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 May, 2006
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 MARCH 31, 2007 (UNAUDITED)
EXPRESSED IN TERMS OF THE PURCHASING POWER OF MEXICAN PESOS
AS OF MARCH 31, 2007
(Stated in thousands of Pesos and Dollars)
US$ DLLS.
December 31, Mar 31, Mar 31,
2006 2007 2007
ASSETS
CURRENT ASSETS:
Cash and cash equivalents ........................$ 34,613$ 34,148 3,095
Accounts receivable, net ......................... 15,241 7,541 684
Due from related parties ......................... 48,888 45,447 4,119
Other assets ..................................... 544 539 49
Inventories, net ................................. 0 0 0
Prepaid expenses ................................. 0 1,269 115
Total current assets ................... 99,286 88,944 8,062
LONG-TERM RELATED PARTIES .......................... 1,579,661 0 0
INVESTMENT IN SUBSIDIARIES ......................... 11,739,018 11,936,816 1,081,998
OTHER ASSETS, net .................................. 44,112 32,980 2,989
Total assets ..........................$ 13,462,077$ 12,058,740 1,093,049
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Bank loans and current portion of long-term debt . 152,192 153,745 13,936
Interest payable ................................. 490 0 0
Trade accounts payable ........................... 3,731 513 47
Accrued liabilities .............................. 202,027 166,249 15,069
Total current liabilities ............. 358,440 320,507 29,052
LONG-TERM DEBT ..................................... 5,557,298 5,465,230 495,389
LONG-TERM RELATED PARTIES .......................... 2,699,607 1,425,785 129,239
Total long term liabilities ............ 8,256,905 6,891,015 624,627
Total liabilities ..................... 8,615,345 7,211,522 653,679
STOCKHOLDERS' EQUITY:
Total stockholders' equity ............. 4,846,732 4,847,218 439,370
Total liabilities and stockholders' equi$ 13,462,077$ 12,058,740 1,093,049
Exchange rate: $ 11.0322
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 MARCH 31, 2007
(Stated in thousands of Pesos and Dollars)
*
Full Year Acum. Mar Acum. Mar
2006 2007 US$ 2007
OPERATING ACTIVITIES:
Net income (loss) ..............................................$ -73,026$ -39,740US -3,602
Add (deduct)- Charges (credits) to income which do
not require (generate) resources:
Loss (Gain) in subsidiaries ............................. 116,354 -161,000 -14,594
Deferred income taxes ................................... 19,808 14,110 1,279
Other.................................................... 0 0 0
Total items which do not require cash.................... 136,162 -146,890 -13,315
Net resources generated from income .......................... 63,136 -186,630 -16,917
Changes in operating assets and liabilities:
Decrease (Increase) in current assets ...................... -544 -1,264 -115
Decrease (increase) in account receivables, net ............ 82,843 11,141 1,010
(Decrease) increase in accounts payable and
accrued liabilities ...................................... -13,291 -39,486 -3,579
Resources generated by operating activities .................. 132,144 -216,239 -19,601
FINANCING ACTIVITIES:
Increase (Decrease) in bank loans and others ............ 7,838,872 215,774 19,559
Gain on shares acquisition .............................. 6,837 0 0
Net resources generated from financing activities ............ 7,845,709 215,774 19,559
INVESTMENT ACTIVITIES:
Investment in subsidiaries .............................. -8,239,021 0 0
Increase in deferred assets ............................. -10,346 0 0
Net resources applied to investing activities ................ -8,249,367 0 0
INCREASE IN CASH AND CASH EQUIVALENTS .......................... -271,514 -465 -42
CASH AND CASH EQUIVALENTS AT BEGINNING OF THE PERIOD............ 306,127 34,613 3,137
CASH & CASH EQUIVALENTS AT END OF THE PERIOD ...................$ 34,613$ 34,148US 3,095
* The exchange rate of 11.0322 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 MARCH 31, 2007
Thousands of Pesos Thousands of Dollars
1Q 1Q 1Q 1Q
2006 2007 Var 2006 2007 Var
Gain (Loss) in subsidiaries .............$ -152,898$ 161,000 N/A -13,466 14,594 N/A
Selling and Administrative expenses ..... 1,391 473 -66% 123 43 -65%
Operating income ................... -154,289 160,527 N/A -13,589 14,551 N/A
FINANCIAL EXPENSE:
Interest expense ........................ 181,749 216,834 19% 16,012 19,655 23%
Interest income ......................... -198,863 -40,220 -80% -17,519 -3,646 -79%
Exchange (gain) loss, net ............... 430 156,652 36331% 38 14,199 37266%
Gain on monetary position ............... 10,699 -69,497 N/A 943 -6,300 N/A
Total financial expense ............... -5,985 263,769 N/A -526 23,908 N/A
OTHER INCOME (EXPENSES):
Other income (expense), net ............. 55,978 77,612 39% 4,932 7,035 43%
Total other income (expense) .......... 55,978 77,612 39% 4,932 7,035 43%
Income (loss) before income and asset t -92,326 -25,630 -72% -8,131 -2,322 -71%
Provision for deferred income taxes ..... 23,179 14,110 N/A 2,042 1,279 N/A
Net income ..............................$ -115,505$ -39,740 -66% -10,173 -3,601 -65%
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 MARCH 31st,
2007 WAS $11.0322.
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. 100% 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
MOEST RECENT BALANCE SHEET DATE, AND ARE DETERMINED BY
APPLYING FACOTRS 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. DE C.V.
Date: May 18, 2007 By /s/ Mayela Rincon de Velasco
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Name: Mayela Rincon de Velasco
Title: Chief Financial Officer