avianca holdings reports third quarter 2017 adjusted...

1. When indicated the figures are adjusted by the following one-time items:$-31,580m: Foregone Revenues; $-14,530M: ACDAC’s operatives expenses; $ 6,522M: Aerogal's Reservs Adjust: Opex; $ 1,356MM Opex: Engines Incidents B787.

Avianca Holdings Reports Third Quarter 2017 Adjusted Operating Income1 of $131.5 Million

Bogota, Colombia, November 14, 2017 – Avianca Holdings S.A. (NYSE: AVH, BVC: PFAVH) today reported its financial results for the third quarter of 2017 (3Q 2017). All figures are expressed in millions of US dollars unless otherwise stated. The information within is presented in accordance with International Financial Reporting Standards (IFRS). The reconciliation between IFRS and non-IFRS financial information can be seen in the financial tables section of this report. Except when noted, all comparisons refer to third quarter 2016 (3Q 2016) numbers. Figures and operating metrics of Avianca Holdings S.A. (“Avianca Holdings” or “the Company”) are presented on a consolidated basis.

Third Quarter 2017 Highlights

On September 20, 2017, approximately 700 pilot members of the ACDAC Colombian

pilots union made the unilateral decision to strike, thereby impacting Avianca’s operations.

The following results therefore reflect third quarter 2017 results on an adjusted basis.

Adjusting for the pilot strike, 3Q2017 results were primarily driven by a 12.3% increase in

total operating revenues1 as the Company benefited from increased traffic, strong load

factors and continued yield recovery. Moreover, Cargo and Other revenues1 increased

26.2% year-on-year, primarily driven by an increase in transported tons as well as

increased revenues from mile redemption and other services. This was offset by an 8.4%

increase in operating expenses1.

Adjusted Net Income excluding special items totaled $78.9 million, compared to a gain of

$ 47.6 million in 3Q 2016. Adjusted net income margin1 for 3Q 2017 therefore reached

6.6%; a 213 bps year-on-year increase. Operating income (EBIT1) adjusted for the pilot

strike reached $131.5 million, with an operating margin1 of 11.0%. Further, operating

revenues reached $1.19 billion for the quarter; a 12.3% year-on-year increase1.

For the third quarter 2017, yields1 reached 9.2 cents; a 4.3% increase when compared to

3Q 2016. This trend was supported by a 4.9% year-on-year increase in third quarter 2017

traffic numbers (RPKs) as well as an average fare increase of 8.2%.

Cost per available seat kilometer (CASK1) increased 4.8%, to 8.56 cents, in the 3Q 2017,

compared to 8.2 cents in 3Q 2016. This was primarily driven by higher effective jet fuel

prices, which on average increased by 23.1% in the third quarter of 2017, as well as by a

34.5% year-on-year increase in General, Administrative and Others and a 17.7% increase

in Maintenance and Repairs expenses. The latter was partially offset by a -11.2%

decrease in Aircraft Rental expenses. 3Q2017 CASK ex-fuel1 therefore increased 2.7%,

to 6.6 cents.

EBITDAR1 for the 3Q 2017 was $278.6 million, while the EBITDAR margin1 reached

23.4%; a 180 bps year-on-year increase.

3Q 2017 capacity, measured in Available Seat Kilometers (ASKs), increased by 3.5%

during 3Q 2017, despite a pilot strike which began on September 20. This was primarily

due to the effect of the international capacity deployed to Europe and a capacity increase

from our Home Markets to North America in during the third quarter 2016. Passenger

traffic, measured in Revenue Passenger Kilometers (RPKs), increased by 4.9% in the third

quarter 2017, reaching a strong consolidated load factor of 84.6% across the network.

Avianca incorporated its first brand new A321 NEO Aircraft in the third quarter 2017, in

accordance with the Company’s fleet plan. The NEO technology provides fuel efficiencies

of up to 20% with significant reduction in CO2 and noise emission. Avianca Holdings S.A.

and its subsidiaries ended the quarter with a consolidated operating fleet of 180 aircraft.

