Q4 2021 Key Metrics
- Net income of $10.2 million, or
$0.06 per basic share; a
quarter-over-quarter increase of $1.0
million primarily due to lower impairment and expected
credit loss provisions of $31.0
million in the Regional Aircraft Leasing ('RAL') segment in
addition to increased revenue in the Regional Aviation Services
('RAS') segment, partially offset by a reduction in unrealized
foreign exchange gains of $35.4
million.
- Adjusted net income1 of $21.5 million, or $0.12 per basic share; an increase of
$13.8 million quarter-over-quarter
primarily due to additional aircraft earning leasing revenue, lower
depreciation, and a reduction in realized foreign exchange
losses.
- Adjusted EBITDA1 of $90.5 million; an increase of $8.5 million over fourth quarter 2020 due to
additional aircraft earning leasing revenue and a lower expected
credit loss provision partially offset by decreased earnings due to
a lower US dollar exchange rate.
- Collected approximately 83% (67% in Q2'21, 77% in Q3'21) of the
RAL segment's lease revenue recognized in the fourth quarter.
- Liquidity of $188.5 million.
2021 Year-End Key Metrics & Highlights
- Net loss of $20.5 million, or
$0.12 per basic share; a
year-over-year decrease in net income of $62.0 million primarily due to capacity purchase
agreement ('CPA') restructuring costs of $58.9 million net of tax recoveries in accordance
with the 2021 CPA amendments.
- Adjusted net income1 of $63.9 million, consistent with the prior year, or
$0.37 per basic share.
- Adjusted EBITDA1 of $329.4 million; a decrease of $18.0 million over 2020, primarily due to lower
lease revenue attributable to off-lease aircraft, negotiated lease
amendments (including extensions) and decreased Fixed Margin,
partially offset by additional aircraft earning leasing revenue and
a lower expected credit loss provision.
- Revised CPA with Air Canada, enhancing Jazz's position as the
exclusive Air Canada Express operator of 70-78 seat regional
capacity until the end of 2025 with the addition of 25 Embraer 175s
to the Covered Fleet, and is the sole provider of Air Canada
Express services.
- Completed a public offering and concurrent private placement
for gross proceeds of $145.1
million.
- Remarketed all 13 off-lease aircraft repossessed in 2020 by
Chorus Aviation Capital ('CAC'):
-
- two Dash 8-400s to Sky Alps of Italy.
- one Dash 8-400 to National Jet Express, a subsidiary of
Australian aviation operator, Cobham Aviation Services.
- two Dash 8-400s to Waltzing Matilda Aviation of Boston, doing business as Connect
Airlines.
- six ATR 72-600s to Emerald Airlines of Dublin.
- two CRJ900s to City Jet of Dublin (in February
2022).
- Secured a three-year contract with Purolator for air cargo
charter services, executing on Chorus' growing capabilities in this
market segment.
- Awarded a three-year contract to upgrade and modify Transport
Canada's National Aerial Surveillance Program fleet of Dash 8-100
and Dash 7 aircraft with new surveillance equipment.
- Awarded a new five-year contract extension to provide
fixed-wing air ambulance service for Ambulance New Brunswick
further extending its 25-year relationship.
- Awarded, in partnership with General Dynamics Mission Systems –
Canada, an eight-year contract for
the in-service support of the Canadian Armed Forces manned airborne
intelligence surveillance and reconnaissance program.
- Established new three-year $75.0
million revolving committed credit facility, plus a
$25.0 million uncommitted
accordion.
HALIFAX, NS, Feb. 16, 2022 /CNW/ - Chorus Aviation Inc.
('Chorus') (TSX: CHR) today announced fourth quarter and year
end 2021 financial results.
"I'm proud and encouraged by our accomplishments in 2021,
especially in light of a prolonged pandemic. We strategically
managed our liquidity through successful capital raises and reduced
our net debt by approximately $240
million or 12% to recharge our financial flexibility.
