SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13A-16
OR 15D-16 OF THE SECURITIES EXCHANGE ACT OF 1934
For the month of March, 2007
Durango Corporation
(f/k/a Grupo Industrial Durango, S.A. de C.V.)
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(Translation of registrant's name into English)
Torre Corporativa Durango, Potasio 150, Cuidad Industrial,
Durango, Durango, Mexico
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(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 thereby 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 12g3-2(b): 82-_____________.
CORPORACION DURANGO, S.A.B. DE C.V. 10.8116
INDIVIDUAL BALANCE SHEETS
AS OF DECEMBER 31, 2005 AND DECEMBER 31, 2006 (UNAUDITED)
EXPRESSED IN TERMS OF THE PURCHASING POWER OF MEXICAN PESOS
AS OF DECEMBER 31, 2006
(Stated in thousands of Pesos and Dollars)
US$ DLLS.
December 31, Dec 31, Dec 31,
2005 2006 2006
ASSETS
CURRENT ASSETS:
Cash and cash equivalents ........................$ 303,065$ 34,267 3,169
Due from related parties ......................... 100,914 48,399 4,477
Taxes recoverable and other assets ............... 44,589 15,623 1,445
Total current assets ................... 448,568 98,289 9,091
LONG-TERM RELATED PARTIES .......................... 9,011,346 1,563,866 144,647
INVESTMENT IN SUBSIDIARIES ......................... 3,566,354 11,779,300 1,089,506
OTHER ASSETS, net .................................. 32,449 36,446 3,371
Total assets ..........................$ 13,058,717$ 13,477,901 1,246,615
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Bank loans and current portion of long-term debt . 154,203 150,670 13,936
Interest payable ................................. 241 485 45
Trade accounts payable ........................... 905 3,801 352
Accrued liabilities .............................. 216,197 208,010 19,240
Total current liabilities ............. 371,546 362,966 33,572
LONG-TERM DEBT ..................................... 5,866,230 5,493,731 508,133
LONG-TERM RELATED PARTIES .......................... 1,976,485 2,672,614 247,199
Total long term liabilities ............ 7,842,715 8,166,345 755,332
Total liabilities ..................... 8,214,261 8,529,311 788,904
STOCKHOLDERS' EQUITY:
Total stockholders' equity ............. 4,844,456 4,948,590 457,711
Total liabilities and stockholders' equi$ 13,058,717$ 13,477,901 1,246,615
Exchange rate: $ 10.8116
CORPORACION DURANGO, S.A.B. DE C.V.
INDIVIDUAL STATEMENT OF CHANGES IN FINANCIAL POSITION (UNAUDITED)
EXPRESSED IN TERMS OF THE PURCHASING POWER OF MEXICAN PESOS
AS OF DECEMBER 31, 2006
(Stated in thousands of Pesos and Dollars)
*
Full Year Acum. Dec Acum. Dec
2005 2006 US$ 2006
OPERATING ACTIVITIES:
Net income (loss) ..............................................$ 186,431$ 151,412US 14,005
Add (deduct)- Charges (credits) to income which do
not require (generate) resources:
Depreciation and amortization ........................... 10,697 0 0
Loss (Gain) in subsidiaries ............................. 919,771 -116,070 -10,736
Deferred income taxes ................................... 329,908 16,479 1,524
Other.................................................... 0 0 0
Total items which do not require cash.................... 1,260,376 -99,591 -9,211
Net resources generated from income .......................... 1,446,807 51,821 4,793
Changes in operating assets and liabilities:
Decrease (Increase) in inventories ......................... 4,467 0 0
Decrease (Increase) in current assets ...................... 37,536 28,966 2,679
Decrease (increase) in account receivables, net ............ -54,452 52,515 4,857
(Decrease) increase in accounts payable and
accrued liabilities ...................................... 4,680 -5,047 -467
Resources generated by operating activities .................. 1,439,038 128,255 11,863
FINANCING ACTIVITIES:
Increase (Decrease) in bank loans and others ............ -4,239,358 7,740,151 715,912
Increase (Decrease) in capital .......................... 302,501 0 0
Gain on shares acquisition .............................. 3,094,160 19,435 1,798
Net resources generated from financing activities ............ -842,697 7,759,586 717,709
INVESTMENT ACTIVITIES:
Acquisition and sale of property, plant and equipment.... 412,197 0 0
Investment in subsidiaries .............................. -712,983 -8,156,639 -754,434
Net resources applied to investing activities ................ -300,786 -8,156,639 -754,434
INCREASE IN CASH AND CASH EQUIVALENTS .......................... 295,555 -268,798 -24,862
CASH AND CASH EQUIVALENTS AT BEGINNING OF THE PERIOD............ 7,510 303,065 28,031
CASH & CASH EQUIVALENTS AT END OF THE PERIOD ...................$ 303,065$ 34,267US 3,169
* The exchange rate of 10.9935 was used for translation purposes.
