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

6 Months Ended

Jun. 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 June 30, 2016



	Parent			Guarantors			Non-guarantors			Eliminations			Consolidated
	(in thousands, except share data)
ASSETS
Current assets:
Cash and cash equivalents	$	36,030		$	1,768		$	1,362		$	—		$	39,160
Receivables:
Trade, net of allowance for doubtful accounts of $1,036	39			28,906			7,885			—			36,830
Tax receivable	6,000			11			—			—			6,011
Other	—			2,825			816			—			3,641
Inventories, net	—			26,838			926			—			27,764
Prepaid expenses	565			1,858			140			—			2,563
Other current assets	190			1			—			—			191
Total current assets	42,824			62,207			11,129			—			116,160
Property and equipment	—			1,155,702			16,540			—			1,172,242
Accumulated depreciation	—			(335,631		)	(1,091		)	—			(336,722		)
Property and equipment, net	—			820,071			15,449			—			835,520
Equity investments and advances	—			29,299			—			—			29,299
Investments in consolidated subsidiaries	178,291			—			—			(178,291		)	—
Intangible assets	—			—			1,148			—			1,148
Deferred taxes	5,876			—			—			(5,876		)	—
Intercompany receivables	474,859			—			—			(474,859		)	—
Other assets	1,828			6,169			4,722			—			12,719
Total assets	$	703,678		$	917,746		$	32,448		$	(659,026	)	$	994,846
LIABILITIES, REDEEMABLE NONCONTROLLING INTREST AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses	$	410		$	13,793		$	1,270		$	—		$	15,473
Accrued wages and benefits	—			6,906			2,659			—			9,565
Accrued interest	612			—			—			—			612
Accrued other taxes	30			1,275			1,210			—			2,515
Accrued contingencies	—			—			1,280			—			1,280
Current portion of long-term debt	—			1,524			45			—			1,569
Other current liabilities	468			1,685			31			—			2,184
Total current liabilities	1,520			25,183			6,495			—			33,198
Long-term debt	230,466			22,474			—			—			252,940
Deferred income taxes	—			233,132			677			(5,876		)	227,933
Intercompany payables	—			444,054			30,805			(474,859		)	—
Other liabilities	—			1,301			3,117			—			4,418
Total liabilities	231,986			726,144			41,094			(480,735		)	518,489
Redeemable noncontrolling interest	—			4			4,569			—			4,573
Equity:
Common stock, $0.01 par value, 60,000,000 shares authorized; 20,879,283 outstanding, exclusive of treasury shares	211			—			—			—			211
Additional paid-in capital	435,714			100,306			4,562			(104,868		)	435,714
Retained earnings	38,622			91,200			(17,777		)	(73,423		)	38,622
Treasury shares, at cost, 171,614 shares	(2,855		)	—			—			—			(2,855		)
Accumulated other comprehensive income, net of tax	—			92			—			—			92
Total equity	471,692			191,598			(13,215		)	(178,291		)	471,784
Total liabilities, redeemable noncontrolling interest and stockholders’ equity	$	703,678		$	917,746		$	32,448		$	(659,026	)	$	994,846

