UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 UNDER

~~UNDER~~ THE SECURITIES EXCHANGE ACT OF 1934

For the ~~six~~nine-month period ended ~~June~~September 30, 2012

Commission File Number 001-31894

ALESTRA, S. de R.L. de C.V.

(Translation of Registrant’s name into English)

Ave. Lázaro Cárdenas No. 2321, 9th Floor

Col. Residencial San Agustín

San Pedro Garza García N.L. 66260 México

(Address of principal executive office)

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 ¨~~

Form 20-F x Form 40-F ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ¨

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~~

Yes ¨ No x

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

Table of Contents

Cautionary Statement on Forward-Looking Statements			3
Item 1. Management’s Discussion and Analysis of Financial Condition and Results of Operations			4
Item 2. Unaudited Condensed Consolidated Financial Statements as of June 30, 2012 , December 31, 2011 and January 1, 2011, for the six months period ended June 30, 2011 and 2012, and for the three months period ended June 30, 2011 and 2012			F-1
Item 2. Unaudited Condensed Consolidated Financial Statements as of September 30, 2012, December 31, 2011 and January 1, 2011, and for the nine and three month periods ended September 30, 2011 and 2012			F-1

This Form 6-K consists of a Management’s Discussion and Analysis of Financial Condition and Results of Operations and unaudited condensed consolidated financial statements for Alestra, S. de R.L. de C.V. (“Alestra”) and its subsidiary, Servicios Alestra, S.A. de C.V. (“Servicios Alestra”), as of and for the ~~six~~nine months ended ~~June~~September 30, 2012.

As of January 1, 2012, the company adopted International Financial Reporting Standards (“IFRS”) following the guidance set forth by IFRS 1 - “First time adoption of IFRS” (“IFRS 1”), as issued by the International Accounting Standards Board and effective at ~~August~~January 311, 2012, for the preparation of its consolidated financial statements. Prior to 2012, the company prepared its audited consolidated financial statements in accordance with Mexican Financial Reporting Standards (“~~Mexican FRS~~MFRS”). The unaudited condensed consolidated financial statements as of ~~June~~September 30, 2012 and for the ~~six~~nine-month and three-month periods then ended are the company’s third set of interim condensed consolidated financial statements prepared under IFRS 1 ~~“First time adoption of IFRS”~~ and IAS 34 “Interim Financial Reporting”. The company’s first annual consolidated results reported under IFRS will be its audited consolidated financial statements as of and for the year ended December 31, 2012. Any subsequent changes recognized in the annual consolidated financial statements at December 31, 2012, might result in modifications to previously reported information, including certain transition adjustments. Note 3 to the unaudited condensed consolidated financial statements discloses the impact of the transition to IFRS on the company’s balance sheet ~~for the~~as ~~year~~of ~~ended December~~January 311, 2011, ~~for January~~ 1December 31, 2011, and ~~for the six months ended June~~September 30, 2011, as well as the company’s statements of income for the year ended December 31, 2011, for the ~~six~~nine months ended ~~June~~September 30, 2011 and the three months ended ~~June~~September 30, 2011.

IFRS requires that financial information starting from January 1, 2008 be presented in nominal Mexican Pesos (“Pesos” or “Ps.”), unless otherwise noted for the convenience of the reader. Please note that some figures in this Form 6-K may not sum due to rounding.

In this report, unless the context otherwise requires, the terms “we,” “us,” “our,” “our company” and “ourselves” mean Alestra and its subsidiary, Servicios Alestra.

Cautionary Statement on Forward-Looking Statements

This report includes ~~or incorporates~~ forward-looking statements, which include statements with respect to our plans, strategies, beliefs and other statements that are not historical facts. These statements are based on our management’s assumptions and beliefs in light of the information currently available to them. These assumptions and beliefs include information concerning us as well as the Mexican economy and telecommunications industry.

The assumptions also involve risks and uncertainties which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Potential risks and uncertainties include, without limitation:

• general economic conditions in the United Mexican States (“Mexico”) and the United States, and any significant economic or political developments in those countries;

• the competitive nature of providing information technology (“IT”), data, internet, and local and long distance services;

• ~~changes in~~ our ~~regulatory~~ability ~~environment,~~to ~~particularly~~attract ~~changes~~new ~~in the regulation of the telecommunications industry~~customers;

•

changes in our regulatory environment, particularly changes in the regulation of the telecommunications industry and changes in laws regulating foreign investment in the telecommunications industry in Mexico;

•

challenges to the validity of our concessions or changes in legal interpretations that result in the revocation or non-extension of concessions;

•

the risks associated with our ability to implement our strategy;

•

customer turnover;

•

changes in rates for long distance traffic and fixed-to-mobile and long-distance termination rates;

•

technological innovations;

•

our need for substantial capital;

•

interest rate levels;

•

performance of financial markets and our ability to refinance our financial obligations when they become due;

•

our ability to service our debt;

•

limitations on our access to sources of financing on competitive terms;

•

currency exchange rates, including the Peso/U.S. dollar exchange rate;

•

changes in our costs of doing business, including but not limited to costs associated with billing and collection, marketing and sales, and personnel training and travel expenses; and

•

changes in the policies of central banks and/or foreign governments.

Accordingly, readers are cautioned not to place undue reliance on these forward-looking statements. In any event, these statements are applicable only as of the date of this Form 6-K, and we undertake no obligation to update or revise any of them, whether as a result of new information, future events or otherwise. See Item 1. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Item 1. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis should be read in conjunction with the unaudited condensed consolidated financial statements as of ~~June~~September 30, 2012 and for the ~~six-~~nine month-period ~~periods~~ ended ~~June~~September 30, 2012 and 2011 and the notes thereto contained elsewhere herein.

~~Six~~Nine-month period ended ~~June~~September 30, 2012 compared to the ~~six~~nine-month period ended ~~June~~September 30, 2011

Revenues

Total revenue during the ~~six~~nine-month period ended ~~June~~September 30, 2012 was Ps. 23,~~328~~489.20 million, a 10.16%, or Ps. 2522.53 million, decrease ~~increase~~ from the Ps. 23,~~302~~511.63 million for the same period in 2011. This ~~increase~~decrease was the result of a 221.8%, or Ps. 6145.37 million, ~~increase~~decrease in ~~our~~other ~~Enterprise~~ segment services revenues., Wepartially ~~have been developing new revenue alternatives to~~ offset ~~the~~by ~~impact~~an ofincrease noin ~~longer~~our ~~selling~~enterprise ~~AT&T’s~~segment revenues. ~~AGN~~Our ~~services~~enterprise insegment ~~Mexico,~~revenues ~~after~~represented ~~the~~95.3% ~~termination~~ of our ~~AGN~~total ~~Agreement~~revenues ~~with~~in ~~AT&T~~the onnine-month ~~October~~period ended September 130, ~~2011, which at one time represented 20% of our total revenue stream~~2012.

Enterprise Segment. Revenues increased 20.87%, or Ps. 6123.3 million, to Ps. 23,~~218~~325.72 million in the ~~six~~nine-month period ended ~~June~~September 30, 2012, from Ps. 23,~~157~~301.49 million ~~for~~in the same period in 2011., ~~This increase was~~ primarily due to an increase in ~~our IT-related services revenues driven by an increase in~~ demand of for our ~~clients~~IT, ~~for~~data, ~~our~~Internet ~~new~~and local services.

Other Segments. Revenue ~~Revenues~~derived from our other segments decreased 2421.68%, or Ps. 3545.87 million, to Ps. ~~109~~ 163.57 million in the ~~six~~nine-month period ended ~~June~~September 30, 2012, from Ps. ~~145~~209.34 million ~~for~~in the same period in 2011. This decrease was primarily due to a decrease in our international incoming long distance ~~traffic as a result of our strategy of limiting unprofitable traffic~~revenues.

During the ~~six~~nine-month period ended ~~June~~September 30, 2012, IT, data, internet and local service revenues reached Ps. 12,~~882~~840.12 million, a 31.57%, or Ps. 6347.86 million, increase from Ps. 12,~~818~~792.36 million for the same period in 2011. The increase in IT, data, internet and local services revenues was primarily due to an increase in revenues from IT-related services mainly as a result of VPN, ~~Ethernet~~collaboration, data center and ~~collaboration~~cloud services revenues as well as sales of data servers and other equipment. Our IT, data, internet and local services represented 8081.84% of our total revenues during ~~the six~~nine-month period ended ~~June~~September 30, 2012, compared to 79.05% during the same period in 2011.

Revenues from our long distance services for the ~~six~~nine-month period ended ~~June~~September 30, 2012 decreased 7.9.7%, or Ps. 3869.39 million, to Ps. ~~446~~648.18 million from Ps. ~~484~~718.37 million for the same period in 2011. The decrease in long distance revenues was primarily due to a decrease in revenue per minute, partially offset by higher volume of traffic. As a percentage of total revenues, long distance services revenues represented 1918.26% of our total revenues during the ~~six~~nine-month period ended ~~June~~September 30, 2012, compared to 2120.05% during the same period in 2011.

Cost of services (excluding depreciation, amortization and other expenses related to cost of services)

Cost of services consists primarily of:

•

fees for leased lines, typically paid on a per-circuit per-month basis primarily to Teléfonos de México S.A.B. de C.V. (“Telmex”) and other last mile access providers;

•

interconnection costs including local access charges and resale expenses, paid on a per-minute basis primarily to Telmex; and

•

international settlement payments to foreign carriers on a per-minute basis for the completion of international calls originated in Mexico by us.

Cost of services decreased 2521.38%, or Ps. ~~180~~237.68 million, to Ps. ~~533~~852.25 million for the ~~six~~nine-month period ended ~~June~~September 30, 2012 from Ps. ~~713~~1,090.83 million for the same period in 2011. The decrease in cost of services was primarily the result of a ~~one-time~~reversal ~~cancellation~~in February 2012 of the provision offor fixed-to-mobile interconnection rates, since aswe ofreached ~~February~~a favorable agreement with Radiomóvil Dipsa, S.A. de C.V. (“Telcel”) regarding the applicable interconnection rates for traffic terminating in Telcel’s mobile network under the “calling party pays” ~~2012~~system, ~~since~~which are lower than the rates we ~~reached~~had aprovisioned for the year 2011 and January 2012.

~~favorable~~Enterprise ~~agreement~~Segment. ~~with~~Costs ~~Telcel~~of ~~regarding~~services ~~the~~decreased ~~applicable~~19.3%, ~~interconnection~~or ~~rates~~Ps. ~~for~~194.8 million, ~~traffic~~to Ps. ~~terminating~~815.3 million in ~~Telcel’s~~the ~~mobile~~nine-month ~~network~~period ~~under~~ended ~~the~~September 30, ~~“calling~~2012 ~~party~~from ~~pays”~~Ps. ~~system~~1,010.1 million ~~which~~for ~~are lower than~~ the ~~rates~~same ~~from~~period ~~prior~~in ~~periods~~2011. The ~~new~~decrease ~~rates~~was ~~are~~primarily ~~applicable~~due to the reversal in February 2012 of the provision for ~~2011~~fixed-to-mobile interconnection rates as noted above, ~~2012~~partially offset by higher IT-related services costs due to a growth in the volume of these services, ~~2013~~as ~~and~~a ~~2014~~result of an increase in demand from our customers.

~~Enterprise Segment~~Other Segments. ~~Costs~~Cost of services decreased 2253.56%, or Ps. ~~147~~43.60 million, to Ps. ~~508~~37.12 million, infor the ~~six~~nine-month period ended ~~June~~September 30, 2012 from Ps. ~~655~~80.72 million for the same period in 2011. This decrease ~~was~~in ~~primarily~~cost ~~due~~of toservices ~~the one-time~~from ~~cancellation~~other ofsegments ~~the~~was ~~provision~~primarily ofdue ~~fixed-~~to~~-mobile~~ lower interconnection rates ~~mentioned~~as ~~above, partially offset by higher IT related services costs due to~~ a ~~growth~~result ~~in volume~~ of ~~these~~the ~~services,~~agreement ~~driven~~reached bywith anTelcel ~~increase in demand of our clients for our~~discussed ~~new services~~above.

~~Other Segments.~~ Cost of IT, data, internet and local services decreased 568.98%, or Ps. 3361.1 million, to Ps. 25633.14 million~~, for~~ for the ~~six~~nine-month period ended ~~June~~September 30, 2012 from Ps. 58694.15 million for the same period in 2011. This decrease ~~in cost of services from other segments~~ was primarily due to ~~lower~~a ~~interconnection~~decrease ~~rates~~in local service costs as a result of the agreement ~~reached~~ with Telcel, ~~discussed~~partially ~~above~~offset by higher costs in IT related services and the cost of equipment sold.

Cost of ~~IT,~~long ~~data,~~distance ~~internet and local~~ services decreased 844.36%, or Ps. 37 176.46 million, to Ps. ~~412~~ 219.31 million for the ~~six~~nine-month period ended ~~June~~September 30, 2012, from Ps. ~~449~~395.7 million for the same period in 2011. This ~~was primarily due to a~~ decrease in ~~local~~cost ~~service~~of ~~costs~~long asdistance aservices ~~result~~was ofprimarily ~~the~~due ~~agreement~~to ~~with~~the ~~Telcel,~~reversal ~~partially offset with~~in ~~higher~~February ~~costs~~2012 inof ITthe ~~related~~provision ~~services~~of ~~and~~fixed-to-mobile ~~the~~interconnection ~~cost~~rates ofmentioned ~~equipment sold~~above.

~~Cost~~Gross ofprofit ~~long~~before ~~distance services decreased 54.2%~~depreciation, ~~or Ps.~~ ~~143.3 million,~~amortization toand ~~Ps.120.9 million~~other ~~for~~expenses ~~the~~related ~~six-month~~to ~~period ended June 30, 2012, from Ps. 264.2 million for the same period in 2011. This decrease in~~ cost of ~~long distance~~ services ~~was primarily due to the one-time cancellation of the provision of fixed-to-mobile interconnection rates mentioned above.~~

Gross profit before depreciation, amortization and other expenses related to cost of services is a non-IFRS financial measure. Gross profit before depreciation, amortization and other expenses related to cost of services is not a recognized measure under IFRS, does not have a standardized meaning prescribed by IFRS and is therefore unlikely to be comparable to similar measures presented by other companies. Rather, gross profit before depreciation, amortization and other expenses related to cost of services is provided as additional information to complement IFRS measures by providing further understanding of our results of operations from management’s perspective. Accordingly, it should not be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS.

~~Gross~~We believe that gross profit isbefore ~~defined~~depreciation, asamortization ~~revenues~~and ~~minus~~other expenses related to cost of services ~~(excluding~~can ~~depreciation~~be useful in facilitating comparisons of operating performance between periods and ~~amortization)~~with other companies. ~~Gross~~However, our computation of gross profit is anot ~~non-IFRS~~necessarily ~~financial measure.~~comparable ~~Gross~~to gross profit isas ~~not~~reported aby ~~recognized~~other ~~measure~~companies because ~~under~~it ~~IFRS~~excludes depreciation, ~~does~~amortization ~~not~~and ~~have~~other aexpenses ~~standardized~~related ~~meaning~~to ~~prescribed~~cost byof ~~IFRS~~services. Though gross profit before depreciation, amortization and isother ~~therefore~~expenses ~~unlikely~~related to becost ~~comparable~~of toservices ~~similar~~is ~~measures~~a ~~presented~~relevant bymeasure ~~other~~of ~~companies.~~operating ~~Rather~~performance, ~~gross~~it should ~~profit~~not isbe ~~provided~~considered as ~~additional~~ ~~information~~an alternative to ~~complement~~operating ~~IFRS~~income ~~measures~~(determined byin ~~providing~~accordance ~~further~~with ~~understanding~~IFRS, as an indication of our ~~results~~financial ofperformance), ~~operations~~or ~~from~~an ~~management’s~~indication ~~perspective.~~of ~~Accordingly,~~resources itgenerated ~~should~~from ~~not~~operating beactivities ~~considered~~(determined in ~~isolation~~accordance ~~nor~~with IFRS, as a ~~substitute~~measure ~~for~~of ~~analysis~~our liquidity), nor is it indicative of ~~our financial~~funds ~~information~~available ~~reported~~to ~~under~~meet ~~IFRS~~our cash needs.

WeGross ~~believe that gross~~ profit ~~can be useful in facilitating comparisons of~~before ~~operating~~depreciation, ~~performance~~amortization ~~between periods~~ and ~~with~~ other ~~companies.~~expenses ~~However,~~related ~~our~~to ~~computation~~cost of ~~gross~~services ~~profit~~increased is8.9%, ~~not~~or ~~necessarily~~Ps. ~~comparable~~215.5 million, to ~~gross~~Ps. ~~profit~~2,636.5 million asfor ~~reported~~the bynine-month ~~other~~period ~~companies~~ended ~~because~~September 30, it2012 ~~excludes~~from ~~depreciation~~Ps. ~~and amortization expenses~~2,421.0 million ~~Though gross~~for ~~profit~~same isperiod ain 2011. ~~relevant~~Our ~~measure~~gross ofprofit ~~operating~~before ~~performance~~depreciation, itamortization ~~should~~and ~~not~~other beexpenses ~~considered~~related ~~as an alternative~~ to ~~operating~~cost ~~income~~of ~~(determined~~services inincreased ~~accordance~~primarily ~~with~~due ~~IFRS,~~to as an ~~indication~~increase ofin our ~~financial~~IT-related ~~performance)~~services revenues, ortogether anwith ~~indication~~the ofreversal ~~resources generated from operating activities (determined~~ in ~~accordance~~February ~~with~~2012 ~~IFRS, as a measure~~ of ~~our~~the ~~liquidity),~~provision ~~nor~~for fixed-to-mobile isinterconnection itrates ~~indicative~~charged ofby ~~funds~~Telcel, ~~available~~as todiscussed ~~meet our cash needs~~above.

~~Gross~~Enterprise Segment. Our enterprise segment gross profit increased 139.05%, or Ps. ~~206~~218.21 million, to Ps. 12,~~795~~509.09 million ~~for~~in the ~~six~~nine-month period ended ~~June~~September 30, 2012 from Ps. 12,~~588~~291.8 million for the ~~six-month~~same period ~~ended June 30,~~in 2011. ~~Our~~This ~~gross~~increase ~~profit~~was ~~increased~~ primarily due to ~~the~~ an increase in our IT,-related ~~data,~~services ~~internet~~revenues and ~~local~~a ~~revenues~~decrease ~~profit~~in ~~coupled~~our ~~with~~interconnection costs due to the ~~cancellation~~reversal in February 2012 of the provision offor fixed-to-mobile interconnection rates charged by Telcel, as discussed above.

~~Enterprise~~Other ~~Segment~~Segments. Our other segments gross profit ~~increased~~decreased 132.90%, or Ps. ~~208~~2.96 million, to Ps. ~~1,710~~126.6 million in the ~~six~~ nine-month period ended ~~June~~September 30, 2012 from Ps. ~~1,501~~129.72 million for the same period in 2011. This ~~increase~~decrease ~~in gross profit~~ was primarily due to ~~the~~a ~~growth~~decrease ofin ~~our~~long ~~IT,~~distance ~~data, internet and local service revenues coupled with lower interconnection costs due to the cancellation of the provision of fixed-to-mobile interconnection~~ rates.

~~Other~~Our ~~Segments.~~IT, ~~Our~~data, internet and local services gross profit ~~decreased~~ 3increased 5.12%, or Ps. 2108.7 million, to Ps. 842,206.48 million infor the ~~six~~nine-month period ended ~~June~~September 30, 2012 from Ps. 87 2,098.1 million for the same period in 2011. This ~~decrease~~increase was primarily due to athe ~~decrease~~increase in ~~long~~IT-related ~~distance~~services revenues coupled with lower local costs due to the reversal in February 2012 of the provision of fixed-to-mobile interconnection rates, as discussed above.

Our IT, data, internet and local services gross profit increased 7.4%, or Ps. 101.2 million, to Ps. 1,469.8 million for the six-month period ended June 30, 2012 from Ps. 1,368.6 million for the same period in 2011. This increase was primarily due to the increase in IT data, internet and local services revenues coupled with lower local costs due to the cancellation of the provision of fixed-to-mobile interconnection rates.

Our long distance gross profit increased 4733.70%, or Ps. ~~105~~106.06 million, to Ps. ~~325~~429.26 million for the ~~six~~nine-month period ended ~~June~~September 30, 2012, from Ps. ~~220~~323.20 million for the same period in 2011. This increase was primarily due to the decrease in long distance costs coupled with the ~~one-time~~reversal ~~cancellation~~in ofFebruary ~~the~~2012 of the provision of fixed-to-mobile interconnection rates, ~~previously~~as ~~explained~~discussed above.

Our gross margin, defined as gross profit before depreciation, amortization and other expenses related to cost of services as a percentage of total revenues, was 7775.16% for the ~~six~~nine-month period ended ~~June~~September 30, 2012 as compared to 6968.09% for the same period in 2011.

A reconciliation of our operating income to gross profit before depreciation, amortization and other expenses related to cost of services is provided below asfor ofthe ~~June~~nine-month periods ended September 30, ~~2012~~2011 and ~~2011~~2012:

	Six-month period ended June 30,
	Nine-month period endedSeptember 30,
	(in millions of nominal Pesos)
	2011			2012
Gross Profit		1,588.8			1,795.0
Gross profit before depreciation, amortization and other expenses related to cost of services	Ps.	2,421.0		Ps.	2,636.5
Administration, selling and other operating expenses		(~~812~~676.14	)		(~~839~~720.40	)
Depreciation and amortization		(417.7	)		(421.4	)
Depreciation, amortization and other expenses related to cost of services		(1,176.6	)		(1,160.4	)
Other Expense, Net		(11.5	)		(6.4	)
Other expense, net		(22.2	)		(14.7	)
Operating income	Ps.	~~347~~545.49		Ps.	~~527~~741.75

Administration, selling and other operating expenses

Administration, selling and other operating expenses increased 36.4%, or Ps. 2743.36 million, to Ps. ~~839~~720.40 million for the ~~six~~ nine-month period ended ~~June~~September 30, 2012 from Ps. ~~812~~676.14 million for the same period in 2011, primarily as a result of higher personnel expenses. For the ~~six~~nine-month periods ended ~~June~~September 30, 2012 and 2011, administration, selling and other operating expenses represented 3620.16% and 3519.3% of total revenues, respectively.

Depreciation, amortization and other ~~amortization~~expenses related to cost of services

Depreciation, amortization and ~~amortization~~other expenses related to cost of services amounted to Ps. ~~421~~1,160.4 million for the ~~six~~nine-month period ended ~~June~~September 30, 2012, compared to Ps. ~~417~~ 1,176.76 million for the same period in 2011, primarily due to the elimination of other costs related to AGN services that were no longer provided in the nine-month period ended September 30, 2012, partially offset by an increase in additional assets being placed into service in 2012.

Operating income

Operating income increased 5135.98%, or Ps. ~~180~~ 195.36 million, to Ps. ~~527~~741.75 million in the ~~six~~nine-month period ended ~~June~~September 30, 2012, from Ps. ~~347~~545.~~4million~~9 million for the ~~six-month~~same period ~~ended~~in ~~June 30,~~ 2011. This increase was primarily due to ~~the~~an ~~extraordinary~~increase ~~benefit~~ in ~~costs~~our IT-related services revenues, together with the one-time benefit as a result of the ~~cancellation~~reversal ofin ~~the~~February ~~provision~~2012 of the fixed-to-mobile interconnection rates provision, as discussed above.

~~Comprehensive~~Finance ~~financial~~ result

During the ~~six~~nine-month period ended ~~June~~September 30, 2012, our comprehensive financial loss was Ps. ~~102~~18.91 million, compared to a Ps. 42470.5 million loss for the same period in 2011. The following table sets forth our comprehensive financial results for the nine-month periods ~~under~~ended ~~review~~September 30, 2011 and 2012:

	Six-month period ended June 30,
	Nine-month period endedSeptember 30,
	(in millions of nominal Pesos)
	2011			2012
Interest expense		(165.8	)		(173.7	)
Finance cost	Ps.	(261.4	)	Ps	(260.8	)
Interest income		3.2			10.1
Finance income		5.8			16.7
Exchange gain (loss), net		~~124~~(215.50	)		60226.30
Effect of derivative financial instruments		(4.5	)		0.5
Finance result, net	Ps.	(470.5	)	Ps.	(18.1	)
Comprehensive financial result, net		(42.5	)		(102.9	)

Our interest expense increased by Ps. 8.0 million, to Ps. 173.7 million for the six-month period ended June 30, 2012 from Ps. 165.8 million for the same period in 2011. This increase was a result of a higher Peso to U.S. dollar average exchange rate during the six-month period ended June 30, 2012, since our total debt is U.S. dollar-denominated, and our average total debt in the six-month period ended June 30, 2012 was lower than in the same period of 2011.

