1 COMISION NACIONAL BANCARIA Y DE VALORES MEXICO, DISTRITO FEDERAL ANUAL REPORT Annual Report is presented in accordance with the general provisions applicable to issuers and other market participants, for the year ended December 31, 2012. PROMOTORA Y OPERADORA DE INFRAESTRUCTURA, S.A.B. DE C.V. (Exact name of Issuer as specified in its articles of incorporation) Bosque de Cidros No. 173 Col. Bosques de las Lomas Delegación Cuajimalpa 05120 México, Distrito Federal Registered values: PINFRA Title of each class: Name of the Stock Exchane in which they are rolled Acciones ordinarias, sin valor nominal Mexican Stock Exchange American Depositary Shares, sent for New York Stock Exchange American Depositary Receipts (ADS´s), Each one represents 20 stocks.* * Not for commercial purposes, but only in connection with the registration of American Depositary Shares, pursuant to the requirements of the Securities and Exchange Commission. Number of shares outstanding of the classes of capital or common stock of the issuer as of the close of the period covered by the annual report: 380,123,523 The company values are registered in the National Securities Registry, and are subject to trading; such registration does not imply certification of the quality of the securities, solvency of the issuer or the accuracy or completeness of the information contained in the Annual Report or validate the acts which, if any, might have been made in contravention of the laws.
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1
COMISION NACIONAL BANCARIA Y DE VALORES
MEXICO, DISTRITO FEDERAL
ANUAL REPORT
Annual Report is presented in accordance with the general provisions applicable to issuers and other market
participants, for the year ended December 31, 2012.
PROMOTORA Y OPERADORA DE INFRAESTRUCTURA, S.A.B. DE C.V.
(Exact name of Issuer as specified in its articles of incorporation)
Bosque de Cidros No. 173
Col. Bosques de las Lomas
Delegación Cuajimalpa
05120 México, Distrito Federal
Registered values:
PINFRA
Title of each class: Name of the Stock Exchane in which they are rolled
Acciones ordinarias, sin valor nominal Mexican Stock Exchange
American Depositary Shares, sent for New York Stock Exchange
American Depositary Receipts (ADS´s),
Each one represents 20 stocks.*
* Not for commercial purposes, but only in connection with the registration of American Depositary Shares, pursuant
to the requirements of the Securities and Exchange Commission.
Number of shares outstanding of the classes of capital or common stock of the issuer as of the close of the period
covered by the annual report: 380,123,523
The company values are registered in the National Securities Registry, and are subject to trading; such
registration does not imply certification of the quality of the securities, solvency of the issuer or the accuracy or
completeness of the information contained in the Annual Report or validate the acts which, if any, might have
been made in contravention of the laws.
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TABLE OF CONTENTS
1) GENERAL INFORMATION
a) Glossary of terms and conditions….……………………..…………………………………………………..3
b) Executive summary……………………………………………………………………………...………….10
c) Risk factors….…………………………………………………………………………....…………..……..15
d) Other values..…………………………………………………………………………………….………….29
e) Significant changes to the rights of securities registered in the Register ………...…………...….………..29
f) Public documents…………………………………….………………………………………...……………29
2) THE ISSUER
a) History and development of the issuer ..………………………………………………………………....…30
b) Business Overview ………………………………………………………………………………………...30
We believe that our principal strength as an operator of transportation infrastructure concessions is our efficient
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and streamlined business model of strategically identifying, investing in, and efficiently operating infrastructure projects
to generate consistent cash flow. Through this business model, we develop self-sustaining concessions that provide us
with an attractive rate of return and cash flow generation to fund future growth. During the past 20 years, we have
managed infrastructure concessions such as toll roads, ports, airports and water treatment facilities, among others, which
provide us with experience to identify and operate business opportunities that strengthen our long-term portfolio.
Over the last several years we have obtained financing through long term-peso securitization transactions related to some
of our concessions on a project-specific basis, allowing us to organically grow our Infrastructure Projects to 137.5%,
from eight Infrastructure Projects in 2006 to 19 Infrastructure Projects in 2012, thereby expanding our level of
participation in the infrastructure sector in Mexico.
2. Attractive and predictable profitability
As of December 31, 2012, 17 of the 19 toll roads we individually or jointly managed were operational, with a history
of stable daily traffic flows and an average remaining term of 27 years, which provides us with steady and predictable
long-term cash flows. We believe that the relatively consistent levels of operating expenses and maintenance costs of our
concessions, coupled with a predetermined capital expenditure plan, enable us to control expenses and obtain high returns
which generate sustainable cash flow. In addition, the majority of our concessions do not include revenue controlling
features related to caps on their internal rate of return, which provides us with the opportunity to efficiently operate our
concessions.
3. Diversified portfolio of concessions with significant remaining concession lives and complementary lines of
business
As of the date of this offering memorandum, the toll roads we individually or jointly operate comprise
approximately 900 kilometers of toll roads in ten of the 32 Mexican states and also in the federal district of Mexico City.
We also operate two bridges and a container port terminal. We operate toll road concessions which have been in
operation during several years located in strategic locations based on population density and GDP growth with average
daily traffic volume CAGR of 60.8% over the three years ended December 31, 2012. Our diversified portfolio of
operating concessions, both at a geographical and operational level, in respect of unsecuritized concessions, provides
sustainable generation of cash flows that complements the required funding of our Greenfield Projects and maintenance
of our operational concessions.
Most of our concessions were obtained through a public bidding process, under which seven of our concessions
were granted by the Mexican Federal Government, while the remaining seven were granted by State Governments. Two
of the seven concessions obtained from the Mexican Federal Government were obtained through assignments. Our solid
long-term relationships with the Mexican Federal Government and State Governments position us well to identify
potential needs for infrastructure and evaluate potential project opportunities throughout the country. We believe that this
diversification among the authorities with which we have relationships is a significant competitive strength.
We believe the diversification of our concessions portfolio allows us to mitigate geographic, political and
socioeconomic risks. Moreover, while our main source of revenue is the development and operation of transportation
infrastructure concession projects, we also participate in complementary lines of business such as an asphalt mix and
related products business, construction management business, two bridges and a container port terminal concession. We
believe these complementary business lines further diversify our business model enhancing our competitive position.
4. Proven track record of growth and operational efficiency in challenging environments
We have a proven track record in operating and growing our portfolio of concessions, as well as improving the terms
of our concessions, even in challenging economic, regulatory and competitive environments. For example, we obtained
the Tlaxcala-Xoxtla and San Luis Río Colorado-Estación Doctor toll road concessions during the 2008 economic crisis,
Michoacán package in 2011 and Puebla in 2012. We believe our breadth of experience in the transportation infrastructure
concession sector and our successful management of complex projects allows us to effectively analyze investment
opportunities and strategically bid on projects, all of which position us well to take advantage of the growth opportunities
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in the Mexican transportation infrastructure sector. The number of our Infrastructure Projects increased from eight in
2006 to 19 in 2012. In addition, we have successfully worked with the Mexican Federal and State Governments in
extending the lives of our concessions. Seven concessions in our portfolio have had at least one extension of their
original term. Generally, returns on capital expenditures for improvements on a toll road are rewarded by the relevant
governmental authority by extending the concession term or allowing flexibility in pricing policies. In 2010, Mexican
Federal concession regulations were modified, granting concessionaires the right to extend the term of a toll road
concession for another term equal to its original term if additional investments are made or if certain other justified events
occur. Generally, state concession regulations also grant concessionaires the right to extend the term of a toll road
concession for 15 to 30 years upon request to the relevant State Government. We believe that this modification provides
us with further flexibility at the time of analyzing new improvements and investments in our existing concessions.
Strong and experienced management team, with a high level of industry know-how and innovative project
operation
Our management team was put in place to confront a challenging financial situation and bring the Company out
of a complex business restructuring process under the protection of Mexican bankruptcy law (concurso mercantil) in
2003. Our management team was able to successfully restructure and redefine the business model and the capital
structure of the Company. In 2005, the trading suspension on the Company’s shares on the BMV was concluded. The
Company transformed itself into an operator of transportation infrastructure concessions focused on generating
sustainable cash flow.
Our senior managers have experience in the infrastructure and financial sectors, providing us with what we
believe are strong industry expertise and a high level of concession know-how. Our team has, on average, 20 years of
experience in the infrastructure sector maintaining and developing, among other projects, toll roads, ports, airports and
water treatment plants throughout Mexico and Latin America. Our team also has over 20 years of experience managing
diverse companies throughout the financial sector, which we believe provides us with valuable insight into the financial
markets.
Furthermore, our management team has a proven track record of winning new transportation infrastructure
concessions through public bidding processes and acquisitions, and subsequently developing these concessions through
design, financing and construction.
The key elements of our strategy to capitalize on our strengths and grow our business include:
Maintain a strong financial profile and cash position
Our industry expertise, efficient operations, diversified portfolio and streamlined business model has allowed us
to generate strong cash flows during the past six years. Our cash management strategy, based on long-term objectives,
remains at the forefront of our strategy to maintain a solid balance sheet, while providing us the opportunity to invest in
improvements to our existing concessions and in new projects.
Our business strategy of maintaining a conservative approach to our investments and divestitures provides
sustained growth and financial security to our Company, allowing us to efficiently spread overhead costs among our
different projects. We believe this will allow us to maintain a strong cash position and take advantage of opportunities as
they arise, even during times of economic downturn.
Promote and develop new business opportunities together with governmental entities focused on infrastructure
programs in Mexico
On an ongoing basis, we interact with local and State Governments, which we believe tend to be receptive to
private initiatives to develop infrastructure projects that could benefit their regions. We believe our in-depth
understanding of the specific needs of local and State Governments coupled with our track record of working
successfully with them allows us to efficiently analyze, bid on and execute new projects and investment opportunities.
Our management is selective in analyzing business opportunities, focusing on projects that offer a desirable return on
investment with predictable cash flows. We follow strict criteria in bidding for concessions and a disciplined approach in
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the opportunities we pursue. We believe we have a proven methodology, developed through our many years of industry
experience, which allow us to efficiently analyze strategic assets and projects.
Furthermore, Mexico City, various Mexican states and the Mexican Federal Government are currently
implementing transportation infrastructure development programs in Mexico to address the transportation infrastructure
deficit in certain areas of Mexico. These programs are unprecedented in Mexico and we believe will provide significant
growth opportunities in our industry. The Mexican National Infrastructure Plan for 2007-2012, was designed to expand
Mexico’s transportation infrastructure, accelerate Mexico’s economic growth and make the Mexican economy more
internationally competitive.
Maximize the value and performance of our concessions
On an ongoing basis, we seek to maximize the profitability of each of our concessions in order to create value
for our shareholders through the following:
Increase toll rates were justified based on improvements made in our concessions. To improve our toll
roads and make them more responsive to the needs of the communities that use them, we periodically
make improvements and capital investments in the maintenance of our toll roads in addition to those
required in the related concession which, with the approval of the relevant authorities, permit us to
increase our revenues by adjusting toll rates.
Improve operating efficiency of each concession. By focusing on improving the efficiency of our
operations, we seek to maximize the profitability of our concessions measured by our cash flow
generation.
Negotiating extensions to the terms of our concessions. We extend the terms of our concessions by
negotiating reinvestments in accordance with Mexican law. Such negotiations have provided us with a
portfolio of concessions with an average remaining term, as of December 31, 2012, of 27 years. When
entering into new concessions we seek to request such extensions in order to maximize the value of our
assets. We currently intend to request the extension of the term of certain concessions in order to increase
our portfolio’s profitability.
Recent events
Public Offering
On May 4, 2012, PINFRA announced a filling with the BMV and the CNBV documentation for a possible
Public Offer of Shares in Mexico and United States.
On October 4, 2012, the company conducted a placement of shares on the Mexican Stock Exchange whereby
placed 21'678, 314 shares primary and secondary placement 48'714, 205 shares at a price of $ 63.00 per share. The offer
was 51% national and 49% international.
The over-allotment option was held on October 11, 2012, for a total of 9'181, 633 shares at a price of $ 63.00
per share.
This issuance was recorded as an increase in stockholders' equity, net of issuance costs totaling $ 83'880, 000
pesos.
Puebla Package
On November 23, 2012, the company obtained the concession to operate, exploit, and maintain for 30 years the
Puebla road package consisting of roads Apizaco – Huauchinango, Virreyes – Teziutlán and Via Atlixcáyotl, with a
distance of 142.5 km by which it was paid the initial amount of $ 2.494 million pesos.
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c) Risk Factors
An investment in our Shares involves risks. You should carefully consider the risks described below as well as
the information contained in this offering memorandum before making an investment decision. Our business, financial
condition and results of operations could be materially and adversely affected by any of these risks. The trading price of
our Shares and the liquidity of our Shares could decline due to any of these risks, and you may lose all or part of your
investment. The risks described below are those known to us and that we currently believe may materially affect us.
Additional risks not presently known to us or that we currently consider immaterial may also impair our business.
Risks Related to Our Business
Returns on our investment in certain concessions may not meet the returns estimated at the time of our investment.
Our return on any investment in a toll road concession is based on the terms and conditions of the concession, its
duration and the amount of capital invested, in addition to the amount of toll or other revenues collected, debt service
costs and other factors. For example, traffic volumes, and therefore toll revenues, are affected by a number of factors
including toll rates, the quality and proximity of alternative toll-free roads, fuel prices, taxation, environmental
regulations, consumer purchasing power and general economic conditions.
The terms of our concessions provide for different mechanisms related to the return on our investment. In
certain cases, when we recover our total investment in the project and achieve the agreed upon return, the relevant
governmental authority will have the right to terminate the concession, have the concession returned to such authority or
allow us to maintain the concession until its expiration, so long as we pay the agreed compensation with such
governmental authority. In other cases, we may be required to share any returns in excess of the agreed upon annual rate
of return with the relevant governmental authority, which will affect our revenues. Given these factors, and the possibility
that governmental authorities could implement policies that affect our contractual return on investment in a way that we
did not anticipate, we cannot assure you that our return on any investment under any concession will meet our estimates.
A material change in any of the above variables may adversely affect the returns on our investments, our financial
condition and results of operations.
Governmental entities may prematurely terminate our concessions under certain circumstances, some of which are
beyond our control.
Our concessions are our principal assets, and we would be unable to continue the operation of a particular
concession without the concession right from the granting governmental authority. A concession may be revoked by the
relevant governmental authority for certain reasons set forth in the relevant concession contract and in applicable
legislation, including the failure to comply with development, operation and/or maintenance programs, temporary or
permanent halt of our operations, exceeding the agreed upon rates of return set forth in certain of our concessions or
failing to comply with any other material term of the relevant concession or applicable law. In addition, certain of our
concessions may be terminated early in the event we reach the return provided for in the related concession.
Moreover, the relevant governmental authority may terminate, expropriate, amend the terms of the concession
and/or repossess (rescatar) a concession at any time, if, in accordance with applicable law, it determines that it is in the
public interest to do so. The relevant governmental authority may also assume the operation of a concession in the event
of war, public disturbance or threat to national security. In addition, in the case of force majeure, the relevant
governmental authority may require us to implement certain changes to our operations. If the government terminates any
of our concessions, under Mexican law it is generally required to compensate us for the amount of our unrecovered
investment plus the Real Annual Rate of Return agreed upon in the related concession, unless the concession is revoked
pursuant to applicable law or the terms of the concession which would imply a serious breach of the concession’s terms
by us. We cannot, however, assure you that we would receive such compensation on a timely basis or in an amount
equivalent to the value of our investment in a concession plus lost profits. For a description of the rights of the relevant
governmental authorities to terminate any of our concessions, see “Business—Our Concessions.”
Under certain circumstances, we may obtain from the relevant governmental authority an extension of the terms
of our concessions, which would provide us with the opportunity to continue operating them. However, in most cases
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such extensions are granted at the discretion of the relevant authorities. Therefore, we cannot assure you that the relevant
governmental authorities will extend the terms of any of our concessions. If such authorities do not extend our
concessions, our business, financial condition and results of operations may be adversely affected.
Our concessions may not achieve our projected levels of traffic or volume.
The main source of cash revenue for our business is derived from the collection of toll road fees. Such revenue
is directly correlated to the volume of vehicles traveling on our toll roads and the frequency of traveler use. A decrease in
traffic might arise either from general economic circumstances or from a reduction in commercial activities in the regions
served by our toll roads. The level of traffic on a given road is also influenced by other factors such as its connection to
other parts of the federal and state road systems and other road networks and the availability of alternative means of
transportation and security conditions, all of which are beyond our control. In the past, certain of our Toll Road
Concessions, including the México-Toluca Toll Road Concession have not reached their projected traffic levels.
Two of our Toll Road Concessions, the Ecatepec-Peñón toll road and the Tlaxcala-Xoxtla toll road, have not yet
commenced operations and do not have an operating history. As such, future traffic on these toll roads is unpredictable.
Furthermore, we cannot assure you that the current or expected traffic level on our roads will increase or even remain
stable. Decreased traffic could adversely affect our business, financial condition and results of operations.
Moreover, we cannot assure you that the current or expected volume of operations in the Altamira Port Terminal
Concession will increase or remain stable. Decreased volume of operations could adversely affect our business, financial
condition and results of operations.
We derive a substantial amount of our revenues from the operation of one toll road.
We derived 29.3%, of our consolidated revenues for the year ended December 31, 2012, from the operation of
the México-Toluca toll road, which covers 19 km from Constituyentes and Reforma in Mexico City to La Venta, in the
State of Mexico. Any governmental action negatively affecting this concession, an economic recession affecting this area
of Mexico, any natural disaster or any other event that may adversely affect the level of traffic on this toll road would
have a significant material adverse effect on our financial condition and results of operations. Although revenues
generated by this toll road are significant in terms of cash flow, due to the pledge of toll fees under securitization
transactions involving this toll road, we do not recover fees collected thereunder.
The regulations pursuant to which the maximum applicable toll rates are established and adjusted do not ensure that
our concessions will be profitable or achieve the expected level of return.
