Volaris Reports Fourth Quarter 2019 Results: 20.2% Operating Margin, up 10.4 percentage points and 7.2% TRASM Increase year over year

Consolidated Statements of Financial Position

As of

January 1^st,
 2017

As of
December 31,
2017

As of
December 31,
2018

Assets

  Property, plant and equipment
    (Right-of-use-assets)

Ps. 

23,713,036

Ps.

25,084,329

Ps.

31,994,579

  Deferred income tax

2,999,021

2,603,243

2,718,850

  Prepaid expenses

(       266,959)

-

-

Liabilities

  Lease liabilities

Ps.

32,711,793

Ps. 

32,523,704

Ps.

39,565,146

  Other liabilities

929,431

1,159,594

1,400,371

  Deferred income tax

20,564

23,548

27,568

Equity

  Retained Earnings

Ps.  

7,216,690

Ps.

6,019,274

Ps. 

6,279,656

Consolidated Statements of Operations

For the year ended
December 31,
2017

For the year ended
December 31,
2018

  Depreciation expense

Ps.

3,526,128

Ps.

4,128,328

  Operating lease expense

(4,807,379)

(5,543,655)

  Operating income

(1,281,251)

(1,415,327)

  Financial costs

1,428,924

1,755,978

  Foreign exchange (gain) loss

(1,476,890)

31,315

  Income tax expense (benefit)

392,795

(111,587)

  Net (income) loss

Ps. 

(936,422)

Ps.

260,379

Controladora Vuela Compañía de Aviación, S.A.B. de C.V. and Subsidiaries

Financial and Operating Indicators

Unaudited

(In Mexican pesos, except otherwise indicated)

Three months
ended December
31, 2019

(US Dollars)*

Three months
ended
December 31,
2019

Three months
ended
December 31,
2018

Variance

(%)

Total operating revenues (millions)

516

9,729

7,909

Total operating expenses (millions)

412

7,762

7,133

8.8%

EBIT (millions)

104

1,967

776

>100%

EBIT margin

20.2%

20.2%

9.8%

10.4 pp

Depreciation and amortization

76

1,439

1,257

14.5%

Aircraft and engine rent expense

8

142

100

42.4%

Net income (loss) (millions)

68

1,287

(610)

NA

Net income (loss) margin

13.2%

13.2%

20.9 pp

Income (loss) per share:

Basic (pesos)

0.07

1.27

(0.60)

NA

Diluted (pesos)

0.07

1.27

(0.60)

NA

Income (loss) per ADS:

Basic (pesos)

0.68

12.72

(6.02)

NA

Diluted (pesos)

0.68

12.72

(6.02)

NA

Weighted average shares outstanding:

Basic

-

1,011,876,677

1,011,876,677

0.0%

Diluted

-

1,011,876,677

1,011,876,677

0.0%

Available seat miles (ASMs) (millions) ⁽¹⁾

-

6,300

5,472

15.1%

     Domestic

-

4,343

3,832

13.3%

     International

-

1,957

1,640

19.4%

Revenue passenger miles (RPMs) (millions) ⁽¹⁾

-

5,521

4,731

16.7%

     Domestic

-

3,888

3,429

13.4%

     International

-

1,633

1,303

25.4%

Load factor ⁽²⁾ 

-

87.6%

86.5%

1.1 pp

     Domestic

-

89.5%

89.5%

0.0 pp

     International

-

79.4%

4.1 pp

Total operating revenue per ASM (TRASM) (cents) ^{(1) (5)}  

8.2

155.0

144.5

7.2%

Total ancillary revenue per passenger ^{(4) (5)}

29.5

557

512

8.8%

Total operating revenue per passenger ⁽⁵⁾

90.3

1,701

1,594

6.8%

Operating expenses per ASM (CASM) (cents) ^{(1) (5)}

6.55

123.5

130.3

Operating expenses per ASM (CASM) (US cents) ^{(3) (5)}

-

6.40

6.57

(2.6%)

CASM ex fuel (cents) ^{(1) (5)} 

4.03

76.0

77.6

(2.1%)

CASM ex fuel (US cents) ^{(3) (5)}

-

3.94

3.92

0.7%

Booked passengers (thousands) ⁽¹⁾

-

5,738

4,963

15.6%

Departures ⁽¹⁾

-

35,261

30,844

14.3%

Block hours ⁽¹⁾

-

89,714

84,569

6.1%

Fuel gallons consumed (millions)

