R
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934
|
For
the quarterly period ended June 30, 2007
|
|
OR
|
|
£
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF
1934
|
For
the transition period
from to
|
Delaware
|
72-0679819
|
(State
or other jurisdiction of
|
(IRS
Employer
|
incorporation
or organization)
|
Identification
Number)
|
2000
W. Sam Houston Pkwy. S.,
|
77042
|
Suite
1700
|
(Zip
Code)
|
Houston,
Texas
|
|
(Address
of principal executive offices)
|
None
|
(Former
name, former address and former fiscal year, if changed since last
report)
|
Page
|
|||
PART
I
|
|||
Item
1.
|
2
|
||
Item
2.
|
27
|
||
Item
3.
|
45
|
||
Item
4.
|
45
|
||
PART
II
|
|||
Item
1.
|
46
|
||
Item
1A.
|
46
|
||
Item
2.
|
46
|
||
Item
4.
|
46
|
||
Item
6.
|
48
|
||
49
|
Three
Months Ended
June
30,
|
|||||||
2006
|
2007
|
||||||
(Unaudited)
|
|||||||
(In
thousands, except per
share
amounts)
|
|||||||
Gross
revenue:
|
|||||||
Operating
revenue from non-affiliates
|
$
|
181,786
|
$
|
212,454
|
|||
Operating
revenue from affiliates
|
12,079
|
11,097
|
|||||
Reimbursable
revenue from non-affiliates
|
26,125
|
20,348
|
|||||
Reimbursable
revenue from affiliates
|
1,072
|
1,103
|
|||||
221,062
|
245,002
|
||||||
Operating
expense:
|
|||||||
Direct
cost
|
138,470
|
163,836
|
|||||
Reimbursable
expense
|
26,898
|
21,241
|
|||||
Depreciation
and amortization
|
10,283
|
11,373
|
|||||
General
and administrative
|
15,349
|
19,262
|
|||||
Gain
on disposal of assets
|
(998
|
)
|
(584
|
)
|
|||
190,002
|
215,128
|
||||||
Operating
income
|
31,060
|
29,874
|
|||||
Earnings
from unconsolidated affiliates, net of losses
|
1,559
|
3,390
|
|||||
Interest
income
|
1,290
|
2,198
|
|||||
Interest
expense
|
(3,236
|
)
|
(2,933
|
)
|
|||
Other
income (expense), net
|
(4,785
|
)
|
426
|
||||
Income
before provision for income taxes and minority interest
|
25,888
|
32,955
|
|||||
Provision
for income taxes
|
(8,543
|
)
|
(9,834
|
)
|
|||
Minority
interest
|
(116
|
)
|
(449
|
)
|
|||
Net
income
|
17,229
|
22,672
|
|||||
Preferred
Stock dividends
|
—
|
(3,162
|
)
|
||||
Net
income available to common stockholders
|
$
|
17,229
|
$
|
19,510
|
|||
Earnings
per common share:
|
|||||||
Basic
|
$
|
0.74
|
$
|
0.83
|
|||
Diluted
|
$
|
0.73
|
$
|
0.75
|
March
31,
|
June
30,
|
||||||||||
2007
|
2007
|
||||||||||
(Unaudited)
|
|||||||||||
(In
thousands)
|
|||||||||||
ASSETS
|
|||||||||||
Current
assets:
|
|||||||||||
Cash
and cash equivalents
|
$
|
184,188
|
$
|
339,542
|
|||||||
Accounts
receivable from non-affiliates, net of allowance for doubtful accounts
of
$2.0
million
and $1.4 million, respectively
|
158,770
|
187,836
|
|||||||||
Accounts
receivable from affiliates, net of allowance for doubtful accounts
of
$3.2
million
and $2.9 million, respectively
|
17,199
|
19,694
|
|||||||||
Inventories
|
157,870
|
169,635
|
|||||||||
Prepaid
expenses and other
|
17,947
|
17,768
|
|||||||||
Total
current assets
|
535,974
|
734,475
|
|||||||||
Investment
in unconsolidated affiliates
|
46,828
|
47,561
|
|||||||||
Property
and equipment – at cost:
|
|||||||||||
Land
and buildings
|
51,850
|
56,339
|
|||||||||
Aircraft
and equipment
|
1,141,578
|
1,269,390
|
|||||||||
1,193,428
|
1,325,729
|
||||||||||
Less
– Accumulated depreciation and amortization
|
(301,520
|
)
|
(308,258
|
)
|
|||||||
891,908
|
1,017,471
|
||||||||||
Goodwill
|
20,368
|
27,119
|
|||||||||
Other
assets
|
10,725
|
17,814
|
|||||||||
$
|
1,505,803
|
$
|
1,844,440
|
||||||||
LIABILITIES
AND STOCKHOLDERS’ INVESTMENT
|
|||||||||||
Current
liabilities:
|
|||||||||||
Accounts
payable
|
$
|
42,343
|
$
|
43,556
|
|||||||
Accrued
wages, benefits and related taxes
|
38,281
|
38,877
|
|||||||||
Income
taxes payable
|
4,377
|
2,240
|
|||||||||
Other
accrued taxes
|
9,084
|
9,944
|
|||||||||
Deferred
revenues
|
16,283
|
17,372
|
|||||||||
Accrued
maintenance and repairs
|
12,309
|
13,083
|
|||||||||
Other
accrued liabilities
|
22,828
|
22,027
|
|||||||||
Deferred
taxes
|
17,611
|
17,962
|
|||||||||
Short-term
borrowings and current maturities of long-term debt
|
4,852
|
7,923
|
|||||||||
Total
current liabilities
|
167,968
|
172,984
|
|||||||||
Long-term
debt, less current maturities
|
254,230
|
553,382
|
|||||||||
Accrued
pension liabilities
|
113,069
|
112,992
|
|||||||||
Other
liabilities and deferred credits
|
17,345
|
15,112
|
|||||||||
Deferred
taxes
|
76,089
|
81,795
|
|||||||||
Minority
interest
|
5,445
|
5,267
|
|||||||||
Commitments
and contingencies (Note 6)
|
|||||||||||
Stockholders’
investment:
|
|||||||||||
5.50%
mandatory convertible preferred stock, $.01 par value, authorized
and
outstanding
4,600,000
shares; entitled in liquidation to $230 million; net of offering
costs
of
$7.4
million
|
222,554
|
222,554
|
|||||||||
Common
stock, $.01 par value, authorized 35,000,000 shares; outstanding:
23,585,370 as
of
March 31 and 23,723,345 as of June 30 (exclusive of 1,281,050 treasury
shares)
|
236
|
237
|
|||||||||
Additional
paid-in capital
|
169,353
|
172,373
|
|||||||||
Retained
earnings
|
515,589
|
535,099
|
|||||||||
Accumulated
other comprehensive loss
|
(36,075
|
)
|
(27,355
|
)
|
|||||||
871,657
|
902,908
|
||||||||||
$
|
1,505,803
|
$
|
1,844,440
|
Three
Months Ended
June 30,
|
||||||||
2006
|
2007
|
|||||||
(Unaudited)
|
||||||||
(In
thousands)
|
||||||||
Cash
flows from operating activities:
|
||||||||
Net
income
|
$
|
17,229
|
$
|
22,672
|
||||
Adjustments
to reconcile net income to net cash provided by (used in) operating
activities:
|
||||||||
Depreciation
and amortization
|
10,283
|
11,373
|
||||||
Deferred
income taxes
|
1,407
|
5,857
|
||||||
Gain
on asset dispositions
|
(998
|
)
|
(584
|
)
|
||||
Stock-based
compensation expense
|
752
|
1,514
|
||||||
Equity
in earnings from unconsolidated affiliates under (over) dividends
received
|
845
|
(180
|
)
|
|||||
Minority
interest in earnings
|
116
|
449
|
||||||
Tax
benefit related to exercise of stock options
|
(303
|
)
|
(410
|
)
|
||||
Increase
(decrease) in cash resulting from changes in:
|
||||||||
Accounts
receivable
|
(6,485
|
)
|
(29,861
|
)
|
||||
Inventories
|
(3,273
|
)
|
(7,999
|
)
|
||||
Prepaid
expenses and other
|
(1,180
|
)
|
2,174
|
|||||
Accounts
payable
|
5,847
|
105
|
||||||
Accrued
liabilities
|
8,536
|
(2,089
|
)
|
|||||
Other
liabilities and deferred credits
