Provided by MZ Data Products

FORM 6-K

Securities and Exchange Commission
Washington, D.C. 20549
Report of Foreign Issuer
Pursuant To Rule 13a-16 Or 15d-16
Of The
Securities Exchange Act of 1934


For the month of February 2006 Commission file number 1-12260


COCA-COLA FEMSA, S.A. de C.V.
(Translation of Registrant’s name into English)


Guillermo González Camarena No. 600
Col. Centro de Ciudad Santa Fé
Delegación Alvaro Obregón
Mexico, D.F. 01210
(Address of principal office)


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

             (Check One) Form 20-F  x  Form 40-F    

        (Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.)

             (Check One) Yes    No  x 

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

Stock Listing Information   2005
Mexican Stock Exchange FOURTH-QUARTER AND FULL-YEAR RESULTS
Ticker: KOFL
      Fourth quarter   Full Year  
   
 
 
NYSE (ADR)   2005  2004  D %  2005  2004  D % 
 
Ticker: KOF Total Revenues 13,107  12,733  2.9%  50,198  47,786  5.0% 
 
  Gross Profit 6,496  6,293  3.2%  24,713  23,435  5.5% 
 
  Operating Income 2,450  2,344  4.5%  8,684  7,987  8.7% 
 
Ratio of KOF L to KOF = 10:1 Majority Net Income 1,428  1,453  -1.7%  4,586  5,580  -17.8% 
 
  EBITDA(1) 3,158  2,964  6.5%  11,210  10,395  7.8% 
 
 
   
 		  
Net Debt (2) 18,144  22,083    18,144  22,083   
 
 
 
 
  EBITDA (1) / Interest Expense 5.11  4.24    4.57  3.96   
 
 
 
  Earnings per Share 0.77  0.79    2.48  3.02   
 
 
 
Average Shares Outstanding 1,846.5  1,846.5    1,846.5  1,846.5   
Expressed in million of Mexican pesos with purchasing power as of December 31, 2005, except for per share amount.
  (1) EBITDA = Operating income + Depreciation + Amortization & Other Non-cash Charges. See reconciliation table on page 11.
  (2) Net Debt = Total Debt - Cash
 
 
    Total revenues increased 2.9% to Ps. 13,107 million in the fourth quarter of 2005.
For Further Information:

Investor Relations

Alfredo Fernández
alfredo.fernandez@kof.com.mx
(5255) 5081-5120 / 5121

Julieta Naranjo
julieta.naranjo@kof.com.mx
(5255) 5081-5148

Oscar Garcia
oscar.garcia@kof.com.mx
(5255) 5081-5186

Website:
www.coca-colafemsa.com
    Consolidated operating income grew 4.5% to Ps. 2,450 million, an operating margin increase of 30 basis points to 18.7% in the fourth quarter of 2005.
    Consolidated majority net income decreased 1.7% to Ps. 1,428 million, driven by a one-time tax benefit in 2004, resulting in earnings per share of Ps. 0.77 for the fourth quarter of 2005. Excluding the effect of this one time tax benefit majority net income would have increased by 12.0% .
 
 
Mexico City (February 24, 2006), Coca-Cola FEMSA, S.A. de C.V. (BMV: KOFL, NYSE: KOF) (“Coca-Cola FEMSA” or the “Company”), the largest Coca-Cola bottler in Latin America and the second-largest Coca-Cola bottler in the world in terms of sales volume, announces results for the fourth quarter and full year 2005.
 
“This year we produced strong results, despite high raw material costs across most of our operations. We were able to tailor our portfolio of products and packages, as well as our business processes, to take advantage of the positive macroeconomic environment in the majority of our markets. Today, more than ever, we believe that our geographic diversification, along with our initial incursion into other beverage categories, offers a variety of opportunities for us to create value. We believe that our balanced market position—among countries with different industry cycles and seasons—will continue to help us to generate even stronger and more stable cash flow,” said Carlos Salazar, Chief Executive Officer of the Company.

February 24, 2006 Page 1 

Consolidated Results
CONSOLIDATED RESULTS

Our consolidated revenues increased 2.9% to Ps. 13,107 million in the fourth quarter of 2005 as a result of increases in the majority of our territories. Over 90% of our revenues growth came from Mexico and Brazil. Consolidated average price per unit case remained stable in the fourth quarter of 2005 as compared to the same period of the previous year, at Ps. 26.40 (US$ 2.48) .

Total sales volume increased 2.8% to 492.6 million unit cases in the fourth quarter of 2005 as compared to the same period of 2004. Sales volume growth in Mexico and Brazil more than compensated for volume decline in Venezuela and Central America. Carbonated soft drinks (“CSD”) sales volume grew 2.1% to 423.9 million unit cases, driven by incremental volume in the majority of our operations, with the exception of Central America and Venezuela.

Our gross profit rose 3.2% to Ps. 6,496 million in the fourth quarter of 2005, as compared with the same period of 2004; Mexico and Brazil represented the majority of our growth. Gross margin increased 20 basis points to 49.6% in the fourth quarter of 2005 from 49.4% in the same period of 2004, mainly driven by a decline in our sweetener costs in Mexico and the appreciation of the Mexican peso and the Brazilian real applied to our U.S. dollar denominated costs.

Our consolidated operating income grew 4.5% to Ps. 2,450 million in the fourth quarter of 2005, driven by operating income growth in the majority of our territories, which more than offset declines in Venezuela. Our operating margin increased 30 basis points to 18.7% in the fourth quarter of 2005 as compared with the same period of 2004.

