Bristow Group Reports Financial Results For Its 2013 Fiscal Second Quarter And Six-Month Period Ended September 30, 2012

- QUARTER AND SIX MONTH GAAP NET INCOME OF $30 MILLION ($0.82 PER DILUTED SHARE) AND $53 MILLION ($1.46 PER DILUTED SHARE)

- QUARTER AND SIX MONTH ADJUSTED NET INCOME OF $29 MILLION ($0.80 PER DILUTED SHARE) AND $58 MILLION ($1.60 PER DILUTED SHARE), WHICH EXCLUDES THE IMPACT OF ASSET DISPOSITIONS AND SPECIAL ITEMS

- RECORD QUARTER AND SIX MONTH OPERATING REVENUE OF $326 MILLION AND $647 MILLION WITH QUARTER AND SIX MONTH OPERATING CASH FLOW OF $79 MILLION AND $135 MILLION

- COMPANY REAFFIRMS GUIDANCE RANGE FOR FULL FISCAL YEAR 2013 ADJUSTED EPS AT $3.25 - $3.55

Nov 07, 2012, 17:10 ET from Bristow Group Inc.

HOUSTON, Nov. 7, 2012 /PRNewswire/ -- Bristow Group Inc. (NYSE: BRS) today reported net income for the September 2012 quarter of $29.7 million or $0.82 per diluted share compared to net income of $2.7 million or $0.07 per diluted share in the same period a year ago.  Adjusted net income, which excludes asset disposition effects and special items, was $29.2 million or $0.80 per diluted share for the September 2012 quarter, an increase of $5.9 million or $0.17 per diluted share over the September 2011 quarter. 

Operating revenue for the September 2012 quarter increased approximately 10% to $326.0 million from $297.1 million in the September 2011 quarter.

Adjusted earnings before interest, taxes, depreciation, amortization and rent ("Adjusted EBITDAR"), which excludes asset disposition effects and special items, was $84.9 million for the September 2012 quarter compared to $71.2 million in the same period a year ago.  Net cash provided by operating activities totaled $79.5 million for the September 2012 quarter compared to $64.1 million in the September 2011 quarter. As of September 30, 2012, cash totaled $348.3 million and our total liquidity, which includes cash and borrowing available on our revolving credit facility, was $507.7 million.

Net income and diluted earnings per share increased significantly over the September 2011 quarter primarily as a result of the year-over-year increase in operating revenue, an $11.0 million increase in earnings from unconsolidated affiliates and the inclusion of $27.3 million in non-cash impairment charges in the September 2011 quarter. 

The significant increase in earnings from unconsolidated affiliates relates to an improvement in earnings from our investment in Lider in Brazil primarily resulting from the impact of foreign currency exchange rate changes as the value of the Brazilian real has fluctuated significantly relative to the U.S. dollar and a $2.3 million correction of a calculation error related to foreign currency derivative transactions at Lider for the September 2012 quarter.

The year-over-year improvement in net income and diluted earnings per share was partially offset by the following:

  • An $8.4 million increase in general and administrative expense, primarily resulting from an increase in incentive compensation as a result of our stock price out-performing our peers,
  • A $2.6 million allowance for doubtful accounts recorded for accounts receivable due from ATP Oil and Gas Corporation ("ATP"), a client in the U.S. Gulf of Mexico, that is no longer considered probable of collection due to their filing for bankruptcy, and
  • Increased rent expense resulting from increased leasing of aircraft as our operating lease strategy progresses.

After adjusting for asset disposition effects and special items in the September 2012 and 2011 quarters, we realized an improvement in the financial measures used by management to assess and measure our financial performance, including a 19.2% improvement in adjusted EBITDAR, an improvement in adjusted EBITDAR margin from 24.0% to 26.1%, a 25.2% improvement in adjusted net income and a 27.0% improvement in adjusted diluted earnings per share.  This improvement was driven by strong revenue performance and the increase in earnings from unconsolidated affiliates in the September 2012 quarter, partially offset by the increases in general and administrative expense, allowance for doubtful accounts and rent expense discussed above. 

The allowance for doubtful accounts recorded for accounts receivable due from ATP, while not adjusted for in these non-GAAP measures, resulted in a $0.05 decrease in diluted earnings per share in the September 2012 quarter.

