Highlights: CIE REPORTS SECOND QUARTER 2004 RESULTS

Entertainment, Commercial and City, July 27, 2004 - Corporación Interamericana de Entretenimiento, Services Division revenues S.A. de C.V. (“CIE”, “the Company” or “the Group” (BMV: CIE B), the leading out- increase 18%, 4% and 12% of-home entertainment company serving the Spanish- and Portuguese-speaking respectively markets in , Spain, and the U.S. Latin market, today announced its Growth in entertainment revenues consolidated financial and operating results for the second quarter of 2004, was mainly driven by a strong ended on June 30, 2004. local and international live event calendar in , Brazil and Mexico Quarter vs. Quarter Adjustment in EBITDA margin primarily due to the build-out of 2Q 2004 2Q 2003 VAR % Sports Books & Yaks Revenues 1,933 1,672 15.6% CIE inaugurates new children’s EBITDA 437 388 12.8% outdoor attraction, Granja Las Américas EBITDA Margin 22.6% 23.2% EBITDA / Interest Expense Ratio 3.9x 3.7x Wannado™ “real-play” theme park scheduled to open August 12, Comp. Cost of Financing 115 38 N.A. 2004 Majority Net Result 95 115 (18%)

New corporate identity unveiled; CIE to enhance brand recognition First Six Months vs. First Six Months across all markets

1H 2004 1H 2003 VAR % Revenues 3,541 3,107 14.0%

EBITDA 797 719 10.9%

EBITDA Margin 22.5% 23.1% EBITDA / Interest Expense Ratio 3.6x 3.5x CIE CONTACTS: Jaime J. Zevada Comp. Cost of Financing 219 89 N.A. Director of Finance Majority Net Result 164 178 (8%)

Juan Carlos Sotomayor Investor Relations

Conrado M. Ramírez NOTE: Figures appearing in this table and throughout the document are expressed in Banking Communications millions of Mexican pesos of purchasing power as of June 30, 2004, unless otherwise specified, and have been prepared in accordance with Mexican Generally Accepted E: [email protected] Accounting Principles (“Mexican GAAP”). Figures may differ due to rounding. T: +52 (55) 5201-9000

EXTERNAL CONTACT: Jesús Martinez IR and PR Communications

E: [email protected] T: +52 (55) 5644-1247

Second Quarter 2004 Results Page 2

Discussion of Quarterly Results (“The Period”)

REVENUES Consolidated revenues in the second quarter of 2004 increased 15.6% to Ps. 1,933, compared to Ps. 1,672 in the same quarter of 2003.

Quarterly Revenue by Division

Total: Ps.1,932

2Q 2004 2Q 2003

196 176 10% 10% 240 231 12% 14%

1,497 1,265 78% 76%

Entertainment Services Commercial

Entertainment Division: Revenue totaled Ps. 1,497 in the quarter, 18% more than the Ps. 1,265 registered in the year ago period. (Operating Highlights contained in this document offer a more detailed understanding of the events impacting quarterly results.)

This increase was principally driven by: a. A strong schedule of live events in Argentina, Brazil and Mexico, including sold-out performances of international recording artists such as Michael Bolton, Creedence Clearwater, Blink-182, Creamfields, Festival , Yes, Chayanne South America Tour (in countries such as: Ecuador, Peru and Venezuela) and others (see Operating Highlights). In addition, and when compared with the year ago period, in which numerous concerts were postponed or cancelled due to the war in Iraq resulting in a lower than usual revenue second quarter for 2003; b. Three Broadway-type productions in Spain compared to one in the year ago period. Productions during the quarter included Cats, Cabaret and Phantom of the Opera. The latter ended its 21–month production run in the last week of the second quarter; and, c. The operation of the horse race track and its 28 Sports Books & Yaks1 units, compared to 19 in the second quarter of 2003, in addition to an increase in local and international exhibitions at Centro Banamex, from 13 expos in 2003, to 19 in 2004.

