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, 2017

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, 2017



	Parent			Guarantors			Non-guarantors			Eliminations			Consolidated
	(in thousands, except share data)
ASSETS
Current assets:
Cash and cash equivalents	$	25,234		$	—		$	1,662		$	—		$	26,896
Receivables:
Trade, net of allowance for doubtful accounts of $1,227	—			30,794			7,814			—			38,608
Tax receivable	9			7			2,795			—			2,811
Other	—			1,602			884			—			2,486
Inventories, net	—			21,676			309			—			21,985
Prepaid expenses	397			1,904			138			—			2,439
Escrow deposits	—			—			—			—			—
Total current assets	25,640			55,983			13,602			—			95,225
Property and equipment	—			967,801			15,997			—			983,798
Accumulated depreciation	—			(297,096		)	(2,198		)	—			(299,294		)
Property and equipment, net	—			670,705			13,799			—			684,504
Equity investments and advances	—			29,894			—			—			29,894
Investments in consolidated subsidiaries	95,442			—			—			(95,442		)	—
Intangible assets	—			—			1,126			—			1,126
Deferred taxes	17,558			—			—			(17,558		)	—
Intercompany receivables	439,952			—			—			(439,952		)	—
Other assets	1,213			3,740			68			—			5,021
Total assets	$	579,805		$	760,322		$	28,595		$	(552,952	)	$	815,770
LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses	$	562		$	12,034		$	2,730		$	—		$	15,326
Accrued wages and benefits	—			6,241			2,109			—			8,350
Accrued interest	3,325			—			—			—			3,325
Accrued income taxes	—			—			38			—			38
Accrued other taxes	214			1,356			528			—			2,098
Accrued contingencies	—			—			1,288			—			1,288
Current portion of long-term debt	—			1,524			667			—			2,191
Other current liabilities	699			1,665			42			—			2,406
Total current liabilities	4,800			22,820			7,402			—			35,022
Long-term debt	192,147			20,395			2,483			—			215,025
Deferred income taxes	—			194,012			1,250			(17,558		)	177,704
Intercompany payables	—			396,905			43,047			(439,952		)	—
Other liabilities	—			1,069			—			—			1,069
Total liabilities	196,947			635,201			54,182			(457,510		)	428,820
Redeemable noncontrolling interest	—			4			3,998			—			4,002
Equity:
Common stock, $0.01 par value, 60,000,000 shares authorized; 21,328,653 outstanding, exclusive of treasury shares	215			—			—			—			215
Additional paid-in capital	442,948			100,306			4,562			(104,868		)	442,948
Retained earnings	(57,331		)	24,721			(34,147		)	9,426			(57,331		)
Treasury shares, at cost, 180,430 shares	(2,974		)	—			—			—			(2,974		)
Accumulated other comprehensive income, net of tax	—			90			—			—			90
Total equity	382,858			125,117			(29,585		)	(95,442		)	382,948
Total liabilities, redeemable noncontrolling interest and stockholders’ equity	$	579,805		$	760,322		$	28,595		$	(552,952	)	$	815,770

