U.S.
          SECURITIES AND EXCHANGE COMMISSION
 Washington,
          D.C. 20549
 
 FORM
          20-F
 
 o
                REGISTRATION
                    STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES
                    EXCHANGE
                    ACT OF 1934
 OR
 
 x
                ANNUAL
                    REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
                    ACT OF
                    1934
 
 For
          the fiscal year ended April 30, 2005
 OR
 
 o
                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 0-21756
 
 CHC
          HELICOPTER CORPORATION
 (Exact
          name of Registrant as specified in its charter)
 
 Canada
 (Jurisdiction
          of incorporation or organization)
 
 4740
          Agar Drive
 Richmond,
          British Columbia
 Canada
          V7B 1A3
 (Address
          of principal executive offices)
 
 Securities
          registered or to be registered pursuant to Section 12(b) of the
          Act:
 
 None
 
 Securities
          registered pursuant to Section 12(g) of the Act.
 
 Class A
          Subordinate Voting Shares
 (Title
          of Class)
 
 Securities
          for which there is a reporting obligation pursuant to Section 15(d) of
          the
          Act.
 
 Class A
          Subordinate Voting Shares
 (Title
          of Class)
 
 The
          number of Class A Subordinate Voting Shares outstanding on April
          30, 2005,
          was 36,833,000.
 
 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
                x
                
                No
                o
 
 Indicate
          by check mark which financial statement item the registrant has elected
          to
          follow.
 
 Item
                    17
                o
                
                Item
                    18
                x
 
 
  
  **TABLE
          OF CONTENTS**
  Item
                
                Page**PART
                    I**
                
                
                **3**ITEM
                    1.
                IDENTITY
                    OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
                3ITEM
                    2.
                OFFER
                    STATISTICS AND EXPECTED TIMETABLE
                3ITEM
                    3.
                KEY
                    INFORMATION
                3ITEM
                    4.
                INFORMATION
                    ON THE COMPANY
                15ITEM
                    5.
                OPERATING
                    AND FINANCIAL REVIEW AND PROSPECTS
                33ITEM
                    6.
                DIRECTORS,
                    SENIOR MANAGEMENT AND EMPLOYEES
                78ITEM
                    7.
                MAJOR
                    SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
                98ITEM
                    8.
                FINANCIAL
                    INFORMATION
                99ITEM
                    9.
                THE
                    OFFER AND LISTING
                100ITEM
                    10.
                ADDITIONAL
                    INFORMATION
                102ITEM
                    11.
                QUANTITATIVE
                    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
                105ITEM
                    12.
                DESCRIPTION
                    OF SECURITIES OTHER THAN EQUITY SECURITIES
                105**PART
                    II**
                
                
                **106**ITEM
                    13.
                DEFAULTS,
                    DIVIDEND ARREARAGES AND DELINQUENCIES
                106ITEM
                    14.
                MATERIAL
                    MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF
                    PROCEEDS
                106ITEM
                    15.
                CONTROLS
                    AND PROCEDURES
                106ITEM
                    16A.
                AUDIT
                    COMMITTEE FINANCIAL EXPERT
                106ITEM
                    16B.
                CODE
                    OF ETHICS
                106ITEM
                    16C.
                PRINCIPAL
                    ACCOUNTANT FEES AND SERVICES
                107ITEM
                    16D.
                EXEMPTIONS
                    FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
                107ITEM
                    16E.
                PURCHASE
                    OF EQUITY SECURITIES BY ISSUER AND AFFILIATED PURCHASERS
                108**PART
                    III**
                
                
                **109**ITEM
                    17.
                FINANCIAL
                    STATEMENTS
                109ITEM
                    18.
                FINANCIAL
                    STATEMENTS
                109ITEM
                    19.
                EXHIBITS
                168
  *All
          defined
          terms under Rule 4-10(a) of Regulation S-X shall have their
          statutorily-prescribed meanings when used in this Annual
          Report.*
  
  *For
            purposes of
            this Annual Report, all references to dollar amounts are expressed in
            Canadian
            dollars unless otherwise specified. On September 9* *,
            2005, the
            noon buying rate in New York City for cable transfers in Canadian dollars
            as
            certified for customs purposes by the Federal Reserve Bank of New York
            was
            $0.8511 U.S. = $1.00 Canadian.*
  **FORWARD
            LOOKING STATEMENTS**
  This
            Annual Report
            may contain projections and other forward looking statements within the
            meaning
            of the “safe harbour” provision of the United States Private Securities
            Litigation Reform Act of 1995. While these projections and other statements
            represent our best current judgement, they are subject to risks and
            uncertainties that could cause actual results to vary. These statements
            may
            involve risks and uncertainties including but not limited to, factors
            detailed
            in this Annual Report and in other filings with the SEC and Canadian
            securities
            regulatory authorities. Should one or more of these risks or uncertainties
            materialize, or should underlying assumptions prove incorrect, actual
            outcomes
            may vary materially from those indicated.
  
 
 PART
              I
 ITEM
                      1.
                  IDENTITY
                      OF
                      DIRECTORS, SENIOR MANAGEMENT AND
                      ADVISERS
  Not
            Required.
   ITEM
                      2.
                  OFFER
                      STATISTICS AND EXPECTED TIMETABLE
  Not
            Applicable.
   ITEM
                      3.
                  KEY
                      INFORMATION
  **SELECTED
            FINANCIAL DATA**
  The
            following
            consolidated historical financial data as at and for the fiscal years
            ended
            April 30, 2005, 2004, 2003, 2002, and 2001 for CHC Helicopter
            Corporation
            (“CHC”, “the Company”, “the Corporation”, “we”, “our”, or “us”) are derived from
            the audited consolidated financial statements of CHC. The CHC consolidated
            financial statements have been prepared in accordance with Canadian generally
            accepted accounting principles ("GAAP"), which differ in certain respects
            from
            U.S. GAAP. For the reconciliation to U.S. GAAP for the three most recently
            completed fiscal years, see Note 34 to our audited
            consolidated financial statements included elsewhere in this Annual
            Report.
  3
 
 The
            following data
            should be read in conjunction with "Operating and Financial Review and
            Prospects" and our audited consolidated financial statements included
            elsewhere
            in this Annual Report.
  **As
                      at
                      and for the fiscal year ended April 30****2005**
                  
                  **2004**
                  
                  **2003**
                  
                  **2002**
                  
                  **2001***(i)*
                  
                  *(i)*
                  
                  *(i)*
                  
                  *(i)*(in millions
                      of Canadian dollars except per share amounts)**Amounts
                      under Canadian GAAP****Operating
                      Data:**Revenue
                  
                  $
                  903.3
                  
                  $
                  720.0
                  
                  $
                  711.9
                  
                  $
                  617.2
                  
                  $
                  593.8Direct
                      costs
                  
                  
                  (702.2
                  )
                  
                  (576.0
                  )
                  
                  (546.0
                  )
                  
                  (473.2
                  )
                  
                  (465.6
                  )General
                      and
                      administration costs
                  
                  
                  (25.8
                  )
                  
                  (18.6
                  )
                  
                  (21.4
                  )
                  
                  (23.8
                  )
                  
                  (11.7
                  )Amortization
                  
                  
                  (30.5
                  )
                  
                  (25.2
                  )
                  
                  (20.5
                  )
                  
                  (18.6
                  )
                  
                  (20.0
                  )Restructuring
                      costs
                  
                  
                  (17.6
                  )
                  
                  (9.2
                  )
                  
                  -
                  
                  
                  -
                  
                  
                  -Gain
                      on
                      disposals of assets
                  
                  
                  4.1
                  
                  
                  3.3
                  
                  
                  2.4
                  
                  
                  1.9
                  
                  
                  6.8*Operating
                      income*
                  
                  
                  131.3
                  
                  
                  94.3
                  
                  
                  126.4
                  
                  
                  103.5
                  
                  
                  103.3Debt
                      settlement costs
                  
                  
                  (2.0
                  )
                  
                  (19.7
                  )
                  
                  (12.5
                  )
                  
                  -
                  
                  
                  (18.6
                  )Financing
                      chargesInterest
                      expense
                  
                  
                  (32.9
                  )
                  
                  (30.6
                  )
                  
                  (30.8
                  )
                  
                  (42.3
                  )
                  
                  (53.6
                  )Other
                  
                  
                  (4.2
                  )
                  
                  1.7
                  
                  
                  (3.7
                  )
                  
                  (5.7
                  )
                  
                  (2.8
                  )92.2
                  
                  
                  45.7
                  
                  
                  79.4
                  
                  
                  55.5
                  
                  
                  28.3Non-controlling
                      interest
                  
                  
                  (0.3
                  )
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -Equity
                      in
                      earnings (loss) of associated companies
                  
                  
                  5.5
                  
                  
                  3.9
                  
                  
                  2.3
                  
                  
                  1.1
                  
                  
                  (0.4
                  )Income
                      tax
                      (provision) recovery
                  
                  
                  (23.8
                  )
                  
                  16.7
                  
                  
                  (1.9
                  )
                  
                  (9.8
                  )
                  
                  5.9*Net
                      earnings from continuing operations*
                  
                  
                  73.6
                  
                  
                  66.3
                  
                  
                  79.8
                  
                  
                  46.8
                  
                  
                  33.8Net
                      loss from
                      discontinued operations
                  
                  
                  (11.0
                  )
                  
                  (2.6
                  )
                  
                  (14.3
                  )
                  
                  -
                  
                  
                  -*Net
                      earnings*
                  
                  $
                  62.6
                  
                  $
                  63.7
                  
                  $
                  65.5
                  
                  $
                  46.8
                  
                  $
                  33.8**Per
                      Share Data:**BasicNet
                      earnings
                      from continuing operations
                  
                  $
                  1.75
                  
                  $
                  1.60
                  
                  $
                  1.92
                  
                  $
                  1.42
                  
                  $
                  1.08Net
                      loss from
                      discontinued operations
                  
                  
                  (0.26
                  )
                  
                  (0.06
                  )
                  
                  (0.34
                  )
                  
                  -
                  
                  
                  -Net
                      earnings
                  
                  
                  1.49
                  
                  
                  1.54
                  
                  
                  1.58
                  
                  
                  1.42
                  
                  
                  1.08DilutedNet
                      earnings
                      from continuing operations
                  
                  
                  1.61
                  
                  
                  1.47
                  
                  
                  1.76
                  
                  
                  1.30
                  
                  
                  1.01Net
                      loss from
                      discontinued operations
                  
                  
                  (0.24
                  )
                  
                  (0.06
                  )
                  
                  (0.30
                  )
                  
                  -
                  
                  
                  -Net
                      earnings
                  
                  
                  1.37
                  
                  
                  1.41
                  
                  
                  1.46
                  
                  
                  1.30
                  
                  
                  1.01Dividends
                      per
                      participating voting share
                  
                  
                  0.30
                  
                  
                  0.25
                  
                  
                  0.10
                  
                  
                  -
                  
                  
                  0.06Dividends
                      (in
                      U.S. $) per share*(ii)*
                  
                  
                  0.24
                  
                  
                  0.19
                  
                  
                  0.06
                  
                  
                  -
                  
                  
                  0.04Weighted
                      average sharesoutstanding
                      in (000)
                  
                  
                  42,673
                  
                  
                  42,122
                  
                  
                  41,456
                  
                  
                  32,929
                  
                  
                  31,458**Other
                      Financial Data:**RevenueHelicopter
                      operationsEurope
                  
                  $
                  437.9
                  
                  $
                  437.6
                  
                  $
                  464.1
                  
                  $
                  406.2
                  
                  $
                  351.3International
                  
                  
                  233.5
                  
                  
                  191.8
                  
                  
                  184.8
                  
                  
                  167.4
                  
                  
                  146.2Schreiner*(iii)*
                  
                  
                  154.6
                  
                  
                  32.5
                  
                  
                  -
                  
                  
                  -
                  
                  
                  62.0Total
                      helicopter operations
                  
                  
                  826.0
                  
                  
                  661.9
                  
                  
                  648.9
                  
                  
                  573.6
                  
                  
                  559.5Repair
                      and
                      overhaul
                  
                  
                  77.3
                  
                  
                  58.1
                  
                  
                  63.0
                  
                  
                  43.6
                  
                  
                  34.3Total
                      revenue
                  
                  $
                  903.3
                  
                  $
                  720.0
                  
                  $
                  711.9
                  
                  $
                  617.2
                  
                  $
                  593.8
 4
 
 **As
                      at
                      and for the fiscal year ended April 30****2005**
                  
                  **2004**
                  
                  **2003**
                  
                  **2002**
                  
                  **2001***(i)*
                  
                  *(i)*
                  
                  *(i)*
                  
                  *(i)*(in millions
                      of Canadian dollars except per share amounts)**Other
                      Financial Data (cont’d):**Segment
                      EBITDA*(iv)*Helicopter
                      operationsEurope
                  
                  $
                  74.1
                  
                  $
                  72.1
                  
                  $
                  88.6
                  
                  $
                  74.0
                  
                  $
                  62.0International
                  
                  
                  46.0
                  
                  
                  28.3
                  
                  
                  39.9
                  
                  
                  39.0
                  
                  
                  44.7Schreiner
                  
                  
                  35.0
                  
                  
                  3.3
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -155.1
                  
                  
                  103.7
                  
                  
                  128.5
                  
                  
                  113.0
                  
                  
                  106.7Repair
                      and
                      overhaul
                  
                  
                  41.8
                  
                  
                  41.2
                  
                  
                  37.4
                  
                  
                  31.0
                  
                  
                  24.9Corporate
                      and
                      other
                  
                  
                  (21.6
                  )
                  
                  (19.5
                  )
                  
                  (21.4
                  )
                  
                  (23.8
                  )
                  
                  (15.1
                  )$
                  175.3
                  
                  $
                  125.4
                  
                  $
                  144.5
                  
                  $
                  120.2
                  
                  $
                  116.5Total
                      capital
                      asset additions*(v)*
                  
                  $
                  276.4
                  
                  $
                  185.1
                  
                  $
                  105.6
                  
                  $
                  175.6
                  
                  $
                  179.0Ratio
                      of
                      earnings to fixed charges*(vi)*
                  
                  
                  2.6x
                  
                  
                  2.1x
                  
                  
                  2.5x
                  
                  
                  1.8x
                  
                  
                  1.4x**Balance
                      Sheet Data:**Working
                      capital
                  
                  $
                  260.7
                  
                  $
                  281.7
                  
                  $
                  240.6
                  
                  $
                  272.6
                  
                  $
                  187.9Total
                      assets
                  
                  
                  1,743.2
                  
                  
                  1,534.9
                  
                  
                  1,157.6
                  
                  
                  1,171.0
                  
                  
                  1,002.9Total
                      debt
                  
                  
                  627.1
                  
                  
                  514.0
                  
                  
                  321.3
                  
                  
                  424.8
                  
                  
                  464.1Total
                      liabilities
                  
                  
                  1,237.2
                  
                  
                  1,073.2
                  
                  
                  744.6
                  
                  
                  838.7
                  
                  
                  847.5Capital
                      stock
                  
                  
                  239.5
                  
                  
                  238.4
                  
                  
                  237.0
                  
                  
                  236.0
                  
                  
                  119.5Shareholders’
                      equity
                  
                  
                  506.0
                  
                  
                  461.7
                  
                  
                  413.0
                  
                  
                  332.3
                  
                  
                  155.4**Amounts
                      under U.S. GAAP****Operating
                      Data:**Revenue
                  
                  $
                  903.3
                  
                  $
                  720.0
                  
                  $
                  711.9
                  
                  $
                  617.2
                  
                  $
                  593.8Direct
                      and
                      general and administrative costs
                  
                  
                  733.0
                  
                  
                  593.4
                  
                  
                  570.9
                  
                  
                  503.4
                  
                  
                  481.0Amortization
                  
                  
                  30.5
                  
                  
                  25.2
                  
                  
                  20.5
                  
                  
                  18.7
                  
                  
                  20.0Financing
                      charges
                  
                  
                  41.9
                  
                  
                  52.3
                  
                  
                  17.8
                  
                  
                  48.0
                  
                  
                  56.4Net
                      earnings
                  
                  
                  55.1
                  
                  
                  45.8
                  
                  
                  86.6
                  
                  
                  51.6
                  
                  
                  20.8**Per
                      Share Data:**Basic
                      earnings per share
                  
                  $
                  1.31
                  
                  $
                  1.11
                  
                  $
                  2.09
                  
                  $
                  1.57
                  
                  $
                  0.66Diluted
                      earnings per share
                  
                  
                  1.21
                  
                  
                  1.02
                  
                  
                  1.93
                  
                  
                  1.43
                  
                  
                  0.62Dividends
                      per
                      participating voting share
                  
                  
                  0.30
                  
                  
                  0.25
                  
                  
                  0.10
                  
                  
                  -
                  
                  
                  0.06Dividends
                      (in
                      U.S. $) per share*(ii)*
                  
                  
                  0.24
                  
                  
                  0.19
                  
                  
                  0.06
                  
                  
                  -
                  
                  
                  0.04Weighted
                      average shares outstanding in (000)
                  
                  
                  42,673
                  
                  
                  42,122
                  
                  
                  41,456
                  
                  
                  32,929
                  
                  
                  31,458**Balance
                      Sheet Data:**Working
                      capital
                  
                  $
                  257.7
                  
                  $
                  282.8
                  
                  $
                  254.9
                  
                  $
                  274.8
                  
                  $
                  295.5Total
                      assets
                  
                  
                  1,742.3
                  
                  
                  1,535.8
                  
                  
                  1,124.8
                  
                  
                  1,153.0
                  
                  
                  989.1Total
                      debt
                  
                  
                  627.6
                  
                  
                  515.0
                  
                  
                  322.2
                  
                  
                  424.8
                  
                  
                  464.1Total
                      liabilities
                  
                  
                  1,300.5
                  
                  
                  1,078.5
                  
                  
                  742.3
                  
                  
                  837.0
                  
                  
                  851.6Capital
                      stock
                  
                  
                  239.6
                  
                  
                  238.5
                  
                  
                  237.0
                  
                  
                  236.0
                  
                  
                  119.5Shareholders’
                      equity
                  
                  
                  441.8
                  
                  
                  457.3
                  
                  
                  382.5
                  
                  
                  316.0
                  
                  
                  137.5
  (i)
                  Reclassified.
                      See Note4to our
                      audited consolidated financial statements included elsewhere
                      in this
                      Annual Report.
 (ii)
                  Amounts
                      have
                      been converted to U.S. dollars at the average exchange rate
                      for the period
                      as provided below.
 (iii)
                  Schreiner
                      helicopter operations revenue includes some repair and overhaul
                      revenue.
 (iv)
                  Segment
                      EBITDA is defined as segment earnings before amortization,
                      restructuring
                      costs, gain on disposals of assets, debt settlement costs,
                      financing
                      charges, non-controlling interest, equity in earnings (loss)
                      of associated
                      companies, and income tax (provision) recovery. See Note 27to
                      our
                      audited consolidated financial statements included elsewhere
                      in this
                      Annual Report.
  5
  (v)
                  Total
                      capital
                      asset additions include all asset acquisitions, including aircraft,
                      as
                      well as helicopter major inspection and helicopter component
                      expenditures
                      during the period.
 (vi)
                  Refer
                      to
                      *"Exhibit 7.1 - Fixed Charge Coverage
                      Ratio"*
 
 **EXCHANGE
            RATE DATA**
  The
            following table
            sets forth, for the periods indicated, certain exchange rates based on
            the high
            and low noon buying rates in New York City for cable transfers in foreign
            currencies as certified for customs purposes by the Federal Reserve Bank
            of New
            York. The average exchange rate is based on the average of the exchange
            rates on
            the last day of each month during such periods. The rates quoted are
            the number
            of United States dollars per one Canadian dollar.
  **Year
                      ended April 30,****2005**
                    **U.S.$**
                  
                  **2004**
                    **U.S.$**
                  
                  **2003**
                    **U.S.$**
                  
                  **2002**
                    **U.S.$**
                  
                  **2001**
                    **U.S.$**Exchange
                      rate
                      at the end of period
                  
                  
                  0.7957
                  
                  
                  0.7293
                  
                  
                  0.6975
                  
                  
                  0.6377
                  
                  
                  0.6510Average
                      exchange rate during period
                  
                  
                  0.7891
                  
                  
                  0.7445
                  
                  
                  0.6498
                  
                  
                  0.6370
                  
                  
                  0.6611High
                      exchange
                      rate during period
                  
                  
                  0.8493
                  
                  
                  0.7880
                  
                  
                  0.6975
                  
                  
                  0.6636
                  
                  
                  0.6831Low
                      exchange
                      rate during period
                  
                  
                  0.7158
                  
                  
                  0.7032
                  
                  
                  0.6264
                  
                  
                  0.6179
                  
                  
                  0.6333
  The
            following table
            sets forth, for the periods indicated, the monthly high and low U.S.
            dollar
            exchange rates based on the high and low noon buying rates in New York
            City for
            cable transfers in foreign currencies as certified for customs purposes
            by the
            Federal Reserve Bank of New York. The rates quoted are the number of
            United
            States dollars per one Canadian dollar.
  **Month
                      ended****August
                      31, 2005**
                    **U.S.$**
                  
                  **July
                      31, 2005**
                    **U.S.$**
                  
                  **June
                      30, 2005**
                    **U.S.$**
                  
                  **May
                      31, 2005**
                    **U.S.$**
                  
                  **April
                      30, 2005**
                    **U.S.$**
                  
                  **March
                      31, 2005**
                    **U.S.$**High
                  
                  
                  0.8412
                  
                  
                  0.8300
                  
                  
                  0.8159
                  
                  
                  0.8082
                  
                  
                  0.8253
                  
                  
                  0.8322Low
                  
                  
                  0.8207
                  
                  
                  0.8041
                  
                  
                  0.7950
                  
                  
                  0.7872
                  
                  
                  0.7957
                  
                  
                  0.8024
  6
  We
            report our
            financial results in Canadian dollars and, unless otherwise indicated,
            references herein to "dollars", "$" or "CDN" are to Canadian dollars.
            Except
            where otherwise specifically noted, all amounts stated in U.S. dollars
            are
            included for convenience and are stated as a matter of arithmetical computation
            only. Except where otherwise specifically noted, U.S. dollar amounts
            are based
            on the April 30, 2005 noon buying rate for cable transfers of
            the Canadian
            dollar in New York City of U.S. $0.8091 as certified for customs purposes
            by the
            Federal Reserve Bank of New York. These amounts should not be construed
            as
            representations that the Canadian dollar amounts actually represent such
            U.S.
            dollar amounts or could be converted into U.S. dollars at these rates.
            These
            rates differ from some of the rates used in the preparation of our financial
            statements included in this Annual Report and therefore U.S. dollar amounts
            used
            herein may differ from corresponding actual U.S. dollar amounts that
            were
            translated into Canadian dollars in the preparation of these financial
            statements. On September 9, 2005 the noon buying rate for a Canadian
            dollar
            was U.S.$0.8511.
  **RISK
            FACTORS**
  This
            section is
            intended to be a summary of more detailed discussions elsewhere in this
            Annual
            Report. The risks described below are not the only ones we face. Additional
            risks may impair our business operations. Our business, results of operations
            or
            financial condition could be materially adversely affected if any of
            these risks
            materialize.
  **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 trends in oil and gas prices.
            Historically, the prices for oil and gas have been volatile and are 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, 2005 revenue generated
            by
            helicopter transportation services for the oil and gas industry was 67%
            of the
            Corporation’s total revenue compared to 73% for the previous fiscal
            year.
  **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 greater cost savings, including helicopter support
            operations.
            For example, companies have reduced manning levels on both old and new
            installations by using new technology to permit unmanned installations.
            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.
  **Our
            overall
            operations are highly dependent upon the level of activity in the North
            Sea**
  Approximately
            59%
            of our oil and gas based revenues for the fiscal year ended April 30,
            2005
            were derived from our helicopter support services to customers operating
            in the
            North Sea. If activity in oil and gas production and exploration in the
            North
            Sea declines, our business, financial condition and results of operations
            would
            be materially and adversely affected.
  7
 
 **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 on the basis of competitive bidding
            among
            those having the necessary equipment and resources. In our medium and
            heavy
            helicopter operations, for which helicopters comprising 89% of our helicopter
            fleet at April 30, 2005 are used, we compete against a number
            of helicopter
            operators including Offshore Logistics Inc. (“OLOG”), which is the other major
            global commercial helicopter operator, and other local and regional operators.
            In addition, many of our customers in the oil and gas industry 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 original
            equipment
            manufacturers of helicopters and their components. As such, our main
            competitors
            are also our main parts suppliers, which could result in our inability
            to obtain
            parts in a timely manner in required quantities at competitive
            prices.
  **We
            rely on
            a limited number of large, long-term offshore helicopter support contracts
            and,
            if some of these are discontinued, our revenues could
            suffer**
  We
            derive a
            significant amount of our revenue from long-term offshore helicopter
            support
            contracts with oil and gas companies. During fiscal 2005, a contract
            with
            Talisman Energy (U.K.), in respect of the North Sea was not renewed and
            subsequently expired in March 2005. That contract generated revenue of
            approximately $22 million per annum. In addition, ConocoPhillips
            Norway and
            bp/Talisman announced that after a short extension, they would not be
            renewing
            contracts that expire on September 1, 2006 and December 31,
            2005,
            respectively. These contracts generate approximately $46 million
            per annum.
            In addition, a substantial number of our long-term contracts contain
            provisions
            permitting early termination by the customer. In addition, upon expiration
            of
            their term, these contracts are subject to a bidding process that could
            result
            in the loss of these contracts to competitors. The loss of one or more
            of these
            large contracts could have a material adverse effect on our business,
            financial
            condition and results of operations.
  **If
            we are
            unable to acquire the necessary aircraft or insurance, we may not be
            able to
            take advantage of growth opportunities**
  There
            are lead
            times of up to 18 months to obtain the primary new heavy and medium
            aircraft types most often required by our customers. While up to now
            we have
            been able to acquire sufficient aircraft, 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.
  8
 
 **Helicopter
            operations involve risks that may not be covered by our insurance or
            may
            increase the cost of our insurance**
  Operation
            of
            helicopters involves some degree of risk. Hazards, such as aircraft accidents,
            adverse weather and marine 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. Our inability to renew our liability 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 financial condition.
            We
            believe we are adequately covered by insurance in light of our historical
            need
            for insurance coverage. The events of September 11, 2001 caused
            a worldwide
            increase in insurance rates, particularly in the business in which we
            operate,
            and restricted the ability of operators to acquire war liability coverage
            above
            certain limits. As a result of these and other factors, no assurance
            can be
            given that we will be able to maintain adequate insurance in the future
            at rates
            we consider reasonable. Furthermore, we are not insured for loss of profit
            or
            use of our helicopters.
  **If
            we are
            unable to maintain required government-issued licenses for our operations,
            we
            will be unable to conduct helicopter operations in the applicable
            country**
  Europe
  48.5%
            of our
            revenue for the fiscal year ended April 30, 2005 originated from
            helicopter
            flying services from our European based operations (U.K., Norway, Denmark
            and
            Ireland). To operate helicopters in the U.K. and in the U.K. sector of
            the North
            Sea, an operator must be licensed by the U.K. Civil Aviation Authority.
            Under
            applicable European law, an operator must be "effectively controlled"
            and
            "majority owned" by nationals of Member States of the European Union
            (or the
            European Economic Area) to maintain its license. Our U.K. operating subsidiary,
            CHC Scotia Limited (“Scotia”) has been licensed to operate helicopters by the
            U.K. Civil Aviation Authority, on the basis that we are (and therefore
            Scotia
            is) majority owned and controlled by European Nationals because our Executive
            Chairman, Mr. Craig L. Dobbin, a citizen of both Canada and the
            Republic of
            Ireland (a Member State of the European Union) holds a sufficient number
            of
            securities of CHC. However, the U.K. Secretary of State (generally acting
            upon
            the advice of the U.K. Civil Aviation Authority) may revoke the license
            held by
            Scotia or effectively require us to dispose of our interests in Scotia
            if at any
            time we do not satisfy applicable nationality requirements. In 1994,
            two U.K.
            competitors of CHC alleged that we did not satisfy these requirements
            and that,
            as a result, Brintel Helicopters Limited (“Brintel”), our only U.K. helicopter
            operation at the time, was not entitled to maintain its operating license.
            Although discussions and correspondence with the European Commission,
            the United
            Kingdom Department of Environment, Transport and the Regions and the
            U.K. Civil
            Aviation Authority confirmed that the issuance of ordinary shares to
            Mr. Dobbin in December 1997 allowed us to satisfy the nationality
            requirements, this will not necessarily preclude further challenges of
            Scotia's
            right to maintain its operating license on this or any other basis. Further,
            Scotia's eligibility to maintain its license could be adversely affected
            if
            Mr. Dobbin were to dispose of the shares he holds in CHC, if his
            percentage
            ownership of CHC were to otherwise decrease, or if he were to die and
            no
            alternative arrangement acceptable to the U.K. Civil Aviation Authority
            were
            implemented. Our Danish and Irish subsidiaries are subject to the same
            European
            Union nationality requirements. The revocation of these licenses would
            have a
            material adverse effect on our business, financial condition and results
            of
            operations.
  Our
            Norwegian
            subsidiaries are subject to substantially the same European Union nationality
            requirements with regard to ownership and control as are our U.K. subsidiaries
            due to Norway’s status as a Member State of the European Economic Area, and the
            agreement between the European Union and the European Economic Area harmonizing
            aviation relations between the two. On May 9, 1999, in response
            to
            objections initiated by the previous management of HSG, the Norwegian
            Ministry
            of Transport confirmed in writing that it had adopted the same position
            as the
            U.K. Civil Aviation Authority with regard to CHC's satisfaction of the
            European
            Union (and European Economic Area) nationality requirements and therefore
            would
            not challenge HSG's eligibility to hold helicopter operating licenses
            in Norway
            after our acquisition of HSG. The revocation of these licenses would
            have a
            material adverse effect on our business, financial condition and results
            of
            operations.
  9
 
 Schreiner
            Aviation
            Group (“Schreiner”), through subsidiaries, operates aircraft in Europe and is
            subject to the same European Union and European Economic Area nationality
            requirements with regard to ownership and control as are our U.K. and
            Norwegian
            subsidiaries. The Dutch Civil Aviation Authority advised us in writing
            prior to
            our acquisition of Schreiner that Schreiner was in compliance with applicable
            European ownership and control requirements and, based on information
            provided
            by us, would continue to be so following its acquisition by us. In accordance
            with Dutch Civil Aviation procedures, we were required to submit certain
            information regarding our ownership and control to the Dutch Civil Aviation
            Authority following our acquisition of Schreiner to formally demonstrate
            that
            Schreiner continues to meet the European ownership and control requirements.
            We
            have submitted the required information to the Dutch Civil Aviation
            Authority.
  We
            believe that we
            are currently “majority owned” and “effectively controlled” within the meaning
            of European Union and European Economic Area licensing requirements.
            However, it
            may be difficult to establish with certainty that we are majority owned
            by
            European nationals, given the difficulty of establishing the beneficial
            ownership of shares held through depositories and nominees.
  Canada
  Our
            helicopter
            operations in Canada are regulated by Transport Canada. Our helicopter
            operations in Canada and certain other countries are conducted pursuant
            to an
            air operator certificate issued by the Minister of Transport (Canada)
            under the
            provisions of the Aeronautics Act (Canada). One of our subsidiaries operates
            heavy helicopters off Canada’s east coast in support of the oil and gas
            industry. Our ability to conduct our helicopter operating business in
            Canada is
            dependent on our ability to maintain this certificate.
  South
            Africa
  South
            African law
            requires that at least 75% of the voting rights of a holder of a domestic
            air
            services license must be held by residents of the Republic of South Africa.
            Upon
            acquiring its interest in Court Air (Pty) Ltd. (“Court Air”), HSG obtained
            a letter from the Ministry of Transport in South Africa, confirming its
            approval
            of HSG's indirect acquisition of Court Air on the basis that Court Air's
            immediate parent, Court Air Holdings (Pty) Ltd., was a South African
            registered company. Legal advice from our South African counsel confirmed
            that
            Court Air's licenses for helicopter operations in South Africa would
            not be
            adversely affected by our acquisition of HSG, but cautioned that there
            is some
            continuing risk that the South African Ministry of Transport could reverse
            its
            prior decision. While no action with respect to these licenses has been
            taken
            since our acquisition of HSG in 1999, any such reversal of decision could
            materially and adversely affect our business, financial condition and
            results of
            operations.
  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 Administration and a valid 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 these certificates.
  Barbados
  The
            Barbados
            subsidiaries are incorporated pursuant to the Companies Act Chapter 308
            of the
            laws of Barbados as international business companies. As such, they are
            registered and licensed annually by the Ministry of Economic Development
            and
            International Business in accordance with the International Business
            Companies
            Act. An IBC license is issued annually which enables the respective companies
            to
            engage in international business or international trade and commerce.
            No
            registration, licensing or authorization is required with the Civil Aviation
            Authority which is the local governmental authority that regulates aviation
            operations in Barbados. Our ability to engage in international business
            or
            international trade and commerce is dependent on maintaining these
            licenses.
  10
 
 Other
            Countries
  Our
            operations in
            other foreign countries are regulated to various degrees by their governments
            and must be operated in compliance with those regulations and, where
            applicable,
            in accordance with our international air service licenses and air operator
            certificates. These regulations may require us to obtain a license to
            operate in
            that country, may favour local companies or require operating permits
            that can
            only be obtained by locally registered companies and may impose other
            nationality requirements. Although we have operated in most of these
            countries
            for a number of years, we cannot assure you as to what foreign governmental
            regulations may be applicable in the future to our helicopter operations.
            In
            addition, we operate in partnership with local registered companies in
            many of
            these other foreign countries. The failure of those companies to maintain
            their
            licenses or the termination of our partnerships could have a material
            adverse
            impact on our results.
  **Our
            international operators may suffer due to political, economic and regulatory
            uncertainty**
  A
            substantial
            portion of our revenue in recent years has been attributable to operations
            outside North America and Europe by our international operating segment.
            35% of
            revenue for our fiscal year ended April 30, 2005 was generated
            from these
            operations. Risks associated with some of our international operations
            include
            war and civil disturbances or other events that may limit or disrupt
            markets,
            expropriation, requirements to award contracts, concessions or licenses
            to
            nationals, international exchange restrictions and currency fluctuations,
            changing political conditions, licensing requirements 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 certain of our 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 assure
            you that
            these limitations will not affect our ability to allocate resources in
            the
            future.
  **Fluctuations
            in currencies may make it more costly for us to pay our
            debt**
  We
            prepare our
            financial statements in Canadian dollars. However, many of our revenues
            and
            operating expenses are denominated in the reporting currencies of our
            principal
            foreign operating subsidiaries, which consist primarily of pound sterling,
            Norwegian kroner, U.S. dollars, Australian dollars, South African Rand
            and
            euros. Therefore, we are exposed to exchange rate and currency risks.
            In
            preparing our financial statements, we must convert all non-Canadian
            dollar
            financial statement items to Canadian dollars at varying rates of exchange.
            This
            may ultimately result in a currency gain or loss at the end of each fiscal
            period, the outcome of which we cannot predict. Furthermore, we may sometimes
            be
            required to make capital expenditures, or payments on debt, from revenues
            earned
            in other currencies. The same is true of expenses in pound sterling,
            Norwegian
            kroner, South African Rand, Australian dollars and euros. To the extent
            that the
            currency of our revenues weakens relative to the currency of our expenses,
            we
            are exposed to exchange rate losses.
  In
            general, our
            cash outflows exceed our cash inflows to a significant extent in only
            two
            currencies, the Canadian dollar and the euro. Where applicable, we hedge
            our
            exposure to losses from fluctuations in exchange rates. Losses from changes
            in
            the value of foreign currencies relative to the Canadian dollar could
            materially
            affect our business, financial condition and results of operations.
  **The
            loss of
            key personnel could affect our growth and future success**
  Our
            success has
            been dependent on the quality of our key management personnel, including
            Craig
            L. Dobbin, our Executive Chairman, and Sylvain A. Allard, our President
            and
            Chief Executive Officer. The loss of Mr. Dobbin or Mr. Allard,
            due to
            time constraints, illness, death or any other reason, could have a material
            adverse effect on our business. In addition, since we have independent
            management teams at our divisions, loss of the services of other key
            management
            personnel at our corporate and divisional headquarters without being
            able to
            attract personnel of equal ability could have a material adverse effect
            upon
            us.
  11
 
 **We
            may
            experience work stoppages that could cause disruptions in our
            operations**
  We
            are party to the
            following collective labour agreements:
  ·
                  In
                      Norway our
                      pilots have a two-year collective agreement that expires April 30,
                      2006. Ground staff and engineers have a two-year agreement
                      that expires
                      March 31, 2006. Repair and overhaul employees have a
                      central
                      agreement extending to March 31, 2006 and two-year local
                      agreements
                      that expire on September 30,
                      2006.
  ·
                  In
                      the U.K.,
                      we have a collective agreement with our pilots and a separate
                      agreement
                      with our engineers and other ground staff, both of which expired
                      on
                      June 30, 2005. The Company has successfully negotiated
                      a new
                      five-year collective agreement with our pilots. The Company
                      anticipates a
                      successful agreement with the engineers and support staff.
                      Negotiations
                      are underway to reach new agreements with these
                      groups.
  ·
                  In
                      Denmark,
                      we have a multi-year collective agreement with our pilots that
                      will expire
                      on June 30, 2007, and separately with our engineers
                      and ground staff
                      that expires June 30, 2007.
  ·
                  In
                      Ireland,
                      we have collective pay agreements in place with our pilots,
                      aircrew and
                      engineers that expire April 30,
                      2006.
  ·
                  In
                      Australia,
                      we have a collective agreement with our pilots that expired
                      May 2,
                      2005. Our collective agreement with aircrew in Australia expired
                      in
                      December 2003 and a replacement agreement is in the process
                      of being
                      ratified. Our engineers’ agreement in Australia expired August 31,
                      2005. Negotiations on a new agreement are
                      ongoing.
  ·
                  In
                      the
                      Netherlands, we have an effective collective agreement with
                      our pilots and
                      with our ground staff and general administrative staff that
                      expired June
                      2005 and is currently under negotiations. We expect the negotiations
                      to be
                      finalized in September 2005. As at the filing date of this
                      document, no
                      agreement has been reached.
  ·
                  We
                      also have
                      a collective agreement with certain of the employees at CHC
                      Composites
                      Ltd. that expires on October 15,
                      2006.
  Employees
            at our
            other helicopter operations are not unionized.
  During
            the past
            three years we had a work stoppage at one of our operating units in Europe,
            which lasted for less than 45 days. In addition, there have been some
            short-term
            national strikes in Nigeria that have had no significant impact on our
            Nigerian
            operations.
  Schreiner
            is
            subject to the Netherlands Work Council Act and must seek the advice
            of the
            Netherlands Work Council prior to implementing a variety of decisions.
  We
            cannot assure
            you that we will not experience strikes, lockouts or other significant
            work
            stoppages in the future or that our relationship with our employees will
            continue to be good, either of which may adversely affect our business,
            financial condition and results of operations.
  **We
            are
            controlled by our principal shareholder who can determine the outcome
            of matters
            to be decided by our shareholders**
  As
            of
            April 30, 2005, Mr. Dobbin, directly and indirectly through
            Discovery
            Helicopters Inc. (“Discovery”) and O.S. Holdings Inc., beneficially
            owned 6.8% of our Class A Subordinate Voting Shares (which are
            entitled to
            one vote per share), 94.7% of our Class B Multiple Voting Shares
            (which are
            entitled to 10 votes per share) and all of our Ordinary Shares (which
            are
            entitled to one vote per 10 shares), representing in the aggregate 61.7%
            of the
            voting power on matters put before our shareholders.
  12
 
 Mr. Dobbin
            has
            advised us that if we issue additional shares of voting securities, he
            intends
            to purchase, through Discovery, sufficient voting shares to enable him
            to
            maintain control of more than 50% of the voting power attached to all
            outstanding voting shares. As a result, Mr. Dobbin would, subject
            to
            certain exceptions, continue to (1) control the outcome of all
            matters
            requiring a majority vote of shareholders, including the power to elect
            all of
            the directors but excluding those matters that require an affirmative
            vote of
            the majority of disinterested minority shareholders, (2) be able
            to prevent
            the approval of any matter requiring shareholder approval and (3) be
            likely
            to determine the outcome of any matter that under applicable corporate
            law would
            require a shareholders' resolution passed by not less than two-thirds
            of the
            votes cast, such as the sale by us of all or substantially all of our
            assets or
            an amalgamation with an unrelated corporation.
  **If
            our
            Norwegian operating subsidiaries incur substantial operating losses,
            they may be
            subject to liquidation under Norwegian law**
  The
            corporate law
            under which our Norwegian subsidiaries operate differs from Canadian
            and U.S.
            law in a number of areas, including with respect to corporate liquidation.
            Under
            Norwegian law, if the losses of any of our Norwegian subsidiaries reduce
            that
            subsidiary's equity to an amount less than 50% of its share capital or
            the
            equity of the subsidiary becomes 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 our Norwegian subsidiaries as a result
            of
            operating losses are substantial and if no appropriate resolutions are
            made,
            they could ultimately result in liquidation, which would have a material
            adverse
            effect on our business, financial condition and results of
            operations.
  **Failure
            to
            maintain a record of acceptable safety performance may have an adverse
            impact on
            our ability to attract and retain customers**
  Our
            customers
            consider safety and reliability two primary attributes when selecting
            a provider
            of helicopter transportation services. If we fail to maintain a record
            of safety
            and reliability that is satisfactory to our customers, our ability to
            retain
            current customers and attract new customers may be adversely
            affected.
  **Assimilating
            our recent acquisitions or any future material acquisitions into our
            corporate
            structure may strain our resources and have an adverse impact on our
            business**
  The
            assimilation of
            recent acquisitions and any future material acquisitions we may make
            into our
            company will require substantial time, effort, attention and dedication
            of
            management resources and may distract our management in unpredictable
            ways from
            our ordinary operations. The transition process could create a number
            of
            potential challenges and adverse consequences for us, 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
            our 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 acquiring such acquisitions or any future material
            acquisition.
  **If
            the
            assets in our 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 U.K., Netherlands and Norway. As of April 30, 2005,
            there was a
            $75.7 million funding deficit related to our various defined benefit
            pension plans which require ongoing funding by us and a $46.5 million
            obligation related to our various unfunded plans.
  13
 
 Our
            estimate of
            liabilities and expenses for pensions incorporates significant assumptions,
            including interest used to discount future liabilities and expected long-term
            rates of return on plan assets. Our pension contributions and expense,
            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 require increases in our pension expense. Changing
            economic
            conditions, poor pension investment returns or other factors may require
            us to
            make substantial cash contributions to our pension plans in the future,
            preventing the use of such cash for other purposes and adversely affecting
            our
            liquidity.
  **Our
            customers are concentrated in the oil and gas industry and, as a result,
            our
            credit exposure within this industry is significant**
  The
            majority of our
            customers are engaged in oil and gas production and exploration. This
            concentration may impact our 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
            our financial condition.
  **We
            are
            subject to certain environmental regulations which may have an adverse
            impact on
            our business**
  We
            are subject to
            extensive laws, rules, regulations and ordinances relating to pollution
            and
            protection of the environment, including those relating to emissions
            to the air,
            discharges to waters, the use, storage and disposal of petroleum and
            other
            regulated materials and the remediation of contaminated sites.
  Our
            operations
            sometimes involve the use, handling and storage of material that may
            be
            classified as environmentally hazardous. Laws protecting the environment
            have
            become more stringent in Canada and certain other countries in recent
            years and
            may, in certain circumstances, impose liability for 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 or for our acts that were in compliance with
            all
            applicable laws at the time these acts were performed. We believe we
            are in
            substantial compliance with applicable environmental requirements and
            that
            ensuring compliance has not, to date, had a material adverse effect on
            our
            financial position. We cannot, however, predict the likelihood of change
            to
            these laws or in their enforcement nor the impact of any such change,
            or
            discovery of previously unknown conditions which may require unanticipated
            costs, on our financial position.
  **The
            reorganization and consolidation of our operations may strain our resources
            and
            have an adverse impact on our business**
  The
            reorganization
            and consolidation of our operations into a new organizational structure
            will
            require substantial time, effort, attention and dedication of management
            resources to complete and may distract our management in unpredictable
            ways from
            our ordinary operations. The transition process could create a number
            of
            potential challenges and adverse consequences for us, including the possible
            loss of key employees, customers or suppliers, a possible loss of revenue
            or an
            increase in operating or other costs. These types of challenges and
            uncertainties could have a material adverse effect on our business, financial
            condition and results of operations. We may not be able to effectively
            manage
            the reorganized operations and assets or realize any of the anticipated
            benefits
            from the restructuring.
  **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**
  Income
            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 foreign and local jurisdictions.
  14
 
 Our
            estimate of tax
            related assets, liabilities, recoveries and expenses incorporates significant
            assumptions. These assumptions include, but are not limited to, the tax
            rates 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.
   ITEM
                      4.
                  INFORMATION
                      ON THE COMPANY
  **HISTORY
            AND
            DEVELOPMENT OF THE COMPANY**
  CHC
            Helicopter
            Corporation was formed by amalgamation on July 31, 1987 under
            the Canada
            Business Corporations Act. ** The
            Corporation's
            registered office is 34 Harvey Road, 5 th Floor, St. John’s,
            Newfoundland and Labrador, Canada, A1C 5V5.  The
            Company's head
            office is 4740 Agar Drive, Richmond, British Columbia, Canada, V7B 1A3
            (telephone number 604-276-7500).
  In
            the United
            States, our agent for service of process is CT Corporation System, 111
            Eighth
            Avenue, 13 th Floor,
            New
            York, New York, 10011 (telephone number 1-800-223-7567).
  The
            Company was
            created in 1987 as a holding company to combine the operations of Sealand
            Helicopters Limited and Toronto Helicopters Limited (both of which were
            Canadian
            companies controlled by Mr. Craig L. Dobbin, Chairman of the Board
            and
            Chief Executive Officer of the Company and a principal shareholder) and
            to
            acquire Okanagan Helicopters Ltd., a Canadian company that operated
            125
            helicopters at the time of its acquisition. Since its formation, the
            Company has
            grown internally as well as through acquisitions; the most significant
            of which
            were the acquisition in 1988 of the majority of the assets of Ranger
            Helicopters
            Limited, which was then operating 37 helicopters; the acquisition in
            1989 of all
            the outstanding shares of Viking Helicopters Limited, which was then
            operating
            60 helicopters; the acquisition in 1993 and 1994 of all the outstanding
            shares
            of Brintel Holdings Limited, which was then operating approximately 25
            heavy
            helicopters; the acquisition in August 1999 of all the outstanding shares
            of
            HSG, which was then operating 115 helicopters; and the acquisition in
            February
            2004 of all the shares of Schreiner Luchtvaart Groep B.V. (“Schreiner”) which
            was then operating 43 aircraft.
  **PRINCIPAL
            ACQUISITIONS AND CAPITAL EXPENDITURES**
  The
            Company has
            undergone significant restructuring in recent years.
  On
            January 13, 2005
            the Company acquired the assets and capabilities of Coulson Aero Technologies
            Ltd. (“Coulson”), a British Columbia based helicopter component and turbine
            engine maintenance repair and overhaul (“MRO”) provider.
  On
            September 23, 2004 the Company acquired a majority of the shares
            of Aero
            Turbine Support Ltd. (“ATSL”). ATSL is an independent aircraft engine repair and
            overhaul company servicing General Electric CT58/T58 and Pratt & Whitney
            Canada, PT6T turboshaft engines.
  On
            August 17,
            2004 the Company acquired 100% of the shares of Multifabs Survival Ltd.
            (“Multifabs”), an Aberdeen based company specializing in the production of cold
            water survival suits for military forces, emergency services and offshore
            oil
            and gas companies around the world.
  On
            March 5,
            2004 the Company completed the acquisition of U.K.-based Whirly Bird
            Services
            Limited (“Whirlybird”). Whirlybird is a global supplier of survival suits and
            related aircraft passenger survival equipment.
  15
 
 On
            February 16, 2004 the Company completed its acquisition of Schreiner,
            located in the Netherlands, for total consideration of $143.9 million
            ( € 87.1 million),
            including the settlement of $41.5 million ( € 25.2 million)
            of Schreiner’s debt. At April 30, 2004 Schreiner’s fleet of 38 aircraft
            consisted of 28 helicopters and 10 fixed-wing aircraft. In addition,
            Schreiner
            operated nine aircraft belonging to its 40% owned equity investee in
            Nigeria.
  Capital
            asset
            additions include all asset acquisitions, including aircraft, as well
            as
            helicopter major inspection and helicopter component expenditures. Capital
            asset
            additions of $276.4 million were incurred during the year ended
            April 30, 2005. Of this amount $170.6 million related to
            aircraft
            additions (net of the application of $23.9 million in aircraft deposits)
            and
            modifications and $27.0 million related to other property and
            equipment.
            Capital expenditures for helicopter major components totalled
            $63.3 million. We also spent $15.5 million on helicopter
            major
            inspections. Proceeds on disposal of capital assets were $90.9 million
            for
            the year ended April 30, 2005.
  Capital
            asset
            additions of $185.1 million were incurred during the year ended
            April 30, 2004. Of this amount, $99.0 million related to
            aircraft
            additions (net of the application of $20.0 million in aircraft deposits)
            and
            modifications and $17.9 million related to other property and
            equipment.
            Capital expenditures for helicopter major components totalled
            $59.0 million. We also spent $9.2 million on helicopter
            major
            inspections. Proceeds on disposal of capital assets were $126.9 million
            for
            the year ended April 30, 2004.
  Capital
            asset
            additions of $105.6 million were incurred during the year ended
            April 30, 2003. Of this amount, $18.4 million related to
            aircraft
            additions and modifications and $26.3 million related to other
            property and
            equipment. Capital expenditures for helicopter major components totalled
            $47.5 million. We also spent $13.4 million on helicopter
            major
            inspections. Proceeds on disposal of capital assets were $74.9 million
            for
            the year ended April 30, 2003.
  **BUSINESS
            OVERVIEW**
  **General**
  We
            are the world’s
            largest global commercial helicopter operator. We, through our subsidiaries,
            have been providing helicopter services for more than 50 years
            and
            currently operate in over 30 countries, on all seven continents and in
            most of
            the major offshore oil and gas producing regions of the world. Our major
            operating units are based in the United Kingdom, Norway, the Netherlands,
            South
            Africa, Australia and Canada.
  We
            provide
            helicopter transportation services to a broad base of major energy companies
            and
            independent and state-owned oil and gas companies. We principally provide
            helicopter transportation services for production and exploration activities
            and, to a lesser extent, parts and equipment, to, from and among offshore
            production platforms, drilling rigs and other facilities. During the
            year we
            created Heli-One, the world’s largest independent helicopter support company to
            provide repair and overhaul services, aircraft leasing, integrated logistics
            support, helicopter parts sales and distribution, safety and survival
            equipment
            and other related services. We also provide helicopter transportation
            services
            for emergency medical and search and rescue activities (“EMS/SAR”) and ancillary
            services such as flight training.
  In
            general, we
            target opportunities with long-term contracts and where customers require
            sophisticated medium and heavy helicopters operated by highly trained
            pilots. We
            are a market leader in most of the regions that we serve, with an established
            reputation for quality and reliable service. We are the largest operator
            in the
            North Sea, one of the world’s largest oil producing regions, and a global
            operator servicing the oil and gas industry in South America, Africa,
            Australia
            and Asia. For the fiscal year ended April 30, 2005 revenue generated
            by
            helicopter transportation services for the oil and gas industry was 67%
            of the
            Corporation’s total revenue compared to 73% for the previous fiscal
            year.
  We
            believe that our
            repair and overhaul and flight training capabilities reduce our costs
            and give
            us control over the quality of our maintenance and pilot training. We
            believe
            that these capabilities enhance our competitive position, further diversify
            our
            revenue streams and solidify our worldwide reputation as a full-service,
            high-quality helicopter operator. Furthermore, we believe that our repair
            and
            overhaul capabilities provide us with a source of relatively stable third-party
            revenue. We also provide flight training, helicopter leasing and safety
            and
            survival equipment services.
  16
 
 Our
            global customer
            base consists of a broad range of oil and gas companies and governmental
            bodies
            and includes operating subsidiaries of, and government bodies, in:
  Agip
                  
                  DeBeers
                  
                  Republic
                      of
                      IrelandApache
                  
                  Exxon
                      Mobil
                  
                  Royal
                      Dutch/Shell Groupbp
                  
                  Kerr-McGee
                  
                  StatoilChevron
                  
                  Maersk
                  
                  TotalFinaElfCommonwealth
                      of Australia
                  
                  Norsk
                      Hydro
                  
                  UnocalConocoPhillips
                  
                  Premier
 
 We
            service the
            majority of our customers under contracts that typically contain some
            combination of fixed and hourly rates and have terms ranging from two
            to five
            years with one or more one-year renewal options. We derived approximately
            67% of
            our revenue for the year ended April 30, 2005 from such long-term
            contracts.
  **Competitive
            Strengths**
  We
            believe that we
            have the following competitive advantages:
  ·
                  ***Global
                      Coverage***.
                      We
                      currently provide helicopter transportation services in over
                      30 countries
                      and on all seven continents. Our broad geographic coverage
                      and
                      decentralized management structure enable us to respond quickly
                      and cost
                      effectively to customer needs and new business opportunities
                      while
                      adhering to local market regulations and customs. Since new
                      contract
                      start-up costs, including equipment and crew transportation
                      and base
                      set-up costs, can represent a significant portion of operating
                      expenses,
                      our global network of bases allows us to reallocate equipment
                      and crews
                      efficiently and bid on new contracts at competitive rates.
                      Additionally,
                      as the multinational oil and gas companies seek service providers
                      who can
                      serve them in many locations around the world, our geographic
                      coverage
                      makes us one of only two global providers who can effectively
                      compete for
                      many of these contracts.
  ·
                  ***Focus
                      on Safety***.****In
                      over
                      50 years of operations, we have developed sophisticated
                      safety and
                      training programs and practices that have resulted in a strong
                      safety
                      record. We have never failed the stringent safety and performance
                      audits
                      conducted by most of our customers, including oil and gas companies,
                      before providers are permitted to bid on new projects. Our
                      advanced flight
                      training facility in Norway provides a wide variety of training
                      services
                      to our employees as well as civil and military organizations
                      around the
                      world. Providing these advanced training services enhances
                      our global
                      reputation for leadership and excellence in helicopter
                      services.
  ·
                  ***Low
                      Cost Operator****.*We
                      believe
                      that we have significant cost advantages over our competition
                      with respect
                      to our medium and heavy helicopter services, which increases
                      our
                      likelihood of winning new contracts. We believe that our economies
                      of
                      scale and in-house repair and overhaul capabilities give us
                      a cost
                      advantage over competitors who must incorporate higher third-party
                      repair
                      and overhaul costs into their bids. Furthermore, our broad
                      network of
                      regional bases allows us to efficiently deploy our existing
                      helicopters to
                      service contracts worldwide.
  ·
                  ***Long-Term
                      Customer Relationships***.
                      We have
                      worked successfully for many years with major oil and gas companies,
                      some
                      of which have been our customers continuously for more than
                      20 years.
                      As a result of our established long-term customer relationships,
                      our focus
                      on safety and flight training, our crews’ experience and the quality of
                      our services, we consistently meet or exceed our customers’ standards and
                      are invited to bid on new projects. In addition to standard
                      helicopter
                      transportation services, certain of our customers rely on us
                      for ancillary
                      services, including our computerized logistics systems for
                      crew scheduling
                      and passenger handling services, all of which help to strengthen
                      our
                      customer relationships.
  ·
                  ***Large,
                      Modern and Diversified Fleet of Aircraft***.
                      To meet the
                      diverse operational requirements of our customers, we maintain
                      a large
                      fleet that includes some of the most sophisticated helicopters
                      in the
                      world. As of April 30, 2005 we operated 215 aircraft,
                      comprised of 76
                      heavy helicopters, 115 medium helicopters, 10 light helicopters
                      and 14
                      fixed-wing aircraft. Our helicopter fleet consists of ten types
                      of
                      helicopters manufactured primarily by Eurocopter, Sikorsky
                      and Bell.
                      During the year, we purchased two Sikorsky S-92s to compliment
                      our fleet
                      of 18 Super Puma MkIIs. These two aircraft types represent
                      the most
                      advanced civilian heavy helicopter types in
                      service.
  17
 
 ·
                  ***Retention
                      of Asset Value***.
                      We estimate
                      that the fair market value of our owned aircraft fleet as of
                      April 30, 2005 was approximately $628.9 million,
                      exceeding its
                      net book value by approximately $53.2 million. As well,
                      since
                      approximately 70-75% of a helicopter's value resides in its
                      major
                      components, including engines, gearboxes and transmissions,
                      which are
                      replaced or upgraded on a regular basis, older models of helicopters
                      that
                      have been upgraded are capable of meeting many of the same
                      performance
                      standards as newer models. As a result, when helicopters are
                      sold as part
                      of our ongoing fleet management, we often receive prices in
                      excess of the
                      net book value. For example, between May 1, 2000 and
                      April 30,
                      2005 we disposed of helicopters for gross proceeds of $341.3 million,
                      which was approximately 19% higher than their aggregate net
                      book value of
                      approximately $287.5 million as at the dates of
                      disposition.
  ·
                  ***In-House
                      Repair and Overhaul Business***.
                      We believe
                      that our repair and overhaul activities reduce our costs, diversify
                      our
                      revenue streams and help position us as a full-service, high-quality
                      helicopter operator. We are a market leader in repair and overhaul
                      capability and have the only licensed commercial engine and
                      major
                      component repair and overhaul facility in the world for the
                      Eurocopter
                      Super Puma helicopter, other than the original equipment manufacturers
                      and
                      have the capability to support several other helicopter types
                      including
                      Eurocopter Dauphin, Sikorsky S61, S76 and Bell 212/412.
                      This
                      capability allows us to control the quality and the cost of
                      our helicopter
                      maintenance, repair and refurbishment.
  ·
                  ***Proven
                      and Experienced Management Team***.
                      Our senior
                      management team, including our executive management, the divisional
                      presidents and managing directors, have an average of over
                      20 years
                      of experience in the helicopter operations industry. Our management
                      team
                      has implemented a series of strategic initiatives in recent
                      years,
                      including, most recently, our global restructuring initiative
                      and the
                      creation of the Heli-One support group. Heli-One is the world’s largest
                      independent helicopter support company, which offers services
                      to the
                      helicopter industry including: repair and overhaul, integrated
                      logistics
                      support, aircraft leasing, heavy maintenance, design and engineering,
                      helicopter parts distribution, inventory management and safety
                      and
                      survival equipment. In addition, we have successfully integrated
                      a
                      significant number of acquisitions during the Corporation’s
                      history.
  **Business
            Strategy**
  Our
            goal is to
            enhance our leadership position in the global helicopter services industry
            by
            continuing to provide value-added services to our customers while maximizing
            our
            return on assets and cash flows. In our pursuit of this goal, we intend
            to focus
            on the following key initiatives:
  ·
                  ***Strengthen
                      Competitive Position in Existing Markets.***We intend to
                      increase our ability to win new contracts, renew existing contracts,
                      strengthen our existing customer relationships and enhance
                      our competitive
                      position by improving our focus on customer needs and reducing
                      costs while
                      maintaining our high standards for safety and reliability.
                      Our new
                      organizational structure means that we are ideally positioned
                      to service
                      increased demand from existing customers and new entrants to
                      the
                      marketplace.
  ·
                  ***Growth
                      Through Acquisition******.***During the
                      year we acquired Multifabs, a majority position in ATSL, and
                      the assets
                      and capabilities of Coulson. These acquisitions are an important
                      component
                      of Heli-One, our independent support group. We intend to seek
                      out
                      additional acquisition opportunities to further strengthen
                      our position in
                      existing markets and expand into new
                      markets.
  ·
                  ***Selectively
                      Expand International Operations****.*We intend to
                      capitalize on our broad geographic coverage, our long-term
                      customer
                      relationships and our fleet capabilities to pursue new opportunities
                      in
                      Africa, Asia and other developing oil and gas regions, which
                      are expected
                      to be the fastest growing markets for offshore helicopter transportation
                      services.
  ·
                  ***Expand
                      the Helicopter Support Business with Heli-One******.***We plan to
                      expand our repair and overhaul business by further penetrating
                      the Super
                      Puma major component and engine overhaul market and pursue
                      new
                      opportunities in medium aircraft maintenance and military helicopter
                      support. With the recent acquisitions of Multifabs, ATSL and
                      Coulson, and
                      the start-up of the Corporation’s S61/S76 dynamic component overhaul
                      facility, Heli-One is developing the capability to support
                      on a
                      nose-to-tail basis our entire fleet of over 80 S61 and S76
                      aircraft and to
                      compete for helicopter work for a worldwide fleet of more than
                      500
                      aircraft in this sector. In addition to repair and overhaul
                      Heli-One
                      provides the following services to the helicopter
                      industry:
  18
 
 -
                  Integrated
                      logistics support;
 -
                  Aircraft
                      leasing;
 -
                  Heavy
                      maintenance;
 -
                  Design
                      and
                      engineering;
 -
                  Helicopter
                      parts and distribution;
 -
                  Inventory
                      management; and
 -
                  Safety
                      and
                      survival equipment manufacturing and
                      support.
  ·
                  ***Pursue
                      Profitable New Business Beyond the Oil and Gas
                      Sector***.
                      We believe
                      that we have a competitive advantage in the EMS/SAR sectors
                      by virtue of
                      our experience in servicing the oil and gas industry. We believe
                      that this
                      advantage stems from our ability to operate sophisticated twin-engine
                      medium and heavy helicopters with highly trained pilots in
                      complex
                      situations for large customers. Typically EMS/SAR customers
                      require the
                      operator to meet stringent quality standards on a long-term
                      basis,
                      excluding from the bidding process operators who would otherwise
                      compete
                      primarily on the basis of price.
  ·
                  ***Continue
                      to Focus on Long-Term Contracts***.
                      We seek to
                      enter into long-term contracts with our major customers in
                      order to
                      maximize the stability of our revenue. Revenue from operations
                      under
                      long-term contracts represented approximately 68% of our revenue
                      during
                      the last two fiscal years.
  **Industry**
  Helicopter
            Flying
            Operations
  Helicopters
            in use
            today may be divided into two general categories. Single engine (light)
            aircraft, which have a passenger capacity of three to six, operate under
            visual
            flight rules (“VFR”), (daylight and good weather flying only) and can be
            operated with one pilot. Given their low passenger capacity and inability
            to fly
            in poor weather conditions, these aircraft are generally limited to onshore
            operations. In recent years, we have sold most of our operations and
            aircraft in
            this category and, at April 30, 2005, we had only 10 light helicopters
            in
            our fleet. However, we have a 38% interest in Inversiones Aereas S.L.
            (“Inaer”),
            which operates light and medium aircraft in the Spanish onshore
            market.
  Twin-engine
            (heavy
            and medium size) aircraft generally require two pilots, have a passenger
            capacity of nine to twenty-six and can operate under instrument flight
            rules
            (“IFR”), (daytime and night time flying under a variety of weather conditions).
            The greater passenger capacity, longer range, and ability to operate
            in adverse
            weather conditions make these aircraft more suitable than single engine
            aircraft
            for offshore support. The high cost of these larger aircraft and their
            limited
            availability tend to lessen competition from smaller operations. We operated
            191
            helicopters in this category (76 heavy and 115 medium helicopters) as
            at
            April 30, 2005.
  Various
            types of
            helicopters are required to meet the diverse needs of the industries
            they serve.
            Medium to heavy helicopters are generally utilized to support the oil
            and gas,
            construction and forestry industries, and for EMS/SAR. They are also
            used for
            transporting larger numbers of passengers and supplies or for lifting
            heavy
            weights, and are capable of operating during the night and in adverse
            weather
            conditions. Typically equipped with IFR equipment, medium to heavy helicopters
            are capable of long distance flights to offshore oil platforms. Where
            appropriate, specialized equipment is installed for providing emergency
            medical
            service support or for use in certain challenging environments such as
            the North
            Sea. Light to medium helicopters are used to support the utility and
            mining
            sectors, as well as certain parts of the construction and forestry industry,
            where transporting a smaller number of passengers or carrying light loads
            is
            required.
  19
 
 We
            contract with
            customers to provide aircraft for various periods of time. Contracts
            for
            helicopter services in support of oil and gas exploration activities
            are
            generally short-term, usually twelve months or less. Contracts for transport
            of
            personnel and equipment to oil and gas production sites are generally
            long-term
            with terms typically ranging from two to ten years, averaging approximately
            3.5 years. Such contracts are ordinarily awarded following a competitive
            bidding process among pre-qualified bidders. Contracts may be based on
            a fixed
            monthly fee with an additional hourly charge for actual flight time,
            or solely
            on an hourly charge for actual flight time. Approximately 51% of our
            fiscal 2005
            flying revenue (fiscal 2004 - 56%) was derived from hourly charges and
            the
            remaining 49% (fiscal 2004 - 44%) was generated by fixed monthly charges.
            Typically, we supply crew and maintenance personnel in addition to aircraft.
            However, we have a limited number of contracts under which we supply
            aircraft
            only to local helicopter operators, often in conjunction with repair
            and
            overhaul and training services. We will continue to pursue this latter
            type of
            contract as such arrangements may allow us to partner with other local
            operators
            to effectively penetrate new markets.
  A
            substantial
            number of our long-term contracts contain provisions permitting early
            termination by the customer without penalty. However, during the last
            six fiscal
            years, with the exception of contracts that were transferred to another
            operator
            due to the merger of oil and gas producers and a contract with the U.N.
            Monitoring, Verification and Inspection Commission that was cancelled
            upon the
            start of the war in Iraq, no customer has exercised that right. 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. Generally, an incumbent
            operator has a competitive advantage in the bidding process stemming
            from its
            relationship with the customer, its knowledge of site characteristics,
            its
            understanding of the cost structure for the specific operations and its
            proven
            ability to meet service level requirements and provide the necessary
            aircraft
            and services.
  Our
            contracts
            generally require that fuel be provided directly 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.
  New
            contract
            start-up costs can represent a significant portion of operating costs.
            We
            therefore believe that our global network of bases and aircraft operating
            licenses give us a competitive advantage in bidding on new contracts
            throughout
            most of the world. We are well positioned to meet the requirements of
            customers
            in most regions of the world within short periods of time at competitive
            rates.
            We also have long-term working relationships with most of the major oil
            and gas
            companies, including the operating subsidiaries of bp, Exxon Mobil,
            ConocoPhillips, Shell, Statoil, Norsk Hydro, TotalFinaElf, Chevron, Maersk
            and
            Unocal. Many of these companies have been customers of ours for more
            than
            20 years.
  We
            are one of only
            two global providers of helicopter transportation services to the offshore
            oil
            and gas industry. There are other competitors, but they are smaller,
            regional
            operators. We have a significant market position in all global offshore
            oil and
            gas markets, with the exception of the Gulf of Mexico, where we do not
            have a
            presence. Our absence in that market stems from the fact that the oil
            and gas
            companies operating in the Gulf of Mexico utilize primarily light and
            medium
            helicopters under short-term contracts. We estimate that we have a market
            share
            of approximately 60% in the combined Norwegian, U.K., Danish and Dutch
            sectors
            of the North Sea, the world’s largest area of offshore oil and gas development.
            We are well positioned to capitalize on future growth opportunities.
            As oil and
            gas wells are depleted, it is expected that oil companies will go further
            offshore to develop deep-water reserves. Our global presence, long-term
            customer
            relationships and modern fleet of aircraft position us to participate
            in new oil
            and gas developments in most offshore oil and gas regions.
  At
            present, the
            limited supply of helicopters available for use in the offshore oil and
            gas
            industry is a competitive advantage for us. In our experience, the Super
            Puma
            and, more recently, the Sikorsky S-92 aircraft are the aircraft of choice
            for
            major oil and gas companies operating in the North Sea due to their superior
            maximum flying range, passenger capacity and cabin crew comfort. At present,
            we
            and our major competitor operate approximately 90% of the worldwide fleet
            of
            commercial Super Puma aircraft configured for offshore work. The manufacturers
            of these aircraft do not stock new aircraft. The current lead time to
            acquire a
            new Super Puma or S-92 is approximately 18 months. During the
            year, we
            introduced two Sikorsky S-92 aircraft in Norway. The S-92 is a heavy
            helicopter
            that has similar capabilities to the Super Puma MkII.
  The
            following
            tables break down our revenues for helicopter operations by industry
            sector and
            geographic area, respectively, and indicate revenue for each sector or
            area as a
            percentage of total revenue from helicopter operations for each of the
            fiscal
            years ended April 30, 2005, 2004, and 2003.
  20
 **Revenue
                        by Industry Sector**
                    
                    **2005**
                    
                    **2004**
                    
                    **2003**(in
                        millions)
                    
                    
                    %
                    (in
                        millions)
                    
                    
                    %
                    (in
                        millions)
                    
                    
                    %Oil
                        and Gas
                        Production
                    
                    $
                    508.3
                    
                    
                    64.9
                    %
                    
                    439.9
                    
                    
                    68.1
                    %
                    
                    420.7
                    
                    
                    64.8
                    %Oil
                        and Gas
                        Exploration
                    
                    
                    96.3
                    
                    
                    12.3
                    %
                    
                    88.6
                    
                    
                    13.7
                    %
                    
                    102.6
                    
                    
                    15.8
                    %EMS/SAR
                    
                    
                    107.0
                    
                    
                    13.6
                    %
                    
                    62.0
                    
                    
                    9.6
                    %
                    
                    57.0
                    
                    
                    8.8
                    %Other
                    
                    
                    47.4
                    
                    
                    6.0
                    %
                    
                    42.8
                    
                    
                    6.6
                    %
                    
                    61.5
                    
                    
                    9.5
                    %Passenger
                        Transportation
                    
                    
                    24.7
                    
                    
                    3.2
                    %
                    
                    12.6
                    
                    
                    2.0
                    %
                    
                    7.1
                    
                    
                    1.1
                    %Total
                    
                    $
                    783.7
                    
                    
                    100.0
                    %
                    $
                    645.9
                    
                    
                    100.0
                    %
                    $
                    648.9
                    
                    
                    100.0
                    %
 
 **Revenue
                      by Geographic Area**
                  
                  **2005**
                  
                  **2004**
                  
                  **2003**(in
                      millions)
                  
                  
                  %
                  (in
                      millions)
                  
                  
                  %
                  (in
                      millions)
                  
                  
                  %European
                      OperationsNorway
                  
                  $
                  186.5
                  
                  
                  23.8
                  %
                  $
                  189.3
                  
                  
                  29.3
                  %
                  $
                  181.9
                  
                  
                  28.0
                  %U.K.
                  
                  
                  251.4
                  
                  
                  32.1
                  %
                  
                  248.3
                  
                  
                  38.4
                  %
                  
                  282.2
                  
                  
                  43.5
                  %Total
                  
                  
                  437.9
                  
                  
                  55.9
                  %
                  
                  437.6
                  
                  
                  67.7
                  %
                  
                  464.1
                  
                  
                  71.5
                  %International
                      OperationsAustralia
                  
                  
                  77.6
                  
                  
                  9.9
                  %
                  
                  72.3
                  
                  
                  11.2
                  %
                  
                  63.0
                  
                  
                  9.7
                  %Africa
                  
                  
                  47.8
                  
                  
                  6.1
                  %
                  
                  39.9
                  
                  
                  6.2
                  %
                  
                  33.7
                  
                  
                  5.2
                  %Other
                  
                  
                  108.1
                  
                  
                  13.8
                  %
                  
                  79.6
                  
                  
                  12.3
                  %
                  
                  88.1
                  
                  
                  13.6
                  %Total
                  
                  
                  233.5
                  
                  
                  29.8
                  %
                  
                  191.8
                  
                  
                  29.7
                  %
                  
                  184.8
                  
                  
                  28.5
                  %Schreiner
                      Operations
                  
                  
                  112.3
                  
                  
                  14.3
                  %
                  
                  16.5
                  
                  
                  2.6
                  %
                  
                  -
                  
                  
                  0.0
                  %TOTAL
                  
                  $
                  783.7
                  
                  
                  100.0
                  %
                  $
                  645.9
                  
                  
                  100.0
                  %
                  $
                  648.9
                  
                  
                  100.0
                  %
  European
            Operations
  We
            are one of the
            leading providers of helicopter services in Europe. We provide services
            to the
            offshore oil and gas industry to customers located primarily in the U.K.,
            Norwegian and Danish sectors of the North Sea. We also provide
            helicopter
            services (primarily search and rescue) in Ireland. Our primary European
            bases
            are located in Aberdeen (Scotland), Stavanger (Norway), Bergen (Norway)
            and Den
            Helder (the Netherlands) where we conduct our operations in the respective
            sectors of the North Sea. We operate 69 aircraft in this segment,
            consisting of 50 heavy and 19 medium aircraft. Included in the heavy
            aircraft
            were 37 Super Pumas including 16 Super Puma MkIIs and two Sikorsky S-92
            aircraft.
  *Norwegian
            Operations:* While the focus on
            the oil and gas sector in Norway is substantially the same as in the
            U.K.,
            differences in regulatory regimes and territorial issues make it more
            appropriate to service the Norwegian sector of the North Sea from
            Norway.
            These regulatory differences also limit somewhat our operational flexibility
            and
            impact our costs.
  Our
            Norwegian
            operations primarily service oil and gas customers in the North Sea,
            including Statoil, ConocoPhillips, bp and Norsk Hydro.
  We
            operate 27
            helicopters in Norway consisting of 23 heavy helicopters, including 17
            Super
            Pumas (of which 11 are Super Puma MkIIs) and four medium helicopters.
            Super Puma
            helicopters are frequently requested by major oil and gas companies and,
            in our
            opinion, are currently in short supply within both the new helicopter
            and
            helicopter resale markets.
  The
            other major
            helicopter service provider in the Norwegian sector of the North Sea
            is
            Norsk Helicopters.
  *U.K.
            Operations:* Our U.K.
            operations primarily service oil and gas customers in the U.K. sector
            of the
            North Sea, including operating subsidiaries of Exxon Mobil, ConocoPhillips,
            Apache, Kerr-McGee and TotalFinaElf, some of which we have serviced for
            more
            than 10 years.
  21
 
 Our
            U.K. operations
            also manage our operations in Denmark, where we signed a long-term contract
            in
            1999 with Maersk to provide offshore helicopter support. This contract
            was
            recently extended for one year to June 2006. In Ireland the services
            of search
            and rescue are performed as well as oil and gas support. The Irish SAR
            contract
            was recently extended for two years to July 2007.
  We
            operate 27
            helicopters in our Aberdeen, U.K. operations primarily in the U.K. sector
            of the
            North Sea. Our U.K. fleet consists of 14 heavy helicopters and
            13 medium
            helicopters, many of which are specially equipped for the North Sea.
            Included in our heavy helicopter fleet are 13 Super Pumas, including
            five Super
            Puma MkIIs.
  We
            operate five
            helicopters in Denmark. To service the Irish SAR contract we operate
            six heavy
            helicopters.
  Subsequent
            to
            fiscal 2005 we were successful in being awarded new contracts for the
            provision
            of Super Puma helicopter services to (1) Nexen - five-year contract
            plus
            two two-year options and (2) Marathon - five-year contract. We
            believe we
            will continue to have opportunities to obtain new contracts in the U.K.
            portion
            of the North Sea. The other major helicopter service providers
            in the U.K.
            sector of the North Sea are Bristow Helicopters Ltd. and Bond
            Offshore
            Helicopters Limited.
  International
            Operations
  Our
            international
            operations provide helicopter services in 24 countries in Africa, Asia,
            Australia, the Middle East, South America and offshore Canada, principally
            to
            customers in the oil and gas sector. We believe that the collective
            international experience we have gained over the last 46 years
            enables us
            to draw upon our knowledge of local conditions to provide high levels
            of
            customer service in diverse operating environments. Our international
            operations
            consist of CHC International, based in Vancouver, Canada; CHC Australia,
            based
            in Adelaide, Australia; and CHC Africa, based in Cape Town, South
            Africa.
  In
            some of the
            countries in which we operate, local regulations impose certain nationality
            requirements. As a result, we often obtain a license to operate in that
            country
            in conjunction with a local representative or partner. Our representatives
            or
            partners typically receive a small percentage of local revenues or a
            fixed fee
            but generally do not provide any personnel or assume any of the liabilities
            related to performance of the contract. We currently have representatives
            or
            partners in a number of countries including Azerbaijan, Ecuador, Equatorial
            Guinea, Libya, Myanmar, Namibia, Saudi Arabia and Thailand. We believe
            we have a
            competitive advantage in securing contracts in these areas due to our
            established local partnerships. In other jurisdictions such as India,
            Angola,
            Brazil and Malaysia, we provide aircraft and maintenance services to
            other local
            helicopter operators.
  22
 
 *CHC
            International:* CHC International
            provides helicopter services through 27 bases in 13 countries around
            the world.
            These bases are coordinated through our division based in Vancouver,
            Canada,
            which operates a fleet of 51 aircraft, including 12 heavy helicopters,
            36 medium
            helicopters, one light helicopter and two fixed-wing aircraft. In the
            fiscal
            year ended April 30, 2005, CHC International conducted business
            with major
            oil and gas companies including operating subsidiaries of Shell, bp,
            ExxonMobil,
            Unocal, Chevron, Triton and TotalFinaElf. Our strong customer relationships,
            established reputation, ability to operate in various environments and
            commitment to quality, safety and cost efficiency have proven to be extremely
            important in the international markets. We have been serving Unocal in
            Thailand
            for 30 years. Since our establishment in Azerbaijan over 10 years
            ago,
            we have been working on long-term projects in the Caspian Sea
            with a
            consortium led by bp and another consortium led by TotalFinaElf and Exxon
            Mobil;
            in Fiscal 2005 we expanded our fleet in Azerbaijan with an additional
            S76A++. In
            the Philippines, we are under contract with Shell until 2005, with an
            additional
            two-year extension option. We are also established in Saudi Arabia, where
            we are
            currently providing services to the Arabian Oil Company under contract
            until
            December 2005. We are well established on the east coast of Canada, having
            a
            contract with Exxon Mobil. We also maintain contracts for ongoing work
            in such
            countries as Ecuador and Georgia, and expanded our fleet size in Malaysia.
            During this year we were able to penetrate the oil and gas industry in
            India
            and, commencing May 1, 2004, we began providing Super Pumas in
            Brazil. We
            also introduced four new S76C+ into the Southeast Asian market, and re-deployed
            the existing three S76A++ aircraft to other regions, including Thailand,
            Africa
            and Azerbaijan.
  During
            fiscal 2005
            we were awarded contracts to provide helicopter services in support of
            oil and
            gas operations of (i) Petronas in Myanmar, (ii) Unocal
            in Philippines,
            (iii) United Nations in Haiti, (iv) Pearl Oil in Thailand,
            and
            (v) Statoil and Chevron in Venezuela.
  *CHC
            Australia:* Our Australian
            operations, as well as a small portion of our Southeast Asian operations
            (principally East Timor), are conducted by CHC Australia, with headquarters
            in
            Adelaide, Australia which operates a fleet of 31 helicopters, including
            five
            heavy, 20 medium and six light helicopters. We are a leading commercial
            helicopter operator in Australia. Our customers include Coogee Resources
            and
            ConocoPhillips Petroleum, which, along with other oil and gas companies,
            represents approximately 40% of our Australian revenues in 2005. In addition,
            we
            operate emergency medical services in South Australia, Western Australia,
            Queensland, New South Wales, the Australian Capital Territory and Victoria,
            perform search and rescue services for the Royal Australian Air Force,
            and
            provide various functions supporting the utility and construction industries,
            such as pipeline inspection. We also worked with the United Nations in
            East
            Timor using two helicopters for personnel transportation and medical
            evacuation.
            We also perform helicopter support services for police forces in Victoria
            and
            South Australia.
  During
            the year we
            commenced a 10-year renewal (plus extension options of four years)
            to
            supply search and rescue helicopters and crews and to provide additional
            support
            helicopters to the Royal Australian Air Force.
  *CHC
            Africa:* Our African
            operations are headquartered in Cape Town, South Africa, with nine bases
            in many
            countries in Africa that support oil and gas exploration, as well as
            provide
            emergency medical and other services. With a fleet of 21 helicopters
            and two
            fixed-wing aircraft, CHC Africa serviced a variety of customers, including
            Shell, Exxon Mobil, Sonair, Triton/Hess, Murphy Oil, Premier, Forest,
            TotalFinaElf, Noble Energy, Petronas, Ocean, Devon, DeBeers, PetroSA,
            South
            African Government Antarctic Expedition, among others.
  CHC
            Africa in 2005
            was busy with numerous short-term, exploratory drilling contracts, primarily
            on
            the West Coast of Africa. As a result of a tender process for PetroSA
            offshore
            George South Africa, we were awarded a further six-year contract.
  *New
            Business
            Opportunities for our International Operations:* Our geographic
            coverage enables us to serve multinational oil and gas customers on a
            worldwide
            basis. We see potential growth opportunities through our international
            operations in regions such as South America, West Africa, Angola, Malaysia,
            India, Former Soviet countries including Kazakhstan, and offshore Eastern
            Canada. Each of the regions includes potential helicopter service contract
            opportunities linked to oil and gas exploration and production projects.
  23
 
 Schreiner
            Operations
  Schreiner’s
            operations include a fleet of 41 aircraft, including 31 helicopters and
            10
            fixed-wing aircraft, providing aviation services primarily to the offshore
            oil
            and gas industry in Europe, Africa and Asia. We are, through Schreiner,
            the
            largest helicopter operator in the Dutch sector of the North Sea,
            with
            helicopters providing support to the offshore oil and gas industry and
            emergency
            medical services. We are also a major operator in Africa, providing helicopter
            and fixed-wing aviation support services to the oil and gas industry,
            with
            significant offshore helicopter support services in Nigeria and Cameroon,
            and
            long-standing pipeline construction and maintenance/surveillance support
            in
            Chad. In Nigeria we support offshore and onshore oil and gas operations.
            In
            addition to the aircraft that we own, we also operate nine aircraft owned
            by our
            40% owned equity investee in Nigeria, in support of oil and gas operations.
            In
            addition, we operate scheduled domestic flights in Nigeria utilizing
            our fleet
            of primarily DeHavilland fixed-wing aircraft. In Cameroon and Chad, we
            utilize
            helicopters and fixed-wing aircraft to support a major pipeline project
            linking
            oil fields in southern Chad with terminal facilities off the Cameroon
            coast. We
            also own, through Schreiner, an aircraft parts business, and we hold
            a 38%
            investment in Inversiones Aereas S.R.L. (“Inaer”), the largest onshore and
            offshore helicopter operator in Spain. We began consolidating the operations
            of
            Schreiner into our consolidated financial statements effective February 16,
            2004 and report its results as a separate segment.
  During
            the year we
            sold Schreiner Aircraft Maintenance Co. B.V. (“SAMCO”), our fixed-wing
            maintenance centre in the Netherlands, and our Canadian operation, Schreiner
            Canada Ltd. (“Schreiner Canada”), which we considered non-core.
  Competition
  We
            are one of only
            two global providers of helicopter transportation services to the offshore
            oil
            and gas industry. There are other competitors, but they are smaller,
            regional
            operators. We have a significant market position in all global offshore
            oil and
            gas markets, with the exception of the Gulf of Mexico, where we do not
            have a
            presence. Our absence in that market stems from the fact that the oil
            and gas
            companies operating in the Gulf of Mexico utilize primarily light and
            medium
            helicopters under short-term contracts. We estimate that we have a market
            share
            of approximately 60% in the combined Norwegian, U.K., Danish and Dutch
            sectors
            of the North Sea, the world’s largest area of offshore oil and gas
            development. We believe we are well positioned to capitalize on future
            growth
            opportunities. As oil and gas wells are depleted, it is expected that
            oil
            companies will go further offshore to develop deep-water reserves. Our
            global
            presence, long-term customer relationships and modern fleet of aircraft
            position
            us to participate in new oil and gas developments in most offshore oil
            and gas
            regions.
  At
            present, the
            limited supply of helicopters available for use in the offshore oil and
            gas
            industry is a competitive advantage for us. In our experience, the Super
            Puma
            and, more recently, the Sikorsky S-92 aircraft are the aircraft of choice
            for
            major oil and gas companies operating in the North Sea due to
            their
            superior maximum flying range, passenger capacity and cabin crew comfort.
            At
            present, our major competitor and we operate approximately 90% of the
            worldwide
            fleet of commercial Super Puma aircraft configured for offshore work.
            The
            manufacturers of these aircraft do not stock new aircraft. The current
            lead time
            to acquire a new Super Puma or S-92 is approximately18 months.
            During the
            year, we introduced two Sikorsky S-92 aircraft in Norway. The S-92 is
            a heavy
            helicopter that has similar capabilities to the Super Puma MkII.
  In
            our
            international markets, services are usually provided by medium helicopters.
            However, as oil and gas production and exploration in the international
            markets
            move further offshore, there will be an increasing need for newer heavy
            helicopters.
  In
            our medium and
            heavy helicopter operations, we compete against a number of helicopter
            operators
            including OLOG, the other global commercial helicopter operator, and
            numerous
            local and regional operators. In addition, many of our customers in the
            oil and
            gas industry have the financial capability to perform their own helicopter
            flying operations in-house should they elect to do so. The technical
            requirements of operating helicopters offshore have increased as oil
            and gas
            activities have moved further offshore and more sophisticated aircraft
            are
            required to service the market, which increases the costs of assets required
            to
            be deployed.
  24
 
 Repair
            and
            Overhaul
  All
            aircraft
            airframes, engines and components are required by their manufacturers
            and
            government regulations to be serviced and overhauled after a predetermined
            period. The repair and overhaul process includes the disassembly, cleaning,
            inspection, repair and reassembly of engines, components and accessories,
            which
            have a limited time-life, including the testing of complete engines and
            components. The choice of whether to perform a given task in-house or
            to
            outsource to a third party depends on the complexity and cost of the
            task and
            the capabilities of the operator in question. Companies engaged in the
            repair
            and overhaul business are required to obtain licenses from government
            regulatory
            bodies and, in many cases, the manufacturers. Companies active in this
            industry
            include (i) the manufacturers of the helicopters, components,
            and
            accessories, (ii) repair facilities authorized by the manufacturers
            to
            repair and overhaul their products, and (iii) small workshops
            not typically
            authorized by the manufacturers. The low cost of transporting components
            relative to the total cost of the repair and overhaul services has resulted
            in
            the development of a worldwide market for repair and overhaul
            services.
  During
            the year, we
            created the world’s largest helicopter support company, Heli-One. Heli-One
            combines all CHC support subsidiaries and divisions including Astec Helicopter
            Services AS (“Astec”), Multifabs, Overhaul International and ATSL. Heli-One
            provides comprehensive capability for repair, overhaul, modification
            and testing
            of dynamic components, including S61and S76, Bell 206, 205, 212
            and 412 and
            all Super Puma AS332/532 models. Heli-One’s major servicing facilities in
            North America and Europe provide engine overhaul servicing. Astec
            specializes in nose-to-tail support of the AS332 Super Puma and overhaul
            of the
            Makila 1A/1A1/1A2 engines. Heli-One, Vancouver, including ATSL, specializes
            in
            nose-to-tail support of the S61 and S76 and overhauls of the General
            Electric
            CT58/T58 gas turbine engines and Pratt & Whitney Canada PT6T turboshaft
            engines. Overhaul International has a CASA approved Bell workshop. This
            restructuring provides low cost internal repair and overhaul services
            and
            positions the Corporation to increase our market share of repair and
            overhaul
            services for the worldwide fleet of over 500 Super Pumas.
  Some
            of Heli-One’s
            contracts require customers to pay for services on an hourly flying basis.
            Typically, a portion of the revenue from these “power-by-the-hour” contracts is
            recognized on a monthly basis to reflect ongoing maintenance and logistics
            services being provided, with the balance deferred and recognized as
            the major
            repair and overhaul services are performed.
  Heli-One
            is also
            able to provide to its customers integrated logistics support, providing
            24-hour
            service, covering all scheduled and unscheduled repair and overhaul for
            engines,
            dynamic components, all rotable components and consumable parts, plus
            support
            for any special mission equipment. Our global buying power translates
            to
            competitive pricing on all major components. With facilities in times
            zones nine
            hours apart, Heli-One can offer next-day delivery in most locations on
            a wide
            range of helicopter parts from all major manufacturers. In addition,
            we have
            extensive expertise in all areas of engineering and design, for either
            conversion upgrades or refurbishments, including avionics.
  We
            continue to
            service our contract with the German Ministry of the Interior, awarded
            in fiscal
            2004, to upgrade 10 Super Puma AS332L helicopters during fiscal 2005
            through
            2008. Five of the aircraft will come from our fleet of Super Pumas as
            part of
            our ongoing fleet modernization program. The aircraft that we will be
            selling
            will range in age from 20-25 years. At April 30, 2005 we
            had sold two
            of the five aircraft.
  Competition
  Heli-One’s
            main
            competitors within the repair and overhaul business are the original
            equipment
            manufacturers of helicopters and their components. As such, its main
            competitors
            are also its main parts suppliers. To minimize issues related to the
            availability and pricing of parts that Heli-One needs to perform its
            business,
            Heli-One generally has long-term supply arrangements with the original
            equipment
            manufacturers and works closely with them on items such as modifications
            and
            approvals of parts and components.
  Factors
            that affect
            competition within the repair and overhaul market include price, quality
            and
            customer service. We believe that Heli-One has a competitive advantage
            over
            original equipment manufacturers in that it focuses on supporting commercial
            operations and can leverage CHC’s extensive operational experience. We believe
            that the corporate restructuring and creation of Heli-One have improved
            our
            ability to provide low cost, quality support services to civilian and
            military
            helicopter operators worldwide.
  25
 
 Flight
            Training
  We
            operate an
            advanced flight training facility in Norway that provides additional
            revenue and
            enhances our global reputation for excellence and leadership in helicopter
            services. The facility enables us to satisfy fully the Super Puma training
            requirements for our pilots, in addition to selling training services
            to
            external pilots. Our experienced instructors provide a wide variety of
            training
            services to our employees as well as civil and military organizations
            around the
            world. Our Norwegian flight training group operates two full flight simulators
            and is certified and approved by the Norwegian Civil Aviation Authority
            as well
            as several other national aviation authorities. Since its inception,
            this
            facility has trained more than 24,000 pilots and mechanics from over
            40
            countries.
  Helicopter
            Leasing
  We
            manage the
            world’s largest fleet of medium and heavy civilian helicopters, enabling us
            to
            offer flexible leasing terms on a wide range of aircraft to third-party
            customers. Heli-One will include, in the leases to customers, repair
            and
            overhaul and logistics support as part of the full package.
  Safety
            and Survival
            Equipment
  Operating
            in the
            world’s most dangerous cold-water environments requires protection, quality
            and
            comfort. With our European subsidiaries, Multifabs and Whirlybird, we
            have over
            30 years experience providing survival-wear solutions to military
            forces,
            emergency services and oil and gas operators around the world.
  Composites
  CHC
            Composites Inc.
            (“Composites”) is a subsidiary that manufactures composite aerospace components
            and bonded panels. Composites is considered a non-core business and is
            held for
            sale. The sale, to any potential acquirer, will be contingent on acceptance
            of
            certain terms and conditions by the Government of Newfoundland and
            Labrador.
  Seasonality
  There
            is some
            impact of seasonality on our operations. The seasonal variations are
            due
            primarily to variations in the activity levels of our oil and gas industry
            customers’ exploration and development activities. Generally, the third quarter
            is most negatively impacted by seasonality. The second quarter, which
            includes a
            portion of the peak summer period, has historically been the strongest.
            Typically, our net earnings also follow this pattern.
  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
            Canadian and other government regulations and customer requirements.
            In
            addition, aviation regulatory bodies and customers conduct safety audits
            to
            ensure that our standards meet their requirements.
  During
            fiscal 2005,
            we received insurance proceeds of $1.7 million for the total loss
            of a
            Bell 212 aircraft operating in Australia on June 2, 2004.
            The book
            value of the aircraft was $0.8 million, resulting in a gain of
            $0.9 million. The aircraft was being flown for a medical evacuation
            and
            crashed while manoeuvring in heavy rain during approach resulting in
            only minor
            injuries of passengers and crew. Any incurred or outstanding liabilities
            relating to the incident are covered by our insurance providers.
  26
 
 During
            the fiscal
            year ended April 30, 2004, we experienced two accidents involving
            injury,
            death or significant property damage: (i) an EMS helicopter crashed
            in
            Australia, resulting in the deaths of three crew members; and (ii) a
            hard
            landing of a helicopter during training exercises in Azerbaijan resulting
            in the
            total loss of the helicopter with only minor injuries to the crew. There
            are no
            outstanding liabilities relating to the Azerbaijan incident as at April
            30,
            2005. The Australia incident is still open. Any potential claims are
            covered by
            our insurance policies.
  Also
            during fiscal
            2004, a helicopter owned and operated by Inaer, a company of which Schreiner
            owns 38% but does not manage, crashed in the Canary Islands during an
            emergency
            medical services operation, resulting in the death of five passengers
            and crew
            members. Insurance for Inaer’s aircraft is provided directly by Inaer, not by
            Schreiner or us.
  We
            maintain
            liability insurance coverage against general and aircraft liability,
            including
            personal injury, subject to a self-insured retention. In addition, we
            have
            separate hull policies that generally insure against physical loss of,
            or damage
            to, our helicopters in certain circumstances, subject to a self-insured
            retention, including losses due to war, expropriation, confiscation and
            nationalization. We are not insured for loss of profit or loss of use
            of our
            helicopters.
  **Government
            Regulation**
  European
            Aviation
            Licenses
  Companies
            wishing
            to hold a license to operate helicopters in the European Union or the
            European
            Economic Area must be owned and controlled by a citizen of a country
            of the
            European Union or the European Economic Area. Our ability to hold aviation
            licenses in Europe is contingent on our controlling shareholder, Mr. Craig
            L. Dobbin, who is a citizen of both Canada and the Republic of Ireland,
            a
            European Union Member State, owning and controlling us. As required by
            our
            senior credit facility, we have developed a proposal for steps that we
            may take,
            including through a restructuring of our European operations, so that
            our
            operating licenses in Europe are not dependent on the citizenship of
            Mr. Craig L. Dobbin. The proposal must be capable of being implemented
            within six months of a request by the lenders under the facility. During
            fiscal
            2002, Mr. Dobbin’s five adult children were granted Irish citizenship,
            thereby providing a further succession alternative to ensure our long-term
            eligibility to operate in Europe.
  U.K.
            Regulation
  Requirements
            for
            Operating License
  Our
            U.K. operating
            subsidiary, Scotia, has been issued an operating license by the U.K.
            Civil
            Aviation Authority. Formerly, operating licenses were held by two of
            our U.K.
            subsidiaries, Brintel and Scotia (previously Bond Helicopters Limited
            (“Bond”)),
            but as of June 30, 2000 the helicopter operating business and
            assets of
            Brintel were transferred, for value, to Bond. Bond was renamed CHC Scotia
            Limited and is now the only operating subsidiary in the U.K. in our group,
            and
            therefore our only subsidiary holding a U.K. operating license. Without
            this
            operating license, we would not be able to operate helicopter services
            through
            our U.K. subsidiary. Under applicable European law, all of our European
            subsidiaries that operate helicopter services must be "effectively controlled"
            and "majority owned" by nationals of Member States of the European Union
            or the
            European Economic Area to maintain their operating licenses. We are controlled
            by Mr. Craig L. Dobbin, a citizen of both Canada and the Republic
            of
            Ireland (a Member State of the European Union).
  In
            January 1994, two competitors of Brintel (at that time the only
            U.K.
            operating company in our group) complained to the European Commission
            and the
            U.K. Civil Aviation Authority that the ownership structure of CHC and
            Brintel
            did not comply with the requirements of European licensing regulations
            and one
            competitor brought an application in the English courts for judicial
            review of
            the U.K. Authority’s decision not to revoke Brintel’s operating license
            following the acquisition of Brintel by CHC. Subsequently, Brintel received
            notice that, as a result of communications with the European Commission,
            the
            U.K. Civil Aviation Authority believed that Brintel may not satisfy the
            nationality requirements of applicable European law. The U.K. Civil Aviation
            Authority subsequently informed the U.K. Secretary of State on December 4,
            1997 that it had reason to believe that Brintel did not comply with the
            ownership requirements of applicable European law. The U.K. Secretary
            of State
            had the ability to direct the U.K. Civil Aviation Authority to withdraw
            Brintel’s operating license for failure to comply with such requirements.
  27
 
 To
            resolve the
            ownership issues with the U.K. Civil Aviation Authority and the European
            Commission, we entered into an agreement with the U.K. Department of
            the
            Environment, Transport and the Regions to effect a transaction that was
            approved
            by our shareholders on December 9, 1997. Pursuant to that agreement,
            we
            created and issued 22 million ordinary shares (adjusted to reflect
            the
            April 2005 2-for-1 stock split), a new class of restricted voting securities,
            to
            a corporation indirectly wholly owned by Mr. Dobbin for $33 million.
            We loaned that corporation the $33 million to purchase the ordinary
            shares.
            The loan is secured by a lien on the ordinary shares. The ordinary shares
            are
            entitled to one vote for every 10 ordinary shares held and to dividends
            equivalent on a per share basis to any dividend paid on our subordinate
            voting
            shares, but each dividend paid on the ordinary shares requires prior
            minority
            shareholder approval.
  In
            connection with
            these transactions, Mr. Dobbin and related corporations entered
            into an
            agreement with us under which they agreed, among other things:
  ·
                  not
                      to
                      directly or indirectly sell or transfer any of the ordinary
                      shares, except
                      for transfers that have been approved by a committee of independent
                      directors of CHC; and
  ·
                  not
                      to take
                      any action to cause or support our dissolution, liquidation
                      or winding-up
                      or other distribution of our assets unless the dissolution,
                      liquidation or
                      winding-up or other distribution has received minority shareholder
                      approval.
  As
            a result of
            these transactions, we were advised by the U.K. Civil Aviation Authority
            that it
            did not intend, in the absence of any further change in circumstances
            or any
            information available to it, to take any further action in relation to
            Brintel
            in the context of the ownership requirements of applicable European licensing
            law. Although discussions and correspondence with the European Commission,
            the
            U.K. Department of Environment, Transport and the Regions and the U.K.
            Civil
            Aviation Authority confirmed that the issuance of the ordinary shares
            to
            Mr. Dobbin in December 1997 allowed us to satisfy the nationality
            requirements, this will not necessarily preclude further challenges of
            Scotia's
            right to maintain its operating license on this or any other basis. Further,
            Scotia's eligibility to maintain its license could be adversely affected
            if
            Mr. Dobbin were to dispose of the shares he holds in CHC, if his
            percentage
            ownership of CHC was otherwise decreased or if he were to die and no
            alternative
            arrangement acceptable to the U.K. Civil Aviation Authority were implemented.
            While we do not believe this is probable, the revocation of the license
            would
            have a material adverse effect on our business, financial condition and
            results
            of operations.
  Following
            our
            acquisition on August 11, 1999 of over 90% of the shares of HSG,
            including
            its subsidiary Bond, which operated in the U.K., we disclosed the details
            of the
            transaction to the U.K. Civil Aviation Authority and obtained written
            confirmation from the U.K. Civil Aviation Authority that the licensing
            of Bond
            would not be adversely affected by its acquisition by us.
  Norwegian
            Regulation
  Requirements
            for
            Operating License
  Our
            Norwegian
            subsidiaries are, through Norway's status as a Member State of the European
            Economic Area, subject to the same European Union nationality requirements
            with
            regard to ownership and control as our U.K. subsidiaries. On May 9,
            1999,
            in response to objections initiated by the previous management of HSG,
            the
            Norwegian Ministry of Transport confirmed in writing that it had adopted
            the
            same position as the U.K. Civil Aviation Authority with regard to our
            satisfaction of the European Union (and European Economic Area) nationality
            requirements and therefore would not challenge HSG’s eligibility to hold
            helicopter operating licenses in Norway after our acquisition of
            HSG.
  28
 
 Dutch
            Regulation
  Requirements
            for
            Operating License
  Our
            Dutch
            subsidiary is, through the operations of its subsidiaries, subject to
            the same
            European Union and European Economic Area nationality requirements with
            regard
            to ownership and control as are our U.K. and Norwegian subsidiaries.
            The Dutch
            Civil Aviation Authority advised Schreiner in writing prior to our acquisition
            of Schreiner that Schreiner was in compliance with applicable European
            ownership
            and control requirements and, based on information provided by us, would
            continue to be so following its acquisition by us. In accordance with
            Dutch
            Civil Aviation Authority procedures, we were required to submit certain
            information regarding our ownership and control to the Dutch Civil Aviation
            Authority following our acquisition of Schreiner to formally demonstrate
            that
            Schreiner continues to meet the European ownership and control requirements.
            We
            have submitted the required information to the Dutch Civil Aviation
            Authority.
  Canadian
            Regulation
  Requirements
            for
            Operating License
  Our
            helicopter
            operations in Canada are regulated under the provisions of the Aeronautics
            Act
            (Canada) (the "Aeronautics Act"). Air operator certificates are issued
            by the
            Minister of Transport (Canada) pursuant to the Aeronautics Act and related
            regulations and orders. To receive an air operator certificate, an applicant
            must satisfy certain requirements with respect to its operations.
  We
            have an air
            operator certificate. Our ability to conduct business is dependent on
            our
            ability to maintain our air operator certificate. We no longer directly
            carry on
            light helicopter operations in Canada, but we operate heavy helicopters
            off
            Canada’s east coast in support of the oil and gas industry.
  Australian
            Regulation
  Requirements
            for
            Operating License
  The
            helicopter
            industry in Australia is regulated by various authorities, the most significant
            of which is the Australian Civil Aviation Safety Authority ("CASA").
            Pursuant to
            the Civil Aviation Act, 1988, CASA is primarily responsible for safety
            regulations for (1) civil air operations within Australian territory
            and
            (2) Australian registered aircraft operating outside of Australian
            territory.
  To
            operate an
            aircraft in Australia, it must be registered with CASA and a valid Certificate
            of Airworthiness must be obtained and 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. CHC
            Australia has been licensed by CASA to conduct charter operations within,
            into,
            out of and outside of Australian territory and to engage in the maintenance
            of
            aircraft and maintenance of aircraft components.
  29
 
 South
            African
            Regulation
  Requirements
            for
            Operating License
  Aviation
            services
            in South Africa are regulated under the Air Services Licensing Act for
            domestic
            service and the International Air Services Act for international services.
            Additionally, aircraft used in such services must be registered under
            the
            Aviation Act, 1962. The Air Services Licensing Council issues domestic
            licenses
            if satisfied that (a) the service will be safe and reliable, (b) the
            applicant is a resident of South Africa or, if a corporation is incorporated
            in
            South Africa and 75% of the voting rights are held by South African residents,
            (c) the applicant will be in control of the service, and (d) the
            aircraft is registered in South Africa. Upon acquiring its interest in
            Court
            Air, HSG obtained a letter from the Ministry of Transport in South Africa,
            confirming its approval of HSG’s indirect acquisition of Court Air on the basis
            that Court Air’s immediate parent, Court Air Holdings (Pty) Ltd., was a
            South African registered company. Legal advice from our South African
            counsel
            has confirmed that Court Air’s licenses for helicopter operations in South
            Africa should not be adversely affected by our acquisition of HSG, but
            cautioned
            that there is some continuing risk that the South African Ministry of
            Transport
            could reverse its prior decision. No action with respect to these licenses
            has
            been taken since our acquisition of HSG in 1999. While we do not believe
            this is
            probable, any such action could materially and adversely affect our business,
            financial condition and results of operations. There are also requirements
            for
            an operating certificate, uninterrupted operation and insurance. The
            requirements for an international license are similar, with an additional
            requirement that the service can be operated within the structure of
            existing
            air service in South Africa. The International Air Services Council may
            also
            take into account the financial capability of the applicant, economic
            and other
            national interests of South Africa and the effect on existing services.
            Domestic
            fares are unregulated but international fares are governed by international
            agreements between governments.
  Black
            Empowerment
  Black
            Empowerment
            legislation in South Africa requires that we have a local partner that
            satisfies
            the black empowerment requirements in order to be able to bid on contracts
            in
            South Africa. We have entered into an arrangement with a black empowerment
            partner that will enable us to bid on future contracts.
  Other
            International
            Regulation
  Helicopter
            operations in other foreign countries are regulated to various degrees
            by their
            governments and must be operated in compliance with those regulations.
            These
            regulations may require us to obtain a license to operate in that country,
            may
            favour local companies or require operating permits that can only be
            obtained by
            locally registered companies and may impose other nationality requirements.
            To
            conduct helicopter operations in these countries, we may operate in conjunction
            with a local representative or partner. Our representatives or partners
            typically receive a small percentage of local revenues or a fixed fee
            but
            generally do not provide any personnel or assume any of the liabilities
            related
            to the performance of the contract. We currently have representatives
            or
            partners in a number of countries including Azerbaijan, Ecuador, Equatorial
            Guinea, Libya, Myanmar, Namibia, Saudi Arabia and Thailand.
  **Environmental**
  We
            are subject to
            extensive laws, rules, regulations and ordinances relating to pollution
            and
            protection of the environment, including those relating to emissions
            to the air,
            discharges to waters, the use, storage and disposal of petroleum and
            other
            regulated materials and the remediation of contaminated sites.
  Our
            operations
            sometimes involve the use, handling and storage of material that may
            be
            classified as environmentally hazardous. Laws protecting the environment
            have
            become more stringent in Canada and certain other countries in recent
            years and
            may, in certain circumstances, impose liability for 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 or for our acts that were in compliance with
            all
            applicable laws at the time these acts were performed. We believe we
            are in
            substantial compliance with applicable environmental requirements and
            that
            ensuring compliance has not, to date, had a material adverse effect on
            our
            financial position. We cannot, however, predict the likelihood of change
            to
            these laws or in their enforcement nor the impact of any such change,
            or
            discovery of previously unknown conditions which may require unanticipated
            costs, on our financial position.
  30
 
 **ORGANIZATIONAL
              STRUCTURE**
 The
            following table
            lists our principal subsidiaries, their jurisdiction of incorporation
            and the
            percentage of votes attached to voting securities held directly or indirectly
            by
            us as at July 29, 2005. This list excludes certain subsidiaries,
            the total
            assets of which constituted less than 10 % of our fiscal 2005 consolidated
            assets and total revenues of which constituted less than 10 %
            of our fiscal
            2005 consolidated revenues.
  **Company
                      name**
                  
                  **Jurisdiction
                      of Incorporation**
                  
                  **Percentage**
                    **Ownership**
                    **(common
                      equity)**CHC
                      Helicopters International Inc.
                  
                  Canada
                  
                  100%CHC
                      Helicopters (Barbados) Limited
                  
                  Barbados
                  
                  100%CHC
                      Leasing
                      (Barbados) Limited
                  
                  Barbados
                  
                  100%CHC
                      Capital
                      (Barbados) Limited
                  
                  Barbados
                  
                  100%Canadian
                      Helicopters (U.K.) Limited
                  
                  Scotland
                  
                  100%CHC
                      Scotia
                      Limited
                  
                  England
                      and
                      Wales
                  
                  100%Heliworld
                      Leasing Limited
                  
                  England
                      and
                      Wales
                  
                  100%Vinland
                      Denmark AS
                  
                  Denmark
                  
                  100%Vinland
                      Helicopters AS
                  
                  Norway
                  
                  100%Helicopter
                      Services Group AS
                  
                  Norway
                  
                  100%CHC
                      Helikopter Service AS
                  
                  Norway
                  
                  100%Astec
                      Helicopter Services AS
                  
                  Norway
                  
                  100%Heliwest
                      AS
                  
                  Norway
                  
                  100%Lloyd
                      Offshore Helicopter Services Pty. Ltd.
                  
                  Australia
                  
                  100%CHC
                      Helicopters (Africa) Pty. Ltd.
                  
                  Africa
                  
                  100%CHC
                      Helicopter South Africa (Propritary) Ltd.
                  
                  South
                      Africa
                  
                  75%Court
                      Helicopters Limited (Mauritius)
                  
                  Mauritius
                  
                  100%CHC
                      Composites Inc.
                  
                  Canada
                  
                  100%CHC
                      Denmark
                      ApS
                  
                  Denmark
                  
                  100%CHC
                      Ireland
                      Limited
                  
                  Ireland
                  
                  100%Brintel
                      Holdings Limited
                  
                  Scotland
                  
                  100%4083423
                      Canada Inc.
                  
                  Canada
                  
                  100%CHC
                      Netherlands BV
                  
                  the
                      Netherlands
                  
                  100%CHC
                      Sweden
                      AB
                  
                  Sweden
                  
                  100%Schreiner
                      Luchtvaart Groep BV
                  
                  the
                      Netherlands
                  
                  100%Schreiner
                      North Sea Helicopters BV
                  
                  the
                      Netherlands
                  
                  100%Schreiner
                      Airways, BV
                  
                  the
                      Netherlands
                  
                  100%Schreiner
                      Aircraft Maintenance Company BV
                  
                  the
                      Netherlands
                  
                  100%Schreiner
                      & Co., BV
                  
                  the
                      Netherlands
                  
                  100%Capital
                      Aviation Services B.V.
                  
                  the
                      Netherlands
                  
                  100%Schreiner
                      Chad SA
                  
                  Chad
                  
                  100%Whirly
                      Bird
                      Services Limited
                  
                  Scotland
                  
                  100%Multifabs
                      Survival Ltd.
                  
                  Scotland
                  
                  100%Aero
                      Turbine
                      Support Ltd.
                  
                  British
                      Columbia
                  
                  60%
  31
 
 **PROPERTY,
            PLANT AND EQUIPMENT**
  **Fleet**
  The
            composition of
            our fleet at April 30, 2005, and some of the characteristics of
            the
            individual types of aircraft we own or lease are as follows:
  **Number
                        in Fleet**
                    
                    **Type
                        of**
                    
                    **Passenger**
                    
                    **Approximate****Fleet
                        Composition**
                    
                    **Owned**
                    
                    **Leased**
                    
                    **Engine**
                    
                    **Capacity*****(i)***
                    
                    **Range*****(ii)*****Light
                        Helicopters**Bell
                        206
                        Series
                    
                    
                    6
                    
                    
                    -
                    
                    Turbine
                    
                    
                    6
                    
                    
                    326
                        nm.MD
                        902
                    
                    
                    2
                    
                    
                    -
                    
                    Twin
                      Turbine
                    
                    
                    7
                    
                    
                    461
                        nm.Eurocopter
                        350 Series
                    
                    
                    1
                    
                    
                    -
                    
                    Turbine
                    
                    
                    5
                    
                    
                    370
                        nm.Eurocopter
                        355 Twin Star
                    
                    
                    1
                    
                    
                    -
                    
                    Twin
                      Turbine
                    
                    
                    4
                    
                    
                    360
                        nm.**Total
                        Light Helicopters**
                    
                    
                    10
                    
                    
                    -**Medium
                        Helicopters**Bell
                        212
                        Series
                    
                    
                    8
                    
                    
                    4
                    
                    Twin
                      Turbine
                    
                    
                    14
                    
                    
                    238
                        nm.Bell
                        214
                    
                    
                    1
                    
                    
                    -
                    
                    Twin
                      Turbine
                    
                    
                    19
                    
                    
                    418
                        nm.Bell
                        412
                    
                    
                    9
                    
                    
                    3
                    
                    Twin
                      Turbine
                    
                    
                    14
                    
                    
                    349
                        nm.Eurocopter
                        365 Series
                    
                    
                    22
                    
                    
                    9
                    
                    Twin
                      Turbine
                    
                    
                    10
                    
                    
                    435
                        nm.Sikorsky
                        S76
                        Series
                    
                    
                    49
                    
                    
                    10
                    
                    Twin
                      Turbine
                    
                    
                    9
                    
                    
                    391
                        nm.**Total
                        Medium Helicopters**
                    
                    
                    89
                    
                    
                    26**Heavy
                        Helicopters**Eurocopter
                        Super Puma 332L/L-1
                    
                    
                    19
                    
                    
                    11
                    
                    Twin
                      Turbine
                    
                    
                    20
                    
                    
                    455
                        nm.Eurocopter
                        Super Puma 332 MkII
                    
                    
                    1
                    
                    
                    17
                    
                    Twin
                      Turbine
                    
                    
                    19
                    
                    
                    461
                        nm.Sikorsky
                        S61N
                    
                    
                    23
                    
                    
                    3
                    
                    Twin
                      Turbine
                    
                    
                    26
                    
                    
                    125
                        nm.Sikorsky
                        S-92
                        Series
                    
                    
                    -
                    
                    
                    2
                    
                    Twin
                      Turbine
                    
                    
                    19
                    
                    
                    500
                        nm.**Total
                        Heavy Helicopters**
                    
                    
                    43
                    
                    
                    33**Fixed-Wing
                        Aircraft**Twin
                        Otter
                    
                    
                    -
                    
                    
                    2
                    
                    Twin
                      Turboprop
                    
                    
                    19
                    
                    
                    690
                        nm.Convair
                        580
                    
                    
                    2
                    
                    
                    -
                    
                    Twin
                      Turboprop
                    
                    
                    55
                    
                    
                    1200
                        nm.Dash
                        6
                    
                    
                    5
                    
                    
                    -
                    
                    Twin
                      Turboprop
                    
                    
                    19
                    
                    
                    700
                        nm.Dash
                        8
                    
                    
                    2
                    
                    
                    2
                    
                    Twin
                      Turboprop
                    
                    
                    47
                    
                    
                    790
                        nm.Learjet
                        45
                    
                    
                    1
                    
                    
                    -**Total
                        Fixed-Wing Aircraft**
                    
                    
                    10
                    
                    
                    4**TOTAL**
                    
                    
                    152
                    
                    
                    63
  (i)
                  Excludes
                      pilots and assumes standard seating of only one
                      pilot.
 (ii)
                  Assumes
                      no
                      auxiliary fuel tanks and maximum
                      payload.
 
 During
            fiscal 2005,
            we completed five sale-leaseback transactions, four of which were aircraft
            purchased in fiscal 2005. We also entered into operating leases for four
            new
            additional aircraft, returned four aircraft to the lessors and purchased
            seven
            aircraft from a lessor.
  Based
            on an
            appraisal as of April 2005 by an independent helicopter valuation
            company,
            the aggregate estimated resale value of the aircraft we owned at April 30,
            2005 was approximately $628.9 million, which exceeded net book
            value by
            approximately $53.2 million.
  32
 
 **Facilities**
  We
            currently
            operate from approximately 90 bases worldwide, including 29 in Europe,
            using
            facilities that include hangars, supply and service centers, engineering
            support
            facilities and offices. In Norway, the U.K., Canada, the Netherlands
            and
            Australia, we generally own the hangars we use in our helicopter operations,
            which are located primarily on leased airport lands. We generally lease
            supply
            and service centers, engineering support facilities and offices from
            third
            parties.
  The
            principal
            properties from which we now conduct our operations are:
  **Buildings**
                  
                  **Owned
                      or Leased/Lease Expiration Date****Location**
                  
                  **Operations**
                  
                  **(Square
                      Feet)**
                  
                  **Land**
                  
                  **Buildings**Gander,
                      Newfoundland and Labrador, Canada
                  
                  CHC
                      Composites Inc.
                    Composites
                      Manufacturer
                  
                  60,000
                  
                  Leased
                    July,
                      2018
                  
                  OwnedRichmond,
                      British Columbia, Canada
                  
                  Corporate
                      Headquarters*(i)*;
                    International
                      Headquarters;
                    Helicopter
                      Operations
                  
                  80,000
                  
                  Leased
                    October
                      1, 2038
                  
                  OwnedAberdeen,
                      Scotland
                  
                  CHC
                      Scotia Limited;
                    Helicopter
                      Operations
                  
                  42,000
                  
                  Leased
                    April
                      16, 2030
                  
                  Leased
                    April 30,
                      2016CHC
                      Scotia Limited;
                    Terminal
                      Building
                  
                  25,000
                  
                  Leased
                    June 30,
                      2027
                  
                  OwnedStavanger,
                      Norway
                  
                  CHC
                      Helikopter Service AS;
                    Helicopter
                      Operations
                  
                  199,000
                  
                  Leased
                    March
                      1, 2012
                  
                  OwnedAstec
                      Headquarters;
                    Repair
                      and Overhaul
                  
                  179,000 (ii)
                  
                  Leased
                    April 30,
                      2010
                  
                  Leased
                    April 30,
                      2010Cape
                      Town,
                    South
                      Africa
                  
                  CHC
                      Africa;
                    Helicopter
                      Operations
                  
                  142,884
                  
                  Leased
                    April 30,
                      2010
                  
                  OwnedAdelaide,
                      Australia
                  
                  CHC
                      Australia;
                    Helicopter
                      Operations
                  
                  10,000
                  
                  Owned
                  
                  OwnedHoofddorp,
                    the
                      Netherlands
                  
                  Schreiner;
                    Helicopter
                      Operations
                  
                  41,000
                  
                  Owned
                  
                  OwnedDenHelder,
                    the
                      Netherlands
                  
                  Schreiner;
                    Helicopter
                      Operations
                  
                  5,200
                  
                  Leased
                    June 30,
                      2008
                  
                  Leased
                    June 30,
                      2008
 
  (i)
                  Corporate
                      headquarters relocated to Richmond, British Columbia on December 31,
                      2004.
 (ii)
                  Leased
                      from
                      CHC Helicopter Services AS and included within the 199,000 square
                      feet shown in the table above for that
                      company.
 
  ITEM
                      5.
                  OPERATING
                      AND
                      FINANCIAL REVIEW AND PROSPECTS
  *This
            section
            should be read in conjunction with "Selected Financial Data" and our
            audited
            consolidated financial statements included elsewhere in this Annual Report.
            Our
            audited consolidated financial statements have been prepared in accordance
            with
            Canadian GAAP which differ in certain respects from U.S. GAAP. For a
            discussion
            of the principal differences between Canadian GAAP and U.S. GAAP, see
            "Principal
            Differences between Canadian and U.S. GAAP," and Note* *34* *to our audited
            consolidated financial statements.*
  33
 
 *We
            acquired
            Schreiner on February 16, 2004. Accordingly, the operating and
            financial
            review for periods prior to that date do not reflect the impact of our
            acquisition of Schreiner.*
  **OVERVIEW**
  Revenue
            for the
            fiscal year ended April 30, 2005 was $903.3 million, up
            $183.3 million or 25% from revenue of $720.0 million in
            fiscal 2004.
            Net earnings from continuing operations for fiscal 2005 were $73.6 million
            ($1.61 per share, diluted) compared to $66.3 million ($1.47 per
            share, diluted) in fiscal 2004.
  Our
            Class A
            subordinate voting shares and Class B multiple voting shares trade
            on the
            Toronto Stock Exchange (“TSX”) under the symbols “FLY.SV.A” and “FLY.MV.B”. Our
            Class A subordinate voting shares also trade on the New York Stock
            Exchange
            under the symbol “FLI”.
  **BUSINESS
            STRATEGY**
  During
            the year we
            completed a thorough examination of our operations and organizational
            structure
            with a view to strengthening and standardizing our operations, lowering
            overhead
            costs, increasing efficiency and securing our leadership position well
            into the
            future. As a result we are consolidating all operations into three new
            operating
            divisions; Global operations, European operations and Heli-One. Our head
            office
            and senior management have relocated to Vancouver, Canada. The restructuring
            will continue into fiscal 2006, completing initiatives primarily in Norway
            and
            the Netherlands. In addition to the direct cost savings anticipated from
            a total
            headcount reduction of approximately 180 people worldwide, we anticipate
            savings
            to be realized from improved fleet management, working capital management,
            procurement, logistics and other areas.
  **INDUSTRY
            OVERVIEW**
  Helicopters
            first
            came into widespread commercial use in the oil and gas industry for transporting
            personnel and supplies to offshore oil rigs and remote onshore areas.
            Over the
            years, the use of helicopters has expanded into many other areas where
            urgency
            or difficulty of access justifies the cost. Although the oil and gas
            industry
            still accounts for a substantial portion of the demand for helicopter
            services
            worldwide, for several decades helicopters have been used for a variety
            of
            purposes, such as forestry, mining, search and rescue, emergency medical
            services, construction, and recreation.
  The
            level of
            worldwide offshore oil and gas exploration and production has traditionally
            influenced demand for helicopter transportation services. Exploration
            activities
            are sensitive to changes in oil and gas prices, whereas production activities
            are generally more stable. For the fiscal year ended April 30,
            2005, 56% of
            our total revenue was derived from oil and gas production activity (fiscal
            2004
            - 61%). As onshore oil and gas reserves continue to decline we expect
            offshore
            oil and gas exploration and production to become a larger portion of
            global oil
            and gas production, resulting in additional demand for helicopter transportation
            services. Furthermore, we expect technology improvements to allow oil
            and gas
            exploration and production companies to pursue opportunities farther
            offshore,
            increasing demand for helicopter transportation services, particularly
            for
            modern helicopters, which generally have a greater range and passenger
            capacity.
            We also expect new exploration and production activity to occur in already
            producing regions and in currently non-producing regions of Africa, Asia,
            South
            America, the Caspian Sea, Australia, the North Sea and eastern Canada.
            We
            believe this increase in activity will result in increased global demand
            for
            helicopter transportation services.
  Rig
            utilization in
            the North Sea ended December 31, 2004 up 13% from the prior
            year.
            Projected utilization rates have also risen, indicating the market will
            likely
            remain strong through 2005. In addition to new smaller companies targeting
            the
            North Sea, large companies are expanding their activities and
            upgrading
            production facilities to extend field production life. We believe the
            need for
            transportation services will increase as activity in the North Sea
            continues to increase from current levels.
  34
 
 To
            effectively
            compete on a global basis for helicopter transportation service contracts,
            we
            believe a helicopter service provider needs to have:
  ·
                  an
                      established brand name;
 ·
                  a
                      strong
                      track record of providing high quality, safe and reliable
                      service;
 ·
                  a
                      large,
                      diversified fleet of helicopters to accommodate various customer
                      requirements;
 ·
                  a
                      cost
                      structure that allows the provision of services at competitive
                      prices;
 ·
                  a
                      broad
                      network of regional bases to cost-effectively bid for new contracts
                      in
                      most areas of the world as opportunities arise; and
 ·
                  familiarity
                      with a variety of local business practices and regulations
                      around the
                      world and established local joint venture partnerships and
                      strategic
                      customer alliances.
  We
            believe we
            possess all of these characteristics.
  **ACQUISITIONS**
  During
            the year we
            acquired three new businesses to complement our existing helicopter support
            services. The August 2004 acquisition of Multifabs, an Aberdeen-based
            company
            specializing in the production of cold water survival suits for military
            forces,
            emergency services and offshore transportation companies around the world
            enhances our ability to deliver the most comprehensive, cost-effective
            offshore
            services package to our customers in the oil and gas and emergency search
            and
            rescue sectors. Multifabs complements the existing third-party marine,
            military
            and aviation safety business. In the current year we also acquired a
            majority
            position in ATSL, an aircraft engine repair and overhaul company servicing
            General Electric CT 58/T58 and Pratt and Whitney, PT6T turboshaft
            engines,
            and the assets and capabilities of Coulson, a British Columbia,
            Canada
            based helicopter component and turbine maintenance repair and overhaul
            provider.
            ATSL and Coulson are important elements of our strategic expansion of
            our global
            repair and overhaul capabilities.
  **DISCONTINUED
            OPERATIONS**
  During
            the year we
            sold two non-core components of the Schreiner business segments, Schreiner
            Canada and SAMCO, and realized a net gain on sale of $8.6 million.
            Schreiner Canada assembles, services and operates unmanned air, ground
            and sea
            vehicles and targets for training military forces and the defence industry
            and
            is based in Medicine Hat, AB, Canada. SAMCO is a certified aviation maintenance
            facility, located at Maastricht-Aachen Airport, the Netherlands, specializing
            in
            base maintenance and the repair, maintenance and modification of fixed
            wing
            aircraft.
  The
            potential sale
            of Composites, the remaining non-core business held for sale, to any
            potential
            acquirer will be contingent on the acceptance of certain terms and conditions
            by
            the Government of Newfoundland and Labrador.
  35
 
 **FLEET**
 Our
            fleet at
            April 30, 2005 was comprised of the following aircraft by
            segment:
  Aircraft
                      Type
                  
                  European
                      flying
                  
                  International
                      flying
                  
                  Schreiner
                  
                  Total
                  
                  Owned
                  
                  LeasedHeavyEurocopter
                      Super Puma MkII
                  
                  
                  16
                  
                  
                  2
                  
                  
                  -
                  
                  
                  18
                  
                  
                  1
                  
                  
                  17Eurocopter
                      Super Puma
                  
                  
                  21
                  
                  
                  9
                  
                  
                  -
                  
                  
                  30
                  
                  
                  19
                  
                  
                  11Sikorsky
                      S61N
                  
                  
                  11
                  
                  
                  12
                  
                  
                  3
                  
                  
                  26
                  
                  
                  23
                  
                  
                  3Sikorsky
                      S-92
                      series
                  
                  
                  2
                  
                  
                  -
                  
                  
                  -
                  
                  
                  2
                  
                  
                  -
                  
                  
                  250
                  
                  
                  23
                  
                  
                  3
                  
                  
                  76
                  
                  
                  43
                  
                  
                  33MediumSikorsky
                      S76
                  
                  
                  7
                  
                  
                  42
                  
                  
                  10
                  
                  
                  59
                  
                  
                  49
                  
                  
                  10Bell
                      412
                  
                  
                  -
                  
                  
                  12
                  
                  
                  -
                  
                  
                  12
                  
                  
                  9
                  
                  
                  3Bell
                      212
                  
                  
                  -
                  
                  
                  12
                  
                  
                  -
                  
                  
                  12
                  
                  
                  8
                  
                  
                  4Eurocopter
                      365 Series
                  
                  
                  11
                  
                  
                  4
                  
                  
                  16
                  
                  
                  31
                  
                  
                  22
                  
                  
                  9Other
                  
                  
                  1
                  
                  
                  -
                  
                  
                  -
                  
                  
                  1
                  
                  
                  1
                  
                  
                  -19
                  
                  
                  70
                  
                  
                  26
                  
                  
                  115
                  
                  
                  89
                  
                  
                  26LightBell
                      206
                  
                  
                  -
                  
                  
                  6
                  
                  
                  -
                  
                  
                  6
                  
                  
                  6
                  
                  
                  -Eurocopter
                      AS350/355
                  
                  
                  -
                  
                  
                  2
                  
                  
                  -
                  
                  
                  2
                  
                  
                  2
                  
                  
                  -Other
                  
                  
                  -
                  
                  
                  -
                  
                  
                  2
                  
                  
                  2
                  
                  
                  2
                  
                  
                  --
                  
                  
                  8
                  
                  
                  2
                  
                  
                  10
                  
                  
                  10
                  
                  
                  -Total
                      Helicopters
                  
                  
                  69
                  
                  
                  101
                  
                  
                  31
                  
                  
                  201
                  
                  
                  142
                  
                  
                  59Fixed-wing
                  
                  
                  -
                  
                  
                  4
                  
                  
                  10
                  
                  
                  14
                  
                  
                  10
                  
                  
                  4Total
                      Aircraft
                  
                  
                  69
                  
                  
                  105
                  
                  
                  41
                  
                  
                  215
                  
                  
                  152
                  
                  
                  63
  During
            fiscal 2005,
            we completed five sale-leaseback transactions, four of which were aircraft
            purchased in fiscal 2005. We also entered into operating leases for four
            new
            additional aircraft, returned four aircraft to the lessors and purchased
            seven
            aircraft from a lessor. As a result of the foregoing transactions, the
            number of
            leased aircraft in our fleet decreased by two during fiscal 2005, from
            65 leased
            aircraft as at April 30, 2004 to 63 leased aircraft as at April 30,
            2005. We also purchased eleven new aircraft, disposed of five aircraft
            and wrote
            off one aircraft due to the total loss resulting from an accident during
            the
            period. As a result of these purchases, disposals and the aforementioned
            leasing
            transactions, the number of owned aircraft in our fleet increased from
            141 as at
            April 30, 2004 to 152 as at April 30, 2005.
  Based
            on
            independent appraisals, the estimated fair market value of our owned
            aircraft
            fleet was $628.9 million as at April 30, 2005, exceeding
            its book
            value by approximately $53.2 million. The appraisal surplus has
            declined by
            $49.1 million during fiscal 2005; from $102.3 million at
            April 30, 2004 to $53.2 million at April 30, 2005.
            This decline
            was attributable primarily to the impact of foreign exchange rate fluctuations
            on the translation of the aircrafts’ appraised values.
  **Lease
            Obligations**
  We
            have entered
            into aircraft operating leases with 18 lessors in respect of 63 aircraft
            included in our fleet at April 30, 2005. At inception, our aircraft
            leases
            had terms not exceeding 8.5 years. At April 30, 2005, these
            leases had
            expiry dates ranging from 2006 to 2013. The total minimum lease payments
            under
            these aircraft operating leases totalled $243.7 million at April 30,
            2005. We have options to purchase the aircraft at fair market value or
            agreed
            amounts that do not constitute bargain purchase options, but have 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 our expense. We may
            either
            perform this work internally through Heli-One or have the work performed
            by an
            external repair and overhaul service provider. There is no commitment
            to incur
            these costs unless the aircraft is flown. We have also given guarantees
            to
            certain lessors in connection with these aircraft leases. (See *“* *Off-Balance
            Sheet Arrangements* *”* .)
  36
 
 In
            addition to
            payments under aircraft operating leases, we have minimum lease payments
            of
            $36.8 million for the same periods related to operating lease
            commitments
            for buildings, land and other equipment.
  For
            additional
            details see *“* *Contractual
            Obligations* *”* and also
            Notes 28 and 30 to our fiscal 2005
            audited consolidated financial statements.
  **Commitments
            to Acquire New Aircraft**
  As
            at
            April 30, 2005, we had ordered and made deposits (Note 13 and
            28  to
            our fiscal 2005 audited consolidated financial statements) for a number
            of
            aircraft. At April 30, 2005, we had committed to purchase eight
            heavy and
            17 medium aircraft. Total capital committed to these purchases is approximately
            $279.2 million (U.S. $222.2 million). These aircraft
            are expected
            to be delivered in fiscal 2006 and will be deployed in our European and
            International operations.
  Where
            possible, we
            intend to finance these aircraft through operating leases.
  **RESULTS
            OF
            OPERATIONS**
  **Foreign
            Exchange**
  We
            are a global
            operator and our financial results are therefore impacted by fluctuations
            in
            foreign exchange rates, particularly those with respect to European currencies
            and U.S. dollars. The favourable impact of foreign exchange on revenue
            during
            fiscal 2005 was $0.1 million. The unfavourable impact on segment
            EBITDA was
            $1.2 million during fiscal 2005. Since financing charges, income
            tax
            expense, capital expenditures and debt repayments are also primarily
            in European
            currencies and U.S. dollars, the net impact of foreign exchange on net
            earnings
            and cash flow is not as significant. Our overall approach to managing
            foreign
            currency exposures includes identifying and quantifying our currency
            exposures,
            utilizing natural hedges were possible and putting in place financial
            instruments, when considered appropriate, to manage the remaining exposures.
            In
            managing this risk, we may use financial instruments including forwards,
            swaps,
            and other derivative instruments. Company policy specifically prohibits
            the use
            of derivatives for speculative purposes. See *“* *Liquidity
            and
            Capital Resources* *-* *Financing
            Activities* *”* , *“* *Financial
            Instruments* *”* and *“* *Risks
            and
            Uncertainties* *-* *Foreign
            Currency* *”* .
  **Segments**
  We
            provide certain
            financial and related information about our operating 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. In our
            efforts to
            achieve this objective, we provide information about segment revenues,
            segment
            EBITDA and operating income because these financial measures are used
            by our key
            decision makers in making operating decisions and assessing performance.
            For
            additional information about our segment revenues and segment EBITDA
            see
            Note 27 to our fiscal 2005
            audited consolidated financial statements.
  We
            identify five
            reporting segments in our financial statements. The primary factor considered
            in
            identifying segments is geographic coverage, which also impacts the nature
            of
            our operations, the type of contracts we enter and the type of aircraft
            we
            utilize. Our five reporting segments are:
  ·
                  The
                      European
                      flying segment includes primarily helicopter services to the
                      oil and gas
                      industry in the U.K., Norwegian and Danish sectors of the North
                      Sea. In
                      addition, the European flying segment includes helicopter search
                      and
                      rescue service operations in Ireland and
                      Norway.
  ·
                  The
                      International flying segment includes primarily helicopter
                      services for
                      offshore oil and gas, search and rescue and emergency medical
                      customers in
                      Asia, Africa, Australia, South America, the east coast of Canada
                      and other
                      locations around the world.
  37
 
 ·
                  Schreiner
                      includes helicopter and fixed-wing flying services primarily
                      to the
                      offshore oil and gas industry in the Netherlands, Africa and
                      Asia and
                      includes other ancillary businesses including aircraft parts
                      sales.
  ·
                  The
                      Repair
                      and overhaul segment includes helicopter repair and overhaul
                      facilities
                      located in Norway, Canada and the U.K., which provide services
                      to our
                      helicopter fleet and third-party customers located in Europe,
                      Asia, and
                      North America and the survival suit and safety equipment production
                      business.
  ·
                  The
                      Corporate
                      and other segment includes corporate head office and other
                      activities.
  In
            fiscal 2006, as
            a result of the restructuring project, we will report results of operations
            under four segments: Global operations, European operations, Heli-One
            and
            Corporate and other.
  **YEAR
            ENDED
            APRIL 30, 2005 COMPARED TO YEAR ENDED APRIL 30,
            2004**
  **Revenue**
  Total
            revenue for
            fiscal 2005 was $903.3 million, an increase of $183.3 million
            or 25.5%
            from revenue of $720.0 million for fiscal 2004. The following
            are the
            primary reasons for the change in revenue.
  (i)
                  Excluding
                      the
                      impact of foreign exchange, there was a $122.3 million
                      increase in
                      revenue in the Schreiner flying segment. This was due to a
                      full year of
                      revenue in 2005 compared to 2004, which only included revenue
                      from the
                      date of acquisition of February 16,
                      2004.
 
 (ii)
                  An
                      increase,
                      excluding the impact of foreign exchange, in revenue in our
                      International
                      flying segment of $48.0 million due to new and expanded
                      contracts and
                      to higher flying activity on existing
                      contracts.
 
 (iii)
                  An
                      increase,
                      excluding the impact of foreign exchange, in revenue in our
                      Repair and
                      overhaul segment of $19.3 million. This increase was
                      due primarily to
                      revenue earned in newly acquired businesses of
                      $19.7 million.
 
 By
            industry sector,
            the distribution of the year-over-year change in revenue is set forth
            in the
            table below:
  Revenue
            Summary by
            Industry Sector
  Fiscal
                      Year
                      Ended April 30
                  
                  Change
                      Attributable to2005
                  
                  2004
                  
                  Change
                  
                  2005
                  
                  2004
                  
                  Change
                  
                  Schreiner
                      Acquisition
                  
                  Other
                      Factors*(i)*Industry
                      Sector
                  
                  (percentage
                      of total revenue)
                  
                  (in millions
                      of CDN dollars)
                  
                  (in millions
                      of CDN dollars)Oil
                      and Gas
                      Production
                  
                  
                  56.3
                  %
                  
                  61.1
                  %
                  
                  (4.8
                  )%
                  $
                  508.3
                  
                  $
                  439.9
                  
                  $
                  68.4
                  
                  $
                  63.0
                  
                  $
                  5.4Oil
                      and Gas
                      Exploration
                  
                  
                  10.7
                  %
                  
                  12.3
                  %
                  
                  (1.6
                  )%
                  
                  96.3
                  
                  
                  88.6
                  
                  
                  7.7
                  
                  
                  (0.1
                  )
                  
                  7.8Repair
                      and
                      Overhaul
                  
                  
                  12.4
                  %
                  
                  9.3
                  %
                  
                  3.1
                  %
                  
                  112.2
                  
                  
                  67.1
                  
                  
                  45.1
                  
                  
                  38.2
                  
                  
                  6.9EMS/SAR
                  
                  
                  11.9
                  %
                  
                  8.6
                  %
                  
                  3.3
                  %
                  
                  107.0
                  
                  
                  62.0
                  
                  
                  45.0
                  
                  
                  0.9
                  
                  
                  44.1Other
                  
                  
                  5.2
                  %
                  
                  5.9
                  %
                  
                  (0.7
                  )%
                  
                  47.4
                  
                  
                  42.8
                  
                  
                  4.6
                  
                  
                  10.0
                  
                  
                  (5.4
                  )Passenger
                      Transportation
                  
                  
                  2.7
                  %
                  
                  1.8
                  %
                  
                  0.9
                  %
                  
                  24.7
                  
                  
                  12.6
                  
                  
                  12.1
                  
                  
                  10.1
                  
                  
                  2.0Training
                  
                  
                  0.8
                  %
                  
                  1.0
                  %
                  
                  (0.2
                  )%
                  
                  7.4
                  
                  
                  7.0
                  
                  
                  0.4
                  
                  
                  -
                  
                  
                  0.4Total
                  
                  
                  100.0
                  %
                  
                  100.0
                  %
                  
                  (0.0
                  )%
                  $
                  903.3
                  
                  $
                  720.0
                  
                  $
                  183.3
                  
                  $
                  122.1
                  
                  $
                  61.2
  (i)
                  The
                      $5.4 million increase in revenue in the oil and gas
                      production sector
                      was due primarily to the growth in the International flying
                      segment offset
                      partially by unfavourable foreign exchange and a decrease in
                      the European
                      flying segment. The $7.8 million increase in the oil
                      and gas
                      exploration sector was due primarily to growth in the International
                      and
                      European flying segments. The $6.9 million increase
                      in repair and
                      overhaul revenue was due primarily to revenue from growth in
                      the business
                      and revenue from newly acquired businesses. The $44.1 million
                      increase in EMS/SAR revenue was primarily due to growth in
                      the European
                      flying segment including favourable foreign
                      exchange.
  38
 
 The
            table below
            provides a summary of segment revenue by quarter for fiscal 2005 and
            2004:
  Revenue
            Summary by
            Quarter
 (in
            millions of
            Canadian dollars)
  Period
                      
                      
                      
                      European
                          flying
                      
                      International
                          flying
                      
                      Schreiner
                      
                      Total
                          Flying
                          Segments
                      
                      Repair
                          andoverhaul
                      
                      TotalFiscal
                          2005
                      
                      
                      Q1
                      
                      $
                      115.6
                      
                      $
                      55.5
                      
                      $
                      41.5
                      
                      $
                      212.6
                      
                      $
                      12.9
                      
                      $
                      225.5Q2
                      
                      
                      110.1
                      
                      
                      57.1
                      
                      
                      39.4
                      
                      
                      206.6
                      
                      
                      18.7
                      
                      
                      225.3Q3
                      
                      
                      108.1
                      
                      
                      59.4
                      
                      
                      37.3
                      
                      
                      204.8
                      
                      
                      21.3
                      
                      
                      226.1Q4
                      
                      
                      104.1
                      
                      
                      61.5
                      
                      
                      36.4
                      
                      
                      202.0
                      
                      
                      24.4
                      
                      
                      226.4$
                      437.9
                      
                      $
                      233.5
                      
                      $
                      154.6
                      
                      $
                      826.0
                      
                      $
                      77.3
                      
                      $
                      903.3Fiscal
                          2004
                      
                      
                      Q1
                      
                      $
                      112.1
                      
                      $
                      43.6
                      
                      $
                      -
                      
                      $
                      155.7
                      
                      $
                      13.3
                      
                      $
                      169.0Q2
                      
                      
                      111.5
                      
                      
                      46.7
                      
                      
                      -
                      
                      
                      158.2
                      
                      
                      14.4
                      
                      
                      172.6Q3
                      
                      
                      104.7
                      
                      
                      49.0
                      
                      
                      -
                      
                      
                      153.7
                      
                      
                      15.3
                      
                      
                      169.0Q4
                      
                      
                      109.4
                      
                      
                      52.5
                      
                      
                      32.4
                      
                      
                      194.3
                      
                      
                      15.1
                      
                      
                      209.4$
                      437.7
                      
                      $
                      191.8
                      
                      $
                      32.4
                      
                      $
                      661.9
                      
                      $
                      58.1
                      
                      $
                      720.0
  We
            derive our
            flying revenue from two types of contracts. Approximately 51% of our
            fiscal 2005
            flying revenue (fiscal 2004 - 56%) was derived from hourly charges (including
            hourly charges on contracts that also have fixed charges), and the remainder
            was
            generated by fixed monthly charges. Because of the significant fixed
            charge
            component of our flying revenue mix, an increase or decrease in flying
            hours may
            not result in a proportionate change in revenue. While flying hours may
            not
            correlate directly with revenues, they remain a good measure of the level
            of
            activity and fleet utilization. The following two tables provide, respectively,
            a quarterly summary of our flying hours and a summary of our flying revenue
            hourly vs. fixed mix for fiscal 2005 and 2004, in each case by
            segment.
  Flying
            Hours
  Flying
                      Hours
                  
                  Number
                      of
                      Aircraft at Period EndPeriod
                  
                  
                  
                  European
                      flying
                  
                  International
                      flying
                  
                  Schreiner
                  
                  Total
                  
                  European
                      flying
                  
                  International
                      flying
                  
                  Schreiner
                  
                  TotalFiscal
                      2005
                  
                  
                  Q1
                  
                  
                  21,215
                  
                  
                  12,466
                  
                  
                  7,268
                  
                  
                  40,949
                  
                  
                  71
                  
                  
                  96
                  
                  
                  38
                  
                  
                  205Q2
                  
                  
                  20,491
                  
                  
                  12,419
                  
                  
                  7,482
                  
                  
                  40,392
                  
                  
                  69
                  
                  
                  99
                  
                  
                  39
                  
                  
                  207Q3
                  
                  
                  19,712
                  
                  
                  12,988
                  
                  
                  7,297
                  
                  
                  39,997
                  
                  
                  68
                  
                  
                  106
                  
                  
                  40
                  
                  
                  214Q4
                  
                  
                  19,086
                  
                  
                  13,259
                  
                  
                  6,616
                  
                  
                  38,961
                  
                  
                  69
                  
                  
                  105
                  
                  
                  41
                  
                  
                  21580,504
                  
                  
                  51,132
                  
                  
                  28,663
                  
                  
                  160,299Fiscal
                      2004
                  
                  
                  Q1
                  
                  
                  22,351
                  
                  
                  11,057
                  
                  
                  -
                  
                  
                  33,408
                  
                  
                  72
                  
                  
                  90
                  
                  
                  -
                  
                  
                  162Q2
                  
                  
                  21,951
                  
                  
                  11,926
                  
                  
                  -
                  
                  
                  33,877
                  
                  
                  70
                  
                  
                  94
                  
                  
                  -
                  
                  
                  164Q3
                  
                  
                  19,806
                  
                  
                  12,066
                  
                  
                  -
                  
                  
                  31,872
                  
                  
                  72
                  
                  
                  95
                  
                  
                  -
                  
                  
                  167Q4
                  
                  
                  19,939
                  
                  
                  12,216
                  
                  
                  5,701
                  
                  
                  37,856
                  
                  
                  71
                  
                  
                  97
                  
                  
                  38
                  
                  
                  20684,047
                  
                  
                  47,265
                  
                  
                  5,701
                  
                  
                  137,013
  39
 
 Flying
            Revenue Mix
            - Hourly vs. Fixed
 (in
            millions of
            Canadian dollars)
  Hourly
                  
                  Fixed
                  
                  TotalSegment
                  
                  Fiscal
                      2005
                  
                  Fiscal
                      2004
                  
                  Fiscal
                      2005
                  
                  Fiscal
                      2004
                  
                  Fiscal
                      2005
                  
                  Fiscal
                      2004European
                      flying
                  
                  $
                  260.5
                  
                  $
                  272.5
                  
                  $
                  151.0
                  
                  $
                  138.3
                  
                  $
                  411.5
                  
                  $
                  410.8International
                      flying
                  
                  
                  73.8
                  
                  
                  61.2
                  
                  
                  147.7
                  
                  
                  119.0
                  
                  
                  221.5
                  
                  
                  180.2Schreiner
                  
                  
                  40.1
                  
                  
                  7.6
                  
                  
                  66.6
                  
                  
                  9.2
                  
                  
                  106.7
                  
                  
                  16.8$
                  374.4
                  
                  $
                  341.3
                  
                  $
                  365.3
                  
                  $
                  266.5
                  
                  $
                  739.7
                  
                  $
                  607.8
  We
            utilize
            primarily heavy aircraft in the European flying segment and medium aircraft
            in
            the International flying segment and in Schreiner. As illustrated in
            the table
            below, the overall mix of revenue by aircraft type remained relatively
            consistent from fiscal 2004 to fiscal 2005, except for fixed wing revenue
            which
            has increased due to the acquisition of Schreiner.
  Flying
            Revenue Mix
            - Aircraft Type
 (in
            millions of
            Canadian dollars)
  Fiscal
                      2005
                  
                  Fiscal
                      2004Segment
                  
                  Heavy
                  
                  Medium
                  
                  Light
                  
                  Fixed
                    Wing
                  
                  Total
                  
                  Heavy
                  
                  Medium
                  
                  Light
                  
                  Fixed
                    Wing
                  
                  TotalEuropean
                      flying
                  
                  $
                  321.2
                  
                  $
                  90.3
                  
                  $
                  -
                  
                  $
                  -
                  
                  $
                  411.5
                  
                  $
                  330.6
                  
                  $
                  80.2
                  
                  $
                  -
                  
                  $
                  -
                  
                  $
                  410.8International
                      flying
                  
                  
                  66.2
                  
                  
                  146.3
                  
                  
                  3.5
                  
                  
                  5.5
                  
                  
                  221.5
                  
                  
                  50.9
                  
                  
                  119.2
                  
                  
                  4.4
                  
                  
                  5.7
                  
                  
                  180.2Schreiner
                  
                  
                  12.0
                  
                  
                  63.6
                  
                  
                  1.4
                  
                  
                  29.7
                  
                  
                  106.7
                  
                  
                  1.9
                  
                  
                  9.0
                  
                  
                  0.5
                  
                  
                  5.4
                  
                  
                  16.8Total
                      FlyingRevenue
                  
                  $
                  399.4
                  
                  $
                  300.2
                  
                  $
                  4.9
                  
                  $
                  35.2
                  
                  $
                  739.7
                  
                  $
                  383.4
                  
                  $
                  208.4
                  
                  $
                  4.9
                  
                  $
                  11.1
                  
                  $
                  607.8Total
                      %
                  
                  
                  54.0
                  %
                  
                  40.6
                  %
                  
                  0.7
                  %
                  
                  4.7
                  %
                  
                  100.0
                  %
                  
                  63.1
                  %
                  
                  34.3
                  %
                  
                  0.8
                  %
                  
                  1.8
                  %
                  
                  100.0
                  %
  We
            regularly
            compare our activity levels against available industry data. Aberdeen
            Airport
            Ltd. reports monthly helicopter passenger traffic for all helicopter
            operations
            in Aberdeen, Scotland, which is our largest base (accounting for approximately
            32% of total European flying revenue) as measured by the number of aircraft
            and
            revenue. The following table provides a quarterly summary of all helicopter
            passenger traffic at Aberdeen Airport for fiscal 2005 and 2004.
  Aberdeen
            Airport -
            Helicopter Passengers
  Fiscal
                      2005
                  
                  Fiscal
                      2004
                  
                  %
                      Change
                    (2005
                      vs
                      2004)Q1
                  
                  
                  102,228
                  
                  
                  101,757
                  
                  
                  0.5
                  %Q2
                  
                  
                  104,715
                  
                  
                  95,227
                  
                  
                  10.0
                  %Q3
                  
                  
                  95,896
                  
                  
                  87,588
                  
                  
                  9.5
                  %Q4
                  
                  
                  101,132
                  
                  
                  89,975
                  
                  
                  12.4
                  %Total
                  
                  
                  403,971
                  
                  
                  374,547
                  
                  
                  7.9
                  %
 Source:
            Aberdeen
            Airport Ltd.
  The
            data in the
            above table shows a year-over-year increase in activity in Aberdeen.
            While
            activity levels in Aberdeen increased 7.9% in fiscal 2005 versus fiscal
            2004,
            our flying hours in Europe overall declined by 4.2% over the same period.
            This
            decline relates primarily to the redeployment of aircraft to support
            growth in
            the international markets and reduced activity from expired contracts
            that have
            been partially offset by revenue from new entrants to the
            North Sea.
  40
 
 **Direct
            Costs**
  Direct
            costs for
            fiscal 2005 increased by $126.2 million, to $702.2 million,
            from
            $576.0 million for fiscal 2004. This $126.2 million increase
            was
            driven partially by (i) the acquisition of Schreiner which had
            direct costs
            of $119.5 million, compared to $29.2 million for fiscal
            2004. The
            remaining increase in direct costs reflects an increase in variable costs
            incurred in relation to revenue growth, primarily in our International
            flying
            and Repair and overhaul segments.
  **General
            and
            Administration Costs**
  General
            and
            administration costs for fiscal 2005 increased by $7.2 million
            to
            $25.8 million from $18.6 million for fiscal 2004. This
            increase is due
            primarily to increases in variable compensation costs and a build-up
            of the
            Financial Services Department in Vancouver, Canada in anticipation of
            delivering
            services to our operating divisions in the new fiscal year.
  **Amortization**
  Amortization
            expense increased $5.3 million, from $25.2 million in fiscal
            2004 to
            $30.5 million in fiscal 2005. Of this $5.3 million increase,
            $4.4 million was attributable to the acquisition of Schreiner.
            The
            remaining increase in amortization was due largely to assets employed
            in the
            newly acquired businesses within the Repair and overhaul segment and
            aircraft
            additions in fiscal 2005. See *“* *Fleet* *”* for additional
            information regarding aircraft additions.
  **Restructuring** **Costs**
  During
            the year we
            completed a thorough examination of our operations and organizational
            structure
            with a view to strengthening and standardizing our operations, lowering
            overhead
            costs and securing our leadership position well into the future. As a
            result, we
            have relocated our head office to Vancouver, Canada and are consolidating
            all
            our current operations into three new operating divisions, Global operations,
            European operations and Heli-One.
  During
            fiscal 2005,
            we expensed costs of $17.6 million (after tax, $11.8 million)
            in
            connection with the restructuring activities. Restructuring costs were
            comprised
            of severance, termination, relocation, planning, consulting and benefit
            adjustments. Additional costs are expected to be expensed in fiscal 2006
            as the
            restructuring activities continue relating to terminations, severance,
            consulting and other costs. It is anticipated that the majority of remaining
            costs will be expensed in the first half of fiscal 2006.
  During
            fiscal 2004
            we incurred restructuring costs of $9.2 million (after tax,
            $6.4 million) in connection with the consolidation of our European
            operations and other related activities. Restructuring costs were comprised
            of
            termination benefits, professional fees, travel costs and other incremental
            costs directly associated with the restructuring activities. As at
            April 30, 2004 the consolidation of the European operations was
            completed
            with no material additional costs to be incurred.
  **Gain
            on
            Disposal of Assets**
  During
            fiscal 2005,
            we disposed of property and equipment, primarily aircraft - (see
*"* *Fleet"* and “ *Liquidity
            and
            Capital Resources* - *Investing
            Activities"* ),
            and received net
            proceeds of $90.9 million, resulting in a net recognized gain
            of
            $4.1 million and a deferred gain of $4.5 million. The latter
            related
            primarily to the five sale-leaseback transactions during the year. The
            net
            recognized gain of $4.1 million was comprised primarily of gains
            on the
            disposal of four aircraft during the year and a gain from insurance proceeds
            received for the total loss of a Bell 212 aircraft operating in
            Australia.
  During
            fiscal 2005,
            we received insurance proceeds of $1.7 million for the total loss
            of a
            Bell 212 aircraft on June 2, 2004. The book value of the
            aircraft was
            $0.8 million, resulting in a gain of $0.9 million. The
            aircraft was
            being flown for a medical evacuation and crashed while manoeuvring in
            heavy rain
            during approach. Any incurred or outstanding liabilities relating to
            this
            incident are covered by our insurance providers.
  41
 
 **Operating
            Income**
  Operating
            income
            increased by $37.0 million from $94.3 million in fiscal
            2004 to
            $131.3 million in fiscal 2005. This increase was primarily due
            to the
            inclusion of Schreiner for a full year ($22.5 million) and growth
            in the
            International flying segment ($14.7 million).
  **Debt
            Settlement**
  During
            fiscal 2005,
            we expensed $2.0 million (after tax, $1.3 million) of debt
            settlement
            costs in connection with a senior credit facility revision and redemption
            of our
            remaining 113⁄4% senior subordinated notes and the remaining 8% subordinated
            debentures.
  During
            fiscal 2004,
            we incurred $19.7 million (after tax, $12.6 million) of
            debt
            settlement costs in connection with the retirement, in April 2004,
            of
            (i) € 87.3  million
            ($140.6 million) (60% of original principal amount) of our 113⁄4% senior
            subordinated notes, (ii) £32.7 million ($78.7 million) and € 25 million
            ($40.3 million) of our senior credit facilities and
            (iii) NOK123.5 million ($24.3 million) of our 7%
            term
            loan.
  **Financing
            Charges**
  Financing
            charges
            consist primarily of (i) interest on debt, (ii) amortization
            of
            deferred financing costs, (iii) foreign exchange gains and losses
            on
            operating activities, working capital revaluation, debt repayment and
            debt
            revaluation and (iv) realized foreign exchange gains and losses
            on forward
            foreign currency contracts that have not been designated as hedging instruments.
            Financing charges for the fiscal year ended April 30, 2005 totalled
            $37.1 million versus $29.0 million in fiscal 2004. The
            $8.1 million increase in financing charges this year was driven
            primarily
            by a $2.3 million increase in interest on debt obligations and
            a
            $4.9 million net increase in realized foreign exchange losses
            from the
            prior year.
  (in
                      millions
                      of Canadian dollars)
                  
                  **2005**
                  
                  2004Interest
                      on
                      debt obligations
                  
                  **$**
                  **32.9**
                  
                  $
                  30.6Amortization
                      of deferred financing costs
                  
                  
                  **3.2**
                  
                  
                  3.6Foreign
                      exchange (gain) loss from operating activities and working
                      capital
                      revaluation
                  
                  
                  **(3.1**
                  **)**
                  
                  5.5Foreign
                      exchange loss (gain) on debt repayment
                  
                  
                  **0.6**
                  
                  
                  (1.8
                  )Foreign
                      exchange loss on revaluation of long-term debt
                  
                  
                  **1.3**
                  
                  
                  -Foreign
                      exchange gain on foreign currency agreement
                  
                  
                  **-**
                  
                  
                  (9.8
                  )Interest
                      revenue
                  
                  
                  **(0.5**
                  **)**
                  
                  (1.3
                  )Other
                      interest and banking expenses
                  
                  
                  **2.7**
                  
                  
                  2.2Total
                  
                  **$**
                  **37.1**
                  
                  $
                  29.0
  The
            average rate on
            our variable-rate senior credit facilities during fiscal 2005 was 4.0%
            compared
            to 4.4% in fiscal 2004. In fiscal 2005, a greater proportion of our average
            borrowings on the senior credit facilities was tied to the euro LIBOR
            rate (2005
            - 2.1%) compared to 2004 when a greater proportion of our borrowings
            were tied
            to the GBP LIBOR rate (2004 - 4.25%). Despite this lower effective interest
            rate
            on the senior credit facility borrowings, interest on long-term debt
            increased
            by $2.3 million due to higher average borrowings primarily for
            capital
            expenditures in fiscal 2005 compared to fiscal 2004.
  **Equity
            in
            Earnings of Associated Companies**
  Equity
            in earnings
            of associated companies increased by $1.6 million, from $3.9 million
            in fiscal 2004 to $5.5 million in fiscal 2005. Of this increase,
            $3.1 million was due to the full year inclusion of Schreiner’s 38% equity
            ownership in Inaer offset by reduced equity earnings by CHL in which
            we hold a
            41.75% interest.
  **Income
            Taxes**
  We
            had an income
            tax provision of $23.8 million in fiscal 2005 compared to a recovery
            of
            $16.6 million in fiscal 2004. This (provision) recovery was comprised
            of
            the following:
  42
  (in
                      millions
                      of Canadian dollars)
                  
                  **2005**
                  
                  2004Earnings
                      from
                      continuing operations before income taxes
                  
                  **$**
                  **97.4**
                  
                  $
                  49.6Combined
                      Canadian federal and provincial statutory income tax rate
                  
                  
                  **35**
                  **%**
                  
                  37
                  %Income
                      tax
                      provision calculated at statutory rate
                  
                  
                  **(34.1**
                  **)**
                  
                  (18.4
                  )(Increase)
                      decrease in income tax (provision) recovery resulting
                      from:Reversal
                      of
                      tax liability
                  
                  
                  **-**
                  
                  
                  21.0Rate
                      differences in various jurisdictions
                  
                  
                  **16.2**
                  
                  
                  15.5Effect
                      of
                      change in tax legislation
                  
                  
                  **(4.2**
                  **)**
                  
                  -Non-deductible
                      items
                  
                  
                  **(3.2**
                  **)**
                  
                  (2.4
                  )Large
                      corporations tax
                  
                  
                  **(0.5**
                  **)**
                  
                  (0.2
                  )Other
                      foreign
                      taxes paid
                  
                  
                  **(1.7**
                  **)**
                  
                  (1.6
                  )Non-taxable
                      portion of capital gains
                  
                  
                  **1.2**
                  
                  
                  2.5Non-taxable
                      equity income
                  
                  
                  **1.3**
                  
                  
                  -Other
                  
                  
                  **1.3**
                  
                  
                  0.2Income
                      tax
                      (provision) recovery
                  
                  **$**
                  **(23.8**
                  **)**
                  $
                  16.6
  During
            fiscal 2005,
            legislation was substantially enacted in the Netherlands to reduce the
            corporate
            income tax rate from 34.5% to 30.0%. As a result, we adjusted the value
            of our
            future income tax assets related to losses carried forward and other
            temporary
            differences in the Netherlands by $4.2 million.
  During
            fiscal 2004,
            we recorded a $21.0 million future income tax recovery, a significant
            portion of which is attributable to the reversal of a previously recorded
            tax
            liability as a result of the disposition of certain of our European fleet.
            The
            remainder of the recovery relates to the reversal of a previously recorded
            tax
            liability, which is no longer considered necessary as a result of the
            completion
            of tax authority audits in various jurisdictions.
  We
            are subject to
            taxation in many jurisdictions throughout the world. The effective tax
            rate and
            tax liability are affected by a number of factors, such as the amount
            of taxable
            income in particular jurisdictions, the tax rates in such jurisdictions,
            tax
            treaties between jurisdictions, the extent to which funds are transferred
            between jurisdictions and income is repatriated, and changes in law.
            Generally,
            the tax liability for each legal entity is determined on either (i) a
            non-consolidated basis or (ii) a consolidated basis with other
            entities
            incorporated in the same jurisdiction, in either case, without regard
            to the
            taxable losses of non-consolidated affiliate entities. As a result, we
            may pay
            income taxes in certain jurisdictions even though on an overall basis
            a net loss
            for the period may be incurred.
  We
            have accumulated
            approximately $91.9 million in non-capital tax losses of which
            $34.8 million is available to reduce future Canadian income taxes
            otherwise
            payable, $51.4 million is available to reduce future Dutch income
            taxes
            otherwise payable and the remainder is available to reduce future income
            taxes
            otherwise payable in other foreign jurisdictions. If unused, these losses
            will
            expire as follows:
  (in
                      millions
                      of Canadian dollars)2006
                  
                  $
                  0.52007
                  
                  
                  5.02008
                  
                  
                  0.22009
                  
                  
                  3.02014
                  
                  
                  15.72015
                  
                  
                  10.4Indefinitely
                  
                  
                  57.1$
                  91.9
  43
 
 **Net
            Earnings from Continuing Operations**
  Net
            earnings from
            continuing operations for fiscal 2005 was $73.6 million ($1.61 per
            share, diluted), an increase of $7.3 million from $66.3 million
            ($1.47 per share, diluted) in fiscal 2004. This increase was the
            result of
            increased operating income of $37.0 million primarily due to the
            inclusion
            of Schreiner for a full year ($22.5 million) and growth in the
            International flying segment ($14.7 million), lower debt settlement
            costs
            of $17.7 million, a $1.6 million increase in equity in
            earnings of
            associated companies, offset by an $8.l million increase in financing
            charges and a $40.5 million increase in the provision for income
            taxes. See *“* *Results
            of
            Operations* *-* *Income
            Taxes* *”* .
  **Net
            Loss
            from Discontinued Operations**
  Net
            loss from
            discontinued operations for fiscal 2005 was $11.0 million ($(0.24) per
            share, diluted), up $8.4 million from a loss of $2.6 million
            for
            fiscal 2004 ($(0.06) per share, diluted). This was primarily the
            result of
            an evaluation of the fair value of the assets and liabilities of Composites,
            a
            business currently held for sale and reported under discontinued operations.
            The
            assets and liabilities of this business were measured at the lower of
            their
            carrying amounts and their estimated fair value less costs to sell. As
            a result,
            a fair value adjustment of $14.3 million was recorded in the current
            fiscal
            year. This fair value adjustment and operating losses from discontinued
            operations were partially offset by an $8.6 million net gain on
            the
            disposal of two non-core companies of Schreiner in the current
            year.
  **Net
            Earnings**
  Net
            earnings
            declined by $1.1 million to $62.6 million ($1.37 per
            share,
            diluted, $1.49 per share, basic) in fiscal 2005, down from
            $63.7 million ($1.41 per share, diluted, $1.54 per
            share, basic)
            in fiscal 2004. This reflects a $7.3 million increase in net earnings
            from
            continuing operations and an $8.4 million decrease in net earnings
            from
            discontinued operations.
  **Quarterly
            Information**
  The
            table below
            provides a summary of our revenue, net earnings from continuing operations,
            net
            earnings, total assets, total long-term financial liabilities, cash dividends
            per share, net earnings per share from continuing operations and net
            earnings
            per share for each quarter in fiscal 2005 and 2004.
  Fiscal
                  
                  Revenue
                  
                  Net
                      earnings
                      from continuing operations
                  
                  Net
                      earnings
                  
                  Total
                      assets
                  
                  Total
                      long-term financial liabilities
                  
                  Cash
                      dividends per share
                  
                  Net
                      earnings
                      per share from continuing operations
                  
                  Net
                      earnings
                      (loss) per share2005
                  
                  (in millions
                      of Canadian dollars)
                  
                  declared
                  
                  Basic
                  
                  Diluted
                  
                  Basic
                  
                  DilutedQ1
                  
                  $
                  225.5
                  
                  $
                  23.3
                  
                  $
                  22.3
                  
                  $
                  1,520.7
                  
                  $
                  824.0
                  
                  $
                  -
                  
                  $
                  0.56
                  
                  $
                  0.51
                  
                  $
                  0.53
                  
                  $
                  0.49Q2
                  
                  
                  225.3
                  
                  
                  16.0
                  
                  
                  (1.3
                  )
                  
                  1,534.2
                  
                  
                  846.7
                  
                  
                  0.30
                  
                  
                  0.38
                  
                  
                  0.35
                  
                  
                  (0.03
                  )
                  
                  (0.03
                  )Q3
                  
                  
                  226.1
                  
                  
                  17.3
                  
                  
                  22.8
                  
                  
                  1,644.7
                  
                  
                  915.0
                  
                  
                  -
                  
                  
                  0.41
                  
                  
                  0.38
                  
                  
                  0.55
                  
                  
                  0.50Q4
                  
                  
                  226.4
                  
                  
                  17.0
                  
                  
                  18.8
                  
                  
                  1,743.2
                  
                  
                  942.0
                  
                  
                  -
                  
                  
                  0.40
                  
                  
                  0.37
                  
                  
                  0.44
                  
                  
                  0.41Total
                  
                  $
                  903.3
                  
                  $
                  73.6
                  
                  $
                  62.6
                  
                  
                  
                  
                  
                  
                  
                  $
                  0.30
                  
                  $
                  1.75
                  
                  $
                  1.61
                  
                  $
                  1.49
                  
                  $
                  1.37Fiscal
                    2004Q1
                  
                  $
                  169.0
                  
                  $
                  14.5
                  
                  $
                  13.8
                  
                  $
                  1,110.2
                  
                  $
                  567.0
                  
                  $
                  -
                  
                  $
                  0.36
                  
                  $
                  0.33
                  
                  $
                  0.33
                  
                  $
                  0.31Q2
                  
                  
                  172.6
                  
                  
                  16.0
                  
                  
                  15.5
                  
                  
                  1,114.4
                  
                  
                  555.9
                  
                  
                  -
                  
                  
                  0.38
                  
                  
                  0.35
                  
                  
                  0.37
                  
                  
                  0.34Q3
                  
                  
                  169.0
                  
                  
                  10.0
                  
                  
                  9.0
                  
                  
                  1,162.0
                  
                  
                  572.7
                  
                  
                  0.25
                  
                  
                  0.24
                  
                  
                  0.22
                  
                  
                  0.23
                  
                  
                  0.20Q4
                  
                  
                  209.4
                  
                  
                  25.8
                  
                  
                  25.4
                  
                  
                  1,534.9
                  
                  
                  814.3
                  
                  
                  -
                  
                  
                  0.62
                  
                  
                  0.57
                  
                  
                  0.61
                  
                  
                  0.56Total
                  
                  $
                  720.0
                  
                  $
                  66.3
                  
                  $
                  63.7
                  
                  
                  
                  
                  
                  
                  
                  $
                  0.25
                  
                  $
                  1.60
                  
                  $
                  1.47
                  
                  $
                  1.54
                  
                  $
                  1.41
  There
            is some
            impact of seasonality in the quarterly results in the foregoing table.
            The
            seasonal variations are due primarily to variations in the activity levels
            of
            our oil and gas industry customers’ exploration and development
            activities.
  44
 
 Foreign
            exchange
            has had significant impact on quarterly revenue levels on a year-over-year
            basis. Quarterly revenues for fiscal 2005, in comparison to quarterly
            revenues
            for fiscal 2004, have been impacted by foreign exchange in the following
            amounts: Q1-$6.0 million, Q2-$1.3 million, Q3-$(3.4) million
            and
            Q4-$(3.8) million for a total favourable foreign exchange impact
            of
            $0.1 million.
  Quarterly
            revenue
            net earnings from continuing operations and net earnings in the table
            above were
            impacted by the following items that affect their comparability:
  (i)
                  In
                      Q2 of
                      fiscal 2005, we incurred a tax asset adjustment of $4.2 million
                      relating to a tax rate change in the
                      Netherlands.
 
 (ii)
                  In
                      Q2 of
                      fiscal 2005, we recorded a fair value adjustment for Composites
                      of
                      $14.3 million.
 
 (iii)
                  In
                      Q3 of
                      fiscal 2005, we incurred net-of-tax gain on the sale of SAMCO
                      and
                      Schreiner Canada of $7.5 million included in discontinued
                      operations.
                      The remaining $1.1 million net-of-tax gain on the sale
                      of SAMCO and
                      Schreiner Canada was incurred in Q4 of fiscal
                      2005.
 
 For
            additional
            information on the foregoing quarterly items, see *“* *Results
            of
            Operations* *-* *Income
            Taxes* *”* and *"* *Results
            of
            Operations* *-* *Net
            Loss from
            Discontinued Operations* *”* .
  **REVIEW
            BY
            SEGMENT**
  **Segment
                      Revenue from External Customers - Variance
                      Analysis****(in
                      thousands of Canadian dollars)****Europe**
                  
                  **Int'l**
                  
                  **Schreiner***(ii)*
                  
                  **R&O**
                  
                  **Corporate
                      & other***(iii)*
                  
                  **Total**Year
                      ended
                      April 30, 2004
                  
                  $
                  437,631
                  
                  $
                  191,773
                  
                  $
                  32,490
                  
                  $
                  58,119
                  
                  $
                  -
                  
                  $
                  720,013Foreign
                      exchange impact
                  
                  
                  6,693
                  
                  
                  (6,223
                  )
                  
                  (202
                  )
                  
                  (148
                  )
                  
                  -
                  
                  
                  120Revenue
                      increase (decrease)
                  
                  
                  (6,412
                  )
                  
                  47,966
                  
                  
                  122,325
                  
                  
                  19,332
                  
                  
                  -
                  
                  
                  183,211**Year
                      ended April 30, 2005**
                  
                  **$**
                  **437,912**
                  
                  **$**
                  **233,516**
                  
                  **$**
                  **154,613**
                  
                  **$**
                  **77,303**
                  
                  **$**
                  **-**
                  
                  **$**
                  **903,344***Total
                      revenue increase (decrease)*
                  
                  *$*
                  *281*
                  
                  *$*
                  *41,743*
                  
                  *$*
                  *122,123*
                  
                  *$*
                  *19,184*
                  
                  
                  *N/A*
                  
                  *$*
                  *183,331**%
                      increase (decrease)*
                  
                  
                  *0.1*
                  *%*
                  
                  *21.8*
                  *%*
                  
                  *N/A*
                  
                  
                  *33.0*
                  *%*
                  
                  *N/A*
                  
                  
                  *25.5*
                  *%**%
                      increase (decrease) excluding FX*
                  
                  
                  *(1.5*
                  *%)*
                  
                  *25.0*
                  *%*
                  
                  *N/A*
                  
                  
                  *33.3*
                  *%*
                  
                  *N/A*
                  
                  
                  *25.4*
                  *%*
 
 **Segment
                      EBITDA Variance Analysis****(in
                      thousands of Canadian dollars)****Europe**
                  
                  **Int'l**
                  
                  **Schreiner***(ii)*
                  
                  **R&O**
                  
                  **Corporate
                      & other***(iii)*
                  
                  **Total**Year
                      ended
                      April 30, 2004
                  
                  $
                  72,104
                  
                  $
                  28,285
                  
                  $
                  3,325
                  
                  $
                  41,228
                  
                  $
                  (19,533
                  )
                  $
                  125,409Foreign
                      exchange impact
                  
                  
                  3,991
                  
                  
                  (3,517
                  )
                  
                  (777
                  )
                  
                  (915
                  )
                  
                  -
                  
                  
                  (1,218
                  )Segment
                      EBITDA increase (decrease)
                  
                  
                  (2,038
                  )
                  
                  21,190
                  
                  
                  32,544
                  
                  
                  1,532
                  
                  
                  (2,045
                  )
                  
                  51,183**Year
                      ended April 30, 2005**
                  
                  **$**
                  **74,057**
                  
                  **$**
                  **45,958**
                  
                  **$**
                  **35,092**
                  
                  **$**
                  **41,845**
                  
                  **$**
                  **(21,578**
                  **)**
                  **$**
                  **175,374***Segment
                      EBITDA margin**(i)**-
                      Last
                      year*
                  
                  
                  *16.5*
                  *%*
                  
                  *14.7*
                  *%*
                  
                  *10.2*
                  *%*
                  
                  *21.3*
                  *%*
                  
                  *N/A*
                  
                  
                  *17.4*
                  *%**-
                      This
                      year*
                  
                  
                  *16.9*
                  *%*
                  
                  *19.7*
                  *%*
                  
                  *22.7*
                  *%*
                  
                  *18.7*
                  *%*
                  
                  *N/A*
                  
                  
                  *19.4*
                  *%**Total
                      Segment EBITDA increase (decrease)*
                  
                  *$*
                  *1,953*
                  
                  *$*
                  *17,673*
                  
                  *$*
                  *31,767*
                  
                  *$*
                  *617*
                  
                  *$*
                  *(2,045*
                  *)*
                  *$*
                  *49,965**%
                      increase (decrease)*
                  
                  
                  *2.7*
                  *%*
                  
                  *62.5*
                  *%*
                  
                  *N/A*
                  
                  
                  *1.5*
                  *%*
                  
                  *(10.5*
                  *%)*
                  
                  *39.8*
                  *%**%
                      increase (decrease) excluding FX*
                  
                  
                  *(2.8*
                  *%)*
                  
                  *74.9*
                  *%*
                  
                  *N/A*
                  
                  
                  *3.7*
                  *%*
                  
                  *(10.5*
                  *%)*
                  
                  *40.8*
                  *%*
  (i)
                  Segment
                      EBITDA as a percent of revenue from external customers except
                      for the
                      R&O segment, which is a percent of total
                      revenue.
 (ii)
                  Results
                      for
                      Schreiner for the comparative period are for the period from
                      February 16, 2004 to April 30,
                      2004.
 (iii)
                  Corporate
                      and
                      other includes Inter-segment
                      eliminations.
  45
 
 **European
              Flying Segment**
 The
            European flying
            segment consists primarily of operations in the U.K., Ireland, Norway
            and
            Denmark, mainly serving the helicopter transportation requirements of
            the
            offshore oil and gas industry in the North Sea.
  Revenue
                      by
                      Industry - Europe
                  Revenue
                      by
                      Location - Europe
  
  Revenue
            for fiscal
            2005 was $437.9 million, an increase of $0.3 million from
            revenue of
            $437.6 million earned in fiscal 2004. This $0.3 million
            increase was
            attributable to (i) favourable foreign exchange of $6.7 million,
            essentially offset by (ii) a $6.4 million decrease in flying
            revenue.
            The flying revenue decrease of $6.4 million was related to the
            redeployment
            of aircraft to support growth in international markets and reduced activity
            from
            expired contracts, offset partially by revenue from new entrants to the
            North Sea.
  Segment
            EBITDA for
            fiscal 2005 was $74.1 million, up $2.0 million from segment
            EBITDA of
            $72.1 million in fiscal 2004. This increase was due primarily
            to
            (i) favourable foreign exchange of $4.0 million and
            (ii) increased margins on contracts replacing the low margin bp
            contract
            that expired in July 2004, offset by (iii) $0.9 million
            of direct
            costs incurred in the fourth quarter of the current fiscal year as a
            result of
            the delay in deployment of new aircraft as described below, and
            (iv) increased short-term lease payments to a third party helicopter
            operator and other costs totalling $1.8 million incurred during
            a dispute
            with pilots in Denmark that was settled in the third quarter of the current
            fiscal year.
  Segment
            EBITDA
            margin improved from 16.5% in fiscal 2004 to 16.9% in fiscal 2005. Excluding
            the
            impact of foreign exchange, the segment EBITDA margin in fiscal 2005
            was 16.0%.
            The primary factor causing the margin to decline from 16.5% to 16.0%
            was the
            above noted $0.9 million of costs related to the delay in deployment
            of new
            aircraft and the $1.8 million related to the Danish pilot strike.
            Excluding
            both the impact of foreign exchange and the increase in expenses as noted,
            the
            segment EBITDA margin in fiscal 2005 was 16.6%, up modestly from fiscal
            2004.
  Operating
            income
            for fiscal 2005 was $62.0 million, up $7.1 million from
            operating
            income of $54.9 million in fiscal 2004. This improvement was due
            primarily
            to (i) improved segment EBITDA, and (ii) reduced restructuring
            costs
            of $4.3 million from fiscal 2004. In 2004, we incurred restructuring
            costs
            to implement a new management structure in our European operations to
            provide an
            increased focus on the critical areas of the business.
  We
            started a
            long-term contract in Norway that required the deployment of two new
            heavy
            aircraft at specific dates in the fourth quarter of fiscal 2005. This
            contract
            commitment was not met due to the late delivery of the aircraft by the
            manufacturer. We provided substitute aircraft to meet the customer’s flying
            requirements. If the new aircraft had been deployed on the required dates
            we
            would have realized additional segment EBITDA of approximately $3.0 million
            in the current fiscal year. Direct costs incurred as a result of this
            delay
            included salary, overtime and related costs totalling approximately
            $0.9 million. The customer believes it is entitled to compensation
            for the
            delay. Our interpretation of the contract is that no compensation is
            payable.
            Currently we are in discussions with the customer to resolve this issue
            and
            therefore the eventual outcome is presently unknown.
  46
 
 At
            April 30,
            2005 there were 69 aircraft in this segment, consisting of 50 heavy and
            19
            medium aircraft. Included in the heavy aircraft were 37 Super Pumas including
            16
            Super Puma MkIIs and 2 Sikorsky S-92 aircraft.
  At
            April 30,
            2005 there were 913 employees in the segment (April 30, 2004 -
            937),
            including 344 pilots, 275 engineers and 294 administrative and support
            personnel.
  In
            fiscal 2005,
            72.5% of revenue in this segment was derived primarily from long-term
            contracts.
            The major customers in this segment remained largely unchanged from fiscal
            2004
            and during fiscal 2005 included bp, Exxon Mobil, TotalFinaElf, Maersk,
            Statoil,
            Norsk Hydro, ConocoPhillips, Talisman, Kerr-McGee and the Irish Coast
            Guard.
  During
            and
            subsequent to fiscal 2005 we were awarded the following new contracts
            and
            contract renewals:
  ·
                  New
                      North Sea
                      contract with Marathon Oil U.K. Ltd. (five-year contract) valued
                      at
                      approximately $10.0 million per
                      year.
  ·
                  Commencing
                      September 1, 2005, a new five-year contract, plus two
                      two-year
                      options, with Nexen Petroleum U.K. Limited for the provision
                      of helicopter
                      services in support of Nexen’s U.K. Central and Northern North Sea
                      operations.
  ·
                  New
                      two-year
                      contract, plus three one-year options, by the Peak
                      Group.
  ·
                  Contract
                      renewals by PGS Production AS, Kerr-McGee and ConocoPhillips
                      Norway for
                      the provision of heavy helicopter transportation services in
                      the Norwegian
                      North Sea. These contracts have contract periods ranging from
                      one to five
                      years. Including option periods, the total potential contract
                      periods
                      range from three to five years. Combined annual revenue from
                      these
                      contracts is expected to be approximately $32.0 million.
                      We were also
                      awarded an expanded Search and Rescue contract by the Irish
                      Coast guard
                      with a value of approximately $6.5 million per
                      annum.
  The
            following
            contracts were not renewed:
  ·
                  In
                      March 2005
                      a contract with Talisman Energy (U.K.) Limited in the North
                      Sea expired
                      and was not renewed by the customer. This contract generated
                      revenue of
                      approximately $22.0 million per
                      year.
  ·
                  Subsequent
                      to
                      the year end, ConocoPhillips Norway extended an existing crew-change
                      contract to September 1, 2006, but announced it will not renew
                      the
                      contract beyond this date. Bp/Talisman extended a related crew-change
                      contract to December 31, 2005, but announced it will not renew
                      the
                      contract beyond this date. These two contracts are currently
                      valued at a
                      total of $46.0 million per annum.
  **International
            Flying Segment**
  The
            International
            flying segment consists of operations in Australia, Africa, Asia and
            offshore
            work in eastern Canada and in other locations around the world, serving
            offshore
            oil and gas, EMS/SAR and other industries.
 
 47
  Revenue
                      by
                      Industry - International
                  Revenue
                      by
                      Location - International
  
  Revenue
            for fiscal 2005
            was $233.5 million, an increase of $41.7 million from revenue
            of
            $191.8 million in fiscal 2004. The increase included revenue growth
            of
            $48.0 million, partially offset by an unfavourable foreign exchange
            impact
            of $6.2 million. The $48.0 million revenue increase was
            driven by
            increased flying activity, primarily for oil and gas customers from new
            contract
            awards and increased flying activity on existing contracts. Total flying
            hours
            increased from 47,265 in fiscal 2004 to 51,132 in fiscal 2005, representing
            growth of 3,867 hours or 8.2%. Increased flying hours were derived
            from
            increased flying from new and expanded contracts in Malaysia, India,
            Venezuela
            and other countries. Revenue also increased due to new dry lease contracts
            in
            Brazil and Venezuela.
  Segment
            EBITDA for
            fiscal 2005 was $46.0 million, up by $17.7 million from
            segment EBITDA
            of $28.3 million in fiscal 2004. This increase included an unfavourable
            foreign exchange impact of $3.5 million. The segment EBITDA improvement
            of
            $21.2 million was primarily related to (i) increased revenue
            from new
            contracts and renewed contracts at higher margins, and the (ii) addition
            of
            high margin dry lease contracts in Brazil and Venezuela in the current
            year.
  The
            segment EBITDA
            margin for the International flying segment rose from 14.7% in fiscal
            2004 to
            19.7% in fiscal 2005. Absent the impact of foreign exchange, the margin
            in
            fiscal 2005 was 21.2%. The increase from 14.7% last year to 21.2% this
            year was
            due primarily to the items noted above.
  Operating
            income
            for fiscal 2005 was $38.6 million, up $14.7 million from
            operating
            income of $23.9 million in fiscal 2004. This increase was due
            primarily to
            improved segment EBITDA.
  At
            April 30,
            2005, there were 105 aircraft in this segment, consisting of 23 heavy,
            70 medium
            and 8 light helicopters and 4 fixed-wing aircraft. This is an increase
            of 8
            aircraft since the start of the fiscal year is related to increased activity
            in
            the International flying segment in fiscal 2005. The fleet deployed in
            this
            segment consists primarily of medium aircraft such as the Sikorsky S76,
            but also
            includes a number of heavy aircraft, including the Eurocopter Super Puma
            and the
            Sikorsky S61N.
  At
            April 30,
            2005, there were 796 employees in the segment (April 30, 2004
            - 807),
            including 264 pilots, 223 engineers and 309 administrative and support
            personnel.
  Approximately
            78.3%
            of revenues in the segment were derived from long-term contracts. The
            major
            customers in this segment included Exxon Mobil, Unocal, Chevron, bp,
            Shell,
            TotalFinaElf, Premier, Phillips, Soekor, Sonair, DeBeers, the Royal Australian
            Air Force, Victoria Police, the United Nations, Talisman, Newfield, Petrobras,
            Encana and United Helicharters.
  During
            fiscal 2005
            we were awarded a new contract in West Africa for the provision of one
            Super
            Puma MkII aircraft for an initial period of 18 months commencing
            June 2004.
            Anticipated revenue over the term of the contract is approximately
            $11.0 million.
  48
 
 **Schreiner
            Segment**
  Schreiner
            is the
            largest helicopter operator in the Dutch sector of the North Sea, operating
            in
            the Netherlands, providing support to the oil and gas industry and emergency
            medical services. Schreiner also supports oil and gas operations in
            Africa in addition to operating an aircraft parts business. We
            acquired
            Schreiner on February 16, 2004. Therefore the results of Schreiner
            are
            included in our statement of earnings and financial position subsequent
            to that
            date.
  During
            fiscal 2005,
            we disposed of two non-core Schreiner businesses: Schreiner Canada and
            SAMCO.
            The results of Schreiner Canada and SAMCO are not included in the Schreiner
            business segment but are included in discontinued operations.
  Revenue
                      by
                      Industry - Schreiner
                  Revenue
                      by
                      Location - Schreiner
  
 Revenue
            for fiscal
            2005 was $154.6 million while segment EBITDA earned for fiscal
            2005 was
            $35.1 million. The $154.6 million in revenue was comprised
            of
            (i) $106.7 million in flying revenue, of which $75.3 million
            related to oil and gas and other customers, (ii) $47.1 million
            of
            repair and overhaul revenue, and (iii) $0.8 million in
            other
            revenue.
  Schreiner’s
            segment
            EBITDA margin increased from 10.2% in fiscal 2004 to 22.7% in fiscal
            2005. This
            increase was the result of improved operating margins from reduced support
            costs
            and other operational efficiencies implemented since Schreiner was
            acquired.
  Operating
            income
            for fiscal 2005 was $24.5 million, which included restructuring
            costs of
            $5.6 million, largely consisting of severance, termination, consulting
            and
            other costs relating to the restructuring project currently in
            progress.
  At
            April 30,
            2005 there were 501 employees in the segment (2004 - 699) including 148
            pilots,
            105 engineers and 248 administrative and support personnel. The decline
            is due
            to the sale of SAMCO and Schreiner Canada as well as the current restructuring
            initiative.
  During
            and
            subsequent to fiscal 2005 we were awarded the following new contracts
            and
            contract renewals:
  ·
                  New
                      two-year
                      contract (plus one option year) valued at approximately $6.5 million
                      per annum by GNPOC for the provision of aircraft in Northeast
                      Africa.
  ·
                  Five
                      year
                      contract renewal for the provision of offshore transportation
                      services to
                      oil and gas fields in the Dutch sector of the North Sea
                      to a
                      consortium of Total E&P Nederland, Wintershall Noordzee and
                      Petro-Canada Netherlands. This contract is valued at approximately
                      $25.0 million per annum and has two one-year renewal
                      options.
  49
 
 **Repair
            and** **Overhaul
            Segment**
  The
            Repair and
            overhaul segment, which will become an important component of Heli-One
            in the
            new fiscal year, includes helicopter repair and overhaul facilities in
            Norway,
            Canada, Australia and the U.K., providing helicopter repair and overhaul
            services for our fleet and for an external customer base in Europe, Asia
            and
            North America and includes the survival suit and safety equipment production
            business.
  During
            the year,
            our Repair and overhaul segment acquired three new businesses to complement
            its
            existing helicopter support services. The August 2004 acquisition of
            Multifabs,
            an Aberdeen-based company specializing in the production of cold water
            survival
            suits for military forces, emergency services and offshore transportation
            companies around the world enhances our ability to deliver the most
            comprehensive, cost-effective offshore services package to its customers
            in the
            oil and gas and emergency search and rescue sectors. Multifabs complements
            the
            existing third-party marine, military and aviation safety business of
            this
            segment. In the current year we also acquired a majority position in
            ATSL, an
            independent aircraft engine repair and overhaul company servicing General
            Electric CT 58/T58 and Pratt and Whitney, PT6T turboshaft engines, and
            the
            assets and capabilities of Coulson, a British Columbia, Canada based
            helicopter
            component and turbine maintenance repair and overhaul provider. ATSL
            and Coulson
            are important elements of our strategic expansion of our global repair
            and
            overhaul capabilities.
  External
                      Revenue by Customer -
                    Repair
                      and
                      overhaul
                  External
                      Revenue by Type -
                    Repair
                      and
                      overhaul
  
 Third
            party repair
            and overhaul revenue for fiscal 2005 was $77.3 million, of which
            approximately 31.6% was derived from long-term contracts, compared to
            $58.1 million in fiscal 2004. This $19.2 million increase
            in third
            party revenue was due to growth in the business and revenue from newly
            acquired
            businesses partially offset by an unfavourable foreign exchange impact
            of
            $0.1 million. Other offsetting variances included (i) a
            decrease in
            revenue from base maintenance of $5.4 million, (ii) a
            $2.3 million increase in revenue from “power-by-the-hour” (“PBTH”)
            customers, and (iii) an increase in major component overhaul revenue
            of
            $2.7 million.
  Segment
            EBITDA for
            the repair and overhaul segment for fiscal 2005 was $41.8 million,
            up
            $0.6 million from segment EBITDA of $41.2 million in fiscal
            2004. This
            was the combined result of (i) increased revenue as noted above;
            (ii) reduced overhaul costs resulting from insourcing services
            previously
            provided by third parties; offset by (iii) increased parts costs
            as
            low-cost inventory acquired on the acquisition of Helicopter Service
            Group is
            now largely depleted; (iv) increased repair and subcontract costs
            for parts
            used to support the power-by-the-hour fleet; (v) the decision
            not to
            increase prices to internal customers in the current fiscal year; and
            (vi) an unfavourable foreign exchange impact of
            $0.9 million.
  The
            foregoing are
            also the cause of the decrease in Heli-One’s segment EBITDA margin from 21.3%
            last year to 18.7% this year. Excluding the impact of foreign exchange,
            Heli-One’s fiscal 2005 segment EBITDA margin was 19.2%.
  Operating
            income
            for fiscal 2005 was $33.9 million, down $5.8 million from
            operating
            income of $39.7 million in fiscal 2004. This decrease was due
            primarily to
            a $3.9 million increase in amortization relating to assets employed
            in the
            newly acquired businesses and an increase of $2.5 million in restructuring
            costs from those incurred in fiscal 2004. Restructuring costs largely
            consisted
            of severance, termination, consulting and other costs relating to the
            restructuring project currently in progress.
  50
 
 At
            April 30,
            2005 there were 684 employees in the segment (2004 - 448), including
            280
            engineers and 404 support and administrative personnel. The increase
            in
            employees relates to the acquisition of Multifabs, ATSL and the start-up
            of the
            Heli-One business, offset by reductions relating to the restructuring
            initiatives.
  **Corporate
            and Other Segment**
  Corporate
            segment
            EBITDA (including Inter-segment eliminations) of $(21.6) million
            in fiscal
            2005 decreased $2.1 million from the same period last year. The
            primary
            reasons for the decrease were higher general and administration costs
            of
            $7.2 million due primarily to increases in variable compensation
            costs and
            the build-up of the Financial Services Department in Vancouver, Canada
            in
            anticipation of delivering services to our operating divisions in the
            new fiscal
            year. These increases were substantially offset by variances in inter-segment
            eliminations.
  **YEAR
            ENDED
            APRIL 30, 2004 COMPARED TO YEAR ENDED APRIL 30,
            2003**
  **Revenue**
  Total
            revenue for
            fiscal 2004 was $720.0 million, an increase of $8.1 million
            or 1.1%
            from revenue of $711.9 million for fiscal 2003. The following
            are the
            primary reasons for the change in revenue.
  (i)
                  Unfavourable
                      foreign exchange of $39.9 million. Of this, $20.7 million
                      related to the translation into Canadian dollars of the financial
                      results
                      of our foreign subsidiaries as a result of the weakening of
                      the Norwegian
                      kroner and pound sterling, partially offset by the strengthening
                      of the
                      Australian dollar and South African rand. The remaining $19.2 million
                      relates to the translation of U.S. dollar and euro denominated
                      transactions into the functional currencies of our applicable
                      operating
                      divisions due to the weakening of the U.S. dollar partially
                      offset by the
                      strengthening of the euro.
 
 (ii)
                  Revenue
                      earned by Schreiner of $32.4 million since its acquisition
                      on
                      February 16, 2004.
 
 (iii)
                  An
                      increase,
                      excluding the impact of foreign exchange, in revenue in our
                      International
                      flying segment of $21.3 million due to additional contracts
                      and to
                      higher flying activity on existing contracts.
 
 (iv)
                  A
                      decrease,
                      excluding the impact of foreign exchange, in revenue in our
                      European
                      flying segment of $5.9 million. This decrease was due
                      primarily to a
                      decline in flying hours that was attributable to a pilots’ work slowdown
                      during our first quarter ended July 31, 2003, a decline
                      in training
                      revenue, and a decrease in ancillary revenue from one-time
                      customers.
 
 By
            industry sector,
            the distribution of the year-over-year change in revenue is set forth
            in the
            table below:
  Revenue
            Summary by
            Industry Sector
  Fiscal
                      Year
                      Ended April 30
                  
                  Change
                      Attributable to2004
                  
                  2003
                  
                  Change
                  
                  2004
                  
                  2003
                  
                  Change
                  
                  Schreiner
                      Acquisition
                  
                  Other
                      Factors*(i)*Industry
                      Sector
                  
                  (percentage
                      of total revenue)
                  
                  (in millions
                      of CDN dollars)
                  
                  (in millions
                      of CDN dollars)Oil
                      and Gas
                      Production
                  
                  
                  61.1
                  %
                  
                  59.1
                  %
                  
                  2.0
                  %
                  $
                  439.9
                  
                  $
                  420.7
                  
                  $
                  19.2
                  
                  $
                  13.7
                  
                  $
                  5.5Oil
                      and Gas
                      Exploration
                  
                  
                  12.3
                  %
                  
                  14.4
                  %
                  
                  (2.1
                  )%
                  
                  88.6
                  
                  
                  102.6
                  
                  
                  (14.0
                  )
                  
                  0.4
                  
                  
                  (14.4
                  )Repair
                      and
                      Overhaul
                  
                  
                  9.3
                  %
                  
                  8.9
                  %
                  
                  0.4
                  %
                  
                  67.1
                  
                  
                  63.0
                  
                  
                  4.1
                  
                  
                  8.8
                  
                  
                  (4.7
                  )EMS/SAR
                  
                  
                  8.6
                  %
                  
                  8.0
                  %
                  
                  0.6
                  %
                  
                  62.0
                  
                  
                  57.0
                  
                  
                  5.0
                  
                  
                  0.5
                  
                  
                  4.5Other
                  
                  
                  5.9
                  %
                  
                  6.8
                  %
                  
                  (0.9
                  )%
                  
                  42.8
                  
                  
                  48.4
                  
                  
                  (5.6
                  )
                  
                  5.2
                  
                  
                  (10.8
                  )Passenger
                      Transportation
                  
                  
                  1.8
                  %
                  
                  1.0
                  %
                  
                  0.8
                  %
                  
                  12.6
                  
                  
                  7.1
                  
                  
                  5.5
                  
                  
                  3.8
                  
                  
                  1.7Training
                  
                  
                  1.0
                  %
                  
                  1.8
                  %
                  
                  (0.8
                  )%
                  
                  7.0
                  
                  
                  13.1
                  
                  
                  (6.1
                  )
                  
                  -
                  
                  
                  (6.1
                  )Total
                  
                  
                  100.0
                  %
                  
                  100.0
                  %
                  
                  0.0
                  %
                  $
                  720.0
                  
                  $
                  711.9
                  
                  $
                  8.1
                  
                  $
                  32.4
                  
                  $
                  (24.3
                  )
  51
  (i)
                  The
                      $5.5 million increase in revenue in the oil and gas
                      production sector
                      and the $4.5 million increase in the EMS/SAR sector
                      were due
                      primarily to the growth in our International flying segment
                      offset
                      partially by unfavourable foreign exchange. The $14.4 million
                      decrease in oil and gas exploration revenue was due largely
                      to
                      unfavourable foreign exchange. The entire $4.7 million
                      decline in
                      repair and overhaul revenue was due to unfavourable foreign
                      exchange. The
                      $10.8 million decrease in other revenue reflects, in
                      addition to
                      unfavourable foreign exchange, the fact that other revenue
                      in fiscal 2003
                      was abnormally high (up $14.8 million over fiscal 2002)
                      due mainly to
                      a one-time revenue stream earned in connection with modifications
                      made to
                      aircraft as part of a new search and rescue contract. The
                      $6.1 million decrease in training revenue reflects a
                      $5.0 million reduction in our European flying segment
                      due to reduced
                      and delayed training activity and unfavourable foreign
                      exchange.
 
 The
            table below
            provides a summary of segment revenue by quarter for fiscal 2004 and
            2003:
  Revenue
            Summary by
            Quarter
 (in millions
            of Canadian dollars)
  Period
                  
                  
                  
                  European
                      flying
                  
                  International
                      flying
                  
                  Schreiner
                  
                  Total
                      Flying
                      Segments
                  
                  Repair
                      andoverhaul
                  
                  TotalFiscal
                      2004
                  
                  
                  Q1
                  
                  $
                  112.1
                  
                  $
                  43.6
                  
                  $
                  -
                  
                  $
                  155.7
                  
                  $
                  13.3
                  
                  $
                  169.0Q2
                  
                  
                  111.5
                  
                  
                  46.7
                  
                  
                  -
                  
                  
                  158.2
                  
                  
                  14.4
                  
                  
                  172.6Q3
                  
                  
                  104.7
                  
                  
                  49.0
                  
                  
                  -
                  
                  
                  153.7
                  
                  
                  15.3
                  
                  
                  169.0Q4
                  
                  
                  109.4
                  
                  
                  52.5
                  
                  
                  32.4
                  
                  
                  194.3
                  
                  
                  15.1
                  
                  
                  209.4$
                  437.7
                  
                  $
                  191.8
                  
                  $
                  32.4
                  
                  $
                  661.9
                  
                  $
                  58.1
                  
                  $
                  720.0
  Fiscal
                          2003
                      
                      
                      Q1
                      
                      $
                      117.0
                      
                      $
                      45.8
                      
                      $
                      -
                      
                      $
                      162.8
                      
                      $
                      10.9
                      
                      $
                      173.7Q2
                      
                      
                      124.4
                      
                      
                      44.5
                      
                      
                      -
                      
                      
                      168.9
                      
                      
                      19.6
                      
                      
                      188.5Q3
                      
                      
                      115.2
                      
                      
                      46.4
                      
                      
                      -
                      
                      
                      161.6
                      
                      
                      15.9
                      
                      
                      177.5Q4
                      
                      
                      107.6
                      
                      
                      48.0
                      
                      
                      -
                      
                      
                      155.6
                      
                      
                      16.6
                      
                      
                      172.2$
                      464.2
                      
                      $
                      184.7
                      
                      $
                      -
                      
                      $
                      648.9
                      
                      $
                      63.0
                      
                      $
                      711.9
  We
            derive our
            flying revenue from two types of contracts. Approximately 56% of our
            fiscal 2004
            flying revenue (fiscal 2003 - 60%) was derived from hourly charges (including
            hourly charges on contracts that also have fixed charges), and the remaining
            portion was generated by fixed monthly charges. Because of the significant
            fixed
            charge component in our flying revenue mix, an increase or decrease in
            flying
            hours may not result in a proportionate change in revenue. While flying
            hours
            may not correlate directly with revenues, they remain a good measure
            of the
            level of activity and fleet utilization. The following two tables provide,
            respectively, a quarterly summary of our flying hours and a summary of
            our
            flying revenue hourly vs. fixed mix for fiscal 2004 and 2003, in each
            case by
            segment.
  Flying
            Hours
  Flying
                      Hours
                  
                  Number
                      of
                      Aircraft at Period EndPeriod
                  
                  
                  
                  European
                      flying
                  
                  Inter-national
                      flying
                  
                  Schreiner
                  
                  Total
                  
                  European
                      flying
                  
                  Inter-national
                      flying
                  
                  Schreiner
                  
                  TotalFiscal
                      2004
                  
                  
                  Q1
                  
                  
                  22,351
                  
                  
                  11,057
                  
                  
                  -
                  
                  
                  33,408
                  
                  
                  72
                  
                  
                  90
                  
                  
                  -
                  
                  
                  162Q2
                  
                  
                  21,951
                  
                  
                  11,926
                  
                  
                  -
                  
                  
                  33,877
                  
                  
                  70
                  
                  
                  94
                  
                  
                  -
                  
                  
                  164Q3
                  
                  
                  19,806
                  
                  
                  12,066
                  
                  
                  -
                  
                  
                  31,872
                  
                  
                  72
                  
                  
                  95
                  
                  
                  -
                  
                  
                  167Q4
                  
                  
                  19,939
                  
                  
                  12,216
                  
                  
                  5,701
                  
                  
                  37,856
                  
                  
                  71
                  
                  
                  97
                  
                  
                  38
                  
                  
                  20684,047
                  
                  
                  47,265
                  
                  
                  5,701
                  
                  
                  137,013Fiscal
                      2003
                  
                  
                  Q1
                  
                  
                  23,257
                  
                  
                  11,165
                  
                  
                  -
                  
                  
                  34,422
                  
                  
                  72
                  
                  
                  87
                  
                  
                  -
                  
                  
                  159Q2
                  
                  
                  22,994
                  
                  
                  10,618
                  
                  
                  -
                  
                  
                  33,612
                  
                  
                  73
                  
                  
                  87
                  
                  
                  -
                  
                  
                  160Q3
                  
                  
                  20,316
                  
                  
                  11,189
                  
                  
                  -
                  
                  
                  31,505
                  
                  
                  73
                  
                  
                  90
                  
                  
                  -
                  
                  
                  163Q4
                  
                  
                  19,430
                  
                  
                  11,067
                  
                  
                  -
                  
                  
                  30,497
                  
                  
                  71
                  
                  
                  88
                  
                  
                  -
                  
                  
                  15985,997
                  
                  
                  44,039
                  
                  
                  -
                  
                  
                  130,036
  52
 
 Flying
            Revenue Mix
            - Hourly vs. Fixed
 (in millions
            of Canadian dollars)
  Hourly
                  
                  Fixed
                  
                  TotalSegment
                  
                  Fiscal
                      2004
                  
                  Fiscal
                      2003
                  
                  Fiscal
                      2004
                  
                  Fiscal
                      2003
                  
                  Fiscal
                      2004
                  
                  Fiscal
                      2003European
                      flying
                  
                  $
                  272.5
                  
                  $
                  303.4
                  
                  $
                  138.3
                  
                  $
                  122.1
                  
                  $
                  410.8
                  
                  $
                  425.5International
                      flying
                  
                  
                  61.2
                  
                  
                  57.5
                  
                  
                  119.0
                  
                  
                  119.6
                  
                  
                  180.2
                  
                  
                  177.1Schreiner
                  
                  
                  7.6
                  
                  
                  -
                  
                  
                  9.2
                  
                  
                  -
                  
                  
                  16.8
                  
                  
                  -$
                  341.3
                  
                  $
                  360.9
                  
                  $
                  266.5
                  
                  $
                  241.7
                  
                  $
                  607.8
                  
                  $
                  602.6
  We
            utilize
            primarily heavy aircraft in our European operations and medium aircraft
            in our
            International flying segment and in Schreiner. As illustrated in the
            following
            table, the overall mix of revenue by aircraft type remained relatively
            consistent from fiscal 2003 to fiscal 2004, except for fixed-wing revenue
            which
            has increased due to the acquisition of Schreiner.
  Flying
            Revenue Mix
            - Aircraft Type
 (in millions
            of Canadian dollars)
  Fiscal
                      2004
                  
                  Fiscal
                      2003Segment
                  
                  Heavy
                  
                  Medium
                  
                  Light
                  
                  Fixed
                    Wing
                  
                  Total
                  
                  Heavy
                  
                  Medium
                  
                  Light
                  
                  Fixed
                    Wing
                  
                  TotalEuropean
                      flying
                  
                  $
                  330.6
                  
                  $
                  80.2
                  
                  $
                  -
                  
                  $
                  -
                  
                  $
                  410.8
                  
                  $
                  335.9
                  
                  $
                  89.6
                  
                  $
                  -
                  
                  $
                  -
                  
                  $
                  425.5International
                      flying
                  
                  
                  50.9
                  
                  
                  119.2
                  
                  
                  4.4
                  
                  
                  5.7
                  
                  
                  180.2
                  
                  
                  50.7
                  
                  
                  118.3
                  
                  
                  4.4
                  
                  
                  3.7
                  
                  
                  177.1Schreiner
                  
                  
                  1.9
                  
                  
                  9.0
                  
                  
                  0.5
                  
                  
                  5.4
                  
                  
                  16.8
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -TotalFlying
                      Revenue
                  
                  $
                  383.4
                  
                  $
                  208.4
                  
                  $
                  4.9
                  
                  $
                  11.1
                  
                  $
                  607.8
                  
                  $
                  386.6
                  
                  $
                  207.9
                  
                  $
                  4.4
                  
                  $
                  3.7
                  
                  $
                  602.6Total
                      %
                  
                  
                  63.1
                  %
                  
                  34.3
                  %
                  
                  0.8
                  %
                  
                  1.8
                  %
                  
                  100.0
                  %
                  
                  64.2
                  %
                  
                  34.5
                  %
                  
                  0.7
                  %
                  
                  0.6
                  %
                  
                  100.0
                  %
  We
            regularly
            compare our activity levels against available industry data. Aberdeen
            Airport
            Ltd. reports monthly helicopter passenger traffic for all helicopter
            operations
            in Aberdeen, Scotland, which is our largest base (accounting for approximately
            31% of total activity in the European flying segment) as measured by
            the number
            of aircraft and revenue. The following table provides a quarterly summary
            of all
            helicopter passenger traffic at Aberdeen Airport for fiscal 2004 and
            2003.
  Aberdeen
            Airport -
            Helicopter Passengers
  Fiscal
                      2004
                  
                  Fiscal
                      2003
                  
                  %
                      Change
                    (2004
                      vs
                      2003)Q1
                  
                  
                  101,757
                  
                  
                  116,102
                  
                  
                  (12.4
                  )%Q2
                  
                  
                  95,227
                  
                  
                  112,449
                  
                  
                  (15.3
                  )%Q3
                  
                  
                  87,588
                  
                  
                  92,918
                  
                  
                  (5.7
                  )%Q4
                  
                  
                  89,975
                  
                  
                  92,686
                  
                  
                  (2.9
                  )%Total
                  
                  
                  374,547
                  
                  
                  414,155
                  
                  
                  (9.6
                  )%
 Source:
            Aberdeen
            Airport Ltd.
  53
 
 The
            data in the
            above table shows a year-over-year decrease in activity in Aberdeen.
            While
            activity levels in Aberdeen declined 9.6% in fiscal 2004 versus fiscal
            2003, our
            flying hours in Europe overall declined by only 2.3% over the same period.
            This
            decline includes that attributable to a pilots’ work slowdown in the first
            quarter of fiscal 2004 in addition to that attributable to a decline
            in North
            Sea oil and gas activity. Furthermore, although flying revenue from the
            European
            flying segment fell by $14.7 million over these periods, from
            $425.5 million in fiscal 2003 to $410.8 million in fiscal
            2004, this
            decline was due entirely to foreign exchange. In fact, European flying
            revenue
            (excluding the impact of foreign exchange) grew by $1.2 million
            year-over-year, as follows:
  (in
                      millions
                      of Canadian dollars)Flying
                      revenue, fiscal 2003
                  
                  $
                  425.5Revenue
                      growthTotal
                  
                  $
                  4.0Revenue
                      lost
                      due to pilots work slowdown in Q1
                  
                  
                  (2.8
                  )Net
                      growth
                  
                  
                  1.2Unfavourable
                      foreign exchange
                  
                  
                  (15.9
                  )Flying
                      revenue, fiscal 2004
                  
                  $
                  410.8
  These
            results
            reflect the fact that 33.7% of our fiscal 2004 European flying revenue
            was
            derived from fixed charges (that are unaffected by flying activity) compared
            to
            28.7% in fiscal 2003.
  **Direct
            Costs**
  Direct
            costs for
            fiscal 2004 increased by $30.0 million, to $576.0 million,
            from
            $546.0 million for fiscal 2003. This $30.0 million increase
            was driven
            partially by (i) the acquisition of Schreiner which had direct
            costs of
            $29.2 million since acquisition; and (ii) increased pension
            expense of
            $8.8 million in our European flying segment, offset partially
            by
            (iii) favourable foreign exchange of $23.0 million. The
            remaining
            increase in direct costs reflects an increase in variable costs incurred
            in
            relation to revenue growth, primarily in our International flying
            segment.
  The
            increased
            pension expense was due to an increase in amortization of net actuarial
            and
            experience losses and to assumption changes stemming from the most recent
            actuarial review of our pension plans. The favourable foreign exchange
            was
            driven by (i) favourable foreign exchange related to the translation
            into
            Canadian dollars of the financial results of our foreign self-sustaining
            operations as a result of the weakening of the Norwegian kroner and pound
            sterling, offset partially by the strengthening of the Australian dollar
            and
            South African rand; and (ii) favourable foreign exchange related
            to the
            translation of U.S. dollar and euro denominated transactions into the
            functional
            currencies of our applicable foreign operating divisions due to a weakening
            of
            the U.S. dollar partially offset by the strengthening of the euro.
  **General
            and
            Administration Costs**
  General
            and
            administration costs for fiscal 2004 decreased by $2.8 million, to $18.6
            million, from $21.4 million for fiscal 2003. This decrease was due to
            lower
            variable compensation costs and reduced expenses under our stock appreciation
            rights plan.
  **Amortization**
  Amortization
            expense increased $4.7 million, from $20.5 million in fiscal
            2003 to
            $25.2 million in fiscal 2004. Of this increase, $1.1 million
            was
            attributable to the acquisition of Schreiner. The remainder was due largely
            to
            capital additions relating to aircraft additions in fiscal 2004.
  Although
            we
            completed six sale-leaseback transactions and seven LOLI transactions
            in fiscal
            2004, all but one of these occurred either late in the third quarter
            or during
            the fourth quarter. Accordingly, these transactions did not have a significant
            impact on amortization expense for fiscal 2004.
  54
 
 **Restructuring
            Costs**
  During
            fiscal 2004
            we incurred restructuring costs of $9.2 million (after tax,
            $6.4 million) in connection with the consolidation of our European
            operations and other related activities. Restructuring costs were composed
            of
            termination benefits, professional fees, travel costs and other incremental
            costs directly associated with the restructuring activities.
  **Gain
            on
            Disposal of Assets**
  During
            fiscal 2004
            we disposed of property and equipment and received net proceeds of
            $126.9 million, resulting in a net recognized gain of $3.3 million
            and
            a deferred gain of $30.2 million. The latter related primarily
            to the six
            sale-leaseback and seven LOLI transactions during the year. The net recognized
            gain of $3.3 million was composed primarily of gains on the disposal
            of
            five aircraft during the year.
  **Operating
            Income**
  Operating
            income
            decreased by $32.1 million from $126.4 million in fiscal
            2003 to
            $94.3 million in fiscal 2004. This decrease was primarily due
            to
            (i) unfavourable foreign exchange of $16.9 million;
            (ii) increased pension expense of $8.8 million in our European
            flying
            segment; and (iii) restructuring costs of $9.2 million
            incurred in our
            European flying segment.
  **Debt
            Settlement Costs**
  During
            fiscal 2004
            we incurred $19.7 million (after tax, $12.6 million) of
            debt
            settlement costs in connection with the retirement, in April 2004, of
            (i) € 87.3 million
            ($140.6 million) (60% of the original principal amount) of our
            113⁄4% senior
            subordinated notes, (ii) £32.7 million ($78.7 million) and € 25 million
            ($40.3 million) of our senior credit facilities and
            (iii) NOK 123.5 million ($24.3 million) of
            our 7% term loan.
            During fiscal 2003 we incurred $12.5 million (after tax, $7.9 million)
            of debt settlement costs in connection with the retirement, in May 2002,
            of € 50.8 million
            ($71.6 million including foreign exchange) (35% of the original
            principal
            amount) of our 113⁄4% senior subordinated notes. Debt settlement costs in fiscal
            2004 and 2003 were composed of make-whole premiums, professional fees,
            foreign
            exchange, write-off of deferred financing costs and other incremental
            costs
            directly associated with the debt settlement activities.
  **Financing
            Charges**
  Financing
            charges
            consist primarily of (i) interest on debt; (ii) amortization
            of
            deferred financing costs; (iii) foreign exchange gains and losses
            on
            operating activities, working capital revaluation, debt repayment and
            debt
            revaluation; and (iv) realized foreign exchange gains and losses
            on forward
            foreign currency contracts that have not been designated as hedging instruments.
            Financing charges for the fiscal year ended April 30, 2004 totalled
            $29.0 million versus $34.5 million in fiscal 2003. The
            $5.5 million reduction in financing charges this year was driven
            primarily
            by $9.8 million of realized foreign exchange gains on forward
            foreign
            currency contracts offset by a $2.2 million increase in foreign
            exchange
            losses on operating activities and working capital revaluation and a
            net
            increase in other items of $2.1 million.
  (in millions
                      of Canadian dollars)
                  
                  **2004**
                  
                  2003Interest
                      on
                      debt obligations
                  
                  **$**
                  **30.6**
                  
                  $
                  30.8Amortization
                      of deferred financing costs
                  
                  
                  **3.6**
                  
                  
                  3.2Foreign
                      exchange loss from operating activities and working capital
                      revaluation
                  
                  
                  **5.5**
                  
                  
                  3.3Foreign
                      exchange gain on debt repayment
                  
                  
                  **(1.8**
                  **)**
                  
                  (1.3
                  )Foreign
                      exchange gain on revaluation of long-term debt
                  
                  
                  **-**
                  
                  
                  (0.7
                  )Foreign
                      exchange gain on foreign currency contracts
                  
                  
                  **(9.8**
                  **)**
                  
                  -Interest
                      revenue
                  
                  
                  **(1.1**
                  **)**
                  
                  (4.4
                  )Other
                      interest and banking expenses
                  
                  
                  **2.0**
                  
                  
                  3.6Total
                  
                  **$**
                  **29.0**
                  
                  $
                  34.5
  55
 
 The
            average rate on
            our variable-rate senior credit facilities during fiscal 2004 was 4.4%
            compared
            to 5.3% in fiscal 2003. This decline was due mainly to the fact that
            the euro
            LIBOR rate during fiscal 2004 was lower than the GBP LIBOR rate during
            fiscal
            2003 and most of our senior credit facility was converted during fiscal
            2004
            from a rate of GBP LIBOR plus a margin of 1.125% to a rate of euro LIBOR
            plus a
            margin of 1.125%. Despite this interest rate reduction, total interest
            on
            long-term debt increased slightly. This increase was due primarily to
            a higher
            debt load in the fourth quarter of fiscal 2004 driven by the borrowing
            of € 93.6 million
            ($154.7 million) under our senior credit facilities in February
            2004 in
            connection with the acquisition of Schreiner.
  **Equity
            in
            Earnings of Associated Companies**
  Equity
            in earnings
            of associated companies increased by $1.6 million, from $2.3 million
            in fiscal 2003 to $3.9 million in fiscal 2004. Of this increase,
            $1.2 million was due to the stronger performance of CHL, in which
            we held a
            42.75% interest. The remaining increase of $0.4 million reflects
            Schreiner’s post-acquisition proportionate share of the earnings of its equity
            accounted investees.
  **Income
            Taxes**
  We
            had an income
            tax recovery of $16.6 million in fiscal 2004 compared to an expense
            of
            $1.9 million in fiscal 2003. The higher recovery in fiscal 2004
            was due to
            (i) a lower tax provision due to lower earnings from continuing
            operations, and (ii) the recording of a higher future income tax
            recover
            than was recorded in fiscal 2003.
  During
            fiscal 2004,
            we recorded a $21.0 million future income tax recovery, a significant
            portion of which is attributable to the reversal of a previously recorded
            tax
            liability as a result of the disposition of certain of our European fleet.
            The
            remainder of the recovery relates to the reversal of a previously recorded
            tax
            liability which is no longer considered necessary as a result of the
            completion
            of tax authority audits in various jurisdictions.
  During
            fiscal 2003,
            we recorded a $14.0 million future income tax recovery related
            to our
            Australian operations due to a change in tax law. Australian tax legislation
            now
            provides wholly-owned corporate groups with the option of filing consolidated
            tax returns. Our Australian operations elected to do so. The $14.0 million
            benefit was the result of tax-effecting the increase in the tax bases
            of the
            assets of each of the subsidiaries in the consolidated Australian
            group.
  **Net
            Earnings from Continuing Operations**
  Net
            earnings from
            continuing operations for fiscal 2004 was $66.3 million ($1.47 per
            share, diluted), down $13.5 million from $79.8 million
            ($1.76 per
            share, diluted) in fiscal 2003. This decrease was previously the result
            of
            decreased operating income of $32.1 million and higher debt settlement
            costs of $7.3 million, offset by a $1.6 million increase
            in equity in
            earnings of associated companies, a $5.5 million decrease in financing
            charges and an $18.6 million decrease in the provision for income
            taxes.
            See *“* *Results
            of
            Operations* *-* *Income
            Taxes* *”* .
  **Net
            Loss
            from Discontinued Operations**
  Net
            loss from
            discontinued operations for fiscal 2004 was $2.6 million ($(0.06)
            per
            share, diluted), down $11.7 million from a loss of $14.3 million
            for
            fiscal 2003 ($(0.30) per share, diluted). This reduced loss was primarily
            the
            result of an evaluation of the fair value of the assets and liabilities
            of
            Composites, a business currently held for sale and reported as a discontinued
            operation.
  At
            April 30,
            2003, we evaluated the recoverability from cash flows of future operations
            of
            the carrying value of Composites’ pre-operating expenses, which had been
            previously deferred and recorded in other assets on our balance sheet.
            We
            determined it appropriate to write off the entire $12.8 million
            book value
            of such pre-operating expenses at April 30, 2003 as an asset impairment
            charge.
  56
 
 **Net
            Earnings**
  Net
            earnings
            declined by $1.8 million to $63.7 million ($1.41 per share,
            diluted;
            $1.54 per share, basic) in fiscal 2004, down from $65.5 million
            ($1.46 per
            share, diluted; $1.58 per share, basic) in fiscal 2003. This reflects
            a $13.5
            million decrease in net earnings from continuing operations offset
            by an $11.7 million decrease in the loss from discontinued
            operations.
  **Quarterly
            Information**
  The
            table below
            provides a summary of our revenue net earnings from continuing operations,
            net
            earnings, total assets, total long-term financial liabilities, cash dividends
            per share, net earnings per share from continuing operations and earnings
            per
            share for each quarter in fiscal 2004 and 2003.
  Fiscal
                  
                  Revenue
                  
                  Net
                      earnings
                      from continuing operations
                  
                  Net
                      earnings
                  
                  Total
                      assets
                  
                  Total
                      long-term financial liabilities
                  
                  Cash
                      dividends per share
                  
                  Net
                      earnings
                      per share from continuing operations
                  
                  Net
                      earnings
                      per share2004
                  
                  (in millions
                      of Canadian dollars)
                  
                  declared
                  
                  Basic
                  
                  Diluted
                  
                  Basic
                  
                  DilutedQ1
                  
                  $
                  169.0
                  
                  $
                  14.5
                  
                  $
                  13.8
                  
                  $
                  1,110.2
                  
                  $
                  567.0
                  
                  $
                  -
                  
                  $
                  0.36
                  
                  $
                  0.33
                  
                  $
                  0.33
                  
                  $
                  0.31Q2
                  
                  
                  172.6
                  
                  
                  16.0
                  
                  
                  15.5
                  
                  
                  1,114.4
                  
                  
                  555.9
                  
                  
                  -
                  
                  
                  0.38
                  
                  
                  0.35
                  
                  
                  0.37
                  
                  
                  0.34Q3
                  
                  
                  169.0
                  
                  
                  10.0
                  
                  
                  9.0
                  
                  
                  1,162.0
                  
                  
                  572.7
                  
                  
                  0.25
                  
                  
                  0.24
                  
                  
                  0.22
                  
                  
                  0.23
                  
                  
                  0.20Q4
                  
                  
                  209.4
                  
                  
                  25.8
                  
                  
                  25.4
                  
                  
                  1,534.9
                  
                  
                  814.3
                  
                  
                  -
                  
                  
                  0.62
                  
                  
                  0.57
                  
                  
                  0.61
                  
                  
                  0.56Total
                  
                  $
                  720.0
                  
                  $
                  66.3
                  
                  $
                  63.7
                  
                  
                  
                  
                  
                  
                  
                  $
                  0.25
                  
                  $
                  1.60
                  
                  $
                  1.47
                  
                  $
                  1.54
                  
                  $
                  1.41Fiscal
                    2003Q1
                  
                  $
                  173.8
                  
                  $
                  10.3
                  
                  $
                  8.8
                  
                  $
                  1,148.9
                  
                  $
                  615.6
                  
                  $
                  -
                  
                  $
                  0.25
                  
                  $
                  0.23
                  
                  $
                  0.22
                  
                  $
                  0.20Q2
                  
                  
                  188.4
                  
                  
                  20.6
                  
                  
                  18.5
                  
                  
                  1,180.6
                  
                  
                  613.8
                  
                  
                  0.10
                  
                  
                  0.50
                  
                  
                  0.45
                  
                  
                  0.45
                  
                  
                  0.41Q3
                  
                  
                  177.5
                  
                  
                  16.8
                  
                  
                  15.5
                  
                  
                  1,204.5
                  
                  
                  624.4
                  
                  
                  -
                  
                  
                  0.40
                  
                  
                  0.37
                  
                  
                  0.37
                  
                  
                  0.35Q4
                  
                  
                  172.2
                  
                  
                  32.1
                  
                  
                  22.7
                  
                  
                  1,157.6
                  
                  
                  570.2
                  
                  
                  -
                  
                  
                  0.77
                  
                  
                  0.71
                  
                  
                  0.54
                  
                  
                  0.50Total
                  
                  $
                  711.9
                  
                  $
                  79.8
                  
                  $
                  65.5
                  
                  
                  
                  
                  
                  
                  
                  $
                  0.10
                  
                  $
                  1.92
                  
                  $
                  1.76
                  
                  $
                  1.58
                  
                  $
                  1.46
  There
            is some
            impact of seasonality in the quarterly results in the foregoing table.
            The
            seasonal variations are due primarily to variations in the activity levels
            of
            our oil and gas industry customers’ exploration and development activities.
  Foreign
            exchange
            has had significant impact on quarterly revenue levels on a year-over-year
            basis. Quarterly revenues for fiscal 2004, in comparison to quarterly
            revenues
            for fiscal 2003, have been negatively impacted by foreign exchange in
            the
            following amounts: Q1-$5.8 million, Q2-$17.0 million,
            Q3-$13.9 million and Q4-$3.2 million, for a total unfavourable
            foreign
            exchange impact of $39.9 million.
  Quarterly
            revenue,
            net earnings from continuing operations and net earnings in the table
            above were
            impacted by the following items that affect their comparability:
  (i)
                  In
                      Q1 of
                      fiscal 2003, we incurred a net-of-tax cost of $7.9 million
                      ($12.5 million pre-tax) related to the settlement of
                      debt.
 
 (ii)
                  In
                      Q4 of
                      fiscal 2003, we recorded an income tax recovery of $14.0 million
                      related to a change in tax law in Australia. We also recorded
                      a net-of-tax
                      asset impairment charge of $9.9 million ($12.8 million
                      pre-tax)
                      related to Composites.
 
 (iii)
                  In
                      Q3 of
                      fiscal 2004, we incurred net-of-tax restructuring costs of
                      $4.2 million ($6.0 million pre-tax) related to
                      the restructuring
                      of our European operations.
 
 57
 
 (iv)
                  In
                      Q4 of
                      fiscal 2004, we recorded additional net-of-tax restructuring
                      costs of
                      $2.2 million ($3.2 million pre-tax) in connection
                      with our
                      European restructuring activities. Also recorded in this quarter
                      were
                      net-of-tax debt settlement costs of $12.6 million ($19.7 million
                      pre-tax) and a $21.0 million tax recovery. Additionally,
                      we acquired
                      Schreiner in this quarter. Schreiner generated revenue of
                      $32.4 million and net earnings from continuing operations
                      of
                      $2.0 million in Q4 of 2004.
 
 **REVIEW
            BY
            SEGMENT**
  **Segment
                      Revenue from External Customers - Variance
                      Analysis****(in
                      thousands of Canadian dollars)****Europe**
                  
                  **Int'l**
                  
                  **Schreiner***(ii)*
                  
                  **R&O**
                  
                  **Corporate
                      & other***(iii)*
                  
                  **Total**Year
                      ended
                      April 30, 2003
                  
                  $
                  464,114
                  
                  $
                  184,784
                  
                  $
                  -
                  
                  $
                  62,989
                  
                  $
                  -
                  
                  $
                  711,887Foreign
                      exchange impact
                  
                  
                  (20,604
                  )
                  
                  (14,338
                  )
                  
                  -
                  
                  
                  (4,970
                  )
                  
                  -
                  
                  
                  (39,912
                  )Revenue
                      increase (decrease)
                  
                  
                  (5,879
                  )
                  
                  21,327
                  
                  
                  32,490
                  
                  
                  100
                  
                  
                  -
                  
                  
                  48,038**Year
                      ended April 30, 2004**
                  
                  **$**
                  **437,631**
                  
                  **$**
                  **191,773**
                  
                  **$**
                  **32,490**
                  
                  **$**
                  **58,119**
                  
                  **$**
                  **-**
                  
                  **$**
                  **720,013***Total
                      revenue increase (decrease)*
                  
                  *$*
                  *(26,483*
                  *)*
                  *$*
                  *6,989*
                  
                  *$*
                  *32,490*
                  
                  *$*
                  *(4,870*
                  *)*
                  
                  *N/A*
                  
                  *$*
                  *8,126**%
                      increase (decrease)*
                  
                  
                  *(5.7*
                  *%)*
                  
                  *3.8*
                  *%*
                  
                  *N/A*
                  
                  
                  *(7.7*
                  *%)*
                  
                  *N/A*
                  
                  
                  *1.1*
                  *%**%
                      increase (decrease) excluding FX*
                  
                  
                  *(1.3*
                  *%)*
                  
                  *11.5*
                  *%*
                  
                  *N/A*
                  
                  
                  *0.2*
                  *%*
                  
                  *N/A*
                  
                  
                  *6.7*
                  *%*
 
 **Segment
                      EBITDA Variance Analysis****(in
                      thousands of Canadian dollars)****Europe**
                  
                  **Int'l**
                  
                  **Schreiner***(ii)*
                  
                  **R&O**
                  
                  **Corporate
                      & other***(iii)*
                  
                  **Total**Year
                      ended
                      April 30, 2003
                  
                  $
                  88,614
                  
                  $
                  39,867
                  
                  $
                  -
                  
                  $
                  37,390
                  
                  $
                  (21,411
                  )
                  $
                  144,460Foreign
                      exchange impact
                  
                  
                  (6,679
                  )
                  
                  (10,024
                  )
                  
                  -
                  
                  
                  (195
                  )
                  
                  -
                  
                  
                  (16,898
                  )Segment
                      EBITDA increase (decrease)
                  
                  
                  (9,831
                  )
                  
                  (1,558
                  )
                  
                  3,325
                  
                  
                  4,033
                  
                  
                  1,878
                  
                  
                  (2,153
                  )**Year
                      ended April 30, 2004**
                  
                  **$**
                  **72,104**
                  
                  **$**
                  **28,285**
                  
                  **$**
                  **3,325**
                  
                  **$**
                  **41,228**
                  
                  **$**
                  **(19,533**
                  **)**
                  **$**
                  **125,409***Segment
                      EBITDA margin**(i)**-
                      Last
                      year*
                  
                  
                  *19.1*
                  *%*
                  
                  *21.6*
                  *%*
                  
                  *N/A*
                  
                  
                  *18.3*
                  *%*
                  
                  *N/A*
                  
                  
                  *20.3*
                  *%**-
                      This
                      year*
                  
                  
                  *16.5*
                  *%*
                  
                  *14.7*
                  *%*
                  
                  *10.2*
                  *%*
                  
                  *21.3*
                  *%*
                  
                  *N/A*
                  
                  
                  *17.4*
                  *%**Total
                      Segment EBITDA increase (decrease)*
                  
                  *$*
                  *(16,510*
                  *)*
                  *$*
                  *(11,582*
                  *)*
                  *$*
                  *3,325*
                  
                  *$*
                  *3,838*
                  
                  *$*
                  *1,878*
                  
                  *$*
                  *(19,051*
                  *)**%
                      increase (decrease)*
                  
                  
                  *(18.6*
                  *%)*
                  
                  *(29.1*
                  *%)*
                  
                  *N/A*
                  
                  
                  *10.3*
                  *%*
                  
                  *(8.8*
                  *%)*
                  
                  *(13.2*
                  *%)**%
                      increase (decrease) excluding FX*
                  
                  
                  *(11.1*
                  *%)*
                  
                  *(3.9*
                  *%)*
                  
                  *N/A*
                  
                  
                  *10.8*
                  *%*
                  
                  *(8.8*
                  *%)*
                  
                  *(1.5*
                  *%)*
  (i)
                  Segment
                      EBITDA as a percent of revenue from external customers except
                      for the
                      R&O segment, which is a percent of total
                      revenue.
 (ii)
                  Results
                      for
                      Schreiner for the year ended April 30, 2004 are for
                      the period from
                      February 16, 2004 to April 30,
                      2004.
 (iii)
                  Corporate
                      and
                      other includes Inter-segment
                      eliminations.
 
 **European
            Flying Segment**
  The
            European flying
            segment consists primarily of operations in the U.K., Ireland, Norway
            and
            Denmark, mainly serving the helicopter transportation requirements of
            the
            offshore oil and gas industry in the North Sea.
  58
  
  Revenue
            for fiscal
            2004 was $437.6 million, a decrease of $26.5 million from
            revenue of
            $464.1 million earned in fiscal 2003. This $26.5 million
            decrease was
            attributable to (i) unfavourable foreign exchange of $20.6 million;
            (ii) a $5.0 million reduction in training revenue; and
            (iii) a
            $2.1 million reduction in other revenue, offset partially by a
            $1.2 million increase in flying revenue. The decline in training
            revenue
            reflects reduced and postponed activity, a portion of which was attributable
            to
            travel bans in connection with the outbreak of Severe Acute Respiratory
            Syndrome
            in fiscal 2004. The flying revenue increase of $1.2 million was
            composed of
            contract-driven growth of $4.0 million partially offset by a
            $2.8 million reduction attributable to a pilots’ work slowdown in the first
            quarter of fiscal 2004. The reduction in other revenue reflects the fact
            that
            this revenue stream was abnormally high in fiscal 2003 due to a one-time
            contract to perform aircraft modifications for an EMS/SAR customer.
  Segment
            EBITDA for
            fiscal 2004 was $72.1 million, down $16.5 million from
            segment EBITDA
            of $88.6 million in fiscal 2003. This decline was due primarily
            to
            (i) unfavourable foreign exchange of $6.7 million; (ii) increased
            pension expense of $8.8 million; and (iii) the above-noted
            revenue
            decline, partially offset by a $3.1 million reduction in other
            operating
            expenses due largely to savings generated from restructuring activities
            during
            fiscal 2004. The increased pension expense was due to an increase in
            amortization of net actuarial and experience losses and to assumption
            changes
            stemming from the most recent actuarial review of our pension
            plans.
  The
            segment EBITDA
            margin declined from 19.1% in fiscal 2003 to 16.5% in fiscal 2004. Absent
            the
            impact of foreign exchange, the Segment EBITDA margin in fiscal 2004
            was 17.2%.
            The primary factor causing the margin to decline was the above-noted
            $8.8 million increase in pension expense. Absent both the impact
            of foreign
            exchange and the increase in pension expense, the segment EBITDA margin
            in
            fiscal 2004 was 19.1%, consistent with fiscal 2003.
  Operating
            income
            for fiscal 2004 was $54.9 million, down $21.0 million from
            operating
            income of $75.9 million in fiscal 2003. This decrease was due
            primarily to
            (i) reduced segment EBITDA and (ii) restructuring costs
            incurred in
            2004 to implement a new management structure in our European operations
            to
            provide an increased focus on the critical areas of the business.
  At
            April 30,
            2004 there were 71 aircraft in this segment, consisting of 53 heavy and
            18
            medium aircraft. Among the heavy aircraft were 41 Super Pumas, including
            16
            Super Puma MkII’s.
  59
 
 At
            April 30,
            2004 there were 937 employees in the segment (April 30, 2003 -
            1,058
            employees), including 349 pilots, 239 engineers and 349 administrative
            and
            support personnel. The primary reason for the decrease in the number
            of
            employees was the restructuring of our European operations. Effective
            February 6, 2004, we have fully implemented a single management
            structure
            in our European flying segment. We believe that the new management structure
            provides an increased focus on the critical areas of the business, such
            as
            employee and customer relationships, and better positions us for growth
            in
            Europe. We incurred restructuring costs of $9.2 million related
            to these
            activities in fiscal 2004. These costs are excluded from the calculation
            of
            segment EBITDA for our European flying segment. Through improved information
            systems, group purchasing leverage, better fleet utilization and a reduction
            in
            personnel costs we believe we will realize annual segment EBITDA savings
            of
            $12.0 million. Actions to effect all of these anticipated segment
            EBITDA
            savings were completed in July 2004.
  In
            fiscal 2004,
            85.8% of revenue in this segment was derived primarily from long-term
            contracts.
            The major customers in this segment remained largely unchanged from fiscal
            2003
            and during fiscal 2004 included bp, Exxon Mobil, TotalFinaElf, Maersk,
            Statoil,
            Norsk Hydro, ConocoPhillips, Talisman, Kerr-McGee and the Irish Coast
            Guard.
  During
            fiscal 2004,
            our European flying segment was awarded North Sea contracts, all of which
            represent incremental business, from the following customers: Apache
            (three-year
            contract plus two one-year extension options; this contract was awarded
            in
            August 2003 and generated revenue of $5.2 million in fiscal 2004),
            Technip
            Offshore U.K. and Venture Production (two-year contract plus two one-year
            extension options; this contract was awarded in January 2004 and generated
            revenue of $2.2 million in fiscal 2004) and a consortium consisting
            of Eni
            U.K., BG Group and ConocoPhillips (three-year contract plus one two-year
            extension option; this contract was awarded in January 2004 and generated
            revenue of $2.6 million in fiscal 2004).
  We
            were successful
            in renewing all of our North Sea contracts that were up for renewal during
            fiscal 2004. In particular, we were awarded contract renewals by Statoil
            ASA and
            Norsk Hydro AS for the provision of heavy helicopter transportation services
            in
            the Norwegian North Sea. These contracts have start dates ranging from
            June 2004
            to January 2005, with initial contract periods ranging from three to
            11 years. Including option periods, the total potential contract
            periods
            range from five to 11 years. Combined annual revenue from these
            contracts
            is expected to be approximately $86 million.
  In
            July 2004 a
            contract with bp in the North Sea expired and was not renewed by the
            customer.
            This contract generated revenue of $34.5 million in fiscal
            2004.
  **International
            Flying Segment**
  The
            International
            flying segment consists of operations in Australia, Africa and Asia and
            offshore
            work in Eastern Canada and in other locations around the world, serving
            offshore
            oil and gas, EMS/SAR and other industries.
  
 60
 
 Revenue
            for fiscal
            2004 was $191.8 million, an increase of $7.0 million from
            revenue of
            $184.8 million in fiscal 2003. The increase was composed of revenue
            growth
            of $21.3 million offset by unfavourable foreign exchange of $14.3 million.
            The
            $21.3 million revenue increase was driven by increased flying hours,
            primarily
            attributable to oil and gas customers, due to both new contract awards
            and
            increased flying activity on existing contracts. Total flying hours increased
            from 44,039 in fiscal 2003 to 47,265 in fiscal 2004, representing growth
            of
            3,226 hours or 7.3%. This increase in flying hours was composed of
            (i) increased activity primarily attributable to oil and gas customers
            of
            4,566 hours of 12.9% offset by (ii) a reduction of EMS/SAR activity
            of
            1,340 hours or 15.5%. The reduced EMS/SAR flying hours had a minimal
            impact on
            revenue because the fixed-charge component of our EMS/SAR revenue stream
            accounts for approximately 75% of that revenue stream. The unfavourable
            foreign
            exchange impact of $14.3 million was caused by the significant
            weakening of
            the U.S. dollar during fiscal 2004. This negatively impacted the segment’s U.S.
            dollar denominated revenue streams, which account for nearly 90% of its
            revenues.
  Segment
            EBITDA for
            fiscal 2004 was $28.3 million, down by $11.6 million from
            segment
            EBITDA of $39.9 million in fiscal 2003. This decline included
            unfavourable
            foreign exchange of $10.0 million. The remaining decline of $1.6 million
            was due
            to (i) the existence in fiscal 2003 of several contracts with negotiated
            margins
            that were significantly higher than normal; (ii) a retroactive wage settlement
            with Australian pilots; (iii) increased leasing costs attributable to
            our
            movement toward leasing a greater portion of our aircraft fleet; and
            (iv)
            increased base costs caused by the mobilization of aircraft to meet the
            demand
            created by new contracts that were acquired in fiscal 2004. The unfavourable
            foreign exchange impact of $10.0 million was due to the noted impact
            on revenue
            of a weakened U.S. dollar during fiscal 2004 and to a strengthening of
            the
            Australian dollar and South Africa rand. The strengthening of the latter
            two
            currencies increased the Canadian dollar equivalent of Australian dollar
            and
            South African rand denominated operating costs.
  The
            segment EBITDA
            margin for the International flying segment fell from 21.6% in fiscal
            2003 to
            14.7% in fiscal 2004. Absent impact of foreign exchange, the margin in
            fiscal
            2004 was 18.6%. The decline from 21.6% in fiscal 2003 to 18.6% in fiscal
            2004
            was due to items (i) through (iv) noted in the previous paragraph.
  Operating
            income
            for fiscal 2004 was $23.9 million, down $15.2 million from operating
            income of
            $39.1 million in fiscal 2003. This decrease was due primarily to
            (i) reduced segment EBITDA and (ii) increased amortization
            from fiscal
            2003 due to additional aircraft in the International fleet, and
            (iii) reduced gain on disposal of assets from fiscal 2003.
  At
            April 30,
            2004, there were 97 aircraft in this segment, consisting of 18 heavy,
            65 medium
            and 10 light helicopters and four fixed-wing aircraft. This is an increase
            of
            nine aircraft since the start of the fiscal year which was necessitated
            by the
            growth of the International flying segment in fiscal 2004. The fleet
            in the
            segment consists primarily of medium aircraft such as the Sikorsky S76,
            but also
            includes a number of heavy aircraft, including the Eurocopter Super Puma
            and the
            Sikorsky S61N.
  At
            April 30,
            2004, there were 807 employees in the segment (April 30, 2003
            - 775
            employees), including 263 pilots, 223 engineers and 321 administrative
            and
            support personnel.
  Approximately
            81.3%
            of revenues in this segment were derived from long-term contracts. The
            major
            customers in this segment included Exxon Mobil, Unocal, Chevron, bp,
            Shell,
            TotalFinaElf, Premier, Phillips, Soekor, Sonair, Debeers, the Royal Australian
            Air Force, Victoria Police, the United Nations, Talisman, Newfield, Petrobras,
            Encana and United Helicharters.
  During
            fiscal 2004,
            we were awarded contracts in our International flying segment, all of
            which
            represent incremental business, supporting the following companies: Petrobras
            (five-year contract in Brazil; this contract was awarded in August of
            2003 but
            flying services thereunder had not yet commenced by fiscal year end),
            Encana
            (three-year contract in Ecuador; this contract was awarded in September
            of 2003
            and generated revenue of $1.0 million in fiscal 2004) and Untied Helicharters
            (four-year contract in India; this contract was awarded in late October
            2003 but
            generated revenue of only $0.3 million in fiscal 2004 due to a delayed
            start of
            flying services). We also renewed the five existing contracts that came
            up for
            renewal in fiscal 2004.
  61
 
 **Schreiner
            Segment**
  Schreiner
            is the
            largest helicopter operator in the Dutch sector of the North Sea, operating
            in
            the Netherlands, providing support to the oil and gas industry and emergency
            medical services. Schreiner also supports oil and gas operations in Africa
            in
            addition to operating an aircraft parts business. We acquired Schreiner
            on
            February 16, 2004. Therefore the results of Schreiner are included
            in our
            statement of earnings and financial position subsequent to that
            date.
  Revenue
            from
            Schreiner from continuing operations during the period from acquisition
            to
            April 30, 2004 was $32.5 million while segment EBITDA earned
            during
            the same period was $3.3 million. The $32.5 million in
            revenue was
            composed of (i) $16.8 million in flying revenue of which
            $14.1 million and $2.7 million related to oil and gas and
            other
            customers, respectively; (ii) aircraft parts sales of $8.3 million;
            (iii) $4.0 million of revenue from the manufacture and
            sale of
            military targets; and (iv) $3.4 million of other revenue.
  Schreiner’s
            segment
            EBITDA margin during the period was 10.2%. This reflects the fact that
            Schreiner
            sold aircraft subsequent to acquisition which were carried in inventory
            as at
            the date of acquisition. Such aircraft inventory was recorded by us at
            fair
            market value as at the date of acquisition, which effectively eliminated
            the
            margin on the subsequent sales of these aircraft.
  Operating
            income
            during the period was $2.0 million.
  **Repair
            and
            Overhaul**
  The
            Repair and
            overhaul segment includes helicopter repair and overhaul facilities in
            Norway,
            Australia and the U.K., providing helicopter repair and overhaul services
            for
            our fleet and for an external customer base in Europe, Asia and North
            America.
  
  Third
            party repair
            and overhaul revenue for fiscal 2004 was $58.1 million, of which
            32.0% was
            derived from long-term contracts, compared to $63.0 million in
            fiscal 2003
            of which 40% was derived from long-term contracts. This $4.9 million
            decline in third-party revenue was due entirely to unfavourable foreign
            exchange. The remaining year-over-year revenue variances were completely
            offsetting and were composed of (i) a decrease in revenue from
            heavy
            maintenance projects of $4.9 million; (ii) a $1.3 million
            increase in revenue from “power-by- hour” (“PBH”) customers; (iii) an
            increase in major component overhaul and other revenue of $2.7 million;
            and
            (iv) revenue growth of $0.9 million attributable to our
            March 5,
            2004 acquisition of U.K.-based Whirlybird. Whirlybird is a global supplier
            of
            survival suits and related aircraft passenger survival equipment. The
            decline in
            revenue from heavy maintenance projects reflects the fact that such revenue
            was
            exceptionally high in fiscal 2003 due to additional customer requirements
            in
            that period. The increase in PBH revenue was attributable to increased
            work
            performed for customers to support their increased flying hours. The
            increase in
            major component overhaul and other revenue also reflects increased customer
            demand.
  62
 
 Segment
            EBITDA for
            the Repair and overhaul segment for fiscal 2004 was $41.2 million,
            up to
            $3.8 million from segment EBITDA of $37.4 million in fiscal
            2003. This
            increase was composed of (i) a cost reduction due to a one-time
            refund this
            year of approximately $2.2 million related to the cancellation
            of an
            external PBH agreement with the aircraft manufacturer for the repair
            and
            overhaul of Super Puma MkII components, which Astec is now servicing
            in-house;
            (ii) segment EBITDA growth of $3.3 million attributable
            primarily to a
            change in Astec’s revenue mix and to reduced maintenance costs; and
            (iii) segment EBITDA of $0.3 million generated by Whirlybird
            since
            acquisition, offset by (iv) unfavourable foreign exchange loss
            of
            $0.2 million. The EBITDA growth from the change in revenue mix
            was caused
            largely by the fact that the percentage of Astec’s revenue generated from
            higher-margin engine and dynamics work increased from 12% in fiscal 2003
            to 18%
            in fiscal 2004. The reduction in maintenance expense was due to a decline
            in the
            amount of work subcontracted to third-party vendors. Astec has developed
            the
            capability to perform such work in-house.
  The
            foregoing are
            also the cause of the increase in segment EBITDA margin from 18.3% last
            year to
            21.3% this year. Absent the impact of foreign exchange, fiscal 2004 segment
            EBITDA margin was 21.8%.
  Operating
            income
            for fiscal 2004 was $39.7 million, up $3.2 million from
            operating
            income of $36.5 million in fiscal 2003. This improvement was due
            primarily
            to improved segment EBITDA.
  In
            January 2004, we
            signed a contract with the German Ministry of the Interior for the (i) the
            upgrade and sale of five Super Puma aircraft from our existing fleet
            and
            (ii) the upgrade of five of the customer’s Super Pumas. The total value of
            the contract is approximately $64.0 million, to be earned between
            fiscal
            2005 and 2007.
  **Corporate
            and Other**
  Corporate
            and other
            costs for fiscal 2004 were $19.5 million compared to $21.4 million
            in
            fiscal 2003, producing negative segment EBITDA of these same amounts.
            This $1.9
            million cost reduction was due primarily to lower variable compensation
            costs
            and to reduced expense incurred under our stock appreciation rights plan.
            With
            respect to the latter, in July 2002 we entered into a hedging agreement
            with a
            major Canadian financial institution to reduce volatility of cash flows
            and
            earnings associated with changes in our share price.
  **LIQUIDITY
            AND CAPITAL RESOURCES**
  **Operating
            Activities**
  We
            generated
            $131.6 million of operating cash flow (before changes in non-cash
            working
            capital) in fiscal 2005, an increase of $8.0 million from the
            $123.6 million generated for fiscal 2004. This increase is due
            primarily to
            (i) a $7.3 million increase in net earnings from continuing
            operations, (ii) $43.2 million increase to current and
            long-term
            income tax assets and liabilities partially offset by (iii) lower
            debt
            settlement costs of $17.7 million, (iv) increased net pension
            plan
            funding of $9.8 million, (v) a $7.7 million decrease
            in deferred
            revenue, and (vi) increased amortization of $5.5 million
            of Schreiner
            contract credits. We generated $6.6 million in cash from working
            capital
            during fiscal 2005, primarily through $55.1 million from accounts
            payable
            management partially offset by increases in accounts receivable of
            $36.5 million and inventory of $14.0 million resulting
            from newly
            acquired and existing businesses and other factors. As a result, cash
            flow
            from operations for the year ended April 30, 2005 was $138.2 million,
            an
            increase of $47.6 million or 53%, from fiscal 2004.
  We
            generated $123.6
            million of operating cash flow (before changes in non-cash working capital)
            in
            fiscal 2004, a decrease of $8.9 million from the $132.5 generated in
            fiscal
            2003. This decrease was due primarily to (i) a $13.5 million decrease
            in net
            earnings from continuing operations, (ii) $18.7 million
            decrease to
            current and long-term future income taxes partially offset by (iii) higher
            debt settlement costs of $7.2 million, (iv) reduced net pension items
            of $7.5 million and (v) a $9.3 million increase in advance aircraft rental
            payments incurred in connection with the sale-leaseback and LOLI transactions.
            Cash from working capital decreased by $33.0 million. The decrease was
            primarily
            through (i) an increase in inventory of $23.7 million at Astec driven
            by the
            need to support higher customer activity and support work
            previously performed externally, (ii) an increase in prepaid expenses,
            (iii) a decrease in accounts payable, net of the increase attributable
            to
            the Schreiner purchase offset by (iv) a decrease in accounts receivable
            net
            of the increase attibutable to the Schreiner acqusition due to the timing
            of
            invoicing and cash receipts. As a result, cash flow from operations for
            the year
            ended April 30, 2004 was $90.6 million, a decrease of $23.7 million,
            or 21%,
            from fiscal 2003.
  63
 
 We
            believe that we
            will be able to generate sufficient cash flow to meet our current and
            future
            working capital, capital expenditure and debt obligations. As at April 30,
            2005, we had unused borrowing capacity under our credit facilities of
            $232.7 million and cash and cash equivalents of $51.4 million,
            for a
            total of $284.1 million. We do not expect any material changes
            to our
            future working capital requirements other than possible changes caused
            by major
            acquisitions should any such acquisitions occur. Our growth strategy
            includes
            the pursuit of various acquisition targets. It is expected that acquisitions
            would be largely debt financed. Aircraft are often acquired over an extended
            period through deposits and then sold and leased back shortly after acquisition.
            We do not expect to use sale-leaseback transactions from the sale of
            long-term
            owned aircraft as a source of liquidity. Sale-leaseback transactions
            are used by
            us as a cost effective way to finance new aircraft.
  There
            are no
            material, legal or practical restrictions on our ability to obtain cash
            from our
            subsidiaries. There are no material trends and no expected material fluctuations
            in our liquidity position. We are not aware of any balance sheet conditions,
            income items or cash flow items that could have a material impact on
            our
            liquidity. There are also currently no liquidity problems associated
            with our
            financial instruments. However, changes in our stock price affect the
            fair
            market value of an equity forward price agreement that we use to hedge
            our stock
            appreciation rights. As well, changes in foreign exchange rates affect
            the fair
            market value of currency swaps into which we have entered in connection
            with
            hedging our net investment in our self-sustaining foreign operations.
            It is
            possible that such changes in the fair market value of these financial
            instruments could be material. (See *“* *Financial
            Instruments* *”.)*
  **Financing
            Activities**
  Financing
            activities generated cash of $123.1 million for fiscal 2005, compared
            to
            $101.8 million generated for fiscal 2004. Total debt increased
            by
            $113.1 million in the year from $514.0 million to $627.1 million.
            The $113.1 million increase was comprised of (i) an increase
            in debt
            of $160.0 million offset by (ii) favourable foreign exchange of
            $46.9 million. The increase in debt was due primarily to property
            and
            equipment additions and acquisitions of new businesses in fiscal 2005.
            During
            the year we agreed to the terms of revised senior credit facilities to
            replace
            the existing facilities that were due to mature in July 2005. The new
            senior
            facilities consist of a revolving facility of U.S. $175.0 million,
            a
            revolving facility of £ 6.8 million and a non-revolving facility of € 66.1 million
            and a non-revolving facility of £ 7.6 million. The terms of the
            revised senior credit facilities provide for increased flexibility in
            both
            financial and non-financial covenants, extension of the maturity dates
            for
            periods of three to five years, lower interest rates and increased borrowing
            limits.
  In
            March 2005, we
            issued $188.5 million (U.S. $150.0 million) of
            73/8 %
            senior
            subordinated notes. Partial proceeds were used to repay
            CAD $162.4 million of our senior credit facilities.
  The
            current portion
            of long-term debt decreased by $11.2 million, from $38.0 million
            at
            April 30, 2004 to $26.8 million at April 30, 2005.
            The
            $11.2 million decrease in the current portion of long-term debt
            was
            attributable to the redemption of our remaining $11.5 million
            of 113⁄4%
            senior subordinated notes and $10.4 million remaining 8% subordinated
            debentures, offset by an increase in the current portion of debt obligation
            on
            our senior credit facilities and other term loans. See Note 15 to our fiscal 2005
            audited consolidated financial statements.
  Debt
            issue costs in
            fiscal 2005, incurred primarily in connection with the aforementioned
            U.S. $150.0 million debt issuance and the revised senior
            credit
            facilities, totalled $5.6 million and have been recorded as deferred
            financing costs. Also in connection with the debt issuance, we paid cash
            debt
            settlement costs of $1.8 million to pay down existing debt.
  To
            minimize the
            impact of foreign exchange on our cash flows, we have denominated our
            debt in
            various currencies to more closely match net operating cash flows with
            debt
            service obligations. See *“* *Financial
            Instruments* *”* .
            At April 30,
            2005 our total net debt was denominated in the following
            currencies:
  64
  Currency
                  
                  Debt
                      in
                      functional currency
                    (millions)
                  
                  Canadian
                      equivalent
                    (millions)U.K.
                      pound
                      sterling
                  
                  
                  
                  
                  £
                  9.2
                  
                  $
                  22.1Euro
                  
                  
                  
                  
                  €
                  59.7
                  
                  
                  97.0Canadian
                      dollar
                  
                  
                  
                  
                  $
                  5.2
                  
                  
                  5.2U.S.
                      dollar
                  
                  
                  U.S.
                  
                  $
                  400.0
                  
                  
                  502.8Cash
                      (various
                      currencies)
                  
                  
                  
                  
                  
                  
                  
                  
                  (51.4
                  )Total
                      net
                      debt
                  
                  
                  
                  
                  
                  
                  
                  $
                  575.7
 Total debt
              increased by $192.7 million from $321.3 million at April 30,
              2003
              to $514.0 million at April 30, 2004. The $192.7 million
              increase
              was composed of (i) an increase in debt of $211.4 million
              offset by
              (ii) favourable foreign exchange of $18.7 million. The
              increase in
              debt was due primarily to the acquisition of Schreiner as we borrowed € 93.6 million or
              $154.6 million in connection with that transaction via a bridge
              facility
              under our senior credit facilities. The favourable foreign exchange
              of
              $18.7 million was composed of (i) favourable foreign
              exchange of
              $17.7 million on our euro denominated debt and (ii) favourable
              foreign exchange of $3.3 million on our pound sterling denominated
              debt offset by (iii) unfavourable foreign exchange of
              $2.3 million on our U.S. dollar denominated debt.
  In
              April 2004 we
              issued U.S. $250 million ($340 million) of 73/8 %
              senior
              subordinated notes. Proceeds were used primarily to pay down existing
              debt and
              fund issue costs. The current portion of long-term debt increased by
              $17.6 million, from $20.4 million at April 30,
              2003 to
              $38.0 million at April 30, 2004. The $17.6 million
              increase in
              the current portion of long-term debt was attributable to the repayment
              of a
              portion of our existing debt with proceeds of our April 2004 issuance
              of
              U.S. $250.0 million senior subordinated notes. However,
              $21.9 million of such debt repayment occurred in fiscal
              2005. See
              Note 15 to our audited
              consolidated financial statements.
  Debt
              issue costs in
              fiscal 2004, incurred primarily in connection with the aforementioned
              U.S. $250.0 million debt issuance, totalled $13.2 million
              and
              have been recorded as deferred financing costs. Also in connection
              with the debt
              issuance, we paid cash debt settlement costs of $37.9 million
              to pay down
              existing debt. These costs were composed of realized foreign exchange
              losses of
              $23.9 million and $14.0 million in make-whole premiums
              and other
              out-of-pocket costs such as a hedge of our net investment in our self-sustaining
              foreign operations. The remaining cash costs of $14.0 million
              were charged
              to debt settlement expenses on our fiscal 2004 audited consolidated
              statement of
              earnings. Such debt settlement expenses totalled $19.7 million
              and were
              composed of the noted cash costs of $14.0 million as well as
              a
              $5.7 million write-off of unamortized deferred financing costs
              on debt that
              was paid down with a portion of the proceeds from the
              U.S. $250.0 million debt issuance.
  To
                minimize the
                impact of foreign exchange on our cash flows, net debt at April 30,
                2004 was
                denominated in the following currencies:
  Currency
                      
                      Debt
                          in
                          functional currency
                        (millions)
                      
                      Canadian
                          equivalent
                        (millions)U.K.
                          pound
                          sterling
                      
                      
                      
                      
                      £
                      9.9
                      
                      $
                      24.1Euro
                      
                      
                      
                      
                      €
                      75.8
                      
                      
                      124.5Canadian
                          dollar
                      
                      
                      
                      
                      $
                      22.7
                      
                      
                      22.7U.S.
                          dollar
                      
                      
                      U.S.
                      
                      $
                      250.0
                      
                      
                      342.7Cash
                          (various
                          currencies)
                      
                      
                      
                      
                      
                      
                      
                      
                      (67.1
                      )Total
                          net
                          debt
                      
                      
                      
                      
                      
                      
                      
                      $
                      446.9
 The
            terms of
            certain of our debt agreements and helicopter lease agreements impose
            operating
            and financial limitations on us. Such agreements limit, among other things,
            our
            ability to incur additional indebtedness, create liens, make capital
            expenditures, sell or sublease assets, engage in mergers or acquisitions
            and
            make dividend and other payments. Our ability to comply with any of the
            foregoing limitations and with loan repayment provisions will depend
            on future
            performance. This will be subject to prevailing economic conditions and
            other
            factors, some of which may be beyond our control. Throughout fiscal 2005
            and
            2004 we were, and continue to be, in compliance with all covenants, all
            requirements for the payment of interest and principal and all other
            conditions
            imposed by its debt and lease agreements.
  During
            fiscal 2005
            we declared an annual dividend of $0.30 payable quarterly on each Class A
            subordinate voting share and Class B multiple voting share (approximately
            $12.8 million). Of this, dividends totalling $6.4 million
            were paid by
            April 30, 2005. During fiscal 2004, we declared an annual dividend
            of
            $10.5 million or $0.25 per share, $5.3 million of
            which was paid
            in fiscal 2004 with the remaining $5.2 million paid in fiscal
            2005. During
            fiscal 2003 we declared and paid an annual dividend of $4.0 million
            or
            $0.10 per share. There have been no defaults or arrears in dividend
            payments.
    65
  Cash
              generated by
              common Class A subordinate voting share issues under the employee
              share
              purchase plan and the employee stock option plan and share conversions,
              generated net proceeds of $0.9 million during fiscal 2005 and
              $3.3 million during fiscal 2004.
  At
              April 30,
              2005, long-term debt (including current portion) totalled $627.1 million
              and shareholders’ equity totalled $506.0 million. At April 30, 2004
              long-term debt (including current portion) totalled $514.0 million
              and
              shareholders’ equity totalled $461.7 million. The long-term debt to equity
              ratio was 1.2:1 at April 30, 2005, compared to 1.1:1 at April 30,
              2004.
  **Investing
            Activities**
  Cash
            used for
            investing activities was $268.0 million in fiscal 2005 compared to
            $186.2 million in fiscal 2004. Property and equipment additions
            of
            $197.6 million were comprised of (i) $149.0 million
            for the
            purchase of 21 helicopters, including four that were subsequently leased
            through
            sale-leaseback transactions, (ii) $21.6 million for aircraft
            modifications, (iii) $6.0 million for major spares,
            (iv) $10.4 million in connection with the construction
            of buildings
            and hangars, and (v) $10.6 million for ground equipment,
            vehicles, a
            simulator and office furniture and fixtures. The aforementioned aircraft
            expenditures of $149.0 million are the net amount of aircraft
            purchases of
            $172.9 million less the application of deposits on these aircraft
            of
            $23.9 million. We paid aircraft deposits during the year of
            $53.0 million toward future aircraft purchases to end fiscal 2005
            with an
            aircraft deposit balance of $43.0 million.
  Capital
            expenditures during fiscal 2005 for helicopter major components totalled
            $63.3 million and $15.5 million for helicopter major inspections.
            These expenditures were financed from proceeds received on capital asset
            dispositions and from operating cash flow. Proceeds from disposals during
            fiscal
            2005 totalled $90.9 million. These proceeds were composed of
            (i) $89.0 million received in connection with five aircraft
            sale-leaseback transactions and the disposal of five additional aircraft,
            (ii)
            $1.7 million received on an insurance claim for a Bell 212 helicopter
            and
            (iii) $0.2 million received from miscellaneous
            dispositions.
  During
            fiscal 2005,
            we acquired Multifabs, ATSL and Coulson for a net cash expenditure of
            $18.0 million. These acquisitions were financed through existing
            operating
            facilities. See Note 7 to our fiscal 2005
            audited 2005 consolidated financial statements.
    66
 
 Cash
            used for
            investing activities was $186.2 million in fiscal 2004 compared
            to $31.8
            million in fiscal 2003. Property and equipment additions of 
            $116.9 million were composed of (i) $80.8 million
            for the
            purchase of 12 helicopters; (ii) $18.2 million for aircraft
            modifications; (iii) $5.8 million for major spares;
            (iv) $4.0 million in connection with the construction of
            buildings and
            hangars; and (v) $8.1 million primarily for other equipment.
            The
            aforementioned aircraft expenditures of $80.8 million were composed
            of the
            combined purchase prices of $100.8 million offset by the application
            of
            deposits of $20.0 million. We also made additional aircraft deposits
            during
            the year of $23.6 million (2003 - $6.7 million) toward
            future aircraft
            purchases to end fiscal 2004 with an aircraft deposit balance of
            $14.5 million.
  Capital
            expenditures during fiscal 2004 for helicopter major components totalled
            $59.0 million. We also spent $9.2 million on helicopter
            major
            inspections during the year. These expenditures were financed from proceeds
            received on capital asset dispositions and from cash flow. Proceeds from
            disposals during fiscal 2004 totalled $126.9 million. These proceeds
            were
            composed of (i) $124.6 million received in connection with
            six
            aircraft sale-leaseback transactions, seven LOLI transactions and the
            disposal
            of five aircraft; and (ii) $2.3 million received from miscellaneous
            dispositions.
  During
            the fourth
            quarter of fiscal 2004, we acquired Schreiner and Whirlybird for net
            cash
            expenditures of $92.7 million and $4.8 million, respectively.
            These
            acquisitions were debt financed.
  Cash
            used for
            investing activities in 2003 totalled $31.8 million. Property and equipment
            additions of $44.7 million were composed of $18.4 million
            related
            to aircraft additions and modifications and $26.3 million related
            to other
            property and equipment. The other property and equipment additions included
            $4.0 million for a new passenger terminal in Halifax, Canada,
            $4.0 million related to the completion of a new passenger terminal
            in the
            U.K., $6.6 million related to the purchase of major spares,
            $4.7 million for ground and other flying equipment and $7.0 million
            related to the acquisition of new information technology systems. Capital
            expenditures for helicopter major components totalled $47.5 million
            and we
            spent $13.4 million on helicopter major inspections. Proceeds
            on disposal
            of capital assets were $74.9 million in fiscal 2003. The proceeds
            were
            derived primarily from the sale-leaseback of six Super Puma AS332L aircraft
            for
            $65.4 million and insurance proceeds of $4.5 million.
  We
            had no other
            material capital expenditure commitments at April 30, 2005 other than
            commitments to take delivery of aircraft as discussed previously. See
            "*Fleet
            - Commitments to Acquire New Aircraft"*. See also Note 28 to our fiscal 2005
            audited consolidated financial statements. Aircraft and other assets
            required to
            accomodate future growth will be purchased with funding from operations
            and / or
            additional debt, or will be leased under operating lease
            arrangements.
  **FINANCIAL
            INSTRUMENTS**
  **Primary
            Financial Instruments**
  The
            carrying values
            of our primary financial instruments, with the exception of our senior
            subordinated notes and subordinated debentures, substantially approximate
            fair
            value due to the short-term maturity and/or other terms of those
            instruments.
  The
            fair value of
            the senior subordinated notes and subordinated debentures is based on
            quoted
            market prices. The fair value of these debt instruments, including the
            current
            portion, is as follows (in millions of Canadian dollars):
  **April
                      30, 2005**
                  
                  April
                      30,
                      2004Fair
                      Value
                  
                  Carrying
                      Value
                  
                  Fair
                      Value
                  
                  Carrying
                      ValueSenior
                      subordinated notes (73/8%)
                  
                  **$**
                  **490.8**
                  
                  **$**
                  **502.8**
                  
                  $
                  344.8
                  
                  $
                  342.7Senior
                      subordinated notes (113/4%)
                  
                  
                  **-**
                  
                  
                  **-**
                  
                  
                  12.5
                  
                  
                  11.5Subordinated
                      debentures
                  
                  
                  **-**
                  
                  
                  **-**
                  
                  
                  10.5
                  
                  
                  10.4
  **Derivative
            Financial Instruments Used for Risk Management**
  We
            regularly enter
            into forward foreign exchange contracts, equity forward pricing agreements
            and
            other derivative instruments to hedge our exposure to expected future
            cash flows
            from foreign operations, anticipated transactions in currencies other
            than the
            Canadian dollar and stock price volatility. We do not enter into derivative
            transactions for speculative or trading purposes.
  67
 
 We
            have designated
            our U.S.$400.00 million 7 3/8 %
            senior
            subordinated notes and related forward foreign currency contracts as
            effective
            hedges of our net investments in certain self-sustaining operations in
            Canada
            (U.S. dollar functional currency), the U.K., the Netherlands, and Norway.
            We
            have also designated other pound sterling and euro denominated debt as
            hedges of
            our net investments in our self-sustaining operations in the U.K. and
            the
            Netherlands. As a result of these effective hedging relationships, revaluation
            gains and losses on the debt, net investments and currency swaps are
            offset in
            the cumulative translation adjustment account in the equity section of
            the
            balance sheet in accordance with Canadian GAAP.
  We
            have also
            entered into forward foreign exchange contracts to reduce our exposure
            to
            currency fluctuations on anticipated foreign currency revenues and expenses
            for
            certain of our operations. These relationships also qualified as effective
            hedges under Canadian GAAP. See *“Risks
            and
            Uncertainties - Foreign Currency”* .
  In
            addition, we
            have hedged our obligations under our Stock Appreciation Rights and Performance
            Units (“SARs”) using an equity forward price agreement to reduce volatility in
            cash flow and earnings due to possible future increases in our share
            price. We
            accrue the liability and related expense associated with our SARs plans
            based on
            a calculation relating the market value of our Class A subordinate
            voting
            shares on the TSX to the reference price of the SARs. At April 30,
            2005,
            the amount recorded in current liabilities related to SARs was
            $10.4 million (April 30, 2004 - $5.3 million).
  The
            nature,
            maturity, notional amount and fair market value of our derivatives used
            in risk
            management activities as at April 30, 2005 are as follows:
  Hedging
                      Item
                  
                  Maturity
                  
                  Notional
                    amount
                  
                  Fair
                      market
                      value
                    (in
                      millions)Forward
                      foreign exchange contractsSell
                      pound
                      sterling; buy U.S. dollar
                  
                  
                  April
                      2006
                  
                  
                  £
                      55.0
                      million
                  
                  $
                  (12.4
                  )Sell
                      euro;
                      buy U.S. dollar
                  
                  
                  April
                      2006
                  
                  
                  €
                      25.0
                      million
                  
                  
                  (3.6
                  )Sell
                      Norwegian kroner; buy U.S. dollar
                  
                  
                  April
                      2006
                  
                  
                  NOK
                      855.9
                      million
                  
                  
                  (1.0
                  )Sell
                      U.S.
                      dollar; buy Canadian dollar
                  
                  
                  April
                      2006
                  
                  
                  USD
                      $70.2
                      million
                  
                  
                  5.0Sell
                      pound
                      sterling; buy euro
                  
                  
                  April
                      2006
                  
                  
                  £
                      40.7
                      million
                  
                  
                  (2.5
                  )Equity
                      forward price agreement
                  
                  
                  July
                      2007
                  
                  
                  1,170,000
                      units
                  
                  
                  (0.2
                  )$
                  (14.7
                  )
 Unit
            amounts have
            been restated to reflect the April 2005 2-for-1 stock split
  **Other
            Financial Instruments**
  We
            have a 12%
            unsecured, subordinated convertible note due to an affiliate of our controlling
            shareholder. The total amount outstanding at April 30, 2005 was
            $4.6 million (April 30, 2004 - $4.4 million, April 30,
            2003
            - $4.3 million). Refer to item (b) of *“* *Related
            Party
            Transactions* *”* for additional
            details on this convertible debt.
  **Credit
            Risk
            on Financial Instruments**
  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.
  **Interest
            Rate Risk**
  We
            have used
            interest rate swap agreements in the past in order to achieve an appropriate
            mix
            of fixed and variable interest rate debt. Our current exposure to interest
            rates
            is such that fixed and variable rates are appropriately balanced at
            April 30, 2005, 2004 and 2003 without the use of interest rate
            derivative
            instruments.
  68
 
 **OFF-BALANCE
              SHEET ARRANGEMENTS**
 In
            addition to the
            derivatives noted above, we have entered into guarantees and leasing
            arrangements that can broadly be considered as off-balance sheet
            arrangements.
  We
            have given
            guarantees to certain lessors in respect of operating leases that provide
            for
            cross-acceleration rights in the event we default on certain of our credit
            facilities. We have also provided limited guarantees to third parties,
            including
            guarantees in the form of junior loans, loans receivable and deferred
            payments,
            in connection with a portion of the aircraft value at the termination
            of
            aircraft operating leases. We entered into these guarantees to facilitate
            the
            related leasing arrangements which form part of its fleet management
            strategy.
            Our exposure under these guarantees with respect to aircraft values is
            approximately $40.1 million. The resale market for the aircraft
            for which
            we have provided guarantees remains strong, and as a result, we do not
            anticipate incurring any liability or loss with respect to these guarantees.
            For
            additional information regarding these guarantees, see Note 30 to our fiscal 2005
            audited consolidated financial statements.
  At
            April 30,
            2005 we operated 19 aircraft under operating leases with seven entities
            that are
            considered variable interest entities (“VIEs”) under Canadian and U.S. GAAP.
            These leases have terms and conditions similar to those of our other
            aircraft
            operating leases over periods ranging from 2006 to 2012. We have entered
            into
            these leasing arrangements with VIEs because such arrangements represent
            an
            attractive form of leasing under our overall fleet management strategy.
            In
            particular, under these leasing arrangements we have been able to mitigate
            certain risks associated with helicopter market values. For example,
            the lessors
            in these arrangements bear the majority of downside risk with respect
            to any
            decline in the market values of the leased helicopters below their estimated
            residual value at the end of the lease terms. We have completed an analysis
            of
            the accounting guidance with respect to VIEs (Canada - Accounting
            Guidelines 15, U.S. - FASB Interpretations No. 46 and 46-R)
            and have
            concluded that we are not required to consolidate any of the VIEs with
            which we
            have aircraft leasing arrangements. Based on independent appraisals,
            the
            estimated fair market value of the 19 aircraft leased from VIEs was
            $169.6 million at April 30, 2005. We have provided junior
            loans and
            loans receivable in connection with operating leases with the VIEs, and
            have
            also entered into remarketing agreements for the aircraft under lease.
            Our
            maximum exposure to loss related to such junior loans and loans receivable
            as a
            result of our involvement with VIEs is $13.0 million. For additional
            information, see Note 29 to our fiscal 2005
            audited consolidated financial statements.
  **CONTRACTUAL
            OBLIGATIONS**
  The
            following table
            contains a summary of our obligations and commitments to make future
            payments
            under contracts, including debt, lease and purchase agreements at April 30,
            2005. Additional information is contained in Notes 15 and 28 to our fiscal 2005
            audited consolidated financial statements.
  **Payments
            due by period**
 **(in
            millions of Canadian dollars)**
  Contractual
                      obligations
                  
                  Total
                  
                  Less
                      than 1
                      year
                  
                  1-3
                      years
                  
                  4-5
                      years
                  
                  More
                      than 5
                      yearsLong-term
                      debt
                  
                  $
                  124.4
                  
                  $
                  26.8
                  
                  $
                  57.7
                  
                  $
                  37.9
                  
                  $
                  2.0Senior
                      subordinated notes (73/8%)
                  
                  
                  502.8
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  502.8Operating
                      lease (aircraft)
                  
                  
                  243.7
                  
                  
                  54.9
                  
                  
                  84.2
                  
                  
                  67.8
                  
                  
                  36.8Operating
                      lease (other)
                  
                  
                  36.8
                  
                  
                  5.4
                  
                  
                  7.9
                  
                  
                  7.3
                  
                  
                  16.2New
                      aircraft
                      commitments
                  
                  
                  279.2
                  
                  
                  279.2
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -Total
                      contractual obligations
                  
                  $
                  1,186.9
                  
                  $
                  366.3
                  
                  $
                  149.8
                  
                  $
                  113.0
                  
                  $
                  557.8
  69
  **DEFINED
            BENEFIT PENSION PLANS**
  Approximately
            one-third of our active employees are covered by defined benefit pension
            plans.
            The plan in the U.K. is closed to new members. At April 30, 2005,
            we had
            net unfunded deficits of $75.7 million relating to defined benefit
            pension
            plans that are required to be funded, compared to $67.0 million
            at
            April 30, 2004, an increase of $8.7 million. Of the $75.7 million
            unfunded deficits at April 30, 2005, $68.6 million, $nil
            and
            $7.1 million were related to plans in the U.K., Norway and the
            Netherlands,
            respectively. In addition, at April 30, 2005, we had a deficit
            of
            $46.5 million related to plans that do not require funding, compared
            to a
            deficit of $36.6 million for those plans at April 30,
            2004.
  The
            unfunded
            deficit relating to funded plans increased during fiscal 2005 primarily
            due to
            increases in estimated benefit obligations resulting from reductions
            in the
            discount rates used and changes in expected long-term retirement
            assets.
  Pension
            expense for
            fiscal 2005 was $23.2 million, compared to $27.1 million
            for fiscal
            2004. This $3.9 million decrease in pension expense was comprised
            of
            (i) a decrease of $4.4 million in the European flying segment,
            (ii) a decrease of $0.4 million in the Repair and overhaul
            segment and
            (iii) an increase of $0.9 million in the Corporate and
            other segment.
            The primary reasons for the $3.9 million decrease in pension expense
            from
            fiscal 2004 to fiscal 2005 were a $1.8 million decrease in the
            amortization
            of net actuarial and experience losses and a $2.1 million decrease
            due
            primarily to assumption changes.
  During
            the year
            ended April 30, 2005 the plan in the Netherlands was amended from
            a final
            pay arrangement to an average pay arrangement resulting in a reduction
            in the
            accrued benefit obligation of $11.5 million. Also during the year,
            the plan
            in Canada was amended by adding additional employees to the plan resulting
            in an
            increase of $2.6 million to both unrecognized prior service costs
            and the
            benefit obligations.
  In
            addition, the
            sale of SAMCO, as well as terminations as part of the restructuring initiatives,
            resulted in a curtailment of the Netherlands pension plan. A curtailment
            gain of
            $2.8 million from the sale of SAMCO was recorded in the results
            of
            discontinued operations and a curtailment gain of $2.9 million
            related to
            our restructuring activities has been recorded in restructuring costs.
            The
            curtailment gain for both events reflects a reduction in both the benefit
            obligations and unrecognized past service costs.
  At
            April 30,
            2005, we undertook a complete review of the performance of the pension
            plans
            during fiscal 2005 and the appropriate assumptions. This review, with
            the
            assistance of our actuaries, resulted in an estimate of pension expense
            for
            fiscal 2006 of $27.8 million. The estimated increase of $4.6 million
            from fiscal 2005 relates to a $2.5 million increase in the amortization
            of
            net actuarial and experience losses and an increase of $2.1 million
            due to
            changes in the weighted average discount rate, rate of compensation increase
            and
            long-term expected rate of return on plan assets.
  The
            following chart
            reflects the sensitivities associated with a change in certain actuarial
            assumptions:
  Actuarial
                      assumption
                  
                  Change
                      in
                      assumption
                  
                  Impact
                      on
                      projected
                    benefit
                      obligation
                    ($ millions)
                  
                  Impact
                      on
                    pension
                      expense
                    ($ millions)Discount
                      rate
                  
                  
                  1
                  %
                  
                  86.1
                  
                  
                  5.6Rate
                      of
                      compensation increase
                  
                  
                  1
                  %
                  
                  40.1
                  
                  
                  5.0Rate
                      of
                      return on plan assets
                  
                  
                  1
                  %
                  
                  -
                  
                  
                  3.5
  While
            the asset mix
            varies in each plan, overall the asset mix was 37% equities, 42% fixed
            income
            and 21% money market as at April 30, 2005.
  70
 
 **SHARE
            DATA**
  Our
            share capital
            was comprised of the following:
  Number
                      of
                      Shares
                  
                  Consideration(amounts
                      in
                      thousands)
                  
                  **April
                      30, 2005**
                  
                  April
                      30,
                      2004
                  
                  **April
                      30, 2005**
                  
                  April
                      30,
                      2004Class
                      A
                      subordinate voting shares
                  
                  
                  **36,833**
                  
                  
                  36,756
                  
                  **$**
                  **222,727**
                  
                  $
                  221,532Class
                      B
                      multiple voting shares
                  
                  
                  **5,866**
                  
                  
                  5,877
                  
                  
                  **18,431**
                  
                  
                  18,719Ordinary
                      shares
                  
                  
                  **22,000**
                  
                  
                  22,000
                  
                  
                  **33,000**
                  
                  
                  33,000Ordinary
                      share loan
                  
                  
                  **-**
                  
                  
                  -
                  
                  
                  **(33,000**
                  **)**
                  
                  (33,000
                  )Class
                      A
                      employee share purchase loan
                  
                  
                  
                  
                  
                  
                  
                  
                  **(1,689**
                  **)**
                  
                  (1,823
                  )**$**
                  **239,469**
                  
                  $
                  238,428Contributed
                      surplus
                  
                  
                  
                  
                  
                  
                  
                  **$**
                  **3,291**
                  
                  $
                  3,291
 
 Class
                      A
                      Shares that would be issued upon conversion of the
                      following:
                  
                  **April
                      30, 2005**
                  
                  April
                      30,
                      2004Class
                      B
                      Shares
                  
                  
                  **5,866**
                  
                  
                  5,877Stock
                      options
                  
                  
                  **2,815**
                  
                  
                  2,850Convertible
                      debt
                  
                  
                  **1,379**
                  
                  
                  1,379
  At
            a special
            meeting of shareholders on March 28, 2005, the shareholders approved
            the
            subdivision of our issued and unissued Class A subordinate voting
            shares,
            Class B multiple voting shares and ordinary shares all on a two-for-one
            basis. The Class A subordinate voting shares and Class B
            multiple
            voting shares listed on the TSX commenced trading on a post-split basis
            on
            April 12, 2005. Class A subordinate voting shares listed
            on the
            New York Stock Exchange began trading on a post-split basis on
            April 19, 2005.
  During
            the year
            ended April 30, 2004 we adopted without restatement of comparative
            figures
            the Canadian Emerging Issues Committee Abstract 132, Share Purchase
            Financing (“EIC-132”). Under EIC-132, share purchase loans receivable are to be
            deducted from shareholders’ equity if such loans are not in accordance with
            current arm’s length market terms and conditions including interest rate, terms
            of interest payments and principal repayments and adequacy of security.
            Our
            Class A subordinate voting employee share purchase loans are non-interest
            bearing, full recourse loans and have as collateral a pledge of the related
            shares purchased with a fair market value of $19.1 million as
            at
            April 30, 2005. As a result, the employee share purchase loans,
            of
            $1.7 million on at April 30, 2005 (2004 - $1.8 million),
            are
            deducted from shareholders’ equity. Payments equal to 5% of the original loan
            principal are required on each loan anniversary date with the balance
            payable on
            the tenth anniversary. Upon termination of employment, the loans are
            required to
            be repaid within 60 days.
  The
            Class A
            subordinate voting shares carry the right to one vote per share and the
            Class B multiple voting shares carry the right to 10 votes
            per share.
            Each single Class B multiple voting share may be converted into
            a single
            Class A subordinate voting share at the option of the shareholder.
            In all
            other respects the Class A subordinate voting shares rank equally
            and
            ratably with the Class B multiple voting shares.
  We
            have issued
            22,000,000 ordinary shares to a company owned by our majority shareholder
            for
            subscriptions of $33.0 million. Concurrently, to fund the subscriptions
            for
            the ordinary shares, we made a non-interest bearing loan to the purchaser,
            payable on demand and we have a lien on the ordinary shares issued. The
            ordinary
            shares entitle the holder thereof to (i) one vote for every
            10 ordinary shares held; (ii) dividends equivalent on a
            per share
            basis to any dividend paid on our Class A subordinate voting shares
            and
            Class B multiple voting shares, subject to prior minority shareholder
            approval; and (iii) receive a share of the residual of the Company,
            on a
            liquidation or winding-up, equal, on a share-for-share basis, to the
            amount
            received by a holder of a Class A subordinate voting share or
            a
            Class B multiple voting share. The ordinary shares are redeemable
            at our option at the subscription price thereof in certain
            circumstances. See Note 25 to our fiscal 2005
            audited consolidated financial statements.
  During
            the first
            two months of fiscal 2006 we issued 2,413 Class A subordinate
            voting shares
            for total consideration of approximately $53,000.
  71
 
 **SEASONALITY**
  See *“* *Results
            of
            Operations* *-* *Aberdeen
            Airport - Helicopter Passengers* *”* and *“* *Results
            of
            Operations* *-* *Quarterly
            Information* *”* for discussion on
            the impacts of seasonality.
  **RISKS
            AND
            UNCERTAINTIES** ****
  **Foreign
            Currency**
  We
            prepare
            consolidated financial statements in Canadian dollars, as described in
            Note 2 to our fiscal 2005
            audited consolidated financial statements. However, a significant portion
            of
            revenue and operating expenses are denominated in the reporting currencies
            of
            our principal foreign operating subsidiaries which consist primarily
            of pound
            sterling, Norwegian kroner, U.S. dollars, Australian dollars, South African
            rand
            and euros. In addition, certain revenue and operating expenses are transacted
            in
            currencies other than the reporting currencies of these subsidiaries.
            The
            foreign exchange impact on revenue and segment EBITDA, is comprised of
            (i) foreign exchange on the translation of the financial results
            of the
            foreign subsidiaries into Canadian dollars (“translation impact”); and
            (ii) foreign exchange on the translation of foreign denominated
            transactions into the reporting currencies of the subsidiaries (“transaction
            impact”).
  The
            total
            favourable foreign exchange impact on revenue for fiscal 2005 was
            $0.1 million. This consisted of a favourable translation impact
            of
            $8.5 million and an $8.4 million unfavourable transaction
            impact.
  The
            total
            unfavourable foreign exchange impact on segment EBITDA for fiscal 2005
            was
            $1.2 million. This consisted of a favourable translation impact
            of
            $0.2 million and an unfavourable transaction impact of $1.4 million.
            Since financing charges, amortization, income tax expense, capital expenditures
            and debt repayments are also primarily in foreign currencies, the net
            impact of
            foreign exchange on net earnings and cash flow is generally not as significant
            as it is on segment EBITDA.
  Our
            overall
            approach to managing foreign currency exposures includes identifying
            and
            quantifying our exposure and putting in place the necessary financial
            instruments to manage the exposure. We operate under a corporate policy
            that
            restricts us from using any financial instrument for speculative or trading
            purposes. The policy provides that we may participate in derivative transactions
            only with Schedule I Canadian chartered banks or other financial
            institutions with an “A” credit rating.
  We
            have developed a
            risk management plan to mitigate potential risks with respect to foreign
            currencies. The strategy is to match cash inflows and outflows by currency,
            thereby minimizing net currency exposures to the extent possible. This
            is
            accomplished by ensuring that customer contracts, major expenditures
            and debt
            are denominated in the appropriate currencies.
  To
            mitigate the
            impact that weakening European currencies could have on operating cash
            flows, we
            have denominated, either directly or via currency swaps, a significant
            portion
            of our long-term debt in pound sterling, euros and Norwegian kroner.
            See *“* *Liquidity
            and
            Capital Resources* *-* *Financing
            Activities* *”.*
  **Trade
            Credit Risk**
  Trade
            receivables
            consist primarily of amounts due from multinational companies operating
            in the
            oil and gas industry. Credit risk on these receivables is reduced by
            the large
            and diversified customer base. Included in accounts receivable is an
            allowance
            for doubtful accounts of $7.5 million (2004 -
            $9.1 million).
  72
 
 **Industry
            Exposure**
  During
            fiscal 2005,
            we derived 67% ($604.6 million) of our revenues from the provision
            of
            helicopter transportation services to customers in the offshore oil and
            gas
            industry. We believe the future demand for these helicopter services
            and our
            competitive position will enable us to continue to be a major provider
            of
            helicopter transportation services to the oil and gas industry. However,
            a
            change in the demand for offshore oil and gas or the entry of significant
            new
            competitors could have a material impact on our revenues from our customers
            in
            the offshore oil and gas industry. Approximately 84% of our revenues
            from
            customers in the oil and gas industry are derived from the more stable
            oil and
            gas production activities, which tend to be less affected by short-term
            fluctuations in oil and gas prices.
  **Inflation**
  Although
            we believe
            that inflation has not had any material affect on our operating results,
            our
            business may be affected by inflation in the future.
  **Contract
            Loss**
  The
            potential
            cancellation or non-renewal of contracts is a risk for us. During fiscal
            2005, a
            contract with Talisman Energy (U.K.), in respect of the North Sea was
            not
            renewed and subsequently expired in March 2005. That contract generated
            revenue
            of approximately $22.0 million per annum. In addition, ConocoPhillips
            Norway and bp/Talisman announced that after a short extension, they would
            not be
            renewing contracts that expire on September 1, 2006 and December 31,
            2005, respectively. These contracts generate approximately $46.0 million
            per annum. However, we have identified several potential markets for
            the
            redeployment of these aircraft and are confident demand for our aircraft
            will
            continue to grow in the North Sea and in offshore markets around
            the world.
            We have been successful in securing a number of new contracts and contract
            renewals subsequent to year-end.
  **Aviation
            Licenses**
  Companies
            wishing
            to hold a license to operate helicopters in Europe must be owned and
            controlled
            by a citizen of a country of the European Union. Our ability to hold
            aviation
            licenses in Europe is contingent on our controlling shareholder, Mr. Craig
            L. Dobbin, who is a citizen of both Canada and the Republic of Ireland,
            a
            European Union member country, owning and controlling the Company. During
            fiscal
            2002, Mr. Dobbin’s five adult children were granted Irish citizenship,
            thereby providing a succession alternative to ensure our long-term eligibility
            to operate in Europe.
  **Reinsurance**
  We
            operate, through
            a wholly owned subsidiary, a reinsurance business that it uses to place
            insurance coverages that are not available in the market or, if they
            are
            available, their cost is prohibitive or excessive. Our reinsurance subsidiary
            covers the following risks:
  (i)
                  Loss
                      of
                      license insurance for our pilots in Europe, Africa and
                      Australia.
 
 (ii)
                  Death
                      and
                      disability insurance for employees of our Norwegian
                      operations.
 
 (iii)
                  Valuation
                      rate protection for the pension plan for employees of our Norwegian
                      operations.
 
 We
            have not been
            exposed to any significant losses in connection with its reinsurance
            business.
  **RELATED
            PARTY TRANSACTIONS**
  (a)
                  In
                      the course
                      of our regular business activities, we enter into routine transactions
                      with related companies subject to significant influence and
                      companies
                      affiliated with the controlling shareholder. These transactions
                      are
                      measured at the amounts exchanged, which is the amount of consideration
                      determined and agreed to by the related parties. Transactions
                      with related
                      parties are summarized as follows:
 
 73
  **Year
                      Ended April 30,****2005**
                  
                  2004
                  
                  2003Revenues*(i)*
                  
                  **$**
                  **43,518**
                  
                  $
                  10,745
                  
                  $
                  -Direct
                      costs
                  
                  **$**
                  **1,298**
                  
                  **$**
                  1,972
                  
                  **$**
                  21,425Capital
                      asset
                      additions
                  
                  **$**
                  **8,160**
                  
                  **$**
                  2,962
                  
                  **$**
                  -
 
 **As
                      at
                      April 30,****2005**
                  
                  2004Net
                      amounts
                      receivable and payable in respect of such revenues, expenses
                      and
                      additions
                  
                  **$**
                  **15,044**
                  
                  $
                  10,808
  (i)
                    Revenue
                        increases relate to revenues from a company owned by Schreiner
                        which is
                        subject to significant influence. Therefore, the fiscal 2004
                        amount only
                        includes revenues from the February 16, 2004 acquisition
                        of
                        Schreiner.
 (b)
                  During
                      fiscal
                      2000, in connection with securing tender credit facilities,
                      we received an
                      unsecured, subordinated, convertible 12% loan from an affiliate
                      of our
                      controlling shareholder in the amount of $5.0 million.
                      This loan is
                      subordinated to our senior credit facilities and our senior
                      subordinated
                      notes. See Note15to our
                      fiscal 2005 audited consolidated financial statement. The loan
                      is
                      convertible into Class A subordinate voting shares at
                      $3.63 per
                      share. The estimated value of the loan proceeds attributable
                      to the
                      conversion feature of $1.0 million was allocated to
                      contributed
                      surplus. The equivalent reduction in the carrying value of
                      the loan is
                      amortized to earnings over the term of the loan. Interest expense
                      of
                      $0.7 million (2004 - $0.7 million; 2003 - $0.7
                      million),
                      including amortization of the above-noted discount, was recorded
                      on the
                      loan during the fiscal year ended April 30,
                      2005.
 
 **SUBSEQUENT
            EVENTS**
  On
            July 26,
            2005, we signed a Letter of Intent for the sale of our 38% shareholdings
            in
            Inaer, which operates light and medium aircraft primarily in the Spanish
            helicopter market. The transaction is subject to several conditions including
            satisfactory due diligence and regulatory approval, and is expected to
            close in
            October 2005. Proceeds are estimated at $45.0 million. Our investment
            in
            Inaer is held at $20.8 million at April 30, 2005. Professional
            fees
            and other direct costs associated with realizing this potential sale
            are not yet
            determinable and will reduce any gain on sale arising from this
            transaction.
  On
            September 9, 2005, we sold our remaining interest in CHL and realized
            net
            proceeds of approximately $48 million. We will record a combined
            pre-tax
            gain and dividend income of approximately $20 million on this
            divestiture.
            The final gain on sale is subject to adjustments of closing costs and
            expenses
            and equity accruals from July 31, 2005 to the date of sale. Equity
            earnings
            of CHL was $2.3 million for the current fiscal year and the carrying
            value of
            the investments in CHL was $26.6 million at April 30, 2005.
  **APPLICATION
            OF CRITICAL ACCOUNTING POLICIES - ACCOUNTING ESTIMATES**
  The
            preparation of
            our consolidated 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. By their nature these estimates are subject to measurement uncertainty.
            The effect on the financial statements of changes in such estimates in
            future
            periods could be material and would be accounted for in the period the
            change
            occurs. The following are significant areas in which management makes
            significant accounting estimates:
  (a)
                  Recoverability
                      of pre-operating expenses
  The
            ability to
            defer pre-operating expenses is dependent on the future recoverability
            of the
            amounts from cash flows generated by the related commercial operations.
            If
            operations perform below anticipated recoverable levels, the portion
            of
            pre-operating expenses that cannot be recovered is expensed immediately
            when
            known. At April 30, 2005, $6.5 million (2004 - $3.3 million)
            in
            unamortized pre-operating expenses related to new contract awards and
            the
            development of new businesses, which are expected to be recoverable from
            the
            related future cash flows of such contract awards, are included in other
            assets
            on the balance sheet .
  74
 
 (b)
                  Flying
                      asset
                      amortization
  Flying
            assets are
            comprised of airframes and components amortized on a straight-line basis
            over
            their estimated useful lives. Effective May 1, 2004, based on
            our review of
            our amortization policy with respect to aircraft airframe, the percentage
            of
            costs attributable to certain airframes has been decreased from 30% to
            25-30%
            and the estimated useful life of such airframes has been increased from
            15 years to 25 years. The effect of these accounting estimate
            changes
            has been accounted for prospectively in fiscal 2005, resulting in a decrease
            in
            amortization for the year ended April 30, 2005 of
            $3.8 million.
  The
            helicopter
            airframes and components are inspected, repaired and overhauled at pre-specified
            intervals. Such costs are capitalized to flying assets. Helicopter airframe
            major inspection costs are amortized to amortization expense while component
            major inspections and repair and overhaul costs are amortized to direct
            costs.
            This requires us to estimate the period of expected future benefit for
            each type
            of component and inspection. Such estimates are based on mandated inspection
            and
            overhaul intervals and on previous experience and could vary materially
            from
            actual experience resulting in over- or under-amortization of capitalized
            costs.
  (c)
                  Carrying
                      value of flying assets
  Based
            on
            independent appraisals, the appraised value of our flying assets exceeded
            the
            carrying value by $53.2 million and $102.3 million as at
            April 30, 2005 and 2004, respectively (both amounts unaudited).
            The
            recoverability of the book value of these assets is, in part, dependent
            on the
            estimates used in determining the expected period of future benefits
            over which
            to amortize flying assets. In addition, such recoverability is dependent
            on
            market conditions including demand for certain types of aircraft and
            changes in
            technology arising from the introduction of newer, more efficient
            aircraft.
  (d)
                  Defined
                      benefit employee pension plans
  We
            maintain both
            funded and unfunded defined benefit employee pension plans in the U.K.,
            Norway,
            Canada and the Netherlands for approximately one-third of our active
            employees
            and certain former employees. Several statistical and judgmental factors,
            which
            attempt to anticipate future events, are used in measuring our obligations
            under
            the plans and the related periodic pension expense. These factors include
            assumptions about the rate at which the pension obligation is discounted,
            the
            expected long-term rate of return on plan assets and the rate of future
            compensation increases. In addition, our actuaries use other assumptions
            such as
            withdrawal and mortality rates. The estimates and assumptions used may
            differ
            materially from actual results due to changing market and economic conditions,
            changing withdrawal rates, and changing overall life spans of participants.
            These differences 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. We review annually the assumptions used in measuring the
            pension
            plan obligations to determine their appropriateness based on actual experience
            and current and anticipated market conditions.
  (e)
                  Utilization
                      of income tax losses
  We
            have accumulated
            $91.9 million and $37.4 million in non-capital and capital
            tax losses,
            respectively, as at April 30, 2005. As detailed in Note 24 to our fiscal 2005
            audited consolidated financial statements, some of the non-capital losses
            expire
            between fiscal 2006 and 2015 and some carry forward indefinitely, while
            the
            capital losses carry forward indefinitely. We have determined that it
            is more
            likely than not that the benefit of all of these losses will be realized
            in the
            future and, accordingly, have recorded future tax assets of $35.0 million
            related to these losses. This determination was based on assumptions
            regarding
            the reversal of existing future tax liabilities and future earnings levels
            in
            the subsidiaries with accumulated losses, and on an ability to implement
            routine
            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 assets will not be
            realized,
            a charge will be made to earnings in the period when such determination
            is
            made.
  75
 
 (f)
                  Aircraft
                      operating leases
  Upon
            entering into
            a new aircraft leasing arrangement, we evaluate whether substantially
            all of the
            benefits and risks of ownership related to the aircraft have been transferred
            to
            the lessor in order to determine if the lease is classified and recorded
            as
            capital or operating. Currently, all of our aircraft leases are classified
            and
            recorded as operating leases. One of the criteria in determining whether
            the
            benefits and risks have been transferred is whether the present value
            of the
            minimum lease payments is less than 90% of the fair value of the leased
            aircraft
            at the inception of the lease. In making this determination we include
            in our
            minimum lease payments minimum rentals over the lease term (excluding
            any
            renewal options) and any guarantee by us of the residual value of the
            leased
            aircraft including junior loans, deferred payments, advance rentals,
            and asset
            value guarantees.
  The
            second
            criterion that is evaluated is whether there is a bargain purchase option
            at the
            end of the lease compared to the estimated fair market value of the aircraft
            at
            that time. At the time of entering into a new aircraft leasing arrangement
            we
            obtain an independent appraisal from a helicopter valuation company of
            the
            estimated fair value of the aircraft at the beginning and end of the
            lease term.
            These appraisals involve the use of estimates on current and future condition
            of, and demand for, the particular aircraft type. Different valuation
            companies
            may calculate different appraisal values for the same aircraft based
            on
            different assumptions used. The third criteria that is evaluated is whether
            the
            lease term is greater than or equal to 75% of the economic life of the
            leased
            aircraft. The use of different estimates of fair market value and the
            economic
            life of the aircraft could result in different lease classification.
            The
            appraised value of our fleet of leased aircraft as at April 30,
            2005 was
            approximately $569.3 million and $584.0 million at April 30,
            2004
            (both amounts unaudited).
  Certain
            of our
            operating leases have junior loans, deferred payments and loans receivable
            due
            from the lessors. Under these lease agreements, when the aircraft are
            sold by
            the lessors at the end of the lease terms, if the proceeds received are
            greater
            than the unamortized amount under the lease of the aircraft at that time,
            these
            amounts may be fully recoverable, otherwise the loans and deferred payments
            would not be recoverable. As at April 30, 2005 no allowance has
            been
            recorded on these loans and deferred payments as we currently believe
            that the
            aircraft will realize a value upon sale at the end of the lease sufficient
            to
            recover these amounts.
  (g)
                  Consolidation
                      of variable interest entities
  Under
            Canadian
            Accounting Guideline 15 (“AcG-15”), we are required to assess the variability of
            outcomes under each entity that is considered a VIE to determine whether
            we are
            the primary beneficiary of the VIE and would thus be required to consolidate
            the
            VIE. In performing this assessment, we are required to make a number
            of
            estimates including the range of possible asset values at the end of
            the lease
            term. In addition to developing a range of possible outcomes, we are
            required to
            assign a probability to each potential outcome. These estimates can
            significantly impact whether a particular VIE is required to be consolidated
            by
            us.
  **NEW
            ACCOUNTING STANDARDS**
  Effective
            May 1, 2004, we prospectively adopted Canadian Accounting Guideline 13
            (“AcG-13”) with respect to hedging relationships as it relates to the
            identification, designation, documentation and effectiveness of hedging
            relationships for the purpose of applying hedge accounting.
  We
            also adopted at
            May 1, 2004, the Canadian Emerging Issues Committee Abstract 128
            (“EIC-128”). Under EIC-128, if a derivative financial instrument is not part of
            a qualifying hedging relationship, we are required to record such instrument
            on
            the balance sheet at fair value, with changes in fair value recognized
            in
            current earnings. We did not apply AcG-13 or EIC-128 retroactively.
  During
            our 2005
            fiscal year, the CICA issued new accounting standards relating to the
            recognition and measurement of financial instruments, hedges, and comprehensive
            income. These accounting standards are substantially harmonized with
            U.S. GAAP
            and will be effective for our 2008 fiscal year. We are currently assessing
            the
            impact of these new recommendations on our financial
            statements.
  76
 
 **PRINCIPAL
            DIFFERENCES BETWEEN CANADIAN GAAP AND U.S. GAAP**
  The
            consolidated
            financial statements have been prepared in accordance with Canadian GAAP,
            which
            differs in certain respects from U.S. GAAP. Under U.S. GAAP, net earnings
            for
            the years ended April 30, 2005 and 2004 were $55.1 million
            and
            $45.8 million, respectively, compared to net earnings of $62.6 million
            and $63.7 million, respectively, under Canadian GAAP. These differences
            result primarily from the differing accounting treatments for net investment
            hedges and related debt revaluation, as well as pre-operating expenses.
            A
            description of the significant differences applicable to us and a reconciliation
            of Canadian GAAP to U.S. GAAP are set out in Note 34 to our fiscal 2005
            audited consolidated financial statements.
  **SUMMARY
            FINANCIAL DATA - U.S. DOLLARS**
  Certain
            summary
            financial data from our fiscal 2005 audited Canadian GAAP consolidated
            financial statements, as detailed below, has been translated into U.S.
            dollars.
            This translation is included solely as supplemental information for the
            convenience of the reader. The data has been translated as the exchange
            rate at
            April 30, 2005 of $1.2569 = U.S.$1.00.
  **Financial
            Highlights**
  Year
                      ended
                      April 30, (in millions of U.S. dollars, except per share
                      amounts)
                  
                  **2005**
                  
                  2004Revenue
                  
                  **$**
                  **718.7**
                  
                  $
                  572.8Operating
                      income
                  
                  
                  **104.5**
                  
                  
                  75.1Net
                      earnings
                      from continuing operations
                  
                  
                  **58.5**
                  
                  
                  52.7Net
                      loss from
                      discontinued operations
                  
                  
                  **(8.8**
                  **)**
                  
                  (2.0
                  )Net
                      earnings
                  
                  
                  **49.7**
                  
                  
                  50.7Cash
                      flow
                      from operations
                  
                  
                  **110.0**
                  
                  
                  72.1**Per
                      Share Information**BasicNet
                      earnings
                      from continuing operations
                  
                  **$**
                  **1.39**
                  
                  $
                  1.27Net
                      loss from
                      discontinued operations
                  
                  
                  **(0.20**
                  **)**
                  
                  (0.05
                  )Net
                      earnings
                  
                  
                  **1.19**
                  
                  
                  1.22DilutedNet
                      earnings
                      from continuing operations
                  
                  **$**
                  **1.28**
                  
                  $
                  1.17Net
                      loss from
                      discontinued operations
                  
                  
                  **(0.19**
                  **)**
                  
                  (0.05
                  )Net
                      earnings
                  
                  
                  **1.09**
                  
                  
                  1.12
  **DISCLOSURE
            CONTROLS AND PROCEDURES**
  Our
            management is
            responsible for establishing and maintaining our disclosure controls
            and
            procedures to ensure that information used internally and disclosed externally
            is complete and reliable. Our Chief Executive Officer and Chief Financial
            Officer have evaluated the effectiveness of our disclosure controls and
            procedures and have concluded that they are adequate and effective as
            of the end
            of the fiscal year ended April 30, 2005.
  77
  ITEM
                        6.
                    DIRECTORS,
                        SENIOR MANAGEMENT AND EMPLOYEES
 **DIRECTORS
            AND SENIOR MANAGEMENT**
  **Board
            of
            Directors - Nominees**
  The
            table and notes
            below set out the name of each person proposed to be nominated for election
            as a
            director, the age of the nominee, the province/state and country of residence,
            the period or periods during which the nominee has served as a director
            of the
            Corporation, the nominee’s principal occupation, business or employment and all
            other positions with the Corporation and any affiliates thereof now held
            by the
            nominee, if any, and the number of Class A Subordinate Voting
            Shares,
            Class B Multiple Voting Shares, Ordinary Shares, Class A
            Stock
            Options, and Share Appreciation Rights (“SAR’s”) beneficially owned by each
            nominee or over which the nominee exercises control or direction. All of the
            nominees currently
            serve as
            directors of the Corporation. Each director is elected until the next
            annual
            meeting. No directors have service contracts providing for benefits on
            expiration of term.
  **Sylvain
                      Allard, M.B.A.**,
                      47,
                  Director
                      since November 2004. Resident of British Columbia, Canada.
                      Mr. Allard
                      is the President and Chief Executive Officer of the Corporation.
                      He has
                      been President for six years and was appointed Chief Executive
                      Officer in
                      November 2004. Mr. Allard started with the Corporation
                      as a
                      helicopter pilot in Eastern Canada in 1982. He earned a Masters
                      of
                      Business Administration degree (Gold Medalist) from Concordia
                      University,
                      Montreal, and has held several key positions in the Corporation,
                      including
                      President of Viking Helicopters Ltd., Canadian Helicopters
                      (Eastern) and
                      CHC Helicopters International.
  **Donald
                      Carty**,****O.C.,****59,
                  Director
                      since November 2004. Resident of Texas, United States of
                      America.****Mr. Cartyserved
                      as
                      Chairman and Chief Executive Officer of AMR Corporation from
                      1998 to 2003.
                      He served as President and CEO of CP Air in Canada from 1985-1987
                      and
                      spent several years in various management positions with Celanese
                      Canada,
                      Ltd., Air Canada, and the Canadian Pacific Railway. Mr. Carty
                      is a
                      graduate of Queen's University in Kingston, Ontario, and of
                      the Harvard
                      Graduate School of Business Administration. Mr. Carty
                      was appointed
                      as an officer of the Order of Canada in 2002. He is a director
                      of Dell
                      Inc., Sears Holdings Corporation, Placer Dome Inc., Hawaiian
                      Holdings Inc.
                      and Solutions Inc.
  **Craig
                      L. Dobbin**,****O.C.,
                      69,
                  Director
                      since 1987. Resident of British Columbia, Canada. Mr. Dobbin
                      has
                      served as Chairman of the Board since June 1987 and was Chief
                      Executive
                      Officer from June 1987 until December 1, 1994 and from
                      April 30,
                      1998 to November 2004. He is currently Executive Chairman of
                      the
                      Corporation. Mr. Dobbin is the founder of the privately-held
                      helicopter companies that formed the basis for the creation
                      of CHC in
                      1987. Mr. Dobbin was appointed as an officer of the
                      Order of Canada
                      in 1992 and has been awarded Honorary Doctorate degrees from
                      Saint Mary’s
                      University, Memorial University of Newfoundland and the National
                      University of Ireland. Mr. Dobbin is also a member of
                      the Board of
                      Directors of Newfoundland Capital Corporation
                      Limited.
  **Craig
                      C. Dobbin**,
                      40,
                  Director
                      since 1998. Resident of Newfoundland and Labrador, Canada.
                      Craig C. Dobbin
                      is the son of Craig L. Dobbin. From 1999 to January 2002, he
                      was Director
                      of Marketing with CHC Composites Ltd. From 1995 to 1999, he
                      was the
                      President of Seaforest Plantation Co. Ltd., a cod aquaculture
                      company.
                      Since 1996, he has been General Manager of Canadian Northern
                      Outfitters,
                      an executive wilderness retreat. From 1991 to 1993, he was
                      employed as the
                      marketing director for GPA Helicopters Limited (a division
                      of CHC) and
                      from 1993 to 1995 he was Manager of Corporate Planning for
                      Air Atlantic and subsequently served on the Board of
                      Directors of Air
                      Atlantic (1995) Limited. From January 2002 until March 2003,
                      he was a
                      Vice-President of CHC Helicopter
                      Corporation.
  78
 
 **George
                      N. Gillett Jr.**,
                      67,
                  Director
                      since October 2004. He is a resident of Colorado, United States
                      of
                      America. Since 1996 Mr. Gillett has been Chairman of
                      Booth Creek
                      Management Corporation, based in Vail, Colorado, a diversified
                      company
                      with interests in the recreational, fresh and processed protein
                      products,
                      automotive and transportation, and landscape and garden industries.
                      Mr. Gillett is Chairman of Swift & Company, the Montreal
                      Canadiens hockey club, Booth Creek Ski Holdings, and BC Natural
                      Foods. He
                      is also a director of Vail Banks Inc. and is a member of the
                      Board of
                      Governors of the National Hockey
                      League.
  **John
                      J. Kelly**,
                      B.E.,
                      Ph.D., 70,
                  Director
                      since 1999. Resident of Ireland. He holds both a Bachelor of
                      Engineering
                      and a Ph.D. degree from University College, Dublin. On graduation,
                      he
                      worked for a number of years in the petroleum industry in the
                      U.K. and in
                      Ireland, after which he was appointed to the staff of the School
                      of
                      Engineering in University College, Dublin, where he served
                      as Dean of
                      Engineering, from 1979 to 1986, from 1986 to 1994 as Registrar/Senior
                      Vice-President of the University and since 1994 as Professor
                      of Chemical
                      Engineering at the University. He was a Fulbright Scholar to
                      the
                      University of Maryland, where he was visiting Professor in
                      its School of
                      Engineering. He was the director of the Fulbright Scholarship
                      Program
                      between Ireland and the United States from 1996 to 2000, and
                      acts as
                      Executive Director of the Ireland Canada University
                      Foundation.
  **Jack
                      M. Mintz**,
                      B.A., M.A.,
                      Ph.D, 54,
                  Director
                      since 2004. Resident of Ontario, Canada. Since 1999 he has
                      been the
                      President and Chief Executive Officer of the C.D. Howe Institute,
                      an
                      independent policy think-tank. He is also Deloitte & Touche Professor
                      of Taxation at the Joseph L. Rotman School of Management and
                      co-director
                      of the International Tax Program, Institute of International
                      Business,
                      both at the University of Toronto. He has published more than
                      180 books
                      and articles in the fields of public economics and fiscal federalism.
                      He
                      has consulted widely with the World Bank, the International
                      Monetary Fund,
                      the Organization for Economic Co-operation and Development
                      and various
                      governments, businesses and nonprofit organizations. He serves
                      as a
                      director of Brascan Corporation, Imperial Oil Limited, Ontario
                      Financing
                      Authority, the Royal Ontario Museum Foundation and the National
                      Statistics
                      Council.
  **Sir
                      Bob Reid**,
                      71,
                  Director
                      since 2004. Resident of the United Kingdom. He joined Shell
                      International
                      Petroleum Company in 1956 and spent much of his career overseas,
                      including
                      posts in Brunei, Nigeria, Thailand and Australia. He served
                      as Chairman
                      and Chief Executive of Shell UK from 1985 to 1990. He has served
                      as
                      Chairman of the British Railways Board, London Electricity,
                      British-Borneo
                      Oil and Gas plc, The Council of the Industrial Society and
                      Sears plc. From
                      1997 to 2004 he served as Deputy Governor of the Bank of Scotland.
                      He has
                      been Chairman of the Petroleum Exchange of London since 1999.
                      He served as
                      Chairman of Avis Europe from 2002 to 2004 and as a non-executive
                      director
                      for Sun Life Financial Services of Canada until 2004. He also
                      serves as a
                      non-executive director for Intercontinental Exchange Service
                      Inc., The
                      Merchants Trust and Siemens, plc.
  **Guylaine
                      Saucier**,
                      C.M.,
                      F.C.A., 59,
                  Director
                      since 2005. Resident of Quebec, Canada. Ms. Saucier is a Fellow
                      of the
                      Institute of Chartered Accountants. She was Chair of the Joint
                      Committee
                      on Corporate Governance established in 2000 by the Canadian
                      Institute of
                      Chartered Accountants, the Canadian Venture Exchange and the
                      Toronto Stock
                      Exchange. She was Chair of the Canadian Institute of Chartered
                      Accountants
                      from June 1999 to June 2000 and was Chairman of the Board of
                      the Canadian
                      Broadcasting Corporation from April 1995 to December 2000.
                      In 1989 she was
                      appointed as a member of the Order of Canada. Ms. Saucier is
                      currently a
                      member of the board of directors of several Canadian Corporations
                      including Petro Canada Inc. and the Bank of
                      Montreal.
  79
  **William
                      W. Stinson**,
                      71,
                  Director
                      since 2003. Resident of Ontario, Canada. He is President and
                      Chairman of
                      the Board of Trustees of Westshore Terminals Income Fund which
                      operates a
                      bulk terminal facility. He is also a director of Grant Forest
                      Products and
                      Fording Inc. From 2003 to 2005, he was Chairman of the Board
                      of Sun Life
                      Financial, a worldwide insurer and wealth management company.
                      He was a
                      director of Sun Life since 1985. Mr. Stinson spent most
                      of his career
                      with Canadian Pacific Ltd., a diversified transportation and
                      industrial
                      company, where he was Chief Executive Officer for eleven years
                      and
                      Chairman and Chief Executive Officer for six years before
                      retiring in
                      1996.
  **Officers
            of
            the Corporation**
  The
            table and notes
            below set out the name of each person that currently serves as an officer
            of the
            Corporation including the age of the officer, the province/state and
            country of
            residence, the position of the officer with the Corporation.
  **Sylvain
                      Allard, M.B.A.**,
                      47,
                  See*“Board
                      of
                      Directors- Nominees.”*
  **Rick
                      Davis, C.A.,**43,
                  Resident
                      of British Columbia, Canada.****Mr. Davis
                      began as the Vice-President, Internal Audit of the Corporation
                      and in
                      September 2004, was appointed as Vice-President, Financial
                      Reporting.Prior
                      to his
                      employment with the Corporation, he was the Corporate Controller
                      for
                      Vector Aerospace Corporation, a publicly traded aerospace maintenance,
                      repair and overhaul service provider.
  **Craig
                      L. Dobbin, O.C**.,
                      69,
                  See*“Board
                      of
                      Directors- Nominees.”*
  **Blake
                      Fizzard, C.A.**,
                      41,
                  Resident
                      of
                      British Columbia, Canada. Mr. Fizzard began as the Director
                      of Taxation of
                      the Corporation and in March 2001, was appointed Vice-President,
                      Financial
                      Structuring. Prior to his employment with the Corporation,
                      he was member
                      of the tax and audit departments at Deloitte & Touche LLP and served
                      as an Assistant Vice-President of International Advisory Services
                      in
                      Hamilton, Bermuda. Mr. Fizzard received a Bachelor of Commerce
                      degree from
                      Memorial University of Newfoundland in 1986 and became a chartered
                      accountant in 1988.
  **Rick
                      Green, C.G.A**,
                      48
                  Resident
                      of
                      British Columbia, Canada. Mr. Green has been employed by us
                      for the past
                      19 years. He began as the Chief Accountant with a predecessor
                      company,
                      Sealand Helicopters Limited, and moved through increasingly
                      responsible
                      positions within the Corporation. In 1988, he was named the
                      Assistant
                      Corporate Controller. In 1993, he moved into an Internal Audit
                      function
                      until 1995 when he was appointed as Vice-President, Finance
                      in our
                      International division. He remained in this position until
                      2000 when he
                      was appointed as Vice-President, Planning and Control. In May
                      2003, he
                      assumed the role of Vice-President, Global Systems and
                      Solutions
  **John
                      Hanbury, C.M.A**,
                      48,
                  Resident
                      of
                      British Columbia, Canada. Mr. Hanbury was appointed as Corporate
                      Treasurer
                      of the Corporation in July 2005. Prior to his employment with
                      the
                      Corporation, he was the Treasurer of a major company operating
                      in the
                      forestry sector of British Columbia. Mr. Hanbury has a Bachelor
                      of
                      Commerce degree from the University of British
                      Columbia.
  80
 
 **Martin
                      Lockyer, LLB**,
                      45,
                  Resident
                      of
                      British Columbia, Canada. Mr. Lockyer is the Vice-President,
                      Legal
                      Services and Corporate Secretary of the Corporation. Prior
                      to his
                      employment with the Corporation, he was a partner of a major
                      Atlantic
                      Canada law firm and was outside counsel to the Corporation.
                      His practice
                      included corporate and commercial transactions and securities
                      matters. He
                      is former Vice-Chairman of a Canadian airport authority. Mr.
                      Lockyer has
                      an honours degree in Commerce from Memorial University of Newfoundland
                      and
                      a law degree from Osgoode Hall Law School.
  **Christopher
                      McDowell, M.B.A**,
                      36,
                  Resident
                      of
                      British Columbia, Canada. Mr. McDowell was appointed as Vice-
                      President of
                      Mergers and Acquisitions of the Corporation in April 2005.
                      Prior to
                      joining the Corporation, Mr. McDowell was the Director, Corporate
                      and
                      Business Development at Ballard Power Systems. Prior to Ballard,
                      he worked
                      in a number of capacities at PepsiCo and Safeway Inc. He earned
                      his
                      Masters of Business Administration from Purdue University.
  **Mark
                      Stock, MIR**,
                      33,
                  Resident
                      of
                      British Columbia, Canada. Mr. Stock is the Vice-President,
                      Human Resources
                      of the Corporation. Prior to his employment with the Corporation,
                      he was
                      the Vice-President, Human Resources and Information Technology
                      at
                      TimberWest Forest Corporation. He has also previously held
                      senior Human
                      Resources positions at Business Objects, BFGoodrich Aerospace,
                      and CN
                      Rail. He is currently the Vice-Chairman of Vancouver Community
                      College and
                      has an honours degree in Commerce and a Masters of Industrial
                      Relations
                      degree from Queen’s University.
  **Jo
                      Mark Zurel, C.A.**,
                      41,
                  Resident
                      of
                      British Columbia, Canada. Mr. Zurel joined the Corporation
                      in 1994 as
                      Corporate Controller and was appointed to the position of Senior
                      Vice
                      President and Chief Financial Officer in April 1998. Before
                      joining the
                      Corporation, he was a Senior Manager with Grant Thornton (formerly
                      Doane
                      Raymond) in Halifax, Nova Scotia. Mr. Zurel earned a Bachelor
                      of Commerce
                      degree from the University of Dalhousie in Halifax, Nova Scotia.
  No
            director or
            member of senior management of the Corporation was appointed pursuant
            to an
            arrangement with major shareholders, customers, suppliers etc.
  **Continuing
                          Director**
                      **Director
                          Since**
                      **Class
                          A Shares**
                      **Class
                          B Shares**
                      **Ordinary
                          Shares**
                      **Class
                          A Shares**
                        **Under
                          Options**
                      **Share
                          Appreciation Rights****Vested**
                      **Unvested**Sylvain
                          Allard
                      2004
                      278,468
                      —
                      —
                      443,932
                      —
                      —Donald
                          Carty
                      2004
                      20,000
                      —
                      —
                      —
                      
                      110,000Craig
                          L.
                          Dobbin, O.C.
                      1987
                      2,513,230
                          *(i)*
                      5,555,432
                          *(i)*
                      22,000,000
                          *(ii)*
                      2,053,912
                      —
                      —Craig
                          C.
                          Dobbin
                      1998
                      —
                      —
                      —
                      60,000
                      —
                      —George
                          N.
                          Gillett Jr.
                      2004
                      —
                      —
                      —
                      —
                      36,666
                      73,334Professor
                          John J. Kelly, B.E., Ph.D.
                      1999
                      6,280
                      —
                      —
                      —
                      80,000
                      —Jack
                          M.
                          Mintz, B.A., M.A., Ph.D
                      2004
                      200
                      —
                      —
                      —
                      36,666
                      73,334Sir
                          Bob
                          Reid
                      2004
                      —
                      —
                      —
                      —
                      36,666
                      73,334Guylaine
                          Saucier, C.M. F.C.A
                      2005
                      —
                      —
                      —
                      —
                      —
                      110,000William
                          W.
                          Stinson
                      2003
                      10,000
                      —
                      —
                      —
                      36,666
                      73,334
 (i)
                  These
                      shares
                      are held by Discovery Helicopters Inc., a holding company,
                      all of the
                      voting shares of which are owned by Craig L. Dobbin. See “Share
                      Ownership”.
 
 81
  (ii)
                  These
                      shares
                      are held by O.S. Holdings, a holding company wholly owned indirectly
                      by
                      Craig L. Dobbin, Chairman and Chief Executive Officer of the
                      Corporation.
                      See ”Share Ownership”.
 
 Directors’
            Meeting
  The
            Board and its
            committees met as follows during the year ended April 30,
            2005:
  **Regular**
                  **Telephone**
                  **Total**Board
                  4
                  1
                  5Audit
                  5
                  3
                  8Corporate
                      Governance, Compensation and Nominating
                  2
                  -
                  2Pension
                  1
                  -
                  1**Total**
                  **12**
                  **4**
                  **16**
  82
 
 The
            following is
            the record of attendance for each director at Board and committee meetings
            for
            the year ending April 30, 2005. The overall attendance record
            at Board and
            committee meetings was 93%.
  Name
                      of Director
                  Board
                  CommitteeSylvain
                      Allard
                  3
                      of 3
                  N/ADonald
                      Carty
                  2
                      of 2
                  1
                      of 1Craig
                      L. Dobbin
                  5
                      of 5
                  N/ACraig
                      C. Dobbin
                  4
                      of 5
                  1
                      of 1George
                      N. Gillett Jr.
                  2
                      of 2
                  1
                      of 1Professor
                      John J. Kelly
                  5
                      of 5
                  9
                      of 9Jack
                      M. Mintz
                  4
                      of 5
                  7
                      of 8Sir
                      Bob Reid
                  4
                      of 5
                  8
                      of 9Guylaine
                      Saucier*(i)*
                  N/A
                  N/AWilliam
                      W. Stinson
                  5
                      of 5
                  10
                      of 10Total
                  34
                      of 37
                  37
                      of 39Overall
                      Attendance
                  92%
                  95%
  (i)
                  Mme
                      Saucier
                      was elected as a director on March 28, 2005. No board
                      or committee
                      meetings were held between that date and April 30,
                      2005.
 
 Additional
            Disclosure Relating to Directors
  To
            the knowledge of
            the Corporation, no director of the Corporation is, or has been in the
            last ten
            years, a director or executive officer of an issuer that, while that
            person was
            acting in that capacity, (a) was the subject of a cease trade
            order or
            similar order or an order that denied the issuer access to any exemptions
            under
            Canadian securities legislation, for a period of more than 30 consecutive
            days,
            (b) was subject to an event that resulted, after that person ceased
            to be a
            director or executive officer, in the issuer being the subject of a cease
            trade
            or similar order or an order that denied the issuer access to any exemption
            under Canadian securities legislation, for a period of more than 30 consecutive
            days, or (c)  within a year of that person ceasing to act in that
            capacity,
            became bankrupt, made a proposal under any legislation relating to bankruptcy
            or
            insolvency or was subject to or instituted any proceedings, arrangement
            or
            compromise with creditors or had a receiver, receiver manager or trustee
            appointed to hold its assets except for Guylaine Saucier, a director
            of the
            Corporation, who was a director of Nortel Networks Corporation, which
            was
            subject to a temporary cease trade order dated May 17, 2004 and
            a final
            cease trade order dated May 31, 2004, each issued by the Ontario
            Securities
            Commission (the “OSC”) as a result of Nortel Networks Corporation’s failure to
            file financial statements. The final cease trade order was revoked by
            the OSC on
            June 21, 2005.
  **STANDING
            BOARD COMMITTEES**
  The
            Board has three
            standing committees, the Audit Committee, the Corporate Governance, Compensation
            and Nominating Committee and the Pension Committee. Each committee has
            a written
            mandate and reviews its mandate annually. Both the Audit Committee and
            the
            Corporate Governance, Compensation and Nominating Committee are entirely
            composed of independent and unrelated directors.
  **REPORT
            OF
            THE CORPORATE GOVERNANCE, COMPENSATION AND NOMINATING
            COMMITTEE**
  Statement of Corporate
            Governance Practices
  We
            recognize the
            importance of adhering to superior corporate governance standards. We
            have
            developed sound corporate governance policies and procedures, which are
            monitored and reviewed on a continuous basis, and adopts a ‘‘best practices’’
            approach in all of its corporate governance initiatives. The Corporate
            Governance, Compensation and Nominating Committee is responsible for
            monitoring
            the development of, and compliance with, corporate governance policies
            and
            procedures.
  83
 
 For
            the purposes of
            our NYSE listing, we are considered a “foreign private issuer” which means that
            we are not required to comply with most of the NYSE’s corporate governance
            listing standards. Under NYSE rules, we are required to disclose any
            significant
            ways in which our corporate governance practices differ from those followed
            by
            U.S. domestic companies under the NYSE’s listing standards. We believe that
            there are no significant differences between our corporate governance
            practices
            and those required to be followed by U.S. domestic issuers under the
            NYSE
            listing standards except that we comply with the TSX rules to obtain
            shareholder
            approval of share compensation arrangements that involve a new issue
            of shares.
            Unlike the NYSE rules, the TSX rules do not require shareholder approval
            for
            compensation arrangements involving share purchases in the open market
            at fair
            value. This disclosure can be accessed at www.chc.ca .
  A
            copy of our
            Statement of Corporate Governance Guidelines is available on our website
            at www.chc.ca and in print from
            us upon request.
  Submitted
            by the
            Corporate Governance, Compensation and Nominating Committee:
  ·
                  Sir
                      Bob Reid
                      (Chair)
 ·
                  William
                      Stinson
 ·
                  George
                      Gillett
  **Report
            of
            the Audit Committee**
  The
            Audit Committee
            oversees the financial reporting process on behalf of the Board of Directors.
            In
            order to carry out this responsibility, the Audit Committee, which
            consists entirely of “unrelated” and “independent” directors, meets quarterly to
            review the Corporation's financial statements and recommends their approval
            to
            the Board of Directors. The Audit Committee also reviews, on a continuing
            basis,
            any reports prepared by the Corporation's external auditors relating
            to the
            Corporation's accounting policies and procedures, as well as its internal
            controls. Financial information prepared for securities commissions and
            similar
            regulatory bodies is also examined by the Audit Committee before filing.
            The Audit Committee
            meets
            independently with management and the external and internal auditors
            to review
            the involvement of each in the financial reporting process. These meetings
            are
            designed to facilitate any private communication with the Audit Committee which
            may be desired by any party. The Audit Committee recommends the appointment
            and
            remuneration of the Corporation's external auditors, who are elected
            annually by
            the Corporation's shareholders. During
            the year
            ended April 30, 2005, the Audit Committee met eight times.
  In
            carrying out
            their responsibilities, the Audit Committee has:
  ·
                  met
                      with
                      management and the external auditors to review and discuss
                      the
                      April 30, 2005 consolidated financial
                      statements;
  ·
                  discussed
                      with the external auditors the matters required by Canadian
                      regulators in
                      accordance with Section 5751 of the General Assurance and Auditing
                      Standards of the Canadian Institute of Chartered Accountants
                      “Communications with Those Having Oversight Responsibility for
                      the
                      Financial Reporting Process” and by U.S. regulators in accordance with the
                      Statement on Auditing Standards No. 61 “Communication with Audit
                      Committee” issued by the American Institute of Certified Public
                      Accountants;
  ·
                  received
                      written disclosures from the independent auditors required
                      by the U.S.
                      Securities and Exchange Commission in accordance with the requirements
                      of
                      the Independence Standards Board;
                      and
  ·
                  discussed
                      with the external auditors that firm’s
                      independence.
  Submitted
            by the
            Audit Committee:
  ·
                  Dr.
                      Jack
                      Mintz, Chair
 ·
                  William
                      Stinson
 ·
                  Donald
                      Carty
 ·
                  Guylaine
                      Saucier
  84
 
 **Report** **on
            Executive Compensation**
  The
            Corporate
            Governance, Compensation and Nominating Committee has, as a part of its
            mandate,
            responsibility for determining the remuneration of the Corporation’s executive officers ,
            which, throughout
            this report, includes the Named Executive Officers , including
            establishing compensation terms and conditions, and the extent and level
            of
            participation in incentive programs. Prior to 2004 these functions were
            performed by the Compensation Committee. The Corporate Governance, Compensation
            and Nominating Committee also targets and evaluates the performance of executive officers, monitors
            succession planning and reviews the design and competitiveness of incentive
            compensation programs with the assistance of external professional advisors,
            who
            are responsible for gathering information on the policies in effect at
            companies
            that are comparable to the Corporation.
  Composition
            of the
            Corporate Governance, Compensation and Nominating Committee
  None
            of the members
            of the Corporate Governance, Compensation and Nominating Committee is,
            or has
            been an officer or an employee of the Corporation or any of our subsidiaries.
            The Corporate Governance, Compensation and Nominating Committee generally
            meet
            twice annually to discuss compensation matters, and more often if
            necessary.
  The
            Corporation's Compensation Policy
  The
            Corporation's
            compensation philosophy for executives continues to follow three underlying
            principles:
  (i)
                  to
                      provide a
                      compensation program that motivatesexecutiveofficersto achieve
                      their strategic goals;
 (ii)
                  to
                      be
                      competitive with other leading North American and global companies
                      so as
                      to attract and retain talented executives;
                      and
 (iii)
                  to
                      align the
                      interests of itsexecutiveofficers
                      with the long-term interests of the Corporation's shareholders
                      through
                      stock-related programs.
 
 The
            remuneration of
            the executive officers of the Corporation
            consists of three components: base salary, an annual incentive bonus
            program,
            and long-term incentive programs which are stock-based. In 2005 total
            base
            salary for the Named Executive Officers was $2,101,000 and compensation
            under
            the annual incentive bonus programs was $6,485,166, representing 309%
            of base
            salary (369% for the Executive Chairman). The relative proportion of
            compensation from base salary and annual incentive bonus programs may
            vary from
            year to year as compensation from the annual incentive bonus program
            can vary
            depending on the performance of the Corporation.
  The
            Corporation's
            pay policy is to offer to its executive
            officers ,
            subject to
            performance, total
            compensation
            at or above the 75 th percentile of
            compensation paid by companies within a broad comparator group of
            publicly-traded
            Canadian and U.S. corporations of similar magnitude and scope, including,
            but
            not limited to, other oil and gas services and aerospace companies and
            to
            provide additional performance based compensation where expectations
            have been exceeded .
            The comparator
            group is reviewed periodically by the Corporation’s independent compensation
            consultant to ensure it remains relevant for use by the
            Corporation.
  Base
            salaries of
            the CEO and the other Named
            Executive
            Officers of the Corporation
            are established between the median or average of salary levels of executive
            positions of similar magnitude, scope and complexity in comparable Canadian
            and
            U.S. companies, taking into account the individual executive's responsibilities,
            experience, contribution and performance and are established in conjunction
            with
            independent compensation consultants .
  The
            annual
            incentive bonus and long-term incentive programs of the Corporation are
            designed
            to reward individual performance and overall corporate performance and
            to align
            the economic interests of the officers and executives with those of the
            shareholders of the Corporation.
  85
 
 *Annual
              Incentives*
 The
            annual bonus
            plan of the Corporation rewards the CEO and other Named
            Executive
            Officers for the
            achievement by the Corporation of financial performance goals and, in
            some
            cases, individual objectives. Performance goals are set at the beginning
            of each
            year based on pre-determined financial targets approved by the Board
            of
            Directors.
  *Operations*
  Subsequent
            to 2005, upon the recommendation of the Corporate Governance,
            Compensation
            and Nominating Committee (following an independent review), the Board
            of
            Directors adopted a Short Term Incentive Plan (“STIP”) for senior management
            including the Named Executive Officers. The purpose of the STIP is to
            reward the
            plan participants based on the annual performance of the Corporation.
            Participants receive a bonus based upon the Corporation’s return on capital
            employed (“ROCE”) for the fiscal year as measured against a budgeted target,
            with target and maximum bonuses based upon a percentage of base
            salary. For the Named
            Executive Officers and other plan participants who are not part of divisional
            management, 90% of budgeted ROCE must be achieved for any bonus to be
            paid,
            while maximum bonus is payable when actual ROCE is equal to or greater
            than 100%
            of budgeted ROCE.
  During
            fiscal 2001,
            upon the recommendation of the Compensation Committee (following an independent
            review) the Board adopted a Total Shareholder Return bonus plan (the
            "TSR Plan")
            for the CEO, and the other Named Executive Officers of the Corporation.
            This
            plan was designed to provide a mechanism that closely aligns management
            incentives with shareholder interests, and to emphasize the creation
            and
            enhancement of shareholder value. The TSR Plan sets a minimum threshold
            of 12.5%
            of the opening shareholders' equity for each fiscal year, which return
            is then
            notionally deducted from net earnings for the fiscal year so that no
            TSR bonus
            is paid unless this minimum return has been achieved for shareholders;
            the TSR
            Plan bonus is equal to 10% of net earnings for the completed fiscal year
            in
            excess of the minimum 12.5% return on opening shareholders' equity. In
            respect
            of fiscal 2005, the total TSR Plan bonus was $3,324,000. The TSR Plan
            bonuses
            are allocated to the Named Executive Officers on the basis of a percentage
            based
            on seniority. The percentage of the total TSR Plan bonuses allocated
            to the
            Executive Chairman is 50%, the CEO is 30% and the CFO 20%.
  The
            Corporation has
            discontinued its annual corporate economic value added bonus plan (the
“CEVA
            Plan”) and the CEVA plan was not applicable for Fiscal 2005. There were no
            bonuses paid or payable to the Named Executive Officers under the CEVA
            Plan with
            respect to the 2005 fiscal year.
  *Long
            Term
            Incentive Plan*
  Upon
            recommendation
            of the Corporate Governance, Compensation and Nominating Committee (following
            an
            independent review), the Board of Directors has adopted a Long Term Incentive
            Plan (“LTIP”) effective for fiscal 2006 and beyond for senior management
            including the Named Executive Officers. The LTIP is designed to reward
            the plan
            participants based upon longer term performance of the corporation. Each
            participant is given a number of Performance Stock Units (“PSU’s”) calculated by
            dividing the average closing price of the Class A Subordinate
            Voting Shares
            on the TSX on the five trading days preceding the grant date by the target
            percentage of his/her annual salary. The PSUs vest and are redeemed on
            the third
            anniversary of the grant date at a price equal to the average closing
            price of
            the Class A Subordinate Voting Shares on the TSX on the five trading
            days
            preceding the date of vesting. The factor may range from 0 to 2 depending
            upon
            whether the target return on equity is exceeded or not met.
  *Corporate
            Development*
  The
            Corporate
            Governance, Compensation and Nominating Committee may deem certain extraordinary
            circumstances worthy of special recognition where significant benefits
            have
            accrued to the Corporation. In fiscal 2005 Corporate Development bonuses
            of
            $750,000 were payable to the Named Executive Officers in connection with
            certain
            targets being met in respect of the Schreiner Aviation Group. In fiscal
            2004
            Corporate Development bonuses of $250,000 were payable to the Named Executive
            Officers in connection with the completion of the acquisition of the
            Schreiner
            Aviation Group.
  86
 
 *Stock
            Option
            Plan*
  The
            Employee Share
            Option Plan is intended to serve as a long-term incentive plan that will
            align
            the interests of management with the interests of shareholders. Options
            do not
            generally vest fully on the date of grant, with the vesting period determined
            by
            the Board of Directors. When granting options, the Corporate Governance,
            Compensation and Nominating Committee takes into account the number of
            options
            already held by a participating executive.
  The
            Corporation has
            guidelines for allocating stock options, which address the vesting period,
            concentration of options, and the maximum number of options to be granted
            per
            year. The Corporation’s policy is to expense stock options in its financial
            statements, using the fair-value method.
  *Pension
            Plans*
  The
            Corporation
            maintains a defined contribution retirement plan (the “RPP”) for senior
            executives, excluding our Executive Chairman. The Corporation contributes
            6% of
            gross earnings up to regulatory maximums on behalf of senior
            executives.
  Under
            supplementary
            retirement plan agreements, the President and Chief Executive Officer,
            Mr. Sylvain Allard, the Senior Vice-President & Chief Financial
            Officer, Mr. Jo Mark Zurel, and the former Senior Vice-President
&
            Corporate Secretary, Mr. O. Noel Clarke, may receive supplementary
            retirement benefits in addition to the retirement benefits provided under
            the
            RPP. A special retiring allowance has been provided for the Chairman
            and Chief
            Executive Officer. These benefits are described under “Executive Retirement Plan
            and Retiring Allowance”.
  The
            current members
            of the Pension Committee are Prof. Kelly (Chair), Craig C. Dobbin and
            Mme.
            Saucier.
  Submitted
            by the
            Corporate Governance, Compensation and Nominating Committee:
  ·
                  Sir
                      Bob Reid
                      (Chair)
 ·
                  William
                      Stinson
 ·
                  George
                      Gillett
  **Compensation
            of Directors**
  During
            fiscal 2005,
            the directors of the Corporation, other than those employed by the Corporation,
            were paid fees (as described below) for each Board and committee meeting
            attended and were reimbursed for their expenses arising in connection
            with such
            meetings. Effective May 1, 2002, after consideration of a report
            of an
            external independent compensation consultant and on the recommendation
            of the
            Corporate Governance, Compensation and Nominating committee, the annual
            directors fees were set at $40,000 per annum, the fee payable to Committee
            Chairs was set at $10,000 per annum and fees for attendance were set
            at $2,000
            per meeting. During 2004 the Board of Directors, with input from an independent
            compensation consultant, approved revised directors fees as follows:
            (i) an
            annual fee of $150,000 was approved for the Lead Director, effective
            October 28, 2003 (this fee is in lieu of any other board retainer
            or board
            and committee attendance fees); (ii) effective March 1,
            2004 all
            directors fees (other than the Lead Director fees) payable to Board members
            were
            changed from Canadian to U.S. currency, unless the Board member resides
            in a
            jurisdiction where the currency trades at a premium to the U.S. dollar
            (in these
            cases the director would be compensated in the local currency), and
            (iii) the annual fee payable to the Audit Committee Chair was
            increased
            from U.S. $10,000 to U.S. $25,000 to reflect the increased
            workload of
            the Audit Committee Chair. Effective October 5, 2004, the annual
            fee of the
            chair of the Corporate Governance, Compensation and Nominating Committee
            increased to U.S. $25,000 to reflect the increased work load of
            the chair
            of the committee. No options were granted to directors during fiscal
            year
            2005.
  87
 
 During
            fiscal 2001,
            the Board approved the establishment of a Stock Appreciation Rights Plan
            for
            non-management directors under which the Corporation could originally
            issue up
            to a maximum of 400,000 Stock Appreciation Rights (“SARs”). The SARs provide a
            potential payment to the recipient, which may be realized only after
            vesting of
            the SAR, equal to the increase, if any, in the market value of the Corporation’s
            Class A Subordinate Voting Shares (determined as the weighted
            average of
            trading prices for the five trading days immediately preceding the exercise
            date) over the share price or “SAR grant value” on the date of the original SAR
            grant. SARs have a maximum exercise period of ten years following the
            date of
            issuance. The SARs vested in equal amounts on the first, second and third
            anniversaries of the grant date.
  As
            a result of the
            subdivision of the Corporation’s Class A Subordinate Voting Shares during
            fiscal 2005, the Board has adjusted the grant of SARs to each director
            by
            doubling the number of SARs granted and halving the SAR grant value.
            This has
            the effect of keeping the directors whole in light of the stock
            split.
  25,000
            SARs were
            granted on October 19, 2000 to each director at the time (other
            than the
            CEO) at a grant value of $5.58, and are exercisable up to October 19,
            2010.
            Additional SARs were issued on October 19, 2000 to certain directors
            who
            did not hold any stock options, to fulfill commitments to such directors,
            at
            prices reflecting CHC’s stock price at the time such commitment was made, as
            follows: 60,000 to each of John J. Kelly and Steven K.
            Hudson at a
            grant value of $2.93 and 20,000 to Craig C. Dobbin at a grant
            value of
            $4.50. All such additional SARs expire on April 25, 2010.
  An
            additional
            25,000 SARs were granted on August 1, 2001 to each director at
            the time
            (other than the CEO) at a grant value of $8.47, exercisable up to July 31,
            2011. On October 10, 2001, upon his joining the Board of Directors
            of the
            Corporation, 110,000 SARs were granted to Mr. Mark D. Dobbin at
            a grant
            value of $7.51, exercisable up to October 9, 2011. On February 19,
            2002,
            upon his joining the Board of Directors of the Corporation, 110,000 SARs
            were
            granted to The Honourable Brian V. Tobin at a grant value of $10.25,
            exercisable up to February 18, 2012. In each case the
            SARs granted in fiscal 2002 were at a grant value equal to the closing
            price of
            the Corporation’s Class A Subordinate Voting Shares on the day immediately
            preceding such grant in accordance with the SARs Plan.
  During
            fiscal 2004,
            73,334 SARs that had not vested expired as these directors did not stand
            for
            re-election. During 2004 the Board approved the granting of 110,000 SARs
            to
            William W. Stinson at a grant value of $13.70, exercisable up
            to
            October 27, 2013. In addition, the Board approved the grant of
            110,000 SARs
            to Sir Bob Reid at a grant value of $16.50, exercisable up to
            February 12, 2014. These new SARs vest one-third each on the first,
            second
            and third anniversaries of the date of grant. The Board approved an increase
            in
            the cumulative maximum number of SARs that could be granted to Board
            members
            from 400,000 to 675,000. In each case the SARs granted in fiscal 2004
            were at a
            grant value equal to the closing price of the Corporation’s Class A
            Subordinate Voting Shares on the day immediately preceding such
            grant.
  At
            April 30,
            2004 a total of 300,000 SARs had been granted to current directors. Of
            this
            total issuance, 80,000 SARs were vested at April 30, 2004, and
            none had
            been exercised up to August 15, 2004.
  During
            fiscal 2005,
            the Board of Directors approved the granting of 110,000 SARs to each
            new
            director, Dr. Jack Mintz, Donald Carty, George Gillett Jr., and
            Guylaine
            Saucier. These SARs will vest one-third each on the first, second and
            third
            anniversaries of the date of grant. The exercise price of the SARs grant
            is
            based on the closing price of the Corporation’s Class A Subordinate Voting
            Shares on the day immediately preceding the grant.
  At
            April 30,
            2005 a total of 740,000 issued and outstanding SARs had been granted
            to current
            directors. Of this total issuance, 116,667 SARs were vested at
            April 30, 2005, and 30,000 SARs had been exercised up to July 31,
            2005.
  **Minimum
            Share Ownership**
  To
            ensure the
            interests of directors and senior management are aligned with those of
            the
            shareholders, the Corporation has a Minimum Share Ownership Guideline.
            Directors
            and senior management will be given three years to comply with
            the **** following ownership
            guidelines:
  (i)
                  directors
                      are
                      encouraged to maintain minimum share ownership in the Corporation
                      equal in
                      value to the annual board fees; and
 
 88
 
 (ii)
                  the
                      Named
                      Executive Officers are encouraged to maintain minimum share
                      ownership in
                      the Corporation equal in value to their base
                      salary.
 
 PERFORMANCE
            GRAPH
  Below
            is a line
            graph which compares (a) the yearly cumulative total shareholder return
            on the
            Corporation’s Class A Subordinate Voting Shares and Class B Multiple
            Voting Shares (being the only publicly traded equity securities of the
            Corporation) with (b) the cumulative total return of the S&P/TSX Composite
            Index (TSX 300 Index prior to May 1, 2002) and the S&P/TSX Oil and Gas
            Equipment and Services Index, for the 60 month period to April 30,
            2005.
  **COMPARISON
            OF 5-YEAR CUMULATIVE TOTAL RETURN ***
 AMONG
            CHC
            HELICOPTER CORPORATION-CLASS A & B,
 THE
            S & P/TSX
            COMPOSITE INDEX
 AND
            THE S &
            P/TSX OIL & GAS EQUIPMENT & SERVICES INDEX
 
 pg89
 For
            the 60-month
            period ended April 30, 2005 (assuming reinvestment of dividends),
            the
            cumulative total shareholder return on an investment of $100 in the Class A
            Subordinate Voting Shares of CHC would be $1,317, and for the Class B
            Multiple Voting Shares of CHC would be $1,265. The return for the same
            period
            based on an investment of $100 in the S&P/TSX Composite Index (TSX 300
            Index prior to May 1, 2002) would be $109 and, based on the same
            investment
            in the S&P/TSX Oil and Gas Index Equipment & Services, would be
            $213.
  89
 
 COMPENSATION
            TABLE
  The
            remuneration
            paid to the Executive Chairman, the President and Chief Executive Officer
            and
            the other most highly compensated executive officer (the “Named Executive
            Officers”) for each of the last three years ended April 30 is as
            follows:
  **Annual
                      compensation**
                  **Long-term
                      compensation awards securities under options/SARs
                      granted****Bonus*****(i)*****Name
                      and principal position**
                  **Year**
                  **Salary**
                    **$**
                  **Operations**
                    **$***(v)*
                  **Corporate
                      Development**
                    **$***(iv)*
                  **Other
                      annual compensation**
                    **$***(ii)*
                  **Class A
                      voting shares**
                    **#**
                  **All
                      other compensation**
                    **$***(iii)*Craig
                      L. Dobbin, O.C.
                    Executive
                      Chairman
                  2005
                    2004
                    2003
                  1,016,000*(vi)*
                    966,408*(vi)*
                    1,040,388*(vi)*
                  2,856,166
                    500,043
                    1,961,000
                  375,000
                    125,000
                    -
                  136,734
                    66,140
                    60,016
                  -
                    -
                    259,995
                  **-**
                    **-**
                    **-**Sylvain
                      A. Allard
                    President
                      & Chief Executive Officer
                  2005
                    2004
                    2003
                  650,000
                    583,333
                    550,000
                  1,807,000
                    300,026
                    877,000
                  225,000
                    75,000
                    -
                  -
                    -
                    -
                  -
                    -
                    118,750
                  16,550
                    15,500
                    14,500Jo Mark
                      Zurel
                    Senior
                      Vice-President & Chief Financial Officer
                  2005
                    2004
                    2003
                  435,000
                    365,000
                    330,000
                  1,072,000
                    200,017
                    533,000
                  150,000
                    50,000
                    -
                  -
                    -
                    -
                  -
                    -
                    47,500
                  16,500
                    15,500
                    14,500
  Notes:
 (i)
                  Bonuses
                      are
                      shown in the fiscal year to which payments
                      relate.
 (ii)
                  Other
                      compensation and personal benefits amount to less than the
                      lower of
                      $50,000 and 10% of salary and bonus for all Named Executive
                      Officers
                      except the Executive Chairman in each of the three fiscal years.
                      The
                      amounts are the imputed interest benefits on loans and vehicle
                      benefits.
                      For the Executive Chairman in fiscal 2005, the amounts for
                      the imputed
                      interest on loans is equal to $30,464 and the vehicle benefit
                      is equal to
                      $106,270.
 
 90
 
 (iii)
                  This
                      consists
                      of Corporation contributions to the RPP made on behalf of certain
                      of the
                      Named Executive Officers. Entitlements for Craig L. Dobbin
                      are described
                      under “Executive Retirement Plan and Retiring Allowance".
 (iv)
                  These
                      special
                      transaction bonuses (Corporate Development) are related to
                      the acquisition
                      of Schreiner Aviation Group. The fiscal 2004 bonuses were paid
                      in July
                      2004 in connection with the successful closing of the acquisition
                      of
                      Schreiner on February 16, 2004 and the fiscal 2005 bonuses
                      were paid
                      in August 2005 upon the attainment of certain financial targets
                      by
                      Schreiner.
 (v)
                  These
                      amounts
                      include:
 (a)
                  regular
                      performance bonus payments under the STIP, which is also used
                      as an
                      incentive for other senior managers;
                      and
 (b)
                  the
                      TSR
                      Plan.
 
 The
            breakdown for
            fiscal 2005 is:
  **STIP**
                  
                  **TSR**C.L.
                      Dobbin
                  
                  $
                  1,194,166
                  
                  $
                  1,662,000S.
                      A. Allard
                  
                  $
                  810,000
                  
                  $
                  997,000J.M.
                      Zurel
                  
                  $
                  407,000
                  
                  $
                  665,000
  (vi)
                  These
                      salary
                      amounts are denominated in U.S. dollars, but paid in Canadian
                      dollars. The
                      amounts included in the table are the Canadian dollar equivalents
                      paid.
  91
 
 **Employee
              Share Option Plan**
 The
            following table
            provides information as of April 30, 2005 regarding the number
            of
            securities to be issued upon the exercise of outstanding options and
            the
            weighted-average exercise price of the outstanding options in connection
            with
            the equity compensation plan approved by shareholders (the Employee Share
            Option
            Plan). The Corporation does not have any equity compensation plans that
            have not
            been approved by shareholders. The options below relate to the Corporations
            Class A Subordinate Voting Shares.
  **Plan
                      Category**
                  **Number
                      of securities to be issued upon exercise of outstanding
                      options**
                  **Weighted-average
                      exercise price per share of**
                    **outstanding
                      options**
                  **Number
                      of securities remaining available for future issuance under
                      equity
                      compensation plans**Employee
                      Share Option Plan
                  2,815,344
                  $         
                       7.13
                  1,044,462Equity
                      compensation plans not approved by security holders
                  -
                  -
                  -Total
                  2,815,344
                  $          
                      7.13
                  1,044,462
  **Option
            Grants During the Most Recently Completed Fiscal Year**
  No
            options were
            granted under the Employee Share Option Plan (the “Plan”) during the fiscal year
            ended April 30, 2005.
  Aggregated
            Option
            Exercises During the Most Recently Completed Fiscal Year and Fiscal Year
            End
            Stock Option Values
  The **** following
            table
            sets out the aggregate number of outstanding options held by each of
            the Named
            Executive Officers who held options at any time during the most recently
            completed fiscal year, together with the value of such options at the
            end of the
            fiscal year. Amounts reported under "Value of unexercised in-the-money
            options"
            represent the difference between (i) the market value as at April 30,
            2005 of the Class A Subordinate Voting Shares for which such options
            were
            granted having an exercise price less than such market value, and (ii) the
            exercise price of such options. The closing trading price of a Class A
            Subordinate Voting Share on the Toronto Stock Exchange (the “TSX”) on
            April 30, 2005 was $ 26.01 .
  Name
                    Type
                        of Security
                    Securities
                        acquired on exercise
                      #
                    Aggregate
                        value realized
                      $
                    Options
                        exercisable (vested) at April 30, 2005
                      #*(i),
                        (ii)*
                    Options
                        not exercisable (unvested) at April 30, 2005
                      #
                    Value
                        of all vested unexercised in-the-money options April 30,
                        2005
                      $
                    Value
                        of all non-vested unexercised in-the-money options April
                        30, 2005
                      $Craig
                        L. Dobbin, O.C.
                    Class A
                    -
                    -
                    1,023,956
                    -
                    39,963,513
                    -Sylvain
                        Allard
                    Class A
                    -
                    -
                    221,966
                    -
                    7,462,378
                    -Jo Mark
                        Zurel
                    Class A
                    -
                    -
                    70,750
                    -
                    2,123,352
                    -
  (i)
                  Each
                      option
                      entitles the holder to receive two Class A Subordinate
                      Voting
                      Shares.
 (ii)
                  All
                      options
                      expire 10 years from the date of
                      grant.
  92
 
 **Executive
            Retiring Plan and Retiring Allowance**
  Under
            supplementary
            retirement plan agreements ("SRPs") with the Corporation, Mr. Sylvain
            Allard, Mr. Jo Mark Zurel and former executive, Mr. O.
            Noel
            Clarke, may be entitled to receive supplementary retirement benefits
            in addition
            to the retirement benefits provided under the RPP. The aggregate target
            benefit
            provided through the RPP, the SRPs and Canada Pension Plan ("CPP") benefits
            is
            2% of the individual’s highest three years average earnings including
            operations bonuses ("average earnings"), but
            excluding
            special transaction bonuses (corporate
            development) multiplied by years of credited service. The SRP benefit
            formula is
            integrated with the formula under the CPP as well as the estimated benefits
            under the RPP. The SRP provides benefits by multiplying the participant’s
            credited service by the sum of the following:
  ·
                  0.5%
                      of
                      average earnings up to the CPP earnings limit at
                      retirement;
  ·
                  1%
                      of average
                      earnings above such CPP earnings limit up to the earnings for
                      which the
                      Canada Revenue Agency (the "CRA") maximum contribution could
                      be made under
                      the RPP in the year of retirement;
                      and
  ·
                  2%
                      of average
                      earnings in excess of the above CRA earnings
                      limits.
  In
            addition, the
            SRP provides indexing on the supplementary benefit equal to 75% of increases
            in
            the Consumer Price Index less 1% (subject to a 4% annual maximum). The
            SRP also
            provides a 60% spousal death benefit and if retirement occurs between
            ages 55
            and 65 a bridge benefit equal to CPP benefits. This SRP bridge benefit
            is also
            indexed and ceases at age 65 when CPP benefits actually commence.
  In
            normal
            circumstances, supplementary benefits under the SRP vest after completion
            of
            20 years of continuous service and are paid directly by the Corporation
            rather than being pre-funded. However, upon a change in control of the
            Corporation, SRP participants are immediately vested and the Corporation
            is
            required to establish a retirement compensation arrangement (as defined
            under
            the *Income
            Tax Act* (Canada))
            to secure
            full funding for all SRP benefits through the issuance of letters of
            credit. In
            the case of Mr. O. Noel Clarke, his employment arrangements with
            the
            Corporation provided that he be credited with 10 years of continuous
            service for the purpose of his SRP in addition to his actual service.
  The
            estimated
            credited years of service as of August 2, 2005 for Mr. Allard
            is
            22.3 years, Mr. Zurel is 11.3 years and Mr. Clarke
            is
            14.5 years (inclusive of his 10 years of additional service
            discussed
            above).
  The
            approximate
            aggregate annual benefits payable to a participant under the RPP and
            SRP are as
            follows:
  Years
                        of
                        Credited Service**Remuneration**
                        **$**
                        800,000
                        1,000,000
                        1,200,000
                        1,400,000
                        1,600,000
                        1,800,000
                        2,000,000
                        2,400,000
                        2,600,000
                        2,800,000
                        3,000,000
                    **15**
                      **$**
                      240,000
                      300,000
                      360,000
                      420,000
                      480,000
                      540,000
                      600,000
                      720,000
                      780,000
                      840,000
                      900,000
                    **20**
                      **$**
                      320,000
                      400,000
                      480,000
                      560,000
                      640,000
                      720,000
                      800,000
                      960,000
                      1,040,000
                      1,120,000
                      1,200,000
                    **25**
                      **$**
                      400,000
                      500,000
                      600,000
                      700,000
                      800,000
                      900,000
                      1,000,000
                      1,200,000
                      1,300,000
                      1,400,000
                      1,500,000
                    **30**
                      **$**
                      480,000
                      600,000
                      720,000
                      840,000
                      960,000
                      1,080,000
                      1,200,000
                      1,440,000
                      1,560,000
                      1,680,000
                      1,800,000
                    **35**
                      **$**
                      560,000
                      700,000
                      840,000
                      980,000
                      1,120,000
                      1,260,000
                      1,400,000
                      1,680,000
                      1,820,000
                      1,960,000
                      2,100,000
  93
 
 Effective
            June 4,
            1991, as amended as of January 19, 1993, the Corporation agreed
            to provide
            a retiring allowance (the "Retiring Allowance") to Craig L. Dobbin, Executive
            Chairman of the Corporation, whereby Mr. Dobbin would be entitled
            upon
            retirement to receive an annual retiring allowance in an amount equal
            to 66 2/3%
            of the average of the three highest fiscal years of annual remuneration,
            including operations bonuses ,
            earned by him
            from the Corporation during his term as Chairman and Chief
            Executive Officer .
            Performance
            measured bonuses, including bonuses under the CEVA and TSR Plans, are
            included
            for calculating annual remuneration for purposes of the Retiring Allowance,
            but
            special transaction bonuses (corporate development) generally are
            not.
  The
            Retiring
            Allowance will continue during the lifetime of Mr. Dobbin and,
            in the event
            of his death within 20 years of the commencement of payments pursuant
            to
            such allowance, the payments shall continue to be made to a beneficiary
            or
            beneficiaries named by Mr. Dobbin for the remaining balance of
            the 20-year
            period. The Retiring Allowance may increase based upon annual increases
            in the
            Consumer Price Index ("CPI"), however, any such increase shall be limited
            to a
            maximum of 75% of any annual increase in the CPI less 1% and further
            limited to
            a maximum increase of 4% of the Retiring Allowance in any one year.
            Payment
            of the Retiring Allowance is subject to compliance by Mr. Dobbin
            with
            certain non-competition and non-disclosure obligations. If Mr. Dobbin
            were
            to retire at age 70, the estimated annual benefits payable to Mr. Dobbin
            (based on his total annual remuneration to date) would be
            $2,140,741.
  **Indebtedness
            of Directors and Officers**
  Effective
            July 30, 2002, in connection with section 402 of the Sarbanes-Oxley
            Act of
            2002 (“SOX”), the Corporation introduced a new policy with regard to loans to
            directors and officers. The policy prohibits the Corporation from, directly
            or
            indirectly, extending or maintaining credit, arranging for the extension
            of
            credit, or renewing an extension of credit, in the form of a personal
            loan to or
            for any director or officer. Irrevocable extensions of credit made to
            directors
            and officers outstanding as of July 30, 2002 are exempted under
            the policy,
            but the terms of this credit cannot be materially modified and credit
            cannot be
            renewed after such date. In conjunction with this policy, the Corporation’s
            Board on March 2, 2003 approved a revision to the Employee Stock
            Option
            Plan , to
            eliminate the granting of loans to facilitate the exercising of options.
            The
            Corporation’s Executive Share Purchase and Ordinary Share Loans existed at
            July 30, 2002 and are exempt under the policy. No new credit or
            any
            modification of the terms of the credit granted at July 30, 2002
            has been
            made.
  The
            following table
            provides the aggregate indebtedness outstanding at August 16,
            2005 to CHC
            of the current and former directors, officers and employees of the Corporation
            (and its subsidiaries):
  **Aggregate
                      Indebtedness ($)****Purpose**
                  **To
                      the Corporation or its subsidiaries**
                  **To
                      another entity**Executive
                      Share Purchase Loans
                    (A
                      loan
                      program)
                    Ordinary
                      share loan
                  $1,502,234
                    $33,000,000
                  —
                    —
 
  Effective
            July 30, 2002 the Corporation had two types of loans outstanding
            to
            officers of the Corporation that are exempted under the policy and are
            described
            below.
  The
            following table
            provides details of the indebtedness of individual current and proposed
            directors and officers of the Corporation (and their respective associates)
            in
            connection with the Executive Share Purchase Loan Program and the Ordinary
            Share
            Loan, both of which are described in detail following the table.
  94
  Name
                      and
                      principal position
                  Involvement
                      of Corporation or subsidiary
                  Largest
                      amount outstanding during fiscal year 2005
                    $
                  Amount
                      outstanding as at August 16, 2005
                    $
                  Financially
                      assisted securities purchases during fiscal 2005
                    #
                  Security
                      for
                      indebtedness
                  Amount
                      forgiven during fiscal 2005EXECUTIVE
                      SHARE PURCHASE LOANS (A loan program)Craig
                      L.
                      Dobbin, O.C., Executive Chairman, Proposed Nominee
                      Director
                  Lender
                  1,067,600
                  1,004,800
                  —
                  An
                      assignment
                      of the shares or proceeds of vested options to acquire 487,086
                      Class A shares held by the executive, having an exercise
                      price of
                      $6.50 per share.
                  —Sylvain
                      Allard
                    President
                      & Chief Executive Officer, Proposed Nominee Director
                  Lender
                  358,823
                  317,945
                  —
                  An
                      assignment
                      of the shares or proceeds of vested options to acquire 100,000
                      Class A shares held by the executive, having an exercise
                      price of
                      $2.125 per share.
                  —Jo Mark
                      Zurel
                    Senior
                      Vice-President & Chief Financial Officer
                  Lender
                  158,012
                  137,550
                  —
                  An
                      assignment
                      of the shares or proceeds of vested options to acquire 26,500
                      Class A
                      shares held by the executive, having an exercise price of $2.125
                      per
                      share.
                  —Jeremy
                      Labuschagne
                    Former
                      Managing Director, CHC Africa
                  Lender
                  55,130
                  —
                  —
                  A
                      first lien
                      on the Class A shares
                  —Christine
                      Baird
                    President,
                      CHC Helicopters International
                  Lender
                  48,898
                  41,939
                  —
                  A
                      first lien
                      on the Class A shares
                  —THE
                      ORDINARY SHARE LOANO.S.
                      Holdings Inc.
                    (a
                      corporation indirectly wholly owned by Craig L. Dobbin)
                  Lender
                  33,000,000
                  33,000,000
                  —
                  A
                      lien in CHC’s favour on the purchased Ordinary Shares, together with
                      certain other security (see below)
                  —
  95
 
 **Executive
              Share Purchase Loan Program**
 On
            July 21,
            2000, the Board, on the recommendation of the Compensation Committee
            and advice
            from independent compensation consultants, approved a long term incentive
            program (the "A loan program") for certain members of senior management
            to
            permit them to participate in future appreciation of the shares of the
            Corporation and to bear the same risks as other shareholders. The A loan program
            enabled eligible senior management to receive interest free loans to
            finance
            purchases of Class A Subordinate Voting Shares. The maximum amount
            of the
            loan available was based on a multiple of the employee's base salary
            and ranged
            from 0.5 times base salary to a maximum of 2.0 times base salary, depending
            on
            position. The Chief Executive Officer was eligible for the maximum multiple
            of
            2.0 times base salary. Although indebtedness is remaining outstanding
            under this
            program, no further loans are being made under it. The outstanding loans
            are
            secured by the financed shares (except in the case of certain executives
            of the
            Corporation where the Board, in April 2002, approved the assignment of
            the
            shares or proceeds arising from certain vested options to constitute
            security in
            the place of shares as security for outstanding A loans, as detailed
            above),
            require minimum annual loan repayments of 5% of the loan principal amount
            and
            are fully payable on termination of employment or sale of the financed
            shares or
            the exercise of share options taken as security and sale of shares arising
            therefrom, as the case may be.
  The
            Ordinary Share
            Loan
  On
            December 9,
            1997, the Corporation issued 11,000,000 (now 22,000,000 as a result of
            the stock
            split) Ordinary Shares to O.S. Holdings Inc. for an aggregate consideration
            of
            $33,000,000 (the "Ordinary Share Loan"). O.S. Holdings Inc. is a corporation
            wholly owned by 10644 Newfoundland Inc. ("Holdco"), which is a corporation
            wholly owned by Craig L. Dobbin, the Executive Chairman. On
            December 9, 1997, the Corporation made a loan to O.S. Holdings
            Inc. of
            $33,000,000 to enable it to purchase these Ordinary Shares. The loan
            is
            repayable upon demand and does not bear interest unless the principal
            amount
            thereof (or the lesser portion demanded) has not been repaid within two
            business
            days following demand therefore, after which time the principal amount
            thereof
            (or the portion demanded) would bear interest at a rate equal to the
            Canadian
            "prime rate" plus 5%. These Ordinary Shares were issued to give effect
            to an
            undertaking provided by the Corporation to U.K. regulatory authorities
            in
            connection with the foreign ownership requirements of European legislation
            applicable to the Corporation’s then U.K. operating subsidiary, Brintel. The
            issuance of Ordinary Shares to O.S. Holdings Inc. was intended to increase
            the
            amount of equity share capital of the Corporation held by European nationals
            (Mr. Dobbin, the sole shareholder of Holdco, is a citizen of both
            Canada
            and the Republic of Ireland) and to establish that Brintel was entitled
            to
            maintain its operating license. The transaction involving the issuance
            of the
            Ordinary Shares (including the making of the loan) was approved by shareholders
            of the Corporation at a meeting held on December 9, 1997.
  The
            loan is secured
            by a lien in the Corporation's favour over the Ordinary Shares. Further,
            Holdco
            has guaranteed the obligations of O.S. Holdings Inc. to the Corporation
            and has
            pledged the shares of O.S. Holdings Inc. owned by it in favour of the
            Corporation as security for such guarantee. Craig L. Dobbin has guaranteed
            the
            obligations of each of O.S. Holdings Inc. and Holdco to the Corporation
            and has
            pledged the shares of Holdco owned by him in favour of the Corporation
            as
            security for such guarantee. The Corporation's recourse against Mr. Dobbin
            in connection with the repayment of the loan and such guarantee is limited
            to
            the realization of the shares of Holdco held by him.
  Indebtedness
            of
            Directors, Executive Officers and Senior Officers other than under Securities
            Purchase Programs
  There
            was no
            indebtedness other than under securities purchase programs to the Corporation
            by
            any current and former officers, directors and employees of the Corporation
            (and
            their respective associates) as at August 2, 2005.
  **Directors
            and Officers Insurance**
  The
            Corporation has
            purchased and maintains a policy of insurance for the benefit of directors
            and
            officers as permitted by the CBCA and the
            Corporation’s by-laws .
            The policy
            insures directors and officers, in their capacities as directors and
            officers of
            the Corporation, or in their capacities as directors and officers of
            other
            corporations where they have acted in that capacity at the request of
            the
            Corporation, against certain liabilities incurred by them, except where
            the
            liability relates to the failure by the director or officer to act honestly,
            in
            good faith and with a view to the best interests of the Corporation or
            the other
            corporation, as the case may be.
  96
 
 The
              policy obtained
              provided for U.S. $45 million of coverage for directors and
              officers of the Corporation on an aggregate basis .
              Such policy is
              subject to a deductible of U.S. $100,000 per incident. The cost of
              coverage for 200 5
              on an aggregate
              basis was $421,750.
 **Employees**
  All
            pilots and
            aircraft maintenance engineers are required to be licensed by regulatory
            authorities in the country in which they work. To obtain a pilot’s license, each
            pilot must complete and pass practical flight and written examinations.
            In
            addition, IFR pilots must have passed IFR practical flight and written
            examinations. To obtain an aircraft maintenance engineer’s license, an engineer
            must have completed a minimum of three to four years of training
            and passed
            a written examination. The following table provides employee data for
            each of
            our major segments at April 30, 2005, 2004 and 2003.
  **Year
                      ended April 30****2005**
                  
                  2004
                  
                  2003**Canada**Administrative,
                      support and other personnel
                  
                  
                  195
                  
                  
                  178
                  
                  
                  155**Europe**Pilots
                  
                  
                  344
                  
                  
                  349
                  
                  
                  392Maintenance
                      engineers
                  
                  
                  275
                  
                  
                  239
                  
                  
                  294Administrative
                      and support personnel
                  
                  
                  294
                  
                  
                  349
                  
                  
                  387913
                  
                  
                  937
                  
                  
                  1,073**International**Pilots
                  
                  
                  264
                  
                  
                  263
                  
                  
                  249Maintenance
                      engineers
                  
                  
                  223
                  
                  
                  223
                  
                  
                  224Administrative
                      and support personnel
                  
                  
                  309
                  
                  
                  321
                  
                  
                  302796
                  
                  
                  807
                  
                  
                  775**Repair
                      and Overhaul**Maintenance
                      engineers
                  
                  
                  280
                  
                  
                  262
                  
                  
                  304Administrative
                      and support personnel
                  
                  
                  404
                  
                  
                  186
                  
                  
                  166684
                  
                  
                  448
                  
                  
                  470**Schreiner**Pilots
                  
                  
                  148
                  
                  
                  163
                  
                  
                  -Maintenance
                      engineers
                  
                  
                  105
                  
                  
                  125
                  
                  
                  -Administrative
                      and support personnel
                  
                  
                  248
                  
                  
                  411
                  
                  
                  -501
                  
                  
                  699
                  
                  
                  -3,089
                  
                  
                  3,069
                  
                  
                  2,473
  In
            Norway, our
            pilots have a two-year collective agreement that expires April 30,
            2006.
            Ground staff and engineers have a two-year agreement that expires March
            31,
            2006. Repair and overhaul employees have a central agreement extending
            to
            March 31, 2006 and two-year local agreements that expire on
            September 30, 2006.
  In
            the U.K., we
            have collective agreements with our pilots and a separate agreement with
            our
            engineers and other ground staff, both of which expired on June 30,
            2005. A
            five-year agreement has been reached with our pilots. Negotiations are
            underway
            to reach new agreements with engineers and other ground staff.
  In
            Denmark, we have
            a multi-year collective agreement with our pilots that will expire on
            June 30, 2007, and separately with our engineers and ground staff
            that
            expires June 30, 2007.
  In
            Ireland, we have
            collective pay agreements in place with our pilots, aircrew and engineers
            that
            expire April 30, 2006.
  97
 
 In
            Australia, we
            have a collective agreement with our pilots that expired May 2,
            2005. Our
            collective agreement with aircrew in Australia expired in December 2003
            and a
            replacement agreement is in the process of being ratified. Our engineers’
            agreement in Australia expired August 31, 2005. Negotiations on
            a new
            agreement are ongoing.
  In
            the Netherlands,
            we have an effective collective agreement with our pilots and with our
            ground
            staff and general administrative staff that expired June 2005 and is
            currently
            under negotiations. We expect the negotiations to be finalized in September
            2005.
  We
            also have a
            collective agreement with certain of the employees at CHC Composites
            Ltd. that
            expires on October 15, 2006.
  Employees
            at our
            other helicopter operations are not unionized.
  **Share
            Ownership**
  Share
            ownership
            information is included under Item 7.
   ITEM
                      7.
                  MAJOR
                      SHAREHOLDERS AND RELATED PARTY
                      TRANSACTIONS
  **PRINCIPAL
            SHAREHOLDERS**
  As
            at August 2,
            2005, there were 36,836,976 Class A Subordinate Voting Shares,
            5,866,476
            Class B Multiple Voting Shares and 22,000,000 Ordinary Shares
            issued and
            outstanding. The Class A Subordinate Voting Shares represent 37.7%
            of the
            aggregate voting rights attached to the Corporation’s voting shares.
  The
            following table
            sets forth information as at August 2, 2005 with respect to the beneficial
            ownership of our Class A Subordinate Voting Shares, Class B
            Multiple
            Voting Shares and Ordinary Shares by each shareholder known by us to
            be (1) the
            beneficial owner of more than 5% of our Class A Subordinate Voting
            Shares,
            Class B Multiple Voting Shares or Ordinary Shares, 2) the beneficial
            owner
            of a number of shares of any class or classes of stock that collectively
            carry
            more than 5% of the votes attributed to all our outstanding voting securities
            and (3) all named executive officers.
  **Name
                      of Shareholder**
                  
                  **Number
                      of voting shares owned, controlled or directed*****(i)***
                  
                  **Percent
                      of class*****(i)*****Subordinate
                      Voting Shares**
                  
                  **Multiple
                      Voting Shares**
                  
                  **Ordinary
                      Shares**
                  
                  **Subordinate
                      Voting Shares**
                  
                  **Multiple
                      Voting Shares**
                  
                  **Ordinary
                      Shares**Discovery
                      Helicopters Inc.*(ii)
                      (iii)*
                  
                  
                  2,512,230
                  
                  
                  5,555,432
                  
                  
                  -
                  
                  
                  6.8
                  %
                  
                  94.7
                  %
                  
                  -Fidelity
                      Investments*(iv)*
                  
                  
                  4,825,000
                  
                  
                  -
                  
                  
                  -
                  
                  
                  13.1
                  %
                  
                  -
                  
                  
                  -Connor,
                      Clark
                      & LunnInvestment
                      Management Partnership*(v)*
                  
                  
                  1,912,374
                  
                  
                  -
                  
                  
                  -
                  
                  
                  5.2
                  %
                  
                  -
                  
                  
                  -O.S.
                      Holdings
                      Inc.*(vi)*
                  
                  
                  -
                  
                  
                  -
                  
                  
                  22,000,000
                  
                  
                  -
                  
                  
                  -
                  
                  
                  100.0
                  %Craig
                      L.
                      Dobbin*(i)(vii)*
                  
                  
                  2,053,912
                  
                  
                  -
                  
                  
                  -
                  
                  
                  5.6
                  %
                  
                  -
                  
                  
                  -Sylvain
                      Allard*(i)*
                  
                  
                  722,400
                  
                  
                  -
                  
                  
                  -
                  
                  
                  2.0
                  %
                  
                  -
                  
                  
                  -Jo
                      Mark Zurel*(i)*
                  
                  
                  147,656
                  
                  
                  -
                  
                  
                  -
                  
                  
                  0.4
                  %
                  
                  -
                  
                  
                  -
  (i)
                  Includes
                      shares beneficially owned by the listed person. If a person
                      has the right
                      to acquire beneficial ownership of any shares by exercise of
                      options or
                      otherwise by November 2, 2005, those shares are deemed beneficially
                      owned
                      by that person and are deemed to be outstanding solely for
                      the purpose of
                      determining the percentage of the shares that the person owns.
                      Those
                      shares are not included in the computations for any other
                      person.
 
 98
 
 (ii)
                  Discovery
                      is
                      a holding company, all of the voting shares of which are owned
                      by Craig L.
                      Dobbin, Executive Chairman of the Corporation. The shares owned
                      by
                      Discovery Helicopters Inc. collectively represent 59.5% of
                      the votes
                      attached to all of our outstanding
                      shares.
 
 (iii)
                  Includes
                      1,379,310 Class A Subordinate Voting Shares that may
                      be acquired upon
                      the conversion of a $5,000,000 convertible loan at a price
                      of $3.63 per
                      share. Also includes 1,113,230 Class A Subordinate Voting
                      Shares that
                      were lent by Discovery to a third party pursuant to a borrowing
                      agreement.
                      Discovery will not exercise control or direction over such
                      shares until
                      they are returned.
 
 (iv)
                  As
                      of
                      June 30, 2005 based on the most recent publicly available
                      information.
 
 (v)
                  As
                      of
                      August 26, 2005 based on the most recent publicly available
                      information.
 
 (vi)
                  O.S.
                      Holdings
                      Inc. is a holding company wholly owned indirectly by Craig
                      L. Dobbin,
                      Executive Chairman of the Corporation. Mr. Dobbin owns directly
                      or
                      indirectly shares of the Corporation that collectively carry
                      61.8% of the
                      votes attached to all of the outstanding shares of the Corporation.
 
 (vii)
                  These
                      shares
                      may be acquired upon the exercise of options granted with prices
                      ranging
                      from $2.15 to $15.35. The shares granted pursuant to the full
                      exercise of
                      these options represent 2.1% of the votes attached to all our
                      outstanding
                      voting securities.
 
 **RELATED
            PARTY TRANSACTIONS**
  In
            the course of
            its regular business activities, the Company enters into routine transactions
            with companies subject to significant influence and companies affiliated
            with
            the controlling shareholder. These transactions are measured at the amounts
            exchanged, which is the amount of consideration determined and agreed
            to by the
            related parties. Transactions with related parties for the years ended
            April 30 are summarized as follows:
  **2005**
                  
                  2004Revenues*(i)*
                  
                  **$**
                  **43,518**
                  
                  $
                  10,745Direct
                      costs
                  
                  **$**
                  **1,298**
                  
                  $
                  1,972Capital
                      asset
                      additions
                  
                  **$**
                  **8,160**
                  
                  $
                  2,962Net
                      amounts
                      receivable and payable in respect of such revenues, expenses
                      and
                      additions
                  
                  **$**
                  **15,044**
                  
                  $
                  10,808
  (i)
                  Revenue
                      increases relate to revenues from a company owned by Schreiner,
                      which is
                      subject to significant influence. Therefore, the fiscal 2004
                      amount only
                      includes revenues from the February 16, 2004 acquisition
                      of
                      Schreiner.
 
 During
            fiscal 2000,
            in connection with securing tender credit facilities, the Company received
            an
            unsecured, subordinated, convertible 12% loan from an affiliate of the
            controlling shareholder in the amount of $5.0 million. This loan
            is
            subordinated to the Company’s senior credit facilities and its senior
            subordinated notes. The loan is convertible into Class A subordinate
            voting
            shares at $3.63 per share. The estimated value of the loan proceeds
            attributable to the conversion feature of $1.0 million was allocated
            to
            contributed surplus. The equivalent reduction in the carrying value of
            the loan
            is amortized to earnings over the term of the loan. Interest expense
            of
            $0.7 million (2004 - $0.7 million), including amortization
            of the
            above-noted discount, was recorded on the loan during the fiscal year
            ended
            April 30, 2005.
  For
            information
            regarding loans between us and senior management and enterprises that
            directly
            or indirectly control us, see Item 6: Directors, Senior Management
            and
            Employees.
   ITEM
                      8.
                  FINANCIAL
                      INFORMATION
  Financial
            statements are included under Item 18.
  99
  ITEM
                        9.
                    THE
                        OFFER AND
                        LISTING
 **LISTING
            DETAILS**
  On
            October 7,
            1991, our outstanding Class A Subordinate Voting Shares and Class B
            Multiple Voting Shares were listed on the TSX under the stock symbols
            FLY.A. and
            FLY.B., respectively. As of August 2, 2005, 11 registered holders
            of record
            in the United States held 5,680,388 Class A Subordinate
            Voting Shares
            (or 10.9% of the Class A Subordinate Voting Shares) and one registered
            holder of record in the United States held 82,010 Class B Multiple
            Voting
            Shares (or 3.7% of the Class B Multiple Voting Shares).
  At
            a special
            meeting of shareholders on March 28, 2005, the shareholders approved
            the
            subdivision of our Class A Subordinate Voting Shares, Class B
            Multiple
            Voting Shares and Ordinary Shares on a two-for-one basis. The Class A
            Subordinate Voting Shares and Class B Multiple Voting Shares listed
            on the
            TSX commenced trading under the stock symbol FLY.SV.A and FLY.MV.B,
            respectively, on a post-split basis on April 12, 2005. All amounts
            below
            have been restated to reflect the stock split.
  The
            following table
            sets forth, for the quarters indicated, the high and low sales prices
            and
            volumes of trading of our Class A Subordinate Voting Shares and
            our
            Class B Multiple Voting Shares as reported on the TSX.
  **Class
                      A Subordinate Voting Shares**
                  
                  **Class
                      B Multiple Voting Shares****High**
                  
                  **Low**
                  
                  **Volume**
                  
                  **High**
                  
                  **Low**
                  
                  **Volume****Fiscal
                      2005**First
                      quarter
                  
                  $
                  22.35
                  
                  $
                  18.38
                  
                  
                  5,737,720
                  
                  $
                  21.67
                  
                  $
                  18.58
                  
                  
                  3,502Second
                      quarter
                  
                  
                  24.99
                  
                  
                  20.24
                  
                  
                  8,054,606
                  
                  
                  24.88
                  
                  
                  20.88
                  
                  
                  6,966Third
                      quarter
                  
                  
                  27.25
                  
                  
                  22.50
                  
                  
                  5,331,792
                  
                  
                  27.00
                  
                  
                  22.87
                  
                  
                  6,610Fourth
                      quarter
                  
                  
                  29.71
                  
                  
                  25.22
                  
                  
                  8,031,521
                  
                  
                  29.08
                  
                  
                  25.80
                  
                  
                  4,840**Fiscal
                      2004**First
                      quarter
                  
                  $
                  13.98
                  
                  $
                  12.38
                  
                  
                  7,775,600
                  
                  $
                  14.00
                  
                  $
                  12.50
                  
                  
                  66,000Second
                      quarter
                  
                  
                  14.17
                  
                  
                  12.00
                  
                  
                  8,793,200
                  
                  
                  14.38
                  
                  
                  12.41
                  
                  
                  15,400Third
                      quarter
                  
                  
                  16.98
                  
                  
                  13.53
                  
                  
                  9,286,000
                  
                  
                  17.05
                  
                  
                  13.76
                  
                  
                  7,000Fourth
                      quarter
                  
                  
                  20.62
                  
                  
                  16.30
                  
                  
                  11,708,600
                  
                  
                  20.50
                  
                  
                  15.20
                  
                  
                  18,600
  The
            following table
            sets forth, for the fiscal years indicated, the high and low sales prices
            and
            volumes of trading of our Class A Subordinate Voting Shares and
            our
            Class B Multiple Voting Shares as reported on the TSX.
  **Class
                      A Subordinate Voting Shares**
                  
                  **Class
                      B Multiple Voting Shares****High**
                  
                  **Low**
                  
                  **Volume**
                  
                  **High**
                  
                  **Low**
                  
                  **Volume**2001
                  
                  $
                  8.90
                  
                  $
                  1.88
                  
                  
                  25,343,088
                  
                  $
                  7.50
                  
                  $
                  2.13
                  
                  
                  877,5022002
                  
                  
                  15.00
                  
                  
                  6.13
                  
                  
                  35,488,690
                  
                  
                  15.00
                  
                  
                  7.00
                  
                  
                  105,7542003
                  
                  
                  18.03
                  
                  
                  10.82
                  
                  
                  37,426,564
                  
                  
                  18.00
                  
                  
                  10.90
                  
                  
                  94,5022004
                  
                  
                  20.62
                  
                  
                  12.00
                  
                  
                  37,563,400
                  
                  
                  20.50
                  
                  
                  12.41
                  
                  
                  107,0002005
                  
                  
                  29.71
                  
                  
                  18.38
                  
                  
                  27,155,639
                  
                  
                  29.08
                  
                  
                  18.58
                  
                  
                  21,918
  The
            following table
            sets forth, for the months indicated the high and low sales prices and
            volumes
            of trading of our Class A Subordinate Voting Shares and
            our
            Class B Multiple Voting Shares as reported on the TSX.
  100
  **Class
                      A Subordinate Voting Shares**
                  
                  **Class
                      B Multiple Voting Shares****High**
                  
                  **Low**
                  
                  **Volume**
                  
                  **High**
                  
                  **Low**
                  
                  **Volume**March
                      2005
                  
                  $
                  29.71
                  
                  $
                  26.50
                  
                  
                  3,876,628
                  
                  $
                  29.00
                  
                  $
                  27.13
                  
                  
                  1,000April
                      2005
                  
                  
                  28.63
                  
                  
                  25.22
                  
                  
                  2,723,837
                  
                  
                  28.50
                  
                  
                  25.80
                  
                  
                  2,720May
                      2005
                  
                  
                  27.75
                  
                  
                  25.00
                  
                  
                  1,903,200
                  
                  
                  28.00
                  
                  
                  26.17
                  
                  
                  1,700June
                      2005
                  
                  
                  26.71
                  
                  
                  23.88
                  
                  
                  4,917,500
                  
                  
                  28.00
                  
                  
                  25.20
                  
                  
                  800July
                      2005
                  
                  
                  26.21
                  
                  
                  23.88
                  
                  
                  3,251,300
                  
                  
                  25.82
                  
                  
                  24.00
                  
                  
                  1,700August
                      2005
                  
                  
                  27.00
                  
                  
                  24.35
                  
                  
                  2,671,100
                  
                  
                  25.75
                  
                  
                  24.00
                  
                  
                  1,000
  On
            August 31,
            2005 the closing price of our Class A Subordinate Voting Shares
            on the TSX
            was $24.35.
  Effective
            October 11, 2002 our Class A Subordinate Voting Shares
            commenced
            trading on the New York Stock Exchange (“NYSE”) under the stock symbol FLI.
            Prior to October 11, 2002 our Class A Subordinate Voting
            Shares traded
            on the Nasdaq National Market (“Nasdaq”). Class A Subordinate Voting Shares
            listed on the NYSE began trading on a post-split basis on April 19,
            2005.
            All amounts below have been restated to reflect the stock split.
  The
            following table
            sets forth for the quarters indicated, the high and low sales price in
            U.S.
            Dollars and volumes of trading of our Class A Subordinate Voting
            Shares on
            the NYSE and Nasdaq.
  **High**
                  
                  **Low**
                  
                  **Volume****Fiscal
                      2005**First
                      quarter
                  
                  $
                  16.83
                  
                  $
                  13.19
                  
                  
                  1,469,400Second
                      quarter
                  
                  
                  19.69
                  
                  
                  15.29
                  
                  
                  1,078,000Third
                      quarter
                  
                  
                  22.13
                  
                  
                  18.38
                  
                  
                  1,108,800Fourth
                      quarter
                  
                  
                  24.13
                  
                  
                  20.20
                  
                  
                  1,234,300**Fiscal
                      2004**First
                      quarter
                  
                  $
                  10.45
                  
                  $
                  8.80
                  
                  
                  332,400Second
                      quarter
                  
                  
                  10.80
                  
                  
                  8.65
                  
                  
                  894,600Third
                      quarter
                  
                  
                  12.98
                  
                  
                  10.13
                  
                  
                  1,044,800Fourth
                      quarter
                  
                  
                  15.23
                  
                  
                  12.23
                  
                  
                  1,658,800
  The
            following table
            sets forth in U.S. Dollars for the fiscal years indicated, the high and
            low
            sales prices and volumes of trading of our Class A Subordinate
            Voting
            Shares as reported on the NYSE and Nasdaq.
  **High**
                  
                  **Low**
                  
                  **Volume**2001
                  
                  $
                  5.83
                  
                  $
                  1.25
                  
                  
                  5,943,2202002
                  
                  
                  9.63
                  
                  
                  3.86
                  
                  
                  14,467,8002003
                  
                  
                  11.65
                  
                  
                  7.38
                  
                  
                  6,568,6002004
                  
                  
                  15.23
                  
                  
                  8.65
                  
                  
                  3,930,6002005
                  
                  
                  24.13
                  
                  
                  13.19
                  
                  
                  4,890,500
  **High**
                  
                  **Low**
                  
                  **Volume**March
                      2005
                  
                  $
                  24.13
                  
                  $
                  21.73
                  
                  
                  396,000April
                      2005
                  
                  
                  23.41
                  
                  
                  20.20
                  
                  
                  562,300May
                      2005
                  
                  
                  22.08
                  
                  
                  19.66
                  
                  
                  313,200June
                      2005
                  
                  
                  21.44
                  
                  
                  19.50
                  
                  
                  316,300July
                      2005
                  
                  
                  21.27
                  
                  
                  19.29
                  
                  
                  223,100August
                      2005
                  
                  
                  22.26
                  
                  
                  19.37
                  
                  
                  317,300
  101
 
 The
            closing price
            of our Class A Subordinate Voting Shares on August 31,
            2005 as
            reported on the NYSE was U.S. $20.56.
   ITEM
                      10.
                  ADDITIONAL
                      INFORMATION
  **ARTICLES
            OF
            INCORPORATION AND BY-LAWS**
  The
            Company was
            incorporated under the Canada Business Corporations Act and its corporation
            number is 222233-7.
  On
            August 23,
            2002 the Board of Directors approved certain amendments to By-Law No.
            1, the
            by-law relating generally to the transaction of the business and affairs
            of the
            Corporation (the “Old By-Law”) by adopting Amended and Restated By-Law No. 1
            (the “New By-Law”). Shareholders confirmed the New By-Law at the annual general
            meeting held on September 26, 2002. The New By-Law superceded
            and replaced
            the Old By-Law that had been previously enacted on February 18,
            1987. The
            Board of Directors made certain additional amendments to the New By-law,
            effective September 4, 2003 to provide that the board may, if the articles
            so
            provide, appoint one or more additional directors (subject to the maximum
            number
            authorized by the articles) to hold office for a term expiring no later
            than the
            close of the next annual meeting of shareholders, but the total number
            of
            directors appointed may not exceed one third of the number of directors
            elected
            at the previous annual meeting of shareholders. The amendments to the
            New By-law
            were confirmed by the shareholders at the shareholders’ meeting held on
            October 28, 2003.
  With
            respect to the
            directors of the Company, the Canada Business Corporations Act and by-laws
            of
            the Company require a director to refrain from voting (except in certain
            limited
            cases) on any material contract or transaction whether made or proposed
            with the
            Company to which the director is a party and to disclose in writing to
            the
            Company the nature and extent of his interest in such contract or transaction.
            The by-laws of the Company also provide that the directors shall be compensated
            for their services as the Board from time to time may authorize. The
            Board is
            given general authority to borrow monies on behalf of the Company and
            to pledge
            assets of the Company, and to delegate such powers from time to time
            to any
            officer of the Company. The Articles and by-laws of the Company do not
            contain
            any mandatory age limit requirement for a director's retirement or a
            minimum
            number of shares to be held by a director. Directors may be elected for
            terms of
            up to three years. Cumulative voting is not provided for in the
            Company's
            Articles or by-laws.
  Our
            issued and
            outstanding shares consist of Class A Subordinate Voting Shares,
            Class B Multiple Voting Shares and Ordinary Shares. By articles
            of
            amendment dated April 14, 2005, CHC subdivided each issued and unissued
            Class A Subordinate Voting Share, Class B Multiple Voting
            Share and
            Ordinary Share into two shares of each such class. Our Class A
            Subordinate
            Voting Shares and our Class B Multiple Voting Shares participate
            equally in
            the payment of dividends if and when declared by our Board of Directors.
            The
            Ordinary Shares are entitled to dividends equivalent on a per share basis
            to any
            dividend paid on our Class A Subordinate Voting Shares and Class B
            Multiple Voting Shares, subject to prior minority shareholder approval.
            Class A Subordinate Voting Shares carry the right to one vote
            per share,
            our Class B Multiple Voting Shares carry the right to 10 votes
            per share,
            and our Ordinary Shares carry the right to one vote per 10 shares. Our
            Ordinary
            Shares are also redeemable at the option of the Company at the subscription
            price thereof in certain circumstances. We also have the right, subject
            to the
            approval of the TSX, to purchase the Ordinary Shares at their fair market
            value.
            Our Class A Subordinate Voting Shares, our Class B Multiple
            Voting
            Shares and our Ordinary Shares share equally on a share for share basis
            in the
            property and assets of the Company upon liquidation or winding up.
  The
            First Preferred
            Shares rank prior to the Second Preferred Shares, the Class B
            Multiple
            Voting Shares, the Class A Subordinate Voting Shares and the Ordinary
            Shares and any other shares ranking junior to the First Preferred Shares
            with
            respect to the payment of dividends and distribution of assets in the
            event of
            the liquidation, dissolution or winding-up of the Corporation. The Second
            Preferred Shares rank prior to the Class B Multiple Voting Shares,
            the
            Class A Subordinate Voting Shares and the Ordinary Shares and
            any other
            shares ranking junior to the Second Preferred Shares with respect to
            the payment
            of dividends and distribution of assets in the event of the liquidation,
            dissolution or winding-up of the Corporation.
  102
 
 Other
            than as
            described above, the rights, privileges, restrictions and conditions
            attaching
            to the First Preferred Shares and the Second Preferred Shares, as classes,
            are
            identical. Except as required by law, the holders of the First Preferred
            Shares
            and the Second Preferred Shares, as classes, are not entitled to vote
            at any
            meeting of shareholders of the Corporation.
  If
            an offer is made
            to purchase Class B Multiple Voting Shares such that under the
            take-over
            bid provisions of applicable securities legislation, the same offer must
            be made
            to all or substantially all holders of Class B Multiple Voting
            Shares who
            are in a Canadian province or territory to which the requirements apply
            and the
            offeror does not concurrently make an identical offer to purchase the
            Class A Subordinate Voting Shares, then each outstanding Class A
            Subordinate Voting Share may be converted into a Class B Multiple
            Voting
            Share at the option of the holder thereof and sold pursuant to the offer
            for the
            Class B Multiple Voting Shares, except in certain circumstances.
            At any
            time, a holder of Class B Multiple Voting Shares may convert such
            shares
            into Class A Subordinate Voting Shares on a one-for-one basis.
  Generally,
            the
            articles of our Company would have to be amended to change the rights
            attached
            to the Company's shares. Such an amendment would have to be approved
            by
            shareholders of the Company by a majority of two-thirds of the votes
            cast.
            Certain amendments to the articles, such as an amendment that would change
            the
            rights attached to a class of shares, would require that the amendment
            be
            approved by a majority of two-thirds of the votes cast by holders of
            that class
            voting separately as a class.
  Under
            the Company's
            by-laws, the annual meeting of shareholders shall be held on such date
            and time
            as the Board, or the Chairman of the Board, or the President in the absence
            of
            the Chairman of the Board, may from time to time determine. The Board
            shall also
            have the power to call a special meeting of shareholders at any time.
            The only
            persons entitled to be present at a meeting of shareholders are those
            persons
            entitled to vote at such meetings, the directors and auditors of the
            Company and
            any others who are entitled or required under any provisions of the Canada
            Business Corporation Act, the articles or by-laws of the Company to be
            present
            at the meeting. Any other person may be admitted to the shareholder meeting
            only
            on the invitation of the Chairman of the meeting or with consent of the
            meeting.
  For
            purposes of
            complying with the Canada Transportation Act, the Articles include a
            provision
            that allows the directors of the Company to refuse to permit registration
            of any
            transfer or transfers of voting shares of the Company if such transfer
            would
            result in persons other than Canadians (as defined in the Canada Transportation
            Act) owning or controlling more than 25% of (a) the outstanding voting
            shares of
            the Company or (b) the votes attached to all outstanding voting shares
            of the
            Company.
  **TAXATION**
  The
            following
            discussion is a summary of the principal Canadian federal income tax
            considerations generally applicable under the Income Tax Act (Canada)
            (the
            "Canadian Act") to holders of Class A Subordinate Voting Shares
            who, at all
            relevant times, for purposes of the Canadian Act, deal at arm’s length with us,
            are not resident or deemed to be resident in Canada at any time, hold
            the
            Class A Subordinate Voting Shares as capital property, do not
            hold or use,
            and are not deemed to hold or use, Class A Subordinate Voting
            Shares in
            connection with a trade or business carried on, or deemed to be carried
            on, in
            Canada, and in the case of insurers who carry on an insurance business
            in Canada
            and elsewhere, do not hold Class A Subordinate Voting Shares that
            are
            "designated insurance property" as defined in the Canadian Act or that
            are
            effectively connected with an insurance business carried on in Canada
            (the
            "Holders"). Certain persons who carry on, or are deemed to carry on,
            business in
            Canada, including certain financial institutions, registered securities
            dealers
            and corporations controlled by one or more of the foregoing, will generally
            be
            precluded from treating Class A Subordinate Voting Shares as capital
            property under the Canadian Act.
  103
 
 This
            summary is
            based on the current provisions of the Canadian Act, the regulations
            thereunder
            in force as of the date of this Annual Report, specific proposals (the
            "Tax
            Proposals") to amend the Canadian Act or the regulations thereunder publicly
            announced by the Minister of Finance in Canada prior to the date of this
            Annual
            Report, the current provisions of the Canada-United States Income Tax
            Convention
            (1980) (the "Treaty"), and on the current administrative practices and
            policies
            published by the Canada Revenue Agency. This summary is not exhaustive
            of all
            possible Canadian federal income tax consequences and does not, apart
            from the
            Tax Proposals, take into account or anticipate any changes in law, whether
            by
            legislative, governmental or judicial action, nor does it take into account
            income tax laws or considerations of any province or territory of Canada
            or any
            jurisdiction other than Canada. Prospective investors and holders of
            subordinate
            voting shares are urged to consult their own tax advisors with respect
            to the
            Canadian federal income tax consequences set forth below and any other
            federal,
            provincial, state, local or foreign tax consequences to them of holding
            and
            disposing of subordinate voting shares.
  **Disposition
            of a Class A Subordinate Voting Share**
  A
            Holder who
            disposes of a Class A Subordinate Voting Share will not be subject
            to tax
            pursuant to the Canadian Act on a capital gain realized on the disposition
            unless the Class A Subordinate Voting Share is "taxable Canadian
            property"
            of the Holder within the meaning of the Canadian Act and no relief is
            afforded
            under any applicable tax treaty. Class A Subordinate Voting Shares
            will
            generally not be taxable Canadian property to a Holder provided such
            Class A Subordinate Voting Share is listed on a prescribed stock
            exchange
            within the meaning of the Canadian Act on the date of disposition, and
            provided
            such Holder, or persons with whom such Holder did not deal at arm’s length
            (within the meaning of the Canadian Act), or any combination thereof,
            did not
            own or have an option or right to acquire 25% or more of the issued shares
            of
            any class or series of the Company at any time within five years
            immediately preceding the date of disposition. As of the date of this
            Annual
            Report, the Class A Subordinate Voting Shares are listed on the
            TSX, a
            prescribed stock exchange for purposes of the Canadian Act. Class A
            Subordinate Voting Shares may be deemed taxable Canadian property of
            a Holder
            who receives such Class A Subordinate Voting Shares in exchange
            for other
            taxable Canadian property.
  If
            a Class A
            Subordinate Voting Share constitutes or is deemed to constitute taxable
            Canadian
            property of a Holder, provided such Holder is a resident of the United
            States
            for purposes of the Treaty, the Treaty will generally exempt such a Holder
            from
            Canadian tax in respect of the disposition of a Class A Subordinate
            Voting
            Share provided its value is not derived principally from real property
            (including resource property) situated in Canada. This relief under the
            Treaty
            may not be available to a Holder who had a permanent establishment or
            fixed base
            available to such Holder in Canada during the 12 months immediately preceding
            the disposition of the Class A Subordinate Voting Share.
  **Dividends**
  Any
            dividends
            (including stock dividends) paid or credited, or deemed under the Canadian
            Act
            to be paid or credited, on Class A Subordinate Voting Shares will
            be
            subject to ** Canadian
            withholding tax under the Canadian Act at the rate of 25% on the gross
            amount of
            the dividends. Generally, the rate of this withholding tax will be reduced
            under
            applicable tax treaties. In the case of dividends paid to a Holder who
            is a
            resident of the United States and beneficial owner of such dividends
            for
            purposes of the Treaty, the Canadian withholding tax rate is generally
            15%.
  **THE
            FOREGOING DISCUSSION OF CANADIAN FEDERAL INCOME TAXATION IS OF A GENERAL
            AND
            SUMMARY NATURE ONLY AND IS NOT INTENDED TO BE, NOR SHOULD IT BE CONSTRUED
            TO BE,
            LEGAL OR TAX ADVICE TO ANY PARTICULAR HOLDER OF SUBORDINATE VOTING SHARES.
            ACCORDINGLY, HOLDERS OF SUBORDINATE VOTING SHARES SHOULD CONSULT THEIR
            OWN TAX
            ADVISORS AS TO THE TAX CONSEQUENCES OF RECEIVING DIVIDENDS FROM US OR
            DISPOSING
            OF THE SUBORDINATE VOTING SHARES.**
  The
            documents
            referenced in this Annual Report may be inspected at our head office
            at:
  4740
            Agar
            Drive
 Richmond,
            British
            Columbia
 Canada
 V7B
            1A3
  104
 
 ITEM
                        11.
                    QUANTITATIVE
                        AND QUALITATIVE DISCLOSURES ABOUT MARKET
                        RISK
 We
            record our
            transactions and prepare our financial statements in Canadian dollars.
            For the
            year ended April 30, 2005, we maintained operations in the UK,
            Norway, the
            Netherlands, South Africa, Australia and Canada, with business also conducted
            in
            other countries. These operations are considered financially and operationally
            self-sustaining. Accordingly, our assets and liabilities are translated
            into
            Canadian dollars at the year-end exchange rate. Revenue and expense items
            are
            translated into Canadian dollars at the average annual exchange rate.
            Because
            many of our revenues and expenses occur in currencies other than Canadian
            dollars, we are exposed to exchange rate and currency risks.
  To
            perform
            sensitivity analysis, we assess the risk of loss in fair values due to
            the
            impact of hypothetical changes in interest rates and foreign currency
            exchange
            rates on market-sensitive instruments. Information provided by the analysis
            does
            not necessarily represent the actual changes in fair value that we would
            incur
            under normal market conditions because, of necessity, all variables other
            than
            the specific market risk factor are held constant. The results of sensitivity
            analysis at April 30, 2005 follow.
  **FOREIGN
            CURRENCY EXCHANGE RATE RISK**
  A
            10% change in the
            exchange rate of the U.S. dollar, euro and pound sterling against the
            Canadian
            dollar, with all other variables remaining constant, would have resulted
            in a
            $62.2 million change in the fair market value of our long-term
            debt at
            April 30, 2005. Our euro and pound sterling debt are designated
            as hedges
            of our net investments in foreign operations in the U.K. and the Netherlands.
            A
            portion of our U.S. debt has been designated as a hedge of our net investment
            in
            our Vancouver, Canada-based International operating unit. The remainder
            has been
            converted to euro, pound sterling and Norwegian kroner via forward foreign
            exchange agreements and has been designated as hedges of our net investments
            in
            our euro, pound sterling and Norwegian kroner functional operating units.
            As a
            result, gains and losses on this debt are offset against foreign currency
            translation adjustments on our net investment in foreign operations that
            are
            deferred as a separate component of shareholders' equity until realized
            under
            Canadian GAAP. Under U.S. GAAP, the related translation adjustments and
            the
            foreign currency translation gains and losses of the debt designated
            as a hedge
            are included in the determination of comprehensive earnings. If the debt
            were
            not designated as a hedge of our net investment, the impact of a change
            in
            foreign currency rates would directly impact the current year’s earnings under
            both Canadian and U.S. GAAP. A 1% movement in the foreign currency rates
            of our
            three major operating currencies (the pound sterling, the Norwegian kroner
            and
            the U.S dollar) against the Canadian dollar would have resulted in a
            $0.4 million change in net earnings from our self-sustaining foreign
            subsidiaries upon the translation of their income statement from their
            reporting
            currencies to Canadian dollars for the year ended April 30,
            2005.
  **INTEREST
            RATE RISK**
  We
            are also exposed
            to market risk from changes in interest rates, related primarily to variable
            interest rates on long-term debt and on certain helicopter lease agreements.
            During the year ended April 30, 2001, we entered into an interest
            rate swap
            agreement to fix the interest costs on £40.0 million of our senior credit
            facilities. We terminated this agreement late in fiscal 2004. A 1% change
            in
            variable interest rates on long-term debt, with all other variables remaining
            constant, would result in a $1.3 million change in interest expense
            for the
            year ended April 30, 2005. Such a change in interest rates would
            not have a
            material impact on the fair value of the related long-term debt. A 1%
            change in
            variable interest rates on our helicopter lease agreements, with all
            other
            variables remaining constant, would result in a $4.3 million change
            in
            lease expense for the year ended April 30, 2005.
  **EQUITY
            PRICE RISK**
  As
            of
            April 30, 2005, we were not exposed to material market risk from
            changes in
            the market value of long-term investments, as we did not hold any significant
            publicly traded long-term investments.
   ITEM
                      12.
                  DESCRIPTION
                      OF SECURITIES OTHER THAN EQUITY
                      SECURITIES
  Not
            applicable.
  105
 
 PART
              II
 ITEM
                      13.
                  DEFAULTS,
                      DIVIDEND ARREARAGES AND
                      DELINQUENCIES
  None.
   ITEM
                      14.
                  MATERIAL
                      MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF
                      PROCEEDS
  None.
   ITEM
                      15.
                  CONTROLS
                      AND
                      PROCEDURES
  As
            of
            April 30, 2005, an evaluation was performed under the supervision
            and with
            the participation of the Company’s management, including the CEO and CFO, of the
            effectiveness of the design and operation of the Company’s disclosure controls
            and procedures. Based on that evaluation, the Company’s management, including
            the CEO and CFO, concluded that the Company’s disclosure controls and procedures
            were effective as of April 30, 2005. During the annual period
            covered by
            this Form 20-F, there have been no changes in our internal control over
            financial reporting that have materially affected, or are reasonably
            likely to
            materially affect, our internal control over financial reporting. There
            have
            been no significant changes in the Company’s internal controls or in other
            factors that could significantly affect internal controls subsequent
            to
            April 30, 2005.
   ITEM
                      16A.
                  AUDIT
                      COMMITTEE FINANCIAL EXPERT
  CHC’s
            board of
            directors has determined that the Chairman of the Audit Committee, Dr.
            Jack
            Mintz, qualifies as an “audit committee financial expert” and that Dr. Mintz is
            independent under the listing standards of the New York Stock
            Exchange.
   ITEM
                      16B.
                  CODE
                      OF
                      ETHICS
  The
            Corporation
            amended its Code of Ethics and Business Conduct during fiscal 2004 to
            reflect
            SEC rules and New York Stock Exchange corporate governance listing standards.
            Our Code of Ethics and Business Conduct applies to our directors, officers
            and
            employees worldwide, including our principal executive officer, principal
            financial officer, principal accounting officer or persons performing
            similar
            functions. There have been no waivers of our Code of Ethics and Business
            Conduct
            granted to our principal executive officer, principal financial officer,
            principal accounting officer or controller, or similar persons during
            the period
            covered by this report. A copy of our Code of Ethics and Business Conduct
            is
            available on our website at *www.chc.ca* and in print from
            us upon request.
  106
  ITEM
                        16C.
                    PRINCIPAL
                        ACCOUNTANT FEES AND SERVICES
 For
            the years ended
            April 30, 2005 and 2004, amounts approved by the Audit Committee
            and paid
            by us in connection with services provided by our auditors, Ernst & Young,
            LLP (“E&Y”), were as follows:
  2005
                  
                  2004($ millions)Audit
                      Fees
                  
                  $
                  1.7
                  
                  $
                  1.5Audit-Related
                      Fees
                  
                  
                  0.1
                  
                  
                  0.3Tax
                      Fees
                  
                  
                  1.0
                  
                  
                  0.7All
                      Other Fees
                  
                  
                  0.1
                  
                  
                  0.1Total
                  
                  $
                  2.9
                  
                  $
                  2.6
  Audit
            Fees -
            consists of fees charged for the work necessary for the external auditor
            to
            render an opinion on our consolidated financial statements and the financial
            statements of our subsidiaries. In both fiscal 2004 and 2005 audit services
            consisted of services provided by E&Y in connection with expressing an
            opinion on our consolidated financial statements and also on the financial
            statements of our subsidiaries in jurisdictions where such audits are
            required
            by companies legislation or where such audits are required under other
            agreements. In 2005 fees for Audit services also included amounts paid
            in
            connection with the review of our interim financial statements, the provision
            of
            comfort letters, consents and comment letters in connection with our
            issue of
            U.S. $150 million senior subordinated notes. In 2004, fees for
            Audit
            services also included amounts paid in connection with our issue of U.S.
            $250
            million senior subordinated notes and the fiscal 2004 audit of our acquired
            subsidiary, Schreiner.
  Audit-Related
            Fees
            - consists primarily of fees for assurance and related services that
            are
            reasonably related to the performance of the audit of our financial statements.
            The fees for 2004 consisted primarily of amounts related to the December
            31,
            2003 audit of Schreiner that was acquired during 2004.
  Tax
            Fees - consists
            of fees paid in connection with tax compliance, tax planning, tax outsourcing,
            and tax advice provided to us and our subsidiaries. Tax services in both
            years
            include fees paid to E&Y in connection with ongoing tax planning and other
            initiatives being considered by us.
  All
            Other Fees -
            includes fees for services that are not audit, audit-related, or tax
            services,
            but which are not prohibited services. In 2005, this included fees in
            connection
            with SOX compliance. In 2004, this included fees in connection
            with an
            information system implementation review.
  The
            Audit Committee
            has considered whether the provision of services other than audit services
            is
            compatible with maintaining the auditors’ independence and concluded that the
            level of services provided during 2005 would not impact the independence
            of the
            auditors. The Audit Committee has adopted a policy that prohibits us
            from
            engaging the auditors for “prohibited” categories of non-audit services and
            requires pre-approval of the Audit Committee for other permissible categories
            of
            non-audit services, such categories as determined by SEC rules. To facilitate
            the pre-approval of audit and non-audit services between meetings of
            the
            Committee, the Audit Committee has detailed procedures that permit this
            responsibility to be delegated to the Chair of the Committee, who will
            present
            any amounts pre-approved at the next meeting of the Committee for
            ratification.
   ITEM
                      16D.
                  EXEMPTIONS
                      FROM THE LISTING STANDARDS FOR AUDIT
                      COMMITTEES
  Not
            applicable.
  107
 
 ITEM
                        16E.
                    PURCHASE
                        OF
                        EQUITY SECURITIES BY ISSUER AND AFFILIATED
                        PURCHASERS
 Not
            applicable.
  108
 
 PART
              III
  ITEM
                      17.
                  FINANCIAL
                      STATEMENTS
  Not
            applicable.
   ITEM
                      18.
                  FINANCIAL
                      STATEMENTS
  The
            financial
            statements and supplementary information required to be filed under this
            item
            are presented on pages 110 through
            167 of
            this Annual
            Report on Form 20-F, and are incorporated herein by reference. Such financial
            statements and supplementary information supersede the financial statements
            contained in Exhibit 99.2 to the Company’s report on Form 6-K, furnished on
            August 4, 2005, and Exhibit 99.1 to the Company’s second report on
            Form 6-K, furnished on September 1, 2005.
  Contents
  PageAUDITORS’
                      REPORT
                  110CONSOLIDATED
                      BALANCE SHEETS
                  111CONSOLIDATED
                      STATEMENTS OF EARNINGS
                  112CONSOLIDATED
                      STATEMENTS OF SHAREHOLDERS’ EQUITY
                  113CONSOLIDATED
                      STATEMENTS OF CASH FLOWS
                  114NOTES
                      TO THE
                      CONSOLIDATED FINANCIAL STATEMENTS
                  115
  109
 
 AUDITORS’
            REPORT
  To
            the Shareholders
            of CHC Helicopter Corporation
  We
            have audited the
            consolidated balance sheets of CHC Helicopter Corporation as at April 30,
            2005 and 2004 and the consolidated statements of earnings, shareholders’ equity
            and cash flows for the three years ended April 30, 2005, 2004
            and 2003.
            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 Canadian generally accepted auditing standards
            and the
            standards of the Public Company Accounting Oversight Board (United States).
            Those standards require that we plan and perform an audit to obtain reasonable
            assurance 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,
            these consolidated financial statements present fairly, in all material
            respects, the financial position of the Company as at April 30,
            2005 and
            2004 and the results of its operations and its cash flows for the three
            years
            ended April 30, 2005, 2004 and 2003 in accordance with Canadian
            generally
            accepted accounting principles.
  
  Chartered
            Accountants
 St.
            John’s,
            Canada
 June
            3, 2005
            (except for Notes 34, 35 and 36 which are
            as at September 9, 2005)
 
 110
  CHC
            Helicopter Corporation
 CONSOLIDATED
            BALANCE SHEETS
 As
            at April 30 (in
            thousands of Canadian dollars)
 Incorporated
            under
            the laws of Canada
  **2005**
                  
                  2004
                    *(Note
                      4)***Assets*******(Note 15)*Current
                      assetsCash
                      and cash
                      equivalents*(Notes 4(d)
                      and 9)*
                  
                  **$**
                  **51,391**
                  
                  $
                  61,079Receivables
                  
                  
                  **216,810**
                  
                  
                  185,076Future
                      income
                      tax assets*(Note 24)*
                  
                  
                  **23,802**
                  
                  
                  12,816Inventory*(Note
                      4(a))*
                  
                  
                  **216,513**
                  
                  
                  203,365Prepaid
                      expenses
                  
                  
                  **7,991**
                  
                  
                  11,245Assets
                      of
                      discontinued operations*(Note
                      8)*
                  
                  
                  **12,657**
                  
                  
                  28,937**529,164**
                  
                  
                  502,518Property
                      and
                      equipment, net*(Notes
                      4(a) and 10)*
                  
                  
                  **851,210**
                  
                  
                  734,405Investments*(Note 11)*
                  
                  
                  **58,806**
                  
                  
                  48,242Intangible
                      assets*(Notes
                      7
                      and 12)*
                  
                  
                  **6,499**
                  
                  
                  -Goodwill*(Note
                      7)*
                  
                  
                  **8,861**
                  
                  
                  -Other
                      assets*(Notes 4(d)
                      and 13)*
                  
                  
                  **235,016**
                  
                  
                  178,893Future
                      income
                      tax assets*(Note 24)*
                  
                  
                  **50,184**
                  
                  
                  44,312Assets
                      of
                      discontinued operations*(Note
                      8)*
                  
                  
                  **3,495**
                  
                  
                  26,513**$**
                  **1,743,235**
                  
                  $
                  1,534,883**Liabilities
                      and shareholders’ equity**Current
                      liabilitiesPayables
                      and
                      accruals
                  
                  **$**
                  **212,965**
                  
                  $
                  169,329Deferred
                      revenue and redelivery obligations*(Note
                      4(b))*
                  
                  
                  **22,574**
                  
                  
                  13,939Dividends
                      payable
                  
                  
                  **6,404**
                  
                  
                  5,194Income
                      taxes
                      payable
                  
                  
                  **23,628**
                  
                  
                  6,328Future
                      income
                      tax liabilities*(Note 24)*
                  
                  
                  **705**
                  
                  
                  2,212Current
                      portion of debt obligations*(Note 15(f))*
                  
                  
                  **26,812**
                  
                  
                  38,046Liabilities
                      of discontinued operations*(Note
                      8)*
                  
                  
                  **2,153**
                  
                  
                  23,856**295,241**
                  
                  
                  258,904Long-term
                      debt*(Note 15(a))*
                  
                  
                  **97,543**
                  
                  
                  133,305Senior
                      subordinated notes*(Note 15(b))*
                  
                  
                  **502,760**
                  
                  
                  342,675Other
                      liabilities*(Notes
                      4(b) and 18)*
                  
                  
                  **142,507**
                  
                  
                  153,219Future
                      income
                      tax liabilities*(Note 24)*
                  
                  
                  **195,692**
                  
                  
                  179,188Liabilities
                      of discontinued operations*(Note
                      8)*
                  
                  
                  **3,493**
                  
                  
                  5,880**Shareholders’
                      equity**
                  
                  
                  **505,999**
                  
                  
                  461,712**$**
                  **1,743,235**
                  
                  $
                  1,534,883
  Commitments,
            guarantees and contingent liabilities *(Notes* *15* *,* *28* *,* *30* *and* *31* *)*
  On
            behalf of the
            Board:
  pg111a
                  pg111b
 See
            accompanying
            notes
  111
  CHC
            Helicopter
            Corporation  CONSOLIDATED
            STATEMENTS OF EARNINGS
 Year
            ended April 30
            (in thousands of Canadian dollars, except per share amounts)
  **2005**
                  
                  2004
                    *(Note
                      4)*
                  
                  2003
                    *(Note
                      4)***Revenue**
                  
                  **$**
                  **903,344**
                  
                  $
                  720,013
                  
                  $
                  711,887Direct
                      costs
                  
                  
                  **(702,167**
                  **)**
                  
                  (575,971
                  )
                  
                  (545,960
                  )General
                      and
                      administration costs
                  
                  
                  **(25,803**
                  **)**
                  
                  (18,633
                  )
                  
                  (21,467
                  )Amortization
                  
                  
                  **(30,533**
                  **)**
                  
                  (25,188
                  )
                  
                  (20,485
                  )Restructuring
                      costs*(Note
                      16)*
                  
                  
                  **(17,612**
                  **)**
                  
                  (9,181
                  )
                  
                  -Gain
                      on
                      disposals of assets
                  
                  
                  **4,105**
                  
                  
                  3,307
                  
                  
                  2,413**Operating
                      income**
                  
                  
                  **131,334**
                  
                  
                  94,347
                  
                  
                  126,388Debt
                      settlement costs*(Note 17)*
                  
                  
                  **(1,994**
                  **)**
                  
                  (19,716
                  )
                  
                  (12,464
                  )Financing
                      charges*(Note 15(e))*
                  
                  
                  **(37,120**
                  **)**
                  
                  (28,954
                  )
                  
                  (34,530
                  )**Earnings
                      from continuing operations before income taxes and undernoted
                      items**
                  
                  
                  **92,220**
                  
                  
                  45,677
                  
                  
                  79,394Non-controlling
                      interest
                  
                  
                  **(288**
                  **)**
                  
                  -
                  
                  
                  -Equity
                      in
                      earnings of associated companies
                  
                  
                  **5,481**
                  
                  
                  3,925
                  
                  
                  2,340Income
                      tax
                      (provision) recovery*(Note 24)*
                  
                  
                  **(23,835**
                  **)**
                  
                  16,648
                  
                  
                  (1,972
                  )**Net
                      earnings from continuing operations**
                  
                  
                  **73,578**
                  
                  
                  66,250
                  
                  
                  79,762Net
                      loss from
                      discontinued operations*(Note 8)*
                  
                  
                  **(11,019**
                  **)**
                  
                  (2,574
                  )
                  
                  (14,297
                  )**Net
                      earnings**
                  
                  **$**
                  **62,559**
                  
                  $
                  63,676
                  
                  $
                  65,465Earnings
                      per
                      share*(Note 25)*BasicNet
                      earnings
                      from continuing operations
                  
                  **$**
                  **1.75**
                  
                  $
                  1.60
                  
                  $
                  1.92Net
                      loss from
                      discontinued operations
                  
                  
                  **(0.26**
                  **)**
                  
                  (0.06
                  )
                  
                  (0.34
                  )Net
                      earnings
                  
                  
                  **1.49**
                  
                  
                  1.54
                  
                  
                  1.58DilutedNet
                      earnings
                      from continuing operations
                  
                  **$**
                  **1.61**
                  
                  $
                  1.47
                  
                  $
                  1.76Net
                      loss from
                      discontinued operations
                  
                  
                  **(0.24**
                  **)**
                  
                  (0.06
                  )
                  
                  (0.30
                  )Net
                      earnings
                  
                  
                  **1.37**
                  
                  
                  1.41
                  
                  
                  1.46
  See
            accompanying
            notes
  112
 
 CHC
            Helicopter
            Corporation
 CONSOLIDATED
            STATEMENTS OF SHAREHOLDERS’ EQUITY
 Year
            ended April 30
            (in thousands of Canadian dollars, except per share amounts)
  **2005**
                  
                  2004
                    *(Note
                      4)*
                  
                  2003
                    *(Note
                      4)***Retained
                      earnings, beginning of year**
                  
                  **$**
                  **229,866**
                  
                  $
                  176,676
                  
                  $
                  115,227Net
                      earnings
                  
                  
                  **62,559**
                  
                  
                  63,676
                  
                  
                  65,465Dividends
                  
                  
                  **(12,805**
                  **)**
                  
                  (10,486
                  )
                  
                  (4,016
                  )**Retained
                      earnings, end of year**
                  
                  
                  **279,620**
                  
                  
                  229,866
                  
                  
                  176,676Capital
                      stock*(Note 19)*
                  
                  
                  **239,469**
                  
                  
                  238,428
                  
                  
                  236,962Contributed
                      surplus*(Note 19)*
                  
                  
                  **3,291**
                  
                  
                  3,291
                  
                  
                  3,291Foreign
                      currency translation adjustment*(Note 22)*
                  
                  
                  **(16,381**
                  **)**
                  
                  (9,873
                  )
                  
                  (3,884
                  )**Total
                      shareholders’ equity**
                  
                  **$**
                  **505,999**
                  
                  $
                  461,712
                  
                  $
                  413,045Dividends
                      per
                      participating voting share1
                  
                  **$**
                  **0.30**
                  
                  $
                  0.25
                  
                  $
                  0.10
 1 Adjusted
            for April
            2005 2-for-1 stock split
  See
            accompanying
            notes
  113
 
 CHC
            Helicopter
            Corporation
 CONSOLIDATED
            STATEMENTS OF CASH FLOWS
 Year
            ended April 30
            (in thousands of Canadian dollars)
  **2005**
                  
                  2004
                    *(Note
                      4)*
                  
                  2003
                    *(Note
                      4)***Operating
                      activities**Net
                      earnings
                      from continuing operations
                  
                  **$**
                  **73,578**
                  
                  $
                  66,250
                  
                  $
                  79,762Non-operating
                      items and items not involving cash:Amortization
                  
                  
                  **30,533**
                  
                  
                  25,188
                  
                  
                  20,485Amortization
                      of major components recorded as direct costs*(Note
                      4(b))*
                  
                  
                  **63,333**
                  
                  
                  56,861
                  
                  
                  51,531Gain
                      on
                      disposals of assets
                  
                  
                  **(4,105**
                  **)**
                  
                  (3,307
                  )
                  
                  (2,413
                  )Equity
                      in
                      earnings of associated companies
                  
                  
                  **(5,481**
                  **)**
                  
                  (3,925
                  )
                  
                  (2,340
                  )Future
                      income
                      taxes*(Note 21)*
                  
                  
                  **15,263**
                  
                  
                  (27,947
                  )
                  
                  (9,225
                  )Non-cash
                      financing charges
                  
                  
                  **1,794**
                  
                  
                  4,087
                  
                  
                  168Debt
                      settlement costs
                  
                  
                  **1,994**
                  
                  
                  19,716
                  
                  
                  12,464Defined
                      benefit pension plans
                  
                  
                  **(13,280**
                  **)**
                  
                  (3,462
                  )
                  
                  (10,934
                  )Deferred
                      revenue
                  
                  
                  **(6,618**
                  **)**
                  
                  1,096
                  
                  
                  (3,347
                  )Advance
                      aircraft rental payments
                  
                  
                  **(7,513**
                  **)**
                  
                  (12,598
                  )
                  
                  (3,304
                  )Amortization
                      of deferred gains
                  
                  
                  **(7,685**
                  **)**
                  
                  (4,440
                  )
                  
                  (1,605
                  )Schreiner
                      contract credits
                  
                  
                  **(6,418**
                  **)**
                  
                  (965
                  )
                  
                  -Pre-operating
                      expenses
                  
                  
                  **(3,515**
                  **)**
                  
                  1,473
                  
                  
                  (3,113
                  )Other
                  
                  
                  **(260**
                  **)**
                  
                  5,598
                  
                  
                  4,325**131,620**
                  
                  
                  123,625
                  
                  
                  132,454Change
                      in
                      non-cash working capital*(Note 26)*
                  
                  
                  **6,580**
                  
                  
                  (33,018
                  )
                  
                  (18,194
                  )Cash
                      flow
                      from operations
                  
                  
                  **138,200**
                  
                  
                  90,607
                  
                  
                  114,260**Financing
                      activities**Long-term
                      debt proceeds
                  
                  
                  **384,684**
                  
                  
                  496,862
                  
                  
                  38Long-term
                      debt repayments
                  
                  
                  **(243,582**
                  **)**
                  
                  (342,001
                  )
                  
                  (123,204
                  )Debt
                      settlement
                  
                  
                  **(1,765**
                  **)**
                  
                  (37,883
                  )
                  
                  (9,136
                  )Deferred
                      financing costs
                  
                  
                  **(5,598**
                  **)**
                  
                  (13,200
                  )
                  
                  -Dividends
                      paid
                  
                  
                  **(11,596**
                  **)**
                  
                  (5,291
                  )
                  
                  (4,016
                  )Capital
                      stock
                      issued
                  
                  
                  **907**
                  
                  
                  3,289
                  
                  
                  596**123,050**
                  
                  
                  101,776
                  
                  
                  (135,722
                  )**Investing
                      activities**Additions
                      to
                      property and equipment
                  
                  
                  **(197,596**
                  **)**
                  
                  (116,881
                  )
                  
                  (44,669
                  )Helicopter
                      major inspections
                  
                  
                  **(15,539**
                  **)**
                  
                  (9,237
                  )
                  
                  (13,384
                  )Helicopter
                      components
                  
                  
                  **(63,254**
                  **)**
                  
                  (59,027
                  )
                  
                  (47,489
                  )Proceeds
                      from
                      disposal
                  
                  
                  **90,940**
                  
                  
                  126,898
                  
                  
                  74,865Aircraft
                      deposits
                  
                  
                  **(52,983**
                  **)**
                  
                  (23,574
                  )
                  
                  (6,730
                  )Long-term
                      receivables repaid (advanced)
                  
                  
                  **995**
                  
                  
                  (1,147
                  )
                  
                  7,386Restricted
                      cash
                  
                  
                  **(5,323**
                  **)**
                  
                  (9,826
                  )
                  
                  -Investment
                      in
                      subsidiaries, net of cash acquired*(Note 7)*
                  
                  
                  **(17,984**
                  **)**
                  
                  (97,540
                  )
                  
                  -Other
                  
                  
                  **(7,302**
                  **)**
                  
                  4,166
                  
                  
                  (1,782
                  )**(268,046**
                  **)**
                  
                  (186,168
                  )
                  
                  (31,803
                  )Effect
                      of
                      exchange rate changes on cash and cash equivalents
                  
                  
                  **(3,821**
                  **)**
                  
                  1,747
                  
                  
                  1,717Cash
                      (used
                      in) provided by continuing operations
                  
                  
                  **(10,617**
                  **)**
                  
                  7,962
                  
                  
                  (51,548
                  )Cash
                      provided
                      by (used in) discontinued operations
                  
                  
                  **929**
                  
                  
                  (4,987
                  )
                  
                  (3,186
                  )Change
                      in
                      cash and cash equivalents during the year
                  
                  
                  **(9,688**
                  **)**
                  
                  2,975
                  
                  
                  (54,734
                  )**Cash
                      and cash equivalents, beginning of year**
                  
                  
                  **61,079**
                  
                  
                  58,104
                  
                  
                  112,838**Cash
                      and cash equivalents, end of year**
                  
                  **$**
                  **51,391**
                  
                  $
                  61,079
                  
                  $
                  58,104
 
 See
            accompanying
            notes
  114
  CHC
              Helicopter
              Corporation
 Notes
              to the
              Consolidated Financial Statements
 April 30,
              2005, 2004 and 2003
 (Tabular
              amounts in
              thousands unless otherwise noted, except per share amounts)
 **1.**
                    **DESCRIPTION
                        OF THE BUSINESS**
 CHC
            Helicopter
            Corporation (“CHC”) is a leading provider of helicopter transportation services
            to the global oil and gas industry. CHC currently operates in over 30
            countries,
            with major operating units in Europe (Norway, the Netherlands and the
            United
            Kingdom), South Africa, Australia and Canada. CHC principally provides
            helicopter transportation services to the oil and gas industry for production
            and exploration activities as well as emergency medical and search and
            rescue
            services. The Company also provides repair and overhaul and other helicopter
            support services including aircraft leasing, parts sales and distribution
            and
            inventory management.
  **2.**
                  **SUMMARY
                      OF SIGNIFICANT ACCOUNTING
                      POLICIES**
  Basis
            of
            presentation
  The
            consolidated
            financial statements include the accounts of CHC and its direct and indirect
            controlled subsidiaries (collectively, the “Company”). All inter-company
            transactions and balances have been eliminated upon consolidation. The
            consolidated financial statements have been prepared by management in
            accordance
            with Canadian generally accepted accounting principles (“Canadian GAAP”) and are
            in accordance with generally accepted accounting principles in the
            United States (“U.S. GAAP”) except as described in Note 34 .
  Foreign
            currency
            translation
  Balance
            sheet and
            income statement transactions denominated in other than the functional
            currency
            of the operating divisions are translated into the divisions’ functional
            currency at the rate of exchange at the beginning of the month in which
            the
            transaction occurred except for material transactions which are translated
            at
            the spot foreign exchange rate. At each balance sheet date foreign currency
            denominated monetary assets and liabilities are revalued at the foreign
            exchange
            rate in effect at such date.
  The
            Company’s
            foreign subsidiaries are financially and operationally self-sustaining.
            Accordingly, the current rate method is used for the translation of their
            financial statements to Canadian dollars upon consolidation. Under this
            method,
            the assets and liabilities of these subsidiaries are translated at the
            rate of
            exchange in effect at the balance sheet date. Revenue and expense items
            are
            translated at the average exchange rate in effect during the period.
            Exchange
            gains or losses arising from the current rate method of translation are
            deferred
            in a separate component of shareholders’ equity. Such gains or losses are
            included in the determination of net earnings when there is a reduction
            in the
            net investment in the foreign subsidiary as a result of a dilution or
            sale of
            part or all of the Company’s interest in the foreign subsidiary or as a result
            of capital transactions including dividend distributions and capital
            restructuring.
  The
            Company has
            certain foreign currency denominated long-term debt that have been designated
            as
            an effective hedge of certain of its self-sustaining foreign subsidiaries.
            Upon
            translation of such debt into Canadian dollars, any gains or losses are
            also
            deferred in a separate component of shareholders’ equity to be recognized in net
            earnings when there is a reduction in the net investment in the
            subsidiaries.
  Cash
            and cash
            equivalents
  Cash
            and cash
            equivalents consist of cash on hand, with banks and investments in money
            market
            instruments with original maturities of less than 90 days that
            are readily
            convertible to known amounts of cash and that are subject to an insignificant
            risk of a material change in value.
  Inventory
  Inventory,
            consisting primarily of aircraft parts held for the completion of repair
            and
            overhaul work for external customers, is valued at the lower of average
            cost and
            replacement cost less an allowance for obsolescence which considers the
            lives of
            the related aircraft fleet and other factors. The cost of overhauled
            inventory
            includes the cost of raw materials, direct labour and related
            overhead.
  115
 CHC
              Helicopter
              Corporation
 Notes
              to the
              Consolidated Financial Statements
 April 30,
              2005, 2004 and 2003
 (Tabular
              amounts in
              thousands unless otherwise noted, except per share
              amounts)
 Property
              and
              equipment
 Property
            and
            equipment includes flying assets, facilities and equipment that are amortized
            over their estimated useful lives under the following methods:
  (a)
                  Flying
                      assets
  (i)
                  Airframes
                      represent approximately 25% to 30% of the value of an aircraft
                      and are
                      amortized on a straight-line basis to amortization expense
                      over their
                      estimated useful life of 25 years. At pre-determined
                      intervals, as
                      specified by the original manufacturer and aviation regulatory
                      authorities, airframes require major inspections. The cost
                      of these major
                      inspections for both owned and leased aircraft is capitalized
                      and
                      amortized to amortization expense over their expected period
                      of future
                      benefit based on flight hours.
  (ii)
                  Components
                      comprise approximately 70% to 75% of the value of an aircraft
                      and consist
                      of major components (i.e. engine, rotor heads, gearboxes and
                      blades) and
                      non-major components. The major components are required to
                      be inspected
                      and overhauled at intervals as specified by the original equipment
                      manufacturer and aviation regulatory authorities. Costs incurred
                      to
                      perform these inspections and overhauls for owned aircraft
                      are capitalized
                      and amortized to operating expense to their residual value
                      over their
                      expected period of future benefit based on flight hours. Non-major
                      repair
                      and maintenance costs are expensed as
                      incurred.
  (b)
                  Facilities
                      and equipment
  Facilities
            are
            composed of hangars, heliports and other buildings housing base operations
            and
            administrative support. Equipment includes training, repair and overhaul,
            manufacturing and base equipment and vehicles. Such facilities and equipment
            are
            amortized on a declining balance basis at 5% and 20%, respectively. Leasehold
            improvements associated with leased facilities and equipment are capitalized
            and
            amortized on a straight-line basis over the respective lease term.
  Investments
  Long-term
            investments through which the Company exerts significant influence over
            the
            investee are accounted for by the equity method. Under this method, the
            investment is initially recorded at cost and the carrying value is adjusted
            thereafter to include the Company’s pro-rata share of post acquisition earnings
            of the investee. All other long-term investments are carried at cost
            and income
            on these investments is recognized only to the extent of dividends received.
            When there has been a decline in the value of an investment that is other
            than
            temporary, the investment is written down to estimated net realizable
            value.
  Intangible
            assets
  The
            Company
            amortizes its intangible assets on a straight-line basis over their estimated
            useful lives ranging from 4 to 10 years. Intangible
            assets are
            reviewed for valuation on an annual basis. When events and circumstances
            indicate that carrying amounts may not be recoverable, a writedown to
            fair value
            is charged to income in the period that such a determination is
            made.
  Goodwill
  Goodwill
            represents
            the excess of the cost of investments in subsidiaries over the fair value
            of the
            net identifiable assets acquired. The Company reviews the goodwill of
            all its
            reporting units on at least an annual basis to ensure its fair value
            is in
            excess of its carrying value. Any impairment in the value of goodwill
            is charged
            to income in the period such impairment is determined.
  Deferred
            financing
            costs
  Costs
            incurred in
            connection with securing debt financing have been deferred and are amortized
            over the terms of the related debt.
  116
 
 CHC
              Helicopter
              Corporation
 Notes
              to the
              Consolidated Financial Statements
 April 30,
              2005, 2004 and 2003
 (Tabular
              amounts in
              thousands unless otherwise noted, except per share amounts)
 Pre-operating
              expenses
  The
            Company defers
            expenses net of incremental revenues related to the operations of new
            businesses
            and customer contracts in the period prior to the new business or contract
            being
            capable of consistently providing its intended product and/or service.
            Deferral
            occurs where the expenses are related directly to placing the new business
            or
            new contract into commercial service, are incremental in nature and are
            considered by the Company to be recoverable from the future operations
            and
            conditions of the new business or contract. Deferral ceases at the earlier
            of
            the achievement of a specified commercial activity level, the passage
            of a
            specified period of time or at the start of the new contract. Amortization
            of
            the deferred expenses related to the operations of new businesses is
            based on
            their expected period of benefit, not exceeding five years. Amortization
            of
            deferred expenses related to new contracts is amortized over the contract
            term.
            The Company periodically evaluates the recoverability of the deferred
            expenses
            from future cash flows from operations to determine whether any writedown
            of
            such deferred expenses to net recoverable amounts is required.
  Impairment
            of
            long-lived assets
  The
            Company
            recognizes an impairment loss on long-lived assets when their carrying
            value
            exceeds the total expected undiscounted cash flows from their use or
            disposition. The Company’s long-lived assets are tested for impairment when an
            event or change in circumstances indicates that their carrying value
            may not be
            recoverable.
  Deferred
            revenue
            and redelivery obligations
  The
            Company defers
            the portion of the power-by-the-hour charges to third party customers
            that
            relates to work to be performed in future periods and recognizes the
            revenue in
            earnings when the work is performed.
  Redelivery
            obligations arise under the terms of the Company’s lease agreements, which
            specify that an aircraft must be returned with its major components in
            substantially the same condition as at the inception of the lease. The
            Company
            provides for this obligation based on flight hours.
  Government
            assistance
  Government
            assistance relating to the acquisition of facilities and equipment is
            deferred
            and amortized over the life of the assets to which it relates. Government
            assistance relating to operations is recorded as income in the same period
            as
            the related expense.
  Revenue
            recognition
  Revenue
            from
            helicopter operations is recognized based on the terms of customer contracts
            that generally provide for revenue on the basis of hours flown at contract
            rates
            or fixed monthly charges or a combination of both.
  Training
            revenue is
            recognized based on the terms of customer contracts that generally provide
            for
            revenue on the basis of training hours provided.
  Revenue
            from engine
            and component repair and overhaul and composites manufacturing operations
            is
            recognized on the percentage of completion basis and is measured on the
            basis of
            the sales value of the actual costs incurred and work performed. Customers
            are
            usually invoiced in advance for repair and overhaul services performed
            under
            power-by-the-hour” (“PBH”) contracts. Typically, a portion of this revenue is
            recognized on a monthly basis to reflect ongoing services provided, with
            the
            balance recognized when the major repair and overhaul activities are
            completed.
            Any loss on repair and overhaul and composites manufacturing contracts
            is
            recognized in earnings immediately when known.
  117
 
 CHC
              Helicopter
              Corporation
 Notes
              to the
              Consolidated Financial Statements
 April 30,
              2005, 2004 and 2003
 (Tabular
              amounts in
              thousands unless otherwise noted, except per share amounts)
 Pension
              costs and
              obligations
  The
            Company has
            defined contribution and defined benefit pension plans covering substantially
            all of its employees. In valuing accrued obligations for its defined
            benefit
            plans, because future salary levels affect the amount of employee future
            benefits, the Company uses the projected benefit method prorated on service
            and
            best estimate assumptions. Pension plan assets are carried at fair values.
            For
            purposes of calculating the expected return on assets, the Company uses
            the fair
            value of the plan assets. The excess of unrecognized net actuarial gains
            and
            losses over 10% of the greater of the benefit obligation and the fair
            value of
            plan assets is amortized over the average remaining service life of the
            plan
            participants. Prior service costs, plan amendments and transition amounts
            are
            amortized on a straight-line basis over the expected average remaining
            service
            life of the plan participants.
  Income
            taxes
  The
            Company uses
            the liability method of accounting for income taxes. Under the liability
            method,
            future income tax assets and liabilities are determined based on temporary
            differences between the financial reporting and tax bases of assets and
            liabilities and are measured using tax rates substantially enacted at
            the
            balance sheet date. The effect of changes in income tax rates on future
            income
            tax assets and liabilities is recognized in income in the period that
            the change
            becomes substantially enacted.
  Earnings
            per
            share
  Basic
            earnings per
            share is based on the weighted average number of common shares outstanding
            for
            the year. Diluted earnings per share is computed in accordance with the
            treasury
            stock method and based on the weighted average number of common shares
            and
            dilutive common share equivalents.
  Stock-based
            compensation plans
  Effective
            May 1, 2003, for new stock option compensation awards, the Company
            expenses
            stock option costs using the fair value method resulting in the recording
            of
            compensation expense based upon grade vesting of share options. During
            fiscal
            2005 and 2004, the Company disclosed supplemental pro-forma net earnings
            and
            earnings per share information as if the fair value method of accounting
            was
            used for share options issued during fiscal 2003 (Note 20 ).
  The
            Company uses
            the fair value method to account for specified stock-based compensation
            awards
            issued under the Company’s Stock Appreciation Rights Plan and Performance Units
            Plan (“SARs”) (Note 14 ).
            Compensation
            expense related to SARs is recognized, based on grade vesting, as the
            amount by
            which the quoted market value of the Company’s Class A subordinate voting
            shares on the Toronto Stock Exchange (“TSX”) exceeds the value as specified
            under the SARs plans.
  Financial
            instruments
  The
            Company
            periodically enters into derivative financial instruments such as foreign
            forward exchange contracts and equity forward price agreements to manage
            foreign
            exchange risks and stock price volatility. The Company does not enter
            into
            derivative instruments for trading or speculative purposes. To qualify
            for hedge
            accounting the financial instrument should be identified as a hedge of
            the item
            to which it relates and there should be reasonable assurance that it
            is and will
            continue to be an effective hedge. The Company’s policy is to formally assess
            and document, both at the hedge’s inception and on a quarterly basis, whether
            the hedging relationships have been highly effective over the period
            and if
            there have been any changes in the credit risk of the counterparty. Gains
            and
            losses on financial instruments designated as hedges of self-sustaining
            foreign
            operations are recorded in the foreign currency translation adjustment
            in
            shareholders’ equity. Gains and losses on financial instruments designated as
            cash flow or fair value hedges are recognized in earnings in the same
            period as
            the underlying transactions. Changes in the fair value of financial instruments
            not designated in hedge relationships are recognized in earnings immediately.
            Payments and receipts under the equity forward price agreement associated
            with
            the hedged units granted but unvested under the Company’s SARs plans are
            recognized as a deferred gain (loss) to be recorded as an offset to the
            related
            expense as the units grade vest.
  118
 
 CHC
            Helicopter
            Corporation
 Notes
            to the
            Consolidated Financial Statements
 April 30,
            2005, 2004 and 2003
 (Tabular
            amounts in
            thousands unless otherwise noted, except per share amounts)
 Gains
            or losses
            associated with financial instruments that have been terminated or cease
            to be
            effective prior to maturity are deferred and recognized in earnings in
            the
            period in which the underlying hedged item is recognized. In the event
            a
            designated hedged item is sold, extinguished or matures prior to termination
            of
            the related financial instrument, gains or losses on such instrument
            are
            recognized in earnings in the current period.
  **3.**
                  **CHANGES
                      IN ACCOUNTING POLICIES**
  Hedging
            Relationships
  Effective
            May 1, 2004, the Company prospectively adopted Canadian Accounting
            Guideline 13 (“AcG-13”) with respect to hedging relationships as it relates
            to the identification, designation, documentation and effectiveness of
            hedging
            relationships for the purpose of applying hedge accounting.
  The
            Company also
            adopted at May 1, 2004, the Canadian Emerging Issues Committee
            Abstract 128 (“EIC-128”). Under EIC-128, if a derivative financial
            instrument is not part of a qualifying hedging relationship, the Company
            is
            required to record such instrument on the balance sheet at fair value,
            with
            changes in fair value recognized in current earnings. The Company did
            not apply
            AcG-13 or EIC-128 retroactively.
  Stock-based
            compensation plans
  Effective
            May 1,
            2002, the Company retroactively adopted, without restatement of individual
            prior
            periods, the new Canadian accounting recommendations with respect to
            stock-based
            compensation. The recommendations require the use of a fair value based
            approach
            to account for specified stock-based compensation awards which include
            the
            Company’s SARs. The impact of adopting the new recommendations in fiscal 2003
            related to the Company’s SARs granted prior to May 1, 2002 was a charge against
            May 1, 2002 opening retained earnings of $1.7 million.
  These
            recommendations also encouraged but did not require that compensation
            expense
            related to share options be calculated under the fair value method. Where
            the
            fair value method was not used, pro-forma disclosures of net earnings
            per
            share had the fair value method been used was required. In fiscal 2003
            the
            Company disclosed supplemental pro-forma net earnings and earnings per
            share
            information as if the fair value method of accounting was used for share
            option
            compensation awards issued on or after May 1, 2002, and, accordingly
            did not
            recognize compensation cost for such share options. Effective May 1,
            2003, the
            Company began expensing stock-option awards using the fair value method.
            This
            accounting change was applied prospectively in fiscal 2004 relating to
            stock
            options issued on or after May 1, 2003. There was no impact on the financial
            results for fiscal 2004 as a result of adopting this accounting policy
            change as
            no new stock options were granted during the year.
  Translation
            of
            foreign currencies
  Effective
            May 1,
            2002, the Company retroactively adopted, with restatement of individual
            prior
            periods, the new Canadian accounting recommendations with respect to
            foreign
            currency translation which conform substantially to U.S. GAAP. These
            recommendations require that unrealized exchange gains and losses on
            the
            translation of long-term debt that has not been designated as a hedge
            of the
            Company’s net investment in self-sustaining foreign operations be included in
            earnings immediately. The impact of adopting these new recommendations
            in fiscal
            2003 was an increase in May 1, 2002 opening retained earnings of $0.2
            million
            and an increase in fiscal 2003 pre-tax earnings of approximately $0.8
            million.
  **4.**
                  **COMPARATIVE
                      FIGURES**
  Certain
            comparative
            figures have been reclassified to conform to the current year’s presentation.
            The most significant changes include:
  (a)
                  The
                      reclassification of $52.4 million of inventory at April 30,
                      2004
                      to property and equipment. This reclassification relates to
                      certain
                      inventory items on hand in the Company’s repair and overhaul segment that
                      are intended to be used and capitalized with respect to future
                      internal
                      major component overhaul work;
  119
 
 CHC
              Helicopter
              Corporation
 Notes
              to the
              Consolidated Financial Statements
 April 30,
              2005, 2004 and 2003
 (Tabular
              amounts in
              thousands unless otherwise noted, except per share amounts)
  (b)
                      The
                          reclassification in the consolidated statement of cash
                          flows for the year
                          ended April 30, 2004 of $56.9 million (2003
                          - $62.8 million) for
                          the non-cash impact of the amortization of major components
                          and redelivery
                          obligation costs recorded as operating expense from helicopter
                          components
                          in investing activities to items not involving cash in
                          operating
                          activities. As well, deferred revenue and redelivery obligations
                          now
                          includes the reclassification of the current portion of
                          redelivery
                          obligations on leased aircraft. The long term portion of
                          these obligations
                          is included in other liabilities;
 (c)
                  The
                      comparative consolidated balance sheet, statements of earnings
                      and cash
                      flows have been reclassified to reflect the results of discontinued
                      operations consistent with the current year’s presentation
                      (Note8);
                      and
  (d)
                  The
                      reclassification of $6.0 million of cash at April 30,
                      2004 to
                      other assets. This reclassification relates to certain cash
                      that is
                      subject to restrictions that prevent its use for current operating
                      purposes.
  **5.**
                  **ACCOUNTING
                      ESTIMATES AND MEASUREMENT
                      UNCERTAINTY**
  The
            preparation of
            these consolidated 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. By their nature these estimates are subject to measurement uncertainty.
            The effect on the financial statements of changes in such estimates in
            future
            periods could be material and would be accounted for in the period the
            change
            occurs. The following are significant areas in which management makes
            significant accounting estimates:
  (a)
                  Recoverability
                      of pre-operating expenses
  The
            ability to
            defer pre-operating expenses is dependent on the future recoverability
            of the
            amounts from cash flows generated by the related commercial operations.
            If
            operations perform below anticipated recoverable levels, the portion
            of
            pre-operating expenses that cannot be recovered is expensed immediately
            when
            known. As at April 30, 2003, the Company evaluated the recoverability
            from the
            related cash flows of future operations of the carrying value of pre-operating
            expenses. The Company determined that all $12.8 million of such costs
            related to
            the composites manufacturing business carried on by its wholly-owned
            subsidiary,
            CHC Composites Inc., should be written off and recorded as an asset impairment
            charge. At April 30, 2005, $6.5 million (2004 - $3.3 million;
            2003 - $3.4 million) in unamortized pre-operating expenses related to
            new
            contract awards, which are expected to be recoverable from the related
            future
            cash flows of such contracts and the development of new businesses, are
            included
            in other assets on the balance sheet.
  (b)
                  Flying
                      asset
                      amortization
  Flying
            assets are
            comprised of airframes and components amortized on a straight-line basis
            over
            their estimated useful lives. Effective May 1, 2004, based on
            the Company’s
            review of its amortization policy with respect to aircraft airframes,
            the
            percentage of costs attributable to certain airframes has been decreased
            from
            30% to 25-30% and the estimated useful life of such airframes has been
            increased
            from 15 years to 25 years. The effect of these accounting
            estimate
            changes has been accounted for prospectively in fiscal 2005, resulting
            in a
            decrease in amortization for the year ended April 30, 2005 of
            $3.8 million.
  The
            helicopter
            airframes and components are inspected, repaired and overhauled at pre-specified
            intervals. Such costs are capitalized to flying assets. Helicopter airframe
            major inspection costs are amortized to amortization expense while component
            major inspections and repair and overhaul costs are amortized to direct
            costs.
            This requires the Company to estimate the period of expected future benefit
            for
            each type of component and inspection. Such estimates are based on mandated
            inspection and overhaul intervals and on previous experience and could
            vary
            materially from actual experience resulting in over- or under-amortization
            of
            capitalized costs.
  120
 
 CHC
              Helicopter
              Corporation
 Notes
              to the
              Consolidated Financial Statements
 April 30,
              2005, 2004 and 2003
 (Tabular
              amounts in
              thousands unless otherwise noted, except per share amounts)
 (c)
                  Carrying
                      value of flying assets
  Based
            on
            independent appraisals, the appraised value of the Company’s flying assets
            exceeded the carrying value by $53.2 million and $102.3 million
            as at
            April 30, 2005 and 2004, respectively (both amounts unaudited).
            The
            recoverability of the book value of these assets is, in part, dependent
            on the
            estimates used in determining the expected period of future benefits
            over which
            to amortize flying assets. In addition, such recoverability is dependent
            on
            market conditions including demand for certain types of aircraft and
            changes in
            technology arising from the introduction of newer, more efficient
            aircraft.
  (d)
                  Defined
                      benefit employee pension plans
  The
            Company
            maintains both funded and unfunded defined benefit employee pension plans
            in the
            U.K., Norway, Canada and the Netherlands for approximately one-third
            of its
            active employees and certain former employees. Several statistical and
            judgmental factors, which attempt to anticipate future events, are used
            in
            measuring the Company’s obligations under the plans and the related periodic
            pension expense. These factors include assumptions about the rate at
            which the
            pension obligation is discounted, the expected long-term rate of return
            on plan
            assets and the rate of future compensation increases. In addition, the
            Company’s
            actuaries use other assumptions such as withdrawal and mortality rates.
            The
            estimates and assumptions used may differ materially from actual results
            due to
            changing market and economic conditions, changing withdrawal rates, and
            changing
            overall life spans of participants. These differences 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. The Company reviews annually
            the
            assumptions used in measuring the pension plan obligations to determine
            their
            appropriateness based on actual experience and current and anticipated
            market
            conditions.
  (e)
                  Utilization
                      of income tax losses
  The
            Company has
            accumulated $91.9 million and $37.4 million in non-capital
            and capital
            tax losses, respectively, as at April 30, 2005. As detailed in
            Note 24 ,
            some of the
            non-capital losses expire between fiscal 2006 and 2015 and some carry
            forward
            indefinitely, while the capital losses carry forward indefinitely. The
            Company
            has determined that it is more likely than not that the benefit of all
            of these
            losses will be realized in the future and, accordingly, has recorded
            future tax
            assets of $35.0 million related to these losses. This determination
            was
            based on assumptions regarding the reversal of existing future tax liabilities
            and future earnings levels in the subsidiaries with accumulated losses,
            and on
            an ability to implement routine 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
            assets will not be realized, a charge will be made to earnings in the
            period
            when such determination is made.
  (f)
                  Aircraft
                      operating leases
  Upon
            entering into
            a new aircraft leasing arrangement, the Company evaluates whether substantially
            all of the benefits and risks of ownership related to the aircraft have
            been
            transferred to the lessor in order to determine if the lease is classified
            and
            recorded as capital or operating. Currently, all of the Company’s aircraft
            leases are classified and recorded as operating leases. One of the criteria
            in
            determining whether the benefits and risks have been transferred is whether
            the
            present value of the minimum lease payments is less than 90% of the fair
            value
            of the leased aircraft at the inception of the lease. In determining
            whether the
            present value at the beginning of the lease term of the minimum lease
            payments
            is less than 90% of the fair value of the leased aircraft, the Company
            includes
            in its minimum lease payments minimum rentals over the lease term (excluding
            any
            renewal options) and any guarantee by the Company of the residual value
            of the
            leased aircraft including junior loans, deferred payments, advance rentals,
            and
            asset value guarantees (Note 30 ).
  121
 CHC
              Helicopter
              Corporation
 Notes
              to the
              Consolidated Financial Statements
 April 30,
              2005, 2004 and 2003
 (Tabular
              amounts in
              thousands unless otherwise noted, except per share
              amounts)
 The
            second criteria
            evaluated is whether there is a bargain purchase option at the end of
            the lease
            compared to the estimated fair market value of the aircraft at that time.
            At the
            time of entering into a new aircraft leasing arrangement the Company
            obtains an
            independent appraisal from a helicopter valuation company of the estimated
            fair
            value of the aircraft at the beginning and end of the lease term. These
            appraisals involve the use of estimates on current and future condition
            of, and
            demand for, the particular aircraft type. Different valuation companies
            may
            calculate different appraisal values for the same aircraft based on different
            assumptions used. The third criteria evaluated is whether the lease term
            is
            greater than or equal to 75% of the economic life of the leased aircraft.
            The
            use of different estimates of fair market value and the economic life
            of the
            aircraft could result in different lease classification. The appraised
            value of
            the Company’s fleet of leased aircraft as at April 30, 2005 was
            approximately $569.3 million and $584.0 million at April 30,
            2004
            (both amounts unaudited).
  Certain
            of the
            Company’s operating leases have junior loans, deferred payments and loans
            receivable due from the lessors. Under these lease agreements, when the
            aircraft
            are sold by the lessors at the end of the lease terms, if the proceeds
            received
            are greater than the unamortized amount under the lease of the aircraft
            at that
            time, these amounts may be fully recoverable, otherwise the loans and
            deferred
            payments would not be recoverable. As at April 30, 2005 no allowance
            has
            been recorded on the loans and deferred payments as the Company currently
            believes that the aircraft will realize a value upon sale at the end
            of the
            lease sufficient to recover these amounts.
  (g)
                  Consolidation
                      of variable interest entities
                      (“VIE”s)
  Under
            AcG-15, the
            Company is required to assess the variability of outcomes under each
            entity that
            is considered a VIE to determine whether the Company is the primary beneficiary
            of the VIE and would thus be required to consolidate the VIE. In performing
            this
            assessment, the Company is required to make a number of estimates including
            a
            range of possible asset values at the end of the lease term. In addition
            to
            developing a range of possible outcomes, the Company is required to assign
            a
            probability to each potential outcome. These estimates can significantly
            impact
            whether a particular VIE is required to be consolidated by the
            Company.
  **6.**
                  **FUNCTIONAL
                      CURRENCY**
  Effective
            the
            fourth quarter of fiscal 2004 the Company determined that the U.S. dollar
            is the
            functional currency of its Vancouver, Canada-based international business
            unit
            based on the preponderance of transactions in that currency. This determination
            was based on an analysis of various cash flow indicators, sales price
            and sales
            market indicators, expense indicators, financing indicators and inter-company
            transaction indicators. The transition from the Canadian dollar to the
            U.S.
            dollar as the functional currency had a negligible impact on fiscal 2004
            financial results.
  **7.**
                  **ACQUISITIONS**
  On
            August 17,
            2004, the Company acquired 100% of the shares of Multifabs Survival Ltd.
            (“Multifabs”), an Aberdeen based company specializing in the production of cold
            water survival suits for military forces, emergency services and offshore
            oil
            and gas companies around the world. On September 23, 2004 the
            Company
            acquired 60% of the shares of Aero Turbine Support Ltd. (“ATSL”), an aircraft
            engine repair and overhaul company servicing General Electric CT58/T58
            and Pratt
& Whitney Canada PT6T turboshaft engines. On January 13, 2005 the
            Company also acquired the assets and capabilities of Coulson Aero Technologies
            Ltd. (“Coulson”), a British Columbia based helicopter component and turbine
            engine maintenance repair and overhaul (“MRO”) provider. The total purchase
            price to acquire these companies, assets, capabilities and associated
            contracts
            was $21.3 million, including the assumption of debt. These acquisitions
            were financed through existing operating facilities.
  These
            acquisitions
            were accounted for using the purchase method with results of operations
            included
            in the consolidated financial statements from the acquisition dates.
            Under the
            purchase method of accounting, the total purchase price has been allocated
            to
            the assets acquired and liabilities assumed based on their estimated
            fair market
            values as of the date of completion of the acquisitions as follows:
  122
 
 CHC
              Helicopter
              Corporation
 Notes
              to the
              Consolidated Financial Statements
 April 30,
              2005, 2004 and 2003
 (Tabular
              amounts in
              thousands unless otherwise noted, except per share amounts)
  ATSL
&
                      Coulson
                  
                  Multifabs
                  
                  TotalCash
                  
                  $
                  860
                  
                  $
                  4
                  
                  $
                  864Other
                      current
                      assets
                  
                  
                  1,780
                  
                  
                  4,730
                  
                  
                  6,510Intangible
                      assets*(i)*
                  
                  
                  1,040
                  
                  
                  6,092
                  
                  
                  7,132Goodwill*(ii)*
                  
                  
                  1,079
                  
                  
                  7,782
                  
                  
                  8,861Property
                      and
                      equipment
                  
                  
                  2,612
                  
                  
                  1,810
                  
                  
                  4,422Current
                      liabilities
                  
                  
                  (1,083
                  )
                  
                  (2,108
                  )
                  
                  (3,191
                  )Long-term
                      debt
                  
                  
                  -
                  
                  
                  (2,498
                  )
                  
                  (2,498
                  )Other
                      liabilities
                  
                  
                  -
                  
                  
                  (670
                  )
                  
                  (670
                  )Non-controlling
                      interest
                  
                  
                  (240
                  )
                  
                  -
                  
                  
                  (240
                  )Future
                      income
                      tax liabilities
                  
                  
                  (337
                  )
                  
                  (2,005
                  )
                  
                  (2,342
                  )$
                  5,711
                  
                  $
                  13,137
                  
                  $
                  18,848
  (i)
                  Of
                      the
                      $7.1 million of acquired intangible assets, $3.9 million
                      was
                      assigned to customer contracts and relationships, $2.3 million
                      for
                      patents and registered designs and $0.9 million to other
                      intangibles.
                      The intangible assets will be amortized on a straight-line
                      basis over
                      their estimated useful lives ranging from
                      4 - 10 years.
 (ii)
                  Goodwill
                      of
                      $8.9 million is not expected to be deductible for tax
                      purposes and is
                      related to businesses included in the Repair and overhaul
                      segment.
 
 On
            February 16, 2004 the Company acquired 100% of the shares of Schreiner
            Aviation Group (“Schreiner”). Schreiner provides aviation services primarily to
            the offshore oil and gas industry in Europe and Africa. The total purchase
            price
            of € 87.1 million
            or $143.9 million (inclusive of debt of € 25.2 million
            or $41.5 million) was financed through an amendment of the Company’s senior
            credit facilities. This included acquisition costs of
            $1.7 million.
  On
            March 5,
            2004 the Company acquired 100% of the shares of Whirly Bird Services
            Limited
            (“Whirlybird”) in the U.K. The total purchase price of £2.1 million or
            $5.2 million was financed with cash. Whirlybird is a global supplier
            of
            survival suits and related helicopter passenger survival equipment operating
            out
            of the U.K.
  These
            acquisitions
            were accounted for using the purchase method, with results of operations
            included in the consolidated financial statements from the acquisition
            dates.
            The purchase price was allocated based on the fair value of the net identifiable
            assets acquired as follows:
  Schreiner
                    Aviation
                      Group
                  
                  Whirly
                      Bird
                    Services
                      Limited
                  
                  TotalCash
                  
                  $
                  9,656
                  
                  $
                  394
                  
                  $
                  10,050Other
                      current assets
                  
                  
                  64,894
                  
                  
                  5,789
                  
                  
                  70,683Intangible
                      assets
                  
                  
                  4,913
                  
                  
                  -
                  
                  
                  4,913Property
                      and equipment
                  
                  
                  111,495
                  
                  
                  1,688
                  
                  
                  113,183Investments
                  
                  
                  23,090
                  
                  
                  12
                  
                  
                  23,102Future
                      income tax assets
                  
                  
                  34,319
                  
                  
                  -
                  
                  
                  34,319Current
                      liabilities
                  
                  
                  (61,486
                  )
                  
                  (956
                  )
                  
                  (62,442
                  )Unfavourable
                      contract credits
                  
                  
                  (22,026
                  )
                  
                  -
                  
                  
                  (22,026
                  )Long-term
                      debt
                  
                  
                  (44,432
                  )
                  
                  (816
                  )
                  
                  (45,248
                  )Other
                      liabilities
                  
                  
                  (17,273
                  )
                  
                  -
                  
                  
                  (17,273
                  )Non-controlling
                      interest
                  
                  
                  (752
                  )
                  
                  -
                  
                  
                  (752
                  )Future
                      income tax liabilities
                  
                  
                  -
                  
                  
                  (919
                  )
                  
                  (919
                  )$
                  102,398
                  
                  $
                  5,192
                  
                  $
                  107,590
  123
 
 CHC
              Helicopter
              Corporation
 Notes
              to the
              Consolidated Financial Statements
 April 30,
              2005, 2004 and 2003
 (Tabular
              amounts in
              thousands unless otherwise noted, except per share amounts)
 **8.**
                    **DISCONTINUED
                        OPERATIONS**
  During
            the year the
            Company sold two non-core components of the Schreiner business segment
            legally
            operating as Schreiner Canada Ltd. (“Schreiner Canada”) and Schreiner Aircraft
            Maintenance B.V. (“SAMCO”) and realized a net gain on sale of
            $8.6 million.
  The
            potential sale
            of the remaining business held for sale, CHC Composites Inc. (“Composites”), to
            any potential acquirer will be contingent on the acceptance of certain
            terms and
            conditions by the Government of Newfoundland and Labrador. The sale of
            Composites has not yet been consummated and therefore the disposal has
            not been
            reflected in these statements nor have the long-term assets and liabilities
            of
            this business been reclassified as current at April 30, 2005.
            The assets
            and liabilities of this business were measured using discounted future
            cash
            flows at the lower of their carrying amounts and their estimated fair
            value less
            costs to sell. As a result, a fair value adjustment of $14.3 million
            was
            recorded in the current fiscal year and allocated to property and equipment
            ($11.4 million) and other long-term assets ($2.9 million)
            of this
            business. This fair value estimate is subject to adjustment as the sale
            of this
            remaining business is consummated or as assumptions used in the valuation
            change.
  The
            fair value
            adjustment on Composites and the gain on sale of Schreiner Canada and
            SAMCO have
            been recorded in results from discontinued operations along with operating
            results from these discontinued businesses. Operating results from discontinued
            businesses include imputed interest on debt assumed by the buyer or required
            to
            be repaid as a result of the disposal transactions.
  The
            following
            tables present the consolidated balance sheets and consolidated statements
            of
            earnings of the discontinued operations included in the consolidated
            financial
            statements:
  **As
                      at
                      April 30,****2005**
                  
                  2004**Assets**Receivables
                  
                  **$**
                  **5,455**
                  
                  $
                  10,138Future
                      income tax assets
                  
                  
                  **-**
                  
                  
                  6,139Inventory
                  
                  
                  **6,804**
                  
                  
                  11,782Prepaid
                      expenses
                  
                  
                  **398**
                  
                  
                  878**12,657**
                  
                  
                  28,937Property
                      and
                      equipment, net
                  
                  
                  **3,495**
                  
                  
                  18,789Intangible
                      assets
                  
                  
                  **-**
                  
                  
                  4,678Future
                      income
                      tax assets
                  
                  
                  **-**
                  
                  
                  3,046**Total
                      assets of discontinued operations**
                  
                  
                  **16,152**
                  
                  
                  55,450**Liabilities**Payables
                      and
                      accruals
                  
                  
                  **2,153**
                  
                  
                  23,856Other
                      liabilities
                  
                  
                  **3,493**
                  
                  
                  4,172Future
                      income
                      tax liabilities
                  
                  
                  **-**
                  
                  
                  1,708**Total
                      liabilities of discontinued operations**
                  
                  
                  **5,646**
                  
                  
                  29,736**Net
                      assets of discontinued operations**
                  
                  **$**
                  **10,506**
                  
                  $
                  25,714
 
  **Year
                      Ended April 30,****2005**
                  
                  2004
                  
                  2003Revenue
                  
                  **$**
                  **21,641**
                  
                  $
                  13,637
                  
                  $
                  6,426Operating
                      loss
                  
                  **$**
                  **(19,083**
                  **)**
                  $
                  (3,377
                  )
                  $
                  (5,623
                  )Net
                      loss from
                      discontinued operations*(i)*
                  
                  **$**
                  **(11,019**
                  **)**
                  $
                  (2,574
                  )
                  $
                  (14,297
                  )
  (i)
                  Includes
                      a
                      net gain on disposal of $8.6 million and a fair value
                      adjustment of
                      $14.3 million for the current fiscal
                      year.
 
 124
 
 CHC
              Helicopter
              Corporation
 Notes
              to the
              Consolidated Financial Statements
 April 30,
              2005, 2004 and 2003
 (Tabular
              amounts in
              thousands unless otherwise noted, except per share amounts)
 **9.**
                    **CASH
                        AND CASH EQUIVALENTS**
  At
            April 30,
            2005 cash includes funds restricted for current taxes withheld and payable
            and
            other current obligations totalling $6.8 million (2004 -
            $7.8 million).
  **10.**
                  **PROPERTY
                      AND EQUIPMENT**
  The
            capital cost
            and related accumulated amortization of the Company’s flying assets, facilities
            and equipment are as follows:
  **Cost**
                  
                  **Accumulated
                      Amortization**
                  
                  **Net
                      Book**
                    **Value****2005**Flying
                      Assets
                  
                  **$**
                  **833,433**
                  
                  **$**
                  **93,535**
                  
                  **$**
                  **739,898**Facilities
                  
                  
                  **103,065**
                  
                  
                  **42,264**
                  
                  
                  **60,801**Equipment
                  
                  
                  **113,767**
                  
                  
                  **63,256**
                  
                  
                  **50,511****$**
                  **1,050,265**
                  
                  **$**
                  **199,055**
                  
                  **$**
                  **851,210**2004Flying
                      Assets
                  
                  $
                  782,167
                  
                  $
                  137,827
                  
                  $
                  644,340Facilities
                  
                  
                  90,463
                  
                  
                  31,599
                  
                  
                  58,864Equipment
                  
                  
                  74,489
                  
                  
                  43,288
                  
                  
                  31,201$
                  947,119
                  
                  $
                  212,714
                  
                  $
                  734,405
  Flying
            assets
            includes $53.2 million as at April 30, 2005 (2004 -
            $52.4 million) related to certain inventory items intended to
            be used and
            capitalized with respect to future internal major component overhaul
            work.
  Facilities
            cost of
            $103.1 million, as at April 30, 2005, includes $3.4 million
            related to the capitalization of a building for the corporate head office
            under
            construction in Vancouver, Canada.
  Operating
            expenses
            include the amortization of major component repair and overhaul costs
            of
            $63.3 million (2004 - $56.9 million; 2003 - $114.3 million)
            while
            related actual expenditures for such costs during the year were
            $63.3 million (2004 - $59.0 million; 2003 - $110.3 million).
            Amortization of remaining property and equipment, which has been recorded
            as
            amortization expense, totalled $30.1 million in fiscal 2005 (2004
            -
            $22.1 million; 2003 - $20.5 million).
  **11.**
                  **INVESTMENTS**
  **2005**
                  
                  2004Long-term
                      investments, at equityCanadian
                      Helicopters Limited (2005 - 41.75%, 2004 - 42.75%)
                  
                  **$**
                  **11,611**
                  
                  $
                  9,262Inversiones
                      Aereas S.L. (“Inaer”) (2005 - 38%, 2004 - 38%)
                  
                  
                  **20,776**
                  
                  
                  19,100Luchthaven
                      Den Helder C.V. (2005 - 50%, 2004 - 50%)
                  
                  
                  **4,140**
                  
                  
                  3,834Long-term
                      investments, at costCanadian
                      Helicopters Limited, preferred shares
                  
                  
                  **15,000**
                  
                  
                  15,000Other
                  
                  
                  **7,279**
                  
                  
                  1,046**$**
                  **58,806**
                  
                  $
                  48,242
  125
 CHC
                Helicopter
                Corporation
 Notes
                to the
                Consolidated Financial Statements
 April 30,
                2005, 2004 and 2003
 (Tabular
                amounts in
                thousands unless otherwise noted, except per share amounts)
 **12.**
                    **INTANGIBLE
                        ASSETS**
 **2005**
                  
                  2004Customer
                      contracts and relationships, less accumulated amortization
                      of $0.3 million
                      (2004 - $nil)
                  
                  **$**
                  **3,666**
                  
                  $
                  -Patents
                      and
                      registered designs, less accumulated amortization of $0.2 million
                      (2004 -
                      $nil)
                  
                  
                  **2,071**
                  
                  
                  -Other,
                      less accumulated amortization of $0.1 million (2004 -
                      $nil)
                  
                  
                  **762**
                  
                  
                  -**$**
                  **6,499**
                  
                  $
                  -
  The
            intangible
            assets were acquired as part of the acquisitions of ATSL, Coulson and
            Multifabs
            (Note 7 ).
            Current year
            amortization expense is equal to the accumulated amortization.
  **13.**
                  **OTHER
                      ASSETS**
  **2005**
                  
                  2004Prepaid
                      pension costs*(i)*
                  
                  **$**
                  **104,816**
                  
                  $
                  90,153Advance
                      rentals*(ii)*
                  
                  
                  **23,168**
                  
                  
                  17,983Aircraft
                      operating lease junior loans*(iii)*
                  
                  
                  **15,052**
                  
                  
                  16,015Deferred
                      financing costs, less accumulated amortization of $2.9 million
                      (April 30, 2004 - $3.5 million)*(iv)*
                  
                  
                  **8,261**
                  
                  
                  13,072Loans
                      receivable*(v)*
                  
                  
                  **11,990**
                  
                  
                  7,736Pre-operating
                      expenses*(vi)*
                  
                  
                  **6,530**
                  
                  
                  3,254Aircraft
                      deposits*(vii)*
                  
                  
                  **42,975**
                  
                  
                  14,544Norway
                      public pension scheme prepayments
                  
                  
                  **6,993**
                  
                  
                  5,556Restricted
                      cash*(viii)*
                  
                  
                  **15,083**
                  
                  
                  9,813Other
                  
                  
                  **148**
                  
                  
                  767**$**
                  **235,016**
                  
                  $
                  178,893
  (i)
                  Prepaid
                      pension costs represent accumulated contributions paid by the
                      Company into
                      its defined benefit employee pension plans in excess of the
                      accumulated
                      current and prior years’ benefit pension expense (Note32).
  (ii)
                  The
                      advance
                      rentals are up-front rental payments made on aircraft leased
                      under
                      operating leases. These rentals are being amortized over the
                      related lease
                      terms. Under the terms of certain of the lease agreements,
                      if the lessor
                      procures a buyer for the aircraft at the end of the lease term
                      for
                      proceeds greater than the estimated residual value of the aircraft
                      at
                      termination of the leases, the advance rental payments may
                      be fully
                      recovered by the Company. The Company currently believes that
                      the aircraft
                      will realize a value upon sale at the end of the lease terms
                      sufficient to
                      recover these advance rentals.
  (iii)
                  The
                      aircraft
                      junior loans are loans with lessors for the financing of 13
                      aircraft under
                      operating leases as at April 30, 2005. Such loans bear
                      interest at
                      5.2% to 8.0% (2004 - 5.15% to 7.9%) with principal and accrued
                      interest
                      due at maturity. These loans mature between 2006 and 2009.
                      As at
                      April 30, 2005, no allowance has been recorded on these
                      loans as the
                      Company currently believes that the aircraft will realize a
                      value upon
                      sale at the end of the lease terms sufficient to recover these
                      loans.
  (iv)
                  Deferred
                      financing costs (net of accumulated amortization) at April 30,
                      2005
                      include $12.8 million (2004 - $11.2 million)
                      in legal, bank and
                      other fees directly related to long-term financing activities
                      net of
                      $4.5 million of debt premium (2004 - $nil) related to
                      the Company’s
                      U.S. dollar denominated senior subordinated notes. The 2004
                      amount also
                      includes $1.9 million of debt discount related to the
                      Company’s euro
                      denominated senior subordinated notes. These costs are being
                      amortized to
                      financing charges over the term of the related debt obligations
                      with
                      $3.0 million amortized in fiscal 2005 (2004 - $3.5 million;
                      2003
                      - $3.2 million). In addition, during the fiscal year
                      ended
                      April 30, 2005 $1.0 million in deferred financing
                      costs were
                      written off upon the settlement of certain debt obligations
                      (2004 -
                      $6.2 million; 2003 - $3.1 million) (Note17).
  126
 CHC
                Helicopter
                Corporation
 Notes
                to the
                Consolidated Financial Statements
 April 30,
                2005, 2004 and 2003
 (Tabular
                amounts in
                thousands unless otherwise noted, except per share amounts)
 (v)
                  The
                      loans
                      receivable are loans with lessors for the financing of 19 aircraft
                      under
                      operating leases as at April 30, 2005. Such loans mature
                      between 2010
                      and 2013 at the end of the lease terms. As at April 30,
                      2005, no
                      allowance has been recorded on these loans as the Company currently
                      believes that the aircraft will realize a value upon sale at
                      the end of
                      the lease terms sufficient to recover these
                      loans.
  (vi)
                  The
                      pre-operating expense balance as of April 30, 2005 consists
                      of costs
                      incurred in the start-up phase of new contract awards and new
                      businesses.
                      These costs are being amortized on a straight-line basis over
                      the lesser
                      of five years or the terms of the related contracts from one
                      to five
                      years. The Company has determined that the pre-operating expenses
                      are
                      recoverable from future cash flows to be generated from the
                      contracts and
                      new businesses.
  During
            the fiscal
            year ended April 30, 2005, the Company expensed $2.7 million
            (2004 -
            $1.6 million; 2003 - $2.5 million) related to the amortization
            of
            pre-operating expenses.
  (vii)
                  Aircraft
                      deposits are paid to manufacturers to secure deliveries at
                      future dates,
                      as described in Note28.
  (viii)
                  The
                      restricted cash balance consists of cash that is subject to
                      restrictions
                      that prevent its use for current purposes, primarily cash that
                      the
                      Company’s reinsurance subsidiary must retain to fund its required claims
                      reserves, cash held by the bank for the SARs hedge and deposits
                      held as
                      security for guarantees and bid
                      bonds.
  **14.**
                  **STOCK
                      APPRECIATION RIGHTS AND PERFORMANCE
                      UNITS**
  At
            April 30,
            2005 the Company had 209,334 (2004 - 144,000) stock appreciation rights
            vested
            and unexercised at reference prices ranging from $2.93 to $16.50 per
            unit. At
            the date of exercise, cash payments are made to the holders based on
            the
            difference between the market value of the Company’s Class A subordinate
            voting shares on the TSX and the reference price. The Company also had
            an
            additional 586,666 units that had been granted but not vested
            at
            April 30, 2005 (2004 - 220,000) at reference prices ranging from
            $13.70 to
            $24.55. It is anticipated that these units will vest from fiscal 2006
            to 2008.
            The units granted in fiscal 2005 under the stock appreciation rights
            plan vest
            equally over a three-year period with one-third vesting on each of the
            three
            subsequent anniversary dates. All 2004 figures related to stock appreciation
            rights have been restated to reflect the April 2005 stock split
            (Note 19 ).
  Stock
            appreciation
            rights granted by the Company must be exercised within 10 years
            of the date
            of grant. The stock appreciation rights that vested in fiscal 2005 have
            expiry
            dates ranging from fiscal 2011 to 2015.
  At
            April 30,
            2005 the Company had 80,616 (2004 - 75,245) performance units vested
            and
            unexercised at reference prices ranging from $4.30 to $26.11 per unit.
            At the
            date of exercise, cash payments are made to the holders based on the
            difference
            between double the market value of the Company’s Class A subordinate voting
            shares on the TSX and the reference price. The payments are made based
            on double
            the market value of the shares in order to compensate for the April 2005
            stock
            split since all of the performance units outstanding at April 30,
            2005 were
            issued prior to the stock split. The Company also had an additional 34,876
            performance units that had been granted but not vested at April 30,
            2005
            (2004 - 173,046) at a reference price of $26.11. The performance units
            vest
            annually if the financial performance of certain of the Company’s operating
            divisions meets or exceeds pre-determined financial benchmarks.
  Performance
            units
            granted by the Company must be exercised within 10 years of the
            date of
            grant. The performance units that have vested at April 30, 2005
            have expiry
            dates ranging from fiscal 2011 to 2015.
  Compensation
            recovery with the inclusion of the associated hedging instrument in respect
            of
            SARs for the year ended April 30, 2005 was $2.9 million
            (2004 -
            $2.4 million; 2003 - expense of $5.0 million). At April 30,
            2005
            the Company’s current liability with respect to SARs was $10.4 million
            (2004 - $5.3 million).
  127
 CHC
                Helicopter
                Corporation
 Notes
                to the
                Consolidated Financial Statements
 April 30,
                2005, 2004 and 2003
 (Tabular
                amounts in
                thousands unless otherwise noted, except per share amounts)
 **15.**
                    **Debt
                        obligations**
 (a)
                  Long-term
                      debt
  Interest
                      rates
                  
                  Principal
                    repayment
                      terms
                  
                  Maturity
                      dates
                  
                  **2005**
                  
                  2004**Senior
                      credit facilities**Non-revolving
                      credit facilitiesGBP
                      LIBOR +
                      1.125% (2004 - 1.125%)
                  
                  Quarterly
                    andat
                    maturity
                  
                  December
                    2009
                  
                  **$**
                  **16,420**
                  
                  $
                  20,122Euro
                      LIBOR +
                      1.125% (2004 - 1.125%)
                  
                  Quarterly
                    andat
                    maturity
                  
                  December
                    2009
                  
                  
                  **96,617**
                  
                  
                  112,626Revolving
                      credit facilityCAD
                      B.A. +
                      1.125% (2004 - 1.125%)
                  
                  At
                    maturity
                  
                  December
                    2007
                  
                  
                  **-**
                  
                  
                  6,925**Other
                      term loans**12%
                      unsecured, subordinated, convertible note*(Note 33)*
                  
                  At
                    maturity
                  
                  January
                    2008
                  
                  
                  **4,551**
                  
                  
                  4,4265.75%
                  
                  At
                    maturity
                  
                  January
                    2008
                  
                  
                  **1,121**
                  
                  
                  1,056U.K.
                      Base rate + 1.75%
                  
                  Monthly
                  
                  June
                    2007
                  
                  
                  **1,916**
                  
                  
                  -U.K.
                      Base rate + 2%
                  
                  Monthly
                  
                  October
                    2010
                  
                  
                  **719**
                  
                  
                  1,032Non-interest
                      bearing
                  
                  Monthly
                  
                  December
                    2010
                  
                  
                  **719**
                  
                  
                  950Non-interest
                      bearing
                  
                  At
                    maturity
                  
                  December
                    2010
                  
                  
                  **1,905**
                  
                  
                  1,928Non-interest
                      bearing
                  
                  Semi-annually
                  
                  April
                    2009
                  
                  
                  **387**
                  
                  
                  399Total
                      long-term debt
                  
                  
                  
                  
                  
                  
                  
                  
                  **124,355**
                  
                  
                  149,464Less:
                      current portion
                  
                  
                  
                  
                  
                  
                  
                  
                  **(26,812**
                  **)**
                  
                  (16,159
                  )**$**
                  **97,543**
                  
                  $
                  133,305
 
 The
            applicable
            variable interest rates were: 30-day GBP LIBOR - 4.87% (2004 - 4.25%),
            30-day
            Euro LIBOR - 2.10% (2004 - 2.06%), 30-day CAD B.A. - 2.56% (2004 - 2.07%)
            and
            30-day U.K. base rate 4.75% (2004 - 6%).
  The
            terms of
            certain of the Company’s debt agreements and 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 additional
            indebtedness, create liens, make capital expenditures, sell or sublease
            assets,
            engage in mergers or acquisitions and make dividend and other payments.
            During
            the years ended April 30, 2005 and 2004 the Company was in compliance
            with
            all material covenants and other conditions imposed by its debt and helicopter
            lease agreements.
  During
            the year the
            Company agreed to the terms of revised senior credit facilities to replace
            the
            existing facilities that were due to mature in July 2005. The new senior
            facilities consist of a revolving facility of U.S. $175.0 million,
            a
            revolving facility of £ 6.8 million, a non-revolving facility of € 66.1 million
            and a non-revolving facility of £ 7.6 million. The terms of the
            revised senior credit facilities provide for increased flexibility in
            both
            financial and non-financial covenants, extension of the maturity dates
            for
            periods of three to five years, lower interest rates and increased
            borrowing limits.
  In
            March 2005,
            with partial proceeds from the Company’s U.S. $150.0 million
            ($188.5 million) 73/8 %
            senior
            subordinated notes due 2014, the Company repaid $162.4 million
            of its
            senior credit facilities.
  In
            February 2004
            the Company acquired Schreiner through an amendment of the Company’s senior
            credit facilities resulting in the issuance of € 93.6 million
            or $154.7 million of non-revolving debt under such senior credit
            facilities.
  128
 CHC
                Helicopter
                Corporation
 Notes
                to the
                Consolidated Financial Statements
 April 30,
                2005, 2004 and 2003
 (Tabular
                amounts in
                thousands unless otherwise noted, except per share amounts)
 In
            April 2004, with
            partial proceeds from the Company’s U.S.$250.0 million
            ($342.7 million) 73/8% senior
            subordinated
            notes due in 2014, the Company repaid £32.7 million ($78.7 million)
            and € 25.0 million
            ($40.3 million) of its senior credit facilities as well as
            NOK 123.5 million ($24.3 million) of its 7% term
            loan.
  *Collateral*
  As
            collateral for
            the senior credit facilities, the Company has provided a $750.0 million
            debenture, providing a fixed charge over all material freehold and leasehold
            real property and all aircraft, a floating charge over all other property
            and a
            general assignment of book debts. As collateral for the U.K. term loans,
            the
            Company has provided specific charges on owned and leasehold property
            with a net
            book value of $1.3 million as at April 30, 2005 (2004 -
            $1.4 million).
  (b)
                  Senior
                      subordinated notes
  The
            U.S. $400.0 million (2004 - U.S.$250.0 million)
            ($502.8 million at April 30, 2005; $342.7 million
            at
            April 30, 2004) senior subordinated notes bear interest at
            73/8% per
            annum (“the
            73/8% notes”), payable
            semi-annually on May 1 and November 1, and are due May 1,
            2014.
  The
            73/8% notes
            are unsecured
            senior subordinated obligations and are subordinated to all of the Company’s
            existing and future senior indebtedness, including borrowings under the
            Company’s senior credit facility. The notes will rank equally with the Company’s
            existing and future senior subordinated indebtedness and rank senior
            to all of
            the Company’s existing and future subordinated indebtedness. Each of the
            Company’s subsidiaries which guarantees borrowings under the Company’s senior
            credit facility jointly and severally guarantee the 73/8% notes
            on an
            unsecured senior subordinated basis. The Company’s subsidiaries incorporated in
            Norway and Denmark do not guarantee the notes or the senior credit facilities.
            Each subsidiary guarantee is an unsecured senior subordinated obligation
            of, and
            will rank equally with, all of the existing and future senior subordinated
            obligations of such guarantor. The 73/8% notes
            and the
            subsidiary guarantees are subordinated to all existing and future secured
            indebtedness of the Company and the subsidiary guarantors to the extent
            of the
            value of the assets securing such indebtedness.
  The
            Company may
            redeem all or a part of the 73/8% notes on or prior
            to May 1, 2009 by paying 100% of the principal amount of the notes
            plus a
            make-whole premium. Thereafter, the Company may redeem in whole or in
            part the
            73/8% notes
            at any time
            at a redemption price ranging from 100% to 103.688% of the principal
            amount of
            the senior subordinated notes being redeemed. In addition, at any time
            before
            May 1, 2007, the Company may redeem up to 35% of the aggregate
            principal
            amount of the 73/8% notes
            with the net
            proceeds of equity offerings at 107.375% of the principal amount of the
            notes,
            plus accrued interest, if at least 65% of the originally issued aggregate
            principal amount of the notes remains outstanding. The Company may also
            redeem
            all of the notes at 100% of their principal amount plus accrued interest
            if at
            any time the Company becomes obligated to pay withholding taxes on interest
            payments on the 73/8% notes
            as a result
            of a change in law. Upon the occurrence of certain change of control
            events, the
            Company will be required to make an offer to repurchase all of the
            notes.
  In
            May and July
            2004 the Company redeemed € 1.0 million
            or
            approximately $1.8 million and € 5.9 million
            or
            approximately $9.7 million, respectively, of its remaining 113⁄4%
            senior
            subordinated notes. In April 2004 with partial proceeds from the Company’s
            73/8% note
            issue, € 87.3 million
            ($140.6 million) representing 60% of the original principal amount
            of its
            113⁄4% notes was redeemed.
  (c)
                  Subordinated
                      debentures
  In
            June 2004 the
            Company redeemed the remaining $10.4 million of its 8% subordinated
            debentures.
  129
 CHC
                Helicopter
                Corporation
 Notes
                to the
                Consolidated Financial Statements
 April 30,
                2005, 2004 and 2003
 (Tabular
                amounts in
                thousands unless otherwise noted, except per share amounts)
 (d)
                    Foreign
                        currency
 Total
            debt
            obligations denominated in foreign currencies and the Canadian dollar
            equivalent
            are as follows:
  **2005**
                  
                  2004Debt
                      in
                    original
                      currency
                  
                  Canadian
                      equivalent
                  
                  Debt
                      in
                    original
                      currency
                  
                  Canadian
                      equivalentEuro
                  
                  **€**
                  **59,739**
                  
                  **$**
                  **97,004**
                  
                  €
                  75,825
                  
                  $
                  124,497Pound
                      sterling
                  
                  **£**
                  **9,189**
                  
                  
                  **22,081**
                  
                  £
                  9,927
                  
                  
                  24,137U.S.
                      dollar
                  
                  **USD**
                  **400,000**
                  
                  
                  **502,760**
                  
                  USD
                  250,000
                  
                  
                  342,675**$**
                  **621,845**
                  
                  
                  
                  
                  $
                  491,309
  (e)
                  Financing
                      charges
  **2005**
                  
                  2004
                  
                  2003Interest
                      on
                      debt obligations
                  
                  **$**
                  **32,945**
                  
                  $
                  30,636
                  
                  $
                  30,781Amortization
                      of deferred financing costs
                  
                  
                  **3,176**
                  
                  
                  3,538
                  
                  
                  3,222Foreign
                      exchange (gain) loss from operating activities and working
                      capital
                      revaluations
                  
                  
                  **(3,085**
                  **)**
                  
                  5,522
                  
                  
                  3,337Foreign
                      exchange loss (gain) on debt repayment
                  
                  
                  **586**
                  
                  
                  (1,799
                  )
                  
                  (1,294
                  )Foreign
                      exchange loss (gain) on revaluation of long-term debt
                  
                  
                  **1,299**
                  
                  
                  (5
                  )
                  
                  (770
                  )Foreign
                      exchange gain on settlement of foreign currency agreement
                  
                  
                  **-**
                  
                  
                  (9,781
                  )
                  
                  -Interest
                      income
                  
                  
                  **(464**
                  **)**
                  
                  (1,364
                  )
                  
                  (4,351
                  )Other
                      interest and banking expenses
                  
                  
                  **2,663**
                  
                  
                  2,207
                  
                  
                  3,605**$**
                  **37,120**
                  
                  $
                  28,954
                  
                  $
                  34,530
  (f)
                  Current
                      portion of debt obligations
  **2005**
                  
                  2004The
                      current
                      portion of debt obligations is as follows:Long-term
                      debt
                  
                  **$**
                  **26,812**
                  
                  $
                  16,159Senior
                      subordinated notes
                  
                  
                  **-**
                  
                  
                  11,472Subordinated
                      debentures
                  
                  
                  **-**
                  
                  
                  10,415**$**
                  **26,812**
                  
                  $
                  38,046
  (g)
                  Repayment
                      requirements
  Principal
            repayment
            requirements related to the total debt obligations over the next five
            years are
            as follows:
 2006
                  
                  $
                  26,8122007
                  
                  
                  26,6132008
                  
                  
                  31,1182009
                  
                  
                  25,2062010
                  
                  
                  12,652
  **16.**
                  **RESTRUCTURING
                      COSTS**
  During
            the year the
            Company completed a thorough examination of its operations and organizational
            structure with a view to strengthening and standardizing the Company’s
            operations, lowering overhead costs and securing its leadership position
            well
            into the future. As a result, the Company has relocated its head office
            to
            Vancouver, Canada and is consolidating all its current operations into
            three new
            operating divisions, Global operations, European operations and
            Heli-One.
  130
 CHC
                Helicopter
                Corporation
 Notes
                to the
                Consolidated Financial Statements
 April 30,
                2005, 2004 and 2003
 (Tabular
                amounts in
                thousands unless otherwise noted, except per share amounts)
 During
            the year
            ended April 30, 2005 the Company expensed costs of $17.6 million
            in
            connection with restructuring activities. These restructuring costs related
            to
            general organization planning, relocation of the Company’s head office to
            Vancouver, Canada and additional restructuring activities. Restructuring
            costs
            were comprised of severance, termination, relocation, planning, consulting
            and
            benefit adjustments. Of the $17.6 million incurred to date,
            $9.1 million relates to severance and termination costs, including
            a
            pension curtailment gain of $2.9 million.
  Additional
            costs
            are expected to be expensed in relation to these restructuring initiatives
            with
            the majority of future costs relating to termination, severance, consulting
            and
            other costs. The timing and final amount of these additional costs are
            dependent
            on a number of factors that are not yet known or determinable.
  During
            the year
            ended April 30, 2004 the Company incurred restructuring costs
            of
            $9.2 million in connection with the consolidation of its European
            operations and other related activities. Restructuring costs were comprised
            of
            termination benefits, professional fees, travel costs and other incremental
            costs directly associated with the restructuring activities. Of this
            $9.2 million restructuring costs, $6.7 million was termination
            benefits paid to terminated employees.
  The
            following table
            provides a reconciliation of the Company’s restructuring cost accrual for the
            years ended April 30:
  **2005**
                  
                  2004
                  
                  2003Restructuring
                      accrual, beginning of year
                  
                  **$**
                  **1,833**
                  
                  $
                  -
                  
                  $
                  -Restructuring
                      cost expensed during the year
                  
                  
                  **17,612**
                  
                  
                  9,181
                  
                  
                  -Restructuring
                      cost paid during the year
                  
                  
                  **(11,767**
                  **)**
                  
                  (7,348
                  )
                  
                  -Restructuring
                      accrual, end of year
                  
                  **$**
                  **7,678**
                  
                  $
                  1,833
                  
                  $
                  -
  **17.**
                  **DEBT
                      SETTLEMENT COSTS**
  During
            the year
            ended April 30, 2005 the Company expensed $2.0 million
            of debt
            settlement costs in connection with a senior credit facility revision
            and the
            redemption of its remaining 113⁄4% senior subordinated notes and the remaining 8%
            subordinated debentures (Notes 15(b) and 15(c) ).
  During
            the year
            ended April 30, 2004 the Company expensed $19.7 million
            of debt
            settlement costs in connection with the retirement, in April 2004, of
            $140.6 million ( € 87.3 million)
            of its 113⁄4% notes (Note 15(b) )
            and
            $143.3 million in senior credit facilities and term loans
            (Note 15(a) ).
            During the year
            ended April 30, 2003 the Company expensed $12.5 million
            of debt
            settlement costs in connection with the retirement, in May 2002, of
            $71.6 million ( € 50.8 million)
            (35% of the original principal amount) of its 113⁄4% notes (Note 15(b) ).
            The debt
            settlement costs expensed in the current and prior fiscal years were
            comprised
            of premiums, professional fees, write-off of deferred financing costs
            and other
            incremental costs directly associated with debt settlement
            activities.
  **18.**
                  **OTHER
                      LIABILITIES**
  **2005**
                  
                  2004Deferred
                      revenue and redelivery obligations*(i)*
                  
                  **$**
                  **25,931**
                  
                  $
                  25,804Deferred
                      government assistance*(ii)*
                  
                  
                  **-**
                  
                  
                  210Accrued
                      pension obligation***(iii)*
                  
                  
                  **35,504**
                  
                  
                  38,315Deferred
                      gains on sale-leasebacks of aircraft***(iv)*
                  
                  
                  **53,690**
                  
                  
                  57,887Deferred
                      gain on SARs hedge***(v)*
                  
                  
                  **1,783**
                  
                  
                  -Insurance
                      claims accrual*(vi)*
                  
                  
                  **10,864**
                  
                  
                  9,337Unfavourable
                      contract credits*(vii)*
                  
                  
                  **14,207**
                  
                  
                  20,926Non-controlling
                      interest*(viii)*
                  
                  
                  **528**
                  
                  
                  740**$**
                  **142,507**
                  
                  $
                  153,219
  131
 CHC
                Helicopter
                Corporation
 Notes
                to the
                Consolidated Financial Statements
 April 30,
                2005, 2004 and 2003
 (Tabular
                amounts in
                thousands unless otherwise noted, except per share amounts)
 (i)
                  Deferred
                      revenue at April 30, 2005 includes $8.0 million
                      (2004 -
                      $12.4 million) of billings to customers for repair and
                      overhaul
                      services to be performed in future periods under power-by-the-hour
                      contracts. A significant number of the Company’s repair and overhaul
                      contracts require customers to pay for services on an hourly
                      flying basis.
                      A portion of this power-by-the-hour revenue is recognized on
                      a monthly
                      basis to reflect ongoing services being provided, with the
                      current balance
                      deferred and included in deferred revenue and redelivery obligations
                      and
                      the long-term balance deferred in other liabilities to be recognized
                      in
                      earnings when the services are performed. Redelivery obligations
                      are
                      obligations that arise under the terms of the Company’s operating lease
                      agreements, which specify that an aircraft must be returned
                      with major
                      components in substantially the same condition as at the inception
                      of the
                      lease. At April 30, 2005 the Company had provided $17.9 million
                      (2004 - $13.4 million) in respect of the long-term portion
                      of these
                      obligations, the current portion is included in deferred revenue
                      and
                      redelivery obligations.
  (ii)
                  The
                      Government of the Netherlands provided Schreiner with financial
                      assistance
                      for the development of avionics for a new helicopter program.
                      The
                      assistance is not repayable and has been offset against operating
                      costs on
                      completion of the development phase of this program. At April 30,
                      2005 government assistance of $nil million (2004 - $0.2 million)
                      relating to development costs was deferred in other
                      liabilities.
  (iii)
                  The
                      Company
                      has entered into unfunded supplementary retirement pension
                      plan agreements
                      in Canada with certain of its executives. The accrued benefit
                      obligation
                      included in other liabilities related to this plan at April 30,
                      2005
                      was $20.4 million (2004 - $16.1 million). The
                      Company also has
                      an unfunded early retirement pension plan in Norway. The accrued
                      pension
                      obligation related to this unfunded plan and related amounts
                      included in
                      other liabilities at April 30, 2005 was $5.3 million
                      (2004 -
                      $4.8 million). Included in the accrued pension obligation
                      at
                      April 30, 2005 was $9.8 million (2004 - $17.4 million)
                      related to funded defined benefit pension plans in the Netherlands
                      that
                      had a funding deficit upon acquisition on February 16,
                      2004
                      (Note32).
  (iv)
                  The
                      deferred
                      gains arising from certain aircraft sale-leaseback and lease-out
                      lease-in
                      transactions are being amortized over the lease terms. The
                      Company has
                      disposed of aircraft at amounts greater than book value resulting
                      in
                      deferred gains of $4.5 million for the year. Deferred
                      gain
                      amortization of $7.1 million (2004 - $5.0 million;
                      2003 -
                      $1.8 million) was recorded as a reduction of operating
                      lease expense
                      during the year. On certain leases a portion of the proceeds
                      are deferred
                      as part of the sale-leaseback transaction agreement and have
                      been netted
                      against the deferred gains for the purpose of calculating the
                      amount of
                      the gain to be amortized. Under these lease agreements, if
                      the aircraft
                      are sold by the lessors at the termination of the leases for
                      proceeds
                      greater than the unamortized amount under the lease for such
                      aircraft, the
                      deferred payments may be fully payable to the Company and recorded
                      as a
                      gain at that time.
  (v)
                  The
                      deferred
                      gain on the SARs hedge is related to the Company’s hedge of the unvested
                      units. The gain will be recognized as these units grade
                      vest.
  (vi)
                  The
                      insurance
                      claims accrual relates solely to the Company’s reinsurance subsidiary, CHC
                      Reinsurance S.A. The amount represents reinsurance premiums
                      received but
                      unearned, accruals for losses that have been reported but not
                      yet paid and
                      accruals for losses that have been incurred but not yet reported.
                      The
                      reinsurance subsidiary reinsures death and disability benefits
                      and loss of
                      license insurance for the Company’s Norwegian helicopter and repair and
                      overhaul operations and for certain other external
                      parties.
  (vii)
                  As
                      part of
                      the acquisition of Schreiner, the Company valued the long-term
                      contracts
                      of Schreiner and recorded unfavourable contract credits for
                      those
                      contracts for which the return is below market. The unfavourable
                      contract
                      credits are being amortized over the term of the contract,
                      for a maximum
                      of five years, on a declining balance basis. During the year
                      amortization
                      of these unfavourable contract credits of $6.7 million
                      (2004
                      -$0.9 million) was recorded as a reduction of operating
                      expenses.
  (viii)
                  As
                      at
                      April 30, 2005 there was a non-controlling shareholder
                      interest of
                      40% in ATSL. The 20% non-controlling interest of Schreiner
                      Components B.V.
                      at April 30, 2004 was purchased by the Company in May,
                      2004.
  132
 CHC
                Helicopter
                Corporation
 Notes
                to the
                Consolidated Financial Statements
 April 30,
                2005, 2004 and 2003
 (Tabular
                amounts in
                thousands unless otherwise noted, except per share amounts)
 **19.**
                    **CAPITAL
                        STOCK AND CONTRIBUTED
                        SURPLUS**
 Capital
            stock
  **Authorized:**
 Unlimited
            number of
            each of the following:
 First
            preferred
            shares, issuable in series
 Second
            preferred
            shares, issuable in series
 Class A
            subordinate voting shares, no par value
 Class B
            multiple voting shares, no par value
 Ordinary
            shares, no
            par value
  **Issued:**
 Number
                      of
                      Shares
                  
                  Consideration**2005**
                  
                  2004
                  
                  2003
                  
                  **2005**
                  
                  2004
                  
                  2003Class
                      A
                      subordinate voting shares
                  
                  
                  **36,833**
                  
                  
                  36,756
                  
                  
                  35,836
                  
                  **$**
                  **222,727**
                  
                  $
                  221,532
                  
                  $
                  218,147Class
                      B
                      multiple voting shares
                  
                  
                  **5,866**
                  
                  
                  5,877
                  
                  
                  5,907
                  
                  
                  **18,431**
                  
                  
                  18,719
                  
                  
                  18,815Ordinary
                      shares
                  
                  
                  **22,000**
                  
                  
                  22,000
                  
                  
                  22,000
                  
                  
                  **33,000**
                  
                  
                  33,000
                  
                  
                  33,000Ordinary
                      share loan
                  
                  
                  **-**
                  
                  
                  -
                  
                  
                  -
                  
                  
                  **(33,000**
                  **)**
                  
                  (33,000
                  )
                  
                  (33,000
                  )Class
                      A
                      subordinate voting employee share purchase loans
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  **(1,689**
                  **)**
                  
                  (1,823
                  )
                  
                  -**$**
                  **239,469**
                  
                  $
                  238,428
                  
                  $
                  236,962Contributed
                      surplus
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  **$**
                  **3,291**
                  
                  $
                  3,291
                  
                  $
                  3,291
 
 Class A
            subordinate voting shares that would be
 issued
            upon
            conversion of the following:
  **2005**
                  
                  2004
                  
                  2003Class
                      B
                      multiple voting shares
                  
                  
                  **5,866**
                  
                  
                  5,877
                  
                  
                  5,907Share
                      options***(Note
                      20)*
                  
                  
                  **2,815**
                  
                  
                  2,850
                  
                  
                  3,992Convertible
                      debt*(Notes
                      15
                      and 33)*
                  
                  
                  **1,379**
                  
                  
                  1,379
                  
                  
                  1,379
  133
 CHC
                Helicopter
                Corporation
 Notes
                to the
                Consolidated Financial Statements
 April 30,
                2005, 2004 and 2003
 (Tabular
                amounts in
                thousands unless otherwise noted, except per share amounts)
 Capital
            stock
            transactions
  Number
                      of shares
                  
                  Class
                      A
                    subordinate
                    voting
                      shares
                  
                  Class
                      B
                    multiple
                    voting
                      shares
                  
                  Ordinary
                      shares**Balance,
                      April 30, 2002**
                  
                  
                  35,378
                  
                  
                  5,953
                  
                  
                  22,000Shares
                      issued to employees for cashShare
                      option
                      plan
                  
                  
                  182
                  
                  
                  -
                  
                  
                  -Share
                      purchase plan
                  
                  
                  20
                  
                  
                  -
                  
                  
                  -Share
                      conversions
                  
                  
                  46
                  
                  
                  (46
                  )
                  
                  -Conversion
                      of 5.75% convertible promissory note
                  
                  
                  210
                  
                  
                  -
                  
                  
                  -**Balance,
                      April 30, 2003**
                  
                  
                  35,836
                  
                  
                  5,907
                  
                  
                  22,000Shares
                      issued to employees for cashShare
                      option
                      plan
                  
                  
                  874
                  
                  
                  -
                  
                  
                  -Share
                      purchase plan
                  
                  
                  16
                  
                  
                  -
                  
                  
                  -Share
                      conversions
                  
                  
                  30
                  
                  
                  (30
                  )
                  
                  -**Balance,
                      April 30, 2004**
                  
                  
                  36,756
                  
                  
                  5,877
                  
                  
                  22,000Share
                      issued to employees for cashShare
                      option
                      plan
                  
                  
                  55
                  
                  
                  -
                  
                  
                  -Share
                      purchase plan
                  
                  
                  11
                  
                  
                  -
                  
                  
                  -Share
                      conversions
                  
                  
                  11
                  
                  
                  (11
                  )
                  
                  -**Balance,
                      April 30, 2005**
                  
                  
                  36,833
                  
                  
                  5,866
                  
                  
                  22,000
  Stated
                        value
                    
                    Class
                        A
                      subordinate
                      voting
                        shares
                    
                    Class
                        B
                      multiple
                      voting
                        shares
                    
                    Contributed
                        surplus**Balance,
                        April 30, 2002**
                    
                    $
                    216,978
                    
                    $
                    19,029
                    
                    $
                    3,291Equity
                        offering costs
                    
                    
                    (130
                    )
                    
                    -
                    
                    
                    -Shares
                        issued to employees for cashShare
                        option
                        plan
                    
                    
                    449
                    
                    
                    -
                    
                    
                    -Share
                        purchase plan
                    
                    
                    246
                    
                    
                    -
                    
                    
                    -Share
                        conversions
                    
                    
                    214
                    
                    
                    (214
                    )
                    
                    -Conversion
                        of 5.75% convertible promissory note
                    
                    
                    390
                    
                    
                    -
                    
                    
                    -**Balance,
                        April 30, 2003**
                    
                    $
                    218,147
                    
                    $
                    18,815
                    
                    $
                    3,291Shares
                        issued to employees for cashShare
                        option
                        plan
                    
                    
                    3,083
                    
                    
                    -
                    
                    
                    -Share
                        purchase plan
                    
                    
                    206
                    
                    
                    -
                    
                    
                    -Share
                        conversions
                    
                    
                    96
                    
                    
                    (96
                    )
                    
                    -**Balance,
                        April 30, 2004**
                    
                    
                    221,532
                    
                    
                    18,719
                    
                    
                    3,291Shares
                        issued to employees for cashShare
                        option
                        plan
                    
                    
                    668
                    
                    
                    -
                    
                    
                    -Share
                        purchase plan
                    
                    
                    239
                    
                    
                    -
                    
                    
                    -Share
                        conversions
                    
                    
                    288
                    
                    
                    (288
                    )
                    
                    -**Balance,
                        April 30, 2005**
                    
                    $
                    222,727
                    
                    $
                    18,431
                    
                    $
                    3,291
  134
 CHC
                Helicopter
                Corporation
 Notes
                to the
                Consolidated Financial Statements
 April 30,
                2005, 2004 and 2003
 (Tabular
                amounts in
                thousands unless otherwise noted, except per share amounts)
 At
            a special
            meeting of shareholders on March 28, 2005, the shareholders approved
            the
            subdivision of the Company’s issued and unissued Class A subordinate voting
            shares, Class B multiple voting shares and ordinary shares all
            on a two for
            one basis. The Class A subordinate voting shares and Class B
            multiple
            voting shares listed on the TSX commenced trading on a post-split basis
            on
            April 12, 2005. Class A subordinate voting shares listed
            on the
            New York Stock Exchange began trading on a post-split basis on
            April 19, 2005. All balances have been restated to reflect the
            stock
            split.
  During
            the year
            ended April 30, 2004 the Company adopted without restatement of
            comparative
            figures the Canadian Emerging Issues Committee Abstract 132, Share
            Purchase
            Financing (“EIC-132”). Under EIC-132, share purchase loans receivable are to be
            deducted from shareholders’ equity if such loans are not in accordance with
            current arm’s length market terms and conditions including interest rate, terms
            of interest payments and principal repayments and adequacy of security.
            The
            Company’s Class A subordinate voting employee share purchase loans are
            non-interest bearing, full recourse loans and have as collateral a pledge
            of the
            related shares purchased with a fair market value of $19.1 million
            as at
            April 30, 2005. As a result, the employee share purchase loans
            of
            $1.7 million on April 30, 2005 (2004 - $1.8 million)
            are deducted
            from shareholders’ equity. Payments equal to 5% of the original loan principal
            are required on each loan anniversary date with the balance payable on
            the tenth
            anniversary. Upon termination of employment, the loans are required to
            be repaid
            within 60 days.
  The
            Class A
            subordinate voting shares carry the right to one vote per share and the
            Class B multiple voting shares carry the right to 10 votes
            per share.
            Each single Class B multiple voting share may be converted into
            a single
            Class A subordinate voting share at the option of the shareholder.
            In all
            other respects the Class A subordinate voting shares rank equally
            and
            ratably with the Class B multiple voting shares.
  The
            Company has
            issued 22,000,000 ordinary shares to a company owned by its majority
            shareholder
            for subscriptions of $33.0 million. Concurrently, to fund the
            subscriptions
            for the ordinary shares, the Company made a non-interest bearing loan
            to the
            purchaser, payable on demand and the Company has a lien on the ordinary
            shares
            issued. The ordinary shares entitle the holder thereof to (i) one
            vote for
            every 10 ordinary shares held; (ii) dividends equivalent
            on a per
            share basis to any dividend paid on the Company’s Class A subordinate
            voting shares and Class B multiple voting shares, subject to prior
            minority
            shareholder approval; and (iii) receive a share of the residual
            of the
            Company, on a liquidation or winding-up, equal, on a share for share
            basis, to
            the amount received by a holder of a Class A subordinate voting
            share or a
            Class B multiple voting share. The ordinary shares are redeemable
            at the
            option of the Company at the subscription price thereof in certain circumstances
            (Note 25 ).
  Declaration
            of
            dividends is restricted by covenants contained in certain of the Company’s debt
            agreements. The payment of dividends during fiscal 2005 at $0.30 (2004
            - $0.25;
            2003 - $0.10) per participating voting share totalling $12.8 million
            (2004
            - $10.5 million; 2003 - $4.0 million) was in compliance
            with these
            covenants.
  **20.**
                  **SHARE
                      OPTION PLAN**
  Effective
            May 1, 2003, the Company began expensing stock-option awards using
            the fair
            value method. This accounting change was applied prospectively in fiscal
            2004
            relating to stock options issued on or after May 1, 2003. There
            was no
            impact on the financial results for fiscal 2005 or fiscal 2004 as a result
            of
            adopting this accounting policy change as no new stock options have been
            granted
            since May 1, 2003.
  The
            table below
            presents pro-forma net earnings, basic earnings per share and diluted
            earnings
            per share had the fair value method been used to account for share options.
            These pro-forma disclosures pertain to stock options granted in fiscal
            2003 upon
            adoption of the new stock-based compensation standards on May 1,
            2002.
            There was no impact on the pro-forma earnings for the year ended April 30,
            2005 as all share options granted had vested as at April 2004.
  135
 
 CHC
                Helicopter
                Corporation
 Notes
                to the
                Consolidated Financial Statements
 April 30,
                2005, 2004 and 2003
 (Tabular
                amounts in
                thousands unless otherwise noted, except per share amounts)
 **2005**
                  
                  2004
                  
                  2003Net
                      earningsAs
                      reported
                  
                  **$**
                  **62,559**
                  
                  $
                  63,676
                  
                  $
                  65,465Stock-based
                      employee compensation expense determined under fair value based
                      method
                  
                  
                  **-**
                  
                  
                  (477
                  )
                  
                  (5,188
                  )Pro-forma
                  
                  **$**
                  **62,559**
                  
                  $
                  63,199
                  
                  $
                  60,277Basic
                      earnings per shareAs
                      reported
                  
                  **$**
                  **1.49**
                  
                  $
                  1.54
                  
                  $
                  1.58Pro-forma
                  
                  
                  **1.49**
                  
                  
                  1.53
                  
                  
                  1.46Diluted
                      earnings per shareAs
                      reported
                  
                  **$**
                  **1.37**
                  
                  $
                  1.41
                  
                  $
                  1.46Pro-forma
                  
                  
                  **1.37**
                  
                  
                  1.40
                  
                  
                  1.35
  The
            Black-Scholes
            option pricing model was used to fair value the options using the following
            estimates and assumptions:
 Expected
                      life
                  
                  
                  5
                      yearsExpected
                      dividend yield
                  
                  
                  0.6
                  %Risk-free
                      interest rate
                  
                  
                  5
                  %Stock
                      volatility
                  
                  
                  40
                  %
  As
            at
            April 30, 2005 total outstanding options were 1,407,672 (2004
            - 1,425,272;
            2003 - 1,995,706). At April 30, 2005 all of the share options
            outstanding
            were exercisable (2004 -1,266,850; 2003 - 1,607,206). The weighted average
            exercise price of the total outstanding options at April 30, 2005
            was
            $14.25 compared to $14.40 and $13.86 at April 30, 2004 and April 30,
            2003, respectively. Each option is convertible into two Class A
            subordinate
            voting shares to reflect the April 2005 two-for-one stock split.
  A
            summary of recent
            share option activities is as follows:
  **2005**Number
                      of options - Exercise price range $3.10 - $4.30
                  
                  Weighted
                      average exercise price
                  
                  Number
                      of options - Exercise price range $7.35 - $9.00
                  
                  Weighted
                      average exercise price
                  
                  Number
                      of options - Exercise price range $26.11 - $30.70
                  
                  Weighted
                      average exercise price
                  
                  Total
                      number of options
                  
                  Total
                      weighted average exercise priceClass
                      A
                      subordinatevoting
                      share optionsBeginning
                      of year
                  
                  
                  **485**
                  
                  **$**
                  **4.28**
                  
                  
                  **470**
                  
                  **$**
                  **8.96**
                  
                  
                  **470**
                  
                  **$**
                  **30.27**
                  
                  
                  **1,425**
                  
                  **$**
                  **14.40**Exercised
                  
                  
                  **-**
                  
                  
                  **-**
                  
                  
                  **-**
                  
                  
                  **-**
                  
                  
                  **(18**
                  **)**
                  
                  **26.11**
                  
                  
                  **(18**
                  **)**
                  
                  **26.11**End
                      of year
                  
                  
                  **485**
                  
                  **$**
                  **4.28**
                  
                  
                  **470**
                  
                  **$**
                  **8.96**
                  
                  
                  **452**
                  
                  **$**
                  **30.44**
                  
                  
                  **1,407**
                  
                  **$**
                  **14.25**Weighted
                      average contractual life of options outstanding
                  
                  
                  **3.5
                      years**
                  
                  
                  
                  
                  
                  **2.4
                      years**
                  
                  
                  
                  
                  
                  **7.0
                      years**
                  
                  
                  
                  
                  
                  **4.3
                      years**
  136
 CHC
                Helicopter
                Corporation
 Notes
                to the
                Consolidated Financial Statements
 April 30,
                2005, 2004 and 2003
 (Tabular
                amounts in
                thousands unless otherwise noted, except per share amounts)
 2004Number
                      of options - Exercise price range $3.10 - $4.30
                  
                  Weighted
                      average exercise price
                  
                  Number
                      of options - Exercise price range $7.35 - $9.00
                  
                  Weighted
                      average exercise price
                  
                  Number
                      of options - Exercise price range $26.11 - $30.70
                  
                  Weighted
                      average exercise price
                  
                  Total
                      number of options
                  
                  Total
                      weighted average exercise priceClass
                      A
                      subordinatevoting
                      share optionsBeginning
                      of year
                  
                  
                  846
                  
                  $
                  4.15
                  
                  
                  490
                  
                  $
                  8.97
                  
                  
                  660
                  
                  $
                  29.93
                  
                  
                  1,996
                  
                  $
                  13.86Forfeited
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  (39
                  )
                  
                  29.92
                  
                  
                  (39
                  )
                  
                  29.92Expired
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  (95
                  )
                  
                  30.54
                  
                  
                  (95
                  )
                  
                  30.54Exercised
                  
                  
                  (361
                  )
                  
                  3.97
                  
                  
                  (20
                  )
                  
                  9.00
                  
                  
                  (56
                  )
                  
                  26.11
                  
                  
                  (437
                  )
                  
                  7.06End
                      of year
                  
                  
                  485
                  
                  $
                  4.28
                  
                  
                  470
                  
                  $
                  8.96
                  
                  
                  470
                  
                  $
                  30.27
                  
                  
                  1,425
                  
                  $
                  14.40Weighted
                      average contractual life of options outstanding
                  
                  
                  4.5
                      years
                  
                  
                  
                  
                  
                  3.4
                      years
                  
                  
                  
                  
                  
                  8.0
                      years
                  
                  
                  
                  
                  
                  5.3
                      years
  2003Number
                        of options - Exercise price range $1.10 - $1.38
                    
                    Weighted
                        average exercise price
                    
                    Number
                        of options - Exercise price range $3.10 - $4.30
                    
                    Weighted
                        average exercise price
                    
                    Number
                        of options - Exercise price range $7.35 - $9.00
                    
                    Weighted
                        average exercise price
                    
                    Number
                        of options - Exercise price range $26.11 - $30.70
                    
                    Weighted
                        average exercise price
                    
                    Total
                        number of options
                    
                    Total
                        weighted average exercise priceClass
                        A
                        subordinatevoting
                        share optionsBeginning
                        of year
                    
                    
                    11
                    
                    $
                    1.12
                    
                    
                    906
                    
                    $
                    4.16
                    
                    
                    510
                    
                    $
                    8.97
                    
                    
                    -
                    
                    $
                    -
                    
                    
                    1,427
                    
                    $
                    5.86Granted
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    670
                    
                    
                    29.88
                    
                    
                    670
                    
                    
                    29.88Expired
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    (10
                    )
                    
                    26.11
                    
                    
                    (10
                    )
                    
                    26.11Exercised
                    
                    
                    (11
                    )
                    
                    1.12
                    
                    
                    (60
                    )
                    
                    4.28
                    
                    
                    (20
                    )
                    
                    9.00
                    
                    
                    -
                    
                    
                    -
                    
                    
                    (91
                    )
                    
                    4.95End
                        of year
                    
                    
                    -
                    
                    $
                    -
                    
                    
                    846
                    
                    $
                    4.15
                    
                    
                    490
                    
                    $
                    8.97
                    
                    
                    660
                    
                    $
                    29.93
                    
                    
                    1,996
                    
                    $
                    13.86Weighted
                        average contractual life of options outstanding
                    
                    
                    -
                    
                    
                    
                    
                    
                    5.7
                        years
                    
                    
                    
                    
                    
                    4.4
                        years
                    
                    
                    
                    
                    
                    9.0
                        years
                    
                    
                    
                    
                    
                    6.5
                        years
  **21.**
                  **SUPPLEMENTAL
                      CASH FLOW INFORMATION**
  **2005**
                  
                  2004
                  
                  2003Cash
                      interest paid
                  
                  **$**
                  **24,252**
                  
                  $
                  35,875
                  
                  $
                  37,525Cash
                      taxes
                      paid
                  
                  **$**
                  **11,225**
                  
                  $
                  8,486
                  
                  $
                  10,215
  The
            adjustment to
            net earnings related to future income taxes to arrive at cash flow on
            the
            statements of cash flows is calculated as the income tax (provision)
            recovery
            adjusted for cash taxes paid. Accordingly, it includes the impact of
            changes in
            current as well as long-term income tax assets and liabilities.
  137
 CHC
                Helicopter
                Corporation
 Notes
                to the
                Consolidated Financial Statements
 April 30,
                2005, 2004 and 2003
 (Tabular
                amounts in
                thousands unless otherwise noted, except per share amounts)
 **22.**
                    **FOREIGN
                        CURRENCY**
 Foreign
            currency
            translation adjustment
  **2005**
                  
                  2004
                  
                  2003Balance,
                      beginning of year
                  
                  **$**
                  **(9,873**
                  **)**
                  $
                  (3,884
                  )
                  $
                  (24,006
                  )Translation
                      adjustment during year
                  
                  
                  **(6,508**
                  **)**
                  
                  (5,989
                  )
                  
                  20,122Balance,
                      end of year
                  
                  **$**
                  **(16,381**
                  **)**
                  $
                  (9,873
                  )
                  $
                  (3,884
                  )
  The
            foreign
            currency translation adjustment represents the unrealized gain or loss
            on the
            Company’s net investment in self-sustaining foreign operations net of the
            hedging effect. The change in the foreign currency translation adjustment
            during
            the year results primarily from fluctuations in the Canadian dollar against
            other foreign currencies and changes in the size of the Company’s net investment
            in foreign operations.
  As
            at
            April 30, 2005 the Company had designated its new U.S.$150.0 million
            ($188.5 million) 73/8% senior
            subordinated
            note issue as a hedge of the Company’s net investments as follows
            (i) U.S.$40.0 million designated as a hedge of the net
            investment in
            the Company’s self-sustaining operations in Canada whose functional currency is
            the U.S. dollar and (ii) an aggregate of U.S.$110.0 million
            converted
            to Norwegian kroner via forward foreign exchange agreements designated
            as hedges
            of the net investment in the Company’s self-sustaining Norwegian operations. As
            at April 30, 2005 and 2004 the Company had also designated its
            U.S.$250.0 million ($314.2 million at April 30,
            2005;
            $342.7 million at April 30, 2004) 73/8% senior
            subordinated
            note issue as a hedge of the Company’s various net investments as follows:
            (i) U.S.$100.0 million designated as a hedge of the net
            investment in
            the Company’s self-sustaining operations in Canada whose functional currency is
            the U.S. dollar, (ii) U.S.$93.5 million converted to pound
            sterling
            via a forward foreign exchange agreement designated as a hedge of the
            net
            investment in the Company’s self-sustaining operations in the U.K.,
            (iii) U.S.$29.7 million converted to euro via a forward
            foreign
            exchange agreement designated as a hedge of the net investment in the
            Company’s
            self-sustaining operations in the Netherlands, and
            (iv) U.S.$26.8 million converted to Norwegian kroner via
            a forward
            foreign exchange agreement designated as a hedge of the net investment
            in the
            Company’s self-sustaining operations in Norway. The Company had also designated
            its pound sterling and remaining outstanding euro denominated debt as
            hedges of
            its net investments in its self-sustaining operations in the U.K. and
            the
            Netherlands, respectively. During fiscal 2004, the Company de-designated
            its
            euro denominated debt as a hedge of its net investment in self-sustaining
            Norwegian operations since it was no longer an effective hedge. Included
            in the
            foreign currency translation adjustment in shareholders’ equity at
            April 30, 2005 was a net foreign exchange gain of $19.4 million,
            net
            of taxes of $4.2 million (2004 - loss of $44.2 million,
            net of taxes
            of $8.3 million; 2003 - $21.1 million, net of taxes of
            $5.6 million) related to the revaluation and repayment of the
            debt during
            the period of hedge effectiveness.
  The
            Company reviews
            the effectiveness of these hedges quarterly by monitoring the relative
            changes
            in the amounts of the hedged items relative to the notional amounts of
            the
            hedging instruments.
  Year-end
            exchange
            rates
  Balance
            sheet
            accounts denominated in foreign currencies and translated at year-end
            exchange
            rates have been translated to Canadian dollars at the following
            rates:
  **2005**
                  
                  2004
                  
                  2003U.S.
                      dollar
                  
                  **$**
                  **1.26**
                  
                  $
                  1.37
                  
                  $
                  1.43U.K.
                      pound sterling
                  
                  
                  **2.40**
                  
                  
                  2.43
                  
                  
                  2.29Norwegian
                      kroner
                  
                  
                  **0.20**
                  
                  
                  0.20
                  
                  
                  0.21South
                      African rand
                  
                  
                  **0.21**
                  
                  
                  0.20
                  
                  
                  0.20Australian
                      dollar
                  
                  
                  **0.98**
                  
                  
                  0.99
                  
                  
                  0.90Euro
                  
                  
                  **1.62**
                  
                  
                  1.64
                  
                  
                  1.60
  138
 CHC
                Helicopter
                Corporation
 Notes
                to the
                Consolidated Financial Statements
 April 30,
                2005, 2004 and 2003
 (Tabular
                amounts in
                thousands unless otherwise noted, except per share amounts)
 Income
            statement
            accounts denominated in foreign currencies have been translated at the
            following
            year to date annual average exchange rates:
  **2005**
                  
                  2004
                  
                  2003U.S.
                      dollar
                  
                  **$**
                  **1.27**
                  
                  $
                  1.34
                  
                  $
                  -U.K.
                      pound sterling
                  
                  
                  **2.35**
                  
                  
                  2.30
                  
                  
                  2.40Norwegian
                      kroner
                  
                  
                  **0.19**
                  
                  
                  0.19
                  
                  
                  0.21South
                      African rand
                  
                  
                  **0.20**
                  
                  
                  0.19
                  
                  
                  0.16Australian
                      dollar
                  
                  
                  **0.94**
                  
                  
                  0.95
                  
                  
                  0.87Euro
                  
                  
                  **1.61**
                  
                  
                  1.59
                  
                  
                  -
  **23.**
                  **FINANCIAL
                      INSTRUMENTS**
  Primary
            Financial
            Instruments
  The
            carrying values
            of the primary financial instruments of the Company, with the exception
            of the
            Company’s senior subordinated notes and subordinated debentures, substantially
            approximate fair value due to the short-term maturity and/or other terms
            of
            those instruments.
  The
            fair value of
            the senior subordinated notes and subordinated debentures is based on
            quoted
            market prices. The fair value of these debt instruments, including the
            current
            portion, is as follows:
  **April
                      30, 2005**
                  
                  April
                      30, 2004**Fair****value**
                  
                  **Carrying
                      value**
                  
                  Fairvalue
                  
                  Carrying
                      value73/8%
                      Senior
                      subordinated notes
                  
                  **$**
                  **490,819**
                  
                  **$**
                  **502,760**
                  
                  $
                  344,817
                  
                  $
                  342,675113⁄4%
                      Senior
                      subordinated notes
                  
                  
                  **-**
                  
                  
                  **-**
                  
                  
                  12,504
                  
                  
                  11,472Subordinated
                      debentures
                  
                  
                  **-**
                  
                  
                  **-**
                  
                  
                  10,540
                  
                  
                  10,415
  Derivative
            Financial Instruments Used for Risk Management
  The
            Company
            regularly enters into forward foreign exchange contracts, equity forward
            pricing
            agreements and other derivative instruments to hedge the Company’s exposure to
            expected future cash flows from foreign operations, anticipated transactions
            in
            currencies other than the Canadian dollar and stock price volatility.
            The
            Company does not enter into derivative transactions for speculative or
            trading
            purposes.
  The
            nature,
            maturity, notional amount and fair market value of the Company’s derivatives
            used in risk management activities as at April 30, 2005 are as
            follows:
  Hedging
                      item
                  
                  Maturity
                  
                  Notionalamount
                  
                  Fair
                      market
                      valueForward
                      foreign exchange contractsSell
                      pound
                      sterling; buy US dollar
                  
                  
                  April
                      2006
                  
                  £
                  55,000
                  
                  $
                  (12,401
                  )Sell
                      euro;
                      buy US dollar
                  
                  
                  April
                      2006
                  
                  €
                  25,000
                  
                  
                  (3,585
                  )Sell
                      Norwegian kroner; buy US dollar
                  
                  
                  April
                      2006
                  
                  NOK
                  855,877
                  
                  
                  (1,030
                  )Sell
                      US
                      dollar; buy Canadian dollar
                  
                  
                  April
                      2006
                  
                  USD
                  70,171
                  
                  
                  5,024Sell
                      pound
                      sterling; buy euro
                  
                  
                  April
                      2006
                  
                  £
                  40,666
                  
                  
                  (2,459
                  )Equity
                      forward price agreement
                  
                  
                  July
                      2007
                  
                  
                  1,170
                      units1
                  
                  
                  (188
                  )1Unit
                      amounts
                      have been restated to reflect the April 2005 2-for-1 stock
                      split.
                  
                  
                  
                  
                  
                  
                  
                  $
                  (14,639
                  )
  139
 CHC
                Helicopter
                Corporation
 Notes
                to the
                Consolidated Financial Statements
 April 30,
                2005, 2004 and 2003
 (Tabular
                amounts in
                thousands unless otherwise noted, except per share amounts)
 During
            the year
            ended April 30, 2005, the Company continued its designation of
            its
            U.S.$400.0 million ($502.8 million) 73/8% senior
            subordinated
            notes and related forward foreign currency contracts as effective hedges
            of the
            Company’s net investments in certain self-sustaining operations in Canada, the
            U.K., the Netherlands, and Norway. The Company has also designated other
            pound
            sterling and euro denominated debt as hedges of its net investments in
            its
            self-sustaining operation in the U.K. and the Netherlands. As
            a result of
            these effective hedging relationships, revaluation gains and losses on
            the debt,
            net investments and forward foreign exchange contracts are offset in
            the
            cumulative translation adjustment account in the equity section of the
            balance
            sheet in accordance with Canadian GAAP.
  The
            Company has
            also entered into forward foreign exchange contracts to reduce its exposure
            to
            currency fluctuations on anticipated foreign currency revenues and expenses
            for
            certain of its operations. These relationships also qualified as effective
            hedges under Canadian GAAP.
  In
            addition, the
            Company has hedged its obligations under the SARs plans using an equity
            forward
            price agreement to reduce volatility in cash flow and earnings due to
            possible
            future increases in the Company’s share price. The Company accrues the liability
            and related expense associated with SARs based on the difference between
            the
            reference price and the hedged price. At April 30, 2005 the amount
            recorded
            in current liabilities related to SARs was $10.4 million (April 30,
            2004 - $5.3 million).
  Credit
            Risk on
            Financial Instruments
  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.
  Interest
            Rate
            Risk
  The
            Company has
            used interest rate swap agreements in the past in order to achieve an
            appropriate mix of fixed and variable interest rate debt. The Company’s current
            exposure to interest rates is such that fixed and variable rates are
            appropriately balanced at April 30, 2005 and 2004 without the
            use of
            interest rate derivative instruments.
  Trade
            Credit
            Risk
  Trade
            receivables
            consist primarily of amounts due from multinational companies operating
            in the
            oil and gas industry. Credit risk on these receivables is reduced by
            the large
            and diversified customer base. Included in accounts receivable is an
            allowance
            for doubtful accounts of $7.5 million at April 30, 2005
            (2004 -
            $9.1 million).
  **24.**
                  **INCOME
                      TAXES**
  Future
            income taxes
            reflect the net tax effects of temporary differences between the carrying
            amounts of assets and liabilities for financial reporting purposes and
            the
            amounts used for income tax purposes.
  140
 CHC
                Helicopter
                Corporation
 Notes
                to the
                Consolidated Financial Statements
 April 30,
                2005, 2004 and 2003
 (Tabular
                amounts in
                thousands unless otherwise noted, except per share amounts)
 The
            tax effects of
            temporary differences that give rise to significant portions of future
            income
            tax assets and future income tax liabilities are presented below:
  **2005**
                  
                  2004**Future
                      income tax (liabilities) assets**Property
                      and
                      equipment
                  
                  **$**
                  **(120,396**
                  **)**
                  $
                  (165,291
                  )Long-term
                      investments
                  
                  
                  **(22,833**
                  **)**
                  
                  (12,790
                  )Pension
                      and
                      other employee benefits
                  
                  
                  **(19,338**
                  **)**
                  
                  (13,055
                  )Deferred
                      capital gains
                  
                  
                  **(15,457**
                  **)**
                  
                  (21,878
                  )Losses
                      carried forward
                  
                  
                  **34,976**
                  
                  
                  64,573Deferred
                      costs
                  
                  
                  **4,925**
                  
                  
                  10,659Long-term
                      debt
                  
                  
                  **(4,555**
                  **)**
                  
                  1,289Current
                      accounts payable and receivable
                  
                  
                  **17,312**
                  
                  
                  9,706Other
                  
                  
                  **2,955**
                  
                  
                  2,515Net
                      future
                      income tax liabilities
                  
                  **$**
                  **(122,411**
                  **)**
                  $
                  (124,272
                  )Distributed
                      as follows:Current
                      future income tax assets
                  
                  **$**
                  **23,802**
                  
                  $
                  12,816Current
                      future income tax liabilities
                  
                  
                  **(705**
                  **)**
                  
                  (2,212
                  )Long-term
                      future income tax assets
                  
                  
                  **50,184**
                  
                  
                  44,312Long-term
                      future income tax liabilities
                  
                  
                  **(195,692**
                  **)**
                  
                  (179,188
                  )**$**
                  **(122,411**
                  **)**
                  $
                  (124,272
                  )
  No
            valuation
            allowances have been provided on the future income tax assets as it has
            been
            determined that the full tax benefit of the assets could be realized
            from the
            reversal of existing temporary differences, projected future earnings
            from
            operations and various tax planning strategies.
  The
            Company’s
            income tax (provision) recovery is comprised as follows:
  **2005**
                    
                    2004
                    
                    2003Current
                        income tax provisionCanada
                    
                    **$**
                    **(3,810**
                    **)**
                    $
                    (2,518
                    )
                    $
                    (8,043
                    )Foreign
                    
                    
                    **(24,671**
                    **)**
                    
                    (7,858
                    )
                    
                    (5,258
                    )**(28,481**
                    **)**
                    
                    (10,376
                    )
                    
                    (13,301
                    )Future
                        income
                        tax (provision) recoveryCanadaRecovery
                        related to origination and reversal of temporary
                        differences
                    
                    
                    **7,165**
                    
                    
                    12,501
                    
                    
                    14,625Foreign(Provision)
                        recovery related to origination and reversal oftemporary
                        differences
                    
                    
                    **(2,519**
                    **)**
                    
                    14,523
                    
                    
                    (3,296
                    )**4,646**
                    
                    
                    27,024
                    
                    
                    11,329Income
                        tax
                        (provision) recovery
                    
                    **$**
                    **(23,835**
                    **)**
                    $
                    16,648
                    
                    $
                    (1,972
                    )
  As
            the Company
            operates in several tax jurisdictions, its income is subject to various
            rates of
            taxation. The income tax (provision) recovery differs from the amount
            that would
            have resulted from applying the Canadian statutory income tax rates to
            earnings
            before taxes as follows:
  141
 
 CHC
                Helicopter
                Corporation
 Notes
                to the
                Consolidated Financial Statements
 April 30,
                2005, 2004 and 2003
 (Tabular
                amounts in
                thousands unless otherwise noted, except per share
                amounts)
  **2005**
                  
                  2004
                  
                  2003Earnings
                      from
                      continuing operations before income taxes
                  
                  **$**
                  **97,413**
                  
                  $
                  49,602
                  
                  $
                  81,734Combined
                      Canadian federal and provincial statutory income tax rate
                  
                  
                  **35**
                  **%**
                  
                  37
                  %
                  
                  39
                  %Income
                      tax
                      provision calculated at statutory rate
                  
                  
                  **(34,095**
                  **)**
                  
                  (18,353
                  )
                  
                  (31,876
                  )(Increase)
                      decrease in income tax (provision) recovery resulting
                      from:Reversal
                      of
                      tax liability
                  
                  
                  **-**
                  
                  
                  21,000
                  
                  
                  -Rate
                      differences in various jurisdictions
                  
                  
                  **16,158**
                  
                  
                  15,451
                  
                  
                  18,351Effect
                      of
                      change in tax legislation
                  
                  
                  **(4,224**
                  **)**
                  
                  -
                  
                  
                  13,976Non-deductible
                      items
                  
                  
                  **(3,193**
                  **)**
                  
                  (2,392
                  )
                  
                  (1,759
                  )Large
                      corporations tax
                  
                  
                  **(457**
                  **)**
                  
                  (230
                  )
                  
                  (406
                  )Other
                      foreign
                      taxes paid
                  
                  
                  **(1,745**
                  **)**
                  
                  (1,567
                  )
                  
                  (2,138
                  )Non-taxable
                      portion of capital gains
                  
                  
                  **1,154**
                  
                  
                  2,544
                  
                  
                  56Non-taxable
                      equity income
                  
                  
                  **1,274**
                  
                  
                  2
                  
                  
                  456Other
                  
                  
                  **1,293**
                  
                  
                  193
                  
                  
                  1,368Income
                      tax
                      (provision) recovery
                  
                  **$**
                  **(23,835**
                  **)**
                  $
                  16,648
                  
                  $
                  (1,972
                  )
 
 During
            fiscal 2005,
            legislation was substantially enacted in the Netherlands to reduce the
            corporate
            income tax rate from 34.5% to 30.0%. As a result, the Company adjusted
            the value
            of its future income tax assets related to losses carried forward and
            other
            temporary differences in the Netherlands by $4.2 million.
  During
            fiscal 2004,
            the Company recorded a $21.0 million future income tax recovery,
            a
            significant portion of which is attributable to the reversal of a previously
            recorded tax liability as a result of the disposition of certain of the
            Company’s European fleet. The remainder of the recovery relates to the reversal
            of a previously recorded tax liability which is no longer considered
            necessary
            as a result of the completion of tax authority audits in various
            jurisdictions.
  During
            fiscal 2003, the Company recorded a $14.0 million future foreign income
            tax
            recovery related to its Australian operations due to a change in tax
            law.
            Australian tax legislation now provides wholly-owned corporate groups
            with the
            option of filing consolidated tax returns. The Company’s Australian operations
            elected to do so. The $14.0 million benefit was the result of tax-effecting
            the
            increase in the tax bases of the assets of each of the subsidiaries in
            the
            consolidated Australian group.
  Tax
            losses
  The
            Company has
            accumulated approximately $91.9 million in non-capital tax losses
            of which
            $34.8 million is available to reduce future Canadian income taxes
            otherwise
            payable, $51.4 million is available to reduce future Dutch income
            taxes
            otherwise payable and the remainder is available to reduce future income
            taxes
            otherwise payable in other foreign jurisdictions. If unused, these losses
            will
            expire as follows:
  (in
                      millions
                      of Canadian dollars)2006
                  
                  $
                  4622007
                  
                  
                  5,0492008
                  
                  
                  1522009
                  
                  
                  2,9582014
                  
                  
                  15,6862015
                  
                  
                  10,456Indefinitely
                  
                  
                  57,144$
                  91,907
  142
 CHC
                Helicopter
                Corporation
 Notes
                to the
                Consolidated Financial Statements
 April 30,
                2005, 2004 and 2003
 (Tabular
                amounts in
                thousands unless otherwise noted, except per share amounts)
 The
            Company has
            also accumulated approximately $37.4 million in capital tax losses
            of which
            $35.4 million is available to reduce future capital gains realized
            in
            Canada and the remainder is available to reduce future capital gains
            realized in
            foreign jurisdictions.
  The
            benefit
            anticipated from the utilization of these losses has been recorded as
            a future
            income tax asset.
  **25.**
                  **PER
                      SHARE INFORMATION**
  Net
            earnings have
            been calculated based on the sum of the weighted average number of Class A
            subordinate voting shares and Class B multiple voting shares outstanding
            of
            42,673,079 for the fiscal year ended April 30, 2005 (2004 - 42,121,906;
            2003 - 41,456,032). Prior years have been restated to reflect the April
            2005
            two-for-one stock split.
  **2005**Net
                      earnings
                      (loss)
                  
                  Weighted
                      average
                  
                  Net
                      earnings (loss)
                    per
                      shareCont.
                    ops.
                  
                  Disc.
                    ops.
                  
                  Total
                  
                  numberof
                      shares
                  
                  Cont.
                    ops.
                  
                  Disc.
                    ops.
                  
                  Total$
                  73,578
                  
                  $
                  (11,019
                  )
                  $
                  62,559
                  
                  
                  42,673Shares
                      as
                      security for Class A subordinate voting employee share purchase
                      loans*(Note
                      19)*
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  (736
                  )**Basic**
                  
                  $
                  73,578
                  
                  $
                  (11,019
                  )
                  $
                  62,559
                  
                  
                  41,937
                  
                  $
                  1.75
                  
                  $
                  (0.26
                  )
                  $
                  1.49**Effect
                      of potential dilutive securities:**Share
                      options
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  1,975Convertible
                      debt
                  
                  
                  386
                  
                  
                  -
                  
                  
                  386
                  
                  
                  1,379Shares
                      as
                      security for Class A subordinate voting employee share purchase
                      loans*(Note
                      19)*
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  736**Diluted**
                  
                  $
                  73,964
                  
                  $
                  (11,019
                  )
                  $
                  62,945
                  
                  
                  46,027
                  
                  $
                  1.61
                  
                  $
                  (0.24
                  )
                  $
                  1.37
  143
 CHC
                Helicopter
                Corporation
 Notes
                to the
                Consolidated Financial Statements
 April 30,
                2005, 2004 and 2003
 (Tabular
                amounts in
                thousands unless otherwise noted, except per share amounts)
 2004Net
                      earnings (loss)
                  
                  Weighted
                      average
                  
                  Net
                      earnings (loss)
                    per
                      shareCont.
                    ops.
                  
                  Disc.
                    ops.
                  
                  Total
                  
                  number
                      of shares
                  
                  Cont.
                    ops.
                  
                  Disc.
                    ops.
                  
                  Total$
                  66,250
                  
                  $
                  (2,574
                  )
                  $
                  63,676
                  
                  
                  42,122Shares
                      as
                      security for Class A subordinate voting employee share purchase
                      loans*(Note
                      19)*
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  (776
                  )**Basic**
                  
                  $
                  66,250
                  
                  $
                  (2,574
                  )
                  $
                  63,676
                  
                  
                  41,346
                  
                  $
                  1.60
                  
                  $
                  (0.06
                  )
                  $
                  1.54**Effect
                      of potential dilutive securities:**Share
                      options
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  1,842Convertible
                      debt
                  
                  
                  493
                  
                  
                  -
                  
                  
                  493
                  
                  
                  1,379Shares
                    as
                    security for Class A subordinate voting employee share purchase
                    loans*(Note
                    19)*
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  776$
                  66,743
                  
                  $
                  (2,574
                  )
                  $
                  64,169
                  
                  
                  45,343Add
                      back
                      share options anti-dilutive impact
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  24**Diluted**
                  
                  $
                  66,743
                  
                  $
                  (2,574
                  )
                  $
                  64,169
                  
                  
                  45,367
                  
                  $
                  1.47
                  
                  $
                  (0.06
                  )
                  $
                  1.41
  2003Net
                      earnings (loss)
                  
                  Weighted
                      average
                  
                  Net
                      earnings (loss)
                    per
                      shareCont.
                    ops.
                  
                  Disc.
                    ops.
                  
                  Total
                  
                  number
                      of shares
                  
                  Cont.
                    ops.
                  
                  Disc.
                    ops.
                  
                  Total**Basic**
                  
                  $
                  79,762
                  
                  $
                  (14,297
                  )
                  $
                  65,465
                  
                  
                  41,456
                  
                  $
                  1.92
                  
                  $
                  (0.34
                  )
                  $
                  1.58**Effect
                      of potential dilutive securities:**Share
                      options
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  2,206Convertible
                      debt
                  
                  
                  478
                  
                  
                  -
                  
                  
                  478
                  
                  
                  1,524$
                  80,240
                  
                  $
                  (14,297
                  )
                  $
                  65,943
                  
                  
                  45,186Add
                      back
                      share options anti-dilutive impact
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  56**Diluted**
                  
                  $
                  80,240
                  
                  $
                  (14,297
                  )
                  $
                  65,943
                  
                  
                  45,242
                  
                  $
                  1.76
                  
                  $
                  (0.30
                  )
                  $
                  1.46
  Per
            share amounts
            are calculated using the treasury stock method. Under this method, the
            proceeds
            from the exercise of options are assumed to be used to repurchase the
            Company’s
            shares on the open market. The difference between the number of shares
            assumed
            purchased and the number of options assumed exercised is added to the
            actual
            number of shares outstanding to determine diluted shares outstanding
            for
            purposes of calculating diluted earnings per share. Therefore, the number
            of
            shares in the diluted earnings per share calculation will increase as
            the
            average share price increases. There were 22 million ordinary
            shares
            outstanding at April 30, 2005, April 30, 2004 and April 30,
            2003, all
            of which are owned by the Company’s majority shareholder (Note 19 ).
            The payment of
            dividends on these ordinary shares requires minority shareholder approval.
            The
            shares also have no conversion rights in the hands of their holder. Therefore,
            these ordinary shares have not been included in the calculation of basic
            and
            diluted earnings per share.
  144
 CHC
                Helicopter
                Corporation
 Notes
                to the
                Consolidated Financial Statements
 April 30,
                2005, 2004 and 2003
 (Tabular
                amounts in
                thousands unless otherwise noted, except per share amounts)
 **26.**
                    **CHANGE
                        IN NON-CASH WORKING
                        CAPITAL**
 **2005**
                  
                  2004
                  
                  2003Receivables
                  
                  **$**
                  **(36,499**
                  **)**
                  $
                  27,240
                  
                  $
                  15,388Inventory
                  
                  
                  **(14,019**
                  **)**
                  
                  (23,744
                  )
                  
                  (16,064
                  )Prepaid
                      expenses
                  
                  
                  **2,004**
                  
                  
                  (17,624
                  )
                  
                  3,203Payables
                      and accruals
                  
                  
                  **55,094**
                  
                  
                  (18,890
                  )
                  
                  (20,721
                  )**$**
                  **6,580**
                  
                  $
                  (33,018
                  )
                  $
                  (18,194
                  )
  **27.**
                  **SEGMENT
                      INFORMATION**
  The
            Company
            provides services across different geographic areas to many customers.
            Approximately 67% (2004 - 73%; 2003 - 72%) of the Company’s revenues in fiscal
            2005 were derived from customers involved in oil and gas production and
            exploration. In the current fiscal year no single customer represented
            greater
            than 10% of revenue. In fiscal 2004, one of the Company’s oil and gas customers
            represented $73.6 million (2003 - $87.9 million) from five (2003
            - five)
            contracts expiring from fiscal 2004 to 2010 of which $67.0 million
            (2003 -
            $79.7 million) was earned in the European flying segment, $6.1 million
            (2003 - $8.1 million) was earned in the International flying segment
            and
            $0.5 million was earned in the Schreiner segment.
  The
            primary factors
            considered in identifying segments are geographic coverage, which also
            impacts
            the nature of the Company’s operations, the type of contracts that are entered
            into, the type of aircraft that are utilized and segments used by management
            to
            evaluate the business. The Company includes five reporting segments in
            its
            financial statements: European flying, International flying, Schreiner,
            Repair
            and overhaul, and Corporate and other.
  The
            European flying
            segment includes primarily helicopter services to the oil and gas industry
            in
            the U.K., Norwegian and Danish sectors of the North Sea. In addition,
            the
            European flying segment includes helicopter search and rescue service
            operations
            in Ireland and Norway.
  The
            International
            flying segment includes primarily helicopter services for offshore oil
            and gas,
            search and rescue and emergency medical customers in Asia, Africa, Australia,
            South America, the east coast of Canada and other locations around the
            world.
  Schreiner
            includes
            helicopter and fixed-wing flying services primarily to the offshore oil
            and gas
            industry in the Netherlands and Africa and includes other ancillary businesses
            including aircraft parts sales.
  The
            Repair and
            overhaul segment includes helicopter repair and overhaul facilities located
            in
            Norway, Canada, Australia and the U.K., which provide services to the
            Company’s
            helicopter fleet and third-party customers located in Europe, Asia, and
            North
            America and the survival suit and safety equipment production
            business.
  The
            Corporate and
            other segment includes corporate head office and other activities.
  The
            accounting
            policies of the segments and the basis of accounting for transactions
            between
            segments are the same as those described in the summary of significant
            accounting policies (Note 2 ).
  145
  CHC
                Helicopter
                Corporation
 Notes
                to the
                Consolidated Financial Statements
 April 30,
                2005, 2004 and 2003
 (Tabular
                amounts in
                thousands unless otherwise noted, except per share amounts)
 **Year
                      Ended
                      April 30, 2005**European
                      flying
                  
                  Int’lflying
                  
                  Schreiner
                  
                  Repair
                      and
                      overhaul
                  
                  Corporate
                      and
                      other
                  
                  Inter-segment
                      eliminations
                  
                  Consolidated**Revenue
                      from external customers**
                  
                  **$**
                  437,912
                  
                  $
                  233,516
                  
                  $
                  154,613
                  
                  $
                  77,303
                  
                  $
                  -
                  
                  $
                  -
                  
                  $
                  903,344Add:
                      Inter-segment revenues
                  
                  
                  22,710
                  
                  
                  11,916
                  
                  
                  -
                  
                  
                  145,919
                  
                  
                  17,398
                  
                  
                  (197,943
                  )
                  
                  -Total
                      revenue
                  
                  
                  460,622
                  
                  
                  245,432
                  
                  
                  154,613
                  
                  
                  223,222
                  
                  
                  17,398
                  
                  
                  (197,943
                  )
                  
                  903,344Direct
                      costs
                  
                  
                  386,565
                  
                  
                  199,474
                  
                  
                  119,521
                  
                  
                  181,377
                  
                  
                  13,525
                  
                  
                  (198,295
                  )
                  
                  702,167General
                      and
                      administration
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  25,803
                  
                  
                  -
                  
                  
                  25,803Segment
                      EBITDA*(i)*
                  
                  
                  74,057
                  
                  
                  45,958
                  
                  
                  35,092
                  
                  
                  41,845
                  
                  
                  (21,930
                  )
                  
                  352
                  
                  
                  175,374Amortization
                  
                  
                  (11,428
                  )
                  
                  (7,500
                  )
                  
                  (5,501
                  )
                  
                  (4,537
                  )
                  
                  (1,567
                  )
                  
                  -
                  
                  
                  (30,533
                  )Restructuring
                      costs
                  
                  
                  (2,864
                  )
                  
                  (1,358
                  )
                  
                  (5,646
                  )
                  
                  (3,307
                  )
                  
                  (4,437
                  )
                  
                  -
                  
                  
                  (17,612
                  )Gain
                      (loss)
                      on disposals of assets
                  
                  
                  2,212
                  
                  
                  1,493
                  
                  
                  510
                  
                  
                  (110
                  )
                  
                  -
                  
                  
                  -
                  
                  
                  4,105Operating
                      income (loss)
                  
                  $
                  61,977
                  
                  $
                  38,593
                  
                  $
                  24,455
                  
                  $
                  33,891
                  
                  $
                  (27,934
                  )
                  $
                  352
                  
                  
                  131,334Debt
                      settlement costs
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  (1,994
                  )Financing
                      charges
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  (37,120
                  )Earnings
                      from continuing operations before income taxes and undernoted
                      items
                  
                  
                  92,220Non-controlling
                      interest
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  (288
                  )Equity
                      in
                      earnings of associated
                      companies
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  5,481Income
                      tax
                      provision
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  (23,835
                  )Net
                      earnings from continuing
                      operations
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  73,578Net
                      loss from discontinued
                      operations
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  (11,019
                  )Net
                      earnings
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  $
                  62,559Segment
                      assets - continuing operations
                  
                  $
                  489,788
                  
                  $
                  499,867
                  
                  $
                  243,523
                  
                  $
                  347,009
                  1
                  $
                  146,896
                  
                  
                  
                  
                  $
                  1,727,083Segment
                      assets - discontinued operations
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  
                  
                  
                  16,152Total
                      Assets
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  1,743,235Segment
                      capital asset expenditures
                  
                  
                  63,926
                  
                  
                  93,956
                  
                  
                  20,290
                  
                  
                  9,579
                  
                  
                  9,845
                  
                  
                  
                  
                  
                  197,596Segment
                      helicopter major inspections
                  
                  
                  9,476
                  
                  
                  1,635
                  
                  
                  4,428
                  
                  
                  -
                  
                  
                  -
                  
                  
                  
                  
                  
                  15,539Segment
                      helicopter components
                  
                  
                  33,527
                  
                  
                  23,220
                  
                  
                  5,493
                  
                  
                  -
                  
                  
                  1,014
                  
                  
                  
                  
                  
                  63,254
 1 Includes
            goodwill
            of $8,861
  146
 CHC
                Helicopter
                Corporation
 Notes
                to the
                Consolidated Financial Statements
 April 30,
                2005, 2004 and 2003
 (Tabular
                amounts in
                thousands unless otherwise noted, except per share amounts)
  **Year
                      Ended April 30, 2004*(ii)***European
                      flying
                  
                  Int’lflying
                  
                  Schreiner
                  
                  Repair
                      and
                      overhaul
                  
                  Corporate
                      and
                      other
                  
                  Inter-segment
                      eliminations
                  
                  Consolidated**Revenue
                      from external customers**
                  
                  $
                  437,631
                  
                  $
                  191,773
                  
                  $
                  32,490
                  
                  $
                  58,119
                  
                  $
                  -
                  
                  $
                  -
                  
                  $
                  720,013Add:
                      Inter-segment revenues
                  
                  
                  16,157
                  
                  
                  11,047
                  
                  
                  -
                  
                  
                  135,490
                  
                  
                  13,577
                  
                  
                  (176,271
                  )
                  
                  -**Total
                      revenue**
                  
                  
                  453,788
                  
                  
                  202,820
                  
                  
                  32,490
                  
                  
                  193,609
                  
                  
                  13,577
                  
                  
                  (176,271
                  )
                  
                  720,013Direct
                      costs
                  
                  
                  381,684
                  
                  
                  174,535
                  
                  
                  29,165
                  
                  
                  152,381
                  
                  
                  14,494
                  
                  
                  (176,288
                  )
                  
                  575,971General
                      and
                      administration
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  18,633
                  
                  
                  -
                  
                  
                  18,633**Segment
                      EBITDA*****(i)***
                  
                  
                  72,104
                  
                  
                  28,285
                  
                  
                  3,325
                  
                  
                  41,228
                  
                  
                  (19,550
                  )
                  
                  17
                  
                  
                  125,409Amortization
                  
                  
                  (12,371
                  )
                  
                  (5,715
                  )
                  
                  (1,126
                  )
                  
                  (644
                  )
                  
                  (5,332
                  )
                  
                  -
                  
                  
                  (25,188
                  )Restructuring
                      costs
                  
                  
                  (7,114
                  )
                  
                  -
                  
                  
                  -
                  
                  
                  (849
                  )
                  
                  (1,218
                  )
                  
                  -
                  
                  
                  (9,181
                  )Gain
                      (loss)
                      on disposals of assets
                  
                  
                  2,245
                  
                  
                  1,333
                  
                  
                  (199
                  )
                  
                  -
                  
                  
                  (72
                  )
                  
                  -
                  
                  
                  3,307**Operating
                      income (loss)**
                  
                  $
                  54,864
                  
                  $
                  23,903
                  
                  $
                  2,000
                  
                  $
                  39,735
                  
                  $
                  (26,172
                  )
                  $
                  17
                  
                  
                  94,347Debt
                      settlement costs
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  (19,716
                  )Financing
                      charges
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  (28,954
                  )**Earnings
                      from continuing operations before income taxes and undernoted
                      items**
                  
                  
                  45,677Non-controlling
                      interest
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  -Equity
                      in
                      earnings of associated
                      companies
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  3,925Income
                      tax
                      recovery
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  16,648**Net
                      earnings from continuing
                      operations**
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  66,250**Net
                      loss from discontinued
                      operations**
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  (2,574
                  )**Net
                      earnings**
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  $
                  63,676Segment
                      assets - continuing operations
                  
                  $
                  490,888
                  
                  $
                  382,894
                  
                  $
                  215,380
                  
                  $
                  271,911
                  
                  $
                  118,360
                  
                  
                  
                  
                  $
                  1,479,433Segment
                      assets - discontinued operations
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  
                  
                  
                  55,450Total
                      Assets
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  1,534,883Segment
                      capital asset expenditures
                  
                  
                  31,294
                  
                  
                  54,996
                  
                  
                  1,502
                  
                  
                  4,506
                  
                  
                  24,583
                  
                  
                  
                  
                  
                  116,881Segment
                      helicopter major inspections
                  
                  
                  6,920
                  
                  
                  1,308
                  
                  
                  1,009
                  
                  
                  -
                  
                  
                  -
                  
                  
                  
                  
                  
                  9,237Segment
                      helicopter components
                  
                  
                  34,589
                  
                  
                  24,196
                  
                  
                  -
                  
                  
                  -
                  
                  
                  242
                  
                  
                  
                  
                  
                  59,027
  147
 CHC
                Helicopter
                Corporation
 Notes
                to the
                Consolidated Financial Statements
 April 30,
                2005, 2004 and 2003
 (Tabular
                amounts in
                thousands unless otherwise noted, except per share amounts)
 **Year
                      Ended April 30, 2003*(ii)***European
                      flying
                  
                  Int’lflying
                  
                  Schreiner
                  
                  Repair
                      and
                      overhaul
                  
                  Corporate
                      and
                      other
                  
                  Inter-segment
                      eliminations
                  
                  Consolidated**Revenue
                      from external customers**
                  
                  $
                  464,114
                  
                  $
                  184,784
                  
                  $
                  -
                  
                  $
                  62,989
                  
                  $
                  -
                  
                  $
                  -
                  
                  $
                  711,887Add:
                      Inter-segment revenues
                  
                  
                  17,338
                  
                  
                  12,902
                  
                  
                  -
                  
                  
                  141,861
                  
                  
                  13,852
                  
                  
                  (185,953
                  )
                  
                  -**Total
                      revenue**
                  
                  
                  481,452
                  
                  
                  197,686
                  
                  
                  -
                  
                  
                  204,850
                  
                  
                  13,852
                  
                  
                  (185,953
                  )
                  
                  711,887Direct
                      costs
                  
                  
                  392,838
                  
                  
                  157,819
                  
                  
                  -
                  
                  
                  167,460
                  
                  
                  13,652
                  
                  
                  (185,809
                  )
                  
                  545,960General
                      and
                      administration
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  21,467
                  
                  
                  -
                  
                  
                  21,467**Segment
                      EBITDA*****(i)***
                  
                  
                  88,614
                  
                  
                  39,867
                  
                  
                  -
                  
                  
                  37,390
                  
                  
                  (21,267
                  )
                  
                  (144
                  )
                  
                  144,460Amortization
                  
                  
                  (11,896
                  )
                  
                  (3,971
                  )
                  
                  -
                  
                  
                  (856
                  )
                  
                  (3,762
                  )
                  
                  -
                  
                  
                  (20,485
                  )Gain
                      (loss)
                      on disposals of assets
                  
                  
                  (829
                  )
                  
                  3,242
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  2,413**Operating
                      income (loss)**
                  
                  $
                  75,889
                  
                  $
                  39,138
                  
                  $
                  -
                  
                  $
                  36,534
                  
                  $
                  (25,029
                  )
                  $
                  (144
                  )
                  
                  126,388Debt
                      settlement costs
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  (12,464
                  )Financing
                      charges
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  (34,530
                  )**Earnings
                      from continuing operations before income taxes and undernoted
                      items**
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  79,394Non-controlling
                      interest
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  -Equity
                      in
                      earnings of associated companies
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  2,340Income
                      tax
                      provision
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  (1,972
                  )**Net
                      earnings from continuing operations**
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  79,762**Net
                      loss from discontinued operations**
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  (14,297
                  )**Net
                      earnings**
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  $
                  65,465Segment
                      assets - continuing operations
                  
                  $
                  500,188
                  
                  $
                  306,200
                  
                  $
                  -
                  
                  $
                  246,840
                  
                  $
                  79,695
                  
                  
                  
                  
                  $
                  1,132,923Segment
                      assets - discontinued operations
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  
                  
                  
                  24,697Total
                      Assets
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  1,157,620Segment
                      capital asset expenditures
                  
                  
                  24,335
                  
                  
                  8,267
                  
                  
                  -
                  
                  
                  9,059
                  
                  
                  3,008
                  
                  
                  
                  
                  
                  44,669Segment
                      helicopter major inspections
                  
                  
                  9,278
                  
                  
                  4,106
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  
                  
                  
                  13,384Segment
                      helicopter components
                  
                  
                  32,447
                  
                  
                  21,448
                  
                  
                  -
                  
                  
                  (6,406
                  )
                  
                  -
                  
                  
                  
                  
                  
                  47,489
  (i)
                  Segment
                      EBITDA is defined as segment earnings before amortization,
                      restructuring
                      costs, gain (loss) on disposals of assets, debt settlement
                      costs,
                      financing charges, non-controlling interest, equity in earnings
                      of
                      associated companies, and income tax (provision)
                      recovery.
  (ii)
                  Comparative
                      information has been reclassified to reflect the results of
                      discontinued
                      operations (Note8)
                      and other
                      adjustments.
  148
 CHC
                Helicopter
                Corporation
 Notes
                to the
                Consolidated Financial Statements
 April 30,
                2005, 2004 and 2003
 (Tabular
                amounts in
                thousands unless otherwise noted, except per share amounts)
 Geographic
              Information
 Revenues
                  
                  Property
                      and
                      equipment
                  
                  Goodwill**2005**
                  
                  2004
                  
                  2003
                  
                  **2005**
                  
                  2004
                  
                  **2005**
                  
                  2004Canada
                  
                  **$**
                  **23,652**
                  
                  $
                  21,507
                  
                  $
                  25,775
                  
                  **$**
                  **114,831**
                  
                  $
                  76,417
                  
                  **$**
                  **1,079**
                  
                  $
                  -United
                      Kingdom
                  
                  
                  **203,519**
                  
                  
                  193,678
                  
                  
                  211,454
                  
                  
                  **34,360**
                  
                  
                  41,885
                  
                  
                  **7,782**
                  
                  
                  **-**Norway
                  
                  
                  **183,089**
                  
                  
                  184,805
                  
                  
                  184,532
                  
                  
                  **230,573**
                  
                  
                  224,479
                  
                  
                  **-**
                  
                  
                  **-**Africa
                  
                  
                  **121,925**
                  
                  
                  55,954
                  
                  
                  38,122
                  
                  
                  **160,388**
                  
                  
                  106,726
                  
                  
                  **-**
                  
                  
                  **-**Australia
                  
                  
                  **61,755**
                  
                  
                  52,489
                  
                  
                  46,860
                  
                  
                  **68,083**
                  
                  
                  71,950
                  
                  
                  **-**
                  
                  
                  **-**Denmark
                  
                  
                  **35,473**
                  
                  
                  28,199
                  
                  
                  32,260
                  
                  
                  **31,473**
                  
                  
                  40,607
                  
                  
                  **-**
                  
                  
                  **-**The
                      Netherlands
                  
                  
                  **58,611**
                  
                  
                  14,554
                  
                  
                  -
                  
                  
                  **57,586**
                  
                  
                  65,317
                  
                  
                  **-**
                  
                  
                  **-**Other
                      Asian
                      countries
                  
                  
                  **88,489**
                  
                  
                  73,962
                  
                  
                  64,404
                  
                  
                  **76,566**
                  
                  
                  52,298
                  
                  
                  **-**
                  
                  
                  **-**Other
                      European countries
                  
                  
                  **82,892**
                  
                  
                  74,638
                  
                  
                  80,996
                  
                  
                  **34,340**
                  
                  
                  26,887
                  
                  
                  **-**
                  
                  
                  **-**Other
                      countries
                  
                  
                  **43,939**
                  
                  
                  20,227
                  
                  
                  27,484
                  
                  
                  **43,010**
                  
                  
                  27,839
                  
                  
                  **-**
                  
                  
                  **-**Consolidated
                      total
                  
                  **$**
                  **903,344**
                  
                  $
                  720,013
                  
                  $
                  711,887
                  
                  **$**
                  **851,210**
                  
                  $
                  734,405
                  
                  **$**
                  **8,861**
                  
                  $
                  -
  Revenues
            are
            attributed to countries based on location of customer for repair and
            overhaul
            services and location of service for flying revenue.
  **28.**
                  **COMMITMENTS**
  The
            Company has
            entered into aircraft operating leases with 18 lessors in respect of
            63 aircraft
            included in the Company’s fleet at April 30, 2005. At inception the
            Company’s aircraft leases had terms not exceeding 8.5 years. At
            April 30, 2005 these leases had expiry dates ranging from 2006
            to 2013. The
            Company has options to purchase the aircraft at fair market value or
            agreed
            amounts that do not constitute bargain purchase options, but has no commitments
            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
            facility or has the work performed by an external repair and overhaul
            service
            provider. There is no commitment to incur these costs unless the aircraft
            is
            flown.
  The
            Company also
            has commitments with respect to operating leases for aircraft, buildings,
            land
            and equipment. Total rentals paid in fiscal 2005 were $61.9 million (2004
            -
            $54.9 million; 2003 - $53.0 million). The minimum lease
            rentals
            required under such leases were $280.4 million as at April 30,
            2005
            and are payable in the following amounts over the following fiscal
            years:
  Aircraft
                    operating
                      leases
                  
                  Building,
                      land
                    and
                      equipment
                    operating
                      leases
                  
                  Total
                    operating
                      leases2006
                  
                  $
                  54,875
                  
                  $
                  5,415
                  
                  $
                  60,2902007
                  
                  
                  45,010
                  
                  
                  4,004
                  
                  
                  49,0142008
                  
                  
                  39,193
                  
                  
                  3,896
                  
                  
                  43,0892009
                  
                  
                  36,233
                  
                  
                  3,826
                  
                  
                  40,0592010
                  
                  
                  31,550
                  
                  
                  3,421
                  
                  
                  34,971and
                      thereafter
                  
                  
                  36,796
                  
                  
                  16,229
                  
                  
                  53,025$
                  243,657
                  
                  $
                  36,791
                  
                  $
                  280,448
  As
            at
            April 30, 2005, the Company had ordered and made deposits
            (Note 13 )
            for a number of
            aircraft. At April 30, 2005, the Company had committed to purchase
            eight
            heavy and 17 medium aircraft. Total capital committed to these purchases
            is
            approximately $279.2 million (U.S. $222.2 million).
            These
            aircraft are expected to be delivered in fiscal 2006 and will be deployed
            in the
            Company’s European and International operations.
  Where
            possible, the
            Company intends to finance these aircraft through operating leases.
  149
 CHC
                Helicopter
                Corporation
 Notes
                to the
                Consolidated Financial Statements
 April 30,
                2005, 2004 and 2003
 (Tabular
                amounts in
                thousands unless otherwise noted, except per share amounts)
 **29.**
                    **VARIABLE
                        INTEREST ENTITIES**
 At
            April 30,
            2005 the Company operated 19 aircraft (2004 - 23 aircraft) under operating
            leases with seven entities that would be considered variable interest
            entities
            (“VIEs”) under Canadian and U.S. GAAP. These leases have terms and conditions
            similar to those of the Company’s other operating leases over periods ranging
            from 2006 to 2012.
  At
            April 30,
            2003 U.S. GAAP FASB Interpretation No. 46 (“FIN 46”) was effective for
            all VIEs created after January 31, 2003 and was effective for
            those VIEs
            created prior to January 31, 2003 for the Company’s interim period which
            commenced November 1, 2003. The Canadian guidance (“AcG-15”) applies to all
            annual and interim periods beginning on or after November 1, 2004 and
            is
            essentially consistent with the provisions contained in U.S. GAAP with
            regard to
            the disclosure and consolidation requirements for VIEs.
  As
            at
            April 30, 2005, under FIN 46, the revisions under FIN 46-R
            and
            AcG-15, the Company has concluded that it is not the primary beneficiary
            of any
            of the aforementioned VIEs and that it is not required to consolidate
            any of
            these VIEs in its consolidated financial statements. The application
            of
            FIN 46, FIN 46-R and AcG-15 has not had any impact on the
            Company’s
            consolidated financial statements.
  Based
            on appraisals
            by independent helicopter valuation companies as at April 30,
            2005, the
            unaudited estimated fair market value of the aircraft leased from VIEs
            is
            $169.6 million (2004 - $245.3 million). The Company has
            provided
            junior loans and loans receivable in connection with operating leases
            with these
            VIEs. The Company’s maximum exposure to loss related to the junior loans and
            loans receivable as a result of its involvement with the VIEs is
            $13.0 million (2004 - $18.8 million).
  **30.**
                  **GUARANTEES**
  The
            Company has
            given guarantees to certain lessors in respect of operating leases. If
            the
            Company fails to meet the senior credit facilities' financial ratios
            or breaches
            any of the covenants of those facilities and, as a result, the senior
            lenders
            accelerate debt repayment, the leases provide for a cross-acceleration
            that
            could give the lessors and financial institutions that are lenders to
            those
            lessors the right to terminate the leases and require return of the aircraft
            and
            payment of the present value of all future lease payments and certain
            other
            amounts. If the realized value of the aircraft is insufficient to discharge
            the
            obligations due to those lessors in respect of the present value of the
            future
            lease payments, those lessors’ lenders could obtain payment of that deficiency
            from the Company under these guarantees.
  The
            Company has
            provided limited guarantees to third parties under some of its operating
            leases
            relating to a portion of the aircraft values at the termination of the
            leases.
            The leases have terms expiring between 2006 and 2013. The Company’s exposure
            under the asset value guarantees including guarantees in the form of
            junior
            loans, loans receivable and deferred payments is approximately
            $40.1 million (2004 - $33.3 million). The resale market
            for the
            aircraft types for which the Company has provided guarantees remains
            strong, and
            as a result, the Company does not anticipate incurring any liability
            or loss
            with respect to these guarantees.
  **31.**
                  **CONTINGENT
                      LIABILITIES**
  The
            Company entered
            into a contract that required the deployment of new aircraft during the
            fourth
            quarter. This contract commitment was not met due to the late delivery
            of the
            aircraft by the manufacturer. The Company was able to substitute aircraft
            to
            meet the customer’s flying needs. The customer believes it is entitled to
            compensation for the delay. The Company’s interpretation of the contract is that
            no compensation is payable. Currently the customer and the Company are
            in
            discussions to resolve this issue and therefore, the potential outcome
            and
            amount of any settlement are presently unknown. As a result, no amounts
            have
            been accrued in relation to this issue at April 30, 2005.
  Petitions
            have been
            filed against subsidiaries for unspecified damages concerning helicopter
            accidents in prior years. It is management’s opinion that damages for which the
            Company may become responsible, if any, will be covered by the Company’s
            insurance and will therefore not have a material effect on the financial
            condition or results of operations of the Company.
  150
 CHC
                Helicopter
                Corporation
 Notes
                to the
                Consolidated Financial Statements
 April 30,
                2005, 2004 and 2003
 (Tabular
                amounts in
                thousands unless otherwise noted, except per share amounts)
 **32.**
                    **EMPLOYEE
                        PENSION PLANS**
 The
            Company
            maintains defined contribution employee pension plans in Canada, the
            U.K.,
            Netherlands, Denmark, Australia and South Africa for approximately
            40% of
            the Company’s active employees and certain former employees. The Company’s
            contributions to the defined contribution plans are based upon percentages
            of
            gross salaries. The Company’s contributions to the defined contribution plans
            expensed during fiscal 2005 were $5.7 million (2004 - $4.6 million;
            2003 - $3.5 million).
  The
            Company also
            maintains both funded and unfunded and both flat-benefit and final-pay
            defined
            benefit plans in Canada, the U.K., Norway and the Netherlands for approximately
            one-third of the Company’s active employees. Funded plans require the Company to
            make cash contributions to the plan in order that there will be sufficient
            assets to discharge the plans’ benefit obligations as they become due. Unfunded
            plans do not require contributions to be paid into the plan by the Company.
            Rather, the Company pays the benefit obligations directly as they are
            due.
  For
            the defined
            benefit pension plan in the U.K. the investment policy states that the
            plan
            assets should be invested with 40% in a fund tracking the U.K. Index
            and 60% in
            a fund tracking the Balanced Consensus Fund. The required percentage
            breakdown
            of the assets to be held under this plan is as follows:
  Category
                  
                  Percentage
                      maximumU.K.
                      equities
                  
                  
                  42%
                      to
                      48
                  %Overseas
                      equities
                  
                  
                  27%
                      to
                      33
                  %U.K.
                      bonds
                  
                  
                  22%
                      to
                      28
                  %
  The
            assets held in
            the Norwegian plans are to be diversified as follows:
  Category
                  
                  Percentage
                      maximumNorwegian
                      equities
                  
                  
                  10
                  %International
                      equities
                  
                  
                  35
                  %Total
                      equities
                  
                  
                  35
                  %Norwegian
                      bonds
                  
                  
                  70
                  %High
                      yield
                      bonds
                  
                  
                  25
                  %Emerging
                      market bonds
                  
                  
                  25
                  %International
                      bonds
                  
                  
                  40
                  %Total
                      bonds
                  
                  
                  20%
                      to
                      100
                  %Money
                      market
                  
                  
                  80
                  %Property
                      funds
                  
                  
                  15
                  %
  For
            the assets held
            in the plan in the Netherlands, 80% must be invested in fixed rate investments
            and the remaining 20% invested in shares with a maximum deviation of
            5% upwards
            or downwards.
  While
            the asset mix
            varies in each plan, overall the asset mix at April 30, 2005 was
            37.0%
            equities, 41.9% fixed income and 21.1% money market.
  For
            all the defined
            benefit pension plans 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.
  For
            the U.K. plans
            it is expected that the rate of return on the plan assets will be between
            4% and
            5% in excess of price inflation. For the plans in Norway and the Netherlands
            the
            expected long-term rate of return is considered in reference to the longest
            stated bond rates in each country.
  151
 CHC
                Helicopter
                Corporation
 Notes
                to the
                Consolidated Financial Statements
 April 30,
                2005, 2004 and 2003
 (Tabular
                amounts in
                thousands unless otherwise noted, except per share amounts)
 The
            Company retains
            actuaries to measure the assets, accrued benefit obligations and funding
            requirements of each defined benefit plan on an annual basis at April 30
            and obtains quarterly updates.
  During
            the year
            ended April 30, 2005 the plan in the Netherlands was amended from
            a final
            pay arrangement to an average pay arrangement resulting in a reduction
            in the
            accrued benefit obligation of $11.5 million. Also during the year,
            the plan
            in Canada was amended by adding additional employees to the plan resulting
            in an
            increase of $2.6 million to both unrecognized prior service costs and
            the
            benefit obligations.
  In
            addition, the
            sale of SAMCO (Note 8 )
            as well as
            terminations as part of the restructuring initiatives (Note 16 )
            resulted in a
            curtailment of the Netherlands pension plan. A curtailment gain of
            $2.8 million from the sale of SAMCO was recorded in the results
            of
            discontinued operations and a curtailment gain of $2.9 million
            related to
            the Company’s restructuring activities has been recorded in restructuring costs.
            The curtailment gain for both events reflects a reduction in both the
            benefit
            obligations and unrecognized past service costs.
  The
            consolidated
            changes in the benefit obligations and fair values of assets for the
            defined
            benefit plans during fiscal 2005 and 2004 are as follows:
  **2005**
                  
                  2004**Change
                      in benefit obligations**Benefit
                      obligations, beginning of year
                  
                  **$**
                  **543,906**
                  
                  $
                  423,902Schreiner
                      acquisition*(Note 7)*
                  
                  
                  **-**
                  
                  
                  73,897Current
                      service cost
                  
                  
                  **19,508**
                  
                  
                  17,050Interest
                      cost
                  
                  
                  **29,015**
                  
                  
                  24,233Amendments
                  
                  
                  **(8,933**
                  **)**
                  
                  -Net
                      actuarial and experience losses
                  
                  
                  **49,244**
                  
                  
                  12,248Benefits
                      paid
                  
                  
                  **(16,144**
                  **)**
                  
                  (13,874
                  )Curtailment
                      gain
                  
                  
                  **(2,785**
                  **)**
                  
                  -Foreign
                      exchange rate changes
                  
                  
                  **(1,139**
                  **)**
                  
                  6,450Benefit
                      obligations, end of year
                  
                  **$**
                  **612,672**
                  
                  $
                  543,906**Change
                      in plan assets**Fair
                      value of plan assets, beginning of year
                  
                  **$**
                  **440,222**
                  
                  $
                  316,674Schreiner
                      acquisition*(Note 7)*
                  
                  
                  **-**
                  
                  
                  56,622Actual
                      return on plan assets
                  
                  
                  **29,936**
                  
                  
                  45,507Employer
                      contributions
                  
                  
                  **32,898**
                  
                  
                  26,426Participant
                      contributions
                  
                  
                  **3,595**
                  
                  
                  2,899Benefits
                      paid
                  
                  
                  **(15,309**
                  **)**
                  
                  (13,084
                  )Foreign
                      exchange rate changes
                  
                  
                  **(841**
                  **)**
                  
                  5,178Fair
                      value of plan assets, end of year
                  
                  **$**
                  **490,501**
                  
                  $
                  440,222**Funded
                      status**
                  
                  **$**
                  **(122,171**
                  **)**
                  $
                  (103,684
                  )Unrecognized
                      net actuarial and experience losses
                  
                  
                  **189,104**
                  
                  
                  147,099Unrecognized
                      prior service costs
                  
                  
                  **(1,084**
                  **)**
                  
                  4,697Unrecognized
                      transition amounts
                  
                  
                  **762**
                  
                  
                  1,030Pension
                      guarantee deposits
                  
                  
                  **2,701**
                  
                  
                  2,696Total
                      recognized net pension asset
                  
                  **$**
                  **69,312**
                  
                  $
                  51,838
  152
 CHC
                Helicopter
                Corporation
 Notes
                to the
                Consolidated Financial Statements
 April 30,
                2005, 2004 and 2003
 (Tabular
                amounts in
                thousands unless otherwise noted, except per share amounts)
 The
            tables below
            detail as at April 30, 2005 by funded and unfunded plans, the
            funded status
            and net amount recognized on the Company’s balance sheet as prepaid pension
            costs reported in other assets of $104.8 million (Note 13 )
            (2004 -
            $90.2 million) and accrued benefit obligations included in other
            liabilities of $35.5 million (Note 18 )
            (2004 -
            $38.3 million).
  As
                      at
                      April 30, 2005Funded
                      plans
                  
                  Unfunded
                  
                  
                  
                  Other
                      assets
                  
                  Other
                      liabilitiesSurplus
                  
                  Deficit
                  
                  Plans
                  
                  Total
                  
                  *(Note
                      13)*
                  
                  *(Note
                      18)*Benefit
                      obligations
                  
                  **$**
                  **205,943**
                  
                  **$**
                  **360,254**
                  
                  **$**
                  **46,475**
                  
                  **$**
                  **612,672**
                  
                  **$**
                  **495,615**
                  
                  **$**
                  **117,057**Fair
                      value of
                      plan assets
                  
                  
                  **214,614**
                  
                  
                  **275,887**
                  
                  
                  **-**
                  
                  
                  **490,501**
                  
                  
                  **427,087**
                  
                  
                  **63,414**Funded
                      status
                  
                  
                  **8,671**
                  
                  
                  **(84,367**
                  **)**
                  
                  **(46,475**
                  **)**
                  
                  **(122,171**
                  **)**
                  
                  **(68,528**
                  **)**
                  
                  **(53,643**
                  **)**Unrecognized
                      net actuarial and experience losses
                  
                  
                  **53,217**
                  
                  
                  **120,921**
                  
                  
                  **14,966**
                  
                  
                  **189,104**
                  
                  
                  **169,392**
                  
                  
                  **19,712**Unrecognized
                      prior service costs
                  
                  
                  **1,251**
                  
                  
                  **(7,590**
                  **)**
                  
                  **5,255**
                  
                  
                  **(1,084**
                  **)**
                  
                  **1,251**
                  
                  
                  **(2,335**
                  **)**Unrecognized
                      transition amounts
                  
                  
                  **-**
                  
                  
                  **-**
                  
                  
                  **762**
                  
                  
                  **762**
                  
                  
                  **-**
                  
                  
                  **762**Pension
                      guarantee deposits
                  
                  
                  **2,296**
                  
                  
                  **405**
                  
                  
                  **-**
                  
                  
                  **2,701**
                  
                  
                  **2,701**
                  
                  
                  -**$**
                  **65,435**
                  
                  **$**
                  **29,369**
                  
                  **$**
                  **(25,492**
                  **)**
                  **$**
                  **69,312**
                  
                  **$**
                  **104,816**
                  
                  **$**
                  **(35,504**
                  **)**
 
 As
                      at
                      April 30, 2004Funded
                      plans
                  
                  Unfunded
                  
                  
                  
                  Other
                      assets
                  
                  Other
                      liabilitiesSurplus
                  
                  Deficit
                  
                  Plans
                  
                  Total
                  
                  *(Note
                      13)*
                  
                  *(Note
                      18)*Benefit
                      obligations
                  
                  $
                  188,150
                  
                  $
                  319,117
                  
                  $
                  36,639
                  
                  $
                  543,906
                  
                  
                  423,697
                  
                  
                  120,209Fair
                      value of
                      plan assets
                  
                  
                  190,461
                  
                  
                  249,761
                  
                  
                  -
                  
                  
                  440,222
                  
                  
                  376,274
                  
                  
                  63,948Funded
                      status
                  
                  
                  2,311
                  
                  
                  (69,356
                  )
                  
                  (36,639
                  )
                  
                  (103,684
                  )
                  
                  (47,423
                  )
                  
                  (56,261
                  )Unrecognized
                      net actuarial and experience losses
                  
                  
                  45,865
                  
                  
                  89,457
                  
                  
                  11,777
                  
                  
                  147,099
                  
                  
                  133,272
                  
                  
                  13,827Unrecognized
                      prior service costs
                  
                  
                  1,586
                  
                  
                  -
                  
                  
                  3,111
                  
                  
                  4,697
                  
                  
                  1,586
                  
                  
                  3,111Unrecognized
                      transition amounts
                  
                  
                  22
                  
                  
                  -
                  
                  
                  1,008
                  
                  
                  1,030
                  
                  
                  22
                  
                  
                  1,008Pension
                      guarantee deposits
                  
                  
                  2,292
                  
                  
                  404
                  
                  
                  -
                  
                  
                  2,696
                  
                  
                  2,696
                  
                  
                  -$
                  52,076
                  
                  $
                  20,505
                  
                  $
                  (20,743
                  )
                  $
                  51,838
                  
                  $
                  90,153
                  
                  $
                  (38,315
                  )
  The
            significant
            weighted average actuarial assumptions adopted in measuring the Company’s
            defined benefit pension plan obligations as at April 30 are as
            follows:
  **2005**
                  
                  2004Discount
                      rate
                  
                  
                  **5.15**
                  **%**
                  
                  5.64
                  %Rate
                      of compensation increase
                  
                  
                  **3.38**
                  **%**
                  
                  3.38
                  %
  The
            significant
            weighted average actuarial assumptions adopted in measuring the Company’s net
            defined benefit pension plan expense during the year are as
            follows:
  **2005**
                  
                  2004
                  
                  2003Discount
                      rate
                  
                  
                  **5.74**
                  **%**
                  
                  5.86
                  %
                  
                  6.59
                  %Expected
                      long-term rate of return on plan assets
                  
                  
                  **6.70**
                  **%**
                  
                  6.72
                  %
                  
                  7.27
                  %
  153
 CHC
                Helicopter
                Corporation
 Notes
                to the
                Consolidated Financial Statements
 April 30,
                2005, 2004 and 2003
 (Tabular
                amounts in
                thousands unless otherwise noted, except per share amounts)
 The
            Company’s net
            defined benefit pension plan expense, which excludes the impact of the
            curtailment gain, as noted above, is as follows:
  **2005**
                  
                  2004
                  
                  2003Current
                      service cost
                  
                  **$**
                  **19,508**
                  
                  $
                  17,050
                  
                  $
                  13,692Interest
                      cost
                  
                  
                  **29,015**
                  
                  
                  24,233
                  
                  
                  24,791Actual
                      return on plan assets
                  
                  
                  **(29,936**
                  **)**
                  
                  (45,507
                  )
                  
                  28,144Excess
                      of actual return over expected return
                  
                  
                  **347**
                  
                  
                  23,450
                  
                  
                  (53,089
                  )Amortization
                      of net actuarial and experience losses
                  
                  
                  **7,985**
                  
                  
                  9,773
                  
                  
                  4,550Amortization
                      of prior service costs
                  
                  
                  **(376**
                  **)**
                  
                  603
                  
                  
                  638Amortization
                      of transition amounts
                  
                  
                  **268**
                  
                  
                  395
                  
                  
                  413Participant
                      contributions
                  
                  
                  **(3,595**
                  **)**
                  
                  (2,899
                  )
                  
                  (3,085
                  )Net
                      defined benefit pension plan expense
                  
                  **$**
                  **23,216**
                  
                  $
                  27,098
                  
                  $
                  16,054
  Benefits
            expected
            to be paid under the defined benefit pension plans in each of the next
            five
            fiscal years and in aggregate for the five fiscal years thereafter is
            as
            follows:
 2006
                  
                  $
                  14,1232007
                  
                  
                  16,1002008
                  
                  
                  18,3522009
                  
                  
                  20,2522010
                  
                  
                  22,4292011-2015
                  
                  
                  155,076
  Employer
            contributions expected to be paid to the defined benefit pension plans
            during
            fiscal 2006 as required by funding regulations and law are
            $33.6 million.
  **33.**
                  **RELATED
                      PARTY TRANSACTIONS**
  (a)
                  In
                      the course
                      of its regular business activities, the Company enters into
                      routine
                      transactions with companies subject to significant influence
                      and companies
                      affiliated with the controlling shareholder. These transactions
                      are
                      measured at the amounts exchanged, which is the amount of consideration
                      determined and agreed to by the related parties. Transactions
                      with related
                      parties are summarized as follows:
  **Year
                      Ended April 30,****2005**
                  
                  2004
                  
                  2003Revenues*(i)*
                  
                  **$**
                  **43,518**
                  
                  $
                  10,745
                  
                  $
                  -Direct
                      costs
                  
                  
                  **1,298**
                  
                  
                  1,972
                  
                  
                  21,425Capital
                      asset
                      additions
                  
                  
                  **8,160**
                  
                  
                  2,962
                  
                  
                  -
 
  **As
                      at
                      April 30,****2005**
                  
                  2004Net
                      amounts
                      receivable and payable in respect of such revenues, expenses
                      and
                      additions
                  
                  **$**
                  **15,044**
                  
                  $
                  10,808
  (i)
                  Revenue
                      increases relate to revenues from a company owned by Schreiner,
                      which is
                      subject to significant influence. Therefore, the fiscal 2004
                      amount only
                      includes revenues from the February 16, 2004 acquisition
                      of
                      Schreiner.
  154
 CHC
                Helicopter
                Corporation
 Notes
                to the
                Consolidated Financial Statements
 April 30,
                2005, 2004 and 2003
 (Tabular
                amounts in
                thousands unless otherwise noted, except per share amounts)
 (b)
                    During
                        fiscal
                        2000, in connection with securing tender credit facilities,
                        the Company
                        received an unsecured, subordinated, convertible 12% loan
                        from an
                        affiliate of the controlling shareholder in the amount of
                        $5.0 million. This loan is subordinated to the Company’s senior
                        credit facilities and its senior subordinated notes
                        (Note15).
                        The loan
                        is convertible into Class A subordinate voting shares
                        at
                        $3.63 per share. The estimated value of the loan proceeds
                        attributable to the conversion feature of $1.0 million
                        was allocated
                        to contributed surplus. The equivalent reduction in the carrying
                        value of
                        the loan is amortized to earnings over the term of the loan.
                        Interest
                        expense of $0.7 million (2004 - $0.7 million;
                        2003 - $0.7
                        million), including amortization of the above noted discount,
                        was recorded
                        on the loan during the fiscal year ended April 30,
                        2005.
  **34.**
                  **RECONCILIATION
                      TO ACCOUNTING PRINCIPLES GENERALLY ACCEPTED IN THE UNITED
                      STATES**
  The
            Company’s
            consolidated financial statements have been prepared in accordance with
            Canadian
            GAAP. In certain respects, Canadian GAAP differs from U.S. GAAP. The
            effects of
            significant differences are described below.
  (a)
                  Consolidated
                      statements of earnings and comprehensive
                      earnings
  **Year
                      Ended April 30,***(Restated
                      Notes 4 and 34(a)(iv))***2005**
                  
                  2004
                  
                  2003**Net
                      earnings according to Canadian GAAP**
                  
                  **$**
                  **62,559**
                  
                  $
                  63,676
                  
                  $
                  65,465Pre-operating
                      expenses***(i)*
                  
                  
                  **(3,515**
                  **)**
                  
                  1,473
                  
                  
                  12,725Tax
                      impact of
                      pre-operating expenses
                  
                  
                  **1,168**
                  
                  
                  (486
                  )
                  
                  (2,761
                  )Unrealized
                      loss on ineffective hedges*(ii)*
                  
                  
                  **(4,796**
                  **)**
                  
                  (23,366
                  )
                  
                  16,748Tax
                      impact of
                      unrealized loss on ineffective hedges
                  
                  
                  **778**
                  
                  
                  4,704
                  
                  
                  (2,319
                  )Internal
                      use software expenses*(iii)*
                  
                  
                  **(731**
                  **)**
                  
                  (103
                  )
                  
                  (766
                  )Tax
                      impact of
                      internal use software expenses
                  
                  
                  **243**
                  
                  
                  34
                  
                  
                  265Amortization
                      of guarantees recognized***(iv)*
                  
                  
                  **(827**
                  **)**
                  
                  (101
                  )
                  
                  -Tax
                      impact of
                      amortization of guarantees recognized
                  
                  
                  **225**
                  
                  
                  30
                  
                  
                  -Other,
                      net of tax
                  
                  
                  **40**
                  
                  
                  (40
                  )
                  
                  (2,743
                  )**Net
                      earnings according to U.S. GAAP**
                  
                  
                  **55,144**
                  
                  
                  45,821
                  
                  
                  86,614Other
                      comprehensive earnings, net of income taxForeign
                      currency translation adjustment*(v)*
                  
                  
                  **(7,075**
                  **)**
                  
                  6,567
                  
                  
                  16,230Minimum
                      pension liability adjustment*(vi)*
                  
                  
                  **(78,117**
                  **)**
                  
                  39,178
                  
                  
                  (43,846
                  )Tax
                      impact of
                      minimum pension liability adjustment
                  
                  
                  **23,412**
                  
                  
                  (11,606
                  )
                  
                  15,810Cash
                      flow
                      hedge adjustment*(vii)*
                  
                  
                  **2,565**
                  
                  
                  -
                  
                  
                  (6,964
                  )Tax
                      impact of
                      cash flow hedge adjustment
                  
                  
                  **(1,052**
                  **)**
                  
                  -
                  
                  
                  2,732Other,
                      net of
                      tax
                  
                  
                  **1,387**
                  
                  
                  -
                  
                  
                  -**Comprehensive
                      earnings according to U.S. GAAP**
                  
                  **$**
                  **(3,736**
                  **)**
                  $
                  79,960
                  
                  $
                  70,576**Net
                      earnings per share according to U.S. GAAP**Basic
                  
                  **$**
                  **1.31**
                  
                  $
                  1.11
                  
                  $
                  2.09Diluted
                  
                  **$**
                  **1.21**
                  
                  $
                  1.02
                  
                  $
                  1.93
  (i)
                  Pre-operating
                      expenses
  Under
            Canadian
            GAAP, pre-operating expenses related to the operations of new businesses
            and
            customer contracts meeting certain criteria are deferred and amortized
            over the
            expected period of benefit, not exceeding five years. Under U.S. GAAP,
            these
            pre-operating expenses are charged to earnings as incurred.
  155
 CHC
                Helicopter
                Corporation
 Notes
                to the
                Consolidated Financial Statements
 April 30,
                2005, 2004 and 2003
 (Tabular
                amounts in
                thousands unless otherwise noted, except per share amounts)
 (ii)
                    Unrealized
                        loss on ineffective hedges
 According
            to U.S.
            GAAP, all derivatives are required to be recorded on the balance sheet
            at fair
            value with the changes in fair value recognized in earnings. For derivatives
            designated within fair value hedge relationships, changes in the fair
            value are
            required to be recognized in earnings together with an equal or lesser
            amount of
            changes in the fair value of the hedged item attributable to the hedged
            risk.
  (iii)
                  Internal
                      use
                      software expenses
  Certain
            costs
            incurred to acquire or develop internal use software, while qualifying
            for
            capitalization under Canadian GAAP, are required to be expensed as a
            period cost
            under U.S. GAAP.
  (iv)
                  Amortization
                      of guarantees recognized
  The
            Company has
            adopted the provisions of Financial Interpretation 45, Guarantor’s
            Accounting and Disclosure Requirements for Guarantees, including Indirect
            Guarantees of Indebtedness of Others (“FIN 45”), which requires the Company
            to recognize a liability for the fair value of the obligation undertaken
            in
            issuing the guarantee, regardless of whether or not the liability is
            probable.
            FIN 45 is applicable to guarantees entered into after December 31,
            2002. During fiscal 2005, the Company revised its method of estimating
            its
            liabilities under the provisions of FIN 45 and has restated its
            2004 U.S.
            GAAP reconciliation to reflect this change retroactively.
  (v)
                  Foreign
                      currency translation adjustment
  Under
            Canadian
            GAAP, foreign currency translation adjustments related to self-sustaining
            subsidiaries arising on consolidation are included as a separate component
            of
            shareholders’ equity until realized. Under U.S. GAAP, the related translation
            adjustments are included in other comprehensive earnings. Under U.S.
            GAAP, the
            foreign currency translation gain or loss on the revaluation of foreign
            currency
            denominated debt designated and qualifying as effective hedges of the
            Company’s
            net investments in its U.S. dollar, pound sterling, Norwegian kroner
            and euro
            denominated self-sustaining foreign operations (Note 22 )
            is included in
            other comprehensive earnings, whereas under Canadian GAAP it is included
            as a
            separate component of shareholders’ equity until realized.
  (vi)
                  Minimum
                      pension liability adjustment
  Under
            U.S. GAAP, if
            the accrued benefit obligation related to defined benefit pension plans
            exceeds
            the fair value of plan assets, an additional minimum liability shall
            be
            recognized with an equal amount to be recognized as an intangible asset,
            provided that the intangible asset recognized shall not exceed the amount
            of
            unrecognized prior service cost. Any excess of the additional minimum
            liability
            over the unrecognized prior service cost is recorded as a separate component
            of
            other comprehensive earnings net of income taxes as a minimum pension
            liability
            adjustment.
  (vii)
                  Cash
                      flow
                      hedge adjustment
  Under
            U.S. GAAP,
            changes in the fair value of qualifying effective cash flow hedges are
            recorded
            in other comprehensive earnings net of income taxes. These amounts are
            recognized in net earnings as the hedged transactions occur.
  156
 CHC
                Helicopter
                Corporation
 Notes
                to the
                Consolidated Financial Statements
 April 30,
                2005, 2004 and 2003
 (Tabular
                amounts in
                thousands unless otherwise noted, except per share amounts)
 (b)
                    Consolidated
                        balance sheets
  **April 30,
                      2005**
                  
                  *(Restated
                      Notes 4 and 34(a)(iv))*
                    April
                      30,
                      2004**Canadian
                      GAAP**
                  
                  **U.S.
                      GAAP**
                  
                  Canadian
                      GAAP
                  
                  U.S.
                      GAAPCurrent
                      future income tax assets***(i)*
                  
                  **$**
                  **23,802**
                  
                  **$**
                  **21,423**
                  
                  $
                  12,816
                  
                  $
                  12,816Other
                      current assets*(ii)*
                  
                  
                  **505,362**
                  
                  
                  **504,743**
                  
                  
                  489,702
                  
                  
                  490,837Property
                      and equipment, net*(iii)*
                  
                  
                  **851,210**
                  
                  
                  **852,194**
                  
                  
                  734,405
                  
                  
                  736,177Long-term
                      future income tax assets*(iv)*
                  
                  
                  **50,184**
                  
                  
                  **75,336**
                  
                  
                  44,312
                  
                  
                  43,742Other
                      assets*(v)*
                  
                  
                  **312,677**
                  
                  
                  **288,647**
                  
                  
                  253,648
                  
                  
                  252,202**$**
                  **1,743,235**
                  
                  **$**
                  **1,742,343**
                  
                  $
                  1,534,883
                  
                  $
                  1,535,774Current
                      future income tax liabilities*(vi)*
                  
                  **$**
                  **705**
                  
                  **$**
                  **730**
                  
                  $
                  2,212
                  
                  $
                  2,212Other
                      current liabilities
                  
                  
                  **294,536**
                  
                  
                  **294,538**
                  
                  
                  256,692
                  
                  
                  256,692Long-term
                      debt*(vii)*
                  
                  
                  **97,543**
                  
                  
                  **97,992**
                  
                  
                  133,305
                  
                  
                  134,256Senior
                      subordinated notes
                  
                  
                  **502,760**
                  
                  
                  **502,760**
                  
                  
                  342,675
                  
                  
                  342,675Other
                      liabilities*(viii)*
                  
                  
                  **146,000**
                  
                  
                  **218,175**
                  
                  
                  159,099
                  
                  
                  170,826Long-term
                      future income tax liabilities*(ix)*
                  
                  
                  **195,692**
                  
                  
                  **186,300**
                  
                  
                  179,188
                  
                  
                  171,765Shareholders’
                      equity
                  
                  
                  **505,999**
                  
                  
                  **-**
                  
                  
                  461,712
                  
                  
                  -Class
                      A
                      subordinate voting shares
                  
                  
                  **-**
                  
                  
                  **222,817**
                  
                  
                  -
                  
                  
                  221,622Class
                      A
                      subordinate voting employee share purchase loans
                  
                  
                  **-**
                  
                  
                  **(1,689**
                  **)**
                  
                  -
                  
                  
                  (1,823
                  )Class
                      B
                      multiple voting shares
                  
                  
                  **-**
                  
                  
                  **18,431**
                  
                  
                  -
                  
                  
                  18,719Contributed
                      surplus
                  
                  
                  **-**
                  
                  
                  **2,340**
                  
                  
                  -
                  
                  
                  2,340Accumulated
                      other comprehensive earnings*(x)*
                  
                  
                  **-**
                  
                  
                  **(69,048**
                  **)**
                  
                  -
                  
                  
                  (10,168
                  )Retained
                      earnings
                  
                  
                  **-**
                  
                  
                  **268,997**
                  
                  
                  -
                  
                  
                  226,658**$**
                  **1,743,235**
                  
                  **$**
                  **1,742,343**
                  
                  $
                  1,534,883
                  
                  $
                  1,535,774
  (i)
                  Current
                      future income tax assets
  Current
            future
            income tax assets have been adjusted to reflect the reversal of Canadian
            GAAP
            treatment of the hedge relationships that do not qualify for hedge accounting
            treatment under U.S. GAAP as described in Note 34 (a) (ii) .
  (ii)
                  Other
                      current
                      assets
  Other
            current
            assets have been adjusted to reflect the U.S. GAAP treatment of the change
            in
            the fair value of derivatives described in Notes 34 (a) (ii) and (vii) that mature within
            the next 12 months as well as for the current portion of prepaid
            rent
            related to the recording of asset value guarantees described in
            Note 34 (a) (iv) .
  (iii)
                  Property
                      and
                      equipment, net
  Property
            and
            equipment have been adjusted for the effect of the adjustment for U.S.
            GAAP
            purposes of expensing certain software development costs as described
            in
            Note 34 (a) (iii) and for
            differences between Canadian GAAP and U.S. GAAP treatment of certain
            property
            and equipment acquisitions.
  (iv)
                  Long-term
                      future income tax assets
  Long-term
            future
            income tax assets have been adjusted for the U.S. GAAP treatment of
            pre-operating expenses, unrealized loss on hedges that are ineffective
            under
            U.S. GAAP, internal use software expenses, amortization of guarantees
            recognized, minimum pension liability adjustment, and hedge relationships
            that
            are ineffective under U.S. GAAP as described in Notes 34 (a) (i) , (ii) , (iii) , (iv) , (vi) and (vii) ,
            respectively.
  157
 CHC
                Helicopter
                Corporation
 Notes
                to the
                Consolidated Financial Statements
 April 30,
                2005, 2004 and 2003
 (Tabular
                amounts in
                thousands unless otherwise noted, except per share amounts)
 (v)
                  Other
                      assets
  Other
            assets have
            been adjusted to reflect the U.S. GAAP treatment of pre-operating expenses,
            asset value guarantees, minimum pension liability and the fair value
            of
            derivatives maturing in fiscal 2007 and 2008 as described in
            Notes 34 (a) (i) , (iv) , (vi) and (vii) ,
            respectively.
  (vi)
                  Current
                      future income tax liabilities
  Current
            future
            income tax liabilities have been adjusted for the treatment of hedge
            relationships that are ineffective under U.S. GAAP as described in
            Note 34 (a) (ii) and for the
            difference in accounting treatment of the Company’s cash flow hedges as
            discussed in Note 34 (a) (vii) .
  (vii)
                  Long-term
                      debt
  Long-term
            debt has
            been adjusted to reflect the U.S. GAAP treatment of the loan proceeds
            attributable to the conversion feature on the 12.0% unsecured, subordinated,
            convertible note due to an affiliate of the controlling shareholder
            (Note 15(a) ).
            Under U.S. GAAP
            all loan proceeds should be recorded as a liability on the balance
            sheet.
  (viii)
                  Other
                      liabilities
  Other
            liabilities
            have been adjusted for the U.S. GAAP treatment of asset value guarantees,
            minimum pension liability, and the fair value of derivatives maturing
            in fiscal
            2007 and 2008 as described in Notes 34 (a) (iv) , (vi) and (vii) ,
            respectively.
  (ix)
                  Long-term
                      future income tax liabilities
  Long-term
            future
            income tax liabilities have been adjusted for the treatment of hedge
            relationships that are ineffective under U.S. GAAP as described in
            Notes 34 (a) (ii) ,
            and for U.S. GAAP
            treatment of the convertible note described in Note 34 (b) (vii) .
  (x)
                  Accumulated
                      other comprehensive earnings
  Accumulated
            other
            comprehensive earnings have been adjusted to reflect the U.S. GAAP treatment
            of
            foreign currency translation, minimum pension liability and effective
            foreign
            currency cash flow hedges, all of which are included in other comprehensive
            earnings as described in Notes 34 (a) (v) , (vi) and (vii) ,
            respectively.
  (c)
                  Other
                      required disclosures
  **2005**
                  
                  *(Restated
                      Note 4)*
                    2004Receivables
                      - trade
                  
                  **$**
                  **175,803**
                  
                  $
                  170,184Allowance
                      for
                      doubtful accounts
                  
                  
                  **(7,501**
                  **)**
                  
                  (9,117
                  )Net
                      trade receivables
                  
                  **$**
                  **168,302**
                  
                  $
                  161,067Payables
                      - trade
                  
                  **$**
                  **143,717**
                  
                  $
                  101,965Accruals
                  
                  
                  **84,998**
                  
                  
                  96,052Interest
                      accrual
                  
                  
                  **13,227**
                  
                  
                  754Total
                      payables and accruals
                  
                  **$**
                  **241,942**
                  
                  $
                  198,771
 
 **2005**
                  
                  2004
                  
                  2003Cash
                      flow from operations:Canadian
                      GAAP
                  
                  **$**
                  **138,200**
                  
                  $
                  90,607
                  
                  $
                  114,260Internal
                      use
                      software expenses (Note 34(a)(iii))
                  
                  
                  **(731**
                  **)**
                  
                  (103
                  )
                  
                  (766
                  )Other
                  
                  
                  **-**
                  
                  
                  -
                  
                  
                  312Cash
                      flow from operations - U.S. GAAP
                  
                  **$**
                  **137,469**
                  
                  $
                  90,504
                  
                  $
                  113,806
  158
 CHC
                Helicopter
                Corporation
 Notes
                to the
                Consolidated Financial Statements
 April 30,
                2005, 2004 and 2003
 (Tabular
                amounts in
                thousands unless otherwise noted, except per share amounts)
 **35.**
                    **SUBSEQUENT
                        EVENTS**
 On
            July 26,
            2005, the Company signed a Letter of Intent for the sale of its 38%
            shareholdings in Inaer, which operates light and medium aircraft primarily
            in
            the Spanish helicopter market. The transaction is subject to several
            conditions
            including satisfactory due diligence and regulatory approval, and is
            expected to
            close in October 2005. Proceeds are estimated at $45.0 million.
            The
            investment in Inaer is held at $20.8 million at April 30,
            2005.
            Professional fees and other direct costs associated with realizing this
            potential sale are not yet determinable and will reduce any gain on sale
            arising
            from this transaction.
  On
            September 9, 2005, the Company sold its remaining interest in
            CHL and
            realized net proceeds of approximately $48 million. The Company
            will record
            a combined pre-tax gain and dividend income of approximately $20 million
            on
            this divestiture. The final gain on sale is subject to adjustments of
            closing
            costs and expenses and equity accruals from July 31, 2005 to the
            date of
            sale. Equity earnings of CHL was $2.3 million for the current fiscal
            year and
            the carrying value of the investments in CHL was $26.6 million at April
            30,
            2005.
  **36.**
                  **SUPPLEMENTAL
                      GUARANTOR FINANCIAL
                      INFORMATION**
  Certain
            of our
            subsidiaries (collectively the “Guarantors”) have guaranteed our obligations to
            pay principal and interest with respect to the senior subordinated notes.
            Separate financial statements of the Guarantors are not presented as
            we believe
            the summarized financial information which follows is more meaningful
            in
            understanding the financial position of the Guarantors. There are no
            significant
            restrictions on the ability of the Guarantors to make distributions to
            us.
  We
            account for our
            investments in subsidiaries by the cost method for internal financial
            statement
            purposes and by the equity method in the following summarized financial
            information. U.S. GAAP was employed in the preparation of the summarized
            financial information.
  159
 CHC
                Helicopter
                Corporation
 Notes
                to the
                Consolidated Financial Statements
 April 30,
                2005, 2004 and 2003
 (Tabular
                amounts in
                thousands unless otherwise noted, except per share amounts)
 **2005****As
                      at
                      April 30**
                  
                  **CHC
                      Helicopter**
                    **Corporation**
                  
                  **Guarantor**
                    **subsidiaries**
                  
                  **Non-Guarantor**
                    **subsidiaries**
                  
                  **Eliminations**
                  
                  **Consolidated****Assets**Current
                      assetsCash
                      and cash
                      equivalents
                  
                  $
                  96,691
                  
                  $
                  (58,856
                  )
                  $
                  13,556
                  
                  $
                  -
                  
                  $
                  51,391Receivables
                  
                  
                  63,422
                  
                  
                  650,760
                  
                  
                  203,139
                  
                  
                  (702,361
                  )
                  
                  214,960Inventory
                  
                  
                  -
                  
                  
                  59,283
                  
                  
                  157,230
                  
                  
                  -
                  
                  
                  216,513Other
                      current
                      assets
                  
                  
                  3,529
                  
                  
                  18,447
                  
                  
                  9,537
                  
                  
                  (868
                  )
                  
                  30,645Assets
                      of
                      discontinued operations
                  
                  
                  -
                  
                  
                  -
                  
                  
                  12,657
                  
                  
                  -
                  
                  
                  12,657163,642
                  
                  
                  669,634
                  
                  
                  396,119
                  
                  
                  (703,229
                  )
                  
                  526,166Property
                      and
                      equipment, net
                  
                  
                  8
                  
                  
                  590,352
                  
                  
                  273,871
                  
                  
                  (12,037
                  )
                  
                  852,194Investments
                  
                  
                  582,204
                  
                  
                  252,695
                  
                  
                  98,424
                  
                  
                  (874,517
                  )
                  
                  58,806Long-term
                      intercompany
                  
                  
                  409,371
                  
                  
                  -
                  
                  
                  73,639
                  
                  
                  (483,010
                  )
                  
                  -Other
                      long-term assets
                  
                  
                  39,105
                  
                  
                  177,619
                  
                  
                  116,166
                  
                  
                  (31,208
                  )
                  
                  301,682Assets
                      of
                      discontinued operations
                  
                  
                  -
                  
                  
                  -
                  
                  
                  3,495
                  
                  
                  -
                  
                  
                  3,495$
                  1,194,330
                  
                  $
                  1,690,300
                  
                  $
                  961,714
                  
                  $
                  (2,104,001
                  )
                  $
                  1,742,343**Liabilities
                      and shareholders' equity**Current
                      liabilitiesPayables
                      and
                      accruals
                  
                  $
                  51,540
                  
                  $
                  642,624
                  
                  $
                  240,010
                  
                  $
                  (692,232
                  )
                  
                  241,942Other
                      current
                      liabilities
                  
                  
                  24,625
                  
                  
                  (5,543
                  )
                  
                  5,302
                  
                  
                  26,789
                  
                  
                  51,173Liabilities
                      of discontinued operations
                  
                  
                  -
                  
                  
                  -
                  
                  
                  2,153
                  
                  
                  -
                  
                  
                  2,15376,165
                  
                  
                  637,081
                  
                  
                  247,465
                  
                  
                  (665,443
                  )
                  
                  295,268Long-term
                      debt
                  
                  
                  92,917
                  
                  
                  5,742
                  
                  
                  405
                  
                  
                  (1,072
                  )
                  
                  97,992Senior
                      subordinated notes
                  
                  
                  502,760
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  502,760Long-term
                      intercompany
                  
                  
                  -
                  
                  
                  198,428
                  
                  
                  157,269
                  
                  
                  (355,697
                  )
                  
                  -Other
                      liabilities
                  
                  
                  26,528
                  
                  
                  129,486
                  
                  
                  77,738
                  
                  
                  (19,070
                  )
                  
                  214,682Future
                      income
                      tax liabilities
                  
                  
                  4,561
                  
                  
                  94,147
                  
                  
                  86,957
                  
                  
                  635
                  
                  
                  186,300Liabilities
                      of discontinued operations
                  
                  
                  -
                  
                  
                  -
                  
                  
                  3,493
                  
                  
                  -
                  
                  
                  3,493Shareholders'
                      equityCapital
                      stock
                  
                  
                  239,559
                  
                  
                  97,058
                  
                  
                  48,073
                  
                  
                  (145,131
                  )
                  
                  239,559Contributed
                      surplus
                  
                  
                  2,340
                  
                  
                  35,089
                  
                  
                  53,382
                  
                  
                  (88,471
                  )
                  
                  2,340Accumulated
                      other comprehensive arnings
                  
                  
                  (19,497
                  )
                  
                  (124,202
                  )
                  
                  59,812
                  
                  
                  14,839
                  
                  
                  (69,048
                  )Retained
                      earnings
                  
                  
                  268,997
                  
                  
                  617,471
                  
                  
                  227,120
                  
                  
                  (844,591
                  )
                  
                  268,997$
                  1,194,330
                  
                  $
                  1,690,300
                  
                  $
                  961,714
                  
                  $
                  (2,104,001
                  )
                  $
                  1,742,343
  160
 CHC
                Helicopter
                Corporation
 Notes
                to the
                Consolidated Financial Statements
 April 30,
                2005, 2004 and 2003
 (Tabular
                amounts in
                thousands unless otherwise noted, except per share amounts)
 **2005****For
                      the year ended April 30**
                  
                  **CHC
                      Helicopter**
                    **Corporation**
                  
                  **Guarantor**
                    **subsidiaries**
                  
                  **Non-Guarantor**
                    **subsidiaries**
                  
                  **Eliminations**
                  
                  **Consolidated****Revenue**
                  
                  $
                  -
                  
                  $
                  631,985
                  
                  $
                  378,353
                  
                  $
                  (106,994
                  )
                  $
                  903,344Direct
                      costs
                  
                  
                  471
                  
                  
                  (496,535
                  )
                  
                  (307,485
                  )
                  
                  96,309
                  
                  
                  (707,240
                  )General
                      and
                      administration costs
                  
                  
                  -
                  
                  
                  (25,803
                  )
                  
                  -
                  
                  
                  -
                  
                  
                  (25,803
                  )Amortization
                  
                  
                  123
                  
                  
                  (21,917
                  )
                  
                  (8,671
                  )
                  
                  -
                  
                  
                  (30,465
                  )Restructuring
                      costs
                  
                  
                  -
                  
                  
                  (15,332
                  )
                  
                  (2,280
                  )
                  
                  -
                  
                  
                  (17,612
                  )(Loss)
                      gain
                      on disposals of assets
                  
                  
                  -
                  
                  
                  (247
                  )
                  
                  4,101
                  
                  
                  251
                  
                  
                  4,105**Operating
                      income**
                  
                  
                  594
                  
                  
                  72,151
                  
                  
                  64,018
                  
                  
                  (10,434
                  )
                  
                  126,329Debt
                      settlement costs
                  
                  
                  (1,043
                  )
                  
                  (951
                  )
                  
                  -
                  
                  
                  -
                  
                  
                  (1,994
                  )Financing
                      charges
                  
                  
                  (9,903
                  )
                  
                  (13,120
                  )
                  
                  (18,631
                  )
                  
                  (262
                  )
                  
                  (41,916
                  )**Earnings
                      from continuing operations before undernoted**
                  
                  
                  (10,352
                  )
                  
                  58,080
                  
                  
                  45,387
                  
                  
                  (10,696
                  )
                  
                  82,419Non-controlling
                      interest
                  
                  
                  -
                  
                  
                  -
                  
                  
                  (288
                  )
                  
                  -
                  
                  
                  (288
                  )Equity
                      in
                      earnings of associated companies
                  
                  
                  63,116
                  
                  
                  31,262
                  
                  
                  -
                  
                  
                  (88,897
                  )
                  
                  5,481Intercompany
                      charges
                  
                  
                  -
                  
                  
                  9,451
                  
                  
                  (9,451
                  )
                  
                  -
                  
                  
                  -Income
                      taxes
                  
                  
                  2,380
                  
                  
                  (13,522
                  )
                  
                  (9,869
                  )
                  
                  (438
                  )
                  
                  (21,449
                  )**Net
                      earnings from continuing perations**
                  
                  
                  55,144
                  
                  
                  85,271
                  
                  
                  25,779
                  
                  
                  (100,031
                  )
                  
                  66,163**Net
                      loss from discontinued perations**
                  
                  
                  -
                  
                  
                  10,299
                  
                  
                  (21,318
                  )
                  
                  -
                  
                  
                  (11,019
                  )**Net
                      earnings**
                  
                  
                  55,144
                  
                  
                  95,570
                  
                  
                  4,461
                  
                  
                  (100,031
                  )
                  
                  55,144Retained
                      earnings, beginning of year
                  
                  
                  226,658
                  
                  
                  521,901
                  
                  
                  222,659
                  
                  
                  (744,560
                  )
                  
                  226,658Dividends
                  
                  
                  (12,805
                  )
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  (12,805
                  )**Retained
                      earnings, end of year**
                  
                  $
                  268,997
                  
                  $
                  617,471
                  
                  $
                  227,120
                  
                  $
                  (844,591
                  )
                  $
                  268,997
  161
 
 CHC
                Helicopter
                Corporation
 Notes
                to the
                Consolidated Financial Statements
 April 30,
                2005, 2004 and 2003
 (Tabular
                amounts in
                thousands unless otherwise noted, except per share
                amounts)
  2005**For
                      the year ended April 30**
                  
                  **CHC
                      Helicopter**
                    **Corporation**
                  
                  **Guarantor**
                    **subsidiaries**
                  
                  **Non-Guarantor**
                    **subsidiaries**
                  
                  **Eliminations**
                  
                  **Consolidated****Operating
                      activities**Cash
                      flow
                      from operations
                  
                  $
                  (151
                  )
                  $
                  136,009
                  
                  $
                  1,809
                  
                  $
                  (198
                  )
                  $
                  137,469**Financing
                      activities**Long-term
                      debt proceeds
                  
                  
                  356,258
                  
                  
                  (24
                  )
                  
                  32,209
                  
                  
                  (3,759
                  )
                  
                  384,684Long-term
                      debt repayments
                  
                  
                  (242,588
                  )
                  
                  (3,959
                  )
                  
                  (794
                  )
                  
                  3,759
                  
                  
                  (243,582
                  )Debt
                      settlement
                  
                  
                  (1,765
                  )
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  (1,765
                  )Deferred
                      financing costs
                  
                  
                  (5,598
                  )
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  (5,598
                  )Dividends
                      paid
                  
                  
                  (11,596
                  )
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  (11,596
                  )Capital
                      stock
                      issued
                  
                  
                  907
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  90795,618
                  
                  
                  (3,983
                  )
                  
                  31,415
                  
                  
                  -
                  
                  
                  123,050**Investing
                      activities**Additions
                      to
                      property and equipment
                  
                  
                  -
                  
                  
                  (129,189
                  )
                  
                  (67,676
                  )
                  
                  -
                  
                  
                  (196,865
                  )Helicopter
                      major inspections
                  
                  
                  -
                  
                  
                  (11,939
                  )
                  
                  (3,600
                  )
                  
                  -
                  
                  
                  (15,539
                  )Helicopter
                      components
                  
                  
                  -
                  
                  
                  (48,201
                  )
                  
                  (15,251
                  )
                  
                  198
                  
                  
                  (63,254
                  )Proceeds
                      from
                      disposal
                  
                  
                  -
                  
                  
                  39,813
                  
                  
                  51,127
                  
                  
                  -
                  
                  
                  90,940Aircraft
                      deposits
                  
                  
                  -
                  
                  
                  (53,360
                  )
                  
                  377
                  
                  
                  -
                  
                  
                  (52,983
                  )Long-term
                      receivables repaid
                  
                  
                  -
                  
                  
                  309
                  
                  
                  686
                  
                  
                  -
                  
                  
                  995Restricted
                      cash
                  
                  
                  -
                  
                  
                  (1,985
                  )
                  
                  (3,338
                  )
                  
                  -
                  
                  
                  (5,323
                  )Investment
                      in
                      subsidiaries, net of cash acquired
                  
                  
                  -
                  
                  
                  (17,984
                  )
                  
                  -
                  
                  
                  -
                  
                  
                  (17,984
                  )Other
                  
                  
                  56
                  
                  
                  (7,500
                  )
                  
                  142
                  
                  
                  -
                  
                  
                  (7,302
                  )56
                  
                  
                  (230,036
                  )
                  
                  (37,533
                  )
                  
                  198
                  
                  
                  (267,315
                  )Effect
                      of
                      exchange rate changes on cash and cash equivalents
                  
                  
                  -
                  
                  
                  (4,109
                  )
                  
                  288
                  
                  
                  -
                  
                  
                  (3,821
                  )Change
                      provided by (used in) continuing operations
                  
                  
                  95,523
                  
                  
                  (102,119
                  )
                  
                  (4,021
                  )
                  
                  -
                  
                  
                  (10,617
                  )Cash
                      provided
                      by discontinued operations
                  
                  
                  -
                  
                  
                  -
                  
                  
                  929
                  
                  
                  -
                  
                  
                  929**Change
                      in cash and cash equivalents during the year**
                  
                  
                  95,523
                  
                  
                  (102,119
                  )
                  
                  (3,092
                  )
                  
                  -
                  
                  
                  (9,688
                  )**Cash
                      and cash equivalents, beginning of year**
                  
                  
                  1,168
                  
                  
                  43,263
                  
                  
                  16,648
                  
                  
                  -
                  
                  
                  61,079**Cash
                      and cash equivalents, end of year**
                  
                  $
                  96,691
                  
                  $
                  (58,856
                  )
                  $
                  13,556
                  
                  $
                  -
                  
                  $
                  51,391
  162
 
 CHC
                Helicopter
                Corporation
 Notes
                to the
                Consolidated Financial Statements
 April 30,
                2005, 2004 and 2003
 (Tabular
                amounts in
                thousands unless otherwise noted, except per share amounts)
 2004**As
                      at
                      April 30**
                  
                  **CHC
                      Helicopter**
                    **Corporation**
                  
                  **Guarantor**
                    **subsidiaries**
                  
                  **Non-Guarantor**
                    **subsidiaries**
                  
                  **Eliminations**
                  
                  **Consolidated****Assets**Current
                      assetsCash
                      and cash
                      equivalents
                  
                  $
                  1,168
                  
                  $
                  43,263
                  
                  $
                  16,648
                  
                  $
                  -
                  
                  $
                  61,079Receivables
                  
                  
                  976
                  
                  
                  584,874
                  
                  
                  132,078
                  
                  
                  (531,893
                  )
                  
                  186,035Inventory
                  
                  
                  -
                  
                  
                  65,394
                  
                  
                  137,971
                  
                  
                  -
                  
                  
                  203,365Other
                      current
                      assets
                  
                  
                  108
                  
                  
                  2,647
                  
                  
                  3,527
                  
                  
                  17,955
                  
                  
                  24,237Assets
                      of
                      discontinued operations
                  
                  
                  -
                  
                  
                  18,187
                  
                  
                  10,750
                  
                  
                  -
                  
                  
                  28,9372,252
                  
                  
                  714,365
                  
                  
                  300,974
                  
                  
                  (513,938
                  )
                  
                  503,653Property
                      and
                      equipment, net
                  
                  
                  11
                  
                  
                  491,784
                  
                  
                  279,725
                  
                  
                  (35,343
                  )
                  
                  736,177Investments
                  
                  
                  524,152
                  
                  
                  297,997
                  
                  
                  73,914
                  
                  
                  (847,821
                  )
                  
                  48,242Long-term
                      intercompany
                  
                  
                  409,371
                  
                  
                  -
                  
                  
                  77,565
                  
                  
                  (486,936
                  )
                  
                  -Other
                      long-term assets
                  
                  
                  25,794
                  
                  
                  120,048
                  
                  
                  84,018
                  
                  
                  (8,671
                  )
                  
                  221,189Assets
                      of
                      discontinued operations
                  
                  
                  -
                  
                  
                  8,248
                  
                  
                  18,265
                  
                  
                  -
                  
                  
                  26,513$
                  961,580
                  
                  $
                  1,632,442
                  
                  $
                  834,461
                  
                  $
                  (1,892,709
                  )
                  $
                  1,535,774**Liabilities
                      and shareholders' equity**Current
                      liabilitiesPayables
                      and
                      accruals
                  
                  $
                  8,263
                  
                  $
                  564,289
                  
                  $
                  138,590
                  
                  $
                  (529,399
                  )
                  
                  181,743Other
                      current
                      liabilities
                  
                  
                  37,444
                  
                  
                  4,599
                  
                  
                  16,122
                  
                  
                  (4,860
                  )
                  
                  53,305Liabilities
                      of discontinued operations
                  
                  
                  -
                  
                  
                  21,913
                  
                  
                  1,943
                  
                  
                  -
                  
                  
                  23,85645,707
                  
                  
                  590,801
                  
                  
                  156,655
                  
                  
                  (534,259
                  )
                  
                  258,904Long-term
                      debt
                  
                  
                  129,493
                  
                  
                  4,051
                  
                  
                  712
                  
                  
                  -
                  
                  
                  134,256Senior
                      subordinated notes
                  
                  
                  342,675
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  342,675Long-term
                      intercompany
                  
                  
                  -
                  
                  
                  234,939
                  
                  
                  163,224
                  
                  
                  (398,163
                  )
                  
                  -Other
                      liabilities
                  
                  
                  7,196
                  
                  
                  107,150
                  
                  
                  81,727
                  
                  
                  (31,127
                  )
                  
                  164,946Future
                      income
                      tax liabilities
                  
                  
                  898
                  
                  
                  129,611
                  
                  
                  46,288
                  
                  
                  (5,032
                  )
                  
                  171,765Liabilities
                      of discontinued operations
                  
                  
                  -
                  
                  
                  1,708
                  
                  
                  4,172
                  
                  
                  -
                  
                  
                  5,880Shareholders'
                      equity
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  -Capital
                      stock
                  
                  
                  238,518
                  
                  
                  95,885
                  
                  
                  48,596
                  
                  
                  (144,481
                  )
                  
                  238,518Contributed
                      surplus
                  
                  
                  2,340
                  
                  
                  (470
                  )
                  
                  53,285
                  
                  
                  (52,815
                  )
                  
                  2,340Accumulated
                      other comprehensive earnings
                  
                  
                  (31,905
                  )
                  
                  (53,134
                  )
                  
                  57,143
                  
                  
                  17,728
                  
                  
                  (10,168
                  )Retained
                      earnings
                  
                  
                  226,658
                  
                  
                  521,901
                  
                  
                  222,659
                  
                  
                  (744,560
                  )
                  
                  226,658$
                  961,580
                  
                  $
                  1,632,442
                  
                  $
                  834,461
                  
                  $
                  (1,892,709
                  )
                  $
                  1,535,774
  163
 CHC
                Helicopter
                Corporation
 Notes
                to the
                Consolidated Financial Statements
 April 30,
                2005, 2004 and 2003
 (Tabular
                amounts in
                thousands unless otherwise noted, except per share amounts)
 2004**For
                        the year ended April 30**
                    
                    **CHC
                        Helicopter**
                      **Corporation**
                    
                    **Guarantor**
                      **subsidiaries**
                    
                    **Non-Guarantor**
                      **subsidiaries**
                    
                    **Eliminations**
                    
                    **Consolidated****Revenue**
                    
                    $
                    853
                    
                    $
                    443,089
                    
                    $
                    366,625
                    
                    $
                    (90,554
                    )
                    $
                    720,013Direct
                        costs
                    
                    
                    18,976
                    
                    
                    (391,860
                    )
                    
                    (301,561
                    )
                    
                    99,703
                    
                    
                    (574,742
                    )General
                        and
                        administration costs
                    
                    
                    (18,633
                    )
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    (18,633
                    )Amortization
                    
                    
                    (3
                    )
                    
                    (18,228
                    )
                    
                    (6,958
                    )
                    
                    -
                    
                    
                    (25,189
                    )Restructuring
                        costs
                    
                    
                    (15,168
                    )
                    
                    (10,281
                    )
                    
                    (3,448
                    )
                    
                    -
                    
                    
                    (28,897
                    )Gain
                        (loss)
                        on disposals of assets
                    
                    
                    -
                    
                    
                    3,288
                    
                    
                    20
                    
                    
                    (1
                    )
                    
                    3,307**Operating
                        income**
                    
                    
                    (13,975
                    )
                    
                    26,008
                    
                    
                    54,678
                    
                    
                    9,148
                    
                    
                    75,859Debt
                        settlement costs
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    -Financing
                        charges
                    
                    
                    (4,357
                    )
                    
                    (19,821
                    )
                    
                    (26,789
                    )
                    
                    (1,353
                    )
                    
                    (52,320
                    )**Earnings
                        from continuing operations before undernoted**
                    
                    
                    (18,332
                    )
                    
                    6,187
                    
                    
                    27,889
                    
                    
                    7,795
                    
                    
                    23,539Equity
                        in
                        earnings of associated companies
                    
                    
                    56,019
                    
                    
                    18,891
                    
                    
                    -
                    
                    
                    (70,985
                    )
                    
                    3,925Intercompany
                        charges
                    
                    
                    -
                    
                    
                    7,268
                    
                    
                    (7,268
                    )
                    
                    -
                    
                    
                    -Income
                        taxes
                    
                    
                    8,134
                    
                    
                    16,199
                    
                    
                    (3,402
                    )
                    
                    -
                    
                    
                    20,931**Net
                        earnings from continuing operations**
                    
                    
                    45,821
                    
                    
                    48,545
                    
                    
                    17,219
                    
                    
                    (63,190
                    )
                    
                    48,395**Net
                        loss from discontinued operations**
                    
                    
                    -
                    
                    
                    (321
                    )
                    
                    (2,253
                    )
                    
                    -
                    
                    
                    (2,574
                    )**Net
                        earnings**
                    
                    
                    45,821
                    
                    
                    48,224
                    
                    
                    14,966
                    
                    
                    (63,190
                    )
                    
                    45,821Retained
                        earnings, beginning of year
                    
                    
                    191,323
                    
                    
                    473,677
                    
                    
                    207,693
                    
                    
                    (681,370
                    )
                    
                    191,323Dividends
                    
                    
                    (10,486
                    )
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    (10,486
                    )**Retained
                        earnings, end of year**
                    
                    $
                    226,658
                    
                    $
                    521,901
                    
                    $
                    222,659
                    
                    $
                    (744,560
                    )
                    $
                    226,658
  164
 CHC
                Helicopter
                Corporation
 Notes
                to the
                Consolidated Financial Statements
 April 30,
                2005, 2004 and 2003
 (Tabular
                amounts in
                thousands unless otherwise noted, except per share
                amounts)
  2004**For
                      the year ended April 30**
                  
                  **CHC
                      Helicopter**
                    **Corporation**
                  
                  **Guarantor**
                    **subsidiaries**
                  
                  **Non-Guarantor**
                    **subsidiaries**
                  
                  **Eliminations**
                  
                  **Consolidated****Operating
                      activities**Cash
                      flow from operations
                  
                  $
                  (21,082
                  )
                  $
                  76,975
                  
                  $
                  34,611
                  
                  $
                  -
                  
                  $
                  90,504**Financing
                      activities**Long-term
                      debt proceeds
                  
                  
                  512,010
                  
                  
                  1,088
                  
                  
                  28,496
                  
                  
                  (44,732
                  )
                  
                  496,862Long-term
                      debt repayments
                  
                  
                  (315,378
                  )
                  
                  (44,797
                  )
                  
                  (26,558
                  )
                  
                  44,732
                  
                  
                  (342,001
                  )Debt
                      settlement
                  
                  
                  (37,883
                  )
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  (37,883
                  )Deferred
                      financing costs
                  
                  
                  (13,200
                  )
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  (13,200
                  )Dividends
                      paid
                  
                  
                  (5,291
                  )
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  (5,291
                  )Capital
                      stock issued
                  
                  
                  3,289
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  3,289143,547
                  
                  
                  (43,709
                  )
                  
                  1,938
                  
                  
                  -
                  
                  
                  101,776**Investing
                      activities**Additions
                      to property and equipment
                  
                  
                  -
                  
                  
                  (99,539
                  )
                  
                  (17,239
                  )
                  
                  -
                  
                  
                  (116,778
                  )Helicopter
                      major inspections
                  
                  
                  -
                  
                  
                  (5,623
                  )
                  
                  (3,614
                  )
                  
                  -
                  
                  
                  (9,237
                  )Helicopter
                      components
                  
                  
                  -
                  
                  
                  (42,128
                  )
                  
                  (16,899
                  )
                  
                  -
                  
                  
                  (59,027
                  )Proceeds
                      from disposal
                  
                  
                  -
                  
                  
                  110,505
                  
                  
                  16,393
                  
                  
                  -
                  
                  
                  126,898Aircraft
                      deposits
                  
                  
                  -
                  
                  
                  (18,091
                  )
                  
                  (5,483
                  )
                  
                  -
                  
                  
                  (23,574
                  )Long-term
                      receivables advanced
                  
                  
                  -
                  
                  
                  (1,147
                  )
                  
                  -
                  
                  
                  -
                  
                  
                  (1,147
                  )Restricted
                      cash
                  
                  
                  -
                  
                  
                  (6,014
                  )
                  
                  (3,812
                  )
                  
                  -
                  
                  
                  (9,826
                  )Investment
                      in subsidiaries, net of cash acquired
                  
                  
                  (92,668
                  )
                  
                  -
                  
                  
                  (4,872
                  )
                  
                  -
                  
                  
                  (97,540
                  )Other
                  
                  
                  2,012
                  
                  
                  391
                  
                  
                  1,763
                  
                  
                  -
                  
                  
                  4,166(90,656
                  )
                  
                  (61,646
                  )
                  
                  (33,763
                  )
                  
                  -
                  
                  
                  (186,065
                  )Effect
                      of exchange rate changes on cash and cash equivalents
                  
                  
                  -
                  
                  
                  2,119
                  
                  
                  (372
                  )
                  
                  -
                  
                  
                  1,747Change
                      provided by (used in) continuing operations
                  
                  
                  31,809
                  
                  
                  (26,261
                  )
                  
                  2,414
                  
                  
                  -
                  
                  
                  7,962Cash
                      used in discontinued operations
                  
                  
                  -
                  
                  
                  (3,060
                  )
                  
                  (1,927
                  )
                  
                  -
                  
                  
                  (4,987
                  )**Change
                      in cash and cash equivalents during the year**
                  
                  
                  31,809
                  
                  
                  (29,321
                  )
                  
                  487
                  
                  
                  -
                  
                  
                  2,975**Cash
                      and cash equivalents, beginning of year**
                  
                  
                  (30,641
                  )
                  
                  72,584
                  
                  
                  16,161
                  
                  
                  -
                  
                  
                  58,104**Cash
                      and cash equivalents, end of year**
                  
                  $
                  1,168
                  
                  $
                  43,263
                  
                  $
                  16,648
                  
                  $
                  -
                  
                  $
                  61,079
  165
 CHC
                Helicopter
                Corporation
 Notes
                to the
                Consolidated Financial Statements
 April 30,
                2005, 2004 and 2003
 (Tabular
                amounts in
                thousands unless otherwise noted, except per share
                amounts)
  2003**For
                        the year ended April 30**
                    
                    **CHC
                        Helicopter**
                      **Corporation**
                    
                    **Guarantor**
                      **subsidiaries**
                    
                    **Non-Guarantor**
                      **subsidiaries**
                    
                    **Eliminations**
                    
                    **Consolidated****Revenue**
                    
                    $
                    913
                    
                    $
                    456,899
                    
                    $
                    349,452
                    
                    $
                    (95,377
                    )
                    $
                    711,887Direct
                        costs
                    
                    
                    26,732
                    
                    
                    (390,344
                    )
                    
                    (276,731
                    )
                    
                    90,902
                    
                    
                    (549,441
                    )General
                        and
                        administration costs
                    
                    
                    (21,467
                    )
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    (21,467
                    )Amortization
                    
                    
                    (43
                    )
                    
                    (12,862
                    )
                    
                    (7,620
                    )
                    
                    -
                    
                    
                    (20,525
                    )Restructuring
                        costs
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    -Gain
                        on
                        disposals of assets
                    
                    
                    -
                    
                    
                    2,393
                    
                    
                    20
                    
                    
                    -
                    
                    
                    2,413**Operating
                        income**
                    
                    
                    6,135
                    
                    
                    56,086
                    
                    
                    65,121
                    
                    
                    (4475
                    )
                    
                    122,867Debt
                        settlement costs
                    
                    
                    (10,027
                    )
                    
                    (2,437
                    )
                    
                    -
                    
                    
                    -
                    
                    
                    (12,464
                    )Financing
                        charges
                    
                    
                    29,763
                    
                    
                    (19,467
                    )
                    
                    (28,078
                    )
                    
                    -
                    
                    
                    (17,782
                    )**Earnings
                        from continuing operations before undernoted**
                    
                    
                    25,871
                    
                    
                    34,182
                    
                    
                    37,043
                    
                    
                    (4,475
                    )
                    
                    92,621Equity
                        in
                        earnings of associated companies
                    
                    
                    60,435
                    
                    
                    15,570
                    
                    
                    (56
                    )
                    
                    (73,609
                    )
                    
                    2,340Intercompany
                        charges
                    
                    
                    -
                    
                    
                    11,147
                    
                    
                    (11,147
                    )
                    
                    -
                    
                    
                    -Income
                        taxes
                    
                    
                    308
                    
                    
                    4,623
                    
                    
                    (11,706
                    )
                    
                    -
                    
                    
                    (6,775
                    )**Net
                        earnings from continuing operations**
                    
                    
                    86,614
                    
                    
                    65,522
                    
                    
                    14,134
                    
                    
                    (78,084
                    )
                    
                    88,186**Net
                        loss from discontinued operations**
                    
                    
                    -
                    
                    
                    -
                    
                    
                    (1,572
                    )
                    
                    -
                    
                    
                    (1,572
                    )**Net
                        earnings**
                    
                    
                    86,614
                    
                    
                    65,522
                    
                    
                    12,562
                    
                    
                    (78,084
                    )
                    
                    86,614Retained
                        earnings, beginning of year
                    
                    
                    108,725
                    
                    
                    408,155
                    
                    
                    195,131
                    
                    
                    (603,286
                    )
                    
                    108,725Dividends
                    
                    
                    (4,016
                    )
                    
                    -
                    
                    
                    -
                    
                    
                    -
                    
                    
                    (4,016
                    )**Retained
                        earnings, end of year**
                    
                    $
                    191,323
                    
                    $
                    473,677
                    
                    $
                    207,693
                    
                    $
                    (681,370
                    )
                    $
                    191,323
  166
 CHC
                Helicopter
                Corporation
 Notes
                to the
                Consolidated Financial Statements
 April 30,
                2005, 2004 and 2003
 (Tabular
                amounts in
                thousands unless otherwise noted, except per share amounts)
 2003**For
                      the year ended April 30**
                  
                  **CHC
                      Helicopter**
                    **Corporation**
                  
                  **Guarantor**
                    **subsidiaries**
                  
                  **Non-Guarantor**
                    **subsidiaries**
                  
                  **Eliminations**
                  
                  **Consolidated****Operating
                      activities**Cash
                      flow
                      from operations
                  
                  $
                  21,426
                  
                  $
                  102,154
                  
                  $
                  (9,774
                  )
                  $
                  -
                  
                  $
                  113,806**Financing
                      activities**Long-term
                      debt proceeds
                  
                  
                  38
                  
                  
                  -
                  
                  
                  37,803
                  
                  
                  (37,803
                  )
                  
                  38Long-term
                      debt repayments
                  
                  
                  (120,093
                  )
                  
                  (38,902
                  )
                  
                  (2,012
                  )
                  
                  37,803
                  
                  
                  (123,204
                  )Debt
                      settlement
                  
                  
                  (9,136
                  )
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  (9,136
                  )Dividends
                      paid
                  
                  
                  (4,016
                  )
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  (4,016
                  )Capital
                      stock
                      issued
                  
                  
                  596
                  
                  
                  -
                  
                  
                  -
                  
                  
                  -
                  
                  
                  596(132,611
                  )
                  
                  (38,902
                  )
                  
                  35,791
                  
                  
                  -
                  
                  
                  (135,722
                  )**Investing
                      activities**Additions
                      to
                      property and equipment
                  
                  
                  -
                  
                  
                  (29,337
                  )
                  
                  (14,566
                  )
                  
                  -
                  
                  
                  (43,903
                  )Helicopter
                      major inspections
                  
                  
                  -
                  
                  
                  (8,362
                  )
                  
                  (5,022
                  )
                  
                  -
                  
                  
                  (13,384
                  )Helicopter
                      components
                  
                  
                  -
                  
                  
                  (37,351
                  )
                  
                  (10,138
                  )
                  
                  -
                  
                  
                  (47,489
                  )Proceeds
                      from
                      disposal
                  
                  
                  2,238
                  
                  
                  69,009
                  
                  
                  3,618
                  
                  
                  -
                  
                  
                  74,865Aircraft
                      deposits
                  
                  
                  -
                  
                  
                  (6,730
                  )
                  
                  -
                  
                  
                  -
                  
                  
                  (6,730
                  )Long-term
                      receivables repaid (advanced)
                  
                  
                  -
                  
                  
                  8,086
                  
                  
                  (700
                  )
                  
                  -
                  
                  
                  7,386Other
                  
                  
                  682
                  
                  
                  (2,856
                  )
                  
                  80
                  
                  
                  -
                  
                  
                  (2,094
                  )2,920
                  
                  
                  (7,541
                  )
                  
                  (26,728
                  )
                  
                  -
                  
                  
                  (31,349
                  )Effect
                      of
                      exchange rate changes on cash and cash equivalents
                  
                  
                  -
                  
                  
                  1,502
                  
                  
                  215
                  
                  
                  -
                  
                  
                  1,717Cash
                      (used
                      in) provided by continuing operations
                  
                  
                  (108,265
                  )
                  
                  57,213
                  
                  
                  (496
                  )
                  
                  -
                  
                  
                  (51,548
                  )Cash
                      used in
                      discontinued operations
                  
                  
                  -
                  
                  
                  -
                  
                  
                  (3,186
                  )
                  
                  -
                  
                  
                  (3,186
                  )**Change
                      in cash and cash equivalents during the year**
                  
                  
                  (108,265
                  )
                  
                  57,213
                  
                  
                  (3,682
                  )
                  
                  -
                  
                  
                  (54,734
                  )**Cash
                      and cash equivalents, beginning of year**
                  
                  
                  77,624
                  
                  
                  15,371
                  
                  
                  19,843
                  
                  
                  -
                  
                  
                  112,838**Cash
                      and cash equivalents, end of year**
                  
                  $
                  (30,641
                  )
                  $
                  72,584
                  
                  $
                  16,161
                  
                  $
                  -
                  
                  $
                  58,104
  167
 
 ITEM
                        19.
                    EXHIBITS
 1.1
                  Articles
                      of Incorporation - filed as Exhibit 3.1 to the Company's Amendment
                      #1 to
                      Registration Statement on Form F-1 dated October 20,
                      1993 and
                      incorporated herein by reference.
  1.2
                  Bylaws,
                      as amended - filed as Exhibit 1.2 to the Company’s Form 20-F for fiscal
                      2002 dated September 17, 2002 and incorporated herein
                      by
                      reference.
  2.1
                  Indenture
                      dated as of April 27, 2004 among the Company, each of
                      the Subsidiary
                      Guarantors named therein, and The Bank of New York, as Trustee,
                      relating
                      to the 7 3/8% Senior Subordinated Notes due 2014 filed as Exhibit
                      4.5 to
                      the Company’s Registration Statement on Form F-4 dated June 30,
                      2004
                      and incorporated herein by
                      reference.
  2.2
                  First
                      Supplemental Indenture dated as of December 23, 2004 among
                      the Company,
                      each of the Additional Guarantors named therein and The Bank
                      of New York,
                      as Trustee, to the Indenture dated as of April 27, 2004 among
                      the Company,
                      each of the Subsidiary Guarantors named therein and the Trustee.
  2.3
                  Form
                      of 7 3/8% Senior Subordinated Notes due 2014 filed as Exhibit
                      4.6 to the
                      Company’s Registration Statement on Form F-4 dated June 30,
                      2004 and
                      incorporated herein by reference.
  4.3
                  Purchase
                      Agreement dated April 21, 2004 among the Company, each
                      of the
                      Subsidiary Guarantors named therein, Merrill Lynch & Co., Merrill
                      Lynch, Pierce, Fenner & Smith Incorporated and Scotia Capital (USA)
                      Inc. - filed as Exhibit 4.7 to the Company’s Registration Statement on
                      Form F-4 dated June 30, 2004 and incorporated herein
                      by
                      reference.
  4.4
                  Amended
                      and Restated U.S. $225,000,000 Senior Credit Agreement dated
                      as of July 5,
                      2000 among The Bank of Nova Scotia, as Administrative Agent,
                      The Lenders
                      from time to time party to this Agreement and the Company,
                      as amended by
                      the amending agreements dated as of October 11, 2000, October
                      31, 2000,
                      December 15, 2000, July 16, 2001, March 29, 2002, April 29,
                      2002, July 4,
                      2002, July 31, 2002, March 6, 2003, February 13, 2004, April
                      21, 2004 and
                      April 22, 2004,filed as Exhibit 10.2 to the Company’s Registration
                      Statement on Form F-4 dated June 30, 2004 and incorporated
                      herein by
                      reference.
  4.6
                  Employee
                      Share Option Plan, as amended March 3, 2003 filed as
                      exhibit 4.6 to
                      the Company’s Form 20-F for fiscal 2003 dated September 17, 2003
                      and
                      incorporated herein by reference.
  4.7
                  Supplemental
                      Executive Retirement Plan Agreement, filed as Exhibit 4.7 to
                      the Company’s
                      Form 20-F for fiscal 2001 dated September 13, 2001 and
                      incorporated
                      herein by reference.
  4.8
                  Long-term
                      Incentive Plan, filed as Exhibit 4.8 to the Company’s Form 20-F for fiscal
                      2001 dated September 13, 2001 and incorporated herein
                      by
                      reference.
  4.9
                  Employee
                      Share Purchase Plan, filed as Exhibit 4.9 to the Company’s Form 20-F for
                      fiscal 2001 dated September 13, 2001 and incorporated
                      herein by
                      reference.
  4.10
                  Share
                      Appreciation Rights Plan, filed as Exhibit 4.10 to the Company’s Form 20-F
                      for fiscal 2001 dated September 13, 2001 and incorporated
                      herein by
                      reference.
  4.11
                  Executive
                      Retiring Allowance, filed as Exhibit 4.11 to the Company’s Form 20-F for
                      fiscal 2001 dated September 13, 2001 and incorporated
                      herein by
                      reference.
  7.1
                  Statement
                      Regarding Computation of Ratio of Earnings to Fixed
                      Charges
  8.1
                  Significant
                      Subsidiaries
  168
 
 12.1
                  Section
                      302 Certification by Chief Executive
                      Officer
  12.2
                  Section
                      302 Certification by Chief Financial
                      Officer
  13.1
                  Section 906
                      Certification by Chief Executive Officer
  13.2
                  Section
                      906 Certification by Chief Financial
                      Officer
  
 
 P ursuant
            to the
            requirements of Section 12 of the Securities Exchange Act of 1934,
            the
            registrant certifies that it meets all of the requirements for filing
            on Form
            20-F and has duly caused this Annual Report to be signed on its behalf
            by the
            undersigned, thereunto duly authorized.
  Dated:
                      September 16, 2005.
                  **CHC
                      HELICOPTER CORPORATION**BY:
                  [signed]
                      Rick
                      DavisRick
                      Davis,
                      CAVice-President
                      Financial Reporting
  169