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

Quarterly report pursuant to Section 13 or 15(d)

GUARANTORS OF SECURITIES

GUARANTORS OF SECURITIES

9 Months Ended

Sep. 30, 2016

On December 7, 2012, Era Group issued the 7.750% Senior Notes. Era Group’s payment obligations under the 7.750% Senior Notes are jointly and severally guaranteed by all of its existing 100% owned U.S. subsidiaries that guarantee the Revolving Credit Facility and any future U.S. subsidiaries that guarantee the Revolving Credit Facility or other material indebtedness Era Group may incur in the future (the “Guarantors”). All the Guarantors currently guarantee the Revolving Credit Facility, and the guarantees of the Guarantors are full and unconditional and joint and several.

As a result of the agreement by these subsidiaries to guarantee the 7.750% Senior Notes, the Company is presenting the following condensed consolidating balance sheets and statements of operations, comprehensive income and cash flows for Era Group (“Parent”), the Guarantors and the Company’s other subsidiaries (“Non-guarantors”). These statements should be read in conjunction with the unaudited condensed consolidated financial statements of the Company. The supplemental condensed consolidating financial information has been prepared pursuant to the rules and regulations for condensed financial information and does not include all disclosures included in annual financial statements.

Supplemental Condensed Consolidating Balance Sheet as of September 30, 2016



	Parent			Guarantors			Non-guarantors			Eliminations			Consolidated
	(in thousands, except share data)
ASSETS
Current assets:
Cash and cash equivalents	$	28,692		$	1,602		$	1,850		$	—		$	32,144
Receivables:
Trade, net of allowance for doubtful accounts of $1,214	39			27,871			6,390			—			34,300
Other	—			5,362			1,128			—			6,490
Inventories, net	—			26,352			263			—			26,615
Prepaid expenses	439			1,231			129			—			1,799
Other current assets	190			—			—			—			190
Total current assets	29,360			62,418			9,760			—			101,538
Property and equipment	—			1,159,147			15,984			—			1,175,131
Accumulated depreciation	—			(345,877		)	(1,236		)	—			(347,113		)
Property and equipment, net	—			813,270			14,748			—			828,018
Equity investments and advances	—			29,595			—			—			29,595
Investments in consolidated subsidiaries	181,394			—			—			(181,394		)	—
Intangible assets	—			—			1,141			—			1,141
Deferred taxes	5,771			—			—			(5,771		)	—
Intercompany receivables	469,301			—			—			(469,301		)	—
Other assets	1,659			5,308			4,210			—			11,177
Total assets	$	687,485		$	910,591		$	29,859		$	(656,466	)	$	971,469
LIABILITIES, REDEEMABLE NONCONTROLLING INTREST AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses	$	139		$	7,207		$	1,786		$	—		$	9,132
Accrued wages and benefits	—			6,583			2,494			—			9,077
Accrued interest	3,363			—			—			—			3,363
Accrued income taxes	—			536			14			—			550
Accrued other taxes	30			1,109			1,172			—			2,311
Accrued contingencies	—			—			1,543			—			1,543
Current portion of long-term debt	—			1,524			15			—			1,539
Other current liabilities	647			1,789			34			—			2,470
Total current liabilities	4,179			18,748			7,058			—			29,985
Long-term debt	210,597			22,058			—			—			232,655
Deferred income taxes	—			232,510			678			(5,771		)	227,417
Intercompany payables	—			436,996			32,305			(469,301		)	—
Other liabilities	—			1,246			3,034			—			4,280
Total liabilities	214,776			711,558			43,075			(475,072		)	494,337
Redeemable noncontrolling interest	—			4			4,327			—			4,331
Equity:
Common stock, $0.01 par value, 60,000,000 shares authorized; 20,940,372 outstanding, exclusive of treasury shares	211			—			—			—			211
Additional paid-in capital	437,291			100,306			4,562			(104,868		)	437,291
Retained earnings	38,062			98,631			(22,105		)	(76,526		)	38,062
Treasury shares, at cost, 171,614 shares	(2,855		)	—			—			—			(2,855		)
Accumulated other comprehensive income, net of tax	—			92			—			—			92
Total equity	472,709			199,029			(17,543		)	(181,394		)	472,801
Total liabilities, redeemable noncontrolling interest and stockholders’ equity	$	687,485		$	910,591		$	29,859		$	(656,466	)	$	971,469

