Maxcom Reports Results for the First Quarter of 2008

MEXICO CITY, April 17 /PRNewswire-FirstCall/ -- Maxcom Telecomunicaciones, S.A.B. de C.V. ("Maxcom", or "the Company") (BMV: MAXCOM CPO), one of the leading integrated telecommunications companies in Mexico, today announced its unaudited financial and operating results for the quarter ended March 31, 2008.

NOTE: The monetary amounts presented in these tables have been prepared in accordance with Mexican Financial Reporting Standards ("NIF" or "Mexican GAAP"). Figures for the year 2008 are expressed in millions of current Mexican pesos, as explained in section "Adoption of New Accounting Standards". Figures for the year 2007 are expressed in millions of Mexican pesos of purchasing power at December 31, 2007. Monetary amounts may vary due to rounding.

Results | First Quarter 2008 Financial Highlights: -- First quarter 2008 revenues reached Ps. 624 million and increased by Ps. 94 million or 18% in comparison to the first quarter of 2007. -- EBITDA increased by 32% to reach Ps. 192 million in comparison to the first quarter of 2007. -- EBITDA margin increased by 327 basis points to 31% this reporting quarter, when compared to the same period last year. 1Q08 1Q07 change% Million Pesos Revenues 624 531 18% EBITDA 192 146 32% EBITDA Margin 31% 27% Adj. EBITDA 194 148 31% Adj. EBITDA Margin 31% 28% Net Income 8 (18) N.A. Pesos Earnings per Share Basic 0.01 - - Earnings per Share Diluted 0.01 - - Operating Highlights: -- Total company Revenue Generating Units(1) or RGU's, increased to 391,477 or 31% in the first quarter of 2008 compared to the same period last year. The Company recorded RGU net adds of 30,535 in the quarter. -- Total company customer base increased by 15% to reach 221,181 customers. -- When compared to the same period last year: - Voice RGU's (formerly voice lines in service) increased 23% to reach 347,539. Voice RGU's include residential voice, commercial voice, public telephony lines and wholesale lines. - Data residential RGU's increased by 86% to 17,531, of which 9,886 are DSL subscribers. -- The Company installed 2,820 public telephones during the quarter bringing the number of coin operated phones to 27,730. -- The company added 10,511 mobile RGU's to its residential and commercial business divisions during the first quarter, which brought to 14,846 the mobile RGU base. -- Pay TV number of RGU's reached 8,183. This product growth continues to reflect consumers' demand for high quality video services. Revenue Generating Units

The following table is expressed in Revenue Generating Units or RGU's. RGU is related to the sources of revenue, which may not always be the same as subscriber numbers. One person may subscribe to two different services thereby accounting for only one subscriber but for two RGU's.

Revenue Generating Unit is separately a telephone line, broadband internet subscriber, mobile subscriber or pay TV subscriber. A home or business may contain one or more RGU's. For example, a subscriber to pay TV services, broadband internet, mobile telephony service and residential telephony service would constitute four RGU's.

The term RGU represents an individual service subscriber who generates recurrent revenue for the Company. During the first quarter of 2008 Maxcom added a total of 30,535 revenue generating units. As of March 31, 2008, Maxcom reported a total of 391,477 RGU's, an increase of 31% in comparison to the same period last year.

RGU's 1Q 08 RGU's 1Q 07 RGU Customers 1Q 08 Customers 1Q 07 Customers Change% Change% Residential 266,348 215,259 208,674 186,806 28% 15% Commercial 75,229 5,922 60,680 5,527 24% 7% Public Telephony 27,730 N.A. 20,102 N.A. 38% N.A. Wholesale 22,170 N.A. 9,840 N.A. 125% N.A. Total 391,477 221,181 299,296 192,333 31% 15% Revenues

Maxcom total revenues for the first quarter of 2008 were Ps. 624 million, an increase of 18% over revenues of Ps. 531 million, recorded in the first quarter of 2007. The following table is a breakdown of the sources of revenue for the Company.

