Q4 2022 Financial Highlights
- Net income of $45.9 million, a
quarter-over-quarter increase of $35.7
million.
- Adjusted earnings available to Common Shareholders of
$22.3 million, or $0.11 per Common Share, an increase of
$0.8 million quarter-over-quarter,
net of dividends declared on the Preferred Shares and
non-controlling interest.
- Adjusted net income of $31.8
million, an increase of $10.4
million quarter-over-quarter primarily related to Falko's
earnings and increased lease revenue from CACIL's re-leased
aircraft.
- Adjusted EBITDA of $129.5
million, an increase of $39.1
million quarter-over-quarter.
Annual Financial Highlights:
- Net income of $51.9 million, a
year-over-year increase of $72.4
million.
- Adjusted earnings available to Common Shareholders of
$92.9 million, or $0.48 per Common Share, an increase of
$29.0 million year-over-year, net of
dividends declared on the Preferred Shares and non-controlling
interest.
- Adjusted net income of $118.8
million, an increase of $55.0
million year-over-year primarily due to eight months of
Falko's earnings in 2022.
- Adjusted EBITDA of $441.0
million, an increase of $111.6
million year-over-year.
Annual Highlights:
- Completed the Falko Acquisition for US $843.7 million in the second quarter of 2022,
establishing Chorus as the world's largest asset manager and
aircraft lessor focused solely on regional aircraft leasing.
- Issued US $300.0 million of
Series 1 Preferred Shares and US $74.0
million of Common Shares and Common Share purchase warrants
to an affiliate of Brookfield Special Investments Fund L.P. in
connection with the Falko Acquisition.
- Began transitioning to an asset light leasing model with
opportunistic asset sales that generated proceeds, net of related
debt repayments, of USD $152.3
million.
- Generated Free Cash Flow (formerly described as Adjusted Cash
Provided by Operating Activities) of $371.3
million for the year ended December
31, 2022, an increase of $208.6
million from the prior year primarily related to strong
operating cash flows due to Falko's earnings and improvement in
RAS' operating income, and net proceeds on asset sales which was
partially offset by capital expenditures.
- Repurchased and cancelled 1,718,972 Common Shares to
December 31, 2022 under Chorus'
Normal Course Issuer Bid which commenced on November 14, 2022.
- Improved leverage to 4.4 at December 31,
2022 from 5.4 at December 31,
2021, the second consecutive quarter of improved
leverage.
HALIFAX,
NS, Feb. 15, 2023 /CNW/ - Chorus Aviation Inc.
('Chorus') (TSX: CHR) today announced fourth quarter and year-end
2022 financial results.
"The 2022 year was truly transformational for Chorus. With the
acquisition of Falko, Chorus became the world's largest
aircraft lessor focused on regional aviation and further
diversified its earnings through the addition of asset management
services, including fund management on behalf of third-party
investors. Falko provides a proven aircraft trading platform which
enables us to more readily monetize our on-balance sheet assets.
Fund management is a far more efficient strategy for our leasing
business and allows Chorus to deleverage its balance sheet and free
up embedded capital. Brookfield's
investment in Chorus is an endorsement of our strategy," said
Joe Randell, President and CEO,
Chorus Aviation.
"Our transition to an asset light leasing model continued in the
fourth quarter as we executed on several opportunistic aircraft
sales. The incremental cash flows generated from the aircraft
dispositions allowed us to complete the early redemption of
$115 million in the 6.00% Debentures
to accelerate our deleveraging. In the fourth quarter we announced
a Normal Course Issuer Bid allowing the purchase for cancellation
of up to 10% of the public float of Common Shares with over 1.7
million shares being purchased and cancelled at year-end."
"The aviation industry recovery is evident and continuing as we
see the return of strong travel demand world-wide. Jazz increased
flying activity in 2022 throughout Canada and the U.S. on behalf of Air Canada
and Voyageur continued to grow its specialty aviation offerings.
The Falko team also did an exemplary job capitalizing on the
strengthening environment to place aircraft and trade assets. Our
team has delivered and our culture is strong" continued Mr.
