SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
Report
of Foreign Issuer
Pursuant
to Rule 13a-16 or 15d-16 of
the
Securities Exchange Act of 1934
Report
on Form 6-K dated for the month of
November, 2010
Copa
Holdings, S.A.
(Translation
of Registrant's Name Into English)
Boulevard
Costa del Este, Avenida Principal y Avenida de la Rotonda
Urbanización
Costa del Este
Parque
Lefevre
Panama
City, Panama
(Address
of principal executive offices)
(Indicate
by check mark whether the registrant files or will file annual reports under
cover of Form 20-F or Form 40-F.)
Form
20-F x Form
40-F o
(Indicate
by check whether the registrant by furnishing the information contained in this
Form is also thereby furnishing the information to the Commission pursuant to
Rule 12g3-2(b) under the Securities Exchange Act of 1934.)
Yes o No
x
(If “Yes”
is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b);82- )
Enclosure: Press Release -
Copa Holdings Reports
Net Income of US$63.9 Million and EPS of US$1.45 for the Third Quarter of
2010
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned, hereunto
duly authorized.
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Copa Holdings, S.A.
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(Registrant)
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Date:
11/11/2010
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By:
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/s/ Victor
Vial
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Name:
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Victor
Vial
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Title:
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CFO
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Copa
Holdings Reports Net Income of US$63.9 Million and EPS of US$1.45 for the Third
Quarter of 2010
Operating
margin comes in at 19.5% on 14% capacity growth
Panama City, Panama ---
November 11, 2010. Copa Holdings, S.A. (NYSE: CPA), parent company of
Copa Airlines and Copa Airlines Colombia, today announced financial results for
the third quarter of 2010 (3Q10). The terms “Copa Holdings" or "the Company"
refer to the consolidated entity, whose operating subsidiaries are Copa Airlines
and Aero Republica (now operating under the Copa Airlines Colombia brand). The
following financial and operating information, unless otherwise indicated, is
presented in accordance with US GAAP. See the accompanying
reconciliation of non-GAAP financial information to GAAP financial information
included in financial tables section of this earnings release. Unless otherwise
stated, all comparisons with prior periods refer to the third quarter of 2009
(3Q09).
OPERATING
AND FINANCIAL HIGHLIGHTS
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·
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Copa
Holdings reported net income of US$63.9 million for 3Q10, or earnings per
share (EPS) of US$1.45. Excluding special items, Copa Holdings
would have reported an adjusted net income of $54.9 million, or $1.25 per
share, compared to an adjusted net income of US$52.5 million or US$1.20
per share for 3Q09. See the accompanying reconciliation of non-GAAP
financial information to GAAP financial information included in the
financial tables section of this earnings
release.
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·
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Operating
income for 3Q10 came in at US$70.7 million, or 16.9% above 3Q09 adjusted
operating income of US$60.5 million, which excludes special fleet charges
of US$14.6 million. As a result, operating margin for 3Q10 came
in at 19.5% or 0.9 percentage points above 3Q09 adjusted operating
margin.
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·
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In
3Q10, total revenues grew 11.8% to US$362 million on 13.8% capacity
expansion. Consolidated operating revenue per available seat
mile (RASM) decreased 1.8% from 12.7 cents in 3Q09 to 12.5 cents in
3Q10. However, RASM increased 5.4% over 2Q10 as a result of
higher load factors and yields.
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·
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Yield
per passenger mile for 3Q10 decreased 1.4% to 15.7
cents. However, adjusted for length of haul, yields remained
flat compared to 3Q09. Compared to 2Q10, yields increased
3.0%.
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·
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For
3Q10, consolidated load factor decreased 0.3 percentage points to 75.5%,
as consolidated passenger traffic grew 13.3% on 13.8% capacity
increase. Compared to 2Q10, load factor increased 2.4
percentage points.
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·
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Operating
cost per available seat mile (CASM), excluding special charges, decreased
2.8% from 10.3 cents in 3Q09 to 10.1 cents in 3Q10. CASM,
excluding fuel and special charges, decreased 3.9% from 7.2 cents in 3Q09
to 6.9 cents in 3Q10 mostly as a result of the dilution effect of capacity
added in 3Q10.
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·
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Cash,
short term and long term investments ended 3Q10 at US$375.4 million,
representing 28% of the last twelve months’
revenues.
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·
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Copa
Holdings ended the third quarter with a consolidated fleet of 60
aircraft. The Company expects to receive three Boeing 737-800s
in 4Q10, to end the year with 63 aircraft, composed of 20 Boeing 737-700s,
17 Boeing 737-800s and 26
Embraer-190s.
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·
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During
3Q10, the Company entered into agreements for the long-term lease of ten
new 737-800s to be operated by Copa Airlines. Five of these
aircraft are scheduled for delivery in the second half of 2011, while the
remaining aircraft are scheduled for delivery during
2012.
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RECENT
DEVELOPMENTS
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·
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On
October 4th,
Copa Airlines Colombia launched new international service from Bogota to
Mexico City. Copa Airlines Colombia now provides direct
non-stop international service from Colombia to 5 international
destinations, as well as connectivity through Copa’s “Hub of the Americas”
in Panama.