1Q 08 Weight% 1Q 07 Weight% change% Residential Ps. 263 42% Ps. 214 40% 23% Commercial 190 30% 116 22% 64% Public Telephony 94 15% 84 16% 13% Wholesale 72 12% 106 20% (32%) Other Revenue 5 1% 11 2% (57%) Total Ps. 624 100% Ps. 531 100% 18% Residential

The following table is a breakdown of RGU's for the residential business segment.

RGU's RGU's RGU 1Q 08 1Q 07 Change% Voice 227,139 199,273 14% Data 17,531 9,401 86% Mobile 13,495 - N.A. Pay TV 8,183 - N.A. Total 266,348 208,674 28%

Residential revenues represented 42% of the total during the first quarter, compared with 40% in the same quarter of 2007. Revenues in the residential business segment reached Ps. 263 million, an increase of 23% in comparison to Ps. 214 million in the first quarter of 2007.

The 23% increase in revenues is directly related to the 28% increase in RGU's and was mainly driven by:

1. An increase in the number of mobile RGU's to reach 13,495, and an increase in the number of pay TV RGU's to reach 8,183 as customers see a stronger value proposition than what is offered by the competition. The Company offers competitive prices through its bundled products in triple and quadruple play. Pay TV and mobile services were introduced at the end of 2007 and customers have quickly adopted the new high quality service and technology; 2. An increase in the number of data RGU's which increased by 86% to reach 17,531. This number includes 9,886 DSL subscribers as more customers are seeing the benefits of a broadband connection's higher speeds and the price advantage of buying with a bundle offer; and, 3. A 14% increase in voice RGU's (formerly voice lines in service) in the residential business segment to reach 227,139. The Company continues to build-out clusters in cities that are currently served which have allowed this growth rate.

However these revenue increases were partially affected by the Easter and Holy Week vacation periods which had an impact by lowering overall traffic through the network, in addition to having a fewer number of working days in the quarter in comparison to the first quarter of 2007.

In addition, residential RGU per customer increased from 1.12 in the first quarter of 2007 to 1.24 in the first quarter of this year demonstrating the company's ability to successfully up sell more services to the customer base.

Commercial

The following table is a breakdown of RGU's for the commercial business segment.

RGU's RGU's RGU 1Q 08 1Q 07 Change% Voice 70,500 57,809 22% Data 3,060 2,769 11% Mobile 1,351 - N.A. Other Services 318 102 212% Total 75,229 60,680 24%

Commercial revenues represented 30% of the total during the first quarter of 2008, compared with 22% in the same quarter of 2007. Revenues in the Commercial Business reached Ps. 190 million, an increase of 64% in comparison to Ps. 116 million in the same period of 2007.

The 64% or Ps. 74 million increase in revenues during the first quarter of 2008 is mainly explained by an increase in the average revenue per customer that the company recorded, a 24% increase in the number of RGU's and an increase in the sale of fiber optic backbone capacity in comparison to the first quarter of 2007. The increase in RGU's was mainly driven by:

1. A higher number of voice RGU's (formerly voice lines in service) which have increased by 22% to 70,500, primarily due to several small and medium business accounts that acquired tailored telecommunications solutions in the first quarter of the year; 2. A higher number of data customers in the quarter to reach 3,060. The Company recorded a total number of 949 DSL subscribers, among all other services offered. The 11% increase was negatively affected by the highly competitive commercial space in which the Company participates; 3. The introduction of mobile services to our commercial customers to reach 1,351; and, 4. The higher number of RGU's from other value added-services that the Company provides. Some of the services provided include: firewall protection, IT outsourcing services, hosting and others.

Nonetheless, the Easter and Holy Week vacation periods also impacted overall traffic through the network.

In addition, RGU per commercial customer increased from 10.98 in the first quarter of 2007 to 12.70 to the first quarter of 2008 demonstrating the ability of the commercial sales force in successfully up selling services to the customer base.

