UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
  Form 10-Q  
þQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended SeptemberJune 30, 20162017
OR
oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from              to      
 Commission File Number 001-31617 
 Bristow Group Inc. 
 (Exact name of registrant as specified in its charter) 

Delaware 72-0679819
(State or other jurisdiction of
incorporation or organization)
 
(IRS Employer
Identification Number)
  
2103 City West Blvd.,
4th Floor
Houston, Texas
 
77042
(Zip Code)
(Address of principal executive offices)  
Registrant’s telephone number, including area code:
(713) 267-7600
  
None 
  
   
(Former name, former address and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  þ    No  ¨
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  þ    No  ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer”filer,” “smaller reporting company,” and “smaller reporting“emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer þo
Accelerated filer oþ
Non-accelerated filer o
Smaller reporting company o
Emerging growth company o
  (Do not check if a smaller reporting company) 
     
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
o  Yes    þ  No
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate the number shares outstanding of each of the issuer’s classes of Common Stock, as of OctoberJuly 28, 20162017.
35,095,36235,327,801 shares of Common Stock, $.01 par value
 



BRISTOW GROUP INC.
INDEX — FORM 10-Q
 
  Page
PART I
Item 1.
Financial Statements
1
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
4337
Item 3.
Quantitative and Qualitative Disclosures about Market Risk
7362
Item 4.
Controls and Procedures
7362
PART II
Item 1.
Legal Proceedings
7463
Item 1A.
Risk Factors
7463
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
7463
Item 3.
Defaults Upon Senior Securities
7463
Item 4.
Mine Safety Disclosures
7463
Item 5.
Other Information
7463
Item 6.
Exhibits
7564
Signatures
7665

Table of Contents

PART I — FINANCIAL INFORMATION
 
Item 1.     Financial Statements.
BRISTOW GROUP INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
 
 Three Months Ended 
 September 30,		 Six Months Ended 
 September 30,		 Three Months Ended 
 June 30,
 2016 2015 2016 2015 2017 2016
            
 
(Unaudited)
(In thousands, except per share amounts)
 
(Unaudited)
(In thousands, except per share amounts)
Gross revenue:            
Operating revenue from non-affiliates $325,315
 $398,010
 $663,990
 $818,023
 $322,118
 $338,675
Operating revenue from affiliates 18,347
 21,001
 35,856
 41,099
 17,611
 17,509
Reimbursable revenue from non-affiliates 13,805
 27,900
 27,019
 54,785
 12,380
 13,214
 357,467
 446,911
 726,865
 913,907
 352,109
 369,398
Operating expense:            
Direct cost 281,630
 307,564
 571,173
 638,243
 285,551
 289,543
Reimbursable expense 13,276
 26,695
 25,890
 52,862
 12,226
 12,614
Depreciation and amortization 28,592
 37,387
 63,286
 74,533
 31,056
 34,694
General and administrative 51,274
 53,457
 103,869
 114,789
 46,707
 52,595
 374,772
 425,103
 764,218
 880,427
 375,540
 389,446
            
Loss on impairment (7,572) (22,274) (7,572) (27,713) (1,192) —
Loss on disposal of assets (2,186) (14,007) (12,203) (21,702)
Gain (loss) on disposal of assets 699
 (10,017)
Earnings from unconsolidated affiliates, net of losses 181
 (15,360) 4,011
 (9,064) (665) 3,830
Operating loss (26,882) (29,833) (53,117) (24,999) (24,589) (26,235)
            
Interest expense, net (11,468) (7,179) (22,354) (14,848) (16,021) (10,886)
Other income (expense), net 3,003
 (11,424) (3,186) (7,585) (1,645) (6,189)
Loss before benefit for income taxes (35,347) (48,436) (78,657) (47,432)
Benefit for income taxes 5,240
 2,756
 7,478
 123
Loss before provision for income taxes (42,255) (43,310)
Benefit (provision) for income taxes (13,491) 2,238
Net loss (30,107) (45,680) (71,179) (47,309) (55,746) (41,072)
Net (income) loss attributable to noncontrolling interests 310
 (1,452) 610
 (3,080)
Net loss attributable to noncontrolling interests 471
 300
Net loss attributable to Bristow Group (29,797) (47,132) (70,569) (50,389) $(55,275) $(40,772)
Accretion of redeemable noncontrolling interests —
 4,803
 —
 (1,498)
Net loss attributable to common stockholders $(29,797) $(42,329) $(70,569) $(51,887)
            
Loss per common share:            
Basic $(0.85) $(1.21) $(2.02) $(1.49) $(1.57) $(1.17)
Diluted $(0.85) $(1.21) $(2.02) $(1.49) $(1.57) $(1.17)
            
Cash dividends declared per common share $0.07
 $0.34
 $0.14
 $0.68
 $0.07
 $0.07

The accompanying notes are an integral part of these condensed consolidated financial statements.

BRISTOW GROUP INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Comprehensive Loss
 
 Three Months Ended 
 September 30,		 Six Months Ended 
 September 30,		 Three Months Ended 
 June 30,
 2016 2015 2016 2015 2017 2016
            
 
(Unaudited)
(In thousands)
  
Net loss $(30,107) $(45,680) $(71,179) $(47,309) $(55,746) $(41,072)
Other comprehensive loss:        
Other comprehensive income:    
Currency translation adjustments (5,439) (16,950) (12,574) (4,342) 9,760
 (7,135)
Total comprehensive loss (35,546) (62,630) (83,753) (51,651) (45,986) (48,207)
            
Net (income) loss attributable to noncontrolling interests 310
 (1,452) 610
 (3,080)
Net loss attributable to noncontrolling interests 471
 300
Currency translation adjustments attributable to noncontrolling interests (523) (1,535) (4,965) 571
 310
 (4,442)
Total comprehensive income attributable to noncontrolling
interests
 (213) (2,987) (4,355) (2,509)
Total comprehensive (income) loss attributable to noncontrolling interests 781
 (4,142)
Total comprehensive loss attributable to Bristow Group (35,759) (65,617) (88,108) (54,160) $(45,205) $(52,349)
Accretion of redeemable noncontrolling interests —
 4,803
 —
 (1,498)
Total comprehensive loss attributable to common stockholders $(35,759) $(60,814) $(88,108) $(55,658)
The accompanying notes are an integral part of these condensed consolidated financial statements.

BRISTOW GROUP INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
 September 30, 
 2016		 March 31,  
 2016		 June 30, 
 2017		 March 31,  
 2017
 (Unaudited)   (Unaudited)  
 (In thousands) (In thousands)
ASSETS
Current assets:        
Cash and cash equivalents $100,668
 $104,310
 $78,879
 $96,656
Accounts receivable from non-affiliates 199,005
 243,425
 218,413
 198,129
Accounts receivable from affiliates 8,351
 5,892
 13,302
 8,786
Inventories 126,973
 142,503
 130,479
 124,911
Assets held for sale 40,338
 43,783
 34,585
 38,246
Prepaid expenses and other current assets 50,510
 53,183
 43,145
 41,143
Total current assets 525,845
 593,096
 518,803
 507,871
Investment in unconsolidated affiliates 206,483
 194,952
 205,174
 210,162
Property and equipment – at cost:        
Land and buildings 237,282
 253,098
 235,270
 231,448
Aircraft and equipment 2,614,585
 2,570,577
 2,605,978
 2,622,701
 2,851,867
 2,823,675
 2,841,248
 2,854,149
Less – Accumulated depreciation and amortization (560,955) (540,423) (630,223) (599,785)
 2,290,912
 2,283,252
 2,211,025
 2,254,364
Goodwill 28,922
 29,990
 19,907
 19,798
Other assets 145,934
 161,655
 115,921
 121,652
Total assets $3,198,096
 $3,262,945
 $3,070,830
 $3,113,847
        
LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND STOCKHOLDERS’ INVESTMENT
Current liabilities:        
Accounts payable $110,650
 $96,966
 $96,498
 $98,215
Accrued wages, benefits and related taxes 60,852
 59,431
 53,288
 59,077
Income taxes payable 18,617
 27,400
 15,802
 15,145
Other accrued taxes 7,052
 7,995
 8,383
 9,611
Deferred revenue 30,612
 24,206
 22,318
 19,911
Accrued maintenance and repairs 20,198
 22,196
 25,628
 22,914
Accrued interest 11,884
 11,985
 5,702
 12,909
Other accrued liabilities 49,760
 48,392
 48,376
 46,679
Deferred taxes 696
 1,881
 —
 830
Short-term borrowings and current maturities of long-term debt 81,510
 60,394
 117,817
 131,063
Contingent consideration 7,352
 29,522
Total current liabilities 399,183
 390,368
 393,812
 416,354
Long-term debt, less current maturities 1,140,036
 1,071,578
 1,174,749
 1,150,956
Accrued pension liabilities 55,036
 70,107
 60,057
 61,647
Other liabilities and deferred credits 25,137
 33,273
 25,634
 28,899
Deferred taxes 149,328
 172,254
 159,439
 154,873
Commitments and contingencies (Note 5) 

 
 

 
Redeemable noncontrolling interest 13,175
 15,473
 6,349
 6,886
Stockholders’ investment:        
Common stock, $.01 par value, authorized 90,000,000; outstanding: 35,095,162 as of September 30 and 34,976,743 as of March 31 (exclusive of 1,291,441 treasury shares) 378
 377
Common stock, $.01 par value, authorized 90,000,000; outstanding: 35,303,840 as of June 30 and 35,213,991 as of March 31 (exclusive of 1,291,441 treasury shares) 380
 379
Additional paid-in capital 803,801
 801,173
 813,857
 809,995
Retained earnings 1,096,794
 1,172,273
 934,166
 991,906
Accumulated other comprehensive loss (307,358) (289,819) (318,207) (328,277)
Treasury shares, at cost (2,756,419 shares) (184,796) (184,796) (184,796) (184,796)
Total Bristow Group stockholders’ investment 1,408,819
 1,499,208
 1,245,400
 1,289,207
Noncontrolling interests 7,382
 10,684
 5,390
 5,025
Total stockholders’ investment 1,416,201
 1,509,892
 1,250,790
 1,294,232
Total liabilities, redeemable noncontrolling interests and stockholders’ investment $3,198,096
 $3,262,945
Total liabilities, redeemable noncontrolling interest and stockholders’ investment $3,070,830
 $3,113,847
The accompanying notes are an integral part of these condensed consolidated financial statements.

BRISTOW GROUP INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
 Six Months Ended 
 September 30,		 Three Months Ended 
 June 30,
 2016 2015 2017 2016
        
 
(Unaudited)
(In thousands)
 
(Unaudited)
(In thousands)
Cash flows from operating activities:        
Net loss $(71,179) $(47,309) $(55,746) $(41,072)
Adjustments to reconcile net loss to net cash provided by operating activities:    
Adjustments to reconcile net loss to net cash used in operating activities:    
Depreciation and amortization 63,286
 74,533
 31,056
 34,694
Deferred income taxes (20,060) (22,545) 6,651
 (7,216)
Discount amortization on long-term debt 989
 946
 23
 27
Loss on disposal of assets 12,203
 21,702
(Gain) loss on disposal of assets (699) 10,017
Loss on impairment 7,572
 27,713
 1,192
 —
Stock-based compensation 6,244
 10,380
 4,136
 4,200
Equity in earnings from unconsolidated affiliates less than (in excess of) dividends received (3,528) 9,876
 665
 (3,587)
Tax benefit related to stock-based compensation —
 (203)
Increase (decrease) in cash resulting from changes in:        
Accounts receivable 24,395
 33,490
 (21,541) (18,391)
Inventories (797) (3,061) (3,551) (2,000)
Prepaid expenses and other assets (4,910) (21,667) 5,106
 (2,390)
Accounts payable 18,169
 25,395
 (3,288) 5,328
Accrued liabilities 1,939
 (41,488) (8,807) 10,904
Other liabilities and deferred credits (6,285) (9,502) (6,376) (5,342)
Net cash provided by operating activities 28,038
 58,260
Net cash used in operating activities (51,179) (14,828)
Cash flows from investing activities:        
Capital expenditures (101,866) (146,989) (12,553) (21,063)
Proceeds from asset dispositions 11,819
 16,107
 41,975
 11,500
Net cash used in investing activities (90,047) (130,882)
Net cash provided by (used in) investing activities 29,422
 (9,563)
Cash flows from financing activities:        
Proceeds from borrowings 195,954
 461,581
 69,018
 74,408
Debt issuance costs (2,925) —
 (493) (2,925)
Repayment of debt (120,966) (323,569) (66,947) (18,035)
Partial prepayment of put/call obligation (25) (28) (12) (13)
Acquisition of noncontrolling interest —
 (2,000)
Payment of contingent consideration (10,000) (8,000) —
 (10,000)
Common stock dividends paid (4,910) (23,746) (2,465) (2,453)
Tax benefit related to stock-based compensation —
 203
Net cash provided by financing activities 57,128
 104,441
Repurchases for tax withholdings on vesting of equity awards (274) (570)
Net cash provided by (used in) financing activities (1,173) 40,412
Effect of exchange rate changes on cash and cash equivalents 1,239
 3,376
 5,153
 2,380
Net increase (decrease) in cash and cash equivalents (3,642) 35,195
 (17,777) 18,401
Cash and cash equivalents at beginning of period 104,310
 104,146
 96,656
 104,310
Cash and cash equivalents at end of period $100,668
 $139,341
 $78,879
 $122,711
Cash paid during the period for:        
Interest $24,240
 $19,751
 $22,093
 $18,114
Income taxes $8,401
 $14,245
 $4,543
 $4,058
Supplemental disclosure of non-cash investing activities:    
Deferred sale leaseback advance $—
 $18,285
Completion of deferred sale leaseback $—
 $(74,480)
The accompanying notes are an integral part of these condensed consolidated financial statements.

BRISTOW GROUP INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Changes in Equity and Redeemable Noncontrolling Interest
(Unaudited)
(In thousands, except share amounts)
   Total Bristow Group Stockholders’ Investment    
 Redeemable Noncontrolling Interest 
Common
Stock
 
Common
Stock
(Shares)
 
Additional
Paid-in
Capital
 
Retained
Earnings
 
Accumulated
Other
Comprehensive
Income (Loss)
 
Treasury
Stock
 
Noncontrolling
Interests
 
Total
Stockholders’
Investment
March 31, 2016$15,473
 $377
 34,976,743
 $801,173
 $1,172,273
 $(289,819) $(184,796) $10,684
 $1,509,892
Issuance of common stock—
 1
 118,419
 2,628
 —
 —
 —
 —
 2,629
Distributions paid to noncontrolling interests—
 —
 —
 —
 —
 —
 —
 (25) (25)
Common stock dividends ($0.14 per share)—
 —
 —
 —
 (4,910) —
 —
 —
 (4,910)
Currency translation adjustments(1,448) —
 —
 —
 —
 —
 —
 (3,517) (3,517)
Net loss(850) —
 —
 —
 (70,569) —
 —
 240
 (70,329)
Other comprehensive income—
 —
 —
 —
 —
 (17,539) —
 —
 (17,539)
September 30, 2016$13,175
 $378
 35,095,162
 $803,801
 $1,096,794
 $(307,358) $(184,796) $7,382
 $1,416,201
   Total Bristow Group Stockholders’ Investment    
 Redeemable Noncontrolling Interest 
Common
Stock
 
Common
Stock
(Shares)
 
Additional
Paid-in
Capital
 
Retained
Earnings
 
Accumulated
Other
Comprehensive
Income (Loss)
 
Treasury
Stock
 
Noncontrolling
Interests
 
Total
Stockholders’
Investment
March 31, 2017$6,886
 $379
 35,213,991
 $809,995
 $991,906
 $(328,277) $(184,796) $5,025
 $1,294,232
Issuance of common stock—
 1
 89,849
 3,862
 —
 —
 —
 —
 3,863
Distributions paid to noncontrolling interests—
 —
 —
 —
 —
 —
 —
 (12) (12)
Common stock dividends ($0.07 per share)—
 —
 —
 —
 (2,465) —
 —
 —
 (2,465)
Currency translation adjustments258
 —
 —
 —
 —
 —
 —
 52
 52
Net income (loss)(795) —
 —
 —
 (55,275) —
 —
 325
 (54,950)
Other comprehensive loss—
 —
 —
 —
 —
 10,070
 —
 —
 10,070
June 30, 2017$6,349
 $380
 35,303,840
 $813,857
 $934,166
 $(318,207) $(184,796) $5,390
 $1,250,790

The accompanying notes are an integral part of these condensed consolidated financial statements.


5
Table of Contents
BRISTOW GROUP INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)


Note 1 — BASIS OF PRESENTATION, CONSOLIDATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The condensed consolidated financial statements include the accounts of Bristow Group Inc. and its consolidated entities (“Bristow Group”, the “Company”, “we”, “us”, or “our”) after elimination of all significant intercompany accounts and transactions. Our fiscal year ends March 31, and we refer to fiscal years based on the end of such period. Therefore, the fiscal year ending March 31, 20172018 is referred to as “fiscal year 20172018”. Pursuant to the rules and regulations of the U.S. Securities and Exchange Commission, the information contained in the following notes to condensed consolidated financial statements is condensed from that which would appear in the annual consolidated financial statements; accordingly, the condensed consolidated financial statements included herein should be read in conjunction with the consolidated financial statements and related notes thereto contained in our fiscal year 20162017 Annual Report (the “fiscal year 20162017 Financial Statements”). Operating results for the interim period presented are not necessarily indicative of the results that may be expected for the entire fiscal year.
The condensed consolidated financial statements included herein are unaudited; however, they include all adjustments of a normal recurring nature which, in the opinion of management, are necessary for a fair presentation of the consolidated balance sheet of the Company as of SeptemberJune 30, 20162017, and the consolidated statements of operations, and comprehensive income (loss) for the threeloss and six months ended September 30, 2016 and 2015, and the consolidated cash flows for the sixthree months ended SeptemberJune 30, 20162017 and 20152016.
Certain reclassifications of prior period information have been made to conform to the presentations of the current period information as a result of an adoption of a required accounting standard. In the prior period financial statements, we had included unamortized debt issuance costs in other assets. Current period presentation has reclassified certain of these unamortized debt issuance costs as direct deductions of our debt balances on our condensed consolidated balance sheet. These reclassifications had no effect on net income or cash flows provided by operating activities as previously reported.



6
Table of Contents
BRISTOW GROUP INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)

Foreign Currency
During the three and six months ended SeptemberJune 30, 20162017 and 20152016, our primary foreign currency exposure was to the British pound sterling, the euro, the Australian dollar, the Norwegian kroner and the Nigerian naira. The value of these currencies has fluctuated relative to the U.S. dollar as indicated in the following table:
   Three Months Ended 
 September 30,		 Six Months Ended 
 September 30,		 
   2016 2015 2016 2015 
 One British pound sterling into U.S. dollars         
 High 1.34
 1.57
 1.48
 1.59
 
 Average 1.31
 1.55
 1.37
 1.54
 
 Low 1.29
 1.51
 1.29
 1.46
 
 At period-end 1.30
 1.51
 1.30
 1.51
 
 One euro into U.S. dollars         
 High 1.13
 1.16
 1.15
 1.16
 
 Average 1.12
 1.11
 1.12
 1.11
 
 Low 1.10
 1.09
 1.10
 1.06
 
 At period-end 1.12
 1.12
 1.12
 1.12
 
 One Australian dollar into U.S. dollars         
 High 0.77
 0.77
 0.78
 0.81
 
 Average 0.76
 0.73
 0.75
 0.75
 
 Low 0.74
 0.69
 0.72
 0.69
 
 At period-end 0.77
 0.70
 0.77
 0.70
 
 One Norwegian kroner into U.S. dollars         
 High 0.1251
 0.1272
 0.1251
 0.1370
 
 Average 0.1201
 0.1220
 0.1206
 0.1255
 
 Low 0.1163
 0.1171
 0.1163
 0.1171
 
 At period-end 0.1251
 0.1176
 0.1251
 0.1176
 
 One Nigerian naira into U.S. dollars         
 High 0.0036
 0.0051
 0.0050
 0.0051
 
 Average 0.0032
 0.0051
 0.0040
 0.0051
 
 Low 0.0029
 0.0050
 0.0029
 0.0050
 
 At period-end 0.0032
 0.0051
 0.0032
 0.0051
 
  Three Months Ended 
 June 30,
  2017 2016
One British pound sterling into U.S. dollars    
High 1.30
 1.48
Average 1.28
 1.43
Low 1.24
 1.31
At period-end 1.30
 1.34
One euro into U.S. dollars    
High 1.14
 1.15
Average 1.10
 1.13
Low 1.06
 1.10
At period-end 1.14
 1.11
One Australian dollar into U.S. dollars    
High 0.77
 0.78
Average 0.75
 0.75
Low 0.74
 0.72
At period-end 0.77
 0.74
One Norwegian kroner into U.S. dollars    
High 0.1199
 0.1245
Average 0.1174
 0.1212
Low 0.1152
 0.1163
At period-end 0.1194
 0.1195
One Nigerian naira into U.S. dollars    
High 0.0033
 0.0050
Average 0.0032
 0.0048
Low 0.0032
 0.0035
At period-end 0.0032
 0.0035
_____________ 
Source: BankFactSet

6
Table of England, FactSet and Oanda.comContents
BRISTOW GROUP INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)

Other income (expense), net, in our condensed consolidated statements of operations includes foreign currency transaction gainslosses of $2.9$1.7 million and foreign currency transaction losses of $11.4$6.3 million for the three months ended SeptemberJune 30, 20162017 and 2015, respectively, and foreign currency transaction losses of $3.4 million and $7.6 million for the six months ended September 30, 2016 and 2015, respectively. Transaction gains and losses represent the revaluation of monetary assets and liabilities from the currency that will ultimately be settled into the functional currency of the legal entity holding the asset or liability. The gains recordedlosses for the three months ended SeptemberJune 30, 2016 were primarily driven by amounts owed in British pound sterling on U.S. dollar legal entities while the pound sterling depreciated against the dollar, which was in excess of dollar liabilities revalued on pound sterling legal entities. The losses for the six months ended September 30, 2016 were primarily driven by U.S. dollar net liabilities on Nigerian naira legal entities while the naira devalued against the dollar. The losses for the three2017 and six months ended September 30, 20152016 were primarily driven by a combination of currencies depreciating against the U.S. dollar as presented in the table above while various foreign currency denominated legal entities held U.S. dollar liability positions.

7
Table of Contents
BRISTOW GROUP INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)

Our earnings from unconsolidated affiliates, net of losses, are also affected by the impact of changes in foreign currency exchange rates on the reported results of our unconsolidated affiliates. During the three months ended SeptemberJune 30, 20162017 and 2015,2016, earnings from unconsolidated affiliates, net of losses, decreased by $1.3$1.1 million and $19.9 million, respectively, and during the six months ended September 30, 2016 and 2015, earnings from unconsolidated affiliates, net of losses, decreased by $1.3 million and $18.2 million,$48,000, respectively, as a result of the impact of changes in foreign currency exchange rates on the earnings of our unconsolidated affiliates, primarily the impact of changes in the Brazilian real to U.S. dollar exchange rate on earnings for our affiliate in Brazil. The value of the Brazilian real has fluctuated relative to the U.S. dollar as indicated in the following table:
   Three Months Ended 
 September 30,		 Six Months Ended 
 September 30,		 
   2016 2015 2016 2015 
 One Brazilian real into U.S. dollars         
 High 0.3191
 0.3217
 0.3191
 0.3435
 
 Average 0.3083
 0.2858
 0.2966
 0.3057
 
 Low 0.2991
 0.2406
 0.2702
 0.2406
 
 At period-end 0.3078
 0.2441
 0.3078
 0.2441
 
  Three Months Ended 
 June 30,
  2017 2016
One Brazilian real into U.S. dollars    
High 0.3233
 0.3121
Average 0.3113
 0.2849
Low 0.2995
 0.2702
At period-end 0.3018
 0.3121
_____________ 
Source: FactSet and Oanda.com
We estimate that the fluctuation of currencies versus the same period in the prior fiscal year had the following effect on our financial condition and results of operations (in thousands):
   Three Months Ended 
 September 30, 2016		 Six Months Ended 
 September 30, 2016		 
 Revenue $(24,655) $(38,032) 
 Operating expense 21,670
 36,471
 
 Earnings from unconsolidated affiliates, net of losses 18,640
 16,852
 
 Non-operating expense 14,286
 4,169
 
 Income before provision for income taxes 29,941
 19,460
 
 Provision for income taxes (8,865) (6,027) 
 Net income 21,076
 13,433
 
 Cumulative translation adjustment (5,962) (17,539) 
 Total stockholders’ investment $15,114
 $(4,106) 
  Three Months Ended 
 June 30, 2017
Revenue $(18,804)
Operating expense 13,710
Earnings from unconsolidated affiliates, net of losses (1,090)
Non-operating expense 4,579
Income before provision for income taxes (1,605)
Provision for income taxes 1,202
Net income (403)
Cumulative translation adjustment 10,070
Total stockholders’ investment $9,667
Revenue Recognition
In general, we recognize revenue when it is both realized or realizable and earned. We consider revenue to be realized or realizable and earned when the following conditions exist: there is persuasive evidence of an arrangement (generally a client contract exists); the services or products have been performed or delivered to the client; the sales price is fixed or determinable; and collection has occurred or is probable.
Revenue from helicopter services, including search and rescue (“SAR”) services, is recognized based on contractual rates as the related services are performed. The charges under these contracts are generally based on a two-tier rate structure consisting of a daily or monthly fixed fee plus additional fees for each hour flown. These contracts are for varying periods and generally permit the client to cancel the contract before the end of the term. We also provide services to clients on an “ad hoc” basis, which usually entails a shorter contract notice period and duration. The charges for ad hoc services are based on an hourly rate or a daily or monthly fixed fee plus additional fees for each hour flown. In order to offset potential increases in operating costs, our long-term contracts may provide for periodic increases in the contractual rates charged for our services. We recognize the impact of these rate increases when the criteria outlined above have been met. This generally includes written recognition from the clients that they are in agreement with the amount of the rate escalation. Cost reimbursements from clients are recorded as reimbursable revenue with the related reimbursed costs recorded as reimbursable expense on our condensed consolidated statements of operations.
Bristow Academy, our helicopter training unit, primarily earns revenue from military training, flight training provided to individual students and ground school courses. We recognize revenue from these sources using the same revenue recognition principles described above as services are provided. We consider revenue to be realized or realizable and earned when the following conditions exist: there is persuasive evidence of an arrangement (generally a contract exists); the services have been performed or delivered to the client or student; the sales price is fixed and determinable; and collection has occurred or is probable.

87
Table of Contents
BRISTOW GROUP INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)

Eastern Airways International Limited (“Eastern Airways”) and Capiteq Limited, operating under the name Airnorth, primarily earn revenue through charter and scheduled airline services and provision of airport services (Eastern Airways only). Both chartered and scheduled airline service revenue is recognized net of passenger taxes and discounts. Revenue is recognized at the earlier of the period in which the service is provided or the period in which the right to travel expires, which is determined by the terms and conditions of the ticket. Ticket sales are recorded within deferred revenue in accordance with the above policy. Airport services revenue is recognized when earned.
Bristow Academy, our helicopter training unit, primarily earns revenue from military training, flight training provided to individual students and ground school courses. We recognize revenue from these sources using the same revenue recognition principles described above as services are provided.
Interest Expense, Net
During the three and six months ended SeptemberJune 30, 20162017 and 2015,2016, interest expense, net consisted of the following (in thousands):
  Three Months Ended 
 September 30,		 Six Months Ended 
 September 30,		 
  2016 2015 2016 2015 
 Interest income$235
 $217
 $469
 $438
 
 Interest expense(11,703) (7,396) (22,823) (15,286) 
 Interest expense, net$(11,468) $(7,179) $(22,354) $(14,848) 
Accretion of Redeemable Noncontrolling Interests
Accretion of redeemable noncontrolling interests of $(4.8) million and $1.5 million for the three and six months ended September 30, 2015, respectively, related to put arrangements whereby the noncontrolling interest holders may require us to redeem the remaining shares of Airnorth (prior to repurchasing the remaining 15% of the outstanding shares in November 2015) and Eastern Airways at a formula-based amount that is not considered fair value (the “redemption amount”). Redeemable noncontrolling interest is adjusted each period for comprehensive income, dividends attributable to the noncontrolling interest and changes in ownership interest, if any, such that the noncontrolling interest represents the proportionate share of Airnorth’s and Eastern Airways’ equity (the “carrying value”). Additionally, at each period end we are required to compare the redemption amount to the carrying value of the redeemable noncontrolling interest and record the redeemable noncontrolling interest at the higher of the two amounts, with a corresponding charge or credit directly to retained earnings. While this charge or credit does not impact net income (loss), it does result in a reduction or increase of income (loss) available to common shareholders in the calculation of diluted earnings (loss) per share (see Note 8).
 Three Months Ended 
 June 30,
 2017 2016
Interest income$214
 $234
Interest expense(16,235) (11,120)
Interest expense, net$(16,021) $(10,886)
Accounts Receivable
As of SeptemberJune 30 and March 31, 2016,2017, the allowance for doubtful accounts for non-affiliates was $5.0$3.5 million and $5.6$4.5 million, respectively. There were no allowances for doubtful accounts related to accounts receivable due from affiliates as of SeptemberJune 30 and March 31, 2016.2017. The allowance for doubtful accounts for non-affiliates as of SeptemberJune 30 and March 31, 20162017 primarily related to amounts due from two clientsa client in Nigeria and one client in Australia for which we no longer believedbelieve collection wasis probable.
Inventories
As of SeptemberJune 30 and March 31, 2016,2017, inventories were net of allowances of $29.2$22.7 million and $27.8$21.5 million, respectively. AsDuring the three months ended June 30, 2017, as a result of September 30, 2016, a decision was made to cease operationchanges in expected future utilization of certain older model aircraft within our training fleet we recorded a $1.2 million charge to impair inventory used on our training fleet, which is included in fiscal year 2018. This decision resulted in a change in estimateloss on impairment on our condensed consolidated statement of consumption of inventory utilized for the maintenance and repair of these aircraft leading to excess inventory on hand. In addition to recognizing this excess inventory, we also noted a continued decline in the recovery value for the disposal of this inventory into the aftermarket. This change in estimate of consumption and the continued decline in the secondary market for this inventory resulted in an impairment charge of $7.6 million recorded in the three and six months ended September 30, 2016.operations.
Prepaid Expenses and Other Current Assets
As of SeptemberJune 30 and March 31, 2016,2017, prepaid expenses and other current assets included the short-term portion of contract acquisition and pre-operating costs totaling $14.6$9.8 million and $12.1$9.7 million, respectively, related to the SAR contracts in the U.K. and Australia and atwo client contractcontracts in Norway, which are recoverable under the contracts and will be expensed over the terms of the contracts. For the three and six months ended SeptemberJune 30, 2017 and 2016, we have expensed $3.5$2.9 million and $5.7$2.2 million, respectively, duerelated to the start-up of some of these contracts.

9
Table of Contents
BRISTOW GROUP INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)

Loss on Impairment
Loss on impairment included goodwill impairment charges of $22.3 million for the three and six months ended September 30, 2015 and impairment charges for inventory of $7.6 million for the three and six months ended September 30, 2016 and $5.4 million for the six months ended September 30, 2015. The goodwill impairment recorded in fiscal year 2016 resulted from an overall reduction in expected operating results from the downturn in the oil and gas market driven by reduced crude oil prices and the inventory impairment for the six months ended September 30, 2015 was a result of our review of excess inventory on aircraft model types we planned to exit by the end of fiscal year 2016. See Inventories above for further details on the inventory impairment charges for the three and six months ended September 30, 2016.
Goodwill
Goodwill is recorded when the cost of acquired businesses exceeds the fair value of the identifiable net assets acquired. Goodwill has an indefinite useful life and is not amortized, but is assessed for impairment annually or when events or changes in circumstances indicate that a potential impairment exists.
Goodwill of $19.9 million and $19.8 million as of SeptemberJune 30 and March 31, 20162017, respectively, related to our reporting units waswere as follows (in thousands):
 Europe Caspian Asia Pacific Total
March 31, 2016$10,026
 $19,964
 $29,990
Foreign currency translation(964) (104) (1,068)
September 30, 2016$9,062
 $19,860
 $28,922
  Asia Pacific Total
March 31, 2017 $19,798
 $19,798
Foreign currency translation 109
 109
June 30, 2017 $19,907
 $19,907

8
Table of Contents
BRISTOW GROUP INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)

Accumulated goodwill impairment of $42.2$50.9 million as of Septemberboth June 30 and March 31, 20162017 related to our Europe Caspian, Africa, Corporate and other, and Americas regions in the amounts of $25.2 million, $6.2 million, $10.2 million and $0.6 million, respectively.reporting units were as follows (in thousands):
 Europe Caspian Africa Americas Corporate and other Total
March 31, 2017$(33,883) $(6,179) $(576) $(10,223) $(50,861)
Impairments—
 —
 —
 —
 —
June 30, 2017$(33,883) $(6,179) $(576) $(10,223) $(50,861)
Other Intangible Assets
Other Intangible Assets — Intangible assets with finite useful lives are amortized over their respective estimated useful lives to their estimated residual values. Intangible assets by type were as follows (in thousands):
 Client contracts Client relationships Trade name and trademarks Internally developed software Licenses Total
            
 Gross Carrying Amount
March 31, 2016$8,170
 $12,779
 $5,008
 $1,149
 $752
 $27,858
Foreign currency translation—
 1
 (389) (63) 4
 (447)
September 30, 2016$8,170
 $12,780
 $4,619
 $1,086
 $756
 $27,411
            
 Accumulated Amortization
March 31, 2016$(8,062) $(10,600) $(636) $(480) $(601) $(20,379)
Amortization expense(81) (299) (141) (107) (30) (658)
September 30, 2016$(8,143) $(10,899) $(777) $(587) $(631) $(21,037)
            
Weighted average remaining contractual life, in years0.2
 5.0
 13.6
 2.3
 2.1
 5.9
 
Client
contracts
 
Client
relationships
 Trade name and trademarks Internally developed software Licenses Total
            
 Gross Carrying Amount
March 31, 2017$8,169
 $12,752
 $4,483
 $1,062
 $746
 $27,212
Foreign currency translation—
 13
 127
 15
 2
 157
June 30, 2017$8,169
 $12,765
 $4,610
 $1,077
 $748
 $27,369
            
 Accumulated Amortization
March 31, 2017$(8,155) $(11,071) $(908) $(685) $(657) $(21,476)
Amortization expense(6) (71) (71) (53) (14) (215)
June 30, 2017$(8,161) $(11,142) $(979) $(738) $(671) $(21,691)
            
Weighted average remaining contractual life, in years0.1
 3.6
 13.1
 1.8
 1.6
 5.2
Future amortization expense of intangible assets for each of the years ending March 31 areis as follows (in thousands):
 2017$441
 
 2018872
 
 2019744
 
 2020456
 
 2021456
 
 Thereafter3,405
 
  $6,374
 

10
Table of Contents
BRISTOW GROUP INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)

2018$688
2019623
2020383
2021383
2022383
Thereafter3,218
 $5,678
The Bristow Norway AS and Eastern Airways acquisitions, included in our Europe Caspian region, resulted in intangible assets for client contracts, client relationships, trade names and trademarks, internally developed software and licenses. The Airnorth acquisition, included in our Asia Pacific region, resulted in intangible assets for client contracts, client relationships and trade name and trademarks.

9
Table of Contents
BRISTOW GROUP INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)

Other Assets
As of September 30 and March 31, 2016,In addition to the other intangible assets described above, other assets included the long-term portion of contract acquisition and pre-operating costs totaling $51.3$52.2 million and $55.1$51.1 million, respectively, as of June 30 and March 31, 2017, related to the SAR contracts in the U.K. and atwo client contractcontracts in Norway, which are recoverable under the contract and will be expensed over the terms of the contracts.
Property and Equipment and Assets Held for Sale

During the three and six months ended SeptemberJune 30, 20162017 and 2015,2016, we made capital expenditures as follows:
  Three Months Ended 
 September 30,		 Six Months Ended 
 September 30,
  2016
2015 2016
2015
 Number of aircraft delivered:       
 Medium5
 —
 5
 1
 SAR aircraft1
 1
 1
 2
 Total aircraft6
 1
 6
 3
 Capital expenditures (in thousands):       
 
Aircraft and related equipment (1)
$78,087
 $70,691
 $95,574
 $111,153
 Other2,716
 8,521
 6,292
 35,836
 Total capital expenditures$80,803
 $79,212
 $101,866
 $146,989
 Three Months Ended 
 June 30,
 2017
2016
Number of aircraft delivered:   
Medium3
 —
Total aircraft3
 —
Capital expenditures (in thousands):   
Aircraft and equipment (1)
$10,810
 $17,487
Land and buildings1,743
 3,576
Total capital expenditures$12,553
 $21,063
_____________ 
(1)
During the three months ended SeptemberJune 30, 20162017 and 2015,2016, we spent $63.7$1.3 million and $36.0 million, respectively, and during the six months ended September 30, 2016 and 2015, we spent $66.8 million and $64.3$3.1 million, respectively, on progress payments for aircraft to be delivered in future periods.