AVIANCA HOLDINGS S.A. NYSE: AVH BVC: PFAVH

Financial Highlights

(9 months ended September 30 th)

($millions) 9M-16 9M-17 Revenues 3.03Bn 3.32Bn

EBITDAR 610.3 682.6

EBIT 181.2 237.4

EBITDAR1 622.4 708.7

EBIT1 193.3 264.6

Net Income 17.8 67.3

Net income*1 64.9 113.2 *Excluding Fx and Derivative Charges 1Excluding items on footnote 1


($millions) 2016 2017 Revenues 1.06Bn 1.16Bn

EBITDAR 229.1 255.0

EBIT 83.4 106.6

EBITDAR1 229.1 278.6

EBIT1 83.4 131.5

Net Income 37.8 36.1

Net income*1 47.6 78.9 *Excluding Fx and Derivative Charges 1Excluding items on footnote 1

Profitability


9M-16 9M-17 EBITDAR% 20.1% 20.6%

EBIT % 6.0% 7.1%

EBITDAR %1 20.9% 21.1%

EBIT %1 6.5% 7.9%

Net income % 0.6% 2.0%

Net Income%*1 2.2% 3.4% *Excluding Fx and Derivative Charges 1Excluding items on footnote 1


2016 2017 EBITDAR% 21.6% 22.0%

EBIT % 7.9% 9.2%

EBITDAR %1 21.6% 23.4%

EBIT %1 7.9% 11.0%

Net income % 3.6% 3.1%

Net Income%*1 4.5% 6.6% *Excluding Fx and Derivative Charges 1Excluding items on footnote 1

Operational Highlights


9M-16 9M-17 Passengers 21.81M 22.84M

ASKs 35.05Bn 37.19Bn

RPKs 28.09Bn 30.8Bn

Load Factor 80.2% 82.8%

RASK 8.65 8.93

CASK 8.14 8.29 (3 months ended September 30 th)

2016 2017 Passengers 7.61M 7.62M

ASKs 11.97Bn 12.39Bn

RPKs 10Bn 10.48Bn

LoadFactor 83.5% 84.6%

RASK 8.87 9.37

CASK 8.18 8.51

Contact Information: Avianca Holdings S.A.

Investor Relations Office [email protected]

mailto:[email protected]

1. When indicated the figures are adjusted by the following one-time items: $-31,580m: Foregone Revenues; $-14,530M: ACDAC’s operatives expenses; $ 6,522M: Aerogal's Reservs Adjust: Opex; $ 1,356MM Opex: Engines Incidents B787.

CEO Message

Dear Shareholders,

This proved to be an extraordinary quarter for Avianca in many ways. From a business perspective, our ongoing focus on operational efficiency, combined with strong demand patterns across our network, were reflected in Avianca transporting the highest number of passengers in the Company’s history for a third consecutive quarter. We are also very proud to mention that Avianca was selected to be the Vatican’s airline of choice during Pope Francis’s visit to Colombia from the 8th through the 10th of September.

We experienced particularly strong customer demand during this summer vacation season, in line with a strengthening economic environment throughout the region. Traffic measured in RPK to Central America and the Caribbean leisure destinations increased by 11.9% year on year, reaching a 78.5% consolidated load factor, while demand to Europe and North America continued its strong trend with RPKs growing 12.2% and 6.2%, respectively. As a result, Avianca achieved an 84.6% consolidated Load Factor for the third quarter 2017; the highest in the Company’s history.

Avianca customers’ loyalty resulted in another profitable third quarter for the Company, as yields1 continued to recover,

reflected in an upward sequential trend and a 4.33% year over year increase in yields. I am therefore pleased to let you

know that we achieved operating revenues of almost USD $1.2 billion, as well as a 11.0% EBIT margin1 for the third

quarter; the second highest in company history as can be seen in a 12.3%, or 318 basis point increase, respectively.

In addition to robust numbers from our passenger business, we continued to see strong operational performance at Avianca’s Cargo and other business in the third quarter. Improvements to our top line were driven by the cargo business unit, with an 8.8% year over year increase in transported tons, as well as by increased demand related to the code share agreement signed between Avianca and Etihad in the second quarter of 2016. Avianca Cargo recorded a consolidated load factor of 58.4% for the quarter, while Avianca’s LifeMiles LTD subsidiary also generated strong results, with an increase in revenues of 8.8% year on year. Further, LifeMiles grew its cobranded credit card business by 21.7%, reaching a total of 626,000 credit cards while it continued to expand its customer base by 9%, to 7.5 million members.

