UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 20-F
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| REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
OR | |
☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
OR | |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
OR | |
☐ | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission file number: 1-33168
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Grupo Aeroportuario del Centro Norte, S.A.B. de C.V. |
(Exact name of Registrant as specified in its charter) |
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Central North Airport Group |
(Translation of Registrant’s name into English) |
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United Mexican States |
(Jurisdiction of incorporation or organization) |
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Plaza Metrópoli Patriotismo, Piso 5 Av. Patriotismo 201 Col. San Pedro de los Pinos, Benito Juárez Ciudad de México, México |
(Address of principal executive offices) |
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Ruffo Pérez Pliego del Castillo Plaza Metrópoli Patriotismo, Piso 5 Av. Patriotismo 201 Col. San Pedro de los Pinos, Benito Juárez Ciudad de México, México + 5281 8625 4300 rperezpliego@oma.aero |
(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person) |
Securities registered or to be registered pursuant to Section 12(b) of the Act:
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Title of each class: | Trading Symbol(s) | Name of each exchange on which registered |
American Depositary Shares (ADSs) each representing 8 Series B shares | OMAB | The NASDAQ Stock Market LLC |
Series B shares | OMAB | The NASDAQ Stock Market LLC* |
* | Not for trading, but only in connection with the registration of ADSs, pursuant to the requirements of the Securities and Exchange Commission. |
Securities registered or to be registered pursuant to Section 12(g) of the Act:
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None |
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:
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N/A |
Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report:
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Title of each class: | | Number of Shares |
Series B shares | |
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Series BB shares | | 49,766,000 |
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
⌧Yes◻ No
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Sections 13 or 15(d) of the Securities Exchange Act of 1934.
◻Yes ⌧ No
Note — Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.
⌧Yes◻ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
◻Yes ⌧ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | Accelerated filer | Non-accelerated filer ◻ | Emerging growth company |
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
U.S. GAAP ◻ | IFRS⌧ | Other ◻ |
Indicate by check mark which financial statement item the registrant has elected to follow:
◻ Item 17 ⌧ Item 18
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act).
◻☐Yes ⌧ No
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (§ 15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.
⌧☒Yes ◻ No
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
PART I Item 1. Identity of Directors, Senior Management and Advisers Not applicable. Item 2. Offer Statistics and Expected Timetable Not applicable. Item 3. Key Information
Risks Related to Our Operations The outbreak of COVID-19 has had, and may continue to have, a negative impact on the global economy and on our business, operations and results.
In response to
implemented in the third quarter of 2020, and (d) deferral and discount agreements with commercial and aeronautical
The full extent of the ongoing impact of COVID-19 on the Company’s longer-term operational and financial performance will depend on future developments, including those outside our control related to the efficacy and speed of vaccination programs in curbing the spread of the virus, the introduction and spread of new variants of the virus such as the Delta and Omicron variants, which may be resistant to currently approved vaccines, passenger testing requirements, mask mandates or other restrictions on travel, all of which are highly uncertain and cannot be 1 The COVID-19 pandemic has had a material impact on the Company, and the continuation of reduced air travel demand could have a material adverse effect on the Company’s business, operating results, financial condition and liquidity.
Large scale international events, including acts of terrorism, Events such as the conflicts in the Middle East and terrorist attacks worldwide have
substantial. Any general increase of hostilities In addition, in response to the conflict between Russia and Ukraine, the U.S. and other countries have imposed sanctions or other restrictive actions against Russia, which have resulted in higher energy prices, and higher prices for certain raw materials and goods and services, which in turn is contributing to higher inflation in the United States and globally, and has caused significant disruption to financial markets. Various of Russia’s actions have led to sanctions and other penalties being levied by the United States, the European Union, and other countries, as well as other public and private actors and companies, against Russia and certain other geographic areas, including agreement to remove certain Russian financial institutions from the Society for Worldwide Interbank Financial Telecommunication payment system and restrictions on imports of Russian oil, liquified natural gas and coal. Additional potential sanctions and penalties have also been proposed and/or threatened. The Our revenues are highly dependent on levels of air traffic, which depend on factors beyond our control. Passenger and cargo traffic volumes and air traffic movements depend on many factors beyond our control, including the COVID-19 pandemic, seasonality, severe or extreme weather, economic conditions in Mexico, the United States or globally, the political situation in Mexico and elsewhere in the world, the attractiveness of the destinations of our airports relative to that of other competing destinations, fluctuations in fuel prices (which could cause airlines to increase tariffs and have a negative impact on traffic as a result of increased fuel costs), changes in regulatory policies applicable to the aviation industry and an increase or decrease in Mexican airlines’ fleets, among others. For more information on the effect COVID-19 has had on our passenger traffic, see “The outbreak of COVID-19 has had, and may continue to have, a negative impact on the global economy and on our business, operations and results.” 2 Our revenues are closely linked to both passenger and cargo traffic volumes and to the number of air traffic movements at our airports. These factors directly determine our revenues from aeronautical services and indirectly determine our revenues from non-aeronautical services. Any decreases in passenger and cargo traffic volumes and the number of air traffic movements to or from our airports as a result of these factors could adversely affect our business, results of operations, prospects and financial condition. Our business could be adversely affected by global political developments, particularly with regard to U.S. policies toward Mexico. Changes in economic, political and regulatory conditions in the United States or in U.S. laws and policies governing foreign trade and foreign relations could create uncertainty in the international markets and could have a negative impact on the Mexican economy and public finances. This correlation is due, in part, to the high level of economic activity between the two countries generally, including the trade facilitated by the North American Free Trade Agreement (“NAFTA”), as well as physical proximity. On October 1, 2018, Mexico announced that it had reached an agreement with Canada and the United States to modernize their free trade relationship and replace NAFTA. The new agreement, which is known as the United States Mexico Canada Agreement (USMCA), was formally signed on November 30, 2018 and entered into force on July 1, 2020. We cannot predict the impact of the USMCA on particular industries or government policies and the changes to international trade that may result. Following the U.S. elections in November 2020 and the change in the U.S. administration for the four-year period from 2021 to 2024, there is uncertainty regarding future U.S. policies with respect to matters of importance to Mexico and its economy, particularly trade and migration. Policies adopted could create tension between the Mexican
and U.S. governments or reduce economic activity between Mexico and the United States, thus affecting the travel of passengers between those countries. For more information on travel restrictions related to COVID-19, see “The outbreak of COVID-19 has had, and may continue to have, a negative impact on the global economy and on our business, operations and results.” Furthermore, in September 2017, the U.S. administration announced its plan to phase out the Deferred Action for Childhood Arrivals program (“DACA”), which allows certain individuals who entered the U.S. as undocumented minors to defer immediate deportation and to be eligible for a work permit. Because the majority of individuals who benefit from this program are from Mexico, terminating the program may affect relations between Mexico and the U.S., as well as transit between the two countries. On The foregoing factors and further policy changes could have an impact on Mexico’s gross domestic product (“GDP”) growth, the exchange rate between the U.S. dollar and the Mexican peso, levels of foreign direct investment and portfolio investment in Mexico, interest rates, inflation, and the Mexican economy generally; which in turn, may impact the level of passenger traffic in our airports and adversely affect our financial condition or results of operations. 3 Our business could be adversely affected by a downturn in the global economy, particularly with regard to the U.S. economy. The outbreak of COVID-19 has adversely affected the economies and financial markets of many countries, including the United States and Mexico. The extent to which COVID-19 further impacts these economies will depend on future developments, which are highly uncertain and cannot be predicted, including the duration and scope of the outbreak and the actions taken to contain or treat the outbreak, within the United States, Mexico and around the world. Moreover, international events, such as decreases in oil prices and the slower growth in the Chinese economy, have led to volatility in the international markets and adversely affected the Mexican economy. As a result, Mexico has been forced to cut public expenses, since oil output is one of the main sources of revenue in Mexico. In recent years, however, the U.S. economy has Our business is particularly dependent on the condition of the U.S. economy and is particularly influenced by trends in the United States relating to leisure travel, consumer spending and international tourism. For more information on U.S. travel restrictions related to COVID-19, see “The outbreak of COVID-19 has had, and may continue to have, a negative impact on the global economy and on our business, operations and results.” According to the Mexican National Institute of Statistics and Geography (Instituto Nacional de Estadística y Geografía), in
Since the demand for aeronautical services in Mexico is substantially dependent on the performance of the Mexican economy, which is in turn highly dependent on the performance of the U.S. economy, a further downturn in the U.S. economy or a disruption in commercial activities among the U.S. and Mexico could cause a material adverse effect on our results of operations, prospects and financial condition. More generally, further downturns in the global economy and/or in the Mexican economy would also adversely affect our business, results of operations, prospects and financial condition. See also “—Risks Related to Mexico—The Company is significantly dependent upon the volume of air passenger traffic in Mexico, and negative economic developments in Mexico could adversely affect its business and results of operations.” Variations in international fuel prices could directly or indirectly adversely affect our business and results of operations. International fuel prices, which represent a significant cost for airlines, have experienced significant volatility in recent years. For example, European Brent crude oil spot prices increased from U.S.$51.22 per barrel on December 31, 2020, to U.S.$ 77.24 per barrel on December 31, 2021, and increased from U.S.$ 77.24 per barrel on December 31, 2021 to U.S.$82.82 per barrel on December 31, 2022. The price of fuel may be subject to further fluctuations resulting from a reduction or increase in output of petroleum, voluntary or otherwise, by oil-producing countries, other market forces, a general increase in international hostilities, or any future terrorist attacks. Further, the outcome of the conflict between Russia and Ukraine and the impact that it may continue to have on fuel prices is uncertain. For more information, see 4 “Large scale international events, including acts of terrorism, wars and the military action launched by Russian forces in Ukraine, could have a negative impact on international air travel and our revenues.” In the past, increased costs were among the factors leading to cancellations of routes, decreases in frequencies of flights and, in some cases, even contributed to filings for bankruptcy by some airlines. Our business is highly dependent on the operations of Mexico City International Airport. In On July 3, 2017, the Mexican Federal Antitrust Commission (Comisión Federal de Competencia Económica, or the “Antitrust Commission”) issued Corrective Measures for the Mexico City International Airport to address the inefficiencies observed at the airport during congested hours, limiting operations between the hours of 7:00 and 22:00. In response, on September 29, 2017, the Ministry of Infrastructure, Communications and Transportation (Secretaría de Infraestructura, Comunicaciones y Transportes and formerly known as Ministry of Communications and Transportation)announced in the Federal Official Gazette the General Guidelines for the allocation of slots at congested airports (see “Risk To alleviate congestion at the Mexico City International Airport, a new Mexico City international airport was being built and was expected to start operations in 2022. The current Mexican federal administration that took office on December 1, 2018 cancelled the construction of the new Mexico City international airport. There is still uncertainty about what effect, if any, the cancellation of the new Mexico City international airport will have on our operations and passenger traffic results. In addition, the current Mexican federal administration announced that it would seek to alleviate congestion at the existing airport by (i) converting a military airport approximately 40 kilometers (24.9 miles) outside of Mexico City (the 5 In August, 2022, the Mexico City International Airport entered into an agreement with the airlines servicing the airport to temporarily reduce their flights by 15% from 61 to 52 air traffic movements per hour from October 31, 2022 to March 25, 2023, in an attempt to reduce flight saturation. On February 2, 2023, the Mexican federal administration issued a decree pursuant to which domestic and international cargo operators (with the exception of those that provide combined cargo and passengers operations) are (i) prohibited to operate in the Mexico City International Airport and (ii) required to relocate their operations no later than 108 business days following the issuance of the decree. There is still uncertainty about Security enhancements have resulted in increased costs and may require additional investments in the future. In
security at our airports, and our general liability insurance premiums increased substantially. For more information on the insurance policies we carry, see “Item 4. Information on the Company – Property, Plant and Equipment.” Because a substantial majority of our international flights involve travel to and from the United States, we may be required to comply with security directives of the U.S. Federal Aviation Administration (“FAA”) in addition to the directives of Mexican aviation authorities. World events, such as the terrorist attacks worldwide attributed to the Islamic State of Iraq and Syria or any other organization, could lead to additional security measures taken by the FAA or the International Civil Aviation Organization (“ICAO”), an agency of the United Nations Organization, and could require us to incur in additional costs to comply with these measures. Similarly, our airport operations and passenger volume could be negatively impacted by terrorist attacks on aircrafts, such as those which occurred with international airlines’ aircraft operating over Egypt and the Ukraine in 2015. While governments in other countries have agreed to indemnify airlines for liabilities they might incur resulting from terrorist attacks, the Mexican government has not done so and has given no indication of any intention to do the same. In addition, fuel prices and supplies, which constitute a significant cost for airlines using our airports, may be subject to increases resulting from any future terrorist attacks, a general increase in international hostilities or a reduction in output of fuel, voluntary or otherwise, by oil producing countries. See “Risk Factors— Large scale international events, including acts of terrorism, wars and the military action launched by Russian forces in Ukraine, could have a negative impact on international air travel and our revenues.” Such increases in airlines’ costs have resulted in higher airline ticket prices and decreased demand for air travel generally, thereby having an adverse effect on our revenues and results of operations. As a result of the COVID-19 pandemic, airlines and airports have had to implement additional security and compliance measures to comply with local health and safety regulations, which could increase costs. We have, among other things, installed disinfectant gel dispensers and air purifiers, mandated facemasks, installed preventive barriers, instituted spacing and flow of movement measures, and provided training to our employees. Furthermore, under the Mexican Airport Law, we are currently responsible for inspecting passengers and their 6 The operation of baggage screening equipment could increase our expenses and may expose us to greater liability.
The ICAO’s security guidelines requires checked baggage on all international commercial flights and domestic commercial flights to undergo a comprehensive screening process for the detection of explosives. In some countries, such as the United States, the federal government (in the case of the United States, through the Transportation Security Administration (“TSA”)) is responsible for screening checked baggage. On May 1, 2014 and July 1, 2016, the Mexican Bureau of Civil Aviation (currently the Federal Civil Aviation Agency (Agencia Federal de Aviación Civil or “AFAC”)) published mandatory circulars CO We incur ongoing expenses to maintain and operate this equipment and expect to incur ongoing expenses to maintain any equipment purchased. In the future, we could be required to undertake significant additional capital expenditures for items such as a new screening technology or additional equipment if screening guidelines are expanded further and require that additional steps be taken to comply with the requirements. For instance, replacement of the majority of our baggage screening equipment with new Computer Tomography X-ray (CTX) baggage screening equipment
with the baggage screening guidelines, but AFAC may require additional investments. These additional expenses could restrict our liquidity and adversely affect our Although Mexican law holds airlines liable for screening checked baggage, the purchase, installation and operation of equipment could increase our exposure to liability as a result of our involvement in the screening process. Competition from other tourist destinations could adversely affect our business. The principal factor affecting our results of operations and business is the number of passengers using our airports. The number of passengers using our airports (particularly the Acapulco, Mazatlán and Zihuatanejo airports) may vary as a result of factors beyond our control, including the level of tourism in Mexico. In addition, our passenger traffic volume may be adversely affected by the attractiveness, affordability and accessibility of competing tourist destinations in Mexico, such as Cancún, Puerto Vallarta and Los Cabos, or elsewhere, such as Florida, Puerto Rico, Cuba, Jamaica, the Dominican Republic and other Caribbean islands and destinations in Central America. Tourism levels may decrease, and therefore the number of passengers using our airports in the future may not exceed or match current levels, which could have a direct and indirect impact on our aeronautical and non-aeronautical revenues. Our business is highly dependent upon revenues from In 7 aeronautical and non-aeronautical revenues generated at our airports, including the percentage of total revenues generated by our
As a result of the substantial contribution to our revenues from these Lastly, we cannot predict any future effect COVID-19 will have on our revenues. For more information on risks related to COVID-19 see “The outbreak of COVID-19 has had, and may continue to have, a negative impact on the global economy and on our business, operations and results.”
We are dependent on information technology, and our systems and infrastructure face certain risks, including cybersecurity risks. We rely on a variety of information technology to manage our operations. The proper functioning of these systems is critical to the efficient operation and management of our business. If critical information systems fail or are otherwise unavailable, our ability to provide services at our airports, collect accounts receivable, pay expenses and maintain our security and customer data, could be adversely affected. In addition, these systems may require modifications or upgrades as a result of technological changes or growth in our business. These changes may be costly and disruptive to our operations, and could impose substantial demands on management time. Our systems may be vulnerable to damage or disruption caused by circumstances beyond our control, such as catastrophic events, power outages, natural disasters, computer system or network failures, viruses or malware, physical or electronic In the third quarter of 2021, we detected that several of our servers had been compromised with ransomware. Relying on our backup processes and consolidated infrastructure, we were able to restore the majority of our compromised servers within 48 hours of the incident. The main systems at the airports were not affected and remained in operation with minimal disruption. To prevent future cybersecurity incidents, we are constantly updating our infrastructure with the latest security technologies, and we conduct vulnerability analyses and penetration testing periodically. Our information systems
8 We face risks associated with our diversification activities, which could lead to our inability to recover our investment as planned. We face risks associated with the nature of the diversification projects that we have developed and in which we participate as shareholders, which could impact our results of operations, prospects and financial condition. Our Terminal 2 NH Collection Hotel and our Hilton Garden Inn Hotel depend on passenger traffic travel to and from the Mexico City International Airport and the Monterrey airport, respectively, and any event that reduces passenger volume in these airports could adversely affect the results of operations of these hotels. The passenger traffic volume in such airports depends on factors beyond our control, such as the attractiveness of the commercial, industrial and tourist centers that the airports serve. Accordingly, there can be no assurance that the passenger traffic volume in such airports will increase or maintain the current level. As a result of the various measures implemented to control the spread of COVID-19, such as the suspension of non-essential activities and the reduced demand for air travel and hotel services, the operation of our two hotels has experienced significant declines in occupancy rates and in revenues. In 2020, the occupancy rates in our Terminal 2 NH Collection Hotel and our Hilton Garden Inn Hotel in the Monterrey airport were 42.4 and 41.6 percentage points lower, respectively, Both of the hotels that we operate, our Despite our efforts to retain clients, we cannot predict whether our clients will continue occupying our commercial spaces or cancel their contracts. Furthermore, the continued growth at our OMA-VYNMSA industrial park and our OMA Carga bonded warehouses business could also decline should there be a slowdown in the Mexican economy. All such factors could adversely affect the profitability of our non-aeronautical businesses and our ability to recover our investments in such projects.
Our operations depend on certain key airline customers, and the loss or suspension of operations of one or more of them could result in a loss of a significant amount of our revenues. Of the total aeronautical revenues generated at our airports in Due to increased competition, volatility in fuel prices and the general decrease in demand because of global volatility in the financial and exchange markets, economic crises and the 9 are operating in adverse conditions. Should fuel prices increase or in the event of other adverse health or economic developments, one or more of our principal carriers could become insolvent, cancel routes, suspend operations or file for bankruptcy. All such events could have a material adverse effect on our results from operations. Furthermore, any accident, incident or any other event that affects the perception of safety standards of any of the major airlines may affect their image and generate a public perception that it is less safe or reliable than other airlines. These events would affect consumer demand and the number of passengers serviced by the airline, thus affecting our business, results of operations, prospects and financial condition. The global airline industry has experienced and continues to experience significant financial difficulties and recent warnings regarding industry profitability. Some of our airline and other clients and tenants have asked for assistance, either through discounts on payments owed to us or by an extension on those payments. During 2020 and early 2021, we provided payment extensions to our main airline customers, which allowed us to mitigate noncompliance risks. In addition, the current Mexican law prohibits an international airline from transporting passengers from one Mexican location to another (unless the flight originated outside Mexico), which limits the number of airlines providing domestic service in
be modified in the future to provide for international airlines to operate domestic flights in our airports, but until then we expect to continue to generate a significant portion of our revenues from domestic travel from a limited number of airlines. Collective labor conflicts in Mexico could have an adverse impact on our results of operations. A number of events, such as (i) the endorsement by the Mexican Senate of the International Labor Organization’s Convention C098, the “Right to Organize and Collective Bargaining Convention”, (ii) the approval by Congress to modify the Mexican Federal Labor Law, and (iii) the adverse labor effect resulting from the COVID-19 crisis, have led and continue to cause labor conflicts in Mexico. In addition, such conflicts have been exacerbated by (i) new labor unions created to negotiate and/or dispute existing collective bargaining agreements on behalf of the labor unions that currently hold such contracts, (ii) a 10 increase of the general minimum wage nationwide as of January 1,
The Company cannot predict how these developments may affect the Company’s results of operations or its financial condition. Any increased demands by the Company’s unionized workers may lead to higher labor costs, which could have a negative impact on its results of operations. If a change in relations with our labor force should occur, such a change could have an adverse impact on our results of operations. If any conflicts with our employees were to arise, including with our unionized employees (which accounted for 11 Our unionized employees are represented by a national union of airport workers that operates throughout Mexico. To the extent unionized airport workers seek material modifications to the conditions agreed with us and with other Mexican airport operators, our operations could be adversely affected by union activities, including organized strikes or other work stoppages.
Our operations could be adversely affected due to changes in the collection of passenger charges. Passenger charges are collected by the airlines and then paid to us on the basis of contracts entered into with each airline operating at our airports. We cannot guarantee that all airlines will continue collecting the passenger charges for us. Should one or more airlines stop collecting passenger charges for us, we would have to collect these charges directly ourselves, which would result in additional Recently, some airlines have reported losses. In cases where we extend days of credit to airlines, substantially all of our revenues from passenger charges and other aeronautical services are secured by a performance bond or other types of guarantees; however, guarantees may not fully cover the amount owed by an airline at a certain date. In the event of the insolvency of any of these airlines, we would not be certain of the collection of any amounts invoiced to that airline in respect of passenger charges. In cases where the airlines cannot provide adequate or sufficient performance bonds or other types of guarantees, the airlines operate under advance payment conditions. In addition, the COVID-19 outbreak has and The main domestic airlines operating at our airports may refuse to pay certain increases in our specific In the past, we have entered into a series of agreements with the Mexican National Air Transportation Chamber of Commerce (Cámara Nacional de Aerotransportes) Although passenger traffic volume (and therefore overall revenues) may increase, any agreed incentives and/or discounts offered to airlines as a means to prevent or settle any potential dispute could reduce our aeronautical revenues per terminal passenger in the future. In addition, should any of our principal airline customers refuse to continue to make payment to us, or should they refuse to pay increases in our charges for aeronautical services in future years, our results of operations could be adversely impacted by decreased cash flows from operations. Our operation depends on our management team for its knowledge and experience and the loss of capable executives could affect our operations. The current and future performance of our operations depends significantly on the continuous contribution of managers and other key employees. In order to achieve the objectives of each manager or key position, the ability, experience, aptitude and knowledge of each candidate is taken into account for recruitment and personnel allocation purposes. We cannot guarantee that in the future our executive team will be maintained, or that if new executives are
incorporated, they will have the same level of knowledge and experience. The potential lack of a capable management team could adversely affect The operations of our airports may be affected by the actions of third parties, which are beyond our control. As is the case with most airports, the operation of our airports is largely dependent on the services of third parties, such as air traffic control authorities, airlines, airline providers and ground transportation providers. We also depend upon the Mexican government or government entities for provision of services, such as electricity, supply of fuel to aircraft, air traffic control and immigration and customs services for our international passengers. The disruption or stoppage of taxi or bus services at one or more of our airports could also adversely affect our operations. We are not responsible for and cannot control the services provided by these parties. Any disruption in, or adverse consequence resulting from, their services, including a work stoppage or other similar event, may have a material adverse effect on the operation of our airports and on our results of operations. In addition, if any service providers were to halt operations at any of our airports, we could be required to seek a new provider of these services or to provide these services ourselves, either of which may result in increased costs and have an adverse impact on our results of operations. We may be liable for property taxes as a result of claims asserted against us by certain municipalities. Various municipalities have assessed tax credits against us for the payment of property taxes with respect to the real estate on which we operate our airports in those cities. We have appealed all the administrative law proceedings, as well as the tax credits, assessed against us and, while some have been dismissed by the relevant administrative authority, some are still pending. We believe there are no legal grounds which enable the municipalities to collect such taxes and although we intend to defend our position vigorously, if procedures are brought by authorities, there can be no assurance that we will be successful in such defense. See “Item 8. Financial Information—Legal Proceedings—Property Tax Claims” for a full discussion of these property tax proceedings. Some Mexican airport operators contesting the assessment of similar property tax claims have been required to post material surety bonds in connection with their challenge of those assessments. If we are required to post similar surety bonds in the future, the terms of the surety bonds may restrict our ability to pay dividends or otherwise limit our flexibility. In addition, if we are required to pay for additional state or municipal rights, we could face costs, limiting our liquidity, flexibility and ability to pay dividends. Furthermore, if the Mexican 13 Inability to generate sufficient future taxable profits or adverse changes to tax laws, regulatory requirements or accounting standards could have a negative impact on the recoverability of certain deferred tax assets. We recognize deferred tax assets relating to tax losses carried forward and deductible temporary differences only to the extent that it is probable that future taxable profit will be available against which the tax losses carried forward and the temporary differences can be utilized. Net deferred tax assets amounted to approximately
Natural disasters could adversely affect our business. From time to time, the northern and central regions of Mexico experience torrential rains, hurricanes (particularly during the months of July through September) and, depending on the region, earthquakes and volcanic activity. In addition, the Mazatlán, Culiacán and Acapulco airports are susceptible to occasional flooding due to torrential rainfall. Natural disasters may impede or cause the suspension of operations, damage infrastructure necessary to our operations or adversely affect the destinations served by our airports. For instance, on November 3, 2016, the Tampico airport flooded due to heavy rains, causing the collapse of part of the bordering fence. Although, the affected neighbors filed claims for damages against the Tampico airport, the insurance carrier rejected the neighbors’ claims alleging that the damage was caused by a natural disaster. In addition, the Terminal 2 NH Collection Hotel located in Terminal 2 of the Mexico City International Airport was temporarily closed after the earthquake on September 19, 2017. Although the Terminal 2 NH Collection Hotel did not suffer any structural damage, utilities of the hotel were interrupted and hotel operations were suspended until September 25, 2017. Further, our international passenger traffic decreased 1.2% during September 2017, partially due to the cancellation of flights caused by hurricanes Harvey and Max. Any of these events could reduce our passenger and cargo traffic volume in the airports and our guest volume in the Terminal 2 NH Collection Hotel. We have insurance for the physical facilities at our airports against damage caused by natural disasters, accidents or other similar events, but we do not have insurance covering losses due to resulting business interruption. Moreover, should losses occur, losses caused by damages to the physical facilities may exceed the pre-established limits on any of our insurance policies. Our reputation and business could be adversely affected in the event of an emergency, accident or similar incident involving our airports. We are exposed to potential significant losses and material adverse effects on our business in the event that any of our airports, or any aircraft operating within our airports is subject to an emergency, accident, terrorist incident or any other similar incident, and significant costs related to passenger claims, repairs or replacement of a damaged asset. For more information on recent events affecting our airports as a result of similar incidents see “High incidences of crime in Mexico, including extortion and drug trafficking, could adversely affect the Mexican economy and may have a negative effect on the Company’s business”. There can be no assurance that we will not be affected by such events or that the amount of our insurance coverage will be adequate in the event such circumstances arise and any such event could cause a substantial increase in our insurance premiums. See “—Our insurance policies may not provide sufficient coverage against all liabilities.” In addition, any future airport and/or aircraft emergency, accident or similar incident, even if fully covered by insurance or even if it does not involve our airports, may create a public perception that our airports or the facilities included within out airports is less safe or reliable than other transportation alternatives, which could have an 14 adverse impact on our reputation and could have a material adverse effect on our business, results of operations and financial condition. Our operations are at greater risk of disruption due to the dependence of several of our airports on a single commercial runway. As is the case with many other domestic and international airports around the world, several of our airports, including the Monterrey, Culiacán, Ciudad Juárez and Mazatlán airports, have only one runway for most commercial flights. The operation of our runways may be disrupted due to required maintenance or repairs. In addition, our runways may require unscheduled repair or maintenance due to natural disasters, aircraft accidents and other factors that are beyond our control. The closure of any runway for a significant period of time could have a material adverse effect on our business, results of operations, prospects and financial condition. We are exposed to risk related to construction projects. The building requirements under our Master Development Programs could encounter delays or cause us to exceed our budgeted costs for such projects, which could limit our ability to expand capacity at our airports, increase our operating or capital expenditures and could adversely affect our business, results of operations, prospects and financial condition. Such delays or budgetary overruns also could limit our ability to comply with our Master Development Programs, which are established as a necessary requirement to our concessions. From March 31, 2020 to June 1, 2020, we stopped most construction works, including those needed to comply with our Master Development Program, as a result of the restrictions imposed by the Mexican government on non-essential activity, including construction, in Mexico due to the COVID-19 outbreak. These restrictions generated delays in our scheduled works to comply with our Master Development Program commitments for 2020. Even though the delays were notified to and agreed upon with the regulator, should we experience any other delay that prevents us from complying with our Master Development Program commitments, there could be penalties which could adversely affect our business, results of operations, prospect and financial condition.
We are exposed to the risk of non-performance by our subcontractors. We currently subcontract certain services (including security and surveillance services) necessary to conduct our operations. In the event that our subcontractors fail to perform their obligations under our agreements, we could incur extra costs in providing replacements and could be exposed to liability for operations that we may have to provide directly, which could adversely affect our business, results of operations, prospects and financial condition. In accordance with applicable labor laws, subcontractors are required to register their employees with the Mexican Social Security Institute (Instituto Mexicano del Seguro Social), the National Workers’ Housing Fund Institute (Instituto del Fondo Nacional de la Vivienda para los Trabajadores) and anyone employing the services of subcontractors that has failed to comply with these laws is jointly liable for the payment of social security obligations as well as any applicable penalties. Therefore, if subcontractors providing services at our airports do not have their employees registered at the Mexican Social Security Institute and the National Workers’ Housing Fund Institute, we could be held jointly liable for the payment of social security obligations that such contractors may have, as well as any applicable penalties. For more information on the latest legal reform affecting subcontracting and its effects on the Company, see also “—Risks Related to the Regulation of Our Business— Changes to Mexican laws, regulations and decrees applicable to the Company could have a material adverse impact on the results of operations”. Our ability to expand certain of our airports and to comply with applicable safety guidelines could be limited by difficulties we encounter in acquiring additional land on which to operate our airports. Certain guidelines established by the ICAO require the maintenance of a perimeter surrounding the land used for airport operations. At several of our airports, we do not control portions of the land within the required perimeters. If portions of such land adjacent to certain of our airports are developed by third parties in a manner that encroaches on the 15 required perimeters, our ability to comply with applicable guidelines of the ICAO or to expand our airport operations could be adversely affected. Also, the growth of certain cities in the proximity of our airports could limit our ability to expand our airports. To allow the future expansion of the Monterrey airport, including the construction of a second commercial runway and the relocation of the control tower, Our future profitability and growth will depend upon our ability to expand our airports in the future. Potential limitations on our possibility of expansion, such as those described above, could restrict any such expansion and thus have a material adverse effect on the future profitability and growth of our business. We are exposed to risks inherent to the operation of airports. We are obligated to protect the public at our airports and to reduce the risk of accidents at our airports. As with any company dealing with members of the public, we must implement certain measures for the protection of the public, such as fire safety in public spaces, design and maintenance of car parking facilities and access routes to meet road safety rules. We are also obligated to take certain measures related to aviation activities, such as maintenance,
management and supervision of aviation facilities, rescue and fire-fighting services for aircraft, measurement of runway friction coefficients, flood control at the Acapulco airport and measures to control the threat from birds and other wildlife on airport sites. These obligations may require us to incur additional costs and could increase our exposure to liability to third parties for personal injury or property damage resulting from our operations. Our insurance policies may not provide sufficient coverage against all liabilities. While we seek to insure all reasonable risks, our insurance policies may not cover all of our liabilities in the event of an accident, terrorist attack or any other incident. The markets for airport insurance and construction insurance are limited, and a change in coverage policy by the insurance companies involved could reduce our ability to obtain and maintain adequate or cost-effective coverage. A certain number of our assets cannot, by their nature, be covered by property insurance (notably aircraft movement areas, and certain civil engineering works and infrastructure). In addition, we do not currently carry business-interruption insurance. We are exposed to risks related to handling cargo. The air cargo system is a complex, multi-faceted network that handles a vast amount of freight, packages and mail carried aboard passenger and 16 mechanisms that have allowed airlines to obtain certifications such as the ACC3, allowing such airlines to transport cargo to Europe. We may be subject to risks related to the integrity of our facilities or the reduction of our cargo traffic volume. The occurrence of such events could adversely affect our business, results of operations, prospects and financial condition. We may not be able to detect money laundering operations and other illegal or improper activities, which could expose us to additional liabilities and adversely affect our operations and financial results. We are required to comply with applicable anti-money laundering and anti-terrorism and other regulations in Mexico. Such laws require us to adopt and implement certain policies and procedures designed to detect and prevent transactions with third parties involved in money laundering or terrorist activities. Although we have adopted such policies and procedures, these procedures require services related to third parties that are not under our control, including third-party providers of complementary services or retailers, restaurants and other commercial tenants leasing spaces at the airport. To the extent that we may fail to fully comply with applicable laws and regulations or fail to detect illegal activities carried out by third parties, the competent authorities may impose certain fines on us and our reputation may also be adversely affected. We could be exposed to additional risks if we pursue business opportunities in other countries. From time to time, we may consider strategic participation in airport assets located in other countries.
Risks Related to the Regulation of Our Business The Company provides a public service regulated by the Mexican government, and the flexibility in managing aeronautical activities is limited by the regulatory environment in which the Company operates. The Company’s aeronautical fees charged to airlines and passengers are regulated, like most airports in other countries. In 17 The Company’s results of operations may be adversely affected by required efficiency adjustments to its maximum rates. The Company’s maximum rates in Mexico are subject to annual efficiency adjustments, which have the effect of reducing the maximum rates for each year to reflect projected efficiency improvements. For the five year period ending December 31, 2020 and December 31, 2025, the maximum rates applicable to the Company’s airports reflect an annual efficiency improvement of 0.70%. Future annual efficiency adjustments will be determined by the Ministry of Infrastructure, Communications and Transportation in connection with the setting of each Mexican airport’s maximum rates every five years. For a description of these efficiency adjustments, see “Item 4. Information on the Company—Regulatory Framework—Revenue Regulation—Methodology for Determining Future Maximum Rates.” We cannot provide assurance that we will achieve efficiency improvements sufficient to maintain or increase our operating income as a result of the progressive decrease in each of our airport’s maximum rate. The Company cannot predict how the regulations governing the business will be applied. Many of the laws, regulations and instruments that regulate the Company’s business were adopted or became effective in 1999, and there is only a limited history and examples that would allow the Company to predict the impact of these legal requirements on its future operations. Mexican law establishes ranges of sanctions that might be imposed should the Company fail to comply with the terms of one of its concessions, the Mexican Airport Law and its regulations or other applicable laws. The Company cannot predict the sanctions that are likely to be assessed for a given violation within these ranges. It may encounter difficulties in complying with these laws, regulations and instruments. Although the Master Development Programs and maximum rates through 2025 have been set, the Company cannot predict what the Master Development Program for 2026 and following years will establish. When determining the maximum rates for the next five year period (from 2026 to 2030), the Ministry of Infrastructure, Communications and Transportation may be solicited by different entities (for example, the Antitrust Commission) and the carriers operating at our airports) to modify the maximum rates, thus reducing the Company’s profitability. The laws and regulations governing the business, including the rate-setting process and the Mexican Airport Law, may change in the future or be
applied or interpreted in a way that could have a material adverse effect on the Company’s business, results of operations, prospects and financial condition. Additionally, on October 16, 2019, the Ministry of Infrastructure, Communications and Transportation established AFAC, an independent regulatory agency, that replaced the Mexican Bureau of Civil Aviation (Dirección General de Aeronáutica Civil). AFAC is responsible for establishing, coordinating, overseeing and controlling international and national air transportation, as well as the airports, complementary services and generally all activities related to civil aviation. On February 20, 2014, a bill of the For example, pursuant to the Federal Antitrust Law (Ley Federal de Competencia Económica), the Antitrust Commission determined that the slots allocated to air carriers at the Mexico City International Airport constitute an essential service. The Antitrust Commission found that the allocation of slots led to flight delays and cancellations and, among others, hindered entry to new competitors. On July 3, 2017, the Antitrust Commission issued a series of corrective measures (the “Corrective Measures”) for the Mexico City International Airport to address the inefficiencies and anticompetitive effects observed at such airport. 18 In response to the Antitrust Commission’s findings, the Ministry of Infrastructure, Communications and Transportation (Secretaría de Infraestructura, Comunicaciones y Transportes) published an amendment to the regulations of the Mexican Airport Law in the Federal Official Gazette on September 29, 2017, as well as general guidelines for the allocation of slots at congested airports (the “General Guidelines”). The Antitrust Commission found that the Even though none of its airports have been declared congested as of the date of this report, the Company cannot predict whether or when this will happen. Similarly, it cannot predict whether the Antitrust Commission will declare any of its airports, or any complementary or commercial service provided at the airports, as essential services, and consequently, establish rules, recommendations, guidelines or conditions that could limit or restrict the Company’s aeronautical and/or non-aeronautical revenues. On December 15, 2022, the Mexican President presented to Congress an initiative to amend the Civil Aviation Law and the Airports Law. See “Changes to Mexican laws, regulations and decrees applicable to the Company could have a material adverse impact on the results of operations.” The bill to amend the Civil Aviation Law was approved by the Mexican Chamber of Deputies on April 19, 2023. The bill still needs to be discussed and approved by the Mexican Senate, and there are no assurances as to whether this initiative will be eventually approved and on which terms. The regulations pursuant to which the maximum rates applicable to the aeronautical revenues are established do not guarantee that the consolidated results of operations, or the results of operations of any airport, will be profitable, or that the Company will realize the expected return on investment. The regulations applicable to the Company’s aeronautical activities establish an annual maximum rate for each airport, which is the maximum annual amount of revenues per workload unit (which is equal to one terminal passenger or 100 kilograms (220 pounds) of cargo) that the Company may earn at that airport from services subject to price regulation. For a discussion of the framework for establishing its maximum rates and the application of the rates, see “Item 4. Information on the Company—Regulatory Framework—Revenue Regulation.” On November 30, 2020, the Ministry of Infrastructure, Communications and Transportation approved, based on the terms of the Company’s concessions, the
maximum rates for its airports from January 1, 2021 through December 31, 2025. Under the terms of the Company’s concessions, there is no guarantee that the results of operations of any airport will be profitable. The Company may not realize its expected return on investment from investments under the Master Development Programs. The Company’s concessions provide that an airport’s maximum rates will be adjusted periodically for inflation (determined by reference to the Mexican Producer Price Index (Índice Nacional de Precios al Productor), excluding fuel). Although the Company is entitled to request additional adjustments to an airport’s maximum rates under certain circumstances including, among others, required capital investments not foreseen in the Master Development Programs, decreases in capital investments attributable to Mexican economy-related passenger traffic decreases or modifications of the concession tax payable by the Company, its concessions provide that such a request will be approved only if the Ministry of Infrastructure, Communications and Transportation determines that certain limited events specified in the concessions have occurred. Therefore, such a request may not be granted in the future. If a request to increase an airport’s maximum rates is not granted, and the Company is impacted by the circumstances that led to the request, its results of operations and financial condition could be adversely affected, and the value of Series B shares and ADSs could decline. The Company business is dependent upon international regulations that affect Mexican airlines. The FAA evaluates the legal framework for civil aviation and issues related to the monitoring, staff training and inspection processes related to regulations issued by the ICAO. 19 On The FAA had already downgraded Mexico’s aviation safety rating from a Category 1 rating to a Category 2 rating on July 30, 2010, as a result of the FAA’s visit to the Mexican Bureau of Civil Aviation (currently AFAC) between January and July 2010. The downgrade was attributable to an insufficient number of flight inspectors and administrative and organizational elements in the Mexican Bureau of Civil Aviation (currently AFAC). The consequences of the have 40 days to confirm whether Mexico In 2020, 2021 and 2022, 2.8%, 5.0% and 3.0%, respectively, of our total passenger traffic, corresponded to passengers who traveled through our airports on flights to or from the United States operated by Mexican Airlines. The Company cannot be certain of how long this rating will be maintained and we cannot predict what impact such a downgrade would have on our passenger traffic or results of operations, or on the public perception of the safety of our airports. If the Company exceeds the maximum rate at any airport at the end of any year, it could be subject to sanctions. Historically, the Company has set the tariffs it charges for aeronautical services at each airport in order to come as close as possible to its authorized maximum rate for that airport in any given year. For example, in The specific tariffs the Company charges for aeronautical services are determined based on various factors, including projections of passenger traffic volumes, the Mexican Producer Price Index (excluding fuel), the Mexican Consumer Price Index and the value of the peso relative to the U.S. dollar. These variables are outside of the Company’s control. The Company’s projections could differ from the applicable actual data, and, if these differences occur at the end of any year, they could cause the Company to exceed the maximum rate at any one or more of its airports during that year.
If the Company exceeds the maximum rate at any airport at the end of any year, the Ministry of Infrastructure, Communications and Transportation may assess a fine and may reduce the maximum rate at that airport in the subsequent year. The imposition of sanctions for violations of certain terms of a concession, including for exceeding an airport’s maximum rate, can result in termination of the concession if the relevant term has been violated and sanctions have been imposed at least three times. In the event that any one of the Company’s concessions is terminated, its other concessions may also be terminated. For a discussion of events that may lead to a termination of a concession, see “Item 4. Information on the Company—Regulatory Framework—Penalties and Termination and Revocation of Concessions and Concession Assets.” Depreciation of the peso may cause the Company to exceed the maximum rates. The Company aims to charge prices that are as close as possible to its maximum chargeable rates, and it is entitled to adjust the specific tariffs only once every six months for inflation (or earlier upon a cumulative increase of 5% in the Mexican Producer Price Index (excluding fuel)). However, the Company generally collects passenger charges from airlines 30 to 60 days following the date of each flight. The tariffs for the services that it provides to international flights or international passengers are generally denominated in U.S. dollars but are paid in Mexican pesos (or “pesos”) 20 based on the average exchange rate for the month prior to each flight. Accordingly, depreciation of the peso, particularly late in the year, could cause the Company to exceed the maximum rates at one or more of its airports, which could lead to the imposition of fines and the subsequent termination of one or more of its concessions. The peso has historically experienced significant volatility. From December 31, The Mexican government may terminate or reacquire the concessions under various circumstances, some of which are beyond the control of the Company. The Company’s concessions are its principal assets, and it would be unable to continue operations without them. A concession may be revoked by the Mexican government for certain prescribed reasons, including the failure to comply with the Master Development Programs, a temporary or permanent halt in the Company’s operations, actions affecting the operations of other concession holders in Mexico, the failure to pay damages resulting from its operations, the failure to keep the rates from exceeding its maximum rates or the failure to comply with any other material term of its concessions. Violations of certain terms of a concession (including violations for exceeding the applicable maximum rate) can result in revocation of a concession only if sanctions have been imposed for violations of the relevant term at least three times. Violations of other terms of a concession can result in the immediate termination of the concession. The concessions may also be terminated upon the Company’s bankruptcy or insolvency. Violations of the Mexican Airport Law, its regulations or other federal regulations could result in similar sanctions. In the event that any one of the Company’s concessions is terminated, its other concessions may also be terminated. For a discussion of events that may lead to a termination of a concession, see “Item 4. Information on the Company—Regulatory Framework—Penalties and Termination and Revocation of Concessions and Concession Assets.” Under applicable Mexican law and the terms of the Company’s concessions, its concessions may also be made subject to additional conditions, including under the renewed Master Development Programs, which the Company may be unable to meet. Failure to meet these conditions may also result in fines, other sanctions and the termination of the concessions. The Mexican government may also terminate one or more of the concessions at any time through reversion, if, in accordance with applicable Mexican law, it determines that it is in the public interest to do so. The Mexican government may also assume the operation of any airport in the event of war, public disturbance or a threat to national security. In addition, in the case of a force majeure event, the Mexican government may require the Company to implement certain changes in its operations. In the event of a reversion of the public domain assets that are the subject of the concessions, the Mexican government under Mexican law is required to compensate the Company for the value of the concessions or added costs based on the results of an audit performed by appraisers or, in the case of a mandated
change in the Company’s operations, the cost of that change. Similarly, in the event of an assumption of the Company’s operations, other than in the event of war, the government is required to compensate it and any other affected parties for any resulting damages. The Company may not receive compensation equivalent to the value of its investment in or any additional damages related to its concessions and related assets in the event of such action. In the event that any one of the Company’s concessions is terminated, whether through revocation or otherwise, its other concessions may also be terminated. Thus, the loss of any concession would have a material adverse effect on the business and results of operations. The Mexican government could grant new concessions that compete with the airports operated by the Company. The Mexican government could grant additional concessions to operate existing government-managed airports or authorize the construction of new airports, which could compete directly with the airports operated by the Company. 21 On February 5, 2014, the Mexican government announced in the Federal Official Gazette that the Ministry of Infrastructure, Communications and Transportation granted to Administradora de Servicios Aeroportuarios de Chihuahua, S.A. de C.V., a concession for 20 years to construct, operate and exploit a civil-aviation airport in the municipality of Bocoyna, Chihuahua, located 250 kilometers (144 miles) from the city of Chihuahua, within an area of 95.5 hectares (0.4 square miles). The government of the state of Chihuahua owns 98% of the capital stock of Administradora de Servicios Aeroportuarios de Chihuahua, S.A. de C.V. The airport has an ICAO Category 3C rating and could present competition to the Company’s airport located in the municipality of Chihuahua, which has a higher ICAO Category 4D rating and is located 18 kilometers (11.2 miles) from the city of Chihuahua. The Ministry of Infrastructure, Communications and Transportation has the capacity to upgrade the category of the airport depending on improvements to infrastructure made by the concessionaire or could downgrade the category if the concessionaire does not maintain adequate conditions in the airport. On February 21, 2020, the State of Chihuahua announced that the airport was expected to start operations in late 2020, with limited operations through late 2021. On In the future, the Company may face competition from Aeropuerto del Norte, an airport near Monterrey operated by a third party pursuant to a concession. Historically, Aeropuerto del Norte has been used solely for general aviation operations. The state of Nuevo León has requested in the past that the Ministry of Infrastructure, Communications and Transportation amend Aeropuerto del Norte’s concession to allow it to serve commercial aviation operations. To date, the Ministry of Infrastructure, Communications and Transportation has not amended Aeropuerto del Norte’s concession. However, the Ministry of Infrastructure, Communications and Transportation may authorize such an amendment and commercial aviation flights may operate from Aeropuerto del Norte in the future. Any competition from other such airports could have a material adverse effect on the Company’s business, results of operations, prospects and financial condition. Under certain circumstances, the grant of a concession for a new or existing airport must be made pursuant to a public bidding process. In the event that a competing concession is offered in a public bidding process, the Company may not participate in such a process, or it may not be successful if it were to participate. See “Item 4. Information on the Company—Regulatory Framework—Grants of New Concessions.” The Ministry of Infrastructure, Communications and Transportation could require the Company to monitor certain aircraft movements at its airports that the Company does not currently control, which could result in increased costs. The Mexican Air Traffic Control Authority (Servicios a la Navegación en el Espacio Aéreo Mexicano) or “SENEAM”, could require the Company to monitor certain aircraft movements at its airports that the Company does not currently control, which could result in increased costs. SENEAM may require the Company to manage and control aircraft movements in and out of its arrival and departure gates and remote boarding locations at its airports. Should SENEAM require the Company to control, or if the Company, for efficiency purposes, requests to control, these aircraft movements directly at any or all of its other airports in the future, the Company’s results of operations could be negatively impacted by increased operating insurance and liability costs resulting from taking on these obligations.
Changes to Mexican laws, regulations and decrees applicable to the Company could have a material adverse impact on the results of operations. In recent years, the Mexican government has implemented changes to the tax laws applicable to Mexican companies, including the Company. The terms of the Company’s concessions do not exempt it from any changes to the Mexican tax laws. Should the Mexican government implement changes to the tax laws that result in the Company having significantly higher income tax, the Company will be required to pay higher amounts due pursuant to any such changes, which could have a material adverse impact on its results of operations. 22 On December 27, 2016, the Ministry of Finance and Public Credit announced an increase, effective January 1, 2017, in the maximum gasoline and diesel prices to be applied in certain regions of Mexico, which caused an increase of gasoline prices of up to 20% in those areas. Furthermore, in November 2017, the Mexican Government removed price controls on gasoline and On May 1, 2019, the Mexican Government published significant reforms in the Federal Official Gazette to the Mexican Federal Labor Law. These changes include the creation of courts specializing in labor law and protections to the collective rights of workers and union rights. As a result of these reforms, employees cannot be forced to join a union and more than one union can exist in every workplace. Currently, all unionized Company employees are represented by a national union of airport workers that operates throughout Mexico. To the extent unionized airport workers seek to create or join new unions, and/or materially modify the conditions agreed with the Company and with other Mexican airport operators, the Company’s operations could be adversely affected by union activities, including organized strikes or other work stoppages. The Company cannot predict how these developments may affect the Company’s results of operations or its financial condition. Any increased demands by the Company’s unionized workers may lead to higher labor costs, which could have a negative impact on its results of operations. For more information, see “Collective labor conflicts in Mexico could have an adverse impact on our results of operations” and “If a change in relations with our labor force should occur, such a change could have an adverse impact on our results of operations.”
In December 2019, the Mexican government published several amendments to the Income Tax Law, Value Added Tax Law, Excise Tax Law and the Federal Tax Code, most of which became effective on January 1, 2020. This set of tax reforms is one of the most important in the past few years and its main purpose is to tackle tax evasion by strengthening tax authorities’ control mechanisms. These amendments imposed stringent restrictions on the deductibility of certain expenses, such as a new earnings-stripping rule applicable to net interest, and the non-deductibility of payments to related parties that are deemed subject to preferential tax regimes or by means of structured arrangements, introduced regulations regarding hybrid mismatches and added amendments to the tax treatment applicable to tax transparent foreign entities or arrangements, all of which could affect our operating results. None of these amendments significantly impacted our operating results in 2021. The 2020 tax reform also introduced a new mandatory disclosure regime aimed at tax advisors, for purposes of reporting and monitoring specific tax schemes listed under article 199 of the Federal Tax Code. On January 11, 2021, the Mexican Government published reforms to Article 311 of Mexican Federal Labor Law in the Federal Official Gazette, regulating remote working conditions. As a result of these reforms, employees that work more than 40% of their work hours from home or from any other place that is not the applicable company’s domicile without supervision or guidance from the employer have new rights and obligations. These new rules also set forth new obligations for employers. For example, employers must now provide the necessary tools and services for employees to fulfill their jobs. This reform became effective as of January 12, 2021. While, as of the date of this report, the Company no longer implements a work from home policy, we cannot determine whether these developments could affect the Company’s results of operations in the future. 23 On April 23, 2021, the Mexican government published a decree pursuant to which several amendments were made to the Federal Labor Law, Income Tax Law, VAT Law, among others, in order to prohibit outsourcing of personnel, limit subcontracting and amending profit-sharing rules. The amendments became effective April 24, 2021, except for certain legal provisions that became effective August 1, 2021. Among the most important amendments made were: (i) prohibition of outsourcing of personnel, however the provision of specialized services or the execution of specialized works (through external providers or companies within the same business group) is still allowed, only to the extent the services provided are not part of the corporate purpose or the primary economic activity of the company receiving the services; (iii) joint and several liability of companies hiring specialized services with a contractor who fails to comply with its labor obligations; (iv) companies that provide specialized services will require to be registered with the Ministry of Labor and Social Welfare (STPS); (v) increase in fines for violation of the rules; and (vi) payments related to subcontracting of personnel will not receive income tax deduction or VAT accreditation. In order to comply with the new regulations, the Company transferred certain employees to its airport subsidiaries, terminated certain subcontracting services contracts and ensured that its remaining subcontracted service providers complied with the new regulation. None of these regulatory amendments nor the actions the Company took in response thereto had any material impact in the Company’s results of operations or its financial condition, and we do not expect any material impacts in the future. On March 10, 2021, a decree amending certain terms of the Electric Industry Law (“EIL”) became effective. The amendments aim to strengthen the state-owned utility Comisión Federal de Electricidad (“CFE”). The amendment includes, among others, (a) modifications to the order of priority of dispatch to the national electric grid; (b) modifications to the granting of permits referred in the EIL, which will now be subject to the planning criteria issued by the Ministry of Energy; and (c) powers granted to the Energy Regulatory Commission (“CRE”, for its acronym in Spanish) to revoke vesting self-supply contracts. The EIL amendments have been subject of numerous amparo lawsuits before federal courts in Mexico, in which judges have granted general injunctions, suspending the effects of the EIL amendments, for the benefit of anyone affected by the amendments, until a ruling on the merits of the amparo lawsuits is issued by the competent courts. Furthermore, the EIL’s constitutionality was judicially challenged by the Mexican Federal Antitrust Commission (Comisión Federal de Competencia Económica) and local governments, and through an unconstitutionality proceeding (acción de insconstitucionalidad) filed by two-thirds of the Mexican Senate. However, the Mexican Supreme Court dismissed the action of unconstitutionality and the constitutional challenges for lack of sufficient votes to proceed with these actions. As of the date of this report, the Mexican Supreme Court has not issued any binding precedent on the matter, so the federal courts reviewing the amparos filed against the EIL could rule differently than the Mexican Supreme Court. On September 30, 2021, the Mexican federal executive branch presented a bill before the House of Representatives (Camara de Diputados) to amend Articles 25, 27 and 28 of the Mexican Constitution, which bill proposed changes to the legal framework that governs CFE and the Mexican power industry generally. The bill was vetoed by the House of Representatives as of April 17, 2022 and will not go into effect. In addition, in 2017 we entered into a self supply agreement (“SSA”) under the self-supply (“autoabasto”) legal figure, with a wind electricity generator, which expires in 2028. In 2022, approximately 77% of the total electricity consumption of the Company was supplied under this agreement. As of the date of this report, we cannot predict how these amendments to the EIL and the proposed bill to amend the Constitution will affect the SSA if they ever become effective. Separately, upon the enactment of the Mexican Federal Antitrust law Law (Ley Federal de Competencia Económica) on May 23, 2014, the law granted broad powers to the Mexican Federal Economic Competition Commission (Comisión Federal de Competencia Económica) (“COFECE”), including the abilities to investigate and regulate essential facilities, investigate companies, eliminate barriers to competition in order to promote access to the market and order the divestment of assets. The law also set forth important changes in connection with mergers and anti-competitive behavior, increases liabilities that may be incurred for violations of the law, increases the amount of fines that may be imposed for violations of the law and limits the availability of legal defenses against the application of the law, since COFECE’s decisions may only be challenged through indirect appeal (amparo indirecto). Additionally, on December 15, 2022, the Mexican government submitted to Mexico’s congress an aviation sector amendment bill. If approved, the bill would result in amendments to the Civil Aviation Law and the Airports Law, 24 including, among others, (i) changing the administrative nature of AFAC from a regulatory agency to a decentralized administrative entity (órgano administrativo desconcentrado) of the Ministry of Infrastructure, Communications and Transportation ; (ii) allowing foreign airlines to operate domestic flights (cabotage) within certain routes that are of strategic interest for the development of the country’s airport infrastructure, as long as the airport complies with certain technical and operational capacity requirements; (iii) enhancing regulatory and supervisory responsibilities of the AFAC over civil aviation matters (which was previously assigned to the Secretary of Infrastructure, Communications and Transportation), including in the issuance of technical and administrative regulations applicable to the Master Development Programs; (iv) coordinating security regulations for purposes of restoring Mexico’s FAA safety rating to Category 1; and (v) establishing the applicable sanctions for concessionaries not complying with flight schedules and timetables or any other requirements set forth in the bill. On April 12, 2023, the Mexican President amended the bill to remove all reforms related to cabotage. The Mexican Chamber of Deputies approved the bill to amend the Civil Aviation Law on April 19, 2023, which is yet to be discussed in the Mexican Senate. As of the date of this report, we cannot assure you how such bill, if passed, would affect our operations and competitiveness in the Mexican market. On March 28, 2023, the Mexican President presented to Congress an initiative to reform various federal laws. The bill provides, among others, additional grounds for the Mexican government to revoke concessions and permits. It also provides a mechanism to speed up private property expropriation by the state. As of the date of this report, we cannot assure you how such bills, if passed, would affect our operations and competitiveness in the Mexican market. Risks Related to Mexico The Company’s business is significantly dependent upon the volume of air passenger traffic in Mexico, and negative economic developments in Mexico could adversely affect its business and results of operations. In In the past, Mexico has experienced economic crises, caused by internal and external factors, characterized by exchange-rate instability (including large devaluations), high inflation, high domestic interest rates, economic
contraction, a reduction of international capital flows, a reduction of liquidity in the banking sector and high unemployment rates. The Mexican economy underwent an economic crisis that began in 2008 and continued in 2009 as a result of the impact of the global financial crisis, which affected many emerging economies. The Mexican economy’s link with the U.S. economy remains very important, and therefore, any downside to the economic outlook of the U.S. may hinder any recovery in Mexico. This correlation may have an impact on Mexico’s GDP growth and other macro-economic conditions. The Mexican economy achieved real GDP growth rates of During If inflation or interest rates increase significantly or if the Mexican economy is otherwise further adversely impacted, the Company’s business, financial condition, prospects and results of operations could be materially and adversely affected because, among other things, demand for transportation services may decrease. Similar events may 25 occur, and the recurrence of such events may adversely affect the Company’s business, results of operations, prospects and financial condition. Political conditions in Mexico, could materially and adversely affect the Mexican economy and political climate and, in turn, the operations of the Company. Last presidential and federal congressional elections in Mexico were held on July 1, 2018. President López Obrador’s term will expire on September 30, 2024. Historically, the Mexican president has strongly influenced new policies and governmental actions that impact the Mexican economy. We cannot assure you that the current administration or any other future administration will maintain business-friendly and open-market economic policies and policies that stimulate economic growth and social stability. Any administration could implement substantial changes in law, policy and regulations in Mexico, which could adversely affect our business, financial condition, results of operations and prospects. In addition, any actions taken by the administration may lead to riots, protests and looting that could adversely affect our operations. Our financial condition and results of operation may be adversely affected by changes in Mexico’s political climate, to the extent that such changes affect the nation’s economic policies, growth, stability, outlook or regulatory environment. In addition, following the congressional elections on July 1, 2018, the Morena political party obtained an absolute majority in the Mexican Chamber of Deputies and, together with its allied political parties Furthermore, our business may be adversely affected by fluctuations in the value of the U.S. dollar as compared to the Mexican peso, inflation, interest rates, changes in laws and other political or social developments in Mexico over which we have no control. Any of the above may have an adverse effect on Mexico’s economic situation and, in turn, on our business, results of operations, financial condition and ability to repay our indebtedness.
Adverse domestic events could negatively impact the Company’s business and results of operations. The operations of our airports may be disrupted due to the actions of third parties, such as protestors or demonstrators, which are beyond our control. Any disruption in our operations, or adverse consequence resulting from protests or riots, including flight delays, a work stoppage or other similar event, may have a material adverse effect on the operation of our airports and on our results of operations. Demonstrations and riots taking place in cities where our airports are located and where they are either a potential target or in the path of such demonstrations could generate flight cancellations and the suspension of our operations and could materially and adversely affect our business, results of operations, prospects and financial condition.See “Risk Factors – High incidences of crime in Mexico, including extortion and drug trafficking, could adversely affect the Company’s business.” Adverse economic conditions in Mexico may adversely affect our financial condition or results of operations. All of our operations conducted in Mexico are dependent upon the performance of the Mexican economy. As a result, our business, financial condition and results of operations may be affected by the general condition of the Mexican economy, over which we have no control. In the past, Mexico has experienced economic crises, caused by internal and external factors, characterized by exchange rate instability (including large devaluations), high inflation, high domestic interest rates, economic contraction, a reduction of international capital flows, a reduction of liquidity in 26 the banking sector and high unemployment rates. We can provide no assurance that such conditions will not return or that such conditions will not have a material adverse effect on our business, financial condition, or results of operations. According to the Mexican National Institute for Statistics and Geography (Instituto Nacional de Estadística y Geografía), or “INEGI,” GDP decreased 8.5% in 2020, increased 5.0% in 2021 and increased 3.1% in 2022, respectively, in each case compared with the previous year. The annualized interest rates for 28-day Mexican Treasury Bills (CETES) averaged approximately 5.2%, 4.5% and 7.7% in 2020, 2021 and 2022, respectively. As of April 21, 2023, the 28-day Interbank Equilibrium Interest Rate (Tasa de Interés Interbancaria de Equilibrio), or “TIIE-28,” was 11.52%. To the extent that we incur peso-denominated debt in the future, it could be at high interest rates. If inflation or interest rates increase significantly or if the Mexican economy is otherwise adversely impacted, our business, financial condition or results of operations could be materially and adversely affected. Economic conditions in Mexico may also be affected by political developments in the United States and economic developments in the United States, such as interest rates, inflation, exchange rates and GDP growth, among others. Depreciation of the peso relative to the U.S. dollar could adversely affect the results of operations and financial condition of the Company. From December 31, 21, 2023. Rising inflation in the U.S., the extent of which is still uncertain, could have an impact on the value of the peso relative to the U.S. dollar. During 2022, inflation in the U.S. amounted to 8.0%, according to the Consumer Price Index Data provided by the U.S. Department of Labor. A depreciation of the peso affects the Company’s business in the following ways: (i) international passengers and international flights pay tariffs reported in U.S. dollars; while these tariffs are generally collected in Mexican pesos up to 60 days following the date of each flight, any depreciation of the Mexican peso has a positive impact on the Company’s results from operations, which are reported in Mexican pesos; (ii) the Company has cash balances denominated in U.S. dollars; a depreciation in the Mexican peso would result in higher cash balances when converted to Mexican pesos, thus causing foreign exchange gains; and (iii) the Company has financial liabilities denominated in U.S. dollars; a depreciation in the Mexican peso results in higher debt balances when converted to Mexican pesos, thus causing foreign exchange losses. As of December 31, Moreover, the depreciation of the peso also affects some of the Company’s airline customers transacting in U.S. dollars, including the purchases or leases of equipment, maintenance and fuel. Severe devaluation or depreciation of the peso may also result in the disruption of the international foreign exchange markets and may limit the Company’s ability to transfer or to convert pesos into U.S. dollars and other currencies. High incidences of crime in Mexico, including extortion and drug trafficking, could adversely affect the Mexican economy and may have a negative effect on the Company’s business. Higher incidences of crime throughout Mexico, including extortion and drug trafficking, could have an adverse effect on our business, results of operations, prospects and financial condition, as it may decrease the international and domestic passenger traffic directed to or within Mexico. The travel warning issued by the U.S. Department of State (Bureau of Consular Affairs) on 27 the country and between Mexico and other countries, including the United States, which could particularly affect the airports in the north of Mexico where we have significant operations andincrease our insurance and security costs. We cannot assure you to what extent these violent crimes in Mexico will increase or decrease, whether they will expand throughout the country and that they will not have further adverse effects on the country’s economy and on our business, results of operations or financial condition. In January 2019, the Mexican government implemented measures to reduce the theft of fuel transported in pipelines operated by Mexican state-owned entity Petróleos Mexicanos (PEMEX) throughout Mexico. As a result of these measures, certain states in Mexico, such as Mexico State, Hidalgo, Querétaro, Guanajuato, Jalisco, Tamaulipas and Nuevo León, were affected by a shortage of gasoline for automobile use. Even though there were no shortages of
aircraft fuel as a result of the actions implemented by the Mexican government, we cannot assure that future actions taken by the Mexican government against theft of fuel will not affect the availability of aircraft fuel in states where our airports are located, which, in turn, could have an adverse effect on our operations. On January 5, 2023, a major drug cartel leader was arrested in Culiacan. The arrest caused a violent outbreak in the state of Sinaloa, leading to, among others, confrontations with the military forces, blockage of city point entries, and armed clashes occurring in the vicinity of the Culiacan airport. At least one commercial carrier plane on the ground was hit by a stray bullet, without major consequences. At the request of the local civil aviation authority, the Culiacán and Mazatlán airports suspended operations from 10:30 a.m. until 3:00 p.m, and 10:00 p.m, respectively. Operations at both airports started to gradually resume on January 6, 2023. A total of 163 air traffic movements were cancelled at the Culiacán and Mazatlán airports as a result of these events. Even though these events did not result in any injury for passengers or airport employees nor did they significantly impact our operations, we cannot assure that future conflicts or violent outbreaks related to the Sinaloa drug cartel will nothave an adverse effect on our operations. The value and prices of securities issued by Mexican companies, including us, may be adversely affected by developments in other countries. The market value of securities of Mexican companies, including us, may be, to varying degrees, affected by economic and market conditions in other countries. Although economic conditions in these countries 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 of securities of Mexican issuers. In past years, prices of both Mexican debt and equity securities have been adversely affected by the sharp drop in Asian securities markets and the economic crises in Argentina, Brazil, Greece, Italy, Portugal, Russia, Spain, Venezuela and the United Arab Emirates. In addition, economic conditions in Mexico have become increasingly correlated to economic conditions in the United States. Therefore, an economic downturn in the United States will significantly adversely impact the Mexican economy. Furthermore, Delays in the process of obtaining necessary governmental approvals could affect the ability to expand the airports of the Company. The expansion, development and growth of the Company’s airports from time to time may require governmental approvals, administrative proceedings or some other governmental action. Any delay or inability to obtain such approvals or favorable outcomes of such proceedings could have a negative impact on the expansion, development and growth of the Company’s airports. 28 Mexico’s environmental legislation could limit the growth of some of our airports. The level of environmental regulation in Mexico is increasing and the enforcement of environmental laws has become more common. For instance, Mexico launched a carbon dioxide (“CO2”) market in 2018. According to the Mexican Ministry of the Environment and Natural Resources (Secretaría de Medio Ambiente y Recursos Naturales) norm The Mexican National Water Commission (Comisión Nacional del Agua) has the authority to restrict water use in some of our airports due to water shortage in northern Mexico and has enhanced its mechanisms to verify compliance with the fiscal, administrative and technical requirements regarding the extraction and discharge of water. Concessionaires who fail to comply with any of these requirements may be subject to administrative procedures that may result in the cancellation of water extraction rights and /or the imposition of significant fines. Furthermore,
into compliance, and if we fail to comply with current or future environmental regulations, we may be subject to fines and other sanctions. On August 11, 2014, the Mexican National Agency of Industrial Safety and Protection of the Environment of the Hydrocarbons Sector (Agencia Nacional de Seguridad Industrial y de Protección al Medio Ambiente del Sector Hidrocarburos, or “ASEA”) was created. While initially taking a secondary role to the role of the Mexican Ministry of the Environment and Natural Resources, ASEA has started to enforce its legal powers. Our airport growth projects related to fuel supply must now be approved by ASEA, which may result in more burdensome proceedings for the approval of special projects related to hydrocarbons. As of the date of this report, there can be no assurance whether ASEA’s rules and regulations will materially affect our business or results of operations. Minority shareholders may be less able to enforce their rights against the Company, its directors or controlling shareholders in Mexico. Under Mexican law, the protections afforded to minority shareholders are different from those afforded to minority shareholders in the United States. For example, there are no precedent cases in which Mexican courts found that the directors violated their fiduciary duties. As a result, it may be difficult for minority shareholders to bring an action against directors for breach of these duties and achieve the same results as in most jurisdictions in the United States. Procedures for class-action lawsuits were incorporated into Mexican law and became effective in March 2012. However, these rules and procedures are different and more limited than those in place in the United States. Therefore, it may be more difficult for minority shareholders to enforce their rights against the Company, its directors or its controlling shareholders. 29 Enforcing civil liabilities against us or our directors, officers and controlling persons may be difficult. We are organized under the laws of Mexico, and almost all of our directors, officers and controlling persons reside in Mexico. In addition, a substantial portion of our assets and the assets of our directors, officers and controlling persons are located in Mexico. As a result, it may be difficult for investors to effect service of process on such persons within the United States or elsewhere outside of Mexico or to enforce judgments against us or our directors, officers and controlling persons, including in any action based on civil liabilities under U.S. federal securities laws. There is doubt as to the enforceability in Mexico, whether in original actions or in actions to enforce judgments of U.S. courts or other courts outside of Mexico, of liabilities based solely on U.S. federal securities laws. Mexican law and the bylaws of the Company restrict the ability of non-Mexican shareholders to invoke the protection of their governments with respect to their rights as shareholders. As required by Mexican law, the Company’s bylaws provide that The Company is subject to different corporate disclosure standards than U.S. companies. A principal objective of the securities laws of the United States is to promote full and fair disclosure of all material corporate information. However, there may be less publicly available information about foreign issuers of securities listed in the United States than is regularly published by or about U.S. issuers of listed securities.