-

65.2

58.7

11.1%

Average economic fuel cost per gallon ⁽⁵⁾

2.4

45.8

49.1

(6.8%)

Aircraft at end of period

-

82

77

6.5%

Average aircraft utilization (block hours)

-

12.8

13.1

(2.6%)

Average exchange rate

-

19.28

19.83

(2.8%)

End of period exchange rate

-

18.85

19.68

(4.3%)

*Peso amounts were converted to U.S. dollars at end of period exchange rate for convenience purposes only

⁽¹⁾ Includes schedule and charter

⁽³⁾ Dollar amounts were converted at average exchange rate of each period

⁽²⁾ Includes schedule                                                                                       

⁽⁴⁾ Includes "Other passenger revenues" and "Non-passenger revenues"

⁽⁵⁾ Excludes non-derivatives financial instruments

Controladora Vuela Compañía de Aviación, S.A.B. de C.V. and Subsidiaries

Financial and Operating Indicators

Unaudited

(In Mexican pesos, except otherwise indicated)

Twelve months
ended December
31, 2019

(US Dollars)*

Twelve months
ended
December 31,
2019

Twelve months
ended

December 31,
2018

Variance
(%)

Total operating revenues (millions)

1,844

34,753

27,305

27.3%

Total operating expenses (millions)

1,613

30,397

26,770

13.5%

EBIT (millions)

231

4,355

535

>100%

EBIT margin

12.5%

12.5%

2.0%

10.5 pp

Depreciation and amortization

288

5,429

4,629

17.3%

Aircraft and engine rent expense

48

911

871

4.5%

Net income (loss) (millions)

140

2,639

(943)

NA

Net income (loss) margin

7.6%

7.6%

(3.5%)

11.1 pp

Income (loss) per share:

Basic (pesos)

0.14

2.61

(0.93)

NA

Diluted (pesos)

0.14

2.61

(0.93)

NA

Income (loss) per ADS:

Basic (pesos)

1.38

26.08

(9.32)

NA

Diluted (pesos)

1.38

26.08

(9.32)

NA

Weighted average shares outstanding:

Basic

-

1,011,876,677

1,011,876,677

0.0%

Diluted

-

1,011,876,677

1,011,876,677

0.0%

Available seat miles (ASMs) (millions) ⁽¹⁾

-

24,499

21,010

16.6%

     Domestic

-

16,891

14,519

16.3%

     International

-

7,607

6,490

17.2%

Revenue passenger miles (RPMs) (millions) ⁽¹⁾

-

21,032

17,748

18.5%

     Domestic

-

14,871

12,655

17.5%

     International

-

6,162

5,093

21.0%

Load factor ⁽²⁾

-

85.9%

84.5%

1.4 pp

     Domestic

-

88.0%

87.2%

0.8 pp

     International

-

81.0%

78.5%

2.5 pp

Total operating revenue per ASM (TRASM) (cents) ^{(1) (5)} 

7.5

142.2

130.0

9.4%

Total ancillary revenue per passenger ^{(4) (5)}

28.2

532

479

11.0%

Total operating revenue per passenger ⁽⁵⁾

84.1

1,585

1,484

6.8%

Operating expenses per ASM (CASM) (cents) ^{(1) (5)}

6.60

124.3

127.4

(2.4%)

Operating expenses per ASM (CASM) (US cents) ^{(3) (5)}

-

6.45

6.62

(2.6%)

CASM ex fuel (cents) ^{(1) (5)}

4.07

76.6

79.2

(3.2%)

CASM ex fuel (US cents) ^{(3) (5)}

-

3.98

4.12

(3.4%)

Booked passengers (thousands) ⁽¹⁾

-

21,975

18,396

19.5%

Departures ⁽¹⁾

-

138,084

117,920

17.1%

Block hours ⁽¹⁾

-

350,572

322,054

8.9%

Fuel gallons consumed (millions)

-

251.8

227.4

10.7%

Average economic fuel cost per gallon ⁽⁵⁾

2.5

46.4

44.6

4.1%

Aircraft at end of period

-

82

77

6.5%

Average aircraft utilization (block hours)

-

12.9

13.2

(2.0%)

Average exchange rate

-

19.26

19.24

0.1%

End of period exchange rate

-

18.85

19.68

(4.3%)