The following table presents details on the aircraft sold or disposed of and impairments on assets held for sale during the three and six months ended SeptemberJune 30, 20162017 and 2015:2016:
  Three Months Ended 
 September 30,		 Six Months Ended 
 September 30,
  2016 2015 2016 2015
         
  (In thousands, except for number of aircraft)
         
 Number of aircraft sold or disposed of—
 4
 6
 13
 Proceeds from sale or disposal of assets$329
 $6,806
 $11,819
 $16,107
 
Gain (loss) from sale or disposal of assets (1)
$(1,175) $(1,838) $(1,043) $329
         
 Number of aircraft impaired6
 10
 13
 11
 
Impairment charges on aircraft held for sale (1)
$1,011
 $12,169
 $11,160
 $22,031
 Three Months Ended 
 June 30,
 2017 2016
    
 (In thousands, except for number of aircraft)
    
Number of aircraft sold or disposed of6
 6
Proceeds from sale or disposal of assets$41,975
 $11,500
Gain from sale or disposal of assets (1)
$2,263
 $132
    
Number of aircraft impaired2
 11
Impairment charges on aircraft held for sale (1)
$1,564
 $10,149
_____________
(1) 
Included in gain (loss) on disposal of assets on our condensed consolidated statements of operations.
During the three months ended SeptemberJune 30, 2016, and 2015, we recorded accelerated depreciation of $1.3 million and $10.5 million on six and 21 aircraft, respectively, and during the six months ended September 30, 2016 and 2015, we recorded accelerated depreciation of $8.2 million and $19.3$6.9 million on 11 and 21 aircraft respectively, as our management decided to exit these model types earlier than originally anticipated. We expect to record an additional $2.2 million in depreciation expense over the remainder of fiscal year 2017 relating to this change in fleet exit timing. As discussed in “— Loss on Impairment” above, during the three months ended September 30, 2015, we noted an overall reduction in expected operating results due to the downturn in the oil and gas market driven by reduced crude oil prices. The impact on our results was reflected in an increase in the number

1110
Table of Contents
BRISTOW GROUP INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)

of idle aircraft and reduction in forecasted results across our global oil and gas helicopter operations, and was reflected in reduced operating revenue for our business for the three months ended September 30, 2015, when excluding growth from the U.K. SAR contract and the addition of Airnorth. The reduction in demand for aircraft in the offshore energy market led to further impairment of older model aircraft classified in held for sale as of September 30, 2015.
In accordance with Accounting Standards Codification 360-10, we record impairment losses on property and equipment when events and circumstances indicate that an asset group might be impaired and the undiscounted cash flows estimated to be generated by those asset groups are less than the carrying amount of those asset groups. The weakening of the British pound sterling during the three months ended June 30, 2016 triggered a review of our property and equipment for potential impairment. Conditions during the three months ended September 30, 2016 remained consistent with the conditions that existed during the three months ended June 30, 2016. Subsequent to September 30, 2016, the British pound sterling weakened further. If these conditions persist or other operating results deteriorate, it is reasonably possible that the estimate of undiscounted cash flows may change in the near term resulting in the need to write down our oil and gas related property and equipment.
Recent Accounting Pronouncements
We consider the applicability and impact of all accounting standard updates (“ASUs”). ASUs not listed below were assessed and determined to be either not applicable or are expected to have minimal impact on our consolidated financial position or results of operations.
In May 2014, the Financial Accounting Standards Board (the “FASB”) issued accounting guidance on revenue recognition for revenue from contracts with customers. This guidance requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers and will replace most existing revenue recognition guidance when it becomes effective. This new standard wasis effective for annual reporting periods beginning after December 15, 2016. However, in July 2015, the FASB approved the deferral of the effective date of the revenue recognition standard permitting public entities to apply the new revenue standard to annual reporting periods beginning after December 15, 2017. Early application is permitted, but not before the original effective date of December 15, 2016. The standard permits the use ofis required to be adopted using either the full retrospective approach, with all prior periods presented adjusted, or the modified retrospective approach, with a cumulative effectadjustment to retained earnings on the balance sheet. We have not adopted this standard yet but expect to adopt the new revenue standard using the modified retrospective transition method. We are currently evaluating our customer contractscontinuing to determineevaluate the effect this standardaccounting guidance will have on our financial statementsrelated disclosures and related disclosures. We have not yet selected a transition method nor have we determinedare still assessing the effect ofdifferences between the new revenue standard on our ongoing financial reporting.
In August 2014, the FASB issuedand current accounting guidance on determining when and how to disclose going-concern uncertainties in the financial statements. The new standard requires management to perform interim and annual assessments of an entity’s ability to continue as a going concern within a year of the date the financial statements are issued. The standard applies to all entities and is effective for annual and interim periods beginning after December 15, 2016 with early adoption permitted. We are evaluating the effect this standard will have on our financial statements and related disclosures.
In February 2015, the FASB issued accounting guidance which changes the analysis that a reporting entity must perform to determine whether it should consolidate certain types of legal entities. The guidance amends the criteria for determining which entities are considered Variable Interest Entities (“VIEs”) and amends the criteria for determining if a service provider possesses a variable interest in a VIE. This pronouncement is effective for annual and interim periods in fiscal years beginning after December 15, 2015. A reporting entity may apply the amendments using a modified retrospective approach or a full retrospective application. We have adopted this accounting guidance effective April 1, 2016 and there is no material effect on our financial statements and related disclosures.
In April 2015, the FASB issued accounting guidance relating to the presentation of debt issuance costs. The intent is to simplify the presentation of debt issuance costs by requiring entities to record debt issuance costs on the balance sheet as a direct deduction from the carrying amount of the related debt liability, similar to debt discounts or premiums. In August 2015, the FASB issued additional guidance to allow issuers to continue to recognize debt issuance costs related to line-of-credit arrangements as an asset and amortize that asset over the term of the credit agreement regardless of whether a balance is outstanding. These pronouncements are effective for fiscal years, and interim periods within those years, beginning after December 15, 2015. We have adopted this accounting guidance effective April 1, 2016. As a result of the adoption, we presented the $8.9 million of unamortized debt issuance costs that was previously included in other assets in our condensed consolidated balance sheet as of March 31, 2016 as direct deductions from the carrying amount of the related debt.practices.
In November 2015, the FASB issued a new standard which changesaccounting guidance that changed how deferred taxes are classified on an entity’s balance sheet. The guidance requires that all deferred tax assets and liabilities, along with any related valuation allowance, be classified as noncurrent on the balance sheet. The new guidance will beis effective for fiscal years, and interim periods within those years,

12
Table of Contents
BRISTOW GROUP INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)

beginning after December 15, 2016 and early adoption is permitted. The guidance may be applied either prospectively, for all deferred tax assets and liabilities, or retrospectively. If applied prospectively, entities are required to include a statement that prior periods were not retrospectively adjusted. If applied retrospectively, entities are also required to include quantitative information about the effects of the change on prior periods. We have not yet adopted this accounting guidance or determinedusing the methodprospective adjustment option effective April 1, 2017 and prior periods were not retrospectively adjusted. As of adoption butMarch 31, 2017, we believe the adoptionhad $0.1 million in current deferred tax assets and $0.8 million in current deferred tax liabilities. As a result of this guidance would reduceadoption, as of April 1, 2017 and going forward we will classify all current assets and current liabilities and increase long-term assets and long-term liabilities by such amounts.deferred taxes as non-current.
In February 2016, the FASB issued accounting guidance which amends the existing accounting standards for lease accounting, including requiring lessees to recognize most leases on their balance sheets and making targeted changes to lessor accounting. This pronouncementaccounting guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2018, with early adoption permitted. Additionally, this pronouncementaccounting guidance requires a modified retrospective transition approach for all leases existing at, or entered into after the date of initial application, with an option to use certain transition relief. We have not yet adopted this standard nor have we determinedand are currently evaluating the effect of thethis standard will have on our ongoing financial reporting.statements.
In March 2016, the FASB issued accounting guidance related to accounting for employee share-based payments. The amendments areaccounting guidance is intended to simplify several aspects of accounting for share-based payment award transactions including income tax consequences, classification of awards as either equity or liabilities and classification on the statements of cash flows. This accounting guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2016 and early adoption is permitted. We adopted this standard effective April 1, 2017. The requirements related to the tax consequences of share-based payments were applied prospectively and resulted in $1.6 million recorded as an increase to the income tax provision during the three months ended June 30, 2017. We elected to record forfeitures of share-based awards based on actual forfeitures which did not have a material effect on our financial statements. The provisions related to the presentation of excess tax benefits on the condensed consolidated statements of cash flows did not impact our financial statements as there was no excess tax benefit recorded for the periods presented. The provisions related to employee taxes paid for withheld shares are presented as a cash flow financing activity required us to revise our prior period condensed consolidated statement of cash flows by $0.6 million as a decrease in net cash used in operating activities and a corresponding decrease in net cash provided by financing activities for the three months ended June 30, 2016. None of the other provisions of the pronouncement had a material effect on our consolidated financial statements.
In August 2016, the FASB issued accounting guidance to reduce the diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. This guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, and early adoption is permitted. We have not yet adopted this standard on April 1, 2017 and are currently evaluating the effect this standard will havethere was no impact on our financial statements and related disclosures.statements.

11
Table of Contents
BRISTOW GROUP INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)

In October 2016, the FASB issued accounting guidance related to current and deferred income taxes for intra-entity transfer of assets other than inventory. This pronouncementaccounting guidance requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs and eliminates the exception for an intra-entity transfer of an asset other than inventory. This pronouncementaccounting guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, and early adoption is permitted. We have not yet adopted this standardaccounting guidance and are currently evaluating the effect this standardaccounting guidance will have on our financial statements.
In October 2016, the FASB issued accounting guidance related to interest held through related parties that are under common control. The pronouncementThis accounting guidance affects reporting entities that are required to evaluate whether they should consolidate a variable interest entity in certain situations involving entities under common control. Specifically, the pronouncementguidance changes the evaluation of whether a reporting entity is the primary beneficiary of a variable interest entity by changing how a reporting entity that is a single decision maker of a variable interest entity treats indirect interests in the entity held through related parties that are under common control with the reporting entity. The pronouncementaccounting guidance is effective for fiscal years beginning after December 15, 2016, and interim periods within those years, and early adoption is permitted. We adopted this standard effective April 1, 2017 and there was no impact on our financial statements.
In January 2017, the FASB issued accounting guidance which clarifies the definition of a business with the objective of adding guidance to assist in evaluating whether transactions should be accounted for as acquisitions of assets or businesses. The amendment provides criteria for determining when a transaction involves the acquisition of a business. If substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets, then the transaction does not involve the acquisition of a business. If the criteria are not met, then the amendment requires that to be considered a business, the operation must include at a minimum an input and a substantive process that together significantly contribute to the ability to create an output. The guidance may reduce the number of transactions accounted for as business acquisitions. This accounting guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, and early adoption is permitted. The amendments should be applied prospectively, and no disclosures are required at the effective date. We have not yet adopted this standardaccounting guidance and are currently evaluating the effect this standardaccounting guidance will have on our financial statements.
In March 2017, the FASB issued accounting guidance related to the presentation of net periodic pension cost and net periodic postretirement benefit cost. The guidance requires employers to disaggregate the service cost component from the other components of net benefit cost and disclose the amount of net benefit cost that is included in the statement of operations or capitalized in assets, by line item. The accounting guidance requires employers to report the service cost component in the same line item(s) as other compensation costs and to report other pension-related costs (which include interest costs, amortization of pension-related costs from prior periods, and the gains or losses on plan assets) separately and exclude them from the subtotal of operating income. The accounting guidance also allows only the service cost component to be eligible for capitalization when applicable. This guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2017, and early adoption is permitted as of the first interim period of an annual period for which interim or annual financial statements have not been issued. The guidance requires application on a retrospective basis for the presentation of the service cost component and the other components of net periodic pension cost and net periodic postretirement benefit cost in the statement of operations and on a prospective basis for the capitalization of the service cost component of net periodic pension cost and net periodic postretirement benefit in assets. We have not yet adopted this accounting guidance and are currently evaluating the effect this accounting guidance will have on our financial statements.
In May 2017, the FASB issued accounting guidance on determining which changes to the terms or conditions of share-based payment awards require an entity to apply modification accounting. This pronouncement is effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2017, with early adoption permitted, and is applied prospectively to changes in terms or conditions of awards occurring on or after the adoption date. We have not yet adopted this accounting guidance and are currently evaluating the effect this accounting guidance will have on our financial statements.


12
Table of Contents
BRISTOW GROUP INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)

Note 2 — VARIABLE INTEREST ENTITIES AND INVESTMENTS IN OTHER SIGNIFICANT AFFILIATES
A VIE is an entity that either (i) has insufficient equity to permit the entity to finance its activities without additional subordinated financial support or (ii) has equity investors who lack the characteristics of a controlling financial interest. A VIE is consolidated by its primary beneficiary. The primary beneficiary has both the power to direct the activities that most significantly impact the entity’s economic performance and the obligation to absorb losses or the right to receive benefits from the entity that could potentially be significant to the VIE. If we determine that we have operating power and the obligation to absorb losses or receive benefits, we consolidate the VIE as the primary beneficiary, and if not, we do not consolidate.
As of SeptemberJune 30, 20162017, we had interests in four VIEs of which we were the primary beneficiary, which are described below, and had no interests in VIEs of which we were not the primary beneficiary. See Note 3 to the fiscal year 20162017 Financial Statements for a description of other investments in significant affiliates.
Bristow Aviation Holdings Limited — We own 49% of Bristow Aviation Holdings Limited’s (“Bristow Aviation”) common stock and a significant amount of its subordinated debt. Bristow Aviation is incorporated in England and holds all of the outstanding shares in Bristow Helicopters Limited (“Bristow Helicopters”). Bristow Aviation’sAviation's subsidiaries provide industrial aviation services to clients primarily in the U.K, Norway, Australia, Nigeria and Trinidad and fixed wing services primarily in the U.K.U.K and Australia. Bristow Aviation is organized with three different classes of ordinary shares having disproportionate voting rights. The Company, Caledonia Investments plc (“Caledonia”) and a European Union investor (the “E.U. Investor”) own 49%, 46% and 5%, respectively, of Bristow Aviation’s total outstanding ordinary shares, although Caledonia has voting control over the E.U. Investor’s shares.

13
Table of Contents
BRISTOW GROUP INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)

In addition to our ownership of 49% of Bristow Aviation’s outstanding ordinary shares, in May 2004, we acquired eight million shares of deferred stock, essentially a subordinated class of stock with no voting rights, from Bristow Aviation for £1 per share ($14.4 million in total). We also have £91.0 million ($($118.2 million)million) principal amount of subordinated unsecured loan stock (debt) of Bristow Aviation bearing interest at an annual rate of 13.5% and payable semi-annually. Payment of interest on such debt has been deferred since its incurrence in 1996. Deferred interest accrues at an annual rate of 13.5% and aggregated $1.8$1.9 billion as of SeptemberJune 30, 20162017.
The Company, Caledonia, the E.U. Investor and Bristow Aviation have entered into a shareholder agreement respecting, among other things, the composition of the board of directors of Bristow Aviation. On matters coming before Bristow Aviation’s board, Caledonia’s representatives have a total of three votes and the two other directors have one vote each. In addition, Caledonia has the right to nominate two persons to our board of directors and to replace any such directors so nominated.
Caledonia, the Company and the E.U. Investor also have entered into a put/call agreement under which, upon giving specified prior notice, we have the right to buy all the Bristow Aviation shares held by Caledonia and the E.U. Investor, who, in turn, each have the right to require us to purchase such shares. Under current English law, we would be required, in order for Bristow Aviation to retain its operating license, to find a qualified E.U. investor to own any Bristow Aviation shares we have the right to acquire under the put/call agreement. The only restriction under the put/call agreement limiting our ability to exercise the put/call option is a requirement to consult with the Civil Aviation Authority (the “CAA”) in the U.K. regarding the suitability of the new holder of the Bristow Aviation shares. The put/call agreement does not contain any provisions should the CAA not approve the new E.U. investor. However, we would work diligently to find an E.U. investor suitable to the CAA. The amount by which we could purchase the shares of the other investors holding 51% of the equity of Bristow Aviation is fixed under the terms of the call option, and we have reflected this amount on our condensed consolidated balance sheets as noncontrolling interest.
Furthermore, the call option provides a mechanism whereby the economic risk for the other investors is limited should the financial condition of Bristow Aviation deteriorate. The call option price is the nominal value of the ordinary shares held by the noncontrolling shareholders (£1.0 million as of SeptemberJune 30, 20162017) plus an annual guaranteed rate of return less any prepayments of such call option price and any dividends paid on the shares concerned. We can elect to pre-pay the guaranteed return element of the call option price wholly or in part without exercising the call option. No dividends have been paid by Bristow Aviation. We have accrued the annual return due to the other shareholders at a rate of sterling LIBOR plus 3% (prior to May 2004, the rate was fixed at 12%) by recognizing noncontrolling interest expense on our condensed consolidated statements of operations, with a corresponding increase in noncontrolling interestsinterest on our condensed consolidated balance sheets. Prepayments of the guaranteed return element of the call option are reflected as a reduction in noncontrolling interestsinterest on our condensed consolidated balance sheets. The other investors have an option to put their shares in Bristow Aviation to us. The put option price is calculated in the same way as the call option price except that the guaranteed rate for the period to April 2004 was 10% per annum. If the put option is exercised, any pre-payments of the call option price are set off against the put option price.

1413
Table of Contents
BRISTOW GROUP INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)

Bristow Aviation and its subsidiaries are exposed to similar operational risks and are therefore monitored and evaluated on a similar basis by management. Accordingly, the financial information reflected on our condensed consolidated balance sheets and statements of operations for Bristow Aviation and subsidiaries is presented in the aggregate, including intercompany amounts with other consolidated entities, as follows (in thousands):
   September 30, 
 2016		 March 31,  
 2016		 
 Assets     
 Cash and cash equivalents $99,651
 $62,773
 
 Accounts receivable 585,968
 565,223
 
 Inventories 91,371
 102,738
 
 Prepaid expenses and other current assets 60,718
 53,776
 
 Total current assets 837,708
 784,510
 
 Investment in unconsolidated affiliates 3,862
 4,676
 
 Property and equipment, net 227,078
 251,494
 
 Goodwill 28,922
 29,990
 
 Other assets 75,369
 82,443
 
 Total assets $1,172,939
 $1,153,113
 
 Liabilities     
 Accounts payable $638,959
 $521,563
 
 Accrued liabilities 142,315
 141,977
 
 Accrued interest 1,830,005
 1,698,360
 
 Current maturities of long-term debt 12,595
 10,322
 
 Total current liabilities 2,623,874
 2,372,222
 
 Long-term debt, less current maturities 138,479
 155,222
 
 Accrued pension liabilities 55,036
 70,107
 
 Other liabilities and deferred credits 4,327
 7,928
 
 Deferred taxes 8,753
 20,330
 
 Redeemable noncontrolling interest 13,175
 15,473
 
 Total liabilities $2,843,644
 $2,641,282
 
   June 30, 
 2017		 March 31,  
 2017
 Assets    
 Cash and cash equivalents $71,364
 $92,409
 Accounts receivable 233,627
 222,560
 Inventories 96,646
 90,190
 Prepaid expenses and other current assets 42,548
 50,016
 Total current assets 444,185
 455,175
 Investment in unconsolidated affiliates 3,531
 3,513
 Property and equipment, net 315,403
 306,831
 Goodwill 19,907
 19,798
 Other assets 207,268
 203,228
 Total assets $990,294
 $988,545
 Liabilities    
 Accounts payable $184,308
 $146,841
 Accrued liabilities 129,699
 122,130
 Accrued interest 1,945,668
 1,891,305
 Current maturities of long-term debt 18,821
 18,578
 Total current liabilities 2,278,496
 2,178,854
 Long-term debt, less current maturities 477,781
 501,782
 Accrued pension liabilities 60,057
 61,647
 Other liabilities and deferred credits 8,005
 8,138
 Deferred taxes 15,767
 20,264
 Redeemable noncontrolling interest 6,349
 6,886
 Total liabilities $2,846,455
 $2,777,571
 
   Three Months Ended 
 September 30,		 Six Months Ended 
 September 30,		 
   2016 2015 2016 2015 
 Revenue $310,325
 $377,362
 $628,779
 $764,133
 
 Operating loss (20,773) (9,829) (40,516) (27,573) 
 Net loss (80,794) (78,938) (169,337) (143,715) 
   Three Months Ended 
 June 30,
   2017 2016
 Revenue $301,970
 $318,454
 Operating loss (19,654) (19,743)
 Net loss (79,169) (88,543)

14
Table of Contents
BRISTOW GROUP INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)

Bristow Helicopters Nigeria Ltd. — Bristow Helicopters Nigeria Ltd. (“BHNL”) is a joint venture in Nigeria in which Bristow Helicopters owned a 48% interest, a Nigerian company owned 100% by Nigerian employees owned a 50% interest and an employee trust fund owned the remaining 2% interest as of SeptemberJune 30, 2016.2017. BHNL provides industrial aviation services to clients in Nigeria.
In order to be able to bid competitively for our services in the Nigerian market, we were required to identify local citizens to participate in the ownership of entities domiciled in the region. However, these owners do not have extensive knowledge of the aviation industry and have historically deferred to our expertise in the overall management and day-to-day operation of BHNL (including the establishment of operating and capital budgets and strategic decisions regarding the potential expansion of BHNL’s operations). We have also historically provided subordinated financial support to BHNL and will need to continue to do so unless and until BHNL acquires sufficient equity to permit itself to finance its activities without that additional support from us. As we have the power to direct the most significant activities affecting the economic performance and ongoing success of BHNL and hold a variable interest in the entity in the form of our equity investment and working capital infusions, we consolidate BHNL as the primary beneficiary. The employee-owned Nigerian entity referenced above purchased a 19% interest in BHNL in December 2013 with proceeds from a loan received from BGI Aviation Technical Services Nigeria Limited (“BATS”). In July 2014, the employee-owned Nigerian entity purchased an additional 29% interest with proceeds from a loan received from Bristow Helicopters (International) Limited (“BHIL”). In April 2015, Bristow Helicopters purchased an additional 8% interest in BHNL and the employee-owned Nigerian entity purchased an additional 2% interest with proceeds from a loan received from BHIL. Both BATS

15
Table of Contents
BRISTOW GROUP INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)

and BHIL are wholly-owned subsidiaries of Bristow Aviation. The employee-owned Nigerian entity is also a VIE that we consolidate as the primary beneficiary and we eliminate the loans discussed above in consolidation.
BHNL is an indirect subsidiary of Bristow Aviation; therefore, financial information for this entity is included within the amounts for Bristow Aviation and its subsidiaries presented above.
Pan African Airlines Nigeria Ltd. — Pan African Airlines Nigeria Ltd. (“PAAN”) is a joint venture in Nigeria with local partners in which we own a 50.17% interest. PAAN provides industrial aviation services to clients in Nigeria.

The activities that most significantly impact PAAN’s economic performance relate to the day-to-day operation of PAAN, setting the operating and capital budgets and strategic decisions regarding the potential expansion of PAAN’s operations. Throughout the history of PAAN, our representation on the board and our secondment to PAAN of its managing director has enabled us to direct the key operational decisions of PAAN (without objection from the other board members). We have also historically provided subordinated financial support to PAAN. As we have the power to direct the most significant activities affecting the economic performance and ongoing success of PAAN and hold a variable interest in the form of our equity investment and working capital infusions, we consolidate PAAN as the primary beneficiary. However, as long as we own a majority interest in PAAN, the separate presentation of financial information in a tabular format for PAAN is not required.


15
Table of Contents
BRISTOW GROUP INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)

Note 3 — DEBT
Debt as of SeptemberJune 30 and March 31, 20162017 consisted of the following (in thousands):
   September 30, 
 2016		 March 31,  
 2016		 
 6¼% Senior Notes due 2022 $401,535
 $401,535
 
 Term Loan 321,720
 335,665
 
 Term Loan Credit Facility 200,000
 200,000
 
 Revolving Credit Facility 233,450
 144,000
 
 Airnorth debt 18,284
 19,652
 
 Eastern Airways debt 14,947
 15,643
 
 Other debt 40,521
 24,394
 
 Unamortized debt issuance costs (8,911) (8,917) 
 Total debt 1,221,546
 1,131,972
 
 Less short-term borrowings and current maturities of long-term debt (81,510) (60,394) 
 Total long-term debt $1,140,036
 $1,071,578
 
  June 30, 
 2017		 March 31,  
 2017
6¼% Senior Notes due 2022 $401,535
 $401,535
Term Loan 253,180
 261,907
Term Loan Credit Facility 45,900
 45,900
Revolving Credit Facility 174,500
 139,100
Lombard Debt 202,514
 196,832
Macquarie Debt 195,528
 200,000
Airnorth Debt 15,826
 16,471
Eastern Airways Debt 14,701
 15,326
Other Debt —
 16,293
Unamortized debt issuance costs (11,118) (11,345)
Total debt 1,292,566
 1,282,019
Less short-term borrowings and current maturities of long-term debt (117,817) (131,063)
Total long-term debt $1,174,749
 $1,150,956
Term Loan and Revolving Credit Facility — On September 16, 2016,During the three months endedJune 30, 2017, we entered into a ninth amendment (the “Ninth Amendment”) tohad borrowings of $68.8 million and made payments of $33.4 million under our amended and restated revolving credit and term loan agreement (the “Amended and Restated Credit Agreement”), which includes a $400 million revolving credit facility with a subfacility of $30 million for letters of credit (the “Revolving Credit Facility”) and a five-year, $350. As of June 30, 2017, we had $11.4 million term loan (the “Term Loan”, and together within letters of credit outstanding under the Revolving Credit Facility,Facility.
Other Debt — Other Debt as of March 31, 2017 primarily included amounts payable relating to the “Credit Facilities”) that changed the definitionthird year earn-out payment of a change$16.0 million for our investment in control.Cougar Helicopters Inc. (“Cougar”), which was paid in April 2017.
July 2017 Credit Agreement — On May 23, 2016, weJuly 17, 2017, one of our wholly-owned subsidiaries entered into a multiple advance term loan credit agreement with PK Transportation Finance Ireland Limited and the several banks, other financial institutions and other lenders from time to time party thereto, which provides for commitments in an eighth amendmentaggregate amount of up to $230 million to make up to 24 term loans, each of which term loans shall be made in respect of an aircraft to be pledged as collateral for all of the term loans. The term loans also will be secured by a pledge of all shares of the borrower and any other assets of the borrower, and will be guaranteed by the Company.
Each term loan will bear interest at an interest rate equal to, at the borrower’s option, a floating rate of one-month LIBOR plus a margin of 5% per annum (the “Eighth Amendment”“Margin”), subject to certain costs of funds adjustments, determined two business days before the Amended and Restated Credit Agreement that,borrowing date of each term loan, or a fixed rate based on a notional interest rate swap of twelve 30-day months in respect of such term loan with a floating rate of interest based on one-month LIBOR, plus the Margin.
The borrower is required to repay each term loan on an annuity basis, payable monthly in arrears starting on the seventh month following the date of the borrowing of such term loan, with a final payment of 53% of the initial amount of such term loan due on the 70th month following the date of the borrowing of such term loan.
In connection with the credit agreement, the borrower will guarantee certain of its direct parent’s obligations under existing aircraft operating leases up to a capped amount.
The proceeds of the term loans, which are expected to fund on or before August 30, 2017 unless otherwise extended, are expected to be used to, among other things, (a) replaced the maximum leverage ratio requirement with a maximum senior secured leverage ratio defined as the ratiorepay portions of the sum of senior secured debt and the present value of obligations under operating leases to consolidated EBITDA for the most recent four consecutive fiscal quarters, which ratio may not be greater than 4.25:1.00 for each fiscal quarter ending during the period from March 31, 2016 through September 30, 2017 and 4.00:1.00 for each fiscal quarter ending thereafter, (b) replaced the interest coverage ratio requirement with a minimum current ratio, defined as the ratiooutstanding term loan indebtedness of the sum of consolidated current assets minus the book value of aircraft heldCompany and for sale plus the unused amount of aggregate revolving commitments less $25 milliongeneral corporate purposes. The lenders are not obligated to consolidated current liabilities, which may not be not less than 1.00:1.00 asfund any of the last day of each fiscal quarter, (c) allows forterm loans until the issuancesatisfaction of certain additional indebtedness whenconditions to funding, as specified in the leverage ratio exceeds 4.75:1.00, including (i) unsecured, subordinated or convertible indebtedness to refinance outstanding term loans under the Amended and Restated Credit Agreement and our senior secured term loan agreement (the “Term Loan Credit Agreement”), (ii) additional unsecured, subordinated or convertible indebtedness of up to $100 million in principal amount, (iii) equipment financings, including, without limitation, aircraft sale and leaseback transactions, and (iv) financings of U.K. bases with respect to helicopter SAR services and (d) limits cash dividends on our common stock to $0.07 per share per quarter. In addition, in connection with the Eighth Amendment and the first amendment to the Term Loan Credit Agreement described below, certain of our U.S. subsidiaries have granted liens on certain of their aircraft to secure our obligations under the Amended and Restated Credit Agreement and the Term Loan Creditcredit agreement.


16
Table of Contents
BRISTOW GROUP INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)

Agreement on a pari passu secured basis in favor of the lenders under each such agreement. Also as part of the Eighth Amendment, the applicable margin for borrowings under the Credit Facilities will range from 0.50% to 3.50% depending on whether the Base Rate or LIBOR was used and based on our leverage ratio pricing grid.
During the six months endedSeptember 30, 2016, we had borrowings of $191.5 million and made payments of $102.1 million under the Revolving Credit Facility. Additionally, we paid $14.0 million to reduce our borrowings under the Term Loan. As of September 30, 2016, we had $0.6 million in letters of credit outstanding under the Revolving Credit Facility.
Term Loan Credit Facility — On September 16, 2016, we entered into a second amendment to the Term Loan Credit Agreement that incorporates, as applicable, the provisions of the Ninth Amendment described above. On May 23, 2016, we entered into the first amendment to the Term Loan Credit Agreement that, among other things, incorporates, as applicable, the provisions of the Eighth Amendment described above.
Other Debt — Other debt includes borrowings for aircraft purchase payments totaling $24.8 million with interest rates ranging from 2.5% to 3.5% in December 2016 and January 2017 and amounts payable relating to the third year earn-out payment for our investment in Cougar Helicopters Inc. (“Cougar”) totaling $15.7 million due in April 2017.
Note 4 — FAIR VALUE DISCLOSURES
Assets and liabilities subject to fair value measurement are categorized into one of three different levels depending on the observability of the inputs employed in the measurement, as follows:
Level 1 – observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.
Level 2 – inputs that reflect quoted prices for identical assets or liabilities in markets which are not active; quoted prices for similar assets or liabilities in active markets; inputs other than quoted prices that are observable for the asset or liability; or inputs that are derived principally from or corroborated by observable market data by correlation or other means.
Level 3 – unobservable inputs reflecting the Company’s own assumptions incorporated in valuation techniques used to determine fair value. These assumptions are required to be consistent with market participant assumptions that are reasonably available.
Non-recurring Fair Value Measurements
The majority of our non-financial assets, which include inventories, property and equipment, assets held for sale, goodwill and other intangible assets, are not required to be carried at fair value on a recurring basis. However, if certain triggering events occur such that a non-financial asset is required to be evaluated for impairment and deemed to be impaired, the impaired non-financial asset is recorded at its fair value.
The following table summarizes the assets as of SeptemberJune 30, 2017, valued at fair value on a non-recurring basis (in thousands):
  Quoted Prices in Active
Markets for
Identical Assets
(Level 1)		 Significant Other
Observable Inputs
(Level 2)		 Significant
Unobservable
Inputs
(Level 3)		 Balance as of
June 30,
2017		 Total
Loss for the
Three Months
Ended
June 30,
2017
Inventories $—
 $1,252
 $—
 $1,252
 $(1,192)
Assets held for sale —
 34,585
 —
 34,585
 (1,564)
Total assets $—
 $35,837
 $—
 $35,837
 $(2,756)
The following table summarizes the assets as of June 30, 2016, valued at fair value on a non-recurring basis (in thousands): 
  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, 2016		 Total
Loss for the
Three Months
Ended
September 30, 2016
 Total
Loss for the
Six Months
Ended
September 30, 2016
Inventories $—
 $56,355
 $—
 $56,355
 $(7,572) $(7,572)
Assets held for sale —
 40,338
 —
 40,338
 (1,011) (11,160)
Total assets $—
 $96,693
 $—
 $96,693
 $(8,583) $(18,732)

17
Table of Contents
BRISTOW GROUP INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)

The following table summarizes the assets as of September 30, 2015, valued at fair value on a non-recurring basis (in thousands):
 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, 2015		 Total
Loss for the
Three Months
Ended
September 30, 2015		 Total
Loss for the
Six Months
Ended
September 30, 2015		 Quoted Prices in Active
Markets for
Identical Assets
(Level 1)		 Significant Other
Observable Inputs
(Level 2)		 Significant
Unobservable
Inputs
(Level 3)		 Balance as of
June 30,
2016		 Total
Loss for the
Three Months
Ended
June 30,
2016
Inventories $—
 $12,118
 $—
 $12,118
 $—
 $(5,439)
Assets held for sale —
 33,647
 —
 33,647
 (12,169) (22,031) $—
 $40,572
 $—
 $40,572
 $(10,149)
Goodwill —
 —
 52,404
 52,404
 (22,274) (22,274)
Total assets $—
 $45,765
 $52,404
 $98,169
 $(34,443) $(49,744) $—
 $40,572
 $—
 $40,572
 $(10,149)
The fair value of inventories using Level 2 inputs is determined by evaluating the current economic conditions for sale and disposal of spare parts, which includes estimates as to the recoverability of the carrying value of the parts based on historical experience with sales and disposal of similar spare parts, the expected timeframe of sales or disposals, the location of the spare parts to be sold and the condition of the spare parts to be sold or otherwise disposed of.
The fair value of assets held for sale using Level 2 inputs is determined through evaluation of expected sales proceeds for aircraft. This analysis includes estimates based on historical experience with sales, recent transactions involving similar assets, quoted market prices for similar assets and condition and location of aircraft to be sold or otherwise disposed of. The loss for the three and six months ended SeptemberJune 30, 20162017 related to six and 132 aircraft held for sale respectively, and the loss for the three and six months ended SeptemberJune 30, 20152016 related to 10 and 11 aircraft held for sale, respectively.sale.
The fair value of goodwill is estimated using a variety of valuation methods, including the income and market approaches. These estimates of fair value include unobservable inputs, representative of Level 3 fair value measurement, including assumptions related to future performance, such as projected demand for our services and rates. For further details on our goodwill, see Note 1.
Recurring Fair Value Measurements
The following table summarizes the financial instruments we had as of September 30, 2016, valued at fair value on a recurring basis (in thousands):
  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, 2016 Balance  Sheet
Classification
Rabbi Trust investments $3,190
 $—
 $—
 $3,190
 Other assets
Total assets $3,190
 $—
 $—
 $3,190
  
           
Contingent consideration: (1)
          
      Current $—
 $—
 $7,352
 $7,352
 Contingent consideration
Total liabilities $—
 $—
 $7,352
 $7,352
  
______________

(1)
Relates to the acquisition of Airnorth totaling $7.4 million. For further details on Airnorth, see Note 2 to the fiscal year 2016 Financial Statements.

1817
Table of Contents
BRISTOW GROUP INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)

Recurring Fair Value Measurements
The following table summarizes the financial instruments we had as of June 30, 2017, valued at fair value on a recurring basis (in thousands):
  Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)		 Significant
Other
Observable
Inputs
(Level 2)		 Significant
Unobservable
Inputs
(Level 3)		 Balance as of
June 30,
2017		 Balance  Sheet
Classification
Rabbi Trust investments $2,201
 $—
 $—
 $2,201
 Other assets
Total assets $2,201
 $—
 $—
 $2,201
  
The following table summarizes the financial instruments we had as of March 31, 20162017, valued at fair value on a recurring basis (in thousands):
  Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)		 Significant
Other
Observable
Inputs
(Level 2)		 Significant
Unobservable
Inputs
(Level 3)		 Balance as of March 31, 2016 Balance  Sheet
Classification
Rabbi Trust investments $2,990
 $—
 $—
 $2,990
 Other assets
Total assets $2,990
 $—
 $—
 $2,990
  
           
Contingent consideration: (1)
          
      Current $—
 $—
 $29,522
 $29,522
 Contingent consideration
      Long-term —
 —
 3,069
 3,069
 Other liabilities and deferred credits
Total liabilities $—
 $—
 $32,591
 $32,591
  
  Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)		 Significant
Other
Observable
Inputs
(Level 2)		 Significant
Unobservable
Inputs
(Level 3)		 Balance as of
March 31,
2017		 Balance  Sheet
Classification
Rabbi Trust investments $3,075
 $—
 $—
 $3,075
 Other assets
Total assets $3,075
 $—
 $—
 $3,075
  
______________

(1)
Relates to our investment in Cougar totaling $26.0 million and Airnorth totaling $6.6 million. For further details on Cougar and Airnorth, see Notes 2 and 3 to the fiscal year 2016 Financial Statements.
The rabbi trust investments consist of cash and mutual funds whose fair value are based on quoted prices in active markets for identical assets, and are designated as Level 1 within the valuation hierarchy. The rabbi trust holds investments related to our non-qualified deferred compensation plan for our senior executives.
The following table provides a rollforward of the contingent consideration liability Level 3 fair value measurements during the six months ended September 30, 2016 (in thousands):
  
Significant
Unobservable
Inputs (Level 3)
Balance as of March 31, 2016 $32,591 
        Change in fair value of contingent consideration 761 
Payment of Cougar third year earn-out (10,000)
Reclass of remaining Cougar third year earn-out to short-term borrowings and other accrued liabilities (16,000)
Balance as of September 30, 2016 $7,352 
We assess the estimated fair value of the contractual obligation to pay the contingent consideration on a quarterly basis and any changes in estimated fair value are recorded as accretion expense included in depreciation and amortization on our condensed consolidated statements of operations. Fluctuations in the fair value of contingent consideration are impacted by two unobservable inputs, management’s estimate of the probability of Cougar or Airnorth achieving certain agreed performance targets and the estimated discount rate. As of September 30 and March 31, 2016, the discount rate approximated 4% for the contingent consideration related to Cougar and 2% for the contingent consideration related to Airnorth.

