Vitro Reports 4Q 11 a 1.5% decrease in Sales and a 37.7% increase in EBITDA due to a onetime insurance claim recovery

Transcription

1 Vitro Reports 4Q 11 a 1.5% decrease in Sales and a 37.7% increase in EBITDA due to a onetime insurance claim recovery San Pedro Garza Garcia, Nuevo Leon, Mexico February 27, 2012 Vitro S.A.B. de C.V. (BMV: VITROA) one of the world's largest producers and distributors of glass products, today announced 4Q 11 unaudited results. Year-over-year consolidated net sales decreased 1.5 percent, mostly affected by 10.6 percent peso depreciation, YoY (quarterly average) which offset a temporary increase in demand in Glass Containers and a steady increase in Domestic Flat Glass sales volume. Consolidated EBITDA increased 37.7 percent, YoY, as we were positively impacted by the recovery of US$33 million, corresponding to the remaining amount of the Company s insurance claims related to damages caused by Hurricane Alex, which more than compensated the restructuring expenses accrued on this period. As a result of the sale of Vitro America Inc. on June, 2011, and according to Mexican Financial Accounting Standards (MFRS), for a comparative purpose, current and historical figures of that company are shown as discontinued operation in every period, except where indicated otherwise. (For more details, please refer to our second quarter 2011 report, available in our website). FINANCIAL HIGHLIGHTS* 4Q'11 4Q'10 % Change Consolidated Net Sales % Glass Containers % Flat Glass % Cost of Sales % Gross Income % Gross Margins 34.7% 24.5% 10.2 pp SG&A % SG&A % of sales 22.9% 19.8% 3.1 pp EBIT % EBIT Margins 11.8% 4.7% 7.1 pp EBITDA % Glass Containers % Flat Glass % EBITDA Margins 20.8% 14.9% 5.9 pp Net Income (loss) (21) (44) -53.0% Net Income (loss) Margins -5.1% -10.7% +6 pp Total Debt (1) 1,489 1, % Short Term Debt (2) 1,362 1, % Long Term Debt % Cash & Cash Equivalents (3) % Total Net Debt (1) 1,292 1, % * Million US$ Nominal (1) Total debt includes account receivables debt programs according to M exican FRS. (2) Since we are not in compliance under our bond indentures, the outstanding amount of the Senior Notes debt was reclassified from long-term to short-term. (3) In 4Q'10, Cash & Cash Equivalents include restricted cash for interest payments and cash on our accounts receivables debt programs. In 4Q'11, it includes restricted cash for our accounts receivables debt programs and lease payments Mr. Hugo Lara, Chief Executive Officer, commented: "With respect to Vitro s debt restructuring process, on February 7, 2012 Vitro was notified that the Judge overseeing the Company s Concurso Mercantil proceedings issued her final ruling approving the restructuring plan filed by the Conciliador and approved by the majority of the recognized creditors and Vitro, which provides for the replacement of the guarantees that were previously granted by Vitro s subsidiaries Furthermore, on February 23, 2012, Vitro consummated the concurso plan and completed its debt restructuring under the Mexican Insolvency Plan. We are very pleased with this ruling and the completion of our restructuring, which undoubtedly is a turning point in Vitro s more than century old history. While our top line benefitted from a temporary increase in sales volumes at Glass Containers as a result of higher demand of value added products in the Beer & CFT segments, a slight improvement in automotive glass sales volumes and a higher sales volume of float glass, this was not enough to offset the peso depreciation. However, a US$33 million recovery of the remaining amount of the Company s insurance claims related to damages caused by Hurricane Alex, more than compensated for the restructuring expenses accrued during the quarter and contributed to consolidated EBITDA growth. Mr. Lara continued. Net Free Cash Flow this quarter increased by US$65 million, mainly reflecting higher EBITDA, a lower Capital Expenditure, as most investments were scheduled in previous quarters, and a recovery in working capital consistent with our typical business seasonality. continued Mr. Lara. In connection with the status of the Concurso Mercantil in Mexico, Mr. Claudio Del Valle, Chief Restructuring Officer, commented, Regarding the prepackaged voluntary Concurso Mercantil proceedings submitted by Vitro and declared by the court, on Oct. 31, 2011, the Conciliador, advised on financial matters by KPMG Mexico, submitted an improved Concurso Plan to all admitted creditors, for its approval. On December 5, 2011, the Conciliador submitted to the Judge the restructuring agreement signed by Vitro and by approximately 850 recognized creditors holding over 74% of the Company s debt and on February 3, 2012, the Judge for the Fourth District Court on Civil and Labor Matters in the City of Monterrey issued her final ruling, approving the restructuring plan filed by the Conciliador and approved by the majority of the recognized creditors and the Company Mr. Del Valle continued. With respect to the Chapter 15 proceeding in the United States, Mr. Del Valle noted: To protect Vitro s assets in the U.S. from further actions from dissident bondholders, the Company filed a petition for a Voluntary Concurso Mercantil in

