ABC Aerolíneas, SA de CV, and Subsidiaries Consolidated

Transcription

ABC Aerolíneas, S. A. de C. V.,
and Subsidiaries
Consolidated Financial Statements for
the Years Ended December 31, 2014
and 2013, and Independent Auditors’
Report Dated April 30, 2015
ABC Aerolíneas, S. A. de C. V. and Subsidiaries
Independent Auditors’ Report and Consolidated
Financial Statements for 2014 and 2013
Table of contents
Page
Independent Auditors’ Report
1
Consolidated Statements of Financial Position
3
Consolidated Statements of Loss or Profit
4
Consolidated Statements of Comprehensive (Loss) Income
5
Consolidated Statements of Changes in Stockholders’ Equity
6
Consolidated Statements of Cash Flows
7
Notes to Consolidated Financial Statements
8
Galaz, Yamazaki,
Ruiz Urquiza, S.C.
Paseo de la Reforma 489
piso 6
Colonia Cuauhtémoc
06500 México, D. F.
México
Independent Auditors’ Report to the
Board of Directors and Stockholders of
ABC Aerolíneas, S. A. de C. V.
Tel: +52 (55) 5080 6000
Fax:+52 (55) 5080 6001
www.deloitte.com/mx
We have audited the accompanying consolidated financial statements of ABC Aerolíneas, S. A. de C. V. and
subsidiaries (the “Entity”) which comprise the consolidated statements of financial position as of December 31,
2014 and 2013, and the consolidated statements of loss or profit, comprehensive (loss) income, changes in
stockholders’ equity and cash flows for the years then ended, and a summary of the significant accounting policies
and other explanatory information.
Management's Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated financial statements in
accordance with accounting International Financial Reporting Standards, as issued by the International Accounting
Standards Board, and for such internal control as management determines is necessary to enable the preparation of
consolidated financial statements that are free from material misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We
conducted our audits in accordance with International Standards on Auditing. Those standards require that we
comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the
consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain evidence about the amounts and disclosures in the consolidated
financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the
risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making
those risk assessments, the auditor considers internal control relevant to the Entity’s preparation and fair
presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Entity’s internal control.
An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of
accounting estimates made by management, as well as evaluating the overall presentation of the consolidated
financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinion.
Deloitte se refiere a Deloitte Touche Tohmatsu Limited, sociedad privada de responsabilidad limitada en el Reino Unido, y a su red
de firmas miembro, cada una de ellas como una entidad legal única e independiente. Conozca en www.deloitte.com/mx/conozcanos
la descripción detallada de la estructura legal de Deloitte Touche Tohmatsu Limited y sus firmas miembro.
Opinion
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of
ABC Aerolíneas, S.A. de C.V. and subsidiaries as of December 31, 2014 and 2013, and their financial performance
and their cash flows for the years then ended in accordance with International Financial Reporting Standards as
issued by the International Accounting Standards Board.
Galaz, Yamazaki, Ruiz Urquiza, S. C.
Member of Deloitte Touche Tohmatsu Limited
C. P. C. Miguel Ángel del Barrio Burgos
April 30, 2015
2
ABC Aerolíneas, S. A. d e C. V. and Subsidiaries
Consolidated Statements of Financial Position
As of December 31, 2014 and 2013
(In thousands of Mexican pesos)
Assets
Current assets:
Cash and cash equivalents
Accounts receivable
Due from related parties
Recoverable taxes, mainly business flat tax and valueadded tax
Inventories
Prepaid expenses
Total current assets
Note
6
7
18
2014
$
8
Prepaid expenses
8
Flight equipment, leasehold improvements, furniture and
equipment - Net
9
Prepaid maintenance
2,360,283
462,915
-
2013
$
2,622,495
413,436
11,207
99,820
408,673
365,778
3,697,469
226,986
190,812
406,983
3,871,919
1,200,016
1,192,760
Liabilities and stockholders’ equity
Current liabilities:
Notes payable to financial institutions
Provision of maintenance and return conditions
Accounts payable
Other accounts payable and accrued expenses
Payable taxes other than income taxes
Air traffic liability
Total current liabilities
Note
12
15
Long-term debt
12
Deferred income taxes
19
2014
$
2013
6,911,742
510,609
1,007,623
619,768
177,562
779,976
10,007,280
$
6,594,072
5,204,175
332,160
599,285
345,341
92,711
526,245
7,099,917
5,253,503
-
116,177
12,474,178
8,688,307
Employee benefits and other deferred liabilities
14
5,956
4,300
3,328,996
2,355,717
Provision of maintenance and retirement conditions
Total liabilities
15
4g
1,709,429
18,316,737
1,112,013
13,585,910
Deferred taxes
19
19,293
16
Other assets
10
151,777
141,380
900,000
5
101,012
2,127,472
3,128,489
900,000
5
12,105
2,235,320
3,147,430
Concession
4i
43,797
43,797
20,021
22,279
3,148,510
3,169,709
-
Stockholders’ equity:
Capital stock
Contributions for future capital increases
Cumulative translation adjustments of foreign operations
Retained earnings
Controlling interest
Non-controlling interest
Deposits on aircraft leases
Total
11
549,721
$
21,465,247
Total stockholders’ equity
461,739
$
16,755,619
Total
$
21,465,247
$
16,755,619
See accompanying notes to consolidated financial statements.
3
Consolidated Statements of Loss or Profit
For the years ended December 31, 2014 and 2013
Note
Operating revenues:
Passengers
Ancillary revenues
Cargo
Other
Operating expenses:
Aircraft fuel
Maintenance and return conditions
Airport operating and landing fees
Wages, salaries and benefits
Insurance and passenger service
Selling
Administrative and other
Flight equipment rentals
Depreciation and amortization
2014
$
12,015,220
366,057
230,187
332,397
12,943,861
2013
$
10,943,221
453,133
27,420
155,885
11,579,659
4,364,555
1,549,524
1,634,044
888,609
127,810
1,113,877
978,991
1,512,286
630,683
12,800,379
4,063,198
1,155,311
1,369,788
762,368
126,276
920,753
770,560
1,276,261
445,279
10,889,794
143,482
689,865
Interest income
Interest expense
Exchange gain (loss) - Net
28,209
(452,570)
51,258
(373,103)
40,082
(317,221)
(27,434)
(304,573)
(Loss) profit before income taxes
(229,621)
385,292
(119,515)
64,797
Net (loss) profit
(110,106)
320,495
(Loss) profit for the year attributable to:
Owners of the Entity
Non-controlling interests
(107,848)
(2,258)
310,965
9,530
20
Gross profit
Income taxes (benefit) expense
Consolidated net (loss) profit
19
$
(110,106)
$
320,495
4
Consolidated Statements of Comprehensive (Loss)
Income
2014
Consolidated net (loss) profit
$
Other comprehensive (loss) income:
Cumulative translation adjustments of foreign operations
(110,106)
2013
$
88,907
320,495
589
Consolidated comprehensive (loss) income of the year
$
(21,199)
$
321,084
(Loss) profit for the year attributable to:
Owners of the Entity
Non-controlling interests
$
(18,941)
(2,258)
$
310,965
9,530
Consolidated net comprehensive (loss) income of the year
$
(21,199)
$
320,495
5
Consolidated Statements of Changes in Stockholders’ Equity
Contributions
for future
capital increases
Capital
stock
Balance as of January 1, 2013
$
Comprehensive income:
Cumulative translation
adjustments of foreign
operations
Net income for the year
Comprehensive income
$
-
Balance as of December 31, 2013
5
900,000
$
589
$
11,516
Retained
earnings
589
12,105
2,235,320
88,907
88,907
5
$
1,924,355
310,965
310,965
-
5
$
$
-
900,000
Comprehensive loss
Cumulative translation
adjustments of foreign
operations
Net loss for the year
Comprehensive income
Balance as of December 31, 2014
900,000
Cumulative
translation
adjustments of
foreign operations
101,012
Non-controlling
interest
$
2,127,472
$
-
(107,848)
(107,848)
$
12,749
Total
9,530
9,530
589
320,495
321,084
22,279
3,169,709
(2,258)
(2,258)
$
2,848,625
20,021
88,907
(110,106)
(21,199)
$
3,148,510
6
Consolidated Statements of Cash Flows
2013
2014
Operating activities:
Net (Loss) profit
Items related to investing activities
Income tax (benefit) expense
Provision for maintenance and retirement conditions
Interest expense
Unrealized foreign exchange
$
(Increase) decrease in:
Accounts receivable
Recoverable taxes, mainly business flat tax and value-added tax
Inventories
Prepaid expenses
Increase (decrease) in:
Accounts payable
Income taxes paid
Employee benefits
Net cash provided by operating activities
(110,106)
$
320,495
(119,515)
630,683
775,865
452,570
(395,080)
1,234,417
64,797
445,279
324,541
317,221
(14,723)
1,457,610
(49,479)
11,207
127,166
(199,989)
41,205
(87,982)
(123,049)
(1,936)
(71,209)
15,209
5,630
408,338
274,427
84,851
253,731
1,656
2,099,548
157,005
134,828
34,035
14,037
1,628
1,623,788
Investing activities:
Flight equipment, leasehold improvements, and furniture and
equipment
Advance payment to purchase aircraft
Other assets
Prepaid maintenance
Net cash used in investing activities
(4,416,554)
(7,256)
(10,397)
(596,071)
(5,030,278)
(996,488)
(195,951)
(688,159)
(1,880,598)
Financing activities:
Loans received
Paid of loans
Interest paid
Net cash provided by financing activities
4,397,611
(1,349,474)
(443,421)
2,604,716
4,070,828
(2,384,352)
(308,072)
1,378,404
Effects from exchange rates
63,802
Net (decrease) increase in cash and cash equivalents
(262,212)
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
16,946
1,138,540
2,622,495
$
2,360,283
1,483,955
$
2,622,495
7
Notes to the Consolidated Financial Statements
1.
