Crude Oil ( ) Brent Crude ( ) Natural Gas ( ) S&P 500 ( ) PHLX Oil ( )

– THIRD QUARTER GAAP NET LOSS OF $1.0 MILLION ($0.03 LOSS PER DILUTED SHARE) AND NINE MONTH GAAP NET INCOME OF $69.2 MILLION ($1.94 PER DILUTED SHARE)
– THIRD QUARTER AND NINE MONTH ADJUSTED NET INCOME OF $24.7 MILLION ($0.70 PER DILUTED SHARE) AND $102.2 MILLION ($2.87 PER DILUTED SHARE)
– THIRD QUARTER RESULTS IMPACTED BY $0.31 PER DILUTED SHARE OF FOREIGN CURRENCY VOLATILITY, WHILE BRISTOW VALUE ADDED AND CASH FLOW IMPROVED
– COMPANY ANNOUNCES ACQUISITION OF 85% INTEREST IN AIRNORTH IN AUSTRALIA, ADDING TO OUR GLOBAL TURNKEY AVIATION SERVICES FOR CLIENTS IN A FINANCIALLY ACCRETIVE TRANSACTION
– COMPANY LOWERS GUIDANCE FOR FULL FISCAL YEAR 2015 ADJUSTED EPS TO $4.05 – $4.45 FROM $4.70 – $5.20

Bristow Group Inc. (BRS) today reported a GAAP net loss for the December 2014 quarter of $1.0 million, or a $0.03 loss per diluted share, compared to net income of $18.9 million, or $0.51 per diluted share, in the same period a year ago.

Adjusted net income, which excludes special items and asset disposition effects, decreased 21% to $24.7 million, or $0.70 per diluted share, for the December 2014 quarter, compared to $31.3 million, or $0.85 per diluted share, in the December 2013 quarter. Results for the December 2014 quarter were significantly impacted by foreign currency impacts of $13.9 million, which decreased diluted earnings per share, on an adjusted and unadjusted basis, by $0.31 for the period.

Adjusted earnings before interest, taxes, depreciation, amortization and rent (“adjusted EBITDAR”), which also excludes special items and asset disposition effects, was $109.1 million for the December 2014 quarter, an 8% increase from $100.7 million in the same period a year ago.

GAAP net income for the nine months ended December 31, 2014 decreased 55.7% to $69.2 million, or $1.94 per diluted share, from $156.4 million, or $4.28 per diluted share, in the same nine-month period a year ago. Adjusted net income for the nine months ended December 31, 2014 decreased 10% to $102.2 million, or $2.87 per diluted share, from $113.9 million, or $3.11 per diluted share, in the same nine-month period a year ago.  However, adjusted EBITDAR improved 12% to $347.5 million in the current year-to-date period from $311.0 million in the first nine months of our last fiscal year. Results for the nine months ended December 31, 2014 were also significantly impacted by foreign currency impacts of $27.3 million, which decreased diluted earnings per share, on an adjusted and unadjusted basis, by $0.60 for the period.

“The December 2014 quarter had similar financial results to our second quarter fiscal year 2015 and for similar reasons,” said Jonathan E. Baliff, President and Chief Executive Officer of Bristow Group.  “In spite of many challenges faced by our clients and employees, we were able to safely deliver top line revenue growth of over 15%. This revenue growth, and the continued delivery of significant positive cash flow from operations, drove an over $34 million increase in Bristow Value Added (“BVA”), improved returns on capital, and $410 million of ending liquidity during the first nine months of fiscal 2015. This BVA and operating cash flow increase in the face of global macro-economic volatility demonstrates the strength of our underlying business model, balance sheet and client relationships.”

“The recent rapid decline in oil prices is leading to a reduction in capital expenditures by most of our clients. We anticipated these developments in the latter half of calendar 2014 and implemented a proactive strategy to help our clients meet their cost reduction objectives.” Jonathan added, “We are also proactively making cost and capital efficiency improvements in partnership with our OEM and Lessor partners. This will allow our business model to thrive and capitalize on this environment for our clients, as we continue to execute our growth plan including the startup of the UK search and rescue contract in April 2015.”

We continue to see top line strength in our operations driving improvements in adjusted EBITDAR year-over-year, with an increase in operating revenue of 15% for the December 2014 quarter and 18% for the first nine months of the fiscal year over the prior year periods. The results for the December 2014 quarter were significantly impacted by:

  • Unfavorable foreign currency exchange impacts of $13.9 million driven primarily by a strengthening U.S. dollar, including $7.7 million reflected as a reduction in earnings from unconsolidated affiliates related to our affiliate in Brazil,
  • An increase in general and administrative expense of $23.6 million primarily related to higher incentive compensation costs of $13.4 million, primarily resulting from improved year-over-year BVA and stock price performance versus our peer group, and higher professional fees of $5.1 million primarily related to ongoing Operational Excellence and other initiatives,
  • Non-cash impairment charges related to aircraft of $25.6 million and inventory of $3.8 million, and
  • The effect of an accounting correction of $5.3 million.

