Bristow Group Reports Financial Results For Its 2014 Fiscal Third Quarter And Nine Months Ended December 31, 2013 - THIRD QUARTER AND NINE MONTH GAAP NET INCOME OF $18.9 MILLION ($0.51 PER DILUTED SHARE) AND $156.4 MILLION ($4.28 PER DILUTED SHARE) - THIRD QUARTER AND NINE MONTH ADJUSTED NET INCOME OF $31.3 MILLION ($0.85 PER DILUTED SHARE) AND $113.9 MILLION ($3.11 PER DILUTED SHARE), WHICH EXCLUDES THE IMPACT OF SPECIAL ITEMS AND ASSET DISPOSITIONS - COMPANY ANNOUNCES ACQUISITION OF 60% INTEREST IN EASTERN AIRLINES IN THE UK, IMMEDIATELY ACCRETIVE TO BVA AND EARNINGS PER SHARE - COMPANY REAFFIRMS GUIDANCE FOR FULL FISCAL YEAR 2014 ADJUSTED EPS OF $4.25 - $4.55 PR Newswire HOUSTON, Feb. 6, 2014 HOUSTON, Feb. 6, 2014 /PRNewswire/ --Bristow Group Inc. (NYSE: BRS) today reported net income for the December 2013 quarter of $18.9 million, or $0.51 per diluted share, compared to net income of $36.4 million, or $1.00 per diluted share, in the same period a year ago. Adjusted net income, which excludes special items and asset disposition effects, decreased 27% to $31.3 million, or $0.85 per diluted share, for the December 2013 quarter, compared to $42.6 million, or $1.17 per diluted share, in the December 2012 quarter. Adjusted earnings before interest, taxes, depreciation, amortization and rent ("adjusted EBITDAR"), which also excludes special items and asset disposition effects, was $100.7 million for the December 2013 quarter compared to $109.2 million in the same period a year ago, a decrease of 8%. Net cash provided by operating activities totaled $137.3 million for the nine months ended December 31, 2013, compared to $202.7 million for the same period a year ago. The decrease in adjusted EBITDAR, adjusted net income and adjusted diluted earnings per share for the December 2013 quarter compared to the December 2012 quarter was primarily driven by certain contract revenue being delayed from the December 2013 quarter to the March 2014 quarter, leading to LACE rate declines while overall costs increased slightly on a sequential basis versus the September 2013 quarter; specifics include: oA decrease in operating revenue of $6.9 million in our Australia business unit primarily resulting from the ending of short-term contracts, while overall maintenance expense remained flat and labor costs increased in anticipation of new contracts that start during the fourth quarter of fiscal year 2014 and early fiscal year 2015, and oAn increase in operating expense of $3.4 million in our Other International business unit due to start up of operations in a new market with revenue to follow in the fourth quarter; We also saw additional expenses in the December 2013 quarter including: oMaintenance expense of $9.5 million and labor costs of $9.0 million in our Europe business unit, which primarily resulted from the return to service of Eurocopter EC225 aircraft in this market, and costs associated with our Sikorsky S-92 fleet in Norway, oAn increase in labor costs in our West Africa business unit of $2.6 million, and oAn increase in general and administrative expense at the corporate level of $3.3 million primarily due to higher incentive compensation levels driven by a year-over-year increase in BVA and improved stock price. "Our fiscal third quarter saw margin declines as we experienced delays in some contract work that shifted into the next quarter, incurred costs as we commenced operations with new aircraft in new locations like Tanzania and incurred costs with the return to service of our EC225 fleet. However, we continue to see growth for our premier service offerings into the future," said William E. Chiles, President and Chief Executive Officer of Bristow Group. "Our expectations for a strong fourth quarter allow us to reaffirm our adjusted EPS guidance for fiscal year 2014 at $4.25 - $4.55." THIRD QUARTER FY2014 RESULTS oOperating revenue increased 8% to $373.6 million compared to $346.7 million in the same period a year ago. oOperating income decreased 60% to $29.5 million compared to $74.1 million