660)
Charges (credits) to
income not affecting
resources:
Depreciation &
amortization 25.206 24.570 102.533 100.179
Minority interest 15.194 19.063 51.460 49.498
Results on sale of
assets and
subsidiaries (29.599) (9.175) (25.486) (9.086)
Deferred income
taxes (11.783) (35.900) (30.427) (45.428)
Other non-cash items 18.834 16.094 85.391 57.482
Total non-cash items 17.852 14.652 183.471 152.645
Changes in assets
& liabilities (14.324) 30.156 (16.359) (20.976)
Total adjustments 3.528 44.808 167.112 131.669
Net cash (used in)
provided by
operating activities 30.847 65.932 186.854 115.009
INVESTMENT
Proceeds from sales of
assets (net) 2.250 2.456 29.629 49.444
Payments for purchases
of assets (43.016) (14.258) (85.410) (83.842)
Investment in TFM (20.250) (20.250)
Sale of subsidiaries,
net of cash sold 65.437 27.924 65.437 27.924
Proceeds from
discontinued business
(net) (2.195) 61.305
Dividends from
non-consolidated
subsidiaries 0.244
Purchase & sale of
marketable securities
(net) 0.023 10.045 4.540 38.170
Net cash (used in)
provided by
investment activities 2.249 26.167 55.495 31.696
FINANCING
Short-term borrowings
(net) 64.583 (1.501) 29.687 44.240
Principal payments
under capital lease
obligations (1.491) 9.721 (12.168)
(Repurchase) sale of
accounts receivable
(net) (5.000) (20.000) (20.000)
Repayment of long-term
debt (100.604) (59.137) (248.473) (135.876)
Dividends paid to
minority shareholders (0.260) (2.203)
Capital lease obligations 0.496
Capital stock increase of
subsidiaries paid
by minority
stockholders (1.023) 3.047
Treasury shares assigned
to employees 0.544 0.544
Net cash (used in)
provided by
financing activities (36.968) (56.940) (250.174) (110.792)
Net increase (decrease)
in cash (3.872) 35.159 (7.825) 35.913
Cash at beginning of
period 91.119 59.913 95.072 59.159
Cash at end of period 87.247 95.072 87.247 95.072
* Prepared in accordance with International Accounting Standards
Cash flows from discontinued business were as follows:
Net cash (used in)
provided by
operating activities (9.278) (88.260)
Net cash (used in)
provided by
investment activities 33.207 124.963
Net cash (used in)
provided by
financing activities (18.005) (31.616)
Operating Results by Business Unit
Fourth Quarter Results
Non audited figures
(millions of dollars)
TMM Overall Results (Land, Specialized Maritime, Railroad, Ports and
Terminals)
1st Q. 1st Q. 2nd Q. 2nd Q. 3rd Q. 3rd Q. 4th Q. 4th Q.
1999 2000 1999 2000 1999 2000 1999 2000
Revenues 72.6 82.0 82.2 88.3 88.6 95.2 85.9 93.1
Gross Profit 19.9 20.1 18.8 21.7 21.1 20.2 20.3 17.4
Gross Margin 27.4 24.5 22.9 24.6 23.8 21.2 23.7 18.7
Land Operations
1st Q. 1st Q. 2nd Q. 2nd Q. 3rd Q. 3rd Q. 4th Q. 4th Q.
1999 2000 1999 2000 1999 2000 1999 2000
Revenues 16.1 21.9 23.1 22.1 26.8 22.6 23.0 17.0
Gross Profit 4.2 6.0 3.4 4.0 6.5 3.9 7.5 2.4
Gross Margin 26.1 27.4 14.7 18.1 24.3 17.3 32.6 14.1
Railroad
1st Q. 1st Q. 2nd Q. 2nd Q. 3rd Q. 3rd Q. 4th Q. 4th Q.