The regulations applicable to our Toll Road Concessions establish maximum toll rates that we can charge
vehicles using our toll roads. While some of our concessions provide for an extension of their respective terms to allow
us to achieve the agreed upon rate of return, if the relevant governmental authority decides not to grant such an extension,
our concessions do not guarantee that our projects will be profitable or that specified rates of return will be achieved.
Additionally, we may not be able to pass on increases in costs of our services to users of our toll roads and container port
terminal due to the maximum rates that we are able to charge.
Our concessions provide that maximum toll rates will be adjusted on a biannual or annual basis based on
inflation (determined by reference to the INPC). Although we are entitled to request additional adjustments to maximum
toll rates under certain circumstances, certain concessions provide that such a request will be approved only if the
relevant governmental authority determines that certain limited events specified in our concessions, such as extraordinary
events affecting traffic on the toll road, have occurred. Therefore, there can be no assurance that any such request would
be granted. If a request to adjust our maximum toll rates is not granted, our business, financial condition and results of
operations could be adversely affected.
The global credit crisis and unfavorable general economic and market conditions of recent years may negatively
affect our liquidity, business and results of operations.
The effect of a continued credit crisis and related turmoil in the global financial system on the Mexican
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economy, our concessions and asphalt and related products business cannot be predicted. It may lead to a reduced level of
transportation infrastructure projects undertaken by the Mexican Federal Government and State Governments and lower
demand for our services or products. In response to current market conditions, motorists on our toll roads may choose
alternate means of transportation, clients of our asphalt and related products business and users of our container port
terminal may choose to spend less on our products and services, or delay payments to us (which may in turn affect our
payments to our providers). Our clients might also seek contract terms more favorable to them. Although during most of
2010 and during the first half of 2011 there were signs of recovery in the global economy, this recovery may be fragile
and may only reflect temporary benefits from government stimulus programs that may not be sustained. The downgrade
of the sovereign credit rating of the United States during the second half of 2011 as well as the sovereign debt crisis of
several European countries (including Greece, Portugal, Spain, Ireland, and to a lesser extent, Italy) and the consequent
impact on the solvency of European banks has increased the possibility of another worldwide recession. The ongoing
sovereign debt crisis could adversely impact the financial health of the global banking system and lower consumer
confidence, which could impact global financial markets and economic conditions in the United States and throughout
the world. As a result, any combination of lower consumer confidence, disrupted global capital markets and/or reduced
economic conditions could have a negative impact on the Mexican economy and consequently on our business.
Many lenders and institutional investors have reduced and, in some cases, ceased to provide funding to
borrowers. Credit rating agencies have also become more stringent in their debt rating requirements. Continued
disruption of the credit markets could make it more difficult for us to raise additional capital in the future on favorable
terms, or at all, which could impair our ability to operate our business or achieve our growth objectives. Our ability to
expand our business would be limited if, in the future, we were unable to access financing sources on favorable terms or
at all. These disruptions could negatively affect our liquidity, business and results of operations.
We are exposed to risks related to the construction, operation and maintenance of our projects.
The operation and maintenance requirements under our concessions and our concessions’ annual construction,
operation and maintenance programs could encounter delays or cause us to exceed our budgeted costs for such projects,
which could limit our ability to realize the expected return on these projects, increase our operating or capital expenses
and adversely affect our business, results of operations, prospects and financial condition. Such delays or budgetary
overruns also could limit our ability to upgrade our toll road collection systems and facilities or to comply with our
concessions’ annual operation and maintenance programs, which under the terms of our concessions, could result in the
revocation of our concessions.
In addition, our operations may be adversely affected by interruptions or failures in our technology systems. We
rely on sophisticated technology systems and infrastructure to support our business, including toll road collection and
traffic measurement systems. Any of these systems may be susceptible to outages due to power loss, telecommunications
failures and similar events. The failure of any of our technology systems may cause disruptions in our operations,
adversely affecting toll road collections and profitability. While we have business continuity plans in place to reduce the
adverse impact of information technology system failures on our operations, we cannot assure you that these plans will
be effective. We may therefore suffer from significant and prolonged interruptions of operations due to the failure of
these technical systems or of our business continuity or emergency maintenance plans. Furthermore, accidents and
natural disasters may also disrupt the construction, operation or maintenance of our projects and concessions, which
could adversely affect our business, financial condition, results of operations and prospects. As a result of the works
carried out under our concessions and the Altipac Plant, our workers are exposed to potential accidents that could injure
them. Although our workers have had no material accidents during the past six years, our workers may suffer accidents in
the future. Pursuant to Mexican law these risks are covered by social security services from the Instituto Mexicano del
Seguro Social or IMSS (Mexican Social Security Institute).
We may not be successful in obtaining new concessions.
The market for transportation infrastructure concessions in Mexico is highly competitive. We compete with
Mexican and foreign companies for infrastructure concessions in Mexico. Some of our competitors may have better
access to capital and greater financial and other resources, which would give them a competitive advantage in bidding for
such projects. We cannot assure you that we will continue to successfully obtain new concessions.
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Our performance may be adversely affected by decisions of Mexican governmental authorities regarding the grant
of new concessions for infrastructure facilities and the limitation of the scope and term of existing concessions.
Mexican governmental authorities may decide to limit the scope and term of our concessions or not grant new
concessions. Such decisions have generally been dependent on the state of the Mexican economy. Mexican
governmental authorities may face budget constraints that may limit the development and awarding of infrastructure
projects and concessions, which could adversely affect our business. The unavailability of infrastructure concession
opportunities or our inability to win new concessions may adversely affect our business, expansion plans, financial
condition and results of operations. A decrease in the number of new infrastructure concessions granted by the
governmental authorities as a result of a deterioration of the Mexican economy or changes in Mexican governmental
policy, among other reasons, may have an adverse effect on our financial condition and results of operations.
Beginning in the second half of 2008 and due to the impact of the credit crisis and turmoil in the global financial
system, the rate of awards of infrastructure projects in Mexico has been and continues to be slower than we anticipated.
The Mexican Government also extended the time period for certain bidding processes for the awards, in part because of
the need to reevaluate the corresponding projects’ feasibility in the current economic environment. These and other
delays, including payment delays, can also result from changes in administration at the federal, state or local level
reviewing the terms of project contracts previously granted or pursuing different priorities than the previous
administration. Additionally, the Mexican Government may face budget deficits that prohibit it from funding proposed
and existing projects or that cause it to exercise its right to terminate our contracts with little or no prior notice. We cannot
provide any assurances that economic and political developments in Mexico, over which we have no control, will not
negatively affect our operations. See “—Risks Related to Mexico—Adverse economic and political conditions in Mexico
may adversely affect our business, financial conditions or results of operations.”
We are regulated by the Mexican Government at the federal, state and municipal level. Existing laws and
regulations and changes thereto may adversely affect our business, financial condition and results of operations.
We operate in a highly regulated environment. Our profitability depends on our ability to comply with various
laws and regulations on a timely and efficient basis. We cannot assure you we will be able to do so or that changes to
existing laws and regulations will not impair our ability to do so.
In addition, the terms of our concessions are regulated by various federal and state governmental entities in
Mexico. These regulations limit our operating flexibility, which could have an adverse effect on our business, financial
condition and results of operation. Except under limited circumstances, we generally do not have the ability to
unilaterally change our obligations should passenger traffic or other assumptions on which the related regulations were
based change during the applicable term.
In addition, although Mexican law establishes ranges of sanctions that may be imposed if we fail to comply with
the terms of one of our concessions, regulations or other applicable law, we cannot predict the sanctions that are likely to
be assessed for a given violation within these ranges. We also cannot assure you that we will not encounter difficulties or
increased costs in complying with such law and regulations.
Changes to applicable tax laws and regulations can adversely affect our business, results of operations and financial
condition.
On January 1, 2008, a new flat business tax regime (Impuesto Empresarial a Tasa Única, or “IETU”) came into
effect in Mexico. The IETU is an alternative tax that is applied on a cash flow basis and which does not replace the
Mexican federal income tax. Mexican taxpayers, including companies, are required to pay the higher of the IETU or the
Mexican income tax. The IETU is a minimum tax and losses cannot be credited or carried forward against future
Mexican income tax liability. We cannot assure you that the IETU will not be increased by the Mexican authorities,
which could have a material adverse effect on our financial performance.
Further tax reforms in 2009 also increased the statutory income tax rate from 28% to 30% from 2010 through
2013, with reductions to 29% for 2014 and 28% for 2015 and future years. This increase in corporate income tax has had,
and we expect will continue to have, an adverse effect on our financial performance. Furthermore, we cannot assure you
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that the scheduled future reductions in the statutory income tax rate will be implemented as contemplated or that
corporate income tax will not be further increased in the future. The timing and scope of changes in tax laws are
unpredictable, which can adversely affect our ability to manage our results of operations.
The Mexican Congress has modified tax laws more frequently than in other areas of the law. The timing and
scope of such modifications are unpredictable and can adversely affect our ability to manage our tax planning. Changes
to applicable laws and regulations, including with respect to the tax treatment of our concessions, may adversely affect
our business, results of operations and financial condition.
We are subject to numerous environmental and safety regulations that may become more stringent in the future and
may result in increased liabilities and increased capital expenditures.
Our activities are subject to comprehensive federal, state and local environmental and safety legislation, as well
as supervision by Mexican governmental agencies that are responsible for the implementation of such laws and related
policies. These laws mandate, among other requirements, that we obtain environmental licenses for the construction and
operation of new highway facilities, modifications to the original construction project, changes to forestry land use,
construction works on federal zones or use thereof, and installation of new equipment required for our operations. Even
once obtained, compliance with regulation and license terms and conditions may be expensive, difficult or economically
unfeasible, thereby curtailing future operations. Our activities in our asphalt mix and related product facility located in
Altipac are also subject to potential environmental risks which may impact our performance. These activities require us
to carry out mitigation actions in order to prevent environmental damages, which may force us to incur unplanned capital
expenditures or other expenses. Moreover, governmental agencies could take enforcement actions against us for our
failure to comply with their regulations. These enforcement actions could include, among others, the imposition of fines
and the revocation of permits, the revocation of our concessions or the closure of our asphalt plant. Compliance with
enhanced environmental and safety regulations could also force us to make capital expenditures and consequently divert
funds from planned investments. Such a reduction of available resources could adversely affect our financial condition
and results of operations. We cannot assure you that we will succeed in negotiating with granting authorities to
compensate us for changes in the contractual conditions resulting from such governmental actions. In addition,
compliance with environmental, health and safety regulations, including obtaining related licenses, could cause delays in
the schedule of construction and improvements of infrastructure projects provided under our concessions.
Increases in construction costs and delays in the construction process, including delays in obtaining the release
of the Right of Way, could adversely affect the Company's ability to meet the requirements and schedules com
anticipated construction in some of its concessions and adversely affect the activities, financial position and results of
operations of the Company.
Increases in construction costs or delays in the construction process, including delays in obtaining the Release of
Rights of Way, could adversely affect our ability to meet the construction requirements and schedules set forth in certain
of our concessions and adversely affect our business, results of operations and financial condition.
We may face construction delays or increases in costs for various reasons, some which are beyond our control,
such as delays in obtaining the Release of Rights of Way, scarcity of construction supplies, labor issues, security
conditions, natural disasters and inclement weather. Toll road concessions may require the grantor of the concession, the
concessionaire or both to obtain the Release of Rights of Way for the project in accordance with a construction schedule.
If such authorization is not timely obtained for projects that are still under construction such as the Ecatepec-Peñón
Stretch, we may incur additional costs and delays, and therefore we may need a modification or extension of the
concession term. For example, we have obtained the Release of Rights of Way of 2.7 km (16%) of the total 17 km of the
Ecatepec-Peñón Stretch with the respective landowners, and are currently negotiating the Release of Rights of Way for 6
km of such toll road. We cannot assure you how long this process may take. In addition, higher than expected
maintenance costs relating to our concessions could also affect our financial condition and results of operations. We
cannot assure you that the grantor of the concession will agree to amend any such concessions to mitigate the effects of
any increased costs.
Our participation in Brownfield Projects could be subject to certain risks.
20
We participate in a number of existing projects, as well as projects under development. Brownfield Projects may
require considerable rehabilitation and renovation. In operating and maintaining Brownfield Projects, we may encounter
latent defects, construction that was previously performed under subpar standards and undetected risks which may
require additional work, capital expenditures or unforeseen costs, all of which may adversely impact our financial
condition, results of operations and prospects.
The Mexican Government, at the federal or state level, could expand concessions or grant new concessions that
compete with our concessions or build alternate toll-free roads or ports which could have an adverse effect on our
business, financial condition and results of operations.
The Mexican Government, at the federal or state level, could grant additional or expanded concessions to
operate existing government-managed roads or ports which could compete directly with our concessions. In addition,
Federal or State Governments could promote other transportation alternatives that could directly compete and affect our
concessions. Any competition from other such toll or toll-free roads or ports, as well as the promotion of other
transportation alternatives, could have an adverse effect on our business, financial condition and results of operations.
In addition, our toll roads compete with public, toll-free highways, which by law are required to be maintained
by the Mexican Federal Government and do not impose a cost on drivers and thus may divert traffic from our roads. As a
result, increased government-sponsored improvements to existing roads or new construction could reduce traffic on our
toll roads and adversely affect our business, financial condition and results of operations.
If any of our subsidiary concessionaires were to default on their payment obligations under indebtedness incurred by
them, we may lose the rights under the related concessions.
Our subsidiaries PACSA, CPAC, ATISA, CONCEMEX and Zonalta, have indebtedness as a result of
securitization transactions under which collection rights relating to certain of our Toll Road Concessions have been
pledged to service the related debt. In addition, under the terms of certain securitizations, the right to the concession has
been granted as collateral. See “Management’s Discussion and Analysis of Financial Condition and Results of
Operations—Liquidity and Capital Resources—Indebtedness.” Since our securitizations do not qualify for off-balance
sheet accounting under Mexican FRS in part because of the limited rights of the trustee to use the proceeds of the
issuance of the related securities for the operation of the toll roads and the right to reacquire the related collection rights,
we record these liabilities on our balance sheet. While each of these securitizations have been entered into by certain of
our subsidiaries without recourse to our Company, the failure to comply with payment obligations under such
securitizations may cause the bondholders of such securitizations to seek recourse against such subsidiaries which may
result in the loss of revenues from such Toll Road Concessions, and adversely affect our financial condition and results of
operations.
We may have difficulty raising additional capital in the future on favorable terms, or at all, which could impair our
ability to operate our business or achieve our growth objectives.
In the event that our cash balances and cash flow from operations, together with financings under our
subsidiaries, becomes insufficient to make investments, make acquisitions or provide needed additional working capital
in the future, we could require additional financing from other sources. Our ability to obtain such additional financing
will depend in part upon prevailing capital market conditions, as well as conditions in our business and our operating
results, and those factors may affect our efforts to arrange additional financing on terms that are satisfactory to us. The
market volatility in recent years has created downward pressure on stock prices and credit capacity for certain issuers, and
for financial market participants generally. If adequate funds are not available, or are not available on acceptable terms, as
could be the case if current levels of market disruption and volatility continue or worsen, our ability to access the capital
markets could be adversely affected, and we may not be able to make investments, take advantage of acquisitions or
other opportunities, or respond to competitive challenges.
Labor unrest, employee benefits obligations and labor-related lawsuits may adversely affect our business, financial
condition and results of operations.
As of December 31, 2012, approximately 61.7% of our employees were members of several workers’ unions.
21
See “Business—Labor Regulation.” Historically, our relationship with the unions has been cordial and respectful despite
our differing interests. Every two years, we renegotiate the terms of our collective bargaining agreement (contrato
colectivo) with these unions, while wages are reviewed on an annual basis. We cannot guarantee the future stability of
our relationship with each of these unions, and any labor related conflict with the unions our employees are members of
may adversely affect our business, results of operations and financial condition.
Our continued growth requires us to hire and retain qualified personnel.
Over the past years, the demand for employees who engage in and are experienced in the services we perform
has continued to grow. The continued growth of our business is dependent upon being able to attract and retain
personnel, including engineers, corporate managers and craft employees, who have the necessary and required
experience and expertise. Competition for this kind of personnel is intense and we may experience difficulty in attracting
and retaining personnel, which could reduce our capacity to perform adequately in present projects and to bid for new
ones.
We cannot guarantee that our financial results, once presented in IFRS, will not be adversely affected.
Our annual audited consolidated financial statements as of and for the year ended December 31, 2012 will be
our first annual financial statements prepared in accordance with IFRS. Our date of transition to IFRS is January 1, 2011,
for which reason our annual audited consolidated financial statements as of and for the year ended December 31, 2011
will be part of the period covered by our first IFRS annual financial statements. CNBV rules require that interim
financial information published during the year of adoption also be presented under IFRS. Accordingly, our unaudited
condensed consolidated interim financial statements as of December 31, 2012 and December 31, 2011 and for the three
and six months ended December 31, 2012 and December 31, 2011, were prepared under IFRS. With respect to our
unaudited condensed consolidated interim financial statements, as of January 1, 2011, we adopted IFRS 1 (First-time
Adoption of International Financial Reporting Standards). In accordance with IFRS 1, we have applied the mandatory
exceptions and certain of the voluntary exemptions from full retrospective application of IFRS included therein.
As a result of our adoption of IFRS, our annual audited consolidated financial statements as of and for the year
ending December 31, 2012, as presented in accordance with IFRS, may not be comparable with our financial information
for earlier periods as prepared under Mexican FRS.