in the December 2012 quarter. oGAAP net income decreased by 48% to $18.9 million, or $0.51 per diluted share, compared to $36.4 million, or $1.00 per diluted share, in the December 2012 quarter. oGAAP results for the December 2013 quarter were affected by the following items that are excluded from our adjusted non-GAAP financial measures for the quarter: oLower earnings from Líder of $19.3 million related to a payment made by Líder under a tax amnesty program in November 2013 and related tax expense recorded by Líder. This special item decreased net income by $12.6 million and earnings per share by $0.34, oA gain on disposal of assets of $4.0 million compared to a gain of $7.4 million in the December 2012 quarter, oA charge of $2.1 million in direct costs related to the restructuring of our North America business unit and the planned closure of our Alaska operations which related primarily to employee severance and retention costs. We expect to incur approximately $2.1 million in additional costs related mostly to severance and retention through August 2014 to provide services for the remaining Alaska contracts and to close our operations, and oA charge of $2.1 million in direct costs related to severance costs in the Southern North Sea. oAdjusted net income, which also excludes special items and asset disposition effects, decreased 27% to $31.3 million, or $0.85 per diluted share, compared to $42.6 million, or $1.17 per diluted share, in the December 2012 quarter. oAdjusted EBITDAR, which excludes special items and asset disposition effects, decreased 8% to $100.7 million compared to $109.2 million in the same period a year ago. oCash as of December 31, 2013 totaled $323.2 million compared to $215.6 million as of March 31, 2013. Our total liquidity, including cash on hand and availability on our revolving credit facility, was $617.2 million as of December 31, 2013 compared to $415.0 million as of March 31, 2013, a 49% increase. THIRD QUARTER FY2014 BUSINESS UNIT RESULTS Europe Business Unit The net addition of eight large aircraft, along with an overall increase in activity with existing clients and new contracts primarily in the U.K. Northern North Sea, resulted in increased revenue of $22.3 million and were the primary contributors to revenue growth in our Europe Business Unit. We increased our fleet in this region by executing operating leases for new large oil and gas aircraft beginning in late fiscal year 2012 and continuing through the December 2013 quarter, with the addition of the four search and rescue ("SAR") aircraft. Adjusted EBITDAR increased almost 14% year-over-year; however, adjusted EBITDAR margin decreased to 35.3% in the December 2013 quarter compared to 39.5% in the December 2012 quarter primarily due to maintenance and salary increases year over year. Sequential quarterly adjusted EBITDAR margins remained flat at 35.3% in both the December and September 2013 quarters. West Africa Business Unit Pricing improvements drove revenue increases in our West Africa Business Unit, leading to a 3.8% increase in operating revenue for the December 2013 quarter compared to the December 2012 quarter. However, an increase in salaries and benefits resulted in a 0.8% decrease in adjusted EBITDAR compared with the December 2012 quarter as well as a decrease in adjusted EBITDAR margin to 33.5% for the December 2013 quarter compared to 35.0% for the December 2012 quarter. Sequentially, quarterly adjusted EBITDAR margin increased to 33.5% for the December 2013 quarter compared to 30.4% for the September 2013 quarter primarily due to lower training, travel and maintenance expense. North America Business Unit The decrease in small aircraft on contract in the U.S. Gulf of Mexico, partially offset by an increase in medium and large aircraft in this business unit, drove the reduction in our revenue in North America. However, North America's adjusted EBITDAR and adjusted EBITDAR margin improved to $18.2 million and 33.1%, respectively, in the December 2013 quarter compared to $17.3 million