Adjusted operating income, adjusted net income and adjusted earnings per share, which are non-GAAP measures as discussed below, include the significant impact of foreign currency exchange impacts and general and administrative expense increases as these items are associated with our business operations. Foreign currency exchange impacts in the December 2014 quarter decreased earnings per share by $0.31, on an adjusted and unadjusted basis, compared to a $0.07 decrease in the December 2013 quarter.

Adjusted EBITDAR improved despite the impact of foreign currency exchange and increased general and administrative expenses as a result of the following:

  • An increase in activity in our Europe business unit, including the addition of Eastern Airways in February 2014,
  • The startup of new contracts in our Australia business unit,
  • Improved contract terms in our West Africa business unit,
  • The recovery of $1.8 million from an original equipment manufacturer (“OEM”) provided in the form of maintenance credits that resulted from a settlement for aircraft performance issues and related costs that benefited results in our Europe and Australia business units, and
  • A favorable shift in the mix to larger aircraft under contract and improved utilization that benefited our North America business unit.

Our net income and diluted earnings per share also were impacted by changes in our aircraft leasing.  Net income and diluted earnings per share, on an unadjusted and adjusted basis, were impacted by a pre-tax $18.0 million increase in rent expense over the December 2013 quarter, as we increased the number of leased aircraft.

In terms of cash generation from our business and management of our capital, net cash provided by operating activities was $162.4 million for the nine months ended December 31, 2014 compared to $137.3 million for the same period a year ago.  Our total liquidity, including cash on hand and availability on our revolving credit facility, was $412.4 million as of December 31, 2014 compared to $529.9 million as of March 31, 2014. Despite our use of significant cash for capital expenditures of $499.3 million and net debt pay down of $25.3 million year to date, our liquidity remains strong.

BUSINESS UNIT RESULTS

Europe Business Unit

Bristow acquired a 60% interest in Eastern Airways in February 2014, which contributed $34.8 million in operating revenue and $5.4 million in adjusted EBITDAR for the December 2014 quarter representing a significant portion of a 22.3% improvement in operating revenue and a 14.7% improvement in adjusted EBITDAR over the December 2013 quarter in our Europe Business Unit. Operating revenue and adjusted EBITDAR also improved due to an increase in activity and addition of a new contract in Norway. Adjusted EBITDAR also benefited from the recovery of $1.1 million in maintenance credits from an OEM during the December 2014 quarter, while being negatively affected by a $5.5 million unfavorable impact from foreign currency exchange rate changes.

West Africa Business Unit

Improved contract terms in our West Africa Business Unit resulted in a 1.4% increase in operating revenue for the December 2014 quarter compared to the December 2013 quarter. However, a $2.0 million unfavorable impact from foreign currency exchange rate changes effected adjusted EBITDAR during the December 2014 quarter. The increase in revenue and cost control measures implemented in the previous quarters are reflected in the 4.8% increase in adjusted EBITDAR to $27.9 million for the December 2014 quarter compared to $26.6 million for the December 2013 quarter, despite the unfavorable impact of foreign currency exchange rate changes.

North America Business Unit

The increase in the number of large aircraft on contract in the U.S. Gulf of Mexico drove a 13.6% increase in operating revenue in North America, partially offset by the planned closure of operations in Alaska and a decline in small aircraft on contract compared to the prior year quarter. This change in the mix of fleet on contract in the U.S. Gulf of Mexico to larger aircraft and improved utilization resulted in a 37.4% improvement in adjusted EBITDAR to $24.9 million in the December 2014 quarter compared to $18.2 million in the December 2013 quarter.

Australia Business Unit

Operating revenue for our Australia Business Unit increased 51.5% to $52.4 million in the December 2014 quarter from $34.6 million in the December 2013 quarter due to the ramp up of new contracts, including a significant contract with INPEX. As a result of the contracts and a benefit from the recovery of $0.7 million in maintenance credits from an OEM during the December 2014 quarter, adjusted EBITDAR increased to $13.3 million from $5.2 million in the December 2013 quarter. The results for the December 2014 quarter were negatively impacted by $1.5 million of unfavorable foreign currency exchange rate changes.

