20-F
Table of Contents

 
 
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 20-F
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2006
Commission File Number: 1-33168
Grupo Aeroportuario del Centro Norte, S.A.B. de C.V.
(Exact name of registrant as specified in its charter)
     
Central North Airport Group   United Mexican States
(Translation of registrant’s name into English)   (Jurisdiction of incorporation or organization)
Aeropuerto Internacional de Monterrey
Zona de Carga
Carretera Miguel Alemán, Km. 24 s/n
66600 Apodaca, Nuevo León, Mexico

(Address of principal executive offices)
Securities registered or to be registered pursuant to Section 12(b) of the Act:
     
    Name of each exchange
Title of each class:   on which registered
     
American Depositary Shares each representing 8 Series B shares   The NASDAQ Stock Market LLC
Series B shares   The NASDAQ Stock Market LLC*
 
*   Not for trading, but only in connection with the registration of American Depositary Shares, pursuant to the requirements of the Securities and Exchange Commission.
Securities registered or to be registered pursuant to Section 12(g) of the Act:
None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:
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:
     
Title of each class:   Number of Shares
     
Series B Shares   341,200,000
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes o  No þ
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 o  No þ
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 þ  No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer o      Accelerated filer o      Non-accelerated filer þ
Indicate by check mark which financial statement item the registrant has elected to follow:
Item 17 o     Item 18 þ
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 o     No þ
 
 

 


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TABLE OF CONTENTS
             
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ITEM 1.       1  
ITEM 2.       1  
ITEM 3.       1  
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        7  
        23  
ITEM 4.       23  
        23  
        28  
        59  
        78  
        79  
ITEM 4A.       79  
ITEM 5.       79  
ITEM 6.       103  
ITEM 7.       118  
        118  
        121  
ITEM 8.       123  
        123  
        125  
ITEM 9.       127  
        127  
        128  
ITEM 10.       129  
        129  
        145  
        145  
        146  
        149  
ITEM 11.       149  

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TABLE OF CONTENTS
(Continued)
             
        Page
 
ITEM 12.       149  
ITEM 13.       150  
ITEM 14.       150  
ITEM 15.       150  
ITEM 16.       150  
ITEM 16A.       150  
ITEM 16B.       150  
ITEM 16C.       151  
ITEM 16D.       151  
ITEM 16E.       151  
ITEM 17.       152  
ITEM 18.       153  
ITEM 19.       154  

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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
SELECTED FINANCIAL DATA
     We publish our financial statements in Mexican pesos. Pursuant to Mexican Financial Reporting Standards accepted in Mexico (Normas de Informacion Financiera), or Mexican FRS, financial data for all periods in the financial statements included in Items 3, 5 and 8 and, unless otherwise indicated, throughout this Form 20-F have been restated in constant pesos as of December 31, 2006.
     This Form 20-F contains translations of certain peso amounts into U.S. dollars at specified rates solely for the convenience of the reader. These translations should not be construed as representations that the peso amounts actually represent such U.S. dollar amounts or could be converted into U.S. dollars at the rate indicated. Unless otherwise indicated, U.S. dollar amounts have been translated from Mexican pesos at an exchange rate of Ps. 10.80 to U.S.$1.00, the exchange rate for pesos on December 31, 2006, as published by Banco de Mexico, the Mexican Central Bank. On June 28, 2007 the Federal Reserve Bank of New York’s noon buying rate for Mexican pesos was Ps. 10.79 to U.S.$1.00.
     The following tables present a summary of our audited consolidated financial information and that of our subsidiaries for each of the periods indicated. This information should be read in conjunction with, and is qualified in its entirety by reference to, our financial statements, including the notes thereto. Our financial statements are prepared in accordance with Mexican FRS, which differs in certain significant respects from generally accepted accounting principles in the United States, or U.S. GAAP. Information under U.S. GAAP is also provided in this summary financial data. Note 19 to our financial statements provides a description of the principal differences between Mexican FRS and U.S. GAAP as they relate to our business.
     Mexican FRS provides for the recognition of certain effects of inflation by restating non-monetary assets and non-monetary liabilities using the Mexican National Consumer Price Index, or NCPI, restating the components of stockholders’ equity using the NCPI and recording gains or losses in purchasing power from holding monetary liabilities or assets. Mexican FRS requires the restatement of all financial statements to constant Mexican pesos as of the date of the most recent balance sheet presented. Our audited financial statements and all other financial information contained herein are accordingly presented in constant pesos with purchasing power as of December 31, 2006 unless otherwise noted.
     References in this annual report on Form 20-F to “dollars,” “U.S. dollars” or “U.S.$” are to the lawful currency of the United States of America. References in this annual report on Form 20-F to “pesos” or “Ps.” are to the lawful currency of Mexico. We publish our financial statements in pesos.

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     This annual report on Form 20-F contains references to “workload units,” which are units measuring an airport’s passenger traffic volume and cargo volume. A workload unit currently is equivalent to one terminal passenger or 100 kilograms (220 pounds) of cargo.
The summary financial and other information set forth below reflects our financial condition, results of operations and certain operating data since the year ended December 31, 2002.
                                                 
    Year ended December 31,  
    2002     2003     2004     2005     2006  
                                            (thousands  
    (in thousands of constant Mexican pesos as of December 31, 2006)     of dollars)(1)  
Statement of Income data:
                                               
Mexican FRS:
                                               
Revenues:
                                               
Aeronautical services(2)
  Ps. 945,111     Ps. 969,636     Ps. 1,044,448     Ps. 1,149,056     Ps. 1,321,300     US$. 122,348  
Non-aeronautical services(3)
    151,007       191,064       241,636       277,208       304,882       28,231  
Total revenues
    1,096,118       1,160,700       1,286,084       1,426,264       1,626,182       150,579  
Operating costs:
                                               
Costs of services
    317,277       328,775       345,565       374,943       383,065       35,471  
General and administrative expenses
    232,790       246,300       233,296       235,842       228,872       21,193  
Technical assistance fee(4)
    65,310       38,101       38,758       38,566       47,746       4,421  
Concession tax(5)
    57,959       56,986       62,531       70,011       81,569       7,553  
Depreciation and amortization:
                                               
Depreciation(6)
    63,440       176,587       190,900       201,518       253,019       23,428  
Amortization(7)
    112,061       17,128       17,127       18,034       28,495       2,639  
Total depreciation and amortization
    175,501       193,715       208,027       219,552       281,514       26,067  
Total operating costs
    848,837       863,877       888,177       938,914       1,022,766       94,705  
Income from operations
    247,282       296,823       397,907       487,350       603,416       55,874  
Net comprehensive financing income (expense)
    18,158       24,971       (14,787 )     28,540       67,780       6,276  
Other income (expense)
    9,277       2,689       4,440       5,182       10,413       965  
Income before income taxes and statutory employee profit sharing
    274,717       324,483       387,560       521,072       681,609       63,115  
Income tax and statutory employee profit sharing expense
    135,823       140,201       90,458       153,773       229,372       21,239  
Consolidated net income
    138,893       184,282       297,102       367,299       452,237       41,876  
Basic and diluted earnings per share(8)
    0.3543       0.4701       0.7579       0.9370       1.1444       0.1059  
Basic and diluted earnings per ADS(8)
    2.8346       3.7609       6.0633       7.4960       9.1552       0.8472  
U.S. GAAP:
                                               
Revenues
                    1,286,084       1,426,264       1,626,182       150,579  
Income from operations
                    468,752       578,503       672,596       62,280  
Consolidated net income
                    177,437       429,661       528,916       48,976  
Basic earnings per share(8)
                    0.4561       1.1044       1.3506       0.1251  
Diluted earnings per share(10)
                    0.4526       1.0960       1.3405       0.1241  
Basic earnings per ADS(8)
                    3.6488       8.8352       10.8048       1.0005  
Diluted earnings per ADS(10)
                    3.6208       8.7680       10.7240       0.9930  
Other operating data:
                                               
Total terminal passengers (thousands of passengers)(11)
    8,553       8,853       9,739       10,599       11,784       11,784  
Total air traffic movements (thousands of movements)
    340       333       346       362       383       383  
Total revenues per terminal passenger(12)
    128       131       132       134       138       13  
Other data:
                                               
EBITDA:
                                               
Consolidated net income under Mexican FRS
    138,893       184,282       297,102       367,299       452,237       41,876  
Minus:
                                               

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    Year ended December 31,  
    2002     2003     2004     2005     2006  
                                            (thousands  
    (in thousands of constant Mexican pesos as of December 31, 2006)     of dollars)(1)  
Net comprehensive financing income (expense)
    18,158       24,971       (14,787 )     28,540       67,780       6,276  
Plus:
                                               
Income tax and statutory employee profit sharing expense
    135,823       140,201       90,458       153,773       229,372       21,239  
Depreciation and amortization
    175,501       193,715       208,027       219,552       281,514       26,067  
EBITDA(13)
    432,060       493,227       610,374       712,084       895,343       82,906  

 


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    As of and for the year ended December 31,  
    2002     2003     2004     2005     2006     2006  
                                            (thousands of  
    (in thousands of constant Mexican pesos as of December 31, 2006)     dollars)(1)  
Balance sheet data:
                                               
Mexican FRS:
                                               
Cash and cash equivalents
  Ps. 801,807     Ps. 931,644     Ps. 1,251,664     Ps. 1,644,776     Ps. 1,612,384       149,303  
Total current assets
    1,128,699       1,193,102       1,485,830       1,936,466       2,065,623       191,270  
Airport concessions—net
            787,896       770,769       753,641       736,512       68,199  
Rights to use airport facilities—net
    5,266,856       4,340,501       4,219,300       4,098,025       3,976,748       368,234  
Total assets
    7,163,345       7,409,097       7,762,461       8,280,314       8,552,460       791,931  
Current liabilities
    146,784       125,407       147,059       149,704       177,561       16,442  
Total liabilities
    449,262       510,733       566,993       717,549       859,683       79,604  
Total stockholders’ equity(14)
    6,174,082       6,898,365       7,195,468       7,562,765       7,692,777       712,327  
U.S. GAAP:
                                               
Cash and cash equivalents
                    1,251,664       1,644,776       1,612,384       149,303  
Total current assets
                    1,505,107       1,936,466       2,065,623       191,270  
Assets under concession (“Rights to use airport facilities” under Mexican FRS)
                    961,488       922,763       884,257       81,879  
Total assets
                    4,559,823       5,031,382       5,296,007       490,394  
Current liabilities
                    148,834       178,171       196,458       18,191  
Total liabilities
                    197,268       232,065       255,064       23,618  
Total stockholders’ equity(14)
                    4,362,556       4,799,317       5,040,943       466,756  
Other data:
                                               
Mexican FRS:
                                               
Net resources generated by operating activities
    566,109       504,891       588,852       675,994       702,676       65,066  
Net resources used in financing activities
                                    (310,783 )     (28,777 )
Net resources used in investing activities
    (202,336 )     (375,053 )     (268,830 )     (282,882 )     (424,285 )     (39,287 )
Increase in cash and cash equivalents
    363,773       129,838       320,019       393,112       (32,392 )     (2,998 )
U.S. GAAP:(15)
                                               
Net cash provided by operating activities
                    584,259       667,642       668,956       61,943  
Net cash used in investing activities
                    (268,718 )     (275,719 )     (441,660 )     (40,896 )
Net cash used in financing activities
                                    (310,782 )     (28,776 )
Effect of inflation accounting
                    4,477       1,189       51,094       4,731  
Increase in cash and cash equivalents
                    320,018       393,112       32,392       2,998  
 
(1)   Translated into dollars at the rate of Ps.10.7995 per U.S. dollar, the U.S. Federal Reserve noon buying rate for Mexican pesos at December 31, 2006. Per share dollar amounts are expressed in dollars (not thousands of dollars). Operating data is expressed in units indicated.
 
(2)   Revenues from aeronautical services principally consist of a fee for each departing passenger, aircraft landing fees based on the aircraft’s weight and arrival time, an aircraft parking fee, a fee for the transfer of passengers from the aircraft to the terminal building, a security charge for each departing passenger and other sources of revenues subject to regulation under our maximum rates.
 
(3)   Revenues from non-aeronautical services consist of sources of revenues not subject to regulation under our maximum rates, and consist of revenues from car parking charges, leasing of commercial space to tenants, advertising, taxis and other ground transportation providers and other miscellaneous sources of revenues. Pursuant to our concessions and to the Airport Law and the regulations thereunder, parking services are currently excluded from aeronautical services under our maximum rates, although the Ministry of Communications and Transportation could decide to regulate such rates and they may be regulated by other authorities.
 
(4)   On January 1, 2001, we began paying SETA a technical assistance fee under the technical assistance agreement entered into in connection with SETA’s purchase of its Series BB shares. This fee is described in “Item 7. Major Shareholders and Related Party Transaction – Related Party Transactions – Arrangements with SETA.”
 
(5)   Each of our subsidiary concession holders is required to pay a concession tax to the Mexican government under the Mexican Federal Duties Law for the use of public domain assets pursuant to the terms of its concession. The concession tax is currently equal to 5% of each concession holder’s gross annual revenues.
 
(6)   Reflects depreciation of fixed assets.
 
(7)   Reflects amortization of airport concessions and rights to use airport facilities.
 
(8)   For Mexican FRS purposes, based on 392,000,000 weighted average common shares outstanding in 2002 through 2005 and 395,173,149 weighted average common shares outstanding in 2006. For U.S. GAAP purposes, based on 389,060,000 weighted average common shares outstanding in 2004 and 2005, and 391,624,384 weighted average common shares outstanding in 2006. Earnings per ADS is based on the ratio of 8 Series B shares per ADS.
 
(9)   Determined by giving effect to (i) SETA’s exercise, on September 5, 2006, of its option to subscribe for 8,000,000 newly issued Series B shares at an exercise price of U.S.$1.35 (Ps.14.16735) per share and (ii) the increase in the number of shares necessary to be issued in order to be able to replace the capital in excess of the earnings being withdrawn under the dividend paid in September 2006. For purposes of pro forma presentation, these 8,000,000 newly issued Series B shares are included in basic earnings per share.
 
(10)   Based on 392,000,000, 392,022,615 and 394,564,384 weighted average common shares and common share equivalents outstanding for the year ended December 31, 2004, 2005 and 2006, respectively. Earnings per ADS is based on the ratio of 8 Series B shares per ADS.
 
(11)   Includes arriving and departing passengers as well as transfer passengers (passengers who arrive at our airports on one aircraft and depart on a different aircraft). Excludes transit passengers (passengers who arrive at our airports but generally depart without changing aircraft).
 
(12)   Total revenues for the period divided by terminal passengers for the period. Expressed in pesos (not thousands of pesos).
 
(13)   EBITDA represents net income minus net comprehensive financing income plus income taxes, asset tax, statutory employee profit sharing and depreciation and amortization. EBITDA should not be considered as an alternative to net income, as an indicator of our operating performance, or as an alternative to cash flow as an indicator of liquidity. Our management believes that EBITDA provides a useful measure of our performance that is widely used by investors to evaluate our performance and compare it with other companies. In making such comparisons, however, Investors should bear in mind that EBITDA is not defined and is not a recognized financial measure under Mexican FRS or U.S. GAAP and that it may be calculated differently by different companies. EBITDA as presented in this table is not equivalent to our operating income (prior to deducting depreciation and amortization and the technical assistance fee), which is used as the basis for calculation of our technical assistance fee.
 
(14)   Total stockholders’ equity under Mexican FRS reflects the value assigned to our concessions. Under U.S. GAAP, no value has been assigned to our concessions.
 
(15)   U.S. GAAP cash flow data is expressed in nominal Mexican pesos.

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EXCHANGE RATES
     The following table sets forth, for the periods indicated, the high, low, average and period-end, free-market exchange rate expressed in pesos per U.S. dollar. The average annual rates presented in the following table were calculated using the average of the exchange rates on the last day of each month during the relevant period. The data provided in this table is based on noon buying rates published by the Federal Reserve Bank of New York for cable transfers in Mexican pesos. We have not restated the rates in constant currency units. All amounts are stated in pesos. We make no representation that the Mexican peso amounts referred to in this annual report could have been or could be converted into U.S. dollars at any particular rate or at all.
                                 
    Exchange Rate
Year Ended December 31,   High   Low   Period End   Average(1)
2002
    10.43       9.00       10.43       9.75  
 
                               
2003
    11.40       10.11       11.24       10.79  
 
                               
2004
    11.64       10.81       11.15       11.31  
 
                               
2005
    11.41       10.41       10.63       10.88  
 
                               
2006
    11.46       10.43       10.80       10.91  
 
                               
December 2006
    10.99       10.77       10.80       10.85  
 
                               
2007:
                               
 
                               
January 2007
    11.09       10.77       11.04       10.96  
February 2007
    11.16       10.92       11.16       11.00  
March 2007
    11.18       11.01       11.04       11.11  
April 2007
    11.03       10.92       10.93       10.98  
May 2007
    10.93       10.74       10.74       10.82  
 
(1)   Average of month-end rates or daily rates, as applicable.
Source: Federal Reserve noon buying rate.
     Except for the period from September through December 1982, during a liquidity crisis, the Mexican Central Bank has consistently made foreign currency available to Mexican private-sector entities (such as us) to meet their foreign currency obligations. Nevertheless, in the event of renewed shortages of foreign currency, there can be no assurance that foreign currency would continue to be available to private-sector companies or that foreign currency needed by us to service foreign currency obligations or to import goods could be purchased in the open market without substantial additional cost.
     Fluctuations in the exchange rate between the peso and the U.S. dollar will affect the U.S. dollar value of securities traded on the Mexican Stock Exchange, and, as a result, will likely affect the market price of the ADSs. Such fluctuations will also affect the U.S. dollar conversion by the depositary of any cash dividends paid in pesos.
     On December 31, 2006, the Federal Reserve noon buying rate was Ps. 10.80 per U.S.$1.00. On June 28, 2007, the Federal Reserve noon buying rate was Ps. 10.79 per U.S. $1.00.
     For a discussion of the effects of fluctuations in the exchange rates between the peso and the U.S. dollar, see “Item 10. Additional Information—Exchange Controls.”

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RISK FACTORS
Risks Related to the Regulation of Our Business
We provide a public service regulated by the Mexican government and our flexibility in managing our aeronautical activities is limited by the regulatory environment in which we operate.
     Our aeronautical fees charged to airlines and passengers are regulated, like most airports in other countries. In 2004, 2005 and 2006, approximately 81.2%, 80.6% and 81.3%, respectively, of our total revenues were earned from regulated services, which are subject to price regulation under our maximum rates. These regulations may limit our flexibility in operating our aeronautical activities, which could have a material adverse effect on our business, results of operations, prospects and financial condition. In addition, several of the regulations applicable to our operations that affect our profitability are authorized (as in the case of our master development programs) or established (as in the case of our maximum rates) by the Ministry of Communications and Transportation for five-year terms. Except under limited circumstances, we generally do not have the ability to unilaterally change our obligations (such as the investment obligations under our master development programs or the obligation under our concessions to provide a public service) or increase our maximum rates applicable under those regulations should the passenger traffic or other assumptions on which the regulations were based change during the applicable term. In addition, there can be no assurance that this price regulation system will not be amended in a manner that would cause additional sources of our revenues to be regulated.
We cannot predict how the regulations governing our business will be applied.
     Many of the laws, regulations and instruments that regulate our business were adopted or became effective in 1999, and there is only a limited history that would allow us to predict the impact of these legal requirements on our future operations. In addition, although Mexican law establishes ranges of sanctions that might be imposed should we fail to comply with the terms of one of our concessions, the Mexican Airport Law (Ley de Aeropuertos) and its regulations or other applicable law, we cannot predict the sanctions that are likely to be assessed for a given violation within these ranges. We cannot assure that we will not encounter difficulties in complying with these laws, regulations and instruments. Moreover, there can be no assurance that the laws and regulations governing our business, including the rate-setting process and the Mexican Airport Law, will not change in the future.
The regulations pursuant to which the maximum rates applicable to our aeronautical revenues are established do not guarantee that our consolidated results of operations, or that the results of operations of any airport, will be profitable.
     The regulations applicable to our 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 we may earn at that airport from services subject to price regulation. The maximum rates for our airports have been determined by the Ministry of Communications and Transportation for each year through December 31, 2010. In December 2005, the Ministry of Communications and Transportation determined, based on the terms of our concessions, the maximum rates for our airports from January 1, 2006 through December 31, 2010. Under the terms of our concessions, there is no guarantee that the results of operations of any airport will be profitable.
     Our concessions provide that an airport’s maximum rates will be adjusted periodically for inflation (determined by reference to the Mexican producer price index, excluding petroleum). Although we are 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

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development programs, decreases in capital investments attributable to Mexican economy-related passenger traffic decreases or modifications of the concession tax payable by us to the Mexican government, our concessions provide that such a request will be approved only if the Ministry of Communications and Transportation determines that certain limited events specified in our concessions have occurred. Therefore, there can be no assurance that any such request would be granted. If a request to increase an airport’s maximum rates is not granted, our results of operations and financial condition could be adversely affected, and the value of Series B shares and ADSs could decline.
If we exceed the maximum rate at any airport at the end of any year, we could be subject to sanctions.
     Historically, we have set the prices we charge 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 2006, our revenues subject to maximum rate regulation represented approximately 90.2% of the amounts we were entitled to earn under the maximum rates for all of our airports. There can be no assurance that we will be able to establish prices in the future that allow us to collect substantially all of the revenue we are entitled to earn from services subject to price regulation.
     The specific prices we charge for aeronautical services are determined based on various factors, including projections of passenger traffic volumes, the Mexican producer price index (excluding petroleum) and the value of the peso relative to the U.S. dollar. These variables are outside of our control. Our projections could differ from the applicable actual data, and, if these differences occur at the end of any year, they could cause us to exceed the maximum rate at any one or more of ours airports during that year.
     If we exceed the maximum rate at any airport at the end of any year, the Ministry of 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 our concessions is terminated, our other concessions may also be terminated.
The Mexican government may terminate or reacquire our concessions under various circumstances, some of which are beyond our control.
     Our concessions are our principal assets, and we would be unable to continue operations without them. A concession may be revoked by the Mexican government for certain prescribed reasons, including failure to comply with our master development programs, a temporary or permanent halt in our operations, actions affecting the operations of other concession holders in Mexico, failure to pay damages resulting from our operations, exceeding our maximum rates or failure to comply with any other material term of our 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 violation of the relevant term at least three times. Violations of other terms of a concession can result in the immediate termination of the concession. Our concessions may also be terminated upon our bankruptcy or insolvency. In the event that any one of our concessions is terminated, our 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.”
     We would face similar sanctions for violations of the Mexican Airport Law or its regulations. Under applicable Mexican law and the terms of our concessions, our concessions may also be made subject to additional conditions, including under our renewed master development programs, which we

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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 our 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 us to implement certain changes in our operations. In the event of a reversion of the public domain assets that are the subject of our concessions, the Mexican government under Mexican law is required to compensate us 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 our operations, the cost of that change. Similarly, in the event of an assumption of our operations, other than in the event of war, the government is required to compensate us and any other affected parties for any resulting damages. There can be no assurance that we would receive compensation equivalent to the value of our investment in or any additional damages related to our concessions and related assets in the event of such action.
     In the event that any one of our concessions is terminated, whether through revocation or otherwise, our other concessions may also be terminated. Thus, the loss of any concession would have a material adverse effect on our business and results of operations.
The Mexican government could grant new concessions that compete with our airports.
     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 our airports. In the future, we also 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 flights. Recently, the state of Nuevo Leon has approached the Ministry of Communications and Transportation to discuss the possibility of amending Aeropuerto del Norte’s concession to allow it to serve commercial aviation flights. We understand that Aeropuerto del Norte is not capable of accommodating commercial traffic with its current infrastructure. To date, the Ministry of Communications and Transportation has not amended Aeropuerto del Norte’s concession. However, there can be no assurance that the Ministry of Communications and Transportation will not authorize such an amendment and that commercial aviation flights will not operate from Aeropuerto del Norte in the future.
     Any competition from other such airports could have a material adverse effect on our business and results of operations. 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, we cannot assure that we would participate in such process, or that we would be successful if we were to participate. Please see “Item 4. Information on the Company—Regulatory Framework—Grants of New Concessions” below.
Risks Related to Our Operations
Our revenues are highly dependent on levels of air traffic, which depend in part on factors beyond our control.
     Our revenues are closely linked to passenger and cargo traffic volumes and 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. Passenger and cargo traffic volumes and air traffic movements depend in part on many factors beyond our control, including

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economic conditions in Mexico and the United States, the political situation in Mexico and elsewhere in the world, the attractiveness of our airports relative to that of other competing airports, fluctuations in petroleum prices (which can have a negative impact on traffic as a result of fuel surcharges or other measures adopted by airlines in response to increased fuel costs) and changes in regulatory policies applicable to the aviation industry. Any decreases in air traffic to or from our airports as a result of factors such as these could adversely affect our business, results of operations, prospects and financial condition.
Terrorist attacks have had a severe impact on the international air travel industry and have adversely affected our business and may continue to do so in the future.
     As with all airport operators, we are subject to the threat of terrorist attacks. The terrorist attacks on the United States on September 11, 2001 had a severe adverse impact on the air travel industry, particularly on U.S. carriers and on carriers operating international service to and from the United States. Airline traffic in the United States fell precipitously after the attacks. Our terminal passenger volumes declined 5.8% in 2002 as compared to 2001. In the event of a terrorist attack involving one of our airports directly, airport operations would be disrupted or suspended during the time necessary to conduct rescue operations, investigate the incident and repair or rebuild damaged or destroyed facilities, and our future insurance premiums would likely increase. In addition, our insurance policies do not cover all losses and liabilities resulting from terrorism. Any future terrorist’s attacks, whether or not involving aircraft, will likely adversely affect our business, results of operations, prospects and financial condition.
     Because a substantial majority of our international flights involve travel to the United States, we may be required to comply with security directives of the U.S. Federal Aviation Authority, in addition to the directives of Mexican aviation authorities. Security measures taken to comply with future security directives or in response to a terrorist attack or threat could reduce passenger capacity at our airports due to increased passenger screening and slower security checkpoints and increase our operating costs, which would have an adverse effect on our results of operations.
International events could have a negative impact on international air travel.
     Historically, a substantial majority of our revenues have been derived from aeronautical services, and our principal source of aeronautical services revenues is passenger charges. Passenger charges are payable for each passenger (other than diplomats, infants, transfer and transit passengers) departing from the airport terminals we operate, collected by the airlines and paid to us. In 2004, 2005 and 2006, passenger charges represented 56.0%, 56.6% and 59.4%, respectively, of our total revenues. Events such as the war in Iraq and public health crises such as the Severe Acute Respiratory Syndrome, or SARS, crisis have negatively affected the frequency and pattern of air travel worldwide. Because our revenues are largely dependent on the level of passenger traffic in our airports, any general increase of hostilities relating to reprisals against terrorist organizations, further conflict in the Middle East, outbreaks of health epidemics such as SARS or other events of general international concern (and any related economic impact of such events) could result in decreased passenger traffic and increased costs to the air travel industry and, as a result, could cause a material adverse effect on our business, results of operations, prospects and financial condition.
Increases in international petroleum prices could reduce demand for air travel.
     International prices of fuel, which represent a significant cost for airlines using our airports, have increased in recent years and may be subject to further increases resulting from any future terrorist attacks, a general increase in international hostilities or a reduction in output of petroleum, voluntary or otherwise, by oil-producing countries. Such increases in airlines’ costs have resulted in higher airline

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ticket prices and may decrease demand for air travel, thereby having an adverse effect on our revenues and results of operations.
Our revenues and profitability may not increase if we fail in our business strategy.
     Our ability to increase revenue and profitability will depend in part on our business strategy, which consists of increasing passenger and cargo traffic at our airports and increasing revenue from commercial activities.
     Our ability to increase commercial revenue is, among other factors, significantly dependent upon increasing passenger traffic at our airports. We cannot assure investors that we will be successful in implementing our strategy of increasing our passenger traffic or revenues from commercial activities. The passenger traffic volume in our 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 our airports will increase.
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 our 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 Puerto Rico, Florida, Cuba, Jamaica, the Dominican Republic and other Caribbean islands and destinations in Central America. The attractiveness of the destinations we serve are also likely to be affected by perceptions of travelers as to the safety and political and social stability of Mexico. There can be no assurance that tourism levels, and therefore the number of passengers using our airports, in the future will match or exceed 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 four of our airports and could be adversely impacted by any condition affecting those airports.
     In 2006, approximately 67.2% of our revenues were generated from four of our 13 airports. In particular, the Monterrey International Airport generates the most significant portion of our revenues. The following table lists the percentage of total revenues generated at our airports for the periods indicated:
                 
    For year ended   For year ended
    December 31,   December 31,
Airport   2005   2006
Monterrey International Airport
    43.5 %     44.2 %
Acapulco International Airport
    8.6       8.6  
Mazatlán International Airport
    8.2       7.6  
Culiacán International Airport
    6.9       6.8  
Nine other airports
    32.8       32.8  
 
               
Total
    100.0 %     100.0 %
 
               

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     As a result of the substantial contribution to our revenues from these four airports, any event or condition affecting these principal airports could have a material adverse effect on our business, results of operations, prospects and financial condition.
If a change in relations with our labor force should occur, such a change could have an adverse impact on our results of operations.
     Although we believe we currently maintain good relations with our labor force, if any conflicts with our employees were to arise in the future, including with our unionized employees (which accounted for 59% of our total employees as of December 31, 2006), resulting events such as strikes or other disruptions that could arise with respect to our workforce could have a negative impact on our results of operations.
Our operations may be affected by union activities.
     Our unionized employees (which accounted for 59% of our total employees as of December 31, 2006) are represented by a national union of airport workers that operates throughout Mexico. To the extent that any unionized airport workers throughout the country successfully negotiate different employment terms than those we offer at our airports, our operations could be adversely affected by union activities, including organized strikes or other work stoppages. In addition, we could be required to increase our labor expenses to match the terms agreed by the union with other Mexican airport operations.
The loss of or suspension of operations of one or more of our key customers could result in a loss of a significant amount of our revenues.
     Of the total revenues generated at our airports in 2006, Aeroméxico and its affiliates accounted for 16.9%, Mexicana and its affiliates accounted for 10.3% and Aviacsa and its affiliates represented 9.6%. Through December 2005, Aeroméxico, Mexicana and their respective affiliates were owned by Cintra, a Mexican holding company controlled by the Mexican government. In December 2005, Cintra sold its interest in Mexicana and its affiliates to Grupo Posadas, S.A. de C.V. Subsequent to this sale, Cintra was renamed Consorcio Aeroméxico, S.A. de C.V., or Consorcio Aeroméxico. None of our contracts with our airline customers obligate them to continue providing service to our airports, and we can offer no assurance that, if any of our key customers reduced their use of our airports, competing airlines would add flights to their schedules to replace any flights no longer handled by our principal airline customers. In addition, the Mexican Government, through Nacional Financiera, S.N.C., or NAFIN (a Mexican national credit institution and development bank owned and controlled by the Mexican Government), and IPAB (Instituto para la Protección al Ahorro Bancario) has announced publicly that it intends to sell all or a portion of its remaining ownership interest in Aeroméxico and its affiliates, and we can offer no assurance that these airlines, operating independently of Consorcio Aeroméxico, would continue to use any or all of our airports. Our business and results of operations could be adversely affected if we do not continue to generate comparable portions of our revenue from our key customers.
     In April 2006, Mexican regulatory authorities suspended the operations of Aerocalifornia, S.A. de C.V. or Aerocalifornia, which accounted for approximately 7.1% of our revenues in 2005, due to safety concerns relating to the carrier’s fleet of aircraft. Although Aerocalifornia resumed limited operations in August 2006, it accounted for only 2.6% of our revenues in 2006 as a result of such suspension. On March 26, 2007, the Mexican regulatory authorities announced an immediate suspension of Líneas Aéreas Azteca S.A. de C.V. or Azteca, which accounted for approximately 3.6% of our revenues in 2006, due to safety concerns and financial problems. We cannot guarantee whether or not Azteca will resume operations at the end of such suspension period or whether the suspension will have a material effect on

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our results from operations for 2007. Any similar suspension affecting our principal airline customers could have a material adverse effect on our results of operations.
Revenues from passenger charges are not secured, and we may not be able to collect amounts invoiced in the event of the insolvency of one of our principal airline customers.
     In recent years, many airlines have reported substantial losses. Our revenues from passenger charges from our principal airline customers are not secured by a bond or any other collateral. Thus, in the event of the insolvency of any of these airlines, we would not be assured of collecting any amounts invoiced to that airline in respect of passenger charges.
The principal domestic airlines operating at our airports have in the past refused to pay certain increases in our specific prices for regulated aeronautical services and could refuse to pay additional increases in the future.
     From January 2002 to November 2002, several domestic airlines operating at our 13 airports—Aeroméxico, Mexicana, Aeromar and Aerolitoral—refused to pay certain increases in our airport service charges. As of December 2002, the amount of invoiced fees subject to dispute was Ps.3.7 million. As part of this dispute, these airlines brought proceedings challenging the privatization of the Mexican airport sector and the methodology for calculating the maximum rate system applicable under the privatization of all of the airport groups in Mexico.
     Subsequently, we entered into an agreement with the National Air Transportation Chamber of Commerce (Cámara Nacional de Aerotransportes) and the Ministry of Communications and Transportation pursuant to which we settled existing disputes with our principal airline customers and established specific prices for regulated aeronautical services applicable to those airlines. Under the agreement, the National Air Transportation Chamber of Commerce agreed to cause our principal airline customers to enter into (a) contracts governing charges for certain aeronautical services and (b) lease contracts for property used by the airlines. Although our agreement with the National Air Transportation Chamber of Commerce expired in December 2005, we continued to charge our principal airline customers in accordance with the terms of the agreement until October 31, 2006, at which time we entered into a new agreement with the National Air Transportation Chamber of Commerce that offers incentives, including discounts, for the establishment of new routes and other measures expected to increase passenger traffic volume at our airports.
     Although passenger traffic volume (and therefore overall revenue) may increase, these incentives and discounts 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.
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 and airlines. We also depend upon the Mexican government or entities of the government for provision of services, such as electricity, supply of fuel to aircraft, air traffic control and immigration and customs services for our international passengers. 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.