Nature of business
ABC Aerolíneas, S. A. de C. V. and Subsidiaries (the “Entity” or “Interjet”) are mainly engaged in providing
domestic and international public air transportation services for passengers, luggage, correspondence, cargo,
parcels and mail, as well as operating flight equipment. The Entity also develops and operates centers for
aircraft maintenance and air and land personnel training. Through its associate, it is also engaged in providing
ground transportation services from various locations to the airports at which it operates. At December 31,
2014, the Entity provided services with a fleet of 51 aircraft of which seven are owned by the Entity, 20 are
under financing leases and 24 are under operating lease schemes.
The Entity provides air transportation services to the general public and cargo transportation mainly in
Mexico under a concession granted by the Mexican Government through the Secretaria de Comunicaciones y
Transportes (the Secretary of Communications and Transportation or “SCT”), which was granted on August
8, 2005 and had an original term of five years. The Entity requested an extension of the concession term
subject to certain requirements of Law and Regulation of Civil Aviation. On February 12, 2010, the SCT
extended the concession granted to the Entity for an additional 30 years, which took effect in August 2010.
The main offices of the Entity are located in Ignacio Longares 102 lote 2, Manzana 2, Parque industrial
Exportec 1, Colonia San Pedro Totoltepec Toluca from Mexico City.
2.
Significant events and seasonality
Seasonality
The business is subject to seasonal fluctuations. Usually, air travel demand is highest during the summer
months and during the winter holiday season, particularly in international markets, because there are more
vacation trips during these periods. Busiest months in the year are July, August, March or April (depending
on the date of Easter each year) and December, while the lower occupancy months are February, May and
September. The results of our operations generally reflect this seasonality, but can also be affected by factors
that are not necessarily seasonal, such as economic conditions, weather, delays in air traffic control and other
factors.
Acquisition of Airbus A320 NEO aircraft
On November 8, 2012, Interjet entered into with Airbus, a favorable amendment agreement to the aircraft
purchase contracts signed on October 18, 2005. Such amendment agreement establishes, among other things,
a firm commitment to purchase 40 Airbus A320 Neo aircraft, with scheduled deliveries between the second
half of 2018 and the second half of 2023. The A320 Neo aircraft incorporate the latest aeronautical
technology, providing a 15% saving in fuel consumption due to their greater range and load capacity. With
this purchase Interjet will gradually replace its current fleet with more efficient aircraft, improving its
operating profitability and maintaining a low average age for the whole fleet.
8
The commercial and financial conditions negotiated by Interjet with the manufacturer will enable it to access
different financing sources for the acquisition, including without limitation, export financing by export credit
agencies (ECA´s), long-term commercial bank loans, and sale and leaseback with lessors, or direct financing
from the manufacturer, all under convenient terms, which will help improve its financial profile. Furthermore,
as part of the same transaction Interjet convinced Airbus to reduce by approximately 10.89% the price of each
of the six A320 aircrafts that are received between November 2012 and December 2013, which represent a
significant direct benefit.
New aircraft
On March 2, 2015, the Entity signed a contract with Superjet to acquire 10 SSJ100 model aircraft, whose
delivery is scheduled between 2015 and 2016. The four deliveries will be between August and December
2015.
New destinations
In 2014, the Entity began flights between México-Palenque, Tijuana-Culiacán, Tijuana-Oaxaca, TijuanaBajío, Tijuana-Aguascalientes, Monterrey-Villahermosa, Monterrey-Cd. Juárez, Monterrey-Veracruz,
Monterrey-Houston and Monterrey-Cd. Del Carmen.
Alliances
During the first quarter of 2014 the Entity signed a code share agreement with Iberia, which involves all
destinations departing and arriving at the International Airport of Mexico City operated by Iberia.
During the fourth quarter of 2014, the Entity signed a code share agreement with American Airlines in five
destinations, Huatulco, Villahermosa, Merida, Oaxaca and Tuxtla Gutierrez.
3.
Basis of presentation
a.
Explanation for preparation in English
The accompanying consolidated financial statements have been prepared in English for use outside of
Mexico. These consolidated financial statements are presented on the basis of International Financial
Reporting Standards (“IFRS”). Certain accounting practices applied by the Entity that conform with
IFRS may not conform with accounting principles generally accepted in the country of use.
b.
Negative working capital
As of December 31, 2014 and 2013, the Entity has a negative working capital of $6,309,811 and
$3,227,998, respectively. The Entity since the beginning of its operations decided to enter into shortterm loans agreements renewable every year to take advantage of lower interest rates and to reduce the
financial costs every year. The Entity is assessing the convenience of renegotiating the short-term loans
into long-term loans.
c.
Basis of preparation
The consolidated financial statements have been prepared on the historical cost basis.
9
i.
Historical cost:
Historical cost is generally based on the fair value of the consideration given in exchange for
assets.
ii.
Fair value:
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement date, regardless of whether
that price is directly observable or estimated using another valuation technique. In estimating
the fair value of an asset or a liability, the Entity takes into account the characteristics of the
asset or liability if market participants would take those characteristics into account when
pricing the asset or liability at the measurement date. Fair value for measurement and/or
disclosure purposes in these consolidated financial statements is determined on such a basis,
except for share-based payment transactions that are within the scope of IFRS 2, leasing
transactions that are within the scope of IAS 17, and measurements that have some similarities
to fair value but are not fair value, such as net realizable value in IAS 2 or value in use in IAS
36.
In addition, for financial reporting purposes, fair value measurements are categorized into Level
1, 2 or 3 based on the degree to which the inputs to the fair value measurements are observable
and the significance of the inputs to the fair value measurement in its entirety, which are
described as follows:



d.
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or
liabilities that the entity can access at the measurement date;
Level 2 inputs are inputs, other than quoted prices included within Level 1, that are
observable for the asset or liability, either directly or indirectly; and
Level 3 inputs are unobservable inputs for the asset or liability.
Consolidation of financial statements
The consolidated financial statements incorporate the financial statements of the Entity and its
subsidiaries controlled by it. Control is achieved when the Entity has the power to govern their
financial and operational policies of an entity so as to obtain benefits from its activities.
Entity
ABC Shuttle Transporte Terrestre, S. A. de C. V. (“ABC Shuttle”)
Compañía para la Capacitación y Adiestramiento Integral para Pilotos, S. A de
C. V. (“Capacitación y Adiestramiento”)
Servicios Administrativos Galem, S. A. de C. V. (“Servicios Galem”)
ABC Capacitación y Adiestramiento, S. A. de C. V. (“ABC Capacitación”)
ABC Aerolíneas Mantenimiento Técnico Aeronáutico,
S. A. de C. V. (“ABC Mantenimiento”)
ABC Servicios Terrestres, S. A de C. V. (“ABC Servicios Terrestres”)
AV Aerolíneas, S. A de C. V. y subsidiaria (“AV”)
Grupo Aleve, S. A. de C. V. (“Aleve”)
Taller de Reparación Aeronáutica IJ-TEK, SAPI, de
C. V. (“Taller”)
IJ Cargo, S.A. de C.V. (IJ Cargo)
Ownership
2014 and 2013
%
99
99
95
99(1)
99(1)
95(1)
99
99
60
98
10
(1)
The 90% of these companies are controlled by the Entity directly and 9% indirectly through a
consolidated subsidiary.
Balances and transactions between consolidated companies have been eliminated.
The non-controlling interests in the subsidiaries are identified separately in relation to the investments
that Entity has in them. The non-controlling interests may be initially valued, either at fair value or at
the proportional interest in the non-controlling interests over the fair value of the identifiable assets of
the entity acquired. The choice of the valuation basis is made individually for each transaction. After
the acquisition, the book value of the controlling interests represents the amount of such interests as of
the initial recognition, plus the portion of the subsequent non-controlling interests of the statement of
changes in stockholders' equity. The comprehensive result is attributed to the non-controlling interests
even if it gives rise to a deficit in them.
i.
Subsidiaries – The subsidiaries are all the companies over which the Entity has the power to
govern their operating and financial policies, generally because it owns more than half of the
voting stock. The existence and effects of the potential voting rights which are currently
exercisable or convertible are considered when it is evaluated whether the Entity controls other
Entity. The subsidiaries are consolidated from the date on which their control is transferred to
Entity, and they cease to consolidate from the date on which control is lost. According to the
prior Standing Interpretations Committee SIC 12 the SPE are consolidated when the substance
of the relationship between the Entity and the SPE indicates that these are controlled by it.
The accounting policies of subsidiaries have been changed to the extent necessary to ensure that
there is consistency with the policies adopted by the Entity
e.
Functional and reporting currency
These consolidated financial statement are presented in Mexican pesos, that is the functional currency
of the operations located in México. To consolidate financial statements of foreign subsidiaries, the
accounting policies of the foreign entities are converted to IFRS using the currency in which
transactions are recorded. The financial statements are subsequently translated to Mexican pesos using
the following methodologies:
Foreign operations whose functional currency is the same as the currency in which transactions are
recorded translate their financial statements using the following exchange rates: 1) the closing
exchange rate in effect at the balance sheet date for assets and liabilities; 2) historical exchange rates
for stockholders’ equity, and 3) the rate on the date of accrual of revenues, costs and expenses.
Translation effects are recorded to other comprehensive income beginning on the transition date to
IFRS.
The currency in which transactions are recorded and the functional currency of foreign operations and
the exchange rates used in the different translation processes are as follows:
Entity
Inter-Jet Airlines Ldt.
Currency of
accounting
records
Functional
currency
U.S. Dollar
U.S. Dollar
Mexican peso exchange rates
December 31,
December 31,
2014
2013
$
14.7348
$
13.0652
11
f.
Statements of Loss or Profit
Costs and expenses presented in the consolidated statements of loss or profit were classified according
to their nature because this is the practice of the sector to which the Entity belongs. It presents a
subtotal for income from operations in order to provide a better understanding of the economic and
financial performance, which is the result of decreased the service revenue less operating expenses.
g.
