-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LKvbRIHp1d57zklF8B/Exl4D2NarTDAZo472cAFWibt6Pbj9QXmxb3fWKCyXg1Gs Kszh8rOvCOwsM1whvKu66g== 0000895345-04-000116.txt : 20040227 0000895345-04-000116.hdr.sgml : 20040227 20040226180053 ACCESSION NUMBER: 0000895345-04-000116 CONFORMED SUBMISSION TYPE: 424B3 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20040227 FILER: COMPANY DATA: COMPANY CONFORMED NAME: INNOVA S DE RL CENTRAL INDEX KEY: 0001044884 STANDARD INDUSTRIAL CLASSIFICATION: CABLE & OTHER PAY TELEVISION SERVICES [4841] IRS NUMBER: 000000000 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 424B3 SEC ACT: 1933 Act SEC FILE NUMBER: 333-110997 FILM NUMBER: 04631967 BUSINESS ADDRESS: STREET 1: INSURGENTES SUR 694 STREET 2: PISO 8 COL DEL VALLE 03100 CITY: MEXICO STATE: O5 BUSINESS PHONE: 5254484000 424B3 1 y91982.txt 424B3 PROSPECTUS SUPPLEMENT (TO PROSPECTUS DATED FEBRUARY 13, 2004) Filed pursuant to Rule 424(b)(3) Registration No. 333-110997 [SKY LOGO] INNOVA, S. DE R.L. DE C.V. Offer to exchange all of our outstanding unregistered U.S.$300,000,000 9.375% Senior Notes due 2013 for U.S.$300,000,000 9.375% Senior Notes due 2013 which have been registered under the Securities Act of 1933 This prospectus supplement supplements and amends our prospectus, dated February 13, 2003, relating to the exchange offer for our 9.375% Senior Notes due 2013. Attached hereto and incorporated by reference herein are the Reports on Form 6-K for Innova, S. de R.L. de C.V. for the month of February, 2004, which we furnished to the U.S. Securities and Exchange Commission on February 20, 2004 and February 25, 2004. All information disclosed in these Reports furnished on Form 6-K, except for the information regarding EBITDA, EBIT and EBITDA margins, shall be incorporated by reference into the Registration Statement on Form F-4, as amended, filed with the Securities and Exchange Commission on December 8, 2003 by Innova, S. de R.L. de C.V. Any statement contained in the prospectus shall be deemed to be modified or superseded to the extent that information in this prospectus supplement modifies or supersedes such statement. Any statement that is modified or superseded shall not be deemed to constitute a part of the prospectus except as modified or superseded by this prospectus supplement. This prospectus supplement should be read in conjunction with, and may not be delivered or utilized without, the prospectus. This prospectus supplement is qualified by reference to the prospectus except to the extent that information herein contained supersedes the information contained in the prospectus. Capitalized terms used and not defined herein shall have the meanings given to them in the prospectus. YOU SHOULD CAREFULLY REVIEW "RISK FACTORS" BEGINNING ON PAGE 8 OF THE PROSPECTUS. THE INFORMATION CONTAINED IN THIS PROSPECTUS SUPPLEMENT IS EXCLUSIVELY THE RESPONSIBILITY OF INNOVA AND DOES NOT REQUIRE AUTHORIZATION BY THE COMISION NACIONAL BANCARIA Y DE VALORES, THE MEXICAN NATIONAL BANKING AND SECURITIES COMMISSION, OR THE CNBV. THE REGISTRATION WITH THE SPECIAL SECTION OF THE SECURITIES NATIONAL REGISTRY (SECCION ESPECIAL DEL REGISTRO NACIONAL DE VALORES), MAINTAINED BY THE CNBV, DOES NOT IMPLY A CERTIFICATION OF THE INVESTMENT QUALITY OF THE NOTES OR INNOVA'S SOLVENCY. THE NOTES HAVE NOT BEEN REGISTERED WITH THE SECURITIES SECTION OF THE SECURITIES NATIONAL REGISTRY (SECCION DE VALORES DEL REGISTRO NACIONAL DE VALORES) AND THEREFORE, THE NOTES ARE NOT SUBJECT TO A PUBLIC OFFERING NOR INTERMEDIATION IN MEXICO. THE ACQUISITION OF THE NOTES BY ANY INVESTOR OF MEXICAN NATIONALITY WILL BE MADE UNDER ITS OWN RESPONSIBILITY. NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS SUPPLEMENT. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. The date of this prospectus supplement is February 26, 2004. UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 6-K REPORT OF FOREIGN ISSUER PURSUANT TO RULES 13a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934 For the month of February, 2004 Commission File Number: 333-7484 INNOVA, S. de R.L. de C.V. ---------------------------------------------------- (Translation of registrant's name into English) Insurgentes Sur 694 Piso 8, Col. Del Valle 03100 Mexico, D.F. Mexico ----------------------------------------------------------------------- (Address of principal executive offices) (Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.) Form 20-F X Form 40-F ------- ------ (Indicate by check mark whether the registrant by furnishing the information contained in this Form is also furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.) Yes No X ------- ------ (If "Yes" is marked indicate below the file number assigned to the registrant in connection with Rule 12g-3-2(b): 82____.) This Report furnished on Form 6-K shall be incorporated by reference into the Registration Statement on Form F-4, as amended, filed with the Securities and Exchange Commission on December 8, 2003 by Innova, S. de R.L. de C.V. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. INNOVA, S. de R.L. de C.V. ---------------------------------- (Registrant) Dated: February 20, 2004 By: /s/ Carlos Ferreiro Rivas ------------------------------- Name: Carlos Ferreiro Rivas Title: Chief Financial Officer [SKY LOGO] FOR IMMEDIATE RELEASE - --------------------- INNOVA, S. de R. L. de C.V. Appointment of Chief Executive Officer Mexico City, February 20th, 2004. INNOVA, S. DE R.L. DE C.V., the provider of direct-to-home (DTH) satellite television services under the SKY brand name and the pay-TV market leader in Mexico as measured by the number of subscribers, announced the appointment of Mr. Alexandre Moreira Penna as Chief Executive Officer of the Company, effective March 1st, 2004. He will replace outgoing Chief Executive Officer Mr. Pablo Vazquez Oria who has decided to participate in other projects. We would like to express our thanks to Mr. Vazquez for the Company's outstanding operational and financial achievements under his leadership, since he joined the Company in May 2002. Mr. Penna has a strong experience in the Media, Pay TV and Telecommunications industries. Prior to joining Innova, Mr. Penna held for over two years the position of Vice President of Corporate Finance of Grupo Televisa. Mr. Penna will report to Innova's Board of Directors. INNOVA, S. DE R.L. DE C.V., is a joint venture indirectly owned by Grupo Televisa, S.A., a Mexican corporation ("Televisa"), The News Corporation Limited, an Australian Corporation ("News Corporation"), and Liberty Media International Inc., a Delaware corporation ("Liberty Media"), (formerly known as Tele-Communications International, Inc.). For more information, please visit www.sky.com.mx. GRUPO TELEVISA S.A., is the largest media company in the Spanish-speaking world, and a major player in the international entertainment business. It has interests in television production and broadcasting, programming for pay television, international distribution of television programming, direct-to-home satellite services, publishing and publishing distribution, cable television, radio production and broadcasting, professional sports and show business promotions, feature film production and distribution, paging services and the operation of a horizontal Internet portal. Grupo Televisa also has an unconsolidated equity stake in Univision, the leading Spanish-language television company in the United States. For more information, please visit www.televisa.com. NEWS CORPORATION, is a diversified international media and entertainment company with operations in seven industry segments: filmed entertainment; television; cable network programming; magazines and inserts; newspapers; book publishing; and other. The activities of News Corporation are conducted principally in the United States, the United Kingdom, Australia, Asia and the Pacific Basin. For more information, please visit www.newscorp.com. LIBERTY MEDIA