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CHC Helicopter Reports Revenue of $447m, EBITDAR of $126m in Fiscal-2013 Second Quarter

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VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 12/11/12 -- Revenue and earnings were up in CHC Helicopter's fiscal second-quarter 2013, as the company continues to transform itself into the most capable and efficient global helicopter-services operator.

CHC's revenue for the quarter, which ended Oct. 31, increased 6 percent from the same period a year ago, to $447 million. It was the seventh straight quarter of higher revenue and earnings since the company started its ambitious transformation. Net earnings were $7 million, compared with a net loss of $6 million in the FY12 second quarter.

Earnings before interest, taxes, depreciation, amortization and aircraft rental costs (EBITDAR), were $126 million, up 17 percent from the year-ago quarter. EBITDAR is CHC's primary measure of operational profitability.

Second Quarter Year-to-Date(U.S.$ in Change Change millions) FY13 FY12 (ii) FY12 FY11 (ii) ------------------------------------------------------------Revenue $ 447 $ 423 6% $ 863 $ 833 4%EBITDAR(i) $ 126 $ 107 17% $ 227 $ 208 9%EBITDA(i) $ 77 $ 65 19% $ 130 $ 124 4%(i) Non-GAAP financial measure. See reconciliation to applicable GAAPmeasure below.(ii) All growth rates in this release are year-over-year unless otherwisenoted.



The continued improvement spanned both CHC's flying and Heli-One business segments. Flying revenue rose 5 percent and EBITDAR grew 13 percent. For Heli-One, which provides maintenance, repair and overhaul (MRO) services, third-party customers sales were 11 percent higher and EBITDAR increased 48 percent.

William Amelio, CHC's president and chief executive officer, said the second quarter showed how the company is transforming its tools, systems and processes. Those changes are contributing to improving operating performance.

"Our people are also making sure we deliver on our purpose: to provide unmatched helicopter services that enable customers to go further, do more and come home safely," said Mr. Amelio. "The second quarter provided two vivid illustrations - one involving superb in-flight management of a crippled aircraft, the other an extraordinary evacuation of more than 270 customers from a North Sea oil-production platform that was in distress.

"Our objective isn't simply for CHC to be the largest and most profitable helicopter-services company. We're determined to be the best at all that we do for our customers."

BUSINESS HIGHLIGHTS

Helicopter Services (flying):

-- Flying results were driven by revenue and EBITDAR gains in the Americas (mainly Brazil), Western North Sea (United Kingdom) and Africa Euro- Asia. Sales were also up in Asia-Pacific.-- Significant wins in the period included new contracts with Marathon in the U.K., Eni in Australia and Petronas in Mozambique.-- During the quarter, Atlantic Aviation - a partnership between Jagal Group and CHC - received its long-awaited Air Operating Certificate in Nigeria. Atlantic Aviation has twin-engine Sikorsky S76C+ medium-lift helicopters to begin its support of Nigeria's fast-growing oil-and-gas industry.



Heli-One (MRO):

-- Among notable contracts secured in the second quarter, AAR, a global aerospace and defense supplier, selected Heli-One to complete 20 engine overhauls.-- During the quarter the company delivered the first of three customized Super Puma aircraft commissioned by the Los Angeles County Sheriff's Department.-- Heli-One further broadened its range of services by adding four-year inspections of AW139s to capabilities at the Stavanger, Norway, operation.



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 division. The company is headquartered in Vancouver and operates more than 240 aircraft in about 30 countries around the world.

