ý
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
|
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72-1455213
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(State or Other Jurisdiction of
Incorporation or Organization)
|
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(IRS Employer
Identification No.)
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818 Town & Country Blvd., Suite 200
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Houston, Texas
|
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77024
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(Address of Principal Executive Offices)
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(Zip Code)
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Large accelerated filer
¨
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Accelerated filer
ý
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Non-accelerated filer
¨
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Smaller reporting company
¨ |
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Emerging growth company
ý
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Part I.
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Item 1.
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Item 2.
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Item 3.
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Item 4.
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Part II.
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Item 1A.
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Item 2.
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Item 6.
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ITEM 1.
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FINANCIAL STATEMENTS
|
ERA GROUP INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)
|
|||||||
|
September 30,
2018 |
|
December 31,
2017 |
||||
|
(unaudited)
|
|
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
(including $1,007 and $1,699 from VIEs in 2018 and 2017, respectively)
(1)
|
$
|
47,631
|
|
|
$
|
13,583
|
|
Receivables:
|
|
|
|
||||
Trade, operating, net of allowance for doubtful accounts of $854 and $1,196 in 2018 and 2017, respectively
(including $5,834 and $5,854 from VIEs in 2018 and 2017, respectively)
|
35,655
|
|
|
33,840
|
|
||
Trade, dry-leasing
|
3,833
|
|
|
5,124
|
|
||
Tax receivables
(including $3,117 and $2,828 from VIEs in 2018 and 2017, respectively)
|
3,117
|
|
|
2,829
|
|
||
Other
(including $51 and $257 from VIEs in 2018 and 2017, respectively)
|
2,701
|
|
|
1,623
|
|
||
Inventories, net
(including $31 and $39 from VIEs in 2018 and 2017, respectively)
|
20,157
|
|
|
21,112
|
|
||
Prepaid expenses
(including $130 and $40 from VIEs in 2018 and 2017, respectively)
|
2,367
|
|
|
1,203
|
|
||
Escrow deposits
|
—
|
|
|
3,250
|
|
||
Total current assets
|
115,461
|
|
|
82,564
|
|
||
Property and equipment
(including $2,477 and $1,951 from VIEs in 2018 and 2017, respectively)
|
927,477
|
|
|
972,942
|
|
||
Accumulated depreciation
(including $443 and $487 from VIEs in 2018 and 2017, respectively)
|
(314,736
|
)
|
|
(299,028
|
)
|
||
Property and equipment, net
|
612,741
|
|
|
673,914
|
|
||
Equity investments and advances
|
26,600
|
|
|
30,056
|
|
||
Intangible assets
|
1,111
|
|
|
1,122
|
|
||
Other assets
(including $84 and $61 from VIEs in 2018 and 2017, respectively)
|
18,421
|
|
|
4,441
|
|
||
Total assets
|
$
|
774,334
|
|
|
$
|
792,097
|
|
LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST
AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable and accrued expenses
(including $1,519 and $1,807 from VIEs in 2018 and 2017, respectively)
|
$
|
10,438
|
|
|
$
|
16,421
|
|
Accrued wages and benefits
(including $1,541 and $1,397 from VIEs in 2018 and 2017, respectively)
|
8,605
|
|
|
8,264
|
|
||
Accrued interest
|
3,404
|
|
|
606
|
|
||
Accrued income taxes
|
2,993
|
|
|
28
|
|
||
Accrued other taxes
(including $361 and $600 from VIEs in 2018 and 2017, respectively)
|
2,396
|
|
|
1,810
|
|
||
Accrued contingencies
(including $1,014 and $858 from VIEs in 2018 and 2017, respectively)
|
1,014
|
|
|
859
|
|
||
Current portion of long-term debt
(including $495 and $1,073 from VIEs in 2018 and 2017, respectively)
|
2,158
|
|
|
2,736
|
|
||
Other current liabilities
(including $0 and $8 from VIEs in 2018 and 2017, respectively)
|
1,033
|
|
|
1,720
|
|
||
Total current liabilities
|
32,041
|
|
|
32,444
|
|
||
Long-term debt
(including $0 and $1,903 from VIEs in 2018 and 2017, respectively)
|
160,476
|
|
|
202,174
|
|
||
Deferred income taxes
|
108,138
|
|
|
106,598
|
|
||
Other liabilities
|
1,753
|
|
|
1,434
|
|
||
Total liabilities
|
302,408
|
|
|
342,650
|
|
||
Commitments and contingencies (see Note 8)
|
|
|
|
||||
Redeemable noncontrolling interest
|
3,456
|
|
|
3,766
|
|
||
Equity:
|
|
|
|
||||
Era Group Inc. stockholders’ equity:
|
|
|
|
||||
Common stock, $0.01 par value, 60,000,000 shares authorized; 21,761,823 and 21,319,150 outstanding in 2018 and 2017, respectively, exclusive of treasury shares
|
219
|
|
|
215
|
|
||
Additional paid-in capital
|
447,013
|
|
|
443,944
|
|
||
Retained earnings
|
24,079
|
|
|
4,363
|
|
||
Treasury shares, at cost; 215,141 shares in 2018 and 2017
|
(2,951
|
)
|
|
(2,951
|
)
|
||
Accumulated other comprehensive income, net of tax
|
110
|
|
|
110
|
|
||
Total equity
|
468,470
|
|
|
445,681
|
|
||
Total liabilities, redeemable noncontrolling interest and stockholders’ equity
|
$
|
774,334
|
|
|
$
|
792,097
|
|
ERA GROUP INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, in thousands, except share and per share amounts)
|
|||||||||||||||
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Operating revenues
|
$
|
51,894
|
|
|
$
|
58,753
|
|
|
$
|
161,116
|
|
|
$
|
161,077
|
|
Dry-leasing revenues
|
2,716
|
|
|
2,632
|
|
|
8,544
|
|
|
12,713
|
|
||||
Total revenues
|
54,610
|
|
|
61,385
|
|
|
169,660
|
|
|
173,790
|
|
||||
Costs and expenses:
|
|
|
|
|
|
|
|
||||||||
Operating
|
36,513
|
|
|
43,987
|
|
|
114,505
|
|
|
123,079
|
|
||||
Administrative and general
|
8,837
|
|
|
10,928
|
|
|
35,714
|
|
|
31,211
|
|
||||
Depreciation and amortization
|
9,541
|
|
|
12,103
|
|
|
30,011
|
|
|
35,635
|
|
||||
Total costs and expenses
|
54,891
|
|
|
67,018
|
|
|
180,230
|
|
|
189,925
|
|
||||
Gains (losses) on asset dispositions, net
|
(148
|
)
|
|
(122
|
)
|
|
2,269
|
|
|
5,048
|
|
||||
Litigation settlement proceeds
|
42,000
|
|
|
—
|
|
|
42,000
|
|
|
—
|
|
||||
Loss on impairment
|
—
|
|
|
(117,018
|
)
|
|
—
|
|
|
(117,018
|
)
|
||||
Operating income (loss)
|
41,571
|
|
|
(122,773
|
)
|
|
33,699
|
|
|
(128,105
|
)
|
||||
Other income (expense):
|
|
|
|
|
|
|
|
||||||||
Interest income
|
732
|
|
|
206
|
|
|
1,224
|
|
|
641
|
|
||||
Interest expense
|
(3,549
|
)
|
|
(4,097
|
)
|
|
(11,646
|
)
|
|
(11,620
|
)
|
||||
Foreign currency gains (losses), net
|
(94
|
)
|
|
12
|
|
|
(1,095
|
)
|
|
(96
|
)
|
||||
Gain on debt extinguishment
|
—
|
|
|
—
|
|
|
175
|
|
|
—
|
|
||||
Other, net
|
15
|
|
|
(33
|
)
|
|
21
|
|
|
(29
|
)
|
||||
Total other income (expense)
|
(2,896
|
)
|
|
(3,912
|
)
|
|
(11,321
|
)
|
|
(11,104
|
)
|
||||
Income (loss) before income taxes and equity earnings
|
38,675
|
|
|
(126,685
|
)
|
|
22,378
|
|
|
(139,209
|
)
|
||||
Income tax expense (benefit)
|
7,861
|
|
|
(45,237
|
)
|
|
4,549
|
|
|
(48,066
|
)
|
||||
Income (loss) before equity earnings
|
30,814
|
|
|
(81,448
|
)
|
|
17,829
|
|
|
(91,143
|
)
|
||||
Equity earnings, net of tax
|
465
|
|
|
233
|
|
|
1,577
|
|
|
1,069
|
|
||||
Net income (loss)
|
31,279
|
|
|
(81,215
|
)
|
|
19,406
|
|
|
(90,074
|
)
|
||||
Net loss (income) attributable to noncontrolling interest in subsidiary
|
10
|
|
|
(233
|
)
|
|
310
|
|
|
219
|
|
||||
Net income (loss) attributable to Era Group Inc.
|
$
|
31,289
|
|
|
$
|
(81,448
|
)
|
|
$
|
19,716
|
|
|
$
|
(89,855
|
)
|
|
|
|
|
|
|
|
|
||||||||
Income (loss) per common share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
1.44
|
|
|
$
|
(3.91
|
)
|
|
$
|
0.91
|
|
|
$
|
(4.34
|
)
|
Diluted
|
$
|
1.44
|
|
|
$
|
(3.91
|
)
|
|
$
|
0.91
|
|
|
$
|
(4.34
|
)
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic
|
21,215,576
|
|
|
20,844,376
|
|
|
21,139,212
|
|
|
20,715,686
|
|
||||
Diluted
|
21,239,189
|
|
|
20,844,376
|
|
|
21,156,466
|
|
|
20,715,686
|
|
ERA GROUP INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(unaudited, in thousands)
|
||||||||||||||||
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net income (loss)
|
|
$
|
31,279
|
|
|
$
|
(81,215
|
)
|
|
$
|
19,406
|
|
|
$
|
(90,074
|
)
|
Other comprehensive loss:
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
(2
|
)
|
||||
Total other comprehensive loss
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|
(2
|
)
|
||||
Comprehensive income (loss)
|
|
31,279
|
|
|
(81,215
|
)
|
|
19,401
|
|
|
(90,076
|
)
|
||||
Comprehensive loss (income) attributable to noncontrolling interest in subsidiary
|
|
10
|
|
|
(233
|
)
|
|
310
|
|
|
219
|
|
||||
Comprehensive income (loss) attributable to Era Group Inc.
