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Filed Pursuant to Rule 424(b)(1)
Registration No. 333-138710

        167,026,086 Series B Shares

Grupo Aeroportuario del Centro Norte, S.A.B. de C.V.

Common Stock
in the form of American
Depositary Shares (ADSs)
and Series B Shares


        83,513,040 Series B shares are initially being offered in the United States and elsewhere outside of Mexico in the form of ADSs and Series B shares. An additional 83,513,046 Series B shares are being concurrently offered in Mexico.

        The selling stockholder is selling all of the ADSs and Series B shares. We will not receive any proceeds from this global offering.

        Prior to this global offering, there has been no public market for the ADSs or Series B shares. The initial offering price for each ADS is U.S. $18.00, and the initial offering price for each Series B share is U.S. $2.25, reflecting the ratio of eight Series B shares per ADS. In the Mexican offering, the initial public offering price for each Series B share is Ps. 24.85, which is the approximate peso equivalent of the international offering price per Series B share of U.S. $2.25, based on an exchange rate of Ps. 11.0454 per U.S. $1.00. The ADSs have been approved for listing on The NASDAQ Global Market under the symbol "OMAB" and the Series B shares have been approved for listing on the Mexican Stock Exchange under the symbol "OMA."

        The underwriters have an option to purchase a maximum of 12,526,952 additional Series B shares to cover over-allotments of shares. The underwriters in the Mexican offering have an option to purchase a maximum of 12,526,962 additional Series B shares to cover over-allotments of shares.

        Investing in the ADSs or Series B shares involves risks. See "Risk Factors" on page 21.


 
  Price to Public
  Underwriting
Discounts and
Commissions(1)

  Proceeds to
Selling
Stockholder

Per ADS   U.S. $18.00              U.S. $0.06300          U.S. $17.937              
Per Series B share   U.S. $2.25                U.S. $0.00788          U.S. $2.242                
Total   U.S. $187,904,340.00   U.S. $657,665.19   U.S. $187,246,674.81
(1)
The selling stockholder has also agreed to reimburse certain expenses of the underwriters. See "Underwriting."


        Delivery of the ADSs and the Series B shares is expected to be made on or about December 4, 2006.

        Neither the Securities and Exchange Commission, the Mexican National Banking and Securities Commission (Comisión Nacional Bancaria y de Valores) nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

        Application has been made for the registration of the Series B shares in the Mexican National Securities Registry (Registro Nacional de Valores) maintained by the Mexican National Banking and Securities Commission and in the Special Section (Sección Especial) maintained by the Mexican National Securities Registry. Such registration is not a certification as to the investment quality of the securities, the solvency of the issuer or the accuracy or completeness of the information contained in this prospectus.

Citigroup


LOGO   LOGO

The date of this prospectus is November 28, 2006.


GRAPHIC



TABLE OF CONTENTS

PRESENTATION OF FINANCIAL INFORMATION   1
EXCHANGE RATES   2
INDUSTRY AND OTHER DATA   3
SUMMARY   5
THE COMPANY   5
THE GLOBAL OFFERING   12
SUMMARY CONSOLIDATED FINANCIAL INFORMATION   17
RISK FACTORS   21
BUSINESS STRATEGY   39
USE OF PROCEEDS   42
CAPITALIZATION   42
DILUTION   43
MARKET INFORMATION   44
DIVIDEND POLICY   50
SELECTED CONSOLIDATED FINANCIAL INFORMATION   52
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS   56
BUSINESS   87
REGULATORY FRAMEWORK   120
MANAGEMENT   134
RELATED PARTY TRANSACTIONS   143
PRINCIPAL STOCKHOLDERS AND SELLING STOCKHOLDER   145
DESCRIPTION OF CAPITAL STOCK   149
DESCRIPTION OF AMERICAN DEPOSITARY SHARES   167
TAXATION   173
UNDERWRITING   177
NOTICE TO CANADIAN RESIDENTS   182
FORWARD-LOOKING STATEMENTS   183
WHERE YOU CAN FIND MORE INFORMATION   184
ENFORCEABILITY OF CIVIL LIABILITIES   185
VALIDITY OF SECURITIES   185
EXPERTS   185
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS   F-1

You should rely only on the information contained in this document. We have not authorized anyone to provide you with information that is different. This document may only be used where it is legal to sell these securities. The information contained in this document is accurate on the date of this document and may no longer be accurate at the time of the delivery of this prospectus or any sale of the ADSs or Series B shares.


NOTICE TO UNITED KINGDOM RESIDENTS

        This offering is only being made to persons in the United Kingdom whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their businesses or otherwise in circumstances which have not resulted and will not result in an offer to the public in the United Kingdom within the meaning of the Public Offers of Securities Regulations 1995 or the UK Financial Services and Markets Act 2000, or FSMA, and each underwriter has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity (within the meaning of section 21 of FSMA) received by it in connection with the issue or sale of the ADSs in circumstances in which section 21(1) of FSMA does not apply to Grupo Aeroportuario del Centro Norte, S.A.B. de C.V. Each of the underwriters agrees and acknowledges that it has complied and will comply with all applicable provisions of FSMA with respect to anything done by it in relation to the ADSs in, from or otherwise involving the United Kingdom.

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PRESENTATION OF FINANCIAL INFORMATION

        Our audited financial statements are prepared in accordance with accounting principles generally accepted in Mexico and Mexican Financial Reporting Standards (Normas de Información Financiera), which we refer to collectively as Mexican GAAP. Mexican GAAP differs in certain significant respects from accounting principles generally accepted in the United States of America, or U.S. GAAP. For example, Mexican GAAP 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, restating the components of stockholders' equity using the Mexican National Consumer Price Index and recording gains or losses in purchasing power from holding monetary liabilities or assets. Mexican GAAP also requires the restatement of all financial statements to constant Mexican pesos as of the date of the most recent balance sheet presented. Our audited year-end and unaudited interim financial statements and all other financial information contained herein are accordingly presented in constant pesos with purchasing power as of June 30, 2006, unless otherwise noted. For a more detailed discussion of these differences as they relate to our business, see Note 19 to our audited year-end financial statements and Note 18 to our unaudited interim financial statements for the six-month periods ended June 30, 2006 and 2005.

        References in this prospectus to "dollars," "U.S. dollars," "$" or "U.S. $" are to the lawful currency of the United States. References in this prospectus to "pesos," "Pesos" or "Ps." are to the lawful currency of Mexico. We publish our financial statements in pesos.

        This prospectus contains translations of certain peso amounts to U.S. dollars at specified rates solely for your convenience. These translations do not mean that the peso amounts actually represent such dollar amounts or could be converted into U.S. dollars at the rate indicated. Unless otherwise indicated, we have translated these U.S. dollar amounts from pesos at the exchange rate of Ps. 11.2865 per U.S. $1.00, the Federal Reserve Bank of New York noon buying rate on June 30, 2006.

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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 by 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 prospectus could have been or could be converted into U.S. dollars at any particular rate or at all.


Exchange Rates

Year Ended December 31,

  High
  Low
  Average(1)
  Period End
2000   10.09   9.18   9.47   9.62
2001   9.97   8.95   9.33   9.16
2002   10.43   9.00   9.75   10.43
2003   11.41   10.11   10.85   11.24
2004   11.64   10.81   11.31   11.15
2005   11.41   10.41   10.89   10.63
2006:                
  January 2006   10.64   10.44   10.54   10.44
  February 2006   10.53   10.43   10.48   10.45
  March 2006   10.95   10.46   10.75   10.90
  April 2006   11.16   10.86   11.05   11.10
  May 2006   11.31   10.84   11.09   11.29
  June 2006   11.46   11.28   11.39   11.29
  July 2006   11.18   10.90   10.98   10.92
  August 2006   11.02   10.74   10.87   10.91
  September 2006   11.10   10.84   10.99   10.98
  October 2006   11.06   10.71   10.89   10.77
  November 2006 (through November 28)   11.05   10.75   10.90   11.03

(1)
Average of month-end rates or daily rates, as applicable.

Source:
Federal Reserve Bank of New York 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, including the Series B shares 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 Series B shares represented by ADSs.

        On June 30, 2006, the Federal Reserve Bank of New York noon buying rate was Ps. 11.2865 per U.S. $1.00. On November 28, 2006, the Federal Reserve Bank of New York noon buying rate was Ps. 11.0331 per U.S. $1.00.

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INDUSTRY AND OTHER DATA

        This prospectus contains certain statistical and other information regarding international and Mexican airports. This information has been derived or extracted, as noted, from official publications of the Mexican Bureau of Civil Aviation (Dirección General de Aeronáutica Civil) and the Airport and Auxiliary Services Agency (Aeropuertos y Servicios Auxiliares).

        This prospectus also includes certain demographic and tourism data that have been extracted or derived from publications of the World Tourism Organization, the Mexican Ministry of Tourism (Secretaría de Turismo), the Mexican Central Bank (Banco de México), the Mexican National Institute of Statistics, Geography and Informatics (Instituto Nacional de Estadística, Geografía e Informática), the Mexican National Institute of Migration (Instituto Nacional de Migración), the Mexican Bureau of Civil Aviation and the Association of the Development of Timeshares. All population data for Mexico included in this prospectus are based on estimated population data as of 2005 published by the Mexican National Institute of Statistics, Geography and Informatics or information published by the Mexican National Population Council (Consejo Nacional de Población). All information included in this prospectus that is identified as having been derived or extracted from these institutions is included herein on the authority of such sources as public official documents.

        All information in this prospectus relating to an airport's percentage of international passengers is based on the number of that airport's passengers arriving directly from and departing, either directly or connecting via another airport in Mexico, to foreign destinations relative to the total number of passengers served by that airport, unless otherwise specified. All information in this prospectus relating to an airport's percentage of domestic passengers is based on the number of that airport's passengers arriving from and departing to domestic destinations relative to the total number of passengers served by that airport. Accordingly, this information reflects the place of origin or destination of passengers as opposed to their residence.

        When we refer to "terminal passengers" we are referring to the sum of all arriving and departing passengers on commercial and general aviation flights, excluding transit passengers. "Transit passengers," or through passengers, are those who generally are not required to change aircraft while on a multiple-stop itinerary and generally do not disembark their aircraft to enter the terminal building. When we refer to "total passengers" we are referring to the sum of terminal passengers plus transit passengers. When we refer to "commercial aviation passengers" we are referring to the sum of terminal and transit passengers, excluding general aviation passengers, such as those on private non-commercial aircraft. System-wide data in Mexico are based on commercial aviation passengers, but we generally measure our operations based on terminal passengers.

        When we refer to "air traffic movements" we are referring to the sum of all aircraft arrivals and departures of any kind at an airport.

        This prospectus includes 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. Cargo for this purpose excludes mail and checked passenger baggage.

        As used in this prospectus, "maximum rate" refers to the maximum amount of revenues per workload unit that an airport may earn annually from services subject to price regulation pursuant to the terms of our concessions and applicable Mexican law. Each airport's maximum rates may be adjusted periodically to reflect changes in the Mexican producer price index (excluding petroleum). For a detailed discussion of the relevance of the maximum rates to our business, see "Regulatory Framework—Revenue Regulation."

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        Unless otherwise indicated, the information contained in this prospectus assumes that the underwriters' and Mexican underwriters' over-allotment options to purchase an additional 12,526,952 Series B shares and 12,526,962 Series B shares, respectively, from the selling stockholder is not exercised. For further information regarding the options to purchase additional shares, see "Underwriting" and "Principal Stockholders and Selling Stockholder."

        At a shareholders' meeting held on October 2, 2006, our shareholders agreed to effect a reverse stock split whereby one new share of capital stock was issued in exchange for each outstanding 14.69482276 shares of capital stock. Unless otherwise noted herein, all share and per-share data in this prospectus have been adjusted to reflect the reverse stock split for all periods presented.

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SUMMARY

        This summary highlights selected information from this prospectus and may not contain all of the information that is important to you. This prospectus includes specific terms of the ADSs and the Series B shares that the selling stockholder is offering, as well as information regarding our business and detailed financial information. You should read the entire prospectus carefully, including the risk factors and financial statements.

        Grupo Aeroportuario del Centro Norte, S.A.B. de C.V. is a holding company that conducts substantially all of its operations through its subsidiaries. Grupo Aeroportuario del Centro Norte, S.A.B. de C.V. and each of its subsidiaries are organized under the laws of Mexico. The terms "we," "our" and "us" in this prospectus 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.


THE COMPANY

Introduction

        We were incorporated in 1998 as part of the Mexican government's program for the opening of Mexico's airports to private investment. 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 Mexican Ministry of Communications and Transportation (Secretaría de Comunicaciones y Transportes) under certain circumstances for up to 50 additional years. As operator of the 13 airports under our concessions, we charge airlines, passengers and other users fees 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.

Our Operations

        We operate 13 airports, which serve a major metropolitan area (Monterrey), 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 9 of the 31 Mexican states, covering a territory of approximately 926,421 square kilometers (approximately 575,667 square miles), with a population of approximately 24.0 million according to the National Institute of Statistics, Geography and Informatics 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 15.3% of all arriving and departing commercial aviation passengers in Mexico in 2005.

        In 2005, we recorded revenues of Ps. 1,380 million (U.S. $122 million) and net income of Ps. 355 million (U.S. $31 million). In the first six months of 2006, we recorded revenues of Ps. 772 million (U.S. $68 million) and net income of Ps. 255 million (U.S. $22 million). Our airports handled approximately 10.6 million terminal passengers in 2005. In the first six months of 2006, our airports handled approximately 5.8 million terminal passengers.

        Our airports serve several major international routes, including Monterrey-Houston, Monterrey-Dallas and Monterrey-Madrid, as well as 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

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Monterrey-Mexico City, which was the country's busiest domestic route in 2005, with approximately 1.9 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, 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. We believe that both the economic growth of the city of Monterrey and corresponding passenger traffic growth at our Monterrey International Airport are closely linked to Mexico's economic performance. The airport is our leading airport in terms of passenger traffic volume, air traffic movements and contribution to revenues, and ranked fourth among the top ten busiest airports in Mexico based on passenger traffic volume in 2005, according to data published by the Mexican Bureau of Civil Aviation. Monterrey International Airport accounted for approximately 44.0% and 43.2% of our terminal passenger traffic in 2005 and the first six months of 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 2005, according to the Mexican National Institute of Migration. Acapulco is a principal port of embarkation and disembarkation for cruise ships. In 2005 and the first six months of 2006, our Acapulco International Airport, our Mazatlán International Airport and our Zihuatanejo International Airport collectively accounted for 21.5% and 24.7%, respectively, of our aggregate terminal passengers and 22.2% and 25.1%, respectively, of our total revenues.

        Mexico was the eighth largest tourist destination in the world in 2005 in terms of international arriving tourists (24 million), according to the World Tourism Organization. Within Latin America and the Caribbean, Mexico ranked first in 2005 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 (San Luis Potosí International Airport). In 2005 and the first six months of 2006, these seven regional airports collectively accounted for 27.3% and 25.2%, respectively, of our aggregate terminal passengers and 28.0% and 25.8%, respectively, of our total revenues.

        The remaining two airports in our 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 2005 and the first six months of 2006, our Ciudad Juárez International Airport and our Reynosa International Airport collectively accounted for 7.2% and 6.9%, respectively, of our aggregate terminal passengers and 6.4% and 6.0%, respectively, 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 for the six months ended June 30, 2006:

 
  Year ended December 31, 2005
  Six months ended June 30, 2006
Airport
  Terminal
passengers

  Revenues
  Revenues
per terminal
passenger(1)

  Terminal
passengers

  Revenues
  Revenues
per terminal
passenger(1)

 
  Number
(in
millions)

  %
  (millions
of pesos)

  %
  (pesos)
  Number
(in
millions)

  %
  (millions
of pesos)

  %
  (pesos)
Metropolitan area:                                        
  Monterrey International Airport   4.7   44.0 % 598.2   43.4 % 128.4   2.5   43.2 % 332.3   43.1 % 133.0
Tourist destinations:                                        
  Acapulco International Airport   0.9   8.3 % 118.1   8.6 % 134.2   0.6   9.8 % 78.0   10.1 % 138.2
  Mazatlán International Airport   0.8   7.5 % 113.0   8.2 % 141.3   0.5   8.0 % 65.0   8.4 % 140.2
  Zihuatanejo International Airport   0.6   5.7 % 74.8   5.4 % 122.9   0.4   6.9 % 51.0   6.6 % 128.6
   
 
 
 
 
 
 
 
 
 
    Total tourist destinations   2.3   21.5 % 305.9   22.2 % 133.7   1.5   24.7 % 194.0   25.1 % 136.2
   
 
 
 
 
 
 
 
 
 
Regional cities:                                        
  Chihuahua International Airport   0.6   5.7 % 80.7   5.8 % 134.5   0.3   5.2 % 42.0   5.4 % 141.0
  Culiacán International Airport   0.8   7.3 % 95.6   6.9 % 124.3   0.4   6.8 % 49.9   6.5 % 127.0
  Durango International Airport   0.2   2.0 % 27.9   2.0 % 130.0   0.1   1.7 % 12.5   1.6 % 127.8
  San Luis Potosí International Airport   0.2   2.2 % 39.5   2.9 % 168.9   0.1   2.0 % 19.2   2.5 % 169.1
  Tampico International Airport   0.4   3.8 % 53.6   3.9 % 133.2   0.2   3.8 % 29.9   3.9 % 131.8
  Torreón International Airport   0.4   3.5 % 51.1   3.7 % 136.4   0.2   3.0 % 23.4   3.0 % 133.9
  Zacatecas International Airport   0.3   2.8 % 38.8   2.8 % 130.7   0.1   2.7 % 22.1   2.9 % 139.7
   
 
 
 
 
 
 
 
 
 
    Total regional destinations   2.9   27.3 % 387.2   28.0 % 133.9   1.4   25.2 % 199.0   25.8 % 136.2
   
 
 
 
 
 
 
 
 
 
Border cities:                                        
  Ciudad Juárez International Airport   0.6   5.8 % 71.4   5.2 % 116.7   0.3   5.2 % 37.9   4.9 % 115.3
  Reynosa International Airport   0.1   1.4 % 16.9   1.2 % 115.7   0.1   1.7 % 8.3   1.1 % 127.7
   
 
 
 
 
 
 
 
 
 
    Total border city destinations   0.9   8.5 % 88.3   6.4 % 116.5   0.4   6.9 % 46.2   6.0 % 117.4
   
 
 
 
 
 
 
 
 
 
TOTAL   10.6   100.0 % 1,379.6   100.0 % 130.2   5.8   100.0 % 771.5   100.0 % 133.5
   
 
 
 
 
 
 
 
 
 

(1)
Revenues per terminal passenger are calculated by dividing the total revenues for each airport by the number of terminal passengers for each airport.

        We believe that in many developed countries, annual commercial aviation passenger traffic volumes can be significantly higher than the total population. For example, the United States, which had a population of approximately 295 million in 2005, recorded approximately 746 million commercial aviation passengers during that year. In Mexico, however, air transportation historically has been affordable only to the higher-income segments of the population, resulting in a comparatively low level of air travel. In 2005, Mexico's population was approximately 103 million and Mexican airports recorded approximately 70 million commercial aviation passengers.

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        We believe that the recent entry of low-cost carriers into the Mexican commercial airline market has the potential to increase significantly passenger traffic in Mexico. The Mexican government recently awarded domestic airline licenses to several new low-cost and other carriers, including Interjet, Avolar, Volaris and Click Mexicana, the discount carrier subsidiary of the Mexicana Group. These carriers recently announced a total of 16 new routes serving our airports. We are in discussions with these and other carriers to add further routes at our airports. In addition, the low-cost carrier Viva Aerobus has recently announced that it intends to locate its corporate and operational headquarters and maintenance facilities at our Monterrey International Airport. It has also announced that it expects to begin operating nine routes in December 2006 and to be operating a total of 24 routes serving 12 of our airports by April 2007. Thirteen of these routes are expected to be to destinations not previously served by our Monterrey International 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 principal executive headquarters are located at Carretera Miguel Alemán, Aeropuerto Internacional de Monterrey, Zona de Carga, Apodaca, Nuevo León, C.P. 66600. Our telephone number is +(52) (81) 8625 4300.

Investment by Servicios de Tecnologia 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:

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        SETA's current stockholders are:

        Aeroinvest has transferred the Series B shares it owns representing 35.3% of our capital stock to a guaranty trust for the benefit of Halkin Finance Plc, an affiliate of Merrill Lynch & Co., to secure Aeroinvest's obligations under a U.S. $125 million loan used to finance the acquisition of these Series B shares and certain other indebtedness. In addition, Aeroinvest 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, under which, if certain conditions to be agreed by the parties are met, on or after December 2010 Aeroinvest will be required (i) to sell the Series B shares it owns representing 35.3% of our capital stock or (ii) to deposit such Series B shares in a voting trust. The shares in this voting trust would be required to be voted in the same manner as the majority of all shares of our capital stock are voted in each shareholders' meeting, except that Aeroinvest would be entitled to vote the deposited shares with respect to specified rights afforded to minority shareholders under Mexican law, including the right to vote for directors. The terms of this obligation are described more fully under "Principal Stockholders and Selling Stockholder—Arrangements relating to Aeroinvest."

        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 2005 amounted to approximately Ps. 37 million (U.S. $3 million). This agreement is more fully described in "Related Party Transactions."

        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). In addition, any matter requiring board approval under our bylaws will require the approval of a majority of the directors appointed by our Series BB shareholders. See "Description of

9



Capital Stock—Authority of the Board of Directors—Powers of Series BB Directors." 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 and the participation agreement, 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 "Management—Committees," "Description of Capital Stock" and "Principal Stockholders and Selling Stockholder."

        A Mexican trust established by NAFIN currently holds 48.0% of our outstanding capital stock. NAFIN is acting as trustee of this trust pursuant to the instructions of the Ministry of Communications and Transportation. This trust is the selling stockholder in this global offering. The net proceeds from the sale of shares held by the selling stockholder are payable to the Mexican government.

Principal Terms of Our Concessions

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 strategy, our traffic forecasts, and our expansion, modernization and maintenance plans for the following 15 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.

Revenue Regulation

        The 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 and principally consist of a fee for each departing passenger (excluding transit and transfer passengers), aircraft landing fees, 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. In 2005, approximately 80.6% of our total revenues were earned from aeronautical services, which are subject to regulation under our maximum rates. 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

10



complementary services and leasing of space to airlines, for each of our airports, every six months (or more frequently if accumulated inflation in Mexico since the last adjustment exceeds 5%), as long as the combined revenue from regulated services at an airport does not exceed the maximum rate per workload unit at that airport on an annual basis. Since our aggregate revenues resulting from regulated services are not otherwise restricted, increases in passenger and cargo traffic increase the workload units used to determine our maximum rates and therefore permit greater revenues overall within each five-year period for which maximum rates are established.

