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Corporación Interamericana de Entretenimiento, S.A. de C.V.
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Page 1: Corporación Interamericana de Entretenimiento, S.A. de C.V.

Corporación Interamericana de Entretenimiento, S.A. de C.V.

Page 2: Corporación Interamericana de Entretenimiento, S.A. de C.V.

Leading “out-of-home” entertainment company in Latin America, Spain and the U.S. Latin markets

51 million customers in 2003

Best of breed entertainment for every budget:

Concerts, theater, sporting, cultural, family, popular fairs and corporate events

Amusement / educational parks

Gaming: Number based games and off-track betting

Vertical Integration = multiple revenue streams and minimal risks

Significant marketing revenue from proprietary entertainment and advertising properties

Expertise organized by country and business areas = management depth

Positive free cash flow targets in place after a period of capital intensive investments for future growth

CIE today

2

Page 3: Corporación Interamericana de Entretenimiento, S.A. de C.V.

A business model that adapts to various forms of “out-of-home” entertainment:

Business Model

3

ConsumerContent

Sponsors SouvenirsFood & BeverageTicket Sales

Venues

Events:

Music

Sporting

Folkloric & Popular

Family

Cultural

Theater

Mechanical games

Betting / Gaming

Animals

Horse Racing

Stadiums

Arenas

Trade & Exhibition Centers

Theme Parks

Zoos

Race Tracks

Amphitheatres

Theaters

Auditoriums

Page 4: Corporación Interamericana de Entretenimiento, S.A. de C.V.

The Company has three operating divisions with the following businesses:

Live Entertainment Mexico, Argentina, Brazil, Chile, Spain,

Latin U.S.

Venue Operation

Gaming

Amusement Parks

Entertainment

Sponsorships,

Movie Theater Advertising

Billboard Advertising / Overpasses – Airports

Naming Rights

Radio,

Rotational Advertising

Food, Beverage and Merch.

Commercial

Ticketing: Mexico, Brazil, Argentina, Chile

Teleservices

Services

3 Divisions

77% 13% 10%

Revenue Contribution

Operating divisions

4

Page 5: Corporación Interamericana de Entretenimiento, S.A. de C.V.

Content

Entertainment Division

Commercial Division

Services Division

Financial Results for 3Q2004

Operating Results for 3Q2004 and 2004 Outlook

5

Page 6: Corporación Interamericana de Entretenimiento, S.A. de C.V.

$35 Additional Revenue StreamsUS$100 in Box Office Receipts

ExpensesUS $38

ArtistsUS $40

PromotionUS $10

Venue US $12

SponsorshipUS $27

TicketingUS $7

F&B/MerchandisingUS $1

Food & Beverages

Ticket Sales

Venue Operator

Sponsorship

Promoter+

+

+

+

0% 100%Maximum attendance required to breakeven

49%49%

51%51%

82%82%

54%54%

65%65%

Vertical integration = maximizes revenues / minimizes risks

Entertainment Division

6

Breakeven point (number of tickets)

Page 7: Corporación Interamericana de Entretenimiento, S.A. de C.V.

Mexico

Leading live entertainment company

Partnerships/JV with Televisa, Ticketmaster and others

3,391 live events produced in 2003; 5.6 million attendees

Operates 11 live entertainment venues

Musical, theatrical, sporting, family / cultural and corporate events

Growth Opportunities:

Utilize assets to build additional revenue streams

Sporting events: Beach Volleyball, Triathlons, etc

Strongest concert calendar in years (for 2004)

Leverage synergies afforded by Televisa relationship: Content exchange, access to advertising, etc.

Auto racing; NASCAR Mexico & Desafio Corona, Monster Trucks

Popular Fairs and Folkloric events

Entertainment Division – Live Entertainment

7

Page 8: Corporación Interamericana de Entretenimiento, S.A. de C.V.