Randell.
"Over the past few months, I have worked closely with
Colin Copp to transition the CEO
duties and the process has progressed smoothly. Colin's depth of
knowledge across all aspects of our business is impressive and will
serve him very well as he capably leads Chorus through 2023 and
beyond."
"I offer my sincere appreciation to all employees for their
continued hard work and dedication. Chorus is extremely well
positioned for the future," concluded Mr. Randell.
Fourth Quarter Summary
In the fourth quarter of 2022, Chorus reported Adjusted EBITDA
of $129.5 million, an increase of
$39.1 million over the fourth quarter
of 2021.
The RAL segment's Adjusted EBITDA was $67.5 million, an increase of $36.3 million primarily due to Falko's earnings
inclusive of the net gain on sale of assets as well as increased
lease revenue from CACIL's re-leased aircraft.
The RAS segment's Adjusted EBITDA was $67.5 million, an increase of $4.6 million. Fourth quarter results were
impacted by:
- an increase in other revenue of $5.5
million due to an increase in parts sales and contract
flying partially offset by a decrease in third-party MRO activity;
and
- an increase in aircraft leasing revenue under the CPA of
$2.7 million primarily due to a
higher US dollar exchange rate; offset by
- a decrease in capitalization of major maintenance overhauls on
owned aircraft of $0.4 million;
and
- an increase in general administrative expenses attributable to
increased operations.
In the fourth quarter of 2022, Chorus began disclosing corporate
head-office expenses separate from RAS, enabling a clearer
assessment of RAS' operating performance. Corporate Adjusted EBITDA
or net expenses of $5.4 million was
higher than the fourth quarter 2021 by $1.8
million, due to:
- an increase in general administrative expenses related to
professional fees associated with the Falko Acquisition, higher
salaries, wages and benefits and travel expenses than the prior
quarter year due to the impact of COVID-19 in 2021; offset by
- a decrease in stock-based compensation of $0.4 million due to the change in fair value of
the Total Return Swap offset by an increase in the Common Share
price.
Adjusted net income was $31.8
million for the quarter, an increase of $10.4 million over the fourth quarter of 2021 due
to:
- a $39.1 million increase in
Adjusted EBITDA as previously described; partially offset by
- an increase in depreciation expense of $14.9 million primarily attributable to
Falko;
- an increase of $7.4 million in
income tax expense;
- an increase in net interest costs of $4.2 million primarily related to interest on
long-term debt assumed as part of the Falko Acquisition, partially
offset by the repayment of certain aircraft financings and the
partial redemption of the 6.00% Debentures in December 2021; and
- a change in net foreign exchange of $1.3
million.
Net income increased $35.7 million
over the fourth quarter of 2021 primarily due to:
- the previously noted increase in Adjusted net income of
$10.4 million;
- an increase in net unrealized foreign exchange gains of
$14.6 million;
- a decrease in impairment provision of $14.6 million; and
- a decrease in inventory provision of $1.0 million; partially offset by
- an increase in lease repossession costs of $2.5 million; and
- a decrease in income tax recoveries on adjusted items of
$2.1 million.
Annual Summary
Chorus reported Adjusted EBITDA of $441.0
million for 2022, an increase of $111.6 million over the same prior year
period.
The RAL segment's Adjusted EBITDA was $219.5 million, an increase of $108.2 million primarily due to the inclusion of
eight months of earnings from Falko, net gain on sale of assets,
the claims recoveries in the Virgin Australia and Aeromexico
bankruptcies and increased lease revenue from CACIL's re-leased
aircraft.
The RAS segment's Adjusted EBITDA was $248.8 million an increase of $14.0 million due to:
- an increase in other revenue of $15.2
million due to an increase in parts sales and contract
flying and the sale of four Dash 8-100s that were held for resale
partially offset by a decrease in third-party MRO activity;
- an increase in aircraft leasing revenue under the CPA of
$5.6 million primarily due to a
higher US dollar exchange rate; and
- an increase in capitalization of major maintenance overhauls on
owned aircraft of $2.0 million;
partially offset by
- an increase in general administrative expenses attributable to
increased operations.
