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, 2015

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 September 30, 2015



	Parent			Guarantors			Non-guarantors			Eliminations			Consolidated
	(in thousands, except share data)
ASSETS
Current assets:
Cash and cash equivalents	$	10,877		$	—		$	2,931		$	—		$	13,808
Receivables:
Trade, net of allowance for doubtful accounts of $1,999	40			39,364			94			—			39,498
Other	—			2,460			43			10			2,513
Inventories, net	—			24,735			197			—			24,932
Deferred income taxes	4,134			—			—			(1,858		)	2,276
Prepaid expenses and other	607			2,326			122			—			3,055
Escrow deposits	190			2,107			—			—			2,297
Total current assets	15,848			70,992			3,387			(1,848		)	88,379
Property and equipment	—			1,150,020			25,673			—			1,175,693
Accumulated depreciation	—			(308,103		)	(2,967		)	—			(311,070		)
Net property and equipment	—			841,917			22,706			—			864,623
Equity investments and advances	—			30,256			—			—			30,256
Investments in consolidated subsidiaries	198,957			—			—			(198,957		)	—
Goodwill	—			352			1,237			—			1,589
Intangible assets	—			—			1,411			—			1,411
Intercompany receivables	501,929			—			1,199			(503,128		)	—
Other assets	5,704			6,818			—			—			12,522
Total assets	$	722,438		$	950,335		$	29,940		$	(703,933	)	$	998,780
LIABILITIES, REDEEMABLE NONCONTROLLING INTREST AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses	$	449		$	10,895		$	693		$	—		$	12,037
Accrued wages and benefits	—			7,828			33			—			7,861
Accrued interest	3,977			15			—			—			3,992
Current portion of long-term debt	—			25,335			—			—			25,335
Derivative instruments	—			71			—			—			71
Accrued income taxes	—			7,404			1			10			7,415
Other current liabilities	960			3,767			8			—			4,735
Total current liabilities	5,386			55,315			735			10			61,446
Long-term debt	242,754			—			119			—			242,873
Deferred income taxes	—			215,038			818			(1,858		)	213,998
Intercompany payables	—			481,130			21,998			(503,128		)	—
Other liabilities	—			1,956			—			—			1,956
Total liabilities	248,140			753,439			23,670			(504,976		)	520,273
Redeemable noncontrolling interest	—			—			4,783			—			4,783
Equity:
Era Group Inc. stockholders’ equity:
Common stock, $0.01 par value, 60,000,000 shares authorized; 20,499,050 outstanding, exclusive of treasury shares	207			—			—			—			207
Additional paid-in capital	432,774			99,812			5,056			(104,868		)	432,774
Retained earnings	43,949			97,658			(3,569		)	(94,089		)	43,949
Treasury shares, at cost, 151,193 shares	(2,632		)	—			—			—			(2,632		)
Accumulated other comprehensive income, net of tax	—			92			—			—			92
Total Era Group Inc. stockholders’ equity	474,298			197,562			1,487			(198,957		)	474,390
Noncontrolling interest in subsidiary	—			(666		)	—			—			(666		)
Total equity	474,298			196,896			1,487			(198,957		)	473,724
Total liabilities, redeemable noncontrolling interest and stockholders’ equity	$	722,438		$	950,335		$	29,940		$	(703,933	)	$	998,780

