News Column

CHC Group Provides Fiscal-2015, Long-Term Guidance, Reports Fiscal-2014 Full-Year, Fourth-Quarter Operating Results

July 9, 2014

  • Company Describes Trajectory for Growth, Profitability, Cash Flow
  • CHC Repurchases $65 Million of Bonds After End of Fiscal 2014
  • New Brazil, Poland Facilities Increase Capabilities, Value to Customers

    VANCOUVER, British Columbia--(BUSINESS WIRE)-- CHC Group Ltd. (NYSE:HELI), the parent company of CHC Helicopter, said it entered fiscal 2015 well positioned to deliver on its long-term financial priorities of strengthening the balance sheet, generating free cash flow and delivering profitable growth.

    Along with operating results for fiscal 2014, which ended April 30, the company today provided the first long-term guidance since its initial public offering in January 2014.

    Fiscal-2014 fourth-quarter revenue was $453 million, up 3 percent year-over-year. (Except where noted, all comparisons are to the same year-ago period.) A net loss of $26 million represented improvement of $3 million. Adjusted EBITDAR (earnings before interest, taxes, depreciation, amortization and rental costs), excluding special items, was $132 million for the quarter, down 4 percent. All references to EBITDAR in this release represent “adjusted EBITDAR excluding special items.”

    (Periods ended April 30; US$ in millions,

    except margin, shares, EPS data)

     

      Quarter   Full year
      FY13FY14% ChangeFY13FY14% Change
    As reported:                    
    Revenue   $ 439   $ 453   3 % $ 1,744   $ 1,765   1 %
    Operating revenue1   399   412   3 % 1,578   1,600   1 %
    Operating income   23   24   3 % 94   40   -58 %
    Net (loss)   (29 ) (26 ) 10 % (116 ) (171 ) -47 %
    Controlling interest   (35 ) (23 ) 33 % (119 ) (173 ) -44 %
    Non-controlling interest   6   (3 ) -149 % 3   2   -45 %
    Net (loss) per ordinary share2   $ (0.75 ) $ (0.29 ) 61 % $ (2.59 ) $ (3.09 ) -19 %

    Weighted average number of

    ordinary stock outstanding - basic

    and diluted

      46,519,484   79,845,327   72 % 46,519,484   55,919,484   20 %
    Adjusted3:                          
    EBITDAR excluding special items4   137   132   -4 % 484   471   -3 %
    Margin5   34 % 32 % -240 bps 31 % 29 % -130 bps
    Net loss6   (11 ) (14 ) -27 % (62 ) (97 ) -55 %
    Net loss per ordinary share7   $ (0.14 ) $ (0.17 ) -21 % $ (0.80 ) $ (1.24 ) -55 %
    Share count8   77,519,484   79,845,327     77,519,484   78,086,607    
    1.   Operating revenue is total revenue less reimbursable revenue which is costs reimbursed from customers.
    2. Net loss per ordinary share is calculated by net loss attributable to controlling interest divided by weighted average number of ordinary stock outstanding - basic and diluted.
    3. See a description of non-GAAP calculations and reconciliation to comparable GAAP measures on Pages 10, 11 and 12.
    4. For the third quarter of fiscal 2014, the impact of items related to the IPO was excluded from adjusted EBITDAR. See a description of non-GAAP calculations and reconciliation to comparable GAAP measures on Pages 10, 11 and 12.
    5. Adjusted EBITDAR margin is calculated as a percentage of operating revenue.
    6. Net loss, which excludes one-time IPO costs, asset dispositions, asset impairments, the revaluation of our derivatives and foreign-exchange (loss), and net income or loss attributable to non-controlling interests and debt extinguishment.
    7. Net loss per share is calculated by dividing adjusted net loss by adjusted share count.
    8. Adjusted share count is the number of ordinary shares outstanding at the IPO date, adjusted for the weighted average of shares issued subsequent to this date.


