R
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
For
the quarterly period ended September 30, 2008
|
|
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)
|
Large
accelerated filer R
|
Accelerated
filer £
|
Non-accelerated
filer £
|
Smaller
reporting company £
|
(Do
not check if a smaller
reporting
company)
|
Page
|
|||
PART
I
|
|||
Item
1.
|
2
|
||
Item
2.
|
33
|
||
Item
3.
|
58
|
||
Item
4.
|
58
|
||
PART
II
|
|||
Item
1.
|
58
|
||
Item
1A.
|
59
|
||
Item
6.
|
59
|
||
60
|
Three
Months Ended
September
30,
|
Six
Months Ended
September
30,
|
|||||||||||||||
2007
|
2008
|
2007
|
2008
|
|||||||||||||
(Unaudited)
(In
thousands, except per share amounts)
|
||||||||||||||||
Gross
revenue:
|
||||||||||||||||
Operating
revenue from non-affiliates
|
$
|
219,858
|
$
|
248,526
|
$
|
419,767
|
$
|
489,660
|
||||||||
Operating
revenue from affiliates
|
13,858
|
18,430
|
24,955
|
35,700
|
||||||||||||
Reimbursable
revenue from non-affiliates
|
23,594
|
23,208
|
42,636
|
47,579
|
||||||||||||
Reimbursable
revenue from affiliates
|
2,498
|
1,524
|
3,601
|
2,872
|
||||||||||||
259,808
|
291,688
|
490,959
|
575,811
|
|||||||||||||
Operating
expense:
|
||||||||||||||||
Direct
cost
|
152,624
|
188,393
|
305,712
|
375,366
|
||||||||||||
Reimbursable
expense
|
24,098
|
24,681
|
44,243
|
50,748
|
||||||||||||
Depreciation
and amortization
|
12,351
|
15,485
|
23,682
|
30,440
|
||||||||||||
General
and administrative
|
20,260
|
25,984
|
38,645
|
53,190
|
||||||||||||
Loss
(gain) on disposal of assets
|
757
|
(3,302
|
)
|
173
|
(5,967
|
)
|
||||||||||
210,090
|
251,241
|
412,455
|
503,777
|
|||||||||||||
Operating
income
|
49,718
|
40,447
|
78,504
|
72,034
|
||||||||||||
Earnings
from unconsolidated affiliates, net of losses
|
4,118
|
1,971
|
7,508
|
9,694
|
||||||||||||
Interest
income
|
3,960
|
3,205
|
6,084
|
4,652
|
||||||||||||
Interest
expense
|
(6,523
|
)
|
(8,404
|
)
|
(9,451
|
)
|
(16,897
|
)
|
||||||||
Other
income (expense), net
|
360
|
2,070
|
786
|
3,762
|
||||||||||||
Income
from continuing operations before provision for
income taxes and
minority
interest
|
51,633
|
39,289
|
83,431
|
73,245
|
||||||||||||
Provision
for income taxes
|
(18,294
|
)
|
(10,310
|
)
|
(27,733
|
)
|
(20,914
|
)
|
||||||||
Minority
interest
|
(4
|
)
|
(952
|
)
|
(453
|
)
|
(1,655
|
)
|
||||||||
Income
from continuing operations
|
33,335
|
28,027
|
55,245
|
50,676
|
||||||||||||
Discontinued
operations:
|
||||||||||||||||
Income
(loss) from discontinued operations before provision for
income taxes
|
962
|
(379
|
)
|
2,119
|
(379
|
)
|
||||||||||
(Provision)
benefit for income taxes on discontinued operations
|
(347
|
)
|
133
|
(742
|
)
|
133
|
||||||||||
Income
(loss) from discontinued operations
|
615
|
(246
|
)
|
1,377
|
(246
|
)
|
||||||||||
Net
income
|
33,950
|
27,781
|
56,622
|
50,430
|
||||||||||||
Preferred
stock dividends
|
(3,163
|
)
|
(3,163
|
)
|
(6,325
|
)
|
(6,325
|
)
|
||||||||
Net
income available to common stockholders
|
$
|
30,787
|
$
|
24,618
|
$
|
50,297
|
$
|
44,105
|
||||||||
Basic
earnings per common share:
|
||||||||||||||||
Earnings
from continuing operations
|
$
|
1.27
|
$
|
0.85
|
$
|
2.07
|
$
|
1.65
|
||||||||
Earnings
(loss) from discontinued operations
|
0.03
|
(0.01
|
)
|
0.06
|
(0.01
|
)
|
||||||||||
Net
earnings
|
$
|
1.30
|
$
|
0.84
|
$
|
2.13
|
$
|
1.64
|
||||||||
Diluted
earnings per common share:
|
||||||||||||||||
Earnings
from continuing operations
|
$
|
1.10
|
$
|
0.79
|
$
|
1.83
|
$
|
1.51
|
||||||||
Earnings
(loss) from discontinued operations
|
0.02
|
(0.01
|
)
|
0.04
|
(0.01
|
)
|
||||||||||
Net
earnings
|
$
|
1.12
|
$
|
0.78
|
$
|
1.87
|
$
|
1.50
|
March
31,
|
September
30,
|
||||||||||
2008
|
2008
|
||||||||||
(Unaudited)
|
|||||||||||
(In
thousands)
|
|||||||||||
ASSETS
|
|||||||||||
Current
assets:
|
|||||||||||
Cash
and cash equivalents
|
$
|
290,050
|
$
|
399,055
|
|||||||
Accounts
receivable from non-affiliates, net of allowance for doubtful accounts of
$1.8 million
and $1.2 million, respectively
|
204,599
|
192,933
|
|||||||||
Accounts
receivable from affiliates, net of allowance for doubtful accounts of $4.0
million
and $2.4 million, respectively
|
11,316
|
25,462
|
|||||||||
Inventories
|
176,239
|
166,958
|
|||||||||
Prepaid
expenses and other
|
24,177
|
20,654
|
|||||||||
Assets
held for sale - U.S. Gulf of Mexico (Note 2)
|
—
|
21,369
|
|||||||||
Total
current assets
|
706,381
|
826,431
|
|||||||||
Investment
in unconsolidated affiliates
|
52,467
|
33,951
|
|||||||||
Property
and equipment – at cost:
|
|||||||||||
Land
and buildings
|
60,056
|
57,341
|
|||||||||
Aircraft
and equipment
|
1,428,996
|
1,649,743
|
|||||||||
1,489,052
|
1,707,084
|
||||||||||
Less
– Accumulated depreciation and amortization
|
(316,514
|
)
|
(302,538
|
)
|
|||||||
1,172,538
|
1,404,546
|
||||||||||
Goodwill
|
15,676
|
16,571
|
|||||||||
Other
assets
|
30,293
|
25,605
|
|||||||||
$
|
1,977,355
|
$
|
2,307,104
|
||||||||
LIABILITIES
AND STOCKHOLDERS’ INVESTMENT
|
|||||||||||
Current
liabilities:
|
|||||||||||
Accounts
payable
|
$
|
49,650
|
$
|
45,090
|
|||||||
Accrued
wages, benefits and related taxes
|
35,523
|
32,290
|
|||||||||
Income
taxes payable
|
5,862
|
229
|
|||||||||
Other
accrued taxes
|
1,589
|
3,848
|
|||||||||
Deferred
revenues
|
15,415
|
14,096
|
|||||||||
Accrued
maintenance and repairs
|
13,250
|
13,579
|
|||||||||
Accrued
interest
|
5,656
|
6,414
|
|||||||||
Other
accrued liabilities
|
22,235
|
24,110
|
|||||||||
Deferred
taxes
|
9,238
|
11,553
|
|||||||||
Short-term
borrowings and current maturities of long-term debt
|
6,541
|
5,378
|
|||||||||
Total
current liabilities
|
164,959
|
156,587
|
|||||||||
Long-term
debt, less current maturities
|
599,677
|
725,534
|
|||||||||
Accrued
pension liabilities
|
134,156
|
117,566
|
|||||||||
Other
liabilities and deferred credits
|
14,805
|
15,760
|
|||||||||
Deferred
taxes
|
91,747
|
98,802
|
|||||||||
Minority
interest
|
4,570
|
11,064
|
|||||||||
Commitments
and contingencies (Note 7)
|
|||||||||||
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 90,000,000 shares; outstanding:
23,923,685 as of
March
31 and
29,094,916 as of September 30 (exclusive of 1,281,050 treasury
shares)
|
239
|
291
|
|||||||||
Additional
paid-in capital
|
186,390
|
416,025
|
|||||||||
Retained
earnings
|
606,931
|
652,291
|
|||||||||
Accumulated
other comprehensive loss
|
(48,673
|
)
|
(109,370
|
)
|
|||||||
967,441
|
1,181,791
|
||||||||||
$
|
1,977,355
|
$
|
2,307,104
|
Six
Months Ended
September 30,
|
||||||||
2007
|
2008
|
|||||||
(Unaudited)
|
||||||||
(In
thousands)
|
||||||||
Cash
flows from operating activities:
|
||||||||
Net
income
|
$
|
56,622
|
$
|
50,430
|
||||
Adjustments
to reconcile net income to net cash (used in) provided by operating
activities:
|
||||||||
Depreciation
and amortization
|
23,768
|
30,440
|
||||||
Deferred
income taxes
|
12,431
|
7,414
|
||||||
Loss
on disposal of discontinued operations
|
—
|
379
|
||||||
Loss
(gain) on asset dispositions
|
170
|
(5,967
|
)
|
|||||
Gain
on Heliservicio investment sale
|
—
|
(1,438
|
)
|
|||||
Stock-based
compensation expense
|
3,689
|
4,881
|
||||||
Equity
in earnings from unconsolidated affiliates below (in excess of) dividends
received
|
(4,229
|
)
|
4,499
|
|||||
Minority
interest in earnings
|
453
|
1,655
|
||||||
Tax
benefit related to stock-based compensation
|
(494
|
)
|
(231
|
)
|
||||
Increase
(decrease) in cash resulting from changes in:
|
||||||||
Accounts
receivable
|
(29,400
|
)
|
(11,425
|
)
|
||||
Inventories
|
(13,460
|
)
|
(10,643
|
)
|
||||
Prepaid
expenses and other
|
(5,676
|
)
|
(2,666
|
)
|
||||
Accounts
payable
|
4,635
|
(5,234
|
)
|
|||||
Accrued
liabilities
|
2,230
|
(2,420
|
)
|
|||||
Other
liabilities and deferred credits
|
(7,241
|
)
|
(4,205
|
)
|
||||
Net
cash provided by operating activities
|
43,498
|
55,469
|
||||||
Cash
flows from investing activities:
|
||||||||
Capital
expenditures
|
(221,095
|
)
|
(278,543
|
)
|
||||
Proceeds
from asset dispositions
|
3,144
|
17,322
|
||||||
Acquisitions,
net of cash received
|
(12,926
|
)
|
356
|
|||||
Note
issued to unconsolidated affiliate
|
(4,141
|
)
|
—
|
|||||
Investment
in unconsolidated affiliate
|
(1,960
|
)
|
—
|
|||||
Net
cash used in investing activities
|
(236,978
|
)
|
(260,865
|
)
|
||||
Cash
flows from financing activities:
|
||||||||
Proceeds
from borrowings
|
300,000
|
115,000
|
||||||
Debt
issuance costs
|
(4,889
|
)
|
(3,768
|
)
|
||||
Repayment
of debt and debt redemption premiums
|
(7,205
|
)
|
(3,967
|
)
|
||||
Partial
prepayment of put/call obligation
|
(78
|
)
|
(82
|
)
|
||||
Preferred
Stock dividends paid
|
(6,325
|
)
|
(6,325
|
)
|
||||
Issuance
of common stock
|
1,265
|
225,099
|
||||||
Tax
benefit related to stock-based compensation
|
494
|
231
|
||||||
Net
cash provided by financing activities
|
283,262
|
326,188
|
||||||
Effect
of exchange rate changes on cash and cash equivalents
|
2,469
|
(11,787
|
)
|
|||||
Net
increase in cash and cash equivalents
|
92,251
|
109,005
|
||||||
Cash
and cash equivalents at beginning of period
|
184,188
|
290,050
|
||||||
Cash
and cash equivalents at end of period
|
$
|
276,439
|
$
|
399,055
|
||||
Supplemental
disclosure of cash flow information:
|
||||||||
Cash
paid during the period for:
|
||||||||
Interest
|
$
|
13,639
|
$
|
21,094
|
||||
Income
taxes
|
$
|
11,539
|
$
|
19,628
|
||||
Non-cash
investing activities:
|
||||||||
Contribution
of note receivable and aircraft to RLR
|
$
|
—
|
$
|
(6,551
|
)
|
|||
Aircraft
received for investment in Heliservicio
|
$
|
—
|
$
|
2,410
|
Three
Months Ended
September
30,
|
Six
Months Ended
September
30,
|
||||||||||||||
2007
|
2008
|
2007
|
2008
|
||||||||||||
British
pound sterling into U.S. dollars
|
|||||||||||||||
High
|
2.06
|
2.01
|
2.06
|
2.01
|
|||||||||||
Average
|
2.02
|
1.89
|
2.00
|
1.93
|
|||||||||||
Low
|
1.98
|
1.75
|
1.97
|
1.75
|
|||||||||||
Euro
into U.S. dollars
|
|||||||||||||||
High
|
1.43
|
1.59
|
1.43
|
1.60
|
|||||||||||
Average
|
1.37
|
1.51
|
1.36
|
1.53
|
|||||||||||
Low
|
1.34
|
1.39
|
1.33
|
1.39
|
Current
assets
|
$
|
7,404
|
||
Property
and equipment
|
35,811
|
|||
Other
assets
|
584
|
|||
Total
assets acquired
|
43,799
|
|||
Current
liabilities, including debt
|
(8,062
|
)
|
||
Long-term
debt, less current maturities
|
(17,231
|
)
|
||
Total
liabilities assumed
|
(25,293
|
)
|
||
Net
assets acquired
|
$
|
18,506
|
Recognition
of previously reserved billings: (1)
|
||||
Revenue
from affiliates and operating income
|
$
|
782
|
||
Earnings
from unconsolidated affiliates, net of losses (2)
|
3,647
|
|||
Gain
on Heliservicio investment sale
|
1,438
|
|||
Income
from continuing operations before provision for income taxes and minority
interest
|
5,867
|
|||
Tax
effect
|
(2,167
|
)
|
||
Income
from continuing operations
|
$
|
3,700
|
||
Diluted
earnings per share
|
$
|
0.11
|
(1)
|
Beginning
in fiscal year 2006, RLR and we made a determination that because of
uncertainties as to collectibility, lease revenue from Heliservicio and
Hemisco Helicopters International, Inc. (“Hemisco”) (collectively, “HC”)
would be recognized as collected. As a result of the collection
of past due receivables and the improved financial condition of HC, we
began recognizing revenues from HC on an accrual basis on April 1,
2008.