Risks Related to Our Shareholders
As of the date of this report, As long as SETA retains at least 7.65% of our capital stock in the form of Series BB, all of its special rights, including its right to nominate, appoint and remove certain directors and officers as holder of Series BB shares, will remain in place. The rights and obligations of SETA in our management are explained in “Item 7. Major Shareholders and Related Party Transactions—Major Shareholders.” The termination of the Technical Assistance Agreement would also trigger the conversion of SETA’s remaining Series BB shares into Series B shares, resulting in the termination of all of SETA’s special rights. As long as the Technical Assistance Agreement remains in effect and SETA continues to hold at least 7.65% of our capital stock in the form of Series BB shares, it also has the right to appoint and nominate the same number of directors and officers that it is currently entitled to appoint under our bylaws. For further information on the Technical Assistance Agreement and its terms, see “Item 7. Major Shareholders and Related Party Transactions—Related Party Transactions—Arrangements Relating to SETA.” 30 SETA’s On September 14, 2020, Empresas ICA, S.A.B. de C.V. and Controladora de Operaciones de Infraestructura, S.A. de C.V. (“CONOISA”) filed Amendment No. 9 amending the Schedule 13D filed with the SEC, informing that prior to June 12, 2020, SETA was a wholly-owned subsidiary of ICA Tenedora,. S.A. de C.V. (“ICATEN”). On June 10, 2020, each of Bagual S.à r.l., Grenadier S.à r.l., Pequod S.à r.l., Harpoon S.à r.l. and Expanse S.à r.l. entered into a Stock Purchase Agreement with ICATEN and in the case of Bagual, a Stock Purchase Agreement with each of ICATEN and ICA Infraestructura, S.A. de. C.V. (a subsidiary of ICATEN), to purchase collectively 100% of the capital stock of SETA. The transactions closed on June 12, 2020 and the aggregate purchase price for the SETA shares was Ps. 5.47 per share for 862,703,377 shares. On May 24, 2021, Aerodrome, SETA, Bagual S.à r.l., Grenadier S.à r.l., Pequod S.à r.l., Harpoon S.à r.l. and Expanse S.à r.l., Fintech, and David Martínez purchased 923,703 ADSs, representing 7,389,624 Series B Shares, and 52,765,577 Series B Shares of the Company through a cash tender offer in the U.S and an offer by Aerodrome in Mexico directed to holders of Series B Shares. The transaction closed on July 9, 2021 and the aggregate purchase price for the Company’s shares was Ps.137 per Series B Share and Ps.1,096 per ADS, for a total of approximately Ps.8,241 million (the “Tender Offer”). On December 7, 2022, CONCESSOC completed the purchase of all the equity interests in SETA and Aerodrome pursuant to a Share Purchase Agreement (“SPA”) dated July 31, 2022, by and among, inter alia, CONCESSOC as purchaser and Fintech Holdings Inc., Bagual S.à r.l., Grenadier S.à r.l., Pequod S.à r.l., Harpoon S.à r.l. and Expanse S.à r.l., as sellers, (collectively, the “Sellers”), in which CONCESSOC agreed to purchase 100% of the equity interests held by the Sellers in SETA and Aerodrome, respectively for US$1,170,000,000. As of such date, SETA and Aerodrome collectively own 66,046,210 of OMA’s Series B Shares (including Aerodrome’s Series B Shares represented by ADSs) and SETA owns 49,766,000 of OMA’s Series BB shares. The interests of SETA, Risks Related to Our ADSs You may not be entitled to participate in future preemptive rights offerings. Under Mexican law, if we issue new shares for cash as part of a capital increase, we generally must grant our shareholders the right to purchase a sufficient number of shares to maintain their existing ownership percentage in the Company. Rights to purchase shares in these circumstances are known as preemptive rights. We may not legally be permitted to allow holders of ADSs in the United States to exercise any preemptive rights in any future capital increase,
unless we file a registration statement with the SEC with respect to that future issuance of shares or the offering qualifies for an exemption from the registration requirements of the Securities Act of 1933, as amended. At the time of any future capital increase, we will evaluate the costs and potential liabilities associated with filing a registration statement with the SEC and any other factors that we consider important to determine whether we will file such a registration statement. 31 We may not file a registration statement with the SEC in the future to allow holders of ADSs or shares in the United States to participate in a preemptive rights offering. In addition, under current Mexican law, sales by the depository of preemptive rights and distribution of the proceeds from such sales to you, the ADS holders, is not possible. As a result, your equity interest in the Company may be diluted proportionately. Holders of ADSs are not entitled to attend shareholders’ meetings, and they may only vote through the depositary. Under Mexican law, a shareholder is required to deposit its shares with the Secretary of the Company, S.D. Indeval Institución para el Depósito de Valores, S.A. de C.V. (“Indeval”), a Mexican or foreign credit institution or a brokerage house in order to attend a shareholders’ meeting. A holder of ADSs will not be able to meet this requirement, and accordingly is not entitled to attend shareholders’ meetings. A holder of ADSs is entitled to instruct the depositary as to how to vote the shares represented by ADSs, in accordance with the procedures provided for in the deposit agreement, but a holder of ADSs will not be able to vote its shares directly at a shareholders’ meeting or to appoint a proxy to do so. This Form 20-F contains forward-looking statements. We may from time to time make forward-looking statements in our annual and periodic reports to the SEC on Forms 20-F and 6-K, in our annual report to shareholders, in offering circulars and prospectuses, in press releases and other written materials and in oral statements made by our officers, directors or employees to analysts, institutional investors, representatives of the media and others. Examples of such forward-looking statements include but are not limited to:
Words such as “believe,” “anticipate,” “plan,” “expect,” “intend,” “target,” “estimate,” “project,” “predict,” “forecast,” “guideline,” “should” and similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements. Forward-looking statements involve inherent risks and uncertainties. We caution you that a number of important factors could cause actual results to differ materially from the projections, plans, objectives, expectations, estimates and intentions expressed in such forward-looking statements. These factors, some of which are discussed above under “Risk Factors,” include material changes in the performance or terms of our concessions, developments in legal proceedings, economic and political conditions and government policies in Mexico or elsewhere, inflation rates, exchange rates, regulatory developments, customer demand and competition. We caution you that the foregoing list of factors is not exclusive and that other risks and uncertainties, including the duration and severity of the COVID-19 outbreak and its impacts on our business; may cause actual results to differ materially from those in forward-looking statements.
Forward-looking statements speak only as of the date they are made, and we do not undertake any obligation to update them in light of new information or future developments. 32 Item 4. Information on the Company
HISTORY AND DEVELOPMENT OF THE COMPANY Grupo Aeroportuario del Centro Norte, S.A.B. de C.V., which we refer to by the acronym “GACN”, is a corporation (sociedad anónima bursátil de capital variable) organized under the laws of Mexico. We were incorporated in 1998 as part of the Mexican government’s program for the opening of Mexico’s airports to private investment. The duration of our corporate existence is indefinite. We are a holding company and conduct substantially all of our operations through our subsidiaries. The terms “GACN”, “the Company”, “we”, “us” and “our” in this annual report refer to Grupo Aeroportuario del Centro Norte, S.A.B. de C.V., together with its subsidiaries, and to properties and assets that we own or operate, unless otherwise specified. Our registered office is located at Plaza Metrópoli Patriotismo, Piso 5, Av. Patriotismo 201, Col. San Pedro de los Pinos, Benito Juárez, Ciudad de México, México 03800, telephone +52.81.8625.4300. Our U.S. agent is Puglisi & Associates. Our U.S. agent’s address is 850 Library Avenue, Suite 204, Newark, Delaware 19711. The SEC maintains a World Wide Web site on the Internet at http://www.sec.gov that contains reports and information statements and other information regarding us. The reports and information statements and other information about us can also be downloaded from the SEC’s website or our website at http://www.oma.aero. Investment by SETA and Its Affiliates In 2000, as part of the first stage of our privatization, the Mexican government sold Series BB shares to SETA in a public bidding process. Pursuant to this transaction, SETA paid the Mexican government a total of Ps.864,055,578 (amount in nominal pesos, excluding interest) (U.S.$76.0 million based on the exchange rate in effect on the date of SETA’s bid) in exchange for:
Currently, Series BB shares represent SETA’s current shareholders
Under the Technical Assistance Agreement, SETA provides management and consulting services and transfers industry expertise and technology to us in exchange for a fee, which in 33 Initial Public Offering On November 29, 2006,a Mexican trust established by Nacional Financiera, S.N.C., or NAFIN (a Mexican national credit institution and development bank owned and controlled by the Mexican Government), acting pursuant to the instructions of the former Ministry of Communications and Transportation (as of October 10, 2021, the “Ministry of Infrastructure, Communications and Transportation”), sold 48.02% of our outstanding capital stock through a global public offering of shares in the form of ADSs and Series B shares, concurrently in the United States and Mexico. The net proceeds from the sale of the shares totaled approximately U.S.$432.2 million and were paid to the Mexican government. Master Development Programs and Capital Expenditures Master Development Program Every five years, we are required to submit to the Ministry of Infrastructure, Communications and Transportation for approval a Master Development Program for each of our concessions describing, among other matters, our traffic forecasts for the following 15 years, and detailed expansion, modernization and major and minor maintenance plans for the following five years. Each Master Development Program is required to be updated and resubmitted for approval to the Ministry of Infrastructure, Communications and Transportation every five years. Upon such approval, the Master Development Program is binding for the following five years and deemed to constitute part of the relevant concession. Any major construction, renovation or expansion of an airport generally may only be made pursuant to a concession holder’s Master Development Program and upon approval by the Ministry of Infrastructure, Communications and Transportation. In November 2020, the Ministry of Infrastructure, Communications and Transportation approved the Master Development Programs for each of our subsidiary concession holders for the 2021 to 2025 period. These five-year Master Development Programs, which were approved by the Ministry of Infrastructure, Communications and Transportation, are in effect from January 1, 2021 until December 31, 2025, and we are required to comply with them on a year-by-year basis. We do not expect the COVID-19 pandemic to affect our committed investments under the current Master Development Programs.
The following table sets forth our committed investments, including major maintenance expenditures, under our Master Development Programs by airport for 2021 through 2025. Figures are updated based on the Producer Price Index for the construction industry: Committed Investments Under Master Development Programs by
The following table sets forth our committed investments, including major maintenance expenditures, under our Master Development Programs by category for 2021 through 2025: Committed Investments Under Master Development Programs by Category for 2021 through 2025 (1)
Expenditures Under the Master Development Programs and Other Strategic Capital Expenditures Expenditures incurred to comply with our obligations under the Master Development Programs include expenditures associated with improvements to our concession assets, major maintenance costs and other items recorded as operating costs as incurred. Major maintenance expenditures are not subject to capitalization and reduce our major maintenance provision. See “Item 5. Operating and Financial Review and Prospects—Critical Accounting Policies—Major Maintenance Provision.” Thus, not all expenditures incurred to comply with our obligations under the Master Development Programs will constitute capital expenditures. In addition to investments in our Master Development Programs, we have also invested in commercial, real estate and other business opportunities, including our investment in hotels in Terminal 2 of the Mexico City International Airport and in the Monterrey airport, as well as our industrial park in the Monterrey airport. The following table sets forth our actual capital expenditures, including capital expenditures made pursuant to our Master Development Programs and other strategic capital expenditures by airport for Actual Capital Expenditures by Airport for
The following table sets forth our actual capital expenditures by category across all of our airports for Actual Capital Expenditures by Category for
In Our actual capital expenditures from
37
Our Operations Through our subsidiaries, we hold concessions to operate, maintain and develop 13 airports in Mexico, which are concentrated in the country’s central and northern regions. Each of our concessions has a term of 50 years beginning on November 1, 1998. The term of each of our concessions may be extended by the Ministry of Infrastructure, Communications and Transportation under certain circumstances for up to 50 additional years. The terms of our concessions also include the right to occupy, use and improve the land appurtenant to our airports, which we do not own and which will revert to the Mexican government upon the termination of our concession. As operator of the 13 airports under our concessions, we charge fees to airlines, passengers and other users for the use of the airports’ facilities. We also derive rental and other income from commercial and diversification activities conducted at our airports, such as the leasing of space to restaurants and retailers, the operation of parking facilities, the operation of the OMA Carga business, the Terminal 2 NH Collection Hotel and the Hilton Garden Inn Hotel at the Monterrey airport, among others. We operate 13 airports, which serve a major metropolitan area (Monterrey), three tourist destinations (Acapulco, Mazatlán and Zihuatanejo), seven regional centers (Chihuahua, Culiacán, Durango, San Luis Potosí, Tampico, Torreón and Zacatecas) and two border cities (Ciudad Juárez and Reynosa). Our airports are located in nine of the 32 Mexican states, covering a territory of approximately 926,421 square kilometers (575,667 square miles), with a 38 population of approximately 29.0 million according to the Mexican National Institute of Statistics and Geography. All of our airports are designated as international airports under Mexican law, meaning that they are all equipped to receive international flights and to maintain customs and immigration services managed by the Mexican government, as well as refueling services. According to figures published by the AFAC, our total aviation passenger traffic accounted for approximately In Our airports serve several major international routes, including Monterrey-Dallas, Monterrey-Houston, Our international traffic in
Monterrey and its metropolitan area is the third largest city in Mexico based on population, with a population of approximately 5.0 million. Monterrey ranks among Mexico’s most established urban and commercial centers and is the capital of the state of Nuevo León, Mexico’s seventh largest state based on population. It is home to many of Mexico’s largest companies in a wide variety of industries, as well as several major universities. Business travelers account for a substantial portion of passengers at the Monterrey airport. The Monterrey airport is our leading airport based on passenger traffic volume, air traffic movements and contribution to revenues and ranked as the fifth busiest airport in Mexico based on passenger traffic volume in Three of our airports, Acapulco, Mazatlán and Zihuatanejo, serve popular Mexican tourist destinations. Acapulco is Mexico’s Seven of our airports serve small and mid-sized cities that are important regional centers of economic activity, with diverse economic activities such as mining (the Durango and Zacatecas airports), maquiladora manufacturing (the Chihuahua and Torreón airports), petroleum and chemical production (the Tampico airport), agriculture and livestock (the Culiacán airport) and transportation and logistics (the San Luis Potosí airport). In 39 The remaining two airports in the group, the Ciudad Juárez and Reynosa airports, serve cities situated along the border of Mexico and the United States. Both Ciudad Juárez and Reynosa are popular entry points to the United States. In Additionally, we operate four bonded warehouses under the OMA Carga brand that provide cargo logistics services, which include storage, handling, custody maneuvers, loading and unloading, and x-ray screening of exports, among other services. Two bonded warehouses operate at the Monterrey airport, one operates at the Ciudad Juárez airport and the other at the Chihuahua airport. We also have a 90% investment with a Mexican subsidiary of the international hotel operator NH Hoteles SA under Consorcio Grupo Hotelero T2, S.A. de C.V. to develop and operate a 287-room hotel and more than 5,000 square meters (53,820 square feet) of commercial space inside Terminal 2 of Mexico City International Airport under a lease agreement (the “Lease”) with Mexico City International Airport that expires in 2029. The Terminal 2 NH Collection Hotel opened in August 2009. Under certain circumstances, the Mexico City International Airport can terminate the Lease at any time with partial or no compensation to us.
In November 2012, as part of our diversification activities, we signed a strategic alliance agreement with VYNMSA Desarrollo Inmobiliario, S.A. de C.V. (“VYNMSA”), to build and operate an industrial park at the Monterrey airport. As part of this strategic alliance, 32.4 hectares (80.06 acres) within the Monterrey airport’s perimeter are being developed in phases for use as an industrial park. The industrial park was inaugurated on March 20, 2015, and as of December We also have an investment with Grupo Hotelero Santa Fe, We consider OMA Carga, our hotel operations and the operation of our industrial park a key part of our diversification strategy to increase our non-aeronautical revenues. 40 The following table provides summary data for each of our 13 airports for the years ended December 31,
See Note 25 to our consolidated financial statements for further information by segment. The Company’s reportable segments under IFRS include its airports, the Terminal 2 NH Collection Hotel, the Hilton Garden Inn Hotel and the OMA-VYNMSA Industrial Park, individually, and information about our holding company and
Our Sources of Revenues Aeronautical Services Aeronautical services represent the most significant source of our revenues. All of our revenues from aeronautical services are regulated under the maximum-rate price regulation system applicable to our airports. In 41 Our revenues from aeronautical services are derived principally from: passenger charges, landing charges, aircraft parking charges, charges for the use of passenger walkways and charges for the provision of airport security services. Aeronautical services revenues are principally dependent on the following factors: passenger traffic volume, the number of air traffic movements, the weight of the aircraft, the duration of an aircraft’s stay at the airport, the time of day the aircraft operates at the airport and the specific prices charged for the service. Passenger Charges We collect a passenger charge for each departing passenger on an aircraft (other than diplomats, infants and transfer and transit passengers) called the Tarifa de Uso de Aeropuerto. We do not collect passenger charges from arriving passengers. Passenger charges are included in the cost of a passenger’s ticket and we issue invoices for those charges to each airline on a weekly basis and record an account receivable for the invoice corresponding to a flight during the actual month of the flight. The current agreements between our airports and our principal airline customers provide that payments for passenger charges will be between 30 and 60 days after the invoice delivery date. In International passenger charges are currently U.S. Aircraft Landing Charges We collect landing charges from all carriers including cargo carriers for their use of our runways and taxiways, illumination systems on the runways and taxiways and other visual landing assistance services. Our landing charges are different for each of our airports and are based on each landing aircraft’s weight (determined as an average of the aircraft’s weight without fuel and maximum takeoff weight), the time of the landing, the origin of the flight and the nationality of the airline or client. In Aircraft Parking, Boarding and Unloading Charges and Aircraft Long-Term Parking Charges We collect various charges from all carriers including cargo carriers for the use of our facilities by their aircraft and passengers after landing. We collect aircraft parking charges based on the time an aircraft is at an airport’s gate or parking position. Each of these charges varies based on the time of day or night that the relevant service is provided (with higher fees generally charged during peak usage periods and at night), the aircraft’s maximum takeoff weight, the origin and destination of the flight and whether the service is domestic or international. We collect aircraft parking charges the entire time an aircraft is on our aprons.
We collect charges from carriers for the long-term use of facilities at our airports for aircraft 42 Passenger Walkway Charges Airlines are also assessed charges for the connection of their aircraft to our terminals through a passenger walkway and for the transportation of passengers between terminals and aircraft via buses and other vehicles. These charges are generally based on the amount of time each service is used, the number of these services used, the time of day the services are used, the origin and destination of the flight and the nationality of the airline or client. In Airport Security Charges We also assess an airport security charge, which is collected from each airline, based on the number of its departing terminal passengers (excluding infants, diplomats and transit passengers), for use of our The ICAO, the AFAC and the Office of Public Security issue guidelines for airport security in Mexico. In response to the September 11, 2001 terrorist attacks in the United States, we have taken additional steps to increase security at our airports. The ICAO issued directives in October 2001 establishing Several of our airline customers have also contributed to the enhanced security at our airports as they have adopted The ICAO established security guidelines requiring checked baggage on all international commercial flights as of January 2006, and all domestic commercial flights as of July 2006, to undergo a comprehensive screening process for the detection of explosives. Our subsidiary, Servicios Complementarios del Centro Norte, S.A. de C.V., has operated the checked-baggage screening system since March 1, 2012. In some countries, such as the United States, the federal government (in the case of the United States, through TSA) is responsible for screening checked baggage. Under Mexican law, however, airlines are responsible for screening checked baggage. On May 1, 2014 and July 1, 2016, the AFAC published mandatory circulars CO SA-17.2/10 R3 and CO SA-17.9/16, respectively, which require that all airlines screen checked baggage and that all airports have screening equipment that complies with specified guidelines. Although Mexican law holds airlines liable for screening checked baggage, the purchase, installation and operation of equipment could increase our exposure to liability as a result of our involvement in the screening process. In addition, although we are not currently obligated to screen checked baggage, we could become obligated to do so, and thus become subject to potential liability, if Mexican law changes in the future. Revenues derived from checked baggage screening are classified as non-aeronautical revenues see “Item 4. Information on the Company—Our Sources of Revenue.”
Complementary Service Providers At each of our airports, we earn revenues from charging access and other fees from third-party providers, ramp-handling and 43 Under the Mexican Airport Law, we are required to provide complementary services at each of our airports if there is no third party providing such services. If any service providers were to halt operations at any of our airports, we could be required to seek a new provider of these services or to provide these services ourselves. On November 1, 1998, the Company entered into an agreement with the Mexican Airport and Auxiliary Services Agency (Aeropuertos y Servicios Auxiliares or “ASA”), pursuant to which the Company granted the agency access to the facilities at the Company’s airports for a nominal fee in order for ASA to buy, sell and supply fuel in such facilities. On July 21, 2018, the Mexican Bureau of Civil Aviation (currently AFAC) published a notice in the Federal Official Gazette clarifying the scope of Transitory Article Nine of the Regulations of the Mexican Airport Law, stating that as of the publication of the Hydrocarbons Law on August 11, 2014, the fuel market was to be considered open so that any interested party can distribute and sell Jet-A fuel. This clarification opens the possibility for third parties complying with the applicable legal requirements to provide fuel distribution and supply services within the airports operated by the Company. As of the date of this report, there are no third parties, other than ASA, providing fuel distribution and supply services within such airports.
Leasing of Space to Airlines We derive aeronautical revenues from leasing space in our airports to airlines that is necessary for their operations, such as ticket counters and offices. Our lease agreements with airline customers for the use of space in our airports are typically for terms of three years with provisions for periodic inflation adjustments to our rental fees. Cargo Handling
Revenues from cargo handling in our airports historically have represented a negligible portion of our total revenues. Permanent Ground Transportation We receive revenues from ground transportation vehicles and taxi companies who pay an access fee to operate on our airport premises. Our revenues from providers of ground transport services deemed “permanent” under applicable Mexican law, such as access fees charged to taxis, are subject to price regulation. Non-Aeronautical Services General
None of our revenues from non-aeronautical services are regulated under our 44 As one of the main parts of our business strategy, we have prioritized increasing our Revenues from Commercial Activities As another main part of our business strategy to enhance our
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Commercial activities in each of our airports currently consist of the following:
46 Lounge in the Ciudad Juárez airport. OMA also leases space for the American Express Centurion VIP Lounge and CitiBanamex Beyond Lounge in the Monterrey airport. Revenues from Diversification Activities To enhance our non-aeronautical revenues, we also focus our business strategy on generating new services and products to diversify our revenue sources, such as our OMA Carga business, hotel services and real estate services. We develop land not intended for aeronautical purposes at our airports for industrial, logistical or commercial uses that are directly or indirectly related to airport activities in order to strengthen the airports’ role as focal points of economic development in the cities where they are located.
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Revenues from Complementary Activities Our complementary activities generated
48 Our Airports In The following table sets forth the percentage of terminal passenger traffic generated at our airports per type of destination during
The following tables set forth the passenger traffic volume presented in amounts of (i) total passengers, (ii) terminal departing and arriving passengers and (iii) transit passengers, for each of our airports for the periods indicated: Passenger Traffic
The following table sets forth the air traffic movement capacity of each of our airports as of December 31, Capacity(1) by Airport(2)
The following table sets forth the terminal capacity of each of our airports as of December 31, Capacity(1) by Airport(2)
The following table sets forth the air traffic movements for each of our airports for the periods indicated: Air Traffic Movements by Airport(1)
The following table sets forth the average number of passengers per air traffic movement for each of our airports for the periods indicated: Average Passengers per Air Traffic Movements by Airport(1)
Air Traffic Movements by Aviation Category(1)
Metropolitan Destination Monterrey International Airport The Monterrey airport is our most important airport based on passenger traffic (including both domestic and international passengers), air traffic movements and contribution to aeronautical revenues. According to the AFAC, the Monterrey airport was the fifth busiest airport in Mexico in In A total of The Monterrey airport is located approximately 21 kilometers (13 miles) from the city of Monterrey, which has a population (including its suburbs) of approximately 5.0 million inhabitants. Monterrey is Mexico’s third largest city based on population and is one of Mexico’s most productive industrial centers. It is home to many of Mexico’s largest companies in a wide variety of industries, as well as several major universities. Monterrey is the capital of the state of Nuevo León, the third largest contributor to Mexico’s GDP. The Monterrey airport operates 24 hours a day. The airport has two operating runways, one with a length of 3,000 meters (9,842 feet) and the other with a length of 1,800 meters (5,905 feet). The airport’s runway capacity is 38 air traffic movements per hour. The airport also has an instrument landing system on runway 29. The airport occupies a total area of The Terminal A building has a total area of approximately 54 for passengers making connections with other flights and other boarding lounges. Terminal A has 15 boarding gates for international or domestic flights and a public parking facility that accommodates
The Terminal B building started operations on September 1, 2010, and is used by Aeroméxico, Aeroméxico Connect, Delta, and The Terminal C building has a total area of approximately 12,460 square meters (134,118 square feet), of which The Monterrey airport offers air cargo services for imports and exports and serves as a logistical hub for domestic and international air shipping providers. Its current infrastructure servicing air cargo operations includes bonded To allow the future expansion of the Monterrey airport, including its second commercial runway, On July 22, 2016, we sold 200,000 square meters (2,152,782 square feet) of vacant land outside the Monterrey airport, which was not required for future aeronautical use, for Ps.30 million. The Acapulco airport owned 58.82% of the vacant land and the Zihuatanejo airport owned 41.18%.
In November 2019, we started a major expansion project at the Monterrey airport. We expect to invest approximately In the future, we may face competition from Aeropuerto del Norte, an airport near Monterrey operated by a third party pursuant to a concession. Historically, Aeropuerto del Norte has been used solely for general aviation operations. The state of Nuevo León has requested in the past that the Ministry of Infrastructure, Communications and Transportation amend Aeropuerto del Norte’s concession to allow it to serve commercial aviation operations. To date, the Ministry of Infrastructure, Communications and Transportation has not amended Aeropuerto del Norte’s concession. The Ministry of Infrastructure, Communications and Transportation may authorize such an amendment and that commercial aviation flights will operate from Aeropuerto del Norte in the future. In addition, we understand that Aeropuerto del Norte is not capable of accommodating commercial passenger traffic with its current infrastructure. Tourist Destinations Acapulco International Airport The Acapulco airport is our sixth most important airport based on passenger traffic and In A total of The Acapulco airport is located approximately 15 kilometers (9 miles) from the city of Acapulco in the state of Guerrero, which has a population (including its suburbs) of 852,622. Guerrero is Mexico’s The Acapulco airport operates 24 hours a day. The airport has two operating runways and six taxiways. The principal runway has a length of 3,300 meters (10,827 feet), and the auxiliary runway has a length of 1,700 meters (5,577 feet). The apron servicing commercial aviation accommodates 17 airplanes, and the general aviation apron accommodates 24 aircrafts. 56 The runway capacity at the Acapulco airport is 40 air traffic movements per hour. The airport also has two instrument landing systems for landing in low visibility on runways 10 and 28, which provide precise guidance to assist
aircraft during landing. The airport occupies a total area of 422.2 hectares (1.63 square miles) with a total terminal space of 15,436 square meters (166,151 square feet), of which Due to its technical and geographic characteristics, the Acapulco airport is the primary alternate airport of Mexico City. The length of the airport’s runway as well as its elevation and average temperature makes it possible to operate airplanes at their maximum passenger, freight and fuel capacities. In May 2018, we inaugurated a Mazatlán International Airport The Mazatlán airport is our fifth most important airport based on passenger traffic. According to the AFAC, the Mazatlán airport was the 15th busiest airport in Mexico in In A total of 15 airlines operate at the airport (13 commercial airlines and two charter airlines). In The Mazatlán airport is located approximately 18 kilometers (11 miles) from the city of Mazatlán, which has a population of The Mazatlán airport operates 24 hours a day. Its runway capacity is 22 air traffic movements per hour. The airport occupies approximately 439.8 hectares (1.70 square miles) of land. The airport’s facilities include a terminal building with a total area of In 2014, the terminal building was expanded by 2,300 square meters (24,757 square feet) and 2,500 square meters (26,909 square feet) of space were refurbished, including the main
project to redesign and redirect passenger flows at the terminal building of the Mazatlán airport. This project will increase the airport capacity by approximately 1,134 square meters (12,206 square feet), increase the terminal space by 6% and distribute commercial and operational spaces more efficiently by taking advantage of the reconfiguration of passenger flows. The project is expected to start operating during the second half of 2023. Zihuatanejo International Airport The Zihuatanejo airport is our In A total of The Zihuatanejo airport is located approximately 12 kilometers (7 miles) from the city of Zihuatanejo. Situated in the state of Guerrero, with a population of 126,001 people, the city of Zihuatanejo is one of Mexico’s most attractive tourist destinations, with approximately The Zihuatanejo airport operates 14 hours a day. The airport has one runway, which is 2,506 meters (8,222 feet) long with a runway capacity of 20 air traffic movements per hour. The airport’s facilities include a terminal building encompassing an area of The quality of services offered at the Zihuatanejo airport has improved as a result of the rehabilitation of its runway, the remodeling and expansion of the departure gate area and the reconfiguration of the passenger and carry-on luggage screening area, which were completed on July 14, 2016. In order to maintain the current infrastructure of the Zihuatanejo airport, on June 2019, we began construction of a structural reinforcement of its terminal building. Total investment is approximately Regional Destinations Chihuahua International Airport The Chihuahua airport is our In 58 In 2021, 90.5% were domestic and 9.5% were international. In 2022, 92.3% were domestic, and 7.7% were international. Because the airport’s passengers are predominantly domestic, the airport’s passenger traffic and results of operations are affected by Mexican economic conditions.
A total of The Chihuahua airport is located approximately 18 kilometers (11 miles) from the city of Chihuahua, the capital of the state of Chihuahua. The city’s population is The Chihuahua airport operates 14 hours a day. The airport has three runways, with lengths of 2,600 meters (8,530 feet), 2,420 meters (7,940 feet) and 1,100 meters (3,609 feet), respectively. The runway system has a capacity of 40 air traffic movements per hour. The airport also has an instrument landing system on runway
In December 2016, we started an expansion and remodeling of the terminal building at the Chihuahua airport, which was completed on September 17, 2019. The project had a total investment of Ps.318 million and included 5,743 square meters (61,817 square feet) of new areas and the remodeling of 9,510 square meters (102,365 square feet). Culiacán International Airport The Culiacán airport is our second most important airport based on passenger traffic, air traffic movements and contribution to aeronautical revenues. According to the AFAC, the Culiacán airport was the In The airport’s terminal passenger traffic consists predominantly of commercial aviation. In A total of seven commercial airlines operate at the airport. In The Culiacán airport is located approximately 14 kilometers (9 miles) from the city of Culiacán. The population of the whole municipality is 1,155,462. Culiacán is the capital of the state of Sinaloa, an important producer
of beef and agricultural products. The Culiacán airport operates 16 hours a day. The runway has a length of 2,227 meters (7,306 feet) and capacity of 24 air traffic movements per hour. The airport occupies a total area of 280.9 hectares (1.08 square miles). 59 The airport’s facilities include a terminal building expanded in 2012 with a total area of approximately 11,250 square meters (121,094 square feet), including The Culiacán airport also includes military installations. The presence of these installations amid their operational activity may at some point affect the airport’s runway capacity at peak hours, thus affecting its civil aviation operations. In August 2022, we began the expansion and remodeling of the terminal building at the Culiacán airport. The project, which is expected to be completed by the first half of 2025, will have a total investment of approximately Ps.520 million. After the project concludes, the total area will be 26,187 square meters (281,875 square feet), an increase of approximately 116% in the size of the building. Durango International Airport In In A total of The Durango airport is located approximately 16 kilometers (10 miles) from the City of Durango, which has a population of 688,697. The state of Durango is rich in natural resources and is Mexico’s leading producer of gold, silver, lead and zinc. The Durango airport operates 14 hours a day. The airport’s runway is 2,900 meters (9,514 feet) long. The runway has five taxiways and a capacity of 40 air traffic movements per hour. The airport’s total area is 541.4 hectares (2.09 square miles). Its facilities include a 4,846 square-meter (52,162 square-foot) terminal building with In September 2022, we began the expansion and remodeling of the terminal building at the Durango airport. The project, which is expected to be completed by the first half of 2024, will have a total investment of approximately Ps.62 million. After the project concludes total area will be 4,846 square meters (52,161 square feet), an increase of approximately 26% in the size of the terminal. San Luis Potosí International Airport According to the AFAC, the San Luis Potosí airport was the 60 In
airport: Aeroméxico Connect, Volaris, The San Luis Potosí airport operates 24 hours per day and is located approximately 15 kilometers (9 miles) from the city of San Luis Potosí, which is the capital of the state of San Luis Potosí and has a population of 911,908. The airport has two runways with a total capacity of 20 air traffic movements per hour. The principal runway is 3,006 meters (9,862 feet) long, and the secondary runway is 1,000 meters (3,281 feet) long. The airport has a total area of 508.3 hectares (1.96 square miles). The airport’s facilities include a terminal building with approximately 11,042 square meters (118,855 square feet), including In November 2016, we started an expansion and remodeling of the terminal building at the San Luis Potosí airport, which was completed on August 16, 2019. The project had a total investment of Ps.400 million and included an expansion of 8,600 square meters (92,570 square feet), for a total of 13,482 square meters (145,119 square feet). Passenger capacity grew threefold to serve up to 1.2 million passengers per year. Tampico International Airport According to the AFAC, the Tampico airport was the In A total of The Tampico airport serves the industrial zone of Tampico, Ciudad Madero and Altamira, which have a combined population of 773,285. This industrial zone is home to companies in the petroleum and chemical industries. The Tampico airport operates Monday, Wednesday and Friday from 6:30 a.m. to 9:30 p.m. (local time) and from 6:30 a.m. to 9:00 p.m. on Sunday, Tuesday, Thursday and Saturday. The airport has three runways in operation. The principal runway is 2,550 meters (8,366 feet) long, the second runway is 1,221 meters (4,006 feet) in length, and the third runway (used exclusively for Alpha (A) category aircraft and visual flights) is 1,200 meters (3,937 feet) long. The airport has a capacity of 22 air traffic movements per hour and includes an instrument landing system on runway 13, which provides precise guidance to assist aircraft during landing. 61 The airport’s total area is 372.5 hectares (1.44 square miles). Its facilities include a
In Torreón International Airport According to the AFAC, the Torreón airport was the In A total of The Torreón airport is located in the city of Torreón, which is part of the La Laguna region, Mexico’s top The Torreón airport operates 14 hours a day. The airport has two runways. The principal runway measures 2,755 meters (9,038 feet) in length, and the secondary runway measures 1,467 meters (4,813 feet) in length. The airport has a runway capacity of 20 air traffic movements per hour. The airport has an instrument landing system, which provides precise guidance to assist aircraft during landing on runway 31. The airport’s total area is 354.6 hectares (1.37 square miles). Its facilities include a terminal building of 5,492 square meters (59,115 square feet), of which Zacatecas International Airport According to the AFAC, the Zacatecas airport was the In A total of four commercial airlines operate at the airport. In 62 Chicago, Los Angeles, Dallas. In
Located in the center of Mexico, the state of Zacatecas (of which the city of Zacatecas is the capital) is Mexico’s leading silver producer and second leading producer of lead, copper, zinc and gold. The state of Zacatecas has a population of approximately 1.6 million. The airport currently operates 24 hours a day. The airport has one runway, which measures 3,000 meters (9,843 feet) in length. The runway capacity is 20 air traffic movements per hour. The airport’s total area is 207.6 hectares (0.80 square miles). The terminal building is 5,796 square meters (62,388 square feet), of which
Border Destinations Ciudad Juárez International Airport According to the AFAC, the Ciudad Juárez airport was the In A total of The airport is located in the city of Ciudad Juárez, which is near the U.S. border and has a population of 1,512,450. The city is a major center of the maquiladora industry. Because Ciudad Juárez is a popular entry point to the United States many of the airport’s passengers consist of Mexican migrant workers traveling to Ciudad Juárez in order to seek work in the United States. Although the airport’s passengers are predominantly domestic, its passenger traffic and results of operations are affected by economic conditions in both Mexico and the United States. The Ciudad Juárez airport operates 14 hours a day. The airport has two runways. The principal runway measures 2,700 meters (8,858 feet) in length, and the secondary runway measures 1,710 meters (5,610 feet) in length. The airport has a capacity of 20 air traffic movements per hour. The airport’s total area is 367.95 hectares (1.42 square miles). Its facilities include a terminal building of In
Reynosa International Airport According to the AFAC, the Reynosa airport was the In A total of two airlines operate at the airport. In The airport is located in Reynosa, a city with a population of 704,767 inhabitants bordering the United States near the Gulf of Mexico. We believe that Reynosa’s robust industrial economic activity and proximity to the United States create the potential for growth in air cargo services. Because Reynosa is a popular entry point to the United States, many of the airport’s passengers consist of Mexican migrant workers traveling to Reynosa in order to seek work in the United States. Although the airport’s passengers are predominantly domestic, its passenger traffic and results of operations are affected by economic conditions in both Mexico and the United States. The Reynosa airport operates 12 hours a day. The airport has one runway, which is 1,893 meters (6,211 feet) in length and has a runway capacity of 18 air traffic movements per hour. The airport’s total area is approximately 407.4 hectares (1.57 square miles). In February 2021, we inaugurated the new terminal building at the Reynosa airport. The project had a total investment of Principal Aeronautical Services Customers Airline Customers As of December 31,
The following table sets forth the number of air traffic customers per airline for the years ended December 31,
Historically, traditional carriers such as Aeroméxico had represented a substantial majority of the Mexican commercial airline market. In recent years, however, international carriers, discount carriers, low-cost carriers and other new market entrants have represented a growing proportion of the Mexican commercial airline market. In Aeroméxico is a publicly traded company and Delta Airlines currently owns approximately
The following table sets forth our principal air traffic customers for the years ended December 31,
Complementary Services Customers As of December 31, Principal Non-Aeronautical Services Customers As of December 31,
Seasonality Our business is subject to seasonal fluctuations. In general, demand for air travel is typically higher during the summer months and during the winter holiday season, particularly in international markets, because there is more vacation travel during these periods. Our results of operations generally reflect this seasonality but have also been impacted by numerous other factors that are not necessarily seasonal, including economic conditions, war or threat of war, weather, air traffic control delays and general economic conditions, as well as the other factors discussed above. Competition Excluding our airports servicing tourist destinations, our airports currently are the only major airports in the geographic areas that they serve and generally do not face significant competition. However, since the Acapulco, Mazatlán and Zihuatanejo airports are substantially dependent on tourists, these airports face competition from competing tourist destinations. We believe that the main competitors to these airports are those airports serving vacation destinations in Mexico, such as Los Cabos, Cancún and Puerto Vallarta, and abroad, such as in Florida, Puerto Rico, Cuba, Jamaica, the Dominican Republic, other Caribbean islands and Central America. The relative attractiveness of the locations we serve is dependent on many factors, some of which are beyond our control. These factors include the general state of the Mexican economy, and to a significant degree, the U.S. economy and the attractiveness of other commercial and industrial centers in Mexico, which may affect the attractiveness of Monterrey and other growing population centers in our airport group, such as Ciudad Juárez and San Luis Potosí. In addition, with respect to Acapulco, Mazatlán and Zihuatanejo, these factors include promotional activities and pricing policies of hotel and resort operators, weather conditions, natural disasters (such as hurricanes and earthquakes) and the development of new resorts that may be considered more attractive. The locations we serve may not continue to attract the same level of passenger traffic in the future. The Mexican Airport and Auxiliary Services Agency currently operates 12 small airports in Mexico’s northern region, which collectively served In addition, the Mexican government could grant new concessions to operate existing For more information, see Sustainability and Our Corporate Culture Sustainability is one of the core values of our corporate culture. Our integrated management system focuses on occupational health and safety, environmental care, corporate social responsibility and corporate governance. This allows us to respond in a balanced way to the relevant aspects of our stakeholders through different actions and projects in our 13 airports.
Awards and Recognition In 2018, OMA was included in the Dow Jones Sustainability Index (“DJSI”) Emerging Markets for the third consecutive year. In addition, OMA was included in 2019 in the Dow Jones Sustainability Index-MILA, for the second consecutive year. On March 6, 2018, the Mazatlán airport was named the Best Regional Airport of 2017 in Latin America and the Caribbean by Airports Council International (“ACI”). Previous recognition was awarded in 2014. In 2018, the Culiacán, Mazatlán, Reynosa, Tampico, Torreón, Zacatecas and Zihuatanejo airports received the Distinctive “S” (Distintivo “S”) granted by the Ministry of Tourism to companies with good practices in the development of tourism projects and its commitment to global sustainability criteria. In 2019, the Acapulco, Ciudad Juárez, Chihuahua, Durango and San Luis Potosí airports also received such Distinctive “S” (Distintivo “S”). In, 2020, we were included in the Sustainability Index of the Mexican Stock Exchange now called S&P/BMV Total México ESG Index, for the ninth year in a row. In 2022, all of our airports maintained the Health Security Distinction, awarded by the Mexican Institute of Social Security (IMSS) related to implementation of a healthy return to the workplace due to COVID-19 outbreak. In 2020, the Monterrey airport was certified by ACI with the Airport Health Accreditation. This recognition certifies compliance with global health standards including those of ACI and ICAO recommendations, for passengers, authorities and users at the Monterrey airport. In 2022, the Acapulco, Culiacán, Mazatlán, and Reynosa airports maintained a Family Responsibility Company Certificate (Certificado de Empresa Familiarmente Responsable) granted by the Mexican Ministry of Labor and Social Welfare. In 2021, all of our airports received the Safe Travels seal granted by the World Travel and Tourism Council (WTTC) because of the actions and protocols implemented to provide its users of facilities with high standards of sanitation in order to mitigate the risk of infection of COVID-19 in each of its terminal buildings. In 2021, we received an award for being the First Airport Group to Issue a Green Bond in the Mexican Market granted by the Green Finance Advisory Council (Consejo Consultivo de Finanzas Verdes) at the 2020-2021 Green, Social and Sustainability Bonds Awards. In 2022, we were included for the first time in the 2022 Bloomberg Gender-Equality Index (“GEI”). In 2023, we were included for the second year in a row in the 2023 Bloomberg Gender-Equality Index. In 2023, all of our airports received the Level 1 certification of the Airport Carbon Accreditation Program, issued by Airports Council International. In 2023, we received, for the twelfth time, the Socially Responsible Company (Empresa Socialmente Responsable) distinction granted by the Mexican Center for Philantropy (CEMEFI). Ten of our 13 airports have maintained certifications as Safe Companies by the Mexican Ministry of Labor and Social Welfare (Secretaría del Trabajo y Previsión Social) for their achievements in the administration of health and safety in the workplace. The San Luis Potosí airport was the first airport in Mexico to receive such certification in 2011, and in 2015 it was granted the highest recognition by the Ministry of Labor and Social Welfare with a Level III Safe Company Certificate (Certificado de Empresa Segura Nivel III). The Ministry of Labor and Social Welfare granted Level I Safe Company Certificates (Certificado de Empresa Segura Nivel I) to the Reynosa airport, Level II Safe Company Certificates (Certificado de Empresa Segura Nivel II) to the Zacatecas airport, Level III to the Acapulco, Ciudad Juárez, Monterrey and Zihuatanejo airports, and the Revalidation of Level III Safe Company Certificates (Certificado de Empresa Segura Revalidación Nivel III) to the Culiacán, Mazatlán, San Luis Potosí and Torreón airports.
Sources of Regulation The following are the principal laws, regulations and instruments that govern our business and the operation of our airports:
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The Mexican Airport Law and the regulations under the Mexican Airport Law establish the general framework regulating the construction, operation, maintenance and development of Mexican airport facilities. The Mexican Airport
Law’s stated intent is to promote the expansion, development and modernization of Mexico’s airport infrastructure by encouraging investment and competition. Under the Mexican Airport Law, the holder of a concession granted by the Ministry of Infrastructure, Communications and Transportation is required to construct, operate, maintain and develop a public service airport in Mexico. A concession generally must be granted pursuant to a public bidding process, except for: (i) concessions granted to either (a) entities considered part of “the federal public administration” as defined under Mexican law or (b) private companies whose principal shareholders may be a state or municipal government; (ii) concessions granted to operators of private airports (who have operated privately for five or more years) wishing to begin operating their facilities as public service airports; and (iii) complementary concessions granted to existing concession holders. Complementary concessions may be granted only under certain limited circumstances, such as where an existing concession holder can demonstrate, among other things, that the award of the complementary concession is necessary to satisfy passenger demand. On June 29, 1998, the Ministry of Infrastructure, Communications and Transportation granted 13 concessions to operate, maintain and develop the 13 principal airports in Mexico’s Central North region to our subsidiaries. Because our subsidiaries were considered entities of the federal public administration at the time the concessions were granted, the concessions were awarded without a public bidding process. However, the process of selling Series BB shares (currently representing Reforms to the Mexican Airport Law and Civil Aviation Law On January 26, 2015, amendments to the Mexican Airport Law and Civil Aviation Law were published and enacted. Among other matters, the amendments include provisions that intend to create a competitive market for the suppliers of complementary services. To this end, the amendments establish that a concession holder may not limit the number of providers of complementary services in its airport, except in instances in which space availability, operational efficiency and/or safety warrant such a limitation. If a concession holder denies entry to any complementary service provider for a reason other than the above, that service provider may file a complaint before the Ministry of Infrastructure, Communications and Transportation. On June 8, 2016, Article 10 BIS was added to the Mexican Airport Law to provide guidance regarding the granting of concession titles and extensions. Article 10 BIS requires the Ministry of Infrastructure, Communications and Transportation to file with the Ministry of Finance and Public Credit, in accordance with the Mexican Airport Law and corresponding regulations, the following: (i) a favorable opinion on the economic profitability of the respective project; (ii) if federal public funds are used to finance part of the project, evidence of the registration of the project with the investment program and project registry maintained by the Ministry of Finance and Public Credit; and (iii) the determination of the fee and duties payable by the concessionaire to the Mexican government, in terms of the applicable law. We believe we are currently complying in all material respects with the requirements of the Mexican Airport Law and its regulations. Noncompliance with these regulations could result in fines or other sanctions being assessed by the Ministry of Infrastructure, Communications and Transportation, and are among the violations that could result in termination of a concession if they occur three or more times. 70 On November 8, 2017, an amendment to the Mexican Airport Law took effect, which modified various regulations, primarily impacting airlines. As a result of the amendment, airlines must, among others: (i) be transparent when providing information regarding taxes and restrictions on a passenger’s airplane ticket and the breakdown of each cargo fee; (ii) provide passengers at least a 24-hour advance notice of any change in itinerary; (iii) compensate passengers in the event of a cancellation, overbooking and/or the damage, loss or destruction of luggage; and (iv) allow passengers with disabilities to transport necessary implements (such as wheelchairs, walkers, prostheses, crutches, walking sticks or any other implement), at no extra charge, provided that it is for personal use and the item is directly related to the traveler’s disability.
Federal Antitrust Commission On May 23, 2014, a new Federal Antitrust Law (Ley Federal de Competencia Económica) was enacted. The law grants broader powers to the Mexican Antitrust Commission, including the abilities to regulate essential facilities, order the divestment of assets and eliminate barriers to competition in order to promote access to the market. The law also sets forth important changes in connection with mergers and anti-competitive behavior, increases liabilities that may be incurred for violations of the law, increases the amount of fines that may be imposed for violations of the law and limits the availability of legal defenses against the application of the law. If the Mexican Antitrust Commission determines that a specific service or product is an essential facility, it has the ability to regulate access conditions, prices, tariffs or technical conditions for or in connection with the relevant service or product. As of April Role of the Ministry of Infrastructure, Communications and Transportation The Ministry of Infrastructure, Communications and Transportation is the principal regulator of airports in Mexico and is authorized by the Mexican Airport Law to perform the following functions:
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However, the scope of these functions might change if the current initiatives to reform the Airport Law presented to the Mexican
In addition, under the Mexican Organic Law of the Federal Public Administration (Ley Orgánica de la Administración Pública Federal), the Mexican Airport Law and the Mexican Civil Aviation Law, the Ministry of Infrastructure, Communications and Transportation is required to provide air traffic control, radio assistance and aeronautical communications at Mexico’s airports. The Ministry of Infrastructure, Communications and Transportation provides these services through Services for Navigation in Mexican Air Space, the Mexican air traffic control authority, which is a division of the Ministry of Infrastructure, Communications and Transportation. Since 1978, the Mexican air traffic control authority has provided air traffic control for Mexico’s airports. On October 16, 2019, the Ministry of Infrastructure, Communications and Transportation established AFAC, an independent regulatory agency, that replaced the Mexican Bureau of Civil Aviation (Dirección General de Aeronáutica Civil). AFAC is responsible for establishing, coordinating, overseeing and controlling international and national air transportation, as well as the airports, complementary services and generally all activities related to civil aviation. Concession Tax Under Article 232-A of the Mexican Federal Duties Law, holders of airport concessions must pay a tax for the use of Scope of Concessions We hold (through subsidiary holding companies) concessions granted to us by the Mexican government to use, operate, maintain and develop 13 airports in the Central North region of Mexico in accordance with the Mexican Airport Law. As authorized under the Mexican Airport Law, each of the concessions is held by one of our subsidiaries for an initial 50-year term beginning on November 1, 1998. This initial term of each of our concessions may be renewed in one or more terms for up to an additional 50 years, subject to our acceptance of any new conditions imposed by the Ministry of Infrastructure, Communications and Transportation and to our compliance with the terms of our concession. 72 In order to renew a concession, the Ministry of Infrastructure, Communications and Transportation must obtain a favorable opinion from the Tax Ministry, which will analyze the profitability of each of the airports together with the costs and benefits of renewing the concession. Such analysis compares the cash revenues that may be generated from the use, benefit and exploitation of the public domain assets and services subject to the relevant concessions against the associated costs. The Tax Ministry must issue a resolution on the profitability of each airport within 30 days following receipt of all relevant information from the Ministry of Infrastructure, Communications and Transportation. If the Tax Ministry does not issue a resolution within the 30-day period, it will be deemed that the Tax Ministry issued favorable opinion. In addition, together with the profitability analysis, the Ministry of Infrastructure, Communications and Transportation shall submit a proposal for the concession fee applicable to the renewed period to the Tax Ministry. The concessions held by our subsidiary concession holders allow the relevant concession holder, during the term of the concession, to: (i) operate, maintain and develop its airport and carry out any necessary construction in order to render airport, complementary and commercial services as provided under the Mexican Airport Law and its regulations and (ii) use and develop the assets that comprise the airport that is the subject of the concession (consisting of the airport’s real estate and improvements but excluding assets used in connection with fuel supply and storage). These assets are government-owned assets, subject to the Mexican National Assets Law. Upon expiration of a concession, the use of these assets, together with any improvements thereto, automatically revert to the Mexican government.
Concession holders are required to provide airport security, which must include contingent and emergency plans in accordance with the regulations under the Mexican Airport Law. The security regulations shall be implemented in accordance with the requirements set forth in the National Program for Airport Security (Plan Nacional de Seguridad Aeroportuaria). In addition, the regulations pertaining to the Mexican Airport Law specify that an airport concession holder is responsible for the inspection of passengers and carry-on luggage prior to approaching the departure gates and specify that the transporting airline is responsible for the inspection of checked-in luggage and cargo. If public order or national security is endangered, the competent federal authorities are authorized to act to protect the safety of aircraft, passengers, cargo, mail, installations and equipment. The shares of a concession holder and the rights under a concession may be subject to a lien only with the approval of the Ministry of Infrastructure, Communications and Transportation. No agreement documenting liens approved by the Ministry of Infrastructure, Communications and Transportation may allow the beneficiary of a pledge to become a concession holder under any circumstances. A concession holder may not assign any of its rights or obligations under its concession without the authorization of the Ministry of Infrastructure, Communications and Transportation. The Ministry of Infrastructure, Communications and Transportation is authorized to consent to an assignment only if the proposed assignee satisfies the requirements to be a concession holder under the Mexican Airport Law, undertakes to comply with the obligations under the relevant concession and agrees to any other conditions that the Ministry of Infrastructure, Communications and Transportation may require. General Obligations of Concession Holders The concessions impose certain obligations on the concession holders, including, among others, (i) the obligation to pay the concession tax described above, (ii) the obligation to deliver concession services in a continuous, public and non-discriminatory manner, (iii) the obligation to maintain the airports in good working condition and (iv) the obligation to make investments with respect to the infrastructure and equipment in accordance with the Master Development Programs and the concessions. 73 Each concession holder and any third party providing services at an airport is required to carry specified insurance in amounts and covering specified risks, such as damage to persons and property at the airport, in each case as specified by the Ministry of Infrastructure, Communications and Transportation. As of April Substantially all of the contracts entered into prior to the grant of our concessions by the Mexican Airport and Auxiliary Services Agency with respect to each of our airports were assigned to the relevant concession holder for each airport. As part of this assignment, each concession holder agreed to indemnify the Mexican Airport and Auxiliary Services Agency for any loss suffered by the Mexican Airport and Auxiliary Services Agency due to the concession holder’s breach of its obligations under an assigned agreement. Classification of Services Provided at Airports The Mexican Airport Law and its regulations classify the services that may be rendered at an airport into the following three categories:
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Third parties rendering airport, complementary or commercial services are required to do so pursuant to a written agreement with the relevant concession holder. We have entered into agreements with third parties for security and surveillance services, ramp-handling and baggage-handling services and checked-baggage services, among others. All agreements relating to airport or complementary services are required to be approved by the Ministry of Infrastructure, Communications and Transportation. The Mexican Airport Law provides that the concession holder is jointly liable with these third parties for compliance with the terms of the relevant concession with respect to the services provided by such third parties. All third-party service providers of complementary services are required to be corporations incorporated under Mexican law. In addition, we lease spaces to third-party tenants that provide commercial services such as food and beverage, retail and advertising. A concession holder is also required to allow for a competitive market for complementary services. A concession holder may only limit the number of providers of complementary services in its airport due to space, efficiency and/or safety considerations. If a concession holder denies entry to any complementary services provider for reasons other than the above, such service provider may file a complaint with the Ministry of Infrastructure, Communications and Transportation, which shall determine within 60 days of the filing of the complaint whether entry of the service provider into the airport shall be authorized. If the number of complementary service providers must be limited due to these considerations, contracts for the provision of complementary services must be awarded through a competitive bidding process. Airport and complementary services are required to be provided to all users in a uniform and regular manner, without discrimination as to quality, access or price. Concession holders are required to provide airport and complementary services on a priority basis to military aircraft, disaster-support aircraft and aircraft experiencing emergencies. Airport and complementary services are required to be provided at no cost to military aircraft and aircraft performing national security activities. In the event of force majeure, the Ministry of Infrastructure, Communications and Transportation may impose additional regulations governing the provision of services at airports, but only to the extent necessary to address the force majeure
event. The Mexican Airport Law allows the airport administrator appointed by a concession holder to suspend the provision of airport services in the event of force majeure. Master Development Programs Concession holders are also required to submit to the Ministry of Infrastructure, Communications and Transportation a Master Development Program describing, among other things, the concession holder’s construction and maintenance plans. Each Master Development Program is for a period of 15 years and is required to be updated every five years and resubmitted for approval to the Ministry of Infrastructure, Communications and Transportation. Upon such approval, the Master Development Program is deemed to constitute a part of the relevant concession. Any major construction, renovation or expansion of an airport may only be made pursuant to a concession holder’s Master Development Program or upon approval by the Ministry of Infrastructure, Communications and Transportation. Information required to be presented in the Master Development Program includes:
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The concessions require the concession holder to prepare and submit the concession holder’s Master Development Program in a A concession holder may only undertake a major construction project, renovation or expansion relating to an airport pursuant to its Master Development Program or with the approval of the Ministry of Infrastructure, Communications and Transportation. We are required to spend the full amounts set forth in each investment program under our Master Development Programs, and the Ministry of Infrastructure, Communications and Transportation may apply sanctions if we do not comply. Changes to a Master Development Program and investment program require the approval of the Ministry of Infrastructure, Communications and Transportation, except for emergency repairs and minor works that do not adversely affect an airport’s operations. Pursuant to the terms of our concessions, we are required to comply with the investment obligations under the Master Development Programs on a year-by-year basis, and the Ministry of Infrastructure, Communications and Transportation is entitled to review our compliance thereunder (and apply sanctions accordingly) on a
historically the Ministry of Infrastructure, Communications and Transportation has indicated its intent to review our compliance with these obligations on an aggregate five-year basis, we understand that the Ministry of Infrastructure, Communications and Transportation may also conduct more limited reviews of our compliance with our obligations on a year-by-year basis going forward. During 2020, we negotiated the Master Development Program for the 2021 to 2025 period with the Ministry of Infrastructure, Communications and Transportation for each of our subsidiary concession holders. This five-year program is in effect from January 1, 2021 until December 31, 2025. Revenue Regulation The Mexican Airport Law provides for the Ministry of Infrastructure, Communications and Transportation to establish price regulations for services for which the Antitrust Commission determines that a competitive market does not exist. In 1999, the Antitrust Commission issued a ruling stating that competitive markets generally do not exist for airport services and airport access provided to third parties rendering complementary services. This ruling authorized the Ministry of Infrastructure, Communications and Transportation to establish regulations governing the prices that may be charged for airport services and access fees that may be charged to third parties rendering complementary services in our airports. On September 12, 2000, the Rate Regulation (Regulación Tarifaria), which provides a framework for the setting by the Ministry of Infrastructure, Communications and Transportation of five-year maximum rates, was incorporated within the terms of each of our concessions. See “Item 3. Key Information—Risk Factors—Risks Related to the Regulation of Our Business— The Company cannot predict how the regulations governing the business will be applied.” 76 Regulated Revenues Since January 1, 2000, all of our revenues from aeronautical services have been subject to the Rate Regulation. This price regulation system establishes a “maximum rate” for each airport for every year in a five-year period. The “maximum rate” is the maximum amount of revenues per “workload unit” that may be earned at an airport each year from regulated revenue sources. Under this regulation, a workload unit is equivalent to one terminal passenger or 100 kilograms (220 pounds) of cargo, including those transported in passenger airplanes. The combined maximum tariffs are expressed in workload units for each airport and were determined based on: (i) projected workload units; (ii) capital investments; and (iii) the operating expenses authorized for the five-year period in the Master Development Programs. We are able to set the specific prices for regulated services, other than complementary services and the leasing of space to airlines, for each of our airports every six months (or earlier upon a cumulative increase of 5% in the Mexican Producer Price Index (excluding fuel)), as long as the combined revenues from regulated services at an airport does not exceed the maximum rate per workload unit at that airport on an annual basis. Since our aggregate revenues resulting from regulated services are not otherwise restricted, increases in passenger and cargo traffic increase the workload units permit greater revenues overall within each five-year period for which maximum rates are established. The Rate Regulation establishes a “dual-till” system of price regulation under which a majority of our revenues, such as passenger fees, landing fees, aircraft parking fees and access fees from third parties providing complementary services at our airports, are regulated, while the revenues that we earn from commercial activities in terminals at our airports, such as the leasing of space to retailers, restaurants, car rental companies and banks, are not regulated. In Our revenues from non-aeronautical services, including revenues that we earn from most commercial activities in our terminals, are not subject to this maximum-rate price regulation system and are therefore not subject to a ceiling. For a description of how we classify our revenues into aeronautical and non-aeronautical services, see “Item 5. Operating and Financial Review and Prospects—Overview—Classification of Revenues.”
Maximum Rates Each airport’s maximum rate is to be determined for each year by the Ministry of Infrastructure, Communications and Transportation based on a general framework established in our concessions. This framework reflects, among other factors, projections of an airport’s revenues, operating costs and capital expenditures, as well as the estimated cost of capital related to regulated services and projected annual efficiency adjustments determined by the Ministry of Infrastructure, Communications and Transportation. The schedule of maximum rates for each airport is to be established every five years.