~~Interest~~Our ~~income~~finance ~~amounted~~cost decreased 0.2%, or Ps. 0.6 million, to Ps. 10260.18 million ~~for~~in the ~~six~~ nine-month period ended ~~June~~ September 30, 2012, ~~compared~~from to Ps. 3261.24 million for the same period in 2011,. asThis decrease was a result of ~~high~~lower ~~cash~~average ~~balance~~debt during the ~~six~~nine-month period ended ~~June~~ September 30, 2012, partially offset by a higher Mexican Peso to U.S. Dollar average exchange rate during the period as 100% of our total debt is U.S. dollar-denominated.

~~Exchange~~Finance income ~~gain~~increased ~~for the six-month period ended June 30~~187.9%, ~~2012~~or ~~was~~ Ps. 6010.39 million, ~~compared~~ to ~~an exchange gain of~~ Ps. ~~124~~16.57 million for the ~~same~~nine-month period inended ~~2011.~~September 30, We2012 ~~record~~from aPs. ~~foreign exchange gain or loss with respect to U~~5.S.8 million ~~dollar-denominated~~for ~~net monetary position of assets and liabilities when~~ the ~~Peso~~same ~~appreciates~~period ~~or depreciates~~ in ~~relation to the U~~2011.S. ~~dollar.~~This ~~Our~~increase ~~U.S.~~was ~~dollar-denominated~~primarily ~~monetary liabilities exceeded our U.S. dollar-denominated monetary assets during~~ the ~~six-month~~result ~~periods~~of ~~ended~~higher ~~June 30,~~average ~~2012~~cash balance ~~and 2011. We recorded a foreign exchange gain~~ during the ~~six~~nine-month period ended ~~June~~September 30, 2012, aswhen acompared ~~result~~to ~~of a 2.3% appreciation of~~ the ~~Peso against the U.S. dollar, while during the~~ same period in 2011~~, the Peso appreciated 4~~.2% ~~against the U.S. dollar.~~

InExchange ~~October~~gain for ~~2010~~the nine-month period ended September 30, ~~we entered~~2012 ~~into~~was aPs. ~~currency~~226.0 million ~~hedge~~compared to ~~minimize~~an ~~the~~exchange ~~effects~~loss of ~~the~~Ps. ~~Peso~~215.0 million tofor ~~U.S.~~the ~~dollar~~same ~~exchange~~period ~~rate~~in ~~fluctuation~~2011. We ~~sought~~record toa ~~hedge~~foreign ~~the~~exchange ~~interest~~gain ~~payment~~or ofloss ~~our~~with ~~senior~~respect ~~notes~~to U.S. Dollar-denominated ~~due~~net ~~2014~~monetary ~~through~~position ~~two~~of ~~foreign~~assets ~~exchange~~and ~~forward~~liabilities ~~contracts.~~when ~~Each~~the ofMexican ~~these~~Peso ~~forward contracts~~appreciates ~~was~~or depreciates in anrelation ~~amount~~to ofthe U.S.$ 11Dollar.~~75 million~~ atOur ~~an exchange rate of Ps. 12.463 per~~ U.S.~~$1.00~~ Dollar-denominated ~~and~~monetary ~~Ps.~~liabilities ~~12.611 per~~exceeded our U.S.~~$1.00 in February~~ ~~2011~~Dollar-denominated ~~and~~monetary ~~August~~assets ~~2011,~~during ~~respectively. The effect of~~ the ~~forward~~nine-month ~~contract~~periods ~~that~~ended ~~matured~~September 30, ~~in February~~ 2011 ~~was negative,~~ and ~~amounted to Ps~~2012. ~~5.0~~We ~~million.~~recorded Ina ~~addition,~~foreign weexchange ~~have~~gain aduring ~~U.S.~~the ~~dollar~~nine-~~denominated~~month ~~lease~~period ~~contract~~ended inSeptember 30, ~~which~~2012 ~~the~~as ~~dollar~~a ~~currency~~result ~~embedded~~of ina ~~the~~8.1% ~~host~~appreciation ~~lease~~of the ~~contract~~Mexican isPeso ~~considered~~against anthe ~~embedded~~U.S. Dollar ~~derivative~~while ~~for~~during ~~accounting purposes. For~~ the ~~six~~nine-month ~~periods~~period ended ~~June~~September 30, ~~2012, and~~ 2011, ~~the~~we ~~effect~~recorded ofa ~~this~~foreign ~~embedded~~exchange ~~derivative~~loss ~~was~~as ~~positive~~a ~~and~~result ~~amounted~~of ~~to Ps~~8.6% ~~0.5 million~~depreciation inof ~~both~~the ~~comparable~~Mexican ~~periods.~~Peso ~~This~~against ~~contract~~the isU.S. ~~evaluated on a monthly basis~~Dollar.

Income Tax and IETU

We and our subsidiary, Servicios Alestra, S.A. de C.V. (“Servicios Alestra”) are required to pay the greater of the income tax or the flat tax (Impuesto Empresarial a Tasa Única, or “IETU”), which are computed separately for each entity. We participate in the tax consolidation of Alfa, our holding company. For the six-month period ended June 30, 2012, we recorded an income tax provision using an income tax effective rate of 23.2%, compared to an income tax effective rate of 22.7% for the six-month period ended June 30, 2011.

~~For~~We recorded an income tax expense of Ps. 196.1 million in the ~~six~~nine-month period ended ~~June~~September 30, 2012, ~~our~~compared to an income tax isexpense ~~higher~~of ~~than~~Ps. ~~our~~12.5 million ~~IETU~~for the same period in 2011. Our effective income tax; ~~accordingly~~rate for the nine-month period ended September 30, we2012 ~~have~~was ~~not~~27.1% ~~recognized~~compared ~~any~~to ~~IETU~~16.7% infor ~~our~~the ~~consolidated~~same ~~income~~period ~~statements~~in 2011.

For the nine-month period ended September 30, 2012, our income tax was higher than our IETU tax and, as a result, we have not recognized any IETU in our consolidated income statement as for the nine months ended September 30, 2012. In accordance with the interpretations published by the Mexican Board of Research and Development of Financial Reporting Standards (“CINIF”) on December 21, 2007, with respect to the ~~accounting~~ accounting effects of the IETU, and based on financial and tax projections, we have determined that we will continue to pay regular income tax in the foreseeable future. As a result, we did not record any deferred IETU taxes as of ~~June~~September 30, 2012.

Net Income

~~During~~As ~~the~~a ~~six-month~~result ~~period~~of ~~ended~~the ~~June 30,~~factors ~~2012~~discussed above, weour ~~recorded a~~ net income ofincreased Ps. ~~326~~464.15 million ~~compared~~ to ~~a net income of~~ Ps. ~~236~~527.72 million ~~during~~for the ~~same~~nine-month period inended ~~2011, an increase of Ps. 89.5~~September ~~million~~30, or2012 ~~37.8%.~~from ~~The increase in net income was primarily explained by an increase of~~ Ps. ~~180~~62.37 million ~~in operating income when compared to~~ for the same period ofin 2011 ~~partially offset by a decrease of Ps~~. ~~64.2 million in our exchange gain as previously explained.~~

Liquidity and Capital Resources

Current Liquidity

AsOur ofunrestricted ~~June 30,~~cash ~~2012, December 31,~~balance ~~2011, June 30,~~consists ~~2011~~of cash and temporary ~~January 1,~~investments ~~2011,~~with weoriginal ~~had~~maturities ~~Ps. 752.1 million, Ps. 488.1 million, Ps. 417.7 million and Ps. 486.2 million~~ of ~~unrestricted~~three ~~cash~~months ~~available,~~or ~~respectively~~less. Our unrestricted cash balance increased by Ps. ~~264~~13.03 million, to Ps. ~~752~~501.14 million as of ~~June~~September 30, 2012 from Ps. 488.1 million as of December 31, 2011. This increase was primarily asdue ato ~~result of~~ cash flow generated after meeting all of our ~~expenses~~expense obligations including capital expenditures, working capital, ~~and~~ debt service and dividend payments.

Our ~~unrestricted~~treasury policy is to invest in highly liquid temporary cash ~~balance~~investments ~~consists~~issued by the U.S. and Mexican governments, major U.S. and Mexican banks and corporations with high credit ratings. As of September 30, 2012, we had cash of Ps. 24.6 million and temporary investments ~~with~~of ~~original~~Ps.476.8 ~~maturities~~million, of ~~three~~which ~~months~~Ps. or347.9 million ~~less~~were in Mexican Peso-denominated instruments and Ps. 153.5 million were in U.S. Dollar-denominated instruments. We believe our cash and cash equivalents balance is sufficient to meet our current needs.

~~Our treasury policy is to invest in highly liquid temporary cash investments issued by the U.S. and Mexican governments, major U.S. and Mexican banks, and corporations with high credit ratings.~~ As of ~~June~~ September 30, 2012, December 31, ~~we had cash of Ps. 34.0~~2011, ~~million~~September 30, 2011 and ~~temporary~~January ~~investments~~2011 ofour ~~Ps.~~ratio ~~718.1 million,~~ of ~~which~~current ~~Ps.~~assets ~~697.7 million~~to ~~were~~current inliabilities ~~Peso-denominated~~was ~~instruments and Ps~~1.82 ~~54.4 million~~times, ~~in U~~1.S.22 ~~dollar-denominated~~times, ~~instruments~~1.27 ~~In our~~times ~~opinion, our cash~~ and ~~cash equivalents balance is sufficient for our present requirements~~1.03 respectively.

As of June 30, 2012, December 31, 2011, June 30, 2011 and January 1, 2011, our ratio of current assets to current liabilities was 1.71x, 1.22x, 1.01x and 0.73x, respectively. Our ratio of current assets to current liabilities as of June 30, 2012 includes the corresponding amortization of our vendor facilities.

As of
September 30,
2012

As of
December 31,
2011

As of
September 30,
2011

As of
January 1,
2011

(in millions of nominal Pesos, excluding ratios)

Unrestricted cash balance

Ps.

501.4

Ps.

488.1

Ps.

417.7

Ps.

486.2

Current ratios (times)

1.82x

1.22x

1.27x

1.03x

As ofJune 30,2012

As ofDecember 31,2011

As ofJune 30,2011

As ofJanuary 1,2011

(in millions of nominal Pesos, excluding ratios)

Unrestricted cash balance

Ps.

752.1

Ps.

488.1

Ps.

417.7

Ps.

486.2

Current ratios (times)

1.71x

1.22x

1.01x

0.73x

On September 8, 2009, a trust was created by us, Telmex and BBVA Bancomer, as a trustee, to guarantee the payment of interconnection services rates. As of September 30, 2012, the trust balance was Ps. 420.4 million, recorded as restricted cash and included as non-current assets in our balance sheet.

OnCapital expenditures during the nine-month period ended September 830, ~~2009~~2012 amounted to Ps. 552.3 million, acompared ~~trust~~to ~~was~~Ps. 515.2 million ~~created~~in bythe ~~us,~~same ~~Telmex~~period ~~and~~in ~~BBVA~~2011. ~~Bancomer~~Our ascapital aexpenditure ~~trustee~~program includes investments to ~~guarantee the~~expand ~~payment~~our ofnetwork, ~~interconnection~~provide new services. Asto ~~of June 30~~customers, ~~2012,~~increase ~~the~~data ~~trust~~center ~~balance~~capacity ~~was~~and ~~U.S.~~also ~~$416.5 million,~~includes ~~registered~~last asmile ~~restricted~~and ~~cash~~direct ~~included~~access asto ~~non-current~~connect customers ~~assets~~to in our ~~balance sheet~~network.

Capital expenditures during the six-month period ended June 30, 2012 amounted to Ps. 299.3 million, compared to Ps. 292.5 million invested in the same period in 2011. Our capital expenditure program includes investments to expand our network, provide new services to customers and increase data center capacity, and also includes last mile and direct access to connect customers to our network. As of the date of this report, our capital expenditure program is proceeding according to schedule.

Indebtedness

As of ~~June~~September 30, 2012, and December 31, ~~2011, June 30,~~ 2011 ~~and January 1~~, ~~2011,~~ our total debt amounted to ~~U.S.~~ US$~~214~~200.1 0 million, ~~U.S.~~and US$216.0 million, Urespectively.S. ~~$217.9~~As of September ~~million~~30, ~~and~~2012, Uour only outstanding debt was our 11.S.75% senior notes due 2014 in an amount of US$~~242~~200.60 million,. ~~respectively~~These notes pay interest semiannually in cash in arrears on February 11 and August 11. ~~Total~~The ~~debt~~principal asamortization ofis ~~June~~payable at maturity on August 3011, ~~2012 includes:~~2014.

•On ~~11.750%~~December 23, ~~senior~~2011, ~~unsecured~~we ~~notes~~signed ~~due~~a ~~2014~~committed inrevolving anfacility ~~amount~~agreement ofwith ~~U.S.~~Comerica Bank for US$~~200~~20.0 million;. The facility bears interest at a three-month adjusted LIBOR rate plus 3.00%. The revolving facility is unused and matures on June 30, 2014.

•On June 5, 2012, we signed a ~~bank~~revolving ~~facility~~credit line with Banco Nacional de Comercio Exterior S.N.C. (“Bancomext”) in an amount of UPs.S 450.0 million (US$1035.0 million;) ~~and~~which matures on June 5, 2016. This facility is currently unused.

•Pending ~~vendor~~Litigation ~~facilities in an aggregate amount of U.S. $4.1 million.~~

We are involved in a dispute with Telmex regarding interconnection services rates applicable for 2008, 2009, 2010 and 2011 and requested the intervention of the Mexican Federal Telecommunications Commission (Comisión Federal de Telecomunicaciones, or “Cofetel”) regarding the interconnection rates applicable for 2012. As of ~~June~~September 30, 2012, wethe ~~had~~total provision ~~outstanding~~related Uto the litigation is Ps.S. ~~$200~~692.0 7 million. ~~aggregate~~Since ~~principal~~April ~~amount~~2012, the basis for the provision relating to resale interconnection rates has changed based on the analysis of our ~~11.750%~~management ~~senior~~and ~~notes~~their ~~due~~judgment ~~2014,~~given the latest reliable ~~which~~information ~~pay~~available ~~interest~~and ~~semiannually~~market conditions as well as our company’s experience in ~~cash~~this area. We continue negotiations with Telmex, but we cannot assure you that we will reach an agreement in ~~arrears~~the near future. We believe that reaching an agreement with Telmex would not have a material adverse effect on ~~February 11~~our business, financial condition or results of operations. We are also in disputes with mobile companies associated with Grupo Telefónica regarding mobile interconnection services rates for 2011 and ~~August 11,~~could ~~beginning~~request onthe ~~February 11~~intervention of Cofetel regarding the interconnection rates with Iusacell S.A. de C.V. (“Iusacell”) and Grupo Telefonica applicable for 2012. As of the date of this report, ~~2010~~management continues its negotiations with both carriers. ~~The~~Although ~~principal~~the ~~amortization~~outcome of the aforementioned proceedings is ~~payable~~uncertain, atwe ~~maturity~~have recognized provisions for such contingencies in accordance with IFRS and we do not believe that a decision adverse to Alestra would have a material adverse effect on ~~August 11~~its business, ~~2014~~financial condition or results of operations.

On December 23, 2011, we signed a committed revolving facility and a term loan agreement with Comerica Bank for U.S. $20.0 million and U.S. $10 million, respectively. The committed revolving facility and the term loan bear interest at a three-month adjusted LIBOR rate plus 3.00%, payable on a quarterly basis. The term loan principal is payable in four equal installments in September 2013, December 2013, March 2014 and June 2014. The revolving facility is unused and matures on June 2014.

As of June 30, 2012, we had a vendor facility with an outstanding balance of U.S. $2.1 million with Cisco Systems Capital Corporation (“Cisco”), which pays principal and interest on a monthly basis. This loan matures on July 6, 2013.

As of June 30, 2012, we had a vendor facility with an outstanding balance of U.S. $1.4 million with Hewlett-Packard Operations México S. de R.L. de C.V. (“HP”), which pays principal and interest on a monthly basis. This loan matures on February 28, 2014.

As of June 30, 2012, we had a vendor facility with Huawei Technologies de México, S.A de C.V with an outstanding balance of U.S. $0.6 million, which pays principal and interest on a quarterly basis and matures in December 2012.

The senior notes and Comerica Bank credit facility contain customary covenants with which, as of June 30, 2012, we are in full compliance.

Relevant Events

Dissolution of Alestra Telecomunicaciones Inalámbricas

Following a resolution by our board of directors at a meeting held on April 2, 2012, on June 1, 2012, our subsidiary Alestra Telecomunicaciones Inalámbricas, S. de R.L. de C.V. (“Alestra Telecomunicaciones”) was dissolved. The decision to dissolve Alestra Telecomunicaciones was based on the fact that Alestra Telecomunicaciones was a holding company with no operations or assets, and it was not generating any income. The dissolution of Alestra Telecomunicaciones has not affected our operations, nor do we believe that it will have a material adverse effect on our business, financial condition or results of operation.

Pending Litigation

We are involved in a dispute with Telmex regarding interconnection services rates applicable for 2008, 2009, 2010 and 2011 and requested the intervention of Cofetel regarding the interconnection rates applicable for 2012. As of June 30, 2012, the total provision related to the litigation is Ps. 607.4 million. Since April 2012, the basis for the provision relating to resale interconnection rates has changed prospectively based on the analysis of our management and their judgment given the latest reliable information available and market conditions as well as the Company’s experience in this area. We continue negotiations with Telmex, but we cannot assure you that we will reach an agreement in the near future. We believe that reaching an agreement with Telmex would not have a material adverse effect on our business, financial condition or results of operation. We are also in disputes with mobile companies associated with Telefónica regarding mobile interconnection services rates for 2011 and requested the intervention of Cofetel regarding the interconnection rates with Telefónica and Iusacell applicable for 2012. As of the date of this report, management continues its negotiations with both carriers. Although the outcome of the aforementioned proceedings is uncertain, we have recognized provisions for such contingencies in accordance with IFRS and we do not believe that a decision adverse to Alestra would have a material adverse effect on its business, financial condition or results of operation.

Credit Line

On June 5, 2012, we signed a revolving credit line with Banco Nacional de Comercio Exterior, S.N.C (Bancomext) in an amount of Ps. 450 million (approximately U.S.$35 million) that matures on June 5, 2016. The facility is currently unused.

Subsequent Events

~~Dividends~~On October 10, 2012, we resolved an interconnection rate dispute with Iusacell with respect to 2011 interconnection rates. This will result in a reduction in the cost of services during the fourth quarter of 2012 due to the reversal of a provision we had created in connection with the interconnection rate dispute.

On August 29, 2012, we paid a U.S. $8 million dividend, which was declared by our shareholders in a general ordinary meeting held on August 15, 2012.

UNAUDITED CONDENSED CONSOLIDATED ~~FINANCIAL~~BALANCE ~~STATEMENTS~~ SHEETS

INDEX TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

As of ~~June~~September 30, 2012 and for the ~~six~~nine months ended ~~June~~September 30, 2011 and 2012

Unaudited Condensed Consolidated Balance Sheets as of January 1, 2011, December 31, 2011 and June 30, 2012			F-2
Unaudited Condensed Consolidated Balance Sheets as of January 1, 2011, December 31, 2011 and September 30, 2012			F-2
Unaudited Condensed Consolidated Statements of Income for the Six-Months Ended June 30, 2011 and 2012 and the three months ended June 30, 2011 and 2012			F-3
Unaudited Condensed Consolidated Statements of Income for the Nine-Months Ended September 20, 2011 and 2012 and the three months ended September 30, 2011 and 2012			F-3
Unaudited Condensed Consolidated Statements of Comprehensive Income for the Six-Months Ended June 30, 2011 and 2012 and the three months ended June 30, 2011 and 2012			F-4
Unaudited Condensed Consolidated Statements of Comprehensive Income for the Nine-Months Ended September 20, 2011 and 2012 and the three months ended September 30, 2011 and 2012			F-4
Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Six-Months Ended June 30, 2011 and 2012			F-5
Unaudited Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Nine-Months Ended September 20, 2011 and 2012			F-5
Unaudited Condensed Consolidated Statements of Cash Flow for the Six Months Ended June 30, 2011 and 2012			F-6
Unaudited Consolidated Statements of Cash Flow for the Nine Months Ended September 30, 2011 and 2012			F-6
Notes to Unaudited Condensed Consolidated Financial Statements			F-7

F-1

ALESTRA, S. DE R. L. DE C. V. AND SUBSIDIARIES

Subsidiaries of Alfa S. A. B. de C. V.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts are expressed in thousands of adjusted nominal Mexican Pesos)

	January 1st,2011			December 31,2011			~~UnauditedJune~~UnauditedSeptember 30, 2012
Assets
CURRENT ASSETS:
Cash and cash equivalents	Ps	486,224		Ps	488,091		Ps	~~752~~501,~~092~~440
Trade receivables, net of allowance for doubtful accounts of Ps 39,350 in January 1, 2011, Ps 49,580 in December 31, 2011 and Ps 34,543 in June 30, 2012		493,030			513, 219			543,273
Trade receivables, net		493,030			513, 219			558,466
Due from affiliates and other related parties		7,974			8,225			128,~~537~~696
Other receivables		~~105~~104,~~495~~924			110,059			~~122~~127,~~989~~926
Prepaid expenses		41,213			91,876			~~147~~139,~~226~~144
Other current assets		2728,~~825~~396			40,165			4037,~~599~~506
Total current assets		1,161,761			1,251,635			1,~~618~~373,~~716~~178
NON CURRENT ASSETS:
Restricted cash		378,207			408,698			~~416~~420,~~527~~446
Property and equipment, net (Note 4)		5,245,089			4,816,301			4,~~719~~751,~~091~~454
Deferred charges and other assets, net		243,248			273,454			~~261~~255,~~309~~230
Deferred income tax (Note 8)		153,861			397,156			397,314
Deferred income tax		180,903			424,198			366,348
Prepaid expenses		—			58,934			3929,~~289~~467
Total non current assets		6,~~020~~047,~~405~~447			5,~~954~~981,~~543~~585			5,~~833~~822,~~530~~945
Total assets	Ps	7,~~182~~209,~~166~~208		Ps	7,~~206~~233,~~178~~220		Ps	7,~~452~~196,~~246~~123
Liabilities and stockholders’ equity
CURRENT LIABILITIES:
Accounts payable to Teléfonos de México, S.A.B de C.V. and other carriers	Ps	41,751		Ps	29,569		Ps	53,676
Accounts payable	Ps	307,567		Ps	217,654		Ps	155,276
Other suppliers		265,816			188,085			153,730
Current debt (Note 5)		335,799			187,537			39,721
Bank loans, notes payable and capital leases (Note 5)		216,957			54,064			45,814
Due to affiliates and other related parties		9,790			1,352			3,295
Due to affiliates and other related parties		9,790			1,352			5,719
Dividends payable		123,571			—			—
Interest payable		118,842			133,473			126,510
Other accounts payable and accrued expenses		354,670			623,240			555,157
Other accounts payable and accrued expenses		354,670			623,240			560,941
Total current liabilities		1,131,397			1,029,783			753,449
Total current liabilities		1,586,292			1,029,783			946,390
LONG-TERM LIABILITIES:
11.750% Senior notes due 2014 net of debt issuance cost of Ps 49,210 in January 1, 2011, Ps 42,694 in December 31, 2011 and Ps 29,079 in June 30, 2012 (Note 6)		2,422,210			2,753,046			2,701,521
Non current debt (Note 5)		2,732,147			2,922,637			2,544,697
Bank loans and notes payable (Note 5)		309,937			169,591			143,820
Provisions		454,895			577,876			779,657
Provision related to Teléfonos de México S.A.B de C.V. litigation		454,895			577,876			654,802
Employee benefits (Note 6)		80,240			75,604			69,128
Employee benefits (Note 7)		80,240			75,604			79,279
Total liabilities		4,398,679			4,605,900			4,146,931
Total liabilities		4,398,679			4,605,900			4,525,812
STOCKHOLDERS’ EQUITY:
Contributed stock		1,181,346			1,181,346			1,181,346
Retained earnings		1,~~602~~629,~~182~~225			1,~~418~~445,~~941~~983			1,~~745~~867,~~084~~842
Total shareholders’ equity of Alestra		2,~~783~~810,~~529~~571			2,~~600~~627,~~287~~329			23,~~926~~049,~~430~~188
Non controlling interest		(42	)		(9	)		4
Total stockholders’ equity		2,~~783~~810,~~487~~529			2,~~600~~627,~~278~~320			23,~~926~~049,~~434~~192
CONTINGENCIES AND COMMITMENTS (Note 10)
Total liabilities and stockholders’ equity	Ps	7,209,208		Ps	7,233,220		Ps	7,196,123
Total liabilities and stockholders’ equity	Ps	7,182,166		Ps	7,206,178		Ps	7,452,246