|
(599
|
)
|
(5,340
|
)
|
||||
Net
cash provided by (used in) operating activities
|
32,177
|
(2,319
|
)
|
|||||
Cash
flows from investing activities:
|
||||||||
Capital
expenditures
|
(46,882
|
)
|
(121,780
|
)
|
||||
Proceeds
from asset dispositions
|
2,556
|
451
|
||||||
Acquisition,
net of cash received
|
—
|
(12,926
|
)
|
|||||
Net
cash used in investing activities
|
(44,326
|
)
|
(134,255
|
)
|
||||
Cash
flows from financing activities:
|
||||||||
Proceeds
from borrowings
|
—
|
300,000
|
||||||
Debt
issuance costs
|
—
|
(4,249
|
)
|
|||||
Repayment
of debt and debt redemption premiums
|
(3,957
|
)
|
(3,166
|
)
|
||||
Partial
prepayment of put/call obligation
|
(30
|
)
|
(37
|
)
|
||||
Preferred
Stock dividends paid
|
—
|
(3,163
|
)
|
|||||
Issuance
of common stock
|
764
|
1,095
|
||||||
Tax
benefit related to exercise of stock options
|
303
|
410
|
||||||
Net
cash provided by (used in) financing activities
|
(2,920
|
)
|
290,890
|
|||||
Effect
of exchange rate changes on cash and cash equivalents
|
2,221
|
1,038
|
||||||
Net
increase (decrease) in cash and cash equivalents
|
(12,848
|
)
|
155,354
|
|||||
Cash
and cash equivalents at beginning of period
|
122,482
|
184,188
|
||||||
Cash
and cash equivalents at end of period
|
$
|
109,634
|
$
|
339,542
|
||||
Supplemental
disclosure of cash flow information:
|
||||||||
Cash
paid during the period for:
|
||||||||
Interest,
net of interest capitalized
|
$
|
6,357
|
$
|
7,504
|
||||
Income
taxes
|
$
|
2,562
|
$
|
6,144
|
Three Months Ended June 30,
|
|||||||
2006
|
2007
|
||||||
High
|
$
|
1.89
|
$
|
2.01
|
|||
Average
|
1.83
|
1.99
|
|||||
Low
|
1.74
|
1.97
|
April
2, 2007
|
|||||
(In
thousands)
|
|||||
Current
assets
|
$
|
2,930
|
|||
Property
and equipment
|
8,656
|
||||
Other
assets
|
10,084
|
||||
Total
assets acquired
|
21,670
|
||||
Current
liabilities, including debt
|
6,639
|
||||
Total
liabilities assumed
|
6,639
|
||||
Net
assets acquired
|
$
|
15,031
|
March
31,
2007
|
June
30,
2007
|
|||||
7
½% Senior Notes due 2017
|
$
|
—
|
$
|
300,000
|
||
6
⅛% Senior Notes due 2013
|
230,000
|
230,000
|
||||
Term
loans
|
18,848
|
18,409
|
||||
Hemisco
Helicopters International, Inc. note
|
4,380
|
4,380
|
||||
Short-term
advance from customer
|
1,400
|
1,400
|
||||
Note
to Sakhalin Aviation Services Ltd.
|
389
|
336
|
||||
Sakhalin
debt
|
4,065
|
3,680
|
||||
Bristow
Academy aircraft loans
|
—
|
3,100
|
||||
Total
debt
|
259,082
|
561,305
|
||||
Less
short-term borrowings and current maturities of long-term
debt
|
(4,852
|
)
|
(7,923
|
)
|
||
Total
long-term
debt
|
$
|
254,230
|
$
|
553,382
|
Nine
Months
Ending
March
31,
|
Fiscal
Year Ending March 31,
|
|||||||||||||||||||||
2008
|
2009
|
2010
|
2011
|
2012-2013
|
Total
|
|||||||||||||||||
Commitments
as of June 30, 2007:
|
||||||||||||||||||||||
Number
of aircraft:
|
||||||||||||||||||||||
Small
|
3
|
—
|
—
|
—
|
—
|
3
|
||||||||||||||||
Medium
|
8
|
3
|
—
|
—
|
—
|
11
|
||||||||||||||||
Large
|
6
|
6
|
—
|
—
|
—
|
12
|
||||||||||||||||
Training
|
6
|
—
|
—
|
—
|
—
|
6
|
||||||||||||||||
23
|
(1)
|
9
|
(2)
|
—
|
—
|
—
|
32
|
|||||||||||||||
Related
expenditures (in thousands) (3)
|
$
|
165,030
|
$
|
89,956
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
254,986
|
||||||||||
Options
as of June 30, 2007:
|
||||||||||||||||||||||
Number
of aircraft:
|
||||||||||||||||||||||
Medium
|
—
|
1
|
9
|
8
|
12
|
30
|
||||||||||||||||
Large
|
—
|
5
|
11
|
6
|
—
|
22
|
||||||||||||||||
—
|
6
|
20
|
14
|
12
|
52
|
|||||||||||||||||
Related
expenditures (in thousands) (3)
|
$
|
36,973
|
$
|
191,661
|
$
|
289,399
|
$
|
132,102
|
$
|
82,733
|
$
|
732,868
|
(1)
|
Signed
customer contracts are currently in place for 8 of the 17 non-training
aircraft.
|
(2)
|
No
signed customer contracts are currently in place for these 9 aircraft.
|
(3)
|
Includes
progress payments on aircraft scheduled to be delivered in future
periods.
|
Three
Months Ended
|
||||||||
June
30, 2007
|
||||||||
Orders
|
Options
|
|||||||
Beginning
of
quarter
|
31
|
52
|
||||||
Aircraft
delivered
|
(7
|
)
|
—
|
|||||
Aircraft
ordered
|
2
|
—
|
||||||
Training
aircraft
|
6
|
—
|
||||||
End
of
quarter
|
32
|
52
|
Amount
of Commitment Expiration Per Period
|
|||||||||||||||||
Total
|
Remainder
of
Fiscal
Year
2008
|
Fiscal
Years 2009-2010
|
Fiscal
Years
2011-2012
|
Fiscal
Year
2013
and Thereafter
|
|||||||||||||
(In
thousands)
|
|||||||||||||||||
$
|
37,284
|
$
|
3,769
|
$
|
13,455
|
$
|
20,060
|
$
|
—
|
Three
Months Ended
June
30,
|
|||||||
2006
|
2007
|
||||||
(In
thousands)
|
|||||||
Service
cost for benefits earned during the period
|
$
|
63
|
$
|
71
|
|||
Interest
cost on pension benefit obligation
|
5,484
|
6,559
|
|||||
Expected
return on assets
|
(5,674
|
)
|
(6,790
|
)
|
|||
Amortization
of unrecognized losses
|
879
|
1,024
|
|||||
Net
periodic pension cost
|
$
|
752
|
$
|
864
|
Three
Months Ended
June
30,
|
||||||
2006
|
2007
|
|||||
Net
income (in thousands):
|
||||||
Income
available to common stockholders – basic
|
$
|
17,229
|
$
|
19,510
|
||
Preferred
Stock dividends
|
—
|
3,162
|
||||
Income
available to common stockholders - diluted
|
$
|
17,229
|
$
|
22,672
|
||
Shares:
|
||||||
Weighted
average number of common shares outstanding – basic
|
23,393,010
|
23,602,696
|
||||
Assumed
conversion of Preferred Stock outstanding during the
period
|
—
|
6,522,972
|
||||
Net
effect of dilutive stock options, restricted stock and restricted
stock
units
based
on the treasury stock method
|
114,498
|
93,357
|
||||
Weighted
average number of common shares outstanding – diluted
|
23,507,508
|
30,219,025
|
||||
Basic
earnings per common share
|
$
|
0.74
|
$
|
0.83
|
||
Diluted
earnings per common share
|
$
|
0.73
|
$
|
0.75
|
Three
Months Ended
June
30,
|
||||||||
2006
|
2007
|
|||||||
(In
thousands)
|
||||||||
Segment
gross revenue from external customers:
|
||||||||
Helicopter
Services:
|
||||||||
North
America
|
$
|
59,073
|
$
|
57,339
|
||||
South
and Central America
|
13,012
|
16,036
|
||||||
Europe
|
70,594
|
82,927
|
||||||
West
Africa
|
31,736
|
33,283
|
||||||
Southeast
Asia
|
17,040
|
22,492
|
||||||
Other
International
|
8,955
|
11,276
|
||||||
EH
Centralized Operations
|
3,012
|
2,108
|
||||||
Bristow Academy
|
—
|
3,019
|
||||||
Total
Helicopter Services
|
203,422
|
228,480
|
||||||