2 Mexico for Vitro Packaging de Mexico (VIP), its distribution subsidiary of glass containers into the U.S., in order to latter obtain a Chapter 15 recognition in that country. On November 23, 2011 Judge Harlin D. Hale, U.S. Bankruptcy Judge for the Northern District of Texas, granted recognition of VIP s voluntary Concurso Mercantil, under Chapter 15 of the United States Bankruptcy Code, protecting VIP from any further actions from all creditors, including dissident bondholders, continued Mr. Del Valle. On February 23, 2012, Vitro consummated the concurso plan approved on February 3, 2012, by the Fourth Federal District Court for Civil and Labor Matters in the State of Nuevo León according to Mexican Insolvency Law (Ley de Concursos Mercantiles). In accordance with the terms of the concurso plan, Vitro issued new 8.0% notes due in 2018 and 12.0% mandatorily convertible debentures due in 2015 and paid a cash restructuring fee to third party payment trusts. By approving the concurso plan, the Mexican District Court: (i) discharged the obligations of Vitro and its subsidiaries under Vitro s 2012, 2013, 2017 Senior Notes and other debt instruments; and (ii) ordered Vitro to issue to its unsecured creditors the 2018 Notes, guaranteed by, among others, certain subsidiaries of Vitro, the MCDs due in 2015 and to pay the restructuring fee. Mr. Del Valle concluded, Vitro is emerging from one of the most challenging periods of its history. Despite the efforts of a handful of highly litigious vulture investors, we have successfully implemented the concurso plan, thus beginning a new era for Vitro. Vitro is now a stronger, more competitive company, with a solid financial foundation and a bright future. We are confident that our clients, suppliers, our more than 17,300 workers and the communities in which we are located, share our thrill in our successful consummation of the Company s concurso plan Mr. Lara concluded. All peso figures provided in this announcement are in accordance with Mexican Financial Reporting Standards (Mexican FRS or NIFs) issued by the Mexican Board of Financial Reporting Standards (CINIF), except otherwise indicated. The Peso Figures included in the document are presented in nominal Pesos which could affect its comparability. Dollar figures are in nominal US dollars and are obtained by dividing nominal pesos for each month by the end of month fix exchange rate published by Banco de Mexico. In the case of the Balance Sheet, US dollar translations are made at the fix exchange rate as of the end of the period. Certain amounts may not sum due to rounding. All figures and comparisons are in US dollar terms, unless otherwise stated, and may differ from the peso amounts due to the difference in exchange rates. This announcement contains historical information, certain management s expectations, estimates and other forward-looking information regarding Vitro, S.A.B. de C.V. and its Subsidiaries (collectively the Company ). While the Company believes that these management s expectations and forward looking statements are based on reasonable assumptions, all such statements reflect the current views of the Company with respect to future events and are subject to certain risks and uncertainties that could cause actual results to differ materially from those contemplated in this report. Many factors could cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, including, among others, changes in general economic, political, governmental and business Dic'11 Dic'10 Inflation in Mexico Quarter 2.5% 1.9% Accumulated 3.8% 4.4% Inflation in USA Quarter -0.5% 0.3% Accumulated 3.0% 1.5% Exchange Rate Closing Average (year) Average (4Q) Devaluation Quarter (closing) QoQ 4.1% -1.2% Accumulated 13.1% -5.4% Quarter (average) YoY 10.6% -4.7% UDIs Closing previous quarter Closing current quarter conditions worldwide and in such markets in which the Company does business, changes in interest rates, changes in inflation rates, changes in exchange rates, the growth or reduction of the markets and segments where the Company sells its products, changes in raw material prices, changes in energy prices, particularly gas, changes in the business strategy, and other factors. Should one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may vary materially from those described herein as anticipated, believed, estimated or expected. The Company does not assume any obligation, to and will not update these forward-looking statements. ADVANCE PAYMENTS AND OTHER ASSETS NIF C-5, Advance Payments and Other Assets - This standard establish that a basic feature of advance payments is the fact that they do not transfer the risks and rewards of the ownership of goods and services to the Company. Therefore, advances for the purchase of inventories or property, plant and equipment, among others, must be presented separately from inventory or property, plant and equipment if the risks and rewards of ownership of those goods have not transferred to the Company. The standard requires that advance payments be impaired when they lose their ability to generate future economic benefits. This standard also requires classification of advance payments as current or noncurrent, depending on their nature. SPECIAL NOTE REGARDING NON-GAAP FINANCIAL MEASURES A body of generally accepted accounting principles is commonly referred to as GAAP. A non-gaap financial measure is generally defined by the SEC as one that purports to measure historical or future financial performance, financial position or cash flows but excludes or includes amounts that would not be so adjusted in the most comparable U.S. GAAP measure. We disclose in this report certain non-gaap financial measures, including EBITDA. EBITDA for any period is defined as consolidated net income (loss) excluding (i) depreciation and amortization, (ii) non-cash items related to pension liabilities, (iii) total net comprehensive financing cost (which is comprised of net interest expense, exchange gain or loss, monetary position gain or loss and other financing costs and derivative transactions), (iv) other expenses, net, (v) income tax, (vi) provision for employee retirement obligations, (vii) cumulative effect of change in accounting principle, net of tax and (viii) (income) loss from discontinued operations. In managing our business we rely on EBITDA as a means of assessing our operating performance and a portion of our management s compensation and employee profit sharing plan is linked to EBITDA performance. We believe that EBITDA can be useful to facilitate comparisons of operating performance between periods and with other companies because it excludes the effect of (i) depreciation and amortization, which represents a non-cash charge to earnings, (ii) certain financing costs, which are significantly affected by external factors, including interest rates, foreign currency exchange rates and inflation rates, which have little or no bearing on our operating performance, (iii) income tax and tax on assets and statutory employee profit sharing, which is similar to a tax on income and (iv) other expenses or income not related to the operation of the business. EBITDA is also a useful basis of comparing our results with those of other companies because it presents operating results on a basis unaffected by capital structure and taxes. 2