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·
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On
November 10th, Copa Airlines and Copa Airlines Colombia announced the
unanimous approval by Star Alliance’s Chief Executive Board to accept them
as future members of the Star Alliance. Both airlines will now
begin their work in order to achieve integration into the alliance by mid
2012. Star Alliance is the world’s largest global airlines
alliance, offering over 22,500 daily flights to 1,292 destinations in 188
countries.
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Consolidated
Financial &
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Operating
Highlights
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3Q10
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3Q09
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%
Change
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2Q10
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%
Change
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|||||||||||||||
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RPMs
(millions)
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2,187 | 1,930 | 13.3 | % | 1,871 | 16.9 | % | |||||||||||||
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ASMs
(mm)
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2,897 | 2,545 | 13.8 | % | 2,559 | 13.2 | % | |||||||||||||
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Load
Factor
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75.5 | % | 75.8 | % |
-0.3
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p.p. | 73.1 | % |
2.4
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p.p. | ||||||||||
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Yield
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15.7 | 15.9 | -1.4 | % | 15.2 | 3.0 | % | |||||||||||||
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PRASM
(cents)
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11.8 | 12.1 | -1.9 | % | 11.1 | 6.4 | % | |||||||||||||
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RASM
(cents)
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12.5 | 12.7 | -1.8 | % | 11.9 | 5.4 | % | |||||||||||||
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CASM
(cents)
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10.1 | 10.9 | -7.9 | % | 10.6 | -5.0 | % | |||||||||||||
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Adjusted CASM
(cents) (1)
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10.1 | 10.3 | -2.8 | % | 10.6 | -5.0 | % | |||||||||||||
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CASM
Excl. Fuel (cents)
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6.9 | 7.7 | -11.1 | % | 7.4 | -6.4 | % | |||||||||||||
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Adjusted
CASM Excl. Fuel (cents) (1)
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6.9 | 7.2 | -3.9 | % | 7.4 | -6.4 | % | |||||||||||||
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Breakeven Load
Factor (1)(2)
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60.9 | % | 59.7 | % |
1.2
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p.p. | 64.9 | % |
-4.0
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p.p. | ||||||||||
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Operating
Revenues (US$ mm)
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362.0 | 323.7 | 11.8 | % | 303.4 | 19.3 | % | |||||||||||||
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Operating
Income (US$ mm)
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70.7 | 45.9 | 54.1 | % | 32.5 | 117.8 | % | |||||||||||||
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Adjusted Operating
Income (US$ mm) (1)
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70.7 | 60.5 | 16.9 | % | 32.5 | 117.8 | % | |||||||||||||
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Operating
Margin
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19.5 | % | 14.2 | % |
5.4
p.p.
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10.7 | % |
8.8
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p.p. | |||||||||||
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Adjusted Operating
Margin (1)
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19.5 | % | 18.7 | % |
0.9
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p.p. | 10.7 | % |
8.8
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p.p. | ||||||||||
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Net
Income (US$ mm)
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63.9 | 43.1 | 48.2 | % | 18.6 | 243.4 | % | |||||||||||||
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Adjusted Net Income
(US$ mm) (1)(2)
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54.9 | 52.5 | 4.4 | % | 26.3 | 109.0 | % | |||||||||||||
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EPS
- Basic and Diluted (US$)
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1.45 | 0.98 | 48.0 | % | 0.42 | 243.3 | % | |||||||||||||
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Adjusted EPS - Basic
and Diluted (US$) (1)(2)
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1.25 | 1.20 | 4.3 | % | 0.60 | 108.9 | % | |||||||||||||
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#
of Shares - Basic and Diluted (000)
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43,999 | 43,946 | 0.1 | % | 43,983 | 0.0 | % | |||||||||||||
(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 Copa Colombia’s fleet modernization
plan.
(2) Breakeven Load Factor, Adjusted Net
Income and Adjusted EPS (Basic and Diluted) exclude: a) For 3Q09,
special charges related to the accrual of costs associated with the retirement
of four MD-80 aircraft as a result of Copa Colombia’s transition fleet
modernization plan and b) For 3Q10, 3Q09 and 2Q10 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 US
GAAP measures.
2
MANAGEMENT’S
COMMENTS ON 3Q10 RESULTS
For 3Q10,
Copa Holdings reported operating income of US$70.7 million, which represented an
operating margin of 19.5% or 0.9 percentage points above 3Q09 adjusted operating
margin.
Total
revenues increased 11.8% during the quarter on capacity expansion of
13.8%. For the quarter, consolidated load factor came in at 75.5%
compared to 75.8% in 3Q09 and consolidated yield came in at 15.7 cents, compared
to 15.9 cents in 3Q09. As a result, RASM decreased 1.8%, from 12.7
cents in 3Q09 to 12.5 cents in 3Q10.
For the
quarter, yields decreased 1.4% as a result of lower yields in the Colombian
domestic market and to and from Venezuela, mostly offset by higher average
yields in the rest of the network. However, during the month of
September 2010, a positive revenue environment generated both higher year over
year RASM and yields on a consolidated basis.
Consolidated
operating expenses, excluding special items recorded in 3Q09, increased 10.6% to
US$291.3 million, while adjusted CASM decreased 2.8% to 10.1 cents during the
same period. Excluding fuel costs, adjusted CASM decreased 3.9% to
6.9 cents, mostly as a result of the dilution effect of capacity added in
3Q10.
