6-K 1 cdind4q2006.txt CD'S FOURTH QUARTER RERPORT IN AN STAND ALONE BASIS SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 6-K REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13A-16 OR 15D-16 OF THE SECURITIES EXCHANGE ACT OF 1934 For the month of March, 2007 Durango Corporation (f/k/a Grupo Industrial Durango, S.A. de C.V.) - ------------------------------------------------------------------- (Translation of registrant's name into English) Torre Corporativa Durango, Potasio 150, Cuidad Industrial, Durango, Durango, Mexico - ------------------------------------------------------------------- (Address of principal executive offices) Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F. Form 20-F [x] Form 40-F Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934. Yes No [x] If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-_____________. CORPORACION DURANGO, S.A.B. DE C.V. 10.8116 INDIVIDUAL BALANCE SHEETS AS OF DECEMBER 31, 2005 AND DECEMBER 31, 2006 (UNAUDITED) EXPRESSED IN TERMS OF THE PURCHASING POWER OF MEXICAN PESOS AS OF DECEMBER 31, 2006 (Stated in thousands of Pesos and Dollars) US$ DLLS. December 31, Dec 31, Dec 31, 2005 2006 2006 ASSETS CURRENT ASSETS: Cash and cash equivalents ........................$ 303,065$ 34,267 3,169 Due from related parties ......................... 100,914 48,399 4,477 Taxes recoverable and other assets ............... 44,589 15,623 1,445 Total current assets ................... 448,568 98,289 9,091 LONG-TERM RELATED PARTIES .......................... 9,011,346 1,563,866 144,647 INVESTMENT IN SUBSIDIARIES ......................... 3,566,354 11,779,300 1,089,506 OTHER ASSETS, net .................................. 32,449 36,446 3,371 Total assets ..........................$ 13,058,717$ 13,477,901 1,246,615 LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Bank loans and current portion of long-term debt . 154,203 150,670 13,936 Interest payable ................................. 241 485 45 Trade accounts payable ........................... 905 3,801 352 Accrued liabilities .............................. 216,197 208,010 19,240 Total current liabilities ............. 371,546 362,966 33,572 LONG-TERM DEBT ..................................... 5,866,230 5,493,731 508,133 LONG-TERM RELATED PARTIES .......................... 1,976,485 2,672,614 247,199 Total long term liabilities ............ 7,842,715 8,166,345 755,332 Total liabilities ..................... 8,214,261 8,529,311 788,904 STOCKHOLDERS' EQUITY: Total stockholders' equity ............. 4,844,456 4,948,590 457,711 Total liabilities and stockholders' equi$ 13,058,717$ 13,477,901 1,246,615 Exchange rate: $ 10.8116

CORPORACION DURANGO, S.A.B. DE C.V. INDIVIDUAL STATEMENT OF CHANGES IN FINANCIAL POSITION (UNAUDITED) EXPRESSED IN TERMS OF THE PURCHASING POWER OF MEXICAN PESOS AS OF DECEMBER 31, 2006 (Stated in thousands of Pesos and Dollars) * Full Year Acum. Dec Acum. Dec 2005 2006 US$ 2006 OPERATING ACTIVITIES: Net income (loss) ..............................................$ 186,431$ 151,412US 14,005 Add (deduct)- Charges (credits) to income which do not require (generate) resources: Depreciation and amortization ........................... 10,697 0 0 Loss (Gain) in subsidiaries ............................. 919,771 -116,070 -10,736 Deferred income taxes ................................... 329,908 16,479 1,524 Other.................................................... 0 0 0 Total items which do not require cash.................... 1,260,376 -99,591 -9,211 Net resources generated from income .......................... 1,446,807 51,821 4,793 Changes in operating assets and liabilities: Decrease (Increase) in inventories ......................... 4,467 0 0 Decrease (Increase) in current assets ...................... 37,536 28,966 2,679 Decrease (increase) in account receivables, net ............ -54,452 52,515 4,857 (Decrease) increase in accounts payable and accrued liabilities ...................................... 4,680 -5,047 -467 Resources generated by operating activities .................. 1,439,038 128,255 11,863 FINANCING ACTIVITIES: Increase (Decrease) in bank loans and others ............ -4,239,358 7,740,151 715,912 Increase (Decrease) in capital .......................... 302,501 0 0 Gain on shares acquisition .............................. 3,094,160 19,435 1,798 Net resources generated from financing activities ............ -842,697 7,759,586 717,709 INVESTMENT ACTIVITIES: Acquisition and sale of property, plant and equipment.... 412,197 0 0 Investment in subsidiaries .............................. -712,983 -8,156,639 -754,434 Net resources applied to investing activities ................ -300,786 -8,156,639 -754,434 INCREASE IN CASH AND CASH EQUIVALENTS .......................... 295,555 -268,798 -24,862 CASH AND CASH EQUIVALENTS AT BEGINNING OF THE PERIOD............ 7,510 303,065 28,031 CASH & CASH EQUIVALENTS AT END OF THE PERIOD ...................$ 303,065$ 34,267US 3,169 * The exchange rate of 10.9935 was used for translation purposes.

