CHC Restates US GAAP Notes, Revises Internal Control Assessment as at April 30, 2007 and Restates Second Quarter 2008 Management
23 Janeiro 2008 - 10:20PM
Marketwired
VANCOUVER, BRITISH COLUMBIA (TSX: FLY.A)(TSX: FLY.B)(NYSE: FLI)
announced today it will file tomorrow an amended Annual Report on
Form 20-F for the year ended April 30, 2007 with the United States
Securities and Exchange Commission, amended annual financial
statements and MD&A (the "Canadian Annual Filings") for the
same period and amended financial statements and MD&A (the
"Quarterly Filings") for the second quarter of fiscal 2008 with the
Canadian Securities Administrators. The Annual Report on Form 20-F
will be amended to restate certain amounts presented in the US GAAP
notes to CHC's consolidated financial statements for the years
ending April, 30, 2007, 2006 and 2005 (the "US GAAP Restatement")
to record the impact of foreign currency embedded derivatives that
required separation from their host contracts under US SFAS 133 -
Accounting for Derivative Instruments and Hedging Activities and to
amend Management's Report on Internal Control over Financial
Reporting and Independent Auditors' Report on Internal Controls
(the "Controls Reassessment"). The Canadian Annual Filings will be
amended to reflect the US GAAP Restatement. The Quarterly Filings
will be amended to restate the impact of a change in the valuation
methodology for embedded derivatives and the related transition
adjustment recorded for embedded derivatives upon the adoption of
Section 3855 of the CICA Handbook (the "Canadian GAAP
Restatement").
CHC's financial statements are prepared in accordance with
Canadian GAAP, with certain items, including net earnings,
reconciled to US GAAP in notes to the financial statements. The US
GAAP Restatement does not affect any amounts in CHC's financial
statements presented under Canadian GAAP, but affects only certain
amounts presented in the US GAAP reconciliation note. The US GAAP
Restatement corrects a material accounting error in the fiscal
years ended April 30, 2005 and 2007 resulting from the failure to
detect and record embedded derivatives in several host contracts
(the "Contracts") which commenced prior to fiscal 2007. As a result
of the US GAAP Restatement, net earnings according to U.S. GAAP for
the fiscal years ended April 30, 2006 and 2005 decreased by $0.5
million and $6.3 million, respectively, while net earnings
according to U.S. GAAP for the fiscal year ended April 30, 2007
increased by $1.8 million.
Commencing in May 1, 2007, new Canadian accounting standards
required CHC to recognize and value certain financial instruments,
including embedded derivatives. The Canadian GAAP Restatement
adjusts the previously reported transitional adjustment for the
value of embedded derivatives in certain contracts and corrects a
material accounting error in the three month period ended October
31, 2007 resulting from an incorrect valuation of embedded
derivatives in contracts for which services have not yet commenced.
As a result of the Canadian GAAP Restatement net earnings for the
three month period ended October 31, 2007 decreased by $0.9
million.
Due to the US GAAP Restatement, CHC reconsidered its assessment
of internal control over financial reporting as of April 30, 2007
and concluded that, due to the failure to detect and record the
impact of the embedded derivatives in the Contracts, there was a
material weakness in its internal control over financial reporting
as of April 30, 2007. The independent auditors of CHC have
concurred in this assessment. As a result, the Management's Report
on Internal Control over Financial Reporting and the Independent
Auditors' Report on Internal Controls have been amended
accordingly.
CHC has had since fiscal 2007 an effective control to detect and
record embedded derivatives in all new contracts and has, as a
result of new Canadian accounting standards for financial
instruments effective for CHC in fiscal 2008, now reviewed all
contracts entered into prior to such control being implemented. As
well, CHC has made improvements to its controls to properly value
and record embedded derivatives in all contracts in the third
quarter of fiscal 2008.
CHC is the world's largest provider of helicopter services to
the global offshore oil and gas industry, with aircraft operating
in more than 30 countries worldwide.
If you wish to be added to CHC's news distribution list, please
visit
http://www.chc.ca/investor_materialrequest.php
Contacts: CHC Helicopter Corporation Rick Davis Senior Vice
President and Chief Financial Officer (604) 279-2471 or (778)
999-0314 CHC Helicopter Corporation Annette Cusworth Vice President
Financial Services (604) 279-2484 or (778) 999-1476 Website:
www.chc.ca
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