"The strong performance we experienced in our fiscal 2013 first quarter continued in the second quarter of fiscal 2013," said William E. Chiles, President and Chief Executive Officer of Bristow Group.  "We continue to benefit from a turnaround in Australia and the U.S. Gulf of Mexico as well as strength in the U.K. and Norway.  Our fiscal 2013 and future year results should benefit further from the investment in Cougar Helicopters completed in October, along with financing transactions also completed in October to reduce our cost of capital."

Mr. Chiles continued, "We are working hard to mitigate the impact of the recent suspension of flight operations of sixteen large EC225 and AS332L2 aircraft across our fleet.  Despite this situation, we are still expecting the solid revenue growth experienced over the recent quarters to continue throughout the remainder of fiscal 2013, and anticipate stronger adjusted EBITDAR margins.  During times like these, Bristow's financial strength and commitment to operational excellence – to provide unmatched safety, reliability and hassle-free service – is a key difference maker for our clients.  Our global management team is dedicated to continuing the service excellence we provide to our clients and is working hard every day for all our stakeholders."

SECOND QUARTER FY2013 BUSINESS UNIT RESULTS

There continues to be strong demand for our services both from new and existing clients in the Northern North Sea and in Norway.  To meet this demand, we have added new large aircraft to our Europe Business Unit over the past year.  These new aircraft, as well as an overall increase in flying activity, led to a 10% increase in operating revenue and a 21% increase in adjusted EBITDAR over the September 2011 quarter.  Adjusted EBITDAR margin of 34.6% improved from the prior year quarter's margin of 31.4%.  We executed operating leases for five large aircraft in this market in late fiscal year 2012 (one of which was a new delivery in the September 2012 quarter), contributing to the increase in adjusted EBITDAR margin.

Activity levels continue to be strong in our West Africa Business Unit, leading to a 7% increase in operating revenue over the September 2011 quarter.  However, as a result of previously reported increases in maintenance costs, adjusted EBITDAR and adjusted EBITDAR margin decreased by 20% and 25%, respectively, compared with the September 2011 quarter.  Maintenance expense increased primarily due to aircraft undergoing scheduled major maintenance during the September 2012 quarter. 

As was the case in the first quarter of fiscal year 2012, the addition of S-92 large aircraft to our North America Business Unit continued to drive operating improvement in the U.S. Gulf of Mexico in the second fiscal quarter, along with the issuance of more drilling and completion permits.  Operating revenue increased 19% resulting from the addition of the new large aircraft despite no significant change in flight hours from the September 2011 quarter.  However, operating results in the September 2012 quarter were impacted by an allowance recorded against amounts due from ATP totaling $2.6 million.  Excluding this allowance, adjusted EBITDAR margin was 25.3% for the quarter, up from 20.6% in the September 2011 quarter and 23.2% in the June 2012 quarter. 

As a result of a 24% increase in flight activity in Australia, driven by new contracts and increased ad hoc work, operating revenue increased by 26% in the second fiscal quarter versus the September 2011 period.  The increase in operating revenue along with a significant reduction in costs more than doubled Australia's adjusted EBITDAR to $10.8 million in the September 2012 quarter and nearly doubled adjusted EBITDAR margins to 28.0% in the second fiscal quarter from 14.4% in the September 2011 quarter. 

Our Other International Business Unit was positively affected by increased earnings from Líder in Brazil, which increased from a loss of $6.6 million in the September 2011 quarter to a gain of $4.6 million in the September 2012 quarter. 

YTD FY2013 RESULTS

  • Operating revenue increased 11% to $646.6 million compared to $583.8 million in the same period a year ago.
  • Operating income increased 90% to $87.3 million compared to $46.0 million in the same period a year ago.
  • Net income increased 125% to $53.3 million or $1.46 per diluted share compared to $23.8 million or $0.65 per diluted share in the same period a year ago.  Adjusted net income increased 35% to $58.4 million or $1.60 per diluted share compared to $43.2 million or $1.18 per diluted share in the same period a year ago. 
  • Adjusted EBITDAR increased 22% to $168.7 million compared to $138.3 million in the same period a year ago. Net cash provided by operating activities totaled $134.9 million compared to $117.0 million in the same period a year ago.

RECENT AIRCRAFT INCIDENTS

On Monday, October 22, 2012, an incident occurred with an EC225 Super Puma helicopter operated by another helicopter company, which resulted in a controlled ditching on the North Sea, south of the Shetland Isles, U.K.  Following the ditching, all 19 passengers and crew were recovered safely and without injuries. 