INTERNATIONAL, owns and operates broadband cable television and telephony distribution networks and is a provider of diversified programming services in Europe, Latin America and Asia. For more information, please visit www.libertymedia.com. Contact: CARLOS FERREIRO Chief Financial Officer Innova, S. de R.L. de C.V. Insurgentes Sur No.694 Col. del Valle Mexico City, 03100 (5255) 5448-4131 cferreiro@sky.com.mx UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 6-K REPORT OF FOREIGN ISSUER PURSUANT TO RULES 13a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934 For the month of February, 2004 Commission File Number: 333-7484 INNOVA, S. de R.L. de C.V. --------------------------------------------- (Translation of registrant's name into English) Insurgentes Sur 694 Piso 8, Col. Del Valle 03100 Mexico, D.F. Mexico -------------------------------------------------------------------------- (Address of principal executive offices) (Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.) Form 20-F X Form 40-F ----- ----- (Indicate by check mark whether the registrant by furnishing the information contained in this Form is also furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.) Yes No X ----- ----- (If "Yes" is marked indicate below the file number assigned to the registrant in connection with Rule 12g-3-2(b): 82___.) All information disclosed in this Report furnished on Form 6-K, except for the information regarding EBITDA, EBIT and EBITDA margins, shall be incorporated by reference into the Registration Statement on Form F-4, as amended, filed with the Securities and Exchange Commission on December 8, 2003 by Innova, S. de R.L. de C.V. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. INNOVA, S. de R.L. de C.V. ---------------------------------- (Registrant) Dated: February 25, 2004 By: /s/ Carlos Ferreiro Rivas ------------------------------- Name: Carlos Ferreiro Rivas Title: Chief Financial Officer [LOGO - SKY] FOR IMMEDIATE RELEASE - --------------------- INNOVA, S. DE R.L. DE C.V. REPORTS FOURTH QUARTER AND FULL YEAR 2003 RESULTS - SUBSCRIBER BASE GROWS TO 856,600 - - NET REVENUES INCREASED 7.0% - - EBITDA INCREASED 22.7% TO PS. 1,191.5 MM - - EBITDA MARGIN INCREASED TO 31.2% - - NO SHAREHOLDER FUNDING WAS REQUIRED DURING THE YEAR - - ----------------------------------------------------------------------------- o The number of gross active SUBSCRIBERS increased 16.1% to 856,600 as of December 31, 2003 from 737,800 at the end of the previous year. o REVENUES for the whole year 2003 increased 7.0% to Ps. 3,820.7 million from Ps. 3,569.4 million for the prior year. o EBITDA for the whole year 2003 increased 22.7% to Ps. 1,191.5 million from Ps. 971.2 million for the prior year. o EBITDA MARGIN increased to 31.2% for the whole year 2003 from 27.2% for the prior year. o Innova did not require FUNDING from its shareholders during 2003. - ----------------------------------------------------------------------------- Mexico City, February 24, 2004. INNOVA, S. DE R.L. DE C.V., the provider of direct-to-home (DTH) satellite television services under the SKY brand name and the pay-TV market leader in Mexico as measured by the number of subscribers, announced its unaudited consolidated results for the fourth quarter and full year ended December 31, 2003. The attached results have been prepared in accordance with Mexican GAAP in constant Mexican pesos in purchasing power as of December 31, 2003. SUBSCRIBER BASE The number of gross active subscribers increased - --------------- to 856,600, including 48,500 commercial subscribers, as of December 31, 2003; this represents a 16.1% increase from 737,800, including 35,800 commercial subscribers as of December 31, 2002; or an increase of approximately 118,800 gross active subscribers. We believe the increase in the subscriber base was primarily due to the sustained growth in customer activations in response to the high quality and variety of our programming content, exclusive