|
(2)
|
Represents
the impact of earnings from unconsolidated affiliates for previously
unrecognized lease revenue from HC prior to April 1, 2008.
|
March
31, 2008
|
September
30,
2008
|
|||||
7
½% Senior Notes due 2017, including $0.6 million of unamortized
premium
|
$
|
350,601
|
$
|
350,569
|
||
6
⅛% Senior Notes due 2013
|
230,000
|
230,000
|
||||
3.00%
Convertible Senior Notes due 2038
|
—
|
115,000
|
||||
RLR
Note
|
—
|
17,760
|
||||
Term
loans
|
16,683
|
15,532
|
||||
Hemisco
Note
|
4,380
|
—
|
||||
Advance
from customer
|
1,400
|
1,400
|
||||
Sakhalin
debt
|
3,154
|
651
|
||||
Total
debt
|
606,218
|
730,912
|
||||
Less
short-term borrowings and current maturities of long-term
debt
|
(6,541
|
)
|
(5,378
|
)
|
||
Total
long-term debt
|
$
|
599,677
|
$
|
725,534
|
·
|
Level
1 - inputs to the valuation methodology are quoted prices (unadjusted) for
identical assets or liabilities in active
markets.
|
·
|
Level
2 - inputs to the valuation methodology include quoted prices for similar
assets and liabilities in active markets, and inputs are observable for
the asset or liability, either directly or indirectly, for substantially
the full term of the financial
instrument.
|
·
|
Level
3 - inputs to the valuation methodology are unobservable and significant
to the fair value measurement.
|
Quoted
Prices in Active Markets for Identical Assets
(Level
1)
|
Significant
Other Observable Inputs
(Level
2)
|
Significant
Unobservable Inputs
(Level
3)
|
Balance
as of
September
30, 2008
|
|||||||||||||
Derivative
financial instrument liabilities
|
$
|
—
|
$
|
6,910
|
$
|
—
|
$
|
6,910
|
Six
Months
Ending
March
31,
|
Fiscal
Year Ending March 31,
|
|||||||||||||||||||||
2009
|
2010
|
2011
|
2012
|
2013
|
Total
|
|||||||||||||||||
Commitments
as of September 30, 2008:
|
||||||||||||||||||||||
Number
of aircraft:
|
||||||||||||||||||||||
Small
|
1
|
1
|
—
|
—
|
—
|
2
|
||||||||||||||||
Medium
|
4
|
8
|
3
|
—
|
—
|
15
|
||||||||||||||||
Large
|
8
|
11
|
—
|
—
|
—
|
19
|
||||||||||||||||
Training
|
6
|
—
|
—
|
—
|
—
|
6
|
||||||||||||||||
19
|
(1)
|
20
|
(2)
|
3
|
—
|
—
|
42
|
|||||||||||||||
Related
expenditures (in thousands) (3)
|
$
|
149,126
|
$
|
219,275
|
$
|
11,547
|
$
|
—
|
$
|
—
|
$
|
379,948
|
||||||||||
Options
as of September 30, 2008:
|
||||||||||||||||||||||
Number
of aircraft:
|
||||||||||||||||||||||
Small
|
—
|
1
|
—
|
—
|
—
|
1
|
||||||||||||||||
Medium
|
—
|
—
|
3
|
11
|
13
|
27
|
||||||||||||||||
Large
|
—
|
—
|
10
|
5
|
4
|
19
|
||||||||||||||||
—
|
1
|
13
|
16
|
17
|
47
|
|||||||||||||||||
Related
expenditures (in thousands) (3)
|
$
|
8,340
|
$
|
84,362
|
$
|
279,461
|
$
|
245,093
|
$
|
189,070
|
$
|
806,326
|
(1)
|
Signed
customer contracts are currently in place for 5 of these 13 non-training
aircraft.
|
(2)
|
Signed
customer contracts are currently in place for 4 of these 20 aircraft.
|
(3)
|
Includes
progress payments on aircraft scheduled to be delivered in future
periods.
|
Three
Months Ended
|
|||||||||||||||
June
30, 2008
|
September
30, 2008
|
||||||||||||||
Orders
|
Options
|
Orders
|
Options
|
||||||||||||
Beginning
of quarter
|
35
|
50
|
39
|
51
|
|||||||||||
Aircraft
delivered
|
(7
|
)
|
—
|
(10
|
)
|
—
|
|||||||||
Aircraft
ordered
|
11
|
(8
|
)
|
13
|
(4
|
)
|
|||||||||
New
options
|
—
|
9
|
—
|
—
|
|||||||||||
End
of quarter
|
39
|
51
|
42
|
47
|
Amount
of Commitment Expiration Per Period
|
|||||||||||||||||
Total
|
Remainder
of Fiscal Year 2009
|
Fiscal
Years
2010-2011
|
Fiscal
Years
2012-2013
|
Fiscal
Year 2014
and
Thereafter
|
|||||||||||||
(In
thousands)
|
|||||||||||||||||
$
|
56,708
|
$
|
1,378
|
$
|
5,903
|
$
|
20,038
|
$
|
29,389
|
Three
Months Ended
September
30,
|
Six
Months Ended
September
30,
|
||||||||||||||
2007
|
2008
|
2007
|
2008
|
||||||||||||
(In
thousands)
|
|||||||||||||||
Service
cost for benefits earned during the period
|
$
|
71
|
$
|
68
|
$
|
142
|
$
|
140
|
|||||||
Interest
cost on pension benefit obligation
|
6,675
|
7,407
|
13,234
|
15,122
|
|||||||||||
Expected
return on assets
|
(6,910
|
)
|
(6,692
|
)
|
(13,700
|
)
|
(13,661
|
)
|
|||||||
Amortization
of unrecognized losses
|
1,042
|
1,232
|
2,066
|
2,515
|
|||||||||||
Net
periodic pension cost
|
$
|
878
|
$
|
2,015
|
$
|
1,742
|
$
|
4,116
|
Three
Months Ended
September
30,
|
Six
Months Ended
September
30,
|
|||||||||||
2007
|
2008
|
2007
|
2008
|
|||||||||
Earnings
(in thousands):
|
||||||||||||
Continuing
operations:
|
||||||||||||
Income
available to common stockholders – basic
|
$
|
30,172
|
$
|
24,864
|
$
|
48,920
|
$
|
44,351
|
||||
Preferred
Stock dividends
|
3,163
|
3,163
|
6,325
|
6,325
|
||||||||
Interest
expense on assumed conversion of 3.00% Convertible Senior Notes, net of
tax (1)
|
—
|
—
|
—
|
—
|
||||||||
Income
available to common stockholders – diluted
|
$
|
33,335
|
$
|
28,027
|
$
|
55,245
|
$
|
50,676
|
||||
Discontinued
operations:
|
||||||||||||
Income
(loss) available to common stockholders – basic and
diluted
|
$
|
615
|
$
|
(246
|
)
|
$
|
1,377
|
$
|
(246
|
)
|
||
Net
earnings:
|
||||||||||||
Income
available to common stockholders – basic
|
$
|
30,787
|
$
|
24,618
|
$
|
50,297
|
$
|
44,105
|
||||
Preferred
Stock dividends
|
3,163
|
3,163
|
6,325
|
6,325
|
||||||||
Interest
expense on assumed conversion of 3.00% Convertible Senior Notes, net of
tax (1)
|
—
|
—
|
—
|
—
|
||||||||
Income
available to common stockholders – diluted
|
$
|
33,950
|
$
|
27,781
|
$
|
56,622
|
$
|
50,430
|
||||
Shares:
|
||||||||||||
Weighted
average number of common shares outstanding – basic
|
23,731,265
|
29,085,095
|
23,634,628
|
26,941,095
|
||||||||
Assumed
conversion of Preferred Stock outstanding during the period (2)
|
6,522,800
|
6,522,800
|
6,522,800
|
6,522,800
|
||||||||
Assumed
conversion of 3.00% Convertible Senior Notes outstanding during the period
(1)
|
—
|
—
|
—
|
—
|
||||||||
Net
effect of dilutive stock options and restricted stock units based on the
treasury stock method
|
153,577
|
28,552
|
105,313
|
22,990
|
||||||||
Weighted
average number of common shares outstanding – diluted
|
30,407,642
|
35,636,447
|
30,262,741
|
33,486,885
|
||||||||
Basic
earnings per common share:
|
||||||||||||
Earnings
from continuing operations
|
$
|
1.27
|
$
|
0.85
|
$
|
2.07
|
$
|
1.65
|
||||
Earnings
(loss) from discontinued operations
|
0.03
|
(0.01
|
)
|
0.06
|
(0.01
|
)
|
||||||
Net
earnings
|
$
|
1.30
|
$
|
0.84
|
$
|
2.13
|
$
|
1.64
|
||||
Diluted
earnings per common share:
|
||||||||||||
Earnings
from continuing operations
|
$
|
1.10
|
$
|
0.79
|
$
|
1.83
|
$
|
1.51
|
||||
Earnings
(loss) from discontinued operations
|
0.02
|
(0.01
|
)
|
0.04
|
(0.01
|
)
|
||||||
Net
earnings
|
$
|
1.12
|
$
|
0.78
|
$
|
1.87
|
$
|
1.50
|
(1)
|
Diluted
earnings per common share for the three and six months ended September 30,
2008 excludes approximately 1.5 million potentially dilutive shares
initially issuable upon the conversion of our 3.00% Convertible Senior
Notes. The 3.00% Convertible Senior Notes will be convertible,
under certain circumstances, using a net share settlement process, into a
combination of cash and our common stock. The initial base
conversion price of the notes is approximately $77.34 (subject to
adjustment in certain circumstances), based on the initial base conversion
rate of 12.9307 shares of common stock per $1,000 principal amount of
convertible notes. In general, upon conversion of a note, the
holder will receive cash equal to the principal amount of the note and
common stock to the extent of the note's conversion value in excess of
such principal amount. In addition, if at the time of
conversion the applicable price of our common stock exceeds the base
conversion price, holders will receive up to an additional 8.4049 shares
of our common stock per $1,000 principal amount of notes, as determined
pursuant to a specified formula. Such shares did not impact our
calculation of diluted earnings per share for the three and six months
ended September 30, 2008 as our stock price did not meet or exceed $77.34
per share. These notes were issued in June 2008 and, therefore,
did not impact the calculation of diluted earnings per share for the three
and six months ended September 30, 2007.