Related to this incident, the Civil Aviation Authority ("CAA") in the U.K. issued a safety directive on October 25, 2012, requiring operators to suspend operations of the affected aircraft.  As a result, we will not be flying a total of sixteen large Eurocopter aircraft until further notice: eleven EC225 helicopters in the U.K., three EC225 helicopters in Australia, one EC225 helicopter in Norway and one AS332L2 helicopter in Nigeria.  Our other aircraft, including search and rescue ("SAR") aircraft, continue to operate globally.

In order to minimize or eliminate the impact on our clients, we have increased utilization of other in-region aircraft and have implemented contingency plans designed to mobilize additional available aircraft, including entering into an agreement on November 7, 2012 to order ten Sikorsky S-92 large aircraft and obtain options for 16 Sikorsky S-92 large aircraft. An incident involving another operator and an EC225 helicopter in May 2012 that resulted in a similar directive did not have a material financial impact on our company.  However, we are unable to determine whether this incident on October 22 and the resulting actions taken by the CAA could have a material effect on our business, financial condition or results of operations at this time.

COUGAR INVESTMENT

In early October 2012, we completed the acquisition of 40 newly issued Class B shares ("Class B Shares") in the capital of Cougar Helicopters Inc. ("Cougar"), the largest offshore energy and search and rescue ("SAR") helicopter service provider in Canada, and certain aircraft and facilities used by Cougar in its operations, for $250 million, of which $23.8 million had been previously paid for an aircraft and certain other advances, resulting in a net cash outlay of $226.2 million.  Cougar's operations are primarily focused on serving the offshore oil and gas industry off Canada's Atlantic coast and in the Arctic.  The operating assets purchased include eight Sikorsky S-92 large helicopters, inventory and helicopter passenger, maintenance and SAR facilities located in St. John's, Newfoundland and Labrador and Halifax, Nova Scotia.  The purchased aircraft and facilities are leased to Cougar on a long-term basis.  The Class B Shares represent 25% of the voting power and 40% of the economic interests in Cougar.  Additionally, the terms of the purchase agreement include a potential earn-out of $40 million payable over three years based on Cougar achieving certain agreed performance targets.

FINANCING ACTIVITY

Subsequent to September 30, 2012, we raised $675 million through the offering of $450 million 6 ¼% senior notes due 2011 ("6 ¼% senior notes") and proceeds from a $225 million 364-day term loan ("364-day term loan").  Net proceeds for the issuance of the 6 ¼% senior notes are being used to purchase and redeem 100% of our $350 million 7 ½% senior notes due 2017 and for general corporate purposes, and proceeds from the 364-day term loan were used to complete the Cougar investment.

DIVIDEND AND SHARE REPURCHASE AUTHORIZATION

On November 2, 2012, our Board of Directors declared a seventh consecutive quarterly dividend.  This dividend of $0.20 per share will be paid on December 14, 2012 to shareholders of record on November 30, 2012.  Based on shares outstanding at September 30, 2012, total dividend payments will be approximately $7.2 million.  Also on November 2, 2012, our Board of Directors authorized the expenditure of up to $100 million to repurchase shares of our common stock up to 12 months from that date.

GUIDANCE

Bristow is reaffirming today the adjusted earnings per share guidance provided in May 2012 for the full fiscal year 2013 of $3.25 to $3.55.

"Our 2013 guidance reaffirmation is based on the results of our strong first half performance for the fiscal year and the contribution expected from our recent investment in Cougar, taking into account uncertainty around the recent suspension of operations of EC225 and AS332L2 aircraft," said Jonathan E. Baliff, Senior Vice President and Chief Financial Officer of Bristow Group.  "In addition to the stronger performance and earnings per share growth year over year, we continued to generate significant operating cash flow.  This is a testament to the hard work and proven results of our global operations and commercial teams."

As a reminder, our earnings per share guidance does not include unrealized gains and losses on disposals of assets as well as special items because their timing and amounts are more variable and less predictable.  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 nor any impact from significant acquisitions and divestitures.  Changes in events or other circumstances that we cannot currently anticipate or predict could result in earnings per share for fiscal year 2013 that are significantly above or below this guidance, including the impact of the recent suspension of operations of certain aircraft and changes in the market and industry.  Factors that could cause such changes are described below under Forward-Looking Statements Disclosure.

