Good day, ladies and gentlemen, and welcome to Assure's third quarter 2026 results conference call. My name is Melissa, and I'll be your operator. At this time, all participants are in a listen-only mode. We will conduct a question and answer session toward the end of today's conference. If you would like to ask a question, please press star 1. If you would like to withdraw your question at any time, please press star 2. If you're using a speakerphone, please lift the handset before making a selection. As a reminder, today's call is being recorded. I'd now like to turn the call over to Mr. David Barlow, Corporate Governance, Strategic Planning Manager, and Investor Relations Officer at ASUR. Please go ahead, sir.

Thank you, Melissa, and thank everyone for joining us today to discuss ASUR results for the third quarter of 2026. With me on today's call is Adolfo Castro, Chief Executive Officer. Additional details about our results can be found in our press release which was issued yesterday after market close and is available on our website. As usual, all comparisons discussed on this call will be year-on-year and all figures are expressed in Mexican pesos unless specified otherwise. As a reminder, certain statements made during the call today may constitute forward-looking statements Thank you, David, and good morning, everyone.

The third quarter marked an important milestone for ASUR. On September the 1st, we completed the acquisition of CPC Aeroportos Promotiva, which added 20 airports over Porto Aforio, the majority of which are located in Brazil. Coupled with our December 2025 acquisition of the U.S. Commercial Operations, we have taken significant actions in the restifying ASUR's operations. In turn, Azur has evolved into the leading international airport operator across the Americas. Today, our portfolio spans 36 airports across seven countries, complemented by commercial operations at three major U.S. airports. To put this scale in perspective, the combined airport portfolio served approximately 120 million passengers in 2025 on a pro forma basis, Up from 70 million were reported last year. We now have much broader business than the Mexican airport group that was established nearly three decades ago. CPC Aeroportos had 17 airports in Brazil, one on each in Ecuador, Costa Rica, and Curaçao. This gave us an established presence in Brazil, Latin America's largest aviation market, and expands our operation into three additional markets. The final purchase price was 5.5 billion Reais or approximately 992 million dollars after customary closing adjustments. Our results for the third quarter include operations solely for the month of September which are consolidated under the region called Brazil and others. As a larger, more diverse company, our operations are now spread across more markets with different passenger profiles, reducing our dependence on one market. It also provides more opportunities to apply the operating and commercial experience we have built up many years. While we do not expect to capture significant operating synergies, our focus now is on implementing Thank you very much. Thank you. Our U.S. commercial business gives us another avenue for growth. At GFK, LAX, at Chicago O'Hare, We are building a platform on non-regulated dollar-denominated commercial revenues. The next major project is the new Terminal 1, expected to be open toward the end of the first quarter next year. We also continue developing commercial expenses at LAX to be ready for the Olympic Games in 2028. The business today is only a small contribution of what we expect the long-term potential of this new business to be. While we are very excited about these new opportunities, at the same time, Mexico remains central of our business and investment program. Within Mexico, Cancún is an important market for us, with significant investments on the way. to improve operational efficiencies and support future growth. We are taking a long-term view of Cancún's development while managing the current operating environment. First, the expected remodeled and expanded Terminal 1 construction will be completed during this fourth quarter, and then we will proceed with the operational readiness and airport transfer to start operations in the first quarter. Terminal 1 will allow us to redistribute passenger flows and relieve pressure of Terminal 2. It will also create additional commercial capabilities and improve passenger