|
|
$
|
31,289
|
|
|
$
|
(81,448
|
)
|
|
$
|
19,711
|
|
|
$
|
(89,857
|
)
|
ERA GROUP INC.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN REDEEMABLE NONCONTROLLING INTEREST AND EQUITY
(unaudited, in thousands)
|
|||||||||||||||||||||||||||||
Three Months Ended September 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
|
|
|
Era Group Inc. Stockholders’ Equity
|
||||||||||||||||||||||||
|
|
Redeemable Noncontrolling Interest
|
|
|
Common
Stock |
|
Additional
Paid-In Capital |
|
Retained Earnings
|
|
Treasury
Shares |
|
Accumulated
Other Comprehensive Income |
|
Total
Equity |
||||||||||||||
June 30, 2018
|
|
$
|
3,466
|
|
|
|
$
|
219
|
|
|
$
|
445,885
|
|
|
$
|
(7,210
|
)
|
|
$
|
(2,951
|
)
|
|
$
|
105
|
|
|
$
|
436,048
|
|
Issuance of common stock:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Employee Stock Purchase Plan
|
|
—
|
|
|
|
—
|
|
|
409
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
409
|
|
|||||||
Share award amortization
|
|
—
|
|
|
|
—
|
|
|
719
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
719
|
|
|||||||
Net income
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
31,279
|
|
|
—
|
|
|
—
|
|
|
31,279
|
|
|||||||
Net loss attributable to redeemable noncontrolling interest
|
|
(10
|
)
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|||||||
Currency translation adjustments, net of tax
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
5
|
|
|||||||
September 30, 2018
|
|
$
|
3,456
|
|
|
|
$
|
219
|
|
|
$
|
447,013
|
|
|
$
|
24,079
|
|
|
$
|
(2,951
|
)
|
|
$
|
110
|
|
|
$
|
468,470
|
|
Three Months Ended September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
|
|
|
Era Group Inc. Stockholders’ Equity
|
||||||||||||||||||||||||
|
|
Redeemable Noncontrolling Interest
|
|
|
Common
Stock |
|
Additional
Paid-In Capital |
|
Retained Earnings
|
|
Treasury
Shares |
|
Accumulated
Other Comprehensive Income |
|
Total
Equity |
||||||||||||||
June 30, 2017
|
|
$
|
3,769
|
|
|
|
$
|
215
|
|
|
$
|
441,595
|
|
|
$
|
24,117
|
|
|
$
|
(2,968
|
)
|
|
$
|
90
|
|
|
$
|
463,049
|
|
Issuance of common stock:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Employee Stock Purchase Plan
|
|
—
|
|
|
|
—
|
|
|
373
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
373
|
|
|||||||
Share award amortization
|
|
—
|
|
|
|
—
|
|
|
975
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
975
|
|
|||||||
Cancellation of restricted stock
|
|
—
|
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|||||||
Net loss
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
(81,215
|
)
|
|
(1
|
)
|
|
—
|
|
|
(81,216
|
)
|
|||||||
Net income attributable to redeemable noncontrolling interest
|
|
233
|
|
|
|
—
|
|
|
—
|
|
|
(233
|
)
|
|
—
|
|
|
—
|
|
|
(233
|
)
|
|||||||
September 30, 2017
|
|
$
|
4,002
|
|
|
|
$
|
215
|
|
|
$
|
442,948
|
|
|
$
|
(57,331
|
)
|
|
$
|
(2,974
|
)
|
|
$
|
90
|
|
|
$
|
382,948
|
|
Nine Months Ended September 30, 2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
|
|
|
Era Group Inc. Stockholders’ Equity
|
||||||||||||||||||||||||
|
|
Redeemable Noncontrolling Interest
|
|
|
Common
Stock
|
|
Additional
Paid-In
Capital
|
|
Retained Earnings
|
|
Treasury
Shares
|
|
Accumulated
Other
Comprehensive
Income
|
|
Total
Equity
|
||||||||||||||
December 31, 2017
|
|
$
|
3,766
|
|
|
|
$
|
215
|
|
|
$
|
443,944
|
|
|
$
|
4,363
|
|
|
$
|
(2,951
|
)
|
|
$
|
110
|
|
|
$
|
445,681
|
|
Issuance of common stock:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Restricted stock grants
|
|
—
|
|
|
|
3
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Employee Stock Purchase Plan
|
|
—
|
|
|
|
1
|
|
|
892
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
893
|
|
|||||||
Share award amortization
|
|
—
|
|
|
|
—
|
|
|
2,180
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,180
|
|
|||||||
Net income (loss)
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
19,406
|
|
|
—
|
|
|
—
|
|
|
19,406
|
|
|||||||
Net loss attributable to redeemable noncontrolling interest
|
|
(310
|
)
|
|
|
—
|
|
|
—
|
|
|
310
|
|
|
—
|
|
|
—
|
|
|
310
|
|
|||||||
September 30, 2018
|
|
$
|
3,456
|
|
|
|
$
|
219
|
|
|
$
|
447,013
|
|
|
$
|
24,079
|
|
|
$
|
(2,951
|
)
|
|
$
|
110
|
|
|
$
|
468,470
|
|
Nine Months Ended September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
|
|
|
Era Group Inc. Stockholders’ Equity
|
||||||||||||||||||||||||
|
|
Redeemable Noncontrolling Interest
|
|
|
Common
Stock |
|
Additional
Paid-In Capital |
|
Retained Earnings
|
|
Treasury
Shares |
|
Accumulated
Other Comprehensive Income |
|
Total
Equity |
||||||||||||||
December 31, 2016
|
|
$
|
4,221
|
|
|
|
$
|
211
|
|
|
$
|
438,489
|
|
|
$
|
32,524
|
|
|
$
|
(2,899
|
)
|
|
$
|
92
|
|
|
$
|
468,417
|
|
Issuance of common stock:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Restricted stock grants
|
|
—
|
|
|
|
3
|
|
|
(3
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Employee Stock Purchase Plan
|
|
—
|
|
|
|
1
|
|
|
835
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
836
|
|
|||||||
Share award amortization
|
|
—
|
|
|
|
—
|
|
|
3,604
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3,604
|
|
|||||||
Cancellation of restricted stock
|
|
—
|
|
|
|
—
|
|
|
23
|
|
|
—
|
|
|
(23
|
)
|
|
—
|
|
|
—
|
|
|||||||
Purchase of treasury shares
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(52
|
)
|
|
—
|
|
|
(52
|
)
|
|||||||
Net loss
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
(90,074
|
)
|
|
—
|
|
|
—
|
|
|
(90,074
|
)
|
|||||||
Net loss attributable to redeemable noncontrolling interest
|
|
(219
|
)
|
|
|
—
|
|
|
—
|
|
|
219
|
|
|
—
|
|
|
—
|
|
|
219
|
|
|||||||
Currency translation adjustments, net of tax
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
(2
|
)
|
|||||||
September 30, 2017
|
|
$
|
4,002
|
|
|
|
$
|
215
|
|
|
$
|
442,948
|
|
|
$
|
(57,331
|
)
|
|
$
|
(2,974
|
)
|
|
$
|
90
|
|
|
$
|
382,948
|
|
ERA GROUP INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited, in thousands)
|
|||||||
|
Nine Months Ended
September 30, |
||||||
|
2018
|
|
2017
|
||||
Cash flows from operating activities:
|
|
|
|
||||
Net income (loss)
|
$
|
19,406
|
|
|
$
|
(90,074
|
)
|
Adjustments to reconcile net loss to net cash provided by operating activities:
|
|
|
|
||||
Depreciation and amortization
|
30,011
|
|
|
35,635
|
|
||
Share-based compensation
|
2,180
|
|
|
3,604
|
|
||
Bad debt expense, net
|
—
|
|
|
47
|
|
||
Interest income
|
(614
|
)
|
|
—
|
|
||
Non-cash penalty and interest expenses
|
607
|
|
|
—
|
|
||
Gains on asset dispositions, net
|
(2,269
|
)
|
|
(5,048
|
)
|
||
Debt discount amortization
|
188
|
|
|
174
|
|
||
Amortization of deferred financing costs
|
1,173
|
|
|
850
|
|
||
Foreign currency losses, net
|
1,097
|
|
|
47
|
|
||
Gain on debt extinguishment, net
|
(175
|
)
|
|
—
|
|
||
Loss on impairment
|
—
|
|
|
117,018
|
|
||
Deferred income tax benefit
|
1,541
|
|
|
(48,057
|
)
|
||
Equity earnings, net of tax
|
(1,577
|
)
|
|
(1,069
|
)
|
||
Changes in operating assets and liabilities:
|
|
|
|
||||
Increase in receivables
|
(2,390
|
)
|
|
(5,107
|
)
|
||
Decrease in prepaid expenses and other assets
|
393
|
|
|
828
|
|
||
Increase in accounts payable, accrued expenses and other liabilities
|
781
|
|
|
9,080
|
|
||
Net cash provided by operating activities
|
50,352
|
|
|
17,928
|
|
||
Cash flows from investing activities:
|
|
|
|
||||
Purchases of property and equipment
|
(7,686
|
)
|
|
(13,121
|
)
|
||
Proceeds from disposition of property and equipment
|
29,520
|
|
|
5,690
|
|
||
Investments in and advances to equity investees
|
—
|
|
|
(126
|
)
|
||
Dividends received from equity investees
|
1,000
|
|
|
—
|
|
||
Principal payments on notes due from equity investees
|
401
|
|
|
564
|
|
||
Principal payments on third party notes receivable
|
620
|
|
|
94
|
|
||
Net cash provided by (used in) investing activities
|
23,855
|
|
|
(6,899
|
)
|
||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from Revolving Credit Facility
|
—
|
|
|
9,000
|
|
||
Long-term debt issuance costs
|
(1,295
|
)
|
|
—
|
|
||
Payments on long-term debt
|
(42,562
|
)
|
|
(24,745
|
)
|
||
Proceeds from share award plans
|
893
|
|
|
836
|
|
||
Purchase of treasury shares
|
—
|
|
|
(52
|
)
|
||
Net cash used in financing activities
|
(42,964
|
)
|
|
(14,961
|
)
|
||
Effects of exchange rate changes on cash and cash equivalents
|
(445
|
)
|
|
101
|
|
||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
30,798
|
|
|
(3,831
|
)
|
||
Cash, cash equivalents and restricted cash, beginning of period
|
16,833
|
|
|
30,727
|
|
||
Cash, cash equivalents and restricted cash, end of period
|
$
|
47,631
|
|
|
$
|
26,896
|
|
Supplemental cash flow information:
|
|
|
|
||||
Cash paid for interest
|
$
|
7,867
|
|
|
$
|
8,249
|
|
Interest capitalized during the period
|
$
|
97
|
|
|
$
|
451
|
|
Interest, net of amounts capitalized
|
$
|
7,770
|
|
|
$
|
7,798
|
|
Cash paid for income taxes
|
63
|
|
|
427
|
|
1
.