Production
Management Services
|
17,665
|
16,522
|
||||||
Corporate
|
(25
|
)
|
—
|
|||||
Total
segment gross revenue
|
$
|
221,062
|
$
|
245,002
|
Intersegment
and intrasegment gross revenue:
|
||||||||
Helicopter
Services:
|
||||||||
North
America
|
$
|
4,295
|
$
|
3,600
|
||||
South
and Central America
|
—
|
—
|
||||||
Europe
|
1,387
|
430
|
||||||
West
Africa
|
—
|
—
|
||||||
Southeast
Asia
|
—
|
—
|
||||||
Other
International
|
—
|
179
|
||||||
EH
Centralized Operations
|
62
|
4,697
|
||||||
Bristow Academy
|
—
|
—
|
||||||
Total
Helicopter Services
|
5,744
|
8,906
|
||||||
Production
Management Services
|
19
|
21
|
||||||
Total
intersegment and intrasegment gross revenue
|
$
|
5,763
|
$
|
8,927
|
Three
Months Ended
June
30,
|
||||||||
2006
|
2007
|
|||||||
(In
thousands)
|
||||||||
Consolidated
gross revenue reconciliation:
|
||||||||
Helicopter
Services:
|
||||||||
North
America
|
$
|
63,368
|
$
|
60,939
|
||||
South
and Central America
|
13,012
|
16,036
|
||||||
Europe
|
71,981
|
83,357
|
||||||
West
Africa
|
31,736
|
33,283
|
||||||
Southeast
Asia
|
17,040
|
22,492
|
||||||
Other
International
|
8,955
|
11,455
|
||||||
EH
Centralized Operations
|
3,074
|
6,805
|
||||||
Bristow Academy
|
—
|
3,019
|
||||||
Intrasegment
eliminations
|
(2,860
|
)
|
(6,235
|
)
|
||||
Total
Helicopter Services (1)
|
206,306
|
231,151
|
||||||
Production
Management Services (2)
|
17,684
|
16,543
|
||||||
Corporate
|
(25
|
)
|
—
|
|||||
Intersegment
eliminations
|
(2,903
|
)
|
(2,692
|
)
|
||||
Total
consolidated gross revenue
|
$
|
221,062
|
$
|
245,002
|
Consolidated
operating income
(loss) reconciliation:
|
||||||||
Helicopter
Services:
|
||||||||
North
America
|
$
|
9,233
|
$
|
10,714
|
||||
South
and Central America
|
3,970
|
3,685
|
||||||
Europe
|
14,096
|
14,575
|
||||||
West
Africa
|
4,333
|
2,797
|
||||||
Southeast
Asia
|
2,435
|
4,127
|
||||||
Other
International
|
1,516
|
2,265
|
||||||
EH
Centralized Operations
|
(1,767
|
)
|
(4,279
|
)
|
||||
Bristow Academy
|
—
|
(91
|
)
|
|||||
Total
Helicopter Services
|
33,816
|
33,793
|
||||||
Production
Management Services
|
1,413
|
1,089
|
||||||
Gain
on disposal of assets
|
998
|
584
|
||||||
Corporate
|
(5,167
|
)
|
(5,592
|
)
|
||||
Total
consolidated operating income
|
$
|
31,060
|
$
|
29,874
|
March
31,
|
June
30,
|
|||||||
2007
|
2007
|
|||||||
(In
thousands)
|
||||||||
Identifiable
assets:
|
||||||||
Helicopter
Services:
|
||||||||
North
America
|
$
|
424,936
|
$
|
434,535
|
||||
South
and Central America
|
158,383
|
190,161
|
||||||
Europe
|
391,356
|
417,662
|
||||||
West
Africa
|
134,128
|
173,353
|
||||||
Southeast
Asia
|
42,458
|
58,825
|
||||||
Other
International
|
71,679
|
85,182
|
||||||
EH
Centralized Operations
|
157,565
|
163,158
|
||||||
Bristow Academy
|
—
|
22,059
|
||||||
Total
Helicopter Services
|
1,380,505
|
1,544,935
|
||||||
Production
Management Services
|
32,074
|
33,989
|
||||||
Corporate
|
93,224
|
265,516
|
||||||
Total
identifiable assets
|
$
|
1,505,803
|
$
|
1,844,440
|
(1)
|
Includes
reimbursable revenue of $23.3 million and $20.2 million for the
three
months ended June 30, 2006 and 2007,
respectively.
|
(2)
|
Includes
reimbursable revenue of
$3.9 million and $1.3 million for the three months ended June 30,
2006 and
2007, respectively, net of intercompany
eliminations.
|
|
NOTE
11 — COMPREHENSIVE INCOME
|
Three
Months Ended
June
30,
|
||||||
2006
|
2007
|
|||||
(In
thousands)
|
||||||
Net
income
|
$
|
17,229
|
$
|
22,672
|
||
Other
comprehensive income (loss):
|
||||||
Currency
translation adjustments
|
18,367
|
8,720
|
||||
Comprehensive
income (loss)
|
$
|
35,596
|
$
|
31,392
|
Parent
|
Non-
|
|||||||||||||||||||
Company
|
Guarantor
|
Guarantor
|
||||||||||||||||||
Only
|
Subsidiaries
|
Subsidiaries
|
Eliminations
|
Consolidated
|
||||||||||||||||
(In
thousands)
|
||||||||||||||||||||
Revenue:
|
||||||||||||||||||||
Gross
revenue
|
$
|
(25
|
)
|
$
|
84,449
|
$
|
136,638
|
$
|
—
|
$
|
221,062
|
|||||||||
Intercompany
revenue
|
—
|
2,926
|
2,365
|
(5,291
|
)
|
—
|
||||||||||||||
(25
|
)
|
87,375
|
139,003
|
(5,291
|
)
|
221,062
|
||||||||||||||
Operating
expense:
|
||||||||||||||||||||
Direct
cost
|
67
|
62,327
|
102,974
|
—
|
165,368
|
|||||||||||||||
Intercompany
expenses
|
—
|
2,365
|
2,876
|
(5,241
|
)
|
—
|
||||||||||||||
Depreciation
and amortization
|
26
|
4,250
|
6,007
|
—
|
10,283
|
|||||||||||||||
General
and administrative
|
5,049
|
4,366
|
5,984
|
(50
|
)
|
15,349
|
||||||||||||||
Gain
on disposal of assets
|
—
|
(136
|
)
|
(862
|
)
|
—
|
(998
|
)
|
||||||||||||
5,142
|
73,172
|
116,979
|
(5,291
|
)
|
190,002
|
|||||||||||||||
Operating
income (loss)
|
(5,167
|
)
|
14,203
|
22,024
|
—
|
31,060
|
||||||||||||||
Earnings
(losses) from unconsolidated
affiliates,
net
|
11,870
|
(272
|
)
|
1,885
|
(11,924
|
)
|
1,559
|
|||||||||||||
Interest
income
|
14,630
|
60
|
877
|
(14,277
|
)
|
1,290
|
||||||||||||||
Interest
expense
|
(3,283
|
)
|
—
|
(14,230
|
)
|
14,277
|
(3,236
|
)
|
||||||||||||
Other
income (expense), net
|
(89
|
)
|
(77
|
)
|
(4,619
|
)
|
—
|
(4,785
|
)
|
|||||||||||
Income
before provision for income
taxes
and minority interest
|
17,961
|
13,914
|
5,937
|
(11,924
|
)
|
25,888
|
||||||||||||||
Allocation
of consolidated income taxes
|
(693
|
)
|
(1,369
|
)
|
(6,481
|
)
|
—
|
(8,543
|
)
|
|||||||||||
Minority
interest
|
(39
|
)
|
—
|
(77
|
)
|
—
|
(116
|
)
|
||||||||||||
Net
income (loss)
|
$
|
17,229
|
$
|
12,545
|
$
|
(621
|
)
|
$
|
(11,924
|
)
|
$
|
17,229
|
Parent
|
Non-
|
|||||||||||||||||||
Company
|
Guarantor
|
Guarantor
|
||||||||||||||||||
Only
|
Subsidiaries
|
Subsidiaries
|
Eliminations
|
Consolidated
|
||||||||||||||||
(In
thousands)
|
||||||||||||||||||||
Revenue:
|
||||||||||||||||||||
Gross
revenue
|
$
|
—
|
$
|
88,159
|
$
|
156,843
|
$
|
—
|
$
|
245,002
|
||||||||||
Intercompany
revenue
|
—
|
5,156
|
6,115
|
(11,271
|
)
|
—
|
||||||||||||||
—
|
93,315
|
162,958
|
(11,271
|
)
|
245,002
|
|||||||||||||||
Operating
expense:
|
||||||||||||||||||||
Direct
cost
|
—
|
60,127
|
124,950
|
—
|
185,077
|
|||||||||||||||
Intercompany
expenses
|
—
|
6,214
|
5,057
|
(11,271
|
)
|
—
|
||||||||||||||
Depreciation
and amortization
|
71
|
5,446
|
5,856
|
—
|
11,373
|
|||||||||||||||
General
and administrative
|
5,493
|
3,944
|
9,825
|
—
|
19,262
|
|||||||||||||||
