##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 20-F
 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended December 31, 2006
 Commission File Number: 1-33168
 Grupo Aeroportuario del Centro Norte, S.A.B. de C.V.
  Central North Airport Group
    
    United Mexican States(Translation of registrants name into English)
    
    (Jurisdiction of incorporation or organization)
 Aeropuerto Internacional de Monterrey
Zona de Carga
Carretera Miguel Alemán, Km. 24 s/n
66600 Apodaca, Nuevo León, Mexico
 Securities registered or to be registered pursuant to Section 12(b) of the Act:
 Name of each exchangeTitle of each class:
    
    on which registeredAmerican Depositary Shares each representing 8 Series B shares
    
    The NASDAQ Stock Market LLCSeries B shares
    
    The NASDAQ Stock Market LLC*
 
 *
    
    Not for trading, but only in connection with the registration of American Depositary
Shares, pursuant to the requirements of the Securities and Exchange Commission. Securities registered or to be registered pursuant to Section 12(g) of the Act:
 None
 Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:
 N/A
 Indicate the number of outstanding shares of each of the issuers classes of capital or common
stock as of the close of the period covered by the annual report:
 Title of each class:
    
    Number of SharesSeries B Shares
    
    341,200,000
 Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of
the Securities Act.
 Yes o No þ
 If this report is an annual or transition report, indicate by check mark if the registrant is not
required to file reports pursuant to Sections 13 or 15(d) of the Securities Exchange Act of 1934.
 Yes o No þ
 NoteChecking the box above will not relieve any registrant required to file reports pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those
Sections.
 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports) and (2) has been subject
to such filing requirements for the past 90 days.
 Yes þ No o
 Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer,
or a non-accelerated filer. See definition of accelerated filer and large accelerated filer in
Rule 12b-2 of the Exchange Act. (Check one):
 Large accelerated
filer o Accelerated filer o Non-accelerated filer þ
 Indicate by check mark which financial statement item the registrant has elected to follow:
 Item 17 o Item 18 þ
 If this is an annual report, indicate by check mark whether the registrant is a shell company (as
defined by Rule 12b-2 of the Exchange Act).
 Yes o No þ




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##### Table of Contents



TABLE
OF CONTENTS
  
 PageITEM 1.
    
    IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
    
    
    1ITEM 2.
    
    OFFER STATISTICS AND EXPECTED TIMETABLE
    
    
    1ITEM 3.
    
    KEY INFORMATION
    
    
    1Selected Financial Data
    
    
    1Exchange Rates
    
    
    6Risk Factors
    
    
    7Forward-Looking Statements
    
    
    23ITEM 4.
    
    INFORMATION ON THE COMPANY
    
    
    23History and Development of the Company
    
    
    23Business Overview
    
    
    28Regulatory Framework
    
    
    59Organizational Structure
    
    
    78Property, Plant And Equipment
    
    
    79ITEM 4A.
    
    UNRESOLVED STAFF COMMENTS
    
    
    79ITEM 5.
    
    OPERATING AND FINANCIAL REVIEW AND PROSPECTS
    
    
    79ITEM 6.
    
    DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
    
    
    103ITEM 7.
    
    MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
    
    
    118Major Shareholders
    
    
    118Related Party Transactions
    
    
    121ITEM 8.
    
    FINANCIAL INFORMATION
    
    
    123Legal Proceedings
    
    
    123Dividends
    
    
    125ITEM 9.
    
    THE OFFER AND LISTING
    
    
    127Stock Price History
    
    
    127Trading on the Mexican Stock Exchange
    
    
    128ITEM 10.
    
    ADDITIONAL INFORMATION
    
    
    129Corporate Governance
    
    
    129Material Contracts
    
    
    145Exchange Controls
    
    
    145Taxation
    
    
    146Documents On Display
    
    
    149ITEM 11.
    
    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
    
    
    149
 i




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TABLE
OF CONTENTS
 PageITEM 12.
    
    DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
    
    
    149ITEM 13.
    
    DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
    
    
    150ITEM 14.
    
    MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
    
    
    150ITEM 15.
    
    CONTROLS AND PROCEDURES
    
    
    150ITEM 16.
    
    [RESERVED]
    
    
    150ITEM 16A.
    
    AUDIT COMMITTEE FINANCIAL EXPERT
    
    
    150ITEM 16B.
    
    CODE OF ETHICS
    
    
    150ITEM 16C.
    
    PRINCIPAL ACCOUNTANT FEES AND SERVICES
    
    
    151ITEM 16D.
    
    EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
    
    
    151ITEM 16E.
    
    PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
    
    
    151ITEM 17.
    
    FINANCIAL STATEMENTS
    
    
    152ITEM 18.
    
    FINANCIAL STATEMENTS
    
    
    153ITEM 19.
    
    EXHIBITS
    
    
    154
 ii




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##### Table of Contents



PART I
 
 Item 1. Identity of Directors, Senior Management and Advisers
  
 Item 2. Offer Statistics and Expected Timetable
  
 Item 3. Key Information
 
 SELECTED FINANCIAL DATA
 Normas de Informacion Financiera
 Banco de Mexico
    1




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##### Table of Contents



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




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




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




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EXCHANGE RATES
  Exchange RateYear Ended December 31,
    
    High
    
    Low
    
    Period End
    
    Average(1)2002
    
    
    10.43
    
    
    
    9.00
    
    
    
    10.43
    
    
    
    9.752003
    
    
    11.40
    
    
    
    10.11
    
    
    
    11.24
    
    
    
    10.792004
    
    
    11.64
    
    
    
    10.81
    
    
    
    11.15
    
    
    
    11.312005
    
    
    11.41
    
    
    
    10.41
    
    
    
    10.63
    
    
    
    10.882006
    
    
    11.46
    
    
    
    10.43
    
    
    
    10.80
    
    
    
    10.91December 2006
    
    
    10.99
    
    
    
    10.77
    
    
    
    10.80
    
    
    
    10.852007:January 2007
    
    
    11.09
    
    
    
    10.77
    
    
    
    11.04
    
    
    
    10.96February 2007
    
    
    11.16
    
    
    
    10.92
    
    
    
    11.16
    
    
    
    11.00March 2007
    
    
    11.18
    
    
    
    11.01
    
    
    
    11.04
    
    
    
    11.11April 2007
    
    
    11.03
    
    
    
    10.92
    
    
    
    10.93
    
    
    
    10.98May 2007
    
    
    10.93
    
    
    
    10.74
    
    
    
    10.74
    
    
    
    10.82
 
 (1)
    
    Average of month-end rates or daily rates, as applicable.      6




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##### Table of Contents



RISK FACTORS
 Risks Related to the Regulation of Our Business
 We provide a public service regulated by the Mexican government and our flexibility in
managing our aeronautical activities is limited by the regulatory environment in which we operate.
  We cannot predict how the regulations governing our business will be applied.
 Ley de Aeropuertos
 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.
   7




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If we exceed the maximum rate at any airport at the end of any year, we could be subject to
sanctions.
    The Mexican government may terminate or reacquire our concessions under various circumstances,
some of which are beyond our control.
   8




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force majeure
  The Mexican government could grant new concessions that compete with our airports.
 ,
  Risks Related to Our Operations
 Our revenues are highly dependent on levels of air traffic, which depend in part on factors beyond
our control.
  9




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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.
   International events could have a negative impact on international air travel.
  Increases in international petroleum prices could reduce demand for air travel.
  10




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Our revenues and profitability may not increase if we fail in our business strategy.
   Competition from other tourist destinations could adversely affect our business.
  Our business is highly dependent upon revenues from four of our airports and could be
adversely impacted by any condition affecting those airports.
  For year ended
    
    For year endedDecember 31,
    
    December 31,Airport
    
    2005
    
    2006Monterrey International Airport
    
    
    43.5
    %
    
    
    44.2
    %Acapulco International Airport
    
    
    8.6
    
    
    
    8.6Mazatlán International Airport
    
    
    8.2
    
    
    
    7.6Culiacán International Airport
    
    
    6.9
    
    
    
    6.8Nine other airports
    
    
    32.8
    
    
    
    32.8Total
    
    
    100.0
    %
    
    
    100.0
    %
 11




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If a change in relations with our labor force should occur, such a change could have an
adverse impact on our results of operations.
  Our operations may be affected by union activities .
  The loss of or suspension of operations of one or more of our key customers could result in a
loss of a significant amount of our revenues.
 Consorcio Aeroméxico
 Aerocalifornia Azteca
 12




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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.
  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.
  Cámara Nacional de Aerotransportes
  The operations of our airports may be affected by the actions of third parties, which are
beyond our control.
  13




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##### Table of Contents



SEAT
 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.
 juicio
de amparo
 We may be liable for property taxes as a result of claims asserted against us by certain
municipalities.
   14




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Natural disasters could adversely affect our business.
  Our operations are at greater risk of disruption due to the dependence of several of our
airports on a single commercial runway.
  We are exposed to risk related to construction projects.
  15




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##### Table of Contents



We are exposed to certain risks inherently associated with the rental of real property.
  We are exposed to the risk of non-performance by our subcontractors.
  We are exposed to risks inherent to the operation of airports.
  Our insurance policies may not provide sufficient coverage against all liabilities.
  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.
  16




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##### Table of Contents



Changes in Mexican environmental regulations could limit the growth of certain of our
airports.
  We are liable under Mexican Law for inspection of passengers and their carry-on luggage .
 Ley de Aeropuertos
 We may be subject to potential liability for screening checked baggage.
 Ley de Aviación Civil
 Enforcing civil liabilities against us or our directors, officers and controlling persons may
be difficult.
  17




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Risks Related to Our Stockholders
 Aeroinvest and SETA control our management, and their interests may differ from those of other
stockholders.
  18




---



##### Table of Contents



If SETA or Aeroinvest, our principal stockholders, should sell or otherwise transfer all or a
portion of their remaining interests in us, our operations could be adversely affected.
   19




---



##### Table of Contents



Our ability to make certain business decisions could be limited if Aeroinvest defaults on certain
obligations under its refinancing facility .
  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.
   20




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Depreciation or fluctuation of the peso relative to the U.S. dollar could adversely affect our
results of operations and our financial condition.
    Changes to Mexican laws, regulations and decrees applicable to us could have a material
adverse impact on our results of operations.
  Developments in other countries may affect us.
  21




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Our business could be adversely affected by a downturn in the U.S. economy.
   Minority shareholders may be less able to enforce their rights against us, our directors, or
our controlling shareholders in Mexico.
  We are subject to different corporate disclosure and accounting standards than U.S. companies.
  22




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FORWARD-LOOKING STATEMENTS
  
    
    projections of operating revenues, net income (loss), net income (loss) per share,
capital expenditures, dividends, capital structure or other financial items or ratios,
    
    statements of our plans, objectives or goals,
    
    statements about our future economic performance or that of Mexico, and
    
    statements of assumptions underlying such statements.
    
 Item 4. Information on the Company
 
 HISTORY AND DEVELOPMENT OF THE COMPANY
 sociedad anonima bursatil de capital variable
 23




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##### Table of Contents



Investment by Servicios de Tecnología Aeroportuaria, S.A. de C.V. and its Affiliates
  
    
    all of our Series BB shares, which currently represent 14.7% of our outstanding
capital stock;
    
    an option to acquire from the Mexican government shares currently representing
35.3% of our capital stock (which subsequently was assigned to and exercised by
Aeroinvest, S.A. de C.V., a principal shareholder of SETA);
    
    an option to subscribe for up to 3% of newly issued Series B shares (1% of which
expired unexercised on June 14, 2005 and 2% of which was subscribed for in September
2006); and
    
    the right and obligation to enter into various agreements with us and the Mexican
government, including a participation agreement setting forth the rights and
obligations of each of the parties involved in the privatization (including SETA), a
15-year technical assistance agreement setting forth SETAs right and obligation to
provide technical assistance to us in exchange for an annual fee, and a shareholders
agreement under terms established during the public bidding process. These agreements
are described in greater detail under Item 7. Principal Stockholders and Selling
Stockholder and Related Party Transactions.
  
    
    Aeroinvest, S.A. de C.V., which owns 74.5% of SETA. Aeroinvest is a wholly owned
subsidiary of Empresas ICA, S.A.B. de C.V. Aeroinvest also directly owns 36.04% of
our Series B shares as a result of its exercise of an option to acquire these shares
from the Mexican government and its subsequent purchase of additional Series B shares
representing 0.74% of our capital stock. Aeroinvests Series B shares were acquired
in December 2005 from the Mexican government at an aggregate cost of U.S. $203.3
million (determined based on an initial price per share of U.S. $1.28 plus an annual
5% premium, subject to decreases corresponding to dividends declared and paid by us).
Empresas ICA, the parent of Aeroinvest, is the largest engineering, construction and
procurement company in Mexico. Empresas ICAs principal lines of business are
construction and engineering, housing and infrastructure operations, including the
operation of airports (through SETA), toll roads and municipal services. Empresas ICA
is listed on the Mexican Stock Exchange and the New York Stock Exchange. Through
Aeroinvest, Empresas ICA controls a majority of our capital stock.
    
    Aéroports de Paris Management, S.A., which owns 25.5% of SETA. Aéroports de Paris
Management is a wholly owned subsidiary of Aéroports de Paris, S.A., a French company
recognized as a leading European airport group. For more than 40 years, Aéroports de
Paris has operated the Charles de Gaulle and Orly airports in France, which processed
82.5
 24




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##### Table of Contents



million passengers in 2006. Aéroports de Paris is listed on the Eurolist Market
of Euronext Paris S.A.
   Initial Public Offering
 NAFIN Trust ADSs
 Master Development Programs
  25




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##### Table of Contents



Historical Committed Investments Under Master Development Programs
 Year
ended December 31,Total2004
    
    

2005
    
    

2006(1)
    
    

2004-2006(thousands of pesos)Acapulco
    
    Ps.
    23,269
    
    
    Ps.
    9,904
    
    
    Ps.
    91,409
    
    
    Ps.
    124,582Ciudad Juárez
    
    
    24,652
    
    
    
    24,095
    
    
    
    43,774
    
    
    
    92,521Culiacán
    
    
    9,666
    
    
    
    7,320
    
    
    
    58,248
    
    
    
    73,234Chihuahua
    
    
    27,825
    
    
    
    30,686
    
    
    
    67,450
    
    
    
    125,961Durango
    
    
    7,047
    
    
    
    6,902
    
    
    
    16,191
    
    
    
    30,140Mazatlán
    
    
    7,331
    
    
    
    4,965
    
    
    
    84,645
    
    
    
    96,941Monterrey
    
    
    13,582
    
    
    
    47,956
    
    
    
    295,425
    
    
    
    356,963Reynosa
    
    
    3,054
    
    
    
    16,110
    
    
    
    17,433
    
    
    
    36,597San Luis Potosí
    
    
    4,918
    
    
    
    5,574
    
    
    
    23,537
    
    
    
    34,029Tampico
    
    
    4,468
    
    
    
    2,429
    
    
    
    37,810
    
    
    
    44,707Torreón
    
    
    46,851
    
    
    
    36,973
    
    
    
    16,407
    
    
    
    100,231Zacatecas
    
    
    11,450
    
    
    
    3,440
    
    
    
    15,822
    
    
    
    30,712Zihuatanejo
    
    
    605
    
    
    
    41,953
    
    
    
    68,304
    
    
    
    110,862Total
    
    Ps.
    178,679
    
    
    Ps.
    230,519
    
    
    Ps.
    836,454
    
    
    Ps.
    1,245,652
 
 (1)
    
    Amounts listed for 2006 include committed investments
relating to the purchase, installation and operation of new baggage
screening equipment, which are currently under discussion with the
airlines that operate at our airports and the Mexican government. We
expect to undertake these investments upon reaching an agreement with
our principal airline customers and the Ministry of Communications
and Transportation.  Historical Capital Expenditures by Airport
 Year ended December 31,2004
    
    
    2005
    
    
    2006(thousands of pesos)Acapulco
    
    Ps.
    33,776
    
    
    Ps.
    13,127
    
    
    Ps.
    27,826Ciudad Juárez
    
    
    15,530
    
    
    
    25,401
    
    
    
    20,780Culiacán
    
    
    12,598
    
    
    
    6,965
    
    
    
    25,480Chihuahua
    
    
    24,952
    
    
    
    27,112
    
    
    
    50,359Durango
    
    
    7,290
    
    
    
    7,456
    
    
    
    9,307Mazatlán
    
    
    7,749
    
    
    
    8,767
    
    
    
    24,291Monterrey
    
    
    79,659
    
    
    
    62,570
    
    
    
    160,449Reynosa
    
    
    8,697
    
    
    
    16,652
    
    
    
    10,212San Luis Potosí
    
    
    2,705
    
    
    
    38,501
    
    
    
    15,439Tampico
    
    
    6,926
    
    
    
    2,645
    
    
    
    25,144Torreón
    
    
    43,061
    
    
    
    37,943
    
    
    
    21,274Zacatecas
    
    
    18,239
    
    
    
    3,394
    
    
    
    9,949Zihuatanejo
    
    
    4,101
    
    
    
    28,929
    
    
    
    21,952Other
    
    
    3,547
    
    
    
    3,420
    
    
    
    1,823Total
    
    Ps.
    268,830
    
    
    Ps.
    282,882
    
    
    Ps.
    424,285
 26




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##### Table of Contents



Year ended December 31,2004
    
    
    2005
    
    
    2006(thousands of pesos)Terminals
    
    Ps.
    165,239
    
    
    Ps.
    96,651
    
    
    Ps.
    166,414Runways and aprons
    
    
    76,021
    
    
    
    129,529
    
    
    
    222,231Machinery and equipment
    
    
    17,319
    
    
    
    49,104
    
    
    
    25,520Other
    
    
    10,251
    
    
    
    7,598
    
    
    
    10,120Total
    
    Ps.
    268,830
    
    
    Ps.
    282,882
    
    
    Ps.
    424,285
  
    
    Terminals. We remodeled many of the terminals at our airports by expanding
departure areas (concourses and lounges), baggage claim areas and arrival areas, by
improving lighting systems, adding office space, adding taxi and other ground
transportation waiting areas, and by increasing handicap services and remodeling
restrooms.
    
    Runways, access roads and aircraft parking. We improved our runways and access
roads (including their lighting systems), expanded aircraft parking areas, and made
improvements and renovations to the fences on the outlying areas of our properties
subject to our concessions.
    
    Machinery and equipment. We invested in machinery and equipment such as fire
extinguishing vehicles, emergency back-up electricity generators, metal detectors and
other security-related equipment, ambulances, moving walkways and public information
systems.
    
    Utility-related infrastructure. We installed sewage treatment plants and systems
at several of our airports, improved drainage systems, and installed underground
electric wiring systems at several of our airports.
  27




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##### Table of Contents



Committed Investments by Airport
 Year ended December 31,Total2006(1)
    
    
    2007
    
    
    2008
    
    
    2009
    
    
    2010
    
    
    2006-2010(thousands of pesos)Acapulco
    
    Ps.
    91,409
    
    
    Ps.
    39,720
    
    
    Ps.
    27,174
    
    
    Ps.
    12,673
    
    
    Ps.
    12,849
    
    
    Ps.
    183,826Ciudad Juárez
    
    
    43,774
    
    
    
    32,738
    
    
    
    19,211
    
    
    
    16,652
    
    
    
    10,428
    
    
    
    122,803Culiacán
    
    
    58,248
    
    
    
    12,839
    
    
    
    7,251
    
    
    
    19,363
    
    
    
    2,073
    
    
    
    99,773Chihuahua
    
    
    67,450
    
    
    
    8,234
    
    
    
    26,264
    
    
    
    6,595
    
    
    
    8,946
    
    
    
    117,489Durango
    
    
    16,191
    
    
    
    25,068
    
    
    
    17,381
    
    
    
    20,574
    
    
    
    7,916
    
    
    
    87,130Mazatlán
    
    
    84,645
    
    
    
    24,491
    
    
    
    8,749
    
    
    
    16,276
    
    
    
    1,927
    
    
    
    136,088Monterrey
    
    
    295,425
    
    
    
    233,368
    
    
    
    224,481
    
    
    
    72,340
    
    
    
    20,512
    
    
    
    846,125Reynosa
    
    
    17,433
    
    
    
    17,104
    
    
    
    9,816
    
    
    
    8,051
    
    
    
    1,503
    
    
    
    53,908San Luis Potosí
    
    
    23,537
    
    
    
    11,545
    
    
    
    17,686
    
    
    
    21,097
    
    
    
    2,660
    
    
    
    76,525Tampico
    
    
    37,810
    
    
    
    20,427
    
    
    
    10,665
    
    
    
    13,395
    
    
    
    3,858
    
    
    
    86,154Torreón
    
    
    16,407
    
    
    
    9,201
    
    
    
    26,326
    
    
    
    5,384
    
    
    
    6,983
    
    
    
    64,301Zacatecas
    
    
    15,822
    
    
    
    12,092
    
    
    
    3,875
    
    
    
    20,950
    
    
    
    6,689
    
    
    
    59,427Zihuatanejo
    
    
    68,304
    
    
    
    12,720
    
    
    
    18,468
    
    
    
    23,835
    
    
    
    11,174
    
    
    
    134,501Total
    
    Ps.
    836,454
    
    
    Ps.
    459,548
    
    
    Ps.
    417,346
    
    
    Ps.
    257,184
    
    
    Ps.
    97,518
    
    
    Ps.
    2,068,050
   (1)
        
        Amounts
listed for 2006 include committed investments relating to the
purchase, installation and operation of new baggage screening
equipment, which are currently under discussion with the airlines
that operate at our airports and the Mexican government. We expect to
undertake these investments upon reaching an agreement with our
principal airline customers and the Ministry of Communications and
Transportation.  Committed Investments by Type
 Year ended December 31,Total2006(1)
    
    
    2007
    
    
    2008
    
    
    2009
    
    
    2010
    
    
    2006-2010(thousands of pesos)Terminals
    
    Ps.
    102,142
    
    
    Ps.
    100,330
    
    
    Ps.
    201,965
    
    
    Ps.
    54,951
    
    
    Ps.
    13,665
    
    
    Ps.
    473,053Runways and aprons
    
    
    247,975
    
    
    
    211,791
    
    
    
    164,335
    
    
    
    149,142
    
    
    
    60,251
    
    
    
    833,495Machinery and
equipment
    
    
    62,250
    
    
    
    76,295
    
    
    
    42,164
    
    
    
    47,208
    
    
    
    23,603
    
    
    
    251,520Baggage screening
system -
investments
    
    
    417,618
    
    
    
    58,681
    
    
    
    0
    
    
    
    0
    
    
    
    0
    
    
    
    476,299Other
    
    
    6,468
    
    
    
    12,450
    
    
    
    8,881
    
    
    
    5,882
    
    
    
    0
    
    
    
    33,682Total
    
    Ps.
    836,454
    
    
    Ps.
    459,548
    
    
    Ps.
    417,346
    
    
    Ps.
    257,184
    
    
    Ps.
    97,518
    
    
    Ps.
    2,068,050
   (1)
        
        Amounts
listed for 2006 include committed investments relating to the
purchase, installation and operation of new baggage screening
equipment, which are currently under discussion with the airlines
that operate at our airports and the Mexican government. We expect to
undertake these investments upon reaching an agreement with our
principal airline customers and the Ministry of Communications and
Transportation.   
 BUSINESS OVERVIEW
 Our Operations
  28




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Instituto Nacional de Estadística, Geografía e Informática)
      29




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maquiladora
  30




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Year ended December 31, 2005
    
    Year ended December 31, 2006Revenues
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Revenuesper
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    perTerminal
    
    
    
    
    
    
    
    
    
    terminal
    
    Terminal
    
    
    
    
    
    
    
    
    
    terminalAirport
    
    Passengers
    
    Revenues
    
    passenger(1)
    
    passengers
    
    Revenues
    
    passenger(1)Number
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Number(in
    
    
    
    
    
    (millions
    
    
    
    
    
    
    
    
    
    (in
    
    
    
    
    
    (millionsmillions)
    
    %
    
    of pesos)
    
    %
    
    (pesos)
    
    millions)
    
    %
    
    of pesos)
    
    %
    
    (pesos)Metropolitan area:Monterrey
International
Airport
    
    
    4.7
    
    
    
    44.0
    %
    
    
    618.4
    
    
    
    43.4
    %
    
    
    131.6
    
    
    
    5.3
    
    
    
    44.6
    %
    
    
    719.9
    
    
    
    44.6
    %
    
    
    135.8Tourist destinations:Acapulco
International
Airport
    
    
    0.9
    
    
    
    8.3
    %
    
    
    122.1
    
    
    
    8.5
    %
    
    
    135.7
    
    
    
    1.0
    
    
    
    8.4
    %
    
    
    139.6
    
    
    
    8.4
    %
    
    
    139.6Mazatlán
International
Airport
    
    
    0.8
    
    
    
    7.5
    %
    
    
    116.9
    
    
    
    8.2
    %
    
    
    146.1
    
    
    
    0.8
    
    
    
    7.0
    %
    
    
    123.7
    
    
    
    7.0
    %
    
    
    154.6Zihuatanejo
International
Airport
    
    
    0.6
    
    
    
    5.7
    %
    
    
    77.3
    
    
    
    5.4
    %
    
    
    128.8
    
    
    
    0.7
    
    
    
    5.8
    %
    
    
    90.8
    
    
    
    5.8
    %
    
    
    129.9Total tourist
destinations
    
    
    2.3
    
    
    
    21.5
    %
    
    
    316.3
    
    
    
    22.2
    %
    
    
    137.5
    
    
    
    2.5
    
    
    
    21.2
    %
    
    
    354.1
    
    
    
    21.2
    %
    
    
    141.7Regional cities:Chihuahua
International
Airport
    
    
    0.6
    
    
    
    5.7
    %
    
    
    83.4
    
    
    
    5.8
    %
    
    
    139.0
    
    
    
    0.7
    
    
    
    5.6
    %
    
    
    95.9
    
    
    
    5.9
    %
    
    
    137.1Culiacán
International
Airport
    
    
    0.8
    
    
    
    7.3
    %
    
    
    98.8
    
    
    
    6.9
    %
    
    
    123.5
    
    
    
    0.8
    
    
    
    7.2
    %
    
    
    111.0
    
    
    
    7.2
    %
    
    
    138.9Durango
International
Airport
    
    
    0.2
    
    
    
    2.0
    %
    
    
    28.9
    
    
    
    2.0
    %
    
    
    144.5
    
    
    
    0.2
    
    
    
    2.0
    %
    
    
    31.3
    
    
    
    2.0
    %
    
    
    156.5San Luis Potosí
International
Airport
    
    
    0.2
    
    
    
    2.2
    %
    
    
    40.8
    
    
    
    2.8
    %
    
    
    204.0
    
    
    
    0.2
    
    
    
    1.9
    %
    
    
    40.4
    
    
    
    1.9
    %
    
    
    202.0Tampico
International
Airport
    
    
    0.4
    
    
    
    3.8
    %
    
    
    55.5
    
    
    
    3.9
    %
    
    
    138.7
    
    
    
    0.5
    
    
    
    4.1
    %
    
    
    64.6
    
    
    
    4.1
    %
    
    
    129.2Torreón
International
Airport
    
    
    0.4
    
    
    
    3.5
    %
    
    
    52.8
    
    
    
    3.7
    %
    
    
    132.0
    
    
    
    0.4
    
    
    
    3.5
    %
    
    
    57.2
    
    
    
    3.5
    %
    
    
    143.0Zacatecas
International
Airport
    
    
    0.3
    
    
    
    2.8
    %
    
    
    40.1
    
    
    
    2.8
    %
    
    
    133.7
    
    
    
    0.3
    
    
    
    2.8
    %
    
    
    46.8
    
    
    
    2.8
    %
    
    
    156.0Total regional
destinations
    
    
    2.9
    
    
    
    27.3
    %
    
    
    400.3
    
    
    
    28.1
    %
    
    
    138.0
    
    
    
    3.2
    
    
    
    27.1
    %
    
    
    447.2
    
    
    
    27.1
    %
    
    
    139.7Border cities:Ciudad Juárez
International
Airport
    
    
    0.6
    
    
    
    5.8
    %
    
    
    73.8
    
    
    
    5.2
    %
    
    
    123.0
    
    
    
    0.7
    
    
    
    5.9
    %
    
    
    87.4
    
    
    
    5.4
    %
    
    
    124.8Reynosa
International
Airport
    
    
    0.1
    
    
    
    1.4
    %
    
    
    17.5
    
    
    
    1.2
    %
    
    
    175.0
    
    
    
    0.1
    
    
    
    1.2
    %
    
    
    17.6
    
    
    
    1.2
    %
    
    
    176.0Total border city
destinations
    
    
    0.7
    
    
    
    7.2
    %
    
    
    91.3
    
    
    
    6.4
    %
    
    
    130.4
    
    
    
    0.8
    
    
    
    7.1
    %
    
    
    105.0
    
    
    
    7.1
    %
    
    
    131.2TOTAL:
    
    
    10.6
    
    
    
    100.0
    %
    
    
    1,426.3
    
    
    
    100.0
    %
    
    
    134.5
    
    
    
    11.8
    
    
    
    100.0
    %
    
    
    1,626.2
    
    
    
    100.0
    %
    
    
    137.8
 
 (1)
    
    Revenues per terminal passenger are calculated by dividing the total revenues for each
airport by the number of terminal passengers for each airport.  Our Sources of Revenues
 Aeronautical Services
  31




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##### Table of Contents



Passenger Charges
 Tarifa de Uso de Aeropuerto
 Cetes
  Aircraft Landing Charges
  Aircraft Parking, Boarding and Unloading Charges
  32




---



##### Table of Contents



Aircraft Long-Term Parking Charges
  Passenger Walkway Charges
  Airport Security Charges
    
    
    updating and amending our emergency security and contingency plans and the
responsibilities of security personnel relating thereto;
    
    segregating flows of arriving and departing passengers;
    
    improving security supervision committees at each of our airports, particularly
those with significant international traffic;
    
    updating our security screening technology, including increasing the sensitivity of
metal detectors and introducing new procedures for x-ray inspection of luggage;
 33




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##### Table of Contents




    
    increasing and improving the training of security personnel;
    
    coordinating security measures and emergency plans with operators of complementary
and commercial services at our airports;
    
    implementing a higher security employee identification system; and
    
    increased collaboration with providers of security equipment installation services.
   Ley de Aviación Civil
 Complementary Services
   34




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##### Table of Contents



Aeropuertos y Servicios Auxiliares PEMEX
 Leasing of Space to Airlines
  Cargo Handling
    Permanent Ground Transportation
  Non-aeronautical Services
 General
  35




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##### Table of Contents



Revenues from Commercial Activities
  
    
    Expanding and reconfiguring the commercial space available in our airport terminals.
In order to increase our revenues from commercial activities, we have expanded and
redesigned the layout of certain terminals in our airports to allow for the inclusion
of more commercial businesses and larger individual commercial spaces, as well as to
redirect the flow of passengers through our airports so as to increase our exposure to
the commercial businesses operating in our airports. As a result, between 2000 and
2006, we increased the total area available for commercial activity in our 13 airports
by approximately 50%, and have nearly doubled the commercial area in the Monterrey
International Airport.
    
