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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