3 We also calculate EBITDA in connection with covenants related to some of our financings. We believe that EBITDA enhances the understanding of our financial performance and our ability to satisfy principal and interest obligations with respect to our indebtedness as well as to fund capital expenditures and working capital requirements. EBITDA is not a measure of financial performance under U.S. GAAP or Mexican FRS. EBITDA should not be considered as an alternate measure of net income or operating income, as determined on a consolidated basis using amounts derived from statements of operations prepared in accordance with Mexican FRS, as an indicator of operating performance or as cash flows from operating activity or as a measure of liquidity. EBITDA has material limitations that impair its value as a measure of a company s overall profitability since it does not address certain ongoing costs of our business that could significantly affect profitability such as financial expenses and income taxes, depreciation, pension plan reserves or capital expenditures and associated charges. The EBITDA presented herein relates to Mexican FRS, which we use to prepare our consolidated financial statements. Vitro, S.A.B. de C.V. (BMV: VITROA), is the leading company in the manufacture of glass in Mexico and one of the largest in the world backed by more than 100 years of experience in the industry. Founded in 1909 in Monterrey, Mexico, the company currently has subsidiaries in America and Europe, which offers quality products and reliable services to meet the needs of two distinct business sectors: glass containers and flat glass. Our manufacturing facilities produce, process, distribute and sell a wide range of glass products that are part of the daily lives of millions of people as well as offering excellent solutions to multiple industries that include: wine, beer, cosmetic, pharmaceutical, food and beverage, as well as the automotive and construction industry. In addition, we supply raw materials, machinery and industrial equipment to different industries. As a socially responsible company, We constantly strive to improve the quality of life of our employees, as well as the communities where we operate, by generating employment and economic prosperity given our permanent focus on quality and continuous improvement, as well as through our consistent efforts to promote sustainable development and ethical and transparent management. For more information, you can access Vitro s Website at: For further information, please contact: Investor Relations Jesús N. Medina Vitro S.A.B. de C.V. + (52) jnmedina@vitro.com U.S. agency Susan Borinelli / Barbara Cano Breakstone Group (646) / sborinelli@breakstone-group.com bcano@breakstone-group.com DETAILED FINANCIAL INFORMATION FOLLOWS: Media Roberto Riva Palacio Vitro, S.A.B. de C.V. + (52) rriva@vitro.com Consolidated Results Sales 4 EBIT and EBITDA 5 Total Financing Result 6 Taxes 6 Consolidated Net Income 7 Capital Expenditures 7 Consolidated Financial Position 8 Cash Flow 9 Key Developments 11 Glass Containers 14 Flat Glass 15 Consolidated Financial Statements 16 Segmented Information 17 3

4 Consolidated Results As a result of the sale of Vitro America Inc. in June, 2011, and according to MFRS, for comparative purposes, historical figures of that company are shown as discontinued operation in every period, except where otherwise indicated. (For more details, please refer to our second quarter 2011 report, available in our website). Sales Consolidated net sales for 4Q 11 decreased 1.5 percent YoY, from US$409 million in 4Q 10 to US$403 million in 4Q 11.Results were primarily affected by a 10.6 peso depreciation, YoY (quarterly average), which offset a temporary increase in demand in the Glass Containers business unit beginning in second quarter, a slight improvement in the automotive business and a higher float glass sales volume. For fiscal year 2011, consolidated net sales increased 10.4 percent to US$1,756 million from US$1,590 million during the same period last year. Glass Containers sales for 4Q 11, experienced a slight decrease of 0.8 percent, YoY, while Flat Glass sales remained flat over the same period. During the quarter, domestic sales decreased 3.3 percent, while export sales increased 1.7 percent, YoY, and foreign subsidiaries sales remained flat. Table 1: Total Sales Table 1 Sales (Million) 4Q'11 4Q'10 Change Change Pesos Total Consolidated Sales 5,521 5, ,835 20, Glass Containers 3,472 3, ,827 12, Flat Glass 1,970 1, ,687 7, Domestic Sales 3,381 3, ,355 12, Export Sales 1,789 1, ,154 6, Foreign Subsidiaries ,326 1, Nominal Dollars Total Consolidated Sales (1.5) 1,756 1, Glass Containers (0.8) 1, Flat Glass (0.0) Domestic Sales (3.3) 1, Export Sales Foreign Subsidiaries % Foreign Currency Sales* / Total Sales 39% 38% 1.1 pp 39% 40% -1 pp % Export Sales / Total Sales 32% 31% 1 pp 33% 34% -0.7 pp * Exports + Foreign Subsidiaries 4

5 EBIT and EBITDA During 4Q 11, the Company had a non-recurrent cash benefit related to insurance claims. This impacted positively our EBIT and EBITDA figures, as discussed below. Consolidated EBIT for the quarter increased from US$19 million in 4Q 10 to US$48 million during 4Q 11. EBIT margin increased 7.1 percentage points, from 4.7 percent to 11.8 percent. For fiscal year 2011, consolidated EBIT increased 58.5 percent from US$116 million in fiscal year 2010 to US$183 million in fiscal year 2011, while during this same period, EBIT margin increased 3.1 percentage points, from 7.3 percent to 10.4 percent. EBIT for the quarter at Glass Containers decreased by 45.7 percent, YoY, from US$35 million to US$19 million, while at Flat Glass, EBIT increased from negative US$12 million in 4Q 10 to US$25 million in 4Q 11. Consolidated EBITDA for the quarter increased 37.7 percent, from US$61 million in 4Q 10 to US$84 million in 4Q 11, positively impacted by the recovery of a US$33 million payment, corresponding to the remaining amount of the Company s insurance claims related to damages caused by Hurricane Alex. This amount more than compensated for the restructuring expenses accrued in this period. EBITDA margin increased 5.9 percentage points, from 14.9 percent to 20.8 percent, YoY. For fiscal year 2011, consolidated EBITDA increased 25.2 percent, from US$265 million in fiscal year 2010 to US$331 million. During the quarter, EBITDA at Glass Containers decreased 24.6 percent, YoY, from US$61 million in 4Q 10 to US$46 million in 4Q 11, while EBITDA at Flat Glass increased from US$1 million in 4Q 10 to US$33 million in 4Q 11. For details on both business units please refer to page 13 and 15. Table 2: EBIT and EBITDA Table 2 EBIT and EBITDA (Million) 4Q'11 4Q'10 Change Change Pesos Consolidated EBIT ,282 1, Margin 11.9% 4.7% 7.2 pp 10.5% 7.3% 3.2 pp Glass Containers (40.4) 1,714 1, Flat Glass 343 (147) (165) -- Consolidated EBITDA 1, ,136 3, Margin 20.9% 14.9% 6 pp 18.9% 16.7% 2.2 pp Glass Containers (16.9) 2,938 2, Flat Glass , , Nominal Dollars Consolidated EBIT Margin 11.8% 4.7% 7.1 pp 10.4% 7.3% 3.1 pp Glass Containers (45.7) Flat Glass 25 (12) (14) -- Consolidated EBITDA Margin 20.8% 14.9% 5.9 pp 18.9% 16.6% 2.3 pp Glass Containers (24.6) Flat Glass ,

