CEBU AIR, INC.

AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

December 31
2023 2022
ASSETS
Current Assets
Cash and cash equivalents (Note 7) P
=15,595,763,441 =19,175,471,185
P
Restricted cash (Note 7) 1,259,263,375 832,055,494
Derivative financial assets at fair value through other
comprehensive income (FVOCI) (Note 8) – 60,911,157
Receivables (Note 9) 2,542,854,884 2,591,146,276
Expendable parts, fuel, materials and supplies (Note 10) 4,016,293,096 2,532,533,554
Assets held for sale (Note 12) 593,392,422 819,869,232
Other current assets (Note 11) 4,226,450,557 3,783,004,607
Total Current Assets 28,234,017,775 29,794,991,505
Noncurrent Assets
Property and equipment (Notes 12 and 32) 69,979,277,091 64,624,019,956
Right-of-use assets (ROU) (Note 32) 76,100,642,430 43,390,959,427
Investments in joint ventures and associates (Note 13) 300,444,963 221,880,769
Goodwill (Note 14) 721,648,970 721,648,970
Deferred tax assets - net (Note 27) 8,174,363,550 5,566,514,112
Other noncurrent assets (Note 15) 3,674,164,579 2,835,847,733
Total Noncurrent Assets 158,950,541,583 117,360,870,967
TOTAL ASSETS P
=187,184,559,358 =147,155,862,472
P

LIABILITIES AND EQUITY

Current Liabilities
Accounts payable and other accrued liabilities (Note 16) P
=26,545,309,954 P21,814,994,648
=
Unearned transportation revenue (Note 17) 13,761,288,846 11,559,106,245
Current portion of long-term debt (Note 18) 5,093,179,461 3,699,412,710
Current portion of lease liability (Note 32) 9,228,540,715 5,851,121,778
Derivative financial liabilities at fair value through profit or loss (Notes 8 and 19) – 846,835,509
Derivative financial liabilities at fair value through other
comprehensive income (FVOCI) (Note 8) 1,291,971 –
Due to related parties (Note 29) 56,655,756 37,729,742
Income tax payable 2,859,432 –
Total Current Liabilities 54,689,126,135 43,809,200,632
Noncurrent Liabilities
Long-term debt - net of current portion (Note 18) 33,606,572,124 36,680,069,698
Lease liability - net of current portion (Note 32) 73,410,838,256 42,597,441,915
Bonds payable (Note 19) 13,437,715,699 13,423,322,594
Travel fund payable - net of current portion (Note 21) 413,619,080 260,283,120
Retirement liability (Note 26) 893,239,146 759,343,717
Other noncurrent liabilities (Note 20) 5,955,389,072 12,511,343,360
Total Noncurrent Liabilities 127,717,373,377 106,231,804,404
Total Liabilities 182,406,499,512 150,041,005,036
Equity (Capital Deficiency)
Capital stock (Note 22) 944,604,918 943,277,918
Capital paid in excess of par value (Note 22) 20,658,552,243 20,596,009,593
Share-based payments (Note 23) 224,627,690 211,441,630
Treasury stock (Note 22) (950,881,502) (950,881,502)
Other comprehensive income (Note 30) 167,236,789 503,754,596
Deficit (16,266,080,292) (24,188,744,799)
Total Equity (Capital Deficiency) 4,778,059,846 (2,885,142,564)
TOTAL LIABILITIES AND EQUITY P
=187,184,559,358 =147,155,862,472
P

See accompanying Notes to Consolidated Financial Statements

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 CEBU AIR, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Years Ended December 31

2023 2022 2021
REVENUES
Sale of air transportation services
Passenger P
=62,458,245,988 =35,138,497,462
P P6,289,010,220
=
Cargo 4,057,410,639 7,119,561,258 6,471,159,954
Ancillary revenues 24,086,902,129 14,493,307,139 2,980,586,682
90,602,558,756 56,751,365,859 15,740,756,856
EXPENSES
Flying operations (Notes 10 and 24) 35,371,176,877 28,019,925,825 7,097,414,932
Repairs and maintenance (Notes 10, 20 and 24) 13,333,989,671 14,685,821,909 9,653,563,335
Depreciation and amortization (Notes 6, 12 and 32) 13,259,622,656 12,092,864,031 14,355,454,086
Aircraft and traffic servicing (Note 24) 8,286,431,623 5,261,211,374 2,669,596,916
General and administrative (Note 25) 4,354,012,574 3,142,074,591 3,120,089,028
Reservation and sales (Note 24) 3,363,948,674 2,391,683,559 899,253,672
Passenger service 2,390,538,303 1,493,206,278 659,762,025
Aircraft and engine lease (Notes 6 and 32) 1,663,875,974 1,093,428,049 443,481,482
82,023,596,352 68,180,215,616 38,898,615,476

