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Overview: | 12 Months Ended
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Dec. 31, 2018
General information about financial statements [Abstract] |
Disclosure of general information about financial statements [text block] | Note 1 - Overview: Grupo Aeroportuario del Sureste, S. A. B. de C. V. (ASUR or Company) is a Mexican Company that was incorporated in April 1998 as a wholly-owned entity of the federal public government to administer, operate, maintain and exploit nine airports in the Southeast of Mexico. The nine airports are located in the following cities: Cancún, Cozumel, Mérida, Huatulco, Oaxaca, Veracruz, Villahermosa, Tapachula and Minatitlán. ASUR and its subsidiaries are collectively referred to as the “Company”, “ASUR” or the “Group”. The Company operates two companies that provide administrative services: Servicios Aeroportuarios del Sureste, S. A. and C. V. and RH Asur, S. A. de C. V. In addition, Cancún Airport has a more than 95% stake in the following subsidiaries: Caribbean Logistic, S. A. de C. V., Cargo RF, S. A. de C. V and Cancún Airport Services, S. A. de C. V., companies providing storage services, handling services, warehousing and custody of foreign trade merchandise and the related to the premises inspected at airports concessioned to third parties, as well as Cancún Airport Services, S. A. de C. V., whose main activity is to establish and operate shops, establishments and stores for the sale of all kinds of products. In June 1998, the Mexican Department of Communications and Transportation (SCT by its Spanish initials) granted to the Company ʼ s subsidiaries concessions to administer, operate, exploit and develop the nine Southeast airports over a period of 50 years commencing on November 1, 1998. The term of the concessions may be extended by the parties under certain circumstances, in accordance with Article 15 of the Airports Law that establishes, among other things: 1) it had fulfilled the conditions set out in the respective title; 2) if requested before the five years of the concession's validity begun, and 3) accept the new conditions. Notwithstanding the Company ʼ s rights to administer, operate, exploit, develop and, if applicable, build the nine airports pursuant to the Mexican General Law of National Assets; all the land, furniture and permanent fixed assets located in the airports are the property of the Mexican federal government. Upon expiration of the Company ʼ s concessions, these assets, including any improvements made during the term of the concessions, automatically revert to the Mexican federal government. Through its subsidiary Aeropuerto de Cancún, on May 26, 2017, the Company increased its shareholding from 50% to 60% in Aerostar Airport Holding, LLC (Aerostar), which operates and manages Aeropuerto Internacional Luis Muñoz Marin (LMM Airport) in San Juan, Puerto Rico. As a result, the Company acquired control of Aerostar, as it now has the capacity to direct its business activities. With this acquisition, the Company expects to continue offering world-class services to its clients and improving operations and client services for the benefit of passengers at the LMM airport. See Note 1.1. On October 19, 2017, the Company acquired 92.42% of the shares of Sociedad Operadora de Aeropuertos Centro Norte, S. A. (Airplan), a company incorporated in Medellín, Colombia, on March 6, 2008 for the sole purpose of subscribing and executing the Concession Agreement for managing, operating, commercially exploiting, conditioning, modernizing and maintaining the Enrique Olaya Herrera in Medellín, José María Córdova in Rionegro, El Caraño in Quibdó, Los Garzones in Montería, Antonio Roldán Betancourt in Carepa and Las Brujas in Corozal airports. As of that date, Airplan consolidates its results into the Company’s financial statements. This acquisition is an important strategic addition that allows ASUR to penetrate the South American market by offering airport services at six airports in Colombia. See Note 1.2. At December 31, 2018, the Company ʼ s outstanding capital stock was held by the investing public (67.46%) and has been placed at securities markets in New York (NYSE) and Mexico (BMV), Inversiones y Técnicas Aeroportuarias, S. A. P. I. de