1999 2000 1999 2000 1999 2000 1999 2000
Revenues 10.9 13.2 13.0 13.7 14.0 17.4 13.2 13.8
Gross Profit 1.5 1.2 2.9 2.0 2.4 5.0 1.7 (2.5)
Gross Margin 13.8 9.1 22.3 14.6 17.1 28.7 12.9 (18.1)
Specialized Maritime
1st Q. 1st Q. 2nd Q. 2nd Q. 3rd Q. 3rd Q. 4th Q. 4th Q.
1999 2000 1999 2000 1999 2000 1999 2000
Revenues 32.7 29.0 30.4 32.4 30.4 35.5 30.3 36.7
Gross Profit 6.4 4.4 5.3 4.0 4.0 3.1 1.8 4.6
Gross Margin 19.6 15.2 17.4 12.3 13.2 8.7 5.9 12.6
Ports and Terminals
1st Q. 1st Q. 2nd Q. 2nd Q. 3rd Q. 3rd Q. 4th Q. 4th Q.
1999 2000 1999 2000 1999 2000 1999 2000
Revenues 12.9 17.9 15.7 20.1 17.4 19.7 19.4 25.6
Gross Profit 7.8 8.5 7.2 11.7 8.2 8.2 9.3 12.9
Gross Margin 60.5 47.5 45.9 58.2 47.1 41.6 48.0 50.4
Grupo Transportacion Ferroviaria Mexicana, S.A. de C.V. ("TFM")Reports Fourth
Quarter Results for the Period Ended December 31, 2000
Transportacion Ferroviaria Mexicana today reported operational results for
the fourth quarter of 2000. Transportacion Maritima Mexicana, S.A. de C.V.
owns a significant interest in Transportacion
Ferroviaria Mexicana (TFM).
Operational Results for the Fourth Quarter 2000
Consolidated net revenues for the three months ended December 31, 2000
were $165.4 million, which represents an increase of $24.7 million or 17.6%
from revenues of $140.7 million for the same period in 1999. The increase in
revenues resulted mainly from higher volume in all TFM's product segments
particularly in the automotive segment as a result of increased demand from
auto manufacturers exporting automobiles, trucks, motors and parts. The
industrial, chemical and petrochemical and intermodal segments also
experienced double-digit growth during the fourth quarter of 2000. The growth
experienced by TFM was achieved in spite of the U.S. economic slowdown which
affected TFM's volumes at the end of the fourth quarter.
Consolidated operating expenses for the fourth quarter of 2000 increased
to $130.1 million from $108.4 million for the same period in 1999. The
increase in operating expenses resulted mainly first, from higher variable
direct costs related to the growth of the company's business, including car
hire and operating lease costs, as new locomotives and freight cars were added
to TFM's fleet to service increased volumes and second, to the effects of
congestion problems on the Texas Mexican Railway at the border. Operating
expenses were also affected by a 50% increase in local diesel fuel prices from
the same period in 1999, taking into account the 30-day lag between
fluctuations in international diesel prices and corresponding changes in
Mexican diesel prices.
Consolidated operating profit for the fourth quarter of 2000 was
$35.3 million, representing an increase of $3.1 million or 9.6% from
consolidated operating profit for the fourth quarter of 1999. The operating
ratio (defined as operating expenses as a percentage of revenue) for the
fourth quarter of 2000 was 78.6%, compared to an operating ratio of 77.1%
recorded in the same period of 1999 resulting mainly from the increase of
diesel fuel prices in the fourth quarter of 2000.
OPERATIONAL RESULTS FOR THE YEAR ENDED DECEMBER 31, 2000
Consolidated net revenues for the year ended December 31, 2000 were
$640.6 million, which represents an increase of $116.0 million or 22.1% from
the year ended December 31, 1999. Consolidated operating expenses were
$474.0 million for 2000, representing an increase of $72.4 million or 18.0%
from the year ended December 31, 1999. The increase in operating expenses for
2000 reflected a corresponding increase in variable costs related to TFM's
revenue growth.
As a consequence, consolidated operating profit for the year ended
December 31, 2000 was $166.5 million, resulting in an operating ratio of
74.0%. This represents an improvement from an operating ratio of 76.6% for
the year ended December 31, 1999.