Notwithstanding the fact that we have prepared our unaudited condensed consolidated interim financial
statements as of December 31, 2012 and for the six months ended December 31, 2012 and December 31, 2011 in
accordance with IFRS, those financial statements have been prepared in accordance with the standards and interpretations
issued and in effect or issued and adopted in advance of the date of their preparation. Standards and interpretations that
will be applicable as of December 31, 2012, including those that may be applied optionally, are not known with certainty
at the time of preparation of our unaudited condensed consolidated interim financial statements included in this offering
memorandum. In addition, the accounting policies selected and applied by the Company in its first annual consolidated
financial statements under IFRS could be modified as a consequence of changes in the economic environment or industry
trends that occur after the issuance of the unaudited condensed consolidated interim financial statements but before the
issuance of its first annual consolidated financial statements under IFRS. Accordingly, although we have prepared and
presented our unaudited condensed consolidated interim financial statements as of December 31, 2012 and for the three
and six months ended December 31, 2012 and December 31, 2011 under IFRS, we have not definitively determined the
effects that the adoption of IFRS will have on our annual consolidated financial statements for the year ending December
31, 2012 nor the retroactive impacts for the comparative 2011 period. However, we expect that the principal impacts
from the adoption of IFRS will be with respect to the accounting of (i) the effects of inflation, (ii) land held for mineral
deposits, (iii) amortization of offering costs, (iv) employee benefits and (v) deferred income taxes; additionally, we
expect certain differences in presentation of financial statement line items, such as reclassification of toll fees and the
reclassification of current interest and debt payable amounts. A description of the effects of adoption of IFRS, including
a discussion of the mandatory exceptions and voluntary exemptions we have applied, as well as the required
reconciliations of our consolidated financial information prepared under Mexican FRS to such information under IFRS is
discussed in Note 13 to our unaudited condensed consolidated interim financial statements.
Our internal controls are based on the standards and practices followed by Mexican public companies, but do not
22
satisfy SEC-approved standards as to which there would be material weaknesses.
We have established and maintain a system of internal controls and financial reporting based on the standards
and practices followed by Mexican public companies. In connection with our reporting obligations to the SEC, we were
required to file with the SEC an annual report on Form 20-F, which in turn required an evaluation of our internal control
over financial reporting. This review identified material weaknesses based on such SEC-approved standards. Our
auditors were unable to perform auditing procedures necessary to form an opinion as to the effectiveness of our internal
control over financial reporting due to the limitations on the scope of their procedures and the existence of material
weaknesses based on SEC-approved standards.
Risks Related to Mexico
Adverse economic and political conditions in Mexico may adversely affect our business, financial condition or
results of operations.
All of our assets and operations are located and conducted in Mexico and are dependent upon the performance
of the Mexican economy. As a result, our business, financial condition and results of operations may be affected by the
general condition of the Mexican economy, over which we have no control. Mexico has experienced economic crises,
caused by internal and external factors, characterized by exchange rate instability (including large devaluations), high
inflation, high domestic interest rates, economic contraction, a reduction of international capital flows, a reduction of
liquidity in the banking sector and high unemployment rates. In addition, Mexico has recently experienced higher rates of
crime and increased problems relating to the drug war in particular in northern Mexico, which may continue to increase
in the future. Such conditions may have an adverse effect on our business, financial condition or results of operations.
Mexico experienced a period of slow growth from 2001 through 2003, primarily as a result of the downturn in
the U.S. economy. In 2006, gross domestic product, or GDP, grew by approximately 5.2% and inflation reached 4.1%. In
2007, GDP grew by approximately 3.3% and inflation declined to 3.8%. In 2008, GDP grew by approximately 1.2% and
inflation reached 6.5%. Mexico entered into a recession beginning in the fourth quarter of 2008, and in 2009 GDP fell by
approximately 6.2% and inflation grew 3.6%. In 2010, GDP grew 5.4% and inflation grew 4.4%.
Mexico also has, and is expected to continue to have, high real and nominal interest rates as compared to the
United States. The annualized interest rates on 28-day Certificados de la Tesorería (“Cetes”) averaged approximately
7.2%, 7.2%, 7.7%, 5.4%, 4.4% and 4.2% for 2006, 2007, 2008, 2009, 2010 and 2011, respectively. As of December 31,
2012, all of our subsidiaries’ debt was denominated in pesos, and we expect to continue incurring peso-denominated debt
for our projects in Mexico for which the source of repayment of financing is in pesos. To the extent that we incur peso-
denominated debt in the future, it could be at high interest rates.
The Mexican Government does not currently restrict the ability of Mexican companies or individuals to convert
pesos into dollars (except for certain restrictions related to cash transactions involving a dollar payment to a Mexican
bank) or other currencies and Mexico has not had a fixed exchange rate policy since 1982. The peso has been subject to
significant devaluations against the U.S. dollar in the past and may be subject to significant fluctuations in the future.
Severe devaluations or depreciations of the peso may result in governmental intervention to institute restrictive exchange
control policies, as has occurred in the past. Fluctuations in the value of the peso against other currencies may have an
adverse effect on us and the value of the Shares. We cannot guarantee that the Mexican Federal Government will
maintain the current monetary policy regarding the peso or that the peso’s value will not fluctuate significantly in the
future.
In addition, if the Mexican economy experiences a further recession, if inflation or interest rates increase
significantly or if the Mexican economy is otherwise adversely impacted, our business, financial condition or results of
operations could be materially and adversely affected.
Furthermore, the Mexican Government has exercised, and continues to exercise, significant influence over the
Mexican economy. Mexican governmental actions concerning the economy and state-owned enterprises could have a
significant effect on Mexican private sector entities in general, and us in particular, as well as on market conditions, prices
and returns on Mexican securities, including our securities. In the past, plurality of political parties in the Congress has
23
made the adoption of economic and other reforms difficult.
New policies, or changes in policies, implemented by the new Mexican Federal Government may affect our
operations.
In July 2012, elections were held to elect a new President of Mexico and a new national legislature. As a result
of these elections, the executive branch of the Mexican Federal Government will change as of December 31, 2012. Our
business, financial condition and results of operations may be affected by the new priorities, policies and capabilities of
the newly elected government.
Our activities are concentrated on infrastructure transportation concessions within Mexico City and the States of
Mexico, Puebla, Tlaxcala, Michoacán, Colima and Sonora. Developments affecting Mexico, Mexico City and the States
of Mexico, Puebla, Tlaxcala, Michoacán, Colima and Sonora, such as a local recession, natural disasters, local
regulation, increases in crime rates or political and social developments may have an adverse effect on us.
We have been engaged in the development, construction and operation of toll roads under the Mexican Federal
Government concession programs and diverse State infrastructure concession programs. Our Toll Road Concessions are
primarily located in Mexico City and the States of Mexico, Puebla, Tlaxcala, Michoacán, Colima and Sonora. All our
current concessions are issued either by such local governmental authorities or the Mexican Federal Government. As a
result, any legislative, regulatory or administrative changes, stricter rules implemented or additional requirements
imposed by the relevant governmental authorities may adversely affect our business, financial condition and results of
operations. In addition, we are exposed to risks of local economic recession, the occurrence of natural disasters which
may result in losses in excess of our insurance coverage, increases in local crime rates or local political and social
developments which may adversely affect such areas and, therefore, our business, results of operation and financial
condition.
Developments in other countries could adversely affect the Mexican economy, our business, financial condition or
results of operations and the market value of our Shares.
The Mexican economy, the business, financial condition or results or operations of Mexican companies and the
market value of securities of Mexican companies may be, to varying degrees, affected by economic and market
conditions in other countries. Although economic conditions in other countries may differ significantly from economic
conditions in Mexico, investors’ reactions to adverse developments in other countries may have an adverse effect on the
market value of securities of Mexican issuers. In recent years, economic conditions in Mexico have become increasingly
correlated with economic conditions in the United States as a result of the North American Free Trade Agreement
(“NAFTA”) and increased economic activity between the two countries. During the second half of 2008, the prices of
both Mexican debt and equity securities decreased substantially as a result of the prolonged decrease in the United States
securities markets. Adverse economic conditions in the United States, the termination of NAFTA or other related events
could have a material adverse effect on the Mexican economy. Mexican securities were also adversely affected in
October 1997 by the sharp drop in Asian securities markets and in the second half of 1998 and early 1999 by the
economic crises in Russia and Brazil. The Mexican debt and equities markets also have been adversely affected by
ongoing developments in the global credit markets. We cannot assure you that events in other emerging market countries,
in the United States or elsewhere will not materially adversely affect our business, financial condition or results of
operations.
Mexico has experienced a period of increasing criminal violence and such activities could continue to affect our
operations.
Recently, Mexico has experienced a period of increasing criminal violence, primarily due to the activities of
drug cartels and related organized crime. In response, the Mexican Federal Government has implemented various
security measures and has strengthened its military and police forces. Despite these efforts, drug-related crime continues
to exist in Mexico. These activities, their possible escalation and the violence associated with them has affected traffic
volumes on certain of our toll roads during recent years, and may in the future force the governmental authorities to adopt
certain drastic measures affecting the circulation of vehicles in, and our rights in connection with, certain of our toll roads,
all of which would have a negative effect on our business, financial condition and results of operations.
24
Risks Relating to our Shares
The market price of our Shares may fluctuate significantly and you could lose all or part of your investment.
Volatility in the market price of our Shares may prevent you from being able to sell your Shares at or
above the price you paid for your shares. The market price and liquidity of the market for our Shares may be
significantly affected by numerous factors, some of which are beyond our control and may not be directly related to
our operating performance. These factors include, among others:
significant volatility in the market price and trading volume of securities of companies in our sector, which are
not necessarily related to the operating performance of these companies;
investors’ perceptions of our prospects and the prospects of our sector;
difference between our actual financial and operating results and those expected by investors;
changes in earnings or variations in operating results;
operating performance of companies comparable to us;
actions by our Principal Shareholders with respect to the disposition of the Shares it beneficially owns or the
perception that such actions might occur;
additions or departures of key management personnel;
announcements by us or our competitors of significant acquisitions, divestitures, strategic partnerships, joint
ventures, or capital commitments;
new laws or regulations or new interpretations of laws and regulations, including tax guidelines, applicable to
our businesses or the Shares;
general economic trends in the Mexican, U.S. or global economies or financial markets, including those
resulting from war, incidents of terrorism or responses to such events; and
political conditions or events in Mexico, the United States and other countries.
In addition, although there is no present intention to do so, in the future, we may issue additional equity
securities or our Principal Shareholders may dispose of its interest in us. Any such issuances or sales or the prospect of
any such issuances or sales could result in a dilution of shareholders’ economic and voting rights in us or a negative
market perception in which could adversely affect the market price of the Shares.
An active and liquid market for the Shares may not develop.
We have not registered and we do not intend to register the shares under the Securities Act, and therefore the
shares will be subject to transfer restrictions in the United States and other jurisdictions. Although they trade on the
Mexican Stock Exchange, our shares have historically experienced and may continue to experience low trading volumes.
In addition, the Mexican Stock Exchange is the only trading market in Mexico and it is substantially smaller, less liquid,
more volatile, has a lower institutional investor base, and is more concentrated than major international securities
markets, such as those of the United States. Such market characteristics may substantially limit the capacity of holders of
our shares to sell them, or to sell them at such holders’ preferred price and time.
Our Principal Shareholders will continue to have significant influence over us after this offering, and their interests
could conflict with yours.
25
Our Principal Shareholders may influence the adoption of actions that could be contrary to your interests and
may be able to prevent other shareholders, including you, from blocking these actions or from causing different actions to
be taken. We cannot assure you that our Principal Shareholders will act in a manner consistent with your best interests. In
addition, actions by our Principal Shareholders with respect to the disposition of our shares, or the perception that such
action might occur, may negatively affect the trading prices of our shares.
Decisions regarding the payment and amount of dividends are subject to the influence of our Principal
Shareholders.
The payment of dividends and the amounts of such dividend payments are subject to the recommendation of our
board of directors and approval by our shareholders at a shareholders meeting. So long as our Principal Shareholders
continue to own a substantial amount of our shares, which they will continue to do upon the consummation of the Global
Offering, they will have the ability to influence decisions whether dividends are to be paid and the amount of any such
dividends. We have not paid dividends in the past and we cannot assure you that we will pay dividends in the future.
Furthermore, we cannot guarantee that our shareholders will approve the dividend policy recommended by our board of
directors, or what the terms thereof will be.
Our holding company structure may limit our ability to pay dividends to our shareholders because we will rely on
distributions from our operating subsidiaries.
We are a holding company with no operations. Therefore, we will be dependent upon the ability of our
operating subsidiaries to generate earnings and cash flows and distribute them to us in the form of dividends to enable us
to meet our expenses and to pay dividends to our shareholders. The ability of certain of our operating subsidiaries to
make distributions to us is subject to limitations under the terms of the securitizations and services agreements to which
they are party. In addition, toll collections generated by certain of our toll roads are pledged to service indebtedness under
securitization transactions. As a result, we do not receive such collections as cash flow. If, as a consequence of these
various limitations, we are unable to generate sufficient distributions from our operating subsidiaries, we may not be able
to declare or may be required to delay or cancel payment of dividends on our shares.
The ownership and transfer of our shares are subject to certain restrictions pursuant to Mexican law and our
bylaws.
The ownership and transfer of our shares are subject to certain restrictions pursuant to LMV and CNBV rules, as
well as other applicable Mexican securities laws, rules and regulations, including insider trading rules and disclosure
requirements.
Our bylaws provide that any person or group of persons acting in concert wishing to acquire 3% or more of the
outstanding shares of capital stock of Pinfra (or instruments convertible into shares or rights with respect to shares) from
any of the members of the Peñaloza Family, in a single transaction or a series of transactions, must obtain the prior
approval from the board of directors with a supermajority vote.
In the event that the intended purchaser obtains the board approval, it will be required to perform,
simultaneously with the acquisition, a mandatory tender offer to purchase our total outstanding shares (or instruments
convertible into shares or rights with respect to shares), unless the board waives such requirement when issuing its
approval, in the understanding that, if after the board’s approval but prior to the conclusion of the purchase, the board
receives an offer from a third party to purchase our total outstanding shares (or instruments referred to as convertible into
shares) on terms more favorable to our shareholders, the board may revoke the approval previously granted and authorize
the new transaction.
If the purchaser(s) fails to comply with such provisions of our bylaws, the breaching purchasers or shareholders
will not be entitled to exercise their rights with respect to the relevant shares (including economic rights) and such shares
will not be taken into account for purposes of calculating quorum or required majorities for the approval of resolutions at
any shareholders’ meetings. The Company will abstain from registering the purported purchasers or shareholders in the
stock registry ledger without giving effect to the registration undertaken by Indeval. The purchaser who acquires shares in
violation of these provisions will have to sell the shares to a third party who is approved and appointed by the board by
26
the affirmative vote of at least 66.66% of the total number of directors. See “Description of Capital Stock—Share
Purchase Restrictions.”
Such provisions of our bylaws may make it less attractive for certain entities to invest in our shares.
Additionally, such provisions may make it less likely that a premium payment over the market price of our shares could
be made to our existing shareholders.
Although members of the Peñaloza Family are participating in the Global Offering as Principal Selling
Shareholders, the shares they are offering represent, collectively, a maximum of 1.39% of our total outstanding capital
stock, such that the provisions described above will not be triggered.
The significant share ownership of our management and members of our board of directors, coupled with their
rights under our bylaws, may have an adverse effect on the future market price of our Shares.
As of December 31, 2012, the total beneficial shareholding of our directors and executive officers was
approximately 125,284,215, or 34.95%, of our outstanding shares. This amount included shares beneficially owned by
Mr. David Peñaloza Sandoval (the Chairman of our board of directors), Mrs. Adriana Graciela Peñaloza Alanís (one of
our directors) and Mr. David Peñaloza Alanís (our Chief Executive Officer).
Actions by our management and board of directors with respect to the disposition of the shares they beneficially
own, or the perception that such action may occur, may adversely affect the trading price of our Shares on the Mexican
Stock Exchange.
Our shareholders may be subject to liability for certain votes of their securities.
Our shareholders are not liable for our obligations. Shareholders are generally liable only for the payment of the
shares they subscribe. However, shareholders who have a conflict of interest with us and who do not abstain
from voting at the respective shareholders’ meeting may be liable for damages to us, but only if the transaction
would not have been approved without such shareholders’ votes.
Risks relating to the statements regarding the future
This Annual Report contains statements about the future. Such statements include, but without
limitation: (i) statements regarding the financial position and results of operations of the Company, (ii)
statements regarding plans, objectives or goals of the Company, including at respect to their activities, and
(iii) statements regarding the underlying assumptions that underlie such statements. Statements about the
future containing words such as "intends", "anticipates", "believes", "estimates", "expects", "forecasts",
"plans," "predicts," "seeks," "could," "should, "" may, "" guideline "and other words of similar, though not
the only terms used to identify such statements.
By their nature, the statements concerning the future involve risks and uncertainties both general and
specific, and it is possible that the Company fails to comply with the predictions, forecasts, projections and
other such statements. Investors are cautioned that there are many important factors that could cause the
Company's actual results to differ materially from the plans, objectives, expectations, estimates and
statements contained whether expressed or implied in the statements regarding the future, includi ng the
following:
restrictions on the ability of the Company to operate its current concessions profitable terms;
the revocation or surrender of the concessions of the Company;
restrictions on the ability to obtain new concessions and operate on profitable terms;
acts of the government and its regulatory functions regarding the concessions of the Company;
27
competition in the industry and markets of the Company;
increases in construction costs and operating expenses;
increased investments in assets of the Company and its inability to complete the construction of their projects
within time and budget for;
the performance of the national economy;
restrictions on the ability of the Company to cleave sources of funding on competitive terms;
the Company’s ability to service its debt;
the performance of financial markets and the ability of the Company to renegotiate its financial obligations to
the extent necessary;
foreign exchange restrictions and transfers of funds abroad;
the Company’s ability to implement corporate strategies;
the failure of systems information technology of the Company, including its data and communications systems;
natural disasters affecting the Company grants;
fluctuations in Exchange rates, interest rates of the rate of inflation;
the effect of changes in accounting policies, the promulgation of new laws, the intervention of government
authorities, issuing government orders or monetary or finance policy in Mexico;
traffic decrease on concessioned highways of the Company; and
other risk factors described in this section.
All statements regarding the future included in this Annual Report are subject to risks and uncertainties and
other factors described above. Investors are cautioned not to place undue reliance on statements about the future under
that they are only valid for the dates to which they refer. The events or circumstances could cause actual future results
to differ materially from historical results or projected.
If realized one or more of these factors or uncertainties materialize, or underlying assumptions prove incorrect,
actual results may differ materially from those desired, anticipated, expected, projected or forecast in this Annual
Report. Prospective investors should read the sections entitled "Executive Summary", "Comments and analysis of
management on the financial condition and results of operations" and "Description of the Business" to fully understand
the factors that may affect future performance the Company and the markets in which it operates.