During the fourth quarter of 2005, our integral cost of financing increased to Ps. 189 million from Ps. 86 million in the same period of 2004, reflecting a lower monetary gain driven by a decline in the inflation rate applied to our reduced monetary position, which more than offset lower interest expenses as a result of a reduction in our debt levels.

During the fourth quarter of 2005, income tax, tax on assets and employee profit sharing as a percentage of income before taxes were 33.6%, an increase of 220 basis points compared with the same period of the previous year. The effective tax rate in 2004 was positively affected by a one-time benefit in Mexico during the fourth quarter of 2004 in the amount of Ps. 178 million due to a reduction in deferred tax liabilities driven by a decline in Mexican income tax rate going forward.

Our consolidated majority net income was Ps. 1,428 million in the fourth quarter of 2005, a decline of 1.7% compared to the same period of 2004 due to the above mentioned tax benefit during 2004. Earnings per share (“EPS”) were Ps. 0.77 (US$ 0.73 per ADR) computed on the basis of 1,846.5 million shares outstanding (each ADR represents 10 local shares). Excluding the above mentioned one-time tax benefit during 2004, net income would have increased by 12.0% .

 

February 24, 2006 Page 2 

Balance Sheet and Consolidated Statement of Changes in Financial Position
BALANCE SHEET

As of December 31, 2005, Coca-Cola FEMSA had a cash balance of Ps. 1,958 million (US$ 184 million), a decrease of Ps. 1,824 million (US$ 172 million) compared with December 31, 2004, as a result of cash used to reduce debt levels.

Total short-term debt was Ps. 4,429 million (US$ 417 million) and long-term debt was Ps. 15,673 million (US$ 1,475 million). During 2005, the effective net debt reduction was Ps. 2,731 million (US$ 257 million). Gross debt payments amounted to Ps. 4,555 million (US$ 429 million), and our cash balance was reduced by Ps. 1,824 million (US$ 172 million).

The weighted average cost of debt for the fourth quarter was 8.57%, the following chart sets forth the Company’s debt profile by currency and interest rate type as of December 31, 2005:

 
Currency    % Total Debt(2)   % Interest Rate 
        Floating(2)
 
U.S. dollars    33%    9% 
Mexican pesos    56%    0% 
Colombian pesos    8%    23% 
Other (1)   3%    28% 
 
(1)     
Includes the equivalent to US$ 36.3 million denominated in Venezuelan bolivars, US$ 25.8 million denominated in Argentine pesos and US$ 2.2 million denominated in Guatemalan quetzales.
(2)     
After giving effect to cross-currency swaps.

Consolidated Statement of Changes in Financial Position
Expressed in million of Mexican pesos and U.S. dollars as of December 31, 2005

   
    Jan - Dec. 2005 
    Ps.    USD
   
Net income    4,704    443 
Non cash charges to net income    2,447    230 
   
    7,151    673 
   
Change in working capital    (414)    (39)
   
NRGOA(1)   6,737    634 
   
Total investments    (2,064)   (194)
Dividend payments    (636)    (60)
Debt payment    (4,555)   (429)
Other financial transactions    (1,306)   (123)
   
Increase in cash and cash equivalents    (1,824)   (172)
   
Cash and cash equivalents at begining of period    3,782    356 
Cash and cash equivalents at end of period    1,958    184 
 
(1) Net Resources Generated by Operating Activities

 

February 24, 2006 Page 3  

Mexican Operating Results
MEXICAN OPERATING RESULTS

Revenues

Total revenues from our Mexican territories increased 3.5% to Ps. 7,241 million in the fourth quarter of 2005, as compared with the same period of the previous year. Sales volume growth represented the majority of the incremental revenues. Average price per unit case grew 0.7% to Ps. 28.00 (US$ 2.63) during the fourth quarter of 2005. Higher average prices resulted from incremental volumes from the Coca-Cola brand and from single serve presentations, which carry a higher price per unit case. Our single serve presentations represented over 55% of the incremental volumes excluding jug water. Excluding Ciel water volume in 5.0, 19.0 and 20.0 -liter packaging presentations, our average price per unit case was Ps. 32.01 (US$ 3.01) an increase of 1.0% in the fourth quarter of 2005, as compared to the same period of 2004.

Total sales volume increased 3.3% to 256.4 million unit cases in the fourth quarter of 2005, as compared with the fourth quarter of 2004. The increase in carbonated soft drinks sales volume and the non-carbonated beverage segment, including single-serve bottled water, represented around 80% of our incremental volume; the balance was mainly comprised of incremental jug water sales volume. Carbonated soft drinks sales volume grew 2.7% compared with the same period of the previous year, the Coca-Cola brand represented over 70% of this incremental sales volume. Excluding non-flavored bottled water, the non-carbonated beverage segment grew 47.6% in the fourth quarter of 2005 from a low base of comparison in 2004, as a result of volume growth of Ciel Aquarius and the Minute Maid brands.

Operating Income

Our gross profit grew 3.9% to Ps. 3,885 million in the fourth quarter of 2005, as compared with the same period of 2004, resulting in a 30 basis-point increase of our gross margin to 53.7% . Higher polyethylene terephtalate (“PET”) resin costs in U.S. dollars were offset by a reduction in our sweetener costs, as a result of lower sugar prices and the usage of high fructose corn syrup, and the appreciation of the Mexican peso year over year as applied to our U.S. dollar-denominated costs.

