Slide 1: Chorus Aviation Investor Presentation April 2016
Joe Randell President and Chief Executive Officer Jolene Mahody Executive Vice President and Chief Financial Officer Nathalie Megann Vice President, Investor Relations and Corporate Affairs April 2016
Slide 2: Disclaimer
Disclaimer CAUTION REGARDING FORWARD-LOOKING INFORMATION Certain information in this presentation, and statements made during this presentation may be forward-looking. These forward- looking statements are identified by the use of terms and phrases such as “anticipate”, “believe”, “could”, “estimate
Slide 3: Corporate profile
Corporate profile Market summary Ticker symbols TSX: CHR.B, CHR.A Shares outstanding(1) 122.2 million Market capitalization(2) ~$800 million Monthly dividend / $0.04 per share / ~7.3% Dividend yield (3) (1) Outstanding Chorus shares as of March 31 2016 was 122,232,397. (2) Calculated using closing p
Slide 4: Canada's largest regional airline
Chorus Aviation Inc. Canada’s largest regional airline Why invest in Chorus Aviation? Jazz Aviation operations Voyageur Aviation Corp. Focus areas and growth opportunities 4
Slide 5: Why invest in Chorus
Why invest in Chorus Long-term Capacity Purchase Agreement (CPA) limits exposure to many variable costs and provides flexibility to grow and diversify. Cash flows generated from CPA are expected to support annual dividend of $0.48 per share until 2025 – over $830 million paid in dividends since
Slide 6: Financial performance indicators
Financial performance indicators Revenue Adjusted EBITDA(1) In C$ millions In C$ millions FY Ending December 31 FY Ending December 31 $1,711 $204 $209 $1,664 $1,672 $1,666 $184 $187 $1,545 $146 FY2011A FY2012A FY2013A FY2014A FY2015A FY2011A FY2012A FY2013A FY2014A FY2015A Operating Income Adjusted
Slide 7: Fourth quarter 2015 financial results
Fourth quarter 2015 financial results Chorus Aviation Inc. 2015 Period ended December 31, 2015 ($ million) Operating Revenue 357.4 Adjusted EBITDA (1) 64.1 Operating Income 46.5 Adjusted Net Income (1) 32.1 Adjusted EPS (basic) (1) 0.26 (1) Non-GAAP measure 7
Slide 8: Canada's largest regional airline
Chorus Aviation Inc. Canada’s largest regional airline Why invest in Chorus Aviation? Jazz Aviation operations Voyageur Aviation Corp. Focus areas and growth opportunities 8
Slide 9: Jazz – Canada's regional airline
Jazz – Canada’s regional airline 9
Slide 10: Air Canada Express
Air Canada Express Jazz flies for Air Canada as Air Canada Express – Operates ~ 73% of Air Canada’s regional capacity 11-Year Capacity Purchase Agreement (CPA) Three types of missions for Air Canada: – Smaller markets with lesser demand – High density markets at off-peak times – Point-to-point
Slide 11: Fleet simplification and modernization
Fleet simplification and modernization The Chorus fleet will transition to more efficient, larger aircraft with significant fleet simplification Jazz will transition to a mix of larger, newer technology regional jets (CRJ705s) and turboprops (Q400s) Aircraft 2015 2016 2017 2018 2019 2020 2021 2022
Slide 12: New CPA: benefits to Chorus
New CPA: benefits to Chorus Unlocking the value in the fleet New Q400s: Dash 8 Classics: Existing Q400s: Leveraging Chorus Balance Unlocking Value Solidifying Value Sheet to Enhance Value Reduction of 19 Dash 8- Enable return for Chorus Minimum addition of 13 new 100s prior to 2020 enables inv
Slide 13: Chorus compensation under the CPA
Chorus compensation under the CPA Fixed Performance Aircraft Fees Incentives Leasing Fixed margin per covered Achieving established Chorus-owned Q400 aircraft aircraft targets: leased into Jazz’s Air – Controllable on-time Canada Express operation Fixed infrastructure fee per performance cov
Slide 14: Compensation under the CPA
Compensation under the CPA (unaudited) For the For the twelve calendar year Average for Average for months ended ended calendar years calendar years December 31, December 31, 2016-2020 2021-2025 2015 (expressed in millions of Canadian dollars) 2014 CPA Fixed Fee Compensation(1) 112.0 109.7 111.3 64.