Further, our newly awarded specialized contracts and new aircraft
leasing agreements served to strengthen our organization," stated
Joe Randell, President and Chief
Executive Officer, Chorus Aviation Inc. "While airlines around the
world are still challenged to return to pre-COVID-19 financial
levels, our fourth quarter yielded positive returns to our
shareholders of $0.06 in net
earnings. Our employees have shown tremendous resilience throughout
this crisis and have provided safe and high-quality services to our
customers; I'm deeply grateful for their perseverance and
dedication."
"The CAC team has done well, in a challenging environment,
remarketing all 13 aircraft repossessed in 2020, and collecting 83%
of lease revenue recognized in the fourth quarter, an improvement
over the previous quarter. Our Air Canada Express flying grew to
76% of pre-COVID-19 fourth quarter flying levels and is now
projected to reduce in the first quarter due to the current
decrease in passenger travel demand. While our flying activity
under the CPA doesn't impact our fixed fee compensation, it is
indicative of the market sentiment on air travel. Voyageur is
relatively unaffected by the pandemic and is executing well on the
new contracts it was awarded in 2021. The momentum they gained last
year will continue to positively impact earnings throughout 2022
and beyond. Our accomplishments over the last two years have proven
we have the expertise and resilience to manage through this crisis
and we are well poised to seize new growth opportunities,"
concluded Mr. Randell.
Liquidity
As of December 31, 2021, Chorus' liquidity was $188.5 million including cash of $123.6 million and $64.9
million of available room on its operating credit facility.
Liquidity decreased from the third quarter of 2021 by $69.6 million primarily due to the redemption of
$85.0 million principal amount of the
6.00% Debentures which was partially offset by a reduction in
restricted cash.
In 2021, Chorus managed its liquidity by:
- Entering into a new three-year committed operating credit
facility in the fourth quarter of 2021 with a limit of $75.0 million plus a $25.0
million uncommitted accordion.
- Issuing $85.0 million aggregate
principal amount of Series C Debentures for net proceeds of
$81.2 million in the third quarter of
2021 and subsequently using the proceeds thereof to redeem
$85.0 million principal amount of the
6.00% Debentures in the fourth quarter of 2021. As a result of this
redemption, $115.0 million aggregate
principal amount of the 6.00% Debentures currently remain
outstanding.
- Completing a concurrent public offering and private placement
of Equity Units and Series B Debentures for net proceeds of
$138.1 million which was partially
used to repay amortizing term loans on six aircraft totaling
$71.7 million and deferred amounts
owing under aircraft loans with its largest lender in the amount of
$33.9 million in the second quarter
of 2021.
Chorus anticipates having sufficient liquidity to fund ongoing
operations, planned capital expenditures, and principal and
interest payments related to long-term borrowings.
Fourth Quarter Summary
In the fourth quarter of 2021, Chorus reported adjusted EBITDA
of $90.5 million, an increase of
$8.5 million over the fourth quarter
of 2020.
The RAL segment's adjusted EBITDA increased by $5.9 million due to additional aircraft earning
leasing revenue and a $3.6 million
lower expected credit loss provision partially offset by lower
lease revenue attributable to negotiated lease amendments
(including extensions) and decreased earnings due to a lower US
dollar exchange rate.
The RAS segment's adjusted EBITDA increased by $2.6 million. The fourth quarter results were
impacted by:
- an increase in other revenue due to an increase in third-party
MRO activity, part sales and contract flying;
- an increase in capitalization of major maintenance overhauls on
owned aircraft of $2.8 million;
and
- an increase in aircraft leasing revenue under the CPA of
$0.5 million primarily due to six
incremental CRJ900s offset by the removal of the Dash 8-300 fleet
and lower earnings of $1.1 million
due to a lower US dollar exchange rate; offset by
- a decrease in Fixed Margin of $2.4
million in accordance with the CPA; and
- an increase in general administrative expenses attributable to
increased operations.