Operating expenses as a percentage of total revenues increased 40 basis points to 31.4% in the fourth quarter of 2005, from 31.0% in the same period of 2004, as a result of an increase in depreciation expenses driven by breakage expenses of returnable bottles and an increase in expenses in connection to our “go to market” and “market multi-segmentation” strategies. Operating income increased 2.6% to Ps. 1,610 million in the fourth quarter of 2005, resulting in a slight margin decline of 20 basis points to 22.2% in the quarter.

 

February 24, 2006 Page 4  

Central American and Colombian Operating Results
CENTRAL AMERICAN OPERATING RESULTS (Guatemala, Nicaragua, Costa Rica and Panama)

Revenues

Net revenues declined 5.6% to Ps. 870 million in the fourth quarter of 2005, as compared with the same period of the previous year, mainly driven by declines in sales volume in Guatemala and Nicaragua. Average price per unit case decreased 0.9% to Ps. 30.65 (US$ 2.88), mainly as a result of a more competitive environment in the majority of our territories. Total revenues declined 1.4% to Ps. 910 million in the fourth quarter of 2005, as compared with the same period of the previous year despite a the one-time other operating revenues in the amount of Ps. 40 million. This one-time other operating revenues resulted from corporate services provided by our Latincentro division to the region during the year, and accounted for during the fourth quarter of 2005. Going forward revenues from these corporate services will be accounted for in each quarter.

Total sales volume in our Central American territories declined 4.7% to 28.4 million unit cases in the fourth quarter of 2005, as compared with the same period of 2004. Volume decline came from a 5.4% decrease in carbonated soft drinks due to difficult weather and operating conditions in connection with hurricanes in some of our Central American territories in October, and a tougher competitive environment in the majority of our territories.

Operating Income

Excluding the one-time other operating revenues mentioned above, our gross profit would have decreased 14.1% in the fourth quarter of 2005, resulting in a margin reduction of 450 basis points as compared to the fourth quarter of the previous year. This decrease was mainly driven by (i) a revenues decrease, driven by lower average prices per unit case and a reduction in sales volume, (ii) higher PET resin prices and (iii) a packaging mix shift towards non-returnable presentations, which represented 57.6% of our total sales volume in the fourth quarter of 2005 as compared to 51.4% in the same period of 2004.

Our operating expenses in absolute terms declined by 15.4% in the fourth quarter of 2005 as compared to the same period of 2004, as a result of lower marketing expenses and savings achieved through cost reduction efforts across the region. Excluding the one-time other operating revenues mentioned above, our operating income would have decreased 11.1% in the quarter, resulting in an operating income margin of 13.2%, a decline of 140 basis points, as compared with the same period of previous year.

COLOMBIAN OPERATING RESULTS

Revenues

Total revenues increased 3.1% to Ps. 1,256 million in the fourth quarter of 2005, as compared with the fourth quarter of 2004, driven by sales volume growth. Average price per unit case decreased 2.8% to Ps. 26.27 (US$ 2.47); price increases implemented during the third quarter partly compensated for last twelve months inflation.

Total sales volume grew 6.0% in the fourth quarter of 2005, as compared with the same period of 2004, to 47.8 million unit cases in the fourth quarter of 2005. Carbonated soft drinks sales volume grew 6.8%, mainly driven by the Crush brand, which represented more than 10% of our total sales volume in the quarter.

Operating Income

Gross profit decreased 2.0% to Ps. 583 million in the fourth quarter of 2005, as compared with the same period of the previous year, resulting in a gross margin of 46.4% . The gross margin decline of 250 basis points resulted from the combined effect of higher sugar prices and higher cost per unit case due to a packaging mix shift towards non-returnable presentations that accounted for 51.8% of our total sales in the fourth quarter of 2005, compared with 47.3% in the same period of the previous year.

Our operating expenses decreased 8.1%, and as a percentage of total sales declined 390 basis points to 32.3%, in the fourth quarter of 2005, driven by a reduction in freight costs and lower breakage expenses. Our operating income increased 15.7% to Ps. 177 million, resulting in a margin expansion of 160 basis points from 12.5% in the fourth quarter of 2004 to 14.1% in the same period of 2005.

 

February 24, 2006 Page 5  

Venezuelan and Argentine Operating Results
VENEZUELAN OPERATING RESULTS

Revenues

Revenues from our Venezuelan operations declined 5.2% to Ps. 1,265 million in the fourth quarter of 2005, as compared with the same period of 2004. This decline was driven by lower sales volume, which more than offset a higher average price per unit case. Our average price per unit case increased 2.1% to Ps. 29.62 (US$ 2.79) as a result of price increases implemented during the year.

Total sales volume decreased 7.4% to 42.6 million unit cases during the fourth quarter of 2005, as compared with the same quarter of 2004, driven by carbonated soft drinks volume decline in the Coca-Cola brand and the value protection brand Grapette.

Operating Income

Gross profit decreased 14.7% to Ps. 500 million in the fourth quarter of 2005, as compared with the same period of the previous year. As a percentage of sales, our gross margin decreased to 39.5% in the fourth quarter of 2005 from 43.9% in the same period of 2004. This decline was a result of lower revenues, higher raw material prices and a shift in packaging mix towards non-returnable presentations, which grew as a percentage of our total sales volume to 74.1% from 70.7% in the fourth quarter of 2004.