experience. We are also investing in Terminal 4, with the project expected to be operational at year-end 2028. This investment will provide 12 additional boarding gates, on top of the 4 we added during 2027, and three more due to the expansion of Terminal 1 and a connecting taxiway and related infrastructure. Our capital allocation continues to balance investment into business to support growth and improve efficiencies with returns to shareholders. There are two extraordinary dividends of $10 each, payable on November 30th and December 23rd this year. Turning to our energy strategy, during the third quarter we began procuring clean energy from a third-party supplier in Mexico. We purchased 13.1 million kilowatt-hours, representing more than 40% of the electricity consumption at our Mexican airports during the quarter. We also began the executive design of additional solar panels in our parking facilities. These are expected to become operational in 2027. and could generate an additional 8 million kWh of renewable energy annually. Our efforts to advance renewable energy also earned recognition during the quarter, with Airport Council International awarding the U.S. Green Airport recognition for our Digital Renewable Energy Management System project. Moving on to passenger traffic, total traffic decreased 1.2% to 20.9 million passengers and includes one-month contribution from Brazil and others. Considering September 2025, data for comparison purposes. Lower traffic in Mexico and Puerto Rico was partially offset by growth in Colombia as they acquired portafolio. Mexico Traffic declined nearly 5%, primarily due to weaker international traffic at El Cú. Growth in domestic traffic across our other eight Mexican airports partially offset this weakness. Airline capacity constraints, including Spirit Airlines bankruptcy, higher jet fuel prices, continue to wait on demand, particularly for international travel. Passenger volumes by region to and from the United States, Europe, South America decreased by 14.9%, 14.4%, 7.9% respectively, while Canada increased by 5.7%. In Puerto Rico, traffic declined slightly over 3% due to continued impact from the bankruptcy of Spirit Airlines. Early May and softness in both domestic and international demand. On a positive note, September showed an improvement with total traffic increasing just over 3%, following declines in July and August. Colombia continued to outperform the rest of the portfolio, with traffic just over 5%, reflecting a strength in both domestic and international traffic, benefiting from better connectivity and healthy demand. Total traffic figures for the quarter also include one-month contributions from operations in Brazil and others, which as a whole increased just over 1% and added nearly 4 million passengers in September. This is mainly driven by low single-digit growth in Brazil and Ecuador, more than offsetting the mid-low single-digit declines in Costa Rica and Curaçao. On a bigger picture macro front, we don't see any near-term improvement as conditions remain challenging. Particularly for international traffic in Mexico, although airlines' schedules for the winter season indicate only more seat capacity for December than a year ago, which is not encouraging for the whole winter season. The September improvement in Puerto Rico is encouraging, while Colombia continues to grow. We remain cautious of the pace of recovery, while at the same time, our focus on supporting the long-term demand fundamentals across our border portfolio. And with CPC, we diminish the dependence in Mexico and basically in one airport. Turning next to the financial performance, as a reminder, the figures I will discuss exclude construction revenue and construction costs, or less otherwise noted. Revenues increased nearly 13% to 7.8 billion pesos. Non-aeronautical revenues grew just under 27%, including 456 million pesos from the U.S. operations, 362 million pesos from the first month of consolidation of Brazil and others, and 16% growth in Colombia, offsetting the softer performance in Mexico and Puerto Rico. Aeronautical revenues were up 5% to $4.8 billion, including a $315 million peso contribution from Brazil and others. Higher passenger traffic supported higher aeronautical revenues in Colombia, while Puerto Rico's aeronautical revenues increased primarily due to the change rate difference. These gains were partially offset by softer traffic in Mexico. Commercial revenue per passenger increased 3.5% to 130.5 pesos, mainly reflecting the contribution of our U.S. commercial operations. Puerto Rico posted the highest commercial revenue per passenger at 163.3 pesos, up 2%, followed by Mexico with 129 pesos. was 10% lower year-on-year, mainly reflecting the lower traffic and passenger mix. Colombia delivered double-digit growth, reaching 65.2 pesos, while Brazil and others added 64.7 pesos in commercial revenues per passenger. We continue expanding our commercial footprint. Over the past 12 months, we opened 39 new commercial spaces across Mexico, Puerto Rico, and Colombia. 