    Renegotiating agreements with terminal tenants to be more consistent with market
practice.We have also improved our lease arrangements with existing tenants by
adopting a new type of contract that provides for royalty payments based on a
percentage of revenues, subject to a minimum fixed amount based partly on
square-footage, as opposed to the leases based solely on square footage that were used
historically in Mexican airports. We estimate, based on the nature of our tenant
operations, that approximately half of our commercial space is suitable for
royalty-based leasing arrangements. As of December 31, 2006, substantially all of the
eligible contracts were represented by royalty-based leasing arrangements.
    
    Improving the quality of retail offerings in our airports.Historically, commercial
tenants in our terminals consisted of small, often similar, local businesses offering
goods and services of limited variety. We have leased redesigned space formerly
occupied by such tenants, as well as newly available space, to more established,
internationally recognized businesses in order to improve the quality, diversity and
brand recognition of commercial goods and services available to our passengers, which
we believe, based in part on market surveys conducted at several of our airports, will
increase the sales revenues of our commercial tenants, thereby increasing our revenues
from commercial activities. In order to promote commercial development at all of our
airports, we encourage commercial tenants to lease bundles of commercial spaces among
multiple airports that we operate.
    
    Development and promotion of OMA Plaza retail brand.In order to enhance our
passengers confidence in the retailers operating in our airports, we have developed
the OMA Plaza brand for our commercial spaces. As part of this initiative, we have
begun to standardize certain merchandising and design elements of our commercial spaces
in order to create a more uniform and elegant image that is more appealing to retail
customers. In addition, we have developed promotional programs focusing on the further
development of the OMA Plaza brand that are intended to stimulate retail sales in our
airports. We believe that a recognizable brand and familiar aesthetic for our
commercial spaces will make passengers more likely to take advantage of the commercial
goods and services available in our airports.
 36




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##### Table of Contents




    
    Parking facilities- Our concessions provide us the right to operate the car parking
facilities at all of our airports. Revenues from parking facilities at our airports
currently are not regulated under our maximum rates, although they are subject to the
regulatory oversight of the Ministry of Communications and Transportation.
    
    Advertising- In 2002, we entered into a contract with a subsidiary of Corporación
Interamericana de Entretenimiento, S.A. de C.V., or CIE, pursuant to which we have
developed a greater number of and more strategically located billboards, screens
(projection and plasma) and other advertising space at our airports. Under the
agreement, CIE places advertising in our airports and we collect a percentage of the
revenues that CIE receives from individual advertisers.
    
    Leasing of space- Revenues that we derive from leasing of space in our terminals to
airlines and complementary service providers for certain activities that are not
essential to airport operations, such as first class/VIP lounges, are not subject to
price regulation under our maximum rates and are classified as non-regulated commercial
activities.
    
    Retail stores- We have completed several renovation projects as part of our overall
effort, described above, to improve the product mix and brand recognition of retail
stores in the commercial areas at our airports. Our retailer tenants currently offer
such internationally recognized product brands as Cartier, Hermès, Mont Blanc, Swatch,
Ermenegildo Zegna, Christian Dior, Lancôme, LOreal, Swarovski and Lacoste. We also
have several duty-free retailers that cater to international passengers.
    
    Car rentals- We have recently sought to increase the presence of internationally
known name-brand car rental providers at our airports, and have encouraged car rental
companies to establish on-site automobile pick-up and drop-off facilities at our
airports, which we anticipate will increase our revenues from the leasing of space to
car rental companies.
    
    Food and beverage services- In recent years, we have completed clean-up projects
with respect to our restaurant and bar leases, in order to attract world-class
providers of high-quality food and beverage services offering a wider variety of
cuisine options and service concepts.
    
    Communications- We have consolidated most of the telephone and internet service at
our airports with one provider and offer internet access (either wireless internet
access or internet service kiosks) at all of our airports.
    
    Financial services- We lease space to financial services providers such as currency
exchange bureaus, banks and ATMs, at our airports, and we charge providers of these
 37




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##### Table of Contents



financial services fees based partly on a percentage of the revenues recorded by their
operations. ATM service is currently available at all of our airports.
 
    
    Ground transportation- Our revenues from providers of ground transportation
services deemed non-permanent under applicable Mexican law, such as access fees
charged to charter buses, are not subject to price regulation under our maximum rates
and are classified as non-regulated commercial activities.
    
    Time-share marketing and sales- We receive revenues from time-share developers to
whom we rent space in our airports for the purpose of marketing and sales of time-share
units.
 Our Airports
  38




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##### Table of Contents



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




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##### Table of Contents



Year ended December 31,2002
    
    2003
    
    2004
    
    2005
    
    2006Domestic
    
    International
    
    Total
    
    Domestic
    
    International
    
    Total
    
    Domestic
    
    International
    
    Total
    
    Domestic
    
    International
    
    Total
    
    Domestic
    
    International
    
    TotalTerminal
arriving
passengers:Acapulco
    
    
    276,813
    
    
    
    110,799
    
    
    
    387,612
    
    
    
    282,547
    
    
    
    94,145
    
    
    
    376,692
    
    
    
    290,885
    
    
    
    110,613
    
    
    
    401,498
    
    
    
    298,273
    
    
    
    132,671
    
    
    
    430,944
    
    
    
    341,685
    
    
    
    147,864
    
    
    
    489,549Chihuahua
    
    
    236,114
    
    
    
    21,560
    
    
    
    257,674
    
    
    
    251,017
    
    
    
    20,725
    
    
    
    271,742
    
    
    
    258,468
    
    
    
    21,045
    
    
    
    279,513
    
    
    
    271,814
    
    
    
    29,994
    
    
    
    301,808
    
    
    
    297,980
    
    
    
    33,908
    
    
    
    331,888Ciudad Juárez
    
    
    291,824
    
    
    
    860
    
    
    
    292,684
    
    
    
    299,313
    
    
    
    863
    
    
    
    300,176
    
    
    
    312,392
    
    
    
    1,023
    
    
    
    313,415
    
    
    
    337,558
    
    
    
    865
    
    
    
    338,423
    
    
    
    382,757
    
    
    
    758
    
    
    
    383,515Culiacán
    
    
    278,120
    
    
    
    11,130
    
    
    
    289,250
    
    
    
    293,227
    
    
    
    10,562
    
    
    
    303,789
    
    
    
    320,278
    
    
    
    12,824
    
    
    
    333,102
    
    
    
    366,652
    
    
    
    10,913
    
    
    
    377,565
    
    
    
    410,628
    
    
    
    5,092
    
    
    
    415,720Durango
    
    
    80,966
    
    
    
    14,877
    
    
    
    95,843
    
    
    
    80,385
    
    
    
    13,844
    
    
    
    94,229
    
    
    
    85,366
    
    
    
    20,622
    
    
    
    105,988
    
    
    
    89,741
    
    
    
    18,230
    
    
    
    107,971
    
    
    
    99,989
    
    
    
    18,090
    
    
    
    118,079Mazatlán
    
    
    205,848
    
    
    
    148,390
    
    
    
    354,238
    
    
    
    198,606
    
    
    
    152,363
    
    
    
    350,969
    
    
    
    204,671
    
    
    
    165,418
    
    
    
    370,089
    
    
    
    201,781
    
    
    
    196,938
    
    
    
    398,719
    
    
    
    191,529
    
    
    
    216,810
    
    
    
    408,339Monterrey
    
    
    1,395,701
    
    
    
    323,468
    
    
    
    1,719,169
    
    
    
    1,478,648
    
    
    
    358,461
    
    
    
    1,837,109
    
    
    
    1,697,834
    
    
    
    440,079
    
    
    
    2,137,913
    
    
    
    1,867,610
    
    
    
    496,960
    
    
    
    2,364,570
    
    
    
    2,271,885
    
    
    
    441,828
    
    
    
    2,713,713Reynosa
    
    
    79,006
    
    
    
    104
    
    
    
    79,110
    
    
    
    78,801
    
    
    
    132
    
    
    
    78,933
    
    
    
    77,905
    
    
    
    81
    
    
    
    77,986
    
    
    
    80,190
    
    
    
    269
    
    
    
    80,459
    
    
    
    71,903
    
    
    
    12
    
    
    
    71,915San Luis Potosí
    
    
    67,537
    
    
    
    17,200
    
    
    
    84,737
    
    
    
    68,155
    
    
    
    16,921
    
    
    
    85,076
    
    
    
    76,923
    
    
    
    19,925
    
    
    
    96,848
    
    
    
    85,549
    
    
    
    30,624
    
    
    
    116,173
    
    
    
    80,207
    
    
    
    33,664
    
    
    
    113,871Tampico
    
    
    148,847
    
    
    
    14,303
    
    
    
    163,150
    
    
    
    153,369
    
    
    
    12,722
    
    
    
    166,091
    
    
    
    153,234
    
    
    
    13,966
    
    
    
    167,200
    
    
    
    185,451
    
    
    
    15,211
    
    
    
    200,662
    
    
    
    223,699
    
    
    
    19,104
    
    
    
    242,803Torreón
    
    
    152,030
    
    
    
    15,632
    
    
    
    167,662
    
    
    
    152,775
    
    
    
    14,127
    
    
    
    166,902
    
    
    
    161,310
    
    
    
    19,706
    
    
    
    181,016
    
    
    
    160,898
    
    
    
    27,405
    
    
    
    188,303
    
    
    
    173,396
    
    
    
    31,522
    
    
    
    204,918Zacatecas
    
    
    75,310
    
    
    
    37,936
    
    
    
    113,246
    
    
    
    67,488
    
    
    
    45,013
    
    
    
    112,501
    
    
    
    68,770
    
    
    
    46,368
    
    
    
    115,138
    
    
    
    98,085
    
    
    
    46,388
    
    
    
    144,473
    
    
    
    116,784
    
    
    
    44,250
    
    
    
    161,034Zihuatanejo
    
    
    184,111
    
    
    
    100,372
    
    
    
    284,483
    
    
    
    177,801
    
    
    
    97,033
    
    
    
    274,834
    
    
    
    174,133
    
    
    
    123,383
    
    
    
    297,516
    
    
    
    169,731
    
    
    
    133,440
    
    
    
    303,171
    
    
    
    187,620
    
    
    
    152,142
    
    
    
    339,762Total
    
    
    3,472,227
    
    
    
    816,631
    
    
    
    4,288,858
    
    
    
    3,582,132
    
    
    
    836,911
    
    
    
    4,419,043
    
    
    
    3,882,169
    
    
    
    995,053
    
    
    
    4,877,222
    
    
    
    4,213,333
    
    
    
    1,139,908
    
    
    
    5,353,241
    
    
    
    4,850,062
    
    
    
    1,145,044
    
    
    
    5,995,106
 40




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Capacity by Airport (1)
 Peak air traffic
    
    RunwayAirport
    
    movements per hour
    
    Capacity(2)Acapulco
    
    
    9
    
    
    
    40Chihuahua
    
    
    9
    
    
    
    40Ciudad Juárez
    
    
    10
    
    
    
    20Culiacán
    
    
    14
    
    
    
    20Durango
    
    
    6
    
    
    
    40Mazatlán
    
    
    9
    
    
    
    22Monterrey
    
    
    29
    
    
    
    38Reynosa
    
    
    2
    
    
    
    18San Luis Potosí
    
    
    5
    
    
    
    20Tampico
    
    
    7
    
    
    
    22Torreón
    
    
    8
    
    
    
    20Zacatecas
    
    
    3
    
    
    
    20Zihuatanejo
    
    
    8
    
    
    
    20
 
 (1)
    
    2006 figures.(2)
    
    Air traffic movements per hour. 41




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##### Table of Contents



Air Traffic Movements by Airport (1)
 Year ended December 31,2002
    
    2003
    
    2004
    
    2005
    
    2006Acapulco
    
    
    23,907
    
    
    
    23,778
    
    
    
    23,288
    
    
    
    26,336
    
    
    
    28,015Chihuahua
    
    
    39,589
    
    
    
    36,205
    
    
    
    35,205
    
    
    
    36,614
    
    
    
    36,681Ciudad Juárez
    
    
    16,752
    
    
    
    16,069
    
    
    
    17,565
    
    
    
    20,424
    
    
    
    19,612Culiacán
    
    
    46,842
    
    
    
    48,048
    
    
    
    46,404
    
    
    
    50,648
    
    
    
    55,691Durango
    
    
    14,794
    
    
    
    14,021
    
    
    
    15,075
    
    
    
    15,599
    
    
    
    15,672Mazatlán
    
    
    21,637
    
    
    
    20,532
    
    
    
    21,984
    
    
    
    23,965
    
    
    
    24,046Monterrey
    
    
    82,874
    
    
    
    84,154
    
    
    
    95,027
    
    
    
    94,292
    
    
    
    101,736Reynosa
    
    
    6,706
    
    
    
    6,603
    
    
    
    6,386
    
    
    
    6,513
    
    
    
    7,877San Luis Potosí
    
    
    20,536
    
    
    
    19,222
    
    
    
    20,361
    
    
    
    22,102
    
    
    
    22,150Tampico
    
    
    20,516
    
    
    
    21,211
    
    
    
    19,512
    
    
    
    21,299
    
    
    
    22,730Torreón
    
    
    23,146
    
    
    
    20,673
    
    
    
    22,344
    
    
    
    21,523
    
    
    
    21,546Zacatecas
    
    
    7,732
    
    
    
    7,602
    
    
    
    7,942
    
    
    
    9,112
    
    
    
    10,381Zihuatanejo
    
    
    15,169
    
    
    
    15,086
    
    
    
    14,923
    
    
    
    13,899
    
    
    
    16,474Total
    
    
    340,200
    
    
    
    333,204
    
    
    
    346,016
    
    
    
    362,326
    
    
    
    382,611
 
 (1)
    
    Includes departures and landings. 42




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##### Table of Contents



Average Passengers per Air Traffic Movements by Airport (1)
 Year ended December 31,2002
    
    2003
    
    2004
    
    2005
    
    2006Acapulco
    
    
    33.2
    
    
    
    32.6
    
    
    
    35.3
    
    
    
    33.4
    
    
    
    35.5Chihuahua
    
    
    12.9
    
    
    
    15.0
    
    
    
    15.8
    
    
    
    16.4
    
    
    
    18.1Ciudad Juárez
    
    
    31.3
    
    
    
    34.2
    
    
    
    32.5
    
    
    
    30.0
    
    
    
    35.6Culiacán
    
    
    12.4
    
    
    
    12.9
    
    
    
    14.5
    
    
    
    15.2
    
    
    
    15.2Durango
    
    
    13.1
    
    
    
    13.4
    
    
    
    14.0
    
    
    
    13.8
    
    
    
    15.1Mazatlán
    
    
    32.8
    
    
    
    34.3
    
    
    
    33.7
    
    
    
    33.4
    
    
    
    34.1Monterrey
    
    
    41.6
    
    
    
    44.0
    
    
    
    45.2
    
    
    
    49.4
    
    
    
    51.6Reynosa
    
    
    22.3
    
    
    
    22.7
    
    
    
    22.7
    
    
    
    22.5
    
    
    
    17.4San Luis Potosí
    
    
    8.4
    
    
    
    9.0
    
    
    
    9.6
    
    
    
    10.6
    
    
    
    10.3Tampico
    
    
    16.0
    
    
    
    15.6
    
    
    
    17.1
    
    
    
    18.9
    
    
    
    21.3Torreón
    
    
    14.4
    
    
    
    16.1
    
    
    
    16.2
    
    
    
    17.4
    
    
    
    19.0Zacatecas
    
    
    30.4
    
    
    
    30.3
    
    
    
    29.8
    
    
    
    32.6
    
    
    
    32.0Zihuatanejo
    
    
    37.8
    
    
    
    36.8
    
    
    
    40.2
    
    
    
    43.8
    
    
    
    41.4Average of all airports
    
    
    25.1
    
    
    
    26.6
    
    
    
    28.1
    
    
    
    29.3
    
    
    
    30.8
 
 (1)
    
    Includes total passengers divided by total air traffic movements. Metropolitan Area
 Monterrey International Airport
    43




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44




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Tourist Destinations
 Acapulco International Airport
   45




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##### Table of Contents



Mazatlán International Airport
   46




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##### Table of Contents



Zihuatanejo International Airport
  
 47




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##### Table of Contents



Regional Cities
 Chihuahua International Airport
    48




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##### Table of Contents



maquiladora
   Culiacán International Airport
     49




---



##### Table of Contents



Durango International Airport
     50




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##### Table of Contents



San Luis Potosí International Airport
      51




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##### Table of Contents



Tampico International Airport
        Torreón International Airport
   52




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##### Table of Contents



maquiladoras
   Zacatecas International Airport
    53




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##### Table of Contents



Border Cities
 Ciudad Juárez International Airport
    maquiladora
   54




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##### Table of Contents



Reynosa International Airport
    maquiladora
   Principal Customers
 Principal Aeronautical Services Customers
 Airline Customers
  55




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56




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Percentage ofPrincipal Air Traffic Customers
    
    2006 RevenuesDomestic:Aeroméxico
    
    
    20.2
    %Mexicana
    
    
    14.3
    %Aviacsa
    
    
    11.2
    %Aerolitoral
    
    
    8.4
    %Interjet
    
    
    4.8
    %Aerocalifornia
    
    
    2.6
    %Líneas Aéreas Azteca
    
    
    3.6
    %Grupo Aeromonterrey
    
    
    3.1
    %Other
    
    
    13.2
    %Total Domestic
    
    
    81.4
    %International:Continental
    
    
    6.8
    %American Airlines (including American Eagle)
    
    
    4.1
    %Alaska Airlines
    
    
    1.7
    %America West (including Mesa Airlines)
    
    
    1.1
    %Charters
    
    
    2.3
    %Other
    
    
    2.6
    %Total International
    
    
    18.6
    %Total
    
    
    100
    %
 Complementary Services Customers
   Principal Non-aeronautical Services Customers
  57




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Seasonality
  Competition
      58




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##### Table of Contents



REGULATORY FRAMEWORK
 Sources of Regulation
  
    
    the Mexican Airport Law (Ley de Aeropuertos), enacted December 22, 1995;
    
    the regulations under the Mexican Airport Law (Reglamento del la Ley de
Aeropuertos), enacted February 17, 2000;
    
    the Mexican Communications Law (Ley de Vias Generales de Comunicación), enacted
February 19, 1940;
    
    the Mexican Civil Aviation Law (Ley de Aviación Civil), enacted May 12, 1995;
    
    the Mexican Federal Duties Law (Ley Federal de Derechos), enacted December 31,
1981, which may be revised on an annual basis and stipulates the applicable basis and
rate for calculating the concession fee and duties payable under the current budget;
    
    the Mexican National Assets Law (Ley de Bienes Nacionales), enacted May 20, 2004;
    
    the concessions that entitle our subsidiaries to operate our 13 airports for a term
of fifty years beginning on November 1, 1998; and
    
    the Mexican Federal Economic Competition Law (Ley Federal de Competencia
Económica), enacted December 24, 1992.
   59




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Diario Oficial de la Federación
  Role of the Ministry of Communications and Transportation
  
    
    plan, formulate and establish the policies and programs for the development of the
national airport system;
    
    construct, administer and operate airports and airport-related services for the
public interest;
    
    grant, modify and revoke concessions for the operation of airports;
    
    establish air transit rules and rules regulating take-off and landing schedules
through the Mexican air traffic control authority;
    
    take all necessary action to create an efficient, competitive and
non-discriminatory market for airport-related services, and set forth the minimum
operating conditions for airports;
    
    establish safety regulations;
    
    close airports entirely or partially when safety requirements are not being satisfied;
 
 60




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##### Table of Contents




    
    monitor airport facilities to determine their compliance with the Mexican Airport
Law, other applicable laws and the terms of the concessions;
    
    maintain the Mexican aeronautical registry for registrations relating to airports;
    
    impose penalties for failure to observe and perform the rules under the Mexican
Airport Law, the regulations thereunder and the concessions;
    
    approve any transaction or transactions that directly or indirectly may result in a
change of control of a concession holder;
    
    approve the master development programs prepared by each concession holder every
five years;
    
    determine each airports maximum rates;
    
    approve any agreements entered into between a concession holder and a third party
providing airport or complementary services at its airport; and
    
    perform any other function specified by the Mexican Airport Law.
 Ley Orgánica
de la Administración Pública Federal
 Concession Tax
  Scope of Concessions
  61




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Ley de Aviación Civil
 62




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##### Table of Contents



General Obligations of Concession Holders
     Classification of Services Provided at Airports
  
    
    Airport Services.Airport services may be rendered only by the holder of a
concession or a third party that has entered into an agreement with the concession
holder to provide such services. These services include the following:
 63




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
    
    the use of airport runways, taxiways and aprons for landing, aircraft
parking and departure;
    
    the use of hangars, passenger walkways, transport buses and car parking
facilities;
    
    the provision of airport security services, rescue and firefighting
services, ground traffic control, lighting and visual aids;
    
    the general use of terminal space and other infrastructure by aircraft,
passengers and cargo; and
    
    the provision of access to an airport to third parties providing
complementary services (as defined in the Mexican Airport Law) and third
parties providing permanent ground transportation services (such as taxis).
 
    
    Complementary Services.Complementary services for which the airlines are
responsible may be rendered by an airline, by the airport operator or by a third party
under agreements with airlines and the airport operator. These services include:
ramp and handling services, checked baggage screening, aircraft security, catering,
cleaning, maintenance, repair and fuel supply (provided exclusively by the Mexican
governments Aeropuertos y Servicios Auxiliares, or ASA) and related activities that
provide support to air carriers.
    
    Commercial Services.Commercial services involve services that are not considered
essential to the operation of an airport or aircraft, and include, among other things,
the leasing of space to retailers, restaurants and banks, and advertising.
   force majeure force majeure force majeure
 64




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##### Table of Contents



Master Development Programs
   
    
    airport growth and development expectations;
    
    15-year projections for air traffic demand (including passenger, cargo and operations);
    
    construction, conservation, maintenance, expansion and modernization programs for
infrastructure, facilities and equipment;
    
    a binding five-year detailed investment program and planned major investments for
the following ten years;
    
    descriptive airport plans specifying the distinct uses for the corresponding airport areas;
    
    any financing sources; and
    
    environmental protection measures.
  65




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Revenue Regulation
  Regulated Revenues
   66




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##### Table of Contents



Historical Maximum Rates and Maximum Rates for 2006 through 2010
   67




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Historical Maximum Rates (1)
 Year Ended December 31,2001
    
    
    2002
    
    
    2003
    
    
    2004
    
    
    2005Acapulco
    
    Ps.
    127.72
    
    
    Ps.
    123.83
    
    
    Ps.
    122.59
    
    
    Ps.
    121.37
    
    
    Ps.
    120.16Ciudad Juárez
    
    
    104.37
    
    
    
    97.62
    
    
    
    96.63
    
    
    
    95.67
    
    
    
    94.71Culiacán
    
    
    119.69
    
    
    
    113.10
    
    
    
    111.98
    
    
    
    110.86
    
    
    
    109.74Chihuahua
    
    
    125.53
    
    
    
    108.81
    
    
    
    107.72
    
    
    
    106.64
    
    
    
    105.58Durango
    
    
    132.83
    
    
    
    128.70
    
    
    
    127.40
    
    
    
    126.13
    
    
    
    124.88Mazatlán
    
    
    118.23
    
    
    
    112.02
    
    
    
    110.90
    
    
    
    109.80
    
    
    
    108.69Monterrey
    
    
    122.61
    
    
    
    110.81
    
    
    
    109.71
    
    
    
    108.62
    
    
    
    107.53Reynosa
    
    
    130.64
    
    
    
    123.07
    
    
    
    121.83
    
    
    
    120.60
    
    
    
    119.41San Luis Potosí
    
    
    139.40
    
    
    
    93.24
    
    
    
    92.30
    
    
    
    91.38
    
    
    
    90.47Tampico
    
    
    132.10
    
    
    
    126.49
    
    
    
    125.22
    
    
    
    123.97
    
    
    
    122.73Torreón
    
    
    124.07
    
    
    
    118.98
    
    
    
    117.79
    
    
    
    116.62
    
    
    
    115.44Zacatecas
    
    
    129.18
    
    
    
    124.38
    
    
    
    123.12
    
    
    
    121.90
    
    
    
    120.68Zihuatanejo
    
    
    110.93
    
    
    
    108.22
    
    
    
    107.14
    
    
    
    106.07
    
    
    
    105.00
 
 (1)
    
    Expressed in constant pesos as of December 31, 2006. Current Maximum Rates (1)
 Year ended December 31,2006
    
    
    2007
    
    
    2008
    
    
    2009
    
    
    2010Acapulco
    
    Ps.
    134.77
    
    
    Ps.
    133.75
    
    
    Ps.
    132.75
    
    
    Ps.
    131.75
    
    
    Ps.
    130.76Ciudad Juárez
    
    
    105.30
    
    
    
    104.51
    
    
    
    103.73
    
    
    
    102.95
    
    
    
    102.18Culiacán
    
    
    116.54
    
    
    
    115.67
    
    
    
    114.81
    
    
    
    113.94
    
    
    
    113.08Chihuahua
    
    
    114.22
    
    
    
    113.37
    
    
    
    112.51
    
    
    
    111.67
    
    
    
    110.83Durango
    
    
    130.15
    
    
    
    129.17
    
    
    
    128.20
    
    
    
    127.24
    
    
    
    126.29Mazatlán
    
    
    133.76
    
    
    
    132.76
    
    
    
    131.76
    
    
    
    130.77
    
    
    
    129.80Monterrey
    
    
    107.79
    
    
    
    106.98
    
    
    
    106.18
    
    
    
    105.39
    
    
    
    104.60Reynosa
    
    
    122.07
    
    
    
    121.16
    
    
    
    120.25
    
    
    
    119.35
    
    
    
    118.45San Luis Potosí
    
    
    91.13
    
    
    
    90.45
    
    
    
    89.77
    
    
    
    89.10
    
    
    
    88.43Tampico
    
    
    129.11
    
    
    
    128.14
    
    
    
    127.19
    
    
    
    126.23
    
    
    
    125.28Torreón
    
    
    131.77
    
    
    
    130.77
    
    
    
    129.80
    
    
    
    128.82
    
    
    
    127.86Zacatecas
    
    
    136.55
    
    
    
    135.53
    
    
    
    134.51
    
    
    
    133.50
    
    
    
    132.50Zihuatanejo
    
    
    137.57
    
    
    
    136.54
    
    
    
    135.51
    
    
    
    134.50
    
    
    
    133.49
 
 (1)
    
    Expressed in constant pesos as of December 31, 2006. Methodology for Determining Future Maximum Rates
  
    
    Projections for the following fifteen years of workload units (each of which is
equivalent to one terminal passenger or 100 kilograms (220 pounds) of commercial
cargo), operating costs and expenses related to services subject to price regulation
and pre-tax earnings from services subject to price regulation. The concessions
provide that projections for workload units and
 68




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expenses related to regulated services are to be derived from the terms of the relevant
concession holders master development program for the following fifteen years.
 
    
    Projections for the following fifteen years of capital expenditures related to
regulated services, based on air traffic forecasts and quality of standards for
services to be derived from the master development programs.
    
    Reference values, which initially were established in the concessions and are
designed to reflect the net present value of the regulated revenues minus the
corresponding regulated operating costs and expenses (excluding amortization and
depreciation), and capital expenditures related to the provision of regulated services
plus a terminal value.
    
    A discount rate to be determined by the Ministry of Communications and
Transportation. The concessions provide that the discount rate shall reflect the cost
of capital to Mexican and international companies in the airport industry (on a
pre-tax basis), as well as Mexican economic conditions. The concessions provide that
the discount rate shall be at least equal to the average yield of long-term Mexican
government debt securities quoted in the international markets during the prior 24
months plus a risk premium to be determined by the Ministry of Communications and
Transportation based on the inherent risk of the airport business in Mexico.
    
    An efficiency factor to be determined by the Ministry of Communications and
Transportation. For the five-year period ending December 31, 2005, the maximum rates
applicable to our airports reflect a projected annual efficiency improvement of 1.0%.
For the five-year period ending December 31, 2010, the maximum rates applicable to our
airports reflect a projected annual efficiency improvement of 0.75%.
    69




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Special Adjustments to Maximum Rates
  
    
    Change in law or natural disasters.A concession holder may request an adjustment
in its maximum rates if a change in law with respect to quality standards or safety
and environmental protection results in operating costs or capital expenditures that
were not contemplated when its maximum rates were determined. In addition, a
concession holder may also request an adjustment in its maximum rates if a natural
disaster affects demand or requires unanticipated capital expenditures. There can be
no assurance that any request on these grounds would be approved.
    
    Macroeconomic conditions.A concession holder may also request an adjustment in
its maximum rates if, as a result of a decrease of at least 5% in Mexican gross
domestic product in a 12-month period, the workload units processed in the concession
holders airport are less than that projected when its master development program was
approved. To grant an adjustment under these circumstances, the Ministry of
Communications and Transportation under the master development program must have
already allowed the concession holder to decrease its projected capital improvements
as a result of the decline in passenger traffic volume. There can be no assurance
that any request on these grounds would be approved.
    
    Increase in concession tax under Mexican Federal Duties Law.An increase in duty
payable by a concession holder under the Mexican Federal Duties Law entitles the
concession holder to request an adjustment in its maximum rates. There can be no
assurance that any request on these grounds would be approved.
    
    Failure to make required investments or improvements.The Ministry of
Communications and Transportation annually is required to review each concession
holders compliance with its master development program (including the provision of
services and the making of capital investments). If a concession holder fails to
satisfy any of the investment commitments contained in its master development program,
the Ministry of Communications and Transportation is entitled to decrease the
concession holders maximum rates and assess penalties.
    
    Excess revenues.In the event that revenues subject to price regulation per
workload unit in any year exceed the applicable maximum rate, the maximum rate for the
following year will be decreased to compensate airport users for overpayment in the
previous year. Under these circumstances, the Ministry of Communications and
Transportation is also entitled to assess penalties against the concession holder.
 