Operating expenses increased 5.9% to Ps. 449 million in the fourth quarter of 2005, driven by salary increases implemented during the last twelve months and higher maintenance expenses. Operating income was Ps. 51 million during the fourth quarter of 2005, resulting in an operating margin of 4.0%, driven by the above mentioned revenues decline and cost and operating expenses increases.

ARGENTINE OPERATING RESULTS

Revenues

In the fourth quarter of 2005, our total revenues increased by 7.6% to Ps. 834 million, as compared with the same period of 2004. Average price per unit case increased 2.1% to Ps. 18.07 (US$ 1.70), as a result of (i) incremental volume in single serve presentations, (ii) incremental volume in our carbonated soft drink premium and core segments, and (iii) price increases implemented during the quarter.

Total volume increased by 6.7% to 44.6 million unit cases, mainly driven by sales volume increase from the Coca-Cola brand and our non-carbonated beverage segment. Carbonated soft drinks increased 5.6% driven by the Coca-Cola brand and our core and premium flavored carbonated soft drinks, which more than offset volume decline of our value protection brands. Non-carbonated beverages and bottled water posted strong volume growth of 71%, driven by the brands Cepita, Kin and the recently introduced mineralized and functional waters under the Dasani brand.

Operating Income

Our gross profit increased 11.7% to Ps. 335 million, as compared with the fourth quarter of 2004. Gross margin was 40.1%, a margin expansion of 140 basis points, mainly as a result of higher revenues.

Operating expenses increased 12.2% due to higher freight costs and salaries in the fourth quarter of 2005 as compared to the same period of 2004. Despite the increase in operating expenses, operating income grew 10.8% to Ps. 133 million, as compared with the same period of 2004, resulting in an operating margin expansion of 40 basis points to 15.9% .

 

February 24, 2006 Page 6  

Brazilian Operating Results
BRAZILIAN OPERATING RESULTS

Beginning with the second quarter of 2005, we do not include beer that we distribute in Brazil in our sales volumes and net sales. Instead, the amount we receive for distributing beer in Brazil is included in other revenues. We have reclassified prior periods presented in this press release for comparability purposes.

Revenues

Our total revenues improved by 6.6% to Ps. 1,678 million in the fourth quarter of 2005, as compared with the same period of 2004, driven by sales volume growth. Average price per unit case declined slightly to Ps. 22.40 (US$ 2.11) during the fourth quarter of 2005, mainly driven by a packaging shift mix towards returnable presentations, which carry a lower price per unit case.

Total sales volume increased 6.9% to 72.8 million unit cases in the fourth quarter of 2005. The increase included 5.0% growth in carbonated soft drinks, mainly driven by the Coca-Cola brand, accounting for over 85% of incremental volume during the quarter. Our non-carbonated beverage segment sales volume grew 33.3%, which increased as a percentage of our total sales volume to 8.2% from 6.6% in the fourth quarter of 2004.

Operating Income

In the fourth quarter of 2005, our gross profit increased 18.0% to Ps. 793 million, as compared with the same period of the previous year. Improvements in manufacturing efficiencies and the appreciation of the Brazilian real year over year as applied to our U.S. dollar-denominated costs, more than offset increases in raw material costs. Gross margin rose from 42.7% to 47.2%, a margin expansion of 450 basis points in the fourth quarter of 2005, as compared to the same period of 2004.

Our operating expenses as a percentage of total revenues increased 20 basis points in the fourth quarter of 2005 as compared to the same period of 2004 to 29.9% due to higher freight costs. Operating income was Ps. 290 million in the fourth quarter of 2005, an increase of 41.5% . Operating margin rose to 17.3% in the fourth quarter of 2005, as compared to the same period of 2004, resulting in a margin expansion of 430 basis points.

 

February 24, 2006 Page 7  

Summary of Full-Year Results and Recent Developments
SUMMARY OF FULL-YEAR RESULTS

During 2005, our consolidated revenues increased 5.0% to Ps. 50,198 million, as compared with 2004, as a result of growth in all of our territories, with the exception of Central America. Consolidated average price per unit case increased 0.8% to Ps. 26.38 (US$ 2.48) during 2005, as a result of average price increases in all our territories with the exception of Central America.

Total sales volume increased 4.3% to 1,889.2 million unit cases during 2005, as compared with the same period of the previous year. Sales volume growth in Mexico and Brazil accounted for over 75% of our incremental volume. Carbonated soft drink sales volume grew 3.6% to 1,600.8 million unit cases, driven by incremental volume across all of our territories except for Central America.

Our gross profit increased 5.4% to Ps. 24,712 million in 2005, as compared with the previous year, driven by gross profit growth across all of our territories except Central America. Over 90% of this increase came from Brazil and Mexico. Gross margin increased to 49.2% during 2005 from 49.0% in 2004, driven by higher revenues in all of our territories except Central America.

Our consolidated operating income increased 8.7% to Ps. 8,683 million in 2005, as compared with 2004. Brazil and Mexico accounted for the majority of our growth. Our operating margin improved 60 basis points to 17.3% during 2005, mainly driven by revenues increases and lower costs as a percentage of total revenues.

Our consolidated majority net income was Ps. 4,586 million during 2005, a decrease of 17.8% compared to 2004, driven by two one-time effect that increased net income during 20041,2 and a one-time effect that decreased net income in the first quarter of 20053. EPS were Ps. 2.48 (US$ 2.33 per ADR) computed on the basis of 1,846.5 million shares outstanding (each ADR represents 10 local shares). Excluding the above-mentioned effects of non-recurring items, majority net income would have grown by 13.8% .