Adjusted net income of $21.5
million for the quarter, an increase of $13.8 million due to:
- a $8.5 million increase in
adjusted EBITDA as previously described;
- a decrease of $5.0 million
primarily due to a decrease in unrealized foreign exchange losses
on working capital and realized foreign exchange losses;
- a decrease in depreciation expense of $3.5 million; and
- an increase of $1.7 million
related to gains on property and equipment and asset backed
commercial paper; offset by
- a $3.8 million increase in
adjusted income tax expense; and
- an increase in net interest costs of $1.1 million primarily related to interest on
Series B Debentures and Series C Debentures offset by the repayment
of certain aircraft financing.
Net income increased $1.0 million
over the prior period due to:
- the previously noted increase in adjusted net income of
$13.8 million;
- a decrease in impairment provisions of $27.0 million; and
- a decrease in employee separation program costs and signing
bonuses of $1.0 million; offset
by
- a decrease in net unrealized foreign exchange gains primarily
on long-term debt of $35.4
million;
- a decrease in income tax recoveries on adjusted items of
$3.2 million;
- an increase in lease repossession costs of $1.2 million; and
- an increase in Dash 8-300 inventory provision of $1.0 million.
Year-End Summary
Chorus reported adjusted EBITDA of $329.4
million for 2021, a decrease of $18.0
million over the same prior year period.
The RAL segment's adjusted EBITDA decreased by $13.0 million primarily due to lower lease
revenue attributable to off-lease aircraft, negotiated lease
amendments (including extensions), and decreased earnings due to a
lower US dollar exchange rate partially offset by additional
aircraft earning lease revenue and a lower expected credit loss
provision.
The RAS segment's adjusted EBITDA decreased by $5.0 million due to:
- a decrease in Fixed Margin of $9.5
million in accordance with the CPA; and
- an increase in general administrative expenses attributable to
increased operations; partially offset by
- a decrease in stock-based compensation of $5.1 million due to a decrease in the Share price
inclusive of the change in fair value of the Total Return
Swap;
- an increase in aircraft leasing revenue under the CPA of
$3.6 million primarily due to
incremental CRJ900s, partially offset by the removal of the Dash
8-300 fleet and lower earnings of $8.5
million due to a lower US dollar exchange rate;
- an increase in other revenue due to an increase in third-party
MRO activity, part sales and contract flying; and
- an increase in capitalization of major maintenance overhauls on
owned aircraft of $1.9 million.
Adjusted net income of $63.9
million was unchanged from 2020 due to the following
items:
- a decrease of $11.7 million in
realized foreign exchange losses and increased unrealized foreign
exchange gains on working capital;
- a decrease in depreciation expense of $9.6 million; and
- an increase of $4.0 million
related to gains on property and equipment and asset backed
commercial paper; offset by
- an $18.0 million decrease in
adjusted EBITDA as previously described;
- an increase in net interest costs of $5.6 million primarily related to the Series B
Debentures, the Series C Debentures, increased indebtedness under
credit facilities and additional debt related to aircraft purchased
since the second quarter of 2020; and
- a $1.9 million increase in
adjusted income tax expense.
Net loss of $20.5 million, a
decrease of $62.0 million over the
prior period due to:
- one-time restructuring costs of $80.7
million related to the 2021 CPA amendments;
- a change in net unrealized foreign exchange primarily on
long-term debt of $41.4 million;
- an increase in lease repossession costs of $5.7 million; and
- an increase in Dash 8-300 inventory provisions of $1.0 million; offset by
- a decrease in impairment provisions of $47.3 million;
- an increase in income tax recoveries on adjusted items of
$14.8 million; and
- a decrease in employee separation program costs, exclusive of
the cost attributable to the pilot early retirement program and
signing bonuses of $4.9 million.
Consolidated Financial Analysis
This section provides detailed information and analysis about
Chorus' performance for the three months and year ended
December 31, 2021, compared to the three months and year ended
December 31, 2020. It focuses on Chorus' consolidated
operating results and provides financial information for Chorus'
operating segments.