As we have commented in the past, we remain committed to improving Avianca’s capital structure, and again made

important progress this quarter. Avianca’s LifeMiles subsidiary raised a total of USD $300 million through a private

placement completed in the third quarter of this year. Avianca’s leverage ratio, measured as Net Debt/ EBITDAR, therefore came in at 5.6X for the quarter.

I’d like to take this opportunity to comment on developments related to the contract and labor negotiations between Avianca S.A. and the “ACDAC” (Asociación Colombiana de Aviadores Civiles) Colombian Pilots union. As most of you know, despite tireless efforts to reach a mutually acceptable agreement, Avianca’s various proposals to the pilot’s union have been rejected and, regrettably, no agreement has been reached to date. Unfortunately, on September 20, 2017, nearly 700 pilot members of the ACDAC made the unilateral decision to strike, which is deemed illegal by the Colombian constitution as air travel is considered an essential public service. In response, Avianca quickly enacted its emergency plan. This plan entailed operating larger capacity aircraft in our domestic market, which is a more efficient use of our staff while also ensuring service to key domestic hubs. As a result, we successfully mitigated the strike’s negative impact on our operations and customers, and today are operating at 80% of Avianca’s pre-strike capacity measured in ASK. Because of the strike has Colombia’s Ministry of Labor decided to convene a labor tribunal to resolve the conflict. Avianca is confident that this tribunal, as established by Colombia’s Labor Code, is the appropriate forum to settle any ongoing labor disputes. We look forward to the tribunal´s ruling, which will establish working conditions that will govern its relationship with the ACDAC moving forward. As of November 10, the Pilot union officially declared the end to their strike. All pilots pertaining to the ACDAC syndicate will resume work starting November 13. Looking ahead to the fourth quarter’s peak season, we are committed to further reducing the strike’s potential impact on our passengers, with a focus on maintaining the best in class service and product quality that our customers have come to expect.

In summary, while Avianca experienced certain challenges, we were nevertheless able to deliver record results for the third quarter of 2017. The Pilot strike will have an adverse effect on our 4th Quarter results. However, as we position Avianca for long-term success, the Pilot strike will not have a material impact. Our Company remains well positioned to generate further efficiencies going forward. As such, we maintain our full year EBIT margin guidance of 7%-9%. We expect to close 2017 with a solid foundation, leveraging our significant success this quarter to maintain sustainable growth as demand in our markets continues to strengthen.