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Ownership Commitments and Restrictions
    Reporting, Information and Consent Requirements
   
    
    if a person acquires 35% or more of the shares of a concession holder;
    
    if a person has the ability to control the outcome of meetings of the stockholders
of a concession holder;
    
    if a person has the ability to appoint a majority of the members of the board of
directors of a concession holder; or
    
    if a person by any other means acquires control of an airport.
   71




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Penalties and Termination and Revocation of Concessions and Concession Assets
 Termination of Concessions
  
    
    the expiration of its term;
    
    the surrender by the concession holder;
    
    the revocation of the concession by the Ministry of Communications and Transportation;
    
    the reversion of the Mexican government-owned assets that are the subject of the
concession (principally real estate, improvements and other infrastructure);
    
    the inability to achieve the purpose of the concession, except in the event of
force majeure;
    
    the dissolution, liquidation or bankruptcy of the concession holder; or
    
    the failure by the concession holder to satisfy the shareholding obligations set
forth in the concession.
  Revocation of Concessions
  
    
    the failure by a concession holder to begin operating, maintaining and developing
an airport pursuant to the terms established in the concession;
    
    the failure by a concession holder to maintain insurance as required under the
Mexican Airport Law;
    
    the assignment, encumbrance, transfer or sale of a concession, any of the rights
thereunder or the assets underlying the concession in violation of the Mexican Airport
Law;
    
    any alteration of the nature or condition of an airports facilities without the
authorization of the Ministry of Communications and Transportation;
    
    use, with a concession holders consent or without the approval of air traffic
control authorities, of an airport by any aircraft that does not comply with the
requirements of the Mexican Civil Aviation Law, that has not been authorized by the
Mexican air traffic control authority, or that is involved in the commission of a
felony;
 
 72




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
    
    knowingly appointing a chief executive officer or board member of a concession
holder that is not qualified to perform his functions under the law as a result of
having violated criminal laws;
    
    the failure by the concession holder to pay the Mexican government the concession
tax;
    
    our failure to beneficially own at least 51% of the capital stock of its subsidiary
concession holders;
    
    a violation of the safety regulations established in the Mexican Airport Law and
other applicable laws;
    
    a total or partial interruption of the operation of an airport or its airport or
complementary services without justified cause;
    
    the failure to maintain the airports facilities;
    
    the provision of unauthorized services;
    
    the failure to indemnify a third party for damages caused by the provision of
services by the concession holder or a third-party service provider;
    
    charging prices higher than those registered with the Ministry of Communications
and Transportation for regulated services or exceeding the applicable maximum rate;
    
    any act or omission that impedes the ability of other service providers or
authorities to carry out their functions within the airport; or
    
    any other failure to comply with the Mexican Airport Law, its regulations and the
terms of a concession.
    requisa
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Consequences of Termination or Revocation of a Concession
   Grants of New Concessions
  
    
    parties who hold permits to operate civil aerodromes and intend to transform the
aerodrome into an airport so long as (i) the proposed change is consistent with the
national airport development programs and policies, (ii) the civil aerodrome has been
in continuous operation for the previous 5 years and (iii) the permit holder complies
with all requirements of the concession,
 74




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
    
    current concession holders when necessary to meet increased demand so long as (i) a
new airport is necessary to increase existing capacity, (ii) the operation of both
airports by a single concession holder is more efficient than other options, and (iii)
the concession holder complies with all requirements of the concession,
    
    current concession holders when it is in the public interest for their airport to be relocated,
    
    entities in the federal public administration, and
    
    commercial entities in which local or municipal governments have a majority equity
interest if the entities corporate purpose is to manage, operate, develop and/or
construct airports.
 Environmental Matters
 Regulation
 Ley
General del Equilibrio Ecológico y la Protección al Ambiente ) General Environmental Law, Secretaría de Medio Ambiente y Recursos Naturales Procuraduría Federal de
Protección al Ambiente Ley General para la Prevención y Gestión Integral de los Residuos Law on Waste Ley de
Aguas Nacionales Comisión Nacional del Agua)
   75




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Normas Oficiales Mexicanas Ley General de Metrología y Normalización
   Certificados de Cumplimiento Ambiental
 Liability for Environmental Noncompliance
  76




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ORGANIZATIONAL STRUCTURE
  Jurisdiction of
    
    PercentageName of Company
    
    Establishment
    
    Owned
    
    DescriptionAeropuerto de
Acapulco, S.A. de
C.V.
    
    Mexico
    
    
    100
    
    
    Holds concession for Acapulco International AirportAeropuerto de
Ciudad Juárez, S.A.
de C.V.
    
    Mexico
    
    
    100
    
    
    Holds concession for Ciudad Juárez International AirportAeropuerto de
Culiacán, S.A. de
C.V.
    
    Mexico
    
    
    100
    
    
    Holds concession for Culiacán International AirportAeropuerto de
Chihuahua, S.A. de
C.V.
    
    Mexico
    
    
    100
    
    
    Holds concession for Chihuahua International AirportAeropuerto de
Durango, S.A. de
C.V.
    
    Mexico
    
    
    100
    
    
    Holds concession for Durango International AirportAeropuerto de
Mazatlán, S.A. de
C.V
    
    Mexico
    
    
    100
    
    
    Holds concession for Mazatlán International AirportAeropuerto de
Monterrey, S.A. de
C.V.
    
    Mexico
    
    
    100
    
    
    Holds concession for Monterrey International AirportAeropuerto de
Reynosa, S.A. de
C.V.
    
    Mexico
    
    
    100
    
    
    Holds concession for Reynosa International AirportAeropuerto de San
Luis Potosí, S.A.
de C.V.
    
    Mexico
    
    
    100
    
    
    Holds concession for San Luis Potosí International AirportAeropuerto de
Tampico, S.A. de
C.V.
    
    Mexico
    
    
    100
    
    
    Holds concession for Tampico International AirportAeropuerto de
Torreón, S.A. de
C.V.
    
    Mexico
    
    
    100
    
    
    Holds concession for Torreón International AirportAeropuerto de
Zacatecas, S.A. de
C.V.
    
    Mexico
    
    
    100
    
    
    Holds concession for Zacatecas International AirportAeropuerto de
Zihuatanejo, S.A.
de C.V.
    
    Mexico
    
    
    100
    
    
    Holds concession for Zihuatanejo International AirportServicios
Aeroportuarios del
Centro Norte, S.A.
de C.V.
    
    Mexico
    
    
    100
    
    
    Provider of administrative and other services at certain of our airports.
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##### Table of Contents



PROPERTY, PLANT AND EQUIPMENT
    
 Item 4A. Unresolved Staff Comments
  
 Item 5. Operating and Financial Review and Prospects
   Overview
  79




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Passenger and Cargo Volumes
  80




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Year ended December 31,2004
    
    2005
    
    2006Domestic terminal passengers(1)
    
    
    7,568.7
    
    
    
    8,118.9
    
    
    
    9,258International terminal passengers(1)
    
    
    2,170.7
    
    
    
    2,479.8
    
    
    
    2,525Total terminal passengers(1)
    
    
    9,739.4
    
    
    
    10,598.7
    
    
    
    11,783.6Cargo(1)
    
    
    790.4
    
    
    
    808.6
    
    
    
    810.9Total workload units(1)
    
    
    10,529.8
    
    
    
    11,407.3
    
    
    
    12,594.5Change in total terminal passengers(2)
    
    
    10.0
    %
    
    
    8.8
    %
    
    
    11.2
    %Change in workload units(2)
    
    
    10.1
    %
    
    
    8.3
    %
    
    
    10.4
    %Aeronautical revenue(3)
    
    Ps.
    1,044.4
    
    
    Ps.
    1,149.1
    
    
    Ps.
    1,321.3Change in aeronautical revenue(2)
    
    
    7.7
    %
    
    
    10.0
    %
    
    
    15
    %Aeronautical revenue per workload unit
    
    Ps.
    99.0
    
    
    Ps.
    101.0
    
    
    Ps.
    104.9Change in aeronautical revenue per workload unit(1)(2)
    
    
    (2.2
    )%
    
    
    1.6
    %
    
    
    3.9
    %Non-aeronautical revenue(3)
    
    Ps.
    241.6
    
    
    Ps.
    277.2
    
    
    Ps.
    304.9Change in non-aeronautical revenue(2)
    
    
    26.5
    %
    
    
    14.7
    %
    
    
    10
    %Non-aeronautical revenue per terminal passenger
    
    Ps.
    25.0
    
    
    Ps.
    26.2
    
    
    Ps.
    25.9Change in non-aeronautical revenue per terminal passenger(2)
    
    
    15.0
    %
    
    
    5.4
    %
    
    
    (0.4
    )%
 
 (1)
    
    In thousands. One cargo unit is equivalent to 100 kilograms (220 pounds) of cargo. Under
the regulation applicable to OMAs aeronautical revenues, one workload unit is equivalent to
one terminal passenger or 100 kilograms (220 pounds) of cargo.(2)
    
    In each case, as compared to previous period.(3)
    
    In millions of constant pesos.  Classification of Revenues
    81




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Aeronautical Revenue
   Aeronautical Revenue
 Year ended December 31,2004
    
    
    2005
    
    
    2006Amount
    
    
    Percent
    
    
    Amount
    
    
    Percent
    
    
    Amount
    
    
    Percent(millions of pesos, except percentages)Aeronautical Revenue:Passenger charges
    
    Ps.
    721.0
    
    
    
    69.0
    %
    
    Ps.
    807.0
    
    
    
    70.2
    %
    
    Ps.
    966.7
    
    
    
    73.2
    %Landing charges
    
    
    102.0
    
    
    
    9.8
    
    
    
    109.0
    
    
    
    9.5
    
    
    
    110.0
    
    
    
    8.3Aircraft parking charges
    
    
    85.0
    
    
    
    8.2
    
    
    
    87.4
    
    
    
    7.6
    
    
    
    89.2
    
    
    
    6.7Airport security charges
    
    
    15.0
    
    
    
    1.4
    
    
    
    17.0
    
    
    
    1.5
    
    
    
    18.6
    
    
    
    1.4Passenger walkway charges
    
    
    23.0
    
    
    
    2.2
    
    
    
    26.6
    
    
    
    2.3
    
    
    
    23.9
    
    
    
    1.8Leasing of space to airlines
    
    
    98.0
    
    
    
    9.4
    
    
    
    101.5
    
    
    
    8.8
    
    
    
    113.0
    
    
    
    8.6Revenues from complementary
service
providers(1)
    
    
    0.4
    
    
    
    0.0
    
    
    
    0.5
    
    
    
    0.1
    
    
    
    0.0
    
    
    
    0.0Total Aeronautical Revenue
    
    Ps.
    1,044.4
    
    
    
    100.0
    %
    
    Ps.
    1,149.0
    
    
    
    100.0
    %
    
    Ps.
    1,321.3
    
    
    
    100.0
    %
 
 (1)
    
    Revenues from complementary service providers consist of access and other fees charged to
third parties providing handling, catering and other services at OMAs airports.   82




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Dirección General de Aeronáutica Civil
 1.
    
    The carrier must sign a binding agreement with OMA pursuant to which it agrees
to meet criteria 2 through 4 below;2.
    
    The carrier must generate additional traffic levels of 1 million and 2.5
million terminal passengers at the Monterrey International Airport in each of the first
and second years, respectively, during which it receives the discount and 3 million
terminal passengers in each subsequent year. Such additional passengers may not be as
a result of an alliance, agreement, merger or similar transaction. These targets
relate only to passengers using Monterrey International Airport and do not include
transit passengers;3.
    
    The carrier must establish or construct its administrative and operation
offices and maintenance, operations and traffic facilities on the Monterrey
International Airport property; and4.
    
    The carrier must use the terminal building and/or platforms assigned to it by
OMA for its operations.
     83




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Non-aeronautical Revenue
  84




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##### Table of Contents



Non-aeronautical Revenue
 Year ended December 31,2004
    
    
    2005
    
    
    2006Amount
    
    
    Percent
    
    
    Amount
    
    
    Percent
    
    
    Amount
    
    
    Percent(millions of pesos, except percentages)Non-aeronautical Revenue:Commercial Activities:Car parking charges
    
    Ps.
    75.7
    
    
    
    31.3
    %
    
    Ps.
    78.9
    
    
    
    28.5
    %
    
    Ps.
    87.5
    
    
    
    28.7
    %Advertising
    
    
    24.0
    
    
    
    9.9
    
    
    
    31.6
    
    
    
    11.4
    
    
    
    34.7
    
    
    
    11.4Leasing of space(1)
    
    
    25.3
    
    
    
    10.5
    
    
    
    33.1
    
    
    
    11.9
    
    
    
    35.0
    
    
    
    11.5Car rentals
    
    
    15.9
    
    
    
    6.6
    
    
    
    20.2
    
    
    
    7.3
    
    
    
    22.9
    
    
    
    7.5Food and beverage operations
    
    
    13.3
    
    
    
    5.5
    
    
    
    17.8
    
    
    
    6.4
    
    
    
    23.8
    
    
    
    7.8Retail operations
    
    
    24.9
    
    
    
    10.3
    
    
    
    28.1
    
    
    
    10.1
    
    
    
    29.5
    
    
    
    9.7Duty-free operations
    
    
    15.1
    
    
    
    6.3
    
    
    
    16.1
    
    
    
    5.8
    
    
    
    15.4
    
    
    
    5.1Communications
    
    
    2.8
    
    
    
    1.2
    
    
    
    3.4
    
    
    
    1.3
    
    
    
    3.8
    
    
    
    1.2Financial services
    
    
    1.4
    
    
    
    0.6
    
    
    
    2.0
    
    
    
    0.7
    
    
    
    1.5
    
    
    
    0.5Time share
    
    
    16.7
    
    
    
    6.9
    
    
    
    16.2
    
    
    
    5.9
    
    
    
    16.5
    
    
    
    5.4Other
    
    
    13.7
    
    
    
    5.7
    
    
    
    17.5
    
    
    
    6.3
    
    
    
    21.0
    
    
    
    6.9Total commercial activities
    
    
    229.0
    
    
    
    94.8
    
    
    
    264.9
    
    
    
    95.6
    
    
    
    291.6
    
    
    
    95.6Recovery of costs(2)
    
    
    12.6
    
    
    
    5.2
    
    
    
    12.3
    
    
    
    4.4
    
    
    
    13.3
    
    
    
    4.4Total Non-aeronautical Revenue
    
    Ps.
    241.6
    
    
    
    100.0
    %
    
    Ps.
    277.2
    
    
    
    100.0
    %
    
    Ps.
    304.9
    
    
    
    100.0
    %
 
 (1)
    
    Includes leasing of space in our airports to airlines and complementary service providers
(for first class/VIP lounges and other similar non-essential activities).(2)
    
    Recovery of costs consists of utility and maintenance charges that are transferred to
airlines and other tenants in our airports.  85




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Operating Costs
  Operating Costs
 Year ended December 31,2004
    
    2005
    
    2006Amount
    
    % change
    
    Amount
    
    % change
    
    Amount
    
    % change(In millions of Pesos except percentages)Operating Costs:Cost of services:Employee costs
    
    
    115.0
    
    
    
    3.7
    %
    
    
    122.7
    
    
    
    6.7
    %
    
    
    135.2
    
    
    
    10.2
    %Maintenance
    
    
    46.0
    
    
    
    8.5
    
    
    
    52.0
    
    
    
    13.0
    
    
    
    52.8
    
    
    
    1.5Safety, security & insurance
    
    
    63.7
    
    
    
    8.3
    
    
    
    69.1
    
    
    
    8.4
    
    
    
    66.4
    
    
    
    (3.9
    )Utilities
    
    
    78.1
    
    
    
    2.9
    
    
    
    83.6
    
    
    
    7.0
    
    
    
    88.9
    
    
    
    6.3Other
    
    
    42.8
    
    
    
    4.8
    
    
    
    47.6
    
    
    
    11.1
    
    
    
    39.6
    
    
    
    (16.8
    )Total cost of services
    
    
    345.6
    
    
    
    5.1
    
    
    
    375.0
    
    
    
    8.5
    
    
    
    382.9
    
    
    
    2.1General and administrative expenses
    
    
    233.3
    
    
    
    (5.2
    )
    
    
    235.8
    
    
    
    1.1
    
    
    
    228.9
    
    
    
    (2.9
    )Technical assistance fees
    
    
    38.8
    
    
    
    1.6
    
    
    
    38.6
    
    
    
    (0.5
    )
    
    
    47.7
    
    
    
    23.6Concession taxes
    
    
    62.4
    
    
    
    9.6
    
    
    
    70.0
    
    
    
    12.1
    
    
    
    81.6
    
    
    
    16.6Depreciation and amortization:Depreciation(1)
    
    
    190.9
    
    
    
    8.1
    
    
    
    201.5
    
    
    
    5.5
    
    
    
    253.0
    
    
    
    25.6Amortization(2)
    
    
    17.1
    
    
    
    (0.6
    )
    
    
    18.1
    
    
    
    5.8
    
    
    
    28.5
    
    
    
    57.5Total depreciation and amortization
    
    
    208.0
    
    
    
    7.4
    
    
    
    219.6
    
    
    
    5.6
    
    
    
    281.5
    
    
    
    28.2Total operating costs
    
    
    888.1
    
    
    
    2.8
    %
    
    
    939.0
    
    
    
    5.7
    %
    
    
    1,022.6
    
    
    
    8.9
    %
 
 (1)
    
    Reflects depreciation of fixed assets.(2)
    
    Reflects amortization of our concessions and rights to use airport facilities. Cost of Services
  General and Administrative Expenses
  Technical Assistance Fee and Concession Tax
  86




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Depreciation and Amortization
  Taxation
     87




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Effects of Devaluation and Inflation
  
    
    the percentage that the Mexican peso devalued or appreciated against the U.S. dollar;
    
    the Mexican inflation rate;
    
    the U.S. inflation rate; and
    
    the percentage that Mexican gross domestic product, or GDP, changed as compared to
the previous period.
 Year ended December 31,2004
    
    2005
    
    2006Depreciation (appreciation) of the Mexican
peso as computed to the U.S. dollar(1)
    
    
    (0.8
    )%
    
    
    (4.6
    )%
    
    
    1.6
    %Mexican inflation rate(2)
    
    
    5.2
    %
    
    
    3.3
    %
    
    
    4.1
    %U.S. inflation rate(3)
    
    
    3.3
    %
    
    
    3.4
    %
    
    
    2.5
    %Increase (decrease) in Mexican gross domestic product(4)
    
    
    4.2
    %
    
    
    3.0
    %
    
    
    4.8
    %
 
 (1)
    
    Based on changes in the rates for calculating foreign exchange liabilities, as reported by
Banco de Mexico, or the Mexican Central Bank, at the end of each period, which were as
follows: Ps.11.1495 per U.S. dollar as of December 31, 2004, Ps.10.6344 per U.S. dollar as of
December 30, 2005, and Ps.10.80 per U.S. dollar as of December 31, 2006.(2)
    
    Based on changes in the Mexican Consumer Price Index from the previous period, as reported by
the Mexican Central Bank. The Mexican Consumer Price Index at period-end was 112.550 in 2004,
116.301 in 2005 and 121.015 in 2006.(3)
    
    As reported by the U.S. Department of Labor, Bureau of Labor Statistics.(4)
    
    In real terms, as reported by the Mexican Central Bank.  
    
    Depreciation and amortization expense. We restate our non-monetary assets to give
effect to inflation. The restatement of these assets in periods of high inflation
increases the carrying value of these assets in pesos, which in turn increases the
related depreciation expense and risk of impairments.
    
    Passenger charges. Passenger charges for international passengers are currently
denominated in U.S. dollars (although invoiced and paid in Mexican pesos), while
passenger charges for domestic passengers are denominated in pesos. Because Mexican
FRS requires Mexican companies to restate their results of operations for prior
periods in constant pesos as of the most recent balance sheet date, when the rate of
inflation in a period exceeds the depreciation of the peso as compared to the dollar
for that period, the peso value of dollar-denominated or dollar-linked revenues in the
prior period will be higher than those
 
 88




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##### Table of Contents

\


    
    of the current period. This effect may occur despite the fact that the amount of such
revenues in dollar terms may have been the same or greater in the current period.
    
    Comprehensive financing cost. As required by Mexican FRS, our comprehensive
financing cost reflects gains or losses from foreign exchange transactions and gains
or losses from monetary position and, as a result, is impacted by both inflation and
devaluations.
    
    Maximum rates in pesos.Our passenger charges for international passengers are
denominated in U.S. dollars, but are invoiced and paid in Mexican pesos based on the
average exchange rate for the month prior to each flight.
 Operating Results by Airport
  Airport Operating Results
 Year ended December 31,2004
    
    2005
    
    2006(millions of pesos, except percentages)Monterrey:Revenues:Aeronautical services
    
    
    442.5
    
    
    
    481.2
    
    
    
    565.9Non-aeronautical services
    
    
    112.1
    
    
    
    137.2
    
    
    
    152.0Total revenues
    
    
    554.6
    
    
    
    618.4
    
    
    
    717.9Operating costs
    
    
    277.0
    
    
    
    295.6
    
    
    
    631.5Costs of services
    
    
    95.3
    
    
    
    99.9
    
    
    
    100.1General and administrative expenses
    
    
    81.7
    
    
    
    86.1
    
    
    
    421.9Depreciation and amortization
    
    
    58.7
    
    
    
    63.3
    
    
    
    73.3Income from operations
    
    
    277.6
    
    
    
    322.8
    
    
    
    86.4Operating margin(1)
    
    
    50.1
    %
    
    
    52.2
    %
    
    
    12.0
    %Acapulco:Revenues:Aeronautical services
    
    
    93.5
    
    
    
    103.5
    
    
    
    119.0Non-aeronautical services
    
    
    18.2
    
    
    
    18.6
    
    
    
    20.6Total revenues
    
    
    111.7
    
    
    
    122.1
    
    
    
    139.6Operating costs
    
    
    101.5
    
    
    
    110.4
    
    
    
    120.3Costs of services
    
    
    39.0
    
    
    
    47.5
    
    
    
    48.3General and administrative expenses
    
    
    25.1
    
    
    
    24.4
    
    
    
    28.3Depreciation and amortization
    
    
    27.7
    
    
    
    29.3
    
    
    
    36.9Income from operations
    
    
    10.2
    
    
    
    11.7
    
    
    
    19.3Operating margin(1)
    
    
    9.1
    %
    
    
    9.6
    %
    
    
    13.8
    %Mazatlán:Revenues:Aeronautical services
    
    
    81.9
    
    
    
    87.2
    
    
    
    93.6Non-aeronautical services
    
    
    27.5
    
    
    
    29.7
    
    
    
    30.1Total revenues
    
    
    109.4
    
    
    
    116.9
    
    
    
    123.7Operating costs
    
    
    84.6
    
    
    
    89.4
    
    
    
    108.5Costs of services
    
    
    31.0
    
    
    
    32.0
    
    
    
    34.3General and administrative expenses
    
    
    22.4
    
    
    
    26.2
    
    
    
    42.6Depreciation and amortization
    
    
    22.0
    
    
    
    22.4
    
    
    
    25.4Income from operations
    
    
    24.8
    
    
    
    27.5
    
    
    
    15.2Operating margin(1)
    
    
    22.7
    %
    
    
    23.6
    %
    
    
    12.3
    %Culiacán:Revenues:Aeronautical services
    
    
    71.8
    
    
    
    85.3
    
    
    
    95.2Non-aeronautical services
    
    
    12.5
    
    
    
    13.5
    
    
    
    15.8Total revenues
    
    
    84.3
    
    
    
    98.8
    
    
    
    111.0Operating costs
    
    
    61.6
    
    
    
    67.9
    
    
    
    97.4Costs of services
    
    
    23.9
    
    
    
    24.6
    
    
    
    25.7General and administrative expenses
    
    
    13.3
    
    
    
    17.4
    
    
    
    46.6
 89




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Year ended December 31,2004
    
    
    2005
    
    
    2006(millions of pesos, except percentages)Depreciation and amortization
    
    
    17.9
    
    
    
    18.1
    
    
    
    19.5Income from operations
    
    
    22.7
    
    
    
    31.0
    
    
    
    13.6Operating margin(1)
    
    
    27.0
    %
    
    
    31.3
    %
    
    
    12.3
    %Chihuahua:Revenues:Aeronautical services
    
    
    61.9
    
    
    
    69.6
    
    
    
    79.8Non-aeronautical services
    
    
    11.7
    
    
    
    13.8
    
    
    
    16.1Total revenues
    
    
    73.6
    
    
    
    83.4
    
    
    
    95.9Operating costs
    
    
    50.3
    
    
    
    62.6
    
    
    
    84.1Costs of services
    
    
    19.6
    
    
    
    23.4
    
    
    
    25.7General and administrative expenses
    
    
    14.4
    
    
    
    20.1
    
    
    
    38.6Depreciation and amortization
    
    
    10.6
    
    
    
    12.7
    
    
    
    15.0Income from operations
    
    
    23.3
    
    
    
    20.8
    
    
    
    11.8Operating margin(1)
    
    
    31.6
    %
    
    
    25.1
    %
    
    
    12.3
    %Zihuatanejo:Revenues:Aeronautical services
    
    
    62.4
    
    
    
    63.0
    
    
    
    74.7Non-aeronautical services
    
    
    14.4
    
    
    
    14.3
    
    
    
    16.1Total revenues
    
    
    76.8
    
    
    
    77.3
    
    
    
    90.8Operating costs
    
    
    62.1
    
    
    
    62.9
    
    
    
    79.7Costs of services
    
    
    22.7
    
    
    
    23.8
    
    
    
    25.1General and administrative expenses
    
    
    17.2
    
    
    
    16.3
    
    
    
    31.6Depreciation and amortization
    
    
    16.1
    
    
    
    16.6
    
    
    
    18.4Income from operations
    
    
    14.7
    
    
    
    14.5
    
    
    
    11.1Operating margin(1)
    
    
    19.0
    %
    
    
    18.7
    %
    
    
    12.2
    %Other:(2)Revenues:Aeronautical services
    
    
    230.5
    
    
    
    259.3
    
    
    
    293.0Non-aeronautical services
    
    
    45.3
    
    
    
    50.1
    
    
    
    53.9Total revenues
    
    
    275.8
    
    
    
    309.4
    
    
    
    346.9Operating costs
    
    
    250.5
    
    
    
    259.1
    
    
    
    303.5Costs of services
    
    
    112.8
    
    
    
    118.8
    
    
    
    123.0General and administrative expenses
    
    
    62.9
    
    
    
    62.8
    
    
    
    81.1Depreciation and amortization
    
    
    53.1
    
    
    
    53.8
    
    
    
    82.1Income from operations
    
    
    25.3
    
    
    
    50.3
    
    
    
    43.5Operating margin(1)
    
    
    9.2
    %
    
    
    16.2
    %
    
    
    12.5
    %Total:(3)Revenues:Aeronautical services
    
    
    1,044.5
    
    
    
    1,149.1
    
    
    
    1321.3Non-aeronautical services
    
    
    241.7
    
    
    
    277.2
    
    
    
    304.7Total revenues
    
    
    1,286.2
    
    
    
    1,426.3
    
    
    
    1626.0Operating costs
    
    
    887.6
    
    
    
    947.8
    
    
    
    1425.1Costs of services
    
    
    344.3
    
    
    
    370.1
    
    
    
    382.2General and administrative expenses
    
    
    237.0
    
    
    
    253.3
    
    
    
    690.7Depreciation and amortization
    
    
    206.1
    
    
    
    216.3
    
    
    
    270.7Income from operations
    
    
    398.6
    
    
    
    478.5
    
    
    
    200.9Operating margin(1)
    
    
    31.0
    %
    
    
    33.5
    %
    
    
    12.4
    %
 
 (1)
    
    We determine operating margin per airport by dividing income from operations at each
airport or group of airports by total revenues for that airport or group of airports.(2)
    
    Reflects the results of operations of our airports located in Ciudad Juárez, Durango,
Reynosa, San Luis Potosí, Tampico, Torreón and Zacatecas.(3)
    
    Includes intercompany transactions between us and our subsidiaries and among our
subsidiaries. During 2006, we adopted a financial strategy that enables us to recognize
results by considering our subsidiaries as one economic unit, making corporate charges and
credits to and from our subsidiaries for the purpose of establishing sufficient cash flow at
each subsidiary to support such subsidiarys respective obligations. The implementation of
this strategy will affect operating income results reported by individual airports but will
not affect our consolidated results.  90




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Summary Historical Results of Operations
  Summary Consolidated Operating ResultsYear ended December 31,2004
    
    2005
    
    2006(thousands of pesos, except percentages)%
    
    
    
    
    
    %
    
    
    
    
    
    %Amount
    
    change
    
    Amount
    
    change
    
    Amount
    
    changeRevenues:Aeronautical services
    
    
    1,044,448
    
    
    
    7.7
    %
    
    
    1,149,056
    
    
    
    10.0
    %
    
    
    1,321,300
    
    
    
    15.0
    %Non-aeronautical services
    
    
    241,636
    
    
    
    26.5
    %
    
    
    277,208
    
    
    
    14.7
    %
    
    
    304,882
    
    
    
    10.0
    %Total revenues
    
    
    1,286,084
    
    
    
    10.8
    %
    
    
    1,426,264
    
    
    
    10.9
    %
    
    
    1,626,182
    
    
    
    14.0
    %Operating costs:Cost of services
    
    
    345,565
    
    
    
    5.1
    %
    
    
    374,943
    
    
    
    8.5
    %
    
    
    383,065
    
    
    
    2.2
    %General and administrative expenses
    
    
    233,296
    
    
    
    (5.3
    )%
    
    
    235,842
    
    
    
    1.1
    %
    
    
    228,872
    
    
    
    (3.0
    )%Technical assistance fees
    
    
    38,758
    
    
    
    1.7
    %
    
    
    38,566
    
    
    
    (0.5
    )%
    
    
    47,746
    
    
    
    23.8
    %Concession taxes
    
    
    62,531
    
    
    
    9.7
    %
    
    
    70,011
    
    
    
    12.0
    %
    
    
    81,569
    
    
    
    16.5
    %Depreciation and amortization
    
    
    208,027
    
    
    
    7.4
    %
    
    
    219,552
    
    
    
    5.5
    %
    
    
    281,514
    
    
    
    28.2
    %Total operating costs
    
    
    888,177
    
    
    
    2.8
    %
    
    
    938,914
    
    
    
    5.7
    %
    
    
    1,022,766
    
    
    
    8.9
    %Income from operations
    
    
    397,907
    
    
    
    34.1
    %
    
    
    487,350
    
    
    
    22.5
    %
    
    
    603,416
    
    
    
    23.8
    %Net comprehensive financing income (expense):Interest income, net
    
    
    50,163
    
    
    
    64.5
    %
    
    
    105,177
    
    
    
    109.7
    %
    
    
    128,614
    
    
    
    22.3
    %Exchange gain (loss), net
    
    
    (4,555
    )
    
    
    (113.7
    )%
    
    
    (25,486
    )
    
    
    459.6
    %
    
    
    11,995
    
    
    
    (147.1
    )%Monetary position loss
    
    
    (60,395
    )
    
    
    56.2
    %
    
    
    (51,151
    )
    
    
    (15.3
    )%
    
    
    (72,829
    )
    
    
    42.4
    %Net comprehensive financing income (expense)
    
    
    (14,787
    )
    
    
    (159.2
    )%
    
    
    28,540
    
    
    
    (293.0
    )%
    
    
    67,780
    
    
    
    137.5
    %Other income
    
    
    4,440
    
    
    
    65.1
    %
    
    
    5,182
    
    
    
    16.7
    %
    
    
    10,413
    
    
    
    100.9
    %Income before income taxes and statutory employee profit sharing
    
    
    387,560
    
    
    
    19.4
    %
    
    
    521,072
    
    
    
    34.4
    %
    
    
    681,609
    
    
    
    30.8
    %Income taxes and statutory employee profit sharing expense
    
    
    90,458
    
    
    
    (35.5
    )%
    
    
    153,773
    
    
    
    70.0
    %
    
    
    229,372
    
    
    
    49.2
    %Consolidated net income
    
    
    297,102
    
    
    
    61.2
    %
    
    
    367,299
    
    
    
    23.6
    %
    
    
    452,237
    
    
    
    23.1
    %Other operating data (unaudited):Operating margin(1)
    