Public Telephony

The following table is a breakdown of RGU's for the Public Telephony Business segment.

RGU's RGU's RGU 1Q 08 1Q 07 Change% Public Telephony 27,730 20,102 38% Total 27,730 20,102 38%

Public Telephony represented 15% of total revenues during the first quarter of 2008. Revenues in this business totaled Ps. 94 million, an increase of 13% when compared to Ps. 84 million in 2007. The increase in revenues is attributed to the 38% growth in the base of public telephones installed. However and partially offsetting this revenue growth, as the number of public telephones continues to grow, the average revenue per public telephone tends to decline.

Wholesale

The following table is a breakdown of RGU's for the Wholesale Business segment.

RGU's RGU's RGU 1Q 08 1Q 07 Change% Wholesale 22,170 9,840 125% Total 22,170 9,840 125%

In 2008, Wholesale revenues decreased by 32% to reach Ps. 72 million, in comparison to the Ps. 106 million registered during the same quarter in the previous year. The decrease in the Wholesale Business was mainly driven by an average decline of 18% in long distance on net equal access termination rates, due to a more competitive market environment, in particular with national calling party pays (CPPn).

However and partially offsetting this average tariff decrease, the company interconnected new clients and restructured three switches to increase termination capacity. Also, the company was able to complete the interconnection with cellular providers in 72 locations across Mexico.

Other Revenue

Other revenue represented 1% of total revenues and reached Ps. 5 million, in comparison to Ps. 11 million or 2% of total revenues in the previous quarter. Other revenues are primarily comprised of lease of microwave frequencies and CPE sales.

Network Operation Cost

Network Operation Costs in the first quarter of 2008 increased 10% to reach Ps. 247 million in comparison to Ps. 225 million in the previous year or Ps. 22 million, which was mainly due to a 23% increase in installation expenses, an 11% increase in network operating services and a 1% increase in technical expenses, which are detailed below.

The increases in installation expenses were mainly due to a 27% increase in RGU's installed in the residential and commercial divisions.

The increases in network operating services were mainly in: 1. Public Telephony costs directly related to an increase of 38% in the number of public phones; 2. The amounts paid to carriers for calling party pays; 3. The amounts paid for pay TV content; and, 4. The lease of circuits and ports, among others.

However, these increases were offset by lower costs in long distance interconnection, directly related to lower wholesale average rates as previously explained.

The increases in technical expenses were due to higher costs associated with power and electricity services, partially offset by maintenance expenses and a better price in the lease of poles.

SG&A

SG&A expenses were Ps. 185 million in the first quarter of 2008, 16% above Ps. 160 million in the same period of 2007. The Ps. 25 million increase was mainly driven by higher salaries, wages and benefits as a result of an increasing headcount, specifically in the residential and commercial sale forces. These increases were partially offset by lower sales commissions, bad debt expenses and external advisory expenses, among others.

EBITDA and Adjusted EBITDA

EBITDA for the first quarter of 2008 was Ps. 192 million, a 32% increase from Ps. 146 million in the same period of last year. EBITDA Margin was 31% during the period, 327 basis points higher than 27% in the first quarter of 2007.

Adjusted EBITDA for the first quarter of 2008 was Ps. 194 million, 31% higher than Ps. 148 million in the same period of last year. Adjusted EBITDA Margin was 31% during the period, 310 basis points higher than 28% in the first quarter of 2007.

Operating Income

Operating Income for the first quarter of 2008 was Ps. 70 million, 26% higher than Ps. 56 million in the previous Year. Operating margin for the first quarter was 11%.

Comprehensive Financial Result

During the quarter, the Company registered a Comprehensive Financial Result of Ps. 63 million, a Ps. 2 million decrease when compared to Ps. 65 million in the same period of 2007.