and 29.1%, respectively, in the December 2012 quarter, driven primarily by a lower level of bad debt expense in the December 2013 quarter, an increase in earnings from unconsolidated affiliates, net of losses, related to our Cougar investment and an increase in the number of large and medium aircraft on contract in the U.S. Gulf of Mexico. Sequentially, adjusted EBITDAR margin improved to 33.1% in the December 2013 quarter compared to 31.0% in the September 2013 quarter primarily due to higher equity earnings from our investment in Cougar. We recognize that the current operating environment in the North America business unit is challenging for our fleet mix and we are proactively restructuring our business by exiting the Alaska market and selling smaller aircraft with a long-term strategy of operating larger aircraft to service deepwater client contracts in the U.S. Gulf of Mexico. Australia Business Unit Operating revenue for our Australia Business Unit decreased 16.7% to $34.6 million in the December 2013 quarter from $41.6 million in the December 2012 quarter due to the end of short-term contracts and the impact of foreign currency exchange rate changes. Further, as a result of costs incurred in the December 2013 quarter in anticipation of client contracts that start in the fourth quarter of this current fiscal year and fiscal year 2015, adjusted EBITDAR and adjusted EBITDAR margin decreased in the December 2013 quarter to $5.2 million and 15.0%, respectively, from $11.4 million and 27.3%, respectively, in the December 2012 quarter. We continue to incur salaries and benefits, depreciation, insurance, training and lease costs in anticipation of the new contracts that start during the fourth quarter of fiscal year 2014 and fiscal year 2015. Other International Business Unit Operating revenue for our Other International Business Unit decreased slightly due to a decline in aircraft on contract in Malaysia partially offset by increased activity in Trinidad and Brazil. Adjusted EBITDAR and adjusted EBITDAR margin for the December 2013 quarter decreased to $10.2 million and 33.2%, respectively, compared to $17.8 million and 55.7%, respectively, in the December 2012 quarter, primarily due to a decline in activity in Malaysia and an increase in mobilization costs in Tanzania for a new contract that began in January 2014, partially offset by increased activity in Trinidad and Brazil. CEO SUCCESSION On February 3, 2014, the Company announced that William E. Chiles will resign as President and Chief Executive Officer of the Company effective upon the conclusion of the 2014 annual meeting of the stockholders of the Company, and he has elected not to run for re-election and will not continue to serve as a director after that meeting. Following his resignation as an officer, Mr. Chiles will remain an employee of the Company and will provide consulting services to the Company. Jonathan E. Baliff has been appointed President and Chief Executive Officer to succeed Mr. Chiles effective immediately following the annual meeting. The Company also expects to nominate Mr. Baliff as a member of the Board of Directors of the Company effective for the term beginning upon the conclusion of the 2014 annual meeting. "After ten years at Bristow, I am excited about the time ahead for the Company and our industry as the organization transitions to new leadership. I know I will be leaving this organization in the capable hands of Jonathan Baliff, a world class senior management team and dedicated employees across the globe," said William E. Chiles. GUIDANCE We are reaffirming our adjusted diluted earnings per share guidance for the full fiscal year 2014 of $4.25 to $4.55, reflecting our expectation of strong operating performance in our fiscal fourth quarter. "Despite the impact of the timing of contract start-up and other costs during the third quarter of fiscal 2014, we expect our results for the full year to be within the guidance range provided in November 2013. This highlights our focus on long-term value