CHC Group Ltd. - FORM 8-K - EX-99.1 - March 12, 2014

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8-K - 8-K - CHC Group Ltd.a8k.htm


CHC GROUP REPORTS FISCAL-2014 Q3 OPERATING RESULTS,
PROVIDES GUIDANCE FOR FULL-YEAR PERFORMANCE
•
IPO Raises $322 Million in Net Proceeds, Primarily Used for Debt Reduction
•
Revenue Increases 3 Percent; Third-Party MRO Sales Up 25 Percent
•
Company Expands Presence in Strategically Key Nigeria

March 12, 2014 - Vancouver, British Columbia, Canada - CHC Group Ltd. (NYSE: HELI), the parent company of CHC Helicopter, today reported its financial performance for the fiscal-2014 third quarter, which ended Jan. 31.

Revenue for the quarter was $454 million, up 3 percent. (Unless otherwise noted, all comparisons are year-over-year.) The company had a quarterly net loss of $60 million, compared to a net loss of $59 million in the same quarter last year. Through the first three quarters of the fiscal year, CHC reported revenue of $1.31 billion, up less than 1 percent, and a net loss of $149 million, compared to a net loss of $85 million a year ago.

CHC’s third-quarter adjusted EBITDAR (earnings before interest, taxes, depreciation, amortization and aircraft rental costs, excluding special items) was $119 million, down 1 percent. CHC had a quarterly adjusted net loss of $25 million, compared with a loss of $46 million in the year-ago quarter.

(Periods ending Jan. 31; U.S.$, in millions, except margin, shares, EPS data)
Quarter
Year-to-date
FY13
FY14
% Change
FY13
FY14
% Change
As reported:
 
 
 
 
Revenue
$
442

$
454

3
 %
$
1,305

$
1,312

1
 %
Operating revenue1
400

412

3
 %
1,180

1,188

1
 %
Operating income
23

6

-74
 %
71

16

-77
 %
Net income (loss)
(63
)
(58
)
8
 %
(88
)
(145
)
-65
 %
Controlling interest
(59
)
(60
)
-2
 %
(85
)
(149
)
-75
 %
Non-controlling interest
(4
)
2

150
 %
(3
)
5

266
 %
Net income (loss) per ordinary share2
$
(1.26
)
$
(1.16
)
8
 %
$
(1.82
)
$
(3.10
)
-70
 %
Weighted average number of ordinary stock outstanding - basic and diluted
46,519,484

51,573,832

11
 %
46,519,484

48,204,267

4
 %
Adjusted3:
 
 


 
 
 
EBITDAR excluding special items4
120

119

-1
 %
347

339

-2
 %
Margin5
30
%
29
%
-130 bps

29
%
29
%
-90 bps

Net loss
(46
)
(25
)
46
 %
(51
)
(83
)
-63
 %
Net loss per ordinary share6
$
(0.59
)
$
(0.32
)
46
 %
$
(0.66
)
$
(1.07
)
-62
 %
Share count7
77,519,484

77,519,484

—

77,519,484

77,519,484

—

1.
Operating revenue is total revenue less reimbursable revenue which is costs reimbursed from customers.
2.
Net income (loss) per ordinary share is calculated by net income (loss) attributable to controlling interest divided by weighted average number of ordinary stock outstanding - basic and diluted.
3.
See a description of non-GAAP calculations and reconciliation to comparable GAAP measures on Pages 9 and 10.
4.
For the third quarter of fiscal 2014, the impact of items related to the IPO was excluded from adjusted EBITDAR. See a description of non-GAAP calculations and reconciliation to comparable GAAP measures on Pages 9 and 10.
5.
Adjusted EBITDAR margin is calculated as a percentage of operating revenue.
6.
Net loss per share is calculated by dividing adjusted net loss by adjusted share count.
7.
Adjusted Share Count is the number of ordinary shares outstanding at Jan. 31, 2014.


1


William Amelio, CHC president and chief executive officer:
“Long-term trends for oil-and-gas investments in deep and ultra-deep discovery and production - where the need for our services is greatest - remain robust. We are pursuing our financial priorities by focusing on disciplined capital allocation, reduced leverage and positive free cash flow - with safety leadership in the air and on the ground.”