(expressed in
thousands of Canadian dollars)
|
Three months ended
December 31,
|
Year ended
December 31,
|
2021
|
2020
|
Change
|
Change
|
2021
|
2020
|
Change
|
Change
|
$
|
$
|
$
|
%
|
$
|
$
|
$
|
%
|
|
|
|
|
|
|
|
|
|
Operating
revenue
|
346,516
|
218,166
|
128,350
|
58.8
|
1,023,275
|
948,721
|
74,554
|
7.9
|
Operating
expenses
|
309,952
|
219,383
|
90,569
|
41.3
|
952,296
|
834,174
|
118,122
|
14.2
|
|
|
|
|
|
|
|
|
|
Operating income
(loss)
|
36,564
|
(1,217)
|
37,781
|
3,104.4
|
70,979
|
114,547
|
(43,568)
|
(38.0)
|
Net interest
expense
|
(24,565)
|
(23,493)
|
(1,072)
|
4.6
|
(96,333)
|
(90,774)
|
(5,559)
|
6.1
|
Foreign exchange gain
(loss)
|
899
|
31,297
|
(30,398)
|
(97.1)
|
(4,595)
|
25,156
|
(29,751)
|
(118.3)
|
Gain (loss) on
property and equipment
|
7
|
(1,370)
|
1,377
|
100.5
|
1,725
|
(1,946)
|
3,671
|
188.6
|
Other
|
344
|
—
|
344
|
100.0
|
344
|
—
|
344
|
100.0
|
|
|
|
|
|
|
|
|
|
Income (loss) before
income tax
|
13,249
|
5,217
|
8,032
|
154.0
|
(27,880)
|
46,983
|
(74,863)
|
(159.3)
|
Income tax (expense)
recovery
|
(3,090)
|
3,940
|
(7,030)
|
178.4
|
7,395
|
(5,497)
|
12,892
|
(234.5)
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
10,159
|
9,157
|
1,002
|
10.9
|
(20,485)
|
41,486
|
(61,971)
|
(149.4)
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA(1)
|
90,463
|
81,972
|
8,491
|
10.4
|
329,440
|
347,454
|
(18,014)
|
(5.2)
|
Adjusted
EBT(1)
|
27,209
|
9,578
|
17,631
|
184.1
|
82,742
|
80,995
|
1,747
|
2.2
|
Adjusted net
income(1)
|
21,456
|
7,667
|
13,789
|
179.8
|
63,890
|
64,041
|
(151)
|
(0.2)
|
|
|
(1)
|
These are non-GAAP
financial measures.
|
Outlook
(See cautionary statement regarding
forward-looking information below)
Chorus' business model does not directly expose it to the market
risks ordinarily faced by airlines; however, substantially all of
its revenue is derived from airline customers, through the CPA and
its leasing of aircraft to airline customers globally. Although the
COVID-19 pandemic continues to impact airlines due to the emergence
of the Omicron variant, demand for passenger air travel continued
to increase throughout 2021 with the global roll-out of vaccines
and proof of vaccination assisting the recovery.
Regional Aviation Services:
In the fourth quarter of 2021, Jazz operated at approximately
76% of its fourth quarter 2019 (pre-COVID-19) levels. Provided the
public health impacts of the COVID-19 pandemic do not worsen and
travel restrictions are not increased, Jazz's first quarter 2022
flying is expected to operate between 50% to 65% of its 2019
(pre-COVID-19) levels. In 2022, Jazz expects its aircraft leasing
revenue under the CPA and its Fixed Margin revenue to be US
$114.7 million and $65.7 million, respectively.
Voyageur continues to perform overseas humanitarian flights,
cargo services, and the air ambulance operation in New Brunswick. Voyageur's contract flying,
charter sales and MRO services revenues began to increase in 2021.
The momentum is expected to be sustained with the addition of the
four new long-term contracts which will begin to positively impact
Voyageur's earnings throughout 2022 and beyond. Voyageur represents
less than 10% of Chorus' consolidated revenue and net income.