RECENT DEVELOPMENTS

 

________________________________________
1 During the second quarter of 2004, we obtained a tax reimbursement in connection with a deduction of losses arising from a sale of shares during 2002 in the amount of Ps. 1,355 million; additionally there was a charge to income in the amount of Ps. 89 million related to interests and adjustments resulting from a change in the tax deduction criteria on coolers in Mexico. The net effect of these two transactions was Ps. 1,266 million in 2004.
2 During the fourth quarter of 2004, we obtained a one-time benefit in the amount of Ps. 178 million due to a reduction in deferred tax liabilities driven by a decline in the Mexican income tax rate going forward.
3 As disclosed in the first quarter of 2005, the Mexican tax authorities reviewed payments we made in connection with the change in criteria that requires refrigerators to be treated as fixed assets with finite useful lives, which resulted in an additional one-time payment in Mexico in the amount of Ps. 121 million.

 

February 24, 2006 Page 8  

Conference Call Information and Disclaimer
CONFERENCE CALL INFORMATION

Our fourth-quarter 2005 Conference Call will be held on: February 24, 2006, 11:00 A.M. Eastern Time (10:00 A.M. Mexico City Time). To participate in the conference call, please dial: Domestic U.S.: 800-561-2601 and International: 617-614-3518. We invite investors to listen to the live audiocast of the conference call on the Company’s website, www.coca-colafemsa.com

If you are unable to participate live, an instant replay of the conference call will be available through March 3, 2006. To listen to the replay, please dial: Domestic U.S.: 888-286-8010 or International: 617-801-6888. Pass code: 98344233.

 

 

Coca-Cola FEMSA, S.A. de C.V. produces and distributes Coca-Cola, Sprite, Fanta, Lift and other trademark beverages of The Coca-Cola Company in Mexico (a substantial part of central Mexico, including Mexico City and southeast Mexico), Guatemala (Guatemala City and surrounding areas), Nicaragua (nationwide), Costa Rica (nationwide), Panama (nationwide), Colombia (most of the country), Venezuela (nationwide), Brazil (greater São Paulo, Campiñas, Santos, the state of Mato Grosso do Sul and part of the state of Goias) and Argentina (federal capital of Buenos Aires and surrounding areas), along with bottled water, beer and other beverages in some of these territories. The Company has 30 bottling facilities in Latin America and serves approximately 1,500,000 retailers in the region. The Coca-Cola Company owns a 39.6% equity interest in Coca-Cola FEMSA.

Figures for the Company’s operations in Mexico and its consolidated international operations were prepared in accordance with Mexican generally accepted accounting principles (Mexican GAAP). All figures are expressed in constant Mexican pesos with purchasing power at December 31, 2005. For comparison purposes, 2004 and 2005 figures from the Company’s operations have been restated taking into account local inflation of each country with reference to the consumer price index and converted from local currency into Mexican pesos using the exchange rate at the end of the period. In addition, all comparisons in this report for the fourth quarter of 2005, which ended on December 31, 2005, are made against the figures for the comparable period in 2004, unless otherwise noted.

This news release may contain forward-looking statements concerning Coca-Cola FEMSA’s future performance and should be considered as good faith estimates by Coca-Cola FEMSA. These forward-looking statements reflect management’s expectations and are based upon currently available data. Actual results are subject to future events and uncertainties, many of which are outside Coca-Cola FEMSA’s control, that could materially impact the Company’s actual performance.

References herein to “US$” are to United States dollars. This news release contains translations of certain Mexican peso amounts into U.S. dollars for the convenience of the reader. These translations should not be construed as representations that Mexican peso amounts actually represent such U.S. dollar amounts or could be converted into U.S. dollars at the rate indicated.

U.S. dollar amounts have been translated from Mexican pesos at the noon day buying rate for pesos as published by the Federal Reserve Bank of New York at December 31, 2005, which exchange rate was Ps. 10.6275 to $1.00.

(7 pages of tables to follow)

 

February 24, 2006 Page 9  

Consolidated Balance Sheet
Consolidated Balance Sheet
Expressed in million of Mexican pesos with purchasing power as of December 31, 2005

 
Assets        Dec 05        Dec 04 
 
Current Assets                 
Cash and cash equivalents    Ps.    1,958    Ps.    3,782 
Total accounts receivable        2,523        2,220 
Inventories        2,168        2,301 
Prepaid expenses and other        772        875 
 
Total current assets        7,421        9,178 
 
Property, plant and equipment                 
Property, plant and equipment        31,397        31,749 
Accumulated depreciation        -13,889        -13,170 
Bottles and cases        1,047        1,075 
 
Total property, plant and equipment, net        18,555        19,654 
 
Investment in shares and other        476        444 
Deferred charges, net        1,221        1,503 
Intangibles        39,474        38,839 
 
Total Assets    Ps.    67,147    Ps.    69,618 
 
 
 
 
Liabilities and Stockholders' Equity        Dec 05        Dec 04 
 
Current Liabilities                 
Short-term bank loans and notes    Ps.    4,429    Ps.    3,390 
Interest payable        326        324 
Suppliers        4,615        4,294 
Other current liabilities        2,729        3,149 
 
Total Current Liabilities        12,099        11,157 
 
Long-term bank loans        15,673        22,475 
Pension plan and seniority premium        779        669 
Other liabilities        3,868        4,162 
 