Supplemental Condensed Consolidating Balance Sheet as of December 31, 2014



	Parent			Guarantors			Non-guarantors			Eliminations			Consolidated
	(in thousands, except share data)
ASSETS
Current assets:
Cash and cash equivalents	$	16,481		$	22,188		$	2,198		$	—		$	40,867
Receivables:
Trade, net of allowance for doubtful accounts of $1,955	39			33,351			—			—			33,390
Other, net of allowance for doubtful accounts of $437	65			1,997			—			—			2,062
Inventories, net	—			26,869			—			—			26,869
Deferred income taxes	4,083			—			—			(2,087		)	1,996
Prepaid expenses and other	424			2,237			—			—			2,661
Total current assets	21,092			86,642			2,198			(2,087		)	107,845
Property and equipment	—			1,161,330			9,937			—			1,171,267
Accumulated depreciation	—			(306,010		)	(2,131		)	—			(308,141		)
Net property and equipment	—			855,320			7,806			—			863,126
Equity investments and advances	—			31,753			—			—			31,753
Investments in consolidated subsidiaries	182,294			—			—			(182,294		)	—
Goodwill	—			352			—			—			352
Intercompany receivables	616,932			12,258			1,395			(630,585		)	—
Other assets	6,914			7,184			—			—			14,098
Total assets	$	827,232		$	993,509		$	11,399		$	(814,966	)	$	1,017,174
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued expenses	$	299		$	14,817		$	4		$	—		$	15,120
Accrued wages and benefits	—			7,521			—			—			7,521
Accrued interest	930			19			—			—			949
Current portion of long-term debt	—			27,426			—			—			27,426
Derivative instruments	784			325			—			—			1,109
Accrued income taxes	—			267			—			—			267
Other current liabilities	556			2,606			—			—			3,162
Total current liabilities	2,569			52,981			4			—			55,554
Long-term debt	282,118			—			—			—			282,118
Deferred income taxes	—			219,114			—			(2,087		)	217,027
Intercompany payables	81,986			536,341			12,258			(630,585		)	—
Other liabilities	—			2,111			—			—			2,111
Total liabilities	366,673			810,547			12,262			(632,672		)	556,810
Equity:
Era Group Inc. stockholders’ equity:
Common stock, $0.01 par value, 60,000,000 shares authorized; 20,371,672 outstanding, exclusive of treasury shares	204			—			—			—			204
Additional paid-in capital	429,109			99,845			496			(100,341		)	429,109
Retained earnings	31,797			83,312			(1,359		)	(81,953		)	31,797
Treasury shares, at cost, 18,609 shares	(551		)	—			—			—			(551		)
Accumulated other comprehensive income, net of tax	—			95			—			—			95
Total Era Group Inc. stockholders’ equity	460,559			183,252			(863		)	(182,294		)	460,654
Noncontrolling interest in subsidiary	—			(290		)	—			—			(290		)
Total equity	460,559			182,962			(863		)	(182,294		)	460,364
Total liabilities and stockholders’ equity	$	827,232		$	993,509		$	11,399		$	(814,966	)	$	1,017,174

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



	Parent			Guarantors			Non-guarantors			Eliminations			Consolidated
	(in thousands)
Operating revenues	$	—		$	69,491		$	655		$	(405	)	$	69,741
Costs and expenses:
Operating	—			42,812			600			(405		)	43,007
Administrative and general	1,773			9,329			136			—			11,238
Depreciation	—			11,674			512			—			12,186
Total costs and expenses	1,773			63,815			1,248			(405		)	66,431
Gains on asset dispositions, net	—			1,813			—			—			1,813
Operating income (loss)	(1,773		)	7,489			(593		)	—			5,123
Other income (expense):
Interest income	4			228			—			—			232
Interest expense	(2,801		)	(298		)	(22		)	—			(3,121		)
Intercompany interest income (expense)	—			165			(165		)	—			—
Gain on debt extinguishment	(16		)	—			—			—			(16		)
Derivative losses, net	—			8			—			—			8
Foreign currency gains, net	4			75			67			—			146
Total other income (expense)	(2,809		)	178			(120		)	—			(2,751		)
Income (loss) before income taxes and equity earnings	(4,582		)	7,667			(713		)	—			2,372
Income tax expense (benefit)	(2,593		)	4,340			(404		)	—			1,343
Income (loss) before equity earnings	(1,989		)	3,327			(309		)	—			1,029
Equity losses, net of tax	—			(376		)	—			—			(376		)
Equity in earnings (losses) of subsidiaries	2,850			—			—			(2,850		)	—
Net income (loss)	861			2,951			(309		)	(2,850		)	653
Net loss attributable to non-controlling interest in subsidiary	—			49			159			—			208
Net income (loss) attributable to Era Group Inc.	$	861		$	3,000		$	(150	)	$	(2,850	)	$	861

Supplemental Condensed Consolidating Statements of Operations for the Three Months Ended September 30, 2014