as we manage our business with a focus on annual and not quarterly results. Our continued improvement in operating and commercial performance has delivered strong nine-month year-to-date financial results, as seen in the over 11% growth in adjusted EBITDAR and over 12% growth in adjusted EPS for the nine months ended December 31, 2013 compared to the same period a year ago," said Jonathan E. Baliff, Senior Vice President and Chief Financial Officer of Bristow Group. "We continue to focus on safety, client service and top line growth, which we've seen across many of our business units, mostly in Europe in the third quarter. This growth, combined with increased overall liquidity of $202 million, has us well positioned for further growth in the oil and gas sector and for civilian SAR, while also providing funds for acquisitions and opportunistic share buybacks, both of which we executed on this quarter." 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 any issues involved with the return to full revenue service of the EC225 aircraft and changes in the market and industry, could result in earnings per share for fiscal year 2014 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 September 30, 2013 and annual report on Form 10-K for the fiscal year ended March 31, 2013. DIVIDEND AND SHARE REPURCHASE On February 5, 2014, our Board of Directors approved our twelfth consecutive quarterly dividend. This dividend of $0.25 per share will be paid on March 14, 2014 to shareholders of record on February 28, 2014 and is 67% higher than the first dividend paid in June 2011. Based on shares outstanding as of December31, 2013, the total quarterly dividend payment will be approximately $9.1 million. Additionally, during the December 2013 quarter, we spent $16.5 million to repurchase 215,310 shares of our Common Stock. Subsequently, in January 2014, we spent an additional $16.9 million to repurchase another 230,490 shares of our Common Stock. On February 5, 2014, our Board of Directors approved an increase of the remaining repurchase amount of our Common Stock to up to $100 million through November 5, 2014. EASTERN AIRWAYS TRANSACTION On February 6, 2014, Bristow Helicopters Limited ("Bristow Helicopters") acquired a 60% interest in the privately owned Eastern Airways International Limited ("Eastern Airways") for cash of £27 million ($45 million) with possible earn out consideration of up to £6 million ($10 million) to be paid over a three year period based on the achievement of specified financial performance thresholds. In addition, Bristow Helicopters entered into agreements with the other stockholders of Eastern Airways that grant Bristow Helicopters the right to buy all of their Eastern Airways shares (and grant them the right after seven years to require Bristow Helicopters to buy all of their shares) and include transfer restrictions and other customary provisions. Eastern Airways is a regional fixed wing operator based at Humberside Airport located in North Lincolnshire, England with both charter and scheduled services targeting U.K. oil and gas industry transport. We believe this investment will strengthen Bristow Helicopters' ability to provide a complete suite of point to point transportation services for existing European based passengers, expand helicopter services in certain areas like the Shetland Islands and create a more integrated logistics solution for global clients. The acquisition of Eastern Airways will be accounted for under the purchase method and the results will be consolidated from the date of acquisition in the Europe 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 $160 million in operating revenue and $25 million of adjusted EBITDAR on an annual basis. CONFERENCE CALL Management will conduct a conference call starting at 10:00 a.m. ET (9:00 a.m. CT) on Friday, February 7, 2014 to review financial results for the fiscal year 2014 third quarter ended December31, 2013. 