The Corporate Adjusted EBITDA or net expenses of $27.2 million was higher than the 2021 by
$10.6 million due to:
- an increase in stock-based compensation of $6.4 million due to one-time restructuring grants
and an increase in the Common Share price, offset by the change in
fair value of the Total Return Swap; and
- an increase in general administrative expenses related to
professional fees associated with the Falko Acquisition, higher
salaries, wages and benefits and higher travel expenses due to the
impact of COVID-19 in 2021.
Adjusted net income of $118.8
million, an increase of $55.0
million over the same prior year period primarily due
to:
- a $111.6 million increase in
Adjusted EBITDA as previously described; partially offset by
- an increase in depreciation expense of $35.6 million primarily attributable to
Falko;
- a $13.2 million increase in
income tax expense offset by lower income tax recoveries on
adjusted items;
- an increase in net interest costs of $4.5 million primarily related to interest on
long-term debt assumed as part of the Falko Acquisition and
interest on the Series B Debentures and Series C Debentures
partially offset by the repayment of certain aircraft financings
and the partial redemption of the 6.00% Debentures in December 2021;
- a decrease in gain on property and equipment of $1.6 million; and
- a loss on fair value of investments of $1.1 million.
Net income of $51.9 million, an
increase of $72.4 million over the
same prior year period primarily due to:
- the previously noted increase in Adjusted net income of
$55.0 million; and
- one-time restructuring costs of $80.7
million in 2021 related to the 2021 CPA Amendments; offset
by
- an increase in lease repossession costs of $19.1 million;
- a decrease in income tax recoveries on adjusted items of
$16.1 million;
- an increase in restructuring credit loss provision of
$10.4 million;
- a change in net foreign exchange of $8.7
million;
- strategic advisory fees related to the Falko Acquisition of
$8.5 million;
- an increase in impairment provisions of $2.1 million in the RAL segment; and
- an increase in employee separation program costs, exclusive of
the cost attributable to the pilot early retirement program and
signing bonuses, of $1.9
million.
Consolidated Financial Analysis
The following table provides Chorus' performance for the three
months and year ended December 31,
2022 compared to the three months and year ended
December 31, 2021.
(expressed in
thousands of Canadian
dollars)
|
Three months ended
December 31,
|
Year ended December
31,
|
2022
|
2021
|
Change
|
Change
|
2022
|
2021
|
Change
|
Change
|
$
|
$
|
$
|
%
|
$
|
$
|
$
|
%
|
|
|
|
|
|
|
|
|
|
Operating
revenue
|
439,755
|
346,516
|
93,239
|
26.9
|
1,595,804
|
1,023,275
|
572,529
|
56.0
|
Operating
expenses
|
367,150
|
309,952
|
57,198
|
18.5
|
1,407,538
|
952,296
|
455,242
|
47.8
|
|
|
|
|
|
|
|
|
|
Operating
income
|
72,605
|
36,564
|
36,041
|
98.6
|
188,266
|
70,979
|
117,287
|
165.2
|
Net interest
expense
|
(28,809)
|
(24,565)
|
(4,244)
|
17.3
|
(100,843)
|
(96,333)
|
(4,510)
|
4.7
|
Foreign exchange gain
(loss)
|
14,146
|
899
|
13,247
|
1,473.5
|
(13,612)
|
(4,595)
|
(9,017)
|
196.2
|
Gain on property
and
equipment
|
16
|
7
|
9
|
128.6
|
172
|
1,725
|
(1,553)
|
(90.0)
|
Gain (loss) on fair
value of
investments
|
440
|
—
|
440
|
100.0
|
(133)
|
—
|
(133)
|
(100.0)
|
Other
|
—
|
344
|
(344)
|
100.0
|
—
|
344
|
(344)
|
100.0
|
|
|
|
|
|
|
|
|
|
Income (loss) before
income
tax
|
58,398
|
13,249
|
45,149
|
340.8
|
73,850
|
