TSX: CHR
D e l i v e r i n g r e g i o n a l a v i a t i o nt o t h e w o r l d
March 25, 2019
Chorus Aviation Overview
This presentation contains “forward-looking information” as defined under applicableCanadian securities laws. Forward-looking information is identified by the use of terms andphrases such as “anticipate”, “believe”, “could”, “estimate”, “expect”, “intend”, “may”, “plan”,“predict”, “project”, “will”, “would”, and similar terms and phrases, including references toassumptions. Such information may involve but is not limited to comments with respect tostrategies, expectations, planned operations or future actions.
Forward-looking information relates to analyses and other information that are based onforecasts of future results, estimates of amounts not yet determinable and other uncertainevents. Forward-looking information, by its nature, is based on assumptions and is subject toimportant risks and uncertainties. Any forecasts or forward-looking predictions or statementscannot be relied upon due to, among other things, external events, changing marketconditions and general uncertainties of the business. Such statements involve known andunknown risks, uncertainties and other factors that may cause actual results, performance orachievements to differ materially from those expressed in forward-looking information.Factors that could cause results to differ materially from those expressed in this presentationinclude those identified in Chorus’ public disclosure record available at www.sedar.com andthe risk factors identified in Chorus’ Annual Information Form dated February 21, 2019.Statements containing forward-looking information in this presentation represent Chorus'expectations as of the date of this presentation (or as of the date they are otherwise stated tobe made) and are subject to change after such date. Chorus disclaims any intention orobligation to update or revise such statements to reflect new information, subsequent eventsor otherwise, unless required by applicable securities laws.
Caution regarding forward-looking information
Chorus Aviation Overview 2
3
Chorus is a fast-growingglobal provider of integrated regional aviation solutions
Chorus Aviation Overview
Regional aviation is based on aircraft carrying Up to 130 passengers
Regional Jets
Up to 130 passengers
Bombardier CRJ-200 to CRJ-1000
Embraer E135 to E190
Airbus A220
83%
37%
17%
Turboprops
RegionalJets
NarrowBody Jets
2 main types of regional aircraft
Flying shorter distances than Narrow Body jets
4Chorus Aviation Overview
3,600
2,300
5,900
15,800
4,500
RegionalAircraft
NarrowBody
WideBody
Accounting for ~22% of the world’s commercial fleet
Regional aircraft are fundamental to efficient air transport networks and link 60% of the world’s communities 1
Jets
TP
1 OAG (2012). 2 FlightGlobal (2019), includes in-service aircraft with more than 20 seats
50% of world passengers fly
<500 miles
Turbo props
Up to 90 passengers
Bombardier Dash 8 – 100 to 400
ATR ATR 42 to ATR 72
% of all flights below 500 miles 1 Worldwide aircraft fleet 2
Regional aviation shows strong stability through economic cycles
Chorus Aviation Overview 5
Regional aviation is a defensive sector in economic downturn
Indexed aircraft value volatility for narrow-body, turboprop and regional jet aircraft
80
85
90
95
100
105
110
115
120
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014
● Mainline operators look to contract out more flying to regional partners
● Smaller aircraft are best suited to serve reduced market demand
Turbopropaircraft
Narrow-bodyaircraft
Regional jetaircraft
Source: AVITAS
1
2
3
Chorus has a unique strategy to provide a full suite of regional aviation services to customersworldwide
Chorus is well-positioned for significant growth opportunities, as an international aircraft lessor and leasing opportunities within its CPA with Air Canada
Chorus has a predictable revenue stream, with 90%+ of annual revenues secured through long-term contracts and strong relationships
6
Investment Highlights
Chorus Aviation Overview
Appendix 2Supplemental information
6Appendix 1Financial Statements
5
Conclusion4Regional Aircraft Leasing
3
Regional Aviation Services
2Chorus Overview
Contents
Chorus Aviation Overview 7
1
● Chorus has become a significant playerin global regional aviation● $1.45B revenues in 2018
● $343M adjusted EBITDA 1 in 2018
● 5,200 employees worldwide
● $1.1B market capitalization as of March 15
● Led by a very experienced and stable management team
● 3 complementary lines of business generate value at every stage of an aircraft’s lifecycle
● 12%+ ROIC in the last 2 fiscal years, including fast-growing aircraft leasing division
8Chorus Aviation Overview
Chorus Overview - Highlights
1 Adjusted EBITDA is a non-GAAP financial measure
Consistently profitable since 2006 IPO
87 Aircraft Leased: 40 outside N-A47 inside CPA
$0.04 Monthly dividend per share (DRIP)
5,200 Employees TSX:CHR Trading symbol
Chorus has become a significant player in global regional aviation
Chorus Aviation Overview 9
~$1.13B market capitalization as of March 15, 2019 1
135 Aircraft owned $343M 2018 Adjusted EBITDA
$1.45B 2018 Revenues
Note: Market capitalization value based on 156,147,655 shares outstanding and TSX closing stock price of $7.30 as of March 15, 2019.