Aircraft
fuel expense, including realized hedge losses, increased 13.6% compared to
3Q09, The Company’s effective jet fuel price, which includes a
US$0.8 million realized fuel hedge loss in 3Q10 and a US$7.9 million fuel hedge
loss in 3Q09, increased from an average of US$2.24 in 3Q09 to US$2.35 in
3Q10.
For 3Q10,
the Company had fuel hedges in place representing 25% of its consolidated
volume. Continuing with the execution of its fuel hedge policy, the
Company currently has hedged approximately 22% in 4Q10. For 2011 and
2012, the Company has hedged approximately 23% and 9%, respectively, of its
forecasted fuel consumption.
The
Company recorded a net non-operating gain of US$2.4 million for 3Q10 compared to
a US$0.4 million non-operating gain in 3Q09. This gain was due to an
unrealized fuel hedge mark-to-market gain of US$9.1 million in 3Q10, as compared
to a fuel hedge mark-to-market gain of US$5.2 million in 3Q09.
Copa
Holdings closed the quarter with US$375.4 million in cash, short term and long
term investments, representing approximately 28% of last twelve months´
revenues. Total debt at the end of 3Q10 amounted to US$939.9 million,
most of which relates to aircraft and equipment
financing.
By the
end of 2010, the Company expects to have increased its year end consolidated
fleet by seven aircraft and expand capacity by approximately 10%, with most of
this capacity growth derived from Copa Airlines. Copa Holdings’
consolidated fleet is expected to end the year at 63 aircraft, composed of 20
Boeing 737-700s, 17 Boeing 737-800s and 26 Embraer-190s.
Copa
Holdings solid business model and strong competitive advantages continue to
enhance its leadership position in Latin American commercial aviation and have
consistently placed the Company among the most profitable airlines in the
world. Going forward, the Company is well positioned to seize future
growth opportunities, take advantage of its superior airport infrastructure and
continue to strengthen what is arguably the most complete and convenient network
for intra-Latin American travel.
3
OUTLOOK
FOR 2010
Based on
the Company’s year to date results, and expectations for 4Q10, we are
maintaining our full year capacity, load factor, RASM and CASM ex-fuel
guidance. Additionally, we are adjusting operating margin guidance
from a 19-21% range in our previous guidance to +/-19%. Our full year
fuel price assumption increases from $2.35 to $2.40 per gallon.
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Financial
Outlook
(US
GAAP)
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2010
- Full Year
Revised
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2010
- Full Year
Prior
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2009
Actual
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Capacity
- YOY ASM Growth
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10 | % | 10 | % | 12 | % | ||||||
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Average
Load Factor
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+/-77 | % | +/-77 | % | 74.6 | % | ||||||
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RASM
(cents)
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+/-12.7 | +/-12.7 | 12.6 | |||||||||
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CASM
Ex-fuel (cents)
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+/- 7.1 | +/- 7.1 | 7.2 | |||||||||
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Operating
Margin
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+/-19 | % | 19-21 | % | 19.4 | % | ||||||
OUTLOOK
FOR 2011 – PRELIMINARY
For 2011,
preliminary guidance is for consolidated capacity growth in the range of 17-19%
as a result of the full year effect of capacity added in 2010 and the
introduction of ten additional 737-800 aircraft during 2011. Load factors
are expected to come in below 2010 levels as a result of strong capacity
expansion; while unit revenues (RASM) are expected to decrease approximately 7%
mainly as a result increased length of haul and capacity expansion. Unit
costs excluding fuel, CASM ex-fuel, are expected to come in at 6.4 cents,
significantly below 2010 levels. The estimated effective price per
gallon of jet fuel, including the effect of current hedge contracts and
into-plane costs for full year 2011 is US$2.50. As a result, the
Company is projecting an operating margin in the range of 18% to 20% for
2011.
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Financial
Outlook (US GAAP)
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2011
– Full Year
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Capacity
- YOY ASM Growth
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17-19 | % | ||
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Average
Load Factor
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+/-74 | % | ||
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RASM
(cents)
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+/-11.8 | |||
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CASM
Ex-fuel (cents)
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+/- 6.4 | |||
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Operating
Margin
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18-20 | % | ||
CONSOLIDATED
THIRD QUARTER R
ESULTS
Operating
revenue
Consolidated
revenue for 3Q10 totaled US$362.0 million, an 11.8% or US$38.3 million
increase over operating revenue of US$323.7 million in 3Q09, due to a 13.7%
or US$36.2 million increase in Copa Airlines’ operating revenue and a 3.1% or
US$2.0 million increase in Copa Airlines Colombia’s operating
revenues.
4
Copa
Airlines operating revenue
Copa
Airlines operating revenue for 3Q10 totaled US$301.0 million, a 13.7% increase
over operating revenue of US$264.8 million in 3Q09. This
increase was primarily due to a 13.8% or US$34.2 million increase in passenger
revenue.
Passenger
revenue. For 3Q10 passenger
revenue totaled US$282.5 million, a 13.8% increase over passenger revenue
of US$248.3 million in 3Q09. Passenger yield decreased 0.1%,
while load factor decreased 1.1 percentage points, leading to a 1.6% decrease in
passenger revenue per ASM (PRASM). However, adjusting for length of haul, PRASM
increased 1.0%.
