The following table sets forth our selected financial data. The financial information presented for the fiscal years ended December 31, 2002, 2003 and 2004 was derived from our audited consolidated Financial Statements contained elsewhere herein. The Financial Statements have been prepared in accordance with IFRS, which differ in certain significant respects from U.S. GAAP. See Note 26 to our Financial Statements for the years ended December 31, 2002, 2003 and 2004 for a description of the principal differences between IFRS and U.S. GAAP applicable to us, which also includes: (i) a reconciliation to U.S. GAAP of majority net income and majority stockholder’s equity and (ii) condensed consolidated balance sheets and income statements under U.S. GAAP and additional U.S. GAAP disclosures.

      On May 13, 2003, we sold our 51% interest in TMM Puertos y Terminales, S. A. de C. V. (“TMMPyT”), included in our Ports and Terminals segment (which included our ports operations at Cozumel, Manzanillo, Veracruz and Progreso), for approximately $114 million in cash, subject to certain post-closing adjustments. On April 1, 2005, we finalized the sale of our interest in Grupo TFM to KCS, which comprised the remaining portion of our railroad operations segment. As consideration for the sale of our interest in Grupo TFM to KCS, Grupo TMM received $200 million in cash, $47 million, subject to certain adjustments specified below, in a 5% promissory note that will be paid to Grupo TMM in June 2007 and 18,000,000 shares of KCS common stock valued, as of April 1, 2005, at approximately $355 million. In addition, KCS agreed to make a payment of $110 million in cash and stock to Grupo TMM in the event that the VAT and Put lawsuits more fully described below are settled on certain terms. See Item 4. “Information on the Company — Recent Developments — Disposition of Grupo TMM’s interest in Grupo TFM to KCS” below.

      Under both IFRS and U.S. GAAP, the sold portion of our Ports and Terminals operations and the Railroad operations have been presented as discontinued operations. See Note 2 and Note 26(viii) to our Financial Statements.

      The following data should be read in conjunction with, and is qualified in its entirety by reference to, Item 5. “Operating and Financial Review and Prospects” and to our Financial Statements and the related Notes thereto included elsewhere herein.

Average Shares Outstanding

      Income per share is calculated based on the average number of shares outstanding in each relevant year. The average common shares outstanding as of December 31, 2000, 2001, 2002, 2003 and 2004 under IFRS were 17,441,590, 18,693,635, 56,963,137, 56,963,137 and 56,963,137, respectively.

Dividends

      At shareholders’ meetings, shareholders have the ability, at their discretion, to approve dividends from time to time. At the ordinary shareholders’ meeting held on April 24, 1997, the shareholders of our predecessor, TMM, declared, but have not yet paid, a dividend equivalent to $0.17 per share, subject to our outstanding debt obligations and availability of funds. At the shareholders’ meeting where such dividend was declared, the shareholders delegated to the Board of Directors the authority to determine when the dividend may be paid. No other dividend has been declared since 1997.

Exchange Rates

      We maintain our financial records in Dollars. However, we keep our tax records in Pesos. We record in our financial records the Dollar equivalent of the actual Peso charges for taxes at the time incurred using the prevailing exchange rate. In 2004, approximately 53.5% of our net consolidated revenues and 52.7% of our operating costs and expenses were generated or incurred in Dollars. Most of the remainder of our net consolidated revenues and operating expenses were denominated in Pesos.

      The following table sets forth the high, low, average and period-end noon buying rates for pesos reported by the Federal Reserve Bank of New York (the “Noon Buying Rate”) expressed as pesos per U.S. dollar concerning pesos/ U.S. dollar exchange rates for the years 2000, 2001, 2002, 2003 and 2004, each of the last three months of 2004 and each of the first nine months of 2005 (through September 8):

      On September 8, 2005, the Noon Buying Rate was Ps. 10.71 = $1.00 (equivalent to Ps. 1.00 = $0.093).

      Not applicable

      Not applicable

Risks Relating to Our Liquidity Position

We may not have sufficient liquidity to repay our existing obligations at maturity

      At December 31, 2004, Grupo TMM’s total debt (excluding TFM) amounted to $538.3 million, not including previously paid discounts and debt issuance costs of $42.2 million, and including $26.5 million of short-term debt, which includes $24.7 million of interest, and $511.7 million of long-term debt. Our shareholders’ equity, including minority interest in consolidated subsidiaries, was $636.7 million, resulting in a debt-to-equity ratio of 84.5%. On August 11, 2004, we completed an Exchange Offer of our 2003 and 2006 Notes and issued an aggregate principal amount of $508,703,356 of Senior Secured Notes due 2007 (the “2007 Notes”). On February 1, 2005, we paid the semiannual coupon on the 2007 Notes in cash and in kind, as follows: for each $1,000 in principal amount of 2007 Notes we paid $47.22 in new notes and $9.44 in cash, after which we had an outstanding amount of approximately $532.7 million of the 2007 Notes. On April 1, 2005, we closed the sale of our 51% interest in Grupo TFM to KCS. We used part of the cash proceeds from the sale to pay down approximately $70.0 million of the 2007 Notes ($67.9 million of principal amount and cash interest of $2.0 million). As of May 31, 2005, we had approximately $465 million outstanding under the

2007 Notes. Interest on the 2007 Notes is payable semi-annually at a 10 ¹ / 2 % annual rate if paid in cash and at a 12% annual rate if paid in-kind and cash together (of which a minimum of 2% has to be paid in cash). We cannot assure you that we will have sufficient liquidity to repay the 2007 Notes at maturity, even if we elect to extend the maturity of such notes for an additional year as permitted under the Indenture governing the 2007 Notes. We intend to seek alternative means to lower our current interest costs and to increase our liquidity in the future. We cannot assure you that we will be able to lower our current interest costs or to repay the 2007 Notes at their maturity or refinance them in a timely manner.