Other International Business Unit

Operating revenue for our Other International Business Unit increased 5.9% in the December 2014 quarter primarily due to a contract in Tanzania that started in the fourth quarter of fiscal year 2014, partially offset by a decline in revenue due to contracts ending in Malaysia and Mexico and lower activity in Brazil and Trinidad. Adjusted EBITDAR for the December 2014 quarter decreased to $6.8 million compared to $10.2 million in the December 2013 quarter, primarily due to lower earnings from unconsolidated affiliates and the end of the contract in Malaysia, partially offset by the contract in Tanzania. Líder, our unconsolidated affiliate in Brazil, results for the December 2014 quarter were unfavorably impacted by $7.7 million from foreign currency exchange rate changes.

GUIDANCE

We are lowering our adjusted diluted earnings per share guidance for the full fiscal year 2015 to $4.05 to $4.45, primarily resulting from foreign currency exchange effects. Our previous guidance for the full fiscal year 2015 was $4.70 to $5.20.

“Our fiscal third quarter of 2015, similar to the second quarter of 2015, was impacted by foreign exchange and other costs, resulting in a decrease in earnings per share year over year.  Nevertheless, our management team is focused on our operating performance in this challenging environment, and we currently expect a strong fourth quarter of the fiscal year,” said John H. Briscoe, Senior Vice President and Chief Financial Officer of Bristow Group. “Our global business continues to deliver increases in gross cash flow returns and BVA, while we continue to focus on creating a balanced return for our shareholders, especially the commitment to double the dividend every three to five years. Our dedicated employees have stepped up to the challenge, while remaining very focused on safety. For example, the team is raising the bar with significant optimization and efficiency efforts underway including a new global ERP system, the first phase of which went live in October 2014. We are focused on controlling costs and capital expenditures in this environment for our clients, our employees and our shareholders.”

As a reminder, our adjusted diluted earnings per share guidance excludes the effect of special items and asset dispositions because their timing and amounts are more variable and less predictable.  Further, this guidance is based on current foreign currency exchange rates.  In providing this guidance, we have not included the impact of any changes in accounting standards or significant acquisitions and divestitures.  Events or other circumstances that we do not currently anticipate or cannot predict, including changes in the market and industry, could result in earnings per share for fiscal year 2015 that are significantly above or below this guidance.  Factors that could cause such changes are described below under the Forward-Looking Statements Disclosure and the Risk Factors in our quarterly report on Form 10-Q for the quarter ended December 31, 2014 and annual report on Form 10-K for the fiscal year ended March 31, 2014.

DIVIDEND AND SHARE REPURCHASE

On February 5, 2015, our Board of Directors approved our sixteenth consecutive quarterly dividend. This dividend of $0.32 per share will be paid on March 16, 2015 to shareholders of record on February 27, 2015. Based on shares outstanding as of December 31, 2014, the total quarterly dividend payment will be approximately $11.1 million. On November 6, 2014, our Board of Directors extended the date to repurchase shares of our common stock through November 5, 2015 and increased the remaining authorized repurchase amount to a total of $150 million. During the December 2014 quarter, we spent $37.4 million to repurchase 565,622 shares of our common stock.  Since we first commenced a share repurchase program in December 2011, we have repurchased over 8% of our common stock. As of January 30, 2015, we had $125.0 million of repurchase authority remaining.

AIRNORTH TRANSACTION

On January 29, 2015, Bristow Helicopters Australia PTY LTD (“Bristow Helicopters Australia”) acquired an 85% interest in Capiteq Limited, operating under the name Airnorth, for cash of A$30.3 million ($24.0 million) with possible earn out consideration of up to A$17 million ($13.5 million) to be paid over three years based on the achievement of specified financial performance thresholds. Airnorth is Northern Australia’s largest regional fixed wing operator based in Darwin, Northern Territory, Australia with both scheduled and charter services which focus primarily on the energy and mining industries in northern and western Australia as well as international service to Dili, Timor-Leste and the Philippines.  Airnorth’s fleet consists of thirteen aircraft (nine turboprop and four new technology regional jets) and its customer base includes many energy companies to which Bristow Group already provides helicopter service. We believe this investment will strengthen our ability to provide point to point transportation services for existing Australian based passengers, expand helicopter services in certain areas in Southeast Asian markets and create a more integrated logistics solution for global clients.

The acquisition of Airnorth will be accounted for under the purchase method and the results will be consolidated from the date of acquisition in the Australia business unit. The purchase price will be allocated based on the fair value of assets acquired and liabilities assumed as of the acquisition date.

We expect this acquisition will contribute approximately A$18 million ($14.4 million) in operating revenue and A$4.2 million ($3.3 million) of adjusted EBITDAR in the fourth quarter of fiscal year 2015 and approximately A$105-115 million ($83-91 million) in operating revenue and A$25-30 million ($20-24 million) of adjusted EBITDAR for fiscal year 2016.

