GOL Announces its 1Q12 Results

GOL Linhas Aéreas Inteligentes S.A.,“GLAI”, (BM&FBovespa: GOLL4 and NYSE: GOL), (S&P:
B+; Fitch: B+, Moody`s: B3), the largest low-cost and low-fare airline in Latin America, announces today its results for the first quarter of 2012 (1Q12). All the information herein is presented in accordance with International Financial Reporting Standards (IFRS) and in Brazilian Reais (R$), and all comparisons are with the first quarter of 2011 (1Q11). All information related to the 1Q11 considers the financial statements filed on March 27, 2012, as Notice to the Market announced on the same date.

The quarter’s results are consolidated and incorporate 100% of Webjet’s results.
1Q12 HIGHLIGHTS
Consolidated CASK ex–fuel came to 8.63 cents (R$), reflecting the Company’s efforts to reduce operating costs in 2011
and at the beginning of 2012, besides the initial steps of coordination between both operations, GOL and Webjet, in order
to achieve a CASK ex-fuel compatible with its business model apart from external variables that affects the operation.
In March 2012, the Company announced an initial reduction of approximately 100 GOL and Webjet flights. Given
the need to adjust to the new operating capacity and macroeconomic environment, the Company is adopting a series of
measures to contain operating costs, including a review of its fixed costs, in line with its strategic goals and constant
pursuit of increased efficiency, competitiveness and profitability.
Consolidated net revenue totaled R$2,166.1mn in 1Q12, 14.3% up on the R$1,895.7mn recorded in the same
period last year.
Consolidated ancillary revenue increased by 26.0%, from R$191.9mn, in 1Q11, to R$241.8mn, representing 11.2% of
total consolidated net revenue (versus 10.1% in 1Q11).
GOL reported a consolidated operating income (EBIT) of R$7.3mn in 1Q12, with a positive operating margin of
0.3%. Webjet, a 100% wholly-owned Company subsidiary, posted a double digit operating margin (EBIT) in 1Q12,
chiefly due to the synergies between the two operations.
GOL retained a strong consolidated cash position closing the quarter at around R$2.2bn, equivalent to around
27.6% of LTM net revenue.
GOL posted a 1Q12 consolidated net loss of R$41.4mn, with a negative net margin of 1.9%, versus net income of
R$69.4mn and a net margin of 3.7% in 1Q11.

MESSAGE FROM MANAGEMENT
Confidence and determination are the Company’s watchwords at the moment – confidence that GOL is on the right path and
determination to do whatever it takes to recover positive margins.
GOL is announcing its results for the first quarter of 2012, with the adoption of measures to bring its capacity and cost
structure in line with the new Brazil and global macroeconomic situation.
At the beginning of March, GOL and Webjet announced a reduction of around 100 flights in order to keep domestic supply in
2012 flat in relation to the previous year, compatible with the new domestic demand scenario. Today, however, GOL
announced that its new target for 2012 is to reduce domestic supply by up to 2% over 2011. The Company is determined to do
everything possible to help discipline and rationalize a market that has been growing in an unsustainable manner, a situation
that could well jeopardize the health of the industry in the midterm.
First-quarter CASK ex–fuel of 8.63 cents (R$) reflects the Company’s efforts to reduce operating costs in 2011 and at the
beginning of 2012. Low costs have always constituted GOL’s main competitive advantage. The first figures of the year show
that the measures has produced results. Additional cost optimization projects are being implemented and the Company is
confident in the success of its strategy.
GOL and Webjet’s results, despite all the cost pressure from current oil prices and the unfavorable Real/Dollar exchange rate,
underlines Company’s confidence in the low-cost model and opens new opportunities for synergies and improved practices in
both airlines.
GOL closed 1Q12 with a cash position of R$2.2 billion and no refinancing pressure for the next three years, factors have
contributed to the implementation of the Company’s strategy in an adverse economic scenario. GOL will continue to focus on
maintaining high liquidity and an appropriate debt profile in the coming quarters..
GOL is constantly evaluating opportunities for augmenting its platform and increasing passenger services. This quarter, GOL
NO AR (GOL ON AIR), the free on-board entertainment service was available on 40% of GOL’ unit flights, representing around
350 departures per day. The on-board sales service also continued to expand and is already available on around 250 daily
flights.
In line with its pursuit of additional revenue sources, the Company received authorization from Anac (Brazil’s Civil Aviation
Authority) to undertake conventional and electrostatic painting, weighing and recalculation services for other aircraft models
belonging to other airlines in its Maintenance Center at Confins Airport in Belo Horizonte.
GOL’s strategy remains the same – prioritizing simplicity above everything else. Once again GOL’s team has demonstrated
confidence, determination and commitment, always aligned with its values: safety, focus on the client, sustainability,
innovation and profitability.
These are the attitudes that are making GOL increasingly the best company to fly with, work for and invest in.
Constantino de Oliveira Junior
Founder and CEO of GOL Linhas Aéreas Inteligentes S.A.

SUPPLY (ASK)
GOL’s domestic route network recorded a 3.6% upturn in supply over 1Q11, chiefly due to the increase in the number of
aircraft (120 aircraft in 1Q12, versus 115 in 1Q11). Supply was also partially impacted by the 3.6% reduction in productivity
from 13.3 block hours/day in 1Q11 to 12.9 block hours/day in 1Q12, and the 4.4% reduction in the average stage length from
930 km to 889 km in the same period. In March 2012, the Company announced an initial cutback of around 70 flights on both
GOL’s and Webjet’s routes. However, this figure is now close to 100 flights. The discontinuation criteria were: (i) flights with
low profitability; (ii) flights with longer stretches and; (iii) night flights (early hours of the morning). The Company’s target is
to cut domestic supply by 2% in 2012.

