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, 2018

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 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, 2018



	Parent			Guarantors			Non-guarantors			Eliminations			Consolidated
	(in thousands, except share data)
ASSETS
Current assets:
Cash and cash equivalents	$	46,351		$	—		$	1,280		$	—		$	47,631
Receivables:
Trade, operating, net of allowance for doubtful accounts of $854	—			29,135			6,520			—			35,655
Trade, dry-leasing	—			3,833			—			—			3,833
Tax receivable	—			—			3,117			—			3,117
Other	—			2,154			547			—			2,701
Inventories, net	—			20,124			33			—			20,157
Prepaid expenses	501			1,560			306			—			2,367
Total current assets	46,852			56,806			11,803			—			115,461
Property and equipment	—			910,730			16,747			—			927,477
Accumulated depreciation	—			(311,342		)	(3,394		)	—			(314,736		)
Property and equipment, net	—			599,388			13,353			—			612,741
Equity investments and advances	—			26,600			—			—			26,600
Investments in consolidated subsidiaries	165,005			—			—			(165,005		)	—
Intangible assets	—			—			1,111			—			1,111
Deferred income taxes	21,185			—			—			(21,185		)	—
Intercompany receivables	375,131			—			—			(375,131		)	—
Other assets	1,398			16,939			84			—			18,421
Total assets	$	609,571		$	699,733		$	26,351		$	(561,321	)	$	774,334
LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses	$	130		$	8,606		$	1,702		$	—		$	10,438
Accrued wages and benefits	—			7,008			1,597			—			8,605
Accrued interest	3,337			67			—			—			3,404
Accrued income taxes	2,970			—			23			—			2,993
Accrued other taxes	244			1,791			361			—			2,396
Accrued contingencies	—			—			1,014			—			1,014
Current portion of long-term debt	—			1,663			495			—			2,158
Other current liabilities	817			199			17			—			1,033
Total current liabilities	7,498			19,334			5,209			—			32,041
Long-term debt	133,743			26,733			—			—			160,476
Deferred income taxes	—			128,073			1,250			(21,185		)	108,138
Intercompany payables	—			322,117			53,047			(375,164		)	—
Other liabilities	—			1,753			—			—			1,753
Total liabilities	141,241			498,010			59,506			(396,349		)	302,408
Redeemable noncontrolling interest	—			3			3,453			—			3,456
Equity:
Common stock, $0.01 par value, 60,000,000 shares authorized; 21,761,823 outstanding, exclusive of treasury shares	219			—			—			—			219
Additional paid-in capital	447,014			100,305			4,562			(104,868		)	447,013
Retained earnings	24,048			101,305			(41,170		)	(60,104		)	24,079
Treasury shares, at cost, 215,141 shares	(2,951		)	—			—			—			(2,951		)
Accumulated other comprehensive income, net of tax				110			—			—			110
Total equity	468,330			201,720			(36,608		)	(164,972		)	468,470
Total liabilities, redeemable noncontrolling interest and stockholders’ equity	$	609,571		$	699,733		$	26,351		$	(561,321	)	$	774,334