events, our aggressive marketing campaigns and the high quality of our customer service. The increase in subscriber base was partially offset by subscriber cancellations during the last quarter, primarily due to the continuing weakness in the Mexican economy. Nevertheless, we continue to experience a decline in the rate of subscriber cancellations as compared to the previous year. PROGRAMMING CONTENT During the fourth quarter of 2003, Sky continued - ------------------- to enhance its programming content, by adding the following offerings: o Big Brother VIP2, a 64-day live reality show broadcast on a pay-TV exclusive basis, 24 hours a day, with fourteen well-known media, sports and entertainment participants; o Launching of Disney Channel, previously an exclusive DTH channel of DirecTV Mexico; o Launching of 5 additional HBO channels (HBO Plus West, HBO Family East and West and MaxPrime East and West); o New basic channels as Multicinema and Multipremiere (movies) and ZAZ (kids); o The pay TV-exclusive broadcast of certain matches of the Mexican 2003 Opening Soccer Tournament; o US PGA and Champions Golf Tournaments, and o Exclusive broadcast of certain boxing fights. During 2004, Innova plans to continue offering the highest quality content in the country by offering: o Big Brother VIP3, a successful live reality show broadcast on a pay-TV exclusive basis, 24 hours a day; o The continued pay-TV exclusive broadcast of certain soccer matches of the Mexican Soccer Tournament; o The pay-TV broadcast of certain soccer matches of the "Copa Libertadores" Tournament; o The pay TV-exclusive transmission of certain matches of the Mexican Baseball league o The US Open and Wimbledon Tennis Tournaments on exclusive basis; o The US PGA Golf Tournament, and o Boxing fights and special events. PRICE AND PROMOTIONS Innova's current installation fee is Ps. 1,099. - -------------------- However, residential subscribers who agree to pay the monthly programming fee via automatic charge to a credit card, pay only Ps. 199. We continue our efforts to improve the subscriber base quality by, among other things, encouraging new and current subscribers to pay their monthly programming services through automatic charge to a credit card. 10% EXCISE TAX On October 30, 2003, the Federal Executive Branch - -------------- approved the President of Mexico's tax holiday equal to 100% of the 10% excise tax on telecommunications, effective November 1, 2003 and applicable only to the tax triggered from this date and going forward. Therefore, during the months of November and December of 2003 we recorded the amount we saved by not paying the 10% excise tax as extraordinary income in our income statement. We continue proceedings to recover the approximately U.S.$18.0 million and U.S.$16.0 million that we have already paid in this tax for 2002 and for 2003, respectively; however, we cannot assure you that we will be able to recover these amounts, even if we obtain a favorable final resolution for our amparo proceedings for 2003 as we did for the year 2002. RECENT DEVELOPMENTS The 10% excise tax on telecommunications was - ------------ definitively eliminated as of January 1st, 2004. From this date and going forward we will not have to pay this excise tax; therefore, we will be able to lower our overall tax exposure and retain a higher proportion of our revenues, without any modification in prices to our subscribers. On February 13th, 2004, we entered into two separate derivative transactions denominated "coupon swap" agreements to hedge a portion of our US dollar foreign exchange exposure resulting from the issuance of our US$300 million 9.375% senior notes that mature in 2013. Under the transactions, we will receive semiannual payments calculated based on an aggregate notional amount of US$300 million at an annual rate of 9.375%, and we will make monthly payments calculated based on an aggregate notional amount of Ps. 3,282.225 million at an annual