Form 10-K

Large accelerated filer

Accelerated filer

Non-accelerated filer

x (Do not check if a smaller reporting company)

Smaller reporting company

10-K 1 d375764d10k.htm FORM 10-K Form 10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-K

x	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED APRIL 30, 2012

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 333-179072

CHC Helicopter S.A.

(Exact Name of Registrant as Specified in Its Charter)

Luxembourg

N/A

(State or Other Jurisdiction of

Incorporation or Organization)

(I.R.S. Employer

Identification No.)

4740 Agar Drive

Richmond, BC V7B 1A3, Canada

(Address of Principal Executive Offices, Zip code)

(604) 276-7500

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: None.

Securities registered pursuant to Section 12(g) of the Act: None.

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No x

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨ No x

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ¨ No x

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2). Yes ¨ No x

The aggregate market value of the voting and non-voting common equity held by non-affiliates as of the last business day of the registrant’s most recently completed second fiscal quarter was $0, as there was no public market for the registrant’s common stock as of October 31, 2011. As of June 30, 2012, there were 1,870,561,417 Class A Shares, 8,512,986 Class B Shares, 318,000 Special Shares and one Class C Share of stock outstanding.

DOCUMENT INCORPORATED BY REFERENCE.

None.

CHC HELICOPTER S.A.

ANNUAL REPORT ON FORM 10-K

FOR THE FISCAL YEAR ENDED

April 30, 2012

TABLE OF CONTENTS


		Page Number

	PART I

	Cautionary Note Regarding Forward-Looking Statements and Other Industry and Market Data		ii

Item 1.	Business		1

Item 1A.	Risk factors		10

Item 1B.	Unresolved staff comments		19

Item 2.	Properties		19

Item 3.	Legal proceedings		19

Item 4.	Mine Safety Disclosures		20

	PART II

Item 5.	Market for registrant’s common equity, related stockholder matters and issuer purchases of equity securities		20

Item 6.	Selected financial data		21

Item 7.	Management’s discussion and analysis of financial condition and results of operations		24

Item 7A.	Quantitative and qualitative disclosures about market risk		46

Item 8.	Financial statements and supplementary data		47

Item 9.	Changes in and disagreements with accountants on accounting and financial disclosure		48

Item 9A.	Controls and procedures		48

Item 9B.	Other information		48

	PART III

Item 10.	Directors, executive officers and corporate governance		48

Item 11.	Executive compensation		52

Item 12.	Security ownership of certain beneficial owners and management and related stockholder matters		73

Item 13.	Certain relationships and related transactions, and director independence		75

Item 14.	Principal accounting fees and services		76

	PART IV

Item 15.	Exhibits and financial statement schedules		77

	SIGNATURES

	Signatures		78

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS AND OTHER INDUSTRY AND

MARKET DATA

This Annual Report on Form 10-K and the documents incorporated herein by reference contain forward-looking statements, within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended, about our future expectations, plans or prospects and our business. All statements contained in this Annual Report on Form 10-K, other than statements of historical fact, regarding our strategy, future operations, financial position, estimated revenues and losses, projected costs, prospects, plans and objectives of management, are forward-looking statements. When used in this Annual Report on Form 10-K, the words “could,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “project” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. Although these forward-looking statements are based on our current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events, actual results may differ materially from those stated in or implied by these forward-looking statements. Such factors include, but are not limited to, the following:

•

Competition in the markets we serve;

•

loss of any of our large, long-term support contracts;

•

failure to maintain standards of acceptable safety performance;

•

political, economic and regulatory uncertainty;

•

problems with our non-wholly owned entities;

•

exposure to credit risks;

•

assimilation of acquisitions and the impact of any future material acquisitions;

•

inability to fund our working capital requirements;

•

unanticipated costs or cost increases;

•

risks inherent in the operation of helicopters;

•

reduced activity in the oil and gas industry;

•

inability to obtain or maintain necessary aircraft, aircraft parts, insurance or lease financing;

•

exchange rate fluctuations;

•

loss of key personnel;

•

labor problems;

•

global financial market instability;

•

insufficient assets in our defined benefit pension plan;

•

allocation of risk between our customers and us;

•

inability to dispose of our older aircraft and parts;

•

inability to service our debt obligations or comply with our obligations under our operating leases;

•

compliance risks associated with international activities;

•

application of tax laws in various jurisdictions;

•

inability to upgrade our technology;

•

reduction or cancellation of services for government agencies;

•

our sponsor may have interests that conflict with ours;

•

risk related to our operations under local law; and

•

inability to maintain government issued licenses.

Actual results may differ materially from those discussed in these forward-looking statements due to a number of factors, including the risks set forth in the section entitled “Risk Factors” in Part I, Item 1A of this Annual Report on Form 10-K and elsewhere in this filing. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of these forward-looking statements. We are under no duty to update any of the forward-looking statements after the date of this Annual Report on Form 10-K to conform our prior statements to actual results.

The market data and other statistical information (such as the size of certain markets and our position and the position of our competitors within these markets, oil and gas production and market information) used throughout this Annual Report on Form 10-K are based on independent industry publications, government publications, reports by market research firms or

other published independent sources. Some market data and statistical information are also based on our good faith estimates, which are derived from our review of internal surveys, as well as the independent sources listed above. This information may prove to be inaccurate because of the method by which we obtain some of the data for our estimates or because this information cannot always be verified with complete certainty due to the limits on the availability and reliability of raw data, the voluntary nature of the data gathering process and other limitations and uncertainties. As a result, although we believe these sources are reliable, we have not independently verified the information and cannot guarantee its accuracy and completeness. The industry in which we operate is subject to a high degree of uncertainty and risk due to a variety of factors, including those described in the section entitled “Risk Factors” in Part I, Item 1A of this Annual Report on Form 10-K.

BASIS OF PRESENTATION

The audited consolidated financial statements of the top-most parent guarantor, 6922767 Holding S.à r.l. (the “Successor”, the “Company”, “we”, “us” or “our”), consist of the Successor’s consolidated balance sheets as of April 30, 2012 and 2011 and the Successor’s consolidated statements of operations, changes in shareholder’s equity and cash flows for the years ended April 30, 2012, 2011, and 2010.

6922767 Holding S.à r.l. was incorporated on February 20, 2008 under the laws of Luxembourg and is a private limited liability company (Société à responsabilité limitée) (S.à r.l.) whose sole purpose was to acquire CHC Helicopter Corporation (the “Predecessor”). The Company completed its acquisition of the Predecessor on September 16, 2008 and has included the results of operations and cash flows of the entity formerly known as CHC Helicopter Corporation from September 16, 2008 to April 30, 2009 in its audited consolidated financial statements for the fiscal year ended April 30, 2009, which are not included in this Annual Report on Form 10-K. The Company’s results of operations also include organizational expenses and losses related to the acquisition as it was not previously operating in the helicopter transportation services industry from May 1, 2008 up to the date of the acquisition. The acquisition of CHC Helicopter Corporation was accounted for using the purchase method of accounting. The application of the purchase method of accounting requires the allocation of the acquisition purchase price to the tangible and intangible assets acquired and liabilities assumed based on their respective fair values as of the date of the acquisition. As a result, the assets and liabilities acquired from the Predecessor on the date of acquisition are recorded at fair values and these became the Successor’s cost basis. Accordingly, the Predecessor period from May 1, 2008 to September 15, 2008 and the Successor period from May 1, 2008 to April 30, 2009 have a different basis of accounting.

The Predecessor adopted the U.S. dollar as its reporting currency on May 1, 2008. As such, historical figures previously reported in Canadian dollars have been translated into U.S. dollars using the current rate method. Under this method, the statement of operations and cash flow statement items have been translated into U.S. dollars using the rates in effect at the date of the transactions. Assets and liabilities have been translated using the exchange rate in effect at the balance sheet date. The Predecessor applied this method retrospectively to all activity that commenced May 1, 2004. Equity balances which arose prior to May 1, 2004 have been translated to the reporting currency at the exchange rate in effect on May 1, 2004.

TRADEMARKS

CHC Helicopter and the CHC Helicopter logo are trademarks of CHC Helicopter S.A. All other trademarks and service marks appearing in this Annual Report on Form 10-K are the property of their respective holders. All rights reserved. The absence of a trademark or service mark or logo from this Annual Report on Form 10-K does not constitute a waiver of trademark or other intellectual property rights of CHC Helicopter S.A, its affiliates and/or licensors.

GLOSSARY


Embedded equity		Embedded equity represents the amount by which the estimated market value of a leased aircraft exceeds the leased aircraft purchase option price at September 16, 2008, the acquisition date. Embedded equity is assessed on an ongoing basis for impairment. Impairment, if any, is recognized in the consolidated statements of operations.

EMS		Emergency medical services.

Fixed wing		An airplane.

iii


Heavy helicopter		A category of twin-engine helicopters that requires two pilots, can accommodate 19 to 26 passengers and can operate under instrument flight rules, which allow daytime and nighttime flying in a variety of weather conditions. The greater passenger capacity, larger cabin, longer range, and ability to operate in adverse weather conditions make heavy aircraft more suitable than single engine aircraft for offshore support. Heavy helicopters are generally utilized to support the oil and gas sector, construction and forestry industries and SAR and EMS customer requirements.

IFR		Instrument flight rules, which allow for daytime and nighttime flying in a variety of weather conditions.

Long-term contracts		Contracts of three years or longer in duration.

Medium helicopter		A category of twin-engine helicopters that generally requires two pilots, can accommodate nine to 15 passengers and can operate under instrument flight rules, which allow daytime and nighttime flying in a variety of weather conditions. The greater passenger capacity, longer range, and ability to operate in adverse weather conditions make medium aircraft more suitable than single engine aircraft for offshore support. Medium helicopters are generally utilized to support the oil and gas sector, construction and forestry industries and SAR and EMS customer bases in certain jurisdictions. Medium helicopters can also be used to support the utility and mining sectors, where transporting a smaller number of passengers or carrying light loads over shorter distances is required.

Medium term contracts		Contracts of greater than one year and less than three years in duration.

MRO		Maintenance, repair and overhaul.

New technology		When used herein to classify our aircraft, a category of higher value, recently produced, more sophisticated and more comfortable aircraft, including Eurocopter’s EC225, EC135, EC145 and EC155; Agusta’s AW139; and Sikorsky’ S76C+, S76C++ and S92A.

Old technology		When used herein to classify our aircraft, all aircraft other than new technology aircraft, including Eurocopter’s AS365 and Super Puma; Sikorsky’s 76A, 76B, 76C and S61N; and Bell’s 412, 212 and 214.

OEM		Original equipment manufacturer.

PBH		Power-by-the-hour. A program where an aircraft operator pays a fee per flight hour to an MRO provider as compensation for repair and overhaul components required in order for the aircraft to maintain an airworthy condition.

SAR		Search and rescue.

VFR		Visual flight rules, which require daylight and good weather conditions.

PART I

Item 1.

Business

Overview

Our Company

We are a world-leading commercial operator of medium and heavy helicopters, providing mission-critical services to the offshore oil and gas industry, as well as SAR and EMS to government agencies and commercial operators through our Helicopter Services segment. We believe the helicopter services we provide to our oil and gas customers are critical for the continued production of hydrocarbons from existing offshore oil and gas platforms and the exploration and development of new oil fields, while our SAR and EMS services help save lives. In addition, our MRO segment, Heli-One is a world leading independent commercial provider of helicopter support services with offerings that include MRO services, integrated logistics support, helicopter parts sales and distribution, and complete outsourcing of maintenance for helicopter operators. Heli-One services our own flight operations and third-party customers around the world.

We have been providing helicopter services through our subsidiaries and predecessor companies, for more than 60 years and currently operate in approximately 30 countries, covering every major offshore oil and gas producing region of the world except the Gulf of Mexico. Our major operations are in Norway, the United Kingdom, Ireland, the Netherlands, Australia, Brazil, Canada, Europe and Africa. As of April 30, 2012, we operated 252 aircraft, comprising 113 heavy helicopters, 137 medium helicopters, and two fixed-wing aircraft. For the fiscal years ended April 30, 2012 and April 30, 2011, helicopter transportation services for the oil and gas industry accounted for approximately 79% and 78% of our total revenue, respectively, SAR and EMS activities accounted for approximately 9% and 10% of our total revenue, respectively, while MRO and other helicopter support services represented approximately 12% and 12% of our total revenue, respectively. For the fiscal years ended April 30, 2012, April 30, 2011 and April 30, 2010, the Company earned revenues of $1,692.5 million, $1,445.5 million and $1,313.6 million and incurred net losses of $95.0 million, $65.3 million and $76.5 million, respectively.

The following map shows our aircraft distribution as of April 30, 2012:

LOGO

Note 1:

Aircraft in Europe and North America include aircraft in post-delivery modification, those used for base maintenance and aircraft held for sale.

Helicopter Services

Our Helicopter Services segment consists of flying operations in the Eastern North Sea, the Western North Sea, the Americas, the Australasia region and the Africa-Euro Asia region serving customers primarily in the offshore oil and gas industry and SAR and EMS. The Eastern North Sea is comprised mainly of Norway while the Western North Sea includes the United Kingdom, Ireland, the Netherlands and Denmark. The Americas is comprised of Brazil and North and South American countries. The Australasia region includes Australia and Southeast Asian countries and the Africa-Euro Asia region includes Nigeria, Kazakhstan, Turkey, Mozambique, Tanzania and other African and European countries.

We are one of two global helicopter service providers to the offshore oil and gas industry. We provide transportation services to and from production platforms, drilling rigs and other offshore installations and facilities.

•

Our helicopter services business in the oil and gas industry is largely characterized by medium to long-term contracts (i.e., two to eight years in duration, with an average of four years).

•

The majority of our customers are large national and multinational companies.

•

We believe our services are critical to customers as helicopter transportation is a cost-effective, viable means to transport crews from land to offshore oil and gas platforms. Our fuel costs are passed through to our customers.

•

Maintaining a strong safety record is a primary concern for our customers, and as of April 30, 2012, our five year rolling average was 0.23 accidents per 100,000 flight hours. The accident rate is calculated using the number of accidents, as defined by the International Civil Aviation Organization, divided by the number of hours flown in the same period and then multiplied by 100,000.

We particularly target opportunities for long-term contracts that require sophisticated, medium and heavy helicopters, operated by highly trained personnel with state-of-the-art safety management systems and a world-class operating track record. We are a market leader in most of the regions we serve, with a well-established reputation for safety, customer service and aircraft reliability. We are a major operator in the North Sea, one of the world’s largest oil producing regions. We operate the largest fleet of heavy helicopters in Brazil to service our customers in the oil and gas sector, a market that is shifting to heavy helicopter technology as pre-salt fields in ultra deepwater environments have been further developed, and we service the industry in Africa, Europe, Australia and Southeast Asia. For the fiscal years ended April 30, 2012 and April 30, 2011, revenues generated by helicopter transportation services for the oil and gas industry accounted for approximately 79% and 78% of our total revenues, respectively.

Our oil and gas production customers generally provide our helicopter services business with a less cyclical revenue stream, while oil and gas exploration and development activities are more cyclical in nature. Offshore production platforms generally run at full capacity, irrespective of commodity prices, until the economic end-life of the respective field. These production platforms generally have expected lives of twenty years or more, depending on the size and characteristics of the field.

We are one of the world’s leading commercial providers of SAR and EMS services through our Helicopter Services segment. We have long-term contracts with government agencies and commercial operators in the United Kingdom, Ireland, Norway and Australia. Our SAR and EMS contracts average eight years in duration. Contracts are generally entered into directly with state and federal governments.

•

Our SAR business utilizes state-of-the-art aircraft specifically configured and equipped with emergency medical and rescue equipment. Our crews are multi-disciplinary professionals with extensive training for the high level of expertise required for maritime search and rescue, thus ensuring maximum safety during the operations conducted.

•

Our EMS business provides for the transport of medical personnel and equipment directly to the scene of an accident, and the rapid transport of victims to and between hospitals.

•

We expect increased demand for SAR and EMS helicopter services as governments increasingly outsource these services.

•

Revenue streams from SAR and EMS services are not driven by general economic conditions or short-term hydrocarbon prices. For the fiscal years ended April 30, 2012 and April 30, 2011, revenues generated by SAR and EMS services accounted for approximately 9% and 10% of our total revenues, respectively.

Maintenance, Repair and Overhaul

Our MRO segment, Heli-One, is a world-leading independent commercial provider of helicopter support and MRO services. Our comprehensive range of capabilities and broad geographic footprint allow us to offer a full suite of aftermarket services, including engine, airframe and component MRO, logistics support, parts sales and distribution, and high-value engineering and design. We provide these services individually or as part of multi-year complete maintenance outsourcing. We operate independent licensed commercial engine and major component MRO facilities for the Eurocopter SuperPuma and Eurocopter EC225 helicopters. Additionally, we service a wide variety of other helicopter types, including the Eurocopter Dauphin, Sikorsky S61N, Sikorsky S76 series, Sikorsky S92A, Agusta AW139, Bell 212 and Bell 412. We provide sophisticated avionics integration services to the armed forces of European nations, and we partner with helicopter manufacturers around the world to provide MRO services to their direct customers.

We believe that Heli-One enhances our business model in several respects:

•

Third party demand for MRO services by each of the government, military and civil sectors provides us with a diverse stream of revenue.

•

Air worthiness regulations, which are established by civil aviation authorities and manufacturers, require that every dynamic component of a helicopter be replaced or overhauled on a regularly scheduled basis, resulting in steady demand for our MRO services.

•

Our in-house repair and overhaul capabilities provide operational control and flexibility over the maintenance of our fleet, lowering operating cost and providing a competitive advantage.

Our Customers

Our customer base includes a broad range of blue-chip oil and gas companies, government agencies and commercial operators. Key customers include Statoil (year ended April 30, 2012 – 16% of revenues) and Petrobras (year ended April 30, 2012 – 11% of revenues).

Our Industry

Regulated Industry With a Focus on Safety. We operate within extensive and complex regulatory requirements. A strong record for safety, respected brand name and ongoing investment are instrumental in attracting pilots, maintenance engineers and personnel with the requisite levels of training, technical qualifications, and certifications. Helicopter operators are required to undergo licensing processes in every country in which they do business. In many countries, operators also need local partners or representatives to meet national aviation requirements.

Limited Aircraft Supply. Helicopters are generally classified as light (four to eight passengers), medium (nine to 15 passengers) and heavy (19 to 26 passengers). Medium and heavy helicopters are primarily used for crew change transportation services on oil and gas production and exploration rigs in the regions of the world where we operate because they can fly in a wide variety of operating conditions, over longer distances at faster speeds, and with larger payloads than light helicopters. Lead times for delivery of new heavy helicopters are long, currently about one year and have historically been as long as two years. We believe long lead times for heavy helicopter delivery and trends toward increasing deepwater oil and gas activity should create attractive market conditions for us since we operate the largest fleet of heavy helicopters in the world. These circumstances were enhanced by our commitments to purchase and incorporate an additional 22 Eurocopter EC225 and 10 Agusta Westland AW139 heavy helicopters into our operations over the next several years, with options to acquire additional aircraft.

Helicopter Values and Resale Market. The secondary market for helicopters has historically been larger than the annual new production market. Secondary market values are widely published with several independent firms providing valuations and performing annual appraisals. Unlike fixed wing aircraft, heavy and medium helicopters typically maintain

their value, or depreciate modestly over the long-term. This is because the regulatory requirements to periodically replace, overhaul and upgrade major components, such as engines, gear boxes, transmissions and other rotable parts, preserve the aircraft in near-new condition throughout the repair and overhaul cycle. Resale values for certain types of aircraft with older technology have declined recently as a result of general economic conditions; however, we expect valuations to improve once the economy stabilizes. The resale market includes customers in many non-hydrocarbon industries, including SAR, EMS, construction, forestry, mining, police, military and recreation.

Technological Advancements. Technology improvements have allowed oil and gas companies to expand exploration and production into deeper waters. This translates into longer trips, more flying hours and the need for larger helicopters with the newest technology for improved range and passenger capacity. A large number of these deepwater installations are planned over the next five years and we expect the demand for new offshore helicopters to increase.

Competitive Strengths

•

Global Footprint. We currently operate helicopter transportation services in approximately 30 countries. In addition, we have our own internal MRO operations, Heli-One, which services aircraft in most of the countries in which we maintain flying operations. Our broad geographic coverage enables us to respond quickly to customer needs and new business opportunities, while adhering to international safety standards, local market regulations and customs. Additionally, as multinational oil and gas companies seek helicopter operators that can provide one standard of service in many locations around the world, our geographic coverage allows us to effectively compete for many of these contracts. We have a record of obtaining the required licenses and permits to operate in new jurisdictions, including, where necessary, through local alliances.

•

Safety Record. In more than 60 years of operation, we believe we have developed sophisticated safety and training programs and practices and are proud of our safety record. We have implemented a single safety management system worldwide and continue to meet or exceed the stringent safety and performance audits conducted by our customers. We also host a highly regarded annual international safety summit, which is a manifestation of our single-minded commitment to safe operations. The summit is attended by our customers, manufacturers, competitors and regulators.

•

Strong Long-Term Relationships with Leading Companies and Organizations. We have multi-year relationships with major oil and gas companies and with SAR and EMS customers around the world, especially in Norway, Ireland, the United Kingdom and Australia, where many have been our customers continuously for more than two decades. We believe these long-term customer relationships are enabled, in large part, because of our focus on and accomplishments in safety and flight training, our crews’ experience, and service quality that consistently meets or exceeds customer standards. In addition to helicopter transportation, certain customers rely on us for ancillary services, including our computerized logistics systems that enhance crew scheduling and passenger handling services, which further strengthen relationships and often generate additional revenue.

•

Large, Modern and Diversified Fleet of Helicopters. We are a world-leading commercial operator of medium and heavy helicopters. Our large fleet allows us to meet the diverse operational requirements of our customers and minimize disruptions in service. To meet customer-specific requirements and ensure that we and our customers are not overly reliant on any one aircraft type or manufacturer, we most commonly operate Sikorsky S92A and Eurocopter EC225 heavy aircraft and Sikorsky S76 series and Agusta AW139 medium aircraft. Our fleet includes some of the most advanced civilian aircraft in the world. We have modernized our fleet significantly over the last five years and continue to invest in modernizing our fleet as evidenced through our continued commitment to purchase EC225s and AW139s. The total committed capital requirement as of April 30, 2012 is approximately $558.0 million for aircraft with delivery dates between fiscal 2013 and 2017.