19
Table of Contents
BRISTOW GROUP INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)

Fair Value of Debt
The fair value of our debt has been estimated in accordance with the accounting standard regarding fair value. The fair value of our fixed rate long-term debt is estimated based on quoted market prices. The carrying and fair value of our long-term debt, including the current portion and excluding unamortized debt issuance costs, are as follows (in thousands):
  September 30, 2016 March 31, 2016
  
Carrying
Value
 Fair Value 
Carrying
Value
 Fair Value
6¼% Senior Notes $401,535
 $294,124
 $401,535
 $277,059
Term Loan 321,720
 321,720
 335,665
 335,665
Term Loan Credit Facility 200,000
 200,000
 200,000
 200,000
Revolving Credit Facility 233,450
 233,450
 144,000
 144,000
Airnorth debt 18,284
 18,284
 19,652
 19,652
Eastern Airways debt 14,947
 14,947
 15,643
 15,643
Other debt 40,521
 40,521
 24,394
 24,394
  $1,230,457
 $1,123,046
 $1,140,889
 $1,016,413
  June 30, 2017 March 31, 2017
  
Carrying
Value
 Fair Value 
Carrying
Value
 Fair Value
6��% Senior Notes $401,535
 $252,967
 $401,535
 $323,236
Term Loan 253,180
 253,180
 261,907
 261,907
Term Loan Credit Facility 45,900
 45,900
 45,900
 45,900
Revolving Credit Facility 174,500
 174,500
 139,100
 139,100
Lombard Debt 202,514
 202,514
 196,832
 196,832
Macquarie Debt 195,528
 195,528
 200,000
 200,000
Airnorth Debt 15,826
 15,826
 16,471
 16,471
Eastern Airways Debt 14,701
 14,701
 15,326
 15,326
Other Debt —
 —
 16,293
 16,293
  $1,303,684
 $1,155,116
 $1,293,364
 $1,215,065
Other
The fair values of our cash and cash equivalents, accounts receivable and accounts payable approximate their carrying values due to the short-term nature of these items.


18
Table of Contents
BRISTOW GROUP INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)

Note 5 — COMMITMENTS AND CONTINGENCIES
Aircraft Purchase Contracts — As shown in the table below, we expect to make additional capital expenditures over the next fivesix fiscal years to purchase additional aircraft. As of SeptemberJune 30, 20162017, we had 3529 aircraft on order and options to acquire an additional sixfour aircraft. Although a similar number of our existing aircraft may be sold during the same period, the additional aircraft on order will provide incremental fleet capacity in terms of revenue and operating income.
 Six Months Ending March 31, 2017 Fiscal Year Ending March 31,   Nine Months Ending March 31, 2018 Fiscal Year Ending March 31,  
 2018 2019 2020 
2021 and thereafter(1)
 Total 2019 2020 2021 
2022 and thereafter(1)
 Total
Commitments as of September 30, 2016: (2)
            
Commitments as of June 30, 2017: (2)
            
Number of aircraft:                        
Medium —
 5
 —
 —
 —
 5
 2
 —
 —
 —
 —
 2
Large —
 —
 5
 4
 14
 23
 —
 5
 4
 4
 10
 23
U.K. SAR 3
 4
 —
 —
 —
 7
 4
 —
 —
 —
 —
 4
 3
 9
 5
 4
 14
 35
 6
 5
 4
 4
 10
 29
Related expenditures (in thousands) (3)
            
Related commitment expenditures (in thousands) (3)
            
Medium and large $4,598
 $2,263
 $92,734
 $72,133
 $194,625
 $366,353
 $995
 $94,804
 $74,118
 $71,124
 $128,857
 $369,898
U.K. SAR 4,633
 58,208
 —
 —
 —
 62,841
 62,889
 —
 —
 —
 —
 62,889
 $9,231
 $60,471
 $92,734
 $72,133
 $194,625
 $429,194
 $63,884
 $94,804
 $74,118
 $71,124
 $128,857
 $432,787
Options as of September 30, 2016:            
Options as of June 30, 2017:            
Number of aircraft:                        
Medium —
 2
 —
 —
 —
 2
Large —
 2
 2
 —
 —
 4
 —
 2
 2
 —
 —
 4
 —
 4
 2
 —
 —
 6
 —
 2
 2
 —
 —
 4
                        
Related expenditures (in thousands)(3)
 $5,429
 $64,806
 $30,410
 $—
 $—
 $100,645
Related option expenditures (in thousands) (3)
 $—
 $44,181
 $31,536
 $—
 $—
 $75,717
_____________ 
(1) 
Includes $83.7$86.0 million for five aircraft orders that can be cancelled prior to delivery dates. During the three months ended SeptemberAs of June 30, 2016,2017, we made non-refundable deposits of $4.5 million related to these aircraft.
(2) 
Signed client contracts are currently in place that will utilize sevenfour of these U.K. SAR aircraft.

20
Table of Contents
BRISTOW GROUP INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)

(3) 
Includes progress payments on aircraft scheduled to be delivered in future periods.periods only if options are exercised.
The following chart presents an analysis of our aircraft orders and options during fiscal yearthe three months ended June 30, 2017:
   Three Months Ended
   September 30, 2016 June 30, 2016
   Orders Options Orders Options
 Beginning of period 36
 10
 36
 14
 Aircraft delivered (6) —
 —
 —
 Aircraft ordered 5
 —
 —
 —
 Expired options —
 (4) —
 (4)
 End of period 35
 6
 36
 10
   Orders Options
 Beginning of period 32
 4
 Aircraft delivered (3) —
 End of period 29
 4
We periodically purchase aircraft for which we have no orders.
Operating Leases — We have non-cancelable operating leases in connection with the lease of certain equipment, land and facilities, including leases for aircraft. Rental expense incurred under all operating leases was $51.9$58.7 million and $54.4$51.3 million for the three months ended SeptemberJune 30, 20162017 and 20152016, respectively, and $103.2 million and $108.3 million for the six months ended September 30, 2016 and 2015, respectively. Rentalwhich includes rental expense incurred under operating leases for aircraft was $46.1of $51.7 million and $47.3$44.7 million, for the three months ended September 30, 2016 and 2015, respectively, and $90.8 million and $93.9 million for the six months ended September 30, 2016 and 2015, respectively.

19
Table of Contents
BRISTOW GROUP INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)

The aircraft leases range from base terms of up to 180 months with renewal options of up to 240 months in some cases, include purchase options upon expiration and some include early purchase options. The leases contain terms customary in transactions of this type, including provisions that allow the lessor to repossess the aircraft and require us to pay a stipulated amount if we default on our obligations under the agreements. The following is a summary of the terms related to aircraft leased under operating leases with original or remaining terms in excess of one year as of SeptemberJune 30, 2016:2017:
 End of Lease Term Number of Aircraft
 SixNine months ending March 31, 20172018 to fiscal year 20182019 1929
 Fiscal year 20192020 to fiscal year 20212022 5648
 Fiscal year 20222023 to fiscal year 20252024 1614
   91
We lease six S-92 model aircraft and one AW139 model aircraft from VIH Aviation Group, which is a related party due to common ownership of Cougar; we paid lease fees of $4.5 million for the three months ended June 30, 2017. Additionally, in July 2016, we began leasing a facility in Galliano, Louisiana from VIH Helicopters USA, Inc., another related party due to common ownership of Cougar; we paid $0.1 million in lease fees during three months ended June 30, 2017.
Employee Agreements — Approximately 57%53% of our employees are represented by collective bargaining agreements and/or unions with 76%84% of these employees being represented by collective bargaining agreements and/or unions that have expired or will expire in one year. These agreements generally include annual escalations of up to 4%3%. Periodically, certain groups of our employees who are not covered by a collective bargaining agreement consider entering into such an agreement. We also have employment agreements with members of senior management.

Separation Programs — In March 2015 and May 2016, we offered voluntary separation programs (“VSPs”) to certain employees as part of our ongoing efforts to improve efficiencies and reduce costs. Additionally, beginning in March 2015, we initiated involuntary separation programs (“ISPs”) in certain regions. Also, during June 2017, two named executive officers and the principal operating officer, along with other employees across various regions, departed from the Company as part of an organizational restructuring. In April 2016, one named executive officer, along with other employees across various regions, departed from the Company as part of a previous restructuring. We recognized compensation expense related to the departure of these officers and other employees included in the table below. The expense related to the VSPs and ISPs for the three and six months ended SeptemberJune 30, 20162017 and 20152016 is as follows (in thousands):
 Three Months Ended 
 September 30,		 Six Months Ended 
 September 30,
 2016 2015 2016 2015
VSP:       
Direct cost$590
 $886
 $1,445
 $6,677
General and administrative—
 —
 23
 597
Total$590
 $886
 $1,468
 $7,274
        
ISP:       
Direct cost$4,398
 $2,045
 $4,896
 $2,561
General and administrative4,565
 2,769
 8,595
 3,856
Total$8,963
 $4,814
 $13,491
 $6,417


21
Table of Contents
BRISTOW GROUP INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)

On April 18, 2016, Mr. Jeremy Akel departed the Company as Senior Vice President and Chief Operating Officer. Mr. Akel and the Company have entered into a Separation Agreement and Release in Full, dated June 7, 2016 to specify the terms of his departure from the Company, pursuant to which he will receive benefits generally consistent with the termination without cause terms set forth in the Bristow Group Inc. Management Severance Benefits Plan for U.S. Employees effective June 4, 2014 and the Amended and Restated Severance Benefits Agreement between Mr. Akel and the Company dated April 20, 2012. Additionally, on July 1, 2016, Ms. Hilary Ware departed the Company as Senior Vice President and Chief Administration Officer. Ms. Ware and the Company have entered into a Separation Agreement and Release in Full, dated July 14, 2016 to specify the terms of her departure from the Company, pursuant to which she will receive benefits generally consistent with the termination without cause terms set forth in the Bristow Group Inc. Management Severance Benefits Plan for U.S. Employees effective June 4, 2014 and the Amended and Restated Severance Benefits Agreement between Ms. Ware and the Company dated November 4, 2010. We recognized compensation expense related to the departure of Mr. Akel during the three months ended June 30, 2016 and Ms. Ware during the three months ended September 30, 2016 included in the amounts above.
 Three Months Ended 
 June 30,
 2017 2016
VSP:   
Direct cost$—
 $855
General and administrative—
 23
Total$—
 $878
ISP:   
Direct cost$1,070
 $498
General and administrative7,609
 4,030
Total$8,679
 $4,528
Environmental Contingencies — The U.S. Environmental Protection Agency (the “EPA”), has in the past notified us that we are a potential responsible party (“PRP”) at three former waste disposal facilities that are on the National Priorities List of contaminated sites. Under the federal Comprehensive Environmental Response, Compensation and Liability Act, also known as the Superfund law, persons who are identified as PRPs may be subject to strict, joint and several liability for the costs of cleaning up environmental contamination resulting from releases of hazardous substances at National Priorities List sites. Although we have not yet obtained a formal release of liability from the EPA with respect to any of the sites, we believe that our potential liability in connection with the sites is not likely to have a material adverse effect on our business, financial condition or results of operations.
Other Purchase Obligations — As of SeptemberJune 30, 2016,2017, we had $297.8$65.2 million of other purchase obligations representing unfilled purchase orders for aircraft parts, commitments associated with upgrading facilities at our bases and non-cancelable power-by-the-hour maintenance commitments.

20
Table of Contents
BRISTOW GROUP INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)

Other Matters — Although infrequent, aircraft accidents have occurred in the past, and the related losses and liability claims have been covered by insurance subject to deductible, self-insured retention and loss sensitive factors.
As previously reported, on April 29, 2016, another helicopter company’s Airbus Helicopters EC225LPEC 225LP (also known as a H225)H225LP) model helicopter crashed near Turøy outside of Bergen, Norway. The aircraft was carrying eleven passengers and two crew members at the time of the accident. Thirteen fatalities were reported. The cause ofAccident Investigation Board Norway (“AIBN”) issued a report confirming its initial findings that the accident is not yet known and is under investigationwas caused by authorities in Norway.the fatigue fracture of a component within the aircraft's gearbox. The AIBN continues to investigate.
Prior to the accident, we operated a total of 27 H225H225LP model aircraft (including 16 owned and 11 leased) worldwide as follows:
•Five H225H225LP model aircraft registered in Norway;
•Thirteen H225H225LP model aircraft registered in the United Kingdom; and
•Nine H225H225LP model aircraft registered in Australia.
On June 2, 2016, the European Aviation Safety Agency (“EASA”) issued an emergency airworthiness directive, which was subsequently amended on June 3, 2016 and June 9, 2016 (collectively, the “June 2016 EASA Airworthiness Directive”), prohibiting flight of Airbus Helicopters EC225LPH225LP and AS332L2 model aircraft. The June 2016 EASA Airworthiness Directive by its terms did not apply to military, customs, police, search and rescue, firefighting, coastguard or similar activities or services as those types of services are governed by the member states of EASA directly.
On October 7, 2016, EASA subsequently issued a new airworthiness directive effective October 13, 2016 (the “October EASA Airworthiness Directive”) thatwhich expressly supersedes the June EASA2016 Airworthiness Directive and details the mandatory actions necessary to permit a return to service of the Airbus Helicopters EC225LPH225LP and AS332L2 model aircraft. In response toHowever, the October EASA Airworthiness Directive, the U.K. Civil Aviation Authority (“UK CAA”) immediately issued a statement (the “UK CAA Statement”) confirming that its existing restriction that was evidenced through its safety directive issued in June 2016, prohibiting all commercial flying of these model aircraft, remains in effect until further notice. The safety directivedirectives issued in June 2016 by the Norway Civil Aviation Agency (“NCAA”) and the U.K. Civil Aviation Authority (“U.K. CAA”) prohibiting commercial operation of the EC225LPH225LP and AS332L2 model aircraft remained in Norway remains in effect as well.effect.
On July 7, 2017, the U.K. CAA announced its intention and the intention of the NCAA to remove the restrictions on commercial operations of the H225LP and AS332L2 model aircraft and to establish conditions for return to flight of such aircraft model types. The UKU.K. CAA Statement also stated that the UKmanufacturer of such aircraft model types has developed certain specified modifications and enhanced safety measures and that a plan of checks, modifications and inspections will be undertaken before any flights take place.
On July 20, 2017, the U.K. CAA and NCAA are awaiting further information fromissued safety and operational directives which detail the accident investigation before considering any future action.
In lightconditions to apply for safe return to service of the October EASA Airworthiness DirectiveH225LP and UK CAA Statement, we are working with local regulators, Airbus, HeliOffshore and our clients to carefully evaluate our next steps for the H225AS332L2 model aircraft, in both our oil and gas and SAR

22
Table of Contents
BRISTOW GROUP INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)

operations in Norway, the United Kingdom and Australia.where operators wish to do so. We do not currently have any AS332L2 model aircraft in our fleet. Until we are confident that the H225 model aircraft can be operated safely, we willWe continue not to suspend all operation of its H225 model aircraft, including for SAR and training.
Specifically, we will continue to not operate for commercial purposes our sole H225H225LP model aircraft in Norway, our 13 H225thirteen H225LP model aircraft in the United Kingdom or our six H225H225LP model aircraft in Australia, or for search and rescue purposes, including training and missions, any of our other four H225H225LP model aircraft in Norway or our other three H225H225LP model aircraft in Australia.
Our other aircraft, including SAR, continue to operate globally.
We are working with local regulators, Airbus, HeliOffshore and clients, to carefully evaluate next steps and demand for the H225LP model aircraft in our oil and gas and search and rescue operations worldwide. In compliance with the updated safety directives, we are continuing redelivery work on four H225LP aircraft for their planned return to the leasing company over the course of this fiscal year as per the lease redelivery requirements. This redelivery work includes required flight testing as a final part of returning the aircraft to full serviceability. We continue to monitor the situation closely, with the safety of passengers and crews remaining our highest priority.
It is too early to determine whether the H225H225LP accident that occurred in Norway in April 2016 will have a material impact on us as we are in the process of quantifying the impact and investigating potential claims against Airbus.
We operate in jurisdictions internationally where we are subject to risks that include government action to obtain additional tax revenue. In a number of these jurisdictions, political unrest, the lack of well-developed legal systems and legislation that is not clear enough in its wording to determine the ultimate application, can make it difficult to determine whether legislation may impact our earnings until such time as a clear court or other ruling exists. We operate in jurisdictions currently where amounts may be due to governmental bodies that we are not currently recording liabilities for as it is unclear how broad or narrow legislation may ultimately be interpreted. We believe that payment of amounts in these instances is not probable at this time, but is reasonably possible.

21
Table of Contents
BRISTOW GROUP INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)

A loss contingency is reasonably possible if the contingency has a more than remote but less than probable chance of occurring. Although management believes that there is no clear requirement to pay amounts at this time and that positions exist suggesting that no further amounts are currently due, it is reasonably possible that a loss could occur for which we have estimated a maximum loss at SeptemberJune 30, 20162017 to be approximately $5$4 million to $7$6 million.
We are a defendant in certain claims and litigation arising out of operations in the normal course of business. In the opinion of management, uninsured losses, if any, will not be material to our financial position, results of operations or cash flows.
Note 6 — TAXES
In accordance with GAAP, we estimate the full-year effective tax rate from continuing operations and apply this rate to our year-to-date income from continuing operations. In addition, we separately calculate the tax impact of unusual or infrequent items, if any. The tax impacts of such unusual or infrequent items are treated discretely in the quarter in which they occur. DuringOur effective tax rate was (31.9)% and 5.2% during the three months ended SeptemberJune 30, 20162017 and 2015, our effective tax rate was 14.8% and 5.7%, respectively, and 9.5% and 0.3% for the six months ended September 30, 2016, and 2015, respectively. The effective tax rate for the three and six months ended SeptemberJune 30, 2017 and 2016 waswere both impacted by valuation allowances against future realization of foreign tax credits. Additionally, we continue to value against net operating losses in certain foreign jurisdictions.
The relationship between our provision for or benefit from income taxes and our pre-tax book income can vary significantly from period to period considering, among other factors, (a) the overall level of pre-tax book income, (b) changes in the blend of income that is taxed based on gross revenues or at high effective tax rates versus pre-tax book income or at low effective tax rates and (c) our geographical blend of pre-tax book income. Consequently, our income tax expense does not change proportionally with our pre-tax book income. Significant decreases in our pre-tax book income typically result in higher effective tax rates, while significant increases in pre-tax book income can lead to lower effective tax rates, subject to the other factors impacting income tax expense noted above. The increase in our effective tax rate excluding discrete items for the three and six months ended SeptemberJune 30, 20162017 compared to the three and six months ended SeptemberJune 30, 20152016 primarily related to an increase in the blend of earnings taxed in relatively high taxed jurisdictions versus low taxed jurisdictions. Additionally, we increased our valuation allowance by $2.5$11.2 million and $1.0$13.2 million forduring the three months ended SeptemberJune 30, 20162017 and 2015, respectively, and $15.7 million and $3.0 million for the six months ended September 30, 2016, and 2015, respectively, which also increased our effective tax rate.
As of SeptemberJune 30, 2016,2017, there were $0.7$1.3 million of unrecognized tax benefits, all of which would have an impact on our effective tax rate if recognized.


23
Table of Contents
BRISTOW GROUP INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)

Note 7 — EMPLOYEE BENEFIT PLANS
Pension Plans
The following table provides a detail of the components of net periodic pension cost (in thousands):
 Three Months Ended 
 September 30,		 Six Months Ended 
 September 30,		 Three Months Ended 
 June 30,
 2016 2015 2016 2015 2017 2016
Service cost for benefits earned during the period $1,794
 $2,399
 $3,754
 $4,772
 $154
 $1,960
Interest cost on pension benefit obligation 4,377
 5,226
 9,158
 10,396
 3,751
 4,782
Expected return on assets (5,920) (7,014) (12,391) (13,955) (5,309) (6,471)
Amortization of unrecognized losses 1,793
 2,153
 3,755
 4,285
 1,778
 1,961
Net periodic pension cost $2,044
 $2,764
 $4,276
 $5,498
 $374
 $2,232
The current estimateestimates of our cash contributions required for fiscal year 20172018 for our pension plans to be paid in fiscal year 20172018 is $17.8are $15.3 million,, of which $12.9$4.0 million was paid during the sixthree months ended SeptemberJune 30, 20162017. The weighted-average expected long-term rate of return on assets for our U.K. pension plans as of March 31, 2017 was 4.4%.
Incentive Compensation
Stock–basedStock-based awards are currently made under the Bristow Group Inc. 2007 Long-Term Incentive Plan (the “2007 Plan”). A maximum of 10,646,729 shares of common stock, par value $.01$0.01 per share (“Common Stock”), are reserved. Awards granted under the 2007 Plan may be in the form of stock options, stock appreciation rights, shares of restricted stock, other stock-based awards (payable in cash or Common Stock) or performance awards, or any combination thereof, and may be made to outside directors, employees or consultants. As of SeptemberJune 30, 20162017, 4,231,7482,409,092 shares remained available for grant under the 2007 Plan.
On May 23, 2016, our board of directors approved an amendment and restatement of the 2007 Plan, approved by our stockholders on August 3, 2016, that effected each of the following changes: (i) reserved an additional 5,246,729 “shares” (or 2,623,365 full value shares) that, when combined with “shares” remaining available for issuance under the 2007 Plan resulted in a total of approximately 6,400,000 “shares” (or approximately 3,200,000 full value shares) available for issuance under the amended and restated plan, with each option and stock appreciation right granted under the amended and restated plan counting as one “shares” against such total and with each incentive award that may be settled in Common Stock counting as two “shares” (or one full value share) against such total; (ii) increased the maximum share-based employee award under the amended and restated plan from 500,000 full value shares to 1,000,000 full value shares; (iii) set the maximum aggregate compensation and incentive awards that may be provided by the Company in any calendar year to any non-employee member of the board of directors at $1,125,000; and (iv) made other administrative and updating changes.
We have a number of other incentive and stock option plans which are described in Note 9 to our fiscal year 20162017 Financial Statements.

22
Table of Contents
BRISTOW GROUP INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)

Total stock-based compensation expense, which includes stock options and restricted stock, totaled $2.0$4.1 million and $6.4$4.2 million for the three months ended SeptemberJune 30, 20162017 and 2015, respectively, and $6.2 million and $10.4 million for the six months ended September 30, 2016 and 2015,, respectively. Stock-based compensation expense has been allocated to our various regions.
During the sixthree months ended SeptemberJune 30, 2016,2017, we awarded 642,753457,858 shares of restricted stock at an average grant date fair value of $10.21$7.03 per share. Also during the sixthree months ended SeptemberJune 30, 2016, 1,024,1682017, 1,256,043 stock options were granted. The following table shows the assumptions used to compute the stock-based compensation expense for stock options granted during the sixthree months ended SeptemberJune 30, 2016:2017:
Risk free interest rate1.071.78%
Expected life (years)5
Volatility46.7556.1%
Dividend yield2.743.98%
Weighted average exercise price of options granted$16.217.03 per option
Weighted average grant-date fair value of options granted$2.162.53 per option
During June 2017, we awarded certain members of management phantom restricted stock which will be paid out in cash after three years. We will account for these awards as liability awards. As of June 30, 2017, we had $0.1 million included in other liabilities and deferred credits on our condensed consolidated balance sheet and recognized $0.1 million in general and administrative expense during the three months ended June 30, 2017 related to these awards.
Performance cash awards granted in June 2017 have two components. One half of each performance cash award vest and pay out in cash three years after the date of grant at varying levels depending on our performance in Total Shareholder Return against a peer group of companies. The other half of each performance cash award will be earned based on absolute performance in respect of improved average adjusted earnings per share for the Company over the three-year performance period beginning on April 1, 2017. Performance cash awards granted in June 2015 and June 2016 vest and pay out in cash three years after the date of grant at varying levels depending on our performance in Total Shareholder Return against a peer group of companies. These awards were designed to tie a significant portion

24
Table of Contents
BRISTOW GROUP INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)

of total compensation to performance. One of the effects of this type of compensation is that it requires liability accounting which can result in volatility in earnings. The liability recorded for these awards as of SeptemberJune 30 and March 31, 20162017 was $9.6$3.2 million and $15.8$14.2 million, respectively, and represents an accrual based on the fair value of the awards on those dates. The decrease in the liability during the sixthree months ended SeptemberJune 30, 20162017 resulted from the payout in June 20162017 of the awards granted in June 2013,2014, partially offset by the value of the new awards granted in June 2016.2017. Any changes in fair value of the awards in future quarters will increase or decrease the liability and impact results in those periods. The effect, either positive or negative, on future period earnings can vary based on factors including changes in our stock price or the stock prices of the peer group companies, as well as changes in other market and company-specific assumptions that are factored into the calculation of fair value of the performance cash awards.
Compensation expense related to the performance cash awards recorded as an expense of $3.6 million and a benefit of $1.6 millionduring the three months ended SeptemberJune 30, 20162017 and 2015, respectively, and an2016 was a reduction in expense of $2.5$3.0 million and $1.7$1.1 million, duringrespectively, due to the six months ended September 30, 2016 and 2015, respectively.decrease in the fair value of the awards.


23
Table of Contents
BRISTOW GROUP INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)

Note 8 — DIVIDENDS, SHARE REPURCHASES, EARNINGS PER SHARE AND ACCUMULATED OTHER COMPREHENSIVE INCOME
Dividends
On November 1, 2016, our board of directors approved a dividend of $0.07 per share of Common Stock, payable on December 15, 2016 to shareholders of record on December 1, 2016. See discussion of our dividends in Note 10 to our fiscal year 2016 Financial Statements. The declaration of future dividends is at the discretion of our board of directors and subject to our results of operations, financial condition, cash requirements and other factors and restrictions under applicable law and our debt instruments.
Share Repurchases
We did not repurchase any shares during the six months ended September 30, 2016 and 2015. As of October 31, 2016, we had $150.0 million of repurchase authority remaining that was authorized by our board of directors for share repurchases through November 4, 2016; however, covenants in our credit agreements restrict our ability to repurchase our Common Stock. For additional information on our repurchases of Common Stock, see “Share Repurchases” in Note 10 to the fiscal year 2016 Financial Statements.
Earnings per Share
Basic earnings per common share is computed by dividing income available to common stockholders by the weighted average number of shares of Common Stock outstanding during the period. Diluted earnings per common share excludes options to purchase shares and restricted stock awards, which were outstanding during the period but were anti-dilutive, as follows:
  Three Months Ended 
 September 30,		 Six Months Ended 
 September 30,
  2016 2015 2016 2015
Options:        
Outstanding 1,950,289
 1,292,639
 1,522,304
 592,067
Weighted average exercise price $30.07
 $61.87
 $36.23
 $68.99
Restricted stock awards:        
Outstanding 442,217
 348,182
 577,737
 296,205
Weighted average price $26.81
 $49.79
 $24.59
 $49.22

25
Table of Contents
BRISTOW GROUP INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)
  Three Months Ended 
 June 30,
  2017 2016
Options:    
Outstanding 3,040,278
 1,127,883
Weighted average exercise price $39.69
 $44.35
Restricted stock awards:    
Outstanding 481,451
 462,358
Weighted average price $23.40
 $31.43

The following table sets forth the computation of basic and diluted earnings per share:
  Three Months Ended 
 September 30,		 Six Months Ended 
 September 30,
  2016 2015 2016 2015
Net loss available to common stockholders (in thousands):        
Loss available to common stockholders – basic $(29,797) $(42,329) $(70,569) $(51,887)
Interest expense on assumed conversion of 3% Convertible Senior Notes, net of tax (1)
 —
 —
 —
 —
Loss available to common stockholders – diluted $(29,797) $(42,329) $(70,569) $(51,887)
Shares:        
Weighted average number of common shares outstanding – basic 35,070,047
 34,921,891
 35,012,014
 34,876,010
Assumed conversion of 3% Convertible Senior Notes outstanding during the period (1)
 —
 —
 —
 —
Net effect of dilutive stock options and restricted stock awards based on the treasury stock method —
 —
 —
 —
Weighted average number of common shares outstanding – diluted 35,070,047
 34,921,891
 35,012,014
 34,876,010
         
Basic loss per common share $(0.85) $(1.21) $(2.02) $(1.49)
Diluted loss per common share $(0.85) $(1.21) $(2.02) $(1.49)
  Three Months Ended 
 June 30,
  2017 2016
Earnings (in thousands):    
Loss available to common stockholders $(55,275) $(40,772)
Shares:    
Weighted average number of common shares outstanding �� basic 35,227,434
 34,990,136
Net effect of dilutive stock options and restricted stock awards based on the treasury stock method —
 —
Weighted average number of common shares outstanding – diluted 35,227,434
 34,990,136
     
Basic loss per common share $(1.57) $(1.17)
Diluted loss per common share $(1.57) $(1.17)
_____________ 
(1)
Diluted earnings per common share for the three and six months ended September 30, 2015 excludes potentially dilutive shares determined pursuant to a specified formula initially issuable upon the conversion of our 3% Convertible Senior Notes. The 3% Convertible Senior Notes were convertible, under certain circumstances, using a net share settlement process, into a combination of cash and our Common Stock. As of September 30, 2015, we had repurchased the $115.0 million principal amount of our 3% Convertible Senior Notes. Prior to the purchase, upon conversion of a note, the holder would have received 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 exceeded the base conversion price, holders would have received additional 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, 2015 as our average stock price during these periods did not meet or exceed the conversion requirements.
Accumulated Other Comprehensive Income
The following table sets forth the changes in the balances of each component of accumulated other comprehensive income:
 Currency Translation Adjustments 
Pension Liability Adjustments (1)
 Total Currency Translation Adjustments 
Pension Liability Adjustments (1)
 Total
Balance as of March 31, 2016 $(67,365) $(222,454) $(289,819)
Balance as of March 31, 2017 $(149,721) $(178,556) $(328,277)
Other comprehensive income before reclassification (17,539) —
 (17,539) 10,070
 —
 10,070
Reclassified from accumulated other comprehensive income —
 —
 —
 —
 —
 —
Net current period other comprehensive income (17,539) —
 (17,539) 10,070
 —
 10,070
Foreign exchange rate impact (23,941) 23,941
 —
 8,954
 (8,954) —
Balance as of September 30, 2016 $(108,845) $(198,513) $(307,358)
Balance as of June 30, 2017 $(130,697) $(187,510) $(318,207)
_____________ 
(1) 
Reclassification of amounts related to pension liability adjustments are included as a component of net periodic pension cost.


2624
Table of Contents
BRISTOW GROUP INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)


Note 9 — SEGMENT INFORMATION
We conduct our business in one segment: Industrial Aviation Services.industrial aviation services. The Industrial Aviation Servicesindustrial aviation services global operations are conducted primarily through four regions as follows: Europe Caspian, Africa, Americas and Asia Pacific. The Europe Caspian region comprises all our operations and affiliates in Europe and Central Asia, including Norway, the U.K. and Turkmenistan. The Africa region comprises all our operations and affiliates on the African continent, including Nigeria and Egypt. The Americas region comprises all our operations and affiliates in North America and South America, including Brazil, Canada, Guyana, Suriname, Trinidad and the U.S. Gulf of Mexico. The Asia Pacific region comprises all our operations and affiliates in Australia and Southeast Asia, including Malaysia and Sakhalin. Additionally, we operate a training unit, Bristow Academy, which is included in Corporate and other.
The following tables show region information for the three and six months ended SeptemberJune 30, 20162017 and 20152016 and as of SeptemberJune 30 and March 31, 2016,2017, where applicable, reconciled to consolidated totals, and prepared on the same basis as our condensed consolidated financial statements (in thousands):
 Three Months Ended 
 September 30,		 Six Months Ended 
 September 30,		 Three Months Ended 
 June 30,
 2016 2015 2016 2015 2017 2016
Region gross revenue from external clients:            
Europe Caspian $191,834
 $225,498
 $386,658
 $448,447
 $191,399
 $194,824
Africa 51,644
 65,299
 105,906
 144,214
 50,790
 54,262
Americas 56,092
 71,858
 114,289
 148,458
 55,762
 58,197
Asia Pacific 55,255
 78,691
 114,399
 159,079
 52,446
 59,144
Corporate and other 2,642
 5,565
 5,613
 13,709
 1,712
 2,971
Total region gross revenue $357,467
 $446,911
 $726,865
 $913,907
 $352,109
 $369,398
Intra-region gross revenue:            
Europe Caspian $1,891
 $685
 $4,030
 $1,077
 $1,036
 $2,139
Africa —
 2
 —
 2
 —
 —
Americas 1,115
 1,720
 1,962
 5,372
 2,294
 847
Asia Pacific 1
 2
 1
 2
 —
 —
Corporate and other 34
 661
 279
 1,444
 22
 245
Total intra-region gross revenue $3,041
 $3,070
 $6,272
 $7,897
 $3,352
 $3,231
Consolidated gross revenue reconciliation:            
Europe Caspian $193,725
 $226,183
 $390,688
 $449,524
 $192,435
 $196,963
Africa 51,644
 65,301
 105,906
 144,216
 50,790
 54,262
Americas 57,207
 73,578
 116,251
 153,830
 58,056
 59,044
Asia Pacific 55,256
 78,693
 114,400
 159,081
 52,446
 59,144
Corporate and other 2,676
 6,226
 5,892
 15,153
 1,734
 3,216
Intra-region eliminations (3,041) (3,070) (6,272) (7,897) (3,352) (3,231)
Total consolidated gross revenue $357,467
 $446,911
 $726,865
 $913,907
 $352,109
 $369,398



2725
Table of Contents
BRISTOW GROUP INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)

  Three Months Ended 
 September 30,		 Six Months Ended 
 September 30,
  2016 2015 2016 2015
Earnings from unconsolidated affiliates, net of losses – equity method investments:        
Europe Caspian $65
 $153
 $116
 $252
Americas 260
 (15,513) 4,123
 (9,316)
Corporate and other (187) —
 (271) —
Total earnings from unconsolidated affiliates, net of losses – equity method investments $138
 $(15,360) $3,968
 $(9,064)
         
Consolidated operating income (loss) reconciliation:        
Europe Caspian $5,741
 $15,060
 $18,771
 $29,257
Africa 7,942
 7,574
 9,513
 20,526
Americas 2,643
 (9,046) 3,564
 7,486
Asia Pacific (9,575) 5,013
 (15,468) 4,325
Corporate and other (31,447) (34,427) (57,294) (64,891)
Loss on disposal of assets (2,186) (14,007) (12,203) (21,702)
Total consolidated operating loss $(26,882) $(29,833) $(53,117) $(24,999)
         
Depreciation and amortization:        
Europe Caspian $11,220
 $10,195
 $22,409
 $20,977
Africa 3,220
 9,809
 8,673
 15,693
Americas 7,228
 10,570
 18,609
 20,726
Asia Pacific 4,377
 4,858
 8,613
 13,177
Corporate and other 2,547
 1,955
 4,982
 3,960
Total depreciation and amortization (1)
 $28,592
 $37,387
 $63,286
 $74,533
  Three Months Ended 
 June 30,
  2017 2016
Earnings from unconsolidated affiliates, net of losses – equity method investments:    
Europe Caspian $30
 $51
Americas (535) 3,863
Corporate and other (160) (84)
Total earnings from unconsolidated affiliates, net of losses – equity method investments $(665) $3,830
     
Consolidated operating income (loss) reconciliation:    
Europe Caspian $4,407
 $13,030
Africa 10,048
 1,571
Americas (1,256) 921
Asia Pacific (12,530) (5,893)
Corporate and other (25,957) (25,847)
Gain (loss) on disposal of assets 699
 (10,017)
Total consolidated operating loss $(24,589) $(26,235)
     
Depreciation and amortization:    
Europe Caspian $11,822
 $11,189
Africa 3,076
 5,453
Americas 6,999
 11,381
Asia Pacific 5,810
 4,236
Corporate and other 3,349
 2,435
Total depreciation and amortization (1)
 $31,056
 $34,694
 September 30, 
 2016		 March 31,  
 2016		 June 30, 
 2017		 March 31,  
 2017
Identifiable assets:        
Europe Caspian $1,012,568
 $1,067,647
 $1,041,670
 $1,091,536
Africa 391,821
 304,081
 425,614
 325,719
Americas 852,090
 884,455
 881,049
 809,071
Asia Pacific 402,109
 426,677
 343,278
 433,614
Corporate and other(2) 539,508
 580,085
 379,219
 453,907
Total identifiable assets (2)
 $3,198,096
 $3,262,945
 $3,070,830
 $3,113,847
Investments in unconsolidated affiliates – equity method investments:        
Europe Caspian $156
 $298
 $315
 $257
Americas 196,335
 183,990
 195,357
 200,362
Corporate and other 3,706
 4,378
 3,216
 3,257
Total investments in unconsolidated affiliates – equity method investments $200,197
 $188,666
 $198,888
 $203,876
_____________ 
(1) 
Includes accelerated depreciation expense of $1.3$6.9 million during the three months endedSeptember 30, 2016 related to aircraft where management made the decision to exit these model types earlier than originally anticipated in our Europe Caspian and Africa regions of $0.2 million and $1.1 million, respectively. Includes accelerated depreciation expense of $10.5 million during the three months ended September 30, 2015 related to aircraft where management made the decision to exit these model types earlier than originally anticipated in our Americas, Africa and Asia Pacific regions of $3.2 million, $6.5 million and $0.8 million, respectively. Includes accelerated depreciation expense of $8.2 million during the six months ended September June 30, 2016 related to aircraft where management made the decision to exit these model types earlier than originally anticipated in our Europe Caspian, Americas and Africa regions of $0.4$0.2 million, $3.9 million and $3.9$2.8 million, respectively. Includes accelerated depreciation expense of $19.3 million during six months ended September 30, 2015 related to aircraft where management made the decision to exit these model types earlier than originally anticipated in our Americas, Africa and Asia Pacific regions of $6.1 million, $8.8 million and $4.4 million, respectively. For further details, see Note 1.
(2)
Includes $112.2 million and $199.3 million ofconstruction in progress within property and equipment on our condensed consolidated balance sheets as of June 30 and March 31, 2017, respectively, which primarily represents progress payments on aircraft to be delivered in future periods.


28
26
Table of Contents
BRISTOW GROUP INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)

(2)
Includes $315.6 million and $307.4 million ofconstruction in progress within property and equipment on our condensed consolidated balance sheets as of September 30 and March 31, 2016, respectively, which primarily represents progress payments on aircraft to be delivered in future periods.