rate of 10.25%. The transactions, both of which terminate in September 2008, will reduce our foreign exchange exposure on 10 interest coupon payments on the senior notes we issued in September 2003. We believe these transactions considerably reduce our foreign exchange exposure at a reasonable cost. FINANCIAL REVIEW - ---------------- FINANCIAL HIGHLIGHTS THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2003 AND 2002 STATEMENTS PREPARED UNDER MEXICAN GAAP (UNAUDITED) MILLION OF CONSTANT MEXICAN PESOS AS OF DECEMBER 31, 2003 THREE MONTHS ENDED DECEMBER 31, ------------------------------------------------- 2003 % Margin 2002 % Margin VAR % Net Revenues 999 100 865 100 134 15 Cost of Sales 309 31 275 32 34 12 ----- ----- ----- Gross Profit 690 69 590 68 100 17 Selling 205 21 202 23 3 1 Operations 127 13 107 12 20 19 Administrative 38 4 29 3 9 31 ----- ----- ----- Total Expenses 370 37 338 39 32 9 ----- ----- ----- EBITDA (1) 320 32 252 29 68 27 EBIT (2) 122 12 21 2 101 481 TWELVE MONTHS ENDED DECEMBER 31, 2003 % Margin 2002 % Margin VAR % Net Revenues 3,821 100 3,569 100 252 7 Cost of Sales 1,180 31 1,105 31 75 7 ----- ----- ----- Gross Profit 2,641 69 2,464 69 177 7 Selling 848 22 866 24 (18) (2) Operations 476 12 501 14 (25) (5) Administrative 125 3 126 4 (1) (1) ----- ----- ----- Total Expenses 1,449 38 1,493 42 (44) (3) ----- ----- ----- EBITDA (1) 1,192 31 971 27 221 23 EBIT (2) 383 10 9 0 374 n/a (1) EBITDA is defined as operating income before depreciation and amortization. (2) EBIT is defined as operating income before integral cost of financing and taxes. NET REVENUES Net revenues of Ps. 999.1 million for the three months ended December 31, 2003, increased by Ps. 134.2 million or 15.5% as compared to the same period of the prior year, primarily due to the growth of our subscriber base and additional pay-per-view revenues. Net revenues of Ps. 3,820.7 million for the twelve months ended December 31, 2003, increased by Ps. 251.4 million or 7.0% as compared to the prior year, mainly due to the growth of our subscriber base. COST OF SERVICES AND SALES Cost of services and sales increased by Ps. 34.0 million or 12.4% to Ps. 308.7 million for the three months ended December 31, 2003 as compared to the same period of the prior year; primarily due to the costs associated with our bigger subscriber base, higher subscriber activations and related costs, as well as higher costs resulting from the devaluation of the peso against the US dollar, as compared to the prior year. Cost of services and sales increased by Ps. 75.2 million or 6.8% to Ps. 1,180.2 million for the twelve months ended December 31, 2003, as compared to the prior year. This increase was due to the same reasons explained above. OPERATING EXPENSES Total expenses of Ps. 370.5 million for the three months ended December 31, 2003, increased by Ps. 32.2 million or 9.5% as compared to the same period of the prior year, primarily due to higher promotion and commission expenses as a result of the increase on subscriber activations during this period as compared to previous year. Total expenses of Ps. 1,449.0 million for the twelve months ended December 31, 2003, declined by Ps. 44.1 million or 3.0%, as compared to the prior year, primarily due to lower cost of free special events, lower cost of reactivation and recovery of IRDs and lower cost of headcount and administrative expenses. EBITDA EBITDA of Ps. 320.0 million for the three months ended December 31, 2003, improved by Ps. 68.0 million or 27.0%, as compared to the same period of 2002, primarily due to higher revenues, partially offset by higher cost of services and sales and operating expenses, as described above. As a result, EBITDA margin increased from 29.1% to 32.0% as compared to the fourth quarter of 2002. EBITDA of Ps. 1,191.5 million for the twelve months ended December 31, 2003, improved by Ps. 220.3 million or 22.70%, as compared to the prior year due to higher revenues and lower operating