40 years
Joseph RandellPresident and Chief Executive Officer
30 years
Colin CoppCOO and President,Chorus Aviation Services
37 years
Steve RidolfiPresident, Chorus Aviation Capital
26 years
Jolene MahodyExecutive VP and Chief Financial Officer
5 years
Dennis LopesSenior VP, Chief Legal Officer and Corp. Secretary
A highly experienced and stable management team with significant aviation experience
Chorus Aviation Overview 10
Gary OsborneIncoming Chief Financial Officer
27 years
Delivering revenue and net earnings growth
11Chorus Aviation Overview
Operating Revenues
Adjusted EBITDA
Significant growth potential remains, both inside and outsidethe CPA
Adjusted Net Income
107.2115.4
102.0115.4 121.8
2014 2015 2016 2017 2018
$M
▲6.4%
CAGR2014 to 2018
215.9 228.3 248.1 286.9 342.7
2014 2015 2016 2017 2018
$M
1,666 1,545 1,277 1,352 1,451
2014* 2015 2016 2017 2018
$M
▲13.8%
CAGR2014 to 2018
▲6.6%
CAGR2016 to 2018
12%+ ROIC
Effective 2019, the CPA fixed fee compensation reduces from $111.3M (2018) to $75.5 for 2019 and 2020. See slide 22.
Chorus activities are carried out through 2 business segments: Regional Aviation Services and Regional Aircraft Leasing
Chorus Aviation Overview 12
Regional Aircraft Leasing and CPA leasing account for 54% of Adjusted EBITDA and hold strong growth potential
Scheduled Flights
CharterSpecialized
contract flying
MROHeavy mods
and part-out
Spare parts provisioning
Regional Aircraft Leasing 40 40
~ 20%FY 2018 Adjusted EBITDA
Aircraft leasing under CPA 75 47
~ 34%FY 2018 Adjusted EBITDA
Jazz
Jazz Technical Services
Voyageur Airways 20
Voyageur Aerotech
Voyageur Avparts
Total 135 87
Lines of business
Aircraft Fleet
owned
Regional Aviation Services
Jazz Aviation LP
Voyageur Aviation Corp.
Chorus Aviation Capital Corp.
~ 46% FY 2018 Adjusted EBITDA
Legal Entity
DivisionAircraft Leasing
Contracted Flying Maintenance
Chorus operates 13 facilities across Canada plus 3 international offices for its leasing business
13Chorus Aviation Overview
Headquarters (2)
● Admin offices / crew bases (8)
▲ Line maintenance facilities (4)
Heavy maintenance facilities (2)
Vancouver
TorontoMontreal
Calgary
North Bay
●▲
●▲
●▲●▲
●Singapore
Chorus Aviation Capital International offices
Halifax●
Ireland
●England
Note: Chorus’ presence in Singapore and England consists of business development representatives
●
Grow our regional aircraft leasing business through aircraft acquisitions, portfolio acquisitions and potential skyline transactions
Grow our regional aviation services of contracted flying, MRO and technical services
Leverage the synergies and expertiseacross our lines of business to furtherdrive diversification and profit
14Chorus Aviation Overview
Our strategic agenda
ContractedFlying
Maintenance, Repair &Overhaul
Aircraft Leasing & Trading
Profit growth synergiesacross our 3 lines of business
Chorus Aviation Overview 15
Chorus generates value at every stage of an aircraft’s lifecycle
MRO Services
New Customers
Appendix 2Supplemental information
6Appendix 1Financial Statements
5
Conclusion4Regional Aircraft Leasing
3
Regional Aviation Services
2Chorus Overview
Contents
Chorus Aviation Overview 16
1
● Largest historical business segment currently generating ~80% of company adjusted EBITDA
● Includes aircraft leasing under the CPA, contract flying operations and range of MRO, engineering and technical services.