1Q 08 1Q 07 Change Ps. Change% Net Interest Paid 49 54 (5) (9%) Exchange Rate (Gain) Loss - Net 14 22 (8) (36%) Monetary Position (Gain) Loss (11) 11 (100%) Total 63 65 (2) (3%)

The lower Comprehensive Financial Result was due to a decrease of 9% or Ps. 5 million on the amount of net interest paid which decreased from Ps. 54 million in the first quarter of 2007 to Ps. 49 million in the first quarter of 2008.

However and partially offsetting this decrease, the Company recorded the following:

1. As a result of the change in the accounting standards in Mexico, inflationary accounting (NIF B-10) is not required in a low-inflation environment. As of the first quarter of 2008 the Company prepared its financial statements in terms of current Mexican pesos. Therefore, the comprehensive financial result will no longer be affected by the results in monetary position. In this case the company recorded a monetary position gain of Ps. 11 million in the first quarter of 2007 which does not compare to the first quarter of 2008; and, 2. A net exchange rate loss of Ps. 14 million in the first quarter of 2008, compared to a net exchange rate loss of Ps. 22 million recognized in the same period of last year as a result of the Peso revaluation. At March 31, 2008 the exchange rate between the Mexican Peso and the United States Dollar was Ps. 10.6962, compared to Ps. 11.0507 at the end of March 31, 2007. Taxes

The Company cancelled Ps. 6 million in deferred income tax provisions during the first quarter 2008, compared to registering asset taxes of Ps. 9 million in the first quarter of 2007. During the first quarter of 2008 and according to the latest tax reform in Mexico, asset tax was replaced with the single rate corporate tax (Impuesto Empresarial a Tasa Unica). The Company is not subject to pay single rate corporate tax for this reporting quarter.

All income tax provisions are non-cash items. Net Income

The company posted net income during the first quarter of 2008 of Ps. 8 million, which compares favorably to a net loss of Ps. 18 million reported in the first quarter of 2007.

Liquidity and Capital Sources

Operating activities generated resources of Ps. 91 million, which resulted mainly from consolidated net income, non-cash items (such as depreciation and amortization), and resources generated by working capital.

Millions of Pesos March 31, 2008 March 31, 2007 Resources from Operations and Working Capital 91 (79) CAPEX (362) (230) Free Cash Flow (271) (309) Financing Activities(2) 19 355 Cash and Cash Equivalents at the Start of the Period 2,539 738 Cash and Cash Equivalents at the End of the Period 2,287 784 Capital Expenditures

Capital Expenditures during the period totaled Ps. 362 million, higher than the Ps. 230 million recorded in the first quarter of 2007. Capital Expenditures were primarily used for telephone network systems, the buildout of new clusters, and equipment for Maxcom's network expansion.

Indebtedness

At March 31, 2008 the Company reported its Indebtedness level at Ps. 2,233 million. The Company's leverage ratio measured by Debt/EBITDA, presented a profile reduction, from the level of 3.9 times in 2007 and reaching 3.1 times in 2008. In addition, net Debt/EBITDA presented an even more important profile reduction as a result of the recent initial public offering which yielded cash resources for the Company's expansion.

Adoption of New Accounting Standards

B-10: As of January 1, 2008, the company has adopted the changes to "Inflationary Effects", B-10 in accordance with the Mexican Financial Standards ("NIF") which establishes the rules for the recognition of inflationary effects in the country; furthermore, it incorporates changes such as, reclassifying accumulated results for non-monetary assets and has the possibility of choosing between the INPC (national consumer price index) and the value of UDIs. It has been determined that the country does not face an inflationary environment, and therefore the company as of January 1, 2008 will suspend the recognition of these inflationary effects in its financial information. Consequently, the financial information corresponding to the period ended March 31, 2007 is expressed in Millions of Mexican Pesos of purchasing power at December 31, 2007 (date on which bulletin B-10 was still in effect) and the financial information for March 31, 2008 is in current Mexican Pesos.

