Country Template

1
Mexico Macro Overview
Luis Lopez, Vice President Mexico City, Mexico
January 11-12, 2006
2
Macroeconomic Key Facts

• Investment Grade Credit Rating, reflecting
  increasing stability
• Moodys (Baa1, Stable)
• Standard Poors (BBB, Stable)
• Economy closely linked to US economic performance
• Growing demand for post-secondary education
  drives tuition revenues up much faster than GDP

US 6,600 (2004)
GDP per capita
20.0
10.0
0.0
-10.0
2001
2002
2003
2004
2005 F
FX
Inflation
GDP Growth
Source(s) World Bank, Oanda.com, US Census
Bureau, Moodys, Standard Poors
3
Demographics A View from 30,000 Feet
53 of the Population is under 24 years old
53.3 Million in 2000
Population (Millions)
11.3
11.2
12.0
11.0
10.9
10.8
10.7
10.7
10.3
10.1
9.5
9.2
8.9
8.8
9.0
7.7
2000
6.0
2010
3.0
0.0
0-4
5 to 9
10 to 14
15 to 19
20 to 24
25 to 29
30 to 34
Age Group
Source US Census Bureau
4
Industry Scan A View from 30,000 Feet
Increasing Participation in Education
96
100
80
80
54
60
40
40
30
20
0
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20-24
25-29
30 and
Population attending
2010 projection
Source Valora Consultoria
5
Pre-university and Post-secondary Enrollments
2.5 million additional students in the pipeline
6
4.7
5
3.4
4
3.0
3.6

• (millions of students)

3
2.4
1.9
2.1
2
2.4
2.0
1.5
1
1.3
1.2
0
1985
1990
1995
2000
2003
2010
Pre-university
Post-secondary
Source Tercer Informe de Gobierno and SEP
(Pronosep 2003 version)
6
Private Sector Market Share Growing 3x Faster
than Public
Mexico Undergraduate Enrollments by Sector
4.0
3.5
Private Sector 10yr CAGR 10
3.0
1.4
Total Sector 10yr CAGR 4.4
2.5
Public Sector 10yr CAGR 3
Private
Millions
2.0
Public
0.6
1.5
0.3
0.2
2.2
1.0
1.4
1.2
1.1
0.5
0.0
1990
1995
2000
Future Growth
Private Sector 18 23
31 40 Market Share
Source Secretaria de Educacion Publica, Valora
Consultoria
7
Presidential Elections Latin America Continued
Stability in Private Education
Mexico
July 2006

• Political
• Working democratic systems
• Economic
• Market-based policies
• Education Industry
• Continued stability in education sector

Brazil
Oct 2006
Chile
Dec 2005
8
Mexico Political Perspective

• Candidates
• PRI Roberto Madrazo
• Former Governor of Tabasco and Party President
• Liberal-center position
• PAN Felipe Calderon
• Former Energy Minister and Party President
• With increased exposure, has become a force
• Conservative center position
• PRD Andres Manuel Lopez Obrador (AMLO)
• Former Mayor of Mexico City
• Served as President for PRI in Tabasco
• Left-populist position

• Elections on July 2, 2006
• Consensus - outcome is still a toss-up
• As important are the Congressional elections
  will determine how fractured, and hence, how
  effective, the government will be irrespective of
  elected President
• Confidence in electoral system.

9
Political Perspective

• Lopez Obrador remains ahead in polling, but other
  candidates not far behind and gaining
• Normalizing for party solidarity, the three
  appear much closer at about a 30 each
• The 2000 election also holds evidence of the
  uncertainty the PAN and current President Fox
  came on strong during the 6 months prior to the
  election

Source(s) Vector Casa de Bolsa (Zuckerman),
Ipsos-Bimsa, Reforma Polling 2000
10
Continued Stability in Education Sector

• Government primary focus is basic education
• Post-secondary agenda increasingly focused on
  regulation
• Educational demand will remain strong
  irrespective of political outcome
• Regulatory framework transparent
• UVM active participant in any changes to
  regulatory environment

11
Mexico Macro Overview
Luis Lopez, Vice President Mexico City, Mexico
January 11-12, 2006