        Each airport's maximum rate is 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.

        In December 2005, the Ministry of Communications and Transportation determined the maximum rates for our airports for the 2006 to 2010 period. For further information on the maximum rates applicable to our airports, see "Regulatory Framework—Revenue Regulation" and "Risk Factors—Risks Related to Our Operations."

        Our revenues from non-aeronautical services, including revenues that we earn from most commercial activities in our terminals, are not subject to this price regulation system, which we refer to as a "dual-till" system, and are therefore not subject to a ceiling.

Summary of Third Quarter Results

        Our 13 airports served approximately 2.9 million terminal passengers during the three months ended September 30, 2006, a 7.4% increase over the three months ended September 30, 2005. Of our total terminal passengers during the three months ended September 30, 2006, 2.4 million were domestic passengers and 0.5 million were international passengers. Domestic and international passenger traffic for the three months ended September 30, 2006 was 10.9% higher and 6.1% lower, respectively, compared to the three months ended September 30, 2005.

        Our revenues increased 15.2% to Ps. 405.6 million for the three months ended September 30, 2006, as compared to Ps. 351.9 million for the three months ended September 30, 2005, reflecting increases in both aeronautical revenues and non-aeronautical revenues. Increases in aeronautical revenues were primarily due to increases in passengers paying passenger charges and air traffic movements. Increases in non-aeronautical revenues were primarily due to increases in revenue from car parking charges and, to a lesser extent, across-the-board increases in other non-aeronautical revenue.

        Our operating income increased 33.7% to Ps. 156.0 million for the three months ended September 30, 2006, as compared to Ps. 116.7 million for the three months ended September 30, 2005, principally reflecting the increase in revenues which offset a proportionately smaller increase in operating costs. Operating costs increased mainly as a result of increases in technical assistance fees, concession taxes and depreciation and amortization, which more than offset a decline in costs of services and general and administrative expenses.

        Our net income increased 3.6% to Ps. 112.6 million for the three months ended September 30, 2006, as compared to Ps. 108.7 million for the three months ended September 30, 2005, principally as a result of the increase in operating income discussed above coupled with a change from net comprehensive financing income in the 2005 period to net comprehensive financing expense in the 2006 period.

        At September 30, 2006, our cash and cash equivalents were Ps. 1,805 million. We did not have any debt at September 30, 2006.

11



THE GLOBAL OFFERING


Global Offering

 

The selling stockholder is offering 83,513,040 Series B shares in the form of ADSs and Series B shares in the United States and elsewhere outside of Mexico and 83,513,046 Series B shares in Mexico. Each ADS represents eight Series B shares.

Over-allotment

 

The international underwriter has an option from the selling stockholder to purchase up to 12,526,952 additional Series B shares in the form of ADSs or Series B shares to cover over-allotments. The Mexican underwriter has an option to purchase up to 12,526,962 additional Series B shares to cover over-allotments.

Selling Stockholder

 

The Series B shares are being offered by the selling stockholder, which, prior to this global offering, held 192,080,000 Series B shares, representing 56.6% of the Series B shares and 48.0% of our outstanding capital stock. The selling stockholder is a trust established by the Ministry of Communications and Transportation with NAFIN, a Mexican development bank owned and controlled by the Mexican government. NAFIN is trustee of the selling stockholder. If all of the Series B shares offered by the selling stockholder are sold (and the over-allotment option is exercised in full), the Mexican government will cease to have any ownership interest in us.

Initial Offering Price

 

In the international offering, the initial offering price for each ADS is U.S. $18.00. The initial offering price for each Series B share is U.S. $2.25, reflecting the ratio of eight Series B shares per ADS. In the Mexican offering, the initial offering price for each Series B share is Ps.24.85, which is the approximate peso equivalent of the international offering price per Series B share of U.S. $2.25, based on an exchange rate of Ps.11.0454 per U.S. $1.00.

Listings and Registration

 

The ADSs have been approved for listing on The NASDAQ Global Market under the symbol "OMAB" and the Series B shares have been approved for listing on the Mexican Stock Exchange (
Bolsa Mexicana de Valores, S.A. de C.V.) under the symbol "OMA."
     

12



 

 

We have also applied to register the Series B shares in the Mexican National Securities Registry maintained by the Mexican National Banking and Securities Commission and in the Special Section currently maintained by the Mexican National Securities Registry. Prior to this global offering, there has been no trading market for the Series B shares in Mexico, in the United States or elsewhere.

Lock-up Provision

 

We, the selling stockholder, SETA and Aeroinvest have agreed not to issue or sell any Series B shares or ADSs for 180 days from the date of this prospectus. For more information regarding these lock-up provisions, see "Underwriting" and "Principal Stockholders and Selling Stockholder."

Use of Proceeds

 

We will not receive any proceeds from this global offering. The net proceeds from the sale of ADSs and Series B shares sold in this global offering are payable to the selling stockholder.

Capital Stock

 

341,200,000 Series B shares and 58,800,000 Series BB shares of our common stock will be outstanding after this global offering. Since all of the Series B shares to be sold in the global offering are being sold by the selling stockholder, the number of Series B shares and Series BB shares outstanding will not change as a result of this global offering.

Voting Rights

 

Each Series B share will entitle the holder to one vote at any shareholders' meeting, including voting at meetings to elect members of our board of directors. ADS holders may instruct the depositary how to exercise the voting rights of the shares represented by the ADSs. The depositary has agreed that, if we so request, it will mail notices of shareholders' meetings that it receives from us to holders of ADSs and explain the procedures necessary to exercise voting rights. We will use our best efforts to request that the depositary notify you of upcoming votes and ask for your instructions. For a more complete discussion of the depositary's role and your voting rights, see "Description of American Depositary Shares."
     

13



Special Rights of Series BB Stockholder

 

The Series BB shares held by SETA provide it with certain rights under our bylaws, which are in addition to the rights of holders of Series B shares. 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). In addition, any matter requiring board approval under our bylaws will require the approval of a majority of the directors appointed by our Series BB shareholders. See "Description of Capital Stock—Authority of the Board of Directors—Powers of Series BB Directors." 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 and the participation agreement, 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 described in "Management—Committees," "Description of Capital Stock" and "Principal Stockholders and Selling Stockholder."
     

14



Dividends

 

Our shareholders recently adopted a new dividend policy. Under the policy our annual dividend has a fixed and a variable component. The fixed component will be Ps. 325 million per year. The variable component will be based on the funds available for distribution in excess of the fixed component. The determination of the variable portion of our dividend will be made based on the amount of cash and liquid investments we hold (as reflected in our balance sheet as of the month-end immediately prior to the dividend payment) that is in excess of our "minimum cash balance." For the purposes of our dividend policy, "minimum cash balance" is the minimum amount of cash and liquid investments, as determined by our board of directors, necessary to cover our projected investments for the subsequent twelve months and our expected operating expenses for the subsequent six months. We expect to pay dividends in cash and in one or more payments, as determined by the shareholders' meeting in which dividends are determined and declared.

 

 

As of June 30, 2006, we had accumulated approximately Ps. 13.5 million of distributable earnings that have been subject to the corporate income tax and that could be declared and paid to shareholders free of the corporate level dividend tax. Because we expect any dividend we pay to be subject to the corporate level dividend tax referred to above, we intend to limit the amount of dividends we pay so as to avoid generating a tax liability that cannot be credited against our expected income tax liability in the subsequent two years (which is the period during which Mexican law allows us to credit the corporate level dividend tax against our income tax liability).

 

 

Under our dividend policy, the declaration, amount and payment of dividends pursuant to the policy described above (including the fixed portion) are subject to (i) compliance with applicable law regarding the declaration and payment of dividends with respect to any year including the establishment of the statutory legal reserve fund, (ii) the absence of any adverse effect on our business plan for the current or subsequent fiscal year as a result of the payment of any dividend, and (iii) the absence of any adverse tax consequence to us from the payment of any dividend, based on the tax considerations described above and any other applicable taxes. This policy is based on current Mexican tax law and our projections of our future earnings and corporate income tax liability. Changes in Mexican tax law and our actual results of operations could cause our policy to change or otherwise change the amount of dividends paid in any given year.
     

15



 

 

On September 22, 2006, prior to the effectiveness of our new dividend policy, we paid an aggregate dividend of Ps. 423.9 million. We did not pay any dividends prior to September 22, 2006.

 

 

The declaration, amount and payment of dividends, if any, are subject to the approval of either (x) holders of a majority of our capital stock present at a shareholders' meeting and, so long as the Series BB shares represent at least 7.65% of our outstanding capital stock, the approval of SETA (as the holder of our Series BB shares) or (y) holders of 95% of our capital stock. Any such approval by SETA requires the approval of its shareholders Aeroinvest and Aéroports de Paris Management. We cannot assure you that we will continue to pay dividends.

 

 

To the extent that we declare and pay dividends or make any other distribution in respect of our outstanding Series B shares, the ADS holders on the relevant date will be entitled to receive dividends or distributions payable in respect of the Series B shares underlying their ADSs. The delivery of dividends or distributions to ADS holders will be subject to the terms of our deposit agreement with the depositary. Cash dividends generally will be paid to the depositary in pesos, except as otherwise provided in this prospectus. Under current applicable Mexican law, any dividend we pay to non-Mexican holders of our Series B shares and ADSs, including the depositary, will not be subject to a dividend withholding tax. For more information regarding our dividend policy and withholding taxes, see "Dividend Policy," "Description of Capital Stock" and "Taxation."

16



SUMMARY CONSOLIDATED FINANCIAL INFORMATION

        The following tables present our summary consolidated financial information 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, as well as "Management's Discussion and Analysis of Financial Condition and Results of Operations" included elsewhere in this prospectus. Our financial statements are prepared in accordance with Mexican GAAP, which differs in certain significant respects from U.S. GAAP. Note 19 to our audited financial statements for the years ended December 31, 2005, 2004 and 2003 and Note 18 to our unaudited financial statements for the six-month periods ended June 30, 2006 and 2005 provide 1) a summary of the principal differences between Mexican GAAP and U.S. GAAP as they relate to our business; 2) a reconciliation to U.S. GAAP of net income and stockholders' equity; and 3) condensed financial statements under U.S. GAAP and additional U.S. GAAP disclosure information.

        The unaudited interim consolidated financial information has been prepared on the same basis as our audited consolidated financial statements and, in our opinion, includes all adjustments that we consider necessary to fairly present our results of operations and financial condition for and as of the end of these periods. Our results for the six-month period ended June 30, 2006 are not necessarily indicative of our results to be expected for the year ended December 31, 2006 and should not be construed as such.

        Mexican GAAP 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, restating the components of stockholders' equity using the Mexican National Consumer Price Index and recording gains or losses in purchasing power from holding monetary liabilities or assets. Mexican GAAP also requires the restatement of all financial statements to constant Mexican pesos as of the date of the most recent balance sheet presented. Our audited year-end and unaudited interim financial statements and all other financial information contained herein are accordingly presented in constant pesos with purchasing power as of June 30, 2006, unless otherwise noted.

17


 
  Year ended December 31,
  Six months ended June 30,
 
  2001
  2002
  2003
  2004
  2005
  2005
  2005
  2006
  2006
 
  (thousands of pesos, except per share amounts)

  (thousands of pesos, except per share amounts)

  (thousands of
dollars)(1)

 
   
   
   
   
   
  (thousands of
dollars)(1)

Statement of income data:                                        
Mexican GAAP:                                        
Revenues:                                        
  Aeronautical services(2)   Ps.1,005,808   Ps.914,215   Ps.937,938   Ps.1,010,305   Ps.1,111,493   U.S.$ 98,480   Ps.552,028   Ps.621,833   U.S.$ 55,095
  Non-aeronautical services(3)   134,261   146,071   184,818   233,737   268,146     23,758   137,438   149,703     13,264
    Total revenues   1,140,069   1,060,286   1,122,756   1,244,042   1,379,639     122,238   689,466   771,536     68,359
Operating costs:                                        
  Cost of services   316,619   306,905   318,027   334,268   362,686     32,134   172,290   186,988     16,567
  General and administrative expenses   288,429   225,180   238,248   225,669   228,132     20,213   100,488   109,313     9,686
  Technical assistance fees(4)   57,406   63,175   36,855   37,491   37,305     3,306   17,107   16,347     1,448
  Concession taxes(5)   59,001   56,064   55,123   60,487   67,722     6,000   33,466   38,905     3,447
Depreciation and amortization:                                        
  Depreciation(6)   53,402   61,366   170,814   184,659   194,930     17,271   96,420   103,374     9,159
  Amortization(7)   108,653   108,398   16,568   16,568   17,445     1,546   8,362   14,153     1,254
    Total depreciation and amortization   162,055   169,764   187,382   201,227   212,375     18,817   104,782   117,527     10,413
      Total operating costs   883,510   821,088   835,635   859,142   908,220     80,469   428,133   469,080     41,561
Income from operations   256,559   239,198   287,121   384,900   471,419     41,769   261,333   302,456     26,798
  Net comprehensive financing income (expense)   (9,643 ) 17,564   24,154   (14,304 ) 27,607     2,446   17,807   78,572     6,962
  Other income (expense)   4,026   8,974   2,601   4,295   5,013     444   (1,472 ) 9,732     862
Income before income taxes and statutory employee profit sharing   250,942   265,736   313,876   374,891   504,039     44,659   277,668   390,760     34,622
  Income tax and statutory employee profit sharing expense   127,096   131,383   135,618   87,501   148,746     13,180   89,240   136,244     12,072
Consolidated net income   123,846   134,353   178,258   287,390   355,293     31,479   188,428   254,516     22,550
Basic and diluted earnings per share(8)   Ps.0.3159   Ps.0.3427   Ps.0.4547   Ps.0.7331   Ps.0.9064   U.S.$ 0.0803   Ps.0.4807   Ps.0.6493   U.S.$ 0.0575
Pro forma basic and diluted earnings per share(9)                   Ps.0.8811   U.S.$ 0.0781       Ps.0.6312   U.S.$ 0.0559
Basic and diluted earnings per ADS(8)   Ps.2.5275   Ps.2.7419   Ps.3.6379   Ps.5.8651   Ps.7.2509   U.S.$ 0.6424   Ps.3.8455   Ps.5.1942   U.S.$ 0.4602

U.S. GAAP:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Revenues               Ps.1,244,042   Ps.1,379,639   U.S.$ 122,238   Ps.689,466   Ps.771,536   U.S.$ 68,541
Income from operations               453,429   559,592     49,581   308,002   301,887     26,748
Consolidated net income               171,637   415,615     36,824   220,134   273,280     24,213
Basic earnings per share(8)               Ps.0.4412   Ps.1.0683   U.S.$ 0.0947   Ps.0.5658   Ps.0.7024   U.S.$ 0.0622
Diluted earnings per share(10)               Ps.0.4378   Ps.1.0602   U.S.$ 0.0939   Ps.0.5616   Ps.0.6951   U.S.$ 0.0616
Pro forma basic earnings per share(9)                   Ps.1.0383   U.S.$ 0.0920       Ps.0.6827   U.S.$ 0.0605
Pro forma diluted earnings per share(9)                   Ps.1.0307   U.S.$ 0.0913       Ps.0.6777   U.S.$ 0.0600
Basic earnings per ADS(8)               Ps.3.5293   Ps.8.5460   U.S.$ 0.7572   Ps.4.5265   Ps.5.6193   U.S.$ 0.4979
Diluted earnings per ADS(10)               Ps.3.5028   Ps.8.4814   U.S.$ 0.7515   Ps.4.4925   Ps.5.5610   U.S.$ 0.4927
Other operating data:                                        
  Total terminal passengers (thousands of passengers)(11)   9,052   8,553   8,853   9,739   10,599     10,599   5,216   5,779     5,779
  Total air traffic movements (thousands of movements)   354   340   333   346   362     362   181   190     190
  Total revenues per terminal passenger(12)   126   124   127   128   130     130   132   134     134

Other data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
EBITDA:                                        
Consolidated net income under Mexican GAAP   Ps.123,846   Ps. 134,353   Ps.178,258   Ps. 287,390   Ps.355,293   U.S.$ 31,479   Ps.188,428   Ps.254,516   U.S.$ 22,550
Minus:                                        
  Net comprehensive financing income (expense)   (9,643 ) 17,564   24,154   (14,304 ) 27,607     2,446   17,807   78,572     6,962
Plus:                                        
  Income tax and statutory employee profit sharing expense   127,096   131,383   135,618   87,501   148,746     13,180   89,240   136,244     12,072
  Depreciation and amortization   162,055   169,764   187,382   201,227   212,375     18,817   104,782   117,527     10,413
   
 
 
 
 
 
 
 
 
EBITDA(13)   Ps.422,640   Ps.417,936   Ps.477,104   Ps.590,422   Ps.688,807   U.S.$ 61,030   Ps. 364,643   Ps.429,715   U.S.$ 38,073

18


 
  Year ended December 31,
  Six months ended June 30,
 
 
  2001
  2002
  2003
  2004
  2005
  2005
  2005
  2006
  2006
 
 
  (thousands of pesos)

  (thousands of
dollars)(1)

  (thousands of pesos)

  (thousands of
dollars)(1)

 
Balance sheet data:                                          
  Mexican GAAP:                                          
    Cash and cash equivalents   Ps.423,713   Ps.775,596   Ps.901,189   Ps.1,210,747   Ps.1,591,008   U.S.$ 140,966   Ps.1,483,171   Ps.1,983,241   U.S.$ 175,718  
    Total current assets   656,352   1,091,802   1,154,099   1,437,258   1,873,163     165,965   1,733,816   2,257,833     200,047  
    Airport concessions—net       762,138   745,571   729,004     64,591   737,288   720,719     63,857  
    Rights to use airport facilities—net   5,203,081   5,094,682   4,198,611   4,081,372   3,964,060     351,221   4,022,723   3,905,276     346,013  
    Total assets   6,577,802   6,929,174   7,166,893   7,508,704   8,009,628     709,664   7,767,329   8,409,164     745,064  
    Current liabilities   157,612   141,986   121,308   142,252   144,807     12,830   135,615   214,244     18,982  
    Total liabilities   217,556   434,576   494,037   548,458   694,089     61,497   618,665   839,109     74,347  
    Total stockholders' equity(14)   6,360,246   6,494,598   6,672,856   6,960,246   7,315,539     648,167   7,148,674   7,570,055     670,717  
  U.S. GAAP:                                          
    Cash and cash equivalents               1,210,747   1,591,008     140,966   1,483,171   1,983,241     175,718  
    Total current assets               1,455,905   1,873,163     165,965   1,753,612   2,265,632     200,738  
    Assets under concession ("Rights to use airport facilities" under Mexican GAAP)               930,057   892,599     79,085   911,428   874,042     77,441  
    Total assets               4,410,762   4,866,905     431,657   4,633,091   5,224,573     462,905  
    Current liabilities               143,969   172,347     15,270   138,277   220,805     19,564  
    Total liabilities               190,819   224,479     19,889   189,767   278,793     24,701  
    Total stockholders' equity(14)               4,219,943   4,642,426     411,768   4,443,324   4,945,780     438,203  

Other data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
  Mexican GAAP:                                          
    Net resources generated by operating activities   Ps.400,488   Ps.547,603   Ps.488,386   Ps.569,602   Ps.653,896   U.S.$ 57,936   Ps.339,273   Ps.524,626   U.S.$ 46,482  
    Net resources used in investing activities   (179,005 ) (195,722 ) (362,792 ) (260,044 ) (273,635 )   (24,244 ) (66,849 ) (132,393 )   (11,730 )
    Increase in cash and cash equivalents   221,483   351,881   125,594   309,558   380,261     33,692   272,424   392,233     34,752  
  U.S. GAAP:(15)                                          
    Net cash generated by operating activities               565,161   645,817     57,220   339,038   521,032     46,164  
    Net cash used in investing activities               (259,934 ) (266,706 )   (23,630 ) (66,839 ) (129,432 )   (11,468 )
    Effect of inflation accounting               4,331   1,150     102   225   633     56  
    Increase in cash and cash equivalents               309,558   380,261     33,692   272,424   392,233     34,752  

(1)
Translated into dollars at the rate of Ps. 11.2865 per U.S. dollar, the Federal Reserve Bank of New York noon buying rate for Mexican pesos at June 30, 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 "Business—Opening of Mexican Airports to Investment—Investment by SETA."

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(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 GAAP purposes, based on 392,000,000 weighted average common shares outstanding in each period. For U.S. GAAP purposes, based on 389,060,000 weighted average common shares outstanding in each period. Earnings per ADS is based on the ratio of eight 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. $1.3527 (Ps. 14.6735) 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, the 8,000,000 newly issued Series B shares are included in basic earnings per share.

(10)
Based on 392,022,615 weighted average common shares and common share equivalents outstanding for the year ended December 31, 2005, 393,135,368 weighted average common shares and common share equivalents outstanding for the six-month period ended June 30, 2006, and 392,000,000 weighted average common shares and common share equivalents outstanding for the year ended December 31, 2004 and for the six-month period ended June 30, 2005. Earnings per ADS is based on the ratio of eight 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, you should bear in mind that EBITDA is not defined and is not a recognized financial measure under Mexican GAAP 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 GAAP 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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RISK FACTORS

        You should consider carefully the following risk factors, as well as all the other information presented in this prospectus, before buying our Series B shares or ADSs. Any of the following risks, if they actually occur, could materially and adversely affect our business, results of operations, prospects and financial condition. In that event, the market price of our Series B shares and ADSs could decline, and you could lose all or part of your investment.

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, like most airports in other countries, regulated. In 2003, 2004, 2005 and the first six months of 2006, approximately 83.5%, 81.2%, 80.6% and 80.6%, respectively, of our total revenues were earned from aeronautical 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 and 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 our 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 you 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. Additionally, we cannot predict how the incoming Mexican government administration taking office in December 2006 will interpret and apply such laws and regulations.

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,

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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 our master 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.

The terms of our concessions may not be extended beyond 2048.

        The terms of our concessions are scheduled to expire in 2048. Although Mexican law allows for the possible extension of the terms of our concessions, any such extension would require the consent of the Ministry of Communications and Transportation, as to which there can be no assurance.