CORPORACION DURANGO, S.A.B. DE C.V. INDIVIDUAL STATEMENTS OF INCOME (UNAUDITED) EXPRESSED IN TERMS OF THE PURCHASING POWER OF MEXICAN PESOS AS OF DECEMBER 31, 2006 Thousands of Pesos Thousands of Dollars 4Q 4Q 4Q 4Q 2005 2006 Var 2005 2006 Var Gain (Loss) in subsidiaries .............$ 104,166$ 224,492 116% 9,412 20,763 121% Selling and Administrative expenses ..... 2,262 1,935 -14% 204 179 -12% Operating income ................... 101,904 222,557 118% 9,208 20,584 124% FINANCIAL EXPENSE: Interest expense ........................ 155,961 189,930 22% 14,095 17,567 25% Interest income ......................... -306,498 -214,004 -30% -27,700 -19,794 -29% Exchange (gain) loss, net ............... -6,029 -1,313 -78% -545 -121 -78% Gain on monetary position ............... -1,192 19,817 N/A -108 1,833 N/A Total financial expense ............... -157,758 -5,570 -96% -14,258 -515 -96% OTHER INCOME (EXPENSES): Other income (expense), net ............. -102,063 -26,209 -74% -9,224 -2,424 -74% Total other income (expense) .......... -102,063 -26,209 -74% -9,224 -2,424 -74% Income (loss) before income and asset t 157,599 201,918 28% 14,242 18,675 31% Provision for deferred income taxes ..... 51,658 -9,695 N/A 4,669 -897 N/A Net income ..............................$ 105,941$ 211,613 100% 9,573 19,572 104%

CORPORACION DURANGO, S.A.B. DE C.V. INDIVIDUAL STATEMENTS OF INCOME (UNAUDITED) EXPRESSED IN TERMS OF THE PURCHASING POWER OF MEXICAN PESOS AS OF DECEMBER 31, 2006 Thousands of Pesos Thousands of Dollars Ac Ac Ac Ac 2005 2006 Var 2005 2006 Var Gain (Loss) in subsidiaries .............$ -919,772$ 116,070 N/A -76,036 11,695 N/A Selling and Administrative expenses ..... 8,576 7,908 -8% 751 707 -6% Operating income ................... -928,348 108,162 -112% -76,787 10,988 -114% FINANCIAL EXPENSE: Interest expense ........................ 614,057 752,714 23% 53,678 67,152 25% Interest income ......................... -2,205,584 -841,146 -62% -189,062 -75,048 -60% Exchange (gain) loss, net ............... -29,756 -888 -97% -2,604 -86 -97% Gain on monetary position ............... -5,121 51,042 N/A -340 4,635 N/A Total financial expense ............... -1,626,40 -38,278 -98% -138,328 -3,347 -98% OTHER INCOME (EXPENSES): Other income (expense), net ............. -181,717 21,451 N/A -15,904 1,831 N/A Total other income (expense) .......... -181,717 21,451 N/A -15,904 1,831 N/A Income (loss) before income and asset t 516,339 167,891 -67% 45,637 16,166 -65% Provision for deferred income taxes ..... 329,908 16,479 -95% 28,757 1,430 -95% Net income ..............................$ 186,431$ 151,412 -19% 16,880 14,736 -13%