CORPORACION DURANGO, S.A.B. DE C.V.
INDIVIDUAL STATEMENTS OF INCOME (UNAUDITED)
EXPRESSED IN TERMS OF THE PURCHASING POWER OF MEXICAN PESOS
AS OF DECEMBER 31, 2006
Thousands of Pesos Thousands of Dollars
4Q 4Q 4Q 4Q
2005 2006 Var 2005 2006 Var
Gain (Loss) in subsidiaries .............$ 104,166$ 224,492 116% 9,412 20,763 121%
Selling and Administrative expenses ..... 2,262 1,935 -14% 204 179 -12%
Operating income ................... 101,904 222,557 118% 9,208 20,584 124%
FINANCIAL EXPENSE:
Interest expense ........................ 155,961 189,930 22% 14,095 17,567 25%
Interest income ......................... -306,498 -214,004 -30% -27,700 -19,794 -29%
Exchange (gain) loss, net ............... -6,029 -1,313 -78% -545 -121 -78%
Gain on monetary position ............... -1,192 19,817 N/A -108 1,833 N/A
Total financial expense ............... -157,758 -5,570 -96% -14,258 -515 -96%
OTHER INCOME (EXPENSES):
Other income (expense), net ............. -102,063 -26,209 -74% -9,224 -2,424 -74%
Total other income (expense) .......... -102,063 -26,209 -74% -9,224 -2,424 -74%
Income (loss) before income and asset t 157,599 201,918 28% 14,242 18,675 31%
Provision for deferred income taxes ..... 51,658 -9,695 N/A 4,669 -897 N/A
Net income ..............................$ 105,941$ 211,613 100% 9,573 19,572 104%
CORPORACION DURANGO, S.A.B. DE C.V.
INDIVIDUAL STATEMENTS OF INCOME (UNAUDITED)
EXPRESSED IN TERMS OF THE PURCHASING POWER OF MEXICAN PESOS
AS OF DECEMBER 31, 2006
Thousands of Pesos Thousands of Dollars
Ac Ac Ac Ac
2005 2006 Var 2005 2006 Var
Gain (Loss) in subsidiaries .............$ -919,772$ 116,070 N/A -76,036 11,695 N/A
Selling and Administrative expenses ..... 8,576 7,908 -8% 751 707 -6%
Operating income ................... -928,348 108,162 -112% -76,787 10,988 -114%
FINANCIAL EXPENSE:
Interest expense ........................ 614,057 752,714 23% 53,678 67,152 25%
Interest income ......................... -2,205,584 -841,146 -62% -189,062 -75,048 -60%
Exchange (gain) loss, net ............... -29,756 -888 -97% -2,604 -86 -97%
Gain on monetary position ............... -5,121 51,042 N/A -340 4,635 N/A
Total financial expense ............... -1,626,40 -38,278 -98% -138,328 -3,347 -98%
OTHER INCOME (EXPENSES):
Other income (expense), net ............. -181,717 21,451 N/A -15,904 1,831 N/A
Total other income (expense) .......... -181,717 21,451 N/A -15,904 1,831 N/A
Income (loss) before income and asset t 516,339 167,891 -67% 45,637 16,166 -65%
Provision for deferred income taxes ..... 329,908 16,479 -95% 28,757 1,430 -95%
Net income ..............................$ 186,431$ 151,412 -19% 16,880 14,736 -13%
CORPORACION DURANGO, S.A.B. DE C.V.