expenses, partially offset by higher cost of services and sales. As a result, EBITDA margin increased from 27.2% in 2002, to 31.2% in 2003. EBIT OPERATING INCOME EBIT improved by Ps. 101.0 million or 484.5% to Ps. 121.9 million in the three months ended December 31, 2003, as compared to Ps. 20.9 million during the same period of 2002. As a result, EBIT margin increased to 12.2% in the fourth quarter of 2003 from 2.4% in the fourth quarter of 2002. EBIT improved by Ps. 373.5 million or 3973% to Ps. 382.9 million in the twelve months ended December 31, 2003, as compared to Ps. 9.4 million for the same period in the prior year. NET LOSS Innova reported a net loss of Ps. (194.6) million for the three months ended December 31, 2003, as compared to a net loss of Ps. (358.2) million in the same period of 2002. Innova's fourth quarter net loss was affected by various extraordinary items such as: expenses due to the call premium and anticipated amortization of our 2007 Senior Notes; increased savings because we were not required to pay the 10% excise tax after November 1, 2003; and, a lower foreign exchange loss of Ps. (110.0) million in this fourth quarter of 2003 as compared to a foreign exchange loss of Ps. (224.7) million during the fourth quarter of 2002. Innova reported a net loss of Ps. (798.6) million for the twelve months ended December 31, 2003, as compared to a net loss of Ps. (1,839.2) million for the same period in the prior year. Innova's lower foreign exchange loss in 2003 was primarily due to the lower depreciation of the Mexican peso versus the U.S. dollar of approximately 7.3% from December 31, 2002 to December 31, 2003 as compared to a depreciation of the Mexican peso versus the U.S. dollar of approximately 14.0% from December 31, 2001 to December 31, 2002. Additional devaluations of the peso will likely affect our liquidity and results of operations, considering our substantial U.S. dollar-denominated indebtedness, operating costs and expenses, while our revenues are primarily peso-denominated. Any decrease in the value of the peso against the U.S. dollar could cause us to incur foreign exchange losses, which would reduce our net income. FUNDING FROM SHAREHOLDERS Innova did not require any additional funding from - ------------ its shareholders during 2003. This was mainly due to positive cash flow from operations and the current balance of cash resources available. The Company has not required shareholder funding for seven straight quarters and expects to satisfy our liquidity needs during 2004 with our current balance of cash resources and additional cash flow from operations. INNOVA, S. DE R.L. DE C.V., is a joint venture indirectly owned by Grupo Televisa, S.A., a Mexican corporation ("Televisa"), The News Corporation Limited, an Australian Corporation ("News Corporation"), and Liberty Media International Inc., a Delaware corporation ("Liberty Media"), (formerly known as Tele-Communications International, Inc.). For more information, please visit www.sky.com.mx. GRUPO TELEVISA S.A., is the largest media company in the Spanish-speaking world, and a major player in the international entertainment business. It has interests in television production and broadcasting, programming for pay television, international distribution of television programming, direct-to-home satellite services, publishing and publishing distribution, cable television, radio production and broadcasting, professional sports and show business promotions, feature film production and distribution, and the operation of a horizontal Internet portal. Grupo Televisa also has an unconsolidated equity stake in Univision, the leading Spanish-language television company in the United States. For more information, please visit www.televisa.com. NEWS CORPORATION, is a diversified international media and entertainment company with operations in seven industry segments: filmed entertainment; television; cable network programming; magazines and