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 June 30, 2016



	Parent			Guarantors			Non-guarantors			Eliminations			Consolidated
	(in thousands)
Operating revenues	$	—		$	57,392		$	17,788		$	(11,829	)	$	63,351
Costs and expenses:
Operating	—			38,760			20,465			(11,829		)	47,396
Administrative and general	871			6,875			394			—			8,140
Depreciation	—			12,414			277			—			12,691
Total costs and expenses	871			58,049			21,136			(11,829		)	68,227
Gains on asset dispositions, net	—			1,367			—			—			1,367
Operating income (loss)	(871		)	710			(3,348		)	—			(3,509		)
Other income (expense):
Interest income	9			119			275			—			403
Interest expense	(3,841		)	(136		)	(153		)	—			(4,130		)
Foreign currency gains (losses), net	(52		)	(110		)	491			—			329
Gain on debt extinguishment	518			—			—			—			518
Other, net	—			1			45			—			46
Total other income (expense)	(3,366		)	(126		)	658			—			(2,834		)
Income (loss) before income taxes and equity earnings	(4,237		)	584			(2,690		)	—			(6,343		)
Income tax expense (benefit)	(490		)	(742		)	—			—			(1,232		)
Income (loss) before equity earnings	(3,747		)	1,326			(2,690		)	—			(5,111		)
Equity earnings, net of tax	—			601			—			—			601
Equity in earnings (losses) of subsidiaries	5,685			—			—			(5,685		)	—
Net income (loss)	1,938			1,927			(2,690		)	(5,685		)	(4,510		)
Net loss attributable to noncontrolling interest in subsidiary	—			6,349			99			—			6,448
Net income (loss) attributable to Era Group Inc.	$	1,938		$	8,276		$	(2,591	)	$	(5,685	)	$	1,938

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



	Parent			Guarantors			Non-guarantors			Eliminations			Consolidated
	(in thousands)
Operating revenues	$	—		$	70,550		$	431		$	(243	)	$	70,738
Costs and expenses:
Operating	—			39,463			564			(243		)	39,784
Administrative and general	1,742			8,885			152			—			10,779
Depreciation	—			11,212			186			—			11,398
Total costs and expenses	1,742			59,560			902			(243		)	61,961
Gains on asset dispositions, net	—			2,363			(2,605		)	—			(242		)
Operating income	(1,742		)	13,353			(3,076		)	—			8,535
Other income (expense):
Interest income	4			312			1			—			317
Interest expense	(2,756		)	(114		)	(11		)	—			(2,881		)
Derivative losses, net	—			(10		)	—			—			(10		)
Foreign currency gains (losses), net	74			469			—			—			543
Gain on sale of FBO	12,946			—			—			—			12,946
Other, net	—			—			(9		)	—			(9		)
Total other income (expense)	10,268			657			(19		)	—			10,906
Income (loss) before income taxes and equity earnings	8,526			14,010			(3,095		)	—			19,441
Income tax expense (benefit)	(2,078		)	10,216			—			—			8,138
Income (loss) before equity earnings	10,604			3,794			(3,095		)	—			11,303
Equity losses, net of tax	—			(198		)	—			—			(198		)
Equity in earnings (losses) of subsidiaries	729			—			—			(729		)	—
Net income (loss)	11,333			3,596			(3,095		)	(729		)	11,105
Net loss attributable to noncontrolling interest in subsidiary	—			130			98			—			228
Net income (loss) attributable to Era Group Inc.	$	11,333		$	3,726		$	(2,997	)	$	(729	)	$	11,333

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



	Parent		Guarantors		Non-guarantors			Eliminations			Consolidated
	(in thousands)
Net income (loss)	$	1,938	$	1,927	$	(2,690	)	$	(5,685	)	$	(4,510	)
Other comprehensive income (loss):
Foreign currency translation adjustments	—		—		—			—			—
Income tax benefit	—		—		—			—			—
Total other comprehensive income (loss)	—		—		—			—			—
Comprehensive income (loss)	1,938		1,927		(2,690		)	(5,685		)	(4,510		)
Comprehensive loss attributable to noncontrolling interest in subsidiary	—		6,349		99			—			6,448
Comprehensive income (loss) attributable to Era Group Inc.	$	1,938	$	8,276	$	(2,591	)	$	(5,685	)	$	1,938

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



	Parent		Guarantors		Non-guarantors			Eliminations			Consolidated
	(in thousands)
Net income (loss)	$	11,333	$	3,596	$	(3,095	)	$	(729	)	$	11,105
Other comprehensive loss:
Foreign currency translation adjustments	—		—		(137		)	—			(137		)
Income tax benefit	—		—		—			—			—
Total other comprehensive loss	—		—		(137		)	—			(137		)
Comprehensive income (loss)	11,333		3,596		(3,232		)	(729		)	10,968
Comprehensive income attributable to noncontrolling interest in subsidiary	—		130		98			—			228
Comprehensive income (loss) attributable to Era Group Inc.	$	11,333	$	3,726	$	(3,134	)	$	(729	)	$	11,196