● Capacity Purchase Agreement (CPA) between Jazz and Air Canada extendedto 2035● Minimum $2.5B in revenues over 17 years
● Provides opportunities to lease new larger aircraft and modernize older ones
● Growth opportunities for MRO activities
17Chorus Aviation Overview
Regional Aviation Services - Highlights
See cautionary statement regarding forward-looking information on slide 2
Contracted flying generates greatest revenue stream
Operates scheduled service through a CPA with Air Canada under the Air Canada Express brand
Offers charters throughout North America for corporate clients, governments, special interest groups and individuals
18Chorus Aviation Overview
Provides medical, logistical and humanitarian flight operations to blue chip customers globally
Air Canada Express flying
Charter flights
Specialized contracted flying
Chorus is Air Canada’s primary regional partner
Responsibilities under the Capacity Purchase Agreement
Air Canada Jazz
● Purchases capacity
● Manages routes
● Sets flight schedules
● Sets ticket prices
● Conducts marketing
● Assumes commercial risk
● Retains revenues for passenger & cargo transport
● Supply of flying crews
● Airframe maintenance
● Flight operations
● Some airport operations
● General administration
19Chorus Aviation Overview
● Flexibility to respond quickly and efficiently to market changes and opportunities
● Jazz manages Air Canada Express operations at 36 airports across Canada● Source of qualified pilots through Pilot Mobility Program
Benefits for Air Canada
~74%of Air Canada’s regional seat capacity
116 Aircraft operated by Jazz
47 Leased under the CPA
~700daily flights
79N.A. destinations
Largest Chorus
customer
● $97.26M equity investment by Air Canada in Chorus● 9.99% initial ownership● 60-month investment hold● DRIP enrollment and standstill● One seat on Chorus Board
● 60% of investment proceeds to purchase nine new CRJ900s for Air Canada Express fleet will increase leasing revenue under the CPA
● 40% of investment proceeds to acquire aircraft for the leasing business
20Chorus Aviation Overview
Chorus and Air Canada are true allies
● Guarantees ~$2.5B in contracted revenue over 17 years● $1.6B from aircraft leasing● $858M from fixed fees
● Plan to modernize Air Canada Express fleet with increased leasing of larger aircraft
● Margin risk on controllable costsreduced to a maximum of $2M per year
Amended/extended CPA with Air Canada to 2035
Chorus Aviation Overview 21
Secures highly predictable revenues and earnings for the next 17 years
See cautionary statement regarding forward-looking information on slide 2
253 266593 748
134
577
980
1,610
223 151
325308
399
548
858
OriginalCPA
AmendedCPA
OriginalCPA
AmendedCPA
OriginalCPA
AmendedCPA
OriginalCPA
AmendedCPA
Fixed fee
Aircraft leasing
476 417
9181,056
1341
976
1,528
2,468
CPA extension increases total minimum contracted revenue by ~$940M
● Near-term fixed fee reductions more than offset by term extension and aircraft leasing
● Aircraft leasing driving ~65% of the contracted revenue for the term of the amended agreement
● Potential for additional lease extensions/renewals beyond 2025
● Maximum available performance incentives will average ~$3.4M annually over the term ● These are variable in nature
and are not included in the contracted revenue figures
22Chorus Aviation Overview
1 Certain current aircraft leases under the current CPA extend past December 31, 20252 ‘Total Amended CPA’ column includes contracted aircraft leasing for 2036 and beyond estimated at $19 millionSee cautionary statement regarding forward-looking information on slide 2
2019-2020Significant
fleet transition
2021-2025Min. 105 aircraft
2026-2035Min. 80 aircraft TOTAL
($59M) +$138M +$842M +$940M
Minimum contracted revenue in CPA ($M)
2
Change vsOriginal CPA
Aircraft type Seat Cap.