	Parent			Guarantors			Non-guarantors		Eliminations			Consolidated
	(in thousands)
Operating revenues	$	—		$	90,120		$	527	$	(137	)	$	90,510
Costs and expenses:
Operating	—			54,289			58		(65		)	54,282
Administrative and general	2,047			10,966			—		(72		)	12,941
Depreciation	—			11,601			145		—			11,746
Total costs and expenses	2,047			76,856			203		(137		)	78,969
Gains on asset dispositions, net	—			42			—		—			42
Operating income	(2,047		)	13,306			324		—			11,583
Other income (expense):
Interest income	18			111			1		—			130
Interest expense	(3,444		)	(185		)	—		—			(3,629		)
Derivative losses, net	(1,605		)	(98		)	—		—			(1,703		)
Foreign currency losses, net	(188		)	(297		)	—		—			(485		)
Other, net	(2		)	(1		)	—		—			(3		)
Total other income (expense)	(5,221		)	(470		)	1		—			(5,690		)
Income (loss) before income taxes and equity earnings	(7,268		)	12,836			325		—			5,893
Income tax expense (benefit)	(3,540		)	6,250			158		—			2,868
Income (loss) before equity earnings	(3,728		)	6,586			167		—			3,025
Equity earnings, net of tax	—			1,286			—		—			1,286
Equity in earnings (losses) of subsidiaries	7,994			—			—		(7,994		)	—
Net income (loss)	4,266			7,872			167		(7,994		)	4,311
Net income attributable to non-controlling interest in subsidiary	—			(45		)	—		—			(45		)
Net income (loss) attributable to Era Group Inc.	$	4,266		$	7,827		$	167	$	(7,994	)	$	4,266

Supplemental Condensed Consolidating Statements of Operations for the Nine Months Ended September 30, 2015



	Parent			Guarantors			Non-guarantors			Eliminations			Consolidated
	(in thousands)
Operating revenues	$	—		$	207,550		$	1,087		$	(743	)	$	207,894
Costs and expenses:
Operating	—			125,886			1,253			(743		)	126,396
Administrative and general	4,889			26,582			289			—			31,760
Depreciation	—			34,341			845			—			35,186
Total costs and expenses	4,889			186,809			2,387			(743		)	193,342
Gains on asset dispositions, net	—			7,564			(2,605		)	—			4,959
Operating income (loss)	(4,889		)	28,305			(3,905		)	—			19,511
Other income (expense):
Interest income	12			786			2			—			800
Interest expense	(8,909		)	(605		)	(33		)	—			(9,547		)
Intercompany interest income (expense)	—			489			(489		)	—			—
Gain on debt extinguishment	248			—			—			—			248
Derivative losses, net	—			(14		)	—			—			(14		)
Foreign currency gains (losses), net	620			(2,958		)	67			—			(2,271		)
Gain on sale of FBO	12,946			—			—			—			12,946
Other, net	—			—			(9		)	—			(9		)
Total other income (expense)	4,917			(2,302		)	(462		)	—			2,153
Income (loss) before income taxes and equity earnings	28			26,003			(4,367		)	—			21,664
Income tax expense (benefit)	12			11,314			(1,900		)	—			9,426
Income (loss) before equity earnings	16			14,689			(2,467		)	—			12,238
Equity losses, net of tax	—			(719		)	—			—			(719		)
Equity in earnings (losses) of subsidiaries	12,136			—			—			(12,136		)	—
Net income (loss)	12,152			13,970			(2,467		)	(12,136		)	11,519
Net loss attributable to non-controlling interest in subsidiary	—			376			257			—			633
Net income (loss) attributable to Era Group Inc.	$	12,152		$	14,346		$	(2,210	)	$	(12,136	)	$	12,152

Supplemental Condensed Consolidating Statements of Operations for the Nine Months Ended September 30, 2014