OPERATING INCOME (LOSS) 8,578,962,404 (11,428,849,757) (23,157,858,620)

OTHER INCOME (EXPENSE)
Interest income (Notes 6 and 7) 812,944,468 308,283,217 36,478,759
Gain from insurance claims (Note 12) 17,875,253 6,174,764 138,049,029
Market valuation gains (losses) on derivative
financial instruments – net (Note 8) 880,160,230 977,907,505 (1,318,117,077)
Gain on disposal of property and equipment – net
(Notes 12 and 32) 1,192,144,596 814,206,941 1,388,678,985
Equity in net income (loss) of joint ventures and associates
(Notes 6 and 13) 58,564,194 (113,288,471) (174,431,012)
Impairment loss (Notes 12 and 13) – (86,746,894) (36,915,815)
Foreign exchange losses – net (707,277,753) (3,324,123,371) (1,290,685,244)
Financing costs and other charges:
Financing costs on debt and maintenance provisions
(Notes 8, 18, 19 and 20) (3,011,689,982) (2,230,271,097) (2,017,896,899)
Leases (Note 32) (2,247,857,293) (1,151,655,726) (493,863,414)
(3,005,136,287) (4,799,513,132) (3,768,702,688)
INCOME (LOSS) BEFORE INCOME TAX 5,573,826,117 (16,228,362,889) (26,926,561,308)
BENEFIT FROM INCOME TAX (Note 27) (2,348,838,390) (2,248,975,771) (2,027,958,421)
NET INCOME (LOSS) 7,922,664,507 (13,979,387,118) (24,898,602,887)

OTHER COMPREHENSIVE INCOME (LOSS)

Other comprehensive income (loss) that may be reclassified to profit
or loss in subsequent periods:
Net fair value changes in cash flow hedge reserve (Note 30) (247,666,543) 744,822,569 27,705,335
Tax effect 61,916,636 (186,205,642) (8,311,601)
Other comprehensive income (loss) not to be reclassified to profit or
loss in subsequent periods:
Actuarial gains (losses) on retirement liability (Note 26) (201,023,866) (218,245,939) 210,443,808
Tax effect 50,255,966 54,561,485 (54,723,660)
(336,517,807) 394,932,473 175,113,882
TOTAL COMPREHENSIVE INCOME (LOSS) P
=7,586,146,700 (P
=13,584,454,645) (P
=24,723,489,005)

Earnings (Loss) Per Share (Note 28)

Basic P
=11.64 (P
=23.89) (P
=42.13)
Diluted P
=6.79 (P
=23.89) (P
=42.13)
See accompanying Notes to Consolidated Financial Statements

54 *SGVFS188427*
 CEBU AIR, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (CAPITAL DEFICIENCY)
FOR THE YEARS ENDED DECEMBER 31, 2023, 2022 AND 2021

Other Comprehensive Income (Loss) Retained Earnings (Deficit)