•

Retention of Asset Value in Our Owned Fleet. A significant portion of a helicopter’s value resides in its major components, including engines, gearboxes, transmissions and rotable parts. Because these components are replaced or upgraded on a regular basis, older models of helicopters remain capable of meeting many of the same performance standards as newer aircraft.

•

In-House Repair and Overhaul Business. Our MRO segment, Heli-One diversifies our revenue streams, reduces our costs and positions us as a full-service, high-quality helicopter operator. We are a market leader in MRO and operate independent licensed commercial-engine and major-component MRO facilities for the Eurocopter Super Puma and Eurocopter EC225 helicopters. We also have the capability to support several other helicopter types including the Eurocopter Dauphin, Sikorsky S61N, Sikorsky S76 series, Sikorsky S92A, Agusta AW139, Bell 212 and Bell 412. This allows us to control the quality and cost of our helicopter maintenance, repair and refurbishment.

Our Business Strategy

Our goal is to enhance our leadership position in and create superior value by consistently and efficiently providing safe, reliable value-added services to our customers while maximizing return on assets, earnings and cash flow. In our pursuit of this goal, we intend to focus on the following key initiatives:

•

Strengthening Our Competitive Position in Existing Markets. We intend to improve our ability to win new contracts, renew existing contracts, strengthen our existing customer relationships and enhance our competitive position by increasing our focus on customer needs and reducing costs, while maintaining high standards for safety and reliability. We believe our global footprint, safety record and diversified fleet of large and medium helicopters ideally position us to serve increased demand from existing customers and new customers.

•

Expanding Our Helicopter Transportation Operations. We intend to capitalize on our broad geographic coverage, long-term customer relationships and our fleet capabilities to fulfill new opportunities in developing oil and gas regions. Some of these geographic regions, including Brazil, Australia, Europe and Southeast Asia, where we currently have infrastructure and operations, are expected to be the fastest growing markets for offshore helicopter transportation services. We are exploring expansion into military transportation services.

•

Growing the MRO Business. We plan to expand our Heli-One revenue by further penetrating markets for overhaul of major components and engines and by pursuing new opportunities in heavy- and medium-aircraft maintenance, as well as military helicopter support.

•

Growth Through Acquisition. We may evaluate acquisition opportunities for both our flying and MRO businesses to further strengthen our position in existing markets and establish ourselves in new ones.

•

Focusing on Long-Term Contracts. We are prioritizing long-term contracts with our major customers to maximize the stability of our revenue.

Revenue by End Market


(in thousands of U.S. dollars)	For the year ended April 30,
	2012				2011				2010
Industry Sector

Oil and Gas	$	1,330,163	79	%	$	1,129,749	78	%	$	1,042,980	79	%

Repair and Overhaul		166,479	10	%		129,222	9	%		112,470	9	%

EMS/SAR		158,505	9	%		151,101	10	%		138,012	11	%

Other		37,392	2	%		35,388	3	%		20,104	1	%


Total	$	1,692,539	100	%	$	1,445,460	100	%	$	1,313,566	100	%

Revenue by Geography


(in thousands of U.S. dollars)	For the year ended April 30,
	2012				2011				2010
Canada	$	13,914	1	%	$	12,671	1	%	$	16,386	1	%

United Kingdom		262,592	16	%		243,921	17	%		251,627	19	%

Norway		531,452	31	%		452,578	31	%		405,258	31	%

Africa		60,503	4	%		56,361	4	%		54,776	4	%

Australia		213,970	13	%		137,639	10	%		126,992	10	%

Denmark		29,538	2	%		29,108	2	%		29,535	2	%

The Netherlands		94,663	6	%		95,835	7	%		119,234	9	%

Brazil		210,347	12	%		163,928	11	%		105,856	8	%

Asia		93,782	6	%		107,305	7	%		93,671	7	%

Other European Countries		139,955	8	%		112,188	8	%		49,539	4	%

Other Countries		41,823	1	%		33,926	2	%		60,692	5	%


Consolidated total	$	1,692,539	100	%	$	1,445,460	100	%	$	1,313,566	100	%

THE BUSINESS

Helicopter Flying Operations

Medium and heavy helicopters are generally used to support the oil and gas sector, as well as SAR and EMS. Where appropriate, specialized equipment is installed to support SAR and EMS services.

Contracts with oil and gas customers are typically two to eight years in duration, with an average of four years. Such contracts are ordinarily awarded following competitive bidding processes among pre-qualified operators.

A substantial number of our long-term contracts, defined as three years or longer, contain provisions permitting early termination by the customer without penalty. At the expiration of a contract, customers typically solicit new bids for the next contract period. Contracts are usually awarded based on a number of factors, including price, long-term relationships, safety record of the helicopter service provider and quality of customer service. An incumbent operator commonly has a competitive advantage because of its relationship with the customer, knowledge of site characteristics, investment in infrastructure and demonstrated ability to meet service-level requirements and provide the necessary aircraft and services. Also, customers often want to avoid start-up costs associated with switching to another operator.

Our contracts generally require that fuel be provided by the customer or be charged directly to the customer based on actual fuel costs. As a result, we have no significant exposure to changes in fuel prices. For the year ended April 30, 2012, substantially all of our fuel costs were passed through to our clients.

Flying Operations Competition

CHC is one of two global helicopter service providers to the offshore oil and gas industry; other competitors are smaller, regional operators. The Company has a significant market position in all global offshore oil and gas markets, with the exception of the Gulf of Mexico. Oil and gas companies operating in the Gulf of Mexico utilize primarily light and medium helicopters under short term contracts and, as a result, the economics of providing services in the Gulf of Mexico would be less profitable for CHC than those in other regions of the world.

The Company is well positioned to capitalize on future growth opportunities. As oil and gas wells are depleted, oil companies are developing deep water reserves further offshore. The Company’s global presence, long-term customer relationships and modern fleet of aircraft position it to participate in new oil and gas developments in most offshore oil and gas regions.

Repair and Overhaul

All aircraft airframes, engines and components are required by manufacturer and government regulations to be serviced and overhauled based on flight hours, cycles or the actual condition of parts. The repair and overhaul process includes disassembling, cleaning, inspecting, repairing and reassembling engines, components and accessories, and testing complete engines and components. Operators typically consider the complexity and cost of tasks when choosing whether to perform them in-house or outsource the work to a third-party. MRO companies such as Heli-One are required to obtain licenses from government regulatory bodies and, in many cases, from aircraft manufacturers. Companies active in this industry include manufacturers of helicopters, components and accessories; manufacturer-authorized repair and overhaul operators; and small workshops typically not authorized by the manufacturers. The low cost of transporting components relative to the total cost of repair and overhaul services has resulted in development of a worldwide MRO market.

Our MRO segment, Heli-One, specializes in heavy structural repair, maintenance, overhaul and testing of helicopters and helicopter components in North America and Norway. Our comprehensive capabilities span aircraft including Sikorsky S61N, S76 series and S92A; Bell 212 and 412; Agusta AW139, 119 and 109; Eurocopter Super Puma, AS332, EC225, AS350, AS355, AS365 and BK117. Our engine expertise spans models including Pratt & Whitney PT6; Turbomeca Arriel 1 and 2; Makila; Artouste; Turmo; and GE CT58 and T58.

Heli-One’s main MRO competitors are helicopter manufacturers, which are also our main parts suppliers. Factors that affect competition within the repair and overhaul market include price, quality, safety record and customer service. To minimize issues related to availability and pricing of the parts we need to perform MRO work, Heli-One generally has long-term supply arrangements with the helicopter manufactures and works closely with them on items such as modifications and approvals of parts and components. In addition, we have certain negotiation leverage with the manufacturers on parts, since we are one of the major customers of these manufacturers for new aircraft.

We also provide customers with integrated logistics support, including 24-hour service for all scheduled and unscheduled MRO for engines, dynamic components, repairable components and consumable parts. We also support special mission equipment. Heli-One offers next-day delivery in most locations on a wide range of helicopter parts from all major manufacturers through a global distribution network that includes a global warehouse in the Netherlands. We believe our global buying power gives us competitive pricing on all major components. We believe we provide quality, competitively priced support services to civilian and military helicopter operators worldwide. In addition, we have extensive expertise in all areas of engineering and design for conversion upgrades and refurbishments, including avionics.

Seasonality

Our operations are not subject to seasonality.

PROPERTY AND EQUIPMENT

As of April 30, 2012, the Company’s fleet was comprised of the following aircraft:


Aircraft Type	Total		Owned		Leased
Medium
Sikorsky S76C+		22		11		11
Sikorsky S76C++		23		3		20
Sikorsky S76A/B/C		29		26		3
Eurocopter EC135/145/155		6		1		5
Eurocopter AS365 Series		14		6		8
Bell 412		13		7		6
Bell 212/214		1		1		—
Agusta AW139		29		3		26

		137		58		79
Heavy
Eurocopter Super Puma series (i)		45		18		27
Eurocopter EC225		29		2		27
Sikorsky S92A (i)		33		2		31
Sikorsky S61N		6		6		—

		113		28		85
Total Helicopters		250		86		164
Fixed Wing		2		2		—

Total Aircraft		252		88		164

(i)	Below is a summary of aircraft under capital lease, which are classified above as owned aircraft:


Eurocopter Super Puma Series			1
Sikorsky S92A			1

Lease Obligations

We had entered into aircraft operating leases for 164 aircraft included in our fleet as of April 30, 2012. At April 30, 2012, the total minimum lease payments under aircraft operating leases with expiry dates ranging from fiscal 2013 to fiscal 2022 totaled $1,186.5 million. At our option, we have the right to purchase the majority of aircraft at agreed amounts that are not considered bargain purchase options. Substantially all of the costs to perform inspections, major repairs and overhauls of major components on such leased aircraft are at our expense. We may perform this work through Heli-One or have the work performed by an external MRO service provider. We have also provided guarantees to certain lessors in connection with these aircraft leases. See “Future Cash Requirements—Contractual Obligations and Off-Balance Sheet Arrangements.”

In addition to payment under aircraft operating leases, we had operating lease commitments as of April 30, 2012 for buildings, land and other equipment with minimum lease payments of $90.9 million and expiry dates ranging from fiscal 2013 to fiscal 2099.

For additional details see “Future Cash Requirements—Contractual Obligations and Off-Balance Sheet Arrangements” and see Notes 25, 26 and 28 to the audited annual consolidated financial statements for the year ended April 30, 2012 included elsewhere in this Annual Report on Form 10-K.

Commitments to Acquire New Aircraft

As of April 30, 2012, we had ordered and advanced deposits to purchase 23 aircraft, with expected delivery dates from fiscal 2013 to fiscal 2017. We have committed total capital of approximately $558.0 million for these new aircraft, which will be purchased outright or financed through additional leases on the delivery date. We expect that most of these aircraft will be used internally to support continued growth.

On June 12, 2012, we committed to acquire 10 AW139 helicopters from AgustaWestland to be delivered between October 2012 and September 2014, with options to acquire an additional 16 AW139 helicopters. On June 13, 2012, we exercised our option to acquire two additional EC225s from Eurocopter in addition to the twenty helicopters we committed to acquire in fiscal 2012.

Safety and Insurance

Operation of helicopters involves some degree of risk. Hazards, such as aircraft accidents, collisions and fire, are inherent in providing helicopter services. We maintain a flight safety organization that is responsible for ensuring compliance with safety standards within our organization and the requisite proficiency among flight crews. Our safety organization is responsible for training flight crews, conducting regular safety audits and seminars for all flight personnel, and generally ensuring safe operating techniques and standards consistent with government regulations and customer requirements. In addition, aviation regulatory bodies and customers conduct safety audits to ensure that our standards meet their requirements.

We maintain comprehensive aviation hull and liability insurance coverage in amounts and on terms that reflect prudent helicopter operations. This includes engine and spare-parts coverage. The hull policies insure against the physical loss of or damage to our helicopters. In addition we purchase hull war coverage for losses due to terrorism, hijacking, war, expropriation, confiscation and nationalization. We self retain the risk of the loss of use or loss of profit from our operations, which is mitigated by the possible use of other aircraft given our fleet size.

In addition, we procure property all risks insurance, automobile liability and general liability insurance and the customary corporate insurances.

Facilities

We currently operate in approximately 30 countries worldwide, using facilities that include hangars, supply and service centers, engineering support facilities and offices. In Norway, the United Kingdom, the Netherlands and Australia, we generally own the hangars we use in our helicopter operations, which are located primarily on leased airport land. We typically lease supply and service centers, engineering support facilities and offices from third parties.

The principal properties from which we now conduct our operations are:

Location

Operations

Buildings
(Sq. Feet)

Owned or Leased

Land

Buildings

Richmond, British Columbia, Canada

Corporate Headquarters

80,000

Leased

Owned

Delta, British Columbia, Canada

Headquarters for MRO Segment

240,000

Leased

Aberdeen, Scotland

CHC Scotia Limited; Helicopter Services

42,000

Leased

CHC Scotia Limited; Terminal Building

25,000

Leased

Owned

Stavanger, Norway

CHC Norway AS; Helicopter Services

199,000

Leased

Owned

Heli-One Norway AS Headquarters; MRO Segment

179,000

Leased

Owned

Fort Collins, Colorado

Heli-One American Support, LLC

80,000

Leased

Hoofddorp, The Netherlands

CHC Netherlands BV; Heli-One (Netherlands) BV

39,000

Leased

Bergen, Norway

CHC Norway AS

66,000

Leased

Owned

Den Helder, The Netherlands

CHC Helicopter Netherlands BV; Helicopter Services

56,000

Owned

Perth, Australia

CHC Australia Headquarters

7,400

Leased

Fort Worth, Texas

CHC Operations Centre

26,926

Leased

AVIATION REGULATIONS

Most of the countries in which we conduct flying operations have laws that require us to hold either or both of an operating license and an air operator certificate. Most of these countries also have materiality requirements for issuance of operating licenses and/or air operator certificates that require the holder of such license or certificate to be a qualified national of such country. Companies holding such licenses and certificates must typically be both majority owned and effectively controlled, or controlled in fact, by citizens of the issuing state.

The European Union and the European Economic Area

We operate in the EU and the EEA through our 49.9% ownership in EEA Helicopter Operations B.V. (“EHOB”). EHOB’s five wholly-owned operating subsidiaries operate in four member states of the EU (the UK, the Netherlands, Denmark and Ireland) and Norway, a member state of the EEA. Each of Norway and the member states of the EU must comply with EU Directive 1008/2008 and common rules for the operation of aircraft. Among other things, this directive restricts the issuance of operating licenses to carry passengers for remuneration to those companies that are majority owned and effectively controlled by nationals of a member state of the EU or the EEA. We believe that EHOB, and therefore each of EHOB’s wholly-owned subsidiaries, are both majority owned and effectively controlled by nationals of a member state of the EU.

Canada

Our helicopter operations in Canada are conducted through CHC Helicopters Canada Inc., a company wherein we hold a minority interest. That company’s flying operations are regulated by Transport Canada and are conducted under that company’s air operator’s certificate (AOC). Our ability to conduct our helicopter operating business in Canada is dependent on our ability to maintain our relationship with CHC Helicopters Canada Inc. Our helicopter operations in certain other countries are conducted pursuant to an AOC issued by the Minister of Transport (Canada) under the provisions of the Aeronautics Act (Canada) for which our wholly owned subsidiary holds an exemption until 2015. If we are unable to extend the ministerial exemption pursuant to which this certificate is issued, we will need to obtain licenses and certificates issued by the countries in which we conduct such operations or reach an agreement with CHC Helicopters Canada Inc. and/or customers in such countries to transfer the operations there to CHC Helicopters Canada Inc. We cannot guarantee that we will be able to either extend the ministerial exemption, obtain local licenses and certificates or transfer such operations to CHC Helicopters Canada Inc., either at all or on acceptable terms.

Australia

Civil aviation in Australia is governed by the Civil Aviation Act, 1988, and regulations made thereunder. To operate an aircraft in Australia, it must be registered with the Australian Civil Aviation Safety Authority and a Certificate of Airworthiness must be obtained, be valid and in effect. The operation of an aircraft for a commercial purpose into, out of, or within Australian territory can only be undertaken as authorized by an Air Operators’ Certificate. Our ability to offer our helicopter transportation services in Australia is dependent on maintaining this certificate. Australia does not have a requirement for ownership or control by Australian nationals.

Other Countries

Our operations in other foreign jurisdictions are regulated to various degrees by the governments of such jurisdictions and must be conducted in compliance with those regulations and, where applicable, in accordance with our air service licenses and air operator certificates. These regulations may require us to obtain a license to operate in that country, may favor local companies or require operating permits that can only be obtained by locally registered companies and may impose other nationality requirements. In such cases, we partner with local persons, but there is no assurance regarding which foreign governmental regulations may be applicable in the future to our helicopter operations and whether we would be able to comply with them.

The revocation of any of the licenses discussed above or the termination of any of the relationships with local parties discussed above could have a material adverse effect on our business, financial condition and results of operations.

ENVIRONMENTAL MATTERS

We are subject to extensive laws, rules, regulations and ordinances in the various jurisdictions in which we operate relating to pollution and protection of the environment and to human health and safety, including those related to noise, emissions to the air, releases or discharges to soil or water, the use, storage and disposal of petroleum and other regulated materials, and the remediation of contaminated sites. Our operations, including aircraft maintenance and aircraft fueling, involve the use, handling, storage and disposal of materials that may be classified as hazardous to human health and safety and to the environment. Non-compliance with these regulations may result in significant fines or penalties or limitations on our operations. Many of the countries in which we operate have laws that may impose liability for the investigation and cleanup of releases of regulated materials and the remediation of related environmental damage without regard to negligence or fault. These laws may also expose us to liability for the conduct of, or conditions caused by, others, such as historic spills of regulated materials at our facilities, for acts that were in compliance with all applicable environmental laws at the time such acts were performed, and for contamination at third-party sites where substances were sent for off-site treatment or disposal. Additionally, any failure by us to comply with applicable environmental, health and safety or planning laws and regulations may result in governmental authorities or other third parties taking action against our business that could adversely impact our operations and financial condition. We believe we are in substantial compliance with applicable environmental laws and that ensuring compliance has not, to date, had a material adverse effect upon our financial position. We cannot, however, predict the likelihood of change to these laws or in their enforcement nor the impact that any such change, or any discovery of previously unknown conditions, may have on our costs and financial position. Please see Item 1A Risk Factors – “We are subject to extensive environmental, health and safety laws, rules and regulations, which may have an adverse impact on our business” below.

EMPLOYEES

As of April 30, 2012, we had approximately 4,350 full-time employees. We hire independent contractors on an as needed basis. We believe that our employee relationships are satisfactory.

Certain of our employees in the UK, Ireland, the Netherlands, Norway, Brazil, Canada and Australia (collectively, approximately 65% of our employees) are represented under collective bargaining or union agreements. Any disputes over the terms of these agreements or our potential inability to negotiate acceptable contracts with the unions that represent our employees could result in strikes, work stoppages or other slowdowns by the affected workers. Periodically, certain groups of our employees who are not covered under a collective bargaining agreement consider entering into such an agreement.

If our unionized workers engage in a strike, work stoppage or other slowdown, other employees elect to become unionized, existing labor agreements are renegotiated, or future labor agreements contain terms that are unfavorable to us, we could experience a disruption of our operations or higher ongoing labor costs, which could adversely affect our business, financial condition and results of operations.

AVAILABLE INFORMATION

We are required to file annual, quarterly and current reports and other information with the SEC. You may read and copy any documents filed by us with the SEC at the SEC’s Public Reference Room at 100 F. Street, N.E., Washington, D.C. 20549. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. Our filings with the SEC are also available to the public from commercial document retrieval services and at the SEC’s website at http://www.sec.gov.

We also make available on our website at www.chc.ca all of the documents that we file with the SEC, free of charge, as soon as reasonably practicable after we electronically file such material with the SEC. Information contained on our website is not incorporated by reference into this Form 10-K.

Item 1A.

Risk factors

The risks described below could have a material adverse impact on our financial position, results of operations, liquidity and cash flows. Although it is not possible to predict or identify all such risks and uncertainties, they may include, but are not limited to, the factors discussed below. Our business operations could also be affected by additional factors that are not presently known to us or that we currently consider not to be material to our operations. You should not consider this list to be a complete statement of all risks and uncertainties.

Our indebtedness and lease obligations could adversely affect our business and liquidity position.

We have a substantial amount of financial debt and lease obligations. If we fail to meet our payment or covenant obligations or otherwise default under the agreements governing indebtedness or lease obligations, the lenders under those agreements will have the right to accelerate the indebtedness or terminate the leases and exercise other rights and remedies against us. These rights and remedies include the rights to repossess and foreclose upon the assets that serve as collateral, initiate judicial foreclosure against us, petition a court to appoint a receiver for us, and initiate involuntary bankruptcy proceedings against us. If lenders or lessors exercise their rights and remedies, our assets may not be sufficient to repay outstanding indebtedness and lease obligations, and we may not have sufficient liquidity after payment of indebtedness and lease obligations to continue our business operations. In some instances, the Company may enter into discussions with the lessor for a covenant reset, amendment or waiver if we anticipate to fail or fail to meet our covenant obligations.

Subsequent to April 30, 2012, a lessor that had been engaged in discussions with the Company approved a financial covenant reset to October 31, 2013. As part of previous negotiations in 2011 with this lessor, the Company also made a commitment to further reduce its total lease portfolio by $64.4 million.

Failure to comply with covenants contained in certain of our lease agreements could limit our ability to maintain our leased helicopter fleet and adversely affect our business.