    William Amelio, CHC president and chief executive officer:

    “Major indicators about expected growth in oil-and-gas exploration and production remain positive, especially in deepwater and ultra-deepwater locations. We believe we are positioning CHC well to capture this growth, while delivering on our financial goals for fiscal 2015 and the longer term.”

    Joan Hooper, CHC chief financial officer:

    “Our team is focused on driving the right things: safe operations, customer satisfaction and operating efficiency. These priorities, along with a disciplined capital-allocation process, will enable us to grow profitably, reduce leverage and accelerate our timeline to become free-cash-flow positive.”

    RESULTS

    FINANCIAL PRIORITIES

    Balance Sheet:

  • CHC redeemed $130 million of senior secured notes in the quarter. Following the fourth quarter, the company made additional progress in reducing its debt by completing a $65 million bond-repurchase program. At the fiscal year-end, liquidity was a strong $651 million, and adjusted net debt to EBITDAR was 5.3 times.

    Adjusted EBITDAR:

  • Consolidated EBITDAR was $471 million for full-year fiscal 2014, down 3 percent in part because of a worldwide suspension of overwater flights with EC225 aircraft during much of the year.
  • Full-year adjusted EBITDAR from Helicopter Services, CHC’s flying unit, was up 4 percent. Within Heli-One, the world’s largest independent provider of helicopter maintenance, repair and overhaul (MRO) services, adjusted EBITDAR was down 40 percent.

    Growth:

  • Overall revenue growth was driven by a combination of new, higher-return contracts in multiple Helicopter Services regions, as well as by new power-by-the-hour, or PBH, contracts and other MRO work in Heli-One.
  • Total flying revenue for fiscal 2014 increased 1 percent, with the largest regional gains made in the North Sea. Full-year sales of third-party MRO services increased 5 percent.

    HELICOPTER SERVICES (flying):

  • In June, Statoil selected CHC to fly crews, on a five year contract, from Aberdeen or Sumburgh, U.K., to the new Mariner field 250 kilometers off the northeastern coast of Scotland. Mariner is the largest oil-and-gas field development on the U.K. Continental Shelf in more than a decade, with gross investment of more than $7 billion.
  • Separately, in May Norway-based Statoil awarded CHC a contract to provide vital helicopter transportation to a new exploration rig in the Atlantic Ocean, off the coast of Newfoundland. Under the contract CHC Canada will operate two Sikorsky S-92 helicopters between a base in St. John’s and Statoil’s West Hercules rig.
  • In May, CHC opened a new, larger facility for its existing subsidiary operations at Cabo Frio International Airport, in Brazil’s oil-rich Campos Basin. The hangar improves and streamlines services to customers and passengers, increases aircraft capacity for anticipated long-term growth, and accommodates advanced maintenance operations.

    HELI-ONE (maintenance, repair and overhaul):

  • Last month, Heli-One took a big step to address current and anticipated needs of MRO customers in Europe and the Middle East, particularly those flying “heavy” helicopters, by formally opening a new, 65,000 square-foot MRO hangar in Rzeszow, Poland. Since February 2013, Heli-One had occupied a temporary facility in Rzeszow, an area recognized for deep aviation instruction, experience and talent.
  • Among recent MRO new-business wins were a three-year agreement to provide component and engine services for AAR Airlift’s 20 Sikorsky S-61 helicopters; one to provide exclusive component services for Airbus AS350 aircraft operated by Air Methods Corp.; and a five-year, PBH support contract for a Sikorsky S-76 at Weststar Aviation Services.

    GUIDANCE

    According to Mr. Amelio, CHC is executing a long-term plan to strengthen the company’s balance sheet, expand EBITDAR dollars and margin, and drive disciplined growth. Those financial priorities, he said, include determined action to reduce leverage and become free-cash-flow positive sooner than originally planned.