Joan Hooper, CHC chief financial officer:
“The changes we are making to CHC are further enhancing safety, service and efficiency. We are applying the same resolve to financial discipline as we do to operating standards. Our financial priorities - profitable growth, expanding adjusted EBITDAR margins and strengthening the balance sheet - are guiding all of our decisions and actions.”

FINANCIAL PRIORITIES
Growth:
•
A 1-percent increase in overall revenue from flying services was attributable to growth in CHC’s business in the Western North Sea region. Third-party sales by Heli-One - which provides helicopter maintenance, repair and overhaul services (MRO) - were up 25 percent.

Adjusted EBITDAR:
•
CHC’s consolidated Q3 adjusted EBITDAR margin, excluding special items, was 29 percent.
•
EBITDAR for Helicopter Services, CHC’s oil-and-gas and search-and-rescue flying business, declined 3 percent to $118 million, driven in part by costs associated with returning Airbus EC225 aircraft to service, as well as expenses to initiate new operations in Nigeria, a key growth area for CHC.
•
Heli-One’s EBITDAR declined 11 percent to $16 million, mostly as a result of the timing of helicopter maintenance projects, increased maintenance expenses for EC225 aircraft as they returned to service, and costs to improve the efficiency of the company’s supply chain.

Balance Sheet:
•
Proceeds from CHC Group’s initial public offering of its ordinary shares were $322 million (net of underwriting fees). This is composed of $294 million from the base offering in January, and $28 million from the underwriters’ February exercise of an over-allotment option to purchase additional ordinary shares.
•
Those net proceeds, along with existing cash, were used in January to pay down all of CHC Helicopter’s outstanding revolver balance of $225 million, and in February to redeem $130 million of senior secured notes. Liquidity at the end of the quarter was $775 million.






2


BUSINESS HIGHLIGHTS
Helicopter Services (flying):
•
Third-quarter contract wins from oil-and-gas customers illustrated the leading global reach of CHC’s flying operations. The agreements were for services in places as wide-ranging as Azerbaijan, Australia, Brazil, Kenya, Malaysia, Mozambique and Norway.
•
CHC’s retention rate of existing contracts continues to exceed 90 percent.
•
The company’s return to strategically important Nigeria took a significant step forward in February when Atlantic Aviation, CHC’s joint-venture partner, initiated regular commercial flights for Shell.

Heli-One (MRO):
•
New contracts recorded during the quarter included agreements with Lufttransport (Norway) to upgrade and modify Airbus (formerly Eurocopter) AS332L1 aircraft for all-weather search-and-rescue services, and with Erickson Helicopters (United States) to maintain specific Airbus and Sikorsky aircraft.
•
In February, the U.K. Ministry of Defence’s Military Aviation Authority certified Heli-One to provide maintenance support services for the agency’s Makila 1A1 engines.

Full-Year Fiscal-2014 Guidance
The company anticipates revenue to be flat to slightly up from fiscal 2013, and adjusted EBITDAR to be flat to slightly down, reflecting the negative effect of the suspension and subsequent return to service of EC225 aircraft. Interest expense is expected to be $150 to $160 million, tax expense to be $25 to $35 million, and adjusted share count to be 78 million shares. Capital expenditures are anticipated to be $140 to $190 million, and depreciation and amortization to be $135 to $145 million.

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



#####





3



Cautionary Note on Forward-Looking Statements:
This press release contains forward-looking statements and information within the meaning of certain securities laws, including the “safe harbor” provision of the United States Private Securities Litigation Reform Act of 1995 and any applicable Canadian securities legislation. All statements, other than statements of historical fact included in this press release, regarding our strategy, future operations, projections, conclusions, forecasts and other statements are “forward-looking statements”. While these forward-looking statements represent our best current judgment, the actual results could differ materially from the conclusions, forecasts or projections contained in the forward-looking statements. Certain material factors or assumptions were applied in drawing a conclusion or making a forecast or projection in the forward-looking information contained herein. Such factors include, but are not limited to, the following: competition in the markets we serve, long-term support contracts, failure to maintain standards of acceptable safety performance, political, economic, and regulatory uncertainty, problems with our non-wholly owned entities, including potential conflicts with the other owners of such entities, exposure to credit risks, inability to fund our working capital requirement, risks inherent in the operation of helicopters, unanticipated costs or cost increases associated with our business operations, exchange rate fluctuations, trade industry exposure, inflation, inability to maintain government issued licenses, inability to obtain necessary aircraft or insurance, loss of key personnel, work stoppages due to labor disputes, and future material acquisitions or dispositions. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual outcomes may vary materially from those indicated. The Company disclaims any intentions or obligations to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Please refer to our annual report on Form 10-K, our quarterly reports on Form 10-Q, and our other filings, in particular any discussion of risk factors or forward-looking statements, which are filed with the SEC and available free of charge at the SEC’s website (www.sec.gov), for a full discussion of the risks and other factors that may impact any estimates or forward-looking statements made herein.