CONFERENCE CALL

Management will conduct a conference call starting at 10:00 a.m. ET (9:00 a.m. CT) on Thursday, November 8, 2012 to review financial results for the fiscal year 2013 second quarter ended September 30, 2012.  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 2013 Second 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 1-800-762-8779
  • Replay: A telephone replay will be available through November 22, 2012 and may be accessed by calling toll free 1-800-406-7325, passcode: 4567605#

Via Telephone outside the U.S.:

  • Live: Dial 1-480-629-9645
  • Replay: A telephone replay will be available through November 22, 2012 and may be accessed by calling 1-303-590-3030, passcode: 4567605#

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 Alaska, 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, revenue growth, margins, the impact of activity levels, business performance, the October 2012 incident and resulting actions taken by the CAA in the U.K., and other 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.  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 September 30, 2012 and the annual report on Form 10-K for the fiscal year ended March 31, 2012.  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, percentages and flight hours)

(Unaudited)

Three Months Ended

Six Months Ended

September 30,

September 30,

2012

2011

2012

2011

Gross revenue:

Operating revenue from non-affiliates

$

319,663

$

288,780

$

634,512

$

565,809

Operating revenue from affiliates

6,288

8,276

12,093

18,008

Reimbursable revenue from non-affiliates 

39,719

33,673

81,673

67,974

Reimbursable revenue from affiliates 

84

263

84

306

365,754

330,992

728,362

652,097

Operating expense:

Direct cost

224,495

203,635

447,263

400,257

Reimbursable expense

38,634

32,770

78,806

65,904

Impairment of inventories

24,610

24,610

Depreciation and amortization

23,321

25,431

44,693

48,139

General and administrative

37,708

29,303

72,685

68,948

324,158

315,749

643,447

607,858

Loss on disposal of assets

(1,262)

(1,611)

(6,577)

(195)

Earnings from unconsolidated affiliates, net of losses

6,994

(4,037)

8,983

1,956

Operating income

47,328

9,595

87,321

46,000

Interest income

263

153

351

324

Interest expense

(8,597)

(9,459)

(17,371)

(18,414)

Other income (expense), net

(218)

727

(1,149)

931

Income before (provision) benefit for income taxes

38,776

1,016

69,152

28,841

(Provision) benefit for income taxes

(8,342)

1,945

(14,522)

(4,661)

Net income

30,434

2,961

54,630

24,180

Net income attributable to noncontrolling interests

(766)

(250)

(1,300)

(424)

Net income attributable to Bristow Group

$

29,668

$

2,711

$

53,330

$

23,756

Diluted earnings per common share

$

0.82

$

0.07

$

1.46

$

0.65

Operating margin

14.5

%

3.2

%

13.5

%

7.9

%

Flight hours

55,038

56,005

110,166

110,061

Non-GAAP financial measures:

Adjusted operating income

$

46,274

$

38,493

$

93,276

$

73,482

Adjusted operating margin

14.2

%

13.0

%

14.4

%

12.6

%

Adjusted EBITDAR

$

84,922

$

71,235

$

168,727

$

138,260

Adjusted EBITDAR margin

26.1

%

24.0

%

26.1

%

23.7

%

Adjusted net income

$

29,153

$

23,287

$

58,425

$

43,227

Adjusted diluted earnings per share

$

0.80

$

0.63

$

1.60

$

1.18

 

BRISTOW GROUP INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

September 30,

March 31,

2012

2012

ASSETS

Current assets:

Cash and cash equivalents 

$

348,349

$

261,550

Accounts receivable from non-affiliates

263,232

280,985

Accounts receivable from affiliates

3,640

5,235

Inventories 

158,949

157,825

Assets held for sale

19,552

18,710

Prepaid expenses and other current assets 

18,083

12,168

Total current assets 

811,805

736,473

Investment in unconsolidated affiliates 

214,620

205,100

Property and equipment – at cost:

Land and buildings 

84,068

80,835

Aircraft and equipment 

2,064,285

2,099,642

2,148,353

2,180,477

Less – Accumulated depreciation and amortization 

(463,913)

(457,702)

1,684,440

1,722,775

Goodwill 

29,789

29,644

Other assets 

44,814

46,371

Total assets

$

2,785,468

$

2,740,363

LIABILITIES AND STOCKHOLDERS' INVESTMENT

Current liabilities:

Accounts payable 

$

55,650

$

56,084

Accrued wages, benefits and related taxes 

44,590

44,325

Income taxes payable 

12,814

9,732

Other accrued taxes 

8,226

5,486

Deferred revenue 

12,551

14,576

Accrued maintenance and repairs 

18,790

14,252

Accrued interest 

2,258

2,300

Other accrued liabilities 

27,013

23,005

Deferred taxes 

15,165

15,070

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

18,750

14,375

Total current liabilities 

215,807

199,205

Long-term debt, less current maturities 

715,936

742,870

Accrued pension liabilities 

112,221

111,742

Other liabilities and deferred credits 

17,403

16,768

Deferred taxes 

143,912

147,954

Stockholders' investment:

Common stock 

365

363

Additional paid-in capital 

717,347

703,628

Retained earnings 

1,032,468

993,435

Accumulated other comprehensive loss 

(154,614)

(159,239)

Treasury shares, at cost (526,895 shares)

(25,085)

(25,085)

Total Bristow Group Inc. stockholders' investment

1,570,481

1,513,102

Noncontrolling interests 

9,708

8,722

Total stockholders' investment

1,580,189

1,521,824

Total liabilities and stockholders' investment

$

2,785,468

$

2,740,363

 

BRISTOW GROUP INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

(Unaudited)

Six Months Ended

September 30,

2012

2011

Cash flows from operating activities:

Net income

$

54,630

$

24,180

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

Depreciation and amortization

44,693

48,139

Deferred income taxes

(4,592)

(10,237)

Discount amortization on long-term debt

1,772

1,666

Loss on disposal of assets

6,577

195

Impairment of inventories

24,610

Stock-based compensation

5,523

7,480

Equity in earnings from unconsolidated affiliates less than (in excess of)

dividends received

(2,866)

5,285

Tax benefit related to stock-based compensation

(433)

(109)

Increase (decrease) in cash resulting from changes in:

Accounts receivable

20,786

(6,352)

Inventories

(46)

7,916

Prepaid expenses and other assets

729

3,297

Accounts payable

(3,426)

5,382

Accrued liabilities

11,777

4,863

Other liabilities and deferred credits

(226)

678

Net cash provided by operating activities

134,898

116,993

Cash flows from investing activities:

Capital expenditures

(113,405)

(149,262)

Proceeds from asset dispositions

96,376

12,040

Investment in unconsolidated affiliates

(7,153)

Net cash used in investing activities

(24,182)

(137,222)

Cash flows from financing activities:

Proceeds from borrowings

88,493

Repayment of debt

(24,300)

(32,518)

Partial prepayment of put/call obligation

(33)

(31)

Acquisition of noncontrolling interests

(262)

Common stock dividends paid

(14,297)

(10,833)

Issuance of common stock

7,869

1,629

Tax benefit related to stock-based compensation

433

109

Net cash provided by (used in) financing activities

(30,328)

46,587

Effect of exchange rate changes on cash and cash equivalents

6,411

(2,440)

Net increase in cash and cash equivalents

86,799

23,918

Cash and cash equivalents at beginning of period

261,550

116,361

Cash and cash equivalents at end of period

$

348,349

$

140,279

 

BRISTOW GROUP INC. AND SUBSIDIARIES

SELECTED OPERATING DATA

(In thousands, except flight hours and percentages)

(Unaudited)

Three Months  Ended

September 30,

Six Months

Ended

September 30,

2012

2011

2012

2011

Flight hours (excludes Bristow Academy and unconsolidated affiliates):

Europe 

15,900

15,341

33,136

29,523

West Africa 

10,635

10,620

21,389

20,249

North America 

20,561

20,858

40,730

41,292

Australia 

2,961

2,379

5,753

5,761

Other International 

4,981

6,807

9,158

13,236

55,038

56,005

110,166

110,061

Operating revenue:

Europe 

$

124,993

$

113,702

$

248,228

$

221,990

West Africa 

65,273

61,076

131,628

113,327

North America 

56,982

47,860

109,607

91,773

Australia 

38,448

30,469

76,619

71,389

Other International 

32,085

35,191

65,312

69,740

Corporate and other 

8,817

9,435

16,237

16,282

Intrasegment eliminations 

(647)

(677)

(1,026)

(684)

Consolidated total

$

325,951

$

297,056

$

646,605

$

583,817

Operating income (loss):

Europe 

$

27,008

$

23,586

$

48,884

$

46,835

West Africa 

13,430

16,120

29,561

27,351

North America 

6,130

2,571

12,605

4,155

Australia 

6,829

576

13,338

5,100

Other International 

10,354

2,089

17,741

13,999

Corporate and other 

(15,161)