Supplemental Condensed Consolidating Balance Sheet as of December 31, 2016



	Parent			Guarantors			Non-guarantors			Eliminations			Consolidated
	(in thousands, except share data)
ASSETS
Current assets:
Cash and cash equivalents	$	25,474		$	—		$	1,476		$	—		$	26,950
Receivables:
Trade, net of allowance for doubtful accounts of $1,219	39			26,118			6,313			—			32,470
Tax receivables	9			4			3,448			—			3,461
Other	—			1,658			1,058			—			2,716
Inventories, net	—			25,156			261			—			25,417
Prepaid expenses	359			976			244			—			1,579
Escrow deposits	—			3,777			—			—			3,777
Total current assets	25,881			57,689			12,800			—			96,370
Property and equipment	—			1,138,020			16,008			—			1,154,028
Accumulated depreciation	—			(330,735		)	(1,484		)	—			(332,219		)
Net property and equipment	—			807,285			14,524			—			821,809
Equity investments and advances	—			29,266			—			—			29,266
Investments in consolidated subsidiaries	174,830			—			—			(174,830		)	—
Intangible assets	—			—			1,137			—			1,137
Deferred income taxes	12,262			—			—			(12,262		)	—
Intercompany receivables	460,623			—			—			(460,623		)	—
Other assets	1,820			4,723			48			—			6,591
Total assets	$	675,416		$	898,963		$	28,509		$	(647,715	)	$	955,173
LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses	$	322		$	6,273		$	2,281		$	—		$	8,876
Accrued wages and benefits	—			6,446			2,061			—			8,507
Accrued interest	529			—			—			—			529
Accrued income taxes	—			653			13			—			666
Current portion of long-term debt	—			1,524			615			—			2,139
Accrued other taxes	29			645			773			—			1,447
Accrued contingencies	—			—			1,237			—			1,237
Other current liabilities	481			1,525			216			—			2,222
Total current liabilities	1,361			17,066			7,196			—			25,623
Long-term debt	205,730			21,642			2,767			—			230,139
Deferred income taxes	—			237,067			667			(12,262		)	225,472
Intercompany payables	—			426,410			34,213			(460,623		)	—
Other liabilities	—			1,301			—			—			1,301
Total liabilities	207,091			703,486			44,843			(472,885		)	482,535
Redeemable noncontrolling interest	—			4			4,217			—			4,221
Equity:
Common stock, $0.01 par value, 60,000,000 shares authorized; 20,936,636 shares outstanding, exclusive of treasury shares	211			—			—			—			211
Additional paid-in capital	438,489			100,306			4,562			(104,868		)	438,489
Retained earnings	32,524			95,075			(25,113		)	(69,962		)	32,524
Treasury shares, at cost, 175,350 shares	(2,899		)	—			—			—			(2,899		)
Accumulated other comprehensive income, net of tax	—			92			—			—			92
Total equity	468,325			195,473			(20,551		)	(174,830		)	468,417
Total liabilities, redeemable noncontrolling interest and stockholders’ equity	$	675,416		$	898,963		$	28,509		$	(647,715	)	$	955,173

Supplemental Condensed Consolidating Statements of Operations for the Three Months Ended September 30, 2017



	Parent			Guarantors			Non-guarantors			Eliminations			Consolidated
	(in thousands)
Operating revenues	$	—		$	51,919		$	16,729		$	(7,263	)	$	61,385
Costs and expenses:
Operating	—			35,826			15,424			(7,263		)	43,987
Administrative and general	2,305			7,306			1,317			—			10,928
Depreciation	—			11,851			252			—			12,103
Total costs and expenses	2,305			54,983			16,993			(7,263		)	67,018
Gains on asset dispositions, net	—			(122		)	—			—			(122		)
Loss on impairment	—			(116,586		)	(432		)	—			(117,018		)
Operating loss	(2,305		)	(119,772		)	(696		)	—			(122,773		)
Other income (expense):
Interest income	47			102			57			—			206
Interest expense	(3,838		)	(170		)	(89		)	—			(4,097		)
Foreign currency gains (losses), net	66			85			(139		)	—			12
Other, net	—			(1		)	(32		)	—			(33		)
Total other income (expense)	(3,725		)	16			(203		)	—			(3,912		)
Loss before income taxes and equity earnings	(6,030		)	(119,756		)	(899		)	—			(126,685		)
Income tax expense (benefit)	(2,114		)	(43,276		)	153			—			(45,237		)
Loss before equity earnings	(3,916		)	(76,480		)	(1,052		)	—			(81,448		)
Equity earnings, net of tax	—			233			—			—			233
Equity in earnings (losses) of subsidiaries	(77,532		)	—			—			77,532			—
Net income (loss)	(81,448		)	(76,247		)	(1,052		)	77,532			(81,215		)
Net loss attributable to noncontrolling interest in subsidiary	—			—			(233		)	—			(233		)
Net income (loss) attributable to Era Group Inc.	$	(81,448	)	$	(76,247	)	$	(1,285	)	$	77,532		$	(81,448	)

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 Nine Months Ended September 30, 2017