Maximum Rates for 2021 through 2025 On December 28, 2020, the Ministry of Infrastructure, Communications and Transportation set the airport maximum rates for the five-year period from January 1, 2021 through December 31, 2025. These maximum rates are subject to adjustment only under the limited circumstances described below under “Special Adjustments to Maximum Rates.” The following table sets forth the maximum rates for each of our airports under our 2021 to 2025 Master Development Programs that went into effect as of January 1, 2021:
Current Maximum Rates(1)
Methodology for Determining Future Maximum Rates The Rate Regulation provides that each airport’s annual maximum rates are to be determined in five-year intervals based on the following variables:
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Our concessions specify a discounted cash flow formula to be used by the Ministry of Infrastructure, Communications and Transportation to determine the maximum rates that, given the projected The concessions provide that each airport’s reference values, discount rate and the other variables used in calculating the maximum rates do not represent an undertaking by the Ministry of Infrastructure, Communications and Transportation or the Mexican government as to the profitability of any concession holder. Therefore, whether or not the maximum rates (or the amounts up to the maximum rates that we have been able to collect) multiplied by workload units at any airport generate a profit or exceed our profit estimates, or reflect the actual profitability, discount rates, capital expenditures or productivity gains at that airport over the five-year period, we are not entitled to any adjustment to compensate for this shortfall. To the extent that such aggregate revenues per workload unit exceed the relevant maximum rate, the Ministry of Infrastructure, Communications and Transportation may proportionately reduce the maximum rate in the immediately subsequent year and assess penalties equivalent to 1,000 to 50,000 times the Unit of Measurement and Update (“UMA”). The UMA as of January 1, As established by the Ministry of Infrastructure, Communications and Transportation, the calculation of workload units does not include transit passengers for subsequent years. The current workload unit calculation is therefore equal to one terminal passenger or 100 kilograms (220 pounds) of commercial cargo. Special Adjustments to Maximum Rates Once determined, each airport’s maximum rates are subject to special adjustment only under the following circumstances:
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Ownership Commitments and Restrictions The concessions require us to retain a 51% direct ownership interest in each of our 13 concession holders throughout the term of these concessions. Any acquisition by us or one of our concession holders of any additional airport concessions or of a beneficial interest of 30% or more of another concession holder requires the consent of the Antitrust Commission. In addition, the concessions prohibit us and our concession holders, collectively or individually, from acquiring more than one concession for the operation of an airport along each of Mexico’s southern and northern borders. Air carriers are prohibited under the Mexican Airport Law from controlling or beneficially owning 5% or more of the shares of a holder of an airport concession. We, and each of our subsidiaries, are similarly restricted from owning 5% or more of the shares of any air carrier. Foreign governments acting in a sovereign capacity are prohibited from owning any direct or indirect equity interest in a holder of an airport concession. Reporting, Information and Consent Requirements Concession holders and third parties providing services at airports are required to provide the Ministry of Infrastructure, Communications and Transportation access to all airport facilities and information relating to an airport’s construction, operation, maintenance and development. Each concession holder is obligated to maintain statistical records of operations and air traffic movements in its airport and to provide the Ministry of Infrastructure, Communications and Transportation with any information that it may request. Each concession holder is also required to publish its annual audited consolidated financial statements in a principal Mexican newspaper within the first four months of each year. The Mexican Airport Law provides that any person or group directly or indirectly acquiring control of a concession holder is required to obtain the consent of the Ministry of Infrastructure, Communications and Transportation to such control acquisition. For purposes of this requirement, control is deemed to be acquired in the following circumstances:
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Under the regulations to the Mexican Airport Law, any company acquiring control of a concession holder is deemed to be jointly and severally liable with the concession holder for the performance of the terms and conditions of the concession. The Ministry of Infrastructure, Communications and Transportation is required to be notified upon any change in a concession holder’s chief executive officer, board of directors or management. A concession holder is also required to notify the Ministry of Infrastructure, Communications and Transportation at least 90 days prior to the adoption of any amendment to its bylaws concerning the dissolution, corporate purpose, merger, transformation or spinoff of the concession holder. Penalties and Termination and Revocation of Concessions and Concession Assets Termination of Concessions Under the Mexican Airport Law and the terms of the concessions, a concession may be terminated upon any of the following events:
Following a concession’s termination, the concession holder remains liable for the performance of its obligations during the term of the concession. On May 20, 2004, a Revocation of Concessions A concession may be revoked by the Ministry of Infrastructure, Communications and Transportation under certain conditions, including:
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The Ministry of Infrastructure, Communications and Transportation is entitled to revoke a concession without prior notice as a result of the first six events described above. In the case of other violations, a concession may be revoked as a result of a violation only if sanctions have been imposed at least three times with respect to the same violation. Pursuant to the terms of our concessions, in the event the Ministry of Infrastructure, Communications and Transportation revokes one of our concessions, it is entitled to revoke all of our other concessions. According to the Mexican National Assets Law, Mexico’s national patrimony consists of private and
declaration of “rescue,” or reversion, the assets that were subject to the concession are automatically returned to the Mexican government. 82 In the event of war, public disturbances or threats to national security, the Mexican government may assume the operations (through a process known as requisa) of any airport, airport and complementary services as well as any other airport assets. Such government action may exist only during the duration of the emergency. Except in the case of war, the Mexican government is required to compensate all affected parties for any damages or losses suffered as a result of such government action. If the Mexican government and a concession holder cannot agree as to the appropriate amount of damages or losses, the amount of damages shall be determined by experts jointly appointed by both parties, and the amount of losses shall be determined based on the average net income of the concession holder during the previous year. In the event of a requisa due to international war, the Mexican government would not be obligated to indemnify us. The Mexican Airport Law provides that sanctions of up to 400,000 times the UMA may be assessed for failures to comply with it or the terms of a concession. The UMA as of January 1, Consequences of Termination or Revocation of a Concession Upon termination, whether as a result of expiration or revocation, the real estate and fixtures that were the subject of the concession automatically revert to the Mexican government. In addition, upon termination, the Mexican government has a preemptive right to acquire all other assets used by the concession holder to provide services under the concession at prices determined by expert appraisers appointed by the Ministry of Infrastructure, Communications and Transportation. Alternatively, the Mexican government may elect to lease these assets for up to five years at fair market rates as determined by expert appraisers appointed by the Mexican government and the concession holder. In the event of a discrepancy between appraisals, a third expert appraiser must be jointly appointed by the Mexican government and the concession holder. If the concession holder does not appoint an expert appraiser, or if such appraiser fails to determine a price, the determination of the appraiser appointed by the Mexican government will be conclusive. If the Mexican government chooses to lease the assets, it may thereafter purchase the assets at their fair market value, as determined by an expert appraiser appointed by the Mexican government. The Mexican Communications Law, however, provides that upon expiration, termination or revocation of a concession, all assets necessary to operate the airports will revert to the Mexican government at no cost and free of any liens or other encumbrances. There is substantial doubt as to whether the provisions of our concessions would prevail over those of the Mexican Communications Law. Accordingly, upon expiration or termination of our concessions, the assets used by our subsidiary concession holders to provide services at our airports may revert to the Mexican government, free of charge, together with government-owned assets and improvements permanently attached thereto. Grants of New Concessions The Mexican government may grant new concessions to manage, operate, develop and construct airports. Such concessions may be granted through a public bidding process in which bidders must demonstrate their technical, legal, managerial and financial capabilities. The Mexican Antitrust Commission has the power, under certain circumstances, to prohibit a party from bidding, and to cancel an award after the process has concluded. In addition, the government may grant concessions without a public bidding process to the following entities:
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Additionally, under the Mexican Airport Law for the granting of a concession title or the resolution to extend the term thereof, the Ministry of Infrastructure, Communications and Transportation shall file before the Ministry of Finance and Public Credit the following:
Environmental Matters Regulation Our operations are subject to Mexican federal and state laws and regulations relating to the protection of the environment. The major federal environmental laws applicable to our operations are: (i) the General Law of Ecological Equilibrium and Environmental Protection (Ley General del Equilibrio Ecológico y la Protección al Ambiente) or the “General Environmental Law,” and its regulations, which are administered by the Ministry of the Environment and Natural Resources and enforced by the Ministry’s enforcement branch, the Federal Attorney for Environmental Protection; (ii) the General Law for the Prevention and Integral Management of Waste (Ley General para la Prevención y Gestión Integral de los Residuos), the “Law on Waste”, the General Law for Sustainable Forest Development (Ley General de Desarrollo Forestal Sustentable) and the General Law for Wildlife (Ley General de Vida Silvestre), each of which are also administered by the Federal Attorney for Environmental Protection; (iii) the National Waters Law (Ley de Aguas Nacionales) and its regulations, which are administered and enforced by the National Waters Commission, also a branch of the Ministry of the Environment and Natural Resources; (iv) the General Law of Climate Change; and (v) the Federal Law of Environmental Responsibility (Ley Federal de Responsabilidad Ambiental). Under the General Environmental Law, regulations have been enacted concerning air pollution, environmental impact, environmental audits, natural protected areas, ecological ordering, emissions records and transfer of pollutants. The General Environmental Law also regulates, among other things, vibrations, thermal energy, soil contamination and visual pollution, although the Mexican government has not yet issued enforceable regulation on the majority of these matters. The General Environmental Law also provides that companies that contaminate soils are responsible for their clean-up. Further, according to the Law on Waste, which was published in October 2003, owners and/or possessors of real property with soil contamination are jointly and severally liable for the remediation of such contaminated sites, irrespective of any recourse or other actions such owners and/or possessors may have against the contaminating party, and aside from the criminal or administrative liability to which the contaminating party may be subject. Restrictions on the transfer of contaminated sites also exist. The Law on Waste also regulates the generation, handling and final disposal of hazardous waste. Pursuant to the National Waters Law, companies that discharge wastewaters into national water bodies must comply with, among other rules, maximum permissible contaminant levels in order to preserve water quality. Periodic reports on water quality must be provided to competent authorities. Liability may result from the contamination of
underground waters or recipient water bodies. The use of underground waters is subject to restrictions pursuant to our concessions and the National Waters Commission. 84 In addition to the foregoing, Official Mexican Standards (Normas Oficiales Mexicanas), which are technical standards issued by competent regulatory authorities pursuant to the General Metrology and Normalization Law (Ley General de Metrología y Normalización) and to other laws that include the environmental laws described above, establish standards relating to air emissions, soil contamination, wastewater discharges, the generation, handling and disposal of hazardous waste and noise control, among other issues. The Ministry of the Environment and Natural Resources (Secretaría de Medio Ambiente y Recursos Naturales) and the Federal Office for the Protection of the Environment (Procuraduría Federal de Protección al Ambiente) are the responsible regulators. The Federal Office for the Protection of the Environment can bring administrative, civil and criminal proceedings against companies that violate environmental laws, and it also has the power to close non-complying facilities and impose a variety of sanctions. Companies in Mexico are required to obtain proper authorizations, licenses, concessions or permits from competent environmental authorities for the performance of activities that may have an impact on the environment or that may constitute a source of contamination. Companies in Mexico are also required to comply with a variety of reporting obligations that include, among others, providing the Ministry of the Environment and Natural Resources, the Federal Office for the Protection of the Environment and the National Waters Commission, as applicable, with periodic reports regarding compliance with various environmental laws. Prior to the opening of Mexico’s airports to private investment, the Federal Office for the Protection of the Environment required that environmental audits be performed at each of our airports. Based on the results of these audits, the Federal Office for the Protection of the Environment issued recommendations for improvements and corrective actions to be taken at each of our airports (with which we have complied). In connection with the transfer of the management of our airports from our predecessor, we entered into environmental compliance agreements with the Federal Office for the Protection of the Environment on January 1, 1999, and July 12, 2000, pursuant to which we agreed to comply with a specific action plan and adopted specific actions within a determined time frame. On June 6, 2012, the General Law on Climate Change was adopted and published in the Official Gazette of the Federation, which, among other objectives, (i) regulates greenhouse gases and emissions, taking into consideration the goals set forth by the UN Framework Convention on Climate Change and the provisions derived therein; (ii) promotes the education, research, development and technology transfer, innovation and promotion with respect to adapting to and mitigating climate change; and (iii) promotes the transition to a competitive, sustainable and Furthermore, on June 7, 2013, the Federal Law of Environmental Responsibility was published in the Federal Official Gazette and requires that any person or entity who, whether by act or omission, directly or indirectly, causes harm to the environment, is obligated to repair such harm. If repair of such harm is not possible, such person is required to pay compensation for the harm caused and take any action necessary to avoid any additional harm or damage. Likewise, this law establishes a judicial procedure for environmental responsibility through which any physical or moral person with a legitimate interest can sue for repair and compensation for harm done to the environment. On August 11, 2014, the Mexican National Agency of Industrial Safety and Protection of the Environment of the Hydrocarbons Sector (Agencia Nacional de Seguridad Industrial y de Protección al Medio Ambiente del Sector Hidrocarburos, or “ASEA”) was created. While initially taking a secondary role to the role of the Mexican Ministry of the Environment and Natural Resources, ASEA has recently started to enforce its legal powers. Our airport growth projects related to fuel supply must now be approved by ASEA, which may result in more burdensome proceedings for the approval of special projects related to hydrocarbons. As of the date of this report, there can be no assurance whether ASEA’s rules and regulations will materially affect our business or results of operations.
In 2018, Mexico launched a carbon dioxide (“CO2”) market. The market requires that industries that generate above a certain amount of CO2 emissions pay for rights to excess emissions. Starting in 2019, the legislation also requires that companies report their global emissions as verified by the Mexican Emissions Registry (Registro Nacional 85 de Emisiones). In addition, new water quality standards are being discussed, which would require greater water quality for all of our wastewater disposal. Modifications of existing environmental laws and regulations or the adoption of more stringent environmental laws and regulations may result in the need for investments that are not currently provided for in our capital expenditures program and may otherwise result in a material adverse effect on our business, results or operations or financial condition. Although we do not currently expect that compliance with environmental laws will have material effect on our financial condition or results of operations, there can be no assurance, however, that environmental regulations or the enforcement thereof will not change in a manner that could have a material adverse effect on our business, results of operations, prospects or financial condition. For more information see “Item 3. Key Information—Risk Factors—Risks Related to Mexico—Mexico’s environmental legislation could limit the growth of some of our airports.”
Liability for Environmental Noncompliance The legal framework of environmental liability applicable to our operations is generally outlined above. Under the terms of our concessions, the Mexican government has agreed to indemnify us for any environmental liabilities arising prior to November 1, 1998, and for any failure by the Mexican Airport and Auxiliary Services Agency prior to November 1, 1998, to comply with applicable environmental laws and with its agreements with Mexican environmental authorities. We believe that we are entitled to indemnification for any liabilities related to actions that our predecessor was required to perform or refrain from performing under applicable environmental laws and under their agreements with environmental authorities, though this may change in the future. The level of environmental regulation in Mexico has significantly increased in recent years, and the enforcement of environmental laws is becoming substantially more stringent. We expect this trend to continue and expect additional norms to be imposed by the trilateral agreement on Environmental Cooperation that will be entered into by Canada, the United States and Mexico in the context of the USMCA (which was formally signed on November 30, 2018 and entered into force on July 1, 2020), as well as by other international treaties on environmental matters. In 2018, Mexico, the United States and Canada announced a Trilateral Agreement of Environmental Cooperation under the USMCA which, has replaced the North American Agreement on Environmental Cooperation in force since January 1, 1994. We do not expect that compliance with Mexican federal, state or municipal environmental laws currently in effect will have a material adverse effect on our financial condition or results of operations. However, environmental regulations or the enforcement thereof may change in a manner that could have a material adverse effect on our business, results of operations, prospects and financial condition.
The following table sets forth our consolidated subsidiaries as of April
Pursuant to the Mexican National Assets Law, all real estate and fixtures in our airports are owned by the Mexican government. Each of our concessions is scheduled to terminate in 2048, although each concession may be extended one or more times for up to an aggregate of an additional 50 years. The option to extend a concession is subject to our acceptance of any changes to such concession that may be imposed by the Ministry of Infrastructure, Communications and Transportation and our compliance with the terms of our current concessions. Upon expiration of our concessions, these assets automatically revert to the Mexican government, including improvements we may have made during the terms of the concessions, free and clear of any liens and/or encumbrances, and we will be required to indemnify the Mexican government for damages to these assets, including any improvements thereon, except for those caused by normal wear and tear. We use the property constituting our airports pursuant to our concessions. For more information regarding our property, plant and equipment, see “Item 4. Business Overview—Our Airports.” We maintain comprehensive insurance coverage that covers the principal assets of our airports and other property, subject to customary limits, against damage due to natural disasters, accidents, terrorism or similar events. We also maintain general liability insurance but do not maintain business-interruption insurance. Among other insurance policies, we carry a U.S.$50.0 million insurance policy covering damages to our property resulting from certain terrorist acts and a U.S.$ Item 4A. Unresolved Staff Comments None. Item 5. Operating and Financial Review and Prospects The following discussion should be read in conjunction with, and is qualified in its entirety by reference to, our consolidated financial statements and the notes to those consolidated financial statements. It does not include all of the information included in our consolidated financial statements. You should read our consolidated financial statements to gain a better understanding of our business and our historical results of operations. Our consolidated financial statements included in this annual report are prepared in accordance with IFRS, as issued by the IASB. Overview We hold concessions to operate, maintain and develop 13 airports in Mexico, many of which are located in the northern and central regions of the country, pursuant to concessions granted by the Mexican government. The substantial majority of our revenues are derived from providing aeronautical services, which generally are related to the use of our airport facilities by airlines and passengers. For example, approximately
We also derive revenues from
Recent Developments
On December 7, 2022 (the “Closing Date”), CONCESSOC completed the purchase of all the equity interests in SETA and Aerodrome. As of the Closing Date, SETA and Aerodrome collectively owned 66,046,210 of OMA’s Series B Shares (including Aerodrome’s Series B Shares represented by ADSs) (the “Purchased Series B Shares”) and SETA owned 49,766,000 of OMA’s Series BB shares (the “Purchased Series BB Shares”). Together, the Purchased Series B Shares and the Purchased Series BB Shares account for approximately 29.99% of OMA’s total issued capital stock. The
Under the
Operating Results Certain U.S. dollar amounts have been translated from Mexican pesos for convenience purposes at an exchange rate of Passenger and Cargo Volumes In Many factors affecting our passenger traffic volume and the mix of passenger traffic in our airports are beyond our control, including the adverse effects of the COVID-19 pandemic. In
The following table sets forth certain operating and financial data relating to our revenues and passenger and cargo volumes for the periods indicated:
In Classification of Revenues We classify our revenues into three categories: revenues from aeronautical services, revenues from Our revenues from aeronautical services are subject to price regulation under the applicable maximum rate at each of our airports and principally consist of passenger charges, aircraft landing and parking charges, airport security charges, passenger walkway charges, the leasing of space in our airports to airlines (other than first class/VIP lounges and other similar activities not directly related to essential airport operations) and complementary services (i.e., fees from handling and catering providers, permanent ground transportation operators and access fees from fuel providers at our airports).
Our revenues from We recognize revenues from construction services derived from the improvements made to airports that are included in our Master Development Programs. Construction service revenues related to the airport concession are determined based on negotiations between us and the Ministry of Infrastructure, Communication and Transportation (recognized according to the percentage-of-completion method), as we construct or improve the airports based on the Master Development Programs. In For a detailed description of the components of our aeronautical and non-aeronautical revenue categories, see “Item 4. Information on the Company—Business Overview—Our Sources of Revenues.” Fluctuations in the Peso
International passengers and international flights pay tariffs denominated in U.S. dollars. However, these tariffs are generally collected in Mexican pesos 30 to 60 days following the date of each flight, and our maximum rates are set in Mexican pesos. Therefore, a significant depreciation of the Mexican peso as compared to the dollar during this 30 to 60-day period could result in us exceeding our maximum rates, which would be a violation of our concession. We attempt to set our U.S. dollar-denominated tariffs so as to avoid exceeding our maximum rates, and so far, fluctuations in the peso have not caused us to exceed our maximum rates or required us to issue rebates to avoid exceeding our maximum rates. In addition, we have financial liabilities denominated in U.S. dollars, and a significant depreciation in the Mexican peso could result in higher debt balances when converted to Mexican pesos, thus resulting in foreign exchange losses. We may also, from time to time, maintain cash balances denominated in U.S. dollars, in which cases a depreciation of the Mexican peso against the U.S. dollar could result in a foreign exchange gain. As of December 31, As of December 31,
Aeronautical Revenues The system of price regulation applicable to our aeronautical revenues establishes a maximum rate in pesos for each airport for each year in a The following table sets forth our revenues from aeronautical services for the periods indicated:
Under the regulatory system applicable to our aeronautical revenues, we can set the specific price for each category of aeronautical services, other than complementary services and the leasing of space to airlines, every six months (or earlier upon a cumulative increase of 5% in the Mexican Producer Price Index (excluding fuel)), as long as the total aeronautical revenues per workload unit each year at each of our airports does not exceed the maximum rate at that airport for that year. See “Item 4. Information on the Company—Regulatory Framework—Price Regulation” for a description of our maximum rates and the rate-setting procedures for future periods. We currently set the specific price for these categories of aeronautical services after negotiating with our principal airline customers. Historically, our specific prices have been structured such that the substantial majority of our aeronautical revenues are derived from passenger charges, and we expect this to continue to be the case in future agreements with our principal airline customers. In Aeronautical revenue per workload unit is an indicator that is calculated by dividing total aeronautical revenues by the workload units for a given period. This indicator is affected annually, except for years in which the new maximum tariffs are set, by: (i) adjustment in the maximum rates for the efficiency factor and the Mexican Producer Price Index (excluding fuel); (ii) increases and decreases in the relative number of workload units at each airport; and (iii) changes in total workload units per airport. We, from time to time, seek to offer incentives, including discounts on charges for aeronautical services, to encourage carriers to establish new routes and take other measures expected to increase passenger traffic at our airports. The Mexican Airport Law prevents discriminatory pricing, so incentives we offer must be available to any carrier
meeting the conditions specified for those incentives. The main objective is to promote passenger growth in all of our airports. We may continue to offer further incentives in the future. 93 Such initiatives undertaken in the future may not be carried out, and may not increase our passenger traffic volume or our revenues. In Non-Aeronautical Revenues
Certain categories of non-aeronautical revenues are directly impacted by passenger traffic (for example car parking and rental, and food and beverage providers) while others are not (for example leasing of space, on which we earn at least a minimum fixed rent indexed to inflation each year, which may be increased by royalty-based payments as discussed below, or diversification revenues). Accordingly, non-aeronautical revenues do not always behave in the same manner as passenger traffic or workload units. A substantial amount of our contracts with third-party tenants are royalty-based arrangements. Under a royalty-based contract, the amount tenants must pay is based on tenants’ revenues, subject to minimum guaranteed fixed amounts for the space leased. When the royalty-based amount is lower than the minimum guaranteed amount, the tenant must still pay the latter. Conversely, when the royalty-based amount is higher than the minimum guaranteed amount, the tenant will pay the former. Therefore, a decrease in passenger traffic volumes would result in a reduction in non-aeronautical revenues only if, (i) prior to such decrease in passenger traffic, the sales of royalty-based tenants were higher than the minimum guaranteed amount and (ii) the decrease in traffic volumes is such that it would cause the royalty-based amount to be lower than the minimum guaranteed amount for a given tenant. As a result, during periods in which airports experience a reduction in passenger traffic volumes, non-aeronautical revenues may remain stable due to the minimum guaranteed amount received by the airport under the lease contract, thereby resulting in a potential increase in non-aeronautical revenues per workload unit.
The following table sets forth our revenues from non-aeronautical activities for the periods indicated:
The majority of our non-aeronautical revenues are derived from commercial activities, which represented
On an individual basis, during Complementary activities represented Operating Costs Our operating costs have been, and we believe that they will continue to be, funded entirely from our results of operations. The following table sets forth our operating costs and certain other related information for the periods indicated:
Cost of Services Our cost of services consists primarily of employee, maintenance, safety, security and insurance costs, utilities (a portion of which we recover from our tenants) and other miscellaneous expenses.
Major maintenance provision We are required to perform major maintenance activities to our airports as established by our concession provided by the Mexican government. The estimated major maintenance costs are based on our Master Development Programs, which are reviewed and updated every five years. The contractual obligations to maintain and restore the infrastructure of our airports is recognized as a provision in our consolidated statements of financial position based on an estimate of the expenditure that would be required to settle the present obligation at the end of the reporting period. When the effect of the time value of money is material, the amount of the provision equals the present value of the expenditures expected to be required to settle the obligation. Where discounting is used, the carrying amount of the provision increases each period to reflect the passage of time and this increase is recognized as a borrowing cost. After initial recognition, provisions are reviewed at the end of each reporting period and adjusted to reflect current best estimates. Adjustments to provisions arise from three sources: (i) revisions to estimated cash flows (both in amount and timing); (ii) changes to present value due to the passage of time; and (iii) revisions of discount rates to reflect prevailing current market conditions. In periods following the initial recognition and measurement of the major maintenance provision at its present value, the provision is revised to reflect estimated cash flows being closer to the measurement date. The unwinding of the discount relating to the passage of time is recognized as a financing cost and the revision of estimates of the amount and timing of cash flows is a reassessment of the provision and charged or credited as an operating item within our consolidated statements of income and other comprehensive income. Every quarter, the major maintenance provision is revised to update the amount that has been provided for in order to keep the provision as accurate as possible. The provision could increase or decrease, as a result of certain events, such as, on the one hand, a contingency in an airport that requires immediate major maintenance or other maintenance that has been delayed or, on the other hand, an asset that does not need maintenance, in which case resources can be better used for other activities. Construction Costs We invest in additions and upgrades to our concession assets in accordance with our Master Development Programs. As our construction costs are equal to our revenues from construction services, they do not have a cash impact on our results of operations. Administrative Expenses Our administrative expenses consist primarily of personnel expenses, fees and expenses paid to consultants and other providers of professional services and other administrative overhead expenses. Concession Tax Beginning November 1, 1998, we became subject to Article 232-A of the Mexican Federal Duties Law, which requires that the holders of concessions pay a tax for the use of
Technical Assistance Fee Under the Technical Assistance Agreement, SETA provides management and consulting services and transfers technical assistance and technological and industry knowledge and experience to us in exchange for a fee. For more information about this agreement, see “Item 7. Major Shareholders and Related-Party Transactions—Related Party Transactions.” The technical assistance fee for each of 2001 and 2002 was fixed at U.S.$5.0 million (adjusted annually for U.S. inflation). For the remainder of the original contract term, the fee was equal to the greater of U.S.$3.0 million adjusted annually for inflation (measured by the U.S. consumer price index) or 5% of our EBITDA. Pursuant to the second amendment to the Technical Assistance Agreement signed on May 13, 2015, as of June 14, 2015, the fee was reduced to the greater of U.S.$3,478,000 (updated annually according to the U.S. consumer price index) and 4% of our EBITDA for the first three years of the extension and 3% of our EBITDA for the last two years of the extension. Pursuant to the third amendment of the Technical Assistance Agreement, dated as of December 14, 2020, the term of such agreement Depreciation and Amortization Our depreciation and amortization expenses primarily reflect the amortization of our investment in our 13 concessions. In The value of our concessions was determined in June 2000, when SETA won the bid to acquire Series BB shares currently representing Solidarity Fees We and our subsidiaries have entered into
During 2021, we made certain amendments to our Operating Services Agreements to ensure compliance with the labor reform implemented in 2021 by the Mexican Government that would allow us to contract specialized services within companies of the same economic group. Expenditures pursuant to master development programs and other capital expenditures In Employee Statutory Profit Sharing We are subject to the mandatory statutory employee profit sharing regime (participación de los trabajadores en las utilidades de las empresas, or “PTU”) established by the Mexican Federal Labor Law. Under this regime, 10% of a company’s unconsolidated annual profits, as calculated for tax purposes, and subject to certain limits, must be distributed among employees other than the chief executive officer. Pursuant to the labor reform implemented in 2021 by the Mexican Government, the statutory profit sharing payment for an employee is capped to three months of base salary, subject to certain limits Taxation The recognition of a deferred tax asset from previous years represented The statutory Mexican corporate income tax rate in A withholding tax at a rate of 10% on the gross amount of dividends distributed to non-Mexican holders with respect to our Series B shares and our ADSs was enacted as part of the 2013 tax reforms. For a further discussion of the withholding tax, see “Item 10. Additional Information—Taxation—Taxation of Dividends.”
99
Operating Results by Segment The following table sets forth our results of operations for the periods indicated for each of our airports, our hotel services and our industrial services.
100
101
102
103
104
105
Summary Historical Consolidated Results of Operations The following table sets forth a summary of our consolidated results of operations for the years indicated:
Results of Operations for the Year Ended December 31, Consolidated Revenues Total revenues for Aeronautical revenues
106
Revenues from construction services in Our revenues are highly dependent on the volume of passenger traffic. The effects of the COVID-19 pandemic resulted in a significant reduction in passenger traffic during 2020 as a result of the actions taken by the Mexican, U.S. and other governments and from the broader reduction in demand for air travel caused by the COVID-19 pandemic. Even though we experienced a recovery in passenger traffic during 2021 and 2022, and we have taken action to recover passenger confidence, along with measures taken to preserve liquidity, the adverse effects of COVID-19 on our operations remain uncertain and a possible relapse in air travel demand as a result thereof could have a material adverse effect on the Company’s business, operating results, financial condition and liquidity. For more information, see “Risk Factors—Risks Related to Our Operations— The outbreak of COVID-19 has had, and may continue to have, a negative impact on the global economy and on our business, operations and results.” Revenues by Segment On an airport-by-airport basis, the principal contributors to total revenues in 2022 were the Monterrey airport (Ps.5,256,440 thousand), the Culiacán airport (Ps. 949,712 thousand), the Ciudad Juárez airport (Ps. 866,403 thousand), the Chihuahua airport (Ps. 712,121 thousand) and the Mazatlán airport (Ps.672,761 thousand). Based on contribution to aeronautical and non-aeronautical revenues in 2022, the main contributors were the Monterrey airport (Ps. 3,842,233 thousand), the Culiacán airport (Ps. 821,751 thousand), the Ciudad Juárez airport (Ps. 607,481 thousand), the Chihuahua airport (Ps. 603,438 thousand) and the Mazatlán airport (Ps. 530,507 thousand). Historically, Monterrey, Culiacán and Chihuahua have been our three principal contributors to aeronautical and non-aeronautical revenues, and we expect this trend to continue in the future. Metropolitan Destination At the Monterrey airport, aeronautical revenues increased by 32.5% from Ps.2,371,178 thousand in 2021 to Ps. 3,142,454 thousand in 2022, due primarily to a 45.0% increase in domestic passenger charges, as a result of a 36.8% increase in domestic passenger traffic and an 11.8% increase in the tariff for domestic passenger charges. Non-aeronautical revenues increased by 26.8% from Ps. 551,744 thousand in 2021 to Ps. 699,778 thousand in 2022, due primarily to a 27.3% increase in OMA Carga, a 44.4% increase in food and beverage and a 75.2% increase in revenue from retail operations. The sum of aeronautical and non-aeronautical revenues increased by 31.5% from Ps. 2,922,922 thousand in 2021 to Ps. 3,842,232 thousand in 2022. The sum of aeronautical and non-aeronautical revenues per workload unit increased by 0.3% from Ps.326.7 in 2021 to Ps. 327.8 in 2022, principally due to a higher increase in non-aeronautical revenues and aeronautical revenues, compared to the increase in passenger traffic. TouristDestinations At the Acapulco airport, aeronautical revenues increased by 40.0% from Ps.196,631 thousand in 2021 to Ps. 275,301 thousand in 2022, due primarily to an 38.5% increase in domestic passenger charges, as a result of a 24.1% increase in domestic passenger traffic and a 14.5% increase in the tariff for domestic passenger charges. Non-aeronautical revenues increased by 15.6% from Ps.33,250 thousand in 2021 to Ps. 38,444 thousand in 2022, due primarily to a 38.1% increase in revenues from retail operations, and a 27.1% increase in revenues from car rentals. The sum of aeronautical and non-aeronautical revenues increased by 36.5% from Ps.229,881 thousand in 2021 to Ps. 313,745 thousand in 2022. The sum of aeronautical and non-aeronautical revenues per workload unit increased by 9.3% from Ps.341.7 in 2021 to Ps. 373.6 in 2022, principally due to a higher increase in non-aeronautical revenues and aeronautical revenues, compared to the increase in passenger traffic. 107 At the Mazatlán airport, aeronautical revenues increased by 49.1% from Ps.317,004 thousand in 2021 to Ps. 472,741 thousand in 2022, due primarily to a 38.1% increase in domestic passenger charges, as a result of a 23.4% increase in domestic passenger traffic and a 14.9% increase in the tariff for domestic passenger charges. Non-aeronautical revenues increased by 24.6% from Ps.46,368 thousand in 2021 to Ps. 57,766 thousand in 2022, due primarily to a 75.0% increase in revenues from retail operations, a 50.7% increase in revenues from food and beverage, and a 40.4% increase in revenues from car rentals. The sum of aeronautical and non-aeronautical revenues increased by 46.0% from Ps.363,372 thousand in 2021 to Ps. 530,507 thousand in 2022. The sum of aeronautical and non-aeronautical revenues per workload unit increased by 12.0% from Ps. 321.90 in 2021 to Ps. 360.42 in 2022, due to a higher increase in non-aeronautical revenues and aeronautical revenues, compared to the increase in passenger traffic. At the Zihuatanejo airport, aeronautical revenues increased by 60.1% from Ps.137,018 thousand in 2021 to Ps. 219,411 thousand in 2022, due primarily to a 29.9% increase in domestic passenger charges, as a result of a 19.7% increase in domestic passenger traffic and a 10.5% increase in the tariff for domestic passenger charges. Non-aeronautical revenues increased by 14.1% from Ps.22,127 thousand in 2021 to Ps. 25,255 thousand in 2022, due primarily to a 45.3% increase in revenues from food and beverage, and a 22.0% increase in revenues from retail operations. The sum of aeronautical and non-aeronautical revenues increased by 53.7% from Ps.159,145 thousand in 2021 to Ps. 244,666 thousand in 2022. The sum of aeronautical and non-aeronautical revenues per workload unit increased by 12.3% from Ps.365.0 in 2021 to Ps. 410.0 in 2022, principally due to a higher increase in non-aeronautical revenues and aeronautical revenues, compared to the increase in passenger traffic. Regional Destinations At the Chihuahua airport, aeronautical revenues increased by 30.4% from Ps.419,027 thousand in 2021 to Ps. 546,445 thousand in 2022, due primarily to a 39.1% increase in domestic passenger charges, as a result of a 29.1% increase in domestic passenger traffic and a 9.9% increase in the tariff for domestic passenger charges. Non-aeronautical revenues increased by 17.4% from Ps.48,531 thousand in 2021 to Ps. 56,994 thousand in 2022, due primarily to a 56% increase in revenues from car rentals, and a 106.6% increase in revenues from food and beverage. The sum of aeronautical and non-aeronautical revenues increased by 29.1% from Ps.467,558 thousand in 2021 to Ps. 603,439 thousand in 2022. The sum of aeronautical and non-aeronautical revenues per workload unit increased by 3.1% from Ps.321.5 in 2021 to Ps. 331.4 in 2022, due to a higher increase in non-aeronautical revenues and aeronautical revenues, compared to the increase in passenger traffic. At the Culiacán airport, aeronautical revenues increased by 31.5% from Ps.573,506 thousand in 2021 to Ps. 754,160 thousand in 2022, due primarily to a 38.1% increase in domestic passenger charges, as a result of a 24.6% increase in domestic passenger traffic and a 14.0% increase in the tariff for domestic passenger charges. Non-aeronautical revenues increase by 17.4% from Ps.57,560 thousand in 2021 to Ps. 67,591 thousand in 2022, due primarily to a 52.4% increase in revenues from car rentals, a 32.1% increase in revenue from retail operations, and a 26.2% increase in revenues from food and beverage. The sum of aeronautical and non-aeronautical revenues increased by 30.2% from Ps.631,066 thousand in 2021 to Ps. 821,751 thousand in 2022. The sum of aeronautical and non-aeronautical revenues per workload unit increased by 6.8% from Ps.309.0 in 2021 to Ps. 329.9 in 2022, due to a higher increase in non-aeronautical revenues and aeronautical revenues, compared to the increase in passenger traffic. At the Durango airport, aeronautical revenues increased by 14.6% from Ps.155,408 thousand in 2021 to Ps. 178,142 thousand in 2022, due primarily to a 18.7% increase in domestic passenger charges, as a result of a 9.0% increase in domestic passenger traffic and a 7.5% increase in the tariff for domestic passenger charges. Non-aeronautical revenues decreased by 7.2% from Ps.14,536 thousand in 2021 to Ps. 13,845 thousand in 2022, due primarily to a 39.3% decrease in revenues from communication and services. The sum of aeronautical and non-aeronautical revenues increased by 12.9% from Ps.169,944 thousand in 2021 to Ps. 191,627 thousand in 2022. The sum of aeronautical and non-aeronautical revenues per workload unit increased by 3.6% from Ps.379.5 in 2021 to Ps. 393.0 in 2022, due to a higher increase in non-aeronautical revenues and aeronautical revenues, compared to the increase in passenger traffic. 108 At the San Luis Potosí airport, aeronautical revenues increased by 28.1% from Ps.192,712 thousand in 2021 to Ps. 246,795 thousand in 2022, due primarily to a 21.9% increase in domestic passenger charges, as a result of a 15.9% increase in domestic passenger traffic and a 6.0% increase in the tariff for domestic passenger charges. Non-aeronautical revenues increased by 7.8% from Ps.38,345 thousand in 2021 to Ps. 41,349 thousand in 2022, due primarily to an 26.9% increase in revenues from car rentals, a 57.0% increase in revenues from food and beverage and a 44.3% increase in revenues from retail operations. The sum of aeronautical and non-aeronautical revenues increased by 24.7% from Ps.231,057 thousand in 2021 to Ps. 288,144 thousand in 2022. The sum of aeronautical and non-aeronautical revenues per workload unit increased by 7.7% from Ps.290.3 in 2021 to Ps. 312.8 in 2022, due to a higher increase in non-aeronautical revenues and aeronautical revenues, compared to the increase in passenger traffic. At the Tampico airport, aeronautical revenues increased by 33.6% from Ps.113,178 thousand in 2021 to Ps. 177,992 thousand in 2022, due primarily to a 38.5% increase in domestic passenger charges, as a result of a 24.9% increase in domestic passenger traffic and a 11.0% increase in the tariff for domestic passenger charges. Non-aeronautical revenues increased by 1.2% from Ps.20,054 thousand in 2021 to Ps. 20,297 thousand in 2022, due primarily to a 40.7% increase in revenues from car rentals, and a 190.7% increase in revenues from food and beverage. The sum of aeronautical and non-aeronautical revenues increased by 29.4% from Ps.153,232 thousand in 2021 to Ps. 198,289 thousand in 2022. The sum of aeronautical and non-aeronautical revenues per workload unit increased by 3.9% from Ps.382.8 in 2021 to Ps. 397.7 in 2022, due to a higher increase in non-aeronautical revenues and aeronautical revenues, compared to the increase in passenger traffic. At the Torreón airport, aeronautical revenues increased by 32.0% from Ps.175,268 thousand in 2021 to Ps. 231,357 thousand in 2022, due primarily to a 39.8% increase in domestic passenger charges, as a result of a 27.6% increase in domestic passenger traffic and a 12.1% increase in the tariff for domestic passenger charges. Non-aeronautical revenues increased by 3.0% from Ps.24,450 thousand in 2021 to Ps. 25,193 thousand in 2022, due primarily to a 36.6% increase in revenues from car rentals, a 77.1% increase in revenues from food and beverage and a 41.6% increase in revenues from retail operations. The sum of aeronautical and non-aeronautical revenues increased by 28.5% from Ps.199,718 thousand in 2021 to Ps. 256,550 thousand in 2022. The sum of aeronautical and non-aeronautical revenues per workload unit increased by 3.6% from Ps.362.9 in 2021 to Ps. 375.8 thousand in 2022, due to a higher increase in non-aeronautical revenues and aeronautical revenues, compared to the increase in passenger traffic. At the Zacatecas airport, aeronautical revenues increased by 23.9% from Ps.132,427 thousand in 2021 to Ps. 164,052 thousand in 2022, due primarily to a 22.9% increase in domestic passenger charges, as a result of a 12.6% increase in domestic passenger traffic and a 7.5% increase in the tariff for domestic passenger charges. Non-aeronautical revenues decreased by 9.2% from Ps.14,996 thousand in 2021 to Ps. 13,616 thousand in 2022, due primarily to 59.8% decrease in revenues from leases. The sum of aeronautical and non-aeronautical revenues increased by 20.5% from Ps.147,423 thousand in 2021 to Ps. 177,668 thousand in 2022. The sum of aeronautical and non-aeronautical revenues per workload unit at the Zacatecas airport increased by 4.5% from Ps.391.2 in 2021 to Ps. 408.9 in 2022, due to a higher increase in non-aeronautical revenues and aeronautical revenues, compared to the increase in passenger traffic. Border Destinations At the Ciudad Juárez airport, aeronautical revenues increased by 40.9% from Ps.403,208 thousand in 2021 to Ps. 568,204 thousand in 2022, due primarily to a 43.4% increase in domestic passenger charges, as a result of a 34.3% increase in domestic passenger traffic and a 13.9% increase in the tariff for domestic passenger charges. Non-aeronautical revenues increased by 8.7% from Ps.36,148 thousand in 2021 to Ps. 39,276 thousand in 2022, due primarily to a 60.1% increase in revenues from car rentals. The sum of aeronautical and non-aeronautical revenues increased by 38.3% from Ps.439,356 thousand in 2021 to Ps. 607,480 thousand in 2022. The sum of aeronautical and non-aeronautical revenues per workload unit increased by 4.7% from Ps.280.0 in 2021 to Ps. 293.1 in 2022, due to a higher increase in non-aeronautical revenues and aeronautical revenues, compared to the increase in passenger traffic. 109 At the Reynosa airport, aeronautical revenues increased by 25.0% from Ps.119,950 thousand in 2021 to Ps. 149,878 thousand in 2022, due primarily to a 25.6% increase in domestic passenger charges, as a result of a 22.6% increase in domestic passenger traffic and a 15.0% increase in the tariff for domestic passenger charges. Non-aeronautical revenues decreased by 11.0% from Ps.12,133 thousand in 2021 to Ps. 10,796 thousand in 2022, due primarily to an 11.8% decrease in revenue from other services. The sum of aeronautical and non-aeronautical revenues increased by 21.6% from Ps.132,083 thousand in 2021 to Ps. 160,674 thousand in 2022. The sum of aeronautical and non-aeronautical revenues per workload unit increased by 0.6% from Ps.303.6 in 2021 to Ps. 305.3 in 2022, due to a higher increase in non-aeronautical revenues and aeronautical revenues, compared to the increase in passenger traffic. Hotels At our Terminal 2 NH Collection Hotel, total revenues increased by 39.7% from Ps.171,005 thousand in 2021 to Ps. 238,845 thousand in 2022, due primarily to an increase in the annual average occupancy rate from 63.8% in 2021 to 77.9% in 2022 and a 16.9% increase in the average rates per room in 2022. The revenues of the Terminal 2 NH Collection Hotel are mainly dependent on passenger traffic traveling to and from the Mexico City International Airport. At our Hilton Garden Inn Hotel at the Monterrey airport, total revenues increased by 79.2% from Ps.52,483 thousand in 2021 to Ps. 94,067 thousand in 2022, due primarily to an increase in the annual average occupancy rate from 46.1% in 2021 to 71.8% in 2022. The revenues of the Hilton Garden Inn Hotel are dependent on passenger traffic traveling to and from the Monterrey international airport. Industrial Park At our OMA-VYNMSA Aero Industrial Park, total revenues increased by 19.9% from Ps.68,294 thousand in 2021 to Ps. 81,863 thousand in 2022, due primarily to an increase in the number of leased commercial warehouses. Operating Results Cost of Services Our cost of services increased by 18.1% from Ps.782,107 thousand in 2021 to Ps. 923,638 thousand in 2022, mainly as a result of a 22.7% increase in wages and salaries, and a 14.9% increase in utilities. Additionally, our cost of hotel services increased 58.8% as a result of an increase in operations in both hotels during 2022. As a percentage of the sum of aeronautical and non-aeronautical revenues, cost of services decreased from 11.3% in 2021 to 9.9% in 2022. Major maintenance provision Our major maintenance provision decreased from Ps.512,653 thousand in 2021 to Ps. 472,077 thousand in 2022, due primarily to inflationary updates applied to expected major maintenance works based on the Mexican producer price index (excluding oil). Administrative Expenses Our administrative expenses increased by 13.8% from Ps.586,542 thousand in 2021 to Ps. 667,600 thousand in 2022, due primarily to an increase in payroll expenses as a result of changes to Mexican labor regulations in Mexico during 2021. Technical Assistance Fee Our technical assistance fee, which is paid in U.S. dollars, increased by 33.0% from Ps.133,558 thousand in 2021 to Ps. 177,667 thousand in 2022, as a result of an increase in EBITDA, which is the base for its calculation. Concession Tax Our concession tax increased by 34.0% from Ps.319,906 thousand in 2021 to Ps. 428,717 thousand in 2022, as a result of the increase in aeronautical and non-aeronautical revenues. 110 Depreciation and Amortization Our depreciation and amortization increased 13.1% from Ps.487,230 thousand in 2021 to Ps. 551,200 thousand in 2022, due primarily to an increase in the investment to improve our concessioned assets during 2021. Income from Operations On a consolidated basis, our operating income increased by 47.5% from Ps.4,110,389 thousand in 2021 to Ps. 6,064,486 thousand in 2022, due primarily to a 36.9% increase in total revenue. Our operating margin increased from 47.1% in 2021 to 50.8% in 2022, and considering only the sum of our aeronautical and non-aeronautical revenues, our operating margin increased from 59.3% in 2021 to 65.3% in 2022. Operating Income by Segment The figures presented in this section take into account the intercompany transactions described above under “Item 5. Operating and Financial Review and Prospects—Operating Results—Solidarity Fees.” In addition, the operating cost amounts exclude construction costs, which have been eliminated together with construction revenues. On an airport-by-airport basis, the principal contributors to our operating income in 2022 were the Monterrey airport (Ps. 1,337,766 thousand), the Culiacán airport (Ps. 284,812 thousand), the Ciudad Juárez airport (Ps. 212,342 thousand), the Chihuahua airport (Ps. 210,624 thousand), the Mazatlán airport (Ps. 182,543 thousand), and the Acapulco airport (Ps. 182,543 thousand). Metropolitan Destination Operating income for the Monterrey airport increased by 164.9% from Ps.505,076 thousand in 2021 to Ps. 1,337,765 thousand in 2022, due primarily to an increase of 31.5% in aeronautical and non-aeronautical revenues, which was partially offset by a17.8% increase in operating costs. This increase is mainly driven by the increase in administrative costs and expenses from Ps.391,081 thousand in 2021 to Ps.500,689 thousand in 2022, principally as a result of the increase in concession taxes due to higher revenues, and an increase in payroll. Tourist Destinations Operating income for the Acapulco airport increased by 157.0% from Ps.41,484 thousand in 2021 to Ps. 106,615 thousand in 2022, due primarily to an increase of 36.5% in aeronautical and non-aeronautical revenues, which was partially offset by an increase of 22.0% in operating costs, mainly due to the increase in administrative costs and expenses from Ps.72,553 thousand in 2021 to Ps.87,805 thousand in 2022, principally as a result of the increase in payroll from Ps.17,472 in 2021 to Ps.28,744 in 2022. Operating income for the Mazatlán airport increased by 220.0% from Ps.57,049 thousand in 2021 to Ps. 182,543 thousand in 2022, due primarily to an increase of 46.0% in aeronautical and non-aeronautical revenues, which was offset by an increase of 39.3% in operating costs, mainly due to the increase in major maintenance provisions from Ps. 21,456 thousand in 2021 to Ps. 38,302 thousand in 2022, which was driven by an increase in maintenance works. Operating income for the Zihuatanejo airport increased by 220.6% from Ps. 26,664 thousand in 2021 to Ps. 85,484 thousand in 2022, due primarily to an increase of 53.7% in aeronautical and non-aeronautical revenues and a decrease of 1.9% in operating costs, mainly due to the decrease in major maintenance provision from Ps. 28,325 thousand in 2021 to Ps. 23,033 thousand in 2022, which was driven by a decrease in maintenance requirements. Regional Destinations Operating income for the Chihuahua airport increased by 165.7% from Ps.79,271 thousand in 2021 to Ps. 210,624 thousand in 2022, due primarily to an increase of 29.1% in aeronautical and non-aeronautical revenues, which was partially offset by an increase of 11.0% in operating costs, mainly due to the increase in solidarity fees from Ps.184,429 thousand in 2021 to Ps.240,789 thousand in 2022, which was driven by the increase in aeronautical and non-aeronautical revenues. 111 Operating income for the Culiacán airport increased by 160.9% from Ps.109,180 thousand in 2021 to Ps. 284,813 thousand in 2022, due primarily to an increase of 30.2% in aeronautical and non-aeronautical revenues, which was partially offset by an increase of 8.4% in operating costs mainly due to the increase in costs and administrative expenses from Ps.89,764 thousand in 2021 to Ps.103,844 thousand in 2022, principally as a result of the increase in the concession taxes due to higher revenues and an increase in payroll. Operating income for the Durango airport increased by 106.1% from Ps.31,170 thousand in 2021 to Ps. 64,229 thousand in 2022, due primarily to an increase of 12.8% in aeronautical and non-aeronautical revenues, which was partially offset by an increase of 25.7% in operating costs, which was mainly driven by the increase in major maintenance provision from Ps. 28,509 thousand in 2021 to Ps. 38,244 thousand in 2022, which was driven by an increase in maintenance works. Operating income for the San Luis Potosí airport increased by 183.0% from Ps.35,288 thousand in 2021 to Ps. 99,870 thousand in 2022, due primarily to an increase of 24.7% in aeronautical and non-aeronautical revenues, and a decrease of 7.3% in operating costs, which was mainly driven by the decrease in solidarity fees from Ps.73,275 thousand in 2021 to Ps.60,727 thousand in 2022, principally as a result of an update in the fees’ calculation method. Operating income for the Tampico airport increased by 217.8% from Ps.21,775 thousand in 2021 to Ps. 69,211 thousand in 2022, due primarily to an increase of 29.4% in aeronautical and non-aeronautical revenues, and a decrease of 20.8% in operating costs, mainly driven by the decrease in solidarity fees from Ps.38,191 thousand in 2021 to Ps. 25,774 thousand in 2022, principally as a result of an update in the fees’ calculation method. Operating income for the Torreón airport increased by 171.8% from Ps.32,917 thousand in 2021 to Ps. 89,481 thousand in 2022, due primarily to an increase of 28.5% in aeronautical and non-aeronautical revenues, which was partially offset by an increase of 13.6% in operating costs mainly due to the increase in administrative costs and expenses from Ps.40,934 thousand in 2021 to Ps.51,652 thousand in 2022, which was driven by an increase in payroll from Ps.9,357 in 2021 to Ps.18,616 in 2022. Operating income for the Zacatecas airport increased by 194.0% from Ps.21,138 thousand in 2021 to Ps. 62,141 thousand in 2022, due primarily to an increase of 20.5% in aeronautical and non-aeronautical revenues, which was partially offset by an increase of 25.2% in operating costs mainly due to the increase in costs and administrative expenses from Ps.42,259 thousand in 2021 to Ps.47,795 thousand in 2022, principally as a result of an increase in payroll from Ps.11,764 in 2021 to Ps.19,135 in 2022. Border Destinations Operating income for the Ciudad Juárez airport increased by 186.5% from Ps.74,111 thousand in 2021 to Ps. 212,341 thousand in 2022, due primarily to an increase of 38.3% in aeronautical and non-aeronautical revenues, which was partially offset by an increase of 23.2% in operating costs mainly due to the increase in in costs and administrative expenses from Ps.58,913 thousand in 2021 to Ps.94,156 thousand in 2022, which was driven by the increase in concession tax due to an increase in revenues and in payroll from Ps.12,574 to Ps.23,875. Operating income for the Reynosa airport increased by 129.8% from Ps.24,219 thousand in 2021 to Ps. 55,666 thousand in 2022, due primarily to an increase of 21.6% in aeronautical and non-aeronautical revenues, and a decrease of 0.1% in operating costs mainly due to the decrease in solidarity fees from Ps.31,355 thousand in 2021 to Ps. 15,477 thousand in 2022, as a result of an update in the fees’ calculation method. Hotels Terminal 2 NH Collection Hotel had an operating income of Ps.35,708 thousand in 2021, compared to an operating income of Ps. 66,885 thousand in 2022 due primarily to an increase in revenues. Hilton Garden Inn Hotel had an operating income of Ps.5,789 thousand in 2021, compared to an operating income of Ps. 24,653 thousand in 2022 due primarily to an increase in revenues. 112 Industrial Park Operating income for our OMA-VYNMSA Industrial Park increased from Ps.31,222 thousand in 2021 to Ps. 41,608 thousand in 2022 which reflected an increase in revenues. Exchange Gain (Loss) We had a net exchange loss in 2022 of Ps. 8,871 thousand, as compared to a gain of Ps. 112,617 thousand in 2021 due primarily to the appreciation of the Mexican peso in relation to the U.S. dollar on our U.S. dollar cash balances in 2022 compared to the depreciation of the Mexican peso in 2021 . The exchange rate used to convert our dollar-denominated liabilities from pesos to U.S. dollars was Ps. 19.50 to U.S.$1.00 as of December 31, 2022 and Ps.20.51 to U.S.$1.00 as of December 31, 2021. Our cash balance denominated in U.S. dollar was U.S.21,666 thousand on December 31, 2021 and U.S. 7,414 thousand on December 31, 2022. Net Interest Expense Our net interest expense increased by 97.0% from Ps.387,197 thousand in 2021 to Ps. 762,790 thousand in 2022, as a result of a higher interest expense due to additional debt issued during 2022. Income Taxes We recorded an income tax expense of Ps. 1,375,520 thousand in 2022, as compared to Ps.972,179 thousand in 2021, due primarily to an increase in revenues that resulted in a higher taxable income. Our current income tax was Ps. 1,653,920 thousand in 2022, as compared to Ps. 1,217,748 thousand in 2021, as a result of increased revenues. Our effective tax rate was 25.3% in 2021 and 26.0% in 2022. The effective tax rates in 2021 and 2022 differed from the statutory rate of 30%, as a result of the permanent differences related primarily to inflationary effects for tax purposes. Net Income and Comprehensive Income Our net income increased by 36.8% from Ps.2,863,630 thousand in 2021 to Ps. 3,917,305 thousand in 2022. Comprehensive income attributable to the controlling interest increased by 36.9% from Ps.2,860,262 thousand in 2021 to Ps. 3,915,848 thousand in 2022. Earnings per share were Ps. 10.1017 and earnings per ADS were Ps. 80.8135 in 2022. Results of Operations for the Year Ended December 31, 2021, Compared to the Year Ended December 31, 2020. Consolidated Revenues Total revenues for 2021 were Ps.8,720,010 thousand, 62.5% higher than the Ps.5,367,466 thousand recorded in 2020, primarily as a result of an increase in both aeronautical and non-aeronautical revenues. The sum of aeronautical and non-aeronautical revenues in 2021 increased by 68.5% as compared to 2020. Aeronautical revenues increased by 79.4% to Ps.5,277,728 thousand in 2021, as compared to Ps.2,942,558 thousand in 2020 due primarily to an increase in passenger charges from Ps.2,400,483 thousand in 2020 to Ps.4,592,006 thousand in 2021, attributable to a 62.9% increase in passenger traffic and an increase in aeronautical tariffs. Aeronautical revenues per workload unit in 2021 were Ps.274.1 compared to Ps.245.3 in 2020, an increase of 11.7%. Non-aeronautical revenues increased by 41.2% from Ps.1,171,039 thousand in 2020 to Ps. 1,653,379 thousand in 2021, due primarily to the recovery in revenue generation of our commercial activities and the expansion of the diversification activities. Non-aeronautical revenues per terminal passenger decreased by 13.3%, from Ps.105.9 in 2020 to Ps. 91.7 in 2021, due primarily to a higher growth in terminal passengers, compared to the recovery of non-aeronautical revenues. 113 Revenues from construction services in 2021 were Ps. 1,788,903 thousand, an increase of 42.7% from Ps.1,253,869 thousand recognized in 2020, primarily as a result of the improvements in concessioned assets, principally in the Monterrey, Ciudad Juárez, Tampico and Our revenues are highly dependent on the volume of passenger traffic. The effects of the COVID-19 pandemic resulted in a significant reduction in passenger traffic during 2020 and a recovery during 2021, as a result of the actions taken by the Mexican, U.S. and other governments and from the broader reduction in demand for air travel caused by the COVID-19 pandemic. Even though we have taken action to recover passenger confidence, along with measures taken to preserve liquidity, the ongoing adverse effects of COVID-19 on our operations remain uncertain and the continuation of reduced air travel demand could have a material adverse effect on the Company’s business, operating results, financial condition and liquidity. For more information, see “Risk Factors—Risks Related to Our Operations— The outbreak of COVID-19 has had, and may continue to have, a negative impact on the global economy and on our business, operations and results.” Revenues by Segment On an airport-by-airport basis, the principal contributors to total revenues in Metropolitan Destination At the Monterrey airport, aeronautical revenues Tourist Destinations At the Acapulco airport, aeronautical revenues 114 At the Mazatlán airport, aeronautical revenues increased by 50.1% from Ps.211,184 thousand in 2020 to Ps.317,004 thousand in 2021, due primarily to a 94.0% increase in domestic passenger charges, as a result of a 65.1% increase in domestic passenger traffic and a 9.3% increase in the tariff for domestic passenger charges. Non-aeronautical revenues increased by 23.9% from Ps.37,431 thousand in 2020 to Ps.46,368 thousand in 2021, due primarily to a 45.6% At the Zihuatanejo airport, aeronautical revenues increased by 38.9% from Ps.98,645 thousand in 2020 to Ps.137,018 thousand in 2021, due primarily to a 194.6% increase in domestic passenger charges, as a result of a 76.2% increase in domestic passenger traffic and a 6.1% increase in the tariff for domestic passenger charges. Non-aeronautical revenues increased by 20.5% from Ps.18,360 thousand in 2020 to Ps.22,127 thousand in 2021, due primarily to a 918% increase in leasing of space, and a 33.5% increase in revenues from car rentals. The sum of aeronautical and non-aeronautical revenues increased by 36.0% from Ps.117,005 thousand in 2020 to Ps.159,145 thousand in 2021. The sum of aeronautical and non-aeronautical revenues per workload unit decreased by 0.7% from Ps.367.4 in 2020 to Ps.365.0 in 2021, principally due to a lower increase in non-aeronautical revenues and aeronautical revenues, compared to the increase in passenger traffic. Regional Destinations At the Chihuahua airport, aeronautical revenues increased by 94.2% from Ps.215,728 thousand in 2020 to Ps.419,027 thousand in 2021, due primarily to a 107.6% increase in domestic passenger charges, as a result of a 63.9% increase in domestic passenger traffic and a 9.5% increase in the tariff for domestic passenger charges. Non-aeronautical revenues increased by 5.4% from Ps.46,049 thousand in 2020 to Ps.48,531 thousand in 2021, due primarily to a 37.8% increase in revenues from leasing of space, and a 28.6% increase in revenues from car rentals. The sum of aeronautical and non-aeronautical revenues increased by 78.6% from Ps.261,777 thousand in 2020 to Ps.467,558 thousand in 2021. The sum of aeronautical and non-aeronautical revenues per workload unit increased by At the
At the Durango airport, aeronautical revenues increased by 95.4% from Ps.79,515 thousand in 2020 to Ps.155,408 thousand in 2021, due primarily to a 134.2% increase in domestic passenger charges, as a result of a 62.6% increase in domestic passenger traffic and a 9.3% increase in the tariff for domestic passenger charges. Non-aeronautical revenues increase by 31.2% from Ps.11,083 thousand in 2020 to Ps.14,536 thousand in 2021, due primarily to a 373.1% increase in revenues from leasing of spaces, and a 25.0% increase in revenues from car rentals. The sum of aeronautical and non-aeronautical revenues increased by 87.6% from Ps.90,598 thousand in 2020 to Ps.169,944 thousand in 2021. The sum of aeronautical and non-aeronautical revenues per workload unit increased by 14.3% from Ps.332.1 in 2020 to Ps.379.5 in 2021, due to a higher increase in non-aeronautical revenues and aeronautical revenues, compared to the increase in passenger traffic. 115 At the San Luis Potosí airport, aeronautical revenues increased by 78.4% from Ps.108,045 thousand in 2020 to Ps.192,712 thousand in 2021, due primarily to a 104.5% increase in domestic passenger charges, as a result of a 63.3% increase in domestic passenger traffic and a 4.3% increase in the tariff for domestic passenger charges. Non-aeronautical revenues increased by 34.5% from Ps.28,508 thousand in 2020 to Ps.38,345 thousand in 2021, due primarily to an 82.4% increase in revenues from leasing of spaces, a 13.3% increase in revenues from car rentals and a 25.0% increase in revenues from food and beverage. The sum of aeronautical and non-aeronautical revenues increased by 69.2% from Ps.136,553 thousand in 2020 to Ps.231,057 thousand in 2021. The sum of aeronautical and non-aeronautical revenues per workload unit increased by 12.6% from Ps.258.0 in 2020 to Ps.290.3 in 2021, due to a higher increase in non-aeronautical revenues than aeronautical revenues, compared to the At the At the Torreón airport, aeronautical revenues increased by 84.7% from Ps.94,892 thousand in 2020 to Ps.175,268 thousand in 2021, due primarily to a 91.7% increase in domestic passenger charges, as a result of a 61.7% increase in domestic passenger traffic and a 9.3% increase in the tariff for domestic passenger charges. Non-aeronautical revenues increased by 40.3% from Ps.17,425 thousand in 2020 to Ps.24,450 thousand in 2021, due primarily to a 121.9% increase in revenues from leasing of spaces, a 19.3% increase in revenue from car rentals and a 46.1% increase in revenues from retail operations. The sum of aeronautical and non-aeronautical revenues increased by 77.8% from Ps.112,317 thousand in 2020 to Ps.199,718 thousand in 2021. The sum of aeronautical and non-aeronautical revenues per workload unit increased by 6.2% from
At the
Border Destinations At the Ciudad Juárez airport, aeronautical revenues 116 At the Reynosa airport, aeronautical revenues increased by 106.8% from Ps.58,010 thousand in 2020 to Ps.119,950 thousand in 2021, due primarily to a 106.2% increase in domestic passenger charges, as a result of a 83.8% increase in domestic passenger traffic and a 9.3% increase in the tariff for domestic passenger charges. Non-aeronautical revenues increased by 5.5% from Ps.11,500 thousand in 2020 to Ps.12,133 thousand in 2021, due primarily to a 27.8% increase in revenues from car rentals, a 172.5% increase in revenue from food and beverage. The sum of aeronautical and non-aeronautical revenues increased by 90.0% from Ps.69,510 thousand in 2020 to Ps.132,083 thousand in 2021. The sum of aeronautical and non-aeronautical revenues per workload unit increased by
Hotels At our Terminal 2 NH Collection Hotel, total revenues At our Hilton Garden Inn Hotel at the Monterrey airport, total revenues
Industrial Park At our OMA-VYNMSA Aero Industrial Park, total revenues increased by Operating Results Cost of Services Our cost of services Major maintenance provision Our major maintenance provision increased from Administrative Expenses Our administrative expenses Technical Assistance Fee Our technical assistance fee, which is paid in U.S. dollars,
Concession Tax Our concession tax Depreciation and Amortization Our depreciation and amortization increased Income from Operations On a consolidated basis, our operating income Operating Income by Segment The figures presented in this section take into account the intercompany transactions described above under “Item 5. Operating and Financial Review and Prospects—Operating Results—Solidarity Fees.” In addition, the operating cost amounts exclude construction costs, which have been eliminated together with construction revenues. On an airport-by-airport basis, the principal contributors to our operating income in Metropolitan Destination Operating income for the Monterrey airport Tourist Destinations Operating income for the Acapulco airport Operating income for the Mazatlán airport Operating income for the Zihuatanejo airport
Regional Destinations Operating income for the Chihuahua airport Operating income for the Culiacán airport Operating income for the Durango airport Operating income for the San Luis Potosí airport increased by Operating income for the Tampico airport Operating income for the Torreón airport Operating income for the Zacatecas airport 119 Border Destinations Operating income for the Ciudad Juárez airport Operating income for the Reynosa airport
Hotels
Industrial Park Operating income for our OMA-VYNMSA Industrial Park increased from Exchange Gain (Loss) We had a net exchange gain in Net Interest Expense Our net interest expense increased by Income Taxes We recorded an income tax expense of Ps. Our current income tax Our effective tax rate was 120 Net Income and Comprehensive Income Our net income
Liquidity and Capital Resources
Sources of Liquidity Historically, we covered all of our liquidity needs, including our obligations under the Master Development Programs, with cash flows generated by the operations of our subsidiaries and incurred no significant debt. We modified our strategy to finance our operations and incorporated debt as a means to fund capital investments. In the future, we hope to continue covering our liquidity needs with cash flows generated by the operations of our subsidiaries, with a reduction and control of costs and operational improvements to maximize profitability, and with the incurrence of additional debt to finance expenditures pursuant to our Master Development Program obligations, other capital expenditures and working capital, and make our capital structure more efficient. In November 2020, we received approval from the Ministry of Infrastructure, Communications and Transportation, through the AFAC, of the Master Development Program for each of our thirteen airports, corresponding to the 2021-2025 period. Total investments approved amount to Pursuant to our Master Development Programs, in Expected Investments Under Master Development Programs by Category for
Our committed investments pursuant to our Master Development Programs for
Cash Flows Our treasury monitors cash flows on a daily, monthly and annual basis to plan and determine the management, sources and uses of resources, as well as to meet our capital and debt service obligations at all times, and to improve our working capital and capital structure. As of December 31, In In 2021, we generated Ps.4,446,844 thousand in cash flows from operating activities of which In 2020, we generated Ps.1,303,478 thousand in cash flows from operating activities of which Ps.2,569,574 thousand was directly from operating activities and was offset mainly by Ps.747,867 thousand of income tax paid,
Short-Term Indebtedness In December 2021, we obtained short-term loans with Banco Nacional de México, S.A., for Ps.1,000,000 thousand at a variable rate of 28-day TIIE plus 100 basis points, HSBC México, S.A., for Ps.900,000 thousand at a variable rate of 91-day TIIE plus 50 basis points and Banco Santander México, S.A., for Ps.1,000,000 thousand at a variable rate of 28-day TIIE plus an average of 155 basis points, all of which were prepaid on March 31,2022. Proceeds were used to capitalize the group’s subsidiaries, for working capital and to strengthen the company’s liquidity. 122 In December 2022, we obtained short-term loans with (i) Banco Nacional de México, S.A., for a principal amount of Ps.200,000 thousand at a variable rate of 28-day TIIE plus 100 basis points, (ii) with HSBC México, S.A., for a principal amount of Ps.600,000 thousand at a variable rate of 91-day TIIE plus 60 basis points, and (iii) with Banco Santander México, S.A., for a principal amount of Ps.200,000 thousand at a variable rate of 28-day TIIE plus 140 basis points, all of which were prepaid on March 10,2023. Proceeds were used to capitalize the group’s subsidiaries, for working capital purposes and to increase the company’s liquidity. As of April Long-Term Indebtedness We, through seven of our airports, maintained lines of credit with Private Export Funding Corporation (backed by Ex-Im Bank) for U.S.$20.4 million, pursuant to agreements dated October 15, 2010 and October 14, 2011, maturing on December 21, 2021. As of December 31, 2022, the balance of credit was zero. These lines of credit were guaranteed by checked-baggage inspection equipment acquired by the airports. The interest rate was three-month LIBOR plus 125 basis points. On March 26, 2013, we issued Ps.1,500,000 thousand in 10-year peso-denominated notes (certificados bursátiles) that were registered with the Mexican National Registry of Securities and trade on the Mexican market pursuant to an indenture into which we entered in 2011 (the “2011 Indenture”). Interest payments are made on a semiannual basis at a fixed annual interest rate of 6.47%. The principal amount will be repaid at maturity on March 14, 2023. The Acapulco, Ciudad Juárez,
On June 16, 2014, OMA issued Ps.3,000,000 thousand in seven-year notes (certificados bursátiles) at a fixed rate of 6.85% that were registered with the Mexican National Registry of Securities. The purpose of the issuance was to fix interest payments and to extend the maturity profile of debt by prepaying the Ps.1,300,000 thousand in floating-rate notes issued under the 2011 Indenture, and to finance the Master Development Programs and strategic investments. The floating-rate On April 16, 2021, OMA issued Ps.1,000,000 thousand in five-year green notes (certificados bursátiles verdes) that were registered with the Mexican National Registry of Securities and trade on the Mexican market (“the Green Notes”) pursuant to an indenture into which we entered on that date (the “2021 Green Variable Rate Notes Indenture”). Interest payments are made every 28 days at a variable annual interest rate of TIIE 28 + 0.75%. The principal amount will be repaid at maturity on April 10, 2026. The Monterrey, Culiacán and Chihuahua airports act as guarantors under these notes. The purpose of the issuance is to finance green investments pursuant to our Master Development Programs for 2021-2025. The
123
On April 16, 2021, OMA issued Ps.2,500,000 thousand in seven-year notes (certificados bursátiles) that were registered with the Mexican National Registry of Securities and trade on the Mexican market pursuant to an The principal covenants and the events of default under the 2021 Green Variable Rate Notes Indenture and the 2021 Fixed Rate Notes Indenture are described below:
Events of Default
124
On March 31, 2022, OMA issued Ps.1,700,000 thousand in five-year sustainability-linked notes (certificados bursátiles) that were registered with the Mexican National Registry of Securities and trade on the Mexican market pursuant to an indenture into which we entered on that date (the “2022 Sustainability-Linked Variable-Rate Notes Indenture”). Interest payments are made every 28 days at a variable annual interest rate of 28-day TIIE plus 14 basis points. The principal amount will be repaid at maturity on March 25, 2027. The Monterrey, Culiacán and Chihuahua airports act as guarantors under these notes. The purpose of the issuance was to partially prepay the Ps.2,700,000 thousand outstanding on our short-term loans. The notes received ratings of Aaa.mx by Moody’s and AAA(mex) by Fitch Ratings at the moment of the issuance. On March 31, 2022, OMA issued Ps.2,300,000 thousand in seven-year sustainability-linked notes (certificados bursátiles) that were registered with the Mexican National Registry of Securities and trade on the Mexican market pursuant to an Indenture into which we entered on that date (the 2022 Sustainability-Linked Fixed-Rate Notes Indenture). Interest payments are made on a semiannual basis at a fixed annual interest rate of 9.35%. The principal amount will be repaid at maturity on March 22, 2029. The Monterrey, Culiacán and Chihuahua airports act as guarantors under these notes.The purpose of the issuance was to partially prepay the Ps.2,700,000 thousand outstanding on our short-term loans., fund our committed investments pursuant to our Master Development Program and for other corporate purposes. The notes received ratings of Aaa.mx by Moody’s and AAA(mex) by Fitch Ratings at the moment of the issuance. The principal covenants and the events of default under the indenture pursuant to which these notes (and the 2022 Sustainable-Linked Variable Rate Notes Indenture) were issued are substantially similar to those under the 2021 Indenture.
