Copa Holdings Reports Net Income of US$118.2 Million and EPS of US$2.66 for the Second Quarter of 2014

 Copa Holdings Reports Net Income of US$118.2 Million and EPS of US$2.66 for
                          the Second Quarter of 2014

Excluding special items, adjusted net income came in at $115.9 million, or EPS
of $2.61 per share

PR Newswire

PANAMA CITY, Aug. 6, 2014

PANAMA CITY, Aug. 6, 2014 /PRNewswire/ -- Copa Holdings, S.A. (NYSE: CPA),
today announced financial results for the second quarter of 2014 (2Q14). The
terms "Copa Holdings" or "the Company" refer to the consolidated entity. The
following financial information, unless otherwise indicated, is presented in
accordance with International Financial Reporting Standards (IFRS). See the
accompanying reconciliation of non-IFRS financial information to IFRS
financial information included in financial tables section of this earnings
release. Unless otherwise stated, all comparisons with prior periods refer to
the second quarter of 2013 (2Q13).

OPERATING AND FINANCIAL HIGHLIGHTS

  oCopa Holdings reported net income of US$118.2 million for 2Q14, or diluted
    earnings per share (EPS) of US$2.66. Excluding special items, Copa
    Holdings would have reported an adjusted net income of $115.9 million, or
    $2.61 per share, a 36.4% increase over adjusted net income of US$85.0
    million and US$1.92 per share for 2Q13.
  oOperating income for 2Q14 came in at US$131.2 million, a 34.3% increase
    over operating income of US$97.7 million in 2Q13. Operating margin for
    the period came in at 19.5%, compared to 16.5% in 2Q13, as a result of
    higher unit revenues.
  oTotal revenues increased 13.8% to US$673.6 million. Yield per passenger
    mile increased 1.6% to 16.6 cents and operating revenue per available seat
    mile (RASM) increased 3.7% to 13.3 cents. However, adjusting for a 10.9%
    increase in length of haul, yields increased 6.9% and RASM increased 9.2%.
  oFor 2Q14, passenger traffic (RPMs) grew 12.7% on a 9.7% capacity
    expansion. As a result, consolidated load factor came in at 77.3%, or 2.0
    percentage points above 2Q13.
  oOperating cost per available seat mile (CASM) remained unchanged at 10.7
    cents from 2Q13. However, CASM, excluding fuel costs, decreased 0.9% to
    6.6 cents.
  oCash, short term and long term investments ended 2Q14 at US$1.15 billion,
    representing 42% of the last twelve months' revenues. Of this amount, 46%
    is in Venezuela pending repatriation due to government currency controls.
  oDuring the month of June, Copa Airlines received payment of US$43.3
    million from CENCOEX ("Centro Nacional de Comercio Exterior") in
    Venezuela. The funds corresponded to repatriation requests from January
    and February 2013 and were honored at an exchange rate of 6.30 bolivars
    per dollar. 
  oDuring the second quarter, Copa Airlines took delivery of two Boeing
    737-800 aircraft. As a result, Copa Holdings ended the quarter with a
    consolidated fleet of 93 aircraft.
  oFor 2Q14, Copa Holdings reported consolidated on-time performance of 89.5%
    and a flight-completion factor of 99.8%, maintaining its position among
    the best in the industry.

SUBSEQUENT EVENTS

  oDuring July 2014, Copa Airlines signed a letter of intent agreeing to
    lease three new Boeing 737-800 aircraft and take delivery of these
    aircraft in August, October, and November of 2015.
  oCopa Holdings will pay its third quarter dividend of US$0.96 per share on
    September 15, 2014, on all outstanding Class A and Class B shares, to
    stockholders of record as of August 29, 2014.