CORPORACION DURANGO, S.A.B. DE C.V. COMPLEMENTARY NOTES TO THE FINANCIAL INFORMATION SUMMARY OF SIGNIFICANT ACCOUNTING AND FINANCIAL POLICIES: FOLLOWING IS A SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES FOLLOWED BY THE COMPANY IN THE PREPARATION OF THE UNCONSOLIDATED FINANCIAL STATEMENTS. 1.1 BASIS OF PRESENTATION: THE UNCONSOLIDATED FINANCIAL STATEMENTS HAVE BEEN PREPARED IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES IN MEXICO (MEXICAN GAAP) ISSUED BY THE MEXICAN INSTITUTE OF PUBLIC ACCOUNTANTS (MIPA). AS OF JUNE 1, 2004, THE MEXICAN BOARD FOR RESEARCH AND DEVELOPMENT OF FINANCIAL REPORTING STANDARDS, OR CINIF, ASSUMED THE RESPONSIBILITY OF ESTABLISHING MEXICAN ACCOUNTING AND REPORTING STANDARDS. AS PART OF ITS RESPONSIBILITY, AND AFTER DUE EXPOSURE IN 2004 AND 2005, THE CINIF ISSUED SEVERAL FINANCIAL REPORTING STANDARDS (NORMAS DE INFORMACION FINANCIERA, OR NIFS) THAT BECAME EFFECTIVE ON JANUARY 1, 2006. THE PRINCIPAL OBJECTIVE OF THE CINIF IN ISSUING THE NIFS IS TO ACHIEVE GREATER CONCURRENCE BETWEEN MEXICAN GAAP AND INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRSS). THE STRUCTURE OF THE NIFS IS AS FOLLOWS: - NEW BULLETINS AND INTERPRETATIONS TO THE BULLETINS ISSUED BY CINIF. - EXISTING BULLETINS ISSUED BY THE ACCOUNTING PRINCIPLES BOARD OF THE MEXICAN INSTITUTE OF PUBLIC ACCOUNTANTS THAT HAVE NOT BEEN AMENDED, REPLACED OR REPEALED BY THE NEW NIFS. - IFRSS THAT ARE SUPPLEMENTARY GUIDANCE TO BE USED WHEN MEXICAN GAAP DOES NOT PROVIDE PRIMARY GUIDANCE. THE CIRCULARS ISSUED BY THE ACCOUNTING PRINCIPLES BOARD WILL CONTINUE TO HAVE THE STATUS OF RECOMMENDATIONS AND WILL BE PART OF THE NIFS UNTIL SUCH TIME AS THEY ARE REPLACED OR REPEALED BY NIFS. THE NIFS ISSUED TO DATE ARE NOT EXPECTED TO HAVE A SIGNIFICANT EFFECT ON FINANCIAL INFORMATION REPORTING. THEY ARE THE FOLLOWING: NIF A-1 "FINANCIAL INFORMATION STANDARDS STRUCTURE". NIF A-2 "BASIC PRINCIPLES". NIF A-3 "USERS REQUIREMENTS AND FINANCIAL STATEMENTS OBJECTIVES". NIF A-4 "FINANCIAL STATEMENTS QUALITATIVE CHARACTERISTICS". NIF A-5 "FINANCIAL STATEMENTS BASIC ELEMENTS". NIF A-6 "RECOGNITION AND VALUATION". NIF A-7 "PRESENTATION AND DISCLOSURE". NIF A-8 "SUPPLEMENTARY STANDARDS TO MEXICAN GAAP". NIF B-1 "ACCOUNTING CHANGES AND ERROR CORRECTIONS". 1.2 BASIS FOR COMPARISSON EFFECTS IN THE FINANCIAL STATEMENTS: THE UNCONSOLIDATED FINANCIAL STATEMENTS HAVE BEEN PREPARED IN ACCORDANCE WITH THE NIFS AND REFLECT THE PURCHASING POWER OF THE MEXICAN PESO AS OF THE MOST RECENT REPORTING DATE. FOR COMPARISON PURPOSES, UNCONSOLIDATED FINANCIAL STATEMENTS OF PRIOR YEARS HAVE ALSO BEEN RESTATED TO REFLECT IDENTICAL PURCHASING POWER, USING FACTORS DERIVED FROM CHANGES IN THE NATIONAL CONSUMER PRODUCTS INDEX (NCPI) ISSUED BY BANCO DE MEXICO. 1.3 INVESTMENTS IN SUBSIDIARIES: INVESTMENTS IN AFFILIATED AND ASSOCIATED COMPANIES STOCKS ARE VALUED BY THE PARTICIPATION METHOD. THE ACQUISITION COST OF THE STOCKS IS MODIFIED BY THE PROPORTIONAL PART OF THE CHANGES IN THE CAPITAL STOCK OF AFFILIATED AND ASSOCIATED COMPANIES AFTER THE ACQUISITION DATE. PARTICIPATION OF THE COMPANY IN THE AFFILIATED AND ASSOCIATED COMPANIES' INCOME IS PRESENTED SEPARATELY IN THE STATEMENTS OF OPERATIONS. 1.4 FINANCIAL INSTRUMENTS: FINANCIAL INSTRUMENTS HELD FOR TRADING OR AVAILABLE FOR SALE ARE VALUED AT FAIR VALUE (WHICH IS SIMILAR TO MARKET VALUE) WITH GAINS OR LOSSES RECOGNIZED IN THE STATEMENT OF OPERATIONS. FAIR VALUE IS THE AMOUNT FOR WHICH A FINANCIAL ASSET CAN BE EXCHANGED OR A FINANCIAL LIABILITY CAN BE PAID IN AN ARM'S-LENGTH TRANSACTION BETWEEN INTERESTED AND WILLING PARTIES. 1.5 RIGHTS AND LIABILITIES VALUATION IN FOREIGN CURRENCY: FOREIGN CURRENCY TRANSACTIONS ARE RECORDED AT THE APPLICABLE EXCHANGE RATE IN EFFECT AT THE TRANSACTION DATE. MONETARY ASSETS AND LIABILITIES DENOMINATED IN FOREIGN CURRENCY ARE TRANSLATED INTO MEXICAN PESOS AT THE APPLICABLE EXCHANGE RATE IN EFFECT AT THE BALANCE SHEET DATE. DIFFERENCES DUE TO EXCHANGE RATE FLUCTUATIONS FROM TRANSACTIONS AND PAYMENT DATES OR VALUATIONS AS OF THE MOST RECENT BALANCE SHEET DATE ARE RECOGNIZED IN INCOME. EXCHANGE RATE AS OF DECEMBER 31st, 2006 WAS $10.8116. STOCK INVESTMENT: THE INVESTMENT IN SUBSIDIARIES' STOCK IS PRESENTED VALUED UNDER THE EQUITY METHOD, TO FULFILL THE LEGAL DISPOSITIONS REQUIRING THE PRESENTATION OF "CODUSA'S" FINANCIAL STATEMENTS AS A LEGAL ENTITY. MOST SIGNIFICANT SUBSIDIARIES ARE AS FOLLOWS: GROUP (OR COMPANY) OWNERSHIP PERCENTAGE ACTIVITY ADMINISTRACION CORPORATIVA DE 100% ADMINISTRATIVE SERVICES DURANGO, S.A. DE C.V. CARTONPACK, S.A. DE C.V. 95% MANUFACTURING OF CORRUGATED BOXES COMPANIA FORESTAL DE DURANGO, 100% ADMINISTRATIVE SERVICES S.A. DE C.V. COMPANIA PAPELERA DE ATENQUIQUE, 93% MANUFACTURING OF PAPER FOR S.A. DE C.V. CORRUGATED BOXES DURANGO INTERNACIONAL, S.A. DE C.V. 100% ADVISORY, ADMINISTRATIVE AND ORGANIZATION SERVICES DURANGO INTERNATIONAL, INC. 100% MANUFACTURING OF PAPER FOR CORRUGATED BOXES AND CORRUGATED BOXES EMPAQUES DE CARTON TITAN, 100% MANUFACTURING OF CORRUGATED S.A. DE C.V. BOXES AND MULTI-WALL SACKS GRUPO PIPSAMEX, S.A. DE C.V. 100% MANUFACTURING OF NEWSPRINT AND BOND PAPER INDUSTRIAS CENTAURO, S.A. DE C.V. 84% MANUFACTURING OF PAPER FOR CORRUGATED BOXES PAPEL Y EMPAQUES TIZAYUCA, 100% MANUFACTURING OF PAPER FOR S.A. DE C.V. CORRUGATED BOXES PONDEROSA INDUSTRIAL DE MEXICO, 100% MANUFACTURING OF PLYWOOD S.A. DE C.V. PORTEADORES DE DURANGO, S.A. DE 100% HAULING FREIGHT C.V.