Loss
(gain) on disposal of assets
|
—
|
(708
|
)
|
124
|
—
|
(584
|
)
|
|||||||||||||
5,564
|
75,023
|
145,812
|
(11,271
|
)
|
215,128
|
|||||||||||||||
Operating
income (loss)
|
(5,564
|
)
|
18,292
|
17,146
|
—
|
29,874
|
||||||||||||||
Earnings
(losses) from unconsolidated
affiliates,
net
|
15,625
|
175
|
3,215
|
(15,625
|
)
|
3,390
|
||||||||||||||
Interest
income
|
19,647
|
83
|
687
|
(18,219
|
)
|
2,198
|
||||||||||||||
Interest
expense
|
(2,812
|
)
|
(5
|
)
|
(18,335
|
)
|
18,219
|
(2,933
|
)
|
|||||||||||
Other
income (expense), net
|
(25
|
)
|
(43
|
)
|
494
|
—
|
426
|
|||||||||||||
Income
before provision for income
taxes
and minority interest
|
26,871
|
18,502
|
3,207
|
(15,625
|
)
|
32,955
|
||||||||||||||
Allocation
of consolidated income taxes
|
(4,152
|
)
|
(593
|
)
|
(5,089
|
)
|
—
|
(9,834
|
)
|
|||||||||||
Minority
interest
|
(47
|
)
|
—
|
(402
|
)
|
—
|
(449
|
)
|
||||||||||||
Net
income (loss)
|
$
|
22,672
|
$
|
17,909
|
$
|
(2,284
|
)
|
$
|
(15,625
|
)
|
$
|
22,672
|
Parent
|
Non-
|
||||||||||||||||||
Company
|
Guarantor
|
Guarantor
|
|||||||||||||||||
Only
|
Subsidiaries
|
Subsidiaries
|
Eliminations
|
Consolidated
|
|||||||||||||||
(In
thousands)
|
|||||||||||||||||||
ASSETS
|
|||||||||||||||||||
Current
assets:
|
|||||||||||||||||||
Cash
and cash equivalents
|
$
|
133,010
|
$
|
3,434
|
$
|
47,744
|
$
|
—
|
$
|
184,188
|
|||||||||
Accounts
receivable
|
32,103
|
62,493
|
123,453
|
(42,080
|
)
|
175,969
|
|||||||||||||
Inventories
|
—
|
72,834
|
85,036
|
—
|
157,870
|
||||||||||||||
Prepaid
expenses and other
|
830
|
9,951
|
7,166
|
—
|
17,947
|
||||||||||||||
Total
current assets
|
165,943
|
148,712
|
263,399
|
(42,080
|
)
|
535,974
|
|||||||||||||
Intercompany
investment
|
297,113
|
1,046
|
—
|
(298,159
|
)
|
—
|
|||||||||||||
Investment
in unconsolidated affiliates
|
4,643
|
1,611
|
40,574
|
—
|
46,828
|
||||||||||||||
Intercompany
notes receivable
|
825,203
|
—
|
11,980
|
(837,183
|
)
|
—
|
|||||||||||||
Property
and equipment – at cost:
|
|||||||||||||||||||
Land
and buildings
|
263
|
36,689
|
14,898
|
—
|
51,850
|
||||||||||||||
Aircraft
and equipment
|
2,259
|
550,611
|
588,708
|
—
|
1,141,578
|
||||||||||||||
2,522
|
587,300
|
603,606
|
—
|
1,193,428
|
|||||||||||||||
Less: Accumulated
depreciation and
amortization
|
(1,471
|
)
|
(123,367
|
)
|
(176,682
|
)
|
—
|
(301,520
|
)
|
||||||||||
1,051
|
463,933
|
426,924
|
—
|
891,908
|
|||||||||||||||
Goodwill
|
—
|
18,483
|
1,774
|
111
|
20,368
|
||||||||||||||
Other
assets
|
9,348
|
224
|
1,153
|
—
|
10,725
|
||||||||||||||
$
|
1,303,301
|
$
|
634,009
|
$
|
745,804
|
$
|
(1,177,311
|
)
|
$
|
1,505,803
|
|||||||||
LIABILITIES
AND STOCKHOLDERS’ INVESTMENT
|
|||||||||||||||||||
Current
liabilities:
|
|||||||||||||||||||
Accounts
payable
|
$
|
1,043
|
$
|
16,628
|
$
|
36,028
|
$
|
(11,356
|
)
|
$
|
42,343
|
||||||||
Accrued
liabilities
|
10,736
|
20,009
|
103,141
|
(30,724
|
)
|
103,162
|
|||||||||||||
Deferred
taxes
|
217
|
—
|
17,394
|
—
|
17,611
|
||||||||||||||
Short-term
borrowings and current
maturities
of long-term debt
|
—
|
—
|
4,852
|
—
|
4,852
|
||||||||||||||
Total
current liabilities
|
11,996
|
36,637
|
161,415
|
(42,080
|
)
|
167,968
|
|||||||||||||
Long-term
debt, less current maturities
|
234,379
|
—
|
19,851
|
—
|
254,230
|
||||||||||||||
Intercompany
notes payable
|
14,569
|
230,773
|
591,841
|
(837,183
|
)
|
—
|
|||||||||||||
Other
liabilities and deferred credits
|
4,529
|
9,644
|
116,241
|
—
|
130,414
|
||||||||||||||
Deferred
taxes
|
42,655
|
2,295
|
31,139
|
—
|
76,089
|
||||||||||||||
Minority
interest
|
2,042
|
—
|
3,403
|
—
|
5,445
|
||||||||||||||
Stockholders’
investment:
|
|||||||||||||||||||
5.50%
mandatory convertible preferred
stock
|
222,554
|
—
|
—
|
—
|
222,554
|
||||||||||||||
Common
stock
|
236
|
4,062
|
35,426
|
(39,488
|
)
|
236
|
|||||||||||||
Additional
paid-in-capital
|
169,353
|
51,170
|
8,015
|
(59,185
|
)
|
169,353
|
|||||||||||||
Retained
earnings
|
515,589
|
299,428
|
(82,414
|
)
|
(217,014
|
)
|
515,589
|
||||||||||||
Accumulated
other comprehensive
income
(loss)
|
85,399
|
—
|
(139,113
|
)
|
17,639
|
(36,075
|
)
|
||||||||||||
993,131
|
354,660
|
(178,086
|
)
|
(298,048
|
)
|
871,657
|
|||||||||||||
$
|
1,303,301
|
$
|
634,009
|
$
|
745,804
|
$
|
(1,177,311
|
)
|
$
|
1,505,803
|
Parent
|
Non-
|
|||||||||||||||||||
Company
|
Guarantor
|
Guarantor
|
||||||||||||||||||
Only
|
Subsidiaries
|
Subsidiaries
|
Eliminations
|
Consolidated
|
||||||||||||||||
(In
thousands)
|
||||||||||||||||||||
ASSETS
|
||||||||||||||||||||
Current
assets:
|
||||||||||||||||||||
Cash
and cash equivalents
|
$
|
295,055
|
$
|
6,348
|
$
|
38,139
|
$
|
—
|
$
|
339,542
|
||||||||||
Accounts
receivable
|
37,296
|
82,067
|
141,198
|
(53,031
|
)
|
207,530
|
||||||||||||||
Inventories
|
—
|
73,997
|
95,638
|
—
|
169,635
|
|||||||||||||||
Prepaid
expenses and other
|
665
|
8,907
|
8,196
|
—
|
17,768
|
|||||||||||||||
Total
current assets
|
333,016
|
171,319
|
283,171
|
(53,031
|
)
|
734,475
|
||||||||||||||
Intercompany
investment
|
312,145
|
1,046
|
15,031
|
(328,222
|
)
|
—
|
||||||||||||||
Investment
in unconsolidated affiliates
|
4,591
|
1,783
|
41,187
|
—
|
47,561
|
|||||||||||||||
Intercompany
notes receivable
|
946,008
|
—
|
(5,656
|
)
|
(940,352
|
)
|
—
|
|||||||||||||
Property
and equipment – at cost:
|
||||||||||||||||||||
Land
and buildings
|
262
|
40,006
|
16,071
|
—
|
56,339
|
|||||||||||||||
Aircraft
and equipment
|
2,310
|
631,486
|
635,594
|
—
|
1,269,390
|
|||||||||||||||
2,572
|
671,492
|
651,665
|
—
|
1,325,729
|
||||||||||||||||
Less: Accumulated
depreciation and
amortization
|
(1,480
|
)
|
(127,309
|
)
|
(179,469
|
)
|
—
|
(308,258
|
)
|
|||||||||||
1,092
|
544,183
|
472,196
|
—
|
1,017,471
|
||||||||||||||||
Goodwill
|
—
|
18,484
|
8,524
|
111
|
27,119
|
|||||||||||||||
Other
assets
|
13,881
|
239
|
3,694
|
—
|
17,814
|
|||||||||||||||
$
|
1,610,733
|
$
|
737,054
|
$
|
818,147
|
$
|
(1,321,494
|
)
|
$
|
1,844,440
|
||||||||||
LIABILITIES
AND STOCKHOLDERS’ INVESTMENT
|
||||||||||||||||||||
Current
liabilities:
|
||||||||||||||||||||
Accounts
payable
|
$
|
2,736
|
$
|
18,677
|
$
|
42,161
|
$
|
(20,018
|
)
|
$
|
43,556
|
|||||||||
Accrued
liabilities
|
8,747
|
23,026
|
104,783
|
(33,013
|
)
|
103,543
|
||||||||||||||
Deferred
taxes
|
221
|
—
|
17,741
|