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: oVisit Bristow Group's investor relations Web page at www.bristowgroup.com oLive: Click on the link for "Bristow Group Fiscal 2014 Third Quarter Earnings Conference Call" oReplay: 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.: oLive: Dial toll free 1-877-941-9205 oReplay: A telephone replay will be available through February 21, 2014 and may be accessed by calling toll free 1-800-406-7325, passcode: 4662021# Via Telephone outside the U.S.: oLive: Dial 1-480-629-9726 oReplay: A telephone replay will be available through February 21, 2014 and may be accessed by calling 1-303-590-3030, passcode: 4662021# 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, EC225 return to service, capital allocation strategy, operational and capital performance, shareholder return, liquidity and market and industry conditions. 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 demand for natural gas and oil; fluctuations in levels of natural gas and oil exploration and development activities; the impact of competition; actions by customers; 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 December31, 2013 and annual report on Form 10-K for the fiscal year ended March 31, 2013. 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 Nine Months Ended December 31, December 31, 2013 2012 2013 2012 Gross revenue: Operating revenue from $ 351,193 $ 326,481 $ 1,041,290 $ 960,993 non-affiliates Operating revenue from 22,371 20,199 70,451 32,292 affiliates Reimbursable revenue from 38,760 41,657 116,840 123,330 non-affiliates Reimbursable revenue from 11 132 76 216 affiliates 412,335 388,469 1,228,657 1,116,831 Operating expense: Direct cost 261,590 224,739 773,612 672,002 Reimbursable expense 36,677 39,434 109,734 118,240 Depreciation and 23,655 24,867 70,332 69,560 amortization General and 48,948 41,623 135,735 114,308 administrative 370,870 330,663 1,089,413 974,110 Gain (loss) on disposal 3,982 7,396 (803) 819 of assets Earnings from unconsolidated (15,945) 8,918 1,115 17,901 affiliates, net of losses Operating income 29,502 74,120 139,556 161,441 Interest income 407 134 1,288 485 Interest expense (7,253) (14,742) (36,701) (32,113) Extinguishment of debt — (14,932) — (14,932) Gain on sale of — — 103,924 — unconsolidated affiliate Other income (expense), (696) (106) (575) (1,255) net Income before provision 21,960 44,474 207,492 113,626 for income taxes Provision for income (2,946) (7,788) (51,682) (22,310) taxes Net income 19,014 36,686 155,810 91,316 Net (income) loss attributable to (87) (294) 609 (1,594) noncontrolling interests Net income attributable $ 18,927 $ 36,392 $ 156,419 $ 89,722 to Bristow Group Earnings per common share: Basic $ 0.52 $ 1.01 $ 4.32 $ 2.50 Diluted $ 0.51 $ 1.00 $ 4.28 $ 2.45 Non-GAAP measures: Adjusted operating income $ 49,056 $ 66,724 $ 165,293 $ 160,000 Adjusted operating margin 13.1 % 19.2 % 14.9 % 16.1 % Adjusted EBITDAR $ 100,677 $ 109,223 $ 310,968 $ 277,950 Adjusted EBITDAR margin 27.0 % 31.5 % 28.0 % 28.0 % Adjusted net income $ 31,331 $ 42,632 $ 113,891 $ 101,304 Adjusted diluted earnings $ 0.85 $ 1.17 $ 3.11 $ 2.77 per share BRISTOW GROUP INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands) (Unaudited) December 31, March 31, 2013 2013 ASSETS Current assets: Cash and cash equivalents $ 323,230 $ 215,623 Accounts receivable from non-affiliates 247,859 254,520 Accounts receivable from affiliates 7,453 8,261 Inventories 161,065 153,969 Assets held for sale 22,195 8,290 Prepaid expenses and other current assets 40,414 35,095 Total current assets 802,216 675,758 Investment in unconsolidated affiliates 255,267 272,123 Property and equipment – at cost: Land and buildings 118,719 108,593 Aircraft and equipment 2,541,382 2,306,054 2,660,101 2,414,647 Less – Accumulated depreciation and amortization (530,148) (493,575) 2,129,953 1,921,072 Goodwill 30,096 28,897 Other assets 59,202 52,842 Total assets $ 3,276,734 $ 2,950,692 LIABILITIES AND STOCKHOLDERS' INVESTMENT Current liabilities: Accounts payable $ 60,048 $ 69,821 Accrued wages, benefits and related taxes 66,528 56,084 Income taxes payable 