STOCKHOLDERS EQUITY: CAPITAL STOCK, STOCK SALE PREMIUM, STATUTORY LEGAL RESERVE AND RETAINED EARNINGS, INCLUDE THE RESTATED EFFECT, ACCORDING WITH THE NATIONAL CONSUMER PRICE INDEX (NCPI) FROM THE DATE THE CAPITAL WAS CONTRIBUTED AND FROM THE YEAR THE RESULTS AND PREMIUMS WERE DETERMINED RESPECTIVELY. THE RESTATED AMOUNTS REPRESENT THE REQUIRED AMOUNT TO MAINTAIN THE CONTRIBUTIONS AND ACCUMULATED RESULTS IN CONSTANT PESOS AS OF DECEMBER 31st,2006. FIXED AND VARIABLE EQUITY COMPONENTS: AMOUNT NUMBER OF SHARES FIXED PORTION 982,074 65,419,089 VARIABLE PORTION 678,873 45,222,022 -------- ----------- 1,660,947 110,641,111 DEFERRED TAXES: AS OF JANUARY 1st.,2000, WITH THE ISSUANCE OF BULLETIN D-4 ("DEFERRED TAXES" THE COMPANY RECOGNIZED TO THAT DATE (JANUARY 1st.,2000) THE INITIAL EFFECT OF DEFERRED TAXES DERIVED FROM TEMPORARY DIFFERENCES AS A GAIN OR A LOSS,IN SUBSECUENT PERIODS THE COMPANY IS IN COMPLIANCE WITH THE BULLETIN. IN ORDER TO RECOGNIZE THE DEFERRED INCOME TAX, THE HOLDING COMPANY AND ITS SUBSIDIARIES USE THE INTEGRAL ASSETS AND LIABILITIES METHOD, WHICH CALCULATES SUCH TAX, USING THE APPLICABLE STATUTORY TAX RATE TO THE TEMPORARY DIFFERENCES BETWEEN BOOK AND TAX VALUES OF THE ASSETS AND LIABILITIES AS OF THE END OF THE PERIOD. INTERNAL CONTROL: THE COMPANY HAS STARTED IMPLEMENTATION OF THE SARBANES OXLEY ACT WITH ADVISE FROM EXPERT ADVISORS. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. CORPORACION DURANGO, S.A. DE C.V. Date: March 21, 2007 By /s/ Mayela Rincon de Velasco -------------------------------- Name: Mayela Rincon de Velasco Title: Chief Financial Officer