Total Liabilities        32,419        38,463 
 
Stockholders' Equity                 
Minority interest        959        740 
Majority interest:                 
Capital stock        2,886        2,886 
Additional paid in capital        12,349        12,349 
Retained earnings of prior years        17,338        12,394 
Net income for the period        4,586        5,580 
Cumulative results of holding non-monetary assets        -3,390        -2,794 
 
Total majority interest        33,769        30,415 
 
Total stockholders' equity        34,728        31,155 
 
Total Liabilities and Equity    Ps.    67,147    Ps.    69,618 
 


February 24, 2006 Page 10  

Consolidated Income Statement

Consolidated Income Statement
Expressed in million of Mexican pesos(1) with purchasing power as of December 31, 2005

                 
    4Q 05    4Q 04    YTD 05    YTD 04 
                 
Sales Volume (million unit cases)   492.6    479.0    1,889.2    1,812.1 
Average price per unit case    26.40    26.38    26.38    26.18 
                 
Net revenues    13,005    12,635    49,840    47,442 
Other operating revenues    102    98    358    344 
                 
Total revenues    13,107    12,733    50,198    47,786 
Cost of sales    6,611    6,440    25,486    24,351 
                 
Gross profit    6,496    6,293    24,712    23,435 
                 
Operating expenses    4,046    3,949    16,029    15,448 
                 
Operating income    2,450    2,344    8,683    7,987 
                 
     Interest expense    618    699    2,452    2,622 
     Interest income    60    8    280    288 
     Interest expense, net    558    691    2,172    2,334 
     Foreign exchange loss (gain)   18    (71)   (222)   37 
     Loss (gain) on monetary position    (387)   (534)   (813)   (1,537)
                 
Integral cost of financing    189    86    1,137    834 
Other (income) expenses, net    (19)   124    281    408 
                 
Income before taxes    2,280    2,134    7,265    6,745 
Taxes    766    671    2,562    1,142 
                 
Consolidated net income    1,514    1,463    4,703    5,603 
                 
Majority net income    1,428    1,453    4,586    5,580 
                 
Minority net income    86    10    117    23 
                 
Operating income    2,450    2,344    8,683    7,987 
Depreciation    349    318    1,308    1,284 
Amortization and Other non-cash charges (2)   359    302    1,219    1,124 
                 
EBITDA (3)   3,158    2,964    11,210    10,395 
                 

(1)      Except volume and average price per unit case figures.
(2)      Includes returnable bottel breakage expense.
(3)      EBITDA = Operating Income + Depreciation +Amortization & Other non-cash charges.
 


February 24, 2006 Page 11 

Mexican and Central American operations
Mexican operations
Expressed in million of Mexican pesos(1) with purchasing power as of December 31, 2005

 
    4Q 05    % Rev    4Q 04    % Rev    YTD 05   % Rev    YTD 04   % Rev 
                         
Sales Volume (million unit cases)   256.4        248.2        1,025.0        989.9     
Average price per unit case    28.00        27.81        27.77        27.72     
                 
Net revenues    7,180        6,902        28,464        27,440     
Other operating revenues    61        97        242        207     
                         
Total revenues    7,241    100.0%    6,999    100.0%    28,706    100.0%    27,647    100.0% 
Cost of sales    3,356    46.3%    3,261    46.6%    13,396    46.7%    13,037    47.2% 
                         
Gross profit    3,885    53.7%    3,738    53.4%    15,310    53.3%    14,610    52.8% 
                         
Operating expenses    2,275    31.4%    2,169    31.0%    9,187    32.0%    8,803    31.8% 
                         
Operating income    1,610    22.2%    1,569    22.4%    6,123    21.3%    5,807    21.0% 
Depreciation, Amortization & Other non-cash charges (2)   457    6.3%    356    5.1%    1,530    5.3%    1,371    5.0% 
                         
EBITDA (3)   2,067    28.5%    1,925    27.5%    7,653    26.7%    7,178    26.0% 
 

(1)      Except volume and average price per unit case figures.
(2)      Includes returnable bottle breakage expense.
(3)      EBITDA = Operating Income + Depreciation + Amortization & Other non-cash charges.
 


Central American operations
Expressed in million of Mexican pesos(1) with purchasing power as of December 31, 2005

 
    4Q 05    % Rev    4Q 04    % Rev    YTD 05   % Rev    YTD 04   % Rev 
                         
Sales Volume (million unit cases)   28.4        29.8        109.4        110.6     
Average price per unit case    30.65        30.94        30.95        31.74     
                 
Net revenues    870        922        3,385        3,510     
Other operating revenues    40        1        43        5     
                         
Total revenues    910    100.0%    923    100.0%    3,428    100.0%    3,515    100.0% 
Cost of sales    469    51.6%    456    49.4%    1,785    52.1%    1,820    51.8% 
                         
Gross profit    441    48.4%    467    50.6%    1,643    47.9%    1,695    48.2% 
                         
Operating expenses    281    30.9%    332    35.9%    1,175    34.3%    1,274    36.3% 
                         
Operating income    160    17.6%    135    14.6%    468    13.6%    421    12.0% 
Depreciation, Amortization & Other non-cash charges (2)   40    4.4%    64    6.9%    202    5.9%    247    7.0% 
                         
EBITDA (3)   200    22.0%    199    21.6%    670    19.5%    668    19.0% 
 

(1)      Except volume and average price per unit case figures.
(2)      Includes returnable bottle breakage expense.
(3)      EBITDA = Operating Income + Depreciation + Amortization & Other non-cash charges.
 