125
On March 10, 2023, OMA issued Ps.640,000 thousand in 3.4-year sustainability-linked notes (certificados bursátiles) that were registered with the Mexican National Registry of Securities and trade on the Mexican market pursuant to an Indenture into which we entered on that date (the 2023 Sustainability-Linked Variable-Rate Notes Indenture). Interest payments are made every 28 days at a variable annual interest rate of 28-day TIIE plus 22 basis points . The principal amount will be repaid at maturity on July 24, 2026. The Monterrey, Culiacán and Chihuahua airports act as guarantors under these notes.The purpose of the issuance was to partially prepay the Ps.1,200,000 thousand principal amount outstanding under our short-term loans. The notes received ratings of Aaa.mx by Moody’s and AAA(mex) by Fitch Ratings at the moment of the issuance. The issuance is based on the Sustainability-Linked Framework issued in March 2022, and in the event sustainability objectives are not met by 2025, an additional 0.2% of the principal amount of the notes On March 10, 2023, OMA issued Ps.2,560,000 thousand in 7-year sustainability-linked notes (certificados bursátiles) that
As of the date of this annual report, we are in compliance with these covenants, and no event of default has
Total Indebtedness The following table sets forth our total indebtedness at the closing of each of the periods indicated:
Derivative Financial Instruments As of December 31, 126 Other Restrictions As of December 31, Principal Treasury Policies and Procedures The operation of the treasury department is based on various policies, with which we were in compliance as of December 31,
127
Capital Management Policy We have developed a Capital Management Policy aimed at reaching and maintaining a solid capital base, which allows us to achieve our growth objectives, comply with
128
Our Board of Directors, with
Principal Uses of Capital Resources Our capital resources are mainly used to comply with the Master Development Programs (which include capital expenditures, major maintenance and other expenditures) and to invest in other capital expenditures necessary to accommodate the growth of our business. The following table details our actual expenditures made during
In 2020, 2021, 2022, we spent Ps.1,401,483 thousand, Ps.1,910,541 thousand and Ps.2,887,287 thousand, respectively, on capital expenditures, principally in connection with works to improve our terminal and operating infrastructure. 129 We currently intend to fund our commitments pursuant to the Master Share Repurchase Program
Our share repurchase program started in October 2007. The operation of our share repurchase program generates cash inflow and cash outflow depending on the nature of the transaction (buying or selling). For the year ended December 31,
Critical Accounting Policies
Item 6. Directors, Senior Management and Employees Directors Our Board of Directors is responsible for the management of our business. Pursuant to our bylaws, our Board of Directors must consist of an odd number of directors determined at an ordinary general meeting of shareholders and is required to have at least 11 members. Our Board of Directors currently consists of 11 directors, each of whom is elected or re-elected at the annual shareholders’ meeting. Under the Mexican Securities Law (Ley del Mercado de Valores) and our bylaws, at least 25% of our directors must be independent. Our bylaws provide that (i) each person (or group of persons acting together) holding 10% of our capital stock in the form of Series B shares is entitled to designate one director, (ii) the holders of Series BB shares are entitled to elect three directors and their alternates pursuant to our bylaws, the Participation Agreement and the Technical Assistance Agreement, and (iii) the remaining members of the Board of Directors are to be elected by the holders of our capital stock (both the Series BB shares and the Series B shares, including those Series B holders that were entitled to elect a director by virtue of their owning 10% of our capital stock).
At the shareholders’ meeting held on July 7, 2020, our shareholders approved the Annual Report for 2019 prepared by the Chief Executive Officer and the Audited Consolidated and Non-Consolidated Financial Statements for the year ended 2019; the Reports of the Presidents of the Audit Committee and the Corporate Practices, Finance, Planning and Sustainability Committee; the appointment of Alejandro Ortega Aguayo and Federico Patiño Márquez as independent members of the Board of Directors, replacing Alberto Felipe Mulás Alonso and Felipe Duarte Olvera; the appointment of Ricardo Maldonado Yáñez as president of the Corporate Practices, Finance; Planning and Sustainability 130 Committee; the re-election of all other members of the Board of Directors; the application of results of the Company, as well as an increase in the share repurchase reserve to At the shareholders’ meeting held on April 21, 2021, our shareholders approved the Annual Report for 2020 prepared by the Chief Executive Officer and the Audited Consolidated and Non-Consolidated Financial Statements for the year ended 2020; the Reports of the Presidents of the Audit Committee and the Corporate Practices, Finance, Planning and Sustainability Committee; the reelection of the members of the Board of Directors and its Committees; the application of results of the Company, as well as At the shareholders’ meeting held on April 22, 2022, our shareholders approved the Annual Report for 2021 prepared by the Chief Executive Officer and the Audited Consolidated and Non-Consolidated Financial Statements for the year ended 2021; the Reports of the Presidents of the Audit Committee and the Corporate Practices, Finance, Planning and Sustainability Committee; the reelection of the members of the Board of Directors and its Committees; the application of results of the Company, as well as Ps.1,500 million for the share repurchase reserve and the use of up to such amount to repurchase Series B shares until the next annual shareholders’ meeting approved the 2022 results. At the shareholders’ meeting held on November 30, 2022, our shareholders approved and/or were notified of (i) the resignation submitted by Diego Quintana Kawage, Guadalupe Phillips Margain, Rodrigo Antonio Quintana Kawage, José Bernardo Casas Godoy, Próspero Antonio Ortega Castro and Christian Whamond as members of the Board of Directors, (ii) the appointment of Nicolas Notebaert, Olivier Mathieu and Rémi Maumon de Longevialle as members of the Board of Directors appointed by the Series “BB” shareholders, and (iii) the appointment of Pierre-Hugues Schmit, Eric Delobel and Emmanuelle Huon as new members of the Board of Directors by the shareholders of the Series “B” shares. At the shareholders’ meeting held on April 21, 2023, our shareholders approved payment of a cash dividend of Ps.2,300 million, to be paid in two installments no later than June 30, 2023 and September 30, 2023, respectively; the Annual Report for 2022 prepared by the Chief Executive Officer and the Audited Consolidated and Non-Consolidated Financial Statements for the year ended 2022; the Reports of the Presidents of the Audit Committee and the Corporate Practices, Finance, Planning and Sustainability Committee; the reelection of the members of the Board of Directors and its Committees, as well as the appointment of Alejandro Ortega Aguayo as Chairman of the Audit Committee in lieu of Martin Werner Wainfeld; the application of results of the Company, as well as Ps.1,500 million for the share repurchase reserve and the use of up to such amount to repurchase Series B shares until the next annual shareholders’ meeting approves the
The following table lists the members of the Board of Directors effective on April
* Appointed by SETA
Rémi Maumon de Longevialle. Mr. Rémi Maumon de Longevialle is the current Chief Financial Officer of VINCI Airports. Since 2021, he is also monitoring VINCI Airports' involvement in Costa Rica. He began his career as a member of the PPP and Project Finance team at PWC in Paris for two years. He joined VINCI in 2012 as a Project Manager in the Structured Finance team of VINCI Concessions, where he participated in the structuring and negotiation of the financing of major infrastructure projects in Europe and Latin America (freeways, railroads and stadiums). In 2014, Mr. Rémi Maumon de Longevialle joined the Development team of VINCI Airports as Project Manager where, from 2015 to 2016, he successfully managed the Olivier Mathieu. Mr. Olivier Mathieu serves since 2012 as the Executive Vice President of VINCI Concessions. He began his career in Eric Delobel. Mr. Eric Delobel is the Chief Technical Officer of VINCI Airports since 2019 and a member of the VINCI Airports Executive Committee. Since 2021, Mr. Eric Delobel is also responsible for coordinating VINCI Concessions' Engineering Department (pavements and earthworks) and is in 132 from Nantes Atlantique. Between 2016 and 2019, Mr. Eric Delobel was Chief Executive Officer of Cambodia Airports, the
Pierre-Hugues Schmit. Mr. Pierre-Hugues Schmit joined VINCI Airports in June 2017 where he Emmanuelle Huon. Ms. Emmanuelle Huon joined VINCI Airports in July 2015 as Senior Legal Counsel and has been Legal Manager at VINCI Concessions since 2021. She has an extensive experience working in the field of airports and highways concessions projects and utilities projects. She led the legal tranche of the acquisitions of Aeropuertos Dominicanos Siglo XXI (Aerodom) in Dominican Republic and Airports Worldwide portfolio in the US, Costa Rica and Belfast. She previously worked as Senior Legal Counsel at Airbus Defence and Space (2013 -2015) and at Degrémont- SUEZ in the field of water and waste treatment concessions projects (2005 -2013). Ms. Huon holds a Ricardo Maldonado Yáñez. Mr. Ricardo Maldonado Yáñez is a partner at the law firm Mijares, Angoitia, Cortés y Fuentes,S.C.
Alejandro Ortega Aguayo. Mr. Alejandro Ortega obtained his bachelor’s degree in law from the Instituto Tecnológico Autónomo de México. He later obtained his master’s degree in business administration at Harvard Business School. In 1991 he joined the law firm Barrera, Siqueiros y Torres Landa, S.C. (currently Hogan Lovells). In 1997, he joined the Investment Banking firm of Donaldson Lufkin & Jenrette in New York City. In 2002 he returned to Mexico City as Vice President of UBS Investment Bank. He acted as head of Investment Banking in Mexico for UBS until 2011, when he joined Morgan Stanley as head of Investment Banking for Mexico, where he gained significant experience in industries such as infrastructure, energy Martin Werner Wainfeld. Dr. Martin Werner Wainfeld is the founding partner of DD3 Capital Partners, an investment and advisory firm based in Mexico City. Dr. Werner was co-head of the Investment Bank for Latin America and Director General of Goldman Sachs in Mexico from 2000 to 2016. Previously, he was Undersecretary of Finance in Mexico for the period 1997-1999. He was in charge of the restructuring of Mexico’s external public debt after the 1994- 1995 financial crisis. Dr. Werner has 16 years’ experience in investment banking and participated in more than ninety merger and acquisition and financing transactions. He is a member of the Board of Directors of Betterware and until March 29, 2021 he was member of the Board of Directors of Grupo Comercial Chedraui. He is a member of the 133 Advisory Board of the Yale University Business School. Dr. Werner holds an economics degree from the Instituto Tecnológico Autónomo de México (ITAM) and a Ph.D. in economics from Yale University. Luis Solórzano Aizpuru. Mr. Solorzano is Chief Executive Officer and Founding Partner of Acamar Partners. Mr. Solorzano has over 20 years of investment experience across various sectors. Mr. Solorzano has served on the boards of various public and private companies, including Shift Technologies, CarLotz, Inc., Acamar Partners Acquisition Corp II, Grupo Aeroportuario del Centro Norte, Acamar Partners Acquisition Corp I, Dufry, Latin American Airport Holdings, Aerodom, InverCap Holdings, and Viakem. Mr. Solorzano began his career with BankBoston Capital, where he spent 4 years making private equity investments and corporate loans across Latin America. In 2001, Mr. Solorzano joined Advent International becoming a partner and Managing Director in 2008. He served as Chairman of the Latin America’s Investment Committee from 2013 to 2017. During his tenure at Advent, Mr. Solorzano participated in various investments and management activities encompassing various of Advent’s private equity funds. He played a leading role in 15 investment transactions in various sectors, including retail and consumer, financial services, industrials, information technology and infrastructure. Mr. Solorzano also played a significant role in supporting portfolio companies in the design and implementation of various strategic, operating and financial value creation initiatives. Mr. Solorzano served as Chief Executive Officer and director of Acamar Partners Acquisition Corp I from its inception in November 2018 until the successful completion of its business combination with CarLotz, Inc., a leading consignment-to-retail used vehicle marketplace. Mr. Solorzano graduated with a degree in Economics (cum laude) from the Instituto Tecnológico Autónomo de Mexico Federico Patiño Márquez. Mr. Patiño has more than 30 years of experience in the financial sector. From 2015 to 2018 he was Chief Executive Officer of Grupo Aeroportuario de la Ciudad de Mexico S.A de C.V. (GACM) and previously served as Chief Financial Officer of GACM since 2014. During this period, he was responsible for the financing of the New Airport project and the “Terminal 2” of Mexico City’s International Airport. From 1980 to 2008, he worked at Nacional Financiera, S. N. C., Institución de Banca de Desarrollo (NAFIN), where he held several positions including, among others, General Director of Credit, General Director of Treasury, General Director of Development and General Director of Investment Banking. He was responsible for the creation of Corporación Mexicana de Inversiones de Capital (CMIC), a private equity fund created in 2006, by the Mexican development bank. CMIC invests in private equity funds that fund Mexican companies. Federico also was the founder of Fondo Nacional de Infraestructura (FONADIN) at Banco Nacional de Obras y Servicios Públicos, S.N.C. (BANOBRAS). Executive Officers Pursuant to our bylaws, the holders of Series BB shares are entitled to nominate and propose the removal of our chief executive officer and to appoint and remove our chief financial officer, our chief operating officer and our commercial director. The Series BB Directors are also entitled to appoint half of our executive officers, which appointment must be made in accordance with the Technical Assistance Agreement and the guidelines approved by our Board of Directors.
The following table lists our executive officers, their current position and their date of appointment as an executive officer.
134 Ricardo Dueñas Espriu has served as our Chief Executive Officer since November 2018. Prior to joining us, Mr. Dueñas served in various capacities in the airport and infrastructure sectors, including as Chief Financial Officer of Grupo Aeroportuario de la Ciudad de México and as an advisor in infrastructure projects at the Ministry of Communications and Transportation. As Chief Financial Officer of Grupo Aeroportuario de la Ciudad de México, he was responsible for securing more than eight billion U.S. dollars in financing. Previously, he worked for JP Morgan’s Investment Banking Division in London focusing on emerging markets. Prior to that, he worked as an analyst for economic research at the Central Bank of Mexico. He has also worked as a hedge fund analyst based in New York, as an advisor to the Mexican Delegation to the OECD in Paris and as a part-time lecturer at Instituto Tecnológico Autónomo de México (ITAM). In 2004, he received the IMEF National Prize of Economics. He has also been a board member in several companies in the transportation sector. Mr. Dueñas Espriu holds an economics degree, cum laude, from ITAM, a Master’s in Business Administration from Harvard Business School and a Master’s in Public Administration from Harvard Kennedy School. Ruffo Pérez Pliego del Castillo has served as our Chief Financial Officer since April 3, 2018. Mr. Pérez Pliego has more than 20 years of experience in the areas of corporate finance, debt and equity placements, and mergers and acquisitions. Prior to joining us, Mr. Pérez Pliego served as Chief Financial Officer and Chief Executive Officer of Latin American Airports Holdings Ltd., which, during his tenure, owned Aerodom, a concessionaire of six airports in the Dominican Republic, and Inmobiliaria Fumisa, which leased substantially all the commercial spaces in the international wing of Terminal 1 of the Mexico City International Airport. Previously, Mr. Pérez Pliego worked for nine years in the investment banking division of Credit Suisse. Mr. Pérez Pliego holds a B.A. from Instituto Tecnológico Autónomo de México (ITAM) and a Master’s in Business Administration from Harvard Business School.
Adriana Díaz Galindo has served as our General Counsel since June 2018. Prior to joining us, Ms. Díaz Galindo was Legal Director of Finance and Administration at Grupo Televisa and Legal Director for Interprotección, Agente de Seguros y de Fianzas, S.A. de C.V., among other positions. Ms. Díaz Galindo has a law degree from the Universidad Iberoamericana and has Enrique Navarro Manjarrez has served the Company since May 2004. Prior to his appointment as Director of Airport Operations, Mr. Navarro Manjarrez served as Director of the Monterrey airport since 2013. Previously, he was the Administrator of the airports in Ciudad Juárez and Mazatlán. Prior to joining OMA, Mr. Navarro Manjarrez was promotions manager for Casa de Bolsa Probursa, Director of Investments and Projects for Grupo Chihuahua, Regional Administrator for Tax Audit in the Secretariat of Finance and Public Credit, and Director of Economic Studies for the government of the state of Nuevo León. He holds a Bachelor’s degree in economics from the Universidad Anáhuac, a Master’s in Economic Development and Corporate Finance from Boston University, and has completed studies for a doctorate in business administration at the Swiss Management Center University. In addition, he has taken courses in airport management and development offered by Aéroports de Paris and has a diploma in senior management from the IPADE business school. He has taught courses at the Universidad Anáhuac, the Instituto Tecnológico y de Estudios Superiores de Monterrey and the Universidad de Monterrey. Eliseo Héctor Hugo Cortés 135 completed a variety of specialized courses in airports operations, security, safety, maintenance and development. He is a member of the American Association of Airport Executives. Enrique Chacón Tinajero has served as our Infrastructure and Maintenance Director since June 2018. Prior to joining the Company, Mr. Chacón Tinajero was director of urban construction projects at Grupo ICA from 2011 to 2018. With more than 20 years of experience in the design, construction, and management of infrastructure, Mr. Chacón Tinajero began his professional career in 1998 at ICA, holding positions in the International and Urban Construction divisions. He is a civil engineering graduate of the Universidad Autónoma de Chihuahua and has taken courses for a Masters in Construction Management at the Universidad Iberoamericana. In addition, he is certified by the American Concrete Institute as a Supervising Inspector for concrete works and has taken numerous specialized courses in the construction field. The business address of our directors and executive officers is our principal executive headquarters. Compensation of Directors and Executive Officers For
None of our directors or executive officers are entitled to benefits upon termination under their service contracts with us, except for what they are entitled to receive upon termination pursuant to Mexican Federal Labor Law. Additionally, we have not made personal loans to our directors or executive officers and do not have a stock option plan or any equivalent plan.
Board of Directors’ Supporting Committees
The Mexican Securities Law and our bylaws provide that the Board of Directors may receive assistance from one or more Special Committees created directly by the Board of Directors or by the chief executive officer in order to carry out the functions that the Mexican Securities Law and our bylaws assign to the Board of Directors with respect to audit and corporate practices. Considering the importance and breadth of the matters overseen by our Special Committee, at the recommendation of our Board of Directors, at our general shareholders’ meeting held on April 16, 2013, the establishment of two committees was approved: an Audit Committee and a Corporate Practices, Finance, Planning and Sustainability Committee. The committees provide relevant support to the Board of Directors so that the Board of Directors may make necessary decisions. Our bylaws provide that the Committee or Committees responsible for the Audit and Corporate Practices functions will consist exclusively of Independent Directors and that a minimum of three members shall be appointed by the Board of Directors based on a recommendation from the Chairman of the Board of Directors. Holders of the Series BB shares have the right to propose the appointment of at least one member. The Chairman of the Board of Directors will propose at each shareholders’ meeting one of the Independent Directors as a Chairman of the Audit Committee and the Corporate Practices, Finance, Planning and Sustainability Committee, and such candidate should fulfill the requirements of independence, experience, abilities and professional prestige in accordance with Articles 25, 26 and 43 of the Mexican Securities Law. If we are controlled by a shareholder or group of shareholders representing 50% or more of our capital stock, the committee that conducts the Corporate Practices functions will be formed by a majority of Independent Directors.
Audit Committee The Audit Committee, which is responsible for the Audit Functions and consists exclusively of Independent Directors, has the following responsibilities: (i) selecting the external auditor of the Company, recommending to the Board of Directors the appointment of such external auditor and providing an opinion about any removal of such external auditor, (ii) supervising our external auditors and analyzing their reports, (iii) analyzing and supervising the preparation of our financial statements, (iv) informing the board of our internal controls and their adequacy, (v) requesting reports from our executive officers whenever the committee deems appropriate, providing assistance to our Board of Directors in the preparation of the reports containing the main accounting and information guidelines used for the preparation of the financial information and assistance to our Board of Directors in the preparation of the report on the operations and activities in which the Board of Directors had intervened pursuant to the Mexican Securities Law, (vi) informing the Board of Directors of any irregularities that it may encounter, (vii) receiving and analyzing recommendations and observations made by the shareholders, members of the Board of Directors, executive officers, our external auditors or any third party and taking the necessary actions, (viii) calling shareholders’ meetings, (ix) overseeing the execution of the shareholders’ and directors’ resolutions by the chief executive officer in accordance with the instructions provided thereto by the shareholders or the directors and (x) providing an annual report to the Board of Directors. The Chairman of the Audit Committee shall present an annual report to our Board of Directors with respect to the findings of the Audit Committee, which shall include (i) the status of the internal controls and internal audits and any deviations therefrom and deficiencies thereof, taking into consideration the reports of external auditors and independent experts, (ii) the results of any preventive and corrective measures taken based on results of investigations in respect of non-compliance of operating and accounting policies, (iii) the evaluation of external auditors, (iv) the main results from the review of our financial statements and those of our subsidiaries, (v) the description and effects of changes to accounting policies, (vi) the measures adopted as result of observations of shareholders, directors, executive officers and third parties relating to accounting, internal controls and internal or external audits and (vii) compliance of shareholders’ and directors’ resolutions. The current members of the Audit Committee are Alejandro Ortega Aguayo, Martin Werner Wainfeld, and Federico Patiño Má Corporate Practices, Finance, Planning and Sustainability Committee The Corporate Practices, Finance, Planning and Sustainability Committee, which is responsible for the Corporate Practices, Finance, Planning and Sustainability Functions, has the following responsibilities: (i) providing opinions to our Board of Directors; (ii) requesting and obtaining opinions from independent experts; (iii) calling shareholders’ meetings; (iv) assisting the board in the preparation of annual reports and other reporting obligations; (v) analyzing the general principles for the determination of the strategic plan of the Company and the observance of such plan; (vi) evaluating and opining on the investment and financing policies of the Company that the chief executive officer proposes; (vii) opining on the premises of the annual budget and the following of its application, such as its control system; (viii) analyzing and evaluating the risks factors of the Company, such as the mechanisms for its control; (ix) evaluating whether the investment and financing policies are consistent with the strategic plan of the Company; and (x) evaluating whether the financing projects are consistent with the strategic plan of the Company. The Chairman of the Corporate Practices, Finance, Planning and Sustainability Committee shall prepare an annual report to our Board of Directors with respect to the findings of this Committee, which shall include (i) observations with respect to relevant directors and officers, (ii) the transactions entered into with related parties, (iii) the remunerations paid to directors and officers and (iv) any permissions granted for a director or officer to take advantage of a business opportunity. The current members of the Corporate Practices, Finance, Planning and Sustainability Committee are Ricardo Maldonado Yáñez, Luis Solorzano Aizpuru and Alejandro Ortega Aguayo.
Board Diversity The following matrix outlines the gender identity and the demographic background of the members of our board of directors in accordance with the Nasdaq rules to which we are subject:
Employees As of December 31, 138 The following table sets forth the number of employees and a breakdown of employees by main category of activity and geographic location as of the end of each period indicated:
139
All of our unionized employees, who are employed by our We maintain a savings plan available to all of our employees pursuant to which the employees may make bi-weekly contributions of up to 13% of their Funds in the savings plan may be used to make advances to employees and are otherwise invested in securities listed on the Mexican Stock Exchange or in treasury bills issued by the Ministry of Finance and Public Credit. On January 26, 2022, we were recognized as one of the only ten Mexican companies to be included in the 2022 Bloomberg Gender-Equality Index, which distinguishes companies that excel at promoting equality, female talent development and diversity. Likewise, on January 31, 2023, we were once again recognized as one of the only twelve Mexican companies to be included in the 2023 Bloomberg Gender-Equality Index. Item 7. Major Shareholders and Related-Party Transactions
In November 2006, a Mexican trust established by NAFIN, acting pursuant to the instructions of the Ministry Infrastructure, of Communications and Transportation, sold 48.02% of our outstanding capital stock through a global public offering of shares in the form of American Depositary Shares, or ADSs, and Series B shares, concurrently in the United States and Mexico. The net proceeds from the sale of the shares were paid to the Mexican government. After the offering, the Mexican government ceased to be a shareholder. On January 5, 2016, Aeroinvest merged into CONOISA, a subsidiary of ICATEN, with CONOISA as the surviving entity. As a result of this internal merger, CONOISA assumed all of the rights and obligations of Aeroinvest, including with respect to Aeroinvest’s beneficial ownership of Series B shares. In 2020, CONOISA sold to SETA all its B shares, that represent 1.9% of our outstanding capital stock. On July 7, 2020, our shareholders approved the cancellation of 3,659,417 Series B shares that were acquired through our share repurchase program. As of April 21, 2023, our fixed minimum social capital consisted of 390,111,556 ordinary shares, of which 49,766,000 were Series BB shares and 340,345,556 were Series B shares. On June 10, 2020, Fintech entered into a Stock Purchase Agreement with ICATEN and Bagual entered into a Stock Purchase Agreement with each of ICATEN and ICA Infraestructura, S.A. de. C.V. (a subsidiary of ICATEN), to 140 purchase collectively 100% of the capital stock of SETA. The transactions closed on June 12, 2020 and the aggregate purchase price for the SETA shares was An Ordinary Meeting for the Shareholders of the Company was held on June 11, 2021. The Meeting approved to carry out the issuance of 49,766,000 unsubscribed and unpaid Series B Shares to be kept in the treasury of the Company, exclusively to cover the conversion of the Series BB Shares owned by SETA into Series B shares, in case of default under certain financing documents to be entered into by, among others, SETA as guarantor of the borrowers (the “Loan Facility”), in the understanding that such issuance would not cause dilution to the shareholders of the Company (the “Converted Series B Shares”). Said issuance was carried out in relation to the Tender Offer, financed through the Loan Facility to be entered into by, among others, SETA as guarantor of the borrowers, that used as collateral, among other things, the Series BB Shares owned by SETA. On July 9, 2021, Aerodrome entered into the Loan Facility with Fintech for purposes of refinancing indebtedness incurred in connection with the Tender Offer, for an aggregate principal amount of the equivalent in U.S. dollars of Ps.7,005,074,000. The Loan Facility was ultimately repaid by the borrowers, by means of a margin facility dated as of December 6, 2021 (the “Margin Facility”). The Margin Facility was secured by our Series B and Series BB Shares owned by SETA, and our Series B Shares owned by Aerodrome. On December 9, 2021, we entered into an ancillary agreement with the borrower, lenders and agent party to the Margin Facility, for purposes of acknowledging the mechanism pursuant to which the borrowers agreed to provide liquidity to SETA’s Series BB Shares in case of foreclosure of the collateral under the Margin Facility, upon an event of default under the Margin Facility. In such ancillary agreement we also agreed, among other things, (i) to issue 49,766,000 Series B Shares in the form of treasury shares, for purposes of giving effect to the conversion of any Series BB Shares granted as collateral into Series B Shares, and to maintain such shares at our treasury; (ii) to update our Series B registration with the national securities registry in Mexico to allow for the issuance of the Series B Shares maintained in treasury upon conversion of the Series BB Shares; (iii) to deposit with Indeval a share certificate representing the Series B Shares issuable upon conversion; (iv) to transfer to a trustee each and all amounts regarding any dividend or distribution paid in cash on the Series B Shares pledged into a cash collateral account held by a guaranty trust; and (v) not to exercise or give effect to any transfer restriction or preemptive or similar rights on the pledged Series B Shares and the Series BB Shares other than the existing transfer restrictions in accordance with Rule 144 and the Mexican Airport Law. An Ordinary Meeting for the Shareholders of the Company was held on November 30, 2022 (the “Meeting”), whereby certain resolutions were adopted in relation with the intention of CONCESSOC to purchase of all the equity interests in SETA and Aerodrome, which as of December 7, 2022 collectively owned 66,046,210 of OMA’s Series B Shares (the “Purchased Series B Shares”) and 49,766,000 OMA’s Series BB shares owned by SETA (the “Purchased Series BB Shares”), which together accounted for approximately 29.99% of OMA’s total outstanding capital stock (the “Sale”). The Sale was financed with, among other credit facilities, a loan denominated in Mexican Pesos between CONCESSOC and certain banking institutions as lenders thereto (the “Credit Facilities”), and secured by a first priority security interests in substantially all of the assets of CONCESSOC, SETA, and Aerodrome (including the Purchased Series B Shares and the Purchased Series BB Shares). The security documents for the Credit Facilities included a Mexican Share Pledge Agreement (contrato de prenda sobre acciones) by and among CONCESSOC, VINCI Airports Participations SAS and SETA as pledgors, the collateral agent as pledgee, in its capacity as Mexican collateral agent, with the appearance of SETA and OMA (the “Mexican Share Pledge Agreement”). For more information on the Mexican Share Pledge Agreement, see Exhibit 10 to Amendment Number 0001068238-22-000254 or CIK: 0001951716 to Schedule 13D, filed by the VINCI Entities before the Securities and Exchange Commission on December 16, 2022. Further, at the Meeting, the shareholders (i) approved the pledge of SETA’s Series BB Shares to guarantee compliance with the obligation of the financing of the Sale, contingent on the acquisition of the shares pursuant to a stock purchase agreement; (ii) were informed of the undertaking by the purchasers of all acts necessary to (x) finance the Sale and (y) to evidence that the Company’s Converted Series B Shares issued pursuant to the shareholders meeting held on June 1, 2021 would apply to secure the Credit Facilities; (iii) approved the automatic cancellation of the Series B Shares in the event that the pledge agreement securing the financing of the Sale was to be terminated and not substituted or replaced by a guarantee agreement having the Series BB Shares as collateral; (iv) approved the resignation submitted by Diego Quintana Kawage, Guadalupe Phillips Margain, Rodrigo Antonio Quintana Kawage, José Bernardo Casas Godoy, Próspero Antonio Ortega Castro and Christian Whamond as members of the Board of Directors of the Company 141 contingent to the closing of the Sale; (v) acknowledged the designation by SETA, as holder of the Company's Series “BB” shares, of Nicolas Notebaert, Olivier Mathieu and Rémi Maumon de Longevialle as new members of the Board of Directors, in terms of the provisions of the Company's By-laws, contingent to the closing of the Sale; (vi) approved the appointment of Pierre-Hugues Schmit, Eric Delobel and Emmanuelle Huon as new members of the Board of Directors, appointed by the VINCI Entities, as shareholders of the Series “B” shares, contingent to the closing of the Sale; (vii) approved the appointment of Nicolas Notebaert as Chairman of the Board of Directors, contingent to the closing of the Sale; (viii) approved the ratification of Mrs. Adriana Díaz Galindo as Secretary of the Board of Directors, without being a member thereof; and (ix) approved the ratification of the independent members of the Board of Directors of the Company as members of the Audit Committee and the Corporate Practices, Finance, Planning and Sustainability Committee. On December 7, 2022 (the “Closing Date”), the VINCI Entities filed Amendment No. 0001068238-22-000254 or CIK: 0001951716 amending the Schedule 13D filed with the SEC informing that CONCESSOC had completed the acquisition of the “Purchased Series B Shares”and the “Purchased Series BB Shares” pursuant to a Share Purchase Agreement (“SPA”) dated July 31, 2022, by and among, CONCESSOC as purchaser and the Sellers, in which CONCESSOC agreed to purchase 100% of the equity interests held by the Sellers in SETA and Aerodrome, respectively for US$1,170,000,000. The Credit Facilities were secured by a first priority security interests in favor of the collateral agent, in respect of substantially all the assets of CONCESSOC, SETA, and Aerodrome (including the Purchased Series B Shares and the Purchased Series BB Shares). The security documents for the loans included the Mexican Share Pledge Agreement. On the Closing Date, the lenders under the Margin Facility executed and issued a pay-off letter, confirming that the Margin Facility was repaid in full and terminated in accordance with its terms, and that all liens in respect of any property of Aerodrome, SETA, OMA and their respective subsidiaries created pursuant to or in connection with the Margin Facility were released and discharged in full. Under the SPA, the parties also agreed that the appointment of new members of the board of directors of OMA approved at the Meeting, became effective as of the Closing Date. As of the date of this report,
The following table sets forth information with respect to beneficial ownership of our capital stock as of April
142 Arrangements Relating to SETA Pursuant to our bylaws, SETA (as holder of our Series BB shares) has the right to present to our Board of Directors the name or names of the candidates for appointment as our chief executive officer, to appoint and remove half of our executive officers, which currently include our chief financial officer, our chief operating officer and our commercial director, and to elect three members of our Board of Directors. SETA (as holder of our Series BB shares) also has the right pursuant to our bylaws to veto certain actions requiring approval of our shareholders (including the payment of dividends, the amendment of our bylaws and the amendment of its right to appoint certain members of our senior management). Additionally, most matters voted on by our Board of Directors require the affirmative vote of the directors appointed by our Series BB shareholders. If the Technical Assistance Agreement is terminated, the Series BB shares would be converted into Series B shares, resulting in the termination of all of SETA’s special rights. As long as SETA retains at least 7.65% of our capital stock in the form of Series BB, all of its special rights will remain in place. If SETA were to hold less than 7.65% of our capital stock in the form of Series BB shares, such shares must be converted into Series B shares, which would cause SETA to lose all of its special rights. On October 15, 2015, we, at the request of SETA, converted 9,034,000 of our Series BB shares held by SETA to Series B Our bylaws In accordance with our bylaws, at least one member of each of our Audit Committee and Corporate Practices, Finance, Planning and Sustainability Committee shall be appointed by SETA.
Arrangements with SETA and Its Affiliates
The rules for the sale to SETA of the Series BB shares previously owned by the Mexican government required us to enter into a Participation Agreement with SETA and Under the Technical Assistance Agreement, SETA provides management and consulting services and transfers industry expertise and technology to us in exchange for a fee which in Additionally, a party may terminate the Technical Assistance Agreement prior to its expiration date upon The Technical Assistance Fee for 2000 and 2001 was fixed at U.S.$5.0 million. Subsequent to January 1, 2003, the Technical Assistance Fee was equal to the greater of U.S.$3.0 million adjusted annually for inflation since June 14, 2006 (measured by the U.S. consumer price index), or 5% of our EBITDA (as defined in the Technical Assistance Agreement). As of June 14, 2015, the technical assistance fee was reduced by 20% for the first three years of the extension and amendment to the Technical Assistance Agreement, to the greater of U.S.$3,478,000 (updated annually according to the U.S. consumer price index) and 4% of our EBITDA, and by an additional 25% for the final two years of the extension, to 3% of our EBITDA. The Technical Assistance Agreement allows SETA, its shareholders and their affiliates to render additional services to us only if our Corporate Practices, Finance, Planning and Sustainability Committee determines that these related persons have submitted an In
Arrangements with Other Affiliates
The following table sets forth the amounts paid to affiliates of ICATEN during
Transactions with Related Parties As of December 31,
See “Item 18. Financial Statements” beginning on page F-1. General The Company is involved, from time to time, in certain legal proceedings that are incidental to the normal conduct of its business. Disputed Land Ownership at the Ciudad Juárez Airport Parties purporting to be former owners of land comprising a portion of the Ciudad Juárez airport initiated legal proceedings against the airport in 1995 to reclaim On July 8, 2016, the local court in Ciudad Juárez ruled that the claims against the Ciudad Juárez airport were inadmissible. The claimants filed an appeal before the Appellate Court in Chihuahua against the court’s determination and on July 31, 2017, the First Civil Court overturned the lower court’s decision and ruled in favor of the plaintiffs. The First Civil Court required the Mexican government to pay restitution to the plaintiffs for the loss of their property. The Mexican government filed an injunction proceeding (amparo) to appeal the decision. On May 25, 2018, the First Civil Court overturned its decision and absolved the Mexican government and Ciudad Juárez airport. The plaintiffs appealed this decision to the Mexican Supreme Court, which on May 25, 2019, determined not to hear the matter at hand and ordered the return of the file to the First Civil Court for all applicable legal effects. In compliance with the Mexican Supreme Court’s decision, the First Civil Court restarted its proceedings and on December 12, 2019 ruled against of the plaintiffs by denying the requested injunction proceeding (amparo). As a result, the plaintiffs filed On November 24, 2021, In the event that any subsequent legal resolution results in a decision substantially similar to the May 18, 2005 court order or that is otherwise adverse to us, and the Mexican government fails to repossess the land, our concession to operate the Ciudad Juárez airport would terminate. In
Disputed Land Ownership at the Monterrey Airport On May 146 By means of the lawsuit, Banorte filed an action to recover possession and requested a declaratory judgment saying that The Second Chamber of the Superior Court of Justice of the State of Nuevo Leon heard the appeals against the First Instance Judgment and on July 25, 2019 Both Monterrey airport and DIAV filed injunctions (amparo) against the First Second Instance Judgment in August 2019, Dissatisfied with the Second Instance Judgments, all the parties to the litigation filed amparo reliefs (including the Monterrey airport with respect to, among other issues, the refusal of the We believe that in the event of a resolution adverse to the airport’s interests, DIAV as the seller of the Disputed Land Ownership at the Durango Airport On March 5, 2020, the Company was notified of The trial hearing was held with the appearance of the parties and the evidentiary stage of the trial is pending. As of the date of this report, the contingency is still in effect because the trial is still pending the judgment on the merits of the case. In the event that the resolution of the lawsuit is not favorable to us, Disputed Land Ownership at the Reynosa Airport On October 16, 2020, the Company was notified of the lawsuit filed against the AFAC, in which the Reynosa airport was called as an interested third party. The nullity of the administrative resolution dated February 7, 2020 issued by the AFAC in the Appeal for Review filed by the plaintiff is demanded in order for the AFAC to study the plaintiff's petition and recognize that the legal requirements for the reversion of the expropriation of 2.6 hectares included in the expropriation decrees of 1970 and 1971 have been met. 147 Reynosa airport appeared in the lawsuit and the Disputed Land Ownership at the Torreón Airport On October 10, 2016, a lawsuit was filed by the Ejido Ignacio Allende before the Agrarian Court in Torreón, Coahuila, against the Ministry of Infrastructure, Communications and Transportation and its administrative entity Aeropuertos y Servicios Auxiliares. Grupo Aeroportuario del Centro Norte, S.A.B. de C.V. was named as a subsidiary defendant. Aeropuerto de Torreón, S.A. de C.V. was later called to trial as a defendant. The claimant seeks the restitution of 3.08 hectares currently within Torreon airport’s property, alleging that such hectares are property of Ejido Ignacio Allende and that the area was not included in the expropriation decree that gave way to the construction of what is now Torreon airport. If the restitution of land is not possible for any reason, the claimant seeks payment for the land’s commercial value. The claimant also seeks payment for the use of the claimed portion of land. On August 31, 2022, a ruling was issued in favor of the claimant ordering the Ministry of Infrastructure, Communications and Transportation and Aeropuerto de Torreón, S.A. de C.V. to pay Ejido Ignacio Allende the commercial value of the claimed land. Aeropuertos y Servicios Auxiliares and Grupo Aeroportuario del Centro Norte, S.A.B. de C.V. were found not responsible. On September 12, 2022 an appeal against the ruling was filed by Aeropuerto de Torreón, S.A. de C.V. and on March 22, 2023, the Mexican Supreme Agrarian Court ruled in favor of the defendant, ordering that the Agrarian Court in Torreón issue a new ruling. As of the date of this report, the Agrarian Court in Torreón has not issued a ruling. Property Tax Claims Administrative law proceedings have been asserted against us in the past by various municipalities for the payment of property taxes with respect to the real estate in which we operate our airports in the relevant cities. In November 2018, the municipality of Culiacán filed property tax claims against us for Ps.2,425 thousand, plus Ps.3,339 thousand in other fees. In response to these claims, on December 2018, we filed an administrative annulment proceeding before the Sinaloa Administrative Court (Tribunal de lo Contencioso Administrativo del Estado de Sinaloa)
Infrastructure, Communications and Transportation was asked to join the proceeding as an interested In May 2019, the Municipality of Acapulco filed property tax claims against us for Ps.27,012 thousand for property tax considering Acapulco airport as a solidary debtor to the Mexican Airport and Auxiliary Services Agency. An administrative annulment proceeding was filed against these claims, which as of April
Other municipalities in which we operate may assert similar claims, which if such is the case, we intend to pursue aggressively. Amparo Chihuahua Airport In September 2019, the municipal authority of Chihuahua carried out verification visits at the commercial premises located at the Chihuahua airport to request municipal operating licenses, likewise requiring the Chihuahua Airport to present its construction license. A request for amparo was filed against such requirements by the Chihuahua airport, challenging the visit order and the unconstitutionality of the municipal regulations applied. The court issued a ruling in favor of the Chihuahua airport, indicating that the commercial spaces of the Chihuahua airport are under federal not municipal jurisdiction. The municipal authority 148 Acapulco Airport On November 1, 2022 the
Consumer Protection Agency Fines On The Acapulco airport presented evidence before PROFECO proving the alleged violations to the law did not take place. However, on January 10, 2022 PROFECO notified the Acapulco airport of
Corporate Tax Claim for Monterrey Airport. In accordance with the For fiscal years 2018 and 2019, the Monterrey airport requested a refund of Ps.10,220 thousand and Ps.10,624 thousand ,respectively, which On September 16, 2020, the On April 27, 2021, the Monterrey airport challenged the tax authority’s denial for the 2019 fiscal year refund, which was ruled in favor of the Monterrey airport by the Federal Court for Administrative Justice. On June 30, 2021 and December 1, 2021, the tax The Monterrey airport maintains assets in the 149 We do not believe that liabilities related to any claims or proceedings against us are likely to have, individually or in the aggregate, a material adverse effect on our consolidated financial condition or results of operations. Should a court determine that these taxes must be paid in response to any future proceedings, we believe that only the owners of the land would be responsible for paying these taxes directly, and the obligation to pay these taxes is not otherwise contemplated by the terms of our concessions. The Mexican government has not acknowledged an obligation to pay such taxes; however, changes to the Mexican Constitution and other applicable laws could render us liable to municipalities for property taxes in the future. We cannot predict the amount of any such future tax liabilities or the criteria that would be used to determine them. If such changes were to occur, and any amounts owed were substantial,
these resulting tax liabilities could have a materially adverse effect on our consolidated financial condition or results of operations. DIVIDENDS AND CAPITAL STOCK REIMBURSEMENTS Mexican law requires that at least 5% of a company’s net income each year (after profit sharing and other deductions required by Mexican law) be allocated to a legal reserve fund until such fund reaches an amount equal to at least 20% of its capital stock (without adjustment for inflation). Our legal reserve fund was Ps.60,729 thousand as of December 31, Mexican companies may pay dividends only out of earnings (including retained earnings after all losses have been absorbed or paid up) and only after such allocation to the legal reserve fund. The reserve fund is required to be funded on a stand-alone basis for each company, rather than on a consolidated basis. Since 2011, the level of earnings available for the payment of dividends has been determined under IFRS. Our subsidiaries are required to allocate 5% of earnings to their respective legal reserve funds prior to paying dividends to us. We are also required to allocate earnings to our legal reserve fund prior to distributing any dividend payments to our shareholders. Dividends that are paid from a company’s distributable earnings that have not been subject to corporate income tax are subject to a On April 14, 2011, our shareholders approved a dividend policy, applicable to our results of operations starting in 2011. Our dividend policy seeks to ensure the tax efficient payment of dividends. Because any dividend we expect to pay will likely be subject to the corporate-level dividend tax referred to above, our dividend policy has been designed to ensure that any corporate-level dividend tax we pay may be applied by us as a credit against its projected future corporate income tax liability in the year paid and in the subsequent two years. Our dividend policy has a fixed and a variable component paid annually in equal quarterly installments. The fixed component is Ps.325,000 thousand per year. The variable component will be based on the funds available for distribution in excess of the fixed component. Our current dividend policy presupposes that the declaration and amount of dividends paid are subject to (and determined by) the following factors:
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Our current dividend policy was prepared based on current Mexican tax law and our current projections of our future earnings and IFRS. Changes in Mexican tax law and our actual results of operations could cause our Board of Directors to propose to our shareholders to change the current dividend policy. We declare our dividends in pesos. In the case of Series B shares represented by ADSs, the cash dividends are paid to the depositary and, subject to the terms of the deposit agreement, converted into and paid in U.S. dollars at the prevailing rate of exchange, net of conversion expenses of the depositary and applicable Mexican withholding tax. Fluctuations in exchange rates will affect the amount of dividends that ADS holders receive. The declaration, amount and payment of dividends, if any, are subject to the approval of either (i) holders of a majority of our capital stock present at a shareholders’ meeting and, so long as the Series BB shares represent at least 7.65% of our outstanding capital stock, the approval of SETA (as the holder of the Series BB shares) or (ii) holders of 95% of our capital stock.
2020, and we paid aggregate dividends of Ps.1,979,790 thousand in 2021 and Ps.6,615,798 in 2022. Pursuant to the resolution adopted by the Annual Shareholders’ Meeting held on February 14, 2023, we paid a cash dividend of Ps.1,450 million on March 2, 2023. Additionally, pursuant to the resolution adopted by the Annual Shareholders’ Meeting held on April 21, 2023, we will pay a cash dividend of Ps.2,300 million in two installments: the first installment amounts to Ps.1,800 million and will be paid no later than June 30, 2023, and the second installment amounts to Ps.500 million and will be paid no later than September 30, 2023. Certain distributions that we make to our shareholders other than capital reimbursements (in the manner described above), including amortization of shares or otherwise, would be subject to taxation in Mexico, including withholding taxes. The tax rates applicable and the method of assessing and paying taxes applicable to any such non-dividend distributions will vary depending on the nature of the distributions. Item 9. The Offer and Listing
The ADSs are listed on the NASDAQ under the symbol “OMAB.” Our common shares are listed on the Mexican Stock Exchange under the symbol “OMA.” TRADING ON THE MEXICAN STOCK EXCHANGE AND BOLSA INSTITUCIONAL DE VALORES The Mexican Stock Exchange or the Bolsa Mexicana de Valores, S.A.B. de C.V. and the Bolsa Institucional de Valores are both located in Mexico City and are the two stock exchanges operating in Mexico. The Bolsa Institucional de Valores launched operations in July 2018. Trading takes place principally through automated systems that are open between the hours of 8:30 a.m. and 3:00 p.m. Mexico City time, each business day. Beginning in March 2008, during daylight savings time, trading hours change to match the NYSE trading hours, opening at 7:30 a.m. and closing at 2:00 p.m. local time. Both stock exchanges operate a system of automatic suspension of trading in shares of a particular issuer as a means of controlling excessive price volatility, but under current regulations, this system does not apply to securities such as the units represented by ADSs or CPOs that are directly or indirectly quoted on a stock exchange outside of Mexico. Settlement is effected two business days after a share transaction. Deferred settlement, even if by mutual agreement, is not permitted without the approval of the Mexican Stock Exchange or the Bolsa Institucional de Valores. Most securities traded on the Mexican Stock Exchange or the Bolsa Institucional de Valores are on deposit with Indeval, 151 a privately owned central securities depositary that acts as a clearing house, depositary, custodian and registrar for transactions on the Mexican Stock Exchange and the Bolsa Institucional de Valores, eliminating the need for the physical transfer of shares. Reporting Obligations As a company with securities listed on the Mexican Stock Exchange and NASDAQ, we are subject to several reporting and disclosure obligations regarding corporate information and material events set forth by the Mexican and U.S. securities laws, which include filing quarterly and annual financial reports, as well as corporate information and disclosing material events to the regulatory authorities in Mexico and the United States.
For the last three years, we have duly and timely filed all the information that we are obligated to file in order to comply with the Mexican and U.S. securities laws. Material Changes to the Rights Conferred by Our Securities Registered with the Mexican National Registry of Securities and Traded in the Mexican Market As of December 31, Item 10. Additional Information Bylaws This section summarizes certain provisions of Mexican law and our bylaws (estatutos sociales), a copy of which is attached to this Form 20-F as Exhibit 1.1. At our Extraordinary Shareholders’ Meeting held on October 2, 2006, our shareholders adopted resolutions amending and restating of our bylaws to organize the company as a sociedad anónima bursátil and to conform our bylaws to the provisions of the Mexican Securities Law. Some of the relevant changes included the enhancement of certain provisions applicable to the corporate governance of public companies, clarification of certain provisions relating to directors’ and officers’ liability and the elimination of restrictions on ownership of our shares. At our shareholders’ meetings held on July 7, 2020, May 31, 2017, April 23, 2015 and April 10, 2014, our bylaws were amended to update the amounts of fixed minimum common stock to reflect the decrease on the fixed portion of our capital stock after the cancellation of shares repurchased held in treasury and capital reimbursements. Purposes The purposes of the Company include the following:
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Election of Directors The Board of Directors is responsible for the oversight of our business. Pursuant to our bylaws, the Board of Directors must consist of an odd number of directors determined at an ordinary general meeting of shareholders and is required to have at least 11 members. Our Board of Directors currently consists of 11 directors, each of whom is elected at the annual shareholders’ meeting. Under the Mexican Securities Law and our bylaws, at least 25% of our directors must be independent. Under Mexican law, the determination as to the independence of our directors made by our shareholders’ meeting may be contested by the CNBV. Our bylaws do not currently require mandatory retirement of directors after they reach a certain age. The compensation of our directors is proposed by the Board of Directors to all of our stockholders at a stockholders’ meeting for their approval. At each shareholders’ meeting for the election of directors (i) each person (or group of persons acting together) holding 10% of our capital stock in the form of Series B shares is entitled to designate one director, (ii) the holders of Series BB shares are entitled to elect three directors and their alternates pursuant to our bylaws, the Participation Agreement and the Technical Assistance Agreement and (iii) the remaining members of the Board of Directors are to be elected by the holders of our capital stock (both the Series BB shares and the Series B shares, including those Series B holders that were entitled to elect a director by virtue of their owning 10% of our capital stock). The candidates to be considered for election as directors by the shareholders will be proposed to the shareholders’ meeting by the Board. Any slate of candidates proposed by the Board shall include independent directors to the extent required by the Mexican Securities Law and other applicable law. Five of our directors are independent. Authority of the Board of Directors The Board of Directors has broad authority to manage the company. Pursuant to the Mexican Securities Law, the Board of Directors is required to approve, among other matters:
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Under our bylaws, resolutions at meetings of the Board of Directors with respect to any of the items listed above will be valid only if approved by the members of the Board of Directors elected by the holders of the Series BB shares. Powers of Series BB Directors The Series BB directors are entitled to: (i) nominate the candidates for chief executive officer to our Board of Directors, (ii) move for the removal of our chief executive officer, (iii) appoint and remove half of our executive officers in accordance with the guidelines established in the Technical Assistance Agreement and the guidelines approved by our Board of Directors and (iv) appoint at least one member to each of our committees. In addition, any matter requiring approval of the Board of Directors under our bylaws, as indicated above, will require the approval of a majority of the directors appointed by the Series BB shareholders for so long as the Series BB shares represent at least 7.65% of our capital stock. Our Capital Stock Pursuant to our bylaws, our capital stock has a variable portion. As of the date of this report, the Company has a fixed minimum capital stock, without withdrawal rights, of Ps.300,822 thousand, represented by Our capital stock has been modified during the last three years as a consequence of the following events:
We The following table sets forth our authorized capital stock and our issued and outstanding capital stock as of April
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All ordinary shares confer equal rights and obligations to holders within each series. The Series BB shares have special voting and other rights described below. Our bylaws provide for the issuance of the following shares, which have the characteristics described below:
Under the Mexican Airport Law and the Mexican Foreign Investments Law (Ley de Inversión Extranjera), foreign persons may not, directly or indirectly, own more than 49% of the capital stock of a holder of an airport concession unless an authorization from the Mexican Commission of Foreign Investments (Comisión Nacional de Inversiones Extranjeras) is obtained. Voting Rights and Shareholders’ Meetings Each Series B share and Series BB share entitles the holder to one vote at any general meeting of our shareholders. Holders of Series BB shares are entitled to elect three members of our Board of Directors. Under Mexican law and our bylaws, we may hold three types of shareholders’ meetings: ordinary, extraordinary and special. Ordinary shareholders’ meetings are those called to discuss any issue not reserved for extraordinary shareholders’ meetings. An annual ordinary shareholders’ meeting must be convened and held within the first four months following the end of each fiscal year to discuss, among other things, the report prepared by the Board on our financial statements, the appointment of members of the Board, declaration of dividends and the determination of compensation for members of the Board. Under the Mexican Securities Law, our ordinary shareholders’ meeting, in addition to those matters described above, must approve any transaction representing 20% or more of our consolidated assets, executed in a single or a series of transactions, during any fiscal year. Extraordinary shareholders’ meetings are those called to consider any of the following matters:
156 Special shareholders’ meetings are those called and held by shareholders of the same series or class to consider any matter particularly affecting the relevant series or class of shares. Shareholders’ meetings are required to be held in our corporate domicile, which is Mexico City. Calls for shareholders’ meetings must be made by the Chairman, the Secretary, two members of the Board of Directors, the Audit Committee and the Corporate Practices, Finance, Planning and Sustainability Committee. Any shareholder or group of shareholders representing at least 10% of our capital stock has the right to request that the president of the Board of Directors, the Audit Committee or the Corporate Practices, Finance, Planning and Sustainability Committee calls a shareholders’ meeting to discuss the matters indicated in the relevant request. If the president of the Board of Directors, the Audit Committee or the Corporate Practices, Finance, Planning and Sustainability Committee fails to call a meeting within 15 calendar days following receipt of the request, the shareholder or group of shareholders representing at least 10% of our capital stock may request that the call be made by a competent court.
Calls for shareholders’ meetings must be published in the Federal Official Gazette or in one newspaper of general circulation in Mexico City at least 15 calendar days prior to the date of the meeting. Each call must set forth the place, date and time of the meeting and the matters to be addressed. Calls must be signed by whoever makes them, provided that calls made by the Board of Directors, the Audit Committee or the Corporate Practices, Finance, Planning and Sustainability Committee must be signed by the Chairman, the Secretary or a special delegate appointed by the Board of Directors, the Audit Committee or the Corporate Practices, Finance, Planning and Sustainability Committee for that purpose. Shareholders’ meetings will be validly held and convened without the need of a prior call or publication whenever all the shares representing our capital are duly represented. To be admitted to any shareholders’ meeting, shareholders must: (i) be registered in our share registry; and (ii) at least 24 hours prior to the commencement of the meeting submit (a) an admission ticket issued by us for that purpose and (b) a certificate of deposit of the relevant stock certificates issued by the Secretary or by a securities deposit institution, a Mexican or foreign bank or securities dealer in accordance with the Mexican Securities Law. The share registry will be closed three days prior to the date of the meeting. Shareholders may be represented at any shareholders’ meeting by one or more attorneys-in-fact who may not be our directors. Representation at shareholders’ meetings may be substantiated pursuant to general or special powers of attorney or by a proxy executed before two witnesses. Ownership of shares may be evidenced by a certificate issued by a securities depositary (or Indeval) coupled with a certificate issued by any institution with an account at Indeval. At or prior to the time of the publication of any call for a shareholders’ meeting, we will provide copies of the publication to the depositary for distribution to the holders of ADSs. Holders of ADSs are entitled to instruct the depositary as to the exercise of voting rights pertaining to the Series B shares. Quorum Ordinary meetings are regarded as legally convened pursuant to a first call when more than 50% of the shares representing our capital are present or duly represented. Resolutions at ordinary meetings of shareholders are valid when approved by a majority of the shares present at the meeting. Any number of shares represented at an ordinary meeting of shareholders convened pursuant to a second or subsequent call constitutes a quorum. Resolutions at ordinary meetings of shareholders convened in this manner are valid when approved by a majority of the shares present at the meeting. Extraordinary shareholders’ meetings are regarded as legally convened pursuant to a first call when at least 75% of the shares representing our capital are present or duly represented and no minimum number of shares is required for a quorum at a second call for an extraordinary shareholders’ meeting. Resolutions at extraordinary meetings of shareholders are valid if taken by the favorable vote of shares representing more than 50% of our capital. Notwithstanding the foregoing, resolutions at extraordinary meetings of shareholders called to discuss any of the items listed below are valid only if approved by a vote of shares representing at least 75% of our capital: 157
Our bylaws also establish that a delisting of our shares requires the vote of holders of 95% of our capital stock. Veto Rights of Holders of Series BB Shares So long as the Series BB shares represent at least 7.65% of our capital stock, resolutions adopted at shareholders’ meetings with respect to any of the items listed below will only be valid if approved by a vote of at least 95% of our capital stock or a majority of the Series BB shares:
Right of Withdrawal Any shareholder having voted against a resolution validly adopted at a meeting of our shareholders with respect to (i) a change in our corporate purpose or nationality, (ii) a change of corporate form, (iii) a merger involving us in which we are not the surviving entity or the dilution of its capital stock by more than 10% or (iv) a 158 Dividends and Distributions At our annual ordinary general shareholders’ meeting, the Board of Directors will submit to the shareholders for their approval our financial statements for the preceding fiscal year as presented by our Chief Executive Officer. Five percent of our net income (after profit sharing and other deductions required by Mexican law) must be allocated to a legal reserve fund until the legal reserve fund reaches an amount equal to at least 20% of our capital stock (without adjustment for inflation). Additional amounts may be allocated to other reserve funds as the shareholders may from time to time determine including a reserve to repurchase shares. The remaining balance, if any, of net earnings may be distributed as dividends on the shares of common stock. A full discussion of our dividend policy may be found in “Item 8. Financial Information—Dividends.”