Note 10 — SUPPLEMENTAL CONDENSED CONSOLIDATING FINANCIAL INFORMATION
In connection with the issuance of the 6¼61/4% Senior Notes and the 3% Convertibledue 2022 (the “61/4% Senior Notes (which we repurchased during the six months ended September 30, 2015)Notes”), certain of our U.S. subsidiaries (the “Guarantor Subsidiaries”) fully, unconditionally, jointly and severally guaranteed the payment obligations under these notes. As part of the Eighth Amendment to our Amended and Restated Credit Agreement, Bristow Academy, Inc. became a Guarantor Subsidiary. Therefore, Bristow Academy, Inc. is presented as a Guarantor Subsidiary for the three and six months ended September 30, 2016 and as of September 30, 2016 in the following supplemental condensed consolidating financial statements. The following supplemental financial information sets forth, on a consolidating basis, the balance sheet, statement of operations, comprehensive income and cash flow information for Bristow Group Inc. (“Parent Company Only”), for the Guarantor Subsidiaries and for our other subsidiaries (the “Non-Guarantor Subsidiaries”). We have not presented separate financial statements and other disclosures concerning the Guarantor Subsidiaries because management has determined that such information is not material to investors.
The supplemental condensed consolidating financial information has been prepared pursuant to the rules and regulations for condensed financial information and does not include all disclosures included in annual financial statements, although we believe that the disclosures made are adequate to make the information presented not misleading. The principal eliminating entries eliminate investments in subsidiaries, intercompany balances and intercompany revenue and expense.
The allocation of the consolidated income tax provision was made using the with and without allocation method.



27
Table of Contents
BRISTOW GROUP INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)

Supplemental Condensed Consolidating Statement of Operations
Three Months Ended June 30, 2017
  
Parent
Company
Only
 
Guarantor
Subsidiaries
 
Non-
Guarantor
Subsidiaries
 Eliminations Consolidated
           
  (In thousands)
Revenue:          
Gross revenue $—
 $45,775
 $306,334
 $—
 $352,109
Intercompany revenue —
 32,191
 —
 (32,191) —
  —
 77,966
 306,334
 (32,191) 352,109
Operating expense:          
Direct cost and reimbursable expense 6
 52,334
 245,437
 —
 297,777
Intercompany expenses —
 —
 32,191
 (32,191) —
Depreciation and amortization 2,917
 12,483
 15,656
 —
 31,056
General and administrative 19,107
 5,762
 21,838
 —
 46,707
  22,030
 70,579
 315,122
 (32,191) 375,540
           
Loss on impairment —
 (1,192) —
 —
 (1,192)
Gain on disposal of assets —
 416
 283
 —
 699
Earnings from unconsolidated affiliates, net of losses (20,645) —
 (665) 20,645
 (665)
Operating income (loss) (42,675) 6,611
 (9,170) 20,645
 (24,589)
Interest expense, net (9,058) (5,780) (1,183) —
 (16,021)
Other income (expense), net (29) (357) (1,259) —
 (1,645)
           
Income (loss) before (provision) benefit for income taxes (51,762) 474
 (11,612) 20,645
 (42,255)
Allocation of consolidated income taxes (3,502) (4,160) (5,829) —
 (13,491)
Net loss (55,264) (3,686) (17,441) 20,645
 (55,746)
Net (income) loss attributable to noncontrolling interests (11) —
 482
 —
 471
Net loss attributable to Bristow Group $(55,275) $(3,686) $(16,959) $20,645
 $(55,275)



28
Table of Contents
BRISTOW GROUP INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)

Supplemental Condensed Consolidating Statement of Operations
Three Months Ended June 30, 2016
  
Parent
Company
Only
 
Guarantor
Subsidiaries
 
Non-
Guarantor
Subsidiaries
 Eliminations Consolidated
           
  (In thousands)
Revenue:          
Gross revenue $—
 $45,313
 $324,085
 $—
 $369,398
Intercompany revenue —
 24,291
 —
 (24,291) —
  —
 69,604
 324,085
 (24,291) 369,398
Operating expense:          
Direct cost and reimbursable expense (257) 48,618
 253,796
 —
 302,157
Intercompany expenses —
 —
 24,291
 (24,291) —
Depreciation and amortization 2,093
 16,981
 15,620
 —
 34,694
General and administrative 20,259
 6,590
 25,746
 —
 52,595
  22,095
 72,189
 319,453
 (24,291) 389,446
           
Gain (loss) on disposal of assets —
 (10,227) 210
 —
 (10,017)
Earnings from unconsolidated affiliates, net of losses (12,776) —
 3,830
 12,776
 3,830
Operating income (loss) (34,871) (12,812) 8,672
 12,776
 (26,235)
Interest expense, net (9,885) (657) (344) —
 (10,886)
Other income (expense), net 546
 1,235
 (7,970) ��
 (6,189)
           
Income (loss) before (provision) benefit for income taxes (44,210) (12,234) 358
 12,776
 (43,310)
Allocation of consolidated income taxes 3,453
 (2,222) 1,007
 —
 2,238
Net income (loss) (40,757) (14,456) 1,365
 12,776
 (41,072)
Net (income) loss attributable to noncontrolling interests (15) —
 315
 —
 300
Net income (loss) attributable to Bristow Group $(40,772) $(14,456) $1,680
 $12,776
 $(40,772)


29
Table of Contents
BRISTOW GROUP INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)


Supplemental Condensed Consolidating Statement of OperationsComprehensive Income (Loss)
Three Months Ended SeptemberJune 30, 20162017
  
Parent
Company
Only
 
Guarantor
Subsidiaries
 
Non-
Guarantor
Subsidiaries
 Eliminations Consolidated
           
  (In thousands)
Revenue:          
Gross revenue $—
 $42,543
 $314,924
 $—
 $357,467
Intercompany revenue —
 24,323
 —
 (24,323) —
  —
 66,866
 314,924
 (24,323) 357,467
Operating expense:          
Direct cost and reimbursable expense (374) 47,858
 247,422
 —
 294,906
Intercompany expenses —
 —
 24,323
 (24,323) —
Depreciation and amortization 2,223
 10,805
 15,564
 —
 28,592
General and administrative 17,487
 6,490
 27,297
 —
 51,274
  19,336
 65,153
 314,606
 (24,323) 374,772
           
Loss on impairment —
 (4,761) (2,811) —
 (7,572)
Loss on disposal of assets —
 (1,348) (838) —
 (2,186)
Earnings from unconsolidated affiliates, net of losses (9,647) —
 138
 9,690
 181
Operating loss (28,983) (4,396) (3,193) 9,690
 (26,882)
Interest expense, net (10,347) (371) (750) —
 (11,468)
Other income (expense), net 206
 411
 2,386
 —
 3,003
           
Loss before (provision) benefit for income taxes (39,124) (4,356) (1,557) 9,690
 (35,347)
Allocation of consolidated income taxes 9,339
 (1,510) (2,589) —
 5,240
Net loss (29,785) (5,866) (4,146) 9,690
 (30,107)
Net (income) loss attributable to noncontrolling interests (12) —
 322
 —
 310
Net loss attributable to Bristow Group $(29,797) $(5,866) $(3,824) $9,690
 $(29,797)
  Parent
Company
Only		 Guarantor
Subsidiaries		 Non-
Guarantor
Subsidiaries		 Eliminations Consolidated
           
  (In thousands)
Net loss $(55,264) $(3,686) $(17,441) $20,645
 $(55,746)
Other comprehensive loss:          
Currency translation adjustments —
 338
 14,352
 (4,930) 9,760
Total comprehensive loss (55,264) (3,348) (3,089) 15,715
 (45,986)
           
Net (income) loss attributable to noncontrolling interests (11) —
 482
 —
 471
Currency translation adjustments attributable to noncontrolling interests —
 —
 310
 —
 310
Total comprehensive (income) loss attributable to noncontrolling interests (11) —
 792
 —
 781
Total comprehensive loss attributable to Bristow Group $(55,275) $(3,348) $(2,297) $15,715
 $(45,205)



30
Table of Contents
BRISTOW GROUP INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)

Supplemental Condensed Consolidating Statement of OperationsComprehensive Income
SixThree Months Ended SeptemberJune 30, 2016
  
Parent
Company
Only
 
Guarantor
Subsidiaries
 
Non-
Guarantor
Subsidiaries
 Eliminations Consolidated
           
  (In thousands)
Revenue:          
Gross revenue $—
 $87,856
 $639,009
 $—
 $726,865
Intercompany revenue —
 48,614
 —
 (48,614) —
  —
 136,470
 639,009
 (48,614) 726,865
Operating expense:          
Direct cost and reimbursable expense (631) 96,476
 501,218
 —
 597,063
Intercompany expenses —
 —
 48,614
 (48,614) —
Depreciation and amortization 4,316
 27,786
 31,184
 —
 63,286
General and administrative 37,746
 13,080
 53,043
 —
 103,869
  41,431
 137,342
 634,059
 (48,614) 764,218
           
Loss on impairment —
 (4,761) (2,811) —
 (7,572)
Loss on disposal of assets —
 (11,575) (628) —
 (12,203)
Earnings from unconsolidated affiliates, net of losses (22,423) —
 3,968
 22,466
 4,011
Operating income (loss) (63,854) (17,208) 5,479
 22,466
 (53,117)
Interest expense, net (20,232) (1,028) (1,094) —
 (22,354)
Other income (expense), net 752
 1,646
 (5,584) —
 (3,186)
Income (loss) before provision for income taxes (83,334) (16,590) (1,199) 22,466
 (78,657)
Allocation of consolidated income taxes 12,792
 (3,732) (1,582) —
 7,478
Net loss (70,542) (20,322) (2,781) 22,466
 (71,179)
Net (income) loss attributable to noncontrolling interests (27) —
 637
 —
 610
Net loss attributable to Bristow Group $(70,569) $(20,322) $(2,144) $22,466
 $(70,569)
  Parent
Company
Only		 Guarantor
Subsidiaries		 Non-
Guarantor
Subsidiaries		 Eliminations Consolidated
           
  (In thousands)
Net income (loss) $(40,757) $(14,456) $1,365
 $12,776
 $(41,072)
Other comprehensive income (loss):          
Currency translation adjustments —
 —
 217,792
 (224,927) (7,135)
Total comprehensive income (loss) (40,757) (14,456) 219,157
 (212,151) (48,207)
           
Net (income) loss attributable to noncontrolling interests (15) —
 315
 —
 300
Currency translation adjustments attributable to noncontrolling interests —
 —
 (4,442) —
 (4,442)
Total comprehensive income attributable to noncontrolling interests (15) —
 (4,127) —
 (4,142)
Total comprehensive income (loss) attributable to Bristow Group $(40,772) $(14,456) $215,030
 $(212,151) $(52,349)


31
Table of Contents
BRISTOW GROUP INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)


Supplemental Condensed Consolidating StatementBalance Sheet
As of Operations
Three Months Ended SeptemberJune 30, 2015
2017
  
Parent
Company
Only
 
Guarantor
Subsidiaries
 
Non-
Guarantor
Subsidiaries
 Eliminations Consolidated
           
  (In thousands)
Revenue:          
Gross revenue $—
 $58,570
 $388,341
 $—
 $446,911
Intercompany revenue —
 21,924
 —
 (21,924) —
  —
 80,494
 388,341
 (21,924) 446,911
Operating expense:          
Direct cost and reimbursable expense (1,061) 50,731
 284,589
 —
 334,259
Intercompany expenses —
 —
 21,924
 (21,924) —
Depreciation and amortization 1,675
 17,530
 18,182
 —
 37,387
General and administrative 19,764
 5,961
 27,732
 —
 53,457
  20,378
 74,222
 352,427
 (21,924) 425,103
           
Loss on impairment —
 —
 (22,274) —
 (22,274)
Loss on disposal of assets —
 (11,901) (2,106) —
 (14,007)
Earnings from unconsolidated affiliates, net of losses (73,993) —
 (15,360) 73,993
 (15,360)
Operating loss (94,371) (5,629) (3,826) 73,993
 (29,833)
Interest expense, net 30,967
 (1,081) (37,065) —
 (7,179)
Other income (expense), net 271
 330
 (12,025) —
 (11,424)
Loss before provision for income taxes (63,133) (6,380) (52,916) 73,993
 (48,436)
Allocation of consolidated income taxes 16,015
 (1,273) (11,986) —
 2,756
Net loss (47,118) (7,653) (64,902) 73,993
 (45,680)
Net income attributable to noncontrolling interests (14) —
 (1,438) —
 (1,452)
Net loss attributable to Bristow Group (47,132) (7,653) (66,340) 73,993
 (47,132)
Accretion of redeemable noncontrolling interests —
 —
 4,803
 —
 4,803
Net loss attributable to common stockholders $(47,132) $(7,653) $(61,537) $73,993
 $(42,329)
  
Parent
Company
Only
 
Guarantor
Subsidiaries
 
Non-
Guarantor
Subsidiaries
 Eliminations Consolidated
           
  (In thousands)  
ASSETS
Current assets:          
Cash and cash equivalents $5,386
 $1,187
 $72,306
 $—
 $78,879
Accounts receivable 133,432
 336,915
 291,635
 (530,267) 231,715
Inventories —
 33,833
 96,646
 —
 130,479
Assets held for sale —
 28,601
 5,984
 —
 34,585
Prepaid expenses and other current assets 2,097
 6,076
 41,901
 (6,929) 43,145
Total current assets 140,915
 406,612
 508,472
 (537,196) 518,803
Intercompany investment 2,486,473
 104,435
 131,194
 (2,722,102) —
Investment in unconsolidated affiliates —
 —
 205,174
 —
 205,174
Intercompany notes receivable 271,499
 36,358
 26,265
 (334,122) —
Property and equipment—at cost:          
Land and buildings 4,806
 62,114
 168,350
 —
 235,270
Aircraft and equipment 155,041
 1,212,349
 1,238,588
 —
 2,605,978
  159,847
 1,274,463
 1,406,938
 —
 2,841,248
Less: Accumulated depreciation and amortization (32,013) (270,749) (327,461) —
 (630,223)
  127,834
 1,003,714
 1,079,477
 —
 2,211,025
Goodwill —
 —
 19,907
 —
 19,907
Other assets 10,533
 2,242
 103,146
 —
 115,921
Total assets $3,037,254
 $1,553,361
 $2,073,635
 $(3,593,420) $3,070,830
           
LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND STOCKHOLDERS’ INVESTMENT
Current liabilities:          
Accounts payable $292,663
 $136,609
 $178,101
 $(510,875) $96,498
Accrued liabilities 53,816
 11,141
 139,230
 (24,690) 179,497
Current deferred taxes 457
 1,585
 (2,042) —
 —
Short-term borrowings and current maturities of long-term debt 81,312
 17,685
 18,820
 —
 117,817
Total current liabilities 428,248
 167,020
 334,109
 (535,565) 393,812
Long-term debt, less current maturities 788,229
 283,286
 103,234
 —
 1,174,749
Intercompany notes payable 62,532
 216,292
 56,400
 (335,224) —
Accrued pension liabilities —
 —
 60,057
 —
 60,057
Other liabilities and deferred credits 7,771
 6,679
 11,184
 —
 25,634
Deferred taxes 107,289
 42,512
 9,638
 —
 159,439
Redeemable noncontrolling interest —
 —
 6,349
 —
 6,349
Stockholders’ investment:          
Common stock 380
 20,028
 131,317
 (151,345) 380
Additional paid-in-capital 813,857
 29,387
 284,048
 (313,435) 813,857
Retained earnings 934,166
 787,431
 803,028
 (1,590,459) 934,166
Accumulated other comprehensive loss 78,306
 726
 270,153
 (667,392) (318,207)
Treasury shares (184,796) —
 —
 —
 (184,796)
Total Bristow Group stockholders’ investment 1,641,913
 837,572
 1,488,546
 (2,722,631) 1,245,400
Noncontrolling interests 1,272
 —
 4,118
 —
 5,390
Total stockholders’ investment 1,643,185
 837,572
 1,492,664
 (2,722,631) 1,250,790
Total liabilities, redeemable noncontrolling interest and stockholders’ investment $3,037,254
 $1,553,361
 $2,073,635
 $(3,593,420) $3,070,830

32
Table of Contents
BRISTOW GROUP INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)

Supplemental Condensed Consolidating StatementBalance Sheet
As of Operations
Six Months Ended September 30, 2015March 31, 2017

  
Parent
Company
Only
 
Guarantor
Subsidiaries
 
Non-
Guarantor
Subsidiaries
 Eliminations Consolidated
           
  (In thousands)
Revenue:          
Gross revenue $—
 $123,426
 $790,481
 $—
 $913,907
Intercompany revenue —
 46,735
 —
 (46,735) —
  —
 170,161
 790,481
 (46,735) 913,907
Operating expense:          
Direct cost and reimbursable expense (917) 104,957
 587,065
 —
 691,105
Intercompany expenses —
 —
 46,735
 (46,735) —
Depreciation and amortization 3,284
 32,115
 39,134
 —
 74,533
General and administrative 40,315
 12,792
 61,682
 —
 114,789
  42,682
 149,864
 734,616
 (46,735) 880,427
           
Loss on impairment —
 (2,508) (25,205) —
 (27,713)
Loss on disposal of assets —
 (19,638) (2,064) —
 (21,702)
Earnings from unconsolidated affiliates, net of losses (89,427) —
 (9,064) 89,427
 (9,064)
Operating income (loss) (132,109) (1,849) 19,532
 89,427
 (24,999)
Interest expense, net 58,451
 (2,346) (70,953) —
 (14,848)
Other income (expense), net (45) 84
 (7,624) —
 (7,585)
Loss before provision for income taxes (73,703) (4,111) (59,045) 89,427
 (47,432)
Allocation of consolidated income taxes 23,342
 (2,410) (20,809) —
 123
Net loss (50,361) (6,521) (79,854) 89,427
 (47,309)
Net income attributable to noncontrolling interests (28) —
 (3,052) —
 (3,080)
Net loss attributable to Bristow Group (50,389) (6,521) (82,906) 89,427
 (50,389)
Accretion of redeemable noncontrolling interests —
 —
 (1,498) —
 (1,498)
Net loss attributable to common stockholders $(50,389) $(6,521) $(84,404) $89,427
 $(51,887)
  
Parent
Company
Only
 
Guarantor
Subsidiaries
 
Non-
Guarantor
Subsidiaries
 Eliminations Consolidated
           
  (In thousands)
ASSETS
Current assets:          
Cash and cash equivalents $3,382
 $299
 $92,975
 $—
 $96,656
Accounts receivable 76,383
 288,235
 212,900
 (370,603) 206,915
Inventories —
 34,721
 90,190
 —
 124,911
Assets held for sale —
 30,716
 7,530
 —
 38,246
Prepaid expenses and other current assets 3,237
 4,501
 43,856
 (10,451) 41,143
Total current assets 83,002
 358,472
 447,451
 (381,054) 507,871
Intercompany investment 2,491,631
 104,435
 126,296
 (2,722,362) —
Investment in unconsolidated affiliates —
 —
 210,162
 —
 210,162
Intercompany notes receivable 306,641
 37,633
 39,706
 (383,980) —
Property and equipment—at cost:          
Land and buildings 4,806
 62,114
 164,528
 —
 231,448
Aircraft and equipment 151,005
 1,199,073
 1,272,623
 —
 2,622,701
  155,811
 1,261,187
 1,437,151
 —
 2,854,149
Less: Accumulated depreciation and amortization (29,099) (258,225) (312,461) —
 (599,785)
  126,712
 1,002,962
 1,124,690
 —
 2,254,364
Goodwill —
 —
 19,798
 —
 19,798
Other assets 18,770
 2,139
 100,743
 —
 121,652
Total assets $3,026,756
 $1,505,641
 $2,068,846
 $(3,487,396) $3,113,847
           
LIABILITIES, REDEEMABLE NONCONTROLLING INTEREST AND STOCKHOLDERS’ INVESTMENT
Current liabilities:          
Accounts payable $231,841
 $70,434
 $151,382
 $(355,442) $98,215
Accrued liabilities 61,791
 17,379
 132,704
 (25,628) 186,246
Current deferred taxes (1,272) 2,102
 —
 —
 830
Short-term borrowings and current maturities of long-term debt 79,053
 17,432
 34,578
 —
 131,063
Total current liabilities 371,413
 107,347
 318,664
 (381,070) 416,354
Long-term debt, less current maturities 763,325
 284,710
 102,921
 —
 1,150,956
Intercompany notes payable 70,689
 226,091
 87,200
 (383,980) —
Accrued pension liabilities —
 —
 61,647
 —
 61,647
Other liabilities and deferred credits 11,597
 6,229
 11,073
 —
 28,899
Deferred taxes 112,716
 40,344
 1,813
 —
 154,873
Redeemable noncontrolling interest —
 —
 6,886
 —
 6,886
Stockholders’ investment:          
Common stock 379
 20,028
 115,317
 (135,345) 379
Additional paid-in-capital 809,995
 29,387
 284,048
 (313,435) 809,995
Retained earnings 991,906
 791,117
 819,987
 (1,611,104) 991,906
Accumulated other comprehensive loss 78,306
 388
 255,491
 (662,462) (328,277)
Treasury shares (184,796) —
 —
 —
 (184,796)
Total Bristow Group stockholders’ investment 1,695,790
 840,920
 1,474,843
 (2,722,346) 1,289,207
Noncontrolling interests 1,226
 —
 3,799
 —
 5,025
Total stockholders’ investment 1,697,016
 840,920
 1,478,642
 (2,722,346) 1,294,232
Total liabilities, redeemable noncontrolling interest and stockholders’ investment $3,026,756
 $1,505,641
 $2,068,846
 $(3,487,396) $3,113,847

33
Table of Contents
BRISTOW GROUP INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)


Supplemental Condensed Consolidating Statement of Comprehensive Income (Loss)Cash Flows
Three Months Ended SeptemberJune 30, 20162017
  Parent
Company
Only		 Guarantor
Subsidiaries		 Non-
Guarantor
Subsidiaries		 Eliminations Consolidated
           
  (In thousands)
Net loss $(29,785) $(5,866) $(4,146) $9,690
 $(30,107)
Other comprehensive loss:          
Currency translation adjustments —
 —
 (9,558) 4,119
 (5,439)
Total comprehensive loss (29,785) (5,866) (13,704) 13,809
 (35,546)
           
Net income attributable to noncontrolling interests (12) —
 322
 —
 310
Currency translation adjustments attributable to noncontrolling interests —
 —
 (523) —
 (523)
Total comprehensive income attributable to noncontrolling interests (12) —
 (201) —
 (213)
Total comprehensive loss attributable to Bristow Group $(29,797) $(5,866) $(13,905) $13,809
 $(35,759)
  
Parent
Company
Only
 
Guarantor
Subsidiaries
 
Non-
Guarantor
Subsidiaries
 Eliminations Consolidated
           
  (In thousands)
Net cash used in operating activities $(37,229) $(7,228) $(6,722) $—
 $(51,179)
Cash flows from investing activities:          
Capital expenditures (4,036) (3,070) (5,447) —
 (12,553)
Proceeds from asset dispositions —
 2,473
 39,502
 —
 41,975
Net cash provided by (used in) investing activities (4,036) (597) 34,055
 —
 29,422
Cash flows from financing activities:          
Proceeds from borrowings 68,800
 —
 218
 —
 69,018
Debt issuance costs —
 (466) (27) —
 (493)
Repayment of debt (42,150) (5,013) (19,784) —
 (66,947)
Dividends paid (2,465) —
 —
 —
 (2,465)
Increases (decreases) in cash related to intercompany advances and debt 19,370
 14,192
 (33,562) —
 —
Partial prepayment of put/call obligation (12) —
 —
 —
 (12)
Repurchases for tax withholdings on vesting of equity awards (274) —
 —
 —
 (274)
Net cash provided by (used in) financing activities 43,269
 8,713
 (53,155) —
 (1,173)
Effect of exchange rate changes on cash and cash equivalents —
 —
 5,153
 —
 5,153
Net increase (decrease) in cash and cash equivalents 2,004
 888
 (20,669) —
 (17,777)
Cash and cash equivalents at beginning of period 3,382
 299
 92,975
 —
 96,656
Cash and cash equivalents at end of period $5,386
 $1,187
 $72,306
 $—
 $78,879

34
Table of Contents
BRISTOW GROUP INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)


Supplemental Condensed Consolidating Statement of Comprehensive Income (Loss)
Six Months Ended September 30, 2016

  Parent
Company
Only		 Guarantor
Subsidiaries		 Non-
Guarantor
Subsidiaries		 Eliminations Consolidated
           
  (In thousands)
Net loss $(70,542) $(20,322) $(2,781) $22,466
 $(71,179)
Other comprehensive income (loss):          
Currency translation adjustments —
 —
 208,234
 (220,808) (12,574)
Total comprehensive income (loss) (70,542) (20,322) 205,453
 (198,342) (83,753)
           
Net income attributable to noncontrolling interests (27) —
 637
 —
 610
Currency translation adjustments attributable to noncontrolling interests —
 —
 (4,965) —
 (4,965)
Total comprehensive income attributable to noncontrolling interests (27) —
 (4,328) —
 (4,355)
Total comprehensive income (loss) attributable to Bristow Group $(70,569) $(20,322) $201,125
 $(198,342) $(88,108)

3534
Table of Contents
BRISTOW GROUP INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)


Supplemental Condensed Consolidating Statement of Comprehensive Income (Loss)
Three Months Ended September 30, 2015
  Parent
Company
Only		 Guarantor
Subsidiaries		 Non-
Guarantor
Subsidiaries		 Eliminations Consolidated
           
  (In thousands)
Net loss $(47,118) $(7,653) $(64,902) $73,993
 $(45,680)
Other comprehensive loss:          
Currency translation adjustments (44,436) —
 58,709
 (31,223) (16,950)
Total comprehensive loss (91,554) (7,653) (6,193) 42,770
 (62,630)
           
Net income attributable to noncontrolling interests (14) —
 (1,438) —
 (1,452)
Currency translation adjustments attributable to noncontrolling interests —
 —
 (1,535) —
 (1,535)
Total comprehensive income attributable to noncontrolling interests (14) —
 (2,973) —
 (2,987)
Total comprehensive loss attributable to Bristow Group (91,568) (7,653) (9,166) 42,770
 (65,617)
Accretion of redeemable noncontrolling interests —
 —
 4,803
 —
 4,803
Total comprehensive loss attributable to common stockholders $(91,568) $(7,653) $(4,363) $42,770
 $(60,814)

36
Table of Contents
BRISTOW GROUP INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)


Supplemental Condensed Consolidating Statement of Comprehensive Income (Loss)
Six Months Ended September 30, 2015
  Parent
Company
Only		 Guarantor
Subsidiaries		 Non-
Guarantor
Subsidiaries		 Eliminations Consolidated
           
  (In thousands)
Net loss $(50,361) $(6,521) $(79,854) $89,427
 $(47,309)
Other comprehensive income (loss):          
Currency translation adjustments (6,871) —
 40,303
 (37,774) (4,342)
Total comprehensive loss (57,232) (6,521) (39,551) 51,653
 (51,651)
           
Net income attributable to noncontrolling interests (28) —
 (3,052) —
 (3,080)
Currency translation adjustments attributable to noncontrolling interests —
 —
 571
 —
 571
Total comprehensive income attributable to noncontrolling interests (28) —
 (2,481) —
 (2,509)
Total comprehensive loss attributable to Bristow Group (57,260) (6,521) (42,032) 51,653
 (54,160)
Accretion of redeemable noncontrolling interests —
 —
 (1,498) —
 (1,498)
Total comprehensive loss attributable to common stockholders $(57,260) $(6,521) $(43,530) $51,653
 $(55,658)

37
Table of Contents
BRISTOW GROUP INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)


Supplemental Condensed Consolidating Balance Sheet
As of September 30, 2016
  
Parent
Company
Only
 
Guarantor
Subsidiaries
 
Non-
Guarantor
Subsidiaries
 Eliminations Consolidated
           
  (In thousands)  
ASSETS
Current assets:          
Cash and cash equivalents $—
 $1,012
 $100,287
 $(631) $100,668
Accounts receivable 528,561
 482,433
 390,380
 (1,194,018) 207,356
Inventories —
 35,603
 91,370
 —
 126,973
Assets held for sale —
 28,034
 12,304
 —
 40,338
Prepaid expenses and other current assets 3,105
 (2,133) 49,538
 —
 50,510
Total current assets 531,666
 544,949
 643,879
 (1,194,649) 525,845
Intercompany investment 2,507,155
 104,435
 131,200
 (2,742,790) —
Investment in unconsolidated affiliates —
 —
 206,483
 —
 206,483
Intercompany notes receivable 145,696
 13,786
 3,600
 (163,082) —
Property and equipment—at cost:          
Land and buildings 4,806
 63,932
 168,544
 —
 237,282
Aircraft and equipment 148,739
 1,115,785
 1,350,061
 —
 2,614,585
  153,545
 1,179,717
 1,518,605
 —
 2,851,867
Less: Accumulated depreciation and amortization (26,927) (245,141) (288,887) —
 (560,955)
  126,618
 934,576
 1,229,718
 —
 2,290,912
Goodwill —
 —
 28,922
 —
 28,922
Other assets 40,646
 638
 104,650
 —
 145,934
Total assets $3,351,781
 $1,598,384
 $2,348,452
 $(4,100,521) $3,198,096
           
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND STOCKHOLDERS’ INVESTMENT
Current liabilities:          
Accounts payable $245,309
 $592,996
 $394,685
 $(1,122,340) $110,650
Accrued liabilities 25,739
 28,805
 159,849
 (15,418) 198,975
Current deferred taxes (1,422) 2,281
 (163) —
 696
Short-term borrowings and current maturities of long-term debt 28,412
 —
 53,098
 —
 81,510
Contingent consideration —
 —
 7,352
 —
 7,352
Total current liabilities 298,038
 624,082
 614,821
 (1,137,758) 399,183
Long-term debt, less current maturities 1,119,766
 —
 20,270
 —
 1,140,036
Intercompany notes payable —
 97,129
 124,282
 (221,411) —
Accrued pension liabilities —
 —
 55,036
 —
 55,036
Other liabilities and deferred credits 9,452
 6,371
 9,314
 —
 25,137
Deferred taxes 128,766
 5,278
 15,284
 —
 149,328
Redeemable noncontrolling interest —
 —
 13,175
 —
 13,175
Stockholders’ investment:          
Common stock 378
 20,028
 115,317
 (135,345) 378
Additional paid-in-capital 803,801
 29,387
 284,048
 (313,435) 803,801
Retained earnings 1,096,794
 816,109
 824,282
 (1,640,391) 1,096,794
Accumulated other comprehensive loss 78,306
 —
 266,517
 (652,181) (307,358)
Treasury shares (184,796) —
 —
 —
 (184,796)
Total Bristow Group stockholders’ investment 1,794,483
 865,524
 1,490,164
 (2,741,352) 1,408,819
Noncontrolling interests 1,276
 —
 6,106
 —
 7,382
Total stockholders’ investment 1,795,759
 865,524
 1,496,270
 (2,741,352) 1,416,201
Total liabilities, redeemable noncontrolling interests and stockholders’ investment $3,351,781
 $1,598,384
 $2,348,452
 $(4,100,521) $3,198,096

38
Table of Contents
BRISTOW GROUP INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)


Supplemental Condensed Consolidating Balance Sheet
As of March 31, 2016
  
Parent
Company
Only
 
Guarantor
Subsidiaries
 
Non-
Guarantor
Subsidiaries
 Eliminations Consolidated
           
  (In thousands)
ASSETS
Current assets:          
Cash and cash equivalents $35,241
 $3,393
 $65,676
 $—
 $104,310
Accounts receivable 768,641
 353,729
 373,963
 (1,247,016) 249,317
Inventories —
 37,185
 105,318
 —
 142,503
Assets held for sale —
 38,771
 5,012
 —
 43,783
Prepaid expenses and other current assets 5,048
 (1,843) 49,978
 —
 53,183
Total current assets 808,930
 431,235
 599,947
 (1,247,016) 593,096
Intercompany investment 2,207,516
 104,435
 145,168
 (2,457,119) —
Investment in unconsolidated affiliates —
 —
 194,952
 —
 194,952
Intercompany notes receivable 153,078
 13,787
 3,600
 (170,465) —
Property and equipment—at cost:          
Land and buildings 4,776
 63,976
 184,346
 —
 253,098
Aircraft and equipment 137,751
 1,142,829
 1,289,997
 —
 2,570,577
  142,527
 1,206,805
 1,474,343
 —
 2,823,675
Less: Accumulated depreciation and amortization (23,556) (238,644) (278,223) —
 (540,423)
  118,971
 968,161
 1,196,120
 —
 2,283,252
Goodwill —
 —
 29,990
 —
 29,990
Other assets 48,190
 743
 112,722
 —
 161,655
Total assets $3,336,685
 $1,518,361
 $2,282,499
 $(3,874,600) $3,262,945
           
LIABILITIES, REDEEMABLE NONCONTROLLING INTERESTS AND STOCKHOLDERS’ INVESTMENT
Current liabilities:          
Accounts payable $208,230
 $475,118
 $296,860
 $(883,242) $96,966
Accrued liabilities 26,886
 31,371
 401,031
 (257,683) 201,605
Current deferred taxes 88
 1,914
 (121) —
 1,881
Short-term borrowings and current maturities of long-term debt 25,678
 —
 34,716
 —
 60,394
Contingent consideration —
 —
 29,522
 —
 29,522
Total current liabilities 260,882
 508,403
 762,008
 (1,140,925) 390,368
Long-term debt, less current maturities 1,047,150
 —
 24,428
 —
 1,071,578
Intercompany notes payable —
 108,952
 81,422
 (190,374) —
Accrued pension liabilities —
 —
 70,107
 —
 70,107
Other liabilities and deferred credits 12,278
 6,935
 14,060
 —
 33,273
Deferred taxes 147,631
 3,670
 20,953
 —
 172,254
Redeemable noncontrolling interests —
 —
 15,473
 —
 15,473
Stockholders’ investment:          
Common stock 377
 4,996
 130,348
 (135,344) 377
Additional paid-in-capital 801,173
 9,291
 284,048
 (293,339) 801,173
Retained earnings 1,172,273
 876,114
 807,131
 (1,683,245) 1,172,273
Accumulated other comprehensive loss 78,306
 —
 63,248
 (431,373) (289,819)
Treasury shares (184,796) —
 —
 —
 (184,796)
Total Bristow Group stockholders’ investment 1,867,333
 890,401
 1,284,775
 (2,543,301) 1,499,208
Noncontrolling interests 1,411
 —
 9,273
 —
 10,684
Total stockholders’ investment 1,868,744
 890,401
 1,294,048
 (2,543,301) 1,509,892
Total liabilities, redeemable noncontrolling interests and stockholders’ investment $3,336,685
 $1,518,361
 $2,282,499
 $(3,874,600) $3,262,945

39
Table of Contents
BRISTOW GROUP INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)


Supplemental Condensed Consolidating Statement of Cash Flows
SixThree Months Ended SeptemberJune 30, 2016
 
 
Parent
Company
Only
 
Guarantor
Subsidiaries
 
Non-
Guarantor
Subsidiaries
 Eliminations Consolidated 
Parent
Company
Only
 
Guarantor
Subsidiaries
 
Non-
Guarantor
Subsidiaries
 Eliminations Consolidated
                    
 (In thousands) (In thousands)
Net cash provided by (used in) operating activities $(36,618) $56,788
 $8,499
 $(631) $28,038
 $(47,632) $17,142
 $15,678
 $(16) $(14,828)
Cash flows from investing activities:                    
Capital expenditures (11,958) (20,411) (69,497) —
 (101,866) (7,238) (6,380) (7,445) —
 (21,063)
Proceeds from asset dispositions —
 10,374
 1,445
 —
 11,819
 —
 9,486
 2,014
 —
 11,500
Net cash used in investing activities (11,958) (10,037) (68,052) —
 (90,047)
Net cash provided by (used in) investing activities (7,238) 3,106
 (5,431) —
 (9,563)
Cash flows from financing activities:                    
Proceeds from borrowings 191,501
 —
 4,453
 —
 195,954
 71,950
 —
 2,458
 —
 74,408
Debt issuance costs (2,925) —
 —
 —
 (2,925) (2,925) —
 —
 —
 (2,925)
Repayment of debt (116,051) —
 (4,915) —
 (120,966) (16,000) —
 (2,035) —
 (18,035)
Dividends paid (4,554) 4
 (360) —
 (4,910) (2,453) —
 —
 —
 (2,453)
Increases (decreases) in cash related to intercompany advances and debt (54,611) (49,136) 103,747
 —
 —
 (30,342) (23,641) 53,983
 —
 —
Partial prepayment of put/call obligation (25) —
 —
 —
 (25) (13) —
 —
 —
 (13)
Payment of contingent consideration —
 —
 (10,000) —
 (10,000) —
 —
 (10,000) —
 (10,000)
Repurchases for tax withholdings on vesting of equity awards (570) —
 —
 —
 (570)
Net cash provided by (used in) financing activities 13,335
 (49,132) 92,925
 —
 57,128
 19,647
 (23,641) 44,406
 —
 40,412
Effect of exchange rate changes on cash and cash equivalents —
 —
 1,239
 —
 1,239
 —
 —
 2,380
 —
 2,380
Net increase (decrease) in cash and cash equivalents (35,241) (2,381) 34,611
 (631) (3,642) (35,223) (3,393) 57,033
 (16) 18,401
Cash and cash equivalents at beginning of period 35,241
 3,393
 65,676
 —
 104,310
 35,241
 3,393
 65,676
 —
 104,310
Cash and cash equivalents at end of period $—
 $1,012
 $100,287
 $(631) $100,668
 $18
 $—
 $122,709
 $(16) $122,711

40
Table of Contents
BRISTOW GROUP INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
(Unaudited)


Supplemental Condensed Consolidating Statement of Cash Flows
Six Months Ended September 30, 2015
  
Parent
Company
Only
 
Guarantor
Subsidiaries
 
Non-
Guarantor
Subsidiaries
 Eliminations Consolidated
           
  (In thousands)
Net cash provided by (used in) operating activities $(80,805) $96,181
 $42,884
 $—
 $58,260
Cash flows from investing activities:          
Capital expenditures (18,679) (88,872) (39,438) —
 (146,989)
Proceeds from asset dispositions —
 13,937
 2,170
 —
 16,107
Net cash used in investing activities (18,679) (74,935) (37,268) —
 (130,882)
Cash flows from financing activities:          
Proceeds from borrowings 461,575
 —
 6
 —
 461,581
Repayment of debt (316,200) —
 (7,369) —
 (323,569)
Dividends paid (23,746) —
 —
 —
 (23,746)
Increases (decreases) in cash related to intercompany advances and debt (2,366) (20,977) 23,343
 —
 —
Partial prepayment of put/call obligation (28) —
 —
 —
 (28)
Acquisition of noncontrolling interest —
 —
 (2,000) —
 (2,000)
Payment of contingent consideration —
 —
 (8,000) —
 (8,000)
Tax benefit related to stock-based compensation 203
 —
 —
 —
 203
Net cash provided by (used in) financing activities 119,438
 (20,977) 5,980
 —
 104,441
Effect of exchange rate changes on cash and cash equivalents —
 —
 3,376
 —
 3,376
Net increase in cash and cash equivalents 19,954
 269
 14,972
 —
 35,195
Cash and cash equivalents at beginning of period 126
 884
 103,136
 —
 104,146
Cash and cash equivalents at end of period $20,080
 $1,153
 $118,108
 $—
 $139,341

Report of Independent Registered Public Accounting Firm
To the Board of Directors and Stockholders
Bristow Group Inc.:
We have reviewed the accompanying condensed consolidated balance sheets of Bristow Group Inc. and subsidiaries as of SeptemberJune 30, 20162017, and the related condensed consolidated statements of operations, and comprehensive income (loss) for the three and six month periods ended September 30, 2016 and 2015, the condensed consolidated statements ofloss, cash flows for the six month periods ended September 30, 2016 and 2015, and the condensed consolidated statement of changes in equity and redeemable noncontrolling interestsinterest for the six month periodthree-month periods ended SeptemberJune 30, 2017 and 2016. These condensed consolidated financial statements are the responsibility of the Company’s management.
We conducted our reviews in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States), the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.
Based on our reviews, we are not aware of any material modifications that should be made to the condensed consolidated financial statements referred to above for them to be in conformity with U.S. generally accepted accounting principles.
We have previously audited, in accordance with standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheetsheets of Bristow Group Inc. and subsidiaries as of March 31, 2016,2017, and the related consolidated statements of income,operations, comprehensive income (loss),loss, cash flows and stockholders’ investment and redeemable noncontrolling interests for the year then ended (not presented herein); and in our report dated May 27, 201623, 2017, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of March 31, 20162017 is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.
 