The terms of certain of our helicopter lease agreements contain covenants that impose operating and financial limitations on us. Such lease agreements limit, among other things, our ability to utilize aircraft in certain jurisdictions and/or sublease the aircraft, and may contain restrictions upon a change of control. A breach of lease covenants could result in an obligation to repay amounts outstanding under the lease. If such an event occurs, we may not be able to pay all amounts due under the leases or refinance such leases on terms satisfactory to us or at all, which could have a material adverse effect on our business, financial condition and results of operations.

Our business requires substantial capital expenditures, lease and working capital financing. Continued deterioration of economic conditions and the current global financial and credit crisis could adversely impact our business and financial condition and we may be unable to obtain needed capital or financing on satisfactory terms or at all. In addition, financial market instability could leave our creditors unable to meet their obligations to us.

Our business requires significant capital expenditure including significant ongoing investment to purchase or lease new aircraft, refinance existing leases and maintain our existing fleet. To the extent that we do not generate sufficient cash from our operations, we will need to raise additional funds through operating lease financing or other debt financing to execute our growth strategy and make the capital expenditures required to successfully operate our business.

Continued concerns about the systemic impact of a potential long-term and wide-spread recession, increased energy costs, the availability and cost of credit, diminished business and consumer confidence and increased unemployment have contributed to increased market volatility and diminished expectations for western and emerging economies, including the jurisdictions in which we operate. In particular, the cost of raising money in the credit markets has increased substantially as many lenders and institutional investors, concerned about the stability of the financial markets generally and about the solvency of counterparties, have increased interest rates, enacted tighter lending standards and reduced and, in some cases, ceased to provide funding, to borrowers.

Such factors may restrict our ability to access capital and bank markets or avail of lease or other financings at a time when we would like to, or need to, which could have an impact on our growth plans or on our flexibility to react to changing economic and business conditions. In addition, our credit facilities and helicopter leases have maintenance covenants which may need to be renegotiated from time to time, and the financial market instability could have an impact on the lenders or lessors willingness to renegotiate these covenants on reasonable terms or at all.

Many of the markets in which we operate are highly competitive, which may result in a loss of market share or a decrease in revenue or profit margins.

Many of the markets in which we operate are highly competitive, which may result in a loss of market share or a decrease in revenue or profit margins. Contracting for helicopter services is usually done through a competitive bidding process among those having the necessary equipment and resources. Factors that affect competition in our industry include price, reliability, safety, professional reputation, availability, equipment and quality of service. We compete against a number of helicopter operators, including the other major global commercial helicopter operator, and other local and regional operators. There can be no assurance that our competitors will not be successful in capturing a share of our present or potential customer base. In addition, many oil and gas companies and government agencies to which we provide services have the financial ability to perform their own helicopter flying operations in-house should they elect to do so.

Our main competitors within the repair and overhaul business are the OEMs of helicopters and helicopter components. As such, our main competitors in this industry are also our main parts suppliers and MRO license providers. A conflict with the OEMs could result in our inability to obtain parts and licenses in a timely manner in required quantities and at competitive prices.

We rely on a limited number of large offshore helicopter support contracts for a limited number of customers. If any of these are terminated early or not renewed, our revenues could decline.

We rely on a limited number of large offshore helicopter support contracts. For the fiscal year ended April 30, 2012, revenue from Statoil ASA totaling $262.7 million and Petrobas totaling $187.8 million was greater than 10% of the Company’s total revenues. Many of our contracts contain clauses that allow for early termination by the customer for convenience, which could have a material adverse effect on our business, financial condition and results of operation.

Failure to maintain standards of acceptable safety performance may have an adverse impact on our ability to attract and retain customers and could adversely impact our reputation, operations and financial performance.

Our customers consider safety and reliability as the two primary attributes when selecting a provider of helicopter transportation services. If we fail to maintain standards of safety and reliability that are satisfactory to our customers, our ability to retain current customers and attract new customers may be adversely affected. Moreover, helicopter crashes or similar disasters of another helicopter operator could impact customer confidence and lead to a reduction in customer contracts, particularly if such helicopter crash or disaster were due to a safety fault in a type of helicopter used in our fleet. In addition, the loss of aircraft as a result of accidents could cause significant adverse publicity and the interruption of air services to our customers, which could adversely impact our reputation, operations and financial results. Our aircraft have been involved in accidents in the past, some of which have included loss of life and property damage. We may experience similar accidents in the future.

Our operations are subject to extensive regulations which may increase our costs and adversely affect us.

The helicopter industry is regulated by various laws and regulations in the jurisdictions in which we operate. The scope of such regulation includes infrastructure and operational issues relating to helicopters, maintenance, spare parts and route flying rights as well as safety and security requirements. We cannot fully anticipate all future changes that might be made to laws and regulations to which we are subject and the possible impact of all such changes.

Our ability to conduct our business is dependent on our ability to maintain authorizations, licenses and certificates, which in many jurisdictions require us to subcontract with third parties to obtain required aircraft operating leases. We are routinely audited to ensure compliance with all flight operation and aircraft maintenance requirements. There can be no assurance that we will pass all audits. Our failure to pass such audits or any breach of regulations applicable to us could result in fines, adverse publicity or grounding of our aircraft, all of which could have a material adverse effect on our business, results of operations and financial condition, especially if a regulatory breach led to a helicopter crash or accident. Changes in laws or regulations could have a material adverse impact on our cost of operations or revenues from operations.

If we are unable to maintain required government-issued licenses for our operations, we will be unable to conduct helicopter operations in the applicable jurisdiction, as outlined below.

Europe

Approximately 25% of our revenue for the fiscal year ended April 30, 2012 originated from helicopter flying services provided by subsidiaries of EEA Helicopter Operations B.V. (“EHOB”), a Dutch Company 49.9% owned by us. These subsidiaries operate in the UK, Denmark, the Netherlands and Ireland (member states of the European Union (“EU”)), and Norway (member state of the European Economic Area (“EEA”)). To operate helicopters in the EU and EEA, an operator must be licensed by the applicable national Civil Aviation Authority. Under applicable European law, an operator must be “effectively controlled” and “majority owned” by nationals of member states of the EU or the EEA to maintain its license. We believe that the majority shareholder in EHOB is an EU national and therefore these subsidiaries are currently “majority owned” and “effectively controlled” within the meaning of European Union and European Economic Area licensing requirements. Any change in the national status of the majority shareholder could affect the licenses of these subsidiaries.

Canada

Australia

Other Countries

Our operations may suffer due to political and economic uncertainty.

Risks associated with some of our operations include political, social and economic instability, war and civil disturbances or other events that may limit or disrupt markets, expropriation without fair compensation, requirements to award contracts, concessions or licenses to nationals, international exchange restrictions and currency fluctuations, changing political conditions and monetary policies of foreign governments. Any of these events could materially adversely affect our ability to provide services to our international customers. Certain of our helicopter leases and loan agreements impose limitations on our ability, including requiring the prior approval of the lessor or the lender, to locate particular helicopters in certain countries. We cannot provide assurance that these limitations will not affect our ability to allocate resources in the future.

We derive significant revenue from non-wholly owned entities, which, if we develop problems with our non-wholly entities, could adversely affect our financial condition and results of operations.

Aviation regulatory requirements often require us to operate through non-wholly owned entities with local shareholders. We depend to some extent upon good relations with our local shareholders to ensure profitable operations. In the event shareholder disputes arise, these could negatively impact our revenues and profit sharing from these entities.

We are exposed to credit risks.

We are exposed to credit risk on our financial investments due to the ability of our counterparties to fulfill their obligations to us. We manage credit risk by entering into arrangements with established counterparties and through the establishment of credit policies and limits, which are applied in the selection of counterparties.

Credit risk on financial instruments arises from the potential for counterparties to default on their contractual obligations and is limited to those contracts where we would incur a loss in replacing the instrument. We limit our credit risk by dealing only with counterparties that possess investment grade credit ratings and monitor our concentration risk with counterparties on an ongoing basis. The carrying amount of financial assets represents the maximum credit exposure for financial assets.

Credit risk arises on our trade receivables from the unexpected loss in cash and earnings when a customer cannot meet its obligation to us or the value of security provided declines. To mitigate trade credit risk, we have developed credit policies that include the review, approval and monitoring of new customers, annual credit evaluations and credit limits. We do not believe that we are subject to significant concentrations of credit risk as trade receivables consists primarily of amounts due from multinational companies operating in the oil and gas industry and are geographically diverse. There can be no assurances that our risk mitigation strategies will be effective and that credit risk will not adversely affect our results of operations and financial position.

Assimilating any future material acquisitions into our corporate structure may strain our resources and have an adverse impact on our business.

The assimilation of any future material acquisitions we may make will require substantial time, effort, attention and dedication of management resources and may distract management from ordinary operations. The transition process could create a number of potential challenges and adverse consequences, including the possible unexpected loss of key employees, customers or suppliers, a possible loss of revenues or an increase in operating or other costs. Inefficiencies and difficulties may arise because of unfamiliarity with new assets and the business associated with them, new geographic areas and new

regulatory systems. These types of challenges and uncertainties could have a material adverse effect on the business, financial condition and results of operations. We may not be able to effectively manage the combined operations and assets or realize any of the anticipated benefits of future material acquisitions.

Our fixed operating expenses and long-term contracts with customers could adversely affect our business under certain circumstances.

Our profitability is directly related to demand for our helicopter services. Because of the significant expenses related to aircraft financing, crew wage and benefits, lease costs, insurance and maintenance programs, a substantial portion of our operating expenses are fixed and must be paid even when certain aircraft are not actively servicing customers and thereby generating income. A decrease in our revenues could therefore result in a disproportionate decrease in our earnings, as a substantial portion of our operating expenses would remain unchanged.

Our long-term customer contracts contain pre-determined price escalation terms and conditions. Although supplier costs and other cost increases are passed through to our customers through rate increases, where possible, these escalations may not be sufficient to enable us to fully recoup increased costs. In addition, because many of our contracts are long-term in nature, cost increases may not be adjusted in our contract rates until the contracts are up for renewal. There can be no assurance that we will be able to accurately estimate costs or recover increased costs by passing these costs on to our customers. In the event that we are unable to do so, the profitability of our customer contracts and our business, financial condition and results of operations could be materially and adversely affected.

Operation of helicopters involves a degree of inherent risk and we are exposed to the risk of losses from safety incidents.

Hazards, such as aircraft accidents, adverse weather conditions, collisions and fire are inherent in furnishing helicopter services and can cause personal injury and loss of life, severe damage to and destruction of property and equipment and suspension of operations. We attempt to protect ourselves against potential losses through our safety management system and insurance coverage. However, our insurance coverage is subject to deductibles and maximum coverage amounts, and we do not carry insurance against all types of losses. We cannot ensure that our existing insurance coverage will be sufficient to protect against all losses, that we will be able to maintain our existing insurance coverage in the future or that the premiums will not increase substantially. Our safety management system may not be effective. In addition, terrorist activity, risk of war, accidents or other events could increase our insurance premiums. Our inability to renew our aviation insurance coverage or the loss, expropriation or confiscation of, or severe damage to, a large number of our helicopters could adversely affect our operations and possibly our financial condition. Furthermore, we are not insured for loss of profit or loss of use of our helicopters. The loss of, or limited availability of, our liability insurance coverage, inadequate coverage from our liability insurance or substantial increases in future premiums could have a material adverse effect on our business, financial condition and results of operation.

Our operations are largely dependent upon the level of activity in the oil and gas industry.

To varying degrees these activity levels are affected by long-term trends in oil and gas prices. Historically, the prices for oil and gas have been volatile and subject to wide fluctuations in response to changes in the supply of and demand for oil and gas, market uncertainty and a variety of additional factors beyond our control. We cannot predict future oil and gas price movements. Any prolonged reduction in oil and gas prices could depress the level of helicopter activity in support of exploration and, to a lesser extent, production activity and, therefore have a material adverse effect on our business, financial condition and results of operations. For the fiscal year ended April 30, 2012, revenue generated by helicopter transportation services for the oil and gas industry was approximately 79% of our total revenues.

We are highly dependent upon the level of activity in the North Sea, which is a mature exploration and production region.

For the fiscal year ended April 30, 2012, approximately 45% of our gross revenue was derived from helicopter services provided to customers operating in the North Sea. The North Sea is a mature exploration and production region that has undergone substantial seismic survey and exploration activity for many years. Because a large number of oil and gas properties in this region have already been drilled, additional prospects of sufficient size and quality could be more difficult to identify. Generally, the production from these drilled oil and gas properties is declining. In the future, production may decline to the point that such properties are no longer economical to operate, in which case, our services with respect to such properties will no longer be needed. Oil and gas companies may not identify sufficient additional drilling sites to replace those that become depleted. If activity in oil and gas exploration, development and production in the North Sea materially declines, our business, financial condition and results of operations could be materially and adversely affected. We cannot predict the levels of activity in this or any other geographic area.

If oil and gas companies undertake cost reduction methods, there may be an adverse effect on our business.

Companies in the oil and gas production and exploration sector continually seek to implement measures aimed at reducing costs, including helicopter support operations. For example, oil and gas companies in some circumstances have reduced manning levels on both old and new installations by using new technology to permit unmanned installations and may

increase the lengths of offshore shifts which will reduce the frequency of transportation of employees. The implementation of such measures could reduce the demand for helicopter transportation services and have a material adverse effect on our business, financial condition and results of operations.

If we are unable to acquire the necessary aircraft, we may not be able to take advantage of growth opportunities.

If we are unable to acquire the necessary aircraft, we may not be able to take advantage of growth opportunities. Helicopter manufacturers have limited availability of aircraft, particularly heavy helicopters, and we have limited alternative sources of new aircraft. Currently, lead times of up to one year are necessary to obtain heavy helicopters. We contract with a small number of manufacturers for most of our aircraft expansion and replacement needs. If any of these manufacturers faced production delays due to, for example, natural disasters, labor strikes or unavailability of skilled labor, we may experience a significant delay in the delivery of previously ordered aircraft. During these periods, we may not be able to obtain orders for additional aircraft with acceptable pricing, delivery dates or other terms. Delivery delays or our inability to obtain acceptable aircraft orders would adversely affect our revenue and profitability and could jeopardize our ability to meet the demands of our customers and execute our growth strategy. Although we have been able to acquire sufficient aircraft to date, a lack of available aircraft or the failure of our suppliers to deliver the aircraft we have ordered on a timely basis could limit our ability to take advantage of growth opportunities or jeopardize our ability to meet the demands of our customers. Additionally, lack of availability of new aircraft could result in an increase in prices for certain types of used helicopters.

We depend on a limited number of third party suppliers for aircraft parts and subcontract services.

We rely on a few key vendors for the supply of parts and subcontract services required to maintain our aircraft. Due to high demand, these vendors may experience backlogs in their manufacturing schedules and some parts may be in limited supply from time to time, which could have an adverse impact upon our ability to maintain and repair our aircraft.

We currently obtain a substantial portion of our helicopter spare parts and components from helicopter manufacturers and maintain supply arrangements with other key suppliers. To the extent that these suppliers also supply parts for aircraft used by the U.S. military, parts delivery for our aircraft may be delayed during periods in which there are high levels of military operations. Our inability to perform timely maintenance and repairs can result in our aircraft being underutilized which could have an adverse impact on our operating results. Furthermore, our operations in remote locations, where delivery of these components and parts could take a significant period of time, may also impact our ability to maintain and repair our aircraft. While every effort is made to mitigate such impact, this may pose a risk to our operating results. We do not have an alternative source of supply for parts and components supplied by the main helicopter manufacturers including Sikorsky, Eurocopter and Agusta. Failure or significant delay by these vendors in providing necessary parts could, in the absence of alternative sources of supply, have a material adverse effect on our business, including the withholding of payments by customers in certain cases. Due to our dependence on helicopter manufacturers for helicopter parts and components, we may also be subject to adverse impacts from unusually high price increases that are greater than overall inflationary trends. Cost increases may not result in an increase in our contract rates. An unusually high increase in the price of parts or components that cannot be fully passed on to our customers could have a material adverse effect on our business, results of operations and financial condition.

We are exposed to foreign currency risks.

Our consolidated financial statements are presented in U.S. dollars. However, a significant portion of revenue and operating expenses are denominated in currencies consisting primarily of Pound Sterling, Norwegian Kroner, Canadian Dollars, Australian Dollars and the Euro. The functional currencies of many of our subsidiaries are in non-U.S. currencies. There can be no assurances that our foreign currency risk management strategies will be effective and that foreign currency fluctuations will not adversely affect our results of operations and financial position. See Item 7A “Quantitative and qualitative disclosures about market risk” included elsewhere in this Annual Report on Form 10-K.

The loss of key personnel could affect our growth and future success.

Loss of the services of key management personnel at our corporate and regional headquarters without being able to attract personnel of equal ability could have a material adverse effect upon us.

Our ability to attract and retain qualified pilots, mechanics, technicians and other highly-trained personnel is an important factor in determining our future success. The market for these experienced and highly trained personnel is competitive and may become more competitive. Accordingly, we cannot be assured that we will be successful in our efforts to attract and retain such personnel in the future. A limited supply of qualified applicants may contribute to wage increases that increase the related costs to us. Our failure to attract and retain qualified personnel could have a material adverse effect on our business, financial condition and results of operations.

Labor problems could adversely affect us.

If the assets in our defined benefit pension plans are not sufficient to meet the plans’ obligations, we may be required to make substantial cash contributions and our liquidity may be adversely affected.

We sponsor funded and unfunded defined benefit pension plans for our employees principally in Canada, the UK, the Netherlands and Norway. As of April 30, 2012, there was a $88.3 million funding deficit related to our various defined benefit pension plans which require ongoing funding by us.

Our estimate of liabilities and expenses for pensions incorporates significant assumptions, including the interest rate used to discount future liabilities and expected long-term rates of return on plan assets. Our pension contributions and expenses, results of operations, liquidity or shareholders’ equity in a particular period could be materially adversely affected by market returns that are less than the plans’ expected long-term rates of return, a decline in the rate used to discount future liabilities and changes in the currency exchange rates. If the assets of our pension plans do not achieve expected investment returns for a fiscal year, such deficiency may result in increases in pension expense. Changing economic conditions, poor pension investment returns or other factors may require us to make substantial cash contributions to the pension plans in the future, preventing the use of such cash for other purposes and adversely affecting our liquidity.

Our customers may seek to shift risk to us.

We give to and receive from our customers indemnities relating to damages caused or sustained by us in connection with our operations. Our customers’ changing views on risk allocation may cause us to accept greater risk to win new business or may result in us losing business if we are not prepared to take such risks.

We rely on the secondary used aircraft market to dispose of our older aircraft and parts due to our on-going fleet modernization efforts.

We are dependent upon the secondary used aircraft and parts market to dispose of older models of aircraft as part of our ongoing fleet modernization efforts and any spare aircraft capacity associated with the termination or non-renewal of existing contracts. If we are unable to dispose of our older aircraft and parts due to a lack of demand in the secondary market, our aircraft and part carrying costs may increase above requirements for our current operations, or we may accept lower selling prices, resulting in losses on disposition. A failure to dispose of aircraft and parts in the secondary market could impair our ability to operate our fleet efficiently and service existing contracts or win new mandates and could have a material adverse effect on our financial condition and results of operations.

We are subject to extensive environmental, health and safety laws, rules and regulations, which may have an adverse impact on our business.

Our operations, including aircraft maintenance and aircraft fueling, involve the use, handling, storage and disposal of materials that may be classified as hazardous to human health and safety and to the environment. Laws protecting the environment have become more stringent in recent years and may, in certain circumstances, impose liability for the investigation and cleanup of releases of regulated materials and related environmental damage without regard to negligence or fault. These laws also may expose us to liability for the conduct of, or conditions caused by, others such as historic spills of regulated materials at our facilities, for acts that were in compliance with all applicable laws at the time such acts were performed, and for contamination at third-party sites where substances were sent for off-site treatment or disposal. Additionally, any failure by us to comply with applicable environmental, health and safety or planning laws and regulations may result in governmental authorities or other third parties taking action against our business that could adversely impact our operations and financial condition, including the:

•

issuance of administrative, civil and criminal penalties;

•

denial or revocation of permits or other authorizations;

•

imposition of limitations on our operations; and

•

performance of site investigatory, remedial or other corrective actions.

We cannot predict the likelihood of change to any of these laws or in their enforcement nor the impact that any such change, or any discovery of previously unknown conditions, may have on our costs and financial position.

Our business in countries with a history of corruption and transactions with foreign governments increases the compliance risks associated with our international activities.

Our international operations could expose us to trade and economic sanctions or other restrictions imposed by the United States or other governments or organizations. The U.S. Department of Justice (“DOJ”), and other federal agencies and authorities have a broad range of civil and criminal penalties they may seek to impose against corporations and individuals for violations of trading sanctions laws, the Foreign Corrupt Practices Act (“FCPA”) and other federal statutes. Under trading sanctions laws, the government may seek to impose modifications to business practices, including cessation of business activities in sanctioned countries, and modifications to compliance programs, which may increase compliance costs, and may subject us to fines, penalties and other sanctions. If any of the risks described above materialize, it could adversely impact our operating results and financial condition.

These laws also prohibit improper payments or offers of payments to foreign governments and their officials and political parties for the purpose of obtaining or retaining business. We have operations, deal with government entities and have contracts in countries known to experience corruption. Our activities in these countries create the risk of unauthorized payments or offers of payments by one of our employees, consultants, sales agents or associates that could be in violation of various laws including the FCPA, even though these parties are not always subject to our control. Our existing safeguards and procedures may prove to be less than fully effective, and our employees, consultants, sales agents or associates may engage in conduct for which we may be held responsible. Violations of the FCPA may result in severe criminal or civil sanctions, and we may be subject to other liabilities, which could negatively affect our business, operating results and financial condition.

In addition, from time to time, the Company and its subsidiaries are subject to investigation by various government agencies in the jurisdictions in which we operate. In 2006, we voluntarily disclosed to the U.S. Office of Foreign Asset Control (“OFAC”) that our subsidiary formerly operating as Schreiner Airways may have violated applicable U.S. laws and regulations by re-exporting to Iran, Sudan, and Libya certain helicopters, related parts, map data, operation and maintenance manuals, and aircraft parts for third-party customers. OFAC’s investigation is ongoing and the Company continues to fully cooperate. Should the U.S. government determine that these activities violated applicable laws and regulations, we or our subsidiaries could be subject to civil or criminal penalties, including fines and/or suspension of the privilege to engage in trading activities involving goods, software and technology subject to the U.S. jurisdiction. At April 30, 2012, it is not possible to determine the outcome of this matter, or the significance, if any, to our business, financial condition and result of operations.

