TELMEX:THIRD QUARTER 2006 OCTOBER 25,2006

FORM 6-K

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16 of

the Securities Exchange Act of 1934

For the month of October 2006

Commission File Number: 333-13580

Teléfonos de México, S.A. de C.V.

(Exact Name of the Registrant as Specified in the Charter)

Telephones of Mexico

(Translation of Registrant's Name into English)

Parque Vía 190

Colonia Cuauhtémoc

México City 06599, México, D.F.

(Address of principal executive offices)

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

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ____

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ____

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

Yes ..... No...Ö ..

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

 

 

 

TELÉFONOS DE MÉXICO, S.A. DE C.V.

STOCK EXCHANGE CODE: TELMEX QUARTER: 3 YEAR: 2006

 I N D E X

FS-01 CONSOLIDATED BALANCE SHEETS, AT SEPTEMBER 30, 2006 & 2005

FS-02 CONSOLIDATED BALANCE SHEETS - BREAKDOWN OF MAIN CONCEPTS -

FS-03 CONSOLIDATED BALANCE SHEETS - OTHER CONCEPTS -

FS-04 CONSOLIDATED STATEMENTS OF INCOME FROM JANUARY 01 TO SEPTEMBER 30, 2006 & 2005

FS-05 CONSOLIDATED STATEMENTS OF INCOME - BREAKDOWN OF MAIN CONCEPTS -

FS-06 CONSOLIDATED STATEMENTS OF INCOME - OTHER CONCEPTS -

FS-07 CONSOLIDATED QUARTERLY STATEMENTS OF INCOME FROM JULY 01 TO SEPTEMBER 30, 2006 & 2005

FS-08 CONSOLIDATED QUARTERLY STATEMENTS OF INCOME - BREAKDOWN OF MAIN CONCEPTS -

FS-09 CONSOLIDATED QUARTERLY STATEMENTS OF INCOME - OTHER CONCEPTS -

FS-10 CONSOLIDATED STATEMENTS OF CHANGES IN FINANCIAL POSITION FROM JANUARY 01 TO SEPTEMBER 30, 2006 & 2005

FS-11 CONSOLIDATED STATEMENTS OF CHANGES IN FINANCIAL POSITION - BREAKDOWN OF MAIN CONCEPTS -

FI-01 DATA PER SHARE - CONSOLIDATED INFORMATION

FI-02 RATIOS - CONSOLIDATED INFORMATION

ANNEX 1.- CHIEF EXECUTIVE OFFICER REPORT

ANNEX 2.- NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

ANNEX 3a.- SHARE INVESTMENTS -SUBSIDIARIES-

ANNEX 3b.- SHARE INVESTMENTS -AFFILATES-

ANNEX 5.- CREDITS BREAKDOWN

ANNEX 6.- FOREING EXCHANGE MONETARY POSITION

ANNEX 7.- CALCULATION AND RESULT FROM MONETARY POSITION

ANNEX 8.- DEBT INSTRUMENTS

ANNEX 9.- PLANTS, - COMMERCIAL, DISTRIBUTION AND/OR SERVICE CENTERS-

ANNEX 10.- RAW MATERIALS

ANNEX 11a.- SALES DISTRIBUTION PRODUCT - SALES -

ANNEX 11b.- SALES DISTRIBUTION PRODUCT - FOREIGN SALES -

ANALYSIS OF PAID CAPITAL STOCK

ANNEX 13.- PROJECT INFORMATION

ANNEX 14.- TRANSACTIONS IN FOREIGN CURRENCY AND EXCHANGE OF FINANCIAL STATEMENTS FROM FOREIGN OPERATIONS

GENERAL INFORMATION

BOARD OF DIRECTORS

 

 

MEXICAN STOCK EXCHANGE

Index

SIFIC/ICS

STOCK EXCHANGE CODE: TELMEX QUARTER: 3 YEAR: 2006

TELÉFONOS DE MÉXICO, S.A. DE C.V.

FS-01

CONSOLIDATED BALANCE SHEETS

AT SEPTEMBER 30, 2006 & 2005

(Thousands of Mexican Pesos)

Final printing

--- 

REF

S

CONCEPTS

QUARTER OF PRESENT

FINANCIAL YEAR

QUARTER OF PREVIOUS

FINANCIAL YEAR

Amount

%

Amount

%

s01

TOTAL ASSETS

265,235,162

100

268,096,531

100

s02

CURRENT ASSETS

64,472,829

24

65,050,916

24

s03

CASH AND SHORT-TERM INVESTMENTS

23,747,942

9

28,685,055

11

s04

ACCOUNTS AND NOTES RECEIVABLE (NET)

27,884,094

11

26,969,092

10

s05

OTHER ACCOUNTS AND NOTES RECEIVABLE (NET)

5,130,100

2

5,966,672

2

s06

INVENTORIES

1,467,530

1

941,978

0

s07

OTHER CURRENT ASSETS

6,243,163

2

2,488,119

1

s08

LONG - TERM

1,351,574

1

948,961

0

s09

ACCOUNTS AND NOTES RECEIVABLE (NET)

0

0

0

0

s10

INVESTMENT IN SHARES OF NON-CONSOLIDATED SUBSIDIARIES AND AFFILIATES

1,344,924

1

941,888

0

s11

OTHER INVESTMENTS

6,650

0

7,073

0

s12

PROPERTY, PLANT AND EQUIPMENT (NET)

156,665,244

59

157,603,421

59

s13

LAND AND BUILDINGS

0

0

0

0

s14

MACHINERY AND INDUSTRIAL EQUIPMENT

469,922,174

177

445,981,034

166

s15

OTHER EQUIPMENT

0

0

0

0

s16

ACCUMULATED DEPRECIATION

322,112,965

121

297,012,991

111

s17

CONSTRUCTIONS IN PROGRESS

8,856,035

3

8,635,378

3

s18

OTHER INTANGIBLE ASSETS AND DEFERRED ASSETS (NET)

14,490,885

5

11,892,245

4

s19

OTHER ASSETS

28,254,630

11

32,600,988

12

s20

TOTAL LIABILITIES

154,206,966

100

147,849,756

100

s21

CURRENT LIABILITIES

43,415,166

28

50,043,887

34

s22

SUPPLIERS

0

0

0

0

s23

BANK LOANS

6,440,539

4

3,740,070

3

s24

STOCK MARKET LOANS

1,650,000

1

13,201,208

9

s25

TAXES PAYABLE

2,649,721

2

2,605,923

2

s26

OTHER CURRENT LIABILITIES

32,674,906

21

30,496,686

21

s27

LONG - TERM LIABILITIES

92,646,190

60

79,479,118

54

s28

BANK LOANS

52,308,140

34

41,345,070

28

s29

STOCK MARKET LOANS

40,338,050

26

38,134,048

26

s30

OTHER LOANS

0

0

0

0

s31

DEFERRED LIABILITIES

0

0

0

0

s32

OTHER NON CURRENT LIABILITIES

18,145,610

12

18,326,751

12

s33

CONSOLIDATED STOCKHOLDERS' EQUITY

111,028,196

100

120,246,775

100

s34

MINORITY INTEREST

11,543,465

10

12,914,728

11

s35

MAJORITY INTEREST

99,484,731

90

107,332,047

89

s36

CONTRIBUTED CAPITAL

46,465,417

42

48,414,019

40

s79

CAPITAL STOCK (NOMINAL)

26,651,116

24

28,599,718

24

s39

PREMIUM ON SALES OF SHARES

19,814,301

18

19,814,301

16

s40

CONTRIBUTIONS FOR FUTURE CAPITAL INCREASES

0

0

0

0

s41

CAPITAL INCREASE (DECREASE)

53,019,314

48

58,918,028

49

s42

RETAINED EARNINGS AND CAPITAL RESERVE

122,114,249

110

126,675,508

105

s44

OTHER ACCUMULATED COMPREHENSIVE RESULT

(69,094,935)

(62)

(67,757,480)

(56)

s80

SHARES REPURCHASED

0

0

0

0

---

MEXICAN STOCK EXCHANGE

Index

SIFIC/ICS

STOCK EXCHANGE CODE: TELMEX QUARTER: 3 YEAR: 2006

TELÉFONOS DE MÉXICO, S.A. DE C.V.

FS-02

CONSOLIDATED BALANCE SHEETS

- BREAKDOWN OF MAIN CONCEPTS -

(Thousands of Mexican Pesos)

Final printing

--- 

REF

S

CONCEPTS

QUARTER OF PRESENT

FINANCIAL YEAR

QUARTER OF PREVIOUS

FINANCIAL YEAR

Amount

%

Amount

%

s03

CASH AND SHORT-TERM INVESTMENTS

23,747,942

100

28,685,055

100

s46

CASH

2,266,107

10

1,584,530

6

s47

SHORT-TERM INVESTMENTS

21,481,835

90

27,100,525

94

s07

OTHER CURRENT ASSETS

6,243,163

100

2,488,119

100

s81

DERIVATIVE FINANCIAL INSTRUMENTS

473,901

8

259,583

10

s82

DISCONTINUED OPERATIONS

0

0

0

0

s83

OTHER

5,769,262

92

2,228,536

90

s18

OTHER INTANGIBLE ASSETS AND DEFERRED ASSETS (NET)

14,490,885

100

11,892,245

100

s48

AMORTIZED OR REDEEMED EXPENSES

4,650,996

32

4,295,937

36

s49

GOODWILL

9,824,390

68

7,596,308

64

s51

OTHERS

15,499

0

0

0

s19

OTHER ASSETS

28,254,630

100

32,600,988

100

s84

INTANGIBLE ASSET FROM LABOR OBLIGATIONS

19,862,751

70

23,862,272

73

s85

DERIVATIVE FINANCIAL INSTRUMENTS

0

0

0

0

s50

DEFERRED TAXES

5,951,994

21

6,126,480

19

s86

DISCONTINUED OPERATIONS

0

0

0

0

s87

OTHER

2,439,885

9

2,612,236

8

s21

CURRENT LIABILITIES

43,415,166

100

50,043,887

100

s52

FOREIGN CURRENCY LIABILITIES

5,140,539

12

16,941,278

34

s53

MEXICAN PESOS LIABILITIES

38,274,627

88

33,102,609

66

s26

OTHER CURRENT LIABITIES

32,674,906

100

30,496,686

100

s88

DERIVATIVE FINANCIAL INSTRUMENTS

1,162,432

4

1,339,821

4

s89

INTEREST LIABILITIES

1,481,085

5

2,021,813

7

s68

PROVISIONS

0

0

0

0

s90

DISCONTINUED OPERATIONS

0

0

0

0

s58

OTHER CURRENT LIABILITIES

30,031,389

92

27,135,052

89

s27

LONG-TERM LIABILITIES

92,646,190

100

79,479,118

100

s59

FOREIGN CURRENCY LIABILITIES

82,696,190

89

71,210,978

90

s60

MEXICAN PESOS LIABILITIES

9,950,000

11

8,268,140

10

s31

DEFERRED LIABILITIES

0

0

0

0

s65

GOODWILL

0

0

0

0

s67

OTHERS

0

0

0

0

s32

OTHER NON CURRENT LIABILITIES

18,145,610

100

18,326,751

100

s66

DEFERRED TAXES

15,861,444

87

16,244,603

89

s91

OTHER LIABILITIES IN RESPECT OF SOCIAL INSURANCE

2,284,166

13

2,082,148

11

s92

DISCONTINUED OPERATIONS

0

0

0

0

s69

OTHER LIABILITIES

0

0

0

0

s79

CAPITAL STOCK

26,651,116

100

28,599,718

100

s37

CAPITAL STOCK (NOMINAL)

254,220

1

281,757

1

s38

RESTATEMENT OF CAPITAL STOCK

26,396,896

99

28,317,961

99

s42

RETAINED EARNINGS AND CAPITAL RESERVES

122,114,249

100

126,675,508

100

s93

LEGAL RESERVE

20,680,921

17

19,652,926

16

s43

RESERVE FOR REPURCHASE OF SHARES

0

0

0

0

s94

OTHER RESERVES

0

0

0

0

s95

RETAINED EARNINGS

80,992,695

66

86,262,834

68

s45

NET INCOME FOR THE YEAR

20,440,633

17

20,759,748

16

s44

OTHER ACCUMULATED COMPREHENSIVE RESULT

(69,094,935)

100

(67,757,480)

100.00

s70

ACCUMULATED MONETARY RESULT

(14,361,717)

21

(14,361,717)

21

s71

RESULT FROM HOLDING NON-MONETARY ASSETS

(58,405,405)

85

(58,829,374)

87

s96

CUMULATIVE RESULT FROM FOREIGN CURRENCY TRANSLATION

3,848,952

(6)

3,963,704

(6)

s97

CUMULATIVE RESULT FROM DERIVATIVE FINANCIAL INSTRUMENTS

386,431

(1)

346,254

(1)

s98

CUMULTATIVE EFFECT OF DEFERRED INCOME TAXES

(563,196)

1

1,123,653

(2)

s99

LABOR OBLIGATION ADJUSTMENT

0

0

0

0

s100

OTHERS

0

0

0

0

---

MEXICAN STOCK EXCHANGE

Index

SIFIC/ICS

STOCK EXCHANGE CODE: TELMEX QUARTER: 3 YEAR: 2006

TELÉFONOS DE MÉXICO, S.A. DE C.V.