Registration and Transfer Our shares are registered with the Mexican National Securities Registry, as required under the Mexican Securities Law and regulations issued by the CNBV. Our shares are evidenced by share certificates in registered form, and registered dividend coupons may be attached thereto. Our shareholders may either hold their shares directly, in the form of physical certificates, or indirectly, in book-entry form through institutions that have accounts with Indeval. Indeval is the holder of record in respect of all such shares held in book-entry form. Indeval will issue certificates on behalf of our shareholders upon request. Accounts may be maintained at Indeval by the following participants: brokers, banks, other financial entities or other entities approved by the CNBV. We maintain a stock registry and only those persons listed in such stock registry, and those holding certificates issued by Indeval or any related Indeval participants indicating ownership, will be recognized as our shareholders. The transfer of shares must be registered in our stock registry. In the case of an international offering, the Depositary will appear in such stock registry as the registered holder of the common shares represented by the ADSs. Series BB shares may only be transferred after conversion into Series B shares and are subject to the following rules:
159 For purposes of our bylaws, “control” of a person, with respect to any person, is defined as:
Shareholder Ownership Restrictions and Anti-Takeover Protection Under the Mexican Airport Law:
Air carriers and their subsidiaries and affiliates are not permitted, directly or indirectly, to “control” us or any of our subsidiary concession holders. Under the Mexican Airport Law, any acquisition of control requires the prior consent of the Ministry of Infrastructure, Communications and Transportation. For purposes of these provisions, “related person” and “control” are defined above under “Registration and Transfer.” The Mexican Securities Law contains provisions relating to public tender offers and certain other share acquisitions. Any intended acquisition of our shares that results in the acquirer obtaining control of our voting shares (our Series B shares and Series BB shares considered together) requires the acquirer, with the prior approval of the CNBV, to make a mandatory public tender offer for the greater of (i) the percentage of the capital stock intended to be acquired or (ii) 10% of our capital stock. Any intended acquisition of our shares that is aimed at obtaining control requires the potential acquirer to make a mandatory tender offer for 100% of our outstanding capital stock (in addition to the approval of the Ministry of Infrastructure, Communications and Transportation). The tender offer must be made at the same price to all shareholders and classes of shares. Our Board of Directors must issue its opinion of any tender offer resulting in a change of control, which opinion must take into account minority shareholder rights and which may be accompanied by an independent fairness opinion. Directors and principal officers are required to disclose whether they will participate in the tender. 160 Under the Mexican Securities Law, all tender offers must be open for at least 20 business days, and purchases thereunder are required to be made pro rata to all tendering shareholders. The Mexican Securities Law only permits the payment of certain amounts to controlling shareholders over and above the offering price if these amounts are fully disclosed, approved by the Board of Directors and paid solely in connection with non-compete or similar obligations. Certain Minority Protections Pursuant to the Mexican Securities Law and the Mexican General Law of Business Corporations, there are several protections afforded to minority shareholders. These protections include provisions that permit:
Changes in Capital Stock Increases and reductions of our capital must be approved at an extraordinary shareholders’ meeting, subject to the provisions of our bylaws and the Mexican General Law of Business Corporations. Subject to the individual ownership limitations set forth in our bylaws, in the event of an increase of our capital stock, other than (i) for purposes of conducting a public offering of the shares issued as a result of such increase, (ii) in connection with mergers, (iii) with respect to the resale of repurchased shares or (iv) in connection with the conversion of convertible securities, our shareholders will have a preemptive right to subscribe and pay for new stock issued as a result of such increase in proportion to their shareholder interest at that time. Such preemptive right shall be exercised by any method provided in Section 132 of the Mexican General Law of Business Corporations, by subscription and payment of the relevant stock within 15 business days after the date of publication of the corresponding notice to our shareholders through the electronic system established by the Mexican Ministry of Economy (Secretaría de Economía), provided that if at the corresponding meeting all of our shares are duly represented, the 15-calendar day period shall commence on the date of the meeting. 161 Our capital stock may be reduced by resolution of a shareholders’ meeting taken pursuant to the rules applicable to capital increases. Our capital stock may also be reduced upon withdrawal of a shareholder as provided in Section 206 of the Mexican General Law of Business Corporations (see “—Voting Rights and Shareholders’ Meetings—Right of Withdrawal”) or by repurchase of our own stock in accordance with the Mexican Securities Law (see “—Share Repurchases”). Share Repurchases We may choose to acquire our own shares through the Mexican Stock Exchange and NASDAQ on the following terms and conditions:
Ownership of Capital Stock by Subsidiaries Our subsidiaries may not, directly or indirectly, invest in our shares, except for shares of our capital stock acquired as part of an employee stock option plan and in conformity with the Mexican Securities Law. Repurchase Obligation Pursuant to the Mexican Securities Law, in the event that we decide to cancel the registration of our shares in the Mexican National Securities Registry and the listing of our shares on the Mexican Stock Exchange, or if the CNBV orders such cancellation, we will be required to conduct a tender offer for the purchase of stock held by minority shareholders and to create a trust for a period of six months, with amounts sufficient to purchase all shares not participating in the tender offer. Under the law, Liquidation Upon our dissolution, one or more liquidators must be appointed at an extraordinary shareholders’ meeting to wind up our affairs. All fully paid and outstanding shares will be entitled to participate equally in any distribution upon liquidation. Partially paid shares participate in any distribution in the same proportion that such shares have been paid at the time of the distribution. 162 Other Provisions Liabilities of the Members of the Board of Directors The Mexican Securities Law imposes a duty of care and a duty of loyalty on directors. The duty of care requires our directors to act in good faith and in the best interests of the Company. For such purpose, our directors are required to obtain the necessary information from the chief executive officer, the executive officers, the external auditors or any other person in order to act in our best interests. Our directors are liable for damages and losses caused to us and our subsidiaries as a result of violations of this duty of care. The duty of loyalty requires our directors to preserve confidential information received in connection with the performance of their duties and to abstain from discussing or voting on matters in which they have a conflict of interest. In addition, the duty of loyalty is violated if a shareholder or group of shareholders is knowingly favored or if, without the express approval of the Board of Directors, a director takes advantage of a corporate opportunity. The duty of
loyalty is also violated by (i) failing to disclose to the Audit Committee or the external auditors any irregularities that the director encounters in the performance of his or her duties or (ii) disclosing information that is false or misleading or omitting to record any transaction in our records that could affect our financial statements. Directors are liable for damages and losses caused to us and our subsidiaries for violations of this duty of loyalty. This liability also extends to damages and losses caused as a result of benefits obtained by the director or directors or third parties, as a result of actions of such directors. Our directors may be subject to criminal penalties of up to 12 years’ imprisonment for certain illegal acts involving willful misconduct that result in losses to us. Such acts include the alteration of financial statements and records. Liability actions for damages and losses resulting from the violation of the duty of care or the duty of loyalty may be exercised solely for our benefit and may be brought by the company or by shareholders representing 5% or more of the capital stock of the company, and criminal actions may only be brought by the Mexican Ministry of Finance and Public Credit, after consulting with the CNBV. As a safe harbor for directors, the Mexican Securities Law provides that the liabilities specified above will not be applicable if (i) the director acted in good faith and complies with applicable law and the bylaws; (ii) facts based upon information are provided by officers or third-party experts, the capacity and credibility of which may not be the subject of reasonable doubt; (iii) the director selects the more adequate alternative in good faith or in a case where the negative effects of such decision may not have been foreseeable; and (iv) actions were taken in compliance with resolutions adopted at the shareholders’ meeting. In addition to the duty of care and duty of loyalty required by the Mexican Securities Law, our bylaws provide that, from the date on which at least 51% of our capital stock is listed on a stock exchange, a member of the Board of Directors will be liable to us and our shareholders in the following circumstances:
163 The members of the Board of Directors are liable to our shareholders only for the loss of net worth suffered as a consequence of disloyal acts carried out in excess of their authority or in violation of our bylaws. The Company, in any case, is required to indemnify and hold the relevant officers, members of the Board of Directors and the Secretary harmless from any liability that they may incur with respect to third parties in the performance of their duties, which shall include (a) the indemnity amount to be paid for the damages caused by their acts to third parties and, (b) the expenses they may incur (including, without limitation, legal and advisory fees) in connection with item (a) of this paragraph, provided that such expenses are reasonable and duly documented, except in cases of fraud, willful misconduct, or illegal acts under the Mexican Securities Law and other laws.
Information to Shareholders The Mexican Securities Law establishes that companies, acting through their boards of directors, must annually present a report at a shareholders’ meeting that includes the following:
In addition to the foregoing, our bylaws provide that the Board of Directors should also prepare the information referred to above with respect to any subsidiary that represents at least 20% of our net worth (based on the financial statements most recently available). Duration The duration of our corporate existence is indefinite. Shareholders’ Conflict of Interest Under Mexican law, any shareholder that has a conflict of interest with respect to any transaction must abstain from voting and from being present and participating in discussions thereon at the relevant shareholders’ meeting. A shareholder that votes on a transaction in which its interest conflicts with ours may be liable for damages in the event the relevant transaction would not have been approved without such shareholder’s vote. Directors’ Conflict of Interest Under Mexican law, any director who has a conflict of interest in any transaction must disclose such fact to the other directors and abstain from voting on such transaction. Any director who violates such provision will be liable to us for any resulting damages or losses. Certain Differences between Mexican and U.S. Corporate Law The Mexican General Law of Business Corporations and the Mexican Securities Law, which apply to us, differ in certain material respects from laws generally applicable to U.S. corporations and their shareholders. 164 Independent Directors The Mexican Securities Law requires that 25% of the directors of Mexican public companies be independent. Pursuant to the rules and regulations of the NASDAQ National Market, foreign companies subject to reporting requirements under the U.S. federal securities laws and listed on the NASDAQ National Market must maintain a committee responsible for Audit Functions comprised entirely of independent directors as defined in the U.S. federal securities laws. Mergers, Consolidations and Similar Arrangements A Mexican company may merge with another company only if a majority of the shares representing its outstanding capital stock approves the merger at a duly convened general extraordinary shareholders’ meeting, unless
the company’s bylaws impose a higher threshold. Dissenting shareholders are not entitled to appraisal rights. Creditors have 90 days to oppose a merger judicially, provided they have a legal interest to oppose the merger. Under Delaware law, with certain exceptions, a merger, consolidation, or sale of all or substantially all the assets of a corporation must be approved by the Board of Directors and a majority of the outstanding shares entitled to vote thereon. Under Delaware law, a shareholder of a corporation participating in certain major corporate transactions may, under certain circumstances, be entitled to appraisal rights pursuant to which the shareholder may receive payment in the amount of the fair market value of the shares held by the shareholder (as determined by a court) in lieu of the consideration the shareholder would otherwise receive in the transaction. Delaware law also provides that a parent corporation, by resolution of its Board of Directors and without any shareholder vote, may merge with any subsidiary of which it owns at least 90% of each class of capital share. Upon any such merger, dissenting shareholders of the subsidiary would have appraisal rights. Anti-Takeover Provisions Subject to the approval of the CNBV, the Mexican Securities Law permits public companies to include anti-takeover provisions in their bylaws that restrict the ability of third parties to acquire control of the company without obtaining approval of the company’s board of directors. Under Delaware law, corporations can implement shareholder rights plans and other measures, including staggered terms for directors and super-majority voting requirements, to prevent takeover attempts. Delaware law also prohibits a publicly held Delaware corporation from engaging in a business combination with an interested shareholder for a period of three years after the date of the transaction in which the shareholder became an interested shareholder unless:
165 Shareholders’ Suits As mentioned above, holders of 5% of our outstanding shares may initiate action against some or all of our directors for violations of their duty of care or duty of loyalty, for our benefit, in an amount equal to the damages or losses caused to us. Actions initiated on these grounds have a five-year statute of limitations and will not be applicable if the relevant directors acted under any of the exclusions set forth under the Mexican Securities Law. Procedures for class-action lawsuits were incorporated into Mexican law and became effective in March 2012. However, these rules and procedures are different and more limited than those in place in the United States. Class actions and derivative actions are generally available to shareholders under Delaware law for, among other things, breach of fiduciary duty, corporate waste and actions not taken in accordance with applicable law. In these kinds of actions, the court generally has discretion to permit the winning party to recover attorneys’ fees incurred in connection with the action.
Shareholder Proposals Under Mexican law and our bylaws, holders of at least 10% of our outstanding capital stock are entitled to appoint one member of our Board of Directors and his or her alternate. Delaware law does not include a provision restricting the manner in which nominations for directors may be made by shareholders or the manner in which business may be brought before a meeting. Calling of Special Shareholders’ Meetings Under Mexican law and our bylaws, a shareholders’ meeting may be called by the Board of Directors, any two directors, the chairman, the secretary, the Audit Committee or the Corporate Practices, Finance, Planning and Sustainability Committee. Any shareholder or group of shareholders with voting rights representing at least 10% of our capital stock may request that the chairman of the Board of Directors, the Audit Committee or the Corporate Practices, Finance, Planning and Sustainability Committee call a shareholders’ meeting to discuss the matters indicated in the written request. If the chairman of the Board of Directors, the Audit Committee or the Corporate Practices, Finance, Planning and Sustainability Committee fails to call a meeting within 15 calendar days following date of the written request, the shareholder or group of shareholders may request that a competent court call the meeting. A single shareholder may call a shareholders’ meeting if no meeting has been held for two consecutive years or if matters to be dealt with at an ordinary shareholders’ meeting have not been considered. Delaware law permits the board of directors or any person who is authorized under a corporation’s certificate of incorporation or bylaws to call a special meeting of shareholders. Cumulative Voting Under Mexican law, cumulative voting for the election of directors is not permitted. Under Delaware law, cumulative voting for the election of directors is permitted only if expressly authorized in the certificate of incorporation. Approval of Corporate Matters by Written Consent Mexican law permits shareholders to take action by unanimous written consent of the holders of all shares entitled to vote. These resolutions have the same legal effect as those adopted in a general or special shareholders’ meeting. The board of directors may also approve matters by unanimous written consent. Delaware law permits shareholders to take action by written consent of holders of outstanding shares having more than the minimum number of votes necessary to take the action at a shareholders’ meeting at which all voting shares were present and voted. 166 Amendment of Certificate of Incorporation Under Mexican law, it is not possible to amend a company’s certificate of incorporation (acta constitutiva). However, the provisions that govern a Mexican company are contained in its bylaws, which may be amended as described below. Under Delaware law, a company’s certificate of incorporation generally may be amended by a vote of the majority of shareholders entitled to vote thereon (unless otherwise provided in the Certificate of Incorporation), subsequent to a resolution of the board of directors proposing such amendment. Amendment of Bylaws Under Mexican law, amending a company’s bylaws requires shareholder approval at an extraordinary shareholders’ meeting. Mexican law requires that at least 75% of the shares representing a company’s outstanding capital stock be present at the meeting in the first call (unless the bylaws require a higher threshold) and that the
resolutions be approved by a majority of the shares representing a company’s outstanding capital stock. In addition, pursuant to our bylaws, the amendment of our bylaws requires the approval of either (i) holders of at least 95% of our outstanding capital stock or (ii) holders of at least a majority of our outstanding capital stock, including, for so long as the Series BB shares represent at least 7.65% of our capital stock, a majority of holders of Series BB shares. Under Delaware law, holders of a majority of the voting power of a corporation and, if so provided in the certificate of incorporation, the directors of the corporation, have the power to adopt, amend and repeal the bylaws of a corporation. Staggered Board of Directors Mexican law does not permit companies to have a staggered board of directors, while Delaware law does permit corporations to have a staggered board of directors. Our subsidiaries are parties to the airport concessions granted by the Ministry of Infrastructure, Communications and Transportation under which we are required to construct, operate, maintain and develop the airports in exchange for certain benefits. See “—Sources of Regulation” and “—Scope of Concessions and General Obligations of Concession Holders” under “Regulatory Framework” in Item 4. We are a party to a participation agreement with SETA and the Ministry of Infrastructure, Communications and Transportation that establishes the framework for several other agreements to which we are a party. See “Item 7. Major Shareholders and Related-Party Transactions—Related-Party Transactions—Arrangements Relating to SETA.” We have entered into a Technical Assistance Agreement with SETA providing for management and consulting services. The Technical Assistance Agreement was amended on December 14, 2020 with effect as of December 14, 2020. See “Item 7. Major Shareholders and Related-Party Transactions—Related-Party Transactions—Arrangements Relating to SETA.” Mexico has had free market for foreign exchange since 1991, and the government has allowed the peso to float freely against the U.S. dollar since December 1994. The government may not maintain its current foreign exchange policies. See “Item 3. Key Information—Exchange Rates.” 167 The following summary contains a description of the material anticipated U.S. and Mexican federal income tax consequences of the purchase, ownership and disposition of our Series B shares or ADSs by a beneficial holder that is a citizen or resident of the United States or a U.S. domestic corporation or that otherwise will be subject to U.S. federal income tax on a net income basis in respect of our Series B shares or ADSs and that is a “non-Mexican holder” (as defined below) (a “U.S. holder”), but it does not purport to be a comprehensive description of all of the tax considerations that may be relevant to a decision to purchase our Series B shares or ADSs. In particular, the summary deals only with U.S. holders that will hold our Series B shares or ADSs as capital assets and does not address the tax treatment of special classes of U.S. holders such as dealers in securities or currencies, U.S. holders whose functional currency is not the U.S. dollar, U.S. holders that own or are treated as owning 10% or more of our outstanding shares by vote or value, tax-exempt organizations, financial institutions, U.S. holders liable for the alternative minimum tax, securities traders who elect to account for their investment in Series B shares or ADSs on a mark-to-market basis and persons holding Series B shares or ADSs in a hedging transaction or as part of a straddle, conversion or other integrated transaction for U.S. federal income tax purposes, or entities that are treated as partnerships for U.S. federal income tax
purposes (or partners therein). In addition, the summary does not address any U.S. or Mexican state or local tax considerations that may be relevant to a U.S. holder, or the Medicare tax on net investment income. The summary is based upon the federal income tax laws of the United States and Mexico as in effect on the date of this Form For purposes of this summary, the term “non-Mexican holder” shall mean a holder that is not a resident of Mexico and that will not hold the Series B shares or ADSs or a beneficial interest therein in connection with the conduct of a trade or business through a permanent establishment or fixed base in Mexico. For purposes of Mexican taxation, the definition of residency is highly technical, and residency results in several situations. Generally an individual is a resident of Mexico if he or she has established his or her home in Mexico, and a corporation is a resident if it is incorporated under Mexican law or it has its center of interests in Mexico. An individual who has a home in Mexico and another country will be considered to be a resident of Mexico if Mexico is the individual’s significant center of interest. An individual’s significant center of interest will be considered Mexico in the following circumstances, among other factors: (i) when more than 50% of such person’s total yearly income originates in Mexico and (ii) when Mexico is the individual’s principal place of business. Additionally, Mexican officers and employees working for the Mexican government but living outside of Mexico will be considered to be Mexican residents even if their significant center of interest is not in Mexico. However, any determination of residence should take into account the particular situation or each person or legal entity. In general, for U.S. federal income tax purposes, holders of ADSs will be treated as the beneficial owners of the Series B shares represented by those ADSs. Taxation of Dividends Mexican Tax Considerations Dividends paid to non-Mexican holders with respect to our Series B shares and, as a consequence, with respect to ADSs, are subject to Mexican withholding tax at the rate of 10% on the gross amount of the dividend distributed. This withholding tax may not apply to dividend distributions related to certain retained earnings for years prior to 2013. Such 10% withholding tax will be remitted to the Mexican tax authorities as a definitive payment on behalf of the non-Mexican holders. 168 Non-Mexican holders that are residents of a Treaty Country may be entitled to a benefit under the provisions of the applicable treaty, such as a reduced tax rate; therefore, each U.S. Federal Income Tax Considerations Subject to the discussion below regarding the passive foreign investment company rules, the gross amount of any distributions paid with respect to the Series B shares or ADSs, to the extent paid out of our current or accumulated earnings and profits, as determined for U.S. federal income tax purposes, generally will be includible in the gross income of a U.S. holder as ordinary income on the date on which the distributions are received by the U.S. holder in the case of Series B shares, or by the depositary in the case of ADSs, and will not be eligible for the dividends received deduction
allowed to certain corporations under the U.S. Internal Revenue Code of 1986, as amended. To the extent that a distribution exceeds our current and accumulated earnings and profits, it will be treated as a non-taxable return of basis to the extent thereof, and thereafter as capital gain from the sale of Series B shares or ADSs. We do not expect to maintain calculations of our earnings and profits in accordance with U.S. federal income tax principles. U.S. 169 Dividends generally will be treated as “passive category” income from foreign sources for U.S. foreign tax credit limitation purposes. A U.S. holder may be eligible, subject to a number of complex limitations, to claim a foreign tax credit for any Mexican withholding tax imposed with respect to the Series B shares or ADSs.
Taxation of Dispositions of Shares or ADSs ADSs-Mexican Tax Considerations
The Mexican income taxation of the proceeds of a sale of our Series B shares or ADSs by a Non-Mexican Holder Not Resident in Treaty Country Gain on the sale of our Series B shares or ADSs by a
Non-Mexican Holder Resident in Treaty Country Gain on the sale of our Series B shares or ADSs by a 170 Under the Tax Treaty, a holder that is eligible to claim the benefits of the Tax Treaty will be exempt from Mexican tax on gains realized on a sale or other disposition of the Series B shares, so long as the holder did not own, directly or indirectly, 25% or more of our capital stock (including through ADSs) within the 12-month period preceding such sale or other disposition. Sales Not Subject to the Reduced 10% Withholding Rate For a non-Mexican holder that does not carry out the sale through an authorized stock exchange, the proceeds obtained from the sale or disposition of our Series B shares or ADSs will be subject to a 25% tax on the full sale price. Under certain circumstances, and provided certain requirements set forth by the Mexican Income Tax Law are complied with, non-Mexican holders, alternatively, may pay a 35% tax on the gain obtained from the transaction. This 25%/35% regime would also apply in the following cases: (i) sales of our Series B shares or ADSs that were acquired by the transferor outside of the Mexican Stock Exchange, or other recognized markets set forth in the Mexican Federal Tax Code; (ii) sales made by a person or group of persons that, directly or indirectly, holds 10% or more of the shares representing our capital stock, or that holds a controlling interest in us, if in a period of 24 months, a sale of 10% or more of our fully-paid shares, or of a controlling interest in us, is carried out through one or several simultaneous or successive transactions, including those carried out through derivative instruments or other similar transactions; (iii) pre-negotiated trades executed through the facilities of the Mexican Stock Exchange; and (iv) trades of shares obtained as a result of our merger or spin-off, in certain cases. In cases in which the 25%/35% regime is applicable, if the U.S. Federal Income Tax Considerations Assuming we are not treated as a PFIC (as discussed above under Taxation of Dividends—U.S. Federal Income Tax Considerations), upon the sale or other disposition of the Series B shares or ADSs, a U.S. holder generally will recognize capital gain or loss in an amount equal to the difference between the amount realized on the sale or other disposition and such U.S. holder’s tax basis in the Series B shares or ADSs. Gain or loss recognized by a U.S. holder on such sale or other disposition generally will be long-term capital gain or loss if, at the time of the sale or other disposition, the Series B shares or ADSs have been held for more than one year. Long-term capital gain recognized by a U.S. holder that is an individual is subject to lower rates of federal income taxation than ordinary income or short-term capital gain. The deduction of a capital loss is subject to limitations for U.S. federal income tax purposes. Deposits and withdrawals of Series B shares by U.S. holders in exchange for ADSs will not result in the realization of gain or loss for U.S. federal income tax purposes. Gain, if any, realized by a U.S. holder on the sale or other disposition of the Series B shares or ADSs generally will be treated as U.S. source income for U.S. foreign tax credit purposes.
Other Mexican Taxes There are no Mexican inheritance, gift, succession or value added taxes applicable to the ownership, transfer or disposition of the Series B shares or ADSs by non-Mexican holders; provided, however, that gratuitous transfers of the Series B shares or ADSs may in certain circumstances cause a Mexican federal tax to be imposed upon the recipient. There are no Mexican stamp, issue, registration or similar taxes or duties payable by non-Mexican holders of the Series B shares or ADSs. 171 Specified Foreign Financial Assets Certain U.S. U.S. Backup Withholding Tax and Information Reporting Requirements In general, information reporting requirements will apply to payments by a paying agent within the United States to a non-exempt U.S. holder of dividends in respect of the Series B shares or ADSs or the proceeds received on the sale or other disposition of the Series B shares or ADSs, and a backup withholding tax may apply to such amounts if the U.S. holder fails to provide an accurate taxpayer identification number to the paying agent. Backup withholding is not an additional tax. Amounts withheld as backup withholding tax will be allowed as a refund or credit against the U.S. holder’s U.S. federal income tax liability, provided that the required information is timely furnished to the A holder that is a foreign corporation or a non-resident alien individual may be required to comply with certification and identification procedures in order to establish its exemption from information reporting and backup withholding. The materials included in this annual report on Form A translation of this annual report on Form 20-F will be filed with the Mexican Stock Exchange and will be available for consultation through the Mexican Stock Exchange. The person responsible of handling requests from investors and analysts on our behalf is our Chief Financial Officer, Ruffo Pérez Pliego del Castillo, who can be reached at Plaza Metrópoli Patriotismo, Piso 5, Av. Patriotismo 201, Col. San Pedro de los Pinos, Benito Juárez , Ciudad de México, México.
Item 11. Quantitative and Qualitative Disclosures About Market Risk Foreign Currency Exchange Rate Risk Our principal exchange rate risk involves changes in the value of the Mexican peso relative to the U.S. dollar. Historically, a significant portion of the revenues generated by our airports (principally derived from passenger charges for international passengers) has been denominated in or linked to the U.S. dollar, although such revenues are largely collected in Mexican pesos based on the average exchange rate for the prior month. In In addition, we Item 12. Description of Securities Other Than Equity Securities Not applicable. Not applicable. Not applicable. Not applicable. Item 12D. American Depositary Shares JPMorgan Chase Bank, N.A., serves as the depositary for our ADSs, and the address of its principal office is 4 New York Plaza, Floor 12, New York, New York, 10004. ADS holders are required to pay various fees to the depositary. On August 9, 2016, the Deposit Agreement among us and the depositary was amended to, among other things, implement certain changes in the form of American Depositary Receipt.
The following table sets forth the fees and charges that a holder of our ADSs may have to pay, directly or indirectly. For more complete information regarding ADRs, you should read the entire deposit agreement and the form of ADR.
The depositary of our ADSs, JPMorgan Chase Bank, N.A., collects its fees directly from investors depositing shares or surrendering ADSs for the purpose of withdrawal or from intermediaries acting for them. The depositary collects these fees by deducting them from the amounts distributed or by selling a portion of distributable property to pay the fees. For example, the depositary may deduct from cash distributions, directly bill investors or charge the book-entry
system accounts of participants acting for them. The depositary may generally refuse to provide fee-attracting services until its fees for these services are paid. 174 The following table sets forth the amounts that we received in
JPMorgan Chase Bank, N.A., as depositary of our ADSs, has agreed to reimburse us for expenses it incurs that are related to establishment and maintenance expenses of the ADS program. The depositary has agreed to reimburse us for its continuing annual stock exchange listing fees. It has also agreed to reimburse us annually for certain investor relationship programs. There are limits on the amount of expenses for which the depositary will reimburse us, but the amount of reimbursement available to us is not necessarily tied to the amount of fees the depositary collects from investors. PART II Item 13. Defaults, Dividend Arrearages and Delinquencies Not applicable. Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds Not applicable. Item 15. Controls and Procedures (a) Disclosure Controls and Procedures We have evaluated, with the participation of our chief executive officer and chief financial officer, the design and operation of our disclosure controls and procedures as of December 31, There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, including the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives. Based upon our evaluation, our chief executive officer and chief financial officer concluded that as of December 31,
(b) Management’s Annual Report on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Securities and Exchange Act of 1934. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS. Our internal control over financial reporting includes those policies and procedures that:
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies and procedures may deteriorate. Under the supervision of our chief executive officer and chief financial officer, our management assessed the design and effectiveness of our internal control over financial reporting as of December 31, In making its assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission, or COSO, in Internal Control—Integrated Framework (2013), which has been early-adopted. Based on our assessment and those criteria, our management has concluded that we maintained effective internal control over financial reporting as of December 31,
(c) Report of Independent Registered Public Accounting Firm Report of Independent Registered Public Accounting Firm to the Shareholders and the Board of Directors of Grupo Aeroportuario del Centro Norte, S. A. B. de C. V. and subsidiaries Opinion on Internal Control over Financial Reporting We have audited the internal control over financial reporting of Grupo Aeroportuario del Centro Norte, S.A.B. de C.V. and subsidiaries (the We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended December 31, Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control over Financial Reporting A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. 177 /s/ Galaz, Yamazaki, Ruiz Urquiza, S.C.
México City, Mexico April (d) Changes in Internal Control over Financial Reporting There has been no change in internal controls over financial reporting during
Item 16. [Reserved]
Item 16A. Audit Committee’s Financial Expert Our Board of Directors has determined that Mr.
We have adopted a code of ethics, as defined in Item 16B of Form 20-F under the Securities Exchange Act of 1934, as amended. Our code of ethics applies to our Board of Directors, chief executive officer, chief financial officer, chief accounting officer and persons performing similar functions as well as to our other officers and employees. Our code of ethics is filed as an exhibit to this Form 20-F and is available on our website at www.oma.aero. If we amend the provisions of our code of ethics that apply to our chief executive officer, chief financial officer, chief accounting officer and persons performing similar functions, or if we grant any waiver of such provisions, we will disclose such amendment or waiver on our website at the same address. Item 16C. Principal Accountant Fees and Services Audit and Non-Audit Fees The following table sets forth the fees billed to us by our independent auditors, Galaz, Yamazaki, Ruiz Urquiza, S.C., an affiliate of a member entity of Deloitte Touche Tohmatsu Limited (Deloitte), during the fiscal years ended December 31,
Audit fees in the above table are the aggregate fees billed by Deloitte in connection with audits of both our consolidated financial statements and those financial statements of our subsidiaries and other statutory audit reports, in addition to their internal control attestation report. All other fees in the above table are fees billed by Deloitte for services in connection with 178 Audit Committee Pre-Approval Policies and Procedures Our Audit Committee has not established pre-approval policies and procedures for the engagement of our independent auditors for services. Our Audit Committee expressly approves on a case-by-case basis any engagement of our independent auditors for audit and non-audit services provided to our subsidiaries or to us. Item 16D. Exemptions from the Listing Standards for Audit Committees Not applicable. Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers We did not, directly or indirectly, purchase any of our equity securities in 2022.
Item 16F. Change in Registrant’s Certifying Accountant Not applicable. Item 16G. Corporate Governance Pursuant to Rule 5615(a)(3) of the NASDAQ Stock Market, Inc. (NASDAQ) Marketplace Rules, we are required to provide a summary of the significant ways in which our corporate governance practices differ from those required for U.S. companies under the NASDAQ listing standards. We are a Mexican corporation with shares listed on the Mexican Stock Exchange. Our corporate governance practices are governed by our bylaws, the Mexican Securities Law and the regulations issued by the CNBV. On December 30, 2005, a new Mexican Securities Law was published in the Federal Official Gazette, which became effective on June 28, 2006. The table below discloses the significant differences between our corporate governance practices and the NASDAQ standards.
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Item 16H. Mine Safety Disclosures Not applicable. Item 16I. Disclosure regarding foreign jurisdictions that prevent inspections Not applicable.
PART III Not applicable. Reference is made to pages F-1 through Documents filed as exhibits to this annual
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* Filed herewith
SIGNATURES The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this registration statement on its behalf.
*****
Grupo Aeroportuario del Centro Norte, S. A. B. de C. V. and Subsidiaries ( Consolidated Financial Statements for the Years Ended December 31, F-1 Grupo Aeroportuario del Centro Norte, S. A. B. de C. V. and Subsidiaries ( Report of Independent Registered Public Accounting Firm and Consolidated Financial Statements for the Years Ended December 31,
F-2 Index for Notes to Consolidated Financial Statements
F-3 Report of Independent Registered Public Accounting Firm to the Shareholders and the Board of Directors of Grupo Aeroportuario del Centro Norte, S. A. B. de C. V. and Subsidiaries (Thousands of Mexican pesos) Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated statements of financial position of Grupo Aeroportuario del Centro Norte, S. A. B. de C. V. and subsidiaries (the Our audits also comprehended the translation of Mexican peso amounts into U.S. dollar amounts and, in our opinion, such translation has been made in conformity with the basis stated in Note We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31,
Basis for Opinion These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. F-4 Critical Audit The critical audit
challenging, subjective, or complex judgments. The communication of critical audit
Critical Audit Matter Description
We identified the How the Critical Audit Matter Was Addressed in the Audit Our audit procedures related to the
/s/ Galaz, Yamazaki, Ruiz Urquiza, S.C.
México City, Mexico April
We have served as the Company’s auditor since 2000.
Grupo Aeroportuario del Centro Norte, S. A. B. de C. V. and Subsidiaries (Affiliate of Servicios de Tecnología Aeroportuaria, S.A. de C.V.) Consolidated Statements of Financial Position (Thousands of Mexican pesos)
F-6 Grupo Aeroportuario del Centro Norte, S. A. B. de C. V. and Subsidiaries ( Consolidated Statements of Financial Position (Thousands of Mexican pesos)
The accompanying notes are an integral part of these consolidated financial statements.
Grupo Aeroportuario del Centro Norte, S. A. B. de C. V. and Subsidiaries ( Consolidated Statements of Income and OtherComprehensive Income (Thousands of Mexican pesos, except per share data)
The accompanying notes are an integral part of these consolidated financial statements.
Grupo Aeroportuario del Centro Norte, S. A. B. de C. V. and Subsidiaries ( Consolidated Statements of Changes in Shareholders’ Equity (Thousands of Mexican pesos, except share data (Note 22))
The accompanying notes are an integral part of these consolidated financial statements.
Grupo Aeroportuario del Centro Norte, S. A. B. de C. V. and Subsidiaries ( Consolidated Statements of Cash Flows (Thousands of Mexican pesos)
The accompanying notes are an integral part of these consolidated financial
Grupo Aeroportuario del Centro Norte, S. A. B. de C. V. and Subsidiaries ( Notes to the Consolidated Financial Statements For the years ended December 31, (In thousands of Mexican pesos, except otherwise indicated) 1. Nature of business operations Grupo Aeroportuario del Centro Norte, S. A. B. de C. V. (“GACN” or the “Company”), is The address of the Company’s corporate office is Patriotismo #201, 5th Floor, San Pedro de los Pinos, Mexico City, Zip Code 03800.
On On December 7, 2022, the indirect acquisition of 29.99% of the shares representing the capital stock of GACN was consummated. The transaction was carried out through the purchase by VINCI of 100% of the shares representing the capital stock of Servicios de Tecnología Aeroportuaria, S.A. de C.V. (“SETA”) and of Aerodrome Infrastructure S.á r. l. (“Aerodrome”) which, as of the date of the sale, owned 49,766,000 series BB shares of GACN and 7,516,377 series B shares of GACN , in the case of SETA, and 58,529,833 series B shares of GACN , in the case of Aerodrome. The purchase price for SETA was approximately US$578.7 million and for Aerodrome, net of debt, including intercompany debt of Aerodrome, was approximately US$240.8 million. This transaction had no financial and accounting effect that had to be recognized in the Company's financial statements as the indirect acquisition of shares of GACN did not represent any resources received or expenditure made by the Company, nor a change in the number of shares outstanding.
On March 31, 2022, GACN issued sustainability-linked debt securities for a total of Ps.4,000,000 in two tranches, one at a variable rate and the other at a fixed rate. The variable rate tranche, in the amount of Ps.1,700,000, matures in 5 years and bears interest at 28-day TIIE plus 14 basis points. The fixed rate tranche, in the amount of Ps.2,300,000, maturing in 7 years, bears interest at a rate of 9.35%. In both cases, the principal amount will be paid in a single installment at maturity. F-11 The proceeds of the issuance were used to repay Ps.2,700,000 of short-term bank debt and the remainder will be used primarily to finance the investment plan under the Master Development Programs
On January 7, 2022, in accordance with the resolutions adopted by its General Ordinary and Extraordinary Shareholders’ Meeting, held on December 22, 2021, the Board of Directors with the power delegated by the
At the Annual Ordinary
3. Basis of presentation and consolidation
The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS), including amendments and interpretations, as issued by the International Accounting Standards Board (IASB).
According to the requirements of the Mexican National Banking and Securities Commission
The consolidated financial statements have been prepared on the historical cost basis; notwithstanding, fair value is disclosed in certain cases. In addition, the Company determines the fair value of certain financial instruments for disclosures purposes.
Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Company takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in these consolidated financial statements is determined on such a basis, except for share-based payment transactions that are within the scope F-12 In addition, for financial reporting purposes, fair value measurements are categorized into Level 1, 2 or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:
Solely for convenience of readers, peso amounts included in the consolidated financial statements as of December 31,
The Mexican peso, legal currency of the United Mexican States is the currency in which the consolidated financial statements are presented (reporting currency) and the Company’s functional currency. Transactions in currencies other than the peso are recorded in accordance with established policies described in note 4 b.
The Company chose to present the consolidated statement of income and other comprehensive income in a single statement, as well as presenting operating income in such statement in accordance with practices in the industry. Costs and expenses were classified according to their nature.
The Company presents the cash flows from operating activities using the indirect method, in which the profit or loss is adjusted to reflect the effect of transactions that do not require cash flow, including those associated with investment or financing activities.
The consolidated financial statements incorporate the financial statements of GACN and its subsidiaries. Control is achieved when GACN or its subsidiaries:
The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above. F-13 When the Company has less than a majority of the voting rights of an investee, it has power over the investee when the voting rights are sufficient to give it the practical ability to direct the relevant activities of the investee unilaterally. The Company considers all relevant facts and circumstances in assessing whether or not the Company’s voting rights in an investee are sufficient to give it power, including:
Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company loses control of the subsidiary. Specifically, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated statement of income and other comprehensive income from the date the Company gains control until the date when the Company ceases to control the subsidiary. The income and each component of other comprehensive income are attributed to the Company’s owners and to the non-controlling interests. The non-controlling interests in equity of subsidiaries are presented separately as non-controlling interests in the consolidated statements of financial position, within the shareholders’ equity section, and the consolidated statements of income and other comprehensive income. The financial statements of companies that are included in the consolidation are prepared as of December 31 of each year.
All intra-group transactions, balances, income and expenses are eliminated in full on consolidation.
Note 11 sets forth the entities that are consolidated on the financial statements and the information related thereto. 4. Significant accounting policies The consolidated financial statements are prepared in accordance with IFRS. Preparation of financial statements under IFRS requires the Company’s management to make certain estimates and use assumptions to value certain of the items in the consolidated financial statements as well as their related disclosures required therein. The areas with a high degree of judgment and complexity or areas where assumptions and estimates are significant in the consolidated financial statements are described in note 5. The estimates are based on information available at the time the estimates are made, as well as the best knowledge and judgment of management based on experience and current events. However, actual results could differ from those estimates. The Company has implemented control procedures to ensure that its accounting policies are appropriate and are properly applied. Although actual results may differ from those estimates, the Company’s management believes that the estimates and assumptions used were adequate under the circumstances. The consolidation requirements, accounting policies and valuation methods used in preparing the consolidated financial statements as of and for the year ended December 31,
In the current year, the Company has applied
At the date of authorization of these financial statements, the Company has not applied the following new and
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1) |
Effective for annual periods beginning on January 1, 2023 |
2) | Effective day has not yet been defined by the IASB. |
Management does not expect that the adoption of these and modifications will have a significant impact on the consolidated financial statements of the Company.
b. | Foreign currency transactions |
Foreign currency transactions are recorded at the exchange rate in effect at the date of the transaction date. Monetary assets and liabilities denominated in foreign currency are translated into Mexican pesos at the exchange rate prevailing at the end of the reporting period. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.
Exchange fluctuations are recorded in profit or loss, except for exchange differences on foreign currency borrowings relating to assets under construction for future productive use, which are included in the cost of those assets when they are regarded as an adjustment to interest costs on those foreign currency borrowings.
c. | Cash and cash equivalents |
Cash and cash equivalents consist mainly of bank deposits in checking accounts and short-term investments, highly liquid and easily convertible into cash, maturing within three months as of their acquisition date, which are subject to immaterial value change risks. Cash is stated at nominal value and cash equivalents are measured at fair value.
d. | Financial instruments |
Financial assets and financial liabilities are recognized in the Company’s statement of financial position when the Company becomes a party to the contractual provisions of the instrument.
F-20
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognized immediately in profit or loss.
F-16
Financial assets
All purchases or sales of financial assets in the ordinary course of business are recognized and derecognized on a trade date basis. Purchases or sales in the ordinary course of business are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace.
All recognized financial assets are measured subsequently in their entirety at either amortized cost or fair value, depending on the classification of the financial assets.
As of December 31, 2020, 20192022, 2021 and 2018,2020, all of the Company’s financial assets have been recognized at amortized cost.
i) | Amortized cost and effective interest method |
The effective interest method is a method of calculating the amortized cost of a debt instrument and of allocating interest income over the relevant period.
The effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees and amounts paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) excluding expected credit losses, through the expected life of the debt instrument, or, where appropriate, a shorter period, to the gross carrying amount of the debt instrument on initial recognition.
The amortized cost of a financial asset is the amount at which the financial asset is measured at initial recognition minus the principal repayments, plus the cumulative amortization using the effective interest method of any difference between that initial amount and the maturity amount, adjusted for any loss allowance. The gross carrying amount of a financial asset is the amortized cost of a financial asset before adjusting for any loss allowance.
ii) | Financial assets at fair value through other comprehensive income (FVTOCI) |
Financial assets at fair value through other comprehensive income are those whose business model is based on obtaining contractual cash flows and selling financial assets, in addition to their contractual conditions giving rise, on specified dates, to cash flows that they are only payments of the principal and interest on the outstanding principal amount. As of December 31, 2020,2022, the Company does not have financial assets at fair value through other comprehensive income.
iii) | Financial assets at fair value through profit or loss (FVTPL) |
Financial assets are classified at fair value through profit or loss when the financial asset is held for trading, or it is designated as fair value through profit or loss. As of December 31, 2020, 20192022, 2021 and 2018,2020, the Company does not have financial assets at fair value through profit.
F-21F-17
Impairment of financial assets
The Company recognizes a loss allowance for expected credit losses on investments in debt instruments that are measured at amortized cost or at FVTOCI, trade receivables and contract assets. The amount of expected credit losses is updated at each reporting date to reflect changes in credit risk since initial recognition of the respective financial instrument.
The Company recognizes lifetime expected credit losses (ECL) for trade receivables and contract assets. The expected credit losses on these financial assets are estimated using a provision matrix based on the Company’s historical credit loss experience, adjusted for factors that are specific to the debtors, including general economic conditions.
For all other financial instruments, the Company recognizes lifetime ECL when there has been a significant increase in credit risk since initial recognition. However, if the credit risk on the financial instrument has not increased significantly since initial recognition, the Company measures the loss allowance for that financial instrument at an amount equal to 12-month ECL.
Lifetime ECL represents the expected credit losses that will result from all possible default events over the expected life of a financial instrument. In contrast, 12-month ECL represents the portion of lifetime ECL that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date.
Significant increase in credit risk
In assessing whether the credit risk on a financial instrument has increased significantly since initial
recognition, the Company compares the risk of a default occurring on the financial instrument at the reporting date with the risk of a default occurring on the financial instrument at the date of initial recognition. In making this assessment, the Company considers both quantitative and qualitative information that is reasonable and supportable, including historical experience and forward-looking information that is available without undue cost or effort.
i) | Definition of default |
The Company considers the following as constituting an event of default for internal credit risk management purposes as historical experience indicates that financial assets that meet either of the following criteria are generally not recoverable:
● | When there is a breach of financial covenants by the debtor; or |
● | The information developed internally or obtained from external sources indicates that the debtor is unlikely to pay its creditors, including the Company, in full (without taking into account any collateral held by the Company). |
Irrespective of the above analysis, the Company considers that default has occurred when a financial asset is more than 90 days past due unless the Company has reasonable and supportable information to demonstrate that a more lagging default criterion is more appropriate.
ii) | Credit-impaired financial assets |
A financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of that financial asset have occurred.
iii) | Write-off policy |
F-22
The Company writes off a financial asset when there is information indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery, e.g., when the debtor has been placed under liquidation or bankruptcy proceedings. Any recoveries made are recognized in profit or loss.
F-18
iv) | Measurement and recognition of expected credit losses |
According to IFRS 9, the Company recognizerecognizes a provision of expected credit losses in the financial assets such as trade receivables and other financial assets. The expected credit losses on these financial assets are estimated from the initial recognition of the asset at each reporting date, using as a reference the past experience of the Company’s credit losses, adjusted for factors that are specific to the debtors or groups of debtors, the general economic conditions and an assessment of both, management and conditions existing as of the reporting date, including the time value of money where appropriate.
The measurement of expected credit losses is a function of the probability of default, loss due to a default (i.e., the magnitude of the loss if there is a default) and the exposure at default. The assessment of the probability of default and loss due to a default is based on historical data adjusted by forward-looking information as described above. As for the exposure at default for financial assets, this is represented by the assets’ gross carrying amount at the reporting date.
For financial assets, the expected credit loss is estimated as the difference between all contractual cash flows that are due to the Company in accordance with the contract and all the cash flows that the Company expects to receive, discounted at the original effective interest rate.
Derecognition of financial assets
The Company derecognizes a financial asset only when the contractual rights to the cash flows from the asset expires, or when it transfers to another entity the financial asset and substantially all the risks and rewards of ownership of the asset.
On derecognition of a financial asset measured at amortized cost, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognized in profit or loss.
Financial liabilities and equity
Classification as debt or equity
Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangements and the definitions of a financial liability and an equity instrument.
Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Company are recognized at the proceeds received, net of direct issue costs.
The Company records a reserve for the repurchase of shares from amounts appropriated from retained earnings, to strengthen the supply and demand of its shares in the stock market, as permitted by Mexican Securities Law. The shareholders’ meeting authorizes the maximum disbursement for the repurchase of shares to be used for this activity in each period between said meeting and the following, in which the application of results is approved and made.
F-23
At the time of a purchase, shares are converted into treasury shares and become part of the shareholders’ equity at the purchase price; one part of the capital stock to the historical value, and the remainder to the reserve to repurchase shares.
Financial liabilities
All financial liabilities are measured subsequently at amortized cost using the effective interest method or at FVTPL.
F-19
Other financial liabilities
Other financial liabilities, including loans, bond issuances and debt with lenders and trade creditors and other payables are valued initially at fair value, represented generally by the consideration transferred, net of transaction costs, and are subsequently measured at amortized cost using the effective interest method.
Derecognition of financial liabilities
The Company derecognizes financial liabilities when, and only when, the obligations are discharged, cancelled or they expire. The difference between the carrying amount of the financial liability derecognized and the consideration paid and payable is recognized in results.
When a financial liability measured at amortized cost is modified without a derecognition, the Company recognizes a gain or loss in the modification, which is calculated as the difference between the amortized cost at the date of the refinancing and the cash flows with the new terms of financing discounted at the effective interest rate of the original debt. In addition, when the Company refinancing the transaction and the previous liability qualifies to be derecognized, the costs incurred in the refinancing are recognized immediately in results at the date of the termination of the previous financial liability.
e. | Property, leasehold improvements and equipment, net |
Expenditures for property, leasehold improvements and equipment acquired are carried at acquisition cost. Depreciation is recognized so as to write off the cost or deemed cost of assets (other than freehold land and properties under construction). Depreciation of property, leasehold improvements and equipment is calculated using the straight-line method over the useful life of the asset. Depreciation begins in the month in which the asset is placed in service. The useful lives of assets are as follows:
| | |
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| Useful |
| | Life (years) |
Improvement in leased assets |
| 20 |
Machinery and equipment |
| 10 |
Furniture and office equipment |
| 10 |
Transportation equipment |
| 4 |
Computer equipment |
| 3.3 |
The depreciation of property, leasehold improvements and equipment is recorded in results.
Disposal of assets
The gain or loss on the sale or retirement of an item of property and equipment is calculated as the difference between the proceeds from the sale and the carrying value of the asset and is recognized in income when all risks and rewards of ownership of the asset is transferred to the buyer, which generally occurs when ownership of the asset is transferred to the buyer.
F-24
Replacements or renewals of a component of property or equipment that extend the useful life of the asset, or its economic capacity are recognized as an increase to property and equipment, with the subsequent write-off or derecognition of the assets replaced or renewed.
Construction in progress for leasehold improvement
Construction in progress for leasehold improvement is carried at cost less any recognized impairment loss. Cost includes professional fees and, in the case of qualifying assets, borrowing costs capitalized in accordance with the Company’s accounting policy. Such properties are transferred to the appropriate categories of property and equipment when completed and ready for intended use. The depreciation of these assets, as well as other properties, begins when the assets are ready for use.
F-20
Subsequent costs
Subsequent costs form part of the value of the asset or are recognized as a separate asset only when it is probable that such disbursement represents an increase in productivity, capacity, efficiency or an extension of the life of the asset and the cost of the item can be determined reliably. All other expenses, including repairs and maintenance are recognized in comprehensive income as incurred.
f. | Leases |
- | As lessor |
-As lessor
Leases for which the Company is a lessor are classified as financial leases or operating leases. Whenever the terms of the lease transfer substantially all risks and rewards of ownership in the lessee, the contract is classified as a financial lease. All other leases are classified as operating leases.
Rental income from operating leases is recognized on a straight-line basis over the term of the relevant lease.
Amounts due from lessees under finance leases are recognized as receivables at the amount of the Company’s net investment in the leases. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the Group’s net investment outstanding in respect of the leases.
- | As lessee |
-As lessee
The Company assesses whether a contract is or contains a lease, at inception of the contract. The Company recognizes a right-of-use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low value assets (such as tablets and personal computers, small items of office furniture and telephones). For these leases, the Company recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased assets are consumed.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company's incremental borrowing rate.
Lease payments included in the measurement of the lease liability comprise in:
● | Fixed payments, (including in-substance fixed |
● | Variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement |
● | The amount expected to be payable by the lessee under a residual value |
● | The exercise price of purchase options if the lessee is reasonably certain to exercise the options, and |
● | Payments of penalties for terminating the lease if the lease term reflects the exercise of an option to terminate the lease. |
The lease liability is presented as a separate line in the consolidated statement of financial position.
The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made.
F-21
The Company remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever:
- | The lease term has changed or there is a significant event or change in circumstances resulting in a change in the assessment of exercise of a purchase option, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate. |
- | The lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed residual value, in which cases the lease liability is remeasured by discounting the revised lease payments using an unchanged discount rate (unless the lease payments change is due to a change in a floating interest rate, in which case a revised discount rate is used). |
- | A lease contract is modified, and the lease modification is not accounted for as a separate lease, in which case the lease liability is remeasured based on the lease term of the modified lease by discounting the revised lease payments using a revised discount rate at the effective date of the modification. |
- The lease term has changed or there is a significant event or change in circumstances resulting in a change in the assessment of exercise of a purchase option, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate.
- The lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed residual value, in which cases the lease liability is remeasured by discounting the revised lease payments using an unchanged discount rate (unless the lease payments change is due to a change in a floating interest rate, in which case a revised discount rate is used).
- A lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability is remeasured based on the lease term of the modified lease by discounting the revised lease payments using a revised discount rate at the effective date of the modification.
The Company did not make any such adjustments during the periods presented.
Right-of-use assets
Right-of-use assets are depreciated over the shorter period of lease term and useful life of the underlying asset. If a lease transfer’s ownership of the underlying asset or the cost of the right-of-use asset reflects that the Company expects to exercise a purchase option, the related right-of-use asset is depreciated over the useful life of the underlying asset. The depreciation starts at the commencement date of the lease.
The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the commencement day, less any lease incentives received and any initial direct costs. They are subsequently measured at cost less accumulated depreciation and impairment losses.
The right-of-use assets are presented as a separate line in the consolidated statement of financial position.
The Company applies IAS 36 to determine whether a right-of-use asset is impaired and accounts for any identified impairment loss as described in the “Property, Plant and Equipment’ policy.
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g. | Guarantee deposits |
Guarantee deposits correspond to amounts received from lessees to guarantee performance under the lease. They are recorded at cost and are either returned to tenants at the end of the lease term or recognized against services unpaid by tenants.
Additionally, certain agreements were entered into with airlines, which established escrow deposits paid by the airlines to guarantee their obligation for payment of the amounts collected from passengers for the Airport Use Fee (Tarifa de Uso de Aeropuertos or “TUA”) and other airport services.
If the payment obligations are not met, the Company may immediately exercise the guarantees and utilize the funds. The aforementioned escrow deposits are recorded at cost.
h. | Borrowing costs |
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets areis substantially ready for their intended use or sale.
Investment income earned on the temporary investmentF-22
i. | Investment in airport concessions |
This item consists of the rights paid to manage, operate and, in certain cases make capital investments to 13 airports based on a concession granted by the Mexican Government through the Ministry of Infrastructure Communications and Transportation, and to use their facilities, for a 50-year term. term, beginning in 1998.
Investment in concessions includes the rights to use airport facilities of airport concessions and improvements to concessioned assets and represents the amount granted by the Ministry of Infrastructure Communications and Transportation to each airport concessions, plus improvements made to each individual concession since the time of grant.
Under all concession arrangements, (i) the grantor controls or regulates what services the Company must provide with the infrastructure, to whom it must provide them, and at what price; and (ii) the grantor controls, through ownership, any significant residual interest in the infrastructure at the end of the term of the arrangement. Accordingly, the Company classifies the assets derived from the construction, administration and operation of the service concession arrangements either as intangible assets, financial assets (accounts receivable) or a combination of both.
The Company classifies its concessioned assets as an intangible asset, including its improvements.
An intangible asset results when the operator constructs or makes improvements and is allowed to operate the infrastructure for a fixed period after construction is complete, in which the future cash flows of the operator have not been specified, because they may vary depending on the use of the asset and are therefore considered contingent. The cost of financing incurred during the construction period is capitalized.
Investments in airport concessions are amortized on a straight-line basis over the term of the concession, which is 50 years,until 2048, or from the date of capitalization of additions or improvements considering the remaining term of the concession.
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Revenues and costs related to construction or improvements to intangible assets subject to the Company’s airport concession with the government are recognized as revenue based on the percentage of completion method associated with the related construction costs.
The Company classified current construction projects as part of improvements to concessioned assets in progress (contract assets).
j. | Impairment of tangible and intangible assets |
Management periodically evaluates the impairment of long-lived assets in order to determine whether there is evidence that those assets have suffered an impairment loss. If impairment indicators exist, the recoverable amount of assets is determined, with the help of independent experts, to determine the extent of the impairment loss, if any.
Intangible assets with indefinite useful life and intangible assets not yet available for use are tested for impairment at least annually, and wheneverwhenebver there is an indication that the asset may be impaired.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognized immediately in profit or loss.
When an impairment subsequently reverses, the Company reverses a portion, or all of the impairment losses recognized in prior periods. When an impairment loss is reversed, the carrying amount of the asset is increased to the revised estimated value of its recoverable amount, only to the extent that the increased carrying amount does not
F-23
exceed the carrying amount that would have been calculated if no impairment loss had been initially recognized for the asset in prior years. A reversal of an impairment loss is recognized immediately in profit or loss.
The Company considers that each airport individually cannot be considered as a “cash generating unit” to determine the extent of the loss impairment, since the tender for the concession was made by the Mexican Government as a package of 13 airports. Therefore, licensees are obligated to operate them regardless of the results generated individually. Considering the above, the evaluation of a possible impairment loss is performed taking into account the net assets of the 13 airports taken as a whole, while the hotels and industrial park are evaluated individually.
k. | Provisions |
Provisions are recognized when the Company has a present obligation (legal or constructive) as a result of a past event, when it is probable that the Company will be required to settle the obligation, and when a reliable estimate can be made of the amount of the obligation.
The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties associated with the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows, (when the effect of the time value of money is material).
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The main provision recognized by the Company is for major maintenance for its concessioned assets, which is classified as current or noncurrent based on the estimated time period over which it expects to settle the obligation.
l. | Major maintenance provisions |
The Company is required to perform major maintenance activities to its airports as established by the concession provided by the Mexican Government, in order to preserve the infrastructure in optimal working condition. The estimated major maintenance costs are considered in the Company’s Master Development Program, which is reviewed and updated every five years. The Company recognizes and measures the contractual obligations of major maintenance of infrastructure when accrued according to IAS 37 (Provisions,(Provisions, Contingent Liabilities and Contingent Assets)Assets) and IFRS Interpretation Committee 12 (Service(Service Concession Arrangements)Arrangements), a portion is recorded as short-term and the remainder as long-term depending on the period in which the maintenance is expected to be performed. These contractual obligations to maintain and restore the infrastructure of airports are recognized as a provision in the consolidated statements of financial position and in the expenses of the current fiscal year, pursuant to estimates that are required to comply with the present obligation at the end of the reporting period. When the effect of the time value of money is material, the amount of the provision equals the present value of the expenditures expected to be required to settle the obligation. The carrying amount of the provision increases each period to reflect the passage of time and this increase is recognized as an expense. After initial recognition, provisions are reviewed at the end of each reporting period and adjusted to reflect current best estimates.
Adjustments to provisions arise from three sources: (i) revisions to estimated cash flows (both in amount and timing); (ii) changes to present value due to the passage of time; and (iii) revisions of discount rates to reflect prevailing current market conditions.
In periods following the initial recognition and measurement of the maintenance provision at its present value, the provision is revised to reflect estimated cash flows being closer to the measurement date. The unwinding of the discount relating to the passage of time is recognized as a financing cost and the revision of estimates of the amount and timing of cash flows is a remeasurement of the provision and charged or credited as an operating item within the consolidated statements of income and other comprehensive income.
m. | Income taxes |
Income tax expense represents the sum of the tax currently and deferred tax. Current tax is determined based on taxable profit, which differs from profit as reported in the consolidated statement of income and other
F-24
comprehensive income because of items of income or expense that are taxable or deductible in periods different from when they are recognized in accounting profit.
Deferred income taxes are recognized for the applicable temporary differences resulting from comparing the accounting and tax values of assets and liabilities plus any future benefits from tax loss carry forwards. Except as mentioned in the following paragraph, deferred tax liabilities are recognized for all taxable temporary differences and deferred tax assets are recognized for all deductible temporary differences and the expected benefit of tax losses. The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries, except where the Company is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future.
Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognized to the extent that it is probable that there will be sufficient taxable profits against which to utilize the benefits of the temporary differences and they are expected to reverse in the foreseeable future.
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Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities. The Company determined recoverability of its deferred tax assets for each subsidiary based on its projections of future taxable income, which include the Master Development Program and the maximum rates for the period 2021-2025 approved by the Ministry of Infrastructure Communications and Transportation.
Current and deferred income taxes are recognized as income or expense in profit or net loss, except when they relate to items recognized outside of profit or loss, as in the case of items of other comprehensive income, or other shareholders’ equity items, in which case the tax is recognized in other comprehensive income as part of the equity item involved.
Assets and deferred tax liabilities are offset when a legal right to offset assets with liabilities exists and when they relate to income taxes relating to the same tax authorities and the Company intends to liquidate its assets and liabilities on a net basis.
n. | Employee benefits |
Short-term employee benefits
A liability is recognized for benefits accruing to employees in respect of wages and salaries, annual leave and sick leave in the period the related service is rendered at the undiscounted amount of the benefits expected to be paid in exchange for that service.
Certain subsidiaries are subject to payment of statutory employee profit sharing and is recorded in the results of the year in which it is incurred and presented under cost and administrative expenses in the consolidated statements of income and other comprehensive income.
As a result of the Income Tax Law of 2014, as of December 31, 2020, 20192022 and 2018,2021, the PTU is determined based on taxable income according to section I of article 9 of the same Law.
Liabilities recognized in respect of short-term employee benefits are measured at the undiscounted amount of the benefits expected to be paid in exchange for the related services.
F-25
Benefits from retirement and termination
Payments to defined contribution retirement benefit plans are recognized as an expense when employees have rendered service entitling them to the contributions.
F-30
For defined benefit retirement benefit plans for termination and seniority premium, the cost of providing benefits is determined using the projected unit credit method, with actuarial valuations being carried out at the end of each annual reporting period. Remeasurement, comprising actuarial gains and losses, the effect of the changes to the asset ceiling (if applicable) and the return on plan assets (excluding interest), is reflected immediately in the consolidated financial statements with a charge or credit recognized in other comprehensive income in the period in which they occur.
Remeasurement recognized in other comprehensive income may be reclassified directly to retained earnings but will not be reclassified to profit or loss. Past service cost is recognized in profit or loss in the period of a plan amendment. Net interest is calculated by applying the discount rate at the beginning of the period to the net defined benefit liability or asset. Defined benefit costs are categorized as follows:
● | Service cost (including current service cost, past service cost, as well as gains and losses on curtailments and settlements) |
● | Net interest expense or income |
● | Remeasurement |
The Company presents the first two components of defined benefit costs in the consolidated statements of income and other comprehensive income in the line items cost of services and administrative expenses. Curtailment gains and losses are accounted for as past service costs.
The retirement benefit obligation recognized in the consolidated statement of financial position represents the actual deficit or surplus in the Company’s defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any economic benefits available in the form of refunds from the plans or reductions in future contributions to the plans.
A liability for a termination benefitsbenefit is recognized at the earlier of when the Company can no longer withdraw the offer of the termination benefit and when the Company recognizes any related restructuring costs.
o. | Revenue recognition |
The revenues are recognized at the fair value of the consideration received or receivable, net of any discount. The Company applies a 5-step approach to revenue recognition:
● | Step 1: Identify the contract(s) with a |
● | Step 2: Identify the performance obligations in the |
● | Step 3: Determine the transaction |
● | Step 4: Allocate the transaction price to the performance obligations in the |
● | Step 5: Recognize revenue when (or as) the entity satisfies a performance |
Under IFRS 15, an entitythis scope, the Company recognizes revenue when (or as) a performance obligation is satisfied, i.e., when “control” of the goods or services underlying the particular performance obligation is transferred to the customer.
Revenues are mainly generated from the delivery of aeronautical and non-aeronautical services.
F-26
Aeronautical services
Consist mainly of revenues generated from activities related to services provided to airlines and passengers. These revenues are subject to a system of prices regulated by the Ministry of Infrastructure Communications and Transportation, which establishes a maximum rate for such aeronautical and
F-31
complementary services provided at each airport. Such revenues are recognized when the related services are rendered.
With the objective of increasing demand for aeronautical traffic at its airports, the Company implemented an incentive program to its airline customers linked to an increase in airline traffic and the opening of new routes, which is subject to certain restrictions. These incentives are recorded as a reduction of revenues over the period they are provided to clients (see note 27)26).
Non-aeronautical services
Consist mainly of the leasing of commercial spaces in airport terminals (different from spaces occupied by airlines that are essential for their operation), revenues from the operation of parking lots, advertising, fees from access to third parties that provide catering services and other services at airports. Spaces in the airport terminals are rented through operating lease agreements that contain either fixed monthly rent (increased annually based on the National Consumer Price Index (“NCPI”)) or fees based on a minimum monthly fee or a percentage of the monthly income of the lessee, whichever is higher (contingent rent). The fixed portion of lease revenues is recognized when the services are rendered or based on the terms of the related lease.
Contingent rentals received from the percentage of monthly sales from the Company’s leases are recognized in income once the contingency is met. Therefore, during the year, the percentage of lessee monthly revenues is recognized in the following month, once the Company has received information related to its tenants’ revenues. Though each year reported includes twelve months of revenues, this accounting treatment results in a one-month lag with respect to the commercial revenues for those tenants whose stated percentage of monthly income is greater than the minimum monthly fee. However, the Company monitors the effect of this one-month lag at each reporting date and does not believe such effect to be material to its reported results.
The Company’s policy for recognition of revenue from operating leases is described in detail, in subparagraph g)f) of this note (the Company as lessor).
F-32
Hotel services revenues
Revenues are recognized when the services are rendered.