    
    30.9
    %
    
    
    
    
    
    
    34.2
    %
    
    
    
    
    
    
    37.1
    %Net margin(2)
    
    
    23.1
    %
    
    
    
    
    
    
    25.8
    %
    
    
    
    
    
    
    27.8
    %
 
 (1)
    
    Income from operations divided by total revenue, expressed as a percentage.(2)
    
    Net income divided by total revenues, expressed as a percentage. Results of operations for the year ended December 31, 2006 compared to the year ended December
31, 2005.
 Revenues
   91




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Operating Results
 Cost of Services
  General and Administrative Expenses
  Technical Assistance Fee and Concession Tax
  Depreciation and Amortization
  Income from Operations
  92




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Comprehensive Financing Result
  Income Taxes, Statutory Employee Profit Sharing and Asset Tax
  Net Income
  Results of operations for the year ended December 31, 2005 compared to the year ended December 31,
2004
 Revenues
    93




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Operating Results
 Cost of Services
  General and Administrative Expenses
  Technical Assistance Fee and Concession Tax
  Depreciation and Amortization
  Income from Operations
   94




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Comprehensive Financing Result
  Income Taxes, Employees Statutory Profit Sharing and Asset Tax
  Net Income
  Liquidity and Capital Resources
    95




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96




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##### Table of Contents



Share Repurchase Program
  Critical Accounting Policies
  Income Taxes, Asset Tax and Employee Profit Sharing
 Accounting for Income Tax, Asset Tax and Employee Statutory
Profit Sharing
     97




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##### Table of Contents



Impairment in the Value of Long-Lived Assets
     Principal Differences Between Mexican FRS and U.S. GAAP
   Off-balance Sheet Arrangements
  Tabular Disclosure of Contractual Obligations
 Payments due by periodContractual Obligations
    
    
    
    
    
    Less than 1
    
    
    
    
    
    
    
    
    
    
    More than 5Total
    
    
    year(2)
    
    
    1-3 years
    
    
    3-5 years
    
    
    years(in millions of pesos)Master development programs
    
    PS.
    1,821
    
    
    PS.
    1,049
    
    
    Ps.
    674
    
    
    Ps.
    98
    
    
    

    N/A
    (3)Purchase obligations(1)
    
    
    332
    
    
    
    18
    
    
    
    74
    
    
    
    74
    
    
    
    166Total
    
    Ps.
    2,153
    
    
    Ps.
    1,067
    
    
    Ps.
    748
    
    
    Ps.
    172
    
    
    Ps.
    166
 98




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##### Table of Contents



(1)
    
    Reflects minimum fixed annual payment of U.S.$3 million required to be paid under OMAs
Technical Assistance Agreement, assuming an average exchange rate of Ps.11.2865 per U.S.
dollar and an annual U.S. inflation rate of 2.4%. The amount ultimately to be paid in any
year will depend on OMAs profitability.(2)
    
    Amount for less than one year corresponds to obligations for the remainder of 2007.(3)
    
    In year five of the master development programs, a negotiation will take place with the
Ministry of Communications and Transportation to determine the new master development program
commitments for the subsequent five-year period. New Accounting Pronouncements
 Mexican FRS
 CINIF
 Normas de Información Financiera IFRS
 CF
  
    
    NIF B-3, Statement of Income
    
    NIF B-13, Events Occurring after the Date of the Financial Statements
    
    NIF C-13, Related Parties
    
    NIF D-6, Capitalization of Comprehensive Financing Result
  99




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100




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U.S. GAAP
 Accounting for Uncertainty in Income Taxes Accounting for
Income Taxes
 Considering the
Effects of Prior Year Misstatements When Quantifying Misstatements in Current Year Financial
Statements
 Fair Value Measurements
 Employers Accounting for Defined Benefit
Pension and Other Postretirement Plans
 Share-Based Payments
 102




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APB Accounting for Stock Issued to Employees
 Accounting Changes and Error Corrections  a
replacement of APB Opinion No. 20 and FASB Statement No. 3
 
 Item 6.  Directors, Senior Management and Employees
 Directors
    103




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Name
    
    Title
    
    Director since
    
    AgeBernardo Quintana Isaac
    
    Chairman and Director
    
    December 21, 2005
    
    65Alberto Felipe Mulás Alonso
    
    Independent Director
    
    October 2, 2006
    
    46Salvador Alva Gómez
    
    Independent Director
    
    October 2, 2006
    
    56Manuel Francisco Arce Rincón
    
    Independent Director
    
    October 2, 2006
    
    66Luis Guillermo Zazueta Domínguez
    
    Independent Director
    
    October 2, 2006
    
    61Fernando Flores Pérez
    
    Independent Director
    
    April 29, 2007
    
    61Luis Fernando Zárate Rocha*
    
    Director
    
    September 22, 2000
    
    63Alonso Quintana Kawage*
    
    Director
    
    March 14, 2003
    
    33Sergio Fernando Montaño León
    
    Director
    
    December 21, 2005
    
    59José Luis Guerrero Álvarez
    
    Director
    
    December 21, 2005
    
    63Jean Marie Chevallier*
    
    Director
    
    December 13, 2006
    
    62Jacques Follain*
    
    Alternate Director
    
    December 13, 2006
    
    50
 
 *
    
    Appointed by SETA Bernardo Quintana Isaac.
 Alberto Felipe Mulás Alonso.
 Salvador Alva Gómez.
 104




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Manuel F. Arce Rincon.
 Luis Fernando Zárate Rocha.
 Luis Guillermo Zazueta Dominguez.
 Alonso Quintana Kawage.
 Sergio F. Montaño León.
 105




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José Luis Guerrero Álvarez.
 Jean-Marie Chevallier.
 Jacques Follain (Alternate Director for Mr. Chevallier).
 Fernando Flores Pérez.
 106




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Executive Officers
   ExecutiveName
    
    Current position
    
    officer since(2)
    
   AgeRuben Gerardo López Barrera(1)
    
    Chief Executive Officer
    
    December 11, 2003
    
    37Nicolas Etienne Marcel Claude(1)
    
    Chief Operating Officer
    
    October 14, 2004
    
    41Victor Humberto Bravo Martin(1)
    
    Chief Financial Officer
    
    March 20, 2006
    
    41Manuel de la Torre Melendez
    
    General Counsel
    
    January 1, 2004
    
    43Jose Ignacio de la Peña Padilla
    
    Infrastructure and Maintenance Director
    
    July 6, 2004
    
    48Jean Philippe Frederic Percheron(1)
    
    Commercial and Marketing Director
    
    April, 26, 2006
    
    38Porfirio González Alvarez
    
    Airports Director
    
    April 26, 2006
    
    56María Victoria Zapata Guerrero
    
    Human Resources Director
    
    April 14, 2006
    
    45
 
 (1)
    
    Appointed by SETA as holder of Series BB shares.(2)
    
    Date of Appointment. Rubén Gerardo López Barrera
 Nicolas Etienne Marcel Claude
 Víctor Humberto Bravo Martín
 107




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Manuel de la Torre Melendez
 José Ignacio de la Peña Padilla
 Jean Philippe Frederic Percheron
 Porfirio González Álvarez
 Maria Victoria Zapata Guerrero
  Compensation of Directors and Executive Officers
  108




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Ley Federal del Trabajo
 Committees
  Audit Committee
    Corporate Practices Committee
  109




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Nominations Committee
  NASDAQ Corporate Governance Comparison
 Codigo de Mejores Practicas Corporativas
 Diario Oficial
de la Federación
 110




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NASDAQ Standards
    
    
    
    Our Corporate Governance PracticeDirector Independence.
Majority of board of
directors must be
independent and directors
deemed independent must be
identified in a listed
companys proxy statement
(or annual report on Form
10-K or 20-F if the issuer
does not file a proxy
statement). Controlled
companies, which would
include our company if we
were a U.S. issuer, are
exempt from this
requirement. A Controlled
company is one in which more
than 50% of the voting power
is held by an individual,
group or another company,
rather than the public.
Rules 4350(c)(1) & (c)(5).
    
    
    
    Director Independence. Pursuant to the
Mexican Securities Market Law, we are
required to have a board of directors
composed of a maximum of 21 members, 25% of
whom must be independent. One alternate
director may be appointed for each principal
director; provided that the alternates for
the independent director must also be
independent. Certain persons are per se
non-independent, including insiders, control
persons, major suppliers, and any relatives
of such persons. In accordance with the
Mexican Securities and Market Law, our
shareholders meeting is required to make a
determination as to the independence of our
directors, though such determination may be
challenged by the National Banking and
Securities Commission. There is no
exemption from the independence requirement
for controlled companies.Our by-laws provide that our Board of
Directors shall be composed of at least 11
members. Currently, our board has seven
members, of which five are independent under
the Mexican Securities Market Law and the
Sarbanes-Oxley Act of 2002.Executive Sessions.
Independent directors must
meet regularly in executive
sessions at which only
independent directors are
present. Rule 4350(c)(2).
    
    
    
    Executive Sessions. Our non-management and
independent directors are not required to
meet in executive sessions and generally do
not do so. Under our bylaws and applicable
Mexican law, executive sessions are not
required.Nominations Committee.
Director nominees must be
selected, or recommended for
the boards selection,
either by a nominating
committee comprised solely
of independent directors or
by a majority of independent
directors. Each listed
company also must certify
that it has adopted a formal
charter or board resolution
addressing the nominations
process. Controlled
companies are exempt from
this requirement. Rules
4350(c)(4)(A)-(B) & (c)(5).
    
    
    
    Nominations Committee. We are not required
to have a nominating committee. Our bylaws,
however provide for a Nominations Committee,
which we believe carries out the principal
duties of a nominating committee. The duties
of our Nominations Committee include, among
others, nominating candidates for election
as directors at the shareholders meeting.
The Nominations Committee is composed of
three members who are appointed by the
shareholders at a shareholders meeting.
Pursuant to our bylaws, at least one member
is appointed by the Series B shareholders
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NASDAQ Standards
    
    
    
    Our Corporate Governance Practiceand at least one member is appointed by the
Series BB shareholders. The remaining member
is to be designated by the two appointed
members. If these two members are unable to
reach an agreement, the remaining member
will be designated by majority vote of the
shareholders.Audit Committee. Audit
committee satisfying the
independence and other
requirements of Rule 10A-3
under the Exchange Act and
the more stringent
requirements under the
NASDAQ standards is
required. Rule 4350(d).
    
    
    
    Audit Committee. We are in compliance with
the independence requirements of Rule 10A-3.
Marketplace Rule 4350(a)(1) permits us to
follow our home country governance practices
in lieu of certain NASDAQ requirements, and
as such the members of our Audit Committee
are not required to satisfy the NASDAQ
independence and other audit committee
standards that are not prescribed by Rule
10A-3.The principal characteristics of our Audit
Committee are as follows:
    
    Our Audit Committee is composed of
three members, all of whom are members of
our board of directors.
    
    All of the members of our Audit
Committee and the committees president are
independent.
    
    The Chairman of the Audit Committee
is appointed and/or removed exclusively by
the general shareholders meeting.
    
    Our Audit Committee operates
pursuant to provisions in the Mexican
Securities Market Law and our bylaws.
    
    Our Audit Committee submits an
annual report regarding its activities to
our Board of Directors.
    
    The duties of our Audit Committee
include, among others, the following:
    
    overseeing of our internal auditing
and controls systems, and
    
    appointing and removing, and
supervising our external auditor and
establishing the scope of the external
auditors duties and responsibilities.
    
    ensuring compliance with our by-laws
by officers and directors of the company and
its subsidiaries,
    
    making recommendations to the
Nomination and Compensation Committee with
respect to the removal of directors
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NASDAQ Standards
    
    
    
    Our Corporate Governance Practiceand
officers for violations of the by-laws or
any other applicable legal provision,
    
    overseeing compliance with the
corporate governance provisions as set forth
in the General Law of Business Companies
(Ley General de Sociedades Mercantiles), and
the Mexican Securities Market Law and
protection of minority shareholder rights,
    
    overseeing related-party transactions,
    
    preparing certain regular reports
for the board of directors pursuant to the
Mexican Securities Market Law and our bylaws
 113




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NASDAQ Standards
    
    
    
    Our Corporate Governance PracticeCompensation Committee. CEO
compensation must be
determined, or recommended
to the board for
determination, either by
compensation committee
comprised solely of
independent directors or a
majority of the independent
directors and the CEO may
not be present during voting
or deliberations.
Compensation of all other
executive officers must be
determined in the same
manner, except that the CEO,
and any other executive
officers, may be present.
Controlled companies are
exempt from this
requirement. Rules
4350(c)(3)(A)-(B) & (c)(5).
    
    
    
    Corporate Practices Committee. Pursuant to
the Mexican Securities Market Law, we are
required to have a corporate governance
committee, although we are not required to
have a separate compensation committee. The
Mexican Securities Market Law requires that
committees consist of at least 3 independent
directors appointed by the board of
directors. All committee members must be
independent (except to the extent a
controlling shareholder or shareholders own
50% or more of our outstanding capital
stock, in which case the majority must be
independent).
Pursuant to our bylaws and the Mexican
Securities Market Law, the duties of our
Corporate Practices Committee include, among
others, the following:
    
    providing opinions to o9ur board of
directors on certain matters;
    
    requesting and obtaining opinions
from independent experts;
    
    calling shareholders meeting;
    
    assisting the board in the
preparation of annual reports and other
reporting obligations; and
    
    proposing for shareholder approval
the compensation to be paid to members of
our board of directors and the boards of
directors of our subsidiaries.The board has vested certain functions and
responsibilities of this committee on our
Audit Committee.The duties of our Audit Committee with
regard to corporate practices are, among
others, the following:
    
    evaluating the performance of
relevant officers,
    
    reviewing related-party
transactions, and
    
    determining the total compensation
package of the chief executive officer.
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NASDAQ Standards
    
    
    
    Our Corporate Governance PracticeEquity Compensation Plans.
Equity compensation plans
require shareholder
approval, subject to limited
exemptions. Rule
4350(i)(1)(A)
    
    
    
    Equity Compensation Plans. Shareholder
approval is not expressly required under our
bylaws for the adoption and amendment of an
equity-compensation plan. Such plans must
provide from similar treatment of executives
in comparable positions. No
equity-compensation plans have been approved
by our shareholders.Shareholder Approval for
Issuance of Securities.
Issuances of securities (1)
that will result in a change
of control of the issuer,
(2) in connection with
certain acquisitions of the
stock or assets of another
company, or (3) in
connection with certain
transactions other than
public offerings require
shareholder approval. Rules
4350(i)(1)(B)-(D).
    
    
    
    Shareholder Approval for Issuance of
Securities.Mexican law and our bylaws
require us to obtain shareholder approval
for the issuance of equity securities.
Treasury stock, however, may be issued by
the board of directors without shareholder
approval.Code of Ethics. Corporate
governance guidelines and a
code of business conduct and
ethics is required, with
disclosure of any waiver and
the reasons for such waiver
for directors or executive
officers. The code must
include an enforcement
mechanism. Rule 4350(n).
    
    
    
    Code of Ethics. We have adopted a code of
ethics applicable to all of our directors
and executive officers, which is available
to you free of charge upon request and at
www.oma.aero. We are required by Item 16B
of Form 20-F to disclose any waivers granted
to our chief executive officer, chief
financial officer and persons performing
similar functions, as well as to our other
officers/employees.Conflicts of Interest.
Appropriate review of all
related party transactions
for potential conflict of
interest situations and
approval by an audit
committee or another
independent body of the
board of directors of such
transactions is required.
Rule 4350(h).
    
    
    
    Conflicts of Interest.In accordance with
Mexican law and our bylaws, the audit
committee must provide an opinion regarding
any transaction with a related party that is
outside of the ordinary course of business,
and such transactions must be approved by
the board of directors. Pursuant to the
Mexican Securities Market Law, our board of
directors and our Audit Committee are
required to establish certain guidelines
regarding related party transactions that do
not require board approval.Solicitation of Proxies.
Solicitation of proxies and
provision of proxy materials
is required for all meetings
of shareholders. Copies of
such proxy solicitations are
to be provided to NASDAQ.
Rule 4350(g).
    
    
    
    Solicitation of Proxies.Under the Mexican
Securities Market Law, we are obligated to
make available proxy materials for meetings
of shareholders. In accordance with Mexican
law and our bylaws, we inform shareholders
of all meetings by public notice, which
states the requirements for admission to the
meeting and provides a mechanism by which
shareholders can vote by proxy. Under the
deposit agreement relating to our ADSs,
holders of our ADSs receive notices of
shareholders meetings and, where
applicable, requests for instructions to the
ADS depositary for the voting of shares
represented by ADSs.
 115




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NASDAQ Standards
    
    
    
    Our Corporate Governance PracticePeer Review.A listed
company must be audited by
an independent public
accountant that (i) has
received an external quality
control review by an
independent public
accountant (peer review)
that determines whether the
auditors system of quality
control is in place and
operating effectively and
whether established policies
and procedures and
applicable auditing
standards are being followed
or (ii) is enrolled in a
peer review program and
within 18 months receives a
peer review that meets
acceptable guidelines. Rule
4350(k).
    
    
    
    Peer Review.Under Mexican law, we must be
audited by an independent public accountant
that has received a quality control review
as defined by the National Banking and
Securities Commission. Galaz, Yamazaki,
Ruiz Urquiza, S.C., a member of Deloitte &
Touche Tohmatsu, our independent auditor, is
not subject to peer review as such term is
defined in Marketplace Rule 4350(k).
 Employees
  116




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Employees
 December 31,2004
    
    2005
    
    2006Categories of activity:Airport operations
    
    
    466
    
    
    
    493
    
    
    
    497Airport maintenance
    
    
    142
    
    
    
    145
    
    
    
    153Administration(1)
    
    
    283
    
    
    
    292
    
    
    
    294Geographic location:Acapulco
    
    
    88
    
    
    
    94
    
    
    
    91Ciudad Juárez
    
    
    47
    
    
    
    48
    
    
    
    49Culiacán
    
    
    50
    
    
    
    51
    
    
    
    50Chihuahua
    
    
    53
    
    
    
    61
    
    
    
    61Durango
    
    
    33
    
    
    
    41
    
    
    
    42Mazatlán
    
    
    69
    
    
    
    69
    
    
    
    69Monterrey
    
    
    173
    
    
    
    174
    
    
    
    188Reynosa
    
    
    27
    
    
    
    29
    
    
    
    27San Luis Potosí
    
    
    39
    
    
    
    39
    
    
    
    40Tampico
    
    
    50
    
    
    
    58
    
    
    
    57Torreón
    
    
    47
    
    
    
    46
    
    
    
    47Zacatecas
    
    
    40
    
    
    
    40
    
    
    
    42Zihuatanejo
    
    
    45
    
    
    
    47
    
    
    
    47Servicios Aeroportuarios del Centro Norte, S.A. de C.V.
    
    
    130
    
    
    
    133
    
    
    
    134Total(1)
    
    
    891
    
    
    
    930
    
    
    
    944
 
 (1)
    
    At December 31, 2004, 2005 and 2006, includes 130, 133 and 134 persons respectively, employed
by Servicios Aeroportuarios del Centro Norte, S.A. de C.V., our administrative services
subsidiary. Service Company
  117




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Item 7. Major Shareholders and Related Party Transactions
 
 MAJOR SHAREHOLDERS
  NAFIN Trust ADSs
  Percentage of totalNumber of shares
    
    share capitalIdentity of stockholder
    
    B Shares
    
    BB Shares
    
    B Shares
    
    BB SharesAeroinvest(1)
    
    
    144,151,500
    
    
    
    
    
    
    
    36.04
    %SETA(2)
    
    
    8,000,000
    
    
    
    58,800,000
    
    
    
    2.0
    %
    
    
    14.70
    %Public
    
    
    192,080,000
    
    
    
    
    
    
    
    47.87
    %
    
    
    Officers and Directors
    
    
    601,413
    
    
    
    
    
    
    
    0.15
    %
    
    
    
 
 (1)
    
    In addition to the Series B shares it directly owns, Aeroinvest may be deemed to beneficially
own all of OMAs shares owned by SETA by virtue of its ownership of 74.5% of SETAs capital
stock. Aeroinvest and SETA are subsidiaries of ICA.(2)
    
    Held in trust with Bancomext. Aeroinvest and SETA are subsidiaries of ICA. Arrangements relating to SETA
 Bancomext Trust
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
    
    Aeroinvest will select two members of our Audit Committee, one of whom must satisfy
the independence criteria of the Sarbanes-Oxley Act of 2002; and
    
    Aereoinvest and ADPM will jointly select at least one member of our Nominations
Committee and Corporate Practices Committee.
   Arrangements relating to Aeroinvest
   120




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RELATED PARTY TRANSACTIONS
 Arrangements with SETA and its Affiliates
       121




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Arrangements with Entities Controlled by the Mexican Government
    122




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Item 8. Financial Information
  
 LEGAL PROCEEDINGS
 General
  Disputed land ownership at Ciudad Juárez International Airport
 Juicio de Amparo
 Property tax claims by certain municipalities
  123




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Claim for damages by Aero DaVinci Internacional, S.A. de C.V.
  124




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Relocation of a cargo tenant at Monterrey International Airport
 Braniff
 
 DIVIDENDS
    125




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
    
    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 of 5%,
    
    we must maintain sufficient cash reserves, 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,
    
    the amount of dividends to be paid may be limited to the extent necessary 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), and
    
    we must maintain sufficient cash reserves, as determined by our board of directors,
as to allow us to react to or prevent any adverse financial change in the operations
of the business.
    126




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Item 9. The Offer and Listing
 
 STOCK PRICE HISTORY
  127




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##### Table of Contents



U.S.$ per ADR(1)
    
    Pesos per Series B ShareLow
    
    High
    
    Low
    
    High2006Fourth Quarter
    
    
    23.00
    
    
    
    26.10
    
    
    
    29.50
    
    
    
    37.50
 U.S.$ per ADR(1)
    
    Pesos per Series B ShareLow
    
    High
    
    Low
    
    HighMonthly PricesDecember, 2006
    
    
    20.81
    
    
    
    22.75
    
    
    
    28.30
    
    
    
    30.50January, 2007
    
    
    21.51
    
    
    
    24.79
    
    
    
    29.50
    
    
    
    33.99February, 2007
    
    
    22.60
    
    
    
    25.75
    
    
    
    31.65
    
    
    
    35.10March, 2007
    
    
    22.48
    
    
    
    27.25
    
    
    
    31.55
    
    
    
    37.50April, 2007
    
    
    27.00
    
    
    
    30.14
    
    
    
    37.60
    
    
    
    41.12May, 2007
    
    
    26.46
    
    
    
    29.94
    
    
    
    36.31
    
    
    
    40.20
 
 (1)
    
    8 Series B shares per ADR.  
 TRADING ON THE MEXICAN STOCK EXCHANGE
 sociedad anónima de capital variable
 Instituto para el Deposito de Valores
   128




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Item 10. Additional Information
 
 CORPORATE GOVERNANCE
 Bylaws
 estatutos sociales
 sociedad anonima
bursatil
 Purposes
  
    
    to acquire, as founder or through acquisitions, shares of or interests or
participations in privately- or state-owned companies engaged in the management,
operation (including the provision of aeronautical, complementary, commercial and
construction services) and/or development of civilian airports pursuant to the Airport
Law and its Regulations; to participate in the capital stock of companies engaged in
the provision of all types of services; to vote, as a group and in the same manner, as
prescribed by these bylaws or as directed by the board of directors, the shareholders
meeting or any other person authorized by these bylaws to issue such a directive, any
shares of stock of any other company owned thereby; and to sell, transfer or dispose
of any such shares, participations or other securities in accordance with the
applicable law;
    
    to receive from any other Mexican or foreign entity, company or individual, and to
provide to any company in which it may hold any interest or participation or to any
other entity, company or individual, any services required to achieve its or their
purposes, including, without limitation, any industrial, administrative, accounting,
marketing or financial consulting services associated with the management, operation,
construction and/or development of airports;
    
    to apply for and obtain, by any means, directly or through its subsidiaries,
concessions and permits to manage, operate, build and/or develop airports, provide
airport development services or conduct other related activities, including, without
limitation, storage and other activities to supplement or improve its service
offerings, and grant guaranties in respect of
 129




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such concessions and permits. Subject to the applicable law and the terms of the
relevant concessions, OMA may also receive, directly or through its subsidiaries, the
proceeds from the use of any civilian airport infrastructure, the execution of any
agreement, the provision of any service or the conduction of any business activity. OMA
may also provide merchandise handling, storage and custody services at bonded
facilities in the manner prescribed by the applicable law and subject to any necessary
concessions or authorizations. OMA may also provide, coordinate, direct, supervise
and/or render merchandise loading, unloading and handling services as provided by the
applicable law;
    
    to obtain, acquire, use, transfer and grant or secure licenses in respect of all
types of patents, invention certificates, registered trademarks, trade names,
copyrights or any rights associated therewith, whether in the United Mexican States or
abroad;
    
    to obtain all types of secured and unsecured loans or credit facilities, and to
grant loans to any association, company, entity or individual in which it holds more
than 50% (fifty percent) of the capital stock with voting rights or which is otherwise
under its control;
    
    to provide all types of collateral and guaranties in respect of any credit
instrument issued or obligation assumed thereby or by any entity in which it holds
more than 50% (fifty percent) of the shares of stock with voting rights or which is
otherwise under its control;
    
    to issue, subscribe, accept and endorse all types of credit instruments, including
secured and unsecured debentures;
    
    to issue unsubscribed shares of any series of stock, which will be maintained as
treasury shares for their delivery upon subscription, and to enter into option
agreements with third parties providing for the right to subscribe and pay for any
such shares. OMA may also issue unsubscribed shares pursuant to Article 53 and other
related provisions of the Securities Market Law;
    
    to maintain, hold, sell, transfer, dispose of or lease all types of assets,
personal and real property and rights thereto as may be necessary or convenient to
achieve its corporate purpose or the purpose of any association or company in which it
holds an interest or participation; and
    
    generally, to carry out and execute any related, incidental or ancillary
activities, agreements and transactions that may be necessary or convenient to achieve
the abovementioned purposes.
 Directors
 Election of Directors
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Authority of the Board of Directors
  
    
    our general strategy;
    
    annual approval of the business plan and the investment budget;
    
    capital investments not considered in the approved annual budget for each fiscal year;
    
    the proposal to increase our capital or that of our subsidiaries;
    
    subject to the approval of the corporate practices committee, among other matters
(i) our five-year master development program and any amendments thereto for each of
our airports to be submitted to the Ministry of Communications and Transportation,
(ii) the guidelines for the use or enjoyment of the goods that are part of our
patrimony or that of our subsidiaries, by any related party, (iii) any transaction
with related parties, subject to certain limited exceptions, (iv) the authorization
for any member of our board, relevant officers or person with power of command, to
take advantage of business opportunities for his own benefit or for the benefit of
third parties, that originally corresponded to us or the companies under our control
or in which we have a significant influence, and that exceed the limits set forth
under item (iii) of the next paragraph, (v) the voting of the shares we hold in our
subsidiaries, (vi) our management structure and any amendments thereto, (vii) the
election of our Chief Executive Officer from the candidates proposed by the Series BB
Directors and the approval of his compensation or his removal for cause, and (viii)
the establishment of guidelines for the appointment and compensation of executive
officers, which must be consistent with the guidelines established in the Technical
Assistance Agreement;
    
    subject to the opinion of the audit committee, among other matters (i) our
financial statements and those of our subsidiaries, (ii) subject to certain limited
exceptions, the acquisition and alienation by us, of our own stock, (iii) the
guidelines for the granting of
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loans or any type of credits or guarantees to any related party, (iv) the guidelines
regarding our internal controls, internal audits and those of our subsidiaries, (v) our
accounting policies, including adjustments to our accounting principles to conform to
or recognize those issued by the Commission, (vi) the hiring and termination of our
external auditors, (vii) any transfer by us of shares in our subsidiaries, and (viii)
unusual or non-recurrent transactions and any transactions or series of related
transactions during any calendar year that involve (a) the acquisition or sale of
assets with a value equal to or exceeding 5% of our consolidated assets or U.S.$2
million, or (b) the giving of collateral or guarantees or the assumption of liabilities
equal to or exceeding 5% of our consolidated assets, U.S.$5.0 million or in excess of
the debt level set forth in the annual business plan, which must not exceed a 50% debt
to capital ratio;
    
    the appointment and delegation of responsibilities, the creation of new committees
or changing the responsibilities assigned to existing committees;
    
    the appointment of members of the corporate practices committee and audit
committee; with the understanding that at least one of its members shall be appointed
from those proposed by the members of the board appointed by the holders of Series BB
            shares;
    
    proposals to the shareholders meetings regarding (a) our dividend policy and (b)
the use of our earnings;
    
    subject to certain conditions, the appointment of provisional members of the board,
without the need for a shareholders meeting;
    
    public tender offers;
    
    the presentation at a general ordinary shareholders meeting of any of the
following agenda items: (i) the annual reports of the audit committee and the
corporate practices committee, (ii) the annual report given by the chief executive
officer, the opinion of the external auditor and the opinion of the board on the
content of such report, (iii) the report containing the main accounting and
information guidelines used for the preparation of our financial information, and (iv)
the report on the operations and activities in which the board had intervened pursuant
to the Mexican Securities Market Law;
    
    the appointment, removal, duties and responsibilities of our internal auditor;
    
    communication policies with regards to providing information to our shareholders,
the market and to other members of the board and relevant officers as well as
decisions with regards to specific information to be released;
    
    actions to be taken in order to rectify any known irregularity and to implement any
corrective measures;
    
    the terms and conditions subject to which the chief executive officer shall
exercise his power and duties; and
    
    resolutions instructing our chief executive officer to disclose material
information to the general public.
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Powers of Series BB Directors
   Our Capital Stock
  Capital Stock
 As
of June 28, 2007Authorized
    
    Issued and outstandingCapital Stock:Series B shares
    
    
    341,200,000
    
    
    
    341,200,000Series BB shares
    
    
    58,800,000
    
    
    
    58,800,000Total
    
    
    400,000,000
    
    
    
    400,000,000
   
    
    Series B. Series B shares currently represent 85.3% of our capital. Series B
shares may be held by any Mexican or foreign natural person, company or entity.
    