20,304 11,659 Other accrued taxes 7,578 7,938 Deferred revenue 22,899 21,646 Accrued maintenance and repairs 16,815 15,391 Accrued interest 8,186 14,249 Other accrued liabilities 26,499 20,714 Deferred taxes 2,251 — Short-term borrowings and current maturities of 8,310 22,323 long-term debt Deferred sale leaseback advance 81,372 — Total current liabilities 320,790 239,825 Long-term debt, less current maturities 833,285 764,946 Accrued pension liabilities 124,974 126,647 Other liabilities and deferred credits 88,768 57,196 Deferred taxes 145,984 151,121 Stockholders' investment: Common stock 373 367 Additional paid-in capital 757,213 731,883 Retained earnings 1,223,904 1,094,803 Accumulated other comprehensive loss (184,042) (199,683) Treasury shares (42,848) (26,304) Total Bristow Group stockholders' investment 1,754,600 1,601,066 Noncontrolling interests 8,333 9,891 Total stockholders' investment 1,762,933 1,610,957 Total liabilities and stockholders' investment $ 3,276,734 $ 2,950,692 BRISTOW GROUP INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) Nine Months Ended December 31, 2013 2012 Cash flows from operating activities: Net income $ 155,810 $ 91,316 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 70,332 69,560 Deferred income taxes (3,132) (5,170) Write-off of deferred financing fees 12,733 2,889 Discount amortization on long-term debt 2,719 2,663 (Gain) loss on disposal of assets 803 (819) Gain on sale of unconsolidated affiliate (103,924) — Extinguishment of debt — 14,932 Stock-based compensation 10,694 9,008 Equity in earnings from unconsolidated affiliates (in 7,926 (4,343) excess of) less than dividends received Tax benefit related to stock-based compensation (5,328) (361) Increase (decrease) in cash resulting from changes in: Accounts receivable 31,786 6,732 Inventories 1,258 (10,039) Prepaid expenses and other assets (4,002) (8,038) Accounts payable (31,727) 2,554 Accrued liabilities 4,868 28,029 Other liabilities and deferred credits (13,517) 3,810 Net cash provided by operating activities 137,299 202,723 Cash flows from investing activities: Capital expenditures (526,048) (427,370) Proceeds from asset dispositions 244,867 130,922 Proceeds from sale of unconsolidated affiliate 112,210 — Investment in unconsolidated affiliate — (51,179) Net cash used in investing activities (168,971) (347,627) Cash flows from financing activities: Proceeds from borrowings 283,977 675,000 Debt issuance costs (15,152) (10,345) Repayment of debt (232,063) (549,234) Partial prepayment of put/call obligation (42) (48) Acquisition of non-controlling interest (2,078) — Proceeds from assignment of aircraft purchase 106,113 — agreements Repurchase of common stock (16,544) (1,218) Common stock dividends paid (27,318) (21,509) Issuance of common stock 14,368 11,515 Tax benefit related to stock-based compensation 5,328 361 Net cash provided by financing activities 116,589 104,522 Effect of exchange rate changes on cash and cash 22,690 10,730 equivalents Net increase (decrease) in cash and cash equivalents 107,607 (29,652) Cash and cash equivalents at beginning of period 215,623 261,550 Cash and cash equivalents at end of period $ 323,230 $ 231,898 BRISTOW GROUP INC. AND SUBSIDIARIES SELECTED OPERATING DATA (In thousands, except flight hours and percentages) (Unaudited) Three Months Ended Nine Months Ended December 31, December 31, 2013 2012 2013 2012 Flight hours (excluding Bristow Academy and unconsolidated affiliates): Europe 16,428 14,399 49,593 47,535 West Africa 11,485 11,060 34,597 32,449 North America 12,345 17,159 44,686 57,889 Australia 2,406 3,247 7,463 9,000 Other International 3,584 3,868 10,582 13,026 Consolidated 46,248 49,733 146,921 159,899 Operating revenue: Europe $ 158,458 $ 124,418 $ 451,969 $ 372,646 West Africa 79,421 76,541 231,075 208,169 North America 54,916 59,327 173,504 168,934 Australia 34,606 41,554 108,145 118,173 Other International 30,778 31,983 95,821 97,295 Corporate and other 16,321 13,786 54,229 30,023 Intra-business unit (936) (929) (3,002) (1,955) eliminations