Sincerely,

Hernán Rincón Chief Executive Officer


Consolidated Financial and Operational Highlights1

3Q16 3Q17 ∆ Vs. 3Q16

ASK's (mm) 11.973 12.389 3,5%

RPK's (mm) 9.997 10.483 4,9%

Total Passengers (in millions) 7.609 7.617 0,1%

Load Factor 83,5% 84,6% 112 bp

Departures 76.404 73.332 -4,0%

Block Hours 143.668 143.196 -0,3%

Stage length (km) 1.026 1.084 5,7%

Fuel Consumption Gallons (000's) 123.834 129.503 4,6%

Yield (cents) 8,8 8,9 0,9%

RASK (cents) 8,9 9,4 5,6%

PRASK (cents) 7,4 7,5 2,3%

CASK (cents) 8,18 8,51 4,1%

CASK ex. Fuel (cents) 6,43 6,60 2,7%

CASK (Adjusted) (cents) 8,18 8,56 4,8%

CASK ex. Fuel (Adjusted) (cents) 6,43 6,60 2,8%

Foreign exchange (average) COP/US$ $ 2946,2 $ 2976,3 1,0%

Foreign exchange (end of period) COP/US$ $ 2880,0 $ 2936,7 2,0%

WTI (average) per barrel $ 44,9 $ 48,2 7,4%

Jet Fuel Crack (average) per barrel $ 9,6 $ 18,7 95,2%

US Gulf Coast (Jet Fuel average) per barrel $ 54,4 $ 66,9 22,9%

Fuel price per Gallon (including hedge) $ 1,69 $ 1,83 8,1%

Operating Revenues ($M) $ 1062,2 $ 1161,0 9,3%

EBITDAR ($M) $ 229,1 $ 255,0 11,3%

EBITDAR Margin 21,6% 22,0% 39 bp

EBITDA ($M) $ 149,8 $ 184,5 23,2%

EBITDA Margin 14,1% 15,9% 179 bp

Operating Income ($M) $ 83,4 $ 106,6 27,8%

Operating Margin ($M) 7,9% 9,2% 133 bp

Net Income ($M) $ 37,8 $ 36,1 -4,5%

Net Income Margin 3,6% 3,1% -45 bp

EBITDAR (Adjusted) ($M) $ 229,1 $ 278,6 21,6%

EBITDAR Margin (Adjusted) 21,6% 23,4% 180 bp

EBITDA (Adjusted) ($M) $ 149,8 $ 209,4 39,8%

EBITDA Margin(Adjusted) 14,1% 17,6% 394 bp

Operating Income (Adjusted) ($M) $ 83,4 $ 131,5 57,7%

Operating Margin ($M) (Adjusted) 7,9% 11,0% 318 bp

Adjusted Net Income ($M) $ 47,6 $ 78,9 65,6%

Net Income Margin (Adjusted) 4,5% 6,6% 170 bp

(Adjusted: Excluding non-cash Fx charges, gain or loss on derivative instruments and special items associated to one-time expenses described in footnote (1))


Management Comments on 3Q 2017 Results

Avianca Holdings reached an operating income (EBIT1) of $131.5 million, with an 11.0% operating income (EBIT1) margin. These results were primarily driven by a 12.3% increase in total operating revenues1 as the Company benefited from record load factors and strong passenger traffic as well as ongoing yield recovery. Passenger revenues1 therefore increased by 9.4%; while Non-Passenger Revenues1 increased 26.2%, in part due to strong performance in the Cargo business line as well as to higher revenues from mile redemption and other services. The latter was partially offset by an increase in operational expenses1, primarily driven by higher fuel costs and an 8.5% increase in Salaries Wages and Benefits expenses resulting from a 3.5% increase in relocation costs associated with Avianca’s MRO facility in Rio Negro. Total operating revenues1 amounted to approximately $1.19 billion during 3Q 2017. This represents the strongest third quarter revenue since the Company’s integration with TACA, with a 12.3% year-on-year increase, mainly due to a 9.4% increase in passenger revenues1. In addition to increased traffic and strong load factors, Avianca also benefited from an 8.2% increase in average fare this quarter, resulting in further yield recovery. Moreover, Cargo and Other revenues1 increased 26.2%, primarily driven by increased revenues from mile redemption and other services as well as an 8.8% increase in transported tons. Cargo and other revenues1 represented 19.2% of total revenues in the third quarter 2017. The LifeMiles Loyalty Company continued to deliver strong results during the 3Q 2017, with an 8.8% year-on-year increase in revenues. LifeMiles expanded its membership by 9.0% since the third quarter 2016, ending this quarter with almost 7.6 million members. The retail partnership program also continued to expand, reaching 322 partners this quarter; a 6.3% increase from the third quarter of last year. Finally, LifeMiles’ active co-branded cards ended the quarter with more than 626,000 cards; a 21.7% year-on-year increase. Avianca transported more than 7.6 million passengers in the third quarter of 2017; a 0.1% year-on-year increase due to the effects of the pilot strike which began on September 20. Despite the strike, traffic figures (RPKs) continued to increase well above capacity (ASKs), resulting in a consolidated load factor of 84.6%, the highest load factor on record since the Company’s merger with TACA. In particular, routes to Europe reached an average consolidated load factor of 87.8%, while domestic routes in Colombia reached a healthy 84.8% during the third quarter 2017.

3Q 2017 operating expenses1 were $1.06 billion; an 8.4% year-on-year increase. This was primarily driven by a 13.0% increase in Fuel Expenses associated with increased jet fuel prices as the Company’s effective jet fuel prices increased by 23.0%, from an average of US$1.69 in the third quarter 2016 to US$1.83 per gallon. Further, Maintenance and Repair expenses increased 17.7% primarily driven by an increase in preventive engine repairs as well as the reclassification of engine reserves to non-recoverable due to a change in engine repair staggering. Salaries, Wages and Benefits expenses increased 8.5%, primarily driven by a 3.5% increase in relocation costs associated with Avianca’s MRO facility in Rio Negro. These results were partially offset by an 11.2% decrease in Aircraft Rental Costs for the third quarter 2017, mainly due to the change from an operational lease to a financial lease for Avianca’s A318 fleet. As part of the Company’s ongoing fuel hedging strategy, a total of 68.2 million gallons of fuel were hedged at the end of the third quarter 2017, out of which 39.5 million gallons correspond to approximately 35.0% of the total expected volume to be consumed over 2017. The remaining volume represents approximately 6.3% of the total expected fuel consumption for 2018. Coverage levels were set at approximately $1.46 per gallon. In accordance with the Company’s fleet plan, Avianca incorporated its first brand new A321 NEO Aircraft between June and September 2017. The NEO technology allows for fuel efficiencies of up to 20% and a significant reduction in CO2 and noise emissions. Avianca Holdings S.A. and its subsidiaries therefore ended the quarter with a consolidated operating fleet of 180 aircraft.