    Series BB. Series BB shares currently represent 14.7% of our capital. Series BB
shares, which are issued pursuant to Article 112 of the Mexican General Law of
Business Corporations, may be held by any Mexican or foreign natural person, company
or entity.
  133




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Voting Rights and Shareholders Meetings
    
    
    extension of a companys duration or voluntary dissolution;
    
    an increase or decrease in a companys minimum fixed capital;
    
    change in corporate purpose or nationality;
    
    any transformation, merger or spin-off involving the company;
    
    any stock redemption or issuance of preferred stock or bonds;
    
    the cancellation of the listing of our shares with the National Registry of
Securities or on any stock exchange;
    
    amendments to a companys bylaws; and
    
    any other matters for which applicable Mexican law or the bylaws specifically
require an extraordinary meeting.
   134




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Quorums
    
    
    any amendment to our bylaws which: (i) changes or deletes the authorities of our
committees or (ii) eliminates or modifies any minority rights;
    
    any actions resulting in the cancellation of the concessions granted to us or our
subsidiaries by the Mexican government or any assignment of rights arising therefrom;
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
    
    termination of the participation agreement that was entered into by SETA and
the Mexican government in connection with the Mexican governments sale of the Series
BB shares to SETA;
    
    a merger by us with an entity the business of which is not related to the business
of us or our subsidiaries; and
    
    a spin-off, dissolution or liquidation of us.
  Veto Rights of Holders of Series BB Shares
  
    
    approval of our financial statements and those of our subsidiaries;
    
    anticipated liquidation or dissolution;
    
    capital increases or decreases of us or of our subsidiaries;
    
    declaration and payment of dividends;
    
    amendment to our bylaws;
    
    mergers, spin-offs, reclassifications, consolidations or share-splits;
    
    grant or amendment of special rights of any series of shares of our capital stock;
    
    any decision amending or nullifying a resolution validly taken by the board of
directors with respect to decisions of the board of directors that require the
affirmative vote of the directors elected by the holders of our Series BB shares; and
    
    any shareholder resolution with respect to a matter requiring the affirmative vote
of the directors appointed by the holders of our Series BB shares.
 Right of Withdrawal
 provided
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Dividends and Distributions
  Registration and Transfer
   
    
    SETA is required to retain at least 51% of its Series BB shares until June 14,
2007.
    
    After June 14, 2007, SETA is free to sell in any year up to one eighth of such 51%
interest in Series BB shares.
    
    If SETA owns Series BB shares that represent less than 7.65% of our capital stock
after June 14, 2014, those remaining Series BB shares will be automatically converted
into freely transferable Series B shares.
    
    If SETA owns Series BB shares representing at least 7.65% of our capital stock
after June 14, 2014, those Series BB shares may be converted into Series B shares,
provided the holders of at least 51% of Series B shares (other than shares held by
SETA and any of its related persons) approve such conversion.
  
    
    any corporation or person, directly or indirectly, controlling, controlled by or
under common control with such person;
    
    any corporation or person having the capacity to determine the business guidelines
and policies of such person;
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
    
    in the case of an individual, an individual having a blood or civil kinship in a
direct line (ascending or descending) within and including the fourth degree with such
person;
    
    SETA; or
    
    with respect to SETA, its shareholders, persons related to it or any party to the
operating agreement pursuant to which SETA fulfills its obligations under the
technical assistance agreement.
  
    
    the ownership, directly or indirectly of 20% or more of the capital stock with
voting rights of such person,
    
    the contractual right to elect the majority of the members of the board of
directors of the person,
    
    the ability to veto resolutions that could otherwise be adopted by the majority of
the persons shareholders, or
    
    existence of commercial relations representing the purchase of more than 15% of the
total annual sales of such person.
 Shareholder Ownership Restrictions and Antitakeover Protection
  
    
    no more than 5% of our outstanding capital stock may be owned by air carriers, and
    
    foreign governments acting in a sovereign capacity may not directly or indirectly
own any portion of our capital stock.
  
    
    The Mexican government, prior to the consummation of this offering,
    
    NAFIN, including in its capacity as trustee of the selling stockholder,
    
    Institutions that act as depositaries for securities, and
    
    Financial and other authorized institutions that hold securities for the account of
beneficial owners (including the ADS depositary), provided that such beneficial owners
are not exempt from the ownership restrictions.
   138




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Changes in Capital Stock
    Share Repurchases
  
    
    the acquisition must be carried out through the Mexican Stock Exchange;
    
    the acquisition must be carried out at market price, unless a public offer or
auction has been authorized by the National Banking and Securities Commission;
    
    the acquisition must be carried out against our paid in capital, and shares
acquired will be held as treasury stock without any requirement to adopt a reduction
in capital stock or to count them against capital stock, in which case, such shares
will be converted to unsubscribed shares. No shareholder consent is required for such
purchases.
    
    the amount and price paid in all share repurchases shall be made public;
    
    the annual ordinary shareholders meeting shall determine the maximum amount of
resources to be used in the fiscal year for the repurchase of shares;
    
    we may not be delinquent on payments due on any outstanding debt issued by us that
is registered with the National Securities Registry; and
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
    
    any acquisition of shares must be in conformity with the requirements of Article 54
of the Securities Market Law and we must maintain a sufficient number of outstanding shares to meet the minimum trading volumes required by the stock markets on which our shares are listed.
 Ownership of Capital Stock by Subsidiaries
  Repurchase Obligation
  Liquidation
  Other Provisions
 Liabilities of the members of the Board of Directors
   140




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
    
    negligence resulting in the loss of more than two-thirds of our capital stock and
which results in our dissolution;
    
    bankruptcy, subject to certain conditions, when the actions taken by the board of
directors results in a declaration of insolvency (concurso mercantil);
    
    breaching any of the duties set forth under our bylaws; and
    
    failure to report irregularities in the actions of former board members.
  Information to Shareholders
  
    
    a report of the directors on the operations of the company during the preceding
year, as well as on the policies followed by the directors and on the principal
existing projects;
    
    a report explaining the principal accounting and information policies and criteria
followed in the preparation of the financial information;
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
    
    a statement of the financial condition of the company at the end of the fiscal
year;
    
    a statement showing the results of operations of the company during the preceding
year, as well as changes in the companys financial condition and capital stock during
the preceding year;
    
    the notes which are required to complete or clarify the above mentioned
information; and
    
    the report prepared by the Audit Committee with respect to the accuracy and
reasonability of the above mentioned information presented by the board of directors.
  Duration
  Shareholders Conflict of Interest
  Directors Conflict of Interest
  Certain Differences between Mexican and U.S. Corporate Law
  Independent Directors
  Mergers, Consolidations, and Similar Arrangements
  142




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Anti-Takeover Provisions
   
    
    prior to the date of the transaction in which the shareholder became an interested
shareholder, the board of directors of the corporation approves either the business
combination or the transaction that resulted in the shareholder becoming an interested
shareholder;
    
    upon consummation of the transaction that resulted in the shareholder becoming an
interested shareholder, the interested shareholder owns at least 85% of the voting
stock of the corporation, excluding shares held by directors, officers, and employee
stock plans; or
    
    at or after the date of the transaction in which the shareholder became an
interested shareholder, the business combination is approved by the board of directors
and authorized at a shareholders meeting by at least 66 2/3 % of the voting stock
which is not owned by the interested shareholder.
 Shareholders Suits
  143




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Shareholder Proposals
   Calling of Special Shareholders Meetings
   Cumulative Voting
   Approval of Corporate Matters by Written Consent
   Amendment of Certificate of Incorporation
 (acta
constitutiva)
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Amendment of Bylaws
   Staggered Board of Directors
  
 MATERIAL CONTRACTS
     
 EXCHANGE CONTROLS
  145




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TAXATION
      146




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Taxation of Dividends
 Mexican Tax Considerations
  U.S. Federal Income Tax Considerations
    Taxation of Dispositions of Shares or ADSs
 Mexican Tax Considerations
  147




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U.S. Tax Considerations
   Other Mexican Taxes
  U.S. Backup Withholding Tax and Information Reporting Requirements
  148




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DOCUMENTS ON DISPLAY
  
 Item 11. Quantitative and Qualitative Disclosures About Market Risk
      
 Item 12. Description of Securities Other Than Equity Securities
  149




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PART II
 
 Item 13. Defaults, Dividend Arrearages and Delinquencies
  
 Item 14. Material Modifications to the Rights of Security Holders and Use of Proceeds
 
  
 Item 15. Controls and Procedures
   
 Item 16. [Reserved]
 
 Item 16A. Audit Committee Financial Expert
  
 Item 16B. Code of Ethics
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Item 16C. Principal Accountant Fees and Services
 Audit and Non-Audit Fees
  Year ended December 31,2005
    
    2006(thousands of pesos)Audit fees
    
    
    4,180
    
    
    
    13,621Audit-related fees
    
    
    0
    
    
    
    1,747Tax fees
    
    
    596
    
    
    
    910Other fees
    
    
    0
    
    
    
    0Total fees
    
    
    4,776
    
    
    
    16,278
    Audit Committee Pre-Approval Policies and Procedures
  
 Item 16D. Exemptions from the Listing Standards for Audit Committees
  
 Item 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers
  151




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(c) Total number of
    
    (d) Maximumshares purchased as
    
    number of shares(b) Average price
    
    part of publicly
    
    that may yet be(a) Total number of shares
    
    paid per share in
    
    announced plans or
    
    purchased under the2006
    
    purchased
    
    Pesos
    
    programs
    
    plans or programsJanuary 1-31February 1-28March 1-31April 1-30May 1-31June 1-30July 1-31August 1-31
    
    8,000,000 Series B Shares(1)
    
    Ps.14.6735(2)
    
    N/A
    
    N/ASeptember 1-30October 1-31November 1-30
    
    3,031,500 Series B Shares(3)
    
    Ps.24.8500
    
    N/A
    
    N/ADecember 1-312006 Total
    
    11,031,500 Series B Shares
    
    Ps.19.7618
    
    N/A
    
    N/A
 
 (1)
    
    SETA exercised its option to purchase 2% of our capital stock pursuant to the Option Agreement described in Item 7. Major Shareholders
and Related Party Transactions  Related Party Transactions.(2)
    
    Price per share was determined based on an initial price per share of U.S.$1.1286 plus an annual 5% premium, subject to decreases
corresponding to dividends declared and paid by us.(3)
    
    Aeroinvest purchased 3,031,500 Series B Shares corresponding to 0.74% of our capital stock in connection with our initial public
offering in November 2006. PART III
 
 Item 17. Financial Statements
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Item 18. Financial Statements
  Consolidated Financial Statements
for Grupo Aeroportuario del Centro Norte, S.A.B. de C.V.
and Subsidiaries
 PageReport of Independent Registered Public Accounting Firm
    
    
    F-2Consolidated Balance Sheets as of December 31, 2006 and 2005
    
    
    F-3Consolidated Statements of Income for the Years Ended December 31, 2006, 2005 and 2004
    
    
    F-4Consolidated Statements of Changes in Stockholders Equity for the Years Ended December 31, 2006, 2005 and 2004
    
    
    F-5Consolidated Statements of Changes in Financial Position for the Years Ended December 31, 2006, 2005 and 2004
    
    
    F-6Notes to Consolidated Financial Statements
    
    
    F-7
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Item 19. Exhibits
  Exhibit No.
    
    Description1.1
    
    An English translation of the Amended and Restated Bylaws
(Estatutos Sociales) of OMA (incorporated by reference to our
registration statement on Form F-1 (File No. 333-138710) filed
on November 15, 2006).2.1
    
    Deposit Agreement among OMA, the Bank of New York and all
registered holders from time to time of any American
Depositary Receipts, including the form of American Depositary
Receipt (incorporated by reference to our amended registration
statement on Form F-1/A (File No. 333-138710) filed on
November 22, 2006).3.1
    
    Trust Agreement among OMA, Operadora Mexicana de Aeropuertos,
S.A. de C.V. (now Servicios de Tecnología Aeroportuaria, S.A.
de C.V.), or SETA, and Banco Nacional de Comercio Exterior,
S.N.C., División Fiduciaria, or Bancomext, English translation
(incorporated by reference to our registration statement on
Form F-1 (File No. 333-138710) filed on November 15, 2006).3.2
    
    Amendment to the Trust Agreement among OMA, SETA, and
Bancomext, English translation (incorporated by reference to
our registration statement on Form F-1 (File No. 333-138710)
filed on November 15, 2006).3.3
    
    Voting Agreement among Aeroinvest,
ADPM, SETA, Banco Nacional de Comercio Exterior, S.N.C., División
Fiduciaria and Banca Múltiple, J.P. Morgan Grupo Financiero,
División Fuduciaria, English translation.4.1
    
    Amended and Restated Monterrey Airport Concession Agreement
and annexes thereto, English translation and a schedule
highlighting the differences between this concession and OMAs
other concessions (incorporated by reference to our
registration statement on Form F-1 (File No. 333-138710) filed
on November 15, 2006).4.2
    
    Participation Agreement among OMA, the Mexican Federal
Government through the Ministry of Communications and
Transportation, Nacional Financiera, S.N.C., Dirección
Fiduciaria, or NAFIN, Servicios Aeroportuarios del Centro
Norte, S.A. de C.V., Aeropuerto de Acapulco, S.A. de C.V.,
Aeropuerto de Chihuahua, S.A. de C.V., Aeropuerto de Ciudad
Juárez, S.A. de C.V., Aeropuerto de Culiacán, S.A. de C.V.,
Aeropuerto de Durango, S.A. de C.V., Aeropuerto de Mazatlán,
S.A. de C.V., Aeropuerto de Monterrey, S.A. de C.V.,
Aeropuerto de Reynosa, S.A. de C.V., Aeropuerto de Tampico,
S.A. de C.V., Aeropuerto de Torreón, S.A. de C.V., Aeropuerto
de San Luis Potosí, S.A. de C.V., Aeropuerto de Zacatecas,
S.A. de C.V. and Aeropuerto de Zihuatanejo, S.A. de C.V.
(collectively, the Concession Companies), SETA,
Constructoras ICA, S.A. de C.V., Aéroports de Paris and Vinci,
S.A., with the appearance of Bancomext, English translation
(incorporated by reference to our registration statement on
Form F-1 (File No. 333-138710) filed on November 15, 2006).
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Exhibit No.
    
    Description4.3
    
    Amendment to Participation Agreement among OMA, the Mexican
Federal Government through the Ministry of Communications and
Transportation, NAFIN, Servicios Aeroportuarios del Centro
Norte, S.A. de C.V., the Concession Companies, SETA,
Constructoras ICA, S.A. de C.V. and Aéroports de Paris, with
the appearance of Bancomext, English translation (incorporated
by reference to our registration statement on Form F-1 (File
No. 333-138710) filed on November 15, 2006).4.4
    
    Agreement entered into among NAFIN, Aeroinvest, SETA and the
Mexican Federal Government through the Ministry of
Communications and Transportation with respect to certain
provisions of the Participation Agreement, English translation
(incorporated by reference to our registration statement on
Form F-1 (File No. 333-138710) filed on November 15, 2006).4.5
    
    Technical Assistance and Transfer of Technology Agreement
among the Registrant, Servicios Aeroportuarios del Centro
Norte, S.A. de C.V., the Concession Companies, SETA and
Constructoras ICA, S.A. de C.V., Aéroports de Paris and Vinci,
S.A., English translation (incorporated by reference to our
registration statement on Form F-1 (File No. 333-138710) filed
on November 15, 2006).4.6
    
    Shareholders Agreement among NAFIN, SETA and Bancomext, with
the appearance of the Registrant and the Mexican Federal
Government through the Ministry of Communications and
Transportation, English translation (incorporated by reference
to our registration statement on Form F-1 (File No.
333-138710) filed on November 15, 2006).4.7
    
    Termination Agreement in respect of the Shareholders Agreement
among NAFIN, SETA and Bancomext, with the appearance of OMA
and the Mexican Federal Government through the Ministry of
Communications and Transportation, English translation
(incorporated by reference to our registration statement on
Form F-1 (File No. 333-138710) filed on November 15, 2006).4.8
    
    Stock Purchase Agreement between the Mexican Federal
Government through the Ministry of Communications and
Transportation and SETA, with the appearance of Constructoras
ICA, S.A. de C.V., Aéroports de Paris and Vinci, S.A., and the
Mexican Federal Treasury, English translation (incorporated by
reference to our registration statement on Form F-1 (File No.
333-138710) filed on November 15, 2006).4.9
    
    Shareholders Agreement among NAFIN, SETA and Bancomext, with
the appearance of the Registrant and the Mexican Federal
Government through the Ministry of Communications and
Transportation, English translation (incorporated by reference
to our registration statement on Form F-1 (File No.
333-138710) filed on November 15, 2006).4.10
    
    Termination Agreement in respect of the Shareholders Agreement
among NAFIN, SETA and Bancomext, with the appearance of OMA
and the Mexican Federal Government through the Ministry of
Communications and Transportation, English translation
(incorporated by reference to our registration statement on
Form F-1 (File No. 333-138710) filed on November 15, 2006).8.1
    
    List of subsidiaries of OMA (incorporated by reference to our
registration statement on Form F-1 (File No. 333-138710) filed
on November 15, 2006).11.1
    
    Code of Ethics of the Company.
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Exhibit No.
    
    Description12.1
    
    Certification of Chief Financial Officer pursuant to Section
302 of the Sarbanes-Oxley Act of 2002.12.2
    
    Certification of Chief Executive Officer pursuant to Section
302 of the Sarbanes-Oxley Act of 2002.13.1
    
    Certification of Chief Financial Officer and Chief Executive
Officer pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
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SIGNATURES
  GRUPO AEROPORTUARIO DEL CENTRO NORTE, S.A.B. DE C.V.By:
    /s/ Víctor Humberto Bravo MartínName: Víctor Humberto Bravo MartínTitle: Chief Financial Officer




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Grupo Aeroportuario del Centro Norte,
 S.A.B. de C.V. and Subsidiaries
 (Formerly Grupo Aeroportuario del Centro Norte, S.A. de C.V.)(Subsidiary of Aeroinvest, S.A. de C.V.)


Consolidated Financial Statements For the Years 
Ended December 31, 2006 and 2005, and 
Independent Auditors Report Dated March 23, 2007
 F-1




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Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders of
Grupo Aeroportuario del Centro Norte, S.A.B. de C.V.
      
 
 
 F-2




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Grupo
Aeroportuario del Centro Norte, S.A.B. de C.V. and Subsidiaries
 Consolidated Balance Sheets
At December 31, 2006 and 2005
(In thousands of U.S. dollars ($) and thousands of Mexican pesos (Ps.) of purchasing power of
December 31, 2006)
 2006(ConvenienceTranslation;See Note 2)
    
    
    2006
    
    
    2005AssetsCurrent assets:Cash and cash equivalents (Note 4)
    
    $
    149,303
    
    
    Ps.
    1,612,384
    
    
    Ps.
    1,644,776Trade accounts receivable  net (Note 5)
    
    
    22,429
    
    
    
    242,224
    
    
    
    131,862Accounts receivable from Consorcio Aeroméxico, S.A. de C.V., a related party (Note 5)
    
    
    
    
    
    
    
    
    
    
    87,834Recoverable taxes
    
    
    11,721
    
    
    
    126,589
    
    
    
    49,728Other current assets
    
    
    7,817
    
    
    
    84,426
    
    
    
    22,267Total current assets
    
    
    191,270
    
    
    
    2,065,623
    
    
    
    1,936,467Property, machinery, equipment and
improvements to concessioned properties  net (Note 6)
    
    
    162,791
    
    
    
    1,758,064
    
    
    
    1,469,090Rights to use airport facilities  net (Note 7)
    
    
    368,234
    
    
    
    3,976,748
    
    
    
    4,098,025Airport concessions  net (Note 7)
    
    
    68,199
    
    
    
    736,512
    
    
    
    753,641Other assets  net
    
    
    1,437
    
    
    
    15,513
    
    
    
    23,091Total
    
    $
    791,931
    
    
    Ps.
    8,552,460
    
    
    Ps.
    8,280,314Liabilities and stockholders equityCurrent liabilities:Trade accounts payable
    
    $
    6,197
    
    
    Ps.
    66,922
    
    
    Ps.
    69,717Accrued expenses and taxes other than income taxes
    
    
    5,320
    
    
    
    57,456
    
    
    
    24,318Accounts payable to related parties (Note 11)
    
    
    3,115
    
    
    
    33,640
    
    
    
    25,489Advances from customers
    
    
    1,013
    
    
    
    10,936
    
    
    
    17,977Value-added tax payable
    
    
    
    
    
    
    
    
    
    
    10,715Statutory employee profit sharing
    
    
    797
    
    
    
    8,607
    
    
    
    1,488Total current liabilities
    
    
    16,442
    
    
    
    177,561
    
    
    
    149,704Guarantee deposits
    
    
    1,727
    
    
    
    18,651
    
    
    
    11,964Employee retirement obligations (Note 8)
    
    
    3,896
    
    
    
    42,073
    
    
    
    23,225Deferred income taxes and statutory employee
profit sharing (Note 12)
    
    
    57,539
    
    
    
    621,398
    
    
    
    532,656Total liabilities
    
    
    79,604
    
    
    
    859,683
    
    
    
    717,549Commitments and contingencies (Notes 13 and 14)Stockholders equity (Note 9):Capital stock  nominal value
    
    
    410,864
    
    
    
    4,437,132
    
    
    
    4,320,278Restatement for inflation of capital stock
    
    
    143,965
    
    
    
    1,554,748
    
    
    
    1,552,939Additional paid in capital
    
    
    98
    
    
    
    1,060
    
    
    
    Retained earnings
    
    
    134,019
    
    
    
    1,447,339
    
    
    
    1,425,608Additional liability for labor obligations (Note 8)
    
    
    (1,059
    )
    
    
    (11,442
    )
    
    
    Cumulative initial effect of deferred income taxes
    
    
    24,440
    
    
    
    263,940
    
    
    
    263,940Total stockholders equity
    
    
    712,327
    
    
    
    7,692,777
    
    
    
    7,562,765Total
    
    $
    791,931
    
    
    Ps.
    8,552,460
    
    
    Ps.
    8,280,314
  F-3




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##### Table of Contents



Grupo Aeroportuario del Centro Norte, S.A.B. de C.V. and Subsidiaries
 Consolidated Statements of Income
For the years ended December 31, 2006, 2005 and 2004
(In thousands of U.S. dollars ($) and thousands of Mexican pesos (Ps.) of purchasing power of
December 31, 2006, except share and per share data)
 2006(ConvenienceTranslation;See Note 2)
    
    
    2006
    
    
    2005
    
    
    2004Revenues (Note 16):Aeronautical services
    
    $
    122,348
    
    
    Ps.
    1,321,300
    
    
    Ps.
    1,149,056
    
    
    Ps.
    1,044,448Non-aeronautical services
    
    
    28,231
    
    
    
    304,882
    
    
    
    277,208
    
    
    
    241,636150,579
    
    
    
    1,626,182
    
    
    
    1,426,264
    
    
    
    1,286,084Operating costs:Cost of services (Note 17)
    
    
    35,471
    
    
    
    383,065
    
    
    
    374,943
    
    
    
    345,565General and administrative expenses
    
    
    21,193
    
    
    
    228,872
    
    
    
    235,842
    
    
    
    233,296Concession taxes (Note 11)
    
    
    7,553
    
    
    
    81,569
    
    
    
    70,011
    
    
    
    62,531Technical assistance fees (Note 11)
    
    
    4,421
    
    
    
    47,746
    
    
    
    38,566
    
    
    
    38,758Depreciation and amortization
    
    
    26,067
    
    
    
    281,514
    
    
    
    219,552
    
    
    
    208,02794,705
    
    
    
    1,022,766
    
    
    
    938,914
    
    
    
    888,177Income from operations
    
    
    55,874
    
    
    
    603,416
    
    
    
    487,350
    
    
    
    397,907Net comprehensive financing income (cost):Interest income
    
    
    11,909
    
    
    
    128,614
    
    
    
    105,177
    
    
    
    50,163Exchange gain (loss)  net
    
    
    1,111
    
    
    
    11,995
    
    
    
    (25,486
    )
    
    
    (4,555
    )Monetary position loss
    
    
    (6,744
    )
    
    
    (72,829
    )
    
    
    (51,151
    )
    
    
    (60,395
    )6,276
    
    
    
    67,780
    
    
    
    28,540
    
    
    
    (14,787
    )Other income  net
    
    
    965
    
    
    
    10,413
    
    
    
    5,182
    
    
    
    4,440Income before income taxes and statutory employee profit sharing
    
    
    63,115
    
    
    
    681,609
    
    
    
    521,072
    
    
    
    387,560Current income tax expense (Note 12)
    
    
    10,065
    
    
    
    108,698
    
    
    
    4,408
    
    
    
    1,308Deferred income tax expense (Note 12)
    
    
    7,472
    
    
    
    80,694
    
    
    
    147,896
    
    
    
    88,773Current statutory employee profit sharing expense (Note 12)
    
    
    802
    
    
    
    8,659
    
    
    
    1,469
    
    
    
    377Deferred statutory employee profit sharing expense (Note 12)
    
    
    2,900
    
    
    
    31,321
    
    
    
    
    
    
    
    Consolidated net income
    
    $
    41,876
    
    
    Ps.
    452,237
    
    
    Ps.
    367,299
    
    
    Ps.
    297,102Weighted average number of common shares outstanding (Note 9)
    
    
    395,173,149
    
    
    
    395,173,149
    
    
    
    392,000,000
    
    
    
    392,000,000Basic and diluted earnings per share
    
    $
    0.1059
    
    
    Ps.
    1.1444
    
    
    Ps.
    0.9370
    
    
    Ps.
    0.7579
  F-4




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##### Table of Contents



Grupo Aeroportuario del Centro Norte, S.A.B. de C.V. and Subsidiaries
 Consolidated Statements of Changes in Stockholders Equity
For the years ended December 31, 2006, 2005 and 2004
(In thousands of U.S. dollars ($) and thousands of Mexican pesos (Ps.) of purchasing power of
December 31, 2006, except share data)
 Capital stock
    
    
    
    
    
    
    
    
    
    
    Additional
    
    
    CumulativeRestatement
    
    
    Additional
    
    
    
    
    
    
    liability for
    
    
    initial effect
    
    
    TotalNumber
    
    
    Nominal
    
    
    for inflation of
    
    
    paid-in
    
    
    Retained
    
    
    labor
    
    
    of deferred
    
    
    stockholdersof shares
    
    
    value
    
    
    capital stock
    
    
    capital
    
    
    earnings
    
    
    obligations
    
    
    income taxes
    
    
    equityBalances as of January 1, 2004
    
    
    392,000,000
    
    
    Ps.
    4,320,278
    
    
    Ps.
    1,552,939
    
    
    
    
    
    
    Ps.
    761,207
    
    
    
    
    
    
    Ps.
    263,940
    
    
    Ps.
    6,898,364Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    297,102
    
    
    
    
    
    
    
    
    
    
    
    297,102Balances as of December 31, 2004
    
    
    392,000,000
    
    
    
    4,320,278
    
    
    
    1,552,939
    
    
    
    
    
    
    
    1,058,309
    
    
    
    
    
    
    
    263,940
    
    
    
    7,195,466Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    367,299
    
    
    
    
    
    
    
    
    
    
    
    367,299Balances as of December 31, 2005
    
    
    392,000,000
    
    
    
    4,320,278
    
    
    
    1,552,939
    
    
    
    
    
    
    
    1,425,608
    
    
    
    
    
    
    
    263,940
    
    
    
    7,562,765Cash dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (430,506
    )
    
    
    
    
    
    
    
    
    
    
    (430,506
    )Issuance of common stock
    
    
    8,000,000
    
    
    
    116,854
    
    
    
    1,809
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    118,663Additional paid in capital
    
    
    
    
    
    
    
    
    
    
    
    
    
    Ps.
    1,060
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,060Comprehensive income (loss)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    452,237
    
    
    Ps.
    (11,442
    )
    
    
    
    
    
    
    440,795Balances as of December 31, 2006
    
    
    400,000,000
    
    
    Ps.
    4,437,132
    
    
    Ps.
    1,554,748
    
    
    Ps.
    1,060
    
    
    Ps.
    1,447,339
    
    
    Ps.
    (11,442
    )
    
    Ps.
    263,940
    
    
    Ps.
    7,692,777Balances as of December 31, 2005 (Convenience translation; Note 2)
    
    
    392,000,000
    
    
    $
    400,044
    
    
    $
    143,797
    
    
    $
    
    
    
    $
    132,007
    
    
    $
    
    
    
    $
    24,440
    
    
    $
    700,288Cash dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (39,864
    )
    
    
    
    
    
    
    
    
    
    
    (39,864
    )Issuance of common stock
    
    
    8,000,000
    
    
    
    10,820
    
    
    
    168
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,988Additional paid in capital
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    98
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    98Comprehensive income (loss)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    41,876
    
    
    
    (1,059
    )
    
    
    
    
    
    
    40,817Balances as of December 31, 2006
    
    
    400,000,000
    
    
    $
    410,864
    
    
    $
    143,965
    
    
    $
    98
    
    
    $
    134,019
    
    
    $
    (1,059
    )
    
    $
    24,440
    
    
    $
    712,327
  F-5




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##### Table of Contents



Grupo Aeroportuario del Centro Norte, S.A.B. de C.V. and Subsidiaries
Consolidated Statements of Changes in Financial Position
For the years ended December 31, 2006, 2005 and 2004
(In thousands of U.S. dollars ($) and thousands of Mexican pesos (Ps.) of purchasing power of
December 31, 2006)
 2006(ConvenienceTranslation;See Note 2)
    
    
    2006
    
    
    2005
    
    
    2004Operating activities:Net income
    
    $
    41,876
    
    
    Ps.
    452,237
    
    
    Ps.
    367,299
    
    
    Ps.
    297,102Items that did not require resources:Depreciation and amortization
    
    
    26,067
    
    
    
    281,514
    
    
    
    219,552
    
    
    
    208,027Employee retirement obligations net
    
    
    665
    
    
    
    7,187
    
    
    
    11,095
    
    
    
    591Deferred income tax
    
    
    9,735
    
    
    
    105,125
    
    
    
    136,571
    
    
    
    63,97278,343
    
    
    
    846,063
    
    
    
    734,517
    
    
    
    569,692Changes in operating assets and liabilities:(Increase) decrease in:Trade accounts receivable  net
    
    
    (10,219
    )
    
    
    (110,362
    )
    
    
    (81,964
    )
    
    
    (10,852
    )Accounts receivable from Consorcio
Aeroméxico, S.A.B de C.V., a related party
    
    
    8,133
    
    
    
    87,834
    
    
    
    62,121
    
    
    
    37,025Recoverable taxes
    
    
    (8,634
    )
    
    
    (93,244
    )
    
    
    (34,063
    )
    
    
    (26,861
    )Other current assets
    
    
    (5,756
    )
    
    
    (62,159
    )
    
    
    (8,293
    )
    
    
    (3,034
    )Increase (decrease) in:Trade accounts payable
    
    
    (259
    )
    
    
    (2,795
    )
    
    
    (16,196
    )
    
    
    17,363Accrued expenses and taxes other than income taxes
    
    
    3,069
    
    
    
    33,138
    
    
    
    (1,491
    )
    
    
    (3,783
    )Accounts payable to related parties
    
    
    755
    
    
    
    8,151
    
    
    
    5,229
    
    
    
    1,157Advances from customers
    
    
    (652
    )
    
    
    (7,041
    )
    
    
    13,993
    
    
    
    3,983Guarantee deposits
    
    
    619
    
    
    
    6,687
    
    
    
    1,035
    
    
    
    1,228Value-added tax payable
    
    
    (992
    )
    
    
    (10,715
    )
    
    
    2
    
    
    
    3,070Statutory employee profit sharing
    
    
    659
    
    
    
    7,119
    
    
    
    1,104
    
    
    
    (139
    )Net resources generated by operating activities
    
    
    65,066
    
    
    
    702,676
    
    
    
    675,994
    
    
    
    588,849Financing activities:Cash dividends
    
    
    (39,863
    )
    
    
    (430,506
    )
    
    
    
    
    
    
    Issuance of common stock
    
    
    10,988
    
    
    
    118,663
    
    
    
    
    
    
    
    Additional paid-capital
    
    
    98
    
    
    
    1,060
    
    
    
    
    
    
    
    Net resources used in investing activities
    
    
    (28,777
    )
    
    
    (310,783
    )
    
    
    
    
    
    
    Investing activities:Additions to property, machinery, equipment and improvements to concessioned properties
    
    
    (39,287
    )
    
    
    (424,285
    )
    
    
    (264,759
    )
    
    
    (268,830
    )Other assets
    
    
    
    
    
    
    
    
    
    
    (18,123
    )
    
    
    Net resources used in investing activities
    
    
    (39,287
    )
    
    
    (424,285
    )
    
    
    (282,882
    )
    
    
    (268,830
    )Cash and cash equivalents:Net increase (decrease)
    
    
    (2,998
    )
    
    
    (32,392
    )
    
    
    393,112
    
    
    
    320,019Balance at beginning of year
    
    
    152,301
    
    
    
    1,644,776
    
    
    
    1,251,664
    
    
    
    931,645Balance at end of year
    
    $
    149,303
    
    
    Ps.
    1,612,384
    
    
    Ps.
    1,644,776
    
    
    Ps.
    1,251,664
  F-6




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##### Table of Contents



Grupo Aeroportuario del Centro Norte, S.A.B. de C.V. and Subsidiaries
 Notes to the Consolidated Financial Statements
For the years ended December 31, 2006, 2005 and 2004
(In thousands of U.S. dollars ($) and thousands of Mexican pesos (Ps.) of purchasing power of
December 31, 2006, except share and per share data)
 1.
    