CONFERENCE CALL

Management will conduct a conference call starting at 10:00 a.m. ET (9:00 a.m. CT) on Friday, February  6, 2015 to review financial results for the fiscal year 2015 third quarter ended December 31, 2014.  This release and the most recent investor slide presentation are available in the investor relations area of our web page at www.bristowgroup.com.  The conference call can be accessed as follows:

Via Webcast:

  • Visit Bristow Group’s investor relations Web page at www.bristowgroup.com
  • Live: Click on the link for “Bristow Group Fiscal 2015 Third Quarter Earnings Conference Call”
  • Replay: A replay via webcast will be available approximately one hour after the call’s completion and will be accessible for approximately 90 days

Via Telephone within the U.S.:

  • Live: Dial toll free 1-877-407-8293
  • Replay: A telephone replay will be available through February 20, 2015 and may be accessed by calling toll free 1-877-660-6853, passcode: 13598729#

Via Telephone outside the U.S.:

  • Live: Dial 1-201-689-8349
  • Replay: A telephone replay will be available through February 20, 2015 and may be accessed by calling 1-201-612-7415, passcode: 13598729#

ABOUT BRISTOW GROUP INC.

Bristow Group Inc. is the leading provider of helicopter services to the worldwide offshore energy industry based on the number of aircraft operated and one of two helicopter service providers to the offshore energy industry with global operations.  The Company has major transportation operations in the North Sea, Nigeria and the U.S. Gulf of Mexico, and in most of the other major offshore oil and gas producing regions of the world, including Australia, Brazil, Canada, Russia and Trinidad.  For more information, visit the Company’s website at www.bristowgroup.com.

FORWARD-LOOKING STATEMENTS DISCLOSURE

Statements contained in this news release that state the Company’s or management’s intentions, hopes, beliefs, expectations or predictions of the future are forward-looking statements.  These forward-looking statements include statements regarding earnings guidance, expected contract revenue, capital deployment strategy, operational and capital performance, shareholder return, liquidity, market and industry conditions and the expected impact of the Airnorth acquisition.  It is important to note that the Company’s actual results could differ materially from those projected in such forward-looking statements.  Risks and uncertainties include without limitation:  fluctuations in the demand for our services; fluctuations in worldwide prices of and supply and demand for oil and natural gas; fluctuations in levels of oil and natural gas production, exploration and development activities; the impact of competition; actions by clients; the risk of reductions in spending on helicopter services by governmental agencies; changes in tax and other laws and regulations; changes in foreign exchange rates and controls; risks associated with international operations; operating risks inherent in our business, including the possibility of declining safety performance; general economic conditions including the capital and credit markets; our ability to obtain financing; the risk of grounding of segments of our fleet for extended periods of time or indefinitely; our ability to re-deploy our aircraft to regions with greater demand; our ability to acquire additional aircraft and dispose of older aircraft through sales into the aftermarket; the possibility that we do not achieve the anticipated benefit of our fleet investment program; availability of employees; and political instability, war or acts of terrorism in any of the countries where we operate.  Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained from time to time in the Company’s SEC filings, including but not limited to the Company’s quarterly report on Form 10-Q for the quarter ended December 31, 2014 and annual report on Form 10-K for the fiscal year ended March 31, 2014.  Bristow Group Inc. disclaims any intention or obligation to revise any forward-looking statements, including financial estimates, whether as a result of new information, future events or otherwise.

Linda McNeill
Investor Relations
(713) 267-7622

(financial tables follow)

 

 

BRISTOW GROUP INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share amounts and percentages)

(Unaudited)

Three Months Ended
December 31,

Nine Months Ended
December 31,

2014

2013

2014

2013

Gross revenue:

Operating revenue from non-affiliates

$

408,388

$

351,193

$

1,242,462

$

1,041,290

Operating revenue from affiliates

21,930

22,371

65,649

70,451

Reimbursable revenue from non-affiliates

29,822

38,760

100,203

116,840

Reimbursable revenue from affiliates

11

76

460,140

412,335

1,408,314

1,228,657

Operating expense:

Direct cost

299,230

261,590

898,650

773,612

Reimbursable expense

28,549

36,677

94,466

109,734

Depreciation and amortization

23,625

23,655

77,164

70,332

General and administrative

72,531

48,948

194,687

135,735

423,935

370,870

1,264,967

1,089,413

Gain (loss) on disposal of assets

(26,331)

3,982

(25,594)

(803)

Earnings from unconsolidated affiliates, net of losses

(958)

(15,945)

419

1,115

Operating income

8,916

29,502

118,172

139,556

Interest expense, net

(6,976)

(6,846)

(21,675)

(35,413)