—
|
17,962
|
|||||||||||||||
Short-term
borrowings and current
maturities
of long-term debt
|
—
|
—
|
7,923
|
—
|
7,923
|
|||||||||||||||
Total
current liabilities
|
11,704
|
41,703
|
172,608
|
(53,031
|
)
|
172,984
|
||||||||||||||
Long-term
debt, less current maturities
|
534,380
|
—
|
19,002
|
—
|
553,382
|
|||||||||||||||
Intercompany
notes payable
|
—
|
310,652
|
629,717
|
(940,369
|
)
|
—
|
||||||||||||||
Other
liabilities and deferred credits
|
3,935
|
9,572
|
114,597
|
—
|
128,104
|
|||||||||||||||
Deferred
taxes
|
46,375
|
2,527
|
32,893
|
—
|
81,795
|
|||||||||||||||
Minority
interest
|
2,089
|
—
|
3,178
|
—
|
5,267
|
|||||||||||||||
Stockholders’
investment:
|
||||||||||||||||||||
5.50%
mandatory convertible preferred
stock
|
222,554
|
—
|
—
|
—
|
222,554
|
|||||||||||||||
Common
stock
|
237
|
4,062
|
69,992
|
(74,054
|
)
|
237
|
||||||||||||||
Additional
paid-in-capital
|
172,373
|
51,201
|
8,045
|
(59,246
|
)
|
172,373
|
||||||||||||||
Retained
earnings
|
535,099
|
317,337
|
(84,698
|
)
|
(232,639
|
)
|
535,099
|
|||||||||||||
Accumulated
other comprehensive
income
(loss)
|
81,987
|
—
|
(147,187
|
)
|
37,845
|
(27,355
|
)
|
|||||||||||||
1,012,250
|
372,600
|
(153,848
|
)
|
(328,094
|
)
|
902,908
|
||||||||||||||
$
|
1,610,733
|
$
|
737,054
|
$
|
818,147
|
$
|
(1,321,494
|
)
|
$
|
1,844,440
|
Parent
|
Non-
|
|||||||||||||||||||
Company
|
Guarantor
|
Guarantor
|
||||||||||||||||||
Only
|
Subsidiaries
|
Subsidiaries
|
Eliminations
|
Consolidated
|
||||||||||||||||
(In
thousands)
|
||||||||||||||||||||
Net
cash provided by (used in) operating
activities
|
$
|
(39,344
|
)
|
$
|
40,613
|
$
|
19,933
|
$
|
10,975
|
$
|
32,177
|
|||||||||
Cash
flows from investing activities:
|
||||||||||||||||||||
Capital
expenditures
|
(228
|
)
|
(42,248
|
)
|
(4,406
|
)
|
—
|
(46,882
|
)
|
|||||||||||
Proceeds
from asset dispositions
|
—
|
1,700
|
856
|
—
|
2,556
|
|||||||||||||||
Net
cash used in investing activities
|
(228
|
)
|
(40,548
|
)
|
(3,550
|
)
|
—
|
(44,326
|
)
|
|||||||||||
Cash
flows from financing activities:
|
||||||||||||||||||||
Proceeds
from borrowings
|
5,000
|
—
|
7,195
|
(12,195
|
)
|
—
|
||||||||||||||
Repayment
of debt and debt redemption
premiums
|
—
|
—
|
(3,957
|
)
|
—
|
(3,957
|
)
|
|||||||||||||
Repayment
of intercompany debt
|
—
|
—
|
(1,220
|
)
|
1,220
|
—
|
||||||||||||||
Partial
prepayment of put/call obligation
|
(30
|
)
|
—
|
—
|
—
|
(30
|
)
|
|||||||||||||
Issuance
of common stock
|
764
|
—
|
—
|
—
|
764
|
|||||||||||||||
Tax
benefit related to exercise of stock
options
|
303
|
—
|
—
|
—
|
303
|
|||||||||||||||
Net
cash provided by (used in) financing
activities
|
6,037
|
—
|
2,018
|
(10,975
|
)
|
(2,920
|
)
|
|||||||||||||
Effect
of exchange rate changes on cash and
cash
equivalents
|
105
|
—
|
2,116
|
—
|
2,221
|
|||||||||||||||
Net
increase (decrease) in cash and
cash
equivalents
|
(33,430
|
)
|
65
|
20,517
|
—
|
(12,848
|
)
|
|||||||||||||
Cash
and cash equivalents at beginning
of
period
|
74,601
|
1,363
|
46,518
|
—
|
122,482
|
|||||||||||||||
Cash
and cash equivalents at end of
period
|
$
|
41,171
|
$
|
1,428
|
$
|
67,035
|
$
|
—
|
$
|
109,634
|
Parent
|
Non-
|
|||||||||||||||||||
Company
|
Guarantor
|
Guarantor
|
||||||||||||||||||
Only
|
Subsidiaries
|
Subsidiaries
|
Eliminations
|
Consolidated
|
||||||||||||||||
(In
thousands)
|
||||||||||||||||||||
Net
cash provided by (used in) operating
activities
|
$
|
(30,235
|
)
|
$
|
1,517
|
$
|
15,157
|
$
|
11,242
|
$
|
(2,319
|
)
|
||||||||
Cash
flows from investing activities:
|
||||||||||||||||||||
Capital
expenditures
|
(105
|
)
|
(86,149
|
)
|
(35,526
|
)
|
—
|
(121,780
|
)
|
|||||||||||
Proceeds
from asset dispositions
|
—
|
573
|
(122
|
)
|
—
|
451
|
||||||||||||||
Acquisition,
net of cash received
|
(15,031
|
)
|
—
|
2,105
|
—
|
(12,926
|
)
|
|||||||||||||
Net
cash used in investing activities
|
(15,136
|
)
|
(85,576
|
)
|
(33,543
|
)
|
—
|
(134,255
|
)
|
|||||||||||
Cash
flows from financing activities:
|
||||||||||||||||||||
Proceeds
from borrowings
|
300,000
|
—
|
—
|
—
|
300,000
|
|||||||||||||||
Debt
issuance costs
|
(4,249
|
)
|
—
|
—
|
—
|
(4,249
|
)
|
|||||||||||||
Repayment
of debt and debt redemption
premiums
|
—
|
—
|
(3,166
|
)
|
—
|
(3,166
|
)
|
|||||||||||||
Increases
(decreases) in cash related to
intercompany
advances and debt
|
(86,973
|
)
|
86,973
|
11,242
|
(11,242
|
)
|
—
|
|||||||||||||
Partial
prepayment of put/call obligation
|
(37
|
)
|
—
|
—
|
—
|
(37
|
)
|
|||||||||||||
Preferred
Stock dividends paid
|
(3,163
|
)
|
—
|
—
|
—
|
(3,163
|
)
|
|||||||||||||
Issuance
of common stock
|
1,095
|
—
|
—
|
—
|
1,095
|
|||||||||||||||
Tax
benefit related to exercise of stock
options
|
410
|
—
|
—
|
—
|
410
|
|||||||||||||||
Net
cash provided by (used in) financing
activities
|
207,083
|
86,973
|
8,076
|
(11,242
|
)
|
290,890
|
||||||||||||||
Effect
of exchange rate changes on cash and
cash
equivalents
|
333
|
—
|
705
|
—
|
1,038
|
|||||||||||||||
Net
increase (decrease) in cash and
cash
equivalents
|
162,045
|
2,914
|
(9,605
|
)
|
—
|
155,354
|
||||||||||||||
Cash
and cash equivalents at beginning
of
period
|
133,010
|
3,434
|
47,744
|
—
|
184,188
|
|||||||||||||||
Cash
and cash equivalents at end of
period
|
$
|
295,055
|
$
|
6,348
|
$
|
38,139
|
$
|
—
|
$
|
339,542
|
·
|
the
risks and uncertainties described under “Item 1A. Risk Factors” in the
fiscal year 2007 Annual Report;
|
·
|
the
level of activity in the oil and natural gas industry is lower
than
anticipated;
|
·
|
production-related
activities become more sensitive to variances in commodity
prices;
|
·
|
the
major oil companies do not continue to expand
internationally;
|
·
|
market
conditions are weaker than
anticipated;
|
·
|
we
are not able to re-deploy our aircraft to regions with the greater
demand;
|
·
|
we
do not achieve the anticipated benefit of our fleet renewal
program;
|
·
|
the
outcome of the United States Securities and Exchange Commission
(“SEC”)
investigation relating to the Foreign Corrupt Practices Act and
other
matters, or the Internal Review, has a greater than anticipated
financial
or business impact; and
|
·
|
the
outcome of the United States Department of Justice (“DOJ”) antitrust
investigation, which is ongoing, has a greater than anticipated
financial
or business impact.