    Activities and significant eventsActivitiesGrupo Aeroportuario del Centro Norte, S.A.B. de C.V. (GACN, or collectively
with its subsidiaries, the Company) is a holding company, whose subsidiaries are engaged in
the administration, operation and use of 13 airports under a concession granted by the Mexican
government through the Ministry of Communications and Transportation (SCT). The airports
are located in the following cities: Monterrey, Acapulco, Mazatlán, Zihuatanejo, Ciudad
Juárez, Reynosa, Chihuahua, Culiacán, Durango, San Luis Potosí, Tampico, Torreón, and
Zacatecas.Significant eventsThe Company began operations on November 1, 1998. Prior to that date,
the Company s activities were carried out by Aeropuertos y Servicios Auxiliares (ASA), a
Mexican government agency that was responsible for the operation of all public airports in
Mexico.The Companys formation was part of the Mexican governments plan to open the Mexican Airport
System to private investors under a two-stage program developed by the SCT. 35 of the 58
public airports in Mexico selected for the program were divided into four groups: the
Central-North Group formed by 13 airports, the Southeast Group formed by 9 airports, the
Mexico City Group formed by 1 airport, and the Pacific Group formed by 12 airports. As part of
the programs first stage, strategic partners were selected for each airport group (except the
Mexico City Group) through public bidding processes. The strategic partner would acquire 15%
of the capital of the airport group and the obligation to enter into a participation contract
as well as a contract to provide technical assistance services. In the second stage of the
privatization, part or all of the remaining equity holdings in each airport group would be
offered to the general public in the securities markets.On June 29, 1998, the SCT granted to the subsidiaries of GACN, concessions to manage, operate
and develop the 13 airports that comprise the Central-North Group, and benefit from the use of
the airport facilities for a period of 50 years beginning November 1, 1998. The term may be
extended by the SCT in one or more instances, not to exceed a total of an additional 50 years.
The value of the concessions of Ps. 5,603,036 (Ps. 3,962,405 historical pesos) was not
determined by the Mexican government until June 2, 2000, the date on which Servicios de
Tecnología Aeroportuaria, S.A. de C.V. (SETA), the Companys strategic partner, acquired 15%
of the Company. On that date, the Company and the Mexican government determined the value of
the concessions on the basis of the price paid by SETA which was recorded as a single asset in
the Companys financial statements, and a corresponding credit to equity in favor of the
Mexican government.Notwithstanding that the Company has rights to manage, operate and develop thirteen airports,
under the General Law of National Properties, all long-term fixed assets located in the
airports pertain to the Mexican government. Upon expiration of the concession term, the
improvements made during the term of the concessions will automatically revert to the Mexican
government.As a result of the public bidding process discussed above, in June 2000, a stock purchase
agreement was executed between the Mexican government and SETA, whereby the Mexican government
sold 15% of its then-outstanding equity interests in the Company to SETA. SETA paid the
Mexican government Ps. 864,056 (historical pesos), excluding interest, in exchange for: (i)
58,800,000 Class I Series BB shares; (ii) an option to acquire from the Mexican government
an additional 36% of the then-outstanding equity interest held by the Mexican government in
the Company, in the event that such shares were not sold in a public offering within a
specified time period (which was subsequently assigned to one of SETAs stockholders; see
below); (iii) the right and obligation to enter into various agreements, including a technical
assistance and transfer-of-technology agreement as defined in the public bidding process; and
(iv) a stock option agreement, according to which SETA had the option to subscribe up to 3% of
the new Series B shares. This option was exercisable in three tranches of 1% each over a
period from June 14, 2003 to June 14, 2007, provided that SETA complied with its obligations
under the technical assistance and transfer-of-technology agreement. The option exercise price
was $1.1286 (Ps.11.0198) plus a 5% annual premium,
 F-7




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##### Table of Contents



subject to decrease by an amount equal to any dividend payments made by the Company to its
stockholders. The first tranche expired unexercised in June 2005. On August 28, 2006, at a
Stockholders Ordinary and Extraordinary General Meeting, the issuance of 8 million shares,
representing the remaining 2% under the option was approved, which increased shares
outstanding of GACN from 392,000,000 to 400,000,000. On September 5, 2006 SETA exercised the
option at a price per share of $1.3527 (Ps. 14.6735).At December 31, 2006, SETAs, stockholders were Aeroinvest, S.A. de C.V. (Aeroinvest)
(subsidiary of Empresas ICA, S.A. de C.V.) with 74.5% and Aéroports de Paris, S.A with 25.5%.
Pursuant to the Companys bylaws, SETA (as holder of the Companys Series BB shares) has the
right to present to the board of directors the name or names of the candidates for appointment
of certain of the Companys senior management, the right to appoint and remove the Companys
chief financial officer, chief operating officer and commercial director, the right to elect
three members of the Companys board of directors and the right to veto certain actions
requiring approval of the Companys stockholders (including the payment of dividends, the
amendment of the Companys bylaws and the amendment of its right to appoint certain members of
senior management). In the event of the termination of the technical assistance agreement, the
Series BB shares will be converted into Series B shares resulting in the termination of
these rights. If at any time, prior to June 14, 2015, SETA were to hold less than 7.65% of
the Companys capital stock in the form of Series BB shares, it would lose its veto rights
(but other special rights it possess as a Series BB shareholder would be unaffected) . If
at any time after June 14, 2015, SETA were to hold less than 7.65% of the Companys capital
stock in the form of Series BB shares, such shares must be converted into Series B shares,
which would cause SETA to lose all of its special rights. So long as SETA retains at least
7.65% of the Companys capital stock in form of Series BB shares, all its special rights
will remain in force.Pursuant to the Companys bylaws, the technical assistance agreement and the participation
agreement, SETA may not transfer more than 51% of its Series BB shares until after June 14,
2007. After such date, SETA is entitled to transfer up to one eighth of such 51% during each
year thereafter.As noted above, SETA had the option to acquire from the Mexican government Series B shares
representing 36% of the then-outstanding capital stock of the Company. Such option provided
that in the event that Nacional Financiera, S.N.C. (Nafin), a trust which holds the Mexican
governments share of the Companys common stock, did not sell its shares representing 36% of
the then-outstanding common stock of the Company through a public offering prior to the fourth
anniversary of the date from which the Company and SETA entered into a participation agreement
(which four-year term ended June 14, 2004), then SETA had the option to purchase from Nafin
Series B shares representing 36% of the then-outstanding capital stock of the Company. The
option could be exercised by SETA via notice to Nafin delivered during the twelve months
following the four-year term. The per share price was $1.1286 (Ps.11.0198), plus a premium
calculated at 5% per year, subject to decrease based on dividends paid by the Company. The
purchase price was payable in U.S. dollars or the peso equivalent at an exchange rate as
determined by the option agreement. As allowed by the terms of the option agreement, such
option was assigned to and exercised by Aeroinvest during December 2005 at an exercise price
per share of $1.4404 (Ps.15.3449).On November 29, 2006, the Company carried out an initial public offering (IPO) under which
the Mexican government sold its 48% participation in the Series B shares of the Company
(including the exercise of the over allotment option) on the Mexican Stock Exchange and the
NASDAQ Global Select Market. A total of 192,080,000 shares were sold. The Company did not
receive any proceeds from the IPO. At December 31, 2006, 47.0% of the Companys capital is
owned by the public, 17% is held directly by SETA and 36% is held directly by Aeroinvest.2.
    
    Bases of presentation and consolidationTranslation into English The accompanying consolidated financial statements have been
translated from Spanish into English for use outside of Mexico. These consolidated financial
statements are in accordance with Mexican Financial Reporting Standards (MFRS). Certain
accounting practices applied by the Company vary in certain significant respects from
accounting principles generally accepted in the United States of America (U.S. GAAP). See
Note 19 for a discussion of such differences and for a reconciliation of the Companys
financial statements between MFRS and U.S. GAAP.Convenience translation The consolidated financial statements are stated in Mexican pesos,
the currency of the country in which the Company is incorporated and operates. The
translations of Mexican peso amounts into U.S. dollar amounts are included solely for the
convenience of readers in the United States of America and have been made at the rate of
10.7995 Mexican pesos to one U.S. dollar, the noon buying rate of the Federal Reserve Bank of
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New York on December 31, 2006. Such translations should not be construed as representations
that the Mexican peso amounts have been, could have been, or could in the future, be converted
into U.S. dollars at that rate or any other rate.Basis of consolidation The consolidated financial statements include the financial
statements of Grupo Aeroportuario del Centro Norte, S.A. de C.V. and its wholly-owned
subsidiaries. All significant intercompany balances, transactions and investments have been
eliminated in the accompanying consolidated financial statements.The wholly-owned subsidiaries whose financial statements have been consolidated with those of
Grupo Aeroportuario del Centro Norte, S.A. de C.V. are as follows: Aeropuerto de Acapulco,
S.A. de C.V., Aeropuerto de Ciudad Juárez, S.A. de C.V., Aeropuerto de Culiacán, S.A. de C.V.,
Aeropuerto de Chihuahua, S.A. de C.V., Aeropuerto de Durango, S.A. de C.V., Aeropuerto de
Mazatlán, S.A. de C.V., Aeropuerto de Monterrey, S.A. de C.V., Aeropuerto de Reynosa, S.A. de
C.V., Aeropuerto de San Luis Potosí, S.A. de C.V., Aeropuerto de Tampico, S.A. de C.V.,
Aeropuerto de Torreón, S.A. de C.V., Aeropuerto de Zacatecas, S.A. de C.V., Aeropuerto de
Zihuatanejo, S.A. de C.V., and Servicios Aeroportuarios del Centro Norte, S.A. de C.V.
(SACN).Comprehensive income (loss) -Comprehensive income (loss) presented in the accompanying
consolidated statements of changes in stockholders equity represents the Companys total
activity during each year and is comprised of the net income for the year, plus other
comprehensive income (loss) items for the same period which are presented directly in
stockholders equity without affecting the consolidated statements of income. In 2006, the
other comprehensive loss item consists of the additional liability recognized for labor
obligations. In 2005 and 2004, there were no other items in comprehensive income.3.
    
    Summary of significant accounting policiesNew financial reporting standards As of June 1, 2004, the function of establishing and
issuing MFRS became the responsibility of the Mexican Board for Research and Development of
Financial Reporting Standards (CINIF). CINIF changed the terminology referring to the body
of Mexican accounting principles from accounting principles generally accepted in Mexico,
previously issued by the Mexican Institute of Public Accountants (IMCP), to MFRS. As of
December 31, 2005, eight Series A standards had been issued (NIF A-1 to NIF A-8), representing
the Conceptual Framework, intended to serve as the supporting rationale for the development of
such standards, and as a reference to resolve issues arising in practice; NIF B-1, Accounting
Changes and Correction of Errors, was also issued. The Series A NIFs and NIF B-1 went into
effect as of January 1, 2006. Application of the new MFRS did not have a material impact on
the Companys financial position, results of operations or related disclosures.The accompanying consolidated financial statements have been prepared in conformity with MFRS,
which require that management make certain estimates and use certain assumptions that affect
the amounts reported in the financial statements and their related disclosures; however,
actual results may differ from such estimates. The Companys management, upon applying
professional judgment, considers that estimates made and assumptions used were adequate under
the circumstances. The significant accounting policies of the Company are as follows:
 a.
    
    New accounting polices Effective January 1, 2005, the Company adopted the
revised provisions of Bulletin D-3, Labor Obligations, related to recognition of the
liability for severance payments for reasons other than restructuring, which is recorded
using the projected unit credit method, based on calculations by independent actuaries.
Bulletin D-3 allowed the option to recognize a transition asset or liability to be
amortized over the remaining years of service of the employees. The accrued liability as
of January 1, 2005 calculated by independent actuaries was $7,939. The Company chose to
record such amount as a transition liability which is being amortized over five years.b.
    
    Recognition of the effects of inflation The Company restates its consolidated
financial statements to Mexican peso purchasing power of the most recent balance sheet
date presented. Accordingly, the consolidated financial statements of the prior year,
that are presented for comparative purposes, have also been restated to Mexican pesos of
the same purchasing power and, therefore, differ from those originally reported in prior
years. Recognition of the effects of inflation results mainly in inflationary gains or
losses on nonmonetary and monetary items that are presented in the financial statements
under the caption monetary position loss. Monetary position loss represents the erosion
of the purchasing power of monetary items
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caused by inflation and is calculated by applying Mexican National Consumer Price Index
(INPC) factors to monthly net monetary position. Losses result from maintaining a net
monetary asset position, respectively.c.
    
    Cash and cash equivalents- This item mainly consists of bank deposits in checking
accounts and daily investments of cash surpluses which may be immediately realized. They
are recorded at face value plus accrued yields which are recognized in results as they
accrue.d.
    
    Property, machinery, equipment and improvements to concessioned properties 
Expenditures for property, machinery and equipment, including improvements that increase
the value of assets by increasing their service capacity, improving their efficiency or
prolonging their useful lives, are capitalized. These amounts are initially recorded at
acquisition cost and are restated using the INPC. Depreciation is calculated using the
straight-line method beginning with the month following the purchase date, using final
restated balances, based on the estimated remaining useful lives of the related assets,
as follows:
 TotalyearsImprovements to concessioned properties
    
    
    8 to 20Machinery and equipment
    
    
    10Office furniture and equipment
    
    
    10Vehicles
    
    
    4Computers
    
    
    3.3
   e.
    
    Rights to use airport facilities and airport concessions This caption represents
the value of the airport concessions and the related rights to use airport facilities
granted by the SCT at each of the Companys 13 airports.In January 2003, in order to assign values to the concessioned assets at each airport,
the Company obtained an appraisal performed by independent experts, on which basis the
Company allocated the original cost of the concession to the airport terminals, runways,
aprons, platforms, land and machinery. Such assets are presented in the balance sheet
under the caption Rights to use airport facilities, which are restated by considering
factors derived from the INPC, and are amortized in accordance with the remaining useful
lives of the concessioned assets determined in the appraisal (or as modified, as
discussed in insert c above).At those airports where the original cost of the concession exceeded the appraised value
of the related assets, such surplus is classified as Airport concessions. The airport
concessions are restated by considering factors derived from the INPC and are amortized
using the straight-line method over 50 years, which represents the duration of the
concession (see Note 7).f.
    
    Impairment of long-lived assets in use The Company reviews the carrying amounts
of long-lived assets in use when an impairment indicator suggests that such amounts might
not be recoverable, considering the greater of the present value of future net cash flows
or the net sales price upon disposal. Impairment is
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recorded when the carrying amounts exceed the greater of the amounts mentioned above.
Impairment indicators considered for these purposes are, among others, operating losses
or negative cash flows in the period if they are combined with a history or projection of
losses, depreciation and amortization charged to results, which in percentage terms in
relation to revenues are substantially higher than that of previous years, obsolescence,
and other legal and economic factors.In accordance with MFRS, management considers that GACN, together with its 13 airport
subsidiaries, can be considered an independent cash generating unit, as all are part of
the Central-North package included in the Mexican governments bidding process. Under the
privatization process, each airport concession must operate its airport, regardless of
their individual results. At December 31, 2006, the Companys impairment analysis did
not indicate any losses from impairment.
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g.
    
    Employee retirement obligationsSeniority premiums and, beginning in 2005,
severance payments, are recognized as costs over employee years of service and are
calculated by independent actuaries using the projected unit credit method at net
discount rates. Accordingly, the liability is being accrued which, at present value, will
cover the obligation from benefits projected to the estimated retirement date of the
Companys employees. Through December 31, 2004, severance payments were charged to
results when the liability was determined to be payable.h.
    
    Provisions  Provisionsare recognized for current obligations that result form
past event, that are probable to result in the use of economic resources, and that can be
reasonable estimated.i.
    
    Income taxes, tax on assets and statutory employee profit sharing Income taxes
(ISR) and statutory employee profit sharing (PTU) are recorded in results of the year
in which they are incurred. Deferred income tax assets and liabilities are recognized
for temporary differences resulting from comparing the accounting and tax bases of assets
and liabilities plus any future benefits from tax loss carryforwards. Deferred ISR
assets are reduced by any benefits about which there is uncertainty as to their
realizability.PTU is determined based on taxable income, according to Section I of Article 10 of the
Income Tax Law. Deferred PTU is derived from temporary differences between the accounting
result and income for PTU purposes and is recognized only when it can be reasonably
assumed that such difference will generate a liability or benefit, and there is no
indication that circumstances will change in such a way that the liabilities will not be
paid or benefits will not be realized.Tax on assets (IMPAC) paid that is expected to be recoverable is recorded as an
advance payment of ISR and is presented in the balance sheet decreasing the deferred ISR
liability.j.
    
    Foreign currency transactions Foreign currency transactions are recorded at the
applicable exchange rate in effect at the transaction date. Monetary assets and
liabilities denominated in foreign currency are translated into Mexican pesos at the
applicable exchange rate in effect at the balance sheet date. Exchange fluctuations are
recorded as a component of net comprehensive financing income (cost) in the consolidated
statements of income.k.
    
    Concentrations of credit risk Financial instruments that are subject to a
potential credit risk due to noncompliance by the counterparty primarily consist of cash
and cash equivalents and trade receivables from the Companys principal domestic and
international airline customers. Cash and cash equivalents are maintained in different
prestigious financial institutions in Mexico and mainly refer to bank deposits and
immediately realizable investments. With respect to trade accounts receivable, to reduce
its credit risk, the Company conducts periodic evaluations of the financial situation of
its customers and also requests specific guarantees or advances when deemed necessary.
The Company believes that its potential credit risk is adequately covered by the
allowance for doubtful accounts that it has recognized. In 2006 and 2005, approximately
18.5% and 16.4%, respectively, of the Companys accounts receivable correspond to amounts
due from Compañía Mexicana de Aviación, S.A. de C.V. (Mexicana), approximately 28.3%
and 29.1%, respectively, correspond to amounts due from Aerovías de México, S.A. de C.V.
(Aeromexico), and approximately 11.7% and 17.5%, respectively, correspond to amounts
due from Consorcio Aviacsa, S.A. de C.V. In addition, of the Companys consolidated
revenues for the year ended December 31, 2006, 2005 and 2004, approximately 10.3%, 9.4%
and 11.0%, respectively, correspond to revenues generated by Mexicana, approximately
16.9%, 19.1% and 23.7%, respectively, correspond to revenues generated by Aeromexico and
approximately 9.6%, 10.1% and 9.0%, respectively, correspond to revenues generated by
Consorcio Aviacsa, S.A. de C.V.l.
    
    Revenue recognition Revenue is generated mainly from the rendering of
aeronautical services (regulated revenues), which refer to the use of the airport
facilities by airlines and passengers. Aeronautical services consist of services that
generate revenues necessary for the operation and proper functioning of an airport.
These revenues are subject to a system of prices regulated by the SCT, which establishes
a maximum rate for such aeronautical and complementary services provided at each airport.
Such revenues are recognized when the services are rendered (see Note 16).
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The Company also generates revenue from non-aeronautical services, which consist
mainly of the leasing of commercial spaces in airport terminals, revenues from the
operation of parking lots, fees from access to third parties that provide catering
services and other services at airports. Spaces in the airport terminals are rented
through operating lease agreements that contain either fixed monthly rent (increased
annually based on the INPC) or fees based on a minimum monthly fee or a percentage of
the monthly income of the lessee, whichever is higher. The fixed portion of lease
revenues is recognized when the services are rendered or based on the terms of the
related lease. The contingent rentals generated from the percentage of lessee monthly
income are recognized in income once the contingency is met. Therefore, during the
year, the percentage of lessee monthly revenues is recognized in the following month,
once the Company has received information related to its tenants revenues. Though each
year reported includes twelve months of revenues, this accounting treatment results in a
one-month lag with respect to the commercial revenues for those tenants whose stated
percentage of monthly income is greater than the minimum monthly fee. However, the
Company monitors the effect of this one-month lag at each reporting date and does not
believe such effect to be material to its reported results.m.
    
    Earnings per share Basic earnings per common share are calculated by dividing
consolidated net income by the weighted average number of shares outstanding during the
year. The Company does not have diluted securities for purposes of MFRS; therefore basic
and diluted earnings per share are the same.
 4.
    
    Cash and cash equivalents
 2006
    
    
    2005Cash equivalents
    
    Ps.
    1,487,994
    
    
    Ps.
    1,447,604Cash
    
    
    124,390
    
    
    
    197,172Ps.
    1,612,384
    
    
    Ps.
    1,644,776
 5.
    
    Trade accounts receivable
 2006
    
    
    2005Accounts receivable
    
    Ps.
    251,131
    
    
    Ps.
    153,990Allowance for doubtful accounts
    
    
    (8,907
    )
    
    
    (22,128
    )Ps.
    242,224
    
    
    Ps.
    131,862
 Passenger charges are payable for each passenger (other than diplomats, infants, transfer
and transit passengers) departing form the airport terminals operated by the Company and are
collected by the airlines and subsequently remitted to the Company.Accounts receivable (including amounts from Consorcio Aeroméxico, S.A. de C.V.) includes
balances invoiced to domestic and international airlines for passenger charges at December
31, 2006 and 2005, amounting to Ps.214,855 and Ps.179,848 respectively.The majority of the common stock of Consorcio Aeroméxico, S.A. de C.V. (Consorcio
Aeroméxico) is owned by the Bank Savings Protection Institute (IPAB), a decentralized
federal government entity, for which reason Consorcio Aeroméxico and the Mexican government
were considered to be related parties of the Company up to November 29, 2006, on which date
the Mexican government sold its participation in the Company through a public offering as
discussed in Note 1.Allowance for doubtful accounts The Company periodically reviews the sufficiency of its
allowance for doubtful accounts considering the nature and aging of its receivables as well
as other factors including the credit risks associated with individual customers, the
airline industry as a whole and existing macro-economic conditions. Past due or delinquency
status is determined on the basis of the terms of the relevant contract, at which point the
Company employs all efforts to collect the amount. When an account is deemed uncollectible,
such account is written-off once the Company has exhausted all collection means at its
disposal, which generally occurs following a judicial determination that a particular
receivable is not collectible.
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6.
    
    Property, machinery, equipment and improvements to concessioned properties
 2006
    
    
    2005Improvements to concessioned properties
    
    Ps.
    1,742,411
    
    
    Ps.
    1,292,380Machinery and equipment
    
    
    196,704
    
    
    
    171,260Office furniture and equipment
    
    
    45,565
    
    
    
    42,659Vehicles
    
    
    109,090
    
    
    
    109,693Computers
    
    
    19,712
    
    
    
    18,3012,113,512
    
    
    
    1,634,293Accumulated depreciation
    
    
    (479,911
    )
    
    
    (371,202
    )1,615,601
    
    
    
    1,263,091Construction in-progress
    
    
    142,463
    
    
    
    205,999Ps.
    1,758,064
    
    
    Ps.
    1,469,090
 Depreciation for the years ended December 31, 2006, 2005 and 2004 related to property,
machinery, equipment and improvements to concessioned properties was Ps. 135,312, Ps. 80,241
and Ps. 69,699, respectively. In addition, the Company incurred for the year ended December
31, 2006 and 2005 Ps. 7,797 and Ps. 907, respectively of amortization of other assets; there
were no other assets in 2004.Construction in-progress refers mainly to the rehabilitation of the runways at the Tampico,
Monterrey, Acapulco, and Torreón airports and the remodeling of the Monterrey, Ciudad Juárez
and Acapulco airports.7.
    
    Rights to use airport facilities and airport concessionsAs described in Note 3 e., effective January 1, 2003, the total cost of the concession
was assigned proportionally to rights to use airport facilities on the basis of the net
replacement value of the assets determined by an independent appraiser; at any airport
concession where the cost exceeded the appraised value, such excess was recognized within the
airport concessions caption. The allocation was made as set forth below:
 Term ofRemainingAmortizationin YearsCost of the concession from the SCT (Note 1 and 3e.)
    
    Ps.
    5,603,036Appraised amount assigned to:Right to use airport facilities:Runways, aprons and platforms
    
    Ps.
    1,473,489
    
    
    
    28Buildings
    
    
    966,465
    
    
    
    30Other infrastructure
    
    
    337,257
    
    
    
    22Land
    
    
    1,969,416
    
    
    
    434,746,627Airport concessions
    
    
    856,409
    
    
    
    43Total cost
    
    Ps.
    5,603,036
 The value of the rights to use airport facilities and airport concessions at December 31 is as
follows:
 2006
    
    
    2005Rights to use airport facilities
    
    Ps.
    4,746,627
    
    
    Ps.
    4,746,627Less  Accumulated depreciation
    
    
    (769,879
    )
    
    
    (648,602
    )Ps.
    3,976,748
    
    
    Ps.
    4,098,025Airport concessions
    
    Ps.
    856,409
    
    
    Ps.
    856,409Less  Accumulated amortization
    
    
    (119,897
    )
    
    
    (102,768
    )Ps.
    736,512
    
    
    Ps.
    753,641
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
    
    The concessionaire has the right to manage, operate, maintain and use the airport
facilities and carry out any construction, improvements or maintenance of the related
facilities in accordance with its Master Development Program, and to provide airport,
complementary and commercial services.
    
    The concessionaire will use the airport facilities only for the purposes specified in
the concession agreement, will provide services in conformity with the law and applicable
regulations and will be subject to inspections by the SCT.
    
    The concessionaire must pay a tax for the operation of the assets under concession
(currently 5% of the concessionaires annual gross revenues derived from the use of
public property), in conformity with the Mexican Federal Duties Law.
    
    ASA has the exclusive right to supply fuel at the concessionaires airport.
    
    The concessionaire must grant free access to specific airport areas to certain Mexican
government agencies, so that they may carry out their activities within the airports.
    
    According to Article 27 of the General Law on Airports, the concession may be revoked
if the concessionaire breaches any of its obligations established therein or falls under
any of the causes for revocation referred to in Article 26 of the law and in the
concession agreement. The breach of certain concession terms may be cause for revocation
if the SCT has applied sanctions in three different instances with respect to the same
concession term.
    
    The SCT may modify concession terms and conditions that regulate the Companys operations.
    
    The concession may be renewed in one or more instances, for terms not to exceed an additional 50 years.
 8.
    
    Employee retirement obligationsThe related liability and annual cost of such benefits are calculated by an independent
actuary on the basis of formulas defined in the plans using the projected unit credit method.The present values of these obligations and the rates used for the calculations are:
 2006
    
    
    2005Accumulated benefit obligation
    
    Ps.
    (33,114
    )
    
    Ps.
    (23,225
    )Projected benefit obligation
    
    Ps.
    (35,830
    )
    
    Ps.
    (26,926
    )Unrecognized items:Transition liability
    
    
    6,205
    
    
    
    10,241Past service costs and changes to the plan
    
    
    (17,205
    )
    
    
    3,003Variances for assumptions and adjustments based on experience
    
    
    22,295
    
    
    
    1,606Net projected liability
    
    
    (24,535
    )
    
    
    (12,076
    )Additional liability (recognized as an intangible asset and
within comprehensive income)
    
    
    (17,537
    )
    
    
    (11,149
    )Accrued benefit cost
    
    Ps.
    (42,073
    )
    
    Ps.
    (23,225
    )
  2006
    
    2005
    
    2004%
    
    %
    
    %Discount of the projected benefit obligation at present value
    
    
    5.00
    
    
    
    4.50
    
    
    
    4.50Salary increase
    
    
    1.50
    
    
    
    1.00
    
    
    
    1.00
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2006
    
    
    2005
    
    
    2004Service cost for the year
    
    Ps.
    7,530
    
    
    Ps.
    11,138
    
    
    Ps.
    2,020Amortization of the transition liability
    
    
    1,926
    
    
    
    
    
    
    
    Amortization of plan changes
    
    
    320
    
    
    
    333
    
    
    
    344Amortization of the variances for assumptions
    
    
    1,114
    
    
    
    89
    
    
    
    27Financial cost for the year
    
    
    1,380
    
    
    
    442
    
    
    
    409Net period cost
    
    Ps.
    12,270
    
    
    Ps.
    12,002
    
    
    Ps.
    2,800
 9.
    
    Stockholders equity
 a.
    
    At December 31, 2006, a total of 400,000,000 Class I shares, consisting of 58,800,000
Series BB shares and 341,200,000 Series B, Class I shares were authorized and issued.
As of December 31, 2005 and 2004, the total number of authorized
and issued Class I shares was 392,000,000 shares, of which 58,800,000 referred to Series BB and
333,200,000 to Series B shares.b.
    
    The subscribed and paid-in capital stock at December 31, 2006 is solely comprised
of fixed capital and is represented by ordinary, registered no-par shares and is composed
as follows:
 Number of
    
    
    Historical
    
    
    Restatement
    
    
    Restated capitalshares
    
    
    value
    
    
    effect
    
    
    stockSeries B, Class I
    
    
    341,200,000
    
    
    Ps.
    3,792,513
    
    
    Ps.
    1,323,038
    
    
    Ps.
    5,115,551Series BB, Class I
    
    
    58,800,000
    
    
    
    644,619
    
    
    
    231,710
    
    
    
    876,329Total
    
    
    400,000,000
    
    
    Ps.
    4,437,132
    
    
    Ps.
    1,554,748
    
    
    Ps.
    5,991,880
 The composition of the Companys capital stock at December 31, 2005 and 2004 was the same
as that presented in the table above except that Series B, Class I shares were
represented by 333,200,000 Series A shares that were subsequently converted to Series B
as discussed in insert d. below.c.
    