Existing Fleet Comment Amended
CPA
Bombardier Q400 NextGen
74 44 ● 3 will be removed in 2023● 12 currently leased under the CPA will
extend lease to 2030● 19 leases expiring between the end of
2025 and 2028
36
Bombardier CRJ-900
75 21 ● 9 CRJ900s will be purchased and leased under the CPA
● 5 CRJ900s will be sourced by Air Canada and leased to Jazz in the first half of 2019
35
Bombardier CRJ-200
50 10 ● Transferred to Jazz from Air Georgian● 15 to operate until 2025
15
Bombardier Dash 8-300
50 26 ● 19 aircraft will undergo an Extended Service Program and generate leasing revenue under the CPA
● 8 of the 19 completed to date
19
Bombardier Dash 8-100
37 15 ● Removed from the fleet and replaced with larger aircraft
0
The amended CPA brings significant modernizationto the Air Canada Express fleet
23Chorus Aviation Overview
● Fleet known by aircraft type until 2025● Post-2025: Commitment to operate a minimum of 80 aircraft in the 75 to 78 seat range● Current lease commitments beyond 2025 leave substantial room for additional lease extensions /
renewal on current aircraft and possibility of new aircraft
Maintenance Repair & Overhaul (MRO) and Parts
● 6-bay, 80 000 sq. ft. facility
● 24/7 operations provide flexibility to serve carriers exactly when needed
● Certified to perform traditional heavy maintenance activities on Bombardier and Embraer 135/145 regional aircraft
● 200 000 sq. ft. facility
● Performs heavy MRO activities, customized designs and engineering and aircraft modifications
● Transport Canada, FAA and European Aviation Safety Agency approved
● Transport Canada certified Canadian Design Approval Organization
● Supplemental Type Certificates for Dash 8 100/200/300/ Q400s and Dash 7s
● Provides parts provisioning, sales and service for regional aircraft - great complement to MRO activities
24Chorus Aviation Overview
Halifax, NS
North Bay, ON
Appendix 2Supplemental information
6Appendix 1Financial Statements
5
Conclusion4Regional Aircraft Leasing
3
Regional Aviation Services
2Chorus Overview
Contents
Chorus Aviation Overview 25
1
● Rapidly growing business launched in 2017
● Attractive business with many synergies with Contracted Flying and MRO
● Led by industry veterans with strong relationships throughout the industry, including over 100 airlines
● Key achievements in 2 years:● C$401M1 capital raised to date
● Committed fleet of 40 aircraft worth US$ 860M
● US$300M warehouse facility
● Already the world’s 4th largest regional aircraft lessor based on portfolio value
26Chorus Aviation Overview
Regional Aircraft Leasing - Highlights
1 $97.26M of the $401M relates to Air Canada’s equity investment; 40% will be used to acquire third-partyleases and 60% to acquire aircraft to operate under the CPA
See cautionary statement regarding forward-looking information on slide 2
Oil
cris
is
Gul
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Asi
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risi
s
9/1
1
SA
RS
Fin
anci
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risi
s
2x
Regional aviation holds strong growth potential worldwide
27Chorus Aviation Overview
● Resilient passenger air traffic growth has outperformed GDP growth by ~2.0x over the past 10 years 1
● 20-year world annual traffic growth forecast of 4.4% 1
● Growth in leased aircraft fleet drivenby 2 factors:● Increase in global fleet● Increasing use of leased aircraft (vs owned)
● Operating leases provide more operational flexibility, lower financing requirements, and no residual value risk
Air Travel expected to double from 2015 to 2025 1
Airlines increasingly dependent on operating leases 2
0
5
10
15
20
25
1977 1982 1987 1992 1997 2002 2007 2012 2017 2022 2027 2032 2037
2,0003,100
4,7006,100
7,3009,400
17%
24%
32%36%
40%43%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
1995 2000 2005 2010 2015 2019
Operating lease market share
Operating lease fleet (est.)
World aircraft fleet on an operating lease
World annual traffic (trillion RPK)
1 Airbus Global Market Forecast (2018-2037), 2 FlightGlobal (2019), includes in-service TPs, RJs, and NBs with more than 20 seats
Regional aircraft leasing is an attractive business
● 50% of global passengers fly on trips shorter than 500 miles● Regional aircraft allow airlines to optimize aircraft size
and reduce per-seat-cost