FINANCIAL EXPENSES
Net financial expenses incurred in the year ended December 31, 2000 were
$107.3 million and included $40.5 million of amortization of discount
debentures. The company recognized a $1.4 million foreign exchange loss for
the year. In addition, financial expenses included a one-time item of
$9.2 million, reflecting the amortization of financial fees and expenses
related to the prepayment of TFM's Senior Secured Credit Facility in the third
quarter of 2000.
NET INCOME
Net income for the year ended December 31, 2000 was $42.7 million. Net
income reflected a deferred income tax benefit of $18.3 million attributable
mainly to the effect of the peso appreciation against the dollar on the
valuation of TFM's assets as well as to the benefits of the accelerated
depreciation of the purchase price of the concession.
EBITDA
EBITDA for the year ended December 31, 2000 was $242.4 million
representing an increase of $41.1 million or 20.4% from EBITDA for the year
ended December 31, 1999. EBITDA margin (EBITDA as a percentage of revenue)
for the year 2000 was 37.8%.
LIQUIDITY AND CAPITAL RESOURCES
As of December 31, 2000, accounts receivable balance had increased from
$93.1 million at December 31, 1999 to $125.1 million, mainly due to higher
sales volume during the fourth quarter of 2000, and an increase in tax credits
resulting from increased transportation services rendered in 2000 as compared
with 1999. Outstanding trade receivables were maintained below 30 days, which
meets TFM's objectives in the management of working capital.
As of December 31, 2000, accounts payable and accrued expenses were
$76.3 million, $6.3 million higher than as of December 31, 1999, as a result
of the acceleration of TFM's capital investment program during the fourth
quarter of 2000.
TFM invested $41.4 million in capital improvements during the fourth
quarter of 2000. Total gross capital expenditures for the year ended December
31, 2000 were $65.3 million.
As of December 31, 2000, TFM had an outstanding debt balance of
$815.6 million, including the discounted value of a $290.0 million commercial
paper issuance. TFM refinanced its Senior Secured Credit Facility through a
U.S. Commercial Paper Program backed by letter of credit in September 2000
resulting in a substantial reduction of the company's debt service.
Grupo Transportacion Ferroviaria Mexicana, S.A. de C.V.
and Subsidiary
Consolidated Statement of Income
( Amounts expressed in thousands of US dollars )
( Unaudited )
Three months ended Year ended
December 31, December 31,
2000 1999 2000 1999
Transportation revenues 165,379 $140,692 640,558 $524,541
Operating expenses (111,184) (89,847) (398,575) (329,667)
Depreciation and
amortization (18,880) (18,583) (75,455) (71,990)
Operating profit 35,315 32,262 166,528 122,884
Other expenses - net (4,779) (2,661) (22,966) (4,136)
Financial expenses - net (21,731) (26,061) (107,258) (101,581)
Exchange loss - net (1,236) (158) (1,424) (75)
Net comprehensive
financing cost (22,967) (26,219) (108,682) (101,656)
Income before taxes
and minority interest 7,569 3,382 34,880 17,092
Deferred income tax 7,997 27,328 18,310 41,318
Income before minority
interest 15,566 30,710 53,190 58,410
Minority interest (2,789) (6,096) (10,506) (12,025)
Net income for the period $12,777 $24,614 $42,684 $46,385
The consolidated financial statements were prepared in accordance with
International Accounting Standards.