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     In addition, we depend on third-party providers of certain complementary services such as catering and baggage handling. For example, Grupo Aeroméxico and Grupo Mexicana together control Servicios de Apoyo en Tierra, or SEAT, pursuant to a joint venture. Consorcio Aeroméxico, which owns Grupo Aeroméxico and, until recently, owned Grupo Mexicana, has announced publicly that it intends to sell its remaining ownership interest in SEAT separately from the proposed sale of its ownership interest in Grupo Aeroméxico and its sale of Grupo Mexicana. SEAT is currently the largest provider of baggage and handling services at our airports. If these service providers, including SEAT, were to halt operations at any of our airports, we would be required to seek a new provider of these services or provide these services ourselves, either of which is likely to result in increased costs and have an adverse impact on our results of operations.
Actions by parties purporting to be former owners of land comprising a portion of the Ciudad Juárez International Airport could cause our concession to operate the airport to be invalid.
     Parties purporting to be former owners of land comprising a portion of the Ciudad Juárez International Airport initiated legal proceedings against the airport to reclaim the land, 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. On May 18, 2005 a Mexican court ordered us to return the disputed land to the plaintiffs. An appellate court recently vacated the May 18, 2005 court order, nullified the underlying legal proceeding and dismissed the plaintiffs’ claim without prejudice. The appellate decision was based upon Mexican constitutional provisions and the terms of our concessions. On November 28, 2006, against the appellate court order, the plaintiffs filed a new appellate proceeding or juicio de amparo, which is pending resolution. In the event that any subsequent action results in a decision substantially similar to the May 18, 2005 court order or otherwise adverse to us, and the Mexican government does not subsequently exercise its power of eminent domain to retake possession of the land for our use, which we believe the terms of our concessions would require, our concession to operate the Ciudad Juárez International Airport would terminate. In 2006, the Ciudad Juárez International Airport represented 5.4% of our revenue. Although we believe and have been advised by the Ministry of Communications and Transportation that under the terms of our concessions the termination of our Ciudad Juárez concession would not affect the validity of our remaining airport concessions and that the Mexican federal government would be obligated to indemnify us against any monetary or other damages resulting from the termination of our Ciudad Juárez concession or a definitive resolution of the matter in favor of the plaintiffs, there can be no assurance that we would be so indemnified.
We may be liable for property taxes as a result of claims asserted against us by certain municipalities.
     Administrative law proceedings have been asserted against us by the municipalities of Chihuahua, Ciudad Juárez, Reynosa, Tampico, Mazatlán and Zihuatanejo for the payment of property taxes with respect to the real property on which we operate our airports in those cities. The claims in respect of the Chihuahua and Ciudad Juárez airports have been dismissed, although we expects the municipalities of Chihuahua and Ciudad Juárez to assert amended claims. The total amount of the property-tax claims outstanding, as recently updated to reflect additional amounts claimed since the proceedings were first asserted, in each of Reynosa, Tampico, Mazatlan and Zihuatanejo are Ps.59.5 million, Ps.1.02 million, Ps.2.5 million and Ps.10.2 million, respectively, although any of these amounts could increase if the underlying claims are not resolved in our favor. Moreover, other municipalities where we operate our airports could assert similar claims.
     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; because, should a court determine that these taxes must be paid in response to any future proceedings, we believe that only the owner of the land should be responsible for paying these

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taxes directly, and the obligation to pay these taxes is not otherwise contemplated in the terms of our concessions. The Mexican government has not acknowledged any obligation to pay such taxes, however, and 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 take effect, and any amounts owed were substantial, these tax liabilities could have a materially adverse effect on our financial condition or results of operations. If we believe that there is a substantial likelihood of an adverse result in a pending case, we will establish reserves to meet such liabilities consistent with Mexican FRS.
     Other Mexican airport operators contesting the assessment of similar property tax claims have been required to post 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.
Natural disasters could adversely affect our business.
     From time to time, the Northern and Central regions of Mexico experience torrential rains and hurricanes (particularly during the months of July through September), as well as earthquakes. The most recent natural event to affect our airports was Hurricane Emily in July 2005, which resulted in the cancellation of several flights to and from the Monterrey International Airport and minor damage to the Reynosa and Tampico International Airports. In addition, the Acapulco International Airport is susceptible to occasional flooding due to torrential rainfall. Natural disasters may impede operations, damage infrastructure necessary to our operations or adversely affect the destinations served by its airports. Any of these events could reduce our passenger and cargo traffic volume. The occurrence of natural disasters in the destinations we serve could adversely affect our business, results of operations, prospects and financial condition. We have insured the physical facilities at our airports against damage caused by natural disasters, accidents or other similar events, but do not have insurance covering losses due to resulting business interruption. Moreover, should losses occur, there can be no assurance that losses caused by damages to the physical facilities will not exceed the pre-established limits on any of our insurance policies.
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 Mazatlán and Zihuatanejo International Airports, have only one commercial aviation runway. While we seek to keep our runways in good working owrder and to conduct scheduled maintenance during off peak hours, we cannot assure investors that the operation of our runways will not 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 expenses 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.

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We are exposed to certain risks inherently associated with the rental of real property.
     We are exposed to risks generally associated with ownership of properties rented to third parties, such as a decline in rental market demand, occupancy rates or rent levels, non-payment by tenants or a weakening of the real estate market. Moreover, our real estate assets are located on or adjacent to our airports and serve a particular sector of the rental market, thus exposing us to fluctuations in this specific market. Any of these risks could adversely affect the profitability of our real estate development activities and, consequently, our business results of operations, prospects and financial position.
We are exposed to the risk of non-performance by our subcontractors.
     We subcontract certain services (including security and surveillance services, ramp handling and baggage handling services and checked baggage 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 results of operations.
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 its 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 International 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, we can offer no assurance that our insurance policies would cover all of our liabilities in the event of an accident, terrorist attack or 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.
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 International Civil Aviation Organization 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 its airports are developed by third parties in a manner that encroaches on the required perimeters, our ability to comply with applicable guidelines of the International Civil Aviation Organization or to expand our airport operations could be adversely affected.

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Changes in Mexican environmental regulations could limit the growth of certain of our airports.
     Several of our airports, such as the Ciudad Juárez, Tampico and Torreón International Airports, are located in densely populated urban areas, which are subject to more restrictive environmental regulations than less populated areas of Mexico. Should environmental regulators adopt a more restrictive regulatory framework in any of these areas (such as limitations on noise pollution), our ability to expand these airports to meet growth in demand could be limited, which could adversely affect our results of operations. Furthermore, compliance with future environmental regulations may require us to incur additional costs in order to bring our airports into compliance, and if we fail to comply with current or future environmental regulations, we may be subject to fines and other sanctions.
We are liable under Mexican Law for inspection of passengers and their carry-on luggage.
     Under Mexican Airport Law (Ley de Aeropuertos) we are currently responsible for inspecting passengers and their carry-on luggage before they board aircraft. Under Mexican law, we may be liable to third parties for personal injury or property damage resulting from the performance of such inspection. In addition, we may be required to adopt additional security measures in the future or undertake capital expenditures if security measures for carry-on luggage are required to be enhanced, which could increase our liability or adversely affect our operating results.
We may be subject to potential liability for screening checked baggage.
     The International Civil Aviation Organization recently 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. Although the Mexican federal government has yet to adopt the new baggage screening guidelines into the Mexican Civil Aviation Law (Ley de Aviación Civil), we expect that Mexican law will require airlines to comply with these guidelines in the near future. We are currently negotiating with our principal airline customers to enter into service agreements pursuant to which we expect to agree to purchase, install and operate new screening equipment and implement other security measures to facilitate our airline customers’ compliance with the new baggage screening guidelines. Until we agree on the contractual terms with the airlines and the new screening equipment becomes operational, checked baggage will continue to be screened by hand by each airline in order to comply with the new screening guidelines. In some countries, such as the United States of America, the federal government (in the case of the United States, through the Transportation Security Administration) is responsible for screening checked baggage. Under Mexican law, however, airlines are responsible for screening checked baggage. Although Mexican law holds airlines liable for screening checked baggage, the purchase, installation and operation of the new 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 subject to potential liability, if Mexican law changes in the future.
Enforcing civil liabilities against us or our directors, officers and controlling persons may be difficult.
     We are organized under the laws of Mexico, and 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.

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Risks Related to Our Stockholders
Aeroinvest and SETA control our management, and their interests may differ from those of other stockholders.
Aeroinvest, S.A. de C.V. (Aeroinvest) is the beneficial owner of 48.48% of our capital stock. Aeroinvest directly owns Series B shares representing 36.04% of our outstanding capital stock and Series A shares of SETA representing 74.5% of its capital stock. SETA in turn owns Series BB shares and Series B shares that collectively represent 16.7% of our capital stock. Pursuant to our bylaws, SETA (as holder of our Series BB shares) has the right to present to the 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 stockholders (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. In the event of the termination of the Technical Assistance Agreement, the Series BB shares would be converted into Series B shares, resulting in the termination of all of SETA’s special rights. If at any time before June 14, 2015 SETA were to hold less than 7.65% of our capital stock in the form of Series BB shares, it would lose its veto rights (but its other special rights would be unaffected). If at any time after June 14, 2015 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. As long as SETA retains at least 7.65% of our capital stock in the form of Series BB shares, whether before or after June 14, 2015, all of its special rights will remain in place. Pursuant to our bylaws, the Technical Assistance Agreement, the Participation Agreement and the Bancomext Trust, SETA is required to retain at least 51% of its Series BB shares until June 14, 2007, after which it is entitled to transfer up to one eighth of such 51% during each year thereafter. The rights and obligations of SETA in our management are explained in “Item 7. Major Shareholders and Related Party Transactions – Major Shareholders.”

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So long as the technical assistance agreement remains in effect and SETA continues to hold any Series BB shares, SETA also has the obligation to appoint and nominate the same directors and officers that it currently is entitled to appoint under our bylaws. The technical assistance agreement sets forth certain qualifications that members of our management appointed by SETA must have. The technical assistance agreement will remain in effect until June 14, 2015, after which it will be automatically extended for successive five-year periods unless any party thereto elects otherwise.
SETA’s continuing veto rights as holder of at least 7.65% of our capital stock in the form of Series BB shares, and its right to nominate and appoint certain directors and officers as holder of Series BB shares until June 14, 2015, will continue for so long as it owns at least one Series BB share and the technical assistance agreement remains in effect, could adversely impact our operations and constitute an obstacle for us to bring in a new strategic stockholder and/or operator. Through the right to nominate, appoint and remove certain members of our senior management, SETA directs the actions of our management in areas such as business strategy, financing, distributions, acquisitions and dispositions of assets or businesses.
In addition to these special rights of SETA, Aeroinvest is entitled under Mexican law to elect one director to our board for each 10% of our capital stock that it owns. Thus, Aeroinvest’s ownership of 36.04% of our capital stock entitles it to elect three members of our board of directors. SETA and Aeroinvest are each subsidiaries of Empresas ICA.
The interests of SETA and Aeroinvest may differ from those of our other stockholders and be contrary to the preferences and expectations of our other stockholders and we can offer no assurance that SETA and Aeroinvest and the officers nominated or appointed by SETA and Aeroinvest would exercise their rights in ways that favor the interests of our other stockholders.
If SETA or Aeroinvest, our principal stockholders, should sell or otherwise transfer all or a portion of their remaining interests in us, our operations could be adversely affected.
SETA and Aeroinvest currently exercise a substantial influence over our management, as described above. Our bylaws and certain of the agreements executed in connection with the privatization process provide that SETA is required to retain at least 51% of its Series BB shares until June 14, 2007, after which it is entitled to transfer up to one eighth of such 51% during each year thereafter. SETA, as holder of the Series BB shares, is entitled to present to the board of directors the name or names of the candidates for appointment as our chief executive officer and to appoint and remove half of our executive officers, which currently includes our chief financial officer, our chief operating officer and our commercial director, and to elect three of our board members. Elimination of these rights from our bylaws would require the consent of SETA for so long as it owns Series BB shares representing at least 7.65% of our capital stock. Should SETA fall below this threshold, our management could change significantly and our operations could be adversely affected as a result. In the event of termination of the technical assistance agreement, SETA would cease to have the special rights of the Series BB shares, which may adversely affect and disrupt our operations.
In addition, in December 2005, our parent company Aeroinvest entered into certain credit facilities to finance Aeroinvest’s acquisition from the Mexican government of the Series B shares currently representing 35.3% of our capital stock and to finance an additional loan to SETA for SETA’s exercise of the option to acquire 2% of our Series B shares. These credit facilities were amended and restated to, among other things, increase the amount of the facility and the amount borrowed thereunder in October 2006 and again in April 2007. Aeroinvest subsequently purchased additional Series B shares representing 0.74% of our capital stock in connection with our initial public offering in November 2006. Aeroinvest entered into agreements with Merrill Lynch, Pierce, Fenner & Smith Incorporated to refinance its existing credit facilities in June 2007. If Aeroinvest were to default on its obligations under the refinancing

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agreements, Aeroinvest could lose its ability to vote its shares of our capital stock as well as its shares of SETA, and trustee could in certain circumstances foreclose on the Series B shares and is SETA shares held in trust. The terms of the refinancing documents are described in “Item 5. Operating and Financial Review and Prospects – Liquidity and Capital Resources.” If Aeroinvest were to sell its Series B shares or lose its ability to vote its Series B shares, SETA and Aeroinvest may no longer control us, which could adversely affect our operations and result in a decrease in the price of our Series B shares and ADSs.
Our ability to make certain business decisions could be limited if Aeroinvest defaults on certain obligations under its refinancing facility.
     As mentioned above, Aeroinvest entered into agreements with Merrill Lynch, Pierce, Fenner & Smith Incorporated to refinance its existing credit facilities in June 2007. In connection therewith, Aeroinvest has assigned its economic interests (including its right to receive dividends) in its Series B Shares representing 36.04% of our capital stock as well as 74.5% of the Series A shares of SETA. Under the refinancing agreements, Aeroinvest is required to cause OMA to comply with numerous covenants, which include certain restrictions on our ability to create liens, incur indebtedness, sell, transfer or encumber assets, engage in merger transactions or otherwise change our business or make investments or capital expenditures outside of the master development plans. In addition, Aeroinvest is required to cause us to distribute all of our available cash, subject to certain limitations, as quarterly dividends in accordance with our dividend policy, and is required to restrict us from making certain changes to the divided policy. If we do not distribute a minimum required amount of dividends on each dividend payment date, Aeroinvest will be in default under the refinancing documents. If Aeroinvest defaults on its obligations under the refinancing documents, we would be further restricted in our ability create liens, incur indebtedness, sell, transfer or encumber assets, engage in merger transactions or otherwise change our business or make investments or capital expenditures outside of the master development plans, which could restrict our flexibility to capitalize on business opportunities or otherwise adversely affect our business and results of operations. In addition, Aeroinvest could lose its ability to vote its shares of our capital stock as well as its shares of SETA, and trustee could in certain circumstances foreclose on the Series B shares and is SETA shares held in trust. The terms of the refinancing documents are described in “Item 5. Operating and Financial Review and Prospects – Liquidity and Capital Resources.”
Risks Related to Mexico
Our business is significantly dependent upon the volume of air passenger traffic in Mexico, and negative economic developments in Mexico will adversely affect our business and results of operations.
     Domestic terminal passengers in recent years have represented approximately 76% of the passenger traffic volume in our airports. In addition, all of our assets are located, and all of our operations are conducted, in Mexico. Accordingly, our financial conditions and results of operations are substantially dependent on economic conditions prevailing from time to time in Mexico. As a result, our business, financial condition and results of operations could be adversely affected by the general condition of the Mexican economy, by a devaluation of the peso, by inflation and high interest rates in Mexico, or by political, social and economic developments in Mexico.
     Mexico has, particularly from 1982 to 1987, from December 1994 through 1995 and in 1998, experienced adverse economic conditions, including slow or negative economic growth and high levels of inflation. In addition, the economic crises in Asia and Russia and the financial turmoil in Argentina, Brazil, Venezuela and elsewhere produced greater volatility in the international financial markets, which further slowed Mexico’s economic growth.

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     Mexico’s GDP grew by 4.4% in 2004, 3.0% in 2005 and 4.8% in 2006. The annual rate of inflation, as measured by changes in the NCPI, was 5.2% for 2004, 3.3% for 2005 and 4.1% in 2006. Average interest rates on 28-day Mexican government treasury securities were 6.8% in 2004, 9.2% in 2005 and 7.2% in 2006.
     If the Mexican economy falls into a recession or if inflation and interest rates increase significantly, our business, results of operations, prospects and financial condition could suffer material adverse consequences because, among other things, demand for transportation services may decrease. We cannot assure you that similar events may not occur, or that any recurrence of these or similar events will not adversely affect our business, results of operations, prospects and financial condition.
Depreciation or fluctuation of the peso relative to the U.S. dollar could adversely affect our results of operations and our financial condition.
     Following the devaluation of the peso and the economic crisis beginning in 1994, the aggregate passenger traffic volume in our airports in 1995 (then operated by our predecessor) decreased as compared to prior years, reflecting a decrease in Mexican passenger traffic volume. Any future depreciation of the peso could reduce our domestic passenger traffic volume, which may have a material adverse effect on our results of operations.
     As of December 31, 2006, we had no significant indebtedness. Although we currently intend to fund the investments required by our business strategy through cash flow from operations, we may incur dollar-denominated debt to finance all or a portion of these investments. A devaluation of the peso would increase the debt service cost of any dollar-denominated indebtedness that we may incur and result in foreign exchange losses.
     Severe devaluation or depreciation of the peso may also result in the disruption of the international foreign exchange markets and may limit our ability to transfer or to convert pesos into U.S. dollars and other currencies.
Changes to Mexican laws, regulations and decrees applicable to us could have a material adverse impact on our results of operations.
     The Mexican government has in recent years implemented changes to the tax laws applicable to Mexican companies, including OMA. The terms of our concessions do not exempt us from any changes to the Mexican tax laws. Should the Mexican government implement changes to the tax laws that result in our having significantly higher income or asset tax liability, we will be required to pay the higher amounts due pursuant to any such changes, which could have a material adverse impact on our results of operations. In addition, changes to the Mexican constitution or to any other Mexican laws could also have a material adverse impact on our results of operations.
Developments in other countries may affect us.
     The market value of securities of Mexican companies 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 Russia, Brazil, Argentina and Venezuela.

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     In addition, in recent years, economic conditions in Mexico have become increasingly correlated to economic conditions in the United States. Therefore, adverse economic conditions in the United States could have a significant adverse effect on the Mexican economy. There can be no assurance that the market value of our securities will not be adversely affected by events elsewhere.
Our business could be adversely affected by a downturn in the U.S. economy.
     In 2006, 11.7% of the terminal passengers served by our airports arrived and departed on international flights, with the United States being the principal international destination and point of origin. As is the case with other Mexican companies, our business is 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. Events and conditions negatively affecting the U.S. economy will likely have a material adverse effect on our business, results of operations, prospects and financial condition.
     We cannot predict what effect any future terrorist attacks or threatened attacks on the United States or any retaliatory measures taken by the United States in response to these events may have on the U.S. economy. An economic downturn in the United States may negatively affect our results of operations and a prolonged economic crisis in the United States will likely have a material adverse effect on our results of operations.
Minority shareholders may be less able to enforce their rights against us, our directors, or our 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, because provisions concerning fiduciary duties of directors have only recently been incorporated into the new Mexican Securities Market Law, it may be difficult for minority shareholders to bring an action against directors for breach of this duty and achieve the same results as in most jurisdictions in the United States. The grounds for shareholder derivative actions under Mexican law are extremely limited, which effectively bars most of these kinds of suits in Mexico. Procedures for class action lawsuits do not exist under applicable Mexican law. Therefore, it may be more difficult for minority shareholders to enforce their rights against us, our directors, or our controlling shareholders than it would be for minority shareholders of a U.S. company.
We are subject to different corporate disclosure and accounting 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. In addition, we prepare our consolidated financial statements in accordance with Mexican FRS, which differ from U.S. GAAP in a number of respects. For example, we must incorporate the effects of inflation directly in their accounting records and published consolidated financial statements. While we are required to reconcile our net income and stockholders’ equity to those amounts that would be derived under U.S. GAAP in our annual financial statements, the effects of inflation accounting under Mexican FRS are not eliminated in such reconciliation in our annual financial statements. For this and other reasons, the presentation of Mexican FRS consolidated financial statements and reported earnings may differ from that of U.S. companies in this and other important respects. Please see Note 19 to our financial statements.

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FORWARD-LOOKING STATEMENTS
     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 Securities and Exchange Commission 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:
    projections of operating revenues, net income (loss), net income (loss) per share, capital expenditures, dividends, capital structure or other financial items or ratios,
 
    statements of our plans, objectives or goals,
 
    statements about our future economic performance or that of Mexico, and
 
    statements of assumptions underlying such statements.
     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 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 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.
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 OMA, is a corporation (sociedad anonima bursatil 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 “OMA”, “we” 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 Aeropuerto Internacional de Monterrey, Zona de Carga, Carretera Miguel Alemán, Km. 24 s/n, 66600 Apodaca, Nuevo León, Mexico, 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.

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Investment by Servicios de Tecnología Aeroportuaria, S.A. de C.V. and its Affiliates
     In 2000, as part of the first stage of our privatization, the Mexican government sold Series BB shares currently representing 14.7% of our capital stock to Servicios de Tecnología Aeroportuaria, S.A. de C.V., or SETA (formerly Operadora Mexicana de Aeropuertos, S.A. de C.V.), in a public bidding process. Pursuant to this transaction, SETA paid the Mexican government a total of Ps. 864,055,578 (nominal pesos, excluding interest) (U.S. $76 million based on the exchange rate in effect on the date of SETA’s bid) in exchange for:
    all of our Series BB shares, which currently represent 14.7% of our outstanding capital stock;
 
    an option to acquire from the Mexican government shares currently representing 35.3% of our capital stock (which subsequently was assigned to and exercised by Aeroinvest, S.A. de C.V., a principal shareholder of SETA);
 
    an option to subscribe for up to 3% of newly issued Series B shares (1% of which expired unexercised on June 14, 2005 and 2% of which was subscribed for in September 2006); and
 
    the right and obligation to enter into various agreements with us and the Mexican government, including a participation agreement setting forth the rights and obligations of each of the parties involved in the privatization (including SETA), a 15-year technical assistance agreement setting forth SETA’s right and obligation to provide technical assistance to us in exchange for an annual fee, and a shareholders’ agreement under terms established during the public bidding process. These agreements are described in greater detail under “Item 7. Principal Stockholders and Selling Stockholder” and “Related Party Transactions.”
     SETA’s current stockholders are:
    Aeroinvest, S.A. de C.V., which owns 74.5% of SETA. Aeroinvest is a wholly owned subsidiary of Empresas ICA, S.A.B. de C.V. Aeroinvest also directly owns 36.04% of our Series B shares as a result of its exercise of an option to acquire these shares from the Mexican government and its subsequent purchase of additional Series B shares representing 0.74% of our capital stock. Aeroinvest’s Series B shares were acquired in December 2005 from the Mexican government at an aggregate cost of U.S. $203.3 million (determined based on an initial price per share of U.S. $1.28 plus an annual 5% premium, subject to decreases corresponding to dividends declared and paid by us). Empresas ICA, the parent of Aeroinvest, is the largest engineering, construction and procurement company in Mexico. Empresas ICA’s principal lines of business are construction and engineering, housing and infrastructure operations, including the operation of airports (through SETA), toll roads and municipal services. Empresas ICA is listed on the Mexican Stock Exchange and the New York Stock Exchange. Through Aeroinvest, Empresas ICA controls a majority of our capital stock.
 
    Aéroports de Paris Management, S.A., which owns 25.5% of SETA. Aéroports de Paris Management is a wholly owned subsidiary of Aéroports de Paris, S.A., a French company recognized as a leading European airport group. For more than 40 years, Aéroports de Paris has operated the Charles de Gaulle and Orly airports in France, which processed 82.5

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      million passengers in 2006. Aéroports de Paris is listed on the Eurolist Market of Euronext Paris S.A.
     In December 2005, our parent company Aeroinvest entered into certain credit facilities to finance Aeroinvest’s acquisition from the Mexican government of the Series B shares currently representing 35.3% of our capital stock and to finance an additional loan to SETA for SETA’s exercise of the option to acquire 2% of our Series B shares. These credit facilities were amended and restated to, among other things, increase the amount of the facility and the amount borrowed thereunder in October 2006 and again in April 2007. Aeroinvest subsequently purchased additional Series B shares representing 0.74% of our capital stock. Aeroinvest entered into agreements with Merrill Lynch, Pierce, Fenner & Smith Incorporated to refinance its existing credit facilities in June 2007. In connection with the Merrill Lynch refinancing, Aeroinvest has assigned its economic interests (including its right to receive dividends) with respect to its Series B shares representing 36.04% of our capital stock as well as 74.5% of the Series A shares of SETA. The terms of the refinancing documents are described in “Item 5. Operating and Financial Review and Prospects — Liquidity and Capital Resources.” In addition, Aeroinvest and SETA have entered into an agreement with Nacional Financiera, S.N.C., or NAFIN, a Mexican national credit institution and development bank owned and controlled by the Mexican Government, pursuant to which Aeroinvest has agreed, if certain conditions to be agreed by the parties are met, on or after December 2010, to either (i) sell the Series B shares it owns representing 36.04% of our capital stock or (ii) deposit such Series B shares in a voting trust. The terms of this obligation are described more fully under “Item 5. Operating and Financial Review and Prospects — Liquidity and Capital Resources.”
     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 2006 amounted to approximately Ps. 47.7 million. This agreement is more fully described in “Item 7. Related Party Transactions.”
Initial Public Offering
     On November 29, 2006, a Mexican trust established by NAFIN, or the NAFIN Trust, acting pursuant to the instructions of the Mexican Ministry of Communications and Transportation, sold 48.02% of our outstanding capital stock through a global public offering of shares in the form of American Despositary Shares, or 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
     Every five years, we are required to submit to the Ministry of 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, expansion, modernization and maintenance plans, and detailed investment plan for the following five years. Each master development program is required to be updated and resubmitted for approval to the Ministry of 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 Communications and Transportation. In December 2005, the Ministry of Communications and Transportation approved the master development programs for each of our subsidiary concession holders for the 2006 to 2010 period. These five-year programs will be in effect from January 1, 2006 until December 31, 2010.

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     The following tables set forth our historical committed investments and capital expenditures for the periods indicated. Our capital expenditures have historically exceeded our committed investments pursuant to our master development programs, primarily due to capital expenditures intended to complement the minimum amounts required under our master development programs or that are otherwise necessary to accommodate the growth of our business. In addition, our master development programs include some commitments that are expensed rather than capitalized; thus, not all of our committed investments will constitute capital expenditures.
Historical Committed Investments Under Master Development Programs
                                 
    Year ended December 31,  
                            Total  
    2004     2005     2006(1)     2004-2006  
    (thousands of pesos)  
Acapulco
  Ps. 23,269     Ps. 9,904     Ps. 91,409     Ps. 124,582  
Ciudad Juárez
    24,652       24,095       43,774       92,521  
Culiacán
    9,666       7,320       58,248       73,234  
Chihuahua
    27,825       30,686       67,450       125,961  
Durango
    7,047       6,902       16,191       30,140  
Mazatlán
    7,331       4,965       84,645       96,941  
Monterrey
    13,582       47,956       295,425       356,963  
Reynosa
    3,054       16,110       17,433       36,597  
San Luis Potosí
    4,918       5,574       23,537       34,029  
Tampico
    4,468       2,429       37,810       44,707  
Torreón
    46,851       36,973       16,407       100,231  
Zacatecas
    11,450       3,440       15,822       30,712  
Zihuatanejo
    605       41,953       68,304       110,862  
 
                       
Total
  Ps. 178,679     Ps. 230,519     Ps. 836,454     Ps. 1,245,652  
 
                       
 
(1)   Amounts listed for 2006 include committed investments relating to the purchase, installation and operation of new baggage screening equipment, which are currently under discussion with the airlines that operate at our airports and the Mexican government. We expect to undertake these investments upon reaching an agreement with our principal airline customers and the Ministry of Communications and Transportation.
     The following table sets forth our historical capital expenditures, which reflect our actual expenditures (as compared to its committed investments, which are presented above) by airport for the periods indicated.
Historical Capital Expenditures by Airport
                         
    Year ended December 31,  
    2004     2005     2006  
    (thousands of pesos)  
Acapulco
  Ps. 33,776     Ps. 13,127     Ps. 27,826  
Ciudad Juárez
    15,530       25,401       20,780  
Culiacán
    12,598       6,965       25,480  
Chihuahua
    24,952       27,112       50,359  
Durango
    7,290       7,456       9,307  
Mazatlán
    7,749       8,767       24,291  
Monterrey
    79,659       62,570       160,449  
Reynosa
    8,697       16,652       10,212  
San Luis Potosí
    2,705       38,501       15,439  
Tampico
    6,926       2,645       25,144  
Torreón
    43,061       37,943       21,274  
Zacatecas
    18,239       3,394       9,949  
Zihuatanejo
    4,101       28,929       21,952  
Other
    3,547       3,420       1,823  
 
                 
Total
  Ps. 268,830     Ps. 282,882     Ps. 424,285  
 
                 

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     The following table sets forth our historical capital expenditures by type of investment across all of our airports for the periods indicated:
                         
    Year ended December 31,  
    2004     2005     2006  
    (thousands of pesos)  
Terminals
  Ps. 165,239     Ps. 96,651     Ps. 166,414  
Runways and aprons
    76,021       129,529       222,231  
Machinery and equipment
    17,319       49,104       25,520  
Other
    10,251       7,598       10,120  
 
                 
Total
  Ps. 268,830     Ps. 282,882     Ps. 424,285  
 
                 
     Our capital expenditures from 2004 through 2006 were allocated to the following types of investments at the majority of our airports:
    Terminals. We remodeled many of the terminals at our airports by expanding departure areas (concourses and lounges), baggage claim areas and arrival areas, by improving lighting systems, adding office space, adding taxi and other ground transportation waiting areas, and by increasing handicap services and remodeling restrooms.
 
    Runways, access roads and aircraft parking. We improved our runways and access roads (including their lighting systems), expanded aircraft parking areas, and made improvements and renovations to the fences on the outlying areas of our properties subject to our concessions.
 
    Machinery and equipment. We invested in machinery and equipment such as fire extinguishing vehicles, emergency back-up electricity generators, metal detectors and other security-related equipment, ambulances, moving walkways and public information systems.
 
    Utility-related infrastructure. We installed sewage treatment plants and systems at several of our airports, improved drainage systems, and installed underground electric wiring systems at several of our airports.
     The following table sets forth our committed investments approved by the Ministry of Communications and Transportation for each airport for 2006 through 2010. We will be required to comply with the investment obligations under these programs on a year-by-year basis.