Contact Information
INVESTORS
Lynn Antipas Tyson
Vice President, Investor Relations
+1.914.485.1150
lynn.tyson@chc.ca

MEDIA
T.R. Reid
Vice President, Global Communications
+1.512.869.9094
t.r.reid@chc.ca



4


Consolidated Statements of Operations
(Expressed in thousands of United States dollars)
(Unaudited)
 
Three months ended
 
Nine months ended
 
January 31, 2013
 
January 31, 2014
 
January 31, 2013
 
January 31, 2014
Operating revenue
$
399,974

 
$
412,041

 
$
1,179,764

 
$
1,188,317

Reimbursable revenue
41,865

 
41,853

 
124,930

 
123,880

Revenue
441,839

 
453,894

 
1,304,694

 
1,312,197

Operating expenses:
 
 
 
 
 
 
 
Direct costs
(355,645
)
 
(378,013
)
 
(1,053,129
)
 
(1,092,913
)
Earnings from equity accounted investees
850

 
2,072

 
2,687

 
5,990

General and administration costs
(18,729
)
 
(39,182
)
 
(56,299
)
 
(77,839
)
Depreciation
(28,701
)
 
(35,407
)
 
(84,646
)
 
(106,158
)
Restructuring costs
(4,890
)
 
—

 
(8,617
)
 
—

Asset impairments
(7,813
)
 
58

 
(24,218
)
 
(22,956
)
Gain (loss) on disposal of assets
(4,402
)
 
2,478

 
(9,019
)
 
(1,943
)
 
(419,330
)
 
(447,994
)
 
(1,233,241
)
 
(1,295,819
)
Operating income
22,509

 
5,900

 
71,453

 
16,378

Interest on long-term debt
(33,991
)
 
(39,782
)
 
(93,949
)
 
(117,636
)
Foreign exchange gain (loss)
3,731

 
(11,573
)
 
6,982

 
(24,476
)
Other financing charges
(10,852
)
 
(5,730
)
 
(22,435
)
 
(1,615
)
Loss from continuing operations before income tax
(18,603
)
 
(51,185
)
 
(37,949
)
 
(127,349
)
Income tax expense
(44,303
)
 
(6,689
)
 
(50,606
)
 
(17,489
)
Loss from continuing operations
(62,906
)
 
(57,874
)
 
(88,555
)
 
(144,838
)
Earnings from discontinued operations, net of tax
212

 
—

 
1,024

 
—

Net loss
$
(62,694
)
 
$
(57,874
)
 
$
(87,531
)
 
$
(144,838
)
Net earnings (loss) attributable to:
 
 
 
 
 
 
 
Controlling interest
$
(58,421
)
 
$
(60,003
)
 
$
(84,606
)
 
$
(149,324
)
Non-controlling interest
(4,273
)
 
2,129

 
(2,925
)
 
4,486

Net loss
$
(62,694
)
 
$
(57,874
)
 
$
(87,531
)
 
$
(144,838
)
 
 
 
 
 
 
 
 
Net loss per ordinary share attributable to controlling interest - basic and diluted:
 
 
 
 
 
 
 
Continuing operations
$
(1.26
)
 
$
(1.16
)
 
$
(1.84
)
 
$
(3.10
)
Discontinued operations
$
—

 
$
—

 
$
0.02

 
$
—

Net loss per ordinary share(1)
$
(1.26
)
 
$
(1.16
)
 
$
(1.82
)
 
$
(3.10
)
Weighted average number of shares outstanding - basic and diluted:
46,519,484

 
51,573,832

 
46,519,484

 
48,204,267


(1) Net loss per ordinary share is calculated by net loss attributable to controlling interest divided by weighted average number of ordinary stock outstanding - basic and diluted.