(27,880)
|
101,730
|
364.9
|
Income tax
(expense)
recovery
|
(12,546)
|
(3,090)
|
(9,456)
|
(306.0)
|
(21,933)
|
7,395
|
(29,328)
|
(396.6)
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
45,852
|
10,159
|
35,693
|
351.3
|
51,917
|
(20,485)
|
72,402
|
353.4
|
Net income attributable
to
non-controlling interest
|
650
|
—
|
650
|
100.0
|
3,027
|
—
|
3,027
|
100.0
|
Net income (loss)
attributable
to Shareholders
|
45,202
|
10,159
|
35,043
|
344.9
|
48,890
|
(20,485)
|
69,375
|
338.7
|
Preferred share
dividends declared
|
(8,913)
|
—
|
(8,913)
|
100.0
|
(22,902)
|
—
|
(22,902)
|
100.0
|
Earnings (loss)
attributable to
Common Shareholders
|
36,289
|
10,159
|
26,130
|
257.2
|
25,988
|
(20,485)
|
46,473
|
(226.9)
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA(1)
|
129,542
|
90,463
|
39,079
|
43.2
|
441,046
|
329,440
|
111,606
|
33.9
|
Adjusted
EBT(1)
|
44,956
|
27,209
|
17,747
|
65.2
|
150,937
|
82,742
|
68,195
|
82.4
|
Adjusted net
income(1)
|
31,826
|
21,456
|
10,370
|
48.3
|
118,842
|
63,890
|
54,952
|
86.0
|
(1) These are
non-GAAP financial measures
|
Outlook
(See cautionary statement regarding forward-looking
information below)
Chorus has the key elements to successfully execute on its
strategy to transition to an asset light leasing model while
growing its contractual fund management business and its RAS
segment. The key elements include:
- Strong and predictable core earnings from the RAS segment, with
the potential to expand into adjacent and complementary business
lines;
- Significant wholly-owned or majority-owned aviation assets that
can be monetized to reduce debt and return capital to Common
Shareholders while also providing funding to improve the growth and
return profile of the business over time through accretive
investments; and
- Growing the Falko series of funds from which Chorus can
generate attractive returns via asset management fees,
co-investment returns and incentive payments.
The asset light leasing model will enable Chorus to achieve
greater scale in its leasing business by co-investing alongside
third-party equity investors in Falko-managed funds, while
decreasing risk to Chorus by reducing the use of recourse debt
financing. As Chorus transitions to an asset light leasing model,
asset sales will generate Free Cash Flow that can be deployed to
pursue accretive investment opportunities and/or return capital to
Common Shareholders. As part of this asset light transformation,
Chorus is targeting:
- Aircraft asset sales: Chorus intends to
opportunistically trade RAL's wholly-owned or majority-owned
aircraft including in connection with the expected windup of its
67.45% ownership in Ravelin Holdings LP by its tenth anniversary in
2025. As of December 31, 2022,
Ravelin Holdings LP held an interest in 39 aircraft with a net book
value of US $405.4 million and
secured debt of US $228.6 million. As
asset sales occur, the related leasing revenues in RAL will
decrease, which will be partially offset by lower depreciation and
debt servicing costs and earnings from Falko managed funds.
- Reduced leverage: Chorus anticipates its Leverage Ratio
will be between 2.5 to 3.5 by December 31,
2024, given the contractual nature of Chorus' earnings,
amortizing debt repayments, and the expectation for asset sales.
Deleveraging amounts will vary from quarter-to-quarter depending on
the timing and quantum of asset sales.
- Growth: The expansion of Falko managed funds and the RAS
business into adjacent and complimentary specialty aviation
business lines.