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Committed Investments by Airport
                                                 
    Year ended December 31,  
                                  Total  
    2006(1)     2007     2008     2009     2010     2006-2010  
    (thousands of pesos)  
Acapulco
  Ps. 91,409     Ps. 39,720     Ps. 27,174     Ps. 12,673     Ps. 12,849     Ps. 183,826  
Ciudad Juárez
    43,774       32,738       19,211       16,652       10,428       122,803  
Culiacán
    58,248       12,839       7,251       19,363       2,073       99,773  
Chihuahua
    67,450       8,234       26,264       6,595       8,946       117,489  
Durango
    16,191       25,068       17,381       20,574       7,916       87,130  
Mazatlán
    84,645       24,491       8,749       16,276       1,927       136,088  
Monterrey
    295,425       233,368       224,481       72,340       20,512       846,125  
Reynosa
    17,433       17,104       9,816       8,051       1,503       53,908  
San Luis Potosí
    23,537       11,545       17,686       21,097       2,660       76,525  
Tampico
    37,810       20,427       10,665       13,395       3,858       86,154  
Torreón
    16,407       9,201       26,326       5,384       6,983       64,301  
Zacatecas
    15,822       12,092       3,875       20,950       6,689       59,427  
Zihuatanejo
    68,304       12,720       18,468       23,835       11,174       134,501  
 
                                   
Total
  Ps. 836,454     Ps. 459,548     Ps. 417,346     Ps. 257,184     Ps. 97,518     Ps. 2,068,050  
 
                                   


(1)   Amounts listed for 2006 include committed investments relating to the purchase, installation and operation of new baggage screening equipment, which are currently under discussion with the airlines that operate at our airports and the Mexican government. We expect to undertake these investments upon reaching an agreement with our principal airline customers and the Ministry of Communications and Transportation.
     The following table sets forth our committed investments for 2006 through 2010 by type of investment:
Committed Investments by Type
                                                 
    Year ended December 31,  
                                            Total  
    2006(1)     2007     2008     2009     2010     2006-2010  
    (thousands of pesos)  
Terminals
  Ps. 102,142     Ps. 100,330     Ps. 201,965     Ps. 54,951     Ps. 13,665     Ps. 473,053  
Runways and aprons
    247,975       211,791       164,335       149,142       60,251       833,495  
Machinery and equipment
    62,250       76,295       42,164       47,208       23,603       251,520  
Baggage screening system - investments
    417,618       58,681       0       0       0       476,299  
Other
    6,468       12,450       8,881       5,882       0       33,682  
 
                                   
Total
  Ps. 836,454     Ps. 459,548     Ps. 417,346     Ps. 257,184     Ps. 97,518     Ps. 2,068,050  
 
                                   


(1)   Amounts listed for 2006 include committed investments relating to the purchase, installation and operation of new baggage screening equipment, which are currently under discussion with the airlines that operate at our airports and the Mexican government. We expect to undertake these investments upon reaching an agreement with our principal airline customers and the Ministry of Communications and Transportation.
     For the year ended December 31, 2006, our capital expenditures totaled Ps.424 million. Our capital expenditures for 2006 were devoted primarily to our committed investments and secondarily to the construction of a new passenger terminal.
     We plan to fund our operations and capital expenditures in the short-term and long-term through cash flows from operations and debt. Our ability to incur debt may be restricted by the Merrill Lynch refinancing entered into by our parent company Aeroinvest. See “Item 5. Operating and Financial Review and Prospects — Liquidity and Capital Returns.
BUSINESS OVERVIEW
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 Communications and Transportation under certain circumstances for up to 50

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additional years. 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 activities conducted at our airports, such as the leasing of space to restaurants and retailers.
     We operate 13 airports, which serve a major metropolitan area (Monterrey), three tourist destinations (Acapulco, Mazatlán and Zihuatanejo), regional centers (Chihuahua, Culiacán, Durango, San Luis Potosí, Tampico, Torreón and Zacatecas) and border cities (Ciudad Juárez and Reynosa). Our airports are located in nine of the 31 Mexican states, covering a territory of approximately 926,421 square kilometers (approximately 575,667 square miles), with a population of approximately 24 million according to the Mexican National Institute of Statistics, Geography and Computer Science (Instituto Nacional de Estadística, Geografía e Informática) and the Mexican National Population Council. 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 Mexican Bureau of Civil Aviation, our commercial aviation passenger traffic accounted for approximately 16.0% of all arriving and departing commercial aviation passengers in Mexico in 2006.
     In 2006, we recorded revenues of Ps.1,626 million (U.S.$150.6 million) and net income of Ps.452 million (U.S.$41.9 million). In 2006 our airports handled approximately 11.8 million terminal passengers, an increase of 11.2% with respect to the 10.6 million terminal passengers in 2005.
     Our airports serve several major international routes, including Monterrey-Houston, Monterrey-Dallas, Monterrey-Chicago and Monterrey-Madrid. Our airports also serve several other major international destinations, including Los Angeles, Chicago and Las Vegas. In addition, our airports serve major resort destinations, such as Acapulco, Mazatlán and Zihuatanejo, which are popular destinations in Mexico frequented by tourists from Mexico, the United States and Canada. Our airports also serve major domestic routes, including Monterrey-Mexico City, which was the country’s busiest domestic route in 2006, with approximately 1.94 million total passengers, according to the Mexican Bureau of Civil Aviation. Other major domestic routes served by our airports include Mexico City-Ciudad Juárez, Mexico City-Acapulco and Culiacán-Tijuana, with approximately 348 thousand, 448 thousand and 196 thousand total passengers, respectively, in 2006 according to the Mexican Bureau of Civil Aviation.
     Monterrey is the third largest city in Mexico in terms of population, with a population of 4.2 million in the greater metropolitan area. Monterrey ranks among Mexico’s most established urban and commercial centers and is the capital of the state of Nuevo León, Mexico’s ninth largest state in terms of 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 International Airport. The airport is our leading airport in terms of passenger traffic volume, air traffic movements and contribution to revenues, and ranked fourth busiest airport in Mexico based on passenger traffic volume in 2006, according to data published by the Mexican Bureau of Civil Aviation. Our Monterrey International Airport accounted for approximately 44.0% and 44.6% of our terminal passenger traffic in 2005 and 2006, respectively.
     Three of our airports, Acapulco International Airport, Mazatlán International Airport and Zihuatanejo International Airport, serve popular Mexican tourist destinations. Of these tourist destinations, Acapulco and Mazatlán are the largest, with Acapulco constituting Mexico’s seventh largest international tourist destination and Mazatlán the fifth largest in terms of visitors in 2006, according to the Mexican National Institute of Immigration. Acapulco is a principal port of call for cruise ships. In 2006,

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the Acapulco International Airport, Mazatlán International Airport and Zihuatanejo International Airport collectively accounted for 21.2% of our aggregate terminal passengers and 21.7% of our total revenues.
     Mexico was the eighth largest tourist destination in the world in 2006 in terms of international arriving tourists (25 million), according to the latest data published by the World Tourism Organization. Within Latin America and the Caribbean, Mexico ranked first in 2006 in terms of number of foreign visitors and income from tourism, according to the World Tourism Organization.
     Seven of our airports serve small and mid-sized cities that are important regional centers of economic activity with such diverse economic activities as mining (Durango International Airport and Zacatecas International Airport), maquiladora manufacturing (Chihuahua International Airport and Torreón International Airport), petroleum and chemical production (Tampico International Airport), agriculture and livestock (Culiacán International Airport) and transportation and logistics (San Luis Potosí International Airport). In 2006, these seven regional airports collectively accounted for 27.1% of our aggregate terminal passengers and 27.9% of our total revenues.
     The remaining two airports in the group, Ciudad Juárez International Airport and Reynosa International Airport, 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 2006, the Ciudad Juárez International Airport and the Reynosa International Airport collectively accounted for 7.1% of our aggregate terminal passengers and 6.9% of our total revenues.

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     The following table provides summary data for each of our 13 airports for the year ended December 31, 2005 and 2006:
                                                                                 
    Year ended December 31, 2005   Year ended December 31, 2006
                                    Revenues                                   Revenues
                                    per                                   per
    Terminal                   terminal   Terminal                   terminal
Airport   Passengers   Revenues   passenger(1)   passengers   Revenues   passenger(1)
    Number                                   Number                    
    (in           (millions                   (in           (millions        
    millions)   %   of pesos)   %   (pesos)   millions)   %   of pesos)   %   (pesos)
Metropolitan area:
                                                                               
Monterrey International Airport
    4.7       44.0 %     618.4       43.4 %     131.6       5.3       44.6 %     719.9       44.6 %     135.8  
Tourist destinations:
                                                                               
Acapulco International Airport
    0.9       8.3 %     122.1       8.5 %     135.7       1.0       8.4 %     139.6       8.4 %     139.6  
Mazatlán International Airport
    0.8       7.5 %     116.9       8.2 %     146.1       0.8       7.0 %     123.7       7.0 %     154.6  
Zihuatanejo International Airport
    0.6       5.7 %     77.3       5.4 %     128.8       0.7       5.8 %     90.8       5.8 %     129.9  
Total tourist destinations
    2.3       21.5 %     316.3       22.2 %     137.5       2.5       21.2 %     354.1       21.2 %     141.7  
Regional cities:
                                                                               
Chihuahua International Airport
    0.6       5.7 %     83.4       5.8 %     139.0       0.7       5.6 %     95.9       5.9 %     137.1  
Culiacán International Airport
    0.8       7.3 %     98.8       6.9 %     123.5       0.8       7.2 %     111.0       7.2 %     138.9  
Durango International Airport
    0.2       2.0 %     28.9       2.0 %     144.5       0.2       2.0 %     31.3       2.0 %     156.5  
San Luis Potosí International Airport
    0.2       2.2 %     40.8       2.8 %     204.0       0.2       1.9 %     40.4       1.9 %     202.0  
Tampico International Airport
    0.4       3.8 %     55.5       3.9 %     138.7       0.5       4.1 %     64.6       4.1 %     129.2  
Torreón International Airport
    0.4       3.5 %     52.8       3.7 %     132.0       0.4       3.5 %     57.2       3.5 %     143.0  
Zacatecas International Airport
    0.3       2.8 %     40.1       2.8 %     133.7       0.3       2.8 %     46.8       2.8 %     156.0  
Total regional destinations
    2.9       27.3 %     400.3       28.1 %     138.0       3.2       27.1 %     447.2       27.1 %     139.7  
Border cities:
                                                                               
Ciudad Juárez International Airport
    0.6       5.8 %     73.8       5.2 %     123.0       0.7       5.9 %     87.4       5.4 %     124.8  
Reynosa International Airport
    0.1       1.4 %     17.5       1.2 %     175.0       0.1       1.2 %     17.6       1.2 %     176.0  
Total border city destinations
    0.7       7.2 %     91.3       6.4 %     130.4       0.8       7.1 %     105.0       7.1 %     131.2  
 
                                                                               
TOTAL:
    10.6       100.0 %     1,426.3       100.0 %     134.5       11.8       100.0 %     1,626.2       100.0 %     137.8  
 
                                                                               
 
(1)   Revenues per terminal passenger are calculated by dividing the total revenues for each airport by the number of terminal passengers for each airport.
     As of July 2006, Mexico and the United States are parties to an amended bilateral aviation agreement that increases, from two each to three each, the number of Mexican and U.S. carriers eligible to operate routes between certain pairs of cities, which may include any U.S. city and twelve specified cities in Mexico including Acapulco, Mazatlán and Zihuatanejo. The agreement also provides for a future increase, from two each to three each, in the number of Mexican and U.S. carriers eligible to operate routes between U.S. cities and two specified additional Mexican cities, including Monterrey. This subsequent increase is expected to take effect in October 2007. We believe that our business will benefit from an increase in flights to and from our Monterrey, Acapulco, Mazatlán and Zihuatanejo international airports as a result of the amended bilateral aviation agreement.
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

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our airports. In 2004, 2005 and 2006, aeronautical services revenues represented approximately 81.2%, 80.6% and 81.3%, respectively, of our total revenues.
     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 automatically included in the cost of a passenger’s ticket and we issue invoices for those charges to each airline on a bi-weekly basis and record an account receivable for the invoice corresponding to a flight during the actual month of the flight.
     Our principal airline customers are required to pay us no later than 152 days after the invoice delivery date. The actual term for payment is dependent upon interest rates on short-term Mexican treasury bills, or Cetes, with longer payment terms during periods of lower interest rates (within a defined range). In 2006, the weighted average term of payment was 103 days.
     International passenger charges are currently U.S. dollar-denominated, but are collected in pesos based on the average exchange rate during the month prior to the flight, and as such the value of our revenues from those charges is therefore affected by fluctuations in the value of the U.S. dollar as compared to the peso. Domestic passenger charges are peso-denominated. In 2004, 2005 and 2006, passenger charges represented approximately 69.0%, 70.2% and 73.1%, respectively, of our aeronautical services revenues and approximately 56.0%, 56.6% and 59.4%, respectively, of our total revenues. Passenger charges vary at each airport and based on the destination of each flight.
Aircraft Landing Charges
     We collect landing charges from 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 2004, 2005 and 2006, these charges represented approximately 9.8%, 9.5% and 8.3%, respectively, of our aeronautical services revenues and approximately 7.9%, 7.6% and 6.8%, respectively, of our total revenues.
Aircraft Parking, Boarding and Unloading Charges
     We collect various charges from 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 the nationality of the airline or client. We collect aircraft parking charges the entire time an aircraft is on our aprons.

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Aircraft Long-Term Parking Charges
     We collect charges from our carriers for the long-term use of facilities at our airports for aircraft long-term parking that does not involve the loading or unloading of passengers or cargo. These charges are based on the time of day or night the aircraft is parked at our facilities, the length of time the aircraft is parked at our facilities and the nationality of the airline or client. Together with our aircraft parking, boarding and unloading charges described above, in 2004, 2005 and 2006, these charges represented approximately 8.1%, 7.6% and 6.7%, respectively, of our aeronautical services revenues and 6.6%, 6.1% and 5.5%, respectively, of our total revenues.
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 2004, 2005 and 2006, these charges represented approximately 2.2%, 2.3% and 1.8%, respectively, of our aeronautical services revenues and approximately1.8%, 1.9% and 1.5%, respectively, of our total revenues.
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 X-ray equipment, metal detectors and other security equipment and personnel. These charges are based on the time of day the services are used, the number of departing passengers and the destination of the flight. Airport security services at our airports are provided by independent subcontractors. In 2004, 2005 and 2006, these charges represented approximately 1.5%, 1.5% and 1.4%, respectively, of our aeronautical services revenues and approximately1.2%, 1.2% and 1.1%, respectively, of our total revenues.
     The International Civil Aviation Organization, the General Office of Civil Aviation (Mexico’s federal authority on aviation) 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 International Civil Aviation Organization issued directives in October 2001 establishing new rules and procedures to be adopted at our airports. Under these directives, these rules and procedures were to be implemented immediately and for an indefinite period of time.
     To comply with these directives, we reinforced our security by:
    updating and amending our emergency security and contingency plans and the responsibilities of security personnel relating thereto;
 
    segregating flows of arriving and departing passengers;
 
    improving security supervision committees at each of our airports, particularly those with significant international traffic;
 
    updating our security screening technology, including increasing the sensitivity of metal detectors and introducing new procedures for x-ray inspection of luggage;

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    increasing and improving the training of security personnel;
 
    coordinating security measures and emergency plans with operators of complementary and commercial services at our airports;
 
    implementing a higher security employee identification system; and
 
    increased collaboration with providers of security equipment installation services.
     Certain of these improvements are expected to be expensed in our results of operations, while others are expected to require additional capital expenditures under our master development program.
     Several of our airline customers have also contributed to the enhanced security at our airports as they have adopted new procedures and guidelines established by the International Civil Aviation Organization applicable to airlines. Some measures adopted by the airlines include adding more points for verification of passenger identification, inspecting luggage prior to check-in and reinforcing controls over access to airplanes by various service providers (such as baggage handlers and food service providers).
     The International Civil Aviation Organization recently 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. Although the Mexican federal government has yet to adopt the new baggage screening guidelines into the Mexican Civil Aviation Law (Ley de Aviación Civil), we expect that Mexican law will require airlines to comply with these guidelines in the near future. We are currently negotiating with our principal airline customers to enter into service agreements pursuant to which we expect to agree to purchase, install and operate screening equipment and implement other screening measures to facilitate our airline customers’ compliance with the new baggage screening guidelines. Until we agree on the contractual terms with the airlines and the new screening equipment becomes operational, checked baggage will continue to be screened by hand by each airline in order to comply with the new screening guidelines. In some countries, such as the United States of America, the federal government (in the case of the United States, through the Transportation Security Administration) is responsible for screening checked baggage. Under Mexican law, however, airlines are responsible for screening checked baggage. Although Mexican law holds airlines liable for screening checked baggage, the purchase, installation and operation of the new 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 subject to potential liability, if Mexican law changes in the future.
Complementary Services
     At each of our airports, we earn revenues from charging access and other fees from third-party providers of ramp handling and baggage handling services, catering services, aircraft security, aircraft maintenance and repair and fuel. These access fees are included in the revenues that are regulated under our maximum-rate price regulation system and are determined for each third-party service provider based on a percentage of their total revenues. We currently maintain contracts with nine companies that provide the majority of these complementary services at our 13 airports.
     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. For example, SEAT, which is controlled by Aeroméxico and Mexicana through a joint venture, currently provides the majority of ramp handling and

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baggage handling services at our airports. If the third parties currently providing these services cease to do so, we will be required to provide these services or find another third party to provide such services.
     The Mexican Airport and Auxiliary Services Agency (Aeropuertos y Servicios Auxiliares) maintains an exclusive contract to sell fuel at all of our airports and we charges the Mexican Airport and Auxiliary Services Agency a nominal access fee. The Mexican Airport and Auxiliary Services Agency in turn is required to purchase all of its fuel from Petróleos Mexicanos, or PEMEX.
Leasing of Space to Airlines
     We derive aeronautical revenue 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
     In 2004, 2005 and 2006, our 13 airports handled approximately 79, 80 and 81 thousand metric tons of cargo, respectively. Increases in our cargo volume are beneficial to us for purposes of the maximum rate calculations, as cargo increases the number of our workload units.
     Cargo-related revenues include revenues from the leasing of space in our airports to handling agents and shippers, landing fees for each arriving aircraft carrying cargo and a portion of the revenues derived from other complementary services provided in connection with cargo services. Cargo-related revenue is largely aeronautical and therefore subject to maximum rates applicable to aeronautical revenue sources.
     Revenues from cargo handling in our airports historically have represented a negligible portion of our total revenues, but we believe that Mexico has significant potential for growth in the volume of cargo transported by air.
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
     Our revenues from non-aeronautical services are principally derived from commercial activities. Non-aeronautical services historically have generated a significantly smaller portion of our revenues as compared to aeronautical services. Our revenues from non-aeronautical services are derived from commercial activities, such as the leasing of space in our airports to retailers, restaurants, airlines and other commercial tenants. In 2004, 2005 and 2006, revenue from non-aeronautical services accounted for approximately 18.8%, 19.4% and 18.7%, respectively, of total revenue. In light of our substantial completion of our remodeling efforts at most of our airports and the fixed nature of a portion of our non-aeronautical revenues, we expect non-aeronautical revenue per terminal passenger to remain relatively stable in the coming years.

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     None of our revenues from non-aeronautical services are regulated under our maximum-rate price regulation system, though they may be regulated by other authorities. For example, our parking facilities may be subject to certain municipal regulations.
Revenues from Commercial Activities
     As the main part of our business strategy we have made it a priority to increase our revenues from commercial activities in our airports and to develop and promote the “OMA” brand, including the “OMA Plaza” retail brand described below. As a result of our efforts, our revenues from commercial activities have increased from approximately 7% of revenues in 2000 to nearly 19% of revenues in 2006, primarily as a result of the following initiatives:
    Expanding and reconfiguring the commercial space available in our airport terminals. In order to increase our revenues from commercial activities, we have expanded and redesigned the layout of certain terminals in our airports to allow for the inclusion of more commercial businesses and larger individual commercial spaces, as well as to redirect the flow of passengers through our airports so as to increase our exposure to the commercial businesses operating in our airports. As a result, between 2000 and 2006, we increased the total area available for commercial activity in our 13 airports by approximately 50%, and have nearly doubled the commercial area in the Monterrey International Airport.
 
    Renegotiating agreements with terminal tenants to be more consistent with market practice. We have also improved our lease arrangements with existing tenants by adopting a new type of contract that provides for royalty payments based on a percentage of revenues, subject to a minimum fixed amount based partly on square-footage, as opposed to the leases based solely on square footage that were used historically in Mexican airports. We estimate, based on the nature of our tenant operations, that approximately half of our commercial space is suitable for royalty-based leasing arrangements. As of December 31, 2006, substantially all of the eligible contracts were represented by royalty-based leasing arrangements.
 
    Improving the quality of retail offerings in our airports. Historically, commercial tenants in our terminals consisted of small, often similar, local businesses offering goods and services of limited variety. We have leased redesigned space formerly occupied by such tenants, as well as newly available space, to more established, internationally recognized businesses in order to improve the quality, diversity and brand recognition of commercial goods and services available to our passengers, which we believe, based in part on market surveys conducted at several of our airports, will increase the sales revenues of our commercial tenants, thereby increasing our revenues from commercial activities. In order to promote commercial development at all of our airports, we encourage commercial tenants to lease bundles of commercial spaces among multiple airports that we operate.
 
    Development and promotion of “OMA Plaza” retail brand. In order to enhance our passengers’ confidence in the retailers operating in our airports, we have developed the “OMA Plaza” brand for our commercial spaces. As part of this initiative, we have begun to standardize certain merchandising and design elements of our commercial spaces in order to create a more uniform and elegant image that is more appealing to retail customers. In addition, we have developed promotional programs focusing on the further development of the OMA Plaza brand that are intended to stimulate retail sales in our airports. We believe that a recognizable brand and familiar aesthetic for our commercial spaces will make passengers more likely to take advantage of the commercial goods and services available in our airports.

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     An airport’s revenues from commercial activities are largely dependent on passenger traffic, its passengers’ level of spending, its terminal design, the mix of commercial tenants and how fees are charged to businesses operating in the commercial area of the airport. Revenues from commercial activities depend substantially on the percentage of traffic represented by international passengers, who tend to spend greater amounts at our airports, particularly on duty-free items. Revenues from commercial activities also depend on other factors, such as variations in the advertising budgets of Mexican companies in the case of advertising revenues.
     Commercial activities in each of our airports currently consist of the following:
    Parking facilities - Our concessions provide us the right to operate the car parking facilities at all of our airports. Revenues from parking facilities at our airports currently are not regulated under our maximum rates, although they are subject to the regulatory oversight of the Ministry of Communications and Transportation.
 
    Advertising - In 2002, we entered into a contract with a subsidiary of Corporación Interamericana de Entretenimiento, S.A. de C.V., or CIE, pursuant to which we have developed a greater number of and more strategically located billboards, screens (projection and plasma) and other advertising space at our airports. Under the agreement, CIE places advertising in our airports and we collect a percentage of the revenues that CIE receives from individual advertisers.
 
    Leasing of space - Revenues that we derive from leasing of space in our terminals to airlines and complementary service providers for certain activities that are not essential to airport operations, such as first class/VIP lounges, are not subject to price regulation under our maximum rates and are classified as non-regulated commercial activities.
 
    Retail stores - We have completed several renovation projects as part of our overall effort, described above, to improve the product mix and brand recognition of retail stores in the commercial areas at our airports. Our retailer tenants currently offer such internationally recognized product brands as Cartier, Hermès, Mont Blanc, Swatch, Ermenegildo Zegna, Christian Dior, Lancôme, L’Oreal, Swarovski and Lacoste. We also have several duty-free retailers that cater to international passengers.
 
    Car rentals - We have recently sought to increase the presence of internationally known name-brand car rental providers at our airports, and have encouraged car rental companies to establish on-site automobile pick-up and drop-off facilities at our airports, which we anticipate will increase our revenues from the leasing of space to car rental companies.
 
    Food and beverage services - In recent years, we have completed “clean-up” projects with respect to our restaurant and bar leases, in order to attract world-class providers of high-quality food and beverage services offering a wider variety of cuisine options and service concepts.
 
    Communications - We have consolidated most of the telephone and internet service at our airports with one provider and offer internet access (either wireless internet access or internet service kiosks) at all of our airports.
 
    Financial services - We lease space to financial services providers such as currency exchange bureaus, banks and ATMs, at our airports, and we charge providers of these

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      financial services fees based partly on a percentage of the revenues recorded by their operations. ATM service is currently available at all of our airports.
    Ground transportation - Our revenues from providers of ground transportation services deemed “non-permanent” under applicable Mexican law, such as access fees charged to charter buses, are not subject to price regulation under our maximum rates and are classified as non-regulated commercial activities.
 
    Time-share marketing and sales - We receive revenues from time-share developers to whom we rent space in our airports for the purpose of marketing and sales of time-share units.
Our Airports
     In 2004, 2005 and 2006, our airports served a total of approximately 9.7 million, 10.6 million and 11.8 million terminal passengers, respectively. Monterrey International Airport accounted for approximately 44.1%, 44.0% and 44.6% of our terminal passenger traffic in 2004, 2005 and 2006, respectively. Acapulco International Airport, Mazatlán International Airport and Zihuatanejo International Airport, our main airports servicing the next most popular destinations in our airport group, collectively accounted for approximately 22.2%, 21.5% and 21.2% of our terminal passenger traffic in 2004, 2005 and 2006, respectively. Ciudad Juárez International Airport, our largest airport servicing a border city, accounted for approximately 5.9%, 5.8% and 5.9% of our terminal passenger traffic in 2004, 2005 and 2006, respectively. All of our airports are designated as international airports under applicable Mexican law, meaning that they are equipped to receive international flights and maintain customs and immigration facilities operated by the Mexican government.

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     The following tables set forth the passenger traffic volume presented in amounts of (1) total passengers, (2) terminal departing passengers and (3) terminal arriving passengers, for each of our airports for the periods indicated:
Passenger Traffic
                                                                                                                         
    Year Ended December 31,
    2002   2003   2004   2005   2006
    Terminal(1)   Transit(2)   Total   Terminal(1)   Transit(2)   Total   Terminal(1)   Transit(2)   Total   Terminal(1)   Transit(2)   Total   Terminal(1)   Transit(2)   Total
Total passengers:
                                                                                                                       
Acapulco
    793,420       13,914       807,334       774,349       34,704       809,053       821,301       35,353       856,654       880,190       39,291       919,481       994,286       45,445       1,039,731  
Chihuahua
    511,625       78,393       590,018       541,531       88,885       630,416       556,074       95,271       651,345       599,977       79,932       679,909       664,392       80,257       744,649  
Ciudad Juárez
    524,393       4,785       529,178       549,476       3,643       553,119       570,923       5,596       576,519       611,942       31,032       642,974       698,765       44,856       743,621  
Culiacán
    583,134       197,823       780,957       620,511       137,669       758,180       673,002       100,189       773,191       769,118       118,238       887,356       843,989       138,637       982,626  
Durango
    193,110       53,484       246,594       188,212       37,944       226,156       210,774       44,885       255,659       214,920       47,334       262,254       236,200       24,933       261,133  
Mazatlán
    710,273       102,447       812,720       703,320       87,535       790,855       741,267       89,918       831,185       799,801       106,125       905,926       819,214       91,839       911,053  
Monterrey
    3,446,469       250,339       3,696,808       3,703,288       266,386       3,969,674       4,293,816       289,813       4,583,629       4,660,138       360,213       5,020,351       5,253,600       300,737       5,554,337  
Reynosa
    149,391       1,411       150,802       150,059       2,049       152,108       145,075       2,508       147,583       146,250       1,777       148,027       136,991       1,417       138,408  
San Luis Potosí
    172,313       5,601       177,914       173,073       3,281       176,354       195,700       3,875       199,575       233,610       832       234,442       227,102       1,160       228,262  
Tampico
    327,627       13,128       340,755       331,124       15,784       346,908       333,696       12,687       346,383       402,122       13,292       415,414       485,125       12,570       497,695  
Torreón
    333,894       86,297       420,191       333,166       95,247       428,413       361,400       109,324       470,724       374,559       91,188       465,747       410,124       52,479       462,603  
Zacatecas
    235,033       60,841       295,874       230,241       64,433       294,674       236,692       57,040       293,732       297,137       72,469       369,606       332,224       122,865       455,089  
Zihuatanejo
    572,746       5,525       578,271       554,516       6,508       561,024       599,720       5,104       604,824       608,897       4,062       612,959       681,581       4,150       685,731  
 
                                                                                                                       
Total
    8,553,428       873,988       9,427,416       8,852,866       844,068       9,696,934       9,739,440       851,563       10,591,003       10,598,661       965,785       11,564,446       11,783,593       921,345       12,704,938  
 
                                                                                                                       
 
(1)   Includes arriving and departing passengers as well as transfer passengers (passengers who arrive at our airports on one aircraft and depart on a different aircraft).
 
(2)   Terminal passengers who arrive at our airports but generally depart without changing aircraft.
                                                                                                                         
    Year Ended December 31,
    2002   2003   2004   2005   2006
    Domestic   International   Total   Domestic   International   Total   Domestic   International   Total   Domestic   International   Total   Domestic   International   Total
Terminal
departing
passengers:
                                                                                                                       
Acapulco
    246,359       159,449       405,808       244,661       152,996       397,657       251,552       168,251       419,803       256,715       192,531       449,246       296,841       207,896       504,737  
Chihuahua
    225,305       28,646       253,951       241,902       27,887       269,789       248,329       28,232       276,561       261,361       36,808       298,169       290,516       41,988       332,504  
Ciudad Juárez
    230,769       940       231,709       248,468       832       249,300       256,713       795       257,508       272,641       878       273,519       314,698       552       315,250  
Culiacán
    273,998       19,886       293,884       294,465       22,257       316,722       313,146       26,754       339,900       365,805       25,748       391,553       407,618       20,651       428,269  
Durango
    77,634       19,633       97,267       74,893       19,090       93,983       78,977       25,809       104,786       82,656       24,293       106,949       91,989       26,132       118,121  
Mazatlán
    175,351       180,684       356,035       172,148       180,203       352,351       182,168       189,010       371,178       178,758       222,324       401,082       173,150       237,725       410,875  
Monterrey
    1,359,899       367,401       1,727,300       1,463,479       402,700       1,866,179       1,692,546       463,357       2,155,903       1,779,871       515,697       2,295,568       2,042,616       497,271       2,539,887  
Reynosa
    70,027       254       70,281       70,912       214       71,126       66,985       104       67,089       65,674       117       65,791       65,008       68       65,076  
San Luis Potosí
    65,151       22,425       87,576       66,400       21,597       87,997       71,675       27,177       98,852       77,923       39,514       117,437       70,550       42,681       113,231  
Tampico
    141,727       22,750       164,477       144,964       20,069       165,033       144,887       21,609       166,496       171,153       30,307       201,460       208,718       33,604       242,322  
Torreón
    141,524       24,708       166,232       143,867       22,397       166,264       152,230       28,154       180,384       149,345       36,911       186,256       162,828       42,378       205,206  
Zacatecas
    77,147       44,640       121,787       71,685       46,055       117,740       72,025       49,529       121,554       99,691       52,973       152,664       118,673       52,517       171,190  
Zihuatanejo
    167,683       120,580       288,263       161,781       117,901       279,682       155,386       146,818       302,204       143,963       161,763       305,726       165,047       176,772       341,819  
 
                                                                                                                       
Total
    3,252,574       1,011,996       4,264,570       3,399,625       1,034,198       4,433,823       3,686,619       1,175,599       4,862,218       3,905,556       1,339,864       5,245,420       4,408,252       1,380,235       5,788,487  
 
                                                                                                                       

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Table of Contents

                                                                                                                         
    Year ended December 31,
    2002   2003   2004   2005   2006
    Domestic   International   Total   Domestic   International   Total   Domestic   International   Total   Domestic   International   Total   Domestic   International   Total
Terminal arriving passengers:
                                                                                                                       
Acapulco
    276,813       110,799       387,612       282,547       94,145       376,692       290,885       110,613       401,498       298,273       132,671       430,944       341,685       147,864       489,549  
Chihuahua
    236,114       21,560       257,674       251,017       20,725       271,742       258,468       21,045       279,513       271,814       29,994       301,808       297,980       33,908       331,888  
Ciudad Juárez
    291,824       860       292,684       299,313       863       300,176       312,392       1,023       313,415       337,558       865       338,423       382,757       758       383,515  
Culiacán
    278,120       11,130       289,250       293,227       10,562       303,789       320,278       12,824       333,102       366,652       10,913       377,565       410,628       5,092       415,720  
Durango
    80,966       14,877       95,843       80,385       13,844       94,229       85,366       20,622       105,988       89,741       18,230       107,971       99,989       18,090       118,079  
Mazatlán
    205,848       148,390       354,238       198,606       152,363       350,969       204,671       165,418       370,089       201,781       196,938       398,719       191,529       216,810       408,339  
Monterrey
    1,395,701       323,468       1,719,169       1,478,648       358,461       1,837,109       1,697,834       440,079       2,137,913       1,867,610       496,960       2,364,570       2,271,885       441,828       2,713,713  
Reynosa
    79,006       104       79,110       78,801       132       78,933       77,905       81       77,986       80,190       269       80,459       71,903       12       71,915  
San Luis Potosí
    67,537       17,200       84,737       68,155       16,921       85,076       76,923       19,925       96,848       85,549       30,624       116,173       80,207       33,664       113,871  
Tampico
    148,847       14,303       163,150       153,369       12,722       166,091       153,234       13,966       167,200       185,451       15,211       200,662       223,699       19,104       242,803  
Torreón
    152,030       15,632       167,662       152,775       14,127       166,902       161,310       19,706       181,016       160,898       27,405       188,303       173,396       31,522       204,918  
Zacatecas
    75,310       37,936       113,246       67,488       45,013       112,501       68,770       46,368       115,138       98,085       46,388       144,473       116,784       44,250       161,034  
Zihuatanejo
    184,111       100,372       284,483       177,801       97,033       274,834       174,133       123,383       297,516       169,731       133,440       303,171       187,620       152,142       339,762  
 
                                                                                                                       
Total
    3,472,227       816,631       4,288,858       3,582,132       836,911       4,419,043       3,882,169       995,053       4,877,222       4,213,333       1,139,908       5,353,241       4,850,062       1,145,044       5,995,106  
 
                                                                                                                       

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     The following table sets forth the air traffic movement capacity of each of our airports as of December 31, 2006.
Capacity by Airport(1)
                 
    Peak air traffic   Runway
Airport   movements per hour   Capacity(2)
Acapulco
    9       40  
Chihuahua
    9       40  
Ciudad Juárez
    10       20  
Culiacán
    14       20  
Durango
    6       40  
Mazatlán
    9       22  
Monterrey
    29       38  
Reynosa
    2       18  
San Luis Potosí
    5       20  
Tampico
    7       22  
Torreón
    8       20  
Zacatecas
    3       20  
Zihuatanejo
    8       20  
 
(1)   2006 figures.
 
(2)   Air traffic movements per hour.

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     The following table sets forth the air traffic movements for each of our airports for the periods indicated.
Air Traffic Movements by Airport(1)
                                         
    Year ended December 31,
    2002   2003   2004   2005   2006
Acapulco
    23,907       23,778       23,288       26,336       28,015  
Chihuahua
    39,589       36,205       35,205       36,614       36,681  
Ciudad Juárez
    16,752       16,069       17,565       20,424       19,612  
Culiacán
    46,842       48,048       46,404       50,648       55,691  
Durango
    14,794       14,021       15,075       15,599       15,672  
Mazatlán
    21,637       20,532       21,984       23,965       24,046  
Monterrey
    82,874       84,154       95,027       94,292       101,736  
Reynosa
    6,706       6,603       6,386       6,513       7,877  
San Luis Potosí
    20,536       19,222       20,361       22,102       22,150  
Tampico
    20,516       21,211       19,512       21,299       22,730  
Torreón
    23,146       20,673       22,344       21,523       21,546  
Zacatecas
    7,732       7,602       7,942       9,112       10,381  
Zihuatanejo
    15,169       15,086       14,923       13,899       16,474  
 
                                       
 
Total
    340,200       333,204       346,016       362,326       382,611  
 
                                       
 
(1)   Includes departures and landings.