Brazil

Operates 4 live entertainment venues in Sao Paulo and Rio de Janeiro

Musical, theatrical, family / cultural and corporate events

Regional tours

Strong local talent base

Growth Opportunities:

Expand local productions in the country

Argentina / Chile:

Operates Teatro Sky Opera and Obras Sanitarias in Buenos Aires

Musical and local theatrical events

Operates the Buenos Aires Zoo

Produces live events in Santiago, Chile

Growth Opportunities:

Expand local productions, evaluate international artist events

Entertainment Division – Live Entertainment

8

Page 9: Corporación Interamericana de Entretenimiento, S.A. de C.V.

Spain

Company’s stronges theatrical market

JV with Stage Holding, Europe’s leading theater production company

Strong widely acclaimed productions in portfolio:

Mamma Mia!, Aida, Sound of Music, 42nd Street and others

Operates 3 live entertainment venues in Madrid

Currently playing: CATS and Cabaret

U.S. Latin market

Promotes Latin talent for the U.S. market

Entertainment Division – Live Entertainment

9

Page 10: Corporación Interamericana de Entretenimiento, S.A. de C.V.

52 Hectares located in exlcusive area of Mexico City

Rights obtained in 1998:

Horse race track 25 years, renewable

Surrounding areas 50 years, renewable

License to operate 45-off track betting centers / number based games

A family destination entertainment concept: Horse race track, Trade & Exhibition Center, Granja las Américas and other planned developments

Entertainment Division – Gaming

10

Horse race trackTrade & Exhibition Center

Granja

Horse

Stables

Page 11: Corporación Interamericana de Entretenimiento, S.A. de C.V.

Las Américas Horse Race Track:

One of the world’s longest racing season

begins late January, ends early December

Seating capacity for 7,500 visitors

More than 1,400 races in season

More than 1,500 horses in inventory

Entertainment Division – Gaming

11

Page 12: Corporación Interamericana de Entretenimiento, S.A. de C.V.

The Sports Books (off-track betting) and Yaks (number based games) network began operations in 1999

Currently there are 28 units in operation

Entertainment Division – Gaming

12

HermosilloChihuahuaMonterreyCiudad NezaMorelia

Mexico City: 16

• 28 units opened as of September 2004

• Additional units for 2004:

Page 13: Corporación Interamericana de Entretenimiento, S.A. de C.V.

Centro Banamex is the largest and most important convention center in Mexico

•Total area over 180,000 square meters

•Exhibition area is 34,000 square meters

The leader in its marketplace, renting over 5m square meters of exhibition space

Located inside the Las Américas Complex

Bookings and capacity are over 80%

Expos include: Expo Comm, Abastur, Mexican Gift Show, etc.

Entertainment Division – Trade & Exhibition Center

13

Page 14: Corporación Interamericana de Entretenimiento, S.A. de C.V.

Entertainment Division – Granja Las Américas

14

1.4 Hectares and 9,000 m2 of construction; an extreme sports area and 21 theme pavillions

An investment of Ps. 82.3 million, primarily covered by sponsors

Able to receive 3,000 visitors per day in two shifts; 540,000 visitors budgeted for the first year of operations

Page 15: Corporación Interamericana de Entretenimiento, S.A. de C.V.

CIE is Latin America’s leading operator / developer of amusement parks

7th largest park operator in the world

Number of attendants in 2003 reached 10 million

Operation of 11 amusement parks in 5 cities

CIE focusses on serving low/medium-level-of-income social groups

Entertainment Division – Theme Parks

15

Mexico City:• Divertido Ciudad de México• La Feria de Chapultepec • Naucalli Mágico• Perimágico• Planeta Azul

Guadalajara:• Divertido Guadalajara• Selva Mágica

Acapulco• CICI

Bogotá• El Salitre Mágico• CICI Aquapark

Miami, Florida• Wannado City

Page 16: Corporación Interamericana de Entretenimiento, S.A. de C.V.

Creation of unique concept for the U.S. Market: Wannado City™ What it is:

America’s first indoor role-playing theme park for kidsWhat kids do there:

Learn by having fun, through a concept called “real play”

Key Business Drivers:

Admission revenue, in-facility revenue, sponsorships

Experienced management team in place

Pricing: $24.95 age 3 –14 adults $15.95

Estimate 1M visitors in first 12 months of operations

Entertainment Division – Theme Parks

16

Page 17: Corporación Interamericana de Entretenimiento, S.A. de C.V.