The Company recorded other non-operating expenses of $64.3 million for the 3Q 2017, compared to a non-operating expense of $47.8 million for the same quarter of 2016. Interest expenses increased by $5.2 million as the Company increased the number of its aircraft under financial lease contracts. The Company also recorded a $13.5 million loss related to the non-cash foreign exchange translation adjustments, as compared to a $10.0 million expense for the same period of 2016. This effect is primarily due foreign exchange translation adjustments, consisting of the net non-cash gain (or loss) from monetary assets and liabilities denominated in Colombian Pesos and Argentinian Pesos subject to the USD exchange rate. The Company ended the quarter with cash and cash equivalents and available-for-sale securities, in the amount of $515.4 million. Including short-term certificates and bank deposits, restricted cash and cash equivalents and available-for-sale securities, (other current assets) were $537.2 million, equivalent to approximately 12.1% of revenues for the last twelve months. With regards to the Company’s operation to Venezuela, due to Avianca’s decision in 2015to discontinue sales in local currency (VEF) in Venezuela, cash balances held in this country have been significantly reduced, as of September 2017 representing an amount of $0.2 million which has been classified as restricted cash. Further, the company suspended its operations to Venezuela as of July 25, 2017. Going forward Avianca´s exposure to the Venezuelan market is therefore not considered to be material. In line with the Company’s deleveraging strategy, as of September 30, 2017, the Company’s leverage position (Net Adjusted debt to EBITDAR2) decreased to 5.6x, from 5.99x on September 30, 2016. The Company’s total long-term debt amounted to $2.98 billion, while total liabilities were $5.35 billion.

Full Year 2017 – Outlook

In light of the illegal cessation of activities by a minority of Avianca Holdings pilots who are members of the ACDAC pilots union, the Company remains focused on minimizing the impact of the strike on its customers and stakeholders. Looking ahead to the fourth quarter peak travel season, Avianca is committed to optimizing its operations while executing the many cost savings and revenue-enhancing initiatives it currently has in place, in order to deliver profitable long-term growth. Avianca therefore maintains its 2017 full year guidance as follows:

Outlook Summary Full Year 2017

Total Passenger Increase 4.5% – 6.5%

Capacity (ASK) Increase 7% – 9%

Load Factor 80.0% – 82.0%

EBIT Margin 7.0% – 9.0%


Analysis by ASKs (in U.S. cents)

3Q 2016 3Q 2017 Var%

Operating revenue:

Passenger 7.35 7.52 2.3% Cargo and other 1.52 1.85 21.9%

Total Operating Revenues 8.87 9.37 5.6% Operating expenses:

Flight Operations 0.12 0.13 2.8% Aircraft fuel 1.75 1.91 9.2% Ground Operations 0.93 0.91 -1.7% Aircraft rentals 0.66 0.57 -14.1% Passenger services 0.33 0.35 5.3% Maintenance and repairs 0.58 0.66 13.8% Air traffic 0.47 0.44 -6.9% Sales and marketing 1.09 1.08 -0.7% General, administrative, and other 0.27 0.35 30.0% Salaries, wages and benefits 1.42 1.49 4.8% Depreciation and amortization 0.55 0.63 13.4%

Total Operating Expense 8.18 8.51 4.1%

Operating Income 0.70 0.86 23.5%

Total CASK 8.18 8.51 4.1%

CASK ex. Fuel 6.43 6.60 2.7%

Total Cask (Adjusted) 8.29 8.56 3.2%

CASK ex. Fuel (Adjusted) 6.54 6.65 1.6%

Yield 8.81 8.89 0.9%

Non-IFRS Financial Measure Reconciliation

In USD Millions 3Q2016 3Q2017 Var% Net Income as Reported $ 37.8 $ 36.1 -4%

Special items (adjustments):