Supplemental Condensed Consolidating Balance Sheet as of December 31, 2015



	Parent			Guarantors			Non-guarantors			Eliminations			Consolidated
	(in thousands, except share data)
ASSETS
Current assets:
Cash and cash equivalents	$	7,565		$	3,334		$	3,471		$	—		$	14,370
Receivables:
Trade, net of allowance for doubtful accounts of $2,103	39			40,345			8,255			—			48,639
Tax receivables	6,013			72			—			—			6,085
Other	—			3,089			216			—			3,305
Inventories, net	—			25,557			2,437			—			27,994
Prepaid expenses	458			1,411			94			—			1,963
Other current assets	190			1			—			—			191
Total current assets	14,265			73,809			14,473			—			102,547
Property and equipment	—			1,159,441			16,468			—			1,175,909
Accumulated depreciation	—			(316,090		)	(603		)	—			(316,693		)
Net property and equipment	—			843,351			15,865			—			859,216
Equity investments and advances	—			28,898			—			—			28,898
Investments in consolidated subsidiaries	172,335			—			—			(172,335		)	—
Intangible assets	—			—			1,158			—			1,158
Deferred income taxes	3,823			—			—			(3,823		)	—
Intercompany receivables	515,255			—			—			(515,255		)	—
Other assets	2,166			6,999			3,367			—			12,532
Total assets	$	707,844		$	953,057		$	34,863		$	(691,413	)	$	1,004,351
LIABILITIES, REDEEMABLE NONCONTROLLING INTREST AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses	$	386		$	9,635		$	1,979		$	—		$	12,000
Accrued wages and benefits	—			6,875			2,137			—			9,012
Accrued interest	549			13			—			—			562
Current portion of long-term debt	—			1,663			1,615			—			3,278
Accrued other taxes	30			789			1,701			—			2,520
Accrued contingencies	—			—			2,410			—			2,410
Other current liabilities	534			1,311			455			—			2,300
Total current liabilities	1,499			20,286			10,297			—			32,082
Long-term debt	235,134			23,305			5,259			—			263,698
Deferred income taxes	—			232,994			677			(3,823		)	229,848
Intercompany payables	—			501,512			13,743			(515,255		)	—
Other liabilities	—			1,887			729			—			2,616
Total liabilities	236,633			779,984			30,705			(519,078		)	528,244
Redeemable noncontrolling interest	—			4			4,800			—			4,804
Equity:
Common stock, $0.01 par value, 60,000,000 shares authorized; 20,495,694 outstanding, exclusive of treasury shares	207			—			—			—			207
Additional paid-in capital	433,175			95,543			9,325			(104,868		)	433,175
Retained earnings	40,502			77,434			(9,967		)	(67,467		)	40,502
Treasury shares, at cost, 154,549 shares	(2,673		)	—			—			—			(2,673		)
Accumulated other comprehensive income, net of tax	—			92			—			—			92
Total equity	471,211			173,069			(642		)	(172,335		)	471,303
Total liabilities, redeemable noncontrolling interest and stockholders’ equity	$	707,844		$	953,057		$	34,863		$	(691,413	)	$	1,004,351

Supplemental Condensed Consolidating Statements of Operations for the Three Months Ended September 30, 2016



	Parent			Guarantors			Non-guarantors			Eliminations			Consolidated
	(in thousands)
Operating revenues	$	—		$	59,130		$	15,786		$	(9,910	)	$	65,006
Costs and expenses:
Operating	—			31,759			18,522			(9,910		)	40,371
Administrative and general	738			7,274			1,492			—			9,504
Depreciation	—			12,244			275			—			12,519
Total costs and expenses	738			51,277			20,289			(9,910		)	62,394
Gains on asset dispositions, net	—			2			(248		)	—			(246		)
Operating income (loss)	(738		)	7,855			(4,751		)	—			2,366
Other income (expense):
Interest income	24			116			326			—			466
Interest expense	(3,581		)	(387		)	(35		)	—			(4,003		)
Foreign currency gains (losses), net	28			82			(143		)	—			(33		)
Other, net	—			1			33			—			34
Total other income (expense)	(3,529		)	(188		)	181			—			(3,536		)
Income (loss) before income taxes and equity earnings	(4,267		)	7,667			(4,570		)	—			(1,170		)
Income tax expense (benefit)	(604		)	673			—			—			69
Income (loss) before equity earnings	(3,663		)	6,994			(4,570		)	—			(1,239		)
Equity earnings, net of tax	—			437			—			—			437
Equity in earnings (losses) of subsidiaries	3,103			—			—			(3,103		)	—
Net income (loss)	(560		)	7,431			(4,570		)	(3,103		)	(802		)
Net loss attributable to noncontrolling interest in subsidiary	—			—			242			—			242
Net income (loss) attributable to Era Group Inc.	$	(560	)	$	7,431		$	(4,328	)	$	(3,103	)	$	(560	)