Entertainment Division – Theme Parks

17

Positioning Wannado City:

Disney = Magic Disney = Magic

Universal Studios = Adventure/ActionUniversal Studios = Adventure/Action

Nickelodeon = KidsNickelodeon = Kids

Cartoon Network = AnimationCartoon Network = Animation

Discovery = EducationalDiscovery = Educational

PBS = Young kids/EducationalPBS = Young kids/Educational

Wannado City = REALWannado City = REAL

Page 18: Corporación Interamericana de Entretenimiento, S.A. de C.V.

Content

Entertainment Division

Commercial Division

Services Division

Financial Results for 3Q2004

Operating Results for 3Q2004 and 2004 Outlook

18

Page 19: Corporación Interamericana de Entretenimiento, S.A. de C.V.

We have become an extraordinary alternative for connecting brands with segmented markets

Radio

Music

Amusement Parks

Corporate Events

Movie Theater Advertising

Ticketing

Naming Rights

Overpasses

Venues

Ability to use an advertising property to

highly target the advertising customer

Audience Measurement

Commercial Division - Advertising Properties / Sponsorships

19

Airports / Skywalks

Rotational Advertising

Becoming integrated partners in brand

positioning

Page 20: Corporación Interamericana de Entretenimiento, S.A. de C.V.

Commercial Division - Cineminutos

20

Advertising at Mexican Cinema theaters

Agreements with Cinepolis and Cinemark, two Mexican leading cinema operators, which amount with over 60% of total marketshare.

The advertising market at cinema theaters is valued at US$40 million:

Advertising that targets a defined customer baseNot competing against TV or radio

Rights also include:Marketing of CineminutosCommercial exploitation of all promotional

and advertisements at theatersPromotional of special events at theaters1,356 projected screens 8% higher than

2003

Page 21: Corporación Interamericana de Entretenimiento, S.A. de C.V.

Commercial Division - Publitop

21

Pedestrian Overpasses

Agreements with several municipalities for the installation of overpasses

In return CIE is granted the long-term advertising rights to exploit

Operations of 189 overpasses as of June 2004

Acquisition of Keenex, Mexico’s third largest pedestrian overpass operator

Publitop’s capacity increased by 43% to 218 concessions

Advertising at Airports

8-year agreement with Grupo Aeroportuario Centro Norte for the marketing of indoor advertising

Outdoor advertising: billboards on access streets, benches, parking areas and other outdoor areas

Indoor advertising: baggage claim areas, corridors, boarding areas, etc.

Annual passenger flow: approx. 11 million

Page 22: Corporación Interamericana de Entretenimiento, S.A. de C.V.

Commercial Division - Unimarket

22

Static-Rotational Advertising

Marketing of static-rotational advertising on the side line barriers of professional soccer fields in Mexico

Soccer is the most important popular and recreational activity in the country

Professional matches are attended by all socio-economic groups

The most important advertising presence and impact during matches is static-rotational signage

Over 300 matches are annually broadcasted by TV

Advertisement for 11 Mexican soccer teams

Page 23: Corporación Interamericana de Entretenimiento, S.A. de C.V.

Commercial Division - Radio

23

The Business:

Leading operator of radio stations in Argentina

Activities began in 1998 with the acquisition of R&P, owner of Radio Splendid and Rock&Pop, leading frequencies in AM and FM, respectively

Acquisition of three leading radio operators in 2000, which led to the creation of the largest radio group in the country

An extraordinary medium of communications and promotion for the different events the Company produces

FM marketshare for the company is above 45%

The market leader in invoicing volume, close to 55% of the market

Page 24: Corporación Interamericana de Entretenimiento, S.A. de C.V.

Content

Entertainment Division

Commercial Division

Services Division

Financial Results for 3Q2004

Operating Results for 3Q2004 and 2004 Outlook

24

Page 25: Corporación Interamericana de Entretenimiento, S.A. de C.V.

Leading ticketing business in the region, with medium- to long-term contracts with venues, promoters and events

Operations through call centers, box offices, internet and outlets in the region

More than 10.4 million tickets sold in the region in the first six months of 2004

* On-line activities are currently carried on in Mexico and Brazil.