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     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)
                                         
    Year ended December 31,
    2002   2003   2004   2005   2006
Acapulco
    33.2       32.6       35.3       33.4       35.5  
Chihuahua
    12.9       15.0       15.8       16.4       18.1  
Ciudad Juárez
    31.3       34.2       32.5       30.0       35.6  
Culiacán
    12.4       12.9       14.5       15.2       15.2  
Durango
    13.1       13.4       14.0       13.8       15.1  
Mazatlán
    32.8       34.3       33.7       33.4       34.1  
Monterrey
    41.6       44.0       45.2       49.4       51.6  
Reynosa
    22.3       22.7       22.7       22.5       17.4  
San Luis Potosí
    8.4       9.0       9.6       10.6       10.3  
Tampico
    16.0       15.6       17.1       18.9       21.3  
Torreón
    14.4       16.1       16.2       17.4       19.0  
Zacatecas
    30.4       30.3       29.8       32.6       32.0  
Zihuatanejo
    37.8       36.8       40.2       43.8       41.4  
 
                                       
Average of all airports
    25.1       26.6       28.1       29.3       30.8  
 
                                       
 
(1)   Includes total passengers divided by total air traffic movements.
Metropolitan Area
Monterrey International Airport
     Monterrey International Airport is our most important airport in terms of passenger traffic (including both domestic and international passengers), air traffic movements and contribution to revenues. According to the Mexican Bureau of Civil Aviation, Monterrey International Airport was the fourth busiest airport in Mexico in 2006, in terms of commercial aviation passenger traffic. In 2004, 2005 and 2006, it accounted for approximately 44.1%, 44.0% and 44.6%, respectively, of our terminal passenger traffic.
     In 2004, 2005 and 2006, a total of 4.3 million terminal passengers, 4.7 million terminal passengers and 5.3 million terminal passengers, respectively, were served by Monterrey International Airport. Of the terminal passengers in 2004, 79.0% were domestic and 21.0% were international passengers. Of the terminal passengers in 2005, 78.3% were domestic and 21.7% were international passengers. In 2006, 82.1% were domestic and 17.9% were international passengers. This airport serves primarily business travelers and is also a hub for the transportation of goods.
     A total of 17 commercial airlines operate at the airport, the principal ones of which are Aviacsa, Aeroméxico, Aerolitoral, Mexicana and VivaAerobus. The airport is an important hub for Aviacsa, a maintenance center for Aerolitoral and the headquarters for VivaAerobus. The principal non-Mexican airlines operating at the airport are American and Continental. Airlines operating at this airport serve 33 destinations, of which 24 are domestic and 9 are international. Of these destinations, Mexico City, Toluca, Guadalajara, Tijuana, Houston, Cancun, Dallas, Mérida, Hermosillo, Los Angeles, Las Vegas, Chicago and Madrid are the principal routes. Since 2005, we have entered into agreements with five new Mexican carriers for the operation of various additional routes to and from the airport. In addition, two

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such carriers, the principal one of which is VivaAerobus, have elected to establish their operations headquarters at our airport. As a consequence of the amended bilateral aviation agreement entered into between Mexico and the United States in December 2005, we anticipate that additional U.S. carriers will commence service to and from the airport in 2007.
     Monterrey International Airport is located approximately 21 kilometers (13 miles) from the city of Monterrey, which has a population (including its suburbs) of approximately 4.2 million. Monterrey is Mexico’s third largest city in terms of 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 highest contributor to Mexico’s gross domestic product (GDP). As home to most of Nuevo León’s industry, Monterrey generates roughly 80% of the state’s GDP.
     Monterrey International Airport operates 24 hours daily. The airport currently 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 (ILS). The airport occupies a total area of 821 hectares (88,371,705 square feet). The airport’s facilities include a commercial passenger terminal building with a total area of approximately 28,966 square meters (311,787 square feet), of which 4,024 square meters (43,319 square feet) is commercial space, a 23-position apron for commercial aviation, a two-position apron for air freight, a ten-position apron for general aviation, five taxiways, nine air bridges, an ample boarding lounge for passengers making connections with other flights, and other boarding lounges. Currently, the airport has 11 gates for international or domestic flights.
     In November 2006 we completed construction of a new temporary passenger terminal building with a total area of approximately 4,800 square meters (51,668 square feet) to handle additional traffic from the new airlines serving the airport. This new terminal, which commenced operation at year end 2006, is mainly used by the low cost carrier VivaAerobus. The temporary terminal has four boarding gates and serves five aircraft positions.
     On June 4, 2007, construction began on Terminal B of the Monterrey International Airport, which is expected to begin operations in the fourth quarter of 2008. Terminal B is expected to have the capacity to service at least 1.5 million passengers per year. The 21,000 square meter (226,049 square feet) facility is expected have two levels plus a mezzanine, and include six passenger jetways, three contact positions for regional planes and four remote parking positions. Our affiliate ICA has been engaged to construct the foundation, procure, fabricate and assemble the metallic structure and install the three-dimensional roofing structure for the facility. We engaged an independent expert to evaluate the offer made by ICA in connection with this construction contract, and the expert determined that the offer was consistent with market prices. In addition, the construction contract with ICA was approved by our Corporate Practices Committee, which concluded that the contract is on terms the committee believes are arm’s length.
     With an area of 60,000 square meters (645,840 square feet) for freight operations, Monterrey International Airport is the leading air-cargo terminal in northern Mexico. The airport offers one of Mexico’s most attractive air shipping options, both as a final destination and as a logistical hub. Its current infrastructure servicing air cargo operations includes, among other facilities, terminal warehouses (including a 4,000 square meter (43,056 square foot) terminal warehouse occupied by United Parcel Service, Federal Express, and since 2004, OMA Carga, which we operate directly), merchandise checkpoint platforms (which can service nine trailers simultaneously), and parking for 359 cars and 32 trailers. Roadways suitable for trailers and cars that serve the terminal and x-ray facilities are available.

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     In 2004, we completed a remodeling of the Monterrey International Airport terminal. Among the upgraded facilities introduced to the public were automatic check-in kiosks, internet access points, new VIP lounges, and lounge areas for passengers awaiting connecting or regional flights.
     As part of our strategy of offering incentives to carriers to encourage them to operate new routes and take other measures expected to increase passenger traffic at our airports, on November 22, 2006, we delivered a notice to the Mexican National Air Transportation Chamber setting forth certain criteria that carriers operating at the Monterrey International Airport must meet in order to receive a discount equal to Ps.75.00 per terminal passenger on passenger charges (representing approximately a 40% discount from our usual passenger charge).
     VivaAerobus was the first airline to take advantage of these incentives. VivaAerobus has announced that it intends to establish its maintenance facilities and has already established its corporate and operational headquarters at the Monterrey International Airport. In December 2006, VivaAerobus commenced operations with two aircraft operating nine routes and is expected to be operating more than 20 routes serving 11 of our airports from Monterrey by the end of 2007. Eight of these routes are expected to be to destinations not previously served by the Monterrey International Airport. It has also announced that it expects to expand its fleet to eight to ten aircraft by December 2008. Although we are optimistic about these developments, there can be no assurance that any other carrier will enter into an agreement involving the incentive package described above or that any such agreement would result in growth of aeronautical revenues at our airports.
     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. Recently, the state of Nuevo Leon has requested that the Ministry of Communications and Transportation to amend Aeropuerto del Norte’s concession to allow it to serve commercial aviation operations. We understand that Aeropuerto del Norte is not capable of accommodating commercial passenger traffic with its current infrastructure. To date the Ministry of Communications and Transportation has not amended Aeropuerto del Norte’s concession. However, there can be no assurance that the Ministry of Communications and Transportation will not authorize such an amendment and that commercial aviation flights will not operate from Aerpuerto del Norte in the future.
Tourist Destinations
Acapulco International Airport
     Acapulco International Airport is our second most important airport in terms of passenger traffic, air traffic movements and contribution to revenues. According to the Mexican Bureau of Civil Aviation, Acapulco International Airport was the eleventh busiest airport in Mexico in 2006, in terms of commercial aviation passenger traffic. In 2004, 2005 and 2006, it accounted for approximately 8.4%, 8.3% and 8.4%, respectively, of our terminal passenger traffic.
     In 2004, 2005 and 2006, a total of 821,301 terminal passengers, 880,190 terminal passengers and 994,286 terminal passengers, respectively, were served by Acapulco International Airport. Of the terminal passengers in 2004, 66.0% were domestic and 34.0% were international passengers. Of the terminal passengers in 2005, 63.1% were domestic and 36.9% were international passengers. In 2006, 64.2% were domestic and 35.8% were international passengers. Because the airport’s passengers are predominantly tourists, the airport’s passenger traffic and results of operations are highly seasonal and affected by Mexican and international economic conditions.

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     A total of 14 commercial airlines operate at the airport, the principal ones of which are Mexicana, Aeroméxico and Aviacsa. The principal non-Mexican airlines operating at the airport are American and Continental. Airlines operating at this airport serve 12 destinations. Of these destinations, Mexico City, Tijuana, Chicago and Houston are the most popular. In 2005 we entered into agreements with two new low-cost Mexican carriers for the operation of two additional routes: Acapulco-Toluca and Puebla-Acapulco-Tijuana. In addition, VivaAerobus began operating a Monterrey-Acapulco route in December 2006, and other such carriers have expressed an interest in commencing operations at this airport.
     Acapulco International Airport is located approximately 15 kilometers (9 miles) from the city of Acapulco, which has a population (including its suburbs) of approximately 915,000. Acapulco is Mexico’s twelfth largest city in terms of population and is one of Mexico’s most recognized tourist destinations, of particular importance as a port of embarkation and disembarkation for cruise ships. We believe that these cruise ship passengers could represent a significant portion of the airport’s terminal passengers.
     Acapulco International Airport operates 24 hours daily. The airport has two operating runways and 6 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 15 airplanes. Two of these spaces accommodate a B-737 model or equivalent, another two accommodate a B-747-400 model or equivalent, and the remaining eleven accommodate a B-757 model or equivalent. Three of the 15 spaces have mechanical boarding bridges and 13 of the spaces have oil pumps. The apron servicing general aviation accommodates 24 aircraft.
     The runway capacity at Acapulco International airport is 40 air traffic movements per hour. The airport also has an instrument landing system (ILS), which provides precise guidance to assist aircraft during landing. The airport occupies a total area of 448.7 hectares (48,297,666 square feet) and has two buildings, one for commercial aviation and the other one for executive or general aviation. The building for commercial aviation has four floors and occupies a total area of 19,943 square meters (214,666 square feet), of which 2,033 square meters (21,888 square feet) is commercial space.
     Due to its technical and geographic characteristics, Acapulco International 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. There is currently no airport in closer proximity to the airport of Mexico City with better air traffic conditions than those of the Acapulco International Airport.
Mazatlán International Airport
     Mazatlán International Airport is our third most important airport in terms of passenger traffic. According to the Mexican Bureau of Civil Aviation, Mazatlán International Airport was the twelfth busiest airport in Mexico in 2006, in terms of commercial aviation passenger traffic. In 2004, 2005 and 2006, it accounted for approximately 7.6%, 7.5% and 7.0%, respectively, of our terminal passenger traffic.
     In 2004, 2005 and 2006, a total of 741,267 terminal passengers, 799,801 terminal passengers and 819,214 terminal passengers, respectively, were served by Mazatlán International Airport. Of the terminal passengers in 2004, 52.2% were domestic and 47.8% were international passengers. Of the terminal passengers in 2005, 52.4% were domestic and 47.6% were international passengers. In 2006, 44.5% were domestic and 55.5% were international passengers. The airport’s passengers are predominantly domestic tourists who come from Mexico City, Durango and La Paz, among other cities,

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and international tourists who come primarily from the United States and Canada. Because the airport’s passengers are predominantly tourists, the airport’s passenger traffic and results of operations are highly seasonal and affected by Mexican and international economic conditions.
     A total of 11 commercial airlines operate at the airport, the principal Mexican ones of which are Mexicana, Aeroméxico, Aerolitoral and Magnicharter. In addition, VivaAerobus has announced that it intends to establish service to Mazatlán in 2007. The principal non-Mexican airlines operating at the airport are Alaska Airlines, America West and Continental. Airlines operating at this airport serve 12 destinations. Of these destinations, Mexico City, Guadalajara, Los Cabos, La Paz, Durango, Torreón and Los Mochis are the national routes. The international routes are Denver, Phoenix, Los Angeles, Houston, and Salt Lake City. Under the amended bilateral aviation agreement entered into between Mexico and the United States in December 2005, we anticipate that an additional U.S. carrier will commence service to and from the airport in 2006.
     Mazatlán International Airport is located approximately 18 kilometers (11 miles) from the city of Mazatlán, which has a population of approximately 600,000. Mazatlán is the principal tourist destination of the Sinaloa region, with about 6,713 hotel rooms, according to the Mexican Ministry of Tourism. Mazatlán offers attractive beaches and is also a major producer of shrimp, sardines and tuna.
     Mazatlán International Airport operates 24 hours daily. Its runway capacity is 22 air traffic movements per hour. The airport occupies approximately 467 hectares (50,267,461 square feet) of land. The airport’s facilities include a terminal building with a total area of 16,300 square meters (175,453 square feet), of which 1,444 square meters (15,545 square feet) is commercial space. The airport has a 68,980-square-meter (742,500-square-foot) commercial aviation apron with ten positions and a 33,277-square-meter (358,193-square-foot) general aviation apron with 60 positions. In addition, the airport has four air bridges, multiple boarding lounges, and a public parking facility that accommodates 200 vehicles. The airport’s runway is 2,700 meters (8,858 feet) long, with four taxiways that connect the commercial and general aviation platforms.
     Mazatlán International Airport has been extensively remodeled and upgraded since 2000 in order to improve its operational efficiency and appearance. Its platform for general aviation was completely renovated in 2003 and its runway system was completely replaced in 2001. The terminal building was also remodeled to include, among other amenities, tourist information services and new charter flight check-in counters. The remodeling project was completed in 2003.
Zihuatanejo International Airport
     Zihuatanejo International Airport is our sixth most important airport in terms of passenger traffic. According to the Mexican Bureau of Civil Aviation, Zihuatanejo International Airport was the seventeenth busiest airport in Mexico in 2006, in terms of commercial aviation passenger traffic. In 2004, 2005 and 2006, it accounted for approximately 6.2%, 5.7% and 5.8%, respectively, of our terminal passenger traffic.
     In 2004, 2005 and 2006, a total of 599,720 terminal passengers, 608,897 terminal passengers and 681,581 terminal passengers, respectively, were served by Zihuatanejo International Airport. Of the terminal passengers in 2004, 54.9% were domestic and 45.1% were international passengers. Of the terminal passengers in 2005, 51.5% were domestic and 48.5% were international passengers. In 2006, 51.7% were domestic and 48.3% were international. Because the airport’s passengers are predominantly tourists, the airport’s passenger traffic and results of operations are seasonal and are affected by Mexican economic conditions.

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     A total of 12 commercial airlines operate at the airport, the principal ones of which are Aeroméxico, Alaska Airlines and Click Mexicana. Other non-Mexican airlines operating at the airport include Alaska Airlines, Airline Charter Enterprises and Continental, and VivaAerobus has announced that it intends to establish service to Zihuatanejo in 2007. Airlines operating at this airport serve seven destinations. Of these destinations, Mexico City, Dallas, Houston, Phoenix and Los Angeles are the principal routes. In 2005 we entered into agreements with three new low-cost Mexican carriers for the operation of four additional routes to and from the airport and the United States, under the amended bilateral aviation agreement entered into between Mexico and the United States in December 2005.
     Zihuatanejo International Airport is located approximately 12 kilometers (7 miles) from the city of Zihuatanejo. Situated in the state of Guerrero and with a population of approximately 10,000 people, the city of Zihuatanejo is one of Mexico’s most attractive tourist destinations, with approximately 4,353 hotel rooms, a marina, world-class golf courses and a growing residential real estate market.
     Zihuatanejo International Airport operates 14 hours daily, from 7:00 a.m. to 9:00 p.m., with an extended schedule from 5:00 a.m. to 12:00 a.m. The airport has one runway, which is 2,500 meters (8,202 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 6,905 square meters (74,325 square feet), including 941 square meters (10,131 square feet) of commercial space. It has a five-position commercial aviation apron, a 30-position general aviation apron and two taxiways. The airport has four gates for international or domestic flights.
     The quality of services offered at the Zihuatanejo International Airport has improved as a result of the recent the expansion and renovation of the baggage claim, passenger waiting and commercial areas.
Regional Cities
Chihuahua International Airport
     Chihuahua International Airport is our seventh most important airport in terms of passenger traffic, air traffic movements and contribution to revenues. According to the Mexican Bureau of Civil Aviation, Chihuahua International Airport was the eighteenth busiest airport in Mexico in 2006, in terms of commercial aviation passenger traffic. In 2004, 2005 and 2006, it accounted for approximately 5.7%, 5.7% and 5.6%, respectively, of our terminal passenger traffic.
     In 2004, 2005 and 2006, a total of 556,074 terminal passengers, 599,977 terminal passengers and 664,392 terminal passengers, respectively, were served by Chihuahua International Airport. Of the terminal passengers in 2004, 91.1% were domestic and 8.9% were international passengers. Of the terminal passengers in 2005, 88.9% were domestic and 11.1% were international passengers. In 2006, 88.6% were domestic and 11.4% 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 nine commercial airlines operate at the airport, of which the principal ones are Aeroméxico, Aerolitoral and Azteca. Airlines operating at this airport serve 11 destinations. In addition, VivaAerobus began service to Chihuaha in December 2006. The principal routes are Mexico City, Monterrey, Toluca, Hermosillo, Houston and Dallas/Fort Worth. On March 26, 2007, Mexican regulatory authorities announced an immediate suspension of Azteca, which accounted for approximately 9.2% of our revenue at the airport in 2006, due to safety concerns and financial problems. We cannot guarantee whether or not Azteca will resume operations at the end of the suspension period or whether the suspension will have a material effect on our results from operations for 2007.

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     Chihuahua International Airport is located approximately 18 kilometers (11 miles) from the City of Chihuahua, which is the capital of the state of Chihuahua. The city’s population is approximately 722,297. The state of Chihuahua ranks fifth largest in terms of GDP. Chihuahua’s close proximity to the United States and its highly developed maquiladora industry account for the majority the airport’s incoming and outgoing traffic.
     Chihuahua International Airport operates 14 hours daily, from 7:00 a.m. to 9:00 p.m. (local time), with an extended schedule from 5:00 a.m. to 12:00 a.m. The airport has two runways, with lengths of 2,620 meters (8,596 feet), and 1,100 meters (3,609 feet), respectively. The runway system has a capacity of 40 air traffic movements per hour. The airport occupies a total area of approximately 921.4 hectares (99,178,670 square feet). The airport’s facilities include a terminal building with a total area of approximately 6,292 square meters (67,724 square feet), including 703 square meters (7,563 square feet) of commercial space, a four-position apron for commercial aviation, a 28-position apron for general aviation, four taxiways, a two-position apron for air freight and one air bridge. The airport has four gates for international or domestic flights.
     To accommodate growing demand for air freight services and an expanding local economy, we recently completed construction of a cargo area, which includes a warehouse, a customs office, x-ray zones, storage areas and packaging offices. We currently directly operate all international cargo operations at this airport.
Culiacán International Airport
     Culiacán International Airport is our fourth most important airport in terms of passenger traffic, air traffic movements and contribution to revenues. According to the Mexican Bureau for Civil Aviation, Culiacán International Airport was the thirteenth busiest airport in Mexico in 2006, in terms of commercial aviation passenger traffic. In 2004, 2005 and 2006, it accounted for approximately 6.9%, 7.3% and 7.2%, respectively, of our terminal passenger traffic.
     In 2004, 2005 and 2006, a total of 673,002 terminal passengers, 769,118 terminal passengers and 843,989 terminal passengers, respectively, were served by Culiacán International Airport. Of the terminal passengers in 2004, 94.1% were domestic and 5.9% were international passengers. Of the terminal passengers in 2005, 95.2% were domestic and 4.8% were international passengers. In 2006, 96.9% were domestic and 3.1% were international. Because the airport’s passengers are predominantly domestic, the airport’s passenger traffic and results of operations are highly affected by Mexican economic conditions.
     The airport’s terminal passenger traffic consists predominantly of commercial aviation. In 2004, 2005 and 2006, commercial aviation accounted for approximately 94.1%, 92.2% and 93.0% respectively, and general aviation accounted for approximately 5.9%, 7.8% and 7.0%, respectively, of the airport’s terminal passenger traffic.
     A total of eight commercial airlines regularly operate at the airport, the principal ones of which are Aeroméxico, Aerolitoral, Aviacsa, Mexicana Avolar and VivaAerobus. In April 2006, Mexican regulatory authorities suspended the operations of Aerocalifornia, which accounted for approximately 25% of the airport’s commercial passenger traffic in 2005, due to safety concerns relating to the carrier’s fleet of aircraft. Although Aerocalifornia resumed limited operations in August 2006, we believe that Mexicana, which established routes to and from this airport in June 2006 similar to those historically served by Aerocalifornia, has absorbed a substantial portion of the passenger traffic previously served by Aerocalifornia.

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     Airlines operating at this airport serve eight destinations. Of these destinations, Mexico City, Tijuana, Guadalajara, Monterrey, Hermosillo, La Paz and Los Angeles are the most important routes. VivaAerobus, Delta and Volaris began servicing routes to the airport in 2006. Continental and Delta expressed interest in servicing these routes, and we anticipate that both carriers will serve the airport in the near future.
     Culiacán International Airport is located approximately 12 kilometers (7 miles) from the city of Culiacán, whose population is approximately 750,000. Culiacán is the capital of the state of Sinaloa, an important producer of beef and agricultural products. The potential for growth of exports to the United States could generate an increase cargo operations at this airport, though we can offer no assurances that such growth will in fact occur or that cargo operations would increase as a result thereof.
     Although Culiacán International Airport operates 16 hours daily, from 6:00 a.m. to 10:00 p.m. (local time), it frequently extends its hours of operation until 11:30 p.m. to service cargo operations. Its runway capacity is 20 air traffic movements per hour. The airport occupies a total area of 289.9 hectares (31,204,576 square feet) and has two air bridges.
     In 2002, in order to improve efficiency, we completed construction of a new 8,046-square meter (86,607-square foot) terminal that includes 1,133 square meters (12,197 square feet) of commercial space, a boarding lounge, 15 commercial establishments, a 238-space public parking area, and a 73-space parking area for employees and authorities, a five-position apron for commercial aviation and two air bridges.
     Culiacán International Airport also includes military installations. The presence of these installations does not currently limit the airport’s runway capacity or otherwise affect its civil aviation operations, and we have no reason to anticipate that it will do so in the future.
Durango International Airport
     In each of 2004, 2005 and 2006, Durango International Airport accounted for approximately 2.2%, 2.0% and 2.0% of our terminal passenger traffic.
     In 2004, 2005 and 2006, a total of 210,774 terminal passengers, 214,920 terminal passengers and 236,200 terminal passengers, respectively, were served by Durango International Airport. Of the terminal passengers in 2004, 78% were domestic and 22% were international passengers. Of the terminal passengers in 2005, 80.5% were domestic and 19.5% were international passengers. In 2006, 81.3% were domestic and 18.7% 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 seven commercial airlines operate at the airport, the principal ones of which are Aeromar, Continental, Aeromexico, Avolar and VivaAerobus. In April 2006, Mexican regulatory authorities suspended the operations of Aerocalifornia, which accounted for 50% of the airport’s revenues in 2005, due to safety concerns relating to the carrier’s fleet of aircraft. Although Aerocalifornia resumed limited operations in August 2006, we believe that AVolar, which recently established routes to and from this airport similar to those historically served by Aerocalifornia, could absorb a substantial portion of the passenger traffic previously served by Aerocalifornia.
     Airlines operating at this airport service eight destinations. Of these, Chicago, Mexico City, Tijuana and Los Angeles are the most important routes.

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     Durango International Airport is located approximately 16 kilometers (10 miles) from the City of Durango, which has a population of approximately 500,000 people. The state of Durango is rich in natural resources and is Mexico’s leading producer of wood, gold and bentonite, and the second leading producer of silver.
     Durango International Airport operates 14 hours daily, from 6:00 a.m. to 8:00 p.m. (local time). 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 552.2 hectares (59,438,313 square feet). Its facilities include a 4,000 square meters (43,056 square feet) terminal building with 143 square meters (1,539 square feet) of commercial space. It has a three-position commercial aviation apron, a 26-position general aviation apron, and an 84-space public parking area. The airport has two gates for international or domestic flights.
     Recent improvements to the airport include the construction of a new boarding lounge for international and domestic flights, the expansion of the concourse, the renovation of commercial spaces and the addition of separate domestic and international baggage claim areas.
San Luis Potosí International Airport
     In 2004, 2005 and 2006, San Luis Potosí International Airport accounted for approximately 2.0%, 2.2% and 1.9%, respectively, of our terminal passenger traffic.
     In 2004, 2005 and 2006, a total of 195,700 terminal passengers, 233,610 terminal passengers and 227,102 terminal passengers, respectively, were served by San Luis Potosí International Airport. Of the terminal passengers in 2004, 75.9% were domestic and 24.1% were international passengers. Of the terminal passengers in 2005, 70.0% were domestic and 30.0% were international passengers. In 2006, 66.4% were domestic and 33.6% 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 five commercial airlines operate at the airport, of which the principal ones are Aeromar, Continental, American and Mexicana. Airlines operating at this airport serve four destinations. VivaAerobus has announced that it intends to begin service to the airport beginning January 2007. Of these destinations, the airport’s most important routes are Mexico City, Monterrey and Houston.
     San Luis Potosí International Airport 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 approximately 670,532. The city of San Luis Potosí is equidistant (300 kilometers) from three of the most important cities in Mexico (Mexico City, Guadalajara and Monterrey). It is located within an area that represents 80%, in the aggregate, of Mexico’s total economic consumption, making it a natural distribution center for packing and shipping companies. In 2005, in collaboration with Estafeta Mexicana S.A. de C.V., a major Mexican airfreight company, we completed the construction of an international cargo facility at this airport, which Estafeta Mexicana now occupies.
     The airport operates 24 hours daily and can serve as an alternate airport for Mexico City. The airport has two runways and main runway capacity of 20 air traffic movements per hour. The principal runway is 3,000 meters (9,843 feet) long and the secondary runway is 1,000 meters (3,281 feet) long. With a total area of 527.7 hectares (56,801,155 square feet), the airport’s facilities include a terminal building with approximately 2,613 square meters (28,126 square feet), including 287 square meters

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(3,090 square feet) of commercial space, a three-position platform for commercial aviation, a 26-position platform for general aviation, three taxiways and a boarding lounge.
     The terminal building was remodeled in 2003.
Tampico International Airport
     According to the Mexican Bureau of Civil Aviation, Tampico International Airport was the twenty-fourth busiest airport in Mexico in 2006, in terms of commercial aviation passenger traffic. In 2004, 2005 and 2006, it accounted for approximately 3.4%, 3.8% and 4.1%, respectively, of our terminal passenger traffic.
     In 2004, 2005 and 2006, a total of 333,696 terminal passengers, 402,122 terminal passengers and 485,125 terminal passengers, respectively, were served by Tampico International Airport. Of the terminal passengers in 2004, 89.3% were domestic and 10.7% were international passengers. Of the terminal passengers in 2005, 88.7% were domestic and 11.3% were international passengers. In 2006, 89.1% were domestic and 10.9% 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.
     Seven commercial airlines operate at the airport, the principal ones of which are (Mexicana, Aerolitoral, Aviacsa, Interjet, Continental and VivaAerobus). Airlines operating at this airport serve six destinations. Of these destinations, the airport’s principal routes are Mexico City, Toluca, Monterrey, Houston and Veracruz.
     Tampico International Airport serves the industrial zone of Tampico, Ciudad Madero and Altamira, which have a combined population of approximately 700,000. This industrial zone is home to companies in the petroleum and chemical industries.
     Tampico International Airport operates daily from 6:30 a.m. to 9:30 p.m. The airport has two runways in operation. The principal runway is 2,550 meters (8,366 feet) long with a capacity of 22 air traffic movements per hour and includes an instrument landing system (ILS), which provides precise guidance to assist aircraft during landing. The secondary runway is 1,300 meters (4,265 feet) in length.
     The airport’s total area is 391.7 hectares (42,162,237 square feet). Its facilities include a 6,250 square meter (67,275 square feet) terminal building, of which 514 square meters (5,531 square feet) are commercial space. It has a four-position apron for commercial aviation, a 36-position apron for general aviation, two taxiways and a boarding lounge.
     The Tampico International Airport terminal was recently remodeled to include additional commercial space and an exhibition area.
Torreón International Airport
     In 2004, 2005 and 2006, Torreón International Airport accounted for approximately 3.7%, 3.5% and 3.5%, respectively, of our terminal passenger traffic.
     In 2004, 2005 and 2006, a total of 361,400 terminal passengers, 374,559 terminal passengers and 410,124 terminal passengers, respectively, were served by Torreón International Airport. Of the terminal passengers in 2004, 86.8% were domestic and 13.2% were international passengers. Of the terminal passengers in 2005, 82.8% were domestic and 17.2% were international passengers. In 2006, 82.0% were

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domestic and 18% 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 seven commercial airlines operate at the airport, serving 11 destinations. Of these destinations, the airport’s principal routes are Ciudad Juárez, Los Angeles, Mexico City, Guadalajara and Monterrey.
     The principal commercial airlines are Aeroméxico, Aerocalifornia, Aerolitoral, Click Mexicana, Continental and American Airlines. VivaAerobus and Delta also recently established service to the airport. In April 2006, Mexican regulatory authorities suspended the operations of Aerocalifornia, due to safety concerns relating to the carrier’s fleet of aircraft. Although Aerocalifornia resumed limited operations in August 2006, we believe that Click Mexicana, which established routes to and from this airport in June 2006 similar to those historically served by Aerocalifornia, has absorbed a substantial portion of the passenger traffic previously served by Aerocalifornia.
     Torreón International Airport is located in the city of Torreón, which is part of the La Laguna region, which is Mexico’s top dairy-producing region and an important industrial and commercial region, with nearly 300 maquiladoras. Approximately 530,000 people live in the city of Torreón and about one million live in La Laguna region.
     Torreón International Airport operates 14 hours daily, from 7:00 a.m. to 9:00 p.m. (local time). The airport has two runways. The principal runway measures 2,750 meters (9,022 feet) in length with a runway capacity of 20 air traffic movements per hour, and the secondary runway measures 1,740 meters (5,709 feet) in length.
     The airport’s total area is 460 hectares (49,513,987 square feet). Its facilities include a terminal building, a seven-position apron for commercial aviation, a 14-position apron for general aviation, two taxiways, a boarding lounge and one air bridge. As a result of the recent remodeling and expansion project, the airport’s terminal building now includes additional check-in counters, VIP lounges and a second floor with an additional boarding lounge and a boarding bridge. The terminal building occupies approximately 5,275 square meters (56,780 square feet), including 460 square meters (4,950 square feet) of commercial space.
Zacatecas International Airport
     In 2004, 2005 and 2006, Zacatecas International Airport accounted for approximately 2.4%, 2.8% and 2.8%, respectively, of our terminal passenger traffic.
     In 2004, 2005 and 2006, a total of 236,692 terminal passengers, 297,137 terminal passengers and 332,224 terminal passengers, respectively, were served by Zacatecas International Airport. Of the terminal passengers in 2004, 59.5% were domestic and 40.5% were international passengers. Of the terminal passengers in 2005, 66.6% were domestic and 33.4% were international passengers. In 2006, 70.9% were domestic and 29.1% 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.
     Three commercial airlines operate at the airport (Mexicana, Azteca and Transportes Aeromar), serving seven destinations, and VivaAerobus and Delta have announced that they intend to establish service to the airport in 2007. Of these destinations, the airport’s principal national routes are Tijuana, Bajío and connecting flights via Mexico City. Airlines serving the airport recently added service to the United States cities of Chicago, Los Angeles and Oakland. On March 26, 2007, Mexican regulatory

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authorities announced an immediate suspension of Azteca, which accounted for approximately 13.7% of our revenue at the airport in 2006, due to safety concerns and financial problems. We cannot guarantee whether or not Azteca will resume operations at the end of the suspension period or whether the suspension will have a material effect on our results from operations for 2007.
     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 1.4 million.
     The airport currently operates 24 hours daily. 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 218 hectares (23,465,324 square feet). The terminal building is 3,700 square meters (39,827 square feet), of which 156 square meters (1,676 square feet) is commercial area. It has a three-position apron for commercial aviation, a 12-position apron for general aviation, a boarding lounge, and a parking lot with 128 parking spaces.
Border Cities
Ciudad Juárez International Airport
     In 2004, 2005 and 2006, Ciudad Juárez International Airport accounted for approximately 5.9%, 5.8% and 5.9%, respectively, of our terminal passenger traffic.
     In 2004, 2005 and 2006, a total of 570,923 terminal passengers, 611,942 terminal passengers and 698,765 terminal passengers, respectively, were served by Ciudad Juárez International Airport. Of the terminal passengers in 2004, 99.7% were domestic. Of the terminal passengers in 2005, 99.7% were domestic. In 2006, 99.8% were domestic.
     Eight commercial airlines operate at the airport, serving eight destinations. The airport’s principal routes are Mexico City, Torreón, Monterrey, Guadalajara and Chihuahua.
     The airport is located in the city of Ciudad Juárez, which is near the U.S. border and has a population of approximately 1.2 million people. The city is a major center of the maquiladora industry, with about 400 automobile, electric and textile plants. Countries such as Singapore, Germany, France, Taiwan and the United States, as well as international companies such as Delphi, Lear, Toshiba, Johnson & Johnson, Ford and Motorola, have made investments in Ciudad Juárez. In addition, 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. Accordingly, 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.
     Ciudad Juárez International Airport operates 14 hours daily, from 7:00 a.m. to 9:00 p.m. (local time). The airport has two runways. The principal runway measures 2,700 meters (8,858 feet) in length with a capacity of 20 air traffic movements per hour, and the secondary runway measures 1,750 meters (5,741 feet) in length.
     The airport’s total area is 921.4 hectares (99,178,670 square feet). Its facilities include a terminal building of 4,275 square meters (46,016 square feet), consisting of 471 square meters (5,069 square feet) of commercial space, a boarding lounge and two air bridges. The airport has a five-position commercial

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aviation apron, a nine-position general aviation apron, a one-position freight services apron and three taxiways. The airport has four gates for international and domestic flights.
     A new international cargo terminal was completed in 2005, which we anticipate will allow the airport to grow as a center for the shipment and distribution of goods in Mexico’s northern region. The new terminal includes a cargo apron, a warehouse, customs offices and public parking facilities.
Reynosa International Airport
     In 2004, 2005 and 2006, Reynosa International Airport accounted for approximately 1.5%, 1.4% and 1.2%, respectively, of our terminal passenger traffic.
     In 2004, 2005 and 2006, a total of 145,075 terminal passengers, 146,250 terminal passengers and 136,991 terminal passengers, respectively, were served by Reynosa International Airport. Of the terminal passengers in 2004, 2005 and 2006, 99.9% were domestic. Because the airport’s passengers are predominantly domestic, the airport’s passenger traffic and results of operations are affected by Mexican economic conditions.
     Two commercial airlines operate at the airport, serving Mexico City and Poza Rica.
     The airport is located in Reynosa, a city of 800,000 inhabitants bordering the United States near the Gulf of Mexico. The city is a major maquiladora center, particularly for the electricity sector. We believe that Reynosa’s robust industrial economic activity and proximity to the United States create the potential for growth in air cargo services at the Reynosa International Airport, and we recently completed the construction of a new international cargo facility at the airport. In addition, 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. Accordingly, 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.
     Reynosa International Airport operates 12 hours daily, from 7:00 a.m. to 7:00 p.m. (local time). The airport has one runway, which is 1,900 meters (6,234 feet) in length and has a runway capacity of 18 air traffic movements per hour.
     The airport’s total area is approximately 418 hectares (44,993,146 square feet). The terminal building is 1,212 square meters (13,046 square feet), which includes 135 square meters (1,458 square feet) of commercial area. It has a three-position apron for commercial aviation, a 12-position apron for general aviation, two taxiways, two private hangars, a boarding lounge, and a public parking area with 144 spaces.
Principal Customers
Principal Aeronautical Services Customers
Airline Customers
     As of December 31, 2006, over 20 international airlines and 14 Mexican airlines operated flights at our 13 airports. Aeroméxico and Aerolitoral operate the most flights at our airports, followed by Aviacsa, Mexicana and Click. In 2006, revenues from Aeroméxico and its affiliates totaled Ps. 377.9 million (U.S.$ 35.0 million), while revenues from Mexicana and its affiliates were Ps. 186.5 million (U.S.$ 17.3 million), and from Aviacsa and its affiliates were Ps. 151.3 million (U.S.$14.0 million),

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representing 24.0%, 11.8% and 9.6%, respectively, of our aeronautical revenues from airline customers for 2006. These revenues were earned from passenger charges, landing charges, aircraft parking charges and the leasing of space to these airlines.
     Historically, traditional carriers such as Aeroméxico and Mexicana have 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 2006, passengers traveling on discount and low-cost carriers, such as Avolar, Azteca, Interjet, Volaris, Alma and VivaAerobus accounted for approximately 9.7% of our commercial aviation passenger traffic. Since air transportation historically has been affordable only to the higher income segments of Mexico’s population, resulting in a comparatively low level of air travel, we believe that the entry of low-cost and discount carriers into the Mexican commercial airline market has the potential to significantly increase the use of air transportation in Mexico.
     Aeroméxico currently is owned by Consorcio Aeroméxico (formerly known as Cintra). The Mexican government directly owns approximately 10% of the capital stock of Consorcio Aeroméxico, and approximately 3.5% of the capital stock of Consorcio Aeroméxico is owned by NAFIN and approximately 50% of the capital stock of Consorcio Aeroméxico is owned by the Institute for the Protection of Bank Savings, a decentralized entity of the Mexican federal government. Consorcio Aeroméxico has announced that it is seeking to sell its interest in Grupo Aeroméxico, including its subsidiaries Aeroméxico and Aerolitoral. Until recently Consorcio Aeroméxico also owned Grupo Mexicana, whose subsidiaries include Mexicana and Click Mexicana (formerly known as Aerocaribe). In December 2005, the board of directors of Cintra sold Grupo Mexicana to Grupo Posadas, S.A de C.V., the largest hotel operator in Mexico. Grupo Aeroméxico and Grupo Mexicana also control other airlines operating in our airports, including Aerolitoral and Click, as well as the largest provider of baggage and ramp handling services at our airports SEAT, a joint venture between Grupo Aeroméxico and Grupo Mexicana.
     Aeroméxico and Mexicana, along with Aeromar and Aerolitoral, have in the past refused to pay certain increases in our airport service charges. In December 2001, we entered into an agreement with the National Air Transportation Chamber and the Ministry of Communications and Transportation pursuant to which we resolved existing disputes with our principal airline customers and established specific prices for aeronautical services applicable to those airlines. The National Air Transportation Chamber agreed to cause our principal airline customers to enter into (a) contracts governing charges for aeronautical services and (b) lease contracts for property used by the airlines. These airlines entered into agreements with us that are currently in effect, in some cases as a result of periodic renegotiations and resignations. Although this agreement expired in December 2005, we continued to charge its principal airline customers in accordance with the terms of the agreement until October 31, 2006, when we entered into a new agreement with the National Air Transportation Chamber that offers incentives, including discounts on airport charges, for the establishment of new routes and other measures expected to increase passenger traffic volume at our airports. These incentives could reduce our aeronautical revenues per terminal passenger in the future.
     In April 2006, Mexican regulatory authorities suspended the operations of Aerocalifornia due to safety concerns relating to the carrier’s fleet of aircraft. Services provided to Aerocalifornia accounted for approximately 6.0% of our revenues in 2005, primarily at our Culiacán, Durango and Torréon International Airports. Aerocalifornia resumed limited operations in August 2006. On March 26, 2007, Mexican regulatory authorities announced an immediate suspension of Azteca, which accounted for approximately 3.6% of our revenue in 2006, due to safety concerns and financial problems. We cannot guarantee whether or not Azteca will resume operations at the end of the suspension period or whether the

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suspension will have a material effect on our results from operations for 2007. As of May, 2007, domestic air traffic at the Zacatecas airport had decreased 17.4% since December 31, 2006 due to such suspension. Any similar suspension affecting our principal airline customers could have a material adverse effect on out results of operations.
     The following chart sets forth our principal air traffic customers as of December 31, 2006.
         