● 70-130 seat fleet expected to grow at ~3.7% per year overthe next 20 years1
● Penetration rate of operating leases is still relatively low for regional aircraft (~25%) compared to narrow-body jets (~49%)
28Chorus Aviation Overview
● Economic growth in emerging markets is expected to significantly outpace growth in advanced economies
● Fast growth of the urban middle class in emerging marketswill create opportunities for regional air travel
● Stable technology of regional aircraft reduces volatility in residual value compared to narrow-body aircraft
● Steady historical deliveries
Essential component of commercial aviation
Very resilient demand from a broad user base
Geographically diverse demand
Stable technologyand supply
1 Bombardier Market Forecast 2017-2036
1
2
3
4
5 pillars of our aircraft leasing growth strategy
● Industry veterans based on 3 continents
● Strong relationships with over 100 airlines
● Seek airline customers with good credit quality and/or strong prospects
● Employ collaborative approach to working with airlines
● Build a diversified customer base
29Chorus Aviation Overview
● Acquire modern technology, high demand, marketable aircraft
● Use sale leasebacks to build airline relationships
● Use skyline purchases to reduce aircraft acquisition costs
● Target 5 to 10 years to provide significant visibility into future
● Aim to recover cost of the aircraft over first lease
● Seek debt financing from a variety of sources
● Reserve capital for select deals to allow for opportunistic purchasing
Highly Experienced Team
Customers
New to Mid-Life Aircraft
Long-Term Leases
Low Cost of Capital
Launched third-party leasing in January 2017 to seize opportunities in regional aircraft leasing
● Provides ~$1.6B of investment capital when levered at 3:1
● ~75% of capital committed as of March 26, 2019
● Remaining capital expected to be committed by early 2020
● 60% of Air Canada’s investment allocated to leasing under the CPA
C$ 401 M raised since 2017 Net proceeds
30Chorus Aviation Overview
C$ M
Investment from Fairfax
Financial
Public share offering
Air Canada Investment
2017 2018 2019
Note: Amounts shown above are expressed in terms of gross proceeds, except for the $401 M, which is net proceedsSee cautionary statement regarding forward-looking information on slide 2
● Approximately ~US$ 645M in future contracted lease revenue1
● Weighted average fleet age of ~3 years2
● Weighted average remaining lease term of ~6.5 years2
● ~87% debt is fixed rate ● Weighted average cost of borrowing of 4.52%3
Committed fleet of 40 aircraft worth US$ 860M
31
1 Includes all 40 aircraft incl. 2019 deliveries. 2 Fleet age and remaining lease term is calculated based on the weighted-average of aircraft net book values as at 31/12/2018. 2019 deliveries not included.3 Reflects actual borrowings as at 31/12/2018. 2019 deliveries not included. Chorus has the ability to adjust lease rate as a result of changes in variable interest rates on certain of its leases.
N. America3 Aircraft
S. America5 Aircraft
Europe10 Aircraft
Africa9 Aircraft
Australia3 Aircraft
Asia10 Aircraft
Chorus Aviation Overview
See cautionary statement regarding forward-looking information on slide 2
32Chorus Aviation Overview
Chorus has rapidly become the world’s 4th largestregional aircraft lessor (in portfolio value)
6,025
1,750
1,325
1,200850
575
500
350
325
300
NAC
GECAS
Falko
Chorus
DAE
Elix
TrueNoord
Avmax
CDB
Avation
Chorus is theonly large regional
aircraft lessor which is also an operator
Portfolio value (US$ B)
Source: FlightGlobal (2019); portfolio values based on half-life CMVsChorus value includes 47 aircraft leased under the capacity purchase agreement
33Chorus Aviation Overview
Diversification across airlines, geography and aircraft types
Turboprops Regional Jets
Customer Aircraft committed
Dash 8 ATR CRJ Embraer
Ethiopian 5
Azul 5
Air Nostrum 4
Lion Air 4
Jambojet 4
Philippine Airlines 3
Falcon 3
AeroMexico 3
Flybe 3
Virgin Australia 3
Cityjet 2
KLM 1
Total third-party 40 15 13 6 6
Air Canada 47
Grand total 87 57 13 11 6
Description Sample Chorus Transaction
1 From lessors Purchase of assets with attached leases from lessor’s non-core portfolio
Purchase of 2 E190s with Aeromexico leases attached from Investec
2 From airlines Sale and leaseback of existing or future aircraft deliveries