Slide 15: Cost management under the CPA
Cost management under the CPA Controllable costs General overhead, non-crew labour costs Depreciation and amortization on aircraft and parts Type of costs Aircraft maintenance Materials and supplies Set annually, based on projected annual block hours, flying hours, cycles, passengers carri
Slide 16: Cost management under the CPA
Cost management under the CPA Pass-through costs Incurred by Chorus under the CPA Pass-through costs Passed through to Air Canada and fully reimbursed Airport fees Type of costs Navigation fees Terminal handling fees Services provided by Air Canada at no cost to Chorus include: Exclusion
Slide 17: Industry-leading collective agreements
Industry-leading collective agreements Pilots – Agreement expires December 31, 2025 – Greater flexibility with cost competitive structure – Flow of pilots to Air Canada – DB pension replaced by DC pension (new hires) – No strike or lockout Flight Attendants, Maintenance and Dispatchers – Agreeme
Slide 18: Value drivers from an amended CPA
Value drivers from an amended CPA Predictable baseline compensation levels to support dividend Strengthened relationship with Air Canada Increased market competitiveness Secured long-term labour agreements Reduced reliance on fixed fees per covered aircraft Solid foundation from which to grow and di
Slide 19: Jazz beyond 2025
Jazz beyond 2025 Long-term cost competitive product Industry-leading Improved safety and labour cost operational competitiveness performance Geographic Renewed airports relationship with infrastructure Air Canada Flexibility with Minimum of 96 size and scope efficient of Jazz regional aircraft opera
Slide 20: Canada's largest regional airline
Chorus Aviation Inc. Canada’s largest regional airline Why invest in Chorus Aviation? Jazz Aviation operations Voyageur Aviation Corp. Focus areas and growth opportunities 20
Slide 21: Voyageur Aviation Corp.
Voyageur Aviation Corp. A logical extension of our business Transport Canada approved air operator and MRO Specialized aviation services – Contract flying – Advanced maintenance and engineering International reach Founded nearly 50 years ago Headquartered in North Bay, ON Share several c
Slide 22: Voyageur business segments: Contract flying operations
Voyageur business segments: Voyageur Airways - Contract flying operations ~70% of revenues derived from contract flying operations Medical, logistical and humanitarian flight operations serving blue chip clients Transport Canada approved air operator and maintenance organization Fixed-base o
Slide 23: Voyageur Airways - 19 aircraft
Voyageur business segments: Voyageur Airways - Contract flying operations - 19 aircraft Aircraft Number Aircraft Type Passenger 7 charter Bombardier CRJ 200LR Passenger 6 charter Bombardier Dash 8 300 Passenger 2 charter Bombardier Dash 8 100 Passenger 2 charter De Havilland Dash 7 1 100 Air ambulan
Slide 24: Voyageur Aerotech - Specialty maintenance and engineering
Voyageur business segments: Voyageur Aerotech - Specialty maintenance and engineering Maintenance, repair and overhaul (MRO) services for customers worldwide Specialized on all models of Bombardier regional aircraft – Transport Canada, FAA and European Aviation Safety Agency approved – Design Ap
Slide 25: Canada's largest regional airline
Chorus Aviation Inc. Canada’s largest regional airline Why invest in Chorus Aviation? Jazz Aviation operations Voyageur Aviation Corp. Focus areas and growth opportunities 25
Slide 26: Focus areas and growth opportunities
Focus areas and growth opportunities Other opportunities Aircraft leasing and Engineering trading and MRO services Flying operation 26
Slide 27: Thank you
Thank you Nathalie Megann Vice President, Investor Relations and Corporate Affairs nmegann@chorusaviation.ca (902) 873-5094 27
Slide 28: Balance Sheet – Year-End 2015
Balance Sheet – Year-End 2015 28
Slide 29: Balance Sheet – Year-End 2015 (cont'd)
Balance Sheet – Year-End 2015 (cont’d) 29
Slide 30: Voyageur transaction and acquisition highlights
Voyageur transaction and acquisition highlights Chorus acquired all of the issued and outstanding shares of 519222 Ontario Limited, the holding company that owned Voyageur Airways Overview (‘Voyageur’) and its related companies from Max Shapiro. Transaction closed May 1, 2015. Purchase price r
Slide 31: Value proposition summary
Value proposition summary Creates a new growth platform for Chorus Logical extension of the Chorus contract flying business model and is a cultural fit. Specialty contract flying services growth potential internationally and domestically diversifies risk profile providing higher profitability ma