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

F-2

ALESTRA, S. DE R. L. DE C. V. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Amounts are expressed in thousands of adjusted nominal Mexican Pesos)

	Three months endedJune 30						Six months endedJune 30,
	Three months endedSeptember 30,						Nine months endedSeptember 30,
	2011			2012			2011			2012
REVENUES:
Revenues (Note 8)	Ps	1,208,659		Ps	1,160,791		Ps	3,511,292		Ps	3,488,955
Enterprise	Ps	1,076,541		Ps	1,104,473		Ps	2,157,372		Ps	2,218,665
Cost of services		(376,425	)		(319,293	)		(1,090,272	)		(852,495	)
Other Segments		64,986			55,056			145,261			109,499
Gross profit before depreciation, amortization and other expenses related to cost of services		832,234			841,498			2,421,020			2,636,460
		1,141,527			1,159,529			2,302,633			2,328,164
Depreciation, amortization and other expenses related to cost of services		(391,647	)		(378,093	)		(1,176,562	)		(1,160,365	)
OPERATING EXPENSES :
Gross profit		440,587			463,405			1,244,458			1,476,095
Cost of services (excluding depreciation and amortization):
Administrative, selling and other operating expenses		(231,423	)		(241,411	)		(676,382	)		(719,957	)
Enterprise		(319,854	)		(320,453	)		(655,705	)		(508,114	)
Other expense, net		(10,739	)		(8,246	)		(22,208	)		(14,662	)
Other Segments		(21,889	)		(12,553	)		(58,142	)		(25,088	)
Operating Income		198,425			213,748			545,868			741,476
		(341,743	)		(333,006	)		(713,847	)		(533,202	)
Finance income		2,596			6,238			5,827			16,749
Gross profit		799,784			826,523			1,588,786			1,794,962
Finance cost		(91,121	)		(87,049	)		(261,362	)		(260,795	)
Administration, selling and other operating expenses		(412,706	)		(409,956	)		(812,127	)		(839,386	)
Exchange gain (loss)		(339,454	)		165,674			(214,972	)		225,975
Depreciation and amortization		(205,923	)		(212,335	)		(417,747	)		(421,432	)
Finance result, net		(427,979	)		84,863			(470,507	)		(18,071	)
OTHER EXPENSE, NET		(4,365	)		(5,456	)		(11,469	)		(6,416	)
Share of loss of associate accounted for using the equity method		—			—			(59	)		(78	)
Operating Income		176,790			198,776			347,443			527,728
Profit (loss) before income tax		(229,554	)		298,611			75,302			723,327
COMPREHENSIVE FINANCIAL RESULT:
Income tax benefit (expense) (Note 7)		55,627			(97,532	)		(12,553	)		(196,105	)
Interest expense		(84,212	)		(96,222	)		(165,768	)		(173,746	)
Consolidated net (loss) income for the period	Ps	(173,927	)	Ps	201,079		Ps	62,749		Ps	527,222
Interest income		1,949			5,995			3,231			10,057
Attributable to:
Exchange gain (loss)		37,284			(168,515	)		124,482			60,301
Owners of the parent		(173,927	)		201,079			62,749			527,222
Gain (loss) on derivative financial instruments		242			204			(4,473	)		454
Non-controlling interest	Ps	—		Ps	—		Ps	—		Ps	—
		(44,737	)		(258,538	)		(42,528	)		(102,934	)
Equity and earnings (losses) on affiliates		(60	)		1			(59	)		(78	)
Gain before the following provisions for income tax		131,993			(59,761	)		304,856			424,716
Deferred income tax		8,957			50,249			10,923			158
Consolidated Income tax		(35,562	)		(26,281	)		(79,103	)		(98,731	)
Consolidated net income (loss)	Ps	105,388		(Ps	35,793	)	Ps	236,676		Ps	326,143
Net income attributable to:
Non controlling interest		—			—			—			—
Owners of Alestra	Ps	105,388		(Ps	35,793	)	Ps	236,676		Ps	326,143

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

F-3

ALESTRA, S. DE R. L. DE C. V. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Amounts are expressed in thousands of adjusted nominal Mexican Pesos)

	Three month ended						Six months ended
	Three months ended						Nine months ended
	June 30,						June 30,
	September 30,						September 30,
	2011			2012			2011			2012
Consolidated net income		105,388			(35,793	)		236,676			326,143
Profit for the period	Ps	(173,927	)	Ps	201,079		Ps	62,749		Ps	527,222
OTHER COMPREHENSIVE INCOME
Other comprehensive income:
Items that will not be reclassified to profit or loss:
Cash flow hedges		3,138			—			580			—
Gain on dissolution of subsidiary					13						13
Other comprehensive income for the period, net of tax		3,138						580			—
Other		(3,893	)		—			—			—
Total comprehensive income (loss) for the period	Ps	(170,789	)	Ps	201,079		Ps	63,329		Ps	527,222
Effect of derivative Financial Instruments net of tax		(2,455	)		—			(6,437	)		—
Attributable to:
Items that may be reclassified subsecuently to profit or loss		—			—			—			—
Owners of the parent		(170,789	)		201,079			63,329			527,222
Other Comprehensive income for the year, net of tax		(6,348	)		—			(6,437	)		—
Non-controlling interest		—			—			—			—
TOTAL COMPREHENSIVE INCOME FOR THE YEAR:		99,040			(35,780	)		230,239			326,156
Total comprehensive income (loss) for the period	Ps	(170,789	)	Ps	201,079		Ps	63,329		Ps	527,222
Total comprehensive income attributable to:
Non controlling interest		—			13			—			13
Owners of the parent Alestra		99,040			(35,793	)		230,239			326,143

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

F-4

ALESTRA, S. DE R. L. DE C. V. AND SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(Amounts are expressed in thousands of adjusted nominal Mexican Pesos)

						Accumulated (deficit) income
	Common stock		Retainedearnings			Totalattributable toowners			Non-controllinginterest			Total Equity
	Capital stock					AccumulatedInflation effectson Capital Stock			Effects ofderivativefinancialinstruments			Retainedearnings			Stockholderequity ofAlestra			Non controllinginterest			TotalStockholders’Equity
Balance at January 1, 2011	Ps	1,181,346	Ps	1,629,225		Ps	2,810,571		Ps	(42	)	Ps	2,810,529
	Fixed		Variable
Transactions with shareholders:
Balance at January 1, 2011	Ps	300	Ps	1,181,046		Ps			Ps	(829	)	Ps	1,603,012		Ps	2,783,529		Ps	(42	)	Ps	2,783,487
Dividends declared				(105,460	)		(105,460	)					(105,460	)
Changes in 2011:
Movements in non-controlling interest
Net income		—		62,749			62,749			—			~~236~~62,~~676~~749			~~236,676~~						~~236,676~~
Effect of derivate financial instruments										(6,437	)		—			(6,437	)					(6,437	)
Other comprehensive income for the period				580			580						580
Comprehensive income		—		—			—			(6,437	)		236,676			230,239			—			230,239
Total comprehensive income for the period				63,329			63,329						63,329
Balance at June, 30, 2011	Ps	300	Ps	1,181,046		Ps	—		Ps	(7,266	)	Ps	1,839,688		Ps	3,013,768		Ps	(42	)	Ps	3,013,726
Balance at September 30, 2011	Ps	1,181,346	Ps	1,587,094		Ps	2,768,440		Ps	(42	)	Ps	2,768,398
Balance at January 1, 2012	Ps	~~300~~1,181,346	Ps	1,~~181~~445,~~046~~983		Ps	—2,627,329		Ps	—(9	)	Ps	12,~~418~~627,~~941~~320			~~2,600,287~~			(9	)		~~2,600,278~~
Changes in 2012:
Transactions with shareholders:
Net income													326,143			326,143						326,143
Dividends declared				(105,363	)		(105,363	)					(105,363	)
Gain on dissolution of subsidiary																			13			13
Movements in non-controlling interest										13			13
Comprehensive income													326,143			326,143			13			326,156
Net income		—		527,222			527,222						527,222
Balance at June 30, 2012	Ps	300	Ps	1,181,046		Ps	—		Ps	—		Ps	1,745,084		Ps	2,926,430		Ps	4		Ps	2,926,434
Other comprehensive income for the period				—			—						—
Total comprehensive income				527,222			527,222						527,222
Balance at September 30, 2012	Ps	1,181,346	Ps	1,867,842		Ps	3,049,188		Ps	4		Ps	3,049,192

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

F-5

ALESTRA, S. DE R. L. DE C. V. AND ~~SUBSIDIARY~~SUBSIDIARIES

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW

(Amounts are expressed in thousands of adjusted nominal Mexican Pesos)

	Six monthsended June 30,
	Nine months endedSeptember 30,
	2011			2012
Operation activities:
Cash flows from operating activities:
Income before income tax		Ps 304,856			424,716
Profit before income tax	Ps	75,302		Ps	723,327
Items relating to investing activities:
Depreciation and amortization		619,061			625,080
Depreciation and amortization		417,747			421,432
Write off of property plant and equipment		22,208			14,662
Cost related to seniority premiums and pension plans		3,449			3,779
Provision for impairment of trade receivables		7,237			9,150
Interest income		(3,232	)		(10,057	)
Share of loss of associate		59			78
Derivative financial instruments		4,473			—
Cost related to employees benefits		5,037			5,505
Gain on sale of fixed assets		3,003			(72	)
Finance income		(5,827	)		(16,224	)
Items relating to financing activities:
Finance cost		254,215			260,795
Interest expense		165,768			173,746
Exchange loss (gain)		214,972			(225,975	)
Exchange (loss)		(124,482	)		(60,301	)
Derivative financial instruments		7,147			(525	)
Disposal of fixed assets		11,469			6,416
Profit on the sale of fixed assets		(905	)		(70	)
Other, net		74,~~298~~492			~~(276~~—	)
Subtotal		~~790~~1,~~349~~202,998			~~959~~1,~~383~~395,803
Decrease in accounts receivable and other current assets		(52,941	)		(56,859	)
Decrease in trade and other receivables		(329,431	)		(134,969	)
Increase in suppliers, accounts payable and other current liabilities		70,935			(2,128	)
Increase in suppliers, accounts payable		192,518			33,643
Income tax paid		(106,822	)		(146,182	)
Decrease in other working capital accounts		(7,799	)		—
Operating activities net cash flows		701,521			754,214
Income tax paid		(166,225	)		(125,388	)
Investing activities:
Net cash generated from operating activities		892,061			1,169,089
Interests received		3,658			9,971
Cash flows from investing activities:
Acquisition of property and equipment		(264,226	)		(287,736	)
Interests received		6,235			16,184
Disposal (acquisition) of deferred charges and other assets		(19,371	)		(11,051	)
Acquisitions of property and equipment		(220,401	)		(509,838	)
Investing activities		(279,939	)		(288,816	)
Acquisitions of intangible assets and other assets, net		(43,968	)		(35,348	)
Excess in cash to be applied in financing activities net cash flows		421,582			465,398
Net cash used in investing activities		(258,134	)		(529,002	)
Financing activities:
Excess in cash to be applied in financing activities net cash flows		633,927			640,087
Interests paid		(159,906	)		(155,609	)
Cash flows from financing activities:
Payments relating to settlements of derivative financial instruments		(4,979	)		—
Interests paid		(303,013	)		(314,610	)
Payment of debt and bank loans		(293,478	)		(25,474	)
Payments of debt and bank loans		(305,098	)		(208,323	)
Financing activities net cash flows		(458,363	)		(181,083	)
Dividends paid		(221,517	)		(105,363	)
Net cash increasing (decreasing) cash and cash equivalents		(36,781	)		284,315
Net cash flows used in financing activities		(829,628	)		(628,296	)
Adjustments to cash flow as a result of changes in exchange rates		(9,201	)		(12,485	)
Net cash (decreasing) increasing cash and cash equivalents		(195,701	)		11,791
Cash, cash equivalents and restricted cash at beginning of year		864,431			896,789
Adjustments to cash flow as a result of changes in exchange rates		1,106			1,558
Cash and cash equivalents and restricted cash at year end		Ps 818,449			Ps1,168,619
Cash and cash equivalents at beginning of period		486,224			488,091
Restricted cash at year end		400,797			416,527
Cash and cash equivalents at period end	Ps	291,629		Ps	501,440
Cash and cash equivalents		417,652			752,092

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

F-6

ALESTRA, S. DE R. L. DE C. V. AND SUBSIDIARIES

Subsidiaries of Alfa S. A. B. de C. V.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amounts are expressed in thousands of adjusted nominal Mexican Pesos)

Note 1. ~~INCORPORATION~~- ~~AND~~Incorporation ~~ACTIVITY~~and OFactivity ~~THE~~of ~~COMPANY~~the Company

Alestra, S. de R. L. de C. V. (“Alestra”), is a Mexican company with limited liability and variable capital, incorporated on October 13, 1995, as a joint venture between Alfa, S. A. B. de C.V. (“Alfa”) (51%) and AT&T Telecom México, Inc. (“AT&T”) (49%).

On July 12, 2011, Alfa terminated the Equity Purchase Agreement entered into by and between AT&T, AT&T Telecom Mexico Inc. (“AT&T México”), Alfa, S.A.B. de C.V. (“Alfa”) and the Company ~~dated April 14~~, ~~2011~~ and completed the acquisition of AT&T México’s 49% equity interest in the Company after receiving approval from regulatory authorities in Mexico. The Equity Purchase Agreement did not impact the Company’s financial statements given that the 49% equity interest in the Company was acquired directly by Alfa.

Alestra and its subsidiary ~~subsidiaries~~ Servicios Alestra, S. A. de C. V. (“Servicios Alestra”) and Alestra Telecomunicaciones Inalámbricas, S. de R. L. de C. V. (“ATI”) are collectively referred to as the “Company.” On June 1st, 2012, ATI was dissolved. Such dissolution does not affect in any manner the operation. The decision was taken mainly because this company was not operational hence, not generating any income for the Company.

The Company’s ~~does~~business ~~not~~consists ~~have~~of ~~any~~the ~~direct~~installation ~~employees~~ and ~~all~~operation ~~services~~of ~~required~~a ~~are~~public ~~provided~~telecommunications bynetwork ~~Servicios~~in Mexico, offering mainly internet, data, ~~Alestra~~IT, and local and long distance telephone services.

~~The~~Note ~~Company’s~~2 ~~business~~- ~~consists~~Significant ofevents ~~the installation and operation of a public telecommunications network in Mexico, offering mainly internet, data, TI, and local and long distance telephone services.~~

OnAT&T ~~June 1st,~~Transactions 2012, Alestra Telecomunicaciones Inalámbricas, S. de R.L. de C.V. was dissolved. Such dissolution does not affect in any manner our operation. The decision was taken mainly because this company was not operational hence, not generating any income for us.

2On April 14, 2011, the Company entered into an equity purchase agreement with AT&T, AT&T Mexico and Alfa, pursuant to which Alfa agreed to acquire AT&T Mexico’s 49% equity interest in the company (the “Equity Purchase Agreement”). ~~PREPARATION~~On April 14, OF2011, ~~INTERIM~~the ~~FINANCIAL~~Company ~~STATEMENTS~~also entered into a nodes purchase agreement with AT&T, AT&T Global Network Services de Mexico S. de R.L. de C.V. (“AGNS Mexico”) and Alfa, pursuant to which AT&T Mexico agreed to purchase from the Company the telecommunications nodes and customer equipment (the “Nodes”) required for the provision of AT&T Global Services in Mexico (the “Nodes Purchase Agreement” and, together with the Equity Purchase Agreement, the “AT&T Transactions”).

~~Alestra~~On ~~and~~July 12, ~~its subsidiaries adopted IFRS~~2011, asAlfa ~~issued~~terminated by the ~~International~~joint ~~Accounting~~venture ~~Standards~~agreement ~~Board~~entered ~~(IASB)~~into onbetween ~~January 1~~AT&T México, ~~2012.~~Alfa Asand athe ~~result~~Company, ~~the~~as ~~unaudited~~amended ~~condensed~~on ~~consolidated~~November 30, ~~financial~~2005, ~~statements of~~ the ~~Company~~Equity ~~have~~Purchase ~~been~~Agreement, ~~prepared~~the inNodes ~~accordance~~Purchase ~~with~~Agreement, ~~IAS 34 – Interim Financial Reporting~~ and ~~IFRS 1~~completed –the ~~First~~acquisition ~~time~~of ~~adoption~~AT&T ofMéxico’s ~~IFRS~~49% asequity ~~promulgated~~interest byin the ~~International~~Company ~~Accounting~~after ~~Standards Board (“IASB”). The condensed~~receiving ~~consolidated~~approval ~~financial~~from ~~information~~regulatory ~~presented~~authorities ~~herein is not directly comparative with its consolidated financial information previously reported~~ in ~~accordance with Mexican FRS~~Mexico. InFollowing ~~note~~the 3closing ,of ~~Alestra~~these ~~includes information~~transactions, asAlfa ~~required~~is bynow ~~IFRS 1, First Time Adoption of IFRS, and details~~ the ~~effects~~sole ofshareholder ~~adoption, as well as applicable changes to its accounting policies as a result~~ of ~~adoption~~Alestra.

The Equity ~~unaudited~~Purchase ~~condensed~~Agreement ~~consolidated~~did not impact the Company’s financial statements ~~are~~given ~~expressed~~that inthe ~~Mexican~~49% ~~Pesos~~equity ~~(functional~~interest ~~and~~in ~~reporting~~the ~~currency)~~Company ~~denoted~~was byacquired ~~the~~directly ~~symbol~~by ~~“Ps~~Alfa.”.

The ~~information~~net ~~included~~effect inof the ~~condensed~~Nodes ~~consolidated~~Purchase ~~financial~~Agreement ~~statements~~was isa ~~unaudited~~gain ~~but reflects all adjustments (consisting only~~ of ~~normal recurring~~US$0.5 ~~adjustments),~~million ~~which~~resulting ~~are,~~from in the ~~opinion~~sale ofprice ~~management, necessary for a fair statement~~ of ~~the~~US$20.0 ~~results~~million ~~for~~less ~~the interim periods presented~~US$19.5 ~~The~~million ~~results~~carrying ~~of these interim periods are not necessarily indicative of results for the entire year~~value.

The unaudited condensed consolidated financial statements include those of Alestra and its subsidiaries, Servicios Alestra and ATI, of which Alestra holds 99% and 91% of their capital stock, respectively. All significant balances and transactions have been eliminated.

The accounting policies applied in these unaudited consolidated financial statements are based on IFRS issued and effective at August 30, 2012. Any subsequent change recognized in the annual financial statements at December 31, 2012 might result in a modification to the reported consolidated information, including the respective transition adjustments.

F-7

A)ALESTRA, ~~Revenue~~S. ~~recognition~~DE R. L. DE C. V. AND SUBSIDIARIES

~~Income~~Subsidiaries ~~from~~of ~~outgoing and~~Alfa ~~incoming~~S. ~~local~~A. ~~and~~B. ~~international~~de ~~long~~C. ~~distance services are recorded based on the traffic minutes processed by the Company and those processed by third parties, respectively~~V.

~~Revenues~~NOTES ~~derived~~TO ~~from~~UNAUDITED ~~data,~~CONDENSED ~~internet~~CONSOLIDATED ~~and~~FINANCIAL ~~local~~STATEMENTS ~~services are recognized when services are provided.~~

~~Revenues~~(Amounts ~~from installation and related costs~~ are expressed ~~deferred~~in ~~and~~thousands ~~recognized over the estimated life~~ of ~~the~~adjusted ~~customer~~nominal ~~relationship.~~Mexican Pesos)

B)Revenue ~~Cash~~from ~~and~~AT&T ~~cash~~Global ~~equivalents~~Services derived from the AGN Agreement for the year ended December 31, 2011 is summarized in the table below.

Cash and cash equivalents includes cash on hand, deposits held at call with banks and other short-term highly liquid investments with original maturities of three months or less. In the balance sheet, the bank overdrafts are presented as current liabilities.


	2011
	(Millions of Pesos)
Total Revenue		4,697.33

Revenue from AT&T Global Services		707.1
% of Total Revenue		15	%

CFurthermore, as a result of the consummation of the AT&T transactions, on July 12, 2011, the Company entered into an Equipment Lease Agreement with AGNS México pursuant to which the Company leased from AGNS México the Nodes required for the provision of AT&T Global Services in Mexico (the “Equipment Lease Agreement”) ~~Foreign~~until December 31, ~~currency~~2012. ~~translation~~This agreement was subject to early termination should AT&T Mexico acquire the necessary licenses and regulatory approvals to offer, directly and independently from the Company, AT&T Global Services with Mexico prior to December 31, 2012.

~~Transactions~~On October 1, 2011, AT&T and ~~balances~~Alestra agreed to an early termination of the Equipment Lease Agreement and the AT&T Global Network Cooperation Agreement (“the AGN Agreement”), the agreement which granted the Company the rights to use the “AT&T Global Services” brand name and to provide AT&T Global Services in Mexico. As of October 1, 2011, the Company ceased to provide AT&T Global Services in Mexico and ceased to use AT&T’s intellectual property, including the AT&T brand name. Until the date of termination of the AGN Agreement, Alestra paid AT&T a corporate fee based on a percentage of its revenues.

~~Foreign~~In ~~currency transactions~~addition, ~~are~~on ~~translated~~October 1, ~~into~~2011, the ~~functional~~Company ~~currency~~executed ~~using~~two ~~the~~commercial agreements ~~exchange~~with ~~rates~~AGNS ~~prevailing~~México atpursuant to which the ~~dates~~Company ofprovides ~~the~~AGNS ~~transactions~~México orcertain ~~valuation~~telecommunication ~~where~~services ~~items~~in ~~are~~order ~~remeasured.~~to ~~Foreign~~allow ~~exchange~~AGNS ~~gains~~México ~~and~~to ~~losses~~provide ~~resulting~~AT&T ~~from~~Global ~~the~~Services ~~settlement~~directly ofto ~~such~~their customers in Mexico. Under one ~~transactions~~of ~~and~~the ~~from~~agreements, the ~~translation~~Company atprovides ~~year-end~~wholesale ~~exchange~~telecommunication ~~rates~~services for a term of ~~monetary~~one ~~assets~~to ~~and~~three ~~liabilities~~years, ~~denominated~~depending inon ~~foreign~~the ~~currencies~~service, ~~are~~which ~~recognized~~can inbe renewed on a monthly basis thereafter. Under the ~~income~~other ~~statement~~agreement, ~~except~~the ~~when~~Company ~~deferred~~provides hosting and allocation services to AGNS México for its nodes in ~~other~~our ~~comprehensive~~facilities ~~income~~for asa ~~qualifying~~term ~~cash~~of ~~flow hedges~~15 years. Revenues from these commercial agreements have, and ~~qualifying~~are expected to continue to, partially offset the loss of revenues from AT&T Global Services, expecting to have a net ~~investment~~effect ~~hedges~~as described below.

D)The ~~Property~~impact of the termination of the AGN Agreement for the year ended December 31, 2011, ~~plant~~as shown in the table below, was Ps. 37.8 million in revenues and ~~equipment~~Ps. 39.7 million in gross profit. This represents the estimated revenues and gross profit the Company did not recognize from October 1, 2011 to December 31, 2011 in connection with the termination of the AGN Agreement, partially offset by the revenues and gross profit for the telecommunication services that the Company started providing to AGNS México in October 1, 2011.

The ~~items of~~following ~~property,~~table ~~plant~~outlines ~~and~~the ~~equipment~~estimated ~~will~~impact beof ~~carried~~the attermination ~~its~~of ~~historical~~the ~~cost~~AGN ~~less~~Agreement ~~any~~on ~~accumulated~~the ~~depreciation~~Company´s revenues and ~~any~~gross ~~accumulated~~profits ~~impairment~~for ~~losses.~~the period ~~The~~from ~~historical~~October 1 ~~cost includes expenses directly attributable~~ to ~~the~~December 31, ~~acquisition of the items~~2011.

The residual value and useful life of an asset should be reviewed at least annually at the end of the reporting period and, if expectations differ from previous estimates, the changes are accounted for as a change in an accounting estimate.

October 1 to December 31, 2011

AGN
Agreement

New Services
provided to
AGNSMexico

Net Impact

(in millions of Pesos)

Revenues

Ps.

245.0

Ps.

207.2

Ps.

37.8

Gross profit before depreciation and amortization and other expenses related to cost of services

205.45

165.7

39.7

Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to Alestra and the cost of the item can be measured reliably. The value of the replaced component is derecognized. Repairs and maintenance are recognized in the income statement during the financial period in which they are incurred. Major improvements are depreciated over the remaining useful life of the related asset. Depreciation is calculated using the straight line method.

Improvements to leased properties are depreciated in the term that is shorter between the term of the lease and the useful life.