Grupo TMM is primarily a holding company and depends upon funds received from its operating subsidiaries to make payments on its indebtedness

      Grupo TMM is primarily a holding company and conducts the majority of its operations, and holds a substantial portion of its operating assets, through numerous direct and indirect subsidiaries. As a result, Grupo TMM relies on income from dividends and fees related to administrative services provided to its operating subsidiaries for its operating income, including the funds necessary to service its indebtedness.

      Under Mexican law, profits of Grupo TMM’s subsidiaries may only be distributed upon approval by its subsidiaries’ shareholders of their financial information, and no profits may be distributed by its subsidiaries to Grupo TMM until all losses incurred in prior fiscal years have been offset against any sub-account of Grupo TMM’s capital or net worth account. In addition, at least 5% of profits must be separated to create a reserve (fondo de reserva) until such reserve is equal to 20% of the aggregate value of such subsidiary’s capital stock (as calculated based on the actual nominal subscription price received by such subsidiary for all issued shares that are outstanding at the time).

      There is no restriction under Mexican law upon Grupo TMM’s subsidiaries remitting funds to it in the form of loans or advances in the ordinary course of business, except to the extent that such loans or advances would result in the insolvency of its subsidiaries, or for its subsidiaries to pay to it fees or other amounts for services.

      In addition, Grupo TMM does not own 100% of all of its subsidiaries and, to the extent that Grupo TMM relies on dividends or other distributions from subsidiaries that it does not wholly own, Grupo TMM will only be entitled to a pro rata share of the dividends or other distributions provided by such subsidiaries.

      In addition to operations at Grupo TMM’s subsidiaries, Grupo TMM is a party to a number of arrangements with other parties under which it and such parties have jointly invested in such subsidiaries; and Grupo TMM may enter into other similar arrangements in the future. Grupo TMM’s partners in these subsidiaries may at any time have economic, business or legal interests or goals that are inconsistent with its interests or those of the entity in which they have invested. Any of these partners may also be unable to meet its economic or other obligations to the subsidiaries, and Grupo TMM may be required to fulfill those obligations. Furthermore, any dividends that are distributed from subsidiaries that Grupo TMM does not wholly own would be shared pro rata with its partners according to their relative ownership interests. For these or any other reasons, disagreements or disputes with partners with whom Grupo TMM has a strategic alliance or relationship could impair or adversely affect its ability to conduct its business and to receive distributions from, and return on its investments in, those subsidiaries.

Uncertainties relating to our financial condition and other factors currently raise substantial doubt about our ability to continue as a going concern and could result in our dissolution under Mexican Corporate Law

      The Company’s substantial accumulated losses may prevent the Company from continuing as a going concern and may ultimately result in its dissolution. The auditors’ report on our financial statements as of and for the two-year period ended December 31, 2003 and December 31, 2004 includes an explanatory paragraph describing the existence of substantial doubt about our ability to continue as a “going concern”. The report observes that in 2004 and 2003 (i) the Company incurred net losses of $102,547 and $86,662, respectively, and (ii) the Company had an accumulated deficit of $170,517 and $67,970, respectively. As a result, the Company has accumulated losses in excess of two-thirds of its capital stock, which under Mexican Corporate Law is a sufficient cause for an interested party to call for dissolution of the Company, before the appropriate authorities. These, among other circumstances, indicate that the Company might not have the ability to

continue as a going concern. The Financial Statements included elsewhere in this Annual Report do not include any adjustment relating to the recoverability or classifications of the registered amounts as assets and the amounts and classification of the liabilities that could be required in the event that the Company cannot continue as a going concern.

Risks Relating to the Company

Our substantial indebtedness could adversely affect our business and, consequently, our ability to pay interest and repay our indebtedness

      At December 31, 2004, Grupo TMM’s total debt (excluding TFM) amounted to $538.3 million, not including previously paid discounts and debt issuance costs of $42.2 million, and including $26.5 million of short-term debt, which includes $24.7 million of interest, and $511.7 million of long-term debt. Our shareholders’ equity, including minority interest in consolidated subsidiaries, was $636.7 million, resulting in a debt-to-equity ratio of 84.5%.

      The level of our indebtedness could have important consequences. For example, it could:

      Our ability to pay interest and to repay or refinance indebtedness will depend upon future operating performance, including the ability to increase revenues significantly and control expenses. Future operating performance depends upon prevailing economic, financial, competitive, legislative, regulatory, business and other factors that are beyond our control.

      We cannot assure you that our business will generate sufficient cash flow from operations, that currently anticipated revenues and operating performance will be realized or that future borrowings will be available to us in amounts sufficient to enable us to pay our indebtedness or to fund our other liquidity needs. In addition, we may have difficulty accessing cash flows generated by our subsidiaries and joint ventures. See “— Grupo TMM is primarily a holding company and depends upon funds received from its operating subsidiaries to make payments on its indebtedness”. If we are unable to meet our debt service obligations or fund our other liquidity needs, we could attempt to restructure or refinance our indebtedness, seek additional equity capital or sell assets. We cannot assure you that we will be able to accomplish those actions on satisfactory terms, if at all.

