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Volaris announces adjustments in hedging relationships in respect of


PR Newswire | Oct 5, 2020 06:01AM EDT

non-derivative financial instruments, which resulted in a benefit

10/05 05:00 CDT

Volaris announces adjustments in hedging relationships in respect of non-derivative financial instruments, which resulted in a benefit MEXICO CITY, Oct. 5, 2020

MEXICO CITY, Oct. 5, 2020 /PRNewswire/ -- Volaris* (NYSE: VLRS and BMV: VOLAR), the ultra-low-cost airline serving Mexico, the United States and Central America, announces the following adjustments to its hedging relationships in respect of non-derivative financial instruments.

In accordance with IFRS 9, Volaris determined that as of June 30, 2020 certain of its non-derivative financial instruments designated as hedging relationships were no longer effective at offsetting the hedged risk. These accounting changes were due lower jet fuel consumption than anticipated, which was directly related to the adverse affect of COVID-19. The impact of this adjustment for the six months ended June 30, 2020 was a benefit of Ps.120 million in the Company?s net loss for the period. This amount was reclassified from other comprehensive income to comprehensive financial result. Further, Ps.53 million were also reclassified from other comprehensive income to operating expenses as a result of the completion of a forecasted transaction designated in a hedge relationship.

The adjustments are presented below:

Controladora Vuela Compa??a de Aviaci?n, S.A.B. de C.V. and Subsidiaries

Consolidated Statement of Operations

Unaudited adjusted figures Three months ended Three months ended June 30, 2020 Adjustments June 30, 2020(In millions of Mexican pesos) (Reported)

Total operating revenues 1,526 - 1,526

Operating expenses 3,873 (53) 3,820

Operating loss (2,347) 53 (2,294)

Comprehensive financial result (1) 120 119

Income tax benefit 704 (52) 653

Net loss (1,644) 121 (1,523)

Controladora Vuela Compa??a de Aviaci?n, S.A.B. de C.V. and Subsidiaries

Consolidated Statement of Financial Position

Unaudited adjusted figures At June 30, 2020 (Reported) Adjustments At June 30, 2020(In millions of Mexican pesos)

Assets

Total current assets 15,522 - 15,522

Total non-current assets 52,261 (52) 52,209

Total assets 67,783 (52) 67,731

Liabilities

Total short-term liabilities 25,124 - 25,124

Total long-term liabilities 46,827 - 46,827

Total liabilities 71,951 - 71,951

Equity

Capital stock 2,974 - 2,974

Other capital accounts 1,967 - 1,967

Retained losses (2,698) 121 (2,577)

Accumulated other comprehensive losses (6,409) (173) (6,582)

Total equity (4,167) (52) (4,219)

The information included does not provide information on the company's future performance. Volaris' future performance depends on many factors and it cannot be inferred that any period's performance or its comparison year over year will be an indicator of a similar performance in the future.

About Volaris:*("Volaris" or the "Company") (NYSE: VLRS and BMV: VOLAR), is an ultra-low-cost carrier (ULCC), with point-to-point operations, serving Mexico, the United States and Central America. Volaris offers low base fares to build its market, providing quality service and extensive customer choice. Since beginning operations March 2006, Volaris has increased its routes from five to more than 142 and its fleet from four to 84 aircraft. Volaris offers more than 304 daily flight segments on routes that connect 41 cities in Mexico and 21 cities in the United States with one of the youngest fleets in The Americas. Volaris targets passengers who are visiting friends and relatives, cost-conscious business and leisure travelers in Mexico and in selected destinations in the United States and Central America. Volaris has received the ESR Award for Social Corporate Responsibility for eleven consecutive years. For more information, please visit: www.volaris.com

View original content: http://www.prnewswire.com/news-releases/volaris-announces-adjustments-in-hedging-relationships-in-respect-of-non-derivative-financial-instruments-which-resulted-in-a-benefit-301145325.html

SOURCE Volaris






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