Excluding special items, adjusted net income came in at US$52.6
million or US$1.20 per share PANAMA CITY, Nov. 12
/PRNewswire-FirstCall/ -- Copa Holdings, S.A. (NYSE:CPA), parent
company of Copa Airlines and Aero Republica, today announced
financial results for the third quarter of 2009 (3Q09). The terms
"Copa Holdings" or "the Company" refer to the consolidated entity,
whose operating subsidiaries are Copa Airlines and Aero Republica.
The following financial and operating information, unless otherwise
indicated, is presented in accordance with U.S. GAAP. Unless
otherwise stated, all comparisons with prior periods refer to the
third quarter of 2008 (3Q08). OPERATING AND FINANCIAL HIGHLIGHTS --
Copa Holdings reported net income of US$43.1 million for 3Q09, or
diluted earnings per share (EPS) of US$0.99, an increase of 86.8%
as compared to net income of US$23.0 million or diluted EPS of
US$0.53 in 3Q08. -- Third quarter 2009 results include a special
charge of US$14.6 million related to the accrual of costs
associated with the retirement of four MD-80 aircraft as a result
of Aero Republica's transition to an all Embraer-190 fleet and a
US$5.1 million non-cash gain associated with the mark-to-market of
fuel hedge contracts. Excluding the impact of these special items,
the company would have reported net income of US$52.6 million and
diluted EPS of US$1.20, an increase of 14.3% over 3Q08 adjusted net
income. See the accompanying reconciliation of non-GAAP financial
information to GAAP financial information included in the financial
tables section of this earnings release. -- Operating income for
3Q09 came in at US$45.9 million, representing an operating margin
of 14.2%, as compared to operating income for 3Q08 of US$57.1
million. Excluding special fleet charges of US$14.6 million,
operating income would have been US$60.5 million, which would have
represented an operating margin of 18.7% for the quarter, up from
16.4% in 3Q08. -- In 3Q09, total revenues reached US$323.7 million,
representing a 7.2% decline, on a 10.7% capacity expansion. Yield
per passenger mile decreased 14.2% to 15.9 cents and operating
revenue per available seat mile (RASM) decreased 16.2% to 12.7
cents. -- Revenue passenger miles (RPMs) increased 8.5% from 1.78
billion in 3Q08 to 1.93 billion in 3Q09, and available seat miles
(ASMs) increased 10.7% from 2.30 billion in 3Q08 to 2.55 billion in
3Q09, with the Copa Airlines segment increasing 11.6% and Aero
Republica increasing 6.0%. Consolidated load factor decreased 1.5
percentage points to 75.8%. Underlying Break-even load factor for
3Q09 decreased 4.8 percentage points to 59.7% from 64.5% in 3Q08.
-- Operating cost per available seat mile (CASM), decreased 14.0%
from 12.7 cents in 3Q08 to 10.9 cents in 3Q09. Excluding special
charges, CASM would have decreased 18.5% from 12.7 cents in 3Q08 to
10.3 cents in 3Q09. CASM, excluding fuel costs and special charges,
would have decreased 1.4% from 7.3 cents in 3Q08 to 7.2 cents in
3Q09. -- Cash, short term and long term investments ended the
quarter at US$376.3 million, representing 30% of the last twelve
months' revenues. During the quarter the Company made pre-delivery
payments for future aircraft deliveries in the amount of $43.6
million. -- Copa Holdings ended the quarter with a consolidated
fleet of 55 aircraft. Copa Airlines' fleet consisted of 43
aircraft, including 28 Boeing 737 Next Generation and 15
Embraer-190's. Aero Republica's fleet consisted of 12 aircraft,
including 11 Embraer-190's and one MD-80. -- For 3Q09, Copa
Airlines reported on-time performance of approximately 87.1% and a
flight-completion factor of 99.2%, maintaining its position among
the best in the industry. RECENT DEVELOPMENTS -- On October 6, Aero
Republica announced daily flights to Quito, Ecuador from Bogotá,