Supplemental Condensed Consolidating Statements of Operations for the Three Months Ended September 30, 2015



	Parent			Guarantors			Non-guarantors			Eliminations			Consolidated
	(in thousands)
Operating revenues	$	—		$	69,491		$	655		$	(405	)	$	69,741
Costs and expenses:
Operating	—			42,812			600			(405		)	43,007
Administrative and general	1,773			9,329			136			—			11,238
Depreciation	—			11,674			512			—			12,186
Total costs and expenses	1,773			63,815			1,248			(405		)	66,431
Gains on asset dispositions, net	—			1,813			—			—			1,813
Operating income	(1,773		)	7,489			(593		)	—			5,123
Other income (expense):
Interest income	4			228			—			—			232
Interest expense	(2,801		)	(298		)	(22		)	—			(3,121		)
Intercompany interest income (expense)	—			165			(165		)	—			—
Derivative losses, net	—			8			—			—			8
Foreign currency gains (losses), net	4			75			67			—			146
Gain on debt extinguishment	(16		)	—			—			—			(16		)
Total other income (expense)	(2,809		)	178			(120		)	—			(2,751		)
Income (loss) before income taxes and equity earnings	(4,582		)	7,667			(713		)	—			2,372
Income tax expense (benefit)	(2,593		)	4,340			(404		)	—			1,343
Income (loss) before equity earnings	(1,989		)	3,327			(309		)	—			1,029
Equity losses, net of tax	—			(376		)	—			—			(376		)
Equity in earnings (losses) of subsidiaries	2,850			—			—			(2,850		)	—
Net income (loss)	861			2,951			(309		)	(2,850		)	653
Net loss attributable to noncontrolling interest in subsidiary	—			49			159			—			208
Net income (loss) attributable to Era Group Inc.	$	861		$	3,000		$	(150	)	$	(2,850	)	$	861

Supplemental Condensed Consolidating Statements of Comprehensive Income for the Three Months Ended September 30, 2016



	Parent			Guarantors		Non-guarantors			Eliminations			Consolidated
	(in thousands)
Net income (loss)	$	(560	)	$	7,431	$	(4,570	)	$	(3,103	)	$	(802	)
Other comprehensive income (loss):
Foreign currency translation adjustments	—			—		—			—			—
Income tax benefit	—			—		—			—			—
Total other comprehensive income (loss)	—			—		—			—			—
Comprehensive income (loss)	(560		)	7,431		(4,570		)	(3,103		)	(802		)
Comprehensive loss attributable to noncontrolling interest in subsidiary	—			—		242			—			242
Comprehensive income (loss) attributable to Era Group Inc.	$	(560	)	$	7,431	$	(4,328	)	$	(3,103	)	$	(560	)

Supplemental Condensed Consolidating Statements of Comprehensive Income for the Three Months Ended September 30, 2015



	Parent		Guarantors			Non-guarantors			Eliminations			Consolidated
	(in thousands)
Net income (loss)	$	861	$	2,951		$	(309	)	$	(2,850	)	$	653
Other comprehensive loss:
Foreign currency translation adjustments	—		(1		)	137			—			136
Income tax benefit	—		—			—			—			—
Total other comprehensive loss	—		(1		)	137			—			136
Comprehensive income (loss)	861		2,950			(172		)	(2,850		)	789
Comprehensive income attributable to noncontrolling interest in subsidiary	—		49			159			—			208
Comprehensive income (loss) attributable to Era Group Inc.	$	861	$	2,999		$	(13	)	$	(2,850	)	$	997

