GOL records operating income of R$505 million and EBIT margin of 5% in 2014, 89.8% up on the previous year

São Paulo, March 30, 2015 – GOL Linhas Aéreas Inteligentes S.A. (BM&FBOVESPA: GOLL4 e NYSE: GOL), (S&P: B, Fitch: B-, Moody’s: B3), the largest low-cost and best-fare airline in Latin America, announces today its consolidated results for the fourth quarter and full year of 2014. All information is presented in accordance with International Financial Reporting Standards (IFRS) and in Brazilian reais (R$), and all comparisons are with the fourth quarter and full year of 2013, unless otherwise stated.

Highlights
Operating income (EBIT) of R$505 million in 2014, with an operating margin of 5.0%, up 89.8% compared to R$266 million recorded in 2013. In 4Q14, EBIT came to R$170.7 million, a 4.8% improvement over 4Q13, with a margin of 6.3%, up by 0.3 percentage point.

Net revenue reached R$10 billion in the year, 12.4% more than in 2013, being R$9.0 billion in passenger revenue and R$1 billion in ancillary revenues, increasing its share of total revenue from 9.3%, in 2013, to 10.1%. International revenue amounted to R$1.2 billion, equivalent to 12% of the total. In 4Q14, net revenue totaled R$2.7 billion, in line with 4Q 13.

EBITDAR came to R$1.813 billion, with a margin of 18.0%, 18.8% up vs. 2013 and the Company’s highest ever annual figure. In 4Q14, EBITDAR amounted to R$482.2 million, with a margin of 17.7%.

The consolidated load factor increased by 7 percentage points in the year, reaching 76.9%, with the domestic up by 7 percentage points to 77.8%, and international load factors up by 8.3 percentage points to 71%. In 4Q14, the consolidated load factor was 78.7%, 3.9 percentage points higher than 4Q13.

Net RASK came to R$20.33 cents in 2014, 12.7% more than 2013 and total CASK wasR$19.31 cents, up by 10,3%. CASK ex-fuel increased by 12.8% for the same period.

In 2014, GOL obtained neutral operating cash flow and closed the year with a cash position of R$2.5 billion, representing 25% of its last 12 months net revenue.

The financial leverage ratio (adjusted gross debt/EBITDAR) was 6.7x, versus 6.9x at the end of 2013, benefited by improved EBITDAR and partially affected by the 13.4% depreciation of the real.

In 2014, GOL continued with its Liability Management initiatives. Dollar-denominated debt fell by 5% or US$97 million over 2013 , while debt in Reais (ex-Smiles) remained flat.

Message from Management
GOL continued its recovery in 2014. Despite the challenging economic scenario, especially after the World Cup period, the Company generated consistent results as showed in its main indicators.

Annual net revenue totaled R$10 billion, a new Company record, led by the increase in international revenue to R$1.2 billion and the increase in ancillary revenue, which reached R$1.0 billion.

GOL captured 49% of domestic market growth in 2014. Domestic supply fell by 1.7%, thanks to the maintenance of the Company’s flexible capacity management strategy in place since April 2012, while demand for seats (RPK) grew by 9.8%, leading to an average domestic load factor of 77.8%, a new Company record.

Annual operating income (EBIT) came to R$505 million, virtually double the prior year’s figure of R$266 million, while the EBIT margin improved by 2 percentage points to 5%. In 4Q14, EBIT totaled R$171 million, with a margin of 6.3%, versus 6% in 4Q13. These results reflect the continuity and consistent delivery of our “Flight Plan”, launched in 2012. With this operating margin, operating cash generation was neutral, before oil hedge expenses. We closed 2014 with a cash position of R$2.5 billion, representing 25% of last 12 months net revenues.

The year was marked by the expansion of our route network through the addition of new routes and destinations, including Santiago (Chile), direct flights to Punta Cana (Dominican Republic), and the Fortaleza- Buenos Aires (Argentina) and Viracopos-Miami (EUA) routes. In Brazil, we began flying to Caldas Novas, Altamira and Carajás, and will begin flights to Ribeirão Preto in March 2015. We added five new destinations and 44 new domestic and international routes. The expansion is aligned with two important strategies: increasing our international presence and expanding services to regional destinations. We closed 2014 with flights to 71 destinations in 11 countries.

