Canadian Helicopters reports third quarter results

    MONTREAL, Nov. 13 /CNW Telbec/ - Canadian Helicopters Income Fund (TSX:
CHL.UN) ("the Fund"), the largest helicopter transportation services company
operating in Canada, today announced its financial and operating results for
the third quarter and nine-month periods ended September 30, 2008.

    THIRD-QUARTER RESULTS

    Revenue reached $57.3 million, an increase of 2.9%, or $1.6 million, over
revenue of $55.7 million a year ago. Instrument Flight Rules (IFR) revenue
increased by $2.3 million, essentially reflecting the addition of a new
aircraft to service the oil and gas industry. Ancillary revenue including the
CFTS contract grew $1.5 million, while Visual Flight Rules (VFR) revenue
decreased by $2.2 million due to reduced utility and resource work in certain
areas as well as the earlier completion of specific project work. As
revenue-flying hours were down 4.8% to 30,134 hours, revenue growth
essentially mirrors a service mix generating higher hourly rates.
    EBITDA amounted to $20.7 million, down from $22.5 million a year earlier,
a reduction mainly attributable to increased crew costs, including wages,
higher operating lease expenses related to the new IFR aircraft, and greater
selling general and administrative expenses as a result of higher
compensation, including the Fund's long-term incentive plan. Net earnings
before non-controlling interest were $14.5 million, or $1.09 per unit,
compared to $15.6 million, or $1.17 per unit, a year ago.
    During the quarter, cash flows from operating activities before net
changes in non-cash working capital balances reached $16.6 million compared
with $22.4 million a year earlier. The Fund generated distributable cash of
$14.6 million, or $1.10 per unit, compared with of $22.1 million, or $1.67 per
unit, last year. This reduction is explained by the recognition of a
$4.4-million current income tax charge in the third quarter of 2008, a
significant portion of which will be reversed in the fourth quarter, lower net
earnings and higher capital expenditures versus the same period a year ago.
    "Despite headwinds affecting a few market segments, Canadian Helicopters
posted satisfactory operating performance in the third quarter," said
Jean-Pierre Blais, President of Canadian Helicopters Income Fund. "Rising crew
costs and wages remain an industry-wide concern, but firmer pricing in certain
sectors has relieved some of these pressures. Meanwhile, our new sophisticated
IFR helicopter service is increasingly providing the Fund with new market
opportunities."

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    Financial Highlights
     (in thousands of          Quarters ended             Nine months ended
     dollars, except per          Sept. 30,                   Sept. 30,
     unit data)              2008          2007          2008          2007
    -------------------------------------------------------------------------
    Revenue                 57,291        55,686       123,872       119,232
    EBITDA (1)              20,722        22,495        27,505        31,560
    Net earnings before
     non-controlling
     interest               14,502        15,597        19,748        22,922
    Per unit - basic
     and diluted ($)          1.09          1.17          1.49          1.73
    Distributable cash      14,574        22,139        22,517        29,996
    Per unit - basic
     and diluted ($)          1.10          1.67          1.70          2.26
    Weighted-average
     units outstanding
     (basic)            13,280,000    13,280,000    13,280,000    13,280,000
    -------------------------------------------------------------------------
    (1) Earnings before interest, income taxes, depreciation and
        amortization, gain or loss on disposal of property, plant and
        equipment and non-controlling interest

    As of September 30, 2008, the Fund's balance sheet remained healthy with
total debt, net of cash and cash equivalents, of only $5.5 million. A strong
seasonal cash flow enabled Canadian Helicopters to fully repay its operating
credit facility and to reduce the outstanding balance of its term credit
facility by $2.0 million. At the end of the third quarter, the Fund had
considerable financial flexibility with $15.0 million and $32.0 million
available under its operating and term credit facilities, respectively.

    NINE-MONTH RESULTS

    Canadian Helicopters' revenue stood at $123.9 million, an increase of
3.9%, or $4.7 million, over revenue of $119.2 million in the first nine months
of 2007. IFR revenue increased by $4.9 million chiefly as a result of
operating the new aircraft. Ancillary revenue increased by $2.1 million, while
VFR revenue decreased by $2.3 million. Revenue-flying hours were down 5.6% to
65,432 hours in the first nine months of 2008, but pricing was generally
firmer reflecting some stronger regional markets and a slight change in flying
revenue mix toward larger aircraft.
    EBITDA reached $27.5 million compared with $31.6 million last year, while
net earnings before non-controlling interest amounted to $19.7 million, or
$1.49 per unit, versus $22.9 million, or $1.73 per unit, a year earlier. Cash
flows from operating activities before net changes in non-cash working capital
balances amounted to $24.7 million compared with $31.2 million in the first
nine months of 2007. Distributable cash of $22.5 million for the first nine
months of 2008 was down from $30.0 million a year ago.

    AGREEMENT IN PRINCIPLE WITH ORNGE AND REQUEST FOR EXTENSION WITH
    U.S. AIR FORCE

    On September 3, 2008, Canadian Helicopters and Ornge, the provider of
emergency aerial medical transportation to the province of Ontario, announced
they had reached an agreement in principle that would result in the renewal of
their long-standing relationship for a three-year period with the potential of
an additional two years. This agreement in principle is subject to, among
other things, the execution of definitive agreements as well as to various
third party consents and is anticipated to be concluded before year end. The
current contracts with Ornge expire on March 31, 2009.
    Key provisions of the agreement in principle involve the transfer of
aviation related assets, currently owned by the Fund, at fair market value.
Canadian Helicopters will provide services in support of Ornge's transport
medical operation starting April 1, 2009 and will continue to provide flight
operations, maintenance, airworthiness and related support for Ornge's fleet
of helicopters. Terms and pricing will reflect a different risk model, in view
of the transfer of assets from the Fund to Ornge.
    Canadian Helicopters' contracts with the U.S. Air Force (USAF) expired on
September 30, 2008. These contracts can be extended at the sole option of USAF
for a period of up to six months and are typically, if requested, extended in
one-month increments. USAF has requested an extension currently expiring on
November 30, 2008. Following a general request for proposals issued last
summer, Canadian Helicopters submitted a formal proposal to USAF.