|
BASIS OF PRESENTATION AND ACCOUNTING POLICY
|
|
September 30, 2018
|
|
December 31, 2017
|
|
September 30, 2017
|
|
December 31, 2016
|
||||||||
Cash and cash equivalents
|
$
|
47,631
|
|
|
$
|
13,583
|
|
|
$
|
26,896
|
|
|
$
|
26,950
|
|
Restricted cash
(1)
|
—
|
|
|
3,250
|
|
|
—
|
|
|
3,777
|
|
||||
Total cash, cash equivalents and restricted cash shown in the Consolidated Statement of Cash Flows
|
$
|
47,631
|
|
|
$
|
16,833
|
|
|
$
|
26,896
|
|
|
$
|
30,727
|
|
2
.
|
FAIR VALUE MEASUREMENTS
|
3
.
|
ESCROW DEPOSITS
|
4
.
|
ACQUISITIONS AND DISPOSITIONS
|
5
.
|
VARIABLE INTEREST ENTITIES
|
6
.
|
INCOME TAXES
|
7
.
|
LONG-TERM DEBT
|
|
|
September 30, 2018
|
|
December 31, 2017
|
||||
7.750% Senior Notes (excluding unamortized discount)
|
|
$
|
144,828
|
|
|
$
|
144,828
|
|
Senior secured revolving credit facility
|
|
—
|
|
|
39,000
|
|
||
Promissory notes
|
|
20,395
|
|
|
21,642
|
|
||
Other
|
|
495
|
|
|
2,976
|
|
||
Total principal balance on borrowings
|
|
165,718
|
|
|
208,446
|
|
||
Portion due within one year
|
|
(2,158
|
)
|
|
(2,736
|
)
|
||
Unamortized debt issuance costs
|
|
(1,803
|
)
|
|
(2,067
|
)
|
||
Unamortized discount, net
|
|
(1,281
|
)
|
|
(1,469
|
)
|
||
Long-term debt
|
|
$
|
160,476
|
|
|
$
|
202,174
|
|
8
.
|
COMMITMENTS AND CONTINGENCIES
|
9
.
|
EARNINGS (LOSS) PER COMMON SHARE
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Net income (loss) attributable to Era Group Inc.
|
|
$
|
31,289
|
|
|
$
|
(81,448
|
)
|
|
$
|
19,716
|
|
|
$
|
(89,855
|
)
|
Less: Net income attributable to participating securities
|
|
714
|
|
|
—
|
|
|
425
|
|
|
—
|
|
||||
Net income (loss) attributable to fully vested common stock
|
|
$
|
30,575
|
|
|
$
|
(81,448
|
)
|
|
$
|
19,291
|
|
|
$
|
(89,855
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
21,215,576
|
|
|
20,844,376
|
|
|
21,139,212
|
|
|
20,715,686
|
|
||||
Diluted
(1)
|
|
21,239,189
|
|
|
20,844,376
|
|
|
21,156,466
|
|
|
20,715,686
|
|
||||
Income (loss) per common share:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
1.44
|
|
|
$
|
(3.91
|
)
|
|
$
|
0.91
|
|
|
$
|
(4.34
|
)
|
Diluted
|
|
$
|
1.44
|
|
|
$
|
(3.91
|
)
|
|
$
|
0.91
|
|
|
$
|
(4.34
|
)
|
(1)
|
Excludes weighted average common shares of
224,769
and
275,824
for the three months ended
September 30, 2018
and
2017
, respectively, and
223,921
and
278,740
for the nine months ended
September 30, 2018
and
2017
, respectively, for certain share awards as the effect of their inclusion would have been antidilutive.
|
10
.
|
REVENUE
S
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Operating revenues:
|
|
|
|
|
|
|
|
||||||||
United States
|
$
|
38,229
|
|
|
$
|
41,989
|
|
|
$
|
117,673
|
|
|
$
|
112,862
|
|
Foreign
|
13,665
|
|
|
16,764
|
|
|
43,443
|
|
|
48,215
|
|
||||
Total operating revenues
|
$
|
51,894
|
|
|
$
|
58,753
|
|
|
$
|
161,116
|
|
|
$
|
161,077
|
|
|
Three Months Ended
September 30, |
|
Nine Months Ended
September 30, |
||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Oil and gas flight services:
|
|
|
|
|
|
|
|
||||||||
U.S.
|
$
|
35,473
|
|
|
$
|
36,567
|
|
|
$
|
109,778
|
|
|
$
|
98,914
|
|
International
|
13,665
|
|
|
16,764
|
|
|
43,443
|
|
|
48,215
|
|
||||
Total oil and gas
|
49,138
|
|
|
53,331
|
|
|
153,221
|
|
|
147,129
|
|
||||
Emergency response services
|
2,756
|
|
|
2,487
|
|
|
7,895
|
|
|
8,877
|
|
||||
Flightseeing
|
—
|
|
|
2,935
|
|
|
—
|
|
|
5,071
|
|
||||
Total operating revenues
|
$
|
51,894
|
|
|
$
|
58,753
|
|
|
$
|
161,116
|
|
|
$
|
161,077
|
|
Dry-leasing revenues:
|
|
|
|
|
|
|
|
||||||||
U.S.
|
1,142
|
|
|
486
|
|
|
2,984
|
|
|
1,015
|
|
||||
International
|
1,574
|
|
|
2,146
|
|
|
5,560
|
|
|
11,698
|
|
||||
Total revenues
|
$
|
54,610
|
|
|
$
|
61,385
|
|
|
$
|
169,660
|
|
|
$
|
173,790
|
|
1.
|
Identify the contract with a customer;
|
2.
|
Identify the performance obligations in the contract;
|
3.
|
Determine the transaction price;
|
4.
|
Allocate the transaction price to the performance obligations; and
|
5.
|
Recognize revenue as the performance obligations are satisfied.
|
11
.
|
RELATED PARTY TRANSACTIONS
|
12
.
|
SHARE-BASED COMPENSATION
|
|
Number of Shares
|
|
Weighted Average Grant Price
|
|||
Non-vested as of December 31, 2017
|
382,873
|
|
|
$
|
12.68
|
|
Restricted stock awards granted:
|
|
|
|
|||
Non-employee directors
|
37,272
|
|
|
$
|
9.00
|
|
Employees
|
291,599
|
|
|
$
|
9.00
|
|
Vested
|
(201,059
|
)
|
|
$
|
14.05
|
|
Forfeited
|
(500
|
)
|
|
$
|
9.66
|
|
Non-vested as of September 30, 2018
|
510,185
|
|
|
$
|
9.77
|
|
13
.