Regional Aircraft Leasing:
In February 2022, CAC executed
short-term leases for two CRJ900s to CityJet. Both aircraft are
anticipated to be delivered in the first half of 2022. In
August 2021, CAC executed long-term
leases for six ATR72-600s to Emerald Airlines of Dublin, Ireland. Two of the aircraft were
delivered prior to yearend and the remaining four deliveries are
expected in the first half of 2022. One
Dash 8-400 on lease to Philippine Airlines is expected to be
returned in the first quarter of 2022 as a result of the airline's
recent restructuring under Chapter 11 of the United States
Bankruptcy Code.
Following the onset of the COVID-19 pandemic, CAC received
requests from substantially all of its customers for some form of
temporary rent relief, as they coped with an unprecedented
reduction in demand for passenger air travel. Under rent relief
arrangements, certain of which include lease term extensions, the
repayment of the deferred amounts typically coincides with the
lease term extensions. As of December 31, 2021, CAC's gross
lease receivable was $84.0 million
(US $66.3 million) (December 31, 2020 - $56.3
million (US $44.2 million).
The gross lease receivable may increase to approximately
$90.0 million (US $70.0 million) by the end of 2022 due to
rent relief arrangements and potential delays in payments.
As of December 31, 2021, the net lease receivable, after an
expected credit loss provision, was $76.8
million (US $60.6 million)
(December 31, 2020 - $48.3 million (US $38.0
million)). CAC's lease deferral receivable exposure is also
partially mitigated by security packages held of approximately
$26.8 million (US $21.1 million) (December 31, 2020 - $30.7
million (US $24.1
million)).
Chorus collected approximately 83% of its lease revenue
recognized in the fourth quarter, up from 77% in the third quarter
of 2021, from its lessees.
The following table provides the number of aircraft that earn
leasing revenue for completed transactions:
|
|
|
|
|
|
|
Completed
Transactions
|
Customer
|
Aircraft
type
|
Q3
2021
|
Q4
2021
|
Total
|
|
|
|
|
|
Aeromexico(1)
|
E190
|
3
|
|
3
|
Air
Nostrum
|
CRJ1000
|
4
|
|
4
|
airBaltic
|
A220-300
|
5
|
|
5
|
Azul
Airlines(2)
|
ATR72-600/E195
|
5
|
|
5
|
Cobham
|
Dash 8-400
|
1
|
|
1
|
Croatia
Airlines
|
Dash 8-400
|
2
|
|
2
|
Emerald
Airlines(3)
|
ATR72-600
|
1
|
1
|
2
|
Ethiopian
Airlines
|
Dash 8-400
|
5
|
|
5
|
Indigo
|
ATR72-600
|
8
|
|
8
|
Jambojet
|
Dash 8-400
|
3
|
|
3
|
KLM
Cityhopper
|
E190
|
1
|
|
1
|
Malindo
Air
|
ATR72-600
|
4
|
|
4
|
Philippine
Airlines(4)
|
Dash 8-400
|
3
|
|
3
|
Sky Alps
|
Dash 8-400
|
2
|
|
2
|
SpiceJet
|
Dash 8-400
|
5
|
|
5
|
Waltzing
Matilda
|
Dash 8-400
|
—
|
2
|
2
|
Wings Air
|
ATR72-600
|
1
|
|
1
|
|
|
|
|
|
Total Regional
Aircraft Leasing(5)
|
|
53
|
3
|
56
|
|
|
|
|
|
Total Regional
Aviation Services(6)
|
Dash
8-400/CRJ900
|
48
|
—
|
48
|
|
|
|
|
|
Chorus Total
Aircraft
|
|
101
|
3
|
104
|
|
|
(1)
|
On November 4, 2021,
Aeromexico and CAC executed amended and restated lease agreements
in respect of all three E190s currently leased by CAC to
Aeromexico. These agreements (which became effective on January 31,
2022) reflect revised commercial terms negotiated by the parties
following Aeromexico's voluntary petition for relief under Chapter
11 of the United States Bankruptcy Code on June 30, 2020. On
January 28, 2022, the U.S. bankruptcy court approved Aeromexico's
plan of reorganization, clearing the way for Aeromexico's emergence
from Chapter 11.