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 our authorized maximum rate for that airport in any given year. For example, in 2005, our revenues subject to maximum rate regulation represented approximately 95% of the amount we were entitled to earn under the maximum rates for all of our airports. In the first six months of 2006, our revenues subject to maximum rate regulation represented approximately 92% 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 our 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 are unable to continue our operations without them. A concession may be terminated 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 termination of a concession only if sanctions

22



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.

        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 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 León 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, based on a recent government analysis, that Aeropuerto del Norte as currently configured is not capable of accommodating commercial traffic. 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 you that we would participate in such process, or that we would be successful if we did participate.

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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 economic conditions in Mexico and the U.S., 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 attack. 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. In addition, our insurance policies do not cover all losses and liabilities resulting from terrorism. Any future terrorist 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 U.S., we may be required to comply with security directives of the U.S. Transportation Security Administration, 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, 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 2003, 2004, 2005 and the first six months of 2006, passenger charges represented 57.2%, 56.0%, 56.6% and 58.0%, 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.

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Increases in international petroleum prices could reduce demand for air travel.

        International prices of fuel, which represents 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 ticket prices and may decrease demand for air travel generally, 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 our 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 our commercial revenue is, among other factors, significantly dependent upon increasing passenger traffic at our airports. We cannot assure you that we will be successful in implementing our strategy of increasing our passenger traffic or our 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 Cancun, 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 is 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.

Our business is highly dependent upon revenues from four of our airports and could be adversely impacted by any condition affecting those airports.

        In 2005 and the first six months of 2006, approximately 67.0% and 68.1%, respectively, of our revenues were generated from four of our 13 airports. In particular, our Monterrey International Airport is our most important airport. The following table lists the percentage of total revenues generated at our airports for the periods indicated:

Airport

  For year ended
December 31, 2005

  For six months ended
June 30, 2006

 
Monterrey International Airport   43.4 % 43.1 %
Acapulco International Airport   8.6   10.1  
Mazatlán International Airport   8.2   8.4  
Culiacán International Airport   6.9   6.5  
  Nine other airports   32.9   31.9  
   
 
 
    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 our principal airports, particularly Monterrey, 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 currently believe we 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 60% of our total employees at December 31, 2005 and 59% of our employees at June 30, 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.

The loss 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 2005, Aeroméxico and its affiliates accounted for 25.2%, Mexicana and its affiliates accounted for 10.4% and Aviacsa and its affiliates represented 10.1%. 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. 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, Consorcio Aeroméxico 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 Lineas Aereas Aerocalifornia, S.A. de C.V., which accounted for approximately 6.0% 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, 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 2001 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. In December 2002, the amount of invoiced fees subject to dispute was Ps. 3.7 million.

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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 (Camara Nacional de Aerotransportes) 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, as these airlines previously had refused to pay certain increases in our charges. 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, when 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.

        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.

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 are also dependent 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.

        In addition, we are dependent 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, 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. 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 our 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

27



ordered us to return the disputed land to the plaintiffs. An appellate court recently vacated the May 18 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. The plaintiffs are permitted, however, to bring a new claim and, in the event that any subsequent action results in a decision substantially similar to the May 18 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 Airport would terminate. In 2005 and the first six months of 2006, our Ciudad Juárez International Airport represented 5.2% and 4.9%, respectively, 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 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 expect the municipality of Chihuahua to assert an amended claim. The total amount of the property tax claims outstanding in each of Reynosa, Tampico and Zihuatanejo are Ps. 0.3 million, Ps. 0.5 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, similar claims may be asserted by other municipalities where we operate our airports. For additional information on these proceedings, see "Business—Legal Proceedings—Property tax claims by certain municipalities."

        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 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 GAAP.

        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.

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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 that affected our airport was Hurricane Emily in July 2005, which resulted in the cancellation of several flights to and from our Monterrey International Airport and minor damage to our Reynosa and Tampico International Airports. In addition, our 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 our airports. Any of these events could reduce our passenger 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 our Mazatlán and Zihuatanejo International Airports, have only one commercial aviation runway. While we seek to keep our runways in good working order and to conduct scheduled maintenance during off-peak hours, we cannot assure you 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 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.

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 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 we may have to provide directly, which could adversely affect our results of operations.

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We are exposed to risks inherent to the operation of airports.

        We are obligated to protect the public at our airports and to reduce the risk of accidents at our airports. As with any company dealing with members of the public, we must implement certain measures for the protection of the public, such as fire safety in public spaces, design and maintenance of car parking facilities and access routes to meet road safety rules. We are also obligated to take certain measures related to aviation activities, such as maintenance, management and supervision of aviation facilities, rescue and fire-fighting services for aircraft, measurement of runway friction coefficients, flood control at our Acapulco International Airport and measures to control the threat from birds and other wildlife on airport sites. These obligations 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 our 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.

        Several of our airports, such as our 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.

        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 law, 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

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equipment and implement other security measures to facilitate our airline customers' compliance with the new baggage screening guidelines. Until the new screening equipment becomes operational, checked baggage will continue to be screened by hand in order to comply with the new screening guidelines. 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.

        We are currently responsible for inspecting passengers and their carry-on luggage before they board aircrafts. This obligation could increase our exposure to liability to third parties for personal injury or property damage resulting from the performance of such inspection.

Risks Related to Our Stockholders

Following the offering, Aeroinvest and SETA will continue to control our management, and their interests may differ from those of other stockholders.

        Regardless of the number of Series B shares sold in the global offering, upon completion of the offering SETA still will hold Series BB shares currently representing 14.7% of our outstanding capital stock and Series B shares currently representing 2% of our capital stock and SETA's principal shareholder, Aeroinvest, will hold Series B shares representing an additional 35.3% of our outstanding 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). In addition, any matter requiring board approval under our bylaws will require the approval of a majority of the directors appointed by our Series BB shareholders. See "Description of Capital Stock—Authority of the Board of Directors—Powers of Series BB Directors." 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 and the participation agreement, 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 "Management—Committees," "Description of Capital Stock" and "Principal Stockholders and Selling Stockholder."

        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

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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 35.3% 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 subsequent to this offering, 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 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, Aeroinvest acquired Series B shares representing 35.3% of our currently outstanding capital stock, which it transferred to a guaranty trust to secure its obligations to WestLB AG under a U.S. $125 million loan used to finance that acquisition. In addition, Aeroinvest entered into a separate loan agreement with WestLB AG for U.S. $15 million, which was recently amended and restated to, among other things, increase the amount of the facility by U.S. $40 million, for a total of U.S. $55 million. We refer to the U.S. $125 million and U.S. $55 million loans together as the Aeroinvest Loans. On October 25, 2006, WestLB AG sold and assigned its rights under the Aeroinvest Loans to Halkin Finance Plc, an affiliate of Merrill Lynch & Co. If Aeroinvest were to default on its obligations under the loan agreement, Halkin Finance Plc would be entitled to foreclose on the Series B shares owned by Aeroinvest. Aeroinvest also has entered into an agreement with NAFIN pursuant to which Aeroinvest will be obligated on or after December 2010, if certain conditions to be agreed by the parties are met, either to sell the Series B shares it directly owns or deposit them in a voting trust. The terms of this obligation are described more fully under "Principal Stockholders and Selling Stockholder—Arrangements relating to Aeroinvest." If Aeroinvest were to sell 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. Any such foreclosure, deposit of shares in trust or sale would not affect the Series BB shares owned by SETA.

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The terms of Aeroinvest's financing arrangements impose significant financial restrictions on us, which may restrict our flexibility and prevent us from capitalizing on business opportunities.

        Under terms of the Aeroinvest Loans, Aeroinvest and its subsidiaries, including us, are obligated to comply with certain covenants. These covenants impose significant operating and financial restrictions on us that limit our ability, among other things, to:

        Aeroinvest is currently negotiating with creditors to refinance the Aeroinvest Loans, which are scheduled to mature in May 2007. The terms of any such refinancing could impose similar or more onerous operating and financial restrictions on us.

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 GAAP, which differs from U.S. GAAP in a number of respects. For example, we must incorporate the effects of inflation directly in our 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 consolidated financial statements, the effects of inflation accounting under Mexican GAAP are not eliminated in such reconciliation in our annual consolidated financial statements. For this and other reasons, the presentation of Mexican GAAP 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 audited year-end financial statements and Note 18 to our unaudited interim financial statements for the six-month periods ended June 30, 2006 and 2005.

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. 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.

        Mexico's GDP grew by 1.4% in 2003, 4.4% in 2004 and 3.0% in 2005. The annual rate of inflation, as measured by changes in the Mexican National Consumer Price Index, or the NCPI, was 4.0% for 2003, 5.2% for 2004 and 3.3% for 2005. Average interest rates on 28-day Mexican government treasury securities were 6.3% in 2003, 6.8% in 2004 and 9.2% in 2005. For the first six months of 2006, inflation in Mexico was 0.7%, interest rates on 28-day Mexican government treasury securities averaged 7.0% and the peso depreciated by 6.0% (in nominal terms) against the U.S. dollar.

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        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 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, 2005 and June 30, 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.

Devaluation or depreciation of the peso against the U.S. dollar may adversely affect the dollar value of an investment in the ADSs and the Series B shares, as well as the dollar value of any dividend or other distributions that we may make.

        Fluctuations in the exchange rate between the peso and the U.S. dollar, particularly depreciations, may adversely affect the U.S. dollar equivalent of the peso price of the Series B shares on the Mexican Stock Exchange. As a result, such peso depreciations will likely affect our revenues and earnings in U.S.- dollar terms and the market price of the ADSs. Exchange rate fluctuations would also affect the depositary's ability to convert into U.S. dollars and make timely payment of any peso cash dividends and other distributions paid in respect of the Series B shares.

Political conditions in Mexico could materially and adversely affect Mexican economic policy and, in turn, our operations.

        Federal elections were held in Mexico on July 2, 2006. Based on preliminary election results, the Federal Electoral Institute announced on July 6, 2006 that Felipe de Jesús Calderón Hinojosa of the center-right Partido Accion Nacional, or PAN, obtained a plurality of the vote, with a narrow margin over Andrés Manuel López Obrador of the center-left Partido de la Revolución Democrática, or PRD. Citing electoral fraud, Mr. López Obrador initiated legal challenges to the preliminary election results and commenced protests in Mexico City. On September 5, 2006, the Electoral Court (Tribunal Electoral del Poder Judicial de la Federación) determined in a non-appealable ruling that Mr. Calderón won the election and formally declared him to be president-elect. To date, Mr. López Obrador has refused to concede the election. In addition, Mr. López Obrador has announced that he will continue to lead demonstrations protesting the electoral process and the legitimacy of Mr. Calderón's electoral victory. We cannot predict the impact that these protests may have on the Mexican government or on economic and business conditions in Mexico.

        Although the PAN won a plurality of the seats in the Mexican Congress after the election, no party succeeded in securing a majority in either chamber of the Mexican Congress. The absence of a clear

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majority by a single party and the lack of alignment between the president-elect and the legislature is likely to continue at least until the next Congressional election in 2009. This situation, combined with the expected continued protests led by Mr. López Obrador, members of the PRD and their supporters, may result in government gridlock and political uncertainty, which could have an adverse effect on our business, financial position and results of operations. We cannot provide any assurance that future political developments in Mexico, over which we have no control, will not have an adverse effect on our financial position or results of operations.

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 us. 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.

        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 2005, 10.8% and 12.6% of the terminal passengers served by our airports arrived and departed, respectively, on international flights. In the first six months of 2006, 11.2% and 13.6% of the terminal passengers served by our airports arrived and departed, respectively, on international flights. 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 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.

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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.

Risks Related to the Global Offering and our Securities

A public market for our Series B shares and our ADSs may not develop.

        Prior to this global offering, there has been no public market for the ADSs or the Series B shares. The ADSs have been approved for listing on The NASDAQ Global Market under the symbol "OMAB" and to list the Series B shares on the Mexican Stock Exchange under the symbol "OMA." We cannot predict the extent to which investors will choose to take delivery of their Series B shares in the form of ADSs or Series B shares, or the extent to which investor interest in our ADSs and Series B shares will lead to the development of a trading market in Mexico, the United States or elsewhere. We also cannot predict the liquidity of any such market, should any such market develop. If the trading volume of our Series B shares or ADSs in any such market were to be below certain levels, our shares or ADSs may be delisted or deregistered in such market, further reducing liquidity of our shares.

        ADSs and Series B shares may trade at market prices below the initial public offering price. The initial public offering price for the ADSs and the Series B shares has been determined by negotiations among NAFIN, acting as the selling stockholder pursuant to the instructions of the Ministry of Communications and Transportation, and representatives of the underwriters, and may not be indicative of prices that will prevail in the trading market, should such market develop, following the completion of this offering.

Future sales of shares by the selling stockholder, Aeroinvest and SETA may depress the price of our Series B shares and ADSs.

        We have 341,200,000 Series B shares outstanding. After this offering, the Series B shares sold in this offering will be freely tradable, without restriction, under the Securities Act of 1933, as amended (the "Securities Act"), except for any shares purchased by our "affiliates," as defined in the Securities Act. Sales of substantial amounts of any remaining Series B shares may depress our stock price and, as a result, the price of our ADSs, and we cannot assure you that our stock price would recover from any such loss in value. The eligibility of these restricted shares to be sold in the future is described in the table below:

Number of
Series B shares
available for sale

  Date of availability for sale of restricted Series B shares

0   At the date of this prospectus.

174,173,914

 

180 days after the date of this prospectus or afterwards.

        The above table assumes the effectiveness of certain lock-up arrangements with the underwriters under which we, the selling stockholder, Aeroinvest and SETA have agreed not to issue, sell or

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otherwise dispose of shares. We cannot assure you that these lock-up arrangements will not be terminated prior to 180 days after the global offering without prior notice to you by the underwriters.

        In addition, Aeroinvest has transferred the Series B shares it owns representing 35.3% of our capital stock to a guaranty trust to secure Aeroinvest's obligations under the Aeroinvest Loans. If Aeroinvest were to default on its obligations under the loan agreements, Halkin Finance Plc would be entitled to foreclose on the Series B shares owned by Aeroinvest. Aeroinvest also has entered into an agreement with NAFIN pursuant to which Aeroinvest is obligated under certain circumstances either to sell its Series B shares or to deposit them in a voting trust. The terms of this obligation are described more fully under "Principal Stockholders and Selling Stockholder—Arrangements relating to Aeroinvest."

As a result of the lower level of liquidity and the higher level of volatility of the Mexican securities market, the market price of our Series B shares, and as a result, our ADSs, may experience extreme price and trading volume fluctuations.

        The Mexican Stock Exchange is one of Latin America's largest exchanges in terms of market capitalization, but it remains relatively small, illiquid and volatile compared to other major world markets. Although the public participates in the trading of securities on the Mexican Stock Exchange, a substantial portion of such activity consists of transactions by or on behalf of institutional investors. These market characteristics may limit the ability of a holder of Series B shares to sell its shares and may also adversely affect the market price of the Series B shares and, as a result, the market price of the ADSs. The trading volume for securities issued by emerging market companies tends to be lower than the trading volume of securities issued by companies in more developed countries.

You may not be entitled to participate in future preemptive rights offerings.

        Under Mexican law, if we issue new shares for cash as part of a capital increase other than for purposes of conducting a public offering of such shares, we must grant our stockholders the right to purchase a sufficient number of shares to maintain their existing ownership percentage in our company. Rights to purchase shares in these circumstances are known as preemptive rights. We may not legally be permitted to allow holders of ADSs or holders of Series B shares in the United States to exercise any preemptive rights in any future capital increase unless: (i) we file a registration statement with the U.S. Securities and Exchange Commission, or the SEC, with respect to that future issuance of shares; or (ii) the offering qualifies for an exemption from the registration requirements of the Securities Act. At the time of any future capital increase, we will evaluate the costs and potential liabilities associated with filing a registration statement with the SEC and any other factors that we consider important to determine whether we will file such a registration statement.

        We cannot assure you that we will file a registration statement with the SEC to allow holders of ADSs or holders of Series B shares in the United States to participate in a preemptive rights offering. In addition, under current Mexican law, sales by the depositary of preemptive rights and distribution of the proceeds from such sales to you, the ADS holders, is not possible. As a result, your equity interest in us may be diluted proportionately.

ADS holders may only vote through the depositary and are not entitled to attend shareholders' meetings.

        Under the terms of the ADSs, you have a right to instruct the depositary, The Bank of New York, to vote the shares underlying our ADSs. If we request the depositary to ask for your instructions, the depositary will notify you of shareholders' meetings. Otherwise, you may not be able to exercise your right to vote unless you withdraw the Series B shares underlying the ADSs. We will use our best efforts to request that the depositary notify you of upcoming votes and ask for your instructions. However, you may not receive voting materials in time to ensure that you are able to instruct the depositary to vote

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your shares or otherwise learn of shareholders' meetings to withdraw your Series B shares to allow you to cast your vote with respect to any specific matter. In addition, the depositary and its agents may not be able to send out your voting instructions on time or carry them out in the manner you have instructed. As a result, you may not be able to exercise your right to vote and you may lack recourse if the Series B shares underlying your ADSs are not voted as you requested.

        In addition, Mexican law and our bylaws require shareholders to deposit their shares with our secretary or with a Mexican custodian or provide evidence of their status as shareholders in order to attend shareholders' meetings. ADS holders will not be able to meet this requirement and accordingly are not entitled to attend shareholders' meetings. ADS holders will also not be permitted to vote the Series B shares underlying the ADSs directly at a shareholders' meeting or to appoint a proxy to do so without withdrawing the Series B shares. Please see "Description of American Depositary Shares" for further discussion regarding the deposit agreement and your voting rights.

It may be difficult to enforce civil liabilities against us or our directors, officers and controlling persons.

        We are organized under the laws of Mexico, and all of our directors, officers and controlling persons reside in Mexico. In addition, substantially all of our assets and their assets 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 them, 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.

Our ability to pay dividends depends on our subsidiaries' ability to transfer income and dividends to us.

        Grupo Aeroportuario del Centro Norte, S.A.B. de C.V., is a holding company with no significant assets other than the stock of its wholly owned subsidiaries. Our ability to pay dividends to our shareholders depends on the continued transfer to us of dividends and other revenue from our wholly owned subsidiaries. The ability of our subsidiaries to pay dividends to us is limited by the requirement under Mexican law that our subsidiaries allocate earnings to their respective legal reserve funds prior to paying dividends.

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BUSINESS STRATEGY

        We believe that we are well diversified, with airports in metropolitan areas, tourist destinations, regional population centers, and border cities. Our airports handled approximately 10.6 million and 5.8 million terminal passengers in 2005 and the first six months of 2006, respectively. Historically, air transport in Mexico has been relatively expensive and thus used almost exclusively by the more affluent segment of the population. For example, Mexico had approximately 70 million commercial aviation passengers at its airports in 2005 according to the Airport and Auxiliary Services Agency, as compared to a population of approximately 103 million in 2005 according to the Mexican National Institute of Statistics, Geography and Informatics. The United States, by contrast, had a population of approximately 295 million in 2005 according to the U.S. Census Bureau and reported approximately 746 million commercial aviation passengers in 2005 according to the U.S. Department of Transportation. Mexico also has the largest economy in Latin America, a largely undeveloped long-distance road and rail network and a challenging topography better suited to air transportation than overland transportation, which are factors we believe favor sustained growth in passenger traffic volume. We believe these factors have led to the recent entry of several low-cost carriers to the Mexican market.

        We intend to capitalize on these trends through the following strategies:

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40


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USE OF PROCEEDS

        We will not receive any proceeds from this offering. The net proceeds from the sale of the ADSs and the Series B shares sold in this global offering are payable to the selling stockholder. The Mexican government will in turn receive the proceeds from the selling stockholder, to be used as determined by the Mexican government.


CAPITALIZATION

        The following table sets forth our capitalization as of June 30, 2006, and as adjusted to give effect to (i) the subscription by SETA for 8,000,000 newly issued Series B shares pursuant to an option it acquired in connection with its purchase of our Series BB shares and (ii) our payment of a dividend of Ps. 423.9 million in September 2006. This information should be read in conjunction with the financial statements appearing elsewhere in this prospectus. With the exception of the effects to capitalization as a result of the subscription of the option and the payment of dividends discussed above, there will be no further change to our capitalization as a result of this global offering.

 
  As of June 30, 2006
 
  Mexican GAAP
  U.S. GAAP
 
  Mexican pesos
  U.S. dollars(1)
  Mexican pesos
  U.S. dollars(1)
 
  Actual
  As
adjusted

  Actual
  As
adjusted

  Actual
  As
adjusted

  Actual
  As
adjusted

 
  (in thousands)

Cash and cash equivalents   Ps. 1,983,241   1,677,197   U.S.$ 175,718   148,602   Ps. 1,983,241   1,677,197   U.S.$ 175,718   148,602
Total liabilities(2)     839,109   1,012,268     74,347   89,688     278,793   451,952     24,701   40,044
Stockholders' equity:                                        
  Common stock(3)     5,681,221   5,798,076     503,364   513,718     1,592,335   1,721,516     141,083   152,528
  Retained earnings     1,633,522   1,209,580     144,732   107,171     3,289,999   2,866,057     291,499   253,937
  Cumulative initial effect of deferred income tax     255,312   255,312     22,621   22,621            
  Additional paid-in capital(4)       1,044       92     42,851   31,568     3,797   2,797
  Total stockholders' equity(5)     7,570,055   7,264,012     670,717   643,602     4,925,185   4,619,141     436,379   409,262

(1)
Pesos have been converted into U.S. dollars for your convenience at the rate of Ps. 11.2865 per U.S. dollar, the Federal Reserve noon buying rate at June 30, 2006.

(2)
The increase in liabilities represents income tax payable of Ps. 173,159 (determined according to the Mexican Federal Income Tax Law regulations) related to the dividends paid by the Company to its shareholders.

(3)
For purposes of Mexican GAAP, the increase to common stock to give effect to the subscription of shares by SETA was calculated based on 8,000,000, the number of shares exercised by SETA, multiplied by Ps. 14.6068, which represents the book value of the Company's common stock per share on September 5, 2006, the date of exercise. Book value per share is calculated as the book value of our common stock at September 5, 2006, divided by the number of shares outstanding. The excess of the sum of the cash proceeds received upon the exercise of the shares over the total book value of such shares was recognized as additional paid-in capital.


For purposes of U.S. GAAP, the increase in common stock was calculated as Ps. 117,898, representing the sum of the cash proceeds received upon the exercise of the option, plus Ps. 11,283, which represents the amounts previously credited to additional paid-in capital related to the 2% of the option as a result of the recognition of compensation expense over the life of the award.