      The indenture relating to our debt securities contains a number of restrictive covenants and any additional financing arrangements we enter into may contain additional restrictive covenants. These covenants restrict or prohibit many actions, including our ability, or that of our subsidiaries, to:

      If we fail to comply with these restrictive covenants, our obligation to repay our debt may be accelerated.

We may be unable to successfully expand our business

      Future growth of our businesses will depend on a number of factors, including:

      In order to maintain and improve operating results from new businesses, as well as our existing businesses, we will be required to manage our growth and expansion effectively. However, the management of new businesses involves numerous risks, including difficulties in assimilating the operations and services of the new businesses, the diversion of management’s attention from other business concerns and the disadvantage of entering markets in which we may have no or limited direct or prior experience. Our failure to effectively manage our business could preclude our ability to expand our business and could have a material adverse effect on our results of operations.

The Company is controlled by the Serrano Segovia family

      Members of the Serrano Segovia family control the Company through their direct and indirect ownership of our Series A Shares. Since the Series A Shares underlying our CPOs are required to be voted on any matter submitted to our stockholders by the CPO Trustee in the same manner as the majority of the Series A Shares not so owned, the Serrano Segovia family effectively controls all matters as to which a shareholder vote is required. As a result, the Serrano Segovia family will be able to direct and control the policies of the Company and its subsidiaries, including mergers, sales of assets and similar transactions. See Item 7. “Major Shareholders and Related Party Transactions — Major Shareholders”.

      A substantial portion of the Series A Shares and ADSs of the Company held by the Serrano Segovia family is currently pledged to secure indebtedness of the Serrano Segovia family and entities controlled by them and may from time to time in the future be pledged to secure obligations of other of their affiliates. A foreclosure upon any such Series A Shares held by the Serrano Segovia family could constitute a change of control under the Indenture governing the 2007 Notes and certain other debt instruments of the Company and its subsidiaries. The occurrence of such a change of control would enable holders of the Senior Secured Notes to require the Company to repurchase their Senior Secured Notes. There can be no assurance that upon a change of control the assets of the Company would be sufficient to repurchase the Senior Secured Notes.

Significant competition could adversely affect our future financial performance

      Certain of our business segments face significant competition, which could have a material adverse effect on our results of operations. Our parcel tanker and supply ship services operating in the Gulf of Mexico have

faced significant competition, mainly from U.S. shipping companies. Article 34 of the Mexican Navigation Law, enacted in January 1994, and amended in May 2000, established that only Mexican-flagged vessels can provide cabotage services (movement of ships within Mexico and Mexican waters) in Mexico. Additionally, Article 10 of the Mexican Navigation Law states that only Mexican companies are able to obtain the Mexican flag. This law has reduced competition from non-Mexican companies in this sector as a special tax is charged to foreign-flagged vessels. As a result, the market share of offshore vessels in Mexico with Mexican flags has significantly increased in the past few years. In 2000, out of 185 vessels, 33% were Mexican-flagged while in 2004, out of 287 vessels, 66% were Mexican-flagged. Nevertheless, there can be no assurance that the percentage of Mexican-flagged vessels will continue to increase in the future. In our land operations division, our trucking transport and automotive logistics services have faced intense competition, including price competition, from a large number of Mexican, U.S. and international trucking lines. We cannot assure you that we will not lose business in the future due to our inability to respond to competitive pressures by decreasing our prices without adversely affecting our gross margins and operational results.

If our time charter arrangements are terminated or expire, our business could be adversely affected

      We currently time-charter five product tankers to Petroleos Mexicanos, the national oil company of Mexico (“PEMEX”), and two to private operators for service to PEMEX. In the event that our time-charter arrangements are terminated or expire, we will be required to seek new time-charter arrangements for these vessels. We cannot be sure that time-charters will be available for the vessels following termination or expiration or that time-charter rates in effect at the time of such termination or expiration will be comparable to those in effect under the existing time-charters or in the present market. In the event that time-charters are not available on terms acceptable to us, we may employ those tankers in the spot market. Because charter rates in the spot market are subject to greater fluctuation than time-charter rates, any failure to maintain existing, or enter into comparable, charter arrangements could adversely affect our operating results.

Our results from operations are dependent on fuel expenses

      We need fuel to operate most of our assets. We currently meet, and expect to continue to meet, our fuel requirements almost exclusively through purchases at market prices from PEMEX, a government-owned entity exclusively responsible for the distribution and sale of diesel fuel in Mexico. If we are unable to acquire diesel fuel from PEMEX on acceptable terms, our operations could be materially adversely affected. In addition, instability caused by imbalances in the worldwide supply and demand of oil may result in an increase in fuel prices. Our fuel expense represents a significant portion of our operating expenses, and major increases in the price of diesel fuel that cannot be hedged or transferred to the final user of our transportation services could have a material adverse effect on our results of operations.

Downturns in the U.S. economy or in trade between the United States and Mexico and fluctuations in the peso-dollar exchange rate would likely have adverse effects on our business and results of operations

      The level and timing of our business activity is heavily dependent upon the level of U.S.-Mexican trade and the effects of NAFTA on such trade. Downturns in the U.S. or Mexican economy or in trade between the United States and Mexico would likely have adverse effects on our business and results of operations. Our business of logistics and transportation of products traded between Mexico and the United States depends on the U.S. and Mexican markets for these products, the relative position of Mexico and the United States in these markets at any given time and tariffs or other barriers to trade. Our revenues were affected by the downturn in the U.S. economy in 2003. However, the U.S. economy started to reflect a recovery in the third quarter of 2003, and showed signs of continued improvement in 2004. Any future downturn in the U.S. economy could have a material adverse effect on our results of operations and our ability to meet our debt service obligations as described above.