Spare parts to be used in more than a year and attributable to specific machinery are classified as property, plant and equipment, in other fixed assets. These spare parts will begin depreciating when they are acquired.

F-8

~~If there is an existing contractual or statutory obligation derived from the purchase or construction of an asset~~ALESTRA, ~~due~~S. toDE ~~the~~R. ~~dismantling~~L. ~~and~~DE ~~removal~~C. ofV. ~~the~~AND ~~asset~~SUBSIDIARIES or the restoration of the asset site in accordance with certain minimum standards or both, at the end of the asset’s life, the costs for such dismantling and removal, as well as the site restoration costs are necessary expenses in order to access the economic benefits that are expected to flow from the asset and therefore should be capitalized as part of the cost of the asset with its corresponding provision since the date on which Alestra has the present obligation.

~~Assets~~Subsidiaries ~~classified as property, plant and equipment are subject to impairment tests when there are facts or circumstances indicating that the carrying value~~ of ~~the~~Alfa ~~assets~~S. ~~may~~A. ~~not be recoverable~~B. Ande ~~impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable value~~C. ~~The recoverable value is the higher of the fair value less required selling expenses and the value in use~~V.

E)NOTES ~~Intangible~~TO ~~assets~~UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~Trademarks~~(Amounts ~~and other intangible assets that have a finite useful life~~ are ~~carried at cost less accumulated amortization and recognized impairment losses.~~ ~~Amortization~~expressed isin ~~calculated~~thousands ~~using the straight-line method to allocate the cost~~ of ~~trademarks~~adjusted ~~and~~nominal ~~other~~Mexican ~~intangible~~Pesos) ~~assets over their estimated useful lives. Trademarks with indefinite useful life are carried at its cost less the recognized impairment losses.~~

~~Acquired~~Note ~~computer~~3 ~~software~~- ~~licenses~~Summary ~~are capitalized on the basis~~ of ~~the~~significant ~~costs~~accounting ~~incurred~~policies ~~to acquire and bring to use the specific software. These costs are amortized over their estimated useful lives.~~

~~Useful~~Following ~~life~~is ofa ansummary ~~asset~~of ~~should~~the bemost ~~reviewed~~significant ataccounting ~~least~~policies ~~annually~~followed atby the ~~end~~ ofCompany ~~the~~and ~~reporting~~its ~~period and~~subsidiary, ifwhich ~~expectations~~have ~~differ~~been ~~from~~applied ~~previous~~on ~~estimates,~~a consistent basis in the ~~changes~~preparation ~~are~~of ~~accounted~~their financial information for asthe aperiods ~~change~~presented, inunless ~~accounting~~otherwise ~~estimate.~~indicated:

FA) ~~Income~~Basis ~~tax~~of preparation

~~The~~These ~~tax~~condensed consolidated ~~expense~~financial ~~for~~statements ~~the~~as ~~period~~of ~~comprises~~January 1, ~~current and deferred tax. Taxes~~2011, ~~both~~ December 31, ~~from~~2011 ~~the current exercise~~ and ~~deferred~~September 30, ~~should~~2012, beand ~~recognized~~for in the ~~income~~nine ~~statement,~~month ~~and~~periods ~~included~~ended inSeptember 30, ~~determination~~2012 ofand ~~the~~2011 ~~net~~have ~~gain~~been orprepared ~~loss~~in ~~from~~accordance ~~the~~with ~~period,~~International Financial ~~except~~Reporting ifStandards ~~they~~(“IFRS”) ~~arise~~applicable ~~from~~to athe ~~transaction~~preparation ~~directly~~of ~~recognized~~interim infinancial ~~other comprehensive income~~statements, orincluding inIAS ~~equity.~~34 In“Interim ~~such~~financial ~~case~~reporting” ~~the~~and ~~corresponding~~IFRS ~~tax~~1 is“First ~~recognized~~time inadoption ~~other~~of ~~comprehensive income, or in equity, respectively~~IFRS”.

~~Management periodically~~The ~~evaluates~~Company ~~positions~~will ~~taken~~adopt IFRS for the first time in ~~tax~~its ~~returns~~consolidated ~~with~~financial ~~respect~~statements tofor ~~situations~~the inyear ended December 31, 2012, which ~~applicable~~will ~~tax~~include comparative ~~regulation~~consolidated isfinancial ~~subject~~statements tofor ~~interpretation~~the year ended December 31, 2011. ItIFRS ~~establishes~~1 ~~provisions~~requires ~~where~~that ~~appropriate~~an entity develop accounting policies based on the ~~basis~~standards and related interpretations effective at the reporting date of ~~amounts~~its ~~expected~~first annual IFRS financial statements (December 31, 2012). IFRS 1 also requires that those policies be applied as of the date of transition to IFRS (January 1, 2011), and throughout all periods presented in the first IFRS financial statements. Management has stated that the unaudited condensed consolidated IFRS financial information has been prepared in accordance with those International Accounting Standards Board (“IASB”) standards and International Financial Reporting Interpretations Committee (“IFRIC”) interpretations issued and effective, or issued and early adopted at September 30, 2012. The IASB standards and IFRIC interpretations that will be ~~paid~~applicable at December 31, 2012, including those that will be applicable on an optional basis, were not known with certainty at the time of preparation of the unaudited condensed consolidated IFRS financial information. As a result, the accounting policies used to prepare the ~~tax~~unaudited condensed consolidated ~~authorities~~IFRS financial information are subject to change up to the reporting date of the Company’s first IFRS financial statements.

The ~~current~~Company changed ~~tax~~its isaccounting ~~the~~policies ~~estimated~~from Mexican Financial Reporting Standards (MFRS) to becomply ~~paid~~with orIFRS ~~recovered~~as of January 1, 2012. The transition from MFRS to IFRS has been registered in ~~the~~accordance ~~exercise~~with IFRS 1, ~~using~~setting January 1, 2011 as the transition ~~tax~~date. ~~(and~~The ~~legal)~~reconciliation ~~rates~~of ~~approved~~the oreffects of the transition from MFRS to ~~be approved~~IFRS atis disclosed in Note 10 on the ~~balance~~condensed ~~sheet~~consolidated ~~reporting~~financial ~~date~~statements.

~~Deferred~~The ~~income~~condensed ~~tax~~consolidated isfinancial ~~recognized,~~statements ~~using~~have ~~the~~been ~~liability~~prepared ~~method,~~ on ~~temporary~~a ~~differences~~historical ~~arising between~~cost basis, except for the ~~tax~~exemptions ~~basis~~applied offor ~~assets~~the ~~and~~Company ~~liabilities~~disclosed ~~and~~in ~~their~~Note ~~carrying~~10. ~~amounts~~The inaccounts ~~the~~have ~~consolidated~~been ~~financial~~prepared ~~statements~~on a going concern basis.

~~Deferred~~These ~~income~~condensed ~~tax assets~~consolidated ~~are~~financial ~~recognized~~statements ~~only~~were toapproved ~~the~~by ~~extent that is probable that future taxable profit will be available against which~~ the ~~temporary~~Company’s ~~differences~~management ~~can~~on ~~be utilized~~November 2nd, 2012.

The condensed consolidated financial information presented herein is not directly comparative with its condensed consolidated financial information previously reported in accordance with MFRS.

The unaudited condensed consolidated financial statements are expressed in thousands of Mexican Pesos (functional and presentation currency) denoted by the symbol “Ps.”.

F-9

G)ALESTRA, ~~Employee~~S. ~~benefits~~DE R. L. DE C. V. AND SUBSIDIARIES

a)Subsidiaries ~~Pension~~of ~~obligations~~Alfa S. A. B. de C. V.

~~Defined~~NOTES ~~contribution~~TO ~~plan:~~ UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

A(Amounts defined contribution plan is a pension plan under which Alestra pays fixed contributions into a separate entity. Alestra has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods. The contributions are ~~recognized as employee benefit~~ ~~expense~~expressed ~~when they are due. Prepaid contributions are recognized as an asset to the extent that a cash refund or a reduction~~ in ~~the~~thousands ~~future~~of ~~payments~~adjusted isnominal ~~available.~~Mexican Pesos)

~~Defined~~The ~~benefit~~information ~~plan:~~included in the condensed consolidated financial statements is unaudited but reflects all adjustments (consisting only of normal recurring adjustments), which are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. The results of these interim periods are not necessarily indicative of results for the entire year.

AThe ~~defined~~unaudited ~~benefit~~condensed ~~plan~~consolidated isfinancial ~~defined~~statements asinclude anthose ~~amount~~ of ~~pension~~Alestra ~~benefits~~and ~~that an~~its ~~employee~~subsidiary, ~~will~~Servicios ~~receive~~Alestra, onof ~~retirement,~~which ~~usually~~Alestra ~~dependent~~holds on99% ~~one~~of ortheir ~~more~~capital ~~factors~~stock. ~~such~~All assignificant ~~age,~~balances ~~years~~and oftransactions ~~service~~have ~~and~~been ~~compensation~~eliminated.

The ~~liability recognized~~preparation ~~in the balance sheet in respect~~ of ~~defined benefit pension plans is~~ the ~~present~~condensed ~~value~~consolidated offinancial ~~the~~statements ~~defined~~requires ~~benefit obligation at~~ the ~~balance~~use ~~sheet date less the fair value~~ of ~~plan~~certain ~~assets,~~critical ~~together~~accounting ~~with adjustments for unrecognized past-service costs~~estimates. ~~The~~It ~~defined~~also ~~benefit~~requires ~~obligation~~management isto ~~calculated~~exercise ~~annually~~its byjudgment ~~independent~~in ~~actuaries using~~ the ~~projected~~process ~~unit credit method. The present value~~ of ~~the defined benefit obligation is determined by discounting the estimated future cash outflows using~~ ~~interest~~applying ~~rates of high-quality corporate bonds that are denominated in~~ the ~~currency~~Company’s inaccounting ~~which the benefits will be paid, and that have terms to maturity approximating to the terms of the related pension liability~~policies.

~~Actuarial~~B) gains and losses that arise after December 31, 2010 in calculating Alestra’s obligation in respect of a plan, to the extent that any cumulative unrecognized actuarial gain or loss exceeds ten percent of the greater of the present value of the defined benefit obligation and the fair value of plan assets, that portion is recognized in the income statement over the expected average remaining working lives of the employees participating in the plan. Otherwise, the actuarial gains or losses will not be recognized in the income statement. Consolidation

Past-service costs are recognized immediately in income, unless the changes to the pension plan are conditional on the employees remaining in service for a specified period of time (the vesting period)i. In ~~this case, the past-service costs are amortized on a straight-line basis over the vesting period.~~ Subsidiaries

~~Financing~~Subsidiaries ~~costs~~are ofall entities ~~the~~over ~~defined~~which ~~benefit plan~~the ~~and~~Company has the ~~return~~power ofto govern the ~~plan~~financial ~~assets~~and ~~will~~operating bepolicies ~~recognized~~generally inaccompanying a shareholding of more than one half of the ~~income~~voting ~~statement~~rights. asWhen ~~part~~the interest of the ~~financial~~Company ~~expenses~~in ~~and~~a ~~financial~~subsidiary ~~income~~is less than 100%, ~~respectively~~the interest related to the external shareholders is reflected as non-controlling interest.

b)Subsidiaries ~~Other~~are ~~post-employment~~fully ~~obligations~~consolidated from the date on which control is transferred to the Company. They are deconsolidated from the date that control ceases.

~~When~~The ~~the~~ Company ~~provides~~applies ~~post-employment~~the ~~benefits~~acquisition method to ~~their~~account ~~employees,~~for ~~like~~business ~~medical~~combinations. ~~expenses,~~The ~~the~~consideration ~~entitlement~~transferred tofor ~~these~~the ~~benefits~~acquisition isof ~~usually~~a ~~conditional~~subsidiary onis the ~~employee~~fair ~~remaining~~value inof ~~service~~the upassets totransferred, ~~retirement~~the ~~age~~liabilities incurred and the ~~completion~~equity ofinterests aissued ~~minimum~~by ~~service~~the ~~period~~Company. The ~~expected~~consideration transferred ~~costs~~includes ofthe ~~these~~fair ~~benefits~~value ~~are~~of ~~accrued~~any ~~over~~asset ~~the~~or ~~period~~liability ofresulting ~~employment~~from ~~using~~a ~~the~~contingent ~~same~~consideration ~~accounting~~arrangement. ~~methodology~~Identifiable asassets ~~used~~acquired ~~for~~and ~~defined~~liabilities ~~benefit~~and ~~pension~~contingent ~~plans.~~liabilities ~~Actuarial~~assumed ~~gains~~in ~~and~~a ~~losses~~business ~~generated~~combination ~~after~~are ~~December 31,~~measured ~~2010~~initially ~~will~~at their befair ~~accounted~~values ~~using~~ at the ~~same~~acquisition ~~accounting~~date. ~~methodology~~The asCompany ~~the~~recognizes ~~defined~~any ~~benefit~~non ~~pension~~controlling ~~plans~~interest in the ~~period~~acquiree inon ~~which~~an ~~they~~acquisition- ~~arise.~~by-acquisition ~~All~~basis, ~~the~~either ~~costs~~at ~~for~~fair ~~past~~value ~~services~~or ~~are~~at ~~immediately~~the ~~recognized.~~non ~~These~~controlling ~~obligations~~interest’s ~~are~~proportionate ~~valued~~share ~~annually~~of bythe recognized ~~independent~~amounts ~~qualified~~of ~~actuaries~~acquiree’s identifiable net assets.

c)Inter-company ~~Indemnities~~transactions ~~for~~and ~~termination~~balances, ~~benefits~~and unrealized gains between companies are eliminated in the preparation of the consolidated financial statements. Unrealized losses are eliminated unless the transaction provides evidence of impairment in the asset transferred.

~~Termination~~Acquisition-related ~~benefits~~costs are ~~payable~~expensed ~~benefits~~as ~~when:~~incurred. ~~(1) employment~~Accounting ispolicies ~~terminated~~of bysubsidiary ~~the~~have ~~Company~~been ~~before~~changed ~~the~~where ~~normal~~necessary ~~retirement~~to ~~date;~~ensure orconsistency ~~(2) an~~with the ~~employee~~policies ~~accepts~~adopted ~~voluntary~~by ~~redundancy~~the ~~in exchange for these benefits~~Company.

~~The~~As ~~Company~~of ~~should~~September 30, ~~recognize~~2012, ~~termination~~Alestra’s ~~benefits as a liability and an expense~~ only ~~when~~subsidiary it is ~~committed~~Servicios ~~through~~Alestra with a ~~detailed~~participation ~~formal termination plan and there is no possibility~~ of ~~annulment~~ 99.99%.

ii.

Associates

Associates are all entities over which the Company has significant influence but not control, generally accompanying a shareholding of between 20% and 50% of the voting rights. Investments in associates are accounted for using the equity method of accounting and recognized initially at cost. The Company’s investment in associates includes goodwill identified on acquisition, net of any accrued impairment loss.

F-10

d)ALESTRA, ~~Short~~S. ~~term~~DE ~~benefits~~R. L. DE C. V. AND SUBSIDIARIES

~~Companies~~Subsidiaries ~~provide~~of ~~short term~~Alfa ~~employee~~S. ~~benefits,~~A. ~~which~~B. ~~may~~de ~~include wages, salaries, annual compensations, absence paid for sickness and bonuses payable in the next 12 months~~C. ~~The Company recognizes a provision without discounting when it is contractually obliged or where past practice has created an obligation~~V.

~~The~~NOTES ~~Company~~TO ~~recognizes~~UNAUDITED ~~the~~CONDENSED ~~expected~~CONSOLIDATED ~~cost~~FINANCIAL ofSTATEMENTS ~~employees’ profit-sharing and bonuses payment only when:~~

(1)Amounts ~~the~~are expressed ~~entity~~in isthousands ~~contractually~~of ~~obliged~~adjusted ornominal aMexican ~~constructive~~Pesos) ~~obligation derives from a past practice; and~~

~~(2)~~If the ownership interest in an ~~estimation~~associate is reduced but significant influence is retained, only a proportionate share of the ~~obligation~~amounts ~~can~~previously recognized in other comprehensive income is reclassified to profit or loss where appropriate. The Company’s share of post-acquisition profit or loss is recognized in the income statement, and its share of post acquisition movements in other comprehensive income is recognized in other comprehensive income. The accrued movements after the acquisition will be adjusted against the carrying value of the investment. When the Company’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Company does not recognize further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.

~~(3)~~The aCompany ~~present~~assess ~~obligation~~at ~~exists~~each ~~only~~reporting ~~when~~date whether there is any objective evidence that the ~~entity~~investment ~~has~~in nothe ~~choice~~associate ~~but~~is impaired. toIf ~~make~~this is the ~~payments~~case, the Company calculates the amount of impairment as the difference between the recoverable amount of the associate and its carrying value and recognizes it in ‘share of (loss)/profit of associates accounted for using the equity method’ in the income statement.

H)Unrealized ~~Financial~~gains ~~Assets~~on transactions between the Company and its associates are eliminated in function of the interest in them. Unrealized losses are eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been changed to ensure consistency with the policies adopted by the Company. When the Company ceases to have significant influence over an associate, any difference between the fair value and the retained interest is recognized in the income statement, including any consideration received for the disposal of part of the interest and the carrying amount of the investment.

~~The~~As ~~Company classifies~~of ~~its financial assets in the following categories: at fair value through profit or loss~~September 30, ~~loans and receivables~~2012, ~~held~~Alestra’s toonly ~~maturity~~associate ~~and~~is Conectividad ~~available~~Inalámbrica ~~for~~7 ~~sale~~GHz, ~~investments~~S. ~~The~~de ~~classification~~R. ~~depends~~L. onde ~~the purpose for which the financial assets were acquired~~C.V. ~~Management~~(Conectividad ~~determines the classification of its financial assets at initial recognition~~Inalámbrica).

~~Acquisitions~~C) ~~and~~Foreign ~~sales~~currency ~~of investments are recognized at the trading date, which is the date the Company commits to acquire or sale the asset.~~ translation

ai. ~~Financial~~Functional ~~assets~~and atpresentation ~~fair value through profit or loss~~currency

~~Financial~~Items ~~assets~~included atin ~~fair~~the ~~value through profit or loss are~~ financial ~~assets~~statements ~~held~~of ~~for~~each ~~trading.~~of Athe ~~financial~~Company’s ~~asset~~entities isare ~~classified~~measured inusing ~~this~~the ~~category~~currency ifof ~~it is acquired principally for~~ the ~~purpose~~primary ofeconomic ~~selling~~environment in which the ~~short-term.~~entity ~~Derivatives~~operates ~~are~~(‘the ~~also~~functional ~~categorized~~currency’). asThe ~~held~~consolidated ~~for~~financial ~~trading~~statements ~~unless they~~ are ~~designated~~presented asin ~~hedges.~~Mexican ~~Assets~~pesos, inwhich ~~this~~is ~~category~~the ~~are~~Company’s ~~classified~~presentation asand ~~current~~functional ~~assets~~currency.

~~Financial~~ii. ~~assets~~Transactions ~~carried at fair value through profit or loss, are initially recognized at fair value,~~ and ~~transaction costs are expensed in the income statement. Gains or losses arising from changes in the fair value of these assets are presented in income statement in the period in which they occurred.~~ balances

bForeign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are re-measured. ~~Loans~~Foreign exchange gains and ~~receivables~~losses resulting from the settlement of such transactions and from the translation at closing date exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in the income statement, except when deferred in other comprehensive income as qualifying cash flow hedges.

~~Loans~~D) Cash and ~~receivables are~~cash non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are included in current assets, except for maturities greater than 12 months after the balance sheet date. These are classified as non-current assets. equivalents

~~Loans~~Cash and ~~receivables~~cash equivalents ~~are~~includes ~~initially~~cash ~~measured~~on athand, ~~fair~~deposits ~~value~~held ofat ~~the~~call ~~consideration~~with tobanks ~~receive~~ and ~~subsequently~~other atshort-term ~~amortized cost~~highly ~~using~~liquid ~~the~~investments ~~effective~~with ~~interest~~original ~~rate~~maturities ~~method.~~of ~~When~~three ~~circumstances~~months ~~occur that indicate that the receivable amounts will not be collected for the amounts originally agreed~~ or ~~will be collected in a different period~~less, ~~loans~~all ~~and~~of ~~receivables~~these are ~~impaired, the~~subject ~~difference~~to ~~between~~an ~~book~~insignificant ~~value~~risk ~~and~~to ~~the~~changes ~~present value of new discounted flows must be accounted~~ in ~~the income statement~~value.

The loans disbursed and accounts receivable from customers are generally classified under “loans and receivables.”

c. Financial assets impairment

It is assessed at the end of each reporting period whether there is objective evidence that a financial asset or group of financial assets is impaired. The main financial assets subject to impairment resulting from non compliance of a contract by the counterparty are those assets recognized at amortized cost (accounts receivable) and the assessment is described in the following paragraph R) Trade receivables.

F-11

I)ALESTRA, ~~Financial~~S. ~~liabilities~~DE R. L. DE C. V. AND SUBSIDIARIES

~~Trade~~Subsidiaries ~~payables are~~of ~~recognized~~Alfa ~~initially~~S. atA. ~~fair~~B. ~~value~~de ~~and~~C. ~~subsequently measured at amortized cost using the effective interest rate method~~V.

~~Borrowings~~NOTES ~~are recognized~~TO ~~initially~~UNAUDITED atCONDENSED ~~fair~~CONSOLIDATED ~~value,~~FINANCIAL ~~net~~STATEMENTS of transaction costs incurred. Borrowings are subsequently stated at amortized cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognized in the income statement over the period of the borrowings using the effective interest method.

J(Amounts are expressed in thousands of adjusted nominal Mexican Pesos) ~~Provisions~~

~~Provisions~~E) ~~are~~Restricted recognized when the Company has a legal or assumed present obligation as a result of past events; it is probable that an outflow of resources will be required to settle the obligation; and the amount has been reliably estimated, except in contingent assets acquired in a business acquisition, where it is not necessary that the cash ~~outflow be probable.~~

~~Provisions~~Cash ~~are~~and ~~measured at the present value~~cash ofequivalents ~~the~~which ~~expenditures~~restrictions ~~expected~~originate to benot ~~required~~meet tothe ~~settle~~definition ~~the~~of ~~obligation~~cash ~~using~~and acash ~~pre-tax~~equivalents ~~rate~~described ~~that~~above, ~~reflects~~are ~~current~~presented ~~market~~in ~~assessments~~a ofseparate ~~the~~line ~~time~~in ~~value~~the statement of ~~money~~financial position and ~~the~~are ~~risks~~excluded ~~specific~~from tocash ~~the~~and ~~obligation.~~cash ~~The~~equivalents ~~increase~~ in the statement ~~provision due to passage~~ of ~~time~~ iscash ~~recognized as interest expense~~flow.

~~When~~F) ~~the~~Trade effect of the value of money over time is material, provisions are discounted. In provisions with expected maturities close to year-end or less than a year, usually the effect of discounting is not material, if so, it is not required to discount them. receivables

~~The~~Trade ~~cost~~receivables ~~of an item of property, plant, and equipment includes the initial estimate of the costs of dismantling and removing the item, restoring the site on which it is located and the best estimate of~~are ~~the~~amounts ~~future~~due ~~obligations~~from ~~should~~customers befor ~~registered~~services ~~when~~rendered ain ~~legal obligation exists. The amount capitalized as part of~~ the ~~asset’s~~ordinary ~~cost~~course ~~will be the amount estimated to be paid, discounted to the date~~ of ~~initial recognition~~business. ~~The~~Collection ~~subsequent changes in the liability if the related asset~~ is ~~measured~~generally ~~using~~expected ~~the~~in ~~cost~~less ~~model~~than ~~will~~one ~~be added to~~year, oras ~~deducted from~~so, the ~~cost~~Company ofclassifies ~~the~~all ~~related~~its ~~asset~~trade inreceivables ~~the~~as current ~~period~~assets.

~~New~~Trade ~~Financial~~receivables ~~Reporting~~are ~~Standards~~recognized initially at fair value and subsequently measured at amortized cost using the effective interest method, less provision for impairment.