Construction services and costs of improvements to concessioned assets
Under IFRIC 12 (Service Concession Arrangements), the Company recognizes revenues and costs for improvements to the airport concession according to the percentage of completion method derived from the improvements made to the airports and that are included in the Master Development Program. Construction service revenues related to the airport concession are determined based on the exchange between the Company and the government, as the Company constructs or improves the airports based on the Master Development Program, and the government grants the Company the right to obtain revenues from the airport services rendered in return for those construction services.
F-27
The cost for construction services is determined according to the cost the Company would incur in the construction or improvements based on the investments included in the Master Development Program, for which, through a tender offer, the Company contracts third parties to perform. The revenue amount and cost are equivalent because the Company does not obtain any profit margin for the construction and consider that the costs incurred are paid at market prices.
p. | Basic and diluted earnings per share |
Basic earnings per share are computed by dividing net income of the controlling interest by the weighted average number of common shares outstanding during the year. The Company does not have potentially dilutive shares.
5. Critical accounting judgments and key sources of estimation uncertainty
In applying the Company’s accounting policies, described in note 4, the Company’s management makes judgments, estimates and assumptions about the carrying amounts of assets and liabilities in the consolidated financial statements. The estimates and underlying assumptions are based on historical experience and other factors considered relevant. Actual results may differ from these estimates.
Estimates and assumptions are reviewed on an ongoing basis. Adjustments to accounting estimates are recognized in the period in which the adjustment is made and future periods if the change affects both the current period and to subsequent periods.
a. | Critical accounting judgments |
a.Critical accounting judgments
Critical judgments, other than those involving estimations (see paragraph b), made by management throughout the process of applying the Company’s accounting policies that have a material effect on the consolidated financial statements, are presented below.
● | Evaluation of the existence of control on investments in subsidiaries (see note 11). |
● | Defined benefit obligations to the Company’s employees are discounted at a rate set by reference to market rates at the end of the reference period of Mexican government bonds. |
● | The Company is subject to transactions or contingent events over which it applies professional judgment to determine the probability of occurrence. Factors considered in this determination are the legal situation as of the date on which the estimation is made and the opinion of legal advisors. |
b. | Key sources of estimation uncertainty |
F-33
b.Key sources of estimation uncertainty
Basic assumptions concerning the future and other key sources of uncertainty in the estimates made at the end of the reporting period, that have a significant risk of causing significant adjustments to the carrying amounts of assets and liabilities within the following financial year are as follows:
● | The Company performs an allowance for doubtful accounts analysis based on the expected credit losses required by IFRS 9, considering key factors such as the customers’ financial and operating situation, conditions of past due accounts and the economic conditions of the country. This estimate is reviewed periodically, and the condition of past due accounts is determined considering the terms established in the agreements. |
● | The Company’s long-lived assets correspond to concessions granted by the Mexican Government, properties, leasehold improvements and equipment. The Company reviews the carrying amounts of its long-lived assets to determine whether there are indications of impairment. |
F-28
The Company did not identify impairment with respect to the investment of the NH T2 Hotel recorded in improvements in leased assets, whose lease contract with Mexico City International Airport expires in 2029.
The Company determined the recoverable amount of the cash-generating unit corresponding to NH T2 by estimating the value in use, which uses cash flow projections based on projections over the remaining life of the lease until 2029, discounted at an after-tax discount rate of between 10.2%12.0% to 11.2%13.0%. Over the projection period, management considers an occupancy rate of 53%81% in 2021,2023, gradually recovering to an average of 82% by 2024 onwards. It is also estimated that the average faretariff would exceed 2019 levels in 2022 and would be updated mainly with inflation thereafter.forward is restated for the effects of the hotel remodeling executed in 2022 and 2023, and subsequently for inflation. The Company'sCompany’s management, based on value in usevalue-in-use calculations, has not identified any impairment as the recoverable amount exceeds the carrying value of the cash generating unit by approximately 27%18%. The recoverable amount includes the carrying value of the finance lease.
Management estimates that the value in use considering an average ratetariff reduction of 16.7%19.3% or an occupancy rate 1,2301,566 basis points lower than estimated during the projection period would equal the carrying value of the cash generating unit.
● | The Company’s management reviews the estimated useful lives of property, leasehold improvements and equipment at the end of each annual period. Based on detailed analyses, the Company’s management could modify the useful life of certain assets of property, leasehold improvements and equipment. The degree of uncertainty associated with estimates of useful lives is related to market changes, use of assets and technological development. |
● | Determining the recoverability of deferred tax assets. |
● | The Company’s management determines and recognizes, based on estimates, the major maintenance provision as per concession contracts with the Mexican Government to maintain and restore the airports’ infrastructure, which affects the results of periods ranging from the moment concession infrastructure becomes available for use through the date on which the maintenance and/or repair works are performed. The Company also calculates the appropriate discount rate for determining the present value of expected expenses that are required to meet its obligations. The short- and long-term classification of the provision is based on the best estimate of the Company of the period in which the work is expected to be carried out. There is also a judgment in determining the accounting policy of recognition of this provision. |
Although these estimates were made based on the best information available as of December 31, 2020, 20192022, 2021 and 20182020 it is possible that future events may require the Company to modify (increase or decrease) the amounts in the coming years, which in such case would be applicable on a prospective
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basis by recognizing the effects of changes in estimates in the corresponding consolidated financial statements.
Cash and cash equivalents are composed as follows:
| | | | | | | | | | | | | | | | | | |
| | December 31, | | December 31, | ||||||||||||||
|
| 2020 |
| 2019 |
| 2018 |
| 2022 |
| 2021 |
| 2020 | ||||||
| | | | | | | | | | | | | | | | | | |
Cash |
| Ps. | 2,360,422 |
| Ps. | 2,916,936 |
| Ps. | 1,456,207 |
| Ps. | 3,335,384 |
| Ps. | 5,986,217 |
| Ps. | 2,360,422 |
Cash equivalents: |
| | |
| | |
| |
|
| | |
| | |
| | |
Bank notes |
| | 598,382 |
| | 512,027 |
| | 630,537 |
| | — |
| | — |
| | 598,382 |
Commercial paper |
| | — |
| | — |
| | 217,074 | |||||||||
Money market investment funds |
| | — |
| | 910 |
| | 655,084 |
| | 1,036 |
| | 947 |
| | — |
|
| Ps. | 2,958,804 |
| Ps. | 3,429,873 |
| Ps. | 2,958,902 |
| Ps. | 3,336,420 |
| Ps. | 5,987,164 |
| Ps. | 2,958,804 |
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a. The balance of accounts receivable is as follows:
| | | | | | | | | | | | | | | | | | |
| | December 31, | | December 31, | ||||||||||||||
|
| 2020 |
| 2019 |
| 2018 |
| 2022 |
| 2021 |
| 2020 | ||||||
Receivables |
| Ps. | 854,402 |
| Ps. | 766,748 |
| Ps. | 728,552 |
| Ps. | 1,278,510 |
| Ps. | 1,106,002 |
| Ps. | 854,402 |
Allowance for doubtful accounts (note 7 b.) |
| | (20,759) |
| | (8,992) |
| | (31,986) |
| | (12,400) |
| | (20,332) |
| | (20,759) |
|
| Ps. | 833,643 |
| Ps. | 757,756 |
| Ps. | 696,566 |
| Ps. | 1,266,110 |
| Ps. | 1,085,670 |
| Ps. | 833,643 |
Accounts receivables represent principally the passenger charges (TUA)(TUA) paid by each passenger (other than diplomats, infants, and transit passengers) using the airports operated by the Company. These TUA are collected by airlines and subsequently paid to the Company. As of December 31, 2020, 20192022, 2021 and 2018,2020, amounts receivable for passenger charges amounted to Ps. 658,269. Ps. 625,246Ps.1,130,427, Ps.952,522 and Ps.577,391,Ps.658,269, respectively.
The Company’s management considers that the carrying amount of accounts receivable approximates its fair value given their short-term nature. No interest income is generated by any short-term account receivable. As of December 31, 2020, 20192022, 2021 and 2018,2020, the balance of the allowance for doubtful accounts was Ps.20,759, Ps.8,992Ps.12,400, Ps.20,332 and Ps.31,986Ps.20,759, respectively.
The following tables set forth a percentage of the principal customers that compose the accounts receivable (before allowance for doubtful accounts) as well as the revenues generated from the Company’s principal customers, which may represent a potential credit risk for the Company if the counterparty had financial and operating difficulties that would prevent them from being able to settle amounts due to the Company.
| | | | | | | | | | | | |
| | December 31, | | December 31, | ||||||||
|
| 2020 |
| 2019 |
| 2018 |
| 2022 |
| 2021 |
| 2020 |
| | % |
| % | | % | | % |
| % | | % |
Accounts receivable: |
|
| |
|
|
|
|
| |
|
|
|
Aeroenlaces Nacionales, S. A. de C. V. |
| 33.00 | | 21.16 | | 23.76 |
| 31.3 | | 35.8 | | 33.0 |
Concesionaria Vuela Compañía de Aviación, S.A.P.I. de C.V. |
| 28.10 | | 27.40 | | 24.20 |
| 27.0 | | 24.0 | | 28.1 |
Aerolitoral, S. A. de C. V. |
| 8.98 | | 20.88 | | 21.47 |
| 9.0 | | 8.8 | | 9.0 |
Aerovías de México, S. A. de C.V. |
| 4.74 | | 6.70 | | 7.15 |
| 11.9 | | 10.4 | | 4.7 |
| | | | | | |
| | Year ended December 31, | ||||
|
| 2022 |
| 2021 |
| 2020 |
| | % | | % | | % |
Revenues by client: |
|
|
|
|
|
|
Aerolitoral, S. A. de C. V. |
| 6.9 |
| 8.1 |
| 10.5 |
Aeroenlaces Nacionales, S. A. de C. V. |
| 27.6 |
| 28.5 |
| 21.0 |
ABC Aerolíneas, S. A. de C. V. |
| — |
| — |
| 4.2 |
Concesionaria Vuela Compañía de Aviación, S. A. P. I. de C. V. |
| 20.1 |
| 19.3 |
| 17.4 |
Aerovías de México, S. A. de C. V. |
| 8.3 |
| 6.8 |
| 4.7 |
F-35F-30
| | | | | | |
| | Year ended December 31, | ||||
|
| 2020 |
| 2019 |
| 2018 |
| | % | | % | | % |
Revenues by client: |
|
|
|
|
|
|
Aerolitoral, S. A. de C. V. |
| 10.49 |
| 13.26 |
| 14.99 |
Aeroenlaces Nacionales, S. A. de C. V. |
| 21.07 |
| 17.79 |
| 16.84 |
ABC Aerolíneas, S. A. de C. V. |
| 4.24 |
| 10.38 |
| 11.19 |
Concesionaria Vuela Compañía de Aviación, S. A. P. I. de C. V. |
| 17.36 |
| 16.11 |
| 13.79 |
Aerovías de México, S. A. de C. V. |
| 4.07 |
| 4.07 |
| 4.41 |
On June 30, 2020, Grupo Aeromexico, S.A.B. de C.V. and certain of its subsidiaries, including Aerolitoral, S.A. de C.V. and Aerovias de Mexico, S.A. de C.V. entered into reorganization proceedings under Chapter 11 of the U.S. Bankruptcy Law. On March 17, 2022, Grupo Aeromexico, S.A.B. de C.V. and its subsidiaries completed their financial restructuring process as the reorganization plan came into effect.
As of December 31, 2020,2022 and 2021, and the date of issuance of the financial statements, both Aerolitoral, S.A. de C.V. and Aerovias de Mexico, S.A. de C.V. are substantially current in their payments with the Company and continue to operate the Company's Airports.
During the last quarter of 2020, ABC Aerolíneas, S.A. de C.V. ceased operating at the Company's airports.Airports. The amount of accounts receivable from this customer at December 31, 20202022 and 2021, is not material.
b. The changes in the allowance for doubtful accounts are as follows:
| | | | | | | | | | | | | | | | | | |
| | December 31, | | December 31, | ||||||||||||||
|
| 2020 |
| 2019 |
| 2018 |
| 2022 |
| 2021 |
| 2020 | ||||||
| | | | | | | | | | | | | | | | | | |
Beginning balance |
| Ps. | 8,992 |
| Ps. | 31,986 |
| Ps. | 38,223 |
| Ps. | 20,332 |
| Ps. | 20,759 |
| Ps. | 8,992 |
Increases(Decrease) |
| | 18,342 |
| | (241) |
| | (5,960) | |||||||||
Cancelation | | | (5,542) | | | — | | | — | |||||||||
Increase |
| | 4,711 |
| | 646 |
| | 18,342 | |||||||||
Cancellation | | | (12,643) | | | — | | | (5,542) | |||||||||
Write-off |
| | (1,033) |
| | (22,753) |
| | (277) |
| | — |
| | (1,073) |
| | (1,033) |
Ending balance |
| Ps. | 20,759 |
| Ps. | 8,992 |
| Ps. | 31,986 |
| Ps. | 12,400 |
| Ps. | 20,332 |
| Ps. | 20,759 |
The write-off of doubtful accounts is recognized once the Company has exhausted all means for collection of the account.
The movements in the estimate for customer impairment in 2020,2022, with the expected loss model used by the Company, are presented below:
| | | | | | | | | | | | | | | | | | |
|
| Airports |
| Others |
| Total |
| Airports |
| Others |
| Total | ||||||
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Gross book value |
| Ps. | 784,108 |
| Ps. | 28,251 |
| Ps. | 812,359 |
| Ps. | 1,213,857 |
| Ps. | 52,253 |
| Ps. | 1,266,110 |
Collateral | | | 1,584,553 |
| | 8,048 |
| | 1,592,601 | | | 1,419,109 |
| | 29,363 |
| | 1,448,472 |
| | | | | | | | | | | | | | | | | | |
Probability of default in range | | | 0% - 100% | | | 0% - 100% |
| | | | | 0% - 100% | | | 0% - 100% |
| | |
Loss due to default range | | | 0% - 100% | | | 0% - 100% | | | | | | 0% - 100% | | | 0% - 100% | | | |
Beginning balance of impairment of account receivable | | Ps. | 8,847 | | Ps. | 145 | | Ps. | 8,992 | | Ps. | 16,894 | | Ps. | 3,438 | | Ps. | 20,332 |
(Decrease) increase in the provision | | | 15,156 | | | 3,186 | | | 18,342 | |||||||||
Cancelations | | | (5,542) | | | — | | | (5,542) | |||||||||
Increase in the provision | | | 4,195 | | | 516 | | | 4,711 | |||||||||
Write-off |
| | (1,033) | | | — | | | (1,033) |
| | (9,084) | | | (3,559) | | | (12,643) |
Ending balance |
| Ps. | 17,428 | | Ps. | 3,331 | | Ps. | 20,759 |
| Ps. | 12,005 | | Ps. | 395 | | Ps. | 12,400 |
F-36
8. Other accounts receivable and prepaid expenses
Other accounts receivable and prepaid expenses are comprised as follows:
| | | | | | | | | | | | | | | | | | |
| | December 31, | | December 31, | ||||||||||||||
|
| 2020 |
| 2019 |
| 2018 |
| 2022 |
| 2021 |
| 2020 | ||||||
| | | | | | | | | | | | | | | | | | |
Prepaid expenses |
| Ps. | 59,033 |
| Ps. | 33,310 |
| Ps. | 27,296 |
| Ps. | 41,132 |
| Ps. | 33,180 |
| Ps. | 59,033 |
Guarantee deposits |
| | 6,167 |
| | 5,897 |
| | 5,897 |
| | 6,987 |
| | 6,952 |
| | 6,167 |
Others |
| | 1,375 |
| | 3,535 |
| | 7,068 |
| | 1,520 |
| | 2,201 |
| | 1,375 |
|
| Ps. | 66,575 |
| Ps. | 42,742 |
| Ps. | 40,261 |
| Ps. | 49,639 |
| Ps. | 42,333 |
| Ps. | 66,575 |
F-31
9. Property, leasehold improvements and equipment
Property, leasehold improvements and equipment are as follows:
| | | | | | | | | | | | | | | | | | |
| | December 31, | | December 31, | ||||||||||||||
|
| 2020 |
| 2019 |
| 2018 |
| 2022 |
| 2021 |
| 2020 | ||||||
Net carrying value: |
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Land (see note 10) |
| Ps. | 1,709,508 |
| Ps. | 1,709,508 |
| Ps. | 1,709,508 |
| Ps. | 1,426,363 |
| Ps. | 1,709,508 |
| Ps. | 1,709,508 |
Leasehold improvements |
| | 854,829 |
| | 786,085 |
| | 783,221 |
| | 910,312 |
| | 857,274 |
| | 854,829 |
Machinery and equipment |
| | 72,867 |
| | 83,611 |
| | 99,194 |
| | 41,297 |
| | 53,600 |
| | 72,867 |
Furniture and office equipment |
| | 27,940 |
| | 35,105 |
| | 42,674 |
| | 50,106 |
| | 22,786 |
| | 27,940 |
Transportation equipment |
| | 287 |
| | 1,555 |
| | 25,326 |
| | 38 |
| | 51 |
| | 287 |
Computer equipment |
| | 2,838 |
| | 2,212 |
| | 4,930 |
| | 6,136 |
| | 5,857 |
| | 2,838 |
Construction in progress for leasehold improvements |
| | 32,200 |
| | 29,025 |
| | 5,409 |
| | 131,843 |
| | 75,220 |
| | 32,200 |
|
| Ps. | 2,700,469 |
| Ps. | 2,647,101 |
| Ps. | 2,670,262 |
| Ps. | 2,566,095 |
| Ps. | 2,724,296 |
| Ps. | 2,700,469 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| Construction |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| Construction |
| | | ||
| | | | | | | | Machinery | | Furniture | | | | | | | | in progress of | | | | | | | | | | | Machinery | | Furniture | | | | | | | | in progress of | | | | ||||||
| | | | | Leasehold | | and | | and office | | Transportation | | Computer | | leasehold | | | | | | | | Leasehold | | and | | and office | | Transportation | | Computer | | leasehold | | | | ||||||||||||
Cost | | Land | | improvements | | equipment | | equipment | | equipment | | equipment | | improvements | | Total | | Land | | improvements | | equipment | | equipment | | equipment | | equipment | | improvements | | Total | ||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Balance as of January 1, 2018 |
| Ps. | 1,709,508 |
| Ps. | 825,481 |
| Ps. | 201,114 |
| Ps. | 153,355 |
| Ps. | 61,043 |
| Ps. | 67,697 |
| Ps. | 22,341 |
| Ps. | 3,040,539 | ||||||||||||||||||||||||
Balance as of January 1, 2020 |
| Ps. | 1,709,508 |
| | 1,058,546 |
| | 206,345 |
| | 159,735 |
| | 21,655 |
| | 67,575 |
| | 29,025 |
| | 3,252,389 | ||||||||||||||||||||||||
Acquisitions |
| | — | | | — | | | 8,380 | | | 440 | | | — | | | 3,973 | | | 134,821 | | | 147,614 | ||||||||||||||||||||||||
Transfer |
| | — |
| | 130,420 |
| | — |
| | — |
| | — |
| | — |
| | (130,420) |
| | — | ||||||||||||||||||||||||
Other |
| | — |
| | — |
| | — |
| | (206) |
| | — |
| | (3,097) |
| | (1,226) |
| | (4,529) | ||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||
Balance as of December 31, 2020 |
| | 1,709,508 |
| | 1,188,966 |
| | 214,725 |
| | 159,969 |
| | 21,655 |
| | 68,451 |
| | 32,200 |
| | 3,395,474 | ||||||||||||||||||||||||
Acquisitions |
| | — | | | 53,347 | | | 2,293 | | | 5,444 | | | 1,038 | | | 1,102 | | | 104,038 |
| | 167,262 |
| | — | | | 463 | | | 208 | | | 1,908 | | | — | | | 5,023 | | | 114,129 | | | 121,731 |
Disposals |
| | — |
| | — |
| | (321) |
| | — |
| | — |
| | (666) |
| | — | | | (987) | | | — | | | — | | | — | | | — | | | (2,393) | | | — | | | — | | | (2,393) |
Transfer | | | — |
| | 70,373 |
| | 53 |
| | 590 |
| | — |
| | — |
| | (71,109) |
| | (93) | ||||||||||||||||||||||||
Other |
| | — |
| | — |
| | (7,237) |
| | — |
| | (1,003) |
| | (330) |
| | — |
| | (8,570) | ||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||
Balance as of December 31, 2021 |
| | 1,709,508 |
| | 1,259,802 |
| | 207,749 |
| | 162,467 |
| | 18,259 |
| | 73,144 |
| | 75,220 |
| | 3,506,149 | ||||||||||||||||||||||||
Acquisitions | | | 583 | | | 10,986 | | | 1,473 | | | 38,886 | | | — | | | 3,170 | | | 182,766 | | | 237,864 | ||||||||||||||||||||||||
Disposals | | | — | | | — | | | — | | | — | | | — | | | (45) | | | — | | | (45) | ||||||||||||||||||||||||
Reclassification to improvements (note 10) | | | (283,728) | | | — | | | — | | | — | | | — | | | — | | | — | | | (283,728) | ||||||||||||||||||||||||
Transfers |
| | — |
| | 120,970 |
| | — |
| | — |
| | — |
| | — |
| | (120,970) |
| | — |
| | — |
| | 113,155 |
| | — | | | — |
| | — |
| | — |
| | (113,155) |
| | — |
Other |
| | — |
| | — |
| | (127) |
| | (687) |
| | (351) |
| | (402) |
| | — |
| | (1,567) |
| | — |
| | (1,697) |
| | 1,315 |
| | — |
| | — |
| | — |
| | (12,988) |
| | (13,370) |
| | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||
Balance as of December 31, 2018 |
| | 1,709,508 |
| | 999,798 |
| | 202,959 |
| | 158,112 |
| | 61,730 |
| | 67,731 |
| | 5,409 |
| | 3,205,247 | ||||||||||||||||||||||||
Acquisitions |
| | — | | | 49,345 | | | 3,386 | | | 2,168 | | | — | | | 869 | | | 80,290 | | | 136,058 | ||||||||||||||||||||||||
Disposals |
| | — |
| | — |
| | — |
| | (525) |
| | — |
| | — |
| | — |
| | (525) | ||||||||||||||||||||||||
Transfers | | | — |
| | 9,403 |
| | — |
| | — |
| | (34,283) |
| | (430) |
| | (55,656) |
| | (80,966) | ||||||||||||||||||||||||
Other |
| | — |
| | — |
| | — |
| | (20) |
| | (5,792) |
| | (595) |
| | (1,018) |
| | (7,425) | ||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||||||||||||||||
Balance as of December 31, 2019 |
| | 1,709,508 |
| | 1,058,546 |
| | 206,345 |
| | 159,735 |
| | 21,655 |
| | 67,575 |
| | 29,025 |
| | 3,252,389 | ||||||||||||||||||||||||
Acquisitions | | | — | | | — | | | 8,380 | | | 440 | | | — | | | 3,973 | | | 134,821 | | | 147,614 | ||||||||||||||||||||||||
Transfers |
| | — |
| | 130,420 |
| | — |
| | — |
| | — |
| | — |
| | (130,420) |
| | — | ||||||||||||||||||||||||
Other |
| | — |
| | — |
| | — |
| | (206) |
| | — |
| | (3,097) |
| | (1,226) |
| | (4,529) | ||||||||||||||||||||||||
Balance as of December 31, 2020 |
| Ps. | 1,709,508 |
| Ps. | 1,188,966 |
| Ps. | 214,725 |
| Ps. | 159,969 |
| Ps. | 21,655 |
| Ps. | 68,451 |
| Ps. | 32,200 |
| Ps. | 3,395,474 | ||||||||||||||||||||||||
Balance as of December 31, 2022 |
| Ps. | 1,426,363 |
| Ps. | 1,382,246 |
| Ps. | 210,537 |
| Ps. | 201,353 |
| Ps. | 18,259 |
| Ps. | 76,269 |
| Ps. | 131,843 |
| Ps. | 3,446,870 |
| | | | | | | | | | | | | | | | | | | | | |
|
| | |
| | |
| | |
| | |
| | |
| Construction in |
| | | |
| | | | | | | | Furniture and | | | | | | | | progress of | | | | ||
Accumulated | | Leasehold | | Machinery and |
| office | | Transportation | | Computer |
| leasehold | | | | ||||||
Depreciation | | improvements | | equipment | | equipment | | equipment | | equipment |
| improvements | | Total | |||||||
| | | | | | | | | | | | | | | | | | | | | |
Balance as of January 1, 2020 |
| Ps. | (272,461) |
| | (122,734) |
| | (124,630) |
| | (20,100) |
| | (65,363) |
| | — |
| | (605,288) |
Depreciation |
| | (61,676) |
| | (19,124) |
| | (7,720) |
| | (1,268) |
| | (2,532) |
| | — | | | (92,320) |
Disposals |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
Other |
| | — | | | — | | | 321 | | | — | | | 2,282 | | | — | | | 2,603 |
| | | | | | | | | | | | | | | | | | | | | |
Balance as of December 31, 2020 |
| | (334,137) |
| | (141,858) |
| | (132,029) |
| | (21,368) |
| | (65,613) |
| | — |
| | (695,005) |
Depreciation |
| | (68,391) |
| | (19,347) |
| | (7,652) |
| | (64) |
| | (2,027) |
| | — | | | (97,481) |
Disposals | | | — |
| | 7,056 |
| | — |
| | 2,446 |
| | — |
| | — |
| | 9,502 |
Other |
| | — | | | — | | | — | | | 778 | | | 353 | | | — | | | 1,131 |
| | | | | | | | | | | | | | | | | | | | | |
Balance as of December 31, 2021 |
| | (402,528) |
| | (154,149) |
| | (139,681) |
| | (18,208) |
| | (67,287) |
| | — |
| | (781,853) |
Depreciation |
| | (69,406) |
| | (15,091) |
| | (11,566) |
| | (13) |
| | (2,891) |
| | — | | | (98,967) |
Disposals |
| | — |
| | — |
| | — |
| | — |
| | 45 |
| | — |
| | 45 |
| | | | | | | | | | | | | | | | | | | | | |
Balance as of December 31, 2022 |
| Ps. | (471,934) |
| Ps. | (169,240) |
| Ps. | (151,247) |
| Ps. | (18,221) |
| Ps. | (70,133) |
| Ps. | — |
| Ps. | (880,775) |
F-37
| | | | | | | | | | | | | | | | | | | | | |
|
| | |
| | |
| | |
| | |
| | |
| Construction in |
| | | |
| | | | | | | | Furniture and | | | | | | | | progress of | | | | ||
Accumulated | | Leasehold | | Machinery and |
| office | | Transportation | | Computer |
| leasehold | | | | ||||||
depreciation | | improvements | | equipment | | equipment | | equipment | | equipment |
| improvements | | Total | |||||||
| | | | | | | | | | | | | | | | | | | | | |
Balance as of January 1, 2018 |
| Ps. | (164,892) |
| Ps. | (84,997) |
| Ps. | (106,242) |
| Ps. | (24,797) |
| Ps. | (58,214) |
| Ps. | — |
| Ps. | (439,142) |
Depreciation |
| | (51,685) |
| | (18,902) |
| | (9,883) |
| | (11,630) |
| | (5,655) | | | — | | | (97,755) |
Disposals |
| | — |
| | 134 |
| | — |
| | — |
| | 666 |
| | — |
| | 800 |
Other |
| | — | | | — | | | 687 | | | 23 | | | 402 |
| | — |
| | 1,112 |
| | | | | | | | | | | | | | | | | | | | | |
Balance as of December 31, 2018 |
| | (216,577) |
| | (103,765) |
| | (115,438) |
| | (36,404) |
| | (62,801) |
| | — |
| | (534,985) |
Depreciation |
| | (55,884) |
| | (18,969) |
| | (9,729) |
| | (4,806) |
| | (3,051) |
| | — |
| | (92,439) |
Disposals | | | — |
| | — |
| | 525 |
| | — |
| | — |
| | — |
| | 525 |
Other |
| | — | | | — | | | 12 | | | 21,110 | | | 489 | | | — | | | 21,611 |
| | | | | | | | | | | | | | | | | | | | | |
Balance as of December 31, 2019 |
| | (272,461) |
| | (122,734) |
| | (124,630) |
| | (20,100) |
| | (65,363) |
| | — |
| | (605,288) |
Depreciation |
| | (61,676) |
| | (19,124) |
| | (7,720) |
| | (1,268) |
| | (2,532) |
| | — | | | (92,320) |
Disposals |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
Other | | | — | | | — | | | 321 | | | — | | | 2,282 | | | — | | | 2,603 |
| | | | | | | | | | | | | | | | | | | | | |
Balance as of December 31, 2020 |
| Ps. | (334,137) |
| Ps. | (141,858) |
| Ps. | (132,029) |
| Ps. | (21,368) |
| Ps. | (65,613) |
| Ps. | — |
| Ps. | (695,005) |
10. Investment in airport concessions
The Company has concessions to operate, maintain and develop 13 airports in Mexico, which are concentrated in central and northern regions of the country. Each concession is for 50 years from November 1, 1998. The term of each of the Company’s
F-32
concessions may be extended by the Ministry of Infrastructure, Communications and Transportation under certain circumstances for a period not exceeding 50 years.
As operators of 13 airports the Company earns revenue from airlines, passengers, and other users for using the airport facilities. The Company also earns revenues for commercial activities carried out at the airports, such as leasing of space to restaurants and other shops.
Each airport concession agreement contains the following terms and basic conditions:
a. | The concessionaire has the right to manage, operate, maintain and use the airport facilities and carry out any construction, improvements or maintenance of the related facilities in accordance with its five-year period Master Development Program, and to provide airport, complementary and commercial services. |
b. | The concessionaire will use the airport facilities only for the purposes specified in the concession agreement, will provide services in conformity with the law and applicable regulations and will be subject to inspections by the Ministry of Infrastructure, Communications and Transportation. |
c. | The concessionaire must pay a concession tax for the right to use airport facilities (currently 5% of the concessionaire’s annual gross revenues derived from the use of public property), in conformity with the Mexican Federal Duties Law. |
d. | The Mexican Airport and Auxiliary Services Agency (Aeropuertos y Servicios Auxiliares) has the exclusive right to supply fuel at the concessionaire’s airports. |
e. | The concessionaire must grant free access to specific airport areas to certain Mexican government agencies, so that they may carry out their activities within the airports. |
f. | The concession may be revoked if the concessionaire breaches any of its obligations established in the concession title, as established in Article 26 and 27 of the Mexican Airport Law and in the concession title. The breach of certain concession terms may be cause for revocation if the Ministry of Infrastructure, Communications and Transportation has applied sanctions in three different instances with respect to the same concession term. |
Since the concessionaire is part of an integrated economic group, the concessionaire and Grupo Aeroportuario del Centro Norte, S.A.B. de C.V, they will respond jointly and severally to the Ministry of Infrastructure Communications and
F-38
Transportation, regarding the obligations contained in each of the concessions granted and as indicated in the concession title.
The terms and conditions of each concession contract have been fulfilled in all important aspects during the years ended December 31, 2020, 20192022, 2021 and 2018.2020.
Investments in airport concessions include:include improvements to concessioned assets, rights to use airport facilities, and airport concessions. The total cost of the concession was assigned proportionally to rights to use airport facilities on the basis of the fair value of the assets determined by an independent appraiser. At any airport concession where the cost exceeded the fair value, the excess was recognized within the airport concessions line item.
F-33
As of December 31, 2020, 20192022, 2021 and 2018,2020, the carrying value of the right to use airport facilities, airport concessions and improvement to concessioned assets classified as intangible assets are as follows:
| | | | | | | | | | | | | | | | | | |
| | December 31, | | December 31, | ||||||||||||||
|
| 2020 |
| 2019 |
| 2018 |
| 2022 |
| 2021 |
| 2020 | ||||||
Projects completed and in operation: |
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Airport concessions |
| Ps. | 605,643 |
| Ps. | 605,643 |
| Ps. | 605,643 |
| Ps. | 605,643 |
| Ps. | 605,643 |
| Ps. | 605,643 |
Rights to use airport facilities |
| | 3,356,762 |
| | 3,356,762 |
| | 3,356,762 |
| | 3,356,762 |
| | 3,356,762 |
| | 3,356,762 |
Improvements to concessioned assets (see note 15) |
| | 8,594,136 |
| | 7,331,450 |
| | 6,165,810 |
| | 11,873,540 |
| | 9,694,492 |
| | 8,594,136 |
Improvements to concessioned assets in progress | | | 615,246 | | | 624,063 | | | 834,868 | | | 1,774,167 | | | 1,303,793 | | | 615,246 |
Accumulated amortization |
| | (2,942,131) |
| | (2,650,807) |
| | (2,396,427) |
| | (3,669,746) |
| | (3,280,006) |
| | (2,942,131) |
|
| Ps. | 10,229,656 |
| Ps. | 9,267,111 |
| Ps. | 8,566,656 |
| Ps. | 13,940,366 |
| Ps. | 11,680,684 |
| Ps. | 10,229,656 |
The changes in investment in concessions are as follows:
| | | | | | | | | | | | | | | | | | | ||||
| | December 31, | | December 31, | ||||||||||||||||||
|
| 2020 |
| 2019 |
| 2018 |
| 2022 |
| 2021 |
| 2020 | ||||||||||
Investment in airport concessions |
| |
|
| |
|
| |
|
| |
|
| |
|
| |
| ||||
Beginning balance |
| Ps. | 11,917,919 |
| Ps. | 10,963,084 |
| Ps. | 9,821,579 |
| Ps. | 14,960,690 |
| Ps. | 13,171,787 |
| Ps. | 11,917,919 | ||||
Land transfer | | | 283,728 | | | | | | | |||||||||||||
Increase |
| | 1,253,868 |
| | 954,835 |
| | 1,141,505 |
| | 2,365,694 |
| | 1,788,903 |
| | 1,253,868 | ||||
Ending balance |
| | 13,171,787 |
| | 11,917,919 |
| | 10,963,084 |
| | 17,610,112 |
| | 14,960,690 |
| | 13,171,787 | ||||
Amortization of airport concessions: |
| |
|
| |
|
| |
|
| |
|
| |
|
| |
| ||||
Beginning balance |
| | (2,650,807) |
| | (2,396,427) |
| | (2,173,162) |
| | (3,280,006) |
| | (2,942,131) |
| | (2,650,808) | ||||
Increase |
| | (291,323) |
| | (254,380) |
| | (223,266) |
| | (389,740) |
| | (337,875) |
| | (291,323) | ||||
Ending balance |
| | (2,942,131) |
| | (2,650,807) |
| | (2,396,427) |
| | (3,669,746) |
| | (3,280,006) |
| | (2,942,131) | ||||
Net investment in airport concessions |
| Ps. | 10,229,656 |
| Ps. | 9,267,111 |
| Ps. | 8,566,656 |
| Ps. | 13,940,366 |
| Ps. | 11,680,684 |
| Ps. | 10,229,656 |
Master Development Plan – The Company is obligated to carry out maintenance, improvements to concessioned assets and acquire fixed assets according to the Master Development Program. As mentioned in note 2, theThe Master Development Program for 2021-2025 is Ps.11,979,621 in pesos with purchasing power of December 31, 2019, and Ps.12,586,901 Ps.15,757,214 in pesos with purchasing power of December 31, 2020,2022, as updated with the National Producer Price Index (INPPIC) of the construction industry, in accordance with the
F-39
concession contract,December 31, 2022, is Ps.10,537,956, which is anticipated to be carried out as follows:
| | | |
| | | Amount |
| | | |
Year | | | |
2021 |
|
| 2,565,502 |
2022 |
|
| 2,655,068 |
2023 | | | 2,620,741 |
2024 | | | 2,510,125 |
2025 |
|
| 2,235,465 |
|
|
| 12,586,901 |
| | | |
Year |
| Amount | |
2023 |
| Ps. | 4,597,075 |
2024 | | | 3,142,361 |
2025 | | | 2,798,520 |
|
| Ps. | 10,537,956 |
The Master Development Program for the previous five-year period 2016-2020, was for Ps. 4,445,653,Ps.4,445,653, with purchasing power as of December 31, 2014, and Ps.6,303,586 with purchasing power as of December 31, 2020, as updated with the INPPIC, in accordance with the concession contract.INPPIC. The amount pending to be exercised as of December 31, 2020, is Ps.264,783, which willwas applied during 2021, with no remaining balance to be exercised until the projects are completed.exercised.
In 2009,Between 2007 and 2011, the Company paid Ps.1,159,613 to acquirecarried out a series of sales and exchanges of land strategically located adjacentnext to the Monterrey airportAirport to allow for the airport’s future growth of the Airport, including the construction of a second runway whichthat the CompanyAirport intends to completebuild in the future. As of December 31, 2022, such land had a carrying value of Ps.1,422,046.
On December 4, 2012, the Monterrey airportAirport received authorization from the AFACFederal Civil Aviation Agency (“AFAC”) to include Ps.386,538 (amount expressed in nominal pesos of 2009) in investments as part of Master Development Program for 2011-2015.
F-34
Additionally, during the 2011 Master Development Program revision, Ps.77,306 was included due to an extraordinary adjustment in its maximum tariff under the Master Development Program. The remaining investment to be recognized for a cost of Ps.695,759Ps.694,390 (amount expressed in 2009 nominal pesos), has been included in the indicative periods 2026-2035 of the approved Master Development Program. This amount may not be recognized by the Ministry of Infrastructure Communications and Transportation in the future. The final recovery amounts are adjusted annually based on INPPIC.INPPIC excluding oil.
The land acquired is property of the Company’s airports exclusively own the lands acquired, which areAirports, and is classified in the consolidated statements of financial position under the headings of property, leasehold improvements and equipment.
During 2022, the Monterrey Airport completed the donation of certain land in favor of the Federal Government, acting through the Ministry of Infrastructure, Communications and Transportation, with a book value of Ps.283,728 on account of the amounts previously recognized in the 2011-2015 Master Development Program, and which will be incorporated into the Monterrey Airport concession. As a result, such value was reclassified from property, leasehold improvements and equipment to improvements in concessioned assets. The landsrest of the land will remain classified under these headingsas property, leasehold improvements and equipment until the negotiations with the AFAC have concluded. If the AFAC recognizes the land as part of the concession investment, it is estimated that the property will be transferred to the MexicanFederal Government. At the time of such recognition, the Company shall derecognizereclassify the asset and recognize an inclusion of the same amount underas investment in airport concessions (improvements in concessioned assets), which will be subject to amortization for the remaining period of the concession.
The Company’s improvements to the airport facilities can be recognized by the AFAC as part of the investment in airport concession. The cost of airport improvements recognized by the AFAC that are part of the Company’s investment in concession assets is “recovered” in the form of adjustments to the maximum rates that the Company may charge for aeronautical services, which are regulated by the AFAC.
F-40
a. | The following tables set forth information about the composition of GACN as of December 31, |
| | | | |
| | Number of | ||
| | Place of | |
|
| | incorporation and | | December 31, |
Principal activity | | operation | |
|
Airports |
| Mexico |
| 13 |
Hotels |
| Mexico |
| 2 |
Services |
| Mexico |
| 9 |
|
|
|
| 24 |
F-35
b. | The consolidated subsidiaries are as follows: |
| | | |
Name of subsidiary | | Ownership Percentage |
|
Airport services; |
|
| |
Aeropuerto de Monterrey, S. A. de C. V. |
| 100 | % |
Aeropuerto de Acapulco, S. A. de C. V. |
| 100 | % |
Aeropuerto de Mazatlán, S. A. de C. V. |
| 100 | % |
Aeropuerto de Zihuatanejo, S. A. de C. V. |
| 100 | % |
Aeropuerto de Culiacán, S. A. de C. V. |
| 100 | % |
Aeropuerto de Ciudad Juárez, S. A. de C. V. |
| 100 | % |
Aeropuerto de Chihuahua, S. A. de C. V. |
| 100 | % |
Aeropuerto de Torreón, S. A. de C. V. |
| 100 | % |
Aeropuerto de Durango, S. A. de C. V. |
| 100 | % |
Aeropuerto de Tampico, S. A. de C. V. |
| 100 | % |
Aeropuerto de Reynosa, S. A. de C. V. |
| 100 | % |
Aeropuerto de Zacatecas, S. A. de C. V. |
| 100 | % |
Aeropuerto de San Luis Potosí, S. A. de C. V. |
| 100 | % |
Hotels and Services: |
|
| |
Operadora de Aeropuertos del Centro Norte, S. A. de C. V. |
| 100 | % |
Servicios Aeroportuarios del Centro Norte, S. A. de C. V. |
| 100 | % |
Servicios Aero Especializados del Centro Norte, S. A. de C. V. |
| 100 | % |
OMA Logística, S. A. de C. V.(1) |
| 100 | % |
Holding Consorcio Grupo Hotelero T2, S. A. de C. V.(2) |
| 100 | % |
(1) | Includes subsidiaries with interest in; OMA VYNMSA Aero Industrial Park, S.A. de C.V (VYNMSA) of which the Company owns 51% of the shares, Consorcio Hotelero Aeropuerto de Monterrey, S.A.P.I de C.V. with 85% and Servicios Hoteleros Aeropuerto de Monterrey, S.A. de C.V. with 85%. |
(2) | Provides hotel services and includes its subsidiaries: Servicios Complementarios del Centro Norte S.A. de C.V., with 100% of the shares, Consorcio Grupo Hotelero T2, S.A. de C.V. and Servicios Corporativos Terminal 2, S.A. de C.V. with 90% of the shares. |
The Company has the majority of voting power at shareholders’ meetings of the subsidiaries and has control by virtue of its contractual right to appoint the board of directors of the companies, who are empowered to affect their relevant activities.
As of December 31, 2020, 20192022, 2021 and 2018,2020, the Company has not made investments in shares of any structured or investment-related entity.
F-41
Trade accounts payable consist of the following:
| | | | | | | | | | | | | | | | | | |
| | December 31, | | December 31, | ||||||||||||||
|
| 2020 |
| 2019 |
| 2018 |
| 2022 |
| 2021 |
| 2020 | ||||||
Suppliers and contractors |
| Ps. | 107,507 |
| Ps. | 140,806 |
| Ps. | 155,904 |
| Ps. | 223,153 |
| Ps. | 123,330 |
| Ps. | 107,507 |
Customer advances |
| | 91,841 |
| | 43,102 |
| | 39,877 |
| | 46,377 |
| | 58,512 |
| | 91,841 |
Statutory employee profit sharing |
| | 4,700 |
| | 12,883 |
| | 8,218 |
| | 56,760 |
| | 31,365 |
| | 4,700 |
|
| Ps. | 204,048 |
| Ps. | 196,791 |
| Ps. | 203,999 |
| Ps. | 326,290 |
| Ps. | 213,207 |
| Ps. | 204,048 |
F-36
13. Payable taxes and other accrued expenses
Tax payable and other accrued expenses are comprised of the following:
| | | | | | | | | | | | | | | | | | | |
| | December 31, | | December 31, | |||||||||||||||
|
| 2020 |
| 2019 |
| 2018 |
| 2022 |
| 2021 |
| 2020 | |||||||
Accrued expenses |
| Ps. | 172,847 |
| Ps. | 202,363 |
| Ps. | 166,588 |
| Ps. | 265,358 |
| Ps. | 210,515 |
| Ps. | 172,847 | |
Taxes payable other than income tax |
| | 153,046 |
| | 345,461 |
| | 308,345 |
| | 551,133 |
| | 713,850 |
| | 153,046 | |
Accrued interest |
| | 44,295 |
| | 42,438 |
| | 40,227 |
| | 147,115 |
| | 73,489 |
| | 44,295 | |
|
| Ps. | 370,188 |
| Ps. | 590,262 |
| Ps. | 515,160 |
| Ps. | 963,606 |
| Ps. | 997,854 |
| Ps. | 370,188 |
Short-term debt is comprised of credit lines denominated in pesos, with unsecured guarantees as follows:
| | | | | | |
|
| 2022 |
| 2021 | ||
Bank loan with HSBC Mexico for Ps.600,000 for six months with unsecured collateral at a variable rate of TIIE 91 plus 0.60 percentage point. | | Ps. | 600,000 | | | |
Bank loan with Banco Nacional de México for Ps.400,000 for six months with unsecured collateral at a variable rate of TIIE 28 plus 1.0 percentage point. | | | 400,000 | | | |
Credit line of credit with Banco Santander Mexico for Ps.200,000 for 3 months with unsecured collateral at a variable rate of TIIE rate plus 1.40 percentage point. | | | 200,000 | | | |
Bank loan with Banco Nacional de México for Ps.1,000,000, for six months at a variable rate of TIIE 28 plus 1.0 percentage point. | | | | | Ps. | 1,000,000 |
Bank loan with HSBC Mexico for Ps.900,000, for six months, at a variable rate of TIIE 91 plus 0.50 percentage points. | | | | | | 900,000 |
Credit line with Banco Santander Mexico for Ps.1,000,000, for six months at a variable rate TIIE 28 plus 1.55 percentage points on average. | | | | | | 800,000 |
Total short-term debt | | Ps. | 1,200,000 | | Ps. | 2,700,000 |
As of December 31, 2020the date of authorization of the accompanying consolidated financial statements, the Company has uncommitted, available short-term credit lines availableof credit with financial institutions for Ps.650,000, which are not in use.the amount of Ps.1,200,000.
F-42F-37
The long-term debt with credit institutions, debt issuances and other marketable securities before amortization of financing commissions and is comprised as follows:
| | | | | | | | | |
| | December 31, | |||||||
|
| 2022 |
| 2021 |
| 2020 | |||
Debt securities issued in the Mexican market on June 16, 2014, for Ps. 3,000,000, accruing interest at a fixed rate of 6.85%, for a 7-year term maturing on June 7, 2021. GACN and nine of the 13 airports guarantee the certificates, which represent a guarantee of 80% of consolidated EBITDA |
| Ps. | — |
| Ps. | — |
| Ps. | 3,000,000 |
| | | | | | | | | |
Debt securities issued in the Mexican market on March 26, 2013, for Ps. 1,500,000, accruing interest at a fixed rate of 6.47%, for a 10-year term maturing on March 14, 2023. GACN and nine of the 13 airports guarantee the certificates, which represent a guarantee of 80% of consolidated EBITDA |
| | 1,500,000 |
| | 1,500,000 |
| | 1,500,000 |
Unsecured lines of credit with Private Export Funding Corporation (supported by Ex-Im Bank) for U.S.$ 25,365 thousand maturing on December 21, 2021. As December 31, 2020, outstanding amounts were U.S.$ 678 thousand. Baggage screening equipment was pledged to secure the loan ⁽²⁾. The loan accrues interest at a three-month London Interbank Offered (“LIBOR”) rate plus 1.25 percentage points, with quarterly payments of principal. As of December 31, 2020, the interest rate was 1.49%. |
| | — |
| | — |
| | 13,503 |
| | | | | | | | | |
Debt securities (ticker: OMA21V) issued in the Mexican market on April 16, 2021, for Ps. 1,000,000, the loan accrues interest at a TIIE 28 rate (1) plus 75 basis points for a 5-year term maturing on April 10, 2026. Financing of green projects specified in the Bank's framework (note 20 b). |
| | 1,000,000 |
| | 1,000,000 |
| | — |
| | | | | | | | | |
Debt securities (ticker: OMA21-2) issued in the Mexican market on April 16, 2021, for Ps. 2,500,000 at an annual fixed rate of 7.83%, for a 7-year term maturing on April 7, 2028 (note 20 b). | | | 2,500,000 | | | 2,500,000 | | | — |
| | | | | | | | | |
Sustainability-linked notes (ticker: OMA22L) issued in the Mexican market on March 31, 2022, for Ps. 1,700,000 at a variable rate TIIE 28 days (1) plus 14 basis points for a term of 5 years maturing on March 25, 2027 (note 20 d). | | | 1,700,000 | | | — | | | — |
| | | | | | | | | |
Sustainability-linked notes (ticker OMA22-2L) issued in the Mexican market on March 31, 2022, for Ps.2,300,000 at an annual fixed rate of 9.35%, with a 7-year term maturing on March 22, 2029 (note 20 d). | | | 2,300,000 | | | — | | | — |
Total long-term debt |
| | 9,000,000 |
| | 5,000,000 |
| | 4,513,503 |
Less: |
| |
|
| |
|
| |
|
Financing commissions |
| | (15,664) |
| | (3,378) |
| | (3,115) |
|
| | 8,984,336 |
| | 4,996,622 |
| | 4,510,388 |
Current portion long-term debt |
| | (1,500,000) |
| | — |
| | (3,013,502) |
Long-term debt |
| Ps. | 7,484,336 |
| Ps. | 4,996,622 |
| Ps. | 1,496,886 |
| | | | | | | | | |
| | December 31, | |||||||
|
| 2020 |
| 2019 |
| 2018 | |||
Debt securities issued in the Mexican market on June 16, 2014, for Ps. 3,000,000, accruing interest at a fixed rate of 6.85%, for a 7-year term maturing on June 7, 2021. GACN and nine of the 13 airports guarantee the certificates, which represent a guarantee of 80% of consolidated EBITDA |
| Ps. | 3,000,000 |
| Ps. | 3,000,000 |
| Ps. | 3,000,000 |
| | | | | | | | | |
Debt securities issued in the Mexican market on March 26, 2013, for Ps. 1,500,000, accruing interest at a fixed rate of 6.47%, for a 10-year term maturing on March 14, 2023. GACN and nine of the 13 airports guarantee the certificates, which represent a guarantee of 80% of consolidated EBITDA |
| | 1,500,000 |
| | 1,500,000 |
| | 1,500,000 |
| | | | | | | | | |
Unsecured lines of credit with Private Export Funding Corporation (supported by Ex-Im Bank) in 2010 and 2011 for U.S.$ 25,365 thousand maturing on December 21, 2021. As December 31, 2020, 2019 and 2018, outstanding amounts were U.S.$ 678 thousand, U.S.$ 2,495 thousand and US.$ 4,583 thousand, respectively. Baggage screening equipment was pledged to secure the loan ⁽²⁾. The loan accrues interest at a three-month London Interbank Offered (“LIBOR”) rate plus 1.25 percentage points, with quarterly payments of principal. As of December 31, 2020, 2019 and 2018, the interest rate was 1.49%, 3.15% and 4.04%, respectively. |
| | 13,503 |
| | 49,575 |
| | 90,156 |
| | | | | | | | | |
Line of credit with UPS Capital Business Credit (supported by Ex-Im Bank) for U.S.$ 3,120,000. The amount was drawn down upon in April 20, 2014, and the line of credit terminates on January 25, 2019. As of December 31, 2018, the outstanding balance was, U.S.$ 156 thousand. The line of credit is secured by firefighting equipment ⁽¹⁾. The loan bears interest at three-month LIBOR plus 2.65 percentage point with quarterly principal payments. As of December 31, 2018, the interest rate was 5.44%. |
| | — |
| | — |
| | 3,067 |
Total long-term debt |
| | 4,513,503 |
| | 4,549,575 |
| | 4,593,223 |
Less: |
| |
|
| |
|
| |
|
Financing commissions |
| | (3,115) |
| | (5,966) |
| | (8,629) |
|
| | 4,510,388 |
| | 4,543,609 |
| | 4,584,594 |
Current portion long-term debt |
| | (3,013,502) |
| | (36,851) |
| | (41,425) |
Long-term debt |
| Ps. | 1,496,886 |
| Ps. | 4,506,758 |
| Ps. | 4,543,169 |
(1) | The Interbank Offering Rate in Mexico “TIIE” to the 28 and 91-days as of December 31, 2022, was 10.7605 and 10.9749, respectively. |
(2) | Carrying value amounts to |
Carrying values are Ps. 35,760 asF-38
The movement of the initial balance to the final balance of the bank loansChanges in consolidated long-term debt for the years ended December 31, 2022, 2021 and 2020 2019 and 2018 correspond to debt principal payments of $42,592, $40,790 and $49,563, respectively, and the exchange (loss) gain effects of Ps. $(6,520), Ps. 2,858, and Ps. 1,601, respectively. There is no new loan or other movement associated with these loans.were as follows:
F-43
| | | | | | | | | |
| | December 31, | |||||||
|
| 2022 |
| 2021 |
| 2020 | |||
Initial debt balance |
| Ps. | 4,996,622 |
| Ps. | 4,510,388 |
| Ps. | 4,543,609 |
Increase in debt |
| | 4,000,000 |
| | 3,500,000 |
|
| — |
Long term debt repayment | | | — | | | (13,967) | | | (42,592) |
Amortization of debt securities |
| | — |
| | (3,000,000) |
|
| |
Payment of commissions and other expenses |
| | (14,076) |
| | (12,859) |
|
| — |
Amortization of expenses |
| | 1,790 |
| | 12,595 |
|
| 2,851 |
Exchange rate fluctuation |
| | — |
| | 465 |
|
| 6,520 |
Ending balance of debt |
| Ps. | 8,984,336 |
| Ps. | 4,996,622 |
| Ps. | 4,510,388 |
Maturity of long-term debt as of December 31, 2020, 20192022, 2021 and 20182020 is described in note 21.
OutstandingThe long-term loansdebt securities include certain restrictive clauses, such as but not limited to, limiting bank loans to subsidiaries, pledge provision, tax payments, other obligations,limitations on disposal of fixed assets and other noncurrent assets,or limitations on incurring liens, as well as early maturity clauses including the obligation to maintainmaturity of other obligations more than certain financial ratios.thresholds. For the years ended December 31, 2020, 20192022, 2021 and 2018,2020, these restrictions were met.
The sustainability-linked notes issued on March 31, 2022, are subject to a sustainability development goal ("SDG") consisting of a reduction of at least 58% in the indicator of kilograms of CO2 equivalent scope 1 and 2 emissions per passenger in the year 2025 compared to the reference year (2018). In the event that the Company fails to achieve the SDG, the interest rate of the debt securities will be increased by 25 basis points starting August 13, 2026 in the case of the debt securities OMA22L, and starting September 24, 2026 in the case of the debt securities OMA22-2L, until their respective maturities.
16. Major maintenance provision
The Company has the obligation to perform major maintenance activities in its airports. The provision is recognized as accrued at an amount that represents the best estimate of the present value of future disbursements required to settle the obligation, at the date of the accompanying consolidated financial statements at a discount rate of 7.89%10.04%, 8.00%8.66% and 9.67%7.89% as of December 31, 2020, 20192022, 2021 and 2018,2020, respectively.
As of December 31, 2020, 20192022, 2021 and 2018,2020, the composition and changes of the Company’s major maintenance provision was as follows:
| | | | | | | | | | | | | | | |
| | December 31, | | | | | | | | December 31, 2022 | |||||
|
| 2021 |
| Additions |
| Disbursements |
| Short-term |
| Long-term | |||||
Major maintenance of concessioned assets | | Ps. | 1,741,733 | | Ps. | 646,948 | (1) | Ps. | (397,963) | | Ps. | 949,197 | | Ps. | 1,041,521 |
| | | | | | | | | | | | | | | |
| | December 31, | | | | | | | | December 31, 2021 | |||||
|
| 2020 |
| Additions |
| Disbursements |
| Short-term |
| Long-term | |||||
Major maintenance of concessioned assets | | Ps. | 1,317,985 | | Ps. | 626,790 | (1) | Ps. | (203,042) | | Ps. | 692,788 | | Ps. | 1,048,945 |
| | | | | | | | | | | | | | | |
| | December 31, | | | | | | | | December 31, 2020 | |||||
|
| 2018 |
| Additions |
| Disbursements |
| Short-term |
| Long-term | |||||
Major maintenance of concessioned assets | | Ps. | 953,896 | | Ps. | 467,793 | (1) | Ps. | (103,704) | | Ps. | 443,570 | | Ps. | 874,415 |
| | | | | | | | | | | | | | | |
| | December 31, | | | | | | | | December 31, 2020 | |||||
|
| 2019 |
| Additions |
| Disbursements |
| Short-term |
| Long-term | |||||
Major maintenance of concessioned assets | | Ps. | 953,896 | | Ps. | 467,793 | (1) | Ps. | (103,704) | | Ps. | 443,570 | | Ps. | 874,415 |
| | | | | | | | | | | | | | | |
| | December 31, | | | | | | | | December 31, 2019 | |||||
|
| 2018 |
| Additions |
| Disbursements |
| Short-term |
| Long-term | |||||
Major maintenance of concessioned assets | | Ps. | 943,548 | | Ps. | 315,481 | (1) | Ps. | (305,133) | | Ps. | 151,554 | | Ps. | 802,342 |
| | | | | | | | | | | | | | | |
| | December 31, | | | | | | | | December 31, 2018 | |||||
|
| 2017 |
| Additions |
| Disbursements |
| Short-term |
| Long-term | |||||
Major maintenance of concessioned assets | | Ps. | 857,624 | | Ps. | 225,244 | (1) | Ps. | (139,320) | | Ps. | 224,982 | | Ps. | 718,566 |
(1) | Includes |
The provision for major maintenance as of December 31, 20202021, reflects the update of such provision as a result of the approval in November 2020 of the Master Development Program for the period 2021-2025 as indicated in Note 2.2021-2025.
F-44F-39
a. | Defined contribution plans. |
a. Defined contribution plans
TheUntil June 2021, the Company offershad defined contribution retirement benefit plans for all employees who qualify.qualifying employees. The plan assets are kept separateof the plans were held separately from the Company’s assets in funds kept in a trust under the control of trustees. Iffiduciaries.
The defined contribution plan was terminated during July 2021 and the employee leaves the plan before fully vesting,accumulated funds in the trust will paywere transferred to the employee up to 50% aspersonal investment fund plans of each of the fifth year in which he or she adhered to such plan and increase by 10% each year until reaching 100%.qualifying employees.
TheIn 2020, the total contributions to these plans based on the specific rates in the plan amounted to Ps.894, Ps.967,Ps.894.
b. | Defined benefit plans. |
In accordance with the Federal Labor Law, the Company is required to pay a seniority premium as a retirement benefit if an employee retires and Ps.1,454 in 2020, 2019 and 2018, respectively. A total of Ps.175, Ps.133 and Ps.541 in 2020, 2019 and 2018, respectively, is pending of payment to the trust.
b. Defined benefit plans
This liability for employees derives from a pension plan,has served at least 15 years. The seniority premiums benefits and termination benefits.
Seniority premiums consistpremium consists of a single payment equal to 12 days’ salary for each year of service based on the employee’s most recent salary, but without exceedingexceedingly twice the current minimum wage established by law and thelaw.
In addition, payments for the pensiontermination benefit plan consist of an equivalent of 20 days for each year worked and 90 days based on the pensionable salary determined based on actuarial calculations performedmade by external actuaries, using the projected unit credit.credit method.
As of December 2011, the pension plan was modified, establishing an early retirement from age 60 for all employees with at least 10 years of service to the Company.
The Mexican plans normally expose the Company to actuarial risks such as: investment risk, interest rate risk, longevity risk and salary risk.
| | |
Investment risk |
| The present value of the defined benefit plan obligations is calculated using a discount rate that is determined by long-term government bond yields. To select the discount rate, the yield rate of the bond is considered, which is similar to the duration of the obligations of the Company’s labor liabilities. The average days on which benefit payments are due and not the days that the bonus is due to expire are taken |
| | |
Interest risk | | A decrease in the interest rate of the bonds may increase the liabilities of the plan, however, this is partially offset by an increase in the plan’s debt investment performance. |
| | |
Longevity risk | | The present value of the defined benefit plan liability is calculated by reference to the best estimate of the mortality of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan’s liability. |
| | |
Salary risk | | The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan’s liability. |
There are no additional retirement benefit plans for qualifying employees.
F-45
The actuarial calculation of the defined benefit obligation was calculated as of December 31, 2020, 20192022, 2021 and 20182020 by actuaries certified by the National School of Actuaries (Colegio Nacional de Actuarios de México). The present value of the defined benefit obligation, and the related current service cost and past service cost, were measured using the projected unit credit method.
F-40
The principal assumptions used for the purposes of the actuarial valuations are as follows:
| | | | | | | | | | | | | | |
| | Year ended December 31, |
| | Year ended December 31, |
| ||||||||
|
| 2020 |
| 2019 |
| 2018 |
|
| 2022 |
| 2021 |
| 2020 |
|
Discount rate (see note 5 a.) |
| 7.40 | % | 8.00 | % | 9.00 | % |
| 9.6 | % | 7.9 | % | 7.4 | % |
Expected rate of salary increase |
| 5.80 | % | 5.80 | % | 5.80 | % |
| 5.8 | % | 5.8 | % | 5.8 | % |
Average longevity at retirement age for current pensioners (years) |
| 12 |
| 14 |
| 13 | | |||||||
Average longevity at retirement age for current employees (years) |
| 14 |
| 14 |
| 12 |
| |||||||
Inflation |
| 4.00 | % | 5.00 | % | 4.00 | % |
| 4.0 | % | 4.0 | % | 4.0 | % |
The amounts recognized in the consolidated statement of income and other comprehensive income in respect of these defined benefit plans are as follows:
| | | | | | | | | | | | | | | | | | |
| | Year ended December 31, | | Year ended December 31, | ||||||||||||||
|
| 2020 |
| 2019 |
| 2018 |
| 2022 |
| 2021 |
| 2020 | ||||||
Service cost: |
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
Current service cost | | Ps. | 8,276 | | Ps. | 7,465 | | Ps. | 7,467 | | Ps. | 9,883 | | Ps. | 9,535 | | Ps. | 8,276 |
Net interest expense | |
| 8,490 | ��� |
| 7,156 | |
| 7,677 | |
| 10,053 | |
| 8,936 | |
| 8,490 |
Reductions and liquidations advance | | | (9,131) | | | — | | | — | |||||||||
Reductions and terminations | | | (2,422) | | | — | | | (9,131) | |||||||||
Components of defined benefit costs recognized in profit or loss | |
| 7,635 | |
| 14,621 | |
| 15,144 | |
| 17,514 | |
| 18,471 | |
| 7,635 |
Remeasurement on the net defined benefit liability: | |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
Actuarial gains and losses arising from changes in financial assumptions | |
| 2,653 | |
| (161) | |
| (10,131) | |
| (31,009) | |
| 2,094 | |
| 2,653 |
Actuarial gains and losses arising from experience adjustments | |
| 10,386 | |
| 12,995 | |
| (14,042) | |
| 9,751 | |
| (6,414) | |
| 10,386 |
Components of defined benefit costs recognized in other comprehensive income (loss) | |
| 13,039 | |
| 12,834 | |
| (24,173) | |
| (21,258) | |
| (4,320) | |
| 13,039 |
Total | | Ps. | 20,674 | | Ps. | 27,455 | | Ps. | (9,029) | | Ps. | (3,744) | | Ps. | 14,151 | | Ps. | 20,674 |
The current service cost and the net interest expense are included in the employee benefits expense in the consolidated statement of income and in other comprehensive income.
The remeasurement of the net defined benefit liability is included in other comprehensive income.
The amount included in the consolidated statement of financial position arising from the Company’s obligation in respect of its defined benefit plans is as follows:
| | | | | | | | | | | | | | | | | | | | |||||||||||||
| | | December 31, | | December 31, | |||||||||||||||||||||||||||
|
| 2020 |
| 2019 |
| 2018 |
| 2022 |
| 2021 |
| 2020 | ||||||||||||||||||||
Present value of defined benefit obligations | | Ps. | 115,691 | | Ps. | 106,160 | | Ps. | 79,905 | | Ps. | 121,477 | | Ps. | 129,199 | | Ps. | 115,691 |
F-46
Movements in the present value of the defined benefit obligation in the current year are as follows:
| | | | | | | | | | | | | | | | | | |
| | December 31, | | December 31, | ||||||||||||||
|
| 2020 |
| 2019 |
| 2018 |
| 2022 |
| 2021 |
| 2020 | ||||||
Present value of defined benefit obligation as of January 1, | | Ps. | 106,160 | | Ps. | 79,905 | | Ps. | 127,479 | | Ps. | 129,199 | | Ps. | 115,691 | | Ps. | 106,160 |
Current service cost | |
| 8,276 | |
| 7,465 | |
| 7,467 | |
| 9,883 | |
| 9,535 | |
| 8,276 |
Interest cost | |
| 8,490 | |
| 7,156 | |
| 7,677 | |
| 10,053 | |
| 8,936 | |
| 8,490 |
Reductions and Liquidations advance | | | (9,131) | | | — | | | — | |||||||||
Reductions and terminations | | | (2,422) | | | — | | | (9,131) | |||||||||
Remeasurement (gains)/losses: | |
| | |
| | |
|
| |
| | |
| | |
| |
Actuarial gains and losses arising from changes in financial and demographic assumptions | |
| 2,653 | |
| (161) | |
| (10,131) | |
| (31,009) | |
| 2,094 | |
| 2,653 |
Actuarial gains and losses arising from experience adjustments | |
| 10,386 | |
| 12,995 | |
| (14,042) | |
| 9,751 | |
| (6,414) | |
| 10,386 |
Benefits paid | |
| (11,143) | |
| (1,200) | |
| (38,545) | |
| (3,978) | |
| (643) | |
| (11,143) |
Present value of defined benefit obligation | | Ps. | 115,691 | | Ps. | 106,160 | | Ps. | 79,905 | | Ps. | 121,477 | | Ps. | 129,199 | | Ps. | 115,691 |
F-41
Significant actuarial assumptions for the determination of the defined obligation are discount rate, expected salary increase and mortality. The sensitivity analyses below have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.
| If the discount rate increases (decreases) by 1%, the defined benefit obligation would decrease |
| If the expected salary growth increases (decreases) by 1%, the defined benefit obligation would increase |
The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the change in assumptions would occur in isolation of one another as some of the assumptions may be correlated.