FS-03

CONSOLIDATED BALANCE SHEETS

- OTHER CONCEPTS -

(Thousands of Mexican Pesos)

Final printing

---

REF

S

CONCEPTS

QUARTER OF PRESENT

FINANCIAL YEAR

QUARTER OF PREVIOUS

FINANCIAL YEAR

Amount

Amount

s57

OTHER CURRENT LIABILITIES WITH COST (s26)

0

0

s63

OTHER LOANS WITH COST (s32)

0

0

s72

WORKING CAPITAL

21,057,663

15,007,029

s73

PENSIONS FUND AND SENIORITY PREMIUMS

0

0

s74

EXECUTIVES (*)

119

127

s75

EMPLOYEES (*)

24,698

27,590

s76

WORKERS (*)

50,730

51,301

s77

OUTSTANDING SHARES (*)

20,337,607,170

22,540,581,570

s78

REPURCHASE OF OWN SHARER(*)

1,707,475,100

1,088,322,740

s101

RESTRICTED CASH (1)

0

0

s102

DEBT WITH COST OF AFFILIATES NON CONSOLIDATED

0

0

(*) THESE CONCEPTS SHOULD BE EXPRESSED IN UNITS.

  1. This item shall be filled in when there have been granted guarantees that affects cash and cash equivalents (s03)

 

NOTE:

In references s57 and s63 it is only included the amount corresponding to the debts of the accounts s26 and s32 respectively.

---

MEXICAN STOCK EXCHANGE

Index

SIFIC/ICS

STOCK EXCHANGE CODE: TELMEX QUARTER: 3 YEAR: 2006

TELÉFONOS DE MÉXICO, S.A. DE C.V.

FS-04

CONSOLIDATED STATEMENTS OF INCOME

- FROM JANUARY 01 TO SEPTEMBER 30, 2006 & 2005 -

(Thousands of Mexican Pesos)

Final printing

---

REF

R

CONCEPTS

QUARTER OF PRESENT

FINANCIAL YEAR

QUARTER OF PREVIOUS

FINANCIAL YEAR

Amount

%

Amount

%

r01

OPERATING REVENUES

128,088,648

100

127,374,830

100

r02

COST OF SALES AND SERVICES

67,396,838

53

68,644,788

54

r03

GROSS INCOME

60,691,810

47

58,730,042

46

r04

OPERATING EXPENSES

24,960,624

19

21,520,694

17

r05

OPERATING INCOME

35,731,186

28

37,209,348

29

r06

COMPREHENSIVE FINANCING COST

3,786,373

3

3,372,336

3

r07

INCOME AFTER COMPREHENSIVE FINANCING COST

31,944,813

25

33,837,012

27

r08

OTHER EXPENSES AND INCOMES (NET)

0

0

0

0

r44

SPECIAL ITEMS

0

0

0

0

r09

INCOME BEFORE INCOME TAX AND EMPLOYEE PROFIT SHARING

31,944,813

25

33,837,012

27

r10

PROVISIONS FOR INCOME TAX AND EMPLOYEE PROFIT SHARING

11,528,603

9

12,230,488

10

r11

NET INCOME AFTER INCOME TAX AND EMPLYEE PROFIT SHARING

20,416,210

16

21,606,524

17

r12

EQUITY IN NET INCOME OF NON-CONSOLIDATED SUBSIDIARIES AND AFFILIATES

315,905

0

(62,361)

0

r13

CONSOLIDATED NET INCOME OF CONTINUING OPERATIONS

20,732,115

16

21,544,163

17

r14

INCOME FROM DISCONTINUED OPERATIONS (NET)

0

0

0

0

r15

CONSOLIDATED NET INCOME BEFORE EXTRAORDINARY ITEMS

20,732,115

16

21,544,163

17

r16

EXTRAORDINARY ITEMS, NET EXPENSE (INCOME)

0

0

0

0

r17

NET EFFECT OF CHANGES IN ACCOUNTING PRINCIPLES

0

0

0

0

r18

NET INCOME

20,732,115

16

21,544,163

17

r19

NET INCOME OF MINORITY INTEREST

291,482

0

784,415

1

r20

NET INCOME OF MAYORITY INTEREST

20,440,633

16

20,759,748

16

---

MEXICAN STOCK EXCHANGE

Index

SIFIC/ICS

STOCK EXCHANGE CODE: TELMEX QUARTER: 3 YEAR: 2006

TELÉFONOS DE MÉXICO, S.A. DE C.V.

FS-05

CONSOLIDATED STATEMENTS OF INCOME

- BREAKDOWN OF MAIN CONCEPTS -

(Thousands of Mexican Pesos)

Final printing

---

REF

R

CONCEPTS

QUARTER OF PRESENT

FINANCIAL YEAR

QUARTER OF PREVIOUS

FINANCIAL YEAR

Amount

%

Amount

%

r01

OPERATING REVENUES

128,088,648

100

127,374,830

100

r21

DOMESTIC

90,984,347

71

93,395,632

73

r22

FOREIGN

37,104,301

29

33,979,198

27

r23

TRANSLATION INTO DOLLARS (***)

3,357,795

3

2,992,421

2

r06

COMPREHENSIVE FINANCING COST

3,786,373

100

3,372,336

100

r24

INTEREST EXPENSE

5,295,973

140

5,851,464

174

r42

LOSS (GAIN) ON RESTATEMENT OF UDI'S

0

0

0

0

r45

OTHER FINANCIAL COSTS

0

0

0

0

r26

INTEREST INCOME

1,586,320

42

3,274,709

97

r46

OTHER FINANCIAL PRODUCTS

0

0

0

0

r25

FOREIGN EXCHANGE LOSS (GAIN) (NET)

1,469,546

39

1,952,477

58

r28

RESULT FROM MONETARY POSITION

(1,392,826)

(37)

(1,156,896)

(34)

r10

PROVISION FOR INCOME TAX AND EMPLOYEE PROFIT SHARING

11,528,603

100

12,230,488

100

r32

INCOME TAX

10,658,145

92

12,078,214

99

r33

DEFERRED INCOME TAX

(1,343,350)

(12)

(2,202,892)

(18)

r34

EMPLOYEE PROFIT SHARING

2,213,808

19

2,355,166

19

r35

DEFERRED EMPLOYEE PROFIT SHARING

0

0

0

0

(***) THOUSAND DOLLARS

--- 

MEXICAN STOCK EXCHANGE

Index

SIFIC/ICS

STOCK EXCHANGE CODE: TELMEX QUARTER: 3 YEAR: 2006

TELÉFONOS DE MÉXICO, S.A. DE C.V.

FS-06

CONSOLIDATED STATEMENTS OF INCOME

- OTHER CONCEPTS -

(Thousands of Mexican Pesos)

Final printing

---

REF

R

CONCEPTS

QUARTER OF PRESENT

FINANCIAL YEAR

QUARTER OF PREVIOUS

FINANCIAL YEAR

Amount

Amount

r36

TOTAL REVENUES

128,088,648

127,374,830

r37

TAX RESULT FOR THE YEAR

0

0

r38

OPERATING REVENUES (**)

171,353,073

171,169,367

r39

OPERATING INCOME (**)

65,203,029

50,457,714

r40

NET INCOME OF MAJORITY INTEREST (**)

29,190,843

31,871,387

r41

NET INCOME (**)

29,555,485

32,981,289

r47

OPERATIVE DEPRECIATION AND ACCUMULATED

16,758,216

17,976,797

(**) INFORMATION OF THE PAST TWELVE MONTHS

---

   MEXICAN STOCK EXCHANGE

Index

SIFIC/ICS

STOCK EXCHANGE CODE: TELMEX QUARTER: 3 YEAR: 2006

TELÉFONOS DE MÉXICO, S.A. DE C.V.

FS-07

CONSOLIDATED QUARTERLY STATEMENTS OF INCOME

- FROM JULY 01 TO SEPTEMBER 30, 2006 & 2005 -

(Thousands of Mexican Pesos)

Final printing

---

REF

RT

CONCEPTS

QUARTER OF PRESENT

FINANCIAL YEAR

QUARTER OF PREVIOUS

FINANCIAL YEAR

Amount

%

Amount

%

rt01

OPERATING REVENUES

43,261,814

100

43,037,488

100

rt02

COST OF SALES AND SERVICES

22,411,833

52

22,978,938

53

rt03

GROSS INCOME

20,849,981

48

20,058,550

47

rt04

OPERATING EXPENSES

10,210,847

24

7,033,963

16

rt05

OPERATING INCOME

10,639,134

25

13,024,587

30

rt06

COMPREHENSIVE FINANCING COST

1,729,800

4

1,635,854

4

rt07

INCOME AFTER COMPREHENSIVE FINANCING COST

8,909,334

21

11,388,733

26

rt08

OTHER EXPENSES AND INCOMES (NET)

0

0

0

0

rt44

SPECIAL ITEMS

0

0

0

0

rt09

INCOME BEFORE INCOME TAX AND EMPLOYEE PROFIT SHARING

8,909,334

21

11,388,733

26

rt10

PROVISIONS FOR INCOME TAX AND EMPLOYEE PROFIT SHARING

3,330,206

8

3,792,574

9

rt11

NET INCOME AFTER INCOME TAX AND EMPLYEE PROFIT SHARING

5,579,128

13

7,596,159

18

rt12

EQUITY IN NET INCOME OF NON-CONSOLIDATED SUBSIDIARIES AND AFFILIATES

153,843

0

(16,619)

0

rt13

CONSOLIDATED NET INCOME OF CONTINUING OPERATIONS

5,732,971

13

7,579,540

18

rt14

INCOME FROM DISCONTINUED OPERATIONS (NET)

0

0

0

0

rt15

CONSOLIDATED NET INCOME BEFORE EXTRAORDINARY ITEMS

5,732,971

13

7,579,540

18

rt16

EXTRAORDINARY ITEMS, NET EXPENSE (INCOME)

0

0

0

0

rt17

NET EFFECT OF CHANGES IN ACCOUNTING PRINCIPLES

0

0

0

0

rt18

NET INCOME

5,732,971

13

7,579,540

18

rt19

NET INCOME OF MINORITY INTEREST

(278,747)

(1)

365,388

1

rt20

NET INCOME OF MAYORITY INTEREST

6,011,718

14

7,214,152

17

--- 

    MEXICAN STOCK EXCHANGE

Index

SIFIC/ICS

STOCK EXCHANGE CODE: TELMEX QUARTER: 3 YEAR: 2006

TELÉFONOS DE MÉXICO, S.A. DE C.V.

FS-08

CONSOLIDATED QUARTERLY STATEMENTS OF INCOME

- BREAKDOWN OF MAIN CONCEPTS -

(Thousands of Mexican Pesos)

Final printing

---

REF

RT

CONCEPTS

QUARTER OF PRESENT

FINANCIAL YEAR

QUARTER OF PREVIOUS

FINANCIAL YEAR

Amount

%

Amount

%

rt01

OPERATING REVENUES

43,261,814

100

43,037,488

100

rt21

DOMESTIC

31,609,707

73

31,272,509

73

rt22

FOREIGN

11,652,107

27

11,764,979

27

rt23

TRANSLATION INTO DOLLARS (***)

1,133,293

3

1,068,890

2

rt06

COMPREHENSIVE FINANCING COST

1,729,800

100

1,635,854

100

rt24

INTEREST EXPENSE

2,602,804

150

2,130,624

130

rt42

LOSS (GAIN) ON RESTATEMENT OF UDI'S

0

0

0

0

rt45

OTHER FINANCIAL COSTS

0

0

0

0

rt26

INTEREST INCOME

505,862

29

1,087,177

66

rt46

OTHER FINANCIAL PRODUCTS

0

0

0

0

rt25

FOREIGN EXCHANGE LOSS (GAIN) (NET)

527,603

31

1,007,925

62

rt28

RESULT FROM MONETARY POSITION

(894,745)

(52)

(415,518)

(25)

rt10

PROVISION FOR INCOME TAX AND EMPLOYEE PROFIT SHARING

3,330,206

100

3,792,574

100

rt32

INCOME TAX

3,040,191

91

4,050,316

107

rt33

DEFERRED INCOME TAX

(457,877)

(14)

(768,063)

(20)

rt34

EMPLOYEE PROFIT SHARING

747,892

22

510,321

13

rt35

DEFERRED EMPLOYEE PROFIT SHARING

0

0

0

0

(***) THOUSAND DOLLARS

---

MEXICAN STOCK EXCHANGE

Index

SIFIC/ICS

STOCK EXCHANGE CODE: TELMEX QUARTER: 3 YEAR: 2006

TELÉFONOS DE MÉXICO, S.A. DE C.V.