 /s/ KPMG LLP 
Houston, Texas
NovemberAugust 3, 20162017

Item 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations.Operations
Management’s Discussion and Analysis of Financial Condition and Results of Operations, or MD&A, should be read in conjunction with the accompanying unaudited condensed consolidated financial statements and the notes thereto as well as our Annual Report on Form 10-K for the fiscal year ended March 31, 20162017 (the “fiscal year 20162017 Annual Report”) and the MD&A contained therein. In the discussion that follows, the terms “Current Quarter” and “Comparable Quarter” refer to the three months ended SeptemberJune 30, 20162017 and 2015, respectively, and the terms “Current Period” and “Comparable Period” refer to the six months ended September 30, 2016 and 2015, respectively. Our fiscal year ends March 31, and we refer to fiscal years based on the end of such period. Therefore, the fiscal year ending March 31, 20172018 is referred to as “fiscal year 20172018”.
Forward-Looking Statements
This Quarterly Report contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 (the “Exchange Act”). Forward-looking statements are statements about our future business, strategy, operations, capabilities and results; financial projections; plans and objectives of our management; expected actions by us and by third parties, including our clients, competitors, vendors and regulators; and other matters. Some of the forward-looking statements can be identified by the use of words such as “believes”, “belief”, “expects”, “plans”, “anticipates”, “intends”, “projects”, “estimates”, “may”, “might”, “would”, “could” or other similar words; however, all statements in this Quarterly Report, other than statements of historical fact or historical financial results, are forward-looking statements.
Our forward-looking statements reflect our views and assumptions on the date we are filing this Quarterly Report regarding future events and operating performance. We believe that they are reasonable, but they involve known and unknown risks, uncertainties and other factors, many of which may be beyond our control, that may cause actual results to differ materially from any future results, performance or achievements expressed or implied by the forward-looking statements. Accordingly, you should not put undue reliance on any forward-looking statements.
You should consider the following key factors when evaluating these forward-looking statements:
•the possibility of political instability, war or acts of terrorism in any of the countries where we operate;
•fluctuations in worldwide prices of and demand for oil and natural gas;
•fluctuations in levels of oil and natural gas exploration, development and production activities;
•fluctuations in the demand for our services;
•the existence of competitors;
the existence of operating risks inherent in our business, including the possibility of declining safety performance;
•the possibility of changes in tax and other laws and regulations;
•the possibility that the major oil companies do not continue to expand internationally and offshore;
•the possibilitysegments of significant changes in foreign exchange rates and controls;
•general economic conditions including the capital and credit markets;our fleet may be grounded for extended periods of time or indefinitely;
the possibility that we may impairbe unable to obtain financing, draw on our long-lived assets, including goodwill, property and equipment and investments in unconsolidated affiliates;credit facilities or enter into definitive agreements with respect to financings on terms that are favorable to us;
the possibility that we may lack sufficient liquidity or access to additional financing sources to continue to finance contractual commitments;
the possibility that we may be unable to maintain compliance with debt covenants;
the possibility that we may be unable to defer payment on certain aircraft into future fiscal years or take delivery of certain aircraft later than initially scheduled;
the possibility that we may be unable to acquire additional aircraft due to limited availability or unable to exercise aircraft purchase options;impair our long-lived assets, including goodwill, property and equipment and investments in unconsolidated affiliates;

the possibility of significant changes in foreign exchange rates and controls, including as a result of Brexit;
•the possibility that we may be unable to dispose of older aircraft through sales into the aftermarket;
•the possibility that we or our suppliers may be unable to deliver new aircraft on time or on budget;
•the possibility that we may be unable to obtain financing or we may be unable to draw on our credit facilities;
the possibility that we may lack sufficient liquidity tothe major oil companies do not continue to pay a quarterly dividend or finance contractual commitments;expand internationally and offshore;
the existence of competitors;
the existence of operating risks inherent in our business, including the possibility of declining safety performance;
the possibility thatof political instability, war or acts of terrorism in any of the countries where we may be unable to maintain compliance with debt covenants;operate;
•the possibility that segments of our fleet may be grounded for extended periods of time or indefinitely;changes in tax and other laws and regulations;
•
the possibility that we may be unable to re-deploy our aircraft to regions with greater demand;
the possibility that reductions in spending on aviation services by governmental agencies could lead to modifications of search and rescue (“SAR”) contract terms or delays in receiving payments;
the possibility that we may be unable to acquire additional aircraft due to limited availability or unable to exercise aircraft purchase options;
general economic conditions, including the capital and credit markets;
the possibility that we or our suppliers may be unable to deliver new aircraft on time or on budget;
the possibility that clients may reject our aircraft due to late delivery or unacceptable aircraft design or operability; and
the possibility that we do not achieve the anticipated benefits from the addition of new-technology aircraft to our fleet.
The above description of risks and uncertainties is by no means all-inclusive, but is designed to highlight what we believe are important factors to consider. For a more detailed description of risk factors, please see the risks and uncertainties described under Item 1A. “Risk Factors” included in the fiscal year 20162017 Annual Report and in this Quarterly Report.
All forward-looking statements in this Quarterly Report are qualified by these cautionary statements and are only made as of the date of this Quarterly Report. We do not undertake any obligation, other than as required by law, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Executive Overview
This Executive Overview only includes what management considers to be the most important information and analysis for evaluating our financial condition and operating performance. It provides the context for the discussion and analysis of the financial information that follows and does not disclose every item impacting our financial condition and operating performance.
General
We are the leading global industrial aviation services provider based on the number of aircraft operated and one of two helicopter service providers to the offshore energy industry with global operations.operated. We have a long history in industrial aviation services through Bristow Helicopters Ltd. (“Bristow Helicopters”) and Offshore Logistics, Inc., which were founded in 1955 and 1969, respectively. We have major transportation operations in the North Sea, Nigeria and the U.S. Gulf of Mexico, and in most of the other major offshore energy producing regions of the world, including Australia, Brazil, Canada, Russia and Trinidad. We provide private sector SAR services in Australia, Canada, Nigeria, Norway, Russia, Trinidad and the United States. We provide public sector SAR services in the U.K. on behalf of the Maritime & Coastguard Agency. We also provide regional fixed wing scheduled and charter services in the U.K., Nigeria and Australia through our consolidated affiliates, Eastern Airways International Limited (“Eastern Airways”) and Capiteq Limited, operating under the name of Airnorth, respectively. These operations support our primary industrial aviation services operations in those markets, creating a more integrated logistics solution for our clients.
In fiscal year 2013, Bristow Helicopters was awarded a contract with the U.K. Department for Transport (“DfT”(the “DfT”) to provide public sector SAR services for all of the U.K. (the “U.K. SAR contract”). The U.K. SAR contract has a phased-in transition period that began in April 2015 and continuescontinued to July 2017 and a contract length of approximately ten years. We are currently operational at nineall ten bases as follows: Humberside and Inverness (April 2015), Caernarfon (July 2015), Lydd (August 2015), St. Athan (October 2015), Prestwick and Newquay (January 2016), Lee-on-Solent (March 2017), and two previously awarded Gap SAR bases of Sumburgh (June 2013) and Stornoway (July 2013). Operation is expected to commence at one additional base in fiscal year 2018. The twoOne Gap SAR bases are expected to transitionbase transitioned to the U.K. SAR contract in fiscal year 2018.on March 31, 2017 and the remaining Gap SAR base transitioned to the U.K. SAR contract on July 1, 2017.
During the Current Period,Quarter, we generated approximately 70%69% of our consolidated operating revenue from external clients from oil and gas operations, approximately 14%15% from SAR operations and approximately 15% from fixed wing services that support our global helicopter operations.
We conduct our business in one segment: Industrial Aviation Services.industrial aviation services. The Industrial Aviation Servicesindustrial aviation services segment operations are conducted primarily through four regions:
Europe Caspian,
Africa,
Americas, and
Asia Pacific.
We primarily provide industrial aviation services to a broad base of major integrated, national and independent offshore energy companies. Our clients charter our helicopters primarily to transport personnel between onshore bases and offshore production platforms, drilling rigs and other installations. To a lesser extent, our clients also charter our helicopters to transport time-sensitive equipment to these offshore locations. These clients’clients' operating expenditures in the production sector are the principal source of our revenue, while their exploration and development capital expenditures provide a lesser portion of our revenue. The clients for SAR services include both the oil and gas industry, where our revenue is primarily dependent on our clients’ operating expenditures, and governmental agencies, where our revenue is dependent on a country’scountry's desire to privatize SAR and enter into long-term contracts. In addition to our primary Industrial Aviation Servicesindustrial aviation services operations, we also operate a training unit, Bristow Academy. As of SeptemberJune 30, 20162017, we operated 345344 aircraft (including 230223 owned aircraft and 115121 leased aircraft; 2714 of the owned aircraft are held for sale) and our unconsolidated affiliates operated 113 aircraft in addition to those aircraft leased from us.


The chart below presents (1) the number of aircraft in our fleet and their distribution among the regions of our Industrial Aviation Servicesindustrial aviation services segment as of SeptemberJune 30, 20162017; (2) the number of helicopters which we had on order or under option as of SeptemberJune 30, 20162017; and (3) the percentage of operating revenue which each of our regions provided during the Current Period.Quarter. For additional information regarding our commitments and options to acquire aircraft, see Note 5 in the “Notes to Condensed Consolidated Financial Statements” included elsewhere in this Quarterly Report.
 
Percentage
of Current
Period
Operating
Revenue
 Aircraft in Consolidated Fleet     
Percentage
of Current
Quarter
Operating
Revenue
 Aircraft in Consolidated Fleet    
 Helicopters 
Fixed
Wing (1)
   
Unconsolidated
Affiliates (4)
   Helicopters 
Fixed
Wing (1)
   
Unconsolidated
Affiliates (4)
  
 Small Medium Large Training 
Total (2)(3)
 Total Small Medium Large Training
Total (2)(3)
 Total
Europe Caspian 54% —
 14
 74
 —
 30
 118
 —
 118
 54% —
 16
 78
 —
 31
 125
 —
 125
Africa 15% 14
 30
 5
 —
 4
 53
 45
 98
 15% 9
 31
 5
 —
 5
 50
 46
 96
Americas 17% 15
 45
 17
 —
 —
 77
 68
 145
 17% 14
 41
 17
 —
 —
 72
 67
 139
Asia Pacific 14% 2
 9
 23
 —
 14
 48
 —
 48
 14% 2
 10
 23
 —
 14
 49
 —
 49
Corporate and other —% —
 —
 —
 49
 —
 49
 —
 49
 —% —
 —
 —
 48
 —
 48
 —
 48
Total 100% 31
 98
 119
 49
 48
 345
 113
 458
 100% 25
 98
 123
 48
 50
 344
 113
 457
Aircraft not currently in fleet: (5)
                                    
On order (6)
   —
 5
 30
 —
 —
 35
       —
 2
 27
 —
 —
 29
    
Under option   —
 2
 4
 —
 —
 6
       —
 —
 4
 —
 —
 4
    
_________________________ 
(1) 
Includes 32
Eastern Airways operates a total of 31 fixed wing aircraft operated by Eastern Airways which are included in the Europe Caspian region and provides technical support for 3 fixed wing aircraft in the Africa regions andregion. Additionally, Airnorth operates a total of 14 fixed wing aircraft, operated by Airnorth which are included in the Asia Pacific region.
(2) 
Includes 2714 aircraft held for sale and 115121 leased aircraft as follows:
 Held for Sale Aircraft in Consolidated Fleet Held for Sale Aircraft in Consolidated Fleet
 Helicopters   Helicopters  
 Small Medium Large Training 
Fixed
Wing
 Total Small Medium Large Training 
Fixed
Wing
 Total
Europe Caspian —
 1
 —
 —
 —
 1
 —
 2
 —
 —
 —
 2
Africa 5
 7
 —
 —
 —
 12
 —
 4
 —
 —
 —
 4
Americas 1
 8
 —
 —
 —
 9
 —
 5
 —
 —
 —
 5
Asia Pacific —
 —
 —
 —
 1
 1
 —
 —
 —
 —
 1
 1
Corporate and other —
 —
 —
 4
 —
 4
 —
 —
 —
 2
 —
 2
Total 6
 16
 —
 4
 1
 27
 —
 11
 —
 2
 1
 14
                        
 Leased Aircraft in Consolidated Fleet Leased Aircraft in Consolidated Fleet
 Helicopters     Helicopters    
 Small Medium Large Training 
Fixed
Wing
 Total Small Medium Large Training 
Fixed
Wing
 Total
Europe Caspian —
 5
 39
 —
 12
 56
 —
 6
 39
 —
 13
 58
Africa —
 —
 2
 —
 2
 4
 —
 1
 2
 —
 2
 5
Americas 1
 14
 5
 —
 —
 20
 1
 14
 7
 —
 —
 22
Asia Pacific 2
 2
 9
 —
 4
 17
 2
 3
 9
 —
 4
 18
Corporate and other —
 —
 —
 18
 —
 18
 —
 —
 —
 18
 —
 18
Total 3
 21
 55
 18
 18
 115
 3
 24
 57
 18
 19
 121
(3) 
The average age of our commercial helicopter fleet, which excludes training aircraft, was approximately nine years as ofSeptemberJune 30, 20162017.
(4) 
The 113 aircraft operated by our unconsolidated affiliates do not include those aircraft leased from us. Includes 4443 helicopters (primarily medium) and 24 fixed wing aircraft owned and managed by Líder Táxi Aéreo S.A. (“Líder”), our unconsolidated affiliate in Brazil which is included in the Americas region, and 39 helicopters and 7 fixed wing aircraft owned by Petroleum Air Services (“PAS”), our unconsolidated affiliate in Egypt included in the Africas region.
(5) 
This table does not reflect aircraft which our unconsolidated affiliates may have on order or under option.
(6)
Includes $83.7 million for five aircraft orders that can be cancelled prior to delivery dates. During the Current Quarter, we made non-refundable deposits of $4.5 million related to these aircraft.

The commercial aircraft in our consolidated fleet represented in the above chart are our primary source of revenue. To normalize the consolidated operating revenue of our commercial helicopter fleet for the different revenue productivity and cost, we developed a common weighted factor that combines large, medium and small commercial helicopters into a combined standardized number of revenue producing commercial aircraft assets. We call this measure Large AirCraft Equivalent (“LACE”). Our commercial large, medium and small helicopters, including owned and leased helicopters, are weighted as 100%, 50%, and 25%, respectively, to arrive at a single LACE number, which excludes Bristow Academy aircraft, fixed wing aircraft, unconsolidated affiliate aircraft, aircraft held for sale and aircraft construction in progress. We divide our operating revenue from commercial contracts relating to LACE aircraft, which excludes operating revenue from affiliates and reimbursable revenue, by LACE to develop a LACE rate, which is a standardized rate. Our current number of LACE is 166 and our historical LACE and LACE rate is as follows:
     
   
Current
Period (1)
 Fiscal Year Ended March 31,
   2016 2015 2014 2013 2012
 LACE 166
 162
 166
 158
 158
 149
 LACE Rate (in millions) $7.28
 $8.85
 $9.33
 $9.34
 $8.35
 $7.89
   
Current
Quarter (1)
 Fiscal Year Ended March 31,
   2017 2016 2015 2014 2013
 LACE 173
 174
 162
 166
 158
 158
 LACE Rate (in millions) $6.66
 $6.63
 $8.85
 $9.33
 $9.34
 $8.35
_________________________ 
(1) LACE rate is annualized.
(1)
LACE rate is annualized.
The following table presents the distribution of LACE helicopters owned and leased, and the percentage of LACE leased as of SeptemberJune 30, 20162017. The percentage of LACE leased is calculated by taking the total LACE for leased commercial helicopters divided by the total LACE for all commercial helicopters we operate, including both owned and leased.
  LACE  
  Owned Aircraft Leased Aircraft 
Percentage
of LACE
leased
 Europe Caspian39
 42
 52%
 Africa17
 2
 11%
 Americas27
 12
 31%
 Asia Pacific18
 11
 38%
 Total100
 66
 40%
  LACE  
  Owned Aircraft Leased Aircraft 
Percentage
of LACE
leased
 Europe Caspian43
 42
 49%
 Africa18
 3
 12%
 Americas24
 14
 37%
 Asia Pacific18
 11
 39%
 Total103
 70
 40%

Our Strategy
Our goal is to strengthen our position as the leading industrial aviation services provider to the offshore energy industry and a leading industrial aviation services provider for civilian SAR and to pursue additional business opportunities that leverage our strengths in these markets. WeOur vision is to be a safe, financially strong, diversified global leader, succeeding no matter how challenging market conditions may be. To achieve this goal and vision, we intend to employ the following well defined business/commercial and capital allocation strategies to achieve this goal:
Business/Commercial Strategyour “STRIVE” strategy as follows:
Be the preferred industrial aviation services providerSustain Target Zero Safety Culture. We are positioned in the marketSafety will always be our number one focus. The best approach to be the preferred provider of industrial aviation services by maintaining strong relationships withTarget Zero is continuously improve our clientssafety systems and providing a high level of safety and operating reliably. This differentiation is maintained because of our focus on our cornerstone philosophy of “Target Zero Accidents”, “Target Zero Downtime” and “Target Zero Complaints” allowingprocesses to allow us to achieve “Operational Excellence”.  Operational Excellence means we maintain close relationshipsbecome even safer and to build confidence in our industry and among our regulators with field operations, corporate management and contacts at our oil and gas clients and governmental agencies which we believe help us better anticipate client needs and provide them reliable service. We provide our clients operational predictability by positioningrespect to the right assets in the right place at the right time. This in turn allows us to better manage our fleet utilization and capital investment program and drive internal efficiencies.  By better understanding and delivering on our clients’ needs, we effectively compete against other industrial aviation service providers with better aircraft optionality, client service, and reliability, not just on price and safety. In October 2014, we along with four majorsafety of helicopter operators formally launched HeliOffshore. HeliOffshore is an industry organization with the primary goal of enhancing the already strong safety record of the offshore helicopter industry by sharing best practices in automation, performance monitoring, operating procedures, and advanced technology to establish common global flight standards. We believe this will make our sector a sustainably reliable and dependable logistics option for the oil and gas industry.transportation globally.
GrowTrain and Develop our business while managing our assets. We plan to continue to grow our business globally and increase our revenue and profitability over time, while managing through cyclical downturns in the energy industry or governmental spending reductions or modifications. We conduct flight operations in most major oil and gas producing regions of the world, and through our strong relationships with our existing clients, we are aware of future business opportunities in the markets we currently serve that would allow us to grow through new contracts. Additionally, new opportunities may result in growth through acquisitions, participation with existing unconsolidated affiliates, investing in new companies, or creating partnerships and alliances with existing industry participants or in new sectors of the air transport industry. We are also actively managing our aircraft fleet with the expressed goal of renewing the fleet with newer technology aircraft over time, while also reducing the number of fleet types we operate. We expect that a reduction in the number of fleet types we operate will allow us to realize operating, maintenance, inventory and supply chain efficiencies across a more standardized global fleet of aircraft.
Sustaining Operational ExcellencePeople. We continue to invest in operations transformation acrossemployee training to ensure that we have the best workforce in the industry. We believe that the skills, talent and dedication of our organization, withemployees are our most important assets, and we plan to continue to invest in them, especially in entry level learning, the goalcontinued control and ownership of developingour training assets, and sustaining industry differentiation throughcreation of leadership programming.
Renew Commercial Strategy and Operational Excellence. We define our objective of ongoing improvement across four strategic areas: client alignment, operational excellence, exceptional people and profitable growth. We strive for the highest standards in safety performance, mission execution, people management and financial discipline. We have appointed a number of global account and business development executives to support our drive to deliver Operational Excellence to our clients. We are also working to improve operational performance through our global supply chain and fleet management groups.. We are in the process of further standardizing, simplifying and integratingrenewing both our business processescommercial strategy to improve revenue productivity across our global operations somarkets and our operational strategy to serve our clients safely, reliably and efficiently. We believe that we can better provide more consistentneed to renew these strategies in order to thrive in an economy that is undergoing long-term structural change.
Improve Balance Sheet and high quality service delivery. We have invested in two new technology platforms, eFlight and a new ERP platform, to support flight operations and activities such as finance, supply chain and maintenance. The expected benefits of these efforts in addition to a scalable platform for growth include fewer process steps, decreased cost, better maintenance turnaround, minimization of aircraft downtime, faster billing and collections, reduced inventory levels and lower risk exposure, which should lead to improved margins, asset turnover, cash flow and Bristow Value Added (“BVA”)Return on Capital. We expect the technology execution portion of Operational Excellenceseek to not onlycontinue to improve our differentiated position with our clients but also reduce risk and reinforce our objective of profitable growth.

Capital Allocation Strategy
Our capital allocation strategy is based on three principles as follows:
capitalallocation11.jpg
Prudent balance sheet management. Throughout our corporate and regional management, we proactively manageliquidity and reduce our capital allocation plancosts, with a focus on achieving business growthnear term goal of debt reduction and improving rates of return, withinprofitability. To achieve this we have historically practiced the dictatesprincipal of prudent balance sheet management. In addition tomanagement and have proactively managed our liquidity position with cash flow generatedflows from operations, we intend to maintain adequate liquidity and manage our capital structure relative to our commitments withas well as external financings. These external financings when necessary and throughhave included the use of operating leases for a target of approximately 35% of our LACE. The target recognizes that we will have variability above or below the target of approximately 5% of our LACE due to timing of leases, purchases, disposals and lease terminations. As of SeptemberJune 30, 2016,2017, commercial helicopters under operating leases accounted for 40% of our LACE. Our adjusted debt to total equity ratioSee “Liquidity and total liquidity were 130.8%Capital Resources —Financial Condition and $266.6 million, respectively, asSources of September 30, 2016 and 119.3% and $359.7 million, respectively, as of March 31, 2016. Adjusted debt includes balance sheet debt excluding unamortized debt issuance costs of $1.2 billion and $1.1 billion, respectively, the net present value of operating leases totaling $555.0 million and $578.3 million, respectively, letters of credit, bank guarantees and financial guarantees totaling $12.0 million and $11.7 million, respectively, and the unfunded pension liability of $55.0 million and $70.1 million, respectively, as of September 30 and March 31, 2016.


Highest return of BVA. Our internal financial management framework, called BVA, focuses on the returns we deliver across our organization. BVA is a financial performance measure that we use to measure gross cash flow less a capital charge, assumed to be 10.5% of the use of gross invested capital employed. Our goal is to achieve strong improvements in BVA over time by (1) improving the cash returns we earn throughout our organization via Operational Excellence initiatives and capital efficiency improvements as well as through better pricing based on the differentiated value we deliver to clients via the Bristow Client Promise program; (2) deploying more capital into commercial opportunities where management believes we can deliver strong returns and when we believe it will benefit us and our shareholders, including making strategic acquisitions or strategic equity investments; and (3) withdrawing capital from areas where returns are deemed inadequate and unable to be sufficiently improved. When appropriate, we may divest parts of the Company. Improvements in BVA are the primary financial measure in our management incentive plan, which is designed to align the interests of management with shareholders and also encourages management actions that increase the long-term value of the Company.
Balanced shareholder return. We continue to proactively manage our liquidity position with cash flows from operations, as well as external financings as discussed above. On November 1, 2016, our board of directors approved a dividend of $0.07 per share, our twenty-third consecutive quarterly dividend. Our board of directors has approved a dividend policy with a goal of an annualized quarterly dividend payout ratio of approximately 20-30% of forward adjusted earnings per share; however, actual dividend payments are at the discretion of the board of directors and may not meet or may exceed this ratio. Also, our board of directors has authorized expenditures to repurchase shares of common stock, par value $.01 per share (“Common Stock”), since November 2011. Through October 31, 2016, we had repurchased 2,756,419 shares of our Common Stock for a total of $184.8 million since 2011; however, no shares have been repurchased since December 2014. Further, since May 2016, covenants in our credit agreements have restricted our ability to repurchase our Common Stock and currently limit our ability to pay quarterly dividends to $0.07 per share. For additional information on our repurchases of Common Stock, see “Share Repurchases” in Note 10 to the financial statements in our fiscal year 2016 Annual Report and Note 8 to the condensed consolidated financial statementsLiquidity” included elsewhere in this Quarterly Report.Report for further discussion of our capital structure and liquidity. In August 2017, we suspended our quarterly dividend as part of a broader plan of reducing costs and improving liquidity. By suspending what has been a $0.07 per share quarterly dividend, we will preserve approximately $10 million of cash annually.
Value Added Acquisitions and Divestitures. We intend to pursue value-added acquisitions that not just make us bigger but better; that improve our competitive posture to thrive in an economy that is undergoing long-term structural change. We may also divest portions of our business or assets to narrow our product lines and reduce our operational footprint to reduce leverage and improve return on capital.
Execute on Bristow Transformation. We intend to sustain our strategy and the effective transformation of our business by focusing on execution globally.
Fiscal year 2018 STRIVE priorities — During fiscal year 2018, we will employ the following priorities in furtherance of the STRIVE strategy: (1) maintaining safety as the Company’s first priority; (2) achieving cost efficiencies, including reduced corporate general and administrative expenses to approximately 12% of revenues, while also implementing lean processes and improving productivity; (3) utilizing portfolio and fleet optimization, combined with pursuing original equipment manufacturers (“OEM”) cost recoveries and capital expenditure reduction to improve liquidity and reduce debt; and (4) achieving revenue growth through contracts wins in our primary geographical hubs with a focus on delivering greater efficiencies to our core oil and gas clients.


Market Outlook
Our core business is providing industrial aviation services to the worldwide oil and gas industry. We also provide public and private sector SAR services and fixed wing transportation services. Our global operations and critical mass of helicopters provide us with geographic and client diversity which helps mitigate risks associated with a single market or client.
The oil and gas business environment experienced a significant downturn beginning during fiscal years 2015 and 2016.year 2015. Brent crude oil prices declined from approximately $106 per barrel at July 1, 2014 to $48a low of approximately $26 per barrel at Septemberin February 2016 with an increase to approximately $46 per barrel as of June 30, 2016,2017. The decrease in oil prices was driven by increased global supply and forecasts of reduced demand for crude oil resulting from weaker global economic growth in many regions of the world. The oil price decline has negatively impacted the cash flow of our clients and has resulted in their implementation of measures to reduce operational and capital costs in calendar years 2015 and 2016 compared to 2014 levels, negatively impacting activity during fiscal years 2015, 2016 and 2016.2017. These cost reductions are expected to continue in the remainder of fiscalhave continued into calendar year 2017. The current price environment has had an impact on2017 and have impacted both the offshore production and the offshore exploration activity of our clients, with offshore production activity being impacted to a lesser extent.extent, continuing to negatively impact activity during fiscal year 2018. Although the largest share of our revenue relates to oil and gas production and our largest contract, the U.K. SAR contract, is not directly impacted by declining oil prices, the significant drop in the price of crude oil has resulted in the rescaling, delay or cancellation of planned offshore projects which has negatively impacted our operations and could continue to negatively impact our operations in future periods. We continue to expect this “lower for longer”The oil price environment is beginning to continue in calendar year 2017 with significant uncertaintyshow signs of stabilizing, but we are uncertain as to when a recovery in offshore spending will occur. An extended period of reduced crude oil prices and related offshore spending may have a material impact on our financial position, cash flow and results of operations.
The SAR market is continuing to evolve and we believe further outsourcing of public SAR services to the private sector will continue in the future, although the timing of these opportunities is uncertain. The clients for our SAR services include both the oil and gas industry and governmental agencies. We are also pursuing other public and oil and gas SAR opportunities for multiple aircraft in various jurisdictions around the globe. We are also pursuingglobe and other non-SAR government aircraft logistics opportunities.
As discussed above, we continue to seek ways to operate more efficiently and work with our clients to improve the efficiency of their operations within our “Operational Excellence”STRIVE strategy. We have reduced operating costs to achieveachieved savings during fiscal yearyears 2016 and the first half of fiscal year 2017 by implementing operating cost initiatives and furtherreduction initiatives. Further cost reductions and cash savings or capital deferral efforts are plannedanticipated across our business in the remainder of fiscal year 2017.

2018.
Recent Events
Aircraft incident — As previously reported, on April 29, 2016, another company’s EC 225LP (also known as a H225LP) model helicopter crashed near Turøy outside of Bergen, Norway. The voteaircraft was carrying eleven passengers and two crew members at the time of the accident. Thirteen fatalities were reported. The Accident Investigation Board Norway (“AIBN”) issued a report confirming its initial findings that the accident was caused by the fatigue fracture of a component within the aircraft's gearbox. The AIBN continues to investigate.
Prior to the accident, we operated a total of 27 H225LP model aircraft (including 16 owned and 11 leased) worldwide as follows:
•Five H225LP model aircraft registered in Norway;
•Thirteen H225LP model aircraft registered in the United Kingdom; and
•Nine H225LP model aircraft registered in Australia.
On June 2, 2016, the European Aviation Safety Agency (“EASA”) issued an emergency airworthiness directive, which was subsequently amended on June 3, 2016 and June 9, 2016 (collectively, the “June 2016 EASA Airworthiness Directive”), prohibiting flight of H225LP and AS332L2 model aircraft. The June 2016 EASA Airworthiness Directive by its terms did not apply to military, customs, police, search and rescue, firefighting, coastguard or similar activities or services as those types of services are governed by the member states of EASA directly.
On October 7, 2016, EASA subsequently issued a new airworthiness directive effective October 13, 2016 (the “October EASA Airworthiness Directive”) which expressly supersedes the June 2016 Airworthiness Directive and details the mandatory actions necessary to permit a return to service of the H225LP and AS332L2 model aircraft. However, the safety directives issued in June 2016 by the Norway Civil Aviation Agency (“NCAA”) and the U.K. Civil Aviation Authority (“U.K. CAA”) prohibiting commercial operation of the H225LP and AS332L2 model aircraft remained in effect.

On July 7, 2017, the U.K. CAA announced its intention and the intention of the NCAA to remove the restrictions on commercial operations of the H225LP and AS332L2 model aircraft and to establish conditions for return to flight of such aircraft model types. The U.K. CAA stated that the manufacturer of such aircraft model types has developed certain specified modifications and enhanced safety measures and that a plan of checks, modifications and inspections will be undertaken before any flights take place.
On July 20, 2017, the U.K. CAA and NCAA issued safety and operational directives which detail the conditions to apply for safe return to service of H225LP and AS332L2 model aircraft, where operators wish to do so. We do not currently have any AS332L2 model aircraft in our fleet. We continue not to operate for commercial purposes our sole H225LP model aircraft in Norway, our thirteen H225LP model aircraft in the United Kingdom or our six H225LP model aircraft in Australia, or for search and rescue purposes, including training and missions, any of our other four H225LP model aircraft in Norway or our other three H225LP model aircraft in Australia. Our other aircraft, including SAR, continue to leaveoperate globally.
We are working with local regulators, Airbus, HeliOffshore and clients, to carefully evaluate next steps and demand for the European UnionH225LP model aircraft in our oil and gas and search and rescue operations worldwide. In compliance with the updated safety directives, we are continuing redelivery work on four H225LP aircraft for their planned return to the leasing company over the course of this fiscal year as per the lease redelivery requirements. This redelivery work includes required flight testing as a final part of returning the aircraft to full serviceability. We continue to monitor the situation closely, with the safety of passengers and crews remaining our highest priority.
It is too early to determine whether the H225LP accident that occurred in Norway in April 2016 will have a material impact on us as we are in the process of quantifying the impact and investigating potential claims against Airbus.
July 2017 Credit Agreement — On July 17, 2017, one of our wholly-owned subsidiaries entered into a multiple advance term loan credit agreement with PK Transportation Finance Ireland Limited and the several banks, other financial institutions and other lenders from time to time party thereto, which provides for commitments in an aggregate amount of up to $230 million to make up to 24 term loans, each of which term loans shall be made in respect of an aircraft to be pledged as collateral for all of the term loans. The term loans also will be secured by a pledge of all shares of the borrower and any other assets of the borrower, and will be guaranteed by the Company.
Each term loan will bear interest at an interest rate equal to, at the borrower’s option, a floating rate of one-month LIBOR plus a margin of 5% per annum (the “Margin”), subject to certain costs of funds adjustments, determined two business days before the borrowing date of each term loan, or a fixed rate based on a notional interest rate swap of twelve 30-day months in respect of such term loan with a floating rate of interest based on one-month LIBOR, plus the Margin.
In connection with the credit agreement, the borrower will guarantee certain of its direct parent’s obligations under existing aircraft operating leases up to a capped amount.
The proceeds of the term loans, which are expected to fund on or before August 30, 2017 unless otherwise extended, are expected to be used to, among other things, repay portions of the outstanding term loan indebtedness of the Company and for general corporate purposes. The lenders are not obligated to fund any of the term loans until the satisfaction of certain conditions to funding, as specified in the credit agreement.
Structural and leadership changes — On June 8, 2017, we announced structural and leadership changes intended to create a strategically realigned and profitable company in an unprecedented downturn. The new Bristow will have two primary geographical hubs in key areas of business, Europe and the Americas, resulting in a more regionally focused, cost efficient and competitive business positioned to win more contracts. When complete, we believe these changes will result in a smaller, more nimble company, with the same intense focus on delivering safe, reliable service to customers, and positioned for future growth and profitability.
Our Europe hub includes Africa, Asia, Australia, Norway, U.K., Turkmenistan and the Middle East. Our Americas hub includes Bristow Academy, U.S. Gulf of Mexico, Suriname, Guyana, Trinidad, Canada and Brazil. Despite these structural changes, we are still operating primarily out of the four operating regions previously discussed and therefore have not made any changes to the regional disclosure of results for our industrial aviation services segment operations in this Quarterly Report.
The structural change into two primary hubs is expected to generate significant cost savings, in part through lower general and administrative costs. In conjunction with this announcement, we also announced a number of leadership changes, which included the elimination of certain management roles and other corporate positions.