Segment Performance (Unaudited)(U.S.$ in thousands)----------------------------------------------------------------------------Segment Third Party Revenue For the three months ended For the six months ended October 31, October 31, ---------------------------------------------------- 2012 2011 2012 2011----------------------------------------------------------------------------Helicopter Services $ 402,617 $ 383,279 $ 792,521 $ 756,573MRO 42,488 38,409 67,034 73,297Corporate and Other 1,681 1,312 3,300 2,779 ---------------------------------------------------- Consolidated totals $ 446,786 $ 423,000 $ 862,855 $ 832,649 ---------------------------------------------------- ----------------------------------------------------EBITDAR and EBITDA Summary For the three months ended For the six months ended October 31, October 31, ---------------------------------------------------- 2012 2011 2012 2011 ----------------------------------------------------Helicopter Services $ 120,931 $ 107,000 $ 223,554 $ 202,688MRO 28,082 18,935 41,746 39,949Corporate and Other (22,916) (18,473) (38,304) (35,106) ----------------------------------------------------Consolidated EBITDAR(i) 126,097 107,462 226,996 207,531Less: aircraft lease and associated costs (48,797) (42,604) (97,227) (83,100) ----------------------------------------------------Consolidated EBITDA(i) $ 77,300 $ 64,858 $ 129,769 $ 124,431 ---------------------------------------------------- ----------------------------------------------------(i) See reconciliations to GAAP measures below.----------------------------------------------------------------------------Consolidated Statement of Earnings (Unaudited)(U.S.$ in thousands)---------------------------------------------------------------------------- For the three months For the six months ended ended ---------------------------------------------------- October 31, October 31, October 31, October 31, 2012 2011 2012 2011----------------------------------------------------------------------------Revenue $ 446,786 $ 423,000 $ 862,855 $ 832,649Operating ExpensesDirect costs (351,397) (343,346) (697,484) (679,987)Earnings from equity accounted investees 825 625 1,837 1,221General and administrative costs (18,914) (15,421) (37,439) (29,452)Amortization (27,635) (25,429) (55,945) (52,532)Restructuring costs (1,797) (7,080) (3,727) (11,884)Recovery (impairment) of receivables and funded residual value guarantees 143 63 (572) 47Impairment of intangible assets (6,339) (1,717) (5,818) (1,825)Impairment of assets held for sale (3,650) (4,251) (9,297) (11,632)Impairment of assets held for use - - (660) -Gain (loss) on disposal of assets (3,026) (316) (4,617) 3,741---------------------------------------------------------------------------- (411,790) (396,872) (813,722) (782,303)Operating income 34,996 26,128 49,133 50,346Interest on long-term debt (30,075) (29,516) (59,958) (60,186)Foreign exchange gain 10,562 2,446 3,161 2,639Other financing charges (3,449) (6,491) (11,603) (6,235)----------------------------------------------------------------------------Income (loss) from continuing operations before tax 12,034 (7,433) (19,267) (13,436)Income tax recovery (expense) (5,022) 8,638 (6,303) 12,485----------------------------------------------------------------------------Income (loss) from continuing operations 7,012 1,205 (25,570) (951)Earnings (loss) from discontinued operations, net of tax 467 (7,526) 812 (8,312)----------------------------------------------------------------------------Net earnings (loss) $ 7,479 $ (6,321) $ (24,758) $ (9,263)----------------------------------------------------------------------------Net earnings (loss) attributable to:Controlling interest $ 6,999 $ (11,420) $ (26,106) $ (19,793)Non-controlling interest 480 5,099 1,348 10,530----------------------------------------------------------------------------Net earnings (loss) $ 7,479 $ (6,321) $ (24,758) $ (9,263)----------------------------------------------------------------------------Consolidated Statement of Cash Flows(Expressed in thousands of United States dollars)---------------------------------------------------------------------------- For the three months ended For the six months ended ---------------------------------------------------- October 31, October 31, October 31, October 31, 2012 2011 2012 2011----------------------------------------------------------------------------Cash provided by (used in):Operating activities: Net earnings (loss) $ 7,479 $ (6,321) $ (24,758) $ (9,263) Less: earnings (loss) from discontinued operations, net of tax 467 (7,526) 812 (8,312)---------------------------------------------------------------------------- Earnings (loss) from continuing operations 7,012 1,205 (25,570) (951)Adjustments to reconcile net earnings (loss) to cash flows provided by (used in) operating activities: Amortization 27,635 25,429 55,945 52,532 Loss (gain) on disposal of assets 3,026 316 4,617 (3,741) Asset impairments 9,846 5,905 16,347 13,410 Non-cash leasing and financing costs (140) (492) (304) (1,306) Earnings from equity accounted investees (825) (625) (1,837) (1,221) Deferred income taxes (512) (6,356) (6,252) (13,953) Pension contributions, net