Colombia beginning December 20, 2009. With the addition of this
destination, Aero Republica will now provide service to three
international destinations from seven Colombian cities. -- On
October 12, the Panamanian government authorities presented
Aerotocumen S.A. the order to proceed with the Phase 2 expansion
project of Tocumen International Airport. This project, which
represents an investment of approximately US$70 million and is
expected to be completed in early 2011, involves the expansion from
22 to 34 international gates and will consolidate Tocumen Airport
as the most complete and convenient hub facility for intra- Latin
America travel. Consolidated Financial & Operating Highlights
3Q09 3Q08 % Change 2Q09 % Change RPMs (millions) 1,930 1,779 8.5%
1,676 15.2% ASMs (mm) 2,545 2,300 10.7% 2,438 4.4% Load Factor
75.8% 77.3% -1.5 p.p. 68.7% 7.1 p.p. Yield 15.9 18.6 -14.2% 15.6
2.0% PRASM (cents) 12.1 14.4 -15.9% 10.7 12.5% RASM (cents) 12.7
15.2 -16.2% 11.4 11.7% CASM (cents) 10.9 12.7 -14.0% 9.9 10.5%
Adjusted CASM (cents) (1) 10.3 12.7 -18.5% 9.9 4.7% CASM Excl. Fuel
(cents) 7.7 7.3 6.5% 7.1 9.7% Adjusted CASM Excl. Fuel (cents) (1)
7.2 7.3 -1.4% 7.1 1.6% Breakeven Load Factor (3) 59.7% 64.5% -4.8
p.p. 59.7% 0.0 p.p. Operating Revenues (US$ mm) 323.7 348.9 -7.2%
277.6 16.6% EBITDAR (US$ mm) (2) 79.6 57.1 39.5% 91.2 -12.6%
Adjusted EBITDAR (US$ mm) (2)(3) 89.2 80.0 11.5% 64.1 39.1% EBITDAR
Margin (2) 24.6% 16.4% 8.2 p.p. 32.8% -8.2 p.p. Adjusted EBITDAR
Margin (2)(3) 27.5% 22.0% 5.6 p.p. 23.1% 4.5 p.p. Operating Income
(US$ mm) 45.9 57.1 -19.6% 36.8 24.9% Adjusted Operating Income (US$
mm) (1) 60.5 57.1 6.0% 36.8 64.6% Operating Margin 14.2% 16.4% -2.2
p.p. 13.2% 0.9 p.p. Adjusted Operating Margin (1) 18.7% 16.4% 2.3
p.p. 13.2% 5.5 p.p. Net Income (US$ mm) 43.1 23.0 87.8% 55.2 -21.8%
Adjusted Net Income (US$ mm) (3) 52.6 45.8 14.9% 28.1 87.4% EPS -
Basic (US$) 1.00 0.53 87.1% 1.27 -21.8% Adjusted EPS - Basic (US$)
(3) 1.21 1.06 14.5% 0.65 87.4% EPS - Diluted (US$) 0.99 0.53 86.8%
1.26 -21.8% Adjusted EPS - Diluted (US$) (3) 1.20 1.05 14.3% 0.64
87.3% Weighted Avg. # of Shares - Basic (000) 43,344 43,195 0.3%
43,338 0.0% Weighted Avg. # of Shares - Diluted (000) 43,710 43,491
0.5% 43,685 0.1% (1) Adjusted Operating Income, Adjusted Operating
Margin and Adjusted CASM for 3Q09 exclude special charges related
to the accrual of costs associated with the retirement of four
MD-80 aircraft as a result of Aero Republica's transition to an all
Embraer-190 fleet. (2) EBITDAR means earnings before interest,
taxes, depreciation, amortization and rent. (3) Adjusted EBITDAR,
Adjusted EBITDAR Margin, Breakeven Load Factor and Adjusted Net
Income and Adjusted EPS (Basic and Diluted) exclude: a) For 3Q09,
exclude special charges related to the accrual of costs associated
with the retirement of four MD-80 aircraft as a result of Aero
Republica's transition to an all Embraer-190 fleet and b) For 3Q09,
3Q08 and 2Q09 exclude non-cash charges/gains associated with the
mark-to-market of fuel hedges. Note: Attached to this press release
is a reconciliation of non-GAAP financial measures to the
comparable U.S. GAAP measures. Full 3Q09 earnings release available
for download at: http://investor.shareholder.com/copa/results.cfm
3Q09 EARNINGS RESULTS CONFERENCE CALL AND WEBCAST Date: November
13, 2009 Time: 11:00 a.m. EST (11:00 a.m. Panama Time) Conference
Call: Telephone Number: 888-437-9315 (U.S. Domestic Callers)
719-325-2122 (International Callers) Webcast Link:
http://investor.shareholder.com/copa/events.cfm About Copa Holdings
Copa Holdings, through its Copa Airlines and Aero Republica
operating subsidiaries, is a leading Latin American provider of
passenger and cargo service. Copa Airlines currently offers