Given the risks and uncertainties and assumptions described above, it is possible that the events
described in the statements about the future may not occur. Statements about the future are valid until the date
of this Annual Report and the Company undertakes no obligation to update or modify them as you get new
information or in response to events or future events. From time to time arise additional factors affecting the
Company's operations and it cannot predict all such factors or to assess their impact on its activities or the
extent to which a particular factor or set of factors could cause actual results to differ materially from those
expressed in the statements about the future. Although the Company believes that the plans and intentions and
expectations reflected in the statements about the future are reasonable, it cannot guarantee that will get take
out. In addition, investors should not interpret the statements concerning trends or previous activities as a
guarantee that such trends or activities will continue in the future. All forward-looking statements attributable
28
to the Company or its representatives, whether written, verbal or electronic form, are expressly subject to this
warning.
a) Other amounts
In September 1993, the Company made a public offering of "American Depositary Shares" ("ADSs"), each
representing 20 shares of capital stock of the Company, with which were listed on the New York Stock Exchange
("NYSE") . Based on this offer, the Company held on September 29, 1993 a contract of deposit (the "Deposit
Agreement") with Bank of New York Mellon (formerly, the New York Bank), as depositary (the "Custodian"). The
February 22, 2002, the ADSs were removed from the list of NYSE, but at the date of this registration statement, the
Deposit Agreement remains in force and the ADSs still outstanding.
We have been informed by the Depositary that, at December 31, 2012, 387,409 ADSs were in force in the
record of the Depositary.
b) Significant Changes to the Rights of Registered Amounts in the RNV
At the date of this Annual Report, the Company has not made any change in the rights of securities registered
in the RNV.
c) Public Documents
The documentation submitted by the Company to the CNBV and the BMV in order to obtain and maintain the
registration of the shares in the RNV and the BMV listing is available for consultation on the website of the CNBV,
www. cnbv.gob.mx, the website of the BMV, www.bmv.com.mx, and the website of the Company,
www.pinfra.com.mx.
The Company will provide to any shareholder upon request, copies of such documents, of this Annual Report and the financial, economic, accounting, administrative, legal and delivered on a quarterly and annual basis to the CNBV and the BMV, including, without limitation but not limited to, its annual audited financial statements, summaries of the resolutions adopted by the shareholders' meetings and the minutes thereof, the documents referred to in Article 84 of the Circular; reports on the degree of acceptance of the Company the Code of Best Corporate Practices, reports on the progress of business; reports on derivatives positions; attested copy of the bylaws and amendments thereto, general notices, public tender notices, notices of placement; prospects placement and informative supplements, and reporting of relevant events. Such application must be sent to the offices of the Company located in Bosque de Cidros No. 173, Colonia Bosques de las Lomas, 05120 Mexico City, or [email protected] email address, to the attention of Mr. Carlos Césarman Kolteniuk.
For more information about the Company, see the website of the same at the above address. The information contained
in this website is not part of this Annual Report or shall be included therein by reference.
2. The Issuer
a) History and development of the Issuer
The Company is a product of the reconciliation of bankruptcy proceedings and corporate restructuring and
operational Grupo Tribasa, SA de CV, a company founded in 1969 that became one of the largest operators of infrastructure
projects in the country. As part of this restructuring, in 2003 the new management team of the Company reached a final
agreement with creditors of the latter, after which the Company adopted a new business model focused on the promotion,
development and project management infrastructure. In 2005, we lifted the suspension of trading of its shares on the
Mexican Stock Exchange and in 2006 adopted the name " Promotora y Operadora de Infraestructura, S.A.B. de C.V"
dabbling with it a new era. The Company consolidated the stability of its balance sheet by holding several non-recourse
securitization transactions on several highways, which allowed him to seize new business opportunities such as investing in
new concessions, traffic volumes increase its existing concessions, invest in the operation of a port terminal, optimizing the
29
sites required for its operations asphalt and aggregate products, and reduce costs and corporate expenses. This strategy has
enabled the Company to generate significant value for shareholders.
As a result of this strategy, during the period of 2006-2012 the Company has consolidated its new business model
and has become a developer and operator of infrastructure projects in the opinion of the Company generates cash flows
growing and predictable. On this basis, developed a conservative long-term approach that allows you to plan for the future.
In the last six years, this strategy has allowed the Company to increase the number of concessions within its portfolio, from
eight in 2006 to 16 in 2012.
Currently, the Company leverages the benefits of his extensive experience in the construction, management and
ownership of concessions. The Company has strengthened its assets and obtained new concessions, creating a strong and
diversified portfolio of investments with a solid long-term financial structure and predictable cash flows that allow growing
steadily.
Company offices are located in Bosque de Cidros No. 173, Col. Bosques de las Lomas, Cuajimalpa, Zip Code
05120, Mexico City, telephone (55) 27890200.
b) Description of Business
i) Main Activity
The Company holds 16 concessions roads. The highway concession of the Company are located mainly in
Mexico City and the states of Mexico, Morelos, Puebla, Tlaxcala, Michoacán, Colima and Sonora, which are among the
most populated regions of the country. In 2010 these regions together accounted for approximately 37.1% of GDP and
34.4% of the national population. In general, dealers are responsible for the construction, operation, improvement and
maintenance of roads, subject to the specific terms of each concession. Most grants are awarded by the Federal
Government, through the SCT. Although the Company has been successful in the competitive segment of concessions
for infrastructure projects at the federal, historically has focused on another segment in which there has been less
competition to win concessions: concessions for the construction and operation of roads and state highways, which are
issued by the governments of various states following the model developed by the SCT. The duration of the concession
roads is approximately 27 years.
Usually, the concession holder assumes the obligation road construction or improvement of the relevant project
in order to operate and maintain it in good condition. Grantees may assign its rights and obligations to third parties prior
authorization from the competent authorities. Concession contracts contain provisions relating to the time in which the
work to be completed, the requirements for operation and maintenance, the standards that must adhere, how the
government will oversee the project, the creation of reserves to cover maintenance costs, the amount payable to the
government by way of taxes and duties, tolls and fees to be charged (including adjustment based on inflation). The
dealer is responsible for repairing the roads as necessary during the term of the concession. As consideration for the
construction, operation and / or maintenance of a road, the dealer is entitled to retain virtually all income (i.e. tolls)
generated by the project during the term of the concession. In general concession titles may establish a minimum
guaranteed rate of return and in other cases the award would terminate once the established rate of income has been
achieved by the concessionaire. Upon expiration of the grant, the right to operate the project and collect tolls reverts to
government without compensation to the concessionaire. The ownership of the roads and all improvements and repairs
corresponds at all times to the government.
Under federal law, since December 1993 the maximum term of a concession road is 30 years. However, certain
concessions provide for the possibility that the dealer request its extension for a period equal to the original (i) after the
third stage of life, if in the opinion of the SCT is necessary make additional investments to those specified in the
original contract and (ii) at any time, for justifiable reasons not attributable to the concessionaire, such as failure to
obtain or delay in obtaining Right of Way Liberation Similarly, state law provides that the concessions will be valid 30
years and under certain circumstances may be extended for additional periods of 15 to 30 years upon request of the
licensee. Usually concession agreements provide that in the event that the volume of traffic exceeds a certain level, the
term of the grant will be reduced or the dealer must pay the government a portion of the funds generated by the
corresponding highway.
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The SCT has the right to revoke any concessions before maturity, without compensation to the concessionaire,
in the event of the occurrence of certain events. In addition, the government has the right to "rescue" all assets related to
the concession in the event of war, serious public disorder, threat to internal peace or economic policy issue or public
interest. In accordance with the law, in such a case the government is obliged to compensate the concessionaire. For
more information, see "Law and tax situation."
The operation of all highway concession and Morelos Tranche Opervite is in charge of a subsidiary of the
Company whose financial results are consolidated with those of the latter. Opervite receives fees as compensation for
management services rendered in its capacity as operator of such projects. The fees and expenses paid by the concession
holders Opervite are removed from the consolidated financial statements of the Company and its subsidiaries.
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ii) Description of the concessions
The following table sets forth key data of the concessions of the company:
Concession
Year
granted
Initiated
operations Expiration Location
Road
length ADTV
Percentaje
owned by us
Concession
revenues as
a % of total
revenues for
the year ended
December
31, 2012
Concession
revenues as
a % of total
revenues for
the year ended
December
31, 2011
Status
(km)
Securitized Toll
Road
Concessions:
1 Mexico-Toluca 1989 1990 2040 Mexico City/
State of Mexico 19 58,473 100% 29.27% 28.62% Operational
2 Peñón-Texcoco 1993 1994 2053 State of Mexico 16 31,315 100% 7.41% 8.90% Operational
3 Tenango-Ixtapan
de la Sal 1994 1995 2054 State of Mexico 40 5,724 100% 3.04% 3.22% Operational
We cannot predict the extent to which a trading market in Mexico, the United States or elsewhere will develop
with respect to our Shares. We also cannot predict the liquidity of any trading market for our Shares, should any develop.
If the trading volume of our Shares on the BMV falls below certain levels, the price for our Shares may be affected and
our Shares may be delisted or deregistered in that market.
Trading on the BMV
The BMV commenced operations in 1907 and is the only stock exchange in Mexico. The BMV is organized as
a variable capital public stock corporation (sociedad anónima bursátil de capital variable). Securities trading on the
BMV occurs each business day from 8:30 a.m. to 3:00 p.m., Mexico City time, subject to adjustments to operate during
times in which markets in the United States are open.
Since January 1999, all trading on the BMV has been electronic. The BMV may impose a number of measures
to promote an orderly and transparent trading price of securities, including mechanisms of automatic suspension of
trading in shares of a particular issuer, and in times of extreme fluctuations generally of the BMV when price fluctuations
exceed certain limits.
The period for settlement of the sale of shares on the BMV is three business days following the sale. Deferred
settlement is not permitted without the prior approval of the BMV. The certificates representing most securities traded on
the BMV, including our shares, are deposited with Indeval, an institution in charge of acting as a securities depositary
performing as a clearinghouse, depositary and custodian, as well as an agent for settlement, transfer and registration of
BMV transactions, eliminating the need for the physical transfer of securities.
Settlement of transactions through the BMV must be done in pesos except that, under certain limited
circumstances, settlement in foreign currencies may be permitted.
Although the LMV provides for the existence of an over-the-counter market, no such market for securities in
Mexico has developed.
Shares issued by foreign entities may be traded by brokerage firms and lending institutions through the
International Foreign Trading System (Sistema Internacional de Cotizaciones) or SIC, pursuant to the LMV. These
securities may be listed through the SIC provided that (i) they are not already listed on the RNV, (ii) the home market of
the company issuing the shares has received, based on its characteristics, recognition from the CNBV and (iii) they
satisfy the in-house requirements of the applicable stock exchange.
The trading in shares of a particular issuer may be suspended by the BMV when there is price or volume
78
volatility or when changes in the trading pattern of the relevant shares are not consistent with the historic performance of
the shares of the relevant issuer and such volatility or changes may not be explained solely through information made
publicly available pursuant to the CNBV’s general regulations.
Market Regulation and Registration Standards
The Mexican Banking Commission (Comisión Nacional Bancaria) was established in 1925 with the purpose of
regulating banking activity and, in 1946, the Mexican Securities Commission (Comisión Nacional de Valores) was
established to regulate stock market activity. In 1995, the CNBV was created as a result of the merger of these two
governmental agencies.
The CNBV is in charge of regulating the public offering and trading of securities and participants in the
Mexican securities market and has authority to impose sanctions for insider trading and other violations of the LMV.
The CNBV also supervises and regulates the Mexican securities market, the BMV, and brokerage firms through its staff
and a board of governors formed of 13 members.
The Mexican Securities Market Law
Publicly traded companies are principally regulated by the provisions of the LMV and supplementary regulated
by the LGSM. The LMV was enacted and published in the Official Gazette on December 30, 2005, and became
effective on June 28, 2006. Companies that were publicly traded at such time were provided a period of 180 days to
adjust their bylaws pursuant to the new corporate governance provisions. The LMV changed the then Mexican securities
regulation in various material respects, introducing reforms aiming to bring the Mexican regulatory framework applicable
to the securities market and publicly traded companies up to international standards.
The LMV, among other relevant aspects, (i) sets forth that public companies and the entities controlled by them
(e.g., majority and wholly owned subsidiaries) are considered a single economic unit, (ii) clarifies the rules for tender
offers, dividing them into voluntary and mandatory categories, (iii) clarifies standards for disclosure of shareholder
holdings in public companies, (iv) expands and strengthens the role of the board of directors of public companies, (v)
clarifies and defines the responsibility and standards applicable to the board of directors and the duties of the board, each
director, its secretary, the chief executive officer and other executive officers, (vi) replaces the role of statutory auditor
(comisario) and its duties with an audit committee, a corporate practices committee and external auditors, (vii) improves
the rights of minority shareholders relating to legal remedies and access to company information, (viii) introduces
concepts such as consortiums, groups of related persons or entities, control, related parties and decision-making power,
(ix) expands the definition of applicable sanctions for violations of the LMV, including punitive damages, (x) clarifies
rules relating to types of equity securities that may be offered by public companies, (xi) sets forth rules for share
repurchases and (xii) specifies requirements for anti-takeover measures.
Under the LMV, public companies must have a board of directors comprised of no more than 21 members, of
which at least 25% must be independent. Independent board members must be selected at the issuer’s general ordinary
shareholders’ meeting based on their experience, ability and reputation, among other factors. The conclusion as to
whether a director is independent is made by the issuer’s shareholders, and such determination may be challenged by the
CNBV. As a departure from legislative precedents, the LMV permits current members of the board of directors, under
certain circumstances, to appoint, on a temporary basis, new members of the board of directors. The LMV permits the
designation of provisional directors without shareholders’ meeting approval when a substitute for the relevant director
has not been designated, or the designee has not accepted such position, or when a director’s membership is revoked
pursuant to the terms of Article 155 of the LGSM. In the event provisional directors have been designated, the next
following shareholders’ meeting must consider ratifying such appointments or designate substitute directors. The LMV
also introduced concepts such as the duty of care, duty of loyalty and certain safe harbors, in connection with the
performance of the members of the board.
Broadly defined, the duty of care calls for the members of the board to obtain sufficient information and be
sufficiently prepared to support their decisions, and to act in the best interests of the public company. The duty of care is
principally complied with when a director requests and obtains from the issuer or officers of the issuer, as the case may
be, all information that may be necessary to participate in discussions requiring the presence of such director, and by
79
requesting and obtaining information from third-party experts, as well as by attending board meetings and disclosing
material information in possession of such board member. Failure of a director to act pursuant to the duty of care would
make the relevant director jointly and severally liable for damages and losses caused to the company and its subsidiaries,
which may be limited (other than in the case of bad faith, willful misconduct and illegal acts) under the company’s
bylaws or by resolution of a shareholders’ meeting. Liability for a breach of the duty of care may also be covered by
indemnification provisions and director and officer liability insurance policies.
The duty of loyalty primarily consists of maintaining the confidentiality of information received in connection
with the performance of a director’s duties and abstaining from discussing or voting on matters where the board member
has a conflict of interest. Additionally, the duty of loyalty is breached where a director knowingly favors the interests of a
shareholder or group of shareholders without the express approval of the board of directors, and when a director takes
advantage of a corporate opportunity. The duty of loyalty further implies not disclosing information that is false or
misleading, or omitting to register any such information in the issuer’s minute books and other corporate records. The
duty of loyalty is also breached if the director uses corporate assets or approves the use of corporate assets in violation of
an issuer’s policies, discloses false or misleading information, orders or causes an incorrect entry of any transaction in an
issuer’s records that could affect its financial statements, or causes material information not to be disclosed or to be
modified. The violation of the duty of loyalty makes the relevant directors jointly and severally liable for damages and
losses caused to the company and its subsidiaries. This liability also arises if damages and losses are sustained as a result
of benefits wrongfully obtained by the director or directors or third parties as a result of activities carried out by the
breaching board member. As opposed to the duty of care, liability for breach of the duty of loyalty may not be limited by
the company’s bylaws, by resolution of the shareholders’ meeting or otherwise.
Claims for liability of the breach of the duty of care and the duty of loyalty may be made solely for the benefit of
an issuer (as a derivative suit) and may only be made by the issuer or directly by shareholders holding shares of any class
representing at least five percent of the aggregate amount of such issuer’s outstanding capital stock.
As a safe-harbor for directors, the liabilities described above do not arise if the director acted in good faith and
(i) complied with applicable law and the bylaws of the issuer, (ii) the decision was made based on information provided
by officers, external auditors or third-party experts, the capacity and credibility of which were not subject to reasonable
doubt, (iii) adverse effects of such decision were not reasonably foreseeable and (iv) the actions were taken in compliance
with resolutions adopted at the shareholders’ meeting.
Under the LMV, an issuer’s principal executives are also required to act for the benefit of the public company
and not for the benefit of any shareholder or group of shareholders. Principal executives are required to submit major
business strategies to the board of directors for approval, submit proposals for internal controls to the audit committee,
disclose all material information to the public and maintain adequate accounting and registration systems and
mechanisms for internal control.
The LMV requires that public companies have audit and corporate practices committees. The audit committee
must consist of at least three members appointed by the board of directors, and each member must be independent. The
principal activities of the audit committee are to (i) supervise the external auditors of the company and analyze their
reports; (ii) inform the board of directors of matters relating to the company’s controls; (iii) review related party
transactions; (iv) request the issuer’s executive officers to prepare all reports as may be necessary; (v) report any financial
irregularities to the board of directors, (vi) supervise the activities of the issuer’s executives and (vii) provide an annual
report to the board of directors. The activities performed by the audit committee, together with certain obligations now
entrusted to the board of directors, replace the statutory auditor (comisario), a position previously required for public
companies by the Mexican Corporations Law.
The corporate practices committee must consist of at least three members appointed by the board of directors.