Consolidated $ 373,564 $ 346,680 $ 1,111,741 $ 993,285 Operating income (loss): Europe $ 29,729 $ 31,235 $ 82,708 $ 80,119 West Africa 21,777 22,883 59,261 52,444 North America 6,666 8,560 23,953 21,165 Australia (1,027) 6,237 4,761 19,575 Other International (12,808) 13,754 14,288 31,495 Corporate and other (18,817) (15,945) (44,612) (44,176) Gain (loss) on disposal 3,982 7,396 (803) 819 of assets Consolidated $ 29,502 $ 74,120 $ 139,556 $ 161,441 Operating margin: Europe 18.8 % 25.1 % 18.3 % 21.5 % West Africa 27.4 % 29.9 % 25.6 % 25.2 % North America 12.1 % 14.4 % 13.8 % 12.5 % Australia (3.0) % 15.0 % 4.4 % 16.6 % Other International (41.6) % 43.0 % 14.9 % 32.4 % Consolidated 7.9 % 21.4 % 12.6 % 16.3 % Adjusted EBITDAR: Europe $ 55,995 $ 49,095 $ 152,677 $ 132,004 West Africa 26,601 26,826 73,396 65,286 North America 18,150 17,279 53,865 41,246 Australia 5,187 11,351 19,374 32,442 Other International 10,214 17,814 43,532 43,529 Corporate and other (15,470) (13,142) (31,876) (36,557) Consolidated $ 100,677 $ 109,223 $ 310,968 $ 277,950 Adjusted EBITDAR margin: Europe 35.3 % 39.5 % 33.8 % 35.4 % West Africa 33.5 % 35.0 % 31.8 % 31.4 % North America 33.1 % 29.1 % 31.0 % 24.4 % Australia 15.0 % 27.3 % 17.9 % 27.5 % Other International 33.2 % 55.7 % 45.4 % 44.7 % Consolidated 27.0 % 31.5 % 28.0 % 28.0 % BRISTOW GROUP INC. AND SUBSIDIARIES AIRCRAFT COUNT As of December31, 2013 (Unaudited) Aircraft in Consolidated Fleet Percentage Helicopters of Current Period Fixed Unconsolidated Operating Small Medium Large Training Total^(1)(2) Total Wing Affiliates^(3) Revenue Europe 41 % — 9 56 — — 65 — 65 West Africa 21 % 9 27 7 — 3 46 — 46 North America 16 % 50 25 12 — — 87 — 87 Australia 10 % 2 7 16 — — 25 — 25 Other 8 % 2 32 13 — — 47 126 173 International Corporate and 4 % — — — 75 — 75 — 75 other Total 100 % 63 100 104 75 3 345 126 471 Aircraft not currently in fleet:^(4) On order — 12 35 — — 47 Under option — 22 35 — — 57 ^(1) Includes 21 aircraft held for sale and 81 leased aircraft as follows: Held for Sale Aircraft in Consolidated Fleet Helicopters Fixed Small Medium Large Training Total Wing Europe — — 2 — — 2 West Africa — 2 — — — 2 North America 11 — — — — 11 Australia — — — — — — Other International 1 3 — — — 4 Corporate and other — — — 2 — 2 Total 12 5 2 2 — 21 Leased Aircraft in Consolidated Fleet Helicopters Fixed Small Medium Large Training Total Wing Europe — 1 21 — — 22 West Africa — 1 1 — — 2 North America 4 13 3 — — 20 Australia 2 2 4 — — 8 Other International — — — — — — Corporate and other — — — 29 — 29 Total 6 17 29 29 — 81 ^(2) The average age of our fleet, excluding training aircraft, was 11 years as of December 31, 2013. The 126 aircraft operated by our unconsolidated affiliates do not include those aircraft leased from us. Includes 56 helicopters (primarily medium) ^(3) and 27 fixed wing aircraft owned and managed by Líder, our unconsolidated affiliate in Brazil, which is included in our Other International business unit. On July 14, 2013, we sold our interest in an unconsolidated affiliate operating 64 aircraft in Europe. ^(4) 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 auditor. 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, 2013 2012 2013 2012 (In thousands, except per share amounts) Adjusted $ 49,056 $ 66,724 $ 165,293 $ 160,000 operating income Gain (loss) on disposal of 3,982 7,396 (803) 819 assets Special items (23,536) — (24,934) 622 Operating income $ 29,502 $ 74,120 $ 139,556 $ 161,441 Adjusted EBITDAR $ 100,677 $ 109,223 $ 310,968 $ 277,950 Gain (loss) on disposal of 3,982 7,396 (803) 819 assets Special items (23,536) (14,932) 78,990 (14,310) Depreciation and (23,655) (24,867) (70,332) (69,560) amortization Rent expense (28,255) (17,604) (74,630) (49,160) Interest expense (7,253) (14,742) (36,701) (32,113) Provision for (2,946) (7,788) (51,682) (22,310) income taxes Net income $ 19,014 $ 36,686 $ 155,810 $ 91,316 Adjusted net $ 31,331 $ 42,632 $ 113,891 $ 101,304 income Gain (loss) on disposal of 3,146 6,101 (634) 658 assets