OMAB

Business Context and Reporting Period

Company: Central North Airport Group (Grupo Aeroportuario del Centro Norte, S.A.B. de C.V.), trading as OMA (NASDAQ: OMAB; BMV: OMA).

Reporting Period: First Quarter 2013 (ended March 31, 2013).

Business Overview: OMA operates 13 international airports in central and northern Mexico, including major hubs in Monterrey, Acapulco, Mazatlán, and Zihuatanejo. The company also operates the NH T2 hotel within Mexico City International Airport. Financial statements are prepared in accordance with International Financial Reporting Standards (IFRS).

Key Financial Metrics

Material Changes vs. Prior Period

• Passenger Traffic: Total terminal passengers increased 4.6% to 3.0 million. Domestic traffic grew 5.1%, while international traffic grew 2.6%. Significant growth occurred in Monterrey (+8.9%) and Reynosa (+42.9%), offset by declines in Ciudad Juárez (-7.6%) and Zacatecas (-13.5%).
• Revenue Mix: Non-aeronautical revenues surged 20.9%, driven by checked baggage screening, OMA Carga, the NH T2 hotel, and advertising. This marks the 20th consecutive quarter of growth in non-aeronautical revenues. Aeronautical revenues grew 7.5%.
• Flight Operations: Total flight operations decreased 4.3% to 79,393, with domestic operations down 5.2% and international operations up 0.9%.
• Cargo: Air cargo volumes decreased 6.7% due to the exit of some freight consolidators, though cargo revenues increased 40.5% due to business re-composition and increased ground traffic.
• Costs: Total costs and expenses increased 10.3% to Ps. 485 million. Increases were driven by payroll, insurance, and the start of checked baggage screening operations.

Guidance, Outlook, and Risks

2013 Outlook

• Passenger Traffic: Expected to increase 3.5% to 4.5%.
• Revenue Growth: Sum of aeronautical and non-aeronautical revenues expected to increase 8.0% to 10.0%.
• Adjusted EBITDA Margin: Expected to range between 50.5% and 52.0%.
• Capex: Total Master Development Plan (MDP) capex expected to be Ps. 700 million to Ps. 800 million. Diversification investments expected to be Ps. 100 million to Ps. 200 million.

Subsequent Events and Capital Actions

• Capital Reimbursement: Shareholders approved a Ps. 1,200 million capital reimbursement (Ps. 3.00 per share) to be paid in five installments starting June 28, 2013.
• Debt Refinancing: Issued Ps. 1,500 million in 10-year Notes (OMA13) and Ps. 100 million in Commercial Paper. Used proceeds to repay Ps. 300 million in revolving credit.
• Board Changes: Diego Quintana Kawage designated as Chairman of the Board; three new Independent Directors elected.

Risks and Contingencies

• Forward-Looking Statements: Results depend on airline expansion plans, ticket prices, economic conditions, and oil prices.
• Regulatory: Aeronautical revenues are subject to a maximum rate system regulated by the Ministry of Communications and Transportation (SCT).
• Liability: OMA may face joint liability with airlines regarding checked baggage screening damages if willful misconduct is proven.

Investor Verification Checklist

• Verify the sustainability of the 20.9% growth in non-aeronautical revenues, specifically the contribution from the new checked baggage screening operations.
• Monitor the impact of the Ps. 1,200 million capital reimbursement on future liquidity and cash flow availability.
• Assess the performance of airports with significant traffic declines (Ciudad Juárez, Zacatecas) to determine if these are temporary or structural issues.
• Confirm the execution of the Master Development Plan (MDP) projects, particularly the runway rehabilitations and terminal expansions listed in the Capex section.
• Review the debt maturity profile, noting the new 10-year Notes maturing in 2023 and the refinancing of short-term obligations.