*Peso amounts were converted to U.S. dollars at end of period exchange rate for convenience purposes only

⁽¹⁾ Includes schedule and charter

⁽³⁾ Dollar amounts were converted at average exchange rate of each period

⁽²⁾ Includes schedule

⁽⁴⁾ Includes "Other passenger revenues" and "Non-passenger revenues"

⁽⁵⁾ Excludes non-derivatives financial instruments

Controladora Vuela Compañía de Aviación, S.A.B. de C.V. and Subsidiaries

Consolidated Statement of Operations

Unaudited
(In millions of Mexican pesos)

Three months
ended December
31, 2019
(US Dollars) *

Three months

ended

December 31,

2019

Three months

ended

December 31,
2018

Variance
(%)

Operating revenues:

Passenger revenues

500

9,414

7,643

23.2%

 Fare revenues

349

6,568

5,370

22.3%

 Other passenger revenues ⁽¹⁾

151

2,846

2,273

25.2%

Non-passenger revenues

19

349

265

31.5%

 Other non-passenger revenues ⁽¹⁾

15

285

194

46.7%

 Cargo

3

64

71

(10.2%)

 Non-derivatives financial instruments

(2)

(33)

-

NA

Total operating revenues

516

9,729

7,909

23.0%

Other operating income

(3)

(63)

(147)

(57.1%)

Total fuel expense, net ⁽²⁾

158

2,972

2,885

3.0%

Depreciation and amortization

76

1,439

1,257

14.5%

Landing, take-off and navigation expenses

73

1,384

1,156

19.8%

Salaries and benefits

51

953

795

19.8%

Maintenance expenses

19

360

387

(6.9%)

Sales, marketing and distribution expenses

22

409

422

(3.1%)

Aircraft and engine rent expense

8

142

100

42.4%

Other operating expenses

9

165

278

(40.7%)

Operating expenses

412

7,762

7,133

8.8%

Operating income

104

1,967

776

>100%

Finance income

3

55

44

24.1%

Finance cost

(36)

(675)

(496)

36.2%

Exchange gain (loss), net

24

456

(1,137)

NA

Comprehensive financing result

(9)

(164)

(1,588)

(89.6%)

Income (loss) before income tax

96

1,803

(812)

NA

Income tax (expense) benefit

(27)

(516)

203

NA

Net income (loss)

68

1,287

(610)

NA

* Peso amounts were converted to U.S. dollars at end of period exchange rate for convenience purposes only

⁽¹⁾ 4Q 2018 figures include a reclassification from "Other non-passenger revenues" to "Other passenger revenues" of Ps.54 million, as result of the
IFRS 15 adoption

⁽²⁾ 4Q 2019 figures include a benefit from non-derivatives financial instruments by an amount of Ps.17 million

Controladora Vuela Compañía de Aviación, S.A.B. de C.V. and Subsidiaries

Consolidated Statement of Operations

Unaudited

(In millions of Mexican pesos)

Twelve months
ended December
31, 2019

(US Dollars) *

Twelve months

ended December 31,
2019

Twelve months
ended December
31, 2018

Variance

(%)

Operating revenues:

Passenger revenues

1,788

33,699

26,380

27.7%

 Fare revenues

1,227

23,130

18,488

25.1%

 Other passenger revenues ⁽¹⁾

561

10,569

7,892

33.9%

Non-passenger revenues

60

1,126

925

21.8%

 Other non-passenger revenues ⁽¹⁾

48

898

697

28.7%

 Cargo

12

229

227

0.6%

 Non-derivatives financial instruments

(4)

(73)

-

NA

Total operating revenues

1,844

34,753

27,305

27.3%

Other operating income

(17)

(327)

(622)

(47.4%)

Total fuel expense, net ⁽²⁾

617

11,626

10,135

14.7%

Depreciation and amortization

288

5,429

4,629

17.3%

Landing, take-off and navigation expenses

271

5,108

4,573

11.7%

Salaries and benefits

191

3,601

3,125

15.2%

Maintenance expenses

79

1,488

1,498

(0.6%)

Sales, marketing and distribution expenses

77

1,448

1,501

(3.6%)

Aircraft and engine rent expense

48

911

871

4.5%

Other operating expenses

59

1,113

1,059

5.1%

Operating expenses

1,613

30,397

26,770

13.5%

Operating income

231

4,355

535

>100%

Finance income

11

208

153

36.2%

Finance cost

(120)