C. V. (ITA) (7.65%), Servicios Estrategia Patrimonial, S. A. de C. V. (7.12%), Agrupación Aeroportuaria Internacional III, S. A. de C. V. (5.46%), and Inversiones Productivas Kierke, S. A. de C. V. (up to June 4, 2018, Remer Soluciones a la Inversión, S. A. de C. V. (12.31%). Shareholding is divided amongst different shareholders, without there being an individual or a particular group that controls the Company directly. On June 4, 2018, Remer Soluciones a la Inversión, S.A. de C. V. was merged into Consorcio Safij, S. A. de C. V. (with the latter as the surviving entity). On August 7, 2018, Consorcio Safij, S. A. de C. V. was merged into Compañía Inmobiliaria y de Inversiones del Noroeste, S. A. de C. V . ( with the latter as the surviving entity ). On October 15, 2018, Compañía Inmobiliaria y de Inversiones del Noroeste, S. A. de C. V. was merged into Inversiones Productivas Kierke, S. A. de C. V. ( with the latter as the surviving entity ) and currently holds 12.31% of the Company’s shares. Relevant event On May 25, 2018, the Company, through the Aeropuerto de Cancún, increased its shareholding in Airplan by acquiring an additional 7.58%, which gave it a 100% interest in that company. See Note 1.2.
| 1.1) | Acquisition of Aerostar
Until May 26, 2017, the Company considered Aerostar to be a joint venture (see Notes 1 and 9); as of June 1, 2017, in accordance with International Financial Reporting Standard 3, “Business combination”, the acquisition is considered a business combination. The following table summarizes the consideration pertaining to Aerostar at combination date or date of the transaction:
|  | May 30, |
|  | 2017 |
Cash paid |  | Ps | 726,628 |
Previous benefit acquired by departure of the previous shareholder |  |  | 848,923 |
Consideration on May 26, 2017 |  |  | 1,575,551 |
Fair value of share capital held in Aerostar prior to the business combination |  |  | 7,877,756 |
Non-controlling interest at the business combination date |  |  | 6,302,205 |
Total purchase consideration |  | Ps | 15,755,512 |
Due to the business combination, the following changes were effected:
| - | The Company estimated a fair value of its previously acquired share capital in Aerostar of 50% at Ps7,877,756, which showed a book value at the date of the transaction of Ps2,353,040. As a result of measuring its interest in Aerostar at fair value, the Company has recognized a nonrecurring profit, unrelated to the cash flow, of Ps5,524,716, which is included as “Gain in business combination” in the consolidated statement of income. The mechanics to determine fair value were based on the use of two methods: a) discounted cash flows and b) implicit multiples (based on a sample of comparable public companies). The most relevant assumptions considered in the first method were the applied discount rate, the projected passenger traffic, and its growth rate and percentages of revenue growth, costs and expenses in the term of the concession; and for the second method, the multiples of income and profit before interest, taxes, amortizations and depreciations and adjustments applied to the net premium of control.
| - | Once the Joint Venture between the Company and Highstar Capital IV (Highstar) was completed, both parties decided to review the income received and contributions made in order to adjust the price to be paid for the 10% acquired by the Company. As a result of the revision, the adjustment to the price was Ps848,923 (included in the line “gain in business combination” of the income statement). The consideration paid at May 26, 2017, includes an amount paid in cash by the Company of Ps726,628 plus the benefit previously acquired for the departure of Highstar. Additionally, as a result of the consolidation of Aerostar at the date of the business combination, the effects of foreign currency translation accrued at the transaction date were recycled, which amounted to Ps655,515. This movement was recorded in the line "gain in business combination" within the consolidated statement of income.
|  | Said gain was presented as an adjacent line where the equity method was recognized, as it is considered associated with said transaction and because the Company does not perform this type of operations as part of its ordinary activities.