FS-09

CONSOLIDATED QUARTERLY STATEMENTS OF INCOME

- OTHER CONCEPTS -

(Thousands of Mexican Pesos)

Final printing

---

REF

RT

CONCEPTS

QUARTER OF PRESENT

FINANCIAL YEAR

QUARTER OF PREVIOUS

FINANCIAL YEAR

Amount

Amount

rt47

OPERATIVE DEPRECIATION AND ACCUMULATED IMPAIRMENT LOSSES

5,402,765

5,920,911

---

MEXICAN STOCK EXCHANGE

Index

SIFIC/ICS

STOCK EXCHANGE CODE: TELMEX QUARTER: 3 YEAR: 2006

TELÉFONOS DE MÉXICO, S.A. DE C.V.

FS-10

CONSOLIDATED STATEMENTS OF CHANGES IN FINANCIAL POSITION

- FROM JANUARY 01 TO SEPTEMBER 30, 2006 & 2005 -

(Thousands of Mexican Pesos)

Final printing

---

REF

C

CONCEPTS

QUARTER OF PRESENT

FINANCIAL YEAR

QUARTER OF PREVIOUS

FINANCIAL YEAR

Amount

Amount

c01

NET INCOME

20,732,115

21,544,163

c02

(+)(-) ITEMS ADDED TO INCOME WHICH DO NOT REQUIRE USING RESOURCES

20,617,785

17,779,209

c03

CASH FLOW FROM NET INCOME FOR THE YEAR

41,349,900

39,323,372

c04

CASH FLOW FROM CHANGES IN WORKING CAPITAL

(4,261,938)

(2,210,807)

c05

RESOURCES PROVIDED BY (USED FOR) OPERATING ACTIVITIES

37,087,962

37,112,565

c06

RESOURCES PROVIDED BY (USED FOR) EXTERNAL FINANCING ACTIVITIES

5,484,784

1,510,939

c07

RESOURCES PROVIDED BY (USED FOR) INTERNAL FINANCING ACTIVITIES

(27,780,790)

(18,694,485)

c08

RESOURCES PROVIEDED BY (USED FOR) FINANCING ACTIVITIES

(22,296,006)

(17,183,546)

c09

RESOURCES PROVIDED BY (USED FOR) INVESTMENT ACTIVITIES

(15,350,638)

(13,088,688)

c10

NET INCREASE (DECREASE) IN CASH AND SHORT-TERM INVESTMENTS

(558,682)

6,840,331

c11

CASH AND SHORT-TERM INVESTMENTS AT THE BEGINNIG OF PERIOD

24,306,624

21,844,724

c12

CASH AND SHORT-TERM INVESTMENTS AT THE END OF PERIOD

23,747,942

28,685,055

---

MEXICAN STOCK EXCHANGE

Index

SIFIC/ICS

STOCK EXCHANGE CODE: TELMEX QUARTER: 3 YEAR: 2006

TELÉFONOS DE MÉXICO, S.A. DE C.V.

FS-11

CONSOLIDATED STATEMENTS OF CHANGES IN FINANCIAL POSITION

- BREAKDOWN OF MAIN CONCEPTS -

(Thousands of Mexican Pesos)

Final printing

---

REF

C

CONCEPTS

QUARTER OF PRESENT

FINANCIAL YEAR

QUARTER OF PREVIOUS

FINANCIAL YEAR

Amount

Amount

c02

+(-) ITEMS ADDED TO INCOME WHICH DO NOT REQUIRE USING RESOURCES

20,617,785

17,779,209

c13

DEPRECIATION AND AMORTIZATION FOR THE YEAR

18,529,350

19,725,069

c41

+(-) OTHER ITEMS

2,088,435

(1,945,860)

c04

CASH FLOW FROM CHANGES IN WORKING CAPITAL

(4,261,938)

(2,210,807)

c18

+(-) DECREASE (INCREASE) IN ACCOUNT RECEIVABLE

(2,875,992)

124,552

c19

+(-) DECREASE (INCREASE) IN INVENTORIES

(1,048,073)

(338,394)

c20

+(-) DECREASE (INCREASE) IN OTHER ACCOUNT RECEIVABLE AND OTHER ASSETS

(3,139,047)

3,160,612

c21

+(-) INCREASE (DECREASE) IN SUPPLIERS ACCOUNT

0

0

c22

+(-) INCREASE (DECREASE) IN OTHER LIABILITIES

2,801,174

(5,157,577)

c06

RESOURCES PROVIDED BY (USED FOR) EXTERNAL FINANCING ACTIVITIES

5,484,784

1,510,939

c23

+ BANK FNANCING

20,532,166

22,853,018

c24

+ STOCK MARKET FINANCING

377,358

221,006

c25

+ DIVIDEND RECEIVED

0

0

c26

+ OTHER FINANCING

0

1,042,718

c27

(-) BANK FINANCING AMORTIZATION

(14,918,516)

(15,790,666)

c28

(-) STOCK MARKET FINANCING AMORTIZATION

(316,360)

(1,591,381)

c29

(-) OTHER FINANCING AMORTIZATION

(189,864)

(5,223,756)

c42

+ (-) OTHER ITEMS

0

0

c07

RESOURCES PROVIDED BY (USED FOR) INTERNAL FINANCING ACTIVITIES

(27,780,790)

(18,694,485)

c30

+ (-) INCREASE (DECREASE) IN CAPITAL STOCK

(1,507,145)

(1,000,634)

c31

(-) DIVIDENDS PAID

(6,342,383)

(6,655,003)

c32

+ PREMIUM ON SALE OF SHARES

0

0

c33

+ CONTRIBUTION FOR FUTURE CAPITAL INCREASES

(19,931,262)

(11,038,848)

c43

+ (-) OTHER ITEMS

0

0

c09

RESOURCES PROVIDED BY (USED FOR ) INVESTMENT ACTIVITIES

(15,350,638)

(13,088,688)

c34

+(-) DECREASE (INCREASE) IN STOCK INVESTMENTS OF PERMANENT NATURE

(2,261,115)

(3,803,299)

c35

(-) ACQUISITION OF PROPERTY, PLANT AND EQUIPMENT

(14,408,372)

(15,356,906)

c36

(-) INCREASE IN CONSTRUCTIONS IN PROGRESS

0

0

c37

+ SALE OF OTHER PERMANENT INVESTMENT

0

0

c38

+ SALE OF TANGIBLE FIXED ASSETS

0

0

c39

+ (-) OTHER ITEMS

1,318,849

6,071,517

--- 

MEXICAN STOCK EXCHANGE

Index

SIFIC/ICS

STOCK EXCHANGE CODE: TELMEX QUARTER: 3 YEAR: 2006

TELÉFONOS DE MÉXICO, S.A. DE C.V.

FI-01

DATA PER SHARE

- CONSOLIDATED INFORMATION -

(Thousands of Mexican Pesos)

Final printing

---

REF

D

CONCEPTS

QUARTER OF PRESENT

FINANCIAL YEAR

QUARTER OF PREVIOUS

FINANCIAL YEAR

Amount

Amount

d01

BASIC INCOME PER ORDINARY SHARE (**)

$1.44

$1.41

d02

BASIC INCOME PER PREFERENT SHARE (**)

$0.00

$0.00

d03

DILUTED INCOME PER ORDINARY SHARE (**)

$0.00

$0.00

d04

INCOME FROM CONTINUOUS OPERATIONS PER ORDINARY SHARE (**)

$1.44

$1.41

d05

EFFECT OF DISCONTINUOUS OPERATIONS ON INCOME FROM CONTINUOS OPERATIONS PER ORDINARY SHARE (**)

$0.00

$0.00

d06

EFFECT OF EXTRAORDINARY INCOME ON INCOME FROM CONTINOUS OPERATIONS PER ORDINARY SHARE (**)

$0.00

$0.00

d07

EFFECT OF CHANGES IN ACCOUNTING PRINCIPLES ON INCOME FROM CONTINOUS OPERATIONS PER ORDINARY SHARE (**)

$0.00

$0.00

d08

CARRYING VALUE PER SHARE

$4.89

$4.76

d09

ACUMULATED CASH DIVIDEND PER SHARE

$0.31

$0.30

d10

SHARE DIVIDENDS PER SHARE

0.00

shares

0.00

shares

d11

MARKET PRICE TO CARRYING VALUE

2.89

times

2.50

times

d12

MARKET PRICE TO BASIC INCOME PER ORDINARY SHARE (**)

9.81

times

8.44

times

d13

MARKET PRICE TO BASIC INCOME PER PREFERENT SHARE (**)

0.00

times

0.00

times

(**) INFORMATION OF THE PAST TWELVE MONTHS

---

MEXICAN STOCK EXCHANGE

Index

SIFIC/ICS

STOCK EXCHANGE CODE: TELMEX QUARTER: 3 YEAR: 2006

TELÉFONOS DE MÉXICO, S.A. DE C.V.

FI-02

RATIOS

- CONSOLIDATED INFORMATION -

(Thousands of Mexican Pesos)

Final printing

---

REF

P

CONCEPTS

QUARTER OF PRESENT

FINANCIAL YEAR

QUARTER OF PREVIOUS

FINANCIAL YEAR

YIELD

p01

NET INCOME TO OPERATING REVENUES

16.18%

16.91%

p02

NET INCOME TO STOCKHOLDERS' EQUITY (**)

29.34%

29.69%

p03

NET INCOME TO TOTAL ASSETS ( **)

11.14%

12.30%

p04

CASH DIVIDENDS TO PREVIOUS YEAR NET INCOME

21.49%

22.52%

p05

INCOME DUE TO MONETARY POSITION TO NET INCOME

6.71%

5.36%

ACTIVITY

p06

OPERATING REVENUES TO TOTAL ASSETS (**)

0.64

times

0.63

times

p07

OPERATING REVENUES TO FIXED ASSETS (**)

1.09

times

1.08

times

p08

INVENTORIES ROTATION (**)

52.30

times

77.57

times

p09

ACCOUNTS RECEIVABLE IN DAYS OF SALES

51.11

days

49.71

days

p10

INTEREST PAID TO TOTAL LIABILITIES WITH COST (**)

7.07%

8.37%

LEVERAGE

p11

TOTAL LIABILITIES TO TOTAL ASSETS

58.13%

55.14%

p12

TOTAL LIABILITIES TO STOCKHOLDERS' EQUITY

1.38

times

1.22

times

p13

FOREIGN CURRENCY LIABILITIES TO TOTAL LIABILITIES

56.96%

59.62%

p14

LONG-TERM LIABILITIES TO FIXED ASSETS

59.13%

50.42%

p15

OPERATING INCOME TO INTEREST PAID

6.74

times

6.35

times

p16

OPERATING REVENUES TO TOTAL LIABILITIES (**)

1.11

times

1.15

times

LIQUIDITY

p17

CURRENT ASSETS TO CURRENT LIABILITIES

1.48

times

1.29

times

p18

CURRENT ASSETS LESS INVENTORY TO CURRENT LIABILITIES

1.45

times

1.28

times

p19

CURRENT ASSETS TO TOTAL LIABILITIES

0.41

times

0.43

times

p20

AVAILABLE ASSETS TO CURRENT LIABILITIES

54.69%

57.31%

STATEMENT OF CHANGES IN FINANCIAL POSITION

p21

CASH FLOW FROM NET INCOME TO OPERATING REVENUES

32.28%

30.87%

p22

CASH FLOW FROM CHANGES IN WORKING CAPITAL TO OPERATING REVENUES

-3.32%

-1.73%

p23

RESOURCES PROVIDED BY OPERATING ACTIVITIES TO INTEREST PAID

7.00

times

6.34

times

p24

EXTERNAL FINANCING TO RESOURCES PROVIDED BY (USED FOR) FINANCING

-24.59%

-8.79%

p25

INTERNAL FINANCING TO RESOURCES PROVIDED BY (USED FOR) FINANCING

124.59%

108.79%

p26

ACQUISITION OF PROPERTY, PLANT AND EQUIPMENT TO RESOURCES PROVIDED BY (USED FOR) INVESTMENT ACTIVITIES

93.86%

117.32%

(**) INFORMATION OF THE PAST TWELVE MONTHS

---

MEXICAN STOCK EXCHANGE

Index

SIFIC/ICS

STOCK EXCHANGE CODE: TELMEX QUARTER: 3 YEAR: 2006

TELÉFONOS DE MÉXICO, S.A. DE C.V.

ANNEX 1

CHIEF EXECUTIVE OFFICER REPORT

Consolidated

Final printing

---

Highlights

3rd Quarter 2006

 

 

 

 

 

 

 

(3) Net debt is defined as short-term liabilities plus long-term debt less cash and equivalents.

Recent Events

New appointments

On September 20, 2006, the Board of Directors approved a modification of its organizational structure in which the company seeks to enhance the development of its strategic activities as well as to further increase its focus on operations. Jaime Chico Pardo was appointed Chairman of the Board of Directors, Carlos Slim Domit was appointed Co-chairman of the Board of Directors, Héctor Slim Seade was appointed Chief Executive Officer of TELMEX and Oscar von Hauske was appointed President of TELMEX International. These changes represent an organizational transition that strengthens the company's operating capacity and recognizes the experience of senior management.