      Also, fluctuations in the peso-dollar exchange rate could lead to shifts in the types and volumes of Mexican imports and exports. Although a decrease in the level of exports of some of the commodities that we transport to the United States may be offset by a subsequent increase in imports of other commodities we haul into Mexico and vice versa, any offsetting increase might not occur on a timely basis, if at all. Future

developments in U.S.-Mexican trade beyond our control may result in a reduction of freight volumes or in an unfavorable shift in the mix of products and commodities we carry.

Downturns in certain cyclical industries in which our customers operate could have adverse effects on our results of operations

      The shipping, transportation and logistics industries are highly cyclical, generally tracking the cycles of the world economy. Although transportation markets are affected by general economic conditions, there are numerous specific factors within each particular market segment that may influence operating results. Some of our customers do business in industries that are highly cyclical, including the oil and gas, automotive and agricultural sectors. Any downturn in these sectors could have a material adverse effect on our operating results. For example, during the first half of 2004, our results were negatively impacted by continued sluggish conditions in the automotive sector. Also, some of the products we transport have had a historical pattern of price cyclicality which has typically been influenced by the general economic environment and by industry capacity and demand. We cannot assure you that prices and demand for these products will not decline in the future, adversely affecting those industries and, in turn, our financial results.

We are exposed to the risk of loss and liability

      Our business is affected by a number of risks, including mechanical failure of vessels and equipment, collisions, property loss of vessels and equipment, piracy, cargo loss or damage, as well as business interruption due to political circumstances in foreign countries, hostilities and labor strikes. In addition, the operation of any oceangoing vessel is subject to the inherent possibility of catastrophic marine disaster, including oil spills and other environmental accidents, and the liabilities arising from owning and operating vessels in international trade.

      We maintain insurance to cover the risk of partial or total loss of or damage to all of our assets, including, but not limited to, port facilities, port equipment, trucks, land facilities and offices. In particular, we maintain marine hull and machinery and war risk insurance on our vessels, which covers the risk of actual or constructive total loss. Additionally, we have protection and indemnity insurance for damage caused by our operations to third persons. We do not carry insurance covering the loss of revenue resulting from a downturn in our operations or resulting from vessel off-hire time on certain vessels. We cannot assure you that our insurance would be sufficient to cover the cost of damages suffered by us or damages to others, that any particular claim will be paid or that such insurance will continue to be available at commercially reasonable rates in the future.

Our operations are subject to extensive environmental and safety regulation and we face potentially significant environmental liability

      Our operations are subject to international, U.S. and Mexican federal and state laws and regulations relating to pollution, hazardous substances and the protection of health and safety, natural resources and the environment. The primary environmental law in Mexico is the General Law of Ecological Balance and Environmental Protection (the “Ecological Law”). The Mexican federal agency in charge of overseeing compliance with and enforcement of the federal environmental laws is the Ministry of Environmental Protection and Natural Resources ( Secretaría del Medio Ambiente y Recursos Naturales, or “Semarnat”). As part of its enforcement powers, Semarnat is empowered to bring administrative and criminal proceedings and impose economic sanctions against companies that violate environmental laws, and temporarily or even permanently close non-complying facilities. Under the Ecological Law, the Mexican Government has implemented a program to protect the environment by promulgating rules concerning water, land, air and noise discharges or pollution, and the transportation and handling of wastes and hazardous substances. We are also subject to the laws of various jurisdictions and international conferences with respect to the discharge of hazardous materials into the environment. While we maintain insurance against certain of these environmental risks in an amount which we believe is consistent with amounts customarily obtained in accordance with industry norms, we cannot assure you that our insurance will be sufficient to cover damages suffered by us or that insurance coverage will always be available for these possible damages. Further, such insurance typically

excludes coverage for fines and penalties that may be levied for non-compliance with environmental laws and regulations. Environmental laws and regulations are subject to change, and these laws and regulations tend to get more stringent with time. We cannot predict the effect, if any, that the adoption of additional or more stringent environmental laws and regulations would have on our results of operations, cash flows or financial condition.

      We currently time-charter to PEMEX, the national oil company of Mexico, five tankers, which PEMEX uses to transport refined petroleum products domestically. Pursuant to these time-charters, PEMEX has the right to transport crude oil and operate internationally. We also operate five parcel tankers in the international market. See Item 4. “Information on the Company — B. Business Overview — Specialized Maritime Services”. Under the U.S. Oil Pollution Act of 1990, or “OPA 90,” ship owners and operators could be exposed to substantial liability, and in some cases unlimited liability, for removal costs and damages resulting from the discharge of oil, petroleum or related substances into the waters of the U.S. by their vessels. In some jurisdictions, including the U.S., claims for spill clean-up or removal costs and damages would enable claimants to immediately seize the ships of the owning and operating company and sell them in satisfaction of a final judgment. The existence of statutes enacted by individual states of the U.S. on the same subject, but requiring different measures of compliance and liability, creates the potential for similar claims being brought in the U.S. under state law. In addition, several other countries have adopted international conventions that impose liability for the discharge of pollutants similar to OPA 90. If a spill were to occur in the course of operation of one of our vessels carrying petroleum products, and such spill affected the waters of the United States or another country that had enacted legislation similar to OPA 90, we could be exposed to substantial or unlimited liability. Additionally, our vessels carry bunkers (ship fuel) and certain goods that, if spilled, under certain conditions, could cause pollution and result in substantial claims against us, including claims under international laws and conventions, OPA 90 and other U.S. federal, state and local laws. Further, under OPA 90 and similar international laws and conventions, we are required to satisfy insurance and financial responsibility requirements for potential oil spills and other pollution incidents. Our vessels must also meet stringent operational, maintenance and structural requirements, and they are subject to rigorous inspections by governmental authorities such as the U.S. Coast Guard. Non-compliance with these regulations could give rise to substantial fines and penalties.