|
GUARANTORS OF SECURITIES
|
|
Parent
|
|
Guarantors
|
|
Non-guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(in thousands, except share data)
|
||||||||||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
46,351
|
|
|
$
|
—
|
|
|
$
|
1,280
|
|
|
$
|
—
|
|
|
$
|
47,631
|
|
Receivables:
|
|
|
|
|
|
|
|
|
|
||||||||||
Trade, operating, net of allowance for doubtful accounts of $854
|
—
|
|
|
29,135
|
|
|
6,520
|
|
|
—
|
|
|
35,655
|
|
|||||
Trade, dry-leasing
|
—
|
|
|
3,833
|
|
|
—
|
|
|
—
|
|
|
3,833
|
|
|||||
Tax receivable
|
—
|
|
|
—
|
|
|
3,117
|
|
|
—
|
|
|
3,117
|
|
|||||
Other
|
—
|
|
|
2,154
|
|
|
547
|
|
|
—
|
|
|
2,701
|
|
|||||
Inventories, net
|
—
|
|
|
20,124
|
|
|
33
|
|
|
—
|
|
|
20,157
|
|
|||||
Prepaid expenses
|
501
|
|
|
1,560
|
|
|
306
|
|
|
—
|
|
|
2,367
|
|
|||||
Total current assets
|
46,852
|
|
|
56,806
|
|
|
11,803
|
|
|
—
|
|
|
115,461
|
|
|||||
Property and equipment
|
—
|
|
|
910,730
|
|
|
16,747
|
|
|
—
|
|
|
927,477
|
|
|||||
Accumulated depreciation
|
—
|
|
|
(311,342
|
)
|
|
(3,394
|
)
|
|
—
|
|
|
(314,736
|
)
|
|||||
Property and equipment, net
|
—
|
|
|
599,388
|
|
|
13,353
|
|
|
—
|
|
|
612,741
|
|
|||||
Equity investments and advances
|
—
|
|
|
26,600
|
|
|
—
|
|
|
—
|
|
|
26,600
|
|
|||||
Investments in consolidated subsidiaries
|
165,005
|
|
|
—
|
|
|
—
|
|
|
(165,005
|
)
|
|
—
|
|
|||||
Intangible assets
|
—
|
|
|
—
|
|
|
1,111
|
|
|
—
|
|
|
1,111
|
|
|||||
Deferred income taxes
|
21,185
|
|
|
—
|
|
|
—
|
|
|
(21,185
|
)
|
|
—
|
|
|||||
Intercompany receivables
|
375,131
|
|
|
—
|
|
|
—
|
|
|
(375,131
|
)
|
|
—
|
|
|||||
Other assets
|
1,398
|
|
|
16,939
|
|
|
84
|
|
|
—
|
|
|
18,421
|
|
|||||
Total assets
|
$
|
609,571
|
|
|
$
|
699,733
|
|
|
$
|
26,351
|
|
|
$
|
(561,321
|
)
|
|
$
|
774,334
|
|
LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable and accrued expenses
|
$
|
130
|
|
|
$
|
8,606
|
|
|
$
|
1,702
|
|
|
$
|
—
|
|
|
$
|
10,438
|
|
Accrued wages and benefits
|
—
|
|
|
7,008
|
|
|
1,597
|
|
|
—
|
|
|
8,605
|
|
|||||
Accrued interest
|
3,337
|
|
|
67
|
|
|
—
|
|
|
—
|
|
|
3,404
|
|
|||||
Accrued income taxes
|
2,970
|
|
|
—
|
|
|
23
|
|
|
—
|
|
|
2,993
|
|
|||||
Accrued other taxes
|
244
|
|
|
1,791
|
|
|
361
|
|
|
—
|
|
|
2,396
|
|
|||||
Accrued contingencies
|
—
|
|
|
—
|
|
|
1,014
|
|
|
—
|
|
|
1,014
|
|
|||||
Current portion of long-term debt
|
—
|
|
|
1,663
|
|
|
495
|
|
|
—
|
|
|
2,158
|
|
|||||
Other current liabilities
|
817
|
|
|
199
|
|
|
17
|
|
|
—
|
|
|
1,033
|
|
|||||
Total current liabilities
|
7,498
|
|
|
19,334
|
|
|
5,209
|
|
|
—
|
|
|
32,041
|
|
|||||
Long-term debt
|
133,743
|
|
|
26,733
|
|
|
—
|
|
|
—
|
|
|
160,476
|
|
|||||
Deferred income taxes
|
—
|
|
|
128,073
|
|
|
1,250
|
|
|
(21,185
|
)
|
|
108,138
|
|
|||||
Intercompany payables
|
—
|
|
|
322,117
|
|
|
53,047
|
|
|
(375,164
|
)
|
|
—
|
|
|||||
Other liabilities
|
—
|
|
|
1,753
|
|
|
—
|
|
|
—
|
|
|
1,753
|
|
|||||
Total liabilities
|
141,241
|
|
|
498,010
|
|
|
59,506
|
|
|
(396,349
|
)
|
|
302,408
|
|
|||||
Redeemable noncontrolling interest
|
—
|
|
|
3
|
|
|
3,453
|
|
|
—
|
|
|
3,456
|
|
|||||
Equity:
|
|
|
|
|
|
|
|
|
|
||||||||||
Common stock, $0.01 par value, 60,000,000 shares authorized; 21,761,823 outstanding, exclusive of treasury shares
|
219
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
219
|
|
|||||
Additional paid-in capital
|
447,014
|
|
|
100,305
|
|
|
4,562
|
|
|
(104,868
|
)
|
|
447,013
|
|
|||||
Retained earnings
|
24,048
|
|
|
101,305
|
|
|
(41,170
|
)
|
|
(60,104
|
)
|
|
24,079
|
|
|||||
Treasury shares, at cost, 215,141 shares
|
(2,951
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,951
|
)
|
|||||
Accumulated other comprehensive income, net of tax
|
|
|
|
110
|
|
|
—
|
|
|
—
|
|
|
110
|
|
|||||
Total equity
|
468,330
|
|
|
201,720
|
|
|
(36,608
|
)
|
|
(164,972
|
)
|
|
468,470
|
|
|||||
Total liabilities, redeemable noncontrolling interest and stockholders’ equity
|
$
|
609,571
|
|
|
$
|
699,733
|
|
|
$
|
26,351
|
|
|
$
|
(561,321
|
)
|
|
$
|
774,334
|
|
|
Parent
|
|
Guarantors
|
|
Non-guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(in thousands, except share data)
|
||||||||||||||||||
ASSETS
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash and cash equivalents
|
$
|
10,800
|
|
|
$
|
—
|
|
|
$
|
2,783
|
|
|
$
|
—
|
|
|
$
|
13,583
|
|
Receivables:
|
|
|
|
|
|
|
|
|
|
||||||||||
Trade, operating, net of allowance for doubtful accounts of $1,196
|
—
|
|
|
27,968
|
|
|
5,872
|
|
|
—
|
|
|
33,840
|
|
|||||
Trade, dry-leasing
|
—
|
|
|
5,124
|
|
|
—
|
|
|
—
|
|
|
5,124
|
|
|||||
Tax receivables
|
—
|
|
|
—
|
|
|
2,829
|
|
|
—
|
|
|
2,829
|
|
|||||
Other
|
—
|
|
|
1,126
|
|
|
497
|
|
|
—
|
|
|
1,623
|
|
|||||
Inventories, net
|
—
|
|
|
20,746
|
|
|
366
|
|
|
—
|
|
|
21,112
|
|
|||||
Prepaid expenses
|
349
|
|
|
721
|
|
|
133
|
|
|
—
|
|
|
1,203
|
|
|||||
Escrow deposits
|
—
|
|
|
3,250
|
|
|
—
|
|
|
—
|
|
|
3,250
|
|
|||||
Total current assets
|
11,149
|
|
|
58,935
|
|
|
12,480
|
|
|
—
|
|
|
82,564
|
|
|||||
Property and equipment
|
—
|
|
|
956,918
|
|
|
16,024
|
|
|
—
|
|
|
972,942
|
|
|||||
Accumulated depreciation
|
—
|
|
|
(296,573
|
)
|
|
(2,455
|
)
|
|
—
|
|
|
(299,028
|
)
|
|||||
Net property and equipment
|
—
|
|
|
660,345
|
|
|
13,569
|
|
|
—
|
|
|
673,914
|
|
|||||
Equity investments and advances
|
—
|
|
|
30,056
|
|
|
—
|
|
|
—
|
|
|
30,056
|
|
|||||
Investments in consolidated subsidiaries
|
161,350
|
|
|
—
|
|
|
—
|
|
|
(161,350
|
)
|
|
—
|
|
|||||
Intangible assets
|
—
|
|
|
—
|
|
|
1,122
|
|
|
—
|
|
|
1,122
|
|
|||||
Deferred income taxes
|
19,600
|
|
|
—
|
|
|
—
|
|
|
(19,600
|
)
|
|
—
|
|
|||||
Intercompany receivables
|
426,806
|
|
|
—
|
|
|
—
|
|
|
(426,806
|
)
|
|
—
|
|
|||||
Other assets
|
1,011
|
|
|
3,370
|
|
|
60
|
|
|
—
|
|
|
4,441
|
|
|||||
Total assets
|
$
|
619,916
|
|
|
$
|
752,706
|
|
|
$
|
27,231
|
|
|
$
|
(607,756
|
)
|
|
$
|
792,097
|
|
LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND STOCKHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Accounts payable and accrued expenses
|
$
|
638
|
|
|
$
|
13,655
|
|
|
$
|
2,128
|
|
|
$
|
—
|
|
|
$
|
16,421
|
|
Accrued wages and benefits
|
—
|
|
|
6,804
|
|
|
1,460
|
|
|
—
|
|
|
8,264
|
|
|||||
Accrued interest
|
549
|
|
|
57
|
|
|
—
|
|
|
—
|
|
|
606
|
|
|||||
Accrued income taxes
|
—
|
|
|
24
|
|
|
4
|
|
|
—
|
|
|
28
|
|
|||||
Accrued other taxes
|
18
|
|
|
1,192
|
|
|
600
|
|
|
—
|
|
|
1,810
|
|
|||||
Accrued contingencies
|
—
|
|
|
—
|
|
|
859
|
|
|
—
|
|
|
859
|
|
|||||
Current portion of long-term debt
|
—
|
|
|
1,663
|
|
|
1,073
|
|
|
—
|
|
|
2,736
|
|
|||||
Other current liabilities
|
848
|
|
|
835
|
|
|
37
|
|
|
—
|
|
|
1,720
|
|
|||||
Total current liabilities
|
2,053
|
|
|
24,230
|
|
|
6,161
|
|
|
—
|
|
|
32,444
|
|
|||||
Long-term debt
|
172,292
|
|
|
27,979
|
|
|
1,903
|
|
|
—
|
|
|
202,174
|
|
|||||
Deferred income taxes
|
—
|
|
|
124,948
|
|
|
1,250
|
|
|
(19,600
|
)
|
|
106,598
|
|
|||||
Intercompany payables
|
—
|
|
|
381,660
|
|
|
45,146
|
|
|
(426,806
|
)
|
|
—
|
|
|||||
Other liabilities
|
—
|
|
|
1,435
|
|
|
(1
|
)
|
|
—
|
|
|
1,434
|
|
|||||
Total liabilities
|
174,345
|
|
|
560,252
|
|
|
54,459
|
|
|
(446,406
|
)
|
|
342,650
|
|
|||||
Redeemable noncontrolling interest
|
—
|
|
|
4
|
|
|
3,762
|
|
|
—
|
|
|
3,766
|
|
|||||
Equity:
|
|
|
|
|
|
|
|
|
|
||||||||||
Common stock, $0.01 par value, 60,000,000 shares authorized; 21,319,150 shares
outstanding, exclusive of treasury shares
|
215
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
215
|
|
|||||
Additional paid-in capital
|
443,944
|
|
|
100,306
|
|
|
4,562
|
|
|
(104,868
|
)
|
|
443,944
|
|
|||||
Retained earnings
|
4,363
|
|
|
92,034
|
|
|
(35,552
|
)
|
|
(56,482
|
)
|
|
4,363
|
|
|||||
Treasury shares, at cost, 215,141 shares
|
(2,951
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,951
|
)
|
|||||
Accumulated other comprehensive income, net of tax
|
—
|
|
|
110
|
|
|
—
|
|
|
—
|
|
|
110
|
|
|||||
Total equity
|
445,571
|
|
|
192,450
|
|
|
(30,990
|
)
|
|
(161,350
|
)
|
|
445,681
|
|
|||||
Total liabilities, redeemable noncontrolling interest and stockholders’ equity
|
$
|
619,916
|
|
|
$
|
752,706
|
|
|
$
|
27,231
|
|
|
$
|
(607,756
|
)
|
|
$
|
792,097
|
|
|
Parent
|
|
Guarantors
|
|
Non-guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
Revenues
|
$
|
—
|
|
|
$
|
48,631
|
|
|
$
|
13,623
|
|
|
$
|
(7,644
|
)
|
|
$
|
54,610
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating
|
—
|
|
|
29,888
|
|
|
14,302
|
|
|
(7,677
|
)
|
|
36,513
|
|
|||||
Administrative and general
|
901
|
|
|
6,957
|
|
|
979
|
|
|
—
|
|
|
8,837
|
|
|||||
Depreciation
|
—
|
|
|
9,316
|
|
|
225
|
|
|
—
|
|
|
9,541
|
|
|||||
Total costs and expenses
|
901
|
|
|
46,161
|
|
|
15,506
|
|
|
(7,677
|
)
|
|
54,891
|
|
|||||
Losses on asset dispositions, net
|
—
|
|
|
(148
|
)
|
|
—
|
|
|
—
|
|
|
(148
|
)
|
|||||
Litigation settlement proceeds
|
42,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
42,000
|
|
|||||
Operating income (loss)
|
41,099
|
|
|
2,322
|
|
|
(1,883
|
)
|
|
33
|
|
|
41,571
|
|
|||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest income
|
171
|
|
|
448
|
|
|
113
|
|
|
—
|
|
|
732
|
|
|||||
Interest expense
|
(3,330
|
)
|
|
(204
|
)
|
|
(15
|
)
|
|
—
|
|
|
(3,549
|
)
|
|||||
Foreign currency losses, net
|
(10
|
)
|
|
(16
|
)
|
|
(68
|
)
|
|
—
|
|
|
(94
|
)
|
|||||
Other, net
|
—
|
|
|
21
|
|
|
(6
|
)
|
|
—
|
|
|
15
|
|
|||||
Total other income (expense)
|
(3,169
|
)
|
|
249
|
|
|
24
|
|
|
—
|
|
|
(2,896
|
)
|
|||||
Income (loss) before income taxes and equity earnings
|
37,930
|
|
|
2,571
|
|
|
(1,859
|
)
|
|
33
|
|
|
38,675
|
|
|||||
Income tax expense
|
3,928
|
|
|
3,933
|
|
|
—
|
|
|
—
|
|
|
7,861
|
|
|||||
Income (loss) before equity earnings
|
34,002
|
|
|
(1,362
|
)
|
|
(1,859
|
)
|
|
33
|
|
|
30,814
|
|
|||||
Equity in earnings (losses) of subsidiaries
|
(2,747
|
)
|
|
465
|
|
|
—
|
|
|
2,747
|
|
|
465
|
|
|||||
Net income (loss)
|
31,255
|
|
|
(897
|
)
|
|
(1,859
|
)
|
|
2,780
|
|
|
31,279
|
|
|||||
Net loss attributable to noncontrolling interest in subsidiary
|
—
|
|
|
—
|
|
|
10
|
|
|
—
|
|
|
10
|
|
|||||
Net income (loss) attributable to Era Group Inc.