|
(2)
|
Diluted
earnings per common share included weighted average shares resulting from
the assumed conversion of our Preferred Stock at the conversion rate that
results in the most dilution: 1.4180 shares of common stock for
each share of Preferred Stock. If the average of the closing
price per share of our common stock on each of the 20 consecutive trading
days ending on the third day immediately preceding the mandatory
conversion date of September 15, 2009 is greater than $35.26 per share,
then the Preferred Stock will convert into fewer shares than assumed for
diluted earnings per common share. If such average is $43.19
per share or more, then the Preferred Stock will convert into 1,197,840
fewer shares than assumed for diluted earnings per common
share.
|
Three
Months Ended
September
30,
|
Six
Months Ended
September
30,
|
|||||||||||||||
2007
|
2008
|
2007
|
2008
|
|||||||||||||
(In
thousands)
|
||||||||||||||||
Segment
gross revenue from external customers:
|
||||||||||||||||
U.S. Gulf
of Mexico
|
$
|
55,948
|
$
|
62,491
|
$
|
111,327
|
$
|
124,000
|
||||||||
Arctic
|
5,290
|
6,840
|
9,647
|
11,083
|
||||||||||||
Latin
America
|
16,951
|
19,051
|
32,987
|
39,257
|
||||||||||||
WH
Centralized Operations
|
597
|
1,875
|
871
|
3,733
|
||||||||||||
Europe
|
92,948
|
97,965
|
175,875
|
193,251
|
||||||||||||
West
Africa
|
45,799
|
47,010
|
79,082
|
90,310
|
||||||||||||
Southeast
Asia
|
23,858
|
33,381
|
46,350
|
70,261
|
||||||||||||
Other
International
|
11,971
|
13,972
|
23,247
|
26,463
|
||||||||||||
EH
Centralized Operations
|
3,218
|
3,535
|
5,326
|
5,702
|
||||||||||||
Bristow Academy
|
3,228
|
5,572
|
6,247
|
11,723
|
||||||||||||
Corporate
|
—
|
(4
|
)
|
—
|
28
|
|||||||||||
Total
segment gross revenue
|
$
|
259,808
|
$
|
291,688
|
$
|
490,959
|
$
|
575,811
|
Intrasegment
gross revenue:
|
||||||||||||||||
U.S. Gulf
of Mexico
|
$
|
—
|
$
|
—
|
$
|
49
|
$
|
—
|
||||||||
Arctic
|
—
|
—
|
—
|
—
|
||||||||||||
Latin
America
|
—
|
—
|
—
|
—
|
||||||||||||
WH
Centralized Operations
|
224
|
1,034
|
1,104
|
1,436
|
||||||||||||
Europe
|
511
|
338
|
941
|
482
|
||||||||||||
West
Africa
|
—
|
—
|
—
|
—
|
||||||||||||
Southeast
Asia
|
—
|
—
|
—
|
—
|
||||||||||||
Other
International
|
75
|
243
|
254
|
773
|
||||||||||||
EH
Centralized Operations
|
2,113
|
4,593
|
6,810
|
11,263
|
||||||||||||
Bristow Academy
|
—
|
—
|
—
|
—
|
||||||||||||
Total
intrasegment gross revenue
|
$
|
2,923
|
$
|
6,208
|
$
|
9,158
|
$
|
13,954
|
Consolidated
gross revenue reconciliation:
|
||||||||||||||||
U.S. Gulf
of Mexico
|
$
|
55,948
|
$
|
62,491
|
$
|
111,376
|
$
|
124,000
|
||||||||
Arctic
|
5,290
|
6,840
|
9,647
|
11,083
|
||||||||||||
Latin
America
|
16,951
|
19,051
|
32,987
|
39,257
|
||||||||||||
WH
Centralized Operations
|
821
|
2,909
|
1,975
|
5,169
|
||||||||||||
Europe
|
93,459
|
98,303
|
176,816
|
193,733
|
||||||||||||
West
Africa
|
45,799
|
47,010
|
79,082
|
90,310
|
||||||||||||
Southeast
Asia
|
23,858
|
33,381
|
46,350
|
70,261
|
||||||||||||
Other
International
|
12,046
|
14,215
|
23,501
|
27,236
|
||||||||||||
EH
Centralized Operations
|
5,331
|
8,128
|
12,136
|
16,965
|
||||||||||||
Bristow Academy
|
3,228
|
5,572
|
6,247
|
11,723
|
||||||||||||
Intrasegment
eliminations
|
(2,923
|
)
|
(6,208
|
)
|
(9,158
|
)
|
(13,954
|
)
|
||||||||
Corporate
|
—
|
(4
|
)
|
—
|
28
|
|||||||||||
Total
consolidated gross revenue
|
$
|
259,808
|
$
|
291,688
|
$
|
490,959
|
$
|
575,811
|
Three
Months Ended
September
30,
|
Six
Months Ended
September
30,
|
|||||||||||||||
2007
|
2008
|
2007
|
2008
|
|||||||||||||
(In
thousands)
|
||||||||||||||||
Consolidated
operating income (loss) reconciliation:
|
||||||||||||||||
U.S. Gulf
of Mexico
|
$
|
9,680
|
$
|
8,263
|
$
|
18,779
|
$
|
16,252
|
||||||||
Arctic
|
1,440
|
1,900
|
2,115
|
2,419
|
||||||||||||
Latin
America
|
4,251
|
4,553
|
7,585
|
11,028
|
||||||||||||
WH
Centralized Operations
|
70
|
904
|
1,362
|
228
|
||||||||||||
Europe
|
21,895
|
21,969
|
36,470
|
39,445
|
||||||||||||
West
Africa
|
15,492
|
8,024
|
18,289
|
14,540
|
||||||||||||
Southeast
Asia
|
5,107
|
1,064
|
9,234
|
5,250
|
||||||||||||
Other
International
|
1,781
|
1,578
|
4,046
|
2,775
|
||||||||||||
EH
Centralized Operations
|
(3,247
|
)
|
(4,467
|
)
|
(7,526
|
)
|
(12,388
|
)
|
||||||||
Bristow Academy
|
(391
|
)
|
(159
|
)
|
(482
|
)
|
387
|
|||||||||
(Loss)
gain on disposal of assets
|
(757
|
)
|
3,302
|
(173
|
)
|
5,967
|
||||||||||
Corporate
|
(5,603
|
)
|
(6,484
|
)
|
(11,195
|
)
|
(13,869
|
)
|
||||||||
Total
consolidated operating income
|
$
|
49,718
|
$
|
40,447
|
$
|
78,504
|
$
|
72,034
|
March
31,
|
September
30,
|
|||||||
2008
|
2008
|
|||||||
(In
thousands)
|
||||||||
Identifiable assets:
|
||||||||
U.S. Gulf
of Mexico
|
$
|
256,927
|
$
|
293,646
|
||||
Arctic
|
17,233
|
22,640
|
||||||
Latin
America
|
157,916
|
233,393
|
||||||
WH
Centralized Operations
|
1,456
|
1,411
|
||||||
Europe
|
509,413
|
586,988
|
||||||
West
Africa
|
252,458
|
261,691
|
||||||
Southeast
Asia
|
165,431
|
200,323
|
||||||
Other
International
|
99,185
|
84,371
|
||||||
EH
Centralized Operations
|
51,291
|
40,381
|
||||||
Bristow Academy
|
33,966
|
35,396
|
||||||
Corporate
(1)
|
432,079
|
546,864
|
||||||
Total
identifiable assets
|
$
|
1,977,355
|
$
|
2,307,104
|
(1)
|
Includes
$182.9 million and $295.2 million, respectively, in progress payments on
aircraft scheduled to be delivered in future periods, which is included in
construction in progress within property and equipment on our condensed
consolidated balance sheets as of March 31 and September 30, 2008,
respectively.
