The Company is exposed to financial risks that result from changes in interest rates, foreign exchange rates, price risk, liquidity risk and credit risk. The Company controls and maintains the treasury control functions related to transactions and global financial risks through practices approved by its Executive Board and Board of Directors.

This note contains information regarding the Company’s exposure to each of the aforementioned risks, and the objectives, policies and procedures to measure and manage risk.

The Company has contracted bank loans to partially finance its operations. These transactions expose the Company to interest risk, with the main exposure to the risk of variable interest rates resulting from changes in the market base rates (banks charge interest based on London Inter Bank Offered Rate (LIBOR) plus 1.85%) that are applied to the Company’s bank loans maturing in 2022 and 2024.

As of the issuance of the consolidated financial statements in 2017 and 2018, the reference rate used by the Company, i.e., LIBOR, has remained stable. If the LIBOR rate increases or decreases by 2.59 percentage points, the effect on the consolidated statement of income would be an increase or decrease in income of approximately Ps1,476 in 2017.

As of December 31, 2018, there are no LIBOR loans. Therefore risk is considered low, based on the materiality of the possible effect.

The Company is exposed to minor risk for changes in the value of the Mexican Peso against the U. S. Dollar. Historically, a significant portion of income generated by the Company (mainly derived from the fees charged to international passengers) are denominated in U. S. Dollars, and despite that, income is invoiced in Pesos at the average exchange rate of the previous month and likewise the cash flows are collected in Pesos. At December 31, 2017 and 2018, the Company is exposed to exchange rate risk for monetary position, as shown in the next page:

At December 31, 2017 and 2018, the exchange rate was Ps

19.66

and Ps19.65, respectively. Had the currency weakened by 10% in 2017 and 5% in 2018 with respect to the U.S. Dollar, the Company would have had a profit (loss) on monetary position at the close in the amount of Ps192 in 2017 and Ps41.1 in 2018. As of

April 12, 2019, the exchange rate was Ps18.76.

The rate regulation system applicable to the airports of the Company imposes maximum rates for each airport, which should not be exceeded on an annual basis. The maximum rates are the maximum annual income per unit of traffic (one passenger or 100 kg of cargo). If the maximum annual rate is exceed, the government authorities could revoke one or more of the Company’s concessions.

At December 31, 2017 and 2018, approximately 59.09% and 51.07%, of revenue, not including income from construction services, resulted from operations at the Cancún International Airport.

Liquidity risk is the risk that the Company will not be able to meet its funding requirements. The Company’s Management has established policies, procedures and limits of authority that govern the Treasury function. Treasury is responsible for ensuring liquidity and managing the working capital to ensure payments to suppliers, debt servicing and funding of operating costs and expenses.

The following table presents the analysis of the net financial liabilities of the Company based on the period between the date of the statement of consolidated financial position and the maturity date. The amounts presented in the table reflect the undiscounted cash flows, including contractual interest:

Under

Between 3 months

Between 1

Between 2 and

At December 31, 2017

3 months

and one year

and 2 years

5 years

Bank loans and interest

177,080

606,433

880,357

12,146,826

Long-term debt

337,107

317,789

633,140

11,442,620

Suppliers

428,881

Accounts payable and accrued expenses

1,175,306

Under

Between 3 months

Between 1

Between 2 and

At December 31, 2018

3 months

and one year

and 2 years

5 years

Bank loans and interest

14,506

161,009

212,959

6,829,639

Long-term debt

119,680

204,910

208,027

6,749,651

Suppliers

313,577

Accounts payable and accrued expenses

1,557,847

	December 31,
	2017		2018

Current assets	Ps	5,787,862	Ps	6,000,912
Current liabilities		2,408,649		2,408,222

Short term position (liquidity)	Ps	3,379,213	Ps	3,592,690

The financial instruments that are potentially subject to credit risks consist mainly of accounts receivable. Income obtained from fares charged to passengers is not guaranteed and therefore the Company faces the risk of not being able to collect the full amounts invoiced in the event of insolvency of its clients, which are the airlines.

In recent years, some airlines have reported substantial losses, and the income resulting from fares imposed to passengers coming from the main client airlines are not all guaranteed through bonds or other types of guarantees. Therefore, in the event of insolvency of any of the airlines, the Company would have no certainty of recovering the total sum of amounts invoiced to the airlines for passenger fees. In August 2010, Grupo Mexicana filed for bankruptcy. Grupo Mexicana owes the Company Ps128 million pesos for passenger fees. As a result of Grupo Mexicana’s bankruptcy, the Company has increased its reserve for uncollectable accounts by Ps128 million pesos. The Company has determined that it may not be able to collect that amount from Grupo Mexicana.

With this segregation, the Company reduces its collection risk since the airlines that operate under methods b) and c) do not generate accounts receivable.

Cash and cash equivalents are not subject to credit risks since the amounts are kept at financial institutions of good standing, and investments are subject to lower significant risk as they are being backed by the Mexican Federal Government or institutions with AAA high market ratings.

The objective of Management is to safeguard the Company's ability to continue operating as a going-concern in order to provide returns for stockholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.

These activities are monitored through the review of information pertaining to the Company's operation and the Industry. This effort is coordinated by the CEO. Through a planning method, detailed simulations are formulated of identified risks as they are known. The risks identified are valued in terms of probability and impact and are presented to the proper authorities. The result of all these activities is reported to the market through 20-F reports, the sole circular and quarterly reports by a financial risk analysis committee that reports to Company's Board of Directors.

Financial instruments at fair value, presented by levels, in accordance with the valuation method used are included in levels 1 and 2. At December 31, 2017 and 2018, the Company has no financial instruments carried at fair value.

Level 2: Quoted prices for similar instruments in active markets; quoted prices for instruments, identical or similar, in non-active markets and valuations through models where all significant data are observable in the active markets.

The fair value of financial instruments traded in active markets is based on market prices quoted at the consolidated statement of financial position closing date. A market is considered active if quotation prices are clearly and regularly available through a stock exchange, trader, dealer, industry group, price fixing services, or regulatory agency, and those prices reflect regularly and on current bases the market transactions under independent conditions. The quoted price used for the financial assets held by Company’s is the current offer price.