5


Consolidated Balance Sheets
(Expressed in thousands of United States dollars)
(Unaudited)
 
April 30, 2013
 
January 31, 2014
Assets
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
123,801

 
$
417,145

Receivables, net of allowance for doubtful accounts of $4.3 million and $2.6 million, respectively
317,302

 
267,461

Income taxes receivable
25,871

 
25,003

Deferred income tax assets
49

 
79

Inventories
105,794

 
124,564

Prepaid expenses
22,219

 
28,502

Other assets
56,083

 
49,571

 
651,119

 
912,325

Property and equipment, net
1,075,254

 
1,039,212

Investments
26,896

 
30,817

Intangible assets
197,810

 
179,746

Goodwill
430,462

 
424,502

Restricted cash
29,639

 
22,689

Other assets
439,789

 
547,150

Deferred income tax assets
10,752

 
10,782

Assets held for sale
32,047

 
32,637

 
$
2,893,768

 
$
3,199,860

Liabilities and Shareholders' Equity
 
 
 
Current liabilities:
 
 
 
Payables and accruals
$
420,406

 
$
375,648

Deferred revenue
27,652

 
31,855

Income taxes payable
48,073

 
45,627

Deferred income tax liabilities
618

 
522

Current facility secured by accounts receivable
53,512

 
46,876

Other liabilities
47,791

 
29,300

Current portion of long-term debt obligations
2,138

 
132,792

 
600,190

 
662,620

Long-term debt obligations
1,475,087

 
1,545,761

Deferred revenue
55,990

 
79,835

Other liabilities
246,455

 
279,939

Deferred income tax liabilities
10,627

 
10,168

Total liabilities
2,388,349

 
2,578,323

Redeemable non-controlling interest
(8,262
)
 
(5,612
)
Capital stock: Par value $0.0001:
 
 
 
Authorized: 2,000,000,000
 
 
 
Issued: 46,519,484 and 77,519,484
5

 
8

Contributed surplus
1,696,066

 
2,007,445

Deficit
(1,092,555
)
 
(1,241,879
)
Accumulated other comprehensive loss
(89,835
)
 
(138,425
)
 
513,681

 
627,149

 
$
2,893,768

 
$
3,199,860



6


Consolidated Statements of Cash Flows
(Expressed in thousands of United States dollars)
(Unaudited)
 
Nine months ended
 
January 31, 2013
 
January 31, 2014
Cash provided by (used in):
 
 
 
Operating activities:
 
 
 
Net loss
$
(87,531
)
 
$
(144,838
)
Earnings from discontinued operations, net of tax
1,024

 
—

Loss from continuing operations
(88,555
)
 
(144,838
)
Adjustments to reconcile net loss to cash flows provided by (used in) operating activities:
 
 
 
Depreciation
84,646

 
106,158

Loss on disposal of assets
9,019

 
1,943

Asset impairments
24,218

 
22,956

Earnings from equity accounted investees
(2,687
)
 
(5,990
)
Deferred income taxes
22,944

 
(378
)
Non-cash stock-based compensation expense
334

 
23,148

Amortization of unfavorable contract credits
(2,842
)
 
—

Amortization of lease related fixed interest rate obligations
(2,136
)
 
(1,135
)
Amortization of long-term debt and lease deferred financing costs
7,511

 
10,246

Non-cash accrued interest income on funded residual value guarantees
(5,329
)
 
(4,800
)
Mark to market loss (gain) on derivative instruments
6,884

 
(8,231
)
Non-cash defined benefit pension expense
5,277

 
344

Defined benefit contributions and benefits paid
(34,215
)
 
(35,559
)
Increase to deferred lease financing costs
(2,751
)
 
(4,228
)
Unrealized loss (gain) on foreign currency exchange translation
(8,780
)
 
24,843

Other
6,480

 
4,029

Increase (decrease) in cash resulting from changes in operating assets and liabilities
(46,306
)
 
29,977

Cash provided by (used in) operating activities
(26,288
)
 
18,485

Financing activities:
 
 
 
Sold interest in accounts receivable, net of collections
(6,021
)
 