Supplemental Condensed Consolidating Statements of Cash Flows for the Six Months Ended June 30, 2016



	Parent		Guarantors			Non-guarantors			Eliminations			Consolidated
	(in thousands)
Net cash provided by (used in) operating activities	$	28,465	$	1,126		$	(1,030	)	$	—		$	28,561
Cash flows from investing activities:
Purchases of property and equipment	—		(4,974		)	(132		)	—			(5,106		)
Proceeds from disposition of property and equipment	—		5,910			—			—			5,910
Return of helicopter deposit	—		544			—			—			544
Principal payments on notes due from equity investees	—		357			—			—			357
Principal payments on third party notes receivable	—		136			—			—			136
Net cash provided by (used in) investing activities	—		1,973			(132		)	—			1,841
Cash flows from financing activities:
Payments on long-term debt	—		(970		)	(1,123		)	(7,000		)	(9,093		)
Proceeds from Revolving Credit Facility	—		—			—			7,000			7,000
Extinguishment of long-term debt	—		—			—			(4,331		)	(4,331		)
Proceeds from share award plans	—		—			—			477			477
Purchase of treasury shares	—		—			—			(161		)	(161		)
Borrowings and repayments of intercompany debt	—		(4,015		)	—			4,015			—
Net cash used in financing activities	—		(4,985		)	(1,123		)	—			(6,108		)
Effects of exchange rate changes on cash and cash equivalents	—		320			176			—			496
Net increase (decrease) in cash and cash equivalents	28,465		(1,566		)	(2,109		)	—			24,790
Cash and cash equivalents, beginning of period	7,565		3,334			3,471			—			14,370
Cash and cash equivalents, end of period	$	36,030	$	1,768		$	1,362		$	—		$	39,160

Supplemental Condensed Consolidating Statements of Cash Flows for the Six Months Ended June 30, 2015



	Parent			Guarantors			Non-guarantors			Eliminations			Consolidated
	(in thousands)
Net cash provided by (used in) operating activities	$	(12,627	)	$	18,030		$	15,324		$	—		$	20,727
Cash flows from investing activities:
Purchases of property and equipment	—			(39,663		)	(11,770		)	11,770			(39,663		)
Proceeds from disposition of property and equipment	—			20,154			—			(11,770		)	8,384
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	—			340			—			—			340
Principal payments on third party notes receivable	—			25			—			—			25
Escrow deposits, net	—			(150		)	—			(350		)	(500		)
Escrow deposits on like-kind exchanges, net	—			(6,174		)	—			—			(6,174		)
Borrowings and repayments of intercompany debt	—			(1,453		)	—			1,453			—
Net cash used in investing activities	—			(12,669		)	(14,935		)	—			(27,604		)
Cash flows from financing activities:
Payments on long-term debt	—			(1,296		)	(24		)	(30,000		)	(31,320		)
Proceeds from Revolving Credit Facility	—			—			—			25,000			25,000
Extinguishment of long-term debt	—			—			—			(9,297		)	(9,297		)
Proceeds from share award plans	—			—			—			612			612
Borrowings and repayments of intercompany debt	—			(13,685		)	—			13,685			—
Net cash used in financing activities	—			(14,981		)	(24		)	—			(15,005		)
Effects of exchange rate changes on cash and cash equivalents	—			(1,991		)	8			—			(1,983		)
Net increase (decrease) in cash and cash equivalents	(12,627		)	(11,611		)	373			—			(23,865		)
Cash and cash equivalents, beginning of period	16,481			22,188			2,198			—			40,867
Cash and cash equivalents, end of period	$	3,854		$	10,577		$	2,571		$	—		$	17,002