|
·
|
Western
Hemisphere
|
−
|
North
America
|
−
|
South
and Central America
|
·
|
Eastern
Hemisphere
|
−
|
Europe
|
−
|
West
Africa
|
−
|
Southeast
Asia
|
−
|
Other
International
|
−
|
Eastern
Hemisphere (“EH”) Centralized
Operations
|
·
|
Global
Training
|
−
|
Bristow Academy
|
Percentage
of
|
Aircraft
in Consolidated Fleet
|
|||||||||||||||||
Current
|
Helicopters
|
|||||||||||||||||
Helicopter
Services
|
Quarter
Revenue
|
Small
|
Medium
|
Large
|
Fixed
Wing
|
Total
|
Unconsolidated
Affiliates
|
Total
|
||||||||||
North
America
|
23
|
%
|
136
|
29
|
4
|
1
|
170
|
—
|
170
|
|||||||||
South
and Central America
|
7
|
%
|
2
|
33
|
1
|
—
|
36
|
14
|
50
|
|||||||||
Europe
|
34
|
%
|
1
|
10
|
39
|
—
|
50
|
30
|
80
|
|||||||||
West
Africa
|
13
|
%
|
12
|
28
|
2
|
7
|
49
|
—
|
49
|
|||||||||
Southeast
Asia
|
9
|
%
|
3
|
9
|
9
|
—
|
21
|
—
|
21
|
|||||||||
Other
International
|
5
|
%
|
—
|
12
|
10
|
3
|
25
|
41
|
66
|
|||||||||
EH
Centralized Operations
|
1
|
%
|
—
|
—
|
—
|
—
|
—
|
57
|
57
|
|||||||||
Bristow Academy
|
1
|
%
|
51
|
—
|
—
|
1
|
52
|
—
|
52
|
|||||||||
Production
Management
|
7
|
%
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
|||||||||
Total
(1)
|
100
|
%
|
205
|
121
|
65
|
12
|
403
|
142
|
545
|
|||||||||
Aircraft
not currently in fleet:
|
||||||||||||||||||
On
order (2)
|
9
|
11
|
12
|
—
|
32
|
|||||||||||||
Under
option
|
—
|
30
|
22
|
—
|
52
|
(1)
|
Includes
12 aircraft held for sale.
|
(2)
|
Small
aircraft on order include orders for six training
aircraft.
|
Three
Months Ended
June
30,
|
||||||
2006
|
2007
|
|||||
(Unaudited)
|
||||||
(In
thousands)
|
||||||
Gross
revenue:
|
||||||
Operating
revenue
|
$
|
193,865
|
$
|
223,551
|
||
Reimbursable
revenue
|
27,197
|
21,451
|
||||
Total
gross revenue
|
221,062
|
245,002
|
||||
Operating
expense:
|
||||||
Direct
cost
|
138,470
|
163,836
|
||||
Reimbursable
expense
|
26,898
|
21,241
|
||||
Depreciation
and amortization
|
10,283
|
11,373
|
||||
General
and administrative
|
15,349
|
19,262
|
||||
Gain on
disposal of assets
|
(998
|
)
|
(584
|
)
|
||
Total
operating expense
|
190,002
|
215,128
|
||||
Operating
income
|
31,060
|
29,874
|
||||
Earnings
from unconsolidated affiliates, net of losses
|
1,559
|
3,390
|
||||
Interest
expense, net
|
(1,946
|
)
|
(735
|
)
|
||
Other
income (expense), net
|
(4,785
|
)
|
426
|
|||
Income
before provision for income taxes and minority interest
|
25,888
|
32,955
|
||||
Provision
for income taxes
|
(8,543
|
)
|
(9,834
|
)
|
||
Minority
interest
|
(116
|
)
|
(449
|
)
|
||
Net
income
|
$
|
17,229
|
$
|
22,672
|
Three
Months Ended June 30,
|
||||||||||||||||||
2006
|
2007
|
|||||||||||||||||
Pre-tax
Earnings
|
Net
Income
|
Diluted
Earnings
Per
Share
|
Pre-tax
Earnings
|
Net
Income
|
Diluted
Earnings
Per
Share
|
|||||||||||||
(In
thousands, except per share amounts)
|
||||||||||||||||||
Investigations:
|
||||||||||||||||||
SEC
(1)
|
$
|
(108
|
)
|
$
|
(70
|
)
|
$
|
—
|
$
|
—
|
$
|
—
|
$
|
—
|
||||
DOJ
(1)
|
(591
|
)
|
(384
|
)
|
(0.02
|
)
|
—
|
—
|
—
|
|||||||||
Tax
contingency related items
(2)
|
—
|
800
|
0.03
|
—
|
918
|
0.03
|
||||||||||||
7
½% Senior Notes due 2017 (3)
|
—
|
—
|
—
|
(357
|
)
|
(232
|
)
|
(0.01
|
)
|
|||||||||
Foreign
currency transaction gains (losses) (4)
|
(4,809
|
)
|
(3,126
|
)
|
(0.13
|
)
|
401
|
261
|
0.01
|
|||||||||
Preferred
Stock
(5)
|
—
|
—
|
—
|
826
|
537
|
(0.19
|
)
|
|||||||||||
Total
|
$
|
(5,508
|
)
|
$
|
(2,780
|
)
|
$
|
(0.12
|
)
|
$
|
870
|
$
|
1,484
|
$
|
(0.16
|
)
|
(1)
|
Included
in general & administrative costs in our condensed consolidated
statements of income.
|
(2)
|
Represents
a direct reduction in our provision for income taxes in our condensed
consolidated statements of income.
|
(3)
|
Represents
the impact on interest expense, net of interest income earned on
additional cash, resulting from the issuance of the 7 ½% Senior Notes in
June 2007 (see discussion in Note 5 in the “Notes to Condensed
Consolidated Financial Statements” included elsewhere in this Quarterly
Report).
|
(4)
|
Included
in other income (expense), net in our condensed consolidated statements
of
income.