    CHC’s long-term guidance, Mr. Amelio said, is based on:

    1) An opportunity for significant, long-term growth in a fundamentally strong market, particularly deepwater and ultra-deepwater offshore oil-and-gas transportation

    2) The company’s expansive global footprint, in both established and newer O&G regions, and safety leadership

    3) Operating excellence, enabled by an ambitious transformation and continuous improvement, and

    4) The company’s commitment to disciplined growth.

    FULL-YEAR FY2015

     
    (US$ in millions, except % changes)   Guidance
    Revenue growth   Mid to high single-digit
    EBITDAR growth   High single to low double-digits
    Lease expense   $275 to $295
    Interest expense   $135 to $150
    Tax expense   $30 to $40
    Net expansionary capex   $105 to $135
    Maintenance capex   $90 to $110
    Free cash flow   -$180 to -$210

    LONG-TERM, FY2015 - FY2018

     
    (US$ millions, except % changes)   Guidance
    Revenue CAGR   High single-digit to mid-teens
    EBITDAR CAGR   High teens to mid-20s
    Free cash flow   Exit fiscal 2017 FCF positive


    About CHC

    CHC Helicopter is a leader in enabling customers to go further, do more and come home safely, including oil and gas companies, government search-and-rescue agencies and organizations requiring helicopter maintenance, repair and overhaul services through the Heli-One segment. The company operates about 240 aircraft in approximately 30 countries around the world.

    Cautionary Note on Forward-Looking Statements

    This press release contains forward-looking statements and information within the meaning of certain securities laws, including the “safe harbor” provision of the United States Private Securities Litigation Reform Act of 1995, the United States Securities Act of 1933, as amended, the United States Securities Exchange Act of 1934, as amended and other applicable securities legislation. All statements, other than statements of historical fact included in this press release regarding our strategy, future operations, projections, conclusions, forecasts, fiscal year 2015 guidance and other statements are “forward-looking statements”. While these forward-looking statements represent our best current judgment, actual results could differ materially from the conclusions, forecasts or projections contained in the forward-looking statements. Certain material factors or assumptions were applied in drawing a conclusion or making a forecast or projection in the forward-looking information contained herein. Such factors include: competition in the markets we serve, our ability to secure and maintain long-term support contracts, our ability to maintain standards of acceptable safety performance, political, economic, and regulatory uncertainty, problems with our non-wholly owned entities, including potential conflicts with the other owners of such entities, exposure to credit risks, our ability to continue funding our working capital requirements, risks inherent in the operation of helicopters, unanticipated costs or cost increases associated with our business operations, exchange rate fluctuations, trade industry exposure, inflation, ability to continue maintaining government issued licenses, necessary aircraft or insurance, loss of key personnel, work stoppages due to labor disputes, and future material acquisitions or dispositions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual outcomes may vary materially from those indicated. The Company disclaims any intentions or obligations to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Please refer to our annual report on Form 10-K and quarterly reports on Form 10-Q, and our other filings, in particular any discussion of risk factors or forward-looking statements, which are filed with the SEC and available free of charge at the SEC’s website (www.sec.gov), for a full discussion of the risks and other factors that may impact any estimates or forward-looking statements made herein.

    Consolidated Statements of Operations

    (Expressed in thousands of United States dollars)

    (Unaudited)