Supplemental Condensed Consolidating Balance Sheet as of December 31, 2017



	Parent			Guarantors			Non-guarantors			Eliminations			Consolidated
	(in thousands, except share data)
ASSETS
Current assets:
Cash and cash equivalents	$	10,800		$	—		$	2,783		$	—		$	13,583
Receivables:
Trade, operating, net of allowance for doubtful accounts of $1,196	—			27,968			5,872			—			33,840
Trade, dry-leasing	—			5,124			—			—			5,124
Tax receivables	—			—			2,829			—			2,829
Other	—			1,126			497			—			1,623
Inventories, net	—			20,746			366			—			21,112
Prepaid expenses	349			721			133			—			1,203
Escrow deposits	—			3,250			—			—			3,250
Total current assets	11,149			58,935			12,480			—			82,564
Property and equipment	—			956,918			16,024			—			972,942
Accumulated depreciation	—			(296,573		)	(2,455		)	—			(299,028		)
Net property and equipment	—			660,345			13,569			—			673,914
Equity investments and advances	—			30,056			—			—			30,056
Investments in consolidated subsidiaries	161,350			—			—			(161,350		)	—
Intangible assets	—			—			1,122			—			1,122
Deferred income taxes	19,600			—			—			(19,600		)	—
Intercompany receivables	426,806			—			—			(426,806		)	—
Other assets	1,011			3,370			60			—			4,441
Total assets	$	619,916		$	752,706		$	27,231		$	(607,756	)	$	792,097
LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses	$	638		$	13,655		$	2,128		$	—		$	16,421
Accrued wages and benefits	—			6,804			1,460			—			8,264
Accrued interest	549			57			—			—			606
Accrued income taxes	—			24			4			—			28
Accrued other taxes	18			1,192			600			—			1,810
Accrued contingencies	—			—			859			—			859
Current portion of long-term debt	—			1,663			1,073			—			2,736
Other current liabilities	848			835			37			—			1,720
Total current liabilities	2,053			24,230			6,161			—			32,444
Long-term debt	172,292			27,979			1,903			—			202,174
Deferred income taxes	—			124,948			1,250			(19,600		)	106,598
Intercompany payables	—			381,660			45,146			(426,806		)	—
Other liabilities	—			1,435			(1		)	—			1,434
Total liabilities	174,345			560,252			54,459			(446,406		)	342,650
Redeemable noncontrolling interest	—			4			3,762			—			3,766
Equity:
Common stock, $0.01 par value, 60,000,000 shares authorized; 21,319,150 shares outstanding, exclusive of treasury shares	215			—			—			—			215
Additional paid-in capital	443,944			100,306			4,562			(104,868		)	443,944
Retained earnings	4,363			92,034			(35,552		)	(56,482		)	4,363
Treasury shares, at cost, 215,141 shares	(2,951		)	—			—			—			(2,951		)
Accumulated other comprehensive income, net of tax	—			110			—			—			110
Total equity	445,571			192,450			(30,990		)	(161,350		)	445,681
Total liabilities, redeemable noncontrolling interest and stockholders’ equity	$	619,916		$	752,706		$	27,231		$	(607,756	)	$	792,097

Supplemental Condensed Consolidating Statements of Operations for the Three Months Ended September 30, 2018



	Parent			Guarantors			Non-guarantors			Eliminations			Consolidated
	(in thousands)
Revenues	$	—		$	48,631		$	13,623		$	(7,644	)	$	54,610
Costs and expenses:
Operating	—			29,888			14,302			(7,677		)	36,513
Administrative and general	901			6,957			979			—			8,837
Depreciation	—			9,316			225			—			9,541
Total costs and expenses	901			46,161			15,506			(7,677		)	54,891
Losses on asset dispositions, net	—			(148		)	—			—			(148		)
Litigation settlement proceeds	42,000			—			—			—			42,000
Operating income (loss)	41,099			2,322			(1,883		)	33			41,571
Other income (expense):
Interest income	171			448			113			—			732
Interest expense	(3,330		)	(204		)	(15		)	—			(3,549		)
Foreign currency losses, net	(10		)	(16		)	(68		)	—			(94		)
Other, net	—			21			(6		)	—			15
Total other income (expense)	(3,169		)	249			24			—			(2,896		)
Income (loss) before income taxes and equity earnings	37,930			2,571			(1,859		)	33			38,675
Income tax expense	3,928			3,933			—			—			7,861
Income (loss) before equity earnings	34,002			(1,362		)	(1,859		)	33			30,814
Equity in earnings (losses) of subsidiaries	(2,747		)	465			—			2,747			465
Net income (loss)	31,255			(897		)	(1,859		)	2,780			31,279
Net loss attributable to noncontrolling interest in subsidiary	—			—			10			—			10
Net income (loss) attributable to Era Group Inc.	$	31,255		$	(897	)	$	(1,849	)	$	2,780		$	31,289

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



	Parent			Guarantors			Non-guarantors			Eliminations			Consolidated
	(in thousands)
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 income (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		)
Income (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		)
Income (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 Nine Months Ended September 30, 2018



	Parent			Guarantors			Non-guarantors			Eliminations			Consolidated
	(in thousands)
Revenues	$	—		$	148,512		$	42,252		$	(21,104	)	$	169,660
Costs and expenses:
Operating	—			92,317			43,325			(21,137		)	114,505
Administrative and general	14,087			18,182			3,445			—			35,714
Depreciation	—			29,283			728			—			30,011
Total costs and expenses	14,087			139,782			47,498			(21,137		)	180,230
Gains on asset dispositions, net	—			2,269			—			—			2,269
Litigation settlement proceeds	42,000			—			—			—			42,000
Operating income (loss)	27,913			10,999			(5,246		)	33			33,699
Other income (expense):
Interest income	180			878			166			—			1,224
Interest expense	(10,925		)	(595		)	(126		)	—			(11,646		)
Foreign currency losses, net	(66		)	(141		)	(888		)	—			(1,095		)
Gain on debt extinguishment	—			—			175			—			175
Other, net	—			31			(10		)	—			21
Total other income (expense)	(10,811		)	173			(683		)	—			(11,321		)
Income (loss) before income taxes and equity earnings	17,102			11,172			(5,929		)	33			22,378
Income tax expense	1,075			3,474			—			—			4,549
Income (loss) before equity earnings	16,027			7,698			(5,929		)	33			17,829
Equity in earnings (losses) of subsidiaries	3,655			1,577			—			(3,655		)	1,577
Net income (loss)	19,682			9,275			(5,929		)	(3,622		)	19,406
Net loss attributable to noncontrolling interest in subsidiary	—			—			310			—			310
Net income (loss) attributable to Era Group Inc.	$	19,682		$	9,275		$	(5,619	)	$	(3,622	)	$	19,716