Our customers are primarily in the oil and gas industry and, as a result, changes in the economic and industry conditions may expose us to additional credit risk.

The majority of our customers are engaged in oil and gas production and exploration. For the fiscal year ended April 30, 2012, revenue generated by helicopter transportation services from oil and gas customers represented approximately 79% of our total revenues. This concentration may impact the overall exposure to credit risk because changes in economic and industry conditions that adversely affect the oil and gas industry could affect the majority of our customers. We generally do not require letters of credit or other collateral to support our trade receivables. Accordingly, a sudden or protracted downturn in the economic conditions of the oil and gas industry could adversely impact our ability to collect our receivables and thus, impact our financial condition.

We are subject to many different forms of taxation in various jurisdictions throughout the world, which may lead to disagreements with tax authorities regarding the application of tax law.

We are subject to many different forms of taxation including, but not limited to, income tax, withholding tax, commodity tax and social security and other payroll-related taxes. Tax law and administration is extremely complex and often requires us to make subjective determinations. The tax authorities in the various jurisdictions where we carry on business may not agree with the determinations that are made by us with respect to the application of tax law. Such disagreements could result in lengthy legal disputes and, ultimately, in the payment of substantial funds to the government authorities of the jurisdictions where we carry on business or provide goods or services, which could have a material effect on our results of operations.

Our estimate of tax related assets, liabilities, recoveries and expenses incorporates significant assumptions. These assumptions include, but are not limited to, the tax laws in various jurisdictions, the effect of tax treaties between jurisdictions, taxable income projections, and the benefits of various restructuring plans. To the extent that such assumptions differ from actual results, we may have to record additional income tax expenses and liabilities.

Failure to develop or implement new technology and disruption to our systems could affect the results of our operations.

Many of the aircraft we operate are characterized by changing technology, introductions and enhancements of models of aircraft and services and shifting customer demands, including technology preferences. Our future growth and financial performance will depend in part upon our ability to develop, market and integrate new services and to accommodate the latest technological advances and customer preferences. In addition, the introduction of new technologies or services which compete with our services may result in our revenues decreasing over time. If we are unable to upgrade our operations with the latest technological advances in a timely manner, or at all, our business, financial condition and results of operations could suffer. Any disruption to computer, communication systems or other technical equipment used by us and our fleet could significantly impair our ability to operate our business efficiently and could have a material adverse effect on our financial condition and results of operations.

Reductions in spending on helicopter services by government agencies could lead to modifications of SAR and EMS contract terms or delays in receiving payments which could adversely impact our business, financial condition and results of operations.

We receive significant revenue from government agencies in Ireland, the UK and Australia. Any reductions in the budgets of government agencies for spending on helicopter services, implementations of cost savings measures by government agencies, imposed modifications of contract terms or delays in collecting receivables owed to us by our government agency customers could have an adverse effect on our business, results of operations and financial condition.

In addition, there are inherent risks in contracting with government agencies. Applicable laws and regulations in the countries in which we operate may enable our government agency customers to (i) terminate contracts for convenience, (ii) reduce, modify or cancel contracts or subcontracts if requirements or budgetary constraints change, or (iii) terminate contracts or adjust their terms.

We are controlled by our sponsor, which may have interests that conflict with ours.

We are controlled by First Reserve, which can determine the outcome of matters to be decided by our shareholders. Circumstances may occur in which the interests of First Reserve could be in conflict with our interests. For example, First Reserve is in the business of making investments in companies and may from time to time in the future acquire interests in businesses that directly or indirectly compete with certain portions of our business or are suppliers or customers of ours. Further, if First Reserve pursues such acquisitions or makes further investments in our industry, those acquisitions and investment opportunities may not be available to us. So long as First Reserve continues to directly or indirectly own a significant amount of our equity, even if such amount is less than 50%, it will continue to be able to influence our decisions.

If our Norwegian operating subsidiaries incur substantial losses, they may be subject to liquidation under Norwegian law.

The corporate laws under which our Norwegian subsidiaries operate differ from Canadian and U.S. laws in a number of areas, including with respect to corporate liquidation. Under Norwegian law, if the losses of any of the Norwegian subsidiaries reduce that subsidiary’s equity to an amount assumed to be less than 50% of its share capital or the equity of the subsidiary is assumed inadequate compared to the risks and the size of the subsidiary’s business, the directors of the subsidiary would be obligated by law to convene a general shareholders’ meeting to resolve to balance the amount of such equity and share capital by either:

•

increasing the equity in an amount sufficient to achieve such balance and to ensure that the equity of the subsidiary becomes adequate compared to the risks and the size of the subsidiary’s business; or

•

reducing the share capital to pay off losses in an amount sufficient to achieve such balance.

To the extent reductions in the share capital of the Norwegian subsidiaries are substantial and if no appropriate resolutions are made, they could ultimately result in liquidation, which could have a material adverse effect on our business, financial condition and results of operations.

Our MRO business, Heli-One, could suffer if licenses issued by the OEMs are not renewed or we cannot obtain additional licenses.

Our MRO business, Heli-One, receives a significant portion of its third party revenue from activities that require licenses from the OEMs. To grow the Heli-One business we may require additional licenses, which we cannot guarantee we will be able to obtain from the OEMs or obtain on acceptable terms. Furthermore, our MRO business could decline if existing licenses are revoked or cannot be renewed upon the expiry of existing terms.

Item 1B.

Unresolved staff comments

None.

Item 2.

Properties

The principal properties from which we now conduct our operations are:

Location

Operations

Buildings
(Sq. Feet)

Owned or Leased

Land

Buildings

Richmond, British Columbia, Canada

Corporate Headquarters

80,000

Leased

Owned

Delta, British Columbia, Canada

Headquarters for MRO Segment

240,000

Leased

Aberdeen, Scotland

CHC Scotia Limited; Helicopter Services

42,000

Leased

CHC Scotia Limited; Terminal Building

25,000

Leased

Owned

Stavanger, Norway

CHC Norway AS; Helicopter Services

199,000

Leased

Owned

Heli-One Norway AS Headquarters; MRO Segment

179,000

Leased

Owned

Fort Collins, Colorado

Heli-One American Support, LLC

80,000

Leased

Hoofddorp, The Netherlands

CHC Netherlands BV; Heli-One (Netherlands) BV

39,000

Leased

Bergen, Norway

CHC Norway AS

66,000

Leased

Owned

Den Helder, The Netherlands

CHC Helicopter Netherlands BV; Helicopter Services

56,000

Owned

Perth, Australia

CHC Australia Headquarters

7,400

Leased

Fort Worth, Texas

CHC Operations Centre

26,926

Leased

Item 3.

Legal proceedings

The Company and its subsidiaries are, from time to time, named as defendants in lawsuits arising in the ordinary course of our business. The Company maintains adequate insurance coverage to respond to most claims. The Company cannot predict the outcome of any such lawsuits with certainty, but management does not expect the outcome of pending or threatened legal matters to have a material adverse impact on our financial condition.

Brazilian customs authorities seized one of the Company’s helicopters (valued at approximately $10.0 million) as a result of allegations that the Company violated Brazilian customs law by failing to ensure its customs agent and the customs agent’s third party shipping company followed approved routing of the helicopter during transport. The Company secured release of the helicopter and is disputing through administrative court action any claim for penalties associated with the seizure and the alleged violation. The Company has preserved its rights by filing a civil action against its customs agent for any losses that may result. At April 30, 2012, it is not possible to determine the outcome of this matter, or the significance, if any, to our business, financial condition and result of operations.

Our Brazilian subsidiary is disputing a claim from the Brazilian tax authorities regarding eligibility for certain tax benefits that our subsidiary claimed in the past in connection with the importation of aircraft parts. The tax authorities are seeking to assess up to $20 million in additional taxes plus interest and penalties. We believe that, based on our interpretation of tax legislation and well established aviation industry practice, we are in compliance with all applicable tax legislation. On December 19, 2011, a First Level Administrative Panel decision reduced the assessment to $0.3 million. We are appealing the remaining assessment. We will continue to defend this claim vigorously. At April 30, 2012, it is not possible to determine the outcome of this matter, or the significance, if any, to our business, financial condition and result of operations.

Our Brazilian subsidiary is also disputing claims from the Brazilian tax authorities that it was not entitled to certain credits in 2004 and 2007. The tax authorities are seeking up to $3.8 million in additional taxes plus interest and penalties. We believe that based on our interpretation of tax legislation and well established aviation industry practice we are in compliance with all applicable tax legislation and plan to defend this claim vigorously. At April 30, 2012, it is not possible to determine the outcome of this matter, or the significance, if any, to our business, financial condition and result of operations.

We received an inquiry from the Nigerian government regarding the tax treatment of certain of its former joint venture partner’s operations in Nigeria. We are cooperating with the government of Nigeria. At April 30, 2012, it is not possible to determine the outcome of this matter, or the significance, if any, to our business, financial condition and result of operations.

In the United Kingdom, the Ministry for Transport is investigating potential wrongdoing involving two ex-employees in conjunction with the SAR-H bid award processes. This arose after we self-reported potential improprieties by these individuals upon our discovery of such potential improprieties in 2010. The SAR-H bid process was subsequently cancelled. We will continue to cooperate in all aspects of the investigation. At April 30, 2012, it is not possible to determine the outcome of this matter, or the significance, if any, to our business, financial condition and result of operations.

Item 4.

Mine Safety Disclosures

None.

PART II

Item 5.

Market for registrant’s common equity, related stockholder matters and issuer purchases of equity securities

Market Information and Holders

The Company is a privately held company and there is no established public trading market for its equity. The Company is a wholly-owned subsidiary of CHC Helicopter Holding S.à r.l. Please see Item 12 “Security ownership of certain beneficial owners and management and related stockholder matters” below.

Dividend Policy

During fiscal years 2012, 2011 and 2010, no dividends were paid to our sole stockholder.

Equity Compensation Plan Information

The following table sets forth, as of April 30, 2012, the number of shares of 6922767 Holding S.à r.l. (our indirect parent entity) capital stock that may be issued upon the exercise of outstanding options issued under equity compensation plans, the weighted average exercise price of those options and the number of shares of 6922767 Holding S.à r.l. capital stock remaining available for future issuance under equity compensation plans:


Plan Category	Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) (#)		Weighted-average exercise price of outstanding options, warrants and rights (b) ($)		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)) (c)
Equity compensation plans approved by security holders		116,258,676		0.6515		21,651,644

Equity compensation plans not approved by security holders		—		—		—

Total		116,258,676		0.6515		21,651,644

Recent Sales of Unregistered Securities

On October 14, 2011, November 2, 2011 and February 9, 2012, 6922767 Holding (Cayman) Inc. (our indirect parent entity) issued Ordinary A shares in the amount of 72,289,157, 24,096,386 and 24,096,386 on each respective date to Horizon Alpha Limited for total cash consideration of $100.0 million.

Item 6.

Selected financial data

The selected financial data set forth below should be read in conjunction with the Company’s consolidated financial statements and related notes and Item 7 “Management’s discussion and analysis of financial condition and results of operations” included elsewhere in this Annual Report on Form 10-K.

The following table sets forth summary historical consolidated financial data of the Predecessor and the Successor for the periods indicated. See “Basis of Presentation” above. 6922767 Holding S.à r.l., the Successor, was incorporated on February 20, 2008 under the laws of Luxembourg and is a private limited liability company (Société à responsabilité limitée) (S.à r.l.) whose sole purpose was to acquire CHC Helicopter Corporation, the Predecessor. The Company completed its acquisition of the Predecessor on September 16, 2008 and has included the results of operations of the entity formerly known as CHC Helicopter Corporation from September 16, 2008 to April 30, 2009 in its audited consolidated financial statements for the fiscal 2009 year. In addition to the operating results of the entity formerly known as CHC Helicopter Corporation, the Company’s results of operations also include organizational expenses and losses from May 1, 2008 up to the date of the acquisition. The acquisition of CHC Helicopter Corporation was accounted for using the purchase method of accounting and the application of the purchase method of accounting requires the allocation of the acquisition purchase price to the tangible and intangible assets acquired and liabilities assumed based on their respective fair values as of the date of the acquisition. Accordingly, the Predecessor period from May 1, 2008 to September 15, 2008 and the Successor period from May 1, 2008 to April 30, 2009 have a different basis of accounting. The comparability of the financial information presented below for the Predecessor and Successor periods has been impacted by the application of the acquisition accounting.

The selected Successor’s consolidated statements of operations for the years ended April 30, 2012, 2011 and 2010 and the Successor’s balance sheet data as of April 30, 2012 and 2011 have been derived from the audited financial statements included elsewhere in this Annual Report on Form 10-K. The selected Successor’s consolidated statement of operations for the year ended April 30, 2009 and the selected balance sheet data as of April 30, 2010 and 2009 are derived from the audited financial statements, which are not included in this Annual Report on Form 10-K. The selected Predecessor’s consolidated statement of operations for the period from May 1, 2008 to September 15, 2008 and for the year ended April 30, 2008 and the selected Predecessor’s balance sheet data as of April 30, 2008 are derived from the audited financial statements, which are not included in this Annual Report on Form 10-K. Our historical operating results are not necessarily indicative of future operating results.


	Successor												Predecessor
	For the year ended April 30,									(i)			For the period from May 1, 2008 to September 15, (i)			For the year ended April 30, (i)
(in thousands of U.S. dollars)	2012			2011			2010			2009			2008			2008


Operating data:

Revenue	$	1,692,539		$	1,445,460		$	1,313,566		$	761,895		$	510,090		$	1,252,956

Direct Costs		(1,381,900	)		(1,211,680	)		(1,029,882	)		(612,428	)		(446,823	)		(1,056,715	)

Earnings (loss) from equity accounted investees		2,844			2,159			1,436			1,118			311			(327	)

General and administration costs		(69,590	)		(65,391	)		(61,157	)		(26,910	)		(12,479	)		(34,512	)

Amortization		(112,967	)		(99,625	)		(77,738	)		(51,978	)		(46,816	)		(77,438	)

Restructuring costs		(22,511	)		(4,751	)		(4,855	)		(5,568	)		(15	)		—

Recovery (impairment) of receivables and funded residual value guarantees		272			(1,919	)		(13,266	)		(19,900	)		(38,300	)		—

Impairment of intangible assets		(4,218	)		(20,608	)		(53,903	)		(25,000	)		—			—

Impairment of property and equipment		—			—			(36,240	)		—			—			—

Impairment of assets held for sale		(13,469	)		(5,239	)		(26,585	)		(4,900	)		(13,300	)		(7,400	)

Gain (loss) on disposal of assets		8,169			7,193			(2,686	)		1,346			545			(724	)

Goodwill impairment charge		—			—			—			(639,187	)		—			—


Operating Income (loss)		99,169			45,599			8,690			(621,512	)		(46,787	)		75,840

Financing charges		(129,845	)		(140,582	)		(74,459	)		(91,822	)		(14,027	)		(72,465	)


Earnings (loss) from continuing operations before income tax		(30,676	)		(94,983	)		(65,769	)		(713,334	)		(60,814	)		3,375

Income tax recovery (provision)		(48,217	)		32,916			(9,297	)		9,204			3,521			(5,175	)


Loss from continuing operations		(78,893	)		(62,067	)		(75,066	)		(704,130	)		(57,293	)		(1,800	)

Earnings (loss) from discontinued operations, net of tax		(16,107	)		(3,202	)		(1,436	)		(380	)		114			16,004


Net earnings (loss)	$	(95,000	)	$	(65,269	)	$	(76,502	)	$	(704,510	)	$	(57,179	)	$	14,204


Net earnings (loss) attributable to the Company	$	(107,422	)	$	(70,338	)	$	(70,607	)	$	(691,222	)	$	(57,179	)	$	14,204

Net earnings (loss) attributable to Non-controlling interest		12,422			5,069			(5,895	)		(13,288	)		—			—


Net earnings (loss)	$	(95,000	)	$	(65,269	)	$	(76,502	)	$	(704,510	)	$	(57,179	)	$	14,204

Other financial data:

Ratio of earnings to fixed charges (ii)		(1	)		(2	)		(3	)		(4	)		(5	)		(6	)


	Successor												Predecessor
	As at April 30,												As at September 15,			As at April 30,
(in thousands of U.S. dollars)	2012			2011			2010			2009 (i)			2008 (i)			2008 (i)

Balance sheet data:

Cash and cash equivalents	$	55,547		$	68,921		$	174,690		$	199,267						71,733

Total assets		2,715,982			2,788,155			2,587,769			2,572,789						2,364,010

Total long-term debt and capital lease obligations (iii)		1,287,080			1,291,486			1,071,159			1,075,970						945,205

Total liabilities		2,053,515			2,040,792			1,920,293			1,816,772						1,918,531

Capital stock		1,607,101			1,547,101			1,546,955			19						179,803

Shareholder’s equity	$	660,792			744,276			692,503			756,017						445,479

(i)	See “Basis of Presentation” above for a further discussion of the Predecessor and Successor periods.

(ii)

Earnings (loss) represent (a) pre-tax income (loss) from continuing operations before adjustment for earnings (loss) from equity accounted investees; (b) fixed charges; (c) amortization of capitalized interest; and (d) distributed income of equity accounted investees; less (e) interest capitalized. Fixed charges represent (a) interest expensed and capitalized, (b) amortized discounts and capitalized expenses related to indebtedness, and (c) an estimate of the interest within rental expense.

(1) Earnings were insufficient to cover fixed charges by $35.5 million for the year ended April 30, 2012.

(2) Earnings were insufficient to cover fixed charges by $97.1 million for the year ended April 30, 2011.

(3) Earnings were insufficient to cover fixed charges by $65.9 million for the year ended April 30, 2010.

(4) Earnings were insufficient to cover fixed charges by $714.5 million for the year ended April 30, 2009.

(5) Earnings were insufficient to cover fixed charges by $61.1 million for the period from May 1, 2008 to September 15, 2008.

(6) Earnings were insufficient to cover fixed charges by $4.6 million for the year ended April 30, 2008.

(iii)

Total long-term debt and capital lease obligations is presented net of the discount on the senior secured notes and excludes a facility secured by accounts receivables. As of April 30, 2012, the facility secured by accounts receivables had a balance of $45.6 million (April 30, 2011—$21.6 million).

Item 7.

Management’s discussion and analysis of financial condition and results of operations

This management’s discussion and analysis of financial condition and results of operations (“MD&A”) is intended to provide an understanding of our results of operations, financial condition and where appropriate, factors that may affect future performance. The following discussion of our results of operations and financial condition should be read in conjunction with the “Selected Historical Consolidated Financial Data” and our audited consolidated financial statements and related notes thereto included elsewhere in this Annual Report on Form 10-K. The following discussions include forward-looking statements that involve certain risks and uncertainties, including those identified under “Item 1A. Risk Factors” elsewhere in this Annual Report on Form 10-K. Our actual results could differ materially from those discussed in these forward-looking statements. See “Cautionary Note Regarding Forward-Looking Statements and Other Industry and Market Data” elsewhere in this Annual Report on Form 10-K.

This MD&A also contains non-GAAP financial measures, segment earnings before interest, taxes, depreciation, amortization and aircraft lease rent and associated costs (“segment EBITDAR (adjusted)”) and Adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) that are not required by, or presented in accordance with GAAP. 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.

We have chosen to include segment EBITDAR (adjusted) as we consider this measure to be a significant indicator of our financial performance and use this measure to assist us in allocating available capital resources. Segment EBITDAR (adjusted), which is defined as earnings before interest, taxes, depreciation, amortization and aircraft lease and associated costs or total segment revenue plus earnings from equity accounted investees less direct costs excluding aircraft lease and associated costs and general and administration expenses. Segment EBITDAR (adjusted) also excludes restructuring costs, recovery (impairment) of receivables and funded residual value guarantees, impairment of intangible assets, impairment of property and equipment, impairment of assets held for sale, gain (loss) on disposal of assets and goodwill impairment if any. These items are significant components to understanding and assessing financial performance and liquidity. For additional information about the Company’s segment revenue and segment EBITDAR (adjusted), including a reconciliation of these measures to its consolidated financial statements, see Note 27 of the audited annual consolidated financial statements for the fiscal year ended April 30, 2012 included elsewhere in this Annual Report on Form 10-K.

We have also chosen to include Adjusted EBITDA as it provides useful information to investors as a measure to calculate certain financial covenants related to our revolving credit facility and certain covenants in the indenture. Adjusted EBITDA has limitations and should not be considered as discretionary cash available to us to reinvest in the growth of our business or a measure of cash that will be available to meet our obligations.

Overview of Business

We are a world leading commercial operator of medium and heavy helicopters, providing mission-critical services to the offshore oil and gas industry and SAR and EMS to government agencies. We believe the services we provide to the oil and gas industry are critical for the continued production of hydrocarbons from existing offshore oil and gas platforms and the exploration and development of new oil fields, while our SAR and EMS are crucial for saving lives. In addition, our MRO segment, Heli-One is a world leading commercial provider of helicopter support services, with offerings that include MRO, integrated logistics support, and the complete outsourcing of all maintenance activities for helicopter operators. Heli-One services our own flight operations as well as third party customers around the world.

Through our subsidiaries and Predecessor companies, we have been providing helicopter services for over 60 years, covering most major offshore oil and gas producing regions of the world. Our major operations are in Norway, the United Kingdom, Ireland, the Netherlands, Australia, Brazil, Canada, and Africa. The Company earns the majority of its revenue from helicopter transportation services for the oil and gas industry, SAR and EMS activities and MRO services.

This MD&A provides certain financial and related information about our segments and also about our products and services, the geographic areas in which we operate and our major customers. Our objective is to provide information about the different types of business activities in which we engage and the different economic environments in which we operate in order to help users of our consolidated financial statements (i) better understand our performance, (ii) better assess our prospects for future net cash flows and (iii) make more informed judgments about us as a whole.

