Bristow Group Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

LEASES

LEASES

12 Months Ended

Dec. 31, 2019

The Company leases land, hangars, buildings, fuel tanks and tower sites under operating lease agreements. The Company determines if an arrangement is a lease at inception, and many of these leases offer an option for renewal or extension. The adoption of ASC 842 allows the Company to retain its current classification of leases, and the optional practical expedience rule has allowed the use of the current-period adjustment method to recognize a cumulative-effect adjustment to the opening balance of retained earnings in the current period rather than the restatement of prior year lease amounts. The majority of the bases from which the Company operates are leased, with current remaining terms between one year and fifty-nine years. The lease expense on those contracts with initial terms of twelve months or less are recognized on a straight-line basis over the lease term and are not recorded on the balance sheet. The Company does not currently maintain any finance leases and has only operating lease agreements.

The Company’s maturity analysis of lease payments under operating leases that had initial terms in excess of one year as of December 31, 2018 was as follows (in thousands):



	Minimum Payments
2019	$	1,573
2020	1,530
2021	987
2022	562
2023	495
Years subsequent to 2023	7,952
Total future minimum lease payments	$	13,099

The Company’s maturity analysis of lease payments under operating leases that have initial terms in excess of one year as of December 31, 2019 was as follows (in thousands):



	Minimum Payments
2020	$	2,273
2021	1,801
2022	1,367
2023	1,314
2024	1,013
Years subsequent to 2024	8,370
Total future minimum lease payments	16,138
Less: imputed interest	6,550
Present value of lease liabilities	$	9,588

During the year ended December 31, 2019, the Company recognized $4.0 million of operating lease expense. Included in this amount was $1.5 million for contracts with remaining terms of less than one year for the year ended December 31, 2019.



Reported balances:
Other current liabilities	$	1,773
Long-term lease liabilities	7,815
Total operating lease liabilities	$	9,588

As of December 31, 2019, other information related to these leases was as follows:



Weighted average remaining lease term	16 years
Weighted average discount rate	6.11		%
Cash paid for amounts included in the measurement of lease liabilities during the year ended December 31, 2019 (in thousands)	$	2,296

The Company generates revenues as a lessor from its dry-leasing line of service that require a fixed monthly fee for the customer’s right to use the helicopter and, where applicable, additional charges as compensation for any support the Company may provide to the customer. Revenues from dry-leasing contracts are shown on the face of the statement of operations.

In 2018, the Company disposed of six H225 heavy helicopters through sales-type leases. During the year ended December 31, 2019, the Company recognized interest income on these leases of $1.7 million. During the year ended December 31, 2019, the Company completed the final sale of two of these helicopters and received cash proceeds of $5.0 million. As of December 31, 2019, the Company had remaining receivables of $13.5 million, all of which is due within a year. These amounts are included in other receivables on the consolidated balance sheet.