CONTROLADORA VUELA COMPANIA DE AVIACION, S.A.B. DE C.V. FORM 20-F (Annual and Transition Report (foreign private issuer)) Filed 04/30/14 for the Period Ending 12/31/13 Telephone (52) 55-5261-6400 CIK 0001520504 Symbol VLRS SIC Code 4512 - Air Transportation, Scheduled Fiscal Year 12/31 http://www.edgar-online.com © Copyright 2014, EDGAR Online, Inc. All Rights Reserved. Distribution and use of this document restricted under EDGAR Online, Inc. Terms of Use. Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 20-F REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2013 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 OR SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of event requiring this shell company report For the transition period from to Commission file number 001-36059 Controladora Vuela Compañía de Aviación, S.A.B. de C.V. (Exact name of Registrant as specified in its charter) Volaris Aviation Holding Company (Translation of Registrant’s name into English) United Mexican States (Jurisdiction of incorporation or organization) Av. Antonio Dovalí Jaime No. 70, 13 Floor, Tower B Colonia Zedec Santa Fe United Mexican States, D.F. 01210 (Address of principal executive offices) Andres Pliego Rivero Borrell ([email protected]) +52-55-5261-6400 Av. Antonio Dovalí Jaime No. 70, 13 Floor, Tower B, Colonia Zedec Santa Fe United Mexican States, D.F. 01210 (Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person) Securities registered or to be registered pursuant to Section 12(b) of the Act: Title of each class Name of each exchange on which registered American Depositary Shares New York Stock Exchange Ordinary Participation Certificates (Certificados de Participación Ordinarios) New York Stock Exchange Series A shares of common stock, no par value Mexican Stock Exchange Securities registered or to be registered pursuant to Section 12(g) of the Act: None Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report: Ordinary Participation Certificates (Certificados de Participación Ordinarios) : 734, 404, 730 Series A shares of common stock, no par value per share: 877,856,206 Table of Contents Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes No If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes No Note : Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections. Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes No Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. Large accelerated filer Accelerated filer Non -accelerated filer Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing: U.S. GAAP International Financial Reporting Other Standards as issued by the International Accounting Standards Board If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow: Item 17 Item 18 If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No (APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS) Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court: Yes No Table of Contents TABLE OF CONTENTS Page PART I 1 ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS 1 ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE 1 ITEM 3. KEY INFORMATION 1 A. Selected Consolidated Financial Data 1 B. Exchange Rates 4 C. Capitalization and Indebtedness 4 D. Reasons for the Offer and Use of Proceeds 4 E. Risk Factors 4 ITEM 4. INFORMATION ON THE COMPANY 30 A. History and Development of the Company 30 B. Business Overview 36 C. Organizational Structure 53 D. Property, Plants and Equipment 54 ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS 54 A. Operating Results 54 B. Liquidity and Capital Resources 72 C. Research and Development, Patents and Licenses, Etc. 74 D. Trend Information 74 E. Off -Balance Sheet Arrangements 74 F. Tabular Disclosure of Contractual Obligations 75 G. Safe Harbor 75 ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES 75 A. Directors and Senior Management 75 B. Compensation 80 C. Board Practices 81 D. Employees 82 E. Share Ownership 83 ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS 83 A. Major Shareholders 83 B. Related Party Transactions 86 C. Interests of Experts and Counsel 87 ITEM 8. FINANCIAL INFORMATION 88 A. Consolidated Statements and Other Financial Information 88 B. Significant changes 89 ITEM 9. THE OFFER AND LISTING 89 A. Offer and Listing Details 89 B. Plan of Distribution 90 C. Markets 90 D. Selling Shareholders 98 E. Dilution 98 F. Expenses of the Issue 98 ITEM 10. ADDITIONAL INFORMATION 98 A. Share Capital 98 B. Memorandum and Articles of Association 99 C. Material Contracts 109 D. Exchange Controls 109 E. Taxation 110 F. Dividends and Paying Agents 118 i Table of Contents G. Statement by Experts 118 H. Documents on Display 118 I. Subsidiary Information 118 ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK 118 ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES 120 A. Debt Securities 120 B. Warrants and Rights 120 C. Other Securities 120 D. American Depositary Shares 120 PART II 126 ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES 126 ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS 126 A. Use of Proceeds 126 ITEM 15. CONTROLS AND PROCEDURES 126 ITEM 16. [Reserved] 126 ITEM 16A. Audit Committee Financial Expert 126 ITEM 16B. Code of Ethics 127 ITEM 16C. Principal Accountant Fees and Services 127 ITEM 16D. Exemptions from the Listing Standards for Audit Committees 127 ITEM 16E. Purchases of Equity Securities by the Issuer and Affiliated Purchasers 127 ITEM 16F. Change in Registrant ’s Certifying Accountant 127 ITEM 16G. Corporate Governance 128 ITEM 16H. MINE SAFETY DISCLOSURE 133 PART III 133 ITEM 17. FINANCIAL STATEMENTS 133 ITEM 18. FINANCIAL STATEMENTS 133 ITEM 19. EXHIBITS 133 ii Table of Contents FORWARD-LOOKING STATEMENTS AND ASSOCIATED RISKS This annual report on Form 20-F, or our “annual report,” contains certain “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, or the “Exchange Act.” We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends affecting the financial condition of our business. Forward-looking statements should not be read as a guarantee or assurance of future performance or results, and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking statements are based on information available at the time those statements are made and/or management’s good faith belief as of that time with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Important factors that could cause such differences include, but are not limited to: • the competitive environment in our industry; • ability to keep cost low; • changes in our fuel cost, the effectiveness of our fuel cost, hedges and our ability to hedge fuel costs; • the impact of worldwide economic conditions, including the impact of the economic recession on customer travel behavior; • actual or threatened terrorist attacks, global instability and potential U.S. military actions or activities; • ability to generate non -ticket revenues; • external conditions,