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 Aug, 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.
INDIVIDUAL BALANCE SHEETS
AS OF DECEMBER 31, 2006 AND JUNE 30, 2007 (UNAUDITED)
EXPRESSED IN TERMS OF THE PURCHASING POWER OF MEXICAN PESOS
AS OF JUNE 30, 2007
(Stated in thousands of Pesos and Dollars)
US$ DLLS.
December 31, Jun 30, Jun 30,
2006 2007 2007
ASSETS
CURRENT ASSETS:
Cash and cash equivalents ........................$ 23,591$ 229,654 21,275
Accounts receivable, net ......................... 15,177 7,911 733
Due from related parties ......................... 48,680 43,417 4,022
Other assets ..................................... 542 539 50
Prepaid expenses ................................. 0 2,038 189
Total current assets ................... 87,990 283,559 26,269
LONG-TERM RELATED PARTIES .......................... 1,572,936 0 0
INVESTMENT IN SUBSIDIARIES ......................... 11,692,117 12,128,430 1,123,565
OTHER ASSETS, net .................................. 43,924 26,330 2,439
Total assets ..........................$ 13,396,967$ 12,438,319 1,152,272
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Bank loans and current portion of long-term debt . 151,544 150,434 13,936
Interest payable ................................. 488 220 20
Trade accounts payable ........................... 3,715 594 55
Accrued liabilities .............................. 201,167 163,598 15,156
Total current liabilities ............. 356,914 314,846 29,167
LONG-TERM DEBT ..................................... 5,522,766 5,299,123 490,905
LONG-TERM RELATED PARTIES .......................... 2,688,115 1,794,704 166,259
Total long term liabilities ............ 8,210,881 7,093,827 657,164
Total liabilities ..................... 8,567,795 7,408,673 686,331
STOCKHOLDERS' EQUITY:
Total stockholders' equity ............. 4,829,172 5,029,646 465,941
Total liabilities and stockholders' equi$ 13,396,967$ 12,438,319 1,152,272
Exchange rate: $ 10.7946
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 JUNE 30, 2007
(Stated in thousands of Pesos and Dollars)
*
Full Year Acum. Jun Acum. Jun
2006 2007 US$ 2007
OPERATING ACTIVITIES:
Net income (loss) ..............................................$ -72,847$ 105,761US 9,798
Add (deduct)- Charges (credits) to income which do
not require (generate) resources:
Loss (Gain) in subsidiaries ............................. 115,992 -342,256 -31,706
Deferred income taxes ................................... 19,724 17,515 1,623
Other.................................................... 0 0 0
Total items which do not require cash.................... 135,716 -324,741 -30,084
Net resources generated from income .......................... 62,869 -218,980 -20,286
Changes in operating assets and liabilities:
Decrease (Increase) in current assets ...................... 29,671 -2,035 -189
Decrease (increase) in account receivables, net ............ 52,278 12,529 1,161
(Decrease) increase in accounts payable and
accrued liabilities ...................................... -13,234 -40,958 -3,794
Resources generated by operating activities .................. 131,584 -249,444 -23,108
FINANCING ACTIVITIES:
Increase (Decrease) in bank loans and others ............ 7,794,628 455,507 42,198
Gain on shares acquisition .............................. 6,808 0 0
Net resources generated from financing activities ............ 7,801,436 455,507 42,198
INVESTMENT ACTIVITIES:
Investment in subsidiaries .............................. -8,203,948 0 0
Increase in deferred assets ............................. -10,302 0 0
Net resources applied to investing activities ................ -8,214,250 0 0
INCREASE IN CASH AND CASH EQUIVALENTS .......................... -281,230 206,063 19,089
CASH AND CASH EQUIVALENTS AT BEGINNING OF THE PERIOD............ 304,821 23,591 2,185
CASH & CASH EQUIVALENTS AT END OF THE PERIOD ...................$ 23,591$ 229,654US 21,275
* The exchange rate of 10.7946 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 JUNE 30, 2007
Thousands of Pesos Thousands of Dollars
2Q 2Q 2Q 2Q
2006 2007 Var 2006 2007 Var
Gain (Loss) in subsidiaries .............$ -147,661$ 182,026 N/A -12,640 16,862 N/A
Selling and Administrative expenses ..... 1,909 1,195 -37% 163 111 -32%