Brexit— In a referendum held on June 23, 2016, voters in the United Kingdom (the “U.K.”)U.K. approved the exit of the U.K. (“Brexit”) from the European Union (the “E.U.”). While the result of the referendum is not legally binding onE.U. On March 29, 2017, the U.K. government it is expected that the U.K. government will commencecommenced the exit process under Article 50 of the Treaty of the European Union by notifying the European Council of the U.K.’s intention to leave the E.U. This notification will beginstarts a two-year time period for the U.K. and the remaining E.U. Member States to negotiate a withdrawal agreement.
For the six monthsquarter ended SeptemberJune 30, 20162017 and the year ended March 31, 2016,2017, approximately 38%37% and 34%36% of our revenue was derived from contracts with customers in the U.K., respectively, and approximately 15%17% and 16% of our revenue was derived from contracts with customers in other European markets, in both periods.respectively.
The consequences of Brexit, together with what may be protracted negotiations around the terms of Brexit, could introduce significant uncertainties into global financial markets and adversely impact the regions in which we and our customers operate. In the long term, Brexit could also create uncertainty with respect to the legal and regulatory requirements to which we and our customers in the U.K. are subject and lead to divergent national laws and regulations as the U.K. government determines which E.U. laws to modify or replace. Brexit also exacerbates the potential for additional referendums within the U.K., such as Scotland, which could lead to a breakup of the U.K., creating further legal and regulatory uncertainty.
The Brexit vote has already resulted in a significant depreciationdecline in the value of British pound sterling and volatility in exchange rates is expected to continue as the terms of Brexit are negotiated. If the British pound sterling remains weak or continues to depreciate,weaken, revenue under contracts denominated in British pound sterling will translate into fewer U.S. dollars. For the Current Period,Quarter, revenue denominated in British pound sterling represented approximately 36%34% of our revenue. TheseThe uncertainties surrounding Brexit and risks associated with the commencement of Brexit could have a material adverse effect on our current business and future growth. For discussion of the impact of changes in foreign currency exchange rates, including the British pound sterling, on our results, see “— Results of Operations — Current Quarter Compared to Comparable Quarter” and “— Results of Operations — Current Period Compared to Comparable Period” included elsewhere in this Quarterly Report.
The decision by Nigeria's central bank to move to market-driven foreign currency trading — On June 20, 2016, Nigeria’s central bank abandoned its 16-month peg to the U.S. dollar, which resulted in a 38% devaluation of the naira versus the U.S. dollar from June 20 to June 30, 2016 and an additional 11% further10% devaluation of the naira versus the U.S. dollar during the Current Quarter.from June 30, 2016 to June 30, 2017. For discussion of the impact of changes in foreign currency exchange rates, including the naira, on our results, see “— Results of Operations — Current Quarter Compared to Comparable Quarter” and “— Results of Operations — Current Period Compared to Comparable Period” included elsewhere in this Quarterly Report.
Impact of fleet changes — The management of our global aircraft fleet involves a careful evaluation of the expected demand for industrial aviation services across global energy markets, including the type of aircraft needed to meet this demand. As offshore oil and gas drilling and production globally moves to deeper water, more medium and large aircraft and newer technology aircraft may be required. As older aircraft models come off of current contracts and are replaced by new aircraft, our management evaluates our future needs for these aircraft models and ultimately the ability to recover our remaining investments in these aircraft through sales into the aftermarket. We depreciate our aircraft over their expected useful life to the expected salvage value to be received for the aircraft at the end of that life. However, dependingDepending on the market for aircraft or changes in the expected future use of aircraft within our fleet, we may record gains or losses on aircraft sales, impairment charges for aircraft operating or held for sale, or accelerate or increase depreciation on aircraft used in our operations. In certain instances where a cash return can be made on newer aircraft in excess of the expected return available through the provision of industrial aviation services, we may sell newer aircraft. The number of aircraft sales and the amount of gains and losses recorded on these sales is unpredictable. While aircraft sales are common in our business and are reflected in our operating results, gains and losses on aircraft sales may result in our operating results not reflecting the ordinary operating performance of our primary business, which is providing aircraftindustrial aviation services to our clients. The gains and losses on aircraft sales and any impairment charges are not included in the calculation of adjusted EBITDAR,EBITDA, adjusted net income (loss) or adjusted earnings per share or gross cash flows for purposes of calculating BVA.share.
As part of an ongoing process to rationalize and simplify our global fleet of commercial helicopters, during fiscal year 2014 we implemented a plan to reduce the number of aircraft types in our fleet to eight model types in approximately five years and six model types in approximately ten years. During fiscal year 2014, we completed our exit from five model types, in fiscal year 2015 we completed our exit from four model types while adding two model types and in fiscal year 2016 we completed our exit from two model types resulting in 11eleven model types in our fleet as of September 30,March 31, 2016. During fiscal year 2018, we completed our exit from two model types resulting in nine model types in our fleet as of July 28, 2017. As we modernize our fleet, the introduction of new technology aircraft types temporarily slows fleet type reduction.
During fiscal year 2015, we recorded impairment charges of $36.1 million related to 27 held for sale aircraft, primarily related to one large aircraft type we were in the process of removing from our fleet. Additionally, as we expected to complete the disposal of the remaining aircraft of this type still operating as of March 31, 2015, we adjusted the salvage value and recorded

additional depreciation expense of $6.0 million during fiscal year 2015. During fiscal year 2016, we saw further deterioration in market sales for aircraft resulting mostly from an increase in idle aircraft and reduced demand across the offshore energy market. While other markets exist for certain aircraft model types, including utility, firefighting, government, VIP transportation and tourism, the market for certain model type aircraft slowed. As a result of these market changes, we recorded impairment charges of $29.6 million related to 16 held for sale aircraft during fiscal year 2016 and $11.2 million related to 13 held for sale aircraft during the Current Period. Additionally, due to changes in estimated salvage values for our fleet of operational aircraft and other changes in the timing of exiting certain aircraft from our operations, we recorded an additional $8.2 million and $28.7 million in depreciation expense during the Current Period and fiscal year 2016, respectively, and we estimate that we will record accelerated depreciation expense of $2.2 million during the remainder of fiscal year 2017.
In accordance with accounting standards, we record impairment losses on property and equipment when events and circumstances indicate that an asset group might be impaired and the undiscounted cash flows estimated to be generated by those asset groups are less than the carrying amount of those asset groups. The weakening of the British pound sterling during the three months ended June 30, 2016 triggered a review of our property and equipment for potential impairment. Conditions during the Current Quarter remained consistent with the conditions that existed during the three months ended June 30, 2016. Subsequent to September 30, 2016, the British pound sterling weakened further. If these conditions persist or other operating results deteriorate, it is reasonably possible that the estimate of undiscounted cash flows may change in the near term resulting in the need to write down our oil and gas related property and equipment.
Selected Regional Perspectives
Brazil represents a significant part of our long term helicopter growth outlook due to its concentration and size of its offshore oil reserves. However, in the short term, Brazil and specifically, Petrobras, continues to evidence uncertainty as itsthe price of oil and Petrobras’ restructuring efforts have impacted the helicopter industry. Petrobras cancelled itsdid not release any new tenders for multiple medium and large aircraft that were expected to commence in calendar year 2016. While this represents a contraction in short-term demand, Brazil’s impact on long-term helicopter demand is expected to be material. Petrobras represented 60%62% of Líder’s operating revenue in fiscal year 20162017.
The Brazilian government has revisited the regulations on the oil and 66%gas industry and made significant changes to the Brazilian market, including removing the requirement that Petrobras have 30% participation on all exploratory blocks, removing the requirement that Petrobras be the operator of Líder’s operating revenue in calendarall pre-salt blocks and approving the next round of licensing for new exploration blocks (six years after the last successful round). In addition, the Brazilian government is currently reviewing local content requirements, which has led other operators to request information and/or proposals. Petrobras’ new management has implemented a five-year business and management plan focused on divestment, mostly of its non-core business. Overall, the Brazilian market outlook has improved compared to the prior year 2016.
for Líder also has significant business in the general aviation sector and is the exclusive dealerwith opportunities for Bombardier jet aircraft sales in Brazil. Additionally, Líder has secured a position as the exclusive dealer for Honda Jet aircraft sales in Brazil which is expected to add to its aircraft sales business.growth.
Currency fluctuations continue to make it difficult to predict the earnings from our Líder investment. These currency fluctuations, which primarily do not impact Líder’s cash flow from operations, had a significant negative impact on Líder’s results in fiscal years 2014, 2015, 2016 and 2016,2017, impacting our earnings from unconsolidated affiliates. Earnings from unconsolidated affiliates, net of losses, on our condensed consolidated statements of operations, is included in calculating adjusted EBITDAREBITDA, adjusted net income (loss) and adjusted net income.diluted earnings (loss) per share.
We are subject to competition and the political environment in the countries where we operate. In Nigeria, we have seen an increase in competitive pressure and the application of existing local content regulations that could impact our ability to win future work at levels previously anticipated. In order to properly and fully embrace new regulations, we have made a number of key changes to our operating model in Nigeria, while maintaining safety as our number one priority at all times. The objectives of these changes being (a) enhancing the level of continued compliance by each of Bristow Helicopters Nigeria Ltd. (“BHNL”) and Pan African Airlines Nigeria Ltd. (“PAAN”) with local content regulations, (b) providing technical aviation maintenance services through a wholly-owned Bristow Group entity, BGI Aviation Technical Services Nigeria Limited (“BATS”), and (c) each of BHNL, PAAN and BATS committing to continue to apply and use all key Bristow Group standards and policies, including without limitation our Target Zero safety program, our Code of Business Integrity and our Operations Manuals. As a result of these changes, our ability to continue to consolidate BHNL and PAAN under the current accounting requirements could change.
We conduct business in various foreign countries, and as such, our cash flows and earnings are subject to fluctuations and related risks from changes in foreign currency exchange rates. During the Current Quarter, and the Current Period, our primary foreign currency exposure was related to the British pound sterling, the euro, the Australian dollar, the Norwegian kroner and the Nigerian naira and our unconsolidated affiliates foreign currency exposure is primarily related to the Brazilian real. The Brexit event discussed aboveelsewhere in this Quarterly Report is an example of this exposure and possible impactsimpact on our results of operations.

Results of Operations
The following table presents our operating results and other statement of operations information for the applicable periods:
 
  Three Months Ended 
 June 30,		  
Favorable
(Unfavorable)
 
        
  2017 2016   
            
  
(In thousands, except per share
amounts, percentages and flight hours)
 
Gross revenue:           
Operating revenue $339,729
 $356,184
  $(16,455)  (4.6)% 
Reimbursable revenue 12,380
 13,214
  (834)  (6.3)% 
Total gross revenue 352,109
 369,398
  (17,289)  (4.7)% 
            
Operating expense:           
Direct cost 285,551
 289,543
  3,992
  1.4 % 
Reimbursable expense 12,226
 12,614
  388
  3.1 % 
Depreciation and amortization 31,056
 34,694
  3,638
  10.5 % 
General and administrative 46,707
 52,595
  5,888
  11.2 % 
Total operating expense 375,540
 389,446
  13,906
  3.6 % 
            
Loss on impairment (1,192) —
  1,192
  *
 
Gain (loss) on disposal of assets 699
 (10,017)  10,716
  107.0 % 
Earnings from unconsolidated affiliates, net of losses (665) 3,830
  (4,495)  (117.4)% 
            
Operating loss (24,589) (26,235)  1,646
  6.3 % 
            
Interest expense, net (16,021) (10,886)  (5,135)  (47.2)% 
Other income (expense), net (1,645) (6,189)  4,544
  73.4 % 
            
Loss before provision for income taxes (42,255) (43,310)  1,055
  2.4 % 
Benefit (provision) for income taxes (13,491) 2,238
  (15,729)  (702.8)% 
            
Net loss (55,746) (41,072)  (14,674)  (35.7)% 
Net loss attributable to noncontrolling interests 471
 300
  171
  57.0 % 
Net loss attributable to Bristow Group $(55,275) $(40,772)  $(14,503)  (35.6)% 
            
Diluted loss per common share $(1.57) $(1.17)  $(0.40)  (34.2)% 
Operating margin (1)
 (7.2)% (7.4)%  0.2 %  2.7 % 
Flight hours (2)
 43,723
 43,137
  586
  1.4 % 
            
Non-GAAP financial measures: (3)
           
Adjusted EBITDA $15,203
 $19,080
  $(3,877)  (20.3)% 
Adjusted EBITDA margin (1)
 4.5 % 5.4 %  (0.9)%  (16.7)% 
Adjusted net loss $(29,138) $(12,008)  $(17,130)  (142.7)% 
Adjusted diluted loss per share $(0.83) $(0.34)  $(0.49)  (144.1)% 
  Three Months Ended 
 September 30,		  
Favorable
(Unfavorable)
  2016  2015  
            
  
(In thousands, except per share
amounts, percentages and flight hours)
Gross revenue:           
Operating revenue $343,662
  $419,011
  $(75,349)  (18.0)%
Reimbursable revenue 13,805
  27,900
  (14,095)  (50.5)%
Total gross revenue 357,467
  446,911
  (89,444)  (20.0)%
            
Operating expense:           
Direct cost 281,630
  307,564
  25,934
  8.4 %
Reimbursable expense 13,276
  26,695
  13,419
  50.3 %
Depreciation and amortization 28,592
  37,387
  8,795
  23.5 %
General and administrative 51,274
  53,457
  2,183
  4.1 %
Total operating expense 374,772
  425,103
  50,331
  11.8 %
            
Loss on impairment (7,572)  (22,274)  14,702
  66.0 %
Loss on disposal of assets (2,186)  (14,007)  11,821
  84.4 %
Earnings from unconsolidated affiliates, net of losses 181
  (15,360)  15,541
  101.2 %
            
Operating loss (26,882)  (29,833)  2,951
  9.9 %
            
Interest expense, net (11,468)  (7,179)  (4,289)  (59.7)%
Other income (expense), net 3,003
  (11,424)  14,427
  126.3 %
            
Loss before benefit for income taxes (35,347)  (48,436)  13,089
  27.0 %
Benefit for income taxes 5,240
  2,756
  2,484
  90.1 %
           

Net loss (30,107)  (45,680)  15,573
  34.1 %
Net (income) loss attributable to noncontrolling interests 310
  (1,452)  1,762
  121.3 %
Net loss attributable to Bristow Group (29,797)  (47,132)  17,335
  36.8 %
Accretion of redeemable noncontrolling interests —
  4,803
  (4,803)  *
Net loss attributable to common stockholders $(29,797)  $(42,329)  $12,532
  29.6 %
            
Diluted loss per common share $(0.85)  $(1.21)  $0.36
  29.8 %
Operating margin (1)
 (7.8)%  (7.1)%  (0.7)%  (9.9)%
Flight hours (2)
 42,604
  50,824
  (8,220)  (16.2)%
            
Non-GAAP financial measures: (3)
           
Adjusted EBITDAR $77,354
  $92,764
  $(15,410)  (16.6)%
Adjusted EBITDAR margin (1)
 22.5 %  22.1 %  0.4 %  1.8 %
Adjusted net income (loss) $(12,314)  $1,271
  $(13,585)  *
Adjusted diluted earnings (loss) per share $(0.35)  $0.04
  $(0.39)  *

            
  Six Months Ended 
 September 30,		  
Favorable
(Unfavorable)
  
  2016  2015  
            
  
(In thousands, except per share
amounts, percentages and flight hours)
Gross revenue:           
Operating revenue $699,846
  $859,122
  $(159,276)  (18.5)%
Reimbursable revenue 27,019
  54,785
  (27,766)  (50.7)%
Total gross revenue 726,865
  913,907
  (187,042)  (20.5)%
            
Operating expense:           
Direct cost 571,173
  638,243
  67,070
  10.5 %
Reimbursable expense 25,890
  52,862
  26,972
  51.0 %
Depreciation and amortization 63,286
  74,533
  11,247
  15.1 %
General and administrative 103,869
  114,789
  10,920
  9.5 %
Total operating expense 764,218
  880,427
  116,209
  13.2 %
            
Loss on impairment (7,572)  (27,713)  20,141
  72.7 %
Loss on disposal of assets (12,203)  (21,702)  9,499
  43.8 %
Earnings from unconsolidated affiliates, net of losses 4,011
  (9,064)  13,075
  144.3 %
            
Operating loss (53,117)  (24,999)  (28,118)  (112.5)%
            
Interest expense, net (22,354)  (14,848)  (7,506)  (50.6)%
Other income (expense), net (3,186)  (7,585)  4,399
  58.0 %
            
Loss before benefit for income taxes (78,657)  (47,432)  (31,225)  (65.8)%
Benefit for income taxes 7,478
  123
  7,355
  *
            
Net loss (71,179)  (47,309)  (23,870)  (50.5)%
Net (income) loss attributable to noncontrolling interests 610
  (3,080)  3,690
  119.8 %
Net loss attributable to Bristow Group (70,569)  (50,389)  (20,180)  (40.0)%
Accretion of redeemable noncontrolling interests —
  (1,498)  1,498
  *
Net loss attributable to common stockholders $(70,569)  $(51,887)  $(18,682)  (36.0)%
            
Diluted loss per common share $(2.02)  $(1.49)  $(0.53)  (35.6)%
Operating margin (1)
 (7.6)%  (2.9)%  (4.7)%  (162.1)%
Flight hours (2)
 85,741
  103,618
  (17,877)  (17.3)%
            
Non-GAAP financial measures: (3)
           
Adjusted EBITDAR $147,717
  $213,811
  $(66,094)  (30.9)%
Adjusted EBITDAR margin (1)
 21.1 %  24.9 %  (3.8)%  (15.3)%
Adjusted net income (loss) $(24,322)  $19,876
  $(44,198)  (222.4)%
Adjusted diluted earnings (loss) per share $(0.69)  $0.56
  $(1.25)  (223.2)%
_________________________ 
 * percentage change too large to be meaningful or not applicable

(1) 
Operating margin is calculated as operating income divided by operating revenue. Adjusted EBITDAREBITDA margin is calculated as adjusted EBITDAREBITDA divided by operating revenue.
(2) 
Excludes flight hours from Bristow Academy and unconsolidated affiliates. Includes flight hours from Eastern Airways and Airnorth fixed wing operations in the U.K., Nigeria and Australia totaling 10,430 and 10,842 for the three months ended SeptemberJune 30, 2017 and 2016 totaling 10,379 and 2015, respectively, and 20,764 and 21,647 for the six months ended September 30, 2016 and 2015,10,334, respectively.

(3) 
These financial measures have not been prepared in accordance with generally accepted accounting principles (“GAAP”) and have not been audited or reviewed by our independent registered public accounting firm. These financial measures are therefore considered non-GAAP financial measures. Adjusted EBITDAREBITDA is calculated by taking our net income and adjusting for interest expense, depreciation and amortization, rent expense (included as a component of direct cost and general and administrative expense), provisionbenefit (provision) for income taxes, gain (loss) on disposal of assets and any special items during the reported periods. See further discussion of our use of the adjusted EBITDAREBITDA metric below. Adjusted net income (loss) and adjusted diluted earnings (loss) per share are each adjusted for gain (loss) on disposal of assets and any special items during the reported periods. As discussed below, management believes these non-GAAP financial measures provide meaningful supplemental information regarding our results of operations. A description of the adjustments to and reconciliations of these non-GAAP financial measures to the most comparable GAAP financial measures is as follows:
  Three Months Ended 
 September 30,		 Six Months Ended 
 September 30,
  2016 2015 2016 2015
         
  (In thousands, except percentages and per share amounts)
Net loss $(30,107) $(45,680) $(71,179) $(47,309)
Loss on disposal of assets 2,186
 14,007
 12,203
 21,702
Special items (i)
 18,265
 27,974
 24,824
 41,404
Depreciation and amortization 28,592
 37,387
 63,286
 74,533
Rent expense 51,955
 54,436
 103,238
 108,318
Interest expense 11,703
 7,396
 22,823
 15,286
Benefit for income taxes (5,240) (2,756) (7,478) (123)
Adjusted EBITDAR $77,354
 $92,764
 $147,717
 $213,811
         
Benefit for income taxes $5,240
 $2,756
 $7,478
 $123
Tax benefit on loss on disposal of asset (699) (3,221) (3,905) (4,991)
Tax expense (benefit) on special items (3,554) (893) 4,972
 (7,100)
Adjusted benefit (provision) for income taxes $987
 $(1,358) $8,545
 $(11,968)
         
Effective tax rate (iv)
 14.8% 5.7% 9.5% 0.3%
Adjusted effective tax rate (iv)
 7.3% 33.3% 25.5% 34.3%
         
Net loss attributable to Bristow Group $(29,797) $(47,132) $(70,569) $(50,389)
Loss on disposal of assets (ii)
 1,487
 10,786
 8,298
 16,711
Special items (i) (ii)
 15,996
 37,617
 37,949
 53,554
Adjusted net income (loss) $(12,314) $1,271
 $(24,322) $19,876
         
Diluted loss per share $(0.85) $(1.21) $(2.02) $(1.49)
Loss on disposal of assets (ii)
 0.04
 0.31
 0.24
 0.47
Special items (i) (ii)
 0.46
 0.93
 1.08
 1.56
Adjusted diluted earnings (loss) per share (iii)
 (0.35) 0.04
 (0.69) 0.56
  Three Months Ended 
 June 30,
  2017 2016
     
  (In thousands, except percentages and per share amounts)
Net loss $(55,746) $(41,072)
(Gain) loss on disposal of assets (699) 10,017
Special items (i)
 10,866
 6,559
Depreciation and amortization 31,056
 34,694
Interest expense 16,235
 11,120
Provision (benefit) for income taxes 13,491
 (2,238)
Adjusted EBITDA $15,203
 $19,080
     
(Provision) benefit for income taxes $(13,491) $2,238
Tax expense (benefit) on gain (loss) on disposal of asset 4,573
 (3,206)
Tax provision on special items 11,397
 8,526
Adjusted benefit for income taxes $2,479
 $7,558
     
Effective tax rate (ii)
 (31.9)% 5.2%
Adjusted effective tax rate (ii)
 7.7 % 38.0%
     
Net loss attributable to Bristow Group $(55,275) $(40,772)
Loss on disposal of assets (iii)
 3,874
 6,811
Special items (i) (iii)
 22,263
 21,953
Adjusted net loss $(29,138) $(12,008)
     
Diluted loss per share $(1.57) $(1.17)
Loss on disposal of assets (iii)
 0.11
 0.19
Special items (i) (iii)
 0.63
 0.63
Adjusted diluted loss per share (iv)
 (0.83) (0.34)
_________________________ 
(i) 
See information about special items during the Current Quarter and Comparable Quarter under “— Current Quarter Compared to Comparable Quarter” and Current Period and Comparable Period under “— Current Period Compared to Comparable Period” below.
(ii)
Effective tax rate is calculated by dividing benefit (provision) for income tax by pretax net income (loss). Adjusted effective tax rate is calculated by dividing adjusted benefit (provision) for income tax by adjusted pretax net income (loss). Tax expense (benefit) on loss on disposal of asset and tax expense (benefit) on special items is calculated using the statutory rate of the entity recording the loss on disposal of asset or special item.
(iii) 
These amounts are presented after applying the appropriate tax effect to each item and dividing by the weighted average shares outstanding during the related period to calculate the earnings per share impact.
(iii)(iv) 
Adjusted diluted earnings per share is calculated using the diluted weighted average number of common shares outstanding of 35,198,04335,227,434 and 35,278,144 for34,990,136 during the ComparableCurrent Quarter and Comparable Period,Quarter, respectively.
(iv)
Effective tax rate is calculated by dividing income tax expense by pretax net income. Adjusted effective tax rate is calculated by dividing adjusted income tax expense by adjusted pretax net income. Tax expense (benefit) on loss on disposal of asset and tax expense (benefit) on special items is calculated using the statutory rate of the entity recording the loss on disposal of asset or special item.
Management believes that adjusted EBITDAR,EBITDA, adjusted benefit (provision) for income taxes, adjusted net income (loss) and adjusted diluted earnings (loss) per share (collectively, the “Non-GAAP measures”) provide relevant and useful information, which is widely used by analysts, investors and competitors in our industry as well as by our management in assessing both consolidated and regional performance.

Adjusted EBITDAREBITDA provides us with an understanding of one aspect of earnings before the impact of investing and financing transactions and income taxes. Additionally,Adjusted EBITDA should not be considered a measure of discretionary cash available to us for investing in the growth of our business. In prior periods we believepresented adjusted EBITDAR, which was calculated by taking our net income and adjusting for interest expense, depreciation and amortization, rent expense (included as a component of direct cost and general and administrative expense), provision for income taxes, gain (loss) on disposal of assets and any special items during the reported periods. We believed that adjusted EBITDAR providesprovided us with a useful supplemental measure of our operational performance by excluding the financing decisions we make regarding aircraft purchases or leasing.  AdjustedHowever, we have revised our disclosures to present adjusted EBITDA rather than adjusted EBITDAR should not be considered a measure of discretionary cash available to us for investing inconsistent with recent interpretations regarding Non-GAAP measures issued by the growth of our business.Securities and Exchange Commission.
Adjusted net income (loss) and adjusted diluted earnings (loss) per share present our consolidated results excluding asset dispositions and special items that do not reflect the ordinary earnings of our operations. Adjusted benefit (provision) for income taxes excludes the tax impact of these items. We believe that these measures are useful supplemental measures because net income and diluted earnings per share include asset disposition effects and special items and benefit (provision) for income taxes include the tax impact of these items, and inclusion of these items does not reflect the ongoing operational earnings of our business.
The Non-GAAP measures are not calculated or presented in accordance with GAAP and other companies in our industry may calculate these measures differently than we do. As a result, these financial measures have limitations as analytical and comparative tools and you should not consider these measures in isolation, or as a substitute for analysis of our results as reported under GAAP. In calculating these financial measures, we make certain adjustments that are based on assumptions and estimates that may prove to be inaccurate. In addition, in evaluating these financial measures, you should be aware that in the future we may incur expenses similar to those eliminated in this presentation. Our presentation of the Non-GAAP measures should not be construed as an inference that our future results will be unaffected by unusual or special items.
Some of the additional limitations of adjusted EBITDAREBITDA are:
Adjusted EBITDAREBITDA does not reflect our current or future cash requirements for capital expenditures;
Adjusted EBITDAREBITDA does not reflect changes in, or cash requirements for, our working capital needs;
Adjusted EBITDAREBITDA does not reflect the significant interest expense or the cash requirements necessary to service interest or principal payments on our debts;
Adjusted EBITDAR does not reflect the significant rent expense or the cash requirements necessary to make lease payments on our operating leases; and
Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and adjusted EBITDAREBITDA does not reflect any cash requirements for such replacements.
The following tables present region adjusted EBITDAREBITDA and adjusted EBITDAREBITDA margin discussed in “— Region Operating Results,” and consolidated adjusted EBITDAREBITDA and adjusted EBITDAREBITDA margin for the three and six months ended SeptemberJune 30, 20162017 and 2016:
  Three Months Ended 
 June 30,
  2017 2016
     
  (In thousands, except percentages)
Europe Caspian $16,152
 $17,599
Africa 13,383
 6,772
Americas 6,176
 14,036
Asia Pacific (5,720) (3,123)
Corporate and other (14,788) (16,204)
Consolidated adjusted EBITDA $15,203
 $19,080
     
Europe Caspian 8.8 % 9.3 %
Africa 26.8 % 12.7 %
Americas 10.7 % 23.9 %
Asia Pacific (11.6)% (5.7)%
Consolidated adjusted EBITDA margin 4.5 % 5.4 %

The following tables present region depreciation and amortization and rent expense for the three months ended June 30, 2017 and 2015:2016:
 Three Months Ended 
 September 30,		 Six Months Ended 
 September 30,		 Three Months Ended 
 June 30,
 2016 2015 2016 2015 2017 2016
            
 (In thousands, except percentages) (In thousands)
Depreciation and amortization:    
Europe Caspian $50,155
 $67,373
 $100,042
 $132,559
 $11,822
 $11,189
Africa 17,632
 19,901
 26,672
 42,715
 3,076
 5,453
Americas 15,300
 7,295
 34,898
 40,737
 6,999
 11,381
Asia Pacific 6,909
 16,323
 13,070
 33,395
 5,810
 4,236
Corporate and other (12,642) (18,128) (26,965) (35,595) 3,349
 2,435
Consolidated adjusted EBITDAR $77,354
 $92,764
 $147,717
 $213,811
Total depreciation and amortization $31,056
 $34,694
            
Rent expense:    
Europe Caspian 27.0% 32.5% 26.7% 32.3% $36,453
 $32,288
Africa 35.0% 31.3% 25.8% 30.3% 2,200
 2,268
Americas 26.9% 10.0% 30.2% 26.6% 6,994
 5,562
Asia Pacific 13.6% 22.7% 12.3% 22.8% 10,954
 9,284
Consolidated adjusted EBITDAR margin 22.5% 22.1% 21.1% 24.9%
Corporate and other 2,074
 1,881
Total rent expense $58,675
 $51,283
Current Quarter Compared to Comparable Quarter
AsOperating revenue from external clients by line of service was as follows:
 Three Months Ended 
 June 30,		 
Favorable
(Unfavorable)
 2017 2016 
        
 (In thousands, except percentages)
Oil and gas services$234,775
 $253,087
 $(18,312) (7.2)%
Fixed wing services50,677
 50,617
 60
 0.1 %
U.K. SAR services52,587
 49,549
 3,038
 6.1 %
Corporate and other1,690
 2,931
 (1,241) (42.3)%
Total operating revenue$339,729
 $356,184
 $(16,455) (4.6)%
The decrease in revenue in the Current Quarter was driven by an unfavorable impact from changes in foreign currency exchange rates compared to the Comparable Quarter of $18.8 million mostly related to the depreciation in the British pound sterling resulting from Brexit as discussed under “— Executive Overview — Market“Recent Events” above. Additionally, as discussed under “Market Outlook” above, the oil and gas industry has experienced a significant downturn duringbeginning in fiscal yearsyear 2015 and 2016 primarily due to a decline in crude oil prices, which negatively impacted activity with our oil and gas clients. While this decline started in fiscal year 2015, activity and pricing declined further in fiscal yearyears 2016 and 2017 and has continued intoin fiscal year 2017,2018, resulting in a significant decrease in gross revenue for our oil and gas services year-over-year. ThisThe decline in oil and gas services revenue was partially offset by the benefit of our diversification efforts with the start-up of theincrease in U.K. SAR contract in April 2015 with sevenservices revenue due to additional bases coming online throughoutin fiscal year 2016.years 2017 and 2018.
Operating revenue from external clients by line of service is as follows:
 Three Months Ended 
 September 30,		 
Favorable
(Unfavorable)
 2016 2015 
        
 (In thousands, except percentages)
Oil and gas services$238,233
 $320,119
 $(81,886) (25.6)%
Fixed wing services51,972
 54,365
 (2,393) (4.4)%
U.K. SAR services50,850
 39,030
 11,820
 30.3 %
Corporate and other2,607
 5,497
 (2,890) (52.6)%
Total operating revenue$343,662
 $419,011
 $(75,349) (18.0)%
In addition to operational decreases, changes in foreign currency exchange rates duringFor the Current Quarter, contributed $24.7 million of the decrease in gross revenue year-over-year.
Wewe reported a net loss of $29.8$55.3 million and $47.1 million anda diluted loss per share of $0.85$1.57 compared to a net loss of $40.8 million and $1.21a diluted loss per share of $1.17 for the Current and Comparable Quarters, respectively.Quarter. The year-over-year decreasechange in net loss and diluted loss per share iswas primarily driven by goodwill impairment charges recorded in the Comparable Quarter (included in loss on impairment), less of an unfavorable impact from changes in foreign currency exchange rates, lower losses from disposal of assets and lower depreciation and amortization expense, partially offset by the decline in oil and gas revenue discussed above, higher income tax, rent and interest expense, lower earnings from unconsolidated affiliates and an inventory impairmentsimpairment charge recorded in the Current Quarter (included in loss on impairment).
Diluted loss per shareQuarter. These unfavorable changes were partially offset by higher impairment of asset charges recorded in the Comparable Quarter, benefiteda decrease in general and administrative expense and direct costs primarily from adjustmentslower salaries and benefits in the accretion amountCurrent Quarter and lower depreciation and amortization expense due to accelerated depreciation recorded in the Comparable Quarter. The year-over-year impact of redeemable noncontrolling interestschanges in Eastern Airwaysforeign currency exchange rates on revenue in the Current Quarter was offset by a positive impact on operating expenses and Airnorth.lower transaction losses compared to the Comparable Quarter.

The net loss for the Current Quarter was significantly impacted by the following items:
Organizational restructuring costs of $9.7 million ($6.6 million net of tax) included in general and administrative expense, which includes severance expense of $8.7 million related to separation programs across our global organization designed to increase efficiency and reduce costs and other restructuring costs of $1.0 million,
Impairment of inventories of $1.2 million ($0.8 million net of tax) included in loss on impairment, and
Tax items of $14.9 million that include non-cash adjustments related to the ongoing impact of valuation of deferred tax assets of $13.9 million and a one-time non-cash tax effect from repositioning of certain aircraft from one tax jurisdiction to another related to recent financing transactions resulting in additional income tax expense of $1.0 million.
Excluding these items, adjusted net loss and adjusted diluted loss per share were $29.1 million and $0.83, respectively, for the Current Quarter. These adjusted results compare to adjusted net loss and adjusted diluted loss per share of $12.0 million and $0.34, respectively, for the Comparable Quarter.
The year-over-year increase in adjusted net loss and diluted earnings per share and decrease in adjusted EBITDA was primarily driven by the decline in oil and gas revenue, higher adjusted income tax expense, higher rent expense and lower earnings from unconsolidated affiliates.
The table below presents the year-over-year impact of changes in foreign currency exchange rates.
Three Months Ended 
 September 30,		 Favorable (Unfavorable)Three Months Ended 
 June 30,		 Favorable (Unfavorable)
2016 2015 2017 2016 
          
(in thousands, except per share amounts)(in thousands, except per share amounts)
Transaction gains (losses)$2,856
 $(11,430) $14,286
Transaction losses$(1,678) $(6,257) $4,579
Líder foreign exchange impact(1,256) (19,896) 18,640
(1,138) (48) (1,090)
Total$1,600
 $(31,326) 32,926
$(2,816) $(6,305) 3,489
     
Revenue impact    (18,804)
Operating expense impact    13,710
Year-over-year income statement translation    (2,985)    (5,094)
Total pre-tax income statement impact    29,941
Less: Foreign exchange impact on depreciation and amortization, rent and interest expense    1,113
Adjusted EBITDAR impact    $28,828
     
Pre-tax income statement impact    (1,605)
Less: Foreign exchange impact on depreciation and amortization and interest expense    (320)
Adjusted EBITDA impact    $(1,925)
          
Net income impact (tax affected)    $21,076
    $(403)
Earnings per share impact    $0.60
    $(0.01)
The most significant impacts were from a more significant loss in the Comparable Quarter from the revaluation of balance sheet assets and liabilities into the functional currencies of legal entities through which we operate globally presented as transaction gains (losses), and a largerforeign exchange impact in the Comparable Quarter on our earnings from unconsolidated affiliates as resultswas related to Líder were impacted by a 23.3% devaluation of the Brazilian real versus the U.S. dollar in the Comparable Quarter. This favorable year-over-year change was partially offset by a $3.0$5.1 million unfavorable income statement translation impact from changes in foreign currency exchange rates compared toin the ComparableCurrent Quarter driven by the impact of the depreciating British pound sterling resulting from Brexit on the translation of our results in our Europe Caspian region, partially offset by a favorable impact of the devalued naira in our Africa region. Compared to the pre-Brexit exchange rates, the depreciation of the pound sterling versus the U.S. dollar resulted in a $6.7 million pre-tax decrease in earnings during the Current Quarter. Similarly, compared to pre-naira

devaluation exchange rates from late June 2016, the devaluation of the naira versus the U.S. dollar resulted in a $6.4 million pre-tax increase in earnings during the Current Quarter. During the Current Quarter, we benefited from the devaluation of the naira as a majority of our revenue in our Africa region is contracted at fixed U.S. dollar values, despite being billed in a mix of U.S. dollar and naira, while the expenses incurred in this region are more evenly split between U.S. dollars and naira, resulting in a significant net expense exposure to the naira that translates into higher U.S. dollar earnings for reporting purposes. This is contrary to our position in our Europe Caspian region, where a majority of our revenue is contracted in British pound sterling with our expense being more evenly split between U.S. dollars and pound sterling, resulting in a significant net revenue exposure to the pound sterling that translates into lower U.S. dollar earnings for reporting purposes.
The net lossAdditionally, results for the Current Quarter was significantlywere impacted by the following items:
Organizational restructuring costs of $10.7a $1.1 million ($7.3unfavorable foreign currency exchange rate impact from our investment in Líder in Brazil. Partially offsetting these unfavorable impacts was $4.6 million net of tax), which includes severance expense of $9.6 million related to separation programs across our global organization designed to increase efficiency and reduce costs and other restructuring costs of $1.1 million; $5.0 million of the restructuring costs are included in direct costs and $5.7 million are included in general and administrative expense and
Loss on disposal of assets of $2.2 million ($1.5 million net of tax), accelerated depreciation of $1.3 million ($0.9 million net of tax) and impairment of inventory of $7.6 million ($5.3 million net of tax), and
A non-cash adjustment related to the valuation of deferred tax assets of $2.5 million.
Excluding these items, adjusted net loss and adjusted diluted loss per share were $12.3 million and $0.35, respectively, for the Current Quarter. These adjusted results compare to adjusted net income and adjusted diluted earnings per share of $1.3 million and $0.04, respectively, for the Comparable Quarter. The year-over-year decrease is primarily due to the decline in oil and gas revenue discussed above, partially offset by less of an unfavorable impact from changes in foreign currency exchange ratestransaction losses in the Current Quarter discussed above.compared to the Comparable Quarter.
In response to the ongoing industry downturn, we have implemented cost reduction measures as part of an organizational restructuring, which partially offset the impact of the decline in revenue and certain higher costs within general and administrative expense.revenue. See the further discussion of changes in direct costs and general and administrative expense below.
Direct costs decreased 8.4%1.4%, or $25.9$4.0 million, year-over-year primarily due to the benefit of organizational restructuring efforts reflected in a $13.9$10.6 million decrease in salaries and benefits due to lower headcount across all regions and a $6.3$3.5 million decrease in inventory consignment fees, a $2.4 million

decrease in freight costs, partially offset by a $2.3$6.6 million decreaseincrease in rentmaintenance expense and a $1.8$7.3 million decreaseincrease in insurance expense.lease costs.
Reimbursable expense decreased 50.3%3.1%, or $13.4$0.4 million, primarily due to a decline in activity.
Depreciation and amortization expense decreased 23.5%10.5%, or $8.8$3.6 million, to $28.6$31.1 million for the Current Quarter from $37.4$34.7 million for the Comparable Quarter. The decrease in depreciation and amortization expense is primarily due to a decrease in accelerated depreciation of $9.2$6.9 million recorded in the Comparable Quarter as a result of fleet changes for older aircraft, partially offset by additional new aircraft and information technology costs being capitalized and depreciated in the prior year.Current Quarter.
General and administrative expense decreased 4.1%11.2%, or $2.2$5.9 million in the Current Quarter, as compared to the Comparable Quarter primarily due to a decrease in compensation expense of $5.2$5.4 million resulting from primarily due to lower bonus awards in June 2017 than accrued as of March 31, 2017, a decrease in professional fees of $0.9 million and a decrease of $3.2 million related to information technology costs, relocation and recruiting costs, training travel, recruitment and charity contributionsseminars and various other expenses from cost reduction efforts and aefforts. The decrease in professional fees of $2.4 million driven by a decline in projects. These decreases werecompensation was partially offset by an increase in compensation expense of $5.4$3.6 million driven by an increase in short-term bonuses due to reversal of accrual in the Comparable Quarter, performance cash plan expense due to an increase in stock price performance in the Current Quarter and an increase in severance expense associated with the organizational restructuring efforts partially offset by reduced headcount due to organizational restructuring efforts.
Loss on impairment for the Current Quarter includes $7.6a $1.2 million ofimpairment charge on inventory impairments and for the Comparable Quarter included $22.3 million of goodwill impairment related toused on our Bristow Norway reporting unit within our Europe Caspian region ($12.1 million) and Bristow Academy reporting unit within our Corporate and other region ($10.2 million).training fleet.
LossGain (loss) on disposal of assets decreased $11.8improved $10.7 million, to a lossgain of $2.2$0.7 million for the Current Quarter from a loss of $14.0$10.0 million for the Comparable Quarter. The lossgain on disposal of assets in the Current Quarter included impairment charges totaling $1.0 million related to six held for sale aircraft and other equipment and a lossgain of $1.2$2.3 million from the sale or disposal of 6 aircraft and other equipment partially offset by impairment charges totaling $1.6 million related to 2 held for sale aircraft and other equipment. During the Comparable Quarter, the loss on disposal of assets included a loss of $1.8impairment charges totaling $10.1 million from therelated to 11 held for sale of four aircraft and other equipment and impairment charges totaling $12.2partially offset by a gain of $0.1 million related to 10 held for sale aircraft.six aircraft and other equipment.
Earnings from unconsolidated affiliates, net of losses, increased $15.5decreased $4.5 million to earningsa loss of $0.2$0.7 million for the Current Quarter from a lossearnings of $15.4$3.8 million in the Comparable Quarter. The increasedecrease in earnings from unconsolidated affiliates, net of

losses, primarily resulted from an increasea decrease in earnings from our investment in Líder in Brazil to $0.9 million of earnings in the Current Quarter from $15.2$4.5 million in lossesearnings in the Comparable Quarter primarily due to $18.6 million less of an unfavorable impact of foreign currency exchange rates partially offset by a decrease in activity. Our earnings from Líder in the Current and Comparable QuartersQuarter were also decreased by the unfavorable impact of foreign currency exchange rate changes of $1.3 million and $19.9 million, respectively.$1.1 million.
Interest expense, net, increased 59.7%47.2%, or $4.3$5.1 million, year-over-year primarily due to an increase in interest expense resulting from an increase in borrowings and a decrease in the Current Quarter.capitalized interest resulting from lower construction in progress.
For further details on income tax expense, see “— Region Operating Results — Current Quarter Compared to Comparable Quarter — Taxes”Taxes” included elsewhere in this Quarterly Report.