Gain on sale of unconsolidated affiliate

3,921

3,921

103,924

Other income (expense), net

(5,223)

(696)

(9,143)

(575)

Income before provision for income taxes

638

21,960

91,275

207,492

Provision for income taxes

(567)

(2,946)

(18,376)

(51,682)

Net income

71

19,014

72,899

155,810

Net (income) loss attributable to noncontrolling interests

(1,039)

(87)

(3,676)

609

Net income (loss) attributable to Bristow Group

$

(968)

$

18,927

$

69,223

$

156,419

Earnings (loss) per common share:

Basic

$

(0.03)

$

0.52

$

1.96

$

4.32

Diluted

$

(0.03)

$

0.51

$

1.94

$

4.28

Non-GAAP measures:

Adjusted operating income

$

43,564

$

49,056

$

161,303

$

165,293

Adjusted operating margin

10.1

%

13.1

%

12.3

%

14.9

%

Adjusted EBITDAR

$

109,056

$

100,677

$

347,494

$

310,968

Adjusted EBITDAR margin

25.3

%

27.0

%

26.6

%

28.0

%

Adjusted net income

$

24,719

$

31,331

$

102,159

$

113,891

Adjusted diluted earnings per share

$

0.70

$

0.85

$

2.87

$

3.11

 

 

BRISTOW GROUP INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

December 31,
2014

March 31,
2014

ASSETS

Current assets:

Cash and cash equivalents

$

121,366

$

204,341

Accounts receivable from non-affiliates

288,657

292,650

Accounts receivable from affiliates

6,914

4,793

Inventories

139,027

137,463

Assets held for sale

25,837

29,276

Prepaid expenses and other current assets

50,140

53,084

Total current assets

631,941

721,607

Investment in unconsolidated affiliates

257,073

262,615

Property and equipment – at cost:

Land and buildings

152,030

145,973

Aircraft and equipment

2,472,230

2,646,150

2,624,260

2,792,123

Less – Accumulated depreciation and amortization

(494,872)

(523,372)

2,129,388

2,268,751

Goodwill

53,828

56,680

Other assets

107,512

88,604

Total assets

$

3,179,742

$

3,398,257

LIABILITIES AND STOCKHOLDERS’ INVESTMENT

Current liabilities:

Accounts payable

$

90,047

$

89,818

Accrued wages, benefits and related taxes

76,829

71,192

Income taxes payable

7,558

13,588

Other accrued taxes

8,455

9,302

Deferred revenue

28,824

31,157

Accrued maintenance and repairs

18,707

17,249

Accrued interest

5,530

16,157

Other accrued liabilities

54,440

45,853

Deferred taxes

12,670

12,372

Short-term borrowings and current maturities of long-term debt

14,277

14,207

Deferred sale leaseback advance

55,671

136,930

Total current liabilities

373,008

457,825

Long-term debt, less current maturities

803,911

827,095

Accrued pension liabilities

62,110

86,823

Other liabilities and deferred credits

59,953

78,126

Deferred taxes

162,895

169,519

Temporary equity

23,660

22,283

Stockholders’ investment:

Common stock

375

373

Additional paid-in capital

776,000

762,813

Retained earnings

1,280,508

1,245,220

Accumulated other comprehensive loss

(184,782)

(156,506)

Treasury shares

(184,796)

(103,965)

Total Bristow Group stockholders’ investment

1,687,305

1,747,935

Noncontrolling interests

6,900

8,651

Total stockholders’ investment

1,694,205

1,756,586

Total liabilities and stockholders’ investment

$

3,179,742

$

3,398,257

 

 

BRISTOW GROUP INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

Nine Months Ended
December 31,

2014

2013

Cash flows from operating activities:

Net income

$

72,899

$

155,810

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

77,164

70,332

Deferred income taxes

(7,875)

(3,132)

Write-off of deferred financing fees

660

12,733

Discount amortization on long-term debt

3,212

2,719

Loss on disposal of assets

25,594

803

Gain on sale of unconsolidated affiliate

(3,921)

(103,924)

Impairment of inventories

7,167

2,364

Stock-based compensation

13,651

10,694

Equity in earnings from unconsolidated affiliates less than dividends received

4,196

7,926

Tax benefit related to stock-based compensation

(1,642)

(5,328)

Increase (decrease) in cash resulting from changes in:

Accounts receivable

(11,350)

31,786

Inventories

(15,578)

(1,106)

Prepaid expenses and other assets

(13,354)

(4,002)

Accounts payable

19,353

(31,727)

Accrued liabilities

4,547

4,868

Other liabilities and deferred credits

(12,313)

(13,517)

Net cash provided by operating activities

162,410

137,299

Cash flows from investing activities:

Capital expenditures

(499,285)

(526,048)