Chorus' forecast for the year ending December 31, 2023 is as follows:
|
Consolidated
|
(expressed in
thousands of Canadian dollars)
|
|
To
|
|
$
|
$
|
|
|
|
Revenue(1)(2)
|
1,500,000
|
1,700,000
|
Adjusted
EBITDA(1)(3)
|
410,000
|
450,000
|
Adjusted
EBT(1)(3)
|
135,000
|
165,000
|
Net debt to Adjusted
EBITDA(1)(3)
|
3.6x
|
4.0x
|
Free Cash
Flow(3)
|
260,000
|
330,000
|
|
|
|
(1) RAL's
forecast for the year ending December 31, 2023 is as follows:
Revenue is expected to be between $240.0 million to $260.0 million,
Adjusted EBITDA is expected to be between $210.0 million to $235.0
million and Adjusted EBT is expected to be between $70.0 million to
$85.0 million.
|
(2) Controllable
Cost Revenue and Pass-Through Revenue are expected to be between
$0.95 billion and $1.1 billion included in both revenue and
expenses.
|
(3) These are
non-GAAP financial measures.
|
2023 Key Economic Assumptions:
- The forecast assumes the launch in the first half of 2023 of a
new investment fund managed by Falko with (i) a minimum of US
$500.0 million in capital commitments
and (ii) management fees and economic terms commensurate with those
in Falko's prior funds.
- The forecast revenue is based on current contracted lease
revenue and forecasted revenues for leased aircraft and asset
management fees. Aircraft leasing revenue under the CPA and Fixed
Margin revenue is expected to be US $110.0
million and $63.0 million,
respectively, in 2023. (2022: US $114.5
million and $66.3 million,
respectively).
- Asset sales of approximately US $50.0
million to $100.0 million in
2023 with a loan-to-value of between 50% and 60% generating net
proceeds between US $25.0 million and
US $50.0 million. If material asset
sales are executed in 2023, this may reduce expected revenue in
RAL, depending on the timing of such sales.
- The forecast uses a foreign exchange rate of 1.30 for 2023 to
translate USD to CAD revenue.
RAL's gross lease receivable may decrease from the December 31, 2022 balance of US $104.7 million to between US $95.0 million and US $100.0 million by the end of 2023 due to rent
relief arrangements1 and repayment expectations.
RAL's lease deferral receivable exposure is partially mitigated
by security packages held of approximately US $17.1 million (December 31, 2021 - US $21.1 million).
1
Following the onset of the COVID-19 pandemic, RAL received requests
from many 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.
|
Capital Expenditures
Capital expenditures in 2023, are expected as follows:
(expressed in
thousands of Canadian
dollars)
|
|
|
|
Actual
|
|
|
|
Year
ended
|
Year
ended
|
Planned
2023(1)
|
December 31,
2022
|
December 31,
2021(2)
|
$
|
|
$
|
$
|
$
|
Capital expenditures,
excluding
aircraft acquisitions
|
26,000
|
to
|
32,000
|
15,914
|
7,019
|
Capitalized major
maintenance
overhauls(3)
|
5,000
|
to
|
10,000
|
15,974
|
20,296
|
Aircraft acquisitions
and
improvements
|
5,000
|
to
|
8,000
|
30,392
|
47,392
|
|
36,000
|
to
|
50,000
|
62,280
|
74,707
|
(1) The 2023 plan
includes reconfiguration costs on aircraft and certain aircraft
improvements in the RAL segment which have been converted to
Canadian from US dollars using a foreign exchange rate of 1.3544,
the December 31, 2022 closing day rate from the Bank of
Canada.
|
(2) The 2023 plan
includes between $3.0 million to $5.0 million of costs that are
expected to be included in Controllable Costs. Actual 2022 and 2021
costs include $10.1 million and $8.1 million, respectively, which
were included in Controllable Costs.
|
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 under Chorus' profile
on SEDAR (www.sedar.com).
Investor Conference Call / Audio Webcast
Chorus will hold an analyst call at 9:00
ET on February 16, to discuss
the fourth quarter and year-end 2022 financial results. The call
may be accessed by dialing 1-888-664-6392. The call will be
simultaneously audio webcast via:
https://app.webinar.net/Ld09Pzd7gp5.
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 23, by dialing
toll-free1-888-390-0541 and using passcode 611996#.
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 second quarter of 2022 to include expected credit loss
provision related to anticipated aircraft repossessions
("restructuring expected credit loss provision") 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, restructuring expected credit loss
provision, 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 second quarter of 2022 to include the expected credit
loss provision related to anticipated aircraft repossession
("restructuring expected credit loss provision") to facilitate
comparability of its results.