inserts; newspapers; book publishing; and other. The activities of News Corporation are conducted principally in the United States, the United Kingdom, Australia, Asia and the Pacific Basin. For more information, please visit www.newscorp.com. LIBERTY MEDIA INTERNATIONAL, owns and operates broadband cable television and telephony distribution networks and is a provider of diversified programming services in Europe, Latin America and Asia. For more information, please visit www.libertymedia.com. This press release contains forward-looking statements regarding Innova's results and prospects. Actual results could differ materially from these statements. The forward-looking statements in this press release, including, but not limited to, statements regarding our future liquidity requirements should be read in conjunction with the factors described in "Item 3. Risk Factors" in the Company's Annual Report on Form 20-F, which among others, could cause actual results to differ materially from those contained in any oral statements made by authorized officers of the Company. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Contact: CARLOS FERREIRO Chief Financial Officer Innova, S. de R.L. de C.V. Insurgentes Sur No.694 Col. del Valle Mexico City, 03100 (5255) 5448-4131 cferreiro@sky.com.mx - -------------------- INNOVA, S. DE R.L. DE C.V. AND SUBSIDIARIES CONSOLIDATED INCOME STATEMENTS (Unaudited) FOR THE THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2003 AND 2002 STATEMENTS PREPARED UNDER MEXICAN GAAP (THOUSANDS OF MEXICAN PESOS IN PURCHASING POWER AS OF DECEMBER 31, 2003)
THREE MONTHS ENDED DECEMBER 31, TWELVE MONTHS ENDED DECEMBER 31, 2003 2002 2003 2002 ------------- --------------- ---------------- ----------------- NET REVENUES PS. 999,108 PS. 864,904 PS. 3,820,738 PS. 3,569,381 COST OF SERVICES AND SALES 308,650 274,699 1,180,215 1,105,022 ------------- --------------- ---------------- ----------------- GROSS PROFIT 690,458 590,205 2,640,523 2,464,359 ------------- --------------- ---------------- ----------------- OPERATING EXPENSES: Selling 204,713 201,705 848,358 865,866 Operations 127,486 107,209 475,665 500,945 Administrative 38,282 29,357 124,997 126,304 ------------- --------------- ---------------- ----------------- 370,481 338,271 1,449,020 1,493,115 ------------- --------------- ---------------- ----------------- EBITDA 319,977 251,934 1,191,503 971,244 DEPRECIATION AND AMORTIZATION 198,075 231,077 808,628 961,864 ------------- --------------- ---------------- ----------------- OPERATING INCOME - EBIT 121,902 20,857 382,875 9,380 ------------- --------------- ---------------- ----------------- INTEGRAL COST OF FINANCING: Interest expense 167,057 264,099 938,901 1,022,148 Interest income (2,224) (2,827) (15,171) (11,504) Foreign exchange loss - net 110,036 224,708 587,758 1,221,123 Gain from monetary position (100,561) (157,097) (315,295) (518,443) ------------- --------------- ---------------- ----------------- 174,308 328,883 1,196,193 1,713,324 ------------- --------------- ---------------- ----------------- Special Items & other expense - net 140,436 27,578 103,418 56,723 ------------- --------------- ---------------- ----------------- LOSS BEFORE TAXES (192,842) (335,604) (916,736) (1,760,667) Provision for (benefit from) income and assets tax 1,982 22,551 (117,050) 78,533 Minority interest (240) - (1,033) - ------------- --------------- ---------------- ----------------- NET LOSS PS. (194,584) PS. (358,155) PS. (798,653) PS. (1,839,200) ============= =============== ================ =================