      We could have liability with respect to contamination at our former U.S. facilities or third-party facilities in the U.S. where we have sent hazardous substances under the U.S. Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA” or “Superfund”) and similar state laws (known as Superfund laws). These laws impose liability for the cost of remedial or removal actions, natural resources damages and related costs at certain sites identified as posing a threat to the environment or public health. Under CERCLA, liability may be imposed, on a joint and several basis without regard to fault or the legality of the activity, on certain classes of persons, including the current and certain prior owners or operators of and persons that arranged for the disposal or treatment of hazardous substances at sites where a release of hazardous substances has occurred or could occur into the environment. In addition, other potentially responsible parties, adjacent landowners or other third parties may initiate cost recovery actions or toxic tort litigation against the owners or operators of contaminated sites under CERCLA or similar U.S. state laws. See Item 4B. “Business Overview — Environmental Regulation”.

Potential labor disruptions could adversely affect our financial condition and our ability to meet our obligations under our debt

      As of December 31, 2004, approximately 63% of our employees (including TFM) were covered by a labor agreement. The compensation terms of the labor agreement are subject to renegotiation on an annual basis and all other terms are renegotiated every two years. We may not be able to negotiate these provisions favorably, and strikes, boycotts or other disruptions could occur. These potential disruptions could have a material adverse effect on our financial condition and results of operations and on our ability to meet our payment obligations under our debt.

Our customers may take actions that may reduce our revenues

      If our customers believe that our weakened financial condition will result in a lower quality of service, they may discontinue use of our services. Additionally, some customers may demand lower prices. While we have contracts with some of our customers that prevent them from terminating the services we provide them or which impose penalties on customers who terminate their services with us, it may be impractical or uneconomical to enforce these agreements in Mexican courts. If any of these events occurs, our revenues will be reduced.

Risks Relating to the Transaction with KCS

Certain Payments to Grupo TMM may not be realized

      Certain payments to be made to Grupo TMM pursuant to the Amended and Restated Acquisition Agreement entered into, by and among, Grupo TMM, KCS and other parties, on December 15, 2004 (the “AAA”) are subject to certain conditions and uncertainty. Grupo TMM shareholders should consider the possibility that, notwithstanding the favorable judgment by the Federal Court in favor of TFM and the potential receipt by TFM of the aggregate amount of the VAT Claim, Grupo TMM may not receive all of the payments provided for in the AAA in connection with the settlement of the VAT Claim and Put. See Item 4. “Information on the Company — Recent Developments — Disposition of Grupo TMM’s interest in Grupo TFM to KCS — Purchase Price” and “Information on the Company — Recent Developments — TFM VAT Award”.

Dilution of Grupo TMM’s stake in the capital stock of KCS

      In accordance with the AAA, in the event that KCS acquires the shares of Grupo TFM subject to our repurchase obligation with the Mexican Government as a result of the timely and valid exercise by the Mexican Government of the Put (as defined below), which possible acquisition is pending judicial resolution, there is a possibility that, (i) in the event that KCS decides to finance the purchase price of the shares of TFM subject to the Put with new debt, then the credit rating of KCS may be reduced by credit rating agencies, or (ii) in the event that KCS decides to finance the purchase price of the Put shares with equity, then the shares held by KCS’ shareholders, including Grupo TMM (and its shareholders), could be subject to substantial dilution. See Item 4. “Information on the Company — Recent Developments — Disposition of Grupo TMM’s interest in Grupo TFM to KCS”.

The value of the investment of Grupo TMM in KCS’ shares will depend on KCS’ performance in the future

      As part of the consideration received for the sale of our interest in Grupo TFM to KCS, we received 18,000,000 shares of KCS common stock. The value of such stock will be determined by the success of the KCS business. Investors should read carefully the annual report of KCS for the fiscal year concluded on December 31, 2004, as well as all the other reports and information that KCS submits to the SEC in the United States. As a result of the sale of our interest in Grupo TFM, our primary asset is the capital stock of KCS. The value attributed to the shares of KCS held by us may reflect a discount to the trading value of KCS shares generally as the KCS shares we hold are unregistered. Finally, although we have certain rights to cause the registration of the KCS shares, significant sales of shares by us or by others would likely have a negative effect on the market price of the KCS shares and the value of our stock.

KCS’ obligations under the Amended and Restated Acquisition Agreement are unsecured

      KCS’ payment obligations under the AAA are unsecured obligations. KCS entered into a credit agreement with a syndicate of financial institutions, which is secured by substantially all of the assets of KCS. As a result, the rights of Grupo TMM against KCS will be junior in priority to KCS’ payment obligations to the syndicate of financial institutions, which are parties to the referenced credit agreement. See Item 4. “Information on the Company — Recent Developments — Disposition of Grupo TMM’s interest in Grupo TFM to KCS”.