Statements of Cash Flows
Cash flow is used by applying the indirect method for presentation of cash flows from operating
activities, so that consolidated net income for the period is adjusted for items not required, neither used
cash flows and flows relating to investment and financing activities. Interest received are presented as
investing activities operating and interest expense as financing activities or operation.
h.
New and revised IFRSs in issue but not yet effective
The Entity has not applied the following news and revised IFRSs that have been issued but are not yet
effect.
a.
Amendments to International Financial Reporting Standards (IFRSs) and new interpretations
which are mandatory from 2014.
In the current year, the Entity has applied a series of amendments to IFRS and new
Interpretation issued by the International Accounting Standards Board (IASB) that are
mandatorily effective for an accounting period that begins on or after January 1, 2014.
Amendments to IFRS 10, IFRS 12 and IAS 27 Investment Entities
Amendments to IAS 32 Offsetting Financial Assets and Financial Liabilities
Amendments to IAS 36 Disclosures Recoverable Amounts for Financial Assets
The application of these amendments did not have a significant impact on the disclosures in the
consolidated financial statements.
Annual Improvements to IFRSs 2010-2012 Cycle
Annual Improvements to IFRSs 2011-2013 Cycle
The Management of the Entity determined that the application of these amendments had not
significant effect on the consolidated financial statements of the Entity.
New and amended IFRS issued but not yet effective
b.
IFRS 9, Financial Instruments
The Management of the Entity anticipate that the application of IFRS 9 may have a significant
impact on amounts reported in respect of financial assets and liabilities of the Entity. However,
it is not practical to provide a reasonable estimate of that effect until a detailed review has been
completed.
4.
Summary of significant accounting policies
a.
Statement of compliance
The consolidated financial statements have been prepared in accordance with International Financial
Reporting Standards released by IASB.
12
b.
Financial assets
Financial assets are recognized when the Entity becomes a party to the contractual provisions of the
instruments.
Financial assets are initially valued at fair value. The transaction costs directly attributable to the
acquisition or issuance of financial assets (other than financial assets at fair value through profit or
loss) are added to or deducted from the fair value of the financial assets, as the case may be, in the
initial recognition. The transaction costs directly attributable to the acquisition of financial assets at
fair value through profit or loss are recognized immediately in results.
Financial assets are classified into the following specified categories: financial assets ‘at fair value
through profit or loss’ (FVTPL), ‘held-to-maturity’ investments, ‘available-for-sale’ (AFS) financial
assets and ‘loans and receivables’. The classification depends on the nature and purpose of the
financial assets and is determined at the time of initial recognition. All regular way purchases or sales
of financial assets are recognized and derecognized on a trade date basis. Regular way purchases or
sales are purchases or sales of financial assets that require delivery of assets within the time frame
established by regulation or convention in the marketplace.
-
Effective interest method
The effective interest method is a method of calculating the amortized cost of a debt instrument
and of allocating interest income over the relevant period. The effective interest rate is the rate
that exactly discounts estimated future cash receipts (including all fees and points paid or
received that form an integral part of the effective interest rate, transaction costs and other
premiums or discounts) through the expected life of the debt instrument, or, where appropriate,
a shorter period, to the net carrying amount on initial recognition.
Income is recognized on an effective interest basis for debt instruments other than those
financial assets classified as of FVTPL.
-
Financial assets at FVTPL
Financial assets are classified as of FVTPL when the financial asset is either held for trading or
it is designated as of FVTPL.
A financial asset is classified as held for trading if:



It has been acquired principally for the purpose of selling it in the near term; or
On initial recognition it is part of a portfolio of identified financial instruments that the
Entity manages together and has a recent actual pattern of short-term profit-taking; or
It is a derivative that is not designated and effective as a hedging instrument.
A financial asset other than a financial asset held for trading may be designated as of FVTPL
upon initial recognition if:



Such designation eliminates or significantly reduces a measurement or recognition
inconsistency that would otherwise arise; or
The financial asset forms part of an Entity of financial assets or financial liabilities or
both, which is managed and its performance is evaluated on a fair value basis, in
accordance with the Entity’s documented risk management or investment strategy, and
information about the Entity is provided internally on that basis; or
It forms part of a contract containing one or more embedded derivatives, and IAS 39
permits the entire combined contract to be designated as of FVTPL.
13
Financial assets at FVTPL are stated at fair value, with any gains or losses arising on
remeasurement recognized in profit or loss. The net gain or loss recognized in profit or loss
incorporates any dividend or interest earned on the financial asset and is included in the ‘other
income (expenses) - Net’ line item.
-
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments
that are not quoted in an active market. Loans and receivables are measured at amortized cost
using the effective interest method, less any impairment.
Interest income is recognized by applying the effective interest rate, except for short-term
receivables when the effect of discounting is immaterial.
-
Impairment of financial assets
Financial assets, other than those at FVTPL, are assessed for indicators of impairment at the end
of each reporting period. Financial assets are considered to be impaired when there is objective
evidence that, as a result of one or more events that occurred after the initial recognition of the
financial asset, the estimated future cash flows of the investment have been affected.
For AFS equity investments, a significant or prolonged decline in the fair value of the security
below its cost is considered to be objective evidence of impairment.
For all other financial assets, objective evidence of impairment could include:




Significant financial difficulty of the issuer or counterparty; or
Breach of contract, such as a default or delinquency in interest or principal payments; or
It becoming probable that the borrower will enter bankruptcy or financial reorganization; or
The disappearance of an active market for that financial asset because of financial
difficulties.
For certain categories of financial assets, such as trade receivables, assets are assessed for
impairment on a collective basis even if they were assessed not to be impaired individually.
For financial assets carried at amortized cost, the amount of the impairment loss recognized is
the difference between the asset’s carrying amount and the present value of estimated future
cash flows, discounted at the financial asset’s original effective interest rate.
For financial assets that are carried at cost, the amount of the impairment loss is measured as
the difference between the asset’s carrying amount and the present value of the estimated future
cash flows discounted at the current market rate of return for a similar financial asset. Such
impairment loss will not be reversed in subsequent periods.
The carrying amount of the financial asset is reduced by the impairment loss directly for all
financial assets with the exception of trade receivables, where the carrying amount is reduced
through the use of an allowance account. When a trade receivable is considered uncollectible, it
is written off against the allowance account. Subsequent recoveries of amounts previously
written off are credited against the allowance account. Changes in the carrying amount of the
allowance account are recognized in profit or loss.
When an AFS financial asset is considered to be impaired, cumulative gains or losses
previously recognized in other comprehensive income are reclassified to profit or loss in the
period.
14
For financial assets measured at amortized cost, if, in a subsequent period, the amount of the
impairment loss decreases and the decrease can be related objectively to an event occurring
after the impairment was recognized, the previously recognized impairment loss is reversed
through profit or loss to the extent that the carrying amount of the investment at the date the
impairment is reversed does not exceed what the amortized cost would have been had the
impairment not been recognized.
In respect of AFS equity securities, impairment losses previously recognized in profit or loss
are not reversed through profit or loss. Any increase in fair value subsequent to an impairment
loss is recognized in other comprehensive income and accumulated under the heading of
investments revaluation reserve. In respect of AFS debt securities, impairment losses are
subsequently reversed through profit or loss if an increase in the fair value of the investment
can be objectively related to an event occurring after the recognition of the impairment loss.
-
Derecognition of financial assets
The Entity derecognizes a financial asset when the contractual rights to the cash flows from the
asset expire, or when it transfers the financial asset and substantially all the risks and rewards of
ownership of the asset to another party. If the Entity neither transfers nor retains substantially
all the risks and rewards of ownership and continues to control the transferred asset, the Entity
recognizes its retained interest in the asset and an associated liability for amounts it may have to
pay. If the Entity retains substantially all the risks and rewards of ownership of a transferred
financial asset, the Entity continues to recognize the financial asset and also recognizes a
collateralized borrowing for the proceeds received.
On derecognition of a financial asset in its entirety, the difference between the asset’s carrying
amount and the sum of the consideration received and receivable and the cumulative gain or
loss that had been recognized in other comprehensive income and accumulated in equity is
recognized in profit or loss.
On derecognition of a financial asset other than in its entirety, the Entity allocates the previous
carrying amount of the financial asset between the part it continues to recognize under
continuing involvement, and the part it no longer recognizes on the basis of the relative fair
values of those parts on the date of the transfer. The difference between the carrying amount
allocated to the part that is no longer recognized and the sum of the consideration received for
the part no longer recognized and any cumulative gain or loss allocated to it that had been
recognized in other comprehensive income is recognized in profit or loss. A cumulative gain or
loss that had been recognized in other comprehensive income is allocated between the part that
continues to be recognized and the part that is no longer recognized on the basis of the relative
fair values of those parts
c.
Inventories
Inventories of expendable parts, accessories, materials and supplies are stated at the lower of their cost
or net realizable values, using the average method. They are recognized in results as consumed, also
based on their average cost.
d.
Prepaid expenses
The Entity makes advances for the purchase of aircraft to be recognized in the entity functional
currency translated at the exchange rate of the payment date. When the financial effect is relevant,
despite the advances that do not qualify as a financial asset, recognizing the implicit financing to
accrue the discount interest rate implicit in the agreement. The item also includes prepayments
additional minimum lease payments resulting from subtracting the payment of advances for
maintenance, fair value, as described in accounting policy advances for maintenance.
15
e.
Flight equipment, leasehold improvements, furniture and equipment
The flight equipment, adaptations, improvements and equipment are initially recorded at cost. These
assets are recorded at acquisition cost. Balances from acquisitions made through December 31, 2007
were restated for the effects of inflation by applying factors derived from the National Consumer Price
Index (“NCPI”) through that date as deemed cost in accordance with the transition elections to IFRS
applied by the Entity.