Operating income ................... -149,570 180,831 N/A -12,803 16,751 N/A
Other income (expense), net ............. -4,622 -11,846 156% -394 -1,097 178%
INTEGRAL RESULT OF FINANCING:
Interest expense ........................ 194,152 203,123 5% 16,565 18,817 14%
Interest income ......................... -216,702 -40,954 -81% -18,488 -3,794 -79%
Exchange (gain) loss, net ............... 747 -172,677 N/A 64 -15,997 N/A
Gain on monetary position ............... -2,907 30,621 N/A -248 2,837 N/A
Total financial expense ............... -24,710 20,113 N/A -2,107 1,863 N/A
Income (loss) before income and asset t -129,482 148,872 N/A -11,090 13,791 N/A
Provision for deferred income taxes ..... 1,021 14,329 1303% 87 1,327 1425%
Net income ..............................$ -130,503$ 134,543 N/A -11,177 12,464 N/A
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 JUNE 30, 2007
Thousands of Pesos Thousands of Dollars
Ac Ac Ac Ac
2006 2007 Var 2006 2007 Var
Gain (Loss) in subsidiaries .............$ -299,875$ 342,256 N/A -26,106 31,456 N/A
Selling and Administrative expenses ..... 3,294 1,666 -49% 286 154 -46%
Operating income ................... -303,169 340,590 N/A -26,392 31,302 N/A
Other income (expense), net ............. 51,115 65,432 28% 4,538 5,938 31%
INTEGRAL RESULT OF FINANCING:
Interest expense ........................ 375,119 419,024 12% 32,577 38,472 18%
Interest income ......................... -414,708 -81,001 -80% -36,007 -7,440 -79%
Exchange (gain) loss, net ............... 1,173 -16,699 N/A 102 -1,798 N/A
Gain on monetary position ............... 7,747 -38,578 N/A 695 -3,463 N/A
Total financial expense ............... -30,669 282,746 N/A -2,633 25,771 N/A
Income (loss) before income and asset t -221,385 123,276 N/A -19,221 11,469 N/A
Provision for deferred income taxes ..... 24,100 17,515 -27% 2,129 1,617 -24%
Net income ..............................$ -245,485$ 105,761 N/A -21,350 9,852 N/A
CORPORACION DURANGO, S.A.B. DE C.V.
COMPLEMENTARY NOTES TO THE FINANCIAL INFORMATION
THE ENTITY:
CORPORACION DURANGO, S. A. B. DE C. V. ("CODUSA") AND SUBSIDIARIES
(COLLECTIVELY, THE "COMPANY") ARE PRIMARILY ENGAGED IN THE MANUFACTURING AND
SELLING OF PACKAGING (CORRUGATED BOXES AND MULTI-WALL SACKS), PAPER
(CONTAINERBOARD, NEWSPRINT AND BOND) AND OTHER WOOD PRODUCTS (PLYWOOD) IN
MEXICO AND IN THE UNITED STATES OF AMERICA.
ON DECEMBER 8, 2006, THE BOARD OF DIRECTOR'S DECIDED TO MODIFY THE SOCIAL
DENOMINATION OF COPORACION DURANGO, S. A. DE C. V. TO CORPORACION DURANGO,
S. A. B. DE C. V.; ALSO, THEY MODIFIED ITS SOCIAL STATUTES TO REFLECT THE
NEW INTEGRATION, ORGANIZATION AND OPERATION OF ITS SOCIAL ORGANS AND THE
NEW RIGHTS OF THE MINORITY STOCKHOLDERS, IN ACCORDANCE TO MEXICAN LAW OF
STOCK MARKET, PUBLISHED ON DECEMBER 30, 2005.
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 THE MEXICAN FINANCIAL REPORTING STANDARDS ("NIFS"), ISSUED BY THE
MEXICAN BOARD FOR RESEARCH AND DEVELOPMENT OR FINANCIAL REPORTING
STANDARDS ("CINIF").
1.2 BASIS FOR COMPARISSON EFFECTS IN THE FINANCIAL STATEMENTS:
FOR COMPARATIVE 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
JUNE 30st, 2007 WAS $10.7946.
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.
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. 87% MANUFACTURING OF NEWSPRINT
AND BOND PAPER
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:
COMMON STOCK, LEGAL RESERVE, PREMIUM IN ISSUANCE OF SHARES AND RETAINED
EARNINGS REPRESENT THE VALUE OF THOSE ITEMS IN TERMS OF PURCHASING POWER
OF THE MEXICAN PESO AS OF THE MOST RECENT BALANCE SHEET DATE, AND ARE
DETERMINED BY APPLYING FACTORS DERIVED FROM THE NCPI TO THE HISTORICAL
VALUES.
SHARES OF COMMON STOCK AT PAR VALUE, ARE COMPRISED AS FOLLOWS:
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
INCOME TAX:
INCOME TAX IS RECORDED BY THE COMPREHENSIVE METHOD OF ASSETS AND
LIABILITIES, WHICH CONSISTS OF RECORDING DEFERRED TAX FOR ALL
TEMPORARY DIFFERENCES BETWEEN THE BOOK AND TAX VALUES AF ASSETS AND
LIABILITIES.
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.B. DE C.V.
Date: Aug 3, 2007 By /s/ Mayela Rincon de Velasco
--------------------------------
Name: Mayela Rincon de Velasco
Title: Chief Financial Officer