Quarterly report pursuant to Section 13 or 15(d)

STOCKHOLDERS' INVESTMENT, EARNINGS PER SHARE AND ACCUMULATED OTHER COMPREHENSIVE INCOME

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STOCKHOLDERS' INVESTMENT, EARNINGS PER SHARE AND ACCUMULATED OTHER COMPREHENSIVE INCOME
 3 Months Ended
Jun. 30, 2020
Equity [Abstract]  
STOCKHOLDERS' INVESTMENT, EARNINGS PER SHARE AND ACCUMULATED OTHER COMPREHENSIVE INCOME STOCKHOLDERS’ INVESTMENT, EARNINGS PER SHARE AND ACCUMULATED OTHER COMPREHENSIVE INCOME
Stockholders’ Investment, Common Stock and Preferred Stock
As of June 30, 2020 (Successor), there were 30,288,972 shares of Combined Company Common Stock and no shares of the Combined Company’s preferred stock issued and outstanding.
Claims under the Bankruptcy Court approved debtor in possession (DIP) financing Old Bristow obtained while in bankruptcy were settled with the issuance of new common stock (the “Old Bristow Common Stock”) and (the “Old Bristow Preferred Stock”), both at a par of $0.0001, pursuant to the Amended Plan. In connection with the Merger, the Old Bristow Preferred Stock was converted into Old Bristow Common Stock, and then all Old Bristow Common Stock was converted into the Combined Company Common Stock.
Because the Old Bristow Preferred Stock could be redeemed in certain circumstances outside of the sole control of Old Bristow (including at the option of the holder), but was not mandatorily redeemable, the Old Bristow Preferred Stock was classified as mezzanine equity and initially recognized at fair value of $618.9 million as of October 31, 2019 (Successor). This amount was reduced by the fair value of the bifurcated derivative liability as of October 31, 2019 (Successor) of $470.3 million, resulting in an initial value of $148.6 million. The difference between (a) the carrying value of the embedded derivative of $270.8 million plus the carrying value of the Preferred Stock Host of $148.6 million and (b) the fair value of the Old Bristow Common Stock of $270.7 million paid as consideration for the Old Bristow Preferred Stock was recognized in retained earnings because the fair value of the Old Bristow Common Stock was less than the combined carrying values of the Old Bristow Preferred Stock host and embedded derivative.
Prior to the Merger, there were 11,092,845 shares of Old Bristow Common Stock and 6,725,798 shares of Old Bristow Preferred Stock issued and outstanding. As described in Note 7 to the condensed consolidated financial statements, Old Bristow repurchased certain shares of Old Bristow Common Stock and shares of Old Bristow Preferred Stock immediately prior to the conversion of the Old Bristow Preferred Stock into Old Bristow Common Stock. The repurchase was accounted for in the same manner as the share conversion and included in the calculation described above. The Old Bristow Preferred Stock was converted into Old Bristow Common Stock at a rate of 5.179562 shares of Old Bristow Common Stock for each share of Old Bristow Preferred Stock.
The Old Bristow Common Stock was then subsequently exchanged for the Combined Company Common Stock, resulting in a total of 24,195,693 shares of Combined Company Common Stock issued to legacy Old Bristow stockholders. This resulted in a total of 30,882,471 shares of Combined Company Common Stock issued and outstanding immediately after consummation of the Merger. Upon the closing of the Merger, 217,899 shares of restricted stock awards and 145,263 stock options to purchase common stock for certain employees, related to Old Bristow employees, were canceled as a result of separation from the Combined Company. Upon the closing of the Merger, vesting of 145,604 shares of restricted stock awards, related to the Combined Company’s employees were also accelerated.
Earnings per Share
Basic earnings per common share is computed by dividing income available to common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per common share excludes options to purchase common shares and restricted stock awards, which were outstanding during the period but were anti-dilutive, as follows (in thousands, except share and per shares amounts):
 
 
Successor
 
 
Three Months Ended  June 30, 2020
Income (loss):
 
 
Net income attributable to Bristow Group Inc.
 
$
71,477

Less: PIK dividends (1)
 
(12,039
)
Plus: Deemed contribution from conversion of preferred stock
 
144,986

Income available to common stockholders – basic
 
$
204,424

Less: Preferred stock adjustments
 
(3,377
)
Income available to common stockholders – diluted
 
$
201,047

Shares:
 
 
Weighted average number of common shares outstanding – basic
 
11,102,611

Net effect of dilutive preferred stock 
 
27,885,917

Weighted average number of common shares outstanding – diluted(2)
 
38,988,528

 
 
 
Earnings per common share - basic
 
$
18.41

Earnings per common share - diluted
 
$
5.16

___________________________
(1) 
See “Stockholders’ Investment, Common Stock and Preferred Stock” above for further details on PIK dividends.
(2) 
Excludes weighted average common shares of 1,676,354 for the three months ended June 30, 2020 (Successor), for certain share awards as the effect of their inclusion would have been antidilutive.
The following table shows the computation of basic and diluted earnings per share:
 
 
Predecessor
 
 
Three Months Ended  June 30, 2019
Loss (in thousands):
 
 
Loss available to common stockholders – basic
 
$
(169,246
)
Loss available to common stockholders – diluted
 
$
(169,246
)
Shares:
 
 
Weighted average number of common shares outstanding – basic
 
35,918,916

Net effect of dilutive stock options and restricted stock awards based on the treasury stock method
 
—

Weighted average number of common shares outstanding – diluted (3)(4)
 
35,918,916

 
 
 
Basic loss per common share
 
$
(4.71
)
Diluted loss per common share
 
$
(4.71
)
_____________________
(3) 
Excludes weighted average common shares of 3,881,347 for the three months ended June 30, 2019 (Predecessor), for certain share awards as the effect of their inclusion would have been antidilutive. The Old Bristow Preferred Stock is not included on an if-converted basis under diluted earnings per common share because the conversion of the shares would be anti-dilutive.
(4) 
Potentially dilutive shares issuable pursuant to the warrant transactions entered into concurrently with the issuance of the Combined Company’s 4½% Convertible Senior Notes (the “Warrant Transactions”) were not included in the computation of diluted income per share for the three months ended June 30, 2019, because to do so would have been anti-dilutive. For further details on the Warrant Transactions, see Note 5 in the fiscal year 2019 condensed consolidated financial statements.
Accumulated Other Comprehensive Loss
The following table sets forth the changes in the balances of each component of accumulated other comprehensive loss (in thousands):
 
 
Successor
 
 
Currency Translation Adjustments
 
Pension Liability Adjustments (1)
 
Unrealized gain (loss) on cash flow hedges (2)
 
Total
Balance as of March 31, 2020
 
$
(16,440
)
 
$
6,389

 
$
1,410

 
$
(8,641
)
Other comprehensive income before reclassification
 
3,159

 
—

 
(427
)
 
2,732

Reclassified from accumulated other comprehensive income
 
—

 
—

 
(454
)
 
(454
)
Net current period other comprehensive income
 
3,159

 
—

 
(881
)
 
2,278

Foreign exchange rate impact
 
53

 
(53
)
 
—

 
—

Balance as of June 30, 2020
 
$
(13,228
)
 
$
6,336

 
$
529

 
$
(6,363
)

___________________________ 
(1) 
Reclassification of amounts related to pension liability adjustments are included as a component of net periodic pension cost.
(2) 
Reclassification of amounts related to cash flow hedges were included as direct costs.