Land is not depreciated.
The furniture and equipment are stated at cost less accumulated depreciation.
Depreciation and amortization are recognized to lead to results of cost or valuation of assets (other
than land) less their residual values over their useful lives using the straight line method. The estimated
useful lives, residual values and depreciation method are reviewed at the end of each year, and the
effect of any changes in the estimate recorded is recognized on a prospective basis.
Years
Simulator
Flight equipment – aircraft
Flight equipment – aircraft (1)
Leasehold improvements
Communication equipment
Airport operating equipment
Furniture
Transportation equipment
Computer equipment
20
19 (average)
10
20
12
10
10
4
3
Assets held under finance leases are depreciated based on their estimated useful life as owned assets
or, if life is lower, in the corresponding lease term.
The gain or loss arising from the sale or retirement of an item of flight equipment, leasehold
improvements, and furniture and equipment is calculated as the difference between the resources
received from sales and the carrying amount of the asset and is recognized in income.
The category includes aircraft engines, airframes, landing gear, major maintenance carryforwards and
repair costs, on owned aircraft and those obtained through leasing, which are amortized over the hours
or accumulated cycles of operation, as applicable. Considering a residual value of 15%.
(1)
f.
The limit is the physical condition of the “overhaul” (repaired replacement part). The reparable
spare parts and replacement parts whose substitution is expected in the short term are at values
similar to those existing in the market which consider the prevailing situation each year and are
estimated to be recoverable in the regular course of operations. No residual value is considered.
Leases
Leases are classified as finance leases when the terms of the lease transfer substantially all the Entity
risks and rewards of ownership. All other leases are classified as operating leases.
16
The assets held under finance leases are recognized as assets of the entity at fair value at inception of
the lease, or if lower, the present value of the minimum lease payments. The corresponding liability to
the lessor is included in the statement of financial position as a finance lease liability.
Lease payments are apportioned between the finance charge and the reduction of the lease obligation
so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are
charged directly against income, unless they can be directly attributable to qualifying assets, in which
case they are capitalized in accordance with the entity's accounting policy. Contingent rents are
recognized as expenses in the periods in which they are incurred.
g.
Prepaid maintenance
The Entity records the amounts paid in advance for maintenance as a financial asset if it is required to
make the payment of maintenance, and has made advance payments for maintenance, that they may be
reimbursed by the lessor if the institution demonstrates that spending maintenance has been performed.
The resulting financial asset is recognized at fair value. Any difference between this and the amount
paid is considered part of the lease payments. A financial asset is classified as a receivable, and
therefore, it is recognized at amortized cost. For its part, the additional minimum lease payments are
recognized in the caption of prepayments.
When the amounts paid are not fully recoverable, the unrecoverable amounts are determined and
periodically reviewed and represent an impairment of the financial asset.
h.
Other assets
Costs derived from development activities and which give rise to future economic benefits, as they
fulfill certain requirements for recognition as assets, are capitalized and amortized based on the
straight-line method over ten years. Expenses that do not meet these requirements, as well as research
costs, are recorded in operations in the year they are incurred.
On August 19, 2008, the Entity commenced operations at the Mexico City International Airport,
through a contract with Aerocalifornia, S. A. de C. V., under which the Entity acquired rights to space
and flight hours for takeoff and landing of aircraft, documentation counters for passengers and
baggage, passenger information desks on the general terminal, as well as parking facilities for short
stay and long stay, Aero cares services, baggage revision services, service corridors, telescopic mobile
service facilities, equipment and ground support services. The acquisition of these rights and other
services paid were recorded as an indefinite lived asset, which is not amortized, but is subject to
impairment testing annually. Presented in the balance sheet in the other assets line item.
i.
Concession
On August 8, 2005, the Federal Government, through the SCT, granted the Entity the concession to
provide public services related to national air transportation of passengers, cargo and mail for a fiveyear period. As mentioned in Note 1, in 2010, the Entity obtained an extension of the concession term
for 30 additional years.
The Entity considers that the grant qualifies as an intangible asset with an indefinite life and therefore
is not amortized and is subject to impairment tests at least annually.
j.
Deposits on aircraft leases mainly represent deposits paid to lessors of the fleet rented by the Entity as
well as deposits with lessors of buildings and airport service providers. These amounts are presented as
current or non-current, based on their contractually established recovery date.
17
k.
Impairment of long-lived assets in use
At the end of each reporting period, the Entity reviews the carrying amounts of its tangible and
intangible assets to determine whether there is any indication that those assets have suffered an
impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order
to determine the extent of the impairment loss (if any). When it is not possible to estimate the
recoverable amount of an individual asset, the Entity estimates the recoverable amount of the cashgenerating unit to which the asset belongs. When a reasonable and consistent basis of allocation can be
identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are
allocated to the smallest Entity of cash-generating units for which a reasonable and consistent
allocation basis can be identified.
Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested
for impairment at least annually, and whenever there is an indication that the asset may be impaired.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in
use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate
that reflects current market assessments of the time value of money and the risks specific to the asset
for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying
amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable
amount. An impairment loss is recognized immediately in profit or loss, unless the relevant asset is
carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
When an impairment loss subsequently reverses, the carrying amount of the asset (or a cash-generating
unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying
amount does not exceed the carrying amount that would have been determined had no impairment loss
been recognized for the asset (or cash generating unit) in prior years. A reversal of an impairment loss
is recognized immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in
which case the reversal of the impairment loss is treated as a revaluation increase.
l.
Financial liabilities
Financial liabilities are initially valued at fair value. The transaction costs which are directly
attributable to the acquisition or issuance of financial liabilities (other than financial liabilities valued
at fair value with changes recorded through results) are added or deducted, when applicable, from the
initially recognized fair value of financial liabilities. The transaction costs which are directly
attributable to financial liabilities at fair value with changes recorded through results are immediately
recognized in results.
Financial liabilities are classified as either financial liabilities ‘at FVTPL’ or ‘other financial
liabilities’. Note 12 describe the characteristics of loans received by the Entity from financial
institutions.
-
Financial liabilities at FVTPL
Financial liabilities are classified as of FVTPL when the financial liability is either held for
trading or it is designated as of FVTPL.
18
A financial liability is classified as held for trading if:
•
It has been incurred principally for the purpose of repurchasing it in the near term; or
•
On initial recognition it is part of a portfolio of identified financial instruments that the
Entity manages together and has a recent actual pattern of short-term profit-taking; or
•
It is a derivative that is not designated and effective as a hedging instrument. A financial
liability other than a financial liability held for trading may be designated as of FVTPL
upon initial recognition if:
•
Such designation eliminates or significantly reduces a measurement or recognition
inconsistency that would otherwise arise; or
•
The financial liability forms part of an Entity of financial assets or financial liabilities or
both, which is managed and its performance is evaluated on a fair value basis, in
accordance with the Entity’s documented risk management or investment strategy, and
information about the Entity is provided internally on that basis; or
•
It forms part of a contract containing one or more embedded derivatives, and IAS 39
permits the entire combined contract to be designated as of FVTPL.
Financial liabilities at FVTPL are stated at fair value, with any gains or losses arising on
remeasurement recognized in profit or loss. The net gain or loss recognized in profit or loss
incorporates any interest paid on the financial liability and is included in the statement of profit
or loss.
-
Financial liabilities at FVTPL
Other financial liabilities (including borrowings and trade and other payables) are subsequently
measured at amortized cost using the effective interest method.
The effective interest method is a method of calculating the amortized cost of a financial liability and
of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly
discounts estimated future cash payments (including all fees and points paid or received that form an
integral part of the effective interest rate, transaction costs and other premiums or discounts) through
the expected life of the financial liability, or (where appropriate) a shorter period, to the net carrying
amount on initial recognition.
The Entity only eliminates financial liabilities when its obligations are fulfilled, canceled or expire.
m.
Derivative financial instruments
The Entity enters into derivative financial instruments contracts. These instruments are negotiated only
with institutions of recognized financial strength and trading limits have been established for each
institution. The Entity’s policy is not to carry out transactions with derivative financial instruments for
the purpose of speculation.
The Entity recognizes all assets or liabilities that arise from transactions with derivative financial
instruments at fair value in the statements of financial position, regardless of its intent for holding
them. Fair value is determined using prices quoted on recognized markets. If such instruments are not
traded, fair value is determined by applying valuation techniques recognized in the financial sector.
19
When derivatives are entered into to hedge risks, and such derivatives meet all hedging requirements,
their designation is documented at the beginning of the hedging transaction, describing the
transaction’s objective, characteristics, accounting treatment and how the effectiveness of the
instrument will be measured.
The Entity discontinues hedge accounting when the derivative instrument matures, is sold, cancelled or
exercised, when the derivative instrument does not reach a high percentage of effectiveness to
compensate for changes in fair value or cash flows of the hedged item, or when the Entity decides to
cancel its designation as a hedge.
While certain derivative financial instruments are contracted for hedging from an economic point of
view, they are not designated as hedges because they do not meet all of the requirements and are
instead classified as held-for-trading for accounting purposes. Changes in fair values are recognized in
comprehensive financing results.
n.
Air traffic liability and revenue recognition
Flight sales are initially recognized as a liability under air traffic liability. When the transportation
service is provided or the right to use the ticket is lost, the earned revenues are recognized and the
liability account is reduced.
With respect to unused tickets, transportation revenues are recognized based on the itinerary date of
the last respective coupon. As a policy, the Entity does not reimburse sold tickets.
Revenue from freight and excess baggage are recognized when the service is provided.
o.
Frequent-flier program
The Entity maintains the Payback Program (formerly the Interjet Club Program) through which, in
exchange for an annual enrollment fee, program members can accrue 10% of their airfares (without
taxes or airport tax) to acquire tickets, pay excess baggage charges or itinerary change fees throughout
a 12-month period. The fair value attributed to these rewards is deferred as a liability and recognized
as income when the Entity has fulfilled its obligation, i.e., when rewards are utilized or expire,
whichever occurs first. The price is assigned to rewards at fair value, while the residual amount is
assigned to the ticket value.