Country Community Start-up

Mexico City *MonterreyGuadalajara *

Mexico 199219932001

Buenos Aires Argentina 1998

Santiago 1998Chile

Sao Paulo *Rio de JaneiroSalvador

200020012001

Brazil

Services Division – Ticketing

25

Page 26: Corporación Interamericana de Entretenimiento, S.A. de C.V.

Services Division - Teleservices

26

Sitel

JV with Sitel Corp. for teleservices for large corporations in Mexico and Latin America.

Call centers in Mexico City and Monterrey, Bogotá and Panama City with in and out-bound services.

• Product orders

• Credit card activations

• Fraud protections

CIE has provided services to clients in different industries in companies which include:

•Aegon

•American Express

•America On Line

•Banamex

•Banorte

•Hewlett Packard

•Ford Insurance

•Palm

•Philip Morris

•Prodigy

•Serfin

•Telmex

•Avaya

•Comcel

•Microsoft

•TV Cable

•HSBC Bank

•Many others

Page 27: Corporación Interamericana de Entretenimiento, S.A. de C.V.

Content

Entertainment Division

Commercial Division

Services Division

Financial Results for 3Q2004

Operating Results for 3Q2004 and 2004 Outlook

27

Page 28: Corporación Interamericana de Entretenimiento, S.A. de C.V.

28

Operative Highlights

Events Live Racetrack (racing days)

Ticketmaster Tickets (Mil.) Mexico South America Total

Attendance (Mil. of people) Live Events Amusement Parks Las Américas Horse Racetrack

Sports Books & Yaks Per capita consumption (Ps.)

Shops Pedestrian Overpasses Structures in operation Billboards

Cineminutos Movie Theaters

1,260

43

3.71.95.6

1.93.50.2

619

21

122431

1,280

1,28039

3.51.75.2

1.52.50.3

564

28

213687

1,384

3,749

127

9.64.8

14.5

5.07.70.5

639

21

3,857

126

10.25.5

15.6

4.96.00.4

588

28

3Q03 3Q04 9M03 9M04

1.6%(9.3%)

(5.5%)(12.2%

)(7.8%)

(21.1%)

(28.6%)

50.0%

(9.0%)

33.3%

74.6%57.2%

8.1%

% Chg

2.9%(1.0%)

5.3%12.9%7.8%

(2.0%)(22.1%

)(20.0%

)

(8.1%)

33.3%

% Chg

Page 29: Corporación Interamericana de Entretenimiento, S.A. de C.V.

29

Financial Highlights

Revenue

EBITDAEBITDA Margin

Operating Income

CCF

Current Assets Assets L.T. & Other AssetsTotal Assets

DebtTotal Liabilities

Stockholders’ Equity

3Q03

3Q04

9M03 9M04

% Chg

% Chg

1,772

40622.9%

285

60

4,56310,41714,980

4,6676,619

8,362

1,932

42422.0%

294

64

4,81310,31815,131

5,0407,694

7,437

9%

5%(90 pb)

3%

6%

5%(1%)

1%

8%16%

(11%)

4,934

1,13723.1%

792

151

5,533

1,23522.3%

848

287

12%

9%(80 pb)

7%

89%

Note: Figures are expressed in millions of Mexican pesos as of September 2004

Page 30: Corporación Interamericana de Entretenimiento, S.A. de C.V.

30

Revenue by Division

3Q03 3Q04 9M03 9M04

EntertainmentCommercialServices

76%13%10%

77%13%10%

76%14%11%

77%13%10%

1,3541,485

234 251184 196

0.0

200.0

400.0

600.0

800.0

1,000.0

1,200.0

1,400.0

1,600.0

Entertainment Commercial Services

3Q03 3Q04

3,7454,236

667 723523 574

0.0

500.0

1,000.0

1,500.0

2,000.0

2,500.0

3,000.0

3,500.0

4,000.0

4,500.0

Entertainment Commercial Services

9M03 9M04

Revenue Distribution by Division

Note: Figures are expressed in millions of Mexican pesos as of September 2004

+7%+7%

+10%

+10%

+8%

+13%

* The total may not add up to 100% due to rounding

Page 31: Corporación Interamericana de Entretenimiento, S.A. de C.V.