~~Below~~G) isAdvanced a list of the new and amended standards that have been issued and are effective for periods starting on or after January 1, 2012, as well as those that are effective for subsequent periods. Management is in the process of evaluating the potential impact of these pronouncements on its financial information. payments

~~Amendment~~The toadvanced ~~IAS~~payments mainly ~~12,~~comprise ~~Income~~the ~~taxes,~~corporate onfee ~~deferred~~required ~~tax~~by –its ~~This~~holding ~~amendment~~Alfa, ~~introduces~~insurances, anmaintenance, ~~exception~~commissions, torights ~~the~~of ~~existing principle~~use ~~for~~and ~~the~~annual ~~measurement~~rentals. ofThese ~~deferred~~amounts ~~tax~~are ~~assets~~registered orbased ~~liabilities~~on ~~arising~~the oncontractual ~~investment~~value ~~property~~and ~~measured~~are atcarried ~~fair~~to ~~value.~~results Ason a ~~result~~monthly ofbasis during the ~~amendments,~~life ~~SIC~~to ~~21,~~which ~~‘Income~~each ~~taxes~~advanced –payment ~~recovery~~correspond. ofThe ~~revalued~~amount ~~non-depreciable~~that ~~assets’,~~corresponds ~~will~~to ~~no longer~~the ~~apply~~portion to ~~investment~~be ~~properties~~recognized ~~carried~~within atthe ~~fair~~next ~~value.~~12 ~~The~~months ~~amendments~~is ~~also~~presented ~~incorporate~~in ~~into~~current ~~IAS~~assets 12and the remaining ~~guidance~~amount ~~previously~~is ~~contained~~presented in ~~SIC~~non-current ~~21, which is withdrawn~~assets. ~~This amendment is effective for periods beginning on or after 1 January 2012.~~

~~Amendment~~H) ~~to IAS 1,~~ Financial statement presentation, regarding other comprehensive income – The main change resulting from these amendments is a requirement for entities to group items presented in ‘other comprehensive income’ (OCI) on the basis of whether they are potentially reclassifiable to profit or loss subsequently (reclassification adjustments). The amendments do not address which items are presented in OCI. This amendment is effective for periods beginning on or after 1 July 2012 (retrospective application required), with early adoption permitted. Instruments

Financial assets

The Company classifies its financial assets as loans and receivables. Management determines the classification of its financial assets at initial recognition.

Loans and trade receivables are non-derivative financial assets allowing for fixed or determinable payments that are not quoted in an active market. They are shown as current assets, except for those maturing in over 12 months as from the closing date of the period reported, which are classified as non-current assets. The Company’s loans and receivables are comprised of trade and other receivable from customers and related parties and cash and cash equivalents.

Loans and receivable are initially recorded at fair value and subsequently measured at their amortized cost by the effective interest rate method, less the impairment provision.

Financial assets are derecognized when the rights to receive cash flows from the investments have expired or have been transferred and the Company has transferred substantially all risks and rewards of ownership.

Financial liabilities

Financial liabilities that are not derivatives are initially recognized at fair value and are subsequently measured at amortized cost using the effective interest method. Liabilities in this category are classified as current liabilities if are expected to be settled within the next 12 months, otherwise, they are classified as non-current.

Loans are initially recognized at fair value, net of transaction costs incurred. Loans are subsequently recognized at amortized cost, any difference between the amounts received (net of transaction costs) and the settlement value is recognized in the income statement over the term of the loan using the effective interest method.

F-12

~~Amendment to IAS 19~~ALESTRA, ~~Employee~~S. ~~benefits~~DE –R. ~~These~~L. ~~amendments~~DE ~~eliminate~~C. ~~the corridor approach and requires the calculation of finance costs on a net funding basis~~V. ~~This~~AND ~~amendment~~SUBSIDIARIES ~~is effective for periods beginning on or after 1 January 2013.~~

~~IFRS~~Subsidiaries ~~9, Financial instruments – IFRS 9 is the first standard issued as part~~ of aAlfa ~~wider project to replace IAS 39~~S. ~~IFRS 9 retains but simplifies the mixed measurement model and establishes two primary measurement categories for financial assets: amortized cost and fair value~~A. ~~The basis of classification depends on the entity’s business model and the contractual cash flow characteristics of the financial asset~~B. ~~The~~de ~~guidance in IAS 39 on impairment of financial assets and hedge accounting continues to apply~~C. ~~This standard is effective for periods beginning on or after 1 January 2015, with early adoption permitted~~V.

~~IFRS~~NOTES ~~10,~~TO ~~Consolidated~~UNAUDITED ~~financial~~CONDENSED ~~statements~~CONSOLIDATED –FINANCIAL ~~The~~STATEMENTS objective of IFRS 10 is to establish principles for the presentation and preparation of consolidated financial statements when an entity controls one or more other entities. It defines the principle of control, establishes controls as the basis for consolidation. It sets out how to apply the principle of control to identify whether an investor controls an investee and therefore must consolidate the investee, and sets out the accounting requirements for the preparation of consolidated financial statements. It replaces IAS 27 and SIC 12 and is effective for periods beginning on or after 1 January 2013, with early adoption permitted.

~~IFRS~~(Amounts ~~12,~~are expressed ~~Disclosures of interests~~ in ~~other~~thousands ~~entities – IFRS 12 includes the disclosure requirements for all forms~~ of ~~interests~~adjusted innominal ~~other~~Mexican ~~entities,~~Pesos) including joint arrangements, associates, special purpose vehicles and other off balance sheet vehicles. It is effective for periods beginning on or after 1 January 2013, with early adoption permitted.

~~IFRS~~I) ~~13,~~Derivative ~~Fair~~financial ~~value~~instruments ~~measurement – IFRS 13 aims to improve consistency~~ and ~~reduce~~hedging complexity by providing a precise definition of fair value and a single source of fair value measurement and disclosure requirements for use across IFRSs. The requirements do not extend the use of fair value accounting but provide guidance on how it should be applied where its use is already required or permitted by other standards within IFRSs. It is effective for periods beginning on or after 1 January 2013, with early adoption permitted. activities

~~IAS~~Derivative 27financial ~~(revised~~instruments ~~2011),~~entered ~~Separate~~into ~~financial~~and ~~statements~~identified –as ~~IAS~~cash 27flow ~~(revised~~hedges ~~2011)~~are ~~includes~~included in the ~~provisions~~balance onsheet ~~separate~~as ~~financial~~assets ~~statements~~and/or ~~that~~liabilities at fair value and are ~~left~~measured ~~after~~subsequently ~~the~~at ~~control~~its ~~provisions~~fair value. ofThe ~~IAS~~fair 27value ~~have~~is ~~been included~~determined inbased on the ~~new~~prices ~~IFRS~~in ~~10.~~recognized Itmarkets; iswhen ~~effective~~no ~~for~~quoted ~~periods~~market ~~beginning~~prices onare oravailable, ~~after~~it ~~1 January~~is ~~2013,~~determined ~~with~~based ~~early~~on ~~adoption~~valuation ~~permitted~~techniques accepted in the financial sector.

The fair value of financial instruments hedging derivatives is classified as a non current asset or liability if the remaining maturity of the hedged item is more than 12 months and as a current asset or liability if the remaining maturity of the hedged item is less than 12 months.

The changes in the fair value of derivative financial instruments associated to cash flow hedging are recognized in equity. These derivative financial instruments for hedging are entered to hedge against an existing risk and they comply with the related hedge accounting requirements, its designation as a hedge is documented at the inception of the transaction, specifying the related objective, initial position, risks to be hedged, type of hedge relationship, characteristics, accounting recognition and how their effectiveness will be assessed. The effective portion of cash flow hedges is temporarily included in other comprehensive income in stockholders’ equity and is reclassified to income when the hedged item affects income; the ineffective portion is recognized immediately in income.

The Company suspends accounting for hedge transactions when the derivative instrument has expired, been cancelled or been exercised, when it has not reached a high degree of effectiveness to offset the changes in cash flow of the hedged item, or when its designation as a hedge is cancelled.

When suspending accounting for hedge transactions of cash flow hedges, the amounts accumulated in stockholders’ equity forming part of other comprehensive income, remain in stockholders’ equity until the effect of the forecasted transaction affects income. In the case the forecasted transaction seems unlikely to occur, the gains or losses accumulated in other comprehensive income are recognized immediately in income. When the hedge of a forecasted transaction is effective but later does not comply with the effectiveness test, the effects accumulated in other comprehensive income in stockholders’ equity are reclassified to income in proportion as the forecasted asset or liability affects income.

The derivative financial instruments were privately negotiated with various financial institutions whose strong financial condition was supported by high ratings assigned by securities and credit risk rating agencies.

The fair values of the financial derivative instruments reflected in the Company’s financial statements are determined using models that involve the use of assumptions based on past and current market conditions, and future expectations at the corresponding closing date.

J)	Inventories

Inventory stock is recorded at the lower of cost or its net realization value. The cost of the products includes only the price of goods. The net realizable value is the estimated sale price in the normal course of business, less costs estimated to conduct the sale. Cost is determined by the first-in first-out method (FIFO).

Physical inventory counts are conducted periodically and inventory records are adjusted to the results of said counts. Historically, shortages have been immaterial, as the Company has implemented strict inventory control procedures.

F-13

3ALESTRA, S. ~~INTERNATIONAL~~DE ~~FINANCIAL~~R. ~~REPORTING~~L. ~~STANDARDS~~DE ~~ADOPTION~~C. ~~(IFRS)~~V. AND SUBSIDIARIES

~~Following~~Subsidiaries ~~are the amounts~~ of ~~the~~Alfa ~~significant~~S. ~~accumulated~~A. ~~changes~~B. tode ~~the main items of the financial statements at January 1, 2011, June, 30, 2011 and December 31, 2011~~C. ~~The impacts are based on the IFRS in existence as of the date of adoption and therefore future interpretations or new IFRS requiring retrospective application may have a material impact~~V.

~~Opening~~NOTES ~~Balance~~TO ~~Sheet~~UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~January 1,~~(Amounts ~~2011~~are expressed in thousands of adjusted nominal Mexican Pesos)

	MFRS		Adjustments/Reclassifications			IFRS
Current Assets		1,539,969		—			1,539,969
Fixed Assets		5,077,968		167,121			5,245,089
Deferred tax		198,853		(44,992	)		153,861
Intangible Assets		325,399		(82,152	)		243,247
Total Assets		7,142,189		39,977			7,182,166
Current liabilities		1,586,292		—			1,586,292
Senior notes		2,471,420		(49,210	)		2,422,210
Labor Obligations		106,746		(26,506	)		80,240
Bank loans, notes payable and capital leases		309,937		—			309,937
Total liabilities		4,474,395		(75,716	)		4,398,679
Capital Stock		1,396,761		(214,454	)		1,182,307
Retained earnings		1,271,033		330,147			1,601,180
Total stockholders’ equity		2,667,794		115,693			2,783,487
Total liabilities and stockholders’ equity		7,142,189		39,977			7,182,166

K)	Property, plant and equipment

The items of property, plant and equipment will be carried at cost less any accumulated depreciation and any accumulated impairment losses in its value. The cost includes expenses directly attributable to the acquisition of the asset.

Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to Alestra and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. Repairs and maintenance are recognized in the income statement during the financial period in which they are incurred. Major improvements are depreciated over the remaining useful life of the related asset.

Depreciation is determined using the straight line method, considering each of the components of the asset separately. The useful life of the classes of depreciable assets is as follows:


		Years
Buildings		40 to 65
Furniture, fixtures and other		10
Transportation equipment		4
Telephone network:
Router & IP Equipment		3
Intelligent Network		5
PBX’s & Platform services		6
Digital Radio Equipment, Videoconference Equipment, Voice Network		8
Optical Direct Access and Power equipment & accessories, Transmission Network		12
Air conditioning & Lab equipment, Synchrony Network		13
Security Systems		14
Towers & infrastructure support		20
Fiber Optics		30
Computer		3
Billing and customer care plataform		7

Improvements to leased properties are depreciated in the term that is shorter between the term of the lease and the useful life.

Spare parts or replacements to be used in more than a year and attributable to specific machinery are classified as property, plant and equipment, in other fixed assets; when used, it should be assessed whether the spare part is a component to be depreciated separately or applied as maintenance expense in the income statement.

F-14

~~Balance~~ALESTRA, ~~Sheet~~S. DE R. L. DE C. V. AND SUBSIDIARIES

~~June 30,~~Subsidiaries ~~2011~~of Alfa S. A. B. de C. V.

	MFRS		Adjustments/Reclassifications			IFRS
Current Assets		1,569,893		(400,797	)		1,169,096
Restricted Cash		—		400,797			400,797
Deferred tax		213,585		(46,042	)		167,543
Fixed Assets		4,958,536		169,388			5,127,924
Intangible Assets		288,047		(73,313	)		214,734
		7,030,061		50,033			7,080,094
Current liabilites		1,552,988					1,552,988
Senior notes		2,367,780		(42,502	)		2,325,278
Bank loans, notes payable and capital leases		107,537		(3,124	)		104,413
Employee’s benefits		108,948		(25,259	)		83,689
		4,137,253		(70,885	)		4,066,368
Capital Stock		1,394,971		(213,625	)		1,181,346
Retained earnings		1,497,837		334,543			1,832,380
		2,892,808		120,918			3,013,726
		7,030,061		50,033			7,080,094

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amounts are expressed in thousands of adjusted nominal Mexican Pesos)

Assets classified as property, plant and equipment are subject to impairment tests when events or circumstances occur indicating that the carrying value of the assets may not be recoverable. An impairment loss is recognized for the amount by which the asset’s carrying value exceeds its recoverable value. The recoverable value is the higher of the fair value less costs to sell and the value in use.

In the case that the carrying value is greater than the estimated recoverable value, a decrease in the carrying amount of the asset is recognized immediately to its recoverable value.

The residual values and useful lives of an asset are reviewed at least annually at the end of the reporting period and, if expectations differ from previous estimates, the changes are accounted for as a change in accounting estimates.

Gains and losses on disposal of assets are determined by comparing the value of the sale with the carrying amount and are recognized in other expense or income in the income statement.

L)	Leases

The classification as finance or operating leases depends on the substance of the transaction rather than the form of the contract.

Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the income statement on a straight line basis over the period of the lease.

M)	Intangible assets

Intangible assets are recognized when complying with the following characteristics: the asset is identifiable, will generate future economic benefits and the Company has control over such benefits.

Intangible assets have a finite useful life which are recognized at cost less the accumulated amortization and the recognized impairment losses. These assets are amortized using the straight line method based on their estimated useful lives, determined in accordance with the expected generation of future economic benefits, and are also subject to impairment tests, if triggering events are identified.

The estimated useful lives of the intangible assets with finite useful lives are as follows:


		Years
Software and licenses		3 to 7
Concessions		20
Other		4

Assets that are subject to amortization are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units).

F-15

~~Profit~~ALESTRA, ~~and~~S. ~~loss~~DE R. L. DE C. V. AND SUBSIDIARIES

~~Six~~Subsidiaries ~~months~~of ~~ended~~Alfa ~~June 30,~~S. ~~2011~~A. B. de C. V.

	MFRS			Adjustments/Reclassifications			IFRS
Revenues		2,302,633						2,302,633
Cost of services (excluding depreciation):		(713,847	)					(713,847	)
Administration and Selling expense		(813,588	)		1,461			(812,127	)
Depreciation and amortization		(422,143	)		4,396			(417,747	)
Other income (expense) net		(11,469	)					(11,469	)
Interest income		3,231						3,231
Exchange (loss) gain, net		124,482						124,482
Effect of derivative financial instruments		(4,473	)					(4,473	)
Interes expense		(166,184	)		416			(165,768	)
Equity and earning (losses) on affiliates		(59	)					(59	)
Income Tax (note14)		(79,103	)					(79,103	)
Deferred Income tax		11,973			(1,050	)		10,923
Net income (loss)		231,453			5,223			236,676

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amounts are expressed in thousands of adjusted nominal Mexican Pesos)

N)	Income tax

The income tax reflected in the consolidated income statement represents the tax incurred in the period, and the effects of deferred income tax determined using the asset and liability method, applying the rate established by the enacted legislation or substantially enacted at the balance sheet date where the Company and its subsidiaries operate and generate taxable income to the total temporary differences resulting from comparing the accounting and tax bases of assets and liabilities and that are expected to apply when the deferred tax asset is realized or deferred tax liability is settled, considering in any case, the tax loss carry forwards to be recoverable. The effect of a change in income tax rates is recognized in income in the period of determination of the exchange rate.

Income tax expense is recognized based on management’s estimate of the weighted average annual income tax rate expected for the full financial year. The estimated average annual tax rate used for 2012 is 27%. The estimated tax rate for the nine months ended September 30, 2012 was 27%.

Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

Deferred income tax asset is recognized only to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilized.

Deferred income tax is provided on temporary differences arising on investments in subsidiaries and associates, except for deferred income tax liability where the timing of the reversal of the temporary difference is controlled by the Company and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred income tax assets and liabilities are offset when there is a legally enforceable right and when the taxes are levied by the same taxation authority.

O)	Employee benefits

i.	Pension obligations

Defined contribution plans:

A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. The Company has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current and prior periods. The contributions are recognized as employee benefit expense when they expire. Prepaid contributions are recognized as an asset to the extent that a cash refund or a reduction in future payments is available.

Defined benefit plans:

A defined benefit plan is defined as an amount of pension benefit that an employee will receive on retirement, usually dependent on one or more factors such as age, years of service and compensation.

F-16

~~Profit~~ALESTRA, ~~and~~S. ~~loss~~DE R. L. DE C. V. AND SUBSIDIARIES

~~Three~~Subsidiaries ~~months~~of ~~ended~~Alfa ~~June 30,~~S. ~~2011~~A. B. de C. V.

	MFRS			Adjustments/Reclassifications			IFRS
Revenues		1,141,527						1,141,527
Cost of services (excluding depreciation):		(341,743	)					(341,743	)
Administration and Selling expense		(411,111	)		(1,595	)		(412,706	)
Depreciation and amortization		(210,320	)		4,397			(205,923	)
Other income (expense) net		(4,365	)					(4,365	)
Interest income		1,949						1,949
Exchange (loss) gain, net		37,284						37,284
Effect of derivative financial instruments		242						242
Interes expense		(83,208	)		(1,004	)		(84,212	)
Equity and earning (losses) on affiliates		(60	)					(60	)
Income Tax (note14)		(35,562	)					(35,562	)
Deferred Income tax		5,868			3,089			8,957
Net income (loss)		100,501			4,887			105,388

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amounts are expressed in thousands of adjusted nominal Mexican Pesos)

The liability recognized in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the end of the reporting period, together with adjustments for unrecognized past service costs. The defined benefit obligation is calculated annually by independent actuaries using the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using the discount rates according to IAS 19 that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of the related pension obligation. The discount rate reflects the value of money over time but not the actuarial or investment risk. Additionally, the discount rate does not reflect the credit risk of the entity, nor does it reflect the risk that future experience may differ from actuarial assumptions.

Actuarial gains and losses arising from employee benefits are recognized directly in the other comprehensive income.

Past-service costs are recognized immediately in income, unless the changes to the pension plan are conditional on the employees remaining in service for a specified period of time (the vesting period). In this case, the past service costs are amortized on a straight line basis over the vesting period.

ii.

Other post-employment obligations

The Company provides benefits like medical care after concluded the labor relationship to its retired employees. The entitlement to these benefits is usually conditional on the employee remaining in service up to retirement age and the completion of a minimum service period. The expected costs of these benefits are accrued over the period of employment using the same accounting methodology as used for defined benefit pension plans.

iii.

Indemnities for termination benefits

Termination benefits are payable when employment is terminated by the Company before the normal retirement date, or whenever an employee accepts voluntary redundancy in exchange for these benefits. The Company recognizes termination benefits when it is demonstrably committed to a termination when the entity has a detailed formal plan to terminate the employment of current employees without possibility of withdrawal. In the case of an offer made to encourage voluntary redundancy, the termination benefits are measured based on the number of employees expected to accept the offer. Benefits falling due more than 12 months after the end of the reporting period are discounted to their present value.

iv.

Short term benefits

The Company provides employee benefits in the short term, which may include wages, salaries, annual compensation and bonuses payable within 12 months.

v.	Profit sharing and bonus plans

The Company recognizes a liability and an expense for bonuses and employee profit sharing in profits when it has a legal or constructive obligation to pay these benefits and determines the amount to be recognized based on the profit for the year after certain adjustments.

F-17

~~Balance~~ALESTRA, ~~Sheet~~S. DE R. L. DE C. V. AND SUBSIDIARIES

~~December 31,~~Subsidiaries ~~2011~~of Alfa S. A. B. de C. V.

	MFRS		Adjustments/Reclassifications			IFRS
Current Assets		1,660,333					1,660,333
Fixed Assets		4,650,316		165,985			4,816,301
Defered tax		450,164		(53,008	)		397,156
Intangible Assets		341,666		(68,212	)		273,454
Prepaid expenses		58,934					58,934
		7,161,413		44,765			7,206,178
Total current liabilities		1,607,657					1,607,657
Senior notes		2,795,740		(42,694	)		2,753,046
Bank loans, notes payable and capital leases		169,592					169,592
Labor Obligations		111,070		(35,465	)		75,605
		4,684,059		(78,159	)		4,605,900
Capital Stock		1,394,971		(215,415	)		1,179,556
Retained earnings		1,082,383		338,339			1,420,722
		2,477,354		122,924			2,600,278
		7,161,413		44,765			7,206,178

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amounts are expressed in thousands of adjusted nominal Mexican Pesos)

P)	Provisions

Liability provisions represent a present legal obligation or constructive obligation as a result of past events where it is probable an outflow of resources to comply with the obligation and where the amount has been reliably estimated. Provisions are not recognized for future operating losses.

Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to passage of time is recognized as interest expense.

When there are similar obligations, the probability that an outflow of economic resources for settlement is determined considering them as a whole. In these cases, the provision estimated is recognized even if the probability of the outflow of cash flows on a specific item considered in the group is remote.

Provisions for restructuring costs and legal claims are recognized when: the Company has a present legal or constructive obligation as a result of past events; it is probable that an outflow of resources will be required to settle the obligation; and the amount has been reliably estimated. Restructuring provisions comprise employee termination payments.

Q)	Common stock

Common stock is classified as equity. Incremental costs directly attributable to the issuance of new common stock or options are shown in equity as a deduction, net of tax, from the proceeds.

R)	Comprehensive income

Comprehensive income is composed of net income plus other capital reserves, which are integrated by the effects of derivative financial instruments for cash flow hedges and other items that for specific requirements are reflected in stockholders’ equity and are not contributions, reductions and distribution of capital.

S)	Information by segments

Segment information is presented in a manner consistent with the internal reporting provided to the chief executive, who is the highest authority in the operational decision making, resource allocation and performance assessment of the operating segments.

T)	Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable for the services rendered in the normal course of operations. Revenues are presented net of discounts and value added taxes, and after eliminating intercompany sales.

Revenues from outgoing and incoming local and international long distance services are recorded based on the traffic minutes processed by the Company and those processed by third parties, respectively.

Revenues derived from data, internet and local are billed monthly and are recognized when services are provided.

Revenues from installation and related costs are deferred and recognized over the estimated life of the customer relationship.

Revenues from telecommunication equipment are recognized when they are delivered.

F-18

~~Profit~~ALESTRA, ~~and~~S. ~~loss~~DE R. L. DE C. V. AND SUBSIDIARIES

~~December 31,~~Subsidiaries ~~2011~~of Alfa S. A. B. de C. V.

	MFRS			Adjustments/Reclassifications			IFRS
Revenues		4,697,326						4,697,326
Cost of services (excluding depreciation):		(1,492,696	)					(1,492,696	)
Administration and Selling expense		(1,625,845	)		12,889			(1,612,956	)
Depreciation and amortization		(1,009,188	)		1,100			(1,008,088	)
Other income (expense) net		(54,626	)		3,672			(50,954	)
Interest income		9,007						9,007
Exchange (loss) gain, net		(328,775	)					(328,775	)
Effect of derivative financial instruments		(6,958	)					(6,958	)
Interest expense		(352,834	)		(1,474	)		(354,308	)
Income Tax (note14)		(172,564	)					(172,564	)
Deferred Income tax		251,560			(8,279	)		243,281
Net income (loss)		(85,593	)		7,908			(77,685	)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~The~~(Amounts ~~adjustments made to MFRS as of January 1st, 2011, June 30, 2011 and December 31, 2011~~ are ~~explained~~expressed ~~below~~ in ~~the~~thousands ~~accounting~~of ~~policies~~adjusted ~~and~~nominal ~~decisions~~Mexican ~~applicable~~Pesos) ~~to Alestra at the transition date:~~

~~Transition~~The ~~date~~Company –recognizes ~~The~~its ~~transition date~~revenue toat bethe ~~used~~end ~~for~~of ~~preparing~~the ~~Alestra’s~~period ~~opening~~based ~~balance~~on ~~sheet~~historical ~~is January 1~~results, ~~2011~~taking ~~(equivalent~~into consideration tothe ~~December 31~~type of customer, ~~2010)~~the type of transaction and the specifics of each arrangement.