of pension expense (5,690) (7,898) (17,436) (15,560) Increase to deferred lease financing costs (216) (2,774) (1,489) (7,488) Foreign exchange gain (loss) (19,893) 5,404 2,382 2,068 Other 2,816 (868) 5,319 (1,640)Increase (decrease) in cash resulting from changes in operating assets and liabilities (900) 34,657 (55,480) (32,226)----------------------------------------------------------------------------Cash provided by (used in) operating activities 22,159 53,903 (23,758) (10,076)----------------------------------------------------------------------------Financing activities: Sold interest in accounts receivable, net of collections 674 530 8,917 40,082 Proceeds from issuance of capital stock - 60,000 - 60,000 Proceeds from the issuance of senior secured notes 202,000 - 202,000 - Long-term debt proceeds 165,076 125,000 390,229 405,000 Long-term debt repayments (319,871) (116,826) (471,824) (390,539) Increase in deferred financing costs related to the revolver and notes (3,793) - (3,793) -----------------------------------------------------------------------------Cash provided by financing activities 44,086 68,704 125,529 114,543----------------------------------------------------------------------------Investing activities: Property and equipment additions (95,600) (121,964) (142,267) (164,751) Proceeds from disposal of property and equipment 46,188 43,117 93,413 91,120 Aircraft deposits, net of lease inception refunds (10,845) (34,429) (40,926) (36,115) Restricted cash 38 2,320 5,384 753 Distribution from equity investments - - - 936----------------------------------------------------------------------------Cash used in investing activities (60,219) (110,956) (84,396) (108,057)----------------------------------------------------------------------------Cash provided by (used in) continuing operations 6,026 11,651 17,375 (3,590)Cash flows provided by (used in) discontinued operations: Cash flows provided by (used in) operating activities 467 (1,019) 812 (1,488) Cash flows provided by (used in) financing activities (467) 1,019 (812) 1,488----------------------------------------------------------------------------Cash provided by (used in) discontinued operations - - - -Effect of exchange rate changes on cash and cash equivalents 5,677 (6,605) (4,144) (10,804)----------------------------------------------------------------------------Increase (decrease) in cash and cash equivalents during the period 11,703 5,046 13,231 (14,394)Cash and cash equivalents, beginning of period 57,075 49,481 55,547 68,921----------------------------------------------------------------------------Cash and cash equivalents, end of period $ 68,778 $ 54,527 $ 68,778 $ 54,527--------------------------------------------------------------------------------------------------------------------------------------------------------Consolidated Balance Sheets (Unaudited)(U.S.$ in thousands)---------------------------------------------------------------------------- October 31, 2012 April 30, 2012----------------------------------------------------------------------------AssetsCurrent Assets: Cash and cash equivalents $ 68,778 $ 55,547 Receivables, net of allowance for doubtful accounts 304,701 266,115 Income taxes receivable 25,078 20,747 Deferred income tax assets 9,361 8,542 Inventories 95,740 90,013 Prepaid expenses 20,069 21,183 Other assets 38,039 33,195---------------------------------------------------------------------------- 561,766 495,342Property and equipment, net 1,041,490 1,026,860Investments 25,466 24,226Intangible assets 205,493 217,890Goodwill 432,059 433,811Restricted cash 20,353 25,994Other assets 410,986 363,103Deferred income tax assets 49,020 48,943Assets held for sale 63,295 79,813---------------------------------------------------------------------------- $ 2,809,928 $ 2,715,982--------------------------------------------------------------------------------------------------------------------------------------------------------Liabilities and Shareholder's EquityCurrent Liabilities: Payables and accruals $ 356,519 $ 363,064 Deferred revenue 20,775 23,737 Income taxes payable 40,169 43,581 Deferred income tax liabilities 13,073 11,729 Current facility secured by accounts receivable 55,317 45,566 Other liabilities 20,155 23,648 Current portion of long-term debt 14,039 17,701---------------------------------------------------------------------------- 520,047 529,026Long-term debt 1,401,504 1,269,379Deferred revenue 50,221 43,517Other liabilities 189,820 191,521Deferred income tax liabilities 18,943 20,072----------------------------------------------------------------------------Total liabilities 2,180,535 2,053,515Redeemable non-controlling interests 4,489 1,675Capital stock: Par value 1 Euro; Authorized and issued: 1,228,377,770 and 1,228,377,770, respectively 1,607,101 1,607,101Contributed surplus 55,541 55,318Deficit (966,137) (940,031)Accumulated other comprehensive loss (71,601) (61,596)---------------------------------------------------------------------------- $ 2,809,928 $ 2,715,982--------------------------------------------------------------------------------------------------------------------------------------------------------