	Parent			Guarantors			Non-guarantors			Eliminations			Consolidated
	(in thousands)
Operating revenues	$	—		$	256,013		$	1,034		$	(514	)	$	256,533
Costs and expenses:
Operating	—			158,686			212			(297		)	158,601
Administrative and general	5,496			29,061			—			(217		)	34,340
Depreciation	—			34,021			437			—			34,458
Total costs and expenses	5,496			221,768			649			(514		)	227,399
Gains on asset dispositions, net	—			6,072			—			—			6,072
Operating income	(5,496		)	40,317			385			—			35,206
Other income (expense):
Interest income	63			351			4			—			418
Interest expense	(10,617		)	(605		)	—			—			(11,222		)
Intercompany interest income (expense)	—			254			(254		)	—			—
Derivative losses, net	(1,605		)	(139		)	—			—			(1,744		)
Note receivable impairment	(2,457		)	—			—			—			(2,457		)
Foreign currency losses, net	2,257			(2,778		)	—			—			(521		)
Other, net	10			—			—			—			10
Total other income (expense)	(12,349		)	(2,917		)	(250		)	—			(15,516		)
Income (loss) before income taxes and equity earnings	(17,845		)	37,400			135			—			19,690
Income tax expense (benefit)	(7,370		)	15,444			56			—			8,130
Income (loss) before equity earnings	(10,475		)	21,956			79			—			11,560
Equity earnings, net of tax	—			2,321			—			—			2,321
Equity in earnings (losses) of subsidiaries	24,407			—			—			(24,407		)	—
Net income (loss)	13,932			24,277			79			(24,407		)	13,881
Net loss attributable to non-controlling interest in subsidiary	—			51			—			—			51
Net income (loss) attributable to Era Group Inc.	$	13,932		$	24,328		$	79		$	(24,407	)	$	13,932

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



	Parent		Guarantors			Non-guarantors			Eliminations			Consolidated
	(in thousands)
Net income (loss)	$	861	$	2,951		$	(309	)	$	(2,850	)	$	653
Other comprehensive income (loss):
Foreign currency translation adjustments	—		(1		)	137			—			136
Total other comprehensive income (loss)	—		(1		)	137			—			136
Comprehensive income (loss)	861		2,950			(172		)	(2,850		)	789
Comprehensive loss attributable to non-controlling interest in subsidiary	—		49			159			—			208
Comprehensive income (loss) attributable to Era Group Inc.	$	861	$	2,999		$	(13	)	$	(2,850	)	$	997

Supplemental Condensed Consolidating Statements of Comprehensive Income for the Three Months Ended September 30, 2014



	Parent		Guarantors			Non-guarantors		Eliminations			Consolidated
	(in thousands)
Net income (loss)	$	4,266	$	7,872		$	167	$	(7,994	)	$	4,311
Other comprehensive loss:
Foreign currency translation adjustments	—		(65		)	—		—			(65		)
Income tax benefit	—		18			—		—			18
Total other comprehensive loss	—		(47		)	—		—			(47		)
Comprehensive income (loss)	4,266		7,825			167		(7,994		)	4,264
Comprehensive income attributable to non-controlling interest in subsidiary	—		(45		)	—		—			(45		)
Comprehensive income (loss) attributable to Era Group Inc.	$	4,266	$	7,780		$	167	$	(7,994	)	$	4,219

Supplemental Condensed Consolidating Statements of Comprehensive Income for the Nine Months Ended September 30, 2015



	Parent		Guarantors			Non-guarantors			Eliminations			Consolidated
	(in thousands)
Net income (loss)	$	12,152	$	13,970		$	(2,467	)	$	(12,136	)	$	11,519
Other comprehensive loss:
Foreign currency translation adjustments	—		(4		)	—			—			(4		)
Income tax benefit	—		1			—			—			1
Total other comprehensive loss	—		(3		)	—			—			(3		)
Comprehensive income (loss)	12,152		13,967			(2,467		)	(12,136		)	11,516
Comprehensive loss attributable to non-controlling interest in subsidiary	—		376			257			—			633
Comprehensive income (loss) attributable to Era Group Inc.	$	12,152	$	14,343		$	(2,210	)	$	(12,136	)	$	12,149

Supplemental Condensed Consolidating Statements of Comprehensive Income for the Nine Months Ended September 30, 2014