Remeasurement
Capital Paid in Gain (Loss) on
Capital Excess of Par Share-based Retirement Cash Flow Hedge Total
Stock Value Payments Treasury Stock Liability Reserve Appropriated Unappropriated Equity (Capital
(Note 22) (Note 22) (Note 23) (Note 22) (Note 26) (Note 8) Total (Note 22) (Note 22) Total Deficiency)
Balance at January 1, 2023 = 943,277,918 P
P = 20,596,009,593 = 211,441,630
P (P
= 950,881,502) (P
= 54,862,331) = 558,616,927
P = 503,754,596
P = – (P
P = 24,188,744,799) (P
= 24,188,744,799) (P
= 2,885,142,564)
Net income – – – – – – – – 7,922,664,507 7,922,664,507 7,922,664,507
Other comprehensive loss – – – – (150,767,900) (185,749,907) (336,517,807) – – – (336,517,807)
Total comprehensive income (loss) – – – – (150,767,900) (185,749,907) (336,517,807) – 7,922,664,507 7,922,664,507 7,586,146,700
Cost of restricted stock units (RSU) – – 53,434,211 – – – – – – – 53,434,211
Cost of stock options – – 23,621,499 – – – – – – – 23,621,499
Issuance of vested RSUs 1,327,000 62,542,650 (63,869,650) – – – – – – – –
Balance at December 31, 2023 = 944,604,918 P
P = 20,658,552,243 = 224,627,690
P (P
= 950,881,502) (P= 205,630,231) = 372,867,020
P = 167,236,789
P = – (P
P = 16,266,080,292) (P
= 16,266,080,292) P= 4,778,059,846

Balance at January 1, 2022 =942,183,918 P

P =20,544,153,993 =174,824,362
P (P
= 950,881,502) =108,822,123
P =–
P =108,822,123
P =– (P
P = 10,209,357,681) (P
= 10,209,357,681) P10,609,745,213
=
Net loss – – – – – – – – (13,979,387,118) (13,979,387,118) (13,979,387,118)
Other comprehensive income (loss) – – – – (163,684,454) 558,616,927 394,932,473 – – – 394,932,473
Total comprehensive income (loss) – – – – (163,684,454) 558,616,927 394,932,473 – (13,979,387,118) (13,979,387,118) (13,584,454,645)
Cost of restricted stock units (RSU) – – 61,690,810 – – – – – – – 61,690,810
Cost of stock options – – 27,876,058 – – – – – – – 27,876,058
Issuance of vested RSUs 1,094,000 51,855,600 (52,949,600) – – – – – – – –
Balance at December 31, 2022 =943,277,918 P
P =20,596,009,593 =211,441,630
P (P
= 950,881,502) (P
= 54,862,331) =558,616,927
P =503,754,596
P =– (P
P = 24,188,744,799) (P
= 24,188,744,799) (P
= 2,885,142,564)

Balance at January 1, 2021 =613,236,550 P

P =8,405,568,120 =–
P (P
= 950,881,502) (P
= 46,898,025) (P
= 19,393,734) (P
= 66,291,759) P
=12,000,000,000 P =2,689,245,206 P =14,689,245,206 P
=22,690,876,615
Net loss – – – – – – – – (24,898,602,887) (24,898,602,887) (24,898,602,887)
Other comprehensive income – – – – 155,720,148 19,393,734 175,113,882 – – – 175,113,882
Total comprehensive income (loss) – – – – 155,720,148 19,393,734 175,113,882 – (24,898,602,887) (24,898,602,887) (24,723,489,005)
Issuance of preferred shares 328,947,368 12,171,052,616 – – – – – – – – 12,499,999,984
Transaction costs – (32,466,743) – – – – – – – – (32,466,743)
Cost of restricted stock units – – 116,527,033 – – – – – – – 116,527,033
Cost of stock options – – 58,297,329 – – – – – – – 58,297,329
Reversal of appropriations – – – – – – – (12,000,000,000) 12,000,000,000 – –
Balance at December 31, 2021 =942,183,918 P
P =20,544,153,993 =174,824,362
P (P
= 950,881,502) =108,822,123
P =–
P =108,822,123
P =– (P
P = 10,209,357,681) (P
= 10,209,357,681) =10,609,745,213
P

See accompanying Notes to Consolidated Financial Statements

55
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 CEBU AIR, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