|
$
|
31,255
|
|
|
$
|
(897
|
)
|
|
$
|
(1,849
|
)
|
|
$
|
2,780
|
|
|
$
|
31,289
|
|
|
Parent
|
|
Guarantors
|
|
Non-guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
Revenues
|
$
|
—
|
|
|
$
|
51,919
|
|
|
$
|
16,729
|
|
|
$
|
(7,263
|
)
|
|
$
|
61,385
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating
|
—
|
|
|
35,826
|
|
|
15,424
|
|
|
(7,263
|
)
|
|
43,987
|
|
|||||
Administrative and general
|
2,305
|
|
|
7,306
|
|
|
1,317
|
|
|
—
|
|
|
10,928
|
|
|||||
Depreciation
|
—
|
|
|
11,851
|
|
|
252
|
|
|
—
|
|
|
12,103
|
|
|||||
Total costs and expenses
|
2,305
|
|
|
54,983
|
|
|
16,993
|
|
|
(7,263
|
)
|
|
67,018
|
|
|||||
Gains on asset dispositions, net
|
—
|
|
|
(122
|
)
|
|
—
|
|
|
—
|
|
|
(122
|
)
|
|||||
Loss on impairment
|
—
|
|
|
(116,586
|
)
|
|
(432
|
)
|
|
—
|
|
|
(117,018
|
)
|
|||||
Operating income (loss)
|
(2,305
|
)
|
|
(119,772
|
)
|
|
(696
|
)
|
|
—
|
|
|
(122,773
|
)
|
|||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest income
|
47
|
|
|
102
|
|
|
57
|
|
|
—
|
|
|
206
|
|
|||||
Interest expense
|
(3,838
|
)
|
|
(170
|
)
|
|
(89
|
)
|
|
—
|
|
|
(4,097
|
)
|
|||||
Foreign currency gains (losses), net
|
66
|
|
|
85
|
|
|
(139
|
)
|
|
—
|
|
|
12
|
|
|||||
Other, net
|
—
|
|
|
(1
|
)
|
|
(32
|
)
|
|
—
|
|
|
(33
|
)
|
|||||
Total other income (expense)
|
(3,725
|
)
|
|
16
|
|
|
(203
|
)
|
|
—
|
|
|
(3,912
|
)
|
|||||
Income (loss) before income taxes and equity earnings
|
(6,030
|
)
|
|
(119,756
|
)
|
|
(899
|
)
|
|
—
|
|
|
(126,685
|
)
|
|||||
Income tax expense (benefit)
|
(2,114
|
)
|
|
(43,276
|
)
|
|
153
|
|
|
—
|
|
|
(45,237
|
)
|
|||||
Income (loss) before equity earnings
|
(3,916
|
)
|
|
(76,480
|
)
|
|
(1,052
|
)
|
|
—
|
|
|
(81,448
|
)
|
|||||
Equity earnings, net of tax
|
—
|
|
|
233
|
|
|
—
|
|
|
—
|
|
|
233
|
|
|||||
Equity in earnings (losses) of subsidiaries
|
(77,532
|
)
|
|
—
|
|
|
—
|
|
|
77,532
|
|
|
—
|
|
|||||
Net income (loss)
|
(81,448
|
)
|
|
(76,247
|
)
|
|
(1,052
|
)
|
|
77,532
|
|
|
(81,215
|
)
|
|||||
Net loss attributable to noncontrolling interest in subsidiary
|
—
|
|
|
—
|
|
|
(233
|
)
|
|
—
|
|
|
(233
|
)
|
|||||
Net income (loss) attributable to Era Group Inc.
|
$
|
(81,448
|
)
|
|
$
|
(76,247
|
)
|
|
$
|
(1,285
|
)
|
|
$
|
77,532
|
|
|
$
|
(81,448
|
)
|
|
Parent
|
|
Guarantors
|
|
Non-guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
Revenues
|
$
|
—
|
|
|
$
|
148,512
|
|
|
$
|
42,252
|
|
|
$
|
(21,104
|
)
|
|
$
|
169,660
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating
|
—
|
|
|
92,317
|
|
|
43,325
|
|
|
(21,137
|
)
|
|
114,505
|
|
|||||
Administrative and general
|
14,087
|
|
|
18,182
|
|
|
3,445
|
|
|
—
|
|
|
35,714
|
|
|||||
Depreciation
|
—
|
|
|
29,283
|
|
|
728
|
|
|
—
|
|
|
30,011
|
|
|||||
Total costs and expenses
|
14,087
|
|
|
139,782
|
|
|
47,498
|
|
|
(21,137
|
)
|
|
180,230
|
|
|||||
Gains on asset dispositions, net
|
—
|
|
|
2,269
|
|
|
—
|
|
|
—
|
|
|
2,269
|
|
|||||
Litigation settlement proceeds
|
42,000
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
42,000
|
|
|||||
Operating income (loss)
|
27,913
|
|
|
10,999
|
|
|
(5,246
|
)
|
|
33
|
|
|
33,699
|
|
|||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest income
|
180
|
|
|
878
|
|
|
166
|
|
|
—
|
|
|
1,224
|
|
|||||
Interest expense
|
(10,925
|
)
|
|
(595
|
)
|
|
(126
|
)
|
|
—
|
|
|
(11,646
|
)
|
|||||
Foreign currency losses, net
|
(66
|
)
|
|
(141
|
)
|
|
(888
|
)
|
|
—
|
|
|
(1,095
|
)
|
|||||
Gain on debt extinguishment
|
—
|
|
|
—
|
|
|
175
|
|
|
—
|
|
|
175
|
|
|||||
Other, net
|
—
|
|
|
31
|
|
|
(10
|
)
|
|
—
|
|
|
21
|
|
|||||
Total other income (expense)
|
(10,811
|
)
|
|
173
|
|
|
(683
|
)
|
|
—
|
|
|
(11,321
|
)
|
|||||
Income (loss) before income taxes and equity earnings
|
17,102
|
|
|
11,172
|
|
|
(5,929
|
)
|
|
33
|
|
|
22,378
|
|
|||||
Income tax expense
|
1,075
|
|
|
3,474
|
|
|
—
|
|
|
—
|
|
|
4,549
|
|
|||||
Income (loss) before equity earnings
|
16,027
|
|
|
7,698
|
|
|
(5,929
|
)
|
|
33
|
|
|
17,829
|
|
|||||
Equity in earnings (losses) of subsidiaries
|
3,655
|
|
|
1,577
|
|
|
—
|
|
|
(3,655
|
)
|
|
1,577
|
|
|||||
Net income (loss)
|
19,682
|
|
|
9,275
|
|
|
(5,929
|
)
|
|
(3,622
|
)
|
|
19,406
|
|
|||||
Net loss attributable to noncontrolling interest in subsidiary
|
—
|
|
|
—
|
|
|
310
|
|
|
—
|
|
|
310
|
|
|||||
Net income (loss) attributable to Era Group Inc.