Grupo Transportacion Ferroviaria Mexicana, S.A. de C.V.
and Subsidiary
Consolidated Balance Sheet
( Amounts expressed in thousands of US dollars )
( Unaudited )
December 31, December 31,
2000 1999
Assets
Current assets
Cash and cash equivalents $33,038 $10,950
Accounts receivable - net 125,098 93,146
Materials and supplies 23,854 21,066
Other current assets 8,930 9,007
Total current assets 190,920 134,169
Concession, property and equipment - net 1,799,550 1,840,780
Other assets 14,088 25,012
Deferred income tax 138,082 119,772
Total assets $2,142,640 $2,119,733
Liabilities and stockholders'
equity
Current liabilities
Debt and capital lease due within
one year $4,227 $185,698
Accounts payable and accrued expenses 76,318 69,992
Total current liabilities 80,545 255,690
Long-term debt and capital
lease obligation 811,324 668,549
Other non-current liabilities 6,453 4,365
Total long-term liabilities 817,777 672,914
Total liabilities 898,322 928,604
Minority interest 370,376 359,871
Stockholders' equity
Capital stock 807,008 807,008
Retained earnings 66,934 24,250
Total stockholders' equity 873,942 831,258
Total liabilities and
stockholders' equity $2,142,640 $2,119,733
The consolidated financial statements were prepared in accordance with
International Accounting Standards.
Grupo Transportacion Ferroviaria Mexicana, S.A. de C.V.
and Subsidiary
Consolidated Statement of Cash Flows
( Amounts expressed in thousands of US dollars )
( Unaudited )
Three months ended Year ended
December 31 December 31
2000 1999 2000 1999
Cash flows from operating
activities:
Net income (loss) for the period $12,777 $24,614 $42,684 $46,385
Adjustments to reconcile net income
(loss) to net cash
provided by operating activities:
Depreciation and amortization 18,880 18,583 75,455 71,990
Discount on senior secured
debentures 10,467 9,342 40,518 36,145
Amortization of deferred
financing costs 781 1,561 14,307 6,166
Other non cash item 2,555 (18,478) 22,278 (22,833)
Changes in working capital 5,106 13,720 (30,128) (45,768)
Total adjustments 37,789 24,728 122,430 45,700
Net cash provided by operating
activities 50,566 49,342 165,114 92,085
Cash flows from investing
activities:
Acquisitions of property and
equipment - net (41,388) (12,357) (65,349) (49,412)
Sale of equipment 308 1,485 6,676 25,066
Net cash used in investing
activities (41,080) (10,872) (58,673) (24,346)
Cash flows from financing
activities:
Proceeds from commercial paper (690) 0 280,662 0
Payment of revolving credit
facility - net (103) 57,000 (84,998) 67,000
Principal payments under capital
lease obligations (898) (897) (10,242) (10,617)
Principal payment of senior
secured credit facility 0 (89,613) (269,775) (122,225)
Net cash used in financing
activities (1,691) (33,510) (84,353) (65,842)
Increase in cash and cash
equivalents 7,795 4,960 22,088 1,897
Cash and cash equivalents
Beginning of period 25,243 5,990 10,950 9,053
End of period $33,038 $10,950 $33,038 $10,950
The consolidated financial statements were prepared in accordance with
International Accounting Standards.
This report contains historical information and forward-looking statements
regarding the current belief or expectations of the company concerning the
company's future financial condition and results of operations. The words
"believe", "expect" and "anticipate" and similar expressions identify some of
these forward-looking statements. Statements looking forward in time involve
risks, uncertainties and other factors which may cause the actual results,
performance or achievements of the company to be materially different from any
future results, performance or achievements expressed or implied by such
forward-looking statements. Such factors include, among others, global, U.S.
and Mexican economic and social conditions; the effect of the North American
Free Trade Agreement ("NAFTA") on the level of U.S.-Mexico trade; the
company's ability to convert customers from using trucking services to rail
transport services; competition from other rail carriers and trucking
companies in Mexico; the company's ability to control expenses; and the effect
of the company's employee training, technological improvements and capital
expenditures on labor productivity, operating efficiencies and service
reliability. Readers are cautioned not to place undue reliance on such
forward-looking statements, which speak only as of their respective dates.
The company undertakes no obligation to update publicly or revise any forward-
looking statements, whether as a result of new information, future events or
otherwise. For further information, reference should be made to the company's
filings with the Securities and Exchange Commission, including the company's
most recent Annual Report on Form 20-F.