Each member of a corporate practices committee of a company must be independent, except for corporations controlled
by a person or group holding 50% or more of the outstanding capital stock of the related company, in which case only the
majority of the members of the committee in charge of corporate practice functions must be independent. The corporate
practices committee is in charge of corporate practice functions and is required to (i) provide corporate practice opinions
to the board of directors, (ii) request and obtain opinions from independent third-party experts (primarily in respect of
transactions with related parties and securities transactions), (iii) call shareholders’ meetings, (iv) provide assistance to the
80
board of directors in connection with the preparation of annual reports and (v) provide an annual report to the board of
directors.
The LMV also requires that any transaction or series of transactions which in the aggregate represent 20% or
more of the consolidated assets of a public company during any fiscal year be approved at a shareholders’ meeting.
In addition, the LMV provides minority shareholders’ rights, including (i) certain rights granted to shareholders
representing five percent or more of the outstanding capital stock of the issuer to initiate a shareholder derivative suit for
the benefit of the issuer in an amount equal to the damages or losses incurred by the issuer against directors for a breach
of the duty of care or the duty of loyalty, (ii) the right of shareholders representing at least 10% of the outstanding voting
shares of the issuer to appoint a board member, call a shareholders’ meeting and request that vote on matters of which
they were not sufficiently informed be postponed, and (iii) rights of holders of at least 20% of the outstanding voting
shares of the issuer to judicially oppose resolutions that were passed by a shareholders’ meeting and file a petition for a
court order to suspend the resolution under certain circumstances.
Limited or Non-voting Shares
Under the LMV, a public company may not allow for its common shares and limited- or non-voting shares to be
jointly traded or offered to public investors, unless (i) the limited- or non-voting shares are convertible into common
shares within a period of no more than five years or (ii) if the voting rights of the shares or the securities representing
such shares are limited solely as a result of the nationality of the holder and compliance with foreign investment laws.
The aggregate amount of shares with limited or non-voting rights that are not convertible may not exceed 25% of the
aggregate amount of publicly traded shares. The CNBV may authorize an increase of this 25% limit, provided that the
limited- or non-voting shares exceeding 25% of the aggregate amount of publicly held shares are convertible into
common shares within five years of their issuance.
Disclosure of Shareholders’ Agreements
Shareholders of a public company must notify the issuer within five business days following the execution of
any shareholders’ agreements (i) containing non-compete clauses, (ii) governing the sale, transfer or exercise of
preemptive rights (as set forth under article 132 of the LGSM) or (iii) which allow for the sale and purchase of shares,
voting rights, and sale of shares in a public offering. The public company is then required to disclose the existence of any
such agreement to investors through the stock exchanges on which its securities are traded and to disclose such
agreements in an annual report prepared by the company. These agreements are required to be available for the public to
review at the company’s offices. These shareholders’ agreements are not enforceable against the company and their
breach will not affect the validity of the vote at shareholders’ meetings, and will only be effective between the parties
until they have been disclosed to the public.
Regulations Applicable to Issuers, Brokerage Firms and Other Market Participants
In March 2003, the CNBV issued certain general regulations (Circular Única de Emisoras) applicable to issuers
and other securities market participants. Such regulations, which repealed several previously enacted CNBV regulations
(circulares), provided a single set of rules governing issuers and issuer activity, among other things. In September 2006,
these general regulations were amended to give effect to the provisions of the then recently enacted LMV, and have been
amended from time to time thereafter by the CNBV.
Additionally, in September 2004, the CNBV issued general rules applicable to brokerage firms, (the “Rules for
Brokerage Firms,” Circulares Aplicables a Casas de Bolsa). The Rules for Brokerage Firms now provide a single set of
rules governing, among other things, participation of Mexican underwriters in public offerings.
Registration and Listing Standards
Only securities that have been registered with the RNV pursuant to the CNBV’s approval may be listed on the
BMV, although the CNBV’s approval for registration does not imply any kind of certification or assurance related to the
investment quality of the securities, the solvency of the issuer, or the accuracy or completeness of any information
81
delivered to the CNBV.
To offer securities to the public in Mexico, an issuer must comply with certain qualitative and quantitative
requirements set forth in the general regulations issued by the CNBV. Generally, the general regulations provide that the
BMV must adopt and implement minimum requirements for issuers to maintain the listing of their securities in Mexico
related to matters such as operating history, financial and capital structure, minimum trading volumes and minimum
public floats, among others. The CNBV may waive some of these requirements in certain circumstances. In addition,
some of the requirements are applicable to each class of shares of the relevant issuer.
The BMV will review compliance with the requirements described above and other requirements on an annual,
semi-annual and quarterly basis, and may also do it at any other time.
The BMV must inform the CNBV of the results of its review and this information must, in turn, be disclosed to
investors. If an issuer fails to comply with any of the listing requirements, the BMV will request that the issuer propose a
plan to comply with such requirements. The BMV will temporarily suspend the trading of the relevant series of shares,
on the BMV, if the public company (i) fails to propose a plan, (ii) the plan is not satisfactory to the BMV or (iii) an issuer
does not make substantial progress with respect to the corrective measures. If an issuer further fails to propose a plan or
ceases to follow the plan once proposed, the CNBV may cancel the registration of the shares, in which case the majority
shareholder or any controlling group must carry out a tender offer to acquire 100% of the outstanding shares of the issuer,
in accordance with the tender offer rules discussed below.
Reporting Obligations
Public companies with listed securities are required to file unaudited quarterly financial statements and audited
annual financial statements, as well as certain periodic reports, with the CNBV and the BMV, as follows:
an annual report prepared in accordance with the CNBV’s general regulations by no later than April 30 of each
year;
quarterly reports within 20 business days following the end of each of the first three quarters and 40 business
days following the end of the fourth quarter;
reports disclosing material events promptly upon their occurrence;
reports regarding corporate restructurings such as mergers, acquisitions, splits or assets sales approved by
shareholders’ meetings or the board of directors; and
reports regarding the policies and guidelines with respect of the use of the company’s (or its subsidiaries’)
assets by “related persons.”
Required informational filings with the BMV are performed through an automated electronic information
transfer system (Sistema Electrónico de Envío y Difusión de Información or “SEDI”), implemented by the internal rules
of the BMV, pursuant to the CNBV’s general regulations. The CNBV’s general regulations and the rules of the BMV
require issuers of listed securities to file information through SEDI that relates to any act, event or circumstance that
could influence an issuer’s share price. If listed securities experience unusual price volatility, the BMV will immediately
request that the issuer inform the public as to the causes of the volatility or, if the issuer is unaware of the causes, that the
issuer make a statement to that effect. In addition, the BMV will immediately request that the issuer disclose any
information relating to relevant material events, when it deems the information currently disclosed to be insufficient, as
well as instruct the issuer to clarify information when necessary. The BMV may request that issuers confirm or deny any
material events that have been disclosed to the public by third parties when it deems that the material event may affect or
influence the securities being traded. The BMV must immediately inform the CNBV of any such requests.
Public companies must prepare and disclose their financial information through a BMV-approved electronic
financial information system (Sistema de Información Financiera y Contable de las Emisoras or “SIFIC”). Financial
82
information submitted via SIFIC are immediately available to the public upon its receipt by the BMV.
The CNBV may also make any of the informational requests directly to an issuer. An issuer may defer the
disclosure of material events under certain circumstances, so long as (i) the issuer implements adequate confidentiality
measures (including maintaining records of persons or entities in possession of material non-public information), (ii) the
information is related to incomplete transactions, (iii) there is no misleading public information relating to the material
event and (iv) no unusual price or volume fluctuation occurs.
If an issuer’s securities are traded on both the BMV and a foreign securities exchange, the issuer must
simultaneously file the information that it is required to file pursuant to the laws and regulations of the foreign jurisdiction
with the CNBV and the BMV.
Suspension of Trading
In addition to the authority of the BMV under its internal regulations as described above, pursuant to the rules of the
CNBV, the CNBV and the BMV may suspend trading in an issuer’s listed securities (i) if the issuer does not disclose a material
event, or (ii) when there is price or volume volatility or when changes in the trading pattern of the relevant shares are not
consistent with the historic performance of the shares of the relevant issuer and such volatility or changes may not be
explained solely through information made publicly available pursuant to the CNBV’s general regulations. Any such
suspension must be immediately disclosed by the BMV to the CNBV and the general public. An issuer may request that the
CNBV or the BMV resume trading, provided that the issuer demonstrates that the causes triggering the suspension have been
resolved and, if applicable, that it is in full compliance with the reporting requirements under applicable law. The BMV may
reinstate trading in suspended shares when it deems that the material events have been adequately disclosed to investors, when
it deems that the issuer has adequately explained the reasons for the price and volume volatility or when the events affecting the
share price have ceased to exist. If an issuer’s request is granted, the BMV will determine the appropriate mechanism to resume
trading. If trading in an issuer’s securities is suspended for more than 20 business days and the issuer is authorized to resume
trading without conducting a public offering, the issuer must disclose through SEDI the causes that resulted in the suspension
and reasons why it is now authorized to resume trading, before trading may resume.
In cases where the relevant securities are simultaneously traded on stock exchanges located outside of Mexico, the
BMV may consider the measures adopted by other non-Mexican stock exchanges to suspend and/or resume trading in an
issuer’s shares.
Insider Trading, Trading Restrictions and Disclosure Requirements
Specific regulations regarding insider trading are set forth in the LMV, including:
the requirement that persons in possession of information deemed privileged abstain (i) from trading, directly
or indirectly, in any relevant issuer’s securities whose trading price could be affected by such information, (ii)
from making recommendations to third parties to trade in such securities (except for those entitled to such
information due to their role or employment position) and (iii) from trading in options and derivatives of the
underlying security issued by such authority;
the requirement that the following persons must notify the CNBV of any transactions undertaken as in respect
of a listed issuer’s stock: (i) members of a listed issuer’s board of directors, (ii) shareholders controlling 10%
or more of a listed issuer’s outstanding share capital, (iii) groups controlling 25% or more of a listed issuer’s
outstanding share capital and (iv) other insiders.
In addition, under the LMV insiders must abstain from purchasing or selling securities of the issuer within 90
days from their last sale or purchase, respectively. Subject to certain exceptions, any acquisition of a public company’s
shares that results in the acquirer owning between 10.0% and 30.0% of an issuer’s outstanding capital stock must be
publicly disclosed to the CNBV and the BMV by no later than one business day following the acquisition.
Any acquisition by an insider that results in the insider holding an additional five percent or more of a public
83
company’s outstanding capital stock must also be publicly disclosed to the CNBV and the BMV no later than one
business day following the acquisition. Certain insiders must also notify the CNBV of share purchases or sales that occur
within any three-month or five-day period and that exceed certain value thresholds. The LMV requires that convertible
securities, warrants and derivatives be settled in kind and be taken into account in the calculation of share ownership
percentages.
Tender Offers
Provisions relating to public tender offers in Mexico are set forth in the LMV. Tender offers may be voluntary
or mandatory. Voluntary tender offers and mandatory tender offers are each subject to the prior approval of the CNBV
and must comply with general legal and regulatory requirements. Any intended acquisition of a public company’s shares
that results in the buyer owning 30% or more, but less than a percentage that would result in the buyer acquiring control
of the company, requires the buyer to make a mandatory tender offer for the greater of (i) the percentage of the capital
stock intended to be acquired or (ii) 10% of the company’s outstanding capital stock. Any acquisition of a public
company’s shares that is undertaken to obtain voting control requires the potential buyer to make a mandatory tender
offer for 100% of the company’s outstanding capital stock. The CNBV may, however, permit a tender offer for less than
100% under certain circumstances.
A tender offer must be made to all shareholders of any classes of shares at the same price. The board of
directors, with the advice of the audit committee, must issue its opinion in respect of any tender offer resulting in a
change of control, which opinion must consider minority shareholder rights. This opinion may be accompanied by an
independent fairness opinion.
All tender offers must be open for at least 20 business days and purchases thereunder are required to be made
pro rata to all tendering shareholders. Pursuant to the LMV, the payment of certain amounts to controlling shareholders
over and above the offering price are permitted, if such amounts are fully disclosed, approved by the board of directors
and paid in connection with non-compete or similar obligations of such controlling shareholders. The LMV also
provides certain exceptions to the mandatory tender offer requirements and specifically sets forth remedies for non-
compliance with tender offer rules (e.g., suspension of voting rights, possible annulment of purchases, among others) and
other rights available to former shareholders of the issuer.
Additionally, pursuant to the LMV, any convertible securities, warrants and derivatives that can be settled in
kind representing underlying listed securities, are required to be taken into account in the calculation of the individual or
group of individuals that, directly or indirectly, intends to acquire shares of a public company.
Anti-Takeover Protections
The LMV allows public companies to include anti-takeover provisions in their bylaws, provided that such
provisions:
are approved by a majority of the shareholders, without the opposing vote of shareholders representing five
percent or more of the capital stock present at the meeting; and
do not (i) exclude any shareholders or group of shareholders, (ii) preclude a change of control or (iii)
contravene legal provisions related to tender offers or have the effect of disregarding the economic rights of the
shares held by the acquiring party.
84
% Part. N° Actions
Total PUBLIC INVESTOR 100% 380,123,523
Promotora y Operadora de Infraestructura, S.A.B de C.V.99.996% 26,039
Promocarreteras, S.A. de C.V. 0.004% 1
Total 100% 26,040
Pinfra Sector Construcción, S.A. de C.V.91.14% 1,180,294,836 Promotora y Operadora de Infraestructura, S.A.B de C.V.99.999% 4,071,255,578 Promotora y Operadora de Infraestructura, S.A.B de C.V.73.2% 340,590,802
Grupo Concesionario de México, S.A. de C.V.8.86% 114,720,598 Tribasa Sector Inmobiliario, S.A. de C.V. 0.001% 50,001 Grupo Concesionario de Mexico, S.A. de C.V.27% 124,628,010
Tribasa Sector Materiales e Insumos, S.A. de C.V.0.00% 1 Total 100% 4,071,305,579 Pinfra Sector Construcción, S.A. de C.V.0% 1
Total 100% 1,295,015,435 Total 100% 465,218,813
Grupo Concesionario de México, S.A. de C.V.70% 4,550,000
Pinfra Sector Construcción, S.A. de C.V.83.15% 134,007,020 Promotora y Operadora de Infraestructura, S.A.B de C.V.30% 1,950,000 Tribasa Sector Inmobiliario, S.A. de C.V.100% 1,545,253
Promotora y Operadora de Infraestructura, S.A.B de C.V.16.85% 27,155,481 Total 100% 6,500,000 Promotora y Operadora de Infraestructura, S.A.B de C.V.0% 1
Total 100% 161,162,501 Total 100% 1,545,254
Grupo Concesionario de México, S.A. de C.V.70% 256,273
Pinfra Sector Construcción, S.A. de C.V.99.90% 80,168,283 Promotora y Operadora de Infraestructura, S.A.B de C.V.30% 109,322 Tribasa Sector Inmobiliario, S.A. de C.V.100% 43,750,379
Promotora y Operadora de Infraestructura, S.A.B de C.V.0.10% 81,841 Total 100% 365,595 Promotora y Operadora de Infraestructura, S.A.B de C.V.0% 1
Total 100% 80,250,124 Total 100% 43,750,380
Grupo Concesionario de México, S.A. de C.V.100% 19,999
Pinfra Sector Construcción, S.A. de C.V.100% 204,469,716 Promotora y Operadora de Infraestructura, S.A.B de C.V.0% 1 Tribasa Sector Inmobiliario, S.A. de C.V.100% 161,435
Promotora y Operadora de Infraestructura, S.A.B de C.V.0.00% 1 Adepay, S.A. de C.V. 100% 262,831,773 Total 100% 20,000 Promotora y Operadora de Infraestructura, S.A.B de C.V.0% 1
Total 100% 204,469,717 Promotora y Operadora de Infraestructura, S.A.B de C.V.0% 1 Total 100% 161,436
Total 100% 262,831,774
Grupo Concesionario de México, S.A. de C.V.76.99% 277,349,999
Pinfra Sector Construcción, S.A. de C.V.100% 163,183,596 Tribasa Sector Construcción, S.A. de C.V.22.97% 82,750,759 Tribasa Sector Inmobiliario, S.A. de C.V.100% 734,999
Grupo Concesionario de México, S.A. de C.V.0% 2 Promotora y Operadora de Infraestructura, S.A.B de C.V.0.04% 129,001 Promotora y Operadora de Infraestructura, S.A.B de C.V.0% 1
100% 119,100,913 Total 100% 360,229,759 Total 100% 735,000
0% 1 Promotora y Operadora de Infraestructura, S.A.B de C.V.0% 1
Total 100% 163,183,599 Total 100% 119,100,914
Grupo Concesionario de México, S.A. de C.V.100.00% 384,999,999
Pinfra Sector Construcción, S.A. de C.V.84% 43,176,000 Promotora y Operadora de Infraestructura, S.A.B de C.V.0.00% 1
Promotora y Operadora de Infraestructura, S.A.B de C.V.16% 8,224,000 100% 119,460,196 Total 100% 385,000,000
Total 100% 51,400,000 Promotora y Operadora de Infraestructura, S.A.B de C.V.0% 1
Total 100% 119,460,197
Infraesctura Portuaria Mexicana, S.A. de C.V.100% 18,457,307
Pinfra Sector Construcción, S.A. de C.V.50% 108,010,000 Salvador Sánchez 0% 500
Total 100% 18,457,807
40% 86,408,000 77.75% 43,046,002
Grupo Adriática, S.A de C.V. 10.73% 5,939,975
10% 21,602,000 Eloy Puente Bañuelos 4.69% 2,593,876 Grupo Concesionario de México, S.A. de C.V.100% 49,999
Total 100% 216,020,000 Ma.del Pilar Díaz de León 3.42% 1,891,127 Promotora y Operadora de Infraestructura, S.A.B de C.V.0% 1
Blanca M.Chavez Ardura 3.42% 1,891,127 Total 100% 50,000
Total 100% 55,362,107
Pinfra Sector Construcción, S.A. de C.V.93.30% 280,890,643
Grupo Concesionario de México, S.A. de C.V.6.64% 19,999,999 Grupo Concesionario de México, S.A. de C.V.79.16% 10,442
Promotora y Operadora de Infraestructura, S.A.B de C.V.0.06% 176,888 Promotora y Operadora de Infraestructura, S.A.B de C.V.20.84% 2,749
Total 100% 301,067,530 Total 100% 13,191
Pinfra Sector Construcción, S.A. de C.V.98% 49,000 Grupo Concesionario de México, S.A. de C.V.100% 11,209,425
Promotora y Operadora de Infraestructura, S.A.B de C.V.2% 1,000 Promotora y Operadora de Infraestructura, S.A.B de C.V.0% 1
Total 100% 50,000 Total 100% 11,209,426
Pinfra Sector Construcción, S.A. de C.V.100% 49,999
Promotora y Operadora de Infraestructura, S.A.B de C.V.0% 1 Grupo Concesionario de México, S.A. de C.V.50% 49,999
Total 100% 50,000 Promotora y Operadora de Infraestructura, S.A.B de C.V.0% 1
Grupo Mexicano de Desarrollo, S.A. de C.V.50% 50,000
Total 100% 100,000
Pinfra Sector Construcción, S.A. de C.V.100% 183,500,999
Promotora y Operadora de Infraestructura, S.A.B de C.V.0% 1
Total 100% 183,501,000 Grupo Concesionario de México, S.A. de C.V.44% 220
Thames Water International Services Holdings LTD.44% 220
Epycsa, S.A. de C.V. 12% 60
Pinfra Sector Construcción, S.A. de C.V.100% 61,950,999 Total 100% 500
Promotora y Operadora de Infraestructura, S.A.B de C.V.0% 1
Total 100% 61,951,000
Grupo Concesionario de México, S.A. de C.V.45% 49,999
Promotora y Operadora de Infraestructura, S.A.B de C.V.0% 1
Pinfra Sector Construcción, S.A. de C.V.100% 356,299,999 Grupo Mexicano de Desarrollo, S.A. de C.V.45% 50,000
Promotora y Operadora de Infraestructura, S.A.B de C.V.0% 1 Desarrollo de Infraestrarestructura de Morelos, S.A. de C.V.10% 11,111
Total 100% 356,300,000 Total 100% 111,111
Pinfra Sector Construcción, S.A. de C.V.100% 39,149,999 Grupo Concesionario de México, S.A. de C.V.100.00% 49,999
Promotora y Operadora de Infraestructura, S.A.B de C.V.0% 1 Promotora y Operadora de Infraestructura, S.A.B de C.V.0.00% 1
Total 100% 39,150,000 Total 100% 50,000
Pinfra Sector Construcción, S.A. de C.V.100% 30,849,999
Promotora y Operadora de Infraestructura, S.A.B de C.V.0% 1
Total 100% 30,850,000
Pinfra Sector Construcción, S.A. de C.V.71% 3,550
Promotora y Operadora de Infraestructura, S.A.B de C.V.29% 1,450
Total 100% 5,000
Pinfra Sector Construcción, S.A. de C.V.100% 49,999
Promotora y Operadora de Infraestructura, S.A.B de C.V.0% 1
Total 100% 50,000
Pinfra Sector Construcción, S.A. de C.V.100% 49,999
Promotora y Operadora de Infraestructura, S.A.B de C.V.0% 1
Total 100% 50,000
Pinfra Sector Construcción, S.A. de C.V.100% 49,999
Promotora y Operadora de Infraestructura, S.A.B de C.V.0% 1
Total 100% 50,000
Pinfra Sector Construcción, S.A. de C.V.100% 7,244,999
Promotora y Operadora de Infraestructura, S.A.B de C.V.0% 1
Total 100% 7,245,000
Pinfra Sector Construcción, S.A. de C.V.99.95% 1,889,000
Promotora y Operadora de Infraestructura, S.A.B de C.V.0.05% 1,000
Total 100% 1,890,000
Pinfra Sector Construcción, S.A. de C.V.100% 49,999
Promotora y Operadora de Infraestructura, S.A.B de C.V.0% 1
Total 100% 50,000
Pinfra Sector Construcción, S.A. de C.V.100% 6,749,999
Promotora y Operadora de Infraestructura, S.A.B de C.V.0% 1
Total 100% 6,750,000
Pinfra Sector Construcción, S.A. de C.V.98% 49
Promotora y Operadora de Infraestructura, S.A.B de C.V.2% 1
Total 100% 50
Pinfra Sector Construcción, S.A. de C.V.100% 49,999
Promotora y Operadora de Infraestructura, S.A.B de C.V.0% 1
Total 100% 50,000
P R O M O T O R A Y O P E R A D O R A D E I N F R A E S T R U C T U R A, S. A. B. D E C. V.