|
$
|
19,682
|
|
|
$
|
9,275
|
|
|
$
|
(5,619
|
)
|
|
$
|
(3,622
|
)
|
|
$
|
19,716
|
|
|
Parent
|
|
Guarantors
|
|
Non-guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
Revenues
|
$
|
—
|
|
|
$
|
151,550
|
|
|
$
|
46,132
|
|
|
$
|
(23,892
|
)
|
|
$
|
173,790
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating
|
—
|
|
|
98,117
|
|
|
48,854
|
|
|
(23,892
|
)
|
|
123,079
|
|
|||||
Administrative and general
|
5,280
|
|
|
21,648
|
|
|
4,283
|
|
|
—
|
|
|
31,211
|
|
|||||
Depreciation
|
—
|
|
|
34,898
|
|
|
737
|
|
|
—
|
|
|
35,635
|
|
|||||
Total costs and expenses
|
5,280
|
|
|
154,663
|
|
|
53,874
|
|
|
(23,892
|
)
|
|
189,925
|
|
|||||
Gains on asset dispositions, net
|
—
|
|
|
5,048
|
|
|
—
|
|
|
—
|
|
|
5,048
|
|
|||||
Loss on impairment
|
—
|
|
|
(116,586
|
)
|
|
(432
|
)
|
|
|
|
(117,018
|
)
|
||||||
Operating income (loss)
|
(5,280
|
)
|
|
(114,651
|
)
|
|
(8,174
|
)
|
|
—
|
|
|
(128,105
|
)
|
|||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest income
|
96
|
|
|
320
|
|
|
225
|
|
|
—
|
|
|
641
|
|
|||||
Interest expense
|
(10,800
|
)
|
|
(627
|
)
|
|
(193
|
)
|
|
—
|
|
|
(11,620
|
)
|
|||||
Foreign currency gains (losses), net
|
220
|
|
|
253
|
|
|
(569
|
)
|
|
—
|
|
|
(96
|
)
|
|||||
Other, net
|
—
|
|
|
—
|
|
|
(29
|
)
|
|
—
|
|
|
(29
|
)
|
|||||
Total other income (expense)
|
(10,484
|
)
|
|
(54
|
)
|
|
(566
|
)
|
|
—
|
|
|
(11,104
|
)
|
|||||
Income (loss) before income taxes and equity earnings
|
(15,764
|
)
|
|
(114,705
|
)
|
|
(8,740
|
)
|
|
—
|
|
|
(139,209
|
)
|
|||||
Income tax expense (benefit)
|
(5,297
|
)
|
|
(43,282
|
)
|
|
513
|
|
|
—
|
|
|
(48,066
|
)
|
|||||
Income (loss) before equity earnings
|
(10,467
|
)
|
|
(71,423
|
)
|
|
(9,253
|
)
|
|
—
|
|
|
(91,143
|
)
|
|||||
Equity earnings, net of tax
|
—
|
|
|
1,069
|
|
|
—
|
|
|
—
|
|
|
1,069
|
|
|||||
Equity in earnings (losses) of subsidiaries
|
(79,388
|
)
|
|
—
|
|
|
—
|
|
|
79,388
|
|
|
—
|
|
|||||
Net income (loss)
|
(89,855
|
)
|
|
(70,354
|
)
|
|
(9,253
|
)
|
|
79,388
|
|
|
(90,074
|
)
|
|||||
Net loss attributable to noncontrolling interest in subsidiary
|
—
|
|
|
—
|
|
|
219
|
|
|
—
|
|
|
219
|
|
|||||
Net income (loss) attributable to Era Group Inc.
|
$
|
(89,855
|
)
|
|
$
|
(70,354
|
)
|
|
$
|
(9,034
|
)
|
|
$
|
79,388
|
|
|
$
|
(89,855
|
)
|
|
Parent
|
|
Guarantors
|
|
Non-guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
Net income (loss)
|
$
|
31,255
|
|
|
$
|
(897
|
)
|
|
$
|
(1,859
|
)
|
|
$
|
2,780
|
|
|
$
|
31,279
|
|
Comprehensive income (loss)
|
31,255
|
|
|
(897
|
)
|
|
(1,859
|
)
|
|
2,780
|
|
|
31,279
|
|
|||||
Comprehensive income attributable to noncontrolling interest in subsidiary
|
—
|
|
|
—
|
|
|
10
|
|
|
—
|
|
|
10
|
|
|||||
Comprehensive income (loss) attributable to Era Group Inc.
|
$
|
31,255
|
|
|
$
|
(897
|
)
|
|
$
|
(1,849
|
)
|
|
$
|
2,780
|
|
|
$
|
31,289
|
|
|
Parent
|
|
Guarantors
|
|
Non-guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
Net income (loss)
|
$
|
(81,448
|
)
|
|
$
|
(76,247
|
)
|
|
$
|
(1,052
|
)
|
|
$
|
77,532
|
|
|
$
|
(81,215
|
)
|
Comprehensive income (loss)
|
(81,448
|
)
|
|
(76,247
|
)
|
|
(1,052
|
)
|
|
77,532
|
|
|
(81,215
|
)
|
|||||
Comprehensive loss attributable to noncontrolling interest in subsidiary
|
—
|
|
|
—
|
|
|
(233
|
)
|
|
—
|
|
|
(233
|
)
|
|||||
Comprehensive income (loss) attributable to Era Group Inc.
|
$
|
(81,448
|
)
|
|
$
|
(76,247
|
)
|
|
$
|
(1,285
|
)
|
|
$
|
77,532
|
|
|
$
|
(81,448
|
)
|
|
Parent
|
|
Guarantors
|
|
Non-guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
Net income (loss)
|
$
|
19,682
|
|
|
$
|
9,275
|
|
|
$
|
(5,929
|
)
|
|
$
|
(3,622
|
)
|
|
$
|
19,406
|
|
Other comprehensive loss:
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign currency translation adjustments
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|||||
Total other comprehensive loss
|
—
|
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|
(5
|
)
|
|||||
Comprehensive income (loss)
|
19,682
|
|
|
9,270
|
|
|
(5,929
|
)
|
|
(3,622
|
)
|
|
19,401
|
|
|||||
Comprehensive loss attributable to noncontrolling interest in subsidiary
|
—
|
|
|
—
|
|
|
310
|
|
|
—
|
|
|
310
|
|
|||||
Comprehensive income (loss) attributable to Era Group Inc.
|
$
|
19,682
|
|
|
$
|
9,270
|
|
|
$
|
(5,619
|
)
|
|
$
|
(3,622
|
)
|
|
$
|
19,711
|
|
|
Parent
|
|
Guarantors
|
|
Non-guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
Net income (loss)
|
$
|
(89,855
|
)
|
|
$
|
(70,354
|
)
|
|
$
|
(9,253
|
)
|
|
$
|
79,388
|
|
|
$
|
(90,074
|
)
|
Other comprehensive loss:
|
|
|
|
|
|
|
|
|
|
||||||||||
Foreign currency translation adjustments
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|||||
Total other comprehensive loss
|
—
|
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|||||
Comprehensive income (loss)
|
(89,855
|
)
|
|
(70,356
|
)
|
|
(9,253
|
)
|
|
79,388
|
|
|
(90,076
|
)
|
|||||
Comprehensive loss attributable to noncontrolling interest in subsidiary
|
—
|
|
|
—
|
|
|
219
|
|
|
—
|
|
|
219
|
|
|||||
Comprehensive income (loss) attributable to Era Group Inc.
|
$
|
(89,855
|
)
|
|
$
|
(70,356
|
)
|
|
$
|
(9,034
|
)
|
|
$
|
79,388
|
|
|
$
|
(89,857
|
)
|
|
Parent
|
|
Guarantors
|
|
Non-guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
Net cash provided by provided by operating activities
|
$
|
35,550
|
|
|
$
|
13,319
|
|
|
$
|
1,483
|
|
|
$
|
—
|
|
|
$
|
50,352
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchases of property and equipment
|
—
|
|
|
(7,461
|
)
|
|
(225
|
)
|
|
—
|
|
|
(7,686
|
)
|
|||||
Proceeds from disposition of property and equipment
|
—
|
|
|
29,520
|
|
|
—
|
|
|
—
|
|
|
29,520
|
|
|||||
Dividends received from equity investees
|
—
|
|
|
1,000
|
|
|
—
|
|
|
—
|
|
|
1,000
|
|
|||||
Principal payments on notes due from equity investees
|
—
|
|
|
401
|
|
|
—
|
|
|
—
|
|
|
401
|
|
|||||
Principal payments on third party notes receivable
|
—
|
|
|
620
|
|
|
—
|
|
|
—
|
|
|
620
|
|
|||||
Net cash used in investing activities
|
—
|
|
|
24,080
|
|
|
(225
|
)
|
|
—
|
|
|
23,855
|
|
|||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Long-term debt issuance costs
|
—
|
|
|
—
|
|
|
—
|
|
|
(1,295
|
)
|
|
(1,295
|
)
|
|||||
Payments on long-term debt
|
—
|
|
|
(1,247
|
)
|
|
(2,315
|
)
|
|
(39,000
|
)
|
|
(42,562
|
)
|
|||||
Proceeds from share award plans
|
—
|
|
|
—
|
|
|
—
|
|
|
893
|
|
|
893
|
|
|||||
Borrowings and repayments of intercompany debt
|
—
|
|
|
(39,402
|
)
|
|
—
|
|
|
39,402
|
|
|
—
|
|
|||||
Net cash used in financing activities
|
—
|
|
|
(40,649
|
)
|
|
(2,315
|
)
|
|
—
|
|
|
(42,964
|
)
|
|||||
Effects of exchange rate changes on cash and cash equivalents
|
—
|
|
|
—
|
|
|
(445
|
)
|
|
—
|
|
|
(445
|
)
|
|||||
Net increase (decrease) in cash and cash equivalents
|
35,550
|
|
|
(3,250
|
)
|
|
(1,502
|
)
|
|
—
|
|
|
30,798
|
|
|||||
Cash, cash equivalents and restricted cash, beginning of period
|
10,800
|
|
|
3,250
|
|
|
2,783
|
|
|
—
|
|
|
16,833
|
|
|||||
Cash, cash equivalents and restricted cash, end of period
|
$
|
46,350
|
|
|
$
|
—
|
|
|
$
|
1,281
|
|
|
$
|
—
|
|
|
$
|
47,631
|
|
|
Parent
|
|
Guarantors
|
|
Non-guarantors
|
|
Eliminations
|
|
Consolidated
|
||||||||||
|
(in thousands)
|
||||||||||||||||||
Net cash provided by (used in) operating activities
|
$
|
(267
|
)
|
|
$
|
17,477
|
|
|
$
|
718
|
|
|
$
|
—
|
|
|
$
|
17,928
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Purchases of property and equipment
|
—
|
|
|
(13,013
|
)
|
|
(108
|
)
|
|
—
|
|
|
(13,121
|
)
|
|||||
Proceeds from disposition of property and equipment
|
—
|
|
|
5,690
|
|
|
—
|
|
|
—
|
|
|
5,690
|
|
|||||
Investments in and advances to equity investees
|
—
|
|
|
(126
|
)
|
|
—
|
|
|
—
|
|
|
(126
|
)
|
|||||
Principal payments on notes due from equity investees
|
—
|
|
|
564
|
|
|
—
|
|
|
—
|
|
|
564
|
|
|||||
Principal payments on third party notes receivable
|
—
|
|
|
94
|
|
|
—
|
|
|
—
|
|
|
94
|
|
|||||
Net cash provided by (used in) investing activities
|
—
|
|
|
(6,791
|
)
|
|
(108
|
)
|
|
—
|
|
|
(6,899
|
)
|
|||||
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Proceeds from Revolving Credit Facility
|
—
|
|
|
—
|
|
|
—
|
|
|
9,000
|
|
|
9,000
|
|
|||||
Payments on long-term debt
|
—
|
|
|
(1,247
|
)
|
|
(498
|
)
|
|
(23,000
|
)
|
|
(24,745
|
)
|
|||||
Proceeds from share award plans
|
—
|
|
|
—
|
|
|
—
|
|
|
836
|
|
|
836
|
|
|||||
Purchase of treasury shares
|
—
|
|
|
—
|
|
|
—
|
|
|
(52
|
)
|
|
(52
|
)
|
|||||
Borrowings and repayments of intercompany debt
|
—
|
|
|
(13,216
|
)
|
|
—
|
|
|
13,216
|
|
|
—
|
|
|||||
Net cash used in financing activities
|
—
|
|
|
(14,463
|
)
|
|
(498
|
)
|
|
—
|
|
|
(14,961
|
)
|
|||||
Effects of exchange rate changes on cash and cash equivalents