    Percentage of
Principal Air Traffic Customers   2006 Revenues
Domestic:
       
Aeroméxico
    20.2 %
Mexicana
    14.3 %
Aviacsa
    11.2 %
Aerolitoral
    8.4 %
Interjet
    4.8 %
Aerocalifornia
    2.6 %
Líneas Aéreas Azteca
    3.6 %
Grupo Aeromonterrey
    3.1 %
 
       
Other
    13.2 %
 
       
Total Domestic
    81.4 %
 
       
 
International:
       
Continental
    6.8 %
American Airlines (including American Eagle)
    4.1 %
Alaska Airlines
    1.7 %
America West (including Mesa Airlines)
    1.1 %
Charters
    2.3 %
Other
    2.6 %
 
       
Total International
    18.6 %
 
       
Total
    100 %
 
       
Complementary Services Customers
     Our principal complementary services clients are two principal providers of ramp handling and baggage handling services, Menzies Aviation and SEAT, which provided Ps. 4.4 million of revenues in the form of access fees in 2006. Although SEAT is the primary provider of complementary services in our airports we earn only nominal portion of this revenue from SEAT.
     Our primary catering clients are Comisariato Gotre, S.A. de C.V. and Aerococina, S.A. de C.V., which provided Ps. 2.5 million in revenues in the form of access fees in 2006.
Principal Non-aeronautical Services Customers
     At December 31, 2006, we were party to approximately 700 contracts with providers of commercial services in the commercial space in our airports, including retail store operators, duty free store operators, food and beverage providers, financial services providers, car rental companies, telecommunications providers, VIP lounges, advertising, travel agencies, time-share sales and promotions

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services and tourist information and promotion services. As a result, our revenues from non-aeronautical services commercial customers are spread across a large number of customers and are, therefore, not dependent on a limited number of principal customers. In 2006, our largest commercial customers were Publitop (advertising), Aeroboutiques (duty free and duty paid stores), Aerocomidas (food and beverage), Cenca (magazines), Telmex (telecommunications), Aeroméxico, Aerolitoral, Mexicana and the American Express Company (VIP lounges).
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. As a result, our operating results for a quarterly period are not necessarily indicative of operating results for an entire year, and historical operating results are not necessarily indicative of future operating results.
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 International 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 Puerto Rico, Florida, 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 the attractiveness of other commercial and industrial centers in Mexico that 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. There can be no assurance that the locations we serve will continue to attract the same level of passenger traffic in the future.
     The Mexican Airport and Auxiliary Services Agency currently operates 19 small airports in Mexico’s central and northern regions. The Mexican Airport and Auxiliary Services Agency estimates that its airports collectively account for less than 27.3% of the passenger traffic in this region.
     In the future, we may also 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. Recently, the state of Nuevo Leon has approached the Ministry of Communications and Transportation to discuss the amendment of Aeropuerto del Norte’s concession to allow it to serve commercial aviation operations. We understand that Aeropuerto del Norte is not capable of accommodating commercial traffic with its current infrastructure. To date, the Ministry of Communications and Transportation has not amended Aeropuerto del Norte’s concession. However, there can be no assurance that the Ministry of Communications and Transportation will not authorize such

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an amendment and that commercial aviation flights will not operate from Aerpuerto del Norte in the future.
     In addition, the Mexican government could grant new concessions to operate existing government-managed airports or authorize the construction of new airports, which could compete directly with our airports. Any competition from other such airports could have a material adverse effect on our business and results of operations.
REGULATORY FRAMEWORK
Sources of Regulation
     The following are the principal laws, regulations and instruments that govern our business and the operation of our airports:
    the Mexican Airport Law (Ley de Aeropuertos), enacted December 22, 1995;
 
    the regulations under the Mexican Airport Law (Reglamento del la Ley de Aeropuertos), enacted February 17, 2000;
 
    the Mexican Communications Law (Ley de Vias Generales de Comunicación), enacted February 19, 1940;
 
    the Mexican Civil Aviation Law (Ley de Aviación Civil), enacted May 12, 1995;
 
    the Mexican Federal Duties Law (Ley Federal de Derechos), enacted December 31, 1981, which may be revised on an annual basis and stipulates the applicable basis and rate for calculating the concession fee and duties payable under the current budget;
 
    the Mexican National Assets Law (Ley de Bienes Nacionales), enacted May 20, 2004;
 
    the concessions that entitle our subsidiaries to operate our 13 airports for a term of fifty years beginning on November 1, 1998; and
 
    the Mexican Federal Economic Competition Law (Ley Federal de Competencia Económica), enacted December 24, 1992.
     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 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 (a) entities considered part of “the federal public administration” as defined under Mexican law and (b) private companies whose principal stockholder 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

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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 Communications and Transportation granted 13 concessions to operate, maintain and develop the 13 principal airports in Mexico’s Central North region to OMA’s 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 14.7% of our capital stock to our strategic stockholder pursuant to the privatization process was conducted through a public bidding process. Each of our concessions was amended on September 12, 2000 in order, among other things, to incorporate each airport’s maximum rates and certain other terms as part of the concession.
     On February 17, 2000, the regulations under the Mexican Airport Law were issued, and 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 Communications and Transportation, and are among the violations that could result in termination of a concession if they occur three or more times.
     On May 20, 2004, a new Mexican National Assets Law was adopted and published in the Official Gazette of the Federation (Diario Oficial de la Federación) which, among other things, establishes regulations relating to concessions on real property held in the public domain, including the airports that we operate. The new Mexican National Assets Law establishes new grounds for revocation of concessions for failure to pay the applicable taxes, but does not specify which taxed must be paid, including whether certain taxes to municipalities must be paid by the concessionaire.
     To the best of our knowledge as of the date hereof, the constitutionality of the new Mexican National Assets Law has not been challenged in Mexico’s court system. If challenged in the future, a court could declare the tax void or determine an alternate amount.
Role of the Ministry of Communications and Transportation
     The Ministry of Communications and Transportation is the principal regulator of airports in Mexico and is authorized by the Mexican Airport Law to perform the following functions:
    plan, formulate and establish the policies and programs for the development of the national airport system;
 
    construct, administer and operate airports and airport-related services for the public interest;
 
    grant, modify and revoke concessions for the operation of airports;
 
    establish air transit rules and rules regulating take-off and landing schedules through the Mexican air traffic control authority;
 
    take all necessary action to create an efficient, competitive and non-discriminatory market for airport-related services, and set forth the minimum operating conditions for airports;
 
    establish safety regulations;
 
    close airports entirely or partially when safety requirements are not being satisfied;

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    monitor airport facilities to determine their compliance with the Mexican Airport Law, other applicable laws and the terms of the concessions;
 
    maintain the Mexican aeronautical registry for registrations relating to airports;
 
    impose penalties for failure to observe and perform the rules under the Mexican Airport Law, the regulations thereunder and the concessions;
 
    approve any transaction or transactions that directly or indirectly may result in a change of control of a concession holder;
 
    approve the master development programs prepared by each concession holder every five years;
 
    determine each airport’s maximum rates;
 
    approve any agreements entered into between a concession holder and a third party providing airport or complementary services at its airport; and
 
    perform any other function specified by the Mexican Airport Law.
     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 Communications and Transportation is required to provide air traffic control, radio assistance and aeronautical communications at Mexico’s airports. The Ministry of 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 Communications and Transportation. Since 1978, the Mexican air traffic control authority has provided air traffic control for Mexico’s airports.
Concession Tax
     Under Article 232-A of the Mexican Federal Duties Law, holders of airport concessions must pay a tax for the use of state-owned assets. As such, each of our subsidiary concession holders is required to pay a concession tax based on its gross annual revenues from the use of public domain assets pursuant to the terms of its concession. Currently, this concession tax is set at a rate of 5% and may be revised at any time by the Mexican government. Our concessions provide that we may request an amendment of our maximum rates if there is a change in this concession tax, although there can be no assurance that this request will be honored.
Scope of Concessions
     We holds 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 Communications and Transportation and to our compliance with the terms of our concession.

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     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 the Mexican Airport Law 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. 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 International Civil Aviation Organization recently 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. Although the Mexican federal government has yet to adopt the new baggage screening guidelines into the Mexican Civil Aviation Law (Ley de Aviación Civil), we expect that Mexican law will require airlines to comply with these guidelines in the near future. We are currently negotiating with our principal airline customers to enter into service agreements pursuant to which we expect to agree to purchase, install and operate new screening equipment and implement other screening measures to facilitate its airline customers’ compliance with the new baggage screening guidelines. Pursuant to these agreements, we expect that the airlines will be obligated to indemnify us for all claims arising out of our purchase, installation or operation of the screening equipment other than claims based on gross negligence or the willful misconduct of its employees. If the new screening equipment signals the potential presence of prohibited items in a passenger’s baggage, the new process would require that such baggage be inspected manually, whether or not its owner is present. The possibility for manual inspections pursuant to the new screening process raises issues concerning the permissibility, under the Mexican constitution, of manual baggage searches, generally, and searches outside the presence of the owners of the baggage, specifically. Although Mexican law holds airlines liable for errors in baggage screening, our purchase, installation and operation of the new equipment could increase our exposure to liability as a result of our involvement in the screening process. Until we agree on the contractual terms with the airlines and the new screening equipment becomes operational, checked baggage will continue to be screened by hand by each airline in order to comply with the new screening guidelines. In some countries, such as the United States of America, the federal government (in the case of the United States, through the Transportation Security Administration) is responsible for screening checked baggage. Under Mexican law, however, airlines are responsible for screening checked baggage. Although Mexican law holds airlines liable for screening checked baggage, the purchase, installation and operation of the new 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 subject to potential liability, if Mexican law changes in the future.

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     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 Communications and Transportation. No agreement documenting liens approved by the Ministry of 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 Communications and Transportation. The Ministry of 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 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.
     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 Communications and Transportation. To date the Ministry of Communications and Transportation has not specified the required amounts of insurance. We may be required to obtain additional insurance once these amounts are specified.
     OMA, together with our subsidiary concession holders are jointly and severally liable to the Ministry of Communications and Transportation for the performance of all obligations under the concessions held by our subsidiaries. Each of our subsidiary concession holders is responsible for the performance of the obligations set forth in its concession and in the master development programs, including the obligations arising from third-party contracts, as well as for any damages to the Mexican government-owned assets that they use and to third-party airport users. In the event of a breach of one concession, the Ministry of Communications and Transportation is entitled to revoke all of the concessions held by our subsidiaries.
     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 the Mexican Airport Law regulations classify the services that may be rendered at an airport into the following three categories:
    Airport Services. Airport services may be rendered only by the holder of a concession or a third party that has entered into an agreement with the concession holder to provide such services. These services include the following:

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    the use of airport runways, taxiways and aprons for landing, aircraft parking and departure;
 
    the use of hangars, passenger walkways, transport buses and car parking facilities;
 
    the provision of airport security services, rescue and firefighting services, ground traffic control, lighting and visual aids;
 
    the general use of terminal space and other infrastructure by aircraft, passengers and cargo; and
 
    the provision of access to an airport to third parties providing complementary services (as defined in the Mexican Airport Law) and third parties providing permanent ground transportation services (such as taxis).
    Complementary Services. Complementary services for which the airlines are responsible may be rendered by an airline, by the airport operator or by a third party under agreements with airlines and the airport operator. These services include: ramp and handling services, checked baggage screening, aircraft security, catering, cleaning, maintenance, repair and fuel supply (provided exclusively by the Mexican government’s Aeropuertos y Servicios Auxiliares, or ASA) and related activities that provide support to air carriers.
 
    Commercial Services. Commercial services involve services that are not considered essential to the operation of an airport or aircraft, and include, among other things, the leasing of space to retailers, restaurants and banks, and advertising.
     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 and ramp handling and baggage handling services and checked baggage services only. We provide all other such services ourselves. All agreements relating to airport or complementary services are required to be approved by the Ministry of 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 are required to be corporations incorporated under Mexican law.
     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. The concession holders have not and do not provide complementary services as these services are provided by third parties.
     In the event of force majeure, the Ministry of 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.

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     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 safety considerations. 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.
Master Development Programs
     Concession holders are also required to submit to the Ministry of Communications and Transportation a master development program describing, among other things, the concession holder’s construction and maintenance plans.
     Every five years, we are required to submit to the Ministry of Communications and Transportation for approval a master development program for each of our concessions describing, among other matters, our strategy, traffic forecasts, and expansion, modernization and maintenance plans for the following 15 years. Each master development program is required to be updated every five years and resubmitted for approval to the Ministry of 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 Communications and Transportation. Information required to be presented in the master development program includes:
    airport growth and development expectations;
 
    15-year projections for air traffic demand (including passenger, cargo and operations);
 
    construction, conservation, maintenance, expansion and modernization programs for infrastructure, facilities and equipment;
 
    a binding five-year detailed investment program and planned major investments for the following ten years;
 
    descriptive airport plans specifying the distinct uses for the corresponding airport areas;
 
    any financing sources; and
 
    environmental protection measures.
     The concessions require the concession holder to provide for a 24-month period to prepare and submit the concession holder’s master development program and consider the necessary requirements of the airport users in the preparation of the master development program, and shall consider the opinions of air carriers and operations and timetable’s committee. The concession holder must submit a draft of the master development program to such committee and air carriers for their review and comments six months prior to its submission for approval to the Ministry of Communications and Transportation. Further, the concession holder must submit, six months prior to the expiration of the five-year term, the new master development program to the Ministry of Communications and Transportation. The Ministry of Communications and Transportation may request additional information or clarification as well as seek further comments from airport users. The Ministry of Defense may also opine on the master development programs.

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     Any major construction project, renovation or expansion relating to an airport can only be done pursuant to the master development program of the concession holder or with the approval of the Ministry of Communications and Transportation. We are required to spend the full amounts set forth in each investment program under its master development programs.
     Changes to a master development program and investment program require the approval of the Ministry of Communications and Transportation, except for emergency repairs and minor works that do not adversely affect an airport’s operations.
     In December 2005, the Ministry of Communications and Transportation approved the master development programs for each of our subsidiary concession holders for the 2006 to 2010 period. These five-year programs will be in effect from January 1, 2006 until December 31, 2010.
     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 Communications and Transportation is entitled to review out compliance thereunder (and apply sanctions accordingly) on a year-by-year basis. Although historically the Ministry of 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 may also conduct more limited reviews of our compliance with our obligations on a year-by-year basis going forward.
Revenue Regulation
     The Mexican Airport Law provides for the Ministry of 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 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, a new regulation, the Rate Regulation, was incorporated within the terms of each of our concessions. This regulation provides a framework for the setting by the Ministry of Communications and Transportation of five-year maximum rates.
Regulated Revenues
     The majority of our revenues are derived from providing aeronautical services, which generally are related to the use of airport facilities by airlines and passengers and principally consist of a fee for each departing passenger, aircraft landing fees based on the aircraft’s weight and arrival time, an aircraft parking fee, a fee for the transfer of passengers from the aircraft to the terminal building and a security charge for each departing passenger.
     Since January 1, 2000, all of our revenues from aeronautical services have been subject to a price regulation system established by the Ministry of Communications and Transportation. 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. We are able to set the specific prices for regulated services, other than complementary services and leasing of space to airlines, for each of our airports, every six months (or more frequently if accumulated inflation since the last adjustment exceeds 5%), as long as the combined revenue from regulated services at an airport does not exceed the maximum

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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.
     In 2006, approximately 81.3% of our total revenues were earned from aeronautical services subject to price regulation under the maximum rates.
     Each airport’s maximum rate is to be determined for each year by the Ministry of 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 Communications and Transportation. The schedule of maximum rates for each airport is to be established every five years.
     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.
Historical Maximum Rates and Maximum Rates for 2006 through 2010
     In 2000, the Ministry of Communications and Transportation set each airport’s maximum rates for the period from January 1, 2001 through December 31, 2005 in connection with the process for the opening of Mexico’s airports to private investment. These initial maximum rates are set forth in the concession for each airport. In December 2005, the Ministry of Communications and Transportation set new airport maximum rates for the period from January 1, 2006 through December 31, 2010.
     The following tables set forth the maximum rates for each of our airports for the periods indicated under our 2001 to 2005 master development programs and under the master development programs that went into effect as of January 1, 2006. These maximum rates are subject to adjustment only under the limited circumstances described below under “Special Adjustments to Maximum Rates.”

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Historical Maximum Rates(1)
                                         
    Year Ended December 31,  
    2001     2002     2003     2004     2005  
Acapulco
  Ps. 127.72     Ps. 123.83     Ps. 122.59     Ps. 121.37     Ps. 120.16  
Ciudad Juárez
    104.37       97.62       96.63       95.67       94.71  
Culiacán
    119.69       113.10       111.98       110.86       109.74  
Chihuahua
    125.53       108.81       107.72       106.64       105.58  
Durango
    132.83       128.70       127.40       126.13       124.88  
Mazatlán
    118.23       112.02       110.90       109.80       108.69  
Monterrey
    122.61       110.81       109.71       108.62       107.53  
Reynosa
    130.64       123.07       121.83       120.60       119.41  
San Luis Potosí
    139.40       93.24       92.30       91.38       90.47  
Tampico
    132.10       126.49       125.22       123.97       122.73  
Torreón
    124.07       118.98       117.79       116.62       115.44  
Zacatecas
    129.18       124.38       123.12       121.90       120.68  
Zihuatanejo
    110.93       108.22       107.14       106.07       105.00  
 
(1)   Expressed in constant pesos as of December 31, 2006.
Current Maximum Rates(1)
                                         
    Year ended December 31,  
    2006     2007     2008     2009     2010  
Acapulco
  Ps. 134.77     Ps. 133.75     Ps. 132.75     Ps. 131.75     Ps. 130.76  
Ciudad Juárez
    105.30       104.51       103.73       102.95       102.18  
Culiacán
    116.54       115.67       114.81       113.94       113.08  
Chihuahua
    114.22       113.37       112.51       111.67       110.83  
Durango
    130.15       129.17       128.20       127.24       126.29  
Mazatlán
    133.76       132.76       131.76       130.77       129.80  
Monterrey
    107.79       106.98       106.18       105.39       104.60  
Reynosa
    122.07       121.16       120.25       119.35       118.45  
San Luis Potosí
    91.13       90.45       89.77       89.10       88.43  
Tampico
    129.11       128.14       127.19       126.23       125.28  
Torreón
    131.77       130.77       129.80       128.82       127.86  
Zacatecas
    136.55       135.53       134.51       133.50       132.50  
Zihuatanejo
    137.57       136.54       135.51       134.50       133.49  
 
(1)   Expressed in constant pesos as of December 31, 2006.
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:
    Projections for the following fifteen years of workload units (each of which is equivalent to one terminal passenger or 100 kilograms (220 pounds) of commercial cargo), operating costs and expenses related to services subject to price regulation and pre-tax earnings from services subject to price regulation. The concessions provide that projections for workload units and

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      expenses related to regulated services are to be derived from the terms of the relevant concession holder’s master development program for the following fifteen years.
    Projections for the following fifteen years of capital expenditures related to regulated services, based on air traffic forecasts and quality of standards for services to be derived from the master development programs.
 
    Reference values, which initially were established in the concessions and are designed to reflect the net present value of the regulated revenues minus the corresponding regulated operating costs and expenses (excluding amortization and depreciation), and capital expenditures related to the provision of regulated services plus a terminal value.
 
    A discount rate to be determined by the Ministry of Communications and Transportation. The concessions provide that the discount rate shall reflect the cost of capital to Mexican and international companies in the airport industry (on a pre-tax basis), as well as Mexican economic conditions. The concessions provide that the discount rate shall be at least equal to the average yield of long-term Mexican government debt securities quoted in the international markets during the prior 24 months plus a risk premium to be determined by the Ministry of Communications and Transportation based on the inherent risk of the airport business in Mexico.
 
    An efficiency factor to be determined by the Ministry of Communications and Transportation. For the five-year period ending December 31, 2005, the maximum rates applicable to our airports reflect a projected annual efficiency improvement of 1.0%. For the five-year period ending December 31, 2010, the maximum rates applicable to our airports reflect a projected annual efficiency improvement of 0.75%.
     Our concessions specify a discounted cash flow formula to be used by the Ministry of Communications and Transportation to determine the maximum rates that, given the projected pre-tax earnings, the efficiency adjustment, capital expenditures and discount rate, would result in a net present value equal to the reference values established in connection with the last determination of maximum rates. We prepared a proposal to submit to the Ministry of Communications and Transportation establishing the values we believe should be used with respect to each variable included in the determination of maximum rates, including the efficiency factor, projected capital expenditures and the discount rate. The maximum rates ultimately established by the Ministry of Communications and Transportation reflect a negotiation between the Ministry and us regarding these variables.
     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 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 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 general minimum wage in the Federal District (Mexico City). On December 31, 2006, the daily minimum wage

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in Mexico City was Ps.50.57. As a result, the maximum penalty at such date could have been Ps.2.5 million (U.S.$0.2 million) per airport.
     Our concessions provide that, during 2000 and 2001 the calculation of workload units included only terminal passengers. Beginning January 1, 2002, the Ministry of Communications and Transportation established that the calculation of workload units would also include commercial cargo 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:
    Change in law or natural disasters. A concession holder may request an adjustment in its maximum rates if a change in law with respect to quality standards or safety and environmental protection results in operating costs or capital expenditures that were not contemplated when its maximum rates were determined. In addition, a concession holder may also request an adjustment in its maximum rates if a natural disaster affects demand or requires unanticipated capital expenditures. There can be no assurance that any request on these grounds would be approved.
 
    Macroeconomic conditions. A concession holder may also request an adjustment in its maximum rates if, as a result of a decrease of at least 5% in Mexican gross domestic product in a 12-month period, the workload units processed in the concession holder’s airport are less than that projected when its master development program was approved. To grant an adjustment under these circumstances, the Ministry of Communications and Transportation under the master development program must have already allowed the concession holder to decrease its projected capital improvements as a result of the decline in passenger traffic volume. There can be no assurance that any request on these grounds would be approved.
 
    Increase in concession tax under Mexican Federal Duties Law. An increase in duty payable by a concession holder under the Mexican Federal Duties Law entitles the concession holder to request an adjustment in its maximum rates. There can be no assurance that any request on these grounds would be approved.
 
    Failure to make required investments or improvements. The Ministry of Communications and Transportation annually is required to review each concession holder’s compliance with its master development program (including the provision of services and the making of capital investments). If a concession holder fails to satisfy any of the investment commitments contained in its master development program, the Ministry of Communications and Transportation is entitled to decrease the concession holder’s maximum rates and assess penalties.
 
    Excess revenues. In the event that revenues subject to price regulation per workload unit in any year exceed the applicable maximum rate, the maximum rate for the following year will be decreased to compensate airport users for overpayment in the previous year. Under these circumstances, the Ministry of Communications and Transportation is also entitled to assess penalties against the concession holder.

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Ownership Commitments and Restrictions
     The concessions require us to retain a 51% direct ownership interest in each of its 13 concession holders throughout the term of these concessions. Any acquisition by OMA 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 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 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 Communications and Transportation to such control acquisition. For purposes of this requirement, control is deemed to be acquired in the following circumstances:
    if a person acquires 35% or more of the shares of a concession holder;
 
    if a person has the ability to control the outcome of meetings of the stockholders of a concession holder;
 
    if a person has the ability to appoint a majority of the members of the board of directors of a concession holder; or
 
    if a person by any other means acquires control of an airport.
     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 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 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 spin-off of the concession holder.

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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:
    the expiration of its term;
 
    the surrender by the concession holder;
 
    the revocation of the concession by the Ministry of Communications and Transportation;
 
    the reversion of the Mexican government-owned assets that are the subject of the concession (principally real estate, improvements and other infrastructure);
 
    the inability to achieve the purpose of the concession, except in the event of force majeure;
 
    the dissolution, liquidation or bankruptcy of the concession holder; or
 
    the failure by the concession holder to satisfy the shareholding obligations set forth in the concession.
     Following a concession’s termination, the concession holder remains liable for the performance of its obligations during the term of the concession.
Revocation of Concessions
     A concession may be revoked by the Ministry of Communications and Transportation under certain conditions, including:
    the failure by a concession holder to begin operating, maintaining and developing an airport pursuant to the terms established in the concession;
 
    the failure by a concession holder to maintain insurance as required under the Mexican Airport Law;
 
    the assignment, encumbrance, transfer or sale of a concession, any of the rights thereunder or the assets underlying the concession in violation of the Mexican Airport Law;
 
    any alteration of the nature or condition of an airport’s facilities without the authorization of the Ministry of Communications and Transportation;
 
    use, with a concession holder’s consent or without the approval of air traffic control authorities, of an airport by any aircraft that does not comply with the requirements of the Mexican Civil Aviation Law, that has not been authorized by the Mexican air traffic control authority, or that is involved in the commission of a felony;

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    knowingly appointing a chief executive officer or board member of a concession holder that is not qualified to perform his functions under the law as a result of having violated criminal laws;
 
    the failure by the concession holder to pay the Mexican government the concession tax;
 
    our failure to beneficially own at least 51% of the capital stock of its subsidiary concession holders;
 
    a violation of the safety regulations established in the Mexican Airport Law and other applicable laws;
 
    a total or partial interruption of the operation of an airport or its airport or complementary services without justified cause;
 
    the failure to maintain the airport’s facilities;
 
    the provision of unauthorized services;
 
    the failure to indemnify a third party for damages caused by the provision of services by the concession holder or a third-party service provider;
 
    charging prices higher than those registered with the Ministry of Communications and Transportation for regulated services or exceeding the applicable maximum rate;
 
    any act or omission that impedes the ability of other service providers or authorities to carry out their functions within the airport; or
 
    any other failure to comply with the Mexican Airport Law, its regulations and the terms of a concession.
     The Ministry of 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 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 government-owned assets of Mexico. The surface area of our airports and improvements on such space are considered government-owned assets. A concession concerning government-owned assets may be “rescued”, or revert to the Mexican government prior to the concession’s expiration, when considered necessary for the public interest. In exchange, the Mexican government is required to pay compensation as determined by expert appraisers. Following a declaration of “rescue,” or reversion, the assets that were subject to the concession are automatically returned to the Mexican government.
     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

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during the duration of the emergency. Except in the case of war, the Mexican federal 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.
     The Mexican Airport Law provides that sanctions of up to 200,000 times the minimum daily wage in the Federal District (Mexico City) may be assessed for failures to comply with the terms of a concession. On December 31, 2006, the daily minimum wage in Mexico City was Ps.50.57. As a result, the maximum penalty at such date could have been Ps.2.5 million (U.S.$0.2 million).
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 federal 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 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, there can be no assurance that upon expiration or termination of our concessions the assets used by our subsidiary concession holders to provide services at our airports will not 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. In addition, the government may grant concessions without a public bidding process to the following entities:
    parties who hold permits to operate civil aerodromes and intend to transform the aerodrome into an airport so long as (i) the proposed change is consistent with the national airport development programs and policies, (ii) the civil aerodrome has been in continuous operation for the previous 5 years and (iii) the permit holder complies with all requirements of the concession,

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    current concession holders when necessary to meet increased demand so long as (i) a new airport is necessary to increase existing capacity, (ii) the operation of both airports by a single concession holder is more efficient than other options, and (iii) the concession holder complies with all requirements of the concession,
 
    current concession holders when it is in the public interest for their airport to be relocated,
 
    entities in the federal public administration, and
 
    commercial entities in which local or municipal governments have a majority equity interest if the entities’ corporate purpose is to manage, operate, develop and/or construct airports.
Environmental Matters
Regulation
     Our operations are subject to Mexican federal, state and municipal 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 Balance 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 (Secretaría de Medio Ambiente y Recursos Naturales) and enforced by the Ministry’s enforcement branch, the Federal Office for the Protection of the Environment (Procuraduría Federal de Protección al Ambiente); (ii) the General Law for the Prevention and Integral Management of Waste (Ley General para la Prevención y Gestión Integral de los Residuos), or the Law on Waste, which is also administered by the Ministry of the Environment and Natural Resources and enforced by the Federal Office for the Protection of the Environment; and (iii) the National Waters Law (Ley de Aguas Nacionales) and its regulations, which are administered and enforced by the National Waters Commission, (Comisión Nacional del Agua), also a branch of the Ministry of the Environment and Natural Resources.
     Under the General Environmental Law, regulations have been enacted concerning air pollution, environmental impact, noise control, hazardous waste, environmental audits and natural protected areas. 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 enacted in January 2004, 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. The Mexican government is in the process of developing regulations under the Law on Waste, which we anticipate may be adopted in the near future.
     Pursuant to the National Waters Law, companies that discharge waste waters into national water bodies must comply, among others, with 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.

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     In addition to the foregoing, Mexican Official Norms (Normas Oficiales Mexicanas), which are technical standards issued by competent regulatory authorities pursuant to the General 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, waste water discharges, the generation, handling and disposal of hazardous waste and noise control, among others. Mexican Official Norms on soil contamination and waste management are currently being developed and may also soon be enacted. Although not enforceable, the internal administrative criteria on soil contamination of the Federal Office for the Protection of the Environment are widely used as guidance in cases where soil remediation, restoration or clean-up is required.
     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 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. 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 adopt specific actions within a determined time frame.
     The Federal Office for the Protection of the Environment has confirmed that we have complied with all of the relevant environmental requirements derived from the aforementioned environmental audits at of, and has issued compliance certificates for, all of our airports. These certificates, which are known as Environmental Compliance Certificates (Certificados de Cumplimiento Ambiental) certify compliance with applicable Mexican environmental laws, regulations and applicable Mexican Official Norms and must be renewed on an annual basis. In addition, all of our airports, including the Monterrey International Airport, have received ISO 9000 service and quality certification; and as of April 24, 2007, ISO 9001:2000 service and quality certification.
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 OMA 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. Although there can be no assurance, we believe that we are entitled to indemnification for any liabilities related to the actions our predecessor was required to perform or refrain from performing under applicable environmental laws and under their agreements with environmental authorities. For further information regarding these liabilities, see Note 13 to our audited financial statements.