approximately 144 daily scheduled flights to 45 destinations in 24
countries in North, Central and South America and the Caribbean. In
addition, Copa Airlines provides passengers with access to flights
to more than 120 other international destinations through code
share agreements with Continental Airlines and other airlines. Aero
Republica, the second-largest domestic carrier in Colombia,
provides service to 12 cities in Colombia as well as international
connectivity with Copa Airlines' Hub of the Americas through
flights from Barranquilla, Bogota, Bucaramanga, Cali, Cartagena,
Medellin and Pereira. Additionally, Aero Republica has direct
flights to Caracas, Venezuela from the cities of Bogota and
Cartagena. CONTACT: Copa Holdings S.A. Investor Relations: Ph:
(507) 304-2677 e-mail: http://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. Copa Holdings, S.A. NON-GAAP FINANCIAL
MEASURE RECONCILIATION This press release includes the following
non GAAP financial measures: Adjusted CASM, Adjusted CASM Excluding
Fuel, Adjusted EBITDAR, Adjusted Operating Income, 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 U.S. GAAP measures, in particular operating income and
net income. The following is a reconciliation of these non-GAAP
financial measures to the comparable U.S. GAAP measures:
Reconciliation of EBITDAR Excluding Special Items 3Q09 3Q08 2Q09
Net income as Reported $43,139 $22,974 $55,162 Interest Expense
(8,090) (10,385) (8,520) Capitalized Interest 141 391 233 Interest
Income 2,217 2,903 2,211 Income Taxes (3,168) (1,745) (3,115) EBIT
52,039 31,810 64,353 Depreciation and Amortization 11,926 11,132
11,966 EBITDA 63,965 42,942 76,319 Aircraft Rent 11,911 10,245
11,487 Other Rentals 3,772 3,926 3,345 EBITDAR $79,648 $57,113
$91,150 Special Items (adjustments): Unrealized (gain) loss on fuel
hedging instruments (1) (5,089) 22,848 (27,069) Special fleet
charges (2) 14,599 - - Adjusted EBITDAR $89,158 $79,961 $64,081
Reconciliation of Operating Income Excluding Special Items 3Q09
3Q08 2Q09 Operating Income as Reported $45,900 $57,073 $36,751
Special Items (adjustments): Special fleet charges (2) 14,599 - -
Adjusted Operating Income $60,499 $57,073 $36,751 Reconciliation of
Net Income Excluding Special Items 3Q09 3Q08 2Q09 Net income as
Reported $43,613 $22,974 $55,162 Special Items (adjustments):
Unrealized gain (loss) on fuel hedging instruments (1) (5,089)
22,848 (27,069) Special Items, net (2) 10,585 - - Adjusted Net
Income $49,109 $45,822 $28,093 Shares used for Computation (in
thousands) Basic 43,344 43,195 43,338 Diluted 43,710 43,491 43,685
Adjusted earnings per share Basic 1.13 1.06 0.65 Diluted 1.12 1.05
0.64 Reconciliation Operating Costs per ASM Excluding Fuel and
Special Items 3Q09 3Q08 2Q09 Operating Costs per ASM as Reported
10.8 12.7 9.9 Aircraft fuel per ASM (3.2) (5.4) (2.8) Operating
Costs per ASM excluding fuel 7.6 7.3 7.1 Special Items
(adjustments): Special Items per ASM, net (2) (0.4) - - Operating
expenses per ASM excluding fuel and special items 7.2 7.3 7.1
FOOTNOTES: 1) Includes unrealized (gains)/losses resulting from the
mark-to-market accounting for changes in the fair value of fuel
hedging instruments. For 3Q09 and 2Q09 period the Company recorded
unrealized fuel hedge gains of US$5.1 million and 27.1million,
respectively. In 3Q08, the Company recorded an unrealized fuel
hedge loss of US$22.8 million. 2) Special fleet charges for the
3Q09 period include a US$14.6 million special charge related to the
accrual of costs associated with the retirement of four MD-80
aircraft as a result of Aero Republica's transition to an all
Embraer-190 fleet. CPA-G DATASOURCE: Copa Holdings S.A. CONTACT:
Investor Relations, +011-507-304-2677, Web site:
http://www.copaair.com/
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