|
Three
Months Ended
|
Six
Months Ended
|
|||||||||||||||
September
30,
|
September
30,
|
|||||||||||||||
2007
|
2008
|
2007
|
2008
|
|||||||||||||
(In
thousands)
|
||||||||||||||||
Net
income
|
$
|
33,950
|
$
|
27,781
|
$
|
56,622
|
$
|
50,430
|
||||||||
Other
comprehensive income:
|
||||||||||||||||
Currency
translation adjustments
|
6,617
|
(47,121
|
)
|
15,337
|
(43,618
|
)
|
||||||||||
Income
tax effect attributable to pension liability adjustment as a result of
internal reorganization (see Note 8)
|
—
|
—
|
—
|
(9,371
|
)
|
|||||||||||
Unrealized
loss on cash flow hedges (net of income tax effect of $3.8 million and
$4.1 million for the three and six months ended September 30, 2008,
respectively)
|
—
|
(7,130
|
)
|
—
|
(7,708
|
)
|
||||||||||
Comprehensive
income (loss)
|
$
|
40,567
|
$
|
(26,470
|
)
|
$
|
71,959
|
$
|
(10,267
|
)
|
Parent
|
Non-
|
|||||||||||||||||||
Company
|
Guarantor
|
Guarantor
|
||||||||||||||||||
Only
|
Subsidiaries
|
Subsidiaries
|
Eliminations
|
Consolidated
|
||||||||||||||||
(In
thousands)
|
||||||||||||||||||||
Revenue:
|
||||||||||||||||||||
Gross
revenue
|
$
|
—
|
$
|
78,976
|
$
|
180,832
|
$
|
—
|
$
|
259,808
|
||||||||||
Intercompany
revenue
|
—
|
3,998
|
3,382
|
(7,380
|
)
|
—
|
||||||||||||||
—
|
82,974
|
184,214
|
(7,380
|
)
|
259,808
|
|||||||||||||||
Operating
expense:
|
||||||||||||||||||||
Direct
cost
|
—
|
51,546
|
125,176
|
—
|
176,722
|
|||||||||||||||
Intercompany
expenses
|
—
|
3,405
|
3,975
|
(7,380
|
)
|
—
|
||||||||||||||
Depreciation
and amortization
|
71
|
5,049
|
7,231
|
—
|
12,351
|
|||||||||||||||
General
and administrative
|
5,507
|
3,410
|
11,343
|
—
|
20,260
|
|||||||||||||||
Gain
on disposal of assets
|
—
|
731
|
26
|
—
|
757
|
|||||||||||||||
5,578
|
64,141
|
147,751
|
(7,380
|
)
|
210,090
|
|||||||||||||||
Operating
income (loss)
|
(5,578
|
)
|
18,833
|
36,463
|
—
|
49,718
|
||||||||||||||
Earnings
from unconsolidated affiliates,
net
|
28,256
|
138
|
3,980
|
(28,256
|
)
|
4,118
|
||||||||||||||
Interest
income
|
22,732
|
35
|
481
|
(19,288
|
)
|
3,960
|
||||||||||||||
Interest
expense
|
(8,249
|
)
|
—
|
(17,562
|
)
|
19,288
|
(6,523
|
)
|
||||||||||||
Other
income (expense), net
|
(15
|
)
|
(54
|
)
|
429
|
—
|
360
|
|||||||||||||
Income
from continuing operations before provision
for
income taxes and minority interest
|
37,146
|
18,952
|
23,791
|
(28,256
|
)
|
51,633
|
||||||||||||||
Allocation
of consolidated income taxes
|
(3,145
|
)
|
(2,320
|
)
|
(12,829
|
)
|
—
|
(18,294
|
)
|
|||||||||||
Minority
interest
|
(51
|
)
|
47
|
—
|
(4
|
)
|
||||||||||||||
Income
from continuing operations
|
33,950
|
16,632
|
11,009
|
(28,256
|
)
|
33,335
|
||||||||||||||
Discontinued
operations:
|
||||||||||||||||||||
Income
from discontinued operations before provision
for
income taxes
|
—
|
962
|
—
|
—
|
962
|
|||||||||||||||
Provision
for income taxes on discontinued operations
|
—
|
(347
|
)
|
—
|
—
|
(347
|
)
|
|||||||||||||
Income
from discontinued operations
|
—
|
615
|
—
|
—
|
615
|
|||||||||||||||
Net
income
|
$
|
33,950
|
$
|
17,247
|
$
|
11,009
|
$
|
(28,256
|
)
|
$
|
33,950
|
Parent
|
Non-
|
|||||||||||||||||||
Company
|
Guarantor
|
Guarantor
|
||||||||||||||||||
Only
|
Subsidiaries
|
Subsidiaries
|
Eliminations
|
Consolidated
|
||||||||||||||||
(In
thousands)
|
||||||||||||||||||||
Revenue:
|
||||||||||||||||||||
Gross
revenue
|
$
|
—
|
$
|
153,284
|
$
|
337,675
|
$
|
—
|
$
|
490,959
|
||||||||||
Intercompany
revenue
|
—
|
9,154
|
9,497
|
(18,651
|
)
|
—
|
||||||||||||||
—
|
162,438
|
347,172
|
(18,651
|
)
|
490,959
|
|||||||||||||||
Operating
expense:
|
||||||||||||||||||||
Direct
cost
|
—
|
99,829
|
250,126
|
—
|
349,955
|
|||||||||||||||
Intercompany
expenses
|
—
|
9,619
|
9,032
|
(18,651
|
)
|
—
|
||||||||||||||
Depreciation
and amortization
|
142
|
10,453
|
13,087
|
—
|
23,682
|
|||||||||||||||
General
and administrative
|
11,000
|
6,477
|
21,168
|
—
|
38,645
|
|||||||||||||||
Gain
on disposal of assets
|
—
|
23
|
150
|
—
|
173
|
|||||||||||||||
11,142
|
126,401
|
293,563
|
(18,651
|
)
|
412,455
|
|||||||||||||||
Operating
income (loss)
|
(11,142
|
)
|
36,037
|
53,609
|
—
|
78,504
|
||||||||||||||
Earnings
from unconsolidated affiliates,
net
|
43,881
|
313
|
7,195
|
(43,881
|
)
|
7,508
|
||||||||||||||
Interest
income
|
42,379
|
44
|
1,168
|
(37,507
|
)
|
6,084
|
||||||||||||||
Interest
expense
|
(11,061
|
)
|
—
|
(35,897
|
)
|
37,507
|
(9,451
|
)
|
||||||||||||
Other
income (expense), net
|
(40
|
)
|
(97
|
)
|
923
|
—
|
786
|
|||||||||||||
Income
from continuing operations before provision
for
income taxes and minority interest
|
64,017
|
36,297
|
26,998
|
(43,881
|
)
|
83,431
|
||||||||||||||
Allocation
of consolidated income taxes
|
(7,297
|
)
|
(2,518
|
)
|
(17,918
|
)
|
—
|
(27,733
|
)
|
|||||||||||
Minority
interest
|
(98
|
)
|
—
|
(355
|
)
|
—
|
(453
|
)
|
||||||||||||
Income
from continuing operations
|
56,622
|
33,779
|
8,725
|
(43,881
|
)
|
55,245
|
||||||||||||||
Discontinued
operations:
|
—
|
|||||||||||||||||||
Income
from discontinued operations before provision
for
income taxes
|
—
|
2,119
|
—
|
—
|
2,119
|
|||||||||||||||
Provision
for income taxes on discontinued operations
|
—
|
(742
|
)
|
—
|
—
|
(742
|
)
|
|||||||||||||
Income
from discontinued operations
|
—
|
1,377
|
—
|
—
|
1,377
|
|||||||||||||||
Net
income
|
$
|
56,622
|
$
|
35,156
|
$
|
8,725
|
$
|
(43,881
|
)
|
$
|
56,622
|
Parent
|
Non-
|
|||||||||||||||||||
Company
|
Guarantor
|
Guarantor
|
||||||||||||||||||
Only
|
Subsidiaries
|
Subsidiaries
|
Eliminations
|
Consolidated
|
||||||||||||||||
(In
thousands)
|
||||||||||||||||||||
Revenue:
|
||||||||||||||||||||
Gross
revenue
|
$
|
42
|
$
|
91,625
|
$
|
200,021
|
$
|
—
|
$
|
291,688
|
||||||||||
Intercompany
revenue
|
—
|
7,116
|
7,374
|
(14,490
|
)
|
—
|
||||||||||||||
42
|
98,741
|
207,395
|
(14,490
|
)
|
291,688
|
|||||||||||||||
Operating
expense:
|
||||||||||||||||||||
Direct
cost
|
556
|
55,761
|
156,757
|
—
|
213,074
|
|||||||||||||||
Intercompany
expenses
|
—
|
7,458
|
7,032
|
(14,490
|
)
|
—
|
||||||||||||||
Depreciation
and amortization
|
106
|
5,694
|
9,685
|
—
|
15,485
|
|||||||||||||||
General
and administrative
|
5,351
|
4,596
|
16,037
|
—
|
25,984
|
|||||||||||||||
Gain
on disposal of assets
|
—
|
431
|
(22,077
|
)
|
18,344
|
(3,302
|
)
|
|||||||||||||
6,013
|
73,940
|
167,434
|
3,854
|
251,241
|
||||||||||||||||
Operating
income (loss)
|
(5,971
|
)
|
24,801
|
39,961
|
(18,344
|
)
|
40,447
|
|||||||||||||
Earnings
(losses) from unconsolidated affiliates,
net
|
46,648
|
—
|
2,832
|
(47,509
|
)
|
1,971
|
||||||||||||||
Interest
income
|
21,985
|
25
|
711
|
(19,516
|
)
|
3,205
|
||||||||||||||
Interest
expense
|
(8,669
|
)
|
—
|
(19,251
|
)
|
19,516
|
(8,404
|
)
|
||||||||||||
Other
income (expense), net
|
(1,424
|
)
|
294
|
3,200
|
—
|
2,070
|
||||||||||||||
Income
from continuing operations before provision
for
income taxes and minority interest
|
52,569
|
25,120
|
27,453
|
(65,853
|
)
|
39,289
|
||||||||||||||
Allocation
of consolidated income taxes
|
(24,379
|
)
|
(3,667
|
)
|
17,736
|
—
|
(10,310
|
)
|
||||||||||||
Minority
interest
|
(409
|
)
|
—
|
(543
|
)
|
—
|
(952
|
)
|
||||||||||||
Income
from continuing operations
|
27,781
|
21,453
|
44,646
|
(65,853
|
)
|
28,027
|
||||||||||||||
Discontinued
operations:
|
||||||||||||||||||||
Loss
from discontinued operations before benefit
for
income
taxes
|
—
|
(379
|
)
|
—
|
—
|
(379
|
)
|
|||||||||||||
Benefit
for income taxes on discontinued operations
|
—
|
133
|
—
|
—
|
133
|
|||||||||||||||
Loss
from discontinued operations
|
—
|
(246
|
)
|
—
|
—
|
(246
|
)
|
|||||||||||||
Net
income
|
$
|
27,781
|
$
|
21,207
|
$
|
44,646
|
$
|
(65,853
|
)
|
$
|
27,781
|
Parent
|
Non-
|
|||||||||||||||||||
Company
|
Guarantor
|
Guarantor
|
||||||||||||||||||
Only
|
Subsidiaries
|
Subsidiaries
|
Eliminations
|
Consolidated
|
||||||||||||||||
(In
thousands)
|
||||||||||||||||||||
Revenue:
|
||||||||||||||||||||
Gross
revenue
|
$
|
73
|
$
|
180,857
|
$
|
394,881
|
$
|
—
|
$
|
575,811
|
||||||||||
Intercompany
revenue
|
—
|
12,589
|
11,806
|
(24,395
|
)
|
—
|
||||||||||||||
73
|
193,446
|
406,687
|
(24,395
|
)
|
575,811
|
|||||||||||||||
Operating
expense:
|
||||||||||||||||||||
Direct
cost
|
596
|
115,214
|
310,304
|
—
|
426,114
|
|||||||||||||||
Intercompany
expenses
|
—
|
11,943
|
12,452
|
(24,395
|
)
|
—
|
||||||||||||||
Depreciation
and amortization
|
173
|
11,406
|
18,861
|
—
|
30,440
|
|||||||||||||||
General
and administrative
|
12,504
|
8,927
|
31,759
|
—
|
53,190
|
|||||||||||||||
Gain
on disposal of assets
|
—
|
(1,532
|
)
|
(22,779
|
)
|
18,344
|
(5,967
|
)
|
||||||||||||
13,273
|
145,958
|
350,597
|
(6,051
|
)
|
503,777
|
|||||||||||||||
Operating
income (loss)
|
(13,200
|
)
|
47,488
|
56,090
|
(18,344
|
)
|
72,034
|
|||||||||||||
Earnings
(losses) from unconsolidated affiliates,
net
|
95,771
|
3,454
|
7,101
|
(96,632
|
)
|
9,694
|
||||||||||||||
Interest
income
|
42,920
|
90
|
1,162
|
(39,520
|
)
|
4,652
|
||||||||||||||
Interest
expense
|
(17,412
|
)
|
—
|
(39,005
|
)
|
39,520
|
(16,897
|
)
|
||||||||||||
Other
income (expense), net
|
3,256
|
269
|
237
|
—
|
3,762
|