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     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 expects additional norms to be imposed by the North American Agreement on Environmental Cooperation entered into by Canada, the United States and Mexico in the context of the North American Free Trade Agreement, as well as by other international treaties on environmental matters. 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, there can be no assurance 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.

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ORGANIZATIONAL STRUCTURE
     The following table sets forth our consolidated subsidiaries as of December 31, 2006, including our direct and indirect ownership interest in each:
                 
    Jurisdiction of   Percentage    
Name of Company   Establishment   Owned   Description
Aeropuerto de Acapulco, S.A. de C.V.
  Mexico     100     Holds concession for Acapulco International Airport
Aeropuerto de Ciudad Juárez, S.A. de C.V.
  Mexico     100     Holds concession for Ciudad Juárez International Airport
Aeropuerto de Culiacán, S.A. de C.V.
  Mexico     100     Holds concession for Culiacán International Airport
Aeropuerto de Chihuahua, S.A. de C.V.
  Mexico     100     Holds concession for Chihuahua International Airport
Aeropuerto de Durango, S.A. de C.V.
  Mexico     100     Holds concession for Durango International Airport
Aeropuerto de Mazatlán, S.A. de C.V
  Mexico     100     Holds concession for Mazatlán International Airport
Aeropuerto de Monterrey, S.A. de C.V.
  Mexico     100     Holds concession for Monterrey International Airport
Aeropuerto de Reynosa, S.A. de C.V.
  Mexico     100     Holds concession for Reynosa International Airport
Aeropuerto de San Luis Potosí, S.A. de C.V.
  Mexico     100     Holds concession for San Luis Potosí International Airport
Aeropuerto de Tampico, S.A. de C.V.
  Mexico     100     Holds concession for Tampico International Airport
Aeropuerto de Torreón, S.A. de C.V.
  Mexico     100     Holds concession for Torreón International Airport
Aeropuerto de Zacatecas, S.A. de C.V.
  Mexico     100     Holds concession for Zacatecas International Airport
Aeropuerto de Zihuatanejo, S.A. de C.V.
  Mexico     100     Holds concession for Zihuatanejo International Airport
Servicios Aeroportuarios del Centro Norte, S.A. de C.V.
  Mexico     100     Provider of administrative and other services at certain of our airports.

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PROPERTY, PLANT AND EQUIPMENT
     Pursuant to the Mexican General Law of National Assets, all real estate and fixtures in our airports are owned by the Mexican nation. 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 fifty 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 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 nation, 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, except for those caused by normal wear and tear.
     We use the property constituting our airports pursuant to our concessions. Our corporate headquarters are located on the property of our Monterrey International Airport.
     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 million insurance policy covering damages to our property resulting from certain terrorist acts and a U.S. $500 million policy covering personal and property damages to third parties. We also carry a U.S. $200 million insurance policy covering damage to our assets and infrastructure generally.
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 entirely qualified by reference to, our financial statements and the notes to those financial statements. It does not include all of the information included in our financial statements. You should read our financial statements to gain a better understanding of our business and our historical results of operations.
     Our financial statements were prepared in accordance with Mexican FRS, which differs in certain significant respects from U.S. GAAP. Note 19 to our financial statements provides a description of the principal differences between Mexican FRS and U.S. GAAP as they relate to us.
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 81.3% of our total revenues in 2006 were earned from aeronautical services. Changes in our revenues from aeronautical services are principally driven by the passenger and cargo volume at our airports. Our revenues from aeronautical services are also affected by the maximum rates we are allowed to charge under the price regulation system established by the Ministry of Communications and Transportation and the specific prices we negotiate with airlines for the provision of aeronautical services. The maximum rate system of price regulation that applies to our aeronautical revenues is linked to the

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traffic volume (measured in workload units) at each airport; thus, increases in passenger and cargo volume generally permit greater revenues from aeronautical services. In evaluating our aeronautical revenue, we focus principally on workload units, which measure volume, and aeronautical revenue per workload unit, which measures the contribution to aeronautical revenue from each workload unit.
     We also derive revenue from non-aeronautical activities, which principally relate to the commercial activities carried out at our airports such as the operation of parking facilities, advertising and the leasing of space to restaurants and retailers. Our revenues from non-aeronautical activities are not subject to the system of price regulation established by the Ministry of Communications and Transportation (though they may be subject to regulation by other authorities). Thus, our non-aeronautical revenues are principally affected by the passenger volume at our airports and the mix of commercial activities carried out at our airports. We evaluate our non-aeronautical revenue by analyzing changes in overall non-aeronautical revenue and changes in non-aeronautical revenue per terminal passenger.
Passenger and Cargo Volumes
     The substantial majority of the passenger traffic volume in our airports is made up of domestic passengers. In 2006, for example, approximately 78.6% of the terminal passengers using our airports were domestic. In addition, of the international passengers traveling through our airports, a majority has historically traveled on flights originating in or departing to the United States. Accordingly, our results of operations are influenced strongly by changes to Mexican economic conditions and to a lesser extent influenced by U.S. economic and other conditions, particularly trends and events affecting leisure travel and consumer spending. Many factors affecting our passenger traffic volume and the mix of passenger traffic in our airports are beyond our control.

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     The following table sets forth certain operating and financial data relating to our revenues and passenger and cargo volume for the periods indicated.
                         
    Year ended December 31,
    2004   2005   2006
Domestic terminal passengers(1)
    7,568.7       8,118.9       9,258  
International terminal passengers(1)
    2,170.7       2,479.8       2,525  
Total terminal passengers(1)
    9,739.4       10,598.7       11,783.6  
Cargo(1)
    790.4       808.6       810.9  
Total workload units(1)
    10,529.8       11,407.3       12,594.5  
Change in total terminal passengers(2)
    10.0 %     8.8 %     11.2 %
Change in workload units(2)
    10.1 %     8.3 %     10.4 %
 
                       
Aeronautical revenue(3)
  Ps. 1,044.4     Ps. 1,149.1     Ps. 1,321.3  
Change in aeronautical revenue(2)
    7.7 %     10.0 %     15 %
Aeronautical revenue per workload unit
  Ps. 99.0     Ps. 101.0     Ps. 104.9  
Change in aeronautical revenue per workload unit(1)(2)
    (2.2 )%     1.6 %     3.9 %
 
                       
Non-aeronautical revenue(3)
  Ps. 241.6     Ps. 277.2     Ps. 304.9  
Change in non-aeronautical revenue(2)
    26.5 %     14.7 %     10 %
Non-aeronautical revenue per terminal passenger
  Ps. 25.0     Ps. 26.2     Ps. 25.9  
Change in non-aeronautical revenue per terminal passenger(2)
    15.0 %     5.4 %     (0.4 )%
 
(1)   In thousands. One cargo unit is equivalent to 100 kilograms (220 pounds) of cargo. Under the regulation applicable to OMA’s aeronautical revenues, one workload unit is equivalent to one terminal passenger or 100 kilograms (220 pounds) of cargo.
 
(2)   In each case, as compared to previous period.
 
(3)   In millions of constant pesos.
     In 2006, we served 11.8 million terminal passengers (9.3 million domestic and 2.5 million international) and approximately 921,345 transit passengers.
Classification of Revenues
     We classify our revenues into two categories: revenues from aeronautical services and revenues from non-aeronautical services. Historically, a substantial majority of our revenues have been derived from aeronautical services. For example, in 2006, 81.3% of our revenues were derived from aeronautical services, and the remainder of our revenues were derived from non-aeronautical services.
     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, 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 revenue from non-aeronautical services is not subject to price regulation under our maximum rates and generally includes revenues earned from car parking (which may be subject to certain municipal regulations, but not to our maximum rates), leasing of space in our airports to airlines (for first class/VIP lounges and similar activities not directly related to essential airport operations), rental and royalty payments from third parties operating stores and providing commercial services at our airports, such as car rental agencies, food and beverage providers and retail and duty-free store operators, as well as

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advertising and fees collected from other miscellaneous sources, such as vending machines and timeshare companies.
     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.”
Aeronautical Revenue
     The system of price regulation applicable to our aeronautical revenues establishes a maximum rate in pesos for each airport for each year in a five-year period, which is the maximum annual amount of revenue per workload unit (a workload unit is equal to one terminal passenger or 100 kilograms (220 pounds) of cargo) that we may earn at that airport from aeronautical services. See “Item 4. Regulatory Framework – Aeronatical Service Regulation” for a description of our maximum rates and the rate setting procedures for future periods. The maximum rates for our airports have been determined for each year through December 31, 2010.
     The following table sets forth our revenue from aeronautical services for the periods indicated.
Aeronautical Revenue
                                                 
    Year ended December 31,  
    2004     2005     2006  
    Amount     Percent     Amount     Percent     Amount     Percent  
    (millions of pesos, except percentages)  
Aeronautical Revenue:
                                               
Passenger charges
  Ps. 721.0       69.0 %   Ps. 807.0       70.2 %   Ps. 966.7       73.2 %
Landing charges
    102.0       9.8       109.0       9.5       110.0       8.3  
Aircraft parking charges
    85.0       8.2       87.4       7.6       89.2       6.7  
Airport security charges
    15.0       1.4       17.0       1.5       18.6       1.4  
Passenger walkway charges
    23.0       2.2       26.6       2.3       23.9       1.8  
Leasing of space to airlines
    98.0       9.4       101.5       8.8       113.0       8.6  
Revenues from complementary service providers(1)
    0.4       0.0       0.5       0.1       0.0       0.0  
 
                                   
Total Aeronautical Revenue
  Ps. 1,044.4       100.0 %   Ps. 1,149.0       100.0 %   Ps. 1,321.3       100.0 %
 
                                   
 
(1)   Revenues from complementary service providers consist of access and other fees charged to third parties providing handling, catering and other services at OMAs airports.
     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 leasing of space to airlines, every three months (or more frequently if accumulated inflation since the last adjustment exceeds 5%), as long as the total aeronautical revenue per workload unit each year at each of our airports does not exceed the maximum rate at that airport for that year. 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 2006, passenger charges represented 73.2% of our aeronautical services revenues. In 2006, aeronautical services represented 81.3% of our total revenues.
     We seek to offer incentives, including significant discounts on charges for aeronautical services, to encourage carriers to establish new routes and take other measures expected to increase passenger

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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.
     On November 22, 2006, we delivered a notice to the Mexican National Air Transportation Chamber and the Mexican Directorate General of Civil Aviation (Dirección General de Aeronáutica Civil ) setting forth the following criteria that carriers operating at the Monterrey International Airport must meet in order to qualify for an incentive package that includes a discount equal to Ps.75.00 per departing terminal passenger on passenger charges (representing approximately 40% of our usual passenger charge):
  1.   The carrier must sign a binding agreement with OMA pursuant to which it agrees to meet criteria 2 through 4 below;
 
  2.   The carrier must generate additional traffic levels of 1 million and 2.5 million terminal passengers at the Monterrey International Airport in each of the first and second years, respectively, during which it receives the discount and 3 million terminal passengers in each subsequent year. Such additional passengers may not be as a result of an alliance, agreement, merger or similar transaction. These targets relate only to passengers using Monterrey International Airport and do not include transit passengers;
 
  3.   The carrier must establish or construct its administrative and operation offices and maintenance, operations and traffic facilities on the Monterrey International Airport property; and
 
  4.   The carrier must use the terminal building and/or platforms assigned to it by OMA for its operations.
     We offered this incentive only to airlines meeting the criteria set forth above that notified us in writing of their intent to take advantage of the incentive program within 180 days from the delivery of the notice on November 22, 2006.
     VivaAerobus was the first airline to take advantage of the incentive package described above. VivaAerobus is a joint venture between Grupo de Inversionistas en Autotransporte de Mexico, S.A. and RyanMex, a company controlled by the founder of Ryanair and other investors experienced in the low-cost aviation industry. VivaAerobus established its corporate and operational headquarters and has announced that it intends to establish its maintenance facilities at the Monterrey International Airport. VivaAerobus commenced operations in December 2006 with two aircraft operating nine routes, and we expect VivaAerobus to be operating more than 20 routes serving 11 of our airports from Monterrey by the end of 2007. Eight of these routes are expected to be to destinations not previously served by the Monterrey International Airport. It has also announced that it expects to expand its fleet to ten aircrafts by December 2008.
     We believe that this incentive should contribute to growth of aeronautical revenues at our airports by encouraging carriers to establish new routes that could increase passenger traffic at our airports, although there can be no assurance that the incentive will have the intended effect. Although we expect passenger traffic to increase overall, this incentive is likely to result in decreases in aeronautical revenues per terminal passenger with respect to carriers participating in the incentive program, and may result in an overall decrease in aeronautical revenues per terminal passenger. In addition, there can be no assurance that this discount will not create pressure from other carriers for discounts on prices charged to them.
     In October 2005, the Mexican government, together with Mexico’s main airport groups (including OMA), entered into an agreement aimed at reducing passenger and aircraft congestion at the

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Mexico City International Airport. The agreement is intended to encourage the use of alternative airports, including the Monterrey International Airport, as air transportation hubs for passengers connecting to other final destinations. In addition, the agreement provides financial incentives to airlines, including discounts on airport charges, for the development of new connecting routes using the four alternate airports serving Mexico City’s greater metropolitan area (Puebla, Toluca, Querétaro and Cuernavaca), and for the development of new routes between each of these four airports and other Mexican airports, including our 13 airports.
     In December 2001, we entered into an agreement with the National Air Transportation Chamber and the Ministry of Communications and Transportation pursuant to which we resolved existing disputes with our principal airline customers and established specific prices for regulated aeronautical services applicable to those airlines. Although this agreement expired in December 2005, we continued to charge our principal airline customers in accordance with the terms of the agreement until October 31, 2006, when we entered into a new agreement with the National Air Transportation Chamber. This new agreement offers certain incentives and discounts for the development of new routes and other measures expected to increase passenger traffic volume at our airports. This agreement will expire in December 2008.
     Although we are optimistic about these developments, there can be no assurance that any of these initiatives will be carried out or will increase our passenger traffic volume or our revenues.
     In 2006, our aeronautical revenues represented approximately 90.2% of the amount we were entitled to earn under the maximum rates applicable to all of our airports. To the extent that we offer incentives to carriers to establish routes serving our airports in the future, or other changes to our sources of aeronautical revenue, this percentage could decrease. There can be no assurance that we will be able to collect substantially all of the revenue we are entitled to earn from services subject to price regulation in the future.
Non-aeronautical Revenue
     Non-aeronautical services historically have generated a significantly smaller portion of our total revenues as compared to aeronautical services. The contribution to our total revenues from non-aeronautical services was 18.7% in 2006. Since 2004, our non-aeronautical revenue per terminal passenger increased from Ps.25.0 in 2004 to Ps.25.9 in 2006. In light of the substantial completion of our remodeling efforts at most of our airports and the fixed portion of certain non-aeronautical revenues, we expect non-aeronautical revenue per terminal passenger to remain relatively stable in the coming years.

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     The following table sets forth our revenue from non-aeronautical activities for the periods indicated.
Non-aeronautical Revenue
                                                 
    Year ended December 31,  
    2004     2005     2006  
    Amount     Percent     Amount     Percent     Amount     Percent  
    (millions of pesos, except percentages)  
Non-aeronautical Revenue:
                                               
Commercial Activities:
                                               
Car parking charges
  Ps. 75.7       31.3 %   Ps. 78.9       28.5 %   Ps. 87.5       28.7 %
Advertising
    24.0       9.9       31.6       11.4       34.7       11.4  
Leasing of space(1)
    25.3       10.5       33.1       11.9       35.0       11.5  
Car rentals
    15.9       6.6       20.2       7.3       22.9       7.5  
Food and beverage operations
    13.3       5.5       17.8       6.4       23.8       7.8  
Retail operations
    24.9       10.3       28.1       10.1       29.5       9.7  
Duty-free operations
    15.1       6.3       16.1       5.8       15.4       5.1  
Communications
    2.8       1.2       3.4       1.3       3.8       1.2  
Financial services
    1.4       0.6       2.0       0.7       1.5       0.5  
Time share
    16.7       6.9       16.2       5.9       16.5       5.4  
Other
    13.7       5.7       17.5       6.3       21.0       6.9  
Total commercial activities
    229.0       94.8       264.9       95.6       291.6       95.6  
Recovery of costs(2)
    12.6       5.2       12.3       4.4       13.3       4.4  
 
                                   
Total Non-aeronautical Revenue
  Ps. 241.6       100.0 %   Ps. 277.2       100.0 %   Ps. 304.9       100.0 %
 
                                   
 
(1)   Includes leasing of space in our airports to airlines and complementary service providers (for first class/VIP lounges and other similar non-essential activities).
 
(2)   Recovery of costs consists of utility and maintenance charges that are transferred to airlines and other tenants in our airports.
     The majority of our revenue from non-aeronautical services is derived from car parking (which may be subject to government regulation, but not to our maximum rates), leasing of space in our airports to airlines and complementary service providers (for first class/VIP lounges and similar activities not directly related to essential airport operations), rental and royalty payments from third parties operating stores and providing commercial services at our airports, such as car rental agencies, food and beverage providers, retail and duty free store operators, advertising and fees collected from other miscellaneous sources, such as timeshare companies, vending machines and telecommunications providers.

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Operating Costs
     The following table sets forth our operating costs and certain other related information for the periods indicated.
Operating Costs
                                                 
    Year ended December 31,
    2004   2005   2006
    Amount   % change   Amount   % change   Amount   % change
    (In millions of Pesos except percentages)
Operating Costs:
                                               
Cost of services:
                                               
Employee costs
    115.0       3.7 %     122.7       6.7 %     135.2       10.2 %
Maintenance
    46.0       8.5       52.0       13.0       52.8       1.5  
Safety, security & insurance
    63.7       8.3       69.1       8.4       66.4       (3.9 )
Utilities
    78.1       2.9       83.6       7.0       88.9       6.3  
Other
    42.8       4.8       47.6       11.1       39.6       (16.8 )
Total cost of services
    345.6       5.1       375.0       8.5       382.9       2.1  
General and administrative expenses
    233.3       (5.2 )     235.8       1.1       228.9       (2.9 )
Technical assistance fees
    38.8       1.6       38.6       (0.5 )     47.7       23.6  
Concession taxes
    62.4       9.6       70.0       12.1       81.6       16.6  
Depreciation and amortization:
                                               
Depreciation(1)
    190.9       8.1       201.5       5.5       253.0       25.6  
Amortization(2)
    17.1       (0.6 )     18.1       5.8       28.5       57.5  
Total depreciation and amortization
    208.0       7.4       219.6       5.6       281.5       28.2  
 
                                               
Total operating costs
    888.1       2.8 %     939.0       5.7 %     1,022.6       8.9 %
 
                                               
 
(1)   Reflects depreciation of fixed assets.
 
(2)   Reflects amortization of our concessions and rights to use airport facilities.
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. In recent years, our cost of services has increased modestly from Ps.345.6 million in 2004 to Ps.382.9 million in 2006. This relative stability in cost of services, together with increases in revenue in recent years, have contributed to the increase in our operating margins (defined as income from operations divided by total revenue) from 30.9% in 2004 to 37.1% in 2006.
General and Administrative Expenses
     Our general and administrative expenses consist primarily of administrative overhead costs, fees and expenses paid to consultants and other providers of professional services and other miscellaneous expenses. In recent years, our general and administrative expenses have decreased from Ps.233.3 million in 2004 to Ps.228.9 million in 2006. We anticipate that our general and administrative expenses will increase slightly as a result of costs associated with being a public reporting company in Mexico and the United States.
Technical Assistance Fee and Concession Tax
     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

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exchange for a fee. 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 contract term, the fee is 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 annual consolidated operating income (calculated prior to deducting the technical assistance fee, taxes and depreciation and amortization, in each case determined in accordance with Mexican FRS).
     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 state-owned assets. This tax is currently equal to 5% of the gross annual revenues of each concession holder obtained from the use of public domain assets pursuant to the terms of its concession. The concession tax may be revised at any time by the Mexican government, and there can be no assurance that this tax may not increase in the future. If the Mexican government increases the concession tax, we are entitled to request an increase in its maximum rates from the Ministry of Communications and Transportation; however, there can be no assurance that the Ministry of Communications and Transportation would honor any such request.
Depreciation and Amortization
     Our depreciation and amortization expenses primarily reflect the amortization of our investment in our 13 concessions. The value of our concessions was determined in June 2000, when SETA won the bid to acquire Series BB shares currently representing 14.7% of our capital stock, based on the value assigned by the independent company INGENIAL. In addition, we depreciate the value of certain fixed assets we acquire or build at our airports pursuant to the investment requirements under our master development programs.
Taxation
     We and each of our subsidiaries pay taxes on an individual (rather than consolidated) basis. Mexican companies are generally required to pay the greater of their income tax liability (determined at a rate of 34% for 2003, 33% for 2004, 30% for 2005, 29% for 2006 and 28% thereafter) or their asset tax liability (determined at a rate of 1.8% of the average tax value of virtually all of their assets including, in our case, our concessions), less the average tax value of certain liabilities. If, in any year, the asset tax liability exceeds the income tax liability, the asset tax payment for such excess may be reduced by the amount by which the income tax exceeded the asset tax in the three preceding years. In addition, any required payment of asset tax is creditable against the excess of income tax over asset tax of the following ten years.
     In addition, we amortize our investment in our concessions for tax purposes at a rate of 15% per year. This depreciation reduces our current income tax payments. Because we are required under Mexican FRS to amortize our investment in our concession over a longer period for financial reporting purposes, we will continue to record a deferred tax liability and provision in our financial statements with respect to the difference between the amount of amortization for tax and financial reporting purposes.
     We regularly review our deferred tax assets for recoverability and, if necessary, establish a valuation allowance based on historical taxable income, projected future taxable income and the expected timing of the reversals of existing temporary differences.
     Our effective tax rate in 2004, 2005 and 2006 was 23.3%, 29.5% and 27.8%, respectively. Our relatively low effective tax rate historically was the result on the effect on deferred taxes resulting from decreases in statutory income tax rates (from 33% in 2004 to 30% in 2005, 29% in 2006 and 28% thereafter).

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     We are subject to the statutory employee profit sharing regime established under the Mexican Federal Labor Law. Under this regime, 10% of each unconsolidated company’s annual profits (as calculated for tax purposes) must be distributed among its employees, if any, other than its chief executive officer.
Effects of Devaluation and Inflation
     The following table sets forth, for the periods indicated:
    the percentage that the Mexican peso devalued or appreciated against the U.S. dollar;
 
    the Mexican inflation rate;
 
    the U.S. inflation rate; and
 
    the percentage that Mexican gross domestic product, or GDP, changed as compared to the previous period.
                         
    Year ended December 31,
    2004   2005   2006
Depreciation (appreciation) of the Mexican peso as computed to the U.S. dollar(1)
    (0.8 )%     (4.6 )%     1.6 %
Mexican inflation rate(2)
    5.2 %     3.3 %     4.1 %
U.S. inflation rate(3)
    3.3 %     3.4 %     2.5 %
Increase (decrease) in Mexican gross domestic product(4)
    4.2 %     3.0 %     4.8 %
 
(1)   Based on changes in the rates for calculating foreign exchange liabilities, as reported by Banco de Mexico, or the Mexican Central Bank, at the end of each period, which were as follows: Ps.11.1495 per U.S. dollar as of December 31, 2004, Ps.10.6344 per U.S. dollar as of December 30, 2005, and Ps.10.80 per U.S. dollar as of December 31, 2006.
 
(2)   Based on changes in the Mexican Consumer Price Index from the previous period, as reported by the Mexican Central Bank. The Mexican Consumer Price Index at period-end was 112.550 in 2004, 116.301 in 2005 and 121.015 in 2006.
 
(3)   As reported by the U.S. Department of Labor, Bureau of Labor Statistics.
 
(4)   In real terms, as reported by the Mexican Central Bank.
     Due to the relatively low rate of inflation in Mexico in recent years, inflation has not had a material impact on our revenues or results of operations during the past three years. However, the general condition of the Mexican economy, the devaluation of the peso as compared to the dollar, inflation and high interest rates have in the past adversely affected, and may in the future adversely affect, the following:
    Depreciation and amortization expense. We restate our non-monetary assets to give effect to inflation. The restatement of these assets in periods of high inflation increases the carrying value of these assets in pesos, which in turn increases the related depreciation expense and risk of impairments.
 
    Passenger charges. Passenger charges for international passengers are currently denominated in U.S. dollars (although invoiced and paid in Mexican pesos), while passenger charges for domestic passengers are denominated in pesos. Because Mexican FRS requires Mexican companies to restate their results of operations for prior periods in constant pesos as of the most recent balance sheet date, when the rate of inflation in a period exceeds the depreciation of the peso as compared to the dollar for that period, the peso value of dollar-denominated or dollar-linked revenues in the prior period will be higher than those

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\

    of the current period. This effect may occur despite the fact that the amount of such revenues in dollar terms may have been the same or greater in the current period.
 
    Comprehensive financing cost. As required by Mexican FRS, our comprehensive financing cost reflects gains or losses from foreign exchange transactions and gains or losses from monetary position and, as a result, is impacted by both inflation and devaluations.
 
    Maximum rates in pesos. Our passenger charges for international passengers are denominated in U.S. dollars, but are invoiced and paid in Mexican pesos based on the average exchange rate for the month prior to each flight.
Operating Results by Airport
     The following table sets forth our results of operations for the periods indicated for each of our principal airports.
Airport Operating Results
                         
    Year ended December 31,
    2004   2005   2006
    (millions of pesos, except percentages)
Monterrey:
                       
Revenues:
                       
Aeronautical services
    442.5       481.2       565.9  
Non-aeronautical services
    112.1       137.2       152.0  
Total revenues
    554.6       618.4       717.9  
Operating costs
    277.0       295.6       631.5  
Costs of services
    95.3       99.9       100.1  
General and administrative expenses
    81.7       86.1       421.9  
Depreciation and amortization
    58.7       63.3       73.3  
Income from operations
    277.6       322.8       86.4  
Operating margin(1)
    50.1 %     52.2 %     12.0 %
Acapulco:
                       
Revenues:
                       
Aeronautical services
    93.5       103.5       119.0  
Non-aeronautical services
    18.2       18.6       20.6  
Total revenues
    111.7       122.1       139.6  
Operating costs
    101.5       110.4       120.3  
Costs of services
    39.0       47.5       48.3  
General and administrative expenses
    25.1       24.4       28.3  
Depreciation and amortization
    27.7       29.3       36.9  
Income from operations
    10.2       11.7       19.3  
Operating margin(1)
    9.1 %     9.6 %     13.8 %
Mazatlán:
                       
Revenues:
                       
Aeronautical services
    81.9       87.2       93.6  
Non-aeronautical services
    27.5       29.7       30.1  
Total revenues
    109.4       116.9       123.7  
Operating costs
    84.6       89.4       108.5  
Costs of services
    31.0       32.0       34.3  
General and administrative expenses
    22.4       26.2       42.6  
Depreciation and amortization
    22.0       22.4       25.4  
Income from operations
    24.8       27.5       15.2  
Operating margin(1)
    22.7 %     23.6 %     12.3 %
Culiacán:
                       
Revenues:
                       
Aeronautical services
    71.8       85.3       95.2  
Non-aeronautical services
    12.5       13.5       15.8  
Total revenues
    84.3       98.8       111.0  
Operating costs
    61.6       67.9       97.4  
Costs of services
    23.9       24.6       25.7  
General and administrative expenses
    13.3       17.4       46.6  

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    Year ended December 31,  
    2004     2005     2006  
    (millions of pesos, except percentages)  
Depreciation and amortization
    17.9       18.1       19.5  
Income from operations
    22.7       31.0       13.6  
Operating margin(1)
    27.0 %     31.3 %     12.3 %
Chihuahua:
                       
Revenues:
                       
Aeronautical services
    61.9       69.6       79.8  
Non-aeronautical services
    11.7       13.8       16.1  
Total revenues
    73.6       83.4       95.9  
Operating costs
    50.3       62.6       84.1  
Costs of services
    19.6       23.4       25.7  
General and administrative expenses
    14.4       20.1       38.6  
Depreciation and amortization
    10.6       12.7       15.0  
Income from operations
    23.3       20.8       11.8  
Operating margin(1)
    31.6 %     25.1 %     12.3 %
Zihuatanejo:
                       
Revenues:
                       
Aeronautical services
    62.4       63.0       74.7  
Non-aeronautical services
    14.4       14.3       16.1  
Total revenues
    76.8       77.3       90.8  
Operating costs
    62.1       62.9       79.7  
Costs of services
    22.7       23.8       25.1  
General and administrative expenses
    17.2       16.3       31.6  
Depreciation and amortization
    16.1       16.6       18.4  
Income from operations
    14.7       14.5       11.1  
Operating margin(1)
    19.0 %     18.7 %     12.2 %
Other:(2)
                       
Revenues:
                       
Aeronautical services
    230.5       259.3       293.0  
Non-aeronautical services
    45.3       50.1       53.9  
Total revenues
    275.8       309.4       346.9  
Operating costs
    250.5       259.1       303.5  
Costs of services
    112.8       118.8       123.0  
General and administrative expenses
    62.9       62.8       81.1  
Depreciation and amortization
    53.1       53.8       82.1  
Income from operations
    25.3       50.3       43.5  
Operating margin(1)
    9.2 %     16.2 %     12.5 %
Total:(3)
                       
Revenues:
                       
Aeronautical services
    1,044.5       1,149.1       1321.3  
Non-aeronautical services
    241.7       277.2       304.7  
Total revenues
    1,286.2       1,426.3       1626.0  
Operating costs
    887.6       947.8       1425.1  
Costs of services
    344.3       370.1       382.2  
General and administrative expenses
    237.0       253.3       690.7  
Depreciation and amortization
    206.1       216.3       270.7  
Income from operations
    398.6       478.5       200.9  
Operating margin(1)
    31.0 %     33.5 %     12.4 %
 
(1)   We determine operating margin per airport by dividing income from operations at each airport or group of airports by total revenues for that airport or group of airports.
 
(2)   Reflects the results of operations of our airports located in Ciudad Juárez, Durango, Reynosa, San Luis Potosí, Tampico, Torreón and Zacatecas.
 
(3)   Includes intercompany transactions between us and our subsidiaries and among our subsidiaries. During 2006, we adopted a financial strategy that enables us to recognize results by considering our subsidiaries as one economic unit, making corporate charges and credits to and from our subsidiaries for the purpose of establishing sufficient cash flow at each subsidiary to support such subsidiary’s respective obligations. The implementation of this strategy will affect operating income results reported by individual airports but will not affect our consolidated results.
     Historically, our most profitable airport has been our Monterrey International Airport, which handles the majority of our international passengers. We determine profitability per airport by dividing income from operations in each airport by total revenues for that airport.

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     In 2006, we adopted a financial strategy that enables us to recognize results by considering our subsidiaries as one economic unit, making corporate charges and credits to and from our subsidiaries for the purpose of establishing sufficient cash flow at each subsidiary to support such subsidiary’s respective obligations. The method was designed to establish an efficient structure for the management of cash flow within OMA, and to assist less profitable airports in meeting their financial obligations. The implementation of this strategy will affect operating income results reported by individual airports but will not affect our consolidated results.
Summary Historical Results of Operations
     The following table sets forth a summary of our consolidated results of operations for the years indicated.
                                                 
    Summary Consolidated Operating Results
    Year ended December 31,
    2004   2005   2006
    (thousands of pesos, except percentages)
            %           %           %
    Amount   change   Amount   change   Amount   change
Revenues:
                                               
 
                                               
Aeronautical services
    1,044,448       7.7 %     1,149,056       10.0 %     1,321,300       15.0 %
Non-aeronautical services
    241,636       26.5 %     277,208       14.7 %     304,882       10.0 %
Total revenues
    1,286,084       10.8 %     1,426,264       10.9 %     1,626,182       14.0 %
Operating costs:
                                               
Cost of services
    345,565       5.1 %     374,943       8.5 %     383,065       2.2 %
General and administrative expenses
    233,296       (5.3 )%     235,842       1.1 %     228,872       (3.0 )%
Technical assistance fees
    38,758       1.7 %     38,566       (0.5 )%     47,746       23.8 %
Concession taxes
    62,531       9.7 %     70,011       12.0 %     81,569       16.5 %
Depreciation and amortization
    208,027       7.4 %     219,552       5.5 %     281,514       28.2 %
Total operating costs
    888,177       2.8 %     938,914       5.7 %     1,022,766       8.9 %
Income from operations
    397,907       34.1 %     487,350       22.5 %     603,416       23.8 %
Net comprehensive financing income (expense):
                                               
Interest income, net
    50,163       64.5 %     105,177       109.7 %     128,614       22.3 %
Exchange gain (loss), net
    (4,555 )     (113.7 )%     (25,486 )     459.6 %     11,995       (147.1 )%
Monetary position loss
    (60,395 )     56.2 %     (51,151 )     (15.3 )%     (72,829 )     42.4 %
Net comprehensive financing income (expense)
    (14,787 )     (159.2 )%     28,540       (293.0 )%     67,780       137.5 %
Other income
    4,440       65.1 %     5,182       16.7 %     10,413       100.9 %
Income before income taxes and statutory employee profit sharing
    387,560       19.4 %     521,072       34.4 %     681,609       30.8 %
Income taxes and statutory employee profit sharing expense
    90,458       (35.5 )%     153,773       70.0 %     229,372       49.2 %
Consolidated net income
    297,102       61.2 %     367,299       23.6 %     452,237       23.1 %
Other operating data (unaudited):
                                               
Operating margin(1)
    30.9 %             34.2 %             37.1 %        
Net margin(2)
    23.1 %             25.8 %             27.8 %        
 
(1)   Income from operations divided by total revenue, expressed as a percentage.
 