    On August 28, 2006, the Companys shareholders approved the issuance of 8,000,000
Series B shares. On September 5, 2006, SETA acquired such shares through the exercise
of a stock option granted to it by the Company as mentioned in Note 1.d.
    
    On August 28, 2006, at a Stockholders Ordinary and Extraordinary General Meeting,
the stockholders declared a dividend Ps. 430,506, which was paid on September 22, 2006.e.
    
    On October 2, 2006, the Companys shareholders approved a 1-for-14.69482276 reverse
stock split of the Companys outstanding common stock, reducing the number of shares
outstanding at such date from 5,877,929,102 shares to 400,000,000 shares. All share, per
share and option data in the accompanying consolidated financial statements and notes
thereto have been retroactively restated to reflect the effects of the reverse stock
split for all periods presented.f.
    
    In a General Extraordinary Stockholders Meeting held on December 21, 2005, the
stockholders approved the conversion of all the Series A shares representing the
capital stock of the Company into ordinary, registered, no-par value Series B, Class
I shares.g.
    
    According to the Companys articles of incorporation, on May 28, 1998, an initial
contribution of Ps. 1,761 (Ps. 1,000 historical pesos) was made through the issuance of
68,051 Class I shares. Pursuant to the resolutions at the Extraordinary Stockholders
Meetings held on December 14, 1998, August 31, 1999, and June 5, 2000, the minimum,
non-withdrawable fixed capital was increased by Ps. 123,332 (Ps. 77,653 historical pesos)
through the issuance of 5,284,385 Series A shares, Ps.16,390 (Ps. 11,195 historical
pesos) through the issuance of 761, 789 Series A shares, and Ps. 5,731,735 (Ps.
4,230,430 historical pesos) through the issuance 385,885,775 shares (327,085,775 of which
correspond to Series A and 58,800,000 correspond to Series BB), respectively,
totaling 392,000,000 ordinary, registered, no-par value, Class I shares at December 31,
2005.h.
    
    Mexican General Corporate Law requires that at least 5% of net income of the year
be transferred to the legal reserve until the reserve equals 20% of capital stock at par
value in historical pesos. The legal reserve may be
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capitalized but may not be
distributed, except in the form of a stock dividend, unless the entity is dissolved. The
legal reserve must be replenished if it is reduced for any reason. At December 31, 2006
and 2005 the legal reserve amounted to Ps. 69,584 and Ps. 37,285, respectively.i.
    
    Stockholders equity, except restated paid-in capital and tax retained earnings,
will be subject to income tax at the rate in effect when the dividend is distributed. In
2006, 2005 and 2004, the ISR rate was 29%, 30% and 33%, respectively; it will decrease to
28% in 2007 and thereafter. Any tax paid on such distribution may be credited against the
income tax payable of the year in which the tax on the dividend is paid and the two fiscal
years following such payment.j.
    
    The balances of the stockholders equity tax accounts as of December 31 are as
follows:
 2006
    
    
    2005Contributed capital account
    
    Ps.
    5,625,463
    
    
    Ps.
    5,507,884Net fiscal income account
    
    
    17,581
    
    
    
    13,956Reinvested net fiscal income account
    
    
    32,294
    
    
    
    32,294Total
    
    Ps.
    5,675,338
    
    
    Ps.
    5,554,134
 10.
    
    Foreign currency balances and transactionsAt December 31 the foreign currency monetary position in thousands of U.S. dollars is as
follows:
 2006
    
    
    2005Monetary assets
    
    $
    32,912
    
    
    $
    47,675Monetary liabilities
    
    
    (3,774
    )
    
    
    (1,236
    )Monetary asset position
    
    $
    29,138
    
    
    $
    46,439Equivalent in Mexican pesos
    
    Ps.
    313,114
    
    
    Ps.
    513,868
  2006
    
    2005
    
    2004Technical assistance fee
    
    $
    4,340
    
    
    $
    3,373
    
    
    $
    3,000Payment of insurance policies
    
    
    1,416
    
    
    
    1,571
    
    
    
    1,882Professional services, fees and subscriptions and expenses related to initial
public offering
    
    
    2,358
 At December 31, 2006, 2005 and 2004, the exchange rate of Mexican p esos per one U.S. dollar,
as published by Banco de Mexico, was Ps.10.8205, Ps. 10.6344, and Ps. 11.1495, respectively.As of June 28, 2007, the exchange rate was Ps.10.7926 per one U.S. dollar.11.
    
    Balances and transactions with related partiesBalances with related parties at December 31 were as follows:
 2006
    
    
    2005Balances payable:SETA
    
    Ps.
    28,289
    
    
    Ps.
    13,673Grupo ICA, S.A. de C.V.
    
    
    5,351
    
    
    
    Mexican government Concession taxes
    
    
    
    
    
    
    11,816Ps.
    33,640
    
    
    Ps.
    25,489
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##### Table of Contents



2006
    
    2005
    
    2004Revenues generated by aeronautical and non-aeronautical
services provided to Consorcio Aeroméxico
    
    Ps.
    327,584
    
    
    Ps.
    508,261
    
    
    Ps.
    545,433Expenses:Technical assistance fees and related out-of-pocket costs
    
    
    47,746
    
    
    
    38,566
    
    
    
    38,758Concession taxes
    
    
    74,426
    
    
    
    70,001
    
    
    
    62,531Administrative services provided by Grupo ICA, S.A. de C.V.
    
    
    4,700
    
    
    
    
    
    
    
    Capital expenditures Rehabilitation of runways by
Ingenieros Civiles y Asociados, S.A. de C.V
    
    
    26,324
    
    
    
    24,595
    
    
    
    
 Revenues invoiced to Consorcio Aeroméxico-owned airlines include Ps. 257,901, Ps. 394,513 and
Ps. 390,488 of passenger charges for the years ended December 31, 2006, 2005 and 2004,
respectively.On December 20, 2005, Consorcio Aeroméxico, S.A. de C.V. sold 99.97% of the capital stock of
Compañía Mexicana de Aviación, S.A. de C.V. and Aerocaribe, S.A. de C.V. Therefore balances
with related parties as of December 31, 2006 and 2005 do not include these companies, though
transactions with these entities are included in the disclosures above through December 20,
2005.Technical assistanceThe Company has executed a technical assistance and
transfer-of-technology contract with SETA, which will be in effect for 15 years. Currently,
the Company is required to pay the greater of the fixed $3,000 component or 5% of consolidated
operating income (as defined in the contract) annually for such services. Beginning in 2006,
the fixed $3,000 component will be updated according to the consumer price index of the United
States of America.Concession tax According to the Mexican Federal Duties Law and the terms of the Companys
concession agreements, the Company must pay the Mexican government an annual tax for the
rights to use the airport facilities, which is currently equal to 5% of annual gross revenues.As described in Note 1, on November 29, 2006, the Company carried out a public offering of
            shares in which all the shares owned by the Mexican government were sold; consequently, as of
that date, Consorcio Aeroméxico and the Mexican government are no longer considered to be
related parties, and the revenues and expenses shown above refer to the operations performed
from January through November 2006.12.
    
    ISR, tax on assets and PTUIn accordance with Mexican tax law, the Company is subject to ISR and IMPAC. ISR is
computed taking into consideration the taxable and deductible effects of inflation, such as
depreciation calculated on restated asset values. Taxable income is increased or reduced by
the effects of inflation on certain monetary assets and liabilities through the inflationary
component, which is similar to the gain or loss from monetary position. In 2006, 2005 and
2004, the rate was 29%, 30% and 33%, respectively, and it will decrease to 28% in 2007. As a
result of amendments to tax laws effective 2007, a tax credit equivalent to 0.5% or 0.25% of
the tax result may be obtained, when involving taxpayers audited for tax purposes and subject
to certain requirements. As of 2006, the employee profit sharing (PTU) paid is fully
deductible.IMPAC is calculated by applying 1.8% on the net average of the majority of restated assets
less certain liabilities and is payable only to the extent that it exceeds ISR payable for the
same period; any required payment of IMPAC is creditable against the excess of ISR over IMPAC
of the previous three and following ten years. As of 2007, the IMPAC rate will be 1.25% of the
value of assets held in the year, without deducting any liabilities.GACN and its subsidiaries are subject to ISR and IMPAC on an individual basis and the
respective tax results are added up in the accounting consolidation.To determine deferred ISR at December 31, 2006, 2005 and 2004, the Company applied the
different tax rates that were in effect beginning in such years to temporary differences
according to their estimated dates of reversal.
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##### Table of Contents



The reconciliation of the statutory income tax rate and the effective tax rate as a
percentage of income before ISR and PTU for the years ended December 31 is as follows:
 2006
    
    
    2005
    
    
    2004%
    
    
    %
    
    
    %Statutory rate
    
    
    29.00
    
    
    
    30.00
    
    
    
    33.00Effect of permanent differences, mainly nondeductible expenses,
restatement of taxes and effects of inflation for financial and tax purposes
    
    
    (2.82
    )
    
    
    0.18
    
    
    
    3.27Change in valuation allowance for recoverable tax on assets paid and
tax loss carryforwards
    
    
    1.61
    
    
    
    (0.95
    )
    
    
    5.68Effect of reduction in statutory rate on deferred ISR
    
    
    
    
    
    
    
    
    
    
    (18.71
    )Effective rate
    
    
    27.79
    
    
    
    29.23
    
    
    
    23.24
  2006
    
    
    2005Assets:Labor obligations and other current liabilities
    
    Ps.
    29,194
    
    
    Ps.
    17,541Others
    
    
    2,530
    
    
    
    4,375Liabilities:Rights to use airport facilities and concessions
    
    
    (1,319,713
    )
    
    
    (1,353,241
    )Other liabilities
    
    
    (34,940
    )
    
    
    (42,147
    )Property, machinery, equipment and improvements
to concessioned properties
    
    
    (140,852
    )
    
    
    (38,881
    )Net deferred ISR liability
    
    
    (1,463,781
    )
    
    
    (1,412,353
    )Effect of tax loss carryforwards
    
    
    842,324
    
    
    
    858,110Recoverable tax on assets paid
    
    
    212,088
    
    
    
    195,066(409,369
    )
    
    
    (359,177
    )Valuation allowance for recoverable tax on assets
paid and tax loss carryforwards
    
    
    (105,685
    )
    
    
    (94,110
    )Net deferred ISR liability
    
    
    (515,054
    )
    
    
    (453,287
    )Deferred PTU (1)
    
    
    (106,344
    )
    
    
    (79,369
    )Net deferred ISR and PTU liability
    
    Ps.
    (621,398
    )
    
    Ps.
    (532,656
    )
 
 (1)
    
    The principal items comprising deferred PTU are improvements to concessioned properties,
machinery and equipment, right to use airport facilities and airport concessions.   Year of
    
    Tax lossorigin
    
    carryforwards1998
    
    Ps.
    23,2441999
    
    
    259,2802000
    
    
    576,0692001
    
    
    571,7322002
    
    
    571,4712003
    
    
    481,3472004
    
    
    415,7482005
    
    
    45,9682006
    
    
    63,440Ps.
    3,008,299
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##### Table of Contents



Year of
    
    Recoverableexpiration
    
    tax on asset2012
    
    Ps.
    67,5492013
    
    
    60,5422014
    
    
    52,9452015
    
    
    14,6692016
    
    
    16,383Ps.
    212,088
 13.
    
    Contingencies
  a.
    
    A claim against the Ciudad Juárez airport was filed on November 15, 1995 claiming
repossession of part of the land (240 hectares) where the International Airport of
Ciudad Juárez is located, claiming that the land was incorrectly transferred to the
Mexican government. The plaintiff claims payment of $120,000 (Ps. 1,350,600), given the
impossibility of repossessing the land because of its utilization as an airport. In May
2005, the Appeals Court ordered the Ciudad Juarez airport to return such land. An
appeal (seeking court relief on constitutional grounds) was filed by the Ciudad Juárez
airport against this verdict, which was filed to request that the Appeals Court consider
certain additional evidence and on such basis issue a new judgment. On November 8, 2006,
the Appeals Court declared the lawsuit null and void by substantiating the lack of
participation of the Mexican government in the lawsuit, holding harmless the rights of
the plaintiff to file a new lawsuit. The plaintiff then filed a new appeal against this
verdict, whose final judgment has yet to be issued. At the date of the financial
statements, the contingency remains in effect related to the plaintiffs appeal. If the
resolution is not favorable to the Company, the economic repercussions of the lawsuit
are expected to be the responsibility of the Mexican government, as established in the
concession agreement, for which reason the Company has not recognized any liability in
relation to this claim.b.
    
    Certain administrative law enforcement proceedings are in effect against some of
the Companys airports, the most important of which involves the Zihuatanejo airport, in
relation to real estate property tax. On June 27, 2006, the Municipality of Zihuatanejo
issued a ruling assessing an additional amount of Ps.4,300 in relation to the liability
for real estate property tax for the period from 1996 to 2000. In accordance with this
ruling, the Municipality seized two of the airports bank accounts and attached the
rentals paid by the lessees located on the concessioned property. The bank accounts had
no funds at the time of their seizure. The monthly amount of the rentals subject to
attachment is approximately Ps.88. As a result of this notice by the Municipality, the
Company recognized an additional liability of Ps.5,001, for a total liability of
Ps.8,102 in the Zihuatanejo airport, because the Companys attorneys consider it
probable that such amounts will have to be paid (the liability representing the original
amount of the real estate property tax for the above-mentioned period, plus the
respective fines and surcharges). However, the Company continues its appeal before the
State Tax Court and on July 14, 2006 filed a claim seeking (i) a declaration
that the fine is null and void for procedural reasons and others based on the specific
legal merits of the case, (ii) the suspension of the attachment until the appeals filed
are resolved and a final verdict is issued on the claim alleging the unconstitutionality
of the tax liability, and (iii) the refund of the amounts paid to the Municipality by
the lessees of the Zihuatanejo airport, as a result of the attachment order.c.
    
    The Company determines PTU based on Section I of Article 10 of the Mexican Income
Tax Law; however, the tax authorities and/or the employees may disagree with this
treatment, in which case the Company will file the necessary appeals in order to continue
calculating PTU using this methodology.
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##### Table of Contents



14.
    
    Commitments
 a.
    
    As discussed in Note 11, Article 232-A of the Federal Duties Law establishes the
obligation of the Company, as a concessionaire or holder of permits authorizing the use,
enjoyment and development of public domain properties assigned to render public services,
to pay taxes for such rights, equivalent to 5% of the gross revenue obtained from such
use.b.
    
    As discussed in Note 11, the Company has executed a technical assistance and
transfer-of-technology contract with SETA, which will be in effect for 15 years.
Currently, the Company is required to pay the greater of the fixed $3,000 component or 5%
of consolidated operating income (as defined in the contract) annually for such services.
Beginning in 2006, the contract requires that the fixed $3,000 component be updated
annually based on the consumer price index of the United States of America.c.
    
    In December 2005, in order to finance its acquisition from the Mexican government
of Series B shares representing 36% of the Companys capital stock, Aeroinvest entered
into a $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. To guarantee the loan, a guarantee and source of
payment trust fund was established to which the rights of the shares representing 36% of
the common stock of GACN were transferred, including the economic proceeds of GACN, the
dividends paid by SETA to Aeroinvest, payments of the loans granted to SETA, and any
reimbursement of the capital contributions made to SETA. Aeroinvest must maintain at
least its current shareholding in SETA and in the Company, ensure that SETA maintains its
current shareholding in the Company and maintain a minimum ratio of interest to earnings
before interest and taxes plus depreciation and amortization (EBITDA).On October 25, 2006, Halkin Finance Plc, an affiliate of Merrill Lynch & Co., purchased
the loan from WestLB AG.This loan with Halkin Finance Plc, includes certain restrictive covenants which bar the
Company from acquiring new bank loans, granting guarantees and establishes obligations
for the payment of taxes. For the year ended December 31, 2006, such covenants have been
satisfactorily fulfilled.d.
    
    The Company is required to invest in fixed assets and improvements in the
concessioned properties according to a five-year Master Development Program (MDP)
established in the concession agreement. For the five-year period from 2006 to 2010, the
total amount committed for investments in fixed assets and improvements in concessioned
properties under the MDP is Ps. 2,068,050 (Ps. 1,890,102 historical pesos as of September
2004). Part of these investments include the requirement to install a luggage revision
system However, as of December 31, 2006, the Company did not make any such investments,
as the provision of this service has not yet been formalized with the airlines. The
expected amount of this investment is Ps. 476,299. The required investment amounts
remaining as of December 31, 2006 are Ps.1,821,172, which is based on the assumption that
the investment in luggage revision system will be done in 2007.e.
    
    The amounts per year are as follows:
 TotalYear
    
    amount2007
    
    Ps.
    1,049,1222008
    
    
    417,3472009
    
    
    257,1852010
    
    
    97,518Ps.
    1,821,172
 15.
    
    Information by industry segments
 The Company determines and evaluates its airports individual performances before
allocating personnel-related costs and other costs incurred by Servicios Aeroportuarios del
Centro Norte, S.A. de C.V. (SACN), the subsidiary relating to the Companys senior
management. The following table shows a summary of the Companys financial information by
segment as it relates to the Monterrey Airport, the Acapulco Airport, the Mazatlán Airport,
the Culiacán Airport, the Chihuahua Airport and the Zihuatanejo Airport. The financial
information
 F-21




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##### Table of Contents



December 31, 2006
    
    Monterrey
    
    Acapulco
    
    Mazatlán
    
    Culiacán
    
    Chihuahua
    
    Zihuatanejo
    
    Others
    
    Eliminations
    
    TotalTotal revenues
    
    Ps.
    719,864
    
    
    Ps.
    139,631
    
    
    Ps.
    123,701
    
    
    Ps
    .111,057
    
    
    Ps.
    95,958
    
    
    Ps.
    90,857
    
    
    Ps.
    1,286,580
    
    
    Ps.
    (941,466
    )
    
    Ps.
    1,626,182Income from operations
    
    
    88,399
    
    
    
    19,311
    
    
    
    15,191
    
    
    
    13,638
    
    
    
    11,784
    
    
    
    11,157
    
    
    
    612,930
    
    
    
    (168,994
    )
    
    
    603,416Interest income (expense)
    
    
    99,302
    
    
    
    8,259
    
    
    
    11,438
    
    
    
    883
    
    
    
    4,056
    
    
    
    9,170
    
    
    
    (4,494
    )
    
    
    
    
    
    
    128,614Income tax expense
    
    
    31,303
    
    
    
    7,498
    
    
    
    4,261
    
    
    
    3,572
    
    
    
    3,249
    
    
    
    5,701
    
    
    
    133,798
    
    
    
    
    
    
    
    189,392Total assets
    
    
    3,649,128
    
    
    
    801,208
    
    
    
    699,260
    
    
    
    535,103
    
    
    
    500,884
    
    
    
    539,738
    
    
    
    9,723,746
    
    
    
    (7,896,607
    )
    
    
    8,552,460Total liabilities
    
    
    552,926
    
    
    
    40,407
    
    
    
    51,320
    
    
    
    55,765
    
    
    
    47,673
    
    
    
    50,077
    
    
    
    622,646
    
    
    
    (561,131
    )
    
    
    859,683Capital expenditures
    
    
    160,449
    
    
    
    27,826
    
    
    
    24,291
    
    
    
    25,480
    
    
    
    50,359
    
    
    
    21,952
    
    
    
    113,928
    
    
    
    
    
    
    
    424,285Property, machinery,
equipment and
improvements to
concessioned properties
    
    
    512,614
    
    
    
    116,719
    
    
    
    109,114
    
    
    
    171,829
    
    
    
    154,089
    
    
    
    146,844
    
    
    
    546,855
    
    
    
    
    
    
    
    1,758,064Depreciation and
amortization
    
    
    73,324
    
    
    
    36,866
    
    
    
    25,360
    
    
    
    19,548
    
    
    
    15,039
    
    
    
    18,447
    
    
    
    92,930
    
    
    
    
    
    
    
    281,514
 December 31, 2005
    
    Monterrey
    
    Acapulco
    
    Mazatlán
    
    Culiacán
    
    Chihuahua
    
    Zihuatanejo
    
    Others
    
    Eliminations
    
    TotalTotal revenues
    
    Ps.
    620,332
    
    
    Ps.
    122,102
    
    
    Ps.
    116,872
    
    
    Ps.
    98,826
    
    
    Ps.
    83,415
    
    
    Ps.
    77,331
    
    
    Ps.
    722,504
    
    
    Ps.
    (415,118
    )
    
    Ps.
    1,426,264Income from operations
    
    
    324,717
    
    
    
    11,715
    
    
    
    27,486
    
    
    
    30,949
    
    
    
    20,845
    
    
    
    14,466
    
    
    
    308,050
    
    
    
    (250,878
    )
    
    
    487,350Interest income (expense)
    
    
    95,825
    
    
    
    7,629
    
    
    
    11,458
    
    
    
    (975
    )
    
    
    4,210
    
    
    
    (1,451
    )
    
    
    (11,519
    )
    
    
    
    
    
    
    105,177Income tax expense
    
    
    62,575
    
    
    
    9,316
    
    
    
    10,651
    
    
    
    9,208
    
    
    
    6,228
    
    
    
    6,904
    
    
    
    47,422
    
    
    
    
    
    
    
    152,304Total assets
    
    
    3,705,807
    
    
    
    778,477
    
    
    
    672,858
    
    
    
    508,969
    
    
    
    487,927
    
    
    
    537,630
    
    
    
    9,322,747
    
    
    
    (7,734,101
    )
    
    
    8,280,314Total liabilities
    
    
    707,500
    
    
    
    49,654
    
    
    
    48,284
    
    
    
    38,469
    
    
    
    69,489
    
    
    
    62,428
    
    
    
    362,656
    
    
    
    (620,931
    )
    
    
    717,549Capital expenditures
    
    
    62,570
    
    
    
    13,127
    
    
    
    8,767
    
    
    
    6,965
    
    
    
    27,112
    
    
    
    28,929
    
    
    
    135,412
    
    
    
    
    
    
    
    282,882Property, machinery,
equipment and
improvements to
concessioned properties
    
    
    382,923
    
    
    
    103,199
    
    
    
    94,572
    
    
    
    157,181
    
    
    
    111,933
    
    
    
    133,948
    
    
    
    485,334
    
    
    
    
    
    
    
    1,469,090Depreciation and
amortization
    
    
    63,323
    
    
    
    29,267
    
    
    
    22,369
    
    
    
    18,130
    
    
    
    12,740
    
    
    
    16,640
    
    
    
    57,083
    
    
    
    
    
    
    
    219,552
 December 31, 2004
    
    Monterrey
    
    Acapulco
    
    Mazatlán
    
    Culiacán
    
    Chihuahua
    
    Zihuatanejo
    
    Others
    
    Eliminations
    
    TotalTotal revenues
    
    Ps.
    554,515
    
    
    Ps.
    111,682
    
    
    Ps.
    109,379
    
    
    Ps.
    84,392
    
    
    Ps.
    73,653
    
    
    Ps.
    76,731
    
    
    Ps.
    736,740
    
    
    Ps.
    (461,008
    )
    
    Ps.
    1,286,084Income (loss) from
operations
    
    
    277,614
    
    
    
    10,173
    
    
    
    24,817
    
    
    
    22,740
    
    
    
    23,290
    
    
    
    14,574
    
    
    
    337,185
    
    
    
    (312,486
    )
    
    
    397,907Interest income (expense)
    
    
    57,363
    
    
    
    3,999
    
    
    
    4,848
    
    
    
    (3,053
    )
    
    
    1,797
    
    
    
    (2,537
    )
    
    
    (12,254
    )
    
    
    
    
    
    
    50,163Income tax expense
    
    
    32,816
    
    
    
    8,830
    
    
    
    10,268
    
    
    
    7,992
    
    
    
    4,406
    
    
    
    6,309
    
    
    
    19,460
    
    
    
    
    
    
    
    90,081Total assets
    
    
    3,515,233
    
    
    
    768,093
    
    
    
    650,933
    
    
    
    511,190
    
    
    
    467,262
    
    
    
    517,346
    
    
    
    8,837,953
    
    
    
    (7,505,550
    )
    
    
    7,762,460Total liabilities
    
    
    664,586
    
    
    
    45,957
    
    
    
    49,587
    
    
    
    62,111
    
    
    
    63,221
    
    
    
    48,502
    
    
    
    276,280
    
    
    
    (643,250
    )
    
    
    566,994Capital expenditures
    
    
    79,659
    
    
    
    33,776
    
    
    
    7,749
    
    
    
    12,598
    
    
    
    24,951
    
    
    
    4,100
    
    
    
    105,997
    
    
    
    
    
    
    
    268,830Property, machinery,
equipment and
improvements to
concessioned properties
    
    
    341,191
    
    
    
    96,779
    
    
    
    92,564
    
    
    
    159,625
    
    
    
    90,724
    
    
    
    112,266
    
    
    
    391,424
    
    
    
    
    
    
    
    1,284,573Depreciation and
amortization
    
    
    58,690
    
    
    
    27,737
    
    
    
    22,067
    
    
    
    17,898
    
    
    
    10,620
    
    
    
    16,056
    
    
    
    54,959
    
    
    
    
    
    
    
    208,027
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##### Table of Contents



16.
    
    Revenue
        2006
    
    
    2005
    
    
    2004Aeronautical servicesAirport services:Landing
    
    Ps.
    110,001
    
    
    Ps.
    109,138
    
    
    Ps.
    102,136Parking on embarking/disembarking platform
    
    
    72,766
    
    
    
    73,353
    
    
    
    71,475Parking on extended stay or overnight platform
    
    
    16,397
    
    
    
    14,086
    
    
    
    13,672Aerocars and jetways
    
    
    23,919
    
    
    
    26,583
    
    
    
    22,653Passenger and carry-on baggage check,
national and international
    
    
    18,594
    
    
    
    17,042
    
    
    
    15,001Domestic passenger charges
    
    
    702,604
    
    
    
    573,212
    
    
    
    526,324International passenger charges
    
    
    264,046
    
    
    
    233,564
    
    
    
    194,338Complementary services  Airport real estate
services and rights of access to other operators
and complementary services
    
    
    112,973
    
    
    
    102,078
    
    
    
    98,849Total aeronautical services revenues
    
    
    1,321,300
    
    
    
    1,149,056
    
    
    
    1,044,448Non-aeronautical servicesCar parking charges
    
    
    87,524
    
    
    
    78,863
    
    
    
    75,680Commercial concessions (1):Retail operations
    
    
    29,489
    
    
    
    28,089
    
    
    
    24,949Food and beverages
    
    
    23,837
    
    
    
    17,817
    
    
    
    13,388Duty free
    
    
    15,380
    
    
    
    16,181
    
    
    
    15,075VIP lounges
    
    
    29,213
    
    
    
    28,396
    
    
    
    21,777Financial services
    
    
    1,475
    
    
    
    2,023
    
    
    
    1,438Communications and networks
    
    
    3,783
    
    
    
    3,465
    
    
    
    2,779Car rentals
    
    
    22,912
    
    
    
    20,125
    
    
    
    15,889Advertising
    
    
    34,688
    
    
    
    31,657
    
    
    
    23,978Time share
    
    
    16,484
    
    
    
    16,211
    
    
    
    16,719Complementary service providers
    
    
    5,783
    
    
    
    4,663
    
    
    
    3,577Expense recovery
    
    
    13,336
    
    
    
    12,290
    
    
    
    12,613OMA freight
    
    
    10,638
    
    
    
    8,322
    
    
    
    2,347Non-airport access fees
    
    
    2,997
    
    
    
    5,526
    
    
    
    6,937Miscellaneous commercial-related revenues
    
    
    7,343
    
    
    
    3,580
    
    
    
    4,490Total non-aeronautical services
    
    
    304,882
    
    
    
    277,208
    
    
    
    241,636Total revenue
    
    Ps.
    1,626,182
    
    
    Ps.
    1,426,264
    
    
    Ps.
    1,286,084
 F-23




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##### Table of Contents



(1)
    
    Non-aeronautical services revenues are earned based on the terms of Companys
operating lease agreements. Lease agreements are based on either a monthly rent (which
generally increases each year based on the INPC) or the greater of a monthly minimum
guaranteed rent or a percentage of the lessees monthly revenues. Monthly rent and
minimum guaranteed rent earned on the Companys operating lease agreements are included
under the caption Commercial concessions above.  Year
    
    Amount2007
    
    Ps.
    209,6022008
    
    
    144,8602009
    
    
    71,0132010
    
    
    42,1842011
    
    
    28,882Thereafter
    
    
    24,054Total
    
    Ps.
    520,595
   17.
    
    Cost of services
  2006
    
    
    2005
    
    
    2004Employee cost
    
    Ps.
    135,213
    
    
    Ps.
    122,728
    
    
    Ps.
    114,956Maintenance
    
    
    52,849
    
    
    
    51,891
    
    
    
    46,040Safety, security and insurance
    
    
    66,424
    
    
    
    69,084
    
    
    
    63,637Utilities
    
    
    88,943
    
    
    
    83,662
    
    
    
    78,175Others
    
    
    39,636
    
    
    
    47,578
    
    
    
    42,757Ps.
    383,065
    
    
    Ps.
    374,943
    
    
    Ps.
    345,565
 18.
    