Proceeds from asset dispositions

404,361

244,867

Proceeds from sale of unconsolidated affiliate

4,185

112,210

Net cash used in investing activities

(90,739)

(168,971)

Cash flows from financing activities:

Proceeds from borrowings

347,860

283,977

Debt issuance costs

(15,152)

Repayment of debt

(373,169)

(232,063)

Partial prepayment of put/call obligation

(46)

(42)

Acquisition of noncontrolling interest

(3,170)

(2,078)

Proceeds from assignment of aircraft purchase agreements

106,113

Repurchase of common stock

(80,831)

(16,544)

Common stock dividends paid

(33,935)

(27,318)

Issuance of common stock

2,217

14,368

Tax benefit related to stock-based compensation

1,642

5,328

Net cash provided by (used in) financing activities

(139,432)

116,589

Effect of exchange rate changes on cash and cash equivalents

(15,214)

22,690

Net increase (decrease) in cash and cash equivalents

(82,975)

107,607

Cash and cash equivalents at beginning of period

204,341

215,623

Cash and cash equivalents at end of period

$

121,366

$

323,230

 

 

BRISTOW GROUP INC. AND SUBSIDIARIES

SELECTED OPERATING DATA

(In thousands, except flight hours and percentages)

(Unaudited)

Three Months Ended
December 31,

Nine Months Ended
December 31,

2014

2013

2014

2013

Flight hours (excluding Bristow Academy and unconsolidated affiliates):

Europe(1)

23,327

16,428

71,589

49,593

West Africa

10,495

11,485

31,631

34,597

North America

12,249

12,345

35,415

44,686

Australia

3,047

2,406

8,573

7,463

Other International

3,915

3,584

11,310

10,582

Consolidated

53,033

46,248

158,518

146,921

Operating revenue:

Europe

$

193,842

$

158,458

$

601,797

$

451,969

West Africa

80,513

79,421

240,547

231,075

North America

62,399

54,916

175,897

173,504

Australia

52,425

34,606

146,126

108,145

Other International

32,588

30,778

103,926

95,821

Corporate and other

9,987

16,321

44,235

54,229

Intra-business unit eliminations

(1,436)

(936)

(4,417)

(3,002)

Consolidated

$

430,318

$

373,564

$

1,308,111

$

1,111,741

Operating income (loss):

Europe

$

29,001

$

29,729

$

108,951

$

82,708

West Africa

24,909

21,777

60,596

59,261

North America

14,937

6,666

35,406

23,953

Australia

4,256

(1,027)

7,496

4,761

Other International

2,887

(12,808)

16,245

14,288

Corporate and other

(40,743)

(18,817)

(84,928)

(44,612)

Gain (loss) on disposal of assets

(26,331)

3,982

(25,594)

(803)

Consolidated

$

8,916

$

29,502

$

118,172

$

139,556

Operating margin:

Europe

15.0

%

18.8

%

18.1

%

18.3

%

West Africa

30.9

%

27.4

%

25.2

%

25.6

%

North America

23.9

%

12.1

%

20.1

%

13.8

%

Australia

8.1

%

(3.0)

%

5.1

%

4.4

%

Other International

8.9

%

(41.6)

%

15.6

%

14.9

%

Consolidated

2.1

%

7.9

%

9.0

%

12.6

%

Adjusted EBITDAR:

Europe

$

64,233

$

55,995

$

202,445

$

152,677

West Africa

27,886

26,601

73,226

73,396

North America

24,935

18,150

65,937

53,865

Australia

13,334

5,187

35,029

19,374

Other International

6,758

10,214

28,105

43,532

Corporate and other

(28,090)

(15,470)

(57,248)

(31,876)

Consolidated

$

109,056

$

100,677

$

347,494

$

310,968

Adjusted EBITDAR margin:

Europe

33.1

%

35.3

%

33.6

%

33.8

%

West Africa

34.6

%

33.5

%

30.4

%

31.8

%

North America

40.0

%

33.1

%

37.5

%

31.0

%

Australia

25.4

%

15.0

%

24.0

%

17.9

%

Other International

20.7

%

33.2

%

27.0

%

45.4

%

Consolidated

25.3

%

27.0

%

26.6

%

28.0

%

 

 

BRISTOW GROUP INC. AND SUBSIDIARIES

AIRCRAFT COUNT

As of December 31, 2014

(Unaudited)

Aircraft in Consolidated Fleet

Percentage

of Current Period

Operating

Revenue

Helicopters

Small

Medium

Large

Training

Fixed

Wing

Unconsolidated

Affiliates(4)

Total (2)(3)

Total

Europe

46

%

11

72

30

113

113

West Africa

18

%

8

30

6

3

47

47

North America

13

%

30

22

15

67

67

Australia

11

%

2

8

21

31

31

Other International

8

%

28

9

37

131

168

Corporate and other

4

%

74

74

74

Total

100

%

40

99

123

74

33

369

131

500

Aircraft not currently in fleet:(5)

On order

10

27

37

Under option

14

25

39

 

(1)

Includes flight hours for Eastern Airways beginning in February 2014 totaling 6,556 and 21,175 for the three and nine months ended December 31, 2014, respectively.