Supplemental Condensed Consolidating Statements of Cash Flows for the Nine Months Ended September 30, 2016



	Parent		Guarantors			Non-guarantors			Eliminations			Consolidated
	(in thousands)
Net cash provided by (used in) operating activities	$	21,127	$	26,296		$	(940	)	$	—		$	46,483
Cash flows from investing activities:
Purchases of property and equipment	—		(10,537		)	(175		)	—			(10,712		)
Proceeds from disposition of property and equipment	—		5,910			228			—			6,138
Return of helicopter deposit	—		544			—			—			544
Principal payments on notes due from equity investees	—		539			—			—			539
Principal payments on third party notes receivable	—		212			—			—			212
Net cash provided by (used in) investing activities	—		(3,332		)	53			—			(3,279		)
Cash flows from financing activities:
Payments on long-term debt	—		(1,386		)	(1,152		)	(27,000		)	(29,538		)
Proceeds from Revolving Credit Facility	—		—			—			7,000			7,000
Extinguishment of long-term debt	—		—			—			(4,331		)	(4,331		)
Proceeds from share award plans	—		—			—			836			836
Purchase of treasury shares	—		—			—			(161		)	(161		)
Borrowings and repayments of intercompany debt	—		(23,656		)	—			23,656			—
Net cash used in financing activities	—		(25,042		)	(1,152		)	—			(26,194		)
Effects of exchange rate changes on cash and cash equivalents	—		346			418			—			764
Net increase (decrease) in cash and cash equivalents	21,127		(1,732		)	(1,621		)	—			17,774
Cash and cash equivalents, beginning of period	7,565		3,334			3,471			—			14,370
Cash and cash equivalents, end of period	$	28,692	$	1,602		$	1,850		$	—		$	32,144

Supplemental Condensed Consolidating Statements of Cash Flows for the Nine Months Ended September 30, 2015



	Parent			Guarantors			Non-guarantors			Eliminations			Consolidated
	(in thousands)
Net cash provided by (used in) operating activities	$	(5,604	)	$	25,718		$	15,729		$	—		$	35,843
Cash flows from investing activities:
Purchases of property and equipment	—			(47,257		)	(11,773		)	11,770			(47,260		)
Proceeds from disposition of property and equipment	—			32,401			—			(11,770		)	20,631
Cash settlements on forward contracts, net	—			—			—			(1,103		)	(1,103		)
Business acquisitions, net of cash acquired	—			—			(3,165		)	—			(3,165		)
Proceeds from sale of FBO	—			—			—			14,252			14,252
Principal payments on notes due from equity investees	—			514			—			—			514
Principal payments on third party notes receivable	—			25			—			—			25
Escrow deposits, net	—			(150		)	—			(190		)	(340		)
Escrow deposits on like-kind exchanges, net	—			(1,857		)	—			—			(1,857		)
Borrowings and repayments of intercompany debt	—			12,959			—			(12,959		)	—
Net cash used in investing activities	—			(3,365		)	(14,938		)	—			(18,303		)
Cash flows from financing activities:
Payments on long-term debt	—			(2,091		)	(58		)	(50,000		)	(52,149		)
Proceeds from Revolving Credit Facility	—			—			—			35,000			35,000
Extinguishment of long-term debt	—			—			—			(24,335		)	(24,335		)
Proceeds from share award plans	—			—			—			1,096			1,096
Purchase of treasury shares	—			—			—			(2,069		)	(2,069		)
Tax expense on vested restricted stock	—			—			—			(114		)	(114		)
Borrowings and repayments of intercompany debt	—			(40,422		)	—			40,422			—
Net cash used in financing activities	—			(42,513		)	(58		)	—			(42,571		)
Effects of exchange rate changes on cash and cash equivalents	—			(2,028		)	—			—			(2,028		)
Net increase (decrease) in cash and cash equivalents	(5,604		)	(22,188		)	733			—			(27,059		)
Cash and cash equivalents, beginning of period	16,481			22,188			2,198			—			40,867
Cash and cash equivalents, end of period	$	10,877		$	—		$	2,931		$	—		$	13,808