	Parent			Guarantors			Non-guarantors			Eliminations			Consolidated
	(in thousands)
Operating revenues	$	—		$	151,550		$	46,132		$	(23,892	)	$	173,790
Costs and expenses:
Operating	—			98,117			48,854			(23,892		)	123,079
Administrative and general	5,280			21,648			4,283			—			31,211
Depreciation	—			34,898			737			—			35,635
Total costs and expenses	5,280			154,663			53,874			(23,892		)	189,925
Gains on asset dispositions, net	—			5,048			—			—			5,048
Loss on impairment	—			(116,586		)	(432		)	—			(117,018		)
Operating income (loss)	(5,280		)	(114,651		)	(8,174		)	—			(128,105		)
Other income (expense):
Interest income	96			320			225			—			641
Interest expense	(10,800		)	(627		)	(193		)	—			(11,620		)
Foreign currency gains (losses), net	220			253			(569		)	—			(96		)
Other, net	—			—			(29		)	—			(29		)
Total other income (expense)	(10,484		)	(54		)	(566		)	—			(11,104		)
Income (loss) before income taxes and equity earnings	(15,764		)	(114,705		)	(8,740		)	—			(139,209		)
Income tax expense (benefit)	(5,297		)	(43,282		)	513			—			(48,066		)
Income (loss) before equity earnings	(10,467		)	(71,423		)	(9,253		)	—			(91,143		)
Equity earnings, net of tax	—			1,069			—			—			1,069
Equity in earnings (losses) of subsidiaries	(79,388		)	—			—			79,388			—
Net income (loss)	(89,855		)	(70,354		)	(9,253		)	79,388			(90,074		)
Net loss attributable to noncontrolling interest in subsidiary	—			—			219			—			219
Net income (loss) attributable to Era Group Inc.	$	(89,855	)	$	(70,354	)	$	(9,034	)	$	79,388		$	(89,855	)

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



	Parent			Guarantors			Non-guarantors			Eliminations			Consolidated
	(in thousands)
Operating revenues	$	—		$	175,607		$	47,669		$	(32,337	)	$	190,939
Costs and expenses:
Operating	—			107,127			57,284			(32,337		)	132,074
Administrative and general	2,657			21,233			2,981			—			26,871
Depreciation	—			37,144			832			—			37,976
Total costs and expenses	2,657			165,504			61,097			(32,337		)	196,921
Gains on asset dispositions, net	—			4,282			(248		)	—			4,034
Operating income (loss)	(2,657		)	14,385			(13,676		)	—			(1,948		)
Other income (expense):
Interest income	37			358			775			—			1,170
Interest expense	(11,765		)	(671		)	(445		)	—			(12,881		)
Foreign currency gains (losses), net	45			(142		)	674			—			577
Gain on debt extinguishment	518			—			—			—			518
Other, net	—			2			61			—			63
Total other income (expense)	(11,165		)	(453		)	1,065			—			(10,553		)
Income (loss) before income taxes and equity earnings	(13,822		)	13,932			(12,611		)	—			(12,501		)
Income tax benefit	(2,323		)	146			—			—			(2,177		)
Income (loss) before equity earnings	(11,499		)	13,786			(12,611		)	—			(10,324		)
Equity earnings, net of tax	—			1,062			—			—			1,062
Equity in earnings (losses) of subsidiaries	9,059			—			—			(9,059		)	—
Net income (loss)	(2,440		)	14,848			(12,611		)	(9,059		)	(9,262		)
Net loss attributable to noncontrolling interest in subsidiary	—			6,349			473			—			6,822
Net income (loss) attributable to Era Group Inc.	$	(2,440	)	$	21,197		$	(12,138	)	$	(9,059	)	$	(2,440	)

Supplemental Condensed Consolidating Statements of Comprehensive Income for the Three Months Ended September 30, 2017