(4)
For purposes of Mexican GAAP, the increase in additional paid-in capital was calculated as the excess of the sum of the proceeds received upon exercise of the option of Ps. 117,898 over the total book value of the option exercised of Ps. 116,854.


For purposes of U.S. GAAP, the decrease to additional paid-in capital was represented by the transfer to common stock of Ps. 11,283, which represented amounts previously credited to additional paid-in capital related to the 2% option as a result of the recognition of compensation expense over the life of the award.

(5)
Total stockholders' equity under Mexican GAAP reflects the value assigned to our concessions under Mexican GAAP. Under U.S. GAAP, no value has been assigned to our concessions.

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DILUTION

        On June 30, 2006, we had a net tangible book value under Mexican GAAP of Ps. 19.60 per share, or Ps. 156.79 per ADS (U.S. $13.89 per ADS at an exchange rate of Ps. 11.2865 per U.S. dollar) based on the ratio of eight Series B shares per ADS. Net tangible book value per ADS is determined by dividing tangible assets (defined as total assets less intangibles, and including our concessions and rights to use airport facilities) less total liabilities by the total number of shares outstanding and adjusting for the ratio of shares per ADS. Dilution, for this purpose, represents the difference between the price per ADS paid by purchasers in the global offering and net tangible book value per ADS on June 30, 2006. The following table illustrates the dilution in net tangible book value per ADS to purchasers of ADSs in the global offering:

 
  U.S. $
Initial public offering price per ADS   18.00
Net tangible book value per ADS before global offering   13.89
  Increase per ADS attributable to ADSs offered hereby  
Pro forma net tangible book value per ADS after global offering   13.89
Dilution to purchasers of ADSs in global offering   4.11

        In September 2006, SETA subscribed for 8,000,000 newly issued Series B shares representing 2% of our outstanding capital stock at a purchase price of U.S. $10.8 million (Ps. 117.9 million) (determined based on an initial price per share of U.S. $1.1286 (Ps. 11.0198) plus an annual 5% premium, subject to decreases corresponding to dividends declared and paid by us) pursuant to an option that SETA acquired in connection with its purchase of our Series BB shares.

        In December 2005, Aeroinvest exercised an option to purchase from the Mexican government Series B shares currently representing 35.3% of our outstanding capital stock (141,120,000 Series B shares) at a purchase price of U.S. $203.3 million (Ps. 2,165.4 million) (determined based on an initial price per share of U.S. $1.1286 (Ps. 11.0198) plus an annual 5% premium, subject to decreases corresponding to dividends declared and paid by us).

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MARKET INFORMATION

        Prior to this global offering, there has been no public market for the ADSs or the Series B shares in the United States, Mexico or elsewhere. The ADSs have been approved for listing on The NASDAQ Global Market under the symbol "OMAB" and to list the Series B shares on the Mexican Stock Exchange under the symbol "OMA."

        We cannot predict the extent to which investors will choose to take delivery of their Series B shares in the form of ADSs as compared to Series B shares, or the extent to which investor interest in our ADSs and Series B shares will lead to the development of a trading market in Mexico, the United States or elsewhere. We also cannot predict the liquidity of any such market, should any such market develop. If the trading volume of our Series B shares or ADSs in any such market were to be below certain levels, our Series B shares or ADSs may be delisted or deregistered in such market.

Trading on the Mexican Stock Exchange

Overview

        The Mexican Stock Exchange, located in Mexico City, is the only stock exchange in Mexico. Operating continuously since 1907, the Mexican Stock Exchange is organized as a corporation (sociedad anonima de capital variable). Securities trading on the Mexican Stock Exchange occurs each business day from 8:30 a.m. to 3:00 p.m., Mexico City time.

        Since January 1999, all trading on the Mexican Stock Exchange has been effected electronically. The Mexican Stock Exchange may impose a number of measures to promote an orderly and transparent trading price of securities, including the operation of a system of automatic suspension of trading in shares of a particular issuer when price fluctuation exceeds certain limits. The Mexican Stock Exchange may also suspend trading in shares of a particular issuer as a result of:

        The Mexican Stock Exchange may reinstate trading in suspended shares when it deems that the material events have been adequately disclosed to public investors or when it deems that the issuer has adequately explained the reasons for the changes in offer and demand, volume traded, or prevailing share price. Under current regulations, the Mexican Stock Exchange may consider the measures adopted by the other stock exchanges in order to suspend and/or resume trading in an issuer's shares in cases where the relevant securities are simultaneously traded on a stock exchange outside of Mexico.

        Settlement on the Mexican Stock Exchange is effected two business days after a share transaction. Deferred settlement is not permitted without the approval of the Mexican National Banking and Securities Commission, even where mutually agreed. Most securities traded on the Mexican Stock Exchange are on deposit with the S.D. Indeval, S.A. de C.V., Institucion para el Deposito de Valores, or Indeval, a privately owned securities depositary that acts as a clearinghouse, depositary, and custodian, as well as a settlement, transfer, and registration agent for Mexican Stock Exchange transactions, eliminating the need for physical transfer of securities.

        Although the Mexican Securities Market Law (Ley del Mercado de Valores) provides for the existence of an over-the-counter market, no such market for securities in Mexico has developed.

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Market Regulation

        In 1925, the Mexican National Banking Commission (Comisión Nacional Bancaria) was established to regulate banking activity and in 1946, the Mexican Securities Commission (Comisión Nacional de Valores) was established to regulate stock market activity. In 1995, these two entities were merged to form the Mexican National Banking and Securities Commission (Comisión Nacional Bancaria y de Valores). The Mexican Securities Market Law, which took effect in 1975, introduced important structural changes to the Mexican financial system, including the organization of brokerage firms as corporations (sociedades anónimas). The Mexican Securities Market Law sets standards for authorizing companies to operate as brokerage firms, which authorization is granted at the discretion of the Mexican Ministry of Finance and Public Credit (Secretaria de Hacienda y Credito Publico), upon the recommendation of the National Banking and Securities Commission. In addition to setting standards for brokerage firms, the Mexican Securities Market Law authorizes the National Banking and Securities Commission, among other things, to regulate the public offering and trading of securities, corporate governance, disclosure and reporting standards and to impose sanctions for the illegal use of insider information and other violations of the Mexican Securities Market Law. The National Banking and Securities Commission regulates and supervises the Mexican securities market, the Mexican Stock Exchange, Indeval and brokerage firms through a board of governors composed of 13 members.

        On December 30, 2005, a new Mexican Securities Market Law was enacted and published in the Official Gazette. The new Securities Market Law became effective on June 28, 2006; however, in some cases an additional period of 180 days (until late December 2006) will be available for issuers to incorporate the new corporate governance and other requirements derived from the new law into their bylaws. The new Mexican Securities Market Law changed the Mexican securities regulation in various material respects. The reforms were intended to update the Mexican regulatory framework applicable to the securities market and publicly traded companies in accordance with international standards.

        In particular, the new Mexican Securities Market Law (i) establishes that public entities and the entities controlled by them will be considered a single economic unit (e.g., holding companies and wholly owned subsidiaries), (ii) clarifies the rules for tender offers, dividing them into voluntary and mandatory categories, (iii) clarifies standards for disclosure of holdings of shareholders of public companies, (iv) expands and strengthens the role of the board of directors of public companies, (v) defines the standards applicable to the board of directors and the duties of the board, each director, its secretary, the general director and executive officers (introducing concepts such as the duty of care, duty of loyalty and safe harbors), (vi) replaces the statutory auditor (comisario) and its duties with an audit committee, a corporate practices committee and external auditors, (vii) clearly defines the roles and responsibilities of executive officers, (viii) improves the rights of minority shareholders relating to legal remedies and access to company information, (ix) introduces concepts such as consortiums, groups of related persons or entities, control, related parties and decision-making power, and (x) expands the definition of applicable sanctions for violations of the Mexican Securities Market Law, including the punitive damages and criminal penalties.

        In March 2003, the National Banking and Securities Commission issued certain general regulations applicable to issuers and other securities market participants. The general regulations, which repealed several previously enacted National Banking and Securities Commission regulations (circulares), now provide a single set of rules governing issuers and issuer activity, among other things. In September 2006, these general regulations were amended to give effect to the provisions of the Mexican Securities Market Law.

        In addition, in September 2004, the National Banking and Securities Commission issued general rules applicable to brokerage firms, the General National Banking and Securities Commission Rules for Brokerage Firms (circulares aplicables a casas de bolsa). The General National Banking and Securities

45



Commission Rules for Brokerage Firms now provide a single set of rules governing participation of Mexican underwriters in public offerings, among other things.

Registration and Listing Standards

        To offer securities to the public in Mexico, an issuer must meet specific qualitative and quantitative requirements. In addition, only securities that have been registered with the Mexican National Securities Registry pursuant to the National Banking and Securities Commission's approval may be listed on the Mexican Stock Exchange. The National Banking and Securities Commission's approval for registration does not imply any kind of certification or assurance related to the investment quality of the securities, the solvency of the issuer, or the accuracy or completeness of any information delivered to the National Banking and Securities Commission. The general regulations state that the Mexican Stock Exchange must adopt minimum requirements for issuers to list their securities in Mexico. These requirements relate to matters such as operating history, financial and capital structure, minimum trading volumes and minimum public floats, among others. The general regulations also state that the Mexican Stock Exchange must implement minimum requirements for issuers to maintain their listing in Mexico. These requirements relate to matters such as financial condition, trading minimums, capital structure and minimum public floats, among others. The National Banking and Securities Commission may waive some of these requirements in certain circumstances. In addition, some of the requirements are applicable to each series of shares of the relevant issuer.

        The Mexican Stock Exchange will review compliance with the foregoing requirements and other requirements on an annual, semi-annual and quarterly basis, and may also do it at any other time. The Mexican Stock Exchange must inform the National Banking and Securities Commission of the results of its review and this information must, in turn, be disclosed to investors. If an issuer fails to comply with any of the foregoing requirements, the Mexican Stock Exchange will request that the issuer propose a plan to cure the violation. If the issuer fails to propose a plan, if the plan is not satisfactory to the Mexican Stock Exchange or if an issuer does not make substantial progress with respect to the corrective measures, trading of the relevant series of shares on the Mexican Stock Exchange will be temporarily suspended. In addition, if an issuer fails to propose a plan or ceases to follow the plan once proposed, the National Banking and Securities Commission may suspend or cancel the registration of the shares, in which case the majority shareholder or any controlling group must carry out a tender offer to acquire 100% of the outstanding shares of the issuer in accordance with the tender offer rules discussed below.

Reporting Obligations

        Issuers of listed securities are required to file unaudited quarterly financial statements and audited annual financial statements as well as various periodic reports with the National Banking and Securities Commission and the Mexican Stock Exchange. Mexican issuers must file the following reports with the National Banking and Securities Commission:

        Pursuant to the National Banking and Securities Commission's general regulations, the internal rules of the Mexican Stock Exchange were amended to implement an automated electronic information transfer system, or SEDI (Sistema Electrónico de Envío y Difusión de Información), for information required to be filed with the Mexican Stock Exchange. Issuers of listed securities must prepare and

46



disclose their financial information via a Mexican Stock Exchange-approved electronic financial information system, or SIFIC (Sistema de Información Financiera Computarizada). Immediately upon its receipt, the Mexican Stock Exchange makes the financial information submitted via SIFIC available to the public.

        The National Banking and Securities Commission's general regulations and the rules of the Mexican Stock Exchange require issuers of listed securities to file information through SEDI that relates to any act, event or circumstance that could influence issuers' share price. If listed securities experience unusual price volatility, the Mexican Stock Exchange must immediately request that an issuer inform the public as to the causes of the volatility or, if the issuer is unaware of the causes, that an issuer make a statement to that effect. In addition, the Mexican Stock Exchange must immediately request that issuers disclose any information relating to relevant material events, when it deems the information currently disclosed to be insufficient, as well as instruct issuers to clarify the information when necessary. The Mexican Stock Exchange may request that issuers confirm or deny any material events that have been disclosed to the public by third parties when it deems that the material event may affect or influence the securities being traded. The Mexican Stock Exchange must immediately inform the National Banking and Securities Commission of any such requests.

        In addition, the National Banking and Securities Commission may also make any of these requests directly to issuers. An issuer may defer the disclosure of material events under some circumstances, as long as:

        Similarly, if an issuer's securities are traded on both the Mexican Stock Exchange and a foreign securities exchange, the issuer must simultaneously file the information that it is required to file pursuant to the laws and regulations of the foreign jurisdiction with the National Banking and Securities Commission and the Mexican Stock Exchange.

        The new Mexican Securities Market Law has not substantially modified the reporting obligations of issuers of equity securities listed on the Mexican Stock Exchange.

Suspension of Trading

        In addition to the authority of the Mexican Stock Exchange under its internal regulations as described above, pursuant to the rules of National Banking and Securities Commission, the National Banking and Securities Commission and the Mexican Stock Exchange may suspend trading in an issuer's securities:

        The Mexican Stock Exchange must immediately inform the National Banking and Securities Commission and the general public of any such suspension. An issuer may request that the National Banking and Securities Commission or the Mexican Stock Exchange resume trading, provided it demonstrates that the causes triggering the suspension have been resolved and that it is in full

47



compliance with the periodic reporting requirements under applicable law. If an issuer's request has been granted, the Mexican Stock Exchange will determine the appropriate mechanism to resume trading. If trading in an issuer's securities is suspended for more than 20 business days and the issuer is authorized to resume trading without conducting a public offering, the issuer must disclose via SEDI a description of the causes that resulted in the suspension and reasons why it is now authorized to resume trading before trading may resume.

Insider Trading, Trading Restrictions and Tender Offers

        The Mexican Securities Market Law contains specific regulations regarding insider trading, including (i) the requirement that persons in possession of information deemed privileged abstain (x) from trading in the relevant issuer's securities, (y) from making recommendations to third parties to trade in such securities and (z) from trading in options and derivatives of the underlying security issued by such entity and (ii) providing a counterparty not privy to insider information with a right of indemnification from the party possessing privileged information.

        In addition, if an issuer's securities are traded on both the Mexican Stock Exchange and a foreign securities exchange, the issuer must simultaneously file with the National Banking and Securities Commission the information that it is required to file pursuant to the rules and regulations of the foreign securities exchange.

        Pursuant to the Mexican Securities Market Law, the following persons must notify the National Banking and Securities Commission of any transactions undertaken by a listed issuer:

        In addition, under the Mexican Securities Market Law insiders must abstain from purchasing or selling securities of the issuer within 90 days from the last sale or purchase, respectively.

        Shareholders of issuers listed on the Mexican Stock Exchange must notify the National Banking and Securities Commission before effecting transactions outside of the Mexican Stock Exchange that result in a transfer of 10% or more of an issuer's share capital. Transferring shareholders must also inform the National Banking and Securities Commission of the effect of the transactions within three days following their completion, or, alternatively, that the transactions have not been consummated. The National Banking and Securities Commission will notify the Mexican Stock Exchange of these transactions on a no-name basis.

        The Mexican Securities Market Law also provides that, for purposes of determining any of the foregoing percentages, convertible securities, warrants and derivatives must be taken into account.

        Subject to certain exceptions, any acquisition of a public company's shares that results in the acquiror owning 10% or more, but less than 30%, of an issuer's outstanding share capital must be publicly disclosed to the National Banking and Securities Commission and the Mexican Stock Exchange by no later than one business day following the acquisition. Any acquisition by an insider that results in the insider holding an additional 5% or more of a public company's outstanding share capital must also be publicly disclosed to the National Banking and Securities Commission and the Mexican Stock Exchange no later than the day following the acquisition. Some insiders must also notify the National Banking and Securities Commission of share purchases or sales that occur within a three-month or five-day term and that exceed certain value thresholds. The Mexican Securities Market Law requires

48



that convertible securities, warrants and derivatives to be settled in kind be taken into account in the calculation of share ownership percentages.

        The Mexican Securities Market Law contains provisions relating to public tender offers and certain other share acquisitions occurring in Mexico. Under the law, tender offers may be voluntary or mandatory. Voluntary tender offers, or offers where there is no requirement that they be initiated or completed, are required to be made pro rata. Any intended acquisition of a public company's shares that results in the acquiror owning 30% or more, but less than a percentage that would result in the acquiror obtaining control, of a company's voting shares requires the acquiror to make a mandatory tender offer for (a) the greater of the percentage of the share capital intended to be acquired or (b) 10% of the company's outstanding share capital stock. Finally, any intended acquisition of a public company's shares that is aimed at obtaining voting control requires the potential acquiror to make a mandatory tender offer for 100% of the company's outstanding share capital (however, under certain circumstances the National Banking and Securities Commission may permit an offer for less than 100%). The tender offer must be made at the same price to all shareholders and classes of shares. The board of directors, with the advice of the audit committee, must issue its opinion of any tender offer resulting in a change of control, which opinion must take minority shareholder rights into account and which may be accompanied by an independent fairness opinion.

        Under the Mexican Securities Market Law, all tender offers must be open for at least 20 business days and not 15 business days as required under the general rules and purchases thereunder are required to be made pro rata to all tendering shareholders. The Mexican Securities Market Law also permits the payment of certain amounts to controlling shareholders over and above the offering price if these amounts are fully disclosed, approved by the board of directors and paid in connection with non-compete or similar obligations. The law also provides exceptions to the mandatory tender offer requirements and specifically sets forth remedies for non-compliance with these tender offer rules (e.g., suspension of voting rights, possible annulment of purchases, etc.) and other rights available to prior shareholders of the issuer.

Anti-Takeover Protections

        The Mexican Securities Market Law provides that public companies may include anti-takeover provisions in their bylaws if such provisions (i) are approved by a majority of the shareholders, with no more than 5% of the outstanding capital shares voting against such provisions, (ii) do not exclude any shareholder(s) or group of shareholder(s), and (iii) do not restrict, in an absolute manner, a change of control. See "Description of Capital Stock—Shareholder Ownership Restrictions and Anti-takeover Protection."

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DIVIDEND POLICY

        The declaration, amount and payment of dividends require the approval of either (i) holders of a majority of our capital stock present at a shareholders' meeting and, so long as the Series BB shares represent at least 7.65% of our outstanding capital stock, the approval of the holders of a majority of the Series BB shares, or (ii) holders of 95% of our capital stock. Shareholder resolutions regarding dividends generally, but not necessarily, are taken on the recommendation of the board of directors.

        Mexican law requires that at least 5% of a company's net income each year (after profit sharing and other deductions required by Mexican law) be allocated to a legal reserve fund until such fund reaches an amount equal to at least 20% of its capital stock from time to time (without adjustment for inflation). Our legal reserve fund was Ps. 36.1 million at June 30, 2006 (excluding reserve amounts corresponding to 2006 net income), which represented 0.64% of our capital stock as of such date.

        Mexican companies may pay dividends only out of earnings (including retained earnings after all losses have been absorbed or paid up) and only after such allocation to the legal reserve fund. The reserve fund is required to be funded on a stand-alone basis for each company, rather than on a consolidated basis. The level of earnings available for the payment of dividends is determined under Mexican GAAP. Our subsidiaries are required to allocate earnings to their respective legal reserve funds prior to paying dividends to Grupo Aeroportuario del Centro Norte, S.A.B. de C.V. We are also required to allocate earnings to our legal reserve fund prior to distributing any dividend payments to our shareholders.

        Dividends that are paid from a company's distributable earnings that have not been subject to corporate income tax are subject to a corporate-level dividend tax (charged against cumulative net income and payable by us). Companies are entitled to apply any corporate-level dividend tax on the distribution of earnings as a credit against their Mexican corporate income tax corresponding to the fiscal year in which the dividend was paid or against the Mexican corporate income tax of the two fiscal years following the date in which the dividend was paid. Dividends paid from a company's distributable earnings that have been subject to corporate income tax are not subject to this corporate-level dividend income tax. Furthermore, dividends paid to resident and non-resident holders with respect to our Series B shares and ADSs are currently not subject to Mexican withholding tax.

        As of June 30, 2006, we had accumulated approximately Ps. 13.5 million of distributable earnings that have been subject to the corporate income tax and that could be declared and paid to shareholders free of the corporate level dividend tax. Accordingly, any dividends we pay in excess of this amount will be subject to the corporate level dividend tax, and we may apply such corporate level dividend tax as a credit to our tax liability in the year paid and in the subsequent two years.

        Our shareholders recently adopted a new dividend policy that seeks to ensure the tax efficient payment of dividends. Because we expect any dividend we pay to be subject to the corporate-level dividend tax referred to above, our dividend policy has been designed to ensure that any corporate level dividend tax we pay may be applied by us as a credit against our projected future corporate income tax liability.

        Our new dividend policy has a fixed and a variable component. The fixed component is targeted to be Ps. 325 million per annum. The variable component will be based on the funds available for distribution in excess of the fixed component. The determination of the variable portion of our dividend will be made based on the amount of cash and liquid investments we hold (as reflected in our balance sheet as of the month-end immediately prior to the dividend payment) that is in excess of our "minimum cash balance." For the purposes of our dividend policy, "minimum cash balance" is the minimum amount of cash and liquid investments, as determined by our board of directors, necessary to cover our projected investments for the subsequent twelve months and our expected operating expenses for the subsequent six months. We expect to pay dividends in cash and in one or more payments, as

50



determined by the shareholders' meeting in which dividends are determined and declared. We expect to regularly evaluate our dividend policy to ensure that it remains tax efficient.

        The declaration, amount and payment of dividends pursuant to the policy described above are subject to (i) compliance with applicable law regarding the declaration and payment of dividends with respect to any year including the establishment of the statutory legal reserve fund, (ii) the absence of any adverse effect on our business plan for the current or subsequent fiscal year as a result of the payment of any dividend, and (iii) the absence of any adverse tax consequence to us from the payment of any dividend, based on the tax considerations described above and any other applicable taxes. This policy is based on current Mexican tax law and our projections of our future earnings and corporate income tax liability. Changes in Mexican tax law and our actual results of operations could cause our policy to change or otherwise change the amount of dividends paid in any given year.

        Prior to September 22, 2006, we had not paid any dividends. On September 22, 2006, prior to the effectiveness of our new dividend policy, we paid an aggregate dividend of Ps. 423.9 million. We cannot assure you that we will continue to pay dividends or that our current dividend policy will not be amended.