| - | During the evaluation of assets stage, an intangible asset derived from the “commercial rights” acquired was identified, representing the rights to commercially exploit the areas of the airport in addition to the aeronautical operation, such as, commercial store leasing and advertising spots, etc., amounting to Ps6,053,820. For its identification, the discounted cash flow method was used to determine the fair value of commercial rights, and the most relevant assumptions considered were the applied discount rate, projected passenger traffic, as well as percentages of revenue, costs and expenses growth during the term of the concession.
| - | Due to the difference resulting from the comparison of the fair values and the book value, a deferred income tax was determined at Ps605,382.
| - | The difference between the net assets acquired in the business combination and the total consideration results in a goodwill of Ps5,606,265 at the business combination date (see Note 8.1). The goodwill associated with this business combination is not deductible for income tax purposes.
| - | An amortization of the intangible identified in the business combination has been determined at Ps98,780 and expensed as part of the depreciation and amortization in the consolidated statement of income.
| - | The non-controlling interest derived from this transaction was determined to be Ps6,302,205. This interest was determined at fair value with references to comparable market values, since Highstar at the same time sold its interest to another Company at the time of the transaction.
In the case of business combinations carried out in stages, International Financial Reporting Standards (IFRS) require that any interest previously held by an acquirer in the acquired entity be adjusted to its fair value at the business combination date, and any gain (or loss) arising from such remeasurement are recognized under gain or loss in the consolidated statement of income. The IFRS also require that any amount previously recognized in comprehensive income relating to such investments be recycled to the consolidated statement of income, as if such investment were sold. The fair value of the Trade and accounts receivable considered in the business combinations approximate their carrying value. Liabilities at the fair value have been calculated at the date of the transaction and correspond mainly to bank loan valuations. At the reporting date, those liabilities were evaluated, and it has been determined that book value is the same as the fair value determined, which was calculated based on their possible settlement. The cash flow required to settle those liabilities is expected to materialize between 1 to 17 years. The liabilities have also been calculated at the fair value at the combination date and are similar to their book value. Following are the fair value of the net assets acquired under the business combination at the acquisition date:
|  | Fair |
Assets |  | value |
CURRENT: |  |  |  |
Cash and cash equivalents |  | Ps | 543,242 |
Restricted cash and cash equivalents |  |  | 16,989 |
Other current assets |  |  | 142,410 |
Current assets |  |  | 702,641 |
NON-CURRENT: |  |  |  |
Land, furniture and equipment |  |  | 135,929 |
Intangible assets, airport concessions - Net |  |  | 19,308,402 |
Total non-current assets |  |  | 19,444,331 |
Total assets |  | Ps | 20,146,972 |
Liabilities |  |  |  |
CURRENT: |  |  |  |
Current liabilities |  | Ps | 647,896 |
NON-CURRENT: |  |  |  |
Long-term debt |  |  | 8,254,620 |
Deferred income tax |  |  | 808,894 |
Other non-current liabilities |  |  | 286,315 |
Total non-current liabilities |  |  | 9,349,829 |
Total liabilities |  |  | 9,997,725 |
Net assets acquired under the business combination |  |  | 10,149,247 |
Total purchase consideration |  |  | 15,755,512 |
