Chorus Aviation Inc. · TSX:CHR
Chorus Aviation — 2019 Value Investing Conference
34 slides from Chorus Aviation's conference presentation, Apr 10, 2019
Slide 1: Presented at the 2019 Value Investing Conference
Presented at the 2019 Value Investing Conference Toronto, ON April 10, 2019 chorus . Delivering regional aviation aviation inc. to the world TSX: CHR
Slide 2: Caution regarding forward-looking information
Caution regarding forward-looking information This presentation contains “forward-looking information” as defined under applicable Canadian securities laws. Forward-looking information is identified by the use of terms and phrases such as “anticipate”, “believe”, “could”, “estimate”, “expect”, “inte
Slide 3: Chorus is a fast-growing global provider of integrated regional aviation solutions
Chorus is a fast-growing global provider of integrated regional aviation solutions Chorus Aviation Overview 3
Slide 4: Regional aviation aircraft types, distances and share of world fleet
Regional aviation is based on aircraft carrying 2 main types of Flying shorter distances than Accounting for ~22% of regional aircraft Narrow Body jets the world’s commercial fleet ie) jc i] 1 i 2 Up to 130 % of all flights below 500 miles Worldwide aircraft fleet Passengers 9 15,800 85% 50% of worl
Slide 5: Investment Highlights
Investment Highlights of regional aviation services to customers 1 Chorus has a to provide a full suite worldwide Chorus is y as an international aircraft lessor and leasing opportunities within its CPA with Air Canada 3 with 90%+ of annual revenues secured through long-term contracts and strong rel
Slide 6: Contents
Contents Ps Chorus Aviation Overview
Slide 7: Chorus Overview - Highlights
Chorus Overview - Highlights Chorus has become a significant player in global regional aviation e $1.45B revenues in 2018 e $343M adjusted EBITDA! in 2018 e 5,200 employees worldwide e $1.1B market capitalization e Led by a very experienced and stable management team e 3 complementary lines of busin
Slide 8: Chorus has become a significant player in global regional aviation
Chorus has become a in global regional aviation 2018 Revenues Consistently profitable since 2006 IPO Aircraft owned 2018 Adjusted EBITDA Employees Trading symbol Aircraft Leased: Monthly 4O outside N-A dividend per 47 inside CPA share (DRIP) Note: Market capitalization value based on 157,284,240 sha
Slide 9: Chorus activities are carried out through business segments
Chorus activities are carried out through 2 business segments: Regional Aviation Services and Regional Aircraft Leasing Chorus Aviation Capital Corp. Regional Aviation Jazz Aviation Aircraft leasing Services LP under CPA x te Jazz Jazz Technical Services Voyageur Voyageur Aviation Corp. Airways Voya
Slide 10: Chorus operates facilities across Canada plus international offices
Chorus operates 15 facilities across Canada plus 3 international offices for its leasing business * Headquarters (2) e@ Admin offices / crew bases (8) | A Line maintenance facilities (4) @ Heavy maintenance facilities (2) Chorus ‘4 Calgary Aviation * Capital Ireland -, Vancouver International office
Slide 11: Our strategic agenda
Our strategic agenda 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 expertise across our lines of busi
Slide 12: What differentiates us from the competition
What differentiates us from the competition MRO Services —— New Customers Se Chorus Aviation Overview 12
Slide 13: Contents
Contents Ps Chorus Aviation Overview 13
Slide 14: Contracted flying generates largest revenue stream
Contracted flying generates !argest revenue stream Air Canada Express flying Specialized contracted flying Charter flights Operates scheduled service through a CPA with Air Canada under the Air Canada Express brand Provides medical, logistical and humanitarian flight operations to blue chip customer
Slide 15: Chorus is Air Canada's regional partner under the Capacity Purchase Agreement
Chorus is Air Canada’s ~74% of Air Canada’s regional seat capacity the CPA Responsibilities under the Capacity Purchase e Manages routes Agreement e Sets flight schedules Purchases capacity e Sets ticket prices Benefits for and opportunities Aircraft operated 116 by Jazz AZ Leased under ~700 daily f
Slide 16: Maintenance Repair & Overhaul (MRO) and Parts
