Bristow Group Inc. Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

VARIABLE INTEREST ENTITIES

VARIABLE INTEREST ENTITIES

6 Months Ended

Jun. 30, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Aeróleo. In certain jurisdictions, local statutory requirements limit the amount of foreign ownership in aviation companies. To satisfy Brazilian ownership requirements, the Company acquired a 50% economic and 20% voting interest in Aeróleo in 2011. As a result of liquidity issues experienced by Aeróleo, it is unable to adequately finance its activities without additional financial support from the Company, making it a VIE. On October 1, 2015, the Company’s partner in Aeróleo transfered its 50% economic and 80% voting interest in Aeróleo to a third party. Following this transaction, the Company has the ability to direct the activities that most significantly affect Aeróleo’s financial performance, making the Company the primary beneficiary.

The condensed consolidated balance sheets at June 30, 2016 and December 31, 2015 include assets of Aeróleo totaling $15.9 million and $17.9 million, respectively. In addition, the condensed consolidated balance sheets at June 30, 2016 and December 31, 2015 include liabilities of $9.3 million and $15.9 million, respectively. The table below represents the assets of Aeróleo which have restrictions on the ability to be distributed to the Company and the liabilities of Aeróleo for which creditors do not have recourse to the Company at June 30, 2016 and December 31, 2015 (in thousands):



	June 30, 2016		December 31, 2015
Cash	$	1,090	$	3,192
Receivables - trade (net of allowance for doubtful accounts of $834 and $1,418 in 2016 and 2015, respectively)	7,746		8,240
Receivables - other	731		179
Inventories, net	726		2,240
Other current assets	128		—
Property and equipment, net	768		696
Intangible assets	3		4
Other assets	4,723		3,367
Accounts payable and accrued expenses	952		1,709
Accrued wages and benefits	2,633		2,108
Accrued other taxes	1,210		1,701
Accrued contingencies	1,280		2,410
Current portion of long-term debt	—		1,524
Other current liabilities	8		450
Long-term debt	—		5,259
Other liabilities	3,171		729

The condensed consolidated statements of operations for the three and six months ended June 30, 2016 include operating revenues of $6.5 million and $14.0 million, respectively, and net loss of $1.4 million and $2.1 million, respectively, as a result of the consolidation of Aeróleo, including the effects of intercompany eliminations. The table below represents the Company’s pro forma results of operations for the three and six months ended June 30, 2015 assuming the consolidation of Aeróleo began on January 1, 2015 (in thousands):



	Historical Results		Pro Forma Adjustments			Pro Forma Results
Three Months Ended June 30, 2015
Operating revenues	$	70,738	$	11,266		$	82,004
Net income attributable to Era Group Inc.	11,333		(2,410		)	8,923

Six Months Ended June 30, 2015
Operating revenues	$	138,153	$	22,591		$	160,744
Net income attributable to Era Group Inc.	11,291		(4,033		)	7,258