PAC

Business Context and Reporting Period

Company: Grupo Aeroportuario del Pacifico, S.A.B. de C.V. (Pacific Airport Group)

Filing Type: Form 6-K (Report of Foreign Private Issuer)

Reporting Period: Fourth Quarter ended December 31, 2020 (4Q20) and Twelve Months ended December 31, 2020 (12M20).

Context: The Company operates 12 airports in Mexico and 2 in Jamaica. Results for 4Q20 were significantly impacted by the COVID-19 pandemic, resulting in a 35.5% decrease in total passenger traffic compared to 4Q19. Despite the decline, the Company maintained positive EBITDA and operating cash flow, supported by cost control measures and tariff adjustments.

Key Financial Metrics

Key Margins (4Q20 vs 4Q19):

• EBITDA Margin (excluding IFRIC 12): 66.2% (up from 65.0%)
• Operating Income Margin (excluding IFRIC 12): 47.1% (down from 51.8%)

Material Changes vs. Prior Period

Revenue Decline: Total revenues decreased 48.7% in 4Q20 and 26.9% for the full year 2020. This was driven by a 35.5% drop in passenger traffic (4Q20) and a 43.9% drop for the full year. Aeronautical services revenue fell 27.0% in 4Q20, while non-aeronautical revenue fell 32.4%.

Profitability Impact: Net income decreased 76.2% in 4Q20 and 64.8% for the full year. Comprehensive income turned negative in 4Q20 (loss of Ps. 307.5 million) primarily due to a Ps. 643.3 million currency translation loss, compared to a gain in 4Q19.

Cost Structure: Total operating costs decreased 58.9% in 4Q20, largely due to a Ps. 1.2 billion reduction in costs related to improvements to concession assets (IFRIC 12). Excluding IFRIC 12, operating costs declined 21.5%.

Financial Position: Cash and cash equivalents increased 92.6% year-over-year to Ps. 14.5 billion. Total liabilities increased 36.3% due to the issuance of long-term bonds and bank loans to refinance maturing debt.

Outlook, Risks, and Management Commentary

Management Commentary:

• Recovery Status: Operations began to reactivate in mid-2020, but 4Q20 traffic remained significantly lower than 4Q19. Recovery depends on pandemic containment in Mexico, Jamaica, and the U.S.
• Cost Measures: The Company implemented cost control measures, granted discounts to commercial clients based on traffic decreases, and deferred investments in the Master Development Program for 20 months.
• Asset Review: Management concluded that no significant deterioration of assets is expected and does not foresee business interruption or airport closures.

Risks and Contingencies:

• Pandemic Uncertainty: The Company cannot estimate the short, medium, or long-term impact of the pandemic on financial results.
• Foreign Exchange: Significant volatility in the Mexican peso vs. U.S. dollar impacted financial results, particularly through currency translation effects.
• Financing: The Company cannot predict future availability of financing or general credit conditions.

Recent Events:

• Refinanced US$ 191.0 million in debt maturing in Q1 2021.
• Re-initiated a share repurchase program with a fund of Ps. 1.5 billion.

Investor Verification Checklist

• IFRIC 12 Impact: Verify the exclusion of "Improvements to concession assets" (IFRIC 12) when analyzing operating margins and cash flow, as these are non-cash accounting adjustments that significantly distort total revenue and cost figures.
• Currency Translation: Assess the impact of the Ps. 643.3 million currency translation loss on 4Q20 comprehensive income, which turned a profitable quarter into a comprehensive loss.
• Liquidity vs. Debt: Confirm the sustainability of the Ps. 14.5 billion cash balance against the increased long-term liabilities (up 43.2% YoY) and rising interest expenses.
• Traffic Recovery: Monitor the divergence between domestic and international passenger traffic recovery rates, as international traffic (down 48.6% in 4Q20) remains the primary drag on revenue.
• Share Repurchase: Evaluate the timing and execution of the re-initiated Ps. 1.5 billion share buyback program in the context of current market conditions and cash flow generation.