COMPLEMENTARY NOTES TO THE FINANCIAL INFORMATION
SUMMARY OF SIGNIFICANT ACCOUNTING AND FINANCIAL POLICIES:
FOLLOWING IS A SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES FOLLOWED BY THE
COMPANY IN THE PREPARATION OF THE UNCONSOLIDATED FINANCIAL STATEMENTS.
1.1 BASIS OF PRESENTATION:
THE UNCONSOLIDATED FINANCIAL STATEMENTS HAVE BEEN PREPARED IN ACCORDANCE WITH
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES IN MEXICO (MEXICAN GAAP) ISSUED BY
THE MEXICAN INSTITUTE OF PUBLIC ACCOUNTANTS (MIPA).
AS OF JUNE 1, 2004, THE MEXICAN BOARD FOR RESEARCH AND DEVELOPMENT OF FINANCIAL
REPORTING STANDARDS, OR CINIF, ASSUMED THE RESPONSIBILITY OF ESTABLISHING
MEXICAN ACCOUNTING AND REPORTING STANDARDS. AS PART OF ITS RESPONSIBILITY,
AND AFTER DUE EXPOSURE IN 2004 AND 2005, THE CINIF ISSUED SEVERAL FINANCIAL
REPORTING STANDARDS (NORMAS DE INFORMACION FINANCIERA, OR NIFS) THAT BECAME
EFFECTIVE ON JANUARY 1, 2006.
THE PRINCIPAL OBJECTIVE OF THE CINIF IN ISSUING THE NIFS IS TO ACHIEVE GREATER
CONCURRENCE BETWEEN MEXICAN GAAP AND INTERNATIONAL FINANCIAL REPORTING
STANDARDS (IFRSS).
THE STRUCTURE OF THE NIFS IS AS FOLLOWS:
- NEW BULLETINS AND INTERPRETATIONS TO THE BULLETINS ISSUED BY CINIF.
- EXISTING BULLETINS ISSUED BY THE ACCOUNTING PRINCIPLES BOARD OF THE MEXICAN
INSTITUTE OF PUBLIC ACCOUNTANTS THAT HAVE NOT BEEN AMENDED, REPLACED OR
REPEALED BY THE NEW NIFS.
- IFRSS THAT ARE SUPPLEMENTARY GUIDANCE TO BE USED WHEN MEXICAN GAAP DOES NOT
PROVIDE PRIMARY GUIDANCE.
THE CIRCULARS ISSUED BY THE ACCOUNTING PRINCIPLES BOARD WILL CONTINUE TO HAVE
THE STATUS OF RECOMMENDATIONS AND WILL BE PART OF THE NIFS UNTIL SUCH TIME AS
THEY ARE REPLACED OR REPEALED BY NIFS.
THE NIFS ISSUED TO DATE ARE NOT EXPECTED TO HAVE A SIGNIFICANT EFFECT ON
FINANCIAL INFORMATION REPORTING. THEY ARE THE FOLLOWING:
NIF A-1 "FINANCIAL INFORMATION STANDARDS STRUCTURE".
NIF A-2 "BASIC PRINCIPLES".
NIF A-3 "USERS REQUIREMENTS AND FINANCIAL STATEMENTS OBJECTIVES".
NIF A-4 "FINANCIAL STATEMENTS QUALITATIVE CHARACTERISTICS".
NIF A-5 "FINANCIAL STATEMENTS BASIC ELEMENTS".