        We will declare any dividends in pesos. In the case of Series B shares represented by ADSs, the cash dividends will be paid to the depositary and, subject to the terms of the Deposit Agreement, converted into and paid in U.S. dollars at the prevailing rate of exchange, net of conversion expenses of the depositary and applicable Mexican withholding tax. Fluctuations in exchange rates will affect the amount of dividends that ADS holders receive. For a more detailed discussion, see "Description of American Depositary Shares."

        Distributions made by us to our shareholders other than as dividends (in the manner described above), including capital reductions, amortization of shares or otherwise, would be subject to taxation in Mexico, including withholding taxes. The tax rates applicable and the method of assessing and paying taxes applicable to any such non-dividend distributions will vary depending on the nature of the distributions.

51



SELECTED CONSOLIDATED FINANCIAL INFORMATION

        The following tables present our summary consolidated financial information 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, as well as "Management's Discussion and Analysis of Financial Condition and Results of Operations" included elsewhere in this prospectus. Our financial statements are prepared in accordance with Mexican GAAP, which differs in certain significant respects from U.S. GAAP. Note 19 to our audited financial statements for the years ended December 31, 2005, 2004 and 2003 and Note 18 to our unaudited financial statements for the six-month periods ended June 30, 2006 and 2005 provide 1) a summary of the principal differences between Mexican GAAP and U.S. GAAP as they relate to our business; 2) a reconciliation to U.S. GAAP of net income and stockholders' equity; and 3) condensed financial statements under U.S. GAAP and additional U.S. GAAP disclosure information.

        The unaudited interim consolidated financial information has been prepared on the same basis as our audited consolidated financial statements and, in our opinion, includes all adjustments that we consider necessary to fairly present our results of operations and financial condition for and as of the end of these periods. Our results for the six-month period ended June 30, 2006 are not necessarily indicative of our results to be expected for the year ended December 31, 2006 and should not be construed as such.

        Mexican GAAP 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, restating the components of stockholders' equity using the Mexican National Consumer Price Index and recording gains or losses in purchasing power from holding monetary liabilities or assets. Mexican GAAP also requires the restatement of all financial statements to constant Mexican pesos as of the date of the most recent balance sheet presented. Our audited year-end and unaudited interim financial statements and all other financial information contained herein are accordingly presented in constant pesos with purchasing power as of June 30, 2006, unless otherwise noted.

52


 
  Year ended December 31,
  Six months ended June 30,
 
  2001
  2002
  2003
  2004
  2005
  2005
  2005
  2006
  2006
 
  (thousands of pesos, except per share amounts)

  (thousands
of
dollars)(1)

  (thousands of pesos, except per share amounts)

  (thousands
of
dollars)(1)

Statement of income data:                                    
Mexican GAAP:                                    
Revenues:                                    
  Aeronautical services(2)   Ps.1,005,808   Ps.914,215   Ps.937,938   Ps.1,010,305   Ps.1,111,493   U.S.$98,480   Ps.552,028   Ps.621,833   U.S.$55,095
  Non-aeronautical services(3)   134,261   146,071   184,818   233,737   268,146   23,758   137,438   149,703   13,264
  Total revenues   1,140,069   1,060,286   1,122,756   1,244,042   1,379,639   122,238   689,466   771,536   68,359
Operating costs:                                    
  Cost of services   316,619   306,905   318,027   334,268   362,686   32,134   172,290   186,988   16,567
  General and administrative expenses   288,429   225,180   238,248   225,669   228,132   20,213   100,488   109,313   9,686
  Technical assistance fees(4)   57,406   63,175   36,855   37,491   37,305   3,306   17,107   16,347   1,448
  Concession taxes(5)   59,001   56,064   55,123   60,487   67,722   6,000   33,466   38,905   3,447
  Depreciation and amortization:                                    
    Depreciation(6)   53,402   61,366   170,814   184,659   194,930   17,271   96,420   103,374   9,159
    Amortization(7)   108,653   108,398   16,568   16,568   17,445   1,546   8,362   14,153   1,254
    Total depreciation and amortization   162,055   169,764   187,382   201,227   212,375   18,817   104,782   117,527   10,413
      Total operating costs   883,510   821,088   835,635   859,142   908,220   80,469   428,133   469,080   41,561
Income from operations   256,559   239,198   287,121   384,900   471,419   41,769   261,333   302,456   26,798
  Net comprehensive financing income (expense)   (9,643 ) 17,564   24,154   (14,304 ) 27,607   2,446   17,807   78,572   6,962
  Other income (expense)   4,026   8,974   2,601   4,295   5,013   444   (1,472 ) 9,732   862
Income before income taxes and statutory employee profit sharing   250,942   265,736   313,876   374,891   504,039   44,659   277,668   390,760   34,622
  Income tax and statutory employee profit sharing expense   127,096   131,383   135,618   87,501   148,746   13,180   89,240   136,244   12,072
Consolidated net income   123,846   134,353   178,258   287,390   355,293   31,479   188,428   254,516   22,550
Basic and diluted earnings per share(8)   Ps.0.3159   Ps.0.3427   Ps.0.4547   Ps.0.7331   Ps.0.9064   U.S.0.0803   Ps.0.4807   Ps.0.6493   U.S.$0.0575
Pro forma basic and diluted earnings per share(9)                   Ps.0.8811   U.S.$0.0781       Ps.0.6312   U.S.$0.0559
Basic and diluted earnings per ADS(8)   Ps.2.5275   Ps.2.7419   Ps.3.6379   Ps.5.8651   Ps.7.2509   U.S.$0.6424   Ps.3.8455   Ps.5.1942   U.S.$0.4602

U.S. GAAP:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
Revenues               Ps.1,244,042   Ps.1,379,639   U.S.$122,238   Ps.689,466   Ps.771,536   U.S.$68,541
Income from operations               453,429   559,592   49,581   308,002   301,887   26,748
Consolidated net income               171,637   415,615   36,824   220,134   273,280   24,213
Basic earnings per share(8)               Ps.0.4412   Ps.1.0683   U.S.$0.0947   Ps.0.5658   Ps.0.7024   U.S.$0.0622
Diluted earnings per share(10)               Ps.0.4378   Ps.1.0602   U.S.$0.0939   Ps.0.5616   Ps.0.6951   U.S.$0.0616
Pro forma basic earnings per share(9)                   Ps.1.0383   U.S.$0.0920       Ps.0.6827   U.S.$0.0605
Pro forma diluted earnings per share(9)                   Ps.1.0307   U.S.$0.0913       Ps.0.6777   U.S.$0.0600
Basic earnings per ADS(8)               Ps.3.5293   Ps.8.5460   U.S. $0.7572   Ps.4.5265   Ps.5.6193   U.S.$0.4979
Diluted earnings per ADS(10)               Ps.3.5028   Ps.8.4814   U.S. $0.7515   Ps.4.4925   Ps.5.5610   U.S.$0.4927
Other operating data:                                    
  Total terminal passengers (thousands of passengers)(11)   9,052   8,553   8,853   9,739   10,599   10,599   5,216   5,779   5,779
  Total air traffic movements (thousands of movements)   354   340   333   346   362   362   181   190   190
  Total revenues per terminal passenger(12)   126   124   127   128   130   130   132   134   134

Other data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
EBITDA:                                    
Consolidated net income under Mexican GAAP   Ps.123,846   Ps.134,353   Ps.178,258   Ps.287,390   Ps.355,293   U.S.$31,479   Ps.188,428   Ps.254,516   U.S.$22,550
Minus:                                    
  Net comprehensive financing income (expense)   (9,643 ) 17,564   24,154   (14,304 ) 27,607   2,446   17,807   78,572   6,962
Plus:                                    
  Income tax and statutory employee profit sharing expense   127,096   131,383   135,618   87,501   148,746   13,180   89,240   136,244   12,072
  Depreciation and amortization   162,055   169,764   187,382   201,227   212,375   18,817   104,782   117,527   10,413
   
 
 
 
 
 
 
 
 
EBITDA(13)   Ps.422,640   Ps.417,936   Ps.477,104   Ps.590,422   Ps.688,807   U.S.$61,030   Ps.364,643   Ps.429,715   U.S.$38,073

53


 
  Year ended December 31,
  Six months ended June 30,
 
 
  2001
  2002
  2003
  2004
  2005
  2005
  2005
  2006
  2006
 
 
  (thousands of pesos)

  (thousands of pesos)

  (thousands dollars)(1)

 
 
   
   
   
   
   
  (thousands of of dollars)(1)

   
   
 
Balance sheet data:                                                      
  Mexican GAAP:                                                      
    Cash and cash equivalents   Ps. 423,713   Ps. 775,596   Ps. 901,189   Ps. 1,210,747   Ps. 1,591,008   U.S.$140,966   Ps. 1,483,171   Ps. 1,983,241   U.S.$ 175,718  
    Total current assets     656,352     1,091,802     1,154,099     1,437,258     1,873,163   165,965     1,733,816     2,257,833     200,047  
    Airport concessions—net             762,138     745,571     729,004   64,591     737,288     720,719     63,857  
    Rights to use airport facilities—net     5,203,081     5,094,682     4,198,611     4,081,372     3,964,060   351,221     4,022,723     3,905,276     346,013  
    Total assets     6,577,802     6,929,174     7,166,893     7,508,704     8,009,628   709,664     7,767,329     8,409,164     745,064  
    Current liabilities     157,612     141,986     121,308     142,252     144,807   12,830     135,615     214,244     18,982  
    Total liabilities     217,556     434,576     494,037     548,458     694,089   61,497     618,665     839,109     74,347  
    Total stockholders' equity(14)     6,360,246     6,494,598     6,672,856     6,960,246     7,315,539   648,167     7,148,674     7,570,055     670,717  
  U.S. GAAP:                                                      
    Cash and cash equivalents                       1,210,747     1,591,008   140,966     1,483,171     1,983,241     175,718  
    Total current assets                       1,455,905     1,873,163   165,965     1,753,612     2,265,632     200,738  
    Assets under concession ("Rights to use airport facilities" under Mexican GAAP)                       930,057     892,599   79,085     911,428     874,042     77,441  
    Total assets                       4,410,762     4,866,905   431,657     4,633,091     5,224,573     462,905  
    Current liabilities                       143,969     172,347   15,270     138,277     220,805     19,564  
    Total liabilities                       190,819     224,479   19,889     189,767     278,793     24,701  
    Total stockholders' equity(14)                       4,219,943     4,642,426   411,768     4,443,324     4,945,780     438,203  
Other data:                                                      
  Mexican GAAP:                                                      
    Net resources generated by operating activities   Ps. 400,488   Ps. 547,603   Ps. 488,386   Ps. 569,602   Ps. 653,896   U.S.$57,936   Ps. 339,273   Ps. 524,626   U.S.$ 46,482  
    Net resources used in investing activities     (179,005 )   (195,722 )   (362,792 )   (260,044 )   (273,635 ) (24,244 )   (66,849 )   (132,393 )   (11,730 )
    Increase in cash and cash equivalents     221,483     351,881     125,594     309,558     380,261   33,692     272,424     392,233     34,752  
  U.S. GAAP:(15)                                                      
    Net cash generated by operating activities                       565,161     645,817   57,220     339,038     521,032     46,164  
    Net cash used in investing activities                       (259,934 )   (266,706 ) (23,630 )   (66,839 )   (129,432 )   (11,468 )
    Effect of inflation accounting                       4,331     1,150   102     225     633     56  
    Increase in cash and cash equivalents                       309,558     380,261   33,692     272,424     392,233     34,752  

(1)
Translated into dollars at the rate of Ps. 11.2865 per U.S. dollar, the U.S. Federal Reserve noon buying rate for Mexican pesos at June 30, 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 "Business—Opening of Mexican Airports to Investment—Investment by 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 GAAP purposes, based on 392,000,000 weighted average common shares outstanding in each period. For U.S. GAAP purposes, based on 389,060,000 weighted average common shares outstanding in each period. Earnings per ADS is based on the ratio of eight Series B shares per ADS.

54


(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. $1.3527 (Ps. 14.6735) 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, the 8,000,000 newly issued Series B shares are included in basic earnings per share.

(10)
Based on 392,022,615 weighted average common shares and common share equivalents outstanding for the year ended December 31, 2005, 393,135,368 weighted average common shares and common share equivalents outstanding for the six-month period ended June 30, 2006, and 392,000,000 weighted average common shares and common share equivalents outstanding for the year ended December 31, 2004 and for the six-month period ended June 30, 2005. Earnings per ADS is based on the ratio of eight 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, you should bear in mind that EBITDA is not defined and is not a recognized financial measure under Mexican GAAP 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 GAAP 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.

55



MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

        The following discussion is derived from our year-end audited and unaudited interim financial statements, which are presented elsewhere in this prospectus. This discussion 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 have been prepared in accordance with Mexican GAAP, which differs in certain respects from U.S. GAAP. See Note 19 to our audited financial statements for the years ended December 31, 2005, 2004 and 2003 and Note 18 to our unaudited financial statements for the six-month periods ended June 30, 2006 and 2005 for a) a summary of the principal differences between Mexican GAAP and U.S. GAAP as they relate to us; b) a reconciliation to U.S. GAAP of net income and stockholders' equity; and c) condensed financial statements under U.S. GAAP and additional U.S. GAAP disclosure information.

        Our year-end audited and unaudited interim financial statements and all other financial information contained herein are presented in constant pesos with purchasing power as of June 30, 2006, unless otherwise noted. Our results of operations for the six-month period ended June 30, 2006 are not necessarily indicative of our expected results of operations for the year ended December 31, 2006 and should not be construed as such.

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 80.6% of our total revenues in each of 2005 and the first six months of 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 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 2005 and the first six months of 2006, for example, approximately 76.6% and 75.1%,

56



respectively, 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.

        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,
  Six months ended June 30,
 
 
  2003
  2004
  2005
  2005
  2006
 
Domestic terminal passengers(1)   6,981.7   7,568.7   8,118.9   3,878.3   4,342.5  
International terminal passengers(1)   1,871.2   2,170.7   2,479.8   1,338.2   1,436.1  
  Total terminal passengers(1)   8,852.9   9,739.4   10,598.7   5,216.5   5,778.6  
Cargo(1)   710.2   790.4   808.6   381.9   403.1  
Total workload units(1)       10,529.8   11,407.3   5,598.4   6,181.7  
Change in total terminal passengers(2)       10.0 % 8.8 %     10.8 %
Change in workload units(2)       10.1 % 8.3 %     10.4 %
Aeronautical revenue(3)   Ps.937.9   Ps.1,010.3   Ps.1,111.5   Ps.552.0   Ps.621.8  
Change in aeronautical revenue(2)       7.7 % 10.0 %     12.6 %
Aeronautical revenue per workload unit   Ps.98.1   Ps.95.9   Ps.97.4   Ps.98.6   Ps.100.6  
Change in aeronautical revenue per workload unit(1)(2)       (2.2 )% 1.6 %     2.0 %
Non-aeronautical revenue(3)   Ps.184.8   Ps.233.7   Ps.268.1   Ps.137.4   Ps.149.7  
Change in non-aeronautical revenue(2)       26.5 % 14.7 %     8.9 %
Non-aeronautical revenue per terminal passenger   Ps.20.9   Ps.24.0   Ps.25.3   Ps.26.3   Ps.25.9  
Change in non-aeronautical revenue per terminal passenger(2)       15.0 % 5.4 %     (1.7 )%

(1)
In thousands. One cargo unit is equivalent to 100 kilograms (220 pounds) of cargo. Under the regulation applicable to our 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 2005, we served 10.6 million terminal passengers (8.1 million domestic and 2.5 million international). During the first six months of 2006, we had 5.8 million terminal passengers (4.3 million domestic and 1.4 million international). In 2005 and the first six months of 2006, we served approximately 1.4 million and 0.4 million transit passengers, respectively.

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 each of 2005 and the first six months of 2006, 80.6% 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

57



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 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 "Business—Our Sources of 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 "Regulatory Framework—Revenue 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,
  Six months ended June 30,
 
 
  2003
  2004
  2005
  2005
  2006
 
 
  Amount
  Percent
  Amount
  Percent
  Amount
  Percent
  Amount
  Percent
  Amount
  Percent
 
 
  (millions of pesos, except percentages and workload unit data)

 
Aeronautical Revenue:                                          
  Passenger charges   Ps.641.7   68.4 % Ps.697.1   69.0 % Ps.780.4   70.2 % Ps.382.3   69.3 % Ps.447.4   72.0 %
  Landing charges   91.5   9.8   98.8   9.8   105.6   9.5   52.5   9.5   54.3   8.7  
  Aircraft parking charges   78.0   8.3   82.4   8.2   84.6   7.6   42.1   7.6   44.0   7.1  
  Airport security charges   13.3   1.4   14.5   1.4   16.5   1.5   8.2   1.5   8.7   1.4  
  Passenger walkway charges   19.6   2.1   21.9   2.2   25.7   2.3   13.1   2.4   12.1   1.9  
  Leasing of space to airlines   93.2   9.9   95.2   9.4   98.2   8.8   53.8   9.7   55.3   8.9  
  Revenues from complementary service providers(1)   0.6   0.1   0.4   0.0   0.5   0.1   0.0   0.0   0.0   0.0  
   
 
 
 
 
 
 
 
 
 
 
Total Aeronautical Revenue   Ps.937.9   100.0 % Ps.1,010.3   100.0 % Ps.1,111.5   100.0 % Ps.552.0   100.0 % Ps.621.8   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 our 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 six months (or more frequently if accumulated inflation in Mexico 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

58



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 2005 and the first six months of 2006, passenger charges represented 70.2% and 72.0%, respectively, of our aeronautical services revenues. In 2005 and the first six months of 2006, aeronautical services represented 80.6% 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 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 of Commerce setting forth the following criteria that carriers operating at our Monterrey International Airport must meet in order to qualify for an incentive package that includes a discount equal to Ps. 75.00 per terminal passenger on passenger charges (representing approximately 40% of our usual passenger charge):

We intend to offer this incentive only to airlines meeting the criteria set forth above. Carriers must notify 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. Thereafter, the incentive will no longer be available. The term of any agreement signed pursuant to criterion 1 above will be three years and it may be renewed annually thereafter. This incentive is not available in combination with any other incentive programs we currently offer.

        We anticipate the low-cost carrier Viva Aerobus will be the first airline to take advantage of the incentive package described above, although there can be no assurance in this regard. Viva Aerobus 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. We recently entered into a letter of intent with Viva Aerobus, which contemplates our offering incentives linked to passenger traffic targets and the use of certain facilities. Pursuant to this letter of intent, Viva Aerobus has announced that it intends to establish its corporate and operational headquarters and maintenance facilities at our Monterrey International Airport. We expect Viva Aerobus to commence operations in December 2006 with two aircraft operating nine routes and to be operating a total of 24 routes serving 12 of our airports by April 2007. Thirteen of these routes are expected to be to destinations not previously served by our Monterrey International Airport. It has also announced that it expects to expand its fleet to ten aircraft by December 2008. We are currently negotiating with Viva Aerobus with respect to a definitive agreement that we anticipate will include the incentive package described above. Although we are optimistic about these developments, there can be no assurance that Viva Aerobus or any other carrier will enter into an agreement involving the

59



incentive package described above or that any such agreement would result in growth of aeronautical revenues at our airports.

        We believe that this incentive should contribute to growth of aeronautical revenues at our airports, although there can be no assurance that the incentive will have the intended effect. 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.

        The Mexican government, together with Mexico's main airport groups (including us), recently entered into an agreement aimed at reducing passenger and aircraft congestion at the Mexico City International Airport. The agreement is intended to encourage the use of alternative airports, including our 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, Queretaro 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 of Commerce 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 of Commerce. 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 2005, our aeronautical revenues represented approximately 95% 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, however, 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.

        For a discussion of risks relating to our ability to set specific prices, see "Risk Factors—Risks Related to Our Operations—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."

        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 19.4% in 2005 and 19.4% in the first six months of 2006. Since 2003, our non-aeronautical revenue per terminal passenger increased from Ps. 20.9 in 2003 to Ps. 25.3 in 2005 and Ps. 25.9 in the first six months of 2006. In light of our 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,
  Six months ended June 30,
 
 
  2003
  2004
  2005
  2005
  2006
 
 
  Amount
  Percent
  Amount
  Percent
  Amount
  Percent
  Amount
  Percent
  Amount
  Percent
 
 
  (millions of pesos, except percentages and passenger data)

 
Non-aeronautical Revenue:                                          
  Commercial activities:                                          
    Car parking charges   Ps.55.1   29.8 % Ps.73.2   31.3 % Ps.76.3   28.5 % Ps.36.3   26.4 % Ps.40.5   27.0 %
    Advertising   19.1   10.3   23.2   9.9   30.6   11.4   16.1   11.7   17.3   11.5  
    Leasing of space(1)   13.3   7.2   24.5   10.5   32.0   11.9   17.2   12.5   17.3   11.6  
    Car rentals   14.8   8.0   15.4   6.6   19.5   7.3   9.8   7.1   10.3   6.9  
    Food and beverage operations   11.8   6.4   12.9   5.5   17.2   6.4   8.1   5.9   11.0   7.3  
    Retail operations   21.6   11.7   24.1   10.3   27.2   10.1   13.7   10.0   14.1   9.4  
    Duty-free operations   12.7   6.9   14.6   6.3   15.6   5.8   9.4   6.9   9.4   6.3  
    Communications   2.2   1.2   2.7   1.2   3.3   1.3   1.7   1.2   1.8   1.2  
    Financial services   2.0   1.1   1.4   0.6   1.9   0.7   0.5   0.4   0.7   0.5  
    Time share   12.3   6.7   16.2   6.9   15.7   5.9   7.5   5.5   7.9   5.3  
    Other   11.7   6.3   13.3   5.7   16.9   6.3   10.9   7.9   12.8   8.6  
      Total commercial activities   176.6   95.6   221.5   94.8   256.2   95.6   131.2   95.5   143.1   95.6  
  Recovery of costs(2)   8.2   4.4   12.2   5.2   11.9   4.4   6.2   4.5   6.6   4.4  
   
 
 
 
 
 
 
 
 
 
 
Total Non-aeronautical Revenue   Ps.184.8   100.0 % Ps.233.7   100.0 % Ps.268.1   100.0 % Ps.137.4   100.0 % Ps.149.7   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 and retail and duty free store operators, and advertising and fees collected from other miscellaneous sources, such as timeshare companies and telecommunications providers.

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        The following table sets forth our operating costs and certain other related information for the periods indicated.


