Chorus Aviation Overview · Effective 2019, the CPA fixed fee compensation reduces from $111.3M...

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


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


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


Appendix 2Supplemental information

6Appendix 1Financial Statements

5

Conclusion4Regional Aircraft Leasing

3

Regional Aviation Services

2Chorus Overview

Contents


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


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


~$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


Gary OsborneIncoming Chief Financial Officer

27 years

Delivering revenue and net earnings growth


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


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


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


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


Our strategic agenda

ContractedFlying

Maintenance, Repair &Overhaul

Aircraft Leasing & Trading

Profit growth synergiesacross our 3 lines of business


Chorus generates value at every stage of an aircraft’s lifecycle

MRO Services

New Customers



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● 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


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


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


● 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


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


Secures highly predictable revenues and earnings for the next 17 years


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


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


● 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


Halifax, NS

North Bay, ON



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● 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


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


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Regional aviation holds strong growth potential worldwide


● 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%)


● 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


● 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


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 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


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


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


● 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




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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


Conclusion

37



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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


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

$ $ $ % $ $ $ %


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


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


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 Aircraft Leasing Total



$ $ $ $ $ $


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


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


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)





$ $ $ $ $ $



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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


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


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


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

Chorus Aviation Overview · Effective 2019, the CPA fixed fee compensation reduces from $111.3M...

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