As discussed above, our results for the Current Quarter were impacted by a number of special items. During the Comparable Quarter, special items that impacted our results included organizational restructuring costs, additionalaccelerated depreciation expense related to fleet changes, goodwill impairment and accretion of nonredeemable noncontrolling interests.tax valuation allowances. The items noted in the Current Quarter and Comparable Quarter have been identified as special items as they are not considered by management to be part of our ongoing operations when assessing and measuring the operational and financial performance of the organization. The impact of these items on our adjusted EBITDAR,EBITDA, adjusted net income and adjusted diluted earnings per share is as follows:
 Three Months Ended 
 September 30, 2016
 
Adjusted
EBITDAR
 
Adjusted
Net Income
 
Adjusted
Diluted
Earnings
Per Share
      
 (In thousands, except per share amounts)
Organizational restructuring costs$10,693
 $7,296
 $0.21
Additional depreciation expense resulting from fleet changes—
 871
 0.02
Impairment of inventories7,572
 5,344
 0.15
Tax valuation allowance—
 2,485
 0.07
Total special items$18,265
 $15,996
 0.46
      
 Three Months Ended 
 September 30, 2015
 
Adjusted
EBITDAR
 
Adjusted
Net��Income
 
Adjusted
Diluted
Earnings
Per Share
      
 (In thousands, except per share amounts)
Organizational restructuring costs$5,700
 $4,167
 $0.12
Additional depreciation expense resulting from fleet changes—
 7,885
 0.22
Goodwill impairment22,274
 25,565
 0.73
Accretion of redeemable noncontrolling interests—
 —
 (0.14)
Total special items$27,974
 $37,617
 0.93

Current Period Compared to Comparable Period
Gross revenue decreased 20.5%, or $187.0 million, year-over-year primarily due to the downturn in the oil and gas industry partially offset by the start of the U.K. SAR contract previously discussed.
Operating revenue from external clients by line of service is as follows:
 Six Months Ended 
 September 30,		 
Favorable
(Unfavorable)
 2016 2015 
        
 (In thousands, except percentages)
Oil and gas services$490,609
 $668,227
 $(177,618) (26.6)%
Fixed wing services103,300
 109,826
 (6,526) (5.9)%
U.K. SAR services100,399
 67,583
 32,816
 48.6 %
Corporate and other5,538
 13,486
 (7,948) (58.9)%
Total operating revenue$699,846
 $859,122
 $(159,276) (18.5)%

In addition to operational decreases, changes in foreign currency exchange rates during the Current Period contributed $38.0 million of the decrease year-over-year.
We reported a net loss of $70.6 million and $50.4 million and a diluted loss per share of $2.02 and $1.49 for the Current and Comparable Periods, respectively. The year-over-year increase in net loss and diluted loss per share is primarily driven by the decline in oil and gas revenue discussed above and higher inventory impairment recorded in the Current Period (included in loss on impairment), partially offset by goodwill impairment recorded in the Comparable Period (included in loss on impairment), less of an unfavorable impact from changes in foreign currency exchange rates, lower losses from disposal of assets and lower depreciation and amortization expense.
The table below presents the year-over-year impact of changes in foreign currency exchange rates.
 Six Months Ended 
 September 30,		 Favorable (Unfavorable)
 2016 2015 
      
 (in thousands, except per share amounts)
Transaction losses$(3,401) $(7,570) $4,169
Líder foreign exchange impact(1,304) (18,156) 16,852
Total(4,705) (25,726) 21,021
Year-over-year income statement translation    (1,561)
Total pre-tax income statement impact    19,460
Less: Foreign exchange impact on depreciation and amortization, rent and interest expense    1,838
Adjusted EBITDAR impact    $17,622
      
Net income impact (tax affected)    $13,433
Earnings per share impact    $0.38
The most significant impacts were from a more significant loss in the Comparable Period from the revaluation of balance sheet assets and liabilities into the functional currencies of legal entities through which we operate globally presented as transaction gains (losses), and a larger impact in the Comparable Period on our earnings from unconsolidated affiliates as results related to Líder were impacted by a 20.7% devaluation of the Brazilian real versus the U.S. dollar in the Comparable Period. This favorable year-over-year change was partially offset by an unfavorable income statement translation impact from changes in foreign currency exchange rates driven by the impact of the depreciating British pound sterling resulting from Brexit on the translation of our results in our Europe Caspian region, partially offset by a favorable impact of the devalued naira in our Africa region.
The net loss for the Current Period was significantly impacted by the following items:
Organizational restructuring costs of $17.3 million ($11.6 million net of tax), which includes severance expense of $15.0 million related to separation programs across our global organization designed to increase efficiency and reduce costs and other restructuring costs of $2.3 million; $6.3 million of the restructuring costs are included in direct costs and $11.0 million are included in general and administrative expense,
Loss on disposal of assets of $12.2 million ($8.3 million net of tax), accelerated depreciation of $8.2 million ($5.4 million net of tax) and impairment of inventory of $7.6 million ($5.3 million net of tax), and
A non-cash adjustment related to the valuation of deferred tax assets of $15.7 million.
Excluding these items, adjusted net loss and adjusted diluted loss per share were $24.3 million and $0.69, respectively, for the Current Period. These adjusted results compare to adjusted net income and adjusted diluted earnings per share of $19.9 million and $0.56, respectively, for the Comparable Period. The year-over-year decrease in adjusted net income (loss) and adjusted diluted earnings (loss) per share is primarily due to the decline in oil and gas revenue discussed above, partially offset by less of an unfavorable impact from changes in foreign currency exchange rates in the Current Period discussed above.
Direct costs decreased 10.5%, or $67.1 million, year-over-year primarily due to the benefit of organizational restructuring efforts reflected in a $33.9 million decrease in salaries and benefits due to lower headcount across all regions, a $8.1 million decrease in inventory consignment fees, a decrease of $6.3 million in fuel costs, a $4.6 million decrease in rent expense, a $4.3 million decrease in training and travel and meals expense, a $4.2 million decrease in maintenance expense and a $3.2 million decrease in insurance expense. Additionally, we had a decrease in bad debt expense of $3.5 million primarily related to bad debt expense recorded in the Comparable Period related to two clients in our Africa region.

Reimbursable expense declined 51.0%, or $27.0 million, primarily due to a decline in activity and a contract amendment in our Europe Caspian region.
Depreciation and amortization decreased 15.1%, or $11.2 million, to $63.3 million for the Current Period from $74.5 million for the Comparable Period. The decrease in depreciation and amortization expense is primarily due to a decrease in accelerated depreciation of $11.1 million as a result of fleet changes for older aircraft in the prior year.
General and administrative expense decreased 9.5%, or $10.9 million, primarily due to a decrease in professional fees of $5.3 million driven by decline in projects and a decrease of $8.2 million primarily related to training, travel, recruitment and charity contributions and various other expenses from cost reduction efforts, partially offset by an increase in compensation expense of $2.6 million. The increase in compensation expense is due to having no bonus accrual in the Comparable Period, an increase in performance cash plan expense as a result of an increase in stock price performance and an increase in severance expense associated with the organizational restructuring efforts, partially offset by a reduction in salaries and benefits as a result of a reduced headcount from organizational restructuring efforts.
Loss on impairment for the Current Period includes $7.6 million of inventory impairments and for the Comparable Period included $22.3 million of goodwill impairment related to our Bristow Norway reporting unit within our Europe Caspian region ($12.1 million) and Bristow Academy reporting unit within our Corporate and other region ($10.2 million) and $5.4 million of inventory impairments.
Loss on disposal of assets decreased $9.5 million to a loss of $12.2 million for the Current Period from a loss of $21.7 million for the Comparable Period. The loss on disposal of assets in the Current Period included impairment charges totaling $11.2 million related to 13 held for sale aircraft and a loss of $1.0 million from the sale of six aircraft and other equipment. During the Comparable Period, the loss on disposal of assets included impairment charges totaling $22.0 million related to 11 held for sale aircraft partially offset by a gain of $0.3 million from the sale of 13 aircraft and other equipment.
Earnings from unconsolidated affiliates, net of losses, increased $13.1 million to earnings of $4.0 million for the Current Period from losses of $9.1 million in the Comparable Period. The increase in earnings from unconsolidated affiliates, net of losses, primarily resulted from an increase in earnings from our investment in Líder in Brazil to $5.5 million of earnings in the Current Period from $8.7 million in losses in the Comparable Period primarily due to $16.9 million less of an unfavorable impact of foreign currency exchange rates partially offset by a decrease in activity. Our earnings from Líder in the Current and Comparable Periods were decreased by the unfavorable impact of foreign currency exchange rate changes of $1.3 million and $18.2 million, respectively.
Interest expense, net, increased 50.6%, or $7.5 million, year-over-year primarily due to an increase in interest resulting from an increase in borrowings.
For further details on income tax expense, see “— Region Operating Results — Current Period Compared to Comparable Period — Taxes” included elsewhere in this Quarterly Report.

As discussed above, our results for the Current Period were impacted by a number of special items. During the Comparable Period, special items that impacted our results included organizational restructuring costs, additional depreciation expense related to fleet changes, impairment of inventories, goodwill impairment and accretion of nonredeemable noncontrolling interests. The items noted in the Current Period and Comparable Period have been identified as special items as they are not considered by management to be part of our ongoing operations when assessing and measuring the operational and financial performance of the organization. The impact of these items on our adjusted EBITDAR, adjusted net income and adjusted diluted earnings per share is as follows:
Six Months Ended 
 September 30, 2016		 Three Months Ended 
 June 30, 2017
Adjusted
EBITDAR
 
Adjusted
Net Income
 
Adjusted
Diluted
Earnings
Per Share
 Adjusted
EBITDA		 
Adjusted
Net Loss
 
Adjusted
Diluted
Loss
Per Share
           
(In thousands, except per share amounts) (In thousands, except per share amounts)
Organizational restructuring costs$17,252
 $11,588
 $0.33
 $(9,674) $(6,602) $(0.19)
Additional depreciation expense resulting from fleet changes—
 5,361
 0.15
Impairment of inventories7,572
 5,344
 0.15
Tax valuation allowance—
 15,656
 0.45
Tax items —
 (14,886) (0.42)
Inventory impairment (1,192) (775) (0.02)
Total special items$24,824
 $37,949
 1.08
 $(10,866) $(22,263) (0.63)
           
Six Months Ended 
 September 30, 2015		 Three Months Ended 
 June 30, 2016
Adjusted
EBITDAR
 
Adjusted
Net Income
 
Adjusted
Diluted
Earnings
Per Share
 Adjusted
EBITDA		 
Adjusted
Net Loss
 
Adjusted
Diluted
Loss
Per Share
           
(In thousands, except per share amounts) (In thousands, except per share amounts)
Organizational restructuring costs$13,691
 $10,904
 $0.31
 $(6,559) $(4,292) $(0.12)
Additional depreciation expense resulting from fleet changes—
 13,321
 0.38
 —
 (4,490) (0.13)
Impairment of inventories5,439
 3,764
 0.11
Goodwill impairment22,274
 25,565
 0.72
Accretion of redeemable noncontrolling interests—
 —
 0.04
Tax valuation allowances —
 (13,171) (0.38)
Total special items$41,404
 $53,554
 1.56
 $(6,559) $(21,953) (0.63)

Region Operating Results
The following tables set forth certain operating information for the regions comprising our Industrial Aviation Servicesindustrial aviation services segment. Intercompany lease revenue and expense are eliminated from our segment reporting, and depreciation expense of aircraft is presented in the region that operates the aircraft.
Current Quarter Compared to Comparable Quarter
Set forth below is a discussion of the operations of our regions. Our consolidated results are discussed under “— Results“Results of Operations” above.
Europe Caspian
 Three Months Ended 
 September 30,		 Six Months Ended 
 September 30,		 
Favorable
(Unfavorable)
  
 2016 2015 2016 2015 Quarter vs Quarter Period vs Period
                
 (In thousands, except percentages)
Operating revenue$186,098
 $207,072
 $375,226
 $410,997
 $(20,974) (10.1)% $(35,771) (8.7)%
Earnings from unconsolidated affiliates, net of losses$65
 $153
 $116
 $252
 $(88) (57.5)% $(136) (54.0)%
Operating income$5,741
 $15,060
 $18,771
 $29,257
 $(9,319) (61.9)% $(10,486) (35.8)%
Operating margin3.1% 7.3% 5.0% 7.1% (4.2)% (57.5)% (2.1)% (29.6)%
Adjusted EBITDAR$50,155
 $67,373
 $100,042
 $132,559
 $(17,218) (25.6)% $(32,517) (24.5)%
Adjusted EBITDAR margin27.0% 32.5% 26.7% 32.3% (5.5)% (16.9)% (5.6)% (17.3)%
   Three Months Ended 
 June 30,		 
Favorable
(Unfavorable)
 
    
   2017 2016  
           
   (In thousands, except percentages) 
 Operating revenue $184,478
 $189,128
 $(4,650) (2.5)% 
 Earnings from unconsolidated affiliates, net of losses $30
 $51
 $(21) (41.2)% 
 Operating income $4,407
 $13,030
 $(8,623) (66.2)% 
 Operating margin 2.4% 6.9% (4.5)% (65.2)% 
 Adjusted EBITDA $16,152
 $17,599
 $(1,447) (8.2)% 
 Adjusted EBITDA margin 8.8% 9.3% (0.5)% (5.4)% 
 Rent expense $36,453
 $32,288
 $(4,165) (12.9)% 
The Europe Caspian region comprises all of our operations and affiliates in Europe, including oil and gas operations in the U.K. and Norway, Eastern Airways fixed wing operations and public sector SAR operations in the U.K. and our operations in Turkmenistan.
Current Quarter Compared to Comparable Quarter
The year-over-year decrease in operating revenue was primarily driven by theunfavorable impact of the downturn in the oil and gas industry, which has resulted in decreased activity levels with our oil and gas clients and impacted our revenue for Eastern Airways, the end of an oil and gas contract that began in late fiscal year 2015 and ended in late fiscal year 2016 that contributed $13.5 million in operating revenue in the Comparable Quarter and the impact of changes in foreign currency exchange rates.rates during the Current Quarter of $18.0 million was the primarily driver of the decrease in revenue year-over-year. Partially offsetting these decreases was an increase in operating revenue driven by the start-up of U.K. SAR bases since the Comparable Quarter, which contributed $11.8$10.0 million in additional operating revenue (on a foreign exchange neutral basis) for the Current Quarter.Quarter and a $6.1 million increase in Norway (on a foreign exchange neutral basis) primarily due to an additional contract. Eastern Airways contributed $29.8$27.9 million and $32.9$30.9 million in operating revenue and $3.1$0.1 million and $7.8$1.5 million in adjusted EBITDAREBITDA for the Current Quarter and Comparable Quarters,Quarter, respectively.
A substantial portion of our operations in the Europe Caspian region are contracted in the British pound sterling, which depreciated significantly against the U.S. dollar since June 2016at the end of the Comparable Quarter as a result of Brexit. TranslationWe recorded a foreign exchange loss of results at lower pound sterling exchange rates decreased operating revenue, operating income and adjusted EBITDAR by $25.3 million, $11.5$0.4 million and $7.0$6.7 million respectively, forin the Current Quarter compared to theand Comparable Quarter. Additionally, we recorded foreign exchange losses of $1.3 million and $6.8 million primarilyQuarter from the revaluation of assets and liabilities on British pound sterling functional currency entities as of SeptemberJune 30, 20162017 and 2015,2016, respectively, which is recorded in other income (expense), net and included in adjusted EBITDAR. We expect a greater negative impact on operating revenue, operating incomeEBITDA. Net of the translation and revaluation impacts, adjusted EBITDAREBITDA was negatively impacted by $1.2 million resulting from translation of operating results over the remainder of fiscal year 2017 ifchange in exchange rates remain at current rates orduring the Current Quarter. A further weakening of the British pound sterling weakens further.could result in additional revaluation losses in future quarters.
Excluding the impact of foreign currency exchange rate changes, operating margin and adjusted EBITDA margin would have been 3.0% and 9.6% in the Current Quarter compared to 5.5% and 11.5% in the Comparable Quarter, respectively. Operating margin and adjusted EBTIDAREBITDA margin, excluding the impact of foreign currency exchange rate changes, decreased fromin the ComparableCurrent Quarter as a result of the impact from the industry downturn, in the offshore energy market, which was only partially offset by the start-up of the U.K. SAR bases and cost reduction activities.
Current Period Compared to Comparable Period
Similar to the Current Quarter discussed above, the year-over-year decrease in operating revenue was primarily driven by the impact from the downturn in the oil and gas industry, which has resulted in decreased activity levels with our oil and gas clients and reduced revenue for Eastern Airways, the end of an oil and gas contract that began in late fiscal year 2015 and ended in late fiscal year 2016 that contributed $24.7 million additional operating revenue in the Comparable Period and the impact of changes in foreign currency exchange rates. Partially offsetting these decreases was an increase in operating revenue driven by the start-up of U.K. SAR bases since the Comparable Period, which contributed $32.8 million in additional operating revenue for the

Current Period. Eastern Airways contributed $60.8 million and $67.0 million in operating revenue and $7.0 million and $15.3 million in adjusted EBITDAR for the Current Period and Comparable Period, respectively.
As discussed above a substantial portion of our operations in the Europe Caspian region are contracted in the British pound sterling, which weakened significantly against the U.S. dollar in the Current Period as a result of Brexit. The movement of exchange rates decreased operating revenue, operating income and adjusted EBITDAR by $36.5 million, $13.4 million and $19.0 million, respectively, from translation of results compared to the Comparable Period. Additionally, we recorded foreign exchange losses of $8.0 million and $3.9 million, respectively, from the revaluation of assets and liabilities on British pound sterling functional currency entities as of September 30, 2016 and 2015, which is recorded in other income (expense), net and included in adjusted EBITDAR. Including both the translation and revaluation impacts, adjusted EBITDAR was negatively impacted by $13.9 million and $3.7 million, respectively, resulting from the change in exchange rates during the Current and Comparable Periods.
Operating margin and adjusted EBTIDAR margin decreased from the Comparable Period as a result of the impact from the downturn in the offshore energy market, which was only partially offset by the start-up of the U.K. SAR bases and cost reduction activities.
Africa
 Three Months Ended 
 September 30,		 Six Months Ended 
 September 30,		 
Favorable
(Unfavorable)
  
 2016 2015 2016 2015 Quarter vs Quarter Period vs Period
                
 (In thousands, except percentages)
Operating revenue$50,344
 $63,618
 $103,468
 $141,099
 $(13,274) (20.9)% $(37,631) (26.7)%
Earnings from unconsolidated affiliates, net of losses$43
 $—
 $43
 $—
 $43
 *
 $43
 *
Operating income$7,942
 $7,574
 $9,513
 $20,526
 $368
 4.9 % $(11,013) (53.7)%
Operating margin15.8% 11.9% 9.2% 14.5% 3.9% 32.8 % (5.3)% (36.6)%
Adjusted EBITDAR$17,632
 $19,901
 $26,672
 $42,715
 $(2,269) (11.4)% $(16,043) (37.6)%
Adjusted EBITDAR margin35.0% 31.3% 25.8% 30.3% 3.7% 11.8 % (4.5)% (14.9)%
_____________ 
* percentage change too large to be meaningful or not applicable
   Three Months Ended 
 June 30,		 
Favorable
(Unfavorable)
 
   2017 2016  
           
   (In thousands, except percentages) 
 Operating revenue $49,981
 $53,124
 $(3,143)
(5.9)% 
 Operating income $10,048
 $1,571
 $8,477
 539.6 % 
 Operating margin 20.1% 3.0% 17.1% 570.0 % 
 Adjusted EBITDA $13,383
 $6,772
 $6,611
 97.6 % 
 Adjusted EBITDA margin 26.8% 12.7% 14.1% 111.0 % 
 Rent expense 2,200
 2,268
 $68
 3.0 % 
The Africa region comprises all of our operations and affiliates on the African continent, including Nigeria and Egypt.
Current Quarter Compared to Comparable Quarter
Operating revenue for Africa decreased in the Current Quarter due to an overall decrease in activity driven by the downturn of the oil and gas industry compared to the Comparable Quarter. Activity declined with certain clients and certain contracts ended, reducing revenue by $14.5$6.1 million, which was only partially offset by a $0.4 millionan increase due to new contracts.in activity with other clients increasing revenue by $1.6 million. Additionally, Eastern Airwayswe began providing fixed wing services in this region in October 2015,Africa which generated $0.7$1.8 million of operating revenue for the Current Quarter. As discussed under “— Results of Operations — Current Quarter Compared to Comparable Quarter,” a majority of our revenue in our Africa region is contracted at fixed U.S. dollar values, resulting in minimal exposure to the devalued naira upon translation into U.S. dollars for reporting purposes.
Operating income, operating margin, adjusted EBITDA and operatingadjusted EBITDA margin increased in the Current Quarter primarily due to a decrease in depreciation and amortization expense of $6.6 million and a decline in direct costs including(including a $2.4 million decrease in maintenance expense, a $1.3$4.3 million decrease in salaries and benefits and a $0.9$2.8 million decrease in freight costs. These costs were impacted by the devaluation of the naira since the Comparable Quarter as our naira based expenses translate into less U.S. dollars. The impact of exchange rate changes resulted in a benefit of $8.0 million in reduced operating expenses driving the improvement in operating margin and adjusted EBITDAR margin. The decrease in depreciation and amortization expense and direct costs wascosts), partially offset by the declinedecrease in revenue discussed above. Also, duringAdditionally, operating income and operating margin improved in the Current Quarter due to lower depreciation expense. During the Comparable Quarter, we reversed $1.1recorded $2.8 million in bad debt expense. The decrease in depreciation and amortization expense is primarily due to a lower level of accelerated depreciation expense related to aircraft where management made the decision to exit these model types earlier than originally anticipated. The year-over-year devaluation of $1.1the Nigerian naira also benefited our results by $2.0 million in the Current Quarter versus $6.5 millionthis region as expenses denominated in the Comparable Quarter. In the prior year, management decided to exit certain older aircraft fleet types operating in this market sooner than originally anticipated, resulting in accelerated depreciation. Operating income and adjusted EBTIDAR benefited from changes in foreign currency exchange rates by $6.8 million and $6.5 million, respectively, year-over-year due to the combination of currencies we transact innaira translated into less U.S. dollars for our Nigerian operations.

Additionally, during the Current and Comparable Quarters, we recorded $4.1 million and $0.5 million, respectively, in severance expense resulting from voluntary and involuntary separation programs as part of our organizational restructuring efforts, which is excluded from adjusted EBITDAR and adjusted EBITDAR margin.reporting purposes.
As previously discussed, we have seen recent changes in the Africa region as a result of increased competition entering the Nigerian market. Additionally, changing regulations and political environment have made, and are expected to continue to make, our operating results for Nigeria unpredictable. Market uncertainty related to the oil and gas downturn has continued in this region putting smaller clients under increasing pressure as their activity declined, which reduced our activity levels and overall pricing. We implemented cost reduction measures in advance of these reductions and expect additional efficiencies in the future.
Current Period Compared to Comparable Period
Operating revenue for Africa decreased in the Current Period due to an overall decrease in activity driven by the downturn of the oil and gas industry compared to the Comparable Period. Activity declined with certain clients and certain contracts ended, reducing revenue by $42.9 million, which was only partially offset by a $3.3 million increase due to new contracts. Additionally, Eastern Airways began providing fixed wing services in this region in October 2015, which generated $1.2 million of operating revenue for the Current Period.
Operating income, operating margin, adjusted EBITDAR and adjusted EBITDAR margin decreased in the Current Period primarily due to the decrease in revenue discussed above, partially offset by a decline in direct costs (including a $6.7 million decrease in salaries and benefits and a $5.0 million decrease in maintenance expense) and a $3.6 million decrease in general and administrative expenses. These costs were impacted by the devaluation of the naira since the Comparable Period as our naira based expenses translate into less U.S. dollars. The impact of exchange rate changes resulted in a benefit of $10.7 million in reduced operating expenses. Also, during the Comparable Period, we recorded $3.0 million in bad debt expense related to two clients in this region. Additionally impacting operating income and operating margin is a decrease in depreciation and amortization expense as a result of a lower amount of accelerated depreciation of $3.9 million in the Current Period versus $8.8 million in the Comparable Period.
Additionally, during the Current and Comparable Periods, we recorded $4.1 million and $3.7 million, respectively, in severance expense resulting from voluntary and involuntary separation programs as part of our restructuring efforts, which is excluded from adjusted EBITDAR and adjusted EBITDAR margin.
Americas
 Three Months Ended 
 September 30,		 Six Months Ended 
 September 30,		 
Favorable
(Unfavorable)
  
 2016 2015 2016 2015 Quarter vs Quarter Period vs Period
                
 (In thousands, except percentages)
Operating revenue$56,800
 $73,193
 $115,554
 $153,215
 $(16,393) (22.4)% $(37,661) (24.6)%
Earnings from unconsolidated affiliates, net of losses$260
 $(15,513) $4,123
 $(9,316) $15,773
 101.7 % $13,439
 144.3 %
Operating income$2,643
 $(9,046) $3,564
 $7,486
 $11,689
 129.2 % $(3,922) (52.4)%
Operating margin4.7% (12.4)% 3.1% 4.9% 17.1% 137.9 % (1.8)% (36.7)%
Adjusted EBITDAR$15,300
 $7,295
 $34,898
 $40,737
 $8,005
 109.7 % $(5,839) (14.3)%
Adjusted EBITDAR margin26.9% 10.0 % 30.2% 26.6% 16.9% 169.0 % 3.6 % 13.5 %
   Three Months Ended 
 June 30,		 
Favorable
(Unfavorable)
 
   2017 2016  
           
   (In thousands, except percentages) 
 Operating revenue $57,783
 $58,754
 $(971) (1.7)% 
 Earnings from unconsolidated affiliates, net of losses $(535) $3,863
 $(4,398) (113.8)% 
 Operating income $(1,256) $921
 $(2,177) (236.4)% 
 Operating margin (2.2)% 1.6% (3.8)% (237.5)% 
 Adjusted EBITDA $6,176
 $14,036
 $(7,860) (56.0)% 
 Adjusted EBITDA margin 10.7 % 23.9% (13.2)% (55.2)% 
 Rent expense $6,994
 $5,562
 $(1,432) (25.7)% 
The Americas region comprises all our operations and affiliates in North America and South America, including Brazil, Canada, Guyana, Suriname, Trinidad and the U.S. Gulf of Mexico.
Current Quarter Compared to Comparable Quarter
Operating revenue decreased fromslightly in the ComparableCurrent Quarter primarily due to a decline in medium and large activity in our U.S. Gulf of Mexico operations resulting from the oil and gas industry downturn, which reduced operating revenue by $14.9$3.2 million, a decrease in the Current Quarter,Trinidad of $1.7 million and a decrease of $2.0$1.5 million in Brazil due to fewerno aircraft being leased to Líder and a decrease in Suriname of $3.3 million due to the end of a contract. These decreases wereCurrent Quarter, partially offset by an increase of $2.5$2.3 million in Trinidad due to additional aircraft on contractrevenue for the search and rescue consortium in the U.S. Gulf of Mexico and a new contract in Guyana thatwhich increased operating revenue by $1.9$1.2 million.
Earnings from unconsolidated affiliates, net of losses, decreased $4.4 million primarily due to a decrease in earnings from our investment in Líder in Brazil related to a decrease in activity. Operating income, operating margin, adjusted EBITDAREBITDA and adjusted EBITDAREBITDA margin were negatively impacted by an unfavorable exchange rate changesimpact in both the Current and Comparable Quarters,Quarter which reduced decreased

our earnings from our investment in Líder. Earnings from our investment in Líder were reduced by $1.3 million and $19.9 million for the Current and Comparable

Quarters, respectively, due to the impact of unfavorable exchange rate changes. Excluding this impact, earnings from our investment in Líder would have been $2.2 million and $4.7 million, respectively, operating income for the Americas region would have been $3.9 million (6.9% operating margin) and $10.9 million (14.8% operating margin), respectively, and adjusted EBITDAR for the Americas region would have been $16.6 million (29.1% adjusted EBITDAR margin) and $27.2 million (37.1% adjusted EBITDAR margin), respectively, in the Current and Comparable Quarters. This year-over-year decrease in the Americas region’s operating income, operating margin, adjusted EBITDAR and adjusted EBITDAR margin primarily resulted from lower revenue due to a decline in activity discussed above, partially offset by a decrease in direct costs, including a $3.1 million decrease in salaries and benefits and a $3.0 million decrease in maintenance expense.
During the Comparable Quarter, we recorded accelerated depreciation expense on aircraft exiting our fleet of $3.2 million and during the Current and Comparable Quarters, we recorded severance expense related to organizational restructuring efforts of $0.1 million and $0.3 million, respectively. Depreciation and amortization, including accelerated depreciation, and severance expense recorded during the Current and Comparable Quarters, were excluded from adjusted EBITDAR and adjusted EBITDAR margin.
$1.1 million. See further discussion about our investment in Líder and the Brazil market in “— Executive Overview — Market Outlook” and “— Results of Operations — Current Quarter Compared to Comparable Quarter” included elsewhere in this Quarterly Report.
Current Period Compared to Comparable Period
Operating revenue decreased from the Comparable Period primarily due to a declineThe decreases in activity in our U.S. Gulf of Mexico operations, primarily resulting from the oil and gas industry downturn, that reduced operating revenue by $33.6 million in the Current Period, a decrease of $4.2 million in Brazil due to fewer aircraft leased to Líder and a decrease in Suriname of $5.4 million due to the end of a contract. These decreases were partially offset by a new contract in Guyana which increased operating revenue by $5.4 million.
Operating income, operating margin, adjusted EBITDAR and adjusted EBITDAR margin were negatively impacted by unfavorable exchange rate changes in the Current and Comparable Periods which reduced our earnings from our investment in Líder. Earnings from our investment in Líder were reduced by $1.3 million and $18.2 million for the Current and Comparable Periods, respectively, due to the impact of unfavorable exchange rate changes. Excluding this impact, earnings from our investment in Líder would have been $6.8 million and $9.4 million, respectively, operating income for the Americas region would have been $4.9 million (4.2% operating margin) and $25.6 million (16.7% operating margin), respectively, and adjusted EBITDAR for the Americas region would have been $36.2 million (31.3% adjusted EBITDAR margin) and $58.9 million (38.4% adjusted EBITDAR margin), respectively, in the Current and Comparable Periods. This year-over-year decrease in the Americas region’s operating income, operating margin, adjusted EBITDAREBITDA and adjusted EBITDAREBITDA margin primarily resulted from a decline in activitywere driven by the declinedecrease in revenue discussed above partially offset by a decreaseand earnings from unconsolidated affiliates and an increase in direct costs including a $7.4 million decrease in maintenancerent expense and a $4.8 million decrease in salaries and benefits.
of $1.4 million. During the Current and Comparable Periods,Quarter, we recorded accelerated depreciation expense on aircraft exiting our fleet of $3.9 million and $6.1 million, respectively, andmillion. Additionally, we recorded severance expense related to organizational restructuring efforts of $1.1$0.2 million and $1.4$1.0 million for the Current Quarter and Comparable Quarter, respectively. Depreciation and amortization, including accelerated depreciation, and severance expense recorded during the Current Quarter and Comparable Periods,Quarter, were excluded from adjusted EBITDAREBITDA and adjusted EBITDAREBITDA margin.
Asia Pacific
 Three Months Ended 
 September 30,		 Six Months Ended 
 September 30,		 
Favorable
(Unfavorable)
  
 2016 2015 2016 2015 Quarter vs Quarter Period vs Period
                
 (In thousands, except percentages)
Operating revenue$50,820
 $72,038
 $106,052
 $146,775
 $(21,218) (29.5)% $(40,723) (27.7)%
Operating income$(9,575) $5,013
 $(15,468) $4,325
 $(14,588) (291.0)% $(19,793) (457.6)%
Operating margin(18.8)% 7.0% (14.6)% 2.9% (25.8)% (368.6)% (17.5)% (603.4)%
Adjusted EBITDAR$6,909
 $16,323
 $13,070
 $33,395
 $(9,414) (57.7)% $(20,325) (60.9)%
Adjusted EBITDAR margin13.6 % 22.7% 12.3 % 22.8% (9.1)% (40.1)% (10.5)% (46.1)%
   Three Months Ended 
 June 30,		 
Favorable
(Unfavorable)
 
   2017 2016  
           
   (In thousands, except percentages) 
 Operating revenue $49,127
 $55,232
 $(6,105) (11.1)% 
 Operating income $(12,530) $(5,893) $(6,637) (112.6)% 
 Operating margin (25.5)% (10.7)% (14.8)% (138.3)% 
 Adjusted EBITDA $(5,720) $(3,123) $(2,597) (83.2)% 
 Adjusted EBITDA margin (11.6)% (5.7)% (5.9)% (103.5)% 
 Rent expense $10,954
 $9,284
 $(1,670) (18.0)% 
The Asia Pacific region comprises all our operations and affiliates in Australia and Southeast Asia, including Malaysia, and Sakhalin, and our fixed wing operations through Airnorth in Australia.

Current Quarter Compared to Comparable Quarter
Operating revenue decreased from the Comparable Quarter in Australia by $21.7 million primarily due to the ending of contracts and decline in number of aircraft on contract in Australia. A substantial portion of our operations in the Asia Pacific region are contracted in the Australian dollar, which has strengthened against the U.S. dollar since fiscal year 2016. Foreign currency exchange rate changes resulted in an increase of our revenue for our Asia Pacific region of $1.9 million year-over-year. Airnorth contributed $21.5 million and $21.6 million in operating revenue and $5.2 million and $4.9 million in adjusted EBITDAR for the Current and Comparable Quarters, respectively.
Operating income, operating margin, adjusted EBTIDAR and adjusted EBITDAR margin decreased primarily due to lower activity partially offset by cost reduction activities, including a decrease of $3.6 million in salaries and benefits, a decrease of $1.6 million in maintenance expense and a decrease of $0.7 million in travel and training expense.
During the Comparable Quarter, we recorded additional depreciation expense of $0.8 million for two large aircraft operating in this region due to management’s decision to exit these fleet types earlier than originally anticipated, and during the Current Quarter and Comparable Quarter we recorded $1.8by $9.3 million and $0.4 million, respectively, in severance expense related to organizational restructuring efforts. The severance expense is not included in adjusted EBITDAR or adjusted EBITDAR margin for the Current Quarter and Comparable Quarter.
Current Period Compared to Comparable Period
Operating revenue decreased from the Comparable Period in Australia by $37.6 million primarily due to the ending of short-term contracts in Australia, partially offset by an increase of $1.5 million in Russia and aan increase of $1.3 million decrease in Russia.from our fixed-wing operations. Airnorth contributed $41.2$21.0 million and $43.2$19.7 million respectively, in operating revenue and $10.7$0.9 million and $10.9$3.5 million respectively, in adjusted EBITDAREBITDA for the Current Quarter and Comparable Periods.Quarter, respectively.
Operating income, operating margin, adjusted EBTIDAREBTIDA and adjusted EBITDAREBITDA margin decreased primarily due to decreased activityrevenue discussed above, an increase in rent expense of $1.7 million and increased maintenance expense of $2.4 million primarily due to timing of heavy maintenance for Airnorth, which was only partially offset by a decrease in direct costs, including a decrease of $6.4 million in maintenance expense, a decrease of $5.0 million in salaries and benefits and a decrease of $1.9 million$2.6 million. Additionally, in travel and training expense. Additionally,the Current Quarter operating income and operating margin were negatively impacted by a declinean increase in depreciation and amortization expense of $4.6$1.6 million.
During the Current Quarter and Comparable Period,Quarter, we recorded additional depreciation expense of $4.4 million for four large aircraft operating in this region due to management’s decision to exit these fleet types earlier than originally anticipated, and during the Current Period and Comparable Period, we recorded $2.2$0.7 million and $1.3$0.4 million respectively, in severance expense related to organizational restructuring efforts.efforts, respectively. The severance expense is not included in adjusted EBITDAREBITDA or adjusted EBITDAREBITDA margin for the Current PeriodQuarter and Comparable Period.Quarter.