Operating Costs

 
  Year ended December 31,
  Six months ended June 30,
 
 
  2003
  2004
  2005
  2005
  2006
 
 
  Amount
  Amount
  % change
  Amount
  % change
  Amount
  Amount
  % change
 
 
  (millions of pesos, except percentages)

 
Operating Costs:                                  
Cost of services:                                  
  Employee costs   Ps.107.2   Ps.111.2   3.7 % Ps.118.7   6.7 % Ps.58.8   Ps.66.0   12.2 %
  Maintenance   41.0   44.5   8.5   50.3   13.0   19.8   23.4   18.2  
  Safety, security & insurance   56.9   61.6   8.3   66.8   8.4   34.0   32.2   (5.3 )
  Utilities   73.4   75.6   2.9   80.9   7.0   38.0   41.2   8.4  
  Other   39.5   41.4   4.8   46.0   11.1   21.7   24.2   11.5  
    Total cost of services   318.0   334.3   5.1   362.7   8.5   172.3   187.0   8.5  
General and administrative expenses   238.2   225.7   (5.2 ) 228.1   1.1   100.5   109.3   8.7  
Technical assistance fees   36.9   37.5   1.6   37.3   (0.5 ) 17.1   16.4   (4.1 )
Concession taxes   55.1   60.4   9.6   67.7   12.1   33.5   38.9   16.1  
Depreciation and amortization:                                  
  Depreciation(1)   170.8   184.7   8.1   194.9   5.5   96.4   103.4   7.3  
  Amortization(2)   16.6   16.5   (0.6 ) 17.5   6.1   8.4   14.1   67.9  
    Total depreciation and amortization   187.4   201.2   7.4   212.4   5.6   104.8   117.5   12.1  
    Total operating costs   Ps.835.6   Ps.859.1   2.8 % Ps.908.2   5.7 % Ps.428.1   Ps.469.1   9.6 %

(1)
Reflects depreciation of fixed assets.

(2)
Reflects amortization of our airport concessions and rights to use airport facilities.

        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 increased from Ps. 318.0 million in 2003 to Ps. 362.7 million in 2005 and Ps. 187.0 million in the first six months of 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 25.6% in 2003 to 39.2% in the first six months of 2006.

        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. 238.2 million in 2003 to Ps. 228.1 million in 2005 and Ps. 109.3 million in the first six months of 2006. We anticipate that our general and administrative expenses will increase following the completion of this offering as a result of costs associated with being a public reporting company in Mexico and the United States.

        Under the technical assistance agreement, SETA provides management and consulting services and transfers technical assistance and technological and industry knowledge and experience to us in exchange for a fee. This agreement is more fully described in "Related Party Transactions." The technical assistance fee for each of 2001 and 2002 was fixed at U.S. $5.0 million (adjusted annually for U.S. inflation). For the remainder of the contract term, the fee is equal to the greater of U.S.

62


$3.0 million adjusted annually for inflation since June 14, 2006 (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 GAAP).

        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 subsidiary 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 our maximum rates from the Ministry of Communications and Transportation; however, there can be no assurance that the Ministry of Communications and Transportation would honor our request.

        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 to the concessions by an independent appraiser. 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 GAAP 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 2003, 2004, 2005 and the first six months of 2006 was 43.1%, 23.2%, 29.2% and 25.3%, respectively. Changes in our tax rate in these years was largely the result of the effect on deferred taxes resulting from decreases in statutory income tax rates (from 34% in 2003, to 33% in 2004, 30% in 2005, 29% in 2006 and 28% thereafter).

        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, other than its chief executive officer.

        In addition, we are subject to the concession tax described above under "—Classification of Revenues—Technical Assistance Fee and Concession Tax."

63


Effects of Devaluation and Inflation

        The following table sets forth, for the periods indicated:


 
  Year ended December 31,
  Six months ended June 30,
 
 
  2003
  2004
  2005
  2005
  2006
 
Depreciation (appreciation) of the Mexican peso as compared to the U.S. dollar(1)   7.6 % (0.8 )% (4.6 )% 1.1 % 6.1 %
Mexican inflation rate(2)   4.0 % 5.2   % 3.3   % 0.8 % 0.7 %
U.S. inflation rate(3)   1.9 % 3.3   % 3.4   % 2.5 % 4.3 %
Increase (decrease) in Mexican gross domestic product(4)   1.4 % 4.2   % 3.0   % 2.9 % 5.1 %

(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. 11.2372 per U.S. dollar as of December 31, 2003, 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. 11.2865 per U.S. dollar as of June 30, 2006.

(2)
Based on changes in the Mexican National Consumer Price Index from the previous period, as reported by the Mexican Central Bank. The Mexican National Consumer Price Index at period-end was 106.996 in 2003, 112.550 in 2004, 116.301 in 2005. The Mexican National Consumer Price Index was 113.447 on June 30, 2005, and 117.0590 on June 30, 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:

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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,
  Six months ended June 30,
 
 
  2003
  2004
  2005
  2005
  2006
 
 
  (millions of pesos, except percentages)

 
Monterrey:                                
  Revenues:                                
    Aeronautical services   Ps. 389.6   Ps. 428.0   Ps. 465.5   Ps. 224.6   Ps. 258.5  
    Non-aeronautical services     77.9     108.4     132.7     67.5     73.7  
      Total revenues     467.5     536.4     598.2     292.1     332.2  
  Operating costs     242.5     267.9     285.9     131.0     147.1  
  Costs of services     69.1     92.2     98.1     46.8     49.3  
  General and administrative expenses     83.0     79.0     81.8     33.4     42.0  
  Depreciation and amortization     53.7     56.8     61.3     30.4     32.2  
  Income from operations     225.0     268.5     312.3     161.1     185.1  
      Operating margin(1)     48.1 %   50.1 %   52.2 %   55.2 %   55.7 %
Acapulco:                                
  Revenues:                                
    Aeronautical services   Ps. 88.0   Ps. 90.4   Ps. 100.1   Ps. 57.3   Ps. 66.9  
    Non-aeronautical services     15.4     17.6     18.0     10.0     11.1  
      Total revenues     103.4     108.0     118.1     67.3     78.0  
  Operating costs     106.0     98.2     106.8     50.7     55.0  
  Costs of services     45.2     37.7     46.5     20.1     23.5  
  General and administrative expenses     25.9     24.3     23.0     11.1     11.7  
  Depreciation and amortization     25.8     26.8     28.3     14.1     14.5  
  Income (loss) from operations     (2.6 )   9.8     11.3     16.6     23.0  
      Operating margin(1)     (2.5 )%   9.1 %   9.6 %   24.7 %   29.5 %
Mazatlán:                                
  Revenues:                                
    Aeronautical services   Ps. 73.6   Ps. 79.2   Ps. 84.3   Ps. 45.7   Ps. 49.7  
    Non-aeronautical services     24.3     26.6     28.7     15.7     15.3  
      Total revenues     97.9     105.8     113.0     61.4     65.0  
  Operating costs     81.9     81.8     86.4     41.4     42.4  
  Costs of services     29.5     30.0     31.3     15.9     17.0  
  General and administrative expenses     23.5     21.7     25.0     9.9     9.5  
  Depreciation and amortization     20.3     21.3     21.6     10.8     11.2  
  Income from operations     16.0     24.0     26.6     20.0     22.6  
      Operating margin(1)     16.3 %   22.7 %   23.5 %   32.6 %   34.8 %
                                 

65


Culiacán:                                
  Revenues:                                
    Aeronautical services   Ps. 64.4   Ps. 69.5   Ps. 82.5   Ps. 40.5   Ps. 42.5  
    Non-aeronautical services     11.7     12.1     13.1     6.5     7.3  
      Total revenues     76.1     81.6     95.6     47.0     49.8  
  Operating costs     61.8     59.6     65.7     29.1     32.7  
  Costs of services     22.9     23.1     24.1     11.4     12.3  
  General and administrative expenses     15.9     12.9     16.5     5.7     7.6  
  Depreciation and amortization     17.0     17.3     17.5     8.7     9.1  
  Income from operations     14.3     22.0     29.9     17.9     17.1  
      Operating margin(1)     18.8 %   27.0 %   31.3 %   38.1 %   34.3 %
Chihuahua:                                
  Revenues:                                
    Aeronautical services   Ps. 59.3   Ps. 59.9   Ps. 67.4   Ps. 30.7   Ps. 34.2  
    Non-aeronautical services     10.2     11.3     13.3     6.4     7.9  
      Total revenues     69.5     71.2     80.7     37.1     42.1  
  Operating costs     46.7     48.7     60.5     26.1     28.9  
  Costs of services     18.2     19.0     22.9     10.8     12.3  
  General and administrative expenses     14.8     13.9     19.2     6.5     6.9  
  Depreciation and amortization     8.2     10.3     12.3     6.0     6.5  
  Income from operations     22.8     22.5     20.2     11.0     13.2  
      Operating margin(1)     32.8 %   31.6 %   25.0 %   29.6 %   31.4 %
Zihuatanejo:                                
  Revenues:                                
    Aeronautical services   Ps. 54.5   Ps. 60.3   Ps. 60.9   Ps. 34.7   Ps. 42.0  
    Non-aeronautical services     8.4     13.9     13.9     8.2     9.1  
      Total revenues     62.9     74.2     74.8     42.9     51.1  
  Operating costs     59.6     60.1     60.8     29.6     36.3  
  Costs of services     22.6     22.0     23.4     11.4     12.5  
  General and administrative expenses     17.3     16.6     15.5     6.8     12.0  
  Depreciation and amortization     14.2     15.5     16.1     8.0     8.3  
  Income from operations     3.3     14.1     14.0     13.3     14.8  
      Operating margin(1)     5.2 %   19.0 %   18.7 %   31.0 %   29.0 %
Other:(2)                                
  Revenues:                                
    Aeronautical services   Ps. 208.6   Ps. 223.0   Ps. 250.8   Ps. 118.5   Ps. 128.0  
    Non-aeronautical services     36.9     43.8     48.4     23.1     25.3  
      Total revenues     245.5     266.8     299.2     141.6     153.3  
  Operating costs     240.8     242.3     250.6     119.8     130.0  
  Costs of services     109.6     109.1     116.4     55.9     60.1  
  General and administrative expenses     65.6     60.8     59.4     27.5     29.8  
  Depreciation and amortization     45.4     51.4     52.1     25.6     28.6  
  Income from operations     4.7     24.5     48.6     21.8     23.3  
      Operating margin(1)     1.9 %   9.2 %   16.2 %   15.4 %   15.2 %
                                 

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Total:(3)                                
  Revenues:                                
    Aeronautical services   Ps. 938.0   Ps. 1,010.3   Ps. 1,111.5   Ps. 552.0   Ps. 621.8  
    Non-aeronautical services     184.8     233.7     268.1     137.4     149.7  
      Total revenues     1,122.8     1,244.0     1,379.6     689.4     771.5  
  Operating costs     839.3     858.6     916.7     427.7     472.4  
  Costs of services     317.1     333.1     362.7     172.3     187.0  
  General and administrative expenses     246.0     229.2     240.4     100.9     119.5  
  Depreciation and amortization     184.6     199.4     209.2     103.6     110.4  
  Income from operations     283.5     385.4     462.9     261.7     299.1  
      Operating margin(1)     25.2 %   31.0 %   33.6 %   38.0 %   38.8 %

(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.

        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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Summary of Third Quarter Results

        The following amounts are expressed in constant pesos as of September 30, 2006 and are based on unaudited data for the three months and nine months ended September 30, 2006. Mexican inflation during the third quarter of 2006 was 1.8%. Accordingly, although we do not consider the rate of inflation to be material, the following information for the three months and nine months ended September 30, 2006 is not directly comparable to the financial information presented elsewhere in this prospectus, which, unless otherwise stated, is presented in constant Mexican pesos as of June 30, 2006.

        The following table sets forth certain operating and financial data relating to our revenues and passenger and cargo volume for the periods indicated.

 
  Three months ended
September 30,

  Nine months ended
September 30,

 
 
  2005
  2006
  2005
  2006
 
Domestic terminal passengers(1)     2,191     2,429     6,069     6,771  
International terminal passengers(1)     556     522     1,894     1,958  
  Total terminal passengers(1)     2,747     2,951     7,963     8,729  
Cargo(1)     201     206     583     609  
Total workload units(1)     2,948     3,157     8,546     9,338  
Change in total terminal passengers(2)           7.4 %         9.6 %
Change in workload units(2)           7.1 %         9.3 %

Aeronautical revenue(3)

 

Ps.

286.8

 

Ps.

330.9

 

Ps.

848.5

 

Ps.

963.7

 
Change in aeronautical revenue(2)           15.4 %         13.6 %
Aeronautical revenue per workload unit   Ps. 97.3   Ps. 104.8   Ps. 99.2   Ps. 103.2  
Change in aeronautical revenue per workload unit(1)(2)           7.7 %         4.0 %

Non-aeronautical revenue(3)

 

Ps.

65.1

 

Ps.

74.6

 

Ps.

204.9

 

Ps.

226.9

 
Change in non-aeronautical revenue(2)           14.6 %         10.7 %
Non-aeronautical revenue per terminal passenger   Ps. 23.7   Ps. 25.3   Ps. 25.7   Ps. 26.0  
Change in non-aeronautical revenue per terminal passenger(2)           6.7 %         1.0 %

(1)
In thousands. One cargo unit is equivalent to 100 kilograms (220 pounds) of cargo. Under the regulation applicable to our 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.

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        The following table sets forth a summary of our consolidated results of operations for the periods indicated.

 
  Summary Consolidated Operating Results
 
 
  Three months ended September 30,
  Nine months ended September 30,
 
 
  2005
  2006
  2005
  2006
 
 
  Amount
  Amount
  % change
  Amount
  Amount
  % change
 
 
  (thousands of pesos, except percentages)

 
Revenues:                                  
Aeronautical services   Ps. 286,823   Ps. 330,964   15.3 % Ps. 848,531   Ps. 963,701   13.5 %
Non-aeronautical services     65,096     74,638   14.7 %   204,944     226,966   10.7 %
    Total revenues     351,919     405,602   15.2 %   1,053,475     1,190,667   13.0 %
Operating costs:                                  
  Cost of services     99,657     99,400   (0.3 )%   274,968     289,667   5.3 %
  General and administrative expenses     54,703     52,638   (3.8 )%   156,954     163,598   4.2 %
  Technical assistance fees     8,403     17,486   108.1 %   25,810     34,118   32.1 %
  Concession taxes     18,500     20,386   10.2 %   52,553     59,977   14.1 %
  Depreciation and amortization     53,989     59,912   10.9 %   160,608     179,500   11.7 %
    Total operating costs     235,252     249,555   6.1 %   670,893     726,860   8.3 %
      Income from operations     116,668     156,047   33.7 %   382,582     463,807   21.2 %
Net comprehensive financing income (expense):                                  
  Interest income, net     28,009     32,576   16.3 %   74,319     89,325   20.2 %
  Exchange gain (loss), net     879     (14,946 ) (1,800.3 )%   (17,548 )   19,273   (209.8 )%
  Monetary position loss     (14,986 )   (33,709 ) (124.9 )%   (24,749 )   (44,727 ) 80.7 %
      Net comprehensive financing income (expense)     13,902     (16,079 ) (215.6 )%   32,022     63,871   99.4 %
Other income     2,850     7,022   146.3 %   1,354     16,924   1149.9 %
Income before income taxes and statutory employee profit sharing     133,420     146,990   10.1 %   415,958     544,602   30.9 %
Income taxes and statutory employee profit sharing expense (benefit)     24,696     34,364   39.1 %   115,501     172,998   49.8 %
    Consolidated net income     108,726     112,626   3.6 %   300,457     371,604   23.6 %

Other operating data (unaudited):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
  Operating margin(1)     33.2 %   38.5 %       36.3 %   38.9 %    
  Net margin(2)     30.9 %   27.8 %       28.5 %   31.2 %    

(1)
Income from operations divided by total revenue, expressed as a percentage.

(2)
Net income divided by total revenues, expressed as a percentage.

        Our 13 airports served approximately 2.9 million terminal passengers during the three months ended September 30, 2006, a 7.4% increase over the three months ended September 30, 2005. Of our total terminal passengers during the three months ended September 30, 2006, 2.4 million were domestic passengers and 0.5 million were international passengers. Domestic and international passenger traffic for the three months ended September 30, 2006 was 10.9% higher and 6.1% lower, respectively, compared to the three months ended September 30, 2005.

        Our revenues increased 15.2% to Ps. 405.6 million for the three months ended September 30, 2006, as compared to Ps. 351.9 million for the three months ended September 30, 2005, reflecting increases in both aeronautical revenues and non-aeronautical revenues. Increases in aeronautical

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revenues were primarily due to increases in passengers paying passenger charges and air traffic movements. Increases in non-aeronautical revenues were primarily due to increases in revenue from car parking charges and, to a lesser extent, across-the-board increases in other non-aeronautical revenue.

        Our operating income increased 33.7% to Ps. 156.0 million for the three months ended September 30, 2006, as compared to Ps. 116.7 million for the three months ended September 30, 2005, principally reflecting the increase in revenues which offset a proportionately smaller increase in operating costs. Operating costs increased mainly as a result of increases in technical assistance fees, concession taxes and depreciation and amortization, which more than offset a decline in costs of services and general and administrative expenses.

        Our net income increased 3.6% to Ps. 112.6 million for the three months ended September 30, 2006, as compared to Ps. 108.7 million for the three months ended September 30, 2005, principally as a result of the increase in operating income discussed above coupled with a change from net comprehensive financing income in the 2005 period to net comprehensive financing expense in the 2006 period.

        At September 30, 2006, our cash and cash equivalents were Ps. 1,805 million. We did not have any debt at September 30, 2006.

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Summary Historical Results of Operations

        The following table sets forth a summary of our consolidated results of operations for the periods indicated.

 
  Summary Consolidated Operating Results
 
 
  Year ended December 31,
  Six months ended June 30,
 
 
  2003
  2004
  2005
  2005
  2006
 
 
  Amount
  Amount
  % change
  Amount
  % change
  Amount
  Amount
  % change
 
 
  (thousands of pesos, except percentages)

 
Revenues:                                            
Aeronautical services   Ps. 937,938   Ps. 1,010,305   7.7 % Ps. 1,111,493   10.0 % Ps. 552,028   Ps. 621,833   12.6 %
Non-aeronautical services     184,818     233,737   26.5 %   268,146   14.7 %   137,438     149,703   8.9 %
  Total revenues     1,122,756     1,244,042   10.8 %   1,379,639   10.9 %   689,466     771,536   11.9 %
Operating costs:                                            
  Cost of services     318,027     334,268   5.1 %   362,686   8.5 %   172,290     186,988   8.5 %
  General and administrative expenses     238,248     225,669   (5.3 )%   228,132   1.1 %   100,488     109,313   8.7 %
  Technical assistance fees     36,855     37,491   1.7 %   37,305   (0.5 )%   17,107     16,347   (4.5 )%
  Concession taxes     55,123     60,487   9.7 %   67,722   12.0 %   33,466     38,905   16.3 %
  Depreciation and amortization     187,382     201,227   7.4 %   212,375   5.5 %   104,782     117,527   12.2 %
    Total operating costs     835,635     859,142   2.8 %   908,220   5.7 %   428,133     469,080   9.6 %
      Income from operations     287,121     384,900   34.1 %   471,419   22.5 %   261,333     302,456   15.7 %
Net comprehensive financing income (expense):                                            
  Interest income, net     29,503     48,523   64.5 %   101,739   109.7 %   45,512     55,771   22.5 %
  Exchange gain (loss), net     32,049     (4,406 ) (113.7 )%   (24,653 ) 459.6 %   (18,109 )   33,629   (285.7 )%
  Monetary position loss     (37,398 )   (58,421 ) 56.2 %   (49,479 ) (15.3 )%   (9,596 )   (10,828 ) 12.8 %
    Net comprehensive financing income (expense)     24,154     (14,304 ) (159.2 )%   27,607   (293.0 )%   17,807     78,572   341.2 %
Other (expense) income     2,601     4,295   65.1 %   5,013   16.7 %   (1,472 )   9,732   (761.1 )%
Income before income taxes and statutory employee profit sharing     313,876     374,891   19.4 %   504,039   34.4 %   277,668     390,760   40.7 %
Income taxes and statutory employee profit sharing expense     135,618     87,501   (35.5 )%   148,746   70.0 %   89,240     136,244   52.7 %
    Consolidated net income     178,258     287,390   61.2 %   355,293   23.6 %   188,428     254,516   35.1 %

Other operating data (unaudited):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
  Operating margin(1)     25.6 %   30.9 %       34.2 %       37.9 %   39.2 %    
  Net margin(2)     15.9 %   23.1 %       25.8 %       27.3 %   33.0 %    

(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 six months ended June 30, 2006, compared to the six months ended June 30, 2005.

Revenues

        Total revenues for the first six months of 2006 were Ps. 771.5 million, 11.9% higher than the Ps. 689.5 million recorded in the first six months of 2005, as a result of increases in both aeronautical and non-aeronautical revenue.

        Aeronautical revenue increased 12.6% in the first six months of 2006, as compared to the first six months of 2005, due primarily to a 13.1% increase in passengers paying passenger charges and a 5.3% increase in air traffic movements, which resulted in increases in revenues from passenger charges, landing charges and aircraft parking charges of Ps. 65.1 million, Ps. 1.8 million and Ps. 1.9 million, respectively. Reflecting these volume increases, total workload units increased 10.4% in the first six

71



months of 2005 as compared to the first six months of 2006. Aeronautical revenue also benefited from increases in the specific rates we charge for aeronautical services. Aeronautical revenue per workload unit in the first six months of 2006 was Ps. 100.6 compared to Ps. 98.6 in the first six months of 2005, an increase of 2.0%.

        Non-aeronautical revenue increased 8.9% from Ps. 137.4 million in the first six months of 2005 to Ps. 149.7 million in the first six months of 2006, principally due to increases in revenue from car parking and, to a lesser extent, across-the-board increases in other non-aeronautical revenue. These increases were driven by the increase in passenger traffic at our airports. Non-aeronautical revenue per terminal passenger remained substantially the same in both periods, decreasing by 1.7% to Ps. 25.9 in the first six months of 2006, from Ps. 26.3 in the first six months of 2005.

Operating Results

        Cost of services increased 8.5% in the first six months of 2006, as compared to the first six months of 2005, mainly as a result of increases in various categories of expenses, including employee costs (from Ps. 58.8 million to Ps. 66.0 million), maintenance (from Ps. 19.8 million to Ps. 23.4 million) and utilities (from Ps. 38.0 million to Ps. 41.2 million). The increase in employee costs was attributable primarily to a 4.7% increase in personnel, while the increase in utilities resulted from increases in both the price and the consumption of electricity. Offsetting these sources of increases, safety, security and insurance expenses decreased 5.3%, from Ps. 34.0 million in the first six months of 2005 to Ps. 32.2 million in the first six months of 2006. As a percentage of total revenues, cost of services decreased from 25.0% of revenues in the first six months of 2005 to 24.2% of revenues in the first six months of 2006, reflecting the increase in revenues.