 

Cash tender offer for shares of Embratel.

On September 27, the Commissâo de Valores Mobiliários de Brasil (CVM) granted the registration of the Voluntary Tender Offer for TELMEX to acquire all of the common and preferred shares of EMBRAPAR. On October 3, TELMEX announced that it commenced the tender offer that is estimated to expire on November 6, 2006 (unless the tender offer is extended or earlier terminated). Following the tender offer, TELMEX will carry out an auction in the Bolsa de Valores de São Paulo (BOVESPA) on November 7, 2006.

Share repurchase program

On September 20, the Board of Directors resolved to call for the Ordinary Shareholders' Meeting to be held on October 9, 2006, where they approved an increase in funds to purchase the company's own shares by 15 billion pesos. At that date, with the newly authorized funds the available balance was approximately 15.931 billion pesos.

 

Consolidated Income Statements

 

Revenues: In the third quarter, consolidated revenues increased 0.5%, mainly due to the 9.8% and 11.6% increases in Internet and corporate networks revenues, respectively; the 9.9% increase in other revenues, comprised primarily of yellow pages and Tiendas TELMEX (TELMEX stores). Additionally, interconnection revenues decreased 4.2% (calling party pays), domestic long distance revenues decreased 3.5% and international long distance revenues decreased 6.1%. For the nine months, revenues totaled 128.1 billion pesos, an increase of 0.6%.

 

Costs and expenses: Costs and expenses increased 8.7%, mainly due to a non-recurring charge of approximately 515 million reais from the agreements that Embratel carried out related to the ICMS tax (Imposto Sobre Circulação de Mercadoria e Prestação de Serviços). If this effect were eliminated, costs would have remained at the same level as the third quarter of 2005. This increase was also due to change in the accounting policy for PC sales in Mexico, offset by improved internal efficiencies reflected in the decrease of maintenance costs and consumption of materials. For the nine months, costs and expenses totaled 92.4 billion pesos, an increase of 2.4% compared with the same period of the previous year.

 

EBITDA (1) and operating income: EBITDA (1) totaled 16.8 billion pesos in the third quarter, a decrease of 13.7% compared with the same period of 2005. The EBITDA margin was 38.7%. Operating income totaled 10.6 billion pesos, 18.3% lower than the third quarter of 2005. The operating margin was 24.6%. If the non-recurring charge related to ICMS in Brazil were eliminated, EBITDA (1) and operating income would have totaled 19.4 billion pesos and 13.3 billion pesos, with margins of 44.8% and 30.6%, respectively. For the nine months, EBITDA totaled 54.3 billion pesos and operating income 35.7 billion pesos.

 

Comprehensive financing cost: Comprehensive financing cost totaled 1.7 billion pesos in the quarter, an increase of 5.7% compared with the third quarter of 2005. This resulting from: i) a net interest charge of 2.1 billion pesos in part due to the restructure, in July, of the 15.9 billion pesos of interest rate swaps that generated a charge of 291 million pesos, but improved the weighted fixed interest rate from 9.02% to 8.76%, ii) a net exchange loss of 528 million pesos from the impact of the third-quarter's exchange rate appreciation of 0.35 pesos per dollar. This impact was partially offset by the 5.735 billion dollars in dollar-peso hedges (weighted average exchange rate: 11.1130 pesos per dollar) and the 547 million dollars in dollar-reais hedges (weighted average exchange rate: 2.3925 reais per dollar) and a gain of 215 million pesos from the cross currency swaps acquired during the quarter, and iii) a gain in the monetary position of 895 million pesos, due to a higher inflation rate in Mexico during the quarter compared with the same period of the previous year.

 

Majority net income: Majority net income totaled 6.012 billion pesos, 16.7% lower than the same period of the previous year, mainly due to the non-recurring charge related to ICMS in Embratel in Brazil. If we exclude the ICMS charge, we estimate that majority net income would have reached 7.5 billion pesos, with an increase of 3.6% compared with the same period of 2005. Earnings per share at September 30, 2006 were 30 Mexican cents, and earnings per ADR were 54 US cents. For the nine months, majority net income totaled 20.441 billion pesos, a decrease of 1.5% compared with the same period of the last year.

 

Free cash flow: At September 30, resources provided by operating activities totaled 40 billion pesos, of which 21.438 billion were used in share repurchases, 6.342 billion in dividend payments and the rest in several investments.

 

Investments: In the first nine months of 2006, consolidated investment was the equivalent of 1.293 billion dollars, of which 81% was used for growth projects in the voice, data and transport infrastructure, 15.2% for operational support projects and operating needs and 3.8% for social telephony.

 

Debt: Gross total debt at September 30 was the equivalent of 9.116 billion dollars, an increase of 625 million dollars from a year ago. Consolidated net debt (3) increased in the quarter to the equivalent of approximately 76 million dollars, totaling 6.715 billion dollars. In the quarter, cross currency swaps were carried out to cover the exchange rate and interest rate risks related to the issuance of bonds with maturity in 2010 and 2015 for a total of 1.750 billion dollars (with interest rates of 4.75% and 5.50%, respectively). This transaction allowed TELMEX to hedge the 2010 and 2015 bonds at a strike price of 10.9275 pesos with fixed rates of 7.52% and 8.57%, respectively. Additionally, a syndicated bank loan was carried out for 500 million dollars with an average maturity of 5 years at an average interest rate of Libor +22.5 basis points and the syndicated bank loan of 2.5 billion dollars (issued in 2005) was increased to 3 billion dollars and increased its average maturity to 4.6 years at an average interest rate of Libor +24.6 basis points.

(3) Net debt is defined as short-term liabilities plus long-term debt, less cash and equivalents.

 

Repurchase of shares: For the nine months, the company used 21.438 billion pesos to repurchase its own shares. During the quarter, 7.3 billion pesos were used to repurchase 558,666,300 shares. On September 20, the Board of Directors resolved to call for the Ordinary Shareholders' Meeting to be held on October 9, 2006, where they approved to increase the funds to purchase the company's own shares by 15 billion pesos, and at that date, the balance was approximately 15.931 billion pesos.

Sección Amarilla (Yellow Pages): On October 24, TELMEX acquired an 80 percent interest in Cobalt Publishing, LLC, an affiliate of Blue Equity LLC, which publishes Enlace, the largest independent Spanish Yellow Pages directory publisher in the United States with presence in 18 States besides Internet.

TELMEX will rebrand the directories with the Sección Amarilla logo and name, a brand with over 100 years of experience in the directory business and currently publishes 135 directories across Mexico.

 

Mexico Operating Results

Lines in service

TELMEX competes with other local service providers in Mexico that are mainly focused on the high-income economic segments. That is the case of socioeconomic A and B segments where TELMEX serves 74% of the homes, while cable companies provide service to 93% of the homes. On the other hand, the company's commitment to meeting demand for telecommunications services has led us to be practically the only fixed-line operator with presence in socioeconomic segments C, D and E of the country. Therefore, approximately 60% of our lines generate less than 230 pesos per month.

From July to September 2006, TELMEX continued its growth-with-profitability policy for fixed lines in service, resulting in a clean-up of 129 thousand prepaid lines that were not generating usage. Along with the 202 thousand disconnections of fixed lines that pay rent, that resulted in 331 thousand disconnections. We will continue to clean-up prepaid lines that are not profitable for the rest of the year. At September 30, TELMEX had 18 million 601 thousand lines in service, an increase of 2.6% compared with the same period of the previous year. For the nine months, the line gain was 227 thousand resulting from 1 million 224 thousand connections and 997 thousand disconnections.

Local traffic

During the third quarter, local traffic decreased 0.6% over the same period in 2005, with a total of 6.734 billion local calls. Local traffic volume has been affected by competition from local and wireless telephony and by the migration of our switched traffic to corporate networks, which strengthens the data business. For the nine months, total local traffic was 20.085 billion calls, 0.2% higher than the same period of the previous year.

 

On the other hand, the measured service packages, Línea Hogar and Línea Más Negocio, totaled 227 thousand and 492 thousand customers, respectively. These figures validate our strategy to evolve toward a more predictable revenue flow produced by package offerings.

Long distance traffic

Domestic long distance (DLD) increased 2.1% compared with the third quarter of 2005, totaling 4.672 billion minutes. In the quarter, outgoing and incoming international long distance traffic maintained its growth trend due to the introduction of packages. Incoming international traffic increased 32.7%, totaling 1.797 billion minutes, and outgoing international traffic increased 3.9%, totaling 479 million minutes. The incoming-outgoing ratio was 3.8. For the nine months, international outgoing traffic totaled 1.421 billion minutes and incoming international traffic totaled 5.227 billion minutes, increases of 5.9% and 38.4%, respectively.

 

Domestic and international long distance packages totaled 1.6 million customers.

Interconnection

In the third quarter, interconnection traffic increased 14.6%, totaling 10.090 billion minutes. Calling party pays traffic increased 7.1%, and traffic from local and international operators increased 14.4%. Traffic generated by cellular companies that is terminated in TELMEX's network increased 24.3%. For the nine months, interconnection traffic totaled 28.7 billion minutes, an increase of 10.3%.

Internet and Corporate networks

During the third quarter, high-speed Internet Prodigy Infinitum (ADSL) added 217 thousand customers due to higher penetration of TELMEX packages (broadband and voice services), to the enhancement of our products and to the increase of 86.4% in PC sales compared with the same quarter of 2005. At September 30, there were 1 million 592 thousand Prodigy Infinitum (ADSL) customers, an annual increase of 76.1%. The total number of Internet access accounts, including Infinitum and dial-up, increased 23.1% compared with September 2005, totaling 2 million 492 thousand customers. Billed line equivalents of 64 Kbps to corporate customers increased 27.5%, reaching 2 million 217 thousand.

Mexico Financial Results

 

Revenues: Revenues in the third quarter totaled 31.8 billion pesos, a decrease of 1.2% compared with the same period of last year. Increases in revenues of 5.3% from corporate networks and 12.2% from Internet revenues were not enough to offset the decrease in prices in real terms of local and long distance services, which reflected the company's decision not to increase rates; the introduction of packages that promote usage but generate a decrease in revenues per call; and, finally, the 10% reduction of the calling party pays rate. If revenues from calling party pays were excluded, revenues would have decreased 0.2%. For the nine months, revenues totaled 93.5 billion pesos, a decrease of 1.5% compared with the same period of 2005.

 

 

 

 

 

 

Costs and expenses: In the third quarter, total costs and expenses were 19.6 billion pesos, a decrease of 4.4%. This decrease was due to lower interconnection costs (calling party pays), lower maintenance expenses and lower depreciation and amortization charges. For the nine months, total costs and expenses were 59 billion pesos, 2.9% lower than the same period of 2005.

 

 

 

 

 

EBITDA (1) and operating income: EBITDA (1) totaled 16.8 billion pesos in the third quarter, an increase of 1.1%. The EBITDA margin was 52.7%; an increase of 1.1 percentage points compared with the third quarter of 2005. The increase in EBITDA of the operations in Mexico was due to the increase in the data and Internet businesses, as well as tighter control and optimization of resources. Operating income totaled 12.2 billion pesos, 4.5% higher than the third quarter of 2005, and the operating margin was 38.5%, 2.1 percentage points higher than in the year-earlier period. For the nine months, EBITDA totaled 48.3 billion pesos, a decrease of 1.3%, and operating income totaled 34.5 billion pesos, an increase of 1.1%.

Investments: In Mexico total investments were 694 million dollars, of which 80.6% was used for growth and modernization projects for the voice, data and transport infrastructure, 12.7% for operational support projects and operating needs and 6.8% for social telephony.

Debt: At September 30, total debt was the equivalent of 8.066 billion dollars, an increase of 159 million dollars compared with last year. Net debt (3) in Mexico increased the equivalent of 374 million dollars to a total of 6.069 billion dollars.

(3) Net debt is defined as short-term liabilities plus long-term debt less cash and equivalents.

 

Latin America Financial Results

 

 

Brazil

In Brazil, efforts have been focused on consolidating Embratel's position in the data business for the commercial segment and increase local service offerings for the residential segment, resulting in an increase of 60.4% of billed line equivalents and an increase in local customers of 42.7% compared with the third quarter of 2005. At September 30, the company provided Net Fone services through Net's infrastructure to 115 thousand customers.

Local and domestic long distance traffic showed increases of 49.4% and 14.8% in the quarter, respectively, compared with the same period of 2005.

 

In the third quarter, revenues from the operations in Brazil totaled 2.063 billion reais, 8.2% higher than the same quarter of the previous year. Higher revenues were due to the 20.8% increase in the data business and to the 45.1% increase in local services.