Segments

We operate under two operating segments and have a corporate and other segment comprised primarily of general and administration costs and the costs related to managing the fleet of aircraft.

The two operating segments are as follows:

Helicopter Services:

•

Helicopter Services consists of flying operations in the Eastern North Sea, Western North Sea, the Americas, the Australasia region and the Africa-Euro Asia region serving the offshore oil and gas, SAR, EMS and other industries. The Eastern North Sea is comprised mainly of Norway while the Western North Sea includes the United Kingdom, Ireland, the Netherlands and Denmark. The Americas is comprised of Brazil and North and South American countries. The Australasia region includes Australia and Southeast Asian countries and the Africa-Euro Asia region includes Nigeria, Kazakhstan, Turkey, Mozambique, Tanzania and other African and European countries.

MRO:

•

The MRO segment includes helicopter repair and overhaul facilities in Norway, Canada, Australia and the United States, providing helicopter repair and overhaul services for our fleet and for a growing external customer base in Europe, Asia and North America.

Market Outlook

Oil and gas production customers are the principle source of our revenue, while exploration and development customers provide a lesser portion of our revenue. The production business is typically less cyclical than the exploration and development business because the production platforms remain in place over the long-term and are relatively unaffected by economic cycles, as the marginal cost of lifting a barrel of oil once the platform is in position is low. Our customers typically base their capital expenditure budgets on their long-term commodity price expectations and not exclusively on the current spot price. In 2009 and 2010, the credit, equity and commodity markets experienced significant volatility, causing many of our oil and gas company customers to reduce capital spending plans and defer projects.

Our MRO business is subject to economic cycles. Although aircraft maintenance is mandatory, during difficult economic times, such as those experienced since 2008, many of our customers cut maintenance expenditures by reducing flying hours and deferring certain expenditures.

In 2011 and 2012 to date, we have seen growing confidence amongst our customers, which has led to increased spending and recovery in our fiscal 2012 financial performance. We are cautiously optimistic this recovery will continue. We are continuing to see growth in the offshore production as new technology has allowed oil and gas companies to continue exploration and drilling farther offshore. To remain competitive and to service existing and new contracts in this industry, older aircraft in the fleet must be replaced with new aircraft technology to meet customers’ changing demands. The industry is constrained by the pace at which it renews its fleet due to the limited supply of new technology aircraft and the secondary market for aircraft resales. To address these constraints, we have continued to focus on the reduction of our idle aircraft and have continued efforts to secure commitments to obtain new technology aircraft to support our future growth.

During the year, we entered into a commitment to acquire 20 Eurocopter EC225s, new technology aircraft. Subsequent to year end, we entered into a commitment to purchase 10 AugustaWestland AW139s with options for an additional 16 aircraft and exercised an option to acquire an additional two Eurocopter EC225s for a total commitment of 22 Eurocopter EC225s. The delivery of these aircraft will begin in fiscal 2013 and will continue through to fiscal 2017. These aircraft will be purchased outright or financed through leases. In addition to the limited supply of new aircraft, the secondary market for the sale of aircraft is improving, providing an additional source of capital for new aircraft purchases and lease buyouts.

Australia, Brazil and certain countries in the Africa-Euro Asia region continue to be important growth areas for us due to an increase in oil and gas activity. As the part of the broad transformation initiatives, we have reviewed key processes and systems used at the bases to further create efficiencies.

Heli-One, our MRO operation is continuing to grow its third party business with additional contract wins in Mexico, Brazil and Thailand. To further support the growth of the MRO business and expand our global footprint, we have opened an additional MRO facility in Poland and will be expanding to Brazil in fiscal 2013. The MRO operation is also reviewing its global inventory management processes and implementing a number of lean process techniques to continue to drive efficiencies in the workshops.

We conduct our business in various foreign jurisdictions, and as such, our cash flows and earnings are subject to fluctuations and related risks from changes in foreign currency exchange rates. Throughout fiscal year 2012, our primary foreign currency exposures were related to the Canadian dollar, the Euro, the British pound sterling, Norwegian Kroner and the Australian dollar. For details on this exposure and the related impact on our results of operations, see Item 7A “Quantitative and qualitative disclosures about market risk” included elsewhere in this Annual Report on Form 10-K.

To further support our profit growth, we are continuing with our broad transformation program. The program includes transformative thinking and technology to achieve cost efficiencies through the global standardization of processes and restructuring of the organization to allow us to continue to reshape our earnings and cash flows. Together, these qualities allow us to maximize our value proposition to our customers – allowing them to go further, do more, and come home safely. The transformation program looks at all major aspects of our operations and includes a number of work streams, each including a multitude of initiatives:

1.	Overhead transformation – redesign the organization structure of all indirect functions and improve and streamline global processes for support;

2.	Base transformations – reengineer the entire operations at all 60 bases to share operational best practices around the world;

3.	Optimizing contract profitability – attempting to capture full revenue and profit from every flying contract globally;

4.	MRO productivity improvement – dramatically increase MRO efficiency and reduce cost and inventory levels through lean processes and other techniques;

5.	Overhauling the business management systems – launch a global key leading performance indicator dashboard to provide headlights on business performance; and

6.	Overall project management – deploy central project management and analytical resources to assist business teams on various work streams.

For the fiscal year ended April 30, 2012, in connection with our transformation program, we incurred consulting fees and severance and termination costs totaling $22.5 million.

The transformation program is progressing in accordance with our plan as we continue to consolidate, standardize and enhance our capabilities, tools, processes and systems. As of April 30, 2012, we had achieved milestones including the standardization of key performance indicators, detailed reviews of operations in key bases in the Western North Sea and Australia and the opening of our centralized Helicopter Services operations center in Fort Worth, Texas. We are proceeding with our plans to implement global systems to enhance operations such as pilot and line maintenance scheduling, install a global MRO software system, and the roll-out of standardized base operating procedures. In addition to these work streams, we will continue our review of contract profitability to optimize operating results.

Fleet

As of April 30, 2012, our fleet was comprised of the following aircraft:


Aircraft Type	Total		Owned		Leased
Medium
Sikorsky S76C+		22		11		11
Sikorsky S76C++		23		3		20
Sikorsky S76A/B/C		29		26		3
Eurocopter EC135/145/155		6		1		5
Eurocopter AS365 Series		14		6		8
Bell 412		13		7		6
Bell 212/214		1		1		—
Agusta AW139		29		3		26

		137		58		79
Heavy
Eurocopter Super Puma series (i)		45		18		27
Eurocopter EC225		29		2		27
Sikorsky S92A (i)		33		2		31
Sikorsky S61N		6		6		—

		113		28		85
Total Helicopters		250		86		164
Fixed Wing		2		2		—

Total Aircraft		252		88		164

(i)	Below is a summary of aircraft under capital lease, which are classified above as owned aircraft:


Eurocopter Super Puma Series			1
Sikorsky S92A			1

RESULTS OF OPERATIONS

The Fiscal Year Ended April 30, 2012 Compared to the Fiscal Year Ended April 30, 2011


Consolidated Results Summary For the fiscal year ended April 30, (in thousands of U.S. dollars)
	2012			2011			Favorable (Unfavorable)
	2012			2011			$ Change			% Change
Helicopter Services (i)	$	1,520,223		$	1,311,983		$	208,240			15.9	%
MRO		166,479			129,222			37,257			28.8	%
Corporate and other		5,837			4,255			1,582			37.2	%

Total revenue		1,692,539			1,445,460			247,079			17.1	%

Direct costs (ii)		(1,205,215	)		(1,046,852	)		(158,363	)		-15.1	%
Aircraft lease and associated costs		(176,685	)		(164,828	)		(11,857	)		-7.2	%

Total direct costs	$	(1,381,900	)	$	(1,211,680	)	$	(170,220	)		-14.0	%

Flying hours (unaudited)		172,145			163,884			8,261			5.0	%
# of aircraft (unaudited)		252			263			(11	)		-4.2	%

(i)	Includes revenue from the customer reimbursement of fuel costs of $91.1 million for the fiscal year ended April 30, 2012 and $66.7 million for the fiscal year ended April 30, 2011.

(ii)	Includes $92.5 million in fuel costs for the fiscal year ended April 30, 2012 and $67.3 million for the fiscal year ended April 30, 2011.

Consolidated Results of Operations

Revenue

Revenue increased by $247.1 million to $1,692.5 million compared to fiscal 2011. Helicopter Services revenue increased by $208.2 million, due primarily to new flying contracts with increased flying hours in the Americas and Australasia and a significant increase in ad hoc flying hours in the Eastern and Western North Sea. Africa-Euro Asia’s revenues have also increased due to new flying contracts in fiscal 2012. The Americas contributed an additional $65.2 million in revenues, due primarily to new contracts for two new heavy helicopters in Brazil, partially offset by the expiry of some short-term contracts. In addition, there was a new short-term contract for two heavy helicopters in the Falkland Islands that began flying in July 2011. Australasia contributed an additional $59.7 million due primarily to a new contract that began in April 2011 in Australia, as all aircraft were deployed under the contract combined with an increase in the flight hours under this contract. As this contract also earns revenues based on the number of hours flown, the increase in flying hours generated greater revenues in fiscal 2012. The revenue increases in Australia were partially offset by a decrease in Southeast Asia from lost contracts and reduced flying hours. The Western North Sea contributed additional revenues of $34.2 million, due primarily to an increase in oil and gas activity in Scotland, England and the Netherlands that allowed aircraft from lost contracts to be redeployed to ad hoc flying contracts resulting in a significant increase in flying hours in fiscal 2012. The Eastern North Sea contributed an additional $34.8 million, due primarily to an increase in oil and gas activity in Norway resulting in higher ad hoc flying hours. This increase was offset by the release of an off-market contract credit in fiscal 2011 for $13.5 million when the customer advised they would not be exercising a renewal option. The off-market credits were recognized on the date of acquisition and were originally valued under the assumption that the customer would exercise all optional contract renewals. The Africa-Euro Asia region’s revenue increased by $13.2 million, due primarily to Kazakhstan, Mozambique and Tanzania, as increased oil and gas activities in these areas generated new contracts with existing customers partially offset by Nigeria. Nigeria’s revenue decreased as we exited our relationship with our previous partners, resulting in a decrease to flying hours and the redeployment of aircraft to other regions. We are currently in discussions with a potential new partner in order to recommence our flying operations in Nigeria.

MRO revenue increased by $37.3 million, due primarily to an increase in non-PBH revenues, which included an increase in airframes, engine and component work. The increase in airframe, engine and component work was primarily attributable to a newly reorganized sales team, which generated new contracts.

Direct Costs


For the fiscal year ended April 30, (in thousands of U.S. dollars)
	2012			2011			Favorable (Unfavorable)
	2012			2011			$ Change			% Change

Crew costs	$	(409,212	)	$	(358,184	)	$	(51,028	)		-14.2	%
Base operations and other costs		(379,804	)		(294,187	)		(85,617	)		-29.1	%
Maintenance		(258,506	)		(240,584	)		(17,922	)		-7.4	%
Support costs		(157,693	)		(153,897	)		(3,796	)		-2.5	%


	$	(1,205,215	)	$	(1,046,852	)	$	(158,363	)		-15.1	%

Direct costs increased by $158.4 million to $1,205.2 million compared to fiscal 2011. The increase in direct costs was due primarily to an increase in crew, base operations and other costs and maintenance costs to support the growth in the flying operations and MRO.

Crew costs increased by $51.0 million to $409.2 million compared to fiscal 2011. The increase was due to the hiring of additional crew for new and existing contracts in Australia, Brazil and the Falkland Islands of $39.8 million along with $6.5 million in associated training costs. In Brazil, there was an increase of $4.7 million in salary costs for existing employees from wage increases awarded as the result of tight labor markets.

Base operations and other costs increased by $85.6 million to $379.8 million compared to fiscal 2011. Base operations and other costs also included fuel costs re-chargeable to our customers, insurance and travel. New contracts and an increase in ad hoc flying hours in Brazil, Australia, Mozambique, Tanzania, and the North Sea resulted in a cost increase of $27.3 million due to the set up costs for new bases, increased fuel costs from new aircraft and higher flying hours, accommodation costs for additional base and crew employees, and training for new base employees. Existing contracts increased base operations and other costs by $43.6 million as higher flying hours generated higher fuel costs, landing costs and base costs. In fiscal 2011, the base operations and other costs included a $10.2 million write-off of bid costs previously capitalized and the legal and consulting fees incurred in connection with the planned procurement of the UK SARH contract.

Maintenance costs increased by $17.9 million to $258.5 million compared to fiscal 2011. MRO expenses increased due primarily to higher third party activity from airframe maintenance, engine and component work attributed to a newly reorganized sales team, which has focused its efforts in these areas. MRO expenses to support the internal fleet have also increased compared to fiscal 2011 due to an increase in flying hours from new and existing contracts.

Aircraft Lease and Associated Costs

Aircraft leasing costs increased by $11.9 million to $176.7 million, due primarily to new technology aircraft additions that have higher lease costs partially offset by a number of aircraft that were converted to capital leases during fiscal 2012. We are continuing to acquire expensive new technology aircraft to meet our customers’ needs as they continue exploration and development into deeper waters. We anticipate we will continue to finance aircraft through operating leases and may make strategic decisions as required to purchase certain aircraft outright. The purchase of aircraft allows for greater jurisdictional flexibility as some lease agreements restrict the movement of aircraft to certain countries.

General and Administration Costs

General and administration costs included in the results of the Corporate and other segment increased by $4.2 million to $69.6 million compared to fiscal 2011. The increase is due primarily to information technology costs, personnel support costs and insurance costs, partially offset by a decrease in consulting and legal costs. Information technology costs increased, due primarily to costs incurred to support the new global systems implemented in connection with our broad transformation initiatives. Personnel support costs are higher than fiscal 2011 as vacant positions in the senior leadership team were filled and there was an increase in the short term incentive compensation due to improved performance during the year. Insurance expense increased due to higher reported claims for self-insured benefits in fiscal 2011. This was partially offset by a decrease in consulting and legal fees, as we incurred costs in fiscal 2011 for strategic projects and activities that we did not incur in 2012.

Amortization

Amortization expense increased by $13.3 million to $113.0 million compared to fiscal 2011, due primarily to an increase in rotables to service the new technology aircraft. Of the current year amortization expense, $66.6 million related to MRO, $7.6 million related to Helicopter Services and the remainder related to the Corporate and other segment.

Restructuring Costs

Restructuring costs increased by $17.8 million to $22.5 million compared to fiscal 2011, due primarily to consulting costs and severance costs incurred as part of the transformation program to achieve long-term cost efficiencies through the implementation of new systems and processes allowing for global standardization. Of the current year restructuring costs, $17.8 million related to the Corporate and other segment, $4.5 million related to the Helicopter Services segment, and $0.2 million related to the MRO segment.

Impairment of Assets Held For Sale

Impairment of assets held for sale increased by $8.2 million to $13.5 million compared to fiscal 2011. The increase in impairment was due primarily to older technology aircraft that are being sold to increase the mix of new aircraft technology and a building classified as held for sale. In the current year, there were more aircraft impaired compared to fiscal 2011. Of the impairment of assets held for sale for the current year, $12.5 million related to the Corporate and other segment and the remainder related to the Helicopter Services segment.

Interest on Long-Term Debt

Interest on long-term debt increased by $25.1 million to $116.6 million compared to fiscal 2011 due primarily to the recognition of a full year of interest on the senior secured notes and an increase in capital lease interest expense from the refinancing of the operating leases.

Foreign Exchange Gains (Losses)

Foreign exchange gains have decreased by $16.1 million to $1.8 million compared to fiscal 2011 from the revaluation of net liability positions denominated in U.S. dollars in entities with Norwegian Kroner and Euro functional currencies.

Other Financing Charges

Other financing charges decreased by $52.0 million to $15.1 million compared to fiscal 2011. The decrease in the financing charges resulted from costs incurred in the prior year related to the long-term debt refinancing totaling $62.4 million that did not reoccur in the current year, partially offset by an increase in the net loss on derivative financial instruments of $10.9 million. As part of the refinancing of our long-term debt, we wrote-off the unamortized transaction costs related to the previous credit facility, settled the interest rate swap and incurred fees related to the short-term amendment of the previous credit facility. Net loss on derivative financial instruments increased due to the unfavorable movements in the foreign exchange rates as compared to fiscal 2011.

Income Tax Recovery (Expense)

Income tax recovery decreased by $81.1 million to an income tax expense of $48.2 million compared to fiscal 2011. The effective tax rate for fiscal 2012 is 157.2% compared to 34.7% in fiscal 2011. The below table provides a breakdown of the items which caused the change in tax recovery between the current year and the prior year:


	Increase/(decrease) in tax recovery			Effective tax rate
Income tax recovery at April 30, 2011	$	32,916			(34.7	)%

Change in tax recovery calculated at statutory rate		(18,386	)
Rate differences in various jurisdictions		(27,408	)
Non-deductible items		28,642
Functional currency adjustments		(27,536	)
Valuation allowance		(36,410	)
Other		(34	)


Income tax expense at April 30, 2012	$	(48,217	)		157.2	%

The decrease in the income tax recovery as compared to fiscal 2011 was due primarily to an increase in the valuation allowance taken against deferred tax assets in certain jurisdictions, a decrease in rate differences in various jurisdictions, a decrease in non-deductible items and the impact of functional currency adjustments.

During the year, an adjustment was made to the opening balance of certain deferred tax assets due to a change in judgment about the realizability of these tax assets in future years that contributed to a net increase in the valuation allowance of $55.6 million. This was primarily in relation to deferred tax assets in Canada, Norway and the UK. This was offset by the reversal of certain valuation allowances in Brazil and Luxembourg. Brazil contributed to the decrease in the valuation allowance as a settlement was reached with the tax authorities that permitted interest and penalties related to certain non-income tax related liabilities to be settled using income tax losses of $20.0 million. A full valuation allowance was previously recognized against these income tax losses. In addition, we were able to reverse valuation allowances of $2.6 million representing $8.8 million of tax loss carry forwards as a result of a tax planning initiative related to Luxembourg. Also offsetting the increase was the impact of the capitalization of intercompany interest explained further below, for a net increase to the valuation allowance of $36.4 million.

Rate differences in various jurisdictions has decreased by $27.4 million as a lower proportion of our taxable profits were earned in low tax rate jurisdictions in the current year as compared to the prior year. Rate differences in various jurisdictions were impacted by an interest bearing inter- company loan that was capitalized towards the end of fiscal 2011, resulting in a reduction of interest expense in Luxembourg and interest income in Switzerland. As income in Switzerland is taxed at a comparatively low tax rate, this contributed to the decrease in rate differences in various jurisdictions. The capitalization of the loan also reduced the amount of deductible and non-deductible interest in Luxembourg and reduced the overall tax losses in this jurisdiction. As a valuation allowance was taken against deferred tax assets related to income tax losses in Luxembourg this transaction also contributed to a reduction in the valuation allowances that were taken when compared to the prior year. The capitalization of the inter-company loan also contributed to the $28.6 million decrease in non-deductible items. The income tax recovery decreased by $27.5 million due to foreign currency losses related to tax balances denominated in Norwegian Kroner, Euro and Canadian dollars in entities with a U.S. dollar functional currency.

Non-Controlling Interest

Net earnings allocated to non-controlling interest increased by $7.4 million to $12.4 million, due primarily to an increase in net earnings in EEA Helicopters Operations B.V. (“EHOB”).

Segmented Results of Operations

During fiscal 2012, the segmented results of operations were reclassified to reflect the revenues earned by the MRO segment on helicopter parts and supplies provided to Helicopter Services for use at the bases. These expenses are included as direct costs for Helicopter Services. The prior year comparatives have been reclassified to conform to the current year presentation.

Helicopter Services


For the fiscal year ended April 30, (In thousands of U.S. dollars)
							Favorable (Unfavorable)
	2012			2011			$ Change			% Change

Third party revenue	$	1,520,223		$	1,311,983		$	208,240			15.9	%
Internal revenue		7,550			7,508			42			0.6	%

Total revenue		1,527,773			1,319,491			208,282			15.8	%

Direct costs		(1,117,216	)		(951,268	)		(165,948	)		-17.4	%
Earnings from equity accounted investees		2,844			2,159			685			31.7	%

Segment EBITDAR (adjusted)	$	413,401		$	370,382		$	43,019			11.6	%

Segment EBITDAR (adjusted) Margin		27.1	%		28.1	%		-1.0	%		-3.6	%
Flight Hours (unaudited)		172,145			163,884			8,261			5.0	%
# of Aircraft (unaudited)		252			263			(11	)		-4.2	%
Aircraft lease and associated costs	$	(176,685	)	$	(164,828	)	$	(11,857	)		-7.2	%

Helicopter Services segment EBITDAR (adjusted) has increased by $43.0 million to $413.4 million compared to fiscal 2011. The increase in segment EBITDAR (adjusted) is due primarily to the Western and Eastern North Sea, Australasia, and the Americas partially offset by the Africa-Euro Asia region. The North Sea contributed an additional $28.2 million due primarily to an increase in oil and gas activities in Scotland, England and Norway, where the availability of aircraft resulted in a significant increase in ad hoc flying hours. Australasia’s increase in segment EBITDAR (adjusted) of $13.3 million is due primarily to the margins from a new contract that began in April 2011 in Australia as all aircraft have been deployed in the current year combined with an increase in flying hours during the current year and other contract wins. In the prior year, Australia’s segment EBITDAR (adjusted) was lower as costs continued to be incurred on a lost customer contract. The segment EBITDAR (adjusted) increase in Australia is offset by Southeast Asia, where costs continued to be incurred on existing contracts with a reduction in flying hours and lost contracts. America’s segment EBITDAR (adjusted) increased by $5.7 million due primarily to new contracts in Brazil and margins from a new short-term contract in the Falkland Islands. The additional revenue earned in Brazil was offset by higher crew, base and support staff costs from a tight labor market, and aircraft availability issues from the supply of parts. The company continues to review its parts management and supply chain processes to support the growth in the region. The Africa-Euro Asia region had a net decrease in segment EBITDAR (adjusted) of $2.5 million, due primarily to Nigeria, offset by an increase in Mozambique, Kazakhstan, Tanzania, and Romania. Segment EBITDAR (adjusted) increased in Mozambique, Kazakhstan, Tanzania, and Romania as there was an increase oil and gas activities that generated new contracts. Segment EBITDAR (adjusted) has decreased in Nigeria as the Company exited its relationship with its previous partners thereby resulting in a decrease in flying hours and the redeployment of aircraft to other regions. We have engaged in discussions with a potential new partner in order to recommence our flying operations in Nigeria.