        General and administrative expenses increased 8.7% to Ps. 109.3 million in the first six months of 2006, from Ps. 100.5 million in the first six months of 2005, primarily due to increases in provisions, approximately Ps. 5 million of which was related to the Zihuatanejo administrative proceeding. Reflecting the increase in revenues, general and administrative expenses decreased from 14.6% of total revenues in the first six months of 2005 to 14.2% of total revenues in the first six months of 2006.

        Our technical assistance fee decreased 4.5% to Ps. 16.3 million in the first six months of 2006, as compared to Ps. 17.1 million in the first six months of 2005, as a result of greater out-of-pocket expenses during the first six months of 2005 than during the first six months of 2006 for which we were required to reimburse SETA under the technical assistance agreement. Our concession tax increased 16.1% from Ps. 33.5 million in the first six months of 2005 to Ps. 38.9 million in the first six months of 2006, reflecting the increase in revenues in the first six months of 2006.

        Our 12.2% increase in depreciation and amortization, from Ps. 104.8 million for the first six months of 2005 to Ps. 117.5 million for the first six months of 2006, was principally due to the increase in our property, plant and equipment, reflecting investments made pursuant to our master development programs during 2005.

        Operating income increased 15.7% to Ps. 302.5 million in the first six months of 2006, as compared to Ps. 261.3 million during the first six months of 2005. This increase primarily reflected the 11.9%

72


increase in our total revenues in the first six months of 2006, which was offset in part by a proportionately smaller increase in total operating costs. Our operating margin increased from 37.9% in the first six months of 2005 to 39.2% in the first six months of 2006.

        On an airport-by-airport basis, the principal contributors to the increase in operating income in the first six months of 2006 were our Monterrey International Airport (operating income increased 14.9% and operating margin increased from 55.2% to 55.7%), our Acapulco International Airport (operating income increased 38.6% and operating margin increased from 24.7% to 29.5%), our Mazatlán International Airport (operating income increased 13.0% and operating margin increased from 32.6% to 34.8%) and our Chihuahua International Airport (operating income increased 20.0% and operating margin increased from 29.6% to 31.4%). In the case of our Monterrey International Airport, Acapulco International Airport and Chihuahua International Airport, these increases were mainly attributable to the increases in terminal passenger volumes at those airports ranging from 13% to 19%; in the case of our Mazatlán International Airport, this increase was mainly attributable to the increase in terminal passenger volumes and a reduction of costs relative to revenues.

        Our net comprehensive financing result in the first six months of 2006 generated income of Ps. 78.6 million, as compared to income of Ps. 17.8 million in the first six months of 2005. This increase resulted primarily from the change from a foreign exchange loss of Ps. 18.1 million in the first six months of 2005 to a foreign exchange gain of Ps. 33.7 million in the first six months of 2006, as well as from an increase in interest income from Ps. 45.5 million in the first six months of 2005 to Ps. 55.8 million in the first six months of 2006. These increases were partially offset by a 13.5% increase in losses from monetary position, from Ps. 9.6 million in the first six months of 2005 to Ps. 10.9 million during the same period in 2006.

        The provision for income taxes and statutory employee profit sharing increased 52.7% to Ps. 136.2 million in the first six months of 2006, from Ps. 89.2 million in the first six months of 2005. This increase was attributable primarily to higher statutory employee profit sharing and an increase in our pre-tax income. Our effective rate increased from 32.1% in the first six months of 2005 to 25.3% in the first six months of 2006.

        Net income increased 35.1% during the first six months of 2006 to Ps. 254.5 million, from Ps. 188.4 million during the first six months of 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. 1,379.6 million, 10.9% higher than the Ps. 1,244.0 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. 83.3 million, Ps. 6.8 million and Ps. 2.2 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 charge for aeronautical services. Aeronautical revenue per workload unit in 2005 was Ps. 97.4 compared to Ps. 95.9 in 2004, an increase of 1.6%.

73



        Non-aeronautical revenue increased 14.7% from Ps. 233.7 million in 2004 to Ps. 268.4 million in 2005, principally due to increases in revenue from car parking charges, advertising, leasing of space and food and beverage operations. Non-aeronautical revenue per terminal passenger in 2005 was Ps. 25.3 compared to Ps. 24.0 in 2004, an increase of 5.4%.

Operating Results

        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. 112.2 million to Ps. 118.7 million), safety, security and insurance (from Ps. 61.6 million to Ps. 66.8 million), utilities (from Ps. 75.6 million to Ps. 80.9 million) and maintenance (from Ps. 44.5 million to Ps. 50.3 million). The increase in safety, security and insurance was due to increased security costs at certain of our airports, while the increase in utilities was attributable primarily to an increase in electricity rates. The increase in maintenance was due to maintenance activities for parking lots, taxiways and aprons at several airports. As a percentage of total revenues, cost of services decreased slightly from 26.9% of revenues in 2004 to 26.3% of revenues in 2005.

        General and administrative expenses remained substantially the same, increasing 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, reflecting the increase in revenues.

        Our technical assistance fee remained substantially unchanged, decreasing 0.5% to Ps. 37.3 million in 2005, as compared to Ps. 37.5 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. 60.5 million in 2004 to Ps. 67.7 million in 2005, reflecting the increase in revenues in 2005.

        Our 5.5% increase in depreciation and amortization, from Ps. 201.2 million for 2004 to Ps. 212.4 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.

        Operating income increased 22.5% to Ps. 471.4 million in 2005, as compared to Ps. 384.9 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 our Monterrey International Airport (operating income increased 16.3% and operating margin increased from 50.1% to 52.2%), our Culiacan International Airport (operating income increased 35.9% and operating margin increased from 27.0% to 31.3%) and our San Luis Potosi 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 improved margins in our Monterrey, Culiacan and Mazatlán International Airports.

74



Comprehensive Financing Result

        Our net comprehensive financing result changed in 2005 to income of Ps. 27.6 million, as compared to an expense of Ps. 14.3 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, Statutory Employee Profit Sharing and Asset Tax

        The provision for income taxes and statutory employee profit sharing and asset tax increased 70.0% in 2005, to Ps. 148.7 million, from Ps. 87.5 million in 2004. This increase was attributable primarily to the effect 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 us of Ps. 70.1 million in 2004, thereby reducing our overall income tax expense in that year. This was partially offset by a Ps. 20.4 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. 355.3 million, from Ps. 287.4 million for 2004, reflecting the factors described above.

Results of operations for the year ended December 31, 2004 compared to the year ended December 31, 2003

Revenues

        Total revenues for 2004 were Ps. 1,244.0 million, 10.8% higher than the Ps. 1,122.8 million recognized in 2003, as a result of increases in both aeronautical and non-aeronautical revenue.

        Aeronautical revenue increased 7.7% from Ps. 937.9 million in 2003 to Ps. 1,010.3 million 2004, due primarily to a 7.0% increase in passengers paying passenger charges and a 3.8% increase in air traffic movements, which resulted in increases in revenues from passenger charges, landing charges and aircraft parking charges of Ps. 55.4 million, Ps. 7.3 million and Ps. 4.4 million, respectively. These increases more than offset a 2.2% decrease in aeronautical revenue per workload unit, from Ps. 98.1 in 2003 to Ps. 95.9 in 2004, which resulted primarily from a 10.1% increase in total workload units increased from 2003 to 2004.

        Non-aeronautical revenue increased 26.5% from Ps. 184.8 million in 2003 to Ps. 233.7 million in 2004, principally due to increases in revenue from car parking reflecting our assuming the operations of the parking facilities at our Monterrey International Airport in March 2004 and at our Mazatlán International Airport in July 2004. Previously, these facilities had been operated by third parties. To a lesser extent, non-aeronautical revenue benefited from an increase of revenue from leasing of space, including leasing a warehouse to FedEx and a VIP lounge to American Express at our Monterrey International Airport. Non-aeronautical revenue per terminal passenger increased 15.0% from Ps. 20.9 in 2003 to Ps. 24.0 in 2004.

Operating Results

        Cost of services increased 5.1% from 2003 to 2004, mainly as a result of increases in various categories of expenses, including maintenance (from Ps. 41.0 million to Ps. 44.5 million) and safety, security and insurance (from Ps. 56.9 million to Ps. 61.6 million). The increase in maintenance was attributable primarily to scheduled maintenance activities and the increase in safety, security and

75


insurance was attributable to increased costs associated with checked baggage services, parking and security for the cargo terminal at our Monterrey International Airport. As a percentage of total revenues, cost of services decreased from 28.3% of revenues in 2003 to 26.9% of revenues in 2004 reflecting the increase in revenues.

        General and administrative expenses decreased 5.3% from 2003 to 2004, mainly as a result of decreases in various categories of expenses, including a decrease of in Ps. 4.7 million in the cost of leasing corporate office space attributable to the relocation of our corporate headquarters to property owned by us. As a percentage of total revenues, general and administrative expenses decreased from 21.2% of revenues in 2003 to 18.1% of revenues in 2004.

        Our technical assistance fee increased 1.7% to Ps. 37.5 million in 2004, as compared to Ps. 36.8 million in 2003, principally as a result of increases in reimbursable expenses in 2004 as compared to 2003. Our concession tax increased 9.7% from Ps. 55.1 million in 2003 to Ps. 60.4 million in 2004, reflecting the increase in revenues in 2004.

        Our 7.4% increase in depreciation and amortization, from Ps. 187.3 million for 2003 to Ps. 201.2 million for 2004, was mainly the result of an increase in our property, plant and equipment reflecting the investments made pursuant to our master development programs.

        Operating income increased 34.1% to Ps. 384.9 million in 2004, as compared to Ps. 287.1 million in 2003. This increase primarily reflected the 10.8% increase in our total revenues in 2004, which was offset in part by the proportionately smaller increase in total operating costs of 2.8%. Our operating margin increased from 25.6% in 2003 to 30.9% in 2004, reflecting the proportionately greater increase in our revenues relative to the increase in our total operating costs.

        On an airport-by-airport basis, the principal contributors to the increase in operating income in 2004 as compared to 2003 were our Monterrey International Airport (operating income increased 19.3% and operating margin increased from 48.1% to 50.1%), our Acapulco International Airport (operating income increased 477.0% and operating margin changed from (2.5)% to 9.1%), our Culiacan International Airport (operating income increased 53.8% and operating margin increased from 18.8% to 27.0%), our Mazatlán International Airport (operating income increased 50.0% and operating margin increased from 16.3% to 22.7%) and our Zihuatanejo International Airport (operating income increased 327.3% and operating margin increased from 5.2% to 19.0%). These increases were attributable primarily to increases in terminal passenger volumes at each of these airports and were also attributable, in the cases of our Monterrey International Airport, our Acapulco International Airport, our Culiacan International Airport and our Mazatlán International Airport, to improved margins.

Comprehensive Financing Result

        Our net comprehensive financing result changed to an expense of Ps. 14.3 million in 2004, as compared to income of Ps. 24.1 million in 2003. This change resulted primarily from the change from a foreign exchange gain of Ps. 32.0 million in 2003 to a foreign exchange loss of Ps. 4.4 million in 2004. In addition, losses from monetary position increased 56.2% in 2004. The increased loss from monetary position was principally the result of higher inflation in 2004 (5.2% as compared to 4.0% in 2003).

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These trends were partially offset by a 64.5% increase in interest income, to Ps. 48.5 million in 2004 from Ps. 29.5 million in 2003, which resulted mainly from our higher average cash balances during 2004.

Income Taxes, Statutory Employee Profit Sharing and Asset Tax

        The provision for income taxes and statutory employee profit sharing and asset tax decreased 35.5% in 2004, to Ps. 87.5 million, from Ps. 135.6 million in 2003. This decrease was attributable primarily to the effect on deferred taxes of decreases in statutory income tax rates (from 34% in 2003 to 33% in 2004), which resulted in a Ps. 70.1 million deferred tax benefit in 2004.

Net Income

        Net income increased 61.2% in 2004, to Ps. 287.3 million, from Ps. 178.3 million for 2003, 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. At December 31, 2005 and June 30, 2006, we had Ps. 1,591.0 million and Ps. 1,983.2 million, respectively, of cash and cash equivalents. After giving effect to (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) our payment of a dividend of Ps. 423.9 million in September 2006, our cash and cash equivalents at June 30, 2006 would have been Ps. 1,677.0 million. We believe our working capital and resources expected to be generated from operations will be sufficient to meet our requirements within the next twelve months.

        We will not receive any proceeds from the global offering, as the net proceeds will be paid to the selling stockholder.

        In the first six months of 2006, we generated Ps. 524.6 million in resources from operating activities, as compared to Ps. 339.3 million in the first six months of 2005, principally reflecting the improvement in our income from operations discussed above under "—Results of operations for the six months ended June 30, 2006, compared to six months ended June 30, 2005—Operating Results." We used no resources in financing activities during the first six months of 2006. Our resources used in investing activities in the first six months of 2006 were Ps. 66.9 million, mainly for the purchase of capital assets as summarized below in the table "Historical Capital Expenditures by Type."

        In 2005, we generated Ps. 653.9 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. 273.6 million, mainly for the purchase of capital assets as summarized below in the table "Historical Capital Expenditures by Type."

        In 2004, we generated Ps. 569.6 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. 260.0 million, mainly for the purchase of capital assets as summarized below in the table "Historical Capital Expenditures by Type."

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        In 2003, we generated Ps. 488.3 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 and deferred income tax. We used no resources in financing activities in 2003. Our resources used in investing activities in 2003 were Ps. 362.8 million, mainly for the purchase of capital assets as summarized below in the table "Historical Capital Expenditures by Type."

        In December 2005, in order to finance its acquisition from the Mexican government of Series B shares currently representing 35.3% of our capital stock, Aeroinvest entered into a U.S. $125 million loan agreement with WestLB AG that matures in May 2007. Aeroinvest may prepay the loan at any time without penalty. The loan is secured by a guaranty trust holding the acquired Series B shares. Aeroinvest has the right to direct the voting of the shares held in the guaranty trust so long as no event of default has occurred and is ongoing. In addition, Aeroinvest is required to maintain at least its present ownership interest in SETA and us, ensure that SETA maintains its present ownership interest in us and maintain a minimum interest expense to EBITDA ratio. In connection with SETA's assignment to Aeroinvest of the option to purchase the Series B shares from the Mexican government, Aeroinvest agreed with SETA and Aéroports de Paris Management to vote the Series B shares held in the guaranty trust in the manner that SETA votes its Series BB shares. In addition, Aeroinvest entered into a separate loan agreement with WestLB AG for U.S. $15 million, which was recently amended and restated to, among other things, increase the amount of the loan by U.S. $40 million, for a total of U.S. $55 million, in order to provide Aeroinvest with additional liquidity for working capital and general corporate purposes. On October 25, 2006, Halkin Finance Plc, an affiliate of Merrill Lynch & Co., purchased both of these loans, which we refer to as the Aeroinvest Loans, from WestLB through an assignment agreement with respect to each loan agreement. The U.S. $55 million loan agreement includes a cross-default provision whereby an event of default by Aeroinvest under the U.S. $125 million loan agreement would constitute an event of default under the U.S. $55 million loan agreement. As a result of the aforementioned assignment agreements, Halkin Finance Plc would be entitled to foreclose on the Series B shares held in the guaranty trust if Aeroinvest defaults on its obligations under the U.S. $125 million loan agreement.

        Aeroinvest's subsidiaries, including us, are obligated under the terms of the Aeroinvest Loans to comply with certain covenants, including the following:

The Aeroinvest Loans also provide that, in the event of certain property damage or other impairment of assets, Aeroinvest and its subsidiaries apply any insurance proceeds that are not reinvested in their business to the prepayment of the Aeroinvest Loans. As a result of the Aeroinvest Loans, we believe Aeroinvest would be required to obtain a waiver or amendment from Halkin Finance plc to permit us to incur any material amount of indebtedness, and there can be no assurance that such a waiver or amendment would be obtained.

        Aeroinvest is currently negotiating with creditors seeking to refinance the Aeroinvest Loans. Any such refinancing could impose similar or more onerous restrictions on us.

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        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. Each master development program includes investment commitments (including capital expenditures and improvements) applicable to us as a concession holder for the succeeding five-year period. Once approved by the Ministry of Communications and Transportation, these commitments become binding obligations under the terms of our concessions. In December 2005, the Ministry of Communications and Transportation approved our master development programs for each of our airports for the 2006 to 2010 period. These five-year programs will be in effect from January 1, 2006 until December 31, 2010.

        We have complied with the investment obligations set forth in our master development programs for each of our airports for the 2001 to 2005 period. The Ministry of Communications and Transportation will periodically conduct a review of our compliance with the obligations of our master development plan for 2006-2010. If the Ministry of Communications and Transportation determines that we did not comply with our obligations under each of our master development programs, we may be subject to sanctions.

        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.

        The following table sets forth our historical committed investments for each airport from 2001 to 2005 under our master development programs.


Historical Committed Investments Under Master Development Programs

 
  Year ended December 31,
 
  2001
  2002
  2003
  2004
  2005
  Total 2001-2005
 
  (thousands of pesos)

Acapulco   Ps. 6,964   Ps. 22,186   Ps. 23,332   Ps. 22,508   Ps. 9,580   Ps. 84,571
Ciudad Juárez     31,316     26,650     473     23,846     23,307     105,593
Culiacán     85,441     12,736         9,350     7,081     114,607
Chihuahua     9,216     34,584     30,294     26,915     29,683     130,693
Durango     3,528     23,335     14,524     6,817     6,676     54,881
Mazatlán     57,213     18,890     689     7,091     4,803     88,687
Monterrey     82,316     107,332         13,138     46,388     249,173
Reynosa     14,787     21,024     628     2,954     15,583     54,976
San Luis Potosí     7,514     4,098     9,588     4,757     5,392     31,349
Tampico     1,895     21,965     13,551     4,322     2,350     44,084
Torreón     3,701     17,429     49,127     45,319     35,764     151,340
Zacatecas     1,121     6,596     14,660     11,076     3,328     36,781
Zihuatanejo     14,149     20,883     26,167     585     40,582     102,366
   
 
 
 
 
 
  Total   Ps. 319,160   Ps. 337,709   Ps. 183,034   Ps. 178,679   Ps. 230,519   Ps. 1,249,101
   
 
 
 
 
 

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        The following table sets forth our historical capital expenditures, which reflect our actual expenditures (as compared to our committed investments, which are presented above) by airport for the periods indicated.


Historical Capital Expenditures by Airport

 
  Year ended December 31,
  Six months ended June 30,
 
  2003
  2004
  2005
  2005
  2006
 
  (thousands of pesos)

Acapulco   Ps. 35,923   Ps. 32,672   Ps. 12,698   Ps. 1,707   Ps. 8,724
Ciudad Juárez     20,390     15,022     24,571     5,753     10,341
Culiacán     6,969     12,186     6,737     965     14,075
Chihuahua     50,622     24,136     26,226     11,583     17,913
Durango     13,056     7,052     7,212     1,676     673
Mazatlán     9,602     7,496     8,480     662     3,152
Monterrey     82,773     77,055     60,525     14,230     32,439
Reynosa     15,410     8,413     16,107     4,384     2,277
San Luis Potosí     8,751     2,617     37,242     7,091     7,840
Tampico     17,084     6,700     2,559     517     6,496
Torreón     38,483     41,654     36,704     14,526     11,920
Zacatecas     14,701     17,643     3,283     503     2,695
Zihuatanejo     29,591     3,967     27,983     2,604     12,406
Other     19,437     3,431     3,308     648     1,442
   
 
 
 
 
  Total   Ps. 362,792   Ps. 260,044   Ps. 273,635   Ps. 66,849   Ps. 132,393
   
 
 
 
 

        The following table sets forth our historical capital expenditures by type of investment across all of our airports for the periods indicated:


Historical Capital Expenditures by Type

 
  Year ended December 31,
  Six months ended June 30,
 
  2003
  2004
  2005
  2005
  2006
 
  (thousands of pesos)

Terminals   Ps. 265,962   Ps. 159,837   Ps. 93,492   Ps. 46,732   Ps. 52,543
Runways and aprons     43,829     73,536     125,295     7,733     71,613
Machinery and equipment     26,168     16,753     47,499     10,193     5,824
Other     26,833     9,918     7,349     2,191     2,413
   
 
 
 
 
  Total   Ps. 362,792   Ps. 260,044   Ps. 273,635   Ps. 66,849   Ps. 132,393
   
 
 
 
 

        Our capital expenditures from 2003 through 2005 were allocated to the following types of investments at the majority of our airports:

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        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. For a discussion of the regulations applicable to our compliance with our master development programs, see "Regulatory Framework—Master Development Programs."


Committed Investments by Airport

 
  Year ended December 31,
 
  2006
  2007
  2008
  2009
  2010
  Total
2006–2010

 
  (thousands of pesos)

Acapulco   Ps. 88,420   Ps. 38,422   Ps. 26,286   Ps. 12,259   Ps. 12,429   Ps. 117,816
Ciudad Juárez     42,343     31,668     18,583     16,108     10,087     118,789
Culiacán     56,344     12,419     7,014     18,730     2,005     96,512
Chihuahua     65,245     7,965     25,405     6,379     8,654     113,648
Durango     15,662     24,249     16,813     19,901     7,657     84,282
Mazatlán     81,878     23,690     8,463     15,744     1,864     131,639
Monterrey     285,767     225,739     217,143     69,975     19,841     818,465
Reynosa     16,864     16,545     9,495     7,788     1,454     52,146
San Luis Potosí     22,768     11,168     17,108     20,407     2,573     74,024
Tampico     36,574     19,759     10,316     12,957     3,732     83,338
Torreón     15,871     8,900     25,465     5,208     6,755     62,199
Zacatecas     15,305     11,697     3,748     20,265     6,470     57,485
Zihuatanejo     66,071     12,304     17,864     23,056     10,809     130,104
   
 
 
 
 
 
  Total   Ps. 809,110   Ps. 444,525   Ps. 403,703   Ps. 248,777   Ps. 94,330   Ps. 2,000,445
   
 
 
 
 
 

        The following table sets forth our committed investments for 2006 through 2010 by type of investment:


Committed Investments by Type

 
  Year ended December 31,
 
  2006
  2007
  2008
  2009
  2010
  Total
2006-2010

 
  (thousands of pesos)

Terminals   Ps. 98,803   Ps. 97,050   Ps. 195,363   Ps. 53,155   Ps. 13,218   Ps. 457,589
Runways and aprons     239,869     204,868     158,963     144,267     58,281     806,248
Machinery and equipment     60,215     73,801     40,786     45,665     22,831     243,298
Baggage screening system—investments     403,966     56,763                 460,729
Other     6,257     12,043     8,591     5,690         32,581
   
 
 
 
 
 
  Total   Ps. 809,110   Ps. 444,525   Ps. 403,703   Ps. 248,777   Ps. 94,330   Ps. 2,000,445
   
 
 
 
 
 

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        For the six-month period ended June 30, 2006, our capital expenditures totaled Ps. 132 million. We estimate that our total capital expenditures for 2006 will amount to approximately Ps. 944 million. We anticipate that our capital expenditures for 2006 will be devoted primarily to our committed investments and secondarily to the construction of a new passenger terminal.