Cargo, mail and
other. Cargo, mail and other
revenue totaled US$18.5 million in 3Q10, a 12.7% increase over cargo, mail and
other of US$16.4 million in 3Q09.
Copa
Airlines Colombia operating revenue
During
3Q10, Copa Airlines Colombia generated operating revenue of US$66.1 million,
representing a 3.1% or US$2.0 million increase over 3Q09. For the
quarter, traffic grew 9.9%, which led to a 73.8% load factor or 3.6 percentage
points higher than 3Q09. However, lower yields, mostly as a result of
a more competitive environment in the Colombian domestic market, led to a 1.4%
decline in RASM. Nevertheless, both yields and RASM showed
considerable quarter over quarter improvement and increased 9.5% and 19.5%,
respectively over 2Q10.
Operating
expenses
For 3Q10,
consolidated operating expenses increased 10.6% to US$291.3 million,
representing operating cost per available seat mile (CASM) of 10.1
cents. Adjusted CASM, excluding fuel costs, decreased 3.9% from 7.2
cents in 3Q09 to 6.9 cents in 3Q10. An overview of the major variances on a
consolidated basis follows:
Aircraft
fuel. For
3Q10, aircraft fuel totaled US$91.8 million, an US$11.0 million or 13.6%
increase over aircraft fuel of US$80.8 million in 3Q09. This increase was
primarily a result of a 4.7% increase in the average price per gallon of jet
fuel (including into-plane costs and realized hedges), which averaged US$2.35 in
3Q10, as compared to US$2.24 in 3Q09, and a 9.2% increase in gallons consumed
resulting from increased capacity. This average price per gallon of
jet fuel for 3Q10 includes a $0.8 million fuel hedge loss, compared to a US$7.9
fuel hedge loss in 3Q09. Excluding the effect of fuel hedge losses for both
periods fuel prices increased 15.3%, from US$2.02 per gallon in 3Q09 to US$2.33
in 3Q10.
Salaries and
benefits. For 3Q10, salaries and
benefits totaled US$45.1 million, a 15.4% increase over salaries and
benefits of US$39.1 million in 3Q09. This increase was mostly a result of
an increase in operating headcount to support additional capacity.
Passenger
servicing. For 3Q10, passenger
servicing totaled US$31.9 million, a 10.6% increase over passenger servicing of
US$28.8 million in 3Q09. This increase was primarily a result of an increase in
passengers carried.
Commissions.
For 3Q10, commissions totaled US$15.0 million, a 5.8% decline from
commissions of US$15.9 million in 3Q09. This decline resulted from a lower
average commission rate, partially offset by a higher passenger revenue
base.
Reservations and
sales.
Reservations and sales totaled US$15.3 million, a 4.3% decrease from
reservation and sales of US$16.0 million in 3Q09. This decrease was primarily a
result of a lower average global distribution system rates.
5
Maintenance,
material and repairs. For 3Q10, maintenance,
material and repairs totaled US$21.0 million, a 15.4% increase over maintenance,
material and repairs of US$18.2 million in 3Q09. This increase was
primarily a result of more departures and the timing of certain
events.
Depreciation. Depreciation totaled
US$13.6 million in 3Q10, a 13.6% increase over depreciation of
US$11.9 million in 3Q09. This increase was primarily driven by the
depreciation of additional aircraft and spares.
Flight
operations, aircraft
rentals, landing fees and other rentals. Combined, flight
operations, aircraft rentals, landing fees and other rentals increased 14.3%
from US$36 million in 3Q09 to US$41.1 million in 3Q10, primarily as a
result of increased capacity.
Other. Other expenses totaled
US$16.6 million in 3Q10, flat over 3Q09.
Copa
Airlines operating expenses
Copa
Airlines’ operating expenses increased 10.8% to US$231.6 million from US$209.0
million in 3Q09. Operating expenses per available seat mile decreased
4.2% to 9.4 cents in 3Q10 from 9.8 cents in 3Q09. Excluding fuel
costs, operating expenses per available seat mile decreased 4.6% from 6.7 cents
in 3Q09 to 6.4 cents in 3Q10.
Aircraft
fuel. For
3Q10, aircraft fuel totaled US$74.5 million, an 11.8% increase over
aircraft fuel of US$66.7 million in 3Q09. This was primarily a result of a 2.5%
increase in the average price per gallon of jet fuel (including into-plane costs
and realized hedges), which averaged US$2.32 in 3Q10 as compared to US$2.26 in
3Q09, and a 10.0% increase in gallons consumed resulting from increased
capacity. This average price per gallon of jet fuel for 3Q10 includes
a $0.8 million fuel hedge loss compared to a US$7.7 million fuel hedge loss in
3Q09. Excluding the effect of fuel hedge losses for 3Q10 and 3Q09,
fuel prices increased 15.0% from US$1.99 per gallon in 3Q09 to US$2.29 in
3Q10.
Salaries and
benefits. For
3Q10, salaries and benefits totaled US$34.8 million, a 14.5% increase over
salaries and benefits of US$30.4 million in the same period in 2009. This
increase was mainly a result of an overall increase in operating headcount to
support capacity expansion.
Passenger
servicing.
Passenger servicing totaled US$25.9 million for 3Q10, a 6.8% increase
over passenger servicing of US$24.3 million in 3Q09. This
increase was primarily the result of an increase in passengers
carried.