NIF A-6 "RECOGNITION AND VALUATION".
NIF A-7 "PRESENTATION AND DISCLOSURE".
NIF A-8 "SUPPLEMENTARY STANDARDS TO MEXICAN GAAP".
NIF B-1 "ACCOUNTING CHANGES AND ERROR CORRECTIONS".
1.2 BASIS FOR COMPARISSON EFFECTS IN THE FINANCIAL STATEMENTS:
THE UNCONSOLIDATED FINANCIAL STATEMENTS HAVE BEEN PREPARED IN ACCORDANCE WITH
THE NIFS AND REFLECT THE PURCHASING POWER OF THE MEXICAN PESO AS OF THE MOST
RECENT REPORTING DATE. FOR COMPARISON PURPOSES, UNCONSOLIDATED FINANCIAL
STATEMENTS OF PRIOR YEARS HAVE ALSO BEEN RESTATED TO REFLECT IDENTICAL
PURCHASING POWER, USING FACTORS DERIVED FROM CHANGES IN THE NATIONAL CONSUMER
PRODUCTS INDEX (NCPI) ISSUED BY BANCO DE MEXICO.
1.3 INVESTMENTS IN SUBSIDIARIES:
INVESTMENTS IN AFFILIATED AND ASSOCIATED COMPANIES STOCKS ARE VALUED BY THE
PARTICIPATION METHOD. THE ACQUISITION COST OF THE STOCKS IS MODIFIED BY THE
PROPORTIONAL PART OF THE CHANGES IN THE CAPITAL STOCK OF AFFILIATED AND
ASSOCIATED COMPANIES AFTER THE ACQUISITION DATE. PARTICIPATION OF THE COMPANY
IN THE AFFILIATED AND ASSOCIATED COMPANIES' INCOME IS PRESENTED SEPARATELY
IN THE STATEMENTS OF OPERATIONS.
1.4 FINANCIAL INSTRUMENTS:
FINANCIAL INSTRUMENTS HELD FOR TRADING OR AVAILABLE FOR SALE ARE VALUED AT
FAIR VALUE (WHICH IS SIMILAR TO MARKET VALUE) WITH GAINS OR LOSSES RECOGNIZED
IN THE STATEMENT OF OPERATIONS. FAIR VALUE IS THE AMOUNT FOR WHICH A
FINANCIAL ASSET CAN BE EXCHANGED OR A FINANCIAL LIABILITY CAN BE PAID IN AN
ARM'S-LENGTH TRANSACTION BETWEEN INTERESTED AND WILLING PARTIES.
1.5 RIGHTS AND LIABILITIES VALUATION IN FOREIGN CURRENCY:
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 BALANCE SHEET DATE. DIFFERENCES DUE TO EXCHANGE
RATE FLUCTUATIONS FROM TRANSACTIONS AND PAYMENT DATES OR VALUATIONS AS OF THE
MOST RECENT BALANCE SHEET DATE ARE RECOGNIZED IN INCOME. EXCHANGE RATE AS OF
DECEMBER 31st, 2006 WAS $10.8116.
STOCK INVESTMENT:
THE INVESTMENT IN SUBSIDIARIES' STOCK IS PRESENTED VALUED UNDER THE EQUITY
METHOD, TO FULFILL THE LEGAL DISPOSITIONS REQUIRING THE PRESENTATION OF
"CODUSA'S" FINANCIAL STATEMENTS AS A LEGAL ENTITY. MOST SIGNIFICANT
SUBSIDIARIES ARE AS FOLLOWS:
GROUP (OR COMPANY) OWNERSHIP PERCENTAGE ACTIVITY
ADMINISTRACION CORPORATIVA DE 100% ADMINISTRATIVE SERVICES
DURANGO, S.A. DE C.V.
CARTONPACK, S.A. DE C.V. 95% MANUFACTURING OF CORRUGATED
BOXES
COMPANIA FORESTAL DE DURANGO, 100% ADMINISTRATIVE SERVICES
S.A. DE C.V.