(2,270)

(1,876)

21.0%

Exchange gain (loss), net

76

1,441

(104)

NA

Comprehensive financing result

(33)

(622)

(1,827)

(66.0%)

Income (loss) before income tax

198

3,734

(1,293)

NA

Income tax (expense) benefit

(58)

(1,095)

350

NA

Net income (loss)

140

2,639

(943)

NA

* Peso amounts were converted to U.S. dollars at end of period exchange rate for convenience purposes only

⁽¹⁾  December YTD 2018 figures include a reclassification from "Other non-passenger revenues" to "Other passenger revenues" of Ps.271 million,
as result of the IFRS 15 adoption

⁽²⁾ December YTD 2019 figures include a benefit from non-derivatives financial instruments by an amount of Ps.57 million

Controladora Vuela Compañía de Aviación, S.A.B. de C.V. and Subsidiaries

Reconciliation of total ancillary revenue per passenger

The following table shows quarterly additional detail about the components of total ancillary revenue:

Unaudited

(In millions of Mexican pesos)

Three months
ended
December 31,
2019

(US Dollars)*

Three months
ended December 31,
2019

Three months
ended
December 31,
2018

Variance

(%)

Other passenger revenues ⁽¹⁾

151

2,846

2,273

25.2%

Non-passenger revenues ⁽¹⁾

19

349

265

31.5%

Total ancillary revenues

170

3,195

2,539

25.8%

Booked passengers (thousands)

-

5,738

4,963

15.6%

Total ancillary revenue per passenger

29.5

557

512

8.8%

* Peso amounts were converted to U.S. dollars at end of period exchange rate for convenience purposes only

⁽¹⁾ 4Q 2018 figures include a reclassification from "Other non-passenger revenues" to "Other passenger revenues" of Ps.54 million, as result of the
IFRS 15 adoption

The following table shows the December YTD additional detail about the components of total ancillary revenue:

Unaudited

(In millions of Mexican pesos)

Twelve months
ended
December 31,
2019

(US Dollars)*

Twelve months
ended
December 31,
2019

Twelve months
ended
December 31,
2018

Variance

(%)

Other passenger revenues ⁽¹⁾

561

10,569

7,892

33.9%

Non-passenger revenues ⁽¹⁾

60

1,126

925

21.8%

Total ancillary revenues

621

11,696

8,817

32.6%

Booked passengers (thousands)

-

21,975

18,396

19.5%

Total ancillary revenue per passenger

28.2

532

479

11.0%

* Peso amounts were converted to U.S. dollars at end of period exchange rate for convenience purposes only

⁽¹⁾ December YTD 2018 figures include a reclassification from "Other non-passenger revenues" to "Other passenger revenues" of Ps.271 million, as
result of the IFRS 15 adoption

Controladora Vuela Compañía de Aviación, S.A.B. de C.V. and Subsidiaries

Consolidated Statement of Financial Position

(In millions of Mexican pesos)

December 31, 2019
Unaudited

(US Dollars)*

December 31, 2019
Unaudited

December 31, 2018
Unaudited

Assets

Cash and cash equivalents

423

7,980

5,863

Accounts receivable

123

2,320

1,467

Inventories

16

302

297

Prepaid expenses and other current assets

41

781

443

Financial instruments

7

134

62

Guarantee deposits

32

600

791

Total current assets

643

12,117

8,923

Rotable spare parts, furniture and equipment, net

392

7,385

5,782

Right of use assets

1,814

34,190

31,995

Intangible assets, net

9

167

179

Financial instruments

-

3

-

Deferred income taxes

78

1,462

3,312

Guarantee deposits

406

7,644

6,337

Other assets

9

166

155

Other accounts receivable

7

141

74

Total non-current assets

2,715

51,160

47,834

Total assets

3,358

63,277

56,757

Liabilities

Unearned transportation revenue

195

3,680

2,439

Accounts payable

88

1,656

1,103

Accrued liabilities

136

2,557

2,318

Lease liabilities

250

4,721

4,976

Other taxes and fees payable

112

2,102

1,932

Income taxes payable

7

141

4

Financial instruments

-

-

123

Financial debt

111

2,086

1,212

Other liabilities

22

407

26

Deferred income taxes

-

-

28

Total short-term liabilities

921

17,349

14,161

Financial debt

153

2,890

2,311

Accrued liabilities

7

128

137

Lease liabilities

1,900

35,797

34,589

Other liabilities

78

1,470

1,820

Employee benefits

2

38

18

Deferred income taxes

8

156

1,095

Total long-term liabilities

2,148

40,478

39,971

Total liabilities

3,069

57,827

54,132

Equity

Capital stock

158

2,974

2,974

Treasury shares

(9)