At December 31, 2014 and 2013, the liability generated by this program is insignificant and is
presented under accrued expenses in the consolidated statements of financial position.
p.
Employee benefits from termination, retirement and statutory employee profit sharing (PTU)
Payments to defined contribution retirement benefit plans are recognized as an expense when
employees have rendered service entitling them to the contributions.
20
For defined benefit retirement benefit plans, the cost of providing benefits is determined using the
projected unit credit method, with actuarial valuations being carried out at the end of each annual
reporting period. Remeasurement, comprising actuarial gains and losses, the effect of the changes to
the asset ceiling (if applicable) and the return on plan assets (excluding interest), is reflected
immediately in the statement of financial position with a charge or credit recognized in other
comprehensive income in the period in which they occur. Remeasurement recognized in other
comprehensive income is reflected immediately in retained earnings and will not be reclassified to
profit or loss. Past service cost is recognized in profit or loss in the period of a plan amendment. Net
interest is calculated by applying the discount rate at the beginning of the period to the net defined
benefit liability or asset. Defined benefit costs are categorized as follows:
•
•
•
Service cost (including current service cost, past service cost, as well as gains and losses on
curtailments and settlements).
Net interest expense or income.
Remeasurement.
The Entity presents the first two components of defined benefit costs in profit or loss in the line item
employee benefits expense. Gains and losses for reduction of service are accounted for as past service
costs.
The retirement benefit obligation recognized in the consolidated statement of financial position
represents the actual deficit or surplus in the Entity’s defined benefit plans. Any surplus resulting from
this calculation is limited to the present value of any economic benefits available in the form of refunds
from the plans or reductions in future contributions to the plans.
A liability for a termination benefit is recognized at the earlier of when the Entity can no longer
withdraw the offer of the termination benefit and when the entity recognizes any related restructuring
costs.
Statutory employee profit sharing (PTU)
PTU is recorded in the results of the year in which it is incurred and presented under other income and
expenses in the Entity consolidated statements of operations
q.
Provision for maintenance and return conditions
When an operating lease establishes a future major maintenance obligation, the provision is calculated
by independent actuaries. In this case, the Entity records the best estimate of the future obligation if the
following assumptions are fulfilled:
I.
A current obligation (whether legal or assumed) payable by the Entity exists as the result of a
past event;
II.
The disbursement of economic resources as a means of settling this obligation is likely, and
III.
The obligation can be fairly estimated.
The obligation established in lease contracts generally involves returning, in minimum performance
conditions, main components like engines, auxiliary power units (APU), major maintenance (1.e. CChecks), landing gear, repainting or shared maintenance costs (when usage exceeds a given level), as
detailed in each particular lease contract.
It is usually fairly clear whether a return obligation condition has been activated under the terms of the
lease contract for each component by matching return conditions with monthly aircraft condition
records.
21
When the existing condition of a leased aircraft component does not meet the return conditions
stipulated in the lease contract, the Entity has the obligation to settle the major maintenance costs
incurred for the component or make a payment to the lessor. Accordingly, it must create a provision
for the obligation established for this purpose in lease contracts.
A provision is recorded for the minimum amount required for the next maintenance program to return
significant aircraft components to a performance level in compliance with return conditions. This is the
case because the minimum disbursement required for the next major maintenance program or the
minimum amount payable to the lessor is the only contractual obligation established for the Entity,
which is fulfilled (at least temporarily) by the next major maintenance program implemented to return
components to a performance level exceeding lease contract requirements. This provision is discounted
at current value if the effect is material and classified as short and long-term based on estimated
maintenance dates.
The related provision for maintenance and return conditions is computed by independent actuary on
the basis of the lease agreements.
r.
Provisions
Provisions are recognized for current obligations that arise from a past event, that are probable to result
in the use of economic resources, and that can be reasonably estimated.
s.
Income taxes
The expense for taxes on income represents the sum of current taxes on income and deferred taxes on
income.
-
Current taxes
Current income taxes, calculated as the higher of the regular Mexican income tax (“ISR”) or the
Business Flat Tax (“IETU”), are recorded in the results of the year in which they are incurred.
-
Deferred income taxes
Deferred income tax is recognized on temporary differences between the carrying amounts of
assets and liabilities in the consolidated financial statements and the corresponding tax bases
used in the computation of taxable profit. Deferred income tax liabilities are generally
recognized for all taxable temporary differences. Deferred income tax assets are generally
recognized for all deductible temporary differences to the extent that it is probable that taxable
profits will be available against which those deductible temporary differences can be utilized.
Such deferred income tax assets and liabilities are not recognized if the temporary difference
arises from the initial recognition (other than in a business combination) of assets and liabilities
in a transaction that affects neither the taxable profit nor the accounting profit. In addition,
deferred income tax liabilities are not recognized if the temporary difference arises from the
initial recognition of goodwill.
As a consequence of the 2014 Tax Reform, as of December 31, 2013 deferred IETU is no
longer recognized.
22
Deferred income tax liabilities are recognized for taxable temporary differences associated with
investments in subsidiaries and associates, and interests in joint ventures, except where the
Entity is able to control the reversal of the temporary difference and it is probable that the
temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from
deductible temporary differences associated with such investments and interests are only
recognized to the extent that it is probable that there will be sufficient taxable profits against
which to utilize the benefits of the temporary differences and they are expected to reverse in the
foreseeable future.
The carrying amount of deferred income tax assets is reviewed at the end of each reporting
period and reduced to the extent that it is no longer probable that sufficient taxable profits will
be available to allow all or part of the asset to be recovered.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the
period in which the liability is settled or the asset realized, based on tax rates (and tax laws) that
have been enacted or substantively enacted by the end of the reporting period.
The measurement of deferred income tax liabilities and assets reflects the tax consequences that
would follow from the manner in which the Entity expects, at the end of the reporting period, to
recover or settle the carrying amount of its assets and liabilities.
For the purposes of measuring deferred tax liabilities and deferred tax assets for investment
properties that are measured using the fair value model, the carrying amounts of such properties
are presumed to be recovered entirely through sale, unless the presumption is rebutted. The
presumption is rebutted when the investment property is depreciable and is held within a
business model whose objective is to consume substantially all of the economic benefits
embodied in the investment property over time, rather than through sale. The Entity’s
management reviewed the Entity’s investment property portfolios and concluded that none of
the Entity’s investment properties are held under a business model whose objective is to
consume substantially all of the economic benefits embodied in the investment properties over
time, rather than through sale. Therefore, management has determined that the ‘sale’
presumption set out in the amendments to IAS 12 is not rebutted. As a result, the Entity has not
recognized any deferred taxes on changes in fair value of the investment properties as the Entity
is not subject to any income taxes on the fair value changes of the investment properties on
disposal.
-
Current and deferred income taxes
Current and deferred income tax are recognized in loss or profit or loss, except when they relate
to items that are recognized in other comprehensive income or directly in equity, in which case,
the current and deferred income tax are also recognized in other comprehensive income or
directly in equity respectively. Where current income tax or deferred income tax arises from the
initial accounting for a business combination, the tax effect is included in the accounting for the
business combination.
t.
Transactions in foreign currency
The individual financial statements of each of the Entity's subsidiaries are prepared in the currency of
the primary economic environment in which the Entity operates (its functional currency). For the
purpose of the consolidated financial statements, results and the financial position of each entity are
expressed in Mexican pesos, the Entity's functional currency and also the presentation currency of the
consolidated financial statements.
23
In preparing the financial statements of each individual Entity entity, transactions in currencies other
than the entity’s functional currency (foreign currencies) are recognized at the rates of exchange
prevailing at the dates of the transactions. At the end of each reporting period, monetary items
denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary
items carried at fair value that are denominated in foreign currencies are retranslated at the rates
prevailing at the date when the fair value was determined. Non-monetary items that are measured in
terms of historical cost in a foreign currency are not retranslated.
Exchange differences on monetary items are recognized in profit or loss in the period in which they
arise except for:
-
Exchange differences on foreign currency borrowings relating to assets under construction for
future productive use, which are included in the cost of those assets when they are regarded as
an adjustment to interest costs on those foreign currency borrowings.
-
Exchange differences on monetary items receivable from or payable to a foreign operation for
which settlement is neither planned nor likely to occur (therefore forming part of the net
investment in the foreign operation), which are recognized initially in other comprehensive
income and reclassified from equity to profit or loss on repayment of the monetary items.
For the purposes of presenting these consolidated financial statements, the assets and liabilities of the
Entity’s foreign operations are translated into Currency Units using exchange rates prevailing at the
end of each reporting period. Income and expense items are translated at the average exchange rates
for the period, unless exchange rates fluctuate significantly during that period, in which case the
exchange rates at the dates of the transactions are used. Exchange differences arising, if any, are
recognized in other comprehensive income and accumulated in equity (and attributed to noncontrolling interests as appropriate).
u.
5.
Revenue recognition – The Entity recognizes sold, unused transportation as a liability and recognizes
the respective revenues when the transportation service is provided or the respective utilization right is
lost. In the case of the Club Interjet® Program, the Entity defers the estimated fair value of rewards (by
determining the fair value of the ticket in a residual manner) as a liability; but subsequently recognizes
this amount as revenue when rewards are utilized or expire, whichever occurs first.
Judgments and estimates
In the application of the Entity’s accounting policies, which are described in Note 4, the Entity’s management
are required to make judgments, estimates and assumptions about the carrying amounts of assets and
liabilities that are not readily apparent from other sources. The estimates and associated assumptions are
based on historical experience and other factors that are considered to be relevant. Actual results may differ
from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognized in the period in which the estimate is revised if the revision affects only that period,
or in the period of the revision and future periods if the revision affects both current and future periods:
a.