~~Estimates –~~U) ~~Estimates~~Changes ~~at the date of transition shall be consistent with those made for the same date under previous accounting principles used~~ in ~~financial statements after making adjustments to reflect any differences in~~ accounting ~~policies,~~policy ~~unless there~~and is objective evidence that those estimates were wrong. The information relating to estimates under MFRS obtained after the transition date will be treated the same way as the subsequent events which do not involve adjustments under International Accounting Standard 10 (IAS 10) unless there is objective evidence of errors. disclosures

~~Property,~~New ~~plant~~pronouncements and ~~equipment~~amendments –issued ~~Alestra chose~~but tonot ~~revalue~~yet ~~some~~effective ~~classes~~for ofperiods ~~property~~starting January 1, ~~plant~~2012 and ~~equipment~~have atnot ~~fair~~been ~~value~~adopted ~~through~~by ~~an independent appraiser and use~~ the ~~revalued~~company ~~amount~~are ~~as deemed cost as of~~ the ~~date of transition~~following. ~~The accounts that would be subject to revaluation are Land and Buildings.~~

~~For~~• ~~the~~IFRS ~~remaining assets of property~~7, ~~plant~~“Financial ~~and~~Instruments: ~~equipment their carrying values under MFRS will be their deemed cost value at the transition date.~~ Disclosures”

~~Inflation~~In –October As2012 ~~required~~the byIASB ~~MFRS,~~amended ~~beginning~~IFRS ~~on January 1~~7, ~~2008,~~“Financial ~~Alestra~~instruments: ~~discontinued recognizing the effects of inflation in its financial information~~Disclosures”. ~~Alestra’s~~The ~~financial~~standard ~~information~~amends ~~for~~ the ~~year~~required ~~ended~~disclosures ~~December 31,~~to ~~2008~~enable ~~maintained~~users of the ~~inflation~~financial ~~adjustments~~statements ~~recognized~~to inevaluate ~~prior~~risk ~~years~~exposure related into ~~its~~transfers ~~consolidated~~of ~~stockholders’~~financial ~~equity,~~assets and the ~~inflation-adjusted~~ ~~amounts~~effect ~~for~~of ~~non-monetary~~these ~~assets~~risks ~~and~~on ~~liabilities~~the atfinancial ~~December 31,~~position ~~2007~~of ~~became~~ the ~~accounting~~entity. ~~basis~~For ~~for~~the ~~those~~Company, ~~assets~~this ~~and~~amendment ~~liabilities~~is ~~beginning~~effective on January 1, ~~2008 and for subsequent periods~~2013.

•

IAS 1, “Presentation of Financial Statements”

In June 2011 the IASB amended IAS 1, “Presentation of financial statements”. The main change resulting from this modification is the requirement to group items presented in other comprehensive income, on the basis of whether they are potentially reclassified to the income statement in later years. The amendments do not consider which items are presented in other comprehensive income. For the Company, this amendment is effective on January 1, 2013.

•

IFRS 9, “Financial Instruments”

IFRS 9, “Financial Instruments” was issued in November 2009 and contained requirements for classification and measurement of financial assets. Requirements for financial liabilities were included as part of IFRS 9 in October 2010. Most of the requirements for financial liabilities were taken from IAS 39 without making any changes. However, some amendments were made to the fair value option for financial liabilities to include own credit risk. In December 2011, the IASB made amendments to IFRS 9 to require its application for annual periods beginning on or after January 1, 2015.

•

IFRS 10, “Consolidated Financial Statements”

In May 2011 the IASB issued IFRS 10, “Consolidated Financial Statements”. This standard outlines the principles for the presentation of consolidated financial statements when an entity controls one or more entities. IFRS 10 defines the principle of control and establishes control as the basis for determining the entities to be consolidated in the financial statements. The standard also includes the accounting requirements for the preparation of the consolidated financial statements, as well as the requirements for application of the principle of control. IFRS 10 replaces IAS 27, “Consolidated and separate financial statements” and SIC 12 “Consolidation - Special purpose entities” and for the Company, IFRS 10 is effective on January 1, 2013.

F-19

~~For Alestra’s opening balance sheet~~ALESTRA, ~~International~~S. ~~Accounting~~DE ~~Standard~~R. 29L. ~~(IAS~~DE ~~29)~~C. ~~should be applied to any periods during which the economy of the functional currency or presentation currency was hyperinflationary, therefore retrospective application of IAS 29 is required~~V. ~~IAS~~AND 29SUBSIDIARIES ~~states that a cumulative inflation rate at or approaching 100% over three years is an indicator that an economy is hyperinflationary.~~

~~The~~Subsidiaries ~~last~~of ~~period~~Alfa ~~that~~S. ~~Mexico~~A. ~~had~~B. ade cumulative inflation rate higher than 100% over three years was until December 31, 1997, therefore any inflation effect recognized from January 1, 1998 to December 31, 2007 according to MFRS will be eliminated for IFRS conversion purposesC. ~~This elimination is recognized in retained earnings~~V.

~~Alestra~~NOTES ~~elected~~TO toUNAUDITED ~~use~~CONDENSED ~~fair~~CONSOLIDATED ~~value~~FINANCIAL ~~for~~STATEMENTS some items of property, plant and equipment as it was mentioned before in property, plant and equipment section and for the other classes of assets of property, plant and equipment their carrying values under MFRS will be their deemed cost values at the transition date, therefore based on this exemption of IFRS 1, Alestra won’t apply IAS 29 retrospectively to property, plant and equipment.

~~However~~(Amounts ~~for the other non monetary assets IAS 29 has to be applied~~are ~~retrospectively.~~expressed ~~Examples~~in thousands of ~~other~~adjusted ~~non~~nominal ~~monetary~~Mexican ~~assets~~Pesos) ~~are:~~

• ~~Prepaid~~IFRS ~~expenses~~11, “Joint Arrangements”

•In ~~Intangible~~May 2011 the IASB issued IFRS 11 “Joint Arrangements”. IFRS 11 classifies joint arrangements into two types: joint operations and joint ventures. The entity determines the type of joint arrangement in which it participates considering their rights and obligations. Joint operations arise where a joint operator has rights to the assets and obligations relating to the arrangement and hence accounts for its interest in assets, liabilities, revenue and expenses. Joint ventures arise where the joint operator has rights to the net assets of the arrangement and hence equity accounts for its interest. In a joint venture, an investment is recognized and recorded using the equity method. For the Company, IFRS 11 is effective on January 1, 2013.

~~Leases –~~• ~~the~~IFRS ~~Company chose to determine~~12, in“Disclosure ~~accordance with International Financial Reporting Interpretations Committee number 4 (IFRIC 4), whether an existing arrangement at the date~~ of ~~transition~~Interest ~~contains a lease, taking~~ in ~~consideration~~Other ~~the facts and circumstances existing at that date.~~ Entities”

~~Employee~~The ~~benefits~~IASB –issued ~~the~~IFRS ~~Company~~12, ~~chose~~“Disclosure of Interests in Other Entities” in May 2011. IFRS 12 requires an entity to ~~recognize~~disclose information ~~all~~to ~~cumulative~~evaluate ~~actuarial~~the ~~gains~~nature and ~~losses~~risks ~~at transition~~associated ~~date~~with its interests in ~~retained~~other ~~earnings~~entities, including joint arrangements, associates and special purpose entities. For the Company, IFRS 12 is effective on January 1, 2013.

As• ~~part of the~~ IFRS ~~adoption adjustments~~13, ~~the~~“Fair ~~Company~~Value ~~will eliminate any transition liability that it has pending for amortization, as well as the termination benefits that had been recognized according to the previous MFRS at transition date.~~ Measurement”

~~Cumulative~~In ~~foreign~~May ~~exchange~~2011 ~~differences –~~ the ~~Company~~IASB ~~chose~~issued toIFRS ~~eliminate~~13, ~~through~~“Fair ~~retained~~Value ~~earnings,~~Measurements”. ~~every~~The ~~cumulative~~objective ~~translation differences~~ of ~~all subsidiaries~~IFRS ~~whose~~13 ~~functional~~is ~~currency~~to isprovide ~~not~~a ~~the~~precise ~~same~~definition asof ~~the~~fair ~~presentation~~value ~~currency~~and ofbe ~~Alestra~~a ~~(Mexican~~single ~~Peso)~~source atfor the ~~transition~~measurement ~~date.~~and disclosure ~~Therefore,~~requirements ~~any~~for ~~gain~~fair orvalue ~~loss~~when onit ~~subsequent~~is ~~disposals~~required ofor ~~these~~permitted ~~entities~~by ~~will~~other ~~not~~IFRSs. ~~include~~For the ~~translation~~Company, ~~differences that~~IFRS ~~arose~~13 ~~before~~is ~~the~~effective ~~transition~~on ~~date~~January 1, 2013.

•

IAS 19, “Employee Benefits”

In June 2011 the IASB amended IAS 19, “Employee Benefits”. The amendments eliminate the corridor method and show the calculation of interest expense on a net basis. For the Company, this amendment is effective on January 1, 2013.

•

IAS 27, “Separate Financial Statements”

In May 2011 the IASB amended IAS 27 under a new title “Separate Financial Statements”. This standard includes guidelines for separate financial statements that remained in place after the control provisions were included in IFRS 10. For the Company, this standard is effective on January 1, 2013.

•

IAS 28, “Investments in Associates and Joint Ventures”

In May 2011 the IASB amended IAS 28 under a new heading “Investments in Associates and Joint Ventures”. The new standard includes requirements for joint ventures and associates for recognition in accordance with the equity method. For the Company, IAS 28 is effective on January 1, 2013.

The Company’s management believes that the adoption of new standards and amendments outlined above will have no significant impact on its financial statements.

F-20

4ALESTRA, S. ~~PROPERTY~~DE R. L. DE C. V. AND ~~EQUIPMENT,~~SUBSIDIARIES ~~NET~~

AsSubsidiaries of ~~January 1st~~Alfa ~~2011,~~S. ~~December 31,~~A. ~~2011~~B. ~~and~~de ~~June 30,~~C. ~~2012,~~V. ~~property and equipment net, consists of the following:~~

	January 1st, 2011			December 31, 2011			June 30, 2012
Buildings	Ps	265,257		Ps	277,062		Ps	279,802
Furniture, fixtures and other		233,114			224,096			225,602
Hardware equipment		354,437			325,478			323,008
Transportation equipment		33,044			30,727			34,081
Telephone network		10,243,018			10,315,685			10,608,009
Leasehold improvements		67,583			70,895			70,895
Billing and customer care software		562,253			562,253			562,253
		11,758,706			11,806,196			12,103,650
Accumulated depreciation and amortization		(7,101,556	)		(7,627,690	)		(7,931,457	)
		4,657,150			4,178,506			4,172,193
Land		291,719			301,776			302,241
Constructions in progress		296,220			336,019			244,658
Total	Ps	5,245,089		Ps	4,816,301		Ps	4,719,092

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~Amortization~~(Amounts ~~of billing and customer care software charged to income amounted to Ps 2,722 and Ps2,722 for~~are ~~the~~expressed ~~periods~~in ~~ended~~thousands ~~June 30,~~of ~~2011~~adjusted ~~and~~nominal ~~2012,~~Mexican ~~respectively.~~Pesos)

~~Depreciation~~Note ~~charged~~4 to- ~~income~~Property, ~~not~~plant ~~including amortization of the billing~~ and ~~customer care software mentioned above~~equipment, ~~was~~net ~~Ps 367,200 and Ps 375,759 for the periods ended June 30, 2011 and 2012, respectively.~~

As of January 1^st 2011, December 31, 2011 and September 30, 2012, property and equipment net, consists of the following:


Description	Land		Buildings and construction			Machinery and equipments			Telephone network			Furniture, laboratory and IT equipment			Motor vehicles			Leasehold improvements			Constructions in progress			Other fixed assets			Total

Balance at January 1st, 2011

Deemed Cost	Ps	291,719	Ps	265,257		Ps	45,380		Ps	10,805,270		Ps	540,664		Ps	33,044		Ps	67,584		Ps	296,220		Ps	1,507		Ps	12,346,645
Accumulated depreciation		—		(105,522	)		(44,212	)		(6,434,344	)		(442,219	)		(22,888	)		(51,249	)		—			(1,122	)		(7,101,556	)


Net book value	Ps	291,719	Ps	159,735		Ps	1,168		Ps	4,370,926		Ps	98,445		Ps	10,156		Ps	16,335		Ps	296,220		Ps	385		Ps	5,245,089


Year ended December 31, 2011
Opening net book value		291,719		159,735			1,168			4,370,926			98,445			10,156			16,335			296,220			385			5,245,089
Additions		10,056											2,166			2,251						726,141						740,614
Disposals							(435	)		(261,751	)		70			(471	)											(262,587	)
Depreciation charge				(4,383	)		(380	)		(850,814	)		(41,873	)		(3,799	)		(5,416	)					(150	)		(906,815	)

Transfers				11,864			456			649,310			21,398						3,314			(686,342	)					—


Closing net book value		301,775		167,216			809			3,907,671			80,206			8,137			14,233			336,019			235			4,816,301

At December 31, 2011
Cost		301,775		277,062			56,106			10,882,584			521,720			32,331			70,895			336,019			1,507			12,479,999
Accumulated depreciation		—		(109,846	)		(55,297	)		(6,974,913	)		(441,514	)		(24,194	)		(56,662	)		—			(1,272	)		(7,663,698	)


Net book value at December 31, 2011	Ps	301,775	Ps	167,216		Ps	809		Ps	3,907,671		Ps	80,206		Ps	8,137		Ps	14,233		Ps	336,019		Ps	235		Ps	4,816,301


Period ended September 30, 2012
Opening net book value		301,775		167,216			809			3,907,671			80,206			8,137			14,233			336,019			235			4,816,301
Additions		466								225						8,232			1,795			492,482						503,200
Disposals							(10	)		(3,974	)		(28	)		(129	)											(4,141	)
Depreciation charge				(3,395	)		(226	)		(523,142	)		(30,473	)		(3,188	)		(3,369	)					(113	)		(563,906	)
Transfers				7,194						474,398			30,570									(512,162	)					—


Closing net book value		302,241		171,015			573			3,855,178			80,275			13,052			12,659			316,339			122			4,751,454

At September 30, 2012
Cost		302,241		284,256			44,411			11,290,231			506,062			37,437			72,689			316,339			1,507			12,855,173
Accumulated depreciation		—		(113,241	)		(43,838	)		(7,435,053	)		(425,787	)		(24,385	)		(60,030	)		—			(1,385	)		(8,103,719	)


Net book value at September 30, 2012	Ps	302,241	Ps	171,015		Ps	573		Ps	3,855,178		Ps	80,275		Ps	13,052		Ps	12,659		Ps	316,339		Ps	122		Ps	4,751,454

Depreciation charged to income, was Ps. 547,811 and Ps 563,906 for the periods ended September 30, 2011 and 2012, respectively. As of January 1st, 2011, property and equipment include assets acquired under capital leases of Ps. 545 with no balance in subsequent periods.

F-21

5ALESTRA, S. ~~BANK~~DE ~~LOANS~~R. ~~AND~~L. ~~NOTES~~DE ~~PAYABLE~~C. V. AND SUBSIDIARIES

AsSubsidiaries of ~~January 1,~~Alfa ~~2011,~~S. ~~December 31,~~A. ~~2011~~B. ~~and~~de ~~June 30,~~C. ~~2012,~~V. ~~bank loans, notes payable and capital leases consist of the following:~~

	January 1, 2011			December 31, 2011			June 30, 2012
Bank loan obtained from Comerica Bank for an amount of U.S. 10 million(1)		—		Ps	139,787		Ps	136,530
Bank loan obtained from Comerica Bank for an amount of US$10 million(2)	Ps	123,571
Promissory notes to Cisco Systems Capital Corporation for an amount of US$37.2 million(3)		238,243			43,144			29,201
Promissory notes to Hewlett Packard Operations de México, S. de R. L. de C. V., for an amount of US$18.8 million.(4)		136,282			24,436			18,595
Promissory notes to Huawei Tecnologies de México, S. A. de C. V. for an amount of US$3.5 million.(5)		28,798			16,288			7,954
		526,894			223,655			192,280
Current portion of bank loans, notes payable and capital leases		(216,957	)		(54,064	)		(45,814	)
Long term debt	Ps	309,937		Ps	169,591		Ps	146,466

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(1)Amounts ~~On December 23, 2011 the Company signed a new loan agreement with Comerica Bank (“Comerica”) for US$10 million bearing interest at 3-month LIBOR rate plus 3%. Interest~~ are expressed ~~payable quarterly and principal is payable~~ in ~~four~~thousands ~~equal installments~~ of ~~US$2.5~~adjusted ~~million~~nominal inMexican ~~September~~Pesos) 30, 2013, December 31, 2013, March 31,2014 and June 30, 2014. This loan agreement contains various covenants which, as of June 30, 2012, and at the date of the issuance of the financial statements, the Company is in full compliance.

~~(2)~~Note On5 ~~September 27, 2010 the Company signed a loan with Comerica for U.S. 10 million bearing interest at 3~~-~~month~~ ~~adjusted~~Debt LIBOR rate plus 3.75%. Interest were payable quarterly and principal was payable in four equal installments of U.S. 2.5 million starting on March 31, 2011 with a maturity on September 30, 2012. On December 23, 2011, the loan was paid in full.

~~(3)~~As ~~The Company issued ten promissory notes for a total amount~~ of ~~US$37.2~~January 1st, ~~million~~2011, toDecember 31, ~~acquire~~2011 ~~goods with its supplier Cisco Systems Capital Corporation. Each note has a maturity of 36 months at an annual interest rates between 5.15%~~ and ~~5.67%.~~September 30, ~~During 2011~~2012, ~~the~~bank ~~Company~~loans, ~~paid in advance nine of the ten promissory~~ notes ~~for~~payable aand ~~total~~capital ofleases ~~US$~~consist ~~11.1 million. As~~ of ~~June~~the ~~30,~~following: ~~2012 amount due is US$ 2.1 million.~~

(4) From October 1, 2008 to March 31, 2010, the Company signed five promissory notes with Hewlett Packard Operations de México, S. de R. L. de C. V. (“HP”), for the acquisition of goods for a total amount of US$18.8 million. The payments will be made on a monthly basis in 48 installments and annual interest rates between 5.21% and 7.082%. During 2011, the Company paid in advance four of the five promissory notes for a total of US$ 7.5 million. As of June 30, 2012 amount due is US$1.4 million.


	At January 1, 2011			At December 31, 2011			At September 30, 2012

Senior Notes	Ps	2,540,111		Ps	2,886,419		Ps	2,584,418
Unsecured bank loans		123,828			139,804			—
Notes Payable⁽¹⁾		404,007			83,951			—

		3,067,946			3,110,174			2,584,418

Less: current portion of non-current debt		(335,799	)		(187,537	)		(39,721	)

Non-current debt⁽²⁾	Ps	2,732,147		Ps	2,922,637		Ps	2,544,697

(51) OnAt ~~March~~January 171, ~~2010~~2011, ~~the~~December ~~Company~~31, ~~signed~~2011 aand ~~promissory~~September ~~note~~30, ~~with Huawei Technologies de México S. A. de C. V. (“Huawei”)~~2012, ~~for~~bank ~~the~~loans ~~acquisition~~and ofnotes ~~goods~~payable ~~for~~incurred ainterest ~~total amount of US$3.5 million. The payments will be made quarterly~~ at an ~~annual~~average ~~interest~~ rate of 5.5032%. Asfor ~~of June 30, 2012,~~ the ~~amount~~three ~~outstanding was US$0~~years.~~6 million.~~

OnThe ~~June~~fair 5,value ~~2012,~~of ~~Alestra~~bank ~~signed~~loans aand ~~revolving~~notes ~~credit~~payable ~~line~~approximated ~~with~~their ~~Banco~~current ~~Nacional~~carrying ~~de Comercio Exterior~~amounts, ~~S.N.C~~as ~~(Bancomext) for Ps 450~~the ~~million~~impact ~~that~~of ~~matures~~discounting ~~on June 5, 2016. This facility~~ is ~~currently~~not ~~unused~~significant.

(2)	The carrying amounts, terms and conditions of non-current debt are as follows:


Description	Currency	At January 1, 2011		At December 31, 2011		At September 30, 2012		Maturity date “DD/MM/YYYY”		Interest rate

11.750% Senior Notes (a)	Usd	Ps	2,422,210	Ps	2,753,046	Ps	2,544,697		11/08/2014		13	%

Total Senior Notes			2,422,210		2,753,046		2,544,697


Comerica Bank (b)	Usd		123,571		139,787				—		4	%

Total unsecured bank loans			123,571		139,787		—


Cisco System Capital Corporation (c)	Usd		94,927		16,305		—		—		5	%
Hewlett Packard Operations Mexico (d)	Usd		77,040		13,499		—		—		5	%
Huawei Technologies de Mexico (e)	Usd		14,399		—		—		—		6	%

Total Other			186,366		29,804		—

TOTAL		Ps	2,732,147	Ps	2,922,637	Ps	2,544,697

F-22

6ALESTRA, S. ~~SENIOR~~DE ~~NOTES~~ R. L. DE C. V. AND SUBSIDIARIES

OnSubsidiaries ~~August 11, 2009 the Company performed a debt offering by issuing unsecured senior notes for a total amount~~ of ~~US$200~~Alfa ~~million~~S. ~~The senior notes bear interest at annual rate of 11~~A.~~750%~~ ~~payable semi-annually in cash on February and August of each year with a maturity on August 11, 2014 (“11~~B.~~750%~~ ~~Senior~~de ~~Notes”)~~C. ~~The 11~~V.~~750%~~ ~~Senior Notes principal will be paid at maturity and is presented as long-term in the balance sheet.~~

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amounts are expressed in thousands of adjusted nominal Mexican Pesos)

On August 11, 2009 the Company performed a debt offering by issuing unsecured senior notes for a total amount of US$200 million. The senior notes bear interest at annual rate of 11.750% payable semi-annually in cash on February and August of each year with a maturity on August 11, 2014 (“11.750% Senior Notes”). The 11.750% Senior Notes principal will be paid at maturity and is presented as long-term in the balance sheet.

The proceeds obtained in the issuance of the 11.750% Senior Notes were used to refinance the Company’s 8% Senior Notes due June 2010 (“8% Senior Notes”).

On October 7, 2009, the Company filed a registration statement on Form F-4 in order to register its offer to exchange its outstanding 11.750% Senior Notes due 2014 with new notes that have been registered under the U.S. Securities Act of 1933, as amended. This registration statement became effective on January 6, 2010.

The costs and expenses, including the placing of premiums and discounts of this new issuance, which at December 31, 2009 amounted to Ps66,166 (US$5.1 million), will be amortized over the life of the 11.750% Senior Notes. The unamortized costs and expenses of the 8% Senior Notes due 2010, amounting to Ps19,229 at December 31, 2009, were charged to income for the year and are presented in the statement of operations as other income (expense).

The Company may redeem, at any time, the 11.750% Senior Notes, in whole but not in part, by paying the greater of 100% of the principal amount of such notes and the sum of the present value of each remaining scheduled payment of principal and interest discounted to the redemption date on a semi-annual basis at the Treasury Rate (as defined in the indenture for the 11.750% Senior Notes) plus 50 basis points, in each case plus accrued and unpaid ~~interest. In addition, prior to or on August 11, 2012, the~~ Company may redeem up to 35% of the original principal amount of the 11.750% Senior Notes with the net proceeds from certain equity offerings by the Company, at a price of 111.75% of the aggregate principal amount thereof, plus accrued and unpaid interest.

In the event of a change in the Company’s control structure, for example in the case of change of the interest ownership partners of the Company and with certain exceptions, the holders of the 11.750% Senior Notes are entitled to demand that the Company repurchase the notes in cash, at a price equal to 101% of the principal amount plus unpaid accrued interest.

The indenture for the 11.750% Senior Notes and other credit agreements contain various debt covenants including limitations on the sale of assets and affiliate transactions, among others. In addition, these covenants require the Company to have a certain leverage ratio prior to being able to enter into additional debt transactions. As of ~~June~~January 301, 2011, December 31, 2011 and September 30, 2012 the Company is in compliance with all required covenants.

The indenture governing the Company’s 11.750% senior notes due 2014 contains the following covenants, among others, each subject to certain customary exceptions and carve-outs:

•

Subject to specified exceptions, we may not incur indebtedness unless consolidated leverage ratio (as defined in the indenture) would be less than 3.50 to 1.0 and the Company’s consolidated fixed charge coverage ratio (as defined in the indenture) would be greater than or equal to 2.0 to 1.0. The Company’s consolidated leverage ratio was less than 3.50 to 1.0 and consolidated fixed charge coverage ratio was greater than 2.0 to 1.0;

•

Subject to specified exceptions, we may not make any restricted payments, including the payment of dividends, unless we can incur at least one additional dollar of indebtedness under the ratios above, no event of default has occurred and is continuing, and the sum of all restricted payments since the issuance of the debt is less than a specified amount (such amount is based on a percentage of the Company’s consolidated net income, capital stock contributions and returns on unrestricted subsidiaries, as defined in the indenture, and other investments); and subject to specified exceptions, we may not incur any liens on any of the Company’s properties unless the notes are equally and ratably secured.