31 in Colombia, 7 in Puerto Rico, and 1 in Mexico. Moving on to profitability, consolidated EBITDA increased 1.7% to $4.7 billion. Brazil and others contributed $313 million in September, and our U.S. commercial operations at $49 million in the quarter. This, together with increases of 7% in Puerto Rico driven by a lower operating cost, Adolfo Castro Rivas, Adolfo Castro Rivas, Adolfo Castro Rivas, Adolfo Castro Rivas, for September 2026, while the U.S. reported an EVDA margin close to 11%. Recall this business has a different cost structure from our airport operations, including lease obligations to airport authorities, and the margin is not directly comparable. We also incurring expenses for projects that are not yet generating revenues, including commercial spaces at our U.S., Operations, which are expected to open until 27th and 28th. On the balance sheet, we close the quarter with cash and cash equivalents of 20 billion pesos and a total debt of nearly 70 billion pesos. Of these, 26.5% was denominated in Mexican pesos, 46.4% in U.S. dollars corresponding mainly to Puerto Rico, and 27.1% in Brazilian reais. Net debt of last 12 months in PDA was 2.6 times, up from 0.2 times, reflecting the acquisition, financing, and addition of the debt from the commercial operation in U.S. and Brazilian others. At the quarter end, Cancún Airport placed $1.8 billion senior notes in two tranches, $900 million due in Q in 2031 and $900 million in 2036. These notes carry an investment rating by S&P and Fitch. We use the net proceeds to repay the Fitch facilities for the U.S. and CPC acquisitions, repay the remaining Santander loans, and partially prepaid the PBA loans. This refinancing extends our debt maturities by seven years on average. Lastly, capital expenditures total 2.7 billion pesos during the quarter. With the majority expanded in Mexico as we advance in our mass development program. At yesterday's exchange rate converted to Mexican pesos for each region, next year, we expect to invest close to 6 billion pesos in Mexico, 1.8 billion in Costa Rica, 1.7 billion in Puerto Rico, 1.5 in Brazil, 414 million in our U.S. commercial operations. 230 million in Colombia and 213 in Curaçao. We expect to fund all of these with resources generated by the operation of the region, except for Puerto Rico. This is a total of 11.1 billion pesos. Main projects include the start of the second phase of the expansion of Terminal 4 at Cancún Airport, The beginning of the construction of a second runway at Curitiba Airport to be completed in 2029. Runway refurbishing at Belo Horizonte, Goiana, Teresina and San Luis Airports in Brazil, which is expected to be completed in 2027. Also to be completed in 2027 is the first phase of the terminal expansion at San José Airport in Costa Rica. Also, a hangar relocation that will allow for the second phase expansion of this terminal in 2028. Wrapping up, ASUR is making consistent progress in executing the strategic priorities, optimizing its structure, and further diversifying its geographic operations. We accomplish this in a challenging operating environment, particularly in Mexico, and we remain cautious on the pace of the recovery. At the same time, we completed an important acquisition, obtained approval for a more efficient corporate structure and refinanced our acquisition bridge loans with a long-term debt. Our broader airport portfolio, U.S. commercial platform and continuing investment in capacity provide a source of additional opportunities for long-term growth. We remain focused on operating performance, improving further efficiencies, disciplining capital allocation, and delivering value to our shareholders, including through dividend payments. This ends our prepared remarks. We are ready to take your questions. Please, Melissa, open the floor for questions.