INNOVA, S. DE R.L. DE C.V. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 2003 AND 2002 (UNAUDITED) Statements prepared under Mexican GAAP (Thousands of Mexican Pesos in purchasing power as of December 31, 2003) 2003 2002 ----------- ----------- ASSETS Cash and cash equivalents PS. 493,569 PS. 277,236 Trade accounts receivable 118,174 132,396 Value added tax credit 1,955 44,930 Spare parts 10,079 13,536 Prepaid expenses and other 140,536 176,555 ----------- ----------- TOTAL CURRENT ASSETS 764,313 644,653 PROPERTY AND EQUIPMENT - NET 1,381,315 1,597,363 PAS - 9 SATELLITE-NET 1,253,439 1,290,346 OTHER NON-CURRENT ASSETS - NET 67,920 107,965 ----------- ----------- TOTAL ASSETS PS. 3,466,987 PS. 3,640,327 =========== =========== LIABILITIES Trade accounts payable and accruals PS. 402,269 PS. 295,796 PanAmSat Pas-9 63,522 49,439 Due to affiliated companies and other related parties 416,702 450,656 Accrued interest 120,367 131,327 Accrued taxes 97,664 189,730 Deferred income - Pre-billed and pre-collected services 137,958 112,533 ----------- ----------- TOTAL CURRENT LIABILITIES 1,238,482 1,229,481 ----------- ----------- Senior Exchange Notes due 2013 3,367,500 - Senior Exchange Notes due 2007 987,800 4,080,039 Long-term loans from Stockholders - 3,371,743 Long-term interest on Stockholders loans - 709,590 Seniority premiums 1,641 1,310 PanAmSat Pas-9 1,404,871 1,428,749 ----------- ----------- TOTAL NON-CURRENT LIABILITIES 5,761,812 9,591,431 ----------- ----------- TOTAL LIABILITIES 7,000,294 10,820,912 ----------- ----------- STOCKHOLDERS' DEFICIT Capital stock 6,327,231 1,989,191 Accumulated loss (9,136,974) (7,297,774) Loss for the twelve-month period (798,653) (1,839,200) Excess from restatement- Inflationary effects on Balance Sheet 75,089 (32,802) ----------- ----------- TOTAL STOCKHOLDERS' DEFICIT (3,533,307) (7,180,585) ----------- ----------- TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT Ps. 3,466,987 Ps. 3,640,327 =========== =========== INNOVA, S. DE R.L. DE C.V. Insurgentes Sur 694, Piso 8 Colonia Del Valle 03100 Mexico, D.F., Mexico EXCHANGE AGENT, TRUSTEE, REGISTRAR, PAYING AGENT AND TRANSFER AGENT The Bank of New York Corporate Trust Operations Reorganization Unit 101 Barclay Street Floor 7 East New York, New York 10289 Attention: Giselle Guadalupe U.S.A. LUXEMBOURG PAYING AGENT, TRANSFER AGENT, AND LISTING AGENT The Bank of New York (Luxembourg), S.A. Aerogolf Centre 1A Hoehenhof L-1736, Senningerberg Luxembourg LEGAL ADVISORS TO INNOVA, S. DE R.L. DE C.V. AS TO UNITED STATES LAW: AS TO MEXICAN LAW: Fried, Frank, Harris, Shriver & Jacobson LLP Mijares, Angoitia, Cortes y Fuentes, S.C. One New York Plaza Montes Urales 505, Piso 3 New York, New York 10004 Colonia Lomas de Chapultepec U.S.A. 11000 Mexico, D.F., Mexico
AUDITORS OF INNOVA, S. DE R.L. DE C.V. PricewaterhouseCoopers, S.C. Mariano Escobedo 573 Colonia Rincon del Bosque 11580 Mexico, D.F., Mexico INNOVA, S. DE R.L. DE C.V. OFFER TO EXCHANGE ALL OF OUR OUTSTANDING $300,000,000 9.375% SENIOR NOTES DUE 2013 FOR $300,000,000 9.375% SENIOR NOTES DUE 2013 WHICH HAVE BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933 -------------------------------------------------- PROSPECTUS SUPPLEMENT --------------------------------------------------- You should rely only on the information contained or incorporated by reference in this prospectus supplement. We have not authorized anyone to provide you with information or represent anything contained in this prospectus supplement. You must not rely on any unauthorized information. This prospectus supplement does not offer to sell nor does it solicit to buy any exchange notes in any jurisdiction where it is unlawful. The information in this prospectus supplement is current as of February 26, 2004. DEALER PROSPECTUS DELIVERY OBLIGATION. Until June 15, 2004, or, if we extend the period of the exchange offer, for a period of 90 days following the consummation of the exchange offer, all dealers that effect transactions in these securities, whether or not participating in this offering, may be required to deliver a prospectus, along with this accompanying supplement. This is in addition to the dealers' obligation to deliver a prospectus and this accompanying supplement when acting as underwriters and with respect to their unsold allotments or subscriptions. -----END PRIVACY-ENHANCED MESSAGE-----