Goodwill at the acquisition date (Note 8.1) |  | Ps | 5,606,265 |
The main characteristics of fair value adjustments are described below:
Caption |  | Item |  | Methodology
Intangible assets: |  |  |  |
Commercial rights |  | Commercial exploitation rights |  | Discounted flows and implicit
|  | at the LMM airport |  | multiples using the WACC rate
The fair value adjustments set forth in the previous table were obtained for the purpose of applying the purchase method of the Aerostar acquisition. The noncontrolling interest was recognized as its fair value. The projection used to apply the aforementioned methodologies was based on business plans approved by Aerostar Management. The goodwill recognized by the Company is attributable to the expected growth in the North American airport sector and in line with the Company ʼ s expansion opportunity in the consolidation of additional airport groups. No contingent liability or contingent consideration arrangement has arisen from this acquisition. If the acquisition had taken place on January 1, 2017, pro-forma revenues would have increased by Ps1,549,099 (unaudited) and pro-forma net income by Ps127,042 (unaudited). For the determination of the fair value of the noncontrolling interest, considering the absence of public market prices of Aerostar, the fair value of the controlling party was taken as a basis, which reflects a goodwill of the Company as a whole, including the controlling and noncontrolling parties, thereby better reflecting the economic interests of the transaction given that the noncontrolling party also participated in the future economic benefits generated from the acquisition. Aerostar relevant information and its significant non-controlling interest The Aerostar condensed financial information at December 31, 2017 and 2018, which shows its significant non-controlling interest, is shown below:
|  | Year ended |
|  | December 31 |
Condensed statement of financial position |  |  | 2017 |  |  |  | 2018 |
Cash and cash equivalents |  | Ps | 436,774 |  |  | Ps | 868,095 |
Restricted cash and cash equivalents |  |  | 106,350 |  |  |  | 47,332 |
Other current assets |  |  | 247,517 |  |  |  | 175,479 |
Total current assets |  |  | 790,641 |  |  |  | 1,090,906 |
Financial liabilities: |  |  |  |  |  |  |  |
Current liabilities |  |  | (633,084 | ) |  |  | (640,785 | )
Working capital |  |  | 157,557 |  |  |  | 450,121 |
Land, furniture and equipment |  |  | 141,708 |  |  |  | 174,450 |
Intangible assets, airport concessions - Net |  |  | 13,636,227 |  |  |  | 13,587,071 |
Other long-term assets |  |  | 584 |  |  |  | 544 |
Long-term debt |  |  | (7,489,465 | ) |  |  | (7,282,269 | )
Accounts payable to the Company |  |  | (1,210,088 | ) |  |  | (1,152,805 | )
Other long-term liabilities |  |  |  |  |  |  | (21,608 | )
Deferred income tax - Net |  |  | (267,307 | ) |  |  | (330,999 | )
Shareholders’ equity |  | Ps | 4,969,216 |  |  | Ps | 5,424,505 |
|  | Year ended |
|  | December 31 |
Condensed statements of comprehensive income |  | 2017 |  |  | 2018 |
Revenue |  | Ps | 1,497,557 |  |  | Ps | 3,025,267 |
Operating cost and expenses |  |  | (1,186,028 | ) |  |  | (2,098,323 | )
Other income |  |  |  |  |  |  | 134,637 |
Comprehensive financial cost - Net |  |  | (295,803 | ) |  |  | (538,268 | )
Deferred income tax |  |  | (28,679 | ) |  |  | (62,252 | )
Net (loss) income for the year |  |  | (12,953 | ) |  |  | 461,061 |
Foreign currency translation |  |  | 254,110 |  |  |  | (5,772 | )
Total comprehensive income for the year |  | Ps | 241,157 |  |  | Ps | 455,289 |
Regarding the non-controlling interest in it ʼ s subsidiary Aerostar, there are no significant restrictions on the possibility of having access to the assets or of using them for the payment of obligations.