1 Sports Books & Yaks is a network of sites that feature off-track betting and numbers-based games, respectively, and are developed and operated by CIE. Second Quarter 2004 Results Page 3

Commercial Division: Revenue in the second quarter registered an increase of 4%, reaching Ps. 240, compared with Ps. 231 in the same period of 2003. This increase is primarily due to a greater number of billboard advertisements on pedestrian overpasses. In the current quarter, 667 ads were featured, a 43% increase over the 467 in the second quarter of 2003.

Higher Commercial performance was partially offset by the lower contribution of revenues from rotational and static advertising at soccer fields in Mexico. The Company is reorganizing its business model on more profitable clients and teams.

Services Division: Revenue totaled Ps. 196 in the quarter, in comparison with the Ps. 176 recorded in the same period of 2003. The 11% increase is mainly attributable to a higher number of tickets sold for own live events in Mexico and South America, despite a slight decrease in the volume of tickets sold for third party venues and live events affiliates in Mexico during the quarter, in comparison to the same period of the previous year.

GROSS PROFIT Gross profit for the quarter reached Ps. 722, 13% greater than the Ps. 636 recorded in the same period of 2003. The gross margin of 37.4% was 70 basis points lower that 38.0% gross margin registered in the second quarter of 2003, primarily as a result of the recently added Sports Books & Yaks units that have not yet reached full revenue-generating capacity.

EBITDA The Group recorded EBITDA (“earnings before interest, taxes, depreciation and amortization”) of Ps. 437, a 12.7% increase over the Ps. 388 of 2003. EBITDA margin for the period was 22.6%, a decline of 57 basis points from the 23.2% margin recorded in 2003.

The temporary adjustment in EBITDA margin resulted primarily from the addition of new Sports Books & Yaks units, an effect that shall remain while new units start-up and approach maturity. However, as units reach their full revenue-generating capacity, the proportionate impact of a greater number of mature units should compensate for this short-term temporary affect on EBITDA margin.

As of June 30, 2004 CIE had opened 28 of the 45 shops in the country for which it holds licenses. In the next six months, the Company plans to open between five and seven additional units, which will continue to weigh on EBITDA margins as previously expected and stated by the Company.

OPERATING INCOME Income from operations was Ps. 311 versus Ps. 273 for the same quarter a year ago, an increase of 14%. Operating margin for the quarter was 16.1%, 21 basis points lower than the 16.3% operating margin recorded in the second quarter of 2003.

The decrease in operating margin is due to a greater level of depreciation and amortization, which increased 10% from Ps. 115 in the second quarter of 2003 to Ps. 126 in the current period, reflecting a higher base of fixed assets. EBIT margin was also affected by the lower EBITDA contribution.

COMPREHENSIVE COST OF FINANCING (“CCF”) The following table compares the CCF for the three months ended June 30, 2004 with that of the year ago period.

Second Quarter 2004 Results Page 4

2Q 2004 2Q 2003 VAR % Interest Expense 111 104 6.9% Interest Income 7 12 (42.4)%

Foreign Exchange (Gain) Loss – Net (11) 64 N.A. Monetary Position (Gain) Loss - 10 (101.7)% Total 115 38 205.1%

The Company recorded Ps. 115 as CCF in the second quarter of the year, in comparison to the Ps. 38 registered in the same period of 2003. This increase was the combined effect of:

a. A Ps. 11 net foreign exchange loss recorded in the 2004 period as a result of the peso devaluation, compared with the Ps. 64 gain in the same period last year; and,

b. An increase of 13% or Ps. 12 in net interest expense, from Ps. 92 in the year ago period, to Ps. 104 in the current quarter: • A 42% reduction in interest income, totaling Ps. 7 in the 2004 period, as compared with Ps. 12 in the prior year, explained by a lower level of cash and cash equivalents; and, • Higher interest expense in the current quarter, totaling Ps.111, in comparison to the Ps. 104 in the second quarter of 2003, mainly due to a higher level of debt.

However and partially offsetting these increases, the Company recorded a marginal monetary position gain during the period, in comparison with a Ps. 10 monetary loss during the second quarter of 2003.