Commissions. Commissions totaled
US$12.7 million for 3Q10, a 2.5% decrease from commissions of US$13.0
million in 3Q09. This decrease was primarily a result of a lower average
commission rate, offset by a higher passenger revenue base.
Reservations and
sales.
Reservations and sales totaled US$11.0 million, a 3.8% decrease from
reservation and sales of US$11.5 million in 3Q09. This decrease was primarily a
result of lower average global distribution system rates.
Maintenance,
materials and repairs.
Maintenance, materials and repairs totaled US$17.2 million in 3Q10,
a 12.7% increase over maintenance, materials and repairs of US$15.3 million
in 3Q09. This increase resulted from increased capacity and the timing of
certain events.
Depreciation. Depreciation totaled
US$12.0 million in 3Q10, a 10.1% increase over depreciation of
US$10.9 million in 3Q09. This increase was primarily driven by
the depreciation of additional aircraft and spares.
Flight
operations, aircraft
rentals, landing fees and other rentals. Combined, flight
operations, aircraft rentals, landing fees and other rentals increased 20.4%
from US$25.7 million in 3Q09 to US$31.0 million in 3Q10, primarily as a
result of additional capacity.
Other. Other expenses increased
US$1.0 million from US$11.4 million in 3Q09 to US$12.5 million in
3Q10.
6
Copa
Airlines Colombia operating expenses
Copa
Airlines Colombia’s operating expenses, excluding special charges, increased
10.4% to US$65.5 million in 3Q10 from US$59.4 million in
3Q09. Adjusted CASM, which excludes special fleet charges in 3Q09,
increased 5.5% to 15.3 cents in 3Q10 from 14.5 cents in
3Q09. Adjusted CASM, excluding fuel costs, increased 2.1% from 11.1
cents in 3Q09 to 11.3 cents in 3Q10, mainly due to the strength of the Colombian
currency and higher passenger related expenses.
Non-operating
income (expense)
Consolidated
non-operating income (expense) totaled a gain of US$2.4 million in 3Q10,
compared to a US$0.4 million gain in 3Q09.
Interest
expense. Interest expense totaled US$7.8 million in 3Q10, a
3.9% decrease from interest expense of US$8.1 million in 3Q09, primarily as a
result of lower rates on variable rate debt.
Interest income. Interest
income totaled US$1.2 million, a 46.5% decline from interest income of US$2.2
million in 3Q09, mostly as a result of lower interest rates.
Other, net. Other
net totaled a gain of US$8.9 million in 3Q10, mainly related to a US$9.1 million
non-cash gain related to the mark-to-market of fuel hedge
contracts.
About
Copa Holdings
Copa
Holdings, through its operating subsidiaries Copa Airlines and Copa Airlines
Colombia, is a leading Latin American commercial aviation provider of passenger
and cargo service. Copa offers more than 150 daily scheduled flights to 45
destinations in 24 countries in North, Central and South America and the
Caribbean through its Hub of the Americas at Tocumen International Airport in
Panama City, Panama. In addition, Copa Airlines provides passengers with
access to flights to more than 120 other international destinations through
codeshare agreements with Continental Airlines and other airlines. Copa
Airlines Colombia, provides domestic service to 12 cities in Colombia as well as
international connectivity with Copa Airlines' Hub of the Americas through
flights from Bogota, Cali, Medellin, Cartagena, Bucaramanga, Pereira and
Barranquilla. Additionally, Copa Airlines Colombia has non-stop international
flights from Colombia to Caracas, Quito, Guayaquil and Mexico City.
CONTACT: Copa Holdings
S.A.
Investor
Relations:
Ph: (507)
304-2677
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.
7
Copa
Holdings, S.A.
Operating
data
|
Unaudited
|
Unaudited
|
%
|
Unaudited
|
%
|
||||||||||||||||
|
3Q10
|
3Q09
|
Change
|
2Q10
|
Change
|
||||||||||||||||
|
Copa
Holdings (Consolidated)
|
||||||||||||||||||||