6 Total Financing Result On April 8, 2011 Vitro SAB was declared in Concurso Mercantil, therefore according to Mexican law, all of its debt, including Senior Notes, was converted to Unidades de Inversion ( UDIS ) and stopped accruing interest. Under Mexican FRS, the fluctuation in the value of the UDIS is considered as an interest expense. For reporting purposes, UDIS figures were reconverted at the dollar exchange rate of the closing period. (For more details please refer to our second quarter report, available in our website). Total Financing Result for the quarter resulted in an expense of US$29 million compared to an expense of US$42 million during 4Q 10. This result was mainly driven by a decrease in our interest expense from US$61 million in 4Q 10 to US$23 million in 4Q 11 which mainly reflected the effect of our debt conversion to UDIS and its consequent stop in accruing interest. This was partially offset by higher restructuring expenses of US$3 million during 4Q 11, accounted for in Other Financial Expenses, compared to Other Financial Products of US$1 million during 4Q 10. For fiscal year 2011, Total Financing Result decreased 84.1 percent to an expense of US$26 million from an expense of US$164 million in fiscal year 2010, mainly benefited by a decrease in net interest expense from an expense of US$209 million in fiscal year 2010 to an expense of US$121 million in this period, due to our debt conversion to UDIS on April 8, 2011, and from a non-cash foreign exchange gain of US$99 million compared to a gain of US$56 million for the same period last year, due to the above mentioned factors. Table 3: Total Financing Result Table 3 Total Financing Result (2) (Million) 4Q'11 4Q'10 Change Change Pesos Net Interest (expense) income (319) (752) 57.6 (1,499) (2,635) 43.1 Other Financial Expenses (1) (42) 8 -- (55) (150) 62.9 Foreign Exchange Gain (Loss) (24) , Total Financing Result (385) (523) 26.4 (373) (2,110) 82.3 Nominal Dollars Net Interest (expense) income (23) (61) 61.4 (121) (209) 42.3 Other Financial Expenses (1) (3) 1 -- (4) (12) (65.1) Foreign Exchange Gain (Loss) (2) Total Financing Result (29) (42) 31.9 (26) (164) 84.1 (1) Includes natural gas hedgings and expenses related to debt restructuring. (2) On April 8, 2011 Vitro SAB de CV was declared in Concurso M ercantil, therefore according to M exican law, all of its debt, including Senior Notes, was converted to UDIS and stopped accruing interest. For reporting purposes, UDIS figures were reconverted at the dollar exchange rate of the closing period. Taxes Total Income Tax decreased from a gain of US$4 million in 4Q 10 to an expense of US$27 million during this quarter. This was mainly due to an increase in deferred income taxes, which presented an expense of US$24 million compared to a gain of US$5 million in the same period last year due to the recovery of net operating losses generated in previous periods; this, coupled with an increase in Accrued Income Taxes from an expense of US$1 million in 4Q 10 to an expense of US$3 million in 4Q 11. For fiscal year 2011, Total Income Tax increased to an expense of US$72 million from a gain of US$18 million in fiscal year

7 Table 4: Taxes Table 4 Taxes (Million) 4Q'11 4Q'10 Change Change Pesos Accrued Income Tax Deferred Income Tax (gain) 338 (62) (515) -- Total Income Tax 383 (50) (250) -- Nominal Dollars Accrued Income Tax Deferred Income Tax (gain) 24 (5) -- 4 (38) -- Total Income Tax 27 (4) (18) -- Consolidated Net Income 48 EBIT (29) Total Financing Result Consolidated Net Income (million dollars) (11) Other (Expenses) Income (27) Taxes (21) Consolidated Net Income (Loss) During 4Q 11, the Company recorded a Consolidated Net Loss of US$21 million compared to a Consolidated Net Loss of US$44 million during the same period last year, reflecting a higher Operating income of US$48 million compared to US$19 million in 4Q 10, coupled with a lower Total Financing Result, which recorded an expense of US$29 million in 4Q 11 compared to an expense of US$42 in the same period last year, more than offsetting an increase in Total Income Tax loss of US$27 million compared to a gain of US$4 million on the same period last year. Capital Expenditures (CapEx) Capital expenditures for the quarter totaled US$29 million, compared with US$44 million in 4Q 10. Glass Containers represented 74.8 percent of total CapEx, mainly invested in scheduled furnace repairs, molds and maintenance. Flat Glass accounted for 25.2 percent, which was mainly invested in scheduled furnace repairs, maintenance and capacity expansion for the auto glass segment. 7