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



	Parent			Guarantors			Non-guarantors			Eliminations			Consolidated
	(in thousands)
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 Comprehensive Income for the Three Months Ended September 30, 2018



	Parent		Guarantors			Non-guarantors			Eliminations		Consolidated
	(in thousands)
Net income (loss)	$	31,255	$	(897	)	$	(1,859	)	$	2,780	$	31,279
Comprehensive income (loss)	31,255		(897		)	(1,859		)	2,780		31,279
Comprehensive income attributable to noncontrolling interest in subsidiary	—		—			10			—		10
Comprehensive income (loss) attributable to Era Group Inc.	$	31,255	$	(897	)	$	(1,849	)	$	2,780	$	31,289

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	)
Comprehensive income (loss)	(81,448		)	(76,247		)	(1,052		)	77,532		(81,215		)
Comprehensive loss 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 Nine Months Ended September 30, 2018



	Parent		Guarantors			Non-guarantors			Eliminations			Consolidated
	(in thousands)
Net income (loss)	$	19,682	$	9,275		$	(5,929	)	$	(3,622	)	$	19,406
Other comprehensive loss:
Foreign currency translation adjustments	—		(5		)	—			—			(5		)
Total other comprehensive loss	—		(5		)	—			—			(5		)
Comprehensive income (loss)	19,682		9,270			(5,929		)	(3,622		)	19,401
Comprehensive loss attributable to noncontrolling interest in subsidiary	—		—			310			—			310
Comprehensive income (loss) attributable to Era Group Inc.	$	19,682	$	9,270		$	(5,619	)	$	(3,622	)	$	19,711

Supplemental 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		)
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 Cash Flows for the Nine Months Ended September 30, 2018



	Parent		Guarantors			Non-guarantors			Eliminations			Consolidated
	(in thousands)
Net cash provided by provided by operating activities	$	35,550	$	13,319		$	1,483		$	—		$	50,352
Cash flows from investing activities:
Purchases of property and equipment	—		(7,461		)	(225		)	—			(7,686		)
Proceeds from disposition of property and equipment	—		29,520			—			—			29,520
Dividends received from equity investees	—		1,000			—			—			1,000
Principal payments on notes due from equity investees	—		401			—			—			401
Principal payments on third party notes receivable	—		620			—			—			620
Net cash used in investing activities	—		24,080			(225		)	—			23,855
Cash flows from financing activities:
Long-term debt issuance costs	—		—			—			(1,295		)	(1,295		)
Payments on long-term debt	—		(1,247		)	(2,315		)	(39,000		)	(42,562		)
Proceeds from share award plans	—		—			—			893			893
Borrowings and repayments of intercompany debt	—		(39,402		)	—			39,402			—
Net cash used in financing activities	—		(40,649		)	(2,315		)	—			(42,964		)
Effects of exchange rate changes on cash and cash equivalents	—		—			(445		)	—			(445		)
Net increase (decrease) in cash and cash equivalents	35,550		(3,250		)	(1,502		)	—			30,798
Cash, cash equivalents and restricted cash, beginning of period	10,800		3,250			2,783			—			16,833
Cash, cash equivalents and restricted cash, end of period	$	46,350	$	—		$	1,281		$	—		$	47,631

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 investees	—			(126		)	—			—			(126		)
Principal payments on notes due from equity investees	—			564			—			—			564
Principal payments on third party notes receivable	—			94			—			—			94
Net cash provided by (used in) investing activities	—			(6,791		)	(108		)	—			(6,899		)
Cash flows from financing activities:
Proceeds from Revolving Credit Facility	—			—			—			9,000			9,000
Payments on long-term debt	—			(1,247		)	(498		)	(23,000		)	(24,745		)
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		)	(3,777		)	186			—			(3,831		)
Cash, cash equivalents and restricted cash, beginning of period	25,474			3,777			1,476			—			30,727
Cash, cash equivalents and restricted cash, end of period	$	25,234		$	—		$	1,662		$	—		$	26,896