Thank you. We will now begin the question and answer session. To ask a question, dial in by phone and press star then 1 on your touchtone keypad. To make sure your mute function is turned off and if you are using a speakerphone, please make sure to pick up your handset before pressing the star keys. To withdraw your question, press star then 2. Please limit yourself to one question and one follow-up and rejoin the queue if you have additional questions. Our first question comes from the line of Rodolfo Ramos with Berdesco BBR. Please proceed with your question.

Thank you, Adolfo and David, for taking my question. My first one is on traffic, if I may. You know, you sound realistic, but still very cautious regarding the recovery into the winter season. Cancún did a little bit better than Cabo, for example, during the quarter. But can you tell us a little bit more detail as to, you know, how would you break down the decline? Perhaps airline capacity decisions made to loom, you know, what has been driving that decline? And just a little bit more color, if you may, into the first quarter of next year and next year in terms of how you see traffic evolving. And the second, if I may, as a follow-up, Mexico Evita was down almost double-digit. Thank you, Rodolfo. Well, the traffic, as I said,

In my initial remarks, if we see the schedule of the earnings for the winter season, the only month that is up against last year is the case of December. It is not the case for the others, and that is why I'm saying it's not encouraging. The principal problem we see is the case of the United States in terms of the decline Today we have a cocktail of things that are affecting all of these, as you have mentioned. Reduced capacity from the airlines on one side, on the other side also. Jumping into better markets for them in terms of yields. and still affected by the bankruptcy of Spirit. That was important for the case of Mexico, Puerto Rico and Colombia. There are some other negatives in terms of some other regions. That's the case of Europe and the case of South America. The only one that is positive is the case of Canada with 5.7% during the quarter. That remains strong. But the others are not looking well for the winter season. Of course, this is not definitive. The airlines normally adjust their program as the time goes by. But for the moment, what I can say to you is that we are not so happy of what we are seeing. And we don't know when all of this conflict in the Middle East will end and will bring a better outcome for the airlines. In terms of expenses, during the quarter, yes, we had some one-time events. That is the case of expenses related to the positions of CPC related to the generalization of the project, of the technical assistance, and also the case of the bonds. That will not be there in the future. Nevertheless, it's important to say that Next year, in the case of Mexico, we will be affected by the reduction in the working hours that was established by the government from 40 hours during the week to 38. That will give us additional costs during the quarter and also the new operation of Terminal 1. We are taking all Thank you, Adolfo.

Thank you.

Our next question comes from the line of Guillermo Mendez with J.P. Morgan.

Please proceed with your question.

Hey, hello, Adolfo, David. Good morning. Thanks for taking my question. I have a follow-up on the capital allocation discussion. So going forward, there has been news about a sewer potentially interested on the Brasilia airport and some regional airports in Brazil. I just wanted to confirm if that's really the case and if there's anything else that the sewer will be willing to consider at this point in terms of expanding its portfolio. Thank you.

Thank you for your question. For the moment, we are focused on consolidating

Thank you, Adolfo. If I may, a follow-up on also on capital locations is how you think about leverage going forward? What pace of the leverage should we expect as you consolidate the operations?

Well, as I mentioned, in terms of the most important thing that we have in front, which is the CAPEX, the 11.7 billion pesos for next year, all of this should be funded by the cash flow generation in each one of the regions. So we do not expect any more leverage next year.

Got it. Thank you. You're welcome.

Thank you. Our next question comes from the line of Fernando Recchia with BTG Pactual. Please proceed with your question.

Hi, Adolfo. Hi, David. Thank you for taking my question. Two here from our side as well. The first, regarding Motiva ProStability, the airport during the month of September posted a 47% of EBITDA margin. and we know looking for historical level that these airports usually report around 50% so just wanted to understand if it was something as specific for the month of September and margins for these airports should improve or this is like the recurring level we should see going forward and second still on capital location a follow-up Fernando Gerardo Chico Pardo, Rafael Robles Miaja, Martinez Jose Formoso, Adolfo Castro Rivas, Alejandro Pantoja López

We started the operation in September with this 47% dividend margin. I believe that we can do something better in the future. For the moment, I cannot be sure about the 50 you are talking about, but it appears for us that there are some opportunities there. In terms of tagalones, yes, those were included in the whole scheme of the operation with TPC. We are in the process of that. Waiting for some approvals and waiting for final answers in the case of Infraero. So yes, those have been included in the transaction. This to go from the case of Infraero is a 49% confidence and the case of Sureste is a 12.5% confidence and 10.2% in the case of Curacao to reach 90% there.

Thank you, Adolfo.

You're welcome.

Thank you. Our next question comes from the line of Alberto Valerio with UBS. Please proceed with your question.

Hi, Adolfo, Davi.

Thanks so much for the opportunity to make my question. Welcome to Brazil, officially now with Airports Brazil. My question is, My question goes to the Brazilian airports and Central America airports, the new airports. Is there any regulatory commitment of CAPEX for those airports?

Yes, Alberto. As I mentioned, what we are expecting for next year in the case of Brazil, most of this is regulatory. There are some additional projects, but of course those are

And beyond next year, it's a large amount of CAPEX or a small amount of CAPEX to be deployed?

Well, next year is almost the same as, well, 28 is going to be almost the same as 27, and then it reduces.

Okay. Thank you so much. You're welcome.

Thank you.

Our next question comes in line of Pablo Urcalde with Itao BBA. Please proceed with your question.

Hi. Good morning, Adolfo. On the current topic, I don't know if we can provide an update on that internalization process, if it's fair to assume that that will happen. Thank you, Pablo. Well, the process has started and it will take some time. We need some approvals from the Mexican tax authorities and some other approvals. In terms of

Perfect, thank you. It was.

