VARIABLE INTEREST ENTITIES AND EQUITY INVESTMENTS AND ADVANCES |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity Method Investments and Joint Ventures [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| VARIABLE INTEREST ENTITIES AND EQUITY INVESTMENTS AND ADVANCES |
VARIABLE INTEREST ENTITIES AND EQUITY INVESTMENTS AND ADVANCES
VIEs
Aeróleo. On July 1, 2011, the Company acquired a 50% economic interest and a 20% voting interest in Aeróleo, a Brazilian entity that provides helicopter transport services to the Brazilian offshore oil and gas industry, for $4.8 million in cash. The Company and its original partner also each loaned Aeróleo $6.0 million at an interest rate of 6.0% per annum. On October 1, 2015, the Company’s original partner completed a transfer of its 50% economic and 80% voting interest in Aeróleo to a third party. In connection with the transfer, the Company entered into a shareholders’ agreement with its new partner that required supermajority shareholder and/or board approval of specified, significant actions, and a put/call option arrangement which gave the Company the right to purchase at any time, and the new partner the right to put to the Company after two years, the new partner’s interest in Aeróleo. The Company has the ability to direct activities that most significantly affect Aeróleo’s financial performance, making the Company the primary beneficiary. As a result, the Company concluded that Aeróleo was a variable interest entity and therefore should be consolidated into the Company’s financial statements.
The Company’s consolidated balance sheets at December 31, 2018 included assets of Aeróleo totaling $11.9 million and liabilities of $4.5 million. The creditors for such liabilities do not have recourse to Era Group or its subsidiaries other than Aeróleo.
In the fourth quarter of 2019, the Company exercised its contractual call option to purchase the remaining 50% economic interest and 80% voting interest from the Company’s partner in Aeróleo, making it a wholly-owned subsidiary as of December 31, 2019. The amount paid to effect this purchase was not material.
Joint Ventures
Dart. Era DHS LLC, a wholly-owned subsidiary of the Company, acquired 49% of the capital stock of Dart Helicopter Services LLC (“Dart Helicopters”), a sales, marketing and parts manufacturing organization based in North America that engineers and manufactures after-market parts and equipment for sale to helicopter manufacturers and operators. During 2009, the Company provided a $0.3 million loan to Dart Helicopters with a maturity of June 2012 at an annual interest rate of 5.0%, which was payable quarterly with principal due at maturity. On February 28, 2011, the Company made an additional investment of $5.0 million in Dart Helicopters, and on July 31, 2011, contributed its ownership in Dart Helicopters to Dart in exchange for a 50% economic and voting interest in Dart and a note receivable of $5.1 million. The note receivable had a balance of $2.3 million at December 31, 2018 and was paid in full in 2019.
During the year ended December 31, 2019, the Company in conjunction with its 50% joint venture partner entered into an agreement to sell Dart. The transaction closed on April 1, 2019, for gross proceeds of $38.0 million, including payment of the note receivable in March 2019, and net gains of $10.9 million.
In the first quarter of 2019, the Company purchased $0.6 million of products and services from Dart, while it was still a joint venture. During each of the years ended December 31, 2018 and 2017, the Company purchased $2.0 million of products and services from Dart. Purchases from Dart are included in operating expenses on the consolidated statements of income, and the note receivable was included in equity investments and advances on the consolidated balance sheets.
As of December 31, 2018, equity investments and advances in Dart was $27.1 million. During the year ended December 31, 2018, the Company received dividends of $1.0 million from Dart.
Era Training Center. Era Training Center LLC (“Era Training Center”) previously operated flight training devices and provided training services to the Company and third-party customers. During the years ended December 31, 2018 and 2017, the Company provided helicopter, management and other services to the joint venture totaling $0.1 million and $0.2 million, respectively, and incurred $0.2 million and $0.5 million, respectively, for simulator fees.
During the year ended December 31, 2018, the Company entered into an agreement to dissolve Era Training Center in exchange for the settlement of an existing promissory note with an outstanding principal amount of $3.6 million by acquiring the assets of the joint venture. The agreement included the sale of three simulators to the Company for $2.9 million, partial ownership in a fourth simulator for $0.4 million and a note receivable from the Company’s partner in Era Training Center for $0.4 million.
Combined Condensed Financial Statements
Summarized financial information for the Company’s equity investments and advances in Dart as of December 31, 2018 and for the years ended December 31, 2018 and 2017 was as follows (in thousands):
Summarized financial information for the Company’s equity investments and advances in all other investees for the years ended December 31, 2018 and 2017 was as follows (in thousands):
As of December 31, 2018, cumulative undistributed net earnings of equity investees included in the Company’s consolidated retained earnings was $6.0 million.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||