(167)

(123)

Contributions for future capital increases

-

-

-

Legal reserve

15

291

291

Additional paid-in capital

100

1,877

1,837

Retained earnings (losses)

19

358

(2,281)

Accumulated other comprehensive income (losses) ⁽¹⁾

6

116

(73)

Total equity

289

5,450

2,625

Total liabilities and equity

3,358

63,277

56,757

Total shares outstanding fully diluted

1,011,876,677

1,011,876,677

* Peso amounts were converted to U.S. dollars at end of period exchange rate for convenience purposes only

⁽¹⁾ As of December 31, 2019, the figures include a negative foreign exchange effect of Ps.14 million related to non-derivatives financial instruments 

Controladora Vuela Compañía de Aviación, S.A.B. de C.V. and Subsidiaries

Consolidated Statement of Cash Flows – Cash Flow Data Summary

Unaudited

(In millions of Mexican pesos)

Three months

ended December
31, 2019

(US Dollars)*

Three months

 ended December
31, 2019

Three months
ended December
31, 2018

Net cash flow generated by operating activities

118

2,228

1,693

Net cash flow used in investing activities

(44)

(823)

(748)

Net cash flow used in financing activities**

(51)

          (960) 

(1,440)

Increase (decrease) in cash and cash equivalents

24

445

(495)

Net foreign exchange differences

(15)

(275)

277

Cash and cash equivalents at beginning of period

414

7,810

6,082

Cash and cash equivalents at end of period

423

7,980

5,863

* Peso amounts were converted to U.S. dollars at end of period exchange rate for convenience purposes only

**Includes aircraft rental payments of Ps.1,713 million and Ps.1,591 million for the three months ended period December 31, 2019 and 2018,
respectively

Controladora Vuela Compañía de Aviación, S.A.B. de C.V. and Subsidiaries

Consolidated Statement of Cash Flows – Cash Flow Data Summary

Unaudited

(In millions of Mexican pesos)

Twelve months

ended December 31,
2019

(US Dollars)*

Twelve months
ended December
31, 2019

Net cash flow generated by operating activities

502

9,469

6,277

Net cash flow used in investing activities

(100)

(1,879)

(1,389)

Net cash flow used in financing activities**

(276)

        (5,199) 

⁽¹⁾           (5,946)

Increase (decrease) in cash and cash equivalents

127

2,391

(1,059)

Net foreign exchange differences

(15)

(274)

(29)

Cash and cash equivalents at beginning of period

311

5,863

6,951

Cash and cash equivalents at end of period

423

7,980

5,863

* Peso amounts were converted to U.S. dollars at end of period exchange rate for convenience purposes only

**Includes aircraft rental payments of Ps.6,500 million and Ps.5,711 million for the twelve months ended period December 31, 2019 and 2018, respectively

⁽¹⁾ Includes inflows of Ps.1,500 million related to the issuance of 15,000,000 asset backed trust notes (certificados bursátiles fiduciarios)

Controladora Vuela Compañía de Aviación, S.A.B. de C.V. and Subsidiaries

The following table shows unaudited adjusted balances after the adoption of IFRS 16 "Leases", on the quarterly statements of operations for each quarter of 2018. These recast amounts were derived from unaudited financial statements included in the quarterly reports on Form 6-K during the year ended December 31, 2018.