COMPANIA PAPELERA DE ATENQUIQUE, 93% MANUFACTURING OF PAPER FOR
S.A. DE C.V. CORRUGATED BOXES
DURANGO INTERNACIONAL, S.A. DE C.V. 100% ADVISORY, ADMINISTRATIVE
AND ORGANIZATION SERVICES
DURANGO INTERNATIONAL, INC. 100% MANUFACTURING OF PAPER FOR
CORRUGATED BOXES AND
CORRUGATED BOXES
EMPAQUES DE CARTON TITAN, 100% MANUFACTURING OF CORRUGATED
S.A. DE C.V. BOXES AND MULTI-WALL SACKS
GRUPO PIPSAMEX, S.A. DE C.V. 100% MANUFACTURING OF NEWSPRINT
AND BOND PAPER
INDUSTRIAS CENTAURO, S.A. DE C.V. 84% MANUFACTURING OF PAPER FOR
CORRUGATED BOXES
PAPEL Y EMPAQUES TIZAYUCA, 100% MANUFACTURING OF PAPER FOR
S.A. DE C.V. CORRUGATED BOXES
PONDEROSA INDUSTRIAL DE MEXICO, 100% MANUFACTURING OF PLYWOOD
S.A. DE C.V.
PORTEADORES DE DURANGO, S.A. DE 100% HAULING FREIGHT
C.V.
STOCKHOLDERS EQUITY:
CAPITAL STOCK, STOCK SALE PREMIUM, STATUTORY LEGAL RESERVE AND RETAINED
EARNINGS, INCLUDE THE RESTATED EFFECT, ACCORDING WITH THE NATIONAL CONSUMER
PRICE INDEX (NCPI) FROM THE DATE THE CAPITAL WAS CONTRIBUTED AND FROM THE
YEAR THE RESULTS AND PREMIUMS WERE DETERMINED RESPECTIVELY. THE RESTATED
AMOUNTS REPRESENT THE REQUIRED AMOUNT TO MAINTAIN THE CONTRIBUTIONS AND
ACCUMULATED RESULTS IN CONSTANT PESOS AS OF DECEMBER 31st,2006.
FIXED AND VARIABLE EQUITY COMPONENTS:
AMOUNT NUMBER OF SHARES
FIXED PORTION 982,074 65,419,089
VARIABLE PORTION 678,873 45,222,022
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1,660,947 110,641,111
DEFERRED TAXES:
AS OF JANUARY 1st.,2000, WITH THE ISSUANCE OF BULLETIN D-4 ("DEFERRED TAXES"
THE COMPANY RECOGNIZED TO THAT DATE (JANUARY 1st.,2000) THE INITIAL EFFECT
OF DEFERRED TAXES DERIVED FROM TEMPORARY DIFFERENCES AS A GAIN OR A LOSS,IN
SUBSECUENT PERIODS THE COMPANY IS IN COMPLIANCE WITH THE BULLETIN.
IN ORDER TO RECOGNIZE THE DEFERRED INCOME TAX, THE HOLDING COMPANY AND ITS
SUBSIDIARIES USE THE INTEGRAL ASSETS AND LIABILITIES METHOD, WHICH
CALCULATES SUCH TAX, USING THE APPLICABLE STATUTORY TAX RATE TO THE
TEMPORARY DIFFERENCES BETWEEN BOOK AND TAX VALUES OF THE ASSETS AND
LIABILITIES AS OF THE END OF THE PERIOD.
INTERNAL CONTROL:
THE COMPANY HAS STARTED IMPLEMENTATION OF THE SARBANES OXLEY ACT WITH ADVISE
FROM EXPERT ADVISORS.
SIGNATURES
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. CORPORACION DURANGO, S.A. DE C.V.
Date: March 21, 2007 By /s/ Mayela Rincon de Velasco
--------------------------------
Name: Mayela Rincon de Velasco
Title: Chief Financial Officer