|||||||||||||||
111,335
|
51,301
|
25,585
|
(114,976
|
)
|
73,245
|
|||||||||||||||
Income
from continuing operations before provision
for
income taxes and minority interest
|
||||||||||||||||||||
Allocation
of consolidated income taxes
|
(60,453
|
)
|
(7,540
|
)
|
47,079
|
—
|
(20,914
|
)
|
||||||||||||
Minority
interest
|
(452
|
)
|
—
|
(1,203
|
)
|
—
|
(1,655
|
)
|
||||||||||||
Income from
continuing operations
|
50,430
|
43,761
|
71,461
|
(114,976
|
)
|
50,676
|
||||||||||||||
Discontinued
operations:
|
||||||||||||||||||||
Loss
from discontinued operations before benefit
for
income
taxes
|
—
|
(379
|
)
|
—
|
—
|
(379
|
)
|
|||||||||||||
Benefit
for income taxes on discontinued operations
|
—
|
133
|
—
|
—
|
133
|
|||||||||||||||
Loss
from discontinued operations
|
—
|
(246
|
)
|
—
|
—
|
(246
|
)
|
|||||||||||||
Net
income
|
$
|
50,430
|
$
|
43,515
|
$
|
71,461
|
$
|
(114,976
|
)
|
$
|
50,430
|
Parent
|
Non-
|
|||||||||||||||||||
Company
|
Guarantor
|
Guarantor
|
||||||||||||||||||
Only
|
Subsidiaries
|
Subsidiaries
|
Eliminations
|
Consolidated
|
||||||||||||||||
(In
thousands)
|
||||||||||||||||||||
ASSETS
|
||||||||||||||||||||
Current
assets:
|
||||||||||||||||||||
Cash
and cash equivalents
|
$
|
226,494
|
$
|
361
|
$
|
63,195
|
$
|
—
|
$
|
290,050
|
||||||||||
Accounts
receivable
|
34,679
|
73,023
|
155,232
|
(47,019
|
)
|
215,915
|
||||||||||||||
Inventories
|
—
|
76,706
|
99,533
|
—
|
176,239
|
|||||||||||||||
Prepaid
expenses and other
|
1,145
|
2,856
|
20,176
|
—
|
24,177
|
|||||||||||||||
Total
current assets
|
262,318
|
152,946
|
338,136
|
(47,019
|
)
|
706,381
|
||||||||||||||
Intercompany
investment
|
602,282
|
1,047
|
16,990
|
(620,319
|
)
|
—
|
||||||||||||||
Investment
in unconsolidated affiliates
|
4,433
|
3,639
|
44,395
|
—
|
52,467
|
|||||||||||||||
Intercompany
notes receivable
|
875,856
|
—
|
(15,145
|
)
|
(860,711
|
)
|
—
|
|||||||||||||
Property
and equipment – at cost:
|
||||||||||||||||||||
Land
and buildings
|
212
|
44,230
|
15,614
|
—
|
60,056
|
|||||||||||||||
Aircraft
and equipment
|
2,957
|
552,429
|
873,610
|
—
|
1,428,996
|
|||||||||||||||
3,169
|
596,659
|
889,224
|
—
|
1,489,052
|
||||||||||||||||
Less: Accumulated
depreciation and amortization
|
(1,146
|
)
|
(139,100
|
)
|
(176,268
|
)
|
—
|
(316,514
|
)
|
|||||||||||
2,023
|
457,559
|
712,956
|
—
|
1,172,538
|
||||||||||||||||
Goodwill
|
—
|
4,755
|
10,921
|
—
|
15,676
|
|||||||||||||||
Other
assets
|
14,183
|
4,457
|
11,653
|
—
|
30,293
|
|||||||||||||||
$
|
1,761,095
|
$
|
624,403
|
$
|
1,119,906
|
$
|
(1,528,049
|
)
|
$
|
1,977,355
|
||||||||||
LIABILITIES
AND STOCKHOLDERS’ INVESTMENT
|
||||||||||||||||||||
Current
liabilities:
|
||||||||||||||||||||
Accounts
payable
|
$
|
686
|
$
|
14,486
|
$
|
47,986
|
$
|
(13,508
|
)
|
$
|
49,650
|
|||||||||
Accrued
liabilities
|
10,893
|
15,780
|
106,368
|
(33,511
|
)
|
99,530
|
||||||||||||||
Deferred
taxes
|
(1,909
|
)
|
—
|
11,147
|
—
|
9,238
|
||||||||||||||
Short-term
borrowings and current
maturities
of long-term debt
|
—
|
—
|
6,541
|
—
|
6,541
|
|||||||||||||||
Total
current liabilities
|
9,670
|
30,266
|
172,042
|
(47,019
|
)
|
164,959
|
||||||||||||||
Long-term
debt, less current maturities
|
584,981
|
—
|
14,696
|
—
|
599,677
|
|||||||||||||||
Intercompany
notes payable
|
—
|
190,498
|
670,213
|
(860,711
|
)
|
—
|
||||||||||||||
Accrued
pension liabilities
|
—
|
—
|
134,156
|
—
|
134,156
|
|||||||||||||||
Other
liabilities and deferred credits
|
3,834
|
9,379
|
1,592
|
—
|
14,805
|
|||||||||||||||
Deferred
taxes
|
52,190
|
3,669
|
35,888
|
—
|
91,747
|
|||||||||||||||
Minority
interest
|
2,072
|
—
|
2,498
|
—
|
4,570
|
|||||||||||||||
Stockholders’
investment:
|
||||||||||||||||||||
Preferred
stock
|
222,554
|
—
|
—
|
—
|
222,554
|
|||||||||||||||
Common
stock
|
239
|
4,996
|
68,986
|
(73,982
|
)
|
239
|
||||||||||||||
Additional
paid-in-capital
|
186,390
|
23,100
|
242,983
|
(266,083
|
)
|
186,390
|
||||||||||||||
Retained
earnings
|
606,931
|
362,495
|
(60,086
|
)
|
(302,409
|
)
|
606,931
|
|||||||||||||
Accumulated
other comprehensive
income
(loss)
|
92,234
|
—
|
(163,062
|
)
|
22,155
|
(48,673
|
)
|
|||||||||||||
1,108,348
|
390,591
|
88,821
|
(620,319
|
)
|
967,441
|
|||||||||||||||
$
|
1,761,095
|
$
|
624,403
|
$
|
1,119,906
|
$
|
(1,528,049
|
)
|
$
|
1,977,355
|
Parent
|
Non-
|
|||||||||||||||||||
Company
|
Guarantor
|
Guarantor
|
||||||||||||||||||
Only
|
Subsidiaries
|
Subsidiaries
|
Eliminations
|
Consolidated
|
||||||||||||||||
(In
thousands)
|
||||||||||||||||||||
ASSETS
|
||||||||||||||||||||
Current
assets:
|
||||||||||||||||||||
Cash
and cash equivalents
|
$
|
272,148
|
$
|
2,020
|
$
|
124,887
|
$
|
—
|
$
|
399,055
|
||||||||||
Accounts
receivable
|
6,965
|
82,231
|
157,844
|
(28,645
|
)
|
218,395
|
||||||||||||||
Inventories
|
—
|
73,856
|
93,102
|
—
|
166,958
|
|||||||||||||||
Prepaid
expenses and other
|
899
|
4,604
|
59,787
|
(44,636
|
)
|
20,654
|
||||||||||||||
Assets
held for sale serving production management
Customers
in the U.S. Gulf of Mexico
|
—
|
21,369
|
—
|
—
|
21,369
|
|||||||||||||||
Total
current assets
|
280,012
|
184,080
|
435,620
|
(73,281
|
)
|
826,431
|
||||||||||||||
Intercompany
investment
|
785,091
|
1,824
|
135,569
|
(922,484
|
)
|
—
|
||||||||||||||
Investment
in unconsolidated affiliates
|
2,248
|
150
|
31,553
|
—
|
33,951
|
|||||||||||||||
Intercompany
notes receivable
|
939,671
|
—
|
(19,006
|
)
|
(920,665
|
)
|
—
|
|||||||||||||
Property
and equipment – at cost:
|
||||||||||||||||||||
Land
and buildings
|
212
|
42,280
|
14,849
|
—
|
57,341
|
|||||||||||||||
Aircraft
and equipment
|
(1,532
|
)
|
743,740
|
908,455
|
(920
|
)
|
1,649,743
|
|||||||||||||
(1,320
|
)
|
786,020
|
923,304
|
(920
|
)
|
1,707,084
|
||||||||||||||
Less: Accumulated
depreciation and amortization
|
(11,745
|
)
|
(123,099
|
)
|
(167,694
|
)
|
—
|
(302,538
|
)
|
|||||||||||
(13,065
|
)
|
662,921
|
755,610
|
(920
|
)
|
1,404,546
|
||||||||||||||
Goodwill
|
—
|
4,755
|
11,816
|
—
|
16,571
|
|||||||||||||||
Other
assets
|
115,639
|
1,339
|
185,701
|
(277,074
|
)
|
25,605
|
||||||||||||||
$
|
2,109,596
|
$
|
855,069
|
$
|
1,536,863
|
$
|
(2,194,424
|
)
|
$
|
2,307,104
|
||||||||||
LIABILITIES
AND STOCKHOLDERS’ INVESTMENT
|
||||||||||||||||||||
Current
liabilities:
|
||||||||||||||||||||
Accounts
payable
|
$
|
1,594
|
$
|
27,259
|
$
|
38,132
|
$
|
(21,895
|
)
|
$
|
45,090
|
|||||||||
Accrued
liabilities
|
16,055
|
22,026
|
107,209
|
(50,724
|
)
|
94,566
|
||||||||||||||
Deferred
taxes
|
1,992
|
—
|
9,561
|
—
|
11,553
|
|||||||||||||||
Short-term
borrowings and current maturities
of
long-term
debt
|
64
|
—
|
5,314
|
—
|
5,378
|
|||||||||||||||
Total
current liabilities
|
19,705
|
49,285
|
160,216
|
(72,619
|
)
|
156,587
|
||||||||||||||
Long-term
debt, less current maturities
|
695,505
|
—
|
30,029
|
—
|
725,534
|
|||||||||||||||
Intercompany
notes payable
|
—
|
367,952
|
653,281
|
(1,021,233
|
)
|
—
|
||||||||||||||
Accrued
pension liabilities
|
—
|
—
|
117,566
|
—
|
117,566
|
|||||||||||||||
Other
liabilities and deferred credits
|
3,478
|
9,169
|
180,242
|
(177,129
|
)
|
15,760
|
||||||||||||||
Deferred
taxes
|
75,120
|
5,767
|
17,915
|
—
|
98,802
|
|||||||||||||||
Minority
interest
|
2,240
|
—
|
8,824
|
—
|
11,064
|
|||||||||||||||
Stockholders’
investment:
|
||||||||||||||||||||
5.50%
mandatory convertible preferred stock
|
222,554
|
—
|
—
|
—
|
222,554
|
|||||||||||||||
Common
stock
|
291
|
4,996
|
45,848
|
(50,844
|
)
|
291
|
||||||||||||||
Additional
paid-in-capital
|
416,025
|
11,890
|
447,044
|
(458,934
|
)
|
416,025
|
||||||||||||||
Retained
earnings
|
652,291
|
406,010
|
(1,525
|
)
|
(404,485
|
)
|
652,291
|
|||||||||||||
Accumulated
other comprehensive income
(loss)
|
22,387
|
—
|
(122,577
|
)
|
(9,180
|
)
|
(109,370
|
)
|
||||||||||||
1,313,548
|
422,896
|
368,790
|
(923,443
|
)
|
1,181,791
|
|||||||||||||||
$
|
2,109,596
|
$
|
855,069
|
$
|
1,536,863
|
$
|
(2,194,424
|
)
|
$
|
2,307,104
|
Parent
|
Non-
|
|||||||||||||||||||
Company
|
Guarantor
|
Guarantor
|
||||||||||||||||||
Only
|
Subsidiaries
|
Subsidiaries
|
Eliminations
|
Consolidated
|
||||||||||||||||
(In
thousands)
|
||||||||||||||||||||
Net
cash provided by (used in) operating activities
|
$
|
(19,573
|
)
|
$
|
28,472
|
$
|
31,681
|
$
|
2,918
|
$
|
43,498
|
|||||||||
Cash
flows from investing activities:
|
||||||||||||||||||||
Capital
expenditures
|
(133
|
)
|
(166,602
|
)
|
(54,360
|
)
|
—
|
(221,095
|
)
|
|||||||||||
Proceeds
from asset dispositions
|
—
|
2,761
|
383
|
—
|
3,144
|
|||||||||||||||
Acquisition,
net of cash received
|
(15,031
|
)
|
—
|
2,105
|
—
|
(12,926
|
)
|
|||||||||||||
Note
issued to unconsolidated affiliate
|
—
|
(4,141
|
)
|
—
|
—
|
(4,141
|
)
|
|||||||||||||
Investment
in unconsolidated affiliate
|
—
|
(1,960
|
)
|
—
|
—
|
(1,960
|
)
|
|||||||||||||
Net
cash used in investing activities
|
(15,164
|
)
|
(169,942
|
)
|
(51,872
|
)
|
—
|
(236,978
|
)
|
|||||||||||
Cash
flows from financing activities:
|
||||||||||||||||||||
Proceeds
from borrowings
|
300,000
|
—
|
—
|
—
|
300,000
|
|||||||||||||||
Debt
issuance costs
|
(4,889
|
)
|
—
|
—
|
—
|
(4,889
|
)
|
|||||||||||||
Repayment