Special items (15,550) (12,341) 43,162 (12,240) Net income attributable to $ 18,927 $ 36,392 $ 156,419 $ 89,722 Bristow Group Adjusted diluted earnings per $ 0.85 $ 1.17 $ 3.11 $ 2.77 share Gain (loss) on disposal of 0.09 0.17 (0.02) 0.02 assets Special items (0.42) (0.34) 1.18 (0.33) Diluted earnings 0.51 1.00 4.28 2.45 per share Three Months Ended December 31, 2013 Adjusted Adjusted Diluted Adjusted Adjusted Operating Earnings EBITDAR Net Income Income Per Share (In thousands, except per share amounts) North America $ (2,101) $ (2,101) $ (1,366) $ (0.04) restructuring^(1) Líder taxes^(2) (19,335) (19,335) (12,567) (0.34) Severance costs in the (2,100) (2,100) (1,617) (0.04) Southern North Sea^(3) Total special items $ (23,536) $ (23,536) $ (15,550) (0.42) Three Months Ended December 31, 2012 Adjusted Adjusted Diluted Adjusted Adjusted Operating Earnings EBITDAR NetIncome Income Per Share (In thousands, except per share amounts) 7 ½% Senior Notes $ — $ (14,932) $ (11,377) $ (0.31) retirement^(4) 364-Day Term Loan — — (964) (0.03) financing fees^(5) Total special items $ — $ (14,932) $ (12,341) (0.34) Nine Months Ended December 31, 2013 Adjusted Adjusted Diluted Adjusted Adjusted Operating Earnings EBITDAR Net Income Income Per Share (In thousands, except per share amounts) Gain on sale of unconsolidated $ — $ 103,924 $ 67,897 $ 1.86 affiliate^(6) Cancellation of potential — — (8,276) (0.23) financing^(7) Inventory allowances^(8) (2,364) (2,364) (1,536) (0.04) North America (2,650) (2,650) (1,723) (0.05) restructuring^(1) Líder taxes^(2) (17,820) (17,820) (11,583) (0.32) Severance costs in the (2,100) (2,100) (1,617) (0.04) Southern North Sea^(3) Total special items $ (24,934) $ 78,990 $ 43,162 1.18 Nine Months Ended December 31, 2012 Adjusted Adjusted Diluted Adjusted Adjusted Operating Earnings EBITDAR NetIncome Income Per Share (In thousands, except per share amounts) Líder correction^(9) $ 2,784 $ 2,784 $ 1,809 $ 0.05 Severance costs in the (2,162) (2,162) (1,708) (0.05) Southern North Sea^(10) 7 ½% Senior Notes — (14,932) (11,377) (0.31) retirement^(4) 364-Day Term Loan — — (964) (0.03) financing fees^(5) Total special items $ 622 $ (14,310) $ (12,240) (0.33) Relates to a charges associated with the restructuring of our North ^(1) America business unit and planned closure of our Alaska operations which related primarily to employee severance and retention costs. Relates to a payment Líder made to the government of Brazil for tax ^(2) 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. ^(3) Relates to $2.1 million of severance costs in the Southern North Sea in the December 2013 quarter. ^(4) Relates to $14.9 million in redemption premium and fess as a result of the early redemption of our 7 ½ Senior Notes. ^(5) Relates to a charge to interest expense of $1.5 million for the write-off of deferred financing fees for our 364-Day Credit Agreement. ^(6) Relates to a gain resulting from the sale of our 50% interest in the FB Entities for £74 million, or approximately $112.2 million. Relates to a charge to interest expense of $12.7 million, resulting from the write-off of unamortized deferred financing fees related to a ^(7) potential financing in connection with our bid to provide SAR services in the U.K. During the June 2013 quarter, we increased our borrowing capacity on our revolving credit facility from $200 million to $350 million and cancelled this potential financing. 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 ^(8) 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. ^(9) Relates to a calculation error related to Líder that affected our earnings from unconsolidated affiliate by $2.8 million. ^(10) ^Relates to $2.2 million of severance costs related to the termination of a contract in the Southern North Sea in the September 2012 quarter. SOURCE Bristow Group Inc. Website: http://www.bristowgroup.com
Bristow Group Reports Financial Results For Its 2014 Fiscal Third Quarter And Nine Months Ended December 31, 2013
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