|
(2)
|
Consists of three
ATR72-600s and two E195s.
|
(3)
|
CAC executed
long-term leases for six ATR72-600s to Emerald Airlines. Two of the
aircraft were delivered prior to year end and the remaining four
deliveries are expected in the first half of 2022.
|
(4)
|
On December 31, 2021
Philippine Airlines successfully completed its restructuring under
Chapter 11 of the United States Bankruptcy Code. Two aircraft have
been retained under lease on revised terms and one is expected to
be returned in the first quarter of 2022.
|
(5)
|
RAL executed leases
for six aircraft remaining off-lease which are expected to be
delivered in the first half of 2022: four ATR72-600s to Emerald
Airlines and two CRJ900s under short-term leases to
CityJet.
|
(6)
|
RAS segment breakdown
includes the following aircraft earning lease revenue under the
CPA: 34 Dash 8-400s and 14 CRJ900s.
|
Capital expenditures in 2022, including capitalized major
maintenance overhauls but excluding expenditures for the
acquisition of aircraft are expected to be between $21.0 million and $33.0
million. Aircraft acquisitions and improvements in 2022 are
expected to be between $5.0 million
and $11.0 million.(1)
(expressed in
thousands of Canadian dollars)
|
|
Actual
|
|
Year
ended
|
Year
ended
|
Planned
2022(1)
|
December 31,
2021
|
December 31,
2020(2)
|
$
|
$
|
$
|
Capital expenditures,
excluding aircraft acquisitions
|
15,000 to
21,000
|
7,019
|
11,727
|
Capitalized major
maintenance overhauls(3)
|
6,000 to
12,000
|
20,296
|
7,529
|
Aircraft acquisitions
and improvements
|
5,000 to
11,000
|
47,392
|
386,881
|
|
26,000 to
44,000
|
74,707
|
406,137
|
|
|
(1)
|
The 2022 plan
includes reconfiguration costs on re-leased aircraft in the RAL
segment which have been converted using a foreign exchange rate of
1.2678, the December 31, 2021 closing day rate from the Bank
of Canada.
|
(2)
|
The 2020 actual
includes the completion of two ESPs.
|
(3)
|
The 2022 plan
includes between $2.0 million to $5.0 million of costs that are
expected to be included in Controllable Costs. Actual 2021 and 2020
costs include $8.1 million and $6.1 million, respectively which
were included in Controllable Costs.
|
With the current recovery in passenger demand for air travel and
further improvement expected, Chorus anticipates it will invest
between $300.0 million to
$400.0 million in its Regional
Aircraft Leasing segment in 2022 financed through existing cash
resources, capital raises, secured debt financing or a combination
thereof.
Use of Defined Terms
Capitalized terms used but not defined in this news release have
the meanings given to them in the MD&A which is available on
Chorus' website (www.chorusaviation.com) and SEDAR
(www.sedar.com).
Investor Conference Call / Audio Webcast
Chorus will hold an analyst call at 9:00 a.m. ET on Thursday, February 17, 2022, to discuss the
fourth quarter and year-end 2021 financial results. The call may be
accessed by dialing 1-888-664-6392. The call will be simultaneously
audio webcast via:
https://produceredition.webcasts.com/starthere.jsp?ei=1524288&tp_key=379dfb0c90
This is a listen-in only audio webcast.
The conference call webcast will be archived on Chorus' website
at www.chorusaviation.com under Investors > Reports
> Executive Management Presentations. A playback of the
call can also be accessed until midnight
ET, February 24, 2022, by
dialing toll-free1-888-390-0541, and using passcode 249796#.