|
(5)
|
Represents
the impact on diluted earnings per share of the inclusion of weighted
average shares resulting from the assumed conversion of Preferred
Stock,
partially offset by interest income earned on cash balances generated
through the Preferred Stock offering in September and October
2006. See Note 8 in the “Notes to Consolidated Financial
Statements” in the fiscal year 2007 Annual Report for a further discussion
of the Preferred Stock offering.
|
Three
Months Ended
June
30,
|
||||||
2006
|
2007
|
|||||
Flight
hours (excludes Bristow Academy and unconsolidated
affiliates):
|
||||||
Helicopter
Services:
|
||||||
North
America (1)
|
42,609
|
40,271
|
||||
South
and Central America
|
9,285
|
11,367
|
||||
Europe
|
10,170
|
10,821
|
||||
West
Africa
|
8,883
|
8,898
|
||||
Southeast
Asia
|
3,206
|
3,344
|
||||
Other
International
|
2,052
|
2,547
|
||||
Consolidated
total
|
76,205
|
77,248
|
Three
Months Ended
June
30,
|
||||||
2006
|
2007
|
|||||
(In
thousands)
|
||||||
Gross
revenue:
|
||||||
Helicopter
Services:
|
||||||
North
America
|
$
|
63,368
|
$
|
60,939
|
||
South
and Central America
|
13,012
|
16,036
|
||||
Europe
|
71,981
|
83,357
|
||||
West
Africa
|
31,736
|
33,283
|
||||
Southeast
Asia
|
17,040
|
22,492
|
||||
Other
International
|
8,955
|
11,455
|
||||
EH
Centralized Operations
|
3,074
|
6,805
|
||||
Bristow Academy
|
—
|
3,019
|
||||
Intrasegment
eliminations
|
(2,860
|
)
|
(6,235
|
)
|
||
Total
Helicopter Services (2)
|
206,306
|
231,151
|
||||
Production
Management Services (3)
|
17,684
|
16,543
|
||||
Corporate
|
(25
|
)
|
—
|
|||
Intersegment
eliminations
|
(2,903
|
)
|
(2,692
|
)
|
||
Consolidated
total
|
$
|
221,062
|
$
|
245,002
|
Three
Months Ended
June
30,
|
||||||
2006
|
2007
|
|||||
(In
thousands)
|
||||||
Operating
expense: (4)
|
||||||
Helicopter
Services:
|
||||||
North
America
|
$
|
54,135
|
$
|
50,225
|
||
South
and Central America
|
9,042
|
12,351
|
||||
Europe
|
57,885
|
68,782
|
||||
West
Africa
|
27,403
|
30,486
|
||||
Southeast
Asia
|
14,605
|
18,365
|
||||
Other
International
|
7,439
|
9,190
|
||||
EH
Centralized Operations
|
4,841
|
11,084
|
||||
Bristow Academy
|
—
|
3,110
|
||||
Intrasegment
eliminations
|
(2,860
|
)
|
(6,235
|
)
|
||
Total
Helicopter Services
|
172,490
|
197,358
|
||||
Production
Management Services
|
16,271
|
15,454
|
||||
Gain
on disposal of assets
|
(998
|
)
|
(584
|
)
|
||
Corporate
|
5,142
|
5,592
|
||||
Intersegment
eliminations
|
(2,903
|
)
|
(2,692
|
)
|
||
Consolidated
total
|
$
|
190,002
|
$
|
215,128
|
Operating
income:
|
||||||
Helicopter
Services:
|
||||||
North
America
|
$
|
9,233
|
$
|
10,714
|
||
South
and Central America
|
3,970
|
3,685
|
||||
Europe
|
14,096
|
14,575
|
||||
West
Africa
|
4,333
|
2,797
|
||||
Southeast
Asia
|
2,435
|
4,127
|
||||
Other
International
|
1,516
|
2,265
|
||||
EH
Centralized Operations
|
(1,767
|
)
|
(4,279
|
)
|
||
Bristow Academy
|
—
|
(91
|
)
|
|||
Total
Helicopter Services
|
33,816
|
33,793
|
||||
Production
Management Services
|
1,413
|
1,089
|
||||
Gain
on disposal of assets
|
998
|
584
|
||||
Corporate
|
(5,167
|
)
|
(5,592
|
)
|
||
Consolidated
operating income
|
31,060
|
29,874
|
||||
Earnings
from unconsolidated affiliates
|
1,559
|
3,390
|
||||
Interest
income
|
1,290
|
2,198
|
||||
Interest
expense
|
(3,236
|
)
|
(2,933
|
)
|
||
Other
income (expense), net
|
(4,785
|
)
|
426
|
|||
Income
before provision for income taxes and minority interest
|
25,888
|
32,955
|
||||
Provision
for income taxes
|
(8,543
|
)
|
(9,834
|
)
|
||
Minority
interest
|
(116
|
)
|
(449
|
)
|
||
Net
income
|
$
|
17,229
|
$
|
22,672
|
Three
Months Ended
June
30,
|
|||||||
2006
|
2007
|
||||||
Operating
margin:(5)
|
|||||||
Helicopter
Services:
|
|||||||
North
America
|
14.6
|
%
|
17.6
|
%
|
|||
South
and Central America
|
30.5
|
%
|
23.0
|
%
|
|||
Europe
|
19.6
|
%
|
17.5
|
%
|
|||
West
Africa
|
13.7
|
%
|
8.4
|
%
|
|||
Southeast
Asia
|
14.3
|
%
|
18.3
|
%
|
|||
Other
International
|
16.9
|
%
|
19.8
|
%
|
|||
EH
Centralized Operations
|
(57.5
|
)
|
%
|
(62.9
|
)
|
%
|
|
Bristow Academy
|
N/A
|
(3.0
|
)
|
%
|
|||
Total
Helicopter Services
|
16.4
|
%
|
14.6
|
%
|
|||
Production
Management Services
|
8.0
|
%
|
6.6
|
%
|
|||
Consolidated
total
|
14.1
|
%
|
12.2
|
%
|
|||
(1)
|
Our
presentation of flight hours for North America has been changed
from our
Quarterly Report for the Comparable Quarter to reflect total flight
hours,
which is consistent with the presentation of flight hours for our
other
business units. North America flight hours in the prior report
reflected only billed hours.
|
(2)
|
Includes
reimbursable revenue of $23.3 million and $20.2 million for the
three
months ended June 30, 2006 and 2007, respectively.
|
(3)
|
Includes
reimbursable revenue of $3.9 million and $1.3 million for the three
months
ended June 30, 2006 and 2007, respectively, net of intercompany
eliminations.
|
(4)
|
Operating
expenses include depreciation and amortization in the following
amounts
for the periods presented:
|
Three
Months Ended
June
30,
|
||||||||
2006
|
2007
|
|||||||
(In
thousands)
|
||||||||
Helicopter
Services:
|
||||||||
North
America
|
$
|
2,765
|
$
|
3,056
|
||||
South
and Central America
|
962
|
949
|
||||||
Europe
|
2,653
|
3,416
|
||||||
West
Africa
|
1,576
|
1,600
|
||||||
Southeast
Asia
|
1,017
|
805
|
||||||
Other
International
|
826
|
729
|
||||||
EH
Centralized Operations
|
411
|
329
|
||||||
Bristow Academy
|
—
|
376
|
||||||
Total
Helicopter Services
|
10,210
|
11,260
|
||||||
Production
Management Services
|
47
|
42
|
||||||
Corporate
|
26
|
71
|
||||||
Consolidated
total
|
$
|
10,283
|
$
|
11,373
|
(5)
|
Operating
margin is calculated as gross revenues less operating expenses
divided by
gross revenues.