| 1.2) | Acquisition of Airplan
1) On October 19, 2017 (business combination date, or the transaction date), Cancún acquired 92.42% of the shares of Sociedad Operadora de Aeropuertos Centro Norte, S.A. (Airplan), a Company incorporated in Medellín, Colombia, on March 6, 2008, with the business purpose of managing, operating, commercially exploiting, conditioning, modernizing and maintaining the Enrique Olaya Herrera in Medellín, José María Córdova in Rionegro, El Caraño in Quibdó, Los Garzones in Montería, Antonio Roldán Betancourt in Carepa and Las Brujas in Corozal airports. At the transaction date, Airplan consolidated its results into the Company ʼ s consolidated financial statements. A goodwill of Ps1,474,955 was recognized at the business combination date (see Note 8.1). The goodwill associated with this business combination is not deductible for income tax purposes. The fair value of the Trade and accounts receivable considered in the business combinations approximate their carrying value. The liabilities have been determined at fair value at the date of the combination and correspond mainly to the valuation of bank loans. For the determination of the fair value of the non-controlling interest, comparable market values were used (based on a sample of comparable public companies). The most relevant assumptions considered were multiples of income and earnings before interest, taxes, amortizations and depreciations and adjustments applied to the net premium of control. The following table summarizes the consideration pertaining to Airplan at the business combination date:
|  | October 19 |
|  | 2017 |
Consideration paid on October 19, 2017 |  | Ps | 3,789,797 |
Non-controlling interest at the combination date |  |  | 310,827 |
Total purchase consideration |  | Ps | 4,100,624 |
The distribution of the purchase price over the net assets acquired of Airplan at the business combination date are shown below:
|  | Fair |
Assets |  | value |
CURRENT: |  |  |  |
Cash and cash equivalents |  | Ps | 37,716 |
Other current assets |  |  | 189,372 |
Current assets |  |  | 227,088 |
NON-CURRENT: |  |  |  |
Land, furniture and equipment |  |  | 3,400 |
Intangible assets, airport concessions - Net |  |  | 7,232,588 |
Total non-current assets |  |  | 7,235,988 |
Total assets |  | Ps | 7,463,076 |
Liabilities |  |  |  |
CURRENT: |  |  |  |
Current liabilities |  | Ps | 551,000 |
NON-CURRENT : |  |  |  |
Bank loans |  |  | 3,424,897 |
Deferred income tax |  |  | 861,483 |
Other non-current liabilities |  |  | 27 |
Total non-current liabilities |  |  | 4,286,407 |
Total liabilities |  |  | 4,837,407 |
Net assets acquired under the business combination |  |  | 2,625,669 |
Total consideration |  |  | 4,100,624 |
Goodwill at acquisition date and at acquisition date (Note 8.1) |  | Ps | 1,474,955 |
The main characteristics of fair value adjustments are described below:
Caption |  | Item |  | Methodology
Intangible assets: |  |  |  |
Concession |  | Commercial exploitation rights |  | Discounted flows and implicit
|  | in Airplan |  | multiples using the WACC rate
Non-current liabilities: |  |  |  |
Long-term debt |  | Fair value of the |  | Present value of estimated
|  | Bank loans |  | future cash flows
The fair value adjustments specified in the previous table were obtained from Company Management for the purpose of applying the purchase method to the acquisition of Airplan. The noncontrolling interest was recognized based on the proportional interest in net acquired assets. The projections used to apply the methodologies described above were based on the business plans approved by the Administration of Airplan at the time of acquisition, which subsequently served as the basis for the analysis of deterioration made by the Administration at the date of the consolidated financial statements. The goodwill recognized by the Company represents non-separable assets due to the growth potential and development opportunities of Airplan. No contingent liability has arisen from this acquisition that must be registered; there are also no contingent consideration agreements. If the acquisition had taken place on January 1, 2017, pro-forma revenues would have increased by Ps2,640,493 (unaudited) and pro-forma net income by Ps231,130 (unaudited). 2) On May 25, 2018, the Company increased its shareholding in Airplan by acquiring an additional 7.58%, which gave it a 100% interest in that company. Considering and that on October 19, 2017, a record was made of the acquisition of businesses via the acquisition method established in IFRS 3 using fair value of the overall business determined at the date of acquisition, recording of the operation involving the additional acquisition resulted in recognition within stockholders’ equity of the net effect (definitive values) of the operation, which is analyzed as follows:
|  | May 25, |
|  | 2018 |
Consideration paid for the non-controlling interest |  | Ps | 213,469 |
Carrying value of the non-controlling interest |  |  | (327,003 | )
Difference recognized in stockholders’ equity |  | Ps | 113,534 |

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