|
27
|
|
|
—
|
|
|
74
|
|
|
—
|
|
|
101
|
|
|||||
Net increase (decrease) in cash and cash equivalents
|
(240
|
)
|
|
(3,777
|
)
|
|
186
|
|
|
—
|
|
|
(3,831
|
)
|
|||||
Cash, cash equivalents and restricted cash, beginning of period
|
25,474
|
|
|
3,777
|
|
|
1,476
|
|
|
—
|
|
|
30,727
|
|
|||||
Cash, cash equivalents and restricted cash, end of period
|
$
|
25,234
|
|
|
$
|
—
|
|
|
$
|
1,662
|
|
|
$
|
—
|
|
|
$
|
26,896
|
|
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
•
|
the Company’s dependence on, and the cyclical and volatile nature of, offshore oil and gas exploration, development and production activity, and the impact of general economic conditions and fluctuations in worldwide prices of and demand for oil and natural gas on such activity levels;
|
•
|
the Company’s reliance on a small number of customers and the reduction of its customer base resulting from bankruptcies or consolidation;
|
•
|
risks that the Company’s customers reduce or cancel contracted services or tender processes or obtain comparable services through other forms of transportation;
|
•
|
the Company’s dependence on U.S. government agency contracts that are subject to budget appropriations;
|
•
|
cost savings initiatives implemented by the Company’s customers;
|
•
|
risks inherent in operating helicopters;
|
•
|
the Company’s ability to maintain an acceptable safety record and level of reliability;
|
•
|
the impact of increased United States (“U.S.”) and foreign government regulation and legislation, including potential government implemented moratoriums on drilling activities;
|
•
|
the impact of a grounding of all or a portion of the Company’s fleet for extended periods of time or indefinitely on the Company’s business, including its operations and ability to service customers, results of operations or financial condition and/or the market value of the affected helicopter(s);
|
•
|
the Company’s ability to successfully expand into other geographic and aviation service markets;
|
•
|
risks associated with political instability, governmental action, war, acts of terrorism and changes in the economic condition in any foreign country where the Company does business, which may result in expropriation, nationalization, confiscation or deprivation of the Company’s assets or result in claims of a force majeure situation;
|
•
|
the impact of declines in the global economy and financial markets;
|
•
|
the impact of fluctuations in foreign currency exchange rates on the Company’s asset values and cost to purchase helicopters, spare parts and related services;
|
•
|
risks related to investing in new lines of service without realizing the expected benefits;
|
•
|
risks of engaging in competitive processes or expending significant resources for strategic opportunities, with no guaranty of recoupment;
|
•
|
the Company’s reliance on a small number of helicopter manufacturers and suppliers;
|
•
|
the Company’s ongoing need to replace aging helicopters;
|
•
|
the Company’s reliance on the secondary helicopter market to dispose of used helicopters and parts;
|
•
|
the Company’s reliance on information technology;
|
•
|
the impact of allocation of risk between the Company and its customers;
|
•
|
the liability, legal fees and costs in connection with providing emergency response services;
|
•
|
adverse weather conditions and seasonality;
|
•
|
risks associated with the Company’s debt structure;
|
•
|
the Company’s counterparty credit risk exposure;
|
•
|
the impact of operational and financial difficulties of the Company’s joint ventures and partners and the risks associated with identifying and securing joint venture partners when needed;
|
•
|
conflict with the other owners of the Company’s non-wholly owned subsidiaries and other equity investees;
|
•
|
adverse results of legal proceedings;
|
•
|
the incurrence of significant costs in connection with the Company’s pursuit of legal remedies;
|
•
|
risks associated with significant increases in fuel costs;
|
•
|
the Company’s ability to obtain insurance coverage and the adequacy and availability of such coverage;
|
•
|
the Company’s ability to remediate the material weaknesses it has identified in its internal controls over financial reporting described herein and in its Annual Report on Form 10-K for the year ended
December 31, 2017
;
|
•
|
the possibility of labor problems;
|
•
|
the attraction and retention of qualified personnel;
|
•
|
restrictions on the amount of foreign ownership of the Company’s common stock; and
|
•
|
various other matters and factors, many of which are beyond the Company’s control.
|
|
Three Months Ended September 30,
|
|
Nine Months Ended September 30,
|
||||||||||||||||||||||||
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||||||||||||||
|
(in thousands)
|
|
%
|
|
(in thousands)
|
|
%
|
|
(in thousands)
|
|
%
|
|
(in thousands)
|
|
%
|
||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
United States
|
$
|
39,371
|
|
|
72
|
|
|
$
|
42,475
|
|
|
69
|
|
|
$
|
120,657
|
|
|
71
|
|
|
$
|
113,877
|
|
|
66
|
|
Foreign
|
15,239
|
|
|
28
|
|
|
18,910
|
|
|
31
|
|
|
49,003
|
|
|
29
|
|
|
59,913
|
|
|
34
|
|
||||
Total revenues
|
54,610
|
|
|
100
|
|
|
61,385
|
|
|
100
|
|
|
169,660
|
|
|
100
|
|
|
173,790
|
|
|
100
|
|
||||
Costs and Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operating:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Personnel
|
13,935
|
|
|
26
|
|
|
16,096
|
|
|
26
|
|
|
41,716
|
|
|
25
|
|
|
47,195
|
|
|
27
|
|
||||
Repairs and maintenance
|
10,823
|
|
|
20
|
|
|
15,296
|
|
|
25
|
|
|
36,125
|
|
|
21
|
|
|
39,309
|
|
|
23
|
|
||||
Insurance and loss reserves
|
1,244
|
|
|
2
|
|
|
1,303
|
|
|
2
|
|
|
3,893
|
|
|
2
|
|
|
3,723
|
|
|
2
|
|
||||
Fuel
|
3,695
|
|
|
7
|
|
|
3,219
|
|
|
5
|
|
|
11,056
|
|
|
7
|
|
|
8,880
|
|
|
5
|
|
||||
Leased-in equipment
|
51
|
|
|
—
|
|
|
272
|
|
|
—
|
|
|
584
|
|
|
—
|
|
|
846
|
|
|
—
|
|
||||
Other
|
6,765
|
|
|
12
|
|
|
7,801
|
|
|
13
|
|
|
21,131
|
|
|
12
|
|
|
23,126
|
|
|
13
|
|
||||
Total operating expenses
|
36,513
|
|
|
67
|
|
|
43,987
|
|
|
71
|
|
|
114,505
|
|
|
67
|
|
|
123,079
|
|
|
70
|
|
||||
Administrative and general
|
8,837
|
|
|
16
|
|
|
10,928
|
|
|
18
|
|
|
35,714
|
|
|
21
|
|
|
31,211
|
|
|
18
|
|
||||
Depreciation and amortization
|
9,541
|
|
|
17
|
|
|
12,103
|
|
|
20
|
|
|
30,011
|
|
|
18
|
|
|
35,635
|
|
|
21
|
|
||||
Total costs and expenses
|
54,891
|
|
|
100
|
|
|
67,018
|
|
|
109
|
|
|
180,230
|
|
|
106
|
|
|
189,925
|
|
|
109
|
|
||||
Gains (losses) on asset dispositions, net
|
(148
|
)
|
|
—
|
|
|
(122
|
)
|
|
—
|
|
|
2,269
|
|
|
1
|
|
|
5,048
|
|
|
3
|
|
||||
Litigation settlement proceeds
|
42,000
|
|
|
77
|
|
|
—
|
|
|
—
|
|
|
42,000
|
|
|
25
|
|
|
—
|
|
|
—
|
|
||||
Loss on impairment
|
—
|
|
|
—
|
|
|
(117,018
|
)
|
|
(191
|
)
|
|
—
|
|
|
—
|
|
|
(117,018
|
)
|
|
(67
|
)
|
||||
Operating income (loss)
|
41,571
|
|
|
76
|
|
|
(122,773
|
)
|
|
(200
|
)
|
|
33,699
|
|
|
20
|
|
|
(128,105
|
)
|
|
(74
|
)
|
||||
Other income (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest income
|
732
|
|
|
1
|
|
|
206
|
|
|
—
|
|
|
1,224
|
|
|
1
|
|
|
641
|
|
|
—
|
|
||||
Interest expense
|
(3,549
|
)
|
|
(6
|
)
|
|
(4,097
|
)
|
|
(7
|
)
|
|
(11,646
|
)
|
|
(7
|
)
|
|
(11,620
|
)
|
|
(7
|
)
|
||||
Foreign currency gains (losses), net
|
(94
|
)
|
|
—
|
|
|
12
|
|
|
—
|
|
|
(1,095
|
)
|
|
(1
|
)
|
|
(96
|
)
|
|
—
|
|
||||
Gain on debt extinguishment
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
175
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Other, net
|
15
|
|
|
—
|
|
|
(33
|
)
|
|
—
|
|
|
21
|
|
|
—
|
|
|
(29
|
)
|
|
—
|
|
||||
Total other income (expense)
|
(2,896
|
)
|
|
(5
|
)
|
|
(3,912
|
)
|
|
(7
|
)
|
|
(11,321
|
)
|
|
(7
|
)
|
|
(11,104
|
)
|
|
(7
|
)
|
||||
Income (loss) before income taxes and equity earnings
|
38,675
|
|
|
71
|
|
|
(126,685
|
)
|
|
(206
|
)
|
|
22,378
|
|
|
13
|
|
|
(139,209
|
)
|
|
(80
|
)
|
||||
Income tax expense (benefit)
|
7,861
|
|
|
14
|
|
|
(45,237
|
)
|
|
(74
|
)
|
|
4,549
|
|
|
3
|
|
|
(48,066
|
)
|
|
(28
|
)
|
||||
Income (loss) before equity earnings
|
30,814
|
|
|
57
|
|
|
(81,448
|
)
|
|
(132
|
)
|
|
17,829
|
|
|
10
|
|
|
(91,143
|
)
|
|
(52
|
)
|
||||
Equity earnings, net of tax
|
465
|
|
|
1
|
|
|
233
|
|
|
—
|
|
|
1,577
|
|
|
1
|
|
|
1,069
|
|
|
1
|
|
||||
Net income (loss)
|
31,279
|
|
|
58
|
|
|
(81,215
|
)
|
|
(132
|
)
|
|
19,406
|
|
|
11
|
|
|
(90,074
|
)
|
|
(51
|
)
|
||||
Net loss (income) attributable to noncontrolling interest in subsidiary
|
10
|
|
|
—
|
|
|
(233
|
)
|
|
—
|
|
|
310
|
|
|
—
|
|
|
219
|
|
|
—
|
|
||||
Net income (loss) attributable to Era Group Inc.