About MAXCOM

MAXCOM Telecomunicaciones, S.A.B. de C.V., headquartered in Mexico City, Mexico, is a facilities-based telecommunications provider using a "smart-build" approach to deliver last-mile connectivity to micro, small and medium-sized businesses and residential customers in the Mexican territory. MAXCOM launched commercial operations in May 1999 and is currently offering local, long distance, data, value-added, CATV and IP-based services on a full basis in greater metropolitan Mexico City, Puebla, Queretaro and Toluca, and on a selected basis in several cities in Mexico. The information contained in this press release is the exclusive responsibility of MAXCOM Telecomunicaciones, S.A.B. de C.V. and has not been reviewed by the Mexican National Banking and Securities Commission (CNBV) or any other authority. The registration of the securities described in this press release before the National Registry of Securities (Registro Nacional de Valores) held by the CNBV, shall it be the case, does not imply a certification of the investment quality of the securities or of MAXCOM's solvency. The trading of these securities by an investor will be made under such investor's own responsibility.

For more information contact: Juan-Carlos Sotomayor Lucia Domville Mexico City, Mexico New York City, NY (52 55) 1163 1104 (646) 284-9416 investor.relations@maxcom.com ldomville@hfgcg.com

This document may include forward-looking statements that involve risks and uncertainties that are detailed from time to time in the U.S. Securities and Exchange Commission filings of the Company. Words such as "estimate," "project," "plan," "believe," "expect," "anticipate," "intend," and similar expressions may identify such forward-looking statements. The Company wants to caution readers that any forward-looking statements in this document or made by the company's management involves risks and uncertainties that may change based on various important factors not under the Company's control. These forward-looking statements represent the Company's judgment as of the date of this document. The Company disclaims, however, any intent or obligation to update these forward-looking statements.