As a result of the sale of our interest in Grupo TFM, we may be classified as an investment company

      As a result of the sale of our interest in Grupo TFM, our primary asset is the capital stock of KCS. Accordingly, there is an increased risk that Grupo TMM may be considered an “investment company” under the U.S. Investment Company Act of 1940 (the “Investment Company Act”). In general, if 40% or more of a company’s assets (other than cash) consist of “investment securities” and if it has made or intends to make a public offering of its shares, it will be considered an investment company, with certain limited exceptions. The shares of KCS acquired as part of the transaction are considered investment securities. The regulatory burdens to which investment companies are subject under the Investment Company Act make it extremely difficult for operating companies, especially foreign operating companies, to conduct business.

      If, pursuant to the preceding paragraph, Grupo TMM were to be considered an investment company, several alternatives would be available to it. First, it could acquire other assets that are not investment securities, dispose of a portion of the shares, or a combination of the preceding so that Grupo TMM is in compliance with the numerical requirements so as not to be considered an investment company. Until it is able to re-deploy assets to change its ratio of operating assets to investment securities in a manner that complies with the Investment Company Act, Grupo TMM could likely take advantage of the “transient investment company” provisions of the Investment Company Act which, if the requirements of those provisions are met, will provide Grupo TMM with a period of 12 months from the date of acquisition to take measures to ensure that it is not an investment company.

      If we have not taken such steps within the one-year period referred to above, we may be required to (1) apply to the SEC for exemptive relief from the requirements of the Investment Company Act, or (2) invest certain of our assets in government securities and cash equivalents that are not considered “investment securities” under the Investment Company Act. There can be no assurance that we will be able to obtain exemptive relief from the SEC. Investing our assets in government securities and cash equivalents could yield a significantly lower rate of return than other investments we could make if we chose to register as an investment company (although there is no assurance we could successfully register as an investment company even if we chose to do so).

      If we are deemed an unregistered investment company, there would be a risk, among other material adverse consequences, that we could become subject to monetary penalties or injunctive relief, or both, in an action brought by the SEC, that we would be unable to enforce contracts with third parties or that third parties could seek to obtain rescission of transactions with us undertaken during the period in which it was established that we were an unregistered investment company.

      In addition, if we are unable to take steps to avoid becoming an investment company or to obtain injunctive relief from the SEC, we may be in default under the indenture governing the 2007 Notes.

      As a result of the foregoing, Grupo TMM will likely be required to take rapid and focused action to come into compliance with the Investment Company Act within the required time frame. Such action would also have to be done within the requirements of the Indenture for the 2007 Notes issued in connection with the recent restructuring, which places restrictions on the use of proceeds from certain asset sales. There is no assurance that Grupo TMM will be able to take the necessary steps to come into compliance with the Investment Company Act.

We may be, or may become, subject to Passive Foreign Investment Company rules

      As a result of the sale of our interest in Grupo TFM, it is possible that Grupo TMM will be classified as a “Passive Foreign Investment Company” or “PFIC” for U.S. income tax purposes. If Grupo TMM is classified as a PFIC, holders of Grupo TMM’s ADSs or Series A Shares that are subject to United States income taxation will have significantly unfavorable United States income tax treatment of their investment in Grupo TMM.

      If we are, or were in the future to become, a PFIC for United States federal income tax purposes, United States holders of our ADSs or our CPOs generally will be subject to special United States tax rules that would differ in certain respects from the tax treatment described herein. Although our analysis is not

complete, there is a substantial likelihood we have become a PFIC for United States federal income tax purposes as a result of the sale of our shares in Grupo TFM to KCS. However, PFIC status is determined annually based on the composition of an entity’s assets and income from time to time. As a result, our PFIC status may change. In general, if 50% or more of our assets are “passive assets,” or 75% or more of our income is “passive income,” we would be deemed a PFIC. Passive assets generally include any interest in another corporation in which we own less than a 25% interest (by value).

      In general, if we are classified as a PFIC, United States holders of our ADSs or CPOs will be subject to a special tax at ordinary income tax rates on “excess distributions,” including certain distributions by us with respect to ADSs or CPOs as well as gain that such holders recognize on the sale of ADSs or CPOs. The amount of income tax on any excess distributions will be increased by an interest charge to compensate for tax deferral, calculated as if the excess distributions were earned ratably over the period a holder held the ADSs or shares. With respect to ADSs and CPOs, a United States holder can avoid the unfavorable rules described in the preceding paragraph by electing to mark its ADSs and CPOs to market. If a United States holder makes this mark-to-market election, such holder will be required in any year in which we are a PFIC to include as ordinary income the excess of the fair market value of its ADSs and CPOs at year-end over its basis in those ADSs and CPOs. In addition, any gain a United States holder recognizes upon the sale of its ADSs and CPOs will be taxed as ordinary income in the year of sale. Alternatively, if we provide the necessary information, a United States holder may elect to treat its ADSs and CPOs as an interest in a “qualified electing fund” (“QEF Election”). Such a QEF Election is available only if we comply with applicable information reporting requirements, and currently we do not intend to make the applicable information available. If a United States holder makes a QEF Election, such holder will be required to include in income its proportionate share of our income and net capital gain in years in which we were a PFIC, but any gain that such holder subsequently recognizes upon the sale of its ADSs and CPOs generally will be taxed as capital gain.