(5,173
)
Proceeds from issuance of capital stock
—

 
291,313

Proceeds from issuance of senior secured notes
202,000

 
—

Proceeds from issuance of senior unsecured notes
—

 
300,000

Long-term debt proceeds
812,449

 
760,000

Long-term debt repayments
(817,594
)
 
(888,656
)
Increase in deferred financing costs
(3,793
)
 
(14,034
)
Related party loans
—

 
(25,148
)
Cash provided by financing activities
187,041

 
418,302

Investing activities:
 
 
 
Property and equipment additions
(318,558
)
 
(474,158
)
Proceeds from disposal of property and equipment
207,896

 
444,570

Aircraft deposits net of lease inception refunds
(49,517
)
 
(102,388
)
Restricted cash
2,407

 
8,184

Distribution from equity investments
745

 
2,306

Cash used in investing activities
(157,027
)
 
(121,486
)
Cash provided by continuing operations
3,726

 
315,301

Cash flows provided by (used in) discontinued operations:
 
 
 
Cash flows provided by operating activities
1,024

 
—

Cash flows used in financing activities
(1,024
)
 
—

Cash provided by (used in) discontinued operations
—

 
—

Effect of exchange rate changes on cash and cash equivalents
42

 
(21,957
)
Change in cash and cash equivalents during the period
3,768

 
293,344

Cash and cash equivalents, beginning of period
55,639

 
123,801

Cash and cash equivalents, end of period
$
59,407

 
$
417,145




7


Segment Performance
(Expressed in thousands of United States dollars)
(Unaudited)
Segment Third-party Revenue
 
Three months ended
 
Nine months ended
 
January 31, 2013
 
January 31, 2014
 
January 31, 2013
 
January 31, 2014
Helicopter Services operating revenue
$
370,505

 
$
375,343

 
$
1,083,261

 
$
1,088,681

Reimbursable revenue
41,865

 
41,853

 
124,930

 
123,880

Helicopter Services total external revenue
412,370

 
417,196

 
1,208,191

 
1,212,561

Heli-One external revenue
29,469

 
36,698

 
96,503

 
99,636

Consolidated external revenue
$
441,839

 
$
453,894

 
$
1,304,694

 
$
1,312,197


EBITDAR Summary
 
Three months ended
 
Nine months ended
 
January 31, 2013
 
January 31, 2014
 
January 31, 2013
 
January 31, 2014
Helicopter Services
$
121,414

 
$
117,709

 
$
344,103

 
$
359,276

Heli-One
18,397

 
16,459

 
61,311

 
34,046

Corporate
(18,729
)
 
(39,182
)
 
(56,299
)
 
(77,839
)
Eliminations
(604
)
 
1

 
(1,772
)
 
(1,387
)
Adjusted EBITDAR(1)
$
120,478

 
$
94,987

 
$
347,343

 
$
314,096


(1) See a description of non-GAAP calculations and reconciliation to comparable GAAP measures below.


8


Non-GAAP Financial Measures:

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


9


EBITDAR - Non-GAAP Reconciliation
(Expressed in thousands of United States dollars)
(Unaudited)

 
Three months ended
 
Nine months ended
 
January 31, 2013
 
January 31, 2014
 
January 31, 2013
 
January 31, 2014
Helicopter Services
$
121,414

 
$
117,709

 
$
344,103

 
$
359,276

Heli-One
18,397

 
16,459

 
61,311

 
34,046

Corporate
(18,729
)
 
(39,182
)
 
(56,299
)
 
(77,839
)
Eliminations
(604
)
 
1

 
(1,772
)
 
(1,387
)
Adjusted EBITDAR
120,478

 
94,987

 
347,343

 
314,096

Aircraft lease costs & related costs
(52,163
)
 
(56,216
)
 
(149,390
)
 
(166,661
)
Depreciation
(28,701
)
 
(35,407
)
 
(84,646
)
 
(106,158
)
Restructuring
(4,890
)
 
—

 
(8,617
)
 
—

Asset impairments
(7,813
)
 
58

 
(24,218
)
 
(22,956
)
Gain (loss) on disposal of assets & investments
(4,402
)
 
2,478

 
(9,019
)
 
(1,943
)
Operating income
22,509

 
5,900

 
71,453

 
16,378

Interest on long-term debt
(33,991
)
 
(39,782
)
 
(93,949
)
 