of debt and debt redemption premiums
|
—
|
—
|
(7,205
|
)
|
—
|
(7,205
|
)
|
|||||||||||||
Increases
(decreases) in cash related to intercompany
advances
and debt
|
(165,293
|
)
|
138,068
|
30,143
|
(2,918
|
)
|
—
|
|||||||||||||
Partial
prepayment of put/call obligation
|
(78
|
)
|
—
|
—
|
—
|
(78
|
)
|
|||||||||||||
Preferred
Stock dividends paid
|
(6,325
|
)
|
—
|
—
|
—
|
(6,325
|
)
|
|||||||||||||
Issuance
of common stock
|
1,265
|
—
|
—
|
—
|
1,265
|
|||||||||||||||
Tax
benefit related to stock-based compensation
|
494
|
—
|
—
|
—
|
494
|
|||||||||||||||
Net
cash provided by financing activities
|
125,174
|
138,068
|
22,938
|
(2,918
|
)
|
283,262
|
||||||||||||||
Effect
of exchange rate changes on cash and cash
equivalents
|
696
|
—
|
1,773
|
—
|
2,469
|
|||||||||||||||
Net
increase (decrease) in cash and cash
equivalents
|
91,133
|
(3,402
|
)
|
4,520
|
—
|
92,251
|
||||||||||||||
Cash
and cash equivalents at beginning of
period
|
133,010
|
3,434
|
47,744
|
—
|
184,188
|
|||||||||||||||
Cash
and cash equivalents at end of period
|
$
|
224,143
|
$
|
32
|
$
|
52,264
|
$
|
—
|
$
|
276,439
|
Parent
|
Non-
|
|||||||||||||||||||
Company
|
Guarantor
|
Guarantor
|
||||||||||||||||||
Only
|
Subsidiaries
|
Subsidiaries
|
Eliminations
|
Consolidated
|
||||||||||||||||
(In
thousands)
|
||||||||||||||||||||
Net
cash provided by (used in) operating activities
|
$
|
(103,169
|
)
|
$
|
(124,419
|
)
|
$
|
184,894
|
$
|
98,163
|
$
|
55,469
|
||||||||
Cash
flows from investing activities:
|
||||||||||||||||||||
Capital
expenditures
|
(1,241
|
)
|
(70,412
|
)
|
(206,890
|
)
|
—
|
(278,543
|
)
|
|||||||||||
Proceeds
from asset dispositions
|
—
|
3,232
|
14,090
|
—
|
17,322
|
|||||||||||||||
Acquisition,
net of cash received
|
—
|
356
|
—
|
—
|
356
|
|||||||||||||||
Net
cash used in investing activities
|
(1,241
|
)
|
(66,824
|
)
|
(192,800
|
)
|
—
|
(260,865
|
)
|
|||||||||||
Cash
flows from financing activities:
|
||||||||||||||||||||
Proceeds
from borrowings
|
115,000
|
—
|
—
|
—
|
115,000
|
|||||||||||||||
Debt
issuance costs
|
(3,768
|
)
|
—
|
—
|
—
|
(3,768
|
)
|
|||||||||||||
Repayment
of debt and debt redemption premiums
|
(1,150
|
)
|
—
|
(2,817
|
)
|
—
|
(3,967
|
)
|
||||||||||||
Increases
(decreases) in cash related to intercompany
advances
and debt
|
(190,325
|
)
|
192,902
|
95,586
|
(98,163
|
)
|
—
|
|||||||||||||
Partial
prepayment of put/call obligation
|
(82
|
)
|
—
|
—
|
—
|
(82
|
)
|
|||||||||||||
Dividends
paid
|
12,900
|
—
|
(12,900
|
)
|
—
|
—
|
||||||||||||||
Preferred
Stock dividends paid
|
(6,325
|
)
|
—
|
—
|
—
|
(6,325
|
)
|
|||||||||||||
Issuance
of common stock
|
225,099
|
—
|
—
|
—
|
225,099
|
|||||||||||||||
Tax
benefit related to stock-based compensation
|
231
|
—
|
—
|
—
|
231
|
|||||||||||||||
Net
cash provided by financing activities
|
151,580
|
192,902
|
79,869
|
(98,163
|
)
|
326,188
|
||||||||||||||
Effect
of exchange rate changes on cash and cash
equivalents
|
(1,516
|
)
|
—
|
(10,271
|
)
|
—
|
(11,787
|
)
|
||||||||||||
Net
increase in cash and cash
equivalents
|
45,654
|
1,659
|
61,692
|
—
|
109,005
|
|||||||||||||||
Cash
and cash equivalents at beginning of
period
|
226,494
|
361
|
63,195
|
—
|
290,050
|
|||||||||||||||
Cash
and cash equivalents at end of period
|
$
|
272,148
|
$
|
2,020
|
$
|
124,887
|
$
|
—
|
$
|
399,055
|
·
|
the
risks and uncertainties described under “Item 1A. Risk Factors” in the
fiscal year 2008 Annual Report and elsewhere in this Quarterly
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 unable to acquire additional aircraft due to limited availability or
unable to exercise aircraft purchase
options;
|
·
|
we
are unable to obtain financing;
|
·
|
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 capacity expansion
program;
|
·
|
the
outcome of the United States Department of Justice (“DOJ”) investigation
relating to the Internal Review, which is ongoing, has a greater than
anticipated financial or business impact;
and
|
·
|
the
outcome of the DOJ antitrust investigation, which is ongoing, has a
greater than anticipated financial or business
impact.
|
·
|
Western
Hemisphere
|
−
|
U.S. Gulf
of Mexico
|
−
|
Arctic
|
−
|
Latin
America
|
−
|
Western
Hemisphere (“WH”) Centralized
Operations
|
·
|
Eastern
Hemisphere
|
−
|
Europe
|
−
|
West
Africa
|
−
|
Southeast
Asia
|
−
|
Other
International
|
−
|
Eastern
Hemisphere (“EH”) Centralized
Operations
|
·
|
Global
Training
|
−
|
Bristow Academy
|
Percentage
of Current Period Revenue
|
Aircraft
in Consolidated Fleet
|
||||||||||||||||||
Helicopters
|
|||||||||||||||||||
Small
|
Medium
|
Large
|
Training
|
Fixed Wing
|
Total
|
(1)
|
Unconsolidated Affiliates
(2)
|
Total
|
|||||||||||
U.S. Gulf
of Mexico
|
21
|
%
|
109
|
28
|
4
|
—
|
—
|
141
|
—
|
141
|
|||||||||
Arctic
|
2
|
%
|
14
|
2
|
—
|
—
|
1
|
17
|
—
|
17
|
|||||||||
Latin
America
|
7
|
%
|
5
|
39
|
1
|
—
|
—
|
45
|
15
|
60
|
|||||||||
WH
Centralized Operations
|
1
|
%
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
—
|
|||||||||
Europe
|
34
|
%
|
—
|
11
|
34
|
—
|
—
|
45
|
27
|
72
|
|||||||||
West
Africa
|
16
|
%
|
12
|
28
|
4
|
—
|
4
|
48
|
—
|
48
|
|||||||||
Southeast
Asia
|
12
|
%
|
2
|
12
|
14
|
—
|
—
|
28
|
—
|
28
|
|||||||||
Other
International
|
4
|
%
|
—
|
11
|
10
|
—
|
—
|
21
|
41
|
62
|
|||||||||
EH
Centralized Operations
|
1
|
%
|
—
|
—
|
—
|
—
|
—
|
—
|
57
|
57
|
|||||||||
Bristow Academy
|
2
|
%
|
—
|
—
|
—
|
68
|
1
|
69
|
—
|
69
|
|||||||||
Total
|
100
|
%
|
142
|
131
|
67
|
68
|
6
|
414
|
140
|
554
|
|||||||||
Aircraft
not currently in fleet: (3)
|
|||||||||||||||||||
On
order
|
2
|
15
|
19
|
6
|
—
|
42
|
|||||||||||||
Under
option
|
1
|
27
|
19
|
—
|
—
|
47
|
(1)
|
Includes
58 aircraft held for sale. On October 30, 2008, we sold 53
aircraft and related assets operating in the U.S. Gulf of
Mexico. See Note 2 to the “Notes to the Condensed Consolidated
Financial Statements” included elsewhere in this Quarterly
Report.
|
(2)
|
The
140 aircraft operated by our unconsolidated affiliates are in addition to
those aircraft leased from us.
|
(3)
|
This
table does not reflect aircraft which our unconsolidated affiliates may
have on order or under option.
|
·
|
Grow our
business. We plan to continue to grow our business
globally and increase our revenue, profitability and fleet
capacity. We have a footprint in most major oil and gas
producing regions of the world, and we have the opportunity to expand and
deepen our presence in many of these markets. We anticipate
this growth will result primarily from the deployment of new aircraft into
markets where we expect they will be most profitably employed, as well as
by executing opportunistic acquisitions. Through our
relationships with our existing customers, we are aware of future business
opportunities in a broad range of the markets we currently serve that
would require capital expenditures of roughly double the approximate $1
billion of capital expenditures we have financed (through existing cash,
available credit under our revolving credit facility and estimated future
operating cash flows). Our acquisition-related growth may
include increasing our role and participation with existing unconsolidated
affiliates and may include increasing our position in existing markets or
expanding into new markets.
|
·
|
Strategically position our
company as the preferred provider of helicopter
services. We position our company as the preferred
provider of helicopter services by maintaining strong relationships with
our customers and providing safe and high-quality service. We
focus on maintaining relationships with our customers’ field operations
and corporate management. We believe that this focus helps us
better anticipate customer needs and provide our customers with the right
aircraft in the right place at the right time, which in turn allows us to
better manage our existing fleet and capital investment
program. We also leverage our close relationships with our
customers to establish mutually beneficial operating practices and safety
standards worldwide. By applying standard operating and safety
practices across our global operations, we are able to provide our
customers with consistent, high-quality service in each of their areas of
operation. By better understanding our customers’ needs and by
virtue of our global operations and safety standards, we have effectively
competed against other helicopter service providers based on aircraft
availability, customer service, safety and reliability, and not just
price.
|
·
|
Integrate our global
operations. We are an integrated global operator, and we
intend to continue to identify and implement further opportunities to
integrate our global organization. In the past several years,
we have changed our senior management team, integrated our operations
among previously independently managed businesses, created a global flight
and maintenance standards group, improved our global asset allocation and
made other changes in our corporate operations. We anticipate
that these improvements and further integration opportunities will result
in revenue growth, and may also generate cost
savings.