 

During the quarter, Embratel reached an important agreement in process of approval with most of the Brazilian states regarding the ICMS tax (Imposto Sobre Circulação de Mercadoria e Prestação de Serviços), that reduced the impact of the fiscal contingency related to this tax that the company had for many years. The amount of the non-recurring charge was approximately 515 million reais. This effect, along with higher charges related to the Telecommunications Service Universal Fund (FUST) and the inclusion of Primesys, generated costs and expenses in the quarter of 2.385 billion reais, an increase of 41.1% compared with the third quarter of the previous year. Costs of sales and services increased 42.2%, totaling 272 million reais. Transport and interconnection costs totaled 844 million reais, an increase of 2.4%, and represented 35.4% of total costs and expenses. Commercial, administrative and general expenses increased 140.5% in the quarter.

 

EBITDA (1) and operating income had losses of 40 million reais and 348 million reais, respectively. If the non-recurring charge related to ICMS tax were excluded, EBITDA (1) and operating income would have totaled 475 million reais and 167 million reais in each case with margins of 23% and 8.1%, respectively.

Argentina

 

In the quarter, revenues from the operations in Argentina totaled 88.8 million Argentinean pesos, an increase of 8.3% compared with the same period of the previous year. The voice business that produced 51.5% of total revenues increased 9.1% due to the 30.3% increase in revenues from long distance and the 12.4% increase of local services. The corporate and Internet businesses increased 5%. Operating costs and expenses totaled 89.4 million Argentinean pesos in the quarter, an increase of 12.3% due to the increase of advertising and promotional expenses to increase the customer base. In the quarter, EBITDA (1) totaled 12.8 million Argentinean pesos, an increase of 12.3% compared with the same period of 2005 with a margin of 14.4%. The operating loss was 0.6 million Argentinean pesos in the quarter.

Colombia

In Colombia, revenues totaled 44.769 billion Colombian pesos in the third quarter, 47.6% higher than the same period of 2005. Higher revenues were mainly due to the integration of several corporate customers. Costs and expenses increased 43.4%. Of total costs, 34.4% corresponded to transport and interconnection, which increased 50.5%. Commercial, administrative and general expenses that produced 20.1% of total costs increased 44% due to advertising and promotional costs that were focused on the development of the SME market. Operating income totaled 10.228 billion Colombian pesos compared with operating income of 6.245 billion Colombian pesos in last year's third quarter. The operating margin was 22.8% compared with 20.6% registered in the third quarter of 2005. EBITDA (1) totaled 18.636 billion Colombian pesos with a margin of 41.6%, compared with 11.885 billion Colombian pesos and a margin of 39.2% in the same period of the previous year.

 

 

Chile

 

In the third quarter, revenues totaled 15.942 billion Chilean pesos, a decrease of 4.5% compared with the same period of 2005. The data and local service businesses maintained its growth with increases of 5% and 76.1%, respectively, compared with the same quarter of 2005. The Chilean long distance market continues to decrease due to the migration to mobile services and private networks that caused a decline in long distance revenues of 11.9%.

 

Costs and expenses in the third quarter totaled 16.716 billion Chilean pesos, an increase of 7.7% compared with the same period of 2005. Transport and interconnection costs increased 2.4% due to the increase of local access and to the increase of 13.3% in commercial, administrative and general expenses. In the quarter, there was an operating loss of 774 million Chilean pesos compared with operating income of 1.169 billion Chilean pesos in the same period of the previous year. EBITDA (1) totaled 1.872 billion Chilean pesos with a margin of 11.7% compared with 3.814 billion Chilean pesos in 2005.

Peru

 

In the third quarter, total revenues were 53.3 million New Soles, an increase of 15.6% compared with the same period of 2005. The voice business produced 62.3% of total revenues and increased 10.3% due to the 26.3% increase in lines in service. The corporate networks business increased 30.1%. In the quarter, costs and expenses grew 9.2%, due to the increase of 12.2% of transport and interconnection costs and a 9.5% increase in commercial, administrative and general expenses compared with the third quarter of the previous year. Operating income in the quarter totaled 3.7 million New Soles compared with 0.6 million New Soles in the same period of 2005. The operating margin was 6.8% compared with 1.4% in last year's third quarter. EBITDA (1) in the third quarter totaled 15.6 million new Soles with a margin of 29.3% compared with EBITDA (1) of 12.3 million New Soles and a margin of 26.6% in 2005.

 

Mexico Local and Long Distance Accounting Separation

Based on Condition 7-5 of the Amendments of the Concession Title of Teléfonos de México, the

commitment to present the accounting of the local and long distance services is presented

below for the third quarter of 2006 and 2005.

Mexico Local Service Business

Income Statements

[ millions of Mexican constant pesos as of September, 2006 ]

%

6 months

6 months

%

3Q 2006

3Q 2005

Inc.

2006

2005

Inc.

Revenues

Access, rent and measured service

Ps.

13,824

Ps.

14,307

(3.4)

Ps.

41,397

Ps.

42,812

(3.3)

LADA interconnection

1,146

1,090

5.1

3,351

3,236

3.6

Interconnection with operators

395

348

13.5

1,130

1,205

(6.2)

Interconnection with cellular

3,851

4,102

(6.1)

11,138

12,304

(9.5)

Other

2,330

2,067

12.7

7,502

6,513

15.2

Total

21,546

21,914

(1.7)

64,518

66,070

(2.3)

Costs and expenses

Cost of sales and services

5,287

5,851

(9.6)

15,870

16,802

(5.5)

Commercial, administrative and general

4,304

3,877

11.0

12,774

11,761

8.6

Interconnection

2,836

2,977

(4.7)

8,379

9,169

(8.6)

Depreciation and amortization

2,831

3,219

(12.1)

9,134

9,808

(6.9)

Total

15,258

15,924

(4.2)

46,157

47,540

(2.9)

Operating income

Ps.

6,288

Ps.

5,990

5.0

Ps.

18,361

Ps.

18,530

(0.9)

EBITDA (1)

Ps.

9,119

Ps.

9,209

(1.0)

Ps.

27,495

Ps.

28,338

(3.0)

EBITDA margin (%)

42.3

42.0

0.3

42.6

42.9

(0.3)

Operating margin (%)

29.2

27.3

1.9

28.5

28.0

0.5

Mexico Long Distance Service Business

Income Statements

[ millions of Mexican constant pesos as of September, 2006 ]

%

9 months

9 months

%

3Q 2006

3Q 2005

Inc.

2006

2005

Inc.

Revenues

Domestic long distance

Ps.

4,239

Ps.

4,362

(2.8)

Ps.

12,507

Ps.

12,802

(2.3)

International long distance

2,159

2,218

(2.7)

6,573

6,602

(0.4)

Total

6,398

6,580

(2.8)

19,080

19,404

(1.7)

Costs and expenses

Cost of sales and services

1,220

1,353

(9.8)

3,948

4,168

(5.3)

Commercial, administrative and general

1,371

1,275

7.5

4,065

3,896

4.3

Interconnection to the local network

1,010

961

5.1

2,945

2,852

3.3

Depreciation and amortization

578

672

(14.0)

1,820

1,997

(8.9)

Total

4,179

4,261

(1.9)

12,778

12,913

(1.0)

Operating income

Ps.

2,219

Ps.

2,319

(4.3)

Ps.

6,302

Ps.

6,491

(2.9)

EBITDA (1)

Ps.

2,797

Ps.

2,991

(6.5)

Ps.

8,122

Ps.

8,488

(4.3)

EBITDA margin (%)

43.7

45.5

(1.8)

42.6

43.7

(1.1)

Operating margin (%)

34.7

35.2

(0.5)

33.0

33.5

(0.5)

---

MEXICAN STOCK EXCHANGE

Index

SIFIC/ICS

STOCK EXCHANGE CODE: TELMEX QUARTER: 3 YEAR: 2006

TELÉFONOS DE MÉXICO, S.A. DE C.V.

ANNEX 2

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Thousands of Mexican Pesos)

Consolidated

Final printing

---

S 87 OTHERS

 

In this item there are included the inventories for telephone plant operation that at September 30, 2006 and 2005 rose $2,439,885 and $2,612,236, respectively which are valued by the average cost method and are updated based on the specific index method, without exceeding their market value.

 

S 84 INTANGIBLE ASSETS FOR LABOR OBLIGATIONS

 

In this item it is included the projected net asset accordingly with Bulletin D-3 Labor Obligations issued by the Mexican Institute of Public Accountants.

PROJECTED NET ASSETS (D-3)

 

At September 30, 2006 and 2005, the market value of the established pensions and seniority premium fund was greater than the accumulated benefit obligation (ABO) in Mexico, and pursuant to Bulletin D-3, it is not recognized neither any additional liability nor the related intangible asset and effect of labor obligation on stockholders' equity. As a result of the foregoing, the balance sheet presents a projected net asset.

 

S 23 AND S 28 BANK LOANS

 

In this item, there are included the banks' credits related to purchase programs to suppliers that have been reported in the suppliers' credits item of the Balance Sheet because long-term opening to suppliers does not exist in EMISNET.

On October 20, 2005, TELMEX signed an agreement to restructure the syndicated bank loan entered into on July 15, 2004 for 2.425 billion dollars to improve the credit conditions and increase the total amount to 2.5 billion dollars in two tranches, the first one for 1.5 billion dollars due in four years and the second one for 1 billion dollars due in six years. On August 11, 2006 the loan was restructured again in order to improve the credit conditions and increase the total amount to 3 billion dollars divided in three tranches, the first one for 1.3 billion dollars due in three years, the second one for 1 billion dollars due in five years and the third one for 700 million dollars due in seven years.

On June 30, 2006 Telmex signed a syndicated loan agreement in the amount of 500 million dollars divided into two tranches of 250 million dollars each one, due in four and six years, respectively.

 

 

S 24 AND S 29 STOCK MARKET LOANS

 

During 2001, TELMEX issued senior notes for U.S.$1.5 billion, maturing in 2006 and bearing 8.25% annual, interest payable semi-annually. From January to December, 2005, TELMEX repurchased in the market a portion of these senior notes in the amount of U.S. $431.6 million (nominal value). The difference between the repurchase price and the nominal value of the bonds is U.S.$ 15.6 million. On January 26, 2006, Telmex paid the outstanding balance that amounted U.S.$1,068.4 million.

 

 

On November 19, 2003, TELMEX issued a bond for U.S.$ 1.0 billion due 2008, with an annual; interest of 4.5%. Interest will be paid every six months.

On January 27, 2005, TELMEX placed senior notes in aggregate principal amount of U.S.$1.3 billion in two issuances of U.S.$650 million each, the first one maturing in 2010 and bearing interest at 4.75% annual and the second one maturing in 2015 and bearing interest at 5.50% annual. Interest will be paid every six months. On February 22, 2005, there was a reopening of this transaction and the amounts of such issuances increased to U.S. $950 million and U.S. $800 million, respectively.

On July 2006, cross currency swaps were carried out to cover the exchange rate and interest rate risks related to the issuance of bonds with maturity in 2010 and 2015 for a total of 1.750 billion dollars (with interest rates of 4.75% and 5.50%, respectively). This transaction allowed TELMEX to hedge the 2010 and 2015 bonds at a strike price of 10.9275 pesos with fixed rates of 7.52% and 8.57%, respectively.

On January 31, 2006, TELMEX placed abroad a senior note in the amount of Ps. 4.5 billion, maturing in 2016 and bearing interest at 8.75%. Interest will be paid semi-annually.

 

 

S 29 STOCK MARKET LOANS (LONG-TERM)

 

At September 30, 2006 and 2005, this item rose to $ 40,338,050 and $ 38,134,048, respectively and is comprised by the following:

 

2006

2005

Domestic Senior Notes

Ps 5,450,000

Ps. 6,907,560

US Dollar Senior Notes

30,388,050

31,226,488

Mexican Peso Senior Notes

Ps 4,500,000

0

 

S 32 OTHER LIABILITIES

 

At September 30, 2006 and 2005, this item rose to Ps 2,039,111 and Ps. 2,082,148, respectively, that corresponds to Embratel's labor obligations, as well as the actuarial obligations for labor termination in Mexico in the amount of Ps. 245,055 at September 30, 2006, based on the requirements of Bulletin D-3.

 

 

S 42 RETAINED EARNINGS AND CAPITAL RESERVES

 

In March 30, 2006 the Ordinary Shareholders Meeting approved to increase in Ps. 15 billion (face value), the amount authorized to acquire its own shares, bringing the total maximum amount to be used for this purpose to Ps. $ 15,215,538 (face value).

 

 

From January to September 2006, the Company acquired 1.704 billion Series L shares for Ps 21,393,953 (historical cost of Ps. 21,134,745) and 3.5 million Series A shares for Ps. 44,453 (historical cost of Ps. 43,828).

 

From January to September 2005, the Company acquired 1,083.9 million Series L shares for Ps. 11,636,193 (historical cost of Ps. 11,120,786) and 4.4 million Series A shares for Ps. 47,764 (historical cost of Ps. 45,641).