(2) 

Includes 18 aircraft held for sale and 115 leased aircraft as follows:

 

Held for Sale Aircraft in Consolidated Fleet

Helicopters

Small

Medium

Large

Training

Fixed

Wing

Total

Europe

8

8

West Africa

2

2

4

North America

Australia

2

2

Other International

3

3

Corporate and other

1

1

Total

5

12

1

18

Leased Aircraft in Consolidated Fleet

Helicopters

Small

Medium

Large

Training

Fixed

Wing

Total

Europe

3

37

13

53

West Africa

1

1

2

North America

1

13

5

19

Australia

2

2

7

11

Other International

Corporate and other

30

30

Total

3

19

50

30

13

115

 

(3) 

The average age of our fleet, excluding training aircraft, was 10 years as of December 31, 2014.

(4) 

The 131 aircraft operated by our unconsolidated affiliates do not include those aircraft leased from us. Includes 59 helicopters (primarily medium) and 27 fixed wing aircraft owned and managed by Líder, our unconsolidated affiliate in Brazil, which is included in our Other International business unit.

(5) 

This table does not reflect aircraft which our unconsolidated affiliates may have on order or under option.

 

 

BRISTOW GROUP INC. AND SUBSIDIARIES

GAAP RECONCILIATIONS

These financial measures have not been prepared in accordance with generally accepted accounting principles (“GAAP”) and have not been audited or reviewed by our independent registered public accounting firm.  These financial measures are therefore considered non-GAAP financial measures.  A description of the adjustments to and reconciliations of these non-GAAP financial measures to the most comparable GAAP financial measures is as follows:

 

Three months ended

Nine months ended

December 31,

December 31,

2014

2013

2014

2013

(In thousands, except

 per share amounts)

Adjusted operating income

$

43,564

$

49,056

$

161,303

$

165,293

Gain (loss) on disposal of assets

(26,331)

3,982

(25,594)

(803)

Special items

(8,317)

(23,536)

(17,537)

(24,934)

Operating income

$

8,916

$

29,502

$

118,172

$

139,556

Adjusted EBITDAR

$

109,056

$

100,677

$

347,494

$

310,968

Gain (loss) on disposal of assets

(26,331)

3,982

(25,594)

(803)

Special items

(5,086)

(23,536)

(16,207)

78,990

Depreciation and amortization

(23,625)

(23,655)

(77,164)

(70,332)

Rent expense

(46,282)

(28,255)

(114,839)

(74,630)

Interest expense

(7,094)

(7,253)

(22,415)

(36,701)

Provision for income taxes

(567)

(2,946)

(18,376)

(51,682)

Net income

$

71

$

19,014

$

72,899

$

155,810

Adjusted income tax expense

$

(6,520)

$

(10,096)

$

(27,901)

$

(28,756)

Tax (expense) benefit on gain (loss) on disposal of asset

5,298

(836)

5,153

169

Tax benefit (expense) on special items

655

7,986

4,372

(23,095)

Income tax expense

$

(567)

$

(2,946)

$

(18,376)

$

(51,682)

Adjusted effective tax rate(1)

20.2

%

24.3

%

20.9

%

20.2

%

Effective tax rate (1)

88.9

%

13.4

%

20.1

%

24.9

%

Adjusted net income

$

24,719

$

31,331

$

102,159

$

113,891

Gain (loss) on disposal of assets

(21,033)

3,146

(20,441)

(634)

Special items

(4,654)

(15,550)

(12,495)

43,162

Net income (loss) attributable to Bristow Group

$

(968)

$

18,927

$

69,223

$

156,419

Adjusted diluted earnings per share

$

0.70

$

0.85

$

2.87

$

3.11

Gain (loss) on disposal of assets

(0.60)

0.09

(0.57)

(0.02)

Special items

(0.13)

(0.42)

(0.35)

1.18

Diluted earnings (loss) per share

(0.03)

0.51

1.94

4.28

 

(1) 

Effective tax rate is calculated by dividing income tax expense by pretax net income.  Adjusted effective tax rate is calculated by dividing adjusted income tax expense by adjusted pretax net income.