(+) Pilots Union Strike

$ 17.1

(+) Engines Incidents B787 $ 1.4

(+) Aerogal's Reservs Adjust $ 6.5

(-) Derivative Instruments $ 0.3 $ 4.2

(-) Foreign Exchange Gain (loss) $ 10.0 $ 13.6

Net Income Adjusted $ 47.6 $ 78.9 65.6%

Reconciliation of Operating Cost per ASK excluding special items

in US$ cents 3Q16 3Q17 ∆ Vs. 3Q16

Total CASK as reported 8.18 8.51 4.1%

Aircraft Fuel 1.75 1.91 9.2%

Total CASK excluding Fuel as reported 6.43 6.60 2.7%

(-) Pilots Union Strike - -0.00

(+) Engines Incidents B787 - 0.00

(+) Aerogal's Reservs Adjust - 0.00

Total CASK excluding Fuel and special items 6.43 6.60 2.7%


Interim Condensed Consolidated Statement of Comprehensive Income for the Three-

month period ended September 30, 2016 and 2017 (In USD thousands)

2016 (Unaudited)

2017 (Unaudited)

Operating revenue:

Passenger $ 880,386

$ 931,648

Cargo and other 181,785

229,349

Total operating revenue 1,062,171 1,160,997

Operating expenses:

Flight Operations 14,932

15,883

Aircraft fuel 209,523

236,837

Ground operations 110,766

112,667

Aircraft rentals 79,294

70,447

Passenger services 39,485

43,012

Maintenance and repairs 69,339

81,622

Air traffic 56,558

54,472

Sales and marketing 130,195

133,782

General, administrative, and other 31,965

42,992

Salaries, wages and benefits 170,349

184,775

Depreciation, amortization 66,367

77,901

Total Operating expenses 978,773 1,054,390

Operating Profit 83,398 106,606

Other non-operating income (expense):

Interest expense (42,192)

(47,422)

Interest income 4,209

931

Derivative instruments 264

(4,230)

Foreign Exchange (10,048)

(13,562)

Profit before income tax 35,631 42,324

Income tax expense- current

Income tax expense- deferred 2191 (6187)

Total income tax expense 0 0

Net profit for the period $ 37,822 $ 36,137

1. When indicated the figures are adjusted by the following one-time items:$-31,580m: Foregone Revenues; $-14,530M: ACDAC’s operatives expenses; $ 6,522M: Aerogal's Reservs Adjust: Opex; $ 1,356MM Opex: Engines Incidents B787.

Interim Condensed Consolidated Statement of Financial Position (in USD thousands)

As of September 30,

2017

As of

December 31, 2016

(Unaudited) (Audited) Assets Current assets:

Cash and cash equivalents $515,401 $375,753

Restricted cash 7,272 5,371

Accounts receivable, net of provision for doubtful accounts 359,752 313,868

Accounts receivable from related parties 19,843 19,283

Expendable spare parts and supplies, net of provision for obsolescence

101,997

82,362

Prepaid expenses 80,151 59,725

Deposits and other assets 184,260 160,124

Total current assets 1,268,676 1,016,486

Non-current assets:

Available-for-sale securities 55 76

Deposits and other assets 109,712 174,033

Accounts receivable, net of provision for doubtful accounts 142,482 92,048

Intangible assets 416,800 412,918

Deferred tax assets 13,778 5,845

Property and equipment, net 4,732,484 4,649,929

Total non-current assets 5,415,311 5,334,849

Total assets $ 6,683,987 $ 6,351,335

Interim Condensed Consolidated Statement of Financial Position (in USD thousands)

As of

September 30, 2017

As of

December 31, 2016

Liabilities and equity

Current liabilities:

Current portion of long-term debt $481,527 $406,739

Accounts payable 586,224 493,106

Accounts payable to related parties 3,406 9,072

Accrued expenses 143,852 138,797

Provisions for legal claims 15,817 18,516

Provisions for return conditions 28,042 53,116

Employee benefits 39,270 39,581

Air traffic liability 642,886 521,190

Other liabilities 13,035 11,085

Total current liabilities 1,954,059 1,691,202

Non-current liabilities:

Long-term debt

2,983,817

2,867,496


Accounts payable 7,110 2,734

Provisions for return conditions 150,437 120,822

Employee benefits 118,383 115,569

Deferred tax liabilities 24,430 20,352

Air traffic liability 97,905 98,088

Other liabilities non-current 15,341 14,811

Total non-current liabilities 3,397,423 3,239,872

Total liabilities $ 5,351,482 $ 4,931,074

Equity:

Common stock 82,600 82,600

Preferred stock 42,023 42,023

Additional paid-in capital on common stock 234,567 234,567

Additional paid-in capital on preferred stock 469,273 469,273

Retained earnings 548,394 544,681

Revaluation and other reserves 27,365 27,365

Total equity attributable to the Company 1,404,222 1,400,509

Non-controlling interest (71,717) 19,752

Total equity $ 1,332,505 1,420,261

Total liabilities and equity $ 6,683,987 $ 6,351,335

Notes with regard to the statement of future expectations This report contains statements of future expectations. These may include words such as “expect”, “estimate”, “anticipate” “forecast”, “plan”, “believe” and similar expressions. These statements and the statements regarding the Company’s beliefs and expectations do not represent historical facts and are based on current plans, projections, estimates, forecasts and therefore you should not place undue reliance on them. Statements regarding future expectations involve certain risks and uncertainties. Forward-looking statements involve inherent known and unknown risks, uncertainties and other factors, many of which are outside of the Company’s control and difficult to predict. Avianca Holdings S.A. warns that a significant number of factors may cause the actual results to be materially different from those contained in any statement with regard to future expectations. Statements of this kind refer only to the date on which they are made, and the Company does not take responsibility for publicly updating any of them due to the occurrence of future or other events.


Glossary of Operating Performance Terms

This report contains terms relating to operating performance that are commonly used in the airline industry and are defined as follows:

A ASK: Available seat kilometers represents aircraft seating capacity multiplied by the number of kilometers the seats are flown. ATK: Available ton kilometers represents cargo ton capacity multiplied by the number of kilometers the cargo is flown.

B

Block Hours: Refers to the elapsed time between an aircraft leaving an airport gate and arriving at an airport gate.

C

CASK: Cost per available seat kilometer represents operating expenses divided by available seat kilometers (ASKs). CASK ex-fuel: Represents operating expenses other than fuel divided by available seat kilometers (ASKs). Cargo Discount: The cargo discount is the incremental revenue under Cargo and Other Revenue, which recorded the difference between the selling price charged by third party agencies to final customers and the price Avianca Cargo charged third party agencies. The cargo discount was then subsequently discounted as an incremental expense under Sales and Marketing having no impact on nominal profitability. Commencing third quarter 2016 the company no longer records cargo discount. Code Share Agreement: refers to our code share agreements with other airlines with whom we have business arrangements to share the same flight. A seat can be purchased on one airline but is actually operated by a cooperating airline under a different flight number or code. The term “code” refers to the identifier used in flight schedules, generally the two-character IATA airline designator code and flight number. Code share alliances allow greater access to cities through a given airline’s network without having to offer extra flights, and makes connections simpler by allowing single bookings across multiple planes.

L Load Factor: Represents the percentage of aircraft seating capacity that is actually utilized and is calculated by dividing revenue passenger kilometers by available seat kilometers (ASKs).

R RASK: Operating revenue per available seat kilometer represents operating revenue divided by available seat kilometers.


Revenue Passenger: Represents the total number of paying passengers (which do not include passengers redeeming LifeMiles, frequent flyer miles or other travel awards) flown on all flight segments (with each connecting segment being considered a separate flight segment). RPK: Revenue passenger kilometers represent the number of kilometers flown by revenue passengers. RTK: Revenue ton kilometers represents the total cargo tonnage uplifted multiplied by the number of kilometers the cargo is flown.

T

Technical Dispatch Reliability: Represents the percentage of scheduled flights that are not delayed at departure more than 15 minutes or cancelled, in each case due to technical problems.

Y

Yield: Represents the average amount one passenger pays to fly one kilometer, or passenger revenue divided by revenue passenger kilometers (RPKs).

avianca holdings reports third quarter 2017 adjusted...

Documents