^

Consolidated Financial &    2Q14     2Q13     % Change   1Q14     % Change
Operating Highlights
Revenue Passengers Carried  1,890    1,861    1.6%        2,032    -6.9%
('000)
RPMs (mm)                  3,916    3,475    12.7%       3,917    0.0%
ASMs (mm)                  5,067    4,618    9.7%        5,015    1.0%
Load Factor                77.3%    75.3%    2.0 p.p.    78.1%    -0.8 p.p.
Yield                       16.6     16.4     1.6%        17.7     -5.9%
PRASM (US$ Cents)          12.8     12.3     4.3%        13.8     -6.9%
RASM (US$ Cents)           13.3     12.8     3.7%        14.2     -6.6%
CASM (US$ Cents)           10.7     10.7     0.0%        10.7     0.0%
CASM Excl. Fuel (US$        6.6      6.7      -0.9%       6.6      1.3%
Cents)
Breakeven Load Factor ^(1)  60.8%    61.6%    -0.8 p.p.   57.6%    3.2 p.p.
Fuel Gallons Consumed       65.9     60.0     9.8%        65.3     0.9%
(Millions)
Avg. Price Per Fuel Gallon  3.13     3.08     1.5%        3.19     -1.9%
(US$ Dollars)
Average Length of Haul      2,072    1,868    10.9%       1,928    7.5%
(Miles)
Average Stage Length        1,210    1,126    7.5%        1,173    3.1%
(Miles)
Departures                  29,726   29,357   1.3%        30,546   -2.7%
Block Hours                 92,115   84,985   8.4%        91,569   0.6%
Average Aircraft            11.0     10.9     0.7%        11.3     -3.0%
Utilization (Hours)
Operating Revenues (US$     673.6    592.0    13.8%       713.6    -5.6%
mm)
Operating Income (US$ mm)   131.2    97.7     34.3%       177.0    -25.9%
Operating Margin           19.5%    16.5%    3.0 p.p.    24.8%    -5.3 p.p.
Net Income (US$ mm)         118.2    74.4     58.7%       151.4    -21.9%
Adjusted Net Income (US$    115.9    85.0     36.4%       153.6    -24.5%
mm) ^(1)
EPS - Basic and Diluted     2.66     1.68     58.7%       3.41     -21.9%
(US$)
Adjusted EPS - Basic and    2.61     1.92     36.3%       3.46     -24.5%
Diluted (US$) ^(1)
# of Shares - Basic and     44,409   44,387   0.0%        44,403   0.0%
Diluted ('000)
^(1^)Breakeven Load Factor, Adjusted Net Income and Adjusted EPS for 2Q14,
2Q13, and 1Q14 exclude non-cash charges/gains associated with the
mark-to-market of fuel hedges. Additionally, 2Q14 and 1Q14 exclude
charges/gains related to the Venezuelan currency.

Note: Attached to this press release is a reconciliation of non-IFRS financial
measures to the comparable IFRS measures.

FULL 2Q14 EARNINGS RELEASE AVAILABLE FOR DOWNLOAD AT:
http://investor.shareholder.com/copa/results.cfm

2Q14 EARNINGS RESULTS CONFERENCE CALL AND WEBCAST

Date:                         August 7, 2014
Time:                         11:00 AM US ET (10:00 AM Local Time)
Conference telephone number: 877-293-5456 (US Domestic Callers)
                              707-287-9357(International Callers)
Webcast:                      http://investor.shareholder.com/copa/events.cfm
Speakers:                     Pedro Heilbron, Chief Executive Officer
                              Jose Montero, Chief Financial Officer

About Copa Holdings:
Copa Holdings is a leading Latin American provider of passenger and cargo
services. The Company, through its operating subsidiaries, provides service
to 67 destinations in 30 countries in North, Central and South America and the
Caribbean with one of the youngest and most modern fleets in the industry,
consisting of 95 aircraft: 69 Boeing 737NG aircraft and 26 EMBRAER-190s. For
more information visit: www.copaair.com.

CONTACT: Copa Holdings S.A.
Investor Relations:
Ph: (507) 304-2431
www.copaair.com (IR section)

This release includes "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. Such forward-looking
statements are based on current plans, estimates and expectations, and are not
guarantees of future performance. They are based on management's expectations
that involve a number of business risks and uncertainties, any of which could
cause actual results to differ materially from those expressed in or implied
by the forward-looking statements. The Company undertakes no obligation to
update or revise any forward-looking statement. The risks and uncertainties
relating to the forward-looking statements in this release are among those
disclosed in Copa Holdings' filed disclosure documents and are, therefore,
subject to change without prior notice.

CPA-G



Copa Holdings, S.A.
Income Statement - IFRS
(US$ Thousands)
                            Unaudited   Unaudited   %       Unaudited   %
                            2Q14        2Q13        Change  1Q14        Change
Operating Revenues
Passenger Revenue           651,081     568,960     14.4%   691,977     -5.9%
Cargo, mail and other       22,480      23,038      -2.4%   21,629      3.9%
Total Operating Revenue     673,560     591,998     13.8%   713,605     -5.6%
Operating Expenses
Aircraft fuel               205,942     184,767     11.5%   208,014     -1.0%
Salaries and benefits       69,584      66,105      5.3%    73,976      -5.9%
Passenger servicing         65,533      60,389      8.5%    64,118      2.2%
Commissions                 24,467      24,279      0.8%    26,132      -6.4%
Reservations and sales      23,978      24,763      -3.2%   23,853      0.5%
Maintenance, material and   29,301      22,807      28.5%   24,746      18.4%
repairs
Depreciation                27,744      26,866      3.3%    27,821      -0.3%
Flight operations           32,547      30,028      8.4%    31,134      4.5%
Aircraft rentals            28,534      22,124      29.0%   25,315      12.7%
Landing fees and other      13,250      12,789      3.6%    13,253      0.0%
rentals
Other                       21,490      19,393      10.8%   18,246      17.8%
Total Operating Expense     542,369     494,309     9.7%    536,607     1.1%
Operating Income            131,192     97,689      34.3%   176,999     -25.9%
Non-operating Income
(Expense):
Interest expense            (6,876)     (7,560)     -9.1%   (7,094)     -3.1%
Interest income             3,586       2,841       26.2%   3,736       -4.0%
Other, net                  4,107       (10,616)    n/a     67          n/a
Total Non-Operating         817         (15,336)    n/a     (3,291)     n/a
Income/(Expense)
Income before Income Taxes  132,008     82,354      60.3%   173,707     -24.0%
Provision for Income Taxes  13,836      7,912       74.9%   22,350      -38.1%
Net Income                  118,172     74,441      58.7%   151,357     -21.9%
EPS - Basic and Diluted     2.66        1.68        58.7%   3.41        -21.9%
Shares - Basic and Diluted  44,408,515  44,387,279  0.0%    44,402,832  0.0%