F-23

7ALESTRA, S. ~~EMPLOYEES’~~DE ~~BENEFITS~~ R. L. DE C. V. AND SUBSIDIARIES

AnSubsidiaries ~~analysis~~ of ~~the~~Alfa ~~net~~S. ~~periodic~~A. ~~pension~~B. ~~cost~~de byC. ~~plan~~V. ~~type for the six months ended June 30, 2012 is presented as follows:~~

	Pension PlanJune 30,						SeniorityPremiumJune 30,				IndemnitiesJune 30,				Otherretirementbenefits June 30,				TotalJune 30
	2011			2012			2011		2012		2011		2012		2011		2012		2011			2012
Net cost of the period:
Labor cost of the current service	Ps	923		Ps	1,060		Ps	91	Ps	91	Ps		Ps		Ps	47	Ps	43	Ps	1,061		Ps	1,194
Financial cost		2,494			2,625			71		84						143		150		2,708			2,859
Net actuarial gain or loss
Labor cost of past service		(320	)		(273	)														(320	)		(273	)
Total	Ps	3,097		Ps	3,412		Ps	162	Ps	175	Ps	—	Ps	—	Ps	190	Ps	193	Ps	3,449		Ps	3,779

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

An(Amounts ~~analysis~~are expressed ofin ~~the~~thousands ~~net~~of ~~periodic~~adjusted ~~pension~~nominal ~~cost~~Mexican byPesos) ~~plan type for the three months ended June 30, 2012 is presented as follows:~~

	Pension PlanJune 30,						SeniorityPremiumJune 30,				IndemnitiesJune 30,				OtherretirementbenefitsJune 30,				TotalJune 30
	2011			2012			2011		2012		2011		2012		2011		2012		2011			2012
Net cost of the period:
Labor cost of the current service	Ps	461		Ps	530		Ps	46	Ps	46	Ps		Ps		Ps	24	Ps	21	Ps	530		Ps	597
Financial cost		1,247			1,311			35		42						72		75		1,354			1,428
Net actuarial gain or loss
Labor cost of past service		(160	)		(136	)														(160	)		(136	)
Total	Ps	1,548		Ps	1,705		Ps	81	Ps	88	Ps	—	Ps	—	Ps	96	Ps	96	Ps	1,724		Ps	1,889

b)	At September 30, 2012 the annual maturities of the total non-current debt, corresponding to the 11.750% Senior Notes of $2,544,697 is on 2014.

On September 27, 2010 the Company signed a loan with Comerica for U.S. 10 million bearing interest at 3-month adjusted LIBOR rate plus 3.75%. Interest were payable quarterly and principal was payable in four equal installments of U.S. 2.5 million starting on March 31, 2011 with a maturity on September 30, 2012. On December 23, 2011, the loan was paid in full.

On December 23, 2011 the Company signed a new loan agreement with Comerica Bank (“Comerica”) for U.S. 10 million bearing interest at 3-month LIBOR rate plus 3%. Interest are payable quarterly and principal is payable in four equal installments of U.S. 2.5 million in September 30, 2013, December 31, 2013, March 31,2014 and June 30, 2014. As of September 30, 2012, the loan was paid in full.

The Company issued ten promissory notes for a total amount of U.S. 37.2 million to acquire goods with its supplier Cisco Systems Capital Corporation. Each note has a maturity of 36 months at an annual interest rates between 5.15% and 5.67%. During 2011, the Company paid in advance nine of the ten promissory notes for a total of U.S. 11.1 million. At December 31, 2011 amount due was U.S. 3.09 million. As of September 30, 2012, the loan was paid in full.

From October 1, 2008 to March 31, 2010, the Company signed five promissory notes with Hewlett Packard Operations de México, S. de R. L. de C. V. (“HP”), for the acquisition of goods for a total amount of U.S. 18.8 million. The payments will be made on a monthly basis in 48 installments and annual interest rates between 5.21% and 7.082%. During 2011, the Company paid in advance four of the five promissory notes for a total of U.S. 7.5 million. At December 31, 2011 amount due was U.S. 1.75 million, as of September 30, 2012, the loan was paid in full.

On March 17, 2010, the Company signed a promissory note with Huawei Technologies de México S. A. de C. V. (“Huawei”), for the acquisition of goods for a total amount of U.S. 3.5 million. The payments were made quarterly at an annual interest rate of 5.50%. At December 31, 2011, the amount outstanding was U.S. 1.17 million, as of September 30, 2012, the loan was paid in full.

Note 6 - Employee benefits

Defined contribution plans:

The Company has a defined contribution plan. In accordance with the structure of this plan, the reduction in labor liabilities is reflected progressively. The Company has established irrevocable trust funds for payment of defined contribution plan. The contributions in 2012 amounted to Ps. 28,987 (Ps. 34,463 in December 2011).

Defined benefit plans:

The valuation of defined benefit plan is based primarily on years of service completed by the Company’s employees, their current age and estimated salary at retirement date.

F-24

8ALESTRA, S. ~~INCOME~~DE ~~TAX~~ R. L. DE C. V. AND SUBSIDIARIES

~~The~~Subsidiaries ~~reconciliation~~of ~~between~~Alfa ~~the~~S. ~~statutory~~A. ~~and~~B. ~~effective~~de ~~income~~C. ~~tax~~V. ~~rates is shown below:~~

	Six months ended Jun 30,
	2011			2012
Income before income tax		Ps304,856			Ps424,716
Statutory tax rate		30	%		30	%
Income tax at statutory rate		(91,457	)		(127,415	)
Add (deduct) effect of income tax on:
Inflationary tax adjustment		(7,333	)		(1,968	)
Other permanent items:
Tax effect from indexing of non-deductible fixed assets		39,337			(7,724	)
Others		(15,654	)		38,534
Subtotal		(75,107	)		(98,573	)
Effect in the current income tax provision due to amortization of tax loss carry forwards reserved in prior years		6,927			—
Total provision of income tax		(Ps68,180	)		(Ps98,573	)

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~For~~(Amounts ~~the Six months ended June 30, 2011, the company recognized its income tax provision using an~~are ~~income~~expressed ~~tax~~in ~~effective~~thousands ~~rate~~ of ~~24%~~adjusted ~~compared~~nominal toMexican anPesos) ~~income tax effective rate of 25% for the Six months ended June 30, 2012.~~

	Three months ended Jun 30,
	2011			2012
Income before income tax	Ps	131,993		Ps	(59,761	)
Statutory tax rate		30	%		30	%
Income tax at statutory rate		(39,598	)		17,928
Add (deduct) effect of income tax on:
Inflationary tax adjustment		(3,688	)		1,150
Other permanent items:
Tax effect from indexing of non-deductible fixed assets		19,462			(22,657	)
Others		(6,740	)		28,099
Subtotal		(30,564	)		(24,520	)
Effect in the current income tax provision due to amortization of tax loss carry forwards reserved in prior years		3,959			(552	)
Total provision of income tax	(Ps	26,605	)	(Ps	23,968	)

Following is a summary of the principal consolidated financial data relative to these obligations:

For the three months ended June 30, 2011, the company recognized its income tax provision using an income tax effective rate of 20% compared to an income tax effective rate of 40% for the Six months ended June 30, 2012.


	At January 1, 2011		At December 31, 2011		At September 30, 2012
Obligation in the balance sheet:
Pension benefits	Ps	76,431	Ps	71,969	Ps	65,227
Post-employment medical benefits		3,809		3,635		3,901

Liability in balance sheet	Ps	80,240	Ps	75,604	Ps	69,128


Charge in the income statement:
Pension benefits		—	Ps	5,083	Ps	5,215
Post-employment medical benefits		—		379		289

		—	Ps	5,462	Ps	5,504

Pension Benefits

The Company operates defined benefits pension plan based on employee pensionable remuneration and length of service.

The amounts recognized in the balance sheet correspond to the present value of funded obligations for an amount of Ps. 76,431, Ps. 71,969, and Ps. 65,227 at January 1, 2011, December 31, 2011 and September 30, 2012, respectively.

The movement in the defined benefit obligation over the period of 2011 is as follows:


	2011
At January 1, 2011	Ps	76,431
Current service costs		2,029
Interest cost		4,786
Actuarial gain/(loss)		(239	)
Benefits paid		(11,038	)

At December 31, 2011	Ps	71,969

The amounts recognized in the income statement are as follows:


	Nine months ended September 30,
	2011			2012
Current service cost	Ps	1,521		Ps	1,725
Interest cost		3,710			3,899
Actuarial gain/(loss)		(480	)		(409	)

Total	Ps	4,751		Ps	5,215

F-25

9ALESTRA, S. ~~SEGMENTS~~ DE R. L. DE C. V. AND SUBSIDIARIES

~~Following~~Subsidiaries isof ~~the~~Alfa ~~condensed~~S. ~~consolidated~~A. ~~financial~~B. ~~information~~de ofC. ~~the~~V. ~~reporting segments:~~

I.NOTES ~~Segments~~TO ~~analytic~~UNAUDITED ~~information~~CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

	Six months ended June, 30 2011							Six months ended June, 30 2012
	Enterprisesegment		OtherSegments		Total			EnterpriseSegment		OtherSegments		Total
Segment revenue	Ps	2,157,372	Ps	145,261	Ps	2,302,633		Ps	2,218,665	Ps	109,499	Ps	2,328,164
Internal Revenue		—
Revenues from external costumers	Ps	2,157,372	Ps	145,261	Ps	2,302,633		Ps	2,218,665	Ps	109,499	Ps	2,328,164
Business unit contribution (BUC)	Ps	1,231,180	Ps	40,124	Ps	1,271,304		Ps	1,429,367	Ps	41,801	Ps	1,471,168
Not assignable expenses						(494,524	)						(509,176	)
Other income (expense)						(11,649	)						(6,416	)
EBITDA						765,131							955,576
Depreciation and amortizations						(417,747	)						(427,848	)
Operative income						347,384							527,728
Comprehensive Financing Result						(42,528	)						(103,012	)
Income before tax					Ps	304,856						Ps	424,716

(Amounts are expressed in thousands of adjusted nominal Mexican Pesos)

	Three months ended June, 30 2011							Three months ended June, 30 2012
	Enterprisesegment		OtherSegments		Total			EnterpriseSegment		OtherSegments		Total
Segment revenue	Ps	1,076,541	Ps	64,986	Ps	1,141,527		Ps	1,104,473	Ps	55,056	Ps	1,159,529
Internal Revenue		—
Revenues from external costumers	Ps	1,076,541	Ps	64,986	Ps	1,141,527		Ps	1,104,473	Ps	55,056	Ps	1,159,529
Business unit contribution (BUC)	Ps	620,565	Ps	20,105	Ps	640,670		Ps	646,670	Ps	20,616	Ps	667,286
Not assignable expenses						(258,252	)						(254,865	)
Other income (expense)						235							(1,309	)
EBITDA						382,653							411,112
Depreciation and amortizations						(205,923	)						(212,335	)
Operative income						176,730							198,777
Comprehensive Financing Result						(44,737	)						(258,538	)
Income before tax					Ps	131,993						Ps	(59,761	)

The principal actuarial assumptions were as follows:


	At January 1, 2011			At December 31, 2011
Discount rate		7.5	%		8.3	%
Inflation rate		4.3	%		5.3	%
Growth rate of wages		5.3	%		5.3	%
Expected life		14.8			14.9
Future salary increases		5.3	%		5.3	%

Post employment medical benefits

The Company operates only one post-employment medical benefits scheme. The method of accounting, assumptions and the frequency of valuations are similar to those used for defined benefit pension schemes.

In addition to the assumptions set out above, the main actuarial assumption is a long-term increase in health costs annually 7.5% in 2012 and in 2011.

The amounts recognized in the balance sheet correspond to the present value of funded obligations for an amount of Ps. 3,809, Ps. 3,635, and Ps. 3,901 at January 1, 2011, December 31, 2011 and September 30, 2012, respectively.

Movement in defined benefit obligation is as follows:


	2011
At January 1, 2011	Ps	3,809
Current service costs		93
Interest cost		286
Actuarial gain/(loss)		(553	)

At December 31, 2011	Ps	3,635

The amounts recognized in the income statement were as follows:


	Nine months ended September 30,
	2011		2012
Current service cost	Ps	70	Ps	65
Interest cost		214		224

Total	Ps	284	Ps	289

F-26

~~Other~~ALESTRA, ~~information:~~S. DE R. L. DE C. V. AND SUBSIDIARIES

~~Fixed~~Subsidiaries ~~Assets~~of ~~investment~~Alfa S. A. B. de C. V.

	Six months ended June, 30 2011						Six months ended June, 30 2012
	EnterpriseSegment		OtherSegments		Total		EnterpriseSegments		OtherSegments		Total
PP&E	Ps	268,726	Ps	167	Ps	268,893	Ps	287,868	Ps	351	Ps	288,219
Intangible Assets		23,387		248		23,635		10,979		72		11,051
Capex Investments	Ps	292,113	Ps	415	Ps	292,528	Ps	298,847	Ps	423	Ps	299,270
II. General Information a. By product or service Revenues by service
	Six months ended June, 30 2011						Six months ended June, 30 2012
	Enterprise		OtherSegments		Total		Enterprise		OtherSegments		Total
Long distance	Ps	411,508	Ps	65,175	Ps	476,683	Ps	408,533	Ps	37,540	Ps	446,073
Data, Internet and Local		1,208,978		80,087		1,289,065		1,144,750		71,959		1,216,709
Corporate services of IT		536,885				536,885		665,382				665,382
Total revenues by services	Ps	2,157,372	Ps	145,261	Ps	2,302,633	Ps	2,218,665	Ps	109,499	Ps	2,328,164

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

	Three months ended June, 30 2011						Three months ended June, 30 2012
	Enterprise		OtherSegments		Total		Enterprise		OtherSegments		Total
Long distance	Ps	204,964	Ps	25,345	Ps	230,309	Ps	195,173	Ps	18,917	Ps	214,090
Data, Internet and Local		607,382		39,642		647,024		569,283		36,278		605,562
Corporate services of IT		264,194				264,194		340,016		139		339,877
Total revenues by services	Ps	1,076,541	Ps	64,986	Ps	1,141,527	Ps	1,104,472	Ps	55,056	Ps	1,159,529

(Amounts are expressed in thousands of adjusted nominal Mexican Pesos)

At December 31, 2011 the effect of a 1% movement in the assumed medical cost trend rate is as follows:


	Increase		Decrease
Effect on the aggregate of the current service cost and interest cost	Ps.	109	Ps.	69
Effect on the defined benefit obligation		4,422		3,019

Note 7 - Income tax


	Three months ended September 30					Nine months ended September 30,
	2011		2012			2011			2012
Income tax:
Current Income tax	Ps	7,800	(Ps	39,524	)	(Ps	71,303	)	(Ps	138,255	)

Deferred income tax		47,827		(58,008	)		58,750			(57,850	)


Benefit/(expense) income tax	Ps	55,627	(Ps	97,532	)	(Ps	12,553	)	(Ps	196,105	)

In accordance with the modifications of the Income tax law published on December 7, 2009, the income tax applicable for 2010 to 2012 is 30%, for 2013, 29% and from 2014 and on 28%.

Estimated income tax

The charge/(credit) of the tax related to the components of other comprehensive income for the three and nine months ended September 30, 2011:

Three months ended
September 30, 2011

Nine months ended
September 30,2012

Before taxes

Tax
charge/
(credit)

After tax

Before taxes

Tax
charge/

(credit)

After tax

Cashflow hedges deferred tax

4,483

(Ps

1,345

)

3,138

828

(Ps

248

)

580

As of September 30, 2012, there was no charge/ (credit) of tax related components in other comprehensive income to disclose.

F-27

bALESTRA, S. ByDE ~~geographic~~R. ~~segments~~L. DE C. V. AND SUBSIDIARIES

~~Revenues by~~Subsidiaries ~~geographic~~of ~~zone~~Alfa S. A. B. de C. V.

	Six months ended June, 30
	2011		2012
México	Ps	2,263,601	Ps	2,309,617
Outside Mexico		39,032		18,547
Total revenues	Ps	2,302,633	Ps	2,328,164

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

	Three months ended June, 30
	2011		2012
México	Ps	1,128,822	Ps	1,149,745
Outside Mexico		12,705		9,784
Total revenues	Ps	1,141,527	Ps	1,159,529

(Amounts are expressed in thousands of adjusted nominal Mexican Pesos)

~~10.~~Note ~~CONTINGENCIES~~8 ~~AND~~- ~~COMMITMENTS~~ Segments

InUntil ~~August~~2011 ~~2006,~~the ~~ABA~~Company ~~Seguros,~~had S.two A.reportable desegments: C.a) V.Long ~~(“ABA~~Distance ~~Seguros”)~~ and 7b) ~~ELEVEN~~Data, ~~Inc.~~internet ~~(“7-Eleven”)~~and ~~filed~~local aservices. ~~claim against Servicios Alestra in the amount of Ps 50~~However,~~000,~~ ~~for damages from a fire that began~~ in ~~the~~2011 ~~building leased by Servicios Alestra to Casa Chapa, S. A. de C. V. under~~ the ~~theory~~Company ofmade ~~subrogation of rights. Servicios Alestra filed~~ a ~~response~~change ~~with~~to the ~~support~~way ofit ~~ACE~~reported ~~Seguros~~information ~~(insurance carrier of Servicios Alestra), since ACE Seguros is the party that would pay should Servicios Alestra be found liable. In order~~ to ~~examine~~its ~~Servicios Alestra’s responsibility, ABA Seguros, 7-Eleven and Servicios Alestra sought the opinions of five experts in the following areas:~~Chief ~~(i) damages~~Operating ~~valuation,~~Decision ~~(ii) insurance~~Maker ~~settlement,~~ (~~iii~~CODM) ~~fires, (iv) accounting, and (v) electrical installation~~. ~~Although~~This ~~the~~change ~~outcome~~is ofdue ~~the~~to ~~claim has not yet been decided, Servicios Alestra does not believe it would have a material effect on its financial results. In~~ the ~~Company’s~~continual ~~opinion;~~evolution ~~although~~of the ~~outcomes~~telecommunications ofindustry ~~these~~in ~~proceedings are uncertain, these should not have a material adverse effect on its financial position, results of operations or cash flows~~Mexico.

The Company determined ~~is involved~~ in a2011 ~~dispute~~that ~~with~~due ~~Teléfonos~~to dedevelopments ~~México,~~in ~~S.A.B.~~the detelecommunications ~~C.V.~~industry, ~~(“Telmex”)~~it ~~regarding interconnection~~was ~~services~~no ~~rates~~longer ~~applicable~~relevant ~~for~~to ~~2008,~~analyze ~~2009,~~its ~~2010~~business ~~and~~under ~~2011 and had requested~~ the ~~intervention~~two ofprevious ~~Cofetel~~reportable segments. OnThe ~~September 8, 2009, a trust was created by the~~ Company, ~~Telmex~~has ~~and~~determined ~~BBVA~~that ~~Bancomer~~its ~~(as~~business astrategy ~~trustee)~~in ~~to guarantee~~ the ~~payment~~future ofshould ~~fixed~~be ~~interconnection~~more ~~services~~focused on ~~dispute~~the ~~applicable~~value ~~for~~added ~~2008~~services, ~~2009~~such as IT, ~~2010~~data and ~~2011,~~internet. As ofa ~~June 30~~result, ~~2012,~~ the ~~trust~~Company ~~balance~~is ~~was~~allocating ~~Ps415.5~~more ~~million.~~resources ~~The~~to ~~trust~~this ~~does not include amounts in dispute for 2011 and 2012 interconnection rates~~area. ~~Since~~In ~~April 2012~~addition, ~~the~~with ~~basis~~changes ~~for~~in ~~the~~industry ~~provision~~ in ~~regard to resale interconnection rates has changed prospectively based on administration analysis and judgment~~Mexico, ~~given~~long ~~the~~distance ~~latest~~revenues ~~reliable~~continue ~~information~~to ~~available~~decrease and ~~market~~this service ~~conditions~~is asnot ~~well~~seen as the ~~Company’s experience~~primary onarea ~~these~~for ~~matters~~future growth. ~~As of the date of issuance of these financial statements~~Therefore, ~~management continues its negotiations with Telmex and it is expected that~~ the Company ~~may~~has ~~reach~~determined anthat ~~agreement~~it inwill ~~the~~focus ~~near~~ future. Inefforts ~~the~~on ~~Company’s opinion, although~~ the ~~outcomes of the mentioned proceedings are uncertain~~IT, ~~they~~data ~~should~~and ~~not~~internet ~~have~~services aoffered ~~material~~to ~~adverse effect on its financial results; however, as of~~ the ~~date~~commercial ofand ~~issuance~~small ofbusiness ~~these financial statements, the Company believes that it has recognized sufficient provisions to address such contingencies~~sectors.

In addition, during 2011, Alfa purchased from AT&T 100% of the Company’s outstanding equity. This resulted in the Company no longer offering AT&T global services as well as resulted in a shift in management´s strategic focus, which includes expanding and growing value added services.

As a result of the aforementioned business changes, in 2011, the Company’s CODM shifted its focus in analyzing the overall business. It now views the Company as having three operating segments: a) Enterprise Segment, b) Small Business and Consumer Segment, c) International Segment.

Information used to make strategic decisions is reported to the CODM based on these three operating segments. The focus of the three operating segments is described as follows.

The Enterprise operating segment offers communication services, and value added services such as IT, data and internet, managed through the Company’s network and infrastructure, for multinational companies, as well as international and national businesses and local government entities.

The Small Business and Consumer Services operating segment offers communication products and services to the consumer and small businesses market. The International Services operating segment offers communication services to operators with international incoming traffic terminating in Mexico. The Small Business and Consumer Services operating segment and the International Services operating segment are not considered individual reportable segments due to a lack of compliance with quantitative limits, as established in IFRS 8 “Operating Segments” for any of the reported years. Pursuant to this standard, operating segments with total revenues equaling less than 10% of total Company revenues are not required to be reported separately and can be grouped with other operating segments that do not meet the 10% threshold, as long as the sum of these grouped operating segments do not exceed 25% of total revenues. Therefore, the financial information of the Small Business and Consumer Services operating segment and the International Services operating segment segments is grouped together and presented as “other segments”.

In addition to the three operating segments focused on the client, the remaining operations of the Company are included within the category of “Non-Allocated expenses” to be integrated to the consolidated results of the Company. The “Non-Allocated Expenses” category includes expenses associated with the centralized functions of the group including the acquisition and supply chain, administration and management of the entity.

These operating segments are managed separately since the products and services offered and the markets they are focused on are different. The resources are assigned to the operating segments considering the strategies defined by the Company’s management. The transactions between the operating segments are carried out at market values.

F-28

~~The~~ALESTRA, ~~Company~~S. isDE ~~also~~R. inL. ~~disputes~~DE ~~with mobile companies associated with Telefónica regarding mobile interconnection services rates for 2011 and 2012~~C. ~~As of the date of this annual report, management continues its negotiations with Telefónica~~V. ~~Although~~AND ~~the~~SUBSIDIARIES ~~outcome of the aforementioned proceedings is uncertain, the Company does not believe that an adverse decision would have a material effect on its business, financial condition or results of operation.~~

11Subsidiaries of Alfa S. ~~SUBSEQUENT~~ ~~EVENTS~~A. B. de C. V.

OnNOTES ~~August 29,~~TO ~~2012,~~UNAUDITED ~~Alestra~~CONDENSED ~~paid~~CONSOLIDATED aFINANCIAL ~~US$~~STATEMENTS ~~8 million dividend declared by the shareholders in a general ordinary meeting held on August 15, 2012.~~

(Amounts are expressed in thousands of adjusted nominal Mexican Pesos)

Performance of the operating segments is measured based on the Business Unit Contribution (BUC), defined as the operating income of each operating segment, including revenues, costs and expenses direct from the segment, as included in the internal financial reports reviewed by the CODM.

The adjusted EBITDA is defined as earnings before interest, taxes, depreciation and amortization. The adjusted EBITDA is considered a useful measure of the business operating performance since it shows the income before depreciation and amortization, and it also provides a significant analysis of the commercial performance upon excluding specific items disclosed separately due to their nature or incidence. The interest expense and income are not assigned to the reportable segments, since this activity is managed globally by the central treasury of the group.

When projects are not directly attributable to a particular operating segment, the capital expense is assigned to each segment based on the ratio of estimated future economic benefits resulting from that capital expenditure.