Purchase of 3 new Bombardier Q400s from Philippine Airlines with concurrent long-term leaseback agreement
3 From aircraft manufacturers
Direct purchase from manufacturers for subsequent lease to airlines
Purchase of 2 Q400 turboprops directly from Bombardier with subsequent lease agreement to JamboJet Airlines
Three ways to acquire leasing assets
Chorus Aviation Overview 34
Global regional aircraft leasing market estimated at~275 new aircraft deliveries per year1
1 Bombardier Market Forecast 2017-2036Source: FlightGlobal (2019), Chorus Aviation estimates
Chorus holds defensive position in economic downturn
● Over 90% of revenues embedded in flight operations and aircraft leasing long-term contracts
● Air Canada assumes risks related to commercial aspects● +/- $2M guardrail on controllable costs● Minimum fleet and aircraft leasing commitments
35Chorus Aviation Overview
● Lower costs and smaller aircraft than mainline carriers● Aircraft leasing provides operational flexibility, reduces
financing requirements and eliminates risk on aircraft residual value
● Rigorous evaluation process● Strong diversification of aircraft type and geography● Diversified customer base with good credit rating
● Mature and efficient regional aircraft● Ability to fly, lease, sell, modify, disassembly and part-out
aircraft
Visibility on future revenues and costs
Protected profit margin under CPA
Better suited to serve reduced market demand
Conservative approach to leasing business
Valuable aircraft lifecycle
See cautionary statement regarding forward-looking information on slide 2
Appendix 2Supplemental information
6Appendix 1Financial Statements
5
Conclusion4Regional Aircraft Leasing
3
Regional Aviation Services
2Chorus Overview
Contents
Chorus Aviation Overview 36
1
1
2
3
Chorus is very well positioned to grow significantly in the regional aircraft leasing business, led by a very strong team of industry veterans and supported by internal expertise and capabilities in regional aviation services
Chorus is committed to grow its regional aviation services, both inside and outside the CPA
Chorus has a predictable revenue stream, with a business model based on long-term contracts, less exposed to downturns than main line carriers and lessors
Chorus Aviation Overview
Conclusion
37
Appendix 2Supplemental information
6Appendix 1Financial Statements
5
Conclusion4Regional Aircraft Leasing
3
Regional Aviation Services
2Chorus Overview
Contents
Chorus Aviation Overview 38
1
Chorus Aviation Overview 39
Consolidated Income Statement For the years ended December 31, 2018 and 2017
Expressed in thousands of Canadian dollars,except earnings per share
Operating revenue 1,451,194 1,352,200 Operating expenses
Salaries, wages and benefits 443,332 444,993 Depreciation and amortization 120,687 103,244 Aircraft maintenance materials, supplies and services 240,744 192,639 Airport and navigation fees 170,180 167,147 Aircraft rent 98,023 99,390 Terminal handling services 21,720 27,907 Other 139,867 143,834
1,234,553 1,179,154
Operating income 216,641 173,046 Non-operating (expenses) income
Interest revenue 2,924 2,246 Interest expense (59,209) (45,757)Loss on disposal of property and equipment (164) (125)Foreign exchange (loss) gain (56,530) 53,886 Other 500 687
(112,479) 10,937
Income before income taxes 104,162 183,983 Income tax expense Current income tax (2,133) (1,589)Deferred income tax (35,041) (15,071)
(37,174) (16,660)
Net income 66,988 167,323 Earnings per share, basic 0.49 1.36
Earnings per share, diluted 0.48 1.33
2018 2017
Chorus Aviation Overview 40
Consolidated Income Statement Fourth quarter 2018 and 2017
Operating Revenue 358,663 356,033 2,630 0.7 1,451,194 1,352,200 98,994 7.3
Operating Expenses 297,402 305,872 (8,470) (2.8) 1,234,553 1,179,154 55,399 4.7
Operating income 61,261 50,161 11,100 22.1 216,641 173,046 43,595 25.2
Net interest expense (14,447) (13,341) (1,106) (8.3) (56,285) (43,511) (12,774) (29.4)
Foreign exchange (loss) gain (33,806) (7,958) (25,848) (324.8) (56,530) 53,886 (110,416) 204.9
Other 22 59 (37) 62.7 336 562 (226) (40.2)
Earnings before Income tax 13,030 28,921 (15,891) (54.9) 104,162 183,983 (79,821) (43.4)
Income tax expense (11,011) (8,918) (2,093) (23.5) (37,174) (16,660) (20,514) (123.1)
Net income 2,019 20,003 (17,984) (89.9) 66,988 167,323 (100,335) (60.0)