Thank you. Our next question comes from the line of Anton Morton-Cotter with GBM.

Please proceed with your question.

Hi, Adolfo. Thank you for taking my question. I understand Azura appointed a new director for the Brazil region, right, Jose Formoso. I was thinking, what capabilities are you looking to bring to the group through this leadership choice? And also, as you integrate the acquired airports How are you planning to measure success? I mean, which metrics will matter most? Is it commercial revenue per passenger, European efficiencies, return on invested capital? Just looking to better understand your approach there. Thank you.

Yes, of course. Remember that the first objective in the case of the CPC decision was to use the balance sheet to correct the too healthy equity structure we have in the company. Now you can see that we have increased our leverage from 0.2 to 2.6 times last month's net EBITDA. That was the first objective. Of course, in terms of things that we're going to be focused on is the case of the commercial revenues. We believe that there are some opportunities there and also Some operational efficiencies in some of the other airports that are not in Brazil. In the case of the new CEO of Rubasil, Jose Formoso, he has a lot of experience in managing concessions in the first place. In the second one, he has been in Brazil for more than 20 years with a success story.

He was making

A lot of changes with a lot of success in the companies there. So that's what we were focused on also. He knows about how Mexicans think. So that was why we decided to select him as a CEO. And I can say to you that we are extremely happy for the selection we have made.

Thank you, Adolfo.

You're welcome.

Thank you. Our next question comes from the line of Jens Spies with Morgan Stanley. Please proceed with your question.

Yes, hello, Adolfo. One follow-up on the technical efficiency and the reduction in cost. When you're facing the regulator in your next MVP cycle and looking at the reference value model, how will you be treating that reduction in cost? Will there be an impact from the reference value calculation or not?

Well, you know that the regulated regime that has been published in October Okay, so...

Thank you.

Our next question comes from the line of Alan Macias with Bank of America.

Please proceed with your question.

Hi. Good morning and thank you for the call. Just a question on margins on the U.S. operations. If you can provide guidance of what you expect the margins to be in the long term. Thank you.

Alan, thanks for your question. Well, the margin that we reported was 11%. That will increase, of course, as I said during the initial remarks. One of the key elements of this is still pending to start operations, which in the case of the new Terminal 1 has been delayed. Thank you.

You're welcome.

Thank you.

Ladies and gentlemen, as a reminder, if you'd like to join the queue, please press star 1 on your telephone keypad. Our next question is a follow-up from the line of Fernando Recia with BTG Pactual. Please proceed with your question.

Hi, thank you for the follow-up. Just one quick question here. We saw local news today saying that instances for airlines operating Tulum might be postponed. Just wondering if you have any thoughts on this and if this is something that you believe it will happen. Thank you.

Well, the case of Tulum, Fernanda, if you remember, they started operations December 2023 with 40,000 passengers. In 2024, they reached... Adolfo Pardo, Rafael Robles Miaja, But on the other side, it's clear for me that there are some other decisions that have been taken in regards to this airport, which is the case of the domestic market reductions from Aeromexico and also the case of Polaris. So my expectation for next year is that this airport will be around 700,000-800,000 passengers.

Thank you. Our next question is a follow-up from the line of Anton Morton-Cotter with DBM.

Please proceed with your question.

Hi, Adolfo. Thank you for the follow-up. Just a quick one. I was wondering how does the U.S. debt issuance affect the capital structure considered on the Mexican regulatory work calculation?

Mexican regulatory is just for Mexico. That does not include any other operation or any other cost in the equation.

Nor the leverage. Thank you. You're welcome. Thank you.

Thank you. Once again, if you'd like to ask a question, please press star 1 on your telephone keypad.

We'll pause a moment to allow for any others.

Mr. Barlow, it seems that there are no other questions at this time.

I'll turn the floor back to you for final comments.

Thank you, Melissa. And we would like to thank you all again for joining us on today's call. And we look forward to speaking to you again in the next quarter. And please do not hesitate to contact us if you have any further questions.

Thank you. This concludes USTR's third quarter 2026 results call. We would like to thank you for your participation. You may now disconnect your lines.