8 Consolidated Financial Position On April 8, 2011 Vitro SAB was declared in Concurso Mercantil, therefore according to Mexican law, all of its debt, including Senior Notes, was converted to UDIS and stopped accruing interest. For reporting purposes, UDIS figures were reconverted at the dollar exchange rate of the closing period. For 4Q 11, Net Debt, which is calculated by deducting cash and cash equivalents classified in short and long term assets, decreased QoQ by US$68 million to US$1,292 million, mainly driven by debt conversion into UDIS and the 4.1 percent peso depreciation for the quarter. On a YoY comparison, Net Debt decreased by US$234 million, explained as well by our debt conversion to UDIS, and 13.1 percent peso depreciation, during fiscal year As of December 31, 2011, the Company had a cash balance of US$197 million, of which US$2 million are classified as other long-term assets and US$25 million are restricted cash collateralizing lease payments and cash on our accounts receivable financing programs. Therefore, unrestricted cash balance as of December 31, 2011 was US$172 million. Consolidated gross debt as of December 31, 2011 totaled US$1,489 million, which represent a US$29 million decrease, QoQ; YoY debt decreased US$208 million. Both changes driven by the explanations mentioned above. Interest Coverage (1) Table 5 Debt Indicators (Million dollars; except as indicated) 4Q'11 3Q'11 2Q'11 1Q'11 4Q'10 (EBITDA/ Interest Expense) (Times) LTM Leverage (1) (Total Debt / EBITDA) (Times) LTM (Total Net Debt / EBITDA) (Times) LTM Total Debt (4)(5) 1,489 1,518 1,703 1,706 1,697 Short-Term Debt (2) 1,362 1,386 1,547 1,608 1,585 Long-Term Debt Cash and Equivalents (3) Total Net Debt 1,292 1,360 1,545 1,590 1,526 Currency Mix (%) Dlls & Euros / Pesos / UDIS 9/6/85 9/6/85 8/7/85 94/6/0 93/7/0 (1) Financial ratios are calculated using figures in pesos. (2) Since we are not in compliance under our bond indentures, the outstanding amount of the Senior Notes debt was reclassified from long-term to short-term. (3) Cash & Cash Equivalents include restricted cash related to consent payment and restructuring consideration, lease payments and cash on our accounts receivables financing programs. (4) NIF B-8, Due to changes in M exican FRS, regarding to consolidation or controlled entities, our accounts receivable securitization trusts and off-balance sheet debt were included in the Consolidated Financial Statements of Vitro and Subsidiaries. The effects of the changes in accounting principles increased debt of all periods herein presented. (5) On April 8, 2011 Vitro SAB de CV was declared in Concurso M ercantil, therefore according to M exican law, all of its debt, including Senior Notes, was converted to UDIS and stopped accruing interest. For reporting purposes, UDIS figures were reconverted at the dollar exchange rate of the closing period. 8

9 Fixed Rate Floating Rate + Fixed Spead (1) Rate Exposure Dic. 10 Dic % 86% 14% 14% Dollars Pesos Euros UDIS Currency Dic % 8% 2% Exposure(2) Dic. 11 7% 6% 2% 85% Banks Market Source Dic. 10 Dic % 24% 73% 76% (1) LIBOR and TIIE based rates (2) On April 8, 2011, Vitro was declared in Concurso Mercantil, therefore according to Mexican Law, all of its debt, including Senior Notes, was converted to UDIS and stopped accruing interests. Based on the original issuance currency, the mix is 92% dollars, 6% pesos and 2% Euros Cash Flow 4Q 11 was a strong Net Free Cash Flow quarter as it increased from US$17 million in 4Q 10 to US$86 million in 4Q 11. This was mainly the result of a higher EBITDA figure, which increased from US$61 million in 4Q 10 to US$84 million in 4Q 11, boosted by the before mentioned one-time insurance claim recovery, and by a recovery in working capital. We also incurred less CapEx in 4Q 11 than what was spent in 4Q 10, as our expenditures decreased from US$44 million to US$29 million and our net interest payment decreased from US$29 million to US$8 million due to lower legal and financial advisory fees related to our debt restructuring and a decrease in our payments related to Derivative Financial Instruments. For the fiscal year 2011, the Company recorded an increase in Net Free Cash Flow, from US$83 million during fiscal year 2010 to US$110 million during this period. This change was mainly due to a higher EBITDA figure and lower Net interests paid, which offset an increase in Working Capital and an increase in CapEx, due to furnace repairs in both our business units. 9

10 Table 6: Cash Flow Analysis Table 6 Cash Flow from Operations Analysis (1) (Million) 4Q'11 4Q'10 Change Change Pesos EBITDA 1, ,136 3, Working Capital (2) (658) (188) Cash Flow from Operations 1,642 1, ,477 3, Net Interest Paid (3) (109) (362) (69.9) (689) (971) (29.1) Cash Taxes (paid) recovered (4) 69 (16) -- (15) (171) (91.5) Capex (5) (403) (544) (25.9) (1,320) (963) 37.1 Dividends (2) (10) (80.3) (4) (13) (69.4) Net Free Cash Flow 1, ,450 1, Nominal Dollars EBITDA Working Capital (2) (51) (13) Cash Flow from Operations Net Interest Paid (3) (8) (29) (72.3) (63) (77) (18.9) Cash Taxes (paid) recovered (4) 5 (1) -- (1) (14) (95.6) Capex (5) (29) (44) (33.9) (107) (77) 38.6 Dividends (0) (1) (82.6) (0) (1) (71.7) (4) Includes PSW (Profit Sharing to Workers) Net Free Cash Flow (1) This statement is a cash flow analysis and it does not represent a Cash Flow Statement according with Mexican FRS (2) Includes: Clients, inventories, suppliers, other current assets and liabilities including IVA (Value Added Tax) (3) Also includes interest income, derivative financial transactions and expenses related to debt restructuring (5) Includes advanced payments which under Mexican FRS is now cosidered as other long term assets and not as fixed assets. 10