|
$
|
31,289
|
|
|
57
|
|
|
$
|
(81,448
|
)
|
|
(133
|
)
|
|
$
|
19,716
|
|
|
12
|
|
|
$
|
(89,855
|
)
|
|
(52
|
)
|
(1)
|
Primarily oil and gas activities, but also includes revenues from utility services, such as firefighting, and VIP transport.
|
(2)
|
Includes property rental income for the three and
nine
months ended September 30, 2017 of approximately $0.1 million and $0.3 million, respectively, that was previously included in emergency response services and oil and gas service lines.
|
(3)
|
Includes search and rescue and air medical services.
|
|
|
Owned
|
|
Leased-in
|
|
Total
|
|
Max.
Pass.
(1)
|
|
Cruise
Speed
(mph)
|
|
Approx.
Range
(miles)
|
|
Average
Age
(2)
(years)
|
|||||||
Heavy:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
S92
|
|
4
|
|
|
—
|
|
|
4
|
|
|
19
|
|
|
175
|
|
|
620
|
|
|
2
|
|
H225
|
|
2
|
|
|
—
|
|
|
2
|
|
|
19
|
|
|
162
|
|
|
582
|
|
|
9
|
|
AW189
|
|
4
|
|
|
—
|
|
|
4
|
|
|
16
|
|
|
173
|
|
|
490
|
|
|
2
|
|
|
|
10
|
|
|
—
|
|
|
10
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Medium:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
AW139
|
|
36
|
|
|
—
|
|
|
36
|
|
|
12
|
|
|
173
|
|
|
426
|
|
|
9
|
|
S76 C+/C++
|
|
5
|
|
|
—
|
|
|
5
|
|
|
12
|
|
|
161
|
|
|
348
|
|
|
12
|
|
B212
|
|
5
|
|
|
—
|
|
|
5
|
|
|
11
|
|
|
115
|
|
|
299
|
|
|
39
|
|
|
|
46
|
|
|
—
|
|
|
46
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Light—twin engine:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
A109
|
|
7
|
|
|
—
|
|
|
7
|
|
|
7
|
|
|
161
|
|
|
405
|
|
|
12
|
|
EC135
|
|
13
|
|
|
2
|
|
|
15
|
|
|
7
|
|
|
138
|
|
|
288
|
|
|
10
|
|
BO105
|
|
3
|
|
|
—
|
|
|
3
|
|
|
4
|
|
|
138
|
|
|
276
|
|
|
29
|
|
|
|
23
|
|
|
2
|
|
|
25
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Light—single engine:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
A119
|
|
13
|
|
|
—
|
|
|
13
|
|
|
7
|
|
|
161
|
|
|
270
|
|
|
12
|
|
AS350
|
|
17
|
|
|
—
|
|
|
17
|
|
|
5
|
|
|
138
|
|
|
361
|
|
|
21
|
|
|
|
30
|
|
|
—
|
|
|
30
|
|
|
|
|
|
|
|
|
|
||||
Total Fleet
|
|
109
|
|
|
2
|
|
|
111
|
|
|
|
|
|
|
|
|
13
|
|
(1)
|
In typical configuration for our operations.
|
(2)
|
Reflects the average age of helicopters that are owned by us.
|
|
Nine Months Ended
September 30, |
||||||
|
2018
|
|
2017
|
||||
|
(in thousands)
|
||||||
Cash flows provided by or (used in):
|
|
|
|
||||
Operating activities
|
$
|
50,352
|
|
|
$
|
17,928
|
|
Investing activities
|
23,855
|
|
|
(6,899
|
)
|
||
Financing activities
|
(42,964
|
)
|
|
(14,961
|
)
|
||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
(445
|
)
|
|
101
|
|
||
Net increase (decrease) in cash, cash equivalents and restricted cash
|
$
|
30,798
|
|
|
$
|
(3,831
|
)
|
|
Nine Months Ended
September 30, |
||||||
|
2018
|
|
2017
|
||||
Operating income before depreciation, gains on asset dispositions and impairment, net
|
$
|
61,441
|
|
|
$
|
19,500
|
|
Changes in operating assets and liabilities before interest and income taxes
|
(6,593
|
)
|
|
2,440
|
|
||
Interest paid, net of capitalized interest of $97 and $451 in 2018 and 2017, respectively
|
(7,770
|
)
|
|
(7,798
|
)
|
||
Income taxes paid
|
(63
|
)
|
|
(427
|
)
|
||
Other
|
3,337
|
|
|
4,213
|
|
||
Total cash flows provided by operating activities
|
$
|
50,352
|
|
|
$
|
17,928
|
|
•
|
Proceeds from the disposition of property and equipment were
$29.5 million
.
|
•
|
Net principal payments received from equity investees and third parties were $
1.0 million
.
|
•
|
Dividends received from equity investees were
$1.0 million
.
|
•
|
Capital expenditures were
$7.7 million
, which consisted primarily of helicopter acquisitions, spare helicopter parts, and leasehold improvements.
|
•
|
Proceeds from the disposition of property and equipment were
$5.7 million
.
|
•
|
Net principal payments received from equity investees and third parties were
$0.7 million
.
|
•
|
Capital expenditures were
$13.1 million
, which consisted primarily of helicopter acquisitions, deposits on future helicopter deliveries, spare helicopter parts and capitalized interest.
|
•
|
Investments in and advances to equity method investees were
$0.1 million
.
|
•
|
Principal payments on long-term debt, including our Revolving Credit Facility, were
$42.6 million
.
|
•
|
Long-term debt issuance costs were
$1.3 million
incurred in connection with the amendment of the Revolving Credit Facility.
|
•
|
Proceeds from share award plans were $0.9 million.
|
•
|
Proceeds from additional borrowings under our Revolving Credit Facility were
$9.0 million
.
|
•
|
Proceeds from share award plans were
$0.8 million
.
|
•
|
Principal payments on long-term debt, including our Revolving Credit Facility, were
$24.7 million
.
|
ITEM 3.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM 4.
|
CONTROLS AND PROCEDURES
|
|
Total Number of Shares Repurchased
|
|
Average Price Paid Per
Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
|
Maximum Value of Shares that May Yet be Purchased Under the Plans or Programs
|
||||||
July 1, 2018 - July 31, 2018
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
22,934,076
|
|
August 1, 2018 - August 31, 2018
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
22,934,076
|
|
September 1, 2018 - September 30, 2018
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
22,934,076
|
|
ITEM 6.
|
EXHIBITS
|
3.1
|
|
|
3.2
|
|
|
10.1
|
|
|
31.1
|
|
|
31.2
|
|
|
32.1
|
|
|
32.2
|
|
|
101.INS
|
|
XBRL Instance Document
|
101.SCH
|
|
XBRL Taxonomy Extension Schema
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase
|
|
|
|
|
Era Group Inc. (Registrant)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DATE:
|
November 6, 2018
|
By:
|
|
/s/ Jennifer D. Whalen
|
|
|
|
|
|
Jennifer D. Whalen,
Senior
Vice President, Chief Financial Officer
|
|
|
|
|
|
|
|
(b)
|
To be in proper form, whether in regard to a nominee for election to the Board of Directors or
|
(M)
|
any other information as reasonably requested by the Corporation.
|
(d)
|
For purposes of these Bylaws:
|
(b)
|
determine the shares represented at a meeting and the validity of proxies and ballots;
|
(d)
|
count all votes and ballots;
|
(d)
|
“
Indemnitee
” means any current or former director or officer of the Corporation.
|
1.
|
I have reviewed this quarterly report on Form 10−Q of Era Group Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a−15(e) and 15d−15(e)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
November 6, 2018
|
|
|
||
/s/ Christopher S. Bradshaw
|
||
Name:
|
Christopher S. Bradshaw
|
|
Title:
|
President and Chief Executive Officer
(Principal Executive Officer) |
1.
|
I have reviewed this quarterly report on Form 10−Q of Era Group Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a−15(e) and 15d−15(e)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions:
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date:
|
November 6, 2018
|
|
|
||
/s/ Jennifer D. Whalen
|
|
|
Name:
|
Jennifer D. Whalen
|
|
Title:
|
Senior Vice President, Chief Financial Officer
(Principal Financial Officer)
|
Date:
|
November 6, 2018
|
|
|
||
/s/ Christopher S. Bradshaw
|
||
Name:
|
Christopher S. Bradshaw
|
|
Title:
|
President and Chief Executive Officer
(Principal Executive Officer) |
Date:
|
November 6, 2018
|
|
|
||
/s/ Jennifer D. Whalen
|
||
Name:
|
Jennifer D. Whalen
|
|
Title:
|
Senior Vice President, Chief Financial Officer
(Principal Financial Officer) |