 

For comparative purposes, there was applied retroactively a two-for-one stock split effect, as approved by the Extraordinary Shareholders Meeting as of April 28, 2005 and effective as of May 25, 2005, to the shares acquired from January 1, 2005 to May 20, 2005.

 

The Company's repurchased shares are applied to unappropiated retained earnings in the amount the corresponding shares purchased exceeded capital stock.

 

Subsequent Event

 

In October 9, 2006 the Ordinary Shareholders Meeting approved to increase in Ps. 15 billion (face value), the amount authorized to acquire its own shares, bringing the total maximum amount to be used for this purpose to Ps. $ 15,931,293 (face value).

 

 

S 58 OTHER CURRENT LIABILITIES

 

At September 30, 2006 and 2005, this item rose to Ps. 30,254,626 and Ps. 27,135,052 respectively and is comprised by the following concepts:

 

2006

2005

Accounts payable

Ps. 17,866,269

Ps 15,903,208

Accrued liabilities

9,246,720

8,126,899

Deferred credits

3,141,637

3,104,945

 

 

S 73 PENSION FUND AND SENIORITY PREMIUMS

 

The Company has pensions plans and seniority benefit premiums that are established in defined pension plans that cover substantially all employees in Mexico.

 

Pension benefits are determined on the basis of compensation to employees in their final year employment, their seniority, and their age at the time of retirement.

The Company established an irrevocable trust fund to cover the payment of these obligations and has the policy of making annual contributions to such fund. These contributions are deductible for Mexican corporate income tax purposes. During the period comprised from January to September 2006, there were not contributions to the trust fund.

 

The transition liability, past services and variations in assumptions are being amortized over a period of twelve years, that is the estimated average remaining working-life of the Company's employees.

 

S 49 GOODWILL

 

The increase of Ps. 2,228,082 is mainly due to the goodwill for the acquisition of 100% of Primesys Soluçoes Empresarias, S.A. in November 2005 and for the acquisition of 18.5% of 2Wire, Inc., in January 2006 and for the acquisition 5.9% of additional interest of Net Serviços de Comunicaçâo, S.A.

 

 

 

COMPREHENSIVE INCOME

 

In the nine-month period ended in September 2006 and 2005, the components of comprehensive income are presented as follows:

 

 

2006

2005

Net income for the period

Ps. 20,732,115

Ps. 21,544,163

Result from holding non-monetary assets, net of deferred taxes

292,180

(2,786,659)

Fair value effect in Swaps, net of deferred taxes

121,701

(75,980)

Effect of instruments available for sale

0

1,177,409

Conversion effect

4,949,904

3,066,075

Comprehensive Income

26,095,900

22,925,008

 

 

NOTES TO CONSOLIDATED STATEMENTS OF CHANGES IN FINANCIAL POSITION

 

C 39 OTHER ITEMS

 

Includes inventories for operation of the telephone plant, marketable securities and instruments available for sale, deferred assets, as well as decreases of fixed assets.

 

RATIOS

 

P 08 INVENTORY TURNOVER RATE-COST

 

EMISNET automatically calculates the inventory turnover rate-cost by dividing the cost of sales and services (Ref. R 2) by the inventory of goods for sale (Ref. S 6), fact that affects the actual turnover.

 

RECLASIFICATIONS

 

Some of the figures of the 2005 financial statements have been reclassified to conform the presentation with the same used in the 2006 year.

---

MEXICAN STOCK EXCHANGE

Index

SIFIC/ICS

STOCK EXCHANGE CODE: TELMEX QUARTER: 3 YEAR: 2006

TELÉFONOS DE MÉXICO, S.A. DE C.V.

ANNEX 3a

SHARE INVESTMENTS SUBSIDIARIES

Consolidated

Final printing

---

COMPANY NAME

MAIN ACTIVITIES

NUMBER OF

SHARES

OWNERSHIP

%

Consertel, S.A. de C.V.

Investments in all types of businesses

106,419,052,434

100.00

Cía. de Teléfonos y Bienes Raíces, S.A. de C.V.

Real estate acquisition & leasing

1,034,000,000

100.00

Alquiladora de Casas, S.A. de C.V.

Real estate acquisition & leasing

686,001,490

100.00

Construcciones y Canalizaciones, S.A. de C.V.

Construction & maint. of telephone network

28,369,000

100.00

Empresa de Limpieza Mexicana, S.A. de C.V.

Cleaning Service Company

50,000

100.00

Renta de Equipo, S.A. de C.V.

Equipment, vehicles & real estate leasing

769,595,000

100.00

Multicomunicación Integral, S.A. de C.V.

Trunking, installation & sales services

662,482

100.00

Teleconstructora, S.A. de C.V.

Construction & maint. of telephone network

19,400,000

100.00

Anuncios en Directorios, S.A. de C.V.

Sale of advertising space in yellow pages

1,081,750

100.00

Operadora Mercantil, S.A. de C.V.

Marketing services

50,000

100.00

Impulsora Mexicana de Telecomunicaciones, S.A.

Network projects

4,602,225

100.00

Fuerza y Clima, S.A de C.V.

Air conditioning installation & maint.

4,925,000

100.00

Teléfonos del Noroeste, S.A. de C.V.

Telecommunications services

110,000,000

100.00

Aerocomunicaciones, S.A. de C.V.

Aeronautic radiocom. mobile serv.

89,034,600

99.99

Tecmarketing, S.A. de C.V.

Telemarketing services

6,850,000

100.00

Comertel Argos, S.A. de C.V.

Personnel services

6,000

100.00

Telmex International, Inc.

Holding Company in the U S A.

1,000

100.00

Instituto Tecnológico de Teléfonos de México, S.C

Trainning & research services

1,000

100.00

Buscatel, S.A. de C.V.

Paging services

142,445

100.00

Consorcio Red Uno, S.A. de C.V.

Design & integrated telecom. Services

167,691,377

100.00

Uninet, S.A. de C.V.

Data transmission services

67,559,615

100.00

Aerofrisco, S.A. de C.V.

Air Taxi services

6,360,624,600

100.00

Grupo Técnico de Administración, S.A. de C.V.

Management, consulting & org. Services

50,000

100.00

Teninver, S.A. de C.V.

Managment of yellow pages

9,912,982

100.00

Telcoser, S.A. de C.V.

Investments in all types of businesses

17,230,931

100.00

Fintel Holdings, L.L.C.

Investments in all types of businesses

1,490

100.00

Servicios Administrativos Tecmarketing, S.A. de C.V.

Software development, sales & management

60,687,728

100.00

Metrored Holdings S. R. L.

Telecommunications services

369,042,819

100.00

Telmex Chile Holding S.A.

Telecommunications services

158,829,369,072

100.00

Telmex Colombia S. A.

Telecommunications services

176,669,199

100.00

Telmex Perú S. A.

Telecommunications services

4,148,764

100.00

Embratel Participações, S.A.

Telecommunications services

715,018,262,899

72.31

---

MEXICAN STOCK EXCHANGE

Index

SIFIC/ICS

STOCK EXCHANGE CODE: TELMEX QUARTER: 3 YEAR: 2006

TELÉFONOS DE MÉXICO, S.A. DE C.V.

ANNEX 3b

SHARE INVESTMENTS AFFILATES

Consolidated

Final printing

---

COMPANY NAME

MAIN ACTIVITIES

NUMBER OF

SHARES

OWNERSHIP

TOTAL AMOUNT

(Thousands of

Mexican Pesos)

ACQUISITION

COST

PRESENT

VALUE

%

Grupo Telvista, S.A. de C.V.

Telemarketing in Mexico and USA

450

45.00

510,138

431,567

Centro Histórico de la Ciudad de México, SA de CV

Real estate services

80,020,000

21.77

80,020

107,345

TM & MS, LLC

Internet portal (T1MSN)

1

50.00

29,621

41,377

Net Serviços de Comunicação, S.A.

Cable TV operator

1,731,538,395

43.01

5,211,434

669,739

Eidon Software, S.A. de C.V.

Software development

35,567,911

22.74

35,568

51,970

2Wire, Inc.

Broadband Services

8,619,242

13.00

648,400

42,926

TOTAL INVESTMENT IN ASSOCIATES

6,515,181

1,344,924

OTHER PERMANENT INVESTMENTS

6,650

T O T A L

6,515,181

1,351,574

NOTES:

The number of shares in our affiliate company Net Serviços de Comunicação S.A. is 1,731,538,395. The 43.01 % corresponds to the percentage held directly and indirectly by Embratel Participações, S.A. in Net Serviços de Comunicação, S.A., therefore, the TELMEX's indirect effective holding in Net is 31.12%.

---

 

MEXICAN STOCK EXCHANGE

Index

SIFIC/ICS

STOCK EXCHANGE CODE: TELMEX QUARTER: 3 YEAR: 2006

TELÉFONOS DE MÉXICO, S.A. DE C.V.

ANNEX 5

CREDITS BREAKDOWN

(Thousands of Mexican Pesos)

Consolidated

Final printing

---

Credit Type / Institution

Amortization Date

Interest Rate

Amortization of Credits Denominated in Pesos

Amortization of Credits in Foreign Currency

Time Interval

Time Interval

Current

Year

Until 1

Year

Until 2

Year

Until 3

Year

Until 4

Year

Until 5

Years or

more

Current

Year

Until 1

Year

Until 2

Year

Until 3

Year

Until 4

Year

Until 5

Years or

more

BANKS

FOREIGN TRADE

BBV ARGENTARIA S.A. (1)

22/12/2007

6.12

0

0

0

0

0

0

88,878

88,878

88,878

0

0

0

BBVA BANCOMER (1)

10/10/2006

6.27

0

0

0

0

0

0

32,451

0

0

0

0

0

BCO SANTANDER CH NY (1)

22/12/2009

5.57

0

0

0

0

0

0

15,612

15,612

19,177

4,065

1,504

0

DEXIA BANK (1)

31/12/2014

6.37

0

0

0

0

0

0

136,720

136,720

234,768

196,095

168,621

178,285

EXPORT DEVELOPMENT C. (1)

22/04/2009

5.92

0

0

0

0

0

0

55,756

35,228

30,155

14,666

0

0

EXPORT DEVELOPMENT C. (1)

22/07/2011

5.67

0

0

0

0

0

0

0

34,255

34,255

34,255

34,255

34,255

JAPAN BANK INT. COOP. (1)

10/10/2011

6.25

0

0

0

0

0

0

473,589

473,589

947,179

947,179

947,179

1,420,637

NATEXIS BANQUE (2)

31/03/2022

2.00

0

0

0

0

0

0

2,706

18,010

20,716

20,716

20,716

160,023

SOCIETE GENERALE PARIS (1)

14/05/2007

6.12

0

0

0

0

0

0

75

15

0

0

0

0

VARIAS INSTITUCIONES (1) Y (6)

30/11/2013

6.73

0

0

0

0

0

0

408,479

827,291

1,162,363

893,194

1,071,893

1,696,698

VARIAS INSTITUCIONES (2)

01/07/2027

8.49

0

0

0

0

0

0

1,025,700

1,270,975

2,595,571

243,225

162,829

249,088

SECURED DEBT

COMMERCIAL BANK

BBVA BANCOMER (3)

26/02/2007

7.32

0

800,000

0

0

0

0

0

0

0

0

0

0

BBVA BANCOMER (4)

21/05/2007

7.67

0

500,000

0

0

0

0

0

0

0

0

0

0

BBVA BANCOMER (1)

07/07/2010

5.57

0

0

0

0

0

0

0

0

0

0

2,762,550

0

BBVA BANCOMER (1)

07/07/2012

5.62

0

0

0

0

0

0

0

0

0

0

0

2,762,550

CITIBANK, N.A. (1)

16/08/2009

5.57

0

0

0

0

0

0

0

0

0

14,365,260

0

0

CITIBANK, N.A. (1)

20/10/2009

5.62

0

0

0

0

0

0

0

0

0

0

0

11,050,200

CITIBANK, N.A. (1)

20/10/2011

5.70

0

0

0

0

0

0

0

0

0

0

0

7,735,140

OTHER

TOTAL BANKS

0

1,300,000

0

0

0

0

2,239,966

2,900,573

5,133,062

16,718,655

5,169,547

25,286,876

STOCK MARKET

LISTED STOCK EXCHANGE

UNSECURED DEBT

CERT. BURSAT TLMX 02 (5)

09/02/2007

8.21

0

1,650,000

0

0

0

0

0

0

0

0

0

0

CERT. BURSAT TLMX 01, 02-3-4(2)

31/05/2012

11.05

0

0

1,000,000

400,000

0

300,000

0

0

0

0

0

0

CERT. BURSAT TLMX 01-2(5)

26/10/2007

8.31

0

0

3,250,000

0

0

0

0

0

0

0

0

0

CERT. BURSAT TLMX 06 (4)

15/09/2011

7.57

0

0

0

0

0

500,000

0

0

0

0

0

0

4 1/2 SENIOR NOTES (2)

19/11/2008

4.50

0

0

0

0

0

0

0

0

0

11,050,200

0

0

5 1/2 SENIOR NOTES (2)

27/01/2015

5.50

0

0

0

0

0

0

0

0

0

0

0

8,840,160

4 3/4 SENIOR NOTES (2)

27/01/2010

4.75

0

0

0

0

0

0

0

0

0

0

10,497,690

0

8 3/4 SENIOR NOTES PESOS (2)

31/01/2016

8.75

0

0

0

0

0

4,500,000

0

0

0

0

0

0

SECURED DEBT

PRIVATE PLACEMENTS

UNSECURED DEBT

SECURED DEBT

TOTAL STOCK EXCHANGE

0

1,650,000

4,250,000

400,000

0

5,300,000

0

0

0

11,050,200

10,497,690

8,840,160

SUPPLIERS

TOTAL SUPPLIERS

OTHER CURRENT LIABILITIES AND OTHER CREDITS

S58 OTHER CURRENT LIABILITIES

30,031,389

0

0

0

0

0

0

0

0

0

0

0

TOTAL

30,031,389

2,950,000

4,250,000

400,000

0

5,300,000

2,239,966

2,900,573

5,133,062

27,768,855

15,667,237

34,127,036

NOTES:

A.- Interest rates:

The credits breakown is presented with an integrated rate as follows:

  1. Libor plus margin
  2. Fixed Rate
  3. TIIE
  4. TIIE plus margin
  5. CETES plus margin
  6. Local rate plus margin

B.- The following rates were considered:

  1. Libor at 6 months in U S dollars is equivalent to 5.3700 at September 30, 2006
  2. TIIE at 28 days is equivalent to 7.3225 at September 29, 2006
  3. TIIE at 91 days is equivalent to 7.5900 at September 28, 2006
  4. CETES at 182 days is equivalent to 7.4100 at September 28, 2006

C.- The suppliers' Credits are reclasified to Bank Loans because in this document, Emisnet, Long-Term opening to Suppliers' does not exist.