Chorus revised its definition of Adjusted EBITDA in the fourth
quarter of 2022 to include the gain (loss) on the fair value of
investments related to fund investments as this is a key operating
item for Chorus.
Adjusted EBT and EBITDA should not be used as exclusive measures
of cash flow because these measures do 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, restructuring expected credit loss provision,
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, restructuring expected credit loss provision,
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, restructuring
expected credit loss provision, 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, restructuring expected credit loss
provision, 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.
Net Debt to Adjusted EBITDA
Net debt to trailing
12-month Adjusted EBITDA leverage ratio (also referred to as
"leverage ratio") is used by Chorus as a means to measure financial
leverage. Leverage ratio is calculated by dividing Net debt by
trailing 12-month Adjusted EBITDA. Leverage is not a recognized
measure under GAAP, and therefore is unlikely to be comparable to
similar measures presented by other companies. Management believes
leverage to be a useful term when monitoring and managing debt
levels. In addition, as leverage is a measure frequently analyzed
for public companies, Chorus has calculated the amount to assist
readers in this review. Leverage should not be construed as a
measure of cash flows.
Free Cash Flow (formerly Adjusted Cash Provided by Operating
Activities)
Free Cash Flow is defined as cash provided by
operating activities less net changes in non-cash balances related
to operations, capital expenditures excluding aircraft acquisitions
and improvements plus net proceeds on asset sales (proceeds on
disposal of property and equipment less the related debt repayments
for the assets sold).
Forward-Looking Information
This news release includes
forward-looking information and statements. Forward-looking
information and statements are 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 and
statements may involve but are not limited to comments with respect
to strategies, expectations, planned operations or future actions.
Forward-looking information and statements relate 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 and statements, by their
nature, are based on assumptions, including those referenced below,
and are 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
information and 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 and statements.
Examples of forward-looking information and statements 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 competitive position, Chorus'
ability to grow Falko's asset management business and realize the
benefit of synergies among its subsidiaries, and the completion of
pending or planned transactions (including the successful close of
a new Falko-managed fund). Actual results may differ materially
from results indicated in forward-looking information for a number
of reasons, including Chorus' ability to successfully integrate
Falko's operations and employees and realize the anticipated
benefits of the Falko acquisition including the transition to an
asset light model; the potential impact of the completion of the
Falko acquisition on relationships, including with employees,
suppliers, customers, investors and other providers of capital;
Falko's ability to successfully launch a new fund on the terms
currently contemplated or at all; deviations from the key economic
assumptions described in the Outlook section; a prolonged duration
of the COVID-19 pandemic (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, including inflation; the continued
payment (in whole or in part) of amounts due under the CPA and/or
under aircraft lease agreements with Chorus' customers; the risk of
disputes under the CPA and/or under aircraft lease agreements;
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' vision is to
deliver regional aviation to the world. Headquartered in
Halifax, Nova Scotia, Chorus is an
integrated provider of regional aviation solutions, including asset
management services. Its principal subsidiaries are: Falko Regional
Aircraft, the world's largest asset manager and aircraft lessor
focused solely on the regional aircraft leasing segment; Jazz
Aviation, the sole provider of regional air services under the Air
Canada Express brand; and Voyageur Aviation, a provider of
specialty air charter, aircraft modification, and parts
provisioning services to regional aviation customers around the
world. Together, Chorus' subsidiaries provide support services that
encompass every stage of a regional aircraft's lifecycle,
including: aircraft acquisition and leasing; aircraft
refurbishment, engineering, modification, repurposing and
transition; 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 5.75% Senior Unsecured Debentures due December 31, 2024, 6.00% Convertible Senior
Unsecured Debentures due June 30,
2026, and 5.75% Senior Unsecured Debentures due June 30, 2027 trade on the Toronto Stock Exchange
under the trading symbols 'CHR.DB.A', 'CHR.DB.B', and 'CHR.DB.C'
respectively. www.chorusaviation.com.
SOURCE Chorus Aviation Inc.