Furthermore, in presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation liability recognized in the consolidated statement of financial position.
There was no change in the methods and assumptions used in preparing the sensitivity analysis from prior years.
There was no change in the process followed by the Company to manage its risks from prior periods.
The average duration period of the benefit obligation as of December 31, 20202022, is 11.7814.40 years (2019: 13.97(2021: 12.9 years and 2018: 16.752020: 11.78 years).
F-47
Expected cash flows from pension planstermination benefits and seniority premium benefits for the next 10 years are as follows:
| | | | | | | | | | | | | | | | | | ||||||
| |
| | |
| Seniority premium |
| | |
| Pensions |
| Seniority premium |
| | | |||||||
Year | Year | | Pensions plan | | benefits | | Total | | plan | | benefits | | Total | ||||||||||
2021 | | Ps. | — | | Ps. | 845 | | Ps. | 845 | ||||||||||||||
2022 | |
| — | |
| 961 | |
| 961 | ||||||||||||||
2023 | 2023 | |
| 551 | |
| 1,179 | |
| 1,730 | | Ps. | 559 | | Ps. | 1,294 | | Ps. | 1,853 | ||||
2024 | 2024 | |
| 9,837 | |
| 1,420 | |
| 11,257 | |
| 9,794 | |
| 1,614 | |
| 11,408 | ||||
From 2025 and subsequently | |
| 43,161 | |
| 14,016 | |
| 57,177 | ||||||||||||||
2025 | |
| 289 | |
| 1,547 | |
| 1,836 | ||||||||||||||
2026 | |
| 2,818 | |
| 2,207 | |
| 5,025 | ||||||||||||||
From 2027 and subsequently | |
| 172,506 | |
| 48,117 | |
| 220,623 | ||||||||||||||
Total | Total | | Ps. | 53,549 | | Ps. | 18,421 | | Ps. | 71,970 | | Ps. | 185,966 | | Ps. | 54,779 | | Ps. | 240,745 |
18. Right of use assets, net and lease liability
As lessee
Lease contracts entered into by the Company are as follows:
In October 2008, the Company acquired the shares of Consorcio Grupo Hotelero T2, S.A. de C.V. As a result of this acquisition, the Company assumed the commitments established in the lease agreement signed with the Mexico City International Airport for a period of 20 years, to construct, prepare and operate a hotel, and manage commercial areas at Terminal 2 of the Mexico City International Airport, establishing a minimum guaranteed income (“MGI”) of Ps.31,171, which updated amounted to Ps.34,807 annually, as rent, or a royalty of the 18% of the hotel’s revenue, whichever is greater. The MGI will be adjusted on an annual basis using the NCPI.
a.The following is a summary of the right-of-use assets and the lease liability
| | | | | | | | | |
| | | | | | | | | |
Cost |
| Buildings |
| Other |
| Total | |||
Balance as of January 1, 2019 | | Ps. | 213,342 | | Ps. | 18,475 | | Ps. | 231,817 |
Additions | | | 10,732 | | | 5,508 | | | 16,240 |
Balance as of December 31, 2019 | | | 224,074 | | | 23,983 | | | 248,057 |
Additions | | | 9,771 | | | 769 | | | 10,540 |
Decreases | | | (1,055) | | | (1,475) | | | (2,530) |
Balance as of December 31, 2020 | | Ps. | 232,790 | | Ps. | 23,277 | | Ps. | 256,067 |
Depreciation | | | | | | | | | |
Balance as of January 1, 2020 | | Ps. | (30,803) | | Ps. | (6,466) | | Ps. | (37,269) |
Depreciation of the year | | | (31,463) | | | (9,885) | | | (41,348) |
Decreases | | | - | | | 797 | | | 797 |
Balance as of December 31,2020 | | Ps. | (62,266) | | Ps. | (15,554) | | Ps. | (77,820) |
b.Amounts recognized in consolidated statement of profit or loss statement:
| | | | | | |
|
| 2020 |
| 2019 | ||
Depreciation expense of right of use assets | | Ps. | 41,348 | | | 37,269 |
Interest expense on lease liabilities | | | 22,431 | | | 22,983 |
F-48F-42
a. | The following is a summary of the right-of-use assets and the lease liability: |
c.The following is a summary of the lease liability:
| | | | | | |
| | 2020 |
| 2019 | ||
Maturity analysis: | | |
|
| |
|
Less than one year | | Ps. | 26,553 | | | 72,320 |
Greater than 1 year and less than 3 years | |
| 55,134 | |
| 73,975 |
Greater than 3 years | |
| 113,076 | |
| 74,565 |
Total | | Ps. | 194,763 | | | 220,860 |
| | | | | | | | | |
Cost |
| Buildings |
| Other |
| Total | |||
Balance as of January 1, 2021 |
| Ps. | 232,790 | | Ps. | 23,277 | | Ps. | 256,067 |
Additions | | | 41,771 | | | 24,754 | | | 66,525 |
Decreases | | | (29,653) | | | (6,196) | | | (35,849) |
Balance as of December 31, 2021 | | Ps. | 244,908 | | Ps. | 41,835 | | Ps. | 286,743 |
Remediations | | | 8,687 | | | 6,199 | | | 14,886 |
Decreases | | | — | | | (6,990) | | | (6,990) |
Balance as of December 31, 2022 |
| Ps. | 253,595 |
| Ps. | 41,044 |
| Ps. | 294,639 |
Depreciation | | | | | | | | | |
Balance as of January 1, 2022 |
| Ps. | (67,050) |
| Ps. | (22,562) |
| Ps. | (89,612) |
Depreciation of the year | | | (34,060) | | | (9,987) | | | (44,047) |
Decreases | | | — | | | 4,024 | | | 4,024 |
Balance as of December 31, 2022 |
| Ps. | (101,110) |
| Ps. | (28,525) |
| Ps. | (129,635) |
b. | Amounts recognized in consolidated statement of profit or loss statement: |
| | | | | | |
|
| 2022 |
| 2021 | ||
Depreciation expense of right of use assets | | Ps. | 43,189 | | | 41,275 |
Interest expense on lease liabilities | | | 25,592 | | | 24,402 |
c. | The following is a summary of the undiscounted lease liability: |
| | | | | | |
| | 2022 |
| 2021 | ||
Maturity analysis: | | |
|
| |
|
Less than one year | | Ps. | 33,446 | | | 41,107 |
Greater than 1 year and less than 3 years | |
| 97,177 | |
| 83,359 |
Greater than 3 years | |
| 77,582 | |
| 47,666 |
Total | | Ps. | 208,205 | | | 172,132 |
The Company does not face a significant liquidity risk with respect to its lease liabilities. Lease liabilities are monitored through the Company'sCompany’s treasury department.
d. | For the years ended December 31, 2022 and 2021, the total cash outflow for leases amounted to Ps.53,185 and Ps.54,589 (excluding items disbursed in excess of the IMG as variable participation), respectively. |
d.As of December 31, 2020 and 2019, the total cash outflow for leases amounted to Ps. 57,325 and Ps.57,061 (excluding items disbursed in excess of the IMG as variable participation), respectively.
As lessor
Revenues from operating leases
Mainly related to leases entered into by the Company, which are based on monthly rental payments that generally increase each year based on the NCPI, and/or the greater of a guaranteed minimum monthly rent plus a percentage of monthly income of the tenant. As of December 31, 2020, 20192022, 2021 and 2018,2020, the committed future rents to be received are as follows:
| | | | | | | | | | | | | | | | | | |
| | Year ended December 31, | | Year ended December 31, | ||||||||||||||
|
| 2020 |
| 2019 |
| 2018 |
| 2022 |
| 2021 |
| 2020 | ||||||
Duration: |
| |
|
| |
| | |
|
| |
|
| |
| | |
|
Less than 1 year | | Ps. | 444,523 | | Ps. | 546,671 | | Ps. | 562,681 | | Ps. | 383,779 | | Ps. | 428,592 | | Ps. | 444,523 |
Greater than 1 year and less than 5 years | |
| 753,230 | |
| 843,404 | |
| 1,002,351 | |
| 407,156 | |
| 477,409 | |
| 753,230 |
Greater than 5 years | |
| 118,256 | |
| 161,109 | |
| 240,584 | |
| 111,757 | |
| 120,726 | |
| 118,256 |
Total | | Ps. | 1,316,009 | | Ps. | 1,551,184 | | Ps. | 1,805,616 | | Ps. | 902,692 | | Ps. | 1,026,727 | | Ps. | 1,316,009 |
F-43
Minimum lease payments in the table above do not include contingent rentals, such as increases by NCPI or increases by a percentage of the monthly income of the lessee. Contingent rental income recorded for the years ended December 31, 2022, 2021, and 2020 2019,were Ps.335,892, Ps.197,439 and 2018 were Ps. 136,181, Ps. 229,727 and Ps. 204,172,Ps.136,181, respectively.
As a result of the impact generated by the COVID-19 pandemic, the Company granted certain discounts to commercial tenants during the second half of the year 2020, which were subject to certain conditions. These discounts were granted based on the decrease in passenger traffic at the Issuer'sIssuer’s airports during the period.
Accrued operating lease income is detailed in note 27.26.
F-49
The Company is subject to Income Tax (“ISR”), whose tax rate was 30% for 2020, 20192022, 2021 and 2018,2020, and will continue to be 30% for later years.
a. Income tax are as follows:
| | | | | | | | | | |||||||||
| | Year ended December 31, | ||||||||||||||||
|
| 2020 |
| 2019 |
| 2018 | ||||||||||||
Current ISR | | Ps. | 480,232 | | Ps. | 1,329,867 | | Ps. | 1,113,712 | |||||||||
Deferred ISR | | | (85,731) | |
| 42,355 | |
| 7,691 | |||||||||
Income tax expense | | Ps. | 394,501 | | Ps. | 1,372,222 | | Ps. | 1,121,403 |
b. As of December 31, 2020, 2019 and 2018, the principal items comprising the balance of the deferred ISR asset (liability) were:
| | | | | | | | | |
| | | | | December 31, | ||||
|
| 2020 |
| 2019 |
| 2018 | |||
Liabilities: | | | |
| | | | | |
Provisions, allowances and labor obligations | | Ps. | 244,982 | | Ps. | 157,560 | | Ps. | 163,406 |
Investment in airport concessions, property, leasehold improvements and equipment, net | |
| (426,325) | |
| (407,173) | |
| (401,735) |
Tax loss carryforwards (1) | |
| 15,883 | |
| 14,937 | |
| 25,563 |
Recoverable tax on assets (2) | |
| 28,619 | |
| 28,619 | |
| 28,619 |
Others | | | 3,013 | | | 3,340 | | | — |
Total liabilities | | Ps. | (133,828) | | Ps. | (202,717) | | Ps. | (184,147) |
Assets: | |
|
| |
|
| |
|
|
Provisions, allowances and labor obligations | | Ps. | 230,532 | | Ps. | 205,834 | | Ps. | 188,294 |
Investments in airport concessions, property, leasehold improvements and equipment, net | |
| (172,806) | |
| (184,649) | |
| (179,805) |
Tax loss carryforwards(1) | |
| 268,930 | |
| 285,045 | |
| 308,450 |
Others | | | (8,898) | | | (9,226) | | | — |
Total assets | | Ps. | 317,758 | | Ps. | 297,004 | | Ps. | 316,939 |
Net deferred ISR asset | | Ps. | 183,930 | | Ps. | 94,287 | | Ps. | 132,792 |
a. | Income tax are as follows: |
| | | | | | | | | |
| | Year ended December 31, | |||||||
|
| 2022 |
| 2021 |
| 2020 | |||
Current ISR | | Ps. | 1,653,920 | | Ps. | 1,217,748 | | Ps. | 480,232 |
Deferred ISR | | | (278,400) | | | (245,569) | | | (85,731) |
Income tax expense | | Ps. | 1,375,520 | | Ps. | 972,179 | | Ps. | 394,501 |
b. | As of December 31, 2022, 2021 and 2020, |
| | | | | | | | | |
| | | | | December 31, | ||||
|
| 2022 |
| 2021 |
| 2020 | |||
Liabilities: | | | |
| | | | | |
Provisions, allowances and labor obligations | | Ps. | 150,040 | | Ps. | 159,813 | | Ps. | 244,982 |
Investment in airport concessions, property, leasehold improvements and equipment, net | |
| (216,843) | |
| (225,726) | |
| (426,325) |
Tax loss carryforwards (1) | |
| 12,366 | |
| 3,242 | |
| 15,883 |
Recoverable tax on assets (2) | |
| — | |
| 28,619 | |
| 28,619 |
Others | | | (2,234) | | | (2,137) | | | 3,013 |
Total liabilities | | Ps. | (56,671) | | Ps. | (36,189) | | Ps. | (133,828) |
Assets: | |
|
| |
|
| |
|
|
Provisions, allowances and labor obligations | | Ps. | 625,408 | | Ps. | 468,314 | | Ps. | 230,532 |
Investments in airport concessions, property, leasehold improvements and equipment, net | |
| (102,196) | |
| (243,480) | |
| (172,806) |
Tax loss carryforwards(1) | |
| 208,602 | |
| 243,191 | |
| 268,930 |
Recoverable tax on assets(2) | | | 28,619 | | | — | | | — |
Others | | | (3,524) | | | (3,621) | | | (8,898) |
Total assets | | Ps. | 756,909 | | Ps. | 464,404 | | Ps. | 317,758 |
Net deferred ISR asset | | Ps. | 700,238 | | Ps. | 428,215 | | Ps. | 183,930 |
(1) | As of December 31, 2022, 2021 and |
(2) | The Company recognized the IMPAC paid during 2002 through 2007. In 2013, the Company recognized the deferred tax asset, which it expects to recover subject to certain conditions established in the Income Tax Law. The updated amount as of December 31, |
c. The changes in deferred tax during the year are as follows:
| | | | | | | | | | |
| | | | | December 31, | |||||
|
| 2020 |
| 2019 |
| 2018 | ||||
Beginning balance of deferred tax liability, net | | Ps. | 94,287 | | Ps. | 132,792 | | Ps. | 150,953 | |
Deferred ISR in profit or loss | |
| 85,731 | |
| (42,355) | |
| (7,691) | |
Recoverable tax on assets | |
| — | |
| — | |
| (10,466) | |
Income tax effects recognized in other comprehensive income | |
| 3,912 | |
| 3,850 | |
| (4) | |
Ending balance of deferred tax asset, net | | Ps. | 183,930 | | Ps. | 94,287 | | Ps. | 132,792 |
F-50F-44
d. The reconciliation of the statutory income tax rate and the effective income tax rate as a percentage of net income before income tax is as follows:
| | | | | | | | | | | | | | | | | | | | | |
| | | Year ended December 31, | |
| | | ||||||||||||||
|
| 2020 | | 2019 | | 2018 | |||||||||||||||
| | Amount | | | Rate % | | Amount | | | Rate % | | Amount | | | Rate % | ||||||
Income before income taxes | | Ps. | 1,492,380 | | | | | | Ps. | 4,599,656 | | | | | | Ps. | 3,985,582 | | | | |
Current ISR | | | 480,232 | | | | | | | 1,329,867 | | | | | | | 1,113,712 | | | | |
Deferred ISR | | | (85,731) | | | | | | | 42,355 | | | | | | | 7,691 | | | | |
Income tax expense and effective rate |
| Ps. | 394,501 | | | 26.43 | % | | Ps. | 1,372,222 | | | 29.83 | % | | Ps. | 1,121,403 | | | 28.14 | % |
Add effects of permanent differences, primarily, non-deductible expenses and inflationary effects for financial and tax purposes. |
| | 53,213 | | | 3.57 | % | | | 7,675 | | | 0.17 | % | | | 74,272 | | | 1.86 | % |
Statutory rate |
| Ps. | 447,714 | | | 30.00 | % | | Ps. | 1,379,897 | | | 30.00 | % | | Ps. | 1,195,675 | | | 30.00 | % |
e. Each airport concession has received approval from the Ministry of Finance and Public Credit (Secretaría de Hacienda y Crédito Público) to carry forward their tax losses up to the earlier of the date of which such tax loss carryforwards are utilized by the airport or the date of expiration or liquidation of the concession. The base years and amounts as of December 31, 2020 are as follows:
| | | |
|
| Tax loss | |
Year of Origin | | carryforwards | |
2001 | | Ps. | 5,999 |
2002 | | | 160,499 |
2003 | |
| 197,796 |
2004 | |
| 229,480 |
2005 | |
| 28,073 |
2006 | |
| 18,953 |
2007 | |
| 78,672 |
2008 | |
| 34,168 |
2009 | |
| 5,648 |
2011 | |
| 32,203 |
2012 | |
| 56,125 |
2013 | | | 15,549 |
2018 | |
| 5,370 |
2019 | |
| 21,248 |
2020 | |
| 25,011 |
| | Ps. | 914,794 |
f. In addition to the tax loss carryforwards of the airport concessionaires aforementioned, the Company has tax losses of other subsidiaries other than its concessionaires in the amount of Ps.34,826 the duration of which is 10 years under the Income Tax Law, and the expiration date of which is between 2020 and 2028.
g. In 2020, the Company utilized tax loss carryforwards in the amount of Ps.133,053.
F-51
| The changes in deferred tax during the year are follows: |
| | | | | | | | | |
| | | | | December 31, | ||||
|
| 2022 |
| 2021 |
| 2020 | |||
Beginning balance of deferred tax liability, net | | Ps. | 428,215 | | Ps. | 183,930 | | Ps. | 94,287 |
Deferred ISR in profit or loss | |
| 278,400 | |
| 245,569 | |
| 85,731 |
Income tax effects recognized in other comprehensive income | |
| (6,377) | |
| (1,284) | |
| 3,912 |
Ending balance of deferred tax asset, net | | Ps. | 700,238 | | Ps. | 428,215 | | Ps. | 183,930 |
d. | The reconciliation of the statutory income tax rate and the effective income tax rate as a percentage of net income before income tax is as follows: |
| | | | | | | | | | | | | | | | | | | | | |
| | | Year ended December 31, | |
| | | ||||||||||||||
|
| 2022 | | 2021 | | 2020 | |||||||||||||||
| | Amount | | | Rate % | | Amount | | | Rate % | | Amount | | | Rate % | ||||||
Income before income taxes | | Ps. | 5,292,825 | | | | | | Ps. | 3,835,809 | | | | | | Ps. | 1,492,380 | | | | |
Current ISR | | | 1,653,920 | | | | | | | 1,217,748 | | | | | | | 480,232 | | | | |
Deferred ISR | | | (278,400) | | | | | | | (245,569) | | | | | | | (85,731) | | | | |
Income tax expense and effective rate |
| Ps. | 1,375,520 | | | 25.99 | % | | Ps. | 972,179 | | | 25.34 | % | | Ps. | 394,501 | | | 26.43 | % |
Add effects of permanent differences, primarily, non-deductible expenses and inflationary effects for financial and tax purposes. |
| | 212,327 | | | 4.01 | % | | | 178,564 | | | 4.66 | % | | | 53,213 | | | 3.57 | % |
Statutory rate |
| Ps. | 1,587,847 | | | 30.00 | % | | Ps. | 1,150,743 | | | 30.00 | % | | Ps. | 447,714 | | | 30.00 | % |
e. | Each airport concession has received approval from the Ministry of Finance and Public Credit (Secretaría de Hacienda y Crédito Público) to carry forward their tax losses up to the earlier of the date of which such tax loss carryforwards are utilized by the airport or the date of expiration or liquidation of the concession. The base years and amounts as of December 31, 2022, are as follows: |
| | | |
|
| Tax loss | |
Year of Origin | | Carryforwards | |
2002 | | Ps. | 89,065 |
2003 | |
| 180,377 |
2004 | |
| 153,475 |
2005 | |
| 1,656 |
2007 | |
| 47,692 |
2008 | |
| 33,095 |
2011 | |
| 8,039 |
2012 | |
| 32,103 |
2018 | |
| 6,215 |
2019 | |
| 24,591 |
2020 | | | 26,131 |
2021 | | | 23,496 |
2022 | |
| 11,159 |
| | Ps. | 637,094 |
f. | In addition to the tax loss carryforwards of the airport concessionaires aforementioned, the Company has tax losses of other subsidiaries other than its concessionaires in the amount of Ps.84,150 the duration of which is 10 years under the Income Tax Law, and the expiration date of which is between 2023 and 2032. |
g. | In 2022, the Company utilized tax loss carryforwards in the amount of Ps.186,922. |
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h. | The balances of shareholders’ equity tax accounts as of December 31 are: |
| | | | | | | | | | | | | | | | | | |
|
| December 31, |
| December 31, | ||||||||||||||
| | 2020 | | 2019 | | 2018 | | 2022 | | 2021 | | 2020 | ||||||
Contributed capital account | | Ps. | 4,694,822 | | Ps. | 4,584,512 | | Ps. | 4,458,342 | | Ps. | 5,349,827 | | Ps. | 5,039,892 | | Ps. | 4,694,822 |
Net consolidated tax profit account | |
| 3,144,619 | |
| 2,878,878 | |
| 1,684,563 | |
| 2,166,970 | |
| 3,028,125 | |
| 3,144,619 |
Total | | Ps. | 7,839,441 | | Ps. | 7,463,390 | | Ps. | 6,142,905 | | Ps. | 7,516,797 | | Ps. | 8,068,017 | | Ps. | 7,839,441 |
i. | Dividends paid from profits generated from January 1, 2014, to individuals residing in Mexico and residents abroad may be subject to additional income taxes of up to 10%, which shall be retained by the Company. |
j. Dividends paid from profits generated from January 1, 2014 to individuals residing in Mexico and residents abroad may be subject to additional income taxes of up to 10%, which shall be retained by the Company.
20. Commitment and contingencies
Commitment by guarantor
a. | In 2014 and 2013, GACN issued long-term debt securities for the amount of Ps. 3,000,000 and Ps. 1,500,000 with terms of 7 and 10 years, respectively, under the 2011 program. The Ps.3,000,000 issue was fully repaid in April 2021. The debt-securities are guaranteed by nine of its airports, whom together with GACN, must meet a minimum guarantee of 80% of consolidated earnings before interest (expense) income, taxes and depreciation and amortization (EBITDA). |
Guarantor — In 2014 and 2013, GACN issued long-term debt securities for the amount of Ps. 3,000,000 and Ps. 1,500,000 with terms of 7 and 10 years, respectively, under the 2011 program. The Company and nine of its airports are guarantors of the debt securities and must provide a minimum guarantee equal to 80% of EBITDA. The debt securities of $3,000,000 are presented in the financial statements as short-term debt, given their maturity in June 2021.
b. | In April 2021, GACN issued long-term debt securities for Ps.1,000,000 and Ps.2,500,000 for 5 and 7 years, respectively, under a new program registered in 2021. The securities are guaranteed by Monterrey Airport, Chihuahua Airport and Culiacán Airport, which, together with the issuer, must meet a minimum guarantee of 80% of consolidated EBITDA. |
c. | In December 2021, GACN incurred in short-term debt, through a promissory note, with HSBC Mexico, S.A. for Ps.900,000. Monterrey Airport, Chihuahua Airport and Culiacán Airport, are guarantors of this instrument. |
d. | In March 2022, GACN issued long-term sustainability-linked notes for Ps.1,700,000 and Ps.2,300,000 for 5 and 7 years, respectively, under the program registered in 2021. The securities are guaranteed by Monterrey Airport, Chihuahua Airport and Culiacán Airport, which, together with the issuer, must meet a minimum guarantee of 80% of consolidated (EBITDA). |
e. | In December 2022, GACN incurred in short-term debt, through a promissory note, with HSBC Mexico, S.A. for Ps.600,000. Monterrey Airport, Chihuahua Airport and Culiacan Airport are guarantors of such instrument. |
Commitments and Contingencies
I. |
|
In the past, various municipalities initiated certain administrative enforcement procedures against the Company for tax credits for property taxes on the real estate where the airports of said cities are located. The airports have filed nullity claims against said procedures, which are pending of resolution and are detailed below.
Acapulco Airport:
a) | In February 2019, the Municipal Inspection Directorate notified the Acapulco Airport, S.A. de C.V. (“Acapulco Airport”) in a letter addressed to the Mexican Airport and Auxiliary Services Agency (“ASA”) requiring proof of payment of Ps.27,012 (period from the first quarter of 1996 to the first quarter of 2019) for property tax. In response to the request, the Acapulco Airport presented clarifying briefs to the authority informing that it was not properly addressed to ASA. |
In May 2019, the Secretariat of Administration and Finance announced the agreement of the explanatory documents presented by the Acapulco Airport and noted that, having acquired the airport concession, the Acapulco Airport considered itself jointly and severally liable with respect to the tax credit required from ASA, so it was appropriate
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to require payment of the debt. A nullity claim was filed against this resolution and the Secretary of Infrastructure Communications and Transportation (SCT) was also called to trial as an interested third party.
b) | In May 2019, the
A claim for annulment was filed against this resolution and the SCT was also called to trial as an interested third party.
|
As of the date of these consolidated financial statements, the contingencies remain due to the fact that the lawsuits are still in effect, since the judgment on the merits to resolve these cases is still pending. However, in the event that the resolution of the trial is not favorable to the Acapulco Airport, it is considered that the economic repercussion of the trial would be borne by the Federal Government, by virtue of the foregoing and given that the Acapulco Airport estimates an unfavorable resolution to be unlikely, it has not recorded any provision in relation to these lawsuits.
Culiacán Airport:
In November 2018, the Revenue Department of the Municipal Treasury of Culiacán in the State of Sinaloa notified a resolution that determined Aeropuerto de Culiacán, S.A. de C.V. (“Culiacán Airport”) a tax credit in the amount of Ps. 5,764 for urban property tax for the periods from the 4th quarter of 2013 to the 3rd quarter of 2018.
A claim for annulment was filed against this resolution and the SCT was also called to trial as an interested third party.
As of the date of these consolidated financial statements, the contingencies remain due to the fact that the lawsuit is still in force, since the judgment on the merits to resolve these cases is still pending.
However, in case the resolution of the trial is not favorable for the Culiacán Airport, it is estimated that the economic repercussion of the trial would be borne by the Federal Government, due to the above and given that the Culiacán Airport considers it unlikely to obtain an unfavorable resolution, has not recorded any provision in relation to these demands.
II. |
|
Ciudad Juárez Airport
On November 15, 1995, parties purporting to be former owners of land comprising a portion of the Ciudad Juárez Airport initiated legal proceedings against the Aeropuerto de Ciudad Juárez, S.A. de C.V. (“Ciudad Juárez Airport”) to reclaim the land (240 hectares), alleging that it was improperly transferred to the Mexican government. As an alternative to recovery of this land, the claimants also sought monetary damages of U.S.$120 million.
Within the trial, the Company challenged the claims of the claimant based on the legitimacy of the possession derived from the Concession Agreement granted by the Ministry of Infrastructure, Communications and Transportation. The Ministry of Infrastructure Communications and Transportation was called to trial in defense of the interests of the Mexican government.
On July 8, 2016, the local court in Ciudad Juárez ruled that the claims against the Ciudad Juárez Airport are inadmissible. The claimants filed an appeal before the Appellate Court in Chihuahua against the court’s determination. On July 31, 2017, the First Civil Court overturned the lower court’s decision and ruled in favor of the plaintiffs, requiring the Mexican government to pay restitution to the plaintiffs for their loss of property and in accordance with the lawsuit.
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The Mexican government filed a direct claim to appeal the decision, and on May 3, 2018, a favorable decision was issued, revoking the appealed decision, pursuant to which the claimant must return the title and payments claimed. The decision of the amparo trial was also favorable to the Ciudad Juárez Airport as co-defendant.
On May 25, 2018, the First Civil Chamber in Chihuahua issued, in compliance with the execution of the amparo decision, a new decision absolving the defendants of the payments claimed.
This decision was appealed by the claimant in a direct amparo trial, requesting the Supreme Court of Justice of the Nation (“SCJN”) to resolve the matter definitively by exercising its authority to assert jurisdiction. However, the SCJN resolved not to exercise the power of attraction to hear the matter and ordered the return to the Collegiate Court for the resolution of the amparo trial.
On January 2, 2020, the First Collegiate Circuit Court in Chihuahua issued the judgment in the amparo trial promoted by the plaintiff and denied the amparo requested by the plaintiff. Against the sentence, the plaintiff filed the appeal for review and the Collegiate Court ordered the file to be forwarded to the SCJN for resolution of the appeal.
The session of the appeal for review before the SCJN was held on November 24, 2021, resolving the appeal to the effect that the First Collegiate Circuit Court in Chihuahua proceeds again to the analysis of the concepts of violation of the direct constitutional relief filed by the Creel estate. The resolution by the First Collegiate Circuit Court in Chihuahua is pending.
As of the date of the consolidated financial statements, the contingencies are maintained since there is still no decision to resolve the trial. However, in the event that the judgment is not favorable to the Ciudad Juarez Airport, the economic impact of the trial will be borne by the Mexican government, as established in the concession title. The Ciudad Juárez Airport has not recorded any provision in connection to these claims given that it does not expect an economic impact, even in case of an unfavorable resolution.
In September 2019, the municipal authority of Chihuahua carried out verification visits at the commercial premises located at the Chihuahua Airport to request municipal operating licenses, likewise requiring the Chihuahua Airport to present its construction license.
A request for amparo was filed against such requirements by the Chihuahua Airport, challenging the visit order and the unconstitutionality of the municipal regulations applied. The court issued a ruling in favor of the Chihuahua airport, indicating that the commercial spaces of the Chihuahua airport are under federal not municipal jurisdiction. The municipal authority challenged the judgment and as of the date of the financial statements, the resolution has not been issued in that instance, so the judgment continues in force since the judgment on the merits has not caused status.
|
|
Ciudad Juárez Airport
On November 15, 1995, parties purporting to be former owners of land comprising a portion of the Ciudad Juárez airport initiated legal proceedings against the Aeropuerto de Ciudad Juárez, S.A. de C.V. (“Ciudad Juárez Airport”) to reclaim the land (240 hectares), alleging that it was improperly transferred to the Mexican government. As an alternative to recovery of this land, the claimants also sought monetary damages of U.S.$120.0 million.
Within the trial, the Company challenged the claims of the claimant based on the legitimacy of the possession derived from the Concession Agreement granted by the Ministry of Communications and Transportation.
The Ministry of Communications and Transportation was called to trial in defense of the interests of the Mexican government.
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On July 8, 2016, the local court in Ciudad Juárez ruled that the claims against the Ciudad Juárez airport are inadmissible, and on October 21, 2017, the claimants filed an appeal before the Appellate Court in Chihuahua against the court’s determination. On July 31, 2017, the First Civil Court overturned the lower court’s decision and ruled in favor of the plaintiffs, requiring the Mexican government to pay restitution to the plaintiffs for their loss of property and in accordance with the lawsuit.
The Mexican government filed a direct claim to appeal the decision, and on May 3, 2018, a favorable decision was issued, revoking the appealed decision, pursuant to which the claimant must return the title and payments claimed. The decision of the amparo trial was also favorable to the Ciudad Juárez airport as co-defendant.
On May 25, 2018, the First Civil Chamber in Chihuahua issued, in compliance with the execution of the amparo decision, a new decision absolving the defendants of the payments claimed.
This decision was appealed by the claimant in a direct amparo trial, requesting the Supreme Court of Justice of the Nation (“SCJN”) to resolve the matter definitively by exercising its authority to assert jurisdiction. However, the SCJN resolved not to exercise the power of attraction to hear the matter and ordered the return to the Collegiate Court for the resolution of the amparo trial.
On January 2, 2020, the First Collegiate Circuit Court in Chihuahua issued the judgment in the amparo trial promoted by the plaintiff and denied the amparo requested by the plaintiff. Against the sentence, the plaintiff filed the appeal for review and the Collegiate Court ordered the file to be forwarded to the SCJN for resolution of the appeal. The review sentence is pending.
As of the date of the consolidated financial statements, the contingencies are maintained due to the fact that there is still no decision to resolve the trial. However, in the event that the judgment is not favorable to the Ciudad Juarez Airport, the economic impact of the trial will be borne by the Mexican government, as established in the concession title. The Ciudad Juárez Airport has not recorded any provision in connection to these claims given that it does not expect an economic impact, even in case of an unfavorable resolution.
Durango Airport
On March 5, 2020, the Company was notified of the lawsuit filed against Aeropuerto de Durango, S.A. de C.V. ("(“Aeropuerto de Durango"Durango“), the Ministry of Infrastructure, Communications and Transportation, the Government of the State of Durango and the Ministry of Agrarian, Territorial and Urban Development. The plaintiff sued for the nullity of the expropriation decree dated September 8, 1975, which affected an area of 40 hectares of the Durango Airport and claims the payment of compensation for the affected area, as well as the payment of damages for the undue use of the property.
The trial hearing was held with the appearance of the parties and the evidentiary stage of the trial is pending. As of the date of the financial statements, the contingency is still in effect because the trial is still pending the judgment on the merits of the case. In the event that the resolution of the lawsuit is not favorable to Durango Airport, it is considered that the economic impact of the lawsuit will be borne by the Federal Government, as established in the concession title. Durango Airport has not recorded any provision in connection with this lawsuit.
Reynosa Airport
On October 16, 2020, the Company was notified of the lawsuit filed against the AFAC, in which Aeropuerto de Reynosa, S.A. de C.V. ("(“Aeropuerto de Reynosa"Reynosa“) was called as Interested Third Party. The nullity of the administrative resolution dated February 7, 2020, issued by the AFAC in the Appeal for Review filed by the plaintiff isplaintiff’s demanded in order for the AFAC to study the plaintiff'splaintiff’s petition and
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recognize that the legal requirements for the reversion of the expropriation of 2.6 hectares included in the expropriation decrees of 1970 and 1971 have been met.
Reynosa Airport appeared in the lawsuit and is awaiting the continuationconclusion of the procedural stages is pending.pleadings stage of the proceeding. The lawsuit does not include a financial claim; however, the contingency is maintained until the final judgment in the
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annulment lawsuit is issued and the challenged resolution is confirmed or, if applicable, a judgment is issued, the effects of which must be complied with by the AFAC.
Aeropuerto de Torreón
Lawsuit filed before the Agrarian Court in Torreon by Ejido Ignacio Allende against SICT and Aeropuertos y Servicios Auxiliares (“ASA”). GACN was named as a subsidiary defendant, and Aeropuerto de Torreón, S.A. de C.V. (“Torreón Airport”) was later called to trial as a defendant.
The restitution of 3.08 hectares as property of the Ejido Ignacio Allende is claimed on the grounds that the surface is not included in the expropriation decree in favor of the company Líneas Aéreas Mexicanas, S.A. for the construction of the airfield currently occupied by the Torreón Airport. Likewise, the claimants request the payment of the amount resulting from the use of the land by the defendants, and in case there is any material impossibility to obtain the restitution of the aforementioned surface, the claimants request that the defendants pay for the value of the land, prior commercial appraisal.
The Torreón Airport was notified on August 31, 2022 of a judgement favorable to the plaintiff, resolving that since there is a legal and material impediment to carry out the return of the land due to the existence of a cause of public utility because it is a general communication road, the court ordered the substituted indemnification payment for the commercial value of the disputed lands to be quantified in, considering the historical value that the disputed land since of October 16, 2001, date in which the concession was granted to the Torreon Airport.
Once the amount of the indemnity payment for the land is quantified, the defendants SICT and Torreon Airport must pay such indemnity in favor of the plaintiff.
The judgment absolves ASA and GACN of the claim because their occupation of the area in dispute has not been accredited.
The Torreon Airport and the SICT both filed an appeal against the ruling on September 12, 2022, and such appeal is pending to be resolved.
In the event that the resolution of the lawsuit is not favorable to Torreón Airport, it is considered that the economic impact of the lawsuit should be borne by the Federal Government. Torreon Airport has not recorded any provision in connection with this lawsuit.
| Conflict related to the purchase-sale of land |
Monterrey Airport
On May 14, 2015, Banco Mercantil del Norte, S.A. (Banorte)(“Banorte”), acting as trustee of a certain trust, filed a civil lawsuit against Aeropuerto dethe Monterrey S.A. de C.V. (“Monterrey Airport”)Airport in relation toconnection with the ownership of 240 hectares of land previously acquired (the “Land”) by the Monterrey Airport, and whosewhich book value in our financial statements as of December 31, 2020 amounts2022, amounted to Ps. 266,850.
Due to
By means of the lawsuit, Banorte filed the plaintiff exercised the plenaryan action forto recover possession and claimed fromrequested a declaratory judgment saying that Banorte has a better right than the Monterrey Airport to possess the legal non-existence ofLand and that the sale documents, includingLand should be restituted to Banorte, and that the deed of sale of the property, the possession of the property allegedly owned by him,Monterrey Airport should pay costs and the legal and material restitution of the claimed surface, with the improvements and rights that exist.
expenses. Monterrey Airport appeared at theon trial and asked to callrequested that the company DIAV, S.A. de C.V., (“DIAV”) appear as a defendant in its capacity as seller of the property in conflict. In the eventual affectation that the sentence could cause, DIAV, S.A. de C.V. appeared in court.
Land. On August 8, 2018, a final judgmentthe court found that the plaintiff’s claims were inadmissible due to lack of evidence (the “First Instance Judgment”), and the plaintiff appealed the decision.
The Second Chamber of the trial was issued in which it was determined thatSuperior Court of Justice of the plaintiff did not prove his actionState of Nuevo Leon heard the appeals against the First Instance Judgment and the claimed benefits were declared inadmissible. The plaintiff challenged this judgment by means of an appeal in both effects, likewise, the airport challenged the sentence, considering that the ruling incorrectly determined the lack of passive legitimacy of DIAV, S.A. de C.V.
Onon July 25, 2019, issued a second instance judgment (“First Second Instance Judgment”) against
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the judgment was issued withinMonterrey airport, finding that Banorte had a better right to possess the appealLand, and the ruling was unfavorable for Monterrey Airport, in the first instance the sentence was revoked andordering the Monterrey Airport was ordered to payreturn the benefits claimed.Land to Banorte.
Both Monterrey Airport and DIAV filed injunctions (amparo) against the First Second Instance Judgment in August 2019, which were referred to the Second Collegiate Court in Civil Matters of the Fourth Circuit (the “Collegiate Court”). On August 21, 2019,6, 2021, the Collegiate Court granted the amparo relief to the Monterrey Airport leaving without effect the First Second Instance Judgment and ordering a new one that considered, among other matters, that the evidence provided by Banorte was insufficient to prove its claims. In compliance with the amparo ruling, on August 25, 2021, the Eighth Civil Chamber vacated the First Second Instance Judgment. On September 13, 2021, the Eighth Civil Chamber issued a new second instance judgment (the “Second Instance Judgment”) by virtue of which it confirmed the First Instance Judgment, releasing the Monterrey Airport of all claims.
Dissatisfied with the Second Instance Judgments, all the parties to the litigation filed a direct application for amparo againstreliefs (including the judgment, which was admitted for processing and is pending resolution by a Collegiate Circuit Court. In that amparo trial,Monterrey Airport with respect to, among other issues, the executionrefusal of the claimed sentence was suspended.
The amount sought byEighth Civil Court to grant the plaintiff is not quantified in the claim; however, it is maintained until the judgmentpayment of the amparo issuedlegal fees and expenses claimed by the Monterrey Airport againstAirport), which were referred to the second instance judgment is definitivelysame Collegiate Court and are currently pending to be resolved. In
We believe that in the event thatof a resolution adverse to the resolution of the amparo judgment is not favorable for the Monterrey Airport, the economic repercussion must be borne byairport’s interests, DIAV as the seller of the land (DIAV, S. A. de C.V.),Land should be liable for which reasonany economic losses resulting thereof; nonetheless, we cannot predict whether we may prevail in a legal action against DIAV. Although Monterrey Airport cannot definitively foresee the Monterrey Airportoutcome of this litigation, to date it has not recorded any provision in relation to with this claim.the contingency, since it considers its position in the litigation to be solid.
IV. |
|
Acapulco Airport
On February 5, 2020,November 1, 2022, the MinistryRegulation and Inspection Department of FinanceRegulations and Shows of the Statemunicipality of GuerreroAcapulco notified a tax credit againstthe tenants located in the ambulatory and the Aeropuerto de Acapulco, S.A. de C.V. (Aeropuerto(“Acapulco Airport”) of the requirement for a commercial operation license.
The Acapulco Airport and the tenants filed amparo suits against the notification, challenging the unconstitutionality of the authority’s actions, since they were carried out in an area where the Federation exercises jurisdiction; the suits were admitted for processing and a definitive suspension was granted so that the municipal authority would not carry out acts of closure in the leased spaces until the amparo suits were resolved.
In relation to these lawsuits, there are favorable precedents obtained in lawsuits previously filed by other airports of the group in the same matter, in which it has been reiterated that the municipal authority lacks jurisdiction to require municipal licenses within the federal zone comprising the airports; therefore, it is considered that favorable results will be obtained in these lawsuits, although it is not possible to foresee with certainty the manner in which the Collegiate Courts in charge of the study of the appeals will resolve the appeals for review.
V. | Tax on Assets |
Pursuant to the provisions of the Third Transitory Article of the Single Rate Business Tax Law, Aeropuerto de Acapulco)Monterrey, S.A. de C.V. (the “Airport”) on December 20, 2019, and December 16, 2020, respectively, requested a refund of the tax on asset it had paid in prior years.
With respect to the 2018 and 2019 fiscal years the Airport requested the refund of the amounts of Ps.10,220 and Ps.10,624, respectively, which were denied by the tax authority.
On September 16, 2020, the Airport challenged the denial of the refund requested with respect to the 2018 fiscal year, which was resolved in favor of the Airport’s interests by the Federal Court of Administrative Justice.
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On April 27, 2021, the Airport challenged the denial of the refund requested with respect to fiscal year 2019, which was also resolved favorably to the Airport’s interests by the Federal Court of Administrative Justice.
Currently, both lawsuits are pending final resolution since on June 30 and December 1, 2021, respectively, the tax authority filed appeals for review against the favorable resolutions issued by the Federal Court of Administrative Justice.
Aeropuerto de Monterrey, S.A. de C.V. maintains an asset in the amount of Ps.24,813Ps. 28,619, in relation to amounts paid for omitted ISR contributionstax on asset and VAT paymentscorresponding to refunds for fiscal years 2018, 2019 and 2020. Since the period from January 1, 2015 to December 31, 2015.
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The credit was challenged through the Recurso de Revocación (the “Recurso”) and on July 23, 2020 theAirport estimates that an unfavorable resolution was issued declaring the nullity of the tax credit and ordering the authority to reinstate the procedure since the tax credit was determined within a procedure flawed from its origin. Acapulco Airport filed a nullity action against the resolution to the “Recurso” sinceis unlikely, it would allow the authority to correct the deficiencies of the procedure, without respecting the requirements and terms of the tax audit procedure.
The nullity lawsuit was admitted for processing and the authority appeared in the trial, the development of the procedural stages of the trial will continue. The Acapulco Airport has not recorded aany provision in relation to this claim.the recoverable amount of asset tax.
a. | Significant accounting policies |
a. Significant accounting policies
The Company is exposed to risks that are managed through the implementation of systems and processes related to identification, measurement, limitation of concentration, and supervision.
The basic principles defined by the Company in the establishment of its risk management policy are the following:
● | Compliance with Corporate Governance Standards. |
● | Establishment, by each different business line and subsidiary, of risk management controls necessary to ensure that market transactions are conducted in accordance with the policies, rules, and procedures of the Company. |
● | Special attention to financial risk management, basically composed by interest rate, exchange rate, liquidity and credit risks. |
Risk management in the Company is mainly preventive and oriented to medium and long-term, risks taking into consideration the most probable scenarios of the variables affecting each risk.
The details of the significant accounting policies and adopted methods (including recognition, valuation and basis of recognition of related income and expenses) for each class of financial asset, financial liability and equity instrument is disclosed in note 4.
b. | Categories of financial instruments and risk management policies |
b. Categories of financial instruments and risk management policies
The principal categories of financial instruments, are:
| | | | | | | | | | | | | | | | | | | | | ||
| | | | December 31, | | | | December 31, | ||||||||||||||
Financial assets |
| Risk classification |
| 2020 |
| 2019 |
| 2018 |
| Risk classification |
| 2022 |
| 2021 |
| 2020 | ||||||
Cash and cash equivalents and other investments held to maturity |
| Credit and interest rate | | Ps. | 2,948,804 | | Ps. | 3,429,873 | | Ps. | 2,978,559 |
| Credit and interest rate | | Ps. | 3,336,420 | | Ps. | 5,987,164 | | Ps. | 2,958,804 |
Receivables, net |
| Credit and exchange rate | |
| 833,643 | |
| 757,756 | |
| 696,566 |
| Credit and exchange rate | |
| 1,266,110 | |
| 1,085,670 | |
| 833,643 |
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| | | | | | | | | | | |
| | | | December 31, | |||||||
Financial liabilities |
| Risk classification |
| 2022 |
| 2021 |
| 2020 | |||
Short-term and long-term debt |
| Interest rate, exchange rate and liquidity |
| Ps. | 10,184,336 |
| Ps. | 7,696,622 |
| Ps. | 4,513,503 |
Trade accounts payable(1) |
| Liquidity | | Ps. | 326,290 | | Ps. | 213,207 | | Ps. | 204,048 |
Accrued interest |
| Liquidity | | Ps. | 147,115 | | Ps. | 73,489 | | Ps. | 44,295 |
Short-term and long-term financial leasing | | Liquidity | | Ps. | 208,205 | | Ps. | 224,736 | | Ps. | 194,763 |
Accounts payable to related parties |
| Liquidity | | Ps. | 286,479 | | Ps. | 269,249 | | Ps. | 167,704 |
| | | | | | | | | | | |
| | | | December 31, | |||||||
Financial liabilities |
| Risk classification |
| 2020 |
| 2019 |
| 2018 | |||
Short-term and long-term debt |
| Interest rate, exchange rate and liquidity | | Ps. | 4,513,503 | | Ps. | 4,549,575 | | Ps. | 4,593,223 |
Trade accounts payable(1) |
| Liquidity | |
| 204,048 | |
| 196,791 | |
| 203,999 |
Accrued interest |
| Liquidity | |
| 44,295 | |
| 42,438 | |
| 40,227 |
Short-term and long-term financial leasing | | Liquidity | | | 194,763 | | | 220,860 | | | 28,806 |
Accounts payable to related parties |
| Liquidity | |
| 167,704 | |
| 187,515 | |
| 226,202 |
(1) | Include the payments of employee statutory profit-sharing amounts, which were Ps. |
F-51
Based on the nature of its activities, the Company is exposed to different financial risks, mainly as a result of its ordinary business activities and its debt contracts entered into to finance its operating activities. The Company’s corporate treasury department provides services to the operating units to coordinate the entry into domestic and international markets and monitors and manages the financial risks relating to the operations of the Company. These risks include market risk (interest rate risk and foreign currency risk), credit risk and liquidity risk.
Periodically, the Company’s management assesses risk exposure and reviews the alternatives for managing those risks, supervising and managing the financial risks through internal risk reports which analyze exposures by degree and magnitude of risks. The Board of Directors sets and monitors policies and procedures to measure and manage the risks to which the Company is exposed, which are described below.
c. | Market risk |
c. Market risk
Interest rate risk management — This risk principally stems from changes in the future cash flows of debt entered into at variable interest rates (or with short-term maturity and presumable renewal) as a result of fluctuations in the market interest rates. The purpose of managing this risk is to lessen the impact in the cost of the debt due to fluctuations in such interest rates.
As of December 31, 2022, 2021 and 2020, and 2019, the Company had an approximate Ps. 4,513,503 and Ps. 4,594,575, respectively,percentage in outstanding long-term debt of which 99% had aat fixed interest rate and 1.0% a variable interest rate. As of December 31, 2018, the Company had an approximate Ps. 4,593,223 in outstanding long-term debt, of which 98% had a fixed interest rate and 2.0% a variable interest rate.rates, is as follows:
| | | | | | | | | | | | |
| | December 31, |
| |||||||||
|
| 2022 | |
| 2021 | |
| 2020 | | |||
Long-term debt | | Ps. | 9,000,000 | |
| Ps. | 5,000,000 | |
| Ps. | 4,513,503 | |
% Fixed rate debt | | | 70 | % | | | 80 | % | | | 99.7 | % |
% Variable rate debt (1) | | | 30 | % | | | 20 | % | | | 0.3 | % |
(1) | Long-term debt contracted during 2022 and 2021 has a 28-day TIIE reference rate. Long-term debt contracted as of December 31, 2020, had a three-month London Interbank Offered Rate or “LIBOR” reference rate; such debt was repaid during 2021. |
The contracted credit linesproportion of long-term debt have interest payments at a variable rate, which exposes the Company to interest rate risk as a result of fluctuations in market interest rates. The risk exposure is mainly caused by the variations that could occur in in the three-month LIBOR rate.reference interest rate used.
The Company manages this risk by monitoring constantly the changes of such interest rates. In recent years, the three-month LIBOR28-day TIIE has decreased.increased. The three-month LIBOR28-day TIIE was at its highest level on January 2, 2020 (1.91%December 29, 2022 (10.762%) and its lowest level on December 9, 2020 (0.22%January 3, 2022 (5.715%). Therefore, if interest rates increase significantly, the Company has not enteredcould evaluate to enter into hedging instruments to hedgemitigate the risk of a rise in such interest rates. In the future, if the behavior of the referenced rates established in its debt instruments changes and trends upward, the Company may decide to enter into hedging instruments.rate risk.
Due to the Interest Rate Benchmark Reform, the Company has closely monitored the market and the output of various industry working groups managing the transition to the new benchmark interest rate. This includes announcements made by the IBOR regulators. The regulators have made it clear that, at the end of 2021, it will no longer seek to persuade, or compel, banks to submit to IBORs.
F-58
For variable rate debt, the Company determined that modifications will not be necessary as the debt expires in 2021.
Sensitivity analysis for interest rates — The following sensitivity analysis is based on the assumption of an unfavorable movement of basis points in interest rates, in the indicated amounts applicable to each category of floating rate financial liabilities. The Company determines its sensitivity by applying the hypothetical interest rate (reference rate increased at the rate specified plus surcharge) for each category of financial liabilities accruing interest at a variable rate.
As of December 31, 2020, 20192022 and 2018,2021, the Company maintained long-term debt, including the current portion, which accrue interest at a variable rate of Ps. 13,503, Ps. 49,5752,700,000 and Ps. 93,223,Ps.1,000,000, respectively (see notes 14 and(note 15, which disclose the outstanding balances and interest rates of the Company’s financial instruments). A hypothetical, instantaneous and unfavorable 10% change in the three-month LIBOR28-day TIIE interest rate applicable to the outstanding debt with variable rates would have resulted in an additional financing expense of approximately Ps. 40, Ps.17912,126 and Ps.260Ps.3,736 for 2020, 20192022 and 2018,2021, respectively. The increase was calculated for U.S. dollar debt based on the year-end exchange rate of each year (Ps.19.9087, Ps. 18.8727, and Ps. 19.6566 for 2020, 2019 and 2018, respectively).
Exchange risk management – The Company performs transactions denominated in foreign currency; consequently, it is exposed to exchange rate risks, which are managed within the parameters of established and approved policies. The main risk related to the exchange rate involves changes in the value of the Mexican peso against the U.S. dollar.
F-52
Historically, a portion of the revenues generated by the Company’s airports (mainly derived from TUA charged to international passengers) are linked to U.S. dollars, although such revenues are collected in pesos based on the average exchange rate of the previous month. Of the Company’s consolidated revenues (excluding construction services revenues), 13.20%14.81%, 15.95%16.87% and 15.69%13.20% were from TUA of international passengers in 2020, 20192022, 2021 and 2018,2020, respectively. Substantially all other revenues of the Company are denominated in pesos. Based on an appreciation of 10% of the peso against the U.S. dollar, the Company believes that its revenues would have decreased by Ps.137,548, Ps.116,929 and Ps.54,293 Ps.120,798in 2022, 2021 and Ps.106,179 in 2020, 2019 and 2018, respectively.
An appreciation of the Mexican peso against the U.S. dollar would reduce the U.S. dollar-denominated revenues and the Company’s obligations under U.S. dollar-denominated debt when expressed in pesos, whereas a depreciation of the peso against the U.S. dollar would increase the Company’s U.S. dollar-denominated revenues and obligations under debt agreements when expressed in pesos.
For the year ended December 31, 2020,2022, the peso depreciatedappreciated against the U.S. dollar by 5.5%4.86%, relative to the exchange rates prevailing at the end of 2019.2021.
Foreign currency sensitivity analysis – The following sensitivity analyses are based on an instantaneous and unfavorable change in exchange rates which affect the foreign currencies in which the Company’s debt is expressed. These sensitivity analyses cover all the assets and liabilities denominated in foreign currency. Sensitivity is determined by applying a hypothetical exchange rate change to those items, including the outstanding debt expressed in foreign currency.
As of December 31, 2020, 20192022, 2021 and 2018,2020, a hypothetical, instantaneous and unfavorable change of 10% in the exchange rate of the peso against the U.S. dollar, applicable in the Company’s (liability) asset (liability) positions net of U.S.$ 77,094,(903), U.S.$69,14917,459 and U.S.$53,94475,718 (amounts in thousands) would have resulted in an estimated exchange loss (gain) loss of approximately Ps.1758, Ps. (35,734) and Ps. (150,745), Ps.(130,503) and Ps.(106,035) as of December 31, 2020, 20192022, 2021 and 2018,2020, respectively.
F-59
The carrying values of monetary assets and liabilities denominated in foreign currencies at the end of the reporting period are as follows (amounts in thousands):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Liabilities | | Assets | | Liabilities | | Assets | ||||||||||||||||||||||||||||
| | December 31, | | December 31, | | December 31, | | December 31, | ||||||||||||||||||||||||||||
Currency |
| 2020 | | 2019 | | 2018 |
| 2020 | | 2019 | | 2018 |
| 2022 | | 2021 | | 2020 |
| 2022 | | 2021 | | 2020 | ||||||||||||
U.S. dollars |
| U.S.$ | (4,095) |
| U.S.$ | (10,059) |
| U.S.$ | (13,185) |
| U.S.$ | 81,189 |
| U.S.$ | 79,208 |
| U.S.$ | 67,129 |
| U.S.$ | (6,472) | | U.S.$ | (4,784) |
| U.S.$ | (4,095) |
| U.S.$ | 5,569 |
| U.S.$ | 22,243 |
| U.S.$ | 79,813 |
The transactions in thousands of U.S. dollars for the years ended December 31, 2020, 20192022, 2021 and 2018,2020, are as follows:
| | | | | | | | | | | | | | | | | | |
| | December 31, | | December 31, | ||||||||||||||
|
| 2020 | | 2019 | | 2018 |
| 2022 | | 2021 | | 2020 | ||||||
Technical assistance |
| U.S.$ | 3,766 |
| U.S.$ | 7,954 |
| U.S.$ | 8,781 |
| U.S.$ | 3,766 |
| U.S.$ | 3,766 |
| U.S.$ | 3,766 |
Insurance |
| | 1,039 |
| | 935 |
| | 2,227 |
| | 1,150 |
| | 1,392 |
| | 1,039 |
Purchase of machinery and maintenance |
| | 7,065 |
| | 7,685 |
| | 9,527 |
| | 18,890 |
| | 5,071 |
| | 7,065 |
Software |
| | 2,152 |
| | 443 |
| | 437 |
| | 909 |
| | 251 |
| | 2,152 |
Professional services, fees and subscriptions |
| | 1,786 |
| | 702 |
| | 2,147 |
| | 3,991 |
| | 1,531 |
| | 1,786 |
Construction of industrial warehouse | | | 50,767 | | | — | | | — | |||||||||
Other |
| | 4,765 |
| | 4,303 |
| | 8,043 |
| | 11,981 |
| | 15,554 |
| | 4,765 |
Pertinent exchange rate information at the date of the consolidated statements of financial position is as follows:
| | | | | | | | | | | | | | | | | | |
| | December 31, | | December 31, | ||||||||||||||
|
| 2020 | | 2019 | | 2018 |
| 2022 | | 2021 | | 2020 | ||||||
U.S. dollar exchange rate |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
As reported by the Mexican Central Bank |
| Ps. | 19.9087 |
| Ps. | 18.8727 |
| Ps. | 19.6566 |
| Ps. | 19.4715 |
| Ps. | 20.4672 |
| Ps. | 19.9087 |
F-53
As of March 24, 2021,30, 2023, the exchange rate as reported by the Mexican Central Bank was Ps. 20.5788.18.1052.
d. | Credit risk |
d. Credit risk
Credit risk management — Credit risk refers to the risk whereby one of the partiesparties’ defaults on its contractual obligations, thereby generating a financial loss for the Company. The objective of this risk management is to reduce its impact by reviewing the solvency of the Company’s potential customers. The creditworthiness of uncollected amounts is periodically evaluated estimates of recoverable amounts are reviewed, resulting in reserves for those amounts whose recovery is considered doubtful, with corresponding entries to the statements of income and other comprehensive income in the period of review. The credit risk has historically been very limited.
The Company’s maximum credit risk exposure is presented in the amounts included in the table in subsection b) as well as within the past due but not impaired analysis of accounts receivable, included in note 7. The Company holds bonds and deposits that mitigate the credit risk, being the most relevant the guarantee deposits registered as a liability in the consolidated statements of financial position.
The Company adopted a policy to only carry out transactions with solvent parties and obtain sufficient collateral where appropriate as a means of mitigating the risk of financial loss due to possible default. The Company trades only with entities that have the best possible risk rating. The credit exposure is reviewed and approved by senior management committees of the Company. The credit risk on cash and cash equivalents is limited because the counterparties are banks with high credit ratings assigned by credit rating agencies. Financial instruments that potentially expose the Company to credit risk consist mainly of accounts receivable.
F-60
The customerscustomer’s balance is primarily comprised of TUA collected by airlines for each passenger traveling using air terminals and subsequently delivered to the Company. The Company has established three credit options: up to 60 days. These days are granted depending on the guarantee that the customer can provide. In case of default, customers will be subject to penalty interests and/or a legal collection process. For both credit customers and cash customers, there are established guarantees, which may include the following: trust, deposit, letter of credit, liquid credit, mortgage and collateral.
As of December 31, 2020, 20192022, 2021 and 2018,2020, the allowance for doubtful accounts, principally related with accounts receivable, are the amounts described in note 7.
e. | Liquidity risk |
e. Liquidity risk
Management of liquidity risk – This risk is generated by temporary differences between the funding required by the Company to fulfill business investment commitments, debt maturities, current asset requirements, etc., and the origin of funds generated by the regular activities of the Company and different types of bank financing. Also, different economic or industry factors, such as financial crises or suspension of operations of any airline could affect the cash flow of the Company. The objective of the Company in the management of this risk is to maintain a balance between the flexibility, period and conditions of credit facilities contracted to manage short, medium and long-term funding requirements. In this regard, the Company’s use of project financing and debt with limited resources described in note 1415 and the short-term financing for working capital of current assets are significant. The Executive Committee of the Company is ultimately responsible for liquidity management.
This Committee has established an appropriate framework for liquidity management guidelines. The Company manages its liquidity risk by maintaining reserves, adequate financial facilities and adequate loans, while constantly monitoring projected and actual cash flows and reconciling the maturity profiles of financial assets and liabilities. Additionally, as mentioned in note 14, the Company has availableuncommitted lines of credit linesavailable for working capital.
F-54
The following table shows the remaining contractual maturities of the Company’s financial liabilities with agreed repayment periods. This table has been prepared based on the projected non-discounted cash flows of financial liabilities at the date on which the Company will make payments. The table includes projected interest cash flows and capital repayments of financial debt included in the consolidated statement of financial position. To the extent that interest is accrued at variable rates, the non-discounted amount is derived from interest rate curves at the end of the reporting period. Contractual maturity is based on the earliest date when the Company must make the respective payment.
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
|
| | |
| | |
| | |
| 2028 and |
| | |
| | |
| | |
| | |
| | | |
As of December 31, 2020 | | 2021 | | 2022-2024 | | 2025-2027 | | subsequently | | Total | |||||||||||||||||
As of December 31, 2022 | | 2023 | | 2024-2026 | | 2027-2029 | | Total | |||||||||||||||||||
Long-term debt | | Ps. | 3,013,502 | | Ps. | 1,500,001 | | Ps. | — | | Ps. | — | | Ps. | 4,513,503 | | Ps. | 1,500,000 | | Ps. | 1,000,000 | | Ps. | 6,500,000 | | Ps. | 9,000,000 |
Interest(1) |
| | 188,641 |
| | 118,077 |
| | — |
| | — |
| | 306,718 |
| | 804,897 |
| | 1,880,865 |
| | 770,175 |
| | 3,455,937 |
Trade accounts payable |
| | 204,048 |
| | — |
| | — |
| | — |
| | 204,048 |
| | 332,287 |
| | — |
| | — |
| | 332,287 |
Interest Payable | | | 44,295 | | | — | | | — | | | — | | | 44,295 | | | 147,115 | | | — | | | — | | | 147,115 |
Lease Liabilities |
| | 26,553 |
| | 168,210 |
| | — |
| | — |
| | 194,763 |
| | 33,446 |
| | 174,759 |
| | — |
| | 208,205 |
Accounts payable with related parties |
| | 167,704 |
| | — |
| | — |
| | — |
| | 167,704 |
| | 286,479 |
| | — |
| | — |
| | 286,479 |
Total |
| Ps. | 3,644,743 |
| Ps. | 1,786,288 |
| Ps. | — |
| Ps. | — |
| Ps. | 5,431,031 |
| Ps. | 3,104,224 |
| Ps. | 3,055,624 |
| Ps. | 7,270,175 |
| Ps. | 13,430,023 |
| | | | | | | | | | | | |
|
| | |
| | |
| | |
| |
|
As of December 31, 2021 |
| 2022 |
| 2023-2025 |
| 2026-2028 |
| Total | ||||
Long-term debt | | Ps. | — | | Ps. | 1,500,000 | | Ps. | 3,500,000 | | Ps. | 5,000,000 |
Interest(2) |
| | 368,995 |
| | 863,034 |
| | 472,801 |
| | 1,704,830 |
Trade accounts payable |
| | 213,207 |
| | — |
| | — |
| | 213,207 |
Interest Payable | | | 73,489 | | | — | | | — | | | 73,489 |
Lease Liabilities |
| | 29,332 |
| | 195,404 |
| | — |
| | 224,736 |
Accounts payable with related parties |
| | 269,249 |
| | — |
| | — |
| | 269,249 |
Total |
| Ps. | 954,272 |
| Ps. | 2,558,438 |
| Ps. | 3,972,801 |
| Ps. | 7,485,511 |
F-61
| | | | | | | | | | | | |
|
| | |
| | |
| | |
| |
|
As of December 31, 2020 |
| 2021 |
| 2022-2024 |
| 2025-2027 |
| Total | ||||
Long-term debt |
| Ps. | 3,013,502 | | Ps. | 1,500,001 | | Ps. | — | | Ps. | 4,513,503 |
Interest(2) |
| | 188,641 |
| | 118,077 |
| | — |
| | 306,718 |
Trade accounts payable |
| | 204,048 |
| | — |
| | — |
| | 204,048 |
Interest Payable |
| | 44,295 | | | — | | | — |
| | 44,295 |
Lease Liabilities | | | 26,553 |
| | 168,210 |
| | — | | | 194,763 |
Accounts payable with related parties |
| | 167,704 |
| | — |
| | — |
| | 167,704 |
Total |
| Ps. | 3,644,743 |
| Ps. | 1,786,288 |
| Ps. | — |
| Ps. | 5,431,031 |
| | | | | | | | | | | | | | | |
|
| | |
| | |
| | |
| 2027 and |
| |
| |
As of December 31, 2019 |
| 2020 |
| 2021-2023 |
| 2024-2026 |
| subsequently |
| Total | |||||
Long-term debt | | Ps. | 36,851 | | Ps. | 4,512,724 | | Ps. | — | | Ps. | — | | Ps. | 4,549,575 |
Interest(1) |
| | 308,630 |
| | 306,760 |
| | — |
| | — |
| | 615,390 |
Trade accounts payable |
| | 256,228 |
| | — |
| | — |
| | — |
| | 256,228 |
Interest Payable | | | 42,438 | | | — | | | — | | | — | | | 42,438 |
Lease Liabilities |
| | 72,320 |
| | 73,975 |
| | 46,893 |
| | 27,672 |
| | 220,860 |
Accounts payable with related parties |
| | 187,515 |
| | — |
| | — |
| | — |
| | 187,515 |
Total |
| Ps. | 903,982 |
| Ps. | 4,893,459 |
| Ps. | 46,893 |
| Ps. | 27,672 |
| Ps. | 5,872,006 |
| | | | | | | | | | | | | | | |
|
| | |
| | |
| | |
| 2026 and |
| |
| |
As of December 31, 2018 |
| 2019 |
| 2020-2022 |
| 2023-2025 |
| subsequently |
| Total | |||||
Long-term debt |
| Ps. | 41,425 | | Ps. | 3,051,798 | | Ps. | 1,500,000 | | Ps. | — | | Ps. | 4,593,223 |
Interest(1) |
| | 309,877 |
| | 596,259 |
| | 19,680 |
| | — |
| | 925,816 |
Trade accounts payable |
| | 208,729 |
| | — |
| | — |
| | — |
| | 208,729 |
Interest Payable |
| | 40,227 |
| | — |
| | — |
| | — |
| | 40,227 |
Accounts payable with related parties |
| | 226,202 |
| | — |
| | — |
| | — |
| | 226,202 |
Total |
| Ps. | 826,460 |
| Ps. | 3,648,057 |
| Ps. | 1,519,680 |
| Ps. | — |
| Ps. | 5,994,197 |
(1) | The projected interest is determined, in the case of obligations with a variable rate, based on TIIE. |
(2) | The projected interest is determined, in the case of obligations with a variable rate, based on LIBOR and assuming an exchange rate of Ps.19.9087 |
(3) | The time value of money effect of other financial liabilities is immaterial, so they are presented at present value. |
The amounts forming part of the debt contracted with credit institutions include fixed and variable rate instruments. Variable-rate financial liabilities are subject to change when variable interest rates differ from the estimated interest rates determined at the end of the reporting period based on their market value.