Corporate and Other
 Three Months Ended 
 September 30,		 Six Months Ended 
 September 30,		 
Favorable
(Unfavorable)
  
 2016 2015 2016 2015 Quarter vs Quarter Period vs Period
                
 (In thousands, except percentages)
Operating revenue$2,641
 $6,160
 $5,818
 $14,933
 $(3,519) (57.1)% $(9,115) (61.0)%
Earnings from unconsolidated affiliates, net of losses$(187) $—
 $(271) $—
 $(187) *
 $(271) *
Operating loss$(31,447) $(34,427) $(57,294) $(64,891) $2,980
 8.7 % $7,597
 11.7 %
Adjusted EBITDAR$(12,642) $(18,128) $(26,965) $(35,595) $5,486
 30.3 % $8,630
 24.2 %
_____________ 
* percentage change too large to be meaningful or not applicable
   Three Months Ended 
 June 30,		 
Favorable
(Unfavorable)
 
   2017 2016  
           
   (In thousands, except percentages) 
 Operating revenue $1,712
 $3,177
 $(1,465) (46.1)% 
 Earnings from unconsolidated affiliates $(160) $(84) $(76) (90.5)% 
 Operating loss $(25,957) $(25,847) $(110) (0.4)% 
 Adjusted EBITDA $(14,788) $(16,204) $1,416
 8.7 % 
 Rent expense $2,074
 $1,881
 $(193) (10.3)% 
Corporate and other includes our Bristow Academy operations, supply chain management and corporate costs that have not been allocated out to other regions.
Current Quarter Compared to Comparable Quarter
Operating revenue decreased in the Current Quarter primarily due to a decline in Bristow Academy revenue of $3.3$1.1 million.
Operating loss and adjusted EBITDARAdjusted EBITDA improved from the Comparable Quarter primarily due to overall cost reduction activities that reduced professional fees by $1.6 milliondecreased general and other costs by $3.6 million, including information technology, staff

relocation and recruitment and traveladministrative expenses, partially offset by a decline in revenue discussed above and an increase in salaries and benefits of $1.2 million. Salaries and benefits wereabove. In addition to the items impacting adjusted EBITDA, operating loss for the Current Quarter was impacted by an increase$1.2 million of $3.0 million due to the reversal of a bonus accrual in the Comparable Quarter and $5.4 million due to an increase in performance cash plan expense as a result of improved stock price performance, mostly offset by a $7.2 million reduction in other salaries and benefits as a result of a reduced headcount from organizational restructuring efforts.inventory impairment charges.
Additionally, during the Current Quarter and Comparable Quarter, we recorded $3.8$8.3 million and $2.7$5.1 million respectively, related to organizational restructuring costs, respectively, and during the Current Quarter, includes $7.6we recorded $1.2 million of inventory impairments,impairment charges, all of which are excluded from adjusted EBITDAR.EBITDA.
Current Period Compared to Comparable Period
Operating revenue decreased in the Current Period primarily due to a decline in Bristow Academy revenue of $7.3 million and a decrease in third-party part sales of $1.6 million.
Operating loss and adjusted EBITDAR improved from the Comparable Period primarily due to overall cost reduction activities that decreased professional fees by $5.2 million and other costs by $3.0 million, including information technology, staff relocation and recruitment and travel expenses, partially offset by a decline in revenue discussed above and an increase in salaries and benefits of $3.3 million. The increase in salaries and benefits is primarily driven by an increase of $2.3 million due to no bonus accrual in the Comparable Period, $6.0 million due to an increase in performance cash plan expense as a result of an increase in stock price performance and $3.6 million due to an increase in severance expense associated with the organizational restructuring efforts, which was mostly offset by an $8.6 million reduction in other salaries and benefits as a result of a reduced headcount from organizational restructuring efforts.
Additionally, during the Current Period and Comparable Period, we recorded $8.9 million and $3.0 million, respectively, related to organizational restructuring costs, and the Current Quarter includes $7.6 million of inventory impairments, all of which are excluded from adjusted EBITDAR.
Interest Expense, Net
 Three Months Ended 
 September 30,		 Six Months Ended 
 September 30,		 
Favorable
(Unfavorable)
  
 2016 2015 2016 2015 Quarter vs Quarter Period vs Period
                
 (In thousands, except percentages)
Interest income$235
 $217
 $469
 $438
 $18
 8.3 % $31
 7.1 %
Interest expense(12,700) (9,554) (25,019) (19,285) (3,146) (32.9)% (5,734) (29.7)%
Amortization of debt discount(962) (28) (989) (946) (934) *
 (43) (4.5)%
Amortization of debt fees(1,146) (459) (2,487) (1,071) (687) (149.7)% (1,416) (132.2)%
Capitalized interest3,105
 2,645
 5,672
 6,016
 460
 17.4 % (344) (5.7)%
Interest expense, net$(11,468) $(7,179) $(22,354) $(14,848) $(4,289) (59.7)% $(7,506) (50.6)%
   Three Months Ended 
 June 30,		 
Favorable
(Unfavorable)
 
   2017 2016  
           
   (In thousands, except percentages) 
 Interest income $214
 $234
 $(20) (8.5)% 
 Interest expense (16,139) (12,319) (3,820) (31.0)% 
 Amortization of debt discount (23) (27) 4
 14.8 % 
 Amortization of debt fees (1,147) (1,341) 194
 14.5 % 
 Capitalized interest 1,074
 2,567
 (1,493) (58.2)% 
 Interest expense, net $(16,021) $(10,886) $(5,135) (47.2)% 
Interest expense, net increased in the Current Quarter compared to the Comparable Quarter primarily due to an increase in borrowings and higher amortization of debt fees, partially offset by an increase in capitalized interest resulting from higher average construction in progress.
Interest expense, net increased in the Current Period primarily due to an increase in borrowings, an increase in amortization of debt fees and a decrease inlower capitalized interest resulting from lower average construction in progress, partially offset by lower amortization of debt discount due to the repurchase of the 3% Convertible Senior Notes in the Comparable Period.

progress.
Other Income (Expense), Net
 Three Months Ended 
 September 30,		 Six Months Ended 
 September 30,		 Favorable
(Unfavorable)
  
 2016 2015 2016 2015 Quarter vs Quarter Period vs Period
                
 (In thousands, except percentages)
Foreign currency gains (losses) by region:               
Europe Caspian(1,272) (6,831) (8,003) (3,892) $5,559
 81.4 % $(4,111) (105.6)%
Africa171
 238
 (143) (815) (67) (28.2)% 672
 82.5 %
Americas195
 (334) 957
 (81) 529
 158.4 % 1,038
 *
Asia Pacific999
 (3,209) (953) (4,123) 4,208
 131.1 % 3,170
 76.9 %
Corporate and other2,763
 (1,294) 4,741
 1,341
 4,057
 313.5 % 3,400
 253.5 %
Foreign currency gains
(losses)		2,856
 (11,430) (3,401) (7,570) 14,286
 125.0 % 4,169
 55.1 %
Other147
 6
 215
 (15) 141
 *
 230
 *
Other income (expense), net$3,003
 $(11,424) $(3,186) $(7,585) $14,427
 126.3 % $4,399
 58.0 %
   Three Months Ended 
 June 30,		 
Favorable
(Unfavorable)
 
   2017 2016  
           
   (In thousands, except percentages) 
 Foreign currency gains (losses) by region:         
 Europe Caspian $(406) $(6,731) $6,325
 94.0 % 
 Africa 131
 (314) 445
 141.7 % 
 Americas 207
 762
 (555) (72.8)% 
 Asia Pacific 238
 (1,952) 2,190
 112.2 % 
 Corporate and other (1,848) 1,978
 (3,826) (193.4)% 
 Foreign currency losses (1,678) (6,257) 4,579
 73.2 % 
 Other 33
 68
 (35) (51.5)% 
 Other income (expense), net $(1,645) $(6,189) $4,544
 73.4 % 
____________ 
 * percentage change too large to be meaningful or not applicable
Other income (expense), net increasedimproved in the Current Quarter primarily due to the favorableless of an unfavorable impact of changes in foreign currency exchange rates in the Current Quarter compared to the Comparable Quarter. The foreign currency gains (losses) within other income (expense), net are reflected within adjusted EBITDAR of the regions shown in the table above.
Other income (expense), net decreased primarily due to the unfavorable impact of changes in foreign currency exchange rates in the Current Period compared to the Comparable Period. The foreign currency losses within other income (expense), net are reflected within adjusted EBITDAREBITDA of the regions shown in the table above.
Taxes
 Three Months Ended 
 September 30,		 Six Months Ended 
 September 30,		 
Favorable
(Unfavorable)
  
 2016 2015 2016 2015 Quarter vs Quarter Period vs Period
                
 (In thousands, except percentages)
Effective tax rate14.8% 5.7% 9.5% 0.3% (9.1)% (159.6)% (9.2)% *
Net foreign tax on non-U.S. earnings$485
 $7,568
 $715
 $12,730
 $7,083
 93.6 % $12,015
 94.4 %
Benefit of foreign earnings indefinitely reinvested abroad$2,475
 $(3,575) $4,145
 $(11,393) $(6,050) (169.2)% $(15,538) (136.4)%
Expense (benefit) from change in tax contingency$40
 $156
 $(370) $397
 $116
 74.4 % $767
 193.2 %
Impact of goodwill impairment$—
 $3,290
 $—
 $3,290
 $3,290
 100.0 % $3,290
 100.0 %
Utilization of foreign tax credits$—
 $(2,751) $—
 $(4,103) $(2,751) (100.0)% $(4,103) (100.0)%
Change in valuation allowance$2,485
 $969
 $15,656
 $3,015
 $(1,516) (156.4)% $(12,641) (419.3)%
Foreign statutory rate reduction$(730) $—
 $(1,234) $—
 $730
 *
 $1,234
 *
Deduction of foreign taxes$(698) $—
 $(1,202) $—
 $698
 *
 $1,202
 *
  Three Months Ended 
 June 30,		 
Favorable
(Unfavorable)
 
  2017 2016  
          
  (In thousands, except percentages) 
 Effective tax rate(31.9)% 5.2% 37.1% 713.5 % 
 Net foreign tax on non-U.S. earnings$171
 $230
 $59
 25.7 % 
 Expense of foreign earnings indefinitely reinvested abroad$5,251
 $1,670
 $(3,581) (214.4)% 
 Expense (benefit) from change in tax contingency$16
 $(410) $(426) (103.9)% 
 Impact of stock based compensation$1,646
 $—
 $(1,646) *
 
 Foreign statutory rate reduction$—
 $(503) $(503) (100.0)% 
 Deduction for foreign taxes$(738) $(583) $155
 26.6 % 
 Change in valuation allowance$11,166
 $13,171
 $2,005
 15.2 % 
_________________________ 
 * percentage change too large to be meaningful or not applicable
In accordance with GAAP, we estimate the full-year effective tax rate from continuing operations and apply this rate to our year-to-date income from continuing operations. In addition, we separately calculate the tax impact of unusual or infrequent items, if any. The tax impact of such unusual or infrequent items is treated discretely in the quarter in which they occur.
The relationship between our provision for or benefit from income taxes and our pre-tax book income can vary significantly from period to period considering, among other factors, (a) the overall level of pre-tax book income, (b) changes in the blend of

income that is taxed based on gross revenues or at high effective tax rates versus pre-tax book income or at low effective tax rates and (c) our geographical blend of pre-tax book income. Consequently, our income tax expense does not change proportionally with our pre-tax book income. Significant decreases in our pre-tax book income typically result in higher effective tax rates, while significant increases in pre-tax book income can lead to lower effective tax rates, subject to the other factors impacting income tax expense noted above. The increase in our effective tax rate excluding discrete items for the Current Quarter compared to the Comparable Quarter primarily related to an increase in the blend of earnings taxed in relatively high taxed jurisdictions versus low taxed jurisdictions. Additionally, during the Current and Comparable Quarters, we increased our valuation allowance by $11.2 million and $13.2 million, respectively, which also increased our effective tax rate.
Valuation allowances represent the reduction of our deferred tax assets. We evaluate our deferred tax assets quarterly which requires significant management judgment to determine the recoverability of these deferred tax assets by assessing whether it is more likely than not that some or all of the deferred tax asset will be realized before expiration. After considering all available positive and negative evidence using a “more likely than not” standard, we believe it is appropriate to value against deferred tax assets related to foreign tax credits and certain foreign net operating losses. As a result, for the three months ended September 30, 2016,Current and Comparable Quarters, we recorded a valuation allowance of $2.5$7.6 million and $11.0 million, respectively, against foreign tax credits and $3.6 million and $2.2 million, respectively, against net operating losses in certain foreign jurisdictions. ForThese valuation allowances recorded in the six months ended September 30, 2016,Current Quarter combined with the impact of ongoing valuation allowances on our overall effective tax rate for fiscal year 2018 resulted in additional non-cash tax expense of $13.9 million in the Current Quarter. Additionally, we recorded a valuation allowanceone-time non-cash tax effect from repositioning of $11.0 million against foreigncertain aircraft from one tax credits and $4.7 million against net operating lossesjurisdiction to another related to recent financing transactions resulting in certain foreign jurisdictions.additional tax expense of $1.0 million.

Liquidity and Capital Resources
Cash Flows
Operating Activities
Net cash flows providedused by operating activities was $28.051.2 million and $14.8 million during the Current Period compared to $58.3 million duringQuarter and Comparable Quarter, respectively. The decrease in net cash flows from operating activities in the Comparable Period.Current Quarter resulted from a combination of an increased net loss and lower cash flow from working capital changes. Changes in non-cash working capital generatedused $38.832.1 million and used $7.36.5 million in cash flows from operating activities for the Current PeriodQuarter and Comparable Period,Quarter, respectively. The decrease in netThis increased cash flows provided by operating activities is primarily due touse resulted from the decreased top-line earnings and working capital changes, driven by timing of cashreceivable collections and payments.payment of liabilities.
Investing Activities
Cash flows used inprovided by investing activities was $90.029.4 million during the Current Period compared toQuarter and cash flows used by investing activities was $130.99.6 million during the Comparable Period.Quarter. Cash was used primarily for capital expenditures as follows:
  Six Months Ended 
 September 30,		 
  2016 2015 
 Number of aircraft delivered:    
 Medium5
 1
 
 SAR aircraft1
 2
 
 Total aircraft6
 3
 
 Capital expenditures (in thousands):    
 Aircraft and related equipment$95,574
 $111,153
 
 Other6,292
 35,836
 
 Total capital expenditures$101,866
 $146,989
 
  Three Months Ended 
 June 30,		 
  2017 2016 
 Number of aircraft delivered:    
 Medium3
 —
 
 Total aircraft3
 —
 
 Capital expenditures (in thousands):    
 Aircraft and equipment$10,810
 $17,487
 
 Land and building1,743
 3,576
 
 Total capital expenditures$12,553
 $21,063
 
In addition to these capital expenditures, investing cash flows were impacted by aircraft sales. During the Current Period,Quarter, we received proceeds of $11.8$42.0 million primarily from the sale or disposal of six aircraft and certain other equipment. During the Comparable Period,Quarter, we received proceeds of $16.1$11.5 million primarilyin proceeds from the sale or disposal of 13six aircraft and certain other equipment.
Financing Activities
Cash flows used in financing activities was $1.2 million during the Current Quarter and cash flows provided by financing activities totaled $57.1was $40.4 million during the Current Period compared to $104.4 million during the Comparable Period.Quarter. During the Current Period,Quarter, we received $191.5$68.8 million from borrowings on our $400 million revolving credit facility (the “Revolving Credit Facility”). During the Current Quarter, we used cash to repay debt of $66.9 million (including $33.4 million related to our Revolving Credit Facility and $33.5 million related to other principal payments on debt) and pay dividends of $2.5 million on our Common Stock. During the Comparable Quarter, we received $72.0 million from borrowings on our Revolving Credit Facility. During the Current Period,Comparable Quarter, we used cash to repay debt of $121.0$18.0 million and pay dividends of $4.9$2.5 million on our Common Stock. During the Comparable Period, we received $334.2 million from borrowings on our Revolving Credit Facility and $127.4 million from borrowings on our $350 million Term Loan. During the Comparable Period, we used cash to repay debt of $323.6 million (including $115.0 million for the repurchase of our 3% Convertible Senior Notes) and pay dividends of $23.7 million on our Common Stock.


Future Cash Requirements
Contractual Obligations, Commercial Commitments and Off Balance Sheet Arrangements
We have various contractual obligations that are recorded as liabilities on our condensed consolidated balance sheet. Other items, such as certain purchase commitments, interest payments and other executory contracts are not recognized as liabilities on our condensed consolidated balance sheet but are included in the table below. For example, we are contractually committed to make certain minimum lease payments for the use of property and equipment under operating lease agreements.

The following table summarizes our significant contractual obligations and other commercial commitments on an undiscounted basis as of SeptemberJune 30, 20162017 and the future periods in which such obligations are expected to be settled in cash. In addition, the table reflects the timing of principal and interest payments on outstanding borrowings as of SeptemberJune 30, 20162017. Additional details regarding these obligations are provided in Notes 5, 6, 7, and 9 in the “Notes to Consolidated Financial Statements” included in the fiscal year 20162017 Annual Report and in Notes 3, 4, 5 and 7 in the “Notes to Condensed Consolidated Financial Statements” included elsewhere in this Quarterly Report.
 Payments Due by Period
   Six Months Ending March 31, 2017 Fiscal Year Ending March 31, Payments Due by Period
 Total 2018 —  
 2019		 2020 —  
 2021		 2022 and beyond   
Nine
Months
Ending
March 31,
2018
 Fiscal Year Ending March 31,
           Total 
2019—
2020
 
2021—
2022
 
2023 and
beyond
 (In thousands) (In thousands)
Contractual obligations:                    
Long-term debt and short-term borrowings:                    
Principal (1)
 $1,231,272
 $64,090
 $291,683
 $468,182
 $407,317
 $1,303,854
 $101,317
 $465,465
 $187,163
 $549,909
Interest (2)
 216,775
 25,446
 88,910
 51,997
 50,422
 251,590
 41,557
 101,766
 77,497
 30,770
Aircraft operating leases (3)
 548,587
 93,089
 304,137
 132,926
 18,435
 458,929
 133,677
 257,722
 58,268
 9,262
Other operating leases (4)
 81,958
 5,412
 20,451
 15,881
 40,214
 76,156
 8,850
 19,434
 14,549
 33,323
Pension obligations (5)
 41,791
 4,905
 35,131
 1,755
 —
 61,819
 11,249
 30,563
 20,007
 —
Aircraft purchase obligations (6)
 429,194
 9,231
 153,205
 141,352
 125,406
Other purchase obligations (7)
 297,804
 75,311
 44,745
 61,570
 116,178
Aircraft purchase obligations (6)(7)
 432,787
 63,884
 168,922
 150,211
 49,770
Other purchase obligations (8)
 65,190
 65,190
 —
 —
 —
Total contractual cash obligations $2,847,381
 $277,484
 $938,262
 $873,663
 $757,972
 $2,650,325
 $425,724
 $1,043,872
 $507,695
 $673,034
Other commercial commitments:                    
Letters of credit $11,954
 $11,954
 $—
 $—
 $—
 $12,962
 $12,962
 $—
 $—
 $—
Contingent consideration (8)
 19,273
 3,826
 15,447
 —
 —
Contingent consideration (9)
 3,068
 —
 3,068
 —
 —
Total commercial commitments $31,227
 $15,780
 $15,447
 $—
 $—
 $16,030
 $12,962
 $3,068
 $—
 $—
____________ _____________
(1) 
Excludes unamortized discount of $0.3$0.2 million on the Term Loan and unamortized debt issuance costcosts of $8.9$11.1 million.
(2) 
Interest payments for variable interest debt are based on interest rates as of SeptemberJune 30, 2016.2017.
(3) 
Represents separate operating leases for aircraft. During the Current Period, we entered into four new aircraft operating leases.
(4) 
Represents minimum rental payments required under non-operating leases that have initial or remaining non-cancelable lease terms in excess of one year.
(5) 
Represents expected funding for pension benefits in future periods. These amounts are undiscounted and are based on the expectation that both the U.K. and Norway pensionspension plan will be fully funded in approximately threefive years. As of SeptemberJune 30, 2016,2017, we had recorded on our balance sheet $55.0a $60.1 million pension liability associated with these obligations. The timing of the funding is dependent on actuarial valuations and resulting negotiations with the plan trustees.
(6) 
Includes $4.5$4.4 million for final payments for aircraft delivered during the Current Quarterfiscal year 2017 that is included in accounts payable as of SeptemberJune 30, 2016.2017.
(7)
Includes $86.0 million for five aircraft orders that can be cancelled prior to delivery dates. As of June 30, 2017, we made non-refundable deposits of $4.5 million related to these aircraft.
(8) 
Other purchase obligations primarily represent unfilled purchase orders for aircraft parts, commitments associated with upgrading facilities at our bases and non-cancelable power-by-the-hour maintenance commitments. For further details on the non-cancelable power-by-the-hour maintenance commitments, see Note 1 in the “Notes to Consolidated Financial Statements” included in the fiscal year 20162017 Annual Report.
(8)(9) 
Includes $7.8 million related to Eastern and $11.5$3.1 million related to Airnorth as of SeptemberJune 30, 2016.2017. The Eastern AirwaysAirnorth purchase agreement includes ana potential earn-out payableof A$17 million ($13.0 million) to be paid over three years,four years. During fiscal year 2016, a portion of the first year earn-out payment of A$2 million ($1.5 million) was paid as Airnorth achieved agreed performance targets. The remaining Airnorth earn-out, which is contingent upon both the achievement of agreed performance targets and the continued employment of the selling shareholders, that will be included as general and administrative expense in our condensed consolidated statements of operations as earned. The first and second year earn-out payments relating to Eastern were not achieved. The

remaining potential earn-out of $7.8 million would be payable in fiscal year 2018, of which no amounts are accrued as of September 30, 2016. Thefor Airnorth purchase agreement includes a potential earn-out of A$17 million ($13.0 million) to be paid over four years. During fiscal year 2016, a portion of the first year earn-out payment of A$2 million ($1.5 million) was paid as Airnorth achieved agreed performance targets. The fair value of the Airnorth earn-out, which is contingent upon the achievement of agreed performance targets, is A$9.6 million ($7.4 million) as of September 30, 2016 and is included in contingent consideration and other liabilities and deferred credits on our condensed consolidated balance sheet. A portion of the remaining Airnorth earn-out, which is contingent upon both the achievement of agreed performance targets and the continued employment of the selling shareholders, will be included as general and administrative expense in our condensed consolidated statements of operations as earned. The earn-outs for Eastern and Airnorth are remeasured to fair value at each reporting date until the contingency is resolved and any changes in estimated fair value are recorded as accretion expense included in interest expense on our condensed consolidated statements of operations.

Capital Commitments and Other Uses of Cash
We have commitments and options to make capital expenditures over the next five fiscal years to purchase additional aircraft, including aircraft associated with the commitments reflected in the table above. Although a similar number of our existing aircraft may be sold during the same period, the additional aircraft on order are expected to provide incremental fleet capacity in terms of revenue, operating margin and adjusted EBITDAREBITDA margin. See Note 5 in the “Notes to Condensed Consolidated Financial Statements” included elsewhere in this Quarterly Report for a detail of the number of aircraft under commitments and options expected to be delivered in the current and subsequent fivesix fiscal years by aircraft size along with the related expenditures, and for a rollforward of aircraft commitments and options through SeptemberJune 30, 2016.2017.
As discussed under “— Executive Overview — Our Strategy — Capital Allocation Strategy”, cash may also be used for dividend payments and repurchases of Common Stock. Additionally, cash may be used in future periods to repurchase or otherwise retire debt, including our 6 ¼% Senior Notes due 2022, or for any acquisition opportunities we believe are aligned with our long-term strategy.
Financial Condition and Sources of Liquidity
We manage our liquidity through generation of cash from operations while assessing our funding needs on an ongoing basis. Historically, while we have generated cash from operations, financing cash flows also have also been a significant source of liquidity over the past several years. The significant factors that affect our overall liquidity include cash from or used to fund operations, capital expenditure commitments, debt service, pension funding, dividends, adequacy of bank lines of credit and our ability to attract capital on satisfactory terms.
Substantially all of our cash balances are held outside the U.S. and are generally used to meet the liquidity needs of our non-U.S. operations. Most of our cash held outside the U.S. could be repatriated to the U.S., but under current law, any such repatriation would be subject to U.S. federal income tax, as adjusted for applicable foreign tax credits. We have provided for U.S. federal income taxes on undistributed foreign earnings where we have determined that such earnings are not indefinitely reinvested. We expect to meet the continuing funding requirements of our U.S. operations with cash generated by such U.S. operations, cash from earnings generated by non-U.S. operations that are not indefinitely reinvested and our existing Revolving Credit Facility. If cash held by non-U.S. operations is required for funding operations in the U.S., and if U.S. tax has not previously been provided on the earnings of such operations, we would make a provision for additional U.S. tax in connection with repatriating this cash, which may be material to our cash flow and results of operations.
We expect that our cash on deposit as of September 30, 2016July 28, 2017 of $100.7approximately $69.6 million, cash flow from operations, proceeds from aircraft sales, available borrowing capacity under our Revolving Credit Facility ($206.5 million as of July 28, 2017) and proceeds from the $230 million secured equipment financing described under “— Executive Overview — Market Outlook — Recent Events — July 2017 Credit Agreement”, as well as any future financings (which may include additional equipment financings and capital market transactions), will be sufficient to satisfy our operating needs, existing capital commitments and other contractual cash obligations, including our oildebt obligations. However, if we are unable to successfully fund the $230 million secured equipment financing discussed below, we will need to pursue other financings or capital market transactions, complete aircraft sales or defer capital expenditures in order to have sufficient liquidity to satisfy existing capital commitments and gas aircraft purchase commitments to service our oil and gas clients and remaining anticipated capital requirements in connection with our U.K. SAR contract.other contractual obligations, including debt obligations over the next 12-month period. The available borrowing capacity under our Revolving Credit Facility was $166.0$214.1 million as of SeptemberJune 30, 2016.2017. While we plan to continue to be disciplined concerning future capital commitments, we also intend to continue managing our capital structure and liquidity position with external financings, as needed. Our strategy will involve funding our short-term liquidity requirements with borrowings under our Revolving Credit Facility and funding our long-term financingcapital needs from among aircraftwith operating leases, bank debt, private and public debt and equity offerings, while maintainingofferings.
On July 17, 2017, one of our wholly-owned subsidiaries entered into a prudent capital structure.term loan credit agreement for an aggregate $230 million secured equipment financing with PK Transportation Finance Ireland Limited and several banks, other financial institutions and other lenders. The borrower’s obligations under the credit agreement will be guaranteed by us and secured by 24 aircraft. The financing is expected to fund on or before August 30, 2017 unless otherwise extended. The proceeds are expected to be used to, among other things, repay portions of our outstanding term loan indebtedness under (1) the Amended and Restated Revolving Credit and Term Loan Agreement, dated as of November 22, 2010, by and among us, as borrower, the lenders from time to time party thereto, and SunTrust Bank, as administrative agent, and (2) the Term Loan Credit Agreement, dated as of November 5, 2015, by and among us, as borrower, the lenders from time to time party thereto, and SunTrust Bank, as administrative agent, and for general corporate purposes.
We believe we have a number of advantages to enhance our competitiveness during an extended downturn, including:
A modern fleet that allows for deferral of new aircraft deliveries, reducing future capital expenditure needs without compromising safety or client service,
Access to capital markets to capitalize on commercial opportunities, and
A mostly owned fleet of aircraft that gives us the ability to sell aircraft or decline renewal options and return leased aircraft to lessors.

Critical Accounting Policies and Estimates
See Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies and Estimates” in the fiscal year 20162017 Annual Report for a discussion of our critical accounting policies. There have been no material changes to our critical accounting policies and estimates provided in the fiscal year 20162017 Annual Report.
Recent Accounting Pronouncements
See Note 1 in the “Notes to Condensed Consolidated Financial Statements” included elsewhere in this Quarterly Report for a discussion of recent accounting pronouncements.
Item 3.    Quantitative and Qualitative Disclosures about Market Risk.
We are subject to certain market risks arising from the use of financial instruments in the ordinary course of business. This risk arises primarily as a result of potential changes in the fair market value of financial instruments that would result from adverse fluctuations in foreign currency exchange rates, credit risk, and interest rates as discussed in “Item 7A. Quantitative and Qualitative Disclosures About Market Risk” in the fiscal year 20162017 Annual Report and Note 1 in the “Notes to Condensed Consolidated Financial Statements” included elsewhere in this Quarterly Report.
Item 4.    Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
We carried out an evaluation, under the supervision of and with the participation of our management, including Jonathan E. Baliff, our Chief Executive Officer (“CEO”("CEO"), and L. Don Miller, our Chief Financial Officer (“CFO”), of the effectiveness of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) as of SeptemberJune 30, 20162017. Based on that evaluation, our CEO and CFO concluded that such disclosure controls and procedures were effective to ensure that information required to be disclosed in our periodic reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the Securities and Exchange Commission’s rules and forms and such information is accumulated and communicated to our management as appropriate to allow for timely decisions regarding required disclosure under the Exchange Act.
Changes in Internal Control Over Financial Reporting
There have been no changes in our internal control over financial reporting during the quarter ended SeptemberJune 30, 20162017 that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

PART II — OTHER INFORMATION
 
Item 1.    Legal Proceedings.
We have certain actions or claims pending that have been discussed and previously reported in Part I. Item 3. “Legal Proceedings” in the fiscal year 20162017 Annual Report. Developments in these previously reported matters, if any, are described in Note 5 in the “Notes to Condensed Consolidated Financial Statements” included elsewhere in this Quarterly Report.
Item 1A. Risk Factors.
ThereExcept as discussed below, there have been no material changes during the three and six months ended SeptemberJune 30, 20162017 in our “Risk Factors” as discussed in the fiscal year 20162017 Annual Report and our Quarterly Report on Form 10-Q for the quarter ended June 30, 2016.Report.
Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds and Issuer Repurchases of Equity Securities.Securities
Period Total Number of Shares Purchased Average Price Paid Per Share 
Total Number of Shares Purchased as Part of Publicly Announced Program (1)
 
Maximum Number (or Approximate Dollar Value) of Shares That May Yet Be Purchased Under the Plans or Programs (1)
         
July 1, 2016 - September 30, 2016 —
 $—
 —
 $150,000,000
Not applicable.
______________
(1)
As of November 3, 2016, we had $150.0 millionof repurchase authority remaining authorized for share repurchases through November 4, 2016. The timing and method of any repurchases under the program will depend on a variety of factors, is subject to our results of operations, financial condition, cash requirements, and other factors and restrictions under applicable law and our debt agreements, and may be suspended or discontinued at any time.
Item 3.    Defaults Upon Senior Securities.Securities
Not applicable.
Item 4.    Mine Safety Disclosures.Disclosures
Not applicable.
Item 5.    Other Information.Information
None.

Item 6.    Exhibits.Exhibits
The following exhibits are filed as part of this Quarterly Report:
Exhibit
Number
 Description of Exhibit
   
10.110.1† Ninth Amendment to AmendedTerms and Restated Revolving Credit and Term Loan Agreement, dated asConditions of September 16, 2016Nonqualified Stock Option Award (incorporated by reference to Exhibit 10.1 to the Company’sCompany's Current Report on Form 8-K dated September 19, 2016)June 16, 2017).
10.2†Summary of Terms and Conditions of Officer Restricted Stock Unit Award (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K dated June 16, 2017).
10.3†Summary of Terms and Conditions of Officer Performance Cash Award (incorporated by reference to Exhibit 10.3 to the Company's Current Report on Form 8-K dated June 16, 2017).
10.4†Bristow Group Inc. Fiscal Year 2018 Annual Incentive Compensation Plan (incorporated by reference to Exhibit 10.4 to the Company's Current Report on Form 8-K dated June 16, 2017).
10.5†Supplement to Bristow Group Inc. Fiscal Year 2018 Annual Incentive Compensation Plan (incorporated by reference to Exhibit 10.5 to the Company's Current Report on Form 8-K dated June 16, 2017).
   
10.210.6† Second Amendment to Term Loan CreditRetention Agreement between the Company and L. Don Miller, dated as of September 16, 2016June 12, 2017 (incorporated by reference to Exhibit 10.210.6 to the Company’sCompany's Current Report on Form 8-K dated September 19, 2016)June 16, 2017).
10.7†Retention Agreement between the Company and Brian J. Allman, dated June 14, 2017 (incorporated by reference to Exhibit 10.7 to the Company's Current Report on Form 8-K dated June 16, 2017).
10.8†Separation Agreement and Release in Full dated June 8, 2017 between the Company and Chet Akiri (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K dated June 30, 2017).
10.9†Separation Agreement and Release in Full dated June 8, 2017 between the Company and William Collins (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K dated July 6, 2017).
10.10†Credit Agreement, dated as of July 17, 2017 (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K dated July 18, 2017).
10.11†Separation Agreement and Release in Full dated June 8, 2017 between the Company and E. Chipman Earle (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K dated July 18, 2017).
   
15.1* Letter from KPMG LLP dated NovemberAugust 3, 2016,2017, regarding unaudited interim information.
  
31.1** Rule 13a-14(a) Certification by Chief Executive Officer of Registrant.
  
31.2** Rule 13a-14(a) Certification by Chief Financial Officer of Registrant
  
32.1** Certification of Chief Executive Officer of Registrant pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
  
32.2** Certification of Chief Financial Officer of Registrant pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
  
101.INS XBRL Instance Document.
  
101.SCH XBRL Taxonomy Extension Schema Document.
  
101.CAL XBRL Taxonomy Extension Calculation Linkbase Document.
  
101.DEF XBRL Taxonomy Extension Definition Linkbase Document.
  
101.LAB XBRL Taxonomy Extension Labels Linkbase Document.
  
101.PRE XBRL Taxonomy Extension Presentation Linkbase Document.
   
* Filed herewith.
   
** Furnished herewith.
   
†Compensatory Plan or Arrangement.
 

SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
 
 BRISTOW GROUP INC.
   
 By:/s/ L. Don Miller
  
L. Don Miller
Senior Vice President and
Chief Financial Officer
 
 By:/s/ Brian J. Allman
  
Brian J. Allman
Vice President,
Chief Accounting Officer
NovemberAugust 3, 20162017

Index to Exhibits.
76
Exhibit
Number
Description of Exhibit
10.1†Terms and Conditions of Nonqualified Stock Option Award (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K dated June 16, 2017).
10.2†Summary of Terms and Conditions of Officer Restricted Stock Unit Award (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K dated June 16, 2017).
10.3†Summary of Terms and Conditions of Officer Performance Cash Award (incorporated by reference to Exhibit 10.3 to the Company's Current Report on Form 8-K dated June 16, 2017).
10.4†Bristow Group Inc. Fiscal Year 2018 Annual Incentive Compensation Plan (incorporated by reference to Exhibit 10.4 to the Company's Current Report on Form 8-K dated June 16, 2017).
10.5†Supplement to Bristow Group Inc. Fiscal Year 2018 Annual Incentive Compensation Plan (incorporated by reference to Exhibit 10.5 to the Company's Current Report on Form 8-K dated June 16, 2017).
10.6†Retention Agreement between the Company and L. Don Miller, dated June 12, 2017 (incorporated by reference to Exhibit 10.6 to the Company's Current Report on Form 8-K dated June 16, 2017).
10.7†Retention Agreement between the Company and Brian J. Allman, dated June 14, 2017 (incorporated by reference to Exhibit 10.7 to the Company's Current Report on Form 8-K dated June 16, 2017).
10.8†Separation Agreement and Release in Full dated June 8, 2017 between the Company and Chet Akiri (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K dated June 30, 2017).
10.9†Separation Agreement and Release in Full dated June 8, 2017 between the Company and William Collins (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K dated July 6, 2017).
10.10†Credit Agreement, dated as of July 17, 2017 (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K dated July 18, 2017).
10.11†Separation Agreement and Release in Full dated June 8, 2017 between the Company and E. Chipman Earle (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K dated July 18, 2017).
15.1*Letter from KPMG LLP dated August 3, 2017, regarding unaudited interim information.
31.1**Rule 13a-14(a) Certification by Chief Executive Officer of Registrant.
31.2**Rule 13a-14(a) Certification by Chief Financial Officer of Registrant
32.1**Certification of Chief Executive Officer of Registrant pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2**Certification of Chief Financial Officer of Registrant pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INSXBRL Instance Document.
101.SCHXBRL Taxonomy Extension Schema Document.
101.CALXBRL Taxonomy Extension Calculation Linkbase Document.
101.DEFXBRL Taxonomy Extension Definition Linkbase Document.
101.LABXBRL Taxonomy Extension Labels Linkbase Document.
101.PREXBRL Taxonomy Extension Presentation Linkbase Document.
*Filed herewith.
**Furnished herewith.
†Compensatory Plan or Arrangement.