(2)   Net income divided by total revenues, expressed as a percentage.
Results of operations for the year ended December 31, 2006 compared to the year ended December 31, 2005.
Revenues
     Total revenues for 2006 were Ps.1,626.2 million, 14.0% higher than the Ps.1,426.3 million recorded in 2005, as a result of increases in both aeronautical and non-aeronautical revenue.
     Aeronautical revenue increased 15.0% in 2006, as compared to 2005, due primarily to a 14.3% increase in passengers paying passenger charges, a 5.0% increase in air traffic movements, which resulted

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in increases in revenues from passenger charges, landing charges and aircraft parking charges of Ps.155.8 million, Ps.3.0 million and Ps.3.6 million, respectively. Reflecting these volume increases, total workload units increased 10.4% in 2006 as compared to 2005. Aeronautical revenue per workload unit in 2006 was Ps.104.9 compared to Ps.101.0 in 2005, an increase of 3.9%.
     Non-aeronautical revenue increased 10.0% from Ps.277.2 million in 2005 to Ps.304.9 million in 2006, principally due to increases in revenue from car parking which increased 11%, food and beverage operations, which increased 33.8% as well as increases in other categories of non-aeronautical revenues. These increases were driven by the increase in passenger traffic at our airports. Non-aeronautical revenue per terminal passenger remained substantially the same in 2006, decreasing by 0.4%, from Ps.26.2 in 2005 to Ps.25.9 in 2006.
Operating Results
   Cost of Services
     Cost of services increased 2.2% in 2006 as compared to 2005, mainly as a result of increases in various categories of expenses, including employee costs (from Ps.122.7 million to Ps.135.2 million) and utilities (from Ps.83.6 million to Ps.88.9 million). Offsetting these sources of increases, safety, security and insurance expenses decreased 3.9%, from Ps.69.1 million in 2005 to Ps.66.4 million in 2006. As a percentage of total revenues, cost of services decreased from 26.3% of revenues in 2005 to 23.6% of revenues in 2006, reflecting the increase in revenues.
  General and Administrative Expenses
     Our general and administrative expenses consist primarily of administrative overhead costs, fees and expenses paid to consultants and other providers of professional services and other miscellaneous expenses. General and administrative expenses decreased modestly from Ps.235.8 million in 2005 to Ps.228.9 million in 2006. We anticipate that our general and administrative expenses will increase slightly in 2007 as a result of costs associated with being a public reporting company in Mexico and the U.S.
   Technical Assistance Fee and Concession Tax
     Our technical assistance fee increased 23.8% to Ps.47.7 million in 2006, as compared to Ps.38.6 million in 2005, reflecting our improved profitability in 2006. Our concession tax increased 16.5% from Ps.70.0 million in 2005 to Ps.81.6 million in 2006, reflecting our increase in revenues in 2006.
  Depreciation and Amortization
     Our 28.2% increase in depreciation and amortization, from Ps.219.6 million in 2005 to Ps.281.5 million in 2006 was principally due to the increase in additional depreciation expense and a decrease in the improvements to concession assets during 2006.
  Income from Operations
     On a consolidated basis, operating income increased 23.8% to Ps.603.4 million in 2006, as compared to Ps.487.4 million during 2005. This increase primarily reflected the 14.0% increase in our total revenues in 2006, which was offset in part by a proportionately smaller increase in total operating costs. Our operating margin increased from 34.2% in 2005 to 37.1% in 2006.

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     On an airport-by-airport basis, the principal contributors to operating income in 2006 were the Monterrey International Airport (operating income decreased 73.2% and operating margin decreased from 52.2% to 12.0%), the Acapulco International Airport (operating income increased 65.0% and operating margin increased from 9.6% to 13.8%), the Mazatlán International Airport (operating income decreased 44.7% and operating margin decreased from 23.5% to 12.3%) and the Chihuahua International Airport (operating income decreased 43.5% and operating margin decreased from 25.0% to 12.3%). As noted above, we recently adopted a financial strategy that enables us to recognize our results by considering our subsidiaries as one economic unit, making corporate charges and credits to and from our subsidiaries for the purpose of establishing sufficient cash flow at each subsidiary to support such subsidiary’s respective obligations. The implementation of this strategy will affect operating results reported by individual airports but will not affect our consolidated results.
   Comprehensive Financing Result
     Our net comprehensive financing result in 2006 generated income of Ps.67.8 million, as compared to income of Ps.28.5 million in 2005. This increase resulted primarily from the change from a foreign exchange loss of Ps.25.5 million in 2005 to a foreign exchange gain of Ps.12.0 million in 2006, as well as from an increase in interest income from Ps.105.2 million in 2005 to Ps.128.6 million in 2006. These increases were partially offset by a 42.4% increase in losses from monetary position, from Ps.51.2 million in 2005 to Ps.72.8 million in 2006.
  Income Taxes, Statutory Employee Profit Sharing and Asset Tax
     The provision for income taxes and statutory employee profit sharing increased 49.2% to Ps.229.4 million in 2006, from Ps.153.8 million in 2005. This increase was attributable primarily to higher statutory employee profit sharing and an increase in our pre-tax income. Our effective rate decreased from 29.5% in 2005 to 27.8% in 2006.
  Net Income
     Net income increased 23.1% in 2006 to Ps.452.2 million, from Ps.367.3 million in 2005, reflecting the factors described above.
Results of operations for the year ended December 31, 2005 compared to the year ended December 31, 2004
Revenues
     Total revenues for 2005 were Ps.1,426.3 million, 10.9% higher than the Ps.1,286.1 million recorded in 2004, as a result of increases in both aeronautical and non-aeronautical revenue.
     Aeronautical revenue increased 10.0% from 2004 to 2005, due primarily to a 7.5% increase in passengers paying passenger charges and a 4.7% increase in air traffic movements, which resulted in increases in revenues from passenger charges, landing charges and aircraft parking charges of Ps.86.0 million, Ps.7.0 million and Ps.2.0 million, respectively. Reflecting these volume increases, total workload units increased 8.3% from 2004 to 2005. Aeronautical revenue also benefited from increases in the specific rates we charged for aeronautical services. Aeronautical revenue per workload unit in 2005 was Ps.101.0 million compared to Ps.99.0 million in 2004, an increase of 1.6%.
     Non-aeronautical revenue increased 14.7% from Ps.241.6 million in 2004 to Ps.277.2 million in 2005, principally due to increases in revenue from car parking charges, advertising, leasing of space and

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food and beverage operations. Non-aeronautical revenue per terminal passenger in 2005 was Ps.26.0 million compared to Ps.25.0 million in 2004, an increase of 5.4%.
Operating Results
  Cost of Services
     Cost of services increased 8.5% from 2004 to 2005, mainly as a result of increases in various categories of expenses, including employee costs (from Ps.115.0 million to Ps.122.7 million), safety, security and insurance (from Ps.63.7 million to Ps.69.1 million), utilities (from Ps.78.2 million to Ps.83.6 million) and maintenance (from Ps.46.0 million to Ps.52.0 million). The increase in safety, security and insurance costs was due to increased security measures at certain of our airports, the increase in utilities was attributable primarily to an increase in electricity rates and the increase in maintenance was due to maintenance activities for parking lots, taxiways and aprons. As a percentage of total revenues, cost of services decreased from 26.9% of revenues in 2004 to 26.3% of revenues in 2005.
  General and Administrative Expenses
     General and administrative expenses increased 1.1% from 2004 to 2005, mainly as a result of expenses associated with topographical surveys and software licenses. As a percentage of total revenues, general and administrative expenses decreased from 18.1% of revenues in 2004 to 16.5% of revenues in 2005.
   Technical Assistance Fee and Concession Tax
     Our technical assistance fee remained substantially unchanged, decreasing 0.5% to Ps.38.6 million in 2005, as compared to Ps.38.8 million in 2004, principally as a result of fewer reimbursable expenses in 2005 as compared to 2004. Our concession tax increased 12.0% from Ps.62.5 million in 2004 to Ps.70.0 million in 2005, reflecting the increase in revenues in 2005.
   Depreciation and Amortization
     Our 5.5% increase in depreciation and amortization, from Ps.208.0 million for 2004 to Ps.219.6 million for 2005, was mainly the result of an increase in our property, plant and equipment reflecting the investments made pursuant to our master development programs.
   Income from Operations
     Operating income increased 22.5% to Ps.487.4 million in 2005, as compared to Ps.397.9 million in 2004. This increase primarily reflected the 10.9% increase in our total revenues in 2005, which more than offset the proportionately smaller increase in total operating costs of 5.7%. Our operating margin increased from 30.9% in 2004 to 34.2% in 2005.
     On an airport-by-airport basis, the principal contributors to the increase in operating income in 2005 were the Monterrey International Airport (operating income increased 16.3% and operating margin increased from 50.1% to 52.2%), the Culiacán International Airport (operating income increased 35.9% and operating margin increased from 27.0% to 31.3%) and the San Luis Potosí International Airport (operating income increased 128.2% and operating margin increased from 16.8% to 29.8%). These increases were mainly attributable to increase in terminal passenger volumes at each of these airports and were also attributable to improve margins in the Monterrey, Culiacán, Mazatlán International Airports.

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  Comprehensive Financing Result
     Our net comprehensive financing result changed in 2005 to income of Ps.28.5 million, as compared to an expense of Ps.14.8 million in 2004. This change resulted primarily from an increase in interest income, which more than doubled due to our higher average cash balances in 2005, as well as from a 15.3% decline in losses from monetary position. These effects were partially offset by a more than five-fold increase in foreign exchange losses in 2005.
   Income Taxes, Employees Statutory Profit Sharing and Asset Tax
     The provision for income taxes and employee statutory profit sharing and asset tax increased 70.0% in 2005, to Ps.153.8 million, from Ps.90.5 million in 2004. This increase was attributable primarily to the effects on deferred income taxes in 2004. As we are in a deferred income tax liability position, the decrease in statutory income tax rates enacted in 2004 resulted in a deferred tax benefit for OMA of Ps.72.5 million in 2004, thereby reducing our overall income tax expense in that year. This was partially offset by a Ps.21.1 million increase in our valuation allowance. Our effective rate increased from 23.2% in 2004 to 29.2% in 2005.
   Net Income
     Net income increased 23.6% in 2005, to Ps.367 million, from Ps.297 million for 2004, reflecting the factors described above.
Liquidity and Capital Resources
     Historically, our operations have been funded through cash flow from operations, and we have not incurred any significant indebtedness. The cash flow generated from our operations has generally been used to fund operating costs and capital expenditures, including expenditures under our master development programs, and the excess of our cash flow has been added to our accumulated cash balances. As of December 31, 2005 and December 31, 2006, we had Ps.1,644.8 million and Ps.1,612.4 million, respectively, of cash and cash equivalents. This balance reflects (i) the issuance in September 2006 of 8,000,000 Series B shares to SETA pursuant to its exercise of an option acquired in connection with its purchase of its Series BB shares and (ii) the payment of a dividend of Ps.423.9 million in September 2006.
     In 2006, we generated Ps.702.7 million in resources from operating activities, as compared to Ps.676.0 million in 2005, principally reflecting the improvement in our income from operations discussed above under “Results of Operations for the year ended December 31, 2006 compared to the year ended December 31, 2005—Operating Results”. We used no resources in financing activities in 2005 but in 2006 we used 310.7 million, represented by the dividend payment of Ps. 423.9 million net of Ps. 119.7 million received for the exercise of SETA’s share option mentioned above. Our resources used in investing activities were Ps.424.3 million, mainly for the purchase of capital assets as summarized below in the table “Historical Capital Expenditures by Type.”
     In 2005, we generated Ps.676.0 million in resources from operating activities, principally reflecting our increased net income generated from our operations without considering non-cash items such as depreciation and amortization, deferred income tax and the change in our working capital. We used no resources in financing activities in 2005. Our resources used in investing activities in 2005 were Ps.282.9 million, mainly for the purchase of capital assets as summarized below in the table “Historical Capital Expenditures by Type.”

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     In 2004, we generated Ps.588.9 million in resources from operating activities, principally reflecting our net income generated from our operations without considering non-cash items such as depreciation and amortization, deferred income tax and the change in our working capital. We used no resources in financing activities in 2004. Our resources used in investing activities in 2004 were Ps.268.8 million, mainly for the purchase of capital assets as summarized below in the table “Historical Capital Expenditures by Type.”
     In December 2005, our parent company Aeroinvest entered into certain credit facilities to finance Aeroinvest’s acquisition from the Mexican government of the Series B shares currently representing 35.3% of our capital stock and to finance an additional loan to SETA for SETA’s exercise of the option to acquire 2% of our Series B shares. These credit facilities were amended and restated to, among other things, increase the amount of the facility and the amount borrowed thereunder in October 2006 and again in April 2007. Aeroinvest subsequently purchased additional Series B Shares representing 0.74% of our capital stock. Aeroinvest entered into agreements with Merrill Lynch, Pierce, Fenner & Smith Incorporated to refinance its existing credit facilities in June 2007. The refinancing consists of the issuance of the following series of notes by a Mexican trust, payable in U.S. dollars: (i) Ps. 2,125,000,000 aggregate principal amount of Series 2007-1 Class A Notes due 2017, (ii) Ps. 325,000,000 aggregate principal amount of Series 2007-1 Class B Notes due 2017, and (iii) Ps. 355,000,000 aggregate principal amount of Series 2007-1 Class C Notes due 2017. In connection with the Merrill Lynch refinancing, Aeroinvest has assigned its economic interests (including its right to receive dividends) with respect to its Series B shares representing 36.04% of our capital stock as well as 74.5% of the Series A shares of SETA. The refinancing was approved at the extraordinary shareholders meeting held January 31, 2007.
     Under the refinancing agreements, Aeroinvest is required to maintain at least its present ownership interest in OMA and SETA, majority control over OMA and our subsidiaries and a minimum interest expense to EBITDA ratio. The terms of the refinancing agreements require that Aeroinvest cause OMA to comply with numerous covenants, which include certain restrictions on our ability to create liens, incur indebtedness, sell, transfer or encumber assets, engage in merger transactions or otherwise change our business or make investments or capital expenditures outside of the master development plans. As a result, Aeroinvest would be required to obtain a waiver or amendment under the restructuring documents to permit us to undertake certain of these restricted actions, including the incurrence of any material amount of indebtedness, and there can be no assurances that such waivers or amendments would be obtained. In addition, Aeroinvest is required to cause us to distribute all of our available cash, subject to certain limitations, as quarterly dividends in accordance with our dividend policy, and is required to restrict us from making certain changes to the divided policy. If we do not distribute a minimum required amount of dividends on each dividend payment date, Aeroinvest will be in default under the refinancing documents. If Aeroinvest defaults on its obligations under the refinancing documents, we would be further restricted in our ability create liens, incur indebtedness, sell, transfer or encumber assets, engage in merger transactions or otherwise change our business or make investments or capital expenditures outside of the master development plans, Aeroinvest could lose its ability to vote its shares of our capital stock as well as its shares of SETA, and the trustee could in certain circumstances foreclose on the Series B shares and is SETA shares held in trust.
     Under the terms of our concessions, each of our subsidiary concession holders is required to present a master development program for approval by the Ministry of Communications and Transportation every five years, which includes investment commitments (including capital expenditures and improvements) applicable to us as concession holder for the succeeding five-year period. For more information on our master development programs and historical and projected committed investments and

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capital expenditures, please see “Item 4. History and Development of the Company – Master Development Programs”.
Share Repurchase Program
     On April 27, 2007, our shareholders approved the establishment of a share repurchase reserve in the amount of Ps. 400,000,000. We plan to conduct the share repurchase program on the Mexican stock exchange and in accordance with Mexican and other applicable law. During the 2007 fiscal year, up to Ps. 100,000,000  may be used in connection with the share repurchase program.
Critical Accounting Policies
     We prepare consolidated financial statements in conformity with Mexican FRS. As such, we are required to make estimates, judgments and assumptions that affect (i) certain reported amounts of our assets and liabilities, (ii) the disclosure of our contingent assets and liabilities at the date of the financial statements, and (iii) certain reported amounts of revenues and expenses during the reporting period. We base estimates and judgments on our historical experience and on various other reasonable factors that together form the basis for making judgments about the carrying values of our assets and liabilities. Our actual results may differ from these estimates under different assumptions or conditions. We evaluate our estimates and judgments on an ongoing basis. Our significant accounting policies are described in Note 3 to our financial statements. We believe our most critical accounting policies that result in the application of estimates and/or judgments are the following:
Income Taxes, Asset Tax and Employee Profit Sharing
     In conformity with Bulletin D-4, Accounting for Income Tax, Asset Tax and Employee Statutory Profit Sharing, of Mexican FRS, a provision or benefit for income tax is recorded in the results of the year in which such tax expense or benefit is incurred. Deferred income tax assets and liabilities are recognized for temporary differences derived from comparing the accounting and tax values of assets and liabilities, plus any future benefits resulting from tax loss carry-forwards or any other tax credit. The resulting deferred tax provision or benefit is reflected in our consolidated statements of income. A deferred tax liability is recorded when there is a charge to results, and a deferred tax asset is recorded in the event of a credit to results.
     Asset tax paid may be recognized as an asset tax credit, reducing the deferred income tax liability, if it is probable that we will generate sufficient taxable income to compensate or to recover the tax.
     Deferred employee statutory profit sharing assets resulting from the temporary differences between the accounting results and the taxable income from operations are recognized as a deferred employees’ statutory profit sharing asset or liability. The asset is recorded when there is a high probability that the asset will be realized and there is no evidence that such situation will change. On the balance sheet, the deferred employee statutory profit sharing is shown net of the deferred income tax.
     The calculation and recognition of deferred taxes and the related valuation allowance for deferred taxes and asset taxes requires the use of estimates, which may be affected by the amount of our future taxable income, the assumptions relied on by our management and our results of operations.
     We periodically evaluate the fairness of deferred tax assets or liabilities based on historical tax results and estimated tax profits, among others. A valuation allowance is recorded for any deferred tax assets that, in the opinion of our management, are not likely to be realized. Any change in our estimates may have an effect on our financial condition and results of operations.

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Impairment in the Value of Long-Lived Assets
     We must test for impairment when indicators of potential impairment in the carrying amount of tangible and intangible long-lived assets in use exist, unless there is conclusive evidence that the indicators of impairment are temporary. Impairment indicators considered for these purposes are, among others, operating losses or negative cash flows in the period if they are combined with a history of projections of losses, depreciation and amortization charged to the results, which in percentage terms in relation to revenues are substantially higher than that of previous years, obsolescence, reduction of the installed capacity, physical damages and other legal and economic factors.
     An impairment is recorded when the carrying amount of long-lived assets exceeds the greater of the present value of future net cash flows provided by the assets or the net sales price upon disposal.
     Present value of future net cash flows is based on management’s projections of future cash flows generated by the asset, discounted using current interest rates.
     Our management believes that OMA, together with our 13 airport subsidiaries, must be considered as an independent cash generating unit, as all were part of the Central-North package included in the Mexican government’s bidding process. Under the privatization process, each airport concessionaire must operate its airport, regardless of its individual results. Our evaluations throughout the year and up to the date of this filing did not reveal any impairment of tangible and intangible long-lived assets. We can give no assurance that our evaluations will not change as a result of new information or developments which may change our future projections of net cash flows or the related discount rates and result in future impairment charges.
Principal Differences Between Mexican FRS and U.S. GAAP
     Our consolidated financial statements are prepared in accordance with Mexican FRS, which differs in certain respects from U.S. GAAP.
     The principal differences between Mexican FRS and U.S. GAAP as they relate to us are the treatment of our investments in our concessions and the rights to use our airport facilities, the treatment of SETA’s option and portion of shares held in trust, which are forfeitable, and the deferred tax effects of these adjustments. Each of these differences affects both consolidated net income and stockholders’ equity. See Note 19 to our audited financial statements for a discussion of these differences and the effect on our consolidated results of operation.
Off-balance Sheet Arrangements
     We are not party to any off-balance sheet arrangements.
Tabular Disclosure of Contractual Obligations
                                         
    Payments due by period  
Contractual Obligations           Less than 1                     More than 5  
    Total     year(2)     1-3 years     3-5 years     years  
    (in millions of pesos)  
Master development programs
  PS. 1,821     PS. 1,049     Ps. 674     Ps. 98       N/A (3)  
Purchase obligations(1)
    332       18       74       74       166  
Total
  Ps. 2,153     Ps. 1,067     Ps. 748     Ps. 172     Ps. 166  
 
                             

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(1)   Reflects minimum fixed annual payment of U.S.$3 million required to be paid under OMA’s Technical Assistance Agreement, assuming an average exchange rate of Ps.11.2865 per U.S. dollar and an annual U.S. inflation rate of 2.4%. The amount ultimately to be paid in any year will depend on OMA’s profitability.
 
(2)   Amount for less than one year corresponds to obligations for the remainder of 2007.
 
(3)   In year five of the master development programs, a negotiation will take place with the Ministry of Communications and Transportation to determine the new master development program commitments for the subsequent five-year period.
New Accounting Pronouncements
Mexican FRS
     As of May 31, 2004, the Mexican Institute of Public Accountants, or IMCP, formally transferred the function of establishing and issuing financial reporting standards to the Mexican Board for Research and Development of Financial Reporting Standards, or CINIF, consistent with the international trend of requiring this function to be performed by an independent entity.
     Accordingly, the task of establishing bulletins of Mexican GAAP and circulars issued by the IMCP was transferred to CINIF, who subsequently changed the terminology from standards of generally accepted accounting principles in Mexico to Normas de Información Financiera (Financial Reporting Standards), or Mexican FRS, and determined that the FRS would encompass (i) new bulletins established under the new function; (ii) any interpretations issued thereon; (iii) any previous Mexican GAAP bulletins that have not been amended, replaced or revoked by the new FRS; and (iv) International Financial Reporting Standards, or IFRS, that are supplementary guidance to be used when Mexican FRS does not provide primary guidance.
     One of the main objectives of CINIF is to achieve greater concurrence with IFRS. To this end, it started by reviewing the theoretical concepts contained in Mexican FRS and establishing a Conceptual Framework, or CF, to support the development of financial reporting standards and to serve as a reference in resolving issues arising in the accounting practice. When Mexican FRS Series A went into effect on January 1, 2006, which represents the Conceptual Framework, some of its provisions created divergence with specific Mexican FRS already in effect. Consequently, in March 2006, CINIF issued Interpretation Number 3 (INIF No. 3), Initial Application of Mexican Financial Reporting Standards, establishing, that provisions set forth in specific Mexican FRS that have not been amended should be followed until their adaptation to the Conceptual Framework is complete. For example, in 2006, revenues, costs and expenses were not required to be classified as ordinary and non-ordinary in the statement of income and other comprehensive income items in the statement of stockholders’ equity were not required to be reclassified into the statement of income at the time net assets that gave rise to them were realized.
     CINIF continues to pursue its objective of moving towards a greater convergence with International Financial Reporting Standards. To this end, on December 22, 2006, it issued the following MFRS, which will become effective for fiscal years beginning on January 1, 2007:
    NIF B-3, Statement of Income
 
    NIF B-13, Events Occurring after the Date of the Financial Statements
 
    NIF C-13, Related Parties
 
    NIF D-6, Capitalization of Comprehensive Financing Result
Some of the significant changes established by these standards are as follows:

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NIF B-3, Statement of Income, sets the general standards for presenting and structuring the statement of income, the minimum content requirements and general disclosure standards. Consistent with NIF A-5, Basic Elements of Financial Statements, NIF B-3 now classifies revenues, costs and expenses, into ordinary and non-ordinary. Ordinary items (even if not frequent) are derived from the primary activities representing an entity’s main source of revenues. Non-ordinary items are derived from activities other than those representing an entity’s main source of revenues. Consequently, the classification of certain transactions as special or extraordinary, according to former Bulletin B-3, was eliminated. As part of the structure of the statement of income, ordinary items should be presented first and, at a minimum, present income or loss before income taxes, income or loss before discontinued operations, if any, and net income or loss. Presenting operating income is neither required nor prohibited by NIF B-3. If presented, the line item other income (expense) is presented immediately before operating income. Cost and expense items may be classified by function, by nature, or a combination of both. When classified by function, gross income may be presented. Statutory employee profit sharing should now be presented as an ordinary expense (within other income (expense) pursuant to INIF No. 4 issued in January 2007) and no longer presented within income tax. Special items mentioned in particular Mexican FRS should now be part of other income and expense and items formerly recognized as extraordinary should be part of non-ordinary items.
     NIF B-13, Events Occurring after the Date of the Financial Statements, requires that for (i) asset and liability restructurings and (ii) creditor waivers to their right to demand payment in case the entity defaults on contractual obligations, occurring in the period between the date of the financial statements and the date of their issuance, only disclosure needs to be included in a note to the financial statements while recognition of these items should take place in the financial statements of the period in which such events take place. Previously, these events were recognized in the financial statements in addition to their disclosure. NIF A-7, Presentation and Disclosure, in effect as of January 1, 2006, requires, among other things, that the date on which the issuance of the financial statements is authorized be disclosed as well as the name of authorizing management officer(s) or body (bodies). NIF B-13 establishes that if the entity owners or others are empowered to modify the financial statements, such fact should be disclosed. Subsequent approval of the financial statements by the stockholders or other body does not change the subsequent period, which ends when issuance of the financial statements is authorized.
     NIF C-13, Related Parties, broadens the concept “related parties” to include (a) the overall business in which the reporting entity participates; (b) close family members of key officers; and (c) any fund created in connection with a labor-related compensation plan. NIF C-13 requires the following disclosures: (a) the relationship between the controlling and subsidiary entities, regardless of whether or not any intercompany transactions took place during the period; (b) that the terms and conditions of consideration paid or received in transactions carried out between related parties are equivalent to those of similar transactions carried out between independent parties and the reporting entity, only if sufficient evidence exists; (c) benefits granted to key officers; and (d) name of the direct controlling company and, if different, name of the ultimate controlling company. Notes to comparative financial statements of prior periods should disclose the new provisions of NIF C-13.
     NIF D-6, Capitalization of Comprehensive Financing Result, establishes general capitalization standards that include specific accounting for financing in domestic and foreign currencies or a combination of both. Some of these standards include: (a) mandatory capitalization of comprehensive financing cost (“RIF”) directly attributable to the acquisition of qualifying assets; (b) in the instance financing in domestic currency is used to acquire assets, yields obtained from temporary investments before the capital expenditure is made are excluded from the amount capitalized; (c) exchange gains or losses from foreign currency financing should be capitalized considering the valuation of associated hedging instruments, if any; (d) a methodology to calculate capitalizable RIF relating to funds from

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generic financing; (e) regarding land, RIF may be capitalized if development is taking place; and (f) conditions that must be met to capitalize RIF, and rules indicating when RIF should no longer be capitalized. The entity may decide on whether to apply provisions of NIF D-6 for periods ending before January 1, 2007, in connection with assets that are in the process of being acquired at the time this NIF goes into effect.
     On November 30, 2006, the Interpretations Committee of International Financial Reports issued IFRIC 12, Agreements for Service Concessions, which is of mandatory application as of January 1, 2008, although its early application is encouraged. This interpretation deals with the accounting by private sector operators involved in supplying infrastructure assets and services to the public sector, such as schools and highways. The interpretation establishes that for those agreements which fall within this scope, the infrastructure assets are not recognized as property, plant and equipment of the operator; rather, depending on the contract terms, the operator will recognize: (i) a financial asset, whereby an operator constructs or makes improvements to the infrastructure, in which the operator has an unconditional right to receive a specific amount of cash or other financial asset during the contract term; or (ii) an intangible asset, whereby the operator constructs or makes improvements and is allowed to operate the infrastructure for a fixed period after the construction is terminated, 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; or (iii) both, a financial asset and an intangible asset, when the return/gain for the operator is provided partially by a financial asset and partially by an intangible asset. This IFRIC establishes that for both the financial asset and the intangible asset, the revenues and costs related to the construction or the improvements are recognized in revenues during the construction phase in accordance with International Accounting Standards 11, Construction Contracts (or its equivalent in Mexican FRS, NIF D-7, Construction Contracts and Manufacture of Certain Capital Assets).
     We are currently in the process of evaluating the effects of adopting these new standards on our financial information.

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U.S. GAAP
     In June 2006, the Financial Accounting Standards Board (“FASB”) issued Interpretation (“FIN”) No. 48, Accounting for Uncertainty in Income Taxes. FIN 48 provides detailed guidance for the financial statement recognition, measurement and disclosure of uncertain tax positions recognized in an enterprise’s financial statements in accordance with FASB Statement No. 109, Accounting for Income Taxes. FIN 48 requires an entity to recognize the financial statement impact of a tax position when it is more likely than not that the position will be sustained upon examination. If the tax position meets the more-likely-than-not recognition threshold, the tax effect is recognized at the largest amount of the benefit that is greater than fifty percent likely of being realized upon ultimate settlement. Any difference between the tax position taken in the tax return and the tax position recognized in the financial statements using the criteria above results in the recognition of a liability in the financial statements for the unrecognized benefit. Similarly, if a tax position fails to meet the more-likely-than-not recognition threshold, the benefit taken in tax return will also result in the recognition of a liability in the financial statements for the full amount of the unrecognized benefit. FIN 48 will be effective for fiscal years beginning after December 15, 2006 and the provisions of FIN 48 will be applied to all tax positions under Statement No. 109 upon initial adoption. The cumulative effect of applying the provisions of this interpretation will be reported as an adjustment to the opening balance of retained earnings for that fiscal year. We do not anticipate the adoption of this new accounting principle will have a material effect on our financial position, results of operations or cash flows.
     In September 2006, the SEC issued Staff Accounting Bulletin (“SAB”) No. 108, Considering the Effects of Prior Year Misstatements When Quantifying Misstatements in Current Year Financial Statements. SAB No. 108 addresses the process and diversity in practice of quantifying financial statement misstatements resulting in the potential build-up of improper amounts on the balance sheet. We adopted the provisions of SAB No.108 in the accompanying consolidated financial statements, which did not have an effect on our financial position, results of operations or cash flows.
     In September 2006, the FASB issued Statement of Financial Accounting Standards, or SFAS, No. 157, Fair Value Measurements. SFAS No. 157 establishes a framework for measuring fair value and expands disclosures about fair value measurements. SFAS No. 157 clarifies the definition of exchange price as the price between market participants in an orderly transaction to sell an asset or transfer a liability in the market in which the reporting entity would transact for the asset or liability, that is, the principal or most advantageous market for the asset or liability. The changes to current practice resulting from the application of this Statement relate to the definition of fair value, the methods used to measure fair value, and the expanded disclosures about fair value measurements. The Statement is effective for fiscal years beginning after November 15, 2007. We do not anticipate the adoption of this new accounting principle will have a material effect on our financial position, results of operations or cash flows.
     In September 2006, the FASB issued SFAS No. 158, Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans, which requires an employer to recognize the over-funded or under-funded status of a defined benefit postretirement plan (other than a multiemployer plan) as an asset or liability in its statement of financial position and to recognize changes in that funded status in the year in which the changes occur through comprehensive income. This statement also requires that an entity measure the fair value of plan assets and benefit obligations as of the date of the year-end balance sheet. We adopted the provisions of this statement in the accompanying 2006 financial statements, which did not have a significant effect on our financial position.
     On January 1, 2006, we adopted SFAS No. 123 (revised 2004), Share-Based Payments. This statement eliminated the option to apply the intrinsic value measurement provisions of Accounting

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Principles Board, or APB, Opinion No. 25, Accounting for Stock Issued to Employees to stock compensation awards issued to employees and instead requires companies to measure the cost of employee services received in exchange for an award of equity instruments based on the grant-date fair value of the award. That cost is to be recognized over the period during which an employee is required to provide services in exchange for the award — the requisite service period (usually the vesting period). The adoption of SFAS No. 123 did not have a material effect on our financial position, results of operations or cash flows.
     On January 1, 2006, we adopted SFAS No. 154, Accounting Changes and Error Corrections — a replacement of APB Opinion No. 20 and FASB Statement No. 3, which required retrospective application to prior periods’ financial statements of changes in accounting principles, unless impracticable. SFAS No. 154 also required that the retrospective application of a change in accounting principle be limited to the direct effects of the change, with indirect effects being recognized in the period of the accounting change. The adoption of SFAS No. 154 did not have a material effect on our financial position, results of operations or cash flows.
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 and one alternate director, each of who is elected at the annual shareholders’ meeting. Under the Mexican Securities Market Law and OMA by-laws, 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 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).
     Under the participation agreement, NAFIN, as trustee of the selling stockholder, Bancomext, ICA and SETA agreed that three of our directors were to be elected by SETA, as holder of the Series BB shares, three were to be elected by ICA and five were to be elected by NAFIN. At the October 2, 2006 shareholders’ meeting, the shareholders resolved that each of the directors elected by NAFIN would be removed upon the sale of its shares pursuant to the global public offering in December 2006 and replaced with Independent Directors.

