Other Operating Results

Our fiber optic and coaxial cable network remained the most extensive and modern in the country, serving more than 6.5 million houses and has an extension of 46,958 km and a 97% two- way transfer. MegaCanal has maintained important growth and local presence. We are seeking local coverage and local channels. We have enjoyed a good position in coverage of local channels.

Corporate Segment

Created as a business unit responsible for developing commercial customers, it maintains a relationship with the Company’s transport area.

We are developing a strategy to realign the Metrocarrier services and that has been streamlined very strongly for Megacable. We have the infrastructure, the fiber optics, the knowledge and the most important factors, which is the relationship with the customer. This Metrocarrier evolution process will enable us to offer a very robust range of services to companies.

We are also developing another strategy to bring fiber optic to industrial parks using Gigabit-capable Passive Optical Network (GPON) technology, which enables the delivery of high quality services at more than 300 Megabytes per second in commercial and other specific areas. And we have a capacity of up to 2.5 Gigabytes per second to attract more commercial or corporate customers.

MEGATEC Symposium

We held the third MEGATEC Symposium, which brings together the country’s entire technical area, as well as certain some members of our value chain to discuss topics related to technology and business trends. In addition to this Symposium, we created the Megacable University, an institution we established for the technical training of our people (installers, technicians, corrective maintenance staff), which had a significant effect on their acquisition of knowledge of our technical area and has improved their understanding of the customer and consequently the quality of our services.

The Megacable University is being supported by different professors, who are also our business partners in the areas of network infrastructure, installations, etc.

Many of our professors also instruct our employees in how to complete installations, provide services and maintain the internal and networks, which resulted in a considerable improvement in the training of installation technicians.

With the introduction of the “National Preventive Maintenance Plan” (NPMP), we are looking to certify the quality of our network and service at national level. Proof of this is that in 2013 we achieved a 66% reduction in problems in these areas.

The presence of our network through three border crossings (Nogales, Reynosa and Ciudad Juárez) allows us to achieve a transmission capacity in the region of 200 Gigabytes per second. We are developing other functions continually by looking for new alternatives to improve our international capacity still further because our internal network gives us the approximate capacity of 1.3 Terabytes per second, but we are currently only using 12% of this capacity.

The average monthly churn rate in the cable television and telephony segments increased 19 base points in Cable Television, from 2.8% to 3.0% year-on-year and telephony reached 21 base points, increasing from 3.6% to 3.8% year- on-year. Broadband remained in line with 3.2%

Our RGUs achieved the figure of 3,672,017, with a year-on-year growth of 5%, and we managed to obtain 1.63 RGUs per unique subscriber compared with 1.59 in 2012. The number of unique subscribers totaled 2,250.484 at December 2013, which represents a growth of 3% compared to 2012. Moreover, the ARPU per unique subscriber increased from Ps. 357.21 to Ps. 385.6 year-on- year due to the already-mentioned additional services contracted by our subscribers.

Service Income

Service income reached Ps. 10,279 million, an increase of 15% compared to 2012. 56% of our total revenue comes from the Cable Television segment, 21% from the Broadband segment, 12% from the Telephony segment and finally 11% of the “Other” segment. The latter are represented primarily by the MCM, Ho1a and Metrocarrier operations.

Net profit

The Company achieved a net profit of Ps. 1,941 million, remaining in line year-on-year, achieved mainly from the “Must Carry/Must Offer” benefit. Offset by the Fiscal Reform, some deferred taxes were paid in advance, which resulted in an increase in the effective rate due to a larger tax base.

Operating expenses increased 14% year-on- year, mainly due to the growth of the network, the efforts made in the digitalization project and the brand positioning strategy. Depreciation and amortization was another item that had a negative affected due to its increase of 11% from 2012 to 2013 as a result of the Company’s CAPEX policy of CAPEX and growth.

Balance Sheet

The Company continues to increase its liquidity through cash generation, which grew 5%, taking into account that Ps. 1,568 million were paid in May, October and December 2013. The Company’s cash is 18% higher than liabilities with cost, which combined with the existing lines of credit, puts us in a privileged position to capitalize on the opportunities for growth as a result of the reforms, as well as to improve our competitive position.

We strengthened our financial position by having renegotiated the bank loan, which remains in the amount of Ps. $2,100 million, at a 28-day TIIE rate plus 0.49 %.

The Company’s shareholders’ equity increased year-on-year by 4%, mainly due to the increase in retained earnings from 2012 to 2013 from Ps. 360 million to Ps. 11.361 million.

Capital Investments

The CAPEX investments in 2013 amounted to approximately Ps. 2,000 million, which was mainly allocated to the expansion and modernization of the network, the purchase of CTC/subscriber equipment.

We expect to make the most of our potential to continue achieving good and better results.

It just remains for me to reiterate our commitment to maintain our on-going improvement in our services platform and customer service to the highest quality standards.

I hereby conclude this report, which was prepared in accordance with section XI of Article 44 of the Securities Market Law and request your subsequent approval.

Stock Market Performance At December 31, 2013, the Company had 1,718 million outstanding shares, the number of equivalent outstanding CPOs amounted to 298 million, with 1.6 million CPOs in the Treasury.

The resources remaining in 4Q13 amount to 241 million shares with a free float of 35%.