Adjusted EBITDA 92,608 82,915 9,693 11.7 342,692 286,912 55,780 19.4
Adjusted EBT 46,116 32,536 13,580 41.7 159,008 132,091 26,917 20.4
Adjusted Net Income 35,105 23,618 11,487 48.6 121,834 115,431 6,403 5.5
Expressed in thousands of Canadian dollars
Three months ended December 31, Year ended December 31,2018 2017 Change Change 2018 2017 Change Change
$ $ $ % $ $ $ %
Chorus Aviation Overview 41
Consolidated Statements of Financial Position As at December 31
Expressed in thousands of Canadian dollars
AssetsCurrent assets
Cash 92,592 78,007Accounts receivable – trade and other 77,097 77,397Inventories 55,691 51,543Prepaid expenses and deposits 13,535 12,920Income tax receivable 704 2,268
Total current assets 239,619 222,135Restricted cash 20,081 13,625Property and equipment 2,001,099 1,742,674Intangibles 2,088 2,392Goodwill 7,150 7,150Deferred income tax asset 4,295 3,022Other long-term assets 41,693 33,647
2,316,025 2,024,645
LiabilitiesCurrent liabilities
Accounts payable and accrued liabilities 190,311 210,809Current portion of obligations under finance leases 3,117 2,762Current portion of long-term incentive plan 4,087 5,844Current portion of long-term debt 142,652 118,567Current portion of consideration payable — 4,387Dividends payable 5,657 5,014Income tax payable 930 —
Total current liabilities 346,754 347,383Obligations under finance leases 2,558 5,219Long-term debt 1,102,783 995,062Convertible units 194,294 193,540Deferred income tax liability 172,254 135,740Other long-term liabilities 67,595 65,679
1,886,238 1,742,623
Equity 429,787 282,022
2,316,025 2,024,645
2018 2017
Chorus Aviation Overview 42
Segmented Financial StatementYear Ended December 31, 2018
Operating revenue 1,371,354 79,840 1,451,194 1,322,816 29,384 1,352,200
Operating expenses 1,194,799 39,754 1,234,553 1,160,216 18,938 1,179,154
Operating income 176,555 40,086 216,641 162,600 10,446 173,046
Net interest expense (36,569) (19,716) (56,285) (36,838) (6,673) (43,511)
Foreign exchange (loss) gain (57,123) 593 (56,530) 57,892 (4,006) 53,886
Other(1) 336 — 336 562 — 562
Earnings (loss) before income tax 83,199 20,963 104,162 184,216 (233) 183,983
Income tax expense (34,311) (2,863) (37,174) (16,584) (76) (16,660)
Net income (loss) 48,888 18,100 66,988 167,632 (309) 167,323
Operating income 176,555 40,086 216,641 162,600 10,446 173,046
Depreciation and amortization(2) 91,827 28,860 120,687 92,011 11,233 103,244
Employee separation(2) 5,364 — 5,364 10,622 — 10,622
Adjusted EBITDA(3) 273,746 68,946 342,692 265,233 21,679 286,912
Earnings (loss) before income tax 83,199 20,963 104,162 184,216 (233) 183,983
Unrealized foreign exchange loss (gain) 49,482 — 49,482 (60,868) — (60,868)
Employee separation program 5,364 — 5,364 10,622 — 10,622 Foreign exchange gain on cash held for deposit
— — — (1,646) — (1,646)
Adjusted EBT(3) 138,045 20,963 159,008 132,324 (233) 132,091
For the year ended December 31, 2018 For the year ended December 31, 2017
(in thousands of Canadian dollars)
Regional Aviation Services
Regional Aircraft Leasing Total
Regional Aviation Services
Regional Aircraft Leasing Total
$ $ $ $ $ $
Chorus Aviation Overview 43
Segmented Financial StatementThree Months Ended December 31, 2018
Operating revenue 335,640 23,023 358,663 340,918 15,115 356,033
Operating expenses 287,024 10,378 297,402 295,502 10,370 305,872
Operating income 48,616 12,645 61,261 45,416 4,745 50,161
Net interest expense (8,710) (5,737) (14,447) (9,604) (3,737) (13,341)
Foreign exchange (loss) gain (34,257) 451 (33,806) (7,132) (826) (7,958)
Other(1) 22 — 22 59 — 59
Earnings before income tax 5,671 7,359 13,030 28,739 182 28,921
Income tax expense (10,506) (505) (11,011) (8,159) (759) (8,918)
Net (loss) income (4,835) 6,854 2,019 20,580 (577) 20,003
Operating income 48,616 12,645 61,261 45,416 4,745 50,161
Depreciation and amortization(2) 23,048 8,082 31,130 25,874 5,623 31,497
Employee separation(2) 217 — 217 1,257 — 1,257
Adjusted EBITDA(3) 71,881 20,727 92,608 72,547 10,368 82,915
Earnings before income tax 5,671 7,359 13,030 28,739 182 28,921
Unrealized foreign exchange loss 32,869 — 32,869 2,358 — 2,358
Employee separation program 217 — 217 1,257 — 1,257
Adjusted EBT(3) 38,757 7,359 46,116 32,354 182 32,536
For the three months ended Dec. 31, 2018 For the three months ended Dec. 31, 2017