     
    Three months ended Year ended
    April 30, 2013   April 30, 2014April 30, 2013   April 30, 2014
    Operating revenue $ 398,545 $ 411,993 $ 1,578,309 $ 1,600,310
    Reimbursable revenue 40,608   40,789   165,538   164,669  
    Revenue 439,153 452,782 1,743,847 1,764,979
    Operating expenses:
    Direct costs (338,708 ) (367,124 ) (1,391,837 ) (1,460,037 )
    Earnings from equity accounted investees 2,031 1,250 4,718 7,240
    General and administration costs (17,814 ) (17,248 ) (74,113 ) (95,087 )
    Depreciation (47,280 ) (38,415 ) (131,926 ) (144,573 )
    Restructuring costs (2,359 ) (10,976 )
    Asset impairments (5,763 ) (2,977 ) (29,981 ) (25,933 )
    Loss on disposal of assets (6,464 ) (4,688 ) (15,483 ) (6,631 )
    (416,357 ) (429,202 ) (1,649,598 ) (1,725,021 )
    Operating income 22,796 23,580 94,249 39,958
    Interest on long-term debt (33,250 ) (35,586 ) (127,199 ) (153,222 )
    Foreign exchange gain (loss) (18,365 ) 18,448 (11,383 ) (6,028 )
    Other financing charges 3,706   (21,638 ) (18,729 ) (23,253 )
    Loss from continuing operations before income tax (25,113 ) (15,196 ) (63,062 ) (142,545 )
    Income tax expense (3,846 ) (10,885 ) (54,452 ) (28,374 )
    Loss from continuing operations (28,959 ) (26,081 ) (117,514 ) (170,919 )
    Earnings from discontinued operations, net of tax 1     1,025    
    Net loss $ (28,958 ) $ (26,081 ) $ (116,489 ) $ (170,919 )
    Net earnings (loss) attributable to:
    Controlling interest $ (34,830 ) $ (23,224 ) $ (119,436 ) $ (172,548 )
    Non-controlling interests 5,872   (2,857 ) 2,947   1,629  
    Net loss $ (28,958 ) $ (26,081 ) $ (116,489 ) $ (170,919 )
     

    Net loss per ordinary share attributable to controlling

    interest - basic and diluted:

    Continuing operations $ (0.75 ) $ (0.29 ) $ (2.59 ) $ (3.09 )
    Discontinued operations $ $ $ 0.02 $
    Net loss per ordinary share(1) $ (0.75 ) $ (0.29 ) $ (2.57 ) $ (3.09 )

    Weighted average number of shares outstanding - basic

    and diluted:

    46,519,484 79,845,327 46,519,484 55,919,484
    (1) Net loss per ordinary share is calculated by net loss attributable to controlling interest divided by weighted average number of ordinary stock outstanding - basic and diluted.

    Consolidated Balance Sheets

    (Expressed in thousands of United States dollars)

    (Unaudited)

       
    April 30, 2013April 30, 2014
    Assets
    Current assets:
    Cash and cash equivalents $ 123,801 $ 302,522

    Receivables, net of allowance for doubtful accounts of $4.3 million and $2.3

    million, respectively

    317,302 292,339
    Income taxes receivable 25,871 28,172
    Deferred income tax assets 49 60
    Inventories 105,794 130,891
    Prepaid expenses 22,219 27,683
    Other assets 56,083   49,209  
    651,119 830,876
    Property and equipment, net 1,075,254 1,050,759
    Investments 26,896 31,351
    Intangible assets 197,810 177,863
    Goodwill 430,462 432,376
    Restricted cash 29,639 31,566
    Other assets 439,789 519,306
    Deferred income tax assets 10,752 3,381
    Assets held for sale 32,047   26,849  
    $ 2,893,768   $ 3,104,327  
    Liabilities and Shareholders' Equity
    Current liabilities:
    Payables and accruals $ 420,406 $ 355,341
    Deferred revenue 27,652 30,436
    Income taxes payable 48,073 41,975
    Deferred income tax liabilities 618 98
    Current facility secured by accounts receivable 53,512 62,596
    Other liabilities 47,791 55,170
    Current portion of long-term debt obligations 2,138   4,107  
    600,190 549,723
    Long-term debt obligations 1,475,087 1,546,155
    Deferred revenue 55,990 81,485
    Other liabilities 246,455 287,385
    Deferred income tax liabilities 10,627   10,665  
    Total liabilities 2,388,349 2,475,413
    Redeemable non-controlling interests (8,262 ) (22,578 )
    Capital stock: Par value $0.0001:
    Authorized: 2,000,000,000
    Issued: 46,519,484 and 80,519,484 5 8
    Additional paid-in capital 1,696,066 2,039,371
    Deficit (1,092,555 ) (1,265,103 )
    Accumulated other comprehensive loss (89,835 ) (122,784 )
    513,681   651,492  
    $ 2,893,768   $ 3,104,327  