D.- Liabilities in foreign currency were exchanged at the prevailing exchange rate at the end of the reporting period, which at September 30, 2006 were as follows:

CURRENCY

AMOUNT

E.R.

DOLLAR (USD)

7,843,935

11.05

EURO (EUR)

36,328

13.99

E.- There are other liabilities in foreign currency for an equivalent amount of P. 651,305 thousand pesos.

---

MEXICAN STOCK EXCHANGE

Index

SIFIC/ICS

STOCK EXCHANGE CODE: TELMEX QUARTER: 3 YEAR: 2006

TELÉFONOS DE MÉXICO, S.A. DE C.V.

ANNEX 6

FOREIGN EXCHANGE MONETARY POSITION

(Thousands of Mexican Pesos)

Consolidated

Final printing

---

FOREIGN CURRENCY POSITION

DOLLARS

OTHER CURRENCIES

TOTAL

THOUSAND

DOLLARS

THOUSAND

PESOS

THOUSAND

DOLLARS

THOUSAND

PESOS

THOUSAND

PESOS

MONETARY ASSETS

1,253,783

13,854,558

1,486,113

16,421,846

30,276,404

LIABILITIES

8,044,703

88,895,584

1,419,697

15,687,933

104,583,517

SHORT-TERM LIABILITIES

628,795

6,948,317

1,351,922

14,939,003

21,887,320

LONG-TERM LIABILITIES

7,415,908

81,947,267

67,775

748,930

82,696,197

NET BALANCE

(6,790,920)

(75,041,026)

66,416

733,913

(74,307,113)

NOTES:

Assets and Liabilities in foreign currency were exchanged at the prevailing exchange rate at the end of the reporting period.

At the end of the quarter the exchange rates were as follows:

CURRENCY

E.R.

DOLLAR (USD)

11.05

EURO

14.00

CHILEAN PESO

0.02

ARGENTINEAN PESO

3.56

BRAZILIAN REAL

5.08

PERUVIAN SOL

3.40

COLOMBIAN PESO

0.0047

---

MEXICAN STOCK EXCHANGE

Index

SIFIC/ICS

STOCK EXCHANGE CODE: TELMEX QUARTER: 3 YEAR: 2006

TELÉFONOS DE MÉXICO, S.A. DE C.V.

ANNEX 7

CALCULATION AND RESULT FROM MONETARY POSITION

(Thousands of Mexican Pesos)

Consolidated

Final printing

--- 

MONTH

MONETARY

ASSETS

MONETARY

LIABILITIES

ASSETS (LIABILITIES)

MONETARY

POSITION

MONTHLY

INFLATION

MONTHLY

EFFECT

ASSET (LIABILITIES)

JANUARY

42,471,181

101,967,712

(59,496,531)

0.59

(351,030)

FEBRUARY

32,992,806

92,593,835

(59,601,030)

0.25

(149,003)

MARCH

35,396,169

93,820,697

(58,424,528)

0.10

(58,425)

APRIL

33,796,929

93,845,126

(60,048,196)

0.13

(78,063)

MAY

35,120,100

93,703,248

(58,583,147)

(0.44)

257,766

JUNE

35,607,344

94,566,926

(58,959,582)

0.16

(94,335)

JULY

35,511,288

95,266,029

(59,754,741)

0.12

(71,706)

AUGUST

42,091,723

101,712,741

(59,621,018)

0.42

(250,408)

SEPTEMBER

46,268,990

106,383,370

(60,114,380)

0.92

(553,052)

RESTATEMENT

0

0

0

0.00

(10,121)

CAPITALIZATION

0

0

0

0.00

0

FOREIGN CORP.

0

0

0

0.00

(85,797)

OTHER

0

0

0

0.00

51,348

TOTAL

(1,392,826)

NOTE:

Telmex's policy applies Mexican National Consumer Prices Index (NCPI) estimated from January to November, and real for December.

---

MEXICAN STOCK EXCHANGE

Index

SIFIC/ICS

STOCK EXCHANGE CODE: TELMEX QUARTER: 3 YEAR: 2006

TELÉFONOS DE MÉXICO, S.A. DE C.V.

ANNEX 8

DEBT INSTRUMENTS

Consolidated

Final printing

---

FINANCIAL LIMITED BASED IN ISSUED DEED AND/OR TITLE

Restrictions:

The long-term debt is subject to certain restrictive covenants with respect to maintaining certain financial ratios and the sale of assets, among others.

A portion of the debt is also subject to early maturity or repurchase at the option of the holders in the event of change of control of the Company, as defined in the related instruments. The definition of change of control varies from instrument to instrument; however, no change in control shall be considered to have ocurred as long as Carso Global Telecom, S.A. de C.V. (TELMEX' controlling company) or its current stockholders continue to hold the majority of the Company's voting shares.

CURRENT SITUATION OF FINANCIAL LIMITED

At September 30, 2006, the Company has complied with such restrictive covenants.

---

MEXICAN STOCK EXCHANGE

Index

SIFIC/ICS

STOCK EXCHANGE CODE: TELMEX QUARTER: 3 YEAR: 2006

TELÉFONOS DE MÉXICO, S.A. DE C.V.

ANNEX 9

PLANTS, - COMMERCIAL, DISTRUBUTION AND/OR SERVICE CENTERS -

Consolidated

Final printing

---

PLANT OR CENTER

ECONOMIC ACTIVITY

PLANT CAPACITY

UTILIZATION

(%)

NOT AVAILABLE

NOTES:

---

MEXICAN STOCK EXCHANGE

Index

SIFIC/ICS

STOCK EXCHANGE CODE: TELMEX QUARTER: 3 YEAR: 2006

TELÉFONOS DE MÉXICO, S.A. DE C.V.

ANNEX 10

RAW MATERIALS

Consolidated

Final printing

---

DOMESTIC

MAIN SUPPLIERS

IMPORT

MAIN SUPPLIERS

DOM.

SUBST.

PRODUCTION COST (%)

NOT AVAILABLE

NOTES :

---

MEXICAN STOCK EXCHANGE

Index

SIFIC/ICS

STOCK EXCHANGE CODE: TELMEX QUARTER: 3 YEAR: 2006

TELÉFONOS DE MÉXICO, S.A. DE C.V.

ANNEX 11a

SALES DISTRIBUTION BY PRODUCT

SALES

(Thousands of Mexican Pesos)

 Consolidated

Final printing

---

MAIN PRODUCTS

NET SALES

MARKET

PART.

(%)

MAIN

VOLUME

AMOUNT

TRADEMARKS

CUSTOMERS

DOMESTIC SALES

LOCAL SERVICE

0

41,676,011

0.0

LONG DISTANCE SERVICE

0

17,995,806

0.0

INTERCONNECTION

0

12,476,956

0.0

CORPORATE NETWORKS

0

7,981,040

0.0

INTERNET

0

6,922,533

0.0

OTHERS

0

3,932,001

0.0

FOREIGN SALES

NET SETTLEMENT

0

2,882,648

0

LOCAL SERVICE

0

3,160,921

0

LONG DISTANCE SERVICE

0

18,976,358

0

INTERCONNECTION

0

592,904

0

CORPORATE NETWORKS

0

8,896,563

0

INTERNET

0

1,993,488

0

OTHERS

0

601,419

0

TOTAL

128,088,648

---

MEXICAN STOCK EXCHANGE

Index

SIFIC/ICS

STOCK EXCHANGE CODE: TELMEX QUARTER: 3 YEAR: 2006

TELÉFONOS DE MÉXICO, S.A. DE C.V.

ANNEX 11b

SALES DISTRIBUTION BY PRODUCT

FOREIGN SALES

(Thousands of Mexican Pesos)

Consolidated

Final printing

---

MAIN PRODUCTS

NET SALES

DESTINATION

MAIN

VOLUME

AMOUNT

TRADEMARKS

CUSTOMERS

EXPORT

NET SETTLEMENT

0

2,756,567

FOREIGN SUBSIDIARIES

NET SETTLEMENT

0

126,081

LOCAL SERVICE

0

3,160,921

LONG DISTANCE SERVICE

0

18,976,358

INTERCONNECTION

0

592,904

CORPORATE NETWORKS

0

8,896,563

INTERNET

0

1,993,488

OTHERS

0

601,419

TOTAL

37,104,301

NOTES:

---

MEXICAN STOCK EXCHANGE

Index

SIFIC/ICS

STOCK EXCHANGE CODE: TELMEX QUARTER: 3 YEAR: 2006

TELÉFONOS DE MÉXICO, S.A. DE C.V.

ANALYSIS OF PAID CAPITAL STOCK

Consolidated

Final printing

--- 

SERIES

NOMINAL

VALUE

VALID

COUPON

NUMBER OF SHARES

CAPITAL STOCK

(Thousand pesos)

FIXED

PORTION

VARIABLE

PORTION

MEXICAN

PUBLIC

SUSCRIPTION

FIXED

VARIABLE

A

0.01250

0

450,644,058

0

0

450,644,058

5,633

0

AA

0.01250

0

8,114,596,082

0

8,114,596,082

0

101,432

0

L

0.01250

0

11,772,367,030

0

0

11,772,367,030

147,155

0

TOTAL

20,337,607,170

0

8,114,596,082

12,223,011,088

254,220

0

TOTAL NUMBER OF SHARES REPRESENTING CAPITAL STOCK ON THE REPORTING DATE OF THE INFORMATION:

20,337,607,170

NOTES:

---

MEXICAN STOCK EXCHANGE

Index

SIFIC/ICS

STOCK EXCHANGE CODE: TELMEX QUARTER: 3 YEAR: 2006

TELÉFONOS DE MÉXICO, S.A. DE C.V.

ANNEX 13

PROJECT INFORMATION

(Thousands of Mexican Pesos)

Consolidated

Final printing

---

ITEM

Thousand of Mexican Pesos

3th. Quarter 06

Jul-Sep

% of

Advance

Amount used

2006

Budget

2006

% of

Advance

DATA

732,176

17.1

2,215,950

4,285,501

51.7

INTERNAL PLANT

292,581

18.6

608,001

1,576,684

38.6

OUTSIDE PLANT

778,752

25.4

1,875,025

3,065,241

61.2

TRANSMISSION NETWORK

681,245

28.6

1,039,671

2,378,910

43.7

SYSTEMS

64,542

6.4

143,167

1,011,387

14.2

OTHERS

979,324

23.8

1,845,615

4,121,301

44.8

TOTAL INVESTMENT TELMEX MEXICO

3,528,620

21.5

7,727,429

16,439,024

47.0

LATINOAMERICA

405,424

20.8

1,268,010

1,951,421

65.0

EMBRATEL

2,288,244

34.3

5,412,933

6,680,507

81.0

TOTAL INVESTMENT

6,222,288

24.8

14,408,372

25,070,952

57.5

---

MEXICAN STOCK EXCHANGE

Index

SIFIC/ICS

STOCK EXCHANGE CODE: TELMEX QUARTER: 3 YEAR: 2006

TELÉFONOS DE MÉXICO, S.A. DE C.V.