S H A R E S T R U C T U R E (December 2012)
SHAREHOLDERS
Concesionaria Monarca, S.A.de C.V.
Promotora y Administradora de Carreteras, S.A.de C.V.
Equivent, S.A. de C.V. Grupo Turistico de Colima, S.A.de C.V.
Basic earnings per common share (in Pesos) ………………………... 5.01 2.79
Weighted average shares (in shares) ………………………... 364,275,800 335,169,534
b) Sources of funding – Description of securitizations
General
Historically, the main sources of liquidity of the Company have been (i) the cash flows generated by the
operation of motorways not securitized, (ii) the cash flows generated by the rest of its operations and (iii) the resources
derived securitization of receivables of securitized highway tolls. For several years, the Company's policy to incur debt
exclusively through its subsidiaries, using the concession operated by a particular subsidiary to support its debt service
without using or affecting commit resources Pinfra. Therefore, Pinfra, as a holding company, no debt or guarantee
obligations and therefore own all the debt represents a consolidated debt incurred by its subsidiaries.
The net proceeds from securitization transactions, after deducting offering expenses and up the necessary
reserves to cover debt service respectively, may be taken for general corporate purposes, including the possibility of
investing in other projects or pay dividends to you. According to the terms of certain securitizations, all cash flows
generated by the respective highway above the amount needed to cover payments of interest and principal, must
necessarily apply to the early redemption of debt. Therefore, while it is unpaid any portion of the debt incurred by
reason of a securitization transaction, the Company will not receive income from tolls generated by the highway in
question and is only entitled to payment of management fees and operation agreed in the concession contract for this
highway.
In the future, the Company may evaluate other additional funding sources depending on market conditions.
However, the Company believes that its existing sources of liquidity will be sufficient to fund its operating expenses
and capital expenditures for the foreseeable future.
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The following table contains a summary of the securitization transactions entered into by the Company at
December 31, 2012, including their maturity dates and interest rates earned by them.
At December 31, 2012
Securitization
Amount
(in thousands) Rate Maturity date
México-Toluca Highway: 6,159,078
México-Toluca Issue 2006: 4,992,538
Preferred stock certificates ............................................ 3,256,469 5.00% annual February 15, 2030
Subordinated debt certificates ....................................... 1,736,069 8,85% annual February 15, 2030
México-Toluca Issue 2009 ............................................... 1,166,540 7.92% annual February 15, 2030
Tenango-Ixtapan de la Sal Highway .................................... 817,462 6.75% annual October 4,2022
Santa Ana-Altar Highway .................................................... 1,672,877 5.40% annual December 14, 2034
Peñón-Texcoco Highway ..................................................... 1,294322 7.84% annual December 2, 2021
Atlixco-Jantetelco Highway................................................. 324,469 5.83% annual September 4, 2026
(1) The subordinate certificates issued by the Issuer to the Highway Trust Toluca (2009) bear interest at a variable rate which is calculated
based on the adjusted value of the subordinated certificates regarding Mexico-Toluca Issue (2006), the value of the securities subordinates regarding Mexico-Toluca Issue (2009) and fixed interest rate earned by the subordinated certificates regarding Mexico-Toluca Issue
(2006). The interest rate applicable to payments made on February 15, 2011 and August 16, 2011 was 7.90% and 7.91%, respectively.
México-Toluca Toll Road Securitizations
2003 México-Toluca Issuance. On September 19, 2003, our subsidiary PACSA, as settlor, executed an
irrevocable trust agreement (Contrato de Fideicomiso Irrevocable) among Banco Nacional de Comercio Exterior, S.N.C.
Institución de Banca de Desarrollo (“BANCOMEXT”) as trustee, and MBIA Insurance Corporation (“MBIA”) as
insurer, to create a trust for the issuance of preferred and subordinated securities (certificados bursátiles fiduciarios) in an
aggregate principal amount of 1,458 million UDIs (the “2003 México-Toluca Issuance Trust”). The preferred securities
were guaranteed by a financial insurance policy issued by MBIA while the subordinated securities were not granted the
benefit of a financial insurance policy. All collection rights derived from the payment of tolls under the México-Toluca
Toll Road Concession were assigned to the 2003 México-Toluca Issuance Trust, to be applied to PACSA’s payment
obligations thereunder, including payment obligations in favor of MBIA in the event of the exercise of the respective
financial insurance policy.
The total outstanding obligations of PACSA under the preferred securities issued by the 2003 México-Toluca
Issuance Trust were fully paid with funds obtained from the issuance of preferred securities under the 2006 México-
Toluca Issuance (as defined below). All subordinated securities issued by the 2003 México-Toluca Issuance Trust were
exchanged for, and prepaid with the proceeds of, the subordinated securities issued under the 2006 México-Toluca
Issuance.
2006 México-Toluca Issuance. On April 3, 2006, our subsidiary PACSA, as settlor, executed the irrevocable
trust agreement (Contrato de Fideicomiso Irrevocable) among Nacional Financiera, S.N.C., Institución de Banca de
Desarrollo, División Fiduciaria (“Nafin”) as trustee, MBIA as insurer, and Monex Casa de Bolsa, S.A. de C.V., Monex
Grupo Financiero (“Monex”) as the agent of the noteholders (representante común), to establish a program for the
issuance of securities (certificados bursátiles fiduciarios) titled Programa AAA para el Desarrollo de Infraestructura en
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México (AAA Program for the Development of Infrastructure in Mexico or “PADEIM”) in an authorized aggregate
principal amount of Ps.25.0 billion (the “México-Toluca Issuance Trust”). All collection rights derived from the payment
of tolls under the México-Toluca Toll Road Concession were assigned to the México-Toluca Issuance Trust, to be
applied to PACSA’s payment obligations under the PADEIM, including the payment in full of any obligations owed to
MBIA in the event of the exercise of the related financial insurance policy. In addition, all payment obligations towards
MBIA were guaranteed with the shares of capital stock of PACSA, by means of an Irrevocable Guarantee and Voting
Control Trust Agreement (Contrato de Fideicomiso Irrevocable de Garantía) dated April 7, 2006, among MBIA as
beneficiary, Nafin as trustee, Pinfra, PACSA and GCM as settlors and beneficiaries (the “México-Toluca Management
and Security Trust”). Once all amounts due under the México-Toluca Issuance Trust are paid, the trustee shall deliver the
remaining trust assets, other than the toll road collections which shall be delivered to PACSA, to the SHCP.
On April 5, 2006 the parties to the México-Toluca Issuance Trust executed a supplemental terms agreement (the
“México-Toluca Supplemental Terms Agreement”) whereby the terms of the México-Toluca Issuance Trust were
supplemented, setting forth certain covenants, including PACSA’s obligations to (i) maintain its valid corporate existence
and corporate status, (ii) maintain its properties and facilities in good condition and make all repairs and replacements
required from time to time, (iii) comply with the terms of the México-Toluca Toll Road Concession and maintain at all
times the rating required by the SCT, (iv) provide to MBIA certain information and documentation required under the
terms of the México-Toluca Supplemental Terms Agreement, (v) not to enter into any transaction or agreement with any
of its affiliates or its shareholders if, and to the extent that, the aggregate value of such agreement exceeds of U.S.$50,000
in the aggregate during any calendar year unless PACSA has certified and provided evidence that such agreements were
made on an arm’s length basis, (vi) refrain from incurring any indebtedness other than as permitted under the México-
Toluca Supplemental Terms Agreement or issue any securities, (vii) refrain from creating, assuming, incurring or
suffering to exist any liens on its assets other than as permitted under the México-Toluca Supplemental Terms Agreement
and (viii) refrain from, without the prior consent of MBIA, entering into any agreement or transaction with third parties
other than those set forth into México-Toluca Supplemental Terms Agreement.
On April 7, 2006, the México-Toluca Issuance Trust issued, under the terms of the authorized PADEIM
program, 11,137,473 preferred securities trading under the symbol “PADEIM 06U” and 3,646,559 subordinated
securities trading under the symbol “PADEIM 06-2U,” in an aggregate principal amount of 1,513 million UDIs (the
“2006 México-Toluca Issuance”). The payment obligations under the preferred securities are guaranteed by means of a
financial insurance policy issued by MBIA while the subordinated securities are not granted the benefit of the financial
insurance policy. The proceeds from the issuance of the preferred and subordinated securities under the 2006 México-
Toluca Issuance Trust were used to fully pay all outstanding obligations of PACSA under the 2003 México-Toluca
Issuance Trust.
Pursuant to the terms and the waterfall established in the Mexico-Toluca Issuance Trust agreement, the proceeds
from the operation of the México-Toluca Toll Road Concession shall be distributed in the following order: (i) to pay the
consideration corresponding to the Federal Government equal to 0.5% of the annual gross toll income (excluding VAT)
of the México-Toluca toll road; (ii) to pay the VAT derived from the collection of the toll rates; (iii) to pay the insurance
premiums owed to MBIA; (iv) to cover all administrative expenses and taxes withheld to service providers; (v) to cover
the applicable operation and minor maintenance expenses pursuant to the operation and minor maintenance budget
prepared under the terms of the México-Toluca Issuance Trust agreement; (vi) to maintain a reserve in connection with
the payment of major maintenance expenses; (vii) to pay any collection discounts; (viii) to pay scheduled principal and
accrued interest and related tax withholdings on the preferred securities; (ix) to reimburse MBIA of any amounts paid
from the exercise of the guarantee; (x) to transfer certain amounts to the preferred securities reserve account; (xi) to pay
any permitted reimbursements to the settlor; (xii) to pay principal and accrued interest and related tax withholdings on the
subordinated securities; (xiii) to transfer certain amounts to the preferred securities prepayment account; (xiv) to transfer
certain amounts to an additional works account; (xv) to the subordinated securities prepayment account; and (xvi) to pay
accrued interest on residual payable to PACSA.
The preferred securities under the 2006 México-Toluca Issuance must be prepaid when the funds in the México-
Toluca Issuance Trust account exceed certain amounts, without the obligation to pay any prepayment penalties or
premiums to the noteholders. In addition, preferred securities may be partially or fully voluntarily prepaid at any time, in
which case the México-Toluca Issuance Trust shall pay a prepayment premium to the noteholders, determined pursuant
to the terms of such trust agreement. Neither PACSA, the trustee, nor Monex as the agent of the noteholders shall be
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liable for the payment of amounts owed under the securities issued pursuant the 2006 México-Toluca Issuance, which
shall only be payable with the México-Toluca Issuance Trust assets.
The preferred securities issued under the 2006 México-Toluca Issuance yield interest at a fixed rate equal to
5.0%. The preferred securities mature on February 15, 2028. The total outstanding amount of preferred securities as of
December 31, 2012 was Ps.3,635 million.
The subordinated securities issued by the 2006 México-Toluca Issuance Trust yield interest at a fixed rate equal
to 8.85%. The subordinated securities mature on February 15, 2030. The total outstanding amount of subordinated
securities as of December 31, 2012 was Ps.5,178.4 million.
2009 México-Toluca Issuance.
On March 19, 2009, the México-Toluca Issuance Trust issued, under the terms of the authorized PADEIM
program, 2,415,386 subordinated securities trading under the symbol “PADEIM 09-U”, in an aggregate principal amount
of 241.5 million UDIs (the “2009 México-Toluca Issuance”). The securities issued under the 2009 México-Toluca
Issuance were subordinated to the payment of the preferred securities issued under the 2006 México-Toluca Issuance and
rank pari passu in payment to the subordinated securities issued under the 2006 México-Toluca Issuance. The proceeds
from the issuance of the subordinated securities under the 2009 México-Toluca Issuance were principally used to fund
the construction of additional works required by the México-Toluca Toll Road Concession.
The subordinated securities under the 2009 México-Toluca Issuance must be prepaid when the funds in the
México-Toluca Issuance Trust account meet certain amounts, without the obligation to pay any prepayment penalties or
premiums to the noteholders. Prepayment of these securities must be made on a pro rata basis with prepayment of
subordinated securities under the 2006 México-Toluca Issuance.
PACSA, the trustee, or Monex, as the agent of the noteholders, shall not be liable for the payment of amounts
owed under the securities issued pursuant the 2009 México-Toluca Issuance, which shall only be payable with the
México-Toluca Issuance Trust assets.
The subordinated securities issued by the 2009 México-Toluca Issuance yield interest at a variable rate
determined by, among other things, the adjusted value of the subordinated securities under the 2006 México-Toluca
Issuance and the value of the subordinated securities under the 2009 México-Toluca Issuance, as well as the fixed interest
rate of the subordinated securities under the 2006 México-Toluca Issuance. The applicable interest rate for payments
made on December 15, 2012 was 7.91%. The subordinated securities mature on February 15, 2030. As of December 31,
2012, the total outstanding amount of subordinated securities under the 2009 México-Toluca Issuance was Ps.1,136.2
million. As of December 31, 2012 the México-Toluca Issuance Trust maintained a reserve in the amount of Ps.379.8
million to service any payment obligations thereunder.