    Consolidated Statements of Cash Flows

    (Expressed in thousands of United States dollars)

    (Unaudited)

     
    Year ended
    April 30, 2013   April 30, 2014
    Cash provided by (used in):
    Operating activities:
    Net loss $ (116,489 ) $ (170,919 )
    Earnings from discontinued operations, net of tax 1,025    
    Loss from continuing operations (117,514 ) (170,919 )
    Adjustments to reconcile net loss to cash flows provided by (used in) operating activities:
    Depreciation 131,926 144,573
    Loss on disposal of assets 15,483 6,631
    Asset impairments 29,981 25,933
    Earnings from equity accounted investees less dividends received (2,669 ) (3,930 )
    Deferred income taxes 20,586 6,705
    Non-cash stock-based compensation expense 446 25,504
    Amortization of unfavorable contract credits (2,842 )
    Amortization of lease related fixed interest rate obligations (2,803 ) (1,226 )
    Amortization of long-term debt and lease deferred financing costs and debt extinguishment 9,952 20,438
    Non-cash accrued interest income on funded residual value guarantees (6,990 ) (6,085 )
    Mark to market loss on derivative instruments 405 3,648
    Non-cash defined benefit pension expense (income) 7,398 (879 )
    Defined benefit contributions and benefits paid (46,673 ) (44,980 )
    Unrealized loss on foreign currency exchange translation 6,290 7,213
    Increase to deferred lease financing costs (4,076 ) (6,845 )
    Other 9,765 3,811
    Increase (decrease) in cash resulting from changes in operating assets and liabilities (47,462 ) 2,737  
    Cash provided by operating activities 1,203   12,329  
    Financing activities:
    Sold interest in accounts receivable, net of collections 7,262 8,122
    Net proceeds from issuance of capital stock 317,804
    Proceeds from issuance of senior secured notes 202,000
    Proceeds from issuance of senior unsecured notes 300,000
    Long-term debt proceeds 1,168,745 760,000
    Long-term debt repayments (1,178,035 ) (889,527 )
    Redemption of senior secured notes (133,900 )
    Increase in senior secured notes, senior credit facility and revolver deferred financing costs (3,971 ) (14,296 )
    Related party loans 25,000   (25,148 )
    Cash provided by financing activities 221,001   323,055  
    Investing activities:
    Property and equipment additions (427,879 ) (646,753 )
    Proceeds from disposal of property and equipment 353,341 618,282
    Helicopter deposits net of lease inception refunds (71,675 ) (112,469 )
    Restricted cash (5,753 ) 297  
    Cash used in investing activities (151,966 ) (140,643 )
    Cash provided by continuing operations 70,238 194,741
    Cash flows provided by (used in) discontinued operations:
    Cash flows provided by operating activities 1,025
    Cash flows used in financing activities (1,025 )  
    Cash provided by (used in) discontinued operations
    Effect of exchange rate changes on cash and cash equivalents (2,076 ) (16,020 )
    Change in cash and cash equivalents during the period 68,162 178,721
    Cash and cash equivalents, beginning of period 55,639   123,801  
    Cash and cash equivalents, end of period $ 123,801   $ 302,522  

    Segment Performance

    (Expressed in thousands of United States dollars)

    (Unaudited)

    Segment Third-party Revenue

       
    Three months ended Year ended
    April 30, 2013   April 30, 2014April 30, 2013   April 30, 2014
    Helicopter Services operating revenue $ 354,604 $ 364,358 $ 1,437,865 $ 1,453,039
    Reimbursable revenue 40,608   40,789   165,538   164,669  
    Helicopter Services total external revenue 395,212 405,147 1,603,403 1,617,708
    Heli-One external revenue 43,941   47,635   140,444   147,271  
    Consolidated external revenue $ 439,153   $ 452,782   $ 1,743,847   $ 1,764,979  
     