Lease classification – For accounting purposes, lease contracts are classified as operating or capital
leases by considering the extent to which the Entity obtains the risks and rewards inherent to the
ownership of aircraft and other leased goods, and depending on the substance of the transaction rather
than its legal form. As this determination requires that management use its judgment, the Entity has
established internal evaluation criteria. For example, the Entity evaluates the lease contract period, the
economic life of the leased asset, the current value of minimum contract payments and the asset's
estimated fair value, among other items, as the key factors used to classify a lease contract as an
operating or finance lease. Note 12 indicates the obligations recognized for the finance leases executed
for flight equipment, while Note 20 discloses the obligations resulting from operating leases. Lease
classification modifications can have a significant impact on the Entity's financial position and results.
24
6.
b.
Advances, the maintenance provision and return conditions - Accounting for the obligations and
rights derived from operating lease contracts requires that management utilize its judgment and prepare
estimates. Provisions are only recorded when the Entity has a contractual obligation and when the
liability amount can be fairly estimated. Estimates are prepared based on maintenance projections,
which are also utilized to determine the payment of advances. The provision is discounted by utilizing
a pretax rate of 6.05%, which reflects the risk associated with the maintenance expense. While subject
to certain conditions that require the legal interpretation of contracts, advances are recognized as a
financial asset which accrues financial income. Finally, advances and the provision are presented on a
gross basis because IFRS require this presentation unless a given standard permits or requires a net
presentation and when it is considered that the conditions embodied in these standards are not fulfilled.
Changes to the above judgments and/or estimates could have a significant effect on the Entity's
financial position and results.
c.
Estimated useful lives, residual values and depreciation methods - The Entity periodically reviews
the estimates prepared for the useful lives, residual values and depreciation methods used for flight
equipment components, adaptations, improvements and equipment. The effect of estimate changes is
recognized prospectively. Estimate changes can have a significant effect on the Entity's financial
position and results.
d.
Impairment of long-lived assets in use - The Entity reviews the book values of long-lived assets in use
to determine indications of impairment. If indications of impairment are detected, it estimates the
recoverable amount, which includes the estimated fair value of the future cash flows generated by the
asset (or cash-generating unit) and their fair value. The fair value of future cash flows is based on
management's projection of future transactions, which are discounted by using a pretax interest rate
that reflects the evaluation of the amount that would be realized on the market given the value of
money over time and the specific risks related to the asset (or cash-generating unit). Management's
evaluations have not indicated any impairment of long-lived tangible and intangible assets. Changes to
these estimates or their underlying assumptions could result in asset impairment with a significant
effect on the Entity's financial position and results.
2014
Cash and bank deposits
Cash equivalents - Investment funds
7.
2013
$
1,341,091
1,019,192
$
1,995,543
626,952
$
2,360,283
$
2,622,495
Accounts receivable
2014
Trade accounts receivable
Credit cards
Sundry debtors
Officers and employees
2013
$
241,578
65,401
145,927
10,009
$
180,714
86,252
138,653
7,817
$
462,915
$
413,436
25
8.
Prepaid expenses
2014
Aircraft fuel (1)
Aircraft insurance
Prepaid insurance
Other
$
227,883
129,255
2,104
6,536
365,778
Prepaid expenses long term (2)
$
217,330
182,304
5,666
1,683
406,983
1,200,016
Total
9.
2013
$
1,565,794
1,192,760
$
1,599,743
(1)
The Entity modified its agreements for the acquisition of fuel by prepaying Aeropuertos y Servicios
Auxiliares, S. A., based on the previous months’ consumption.
(2)
It had a contractual obligation, for the acquisition of 20 aircrafts.
Flight equipment, leasehold improvements and furniture and equipment
2014
Flight equipment and simulator
Communication and airport operating equipment
Furniture and computer equipment
Land
$
Flight and other equipment in finance lease
$
2013
7,798,888
526,194
268,605
231,371
20,417
5,111
8,850,586
$
4,329,463
422,091
231,786
189,694
21,586
5,111
5,199,731
5,614,613
4,848,914
(1,991,021)
(1,360,338)
12,474,178
$
8,688,307
a.
January 1, 2014
Cost:
Communication and airport
operating equipment
Furniture and computer
equipment
Finance lease
Land
Total
$
$
4,329,463
422,091
Acquisitions
$
3,578,618
221,082
231,786
190,089
189,694
21,586
4,848,914
5,111
41,677
443
765,699
-
10,048,645
$
4,797,608
Disposals
$
(109,193)
(116,979)
December 31, 2014
$
(153,270)
268,605
-
231,371
20,417
5,614,613
5,111
(1,612)
$
(381,054)
7,798,888
526,194
$
14,465,199
26
Depreciation
expense
January 1, 2014
Depreciation:
operating equipment
equipment
Finance lease
Total
$
$
(793,181)
(49,408)
$
(478,229)
(18,376)
Disposals
$
December 31, 2014
-
1,916
$
(1,269,494)
(67,784)
(64,468)
(30,957)
-
(95,425)
(53,689)
(385,004)
(14,588)
(36,465)
(65,380)
(4,535)
-
(90,154)
(450,384)
(17,780)
(1,360,338)
$
(633,942)
1,343
$
3,259
$
(1,991,021)
b.
c.
Cost:
operating equipment
equipment
Finance lease
Land
Total
January 1, 2013
$
$
4,433,457
317,316
Acquisitions
$
Total
10.
$
$
December 31, 2013
(1,088,433)
-
$
4,329,463
422,091
203,571
28,215
-
231,786
84,681
18,488
3,989,838
4,806
105,013
3,098
859,076
305
-
189,694
21,586
4,898,914
5,111
9,052,157
$
(588,531)
(40,833)
2,084,921
$
Depreciation
expense
January 1, 2013
Depreciation:
operating equipment
equipment
Finance lease
984,439
104,775
Disposals
$
(204,650)
(8,575)
(1,088,433)
$ 10,048,645
Disposals
December 31, 2013
$
-
$
(793,181)
(49,408)
(39,066)
(25,402)
-
(64,468)
(33,511)
(203,937)
(9,181)
(20,178)
(181,067)
(5,407)
-
(53,689)
(385,004)
(14,589)
(915,059)
$
(445,279)
$
-
$
(1,360,338)
Other assets
2014
Payment of duties
Aviotek technical assistance
2013
$
141,380
10,397
$
141,380
-
$
151,777
$
141,380
27
11.
2014
For rental of aircraft and engines
For leases of buildings and other
12.
2013
$
416,662
133,059
$
328,490
133,249
$
549,721
$
461,739
2014
Notes payable Mexican pesos
Note payable in Mexican pesos, which bears interest payable
on a monthly basis at the Mexican interbank equilibrium
interest rate (TIIE) plus 2.70 basis (1)
$
600,000
2013
$
800,000
403,333
700,000
201,905
247,619
117,599
176,400
interest rate (TIIE) plus 5.00 basis points (6)
48,821
122,052
106,000
133,929
128,226
-
36,651
-
513,333
-
28
2014
2013
Finance lease obligation for flight equipment accruing interest
at a fixed rate (10)
6,677,938
3,972,565
Note payable in U.S. dollars, which bears interest payable on
a quarterly basis at LIBOR rate plus 1.5 basis (11)
1,969,790
1,656,347
Bears interest payable on a monthly basis at LIBOR plus 0.95
points (12)
1,329,400
1,306,520
Note payable in U.S. Dollars, which bears interest payable on
a monthly basis at the LIBOR rate plus 6.00 (effective
weighted average interest rate of 6.26%) (13)
-
Notes payable US dollars
Note payable in U.S. Dollars, which bears interest payable on
a monthly basis at the LIBOR rate plus 6.00 (effective
weighted average interest rate of 6.26%) (14)
326,630
58,939
65,326
Note payable in U.S. Dollars, which bears interest payable
quarterly at LIBOR rate plus 0.5 basis (15)
1,127,212
1,136,957
Total notes payable to financial institutions
13,505,814
10,457,678
6,911,742
5,204,175
Less - Short-term portion
$
6,594,072
$
5,253,503
The loans are guaranteed by the shareholders of the Entity.
(1)
On December 4, 2012, the Entity signed with Nacional Financiera, SNC, Banking Institution
Development, Directorate Trust (NAFIN), acting as trustee of Trust No. 80660, for $1,000,000 payable
in 60 monthly installments of $16.667 pesos from January 21, 2013.
(2)
On August 10, 2012, the Entity signed with NAFIN, acting as trustee of Trust No. 80660, for$550,000
payable in 60 monthly installments of $9,167 pesos from September 20, 2013.
(3)
On August 6, 2014, the Entity signed with NAFIN, acting as trustee of Trust No. 80660, for $750,000
payable in 60 monthly installments of $12,500 pesos from September 22, 2014.
(4)
On May 18, 2012, the Entity executed an unsecured loan contract with Banco Nacional de Comercio
Exterior, S.N.C. (Bancomext) for $320,000 pesos, payable in 84 monthly installments of $3,810 from
June 18, 2012.
(5)
This loan contract was executed on December 14, 2011 with Banco Inbursa for $293,998, payable in
60 monthly installments of $4,900 from January 2, 2012.
(6)
The unsecured loan contract executed on August 28, 2009 with Banco Nacional de Comercio Exterior
(Bancomext), will be settled through 18 monthly payments of $16,667 pesos as of March 2010. On
August 12, 2011, the Entity executed a new loan contract with Bancomext, which will be settled
through 48 monthly payments of $ 6,102 as of September 2011.
29
(7)
On March 18, 2013, the Entity executed an unsecured loan contract with Bancomext for $150,000
pesos, payable in 84 monthly installments of $2,000.
(8)
The unsecured loan contract was signed on March 21, 2014 with the Banco Nacional de Comercio
Exterior, SNC (Bancomext) payable in 24 monthly installments.