February 24, 2006 Page 12 

Colombian and Venezuelan operations
Colombian operations
Expressed in million of Mexican pesos(1) with purchasing power as of December 31, 2005

 
    4Q 05    % Rev    4Q 04    % Rev    YTD 05   % Rev    YTD 04   % Rev 
                         
Sales Volume (million unit cases)   47.8        45.1        179.7        167.1     
Average price per unit case    26.27        27.02        26.14        25.70     
                 
Net revenues    1,256        1,218        4,697        4,294     
Other operating revenues       -           -        -        -     
                         
Total revenues    1,256    100.0%    1,218    100.0%    4,697    100.0%    4,294    100.0% 
Cost of sales    673    53.6%    623    51.1%    2,578    54.9%    2,299    53.5% 
                         
Gross profit    583    46.4%    595    48.9%    2,119    45.1%    1,995    46.5% 
                         
Operating expenses    406    32.3%    442    36.2%    1,587    33.8%    1,538    35.8% 
                         
Operating income    177    14.1%    153    12.5%    532    11.3%    457    10.7% 
Depreciation, Amortization & Other non-cash charges (2)   67    5.3%    80    6.6%    276    5.9%    315    7.3% 
                         
EBITDA (3)   243    19.4%    233    19.1%    808    17.2%    772    18.0% 
 

(1)      Except volume and average price per unit case figures.
(2)      Includes returnable bottle breakage expense.
(3)      EBITDA = Operating Income + Depreciation + Amortization & Other non-cash charges.
 

 

Venezuelan operations
Expressed in million of Mexican pesos(1) with purchasing power as of December 31, 2005

 
    4Q 05    % Rev    4Q 04    % Rev    YTD 05   % Rev    YTD 04   % Rev 
                         
Sales Volume (million unit cases)   42.6        46.0        172.5        172.7     
Average price per unit case    29.62        29.00        28.59        27.10     
                 
Net revenues    1,262        1,334        4,933        4,680     
Other operating revenues    3        1        13        4     
                         
Total revenues    1,265    100.0%    1,335    100.0%    4,946    100.0%    4,684    100.0% 
Cost of sales    765    60.5%    749    56.1%    2,952    59.7%    2,722    58.1% 
                         
Gross profit    500    39.5%    586    43.9%    1,994    40.3%    1,962    41.9% 
                         
Operating expenses    449    35.5%    424    31.8%    1,761    35.6%    1,594    34.0% 
                         
Operating income    51    4.0%    162    12.1%    233    4.7%    368    7.8% 
Depreciation, Amortization & Other non-cash charges (2)   61    4.8%    53    4.0%    242    4.9%    224    4.8% 
                         
EBITDA (3)   111    8.8%    215    16.1%    475    9.6%    592    12.6% 
 

(1)      Except volume and average price per unit case figures.
(2)      Includes returnable bottle breakage expense.
(3)      EBITDA = Operating Income + Depreciation + Amortization & Other non-cash charges.
 


February 24, 2006 Page 13 

Argentine and Brazilian operations
Argentine operations
Expressed in million of Mexican pesos(1) with purchasing power as of December 31, 2005

 
    4Q 05    % Rev    4Q 04    % Rev    YTD 05   % Rev    YTD 04   % Rev 
                         
Sales Volume (million unit cases)   44.6        41.8        150.1        144.3     
Average price per unit case    18.07        17.69        17.97        17.28     
                 
Net revenues    806        739        2,697        2,494     
Other operating revenues    28        36        101        122     
                         
Total revenues    834    100.0%    775    100.0%    2,798    100.0%    2,616    100.0% 
Cost of sales    499    59.9%    475    61.3%    1,699    60.7%    1,593    60.9% 
                         
Gross profit    335    40.1%    300    38.7%    1,099    39.3%    1,023    39.1% 
                         
Operating expenses    202    24.2%    180    23.2%    677    24.2%    615    23.5% 
                         
Operating income    133    15.9%    120    15.5%    422    15.1%    408    15.6% 
Depreciation, Amortization & Other non-cash charges (2)   35    4.2%    37    4.8%    131    4.7%    134    5.1% 
                         
EBITDA (3)   168    20.1%    157    20.3%    553    19.8%    542    20.7% 
 

(1)      Except volume and average price per unit case figures.
(2)      Includes returnable bottle breakage expense.
(3)      EBITDA = Operating Income + Depreciation + Amortization & Other non-cash charges.
 

 

Brazilian operations
Expressed in million of Mexican pesos(1) with purchasing power as of December 31, 2005

 
    4Q 05    % Rev    4Q 04    % Rev    YTD 05   % Rev    YTD 04   % Rev 
                         
Sales Volume (million unit cases)   72.8        68.1        252.5        227.5     
Average price per unit case    22.40        22.48        22.43        22.17     
                 
Net revenues    1,631        1,531        5,663        5,043     
Other operating revenues    47        43        157        152     
                         
Total revenues    1,678    100.0%    1,574    100.0%    5,820    100.0%    5,195    100.0% 
Cost of sales    885    52.7%    902    57.3%    3,085    53.0%    2,930    56.4% 
                         
Gross profit    793    47.2%    672    42.7%    2,735    47.0%    2,265    43.6% 
                         
Operating expenses    503    29.9%    467    29.7%    1,829    31.4%    1,739    33.5% 
                         
Operating income    290    17.3%    205    13.0%    906    15.6%    526    10.1% 
Depreciation, Amortization & Other non-cash charges (2)   47    2.8%    30    1.9%    146    2.5%    117    2.3% 
                         
EBITDA (3)   337    20.1%    235    15.0%    1,052    18.1%    644    12.4% 
 

(1)      Except volume and average price per unit case figures.
(2)      Includes returnable bottle breakage expense.
(3)      EBITDA = Operating Income + Depreciation + Amortization & Other non-cash charges.
 



