Bristow Group Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

ACQUISITIONS AND DISPOSITIONS

ACQUISITIONS AND DISPOSITIONS

12 Months Ended

Dec. 31, 2016

Property, Plant and Equipment [Abstract]

Sicher Helicopters SAS (“Sicher”). On April 9, 2015, the Company contributed $3.2 million in cash for a 75% interest in Hauser Investments Limited (“Hauser”), which owns 100% of Sicher, a Colombian entity. In connection with the acquisition, the Company also transferred title of an AW139 helicopter to Hauser to be used in Sicher’s operations.

The Company recorded all identifiable assets acquired and liabilities assumed at the estimated acquisition date fair value in accordance with Accounting Standards Codification (“ASC”) 805 - Business Combinations. This acquisition did not represent a material business combination under ASC 805. The acquisition of the 75% interest in Hauser resulted in the recognition of intangible assets, comprised primarily of a Colombian air operator certificate, of $1.2 million. The fair value of the noncontrolling interest was determined using a discounted cash flow analysis.

The noncontrolling interest partner has a right to put its interest to the Company, and the Company has a right to call its partner’s 25% ownership interest, each upon the occurrence of certain events and at fair value at the time of exercise as determined by an independent accounting firm. As a result of this put right, the noncontrolling interest related to Hauser is recorded in the mezzanine section of the consolidated balance sheets as it does not meet the definition of a liability or equity under U.S. GAAP.

Aeróleo. On October 1, 2015, the Company’s partner in Aeróleo transfered its 50% economic and 80% voting interest in Aeróleo to a third party (see Note 5). The resulting consolidation of Aeróleo was accounted for as a business acquisition in accordance with ASC 805. In connection with the transfer, the Company entered into a shareholders agreement with its new partner that includes, among other things, a put/call option arrangement which gives the Company the right to purchase at any time, and the new partner the right to put to the Company after two years, the new partner’s interest in Aeróleo.

The Company recorded all identifiable assets acquired and liabilities assumed at the estimated acquisition date fair value in accordance with ASC 805 - Business Combinations. The consolidation resulted in an immaterial gain on consolidation. The table below presents the fair value of Aeróleo’s identifiable assets acquired and liabilities assumed as of October 1, 2015 (unaudited, in thousands):



Assets
Cash	$	1,418
Other current assets	11,788
Non-current assets	3,386
Total assets	$	16,592
Liabilities and redeemable noncontrolling interest
Current liabilities	9,206
Non-current liabilities	7,320
Redeemable noncontrolling interest	4
Total liabilities and redeemable noncontrolling interest	$	16,530

The consolidated statements of operations for the years ended December 31, 2016 and 2015, include operating revenues of $29.3 million and $13.4 million, respectively, and net loss of $4.4 million and $1.5 million, respectively, as a result of the consolidation of Aeróleo including the effects of intercompany eliminations beginning with the date of consolidation. The table below represents the Company’s pro forma results of operations assuming the consolidation of Aeróleo took place on January 1, 2015 (unaudited, in thousands):



	Historical		Pro Forma		Pro Forma
	Results		Adjustments		Results
Year Ended December 31, 2015
Operating revenues	$	281,837	$	35,789	$	317,626
Net income	$	8,705	$	377	$	9,082

As a part of the same transaction, the Company acquired the remaining 50% ownership interest in Era do Brazil, a single purpose entity which owns one AW139 helicopter that is leased to Aeróleo. Era do Brazil is now a wholly-owned subsidiary.

FBO. On May 1, 2015, the Company sold its FBO business at Ted Stevens Anchorage International Airport to Piedmont Hawthorne Aviation, LLC. Pursuant to a membership interests purchase agreement, Piedmont Hawthorne Aviation, LLC acquired 100% of Era Group’s wholly-owned subsidiary, Era FBO LLC, for cash proceeds of $14.3 million. The Company recognized a pre-tax gain of $12.9 million on the sale.

Capital Expenditures. The Company’s capital expenditures were $39.2 million, $60.1 million and $106.7 million in 2016, 2015 and 2014, respectively, and consisted primarily of helicopter acquisitions and deposits on future helicopter deliveries, spare helicopter parts, equipment and building improvements. The Company records helicopter acquisitions in property and equipment and places helicopters in service once completion work has been finalized and the helicopters are ready for use. The Company sold or otherwise disposed of property and equipment for cash proceeds of $28.6 million, $25.3 million and $7.1 million in 2016, 2015 and 2014, respectively. A summary of changes to our owned helicopter fleet during the years ended December 31, 2016, 2015 and 2014 were as follows:



Equipment Additions	2016	2015	2014
	₍₁₎	₍₂₎
Light helicopters - single engine	—	1	—
Light helicopters - twin engine	—	3	—
Medium helicopters	—	—	4
Heavy helicopters	2	4	—
	2	8	4

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(1)	Includes two heavy helicopters that were not yet placed in service as of December 31, 2016.


(2)	Includes three light-twin helicopters and one single engine helicopter acquired in connection with the acquisition of Hauser.



Equipment Dispositions	2016	2015	2014
		₍₁₎
Light helicopters - single engine	2	10	—
Light helicopters - twin engine	1	3	—
Medium helicopters	6	7	3
Heavy helicopters	—	—	—
	9	20	3

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(1)	Includes two single engine helicopters disposed in sales-type leases.