1NON-GAAP FINANCIAL MEASURES
This news
release references several non-GAAP financial measures to
supplement the analysis of Chorus' results. Chorus uses
certain non-GAAP financial measures, described below, to evaluate
and assess performance. These non-GAAP measures are generally
numerical measures of a company's financial performance, financial
position, or cash flows, that include or exclude amounts from the
most comparable GAAP measure. As such, these measures are not
recognized for financial statement presentation under GAAP, do not
have a standardized meaning, and are therefore not likely to be
comparable to similar measures presented by other public
entities.
Adjusted Net Income, Adjusted EBT and Adjusted EBITDA
Chorus revised its definition of Adjusted net income in the
first quarter of 2021 to include the Dash 8-300 inventory
provision, the defined benefit pension curtailment resulting from
the pilot early retirement program and integration costs related to
the 2021 CPA Amendments to facilitate comparability of its
results.
Adjusted net income and Adjusted net income per Share are used
by Chorus to assess performance without the effects of unrealized
foreign exchange gains or losses on long-term debt and lease
liability related to aircraft, signing bonuses, employee separation
program costs, impairment provisions, lease repossession costs net
of security packages realized, Dash 8-300 inventory provision,
defined benefit pension curtailment, integration costs, strategic
advisory fees and the applicable tax expense (recovery). Chorus
manages its exposure to currency risk on such long-term debt by
billing the lease payments within the CPA in the underlying
currency (US dollars) related to the aircraft debt. These items are
excluded because they affect the comparability of Chorus' financial
results, period-over-period, and could potentially distort the
analysis of trends in business performance. Excluding these items
does not imply they are non-recurring due to ongoing currency
fluctuations between the Canadian and US dollar.
Chorus revised its definition of Adjusted EBT and Adjusted
EBITDA in the first quarter of 2021 to include the Dash 8-300
inventory provision, the defined benefit pension curtailment
resulting from the pilot early retirement program and integration
costs related to the 2021 CPA Amendments to facilitate
comparability of its results. Adjusted EBT and EBITDA should not be
used as an exclusive measure of cash flow because it does not
account for the impact of working capital growth, capital
expenditures, debt repayments and other sources and uses of cash,
which are disclosed in the statements of cash flows, forming part
of Chorus' financial statements.
EBT is defined as earnings before income tax. Adjusted EBT (EBT
before signing bonuses, employee separation program costs,
impairment provisions, lease repossession costs net of security
packages realized, Dash 8-300 inventory provision, defined benefit
pension curtailment, integration costs, strategic advisory fees and
other items such as foreign exchange gains and losses) is a
non-GAAP financial measure used by Chorus as a supplemental
financial measure of operational performance. Management believes
Adjusted EBT assists investors in comparing Chorus' performance by
excluding items, which it does not believe will re-occur over the
longer-term (such as signing bonuses, employee separation program
costs, impairment provisions, lease repossession costs net of
security packages realized, Dash 8-300 inventory provision, defined
benefit pension curtailment, integration costs and strategic
advisory fees) as well as items that are non-cash in nature such as
foreign exchange gains and losses.
EBITDA is defined as earnings before net interest expense,
income taxes, depreciation and amortization, and impairment and is
a non-GAAP financial measure that is used frequently by companies
in the aviation industry as a measure of performance. Adjusted
EBITDA (EBITDA before signing bonuses, employee separation program
costs, strategic advisory fees, impairment provisions, lease
repossession costs net of security packages realized, Dash 8-300
inventory provision, defined benefit pension curtailment and
integration costs, and other items such as foreign exchange gains
or losses) is a non-GAAP financial measure used by Chorus as a
supplemental financial measure of operational performance.
Management believes Adjusted EBITDA assists investors in comparing
Chorus' performance by excluding items, which it does not believe
will re-occur over the longer-term (such as signing bonuses,
employee separation program costs, impairment provisions, lease
repossession costs net of security packages realized, Dash 8-300
inventory provision, defined benefit pension curtailment,
integration costs and strategic advisory fees) as well as items
that are non-cash in nature such as foreign exchange gains and
losses. Adjusted EBITDA should not be used as an exclusive measure
of cash flow because it does not account for the impact of working
capital growth, capital expenditures, debt repayments and other
sources and uses of cash, which are disclosed in the statements of
cash flows, forming part of Chorus' financial statements.