Risks Relating to Mexico

Economic and political developments in Mexico may adversely affect our business

      Most of our operations and assets are located in Mexico. As a result, our financial condition, results of operations and business may be affected by the general condition of the Mexican economy, the devaluation of the peso as compared to the U.S. Dollar, Mexican inflation, interest rates, regulation, taxation, social instability and political, social and economic developments in Mexico.

Mexico is an emerging market economy, with attendant risks to our results of operations and financial condition

      Mexico has historically experienced uneven periods of economic growth. In 2001, Mexico’s gross domestic product, or GDP, decreased 0.2% primarily as a result of the downturn in the U.S. economy. Mexican GDP increased 0.8%, 1.4%, 4.4% and 0.4% in 2002, 2003, 2004 and the three-month period ended March 31, 2005, respectively. GDP growth fell short of Banco de México estimates in 2004; however, according to Banco de México estimates, GDP in Mexico is expected to grow by approximately 3.5% to 4.0%, while inflation is expected to be less than 4.0%, in 2005. We cannot assure you that these estimates will prove to be accurate.

      The Mexican Government has exercised, and continues to exercise, significant influence over the Mexican economy. Accordingly, Mexican governmental actions concerning the economy and state-owned enterprises could have a significant impact on Mexican private sector entities in general and on us in particular, as well as on market conditions, prices and returns on Mexican securities, including our securities. The national elections held on July 2, 2000 ended 71 years of rule by the Institutional Revolutionary Party (“Partido Revolucionario Institucional”) (“PRI”) with the election of President Vicente Fox Quesada, a member of the National Action Party (“Partido Acción Nacional”) (“PAN”), and resulted in the increased representation of opposition parties in the Mexican Congress and in mayoral and gubernatorial positions. Although there have not yet been any material adverse repercussions resulting from this political change, multiparty rule is still relatively new in Mexico and could result in economic or political conditions that could

materially and adversely affect our operations. The next national elections will be held in July 2006. We cannot predict if the PAN will be re-elected or if a different party will be elected. The possible change of party could impact the political landscape and we cannot predict if it would have a positive or negative impact on the Mexican economy. The Mexican economy in the past has suffered balance of payment deficits and shortages in foreign exchange reserves.

Currency fluctuations or the devaluation and depreciation of the peso could limit the ability of the Company and others to convert Pesos into U.S. Dollars or other currencies which could adversely affect our business, financial condition or results of operations

      Severe devaluation or depreciation of the peso may also result in governmental intervention, as has resulted in Argentina, or disruption of international foreign exchange markets. This may limit our ability to transfer or convert Pesos into U.S. Dollars and other currencies for the purpose of making timely payments of interest and principal on our indebtedness and adversely affect our ability to obtain foreign currency and other imported goods. The Mexican economy has suffered current account balance payment of deficits and shortages of foreign exchange reserves in the past. While the Mexican Government does not currently restrict, and for more than ten years has not restricted, the right or ability of Mexican or foreign persons or entities to convert Pesos into U.S. Dollars or to transfer other currencies outside of Mexico, the Mexican Government could institute restrictive exchange control policies in the future. To the extent that the Mexican Government institutes restrictive exchange control policies in the future, our ability to transfer or convert Pesos into U.S. Dollars for the purpose of making timely payments of interest and principal on indebtedness would be adversely affected. Devaluation or depreciation of the Peso against the U.S. Dollar may also adversely affect U.S. Dollar prices for our debt securities.

      Pursuant to the provisions of NAFTA, if Mexico experiences serious balance of payment difficulties or the threat thereof in the future, Mexico would have the right to impose foreign exchange controls on investments made in Mexico, including those made by U.S. and Canadian investors. Any restrictive exchange control policy could adversely affect our ability to obtain dollars or to convert pesos into dollars for purposes of making interest and principal payments to holders of new notes, to the extent that we may have to effect those conversions. This could have a material adverse effect on our business and financial condition.

High interest rates in Mexico could increase our financing costs

      Mexico historically has had, and may continue to have, high real and nominal interest rates. The interest rates on 28-day Mexican government treasury securities averaged 6.2%, 6.8% and 9.1% for 2003, 2004 and for the three-month period ended March 31, 2005. Accordingly, if we have to incur Peso-denominated debt in the future, it will likely be at higher interest rates.

Military operations in Iraq and elsewhere have negatively affected industry and economic conditions globally, and these conditions have had, and may continue to have, a negative effect on our business

      Military operations in Iraq have depressed economic activity in the U.S. and globally, including the Mexican economy. Since the invasion, there have been terrorist attacks abroad, such as the terrorist attacks in the United States on September 11, 2001, Madrid on March 11, 2004 and London on July 7, 2005, as well as ongoing threats of future terrorist attacks in the U.S. and abroad. Although it is not possible at this time to determine the long-term effect of these terrorist threats and attacks and the consequent response by the U.S., there can be no assurance that there will not be other attacks or threats in the U.S. or abroad that will lead to a further economic contraction in the U.S. or any other major markets. The continued threat of terrorism within the United States and abroad and the potential for military action and heightened security measures in response to such threat may cause significant disruption to commerce throughout the world, including restrictions on cross-border transport and trade. In addition, related political events may cause a lengthy period of uncertainty that may adversely affect our business. Political and economic instability in other regions of the world, including the United States and Canada, may also result and could negatively impact our operations. The consequences of terrorism and the responses thereto are unpredictable and could have a material adverse effect on our operations. In the short term, however, terrorist activity against the U.S. and the U.S. military

operations in Iraq have contributed to uncertainty about the stability of the U.S. economy as well as global capital markets. It is not certain how long these economic conditions will continue. If terrorist attacks continue or become more prevalent or serious, if the economic conditions in the U.S. decline or if a global recession materializes, our business, financial condition and results of operations may be materially and adversely affected.