    ELECTION OF A NEW CHAIRMAN OF THE BOARD OF TRUSTEES

    At its November 13, 2008 meeting, the Fund's Board of Trustees elected
Randall J. Findlay as Chairman of the Board, replacing the late Jean Guertin.
Mr. Findlay was previously Vice-Chairman of the Board.

    OUTLOOK

    "The global financial and economic climate continues to create
uncertainty in markets highly dependent upon project financing, such as mining
and oil and gas related exploration. Nevertheless, a majority of our services
are essential in nature and therefore less subject to the volatility of the
economy. Our balance sheet is extremely strong which puts us in an enviable
position to proceed with business acquisitions and/or fleet purchases. As we
look forward, we will continue to invest in markets that show strength. In the
fourth quarter, we purchased two additional aircraft to take advantage of a
favourable pricing opportunity and to increase our light twin aircraft
capability for our utility and oil and gas markets," concluded Mr. Blais.

    CONFERENCE CALL

    Canadian Helicopters will hold a conference call to discuss these results
Friday, November 14, 2008 at 11:00 AM (ET). Interested parties can join the
call by dialing 416-644-3414 (local) or 1-800-590-1817 (toll free). If you are
unable to call at this time, you may access a tape recording of the meeting by
calling 416-640-1917 (local) or 1-877-289-8525 (toll free) followed by access
code #212880852. This tape recording will be available until Friday November
21, 2008.

    ABOUT CANADIAN HELICOPTERS INCOME FUND

    Through Canadian Helicopters Limited, Canadian Helicopters Income Fund is
the largest helicopter transportation services company operating in Canada and
one of the largest in the world based on the size of its fleet. From over 40
base locations across Canada, Canadian Helicopters provides helicopter
services to a broad range of sectors, including emergency medical services,
infrastructure maintenance, utilities, oil and gas, forestry, mining and
construction. In addition to helicopter transportation services, Canadian
Helicopters operates three flight schools and provides third party repair and
maintenance services. With over 60 years of experience, Canadian Helicopters
is an industry leader in establishing safety standards and operating
procedures.

    FORWARD-LOOKING STATEMENTS

    This press release contains forward-looking statements relating to the
future performance of the Fund. Forward-looking statements, specifically those
concerning future performance, are subject to certain risks and uncertainties,
and actual results may differ materially. Consequently, readers should not
place any undue reliance on such forward-looking statements. In addition,
these forward-looking statements relate to the date on which they were made.
The Fund disclaims any intention or obligation to update or revise any
forward-looking statement, whether as a result of new information, future
events or otherwise unless being required by applicable laws.
    In particular, the agreement in principle with Ornge referred to above
under "AGEEMENT IN PRINCIPLE WITH ORNGE AND REQUEST FOR EXTENSION WITH U.S.
AIR FORCE" is subject to execution of definitive agreements governing the
terms of such agreement and various third party consents. The parties may fail
to agree on the terms of definitive agreements in which case the contract
renewal could be subject to modification; alternatively, Canadian Helicopters
could even lose such contract to competitors.

    DEFINITION OF NON-GAAP MEASURES: EBITDA, STANDARDIZED DISTRIBUTABLE CASH
    AND DISTRIBUTABLE CASH

    References to "EBITDA" are to earnings (loss) before interest, income
taxes, depreciation and amortization, gain or loss on disposal of property,
plant and equipment and non-controlling interest, as disclosed in the Summary
of Selected Consolidated Financial Information.
    Standardized Distributable Cash is a non-GAAP measure recommended by the
Canadian Institute of Chartered Accountants ("CICA") in order to provide a
consistent and comparable measurement of distributable cash across entities.
Standardized Distributable Cash represents cash flows from operating
activities, less adjustments for net maintenance capital expenditures as
reported in accordance with GAAP.
    Management views Distributable Cash as an operating performance measure,
as it is a measure generally used by Canadian income funds as an indicator of
financial performance. Distributable Cash is defined as Standardized
Distributable Cash plus the net change in non-cash working capital balances.
Distributable Cash is important as it summarizes the funds available for
distribution to Unitholders.
    EBITDA, Standardized Distributable Cash and Distributable Cash are not
earnings measures recognized under GAAP and do not have standardized meanings
prescribed by GAAP. Therefore, EBITDA, Standardized Distributable Cash and
Distributable Cash may not be comparable with similar measures presented by
other entities. Investors are cautioned that EBITDA, Standardized
Distributable Cash and Distributable Cash should not be construed as an
alternative to net earnings (loss) determined in accordance with GAAP as
indicators of the Fund's performance, or to cash flows from operating,
investing and financing activities as measures of liquidity and cash flows.

    Note to readers: Complete consolidated financial statements and
Management's Discussion & Analysis of Operating Results and Financial Position
are available on Canadian Helicopters' website at www.canadianhelicopters.com
and on SEDAR at www.sedar.com .
    %SEDAR: 00022513EF

For further information: Canadian Helicopters Income Fund: Jean-Pierre
Blais, President, (450) 452-3007; Don Wall, Senior Executive Vice-President,
(780) 429-6919