(33,736)

(28,231)

(51,245)

Loss on disposal of assets

(1,262)

(1,611)

(6,577)

(195)

Consolidated total

$

47,328

$

9,595

$

87,321

$

46,000

Operating margin:

Europe 

21.6

%

20.7

%

19.7

%

21.1

%

West Africa 

20.6

%

26.4

%

22.5

%

24.1

%

North America 

10.8

%

5.4

%

11.5

%

4.5

%

Australia 

17.8

%

1.9

%

17.4

%

7.1

%

Other International 

32.3

%

5.9

%

27.2

%

20.1

%

Consolidated total

14.5

%

3.2

%

13.5

%

7.9

%

Adjusted EBITDAR:

Europe 

$

43,245

$

35,690

$

82,909

$

71,390

West Africa 

17,297

21,659

38,460

37,089

North America 

11,767

9,848

23,967

16,115

Australia 

10,766

4,397

21,091

12,678

Other International 

14,169

6,708

25,715

23,332

Corporate and other    

(12,322)

(7,067)

(23,415)

(22,344)

Consolidated total

$

84,922

$

71,235

$

168,727

$

138,260

Adjusted EBITDAR margin:

Europe 

34.6

%

31.4

%

33.4

%

32.2

%

West Africa 

26.5

%

35.5

%

29.2

%

32.7

%

North America 

20.7

%

20.6

%

21.9

%

17.6

%

Australia 

28.0

%

14.4

%

27.5

%

17.8

%

Other International 

44.2

%

19.1

%

39.4

%

33.5

%

Consolidated total

26.1

%

24.0

%

26.1

%

23.7

%

 

BRISTOW GROUP INC. AND SUBSIDIARIES

AIRCRAFT COUNT

As of September 30, 2012

(Unaudited)

                    Aircraft in Consolidated Fleet

Helicopters

Small

Medium

Large

Training

Fixed

Wing

Unconsolidated

Affiliates (3)

Total (1)(2)

Total

Europe 

12

43

55

64

119

West Africa 

10

25

7

3

45

45

North America 

67

24

2

93

93

Australia 

2

10

13

25

25

Other International 

4

36

14

54

133

187

Corporate and other

77

77

77

Total 

83

107

79

77

3

349

197

546

Aircraft not currently in fleet: (4)(5)

    On order 

30

30

    Under option 

12

37

49

(1)

Includes 20 aircraft held for sale and 57 leased aircraft as follows:

 

                    Held for Sale Aircraft in Consolidated Fleet

Helicopters

Small

Medium

Large

Training

Fixed Wing

Total

Europe   

2

3

5

West Africa    

1

1

North America   

Australia   

2

1

3

Other International   

1

10

11

Corporate and other  

Total   

1

15

4

20

                    Leased Aircraft in Consolidated Fleet

Helicopters

Small

Medium

Large

Training

Fixed Wing

Total

Europe   

7

7

West Africa   

1

1

North America   

1

11

2

14

Australia   

2

3

5

Other International   

Corporate and other  

30

30

Total   

3

12

12

30

57

 (2)

The average age of our fleet, excluding training aircraft, was 12 years as of September 30, 2012.

 (3)

The 197 aircraft operated by our unconsolidated affiliates do not include those aircraft leased from us.

 (4)

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

 (5)

On November 7, 2012, we entered into an agreement to order ten Sikorsky S-92 large aircraft and obtain options for 16 Sikorsky S-92 large aircraft, which are reflected in this table. The aircraft orders have delivery dates in fiscal years 2014 and 2015. The aircraft options have delivery dates ranging from fiscal years 2015 to 2018.

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. Adjusted EBITDAR is calculated by taking our net income and adjusting for interest expense, depreciation and amortization, rent expense, benefit (provision) for income taxes, gain (loss) on disposal of assets and special items, if any. Adjusted operating income, adjusted net income and adjusted diluted earnings per share are each adjusted for gain (loss) on disposal of assets and special items, if any, during the reported periods. Management believes these non-GAAP financial measures provide meaningful supplemental information regarding our results because they exclude amounts that management does not consider when assessing and measuring the operational and financial performance of the organization. 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

Six Months Ended

September 30,

September 30,

2012

2011

2012

2011

(In thousands, except per share amounts)

(Unaudited)