Debt as of June 30, 2004 Total: $4,881 DENOMINATION MATURITIES

US Dollars Long Term (3%) Short Term (81%) (19%)

UDIs Mexican Pesos

(44%) (53%)

OTHER EXPENSES During the quarter, the Company recorded a Ps. 40 non-cash charge as other expenses, as it entered into the restructuring of the rotational advertising business model, based on a profitability per-client and per-team analysis conducted after the first football season of 2004. The Company intends to reorganize its strategy in two dimensions (i) its advertising selling process and (ii) the acquisition of future exclusive rights of football teams.

PROVISIONS FOR TAXES Second Quarter 2004 Results Page 5

CIE recorded Ps. 62 in tax provisions during the current period, compared to Ps. 91 in the second quarter of 2003.

MAJORITY NET RESULT The Company registered a majority net result of Ps. 95 in the second quarter of the year, in comparison to a majority net result of Ps. 115 recorded in the same period of 2003. The majority net result of this period was principally affected by the non-cash charge resulting from the restructuring of the rotational advertising business as previously stated.

DISCUSSION OF FIRST HALF RESULTS (“the period”)

REVENUES CIE recorded revenues of Ps. 3,541 for the period, a figure that favorably compares to Ps. 3,107 reached in the same period of last year. This 14% increase is mainly attributable to the following:

a. The growth in the number of live events due to a strong international and local event calendar in Argentina, Brazil and Mexico, which had been impacted in the year ago period by the Iraq war;

b. A total of 28 Sports Books & Yaks throughout Mexico, in comparison to 19 in the same period last year, in addition to an increased number of local and international exhibitions at Centro Banamex; and,

c. Strong theatrical performances in Spain, particularly the 21 month-run of Phantom of the Opera, which ended during the first half of 2004, as well as Cats and Cabaret.

The following table compares divisional revenues as a percentage of total for the first half of 2004 and 2003:

First Half Revenue by Division

1H 2004 2004 Total: Ps.3,541 1H 2003

372 333 11% 11% 464 426 13% 14%

2,704 2,349 76% 75%

Entertainment Services Commercial

Second Quarter 2004 Results Page 6

GROSS PROFIT Gross profit increased 11% in the first half of 2004, from Ps. 1,183 to Ps. 1,319. This increase was primarily due to the aforementioned 14% revenue increase. Gross margin adjusted 82 basis points to 37.3%, as compared with the 38.1% gross margin registered in the same period of 2003. This adjustment was the result of a higher cost of sales as percentage of revenues during the period, in comparison with the same period in 2003 primarily as a result of the recently added Sports Books & Yaks units that have not yet reached full revenue-generating capacity.

EBITDA The Group recorded EBITDA of Ps. 797, compared to Ps. 719 for the first half of 2003, an increase of 11%. Similarly, EBITDA margin for the first half of 2004 was 22.5%, compared to the 23.1% achieved in the first six months of 2003. The 61 basis point adjustment in EBITDA margin is a result of higher operating expenses as a percentage of revenues related to the opening of additional Books & Yaks. As mentioned previously, the proportionate impact of a greater number of mature units should compensate for this short-term temporary effect.

OPERATING INCOME Income from operations was Ps. 545 versus Ps. 498 for the same period a year ago, an increase of 9%. Operating margin for the period was 15.4%, 64 basis points lower than the 16.0% operating margin recorded in the first half of 2003.

The decrease in operating margin is due to a greater level of depreciation and amortization, which increased 14% from Ps. 220 in the first half of 2003 to Ps. 252 in the period, reflecting a higher base of fixed and deferred assets. To a lesser extent EBIT margin was also affected by a lower contribution in EBITDA.