(9)
The unsecured loan contract was signed on June 21, 2014 with the Banco Nacional de Comercio
Exterior, SNC (Bancomext) payable in 24 monthly installments.
(10)
At December 31, 2014, minimum payments derived from finance leases are as follows:
Total minimum lease obligations
Current portion of obligations
Current value of obligations
$
4,881,998
1,795,939
$
6,677,937
(11)
On January 29, 2010, a loan contract was executed with JP Morgan for US$ 149,200, with short-term
settlement. In 2012 two loan contracts were executed with JP Morgan, one of them for US$70,015,
within two years and US$64,054, within one year.
(12)
On December 27, 2014 a note payable was signed for $75,000 with JP Morgan with short-term
settlement.
(13)
On December 28, 2013 a note payable was signed for $100,000 with JP Morgan with short-term
settlement.
(14)
On October 4, 2010, a subsidiary contracted an unsecured loan with Banco Inbursa, S. A. Institución
de Banca Múltiple, Grupo Financiero Inbursa for US$ 8,000, loan principal will be settled through six
annual payments of US$ 1,000, together with a payment of US$ 2,000, when the loan matures on
October 4, 2017.
(15)
On December 15, 2010, a subsidiary executed a loan contract for six promissory notes with CitiBank,
N. A. for approximately US$ 48.5 million; this amount becomes payable when requested by the
financial institution. In addition this subsidiary executed a new loan contract for $28.0 million, payable
in May 2014.
Interest rates at December 31, 2014 and 2013 are as follows:
Rate
TIIE (28 days)
LIBOR (1 month)
13.
Currency
2014
2013
Mexican pesos
U.S. dollars
3.50%
0.18%
4.80%
0.23%
Financial instruments
a.
Significant accounting polices
The details of the significant accounting policies and methods adopted (including recognition criteria,
valuation bases and the bases for recognition of revenues and expenses) for each class of financial
asset, financial liability and equity instruments are disclosed in Note 4.
30
b.
Categories of financial instruments
The main categories of financial instruments are:
2014
Financial assets
Loans and receivables
Accounts receivable
Prepaid maintenance
Financial liabilities
At amortized cost:
Accounts payable
c.
$
2,360,283
2013
$
2,622,495
462,915
3,328,996
549,721
413,436
11,207
2,355,717
461,739
13,505,814
1,007,623
619,768
10,457,678
599,285
345,341
Financial risk management objetives
The Entity’s Corporate Treasury function provides services to the business, co-ordinates access to
domestic and international financial markets, monitors and manages the financial risks relating to the
operations of the Entity through internal risk reports which analyze exposures by degree and
magnitude of risks. These risks include market risk (including currency risk, interest rate risk and other
price risk), credit risk.
The Entity seeks to minimize the effects of these risks by using derivative financial instruments to
hedge risk exposures. The use of financial derivatives is governed by the Entity’s policies approved by
the board of directors, which provide written principles on foreign exchange risk, interest rate risk,
credit risk, the use of financial derivatives and non-derivative financial instruments, and the investment
of excess liquidity. Compliance with policies and exposure limits is reviewed by the internal auditors
on a continuous basis. The Entity does not enter into or trade financial instruments, including
derivative financial instruments, for speculative purposes.
The Corporate Treasury function reports quarterly to the Entity’s risk management committee, an
independent body that monitors risks and policies implemented to mitigate risk exposures.
d.
Price risk
As the Entity's main operating cost involves fuel, it is exposed to fluctuations affecting jet fuel prices.
The Entity's strategy focuses on seeking protection from significant and unexpected oil price increases,
while maintaining its competitiveness in the event of price decreases. To fulfill these objectives, it
evaluates the possibility of contracting derivative financial instruments, primarily fuel purchase
options however has hedged the price advances delivering fuel supplier based on previous
consumption.
Based on the decrease of open positions involving fuel purchase options at December 31, 2014 and
2013, the Entity's sensitivity to fluctuating oil prices does not have a significant effect on its results and
stockholders' equity.
31
e.
Foreign currency risk
The Entity essentially obtains its revenues in Mexican pesos. However, given that it also performs
transactions in foreign currency, mainly US dollars, to finance and lease aircraft, engines, information
systems, airport services maintenance and insurance payments, among others, it is subject to
fluctuations in the peso-dollar exchange rate.
The strategy employed to manage this risk centers on monitoring active and passive positions
denominated in US dollars, while seeking the optimum level of exchange rate risk exposure
established by the Treasury area. Likewise, the Entity periodically evaluates the possibility of
contracting derivative financial instruments, while also analyzing hedge costs and the characteristics of
financial instruments which are regularly available on the market. The Entity does not currently have
hedges based on derivative financial instruments.
Note 17 indicates the Entity's foreign currency positions at December 31, 2014 and 2013, together with
the exchange rates in effect at those dates and the transactions performed during the years ended
December 31, 2014 and 2013.
A devaluation/revaluation of 1 peso per dollar, which represents management's evaluation of the
possible change in the exchange rate of these currencies, would represent an increase/decrease in the
Entity 's results and stockholders' equity of approximately $102,000 for the years ended December 31,
2014 and 2013.
The above sensitivity analysis is performed based on the position of financial instruments denominated
in US dollars at December 31, 2014 and 2013; however, it may not represent the exchange rate risk of
the period due to the variance of the Entity's net position in that currency.
f.
Interest rate risk
The Entity has limited its interest rate exposure because all its aircraft capital leases are contracted at a
fixed rate. Other loans contracted with financial institutions to acquire aircraft and working capital are
subject to variable interest rates. However, although the Entity maintains cash equivalents and
variable-rate instruments, given the low materiality of these amounts as regards its financial statement,
it considers the interest rate risk to be insignificant.
When contracting a financial liability, the Entity analyzes the possibility of contracting a fixed or
variable rate by considering contractual requirements, market rate trends and the cost of contracting
fixed rates, among other elements.
Note 12 details the loans contracted with financial instruments at December 31, 2014, December 31,
2013.
An increase/decrease of 100 TIIE rate basis points, which represents management's evaluation of the
possible change to this rate, would result in a decrease/increase of the Entity's results and stockholders'
equity of approximately $15,171 and $19,933 for the years ended December 31, 2014 and 2013,
respectively.
An increase/decrease of 50 LIBOR rate basis points, which represents management's evaluation of the
possible change to this rate, would result in a decrease/increase of the Entity's results and stockholders'
equity of approximately $15,027 and $42,322 for the years ended December 31, 2014 and 2013,
respectively.
32
The above sensitivity analyses are performed based on the portion of variable-rate financial
instruments at December 31, 2014 and 2013. However, they may not represent the Entity's interest rate
risk of the period due to the variance of balances subject to this exposure.
g.
Credit risk management
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in
financial loss to the Entity. The Entity has adopted a policy of only dealing with creditworthy
counterparties and obtaining sufficient collateral, where appropriate, as a means of mitigating the risk
of financial loss from defaults. The Entity only transacts with entities that are rated the equivalent of
investment grade and above. This information is supplied by independent rating agencies where
available and, if not available, the Entity uses other publicly available financial information and its
own trading records to rate its major customers. The Entity’s exposure and the credit ratings of its
counterparties are continuously monitored and the aggregate value of transactions concluded is spread
amongst approved counterparties. Credit exposure is controlled by counterparty limits that are
reviewed and approved by the risk management committee annually.
The credit risk derived from cash and cash equivalents, credit card accounts receivable, maintenance
advances and guarantee deposits is limited because the Entity has the policy of only performing
transactions with parties with high credit ratings and acknowledged prestige.
Accounts receivable are mainly composed by accounts receivable from customers and credit cards. In
the case of customers, the Entity has implemented credit approval and follow-up processes.
Regarding to credit cards, are Entities with high credit ratings, for which received payment within 24
hours and 14 days. Interest is not charged on accounts receivable.
h.
Liquidity risk
The Entity's main source of liquidity is the cash generated by its transactions. Furthermore, in the past,
it has also resorted to the capital contributions of its controlling stockholders and sales contracts
embodying lease obligations to finance aircraft.
As Finance Management is ultimately responsible for managing the Entity's liquidity, it establishes
working capital control and follow-up policies which enable it to administer short, medium and longterm financing requirements. Cash flow statements are periodically prepared to manage risk and
maintain adequate reserves; likewise, the Entity also contracts credit lines and plans its investments.
Note 12 details the financing contracted by the Entity and its maturities. The following table indicates
the contractual maturities of the Entity's financial liabilities; it was prepared based on undiscounted
cash flows at the initial date on which payment could be requested. This table also includes principal
and interest payments, which were determined by using the TIIE and LIBOR spot rates in effect at
December 31, 2014.
December 31, 2014
Notes payable to
financial
institutions
Accounts payable
Other accounts
payable and
accrued expenses
Total
Less than
1 year
More than 1
year and less
than 3
$ 9,460,201
1,007,623
$ 3,687,515
-
619,768
$ 11,087,592
More than 3
years and less
than 5
$
$ 3,687,515
295,272
-
$
$
295,272
$
More than
5 years
Total
-
$ 13,442,988
1,007,623
-
619,768
-
$ 15,070,379
33
i.
Fair value of financial instruments
-
Fair value of financial instruments recorded at their applied cost
The Entity's main financial instruments are valued at their applied cost because they are
composed by accounts receivable and liabilities considered at their applied cost. With the
exception of loans contracted with financial institutions, management considers that the book
values of these financial assets and liabilities reflect their fair values given their nature and
short-term maturities. Furthermore, the Entity also considers that maintenance advances reflect
their fair value because the credit risk of the counterparties to which these advances were paid
has not changed.
At December 31, 2014 and 2013, respectively the fair value of loans contracted with financial
institutions is estimated at approximately $13,442,988 and $11,356,001, respectively.