11 Key Developments FINANCIAL POSITION AND RESTRUCTURING PROCESS During the last 36 months, Vitro has worked diligently to resolve its financial situation by seeking to achieve a consensual restructuring on terms that would provide Vitro s creditors a fair recovery in light of the Company s financial capacity and permit the Company to regain its financial footing. To that end, Vitro engaged in active negotiations with various groups of creditors, including an ad hoc group of holders of Old Notes (the Ad Hoc Bondholders Group ), as well as Fintech, the Company s largest creditor. Vitro s Voluntary Concurso Proceeding and Chapter 15 Case On April 11, 2011, Vitro announced that, in a resolution from the Judge for the Second Unitary Court of the Fourth Circuit in Monterrey, the Court had declared Vitro in Concurso Mercantil. On April 14, 2011, after Vitro was declared in Concurso Mercantil, the Company commenced a Chapter 15 case in the U.S. Bankruptcy Court for the Southern District of New York. On May 13, 2011, at the request of the dissident bondholders, the judge granted the change of venue from NY to the Northern District of Texas, where on July 21, 2011, a Chapter 15 was issued in favor of Vitro SAB. As a result of such recognition, all actions against Vitro SAB s rights and property within the territorial jurisdiction of the United States are subject to an automatic stay pursuant to Chapter 15 of the U.S. Bankruptcy Code until the conclusion of the Chapter 15 Case. Regarding the Concurso proceedings in Mexico, in August, 2011, a final list of creditors was issued by the Conciliador and submitted to the court and on August 12, 2011, the Court issued its Decision for the Acknowledgement, Value and Order of Credits ( Sentencia de Reconocimiento, Graduacion y Prelacion de Creditos ), granting recognition of rank, amount and order of those creditors contained in the definitive list by the Conciliador. On Oct. 31, 2011, the Conciliador, advised on financial matters by KPMG Mexico, submitted a Concurso Plan to all admitted creditors, for acceptance pursuant to the Concurso Mercantil proceeding. This Plan had been approved by the Company and included improved economic terms for creditors and new procedures and measures designed to guarantee its proper execution and to protect Vitro and its consenting creditors from non-consenting creditors that may continue to seek to disrupt the Concurso Plan execution after its approval by the Judge. On Dec. 5, 2011, the Conciliador submitted to the Judge the restructuring agreement signed by the Company and by close to 850 recognized creditors holding over 74% of Vitro s debt. On February 7, 2012, the Company was notified that the Judge for the Fourth District Court Civil and Labor Matters in the City of Monterrey issued her final ruling, approving the restructuring plan filed by the Conciliador and approved by the majority of the recognized creditors and the Company, according to Mexican Insolvency Law (Ley de Concursos Mercantiles). Vitro s Voluntary Concurso Proceeding Completion On Feb 23, 2012, Vitro announced that it had consummated the concurso plan approved by the Fourth Federal District Court for Civil and Labor Matters in the State of Nuevo León according to Mexican Insolvency Law (Ley de Concursos Mercantiles) on February 3, In accordance with the terms of the concurso plan, Vitro issued new 8.0% notes due in 2018 (the 2018 Notes ) and 12.0% mandatorily convertible debentures due in 2015 (the MCDs ) together with the 2018 Notes, the New Notes and paid a cash restructuring fee to third party payment trusts, which will issue the corresponding Credit Linked Notes tied to the New Notes and will deliver them and the restructuring fee to holders of recognized claims in the concurso mercantil proceedings that consented to the concurso plan. Another trust will hold the restructuring consideration in favor of the 11

12 holders of recognized claims that did not consent the concurso plan, for delivery to those holders who later execute and deliver the appropriate receipt and acknowledgement. By approving the concurso plan, the Mexican District Court: (i) discharged the obligations of Vitro and its subsidiaries under Vitro s: (1) 8.625% Senior Notes due February 1, 2012 (the 2012 Notes ), (2) 11.75% Senior Notes due November 1, 2013 (the 2013 Notes ), (3) 9.125% Senior Notes due February 1, 2017 and (4) other debt instruments; and (ii) ordered Vitro to issue to its unsecured creditors the 2018 Notes, guaranteed by, among others, certain subsidiaries of Vitro, the MCDs due in 2015 and to pay the restructuring fee. Mr. Claudio Del Valle, Vitro s Chief Restructuring Officer stated, Vitro is emerging from one of the most challenging periods of its history. Despite the efforts of a handful of highly litigious vulture investors, we have successfully implemented the concurso plan, thus beginning a new era for Vitro. Vitro is now a stronger, more competitive company, with a solid financial foundation and a bright future. New York State Litigation against Vitro and certain of its non-u.s. subsidiaries On October 13, 2011, a Summary Judgment hearing was held in the New York State Court, where arguments from both parties were heard. On January 24, 2012, the Judge determined an aggregate amount of US$124.1 million, plus accrued interests as of the date partial resolution regarding these matters is issued, that the dissident bondholder could claim on these matters. Such determination does not have a significant financial impact for Vitro; nevertheless the Company does not agree with this decision and will contest it. On December 14, 2011, a minority group of dissident creditor funds filed a lawsuit in the New York State Court requesting, among other things, the withdrawal of Vitro s subsidiaries support to the restructuring plan. On December 16, 2011, N.Y. State Judge Bernard Fried issued a Temporary Restraining Order ( TRO ) directing Vitro subsidiaries to withdraw their consent to the proposed restructuring plan; said ruling was appealed by the Company and on December 22, 2011, U.S. Bankruptcy Judge Hale issued a ruling determining that the automatic stay in Vitro s Chapter 15 Case precluded the entry of the temporary restraining order previously issued by a N.Y. State Court. After being appealed by the dissident bondholders, on December 28, 2011, the decision was ratified by the U.S. District Court and subsequently, on January 5, 2012, by the U.S. Fifth Circuit Court of Appeals. On January 17, 2012, Senior United States Judge Royal Ferguson denied emergency joint motion for stay, confirming previous decision issued by the U.S. Bankruptcy Court. On January 24, 2012, the United States Court of Appeals for the Fifth Circuit issued a seventh denial to the dissident bondholders opposed motion for the stay pending appeal. Vitro Packaging de Mexico s Voluntary Concurso Proceeding and Chapter 15 Case On June 29, 2011, Vitro Packaging de Mexico ( VIP ) filed a petition with the District Court of Nuevo Leon, commencing the VIP voluntary Concurso Proceeding, in order to obtain the protection of its operations and assets from any possible legal actions from creditors. On October 26, the Judge for the Fourth District in Labor and Civil Matters declared Vitro Packaging de Mexico in voluntary reorganization proceeding (Concurso Mercantil), and on November 7, 2011, the Conciliador for this proceeding was appointed. On January 2, 2012, the Conciliation period started. On June 30, 2011, VIP commenced the VIP Chapter 15 Case in the Bankruptcy Court by filing a petition for recognition of the VIP Concurso Proceeding pursuant to Chapter 15 of the U.S. Bankruptcy Code. On Nov. 23, 2011, Judge Harlin D. Hale, U.S. Bankruptcy Judge for the Northern District of Texas, granted recognition of VIP s voluntary Concurso Mercantil, under Chapter 15 of the United States Bankruptcy Code, protecting VIP from any further actions from all creditors, including dissident bondholders. 12