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 6-K

REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13A-16 OR 15D-16 OF THE SECURITIES EXCHANGE ACT OF 1934

For the month of June 2006

Durango Corporation

(Translation of registrant’s name into English)

Torre Corporativa Durango, Potasio 150, Ciudad Industrial, Durango, Durango, Mexico 34208 (Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.Form 20-F x Form 40-F o

Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934. Yes o No x

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-___.

EXHIBITS

Pursuant to Section 4.01(a) of the Common Agreement, dated as of February 23, 2005, among Corporación Durango, S.A. de C.V. (the “Company”), the Guarantors and Additional Guarantors named therein, the A Lenders named therein, The Bank of New York, as Administrative Agent, Law Debenture Trust Company of New York, as Trustee, Deutsche Bank Trust Company Americas, as Collateral Agent, Deutsche Bank Mexico, S.A., Institución De Banca Multiple, Trust Division, as Collateral Agent, Deutsche Bank Trust Company Americas, as Guarantor Paying Agent, and the Subordinating Creditors named therein, the Company is required to deliver to the Administrative Agent and the Trustee the audited unconsolidated balance sheet of the Company as at the end of each fiscal year, the related audited unconsolidated statements of income and statement of changes in financial position of the Company for such fiscal year and the notes thereto.

The following exhibit is furnished with this document:

Exhibit 1. Financial statements of Corporación Durango, S.A. de C.V. at December 31, 2005 and 2004 and for the two years ended December 31, 2005 (unconsolidated).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	CORPORACION DURANGO, S.A. DE C.V.
Date: June 30, 2006	By:	/s/ Mayela Rincón de Velasco
		Name:	Mayela Rincón de Velasco
		Title:	Chief Financial Officer

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