The Company expects to meet its obligations under its liabilities with its operational cash flows and resources received from the maturity of its financial assets. Additionally, the Company has access to lines of credit with certain financial institutions.
f. | Financial instruments at fair value |
f. Financial instruments at fair value
This note provides information about how the Company determines fair values of various financial assets and financial liabilities.
Except as detailed in the following table, the Company considers that the carrying amounts of financial assets and financial liabilities recognized in the consolidated financial statements approximate their fair values due to their short-term maturities.
F-55
Financial liabilities
Long-term debt (note 15)
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
December 31, 2020 | | December 31, 2019 | | December 31, 2018 | ||||||||||||||||||||||||||||
December 31, 2022 | December 31, 2022 | | December 31, 2021 | | December 31, 2020 | |||||||||||||||||||||||||||
Book value | Book value |
| Fair value |
| Book value |
| Fair value |
| Book value |
| Fair value | Book value |
| Fair value |
| Book value |
| Fair value |
| Book value |
| Fair value | ||||||||||
Ps. | 4,513,503 |
| Ps. | 4,524,746 |
| Ps. | 4,594,575 |
| Ps. | 4,517,336 |
| Ps. | 4,593,223 |
| Ps. | 4,326,267 | 9,000,000 |
| Ps. | 9,740,228 |
| Ps. | 5,000,000 |
| Ps. | 4,811,410 |
| Ps. | 4,513,503 |
| Ps. | 4,524,746 |
| | | | | | | | | | | | |
| | Hierarchy of fair value as of December 31, 2022 | ||||||||||
|
| Level 1 |
| Level 2 |
| Level 3 |
| Total | ||||
Financial liabilities: |
|
| |
|
| |
|
| |
|
| |
Long-term debt(1) |
| Ps. | 9,740,228 |
| Ps. | — | | Ps. | — |
| Ps. | 9,740,228 |
| | | | | | | | | | | | |
| | Hierarchy of fair value as of December 31, 2021 | ||||||||||
|
| Level 1 |
| Level 2 |
| Level 3 |
| Total | ||||
Financial liabilities: |
|
| |
|
| |
|
| |
|
| |
Long-term debt(1) |
| Ps. | 4,811,410 |
| Ps. | — | | Ps. | — |
| Ps. | 4,811,410 |
| | | | | | | | | | | | |
| | Hierarchy of fair value as of December 31, 2020 | ||||||||||
|
| Level 1 |
| Level 2 |
| Level 3 |
| Total | ||||
Financial liabilities: |
|
| |
|
| |
|
| |
|
| |
Long-term debt(1) |
| Ps. | 4,512,510 |
| Ps. | 12,236 |
| Ps. | — |
| Ps. | 4,524,746 |
F-62
| | | | | | | | | | | | |
| | Hierarchy of fair value as of December 31, 2019 | ||||||||||
|
| Level 1 |
| Level 2 |
| Level 3 |
| Total | ||||
Financial liabilities |
|
| |
|
| |
|
| |
|
| |
Long-term debt(1) |
| Ps. | 4,371,570 |
| Ps. | 145,766 |
| Ps. | — |
| Ps. | 4,517,336 |
| | | | | | | | | | | | | |
| | Hierarchy of fair value as of December 31, 2018 | |||||||||||
|
| Level 1 |
| Level 2 |
| Level 3 |
| Total | |||||
Financial liabilities: |
|
| |
|
| |
|
| |
|
| | |
Long-term debt(1) |
| Ps. | 4,129,695 |
| Ps. | 196,572 |
| Ps. | — |
| Ps. | 4,326,267 |
(1) | The fair values of the financial assets and financial liabilities included in the level 2 category above have been determined in accordance with generally accepted pricing models based on a discounted cash flow analysis, with the most significant inputs being the discount rate that reflects the credit risk of counterparties. The fair value of the financial liabilities included in Level 1, corresponds to stock certificates listed on the Mexican Stock |
a. | Subscribed and paid-in capital stock as of December 31, |
| | | | | |
| | December 31, 2022 and 2021 | |||
|
| Number of Shares |
| Contributed Capital | |
Fixed capital: |
|
|
|
| |
Series B Class I |
| 340,345,556 |
| Ps. | 262,447 |
Series BB Class I |
| 49,766,000 |
| | 38,375 |
Share Repurchases | | (3,942,131) | | | (3,040) |
|
| 386,169,425 |
| Ps. | 297,782 |
| | | | | |
| | December 31, 2020 | |||
|
| Number of Shares |
| Contributed Capital | |
Fixed capital: |
|
|
|
| |
Series B Class I |
| 340,345,556 |
| Ps. | 262,447 |
Series BB Class I |
| 49,766,000 |
| | 38,375 |
|
| 390,111,556 |
| Ps. | 300,822 |
F-56
| | | | | |
| | December 31, 2019 | |||
|
| Number of Shares |
| Contributed Capital | |
Fixed capital: |
|
|
|
| |
Series B Class I |
| 344,004,973 |
| Ps. | 265,269 |
Series BB Class I |
| 49,766,000 |
| | 38,375 |
Treasury Series B Class I shares |
| (2,470,158) |
| | (1,905) |
|
| 391,300,815 |
| Ps. | 301,739 |
| | | | | |
| | December 31, 2018 | |||
|
| Number of Shares |
| Contributed Capital | |
Fixed capital: |
|
|
|
| |
Series B Class I |
| 344,004,973 |
| Ps. | 265,269 |
Series BB Class I |
| 49,766,000 |
| | 38,375 |
Treasury Series B Class I shares |
| (324,507) |
| | (250) |
|
| 393,446,466 |
| Ps. | 303,394 |
b. | At the Ordinary Shareholders’ Meetings held on April 22, 2022, April 21, 2021, and July 7, 2020, |
c. | On January 7, 2022, in accordance with the resolutions adopted at the General Ordinary Stockholders’ Meeting held on December 22, 2021, the Board of Directors determined the payment of a dividend in the amount of Ps.4,370,000 to be made in a single payment at the rate of 11.201923995 pesos per share. The payment date was January 19, 2022. |
d. | In resolutions adopted at the Annual Ordinary General Shareholders’ Meeting held on April 22, 2022, it was approved: |
· | The payment of a cash dividend to stockholders of Ps. 2,300,000 in two installments: the first for Ps. 1,800,000 at 4.614064804 pesos per share, which was paid on May 24, 2022, and the second for Ps. 500,000 at 1.28168466 pesos per share, which was paid on July 25, 2022. |
· | The increase of the reserve for the repurchase of Company´s shares to Ps.1,500,000, for which the amount of Ps.471,812 was transferred from the retained earnings. Likewise, it was approved to exercise up to said amount, in the period between the date of this Meeting and the date of the Meeting that approves the results of the 2022 fiscal year. |
e. | In resolutions adopted at the Ordinary General Shareholders’ Meeting held on November 30, 2022, it was approved that the resolutions of the Ordinary General Shareholders’ Meeting held on June 11, 2021, in connection with the 49,766,000 unsubscribed and unpaid Series B Shares to be held in GACN’s treasury would apply to the financing obtained by affiliates of VINCI in connection with the purchase 29.99% of the capital stock of the Company (see Note 2), and on the understanding that they would cease to apply to the financing described in the June 11, 2021 Shareholders’ Meeting. |
f. | During 2021 and 2020, 3,942,131 and |
F-63
As of December 31, 2019, and 2018, the Company had in treasury repurchased shares in the amount of Ps. 244,201 and Ps. 34,234 such amount is represented by 2,470,158 and 324,507 Series B Class I shares.
The number of shares does not reflect unsubscribed and unpaid shares held in treasury.
h. | Pursuant to the resolutions adopted at the Annual Ordinary Stockholders’ Meeting held on April 21, 2021, the Board of Directors determined the payment of a dividend in the amount of Ps.2,000,000 to be paid in a single installment at the rate of 5.126738671 pesos per share. The payment date was December 14, 2021, upon delivery of coupon number 3. |
i. | At the Ordinary and Extraordinary General Shareholders’ |
● | It was approved to increase the reserve for the repurchase of the Company’s shares to |
● | The cancellation of 3,659,417 repurchased Series B shares for a notional value of |
● | The decrease of the fixed portion of the Company’s capital stock to |
F-57
j. |
Shareholders’ equity, except restated paid-in capital and tax-retained earnings, will be income tax on dividends by the Company to the effect upon the distribution rate. Any tax paid on such distribution may be credited against income tax for the year in which the tax on dividends and the following two years, against the tax for the year and interim payments thereof is paid. |
k. | Retained earnings include the statutory legal reserve. Under the Mexican General Corporations Law, at least 5% of the year’s net profits must be placed in a legal reserve until the reserve equals an amount representing 20% of capital stock at par value. The legal reserve may be capitalized but may not be distributed unless the Company is dissolved and must be replenished if it is reduced for any reason. As of December 31, 2022, it amounts to Ps. 59,556, and Ps.60,729 to 2021 and 2020, |
F-64
23. Accumulated other comprehensive lossincome (loss).
Accumulated other comprehensive loss income (loss)is as follows:
| | | | | | | | | | | | | | | | | | |
| | Labor obligations | | Labor obligations | ||||||||||||||
|
| Amount |
| Deferred taxes |
| Total |
| Amount |
| Deferred taxes |
| Total | ||||||
Balance as of January 1, 2018 |
| Ps. | (15,679) |
| Ps. | 4,688 |
| Ps. | (10,991) | |||||||||
Movements of the year | | | 24,173 | | | (4) |
| | 24,169 | |||||||||
Balance as of December 31, 2018 | | | 8,494 | | Ps. | 4,684 |
| Ps. | 13,178 | |||||||||
Movements of the year | | | (12,834) | | | 3,850 |
| | (8,984) | |||||||||
Balance as of December 31, 2019 | | | (4,340) | | | 8,534 |
| | 4,194 | |||||||||
Balance as of January 1, 2020 |
| Ps. | (4,340) | | Ps. | 8,534 |
| Ps. | 4,194 | |||||||||
Movements of the year | | | (13,039) | | | 3,912 |
| | (9,127) | | | (13,039) | | | 3,912 |
| | (9,127) |
Balance as of December 31, 2020 | | Ps. | (17,379) |
| Ps. | 12,446 |
| Ps. | (4,933) | | | (17,379) |
| | 12,446 |
| | (4,933) |
Movements of the year | | | 4,281 | | | (1,284) |
| | 2,997 | |||||||||
Balance as of December 31, 2021 | | | (13,098) |
| | 11,162 |
| | (1,936) | |||||||||
Movements of the year | | | 21,258 | | | (6,377) |
| | 14,881 | |||||||||
Balance as of December 31, 2022 | | Ps. | 8,160 |
| Ps. | 4,785 |
| Ps. | 12,945 |
Labor obligations generate the effect of actuarial gains or losses.
24. Related party balances and transactions
As mentioned in note 2 a), on December 7, 2022, VINCI indirectly acquired 29.99% of the shares representing the capital stock of GACN through the acquisition of 100% of the shares representing the capital stock of Servicios de Tecnología Aeroportuaria, S.A. de C.V. ("SETA") and of Aerodrome Infrastructure S.á r. l. (“Aerodrome”). ICA Tenedora, S. A. de C. V. (“ICATEN”), which was an affiliate of SETA, ceased to be a related party of the Company on December 7, 2022. As a result, balances and transactions of GACN with ICATEN and its subsidiaries are presented as balances and transactions with related parties until December 7, 2022, and balances and transactions after that date are disclosed as transactions entered into with third parties because they do not represent transactions between related parties of the Company.
a. | Advance payments for construction to related parties are as follows: |
| | | | | | | | | | | | | | | | | | |
| | December 31, | | December 31, | ||||||||||||||
| | 2020 | | 2019 | | 2018 | | 2022 | | 2021 | | 2020 | ||||||
ICA Constructora de Infraestructura, S.A. de C.V. | | Ps. | 7,964 | | Ps. | 178,977 | | Ps. | 28,363 | | Ps. | — | | Ps. | — | | Ps. | 7,964 |
ICA Constructora, S.A. de C.V. |
| | 90,204 |
| | — |
| | 6,859 |
| | — |
| | 939 |
| | 90,204 |
Autovía Golfo Centro, S.A. de C.V. (1) | | | 110,312 | | | — | | | — | |||||||||
Autovía Golfo Centro, S.A. de C. V. (3) | | | — | | | 215,772 | | | 110,312 | |||||||||
VCD Construcción y Desarrollo, S.A.P.I. de C. V. |
| | 5,729 |
| | 3,012 |
| | 3,125 |
| | 1,872 |
| | 6,787 |
| | 5,729 |
MVD 1994 Real State Construction | | | 4,436 | | | — | | | — | |||||||||
VCD Inmobiliaria y Construcción, S. A. P. I. de C.V. (2) |
| | 3,294 |
| | — |
| | — | |||||||||
|
| Ps. | 214,209 |
| Ps. | 181,989 |
| Ps. | 38,347 |
| Ps. | 9,602 |
| Ps. | 223,498 |
| Ps. | 214,209 |
F-58
b. | The accounts payable with related parties are as follows: |
| | | | | | | | | | | | | | | | | | |
| | December 31, | | December 31, | ||||||||||||||
Payable: |
| 2020 | | 2019 | | 2018 |
| 2022 | | 2021 | | 2020 | ||||||
Servicios de Tecnología Aeroportuaria, S.A. de C.V. (SETA) (1) |
| Ps. | — | | Ps. | 80,504 | | Ps. | 140,294 | |||||||||
Servicios de Tecnología Aeroportuaria, S.A. de C.V. (2) |
| Ps. | 123,905 | | Ps. | 78,939 | | Ps. | — | |||||||||
Operadora Nacional Hispana, S.A. de C.V. |
| | 5,928 | | | 2,527 | | | 6,900 |
| | 5,100 | | | 2,949 | | | 5,928 |
VCD Construcción y Desarrollo, S.A.P.I. de C.V. |
| | 5,772 | | | 5,335 | | | 5,947 |
| | 3,157 | | | 3,508 | | | 5,772 |
ICA Ingeniería S. A. de C. V.(1) |
| | 367 | | | 1,177 | | | 367 |
| | — | | | 367 | | | 367 |
Actica Sistemas, S. de R.L. de C.V.(1) |
| | 3,971 | | | 3,972 | | | 5,588 |
| | — | | | 4,026 | | | 3,971 |
Autovía Golfo Centro S.A. de C.V. | | | 16,442 | | | — | | | — | | | — | | | 30,757 | | | 16,442 |
GGA Capital, S.A.P.I. de C.V. | | | 117,845 | | | 75,950 | | | 61,250 | | | 149,695 | | | 110,495 | | | 117,845 |
ICA Constructora de Infraestructura, S.A. de C.V.(1) | | | — | | | 16,652 | | | 5,222 | |||||||||
VCD Inmobiliaria y Construcción, S.A.P.I. de C.V. (2) | | | 3,864 | | | — | | | — | |||||||||
ICA Constructora, S. A. de C. V. (1) | | | 16,564 | | | — | | | — | | | — | | | 27,419 | | | 16,564 |
Grupo ICA Constructora. S.A. de C.V. | | | 794 | | | 794 | | | — | | | — | | | — | | | 794 |
Grupo Hotelero Santa Fe, S. A. de C. V. (1) |
| | 21 | | | 604 | | | 634 | |||||||||
Controladora de Operaciones de Infraestructura, S.A. de C.V. (1) | | | — | | | 10,298 | | | — | |||||||||
Grupo Hotelero Santa Fe, S. A. de C. V. (2) |
| | 758 | | | 491 | | | 21 | |||||||||
|
| Ps. | 167,704 |
| Ps. | 187,515 |
| Ps. | 226,202 |
| Ps. | 286,479 |
| Ps. | 269,249 |
| Ps. | 167,704 |
(1) | Entity considered as related party until December 7, 2022 |
(2) | Affiliated |
The balance payable to GGA Capital, S.A.P.I. of C.V. for Ps. 117,845,149,695, Ps. 75,950110,495 and Ps.61,250Ps.117,845 corresponds to short term loans of OMA VYNMSA Aeroindustrial Park S.A. de C.V. as of December 31, 2020, 20192022, 2021 and 2018,2020, respectively. Loans generated interest at a 91-day TIIE rate plus 3.54.25 percentage points, the interest rate was 7.7430%11.7249%, 5.7150%, and 10.1412% and 11.8500%7.7430%, respectively.
F-65
c. | The principal transactions with related parties performed in the normal course of business, are as follows: |
| | | | | | | | | | | | | | | | | | |
| | Year ended December 31, | | Year ended December 31, | ||||||||||||||
|
| 2020 |
| 2019 |
| 2018 |
| 2022 |
| 2021 |
| 2020 | ||||||
Capital Expenditures: |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
Industrial warehouse |
| Ps. | 100,194 |
| Ps. | 43,599 |
| Ps. | 94,938 |
| Ps. | 52,550 |
| Ps. | 7,548 |
| Ps. | 100,194 |
Financial Leases: | | | | | | | | | | |||||||||
Building | | | 6,323 | | | 5,269 | | | | |||||||||
Expenses: |
| | |
| | |
| | |
| | |
| | |
| | |
Payments from technical assistance received |
| | 81,164 |
| | 150,108 |
| | 172,610 |
| | 177,667 |
| | 133,458 |
| | 81,164 |
Administrative services |
| | 35,450 |
| | 43,196 |
| | 69,887 |
| | 24,834 |
| | 23,420 |
| | 22,453 |
Maintenance | | | 2,705 | | | 1,887 | | | 226 | |||||||||
Interests | | | 5,365 | | | 4,507 | | | 5,037 | |||||||||
Revenues: | | | | | | | | | | |||||||||
Revenues from Leases |
| | — |
| | 72 |
| | 258 | |||||||||
Concessioned Assets |
| | |
| | |
| | | |||||||||
Improvements and Major maintenance |
| | 564,563 |
| | 553,405 |
| | 359,736 | |||||||||
Improvements to concessioned assets: |
| | |
| | |
| | | |||||||||
Terminal building |
| | 1,083,509 |
| | 961,061 |
| | 565,376 |
RemunerationCompensation to directors and officers who sit oncomprising the Board of Directors, and Executive, Audit Committee, Corporate Governance,Practices Committee, Finance, Planning and Sustainability Committees totaled Ps. 12,453, Ps.14,546were Ps.15,738, Ps.18,084, and Ps.23,950Ps.12,453 for 2020, 20192022, 2021, and 2018,2020, respectively.
Employee Benefits – Employee benefits granted to key management personnel of the Company were comprised solely of short-term benefits of Ps. 73,711 Ps.58,989149,585, Ps.78,048 and Ps.96,344Ps.73,711 in 2020, 20192022, 2021 and 2018,2020, respectively.
Technical Assistance – On December 14, 2020, a Third Amending Agreement to the Technical Assistance and Technology Transfer Agreement with SETA was signed with a term through December 31, 2021, and automatic annual renewals thereafter. The annual consideration under the amendment is the greater of U.S. $ 3,766,000 (updated annually according to the U.S. consumer price index) and 3% of the Company’s consolidated EBITDA before payment of the technical assistance fee. For purposes of this calculation, consolidated EBITDA before technical assistance considers exclusively airport concessions and companies that directly or indirectly provide employee services to airports.
In 20192022 and 20182021 the variable part of the consideration for this concept was greater than the fixed part of US$3,6613,766 (thousand) and US$3,517 (thousand). In; in 2020 no variable part was generated in excessgenerated.
F-59
Pursuant to the Company’s bylaws, SETA (as holder of the Company’s Series “BB””BB” shares) has the ability to appoint and remove the Company’s Chief Financial Officer, Chief Operating Officer and Commercial Director, the right to elect three members of the Company’s board of directors, and the right to veto certain actions requiring approval of the Company’s shareholders (including the payment of dividends and the right to appoint certain members of senior management). In the event of the termination of the technical assistance agreement, the Series “BB””BB” shares will be converted into Series “B””B” shares resulting in the termination of these rights.
If at any time after June 14, 2015, SETA were to hold less than 7.65% of the Company’s capital stock in the form of Series “BB””BB” shares, such shares must be converted into Series “B””B” shares, which would cause SETA to lose all of its special rights. So long as SETA retains at least 7.65% of the Company’s capital stock in form of Series “BB””BB” shares, all its special rights will remain in force.
As of December 31, 2022 and March 30, 2023, SETA holds 12.8%12.9% of GACNGACN’s outstanding capital stock in the form of Seriesseries “BB” shares and, additionally holds 1.9% in the form of Series “B” shares.
F-66F-60
The reportable segments are determined on the basis of which the Company internally reports its segment reporting to senior management for purposes of making operating decisions. Considering the same accounting basis described in note 4. The financial information of the holding company and its service companies have been combined and included in the “other” column.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||
| | | | | | | Construction | | Depreciation | | | | | | | | | | Investments | | | | | | | | Construction | | Depreciation | | | | | | | | | | MDP Expenditures | | Investments | |||||||||||||
| | Aeronautical | | Non-aeronautical | | services | | and | | Operating | | Assets per | | Liabilities per | | Capital | | in airport | | Aeronautical | | Non-aeronautical | | services | | and | | Operating | | Assets per | | Liabilities per | | and other Capital | | in airport | ||||||||||||||||||
December 31, 2020 |
| revenues |
| revenues |
| revenues |
| amortization |
| income |
| segment |
| segment |
| investments |
| concessions | ||||||||||||||||||||||||||||||||||||
December 31, 2022 |
| revenues |
| revenues |
| revenues |
| amortization |
| Income |
| segment |
| segment |
| Expenditures |
| concessions | ||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||
Metropolitan | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||
Monterrey |
| Ps. | 1,278,255 |
| Ps. | 479,322 |
| Ps. | 802,470 |
| Ps. | 122,507 |
| Ps. | 445,952 |
| Ps. | 6,479,365 |
| Ps. | 1,367,347 |
| Ps. | 823,103 |
| Ps. | 3,870,329 |
| Ps. | 3,142,454 |
| Ps. | 699,779 |
| Ps. | 1,414,207 |
| Ps. | 168,595 |
| Ps. | 1,337,766 |
| Ps. | 10,064,910 |
| Ps. | 2,917,998 |
| Ps. | 1,461,476 |
| Ps. | 5,922,640 |
Tourist |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
Acapulco |
| | 117,218 |
| | 27,159 | |
| 29,409 | |
| 44,780 | |
| 21,587 | |
| 1,414,504 | |
| 449,606 | |
| 29,561 | |
| 1,257,321 |
| | 275,301 |
| | 38,444 | |
| 76,474 | |
| 46,760 | |
| 106,615 | |
| 1,563,437 | |
| 314,200 | |
| 86,876 | |
| 1,292,170 |
Mazatlán |
| | 211,184 |
| | 37,431 | |
| 24,704 | |
| 18,699 | |
| 63,103 | |
| 1,358,969 | |
| 162,731 | |
| 24,747 | |
| 548,185 |
| | 472,741 |
| | 57,766 | |
| 142,254 | |
| 20,999 | |
| 182,543 | |
| 1,538,740 | |
| 250,217 | |
| 148,605 | |
| 697,290 |
Zihuatanejo |
| | 98,645 |
| | 18,360 | |
| 45,984 | |
| 19,091 | |
| 12,961 | |
| 623,522 | |
| 130,925 | |
| 45,984 | |
| 553,611 |
| | 219,411 |
| | 25,255 | |
| 98,199 | |
| 21,487 | |
| 85,484 | |
| 807,473 | |
| 194,626 | |
| 127,168 | |
| 744,069 |
Regional |
| |
|
| | | |
| | |
| | |
| | |
|
| |
| | |
| | |
| |
| |
|
| | | |
| | |
| | |
| | |
| | |
| | |
| | |
| |
Chihuahua |
| | 215,728 | | | 46,049 | | 30,679 | | 25,274 | | 50,038 | | 942,529 | | 172,428 | | 32,225 | | 707,619 |
| | 546,445 | | | 56,993 | | 108,683 | | | 26,643 | | | 210,624 | | | 1,244,337 | | 416,547 | | | 137,204 | | 831,637 | ||||||||||
Culiacan |
| | 359,562 | | | 51,732 | | 68,142 | | 20,887 | | 92,341 | | 1,176,640 | | 208,282 | | 68,142 | | 628,208 |
| | 754,160 | | | 67,591 | | 127,961 | | | 24,174 | | | 284,812 | | | 1,288,354 | | 315,449 | | | 198,690 | | 804,427 | ||||||||||
Durango |
| | 79,515 | | | 11,083 | | 50,203 | | 8,259 | | 10,220 | | 361,233 | | 130,170 | | 50,534 | | 253,402 |
| | 178,142 | | | 13,485 | | 91,796 | | | 10,182 | | | 64,228 | | | 492,548 | | 198,914 | | | 209,505 | | 362,520 | ||||||||||
San Luis Potosi |
| | 108,045 | | | 28,508 | | 58,189 | | 21,569 | | 34,648 | | 764,159 | | 507,738 | | 58,189 | | 677,976 |
| | 246,795 | | | 41,350 | | 55,609 | | | 26,006 | | | 99,870 | | | 923,689 | | 598,902 | | | 99,163 | | 753,573 | ||||||||||
Tampico |
| | 74,330 | | | 17,414 | | 67,530 | | 9,920 | | 10,157 | | 459,542 | | 173,952 | | 67,530 | | 385,514 |
| | 177,992 | | | 20,297 | | 78,079 | | | 17,619 | | | 69,212 | | | 697,865 | | 252,466 | | | 82,426 | | 565,004 | ||||||||||
Torreon |
| | 94,892 | | | 17,425 | | 12,233 | | 10,605 | | 23,661 | | 427,761 | | 145,686 | | 12,233 | | 288,688 |
| | 231,357 | | | 25,193 | | 55,155 | | | 11,334 | | | 89,481 | | | 531,591 | | 163,161 | | | 88,188 | | 351,927 | ||||||||||
Zacatecas |
| | 71,292 | | | 10,512 | | 7,480 | | 8,024 | | 20,756 | | 278,600 | | 104,243 | | 7,480 | | 212,775 |
| | 164,052 | | | 13,616 | | 65,542 | | | 9,405 | | | 62,141 | | | 361,218 | | 129,973 | | | 83,413 | | 281,018 | ||||||||||
Border |
| | |
| | | |
| | |
| | |
| | |
| | |
| | |
| | |
| |
| | |
| | | |
| | |
| | |
| | |
| | |
| | |
| | |
| |
Ciudad Juarez |
| | 199,685 | | | 37,736 | | 27,949 | | 12,717 | | 60,241 | | 685,696 | | 251,677 | | 32,311 | | 376,574 |
| | 568,204 | | | 39,277 | | 258,922 | | | 18,108 | | | 212,342 | | | 1,315,268 | | 580,324 | | | 272,255 | | 770,990 | ||||||||||
Reynosa |
| | 58,010 | | | 11,500 | | 55,366 | | 9,553 | | 9,171 | | 724,866 | | 445,447 | | 55,366 | | 596,461 |
| | 149,878 | | | 10,796 | | 77,372 | | | 24,422 | | | 55,664 | | | 866,773 | | 421,733 | | | 98,412 | | 705,859 | ||||||||||
Hotel |
| | |
| | | |
| | |
| | |
| | |
| | |
| | |
| | |
| |
| | |
| | | |
| | |
| | |
| | |
| | |
| | |
| | |
| |
NH T2 Hotel |
| | — | | | 110,299 | | — | | 40,301 | | (8,609) | | 498,674 | | 201,062 | | 187 | | — |
| | — | | | 238,845 | | — | | | 45,647 | | | 66,884 | | | 491,404 | | 206,241 | | | 59,814 | | — | ||||||||||
Hilton Garden Inn |
| | — | | | 32,614 | | — | | 11,430 | | (6,918) | | 297,470 | | 31,397 | | 3,628 | | — |
| | — | | | 94,067 | | — | | | 11,758 | | | 24,652 | | | 292,959 | | 39,681 | | | 1,793 | | — | ||||||||||
Industrial Park: |
| |
|
| | | |
| | |
| | |
| | |
| | |
| | |
| | |
| |
| |
|
| | | |
| | |
| | |
| | |
| | |
| | |
| | |
| |
VYNMSA |
| | — | | | 56,454 | | — | | 23,621 | | 24,082 | | 494,223 | | 277,183 | | 107,952 | | — |
| | — | | | 81,863 | | — | | | 30,695 | | | 41,608 | | | 592,992 | | 350,088 | | | 82,554 | | — | ||||||||||
Other |
| | — | | | 2,671,873 | | | — | | | 36,688 | | | 1,621,773 | | | 18,275,746 | | | 6,327,815 | | | 10,945 | | | — |
| | — | | | 3,956,228 | | | — | | | 47,485 | | | 5,881,324 | | | 22,847,549 | | | 13,195,643 | | | 54,071 | | | — |
Total |
| | 2,966,362 |
| | 3,665,473 | |
| 1,280,339 | |
| 443,927 | |
| 2,485,163 | |
| 35,263,499 | |
| 11,087,689 | |
| 1,430,117 | |
| 10,356,661 |
| | 7,126,932 |
| | 5,480,845 | |
| 2,650,253 | |
| 561,319 | |
| 8,875,250 | |
| 45,921,107 | |
| 20,546,163 | |
| 3,291,613 | |
| 14,083,124 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||
Eliminations |
| | (23,804) | | | (2,494,434) | | | (26,470) | | | (8,583) | | | (763,696) | | | (17,071,919) | | | (3,722,356) | | | (28,634) | | | (127,006) |
| | (71,389) | | | (3,251,043) | | | (830) | | | (10,119) | | | (2,810,764) | | | (22,851,129) | | | (6,030,805) | | | (830) | | | (142,758) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||
Consolidated |
| Ps. | 2,942,558 |
| Ps. | 1,171,039 |
| Ps. | 1,253,869 |
| Ps. | 435,344 |
| Ps. | 1,721,468 |
| Ps. | 18,191,580 |
| Ps. | 7,365,333 |
| Ps. | 1,401,483 |
| Ps. | 10,229,656 |
| Ps. | 7,055,543 |
| Ps. | 2,229,802 |
| Ps. | 2,649,423 |
| Ps. | 551,200 |
| Ps. | 6,064,486 |
| Ps. | 23,069,978 |
| Ps. | 14,515,358 |
| Ps. | 3,290,783 |
| Ps. | 13,940,366 |
F-67F-61
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| Construction |
| Depreciation |
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| Investments |
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| Construction |
| Depreciation |
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| MDP Expenditures |
| Investments | |||||||||
| | Aeronautical | | Non-aeronautical | | services | | and | | Operating | | Assets per | | Liabilities per | | Capital | | in airport | | Aeronautical | | Non-aeronautical | | services | | and | | Operating | | Assets per | | Liabilities per | | and other Capital | | in airport | ||||||||||||||||||
December 31, 2019 | | revenues | | revenues | | revenues | | amortization | | income | | segment | | segment | | investments | | concessions | ||||||||||||||||||||||||||||||||||||
December 31, 2021 | | revenues | | revenues | | revenues | | amortization | | Income | | segment | | segment | | Expenditures | | concessions | ||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||
Metropolitan |
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Monterrey |
| Ps. | 2,641,052 |
| Ps. | 726,685 |
| Ps. | 323,035 |
| Ps. | 111,020 |
| Ps. | 473,615 |
| Ps. | 5,715,147 |
| Ps. | 941,349 |
| Ps. | 331,393 |
| Ps. | 3,168,968 |
| Ps. | 2,371,178 |
| Ps. | 551,744 |
| Ps. | 908,960 |
| Ps. | 142,152 |
| Ps. | 505,076 |
| Ps. | 9,851,832 |
| Ps. | 2,328,736 |
| Ps. | 1,013,223 |
| Ps. | 4,656,916 |
Tourist |
|
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Acapulco |
| | 227,954 |
| | 40,241 | |
| 63,102 | |
| 43,286 | |
| 53,812 | |
| 1,419,091 | |
| 452,731 | |
| 63,333 | |
| 1,269,386 |
| | 196,631 |
| | 33,250 | |
| 44,088 | |
| 45,693 | |
| 41,484 | |
| 1,610,833 | |
| 475,820 | |
| 52,188 | |
| 1,259,100 |
Mazatlán |
| | 321,313 |
| | 52,857 | |
| 34,573 | |
| 17,514 | |
| 52,626 | |
| 1,261,473 | |
| 153,667 | |
| 34,573 | |
| 541,430 |
| | 317,004 |
| | 46,368 | |
| 45,625 | |
| 19,254 | |
| 57,049 | |
| 1,472,456 | |
| 182,768 | |
| 54,387 | |
| 575,299 |
Zihuatanejo |
| | 191,512 |
| | 25,596 | |
| 22,876 | |
| 18,660 | |
| 43,614 | |
| 605,929 | |
| 122,048 | |
| 22,876 | |
| 524,549 |
| | 137,018 |
| | 22,127 | |
| 129,957 | |
| 20,058 | |
| 26,664 | |
| 773,651 | |
| 213,664 | |
| 130,553 | |
| 665,716 |
Regional |
| |
|
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| |
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| |
Chihuahua |
| | 411,393 | | | 67,021 | | 124,701 | | 17,974 | | 67,379 | | | 888,950 | | 157,533 | | 135,394 | | 699,711 |
| | 419,027 | | | 48,531 | | 63,456 | | | 26,384 | | | 79,271 | | | 1,156,808 | | 311,608 | | | 64,277 | | 747,296 | |||||||||
Culiacan |
| | 617,979 | | | 66,286 | | 68,960 | | 18,658 | | 96,278 | | | 1,021,410 | | 140,294 | | 69,834 | | 579,084 |
| | 573,506 | | | 57,560 | | 91,262 | | | 22,442 | | | 109,180 | | | 1,291,889 | | 218,694 | | | 93,664 | | 698,863 | |||||||||
Durango |
| | 150,130 | | | 13,433 | | 36,677 | | 7,537 | | 23,014 | | | 329,251 | | 104,720 | | 36,677 | | 210,111 |
| | 155,408 | | | 14,536 | | 35,600 | | | 10,082 | | | 31,170 | | | 433,110 | | 178,875 | | | 37,840 | | 280,275 | |||||||||
San Luis Potosi |
| | 174,340 | | | 35,631 | | 110,743 | | 12,857 | | 27,938 | | | 736,196 | | 470,919 | | 110,743 | | 639,981 |
| | 192,712 | | | 38,345 | | 67,399 | | | 24,150 | | | 35,288 | | | 975,174 | | 592,318 | | | 69,963 | | 722,596 | |||||||||
Tampico |
| | 197,160 | | | 28,057 | | 61,823 | | 9,218 | | 31,808 | | | 424,573 | | 143,603 | | 61,823 | | 326,939 |
| | 133,178 | | | 20,054 | | 130,162 | | | 12,083 | | | 21,775 | | | 607,634 | | 263,087 | | | 133,222 | | 504,349 | |||||||||
Torreon |
| | 201,446 | | | 23,683 | | 18,343 | | 9,883 | | 31,658 | | | 394,575 | | 129,541 | | 18,639 | | 285,823 |
| | 175,268 | | | 24,450 | | 28,802 | | | 10,811 | | | 32,917 | | | 455,251 | | 150,071 | | | 130,982 | | 307,785 | |||||||||
Zacatecas |
| | 141,500 | | | 13,945 | | 6,842 | | 7,813 | | 31,135 | | | 276,150 | | 113,357 | | 6,842 | | 212,224 |
| | 132,427 | | | 14,996 | | 18,318 | | | 8,419 | | | 21,138 | | | 304,253 | | 119,919 | | | 38,291 | | 223,770 | |||||||||
Border |
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| | ��� |
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Ciudad Juarez |
| | 380,271 | | | 55,990 | | 17,650 | | 11,799 | | 61,374 | | | 602,764 | | 211,678 | | 31,452 | | 362,169 |
| | 403,208 | | | 36,148 | | 165,532 | | | 15,201 | | | 74,111 | | | 908,182 | | 322,338 | | | 200,447 | | 528,488 | |||||||||
Reynosa |
| | 113,515 | | | 18,240 | | 112,031 | | 8,189 | | 26,375 | | | 676,207 | | 400,642 | | 113,242 | | 549,139 |
| | 119,950 | | | 12,133 | | 74,664 | | | 20,472 | | | 24,219 | | | 889,245 | | 490,399 | | | 86,752 | | 652,159 | |||||||||
Hotel |
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NH T2 Hotel |
| | — | | | 255,393 | | — | | 39,546 | | 77,325 | | | 518,590 | | 201,012 | | 9,190 | | — |
| | — | | | 171,005 | | — | | | 42,054 | | | 35,708 | | | 517,121 | | 205,908 | | | 105 | | — | |||||||||
Hilton Garden Inn |
| | — | | | 103,474 | | — | | 11,382 | | 32,345 | | | 301,362 | | 34,001 | | 82 | | — |
| | — | | | 52,483 | | — | | | 9,634 | | | 5,789 | | | 309,245 | | 32,992 | | | 0 | | — | |||||||||
Industrial Park: | |
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VYNMSA | | — | | | 41,981 | | — | | 19,548 | | 15,622 | | | 390,478 | | 185,094 | | 46,160 | | — | | — | | | 68,294 | | — | | | 28,186 | | | 31,222 | | | 486,130 | | 262,011 | | | 16,127 | | — | |||||||||||
Other |
| | — | | | 5,651,607 | | | — | | | 50,368 | | | 4,891,268 | | | 17,432,325 | | | 6,554,142 | | | 3,194 | | | — |
| | — | | | 4,118,094 | | | — | | | 30,155 | | | 4,293,516 | | | 23,092,832 | | | 10,190,295 | | | 10,080 | | | — |
Total |
| | 5,769,565 |
| | 7,220,120 | |
| 1,001,356 | |
| 415,252 | |
| 6,037,186 | |
| 32,994,471 | |
| 10,516,331 | |
| 1,095,447 | |
| 9,369,514 |
| | 5,326,515 |
| | 5,330,118 | |
| 1,803,825 | |
| 487,230 | |
| 5,425,577 | |
| 45,135,646 | |
| 16,539,503 | |
| 2,132,101 | |
| 11,822,612 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||
Eliminations |
| | (16,903) | | | (5,400,515) | | | (46,522) | | | — | | | (1,181,880) | | | (15,717,510) | | | (3,126,865) | | | (46,522) | | | (102,403) |
| | (48,787) | | | (3,676,739) | | | (14,922) | | | — | | | (1,315,188) | | | (22,246,505) | | | (4,888,594) | | | (14,923) | | | (141,928) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |||||||||||
Consolidated |
| Ps. | 5,752,662 |
| Ps. | 1,819,605 |
| Ps. | 954,834 |
| Ps. | 415,252 |
| Ps. | 4,855,306 |
| Ps. | 17,276,961 |
| Ps. | 7,389,466 |
| Ps. | 1,048,925 |
| Ps. | 9,267,111 |
| Ps. | 5,277,728 |
| Ps. | 1,653,379 |
| Ps. | 1,788,903 |
| Ps. | 487,230 |
| Ps. | 4,110,389 |
| Ps. | 22,889,141 |
| Ps. | 11,650,909 |
| Ps. | 2,117,178 |
| Ps. | 11,680,684 |
F-68F-62
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||
|
| | |
| |
| Construction |
| Depreciation |
| | |
| | |
| | |
| | |
| Investments |
| | |
| |
| Construction |
| Depreciation |
| | |
| | |
| | |
| MDP Expenditures |
| Investments | |||||||||
| | Aeronautical | | Non-aeronautical | | services | | and | | Operating | | Assets per | | Liabilities per | | Capital | | in airport | | Aeronautical | | Non-aeronautical | | services | | and | | Operating | | Assets per | | Liabilities per | | and other Capital | | in airport | ||||||||||||||||||
December 31, 2018 | | revenues | | revenues | | revenues | | amortization | | income | | segment | | segment | | investments | | concessions | ||||||||||||||||||||||||||||||||||||
December 31, 2020 | | revenues | | revenues | | revenues | | amortization | | Income | | segment | | segment | | Expenditures | | concessions | ||||||||||||||||||||||||||||||||||||
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||
Metropolitan | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||
Monterrey |
| Ps. | 2,447,993 |
| Ps. | 649,393 |
| Ps. | 232,698 |
| Ps. | 103,454 |
| Ps. | 815,055 |
| Ps. | 5,350,950 |
| Ps. | 742,350 |
| Ps. | 282,514 |
| Ps. | 2,935,333 |
| Ps. | 1,278,255 |
| Ps. | 479,322 |
| Ps. | 802,470 |
| Ps. | 122,507 |
| Ps. | 445,952 |
| Ps. | 6,479,365 |
| Ps. | 1,367,347 |
| Ps. | 852,740 |
| Ps. | 3,870,329 |
Tourist |
|
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Acapulco |
| | 182,663 |
| | 34,279 | |
| 279,099 | |
| 33,125 | |
| 43,460 | |
| 1,415,909 | |
| 467,444 | |
| 279,099 | |
| 1,246,261 |
| | 117,218 |
| | 27,159 | |
| 29,409 | |
| 44,780 | |
| 21,587 | |
| 1,414,504 | |
| 449,606 | |
| 36,121 | |
| 1,257,321 |
Mazatlán |
| | 276,126 |
| | 46,754 | |
| 31,308 | |
| 16,594 | |
| 81,654 | |
| 1,256,447 | |
| 164,075 | |
| 31,306 | |
| 523,655 |
| | 211,184 |
| | 37,431 | |
| 24,704 | |
| 18,699 | |
| 63,103 | |
| 1,358,969 | |
| 162,731 | |
| 32,655 | |
| 548,185 |
Zihuatanejo |
| | 167,578 |
| | 22,934 | |
| 13,534 | |
| 18,266 | |
| 43,595 | |
| 617,071 | |
| 117,245 | |
| 13,587 | |
| 518,134 |
| | 98,645 |
| | 18,360 | |
| 45,984 | |
| 19,091 | |
| 12,961 | |
| 623,522 | |
| 130,925 | |
| 56,389 | |
| 553,611 |
Regional |
| |
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| | |
| |
Chihuahua |
| | 364,755 | | | 56,128 | | 141,546 | | 13,462 | | 103,980 | | | 874,960 | | 170,457 | | | 141,908 | | 590,944 |
| | 215,728 | | | 46,049 | | 30,679 | | | 25,274 | | | 50,038 | | 942,529 | | 172,428 | | | 46,111 | | 707,619 | |||||||||
Culiacan |
| | 539,540 | | | 57,313 | | 33,888 | | 17,408 | | 145,767 | | | 978,514 | | 153,687 | | | 34,035 | | 526,881 |
| | 359,562 | | | 51,732 | | 68,142 | | | 20,887 | | | 92,341 | | 1,176,640 | | 208,282 | | | 68,737 | | 628,208 | |||||||||
Durango |
| | 112,310 | | | 10,822 | | 13,788 | | 6,558 | | 29,339 | | | 294,355 | | 76,831 | | | 13,788 | | 179,567 |
| | 79,515 | | | 11,083 | | 50,203 | | | 8,259 | | | 10,220 | | 361,233 | | 130,170 | | | 51,282 | | 253,402 | |||||||||
San Luis Potosi |
| | 167,030 | | | 30,275 | | 231,726 | | 8,711 | | 39,665 | | | 635,811 | | 385,551 | | | 231,726 | | 540,721 |
| | 108,045 | | | 28,508 | | 58,189 | | | 21,569 | | | 34,648 | | 764,159 | | 507,738 | | | 58,489 | | 677,976 | |||||||||
Tampico |
| | 190,502 | | | 26,891 | | 26,169 | | 8,604 | | 47,618 | | | 333,070 | | 75,739 | | | 26,169 | | 273,340 |
| | 74,330 | | | 17,414 | | 67,530 | | | 9,920 | | | 10,157 | | 459,542 | | 173,952 | | | 75,441 | | 385,514 | |||||||||
Torreon |
| | 184,396 | | | 22,655 | | 19,990 | | 9,426 | | 48,883 | | | 352,659 | | 111,946 | | | 19,990 | | 276,164 |
| | 94,892 | | | 17,425 | | 12,233 | | | 10,605 | | | 23,661 | | 427,761 | | 145,686 | | | 12,428 | | 288,688 | |||||||||
Zacatecas |
| | 105,626 | | | 11,935 | | 9,655 | | 7,460 | | 27,667 | | | 261,320 | | 86,236 | | | 9,656 | | 212,093 |
| | 71,292 | | | 10,512 | | 7,480 | | | 8,024 | | | 20,756 | | 278,600 | | 104,243 | | | 29,634 | | 212,775 | |||||||||
Border |
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| |
Ciudad Juarez |
| | 310,892 | | | 45,287 | | 9,096 | | 11,631 | | 89,551 | | | 496,472 | | 153,823 | | | 9,096 | | 353,807 |
| | 199,685 | | | 37,736 | | 27,949 | | | 12,717 | | | 60,241 | | 685,696 | | 251,677 | | | 32,356 | | 376,574 | |||||||||
Reynosa |
| | 106,867 | | | 14,810 | | 144,830 | | 7,909 | | 30,104 | | | 567,054 | | 309,368 | | | 153,562 | | 443,771 |
| | 58,010 | | | 11,500 | | 55,366 | | | 9,553 | | | 9,171 | | 724,866 | | 445,447 | | | 59,569 | | 596,461 | |||||||||
Hotel |
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| | |
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| |
NH T2 Hotel |
| | — | | | 246,065 | | — | | 22,969 | | 67,250 | | | 308,727 | | 29,626 | | | 5,772 | | — |
| | — | | | 110,299 | | — | | | 40,301 | | | (8,609) | | 498,674 | | 201,062 | | | 187 | | — | |||||||||
Hilton Garden Inn | | | — | | | 100,051 | | — | | 10,840 | | 28,973 | | | 248,633 | | 7,260 | | | 5,208 | | — | | — | | | 32,614 | | — | | | 11,430 | | | (6,918) | | 297,470 | | 31,397 | | | 3,628 | | — | ||||||||||
Industrial Park: | | |
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VYNMSA | | | — | | | 28,190 | | — | | 14,260 | | 8,276 | | | 344,931 | | 139,277 | | | 97,153 | | — | | — | | | 56,454 | | — | | | 23,621 | | | 24,082 | | 494,223 | | 277,183 | | | 107,952 | | — | ||||||||||
Other |
| | — | | | 4,433,390 | | | — | | | 41,068 | | | 4,135,788 | | | 15,504,577 | | | 6,069,798 | | | 5,616 | | | — |
| | — | | | 2,671,873 | | | — | | | 36,688 | | | 1,621,773 | | | 18,275,746 | | | 6,327,815 | | | 10,699 | | | — |
Total |
| | 5,156,278 | |
| 5,837,172 | |
| 1,187,327 | |
| 351,745 | |
| 5,786,625 | |
| 29,841,460 | |
| 9,260,713 | |
| 1,360,185 | |
| 8,620,671 |
| | 2,966,361 |
| | 3,665,471 | |
| 1,280,338 | |
| 443,925 | |
| 2,485,164 | |
| 35,263,499 | |
| 11,087,689 | |
| 1,534,419 | |
| 10,356,663 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||
Eliminations |
| | (16,226) | | | (4,211,675) | | | (45,822) | | | — | | | (1,654,089) | | | (14,250,976) | | | (2,182,156) | | | (45,822) | | | (54,015) |
| | (23,803) | | | (2,494,432) | | | (26,469) | | | (8,581) | | | (763,696) | | | (17,071,919) | | | (3,722,356) | | | (28,634) | | | (127,007) |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ||||||||||
Consolidated |
| Ps. | 5,140,052 |
| Ps. | 1,625,497 |
| Ps. | 1,141,505 |
| Ps. | 351,745 |
| Ps. | 4,132,536 |
| Ps. | 15,590,484 |
| Ps. | 7,078,557 |
| Ps. | 1,314,363 |
| Ps. | 8,566,656 |
| Ps. | 2,942,558 |
| Ps. | 1,171,039 |
| Ps. | 1,253,869 |
| Ps. | 435,344 |
| Ps. | 1,721,468 |
| Ps. | 18,191,580 |
| Ps. | 7,365,333 |
| Ps. | 1,505,785 |
| Ps. | 10,229,656 |
F-69F-63
According to the General Airports Law on Airports and its regulations, Company revenues are classified as aeronautical services and non-aeronautical services.
Aeronautical services include those services provided to airlines and passengers as well as complementary services.
Non-aeronautical services include those services that are not essential for operating an airport, such as the lease of commercial premises, restaurants and banks.
Revenues generated by aeronautical services are under a price regulation system administered by the Ministry of Infrastructure Communications and Transportation for airport concessions, which establishes a maximum rate (TM) for each year in a five-year period. The TM is the maximum amount of revenue per “work load“workload unit” that may be earned at an airport each year from regulated sources. Under this regulation, a work loadworkload unit is equivalent to one passenger (excluding transit passengers) or 100 kilograms (220 pounds) of cargo.
Non-aeronautical services are not covered by the regulation system administered by the Ministry of Infrastructure Communications and Transportation. However, in some cases, they may be regulated by other authorities, as is the case with revenues generated from the operation of parking lots.
Under the General Airports Law and its regulations, revenues generated from the operation of parking lots are considered aeronautical revenues. For purposes of these financial statements, such revenues are classified as non-aeronautical.
F-64
Following is a detail of the composition of revenues of the Company, using the classification established by the General Airports Law and its related regulations, with the exception of non-aeronautical revenues as mentioned in the preceding paragraph:
| | | | | | | | | | | | | | | | | | | |
| | Year ended December 31, | | Year ended December 31, | |||||||||||||||
| | 2020 |
| 2019 |
| 2018 |
| 2022 |
| 2021 |
| 2020 | |||||||
Aeronautical services: | |
| |
|
| |
|
| | |
| |
|
| |
|
| | |
Domestic TUA | | Ps. | 1,857,551 |
| Ps. | 3,776,401 |
| Ps. | 3,382,198 | | Ps. | 4,791,166 |
| Ps. | 3,422,714 |
| Ps. | 1,857,551 | |
International TUA | | | 542,933 |
| | 1,207,989 |
| | 1,061,793 | | | 1,375,479 |
| | 1,169,292 |
| | 542,933 | |
Landing charges | | | 147,387 |
| | 229,919 |
| | 205,787 | | | 269,796 |
| | 206,114 |
| | 147,387 | |
Platform for embarking and disembarking | | | 90,257 |
| | 150,055 |
| | 136,852 | | | 185,785 |
| | 134,436 |
| | 90,257 | |
Aircraft parking charges on extended stay or overnight | | | 31,905 |
| | 35,910 |
| | 36,402 | | | 42,922 |
| | 36,539 |
| | 31,905 | |
Domestic and international passenger and carry-on baggage check | | | 29,688 |
| | 62,970 |
| | 54,570 | | | 63,682 |
| | 52,998 |
| | 29,688 | |
Aerocars and jetways | | | 19,920 |
| | 48,074 |
| | 47,956 | | | 28,168 |
| | 22,395 |
| | 19,920 | |
Other airport services, leases and regulated access rights(2) | | | 222,917 |
| | 241,344 |
| | 214,494 | | | 298,545 |
| | 233,240 |
| | 222,917 | |
Total revenues from aeronautical services | | Ps. | 2,942,558 |
| Ps. | 5,752,662 |
| Ps. | 5,140,052 | | Ps. | 7,055,543 |
| Ps. | 5,277,728 |
| Ps. | 2,942,558 |
F-70
| | | | | | | | | |
| | Year ended December 31, | |||||||
|
| 2022 |
| 2021 |
| 2020 | |||
Non-aeronautical services: |
|
| |
|
| |
|
| |
Commercial activities |
|
| |
|
| |
|
| |
Car parking charges |
| Ps. | 340,095 |
| Ps. | 217,728 |
| Ps. | 126,818 |
Advertising(1) |
| | 73,579 | | | 70,338 | | | 59,695 |
Retail operations(1) |
| | 124,726 | | | 86,128 | | | 64,486 |
Food and beverage(1) |
| | 176,844 | | | 120,148 | | | 87,499 |
Car rental operators(1) |
| | 205,019 | | | 142,651 | | | 111,037 |
Time share developers(1) |
| | 16,960 | | | 13,557 | | | 12,683 |
Financial services(1) |
| | 13,013 | | | 8,355 | | | 7,853 |
Communication and services(1) |
| | 16,350 | | | 18,137 | | | 17,800 |
Services to passenger |
| | 5,232 | | | 3,561 | | | 3,281 |
VIP lounges |
| | 80,933 | | | 49,381 | | | 36,538 |
Other services |
| | 59,152 | | | 49,593 | | | 44,300 |
Total revenue from commercial activities |
| | 1,111,903 | | | 779,577 | | | 571,990 |
| | | | | | | | | |
Diversification activities: |
| |
| | |
| | |
|
Hotel services |
| | 325,495 | | | 221,728 | | | 141,890 |
OMA Carga |
| | 329,793 | | | 257,210 | | | 183,382 |
Real estate services |
| | 26,364 | | | 19,721 | | | 16,499 |
Industrial services |
| | 73,760 | | | 63,737 | | | 51,272 |
Other services |
| | 10,858 | | | 6,889 | | | 7,547 |
Total diversification activities |
| | 766,270 | | | 569,285 | | | 400,590 |
| | | | | | | | | |
Complementary activities: |
| |
| | |
| | |
|
Leasing of space(1) |
| | 118,851 | | | 122,639 | | | 85,729 |
Access rights |
| | 24,892 | | | 21,316 | | | 15,819 |
Checked baggage inspection |
| | 198,336 | | | 150,238 | | | 86,491 |
Other services |
| | 9,550 | | | 10,324 | | | 10,420 |
Total of complimentary activities |
| | 351,629 | | | 304,517 | | | 198,459 |
Total revenue from non-aeronautical services |
| Ps. | 2,229,802 |
| Ps. | 1,653,379 |
| Ps. | 1,171,039 |
| | | | | | | | | |
| | Year ended December 31, | |||||||
|
| 2020 |
| 2019 |
| 2018 | |||
Non-aeronautical services: |
|
| |
|
| |
|
| |
Commercial activities |
|
| |
|
| |
|
| |
Car parking charges |
| Ps. | 126,818 |
| Ps. | 279,463 |
| Ps. | 244,461 |
Advertising(1)(2) |
| | 59,695 | | | 76,200 | | | 68,475 |
Retail operations(1)(2) |
| | 64,486 | | | 124,554 | | | 114,418 |
Food and beverage(1)(2) |
| | 87,499 | | | 144,374 | | | 120,828 |
Car rental operators(1)(2) |
| | 111,037 | | | 149,454 | | | 131,478 |
Time share developers(1)(2) |
| | 12,683 | | | 16,663 | | | 14,115 |
Financial services(2)(3) |
| | 7,853 | | | 10,367 | | | 9,255 |
Communication and services(1)(2) |
| | 17,800 | | | 16,006 | | | 15,551 |
Services to passenger |
| | 3,281 | | | 4,127 | | | 2,746 |
VIP lounges |
| | 36,538 | | | 51,176 | | | 36,649 |
Other services |
| | 44,300 | | | 43,542 | | | 36,607 |
Total revenue from commercial activities |
| | 571,990 | | | 915,926 | |
| 794,583 |
| | | | | | | | | |
Diversification activities: |
| |
| | |
| |
|
|
Hotel services |
| | 141,890 | | | 357,032 | |
| 344,307 |
OMA Carga |
| | 183,382 | | | 194,936 | |
| 177,396 |
Real estate services |
| | 16,499 | | | 18,181 | |
| 16,352 |
Industrial services |
| | 51,272 | | | 39,451 | |
| 26,340 |
Other services |
| | 7,547 | | | 4,966 | |
| 4,061 |
Total diversification activities |
| | 400,590 | | | 614,566 | |
| 568,456 |
| | | | | | | | | |
Complementary activities: |
| |
| | |
| |
|
|
Leasing of space(1)(2) |
| | 85,729 | | | 83,477 | |
| 74,887 |
Access rights |
| | 15,819 | | | 19,709 | |
| 18,023 |
Documented baggage inspection |
| | 86,491 | | | 175,006 | |
| 153,192 |
Other services (CUSS and CUTE) |
| | 10,420 | | | 10,921 | |
| 16,356 |
Total of complimentary activities |
| | 198,459 | | | 289,113 | |
| 262,458 |
Total revenue from non-aeronautical services |
| Ps. | 1,171,039 |
| Ps. | 1,819,605 |
| Ps. | 1,625,497 |
(1) |
Revenues from commercial |
F-65
Approximately 77%,75% of consolidated revenues for the years ended December 31, 20202022, 2021 and 2019 and 20182020, generated by the Monterrey, Acapulco, Mazatlán, Culiacán, Chihuahua, Ciudad Juárez, and San Luis de Potosí airports.Airports.
F-71
The cost of services is as follows:
| | | | | | | | | | | | | | | | | | |
| | Year ended December 31, | | Year ended December 31, | ||||||||||||||
|
| 2020 |
| 2019 |
| 2018 |
| 2022 |
| 2021 |
| 2020 | ||||||
Wages and salaries |
| Ps. | 227,076 |
| Ps. | 242,237 |
| Ps. | 231,753 |
| Ps. | 281,460 |
| Ps. | 229,358 |
| Ps. | 228,993 |
Maintenance |
| | 124,563 |
| | 177,191 |
| | 152,583 |
| | 145,931 |
| | 142,069 |
| | 124,563 |
Security and insurance |
| | 134,774 |
| | 161,351 |
| | 170,549 |
| | 142,147 |
| | 128,299 |
| | 134,774 |
Utilities (electric, cleaning and water) |
| | 122,961 |
| | 177,250 |
| | 210,158 |
| | 166,280 |
| | 144,727 |
| | 122,961 |
Building lease |
| | 2,543 |
| | 15,683 |
| | 44,359 |
| | 8,609 |
| | 2,015 |
| | 2,543 |
Allowance for doubtful accounts |
| | 17,738 |
| | (241) |
| | (5,960) |
| | 4,711 |
| | 646 |
| | 17,738 |
Cost of hotel service |
| | 30,650 |
| | 85,706 |
| | 65,853 |
| | 70,319 |
| | 44,282 |
| | 30,650 |
Employee statutory profit sharing |
| | 1,917 |
| | 236 |
| | 1,099 | |||||||||
Equipment lease, fees and others |
| | 103,736 |
| | 94,794 |
| | 107,502 |
| | 104,181 |
| | 90,711 |
| | 103,736 |
|
| Ps. | 765,958 |
| Ps. | 954,207 |
| Ps. | 977,896 |
| Ps. | 923,638 |
| Ps. | 782,107 |
| Ps. | 765,958 |
Issuance OMA Debt
On February 16, 2023, GACN reported that, firther to the resolutions adopted at the General Ordinary Stockholders’ Meeting held on February 13, 2023 declaring a cash dividend in the amount of up to Ps.1,450,000, the Board of Directors, exercising the powers granted by the Meeting, determined the payment of a dividend in the amount of Ps.1,450,000 with a payment date of March 2, 2023.
On April 16, 2021,March 10, 2023, GACN completed the Company issued Ps. 3,500,000 through 5- and 7-year term debt securitiesplacement of sustainability-linked Debt Securities for a total of Ps.3,200,000 in the Mexican market. The 5-year debt security, with a principal amount of Ps. 1,000,000, accrues interesttwo tranches, one at a variable rate and the other at a fixed rate. The variable rate tranche, in the amount of Ps.640,000, matures in 3.4 years and bears interest at 28-day TIIE plus 7522 basis points with principal amount to be paid at maturity on April 10, 2026.points. The 7-year debt security, with a principalfixed rate tranche, in the amount of Ps. 2,500,000, accrues2,560,000, maturing in 7 years, bears interest at a fixed rate of 7.83% with10.26%. In both cases, the principal amount to be paidis payable in a single installment at maturity on April 7, 2028. maturity.
The proceeds of the issuancesissuance were used to redeem, onrepay Ps.1,200,000 of short-term bank debt, amortize in full the Debt Securities with ticker: OMA13 for Ps.1,500,000, and the remainder for general corporate purposes, including for possible investments, which had not been defined at that date.
On April 19, 2021,21, 2023, GACN reported that, further to the Ps. 3,000,000 debt securities maturing in June 2021 and will fund eligible investments underresolutions adopted at the Company’s Master Development Program.
2021 Annual Shareholders’General Ordinary Stockholders’ Meeting
The Annual Meeting for the Shareholders of the Company was held on April 21, 2021. The General Ordinary Shareholders’ Meeting2023 approved the declaration and payment of a cash dividend to shareholdersin the amount of up to Ps. 2,000 million and delegated to the Board of Directors the power to determine the amountPs.2,300,000, to be paid out, which will come from accumulated earnings, as well asin two installments: the date or datesfirst installment of Ps.1,800,000 no later than June 30, 2023, and formsa second installment of payment. The declaration of the aforementioned dividend will become effective as of the date the Board makes its determination.Ps.500,000, no later than September 30, 2023.
29. Authorization for the issuance of the consolidated financial statements
The Company’s consolidated financial statements were authorized for issuance on April 30, 2021,1, 2023, by the Chief Executive Officer, Ricardo Dueñas Espriu and Ruffo Pérez Pliego del Castillo, General
F-66
Director of Administration and Finance and, consequently do not reflect the events occurred after that date.
The consolidated financial statements as of December 31, 2021, were approved by the Annual Stockholders’ Meeting held on April 21, 2022.
* * * * * *
F-72F-67