Non-GAAP Financial Measures:

This earnings release includes non-GAAP financial measures, segment earnings before interest, taxes, depreciation, amortization and aircraft lease rent and associated costs ("segment EBITDAR (adjusted)") referred to above as EBITDAR and earnings before interest, taxes, depreciation and amortization ("EBITDA") that are not required by, or presented in accordance with GAAP. These non-GAAP measures are not performance measures under U.S. generally accepted accounting principles 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. CHC has chosen to include segment EBITDAR (adjusted) as we consider this to be a significant indicator of our financial performance and use this measure to assist us in allocating available capital resources. We have also included EBITDA as this measure is useful to our debt holders as it is a proxy of Adjusted EBITDA, a non-GAAP measure. Adjusted EBITDA provides useful information to investors as it is a measure to calculate certain financial covenants related to our revolving credit facility and certain covenants in the indenture. 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 the Quarterly Report on Form 10-Q. CHC encourages investors to review the reconciliation and the non-GAAP discussion in conjunction with our presentation of these non-GAAP financial measures.

Reconciliation of Non-GAAP Financial Measures(U.S.$ in thousands)---------------------------------------------------------------------------- For the three months ended For the six months ended October 31, October 31, ---------------------------------------------------- 2012 2011 2012 2011 ---------------------------------------------------- Helicopter Services $ 120,931 $ 107,000 $ 223,554 $ 202,688 MRO 28,082 18,935 41,746 39,949 Corporate and Other (22,916) (18,473) (38,304) (35,106) ----------------------------------------------------Consolidated EBITDAR 126,097 107,462 226,996 207,531Less: aircraft lease and associated costs (48,797) (42,604) (97,227) (83,100) ----------------------------------------------------Consolidated EBITDA 77,300 64,858 129,769 124,431 Amortization (27,635) (25,429) (55,945) (52,532) Restructuring costs (1,797) (7,080) (3,727) (11,884) Recovery (impairment) of receivables and funded residual value guarantees 143 63 (572) 47 Impairment of intangible assets (6,339) (1,717) (5,818) (1,825) Impairment of assets held for sale (3,650) (4,251) (9,297) (11,632) Impairment of assets held for use - - (660) - Gain (loss) on disposal of assets (3,026) (316) (4,617) 3,741----------------------------------------------------------------------------Operating income 34,996 26,128 49,133 50,346Interest on long-term debt (30,075) (29,516) (59,958) (60,186)Foreign exchange gain 10,562 2,446 3,161 2,639Other financing charges (3,449) (6,491) (11,603) (6,235)----------------------------------------------------------------------------Income (loss) from continuing operations before tax 12,034 (7,433) (19,267) (13,436)Income tax recovery (expense) (5,022) 8,638 (6,303) 12,485----------------------------------------------------------------------------Income (loss) from continuing operations 7,012 1,205 (25,570) (951)Earnings (loss) from discontinued operations, net of tax 467 (7,526) 812 (8,312)----------------------------------------------------------------------------Net earnings (loss) $ 7,479 $ (6,321) $ (24,758) $ (9,263)--------------------------------------------------------------------------------------------------------------------------------------------------------



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 and any applicable Canadian securities legislation. All statements, other than statements of historical fact included in this presentation, regarding our strategy, future operations, projections, conclusions, forecasts and other statements are "forward-looking statements". While these forward-looking statements represent our best current judgment, the actual results could differ materially from the conclusions, forecasts or projections contained in the forward-looking information. 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, but are not limited to, the following: exchange rate fluctuations, industry exposure, inflation, inability to enter into new contracts or the loss of existing contracts, inability to maintain government issued licenses, inability to obtain necessary aircraft or insurance, competition, political, economic and regulatory uncertainty, loss of key personnel, work stoppages due to labor disputes, accidents, mechanical failures, regulatory actions and future material acquisitions. 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 information, whether as a result of new information, future events or otherwise. Please refer to our annual report on Form 10-K, our quarterly reports on Form 10-Q, and other filings, in particular any discussion of risk factors or forward-looking statements, which are filed with the SEC and available 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.



Contacts:
CHC Helicopter
Shirley Zhou
Director, Investor Relations
Direct: +1.604.279.2461 or Mobile: +1.778.999.2771
Shirley.Zhou@chc.ca
www.chc.ca



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