ANNEX 14

TRANSACTIONS IN FOREIGN CURRENCY AND EXCHANGE OF FINANCIAL STATEMENTS FROM FOREIGN OPERATIONS

Consolidated

Final printing

---

Basis of translation of financial statements of foreign subsidiaries

 

The financial statements of the subsidiaries located abroad were translated into Mexican pesos, as follows:

The financial statements as reported by the subsidiaries abroad were adjusted to conform to accounting principles generally accepted in Mexico.

All balance sheet amounts, except for stockholders' equity, were translated at the prevailing exchange rate at the end of the reporting period; stockholders' equity accounts were translated at the prevailing exchange rate at the time capital contributions were made and earnings were generated. The statement of income amounts were translated at the prevailing exchange rate at the end of the reporting period. The translation into Mexican pesos is carried out after the related balances or transactions have been restated based on the inflation rate of the country in which the subsidiary operates.

Exchange differences and the monetary position effect derived from intercompany monetary items were not eliminated from the consolidated statements of income.

Translation differences are included in the caption Effect of translation of foreign entities and are included in stockholders' equity as part of the caption Other comprehensive income items.

---

 

MEXICAN STOCK EXCHANGE

Index

SIFIC/ICS

STOCK EXCHANGE CODE: TELMEX QUARTER: 3 YEAR: 2006

TELÉFONOS DE MÉXICO, S.A. DE C.V.

GENERAL INFORMATION

Consolidated

Final printing

---

ISSUER GENERAL INFORMATION

COMPANY:

ADDRESS:

ZIP:

CITY:

TELEPHONE:

FAX:

E-MAIL:

INTERNET PAGE:

TELEFONOS DE MEXICO, S.A. DE C.V.

PARQUE VIA 198, COL. CUAUHTEMOC

06599

MEXICO, D.F.

52 22 12 12

 

 

www.telmex.com

 

ISSUER FISCAL INFORMATION

TAX PAYER FEDERAL ID: FISCAL ADDRESS:

ZIP:

CITY:

TME 840315KT6

PARQUE VIA 198, COL. CUAUHTEMOC

06599

MEXICO, D.F.

OFFICERS INFORMATION

POSITION BMV:

POSITION:

NAME:

ADDRESS:

ZIP:

CITY:

TELEPHONE:

FAX:

E-MAIL:

CHAIRMAN OF THE BOARD

CHAIRMAN OF THE BOARD

ING. JAIME CHICO PARDO

PARQUE VIA 190 - 10TH. FLOOR OFFICE 1001, COL. CUAUHTEMOC

06599

MEXICO, D.F.

52 22 51 52

55 45 55 50

jchico@telmex.com

POSITION BMV:

POSITION:

NAME:

ADDRESS:

ZIP:

CITY:

TELEPHONE:

FAX:

E-MAIL:

CHIEF EXECUTIVE OFFICER

CHIEF EXECUTIVE OFFICER

LIC. HECTOR SLIM SEADE

PARQUE VIA 190 - 10TH. FLOOR OFFICE 1004, COL. CUAUHTEMOC

06599

MEXICO, D.F.

52 22 15 86

55 45 55 50

hslim@telmex.com

POSITION BMV:

POSITION:

NAME:

ADDRESS:

ZIP:

CITY:

TELEPHONE:

FAX:

E-MAIL:

CHIEF FINANCIAL OFFICER

CHIEF FINANCIAL OFFICER

ING. ADOLFO CEREZO PEREZ

PARQUE VIA 190 - 10TH. FLOOR OFFICE 1016, COL. CUAUHTEMOC

06599

MEXICO, D.F.

52 22 57 80

52 55 15 76

acerezo@telmex.com

POSITION BMV:

POSITION:

NAME:

ADDRESS:

ZIP:

CITY:

TELEPHONE:

FAX:

E-MAIL:

DISTRIBUTION OF CORPORATE INFORMATION DELEGATE

SUBDIRECTOR OF FINANCE

C.P. EDUARDO ROSENDO GIRARD

PARQUE VIA 198 - 5TH. FLOOR OFFICE 501, COL. CUAUHTEMOC

06599

MEXICO, D.F.

52 22 53 95

52 50 80 54

erosendo@telmex.com

POSITION BMV:

POSITION:

NAME:

ADDRESS:

ZIP:

CITY:

TELEPHONE:

FAX:

E-MAIL:

DISTRIBUTION OF BUYBACK INFORMATION DELEGATE

SHAREHOLDER SERVICES MANAGER

LIC. MIGUEL ANGEL PINEDA CATALAN

PARQUE VIA 198 - 2ND. FLOOR OFFICE 202, COL. CUAUHTEMOC

06599

MEXICO, D.F.

52 22 53 22

55 46 21 11

mpineda@telmex.com

POSITION BMV:

POSITION:

NAME:

ADDRESS:

ZIP:

CITY:

TELEPHONE:

FAX:

E-MAIL:

IN-HOUSE LEGAL COUNSEL

LEGAL DIRECTOR

LIC. SERGIO F. MEDINA NORIEGA

PARQUE VIA 190 - 2ND. FLOOR OFFICE 202, COL. CUAUHTEMOC

06599

MEXICO, D.F.

52 22 14 25

55 46 43 74

smedinan@telmex.com

POSITION BMV:

POSITION:

NAME:

ADDRESS:

ZIP:

CITY:

TELEPHONE:

FAX:

E-MAIL:

DISTRIBUTION OF FINANCIAL INFORMATION DELEGATE

SUBDIRECTOR OF FINANCE

C.P. EDUARDO ROSENDO GIRARD

PARQUE VIA 198 - 5TH. FLOOR OFFICE 501, COL. CUAUHTEMOC

06599

MEXICO, D.F.

52 22 53 95

52 50 80 54

erosendo@telmex.com

POSITION BMV:

POSITION:

NAME:

ADDRESS:

ZIP:

CITY:

TELEPHONE:

FAX:

E-MAIL:

DISTRIBUTION OF MATERIAL FACTS DELEGATE

INVESTORS RELATIONS MANAGER

ING. RUY ECHAVARRIA AYUSO

PARQUE VIA 198 - 7TH. FLOOR OFFICE 701, COL. CUAUHTEMOC

06599

MEXICO, D.F.

57 03 39 90

55 45 55 50

rechavar@telmex.com

POSITION BMV:

POSITION:

NAME:

ADDRESS:

ZIP:

CITY:

TELEPHONE:

FAX:

E-MAIL:

INVESTOR INFORMATION RESPONSIBLE

INVESTORS RELATIONS MANAGER

ING. RUY ECHAVARRIA AYUSO

PARQUE VIA 198 - 7TH. FLOOR OFFICE 701, COL. CUAUHTEMOC

06599

MEXICO, D.F.

57 03 39 90

55 45 55 50

ri@telmex.com

POSITION BMV:

POSITION:

NAME:

ADDRESS:

ZIP:

CITY:

TELEPHONE:

FAX:

E-MAIL:

SECRETARY OF THE BOARD OF DIRECTORS

LEGAL DIRECTOR

LIC. SERGIO F. MEDINA NORIEGA

PARQUE VIA 190 - 2ND. FLOOR OFFICE 202, COL. CUAUHTEMOC

06599

MEXICO, D.F.

52 22 14 25

55 46 43 74

smedinan@telmex.com

POSITION BMV:

POSITION:

NAME:

ADDRESS:

ZIP:

CITY:

TELEPHONE:

FAX:

E-MAIL:

PAYMENT RESPONSIBLE

SUBDIRECTOR OF FINANCE

C.P. EDUARDO ROSENDO GIRARD

PARQUE VIA 198 - 5TH. FLOOR OFFICE 501, COL. CUAUHTEMOC

06599

MEXICO, D.F.

52 22 53 95

52 50 80 54

erosendo@telmex.com

POSITION BMV:

POSITION:

NAME:

ADDRESS:

ZIP:

CITY:

TELEPHONE:

FAX:

E-MAIL:

FIDUCIARY DELEGATE

 

POSITION BMV:

POSITION:

NAME:

ADDRESS:

ZIP:

CITY:

TELEPHONE:

FAX:

E-MAIL:

OTHER

CHAIRMAN OF THE BOARD

LIC. CARLOS SLIM DOMIT

CALVARIO NUM 100 COL. TLALPAN

14000

MEXICO, D.F.

53 25 98 01

55 73 31 77

slimc@sanborns.com

---

MEXICAN STOCK EXCHANGE

Index

SIFIC/ICS

STOCK EXCHANGE CODE: TELMEX QUARTER: 3 YEAR: 2006

TELÉFONOS DE MÉXICO, S.A. DE C.V.

BOARD OF DIRECTORS

Consolidated

Final printing

---

POSITION

NAME

CHAIRMAN OF THE BOARD

ING.

JAIME

CHICO

PARDO

VICEPRESIDENT

LIC.

CARLOS

SLIM

DOMIT

VICEPRESIDENT

C.P.

JUAN ANTONIO

PEREZ

SIMON

HONORARY BOARD MEMBER

ING.

CARLOS

SLIM

HELU

BOARD PROPIETORS (INDEPENDENT)

SR.

EMILIO

AZCARRAGA

JEAN

BOARD PROPIETORS (INDEPENDENT)

ING.

ANTONIO

COSIO

ARIÑO

BOARD PROPIETORS (INDEPENDENT)

SRA.

LAURA

DIEZ BARROSO

DE LAVIADA

BOARD PROPIETORS (INDEPENDENT)

MTRA.

AMPARO

ESPINOSA

RUGARCIA

BOARD PROPIETORS (INDEPENDENT)

ING.

ELMER

FRANCO

MACIAS

BOARD PROPIETORS (INDEPENDENT)

LIC.

ANGEL

LOSADA

MORENO

BOARD PROPIETORS (INDEPENDENT)

SR.

ROMULO

O FARRIL JR.

(deceased in May 2006)

BOARD PROPIETORS (INDEPENDENT)

LIC.

FERNANDO

SENDEROS

MESTRE

BOARD PROPIETORS

LIC.

MARCO ANTONIO

SLIM

DOMIT

BOARD PROPIETORS

SR.

RAYFORD

WILKINS JR.

BOARD PROPIETORS

SR.

RICHARD

P.

RESNICK

BOARD PROPIETORS

SR.

LARRY

I.

BOYLE

BOARD PROPIETORS (INDEPENDENT)

C.P.

RAFAEL

KALACH

MIZRAHI

BOARD PROPIETORS (INDEPENDENT)

LIC.

RICARDO

MARTIN

BRINGAS

BOARD ALTERNATES

LIC.

PATRICK

SLIM

DOMIT

BOARD ALTERNATES

LIC.

ARTURO

ELIAS

AYUB

BOARD ALTERNATES

C.P.

JOSÉ HUMBERTO

GUTIERREZ-OLVERA

ZUBIZARRETA

BOARD ALTERNATES (INDEPENDENT)

LIC.

JORGE C.

ESTEVE

RECOLONS

BOARD ALTERNATES (INDEPENDENT)

ING.

ANTONIO

COSIO

PANDO

BOARD ALTERNATES (INDEPENDENT)

SR.

EDUARDO

TRICIO

HARO

BOARD ALTERNATES (INDEPENDENT)

SRA.

ANGELES

ESPINOSA

YGLESIAS

BOARD ALTERNATES (INDEPENDENT)

ING.

AGUSTIN

FRANCO

MACIAS

BOARD ALTERNATES (INDEPENDENT)

SR.

JAIME

ALVERDE

GOYA

BOARD ALTERNATES (INDEPENDENT)

C.P.

ANTONIO

DEL VALLE

RUIZ

BOARD ALTERNATES (INDEPENDENT)

LIC.

JOSE

KURI

HARFUSH

BOARD ALTERNATES (INDEPENDENT)

LIC.

FERNANDO

SOLANA

MORALES

BOARD ALTERNATES

LIC.

EDUARDO

VALDES

ACRA

BOARD ALTERNATES (INDEPENDENT)

LIC.

CARLOS

BERNAL

VEREA

BOARD ALTERNATES (INDEPENDENT)

LIC.

FEDERICO

LAFFAN

FANO

BOARD ALTERNATES

SR.

JORGE A.

CHAPA

SALAZAR

BOARD ALTERNATES (INDEPENDENT)

ING.

BERNARDO

QUINTANA

ISAAC

BOARD ALTERNATES (INDEPENDENT)

C.P.

FRANCISCO

MEDINA

CHAVEZ

STATUTORY AUDITOR

C.P.C.

ALBERTO

TIBURCIO

CELORIO

ALTERNATE STATUTORY AUDITOR

C.P.C.

FERNANDO

ESPINOSA

LOPEZ

SECRETARY OF THE BOARD OF DIRECTORS

LIC.

SERGIO

MEDINA

NORIEGA

ASSISTANT SECRETARY

LIC.

RAFAEL

ROBLES

MIAJA

---

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: October 25, 2006.

TELÉFONOS DE MÉXICO, S.A. DE C.V.

By: /s/__________________          

Name: Adolfo Cerezo Pérez
Title: Chief Financial Officer

 

Ref: Teléfonos de México, S.A. de C.V. - Third Quarter 2006.