MRO


For the fiscal year ended April 30, (in thousands in U.S. dollars)
							Favorable (unfavorable)
	2012			2011			$ Change			% Change

Third party revenue	$	166,479		$	129,222		$	37,257			28.8	%
Internal Revenue		275,920			238,397			37,523			15.7	%

Total Revenue		442,399			367,619			74,780			20.3	%

Direct costs		(353,485	)		(324,057	)		(29,428	)		-9.1	%

Segment EBITDAR (adjusted)	$	88,914		$	43,562		$	45,352			104.1	%

Segment EBITDAR (adjusted) Margin		20.1	%		11.8	%		8.3	%		70.3	%

MRO generates the majority of its revenue by supporting the internal flying operations and is continuing to expand its services to third parties, which represent 37.6% of the total revenues. Segment EBITDAR (adjusted) increased by $45.4 million to $88.9 million compared to fiscal 2011. In fiscal 2011, the decrease in internal revenues from lower flying hours combined with the increase in labor and materials to service the higher level of unscheduled maintenance events on the internal fleet resulted in a decrease to the segment EBITDAR (adjusted), which did not reoccur in the current year. In fiscal 2012, there has been an increase in internal revenues to support the growth in Helicopter Services and a decrease in the level of unscheduled maintenance events on the internal fleet. The higher revenues in fiscal 2012 have contributed approximately $16.8 million in additional segment EBITDAR (adjusted). The higher margins earned on these revenues resulted in a positive impact on the segment EBITDAR (adjusted) margin of 3.1%. Lower costs in the current year combined with the termination of a third party PBH contract in April 2011 that earned negative margins from a high level of unscheduled maintenance events have contributed an additional $22.0 million in segment EBITDAR (adjusted) with a positive impact on the segment EBITDAR (adjusted) margin of 4.1%. Segment EBITDAR (adjusted) also increased by $4.0 million with a positive impact on the segment EBITDAR (adjusted) margin of 0.7% as costs incurred in the prior year related to inventory write-offs and consulting costs for strategic projects did not reoccur in the current year. In the current year, cost savings from the implementation of supply chain sourcing initiatives as part of the broad transformation program and vacant support positions that were not filled earlier in the year contributed an additional $2.5 million to segment EBITDAR (adjusted). These cost savings resulted in a positive impact to the segment EBITDAR (adjusted) margin of 0.4%. The MRO business is expected to continue to reduce costs and inventory levels through the implementation of lean process techniques to drive greater efficiencies in the workshops as part of the broad transformation program.

The Fiscal Year Ended April 30, 2011 Compared to the Fiscal Year Ended April 30, 2010

Consolidated Results of Operations


For the year ended April 30, (in thousands of U.S. dollars)
							Favorable (Unfavorable)
	2011			2010			$ Change			% Change
Helicopter services (i)	$	1,311,983		$	1,186,898		$	125,085			10.5	%
MRO		129,222			112,470			16,752			14.9	%
Corporate and other		4,255			14,198			(9,943	)		-70.0	%

Total revenue		1,445,460			1,313,566			131,894			10.0	%

Direct costs (ii)		(1,046,852	)		(884,810	)		(162,042	)		-18.3	%
Aircraft lease and associated costs		(164,828	)		(145,072	)		(19,756	)		-13.6	%

Total direct costs	$	(1,211,680	)	$	(1,029,882	)	$	(181,798	)		-17.7	%

Flying hours (unaudited)		163,884			174,909			(11,025	)		-6.3	%
# of aircraft (unaudited)		263			278			(15	)		-5.4	%

(i)	Includes revenue from the customer reimbursement of fuel costs of $66.7 million for the year ended April 30, 2011 and $54.3 million for the year ended April 30, 2010.

(ii)	Includes $67.3 million in fuel costs for the year ended April 30, 2011 and $55.2 million for the year ended April 30, 2010.

Revenue increased by $131.9 million to $1,445.5 million compared to fiscal 2010 due primarily to an increase in Helicopter Services of $125.1 million and MRO of $16.8 million, offset by a $10.0 million decrease in third party leasing revenues within Corporate and other. Helicopter Services’ revenue increased due primarily to new flying contracts in the Americas, the Eastern North Sea, Africa-Euro Asia and Australasia, offset by a decrease in the Western North Sea. The America’s contributed additional revenues of $54.5 million from the full year impact of a long-term contract in Brazil for nine new technology heavy aircraft. The Eastern North Sea contributed additional revenues of $47.3 million due to the full year impact of a long-term contract in Norway for twelve new technology heavy aircraft. Included in the Eastern North Sea revenues was the release of an off-market contract credit for $13.5 million which was realized in 2011 when the customer advised they would not be exercising a renewal option. The off-market credits were recognized on the date of acquisition and were originally valued under the assumption that the customer would exercise all optional contract renewals. Australasia’s revenues increased by $14.8 million due primarily to new oil and gas contracts and the start of a new long-term contract in April 2011. The increased revenues from these contracts were offset by the loss of a customer contract. Africa Euro-Asia’s revenues increased by $15.0 million due to increased oil and gas activity in Kazakhstan, Turkey and Tanzania that generated new contracts offset by a decrease in Nigeria. Nigeria’s revenue decreased by $17.0 million as the Company exited its relationship with its previous partners resulting in a decrease in flying hours and the redeployment of aircraft to other regions. Nigeria’s revenues also decreased as there was uncertainty in the collectability of the receivables that resulted in recognition of revenues on a cash basis beginning April 2010. The Western North Sea’s decrease in revenues of $6.6 million relates to lost contracts. MRO revenue has increased by $16.8 million due primarily to an increase in PBH contracts offset by a decrease in airframe revenues as there was less activity. Corporate and other, which earns incidental revenue leasing idle aircraft, has decreased due to the loss of a third party contract that has not been replaced. This resulted in the number of helicopters leased to third parties declining from twelve aircraft to six aircraft in 2011 and revenues declining accordingly.

Direct Costs


For the year ended April 30, (in thousands of U.S. dollars)
							Favorable (Unfavorable)
	2011			2010			$ Change			% Change

Crew costs	$	(358,184	)	$	(321,434	)	$	(36,750	)		-11.4	%
Base operations and other costs		(294,187	)		(210,577	)		(83,610	)		-39.7	%
Maintenance		(240,584	)		(206,566	)		(34,018	)		-16.5	%
Support costs		(153,897	)		(146,233	)		(7,664	)		-5.2	%

	$	(1,046,852	)	$	(884,810	)	$	(162,042	)		-18.3	%

Direct costs increased by $162.0 million to $1,046.9 million compared to the prior year. The increase in direct costs is due primarily to an increase in crew costs, base operations and other costs and maintenance to support the growth in the flying operations and MRO.

Crew costs increased by $36.8 million to $358.2 million compared to fiscal 2010, due primarily to the hiring of additional crew for new and existing contracts in Brazil, Australia, Kazakhstan and Norway along with associated training costs of $21.5 million. Similarly, there were salary increases for existing crew. These increases in crew costs were partially offset by a restructuring of the UK operations, resulting in a decrease to crew costs of $7.6 million. Additional increases were due primarily to wage increases in other countries and numerous other smaller variances.

Base operations and other costs increased by $83.6 million to $294.2 million compared to fiscal 2010. Base operations and other costs also included costs re-chargeable to our customers, insurance and travel. New contracts in Brazil, Australia and Kazakhstan resulted in a cost increase of $13.2 million due to the set up costs for new bases, increased fuel for the new aircraft, accommodation costs for new base and crew employees and new base employees. Existing contracts increased $42.5 million due to an increase in fuel costs, landing costs and base costs as a result of additional flying hours and increases in the pricing of the service or commodity. In fiscal 2011, the base operations and other costs included a $10.2 million write-off of bid costs previously capitalized and the legal and consulting fees incurred in connection with the planned procurement of the UK SARH contract. Additional increases were due primarily to wage increases for base employees, fuel price increases and numerous other smaller variances.

Maintenance increased by $34.0 million to $240.6 million compared to fiscal 2010. MRO expenses increased due primarily to a higher level of scheduled maintenance events on the Company’s internal fleet during fiscal 2011 and combined with a higher level of unscheduled maintenance activity on third party PBH contracts.

Aircraft Lease and Associated Costs

Aircraft leasing costs increased by $19.8 million to $164.8 million due primarily to fleet additions, the majority of which were in new technology aircraft with higher lease costs.

Earnings from Equity Accounted Investees

Earnings from equity accounted investees included in the Helicopter Services segment increased by $0.7 million to $2.2 million due primarily to an increase in earnings from Thai Aviation Services and Luchthaven Den Helder C.V.

General and Administration Costs

General and administration costs included in the Corporate and other segment increased by $4.2 million to $65.4 million compared to fiscal 2010, due primarily to an increase in consulting and legal fees.

Amortization

Amortization expense increased by $21.9 million to $99.6 million compared to fiscal 2010, due primarily to an increase in property and equipment balances. Of the fiscal 2011 amortization expense, $5.4 million related to the Helicopter Services segment, $56.2 million related to the MRO segment and $38.0 million related to the Corporate and other segment.

Restructuring Expense

In fiscal 2010, severance and termination costs related to restructuring activities in Helicopter Services and MRO were incurred, whereas in fiscal 2011, the restructuring was due to the relocation of the Australian office from Adelaide to Perth. The majority of the restructuring costs incurred during fiscal 2011 were related to severance and termination costs. Of the fiscal 2011 restructuring expense, $3.2 million related to the Helicopter Services segment, $1.4 million related to the MRO segment and the remainder with the Corporate and other segment.

Impairment of Receivables and Funded Residual Value Guarantees

Impairment of receivables and funded residual value guarantees decreased by $11.3 million to $1.9 million, due primarily to a decrease in the impairment of receivables of $9.5 million related to ACN and Heli-Van, which was recognized in fiscal 2010. The impairment of the receivables and funded residual value guarantees in fiscal 2011 related to the Corporate and other segment.

Impairment of Intangible Assets

Impairment of embedded equity, an intangible asset included in the Corporate and other segment, decreased by $33.3 million to $20.6 million compared to fiscal 2010, as aircraft values on older technology aircraft declined at a lower rate in fiscal 2011.

Impairment of Assets Held For Sale

Impairment of assets held for sale decreased by $21.3 million to $5.2 million compared to fiscal 2010. Impairment of assets held for sale related to older technology aircraft that were being sold to increase the mix of new aircraft technology. The impairment decreased as there were nine aircraft impaired compared to 26 aircraft in fiscal 2010, and the carrying value of aircraft in fiscal 2011 was lower than fiscal 2010 as an impairment loss was recognized at the end of fiscal 2010 on old technology aircraft. Of the fiscal 2011 impairment of the assets held for sale, $0.5 million related to the MRO segment and the remainder related to the Corporate and other segment.

Interest on Long-Term Debt

Interest on long-term debt increased by $21.9 million to $91.5 million compared to fiscal 2010 due primarily to the higher interest rate on the senior secured notes as compared to the senior credit facility.

Other Financing Charges

Other financing charges increased by $45.6 million to $67.0 million compared to fiscal 2010. The increase is due to the long-term debt refinancing which included a $62.4 million write-off of deferred financing fees on the senior credit facility and settlement of the interest rate swap offset by an increase in mark to market gains on the fair value of derivative instruments of $18.5 million.

Income Tax Recovery (Expense)

Income tax recovery increased by $42.2 million to $32.9 million compared to fiscal 2010. The effective tax rate for fiscal 2011 is 34.7%, as compared to 14.1% for fiscal 2010.

The decrease in the income tax expense as compared to the prior year is due primarily to a decrease in non-deductible items and functional currency adjustments, offset by an increase in rate differences in various jurisdictions and an increase in valuation allowances. The decrease in non-deductible items have reduced income tax expense by $30.1 million in fiscal 2011

compared to fiscal 2010 due primarily to an increase in the proportion of interest recorded in Norway that was considered deductible in fiscal 2011. The foreign currency adjustments have decreased income tax expense by $45.6 million in fiscal 2011 as compared to fiscal 2010 due to functional currency adjustments related to tax balances denominated in Euros, Canadian dollars and the Brazilian Real in entities with a U.S. dollar functional currency. These decreases to the income tax expense were offset by increases to income tax expense from rate differences in various jurisdictions and an increase in the valuation allowance. Rate differences in various jurisdictions increased income tax expense by $12.2 million as a lower proportion of the Company’s taxable profits were earned in jurisdictions that have low tax rates in fiscal 2011. The increase in the valuation allowance of $19.2 million in fiscal 2011 compared to fiscal 2010 results primarily from the higher level of losses made in fiscal 2011 and in particular further valuation allowances which were taken against losses in Luxembourg.

Non-Controlling Interest

Net earnings allocated to non-controlling interest increased by $11.0 million to $5.1 million due primarily to an increase in net earnings in EHOB.

Segmented Results of Operations

Helicopter Services


For the year ended April 30, (in thousands of U.S. dollars)
							Favorable (Unfavorable)
	2011			2010			$ Change			% Change

Third party revenue	$	1,311,983		$	1,186,898		$	125,085			10.5	%

Internal revenue		7,508			8,462			(954	)		-11.3	%


Total revenue		1,319,491			1,195,360			124,131			10.4	%

Direct Costs		(951,268	)		(834,351	)		(116,917	)		-14.0	%

Earnings from equity accounted investees		2,159			1,436			723			50.3	%


Segment EBITDAR (adjusted)	$	370,382		$	362,445		$	7,937			2.2	%


Segment EBITDAR (adjusted) margin		28.1	%		30.3	%		-2.2	%		-7.3	%

Flying hours (unaudited)		163,884			174,909			(11,025	)		-6.3	%

# of aircraft (unaudited)		263			278			(15	)		-5.4	%

Aircraft lease and associated costs	$	(164,828	)	$	(145,072	)	$	(19,756	)		-13.6	%

Helicopter Services segment EBITDAR (adjusted) increased by $7.9 million to $370.4 million compared to fiscal 2010. Segment EBITDAR (adjusted) for the Eastern North Sea increased by $23.4 million, due primarily to the margins from

a contract in Norway for twelve heavy aircraft that were recognized for a full year in fiscal 2011 and a $13.5 million increase in revenues for the release of an off-market contract credit, which was realized in 2011 when the customer advised they would not be exercising a renewal option. The off-market credits were recognized on the date of acquisition and were originally valued under the assumption that the customer would exercise all optional contract renewals. The Americas contributed an additional $2.6 million in segment EBITDAR (adjusted) due primarily to the margins from a new long-term contract in Brazil for nine heavy aircraft for the full year as the aircraft deployment was staggered. These increases in segment EBITDAR (adjusted) were offset by decreases in segment EBITDAR (adjusted) from the Australasia region of $18.3 million as costs continued to be incurred in Australia following a lost customer contract.

Aircraft leasing costs increased by $19.8 million to $164.8 million, due primarily to fleet additions, the majority of which were in new technology aircraft with higher lease costs.

MRO


For the year ended April 30, (in thousands of U.S. dollars)
							Favorable (Unfavorable)
	2011			2010			$ Change			% Change
Third party revenue	$	129,222		$	112,470		$	16,752			14.9	%
Internal revenue		238,397			263,085			(24,688	)		-9.4	%

Total revenue		367,619			375,555			(7,936	)		-2.1	%
Direct Costs		(324,057	)		(312,431	)		(11,626	)		-3.7	%

Segment EBITDAR (adjusted)	$	43,562		$	63,124		$	(19,562	)		-31.0	%

Segment EBITDAR (adjusted) margin		11.8	%		16.8	%		-5.0	%		-29.8	%

Segment EBITDAR (adjusted) for MRO decreased by $19.6 million to $43.6 million compared to fiscal 2010. Segment EBITDAR (adjusted) decreased in fiscal 2011 by $14.5 million due primarily to the negative margins from a third party PBH contract, which did not exist in the prior year, combined with the increase in labor and material costs from unscheduled maintenance events on the Company’s internal fleet. This resulting decrease in segment EBITDAR (adjusted) negatively impacted the segment EBITDAR (adjusted) margins by 4.0%. Segment EBITDAR (adjusted) also decreased by $4.0 million with a negative impact of 1.1% on the segment EBITDAR (adjusted) margin as costs incurred in fiscal 2011 related to inventory write-offs and consulting costs for strategic projects did not occur in fiscal 2010. The increase in direct costs have negatively impacted the segment EBITDAR (adjusted) margin in fiscal 2011 as there was insufficient incremental revenue to offset these costs.

FINANCIAL CONDITION AND SOURCES OF LIQUIDITY

Analysis of Historical Cash Flows


	For the year ended
(in thousands of U.S. dollars)	April 30, 2012			April 30, 2011			April 30, 2010

Cash provided by operating activities	$	15,601		$	42,290		$	74,300
Cash provided by (used in) financing activities		207,215			(3,005	)		22,736
Cash used in investing activities		(217,673	)		(160,755	)		(116,001	)
Effect of exchange rate changes on cash and cash equivalents		(18,517	)		15,431			853

Change in cash and cash equivalents during the period	$	(13,374	)	$	(106,039	)	$	(18,112	)

For the Fiscal Years Ended April 30, 2012 and April 30, 2011

Cash Flows Provided By Operating Activities

Cash flows provided by operating activities decreased by $26.7 million to $15.6 million compared to fiscal 2011, despite the improvements in the operational results of Helicopter Services and MRO. The improvements in operational results provided an additional $44.1 million in operating cash flows, which was more than offset by an increase in cash interest of $23.4 million, an increase in the pension contributions of $14.4 million, an increase in fees paid to finance leased aircraft of $4.4 million and unfavorable movements in working capital of $22.6 million. Cash interest increased due primarily to the higher interest rate on the senior secured notes as compared to the previous credit facilities. The increase in pension contributions was due primarily to the pension asset redemption of $7.5 million that occurred in the prior year and an increase in pension contributions. The Norwegian plan contributions increased $3.7 million due to the timing of the funding and increase in the pension obligation while the UK plan funded an additional $1.5 million in contributions. The unfavorable working capital movements are due to an increase in current receivables that have been invoiced, but are not due based on the customers’ payment terms. The increase in receivables was partially offset by an increase in accounts payable due to the timing of supplier payments at quarter end as part of cash management and liquidity initiatives. The increase in receivables aged less than 30 days was due primarily to the operational improvements in helicopter services and the MRO business, where the increased oil and gas activities and new sales teams have increased receivable balances with existing and new customers in the current year. During the period, the Company was focused on reducing the cash used in operations through initiatives in the transformation program, including a reduction of overhead costs. These initiatives were designed to create greater profitability from operations, decrease the cash conversion cycle and reduce the overhead costs required to support current and future operations.

The Company has experienced declining cash flow from operating activities, and no assurance can be given that efforts to stem this decline, including efforts to achieve greater cost efficiencies through its broad transformation program, will be effective. The business may not generate sufficient net cash from operating activities and future borrowings may not be available in amounts sufficient to enable the Company to service its debt or to fund its other liquidity needs. It is currently expected that the net cash from operating activities will, together with the Company’s ability to access financing through the revolving line of credit, other financing markets, new operating leases and proceeds from the sale of aircraft and other assets be sufficient to meet the on-going cash flow requirements, if the Company is unable to meet its debt obligations or fund other liquidity needs, alternative financing plans may need to be undertaken, such as refinancing or restructuring debt, selling assets, reducing or delaying capital investments or raising additional capital. See “Risk Factors—Our indebtedness and lease obligations could adversely affect our business and liquidity position” above and “Liquidity and Sources of Liquidity” below.

Cash Flows Used In Financing Activities

Cash flows provided by financing activities increased by $210.2 million to $207.2 million compared to fiscal 2011, due primarily to an increase in the proceeds from the issuance of share capital of $100.0 million and the securitization of accounts receivables of $52.5 million from the inclusion of two additional entities in the program and a $32.1 million increase in the revolving credit facility net of repayments of long-term debt and capital leases. In addition, cash flows provided by financing have increased as there were costs incurred in the prior year related to the refinancing of the senior credit facilities of $25.6 million that did not reoccur in the current year. The refinancing costs included the write-off of unamortized transaction costs of $41.7 million and an increase in transaction fees for the senior secured notes of $45.7 million offset by the net proceeds from the long-term debt refinancing of $61.8 million.

Cash Flows Used In Investing Activities

Cash flows used in investing activities increased by $56.9 million to $217.7 million compared to fiscal 2011, due primarily to an increase in property and equipment additions of $147.8 million, an increase in aircraft deposits net of lease inception refunds of $19.1 million and an increase in restricted cash of $17.9 million, offset by an increase in the proceeds from the disposal of property and equipment of $126.7 million. The increase in property and equipment results from the acquisition of new technology aircraft of $130.0 million combined with an increase in rotables of $14.1 million to support the new technology aircraft. Included in the aircraft additions is $97.0 million related to the buy-out of aircraft under operating leases as agreed during the 2011 lease covenant reset. During these negotiations in 2011, there were three lessors who took the opportunity as part of the covenant reset to exit the helicopter leasing market, requiring the Company to purchase these aircraft off lease in fiscal 2012. Management’s continued strategy is to primarily finance aircraft through leases and may make strategic decisions to continue to own certain of these aircraft outright for jurisdictional flexibility. Aircraft deposits increased as the Company advanced deposits for the purchase of the new technology aircraft. Restricted cash has increased as there was a delay in the payment for sold receivables as part of the accounts receivable securitization program. Proceeds on the disposal of aircraft increased due primarily to an increase in aircraft that were refinanced under sale and leaseback as part of the lease refinancing.