Tenango-Ixtapan de la Sal Toll Road Securitization
On October 3, 2005, our subsidiaries Tribasa Sector Construcción, S.A. de C.V. (“Tribasa”), Triciesa S.A. de
C.V. (“Triciesa” currently, Pinseco), and Atisa, as settlors, Scotiabank Inverlat, S.A., Institución de Banca Múltiple,
Grupo Financiero Scotiabank Inverlat, División Fiduciaria, as trustee, and Monex as agent of the noteholders, entered
into an amended and restated irrevocable investment, administration and source of payment trust agreement (Contrato de
Fideicomiso Irrevocable de Inversión, Administración y Fuente de Pago), to establish a program for the issuance of
securities (certificados bursátiles fiduciarios) for an aggregate principal amount of Ps.700.0 million (the “Tenango-
Ixtapan de la Sal Issuance Trust”). The original trust agreement was executed on November 7, 2003, by Atisa, as settlor,
Banco Interacciones, S.A., Institución de Banca Múltiple, Grupo Financiero Interacciones, as trustee, and BANOBRAS
and Tribade, as beneficiaries, with the purpose of guaranteeing Atisa’s payment obligations under a credit facility granted
by BANOBRAS. On August 26, 2005, all of ATISA’s obligations were paid in full and BANOBRAS ceased to be a
party to the original trust agreement. All of the terms of such original trust agreement were amended by the Tenango-
Ixtapan de la Sal Issuance Trust. All collection rights derived from the payment of tolls under the Tenango-Ixtapan de la
Sal Toll Road Concession were assigned to the Tenango-Ixtapan de la Sal Issuance Trust to repay the debt thereunder.
95
On October 4, 2005, the Tenango-Ixtapan de la Sal Issuance Trust issued, under the terms of the authorized
program, 1,949,812 preferred securities trading under the symbol “TENANCB 05U,” in an aggregate principal amount
of 195 million UDIs (the “2005 Tenango-Ixtapan de la Sal Issuance”). The proceeds from the issuance of the preferred
securities under the 2005 Tenango-Ixtapan de la Sal Issuance were principally used to create the maintenance reserve,
additional guarantee and the SCT consideration funds.
Pursuant to the terms and the waterfall established in the Tengango-Ixtapan de la Sal Issuance Trust agreement,
the proceeds from the operation of the Tenango-Ixtapan de la Sal Toll Road Concession shall be distributed in the
following order: (i) to pay the VAT derived from the collection of the toll rates; (ii) to pay the consideration
corresponding to the Government of the State of Mexico equal to 1.5% of the monthly gross toll income (excluding
VAT) of the Tenango-Ixtapan de la Sal toll road; (iii) to cover the applicable operation and minor maintenance expenses
pursuant to the Operation and Minor Maintenance Budget prepared under the terms of the Tengango-Ixtapan de la Sal
Issuance Trust agreement; (iv) to maintain a reserve in connection with the payment of major maintenance expenses,
which shall be equal to six months of the annual budget established under the major maintenance program prepared
pursuant to the Tengango-Ixtapan de la Sal Issuance Trust agreement, and for paying related expenses; (v) to cover any
expenses related to the maintenance of the 2005 Tengango-Ixtapan de la Sal Issuance; (vi) to pay scheduled principal and
accrued interest on the applicable biannual payment date; (vii) to maintain a reserve fund in connection with the
scheduled payment of principal and accrued interest on the securities on the applicable biannual payment date, which
shall be equal to two times the amount of interest payable during the beginning of the relevant quarter plus the two
succeeding payments of principal, which shall be used whenever the proceeds from the operation of the Tenango-Ixtapan
de la Sal Toll Road Concession during the corresponding quarter are not sufficient for such purposes; and (viii) any
remaining amounts on the corresponding biannual payment date shall be used to prepay principal of the securities.
The 2005 Tenango-Ixtapan de la Sal Issuance provides two types of prepayments, mandatory and voluntary.
The securities issued under the 2005 Tenango-Ixtapan de la Sal Issuance must be prepaid on each payment date with the
remaining proceeds once the items listed above are paid, without any obligation to pay any penalties to the noteholders.
In addition, commencing with the sixth anniversary of the issuance date, the securities issued under the 2005 Tenango-
Ixtapan de la Sal Issuance may be voluntarily prepaid. In such an event, the Tenango-Ixtapan de la Sal Issuance Trust
shall pay a prepayment premium calculated pursuant to the terms of such trust agreement.
Tribasa, Triciesa, Atisa, the trustee or Monex, shall not be liable for the payment of amounts owed under the
securities issued pursuant to the 2005 Tenango-Ixtapan de la Sal Issuance, which shall only be payable with the Tenango-
Ixtapan de la Sal Issuance Trust estate.
The securities issued under the 2005 Tenango-Ixtapan de la Sal Issuance yield interest at an annual rate of
6.75% and mature on October 4, 2022. The 2005 Tenango-Ixtapan de la Sal Issuance also provided the application of
penalty interest at a rate of 1.5 times the ordinary rate. The total outstanding amount of these securities as of December
31, 2012 was Ps.813.5 million. As of December 31, 2012, the Tenango-Ixtapan de la Sal Issuance Trust maintained a
reserve in the amount of Ps.77.7 million to service any payment obligations thereunder.
Santa Ana-Altar Toll Road Securitization
On August 30, 2006, our subsidiary Zonalta, as settlor and Banco Inbursa, S.A. Institución de Banca Múltiple,
Grupo Financiero Inbursa (“Inbursa”), as trustee, entered into the Irrevocable Management and Source of Payment Trust
Agreement (Contrato de Fideicomiso Irrevocable de Administración y Fuente de Pago), to establish a program for the
issuance of securities (certificados bursátiles fiduciarios) in an authorized aggregate principal amount of Ps.1,600 million
(the “Santa Ana-Altar Issuance Trust”). All collection rights deriving from the payment of tolls under the Santa Ana-
Altar Toll Road Concession were assigned to the Santa Ana-Altar Issuance Trust to repay the debt under the program.
On December 14, 2006, the Santa Ana-Altar Issuance Trust issued, under the terms of the authorized program,
4,235,329 securities trading under the symbol “ZONALCB 06U,” in an aggregate principal amount of 423.5 million
UDIs (the “2006 Santa Ana-Altar Issuance”). The proceeds from the issuance of the securities under the 2006 Santa
Ana-Altar Issuance were principally used for working capital purposes and to establish the reserve for the service of debt.
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Pursuant to the terms and the waterfall established in the Santa Ana-Altar Issuance Trust agreement, the
proceeds from the operation of the Santa Ana-Altar Toll Road Concession shall be distributed in the following order: (i)
to pay the VAT derived from the collection of the toll rates; (ii) to pay the consideration corresponding to the
Government of the State of Sonora equal to 2.5% of the monthly gross toll income (excluding VAT) of the Santa Ana-
Altar toll road; (iii) to cover the applicable operation and minor maintenance expenses pursuant to the Operation and
Minor Maintenance Budget prepared under the terms of the Santa Ana-Altar Issuance Trust agreement; (iv) to maintain a
reserve fund in connection with the payment of major maintenance expenses, which shall be equal to 50% of the greater
of the annual budget established under the Major Maintenance Program for the current year and the annual budget
established for the next year, and for paying related expenses; (v) to cover any expenses related to the maintenance of the
2006 Santa Ana-Altar Issuance; (vi) to pay accrued interest on the securities on the applicable biannual payment date;
(vii) to maintain a reserve fund in connection with the scheduled payment of principal and accrued interest on the
securities on the applicable biannual payment date which shall be equal to the interest payable on the next three
succeeding payment dates; and (viii) any remaining amounts on the corresponding biannual payment date shall be used
to prepay principal of the securities.
The 2006 Santa Ana-Altar Issuance initially provided two types of prepayments, mandatory and voluntary. The
securities under the 2006 Santa Ana-Altar Issuance must be prepaid on each payment date with the remaining proceeds
once the items listed above are paid with, in certain cases, an obligation to pay prepayment penalties to the noteholders if
the amount prepaid is higher than the one established in the trust agreement. In addition, the securities under the 2006
Santa Ana-Altar Issuance may be voluntarily prepaid at any time, with an obligation to pay prepayment penalties to the
noteholders if the amount prepaid is greater than the one established in the trust agreement.
With the prior authorization of the CNBV, on September 13, 2011, the noteholders of the 2006 Santa Ana-Altar
Issuance adopted resolutions to, among other things, update the registry of the securities trading under the symbol
“ZONALCB 06U,” with the RNV which resulted in the division of the issuance into three (3) series: (i) a preferred series
in an amount equal to 50.0% of the 2006 Santa Ana-Altar Issuance which must be repaid on each payment date; (ii) a
subordinated series in the amount of 20% of the 2006 Santa Ana-Altar Issuance, which must be repaid on each payment
date once the scheduled payment to the preferred series has been made; and (iii) a convertible series in an amount equal
to 30% of the 2006 Santa Ana-Altar Issuance, which will be converted into preferred series once the current preferred
series securities are paid in full. As of the date of this offering memorandum, this change in the structure of the 2006
Santa Ana-Altar Issuance is not yet effective.
Zonalta, the Government of the State of Sonora, or the trustee shall not be liable for the payment of amounts
owed under the securities issued pursuant to the 2005 Santa Ana-Altar Issuance, which shall only be payable with the
Santa Ana-Altar Issuance Trust estate.
As a result of the September 13, 2011 resolutions of the noteholders of the Santa-Ana Altar Issuance, it was
agreed that the Santa Ana-Altar Issuance Trust may issue additional securities under the preferred series subject to
additional investments by Zonalta in the Santa Ana-Altar toll road, including the execution of additional works, as
applicable. The issuance of additional securities is subject to the authorization of the SCT to modify the Santa Ana-Altar
Toll Road Concession by: (i) increasing the authorized tariffs; (ii) extending its term; and (iii) Zonalta’s commitment to
make additional investments and, as necessary, carry additional works on the Santa Ana-Altar toll road.
The securities issued under the 2006 Santa Ana-Altar Issuance yield interest at an annual rate of 5.4% and
mature on December 11, 2031. The total outstanding amount of these securities as of December 31, 2012 was Ps.1,617.6
million. As of December 31, 2012, the Santa Ana-Altar Issuance Trust maintained a reserve in the amount of Ps.26.8
million to service any payment obligations thereunder.
Peñón-Texcoco Toll Road Securitization
On December 17, 2004, our subsidiary CPAC, as settlor, Inbursa, as trustee, and Casa de Bolsa Arka, S.A. de
C.V. as agent of the noteholders (“ARKA”), entered into the irrevocable trust agreement (Contrato de Fideicomiso
Irrevocable) to establish a program for the issuance of securities (certificados bursátiles fiduciarios) in an aggregate
principal amount of Ps.1,850 million (the “Peñón-Texcoco Issuance Trust”) for the refinancing of the toll road. All
collection rights derived from the payment of tolls under the Peñón-Texcoco Toll Road Concession were assigned to the
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Peñón-Texcoco Issuance Trust to repay the debt under the program.
On December 23, 2004, the Peñón-Texcoco Issuance Trust issued, under the terms of the authorized program,
18,500,000 securities trading under the symbol “CPACCB 04,” in an aggregate principal amount of Ps.1,850 million (the
“2004 Peñón-Texcoco Issuance”). The proceeds from the issuance of the securities under the 2004 Peñón-Texcoco
Issuance were principally used for working capital purposes, to establish the reserve fund and Ps.581.0 million were used
to repay in full the amounts owed under securities (certificados de participación ordinaria or CPOs), issued for the
refinancing of the toll road through an irrevocable management trust agreement dated August 9, 1994 by and between
CPAC, and Banco Interacciones, S.A., Institución de Banca Múltiple, Grupo Financiero Interacciones, acting as trustee.
Pursuant to the terms and the waterfall established in the Peñón-Texcoco Issuance Trust agreement, the
proceeds from the operation of the Peñón-Texcoco Toll Road Concession shall be distributed in the following order: (i)
to pay the VAT derived from the collection of the toll rates; (ii) to pay the consideration corresponding to the Mexican
Federal Government and to the Government of the State of Mexico equal to 1% and 0.5%, respectively, of the annual
gross toll income (excluding VAT) of the Peñón-Texcoco toll road; (iii) to cover the applicable operation and minor
maintenance expenses pursuant to the operation and minor maintenance budget prepared under the terms of the Peñón-
Texcoco Issuance Trust agreement; (iv) to maintain a reserve in connection with the payment of major maintenance
expenses, which shall be equal to six months of the annual budget established under the Major Maintenance Program
prepared pursuant to the Peñón-Texcoco Issuance Trust agreement, and for paying related expenses; (v) to cover any
expenses related to the maintenance of the 2004 Peñón-Texcoco Issuance; (vi) to pay scheduled principal and accrued
interest on the securities on the applicable biannual payment date; (vii) to maintain a reserve fund in connection with the
scheduled payment of principal and accrued interest on the securities on the applicable biannual payment date, which
shall be equal to two times the amount of interest payable during the beginning of the relevant quarter plus the two
succeeding payments of principal, which shall be used whenever the proceeds from the operation of the Peñón-Texcoco
Toll Road Concession during the corresponding quarter are not sufficient for such purposes; and (viii) any remaining
amounts on the corresponding biannual payment date shall be used to prepay principal of the securities.
The securities under the 2004 Peñón-Texcoco Issuance must be prepaid on each biannual payment date with the
remaining proceeds once the concepts listed above are paid, without any obligation to pay any prepayment penalties or
premiums to the noteholders. The 2004 Peñón-Texcoco Issuance does not allow voluntary prepayments of the securities.
CPAC, the trustee or ARKA, shall not be liable for the payment of amounts owed under the securities issued
pursuant to the 2004 Peñón-Texcoco Issuance, which shall only be payable the Peñón-Texcoco Issuance Trust estate.
The securities issued under the 2004 Peñón-Texcoco Issuance yield interest at an annual rate of TIIE + 2.95 and
mature on December 2, 2021. The 2004 Peñón-Texcoco Issuance also provides the application of penalty interest at a
rate of 1.5 times the ordinary rate. The total outstanding amount of these securities as of December 31, 2012 was
Ps.1,369.7 million. As of December 31, 2012, the Peñón-Texcoco Issuance Trust maintained a reserve in the amount of
Ps.196.8 million to service any payment obligations thereunder.
Atlixco-Jantetelco Toll Road Securitization
On September 15, 2006, our subsidiary CONCEMEX (with respect to the Atlixco-San Bartolo-Cohuecán
Stretch) and RCA (with respect to the Morelos Stretch), as settlors, Banco Invex, S.A., Institución de Banca Múltiple,
Invex Grupo Financiero, Fiduciario, as trustee, and Monex, as agent of the noteholders, executed the irrevocable
management and source of payment trust agreement (Contrato de Fideicomiso Irrevocable de Administración y Fuente
de Pago), to establish a program for the issuance of securities (certificados bursátiles fiduciarios) in an aggregate
principal amount of Ps.660.0 million (the “Atlixco-Jantetelco Issuance Trust”). The debt thereunder is to be allocated as
follows: 85.0% of the total debt is held by CONCEMEX, while the remaining 15.0% is held by RCA. All collection
rights derived from the payment of tolls under the Atlixco-Jantetelco Stretch and under the Morelos Stretch were
assigned to the Atlixco-Jantetelco Issuance Trust to repay the debt under the program.
On September 15, 2006, the Atlixco-Jantetelco Issuance Trust issued, under the terms of the authorized
program, 1,438,418 securities trading under the symbol “CONCECB 06U,” in an aggregate principal amount of 143.8
million UDIs (the “2006 Atlixco-Jantetelco Issuance”). The proceeds from the issuance of the securities under the 2006
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Atlixco-Jantetelco Issuance were used, among others, for working capital purposes and to pay certain investment made
by the Government of the State of Puebla for the repair and construction of the Atlixco-San Bartolo-Cohuecán Stretch.
Pursuant to the terms and the waterfall established in the Atlixco-Jantetelco Issuance Trust agreement, the
proceeds from the operation of the Atlixco-Jantetelco Toll Road Concession shall be distributed in the following order:
(i) to pay the VAT derived from the collection of the toll rates with respect to each of the Atlixco-San Bartolo-Cohuecán
Stretch and the Morelos Stretch; (ii) to pay (a) the consideration corresponding to the Government of the State of Puebla
equal to 1% of the biannual gross toll income (excluding VAT) of the Atlixco-San Bartolo-Cohuecán Stretch, and (b) the
consideration corresponding to the Government of the State of Morelos equal to 6% of the monthly gross toll income
(excluding VAT) of the Morelos Stretch; (iii) to cover the applicable operation and minor maintenance expenses pursuant
to the operation and minor maintenance budget prepared under the terms of the Atlixco-Jantetelco Issuance Trust
agreement; (iv) to maintain a reserve in connection with the payment of major maintenance expenses in an amount of
Ps.451,197, which can only be used, prior authorization of the Government of the State of Puebla, to pay major
maintenance expenses related to the Atlixco-San Bartolo-Cohuecán Stretch; (v) to pay any expenses related to the
maintenance of the 2006 Atlixco-Jantetelco Issuance; (vi) to pay accrued interest on the applicable biannual payment
date; (vii) to maintain a reserve fund in connection with the scheduled payment of interest which shall be equal to the
interest payable on the succeeding two payment dates; (viii) once certain operating thresholds are met (9,100 ADTV), to
pay 50% of the revenues derived from the operation of the Morelos Stretch to the Government of the State of Morelos;
and (ix) any remaining amounts on the corresponding biannual payment date shall be used to prepay principal of the
securities.
The 2006 Atlixco-Jantetelco Issuance provides two types of prepayments, mandatory and voluntary. The
securities under the 2006 Atlixco-Jantetelco Issuance must be prepaid on each payment date with the remaining proceeds
once the items listed above are paid, with, in certain cases, the obligation to pay prepayment penalties to the noteholders
if the amount prepaid is greater than the one established in the trust agreement. In addition, the securities under the 2006
Atlixco-Jantetelco Issuance may be voluntarily prepaid at any time, with an obligation, in certain events, to pay
prepayment penalties to the noteholders if the prepaid amount is greater than the one established in the trust agreement.
Additionally, in the event the proceeds generated from the operation of the Atlixco-Jantetelco toll road are not sufficient
to timely pay principal and accrued interest on the securities, RCA and CONCEMEX will be entitled to request a two-
year extension of the term of the concession to pay the securities. In the event an extension to the term of the concession
is granted, only the proceeds from the operation of the Atlixco-San Bartolo-Cohuecán Stretch will continue being
assigned to the trust estate.
CONCEMEX, RCA, the trustee or Monex, shall not be liable for the payment of amounts owed under the
securities issued pursuant to the 2006 Atlixco-Jantetelco Issuance, which shall only be payable with the Atlixco-
Jantetelco Issuance Trust estate.
