United states securities and exchange commission

The table below presents the payments required by our financial liabilities:

 

		Year ended December 31, 2016
		Within one Year				One to five Years				In five Years or more				Total
		(In thousands of pesos)
Interest-bearing borrowings
Pre-delivery payment facilities			328,845				943,046				—				1,271,891
Short-term working capital facilities			716,290				—				—				716,290
Derivative financial instruments
Interest rate swaps			14,144				—				—				14,144
Total			1,059,279				943,046				—				2,002,325

Deferred Taxes. We account for income taxes using the liability method. Deferred taxes are recorded based on differences between the financial statement basis and tax basis of assets and liabilities and available tax loss and credit carry-forwards. In assessing our ability to realize deferred tax assets, our management considers whether it is more likely than not that some or all of the deferred tax assets will be realized. In evaluating our ability to utilize our deferred tax assets, we consider all available evidence, both positive and negative, in determining future taxable income on a jurisdiction by jurisdiction basis. At December 31, 2014, 2015 and 2016 we had tax loss carry-forwards amounting to Ps.1.7 billion, Ps.194.5 million and Ps.111.1 million, respectively. These losses relate to our and our subsidiaries’ operations on a stand-alone basis, which in conformity with current Mexican Income Tax Law may be carried forward against taxable income generated in the succeeding ten years and may not be used to offset taxable income elsewhere in our consolidated group. During the years ended December 31, 2014, 2015 and 2016 we used tax-loss carry-forwards of Ps.424.5 million, Ps.1.6 billion and Ps.195.1 million, respectively.

Central America (Guatemala and Costa Rica)

According to Guatemala corporate income tax law, under the regime on profits from business activities net operating losses cannot offset taxable income in prior or future years. For the year ended December 31, 2016, we obtained a net operating loss which has not been recognized as a deferred tax asset. We recognized Ps. 17.2 million of recoverable deferred taxes due to the carryforward tax loss in Costa Rica.

Impairment of Long-Lived Assets. The carrying value of rotable spare parts, furniture and equipment is reviewed for impairment when events or changes in circumstances indicate the carrying value may not be recoverable and the cumulative impairment losses are shown as a reduction in the carrying value of rotable spare parts, furniture and equipment.

We record impairment charges on long-lived assets used in operations when events and circumstances indicate that the assets may be impaired or when the carrying amount of a long-lived asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less cost to sell and its value in use.

The value in use calculation is based on a discounted cash flow model, using our projections of operating results for the near future. The recoverable amount of long-lived assets is sensitive to the uncertainties inherent in the preparation of projections and the discount rate used in the calculation.

For the years ended December 31, 2014, 2015 and 2016, no impairment charges were recorded in respect of our long-lived assets.

Allowance for Doubtful Accounts. An allowance for doubtful accounts receivables is established when there is objective evidence that we will not be able to collect all amounts due according to the original terms of the receivables. At December 31, 2014, 2015 and 2016, the allowance for doubtful accounts was Ps.27.8 million, Ps.24.6 million and Ps.19.3 million, respectively.

 

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Table of Contents

Operating Revenues

2015 compared to 2016

 

		For the years ended December 31,
		2015				2016				Variation
		(In thousands of pesos, except for % and operating data)
Operating Revenues
Passenger			14,130,365				17,790,130				3,659,765				25.9	%
Non-ticket			4,049,339				5,722,321				1,672,982				41.3	%
Total operating revenues			18,179,704				23,512,451				5,332,747				29.3	%
Operating Data
Capacity (in ASMs in thousands)			14,052,298				16,703,949				2,651,651				18.9	%
%Load factor booked			82	%			86	%							4.0p	p
Booked passengers (in thousands)			11,983				15,005				3,022				25.2	%
Average ticket revenue per booked passenger			1,181				1,189				8				0.7	%
Average non-ticket revenue per booked passenger			338				381				43				12.9	%
Revenue passenger miles (RPMs in thousands)			11,561,859				14,325,898				2,764,039				23.9	%