|
Three
Months Ended
September
30,
|
Six
Months Ended
September
30,
|
|||||||||||
2007
|
2008
|
2007
|
2008
|
|||||||||
(Unaudited)
|
||||||||||||
(In
thousands)
|
||||||||||||
Gross
revenue:
|
||||||||||||
Operating
revenue
|
$
|
233,716
|
$
|
266,956
|
$
|
444,722
|
$
|
525,360
|
||||
Reimbursable
revenue
|
26,092
|
24,732
|
46,237
|
50,451
|
||||||||
Total
gross revenue
|
259,808
|
291,688
|
490,959
|
575,811
|
||||||||
Operating
expense:
|
||||||||||||
Direct
cost
|
152,624
|
188,393
|
305,712
|
375,366
|
||||||||
Reimbursable
expense
|
24,098
|
24,681
|
44,243
|
50,748
|
||||||||
Depreciation
and amortization
|
12,351
|
15,485
|
23,682
|
30,440
|
||||||||
General
and administrative
|
20,260
|
25,984
|
38,645
|
53,190
|
||||||||
Loss
(gain) on disposal of assets
|
757
|
(3,302
|
)
|
173
|
(5,967
|
)
|
||||||
Total
operating expense
|
210,090
|
251,241
|
412,455
|
503,777
|
||||||||
Operating
income
|
49,718
|
40,447
|
78,504
|
72,034
|
||||||||
Earnings
from unconsolidated affiliates, net of losses
|
4,118
|
1,971
|
7,508
|
9,694
|
||||||||
Interest
expense, net
|
(2,563
|
)
|
(5,199
|
)
|
(3,367
|
)
|
(12,245
|
)
|
||||
Other
income (expense), net
|
360
|
2,070
|
786
|
3,762
|
||||||||
Income
before provision for income taxes and minority interest
|
51,633
|
39,289
|
83,431
|
73,245
|
||||||||
Provision
for income taxes
|
(18,294
|
)
|
(10,310
|
)
|
(27,733
|
)
|
(20,914
|
)
|
||||
Minority
interest
|
(4
|
)
|
(952
|
)
|
(453
|
)
|
(1,655
|
)
|
||||
Income
from continuing operations
|
33,335
|
28,027
|
55,245
|
50,676
|
||||||||
Discontinued
operations:
|
||||||||||||
Income
(loss) from discontinued operations before provision for income
taxes
|
962
|
(379
|
)
|
2,119
|
(379
|
)
|
||||||
Provision
for income taxes on discontinued operations
|
(347
|
)
|
133
|
(742
|
)
|
133
|
||||||
Income
(loss) from discontinued operations
|
615
|
(246
|
)
|
1,377
|
(246
|
)
|
||||||
Net
income
|
$
|
33,950
|
$
|
27,781
|
$
|
56,622
|
$
|
50,430
|
·
|
Hurricanes
in the U.S. Gulf of Mexico during the Current Quarter, which resulted in a
decrease in flight activity and an increase in costs, reducing operating
income by $2.1 million, income from continuing operations by $1.5 million
and diluted earnings per share by
$0.04.
|
·
|
Revenue
recognized in the Current Quarter related to contractual rate
escalations and retroactive rate adjustments applicable to services
performed in prior quarters in Europe, which increased operating
income by $4.5 million, income from continuing operations by $3.2 million
and diluted earnings per share by
$0.09.
|
·
|
Decreases
in operating results in Australia, part of our Southeast Asia
business unit, which reduced operating income by $5.9 million, income from
continuing operations by $4.2 million and diluted earnings per share by
$0.12.
|
·
|
As
in the three months ended June 30, 2008 and as anticipated for the Current
Quarter, EH Centralized Operations experienced higher maintenance expense
(primarily due to foreign currency movements related to the portion of our
third party maintenance contracts denominated in euros and an increase in
heavy maintenance activities) which reduced operating income by $2.7
million, income from continuing operations by $1.9 million and diluted
earnings per share by $0.05.
|
·
|
Hurricanes
in the U.S. Gulf of Mexico during the Current Period, which resulted in a
decrease in flight activity and an increase in costs, reducing operating
income by $2.1 million, income from continuing operations by $1.5 million
and diluted earnings per share by
$0.05.
|
·
|
Revenue
recognized in the Current Period related to contractual rate
escalations and retroactive rate adjustments applicable to services
performed in prior periods in Europe of $2.9 million and Russia, a part of
our other international business unit, of $1.2 million which increased
operating income by $4.1 million, income from continuing operations by
$2.9 million and diluted earnings per share by
$0.09.
|
·
|
Decreases
in operating results in Australia, part of our Southeast Asia
business unit, which resulted in a reduction in operating income by $8.5
million, income from continuing operations by $6.1 million and diluted
earnings per share by $0.18.
|
·
|
Higher
maintenance expense in EH Centralized Operations (primarily due to foreign
currency movements related to the portion of our third party maintenance
contracts denominated in euros and an increase in heavy maintenance
activities) which reduced operating income by $9.6 million,
income from continuing operations by $6.9 million and diluted earnings per
share by $0.20.
|
·
|
The
restructuring of our ownership interests in affiliates in Mexico, part of
our Latin America business unit, which resulted in several changes
effective April 1, 2008, which increased operating income by $0.8 million,
income from continuing operations by $3.7 million and diluted earnings per
share by $0.11.
|
Three
Months Ended
|
Six
Months Ended
|
|||||||||||||||
September
30,
|
September
30,
|
|||||||||||||||
2007
|
2008
|
2007
|
2008
|
|||||||||||||
Flight
hours (excludes Bristow Academy and unconsolidated
affiliates):
|
||||||||||||||||
U.S. Gulf
of Mexico
|
36,621
|
34,891
|
74,489
|
72,530
|
||||||||||||
Arctic
|
3,002
|
3,695
|
5,405
|
6,132
|
||||||||||||
Latin
America
|
10,810
|
10,938
|
22,177
|
20,002
|
||||||||||||
Europe
|
11,494
|
10,265
|
22,315
|
20,571
|
||||||||||||
West
Africa
|
9,887
|
9,647
|
18,785
|
19,245
|
||||||||||||
Southeast
Asia
|
3,644
|
4,841
|
6,988
|
9,723
|
||||||||||||
Other
International
|
2,177
|
1,823
|
4,724
|
3,876
|
||||||||||||
Consolidated
total
|
77,635
|
76,100
|
154,883
|
152,079
|
Three
Months Ended
|
Six
Months Ended
|
|||||||||||||||
September
30,
|
September
30,
|
|||||||||||||||
2007
|
2008
|
2007
|
2008
|
|||||||||||||
(In
thousands)
|
||||||||||||||||
Gross
revenue:
|
||||||||||||||||
U.S. Gulf
of Mexico
|
$
|
55,948
|
$
|
62,491
|
$
|
111,376
|
$
|
124,000
|
||||||||
Arctic
|
5,290
|
6,840
|
9,647
|
11,083
|
||||||||||||
Latin
America
|
16,951
|
19,051
|
32,987
|
39,257
|
||||||||||||
WH
Centralized Operations
|
821
|
2,909
|
1,975
|
5,169
|
||||||||||||
Europe
|
93,459
|
98,303
|
176,816
|
193,733
|
||||||||||||
West
Africa
|
45,799
|
47,010
|
79,082
|
90,310
|
||||||||||||
Southeast
Asia
|
23,858
|
33,381
|
46,350
|
70,261
|
||||||||||||
Other
International
|
12,046
|
14,215
|
23,501
|
27,236
|
||||||||||||
EH
Centralized Operations
|
5,331
|
8,128
|
12,136
|
16,965
|
||||||||||||
Bristow Academy
|
3,228
|
5,572
|
6,247
|
11,723
|
||||||||||||
Intrasegment
eliminations
|
(2,923
|
)
|
(6,208
|
)
|
(9,158
|
)
|
(13,954
|
)
|
||||||||
Corporate
|
—
|
(4
|
)
|
—
|
28
|
|||||||||||
Consolidated
total
|
$
|
259,808
|
$
|
291,688
|
$
|
490,959
|
$
|
575,811
|
Operating expense: (1)
|
||||||||||||||||
U.S. Gulf
of Mexico
|
$
|
46,268
|
$
|
54,228
|
$
|
92,597
|
$
|
107,748
|
||||||||
Arctic
|
3,850
|
4,940
|
7,532
|
8,664
|
||||||||||||
Latin
America
|
12,700
|
14,498
|
25,402
|
28,229
|
||||||||||||
WH
Centralized Operations
|
751
|
2,005
|
613
|
4,941
|
||||||||||||
Europe
|
71,564
|
76,334
|
140,346
|
154,288
|
||||||||||||
West
Africa
|
30,307
|
38,986
|
60,793
|
75,770
|
||||||||||||
Southeast
Asia
|
18,751
|
32,317
|
37,116
|
65,011
|
||||||||||||
Other
International
|
10,265
|
12,637
|
19,455
|
24,461
|
||||||||||||
EH
Centralized Operations
|
8,578
|
12,595
|
19,662
|
29,353
|
||||||||||||
Bristow Academy
|
3,619
|
5,731
|
6,729
|
11,336
|
||||||||||||
Intrasegment
eliminations
|
(2,923
|
)
|
(6,208
|
)
|
(9,158
|
)
|
(13,954
|
)
|
||||||||
Loss
(gain) on disposal of assets
|
757
|
(3,302
|
)
|
173
|
(5,967
|
)
|
||||||||||
Corporate
|
5,603
|
6,480
|
11,195
|
13,897
|
||||||||||||
Consolidated
total
|
$
|
210,090
|
$
|
251,241
|
$
|
412,455
|
$
|
503,777
|
Three
Months Ended
|
Six
Months Ended
|
|||||||||||||||
September
30,
|
September
30,
|
|||||||||||||||
2007
|
2008
|
2007
|
2008
|
|||||||||||||
(In
thousands)
|
||||||||||||||||
Operating
income:
|
||||||||||||||||
U.S. Gulf
of Mexico
|
$
|
9,680
|
$
|
8,263
|
$
|
18,779
|
$
|
16,252
|
||||||||
Arctic
|
1,440
|
1,900
|
2,115
|
2,419
|
||||||||||||
Latin
America
|
4,251
|
4,553
|
7,585
|
11,028
|
||||||||||||
WH
Centralized Operations
|
70
|
904
|
1,362
|
228
|
||||||||||||
Europe
|
21,895
|
21,969
|
36,470
|
39,445
|
||||||||||||
West
Africa
|
15,492
|
8,024
|
18,289
|
14,540
|
||||||||||||
Southeast
Asia
|
5,107
|
1,064
|
9,234
|
5,250
|
||||||||||||
Other
International
|
1,781
|
1,578
|
4,046
|
2,775
|
||||||||||||
EH
Centralized Operations
|
(3,247
|
)
|
(4,467
|
)
|
(7,526
|
)
|
(12,388
|
)
|
||||||||
Bristow Academy
|
(391
|
)
|
(159
|
)
|
(482
|
)
|
387
|
|||||||||
Gain
(loss) on disposal of assets
|
(757
|
)
|
3,302
|
(173
|
)
|
5,967
|
||||||||||
Corporate
|
(5,603
|
)
|
(6,484
|
)
|
(11,195
|
)
|
(13,869
|
)
|
||||||||
Consolidated
operating income
|
49,718
|
40,447
|
78,504
|
72,034
|
||||||||||||
Earnings
from unconsolidated affiliates
|
4,118
|
1,971
|
7,508
|
9,694
|
||||||||||||
Interest
income
|
3,960
|
3,205
|
6,084
|
4,652
|
||||||||||||
Interest
expense
|
(6,523
|
)
|
(8,404
|
)
|
(9,451
|
)
|
(16,897
|
)
|
||||||||
Other
income (expense), net
|
360
|
2,070
|
786
|
3,762
|
||||||||||||
Income
from continuing operations before provision
for
income taxes and minority interest