31

EBITDA and EBITDA Margin

271

253

287

312321

330322

336

353

340

363 365

430

337

394

443

366

444

424

406 22.6%22.0%

25.9%25.8%

24.8%

24.4%

24.4%

24.2%

23.5% 23.2%

23.1%23.5%

23.6%23.1%

23.1%

23.1%23.2%

22.9%

22.5%

22.4%

220

270

320

370

420

470

4Q99 1Q00 2Q00 3Q00 4Q00 1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04

Mill

ions

of

peso

s as

of

Sep

.04

0%

5%

10%

15%

20%

25%

30%

EB

ITD

A M

argi

n

EBITDA EBITDA Margin

11

23

14

15

16

39

110

111

415

419

221

223

225

328

128*

Note: Effect on the reubication of the unit located at Angus Centro Historico, D.F.

Units openedUnits in operation

Page 32: Corporación Interamericana de Entretenimiento, S.A. de C.V.

32

Debt Profile

By the end of 3Q04, the Group’s debt was Ps.5,040 millions; from which 79% is denominated in pesos, 14% in UDIs, and the rest in other currencies.

The annual amortization and the allocation is as follows:

151

1,063

358

2,480

625

283

46 34

0

500

1,000

1,500

2,000

2,500

3,000

2004 2005 2006 2007 2008 2009 2010 2011

Mill

ions

of

peso

s 0

4

Part. o/tot. 3% 21% 7% 49% 12% 6% 1% 1%

Total: Ps.5,040

Page 33: Corporación Interamericana de Entretenimiento, S.A. de C.V.

33

Debt Profile (cont.)

Refinancing:

• Citicorp (US$20 mill.; due in 2011; LIBOR+350 pb); Proceeds were used in refinancing short-term debt incurred in the past for the construction and operation of Wannado City Miami.

• CSFB (US$30 mill.; due in 2008; LIBOR+330 pb); aimed at refinancing CIE’s short term debt to long term. Subsequently, the Company contracted a Swap secured in Mexican pesos and interest rate based on TIIE + 330 pb

Swap with CSFB to convert Ps.1,490 millions, (or 69%) of CIE’s UDI-denominated medium term note principal value into Mexican pesos, from a total of Ps. 2, 177 millions.

Debt Bank Loans Securitized Loans Total

Cash

Net Debt

Interest Paid 3Q04

Stockholders’ Equity

EBITDA 3Q04EBITDA LTM

Ratios EBITDA-to-Interest Expense Net Debt / Stockholders’ Equity Net Debt / EBITDA LTM

2,3632,6775,040

603

4,437

125

7,437

4241,680

3.51x0.60x2.64x

Sep.04

Page 34: Corporación Interamericana de Entretenimiento, S.A. de C.V.

Content

Entertainment Division

Commercial Division

Services Division

Financial Results for 3Q2004

Operating Results for 3Q2004 and 2004 Outlook

34

Page 35: Corporación Interamericana de Entretenimiento, S.A. de C.V.

35

CIE Entertainment

Live Events:

Strong agenda of international events, presented at Palacio de los Deportes, Teatro Metropolitán, and Salón 21; g.e. Stomp, The Cure, Kiss, Sting & Annie Lennox

New projects:

“Hermanos Rodríguez” Race Track:

Organization of ¼ mile competitions; construction of an additional part of the race track Organization of Off-road competitions.

Organization of “Feria del Fútbol” and of “CuerpoManía”

Grand Prix of Mexico 2004:

“Hermanos Rodríguez” Race Track, Nov. 5-7 25 sponsors confirmed (g.e. Telmex, Gigante, Banamex, Roshfrans, Tecate, Herdez,

Bridgestone, Comex, Telcel, Johnson Controls, Tag, Nextel, IBM, Sports City)

Page 36: Corporación Interamericana de Entretenimiento, S.A. de C.V.