|
Revenue
passengers carried (thousands)
|
1,626 | 1,475 | 10.2 | % | 1,430 | 13.7 | % | |||||||||||||
|
Revenue
passengers miles (RPMs) (mm)
|
2,187 | 1,930 | 13.3 | % | 1,871 | 16.9 | % | |||||||||||||
|
Available
seat miles (ASMs) (mm)
|
2,897 | 2,545 | 13.8 | % | 2,559 | 13.2 | % | |||||||||||||
|
Load
factor
|
75.5 | % | 75.8 | % |
-0.3
|
p.p. | 73.1 | % |
2.4
|
p.p. | ||||||||||
|
Break-even
load factor
|
60.9 | % | 59.7 | % |
1.2
|
p.p. | 64.9 | % |
-4.0
|
p.p. | ||||||||||
|
Yield
(cents)
|
15.7 | 15.9 | -1.5 | % | 15.2 | 2.9 | % | |||||||||||||
|
RASM
(cents)
|
12.5 | 12.7 | -1.9 | % | 11.9 | 5.3 | % | |||||||||||||
|
CASM
(cents)
|
10.1 | 10.9 | -7.9 | % | 10.6 | -5.1 | % | |||||||||||||
|
Adj.CASM
- excl. special charges and fuel (cents)
|
6.9 | 7.2 | -4.0 | % | 7.4 | -6.5 | % | |||||||||||||
|
Fuel
gallons consumed (mm)
|
38.9 | 35.6 | 9.2 | % | 34.8 | 11.6 | % | |||||||||||||
|
Average
price of Fuel - Net of Hedges (US$)
|
2.35 | 2.24 | 4.7 | % | 2.37 | -0.7 | % | |||||||||||||
|
Copa
Segment
|
||||||||||||||||||||
|
Revenue
passengers miles (RPMs) (mm)
|
1,871 | 1,643 | 13.9 | % | 1,607 | 16.5 | % | |||||||||||||
|
Available
seat miles (ASMs) (mm)
|
2,470 | 2,136 | 15.6 | % | 2,164 | 14.1 | % | |||||||||||||
|
Load
factor
|
75.8 | % | 76.9 | % |
-1.1
|
p.p. | 74.2 | % |
1.5
|
p.p. | ||||||||||
|
Break-even
load factor
|
57.7 | % | 58.1 | % |
-0.4
|
p.p. | 61.3 | % |
-3.6
|
p.p. | ||||||||||
|
Yield
(US$ cents)
|
15.1 | 15.1 | -0.2 | % | 14.8 | 1.6 | % | |||||||||||||
|
RASM
(cents)
|
12.2 | 12.4 | -1.8 | % | 11.8 | 3.2 | % | |||||||||||||
|
CASM
(cents)
|
9.4 | 9.8 | -4.2 | % | 10.0 | -5.8 | % | |||||||||||||
|
Adj.CASM
- excl. special charges and fuel (cents)
|
6.4 | 6.6 | -3.7 | % | 6.9 | -7.5 | % | |||||||||||||
|
Fuel
gallons consumed (mm)
|
32.0 | 29.1 | 10.0 | % | 28.4 | 12.5 | % | |||||||||||||
|
Average
price of Fuel - Net of Hedges (US$)
|
2.32 | 2.26 | 2.5 | % | 2.34 | -0.8 | % | |||||||||||||
|
Copa
Airlines Colombia Segment
|
||||||||||||||||||||
|
Revenue
passengers miles (RPMs) (mm)
|
316 | 287 | 9.9 | % | 264 | 19.6 | % | |||||||||||||
|
Available
seat miles (ASMs) (mm)
|
428 | 409 | 4.6 | % | 395 | 8.3 | % | |||||||||||||
|
Load
factor
|
73.8 | % | 70.2 | % |
3.6
|
p.p. | 66.8 | % |
7.0
|
p.p. | ||||||||||
|
Break-even
load factor
|
76.0 | % | 65.6 | % |
10.4
|
p.p. | 82.5 | % |
-6.5
|
p.p. | ||||||||||
|
Yield
(cents)
|
19.3 | 20.6 | -6.4 | % | 17.6 | 9.5 | % | |||||||||||||
|
RASM
(cents)
|
15.5 | 15.7 | -1.4 | % | 12.9 | 19.5 | % | |||||||||||||
|
CASM
(cents)
|
15.3 | 18.1 | -15.5 | % | 15.0 | 2.1 | % | |||||||||||||
|
Adj.CASM
- excl. special charges and fuel (cents)
|
11.3 | 11.1 | 1.7 | % | 10.9 | 3.0 | % | |||||||||||||
|
Fuel
gallons consumed (mm)
|
6.9 | 6.5 | 5.4 | % | 6.4 | 7.5 | % | |||||||||||||
|
Average
price of Fuel - Net of Hedges (US$)
|
2.51 | 2.18 | 15.3 | % | 2.51 | 0.2 | % | |||||||||||||
8
Copa
Holdings, S.A.
Income
Statement - USGAAP
(US$
Thousands)
|
Unaudited
|
Unaudited
|
%
|
Unaudited
|
%
|
||||||||||||||||
|
3Q10
|
3Q09
|
Change
|
2Q10
|
Change
|
||||||||||||||||
|
Operating
Revenues
|
||||||||||||||||||||
|
Passenger
Revenue
|
343,319 | 307,438 | 11.7 | % | 285,019 | 20.5 | % | |||||||||||||
|
Cargo,
mail and other
|
18,682 | 16,297 | 14.6 | % | 18,382 | 1.6 | % | |||||||||||||
|
Total
Operating Revenue
|
362,001 | 323,735 | 11.8 | % | 303,401 | 19.3 | % | |||||||||||||
|
Operating
Expenses
|
||||||||||||||||||||
|
Aircraft
fuel
|
91,800 | 80,812 | 13.6 | % | 82,613 | 11.1 | % | |||||||||||||
|
Salaries
and benefits
|
45,056 | 39,059 | 15.4 | % | 42,970 | 4.9 | % | |||||||||||||
|
Passenger
servicing
|
31,910 | 28,839 | 10.6 | % | 28,239 | 13.0 | % | |||||||||||||
|
Commissions
|
14,975 | 15,889 | -5.8 | % | 12,160 | 23.2 | % | |||||||||||||
|
Reservations
and sales
|
15,301 | 15,993 | -4.3 | % | 13,453 | 13.7 | % | |||||||||||||