The securities issued under the 2006 Atlixco-Jantetelco Issuance yield interest at an annual rate of 5.83% and
mature on September 4, 2026. The total outstanding amount of these securities as of December 31, 2012 was Ps.401.8
million. As of December 31, 2012, the Atlixco-Jantetelco Issuance Trust maintained a reserve in the amount of Ps.24.1
million to service any payment obligations thereunder.
Pirámides-Ecatepec-Peñón Toll Road and Armería-Manzanillo Toll Road Securitization
On May 29, 2003, our subsidiaries PAPSA and PACSA, as settlors, executed an irrevocable trust agreement
(Contrato de Fideicomiso Irrevocable) with Banco Nacional de Comercio Exterior, S.N.C. Institución de Banca de
Desarrollo (“BANCOMEXT”) as trustee, whereby s trust was created with the purpose of issuing securities (certificados
bursátiles fiduciarios) trading under the symbol “ARMEC 03U,” due 2015.
Under such agreement, PAPSA and PACSA assigned to the trust all of their collection rights, and the collection
rights following the termination of the issuance, reimbursement from the Mexican Government and all other rights
derived under the Armería-Manzanillo and Ecatepec-Pirámides toll roads. On May 18, 2010 we fully prepaid the
outstanding balance under this securitization.
Capital Expenditures
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The following table sets forth a breakdown of our principal capital expenditures by business line for the
periods indicated.
Capital Expenditures December 31,
2012 2011 2010
Sector
Concessions $21,554 $17,234 $68,293
Land and Equipment 1,999 3,878 17,445
Construcción 32,412 1,999 235
Quantitative and Qualitative Disclosures about Market Risk
We are exposed to market risks arising from our normal business activities. These market risks principally
involve the possibility that certain changes in exchange rates between UDIs and pesos will adversely affect the value of
our financial assets and liabilities or future cash flows and earnings. Market risk is the potential loss arising from adverse
changes in market rates and prices. UDI is a conversion factor to take into account inflationary effects. As of December
31, 2012, 87.6% of our indebtedness was denominated in UDIs. This risk is partially mitigated because the revenues
earned under the concessions which are subject to securitization transactions are subject to inflationary adjustments on a
yearly basis.
Additionally, we are exposed to market risk due to interest rate fluctuations in the TIIE. An increase in the TIEE
will defer payment of principal, as cash designated for debt service will be used to pay accrued interest prior to paying
down principal. Interest rate risk exists with respect to our securitization transactions with variable interest rates tied to
the TIIE. As of December 31, 2011, one of our securitized toll roads, representing approximately 12.9% of our
outstanding indebtedness, bore interest tied to the TIIE.
Transactions not recognized in the balance sheet
The Company does not have any transaction agreed not recognized on its balance sheet.
a) Comments and analysis of management on the results of operating and financial condition of the
issuer
Investors should read the following discussion in conjunction with the financial statements of the Company
and the notes thereto included in this Annual Report. Unless otherwise indicated, all financial information included in
this Annual Report is prepared in accordance with IFRS.
The financial information included in this Annual Report has been prepared in accordance with IFRS, which
differ from MFRS and U.S. GAAP and may differ from the standards adopted in Mexico. See "Annex A-significant
differences between Mexico FRS, IFRS and U.S. GAAP related to financial statements. This company has never tried
to qualify the impact derived from the abovementioned differences, nor has adjusted the financial statements or other
information contained in this document with the guidelines referred to IFRS and USGAAP.
This Annual Report contains statements regarding the future, statements that reflect the plans, estimates and
opinions of the Company and involve risks, uncertainties and assumptions. The Company's actual results could differ
materially from reaching those described in the statements about the future. Factors that could cause or contribute to
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such differences include, but without limitation, those described in this section, the section "Risk Factors" and the rest
of this Annual Report. Investors should carefully evaluate the following analysis and the information contained in the
"Risk Factors" as well as the information contained in the remainder of this Annual Report before making any decision
to invest in the shares of the Company.
Overview
The Company is one of the largest owners and operators of infrastructure concessions in Mexico, due to the
number of concessions that make up your portfolio. The Company focuses primarily in the area of transport infrastructure
concessions and operates 19 toll roads, a port terminal and two bridges. We also have the materials and supplies sector
that operates an asphalt plant and aggregate, and a construction sector.
The Company's objective is to identify infrastructure assets, invest in them and operate them efficiently. We
were the first company to obtain a concession road in Mexico and currently occupy a leading position in the domestic
market of the concession infrastructure projects. The Company seeks to maximize the returns for their shareholders,
using an integrated management approach and long-term conservative from a financial standpoint. The diversified
portfolio of concessions the Company owes its strength to the geographic and business strategies in building its portfolio
of concessions. Currently, we operate 16 concessions across the country, consisting of 19 highways, a port terminal and
two bridges. The Company also owns an asphalt plant and aggregate, and, to a lesser extent, manages construction
projects related to their concessions and performs other independent engineering works. The Company continually seeks
new business opportunities that will provide a significant return on its assets and its growth opportunities limited to those
that generate guaranteed flows. The Company does not incur debt at the corporate level.
The Company believes that its cash flows constant and predictable and clear investment principles place it in
the best position to take advantage of the benefits of growth in the infrastructure sector in Mexico. Its solid-asset portfolio
included projects mature and predictable revenue streams, allows you to maintain a healthy and stable cash position to
effectively pursue the opportunities that are presented to invest in new projects.
Main factors affecting the results of operations of the Company
Traffic volume and toll of the highways concessions
The main factor upon which income generated by the Company's highways concessions is the number of
vehicles on the same. In turn, the volume of traffic depends on several factors, including the ability of vehicles to transit
alternative paths, the attractions offered by the areas where roads are located in the Company, the availability of other
means of transport such as air and rail, the security situation, the general economic situation, growth, contraction in the
trade or business in the regions served by motorways and natural disasters that affect them.
The revenue generated by the highway concession also depend on the toll charged by the Company. The terms
of the respective concessions establish the maximum fee that the Company may charge for each highway, which is
fixed by the government. The Company is entitled to apply discounts to the rates authorized and set different rates
depending on the time of day, time of year and type of vehicle, as long as you do not exceed the authorized limits.
Levels of business activity in the Puerto de Altamira Terminal
The revenue generated and costs incurred by the Company in relation to Puerto de Altamira Terminal are
related directly and positively to the level of commercial activity on the part of carriers of goods that use that terminal
for loading and unloading containers for distribution in Mexico or abroad. In turn, business activity levels depend on the
economic situation at home and abroad. For a description of the risks associated with the contraction of economic
activity in Mexico and other countries, see the sections "Risk Factors-The existence of adverse economic and political
conditions in Mexico may adversely affect the activities, financial position and results of operations of the Company
"and"-developments in other countries may have an adverse effect on the national economy or the activities, financial
position, operating results or the market price of the shares of the Company ".
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The revenue generated by Puerto de Altamira Terminal also depend on the rates applicable to the services of
loading and unloading of shipments, warehousing, cargo and container deliveries and other services provided by the
Company pursuant to the Assignment of Concession for Puerto de Altamira Terminal. The Company is obligated to
register such rates to the SCT and the API at least three working days prior to its entry into force.
Description of the main items
Income
The analysis of management regarding the overall operational performance of the Company is based on the
three business segments: the infrastructure concessions division, division materials and supplies, and construction
division. The revenue generated by each of these three segments include revenues from concessions, concessions sector
case, the construction revenue and construction engineering for concessions, being the construction sector and income
from the sale of materials, being the materials and supplies industry.
Concessions revenues represent revenues generated by the operation of infrastructure concession projects of
the Company. The revenue generated by the highway concession and Altamira Port Terminal is recognized at the time
the service is provided (as in the case of the highway concession occurs simultaneously with the collection of tolls). In
the case of bridges, Opervite receives a monthly fee for operation and maintenance services provided in relation to
lower these concessions.
The item of revenue building represents engineering services related to infrastructure project concession, such
as the paving of roads not covered by the concessions of the Company and the provision of other services related to
such projects. These revenues are recognized based on the method of percent progress, whereby the income reported in
a given period is proportional to the costs incurred during the period, expressed as a percentage of the total cost of the
work. In the event that the latest estimated total cost exceeds total revenue to be perceived in terms of the relevant
construction contract, the expected loss is charged to the income statement.
The heading of the concession construction revenue corresponds to the revenue generated by construction
(preliminary works and, where appropriate, improvements) made by the Company in its concession infrastructure
projects.
The Company recognizes the concession contracts in accordance with Interpretation No.12 Interpretation
Committee of the International Financial Reporting Standards "Concession Agreements for Services" (IFRIC 12) for the
initial recognition of construction, additions, improvements and extensions to highways under concession. This
interpretation refers to the recognition by private sector operators involved in providing infrastructure assets and
services to the public sector supported by grant agreements and requires the classification of assets in financial assets,
intangible assets, or a combination of both.
The financial asset results when the operator constructs or makes improvements to concessioned infrastructure
and receives in return an unconditional right to receive cash or another financial asset as consideration.
The intangible asset arises when the operator constructs or makes improvements to concessioned infrastructure
and receives in return the right to charge users of the public service. This right of recovery is not an unconditional right
to receive cash as it depends on the use of the asset.
So much for the financial asset to the intangible asset, revenue and costs related to the construction or
improvements are recognized in earnings.
This IFRIC provides for both a financial asset and an intangible asset, revenue and costs related to the
construction or improvements are recognized as income in the period during the construction phase.
The consideration paid in exchange for the SCT concession was recognized as an intangible asset.
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The granting financial asset is classified in the category of loans and receivables.
The intangible assets recognized in the statement of financial position is amortized over the concession period
based on the traffic density. The estimated useful life and amortization method are reviewed at the end of each reporting
period and the effect of any change in estimate is recognized prospectively.
No road concessions are amortized on a straight-line method concession terms obtained by the Company.
Revenue from the sale of materials are products manufactured by the Company, including asphalt mixtures and
aggregates (crushed basalt), fences for roads and other precast concrete products, and lime products used for
development works and road construction . Revenue from the sale of materials are recognized when they are transferred
the risks and rewards related to the products, which normally coincides with delivery to the customer.
Costs
The main concessions costs include amortization of intangible assets-such concession payments issuing rights-
granting, the costs of construction or improvement of assets under concession, the other operating costs, lower
maintenance costs, insurance and bonds and major maintenance reserves. The main costs for both construction
engineering works such as concessions, including costs associated with subcontractors, depreciation of machinery and
equipment assigned to a particular project, the installation of offices on the site of the work, insurance and project
studies. The main costs for the sale of materials include production costs, including direct labor and materials-,
insurance, repayment of deposits previously recognized as inventories and reported at the time of sale of the inventory,
and depreciation machinery and equipment. All costs are reported as incurred.
Operating expenses
The main components of the operating expenses of the Company include wages and benefits, lease expenses,
selling expenses, insurance and general bonds, travel expenses and depreciation and amortization of assets not directly
related with some concession or project. Operating expenses are recognized as they are incurred.
Other expenses
Overall, the other expenses represents the other gains or losses and other income and expenses incurred as a
result of activities other than the main line of business of the Company. Traditionally, these costs have been included
gains and losses on the sale of machinery and equipment, office leasing and other extraordinary gains or losses from
previous years.
Comprehensive financing
The comprehensive financing result includes (i) the interest expense incurred in connection with debt securities
issued by the Company in connection with the securitization of its concessions, recognizing them as the interest
becomes due and payable; (ii) interest income earned on cash equivalents and investments in marketable securities,
which are recognized to the same extent that interest will become due and collectible, and (iii) the gain or loss
attributable to the assets and liabilities denominated in foreign currency and IDUs, they are recognized on the date of
occurrence corresponding gain or loss, based on the exchange rate.
Preparation of financial statements
The consolidated financial statements of the Company were prepared in accordance with IFRS.
Significant accounting policies
During the process of preparation of the consolidated financial statements, the Company's management was
forced to make judgments, assumptions and make estimates apply in those cases where the information necessary to
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determine the carrying value of certain assets and liabilities, the amount to be recognized in revenue or the need to
disclose the existence of contingent assets and liabilities, it is not immediately apparent. Therefore, to arrive at estimates
recognized or disclosed in the consolidated financial statements, the Company takes into account subjective elements
and makes objective judgments based on historical experience and other factors it considers relevant and reasonable in
the circumstances. The results of the Company in future years could differ from those estimates. In the event that such
differences are material, the operating results reported by the Company could be adversely affected or significantly.
The following describes the accounting policies applicable to the assets, liabilities, income or disclosures of the
Company that it considers critical.
Using the method of percentage-of-completion for revenue recognition of construction engineering and
construction of concessions
Revenue from construction of long-term engineering and construction revenues are recognized based
concessions in the percentage of completion method. By its nature, this method involves the use of judgments and
estimates as reported income in a given period is proportional to the costs incurred during the period, expressed as a
percentage of the total cost of the work. Therefore, the Company must make sure to understand and correctly calculate
the total construction cost of each project. Estimates of the Company with respect to each project based on the terms,
conditions and specifications. Generally, the total cost includes the amount for labor and materials initially agreed in the
construction contract, including subcontractor costs, depreciation of equipment used specifically for that project and other
costs directly related to performance in terms of the contract. Estimates regarding these costs are based on historical
experience and are in charge of engineering experts.
The Company reviews the reasonableness of their monthly estimated costs, taking into account the increases in
materials used in construction, inflation and fluctuations in exchange rates and unit prices of certain materials.
Any changes to the estimated total cost as a result of these factors or changes in project specifications and
budget overdrafts and contingency, are taken into account in the cost models of the Company for the period in which
change occurred, in which case the percentage of revenue recognized is modified.
These estimates may be affected by future events, in which case the amount of revenue recognized by the Company may
be affected. However, management believes that the estimates used to the filing dates of your information are reasonable
in the circumstances.
Buildings, sites, machinery and equipment
The buildings and sites representing the reserves of minerals and crushed basalt used by the Company for
the production of asphalt. Are recognized at cost less depreciation. Depreciation of plant and equipment is calculated
according to the units produced during the year in relation to the total estimated asset during its service life. On the other
assets, depreciation is calculated according to the straight-line method, following the component approach and taking into
consideration the life of the related asset. The useful life of assets are shown as follows:
Average years
Buildings 25-50
Construction machinery and equipment 5-10
Transport equipment 3-10
Furniture and office equipment 4-6
Depreciation of plant and equipment is calculated according to the units produced during the year in relation to
the total estimated asset during its service life.
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The estimated useful lives, residual values and depreciation methods are reviewed at the end of each reporting
period.
The gain or loss arising from the sale or retirement of an item of furniture and equipment and other, is
calculated as the difference between the resources received from sales and the carrying amount of the asset and is
recognized in income in the period .
Other assets
They consist escrow long term, mainly by a letter of credit, apply for the participation of Michoacán Package
mentioned in note the 2nd
Borrowing Costs
Mainly related to security deposits and other assets, which are expected to be recovered upon expiry of the
commitments that arise.
Deterioration
At the end of each period, the Company reviews the carrying amounts of its intangible assets and
property, plant and equipment to determine whether there is any indication that those assets have suffered an
impairment loss. If there is any indication, we calculate the asset's recoverable amount to determine the amount of the
impairment loss (if any). When it is not possible to estimate the recoverable amount of an individual asset, the Company
estimates the recoverable amount of the cash-generating unit to which the asset belongs. When you can identify a
reasonable and consistent basis of allocation, corporate assets are also allocated to individual cash-generating units, or
otherwise, are allocated to the smallest group of cash-generating units for which a base can be identified reasonable and
consistent distribution.
The recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in
use, the estimated future cash flows are discounted to their present value using a discount rate before tax that reflects
current market assessment of the value of money and the risks specific to the asset for which have not been adjusted
estimates of future cash flows.
If you assume that the recoverable amount of an asset (or cash-generating unit) is less than its carrying
amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. Impairment
losses are recognized immediately in earnings.
When an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating
unit) is increased to the revised estimated value to its recoverable amount, so that the increased carrying value does not
exceed the carrying amount that would have resulted if he had not recognized an impairment loss for the asset (or cash-
generating unit) in prior years. A reversal of an impairment loss is recognized immediately in earnings.
Investment in associated
Investments in entities in which the Group has significant influence are initially recognized based on the
net fair value of identifiable assets and liabilities of the company at the date of acquisition. This value is set subsequent
to initial recognition by the corresponding portion of both the income or loss of the associated company and the
distribution of profits or capital reimbursements thereof. When the fair value of the consideration paid is greater than
the net fair value of the assets, liabilities and contingent liabilities of the associate recognized, the difference represents
goodwill which comes as part of the same investment. When the fair value of the consideration paid is less, the
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difference, after reviewing the fair values are recognized in income. In case of indications of impairment of investments
in associates are subject to impairment tests.
Supplies
Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a
past event, it is probable that the Company will have to settle the obligation, and a reliable estimate can be made of the
amount of the obligation.
The amount recognized as a provision is the best estimate of the expenditure required to settle the present
obligation at the end of the reporting period under review, taking into account the risks and uncertainties surrounding
the obligation. When a provision is valued using the cash flows estimated to settle the present obligation, its carrying
amount is the present value of those cash flows.
When expected to be recovered from a third party some or all of the economic benefits required to settle a
provision is recognized a receivable as an asset only if it is virtually certain that reimbursement will be received and the
amount of the receivable can be reliably valued.
Reserve for major maintenance
The Company creates a provision for major maintenance of road sections, depending on the estimate of the
cost of major maintenance following a linear fashion from the last made, determined in studies by independent experts.
This is according to the existing contractual obligation that at the end of the concession, the assets of the government
will reverse the operation proper use.
Results of Operational and Internal Control
Operating results year ended at December 31, 2012 compared to the year ended December 31, 2011
Revenues
The revenue of the Company for the period ended December 31, 2012 amounted to $ 4593.3 million, which
represented an increase of 10.3% compared to $ 4165.2 million for the period ended December 31, 2011. This increase
was due to the increase in concession revenues, income from sale of materials and construction revenue engineering.
The following table shows the Company's revenue by business segment for the periods indicated.