ESCROW DEPOSITS |
12 Months Ended |
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Dec. 31, 2016 | |
| Escrow Deposits [Abstract] | |
| ESCROW DEPOSITS |
ESCROW DEPOSITS
From time to time, the Company enters into Qualified Exchange Accommodation Agreements with a third party to meet the like-kind exchange requirements of Section 1031 of the Internal Revenue Code of 1986, as amended (the “Code”) and the provisions of Revenue Procedure 2000-37. In accordance with these provisions, the Company is permitted to deposit proceeds from the sale of assets into escrow accounts for the purpose of acquiring other assets and qualifying for the temporary deferral of taxable gains realized. Consequently, the Company establishes escrow accounts with financial institutions for the deposit of funds received on sale of equipment, which were designated for replacement property within a specified period of time. As of December 31, 2016 and 2015, the Company had $3.8 million and $0, respectively, deposited in like-kind exchange escrow accounts.
During the year ended December 31, 2016, the Company sold two AW139 medium helicopters for total cash proceeds of $18.2 million, net of fees. The sale transactions were treated as tax-free like-kind exchanges, and the proceeds were deposited with a qualified intermediary to be held until a qualifying asset was delivered. The Company used $7.4 million of the proceeds to purchase a AW189 heavy helicopter in December 2016, which completed the first like-kind exchange transaction. The Company identified an asset for the second like-kind exchange transaction and withdrew $7.0 million to make a progress payment on a S92 heavy helicopter in December 2016. The Company intends to complete the second like-kind exchange during the second quarter of 2017.
During the year ended December 31, 2015, the Company sold one EC135 light twin helicopter for cash proceeds of $2.8 million, net of fees. The sale proceeds were deposited with a qualified intermediary to be held until a qualifying asset was delivered, however the Company was unable to purchase a qualifying asset prior to the expiration of the 180-day period subsequent to the closing date of the sale. As a result, the proceeds of $2.8 million were returned to the Company, and the sale was treated as a taxable event. Also during 2015, the Company transferred title of one AW139 helicopter to Hauser in connection with its acquisition of Hauser (see Note 4). This transfer was also treated as a tax-free like-kind exchange whereby Hauser deposited $11.8 million into an escrow account with a qualified intermediary for the benefit of the Company. The Company used the proceeds to purchase a S92 heavy helicopter in December 2015.
During the year ended December 31, 2014, the Company sold two B212 medium helicopters for cash proceeds totaling $6.4 million, net of fees, and deposited the proceeds with a qualified intermediary. A qualifying property was not identified for the first sale prior to the expiration of the required 45-day period subsequent to the closing date. As a result, the proceeds of $3.0 million were returned to the Company, and the sale was treated as a taxable event. The Company identified a qualifying property for the second sale within the required 45-day period subsequent to the closing date, and the like-kind exchange was completed prior to expiration of the required 180-day period subsequent to the closing date.
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