Copa Holdings, S.A.
Balance Sheet - IFRS
(US$ Thousands)                            June 30,          December 31,
                                           2014              2013
                                           (Unaudited)     (Audited)
ASSETS
Current Assets:
Cash and cash equivalents                  $    172,103   $    139,108
Short-term investments                     723,808           992,579
Total cash, cash equivalents and           895,911           1,131,687
short-term investments
Accounts receivable, net of allowance for  119,197           132,867
doubtful accounts
Accounts receivable from related parties   2,195             2,189
Expendable parts and supplies, net of      63,806            56,814
allowance for obsolescence
Prepaid expenses                           59,682            59,175
Other current assets                       23,685            22,783
Total Current Assets                       1,164,476         1,405,515
Long-term investments                      253,876           37,590
Property and Equipment:
Owned property and equipment:
Flight equipment                           2,554,756         2,477,830
Other equipment                            84,529            73,487
                                           2,639,285         2,551,317
Less: Accumulated depreciation             (583,042)         (530,347)
                                           2,056,243         2,020,970
Purchase deposits for flight equipment     370,200           327,544
Total Property and Equipment               2,426,443         2,348,514
Other Assets:
Net pension asset                          11,936            11,114
Goodwill                                   25,919            25,305
Intangible asset                           30,968            28,214
Other assets                               98,193            96,509
Total Other Assets                         167,016           161,143
Total Assets                               $  4,011,811    $   3,952,762
LIABILITIES AND SHAREHOLDER'S EQUITY
Current Liabilities:
Current maturities of long-term debt       $    147,649   $    156,329
Accounts payable                           113,697           95,046
Accounts payable to related parties        16,235            14,483
Air traffic liability                      463,283           578,439
Taxes and interest payable                 96,211            113,541
Accrued expenses payable                   72,930            75,975
Other current liabilities                  8,484             8,133
Total Current Liabilities                  918,489           1,041,946
Non-Current Liabilities:
Long-term debt                             895,396           913,507
Post employment benefits liability         6,176             6,223
Other long-term liabilities                65,837            51,223
Deferred tax liabilities                   35,858            37,959
Total Non-Current Liabilities              1,003,267         1,008,912
Total Liabilities                          1,921,756         2,050,858
Shareholders' Equity:
Class A - 33,433,789 shares issued and     22,676            22,626
outstanding
Class B - 10,938,125 shares issued and     7,466             7,466
outstanding
Additional paid in capital                 49,671            47,031
Retained earnings                          2,004,859         1,820,580
Accumulated other comprehensive income     5,383             4,200
(loss)
Total Shareholders' Equity                 2,090,054         1,901,903
Total Liabilities and Shareholders'        $  4,011,811    $   3,952,762
Equity

NON-IFRS FINANCIAL MEASURE RECONCILIATION

This press release includes the following non IFRS financial measures: CASM
Excluding Fuel, Adjusted Net Income and Adjusted EPS. This supplemental
information is presented because we believe it is a useful indicator of our
operating performance and is useful in comparing our performance with other
companies in the airline industry. These measures should not be considered in
isolation, and should be considered together with comparable IFRS measures, in
particular operating income and net income. The following is a reconciliation
of these non-IFRS financial measures to the comparable IFRS measures:



Reconciliation of Net Income
Excluding Special Items                            2Q14      2Q13     1Q13
Net income as Reported                             $118,172  $74,441  $151,357
Special Items (adjustments):
 Unrealized (gain) loss on fuel hedging        (4,105)   10,582   3,373
instruments
 Loss due to devaluation of Venezuelan         1,874     0        (1,178)
Bolivar
Adjusted Net Income                                $115,941  $85,023  $153,553
Shares used for Computation (in thousands)
 Basic and Diluted                             44,409    44,387   44,403
Adjusted earnings per share - Basic and Diluted    2.61      1.92     3.46
Reconciliation Operating Costs per ASM
Excluding Fuel and Special Items                   2Q14      2Q13     1Q14
Operating Costs per ASM as Reported                10.7      10.7     10.7
Aircraft fuel per ASM                              (4.1)     (4.0)    (4.1)
Operating Costs per ASM excluding fuel            6.6       6.7      6.6

SOURCE Copa Holdings, S.A.

Website: http://www.copaair.com
 
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