Developments in other emerging market countries or in the U.S. may affect us and the prices for our securities

      The market value of securities of Mexican companies, the economic and political situation in Mexico and our financial condition and results of operations are, to varying degrees, affected by economic and market conditions in other emerging market countries and in the U.S. Although economic conditions in other emerging market countries and in the U.S. may differ significantly from economic conditions in Mexico, investors’ reactions to developments in any of these other countries may have an adverse effect on the market value or trading price of securities of Mexican issuers, including our securities, or on our business.

      In particular, Argentina’s continued insolvency and default on its public debt could adversely affect Mexico, the market value of our debt securities or our business. Although a majority of the foreign holders of Argentina’s indebtedness have agreed to exchange their securities in connection with Argentina’s restructuring, holders of a substantial amount of the country’s indebtedness have refused such exchange. To the extent that the Argentine government is unsuccessful in preventing further economic decline, the crisis may also adversely affect Mexico, the price of our securities or our business.

      In addition, the political and economic future of Venezuela remains uncertain. A nationwide general strike that occurred between December 2002 and January 2003 caused a significant reduction in oil production in Venezuela, and has had a material adverse effect on Venezuela’s oil-dependent economy. In February 2003, Venezuelan authorities imposed foreign exchange and price controls on specified products. Inflation continues to grow despite price controls and the political and economic environment has continued to deteriorate. Venezuela has experienced increasing social instability and massive public demonstrations against President Chavez. We cannot predict what effect, if any, the decisions of the Venezuelan government will have on the economies of other emerging market countries, including Mexico, the price of our securities or our business.

      Our operations, including demand for our products or services, and the price of our debt securities, have also historically been adversely affected by increases in interest rates in the U.S. and elsewhere. The Federal Reserve Bank of the U.S. has signaled that it will continue implementing “measured” increases in interest rates in 2005. As interest rates rise, the prices of our securities may fall.

Mexico may experience high levels of inflation in the future, which could adversely affect our results of operations

      Mexico has a history of high levels of inflation, and may experience inflation in the future. During most of the 1980s and during the mid- and late-1990s, Mexico experienced periods of high levels of inflation. The annual rates of inflation for the last five years, as measured by changes in the National Consumer Price Index, as provided by Banco de México, were:

      Although these inflation rates tend to be lower than Mexico’s historical inflation rates, Mexico’s current level of inflation remains higher than the annual inflation rates of its main trading partners, including the U.S. We cannot give any assurance that the Mexican inflation rate will not increase or maintain its current

level for any significant period of time. A substantial increase in the Mexican inflation rate would have the effect of increasing some of our costs, which could adversely affect our financial condition and results of operations, as well as the market value of our new notes. High levels of inflation may also affect the balance of trade between Mexico and the United States, and other countries, which could adversely affect our results of operations.

Political events in Mexico could affect Mexican economic policy and our business, financial condition and results of operations

      Mexico’s President Vicente Fox has encountered strong opposition to a number of his proposed reforms in both the Chamber of Deputies and the Senate, where opposition forces have frequently joined to block his initiatives. Although the Mexican economy has exhibited signs of improvement, general economic sluggishness continues. This continuing weakness in the Mexican economy, combined with recent political events, has slowed economic reform and progress. In the 2003 and 2004 elections, the political party of President Fox, the PAN, lost additional seats in the Mexican congress, as well as state governorships. The increased party opposition and legislative gridlock arising out of the elections could further hinder President Fox’s ability to implement his economic reforms. Presidential and federal congressional elections in Mexico are scheduled to be held in July 2006. Under Mexican law, President Fox cannot run for re-election. The electoral process could lead to further friction among political parties and the executive branch officers, which could potentially cause additional political and economic instability. Additionally, once the President and representatives are elected, there could be significant changes in laws, public policies and government programs, which could have a material adverse effect on the Mexican economic and political situation which, in turn may adversely affect our business, financial condition and results of operations.

      National politicians are currently focused on the 2006 elections and crucial reforms regarding fiscal and labor policies, gas, electricity, social security and oil have not been and may not be approved. In addition, recent impeachment proceedings of Andres Manuel Lopez Obrador, the mayor of Mexico City, have increased political uncertainty. The effects on the social and political situation in Mexico, including the 2006 presidential elections and presidential succession, could adversely affect the Mexican economy, including the stability of its currency, which in turn could have a material adverse effect on our business, financial condition and results of operations, as well as market conditions and prices for our securities.

Mexican antitrust laws may limit our ability to expand through acquisitions or joint ventures

      Mexico’s federal antitrust laws and regulations may affect some of our activities, including our ability to introduce new products and services, enter into new or complementary businesses or joint ventures and complete acquisitions. In addition, the federal antitrust laws and regulations may adversely affect our ability to determine the rates we charge for our services and products. Approval of the Comisión Federal de Competencia , or Mexican Antitrust Commission, is required for us to acquire and sell significant businesses or enter into significant joint ventures.