(1) For a full definition of Revenue Generating Unit (RGU) please see next page. (2) Includes Capital Stock from MAXCOM's recent IPO Proceeds MAXCOM TELECOMUNICACIONES, S.A.B. DE C.V. UNAUDITED CONSOLIDATED BALANCE SHEET In thousands of Mexican pesos ("Ps") March 31, 2007 March 31, 2008 Pesos US Dollars Pesos US Dollars ASSETS CURRENT ASSETS: Cash and cash equivalents Ps 783,837 $73,282 Ps 2,286,725 $213,789 Restricted Cash 3,243 303 - - 787,080 73,585 2,286,725 213,789 Accounts receivable: Customers, net of allowance 389,522 36,417 597,343 55,846 Value added tax refundable 144,984 13,555 174,878 16,350 Other sundry debtors 67,877 6,345 67,804 6,339 602,383 56,317 840,025 78,535 Inventory 34,849 3,258 28,058 2,623 Prepaid expenses 41,929 3,920 43,240 4,042 Total current assets 1,466,241 137,080 3,198,048 298,989 Restricted Cash Long Term - - - - Frequency rights, Net 86,432 8,081 78,989 7,385 Telephone network systems & Equipment, Net 3,440,458 321,652 4,440,897 415,184 Pre-operating expenses, Net 90,631 8,473 72,086 6,740 Intangible Assets, Net 202,190 18,903 202,367 18,919 Retirement obligations 14,939 1,397 17,650 1,650 Deposits 5,196 486 7,498 701 Prepaid expenses long term 25,842 2,416 20,012 1,871 Other assets 12,921 1,210 19,738 1,847 Total assets Ps 5,344,850 $499,698 Ps 8,057,285 $753,286 LIABILITIES CURRENT LIABILITIES: Interest Payable 77,021 7,201 83,855 7,840 Accrued expenses and other accounts payable 523,865 48,976 534,047 49,930 Bank Financing - - - - Senior notes, net 131,756 12,318 - - Notes payables 13,405 1,253 6,442 602 Commercial paper 154,307 14,426 - - Customers deposits 1,612 151 2,908 272 Payroll and other taxes payable 27,578 2,578 51,849 4,847 Total current liabilities 929,544 86,903 679,101 63,491 LONG-TERM LIABILITIES: Senior notes, net 1,989,405 185,992 2,139,240 200,000 Bank Financing - - - - Notes payable 11,698 1,094 3,549 332 Other accounts payable 26,393 2,468 24,500 2,291 Deferred taxes 88,190 8,245 87,368 8,168 Pensions and Postretirement Obligations 23,016 2,152 26,319 2,461 Other long term liabilities 9,830 919 53,542 5,005 Hedging Valuation 4,310 403 6,168 577 Total liabilities Ps 3,082,386 $288,176 Ps 3,019,787 $282,325 SHAREHOLDERS' EQUITY Capital stock 3,328,141 311,152 5,410,251 505,811 Premium on capital stock 255,538 23,891 886,349 82,866 Accumulated deficit (1,303,665) (121,881) (1,267,466) (118,497) Net loss for the period (17,550) (1,640) 8,364 781 Total shareholders' equity (deficit) Ps 2,262,464 $211,522 Ps 5,037,498 $470,961 Total liabilities and equity Ps 5,344,850 $499,698 Ps 8,057,285 $753,286 NOTES TO FINANCIAL STATEMENTS: Financial statements for 2007 are reported in Mexican pesos of purchasing power at December 31, 2007 For readers' convenience, all Peso amounts were converted to U.S. dollars at the exchange rate of Ps.10.6962 per US$1.00. MAXCOM TELECOMUNICACIONES, S.A.B. DE C.V. UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS 2007 AND 2008 QUARTERLY PERIODS In Thousands of Mexican pesos ("Ps") January 1 to January 1 to March 31, 2007 March 31, 2008 US US Pesos Dollars % Pesos Dollars % REVENUES Ps 530,506 $49,597 100% Ps 624,367 $58,372 100% Network operating services 188,191 17,594 35% 209,324 19,570 34% Technical expenses 32,829 3,069 6% 33,167 3,101 5% Installation expenses 3,854 360 1% 4,742 443 1% Cost of Network Operation 224,874 21,023 42% 247,233 23,114 40% GROSS PROFIT 305,632 28,574 58% 377,134 35,258 60% SG&A 159,834 14,943 30% 185,128 17,308 30% EBITDA 145,798 13,631 27% 192,006 17,950 31% Depreciation and amortization 90,056 8,419 121,883 11,395 Operating Income (Loss) 55,742 5,212 70,123 6,555 Comprehensive (Income) Cost of Financing: *Interest expense 65,157 6,092 73,786 6,898 **Interest (income), net (11,474) (1,073) (24,495) (2,290) Exchange (income) loss, net 22,499 2,103 13,918 1,301 Gain on net monetary position (11,545) (1,079) - - 64,637 6,043 63,209 5,909 Other (income) expense (524) (49) 4,725 442 Profit sharing - - - - INCOME (LOSS) BEFORE TAXES (8,371) (782) 2,189 204 Taxes: Asset tax 9,179 858 - - Income tax & deferred tax - - (6,175) (577) Total taxes 9,179 