For the Fiscal Years Ended April 30, 2011 and April 30, 2010

Cash Flows Provided By Operating Activities

Net cash provided by operating activities decreased by $32.0 million to $42.3 million, due primarily to an increase in cash interest paid of $23.3 million and unfavorable working capital movements of $12.7 million, offset by a decrease in pension contributions of $3.8 million. The increase in cash interest paid was due to the refinancing of the Company’s senior credit facilities in October 2010 at a higher interest rate. The unfavorable working capital movements resulted in a decline in operating cash and were primarily the result of an increase in accounts receivable as the result of an increase in the receivables aged greater than 30 days due to certain new contracts in 2011 being slower in payment than existing contracts and due to increases in activity on certain existing contracts with customers that generally take more than 30 days to pay. This was partially offset by an increase in accounts payable due to delays in the timing of supplier payments around year end as the result of cash and liquidity management initiatives.

Cash Flows Used In Financing Activities

Cash flows used in financing activities increased $25.7 million to $3.0 million compared to the prior year due primarily to the decrease in cash flows from the securitization of accounts receivables, net of collections of $68.5 million, offset by a decrease in the redemption of ordinary shares of $20.0 million and an increase in the net proceeds from long-term debt. In October 2010, the Company refinanced its long-term debt by repaying the $1.02 billion senior credit facilities with the cash proceeds generated from the issuance of senior secured notes (“notes”) of $1.08 billion and entered into a new revolving credit facility agreement. As part of the long-term debt refinancing, the Company settled the interest rate swap related to the senior credit facilities for $45.7 million and paid $42.7 million in transaction costs to complete the issuance of the senior secured notes and the new revolving credit facility. The transaction costs are being amortized over the respective terms of the long-term debt obligations and resulted in a net cash outflow for financing activities in fiscal 2011.

Cash Flows Used In Investing Activities

Cash flows used in investing activities increased by $44.8 million to $160.8 million compared to the prior year due primarily to an increase in property and equipment additions of $66.1 million offset by a decrease in aircraft deposits net of lease inception refunds of $14.4 million and restricted cash of $8.6 million. Property and equipment additions increased as a greater number of higher cost new technology aircraft were purchased in the current year along with associated rotables to support the new technology aircraft. Aircraft deposits net of lease inceptions decreased as fewer deposits to purchase aircraft were made during the current year.

Liquidity and Sources of Liquidity

At April 30, 2012, our liquidity totaled $275.0 million, which was comprised of cash and cash equivalents of $56.0 million, unused capacity in the revolver of $165.0 million, net of letters of credit of $85.0 million and undrawn overdraft facilities of $54.0 million. During fiscal 2012, we entered into agreements with two new lenders to increase commitments under the existing revolving credit facility by $45.0 million up to $375.0 million. Our cash requirements include our normal operations as well as our debt and other contractual obligations as discussed under the caption “Future Cash Requirements” below. The senior secured notes have not materially increased overall indebtedness, but cash requirements have increased by approximately $40.0 million on an annual basis due to the higher interest payment obligations on the notes and the revolving credit facility. The ability to satisfy long-term debt obligations, including repayment of principal and interest will depend on future performance, which is subject to general economic conditions and other factors, some of which are beyond our control. We expect our earnings and cash flow to vary significantly from year to year due to the cyclical nature of the industry. As a result, the amount of debt that can be managed in some periods may not be appropriate in other periods. In addition, future cash flows may be insufficient to meet debt obligations and commitments, including the notes, and revolving credit facility. Any insufficiency could negatively impact the business. In addition, the indenture governing the notes allows us to incur additional indebtedness. The incurrence of additional indebtedness could negatively affect the repayment of principal and interest on the debt, including the notes. We may face delays in obtaining cash from our subsidiaries in certain jurisdictions to fund future cash requirements due to central banking legislation or other regulations in these jurisdictions. These restrictions have not and are not expected to have an impact on our ability to meet our obligations. We believe that our existing and

future cash flows, as well as our ability to access financing through the revolving line of credit, other financing markets, new operating leases and proceeds from the sale of aircraft and other assets are sufficient to meet our on-going cash flow requirements. Similarly, we expect that our transformation program will generate new initiatives to create greater liquidity. However, our earnings have been insufficient to cover our fixed charges since 2008. If cash flow from operations is insufficient to satisfy the debt obligations, alternative financing plans may need to be undertaken, such as refinancing or restructuring the debt, selling assets, reducing or delaying capital investments or raising additional capital. Any alternative financing plans that may be undertaken by us, if necessary, may not be sufficient to meet our debt obligations. Our inability to generate sufficient cash flow to satisfy our debt obligations, including obligations under the notes, or to obtain alternative financing, could materially and adversely affect the business, financial condition, results of operations and prospects. See Item 1A “Risk Factors – Our indebtedness and lease obligations could adversely affect our business and liquidity position”.

Sources of Liquidity

During fiscal year 2011, we refinanced our capital structure to provide improved liquidity and operating flexibility through the issuance of $1.1 billion senior secured notes and a new $330.0 million revolving credit facility, which was increased to $375.0 million during fiscal 2012. At April 30, 2012, the availability on the revolving credit facility is $165.0, net of $85.0 million in outstanding letters of credit. The $1.1 billion aggregate principal amount of senior secured notes issued at 98.399% of par value, bear interest at 9.25%, with semi-annual interest payments on April 15 and October 15, and mature on October 15, 2020. The net proceeds of $1.08 billion from the issuance of the senior secured notes due 2020 were used to repay the outstanding balance on the senior credit facilities of $1.02 billion and settle the related interest rate swap for $45.7 million. The new revolving credit facility is held with a syndicate of financial institutions for a term of five years and bears interest at the alternate base rate, LIBOR, Canadian Prime Rate or EURIBOR, plus an applicable margin that ranges from 2.75% to 4.50%.

The revolving credit facility is secured on a super senior first priority basis and ranks equally with the note holders except for payments upon enforcement and insolvency, where the revolving credit facility will rank before the note holders. The notes and revolving credit facility are guaranteed on a first-priority lien basis by most of our subsidiaries through a general secured obligation. For information about the financial positions and results of operations of our non-guarantor subsidiaries, see Note 29 of our audited annual consolidated financial statements for the year ended April 30, 2012 included elsewhere in this Annual Report on Form 10-K.

During fiscal 2012, we received from our ultimate parent an additional equity injection of $100.0 million in share capital for growth. To assist with future growth opportunities, a key initiative of the transformation program is to create greater liquidity through the implementation of new cost control measures, the review of overall contract profitability and improved profit growth. During fiscal 2012, we also increased our liquidity by increasing the number of entities in the accounts receivable securitization program. Two new entities were added to the program, which in turn improved the cash advance rate thereby providing us with cash sooner to fund ongoing operations and growth. We also completed the sale and leaseback of our Canada MRO facility, Boundary Bay. A more detailed review of other sources of liquidity is currently underway to optimize the procurement of capital expenditures and inventory.

Future Cash Requirements

Contractual Obligations and Off-Balance Sheet Arrangements

The following table summarizes the contractual obligations and other commercial commitments on an undiscounted basis as of April 30, 2012 and the period that the contractual obligation or commitment is expected to be settled in cash.


(in thousands of U.S. dollars)	Total		Less than 1 year		1-3 years		4-5 years		More than 5 years
Payables and accruals	$	363,064	$	363,064	$	—	$	—	$	—
Current facility secured by accounts receivable		45,566		45,566		—		—		—
Long-term debt and capital lease obligations (i)		1,302,972		14,336		22,145		128,867		1,137,624
Interest on long-term debt (ii)		925,331		110,606		221,912		211,845		380,968
Operating leases (iii)		1,277,352		217,464		362,495		280,191		417,202
New aircraft commitments		558,000		118,600		160,000		279,400		—
Other derivative financial instruments		20,254		4,565		12,371		3,243		75

Total contractual obligations	$	4,492,539	$	874,201	$	778,923	$	903,546	$	1,935,869

(i)	This excludes the unamortized discount on the senior secured notes of $15.9 million.

(ii)	Interest on variable rate debt was estimated based on applicable forward rates as of April 30, 2012.

(iii)

See “Operating Lease Commitments” for a discussion of our efforts to obtain a long-term covenant reset and the size of our remaining operating lease portfolio.

Operating Lease Commitments

The Company entered into aircraft operating leases with 18 lessors in respect of 164 aircraft included in the Company’s fleet as of April 30, 2012. As of April 30, 2012, these leases had expiry dates ranging from fiscal 2013 to 2022. The Company has the option to purchase the majority of the aircraft for agreed amounts that do not constitute bargain purchase options, but has no commitment to do so. With respect to such leased aircraft, substantially all of the costs of major inspections of airframes and the costs to perform inspections, major repairs and overhauls of major components are at the Company’s expense. The Company either performs this work internally through its own repair and overhaul facilities or has the work performed by an external repair and overhaul service provider.

At April 30, 2012, the Company had commitments with respect to operating leases for aircraft, buildings, land and equipment. Within the next twelve months, the Company does not expect to buy out a material number of expiring leases, as there are nine aircraft leases expiring in the next twelve months totaling $74.8 million. The Company has the option to refinance aircraft leases, purchase the aircraft or return the aircraft under the agreement terms.

The terms of certain of the Company’s helicopter lease agreements impose operating and financial limitations on the Company. Such agreements limit the extent to which the Company may, among other things, incur indebtedness and fixed charges relative to its level of consolidated adjusted earnings before interest, taxes, depreciation and amortization.

Generally, in the event of a covenant breach, a lessor has the option to terminate the lease and require the return of the aircraft, with the repayment of any arrears of lease payments plus the present value of all future lease payments and certain other amounts, which could be material to the Company’s financial position. The aircraft would then be sold and the surplus, if any, returned to the Company. Alternatively, the Company could exercise its option to purchase the aircraft.

Capital Commitments

As of April 30, 2012, the Company has committed to purchase 23 new aircraft. The total required additional expenditures related to these purchase commitments is approximately $558.0 million. These aircraft are expected to be delivered in fiscal 2013 ($118.6 million), 2014 ($160.0 million), 2015 to 2017 ($279.4 million) and will be deployed in the Company’s Helicopter Services segment.

On June 12, 2012, the Company committed to acquire 10 AW139 helicopters from AgustaWestland to be delivered between October 2012 and September 2014. In addition, the Company has options to acquire 16 additional AW139 helicopters. On June 13, 2012, the Company also exercised its option to acquire two additional EC225s from Eurocopter in addition to the twenty helicopters the Company committed to acquire in fiscal 2012.

Variable Interest Entities

The Company has variable interest in entities that are not consolidated, as we are not the primary beneficiary, which provide operating lease financing to us and an entity that provides flying services to third party customers. At April 30, 2012, the Company had operating leases for 33 aircraft with variable interest entities that were not consolidated. See Note 4 of the audited annual consolidated financial statements as of April 30, 2012 included elsewhere in this Annual Report on Form 10-K.

Guarantees

The Company has provided limited guarantees to third parties under some of its operating leases relating to a portion of the residual aircraft values at the termination of the leases. The leases have terms expiring between fiscal 2013 and 2022. At April 30, 2012, the Company’s exposure under the asset value guarantees including guarantees in the form of funded residual value guarantees, rebateable advance rentals and deferred payments is approximately $223.0 million.

Contingencies

The Company has exposure for certain legal matters as disclosed in Note 26 to the annual consolidated financial statements for the year ended April 30, 2012 included elsewhere in this Annual Report on Form 10-K. There have been no material changes in the exposures to contingencies.

Covenants and Adjusted EBITDA

The Company’s notes, revolving credit facility, other long-term debt obligations and certain helicopter lease agreements impose operating and financial limitations on the Company through covenants, which among other things, limit the ability to incur additional indebtedness, create liens, sell or sublease assets, engage in mergers or acquisitions and make dividend and other payments.

Adjusted EBITDA is calculated by adding to or subtracting from net earnings (loss) certain of the adjustment items permitted in calculating covenant compliance under the indenture governing the notes. We describe these adjustments to net earnings (loss) in the table below. Adjusted EBITDA is a supplemental measure of our ability to service indebtedness that is not required by, or presented in accordance with, U.S. GAAP. Adjusted EBITDA is not a measurement of our financial performance under U.S. GAAP and should not be considered as an alternative to net earnings (loss) or other performance measures derived in accordance with U.S. GAAP, or as an alternative to cash flow from operating activities as a measure of our liquidity. In addition, Adjusted EBITDA as presented herein may not be comparable to similarly titled measures of other companies. Management believes that the presentation of Adjusted EBITDA included in this Annual Report on Form 10-K provides useful information to investors regarding our results of operations because it assists in analyzing and benchmarking the performance of our business. We will also use Adjusted EBITDA as a measure to calculate certain financial covenants related to our revolving credit facility and the notes indenture. Under the revolving credit facility agreement, the Company must maintain a minimum ratio of 2.5 to 1 of first priority net debt as defined in the revolving credit facility agreement to Adjusted EBITDA. If the financial covenant is not maintained, repayment of the revolving credit facility can be accelerated. Under the revolving credit facility agreement and notes indentures, the Company must meet certain Adjusted EBITDA ratios to incur additional indebtedness above the permitted indebtedness as defined in the revolving credit facility agreement and notes indenture. To incur additional indebtedness which is not otherwise permitted, the Company must have an Adjusted EBITDA to fixed charges ratio as defined in the revolving credit facility agreement and notes indenture that is equal to or greater than 2.0 to 1.0. However, if the indebtedness is secured by a lien then the Company must also have a total secured indebtedness, net of cash, to Adjusted EBITDA ratio as defined in the revolving credit facility agreement and notes indenture that is less than or equal to 5.0 to 1.0.

Adjusted EBITDA has limitations as an analytical tool, and you should not consider such measure either in isolation or as a substitute for net earnings (loss), cash flow or other methods of analyzing our results as reported under U.S. GAAP. Some of these limitations are:

•

Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;

•

Adjusted EBITDA does not reflect the cash requirements necessary to service principal payments, on our indebtedness;

•

Adjusted EBITDA does not reflect the cash requirements to pay our taxes;

•

Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future and Adjusted EBITDA does not reflect any cash requirements for such replacements; and

•

Adjusted EBITDA is not adjusted for all cash and non-cash income or expense items that are reflected in our statements of cash flow.

Because of these limitations, Adjusted EBITDA should not be considered as discretionary cash available to us to reinvest in the growth of our business or as a measure of cash that will be available to us to meet our obligations.

Set forth below is a reconciliation of net loss to Adjusted EBITDA derived from the fiscal years ended April 30, 2012 and 2011. As of April 30, 2012, the Company was in compliance with all financial covenants contained in the agreements governing its outstanding indebtedness.


	For the year ended April 30, 2012 (unaudited)			For the year ended April 30, 2011 (unaudited)
(in thousands of U.S. dollars)
Net loss	$	(95,000	)	$	(65,269	)
Discontinued operations		16,107			3,202
Earnings from equity accounted investees, net of cash distributions received		(1,710	)		(2,159	)
Fixed charges (a)		112,192			105,174
Other financing charges		17,653			35,408
Income tax expense (recovery)		48,217			(32,916	)
Amortization		112,967			99,625
Asset impairment charge (b)		17,415			27,766
Gain on disposal of assets		(8,169	)		(7,193	)
Restructuring costs		12,269			13,026
Business optimization costs		19,315			9,596
Stock-based compensation expense		735			1,655
Amortization of deferred charges (c)		2,715			2,301
Amortization of advanced aircraft rental payments		4,999			2,947
Unusual/non-recurring costs (d)		—			235
Investment/acquisition/permitted disposal (e)		139			20,914
Pension adjustment (f)		(1,118	)		2,140
Pro-forma capital lease adjustment (g)		—			9,545

Adjusted EBITDA (h)	$	258,726		$	225,997

(a)

Fixed charges include interest expense, the interest component of payments associated with capital lease obligations, net of interest income, and pro-forma adjustments as per the Senior Secured Notes Trust Indenture. The amortization of debt issuance costs and financing fees are excluded from fixed charges.

(b)	Asset impairment charge includes impairment (recovery) of funded residual value guarantees, impairment of assets held for sale, and impairment of intangible assets.

(c)	Amortization of initial costs on leased aircraft.

(d)	Unusual or non-recurring costs that include professional fees.

(e)	Costs incurred related to potential investment, acquisitions, and divestures.

(f)	This is an adjustment to arrive at the current service cost of the pension.

(g)	This is a pro-forma adjustment as per the indenture governing the notes resulting from the capitalization of certain operating leases.

(h)

Adjusted EBITDA for the periods presented does not include the pro-forma effect of aircraft acquisitions or disposals. However, the new revolving credit facility and the indenture governing the notes offered herein permit us to calculate Adjusted EBITDA for purposes of the applicable covenants contained therein giving pro-forma effect to aircraft acquisitions, net of disposals.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of the financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Areas where significant estimates and assumptions have been made include: classification of aircraft operating leases, consolidation of variable interest entities, property and equipment, goodwill, intangible and other long-lived asset impairment, pension benefits, contingent liabilities, income taxes and stock based compensation.

Classification of aircraft operating leases

In assessing the lease classification of an aircraft operating lease, management makes significant judgments and assumptions in determining the discount rate, fair value of the aircraft, estimated useful life and residual value. Changes in any of these assumptions at the lease inception or modification date could change the initial classification of the lease.

Consolidation of variable interest entities (“VIEs”)

The Company is required to consolidate a VIE if it is determined to be its primary beneficiary. Significant judgments are made in assessing whether the Company is the primary beneficiary, including determination of the activities that most significantly impact the VIE’s economic performance. This significant judgment is discussed further in Notes 2 and 4 to the Company’s audited annual consolidated financial statements for the year ended April 30, 2012 included elsewhere in this Annual Report on Form 10-K.

Property and equipment

Flying assets are amortized to their estimated residual value over their estimated service lives using the straight-line method. The estimated service lives and associated residual values are based on management estimates including an analysis of future values of the aircraft and Company experience.

In addition, we review the carrying amounts of the property and equipment either on an annual basis or earlier when the asset is classified as held for sale or when events or circumstances indicate that the carrying amount of an asset may not be recoverable from the estimated future cash flows expected to result from its use and eventual disposition.

Long-lived assets that have been classified as held for sale are measured at the lower of their carrying amount or fair value less costs to sell and are not amortized once they are classified as held for sale. An impairment loss is recognized as the excess of the carrying amount over the fair value less costs to sell.

In the years ended April 30, 2012, April 30, 2011 and April 30, 2010, we have recognized impairment of $13.5 million, $5.2 million, and $26.6 million respectively on assets classified as held for sale.

Where events or circumstances indicate that the carrying amount of held for use assets may not be recoverable, the carrying value of the assets or asset groups is compared to the future projected undiscounted cash flows. We estimate the future projected undiscounted cash flows for aircraft at the aircraft type level as this is the lowest level which earns independent cash flows. The cash flows are based on management’s expectation of future revenues and expenses including costs to maintain the assets over their respective service lives. Revenues are derived from the contracts for each aircraft. Costs are based on the budgeted amounts for crew, aircraft lease costs, insurance, PBH, consignment inventory and any other cost directly related to the operation of the aircraft. An impairment loss is recognized as the excess of the carrying value over the fair value when an asset or asset group is not recoverable. Fair value is based on third party appraisals. Significant estimates and judgments are applied in determining these cash flows and fair values.

In the year ended April 30, 2010, we determined that the future projected undiscounted cash flows of several of our older technology aircraft did not support their carrying amounts due to reductions in their future projected undiscounted cash flows and market valuation and recognized impairment of $36.2 million. No impairment for long-lived assets held for use was recognized for the year ended April 30, 2011 as the future projected undiscounted cash flows of our older technology aircraft exceeded their carrying amounts by $366.9 million. For the year ended April 30, 2012, no impairment testing was performed as there were no indicators of impairment identified.

Goodwill and intangible asset impairment

Embedded Equity

Embedded equity in aircraft lease contracts was recognized on the acquisition of the Predecessor and represents the excess of the market price of the aircraft on the date of acquisition over the fixed lease buyout prices contained in certain aircraft operating leases.

We review the carrying amounts of the embedded equity in aircraft leases (intangible asset) on an ongoing basis to determine if the carrying amount is recoverable.

In testing the recoverability of embedded equity, the costs to buyout the lease is compared to the fair value of the aircraft. An impairment loss is recognized as the excess of the costs to buyout the lease over the fair value and is applied first to the embedded equity and then to the funded residual value guarantee. Fair value is based on third party appraisals.

In the years ended April 30, 2012, April 30, 2011 and April 30, 2010, we have recognized impairment of $4.2 million, $20.6 million and $53.9 million, respectively. The impairments are due to the fair value of the aircraft declining from when the embedded equity was first recognized at the time of the acquisition of the Predecessor.

Goodwill and Trade names and Trademarks

The recoverability of goodwill and indefinite life intangible assets is assessed on an annual basis or more frequently if events or circumstances indicate that the carrying value may not be recoverable. Goodwill is assessed for impairment at the reporting unit level by comparing the carrying value of the reporting units with their fair value.

The fair value of our reporting units is determined based on the present value of estimated future cash flows, discounted at a risk-adjusted rate. Management’s forecasts of future cash flows which incorporate anticipated future revenue growth and related expenses to support the growth and maintain its assets are used to calculate fair value. The discount rates used represent management’s estimate of the weighted average cost of capital for the reporting units considering the risks and uncertainty inherent in the cash flows of the reporting units and in our internally developed forecasts.

During the year ended April 30, 2012, the Company changed its testing date from April 30 to February 1. The Company adopted this change in timing in order to ensure that the annual impairment test would be completed by the required filing date of the Company’s annual financial statements. At February 1, 2012, April 30 2011 and 2010, we performed our annual impairment test of goodwill. All of the Company’s goodwill is contained in the Helicopter Services reporting unit. No impairment has been recognized in the years ended April 30, 2012, April 30, 2011 and April 30, 2010 as the fair value of this reporting unit exceeded its carrying amount by $400.4 million, $77.2 million and $177.9 million respectively. In the event that the carrying value exceeded the fair value, we would have performed the second step in the two step impairment test to determine the amount of the impairment loss.