-
Fair value valuation techniques and assumptions
The fair value of financial assets and liabilities is determined in the following manner:

The fair value of financial assets and liabilities with standard terms and conditions and
which are traded on liquid active markets are determined based on quoted market prices.

The fair value of other assets and liabilities is calculated by using generally accepted
price determination models based on the analysis of undiscounted cash flows.
The fair value of loans contracted with financial institutions was specifically determined by
utilizing a revenue approach and discounting the contractual cash flows of these liabilities at the
current rates estimated by the Entity. These current rates were calculated by considering the
loans most recently contracted by the Entity with financial institutions and which were adjusted
according to the specific conditions of each loan and the respective guarantees. Accordingly,
the Entity utilized the 5.12%, 7.7% rates for loans denominated in Mexican pesos, loans
denominated in US dollars guaranteed by aircraft and unsecured loans denominated in US
dollars, respectively. This valuation is considered as Level 3 according to the hierarchy
described below.
-
Fair value hierarchy
The Entity classifies the fair value valuations recognized in the statement of changes in
financial position by using three hierarchical levels based on valuation data. When a valuation
utilizes information from different levels, the overall valuation is classified at the lowest level
of the relevant data:



Level 1: fair value valuations are those derived from the prices (unadjusted) quoted on
active markets for liabilities or other identical assets;
Level 2: fair value valuations are those derived from indicators other than the quoted
prices included in Level 1, which are observable for the asset or liability, whether
directly (i.e., as prices) or indirectly (i.e., derived from prices); and
Level 3: fair value valuations are those generated by valuation techniques which include
indicators for assets and liabilities that are not based on observable market information
(unobservable indicators).
34
14.
Employee benefits
a.
Net period cost for obligations resulting from the seniority premiums and retirement payments was
$1,656 and $2,314, in 2014 and 2013.
This plan also provides seniority premium benefits, which consist of a lump sum payment of12 days’
wage for each year worked, calculated using the most recent salary, not to exceed twice the minimum
wage established by law. The related liability and annual cost of such benefits are calculated by an
independent actuary on the basis on formulas defined in the plans using the projected unit credit
method.
Other disclosures are considered unimportant in terms of their nature and amount.
15.
2014
Balances as of
January 1 , 2014
$
1,444,173
Increase
$
775,865
Balances as of
December 31 ,
2014
Maintenance
realized (1)
$
-
$
2,220,038
Short
-term
$
510,609
Long
-term
$
1,709,429
2013
Balances as of
January 1 , 2013
$
(1)
16.
1,119,632
Maintenance
realized (1)
Increase
$
324,541
$
-
Balances as of
December 31 ,
2013
$
1,444,173
Short
-term
$
332,160
Long
-term
$
1,112,013
Given the life and flight cycles and other conditions of aircraft and equipment subject to maintenance,
the Bank has not performed maintenance in the periods presented in accordance with the contractual
obligations of the leases.
Stockholders’ equity
a.
Common stock is as follows:
Number of shares
Fixed capital
Series I
Variable capital
Series II
Series III
Series IV
Series V
Series VI
Series VII
Series IX
Total
December 31, 2014
December 31, 2013
10,000
10,000
628,230
1,593,308
2,500,000
5,868,900
14,305,082
6,226,380
474,090
628,230
1,593,308
2,500,000
5,868,900
14,305,082
6,226,380
474,090
31,605,990
31,605,990
35
b.
Capital stock is as follows:
December 31, 2014
Fixed capital
Series I
$
Variable capital
Series II
Series III
Series IV
Series V
Series VI
Series VII
Series IX
Total
17.
10,000
December 31, 2013
$
100,000
92,545
94,875
592,580
10,000
100,000
92,545
94,875
592,580
10,000
$
900,000
10,000
$
900,000
c.
Common stock is composed by shares at no par value; variable capital is unlimited.
d.
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. Any tax paid on this distribution may
be credited against annual and estimated income taxes of the year in which the tax on dividends is paid
and the following two fiscal years.
Foreign currency balances and transactions
a.
As of December 31, the foreign currency monetary position is as follows:
2014
U.S. dollars:
Monetary assets
Monetary liabilities
b.
2013
US
427,737
(862,241)
US
370,600
(702,945)
Net monetary asset position
US
(434,504)
US
(332,345)
Equivalent in Mexican pesos
$
(6,402,330)
$
(4,342,155)
Transactions denominated in foreign currency were as follows:
2014
Aircraft leasing
Information systems
Airport services
Maintenance
Insurance payment
Jet fuel
Publicity
Personnel training
Sales commission
Freight
Honorarium
Divers
US
US
US
US
US
US
US
US
US
US
US
US
194,553
19,602
17,674
78,170
3,963
32,477
6,487
2,921
3,706
5,150
7,508
5,518
2013
US
US
US
US
US
US
US
US
US
US
US
US
162,966
15,707
16,310
69,395
5,004
27,196
7,158
2,663
3,165
7,748
1,762
6,343
36
c.
Mexican peso exchange rates in effect at the dates of the consolidated financial position and at the date
of issuance of these consolidated financial statements were as follows:
2014
U.S. dollar
18.
2013
14.7348
April 30, 2015
13.0652
15.2043
Balances with related parties
a.
Balances with related parties are as follows:
2014
Due from related parties:
Grupo Galem, S. A. de C. V.
$
2013
-
$
11,207
Compensation management personnel
Compensation to directors and other key management during the period was as follows:
2014
Short term benefits
19.
$
2013
-
$
70,415
Income taxes
The Entity is subject to ISR and through December 31, 2013, to ISR and IETU.
ISR -The rate was 30% in 2014 and 2013 and as a result of the new 2014 ISR law (2014Tax Law), the rate
will remain at 30% in 2014 and thereafter.
IETU – IETU was eliminated as of 2014; therefore, up to December 31, 2013, this tax was incurred both on
revenues and deductions and certain tax credits based on cash flows from each year. The rate was 17.5%.
The current income tax is the greater of ISR and IETU up to 2013.
a.
The income tax (benefit) expense is as follows:
2014
b.
Income tax
Deferred tax
$
Income tax
$
2013
15,955
(135,470)
$
(119,515)
$
64,797
64,797
The effective tax rate differs from the statutory rate the, primarily for permanent differences such as
nondeductible expenses.
37
c.
The main items that give rise to a deferred ISR asset are:
2014
Deferred tax assets:
Tax loss carry forwards
Other accounts payable
Employee benefits and other deferred liabilities
Deferred tax assets
$
Deferred tax assets (liabilities):
Inventories
Other assets
Prepaid maintenance
Flight equipment, leasehold improvements
Concession
Deferred tax liabilities
Valuation estimate deferred income tax assets
Deferred tax asset (liability)
d.
$
$
828,215
433,252
157,874
65,450
1,290
1,486,081
(469,738)
(44,338)
(1,016,699)
(396,548)
(9,272)
(1,936,595)
(357,828)
(39,191)
(706,715)
(223,802)
(2,045)
(1,329,581)
(168,328)
(272,677)
19,293
$
(116,177)
The benefits of restated tax loss carryforwards for which the deferred ISR asset has been recognized,
can be recovered subject to certain conditions. Expiration dates and restated amounts as of December
31, 2014, are:
Year of expiration
2017
2018
2019
2022
2023
2024
20.
1,036,495
666,011
233,993
185,930
1,787
2,124,216
2013
2014
$
141,572
1,035,203
119,661
386,741
1,150,712
621,098
$
3,454,987
Operating leases
a.
The Entity has entered into leasing contracts for 24 aircraft and 15 engines as of December 31, 2014,
with different lease periods. The maximum maturity will be in 2021. In some cases, the Entity has the
right to exercise the option to extend the terms of the leases.
The lease agreements are secured by collateral cash deposits, and establish certain requirements for
the Entity, the most important are:
1.
2.
3.
4.
5.
Keep records, licenses and permits required by the competent aviation authority, making the
related payments.
Maintain the equipment according to the respective program.
Insure the equipment in accordance with the amounts and risks set forth in each lease.
Provide financial information.
Meet the technical conditions for the return of aircraft.
38
The Entity also leases the land on which the maintenance base and other facilities are built, which are
in federal areas. The contract has no maturity date.
b.
The spaces at airports are leased to different airport Entitys.
The future minimum payments for operating leases are:
Year
2015
2016
2017
2018
2019
Real estate leases
Aircraft
Engines
$
48,286
48,286
48,286
48,286
48,286
$
1,375,501
1,306,170
1,209,385
1,188,446
1,073,657
$
149,905
66,990
35,057
15,391
15,391
$
241,430
$
6,153,159
$
282,734
These amounts are determined based on the lease amounts and exchange rates known as of end each
year.
The total lease expense is as follows:
2014
Aircraft
Engines
$
1,293,512
218,774
1,512,286
100,115
$
1,100,174
176,087
1,276,261
59,519
$
1,612,401
$
1,335,780
Real estate
21.
2013
Segment information
The Entity assigns resources and evaluates profitability as a single business unit. While the governance entity
with the maximum authority for making the Entity's operating decisions reviews income information based on
different Entitys (such as national and foreign transactions, routes, etc.), the Entity's operating expenses and
assets are fully reported, meaning that it only has one operating segment for reporting purposes according to
IFRS 8, Operating segments.
The income received from foreign customers in specific countries is insignificant. Income is classified as
generated abroad based on the point of departure or arrival of the route in question. Noncurrent assets (other
than financial assets, deferred income taxes and employee benefits) are primarily located in Mexico, while
those located abroad are insignificant.
22.
Authorization of the issuance of the financial statements
On April 30, 2015, the issuance of the consolidated financial statements was authorized by Lic. Luis
Alejandro Beristain Mercado, Chief Finance Officer. These consolidated financial statements are subject to
approval at the ordinary stockholders’ meeting, where they may be modified, based on provisions set forth by
Mexican General Corporate Law.
******
39

ABC Aerolíneas, SA de CV, and Subsidiaries Consolidated

Transcription

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