    EBITDAR Summary

    Three months ended Year ended
    April 30, 2013April 30, 2014April 30, 2013April 30, 2014
    Helicopter Services $ 125,548 $ 128,562 $ 469,651 $ 487,838
    Heli-One 30,389 21,288 91,700 55,334
    Corporate (17,814 ) (17,248 ) (74,113 ) (95,087 )
    Eliminations (1,115 ) (1,710 ) (2,887 ) (3,097 )
    Adjusted EBITDAR(1) $ 137,008   $ 130,892   $ 484,351   $ 444,988  
    (1) See a description of non-GAAP calculations and reconciliation to comparable GAAP measures below.


    Non-GAAP Financial Measures:

    This press release includes non-GAAP financial measures, including: adjusted net earnings (loss); earnings before interest, taxes, depreciation, amortization and aircraft lease rent and associated costs (“Adjusted EBITDAR”) referred to above as EBITDAR; adjusted net loss per ordinary share, which is calculated by dividing adjusted net loss by the number of ordinary shares outstanding at our IPO date, adjusted for the weighted average of shares issued subsequent to this date, that are not required by, or presented in accordance with U.S. generally accepted accounting principles (“GAAP”). Adjusted EBITDAR also excludes special items related to our initial public offering and were incurred in fiscal 2014. These non-GAAP measures are not performance measures under GAAP and should not be considered as alternatives to net earnings (loss) or any other performance or liquidity measures derived in accordance with GAAP. In addition, these measures may not be comparable to similarly titled measures of other companies. CHC has provided a reconciliation of these non-GAAP measures to the most directly comparable GAAP measure below and above. CHC has chosen to include adjusted net earnings (loss) as we consider this to be a useful measure of our results before asset impairments, gain or loss on the disposal of assets and foreign exchange gains or losses. We have chosen to include Adjusted EBITDAR and Adjusted EBITDAR excluding special items, as we consider these to be significant indicators of our financial performance and we use these measures to assist us in allocating available capital resources. CHC has provided a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measure below and has presented a detailed discussion of its reasons for including non-GAAP financial measures and the limitations associated with those measures as part of the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contained in our Annual Report on Form 10-K. CHC encourages investors to review the reconciliation and the non-GAAP discussion in conjunction with our presentation of these non-GAAP financial measures.

    EBITDAR - Non-GAAP Reconciliation

    (Expressed in thousands of United States dollars)

    (Unaudited)

       
    Three months ended Year ended
    April 30, 2013   April 30, 2014April 30, 2013   April 30, 2014
    Helicopter Services $ 125,548 $ 128,562 $ 469,651 $ 487,838
    Heli-One 30,389 21,288 91,700 55,334
    Corporate (17,814 ) (17,248 ) (74,113 ) (95,087 )
    Eliminations (1,115 ) (1,710 ) (2,887 ) (3,097 )
    Adjusted EBITDAR137,008130,892484,351444,988
    Helicopter lease and associated costs (52,346 ) (61,232 ) (201,736 ) (227,893 )
    Depreciation (47,280 ) (38,415 ) (131,926 ) (144,573 )
    Restructuring (2,359 ) (10,976 )
    Asset impairments (5,763 ) (2,977 ) (29,981 ) (25,933 )
    Loss on disposal of assets (6,464 ) (4,688 ) (15,483 ) (6,631 )
    Operating income22,79623,58094,24939,958
    Interest on long-term debt (33,250 ) (35,586 ) (127,199 ) (153,222 )
    Foreign exchange gain (loss) (18,365 ) 18,448 (11,383 ) (6,028 )
    Other financing charges 3,706   (21,638 ) (18,729 ) (23,253 )
    Loss from continuing operations before income tax(25,113)(15,196)(63,062)(142,545)
    Income tax expense (3,846 ) (10,885 ) (54,452 ) (28,374 )
    Loss from continuing operations (28,959)(26,081)(117,514)(170,919)
    Earnings from discontinued operations, net of tax 1     1,025    
    Net loss$(28,958)$(26,081)$(116,489)$(170,919)
    Net earnings (loss) attributable to:
    Controlling interest $ (34,830 ) $ (23,224 ) $ (119,436 ) $ (172,548 )
    Non-controlling interests $ 5,872   $ (2,857 ) $ 2,947   $ 1,629  
    Net loss$(28,958)$(26,081)$(116,489)$(170,919)

