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

Annual report pursuant to Section 13 and 15(d)

INVESTMENTS, AT EQUITY, ADVANCES TO 50% OR LESS OWNED COMPANIES

INVESTMENTS, AT EQUITY, ADVANCES TO 50% OR LESS OWNED COMPANIES

12 Months Ended

Dec. 31, 2013

Equity Method Investments and Joint Ventures [Abstract]

INVESTMENTS, AT EQUITY, ADVANCES TO 50% OR LESS OWNED COMPANIES

INVESTMENTS, AT EQUITY, AND ADVANCES TO 50% OR LESS OWNED COMPANIES

Investments, at equity, and advances to 50% or less owned companies as of December 31 were as follows (in thousands):

	Ownership	2013		2012
Dart	50.0%	$	25,264	$	25,212
Aeróleo ⁽¹⁾	50.0%	—		—
Era do Brazil ⁽²⁾	50.0%	—		—
Era Training Center	50.0%	6,236		6,740
Lake Palma⁽³⁾	51.0%	3,411		2,512
Heli-Union Era Australia	45.0%	75		232
		$	34,986	$	34,696

____________________


(1)	Investment impaired in March 2012.


(2)	Consolidated entity as of September 30, 2012.


(3)	The Company owns a 51% financial interest in this joint venture; however, it does not consolidate the venture as it only controls 50% of the venture’s voting rights.

Combined Condensed Financials. Summarized financial information for the Company’s investments, at equity, as of and for the years ended December 31 was as follows (in thousands) for Dart Holding Company Ltd.:



	2013		2012
Current Assets	$	19,231	$	18,845
Noncurrent Assets	37,636		42,423
Current Liabilities	8,613		8,754
Noncurrent Liabilities	6,963		12,590



	2013		2012		2011
Operating Revenues	$	39,185	$	42,870	$	43,198
Costs and Expenses:
Operating and administrative	31,538		33,706		34,431
Depreciation and amortization	5,213		5,375		2,746
	36,751		39,081		37,177
Operating Income	$	2,434	$	3,789	$	6,021
Net Income	$	789	$	1,245	$	3,974



	2013		2012
Current Assets	$	4,378	$	2,278
Noncurrent Assets	20,018		22,611
Current Liabilities	2,789		2,523
Noncurrent Liabilities	7,918		9,146



	2013			2012		2011
Operating Revenues	$	4,682		$	20,009	$	53,827
Costs and Expenses:
Operating and administrative	1,035			16,221		51,726
Depreciation	3,450			3,165		3,081
	4,485			19,386		54,807
Operating Income	$	197		$	623	$	(980	)
Net Income (Loss)	$	(476	)	$	540	$	(1,590	)

As of December 31, 2013 and 2012, cumulative undistributed net earnings (losses) of 50% or less owned companies included in the Company’s consolidated accumulated deficit were a loss of $4.6 million and $5.8 million, respectively.

Dart . A wholly owned subsidiary of the Company, Era DHS LLC, acquired 49% of the capital stock of Dart Helicopter Services LLC (“Dart Helicopters”), a sales, marketing and parts manufacturing organization based in North America that engineers and manufactures after-market parts and equipment for sale to helicopter manufacturers and operators. During 2009, the Company provided a $0.3 million loan to Dart Helicopters with a maturity of June 2012 at an annual interest rate of 5%, which is payable quarterly with principal due at maturity. On February 28, 2011, the Company made an additional investment of $5.0 million in Dart Helicopters and, on July 31, 2011, contributed its ownership in Dart Helicopters to Dart Holding Company Ltd. (“Dart”) in exchange for a 50% interest in Dart and a note receivable of $5.1 million. The note receivable bears an interest rate of 4.0% per annum, requires quarterly principal and interest payments and matures on July 31, 2023. During the years ended December 31, 2013, 2012 and 2011, the Company purchased $2.9 million, $1.7 million and $2.3 million, respectively, of products from Dart Helicopters and Dart. The Company received no management fees during the years ended December 31, 2013 and 2012. The management fees earned during the year ended December 31, 2011 were not material.

Aeróleo. On July 1, 2011, the Company acquired a 50% economic interest and a 20% voting interest in Aeróleo Taxi Aereo S/A (“Aeróleo”), a Brazilian entity that provides helicopter transport services to the Brazilian offshore oil and gas industry, for $4.8 million in cash. The Company and its partner also each loaned Aeróleo $6.0 million at an interest rate of 6% per annum. On March 1, 2012, the Company recorded an impairment charge of $5.9 million, net of tax, on its investment in and advances to Aeróleo. The impairment charge resulted from difficulties experienced by Aeróleo following one of its customer’s cancellation of certain contracts for a number of AW139 helicopters under dry-lease from the Company. The Company leases 11 helicopters to Aeróleo and for the years ended December 31, 2013 and 2012, and the period July 1, 2011 through December 31, 2011, the Company recognized $16.2 million, $17.6 million and $14.0 million, respectively, of operating revenues from these leases, of which $21.0 million and $5.3 million was outstanding as of December 31, 2013 and 2012, respectively (See Notes 1 and 20).

Era Training Center. Era Training Center LLC (“Era Training Center”) operates flight training devices and provides training services to the Company and third-party customers. During the years ended December 31, 2013, 2012 and 2011, the Company provided helicopter, management and other services to the joint venture totaling $0.4 million, $0.5 million and $0.7 million, respectively, and paid the joint venture $0.7 million, $0.8 million and $0.1 million for simulator fees in 2013, 2012 and 2011, respectively. In December 2010, Era Training Center signed a $3.2 million note with the Company to purchase two flight simulators. The note is secured by the two flight simulators and bears interest at 6%. Terms of the note require quarterly interest-only payments for the first year and $0.1 million quarterly payments of principal and interest thereafter until January 2026. In 2012 and 2011, the Company made additional advances of $0.8 and $1.2 million under the note, respectively.

Lake Palma. Lake Palma, S.L. (“Lake Palma”) operates seven helicopters in Spain. The Company received advances of $1.2 million in 2012, and did not receive any advances in 2013.

Era do Brazil. On July 1, 2011, the Company and its partner each contributed $4.8 million in cash to Era do Brazil LLC (“Era do Brazil”), a 50-50 joint venture. Era do Brazil immediately acquired a helicopter, subject to a lease to Aeróleo, from the Company for $11.5 million ($9.5 million in cash and a $2.0 million note payable). During the year ended December 31, 2012, the Company loaned $10.8 million to Era do Brazil secured by a helicopter purchased from the Company in 2011 and Era do Brazil's ownership interests. Upon receipt of the proceeds from the loan, Era do Brazil repaid the outstanding principal amount of $1.6 million remaining on the original helicopter acquisition note due to the Company and loaned $9.2 million to Aeróleo in the form of two notes, each of an equal amount. Era do Brazil then distributed the two notes due from Aeróleo to its members. As a result of these transactions, Era do Brazil is a highly leveraged entity with all its outstanding debt due to the Company. As the primary beneficiary, the Company has consolidated Era do Brazil in its financial statements effective September 30, 2012. The Company provides maintenance services to Era do Brazil and for the period January 1, 2012 through September 30, 2012 and the period July 1, 2011 through December 31, 2011, the Company recognized $0.4 million and $0.3 million, respectively, of operating revenues from these services.

- Definition

The entire disclosure for equity method investments and joint ventures. Equity method investments are investments that give the investor the ability to exercise significant influence over the operating and financial policies of an investee. Joint ventures are entities owned and operated by a small group of businesses as a separate and specific business or project for the mutual benefit of the members of the group.

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