|
Maintenance,
material and repairs
|
20,991 | 18,195 | 15.4 | % | 23,697 | -11.4 | % | |||||||||||||
|
Depreciation
|
13,553 | 11,926 | 13.6 | % | 13,203 | 2.7 | % | |||||||||||||
|
Flight
operations
|
18,943 | 15,511 | 22.1 | % | 16,492 | 14.9 | % | |||||||||||||
|
Aircraft
rentals
|
11,627 | 11,911 | -2.4 | % | 11,189 | 3.9 | % | |||||||||||||
|
Landing
fees and other rentals
|
10,540 | 8,557 | 23.2 | % | 10,080 | 4.6 | % | |||||||||||||
|
Other
|
16,574 | 16,544 | 0.2 | % | 16,833 | -1.5 | % | |||||||||||||
|
Special
fleet charges
|
- | 14,599 | -100.0 | % | - | 0.0 | % | |||||||||||||
|
Total
Operating Expense
|
291,270 | 277,835 | 4.8 | % | 270,929 | 7.5 | % | |||||||||||||
|
Operating
Income
|
70,731 | 45,900 | 54.1 | % | 32,473 | 117.8 | % | |||||||||||||
|
Non-operating
Income (Expense):
|
||||||||||||||||||||
|
Interest
expense
|
(7,772 | ) | (8,090 | ) | -3.9 | % | (7,482 | ) | 3.9 | % | ||||||||||
|
Interest
capitalized
|
0 | 141 | -100.0 | % | 0 | - | ||||||||||||||
|
Interest
income
|
1,185 | 2,217 | -46.5 | % | 1,149 | 3.1 | % | |||||||||||||
|
Other,
net
|
8,948 | 6,139 | 45.8 | % | (4,101 | ) | -318.2 | % | ||||||||||||
|
Total
Non-Operating Income/(Expense)
|
2,361 | 407 | 480.4 | % | (10,434 | ) | -122.6 | % | ||||||||||||
|
Income
before Income Taxes
|
73,092 | 46,307 | 57.8 | % | 22,039 | 231.7 | % | |||||||||||||
|
Provision
for Income Taxes
|
9,170 | 3,168 | 189.5 | % | 3,425 | 167.7 | % | |||||||||||||
|
Net
Income
|
63,922 | 43,139 | 48.2 | % | 18,614 | 243.4 | % | |||||||||||||
|
EPS
- Basic and Diluted
|
1.45 | 0.98 | 48.0 | % | 0.42 | 243.3 | % | |||||||||||||
|
Shares
- Basic and Diluted
|
43,999,213 | 43,946,321 | 0.1 | % | 43,982,983 | 0.0 | % | |||||||||||||
9
|
Copa
Holdings, S.A.
|
||||||||||||
|
Balance
Sheet – USGAAP
|
||||||||||||
|
(US$
Thousands)
|
September
30,
|
June
30,
|
September
30,
|
|||||||||
|
2010
|
2010
|
2009
|
||||||||||
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
||||||||||
|
ASSETS
|
||||||||||||
|
Current
Assets:
|
||||||||||||
|
Cash
and cash equivalents
|
$ | 208,904 | $ | 197,557 | $ | 264,976 | ||||||
|
Short-term
investments
|
160,297 | 155,663 | 102,778 | |||||||||
|
Total
cash, cash equivalents and short-term investments
|
369,201 | 353,220 | 367,754 | |||||||||
|
Accounts
receivable, net of allowance for doubtful accounts
|
100,019 | 99,762 | 90,722 | |||||||||
|
Accounts
receivable from related parties
|
3,256 | 2,431 | 5,425 | |||||||||
|
Expendable
parts and supplies, net of allowance for obsolescence
|
40,086 | 27,750 | 23,138 | |||||||||
|
Prepaid
expenses
|
33,685 | 31,331 | 22,277 | |||||||||
|
Other
current assets
|
13,943 | 5,769 | 5,465 | |||||||||
|
Total
Current Assets
|
560,190 | 520,263 | 514,781 | |||||||||
|
Long-term
investments
|
6,224 | 6,145 | 8,577 | |||||||||
|
Property
and Equipment:
|
||||||||||||
|
Owned
property and equipment:
|
||||||||||||
|
Flight
equipment
|
1,620,177 | 1,623,718 | 1,436,216 | |||||||||
|
Other
equipment
|
67,242 | 64,678 | 61,379 | |||||||||
| 1,687,419 | 1,688,396 | 1,497,595 | ||||||||||
|
Less:
Accumulated depreciation
|
(257,046 | ) | (243,524 | ) | (210,067 | ) | ||||||
| 1,430,373 | 1,444,872 | 1,287,528 | ||||||||||
|
Purchase
deposits for flight equipment
|
194,971 | 164,551 | 165,370 | |||||||||
|
Total
Property and Equipment
|
1,625,344 | 1,609,423 | 1,452,898 | |||||||||
|
Other
Assets:
|
||||||||||||
|
Net
pension asset
|
2,299 | 2,022 | 2,003 | |||||||||
|
Goodwill
|
27,090 | 25,442 | 25,369 | |||||||||
|
Intangible
asset
|
39,720 | 37,304 | 37,197 | |||||||||
|
Other
assets
|
41,693 | 39,911 | 34,413 | |||||||||
|
Total
Other Assets
|
110,802 | 104,679 | 98,982 | |||||||||
|
Total
Assets
|
$ | 2,302,560 | $ | 2,240,510 | $ | 2,075,238 | ||||||
|
LIABILITIES
AND SHAREHOLDER'S EQUITY
|
||||||||||||
|
Current