Adjusted operating income

$

46,274

$

38,493

$

93,276

$

73,482

Loss on disposal of assets

(1,262)

(1,611)

(6,577)

(195)

Special items

2,316

(27,287)

622

(27,287)

Operating income

$

47,328

$

9,595

$

87,321

$

46,000

Adjusted EBITDAR

$

84,922

$

71,235

$

168,727

$

138,260

Loss on disposal of assets

(1,262)

(1,611)

(6,577)

(195)

Special items

2,316

(24,610)

622

(24,610)

Depreciation and amortization

(23,321)

(25,431)

(44,693)

(48,139)

Rent expense

(15,282)

(9,108)

(31,556)

(18,061)

Interest expense

(8,597)

(9,459)

(17,371)

(18,414)

(Provision) benefit for income taxes

(8,342)

1,945

(14,522)

(4,661)

Net income

$

30,434

$

2,961

$

54,630

$

24,180

Adjusted net income

$

29,153

$

23,287

$

58,425

$

43,227

Loss on disposal of assets (i)

(990)

(1,257)

(5,196)

(152)

Special items (i)

1,505

(19,319)

101

(19,319)

Net income attributable to Bristow Group

$

29,668

$

2,711

$

53,330

$

23,756

Adjusted diluted earnings per share

$

0.80

$

0.63

$

1.60

$

1.18

Loss on disposal of assets (i)

(0.03)

(0.03)

(0.14)

Special items (i)

0.04

(0.53)

(0.53)

Diluted earnings per share

0.82

0.07

1.46

0.65

(i)

These amounts are presented after applying the appropriate tax effect to each item and dividing by the weighted average shares outstanding during the related period to calculate the earnings per share impact.

A correction of a calculation error related to Lider has been identified as a special item for the September 2012 quarter and non-cash impairment charges related to inventory spare parts and the abandonment of assets at the Creole, Louisiana location have been identified as special items for the September 2011 quarter, as they are not considered by management to be part of our normal and recurring operations when assessing and measuring the operational and financial performance of the organization.  The impact of these items on our adjusted operating income, adjusted EBITDAR, adjusted net income and adjusted diluted earnings per share is as follows:

Three Months Ended

September 30, 2012

Adjusted

Operating

Income

Adjusted

EBITDAR

Adjusted

Net Income

Adjusted

Diluted

Earnings

Per

Share

(In thousands, except per share amounts)

Lider correction

$

(2,316)

$

(2,316)

$

(1,505)

$

(0.04)

Total special items

$

(2,316)

$

(2,316)

$

(1,505)

(0.04)

Three Months Ended

September 30, 2011

Adjusted

Operating

Income

Adjusted

EBITDAR

Adjusted

Net Income

Adjusted

Diluted

Earnings

Per

Share

(In thousands, except per share amounts)

Impairment of inventories

$

24,610

$

24,610

$

17,579

$

0.48

Impairment of assets in Creole, Louisiana

2,677

1,740

0.05

Total special items

$

27,287

$

24,610

$

19,319

0.53

A correction of a calculation error related to Lider and the severance costs in the Southern North Sea have been identified as special items for the six months ended September 30, 2012 and non-cash impairment charges related to inventory spare parts and the abandonment of assets at the Creole, Louisiana location have been identified as special items for the six months ended September 30, 2011, as they are not considered by management to be part of our normal and recurring operations when assessing and measuring the operational and financial performance of the organization.  The impact of these items on our adjusted operating income, adjusted EBITDAR, adjusted net income and adjusted diluted earnings per share is as follows:

Six Months Ended

September 30, 2012

Adjusted

Operating

Income

Adjusted

EBITDAR

Adjusted

Net Income

Adjusted

Diluted

Earnings

Per

Share

(In thousands, except per share amounts)

Lider correction

$

(2,784)

$

(2,784)

$

(1,809)

$

(0.05)

Severance costs for termination of contract

2,162

2,162

1,708

0.05

Total special items

$

(622)

$

(622)

$

(101)

Six Months Ended

September 30, 2011

Adjusted

Operating

Income

Adjusted

EBITDAR

Adjusted

Net Income

Adjusted

Diluted

Earnings

Per

Share

(In thousands, except per share amounts)

Impairment of inventories

$

24,610

$

24,610

$

17,579

$

0.48

Impairment of assets in Creole, Louisiana

2,677

1,740

0.05

Total special items

$

27,287

$

24,610

$

19,319

0.53