CCF CCF in the period was Ps. 219 in comparison to Ps. 89 registered in the first six months of 2003 reflecting a 145% increase. This increase is fundamentally attributable to:

A change in the net foreign exchange result, which went from a net gain of Ps. 116 in the first six months of 2003, to a net loss of Ps. 14 in the same period of 2004; and, An increase of 15% in net interest expense which went from Ps. 182 in 2003, to Ps. 209 in the first half of 2004. This adjustment is principally the result of the increase in interest expense, which rose from Ps. 205 in the first six months of 2003 to Ps. 223 in 2004, attributed to the increase in debt by the Company.

However and partially offsetting these increases, the Company recorded Ps.4 as net monetary gain during the period, in comparison with a Ps.24 loss in the first six months of 2003.

TAXES CIE made a tax provision of Ps. 123 during the period, lower than the tax provision of Ps. 168 made in 2003.

MAJORITY NET INCOME Majority net income for the first half was Ps. 164, an 8% decrease over the Ps. 178 reported in the first half of 2003.

LIQUIDITY AND CAPITAL RESOURCES Operating activities provided resources of Ps. 326, which resulted mainly from a consolidated net result, depreciation and amortization and resources generated through working capital. Second Quarter 2004 Results Page 7

Liquidity and Capital Resources (in millions of pesos) June 30, 2004

Resources Provided by Operating Activities and Working Capital 326 CAPEX (384) Investments in Deferred Assets (100) Free Cash Flow (158) Financing Activities 109

Cash and Cash Equivalents at Start of Quarter 693 Cash and Cash Equivalents at End of Quarter 641

CIE utilized Ps. 384 in capital expenditures, including: a. The continued development of Sports Books & Yaks throughout the country, the Company opened three units during the quarter. During the year the Company expects to open between 5-7 additional units, currently under construction; b. Final and more intensive stages of development of the Wannado City™ children’s project at Sawgrass Mills Mall in Florida, which is scheduled to open in August 2004; c. Concession rights for the operation and build-out of overpasses in Guadalajara, Jalisco, Aguascalientes, Aguascalientes and , , in Mexico; d. The final completion stage of Granja Las Américas which is already open to the public; e. Acquisition of the 50% of Monterrey CART race held in April; f. Revamping and maintenance of amusement parks; and, g. Maintenance capex for several of CIE’s venues.

Investments in deferred assets of Ps. 100 included: a. Key moneys and pre-operating expenses for the opening of Sports Books & Yaks; and, b. Other rights for several types of live entertainment content.

OPERATING HIGHLIGHTS FROM THE QUARTER

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Music Events: The strong lineup of music events continued in the second quarter after the Iraq war led numerous artists to cancel and postpone their engagements in 2003. Concerts and artists presented in the second quarter of the year included:

Mexico: Blink-182, Creamfields, Creedence Clearwater Revisited, Eros Ramazzotti, Michael Bolton, Yes, MTV Movie Awards, MTV Fashionista, La Ley, Chayanne Tour, Hombres G, Miguel Bose, Vive Latino 2004, HA-ASH, Dos Chicos de Cuidado, Belinda, Joan Sebastian, Alegrijes y Rebujos, Holiday on Ice and others.

Argentina: Babasonicos, La Renga, , Intoxicados, Almafuerte, Bersuit, Decadentes and Rosario Flores.

Brazil: Maria Rita, Eros Ramazzotti, Jorge Aragao, Maroon 5, Dimmu Borginr, Zeca Pagodinho, Alcione, Los Hermanos, Circo Imperial, Kataklo, Dulce Pontes, Jorge Vercilo, Dejavú, Pitty, Emmerson Nogueira, Chivas Jazz Festival, Flávio Venturini, The Lemmonheads, Mumma Schanz, Moonspell, Luciana Mello, Detonautas, Gal Costa, Jota Quest, Lulus Santos, Alex Cohen, Ed Motta, Frejat and others.

Special and Corporate Events: CIE produced various special and corporate events in the Mexican market on behalf of numerous companies and brands, including Purina, Toyota, Banamex, Chrysler- Jeep-Dodge, Chrysler-Mercedes Benz, Wells Fargo, Sony, Pioneer, Phillips, Reto Corona, Vida TV, Aetna and many others.