In 2014, we also achieved the leadership in the domestic market in terms of numbers of passengers transported, which reached 37.7 million customers, 3.5 million more than the second-place airline. According to Abracorp (Brazilian Association of Corporate Travel Agencies), the Company is also a leader in the corporate segment in number of ticket sold with a market share of 31.2%.

In February, we entered into a long-term strategic partnership and commercial cooperation agreement with Air France KLM, which acquired 1.5% of GOL’s total capital. In October, we also expanded our partnership with Aerolíneas Argentinas, when we began selling the airline’s tickets through our sales channels. TAP, Etihad and Aeroméxico were also added as codeshare partners. We closed the year with nine codeshare partnerships, offering even more destinations to our customers and aligned with our strategy to increase our Dollar revenue.

We also concluded implementation of the GOL+ project to improve comfort onboard, increasing the distance between all seats, and assuming the leadership with the highest offer of ANAC category A seats in the domestic market. On international flights, we offer our Comfort Class product, where as well as the above- mentioned increased space, we offer a blocked middle seat and additional on-board services, bonus miles and priority access. Since February 23, 2015, the Comfort Class product was expanded to all GOL international routes.

We launched Conte Comigo (Count on Me), an exclusive service inside an airport secured area (post security screening). Unprecedented in Brazil, the project was created to provide customers with additional support in case of questions or specific needs, equipped with self-service totems, phones connected directly to the Call Center and personal service whenever necessary. Sao Paulo-Congonhas and Rio de Janeiro-Santos Dumont airports are already equipped with this service and we will be extending it to other airports thro ughout 2015.

Aiming to standardize and simplify our dialogue with customers, we implemented new tools and functionalities with the main objective to improve our customer care service. Informing passengers of the status of their flight by e-mail or mobile SMS, which has been available since December, is one feature of this project.

We expanded the Ganhando Asas ( Gaining Wings) project to all airports where we operate in Brazil. This initiative is aimed at helping first-time fliers throughout the entire flight experience, from check-in to arrival. They all receive a commemorative badge, facilitating their identification by the Company’s attendants.

Combining customer comfort and enhanced efficiency, we added even more features in our self-service channels: airport totems, mobile site, new website and a smartphone app. We also launched in 2015 a new globally innovative functionality in our GOL app – geolocation, which allows customers to receive information on how long it should take to arrive at the airport.

Also in 2014, we launched Bagagem Expressa (Express Baggage), an exclusive service in Brazil giving passengers greater autonomy, allowing for self-weighting and tagging of their baggage at the self-service totems, as well as the functionality to pay for any excess luggage with a credit card, if necessary.

Safety is an absolute priority for our business. For the fourth consecutive time, we received the IOSA (Iata Operational Safety Audit) certification, valid until 2016, which is recognized throughout the world as the standard for evaluating an airline operational safety management.

As to the financial results, the annual net loss can be mainly explained by the devaluation of the Real against the Dollar and by the decision of unwinding our oil hedge positions aiming to limit losses from sharper decreases in oil commodity prices, resulting in negative shareholders’ equity. Our high liquidity and appropriate debt amortization profile, together with a liquid asset pool, created sufficient financial resilience to confront this period.

Continuing with our long-term strategy of strengthening our already recognized corporate governance practices, on January 22, 2015, we informed our shareholders of a proposed long-term structural solution to remove important regulatory restrictions on our capitalization capacity, giving us the same competitive condition as our competitors. At the extraordinary shareholders’ meeting held on March 23, 2015, the proposal was approved by 99% of the votes cast. The meeting was attended by shareholders representing 81.7% of GOL’s total capital stock (100% of common shares and 62.79% of preferred shares). The new structure will allow GOL, at the appropriate moment, to access capital markets for an eventual capitalization.

The macroeconomic scenario became even more challenging at the beginning of 2015. As part of our plan for this year, we will be concentrating on the domestic market and will continue to evaluate international opportunities. With the best value proposition for our customers, we will continue to prioritize the corporate segment. Our strategy for confronting this turbulence is to continue to focus on the values that have guided the Company: Safety, Intelligence, Service and Lowest Cost.

Once again, GOL would like to thank our customers for their increased loyalty, our employees and Team of Eagles for their commitment throughout the entire year, and our investors for their confidence, increasingly reinforcing our vision of being the best company to fly with, work for and invest in.

Paulo Sérgio Kakinoff
CEO of GOL Linhas Aéreas Inteligentes S.A.