13 ORGANIZATIONAL CHANGES Organizational Changes in Vitro s Managing Team In order to strengthen Vitro s management team, the Company has and will make several changes. On March 1 st, 2012, Adrián Sada Cueva will be appointed Chief Executive Officer of Glass Containers substituting Alfonso Gómez Palacio who will be appointed as President of this business unit. Adrián Sada Cueva joined the Company in 1998 and has been in charge of several executive positions, including Vice President of Glass Containers since Alberto Hernández Téllez has been appointed Vice President of the Float Glass Production Business and Julio César Martínez Gutiérrez as Vice President of Finance at the Flat Glass Business Unit; Adrián Meouchi Cueva has been appointed Vice President of Procurement and Ricardo Maiz Rodríguez Vice President of Financing and Treasury. 13

14 Sales Glass Containers (63 percent of fiscal year 2011 Consolidated Sales) Sales for the quarter decreased 0.8 percent, YoY, from US$255 million in 4Q 10 to US$253 million in this period. Domestic sales showed a slight decrease of 2.2 percent, mainly affected by the 10.6 percent peso depreciation, YoY (quarterly average). This offset a benefit due to an increase in demand of better price mix containers in CFT segment, as well as from one of our beer producer clients. Increase in demand started in the second quarter and continued into 4Q 11. Also, a slight a growth in sales volume in soft drinks segment benefited domestic sales. Export sales increased 2.5 percent, from US$92 million in 4Q 11 to US$94 million in 4Q 11, experiencing a better price mix despite of lower sales volumes in almost all segments. Sales from Glass Containers foreign subsidiaries decreased to US$4.5 million from US$5.3 million on a YoY basis. EBIT and EBITDA EBIT for the quarter decreased 45.7 percent YoY, from US$35 million in 4Q 10 to US$19 million in 4Q 11. EBITDA for the same period decreased 24.6 percent, from US$61 million to US$46 million. During this quarter, EBIT and EBITDA were affected by extraordinary restructuring expenses and a 10.6 percent peso depreciation, YoY (quarterly average), notwithstanding a better price mix, in both domestic and export markets and a 4 percent decrease in energy prices. EBITDA from Mexican glass containers operations, which is Glass Container s core business and represents approximately 70 percent of total EBITDA in this quarter, decreased 36 percent YoY due to the above mentioned factors. Table 7: Glass Containers Table 7 Glass Containers (Million) 4Q'11 4Q'10 Change Change Pesos Consolidated Net sales 3,472 3, ,827 12, Net Sales Domestic Sales 2,116 1, ,452 7, Exports 1,295 1, ,190 4, Foreign Subsidiaries (6.1) EBIT (40.4) 1,714 1, EBITDA (16.9) 2,938 2, EBIT Margin 7.4% 13.7% -6.3 pp 12.4% 13.6% -1.2 pp EBITDA Margin 18.0% 23.8% -5.8 pp 21.2% 23.0% -1.8 pp Nominal Dollars Consolidated Net sales (0.8) 1, Domestic Sales (2.2) Export Sales Foreign Subsidiaries (15.1) EBIT (45.7) EBITDA (24.6) EBIT Margin 7.5% 13.7% -6.2 pp 12.6% 13.6% -1 pp EBITDA Margin 18.1% 23.8% -5.7 pp 21.3% 23.0% -1.7 pp Glass Containers Domestic (Millions of Units) ,877 3, Exports (Millions of Units) (2.3) 1,472 1, Total 1,231 1,236 (0.4) 5,348 4, Installed capacity utilization (furnaces)* 83.2% 83.2% 0 pp Alcali (Thousands Tons sold)** * A ltho ugh pro ductio n increased by 16 percent, the installed capacity also increased by 17 percent resulting in a lesser capacity utilization. ** Includes sodium carbonate, sodium bicarbonate, sodium chlorine and calcium chlorine 14

15 Sales Flat Glass (36 percent of fiscal year 2011 Consolidated Sales) Flat Glass sales for the quarter remained flat, YoY, reaching US$144 million in both periods, 4Q 11 as well as in 4Q 10. Domestic sales remained almost flat, experiencing a decrease of 0.9 percent, YoY, mainly as a result of slight price erosion due to the peso depreciation, which offset increased sales volumes resulting from a higher sales volume of flat glass coupled with a richer domestic to export sales ratio and an improvement in automotive glass sales. Export sales also remained flat, YoY, as a result of a better price mix, despite a decrease in sales volume, as we focused on higher value added products to export and tended more heavily to the domestic market. Automotive sales increased 7.9 percent, YoY, driven by higher volumes in OEM (Original Equipment Manufacturer) market. OEM sales increased 10 percent, while AGR (Auto Glass Replacement) market sales remained almost flat, decreasing 1 percent as this segment was also impacted by the peso depreciation. Sales from foreign subsidiaries increased 4.4 percent, YoY, from US$22 million in 4Q 10 to US$23 million in this period, benefited by sales from South America. EBIT & EBITDA EBIT for the quarter increased to US$25 million from a loss of US$12 million in 4Q 10, while EBITDA increased to US$33 million from a loss of US$1 million in 4Q 11. During the same period, EBITDA margin increased 22.3 percentage points, from 0.6 percent in 4Q 10 to 22.9 percent in 4Q 11. On a YoY comparison, EBIT and EBITDA were mainly benefited by the recovery of the remaining amount of the Company s insurance claims related to damages caused by Hurricane Alex, coupled with higher sales volumes and a better capacity utilization in our furnaces, which benefited a better fixed cost absorption, as well as a 4 percent decline in energy prices. Table 8: Flat Glass Table 8 Flat Glass (Million) 4Q'11 4Q'10 Change Change Pesos Consolidated Net sales 1,970 1, ,687 7, Net Sales Domestic Sales 1,186 1, ,582 4, Exports ,964 2,015 (2.5) Foreign Subsidiaries ,142 1, EBIT 343 (147) (165) -- EBITDA , , EBIT Margin 17.4% -8.2% 25.6 pp 6.7% -2.2% 8.9 pp EBITDA Margin 23.2% 0.6% 22.6 pp 13.5% 5.6% 7.9 pp Nominal Dollars Consolidated Net sales (0.0) Domestic Sales (0.9) Export Sales (0.5) (0.8) Foreign Subsidiaries EBIT 25 (12) (14) -- EBITDA , EBIT Margin 17.2% -8.3% 25.5 pp 6.4% -2.2% 8.6 pp EBITDA Margin 22.9% 0.6% 22.3 pp 13.1% 5.6% 7.5 pp Volumes Flat Glass (Thousands of m2r) (1) (2) 30,321 28, , , Capacity utilization Float Glass furnaces (3) 106.7% 88.4% 18.3 pp Flat Glass auto 103.0% 72.5% 30.5 pp (1) Flat Glass volumes only include float and automotive glass manufactured at our M exican subsidiaries (2) m2r = Reduced Squared M eters (3) Capacity utilization may sometimes be greater than 100 percent because pulling capacity is calculated based on a certain number of changes in glass color & thickness, determined by historical average and performance. 15