Years Ended December 31

2023 2022 2021
CASH FLOWS FROM OPERATING ACTIVITIES
Income (loss) before income tax = 5,573,826,117
P (P
=16,228,362,889) (P
=26,926,561,308)
Adjustments for:
Depreciation and amortization (Notes 6, 12 and 32) 13,259,622,656 12,092,864,031 14,355,454,086
Financing costs and other charges (Notes 6, 18, 19, 20 and 32) 5,259,547,275 3,381,926,823 2,511,760,313
Provision for asset retirement obligation (Note 20) 1,114,586,977 5,285,474,877 3,566,104,161
Provision for heavy maintenance (Note 6, 20 and 24) 235,395,100 1,481,580,686 849,950,290
Unrealized foreign exchange losses – net 417,256,092 2,840,856,561 1,464,946,976
Equity in net loss (income) of joint ventures and associates (Note 13) (58,564,194) 113,288,471 174,431,012
Provision for expected credit losses (Note 9) 28,103,934 3,181,233 130,516,567
Gain on disposal of property and equipment – net (Notes 12 and 32) (1,194,228,055) (828,877,531) (1,450,983,655)
Interest income (Note 7) (812,944,468) (308,283,217) (36,478,759)
Net changes in fair value of derivatives (Note 8) (880,160,230) (977,907,505) 1,318,117,077
Earned and expired portion of travel fund/deferred revenue
on rewards program (Note 21) (509,447,373) (1,121,830,228) (13,740,128)
Share-based payments (Note 23) 77,055,710 89,566,869 174,824,362
Impairment loss on assets held for sale (Note 12) – 86,746,894 –
Impairment loss on investment in an associate (Note 13) – – 36,915,815
Operating income (loss) before working capital changes 22,510,049,541 5,910,225,075 (3,844,743,191)
Decrease (increase) in:
Restricted cash (427,207,881) (54,017,091) 134,032,031
Derivative financial assets – 802,491,663 –
Receivables (316,407,346) (566,898,351) 146,708,730
Expendable parts, fuel, materials and supplies (1,483,759,542) (755,958,485) 129,488,752
Other current assets (552,991,720) (806,764,176) 2,043,268,058
Increase (decrease) in:
Accounts payable and other accrued liabilities 5,606,983,890 5,512,107,776 (250,717,172)
Unearned transportation revenue 2,202,182,600 6,990,465,671 897,172,810
Derivative financial liabilities 28,617,927 – 20,235,264
Amounts due to related parties (4,826,144) 49,834,160 (67,151,950)
Retirement liability (67,128,437) 116,277,342 45,176,068
Other noncurrent liabilities (8,149,290,363) (3,355,751,482) (3,133,622,567)
Cash generated from (used in) operations 19,346,222,525 13,842,012,102 (3,880,153,167)
Interest paid (2,700,873,116) (2,269,121,872) (1,933,873,077)
Interest received 820,655,955 286,747,469 35,168,921
Income tax paid (11,571,990) – −
Net cash provided by (used in) operating activities 17,454,433,374 11,859,637,699 (5,778,857,323)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of property and equipment (Note 12) 10,378,657,499 10,493,214,671 10,705,940,871
Acquisitions of property and equipment (Note 12) (30,499,712,253) (9,782,769,849) (5,506,681,706)
Refund of pre-delivery payments (Note 12) 11,593,934,637 5,807,816,618 5,911,374,086
Additional investment in an associate (Note 13) (20,000,000) – –
Increase in other noncurrent assets (838,316,844) (16,957,642) (682,412,153)
Net cash provided by (used in) investing activities (9,385,436,961) 6,501,303,798 10,428,221,098
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from availment of:
Long-term debt (Note 18) 10,296,833,376 – −
Short-term debt (Note 18) – – 4,234,107,500
Proceeds from issuance of:
Convertible preferred shares (Note 22) – – 12,467,533,241
Convertible bonds (Note 19) – – 11,782,473,335
Payments of:
Long-term debt (Notes 18 and 33) (11,828,548,729) (7,046,553,461) (8,368,272,347)
Short-term debt (Notes 18 and 33) – (5,161,625,000) (4,791,800,000)
Lease liability (Note 32) (9,801,565,676) (7,313,010,731) (6,267,349,863)
Net cash provided by (used in) financing activities (11,333,281,029) (19,521,189,192) 9,056,691,866
EFFECTS OF EXCHANGE RATE CHANGES IN CASH
AND CASH EQUIVALENTS (315,423,128) 1,531,153,073 590,110,620
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (3,579,707,744) 370,905,378 14,296,166,261
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 19,175,471,185 18,804,565,807 4,508,399,546
CASH AND CASH EQUIVALENTS AT END OF YEAR (Note 7) P15,595,763,441
= =19,175,471,185
P =18,804,565,807
P

See accompanying Notes to Consolidated Financial Statements

56 *SGVFS188427*