(in thousands of Canadian dollars)
Regional Aviation Services
Regional Aircraft Leasing Total
Regional Aviation Services
Regional Aircraft Leasing Total
$ $ $ $ $ $
Appendix 2Supplemental information
6Appendix 1Financial Statements
5
Conclusion4Regional Aircraft Leasing
3
Regional Aviation Services
2Chorus Overview
Contents
Chorus Aviation Overview 44
1
Opportunities for incremental revenue at end of leases under the CPA
● Current lease commitments beyond 2025 leave substantial room for additional lease extensions/renewals on current and possibly new aircraft to Air Canada in amended CPA
● Lease expiry of each aircraft is concurrent with full debt repayment; no exposure for Chorus on debt
● 19 Q400 aircraft have lease terms expiring from end of 2025 toend of 2028● Put and call rights to Air Canada in 2025 no longer applicable due to CPA extension
to 2035
45Chorus Aviation Overview
Significant leasing opportunity as each aircraft lease under the CPA expires
Year end fleet counts 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035
Chorus-owned 75-78 seat aircraft earning leasing revenue under CPA
39 481 48 48 45 45 501 44 39 31 26 26 14 5 5 5 5
Chorus-owned Dash 8-300 aircraft2 (50-seat aircraft) earning leasing revenue under CPA
16 17 18 19 19 19 19 - - - - - - - - - -
Chorus-owned aircraft with expired leases 3, 4 - - - - 3 3 3 28 33 41 46 46 58 67 67 67 67
Total 55 65 66 67 67 67 72 72 72 72 72 72 72 72 72 72 72
1 Includes 9 CRJ900s acquired and leased in 2020 and 5 aircraft to be determined acquired and leased in 2025.2 As of January 14, 2019, the Extended Service Program was completed on eight Dash 8-300s which are earning lease revenue under the CPA. The remaining 11 aircraft will gradually be completed by December 31,
2022 and will earn lease revenue under the amended CPA.3 Owned Chorus aircraft that have their lease expire under the amended CPA. These aircraft have the potential for re-lease with Air Canada or other third parties, sale or part out.4 Aircraft debt is fully paid off with each lease expiry, including the 3 Q400s removed in 2023.
Average of 33 Average of 7
Average of 52
Minimum CPA fleet commitment provides certainty
● Enhanced relevance to Air Canada with CRJ200 regional AC Express capacity reallocated to Jazz
● Further fleet modernization and transition to larger gauge equipment with the Dash 8-100s exiting the fleet earlier
● All owned Dash 8-300 aircraft maintained as covered fleet until 2025
● Minimum fleet of 105 determines fixed fee revenue floor; set at $75.5 million in each of 2019 and 2020, given substantial fleet transitions and averages $61.6 million from 2021 -2025
● Minimum covered fleet of 80 aircraft in the 75-78 seat range provides minimum revenue floor of $399 million over extended term from 2026-35
Significant regional network footprintunder amended CPA
46Chorus Aviation Overview
Amended CPA 2019 2020 2021 2022 2023 2024 2025 2026 Onward
DASH 8-100 - - - - - - - -
DASH 8-300 19 19 19 19 19 19 19 -
CRJ900 35 35 35 35 35 35 35 -
Q400 36 36 36 36 36 36 36 -
CRJ200 15 15 15 15 15 15 15 -
Type TBD 80
TOTAL 105 105 105 105 105 105 105 80
Previous CPA 2019 2020 2021 2022 2023 2024 2025 2026 Onward
DASH 8-100 15 15 12 12 4 1 - -
DASH 8-300 26 26 26 26 26 26 26 -
CRJ900 21 21 21 21 21 21 21 -
Q400 44 49 49 49 49 49 49 -
CRJ200 10 - - - - - - -
TOTAL 116 111 108 108 100 97 96 -
Operating aircraft in fleet may be higher than the minimum covered fleet commitment, particularly in the early years as fleet transition occurs
Jazz is widely recognized for its excellence,both as an employer and operator
● Canada’s Safest Employers 2018● Silver in Transportation cat.● Silver Psychological Safety cat.
● Canada’s Top Employers for Young People 2018 - 2014
● Canada’s Best Diversity Employers 2018 - 2012
● Atlantic Canada’s Top 25 Employers 2018 - 2012
● Nova Scotia’s Top 15 Employers 2018 - 2012
● 2018 Employee Recommended Workplace - The Globe and Mail & Morneau Shepell
2018 2017
47Chorus Aviation Overview
2015
2017 - 2015
● Canada’s Safest Employers 2017 Gold in Transportation cat.
● APEX award for “Excellence in Publication” - Focus on Safety
● Top Airline Reliability Performance Awards
● One of North America’s top five on-time performing regional airlines
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