ASR

Business Context and Reporting Period

Company: Grupo Aeroportuario del Sureste, S.A.B. de C.V. (ASUR / Southeast Airport Group)
Filing Type: Form 6-K (Report of Foreign Private Issuer)
Reporting Period: Second Quarter (2Q) and First Half (1H) ended June 30, 2014
Business Overview: ASUR operates nine airports in southeast Mexico (including Cancún) and holds a 50% joint venture interest in Aerostar Airport Holdings, LLC, which operates the Luis Muñoz Marín International Airport in San Juan, Puerto Rico.

Key Financial Metrics (2Q14 vs. 2Q13)

Liquidity and Balance Sheet (as of June 30, 2014):

• Cash and Cash Equivalents: Ps.2,351.97 million (up 86.73% from Dec 31, 2013).
• Total Bank Debt: Ps.2,806.42 million (including accrued interest).
• Shareholders' Equity: Ps.17,461.01 million.
• Capital Expenditures (2Q14): Ps.49.21 million.

Material Changes vs. Prior Period

Passenger Traffic: Total traffic increased 10.65% year-over-year in 2Q14 (5.76 million passengers). Domestic traffic rose 11.82%, while international traffic grew 9.74%, driven largely by Cancún Airport.

Revenue Composition:

• Aeronautical Revenues: Increased 7.55% due to higher passenger volumes.
• Non-Aeronautical (Commercial) Revenues: Increased 9.17%, with growth in car rentals (16.60%), food and beverage (14.44%), and retail (9.31%). Duty-free revenues declined 1.24%.
• Construction Services: Declined 47.14% due to lower capital expenditures on concessioned assets.

Net Income Decline: Despite revenue and operating profit growth, Net Income fell 15.24%. This was primarily caused by a Ps.230.60 million increase in income taxes due to:

• The repeal of the IETU tax and the introduction of a new Income Tax Law (rate increased from 28% to 30%) effective Jan 1, 2014.
• The absence of a Ps.47.8 million tax amnesty benefit recorded in 2Q13.

Financing Results: Comprehensive financing results improved from a Ps.65.07 million loss in 2Q13 to a Ps.11.01 million gain in 2Q14, driven by a foreign exchange gain resulting from the appreciation of the Mexican peso against the U.S. dollar.

Guidance, Outlook, and Risks

Management Commentary: Management highlighted strong passenger growth across all airports and improved EBITDA margins. The company noted that commercial revenue per passenger declined slightly (1.42%) in 2Q14 but increased for the first half of the year (1.82%).

Regulatory Environment: ASUR's revenues are subject to regulation by the Mexican Ministry of Communications and Transportation, which sets maximum rates per traffic unit. Regulated revenues accounted for approximately 72.89% of total income in 1H14.

Risks and Contingencies:

• Foreign Exchange: Results are sensitive to the exchange rate between the Mexican peso and the U.S. dollar, affecting both financing costs and the translation of the Puerto Rico joint venture.
• Taxation: Ongoing adjustments to the Mexican tax code (e.g., IETU repeal, rate changes) create volatility in net income.
• Forward-Looking Statements: The filing includes standard disclaimers that actual results may differ from expectations due to various risks.

Investor Verification Checklist

• Tax Impact: Verify the long-term impact of the 2014 Mexican tax reform on future net income margins versus EBITDA.
• Commercial Yield: Monitor the trend in commercial revenue per passenger, which declined in 2Q14 despite traffic growth.
• Construction Capex: Assess the sustainability of revenue growth given the significant drop in construction service revenues (a non-recurring revenue line under IFRIC 12).
• Puerto Rico JV: Review the performance of the Aerostar joint venture in San Juan, noting the translation effects on equity income.
• Debt Servicing: Confirm the company's ability to service Ps.2.8 billion in debt while maintaining high dividend payouts (implied by cash balance changes).