Maintenance Repair & Overhaul (MRO) and Parts e 6-bay, 80 000 sq. ft. facility e 24/7 operations provide flexibility to serve carriers exactly when needed e Certified to perform traditional heavy maintenance activities on Bombardier and Embraer 135/145 regional aircraft e 200 OOO sq. ft. facility e
Slide 17: Contents
Contents Chorus Aviation Overview 17
Slide 18: Regional Aircraft Leasing
Regional Aircraft Leasing Rapidly growing business launched in 2017 e Attractive business with many synergies with Contracted Flying and MRO e Led by industry veterans with strong relationships throughout the industry, including over 100 airlines e Key achievements in 2 years: e C$401M' capital rais
Slide 19: World's 4th largest regional aircraft lessor
Chorus has rapidly become the world’s 4° largest regional aircraft lessor (in portfolio value) Portfolio value (US$ B) GECAS 1,750 1,325 1,200 Falko Chorus DAE ioe) o1 (oe) oO SN oO Elix eal fo) oO TrueNoord wW a oO Avmax CDB Ww Nh oO WN (o) (o) Avation
Slide 20: Contents
Contents Ps Chorus Aviation Overview 20
Slide 21: Chorus has a robust history in Canadian aviation
Chorus has a robust history in Canadian aviation conse en ok . Jazz Air Income Fund Strong business model major regional airlines JAZ.UN:TSX Jazz Air Income Fund MARKET IS. OPEN 00:00:00 coon Chorus Aviation Overview
Slide 22: Navigating through turbulent times
Navigating through turbulent times New entrants New compensation levels Legacy costs and senior workforce One single customer Soaring fuel prices Decreased passenger demand Reduction in Air Canada network capacity Decrease in Jazz flying activity Cost-saving initiatives Staff reductions Federal/prov
Slide 23: Positioning Chorus for growth and diversification
Tn] ee ll Positioning Chorus — growth =\i5° diversification
Slide 24: Contents
Contents Chorus Aviation Overview 24
Slide 25: Chorus' diversification began in early 2015
if e an, rs Chorus’ diversification began in early 2015 : ' Pa 7.
Slide 26: Launched in January 2017
Launched in January 2017 e Established Chorus Aviation Capital to seize opportunities in regional aircraft leasing e Fairfax Financial invested $200 million in Chorus through a private placement of convertible debt units e Chorus Aviation Capital is building a global, regional aircraft leasing platf
Slide 27: Committed fleet of aircraft worth US$860M
Committed fleet of 40 aircraft worth USS 860M q Philippine 0 + Mid Airlines ‘dt 8 eal SSepe iy hiopiari f~ S. America Se Chorus Aviation Overview 27
Slide 28: Building scale as a worldwide aircraft lessor
Building scale as a wor!dwide aircraft lessor C$ 401 M raised since 2017 Net proceeds C$M 2019 Investment Public share Air Canada from Fairfax offering Investment Financial Note: Amounts shown above are expressed in terms of gross xcept for the $401 M, which is net proceeds jutionary statement regar
Slide 29: Amended/extended agreement with Air Canada
Amended/extended agreement... _——(it to 2035 - -_— e Guarantees ~$2.5B in contracted revenue over 17 years e $97.26M equity investment by Air Canada in Chorus e 60% of investment proceeds to purchase nine new CRJ900Os for Air Canada Express fleet will increase leasing revenue e 40% of investment pro
Slide 30: Values are key to continued success
Values are key to continued Guided by three distinct core values e Listening e Collaborating e Improving Diversity e Respect and value the unique and diverse perspectives of all individuals Ethical conduct e Essential to maintain trust and confidence of employees, customers, investors, and all stake
Slide 31: Chorus is poised for growth
Chorus is poised for growth e Regional aircraft e Growth within our e Opportunities to grow leasing is fastest agreement with Air MRO and technical growing line of our Canada services business e Further aircraft leasing e Aircraft parts e Strong growth opportunities in fleet provisioning business po
Slide 32: Contents
Contents Ps Chorus Aviation Overview 32
Slide 33: Conclusion
Conclusion Chorus is 1 led by a very strong team of industry veterans and supported by internal expertise and capabilities in regional aviation services Chorus is committed to y both inside and outside the CPA with a business model based 3 on long-term contracts, less exposed to downturns than main
Slide 34: Thank you
Thank you chorus Delivering regional aviation aviation inc. to the world TSX: CHR