858 (6,175) (577) NET INCOME (LOSS) Ps (17,550) $(1,640) Ps 8,364 $781 *Adjusted EBITDA 148,240 13,859 193,541 18,094 % of revenue Adjusted EBITDA 28% 28% 31% 31% Weighted average basic shares 482,476,101 789,818,829 Weighted average fully diluted 528,574,233 834,734,070 Earnings per share basic - 0.01 Earnings per share diluted - 0.01 NOTES TO FINANCIAL STATEMENTS: Financial statements for 2007 are reported in Mexican pesos of purchasing power at December 31, 2007 For readers' convenience, all Peso amounts were converted to U.S. dollars at the exchange rate of Ps.10.6962 per US$1.00. MAXCOM TELECOMUNICACIONES, S.A.B. DE C.V. AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN FINANCIAL POSITION FOR THE 3 MONTHS ENDED MARCH 31, 2007 AND 2008 In thousands of Mexican In thousands of pesos ("Ps") US dollars 3 months 3 months ended 3 months ended ended on on March 31, on March 31, March 31, 2007 2008 2008 Operating Activities: Net Income (loss) Ps (17,550) Ps 8,364 $781 Depreciation & amortization 90,055 121,882 11,395 Labor obligations upon retirement 1,389 (263) (24) Deferred income tax (740) (9,350) (874) Capital options 2,441 1,535 144 Long term liabilities (85) - - Subtotal 75,510 122,168 11,422 Net change in operation: Account receivables net (116,873) (69,512) (6,499) Inventory 941 5,191 485 Prepaid expenses (2,032) (1,622) (152) Liabilities and other assets, net (36,967) 1,772 164 Resources provided by operation activities (79,421) 57,997 5,420 Financing Activities: Senior notes 355,233 53,766 5,029 Commercial paper (1,332) - - Bank financing - - - Capital stock 658 (3,240) (303) Resources provided by financing activities 354,559 50,526 4,726 Investing Activities: Telephone network system and equipment (207,965) (356,614) (33,340) Intangible assets (23,404) (3,027) (283) Other assets 777 (555) (52) Telereunion Investment - - - Resources used in investing activities (230,592) (360,196) (33,675) Cash and cash equivalents: (Decrease) in cash equivalents 44,546 (251,673) (23,529) Cash at beginning 739,291 2,538,398 237,318 Cash at end Ps. 783,837 Ps. 2,286,725 $213,789 Financial statements for 2007 are reported in Mexican pesos of purchasing power at December 31, 2007 For readers' convenience, all Peso amounts were converted to U.S. dollars at the exchange rate of Ps.10.6962 per US$1.00. MAXCOM TELECOMUNICACIONES, S.A.B. DE C.V. AND SUBSIDIARIES UNAUDITED CONDENSED CASH FLOW 2007 and 2008 QUARTERLY PERIOD In thousands of Mexican pesos ("Ps") January 1 to January 1 to US March 31, March 31, Dollars 2007 2008 Operating Activities: Income before Ps. (8,370) Ps. 2,189 $205 Items without cash flow (3,030) 39,242 3,669 Items related to investment activities 78,580 98,076 9,169 Items related to financing activities 65,157 73,786 6,898 Cash flow from income/loss before taxes 132,337 213,293 19,941 Cash flow from: Accounts receivables (63,152) (128,800) (12,042) Inventory 940 5,191 485 Accounts payables (11,857) 39,021 3,648 Other assets and liabilities (44,165) (12,193) (1,140) Income taxes (9,920) (3,175) (297) Cash flow from operation activities (128,154) (99,956) (9,345) Net cash flow from operating activities 4,183 113,337 10,596 Cash flow from capital expenditures (233,400) (361,953) (33,839) Cash in excess/(required) to be used in financing activities (229,217) (248,616) (23,243) Cash flow from: Senior notes 293,182 - - Vendor financing (55,679) (1,346) (126) Capital stock 660 - - Additional paid in capital - (3,242) (303) Other financing activities 14,632 23,392 2,187 Cash flow from financing activities 252,795 18,804 1,758 Increase (decrease) in cash and temporary investments 23,578 (229,812) (21,485) Exchange effects on cash and cash equivalents 748 (22,996) (2,150) Cash and cash equivalents at beginning of the period 762,754 2,539,533 237,424 Cash and cash equivalents at the end of the period Ps. 787,080 Ps. 2,286,725 $213,789 Financial statements for 2007 are reported in Mexican pesos of purchasing power at December 31, 2007 For readers' convenience, all Peso amounts were converted to U.S. dollars at the exchange rate of Ps.10.6962 per US$1.00.