Motor Sports: The Champ Car World Series, formerly known as the CART Series, took place on May 23, 2004 whereas in 2003 the Monterrey races took place in the first quarter; attendance exceeded 210,000 spectators. The Company is preparing for the third installment in , which is planned for November 5-7, 2004.

The Company is seeing positive results from its new motor sporting event Corona Challenge (Desafio Corona). The 8-city stock car circuit race has been well attended and the Company will continue to produce this event during the next two quarters, with the final leg ending in December of 2004.

Theatrical Productions: During the quarter, the Company’s Broadway-type productions included Les Misérables in Mexico City; and Phantom of the Opera, Cats and Cabaret in . In Brazil, Chicago premiered during the quarter while Phantom of the Opera culminated its successful performance in late June. The Company plans to replace this production with Mamma Mia! in November of this year.

Smaller productions of The Vagina Monologues, The Complete Abbreviated Works of William Shakespeare, Las Viejas Vienen Marchando, Proof and Todos Tenemos Problemas Sexuales continued their performances in Mexico City. Similarly in Brazil, smaller productions included, A Flor do Meu Bem Querer.

Amusement Parks: Wannado City™, designated the first “real-play park,” is preparing to debut a 140,000-square-foot venue at The Mills Corporation’s Sawgrass Mills in South Florida the second week of August. Aimed at 4 to 11 year olds, Wannado City recreates all the sites of a major city from the point of view of its “kidizens”. Inside the city, attractions offer 250 career possibilities, each designed to allow role playing or “real-play” decision making and responsibility.

Las Americas Horse Racetrack - During the first six months of the year, 727 horse races took place at Mexico City’s Las Americas horse race track, 3% less than the 751 races recorded in the same period of 2003. The 73 racing days scheduled in the period, a decrease from the prior year, reflect the change in the 2004 racing season in which Thursday races were eliminated.

Second Quarter 2004 Results Page 9

Centro Banamex – During the quarter Centro Banamex successfully hosted 19 expos. These included: Integra 2004 Expo Mega Health, Expo Seguridad 2004, Festival de la Palabra Cd. De México, Expo Recursos Humanos, Expo Publicitas 2004, Encuentro Aeronáutico, Expo Golf, Expo Management and many others at Centro Banamex’s 34,000 square meters of exhibition space. Centro Banamex currently has 20 expos planned for the remainder of the year.

Pedestrian Overpasses - As of June 30, 2004, CIE had installed over 667 advertising announcements on 182 overpasses, compared with 467 advertisements placed on 123 overpasses in the second quarter of last year.

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ABOUT CIE With its origins in 1990, Corporación Interamericana de Entretenimiento, S.A. de C.V. (“CIE”) is today the leading out-of-home entertainment company serving the Spanish- and Portuguese-speaking markets in Latin America, Spain and the of America. Through a unique vertical integration structure, the Company participates in numerous businesses that provide recreational and entertainment services and products.

These services and products primarily include: the operation of entertainment venues and amusement parks, the promotion and organization of diverse live events, trade fairs and exhibitions, the marketing of advertising sponsorships, and the sale of entrance tickets, food, beverages and souvenirs at public events and venues. The Company also participates in the film industry through the production and distribution of films and operates leading radio broadcasting stations in , Argentina.

Since 1995, CIE’s shares have trades on the Mexican Stock Exchange (BMV) under the ticker symbol “CIE B”.

NOTE: Except for the historic information here provided, statements included in this document regarding the Company's business outlook and anticipated financial/operating results or regarding the Company's growth potential, constitute forward-looking statements and are based on management expectations regarding the economic and business conditions in Mexico and the countries where CIE operates as well as the fluctuation of the Mexican peso compared to the U.S. dollar and/or other currencies.

The use of registered trademarks and commercial trademarks within this document are exclusively for illustrative purposes and are not meant to violate the rights of the creators and/or intellectual property laws applicable in the countries in which CIE, its subsidiaries, and those companies with which CIE maintains commercial or business relationships, operate.

(Financial statements to follow)

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