Forward-Looking Information
This news release includes
'forward-looking information'. Forward-looking information is
identified by the use of terms and phrases such as "anticipate",
"believe", "could", "estimate", "expect", "intend", "may", "plan",
"potential", "predict", "project", "will", "would", and similar
terms and phrases, including references to assumptions. Such
information may involve but is not limited to comments with respect
to strategies, expectations, planned operations or future actions.
Forward-looking information relates to analyses and other
information that are based on forecasts of future results,
estimates of amounts not yet determinable and other uncertain
events. Forward-looking information, by its nature, is based on
assumptions, including those referenced below, and is subject to
important risks and uncertainties. Any forecasts or forward-looking
predictions or statements cannot be relied upon due to, among other
things, external events, changing market conditions and general
uncertainties of the business. Such statements involve known and
unknown risks, uncertainties and other factors that may cause
actual results, performance or achievements to differ materially
from those indicated in the forward-looking information.
Examples of forward-looking information in this news release
include the discussion in the Outlook section, as well as
statements regarding expectations as to Chorus' future liquidity
and financial strength and contracted revenues, the recovery of air
traffic in Canada and around the
world, Chorus' future growth and the completion of pending or
planned transactions (including the delivery of aircraft under
lease). Actual results may differ materially from results indicated
in forward-looking information for a number of reasons, including a
prolonged duration of the COVID-19 outbreak (including as a result
of the emergence of new COVID-19 variants) and/or further
restrictive measures to minimize its public health impacts, the
evolving impact of COVID-19 on Chorus' contractual counterparties,
changes in aviation industry and general economic conditions, the
continued payment (in whole or in part) of amounts due under the
CPA and/or aircraft lease agreements with CAC's customers, the risk
of disputes under the CPA and/or aircraft lease agreements with
CAC's customers, Chorus' ability to pay its indebtedness and
otherwise remain in compliance with its debt covenants, the risk of
cross defaults under debt agreements and other significant
contracts, the risk of asset impairments and provisions for
expected credit losses, a failure to conclude transactions
(including potential financings) referenced in this news release
and in Chorus' public disclosure record available at www.sedar.com.
The forward-looking statements contained in this news release
represent Chorus' expectations as of the date of this news release
(or as of the date they are otherwise stated to be made) and are
subject to change after such date. Chorus disclaims any intention
or obligation to update or revise such statements to reflect new
information, subsequent events or otherwise, except as required by
applicable securities laws. Readers are cautioned that the
foregoing factors and risks are not exhaustive.
About Chorus Aviation Inc.
Chorus is a global provider of integrated regional aviation
solutions. Chorus' vision is to deliver regional aviation to
the world. Headquartered in Halifax, Nova
Scotia, Chorus is comprised of Chorus Aviation Capital a
leading, global lessor of regional aircraft, and Jazz Aviation and
Voyageur Aviation - companies that have long histories of safe
operations with excellent customer service. Chorus provides a full
suite of regional aviation support services that
encompasses every stage of an aircraft's lifecycle,
including aircraft acquisitions and leasing; aircraft
refurbishment, engineering, modification, repurposing and
preparation; contract flying; aircraft and component maintenance,
disassembly, and parts provisioning.
Chorus Class A Variable Voting Shares and Class B Voting Shares
trade on the Toronto Stock Exchange under the trading symbol 'CHR'.
Chorus 6.00% Senior Debentures, 5.75% Senior Unsecured Debentures,
and 6.00% Convertible Senior Unsecured Debentures trade on the
Toronto Stock Exchange under the trading symbols 'CHR.DB',
'CHR.DB.A', 'CHR.DB.B', 'CHR.DB.C' respectively.
www.chorusaviation.com
SOURCE Chorus Aviation Inc.