    New accounting pronouncements
  F-24




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##### Table of Contents



F-25




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##### Table of Contents



Some of the significant changes established by these standards are as follows:NIF B-3, Statement of Income, sets the general standards for presenting and structuring the
statement of income, the minimum content requirements and general disclosure standards.
Consistent with NIF A-5, Basic Elements of Financial Statements, NIF B-3 now classifies
revenues, costs and expenses, into ordinary and non-ordinary. Ordinary items (even if not
frequent) are derived from the primary activities representing an entitys main source of
revenues. Non-ordinary items are derived from activities other than those representing an
entitys main source of revenues. Consequently, the classification of certain transactions as
special or extraordinary, according to former Bulletin B-3, was eliminated. As part of the
structure of the statement of income, ordinary items should be presented first and, at a
minimum, present income or loss before income taxes, income or loss before discontinued
operations, if any, and net income or loss. Presenting operating income is neither required
nor prohibited by NIF B-3. If presented, the line item other income (expense) is presented
immediately before operating income. Cost and expense items may be classified by function, by
nature, or a combination of both. When classified by function, gross income may be presented.
Statutory employee profit sharing should now be presented as an ordinary expense (within
other income (expense) pursuant to INIF No. 4 issued in January 2007) and no longer presented
within income tax. Special items mentioned in particular MFRS should now be part of other
income and expense and items formerly recognized as extraordinary should be part of
non-ordinary items.NIF B-13, EventsOccurring after the Date of the Financial Statements, requires that for (i)
asset and liability restructurings and (ii) creditor waivers to their right to demand payment
in case the entity defaults on contractual obligations, occurring in the period between the
date of the financial statements and the date of their issuance, only disclosure needs to be
included in a note to the financial statements while recognition of these items should take
place in the financial statements of the period in which such events take place. Previously,
these events were recognized in the financial statements in addition to their disclosure. NIF
A-7, Presentation and Disclosure, in effect as of January 1, 2006, requires, among other
things, that the date on which the issuance of the financial statements is authorized be
disclosed as well as the name of authorizing management officer(s) or body (bodies). NIF B-13
establishes that if the entity owners or others are empowered to modify the financial
statements, such fact should be disclosed. Subsequent approval of the financial statements by
the stockholders or other body does not change the subsequent period, which ends when issuance
of the financial statements is authorized.NIF C-13, Related Parties, broadens the concept related parties to include a) the overall
business in which the reporting entity participates; b) close family members of key officers;
and c) any fund created in connection with a labor-related compensation plan. NIF C-13
requires the following disclosures: a) the relationship between the controlling and subsidiary
entities, regardless of whether or not any intercompany transactions took place during the
period; b) that the terms and conditions of consideration paid or received in transactions
carried out between related parties are equivalent to those of similar transactions carried
out between independent parties and the reporting entity, only if sufficient evidence exists;
c) benefits granted to key officers; and d) name of the direct controlling company and, if
different, name of the ultimate controlling company. Notes to comparative financial
statements of prior periods should disclose the new provisions of NIF C-13.NIF D-6, Capitalization of Comprehensive Financing Result, establishes general
capitalization standards that include specific accounting for financing in domestic and
foreign currencies or a combination of both. Some of these standards include: a) mandatory
capitalization of comprehensive financing cost (RIF) directly attributable to the
acquisition of qualifying assets; b) in the instance financing in domestic currency is used
to acquire assets, yields obtained from temporary investments before the capital expenditure
is made are excluded from the amount capitalized; c) exchange gains or losses from foreign
currency financing should be capitalized considering the valuation of associated hedging
instruments, if any; d) a methodology to calculate capitalizable RIF relating to funds from
generic financing; e) regarding land, RIF may be capitalized if development is taking place;
and f) conditions that must be met to capitalize RIF, and rules indicating when RIF should no
longer be capitalized. The entity may decide on whether to apply provisions of NIF D-6 for
periods ending before January 1, 2007, in connection with assets that are in the process of
being acquired at the time this NIF goes into effect.On November 30, 2006, the Interpretations Committee of International Financial Reports issued
IFRIC 12, Agreements for Service Concessions, which is of mandatory application as of
January 1, 2008, although its early application is encouraged. This interpretation deals with
the accounting by private sector operators involved in supplying infrastructure assets and
services to the public sector, such as schools and highways. The interpretation establishes
that for those agreements which fall within this scope, the infrastructure assets are not
recognized as property, plant and equipment of the operator; rather, depending on the contract
terms, the operator will recognize: (i) a financial asset, whereby an operator constructs or
makes improvements to the infrastructure, in which the
 F-26




---



##### Table of Contents



operator has an unconditional right to receive a specific amount of cash or other financial
asset during the contract term; or (ii) an intangible asset, whereby the operator constructs
or makes improvements and is allowed to operate the infrastructure for a fixed period after
the construction is terminated, in which the future cash flows of the operator have not been
specified, because they may vary depending on the use of the asset, and are therefore
considered contingent; or (iii) both, a financial asset and an intangible asset, when the
return/gain for the operator is provided partially by a financial asset and partially by an
intangible asset. This IFRIC establishes that for both the financial asset and the intangible
asset, the revenues and costs related to the construction or the improvements are recognized
in revenues during the construction phase in accordance with International Accounting
Standards 11, Construction Contracts(or its equivalent in MFRS, NIF D-7, Construction
Contracts and Manufacture of Certain Capital Assets).The Company does not believe that the effects of adoption of IFRIC 12 will have a material
effect on its financial information.19.
    
    Differences between MFRS and U.S. GAAPThe Companys consolidated financial statements are prepared in accordance with MFRS,
which differs in certain respects from U.S. GAAP. The consolidated financial statements
prepared under MFRS include the effects of inflation as provided for under Bulletin B-10,
whereas financial statements prepared under U.S. GAAP are presented on a historical cost
basis. The reconciliations to U.S. GAAP do not include the reversal of the adjustments
required under Bulletin B-10. The application of Bulletin B-10 represents a comprehensive
measure of the effects of price level changes in the Mexican economy and, as such, is
considered a more meaningful presentation than historical cost-based financial reporting.
Bulletin B-10 also requires the restatement of all financial statements to pesos as of the
date of the most recent balance sheet presented.The principal differences, other than inflation accounting, between MFRS and U.S. GAAP and
their effects on consolidated net income and consolidated stockholders equity are presented
below with an explanation of such adjustments:
 2006
    
    
    2005
    
    
    2004Reconciliation of net income:Consolidated net income according to MFRS
    
    Ps.
    452,237
    
    
    Ps.
    367,299
    
    
    Ps.
    297,102U.S. GAAP adjustments:(i) Amortization of assets under concession
    
    
    82,628
    
    
    
    82,629
    
    
    
    82,625(ii) Amortization of airport concession
    
    
    17,128
    
    
    
    17,127
    
    
    
    17,127(iii) Depreciation of fixed assets recorded at predecessor
cost basis
    
    
    (3,052
    )
    
    
    (3,052
    )
    
    
    5,082(iv) Deferred fees for technical assistance services
    
    
    (19,016
    )
    
    
    (7,100
    )
    
    
    (23,370
    )(v) Accrued vacation
    
    
    (1,672
    )
    
    
    (2,581
    )
    
    
    (816
    )(vi) Provisions for seniority premiums and severance payments
    
    
    2,949
    
    
    
    6,665
    
    
    
    (1,525
    )(vii) Deferred statutory employee profit sharing
    
    
    26,975
    
    
    
    (2,644
    )
    
    
    (4,257
    )Total U.S. GAAP adjustments before the effect of deferred
income taxes
    
    
    105,940
    
    
    
    91,044
    
    
    
    74,866(viii) Deferred income taxes
    
    
    (29,261
    )
    
    
    (28,682
    )
    
    
    (194,531
    )Consolidated net income according to U.S. GAAP
    
    Ps.
    528,916
    
    
    Ps.
    429,661
    
    
    Ps.
    177,437
 2006
    
    
    2005Reconciliation of stockholders equity:Consolidated stockholders equity according to MFRS
    
    Ps.
    7,692,777
    
    
    Ps.
    7,562,765U.S. GAAP adjustments:(i) Cost of assets under concession
    
    
    (3,550,099
    )
    
    
    (3,550,099
    )(i) Accumulated amortization of assets under concession
    
    
    457,608
    
    
    
    374,841(ii) Amortized cost of airport concessions
    
    
    (736,512
    )
    
    
    (753,644
    )(iii) Net carrying value of fixed assets recorded at predecessor cost basis
    
    
    5,767
    
    
    
    8,902(v) Accrued vacation
    
    
    (6,009
    )
    
    
    (4,338
    )(vi) Provision for seniority premiums and severance payments
    
    
    (3,976
    )
    
    
    (24,580
    )(vii) Deferred statutory employee profit sharing
    
    
    106,344
    
    
    
    79,369
 F-27




---



##### Table of Contents



2006
    
    
    2005Total U.S. GAAP adjustments before the effect of deferred income taxes
    
    
    (3,726,877
    )
    
    
    (3,869,549
    )(viii) Deferred income taxes
    
    
    1,075,043
    
    
    
    1,106,101Consolidated stockholders equity according to U.S. GAAP
    
    Ps.
    5,040,943
    
    
    Ps.
    4,799,317
 A summary of the changes in consolidated stockholders equity after giving effect to the
aforementioned U.S. GAAP adjustments is as follows:
 AccumulatedAdditional
    
    
    
    
    
    
    other
    
    
    TotalCommon
    
    
    paid-in
    
    
    Retained
    
    
    comprehensive
    
    
    stockholdersstock
    
    
    capital
    
    
    earnings
    
    
    income
    
    
    equityBalances at January 1, 2005
    
    Ps.
    1,646,148
    
    
    Ps.
    32,565
    
    
    Ps.
    2,683,843
    
    
    
    
    
    
    Ps.
    4,362,556Deferred fees for technical
assistance services
    
    
    
    
    
    
    7,100
    
    
    
    
    
    
    
    
    
    
    
    7,100Net income
    
    
    
    
    
    
    
    
    
    
    429,661
    
    
    
    
    
    
    
    429,661Balances at December 31, 2005
    
    
    1,646,148
    
    
    
    39,665
    
    
    
    3,113,504
    
    
    
    
    
    
    
    4,799,317Increase in stockholders equity
    
    
    145,357
    
    
    
    (25,633
    )
    
    
    
    
    
    
    
    
    
    
    119,724Dividends paid
    
    
    
    
    
    
    
    
    
    
    (430,506
    )
    
    
    
    
    
    
    (430,506
    )Deferred fees for technical
assistance services
    
    
    
    
    
    
    19,016
    
    
    
    
    
    
    
    
    
    
    
    19,016Comprehensive income:
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Net income
    
    
    
    
    
    
    
    
    
    
    528,916
    
    
    
    
    
    
    
    528,916Other comprehensive loss -
Additional liability for labor
obligations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,405
    )
    
    
    (5,405
    )Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    528,916
    
    
    
    (5,405
    )
    
    
    523,511Adjustment to initially apply
FASB Statement No. 158, net of
tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    Ps.
    9,881
    
    
    
    9,881Balances at December 31, 2006
    
    Ps.
    1,791,506
    
    
    Ps.
    33,047
    
    
    Ps.
    3,211,914
    
    
    Ps.
    4,476
    
    
    Ps.
    5,040,943
 Condensed consolidated balances sheets and statements of income including the aforementioned
U.S. GAAP adjustments, as of and for the years ended December 31, 2006 and 2005 are as
follows:
 2006
    
    
    2005AssetsCurrent assets:Cash and cash equivalents
    
    Ps.
    1,612,384
    
    
    Ps.
    1,644,776Other current assets
    
    
    453,239
    
    
    
    291,690Total current assets
    
    
    2,065,623
    
    
    
    1,936,466Property, machinery, equipment and improvements to concessioned
properties  net
    
    
    1,763,830
    
    
    
    1,477,986Assets under concession
    
    
    884,257
    
    
    
    922,763Deferred income taxes
    
    
    572,878
    
    
    
    676,950Other assets
    
    
    9,419
    
    
    
    17,217Total
    
    Ps.
    5,296,007
    
    
    Ps.
    5,031,382Liabilities and stockholders equity:Current liabilities
    
    Ps.
    196,458
    
    
    Ps.
    178,171Long-term liabilities
    
    
    58,606
    
    
    
    53,894Total liabilities
    
    
    255,064
    
    
    
    232,065Common stock
    
    
    1,791,506
    
    
    
    1,646,148
 F-28




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##### Table of Contents



2006
    
    
    2005Additional paid-in capital
    
    
    33,047
    
    
    
    39,665Accumulated other comprehensive income
    
    
    4,476Retained earnings
    
    
    3,211,914
    
    
    
    3,113,504Total stockholders equity
    
    
    5,040,943
    
    
    
    4,799,317Total liabilities and stockholders equity
    
    Ps.
    5,296,007
    
    
    Ps.
    5,031,382
 2006
    
    
    2005
    
    
    2004Net revenues
    
    Ps.
    1,626,182
    
    
    Ps.
    1,426,264
    
    
    Ps.
    1,286,084Cost of operations:Cost of services
    
    
    383,279
    
    
    
    370,822
    
    
    
    346,866General and administrative expenses
    
    
    228,507
    
    
    
    236,945
    
    
    
    235,849Concession taxes
    
    
    81,569
    
    
    
    70,011
    
    
    
    62,531Technical assistance fees
    
    
    66,762
    
    
    
    45,666
    
    
    
    62,128Depreciation and amortization
    
    
    184,810
    
    
    
    122,848
    
    
    
    109,581Statutory employee profit sharing
    
    
    8,659
    
    
    
    1,469
    
    
    
    377Total cost
    
    
    953,586
    
    
    
    847,761
    
    
    
    817,332Income from operations
    
    
    672,596
    
    
    
    578,503
    
    
    
    468,752Net comprehensive financing income (expense)
    
    
    69,301
    
    
    
    30,373
    
    
    
    (19,510
    )Other income  net
    
    
    10,413
    
    
    
    5,182
    
    
    
    10,833Income tax expense
    
    
    223,394
    
    
    
    184,397
    
    
    
    282,638Consolidated net income
    
    Ps.
    528,916
    
    
    Ps.
    429,661
    
    
    Ps.
    177,437Weighted average number of common shares outstanding
    
    
    391,624,384
    
    
    
    389,060,000
    
    
    
    389,060,000Weighted average number of common shares and common
share equivalents
    
    
    394,564,384
    
    
    
    392,022,615
    
    
    
    392,000,000Basic earnings per share (in Mexican pesos)
    
    Ps.
    1.3506
    
    
    Ps.
    1.1044
    
    
    Ps.
    0.4561Diluted earnings per share (in Mexican pesos)
    
    Ps.
    1.3405
    
    
    Ps.
    1.0960
    
    
    Ps.
    0.4526
 (i) Amortization of assets under concession (treated as intangible rights to use airport
facilities under MFRS)
   F-29




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##### Table of Contents



(ii) Airport concessions
  (iii) Depreciation of fixed assets recorded at predecessor cost basis
   (iv) Deferred fees for technical assistance services
   F-30




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##### Table of Contents



2006
    
    
    
    
    
    
    
    
    
    
    2005Weighted Average
    
    
    
    
    
    
    Weighted AverageShares
    
    
    Exercise Price
    
    
    Shares
    
    
    Exercise PriceOutstanding at January 1
    
    
    8,000,000
    
    
    Ps.
    1.4852
    
    
    Ps.
    15.7936
    
    
    
    12,123,711
    
    
    Ps.
    1.4135
    
    
    Ps.
    15.7605Exercised
    
    
    (8,000,000
    )
    
    
    1.3527
    
    
    
    14,6735
    
    
    
    
    
    
    
    
    
    
    
    Expired
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,123,711
    )
    
    
    1.4486
    
    
    
    15.6087Outstanding at December
31
    
    
    
    
    
    Ps.
    
    
    
    Ps.
    
    
    
    
    8,000,000
    
    
    Ps.
    1.4852
    
    
    Ps.
    15.7936
   F-31




---



##### Table of Contents



(v) Accrued vacation
   (vi) Provisions for seniority premiums and for severance payments
     F-32




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##### Table of Contents



Before AMLadjustmentsand
    
    
    
    
    
    
    Before
    
    
    
    
    
    
    Afterapplications of
    
    
    AML
    
    
    application of
    
    
    SFAS No. 158
    
    
    Application ofSFAS No. 158
    
    
    adjustments
    
    
    SFAS No. 158
    
    
    Adjustments
    
    
    SFAS No. 158Assets:Deferred income tax
asset -long-term
    
    Ps.
    957,431
    
    
    Ps.
    2,102
    
    
    Ps.
    959,533
    
    
    Ps.
    2,122
    
    
    Ps.
    961,655Total assets
    
    Ps.
    5,291,783
    
    
    Ps.
    2,102
    
    
    Ps.
    5,293,885
    
    
    Ps.
    2,122
    
    
    Ps.
    5,296,007Liabilities:Labor liabilities
    
    Ps.
    46,170
    
    
    Ps.
    7,507
    
    
    Ps.
    53,677
    
    
    Ps.
    (13,724
    )
    
    Ps.
    39,953Deferred income tax
liability  long-term
    
    
    382,812
    
    
    
    
    
    
    
    382,812
    
    
    
    5,965
    
    
    
    388,777Total liabilities
    
    
    255,316
    
    
    
    7,507
    
    
    
    262,823
    
    
    
    (7,759
    )
    
    
    255,064Other comprehensive loss
    
    
    
    
    
    
    5,404
    
    
    
    5,404
    
    
    
    
    
    
    
    5,405Accumulated other
comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (9,881
    )
    
    
    9,881Stockholders equity
    
    
    5,045,420
    
    
    
    5,404
    
    
    
    5,050,824
    
    
    
    (9,881
    )
    
    
    5,040,943Total liabilities and
stockholders equity
    
    Ps.
    5,291,783
    
    
    
    2,102
    
    
    
    5,293,885
    
    
    
    2,122
    
    
    Ps.
    5,296,007
 Further disclosures related to the Companys seniority premiums and severance payment benefits
required by U.S. GAAP are as follows:
 The Company uses a December 31 measurement date for its seniority premiums plan and severance
obligations.
 Seniority Premium
    
    
    SeveranceBenefits
    
    
    Benefits2006
    
    
    2005
    
    
    2006
    
    
    2005At December 31:Accumulated benefit obligation
    
    Ps.
    (2,663
    )
    
    Ps.
    (12,254
    )
    
    Ps.
    (28,244
    )
    
    Ps.
    (23,632
    )Projected benefit obligation
    
    Ps.
    (3,395
    )
    
    Ps.
    (18,670
    )
    
    Ps.
    (36,558
    )
    
    Ps.
    (29,371
    )Unrecognized items
    
    
    
    
    
    
    (1,750
    )
    
    
    
    
    
    
    7,857Accrued benefit cost
recognized in the statement
of financial position
    
    Ps.
    (3,395
    )
    
    Ps.
    (20,420
    )
    
    Ps.
    (36,558
    )
    
    Ps.
    (21,514
    )
 F-33




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##### Table of Contents



Seniority Premium
    
    
    SeveranceBenefits
    
    
    Benefits2006
    
    
    2005
    
    
    2006
    
    
    2005Change in benefit obligation:Benefit obligation at beginning of year
    
    Ps.
    (20,420
    )
    
    Ps.
    (15,803
    )
    
    Ps.
    (21,514
    )
    
    Ps.
    (20,487
    )Service cost
    
    
    (3,811
    )
    
    
    (3,871
    )
    
    
    (3,031
    )
    
    
    (2,747
    )Interest cost
    
    
    (1,489
    )
    
    
    (1,304
    )
    
    
    (2,256
    )
    
    
    (1,965
    )Actuarial loss
    
    
    2,369
    
    
    
    
    
    
    
    (15,030
    )
    
    
    Acquisition
    
    
    
    
    
    
    (2
    )
    
    
    
    
    
    
    (378
    )Benefits paid
    
    
    180
    
    
    
    560
    
    
    
    5,273
    
    
    
    4,063Prior service costs
    
    
    19,776
    
    
    
    
    
    
    
    
    
    
    
    Benefit obligation at end of year
    
    Ps.
    (3,395
    )
    
    Ps.
    (20,420
    )
    
    Ps.
    (36,558
    )
    
    Ps.
    (21,514
    )
 Seniority Premium
    
    
    SeveranceBenefits
    
    
    Benefits2006
    
    
    2005
    
    
    2006
    
    
    2005Components of net periodic benefit cost:Service cost
    
    Ps.
    3,811
    
    
    Ps.
    3,871
    
    
    Ps.
    3,031
    
    
    Ps.
    2,747Interest cost
    
    
    1,489
    
    
    
    1,304
    
    
    
    2,256
    
    
    
    1,965Amortization of net loss
    
    
    
    
    
    
    2
    
    
    
    
    
    
    
    378Net periodic benefit cost
    
    Ps.
    5,300
    
    
    Ps.
    5,177
    
    
    Ps.
    5,287
    
    
    Ps.
    5,090
 Seniority Premium
    
    SeveranceBenefits
    
    Benefits2006
    
    2005
    
    2006
    
    2005Weighted-average assumptions used
to determine benefit obligations
at December 31:Discount rate
    
    
    8.68
    %
    
    
    8.68
    %
    
    
    8.68
    %
    
    
    8.68
    %Rate of compensation increase
    
    
    5.04
    %
    
    
    5.04
    %
    
    
    5.04
    %
    
    
    5.04
    %Weighted-average assumptions used
to determine net periodic
benefit cost for the years ended
December 31:Discount rate
    
    
    8.68
    %
    
    
    8.68
    %
    
    
    8.68
    %
    
    
    8.68
    %Rate of compensation increase
    
    
    5.04
    %
    
    
    5.04
    %
    
    
    5.04
    %
    
    
    5.04
    %
 The following benefit payments, which reflect expected future service, as appropriate, are
expected to be paid:
 SeniorityPremium
    
    
    SeveranceBenefits
    
    
    Benefits2007
    
    Ps.
    409
    
    
    Ps.
    5,3032008
    
    
    438
    
    
    
    5,5422009
    
    
    455
    
    
    
    5,5852010
    
    
    500
    
    
    
    5,5912011
    
    
    536
    
    
    
    5,578Thereafter
    
    
    3,237
    
    
    
    28,043Ps.
    5,575
    
    
    Ps.
    55,642
 (vii) Deferred statutory employee profit sharing
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##### Table of Contents



(viii) Deferred income taxes
     Reconciliation of deferred income taxes:
 2006
    
    
    2005Deferred income tax liability under MFRS
    
    Ps.
    (515,054
    )
    
    Ps.
    (453,287
    )Effect of cost of airport concession and rights to use airport facilities
    
    
    1,072,121
    
    
    
    1,100,098Effect of labor obligations
    
    
    2,854
    
    
    
    7,373Effect of cost of fixed assets acquired from Mexican government
    
    
    (1,614
    )
    
    
    (2,670
    )Other
    
    
    1,682
    
    
    
    1,300Total U.S. GAAP adjustments to net deferred income tax liability
    
    
    1,075,043
    
    
    
    1,106,101Net deferred income tax asset under U.S. GAAP
    
    Ps.
    559,989
    
    
    Ps.
    652,813
 Composition of net deferred income tax asset:
 2006
    
    
    2005Current assets (liabilities):Assets:Provisions
    
    Ps.
    16,094
    
    
    Ps.
    6,170Advances from customers
    
    
    3,062
    
    
    
    5,705
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##### Table of Contents



2006
    
    
    2005Other liabilities
    
    
    4,176
    
    
    
    8,660Total current assets
    
    
    23,332
    
    
    
    20,535Liabilities -Other liabilities
    
    
    (36,221
    )
    
    
    (44,672
    )Net current deferred income tax liability
    
    Ps.
    (12,889
    )
    
    Ps.
    (24,137
    )Non-current assets (liabilities):Assets:Provisions for seniority premiums and severance payments
    
    Ps.
    12,928
    
    
    Ps.
    12,580Tax loss carryforwards
    
    
    842,324
    
    
    
    858,114Recoverable tax on assets
    
    
    212,088
    
    
    
    195,067Valuation allowance for recoverable asset tax paid
    
    
    (105,685
    )
    
    
    (94,111
    )Total non-current assets
    
    
    961,655
    
    
    
    971,650Liabilities:Airport concessions and assets under concession
    
    
    (247,592
    )
    
    
    (253,146
    )Property, machinery, equipment and improvements to concessioned
properties
    
    
    (141,185
    )
    
    
    (41,554
    )Total non-current liabilities
    
    
    (388,777
    )
    
    
    (294,700
    )Net non-current deferred income tax asset
    
    Ps.
    572,878
    
    
    Ps.
    676,950
  2006
    
    
    2005
    
    
    2004%
    
    
    %
    
    
    %Statutory rate
    
    
    29.00
    
    
    
    30.00
    
    
    
    33.00Effect of permanent differences, mainly nondeductible expenses
    
    
    (1.84
    )
    
    
    0.83
    
    
    
    (1.80
    )Effect of change in statutory rate on deferred income taxes
    
    
    
    
    
    
    
    
    
    
    25.44Change in valuation allowance for recoverable tax on asset
and tax loss carryforwards
    
    
    1.54
    
    
    
    (0.80
    )
    
    
    4.79Effective rate
    
    
    29.69
    
    
    
    30.03
    
    
    
    61.43
 (a) Earnings per share according to U.S. GAAP
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##### Table of Contents



2006
    
    
    2005
    
    
    2004NumeratorNet income under U.S. GAAP
    
    Ps.
    528,916
    
    
    Ps.
    429,661
    
    
    Ps.
    177,437Denominator (share amounts)Weighted average number of common shares outstanding
    
    
    391,624,384
    
    
    
    389,060,000
    
    
    
    389,060,000Dilutive effects of stock option
    
    
    
    
    
    
    22,615
    
    
    
    Dilutive effects of forfeitable shares
    
    
    2,940,000
    
    
    
    2,940,000
    
    
    
    2,940,000Total potential dilutive shares
    
    
    394,564,384
    
    
    
    392,022,615
    
    
    
    392,000,000Basic earnings per share
    
    Ps.
    1.3506
    
    
    Ps.
    1.1044
    
    
    Ps.
    0.4561Diluted earnings per share
    
    Ps.
    1.3405
    
    
    Ps.
    1.0960
    
    
    Ps.
    0.4526
 (b) Statement of cash flows
  2006
    
    
    2005
    
    
    2004Operating activities:Consolidated net income
    
    Ps.
    528,916
    
    
    Ps.
    429,661
    
    
    Ps.
    177,437Adjustments to reconcile net income to cash provided by
operating activities:Unrealized exchange loss
    
    
    
    
    
    
    25
    
    
    
    128Depreciation and amortization
    
    
    184,810
    
    
    
    122,848
    
    
    
    109,581Deferred fees for technical assistance services
    
    
    19,016
    
    
    
    7,100
    
    
    
    23,370Allowance for doubtful accounts
    
    
    (12,359
    )
    
    
    (10,858
    )
    
    
    3,555Provisions for seniority premium and severance payments
    
    
    (345
    )
    
    
    5,640
    
    
    
    3,861Deferred income tax expense
    
    
    67,394
    
    
    
    117,335
    
    
    
    178,678Changes in operating assets and liabilities:Accounts receivable
    
    
    (18,726
    )
    
    
    (15,431
    )
    
    
    11,465Recoverable taxes
    
    
    (78,798
    )
    
    
    16,089
    
    
    
    56,015Other current assets
    
    
    (63,027
    )
    
    
    (8,743
    )
    
    
    (3,575
    )Accounts payable and other accruals
    
    
    35,240
    
    
    
    (18,853
    )
    
    
    12,747Accounts payable to related parties
    
    
    9,143
    
    
    
    5,857
    
    
    
    1,971Advances from customers
    
    
    (6,340
    )
    
    
    14,122
    
    
    
    3,983Value-added tax payable
    
    
    (10,298
    )
    
    
    348
    
    
    
    3,448Statutory employee profit sharing
    
    
    7,177
    
    
    
    1,116
    
    
    
    (113
    )Guarantee deposits
    
    
    7,153
    
    
    
    1,386
    
    
    
    1,708Cash provided by operating activities
    
    
    668,956
    
    
    
    667,642
    
    
    
    584,259Investing activities:Acquisitions of property, machinery, equipment and
improvements to concessioned properties
    
    
    (441,660
    )
    
    
    (257,596
    )
    
    
    (268,718
    )Other assets
    
    
    
    
    
    
    (18,123
    )Cash used in investing activities
    
    
    (441,660
    )
    
    
    (275,719
    )
    
    
    (268,718
    )
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##### Table of Contents



2006
    
    
    2005
    
    
    2004Financing activities:Dividends paid
    
    
    (430,506
    )
    
    
    
    
    
    
    Increase in capital
    
    
    119,724
    
    
    
    
    
    
    
    Net cash used in financing activities
    
    
    (310,782
    )
    
    
    
    
    
    
    Effect of inflation on cash and cash equivalents
    
    
    51,094
    
    
    
    1,189
    
    
    
    4,477Net increase in cash and cash equivalents
    
    
    32,392
    
    
    
    393,112
    
    
    
    320,018Cash and cash equivalents at beginning of the year
    
    
    1,644,776
    
    
    
    1,251,664
    
    
    
    931,646Cash and cash equivalents at end of the year
    
    Ps.
    1,612,384
    
    
    Ps.
    1,644,776
    
    
    Ps.
    1,251,664Cash paid for:Income taxes
    
    Ps.
    208,514
    
    
    Ps.
    46,133
    
    
    Ps.
    53,072Supplemental schedule of noncash activities:Acquisitions of
property,
machinery,
equipment and
improvements to
concessioned
properties on
account
    
    Ps.
    18,421
    
    
    Ps.
    7,403
    
    
    Ps.
    6,880
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##### Table of Contents



(c) Valuation and qualifying accounts
 Additions(reductions)Balance at
    
    
    charged to
    
    
    
    
    
    
    
    
    
    
    Balance atbeginning of
    
    
    costs and
    
    
    Inflation
    
    
    
    
    
    
    the end of theDescription
    
    the year
    
    
    expenses (1)
    
    
    effects
    
    
    Deductions (2)
    
    
    yearAllowance for doubtful accounts2006
    
    Ps.
    22,128
    
    
    Ps.
    (9,486
    )
    
    Ps.
    (862
    )
    
    Ps.
    (2,873
    )
    
    Ps.
    8,9072005
    
    
    34,086
    
    
    
    (676
    )
    
    
    (1,171
    )
    
    
    (10,111
    )
    
    
    22,1282004
    
    
    32,115
    
    
    
    4,090
    
    
    
    (1,446
    )
    
    
    (673
    )
    
    
    34,086
 
 (1)
    
    Represents increases and decreases in the allowance for doubtful accounts that
were credited or debited to costs and expenses due to changes in estimates of the
reserve.(2)
    
    Represents decreases in the allowance for doubtful accounts for the ultimate
write-off of the related receivable which was ultimately deemed uncollectible. New Accounting Standards in the United States of America
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##### Table of Contents



20.
    
    Subsequent events
 a.
    
    In May 2007, the Reynosa airport received notice of a lawsuit for damages and losses
filed by Aero DaVinci Internacional, S.A. de C.V. (Aero DaVinci), a sublessee at the
airport, in the amount of $3.9 million, in connection with the termination of the lease
between the Company and Aeroservicios of Reynosa, S.A. de C.V. (Aeroservicios), the
principal lessee, as a result of nonpayment of rent by Aeroservicios. Upon termination
of Aeroservicios lease (and effectively Aero DaVincis sublease), Aero DaVinci initiated
legal proceedings against the Reynosa airport for damages and losses, including lost
profits, in connection with its airplane taxi, cargo and charter service.On February 22, 2005, the Tampico airport filed a claim against Aero DaVinci to recover
unpaid rentals under the lease between the airport and Aero DaVinci. This claim was
subsequently dismissed. However, on May 2, 2007, the Tampico airport received notice of a
lawsuit for reimbursement of the legal fees Aero DaVinci incurred in relation to this
claim. The claim was in the amount of Ps. 2,962 million.The Company filed documents contesting the claims received in May 2007 at both the Reynosa
and Tampico airports. The Company believes that Aero DaVincis claims are without merit
and as such, does not believe that any of the amounts claimed in the proceedings against
either the Reynosa or Tampico airport are likely to have, individually or in the aggregate,
a material adverse effect on its consolidated financial position or results of operations.b.
    
    As discussed in Note 13 b., several of the Companys airports have received
property tax claims from their respective municipalities. On May 14, 2007, the
municipality of Reynosa gave notice of an updated to the amount of property taxes and
filed claimed of Ps. 59.2 million (in addition to the Ps. 0.3 claimed in 2004). As well
on such date, the municipality of Mazatlán gave notice of a claim for payment of property
taxes from 2002 to 2007 in the amount of Ps. 2.5 million. The Company has filed claims
at both municipalities contesting any obligation to pay any property tax including the
newly updated amount claimed in the case of Reynosa and the specific amount claimed in
the case of Mazatlán, and is seeking to annul the assessment of the taxes and fines on
constitutional grounds. The Company, however, anticipates that the respective
municipalities may issue additional decrees assessing property taxes claimed in respect
of subsequent periods.
  F-40