The fair value of our reporting units is most significantly affected by the discount rate used, the expected future cash flows and the long-term growth rate. The Company operates in a competitive environment and derives a significant portion of revenue from the offshore oil and gas industry. The ability to win new contracts, retain existing customers as well as the continued demand for flying services in the oil and gas market will affect the Company’s future cash flows and future growth. Relatively minor changes in future cash flows, growth rates and discount rates could significantly affect the estimate of reporting unit fair value and the amount of impairment loss recognized, if any.

If the discount rates used in the Company’s goodwill impairment test were to increase by 0.5% the fair value of the goodwill would have exceeded the carrying value by $265.0 million, $48.4 million and $73.7 million as of April 30, 2012, April 30, 2011 and April 30, 2010 respectively.

No impairment has been recognized in the years ended April 30, 2012, April 30, 2011 and April 30, 2010 for trademarks and trade names as the fair value exceeded the carrying value by $26.1 million, $3.7 million and $52.3 million respectively.

Pension benefits

The Company maintains both funded and unfunded defined benefit employee pension plans. Approximately 30% of the Company’s active employees are covered by defined benefit pension plans. As of April 30, 2012, the Company had an unfunded deficit of $88.3 million compared to $88.6 million at April 30, 2011. The pension expense for fiscal 2012 was $15.6 million, compared to $22.0 million for fiscal 2011. The overall asset mix was 21% equities, 58% fixed income and 21% money market as of April 30, 2012. This asset mix varies by each plan.

Measuring the Company’s obligations under the plans and related periodic pension expense involves significant estimates. Our pension benefit costs are accrued based on our review of annual analyses performed by our actuaries. These factors include assumptions about the rate at which the pension obligation is discounted, the expected long-term rate of return on plan assets, the rate of future compensation increases and mortality rates. Both the discount rate and expected rate of return on plan assets require estimates and projections by management and can fluctuate from period to period. The Company has determined the discount rate using market based data in consultation with its actuaries. The overall expected long-term rates of return on plan assets have been determined in part by assessing current and expected asset allocations as well as historical and expected returns on various categories of the assets. Such expected rates of return ignore short-term fluctuations. We believe these assumptions are appropriate based upon the mix of the investments and the long-term nature of the plans’ investments.

The weighted average discount rate of the various pension plans used to determine the pension benefit obligation was 4.40% as of April 30, 2012 compared to 5.35% as of April 30, 2011. The weighted average discount rate used to determine the pension expense is 4.98% as of April 30, 2012 compared to 4.97% at April 30, 2011.

The calculation of the estimate of the expected long-term rate of return on assets and additional discussion regarding pension and other postretirement plans is described in Note 20—Employee pension plans to our audited consolidated financial statements included elsewhere in this Annual Report on Form 10-K. The weighted average expected long-term rate of return on assets associated with our pension benefits was 5.60% at April 30, 2012 and 6.11% at April 30, 2011. The expected return on assets is a long-term assumption whose accuracy can only be measured over a long period based on past experience.

The actuarial assumptions used to determine pension benefits may differ from actual results due to changing market and economic conditions, higher or lower withdrawal rates or longer or shorter life spans of participants. Differing estimates may have a material impact on the amount of pension expense recorded and on the carrying value of prepaid pension costs and accrued pension obligations.

Contingent liabilities

We are subject to a variety of claims, lawsuits and investigations in the ordinary course of business as discussed in Note 26 to the Company’s audited annual consolidated financial statements for the year ended April 30, 2012 included elsewhere in this Annual Report on Form 10-K. We determine whether an estimated loss from a contingency should be

accrued by assessing whether a loss is deemed probable and can be reasonably estimated. Estimating liabilities and costs associated with these matters requires judgment and assessment based upon professional knowledge, experience of management and our internal and external legal counsel.

Income taxes

The Company is subject to taxes in numerous foreign jurisdictions. Income and other tax risks recognized in the Consolidated Financial Statements reflect management’s best estimate of the outcome based on the facts known at the balance sheet date in each individual country. These facts may include, but are not limited to, change in tax laws and interpretation thereof in the various jurisdictions where the Company operates. They may have an impact on the income tax as well as the resulting assets and liabilities. Any differences between tax estimates and final tax assessments are charged to the statement of operations in the period in which they are incurred.

In addition, the Company’s business and operations are complex and include a number of significant financings, acquisitions and dispositions. The determination of earnings, payroll and other taxes involves many factors including the interpretation of tax legislation in multiple jurisdictions in which the Company is subject to ongoing tax assessments. When applicable, the Company adjusts the previously recorded income tax expense, direct costs, interest and the associated assets and liabilities to reflect its change in estimates or assessments. These adjustments could materially change the Company’s results of operations.

The Company has assessed the realization of the deferred income tax asset (net of allowance) related to income tax losses as more likely than not that the asset will be realized. Judgment is required in determining whether the deferred tax assets will be realized in full or in part. At April 30, 2012, the Company had a valuation allowance of $227.8 million. The realization of the deferred tax asset was based on assumptions regarding the reversal of existing future tax liabilities and future earnings levels in the subsidiaries with accumulated losses, and an ability to implement tax planning measures. If, in the future, it is determined that it is more likely than not that all or part of the future tax asset will not be realized, a charge will be made to earnings in the period when such determination is made.

Stock based compensation

On December 30, 2011, the Company’s parent adopted a new equity compensation plan which permits the grant of time and performance options, performance options and restricted share units to eligible employees, directors or consultants of the Parent and its affiliates. The terms of the options are described in Note 19 of the Company’s annual audited consolidated financial statements for the fiscal year ended April 30, 2012 included elsewhere in this Annual Report on Form 10-K.

We estimate the grant date fair value of stock options using a Monte-Carlo simulation model. The key factors that will create value in these awards include: (1) the year of an Exit Event (either an initial public offering or subsequent public offering of the equity of the Company or the merger, consolidation, sale of interests or sale of assets of the Company), (2) the probability that an Exit Event will occur in a particular year, which is based on management’s assessment of when this is likely to occur, (3) the risk free interest rate, which is based on the U.S. Treasury yield curve in effect at the time of grant with maturities equal to the grant’s expected life and (4) the ultimate exit value of the Company, which is estimated using historical volatility and implied volatility data of ten peer companies’ stock price. If any of the assumptions used in the Monte Carlo simulation model changes significantly, stock-based compensation for future awards may differ materially compared with the awards granted previously.

We have determined that not being able to exercise the options until an Exit Event has occurred that results in the investors recovering their initial investment meets the definition of a performance condition. As of April 30, 2012, we have determined that it is not probable that the performance condition will occur and therefore, no stock compensation expense has been recognized to date.

Recent Accounting Pronouncements

See Note 2 in the audited annual consolidated financial statements for the fiscal year ended April 30, 2012 contained elsewhere in this Annual Report on Form 10-K for a discussion of recent accounting pronouncements.

Item 7A.

Quantitative and qualitative disclosures about market risk

Interest Rate Risk

As of April 30, 2012 we have $1,260.1 million of debt outstanding excluding capital leases, $138.2 million of which carries a variable rate of interest. The fair value of our fixed rate long-term debt fluctuates with changes in interest rates and has been estimated based on quoted market prices.

The following table provides information about our interest rate sensitive financial instruments by expected maturity date as of April 30, 2012.


(in thousands of U.S. dollars) (unaudited)	2013			2014			2015			2016			2017			thereafter			Fair value
Long-term debt

Fixed rate	$	1,259			152			165			179			195		$	1,135,878		$	1,129,578
Average interest rate		2.5	%		6.93	%		6.93	%		6.93	%		6.93	%		9.18	%

Variable rate		2,844			2,844			2,295			126,747			1,746			1,746			138,221
Average interest rate		3.77	%		3.67	%		4.08	%		4.49	%		3.13	%		3.50	%

Foreign Currency Risk

The Company is exposed to foreign exchange risk primarily from its subsidiaries which incur revenue and operating expenses in currencies other than U.S. dollars with the most significant being Pound Sterling, Norwegian Kroner, Canadian dollars, Australian dollars and Euros. The Company monitors these exposures through its rigorous cash forecasting process and regularly enters into foreign exchange forward contracts to manage its exposure to fluctuations in expected future cash flows from foreign operations and anticipated transactions in currencies other than the functional currency. In particular, the Company has entered into forward foreign exchange contracts to manage its exposure to anticipated payroll transaction costs incurred in Canadian dollars and aircraft purchase commitments incurred in Euros. In addition, the Company manages its exposure to foreign operations by attempting to match the contract currency for its flying services contracts with currency of the underlying costs of providing the services whenever possible.

The following tables provide information about our foreign exchange sensitive financial instruments, all of which are recorded in entities with U.S. functional currency, by expected maturity as of April 30, 2012:


(in thousands of U.S. dollars) (unaudited)	2013			2014			2015			2016			2017			thereafter			Fair value
Long-term debt denominated in foreign currencies:

Variable rate (CAD)	$	2,844		$	2,844		$	2,295		$	1,746		$	1,746		$	1,746		$	13,221

Average interest rate		2.54	%		2.25	%		2.77	%		2.95	%		3.13	%		3.50	%

Fixed rate (CAD)		(3,364	)		152			165			179			195			35,878			33,205

Average interest rate		6.93	%		6.93	%		6.93	%		6.93	%		6.93	%		6.93	%

Forward contracts to sell U.S. dollars and buy foreign currencies:

Notional amount		CAD 114,580			CAD 93,922			CAD 42,000			—			—			—		$	6,743

Average contract rate		1.04			1.01			1.02			—			—			—

Notional amount	€	16,872			—			—			—			—			—			(1,551)

Average contract rate		1.42			—			—			—			—			—

The following tables provide information about our foreign exchange sensitive financial instruments, all of which are recorded in entities with Pound Sterling functional currency, by expected maturity as of April 30, 2012:


(in thousands of U.S. dollars) (unaudited)	2013			2014		2015		2016		2017		thereafter		Fair value
Long-term debt denominated in foreign currencies:

Fixed rate (EUR)		4,623			—		—		—		—		—		4,623

Average interest rate		2.5	%		—		—		—		—		—

Firmly committed sales contracts, forecasted payroll transactions and aircraft purchase commitments denominated in foreign currencies are not included in the above table. Trade accounts payable and receivable have been excluded because their carrying amounts approximate fair value.

Credit Risk

The Company is exposed to credit risk on its financial investments due to counterparties’ ability to fulfill their obligations to the Company. The Company manages credit risk by entering into arrangements with established counterparties and through the establishment of credit policies and limits, which are applied in the selection of counterparties.

Credit risk on financial instruments arises from the potential for counterparties to default on their contractual obligations and is limited to those contracts where the Company would incur a loss in replacing the instrument. The Company limits its credit risk by dealing only with counterparties that possess investment grade credit ratings and monitors its concentration risk with counterparties on an ongoing basis. The carrying amount of financial assets represents the maximum credit exposure for financial assets.

Credit risk arises on the Company’s trade receivables from the unexpected loss in cash and earnings when a customer cannot meet its obligation to the Company or the value of security provided declines. To mitigate trade credit risk, the Company has developed credit policies which include the review, approval and monitoring of new customers, annual credit evaluations and credit limits.

Item 8.

Financial statements and supplementary data

The financial statements required by this item may be found on pages F-1 through F-71 of this Annual Report on Form 10-K.

Index to consolidated financial statements


	Page
Audited annual consolidated financial statements

Report of Independent Registered Public Accounting Firm		F-2

Consolidated balance sheets as of April 30, 2011 and April 30, 2012		F-3

Consolidated statements of operations for the fiscal years ended, April 30, 2010, April 30, 2011 and April 30, 2012		F-4

Consolidated statements of cash flows for the fiscal years ended April 30, 2010, April 30, 2011 and April 30, 2012		F-5

Consolidated statements of shareholder’s equity for the fiscal years ended April 30, 2010, April 30, 2011 and April 30, 2012		F-7

Notes to audited consolidated financial statements		F-8

F-1

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholder of 6922767 Holding S.à.r.l.

We have audited the accompanying consolidated balance sheets of 6922767 Holding S.à.r.l. (the “Company”) as of April 30, 2012 and 2011, and the related consolidated statements of operations, shareholder’s equity, and cash flows for each of the three years in the period ended April 30, 2012. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Company at April 30, 2012 and 2011, and the consolidated results of its operations and its cash flows for each of the three years in the period ended April 30, 2012, in conformity with U.S. generally accepted accounting principles.

/s/ Ernst & Young LLP

Chartered Accountants

Vancouver, Canada

July 10, 2012

F-2

6922767 HOLDING S.à.r.l.

Consolidated Balance Sheets

(Expressed in thousands of United States dollars)

April 30, 2012, with comparative information for 2011


	2012			2011

Assets

Current assets:
Cash and cash equivalents	$	55,547		$	68,921
Receivables, net of allowance for doubtful accounts of $2.6 million and $0.5 million, respectively (notes 4 and 12)		266,115			222,565
Income taxes receivable		20,747			11,457
Deferred income tax assets (note 17)		8,542			7,596
Inventories (note 11)		90,013			102,224
Prepaid expenses		21,183			17,853
Other assets (note 13)		33,195			36,234

		495,342			466,850
Property and equipment, net (note 6)		1,026,860			1,133,499
Investments (note 10)		24,226			23,548
Intangible assets (note 8)		217,890			243,184
Goodwill (note 9)		433,811			448,121
Restricted cash		25,994			13,219
Other assets (note 13)		363,103			319,053
Deferred income tax assets (note 17)		48,943			90,882
Assets held for sale (note 7)		79,813			49,799


	$	2,715,982		$	2,788,155


Liabilities and Shareholder’s Equity

Current liabilities:
Payables and accruals	$	363,064		$	364,848
Deferred revenue		23,737			24,183
Income taxes payable		43,581			29,132
Deferred income tax liabilities (note 17)		11,729			13,035
Current facility secured by accounts receivable (note 4)		45,566			21,571
Other liabilities (note 14)		23,648			32,306
Current portion of long-term debt (note 15)		17,701			106,642

		529,026			591,717
Long-term debt (note 15)		1,269,379			1,184,844
Liabilities held for sale (note 7)		—			1,608
Deferred revenue		43,517			37,799
Other liabilities (note 14)		191,521			188,654
Deferred income tax liabilities (note 17)		20,072			36,170

Total liabilities		2,053,515			2,040,792

Redeemable non-controlling interests		1,675			3,087

Capital stock: Par value 1 Euro;
Authorized and issued:
1,228,377,770 and 1,184,793,767, respectively (note 18)		1,607,101			1,547,101
Contributed surplus		55,318			14,583
Deficit		(940,031	)		(832,609	)
Accumulated other comprehensive earnings (loss)		(61,596	)		15,201


	$	2,715,982		$	2,788,155

See accompanying notes to consolidated financial statements.

F-3

6922767 HOLDING S.à.r.l.

Consolidated Statements of Operations

(Expressed in thousands of United States dollars)


	For the year ended
	April 30, 2012			April 30, 2011			April 30, 2010

Revenue	$	1,692,539		$	1,445,460		$	1,313,566

Operating expenses:
Direct costs		(1,381,900	)		(1,211,680	)		(1,029,882	)
Earnings from equity accounted investees		2,844			2,159			1,436
General and administration costs		(69,590	)		(65,391	)		(61,157	)
Amortization (note 6)		(112,967	)		(99,625	)		(77,738	)
Restructuring costs (note 5)		(22,511	)		(4,751	)		(4,855	)
Recovery (impairment) of receivables and funded residual value guarantees		272			(1,919	)		(13,266	)
Impairment of intangible assets (note 8)		(4,218	)		(20,608	)		(53,903	)
Impairment of property and equipment		—			—			(36,240	)
Impairment of assets held for sale (note 7)		(13,469	)		(5,239	)		(26,585	)
Gain (loss) on disposal of assets		8,169			7,193			(2,686	)

		(1,593,370	)		(1,399,861	)		(1,304,876	)


Operating income		99,169			45,599			8,690

Interest on long-term debt		(116,578	)		(91,462	)		(69,520	)
Foreign exchange gain		1,795			17,916			16,520
Other financing charges (note 16)		(15,062	)		(67,036	)		(21,459	)


Loss from continuing operations before income tax		(30,676	)		(94,983	)		(65,769	)

Income tax recovery (expense) (note 17)		(48,217	)		32,916			(9,297	)


Loss from continuing operations		(78,893	)		(62,067	)		(75,066	)

Loss from discontinued operations, net of tax (note 7)		(16,107	)		(3,202	)		(1,436	)


Loss for the year	$	(95,000	)	$	(65,269	)	$	(76,502	)


Net earnings (loss) attributable to:
Controlling interest	$	(107,422	)	$	(70,338	)	$	(70,607	)
Non-controlling interest		12,422			5,069			(5,895	)


Loss for the year	$	(95,000	)	$	(65,269	)	$	(76,502	)

See accompanying notes to consolidated financial statements.

F-4

6922767 HOLDING S.à.r.l.

Consolidated Statements of Cash Flows

(Expressed in thousands of United States dollars)


	For the year ended
	April 30, 2012			April 30, 2011			April 30, 2010

Cash provided by (used in):

Operating activities:
Loss for the year	$	(95,000	)	$	(65,269	)	$	(76,502	)
Loss from discontinued operations, net of tax		(16,107	)		(3,202	)		(1,436	)

Net loss from continuing operations		(78,893	)		(62,067	)		(75,066	)
Adjustments to reconcile net loss to cash flows provided by (used in) operating activities:
Amortization		112,967			99,625			77,738
Loss (gain) on disposal of assets		(8,169	)		(7,193	)		2,686
Impairment (recovery) of receivables and funded residual value guarantees		(272	)		1,919			13,266
Impairment of intangible assets		4,218			20,608			53,903
Impairment of assets held for sale		13,469			5,239			26,585
Impairment on property and equipment		—			—			36,240
Earnings from equity accounted investees		(2,844	)		(2,159	)		(1,436	)
Deferred income taxes		32,172			(37,142	)		(35,334	)
Non-cash stock-based compensation expense		735			1,655			4,017
Amortization of unfavorable contract credits		(11,548	)		(22,868	)		(8,937	)
Amortization of lease related fixed interest rate obligations		(3,265	)		(3,920	)		(7,191	)
Amortization of long-term debt and lease deferred financing costs		8,813			7,795			7,392
Write-off of unamortized transaction costs on the senior facility agreement		—			47,140			—
Non-cash accrued interest income on funded residual value guarantees receivable		(7,358	)		(6,923	)		(5,592	)
Mark to market loss on derivative instruments		5,380			9,350			11,478
Non-cash defined benefit pension expense		15,573			21,966			22,532
Defined benefit contributions and benefits paid		(44,480	)		(30,117	)		(33,896	)
Unrealized loss (gain) on foreign currency exchange translation		(1,965	)		8,529			9,300
Increase to deferred lease financing costs		(6,981	)		(2,621	)		(16,699	)
Other		10,675			6,168			(3,993	)
Decrease in cash resulting from changes in operating assets and liabilities (note 22)		(22,626	)		(12,694	)		(2,693	)

Cash provided by operating activities		15,601			42,290			74,300

F-5

6922767 HOLDING S.à.r.l.

Consolidated Statements of Cash Flows (continued)

(Expressed in thousands of United States dollars)


	For the year ended
	April 30, 2012			April 30, 2011			April 30, 2010

Financing activities:
Redemption of capital stock	$	—		$	—		$	(20,000	)
Sold interest in accounts receivable, net of collections		27,203			(25,309	)		43,214
Proceeds from the senior secured notes		—			1,082,389			—
Repayment of the senior credit facility debt		—			(1,020,550	)		—
Redemption of senior subordinated notes		—			(129	)		—
Settlement of the interest rate swap and other breakage fees		—			(45,711	)		—
Long-term debt proceeds		867,853			262,800			275,919
Long-term debt repayments		(786,808	)		(213,920	)		(276,215	)
Senior secured notes, senior credit facility and revolver deferred financing costs		(1,033	)		(42,721	)		(182	)
Proceeds from the issuance of capital stock		100,000			146			—

Cash (used in) provided by financing activities		207,215			(3,005	)		22,736


Investing activities:
Property and equipment additions		(376,624	)		(228,804	)		(162,737	)
Proceeds from disposal of property and equipment		218,259			61,768			105,228
Proceeds from the sale of the flight training operations to CAE Inc.		—			29,779			—
Aircraft deposits net of lease inception refunds		(47,307	)		(28,253	)		(42,606	)
Restricted cash		(13,135	)		4,755			(3,861	)
Investments in subsidiaries, net of cash acquired		—			—			(13,300	)
Distributions from equity investments		1,134			—			1,275

Cash used in investing activities		(217,673	)		(160,755	)		(116,001	)


Cash (used in) provided by continuing operations		5,143			(121,470	)		(18,965	)

Cash flows provided by (used in) discontinued operations:
Cash flows provided by (used in) operating activities		2,240			(1,032	)		(1	)
Cash flows provided by (used in) financing activities		(2,240	)		1,032			1

Cash provided by (used in) discontinued operations		—			—			—

Effect of exchange rate changes on cash and cash equivalents		(18,517	)		15,431			853

Change in cash and cash equivalents during the year		(13,374	)		(106,039	)		(18,112	)

Cash and cash equivalents, beginning of year		68,921			174,960			199,267
Less: cash and cash equivalents from deconsolidation of VIEs		—			—			(6,195	)


Cash and cash equivalents, end of year	$	55,547		$	68,921		$	174,960

See accompanying notes to consolidated financial statements.

F-6

6922767 HOLDING S.à.r.l.

Consolidated Statements of Shareholder’s Equity

(Expressed in thousands of United States dollars)


	Capital stock		Convertible preferred equity certificates (“CPECs”)		Contributed surplus		Deficit			Accumulated other comprehensive earnings (loss)			Total shareholder’s equity		Total comprehensive earnings (loss)			Redeemable non- controlling interests

April 30, 2009	$	19	$	1,574,302	$	8,911	$	(691,222	)	$	(135,993	)	$	756,017	$	(840,503	)	$	—

Conversion of CPECs into capital stock		1,546,489		(1,546,489