    EBITDAR excluding special items - Non-GAAP Reconciliation

    (Expressed in thousands of United States dollars)

    (Unaudited)

       
    Three months ended Year ended
    April 30, 2013   April 30, 2014April 30, 2013   April 30, 2014
    Adjusted EBITDAR $ 137,008 $ 130,892 $ 484,351 $ 444,988
    Stock-based compensation1 871 23,389
    Expenses related to the initial public offering2 2,563
    Adjusted EBITDAR excluding special items$137,008$131,763$484,351$470,940

    Adjusted net earnings (loss) - Non-GAAP Reconciliation

    (Expressed in thousands of United States dollars)

    (Unaudited)

       
    Three months ended Year ended
    April 30, 2013   April 30, 2014April 30, 2013   April 30, 2014
    Net loss attributable to controlling interest $ (34,830 ) $ (23,224 ) $ (119,436 ) $ (172,548 )
    Stock-based compensation1 871 23,389
    Expenses related to the initial public offering2 2,563
    Asset impairments 5,763 2,977 29,981 25,933
    Loss on disposal of assets 6,464 4,688 15,483 6,631
    Foreign exchange loss (gain) 18,365 (18,448 ) 11,383 6,028
    Debt extinguishment3 7,668 7,668
    Unrealized loss (gain) on derivatives (6,479 ) 11,878   405   3,647  
    Adjusted net loss$(10,717)$(13,590)$(62,184)$(96,689)
    (1)   Stock-based compensation relates to the expense of prior equity plans triggered by the initial public offering.
    (2) Expenses related to the initial public offering, including costs related to restructuring our compensation plan.
    (3) Loss on extinguishment incurred on the redemption of $130.0 million of our senior secured notes at a redemption price of 103% of the principal amount.

    Reconciliation of Adjusted EBITDAR excluding special items to Adjusted Net Loss

    (Expressed in thousands of United States dollars, except share and per share amounts)

    (Unaudited)

       
    Three months ended Year ended
    April 30, 2013   April 30, 2014April 30, 2013   April 30, 2014
    Adjusted EBITDAR excluding special items $ 137,008 $ 131,763 $ 484,351 $ 470,940
    Helicopter lease and associated costs (52,346 ) (61,232 ) (201,736 ) (227,893 )
    Depreciation (47,280 ) (38,415 ) (131,926 ) (144,573 )
    Restructuring (2,359 ) (10,976 )
    Debt extinguishment 7,668 7,668
    Unrealized loss (gain) on derivatives (6,479 ) 11,878 405 3,647
    Interest on long-term debt (33,250 ) (35,586 ) (127,199 ) (153,222 )
    Other financing charges 3,706 (21,638 ) (18,729 ) (23,253 )
    Income tax expense (3,846 ) (10,885 ) (54,452 ) (28,374 )
    Earnings from discontinued operations, net of tax 1 1,025
    Loss (earnings) attributable to non-controlling interests (5,872 ) 2,857   (2,947 ) (1,629 )
    Adjusted net loss$(10,717)$(13,590)$(62,184)$(96,689)
    Issued share count at April 30, 2014 77,519,484 79,845,327 77,519,484 78,086,607





    CHC Group Ltd.

    INVESTORS

    Lynn Antipas Tyson

    Vice President, Investor Relations

    +1 914-485-1150

    lynn.tyson@chc.ca

    or

    MEDIA

    T.R. Reid

    Vice President, Global Communications

    +1 512-869-9094

    t.r.reid@chc.ca

    Source: CHC Group Ltd.


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