|
Three
Months Ended
June
30,
|
||||||
2006
|
2007
|
|||||
Number
of aircraft delivered:
|
||||||
Medium
|
2
|
5
|
||||
Large
|
—
|
2
|
||||
Fixed
wing
|
—
|
1
|
||||
Total
aircraft
|
2
|
8
|
||||
Capital
expenditures (in thousands):
|
||||||
Aircraft
and related equipment
|
$
|
44,085
|
$
|
118,191
|
||
Other
|
2,797
|
3,589
|
||||
Total
capital expenditures
|
$
|
46,882
|
$
|
121,780
|
Payments
Due by Period
|
|||||||||||||||||||
Nine
Months
|
|||||||||||||||||||
Ending
|
Fiscal
Year Ending March 31,
|
||||||||||||||||||
Total
|
March
31,
2008
|
2009
- 2010
|
2011
- 2012
|
2013
and
beyond
|
|||||||||||||||
(In
thousands)
|
|||||||||||||||||||
Contractual
obligations:
|
|||||||||||||||||||
Long-term
debt and short-term borrowings:
|
|||||||||||||||||||
Principal
|
$
|
561,305
|
$
|
7,101
|
$
|
7,708
|
$
|
4,637
|
$
|
541,859
|
|||||||||
Interest
|
320,067
|
28,681
|
75,550
|
74,788
|
141,048
|
||||||||||||||
Aircraft
operating leases (1)
|
60,575
|
4,725
|
12,830
|
14,471
|
28,549
|
||||||||||||||
Other
operating leases (2)
|
18,469
|
2,628
|
5,272
|
4,515
|
6,054
|
||||||||||||||
Pension
obligations
(3)
|
180,592
|
14,685
|
29,370
|
29,370
|
107,167
|
||||||||||||||
Aircraft
purchase obligations
|
254,986
|
165,030
|
89,956
|
—
|
—
|
||||||||||||||
Other
purchase obligations
(4)
|
41,519
|
35,241
|
6,278
|
—
|
—
|
||||||||||||||
Total
contractual cash obligations
|
$
|
1,437,513
|
$
|
258,091
|
$
|
226,964
|
$
|
127,781
|
$
|
824,677
|
|||||||||
Other
commercial commitments:
|
|||||||||||||||||||
Debt
guarantees
(5)
|
$
|
31,776
|
$
|
—
|
$
|
11,716
|
$
|
20,060
|
$
|
—
|
|||||||||
Other
guarantees
(5)
|
5,508
|
3,769
|
1,739
|
—
|
—
|
||||||||||||||
Letters
of credit (6)
|
4,437
|
4,437
|
—
|
—
|
—
|
||||||||||||||
Total
other commercial commitments
|
$
|
41,721
|
$
|
8,206
|
$
|
13,455
|
$
|
20,060
|
$
|
—
|
(1)
|
Represents
nine aircraft that we sold on December 30, 2005 for $68.6 million
in
aggregate to a subsidiary of General Electric Capital Corporation
and then
leased back under separate operating leases with terms of ten years
expiring in January 2016. A deferred gain on the sale of the
aircraft was recorded in the amount of approximately $10.8 million
in
aggregate, which is being amortized over the lease
term.
|
(2)
|
Represents
minimum rental payments required under operating leases that have
initial
or remaining non-cancelable lease terms in excess of one
year.
|
(3)
|
Represents
expected funding for pension benefits in future periods. These
amounts are undiscounted and are based on the expectation that
the pension
will be fully funded in approximately 12 years. As of June 30,
2007, we had recorded on our balance sheet a $113.0 million pension
liability associated with this obligation. Also, the timing of
the funding is dependent on actuarial valuations and resulting
negotiations with the plan trustees.
|
(4)
|
Other
purchase obligations primarily represent unfilled purchase orders
for
aircraft parts, commitments associated with upgrading facilities
at our
bases and amounts committed under a supply agreement (See Note
6 in the
“Notes to Condensed Consolidated Financial Statements” included elsewhere
in this Quarterly Report).
|
(5)
|
See
Note 6 in the “Notes to Condensed Consolidated Financial Statements”
included elsewhere in this Quarterly Report for further
details. Additionally, the bank has an option to put to us the
remaining amount of the RLR debt of $12.2 million, which we have
guaranteed in the event of default of our partner in RLR. This
amount is not included in the table above.
|
(6)
|
In
January 2006, a letter of credit was issued for $2.5 million in
conjunction with the additional collateral for the sale and leaseback
financing discussed in Note 6 in the “Notes to Consolidated Financial
Statements” included in the fiscal year 2007 Annual Report. The
letter of credit expires January 27,
2008.
|
Period
(1)
|
Total
Number of Shares
Purchased
(2)
|
Average
Price
Paid
Per Share
|
Total
Number of Shares
Purchased
as
Part
of Publicly Announced
Program
|
Approximate
Dollar
Value of
Shares
That May
Yet
Be
Purchased
Under
the
Program
|
|||||||||
June
1, 2007 − June 30, 2007
|
9,113
|
$
|
51.50
|
—
|
$
|
—
|
Nominee
|
For
|
Withheld
|
||||
Thomas
N. Amonett
|
21,810,852
|
178,948
|
||||
Charles
F. Bolden, Jr.
|
21,046,955
|
942,845
|
||||
Peter
N. Buckley
|
21,907,524
|
82,276
|
||||
Stephen
J. Cannon
|
21,805,368
|
184,432
|
||||
Jonathan
H. Cartwright
|
21,907,974
|
81,826
|
||||
William
E. Chiles
|
21,922,647
|
67,153
|
||||
Michael
A. Flick
|
21,816,365
|
173,435
|
||||
Thomas
C. Knudson
|
21,918,847
|
70,953
|
||||
Ken
C. Tamblyn
|
21,819,618
|
170,182
|
For
|
Against
|
Abstain
|
||
19,557,773
|
2,424,959
|
7,068
|
For
|
Against
|
Abstain
|
||
21,958,930
|
21,667
|
9,203
|
For
|
Against
|
Abstain
|
Broker
No-Vote
|
|||
16,707,661
|
3,543,442
|
16,144
|
1,722,553
|
For
|
Against
|
Abstain
|
||
20,859,557
|
1,125,851
|
4,392
|
Exhibit
Number
|
Description
of Exhibit
|
Restated
Certificate of Incorporation of Bristow Group Inc. dated August 2,
2007.
|
|
Indenture,
dated June 13, 2007, among the Company, the Guarantors named therein
and
U.S. National Bank Association as Trustee relating to the
7
½% Senior Notes due 2017.
|
|
4.2*
|
Registration
Rights Agreement, dated June 13, 2007, among the Company and Goldman,
Sachs & Co., Credit Suisse Securities (USA) LLC, Banc of
America
Securities LLC, J.P. Morgan Securities Inc., Suntrust Robinson Humphrey
and Wells Fargo Securities, LLC.
|
Form
of 144A Global Note representing $299,000,000 principal amount of
7 ½%
Senior Notes due 2017.
|
|
4.4*
|
Form
of Regulation S Global Note representing $1,000,000 principal amount
of 7
½% Senior Notes due 2017.
|
15.1*
|
Letter
from KPMG LLP dated August 2, 2007, regarding unaudited interim
information.
|
31.1**
|
Rule
13a-14(a) Certification by President and Chief Executive Officer
of
Registrant.
|
31.2**
|
Rule
13a-14(a) Certification by Executive Vice President and Chief Financial
Officer of Registrant.
|
32.1**
|
Certification
of Chief Executive Officer of registrant pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of
2002.
|
32.2**
|
Certification
of Chief Financial Officer of Registrant pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of
2002.
|
*
|
Filed
herewith.
|
**
|
Furnished
herewith.
|
Exhibit
Number
|
Description
of Exhibit
|
3.1*
|
Restated
Certificate of Incorporation of Bristow Group Inc. dated August 2,
2007.
|
4.1*
|
Indenture,
dated June 13, 2007, among the Company, the Guarantors named therein
and
U.S. National Bank Association as Trustee relating to the
7
½% Senior Notes due 2017.
|
4.2*
|
Registration
Rights Agreement, dated June 13, 2007, among the Company and Goldman,
Sachs & Co., Credit Suisse Securities (USA) LLC, Banc of
America
Securities LLC, J.P. Morgan Securities Inc., Suntrust Robinson Humphrey
and Wells Fargo Securities, LLC.
|
4.3*
|
Form
of 144A Global Note representing $299,000,000 principal amount of
7 ½%
Senior Notes due 2017.
|
4.4*
|
Form
of Regulation S Global Note representing $1,000,000 principal amount
of 7
½% Senior Notes due 2017.
|
15.1*
|
Letter
from KPMG LLP dated August 2, 2007, regarding unaudited interim
information.
|
31.1**
|
Rule
13a-14(a) Certification by President and Chief Executive Officer
of
Registrant.
|
31.2**
|
Rule
13a-14(a) Certification by Executive Vice President and Chief Financial
Officer of Registrant.
|
32.1**
|
Certification
of Chief Executive Officer of registrant pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of
2002.
|
32.2**
|
Certification
of Chief Financial Officer of Registrant pursuant to 18 U.S.C. Section
1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of
2002.
|
*
|
Filed
herewith.
|
**
|
Furnished
herewith.
|