        We expect to fund our operations and capital expenditures in the short-term and long-term through cash flows from operations, although we may incur indebtedness from time to time.

Critical Accounting Policies

        We prepare our consolidated financial statements in conformity with Mexican GAAP. 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 our 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 audited consolidated financial statements. We believe our most critical accounting policies that result in the application of estimates and/or judgments are the following:

        In conformity with Bulletin D-4, Accounting for Income Tax, Asset Tax and Statutory Employee Profit Sharing, of Mexican GAAP, 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 carryforwards. The resulting deferred tax provision or benefit is reflected in our statement of operations. 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.

        The calculation and recognition of deferred taxes and the related valuation allowance 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 probable of being realized. Any change in our estimates may have an effect on our financial condition and results of operations.

        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. 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 on the net sales price upon disposal. Present value of future net cash flows is based on management's projections of future operations, discounted using current interest rates. 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.

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Principal Differences Between Mexican GAAP and U.S. GAAP

        Our consolidated financial statements are prepared in accordance with Mexican GAAP, which differs in certain respects from U.S. GAAP.

        The principal differences between Mexican GAAP 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. See Note 19 to our audited consolidated financial statements and Note 18 to our unaudited interim financial statements for the six-month periods ended June 30, 2006 and 2005, for a discussion of these differences and the effect on our consolidated results of operations.

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

  Total
  Less than
1 year(2)

  1-3 years
  3-5 years
  More than
5 years

 
  (in millions of pesos)

Master development programs   Ps. 2,000   Ps. 809   Ps. 848   Ps. 343     N/A(3)
Purchase obligations(1)     294     17     69     69     139     
Total   Ps. 2,294   Ps. 826   Ps. 917   Ps. 412   Ps. 139     
   
 
 
 
 

(1)
Reflects minimum fixed annual payment of U.S. $3 million required to be paid under our 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 our profitability.

(2)
Amount for less than one year corresponds to obligations for the remainder of 2006.

(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. For a description of our master development programs, see "Regulatory Framework—Master Development Programs."

Quantitative and Qualitative Disclosures About Market Risk

        We are exposed to market risk from changes in currency exchange rates.

        Our principal exchange rate risk involves changes in the value of the peso relative to the dollar. Historically, a significant portion of the revenues generated by our airports (principally derived from passenger charges for international passengers) has been denominated in or linked to the U.S. dollar, although such revenues are collected in pesos based on the average exchange rate for the prior month. In 2003, 2004, 2005 and the first six months of 2006, approximately 14.2%, 15.1%, 16.4% and 18.2%, respectively, of our consolidated revenues were derived from passenger charges for international passengers. Substantially all of our other revenues are denominated in pesos. We estimate that substantially all of our consolidated costs and expenses are denominated in pesos (other than the technical assistance fee, to the extent paid based on the fixed minimum annual payment). Based upon a 10% depreciation of the peso compared to the U.S. dollar as of December 31, 2005, we estimate that our revenues would have decreased by Ps. 23 million.

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        As of December 31, 2003, 2004, 2005 and June 30, 2006, 46.7%, 42.4%, 31.3% and 27.9%, respectively, of our cash and cash equivalents were denominated in dollars. Based upon a 10% depreciation of the peso compared to the U.S. dollar as of December 31, 2005, we estimate that the value of our cash and cash equivalents would have increased by Ps. 50 million.

        We did not have any foreign currency indebtedness at December 31, 2003, 2004 and 2005 and at June 30, 2006. In the event that we incur foreign currency denominated indebtedness in the future, decreases in the value of the peso relative to the dollar will increase the cost in pesos of servicing such indebtedness. Depreciation of the peso relative to the dollar would also result in foreign exchange losses as the peso value of our foreign currency denominated indebtedness is increased.

        At December 31, 2003, 2004 and 2005 and at June 30, 2006, we did not have any outstanding forward foreign exchange contracts.

        For a discussion of the effects of devaluation and inflation on our results of operations, see "—Effects of Devaluation and Inflation."

New Accounting Pronouncements

        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 renamed the standards of Mexican GAAP as Normas de Información Financiera, or Financial Reporting Standards, and determined that the Financial Reporting Standards would encompass (i) new bulletins established under the new function; (ii) any interpretations issued thereon; (iii) any Mexican GAAP bulletins that have not been amended, replaced or revoked by the new Financial Reporting Standards; and (iv) International Financial Reporting Standards, or IFRS, that are supplementary guidance to be used when Mexican GAAP 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 GAAP 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. The CF consists of eight financial reporting standards, which comprise the Financial Reporting Standards-A series. The Financial Reporting Standards-A series, together with Financial Reporting Standards B-1, were issued on October 31, 2005. Their provisions are effective for years beginning January 1, 2006 and thereafter, and supersede all existing Mexican GAAP series A bulletins.

        The new Financial Reporting Standards are as follows:

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        The most significant changes established by these standards are as follows:

        We have not fully assessed the effects of adopting these new standards on our financial information.

        On January 1, 2006, we adopted Statement of Financial Accounting Standards, or SFAS No. 123 (revised 2004), "Share-Based Payments" issued by the Financial Accounting Standards Board, or the FASB. SFAS No. 123 eliminated the option to apply the intrinsic value measurement provisions of Accounting 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. 153, "Exchanges of Nonmonetary Assets—an amendment of APB Opinion No. 29," which amended APB Opinion No. 29, "Accounting for Nonmonetary Transactions," to eliminate the exception for nonmonetary exchanges of similar productive assets and replaced it with a general exception for exchanges of nonmonetary asset that do not have commercial substance. The adoption of SFAS No. 153 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

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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.

        On January 1, 2006, we adopted Financial Staff Position, or FSP, FAS 115-1 and FAS 124-1, "The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments," which nullified certain requirements of EITF No. 03-1, "The Meaning of Other-Than Temporary Impairment and Its Application to Certain Investments" and superseded Emerging Issues Task Force, or EITF, Issue Topic No. D-44, "Recognition of Other-Than-Temporary Impairment Upon the Planned Sale of a Security whose Cost Exceeds Fair Value." The adoption of this guidance did not have a material effect on our financial position, results of operations or cash flows.

        On January 1, 2006, we adopted EITF 05-6, "Determining the Amortization Period for Leasehold Improvements Purchased after Lease Inception or Acquired in a Business Combination," which provided additional guidance related to the appropriate amortization periods for leasehold improvements either acquired in a business combination or which were not preexisting and were placed in service significantly after, and not contemplated at, the beginning of the lease term. Leasehold improvements acquired in a business combination or which were not preexisting and were placed in service significantly after, and not contemplated at the beginning of the lease term should be amortized over the shorter of the useful life of the assets or a term that includes required lease periods and renewals that are deemed to be reasonably assured at the date of acquisition of the business combination or at the date the leasehold improvements are purchased. The adoption of EITF 05-6 did not have a material effect on our financial position, results of operations or cash flows.

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BUSINESS

Introduction

        We were incorporated in 1998 as part of the Mexican government's program for the opening of Mexico's airports to private investment. We hold concessions to operate, maintain and develop 13 airports in Mexico, which are concentrated in the central and northern regions of the country. 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 additional years. As operator of the 13 airports under our concessions, we charge airlines, passengers and other users fees 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.

Our Operations

        We operate 13 airports, which serve a major metropolitan area (Monterrey), 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 9 of the 31 Mexican states, covering a territory of approximately 926,421 square kilometers (approximately 575,667 square miles), with a population of approximately 24.0 million according to the National Institute of Statistics, Geography and Informatics 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 maintain customs and immigration services managed by the Mexican government, as well as refueling services. All of our airports have received environmental compliance certificates. In addition, six of our airports, including our Monterrey International Airport, have received ISO 9000 service and quality certification, and we expect that the remaining seven of our airports will apply for such certification during 2006.

        According to figures published by the Mexican Bureau of Civil Aviation, our commercial aviation passenger traffic accounted for approximately 15.3% of all arriving and departing commercial aviation passengers in Mexico in 2005.

        In 2005, we recorded revenues of Ps. 1,379 million (U.S. $122 million) and net income of Ps. 355 million (U.S. $31 million). In the first six months of 2006, we recorded revenues of Ps. 772 million (U.S. $68 million) and net income of Ps. 255 million (U.S. $22 million). Our airports handled approximately 10.6 million terminal passengers in 2005. In the first six months of 2006, our airports handled approximately 5.8 million terminal passengers.

        Our airports serve several major international routes, including Monterrey-Houston, Monterrey-Dallas and Monterrey-Madrid, as well as 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 2005, with approximately 1.9 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 Culiacan-Tijuana, according to the Mexican Bureau of Civil Aviation.

        The amended bilateral aviation agreement between Mexico and the United States, which took effect in July 2006, 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 our airports in 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

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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 four of our airports as a result of the amended bilateral aviation agreement.

        The Mexican government recently awarded domestic airlines licenses to several new low-cost and other carriers, including Interjet, Avolar, Volaris and Click Mexicana, the discount carrier subsidiary of the Mexicana Group. These carriers recently announced a total of 16 new routes serving our airports, which we anticipate will increase our domestic passenger traffic. We are in discussions with these and other carriers to add further routes at our airports. In addition, the low-cost carrier Viva Aerobus has recently announced that it intends to locate its corporate and operational headquarters and maintenance facilities at our Monterrey International Airport. It has also announced that it expects to begin operating nine routes in December 2006 and to be operating a total of 24 routes serving 12 of our airports by April 2007. Thirteen of these routes are expected to be to destinations not previously served by our Monterrey International Airport.

        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. We believe that both the economic growth of the city of Monterrey and corresponding passenger traffic growth at our Monterrey International Airport are closely linked to Mexico's economic performance. The airport is our leading airport in terms of passenger traffic volume, air traffic movements and contribution to revenues, and ranked fourth among the top ten busiest airports in Mexico based on passenger traffic volume in 2005, according to data published by the Mexican Bureau of Civil Aviation. Monterrey International Airport accounted for approximately 43.9% and 43.2%, of our terminal passenger traffic in 2005 and the first six months of 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 2005, according to the Mexican National Institute of Immigration. Acapulco is a principal port of embarkation and disembarkation for cruise ships. In 2005 and the first six months of 2006, our Acapulco International Airport, our Mazatlán International Airport and our Zihuatanejo International Airport collectively accounted for 21.6% and 24.7%, respectively, of our aggregate terminal passengers and 22.1% and 25.1%, respectively, of our total revenues.

        Mexico was the eighth largest tourist destination in the world in 2005 in terms of international arriving tourists (24 million), according to the World Tourism Organization. Within Latin America and the Caribbean, Mexico ranked first in 2005 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 (San Luis Potosí). In 2005 and the first six months of 2006, these seven regional airports collectively accounted for 27.3% and 25.3%, respectively, of our aggregate terminal passengers and 28.0% and 25.8%, respectively, of our total revenues.

        The remaining two airports in our group, Ciudad Juárez International Airport and Reynosa International Airport, serve cities situated along the border of Mexico and the United States. Both

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Ciudad Juárez and Reynosa are popular entry points to the United States. In 2005 and the first six months of 2006, our Ciudad Juárez International Airport and our Reynosa International Airport collectively accounted for 7.2% and 6.8%, respectively, of our aggregate terminal passengers and 6.4% and 6.0%, respectively, of our total revenues.

Opening of Mexican Airports to Investment

        In February 1998, the Mexican government issued the Investment Guidelines for the Opening of Investment in the Mexican Airport System. Under these guidelines, the Ministry of Communications and Transportation identified 35 of Mexico's 58 principal airports as being suitable for investment. These 35 airports were divided into four groups: the Central North Group (consisting of our 13 airports), Grupo Aeroportuario del Pacifico, or the Pacific Group (consisting of 12 airports), Grupo Aeroportuario del Sureste, or the Southeast Group (consisting of nine airports), and Grupo Aeroportuario de la Ciudad de Mexico, D.F., or the Mexico City Group (currently consisting of one airport). The guidelines generally provide for the airport groups to become open to investment through a two-stage program.

        In the first stage, a series of public bidding processes were conducted to award a minority interest in each airport group (except the Mexico City Group) to a strategic stockholder. In the second stage, all or a portion of the remaining interest in each airport group is proposed to be sold through public offerings in the Mexican and international capital markets. To date, the government has completed the first stage and this global offering represents the final stage of the opening of our airports to investment. In 1998, a 15% interest in the Southeast Group was awarded to a consortium including Copenhagen Airports, A/S, the Danish airport operator, and in 1999, a 15% interest in the Pacific Group was awarded to a consortium of Spanish and Mexican investors. The Southeast Group conducted the second stage with a global public offering of shares and ADSs in September 2000 and, in March 2005, sold the remaining 11.08% held by the Mexican government in a local public offering of shares in Mexico. The Pacific Group conducted the second stage with a global public offering of shares and ADSs in February 2006.

        As a result of the opening of Mexico's airports to investment, we and our subsidiaries are no longer subject to the Mexican regulations applicable to companies that are wholly owned by the Mexican government. We believe that this provides us greater flexibility to develop and implement our business strategy and to respond to potential business opportunities.

        In 2000, as part of the first stage in the process of opening Mexico's airports to private investment, the Mexican government sold Series BB shares currently representing 14.7% of our capital stock to SETA, pursuant to a public bidding process. In December 2005, Aeroinvest acquired Series B shares currently representing 35.3% of our capital stock pursuant to the assignment by SETA of its option under the participation agreement between the Mexican government and SETA. SETA subsequently exercised an option to subscribe for 2% of newly issued Series B shares and subscribed for such shares in September 2006. This offering is the final stage of the opening of our airports to private investment.

        SETA's current stockholders are:

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        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 SETA 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:


Our Sources of Revenue

Aeronautical Services

        All of our revenues from aeronautical services are regulated under the dual-till price regulation system applicable to our airports. In 2005 and the first six months of 2006, aeronautical services revenues represented approximately 80.6% of our total revenues.

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        Our revenues from aeronautical services are derived principally from the charges listed below. Aeronautical 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.

        We earn a passenger charge for each departing passenger on an aircraft (other than diplomats, infants and transfer and transit passengers). 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 we 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 our 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 the first six months of 2006, the weighted average term of payment was 103 days.

        Although the Ministry of Communications and Transportation may authorize an increase in our maximum rates, we must negotiate with our principal airline customers the specific rates applicable to each regulated activity. As a result, we may not be able to implement increases up to the amount of these maximum rates. See "Risk Factors—Risks Related to Our Operations."

        International passenger charges are currently dollar-denominated, but are collected in pesos based on the average exchange rate during the month prior to the flight. Domestic passenger charges are peso-denominated. In 2005 and the first six months of 2006, passenger charges represented approximately 70.2% and 72.0%, respectively, of our aeronautical services revenues and approximately 56.6% and 58.0%, respectively, of our total revenues. Passenger charges vary at each of our airports and based on the destination of each flight. Passenger charges for international flights are denominated in U.S. dollars and 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.

        We collect landing charges from carriers for their use of our runways and taxiways, illumination systems on the runways 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 2005 and the first six months of 2006, these charges represented approximately 9.5% and 8.7%, respectively, of our aeronautical services revenues and approximately 7.6% and 7.0%, respectively, of our total revenues.

        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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        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 2005 and the first six months of 2006, these charges represented approximately 7.6% and 7.1% respectively, of our aeronautical services revenues and 6.1% and 5.7%, respectively, of our total revenues.

        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 2005 and the first six months of 2006, these charges represented approximately 2.3% and 1.9%, respectively, of our aeronautical services revenues and approximately 1.9% and 1.6%, respectively, of our total revenues.

        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 2005 and the first six months of 2006, these charges represented approximately 1.5% of our aeronautical services revenues and approximately 1.2% 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 have reinforced our security by:

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        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 law, 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 our airline customers' compliance with the new baggage screening guidelines. Until the new screening equipment becomes operational, checked baggage will continue to be screened by hand in order to comply with the new screening guidelines. Although airlines are responsible for checked baggage under Mexican law, we could be exposed to liability as a result of our involvement in the screening process.

        At each of our airports, we earn revenues from charging access and other fees from third-party providers of baggage handling services, catering services, aircraft maintenance and repair and fuel at our airports. These access fees are included in the revenues that are regulated under our dual-till price regulation system and are determined for each third-party service provider based on a percentage of their total revenues. In 2005 and the first six months of 2006, revenues from these access fees represented approximately 2.3% and 2.6%, respectively, of our 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 the 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 a third party to provide such services.

        The Mexican Airport and Auxiliary Services Agency maintains an exclusive contract to sell fuel at all of our airports and we charge 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 Petroleos Mexicanos, or PEMEX. In the event that the Mexican government privatizes fuel supply activities in the future, the terms of our concessions provide that it will do so through a competitive bidding process.

        In addition, we derive aeronautical revenue from leasing space in our airports to airlines that is necessary for their operations, such as ticket counters, monitors and back 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.

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        In 2005 and the first six months of 2006, our 13 airports handled approximately 80 thousand metric tons of cargo and 41 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 regulated 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.

        We receive revenues from ground transportation vehicles and taxi companies who pay an access fee to operate on our airports' 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

        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, although the contribution to our total revenues from non-aeronautical services has increased in recent years from approximately 16.5% in 2003 to approximately 19.4% in the first six months of 2006. Similarly, non-aeronautical revenue per terminal passenger increased from 20.9 to 25.9 in the same period. 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.

        None of our revenues from non-aeronautical services are regulated under our dual-till price regulation system, though they may be regulated by other authorities. For example, our parking facilities may be subject to certain municipal regulations.

        As the main part of our business strategy, since we took over control of our airports, we have made it a priority to increase our revenues from commercial activities 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 total revenues in 2000 to nearly 20% in 2005, due primarily to the following initiatives:

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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 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:

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Our Airports

        In 2005 and the first six months of 2006, our airports served a total of approximately 10.6 million and 5.8 million terminal passengers, respectively. Monterrey International Airport accounted for approximately 44.4% and 43.2% of our terminal passenger traffic in 2005 and the first six months of 2006, respectively. Acapulco International Airport, Mazatlán International Airport and Culiacán International Airport, our main airports servicing the next most popular destinations in our group, collectively accounted for approximately 23.1% and 24.4% of our terminal passenger traffic in 2005 and the first six months of 2006, respectively. Ciudad Juárez International Airport, our largest airport servicing a border city, accounted for approximately 5.8% and 5.7% of our terminal passenger traffic in 2005 and the first six months of 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 for each of our airports for the periods indicated:

Passenger Traffic

 
  Year ended December 31,

 
  2001

  2002

  2003

  2004

  2005

 
  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   940,197   9,995   950,192   793,420   13,914   807,334   774,349   34,704   809,053   821,301   35,353   856,654   880,190   39,291   919,481
Chihuahua   515,154   92,381   607,535   511,625   78,393   590,018   541,531   88,885   630,416   556,074   95,271   651,345   599,977   79,932   679,909
Ciudad Juárez   553,793   4,741   558,534   524,393   4,785   529,178   549,476   3,643   553,119   570,923   5,596   576,519   611,942   31,032   642,974
Culiacán   571,578   216,487   788,065   583,134   197,823   780,957   620,511   137,669   758,180   673,002   100,189   773,191   769,118   118,238   887,356
Durango   214,020   57,308   271,328   193,110   53,484   246,594   188,212   37,944   226,156   210,774   44,885   255,659   214,920   47,334   262,254
Mazatlán   828,738   137,223   965,961   710,273   102,447   812,720   703,320   87,535   790,855   741,267   89,918   831,185   799,801   106,125   905,926
Monterrey   3,479,221   250,808   3,730,029   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
Reynosa   161,576   6,482   168,058   149,391   1,411   150,802   150,059   2,049   152,108   145,075   2,508   147,583   146,250   1,777   148,027
San Luis Potosí   178,705   6,576   185,281   172,313   5,601   177,914   173,073   3,281   176,354   195,700   3,875   199,575   233,610   832   234,442
Tampico   357,081   10,379   367,460   327,627   13,128   340,755   331,124   15,784   346,908   333,696   12,687   346,383   402,122   13,292   415,414
Torreón   355,497   77,736   433,233   333,894   86,297   420,191   333,166   95,247   428,413   361,40   109,324   470,724   374,559   91,188   465,747
Zacatecas   254,224   77,218   331,442   235,033   60,841   295,874   230,241   64,433   294,674   236,692   57,040   293,732   297,137   72,469   369,606
Zihuatanejo   642,735   10,893   653,628   572,746   5,525   578,271   554,516   6,508   561,024   599,720   5,104   604,824   608,897   4,062   612,959
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Total   9,052,519   958,227   10,010,746   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
   
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Year ended December 31,
 
  2001
  2002
  2003
  2004
  2005
 
  Domestic
  International
  Total
  Domestic
  International
  Total
  Domestic
  International
  Total
  Domestic
  International
  Total
  Domestic
  International
  Total
Terminal departing passengers:                                                    
Acapulco   264,186   221,889   486,075   246,359   159,449   405,808   244,661   152,996   397,657   251,552   168,251   419,803   256,715   192,531   449,246
Chihuahua   223,581   30,771   254,352   225,305   28,646   253,951   241,902   27,887   269,789   248,329   28,232   276,561   261,361   36,808   298,169
Ciudad Juárez   238,646   1,039   239,685   230,769   940   231,709   248,468   832   249,300   256,713   795   257,508   272,641   878   273,519
Culiacán   263,482   24,400   287,882   273,998   19,886   293,884   294,465   22,257   316,722   313,146   26,754   339,900   365,805   25,748