February 24, 2006 Page 14 

Selected Information
For the three months ended December 31, 2005

Expressed in million of Mexican pesos as of December 31, 2005

         
  4Q 04      4Q 05 
         
Capex  547.3    Capex   962.6 
         
Depreciation  318.2    Depreciation  349.0 
         
Amortization & Other non-cash charges 301.8    Amortization & Other non-cash charges 358.5 
         

VOLUME
Expressed in million unit cases

                 
  4Q 04    4Q 05 
                 
  CSD  Water  Other  Total    CSD  Water  Other  Total 
                 
Mexico  201.8  44.3  2.1  248.2    207.3  46.0           3.1  256.4 
Central America  28.0  1.2  0.6  29.8    26.5  1.2           0.7  28.4 
Colombia  39.6  5.4  0.1  45.1    42.3  5.4           0.1  47.8 
Venezuela  41.0  3.3  1.7  46.0    37.6  3.3           1.7  42.6 
Brazil  63.6  4.0  0.5  68.1    66.8  5.4           0.6  72.8 
Argentina  41.1  0.4  0.3  41.8    43.4  0.7           0.5  44.6 
                 
Total  415.1  58.6  5.3  479.0    423.9  62.0           6.7  492.6 
                 

PACKAGE MIX BY PRESENTATION
Expressed as a Percentage of Total Volume

                 
  4Q 04   4Q 05
               
  Ret  Non-Ret  Fountain  Jug    Ret  Non-Ret  Fountain  Jug 
                 
Mexico  28.0           57.1             1.3  13.6    25.6           59.3             1.2  13.9 
Central America  45.3           50.3             4.4       -    37.5           58.7             3.8       - 
Colombia  46.8           43.7             3.5         6.0    42.8           48.6             3.3         5.3 
Venezuela  27.0           67.2             3.5         2.3    23.1           70.6             3.5         2.8 
Brazil  5.4           90.9             3.7       -    9.2           87.4             3.4       - 
Argentina  25.8           71.5             2.7       -    24.3           72.8             2.9       - 
                 

For the twelve months ended December 31, 2005

Expressed in million of Mexican pesos as of December 31, 2005

         
  YTD 04      YTD 05 
         
Capex  1,849.5    Capex  2,063.7 
         
Depreciation  1,284.1    Depreciation  1,307.5 
         
Amortization & Other non-cash charges 1,124.0    Amortization & Other non-cash charges 1,219.1 
         

VOLUME
Expressed in million unit cases

               
  YTD 04    YTD 05 
                 
  CSD  Water Other Total    CSD  Water  Other  Total 
                 
Mexico  793.5  188.7  7.7  989.9    812.4  202.1  10.5  1,025.0 
Central America  104.1  4.6  1.9  110.6    102.4  4.7  2.3  109.4 
Colombia  144.5  22.1  0.5  167.1    158.0  21.5  0.2  179.7 
Venezuela  149.2  14.3  9.2  172.7    149.4  15.0  8.1  172.5 
Brazil  212.5  13.2  1.8  227.5    232.6  17.7  2.2  252.5 
Argentina  141.8  1.7  0.8  144.3    146.0  2.5  1.6  150.1 
                 
Total  1,545.6  244.6  21.9  1,812.1    1,600.8  263.5  24.9  1,889.2 
                 

PACKAGE MIX BY PRESENTATION
Expressed as a Percentage of Total Volume

                 
  YTD 04    YTD 05 
             
  Ret  Non-Ret  Fountain  Jug    Ret Non-Ret  Fountain  Jug 
                 
Mexico  28.4           55.9             1.3  14.4    26.6           57.2             1.2  15.0 
Central America  48.5           47.5             3.9         0.1    41.9           54.4             3.7       - 
Colombia  50.7           39.6             3.3         6.4    46.2           44.5             3.3         6.0 
Venezuela  29.9           63.5             3.0         3.6    24.7           69.0             3.2         3.1 
Brazil  5.3           90.9             3.8       -    8.0           88.5             3.5       - 
Argentina  26.9           69.7             3.4       -    25.9           70.7             3.4       - 
                 

 

February 24, 2006 Page 15 

Macroeconomic Information

December 2005
Macroeconomic Information

             
    Inflation    Foreign Exchange Rate (local currency) per U.S. dollar
    LTM    4Q 05    Dec 05    Dec 04 
             
 
             
Mexico    3.33%    1.59%    10.7109    11.1460 
Colombia    5.08%    0.45%    2,284.2200    2,389.7500 
Venezuela    14.36%    2.50%    2,150.0000    1,920.0000 
Brazil    5.35%    1.51%    2.3407    2.6544 
Argentina    13.00%    3.22%    3.0320    2.9800 
             

 

 

February 24, 2006 Page 16 





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.



  COCA-COLA FEMSA, S.A. DE C.V.
  (Registrant)
 
 
 
Date: February 24, 2006 By: /s/ HÉCTOR TREVIÑO GUTIÉRREZ
  Name:  Héctor Treviño Gutiérrez
  Title:    Chief Financial Officer