(117,636
)
Foreign exchange gain (loss)
3,731

 
(11,573
)
 
6,982

 
(24,476
)
Other financing charges
(10,852
)
 
(5,730
)
 
(22,435
)
 
(1,615
)
Loss from continuing operations before income tax
(18,603
)
 
(51,185
)
 
(37,949
)
 
(127,349
)
Income tax expense
(44,303
)
 
(6,689
)
 
(50,606
)
 
(17,489
)
Loss from continuing operations
(62,906
)
 
(57,874
)
 
(88,555
)
 
(144,838
)
Earnings from discontinued operations, net of tax
212

 
—

 
1,024

 
—

Net loss
$
(62,694
)
 
$
(57,874
)
 
$
(87,531
)
 
$
(144,838
)



10


EBITDAR excluding special items - Non-GAAP Reconciliation
(Expressed in thousands of United States dollars)
(Unaudited)
 
Three months ended
 
Nine months ended
 
January 31, 2013
 
January 31, 2014
 
January 31, 2013
 
January 31, 2014
Adjusted EBITDAR
$
120,478

 
$
94,987

 
$
347,343

 
$
314,096

Stock-based compensation1
—

 
22,518

 
—

 
22,518

Expenses related to the initial public offering2
—

 
1,251

 
—

 
2,563

Adjusted EBITDAR excluding special items
$
120,478

 
$
118,756

 
$
347,343

 
$
339,177


Adjusted net earnings (loss) - Non-GAAP Reconciliation
(Expressed in thousands of United States dollars)
(Unaudited)
 
Three months ended
 
Nine months ended
 
January 31, 2013
 
January 31, 2014
 
January 31, 2013
 
January 31, 2014
Net loss attributable to controlling interest
$
(58,421
)
 
$
(60,003
)
 
$
(84,606
)
 
$
(149,324
)
Stock-based compensation1
—

 
22,518

 
—

 
22,518

Expenses related to the initial public offering2
—

 
1,251

 
—

 
2,563

Asset impairments
7,813

 
(58
)
 
24,218

 
22,956

Loss (gain) on disposal of assets
4,402

 
(2,478
)
 
9,019

 
1,943

Foreign exchange loss (gain)
(3,731
)
 
11,573

 
(6,982
)
 
24,476

Unrealized loss (gain) on derivatives
3,920

 
2,109

 
6,884

 
(8,231
)
Adjusted net loss
$
(46,017
)
 
$
(25,088
)
 
$
(51,467
)
 
$
(83,099
)

(1) Stock-based compensation relates to the expense of prior equity plans triggered by the initial public offering.
(2) Expenses related to the initial public offering, including costs related to restructuring our compensation plan.


11


Reconciliation of Adjusted EBITDAR excluding special items to Adjusted Net Loss
(Expressed in thousands of United States dollars, except share and per share amounts)
(Unaudited)
 
Three months ended
 
Nine months ended
 
January 31, 2013
 
January 31, 2014
 
January 31, 2013
 
January 31, 2014
Adjusted EBITDAR excluding special items
$
120,478

 
$
118,756

 
$
347,343

 
$
339,177

Aircraft lease costs and related costs
(52,163
)
 
(56,216
)
 
(149,390
)
 
(166,661
)
Depreciation
(28,701
)
 
(35,407
)
 
(84,646
)
 
(106,158
)
Restructuring
(4,890
)
 
—

 
(8,617
)
 
—

Unrealized loss (gain) on derivatives
3,920

 
2,109

 
6,884

 
(8,231
)
Interest on long-term debt
(33,991
)
 
(39,782
)
 
(93,949
)
 
(117,636
)
Other financing charges
(10,852
)
 
(5,730
)
 
(22,435
)
 
(1,615
)
Income tax expense
(44,303
)
 
(6,689
)
 
(50,606
)
 
(17,489
)
Earnings from discontinued operations, net of tax
212

 
—

 
1,024

 
—

Loss (earnings) attributable to non-controlling interest
4,273

 
(2,129
)
 
2,925

 
(4,486
)
Adjusted net loss
$
(46,017
)
 
$
(25,088
)
 
$
(51,467
)
 
$
(83,099
)
Share count at January 31, 2014
77,519,484

 
77,519,484

 
77,519,484

 
77,519,484



12

CHC Group Ltd. Reports