16 CONSOLIDATED VITRO, S.A.B. DE C.V. AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS Fourth Quarter FOR THE PERIODS, (MILLION) INCOM E STATEM ENT Nominal P esos Nominal Dollars Nominal P esos % Var % Var % Var % Var. Consolidated Net Sales 5,521 5, (1.5) 21,835 20, ,756 1, Cost of Sales 3,591 3,831 (6.3) (14.9) 15,239 14, ,229 1, Gross Income 1,930 1, ,596 5, SG&A Expenses 1,274 1, ,314 3, Operating Income ,281 1, Other Expenses (Income), net (9.4) (52.6) 16 (37) -- Share in earnings of unconsolidated associated companies (40) (10) (287.4) (3) (1) (253.0) (45) (29) (54.7) (4) (2) (51.0) Interest Expense (55.9) (59.9) 1,544 2,687 (42.5) (41.7) Interest Income (21) (19) 12.4 (2) (2) 0.8 (46) (52) (11.7) (4) (4) (12.9) Other Financial Expenses (net) 42 (8) -- 3 (1) (62.9) 4 12 (65.1) Exchange (Loss) Income 24 (220) -- 2 (18) -- (1,181) (675) 75.1 (99) (56) 75.0 Total Financing Result (26.4) (31.9) 373 2,110 (82.3) (84.1) Inc. (lo ss) bef. T ax 113 (464) -- 8 (38) -- 1,731 (1,082) (9) -- Income Tax 383 (50) (4) (250) (18) -- N et inco me (lo ss) fro m co ntinuing o peratio ns (270) (414) 34.8 (20) (34) (831) Net income (loss) from discontinued operations (11) (126) 91.2 (1) (10) 92.1 (495) (368) (34.4) (42) (29) (42.3) Net income (loss) (281) (540) 48.0 (21) (44) (1,199) (20) -- Net Income (loss) of Maj. Int. (363) (525) 30.8 (27) (43) (1,196) (94) -- Net Income (loss) of Min. Int. 82 (15) -- 6 (1) -- (100) (3) -- (8) (0) -- 12M Nominal Dollars VITRO, S.A.B. DE C.V. AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS As of September N o minal P eso s Nominal Dollars B A LA N C E SH EET % Var % Var. F IN A N C IA L IN D IC A T OR S (1) Cash & Cash Equivalents 2,726 2, Debt/EBITDA (LTM, times) Trade Receivables 3,580 2, EBITDA/ Interest. Exp. (LTM, times) Inventories 3,261 2, Debt / (Debt + Equity) (times) Other Current Assets 1,265 1, Debt/Equity (times) Discontinued Current Assets Total Liab./Stockh. Equity (times) Total Current Assets 10,831 9, (1.4) Curr. Assets/Curr. Liab. (times) Sales/Assets (times) Prop., Plant & Equipment 11,923 12,291 (3.0) (14.3) EPS (Ps$) * 1.0 (3.1) Deferred Assets 9,433 7, Other Long-Term Assets (0.5) Investment in Affiliates (2) Discontinued Long-Term Assets Total Assets 33,210 30, ,376 2,495 (4.8) * Based on the weighted average shares outstanding. Short-Term & Curr. Debt (3)(4) 19,052 19,582 (2.7) 1,363 1,585 (14.0) OT H ER IN F OR M A T ION Trade Payables 1,643 1, # Shares Issued (thousands) 386, ,857 Other Current Liabilities 6,501 6, (4.7) Discontinued Current Liabilities Total Curr. Liab. 27,197 27,602 (1.5) 1,946 2,234 (12.9) # Average Shares Outstanding Long-Term Debt 1,777 1, (thousands) 386, ,412 Other LT Liabilities 3,014 1, Discontinued LT Liabilities T o tal Liabilities 31,988 30, ,288 2,446 (6.5) # Employees 16,797 16,030 M ajority interest (87) (803) (89.2) (7) (64) (89.7) M inority Interest 1,309 1,405 (6.8) (17.6) Total Shar. Equity 1, (1) Financial ratios are calculated using figures in pesos. (2) Investment in Affiliates includes 49.7% participation in Comegua under the equity method starting December 2008, as a result of the deconsolidation of Comegua. (3) Since we are not in compliance under our bond indentures, the outstanding amount of the Senior Notes debt was reclassified from long-term to short-term. (4) Includes derivative instruments settlements for US$253 million recognized by the Company in 3Q'10, previously accounted in other current liabilities. 16