 

 

Three Months Ended
December 31, 2014

Adjusted

Operating

Income

Adjusted

EBITDAR

Adjusted

Net Income

Adjusted

Diluted

Earnings

Per

Share

(In thousands, except per share amounts)

Gain on sale of unconsolidated affiliate(1)

$

$

3,921

$

2,549

$

0.07

Inventory allowances(4)

(3,805)

(3,805)

(3,044)

(0.09)

Repurchase of 6 ¼% Senior Notes(5)

(690)

(594)

(0.02)

Accounting correction(6)

(5,325)

(5,325)

(4,207)

(0.12)

Accrued maintenance cost reversal(7)

813

813

642

0.02

Total special items

$

(8,317)

$

(5,086)

$

(4,654)

(0.13)

Three Months Ended
December 31, 2013

Adjusted

Operating

Income

Adjusted

EBITDAR

Adjusted

Net Income

Adjusted

Diluted

Earnings

Per

Share

(In thousands, except per share amounts)

North America restructuring(2)

$

(2,101)

$

(2,101)

$

(1,366)

$

(0.04)

Líder taxes(11)

(19,335)

(19,335)

(12,567)

(0.34)

Severance costs in the Southern North Sea(12)

(2,100)

(2,100)

(1,617)

(0.04)

Total special items

$

(23,536)

$

(23,536)

$

(15,550)

(0.42)

Nine Months Ended
December 31, 2014

Adjusted

Operating

Income

Adjusted

EBITDAR

Adjusted

Net Income

Adjusted

Diluted

Earnings

Per

Share

(In thousands, except per share amounts)

Gain on sale of unconsolidated affiliate(1)

$

$

3,921

$

2,549

$

0.07

North America restructuring(2)

(1,611)

(1,611)

(1,047)

(0.03)

CEO succession(3)

(5,501)

(5,501)

(3,576)

(0.10)

Inventory allowances(4)

(7,167)

(7,167)

(5,734)

(0.16)

Repurchase of 6 ¼% Senior Notes(5)

(2,591)

(2,113)

(0.06)

Accounting correction(6)

(4,071)

(4,071)

(3,216)

(0.09)

Accrued maintenance cost reversal(7)

813

813

642

0.02

Total special items

$

(17,537)

$

(16,207)

$

(12,495)

(0.35)

Nine Months Ended
December 31, 2013

Adjusted

Operating

Income

Adjusted

EBITDAR

Adjusted

Net Income

Adjusted

Diluted

Earnings

Per

Share

(In thousands, except per share amounts)

Gain on sale of unconsolidated affiliate(8)

$

$

103,924

$

67,897

$

1.86

Cancellation of potential financing(9)

(8,276)

(0.23)

Inventory allowances(10)

(2,364)

(2,364)

(1,536)

(0.04)

North America restructuring(2)

(2,650)

(2,650)

(1,723)

(0.05)

Líder taxes(11)

(17,820)

(17,820)

(11,583)

(0.32)

Severance costs in the Southern North Sea(12)

(2,100)

(2,100)

(1,617)

(0.04)

Total special items

$

(24,934)

$

78,990

$

43,162

1.18

 

(1)

Relates to a gain resulting from the sale of our 50% interest in HCA for £2.7 million, or approximately $4.2 million

(2) 

Relates to a charges associated with the restructuring of our North America business unit and planned closure of our Alaska operations which related primarily to employee severance and retention costs.

(3)  

Relates to CEO succession cost.

(4) 

During the nine months ended December 31, 2014, we increased our inventory allowance by $3.8 million related to older aircraft models which we are in the process of exiting.

(5) 

Relates to premium and fees associated with the repurchase of some of our 6 ¼% Senior Notes due 2022.

(6) 

Relates to an accounting correction that impacted income by $5.3 million and $4.1 million for the three and nine months ended December 31, 2014, respectively.

(7) 

Relates to the reversal maintenance costs associated with a prior obligation to repair certain aircraft in our fleet we ultimately did not incur.

(8) 

Relates to a gain resulting from the sale of our 50% interest in the FB Entities for £74 million, or approximately $112.2 million.

(9) 

Relates to the cancellation of potential financing.

(10) 

During the nine months ended December 31, 2013, we increased our inventory allowance by $2.4 million as a result of our review of excess inventory on aircraft model types we ceased ownership of or classified all or a significant portion of as held for sale. A majority of this allowance relates to small aircraft types operating primarily in our North America business unit as we continue to move toward operating a fleet of mostly large and medium aircraft in this market.

(11) 

Relates to a payment Líder made to the government of Brazil for tax amnesty resulting in a $19.3 million impact for the December 2013 quarter and $17.8 million impact for the nine months ended December 31, 2013.

(12) 

Relates to $2.1 million of severance costs in the Southern North Sea in the December 2013 quarter.