36

Norah Jones REM Enrique Bunbury The Doors David Byrn Yanni Pet Shop Boys G3 Juan Gabriel Chayanne Sin Bandera Rocio Durcal Oreja de Van Gogh Belinda Circo Tyani Gran Premio de México Desafio Corona 2004 Oliver Violinista en el Tejado Quiereme Mucho La Generación Atari

Fito Paez Rata Blanca Café Tacuba The Doors Catupecu Peter Pan Nuts Creamfields G3 The Wailers Kraftwork Los Ratones

Deborah Colker Alicia Keys Lulú Santos The Calling The Wailers Maria Rita Beth Carvalho Unimed The Offspring Cezario Formaturas The Doors Jota Quest Roupa Nova Bruno & Marrone Danni Carlos Arraiá do Guanabara Sandy & Junior G3 The Wailers Fábio Junior Art Braz Shangri-La Cidade Negra Jorge Ben Jor Toquinho Chrissie Hynde Vanessa da MataVanessa da Mata Gal Costa Fernanda Torres Barao Vermelho

Cabaret Cats

Agenda of upcoming events

Page 37: Corporación Interamericana de Entretenimiento, S.A. de C.V.

37

CIE Amusement Parks

Wannado City Miami: The park initiated operations on August 12, 2004 at Sawgrass Mills Attendance levels (2,000 persons / day) and per capita (US$23.00) growing, according to

projections. Reinforcement of merchandising strategy Jurisdictional situation with Amazing Toys arranged

Chicago’s Wannado City Project: Park to be located at Gurnee Mills, operated by The Mills Corporation Authorization based on the results of the economic and market studies.

Valle Fantástico at Puebla:

Operation, assessment, and administration of the first amusement park in Puebla Will initiate operations on December 2004, with an attendance level of nearly 700,

000

Guadalajara’s La Granja Project: Presentation of the concept to local sponsors, who show interest for the project Planned to be located at Divertido’s lands that haven’t been used

Page 38: Corporación Interamericana de Entretenimiento, S.A. de C.V.

38

CIE International

Argentina:

Positive trend on assisstance and per capitas continues at the Buenos Aires Zoo. “Peter Pan” and “Nuts”, medium format theatrical plays, registred profitable levels of

assistance and a stable trend.

Brazil:

Renovation of theatrical contents in Sao Paulo

Opening of “Chicago”, which substitutes “La flor de mi buen querer” Valuation studies for the opening of “The Phantom of the Opera” Opening of “Mademoiselle Channel”

Continues the expansion of events based on local talent, and new concepts, into the country

Spain:

Trend towards a slow recuperation in attendance at theatrical productions after March 11, 2004. “Cats” and “Cabaret”

Attendance temporarily affected because seasonality (Summer vacations on Spain)

Page 39: Corporación Interamericana de Entretenimiento, S.A. de C.V.

39

CIE Commercial

Publitop and Media Innovations: Digital Advertising at airports

Torreón, Coah.

Tampico, Tamps.

Acapulco, Gro.

Cd. Juárez, Chi.

Chihuahua, Chi.

Monterrey, NL.

Reynosa, Tamps.

San Luis Potosí, SLP.

Ixtapa Zihuatanejo, Gro.

Zacatecas, Zac.

Durango, Dgo.

Mazatlán, Sin.

Culiacán, Sin.

Digital boards of advertising and flights information, on the 13 airports of GACN Monterrey, Acapulco and Ixtapa are the first airports with the concept, the rest of them

will be installed on the first months of 2005.

Advertisment displayed near the information the passengers and visitors always look for. Impacts: 11.5 millions passengers, more

than 8.5 millions visitors. The concept inables the implementation

of local, regional, or national strategies.

Benefits for advertisers:

Page 40: Corporación Interamericana de Entretenimiento, S.A. de C.V.

40

CIE Las Américas

Twenty eight Sports Books and Yaks units working at 3Q04; openning of Tonalá and relocation of the Centro Histórico (D.F.) unit.

Puebla Monterrey Cuatitlán Izcalli Distrito Federal Tampico

Reynosa Acapulco Coatzacoalcos Ecatepec

Three opennings programed by the end of 2004: Ciudad Neza, Hermosillo

and Morelia

Spots evaluated for initiating operations for the next year include: