PARIS (Reuters) – French President Francois Hollande called on Thursday for an economic government in the euro zone that would have its own budget, the right to issue debt, a harmonized tax system and a full-time president.

Speaking at a news conference marking his first year in office, a day after economic data showed France had slipped back into recession, the Socialist leader said he sought to create a full political European Union within two years.

His proposals seemed likely to encounter stiff resistance from Germany, Europe‘s leading power, which opposes mutualising debt among European states and is reluctant to give the euro zone its own secretariat or create new divisions in the EU, of which 10 countries are not in the 17-nation single currency.

It also comes as Britain’s government faces growing domestic pressure to hold a referendum on leaving the bloc.

“My initiative has four points that I am putting to our partners. The first is to create an economic government with the euro zone countries which would meet every month with a real president appointed for a long period and who would be devoted to this task,” Hollande said.

“This economic government will debate the main political and economic decisions to be taken by the member states, harmonize tax policy, start the convergence of social policies from the top and launch a battle against tax fraud.”

The other planks were:

– an initiative to bring forward planned EU spending to combat youth unemployment, now at record levels across southern Europe;

– a European energy community to coordinate the transition to renewable energy sources;

– “a new stage in fiscal integration with a budget capacity that would be granted to the euro zone and the gradual possibility of raising debt”.

Hollande, whose approval rating has fallen further than any previous elected president in his first year, sought to reassure his left-wing electorate that he remained true to his Socialist colors, saying France could keep its generous welfare state provided it was made more efficient.

He expressed full confidence in Prime Minister Jean-Marc Ayrault and played down criticism of clashes among his ministers on economic policy, saying there might eventually be a reshuffle but not now.

But he said the current pension system was unsustainable and, ahead of a reform due later this year, said the French would have to work longer in future to receive a full pension.

He stuck to a promise to reverse the rising trend in unemployment by the end of the year, despite widespread skepticism among economists that this can be achieved while the economy remains flat.

He also called for a 10-year public investment plan in the digital sector, the promised energy transition, public health and in big transport infrastructure projects.

Hollande said it was paradoxical that Europe, which remained the world’s number one economic power, was regarded “as a sick, declining, doubting continent.

“It is my responsibility as the leader of a founder member of the European Union… to pull Europe out of this torpor which has gripped it, and to reduce people’s disenchantment with it.”

(Reporting by Mark John and Ingrid Melander; Writing by Paul Taylor)

By Andy Sullivan and Kim Dixon

WASHINGTON (Reuters) – The outgoing head of the U.S. Internal Revenue Service angered Republican lawmakers on Friday by resisting their demands that he identify who at the tax-collection agency had inappropriately targeted conservative groups for extra scrutiny.

But during the first hearing into a growing IRS scandal that could preoccupy Washington for months, Republicans did learn that a top official in President Barack Obama‘s administration knew that the IRS was looking into targeting by the tax agency nearly a year ago.

That detail could encourage Republicans’ efforts to link the scandal to the White House as the administration faces a series of setbacks that threaten to derail Obama’s second-term priorities, which include revamping immigration laws and reaching a budget deal with Republicans.

Friday’s hearing was dominated by lawmakers’ grilling of acting IRS Commissioner Steven Miller, who provided few clear answers while apologizing for the extensive questioning and years-long delays that many conservative groups have experienced after applying for tax-exempt status.

Miller, who was fired by Obama on Wednesday, said the overly aggressive scrutiny of such groups was the result of mismanagement, not partisan politics. His comments echoed the findings of a Treasury Department inspector general’s report released this week.

“I think what happened here is that foolish mistakes were made by people trying to be more efficient,” said Miller, who will leave his post next week and be replaced by Daniel Werfel, a budget specialist in the administration.

Miller said he did not know who had come up with the idea to single out groups that appeared to be politically conservative for intense reviews of whether they qualified to be tax-exempt.

He said that although the added scrutiny was wrong, he did not think that IRS employees had broken any laws.

That claim drew the ire of Republicans on the House of Representatives Ways and Means Committee, as did Miller’s shrugs when lawmakers pressed him over why he had not told Congress about the probe even though he learned about it a year ago.

“This is offensive, to hear this testimony,” said Representative Tom Reed, a Republican from New York.

A LINK TO THE WHITE HOUSE?

The hearing did seem to yield some fruit for Republicans who are trying to cast the targeting of conservative “Tea Party” and “Patriot” groups as a political initiative encouraged by the Obama administration, a claim the White House rejects.

Critics have hammered the White House this week on the IRS scandal, its handling of the deadly attack on the U.S. mission in Benghazi, Libya, and the Justice Department’s seizure of phone records of Associated Press journalists in a criminal probe into intelligence leaks.

The Treasury Department‘s internal watchdog, J. Russell George, told the House panel that Deputy Treasury Secretary Neal Wolin, an Obama political appointee, learned nearly a year ago that a government watchdog was looking into inappropriate targeting by the IRS.

Wolin, the No. 2 official at Treasury, is due to testify next week before the House Oversight and Government Reform Committee.

In a statement, the Treasury Department said it made the probe public last fall in an annual report that listed more than 200 other internal investigations.

Treasury Secretary Jack Lew was told about the investigation when he took office in March, the department said, but neither he nor Wolin was told about its findings even as a preliminary version circulated elsewhere within the department.

Miller’s often-defiant appearance on Friday was unlikely to satisfy Republicans who have accused Obama’s Democratic administration of using the machinery of government to target political foes.

They also have accused Miller of misleading Congress last year.

Miller acknowledged that he learned that IRS investigators were looking into the issue a year ago, but he did not mention the probe to lawmakers until the news became public last week. He said he had not misled lawmakers by keeping quiet about the issue in prior appearances on Capitol Hill.

“I was answering the questions that I was asked” by Congress, he told the House committee.

Miller appeared to grow irritated over the course of the four-hour hearing, repeatedly interrupting questioners, flashing quizzical looks and shrugging his shoulders.

Miller said the IRS has had trouble keeping up with the flood of 70,000 tax-exempt applications it has received in recent years, and asked for money to hire more examiners.

Several Republicans responded that the IRS should instead be shrunk.

The IRS has seen the number of groups applying for 501(c)4 status nearly double in the wake of January 2010 Supreme Court decision that loosened campaign-finance rules.

That status allows groups to keep their donor lists secret while engaging in limited political activity. Political campaigns, by contrast, must make their donor lists public.

Several Democrats on the committee said the IRS needed to take a harder look at those applications to ensure that political groups do not exploit the tax code to shroud political activities in secrecy.

Miller said the IRS needs clearer guidance from Congress to determine what constitutes political activity.

FACEBOOK POSTS, BOOK LISTS

The scandal has angered lawmakers in both parties, but Miller’s appearance appeared to further inflame Republicans who see it as a symptom of a federal government that has grown too large and is overly intrusive into Americans’ lives.

Tea Party groups investigated by the IRS say the tax agency made unusually extensive demands, such as asking the groups to provide social-media posts and lists of books that members had read, and tell agents whether any members of the group planned to run for public office in the future.

The questioning in some cases took nearly three years, preventing some groups from participating in the 2010 and 2012 elections.

The Treasury Department report did not identify individuals in the IRS’s Washington headquarters or its Cincinnati field office who were responsible for coming up with the criteria used to single out conservative groups. The watchdog is continuing its investigation.

Republicans have vowed to find out who was involved, but Miller did not provide much of a road map.

“Who is responsible for targeting these individuals?” asked Representative Kevin Brady, a Texas Republican.

“I don’t have names for you,” Miller responded.

Republicans accused him of dodging their questions.

“I’m hearing, ‘I don’t know, I don’t remember, I don’t recall, I don’t believe,’” said Representative Dave Reichert of Washington. “You don’t even know who investigated the case, but yet you say it was investigated.”

Democrats seemed more inclined to accept Miller’s explanation.

“I am not convinced that this is a great big political conspiracy,” Democratic Representative Danny Davis said.

Two other congressional committees will hold IRS hearings next week. One of them, the House Oversight and Government Reform Committee, plans to question five lower-level IRS employees over whether they played a role in the targeting of conservative groups.

Wolin and Douglas Shulman, who was IRS commissioner when the targeting occurred, also are scheduled to testify.

(Additional reporting by Karey Van Hall, Patrick Temple-West and Susan Heavey; Writing by Andy Sullivan; Editing by David Lindsey, Jackie Frank and Jim Loney)

BETHESDA, Md., May 15, 2013 /PRNewswire/ – Rapid Financial Services, LLC (dba RapidAdvance), one of the nation’s leading providers of short-term working capital to small businesses, today announced that they have acquired the operating assets of Professional Merchant Advance Capital , LLC (“ProMAC”).  The assets will be owned by a new entity, Promac Health Care Financing, LLC (“PHCF”), which will operate as a separate business from RapidAdvance offering customized and unique financing solutions to health care providers of all kinds including individual health care practices, pharmacies, clinical facilities, and in-home health care providers.  The business will be headquartered in Long Island, New York and Stephen McDermott , former CEO of ProMAC, will continue in his role as CEO of PHCF.  

(Logo:  http://photos.prnewswire.com/prnh/20121127/PH19294LOGO)

Rapid Financial Services, LLC’s Chief Executive Officer, Jeremy Brown stated: “We have seen a great increase in the demand for financing within the health care space and believe aligning our expertise in small business funding with PHCF’s unique financing products will allow us to deliver a state of the art solution for health care providers.” 

PHCF has an innovative set of risk mitigation products that enables the company to control the flow of funds from medical reimbursements; including but not limited to government and private insurance payments.  RapidAdvance will be supporting the efforts to grow the company in an accelerated manner by providing PHCF access to capital, marketing and technology resources  and back office support. 

“We are impressed by the team that Stephen has built over the past five years and look forward to helping the company reach its full potential as a leading provider of working capital solutions in amounts up to $500,000 for health care providers,” Brown added.

Stephen McDermott , CEO of PHCF stated: “We see this as an exceptional opportunity to enhance our position within the health care financing industry.  With the support of RapidAdvance we hope to recognize broader market penetration, financial stability and improved operational efficiencies allowing us to execute on all phases of our strategic growth on an accelerated time table. RapidAdvance is a proven leader in the alternative financing industry and we are delighted to be part of the organization; we enthusiastically look forward to our future opportunities.”

Additional investors in PHCF include Steven Mandis , a former executive at Goldman Sachs and Citigroup and consultant to McKinsey and a current investor in RapidAdvance, and Howard Wietschner , former Managing Director, Partner and Hedge Fund Industry Group Chief at Goldman Sachs.

About RapidAdvance: RapidAdvance is a leader in the alternative financing industry providing working capital solutions to meet the needs of small and mid-sized businesses. RapidAdvance offers small business owners multiple financing options designed to meet the capital needs of established low-risk businesses, businesses with financial challenges, and newer businesses. RapidAdvance ‘s suite of products offers business owners the ability to obtain financing to grow their business. Funding can be used for virtually any business purpose including purchasing new equipment, inventory/seasonal merchandising, expansion/remodeling, paying off debt/taxes, and emergency funding. RapidAdvance also offers a partner program for companies who work with small businesses. For more information, visit http://www.rapidadvance.com.

About Steven Mandis : Steven Mandis is an adjunct professor at Columbia University Business School. Formerly, Mr. Mandis was an executive at Citigroup in various roles including Chief of Staff to the President and Chief Operating Officer of Citigroup; Vice Chairman of Citigroup’s Institutional Clients Group (ICG); and a member of the Executive, Management and Risk Management Committees of ICG. Prior to joining Citigroup, Mr. Mandis was a senior advisor to McKinsey & Company. During the financial crisis, Mr. Mandis was asked to advise McKinsey on strategic, business process, risk and organizational issues facing financial institutions and related regulatory authorities throughout the world. Previously, Mr. Mandis had worked at Goldman Sachs in a variety of departments. Mr. Mandis helped build the Special Situations Proprietary Trading Group (SSG) within the Fixed Income, Commodities and Currencies Division at Goldman Sachs. In addition, Mr. Mandis was the business unit manager for the global M&A department. Mr. Mandis left Goldman Sachs to co-start a global alternative asset management company that he helped grow to in excess of $12 billion dollars of assets under management.

About Howard Wietschner:  Howard Wietschner is a private investor and retired partner from Goldman Sachs.  Mr. Wietschner joined the firm in 1994.  In his 18 years of service at Goldman Sachs, Mr. Wietschner helped form Goldman Sach’s Hedge Fund Industry Group (HFIG) serving as head of HFIG which is responsible for strategic and advisory services for alternative asset managers and was named managing director in 2000 and partner in 2002.  Mr, Wietschner also served as co-head of the US convertibles desk and ran relative value sales and trading in 2000.  He retired from Goldman Sachs in 2012.  Prior to his tenure at Goldman Sachs, Mr. Wietschner practiced law for three years at the firm of Weil, Gotshal & Manges.  Active in many civic duties, Howard Wietschner serves as a board member of RIETS at Yeshiva University. 

CONTACT: Jeremy Brown , 240-514-2002, jbrown@rapidadvance.com

SOURCE RapidAdvance

RELATED LINKS
http://www.rapidadvance.com

By Richard Leong

NEW YORK (Reuters) – Wall Street stocks rose to record highs on Tuesday on hopes steady U.S. growth will extend their stellar run, while the strengthening dollar curbed the appetite for oil and gold.

U.S. equities have risen the past three weeks, racking up a 14 percent gain so far this year on some better-than-expected company earnings and the Federal Reserve’s ultra-easy monetary policy to support the economic recovery.

Less worried investors resumed purchases of stocks and other higher-return assets and reduced their holdings of safe-haven U.S. and German government bonds. The rise in global interest rates was mitigated by a weaker-than-expected report on German investor sentiment due to the poor outlook on the region’s economy.

“People realize the world is not melting down. Growth isn’t surging either, but it’s growth and the market is adapting to that,” said Peter Jankovskis, co-chief investment officer at OakBrook Investments LLC in Lisle, Illinois.

While worries about another spring “swoon” might have receded after the strong April U.S. payrolls data, the outlook on worldwide economic growth remained lukewarm.

Mohamed El-Erian, chief executive of PIMCO, which manages the world’s largest bond mutual fund, said in the firm’s outlook for the next three to five years that U.S. economic growth will not be “much greater” than 2 percent, while China will maintain growth in the range of 6 to 7.5 percent.

This modest view on the global economy, together with more energy output in North America, led the International Energy Agency to project a “more comfortable” energy picture over the next five years.

In early afternoon trading, the Dow Jones industrial average was up 90.56 points, or 0.60 percent, at 15,182.23. The Standard & Poor’s 500 Index was up 14.04 points, or 0.86 percent, at 1,647.81. The Nasdaq Composite Index was up 22.79 points, or 0.66 percent, at 3,461.58.

The FTSEurofirst 300 index on Europe’s top shares provisionally closed up 0.45 percent at 1,236.62, erasing early losses on the disappointing data from Germany’s ZEW think tank report. It rose for a fourth straight session, just short of the near five-year intraday high set on Monday.

U.S. and European equity gains lifted the MSCI global index to 375.81, up 0.43 percent on the day. They more than offset a 0.16 percent drop of Toyko’s Nikkei index.

As the Dow and S&P 500 index posted record intraday peaks, the dollar held steady versus a basket of major currencies, hovering near a five-week high. The greenback retested its 4-1/2-year high against the yen and last traded at 102.05 yen, up 0.2 percent on the day.

The dollar’s rise was capped by a steady euro, which was last at $1.2977.

The dollar index <.dxy> was last up 0.1 percent at 83.377.

“We think against the yen the dollar can go higher, helped by rising U.S. yields,” said Marcus Hettinger, head of global forex research at Credit Suisse in London.

The yield on benchmark U.S. 10-year Treasury notes rose to a seven-week high. The U.S. 10-year yield was last 1.943 percent, up over 2 basis points on the day, while German Bund futures were down 27 basis points at 144.62.

U.S. and German yields have risen in the wake of the Bank of Japan’s $1.4 trillion stimulus program, as investors pared their safehaven holdings of these debt instruments. This bold asset purchase scheme also caused some rethinking about global growth and interest rates among the world’s major economies.

Graphics:

U.S. export/import prices http://link.reuters.com/peg64t

U.S. retail sales http://link.reuters.com/fak93t

Latest economic indicators http://link.reuters.com/vaf35t

Euro zone crisis http://r.reuters.com/hyb65p

The dollar’s run-up exerted further selling on gold and oil prices. A stronger dollar makes dollar-denominated commodities such as oil more expensive for holders of other currencies.

Brent crude oil edged down toward $102 per barrel as traders were caught between hopes of a revival in global economic growth and evidence of ample supply stocks from IEA, the West’s energy watchdog.

Spot gold prices were on track for a fourth consecutive losing session as an earlier rebound faded with a rise in the dollar. The bullion was last 0.33 percent lower at 1,425.60 an ounce.

(Additional reporting by Chuck Mikolajczak and Julie Haviv in New York and Marc Jones in London; Editing by Dan Grebler and Chizu Nomiyama)

DENVER, May 13, 2013 /PRNewswire/ — Gasco Energy, Inc. (OTCQB: GSXN) (“Gasco” or the “Company”) today announced that it is continuing to evaluate its strategic alternatives for the Company’s assets, including a sale of the Company or all of its assets.  Stephens, Inc., Gasco’s financial advisor, has been assisting and continues to assist in the evaluation process, which is intended to maximize the value of Gasco’s assets.

As previously disclosed, since mid-year 2012, the Company has been seeking to restructure or refinance its debt or to sell some or all of its assets to improve its liquidity position. While these efforts have not been successful to date, Gasco is continuing to evaluate and pursue various options to address the Company’s liquidity constraints.

It is possible these strategic alternatives will require the Company to make a pre-package, pre-arranged or other type of filing for protection under Chapter 11 of the U.S. Bankruptcy Code.  In addition, because the Company has not made the required interest payment on its outstanding 5.50% convertible senior notes due 2015 (the “notes”) within 30 days after the date when due, an event of default has occurred under the indenture governing the notes and an involuntary petition for bankruptcy may be filed against Gasco. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

The Company cannot provide any assurances that it will be successful in accomplishing any of these plans or that any of these actions can be effected on a timely basis, on satisfactory terms or maintained once initiated. Furthermore, the Company’s cash management strategies may limit its ability to successfully execute its strategic alternatives.

The strategic review process has not been initiated as a result of any particular offer.  The Company does not intend to disclose developments with respect to this process except to the extent required under applicable securities regulations.

About Gasco Energy

Denver-based Gasco Energy, Inc. is a natural gas and petroleum exploitation, development and production company engaged in locating and developing hydrocarbon resources, primarily in the Rocky Mountain region and in California‘s San Joaquin Basin.  Gasco’s principal business is the acquisition of leasehold interests in petroleum and natural gas rights, either directly or indirectly, and the exploitation and development of properties subject to these leases.  Gasco focuses its drilling efforts in the Riverbend Project located in the Uinta Basin of northeastern Utah, targeting the oil-bearing Green River Formation and the natural gas-prone Wasatch, Mesaverde, Blackhawk, Mancos, Dakota and Morrison formations.  To learn more, visit http://www.gascoenergy.com.

Not an Offer

This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities or other assets.

Forward-Looking Statements

Certain statements set forth in this press release relate to management’s future plans, objectives and expectations.  Such statements are forward-looking within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.  All statements other than statements of historical facts included in this press release, including, without limitation, statements regarding the Company’s ability to pursue and execute strategic alternatives, are forward-looking statements. These statements express, or are based on, management’s current expectations and forecasts about future events. In addition, forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “will,” “should,” “would,” “could,” “expect,” “intend,” “project,” “estimate,” “anticipate,” “plan,” “believe,” “foresee,” or “continue” or the negative thereof or similar terminology. 

Although any forward-looking statements contained in this news release or otherwise expressed by the Company are to the knowledge and in the judgment of management, believed to be reasonable when made, there can be no assurances that any of these expectations will prove correct or that any of the actions that are planned will be taken.  Forward-looking statements involve and may be affected by inaccurate assumptions, and known and unknown risks and uncertainties (some of which are beyond the Company’s control), that may cause the Company’s actual actions, performance and financial results in future periods to differ materially from any expectation, projection, estimate or forecasted result.  The key factors that may cause actual actions or results to vary from those the Company expects are described in (1) Part I, “Item 1A–Risk Factors,” “Item 7–Management’s Discussion and Analysis of Financial Condition and Results of Operations,” “Item 7A–Quantitative and Qualitative Disclosure About Market Risk” and elsewhere in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012 and (2) the Company’s other reports and registration statements filed from time to time with the SEC.

Any of these factors could cause the Company’s actual actions or results to differ materially from those implied by these or any other forward-looking statements made by the Company.  The Company cannot assure you that its future actions and results will meet its expectations.  When you consider these forward-looking statements, you should keep in mind these factors.  All subsequent written and oral forward-looking statements attributable to the Company are expressly qualified in their entirety by these factors.  The Company’s forward-looking statements speak only as of the date made.  The Company assumes no duty to update or revise its forward-looking statements based on changes in internal estimates or expectations or otherwise.

SOURCE Gasco Energy, Inc.

RELATED LINKS
http://www.gascoenergy.com

MEXICO CITY (Reuters) – Mexico‘s new government has promised a comprehensive review of its tax system, to be announced in the second half of 2013 along with an overhaul of energy policy.

Here are some facts about the country’s tax system:

* Mexico received 1.3 trillion Mexican pesos ($107.5 billion) in net tax revenue in 2012, equivalent to 8.5 percent of gross domestic product (GDP) and split roughly 60/40 between income and sales taxes.

* Mexico’s highest individual tax rate of 30 percent kicks in at an annual salary equivalent to $30,288, one of the lowest thresholds in the world. That compares with $388,350 in the United States, $394,380 in Spain and $329,611 in Germany, according to a 2012 survey by accountancy firm KPMG.

* The United Nations calculates Mexico earns proportionally less revenue for each percentage point of value-added tax (VAT), nominally 16 percent, than any other country in Latin America, reflecting Mexico’s flourishing informal economy as well as tax breaks.

* Mexico’s corporate tax rate, at 30 percent, is lower than Brazil’s and Argentina’s but still high for a developing nation. Chile and Turkey charge 20 percent and Colombia 25 percent.

* The World Bank’s Ease of Doing Business survey calculates it takes a medium-sized business 337 hours per year to prepare, file and pay taxes, compared to 291 hours in Chile. Overall, Mexico ranks 107th of 185 countries in the “paying taxes” sub-index.

* Mexico charges no withholding tax on dividends. There is also no inheritance tax, no capital gains tax or stamp duty, and individuals often pay no tax on profits made from selling shares in listed companies.

* Past reforms included hiking the VAT from 10 to 15 percent in 1995, causing an uproar that some blame for the Institutional Revolutionary Party‘s (PRI) 2000 election loss. The conservative National Action Party (PAN) government that then took power tried to scrap the zero VAT on food and medicine, but was blocked by the PRI, which regained power last year.

* Across the 34-nation Organization for Economic Co-operation and Development, corporate income tax raises revenues equivalent to around 3 percent of GDP, or about 10 percent of total tax revenues. Mexico is one of only two OECD countries that publish no breakdown of the source of income tax.

* Raising the tax take by 6-8 percentage points of GDP is not unprecedented: Turkey increased its tax revenue by 7 percentage points between 1995 and 2000 and Spain increased its revenue by 8 percentage points between 1970 and 1981, OECD statistics show.

($1 = 12.0933 Mexican pesos)

(Compiled by Krista Hughes; Editing by Kieran Murray and Christopher Wilson)

HALIFAX, May 9, 2013 /CNW/ – Chorus Aviation Inc. (“Chorus“) (TSX: CHR.B CHR.A CHR.DB) today issued its first quarter 2013 earnings, and is revising its quarterly dividend to $0.075 per share from $0.15 per share.

Q1 2013 HIGHLIGHTS

• Operating revenue of $416.3 million.
• EBITDA¹ of $34.2 million.
• Operating income of $20.8 million.
• Net income of $9.2 million, or $0.07 per basic share.
• Adjusted net income¹ of $14.7 million, or $0.12 per basic share.
• Billable Block Hours of 97, 202.

“The first quarter delivered solid results; however, two items negatively impacted the bottom line,” said Joseph Randell , President and Chief Executive Officer, Chorus. ”In our continued efforts to improve operational efficiency and to reduce costs, we enacted a voluntary separation program for our more senior pilots and maintenance employees.  The severance cost of $5.7 million will provide a return within the next two years as ongoing operational costs are reduced.  This expense, when factored with the unrealized foreign exchange loss of $5.6 million into the adjusted net income for the quarter, increases earnings per share to the current market consensus of $0.17 per basic share.”

DIVIDEND

Chorus and Air Canada are involved in an ongoing complex arbitration process regarding the 2009 Benchmark.  Chorus remains confident in its position that the Controllable Mark-up of 12.5% in the Capacity Purchase Agreement (‘CPA’) should not change as a result of the arbitration.  Accordingly, no amounts have been recorded in the accounts of Chorus in 2010, 2011, 2012 or 2013 related to the Air Canada claim.  Management has determined that it is not probable that the Air Canada claim will be successful, and it is not practicable to determine an estimate of the possible financial effect, if any, with sufficient reliability.

However, in any litigation process there is always some risk of an adverse outcome. This risk combined with the extended duration of the arbitration has created the risk of a material retroactive amount owing to Air Canada for the period commencing January 1, 2010 should Air Canada succeed in its claim for a material fleet age adjustment in its favour.  The longer this process continues without resolution, the larger the amount of any potential retroactive payment.

In addition, Chorus’ $80.2 million convertible debentures come due in December 2014. Chorus anticipates that an increase in liquidity will provide increased flexibility in addressing the maturity of those debentures, in the context of challenging conditions for the airline industry and global economic uncertainty. Those debentures, issued in November 2009, were used to pay part of the term debt of $115.0 million which was established at the time of the Chorus initial public offering in 2006 and matured in February 2010.  As a result, Chorus believes that strengthening its cash position during this period is prudent.

Chorus will continue to manage its financial leverage ratios, such as its adjusted net debt to equity ratio which has increased as a result of the financing of its new Q400 aircraft fleet. Such continued accretive investment in fleet renewal may occur either through refurbishment of the classic Dash 8-100 and Dash 8-300 series aircraft or further investment in new generation aircraft.

In consideration of these factors, Chorus has reduced its quarterly dividend from $0.15 per share to $0.075 per share going forward. This will enable Chorus to retain additional cash of $9.3 million per quarter.

While Chorus has current cash available to pay the dividend at the previous rate, the Board of Directors has determined that, given the factors discussed above, it is prudent and advisable to conserve Chorus’ financial resources.

“We have, and continue to prudently manage our financial resources,” continued Mr. Randell.  “The regional airline industry is changing dramatically both here and south of the border. Competition is increasing significantly. We must continue in our efforts to reduce costs, strengthen the fundamentals of our business, and improve our financial position to ensure we have the flexibility required to effectively respond and compete in our ever-changing markets.”

The Board of Directors will continue to assess the dividend payment on an ongoing basis. 

Financial Performance -First Quarter 2013 Compared to First Quarter 2012

Operating revenue decreased from $437.1 million to $416.3 million, representing a decrease of $20.8 million or 4.8%.  Passenger revenue, excluding pass-through costs, decreased by $6.4 million or 2.5% primarily as a result of no activity in the quarter for Thomas Cook ; offset by rate increases made pursuant to the CPA with Air Canada, an increase in Billable Block Hours of 0.8%, a $0.2 million increase in incentives earned under the CPA, and a higher US dollar exchange rate. Pass-through costs decreased from $176.7 million to $162.0 million; a decrease of $14.7 million or 8.3%, which included a decrease of $1.8 million related to fuel costs. Other revenue increased by $0.2 million.

Operating expenses decreased from $407.4 million to $395.5 million, a decrease of $12.0 million or 2.9%.  Controllable Costs increased by $2.7 million, or 1.2%; offset by a decrease in pass-through costs of $14.7 million.

Salaries, wages and benefits increased by $3.1 million primarily as a result of voluntary employee severance costs related to flight crew and maintenance employees, wage and scale increases under new collective agreements, and increased pension expense resulting from a revised actuarial valuation; offset by a reduction in the number of full time equivalent employees and higher capitalized salaries and wages related to major maintenance overhauls.

Depreciation and amortization expense increased by $0.5 million, primarily related to the purchase of Q400 aircraft, increased capital expenditures on aircraft rotable parts and other equipment, and increased major maintenance overhauls; offset by certain assets having reached full amortization and a change in estimate related to the residual value of the Dash 8-100 and 300 aircraft.

Aircraft maintenance expense decreased by $2.4 million as a result of a $4.6 million reduction related to no activity for Thomas Cook ; offset by an increase in engine maintenance activity due to engine charges for the CRJ705 and Dash 8 – 300 aircraft of $1.2 million, increased other maintenance costs of $0.5 million and an increase in the US-dollar exchange rate on certain material purchases of $0.5 million.

Aircraft rent decreased by $5.4 million primarily as a result of no expense in the quarter for Thomas Cook aircraft and the return of CRJ aircraft.

Other expenses increased by $1.3 million primarily due to increased professional fees, increased travel and training costs associated with the Q400 aircraft and increased general overhead expenses.

Non-operating expenses increased by $9.0 million.  This change was mainly attributable to an increase in foreign exchange of $8.8 million (of which $8.9 million was related to an increase in unrealized foreign exchange loss on long-term debt and finance leases) and increased interest expense related to Q400 aircraft financing of $1.0 million; offset by $0.8 million in other income related to a government grant.

EBITDA¹ was $34.2 million compared to $42.6 million in 2012, a decrease of $8.4 million or 19.6%, producing an EBITDA margin of 8.2%. Standardized Free Cash Flow was negative $110.9 million, impacted primarily by the continuing growth capital expenditures related to the purchase of Q400 aircraft.

Operating income of $20.8 million was down $8.8 million or 29.7% over first quarter 2012 from $29.6 million.

Net income for the first quarter of 2013 was $9.2 million or $0.07 per basic share, a decrease of $17.0 million or 64.9% from $26.2 million or $0.21 per basic share. On an adjusted basis, net income was $14.7 million or $0.12 per basic share, a decrease of 35.4% or $0.06 per basic share from $22.8 million or $0.18 per basic share.

Chorus Aviation Inc.’s unaudited interim condensed consolidated financial statements for the period ended March 31, 2013 and accompanying Management’s Discussion and Analysis (MD&A) are available at www.chorusaviation.ca and at www.sedar.com.  A copy may also be obtained on request by contacting Investor Relations at:  investorsinfo@chorusaviation.ca or (902) 873-5094.

Investor Conference Call / Audio Webcast

Chorus will hold an analyst call at 11:00 a.m. ET on Friday, May 10, 2013 to discuss the first quarter 2013 results.  The call may be accessed by dialing 1-888-231-8191.  The call will be simultaneously audio webcast via: www.newswire.ca/en/webcast/detail/1097399/1195627 or in the Investor Relations section at www.chorusaviation.ca. This is a listen-in only audio webcast.  Media Player or Real Player is required to listen to the broadcast; please download well in advance of the call.

The conference call webcast will be archived on Chorus’ Investor Relations website at www.chorusaviation.ca.  A playback of the call can also be accessed until midnight ET, May 17, 2013, by dialing (416) 849-0833 or toll-free 1- 855-859-2056, and passcode 34548114# (pound key).

¹ Non-GAAP Financial Measures

EBITDA
EBITDA (earnings before interest, taxes, depreciation, amortization and obsolescence) is a non-GAAP financial measure commonly used throughout all industries to view operating results before interest expense, interest income, depreciation and amortization, gains and losses on property and equipment and other non-operating income and expenses.  Management believes EBITDA assists investors in comparing Chorus’ performance on a consistent basis without regard to depreciation and amortization, which are non-cash in nature and can vary significantly depending on accounting methods and non-operating factors such as historical cost.  EBITDA should not be used as an exclusive measure of cash flow because it does not account for the impact on working capital growth, capital expenditures, debt repayments and other sources and uses of cash, which are disclosed in the statement of cash flows which form part of the financial statements.

STANDARDIZED FREE CASH FLOW
Standardized Free Cash Flow is defined as cash flows from operating activities, as reported in accordance with GAAP, less total capital expenditures and dividends.

ADJUSTED NET INCOME
Adjusted net income and adjusted earnings per share are calculated by adjusting net income by the amount of any unrealized foreign exchange gains and losses on long-term debt and finance leases.  During the first quarter of 2013, Chorus recorded an $5.6 million loss in unrealized foreign exchange on long-term debt and finance leases.  These adjustments more clearly reflect earnings from an operating perspective.

Caution regarding forward-looking information

This news release should be read in conjunction with Chorus’ unaudited interim condensed consolidated financial statements for the period ended March 31, 2013 and MD&A dated May 9, 2013 filed with Canadian Securities regulatory authorities (available at www.sedar.com).

Certain statements in this news release may contain statements which are forward-looking. These forward-looking statements are identified by the use of terms and phrases such as “anticipate”, “believe”, “could”, “estimate”, “expect”, “intend”, “may”, “plan”, “predict”, “project”, “will”, “would”, and similar terms and phrases, including references to assumptions. Such statements may involve but are not limited to comments with respect to strategies, expectations, planned operations or future actions.

Forward-looking statements relate to analyses and other information that are based on forecasts of future results, estimates of amounts not yet determinable and other uncertain events. Forward-looking statements, by their nature, are based on assumptions, including those described below, and are subject to important risks and uncertainties. Any forecasts or forward-looking predictions or statements cannot be relied upon due to, amongst other things, changing external events and general uncertainties of the business. Such statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements to differ materially from those expressed in the forward-looking statements. Results indicated in forward-looking statements may differ materially from actual results for a number of reasons, including without limitation, risks relating to Chorus’ relationship with Air Canada, risks relating to the airline industry, energy prices, general industry, market, credit, and economic conditions, competition, insurance issues and costs, supply issues, war, terrorist attacks, epidemic diseases, acts of God, changes in demand due to the seasonal nature of the business, the ability to reduce operating costs and employee counts, secure financing, employee relations, labour negotiations or disputes, restructuring, pension issues, currency exchange and interest rates, leverage and restructure covenants in future indebtedness, dilution of Chorus shareholders, uncertainty of dividend payments, managing growth, changes in laws, adverse regulatory developments or proceedings, pending and future litigation and actions by third parties. The forward-looking statements contained in this discussion represent Chorus’ expectations as of May 9, 2013, and are subject to change after such date. However, Chorus disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required under applicable securities regulations.

About Chorus Aviation Inc.

Chorus Aviation Inc. (“Chorus”) was incorporated on September 27, 2010 and is a dividend-paying holding company which owns Jazz Aviation LP, and Chorus Leasing III Inc.

Chorus is traded on the Toronto Stock Exchange under the trading symbols of CHR.A, CHR.B and CHR.DB.

For more information, visit www.chorusaviation.ca

About Jazz Aviation LP

Jazz Aviation LP has a strong history in Canadian aviation with its roots going back to the 1930s. Jazz is wholly owned by Chorus Aviation Inc. and continues to generate some of the strongest operational and financial results in the North American aviation industry.

There are two airline divisions operated by Jazz Aviation LP:  Air Canada Express and Jazz.

Air Canada Express:  Under a capacity purchase agreement with Air Canada, Jazz provides service to and from lower-density markets as well as higher-density markets at off-peak times throughout Canada and to and from certain destinations in the United States. In the first quarter of 2013, Jazz operated scheduled passenger service on behalf of Air Canada with approximately 789 departures per weekday to 82 destinations in Canada and in the United States with a fleet of Canadian-made Bombardier aircraft.

Jazz:  Under the Jazz brand, the airline offers charters throughout North America with a dedicated fleet of five Bombardier aircraft for corporate clients, governments, special interest groups and individuals seeking more convenience.  Jazz also has the ability to offer airline operators services such as ground handling, dispatching, flight load planning, training and consulting.

For more information, visit www.flyjazz.ca.

SOURCE CHORUS AVIATION INC.