	Parent		Guarantors			Non-guarantors		Eliminations			Consolidated
	(in thousands)
Net income (loss)	$	13,932	$	24,277		$	79	$	(24,407	)	$	13,881
Other comprehensive loss:
Foreign currency translation adjustments	—		(119		)	—		—			(119		)
Income tax benefit	—		42			—		—			42
Total other comprehensive loss	—		(77		)	—		—			(77		)
Comprehensive income (loss)	13,932		24,200			79		(24,407		)	13,804
Comprehensive loss attributable to non-controlling interest in subsidiary	—		51			—		—			51
Comprehensive income (loss) attributable to Era Group Inc.	$	13,932	$	24,251		$	79	$	(24,407	)	$	13,855

Supplemental Condensed Consolidating Statements of Cash Flows for the Nine Months Ended September 30, 2015



	Parent			Guarantors			Non-guarantors			Eliminations			Consolidated
	(in thousands)
Net cash provided by (used in) operating activities	$	(5,604	)	$	25,718		$	15,729		$	—		$	35,843
Cash flows from investing activities:
Purchases of property and equipment	—			(47,257		)	(11,773		)	11,770			(47,260		)
Proceeds from disposition of property and equipment	—			32,401			—			(11,770		)	20,631
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	—			514			—			—			514
Principal payments on third party notes receivable	—			25			—			—			25
Escrow deposits, net	—			(2,007		)	—			(190		)	(2,197		)
Repayment of intercompany debt	—			12,959			—			(12,959		)	—
Net cash used in investing activities	—			(3,365		)	(14,938		)	—			(18,303		)
Cash flows from financing activities:
Payments on long-term debt	—			(2,091		)	(58		)	(50,000		)	(52,149		)
Proceeds from Revolving Credit Facility	—			—			—			35,000			35,000
Extinguishment of long-term debt	—			—			—			(24,335		)	(24,335		)
Proceeds from share award plans	—			—			—			1,096			1,096
Purchase of treasury shares	—			—			—			(2,069		)	(2,069		)
Tax expense on vested restricted stock	—			—			—			(114		)	(114		)
Repayment of intercompany debt	—			(40,422		)	—			40,422			—
Net cash used in financing activities	—			(42,513		)	(58		)	—			(42,571		)
Effects of exchange rate changes on cash and cash equivalents	—			(2,028		)	—			—			(2,028		)
Net increase (decrease) in cash and cash equivalents	(5,604		)	(22,188		)	733			—			(27,059		)
Cash and cash equivalents, beginning of period	16,481			22,188			2,198			—			40,867
Cash and cash equivalents, end of period	$	10,877		$	—		$	2,931		$	—		$	13,808

Supplemental Condensed Consolidating Statements of Cash Flows for the Nine Months Ended September 30, 2014



	Parent			Guarantors			Non-guarantors		Eliminations			Consolidated
	(in thousands)
Net cash provided by (used in) operating activities	$	(2,296	)	$	63,542		$	720	$	—		$	61,966
Cash flows from investing activities:
Purchases of property and equipment	—			(63,966		)	—		—			(63,966		)
Proceeds from disposition of property and equipment	—			7,020			—		—			7,020
Investments in and advances to equity investees	—			(125		)	—		—			(125		)
Proceeds from sale of interest in equity investees	—			6,381			—		—			6,381
Principal payments on notes due from equity investees	—			474			—		—			474
Principal payments on third party notes receivable	—			424			—		—			424
Net cash used in investing activities	—			(49,792		)	—		—			(49,792		)
Cash flows from financing activities:
Payments on long-term debt	—			(2,187		)	—		—			(2,187		)
Revolving Credit Facility issuance costs	—			—			—		(2,446		)	(2,446		)
Proceeds from share award plans	—			—			—		1,458			1,458
Repayment of intercompany debt	—			(988		)	—		988			—
Net cash used in financing activities	—			(3,175		)	—		—			(3,175		)
Effects of exchange rate changes on cash and cash equivalents	—			23			—		—			23
Net decrease in cash and cash equivalents	(2,296		)	10,598			720		—			9,022
Cash and cash equivalents, beginning of period	24,635			5,403			1,297		—			31,335
Cash and cash equivalents, end of period	$	22,339		$	16,001		$	2,017	$	—		$	40,357