Following is the consolidated financial information of the reporting segments:

I.	Segments analytic information


	Nine months ended September 30, 2011							Nine months ended September 30, 2012
	Enterprise Segment		Other Segments		Total			Enterprise Segment		Other Segments		Total

Segment revenue	Ps	3,301,882	Ps	209,410	Ps	3,511,292		Ps	3,325,210	Ps	163,745	Ps	3,488,955
Internal Revenue


Revenues from external costumers	Ps	3,301,882	Ps	209,410	Ps	3,511,292		Ps	3,325,210	Ps	163,745	Ps	3,488,955


Business unit contribution (BUC)	Ps	1,882,484	Ps	59,045	Ps	1,941,529		Ps	2,093,994	Ps	61,813	Ps	2,155,807
Not assignable expenses						(754,392	)						(774,589	)

Adjusted EBITDA						1,187,137							1,381,218
Other income						(22,208	)						(14,662	)
Depreciation and amortization						(619,061	)						(625,080	)


Operative income						545,868							741,476
Finance result, net						(470,566	)						(18,149	)


Income before tax					Ps	75,302						Ps	723,327


	Three months ended September 30, 2011							Three months ended September 30, 2012
	Enterprise Segment		Other Segments		Total			Enterprise Segment		Other Segments		Total

Segment revenue	Ps	1,144,510	Ps	64,149	Ps	1,208,659		Ps	1,106,545	Ps	54,246	Ps	1,160,791
Internal Revenue		—


Revenues from external costumers	Ps	1,144,510	Ps	64,149	Ps	1,208,659		Ps	1,106,545	Ps	54,246	Ps	1,160,791


Business unit contribution (BUC)	Ps	651,304	Ps	18,921	Ps	670,225		Ps	664,628	Ps	20,012	Ps	684,640
Not assignable expenses						(259,747	)						(258,998	)

Adjusted EBITDA						410,478							425,642
Other income						(10,739	)						(8,246	)
Depreciation and amortization						(201,314	)						(203,648	)


Operative income						198,425							213,748
Finance result, net						(427,979	)						84,863


Income before tax					Ps	(229,554	)					Ps	298,611

F-29

ALESTRA, S. DE R. L. DE C. V. AND SUBSIDIARIES

Subsidiaries of Alfa S. A. B. de C. V.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amounts are expressed in thousands of adjusted nominal Mexican Pesos)

Other information:

Fixed Assets investment:


	Nine months ended September, 30 2011						Nine months ended September, 30 2012
	Enterprise Segment		Other Segments		Total		Enterprise Segments		Other Segments		Total

PP&E	Ps	59,909	Ps	570	Ps	60,479	Ps	509,982	Ps	440	Ps	510,422
Intangible Assets		454,341		354		454,695		41,814		72		41,886


Capex Investments	Ps	514,250	Ps	924	Ps	515,174	Ps	551,796	Ps	512	Ps	552,308

II. General Information

a.	By product or service

Revenues by service


	Nine months ended September, 30 2011						Nine months ended September, 30 2012
	Enterprise		Other Segments		Total		Enterprise		Other Segments		Total

Long distance	Ps	625,906	Ps	92,822	Ps	718,728	Ps	592,565	Ps	56,197	Ps	648,762
Data, Internet and Local		1,827,153		116,588		1,943,741		1,721,923		107,548		1,829,471
Corporate services of IT		848,823				848,823		1,010,722				1,010,722


Total revenues by services	Ps	3,301,882	Ps	209,410	Ps	3,511,292	Ps	3,325,210	Ps	163,745	Ps	3,488,955


	Three months ended September, 30 2011						Three months ended September, 30 2012
	Enterprise		Other Segments		Total		Enterprise		Other Segments		Total

Long distance	Ps	214,397	Ps	27,648	Ps	242,045	Ps	184,032	Ps	18,656	Ps	202,688
Data, Internet and Local		618,175		36,501		654,676		577,173		35,590		612,763
Corporate services of IT		311,938				311,938		345,340				345,340


Total revenues by services	Ps	1,144,510	Ps	64,149	Ps	1,208,659	Ps	1,106,545	Ps	54,246	Ps	1,160,791

F-30

ALESTRA, S. DE R. L. DE C. V. AND SUBSIDIARIES

Subsidiaries of Alfa S. A. B. de C. V.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amounts are expressed in thousands of adjusted nominal Mexican Pesos)

b.	By geographic segments

Revenues by geographic zone


	Nine months ended September, 30
	2011		2012

México	Ps	3,456,735	Ps	3,460,517
Outside Mexico		54,557		28,438


Total revenues	Ps	3,511,292	Ps	3,488,955


	Three months ended September, 30
	2011		2012

México	Ps	1,193,134	Ps	1,150,900
Outside Mexico		15,525		9,891


Total revenues	Ps	1,208,659	Ps	1,160,791

Note 9 - Commitments and contingencies

At September 30, 2012 the company has the following commitments and contingencies:

At September 30, 2012, the Company has commitments from agreements to lease office space classified as operating leases. The leases payments are subject to escalation factors based on the NPCI. At December 31, 2011, future minimum lease payments under non cancelable operating leases with terms in excess of one year are as follows:


Year
2012	Ps.	126,423
2013		124,959
2014		108,809
2015		84,801
2016 onwards		165,798

	Ps.	610,790

Lease expense for January 1, 2011, December 31, 2011 and September 30, 2012 was Ps. 103,748, Ps. 108,477 and Ps. 87,263, respectively.

b)	As of January 1, 2011, December 31, 2011 and September 30, 2012, the Company obtained performance bonds for Ps. 271,157, Ps. 315,754, and Ps. 323,834, in favor of certain authorities and suppliers to guarantee the Company’s compliance with certain obligations incurred.

F-31

ALESTRA, S. DE R. L. DE C. V. AND SUBSIDIARIES

Subsidiaries of Alfa S. A. B. de C. V.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amounts are expressed in thousands of adjusted nominal Mexican Pesos)

As of January 1, 2011, December 31, 2011 and September 30, 2012, the Company had outstanding commitments to acquire equipment and other capital expenditures related to the construction of its telecommunications network amounting to U.S. 14.6 million (Ps. 180,529), U.S. 11.7 million (Ps. 163,551) and U.S. 13.645 million (Ps. 175,367), respectively.

In August 2006, ABA Seguros, S. A. de C. V. (“ABA Seguros”) and 7 ELEVEN, Inc. (“7-Eleven”) filed a claim against Servicios Alestra in the amount of Ps 50,000, for damages from a fire that began in the building leased by Servicios Alestra to Casa Chapa, S. A. de C. V. under the theory of subrogation of rights. Servicios Alestra filed a response with the support of ACE Seguros (insurance carrier of Servicios Alestra), since ACE Seguros is the party that would pay should Servicios Alestra be found liable. In order to examine Servicios Alestra’s responsibility, ABA Seguros, 7-Eleven and Servicios Alestra sought the opinions of five experts in the following areas: (i) damages valuation, (ii) insurance settlement, (iii) fires, (iv) accounting, and (v) electrical installation. In July, 2010, a Civil Judge decided to acquit Servicios Alestra of responsibility for the damages caused from the fire. In August, 2010, ABA Seguros and 7-Eleven appealed the sentence dictated by the Civil Judge, but on January 2011, a Magistrate of the Court of Appeals confirmed the sentence dictated by the Civil Judge. Despite this decision, ABA Seguros and 7-Eleven could ask for an amparo (constitutional guarantee for protection of civil rights). At September 30, 2012, a resolution, which resulted favorable for the Company, has been reached by Judge.

The Company is involved in a dispute with Teléfonos de México, S.A.B. de C.V. (“Telmex”) regarding interconnection services rates applicable for 2008, 2009, 2010 and 2011 and had requested the intervention of Cofetel. The disagreement is requesting a resolution regarding the interconnection traffic tariffs for telecommunication networks applicable during 2010 and long distance interconnection traffic (interurban transportation) during 2008 and 2009. On September 8, 2009, a trust was created by the Company and Telmex with BBVA Bancomer (as a trustee) to guarantee the payment of fixed interconnection services on dispute applicable for 2008; this trust contract was modified to include the amounts in dispute for 2009 and 2010. Once the parties reach an agreement or the corresponding disagreements are definitely solved, the trust funds as well as the yields thereof will be distributed or applied to future services, as agreed. As of September 30, 2012, the trust balance was Ps. 420,446. On 2011, Alestra and Telmex did not extend the trust contract and therefore, from January 1, 2011, the Company ceased depositing into the trust agreement. Since the date of the formation of the trust through September 30, 2012, no amounts have been paid related to this dispute. Since April 2012, Alestra and Telmex restarted negotiations and the basis for the provision in regard to resale interconnection rates has changed prospectively based on Alestra´s Management analysis and judgment, given the latest reliable information available and market conditions. As of the date of issuance of these interim financial statements, the Company continues its negotiations with Telmex and it is expected that they may reach an agreement in the near future. In the Company’s opinion, although the outcomes of the mentioned proceedings are uncertain, they should not have a material adverse affect on its financial results, financial condition or cash flows; however, as of the date of issuance of these financial statements, the Company believes that it has recognized sufficient provisions to address such contingencies.

The Company is also in disputes with mobile companies associated with Telefónica regarding mobile interconnection services rates for 2011 and 2012. As of the date of these interim financial statements, management continues its negotiations with Telefónica. Although the outcome of the aforementioned proceedings is uncertain, the Company does not believe that an adverse decision would have a material effect on its business, financial condition, results of operation or cash flows.

F-32

ALESTRA, S. DE R. L. DE C. V. AND SUBSIDIARIES

Subsidiaries of Alfa S. A. B. de C. V.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amounts are expressed in thousands of adjusted nominal Mexican Pesos)

Note 10 - First time adoption of international financial reporting standards (IFRS)

Until 2011, the Company prepared its consolidated financial statements in accordance with Mexican Financial Reporting Standards. Starting in 2012, the Company prepares its consolidated financial statements in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).

In accordance with IFRS 1, “First-time adoption of International Financial Reporting Standards”, the Company considered January 1, 2011 as the transition date and January 1, 2012 as the adoption date. The amounts included in the consolidated financial statements for the year 2011 had been reconciled in order to be presented with the same standards and criteria applied in 2012.

For this transition, the Company identified and quantified the differences between MFRS and IFRS for purposes of the opening IFRS balance sheet dated January 1, 2011, as well as for the conversion to IFRS of its financial information systems.

In preparing its opening IFRS balance sheet, based on IFRS 1 “First time adoption of IFRS”, the Company has adjusted the amounts reported previously in financial statements prepared under MFRS. An explanation of how the transition from MFRS to IFRS has affected the Company’s financial position, financial performance and cash flows is set out in the following tables and notes.

1.	Initial Elections Upon Adoption

1.1.

IFRS Exemption Options applied by the Company

1.1.1.

Exemption for fair value as deemed cost

IFRS 1 provides the option to measure at its fair value an item of property, plant and equipment, and certain intangibles at the date of transition to IFRS and use such fair value as its deemed cost at that date or to use a previous GAAP (Generally Accepted Accounting Principles) revaluation, if the revaluation is broadly comparable to: (a) fair value; or (b) cost or depreciated cost in accordance with IFRS, adjusted to recognize the inflation index changes.

The Company elected, at its transition date, to measure its land and buildings at fair value. For the rest of the property, plant and equipment, the Company elected to use its MFRS revaluation as deemed cost under IFRS. The net effect from revaluation was recognized against the opening balance of retained earnings under IFRS at its transition date. Subsequently, the Company accounts for its property, plant and equipment using the cost method in accordance with IFRS.

1.1.2.

Exemption for employee benefits

IFRS 1 provides retrospective relief from applying IAS 19, “Employee Benefits” (“IAS 19”), for the recognition of actuarial gains and losses. In line with this exemption, the Company elected to recognize all cumulative actuarial gains and losses that existed at its transition date against the opening balance of retained earnings for all employee benefit plans.

F-33

ALESTRA, S. DE R. L. DE C. V. AND SUBSIDIARIES

Subsidiaries of Alfa S. A. B. de C. V.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amounts are expressed in thousands of adjusted nominal Mexican Pesos)

1.2.

IFRS Mandatory Exceptions applicable to the Company

1.2.1.

Hedge accounting exception

Hedge accounting can only be applied prospectively from the transition date to transactions that satisfy the hedge accounting criteria in IAS 39, ‘Financial instruments: Recognition and measurement’, at that date. Hedging relationships cannot be designated retrospectively, and the supporting documentation cannot be created retrospectively. As a result, only hedging relationships that satisfied the hedge accounting criteria as of 1 January 2010 are reflected as hedges in the group’s results under IFRS.

1.2.2.

Exception for estimation

IFRS estimates at January 1, 2011 are consistent with the estimates as at the same date made in conformity with MFRS.

1.2.3

Other Mandatory Exceptions

The other mandatory exceptions of IFRS 1 related to derecognition of financial assets and financial liabilities and non-controlling interests were applied, and the impact was not material to the Company.

2.	Reconciliations of MFRS to IFRS

IFRS 1 requires an entity to reconcile equity, comprehensive income and cash flows for prior periods. The Company’s first-time adoption did not have an impact on the total operating, investing or financing cash flows or in other comprehensive income. The following tables represent the reconciliations from MFRS to IFRS for the respective periods noted for equity and earnings.

A)	Reconciliation of consolidated equity as of January 1, 2011, September 30, 2011 and December 31, 2011.

B)	Reconciliation of consolidated net income for the three months ended September 30, 2011, the nine months ended September 30, 2011, and the year ended December 31, 2011.

C)	Description of the effects from the transition to IFRS.

D)	Description of significant effects from the transition to IFRS in the consolidated cash flow statement for the year ended December 31, 2011

F-34

ALESTRA, S. DE R. L. DE C. V. AND SUBSIDIARIES

Subsidiaries of Alfa S. A. B. de C. V.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amounts are expressed in thousands of adjusted nominal Mexican Pesos)

A)	Reconciliation of consolidated equity


		January 1, 2011									December 31, 2011									September 30, 2011
	Note	MFRS			Adj			IFRS			MFRS			Adj			IFRS			MFRS			Adj			IFRS
Assets
Current Assets:
Cash and cash equivalents		Ps	486,224					Ps	486,224		Ps	488,091					Ps	488,091		$	291,628					Ps	291,628
Trade receivables and other receivables, net			493,030						493,030			513,219						513,219			683,544						683,544
Due from affiliates and other related parties			7,974						7,974			8,225						8,225			48,148						48,148
Other receivables			104,924						104,924			110,059						110,059			88,912						88,912
Prepaid expenses			41,213						41,213			91,876						91,876			71,005						71,005
Other current assets			28.396						28.396			40,165						40,165			118,202						118,202


Total current assets			1,161,761						1,161,761			1,251,635						1,251,635			1,301,439						1,301,439

Non-current:
Restricted cash and cash equivalents			378,207						378,207			408,698						408,698			404,771						404,771
Property, plant and equipment, net	b		5,077,968			167,121			5,245,089			4,650,316			165,985			4,816,301			4,725,954			170,421			4,896,375
Deferred charges and other assets, net	a, c		325,400			(82,152	)		243,248			341,666			(68,212	)		273,454			245,655			(29,747	)		215,908
Deferred income tax assets	e		198,853			(17,950	)		180,903			450,164			(25,966	)		424,198			259,442			(20,036	)		239,406
Prepaid expenses			—						—			58,934						58,934			107,900			(39,144	)		68,756

Total non-current assets			5,980,428						6,047,447			5,909,778						5,981,585			5,743,722						5,825,216


Total Assets			7,142,189			67,019			7,209,208			7,161,413			71,807			7,233,220			7,045,161			81,494			7,126,655

Liabilities and equity
Current liabilities:
Current debt	g		216,957			118,842			335,799			54,064			133,473			187,537			152,108			45,514			197,622
Accounts payable			307,567						307,567			217,654						217,654			222,876						222,876
Due to affiliates and other related parties			9,790						9,790			1,352						1,352			4,495						4,495
Dividends payable			123,571						123,571			—						—			—						—
Other accounts payable and accrued expenses			354,670						354,670			623,240						623,240			597,768						597,768
Interest payable	g		118,842			(118,842	)		—			133,473			(133,473	)		—			45,514			(45,514	)		—


Total current liabilities			1,131,397						1,131,397			1,029,783						1,029,783			1,022,761						1,022,761

Non-current:
Non-current debt	c, g		2,781,357			(49,210	)		2,732,147			2,965,330			(42,693	)		2,922,637			2,759,665			(42,534	)		2,717,131
Provision			454,895						454,895			577,876						577,876			544,127						544,127
Employee benefits obligations	d		106,746			(26,506	)		80,240			111,070			(35,466	)		75,604			101,382			(27,144	)		74,238


Total non-current liabilities			3,342,998						3,267,282			3,654,276						3,576,117			3,405,174						3,335,496


Total Liabilities			4,474,395			(75,716	)		4,398,679			4,684,059			(78,159	)		4,605,900			4,427,935			(69,678	)		4,358,257

Equity:
Equity attributable to owners of the parent:
Common stock	a		1,394,971			(213,625	)		1,181,346			1,394,971			(213,625	)		1,181,346			1,394,971			(213,625	)		1,181,346
Retained earnings	a, d, e		1,272,865			356,360			1,629,225			1,082,392			363,591			1,445,983			1,222,297			364,797			1,587,094
Total shareholders’ equity			2,667,836			142,735			2,810,571			2,477,363			149,966			2,627,329			2,617,268			151,172			2,768,440
Non-controlling interest			(42	)					(42	)		(9	)					(9	)		(42	)					(42	)


Total Equity			2,667,794			142,735			2,810,529			2,477,354			149,966			2,627,320			2,617,226			151,172			2,768,398


Total Liabilities and Equity		Ps	7,142,189		Ps	67,019		Ps	7,209,208		Ps	7,161,413		Ps	71,807		Ps	7,233,220		Ps	7,045,161		Ps	81,494		Ps	7,126,655

F-35

ALESTRA, S. DE R. L. DE C. V. AND SUBSIDIARIES

Subsidiaries of Alfa S. A. B. de C. V.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amounts are expressed in thousands of adjusted nominal Mexican Pesos)

B)	Reconciliation of consolidated net income


		December 31, 2011									Three months ended September 30, 2011									Nine months ended September 30, 2011
	Note	MFRS			Adj			IFRS			MFRS			Adj			IFRS			MFRS			Adj			IFRS

Revenues		Ps	4,697,326					Ps	4,697,326		Ps	1,208,659					Ps	1,208,659		Ps	3,511,292					Ps	3,511,292
Cost of services			(1,492,696	)					(1,492,696	)		(376,425	)					(376,425	)		(1,090,272	)					(1,090,272	)

Gross profit before depreciation and amortization related to cost of services			3,204,630						3,204,630			832,234						832,234			2,421,020						2,421,020

Depreciation and amortization
And other expenses related to cost of services			(896,485	)					(896,485	)		(391,647	)					(391,647	)		(1,176,562	)					(1,176,562	)


Gross profit			2,308,145						2,308,145			440,587						440,587			1,244,458						1,244,458

Administrative, selling and other operating expenses	a, b, d		(1,761,992	)	Ps	17,661			(1,744,331	)		(236,624	)	Ps	5,201			(231,423	)		(687,440	)	Ps	11,058			(676,382	)
Other income/ (expense), net	f		(31,182	)					(31,182	)		(10,739	)					(10,739	)		(22,208	)					(22,208	)


Operating income			514,971						532,632			193,224						198,425			534,810						545,868

Finance income			9,007						9,007			2,596						2,596			5,827						5,827
Finance cost	g		(352,834	)		(1,474	)		(354,308	)		(90,171	)		(950	)		(91,121	)		(260,828	)		(534	)		(261,362	)
Exchange (loss) gain			(335,733	)					(335,733	)		(339,454	)					(339,454	)		(214,972	)					(214,972	)


Finance result, net			(679,560	)					(681,034	)		(427,029	)					(427,979	)		(469,973	)					(470,507	)

Share of (loss)/profit of associate			—						—			—			—			—			(59	)					(59	)


Profit before income tax			(164,589	)					(148,402	)		(233,805	)					(229,554	)		64,778						75,302
Income tax expense			78,996			(8,279	)		70,717			56,664			(1,037	)		55,627			(10,466	)		(2,087	)		(12,553	)


Profit (loss) for the period			(85,593	)		7,908			(77,685	)		(177,141	)		3,214			(173,927	)		54,312			8,437			62,749

Profit attributable to:
Owners of the parent		(Ps	85,560	)				(Ps	77,652	)	(Ps	177,140	)				(Ps	173,926	)	Ps	54,311					Ps	62,748
Non-controlling interest			33						33			(1	)					(1	)		1						1

F-36

ALESTRA, S. DE R. L. DE C. V. AND SUBSIDIARIES

Subsidiaries of Alfa S. A. B. de C. V.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amounts are expressed in thousands of adjusted nominal Mexican Pesos)

C)	Description of the effects from the transition to IFRS

a) Recognition of effects of inflation

In accordance with IAS 29, “Financial reporting in hyper-inflationary economies”, the effects of inflation in the financial information must be recognized for hyper-inflationary economies, when the accumulated inflation rate for the last three years exceeds 100%. Since the Company and its subsidiary are located in non-hyper-inflation economies, the effects of inflation recognized under MFRS from 1998 to 2007 were cancelled for the non-hyper-inflationary periods, except for “Property, plant and equipment” (due to the deemed cost exception of IFRS 1).

b) Fair value at deemed cost

Some asset classes of property, plant and equipment, specifically land and buildings were revalued at the date of transition to recognize that fair value as deemed cost. The Company engaged an independent accredited licensed valuer to perform the valuation of assets, and to determine its revalued amount, including accumulated depreciation.

Following are the previous book values and the fair values of the revalued assets:


	Previous book values		Fair Value		Adjustment

Land	Ps.	165,039	Ps.	291,719	Ps.	126,680
Buildings		119,294		159,735		40,441

Total	Ps.	284,333	Ps.	451,454	Ps.	167,121

c) Debt issuance costs

In accordance with IAS 39, “Financial instruments: recognition and measurement”, debt issuance costs are decreased from the book value of the financial liability, due to the fact that, at the date of transition, the Company reclassified the debt issuance costs from Intangible Assets to Non-current Debt in the amortized cost calculation.

d) Employee benefits

MFRS D-3, “Employee Benefits” establishes that termination benefits, including those that are paid in case of involuntary termination, are considered in actuarial calculations in order to estimate the corresponding liability. For IAS 19, an entity recognizes termination benefits as a liability only when the entity is required to (a) conclude the contract before the retirement date; or (b) establish termination benefits as a result of offers made to promote voluntary dismissal. Therefore, the Company cancelled the provision recognized at the date of transition.

In accordance with IFRS 1, “First-time adoption of International Financial Reporting Standards”, the Company recognized accumulated actuarial gains and losses within retained earnings at the date of transition.

e) Deferred taxes

IAS 12, Income tax, contains an exception for recognizing a deferred tax asset or liability for cumulative or deductible temporary differences that rise when recognizing an asset or liability for the first time in a transaction that is not a business combination and in its initial recognition, it does not affect the accounting gain nor the tax gain (loss). MFRS, does not include a similar exception to that shown in IAS 12, therefore, the Company recognized and adjustment that resulted in a deferred tax asset increase under IFRS.

F-37

ALESTRA, S. DE R. L. DE C. V. AND SUBSIDIARIES

Subsidiaries of Alfa S. A. B. de C. V.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amounts are expressed in thousands of adjusted nominal Mexican Pesos)

IAS 12, “Income taxes” requires that assets and liabilities from deferred taxes are presented net, only when referred to taxes from the same authority for the same subject, and when a legally recognized right is present to net assets and liabilities for current taxes. The Company reclassified at the date of transition the amounts of deferred taxes not subject to netting.

Additionally, the Company adjusted deferred taxes according to IAS 12, using the book values of assets and liabilities recognized under IFRS.

f) IFRS reclassifications

In accordance with the adoption of IFRS, the Company made certain reclassifications in order to present its figures in a manner which complies with the new presentation rules such as having the “Other income (expense), net” line in operating income.

g) Effective interest rate

In accordance with IFRS, financial liabilities are initially recognized at fair value and subsequently measured at amortized cost, using the effective interest rate method, which is based on the discount rate that equates to the cash flows estimated to pay over the expected life of the debt. At the transition date, the Company adjusted the value of its bank debt at amortized cost.

D)	Description of significant effects from the transition to IFRS in the consolidated cash flow statement for the year ended December 31, 2011

The Company uses the indirect method for presenting the cash flow statement, which does not differ significantly in its presentation under IFRS from its presentation under MFRS.

Note 11 - Subsequent events

On October 10, 2012, Alestra resolved an interconnection rate dispute with Iusacell, S. A. de C. V. (“Iusacell”) with respect to the 2011 rates. This will result in a reduction in the cost of services and the reversal of the related provision accrued as of September 30, 2012.

F-38

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.

Alestra, S. de R.L. de C.V.

/s/ Bernardo García Reynoso

Bernardo García Reynoso

Chief Financial and Administrative Officer

Date: ~~August 30~~November 29, 2012

Filing Compare · ALESTRA