	Parent			Guarantors			Non-guarantors			Eliminations		Consolidated
	(in thousands)
Net income (loss)	$	(81,448	)	$	(76,247	)	$	(1,052	)	$	77,532	$	(81,215	)
Other comprehensive income (loss):
Foreign currency translation adjustments	—			—			—			—		—
Income tax benefit	—			—			—			—		—
Total other comprehensive income (loss)	—			—			—			—		—
Comprehensive income (loss)	(81,448		)	(76,247		)	(1,052		)	77,532		(81,215		)
Comprehensive income attributable to noncontrolling interest in subsidiary	—			—			(233		)	—		(233		)
Comprehensive income (loss) attributable to Era Group Inc.	$	(81,448	)	$	(76,247	)	$	(1,285	)	$	77,532	$	(81,448	)

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 loss:
Foreign currency translation adjustments	—			—		—			—			—
Income tax benefit	—			—		—			—			—
Total other comprehensive 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	)

plemental Condensed Consolidating Statements of Comprehensive Income for the Nine Months Ended September 30, 2017



	Parent			Guarantors			Non-guarantors			Eliminations		Consolidated
	(in thousands)
Net income (loss)	$	(89,855	)	$	(70,354	)	$	(9,253	)	$	79,388	$	(90,074	)
Other comprehensive loss:
Foreign currency translation adjustments	—			(2		)	—			—		(2		)
Income tax benefit	—			—			—			—		—
Total other comprehensive loss	—			(2		)	—			—		(2		)
Comprehensive income (loss)	(89,855		)	(70,356		)	(9,253		)	79,388		(90,076		)
Comprehensive loss attributable to noncontrolling interest in subsidiary	—			—			219			—		219
Comprehensive income (loss) attributable to Era Group Inc.	$	(89,855	)	$	(70,356	)	$	(9,034	)	$	79,388	$	(89,857	)

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



	Parent			Guarantors		Non-guarantors			Eliminations			Consolidated
	(in thousands)
Net income (loss)	$	(2,440	)	$	14,848	$	(12,611	)	$	(9,059	)	$	(9,262	)
Other comprehensive loss:
Foreign currency translation adjustments	—			—		—			—			—
Income tax benefit	—			—		—			—			—
Total other comprehensive loss	—			—		—			—			—
Comprehensive income (loss)	(2,440		)	14,848		(12,611		)	(9,059		)	(9,262		)
Comprehensive loss attributable to noncontrolling interest in subsidiary	—			6,349		473			—			6,822
Comprehensive income (loss) attributable to Era Group Inc.	$	(2,440	)	$	21,197	$	(12,138	)	$	(9,059	)	$	(2,440	)

Supplemental Condensed Consolidating Statements of Cash Flows for the Nine Months Ended September 30, 2017



	Parent			Guarantors			Non-guarantors			Eliminations			Consolidated
	(in thousands)
Net cash provided by (used in) operating activities	$	(267	)	$	17,477		$	718		$	—		$	17,928
Cash flows from investing activities:
Purchases of property and equipment	—			(13,013		)	(108		)	—			(13,121		)
Proceeds from disposition of property and equipment	—			5,690			—			—			5,690
Investments in and advances to equity method investees	—			(126		)	—			—			(126		)
Principal payments on notes due from equity investees	—			564			—			—			564
Principal payments on third party notes receivable	—			94			—			—			94
Escrow deposits on like-kind exchanges, net	—			3,777			—			—			3,777
Net cash used in investing activities	—			(3,014		)	(108		)	—			(3,122		)
Cash flows from financing activities:
Payments on long-term debt	—			(1,247		)	(498		)	(23,000		)	(24,745		)
Proceeds from Revolving Credit Facility	—			—			—			9,000			9,000
Proceeds from share award plans	—			—			—			836			836
Purchase of treasury shares	—			—			—			(52		)	(52		)
Borrowings and repayments of intercompany debt	—			(13,216		)	—			13,216			—
Net cash used in financing activities	—			(14,463		)	(498		)	—			(14,961		)
Effects of exchange rate changes on cash and cash equivalents	27			—			74			—			101
Net increase (decrease) in cash and cash equivalents	(240		)	—			186			—			(54		)
Cash and cash equivalents, beginning of period	25,474			—			1,476			—			26,950
Cash and cash equivalents, end of period	$	25,234		$	—		$	1,662		$	—		$	26,896

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