Liabilities:
|
||||||||||||
|
Current
maturities of long-term debt
|
$ | 124,893 | $ | 145,085 | $ | 129,315 | ||||||
|
Accounts
payable
|
50,743 | 47,840 | 49,825 | |||||||||
|
Accounts
payable to related parties
|
13,566 | 7,415 | 9,060 | |||||||||
|
Air
traffic liability
|
212,825 | 193,831 | 186,985 | |||||||||
|
Taxes
and interest payable
|
55,646 | 46,112 | 41,761 | |||||||||
|
Accrued
expenses payable
|
40,817 | 42,332 | 45,490 | |||||||||
|
Other
current liabilities
|
11,307 | 13,134 | 18,924 | |||||||||
|
Total
Current Liabilities
|
509,798 | 495,749 | 481,360 | |||||||||
|
Non-Current
Liabilities:
|
||||||||||||
|
Long-term
debt
|
815,020 | 836,116 | 771,184 | |||||||||
|
Post
employment benefits liability
|
2,560 | 2,630 | 2,326 | |||||||||
|
Other
long-term liabilities
|
16,776 | 14,748 | 12,844 | |||||||||
|
Deferred
tax liabilities
|
14,904 | 14,131 | 10,685 | |||||||||
|
Total
Non-Current Liabilities
|
834,356 | 867,625 | 797,039 | |||||||||
|
Total
Liabilities
|
1,359,058 | 1,363,373 | 1,278,399 | |||||||||
|
Shareholders'
Equity:
|
||||||||||||
|
Class
A - 32,656,660 shares issued and outstanding
|
22,291 | 22,291 | 20,858 | |||||||||
|
Class
B - 10,938,125 shares issued and outstanding
|
7,466 | 7,466 | 8,722 | |||||||||
|
Additional
paid in capital
|
22,836 | 21,283 | 17,292 | |||||||||
|
Retained
earnings
|
889,866 | 825,944 | 747,597 | |||||||||
|
Accumulated
other comprehensive income (loss)
|
1,044 | 153 | 2,372 | |||||||||
|
Total
Shareholders' Equity
|
943,502 | 877,137 | 796,841 | |||||||||
|
Total
Liabilities and Shareholders' Equity
|
$ | 2,302,560 | $ | 2,240,510 | $ | 2,075,239 | ||||||
10
|
NON-GAAP
FINANCIAL MEASURE RECONCILIATION
|
This
press release includes the following non GAAP financial measures: Adjusted CASM,
Adjusted CASM Excluding Fuel, Adjusted Operating Income, Adjusted Operating
Margin, 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 Operating Income
|
||||||||||||
|
Excluding
Special Items
|
3Q10
|
3Q09
|
2Q10
|
|||||||||
|
Operating
Income as Reported
|
$ | 70,731 | $ | 45,900 | $ | 32,473 | ||||||
|
Special
Items (adjustments):
|
||||||||||||
|
Special
fleet charges (2)
|
- | 14,599 | - | |||||||||
|
Adjusted
Operating Incom e
|
$ | 70,731 | $ | 60,499 | $ | 32,473 | ||||||
|
Reconciliation
of Net Income
|
||||||||||||
|
Excluding
Special Items
|
3Q010
|
3Q09
|
2Q10
|
|||||||||
|
Net
income as Reported
|
$ | 63,922 | $ | 43,139 | $ | 18,614 | ||||||
|
Special
Items (adjustments):
|
||||||||||||
|
Unrealized
(gain) loss on fuel hedging instruments (1)
|
(9,068 | ) | (5,214 | ) | 8,602 | |||||||
|
Special
Items, net (2)
|
- | 14,599 | (965 | ) | ||||||||
|
Adjusted
Net Income
|
$ | 54,854 | $ | 52,523 | $ | 26,251 | ||||||
|
Shares
used for Computation (in thousands)
|
43,999 | 43,946 | 43,983 | |||||||||
|
Adjusted
EPS
|
1.25 | 1.20 | 0.60 | |||||||||
|
Reconciliation
Operating Costs per ASM
|
||||||||||||
|
Excluding
Fuel and Special Items
|
3Q10
|
3Q09
|
2Q10
|
|||||||||
|
Operating
Costs per ASM as Reported
|
10.1 | 10.9 | 10.6 | |||||||||
|
Aircraft
fuel per ASM
|
(3.2 | ) | (3.2 | ) | (3.2 | ) | ||||||
|
Operating
Costs per ASM excluding fuel
|
6.9 | 7.7 | 7.4 | |||||||||
|
Special
Items (adjustments):
|
||||||||||||
|
Special
Items per ASM, net (2)
|
- | (0.4 | ) | - | ||||||||
|
Operating
expenses per ASM excluding fuel and special items
|
6.9 | 7.3 | 7.4 | |||||||||
FOOTNOTES:
|
(1)
|
Includes
unrealized (gains) losses resulting from the mark-to-market accounting for
changes in the fair value of fuel hedging instruments. For 3Q10
and 3Q09 the Company recorded unrealized fuel hedge gains of US$9.1
million and US$5.2 million, respectively. For 2Q09 the Company
recorded an unrealized fuel hedge gain of US$8.6
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 Copa Airlines Colombia’s fleet modernization
plan.
|
11