Unaudited adjusted figures*

Three months
ended
March 31,
2018

Three months
ended

June 30,

2018

Three months
ended
September
30, 2018

Three months
ended
December 31,
2018

(In millions of Mexican pesos)

Operating revenues:

 Passenger revenues

5,610

5,989

7,138

7,643

26,380

   Fare revenues

3,886

4,136

5,096

5,370

18,488

   Other passenger revenues ⁽¹⁾

1,724

1,853

2,042

2,273

7,892

 Non-passenger revenues

240

240

179

265

925

   Other non-passenger revenues ⁽¹⁾

192

187

124

194

697

   Cargo

48

53

55

71

227

Total operating revenues

5,850

6,229

7,317

7,909

27,305

Other operating income

(1)

(231)

(243)

(147)

(622)

Fuel

2,175

2,445

2,630

2,885

10,135

Landing, take-off and navigation expenses

1,122

1,148

1,147

1,156

4,573

Depreciation and amortization

1,073

1,136

1,163

1,257

4,629

Salaries and benefits

746

750

834

795

3,125

Sales, marketing and distribution expenses

357

382

340

422

1,501

Maintenance expenses

346

376

389

387

1,498

Aircraft and engine rent expense

362

150

259

100

871

Other operating expenses

258

283

240

278

1,059

Operating expenses

6,439

6,439

6,759

7,133

26,770

Operating (loss) income

(589)

(210)

558

776

535

Operating margin

(10.1%)

(3.4%)

7.6%

9.8%

2.0%

Finance income

34

38

37

44

153

Finance cost

(413)

(461)

(506)

(496)

(1,876)

Exchange gain (loss), net

1,563

(1,926)

1,396

(1,137)

(104)

Comprehensive financing result

1,184

(2,350)

927

(1,588)

(1,827)

Income (loss) before income tax

595

(2,560)

1,484

(812)

(1,293)

Income tax (expense) benefit

(177)

747

(423)

203

350

Net income (loss)

417

(1,811)

1,061

(610)

(943)

Earnings (loss) per share:

Basic (pesos)

0.41

(1.79)

1.05

(0.60)

(0.93)

Diluted (pesos)

0.41

(1.79)

1.05

(0.60)

(0.93)

Earnings (loss) per ADS:

Basic (pesos)

4.12

(17.90)

10.49

(6.02)

(9.32)

Diluted (pesos)

4.12

(17.90)

10.49

(6.02)

(9.32)

⁽¹⁾ The annual figures of 2018 include a reclassification from "Other non-passenger revenues" to "Other passenger revenues" of Ps.271 million, as result of the
IFRS 15 adoption

 *Small revisions to the previously estimated amounts reported for the prior year and quarters have been made upon completion of our implementation of IFRS
16 during 2019

Controladora Vuela Compañía de Aviación, S.A.B. de C.V. and Subsidiaries

The following table shows quarterly unaudited adjustments made due to the adoption of IFRS 16 "Leases", on the statements of operations for 2018.

Unaudited adjusted figures*

(In millions of Mexican pesos)

Full Year 2018
(Reported)

Three months
ended March 31,
2018

Three months
ended June 30,
2018

Three months
ended
September 30,
2018

Full Year 2018

Operating revenues:

 Passenger revenues

26,380

-

-

-

-

26,380

   Fare revenues

18,488

-

-

-

-

18,488

   Other passenger revenues ⁽¹⁾

7,892

-

-

-

-

7,892

 Non-passenger revenues

925

-

-

-

-

925

   Cargo

227

-

-

-

-

227

   Other non-passenger revenues ⁽¹⁾

697

-

-

-

-

697

Total operating revenues

27,305

-

-

-

-

27,305

Other operating income

(622)

-

-

-

-

(622)

Fuel

10,135

-

-

-

-

10,135

Aircraft and engine rent expense

6,315

(1,234)

(1,355)

(1,333)

(1,522)

871

Landing, take-off and navigation expenses

4,583

(2)

(2)

(3)

(3)

4,573

Salaries and benefits

3,125

-

-

-

-

3,125

Maintenance expenses

1,518

(5)

(5)

(5)

(5)

1,498

Sales, marketing and distribution expenses

1,501

-

-

-

-

1,501

Other operating expenses

1,130

(17)

(18)

(18)

(18)

1,059

Depreciation and amortization

501

940

1,013

1,048

1,127

4,629

Operating expenses

28,186

(318)

(367)

(311)

(421)

26,770

Operating (loss) income

(881)

318

367

311

421

535

Operating margin

(3.2%)

2.0%

Finance income

153

-

-

-

-

153

Finance cost

(120)

(380)

(430)

(441)

(505)

(1,876)

Exchange (loss) gain, net

(72)

2,255

(2,579)

1,814

(1,521)

(104)

Comprehensive financing result

(40)

1,875

(3,009)

1,373

(2,026)

(1,827)