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     The following table lists our current directors as of the date of this annual report, their titles, dates of appointment and ages:
             
Name   Title   Director since   Age
Bernardo Quintana Isaac
  Chairman and Director   December 21, 2005   65
Alberto Felipe Mulás Alonso
  Independent Director   October 2, 2006   46
Salvador Alva Gómez
  Independent Director   October 2, 2006   56
Manuel Francisco Arce Rincón
  Independent Director   October 2, 2006   66
Luis Guillermo Zazueta Domínguez
  Independent Director   October 2, 2006   61
Fernando Flores Pérez
  Independent Director   April 29, 2007   61
Luis Fernando Zárate Rocha*
  Director   September 22, 2000   63
Alonso Quintana Kawage*
  Director   March 14, 2003   33
Sergio Fernando Montaño León
  Director   December 21, 2005   59
José Luis Guerrero Álvarez
  Director   December 21, 2005   63
Jean Marie Chevallier*
  Director   December 13, 2006   62
Jacques Follain*
  Alternate Director   December 13, 2006   50
 
*   Appointed by SETA
     Bernardo Quintana Isaac. Mr. Bernardo Quintana Isaac has been the Chairman of our board of directors since December 2005. Mr. Quintana has been Chairman of the board of directors of Empresas ICA, S.A.B. de C.V. since December 1994, and was also the Chief Executive Officer of ICA from December 1994 through December 2006. Previously, Mr. Quintana served as Executive Vice President and Vice President of ICA Tourism and Urban Development and as Director of Investments of Banco del Atlántico. Mr. Quintana currently serves as a board member of several Mexican companies, including Grupo Carso, S.A.B. de C.V., CEMEX, S.A.B. de C.V. and Telmex, S.A.B. de C.V. Mr. Quintana is also a member of Mexico’s National Council of Businessmen and a member of the boards of trustees of the Universidad Nacional Autónoma de México and Fundación ICA, S.C. Mr. Quintana holds a degree in civil engineering from the Universidad Nacional Autónoma de México and a master’s degree in business administration from the University of California at Los Angeles. Mr. Quintana is the father of fellow director Mr. Alonso Quintana Kawage.
     Alberto Felipe Mulás Alonso. Mr. Alberto Felipe Mulás Alonso has been a member of our board of directors since December 2006. Mr. Mulás currently serves on the boards of directors of several companies, including Empresas ICA, S.A.B. de C.V., Acciones y Valores de México (Accival) S.A. de C.V., a broker dealer subsidiary of Citigroup, Urbi Desarrollos Urbanos S.A.B. de C.V., one of Mexico’s largest housing developers, and Sociedad Hipotecaria Federal, S.N.C., the Mexican government-owned development bank. He presently manages a consulting firm that specializes in corporate finance and strategic planning, which he founded in January 2003. In the administration of former President Vicente Fox, Mr. Mulás oversaw the creation of a national housing development strategy. He has also been managing director at Donaldson, Lufkin & Jenrette Securities Corp., restructuring coordinator at Unidad Coordinaradora para el Acuerdo Bancario Empresarial (UCABE), Country Manager for Lehman Brothers and a vice-president at JP Morgan. Mr. Mulás received a degree in chemical engineering from the Universidad Iberoamericana de México and a master’s degree in business administration from the Wharton School at the University of Pennsylvania.
     Salvador Alva Gómez. Mr. Salvador Alva has been a member of our board of directors since December 2006. Since 2003, Mr. Alva has been President of PepsiCo Foods Latin America, a leading producer of packaged food with operations in 15 countries. He is also President of the Mexican Association of Electronic Commerce and on the board of directors of Conmexico. Mr. Alva has served as

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President of Gamesa-Quaker, General Manager for Latin America of the Alegro International Division of PepsiCo and in several positions at Cervecería Moctezuma, S.A. de C.V. He holds a degree in chemical engineering from the Universidad Nacional Autónoma de México and a master’s degree in business administration from Universidad de las Americas.
     Manuel F. Arce Rincon. Mr. Manuel F. Arce Rincon has been a member of our board of directors since December 2006. From1995 to this date, Mr. Arce has been Managing Director and Partner at Grupo Consultor ACM, S.C., where he advises a wide range of clients in the public and private sectors. For more than 30 years he has also served on the board of directors of many corporations both government or privately owned, including a number of companies registered in the Mexican Stock Exchange. He is also an independent board of directors member of more than 35 investment funds. In the public sector, Mr. Arce has worked at the Federal Electricity Commission, the Coordinación de Abastos y Distribución and Servicios Metropolitanos S.A. Since 1966 he has been a professor at the Universidad Nacional Autónoma de México. Mr. Arce graduated with honors from the Universidad Nacional Autónoma de México and holds a master’s degree in business administration from Columbia University.
     Luis Fernando Zárate Rocha. Mr. Luis Fernando Zárate Rocha has been a member of our board of directors since September 2000. Mr. Zárate is also a member of the board of directors and an Executive Vice President of Empresas ICA. Mr. Zárate oversees housing operations and overseas business development for Empresas ICA, as well as the operations of the airport operator SETA. Mr. Zárate has been affiliated with Empresas ICA for over 36 years, during which time he has worked in business development as well as heavy construction and infrastructure projects. Mr. Zárate is also a member of the board of directors of Fundación ICA, S.C. Mr. Zarate holds a degree in civil engineering from the Universidad Nacional Autónoma de México, where he has been a professor of engineering since 1978.
     Luis Guillermo Zazueta Dominguez. Mr. Luis Guillermo Zazueta has been a member of our board of directors since December 2006. In 1971, Mr. Zazueta founded Despacho Zazueta Hermanos, S.C., a professional accounting firm advising a wide range of clients on accounting and tax matters. He is also on the board of directors of Seguros Argos S.A. de C.V., ANA Automóvil Club de México, A.C., Almacenadora Gómex and Astered Unión de Crédito. He is a member of the Certified Public Accountants College and registered as a Fiscal Public Accountant at the Ministry of Finance and Public Credit, the Mexican Social Security Institute, INFONAVIT and the Federal District. Mr. Zazueta holds a degree in public accounting from the Universidad Iberoamericana.
     Alonso Quintana Kawage. Mr. Alonso Quintana Kawage has been a member of our board of directors since March 2003. Mr. Quintana became the Chief Financial Officer of Empresas ICA on January 1, 2007. Since joining ICA in 1994, he has served the company in various capacities, including positions in its construction, corporate finance and project finance areas. In the finance group, Mr. Quintana has overseen various transactions, including those relating to the financing of a bond and syndicated credit for the El Cajón Hydroelectric Project, a bond for the Corredor Sur project in Panama and a long-term loan financing for the Irapuato-La Piedad highway public-private partnership, as well as various public offerings by Empresas ICA in the international capital markets and Aeroinvest’s acquisition in 2005 of Series B shares currently representing 35.3% of our capital stock. Mr. Quintana received a degree in civil engineering from the Universidad Iberoamericana and a master’s degree in business administration from the Kellogg School of Management at Northwestern University in Chicago. Mr. Quintana is the son of the Chairman of the board of directors, Mr. Bernardo Quintana Isaac.
     Sergio F. Montaño León. Mr. Sergio F. Montaño León has been a member of our board of directors since December 2005. Mr. Montaño is member of the board of directors and Executive Vice

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President in charge of overseeing administration of Empresas ICA. Since 1972, Mr. Montaño has served in various capacities in the management and finance areas of several companies within the Empresas ICA group. Previously, Mr. Montaño held various management positions with such Mexican companies as Trébol S.A. de C.V. and Cervecería Cuauhtémoc Moctezuma, S.A. de C.V. Mr. Montaño holds a degree in public accounting from the Universidad Nacional Autónoma de México.
     José Luis Guerrero Álvarez. Dr. José Luis Guerrero Álvarez has been a member of our board of directors since December 2005. Dr. Guerrero became Chief Executive Officer of Empresas ICA effective January 1, 2007 and is a member of ICA’s board of directors. Previously, he was Executive Vice President and Chief Financial Officer of Empresas ICA. For the past 28 years, Dr. Guerrero has held various positions in the finance, administrative, divestment, real estate, manufacturing and business development areas of Empresas ICA. Before joining Empresas ICA, Dr. Guerrero served as the Planning Director of Combinado Industrial Sahagún, the Technical Director of Roca Fosfórica Mexicana and held various other positions in Mexico and abroad. Dr. Guerrero holds a Diploma D’Ingenieur I.S.M.C.M. from Institut Superieur des Materiaux et de la Construction Mechanique of Paris, and a M.S. and a Ph.D. in engineering from the University of Illinois at Urbana-Champaign.
     Jean-Marie Chevallier. Mr. Jean-Marie Chevallier became in December 2006 Chairman of the Board and Chief Executive Officer of Aéroports de Paris Management, the Aéroports de Paris (ADP) subsidiary that manages its overseas airports investments and operations. Previously, he was ADP’s Director of Airport Planning for both Paris-Charles de Gaulle (CDG) and Paris-Orly airports. He joined ADP in 1978 and until 1990 worked extensively on planning and engineering consulting for large overseas airports projects, namely Jakarta-Cengkareng, Osaka-Kansai, and Seoul-Incheon. Promoted to Vice-President in 1993, he was successively in charge of the Engineering Division, International Affairs and the CDG airport Facilities Division. Mr. Chevallier is a chartered civil engineer from Ecole Nationale des Ponts et Chaussées (Paris, 1968).
     Jacques Follain (Alternate Director for Mr. Chevallier). Mr. Jacques Follain is Managing Director of ADP Management. Mr. Follain joined the Aéroports de Paris Group in 1998 and has played a key role in the development of ADP as an international airport operator in China, Mexico, Egypt, and Algeria. Prior to joining ADP, Mr. Follain held a several positions in L’Oreal starting in 1987, including heading its Mexico subsidiary, sales and marketing manager for Europe in the International Department, and responsibility for setting up the management information systems of the professional division. He also worked for 6 years as an organizational consultant at Arthur Andersen Consulting (Accenture). Mr. Follain is an aeronautical and telecommunications engineer, graduated from the Ecole Nationale Supérieure des Constructions Aéronautiques (Toulouse) the Ecole Nationale Supérieure des Télécommunications (Paris) and has a master’s degree from Stanford University.
     Fernando Flores Pérez. Mr. Fernando Flores Pérez served as Executive Director and Chairman of the Board of the Mexican Institute of Social Security (IMSS) from October 2005 until December 2006. From December 2004 to October 2005, he was Undersecretary of Labor, Security, and Social Security at the Ministry of Labor and Social Security. Mr. Flores joined Compañía Mexicana de Aviación in 1991 and served as Law and Administration Director, and from 1995 until 2004. As Executive Director and Chairman of the Board, he worked extensively to save the company of bankruptcy, a goal that he achieved in 2000. Mr. Flores has also served as Executive Director of Aerovías de México (Aeroméxico) from March to December 2004. From January 1997 to January 2000 he was the President of the National Air Transportation Chamber. Mr. Flores was Alternate Director for Administration at the Mexican Institute for Social Security, starting in January 1984. Previously, Mr. Flores was Corporate Director for Legal Affairs and Labor Relationships at Grupo Industrial Dina (June 1978 to December 1984) and legal director at Diesel Nacional S.A., Constructora Nacional de Carros de Ferrocarril, S.A. and Siderurgica

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Nacional S.A. (May 1975 to June 1978). Mr. Flores holds a law degree from the Universidad Iberoamericana, and he received the “Master de Oro en Alta Dirección” from the Forum de Alta Dirección in Spain.
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 year of appointment as an executive officer.
               
        Executive      
Name   Current position   officer since(2)   Age  
Ruben Gerardo López Barrera(1)
  Chief Executive Officer   December 11, 2003   37  
Nicolas Etienne Marcel Claude(1)
  Chief Operating Officer   October 14, 2004   41  
Victor Humberto Bravo Martin(1)
  Chief Financial Officer   March 20, 2006   41  
Manuel de la Torre Melendez
  General Counsel   January 1, 2004   43  
Jose Ignacio de la Peña Padilla
  Infrastructure and Maintenance Director   July 6, 2004   48  
Jean Philippe Frederic Percheron(1)
  Commercial and Marketing Director   April, 26, 2006   38  
Porfirio González Alvarez
  Airports Director   April 26, 2006   56  
María Victoria Zapata Guerrero
  Human Resources Director   April 14, 2006   45  
 
(1)   Appointed by SETA as holder of Series BB shares.
 
(2)   Date of Appointment.
     Rubén Gerardo López Barrera has served as OMA’s Chief Executive Officer since December 2003. Previously, he served as OMA’s General Vice President, Human Resources and Legal, and OMA’s Communications Director. Mr. López has also previously served as Business Development Director and Project Finance Director of ICA. Mr. López received a degree in Civil Engineering from Universidad Iberoamericana, a diploma in finance from the Instituto Tecnológico Autónomo de México, a master’s degree in business administration from the Pontificia Universidad Católica de Chile and the Washington University and a certificate in airport management and development from ADP.
     Nicolas Etienne Marcel Claude has served as OMA’s Chief Operating Officer since October 2004. Previously, he served as Master Planning Coordinator of ADP for the development of the Charles de Gaulle and Orly airports as well as other projects, including the Beijing Capital International Airport in China, and has also worked for ADP in strategic planning. A systems engineer by training, Mr. Claude also holds a master’s degree in statistics and a specialization study in airport management from Ecole Nationale de l’Aviation Civile in Toulouse.
     Víctor Humberto Bravo Martín has served as OMA’s Chief Financial Officer since March 2006. Prior to joining OMA, he served in various capacities with ICA, including Corporate Finance Director, Project Finance Director, Corporate Finance Analysis Manager and Corporate Economic Analysis Manager. Mr. Bravo holds a B.S. in economics from Instituto Tecnológico y de Estudios Superiores de Monterrey, a diploma in finance from Instituto Tecnológico Autónomo de México, a master’s degree in business administration from the Leonard N. Stern School of Business at New York University and the Manchester School of Business. He has also completed various specialization courses in the area of finance and management.

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     Manuel de la Torre Melendez has served as OMA’s General Counsel since January 2004. Prior to joining OMA, Mr. de La Torre was a senior associate at Thacher, Proffitt & Wood LLP, where he advised a variety of corporate clients with a particular focus on labor law. Mr. de la Torre is a professor of labor law and procedural labor law at the Instituto Tecnológico Autónomo de México and holds a law degree, magna cum laude, from the Universidad Nacional Autónoma de México. He is a member of the Mexican Bar Association, the Interamerican Bar Association and the Latin American Aeronautical Association.
     José Ignacio de la Peña Padilla has served as OMA’s Infrastructure and Maintenance Director since July 2004. Previously, he was the General Projects Director for the municipal government of Aguascalientes, the General Director of Rojas de la Peña and the Director of Public Electricity in Aguascalientes County. Mr. de la Peña holds a B.S. in civil engineering from the Instituto Tecnológico de Estudios Superiores Occidente, and he has completed a specialization in structural engineering from the Ecole Nationale des Travaux Publics de l’Etat in France and a specialization in structural design from the Centre des Hautes Études de la Construction in France.
     Jean Philippe Frederic Percheron has served as OMA’s Commercial and Marketing Director since April 2006, previously serving as OMA’s Assistant Director of Commercial Affairs. He also served as Manager of Commercial Activities at Aéroports de Paris and as Marketing Studies Director for Georges Chetochine Consulting. Mr. Percheron holds a degree in business administration from Ecole Superior de Commerce de Paris, a master’s degree in economics from Université de la Sorbonne de Paris, as well as a B.S. in civil engineering from the École Spéciale des Travaux Publics in Paris.
     Porfirio González Álvarez has served as OMA’s Airports Director since April 2006. Previously, he has served as OMA’s Business Unit Manager, as OMA’s Assistant Director of Operations and Development and as the Manager of OMA’s Monterrey International Airport. He has also served in various capacities in the Mexican federal government and the state government of Nuevo León. Mr. González holds a B.S. in civil engineering from the Universidad Autónoma de Nuevo León.
     Maria Victoria Zapata Guerrero has served as OMA’s Human Resources Director since April 2006. Previously, she has served as an Associate Human Resources Development Consultant with Consultores en Evaluación, Diagnóstico y Desarrollo Humano, as Human Resources Director with the Interiors Division of Lear Corporation and as Human Resources Strategic Planning Manager for Aeroméxico. She also served in various managerial capacities in the area of in human resources with NationsBank/Bank of America, First Chicago Bank, Kentucky Fried Chicken (Pepsico), Invermexico Casa de Bolsa and Empresas Lanzagorta. Ms. Zapata holds a B.S. in industrial relations from Universidad Iberoamericana, a diploma in human development from Universidad Iberoamericana, a diploma in executive management from Instituto Tecnológico y de Estudios Superiores de Monterrey and has been certified in various personnel development techniques.
     The business address of our directors and executive officers is our principal executive headquarters.
Compensation of Directors and Executive Officers
     For 2006, the aggregate compensation earned by our 32 officers (including executive officers, corporate managers, coordinators and airport administrators) was approximately Ps.60 million. As of the Shareholders’ meeting held on April 27, 2007, each of the Chief Executive Officer, the Chief Financial Officer, the General Counsel and the permanent invitees and secretaries for each meeting of the board or special committee receives compensation in the amount of Ps.40,000 net of any required withholding for

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each board meeting and corporate committee meeting attended. In addition, independent directors receives a fee of U.S.$250 net of any required withholding for each hour they dedicate to our affairs outside of board meetings and corporate committee meetings.
     None of our directors or executive officers are entitled to benefits upon termination under their service contracts with us, except for what is due them according to the Federal Labor Law (Ley Federal del Trabajo).
Committees
     Our bylaws provide for three committees to assist the board of directors with the management of our business: an Audit Committee, a Corporate Practices Committee and a Nominations Committee.
Audit Committee
     The Audit Committee, currently composed of three members, is responsible for (i) the appointment and removal of our external auditor, (i) supervising ours external auditors and analyzing their reports, (ii) analyzing and supervising the preparation of our financial statements, (iii) informing the board of our internal controls and their adequacy, (iv) requesting reports from our board of directors and executive officers whenever it deems appropriate, (v) informing the board of any irregularities that it may encounter, (vi) receiving and analyzing recommendations and observations made by the shareholders, members of the board, executive officers, our external auditors or any third party and taking the necessary actions, (vii) calling shareholders’ meetings, (viii) supervising the activities of our general director and (ix) providing an annual report to the board.
     Our bylaws provide that a shareholders’ meeting shall determine the number of members of the Audit Committee, all of whom must be members of our board of directors and independent. The members of the Audit Committee are appointed by the board of directors, except for one member who may be appointed by the Series BB Directors. The chairman of the Audit Committee was elected by our shareholders’ meeting held on April 27, 2007. The current members of the Audit Committee are Luis Guillermo Zazueta (Chairman of the Committee), Alberto Felipe Mulás Alonso and Manuel F. Arce Rincon. Luis Guillermo Zazueta has been designated as an “audit committee financial expert” as defined by the Commission.
     The chairman of the Audit Committee shall prepare 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 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.
Corporate Practices Committee
     The Corporate Practices Committee, currently composed of three members, is responsible for (i) providing opinions to our board of directors, (ii) requesting and obtaining opinions from independent experts, (iii) calling shareholder’s meetings, (iv) assisting the board in the preparation of annual reports

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and other reporting obligations and (v) proposing for shareholder approval the compensation to be paid to members of our board of directors and the boards of directors of our subsidiaries.
     Our bylaws provide that a shareholders’ meeting shall determine a minimum number of members of the Corporate Practices Committee, all of which must be members of our board of directors and be approved by shareholder resolution. The members of the Corporate Practices Committee are appointed by the board of directors, except for one member who may be appointed by the Series BB Directors. The chairman of the Corporate Practices Committee is elected by the shareholders meeting. Under the Mexican Securities Market Law and our bylaws, all members of the Corporate Practice Committee must be independent (except to the extent a controlling shareholder or shareholders maintain 50% or more of our outstanding capital stock, in which case a majority must be independent). The current members of our Corporate Practices Committee are Alberto Felipe Mulás Alonso (Chairman of the Committee), Luis Guillermo Zazueta and Manuel F. Arce Rincon.
     The chairman of the Corporate Practices Committee shall prepare an annual report to our board of directors with respect to the findings of the Corporate Practices 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.
Nominations Committee
     The Nominations Committee, currently composed of three members, is responsible for the proposal of candidates for election to the board of directors. Our bylaws provide that the holders of the Series B and Series BB shares, acting as a class, are each entitled to name one member of the Nominations Committee. The remaining member of the committee is to be designated by the two members who were selected by the Series B and Series BB shareholders. If these two members are unable to reach agreement, the remaining members of the committee will be designated by the majority of the votes in the shareholders’ meeting. Members of the committee each have a term of one year. At each annual shareholders’ meeting, the Nominations Committee is required to present a list of candidates for election as directors for the vote of the shareholders. The current members of our Nominations Committee are Manuel F. Arce Rincon (Chairman of the Committee), José Luis Guerrero Álvarez and Arturo Olvera Vega.
NASDAQ Corporate Governance Comparison
     Pursuant to Rule 4350(a)(1) 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 Securities Market Law and the regulations issued by the Mexican National Banking and Securities Commission. We also generally comply on a voluntary basis with the Mexican Code of Best Corporate Practices (Codigo de Mejores Practicas Corporativas) as indicated below, which was created in January 2001 by a group of Mexican business leaders and was endorsed by the Mexican Banking and Securities Commission. On an annual basis, we file a report with the Mexican Banking and Securities Commission and the Mexican Stock Exchange regarding our compliance with the Mexican Code of Best Corporate Practices.
     On December 30, 2005, a new Mexican Securities Market Law was published in the Diario Oficial de la Federación, which became effective on June 28, 2006.

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     The table below discloses the significant differences between our corporate governance practices and the NASDAQ standards.
                 
NASDAQ Standards       Our Corporate Governance Practice
 
               
Director Independence. Majority of board of directors must be independent and directors deemed independent must be identified in a listed company’s proxy statement (or annual report on Form 10-K or 20-F if the issuer does not file a proxy statement). “Controlled companies,” which would include our company if we were a U.S. issuer, are exempt from this requirement. A Controlled company is one in which more than 50% of the voting power is held by an individual, group or another company, rather than the public. Rules 4350(c)(1) & (c)(5).       Director Independence. Pursuant to the Mexican Securities Market Law, we are required to have a board of directors composed of a maximum of 21 members, 25% of whom must be independent. One alternate director may be appointed for each principal director; provided that the alternates for the independent director must also be independent. Certain persons are per se non-independent, including insiders, control persons, major suppliers, and any relatives of such persons. In accordance with the Mexican Securities and Market Law, our shareholders’ meeting is required to make a determination as to the independence of our directors, though such determination may be challenged by the National Banking and Securities Commission. There is no exemption from the independence requirement for controlled companies.
 
               
        Our by-laws provide that our Board of Directors shall be composed of at least 11 members. Currently, our board has seven members, of which five are independent under the Mexican Securities Market Law and the Sarbanes-Oxley Act of 2002.
 
               
Executive Sessions. Independent directors must meet regularly in executive sessions at which only independent directors are present. Rule 4350(c)(2).       Executive Sessions. Our non-management and independent directors are not required to meet in executive sessions and generally do not do so. Under our bylaws and applicable Mexican law, executive sessions are not required.
 
               
Nominations Committee. Director nominees must be selected, or recommended for the board’s selection, either by a nominating committee comprised solely of independent directors or by a majority of independent directors. Each listed company also must certify that it has adopted a formal charter or board resolution addressing the nominations process. “Controlled companies” are exempt from this requirement. Rules 4350(c)(4)(A)-(B) & (c)(5).       Nominations Committee. We are not required to have a nominating committee. Our bylaws, however provide for a Nominations Committee, which we believe carries out the principal duties of a nominating committee. The duties of our Nominations Committee include, among others, nominating candidates for election as directors at the shareholders’ meeting. The Nominations Committee is composed of three members who are appointed by the shareholders at a shareholders’ meeting. Pursuant to our bylaws, at least one member is appointed by the Series B shareholders

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NASDAQ Standards       Our Corporate Governance Practice
 
               
        and at least one member is appointed by the Series BB shareholders. The remaining member is to be designated by the two appointed members. If these two members are unable to reach an agreement, the remaining member will be designated by majority vote of the shareholders.
 
               
Audit Committee. Audit committee satisfying the independence and other requirements of Rule 10A-3 under the Exchange Act and the more stringent requirements under the NASDAQ standards is required. Rule 4350(d).       Audit Committee. We are in compliance with the independence requirements of Rule 10A-3. Marketplace Rule 4350(a)(1) permits us to follow our home country governance practices in lieu of certain NASDAQ requirements, and as such the members of our Audit Committee are not required to satisfy the NASDAQ independence and other audit committee standards that are not prescribed by Rule 10A-3.
 
               
        The principal characteristics of our Audit Committee are as follows:
 
               
          Our Audit Committee is composed of three members, all of whom are members of our board of directors.
 
               
          All of the members of our Audit Committee and the committee’s president are independent.
 
               
          The Chairman of the Audit Committee is appointed and/or removed exclusively by the general shareholders’ meeting.
 
               
          Our Audit Committee operates pursuant to provisions in the Mexican Securities Market Law and our bylaws.
 
               
          Our Audit Committee submits an annual report regarding its activities to our Board of Directors.
 
               
          The duties of our Audit Committee include, among others, the following:
 
               
 
            overseeing of our internal auditing and controls systems, and
 
               
 
            appointing and removing, and supervising our external auditor and establishing the scope of the external auditor’s duties and responsibilities.
 
               
 
            ensuring compliance with our by-laws by officers and directors of the company and its subsidiaries,
 
               
 
            making recommendations to the Nomination and Compensation Committee with respect to the removal of directors

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NASDAQ Standards       Our Corporate Governance Practice
 
               
 
              and officers for violations of the by-laws or any other applicable legal provision,
 
               
 
            overseeing compliance with the corporate governance provisions as set forth in the General Law of Business Companies (Ley General de Sociedades Mercantiles), and the Mexican Securities Market Law and protection of minority shareholder rights,
 
               
 
            overseeing related-party transactions,
 
               
 
            preparing certain regular reports for the board of directors pursuant to the Mexican Securities Market Law and our bylaws

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NASDAQ Standards       Our Corporate Governance Practice
 
               
Compensation Committee. CEO compensation must be determined, or recommended to the board for determination, either by compensation committee comprised solely of independent directors or a majority of the independent directors and the CEO may not be present during voting or deliberations. Compensation of all other executive officers must be determined in the same manner, except that the CEO, and any other executive officers, may be present. “Controlled companies” are exempt from this requirement. Rules 4350(c)(3)(A)-(B) & (c)(5).       Corporate Practices Committee. Pursuant to the Mexican Securities Market Law, we are required to have a corporate governance committee, although we are not required to have a separate compensation committee. The Mexican Securities Market Law requires that committees consist of at least 3 independent directors appointed by the board of directors. All committee members must be independent (except to the extent a controlling shareholder or shareholders own 50% or more of our outstanding capital stock, in which case the majority must be independent). Pursuant to our bylaws and the Mexican Securities Market Law, the duties of our Corporate Practices Committee include, among others, the following:
 
               
          providing opinions to o9ur board of directors on certain matters;
 
               
          requesting and obtaining opinions from independent experts;
 
               
          calling shareholders’ meeting;
 
               
          assisting the board in the preparation of annual reports and other reporting obligations; and
 
               
          proposing for shareholder approval the compensation to be paid to members of our board of directors and the boards of directors of our subsidiaries.
 
               
        The board has vested certain functions and responsibilities of this committee on our Audit Committee.
 
               
        The duties of our Audit Committee with regard to corporate practices are, among others, the following:
 
               
          evaluating the performance of relevant officers,
 
               
          reviewing related-party
transactions, and
 
               
          determining the total compensation package of the chief executive officer.

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NASDAQ Standards       Our Corporate Governance Practice
 
               
Equity Compensation Plans. Equity compensation plans require shareholder approval, subject to limited exemptions. Rule 4350(i)(1)(A)       Equity Compensation Plans. Shareholder approval is not expressly required under our bylaws for the adoption and amendment of an equity-compensation plan. Such plans must provide from similar treatment of executives in comparable positions. No equity-compensation plans have been approved by our shareholders.
 
               
Shareholder Approval for Issuance of Securities. Issuances of securities (1) that will result in a change of control of the issuer, (2) in connection with certain acquisitions of the stock or assets of another company, or (3) in connection with certain transactions other than public offerings require shareholder approval. Rules 4350(i)(1)(B)-(D).       Shareholder Approval for Issuance of Securities. Mexican law and our bylaws require us to obtain shareholder approval for the issuance of equity securities. Treasury stock, however, may be issued by the board of directors without shareholder approval.
 
Code of Ethics. Corporate governance guidelines and a code of business conduct and ethics is required, with disclosure of any waiver and the reasons for such waiver for directors or executive officers. The code must include an enforcement mechanism. Rule 4350(n).       Code of Ethics. We have adopted a code of ethics applicable to all of our directors and executive officers, which is available to you free of charge upon request and at www.oma.aero. We are required by Item 16B of Form 20-F to disclose any waivers granted to our chief executive officer, chief financial officer and persons performing similar functions, as well as to our other officers/employees.
 
               
Conflicts of Interest. Appropriate review of all related party transactions for potential conflict of interest situations and approval by an audit committee or another independent body of the board of directors of such transactions is required. Rule 4350(h).       Conflicts of Interest. In accordance with Mexican law and our bylaws, the audit committee must provide an opinion regarding any transaction with a related party that is outside of the ordinary course of business, and such transactions must be approved by the board of directors. Pursuant to the Mexican Securities Market Law, our board of directors and our Audit Committee are required to establish certain guidelines regarding related party transactions that do not require board approval.
 
               
Solicitation of Proxies. Solicitation of proxies and provision of proxy materials is required for all meetings of shareholders. Copies of such proxy solicitations are to be provided to NASDAQ. Rule 4350(g).       Solicitation of Proxies. Under the Mexican Securities Market Law, we are obligated to make available proxy materials for meetings of shareholders. In accordance with Mexican law and our bylaws, we inform shareholders of all meetings by public notice, which states the requirements for admission to the meeting and provides a mechanism by which shareholders can vote by proxy. Under the deposit agreement relating to our ADSs, holders of our ADSs receive notices of shareholders’ meetings and, where applicable, requests for instructions to the ADS depositary for the voting of shares represented by ADSs.

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NASDAQ Standards       Our Corporate Governance Practice
 
               
Peer Review. A listed company must be audited by an independent public accountant that (i) has received an external quality control review by an independent public accountant (“peer review”) that determines whether the auditor’s system of quality control is in place and operating effectively and whether established policies and procedures and applicable auditing standards are being followed or (ii) is enrolled in a peer review program and within 18 months receives a peer review that meets acceptable guidelines. Rule 4350(k).       Peer Review. Under Mexican law, we must be audited by an independent public accountant that has received a “quality control review” as defined by the National Banking and Securities Commission. Galaz, Yamazaki, Ruiz Urquiza, S.C., a member of Deloitte & Touche Tohmatsu, our independent auditor, is not subject to “peer review” as such term is defined in Marketplace Rule 4350(k).
Employees
     As of December 31, 2006, we had approximately 944 employees. The total number of employees increased by 4.4% in 2005 and by 1.5% in 2006 due primarily to the addition of personnel operating our cargo facilities and security personnel. At December 31, 2006, approximately 59% of our employees were unionized.

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     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.
Employees
                         
    December 31,
    2004   2005   2006
Categories of activity:
                       
Airport operations
    466       493       497  
Airport maintenance
    142       145       153  
Administration(1)
    283       292       294  
 
                       
Geographic location:
                       
Acapulco
    88       94       91  
Ciudad Juárez
    47       48       49  
Culiacán
    50       51       50  
Chihuahua
    53       61       61  
Durango
    33       41       42  
Mazatlán
    69       69       69  
Monterrey
    173       174       188  
Reynosa
    27       29       27  
San Luis Potosí
    39       39       40  
Tampico
    50       58       57  
Torreón
    47       46       47  
Zacatecas
    40       40       42  
Zihuatanejo
    45       47       47  
Servicios Aeroportuarios del Centro Norte, S.A. de C.V.
    130       133       134  
 
                       
Total(1)
    891       930       944  
 
                       
 
(1)   At December 31, 2004, 2005 and 2006, includes 130, 133 and 134 persons respectively, employed by Servicios Aeroportuarios del Centro Norte, S.A. de C.V., our administrative services subsidiary.
     All of our unionized employees are members of local chapters of the Mexican National Union of Airport and Auxiliary Services Workers, an organization formed in 1998 whose members include employees of the Mexican Airport and Auxiliary Services Agency as well as of the three other airport groups (the Southeast Group (Grupo Aeroportuario del Sureste, S.A. de C.V.), the Mexico City Group (Grupo Aeroportuario de la Ciudad de México), and the Pacific Group (Grupo Aeroportuario del Pacifico, S.A. de C.V.) operating in Mexico. Labor relations with our employees are governed by 13 separate collective labor agreements, each relating to one of our 13 airport subsidiaries, and negotiated by the local chapter of the union. As is typical in Mexico, wages are renegotiated every year, while other terms and conditions of employment are renegotiated every two years. We last renegotiated our collective bargaining agreements with our unionized employees in October 2006. We believe that our relations with employees are good. We believe the wages we paid to Servicios Aeroportuarios del Centro Norte S.A. de C.V., or the Service Company, employees are similar to those paid to employees of similar airport operating companies in Mexico.
     We maintains 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 pre-tax salaries. We make bi-weekly contributions matching each employee’s contribution. Employees are entitled to withdraw the funds in their accounts on an annual basis. In 2004, 2005 and 2006, we made a total of Ps.17.3 million, Ps.18.6 million and Ps. 17.7 million, respectively, in payments to employees’ accounts pursuant to the savings plan.

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     Funds in the savings plan may be used to make loans 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.
Item 7. Major Shareholders and Related Party Transactions
MAJOR SHAREHOLDERS
     Aeroinvest is our controlling shareholder. Aeroinvest directly owns 144,151,500 of our Series B shares that represent 36.04% of our outstanding capital stock. Aeroinvest also directly owns 331,972,000 Series A shares of SETA that represent 74.5% of its capital stock. SETA in turn owns 58,800,000 of our Series BB shares and 8,000,000 Series B shares that collectively represent 16.7% of our capital stock. Consequently, Aeroinvest is the beneficial owner of 48.48% of our capital stock.
     In November of 2006, a Mexican trust established by NAFIN, or the NAFIN Trust, acting pursuant to the instructions of the Ministry of Communications and Transportation, sold 48.0% of our outstanding capital stock through a global public offering of shares in the form of American Despositary 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.
     The following table sets forth information with respect to beneficial ownership of our capital stock as of May 30, 2007:
                                 
                    Percentage of total
    Number of shares   share capital
Identity of stockholder   B Shares   BB Shares   B Shares   BB Shares
Aeroinvest(1)
    144,151,500               36.04 %        
SETA(2)
    8,000,000       58,800,000       2.0 %     14.70 %
Public
    192,080,000             47.87 %      
Officers and Directors
    601,413             0.15 %      
 
(1)   In addition to the Series B shares it directly owns, Aeroinvest may be deemed to beneficially own all of OMA’s shares owned by SETA by virtue of its ownership of 74.5% of SETA’s capital stock. Aeroinvest and SETA are subsidiaries of ICA.
 
(2)   Held in trust with Bancomext. Aeroinvest and SETA are subsidiaries of ICA.
Arrangements relating to SETA
     The rules governing the sale of our Series BB shares to SETA required that SETA place all of its Series BB shares in trust in order to guarantee SETA’s performance of its obligations under the Technical Assistance Agreement and SETA’s commitment to maintain its interest in us for a specified period. Accordingly, SETA has placed its shares in trust with Bancomext or the Bancomext Trust. Pursuant to our bylaws, the Technical Assistance Agreement, the Participation Agreement, and the Bancomext Trust, SETA is required to retain at least 51% of our shares until June 14, 2007, after which it is entitled to transfer up to one eighth of this 51% during each year thereafter. The terms of the Bancomext Trust will be extended for an additional 15 years if, at the end of the initial 15-year term, SETA holds shares representing more than 10% of our capital stock. SETA may terminate the Bancomext Trust before the second 15-year term begins if: (i) SETA holds less than 10.0% of our capital stock at the end of the initial term; and (ii) the Technical Assistance Agreement has been terminated. If the Bancomext Trust is not terminated within the second 15-year term, SETA is required to instruct Bancomext to transfer th