In the same period, international supply fell by 24.4% due to: (i) the discontinuation of international charter flights due to the
return of three B767 aircraft; and (ii) the discontinuation of flights to Bogotá, in Colombia.
DEMAND (RPK) and LOAD FACTOR
GOL’s domestic demand fell by 4.7% over 1Q11, chiefly due to the slowing of Brazil’s economy, together with the 2.5%
upturn in consolidated yields. Demand on GOL’s international route network declined by 16.7% year-on-year, primarily
due to the discontinuation of flights to Bogotá, Colombia, and the winding up of international charter flights with the B767
aircraft.
As a result of the above, GOL’s load factor averaged 66.6% in 1Q12, 4.4 p.p. down on the 71.0% reported in 1Q11

NET REVENUE
Consolidated net revenue came to R$2,166.1mn in 1Q12, 14.3% up on the R$1,895.7mn reported in 1Q11, mainly due to
the incorporation of Webjet’s 1Q12 revenue of R$319.1mn. Total consolidated net revenue per ASK (RASK) edged down by
0.7% year-on-year.

The 12.9% positive variation in consolidated net passenger revenue was chiefly due to the 10.2% upturn in
consolidated demand, as a result of the incorporation of Webjet’s route network performance into GOL’s consolidated
result, partially offset by the 1.9% period decline in PRASK. In order to improve PRASK, the Company announced a
new domestic supply target of 2% less than the 2011 figure.
Consolidated ancillary revenue came to R$241.8mn, 26.0% up on the R$191.9mn recorded in 1Q11, chiefly due to: (i) the
incorporation of Webjet’s ancillary revenue; (ii) the 10% increase in revenue from GOL’s cargo operations; (iii) the 20% upturn
in GOL’s revenue from flight rebooking charges, passenger services and ticket refunds; and (iv) 11.0% increase in
revenues from Smiles program. Consolidated ancillary revenue per ASK increased by 9.5% year-on-year.
OPERATING COSTS AND EXPENSES
Total consolidated operating costs and expenses stood at R$2,158.8mn, 22.6% more than in 1Q11. Total CASK came to
15.43 cents (R$), 6.6% up year-on-year, while CASK excluding fuel expenses (CASK ex-fuel) fell by 3.9% to 8.63 cents (R$).
In 1Q12, Webjet’s costs and expenses of R$275.1mn were incorporated into GOL’s result and there were no non-recurring
items in the consolidated result.

Aircraft fuel costs per ASK totaled 6.80 cents (R$) in 1Q12, 23.6% up on 1Q11, chiefly due to the 21.8% increase in the
price of jet fuel, as well as the 16.7% consolidated upturn in fuel consumption. Fuel expenses accounted for around 44%
of GOL’s total fourth-quarter consolidated expenses (Webjet’s fuel expenses accounted for around 51.0% of total
operating costs).

Salaries, wages and benefits per ASK came to 2.91 cents (R$) in 1Q12, 1.5% down on 1Q11. In nominal terms,
however, there was a 13.3% upturn, primarily due to: (i) the impact of the 6.5% pay rise awarded for 2012 on payroll
expenses; (ii) the 18% increase in the number of consolidated hours flown; and (iii) the 9.8% increase in the Company’s
consolidated workforce due to the incorporation of Webjet into the Company’s results.
Aircraft leasing costs per ASK stood at 1.01 cents (R$) in 1Q12, 4.0% down year-on-year. In nominal terms, however,
they moved up by 10.5%, due to the incorporation of 18 Webjet aircraft under operational leasing contracts into GOL’s
result and the 6.2% average depreciation of the Real against the Dollar, partially offset by the period return of three B767
aircraft. At the end of the quarter, the Company had 100 aircraft under operational leasing contracts, versus 86 in 1Q11.
Sales and marketing expenses per ASK amounted to R$0.66 cents (R$), 12.1% less than in 1Q11. In nominal terms,
they remained virtually flat.
Landing fees per ASK stood at R$1.02 cents (R$), 45.1% more than in 1Q11, due to: (i) the negative impact of the new
landing and navigation fee calculation methodology introduced by Infraero in 2011; (ii) the 24.4% upturn in the number of
departures as a result of Webjet’s operations; and (iii) the 6.2% average depreciation of the Real against the Dollar, which
had an adverse impact on the Company’s international operations.
Aircraft and traffic servicing expenses per ASK fell by 1.4% over 1Q11 to 0.88 cents (R$), but climbed by 13.5% in
nominal terms, due to: (i) the 24.4% upturn in the number of arrivals and departures, mainly as a result of Webjet’s
operations – operational volume impacts expenses from handling, collection and forwarding, among others; and (ii) the
6.2% average depreciation of the Real against the Dollar, which had an adverse impact on the Company’s international
operations.
Maintenance, materials and repairs per ASK came to 0.44 cents (R$), 32.9% down on 1Q11, primarily due to the
reduced number of engine removals and the decline in GOL’s average unit engine maintenance cost as a result of the
benefits from the maintenance agreement entered into with Delta Tech Ops in 2011 (see the Notice to the Market of
February 3, 2011), partially offset by the incorporation of Webjet’s maintenance expenses and the 6.2% average
depreciation of the Real against the U.S. dollar, given that most maintenance expenses are dollar-pegged.
Depreciation and amortization per ASK increased by 14.7% over 1Q11 to 0.85 cents (R$), due to the higher number of
aircraft under financial leasing (45 in 1Q12, versus 39 in 1Q11), the addition of six Boeing 737-300s from Webjet owned by
the Company, and the upturn in the depreciation of estimated aircraft reconfiguration costs which will be incurred when the
aircraft are returned and costs from improvements related to major engine maintenance established in the contracts.

 

Source: GOL