(Loss) income before income tax

(921)

2,193

(2,642)

1,684

(1,605)

(1,293)

Income tax benefit (expense)

238

(656)

794

(504)

478

350

Net (loss) income

(683)

1,537

(1,848)

1,180

(1,127)

(943)

Basic (loss) earnings per share

(0.67)

1.52

(1.83)

1.17

(1.11)

(0.93)

Diluted (loss) earnings per share

(0.67)

1.52

(1.83)

1.17

(1.11)

(0.93)

⁽¹⁾ The annual figures of 2018 include a reclassification from "Other non-passenger revenues" to "Other passenger revenues" of Ps.271 million, as result of the IFRS 15 adoption

*Small revisions to the previously estimated amounts reported for the prior year and quarters have been made upon completion of our implementation of IFRS 16 during 2019

Controladora Vuela Compañía de Aviación, S.A.B. de C.V. and Subsidiaries

The following table shows unaudited balances before the adoption of IFRS 16 "Leases", on the quarterly statements of
operations for each quarter of 2018.

Unaudited

Three
months
ended March
31, 2018

(Reported)

Three
months
ended June
30, 2018

(Reported)

Three
months
ended
September
30, 2018

(Reported)

Three
months
ended
December
31, 2018

(Reported)

(In millions of Mexican pesos)

Operating revenues:

 Passenger revenues

5,610

5,990

7,138

7,643

26,381

   Fare revenues

3,886

4,137

5,096

5,370

18,489

   Other passenger revenues ⁽¹⁾

1,724

1,853

2,042

2,273

7,892

 Non-passenger revenues

240

240

179

265

924

   Other non-passenger revenues ⁽¹⁾

192

187

124

194

697

   Cargo

49

53

55

71

227

Total operating revenues

5,850

6,230

7,316

7,909

27,305

Other operating income

(1)

(231)

(243)

(147)

(622)

Fuel

2,175

2,445

2,631

2,885

10,135

Aircraft and engine rent expense

1,596

1,504

1,593

1,622

6,315

Landing, take-off and navigation expenses

1,125

1,150

1,150

1,158

4,583

Salaries and benefits

746

750

834

795

3,125

Sales, marketing and distribution expenses

357

382

340

422

1,501

Maintenance expenses

351

381

393

392

1,518

Other operating expenses

274

301

257

297

1,130

Depreciation and amortization

132

124

115

130

501

Operating expenses

6,757

6,805

7,070

7,554

28,186

Operating (loss) income

(906)

(575)

246

355

(881)

Operating margin

(15.5%)

(9.2%)

3.4%

4.5%

(3.2%)

Finance income

34

37

37

45

153

Finance cost

(34)

(31)

(64)

8

(120)

Exchange (loss) gain, net

(691)

653

(419)

384

(73)

Comprehensive financing result

(691)

660

(446)

437

(40)

(Loss) income before income tax

(1,597)

85

(200)

792

(921)

Income tax benefit (expense)

479

(47)

81

(276)

238

Net (loss) income

(1,118)

38

(119)

516

(683)

(Loss) earnings per share:

Basic (pesos)

(1.10)

0.04

(0.12)

0.51

(0.67)

Diluted (pesos)

(1.10)

0.04

(0.12)

0.51

(0.67)

(Loss) earnings per ADS:

Basic (pesos)

(11.05)

0.38

(1.18)

5.10

(6.75)

Diluted (pesos)

(11.05)

0.38

(1.18)

5.10

⁽¹⁾ The annual figures of 2018 include a reclassification from "Other non-passenger revenues" to "Other passenger revenues" of Ps.271 million, as
result of the IFRS 15 adoption

Controladora Vuela Compañía de Aviación, S.A.B. de C.V. and Subsidiaries

Consolidated Statement of Financial Position

The following table shows unaudited annual adjustments made due to the adoption of IFRS 16 "Leases", on the
Consolidated Statement of Financial Position as of December 31, 2018.

Unaudited adjusted figures*

December 31, 2018

(Reported)

IFRS 16

Adjustments

December 31, 2018

Assets

Cash and cash equivalents

5,863

-

5,863

Accounts receivable

1,467

-

1,467

Inventories

297

-

297

Prepaid expenses and other current assets

710

(267)

443

Financial instruments

62

-

62

Guarantee deposits

791

-

791

Total current assets

9,190

(267)