|
51,633
|
39,289
|
83,431
|
73,245
|
||||||||||||
Provision
for income taxes
|
(18,294
|
)
|
(10,310
|
)
|
(27,733
|
)
|
(20,914
|
)
|
||||||||
Minority
interest
|
(4
|
)
|
(952
|
)
|
(453
|
)
|
(1,655
|
)
|
||||||||
Income
from continuing operations
|
$
|
33,335
|
$
|
28,027
|
$
|
55,245
|
$
|
50,676
|
Three
Months Ended
|
Six
Months Ended
|
||||||||||||
September
30,
|
September
30
|
||||||||||||
2007
|
2008
|
2007
|
2008
|
||||||||||
Operating
margin: (2)
|
|||||||||||||
U.S. Gulf
of Mexico
|
17.3
|
%
|
13.2
|
%
|
16.9
|
%
|
13.1
|
%
|
|||||
Arctic
|
27.2
|
%
|
27.8
|
%
|
21.9
|
%
|
21.8
|
%
|
|||||
Latin
America
|
25.1
|
%
|
23.9
|
%
|
23.0
|
%
|
28.1
|
%
|
|||||
Europe
|
23.4
|
%
|
22.3
|
%
|
20.6
|
%
|
20.4
|
%
|
|||||
West
Africa
|
33.8
|
%
|
17.1
|
%
|
23.1
|
%
|
16.1
|
%
|
|||||
Southeast
Asia
|
21.4
|
%
|
3.2
|
%
|
19.9
|
%
|
7.5
|
%
|
|||||
Other
International
|
14.8
|
%
|
11.1
|
%
|
17.2
|
%
|
10.2
|
%
|
|||||
Bristow Academy
|
(12.1
|
)%
|
(2.9
|
)%
|
(7.7
|
)%
|
3.3
|
%
|
|||||
Consolidated
total
|
19.1
|
%
|
13.9
|
%
|
16.0
|
%
|
12.5
|
%
|
(1)
|
Operating
expenses include depreciation and amortization in the following amounts
for the periods presented:
|
Three
Months Ended
|
Six
Months Ended
|
|||||||||||||||
September
30,
|
September
30,
|
|||||||||||||||
2007
|
2008
|
2007
|
2008
|
|||||||||||||
(In
thousands)
|
||||||||||||||||
U.S. Gulf
of Mexico
|
$
|
2,652
|
$
|
2,945
|
$
|
5,407
|
$
|
5,902
|
||||||||
Arctic
|
163
|
202
|
327
|
426
|
||||||||||||
Latin
America
|
965
|
2,024
|
1,914
|
3,954
|
||||||||||||
WH
Centralized Operations
|
135
|
125
|
272
|
249
|
||||||||||||
Europe
|
4,201
|
5,021
|
7,617
|
9,900
|
||||||||||||
West
Africa
|
1,988
|
2,003
|
3,588
|
4,056
|
||||||||||||
Southeast
Asia
|
866
|
1,691
|
1,671
|
3,128
|
||||||||||||
Other
International
|
767
|
696
|
1,496
|
1,397
|
||||||||||||
EH
Centralized Operations
|
279
|
152
|
608
|
302
|
||||||||||||
Bristow Academy
|
264
|
518
|
640
|
929
|
||||||||||||
Corporate
|
71
|
108
|
142
|
197
|
||||||||||||
Consolidated
total
|
$
|
12,351
|
$
|
15,485
|
$
|
23,682
|
$
|
30,440
|
(2)
|
Operating
margin is calculated as gross revenues less operating expenses divided by
gross revenues.
|
·
|
Salary,
maintenance and other costs incurred on aircraft that were not fully
operational for the Current Quarter as a result of delays in planned
contracts, unscheduled maintenance and re-positioning of
aircraft.
|
·
|
Increased
compensation costs resulting from the completion of negotiations on the
collective bargaining agreement with the pilot’s union in Australia in
April 2008.
|
·
|
Increased
fuel prices.
|
·
|
Exchange
rate changes.
|
·
|
$1.8
million of expense related to additional employee and expatriate taxes
related to prior periods resulting from clarification of tax regulations
in certain
jurisdictions.
|
·
|
Salary,
maintenance and other costs incurred on aircraft that were not fully
operational during the Current Period as a result of delays in planned
contracts, unscheduled maintenance and re-positioning of
aircraft.
|
·
|
Increased
compensation costs resulting from the completion of negotiations on the
collective bargaining agreement with the pilot’s union in Australia in
April 2008.
|
·
|
Increased
fuel prices.
|
·
|
Exchange
rate changes.
|
·
|
$2.2
million of expense related to additional employee and expatriate taxes
related to prior periods resulting from clarification of tax regulations
in certain jurisdictions.
|
Six
Months Ended
September
30,
|
||||||
2007
|
2008
|
|||||
Number
of aircraft delivered:
|
||||||
Small
|
2
|
3
|
||||
Medium
|
10
|
7
|
||||
Large
|
2
|
3
|
||||
Fixed
wing
|
1
|
—
|
||||
Training
|
2
|
4
|
||||
Total
aircraft
|
17
|
17
|
||||
Capital
expenditures (in thousands):
|
||||||
Aircraft
and related equipment
|
$
|
213,552
|
$
|
274,337
|
||
Other
|
7,543
|
4,206
|
||||
Total
capital expenditures
|
$
|
221,095
|
$
|
278,543
|
Payments
Due by Period
|
||||||||||||||||||||||||
Six
Months
Ending
|
Fiscal
Year Ending March 31,
|
|||||||||||||||||||||||
Total
|
March
31,
2009
|
2010
–
2011
|
2012
–
2013
|
2014
and
beyond
|
Other
|
|||||||||||||||||||
(In
thousands)
|
||||||||||||||||||||||||
Contractual
obligations:
|
||||||||||||||||||||||||
Long-term
debt and short-term borrowings:
|
||||||||||||||||||||||||
Principal (1)
|
$
|
730,344
|
$
|
3,383
|
$
|
7,281
|
$
|
7,186
|
$
|
712,494
|
$
|
—
|
||||||||||||
Interest
|
420,210
|
22,867
|
90,989
|
90,104
|
216,250
|
—
|
||||||||||||||||||
Aircraft
operating leases (2)
|
67,566
|
2,857
|
9,525
|
8,400
|
46,784
|
—
|
||||||||||||||||||
Other
operating leases (3)
|
17,999
|
1,890
|
6,391
|
4,719
|
4,999
|
—
|
||||||||||||||||||
Pension
obligations (4)
|
141,126
|
6,523
|
26,092
|
20,473
|
88,038
|
—
|
||||||||||||||||||
Aircraft
purchase obligations (5)
|
379,948
|
149,126
|
219,275
|
11,547
|
—
|
—
|
||||||||||||||||||
Other
purchase obligations (6)
|
35,149
|
33,122
|
2,027
|
—
|
—
|
—
|
||||||||||||||||||
Tax
reserves (7)
|
3,982
|
—
|
—
|
—
|
—
|
3,982
|
||||||||||||||||||
Total
contractual cash obligations
|
$
|
1,796,324
|
$
|
219,768
|
$
|
361,580
|
$
|
142,429
|
$
|
1,068,565
|
$
|
3,982
|
||||||||||||
Other
commercial commitments:
|
||||||||||||||||||||||||
Debt
guarantees (8)
|
$
|
17,821
|
$
|
—
|
$
|
—
|
$
|
17,821
|
$
|
—
|
$
|
—
|
||||||||||||
Other
guarantees (9)
|
38,887
|
1,378
|
5,903
|
2,217
|
29,389
|
—
|
||||||||||||||||||
Letters
of credit
|
1,391
|
1,158
|
233
|
—
|
—
|
—
|
||||||||||||||||||
Total
commercial commitments
|
$
|
58,099
|
$
|
2,536
|
$
|
6,136
|
$
|
20,038
|
$
|
29,389
|
$
|
—
|
(1)
|
Excludes
unamortized premium on the 7½% Senior Notes of $0.6
million.
|
(2)
|
Primarily
represents separate operating leases for nine aircraft with a subsidiary
of General Electric Capital Corporation with terms of fifteen years
expiring in August 2023. See Note 7 in the “Notes to Condensed
Consolidated Financial Statements” included elsewhere in this Quarterly
Report.
|
(3)
|
Represents
minimum rental payments required under non-cancelable operating
leases that have initial lease terms in excess of one
year.
|
(4)
|
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 10 years. As of September
30, 2008, we had recorded on our balance sheet a $117.6 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.
|
(5)
|
For
further details on our aircraft purchase obligations, see Note 7 in the
“Notes to Condensed Consolidated Financial Statements” included elsewhere
in this Quarterly Report.
|
(6)
|
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
7 in the “Notes to Condensed Consolidated Financial Statements” included
elsewhere in this Quarterly Report).
|
(7)
|
Represents
gross unrecognized tax benefits (see discussion in Note 7 in the “Notes to
Consolidated Financial Statements” included in the fiscal year 2008 Annual
Report) that may
result in cash payments being made to certain tax
authorities. We are not able to reasonably estimate in which
future periods this amount will ultimately be settled and
paid.
|
(8)
|
We
have guaranteed the repayment of up to £10 million ($17.8 million) of the
debt of FBS, an unconsolidated affiliate. This amount is not
included in the “Contractual Obligations” section of the table
above.
|
(9)
|
Relates
to an indemnity agreement between us and Afianzadora Sofimex, S.A. to
support issuance of surety bonds on behalf of HC from time to
time. As of September 30, 2008, surety bonds denominated in
Mexican pesos with an aggregate value of 408.6 million Mexican pesos
($37.7 million) and surety bonds denominated in U.S. dollars with an
aggregate value of $1.2 million were outstanding.
|
Exhibit
Number
|
Description
of Exhibit
|
10.1†
|
Form
of Outside Director Restricted Stock Unit Award Letter under the Bristow
Group Inc. 2007 Long Term Incentive Plan (filed as exhibit 10.1 to Current
Report on Form 8-K of Bristow Group Inc. (Commission File No.1 – 31617)
filed on August 8, 2008).
|
Amendment
to Form of Aircraft Lease agreement between CFS Air, LLC and Air
Logistics, L.L.C.
|
|
Letter
from KPMG LLP dated November 5, 2008, regarding unaudited interim
information.
|
|
Rule
13a-14(a) Certification by President and Chief Executive Officer of
Registrant.
|
|
Rule
13a-14(a) Certification by Executive Vice President and Chief Financial
Officer of Registrant.
|
|
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.
|
|
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.
|
†
|
Compensatory
plan or agreement.
|
Exhibit
Number
|
Description
of Exhibit
|
10.1†
|
Form
of Outside Director Restricted Stock Unit Award Letter under the Bristow
Group Inc. 2007 Long Term Incentive Plan (filed as exhibit 10.1 to Current
Report on Form 8-K of Bristow Group Inc. (Commission File No.1 – 31617)
filed on August 8, 2008).
|
Amendment
to Form of Aircraft Lease agreement between CFS Air, LLC and Air
Logistics, L.L.C.
|
|
Letter
from KPMG LLP dated November 5, 2008, regarding unaudited interim
information.
|
|
Rule
13a-14(a) Certification by President and Chief Executive Officer of
Registrant.
|
|
Rule
13a-14(a) Certification by Executive Vice President and Chief Financial
Officer of Registrant.
|
|
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.
|
|
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.
|
†
|
Compensatory
plan or agreement.
|